(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
OVERSEAS
FUND - CLASS A AND CLASS B
SEMIANNUAL REPORT
APRIL 30, 1996
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 24 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 30 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,
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 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 stocks have managed to post solid returns through the first four
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
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. 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
ADVISOR OVERSEAS FUND - CLASS A
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. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). Effective January 1, 1996, the
maximum 4.75% sales charge on Class A shares was reduced to 3.50%.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class A 10.47% 13.07% 67.95% 60.53%
Advisor Overseas - Class A 6.61% 9.12% 62.08% 54.91%
(incl. max. 3.50% sales
charge)
Morgan Stanley EAFE Index 13.21% 11.40% 52.70% 55.49%
International Funds Average 11.95% 15.95% 61.73% n/a
CUMULATIVE TOTAL RETURNS show Class A'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 Class A's returns to the
performance of the Morgan Stanley Capital International Europe,
Australasia, Far East Index (Morgan Stanley EAFE Index) - a broad measure
of the performance of stocks in Europe, Australia, and the Far East. To
measure how Class A's performance stacked up against its peers, you can
compare it to the international funds average, which reflects the
performance of 316 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, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class A 13.07% 10.93% 8.17%
Advisor Overseas - Class A 9.12% 10.14% 7.53%
(incl. max. 3.50% sales charge)
Morgan Stanley EAFE Index 11.40% 8.83% 7.60%
International Funds Average 15.95% 9.95% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' actual (or cumulative)
return and show you what would have happened if Class A shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960430 19960521 153746 S00000000000001
FA Overseas -CL A MS EAFE Index
00175 MS001
1990/04/23 9650.00 10000.00
1990/04/30 9543.85 9758.32
1990/05/31 9958.80 10871.75
1990/06/30 10460.60 10776.00
1990/07/31 11078.20 10927.78
1990/08/31 9756.15 9866.60
1990/09/30 8926.25 8491.55
1990/10/31 9215.75 9814.69
1990/11/30 9225.40 9235.74
1990/12/31 9135.93 9385.36
1991/01/31 9359.71 9688.93
1991/02/28 9778.07 10727.57
1991/03/31 9233.22 10083.57
1991/04/30 9223.49 10182.59
1991/05/31 9233.22 10288.84
1991/06/30 8542.43 9532.81
1991/07/31 9028.91 10001.17
1991/08/31 9165.12 9798.07
1991/09/30 9641.86 10350.28
1991/10/31 9515.38 10497.00
1991/11/30 9272.14 10006.96
1991/12/31 9755.23 10523.75
1992/01/31 9784.85 10298.96
1992/02/29 10011.95 9930.34
1992/03/31 9705.86 9274.77
1992/04/30 10209.42 9318.86
1992/05/31 10624.12 9942.63
1992/06/30 10456.27 9471.02
1992/07/31 10051.44 9228.63
1992/08/31 9774.98 9807.46
1992/09/30 9626.87 9613.79
1992/10/31 8955.46 9109.50
1992/11/30 8836.98 9195.22
1992/12/31 9283.69 9242.78
1993/01/31 9752.86 9241.65
1993/02/28 9962.49 9520.81
1993/03/31 10571.42 10350.70
1993/04/30 11389.98 11333.00
1993/05/31 11689.46 11572.36
1993/06/30 11370.02 11391.80
1993/07/31 11929.04 11790.57
1993/08/31 12717.65 12427.06
1993/09/30 12587.88 12147.34
1993/10/31 12907.32 12521.69
1993/11/30 12408.19 11427.16
1993/12/31 13167.62 12252.29
1994/01/31 14037.46 13288.16
1994/02/28 13847.49 13251.36
1994/03/31 13497.56 12680.60
1994/04/30 14077.45 13218.63
1994/05/31 13817.50 13142.74
1994/06/30 13707.52 13328.47
1994/07/31 14057.46 13456.65
1994/08/31 14187.43 13775.24
1994/09/30 13747.51 13341.38
1994/10/31 14057.46 13785.64
1994/11/30 13507.56 13123.10
1994/12/31 13428.10 13205.28
1995/01/31 12874.05 12697.99
1995/02/28 12904.27 12661.55
1995/03/31 13307.21 13451.26
1995/04/30 13700.08 13957.15
1995/05/31 13851.19 13790.77
1995/06/30 13951.92 13548.93
1995/07/31 14556.34 14392.43
1995/08/31 14133.25 13843.41
1995/09/30 14304.50 14113.77
1995/10/31 14022.44 13734.39
1995/11/30 14153.40 14116.54
1995/12/31 14588.34 14685.30
1996/01/31 14852.11 14745.58
1996/02/29 14882.54 14795.43
1996/03/31 15095.59 15109.63
1996/04/30 15491.24 15548.91
IMATRL PRASUN SHR__CHT 19960430 19960521 153749 R00000000000076
$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 current maximum 3.50% sales charge. As the chart shows, by
April 30, 1996, the value of your investment would have grown to $15,491 -
a 54.91% increase on your initial investment. For comparison, look at how
the Morgan Stanley EAFE Index did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $15,549 - a
55.49% 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. Past performance is no
guarantee of future results and
you may have a gain or loss
when you sell your shares.
(checkmark)
ADVISOR OVERSEAS FUND - CLASS B
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. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). The initial offering of Class B
shares took place on July 3, 1995. Class B shares bear a 1.00%
12b-1/shareholder service fee. Returns prior to July 3, 1995 are those of
Class A, the original class of the fund, and reflect Class A's prior 0.65%
12b-1 fee. Had Class B's 12b-1 fee been reflected, returns prior to July 3,
1995 would have been lower. Class B's contingent deferred sales charges
included in the past six months, past one year, past five years and life of
fund total return figures are 4%, 4%, 1% and 0%, respectively. If Fidelity
had not reimbursed certain class expenses, the past six months, past one
year, past five years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class B 10.02% 12.61% 67.27% 59.88%
Advisor Overseas - Class B 6.02% 8.61% 66.27% 59.88%
(incl. contingent deferred sales
charge)
Morgan Stanley EAFE Index 13.21% 11.40% 52.70% 55.49%
International Funds Average 11.95% 15.95% 61.73% n/a
CUMULATIVE TOTAL RETURNS show Class B'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 Class B's returns to the
performance of the Morgan Stanley Capital International Europe,
Australasia, Far East Index (Morgan Stanley EAFE Index) - a broad measure
of the performance of stocks in Europe, Australia, and the Far East. To
measure how Class B's performance stacked up against its peers, you can
compare it to the international funds average, which reflects the
performance of 316 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, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class B 12.61% 10.84% 8.10%
Advisor Overseas - Class B 8.61% 10.70% 8.10%
(incl. contingent deferred sales charge)
Morgan Stanley EAFE Index 11.40% 8.83% 7.60%
International Funds Average 15.95% 9.95% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class B shares' actual (or cumulative)
return and show you what would have happened if Class B shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960430 19960521 153931 S00000000000001
FA Overseas -CL B MS EAFE Index
00654 MS001
1990/04/23 10000.00 10000.00
1990/04/30 9890.00 9758.32
1990/05/31 10320.00 10871.75
1990/06/30 10840.00 10776.00
1990/07/31 11480.00 10927.78
1990/08/31 10110.00 9866.60
1990/09/30 9250.00 8491.55
1990/10/31 9550.00 9814.69
1990/11/30 9560.00 9235.74
1990/12/31 9467.28 9385.36
1991/01/31 9699.18 9688.93
1991/02/28 10132.72 10727.57
1991/03/31 9568.11 10083.57
1991/04/30 9558.02 10182.59
1991/05/31 9568.11 10288.84
1991/06/30 8852.26 9532.81
1991/07/31 9356.38 10001.17
1991/08/31 9497.53 9798.07
1991/09/30 9991.56 10350.28
1991/10/31 9860.49 10497.00
1991/11/30 9608.44 10006.96
1991/12/31 10109.05 10523.75
1992/01/31 10139.74 10298.96
1992/02/29 10375.08 9930.34
1992/03/31 10057.89 9274.77
1992/04/30 10579.71 9318.86
1992/05/31 11009.45 9942.63
1992/06/30 10835.51 9471.02
1992/07/31 10416.00 9228.63
1992/08/31 10129.51 9807.46
1992/09/30 9976.03 9613.79
1992/10/31 9280.27 9109.50
1992/11/30 9157.49 9195.22
1992/12/31 9620.40 9242.78
1993/01/31 10106.59 9241.65
1993/02/28 10323.83 9520.81
1993/03/31 10954.84 10350.70
1993/04/30 11803.09 11333.00
1993/05/31 12113.43 11572.36
1993/06/30 11782.40 11391.80
1993/07/31 12361.70 11790.57
1993/08/31 13178.91 12427.06
1993/09/30 13044.43 12147.34
1993/10/31 13375.46 12521.69
1993/11/30 12858.23 11427.16
1993/12/31 13645.20 12252.29
1994/01/31 14546.59 13288.16
1994/02/28 14349.73 13251.36
1994/03/31 13987.11 12680.60
1994/04/30 14588.03 13218.63
1994/05/31 14318.65 13142.74
1994/06/30 14204.68 13328.47
1994/07/31 14567.31 13456.65
1994/08/31 14702.00 13775.24
1994/09/30 14246.13 13341.38
1994/10/31 14567.31 13785.64
1994/11/30 13997.47 13123.10
1994/12/31 13915.13 13205.28
1995/01/31 13340.98 12697.99
1995/02/28 13372.30 12661.55
1995/03/31 13789.86 13451.26
1995/04/30 14196.98 13957.15
1995/05/31 14353.56 13790.77
1995/06/30 14457.95 13548.93
1995/07/31 15084.29 14392.43
1995/08/31 14645.85 13843.41
1995/09/30 14823.32 14113.77
1995/10/31 14531.03 13734.39
1995/11/30 14666.73 14116.54
1995/12/31 15108.74 14685.30
1996/01/31 15373.43 14745.58
1996/02/29 15384.02 14795.43
1996/03/31 15585.19 15109.63
1996/04/30 15976.94 15548.91
IMATRL PRASUN SHR__CHT 19960430 19960521 153934 R00000000000076
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Advisor Overseas Fund - Class B on April 23, 1990, when the fund started.
