(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
OVERSEAS
FUND - CLASS A
SEMIANNUAL REPORT
APRIL 30, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 23 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 27 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND
INCLUDING
CHARGES AND EXPENSES, CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE
PROSPECTUS.
READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been some positive market indications so far in 1995,
no one can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such 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, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate 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. Each performance figure
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells stocks
that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class A -2.54% -2.68% 43.55% 41.97%
Advisor Overseas - Class A
(incl. max. 4.75% sales -7.17% -7.30% 36.73% 35.23%
charge)
Morgan Stanley EAFE Index 1.24% 5.59% 43.03% 39.57%
Average International Fund -4.55% -1.09% 43.75% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on April 23, 1990. For example, if you invested $1,000 in
a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Morgan Stanley EAFE Index - a broad measure of the
performance of stocks in Europe, Australia, and the Far East. To measure
how the fund's performance stacked up against its peers, you can compare it
to the average international fund, which reflects the performance of 225
funds with similar objectives tracked by Lipper Analytical Services over
the past six months. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class A -2.68% 7.50% 7.22%
Advisor Overseas - Class A
(incl. max. 4.75% sales charge) -7.30% 6.46% 6.19%
Morgan Stanley EAFE Index 5.59% 7.42% 6.77%
Average International Fund -1.09% 7.33% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or 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
Fidelity AdvisorEurope, Australia,
04/23/90 9525.00 10000.00
04/30/90 9420.23 9758.32
05/31/90 9829.80 10871.75
06/30/90 10325.10 10776.00
07/31/90 10934.70 10927.78
08/31/90 9629.78 9866.60
09/30/90 8810.63 8491.55
10/31/90 9096.38 9814.69
11/30/90 9105.90 9235.74
12/31/90 9017.59 9385.36
01/31/91 9238.47 9688.93
02/28/91 9651.42 10727.57
03/31/91 9113.63 10083.57
04/30/91 9104.02 10182.59
05/31/91 9113.63 10288.84
06/30/91 8431.79 9532.81
07/31/91 8911.96 10001.17
08/31/91 9046.40 9798.07
09/30/91 9516.97 10350.28
10/31/91 9392.13 10497.00
11/30/91 9152.04 10006.96
12/31/91 9628.87 10523.75
01/31/92 9658.11 10298.96
02/29/92 9882.26 9930.34
03/31/92 9580.14 9274.77
04/30/92 10077.18 9318.86
05/31/92 10486.50 9942.63
06/30/92 10320.82 9471.02
07/31/92 9921.24 9228.63
08/31/92 9648.36 9807.46
09/30/92 9502.17 9613.79
10/31/92 8839.46 9109.50
11/30/92 8722.51 9195.22
12/31/92 9163.43 9242.78
01/31/93 9626.53 9241.65
02/28/93 9833.44 9520.81
03/31/93 10434.49 10350.70
04/30/93 11242.44 11333.00
05/31/93 11538.04 11572.36
06/30/93 11222.74 11391.80
07/31/93 11774.51 11790.57
08/31/93 12552.91 12427.06
09/30/93 12424.82 12147.34
10/31/93 12740.12 12521.69
11/30/93 12247.47 11427.16
12/31/93 12997.05 12252.29
01/31/94 13855.63 13288.16
02/28/94 13668.12 13251.36
03/31/94 13322.72 12680.60
04/30/94 13895.10 13218.63
05/31/94 13638.52 13142.74
06/30/94 13529.96 13328.47
07/31/94 13875.36 13456.65
08/31/94 14003.66 13775.24
09/30/94 13569.44 13341.38
10/31/94 13875.36 13785.64
11/30/94 13332.59 13123.10
12/31/94 13254.15 13205.28
01/31/95 12707.28 12697.99
02/28/95 12737.11 12661.55
03/31/95 13134.84 13451.26
04/28/95 13522.62 13957.15
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Advisor Overseas Fund - Class A on April 23, 1990, when the fund started,
and paid the maximum 4.75% sales charge. As the chart shows, by April 30,
1995, the value of your investment would have grown to $13,523 - a 35.23%
increase on your initial investment. For comparison, look at how the Morgan
Stanley EAFE did over the same period. With dividends reinvested, the same
$10,000 investment would have grown to $13,957 - a 39.57% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the
globe offer the potential for
significant growth over time;
however, investing in foreign
markets means assuming
greater risks than investing in
the United States. Factors
like changes in a country's
financial markets, its local
political and economic
climate, and the fluctuating
value of its currency create
these risks. For these
reasons an international
fund's performance may be
more volatile than a fund that
invests exclusively in the
United States.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Hickling, Portfolio Manager of Fidelity Advisor
Overseas Fund
Q. JOHN, HOW HAS THE FUND PERFORMED?
A. For the six and 12 months ended April 30, 1995, the fund had total
returns of -2.54% and -2.68%, respectively. To compare, the Morgan Stanley
EAFE Index - a broad measure of stocks in Europe, Australia and the Far
East - returned 1.24% and 5.59% during the same periods. Over the same six-
and 12-month periods, the average international fund had returns of -4.55%
and -1.09%, respectively, according to Lipper Analytical Services.
Q. WHAT WERE THE FACTORS DRIVING THE FUND'S RELATIVE PERFORMANCE OVER THE
PAST SIX MONTHS?
A. I believe the fund beat the Lipper average because the fund had less
invested in emerging markets - which performed poorly over the period -
than most funds in the Lipper group. The major differences between the
fund's performance and the EAFE index are very simple: the strength of the
yen and weighting in Japan. Even though the Japanese market has performed
poorly, the strength of the yen has been by far the most important factor
affecting dollar-based investments. And even though the market has dropped
significantly in yen terms, the EAFE index return indicates a positive
return in dollar terms. The fund had about half the weighting in Japan that
the index did, so the index performed better.
Q. WHAT'S BEEN THE STORY BEHIND THE FUND'S INVESTMENTS IN JAPAN?
A. Even though Japan has the highest country representation in the fund,
I've kept the fund underweighted there, relative to the index. I believe
this position was the right one, considering the downward direction of the
Japanese market. The drop was due to a number of factors that affected
investor sentiment: the Barings debacle, the Kobe earthquake and the subway
gas attack. Alone, these occurrences only had fleeting impact, but together
they set a negative tone over the recent past. The Japanese investments
I've kept in the fund are mainly consumer electronics companies - such as
Toshiba and Hitachi - and other manufacturers and exporters that are poised
to take advantage of economic activity both in Japan and globally. One
might think that the strong yen has hurt these companies, and it has, in
the short term. However, I would submit that these are the types of
companies in Japan that have been exposed to the appreciating yen for some
time now, and have had, as a result, the experience and exposure to
competition abroad that places them well in a global context to cut costs
and compete.
Q. THE COUNTRY WITH THE SECOND-LARGEST REPRESENTATION IN THE FUND IS THE
UNITED KINGDOM. WHERE HAVE YOU FOUND OPPORTUNITIES THERE?
A. I entered this market at the right time, as the U.K. has been one of the
better performing markets in the latter half of the period due to two
factors. First, I believe its correlation with the U.S. helps, as the U.S.
market has been one of the strongest performers in the world during the
period. In addition, the sterling has been weak against other currencies on
the European continent, which helps British products in a competitive
context. I've been focusing the fund's British investments on growth stocks
of consumer nondurable companies, such as Guinness, Cadbury-Schweppes and
Bass, as well as financial stocks such as Barclay's and National
Westminster. I've also found some of the oil company stocks to be
attractive, such as Shell Transport and Lasmo.
Q. HOW HAS THE BROAD EUROPEAN MARKET FARED?
A. It's been a disappointment. I thought those markets would have caught up
to the U.S. market by now. Strengthening currencies and high interest rates
have hurt. However, going forward I'm hoping that with economic trends
pointing to slower growth and lower inflation, the currency and interest
rate backdrop will become more positive. I've focused my European
investments on financial, growth-oriented or interest-rate sensitive
stocks, including Unilever, Nestle, Swiss Bank and CS Holdings, all of
which are among the fund's top 5 investments. At the same time, I've also
invested in companies that are appealing, even though they come from
sectors that are cyclical - those that rise and fall with the economy. For
example, I've invested in two Scandinavian paper companies, Modo and
Svenska Cellulosa. Modo was attractive because it was the cheapest stock in
this out-of-favor sector. Svenska Cellulosa looked attractive because of
its restructuring efforts.
Q. MANY EMERGING MARKETS SUFFERED IN DECEMBER 1994, AFTER MEXICO DEVALUED
ITS CURRENCY. DID THAT NEGATIVELY AFFECT THE FUND?
A. It didn't have much of an effect because I didn't have many investments
in Latin American emerging markets. At the end of November, the fund had
roughly a 0.9% stake in Mexico, a 0.1% stake each in Argentina and Brazil,
and a very small investment in Chile. I had my eye on these emerging
markets, but had yet to make any significant moves. However, now that these
markets have fallen, I'll be looking for buy opportunities.
Q. WHAT ABOUT SOUTHEAST ASIA?
A. The fund had virtually no investments there during most of the period,
which was a positive since these markets performed poorly. However, there
are investment opportunities in Southeast Asia now that are attractive,
both in terms of favorable market backdrop and stock prices. In Thailand,
I've targeted banks and financial stocks, including Krung Thai Bank. In
Indonesia, my focus has been on retailers such as Matahari - known as the
Wal-Mart of Indonesia - and a cigarette company, Sampoerna.
Q. WHAT'S YOUR OUTLOOK GOING FORWARD?
A. A lot of foreign markets have lagged the U.S. fairly significantly. For
the first time in a long time, it appears these markets are starting to
perform well, and may catch up to the U.S. We've seen a bond market rally
in the U.S. and Japan, indicating that investors are less fearful of
inflation stemming from growth that is too strong. This might bring a
little more optimism to some of the markets. As far as specific countries
and regions are concerned, I think Japan's prospects look good because I
expect the country's economy to continue to improve. I'm also fairly
optimistic about Europe because I expect - barring any major interest rate
increases in the U.S. - that stock and bond markets there will begin to
recover. Emerging markets are starting to offer some inexpensive
opportunities. Overall, I'll continue to look for opportunities in any
markets that appear to have excellent value.
FUND FACTS
GOAL: to increase the value
of the fund's shares by
investing mainly in stocks in
Europe, the Far East and the
Pacific Basin
START DATE: April 23, 1990
SIZE: as of April 30, 1995,
more than $685 million
MANAGER: John Hickling,
since 1993; joined Fidelity in
1982
(checkmark)
JOHN HICKLING ON CENTRAL
EUROPEAN EMERGING MARKETS:
"I've recently been on a
research trip through Central
Europe, in order to identify
companies whose stocks
realistically can provide
benefit as investments for the
fund. I want to know what to
buy, rather than blindly piling
into various markets. While I
didn't find any direct
investment ideas for the fund,
I think it bodes well for value
opportunities in the
not-too-distant future, should
some of these markets
continue to fall. Some of the
markets are dramatically off
their highs of last year. For
example, the market in the
Czech Republic peaked in
early 1994 at about 1200 on
the Czech index, and is now
at about 400.