As the chart shows, by April 30, 1996, the value of your investment would
have grown to $15,988 - a 59.88% increase on your initial investment. For
comparison, look at how the Morgan Stanley EAFE Index did over the same
period. With dividends reinvested, the same $10,000 investment would have
grown to $15,549 - a 55.49% 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. Past performance is no
guarantee of future results and
you may have a gain or loss
when you sell your shares.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace, Portfolio Manager of Fidelity Advisor
Overseas Fund
NOTE TO SHAREHOLDERS: On March 26, 1996, Richard Mace replaced John
Hickling as manager of the fund. The following is an interview with John
Hickling covering the period through March, followed by Rick Mace's
outlook.
Q. HOW DID THE FUND PERFORM, JOHN?
J.H. As of April 30, 1996, the fund's Class A and Class B shares had a
total return of 10.47% and 10.02%, respectively, for the past six months
and 13.07% and 12.61%, respectively, for the past year. For the same
periods, the Morgan Stanley EAFE Index - which tracks the performance of
stocks in Europe, Australia and the Far East - returned 13.21% and 11.40%,
respectively. Additionally, the Lipper international funds average stood at
11.95% for the six month period and 15.95% for the one-year period.
Q. WHY DID THE FUND UNDERPERFORM, JOHN?
J.H. First, returns were hurt by currency fluctuations. Second, the fund's
cash inflows surged over the past few months. Therefore, the fund's large
cash position during that time - approximately 21% of the fund's assets on
April 30 - held back its performance during a period of relatively strong
stock market performance. Additionally, the performance of Japanese stocks
was quite mixed. While these stocks did fairly well in local currency, they
were rather disappointing in dollar terms. Finally, I did not take
advantage of a short rally in Japanese bank stocks in the fourth quarter of
1995. At the time, I did not believe the banks had attractive fundamentals
and, thus, did not consider their stocks a good buy.
Q. HOW DID YOU POSITION THE FUND DURING THE PERIOD?
J.H. Relative to the EAFE Index, it was overweighted in Europe and
underweighted in Japan. This was because Japan had mixed performance, and
European stocks bottomed in the fourth quarter of 1995, before proceeding
to turn in strong performance for the past six months.
Q. ALTHOUGH A WEAK YEN HURT RETURNS OF JAPANESE STOCKS IN DOLLAR TERMS, THE
CURRENCY'S DEPRECIATION SEEMS TO HAVE HELPED JAPANESE MULTINATIONAL
COMPANIES . . .
J.H. The weak yen gave Japanese multinational companies a competitive
advantage against the rest of the world because their overseas profits were
not as adversely affected when translated back into yen. The fund did own
some multinational companies such as Honda and Sony. However, for the most
part, my Japanese holdings fell into the consumer, retail, textile and
apparel areas.
Q. WHAT HAPPENED WITH EUROPEAN STOCKS?
J.H. Europe is very exciting right now, but it was tremendously undervalued
last October. Most times when market sentiment is bad, it means the market
has bottomed and an astute investor can buy some very inexpensive stocks.
Additionally, at the time, I believed European currencies would weaken,
interest rates would continue to trend downward and company managements
would continue to cut costs. Fortunately, all of the beliefs came to pass
and many European stocks have done very well.
Q. MORE SPECIFICALLY, WHAT ARE SOME COMMON THEMES THAT HAVE OCCURRED WITH
INDIVIDUAL EUROPEAN COMPANIES THAT HAVE INFLUENCED THEIR STOCK PRICES?
J.H. Many companies just are doing the right things. During the period, we
saw a good deal of mergers and acquisitions, restructuring, divestitures,
cost cutting, retirement of debt, management incentives and actions to
raise productivity. For example, Ciba-Geigy and Sandoz announced a $30
billion merger that would create a pharmaceutical juggernaut. Daimler-Benz
divested itself from its unprofitable venture with Fokker. Michelin also
undertook a dramatic change in strategy. The French tire giant shifted from
a focus on market share to a more profit-driven strategy.
Q. SO DO YOU BELIEVE EUROPEAN COMPANIES HAVE BEEN ABLE TO MAXIMIZE
SHAREHOLDER VALUE MORE SO THAN BEFORE?
J.H. European companies are slowly beginning to realize the importance of
maximizing shareholder value. It wasn't
too long ago that most analysts said that all European managements were
interested in were fancy lunches and nice vacations. Many companies are
starting to realize that they don't just compete in Europe, they compete in
the world - and if they don't get their act together and consider the fact
that their share price has a direct impact on the cost of capital, American
and Japanese companies are going to eat their lunches for them.
Q. WHAT ABOUT EMERGING MARKETS?
J.H. Emerging markets also rebounded in the past six months with some of
their stock exchanges leading the world in returns. The fund's holdings
were spread across Malaysia, Indonesia, Mexico, Brazil, Argentina, Chile,
Hong Kong and Korea.
Q. WERE THERE ANY DISAPPOINTMENTS?
J.H. Aside from what I discussed about Japan, I wish the fund had owned
more cyclical stocks, since they outperformed many of the defensive
(consumer) and financial stocks that the fund owned. Additionally, had I
known how well emerging markets were going to do, I would have raised the
fund's exposure to them.
Q. TURNING TO YOU, RICK, WHAT HAVE YOU BEEN FOCUSING ON SINCE YOU TOOK OVER
THE FUND?
R.M. So far, I've tried to focus on stocks that will benefit from an
economic recovery. Generally, these include cyclicals, autos, tires,
metals, chemicals, petroleum, oil and oil service. Additionally, I've
trimmed back the fund's holdings in emerging markets. In my opinion, some
of the best emerging market investments are not in
emerging markets per se, but rather in businesses where stocks trade in
developed markets but that do business in emerging markets.