"Hungarian companies stood
out as the most attractive,
including the telephone
company, Matav, and several
drug companies, such as
Egis. I didn't find many
attractive possibilities in
Poland and the Czech
Republic, although the
brewing industry in the latter
is starting to look interesting.
The industry is consolidating,
and some major global
players such as Bass and
Anheuser-Busch are trying to
increase their exposure there.
"I think we're close to having
some reasonable buying
opportunities in some of the
Central European areas, but
stock prices have to go down
and business has to get better
before I'll invest there."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF APRIL 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Deutsche Bank AG
(Germany, Banks) 1.2 1.4
Unilever NV Ord.
(Netherlands, Household 1.2 0.0
Products)
Nestle SA (Reg.)
(Switzerland, Foods) 1.1 0.0
C. S. Holdings (Bearer)
(Switzerland, Banks) 1.1 0.9
Swiss Bank Corp. (Bearer)
(Switzerland, Banks) 1.1 0.8
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Finance 22.8 18.6
Durables 8.5 9.8
Nondurables 8.0 2.3
Utilities 6.4 4.6
Basic Industries 5.6 10.4
TOP FIVE COUNTRIES AS OF APRIL 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
Japan 19.9 24.5
United Kingdom 12.7 8.9
France 8.8 8.2
Switzerland 8.1 6.3
Germany 5.8 7.5
ASSET ALLOCATION
AS OF APRIL 30, 1995 AS OF OCTOBER 31, 1994
Row: 1, Col: 1, Value: 13.7
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 45.8
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 1, Value: 17.9
Row: 1, Col: 2, Value: 1.8
Row: 1, Col: 3, Value: 41.5
Row: 1, Col: 4, Value: 40.0
Stocks 85.8%
Bonds 0.5%
Short-term
and other
Investments 13.7%
Stocks 81.5%
Bonds 0.6%
Short-term
and other
Investments 17.9%
INVESTMENTS APRIL 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.0%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.5%
Buenos Aires Embotelladora SA sponsored ADR 21,000 $ 577,500
Perez Companc Class B 162,722 663,873
Telecom Argentina Stet France Telecom SA 126,000 546,812
YPF Sociedad Anonima sponsored ADR representing
Class D shares 82,200 1,664,550
3,452,735
AUSTRALIA - 1.9%
Brambles Industries Ltd. 238,150 2,349,809
FAI Insurance Ltd. Ord. 1,410,500 656,870
Lend Lease Corp. Ltd. 120,000 1,533,304
Pacific Dunlop 618,500 1,521,176
Pioneer International Ltd. 485,000 1,178,720
TNT Ltd. (a) 1,300,000 1,863,511
Westpac Banking Corp. 1,020,000 3,755,548
12,858,938
AUSTRIA - 0.9%
Mayr Melnhof Karton AG (a) 16,100 931,228
OEMV AG (a) 32,200 3,328,643
VA Technologie AG (a) 4,300 474,495
VA Technologie AG (a)(d) 13,100 1,445,554
6,179,920
BELGIUM - 1.3%
Bekaert SA 400 311,641
Delhaize Freres & Cie Le Lion SA 80,300 3,558,878
Petrofina SA 3,500 1,103,261
Petrofina SA (warrants) (a) 175 2,945
Solvay & Cie SA 7,393 4,017,935
8,994,660
BERMUDA - 0.0%
Consolidated Electric Power Asia Ltd. sponsored ADR (a)(d) 10,700 230,050
CANADA - 0.0%
Midland Walwyn, Inc. 81,200 449,132
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CHILE - 0.0%
Vina Concha y Toro SA sponsored ADR 21,600 $ 415,800
FINLAND - 0.5%
Pohjola Class B 78,230 1,054,931
Valmet Corp. OY Ord. 105,400 2,390,286
3,445,217
FRANCE - 8.8%
Accor SA 33,341 3,820,076
Alcatel Alsthom CGE 15,200 1,408,065
Axa SA 29,000 1,527,029
BQE National Paris Ord. 117,280 5,694,244
Carnaudmetalbox SA 30,000 1,062,875
Club Mediterranee SA Ord. (a) 22,000 2,216,760
Compagnie Bancaire Ord. 32,600 3,596,099
Credit Lyonnais 11,800 582,749
Elf Aquitaine 78,288 6,245,546
Generale des Eaux 47,900 5,040,569
Havas SA 27,700 2,390,444
Imetal SA Ord. 120 12,725
L'Oreal Co. Ord. 11,800 3,101,920
Lafarge Coppee SA 33,500 2,606,501
Lyonnaise des Eaux Dumez SA 8,000 794,393
Michelin Class B (Reg.) 17,300 774,941
Peugeot SA Ord. (a) 10,200 1,469,132
Rhone Poulenc SA Class A 137,000 3,334,201
Societe Generale Class A 36,900 4,047,943
Total SA Class B 119,700 7,470,155
Unibail 15,400 1,542,346
Vallourec SA (a) 33,300 1,660,772
60,399,485
GERMANY - 5.6%
Allianz Versich Holdings Ord. (Reg.) 1,100 2,013,844
BMW AG 8,690 4,448,859
Continental Gummi-Werke AG 14,200 2,109,241
Deutsche Bank AG 16,300 7,989,862
Duerr Beteiligungs AG (RFD) 5,100 1,618,055
Gildemeister AG (a) 16,203 1,401,997
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - CONTINUED
Hoechst, Fried Krupp AG Ord. 20,500 $ 4,369,470
Karstadt AG 6,300 2,709,702
Kaufhof Holding AG 7,800 2,767,134
SGL Carbon AG (a)(d) 17,000 677,867
Schering AG 3,400 2,521,470
Schmalbach-Lubeca AG 2,600 523,993
Veba AG Ord. 14,200 5,283,340
38,434,834
HONG KONG - 1.6%
Amoy Properties Ltd. 1,082,000 901,436
Consolidated Electric Power Asia Ltd. 332,000 726,868
Dickson Concepts International Ltd. 1,085,000 560,576
HSBC Holdings PLC 450,000 5,216,675
Hong Kong Land Holdings Ltd. 1,267,000 2,381,960
Hopewell Holdings Ltd. 978,000 694,781
Peregrine Investments Holdings Ltd. 168,000 176,854
Sun Hung Kai Properties Ltd. 84,000 535,986
11,195,136
INDIA - 0.1%
Reliance Industries Ltd. (a) 51,900 817,425
INDONESIA - 0.7%
Bank International Indonesia PT Ord. 298,000 613,883
Jakarta International Hotels & Development Ord. 904,000 748,946
Matahari Putra Prima PT (For. Reg.) 210,000 305,642
Sampoerna Hanjaya Mandala (For. Reg.) 495,850 2,908,929
4,577,400
IRELAND - 0.9%
Bank of Ireland U.S. Holdings, Inc. 529,800 2,869,566
Fyffes PLC 725,000 1,227,135
Independent Newspapers PLC 255,800 1,154,579
Waterford Wedgwood PLC Unit (1 Waterford Wedgewood, Inc.