Q. WHAT DO YOU SEE GOING FORWARD?
R.M. I believe there is the potential for economic improvement in many
areas of the world and I hope to position the fund to take advantage of any
recoveries. For the most part, investors can expect a portfolio with larger
positions in a smaller amount of stocks. Therefore, in the next few months
I will concentrate on reducing and reallocating some of the fund's current
positions.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: seeks growth of
capital primarily through
investments in foreign
securities
START DATE: April 23, 1990
SIZE: as of April 30, 1996,
more than $974 million
MANAGER: Richard Mace,
since March 1996; manager,
VIP: Overseas, Fidelity
Advisor Annuity Overseas;
since March 1996; joined
Fidelity in 1987
(checkmark)
RICK MACE ON HIS
INVESTING STYLE:
"When I look at a stock, I
attempt to establish its worth
as a means of determining
what return I can expect and as
a way of comparing potential
rewards and potential risks. I
try to minimize surprises by
thoroughly understanding
what the downside
possibilities are for each stock
I own. I attempt to select
stocks that I believe have two
or three times as much upside
potential as downside risk.
"One analogy I often use to
describe my style is imagining
if you could go to a store and
purchase a dollar for 80 cents.
I try to assess what will cause
that 80 cents to become a
dollar, how long it will take it to
get there and how much of it
to buy. Additionally, should
that 80 cents fall to 70 cents, I
will buy more if I firmly believe
it will eventually become a
dollar.
"I also focus on a company's
cash flow and balance sheet.
I've found that while
accounting conventions vary
dramatically from country to
country, the items that are
most comparable are cash
flows and balance sheets."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Volvo AB Class B 1.5 1.1
(Sweden, Autos, Tires, &
Accessories)
Alcatel Alsthom CGE 1.3 0.4
(France, Industrial Machinery)
ING Groep NV 1.2 0.9
(Netherlands, Credit & Other Finance)
Nomura Securities Co. Ltd. 1.0 0.9
(Japan, Securities Industry)
Stet (Societa Finanziaria Telefonica) 1.0 0.0
(Italy, Utilities)
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Finance 18.2 22.1
Durables 10.4 6.7
Utilities 7.4 8.1
Nondurables 5.8 7.8
Retail & Wholesale 5.4 5.6
TOP FIVE COUNTRIES AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
Japan 23.0 17.5
United Kingdom 11.7 13.3
France 6.2 4.7
Netherlands 5.0 5.6
Sweden 4.3 3.1
ASSET ALLOCATION
AS OF APRIL 30, 1996 AS OF OCTOBER 31, 1995
Row: 1, Col: 1, Value: 21.1
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 78.59999999999999
Stocks 82.0%
Bonds 0.2%
Short-term
investments 17.8%
Stocks 78.6%
Bonds 0.3%
Short-term
investments 21.1%
Row: 1, Col: 1, Value: 17.8
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 81.0
INVESTMENTS APRIL 30, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 76.5%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.9%
Banco de Galicia Y Buenos Aires SA sponsored ADR
representing Class B shares 39,400 $ 925,900
Buenos Aires Embotelladora SA sponsored ADR 25,200 400,050
Perez Companc Class B 251,223 1,562,779
Telecom Argentina:
Class B sponsored ADR 68,200 3,086,050
Stet France Telecom SA 155,200 701,581
YPF Sociedad Anonima sponsored ADR representing
Class D shares 94,800 2,073,750
8,750,110
AUSTRALIA - 1.1%
Brambles Industries Ltd. 238,150 3,271,589
Coles Myer Ltd. 427,900 1,549,576
FAI Insurance Ltd. Ord. 691,365 337,452
Fosters Brewing Group Ltd. 637,674 1,169,681
Qantas Airways Ltd. sponsored ADR (b) 26,600 488,775
Western Mining Holdings Ltd. 313,300 2,288,870
Westpac Banking Corp. 39,000 189,743
Woolworths Ltd. 705,800 1,805,833
11,101,519
AUSTRIA - 0.4%
EVN (Energie-Versor Nieder) 8,760 1,280,405
VA Technologie AG 4,300 571,045
VA Technologie AG (b) 13,100 1,739,697
3,591,147
BELGIUM - 0.5%
Bekaert SA 3,500 2,706,644
Delhaize Freres & Cie Le Lion SA 42,000 2,076,299
Petrofina SA (warrants) (a) 175 1,736
4,784,679
BRAZIL - 0.8%
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 1,987,400 955,683
Coteminas PN 1,600,000 671,002
Telebras PN (Pfd. Reg.) 60,460,600 3,273,083
Telebras sponsored ADR 47,400 2,565,525
7,465,293
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CANADA - 0.5%
Alcan Aluminium Ltd. 111,400 $ 3,541,441
Midland Walwyn, Inc. 171,000 1,192,687
4,734,128
CHILE - 0.3%
Santa Isabel SA sponsored ADR (a) 76,300 2,203,163
Vina Concha Stet y Toro SA sponsored ADR 65,400 1,095,450
3,298,613
DENMARK - 0.7%
International Service Systems AS, Series B (a) 120,400 3,405,623
Unidanmark AS Class A (a) 72,400 3,225,136
6,630,759
FINLAND - 1.2%
America Group Ltd. Class A 5,400 100,402
Cultor OY, Series 1 46,000 1,948,126
Huhtamaki Ord. 56,200 1,857,640
Nokia Corp. AB Series A 40,500 1,446,623
Pohjola Class B 238,430 3,768,145
Valmet OY Class A 200,640 2,777,139
11,898,075
FRANCE - 6.2%
Alcatel Alsthom Cie Generale d'Electricite SA 134,200 12,610,441
Axa SA 102,090 6,077,632
Club Mediterranee SA Ord. 18,300 1,733,759
Elf Aquitaine SA 51,088 3,796,040
Eramet SA 31,300 2,386,837
Generale des Eaux 19,800 2,151,508
IMETAL SA Ord. 24,620 3,851,040
Lafarge Coppee SA 26,850 1,718,358
Michelin SA (Compagnie Generale des Etablissements)
Class B 154,800 7,665,174
Pechiney SA Class A 124,065 5,841,034
Peugeot SA Ord. 11,800 1,647,254
Total SA Class B 123,600 8,380,998
Usinor Sacilor 49,900 771,366
Vallourec SA 38,000 1,844,161
60,475,602
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - 3.7%
Asko 3,850 $ 2,287,253
Bayer AG (a) 7,800 2,510,462
Continental Gummi-Werke AG 162,100 2,799,115
Daimler-Benz AG Ord. 8,300 4,543,529
Deutsche Bank AG 89,400 4,282,212
Hoechst AG Ord. 9,050 3,046,307
Kaufhof Holding AG 7,300 2,273,282
Mannesmann AG Ord. 10,800 3,687,547
Veba AG Ord. 106,300 5,281,169
Volkswagen AG 14,900 5,140,950
35,851,826
HONG KONG - 3.6%
Amoy Properties Ltd. 1,459,000 1,640,873
China Light & Power Co. Ltd. 294,000 1,387,205
Consolidated Electric Power Asia Ltd. 984,000 1,628,191
Consolidated Electric Power Asia Ltd.
sponsored ADR (a)(b) 22,600 367,250
Dickson Concepts International Ltd. 1,688,000 1,952,971
Great Eagle Holdings Ltd. 614,000 1,762,064
HSBC Holdings PLC 438,800 6,504,901
Hong Kong & China Gas Co. Ltd. 1,399,200 2,297,121
Hong Kong & China Gas Co. Ltd. (warrants) (a) 116,600 -
Hong Kong Electric Holdings Ord. 1,136,000 3,612,550
Hong Kong Land Holdings Ltd. 1,683,000 3,601,620
Hong Kong Telecommunications Ltd. 1,214,000 2,306,600
Hopewell Holdings Ltd. 2,545,000 1,554,497
Hysan Development Co. Ltd. 914,000 2,936,114
Hysan Development Co. Ltd. (warrants) (a) 45,700 -
Oriental Press Group Ltd. 2,094,000 974,495
Peregrine Investments Holdings Ltd. 685,000 1,058,178
Sun Hung Kai Properties Ltd. 97,000 924,771
34,509,401
HUNGARY - 0.1%
Borsodchem GDR (rights) (a)(b) 28,400 499,840
INDONESIA - 0.1%
Bank Niaga PT 83,000 206,743
Matahari Putra Prima PT (For. Reg.) 314,000 630,427
Sampoerna Hanjaya Mandala (For. Reg.) 14,350 158,691
995,861
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
IRELAND - 0.7%
Bank of Ireland, Inc. 616,500 $ 4,460,402
Independent Newspapers PLC 308,500 2,557,511
7,017,913
ITALY - 0.8%
Fiat Spa 256,900 874,141
Istituto Mobiliare Italiano 194,700 1,543,788
Magneti Marelli SPA 1,040,300 1,566,055
Montedison Spa Ord. (a) 1,012,400 615,910
Olivetti & Co. Spa Ord. (a) 2,791,600 1,830,412
SAI Sta Assieuratrice Industriale Spa 146,000 1,568,889
Simint Ord. (a) 3,989 6,462
8,005,657
JAPAN - 22.9%
Acom Co. Ltd. 15,000 563,454
ADO Electronic Industrial Co. Ltd. 26,000 667,586
Aida Engineering Ltd. Ord. 112,000 1,065,094
Amada Metrecs Co. Ltd. 109,000 1,793,258
Amadasonoike Co. Ltd. 178,000 1,328,800
Amway Japan Ltd. 49,600 2,542,380
Aoyama Trading Co. Ord. 75,600 2,365,308
Bridgestone Corp. 215,000 3,966,525
Canon, Inc. 354,000 7,002,235
Catena Corp. 1,000 12,363
Citizen Watch Co. Ltd. Ord. 275,000 2,392,896
Daiwa House Industry Co. Ltd. 371,000 5,891,969
Daiwa House Industry Co. Ltd. (warrants) (a) 300 318,750
Daiwa Securities Co. Ltd. 537,000 8,221,863
Dennys Japan Co. Ltd. 42,000 1,589,653
Daito Trust Construction 77,400 1,140,887
East Japan Railway Co. Ord. 407 2,163,597
Fanuc Ltd. 60,000 2,596,167
Fuji Bank Ltd. 91,000 1,981,741
Fuji Photo Film Co. Ltd. 181,000 5,611,335
Futaba Industrial Co. Ltd. 86,000 1,692,929
Hankyu Department Stores, Inc. 78,000 1,134,896
Hanshin Department Store Ltd. 49,000 405,402
Hitachi Ltd. 739,000 7,941,324
Hitachi Maxell Ltd. 94,000 2,020,256
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Honda Motor Co. Ltd. 390,000 $ 8,864,058
Ito-Yokado Co. Ltd. 138,000 8,097,190
Izumiya Co. Ltd. 12,000 228,235
Japan Airlines Co. Ltd. (a) 300,000 2,387,903
Onward Kashiyama & Co. Ltd. 189,000 3,181,304
Kao Corp. 79,000 1,051,781
Kobe Steel Ltd. Ord. (a) 1,012,000 3,127,764
Komatsu Ltd. Ord. 696,000 6,684,989
Komatsu Seiren Co. Ltd. 65,000 741,762
Marubeni Corp. 267,000 1,592,021
Marukyo Corp. 18,000 332,081
Matsushita Electric Industrial Co. Ltd. 125,000 2,199,135
Minebea Co. Ltd. 340,000 3,107,223
Mitsubishi Corp. 89,000 1,261,091
Mitsubishi Electric Co. Ord. 689,000 5,399,039
Mitsubishi Estate Co. Ltd. 164,000 2,292,616
Mitsubishi Heavy Industries Ltd. 323,000 2,868,927
Mitsui Trust and Banking 289,000 3,462,888
Mitsukoshi Ltd. 208,000 2,294,518
Nichido Fire & Marine Insurance Co. Ltd. 393,750 3,295,136
Nikko Securities Co. Ltd. 334,000 4,224,430
Nippon Shokubai Co. Ltd. 84,000 910,656
Nippon Thompson Co. Ltd. 99,000 979,126
Nissan Motor Co. Ltd. Ord. 306,000 2,572,431
Nitto Denko Corp. 63,000 1,012,505
Nomura International PLC (warrants) (a) 400 355,000
Nomura Securities Co. Ltd. 466,000 10,103,942
Omron Corp. 96,000 2,154,534
Orix Corp. 149,000 6,135,419
Ricoh Co. Ltd. Ord. 364,000 4,257,715
Rohm Co. Ltd. 33,000 2,090,057
Sakura Bank Ltd. 38,000 444,487
Sankyo Co. Ltd. 123,000 2,971,043
Santen Pharmaceutical Co. Ord. 2,200 51,258
Seino Transportation Co. Ltd. 91,000 1,592,316
Sekisui Chemical Co. Ltd. 213,000 2,673,767
Sekisui House Ltd. 118,000 1,458,799
Sho Bond Corp. Ord. 29,000 1,047,977
Sony Corp. 58,000 3,750,654
Sumitomo Marine and Fire Insurance Co. Ltd. 245,000 2,320,574
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Sumitomo Realty & Development Co. Ltd. 466,000 $ 3,731,368
Sumitomo Trust & Banking Co. Ltd. 205,000 2,982,740
TDK Corp. 35,000 1,993,723
Tadano Ltd. 9,000 86,444
Takashimaya Co. Ltd. 209,000 3,398,697
Takeda Chemical Industries Ltd. 314,000 5,404,783
Tokio Marine & Fire Insurance Co. Ltd. (The) 675,000 9,243,497
Toshiba Corp. 201,000 1,555,932
Toyota Motor Corp. 373,000 8,477,676
Tsugami Corp. 121,000 724,930
Uny Co. Ltd. 66,000 1,274,119
Yamanouchi Pharmaceutical Co. Ltd. 127,000 2,995,197
Yoshinoya D&C Co. Ltd. Ord. 30 425,087
222,281,212
KOREA (SOUTH) - 0.6%
Korea Electric Power Corp. 118,250 5,648,801
MALAYSIA - 0.2%
Magnum Corp. BHD 202,500 350,832
TA Enterprise BHD 1,145,000 1,974,534
2,325,366
MEXICO - 1.3%
BANACCI SA de CV (a):
Class B 326,100 752,911
Class L 26,577 54,695
Cemex SA, Series B 766,300 3,276,023
Cifra SA Class C 1,082,200 1,441,960
Consorcio Grupo Dina de CV sponsored ADR 38,400 105,600
Empresas Ica Sociedad Controladora SA de CV
sponsored ADR representing Ord. (part. certs.) 134,200 1,862,025
Grupo Carso SA de CV Class A-1 (a) 327,600 2,505,047
Grupo Dina sponsored ADR, Series L 11,173 23,743
Grupo Financiero Bancomer Class B (a) 3,614,000 1,608,388
Grupo Financiero Bancomer SA de CV (a):
sponsored ADR, Series C (b) 62,300 545,125
Series L 122,005 43,438
12,218,955
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - 5.0%
AKZO NV 66,500 $ 7,723,081
DSM NV 20,400 2,083,455
IHC Caland NV 35,600 1,398,238
ING Groep NV 147,357 11,377,491
KLM Royal Dutch Airlines NV 78,839 2,645,604
Philips Electronics NV (Bearer) 26,400 932,127