(right) & 1 Waterford Wedgewood, Inc. Ord.) 838,600 743,503
5,994,783
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ITALY - 1.2%
Alitalia Linee Aeree Italiane Class A (a) 355,800 $ 169,137
Assicurazioni Generali Spa 112,000 2,698,232
Fiat Spa (a) 590,600 2,410,014
Instituto Mobiliare Italiano 152,900 935,571
Montedison SPA Ord. (a) 2,900,000 2,123,264
Simint Ord. (a) 398,996 2,621
8,338,839
JAPAN - 19.9%
ADO Electronic Industrial Co. 15,000 315,339
Acom Co. Ltd. 13,200 377,837
Advantest Corp. 48,000 1,550,611
Aida Engineering Ltd. Ord. 99,000 781,935
Akita Bank Ltd. 46,200 397,826
Amada Metrecs Co. Ltd. 46,000 677,475
Amadasonoike Co. Ltd. 162,000 1,241,048
Autobacs Seven Co. Ltd. 16,800 1,749,938
Bridgestone Corp. 176,000 2,842,924
Canon, Inc. 234,000 3,863,174
Catena Corp. 29,400 439,979
Daicel Chemical Industries Co. 220,000 1,285,588
East Japan Railway Co. Ord. 270 1,401,390
Fanuc Ltd. 49,700 2,243,126
Fujitsu Ltd. 257,000 2,622,045
Futaba Industrial Co. Ltd. 69,000 1,196,508
Hachijuni Bank Ltd. 42,000 533,761
Hankyu Department Stores, Inc. 78,000 885,658
Hanshin Department Store Ltd. 49,000 309,033
Higo Bank Ltd. Ord. 64,000 630,916
Hitachi Ltd. 604,000 6,133,620
Honda Motor Co. Ltd. 201,000 3,246,749
Ishihara Sangyo Kaisha Ltd. (a) 250,000 988,775
Japan Airlines Co. Ltd. 300,000 2,137,893
Komatsu Ltd. Ord. 320,000 2,538,867
Konica Corp. 169,000 1,401,057
Marubeni Corp. 267,000 1,468,270
Marukyo Corp. 16,000 381,970
Matsushita Electric Industrial Co. Ltd. 125,000 2,093,355
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Minebea Co. Ltd. 300,000 $ 2,219,847
Mitsubishi Chemical Industries Ltd. 71,000 415,737
Mitsubishi Corp. 89,000 1,120,494
Mitsubishi Estate Co. Ltd. 135,000 1,619,455
Mitsubishi Heavy Industries Ltd. 198,000 1,434,528
Mitsubishi Trust & Banking Corp. 259,000 4,460,480
Mitsui OSK Lines Ltd. 219,000 790,737
Murata Manufacturing Co. Ltd. Ord. 74,000 2,970,723
Nichido Fire & Marine Insurance Co. Ltd. 200,000 1,658,056
Nikko Securities Co. Ltd. 183,000 1,790,984
Nippon Telegraph & Telephone Corp. Ord. 204 1,800,249
Nippon Yusen Kabushiki Kaisha 180,000 1,158,739
Nissan Motor Co. Ltd. Ord. 301,000 2,195,070
Nisshinbo Industries 71,000 706,669
Nitto Denko Corp. 51,000 793,515
Nomura Securities Co. Ltd. 350,000 7,066,927
Omron Corp. 70,000 1,371,815
Pioneer Electronic Corp. 124,000 2,606,806
Rohm Co. Ltd. 60,000 2,772,136
Sankyo Co. Ltd. 152,000 3,646,772
Santen Pharmaceutical Co. Ord. 2,200 55,657
Sanwa Bank Ltd. 32,000 691,728
Seino Transportation Co. Ltd. 73,000 1,387,256
Sekisui House Ltd. 118,000 1,555,674
Sho Bond Corp. Ord. 29,000 957,539
Sony Corp. 112,000 5,640,240
Sumitomo Marine and Fire Insurance Co. Ltd. 210,000 1,763,406
Sumitomo Realty & Development Co. Ltd. 375,000 2,463,034
Sumitomo Rubber Industries Ltd. 108,000 935,115
Sumitomo Trust & Banking Co. Ltd. 210,000 3,167,646
TDK Corp. 43,000 1,961,162
Tadano Ltd. 9,000 80,171
Takashimaya Co. Ltd. 100,000 1,425,263
Takeda Chemical Industries Ltd. 256,000 3,405,427
Tokio Marine & Fire Insurance Co. Ltd. (The) 550,000 6,532,455
Tokyo Style Co. Ltd. 110,000 1,685,374
Toshiba Corp. 716,000 4,753,775
Toyota Motor Corp. 241,000 4,894,708
Tsugami Corp. 96,000 460,644
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Yamanouchi Pharmaceutical Co. Ltd. 173,000 $ 3,883,485
Yoshinoya D&C Co. Ltd. Ord. 30 445,395
136,481,560
MALAYSIA - 1.1%
Aokam Perdana BHD 29,000 130,324
Kuala Lumpur Industries Holdings BHD (a) 290,000 382,754
Magnum Corp. BHD 405,000 737,853
Malaysian Banking BHD 67,000 458,421
Resorts World BHD 218,000 1,147,369
Sime Darby BHD 430,800 1,098,803
Telekom Malaysia BHD 316,000 2,174,898
Tenega Nasional BHD 199,000 886,235
Time Engineering BHD 119,000 286,660
7,303,317
MEXICO - 0.9%
Banacci SA de CV Class C 326,100 551,311
Cemex SA, Series B 301,500 978,663
Cifra SA Class C 874,200 1,226,686
Consorcio G Grupo Dina SA ADR 31,000 116,250
Grupo Carso SA de CV Class A-1 (a) 101,600 549,653
Grupo Dina sponsored ADR, Series L 11,173 27,933
Grupo Financiero Bancomer SA de CV:
sponsored ADR, Series C (d) 47,000 282,000
Series C (a) 2,354,200 700,492
Telefonos de Mexico SA sponsored ADR representing
shares Ord. Class L 48,900 1,479,225
5,912,213
NETHERLANDS - 5.7%
ABN-AMRO Holdings NV 24,500 942,368
AKZO Nobel NV Ord. 48,200 5,589,846
Aegon NV Ord. 13,000 1,009,278
Heineken NV 16,000 2,283,358
International Nederlanden Groep NV 117,032 6,167,913
KLM Royal Dutch Airlines Ord. (a) 105,800 3,217,421
Koninklijke PPT Nederland 114,200 3,980,555
Koninklijke PPT Nederland (a)(d) 37,800 1,317,557
Pirelli Tyre Holdings NV Ord. 315,500 1,951,421
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - CONTINUED
Royal Dutch Petroleum Co. Ord. 36,700 $ 4,528,091
Unilever NV Ord. 59,400 7,948,831
38,936,639
NETHERLANDS ANTILLES - 0.3%
Schlumberger Ltd. 36,500 2,294,938
NORWAY - 2.1%
Bergesen Group:
Class A 33,800 737,849
Class B 155,600 3,371,749
Christiania Bank Free shares Ord. 738,300 1,528,746
Den Norske Bank Class A Free shares (a) 568,800 1,506,455
Norsk Hydro AS 51,250 2,089,487
Orkla AS Class B (non-vtg.) 33,100 1,341,533
Saga Petroleum AS Class B 150,200 2,061,333
Unitor AS 100,000 1,532,905
14,170,057
PAKISTAN - 0.1%
Pakistan Telecommunications Voucher GDR (a)(d) 4,300 447,200
PHILIPPINES - 0.0%
Filinvest Land, Inc. Ord. (a) 1,000,500 280,370
SINGAPORE - 0.7%
Jardine Matheson Holdings Ltd. Ord. 230,134 1,829,565
Kim Engineering Holdings Ltd. 1,372,000 1,249,961
Overseas Union Bank Ltd. (For. Reg.) 135,000 779,591
Van Der Horst Ltd. 186,000 605,767
4,464,884
SPAIN - 3.7%
Banco Bilbao Vizcaya SA Ord. (Reg.) 186,500 5,015,634
Banco de Santander SA (RFD) 9,587 344,806
Banco Intercontinental Espanol 18,000 1,472,661
Corporacion Mapfrecia International de Reaseguros SA (Reg.) 79,450
3,475,334
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - CONTINUED
EL Aguila SA (a) 51,200 $ 396,909
Repsol SA Ord. 91,100 2,892,767
Tabacalera SA, Series A 117,100 3,960,247
Telefonica de Espana SA Ord. 446,200 5,439,700
Union Electrica Fenosa SA 538,300 2,250,002
25,248,060
SWEDEN - 3.3%
Electrolux AB 75,700 3,868,949
Frontline (a) 54,000 148,781
Investor AB Class B Free shares 165,100 4,628,440
Mo Och Domsjoe (Modo) AB 37,500 2,092,230
SKF AB Ord. 39,900 799,759
Skandia International Holding 15,000 256,234
Skandinaviska Enskilda Banken Class A Free shares 490,600 2,291,131
Svenska Cellulosa Aktiebolaget SCA Ord. B 176,300 3,133,034
Volvo AB Class B 308,300 5,797,347
23,015,905
SWITZERLAND - 8.1%
Adia SA (Bearer) (a) 35,700 6,615,734
Alusuisse-Lonza Holding AG (Reg.) 8,333 4,618,114
Baloise Holding (Reg.) 2,845 6,155,048
CIBA-GEIGY AG (Reg.) 7,600 5,201,748
C. S. Holdings (Bearer) 18,711 7,818,058
Fischer (Georg) AG (Reg.) 14,100 3,167,570
Holderbank Financiere Glarus AG (Bearer) 1,452 1,166,423
Nestle SA (Reg.) 8,000 7,825,175
Roche Holdings Ltd. (part. certs.) 900 5,416,521
Swiss Bank Corp. (Bearer) 22,900 7,546,591
55,530,982
THAILAND - 1.1%
Bank of Asia PCL:
(For. Reg.) 174,400 317,511
(For. Reg.) (rights) 17,440 -
Krung Thai Bank (For. Reg.) 921,700 2,793,599
Ruam Pattana Fund II (For.) (a) 1,700,000 968,269
Siam City Bank PCL (For. Reg.) 3,355,200 3,446,663
7,526,042
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TURKEY - 0.3%
Aksigorta (a) 190,300 $ 44,724