Pirelli Tyre Holdings NV Ord. (a) 349,300 2,894,695
Royal Dutch Petroleum Co. Ord. 58,100 8,276,749
Royal Ptt Nederland NV 135,313 5,077,692
Unilever NV Ord. 34,000 4,639,160
Vendex International NV 16,200 464,208
Vendex International NV (a)(b) 43,900 1,257,946
48,770,446
NORWAY - 1.5%
Bergesen Group Class B 52,800 907,568
Christiania Bank Free shares Ord. 450,400 979,719
Den Norske Bank Class A Free shares 684,500 1,967,896
Norsk Hydro AS 100,750 4,597,622
Orkla AS Class B (non-vtg.) 36,000 1,642,823
Saga Petroleum AS Class B 157,300 2,129,540
Transocean Drilling AS (a) 76,800 2,149,543
14,374,711
PAKISTAN - 0.0%
Hub Power Co. Ltd. GDR (a) 20,600 494,400
PERU - 0.0%
Banco Weise Ltd. sponsored ADR 73,400 495,450
PHILIPPINES - 0.1%
Filinvest Land, Inc. ORD (a) 1,250,625 645,638
SINGAPORE - 0.4%
Kim Engineering Holdings Ltd. 1,562,000 1,621,991
Overseas Union Bank Ltd. (For Reg.) 165,000 1,279,161
Van Der Horst Ltd. 186,000 919,417
3,820,569
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - 3.5%
Banco Bilbao Vizcaya SA Ord. (Reg.) (a) 220,600 $ 8,376,667
Banco de Santander SA Ord. (Reg.) 140,887 6,539,246
Banco Intercontinental Espanol 37,200 3,909,024
Repsol SA Ord. 89,700 3,286,347
Tabacalera SA, Series A 138,900 6,327,024
Telefonica de Espana SA Ord. 321,000 5,710,084
34,148,392
SWEDEN - 4.3%
Electrolux AB 78,600 3,957,453
Ericsson (L.M.) Telephone Co. Class B 75,800 1,534,402
Esselte AB Class B Free shares 47,900 959,051
Investor AB Class B Free shares 100,000 3,989,665
SKF AB Ord. 84,500 1,965,536
Scania AB (a):
Class A 30,700 849,696
Class B 313,900 8,664,824
Skandia Foersaekrings AB 55,500 1,266,461
Skandinaviska Enskilda Banken Class A Free shares 590,700 4,435,109
Volvo AB Class B 621,900 14,236,988
41,859,185
SWITZERLAND - 2.5%
Adia SA (Bearer) 8,500 1,857,774
Baloise-Holding (Reg.) 1,110 2,376,979
CIBA-GEIGY AG (Reg.) 5,400 6,252,632
Nestle SA (Reg.) 7,300 8,100,683
Roche Holdings Ltd. (part. certs.) 750 5,884,894
24,472,962
THAILAND - 0.8%
Krung Thai Bank Ltd. (For. Reg.) 472,770 2,320,941
Phatra Thanakit PCL (For. Reg.) 100 871
Ruam Pattana Fund II (For. Reg.) 242,700 158,543
Ruang Khao Unit Trust (For. Reg.) 466,300 299,993
Siam City Bank PCL (For. Reg.) 3,636,800 4,355,492
Telecomasia Corp. PCL (For. Reg.) (a) 117,300 306,503
7,442,343
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TURKEY - 0.1%
Aksigorta (b) 812,500 $ 167,295
Tofas Turk Otomobil Fabrikasi AS ADR (b) 173,300 86,650
Tofas Turk Otomobil Fabrikasi AS 4,272,800 459,755
713,700
UNITED KINGDOM - 11.7%
Allied Lyons PLC 271,204 2,099,115
Argyll Group PLC Ord. 4,187 20,953
Associated British Ports PLC Ord. 167,500 757,418
Barclays PLC Ord. 522,300 5,802,127
Barratt Developments PLC 736,400 2,991,385
Barratt Developments PLC (rights) (a) 184,100 188,696
Bass PLC Ord. 374,000 4,416,826
Berkely Group PLC 323,888 2,733,900
Booker PLC 221,900 1,291,054
Boots Co. PLC (The) 187,500 1,790,390
British Airways PLC Ord. 316,500 2,475,944
British Land Co. PLC, (The) Ord. 214,850 1,397,384
British Petroleum PLC Ord. 618,500 5,588,929
British Telecommunications PLC Ord. 473,300 2,600,362
Cable & Wireless PLC Ord. 427,000 3,356,463
Cadbury-Schweppes PLC Ord. 649,300 5,040,253
Caradon PLC 414,600 1,437,331
Christies International PLC 78,300 260,238
Cookson Group PLC 721,400 3,436,077
Courtaulds PLC Ord. 26,700 172,248
Dixons Group PLC 750,258 5,575,159
Grand Metropolitan PLC 765,958 5,045,290
Great Universal Stores PLC Ord Class A 260,000 2,839,301
Hanson Trust PLC Ord. 438,000 1,300,589
Lloyds Abbey Life PLC 376,200 3,037,950
Lloyds TSB Group PLC 355,171 1,705,087
MFI Furniture Group PLC 808,500 2,163,107
Mirror Group Newspaper PLC 1,233,600 4,239,444
National Westminster Bank PLC Ord. 566,500 5,230,048
Prudential Corp. PLC 459,500 3,168,665
RTZ PLC Ord. 124,100 1,956,605
Redland PLC Ord. 216,900 1,396,005
Rolls Royce PLC Ord. 576,400 2,059,074
Royal Insurance Holdings PLC 671,400 3,673,564
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Rugby Group 73,100 $ 141,035
Scottish Power PLC ADR 69,400 389,660
Shell Transport & Trading PLC 432,400 5,712,646
Shell Transport & Trading PLC ADR 10,900 872,000
South West Water PLC Ord. 247,100 2,543,860
Unigate Ltd. Ord. 191,300 1,198,080
United Utilities PLC 204,007 1,826,549
Vodafone Group PLC 779,793 3,120,639
Whitbread Co. PLC Class A 344,600 3,900,811
Wickes PLC 466,500 917,618
Yorkshire Water PLC Ord. 149,600 1,513,042
113,382,921
TOTAL COMMON STOCKS
(Cost $652,739,299) 742,705,474
PREFERRED STOCKS - 2.1%
CONVERTIBLE PREFERRED STOCKS - 0.1%
JAPAN - 0.1%
AJL PEPS Trust exchangeable 45,000 1,001,250
NONCONVERTIBLE PREFERRED STOCKS - 2.0%
AUSTRIA - 0.3%
Creditanstalt Bankverein 59,100 3,296,283
GERMANY - 0.4%
Porsche AG Ord. (a) 2,200 1,202,154
Volkswagen AG 4% 8,600 2,184,038
3,386,192
ITALY - 1.3%
Banco Ambro Veneto 100 161
Fiat Spa 737,800 1,390,352
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
ITALY - CONTINUED
SAI Sta Assicuratrice Industriale Spa 390,400 $ 1,691,616
Stet (Societa Finanziaria Telefonica) Spa 3,539,900 9,268,380
12,350,509
TOTAL NONCONVERTIBLE PREFERRED STOCKS 19,032,984
TOTAL PREFERRED STOCKS
(Cost $18,312,886) 20,034,234
CORPORATE BONDS - 0.3%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT
BERMUDA - 0.3%
MBL International Finance Bermuda 3%,
11/30/02 (cost $3,128,455) Aa3 $ 2,762,000 3,190,110
REPURCHASE AGREEMENTS - 21.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.33%, dated
4/30/96 due 5/1/96 (Note 3) $ 205,057,355 205,027,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $879,207,640) $ 970,956,818
LEGEND
1. Non-income producing
2. 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 $5,152,578 or 0.5% of net
assets.
INCOME TAX INFORMATION
At April 30, 1996, the aggregate cost of investment securities for income
tax purposes was $879,367,097. Net unrealized appreciation aggregated
$91,589,721, of which $108,065,896 related to appreciated investment
securities and $16,476,175 related to depreciated investment securities.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities
Aerospace & Defense 0.2%
Basic Industries 5.3
Conglomerates 0.1
Construction & Real Estate 5.3
Durables 10.4
Energy 4.5
Finance 18.2
Health 2.4
Holding Companies 0.7
Industrial Machinery &
Equipment 4.6
Media & Leisure 1.2
Nondurables 5.8
Precious Metals 0.2
Retail & Wholesale 5.4
Services 1.0
Repurchase Agreements 21.1
Technology 4.4
Transportation 1.8
Utilities 7.4
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 970,956,818
agreements of $205,027,000) (cost $879,207,640) -
See accompanying schedule
Cash 874
Receivable for investments sold 16,728,914
Receivable for fund shares sold 4,049,459
Dividends receivable 4,725,442
Interest receivable 34,525
Prepaid expenses 6,250
TOTAL ASSETS 996,502,282
LIABILITIES
Payable for investments purchased $ 17,846,306
Payable for fund shares redeemed 2,320,753
Accrued management fee 575,481
Distribution fees payable 413,370
Other payables and accrued expenses 339,771
TOTAL LIABILITIES 21,495,681
NET ASSETS $ 975,006,601
Net Assets consist of:
Paid in capital $ 852,468,456
Undistributed net investment income 2,334,028
Accumulated undistributed net realized gain (loss) on 28,523,269
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 91,680,848
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 975,006,601
CALCULATION OF MAXIMUM OFFERING PRICE $15.27
CLASS A:
NET ASSET VALUE, and redemption price per share
($956,078,334 (divided by) 62,607,518 shares)
Maximum offering price per share (100/96.50 of $15.27) $15.82
</TABLE>
CLASS B: $15.10
NET ASSET VALUE, and offering price per share
($13,155,018 (divided by) 871,126 shares) A
INSTITUTIONAL CLASS: $15.20
NET ASSET VALUE, offering price and redemption price
per share ($5,773,249 (divided by) 379,906 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
Dividends $ 8,254,134
Interest 3,214,110
11,468,244
Less foreign taxes withheld (993,106)
TOTAL INCOME 10,475,138
EXPENSES $ 3,221,871
Management fee
Basic fee
Performance adjustment (159,258
)
Transfer agent fees 1,065,291
Class A
Class B 12,582
Institutional Class 3,622
Distribution fees 2,304,838
Class A
Class B 36,294
Accounting fees and expenses 238,321
Non-interested trustees' compensation 1,430
Custodian fees and expenses 296,521
Registration fees 59,790
Class A
Class B 22,829
Institutional Class 21,373
Audit 26,753
Legal 7,043
Miscellaneous 23,713
Total expenses before reductions 7,183,013
Expense reductions (58,400 7,124,613
)
NET INVESTMENT INCOME 3,350,525
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 28,829,785
Foreign currency transactions (30,849 28,798,936
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 52,487,814
Assets and liabilities in foreign currencies (63,013 52,424,801
)
NET GAIN (LOSS) 81,223,737
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 84,574,262
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30,1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 3,350,525 $ 6,946,124
Net investment income
Net realized gain (loss) 28,798,936 (2,526,663)
Change in net unrealized appreciation (depreciation) 52,424,801 (5,095,943)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 84,574,262 (676,482)
FROM OPERATIONS
Distributions to shareholders (4,861,925) -
From net investment income
Class A
Class B (54,544) -
Institutional Class (33,859) -
From net realized gain (540,206) (812,249)
Class A
Class B (2,871) -
Institutional Class (1,612) -
In excess of net realized gain - (3,950,288)
Class A
TOTAL DISTRIBUTIONS (5,495,017) (4,762,537)
Share transactions - net increase (decrease) 149,517,625 98,075,180
TOTAL INCREASE (DECREASE) IN NET ASSETS 228,596,870 92,636,161
NET ASSETS
Beginning of period 746,409,731 653,773,570
End of period (including undistributed net investment $ 975,006,601 $ 746,409,731
income of $2,334,028 and $4,207,428, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1996
(UNAUDITED) 1995 1994 E 1993 1992 1991
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78 $ 9.55
beginning of period
Income from Investment
Operations
Net investment .06 C .07 .01 .03 .05 .14
income
Net realized and 1.39 (.11) 1.14 3.93 (.62) .17
unrealized
gain (loss)
Total from investment 1.45 (.04) 1.15 3.96 (.57) .31
operations
Less Distributions
From net investment (.09) - - (.07) (.14) (.07)
income
From net (.01) (.10) (.02) (.03) D - (.01) D
realized gain
Total distributions (.10) (.10) (.02) (.10) (.14) (.08)
Net asset value, $ 15.27 $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78
end of period
TOTAL RETURN B 10.47% (.25) 8.91% 44.13% (5.88) 3.25%
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 956,078 $ 741,928 $ 653,774 $ 221,370 $ 18,652 $ 19,091
(000 omitted)
Ratio of expenses to 1.71% A 1.90% 2.12% 2.38% 2.64% 2.85%
average net assets
Ratio of expenses to 1.70% A, 1.90% 2.12% 2.38% 2.64% 2.85%
average net assets F
after expense
reductions
Ratio of net investment .81% A 1.01% .05% (.18) .48% 1.48%
income to average %
net assets
Portfolio turnover rate 86% A 47% 34% 42% 168% 226%
Average commission $ .0216
rate G
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1996
(UNAUDITED) 1995 D
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.92 $ 13.89
Income from Investment Operations
Net investment income (loss) .00 E .01
Net realized and unrealized gain (loss) 1.38 .02
Total from investment operations 1.38 .03
Less Distributions
From net investment income (.19) -
From net realized gain (.01) -
Total distributions (.20) -
Net asset value, end of period $ 15.10 $ 13.92
TOTAL RETURN B, C 10.02% .22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 13,155 $ 2,999
Ratio of expenses to average net assets 2.56% A, H 1.97% A,
H
Ratio of expenses to average net assets after expense 2.56% A, F 1.97% A
reductions
Ratio of net investment income (loss) to average net assets (.05)% A .94% A
Portfolio turnover rate 86% A 47%
Average commission rate G $ .0216
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF CLASS B SHARES TO
OCTOBER 31, 1995).
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
H FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1996
(UNAUDITED) 1995 D
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.97 $ 13.89
Income from Investment Operations
Net investment income .06 E .05
Net realized and unrealized gain (loss) 1.39 .03
Total from investment operations 1.45 .08
Less Distributions
From net investment income (.21) -
From net realized gain (.01) -
Total distributions (.22) -
Net asset value, end of period $ 15.20 $ 13.97
TOTAL RETURN B, C 10.51% .58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 5,773 $ 1,482
Ratio of expenses to average net assets 1.60% A, .97% A,
H H
Ratio of expenses to average net assets after expense 1.58% A, .97% A
reductions F
Ratio of net investment income to average net assets .92% A 1.94% A
Portfolio turnover rate 86% A 47%
Average commission rate G $ .0216
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF INSTITUTIONAL CLASS
SHARES TO OCTOBER 31, 1995).
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
H FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER. (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Overseas Fund (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 fund offers Class A, Class B, and Institutional Class shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the fund are allocated on a pro rata basis to each class based
on the relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit 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 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
(including restricted 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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 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. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. FMR bears all organizational expenses except for
registering and qualifying each class and shares of each class for
distribution under federal and state securities law. These expenses are
borne by each class and amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends are declared separately for each class,
while capital gain distributions are declared at the fund level and
allocated to each class on a pro rata basis based on the number of shares
held by each class 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 foreign
currency transactions, passive foreign investment companies (PFIC) 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 unrealized 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements 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 U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. 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.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were $205,057,355 at 5.33%. The investments in repurchase
agreements through the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING
DATED 4/30/96, DUE 5/1/96
Number of dealers or banks 23
Maximum amount with one dealer or bank 11.8%
Aggregate principal amount of agreements $24,542,776,000
Aggregate maturity amount of agreements $24,546,409,934
Aggregate market value of collateral $25,046,511,376
Coupon rates of collateral 0% to 14.25%
Maturity dates of collateral 5/2/96 to 2/15/26
4. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $350,729,180 and $309,341,707, respectively.
5. 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 .2500% 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 investment performance of the lowest performing class as
compared to the appropriate index over a specified period of time. The
investment performance is measured separately for each class of shares. For
the period, the management fee was equivalent to an annualized rate of .73%
of average net assets after the performance adjustment.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research Far East Inc., Fidelity International Investment
Advisors (FIIA). In addition, 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 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.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
and Institutional Class shares (collectively referred to as "the Plans").