Aksigoria (a)(d) 650,000 152,763
Cimentas AS (a) 200,000 148,062
Tofas Turk Otomobil Fabrikasi AS (a) 1,297,700 1,189,446
Tofas Turk Otomobil Fabrikasi AS ADR (d) 44,600 198,470
1,733,465
UNITED KINGDOM - 12.7%
Argyll Group PLC Ord. 323,800 1,492,822
Arjo Wiggins Appleton PLC 474,200 2,071,552
BTR PLC Ord 296,300 1,566,645
Barclays PLC Ord. 578,500 5,958,943
Bass PLC Ord. 401,000 3,548,802
Berkeley Group PLC 72,100 424,222
Booker PLC 54,200 361,713
Boots Co. PLC 216,200 1,777,423
Burmah Oil 102,200 1,438,236
Cadbury-Schweppes PLC Ord. 497,300 3,591,381
De La Rue PLC 257,300 3,716,318
Dixons Group PLC 632,300 2,451,339
Forte PLC 1,091,100 4,010,185
Glaxo Holdings PLC Ord. 272,700 3,228,806
Great Universal Stores PLC Ord Class A 260,000 2,476,999
Guinness PLC Ord. 605,800 4,589,783
Hanson Trust PLC Ord. 324,700 1,237,880
Iceland Group PLC 333,000 950,129
Kleinwort Benson Group Ord. 32,800 339,977
Ladbroke Group PLC Ord. 660,400 1,916,217
Lasmo PLC 543,400 1,471,614
Lloyds Abbey Life PLC 372,500 2,233,748
London International Group PLC (a) 1,955,800 3,468,025
National Westminster Bank PLC Ord. 554,000 4,822,459
Nurdin & Peacock PLC Ord. 194,700 580,634
Redland PLC Ord. 127,700 841,936
Royale Insurance Holdings PLC 570,000 2,784,085
Sainsbury (J.) PLC Ord. 306,492 2,161,535
Scottish Hydro-Electric PLC Ord. 407,400 2,114,667
Scottish Power PLC ADR 506,300 2,758,606
Shanks & McEwan Group PLC 463,300 646,016
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Shell Transport & Trading PLC 386,500 $ 4,585,560
Spring Ram Corp., PLC 1,185,500 783,521
Tesco PLC Ord. 697,100 3,140,812
Unigate Ltd. Ord. 162,800 1,002,496
Vodafone Group PLC 930,600 2,910,247
Whitbread Co. PLC Class A 399,600 3,652,360
87,107,693
TOTAL COMMON STOCKS
(Cost $545,558,612) 576,237,679
PREFERRED STOCKS - 1.8%
NONCONVERTIBLE PREFERRED STOCKS - 1.8%
AUSTRIA - 0.5%
Creditanstal Bankverein 56,600 3,238,929
GERMANY - 0.2%
Henkel KGAA 3,600 1,383,567
ITALY - 1.1%
Banco Ambro Veneto 799,600 1,139,350
Fiat Spa (a) 894,100 2,310,399
SAI Sta Assicuratrice Industriale Spa 156,700 740,780
Stet Societa Finanziaria Telefonica Spa 1,571,000 3,598,894
7,789,423
TOTAL PREFERRED STOCKS
(Cost $11,784,102) 12,411,919
GOVERNMENT OBLIGATIONS (G) - 0.5%
MOODY'S PRINCIPAL
RATINGS (C) AMOUNT (B)
ARGENTINA - 0.1%
Argentina Republic BOCON 0%, 4/1/01 (e) B1 $ 1,542,555 895,888
GOVERNMENT OBLIGATIONS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (B) (NOTE 1)
BRAZIL - 0.1%
Brazil Federative Republic IDU euro 7.8125%,
1/1/01 (e) B1 XEU 630,500 $ 479,968
DENMARK - 0.2%
Danish Government Bullet 7%, 12/15/04 Aa1 DKK 6,250,000 1,029,817
FRANCE - 0.1%
French Government Strips 4/25/23 (f) Aaa FRF 42,000,000 825,103
TOTAL GOVERNMENT OBLIGATIONS
(Cost $3,594,741) 3,230,776
REPURCHASE AGREEMENTS - 13.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.93%, dated
4/28/95 due 5/1/95 $ 93,709,285 93,663,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $654,600,455) $ 685,543,374
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
86,223,871 FRF 7/27/95 $ 17,436,659 $ 408,277
849,223,400 JPY 7/11/95 10,187,058 32,237
675,600,000 ESP 7/12/95 5,437,206 (82,207)
TOTAL CONTRACTS TO SELL
(Receivable amount $33,419,230) $ 33,060,923 $ 358,307
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 4.8%
CURRENCY ABBREVIATIONS
FRF - French franc
DKK - Danish krone
XEU - European currency unit
JPY - Japanese yen
ESP - Spanish peseta
LEGEND
(a) Non-income producing
(b) Principal amount is stated in United States dollars unless otherwise
noted.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,751,461 or 0.7% of net
assets.
(e) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(f) Principal Only Strips represent the right to receive the monthly
principal payments on an underlying pool of mortgage loans.
(g) Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
INCOME TAX INFORMATION
At April 30, 1995, the aggregate cost of investment securities for income
tax purposes was $654,719,418. Net unrealized appreciation aggregated
$30,823,956, of which $57,443,491 related to appreciated investment
securities and $26,619,535 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investment in Securities
Basic Industries - 5.6%
Chemicals & Plastic 2.8
Iron & Steel 0.5
Metals & Mining 0.8
Packaging & Containers 0.4
Paper & Forest Products 1.1
Conglomerates 0.2
Construction & Real Estate - 3.6%
Building Materials 1.1
Construction 0.9
Engineering 0.3
Real Estate 1.1
Real Estate Investment Trusts 0.2
Durables - 8.5%
Autos, Tires, & Accessories 6.0
Consumer Durables 0.1
Consumer Electronics 2.1
Textiles & Apparel 0.3
Energy - 5.5%
Energy Services 0.3
Oil & Gas 5.2
Finance - 22.8%
Banks 14.1
Closed End Investment Company 0.1
Credit & Other Finance 1.0
Insurance 6.0
Securities Industry 1.6
Government Obligations 0.5
Health - 4.5%
Drugs & Pharmaceuticals 4.5
Holding Companies 1.0
Industrial Machinery & Equipment - 3.3%
Electrical Equipment 1.2
Industrial Machinery & Equipment 2.0
Pollution Control 0.1
Media & Leisure - 2.4%
Lodging & Gaming 2.1
Publishing 0.2
Restaurants 0.1
Nondurables - 8.0%
Beverages 2.8
Foods 1.7
Household Products 2.5
Tobacco 1.0
Repurchase Agreements 13.7
Retail & Wholesale - 4.8%
General Merchandise Stores 1.4
Grocery Stores 2.0
Retail, Miscellaneous 1.2
Trading Companies 0.2
Services - 2.3%
Advertising 0.3
Leasing & Rental 0.2
Services 1.8
Technology - 4.2%
Computers & Office Equipment 1.0
Electronic Instruments 0.2
Electronics 2.8
Photographic Equipment 0.2
Transportation - 2.7%
Air Transportation 1.1
Railroads 0.2
Shipping 0.9
Trucking & Freight 0.5
Utilities - 6.4%
Cellular 0.4
Electric Utility 2.1
Telephone Services 3.0
Water 0.9
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 685,543,374
agreements of $93,663,000) (cost $654,600,455) -
See accompanying schedule
Cash 601
Receivable for investments sold 5,097,163
Unrealized appreciation on foreign currency contracts 440,514
Receivable for fund shares sold 4,007,085
Dividends receivable 3,506,248
Interest receivable 53,955
TOTAL ASSETS 698,648,940
LIABILITIES
Payable for investments purchased $ 9,975,473
Unrealized depreciation on foreign currency contracts 82,207
Payable for fund shares redeemed 2,072,216
Accrued management fee 424,722
Distribution fees payable 363,574
Other payables and accrued expenses 292,811
TOTAL LIABILITIES 13,211,003
NET ASSETS $ 685,437,937
Net Assets consist of:
Paid in capital $ 657,026,697
Undistributed net investment income 2,539,865
Accumulated undistributed net realized gain (loss) on (5,481,489)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 31,352,864
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 50,404,769 shares outstanding $ 685,437,937
NET ASSET VALUE and redemption price per share $13.60
($685,437,937 (divided by) 50,404,769 shares)
Maximum offering price per share (100/95.25 of $13.60) $14.28
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 5,806,845
Dividends
Interest 3,216,785
9,023,630
Less foreign taxes withheld (678,163)
TOTAL INCOME 8,345,467
EXPENSES
Management fee $ 2,493,137
Basic fee
Performance adjustment 62,214
Transfer agent fees 1,018,373
Distribution fees 2,109,127
Accounting fees and expenses 173,361
Non-interested trustees' compensation 2,310
Custodian fees and expenses 182,933
Registration fees 59,824
Audit 24,711
Legal 12,104
Reports to shareholders 14,006
Miscellaneous 1,861
TOTAL EXPENSES 6,153,961
NET INVESTMENT INCOME 2,191,506
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (1,822,346)
Foreign currency transactions (3,395,272) (5,217,618)
Change in net unrealized appreciation (depreciation) on:
Investment securities (14,186,652)
Assets and liabilities in foreign currencies 1,187,526 (12,999,126)
NET GAIN (LOSS) (18,216,744)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (16,025,238)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,191,506 $ 197,387
Net investment income
Net realized gain (loss) (5,217,618) 1,176,124
Change in net unrealized appreciation (depreciation) (12,999,126) 26,569,627
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (16,025,238) 27,943,138
FROM OPERATIONS
Distributions to shareholders: (945,495) (363,877)
From net realized gain
In excess of net realized gain (3,817,042) -
TOTAL DISTRIBUTIONS (4,762,537) (363,877)
Share transactions 198,323,436 540,291,103
Net proceeds from sales of shares
Reinvestment of distributions 4,340,737 300,557
Cost of shares redeemed (150,212,031) (135,767,660)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 52,452,142 404,824,000
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,664,367 432,403,261
NET ASSETS
Beginning of period 653,773,570 221,370,309
End of period (including undistributed net investment $ 685,437,937 $ 653,773,570
income of $2,539,865 and $348,359, respectively)
OTHER INFORMATION
Shares
Sold 15,018,076 39,367,897
Issued in reinvestment of distributions 327,371 23,685
Redeemed (11,454,796) (9,994,332)
Net increase (decrease) 3,890,651 29,397,250
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX YEAR ENDED OCTOBER 31, APRIL 23, 1990
MONTHS (COMMENCEME
ENDED NT OF
APRIL 30, OPERATIONS) TO
1995 OCTOBER 31,
(UNAUDITE 1994 1993 1992 1991 1990
D)
SELECTED PER-SHARE DATA
Net asset value, $ 14.06 $ 12.93 $ 9.07 $ 9.78 $ 9.55 $ 10.00
beginning of period
Income from
Investment
Operations
Net investment .04 .01 .03 .05 .14 .05
income
Net realized and (.40) 1.14 3.93 (.62) .17 (.50)
unrealized gain
(loss)
Total from investment (.36) 1.15 3.96 (.57) .31 (.45)
operations
Less Distributions - - (.07) (.14) (.07) -
From net
investment income
From net realized (.02) (.02) (.03) - (.01)E -
gain E
In excess of net (.08) - - - - -
realized gain
Total distributions (.10) (.02) (.10) (.14) (.08) -
Net asset value, end $ 13.60 $ 14.06 $ 12.93 $ 9.07 $ 9.78 $ 9.55
of period
TOTAL RETURNC (2.54)% 8.91% 44.13% (5.88) 3.25% (4.50)%
% B
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 685,438 $ 653,774 $ 221,370 $ 18,652 $ 19,091 $ 18,161
period (000
omitted)
Ratio of expenses to 1.94% 2.12% 2.38% 2.64% 2.85% 3.07%A,