Under the Class A Plan and Class B Plan, the fund pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution and
service fee. For the period November 1, to December 31, 1995, this fee was
based on annual rates of .65% and 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class A and Class B shares, respectively.
Effective January 1, 1996, the Board of Trustees approved a revised Class A
distribution plan, under which the fee is based on an annual rate of .50%
of the average net assets of the Class A shares. For the period, the fund
paid FDC $2,304,838 and $36,294 under the Class A Plan and Class B Plan,
respectively, of which $2,097,449 and $9,382 were paid to securities
dealers, banks and other financial institutions for the distribution of
Class A and Class B shares, respectively, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
and Institutional Class shares. The Plans also authorize payments to third
parties that assist in the sale of the fund's shares or render shareholder
support services.
SALES LOAD. For the period November 1, 1995 through December 31, 1995, FDC
received a front-end sales charge of up to 4.75% for selling Class A shares
of the fund. Effective January 1, 1996, the Board of Trustees approved a
revised Class A sales charge. Under the revised arrangement, FDC receives a
front-end sales charge of up to 3.50% for selling Class A shares of the
fund. For the period, FDC received sales charges of $1,587,595 on sales of
Class A shares of the fund, of which $1,338,979 was paid to securities
dealers, banks, and other financial institutions. FDC also receives the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The charge is based on
declining rates which range from 4% to 1% of the lesser of the cost of
shares at the initial date of purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains. For
the period, FDC received contingent deferred sales charges of $9,703 on
Class B share redemptions from the fund. When Class B shares are sold, FDC
pays commissions from its own resources to dealers through which the sales
are made.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street) is
the transfer, dividend disbursing, and shareholder servicing agent for the
fund's Class A shares, while Fidelity Investments Institutional Operations
Company (FIIOC), an affiliate of FMR
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
(FIIOC) (collectively, with State Street, referred to as the Transfer
Agents) acts in that capacity for the fund's Class B and Institutional
Class shares. The Transfer Agents receive account fees and asset-based fees
that vary according to the account size and type of account of the
shareholders of the respective classes of the fund. With respect to the
Class A shares, State Street has delegated certain transfer, dividend
paying, and shareholder services to FIIOC for which FIIOC receives its
allocable share of all such fees. FIIOC 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
.26 %, .34%, and .22 % of average net assets for Class A, Class B, and
Institutional Class, respectively.
ACCOUNTING FEES. Fidelity Service Co., 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 $55,298 for the period.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates of average net assets for Class A, Class B, and
Institutional Class.
(I) CLASS A. Effective January 1, 1996, the expense limitation changed from
an annual rate of 2.40% to 2.25% of average net assets.
(II) CLASS B. For the period, this expense limitation was 2.75% of average
net assets and the reimbursement reduced expenses by $7,264.
(III) INSTITUTIONAL CLASS. For the period, this expense limitation was
1.75% of average net assets and the reimbursement reduced expenses by
$12,318.
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
$16,812 under this arrangement.
In addition, the fund has entered into an arrangement with its transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of the class' expenses. During the period, Class A, Class
B, and Institutional Class expenses were reduced by $21,772, $ 0, and $234,
respectively, under the transfer agent arrangement.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED APRIL 30, OCTOBER 31,
APRIL 30, OCTOBER 31,
1996 1995 A 1996 1995 A
CLASS A
Shares sold 17,584,571 28,552,115 $ 256,757,945 $ 388,824,457
Reinvestment of distributions 351,341 327,371 4,964,446 4,329,810
Shares redeemed (8,628,807) (22,093,191) (125,688,751) (299,648,593)
Net increase (decrease) 9,307,105 6,786,295 $ 136,033,640 $ 93,505,674
CLASS B
Shares sold 685,019 218,660 $ 9,916,328 $ 3,101,939
Reinvestment of distributions 3,850 - 54,016 -
Shares redeemed (33,204) (3,199) (479,928) (45,230)
Net increase (decrease) 655,665 215,461 $ 9,490,416 $ 3,056,709
INSTITUTIONAL CLASS
Shares sold 301,126 108,485 $ 4,394,071 $ 1,546,753
Reinvestment of distributions 2,320 - 32,661 -
Shares redeemed (29,660) (2,365) (433,163) (33,956)
Net increase (decrease) 273,786 106,120 $ 3,993,569 $ 1,512,797
I SHARE TRANSACTIONS FOR CLASS B AND THE INSTITUTIONAL CLASS ARE FOR THE
PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF SHARES) TO OCTOBER 31, 1995.
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
Fidelity International Investment Advisors (U.K.) Limited
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Richard Mace, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, 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
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA - Class A
Fidelity Investments Institutional Operations Company
Boston, MA - Class B
* INDEPENDENT TRUSTEES
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Global Resources Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
TAXABLE 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 Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income 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)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
OVERSEAS
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
APRIL 30, 1996
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 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 28 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,
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 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 stocks have managed to post solid returns through the first four
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
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. 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
ADVISOR OVERSEAS FUND - INSTITUTIONAL CLASS
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. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). The initial offering of Institutional
Class shares took place on July 3, 1995. Institutional Class shares are
sold to eligible investors without a sales load or 12b-1 fee. Returns prior
to July 3, 1995 are those of Class A, the original class of the fund, and
reflect Class A's prior 0.65% 12b-1 fee. If Fidelity had not reimbursed
certain class expenses, the past six months, past one year, past five years
and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Institutional 10.51% 13.51% 68.61% 61.15%
Class
Morgan Stanley EAFE Index 13.21% 11.40% 52.70% 55.49%
International Funds Average 11.95% 15.95% 61.73% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class 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 Institutional Class' returns to
the performance of the Morgan Stanley Capital International Europe,
Australasia, Far East Index (Morgan Stanley EAFE Index) - a broad measure
of the performance of stocks in Europe, Australia, and the Far East. To
measure how Institutional Class' performance stacked up against its peers,
you can compare it to the international funds average, which reflects the
performance of 316 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, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Institutional Class 13.51% 11.01% 8.24%
Morgan Stanley EAFE Index 11.40% 8.83% 7.60%
International Funds Average 15.95% 9.95% n/a
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' actual (or
cumulative) return and show you what would have happened if Institutional
Class had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960430 19960521 154116 S00000000000001
FA Overseas -CL I MS EAFE Index
00655 MS001
1990/04/23 10000.00 10000.00
1990/04/30 9890.00 9758.32
1990/05/31 10320.00 10871.75
1990/06/30 10840.00 10776.00
1990/07/31 11480.00 10927.78
1990/08/31 10110.00 9866.60
1990/09/30 9250.00 8491.55
1990/10/31 9550.00 9814.69
1990/11/30 9560.00 9235.74
1990/12/31 9467.28 9385.36
1991/01/31 9699.18 9688.93
1991/02/28 10132.72 10727.57
1991/03/31 9568.11 10083.57
1991/04/30 9558.02 10182.59
1991/05/31 9568.11 10288.84
1991/06/30 8852.26 9532.81
1991/07/31 9356.38 10001.17
1991/08/31 9497.53 9798.07
1991/09/30 9991.56 10350.28
1991/10/31 9860.49 10497.00
1991/11/30 9608.44 10006.96
1991/12/31 10109.05 10523.75
1992/01/31 10139.74 10298.96
1992/02/29 10375.08 9930.34
1992/03/31 10057.89 9274.77
1992/04/30 10579.71 9318.86
1992/05/31 11009.45 9942.63
1992/06/30 10835.51 9471.02
1992/07/31 10416.00 9228.63
1992/08/31 10129.51 9807.46
1992/09/30 9976.03 9613.79
1992/10/31 9280.27 9109.50
1992/11/30 9157.49 9195.22
1992/12/31 9620.40 9242.78
1993/01/31 10106.59 9241.65
1993/02/28 10323.83 9520.81
1993/03/31 10954.84 10350.70
1993/04/30 11803.09 11333.00
1993/05/31 12113.43 11572.36
1993/06/30 11782.40 11391.80
1993/07/31 12361.70 11790.57
1993/08/31 13178.91 12427.06
1993/09/30 13044.43 12147.34
1993/10/31 13375.46 12521.69
1993/11/30 12858.23 11427.16
1993/12/31 13645.20 12252.29
1994/01/31 14546.59 13288.16
1994/02/28 14349.73 13251.36
1994/03/31 13987.11 12680.60
1994/04/30 14588.03 13218.63
1994/05/31 14318.65 13142.74
1994/06/30 14204.68 13328.47
1994/07/31 14567.31 13456.65
1994/08/31 14702.00 13775.24
1994/09/30 14246.13 13341.38
1994/10/31 14567.31 13785.64
1994/11/30 13997.47 13123.10
1994/12/31 13915.13 13205.28
1995/01/31 13340.98 12697.99
1995/02/28 13372.30 12661.55
1995/03/31 13789.86 13451.26
1995/04/30 14196.98 13957.15
1995/05/31 14353.56 13790.77
1995/06/30 14457.95 13548.93
1995/07/31 15094.73 14392.43
1995/08/31 14677.17 13843.41
1995/09/30 14865.07 14113.77
1995/10/31 14583.22 13734.39
1995/11/30 14729.37 14116.54
1995/12/31 15182.32 14685.30
1996/01/31 15447.38 14745.58
1996/02/29 15479.18 14795.43
1996/03/31 15691.23 15109.63
1996/04/30 16104.71 15548.91
IMATRL PRASUN SHR__CHT 19960430 19960521 154119 R00000000000076
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Advisor Overseas Fund - on April 23, 1990, when the fund started. As the
chart shows, by April 30, 1996, the value of your investment would have
grown to $16,115 - a 61.15% increase on your initial investment. For
comparison, look at how the Morgan Stanley EAFE Index did over the same
period. With dividends reinvested, the same $10,000 investment would have
grown to $15,549 - a 55.49% 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. Past performance is no
guarantee of future results and
you may have a gain or loss
when you sell your shares.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace, Portfolio Manager of Fidelity Advisor
Overseas Fund
NOTE TO SHAREHOLDERS: On March 26, 1996, Richard Mace replaced John
Hickling as manager of the fund. The following is an interview with John
Hickling covering the period through March, followed by Rick Mace's
outlook.