average net assets A D
Ratio of net .69% .05% (.18) .48% 1.48% 1.45%A
investment income A %
to average net
assets
Portfolio turnover rate 45% 34% 42% 168% 226% 137%A
A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Overseas Fund - Class A (the fund) is a fund of Fidelity
Advisor Series VII (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities for which quotations are not readily available are valued
primarily using dealer-supplied valuations or at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities
maturing within sixty days of their purchase date 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 forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. 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 that it distributes 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. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Certain foreign currency gains (losses) are taxable as
ordinary income and, therefore, increase (decrease) taxable ordinary income
available for distribution.
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 foreign
currency transactions and 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 and may
affect the per share allocation between net investment income and realized
and unrealiazed gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
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.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may use foreign currency contracts to facilitate
transactions in foreign securities and to manage the fund's currency
exposure. Contracts to buy generally are used to acquire exposure to
foreign currencies, while contracts to sell are used to hedge the fund's
investments against currency fluctuations. Also, a contract to buy or sell
can offset a previous contract. These contracts involve market risk in
excess of the unrealized gain or loss reflected in the fund's Statement of
Assets and Liabilities. The U.S. dollar value of the currencies the fund
has committed to buy or sell is shown in the schedule of investments under
the caption "Forward Foreign Currency Contracts." This amount represents
the aggregate exposure to each currency the fund has acquired or hedged
through currency contracts at period end. 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 forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
2. OPERATING POLICIES-
CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
Contracts that have been offset with different counterparties are reflected
as both a contract to buy and a contract to sell in the schedule of
investments under the caption "Forward Foreign Currency Contracts."
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 balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. FMR, the fund's
investment adviser, is responsible for determining that the value of these
underlying securities remains at least equal to the resale price.
3. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $191,545,726 and $119,513,427, respectively.
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic 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 FMR. The
rates ranged from .2700% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .45%. The
basic fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .20%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. For the period,
the management fee was equivalent to an annualized rate of .79% of average
net assets after the performance adjustment.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisers,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the sub-advisory
arrangements, FMR may receive investment advice and research
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE - CONTINUED
services and may grant the sub-advisers investment management authority to
buy and sell securities. FMR pays its sub-advisers either a portion of its
management fee or a fee based on costs incurred for these services. FIIA
pays FIIAL U.K. a fee based on costs incurred for either service.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, the
fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a
distribution and service fee that is based on an annual rate of .65% of its
average net assets. For the period, the fund paid FDC $2,109,127 of which
$1,611,519 was paid to securities dealers, banks and other financial
institutions for selling shares of the fund and providing shareholder
support services.
In addition, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.No payments were made under the Plans during
the period.
SALES LOAD. FDC received sales charges for selling shares of Class A. The
sales charge rates ranged from 2.00% to 4.75% based on purchase amounts of
less than $1,000,000. Purchase amounts of $1,000,000 or more are not
charged a sales load. For the period, FDC received $2,509,050 of which
$2,116,108 was paid to securities dealers, banks and other financial
institutions.
TRANSFER AGENT FEES. State Street Bank and Trust Company (SSB) is the
transfer, dividend disbursing and shareholder servicing agent for the fund.
SSB has an arrangement for certain transfer, dividend disbursing and
shareholder servicing to be performed by Fidelity Investments Institutional
Operations Company (FIIOC), an affiliate of FMR. During the period November
1, 1994 to December 31, 1994, the fund paid fees based on the type, size,
number of accounts and the number of transactions made by shareholders.
Effective January 1, 1995, the Board of Trustees approved a revised
transfer agent contract pursuant to which the fund pays account fees and
asset-based fees that vary according to account size and type of account.
ACCOUNTING FEES. Fidelity Service Co. (FSC) an affiliate of FMR, 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 $77,681 for the period.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.)
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
John R. Hickling, Vice President
Arthur S. Loring, Secretary
Stephen P. Jonas, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann*
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Equity Portfolio Growth
Fidelity Advisor Global Resources Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Limited Term Bond Fund
Fidelity Advisor Short Fixed-Income Fund
TAX-EXEMPT FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Limited Term Tax-Exempt Fund
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(registered trademark)