Q. HOW DID THE FUND PERFORM, JOHN?
J.H. As of April 30, 1996, the fund's Institutional Class shares had a
total return of 10.51% for the past six months and 13.51% for the past
year. For the same periods, the Morgan Stanley EAFE Index - which tracks
the performance of stocks in Europe, Australia and the Far East - returned
13.21% and 11.40%, respectively. Additionally, the Lipper international
funds average stood at 11.95% for the six month period and 15.95% for the
one-year period.
Q. WHY DID THE FUND UNDERPERFORM, JOHN?
J.H. First, returns were hurt by currency fluctuations. Second, the fund's
cash inflows surged over the past few months. Therefore, the fund's large
cash position during that time - approximately 21% of the fund's assets on
April 30 - held back its performance during a period of relatively strong
stock market performance. Additionally, the performance of Japanese stocks
was quite mixed. While these stocks did fairly well in local currency, they
were rather disappointing in dollar terms. Finally, I did not take
advantage of a short rally in Japanese bank stocks in the fourth quarter of
1995.
At the time, I did not believe the banks had attractive fundamentals and,
thus, did not consider their stocks a good buy.
Q. HOW DID YOU POSITION THE FUND DURING THE PERIOD?
J.H. Relative to the EAFE Index, it was overweighted in Europe and
underweighted in Japan. This was because Japan had mixed performance, and
European stocks bottomed in the fourth quarter of 1995 before proceeding to
turn in strong performance for the past six months.
Q. ALTHOUGH A WEAK YEN HURT RETURNS OF JAPANESE STOCKS IN DOLLAR TERMS, THE
CURRENCY'S DEPRECIATION SEEMS TO HAVE HELPED JAPANESE MULTINATIONAL
COMPANIES . . .
J.H. The weak yen gave Japanese multinational companies a competitive
advantage against the rest of the world because their overseas profits were
not as adversely affected when translated back into yen. The fund did own
some multinational companies such as Honda and Sony. However, for the most
part, my Japanese holdings fell into the consumer, retail, textile and
apparel areas.
Q. WHAT HAPPENED WITH EUROPEAN STOCKS?
J.H. Europe is very exciting right now, but it was tremendously undervalued
last October. Most times when market sentiment is bad, it means the market
has bottomed and an astute investor can buy some very inexpensive stocks.
Additionally, at the time, I believed European currencies would weaken,
interest rates would continue to trend downward and company managements
would continue to cut costs. Fortunately, all of the beliefs came to pass
and many European stocks have done very well.
Q. MORE SPECIFICALLY, WHAT ARE SOME COMMON THEMES THAT HAVE OCCURRED WITH
INDIVIDUAL EUROPEAN COMPANIES THAT HAVE INFLUENCED THEIR STOCK PRICES?
J.H. Many companies just are doing the right things. During the period, we
saw a good deal of mergers and acquisitions, restructuring, divestitures,
cost cutting, retirement of debt, management incentives and actions to
raise productivity. For example, Ciba-Geigy and Sandoz announced a $30
billion merger that would create a pharmaceutical juggernaut. Daimler-Benz
divested itself from its unprofitable venture with Fokker. Michelin also
undertook a dramatic change in strategy. The French tire giant shifted from
a focus on market share to a more profit-driven strategy.
Q. SO DO YOU BELIEVE EUROPEAN COMPANIES HAVE BEEN ABLE TO MAXIMIZE
SHAREHOLDER VALUE MORE SO THAN BEFORE?
J.H. European companies are slowly beginning to realize the importance of
maximizing shareholder value. It wasn't
too long ago that most analysts said that all European managements were
interested in were fancy lunches and nice vacations. Many companies are
starting to realize that they don't just compete in Europe, they compete in
the world - and if they don't get their act together and consider the fact
that their share price has a direct impact on the cost of capital, American
and Japanese companies are going to eat their lunches for them.
Q. WHAT ABOUT EMERGING MARKETS?
J.H. Emerging markets also rebounded in the past six months with some of
their stock exchanges leading the world in returns. The fund's holdings
were spread across Malaysia, Indonesia, Mexico, Brazil, Argentina, Chile,
Hong Kong and Korea.
Q. WERE THERE ANY DISAPPOINTMENTS?
J.H. Aside from what I discussed about Japan, I wish the fund had owned
more cyclical stocks, since they outperformed many of the defensive
(consumer) and financial stocks that the fund owned. Additionally, had I
known how well emerging markets were going to do, I would have raised the
fund's exposure to them.
Q. TURNING TO YOU, RICK, WHAT HAVE YOU BEEN FOCUSING ON SINCE YOU TOOK OVER
THE FUND?
R.M. So far, I've tried to focus on stocks that will benefit from an
economic recovery. Generally, these include cyclicals, autos, tires,
metals, chemicals, petroleum, oil and oil service. Additionally, I've
trimmed back the fund's holdings in emerging markets. In my opinion, some
of the best emerging market investments are not in
emerging markets per se, but rather in businesses where stocks trade in
developed markets but that do business in emerging markets.
Q. WHAT DO YOU SEE GOING FORWARD?
R.M. I believe there is the potential for economic improvement in many
areas of the world and I hope to position the fund to take advantage of any
recoveries. For the most part, investors can expect a portfolio with larger
positions in a smaller amount of stocks. Therefore, in the next few months
I will concentrate on reducing and reallocating some of the fund's current
positions.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: seeks growth of
capital primarily through
investments in foreign
securities
START DATE: April 23, 1990
SIZE: as of April 30, 1996,
more than $974 million
MANAGER: Richard Mace,
since March 1996; manager,
VIP: Overseas, Fidelity
Advisor Annuity Overseas;
since March 1996; joined
Fidelity in 1987
(checkmark)
RICK MACE ON HIS
INVESTING STYLE:
"When I look at a stock, I
attempt to establish its worth
as a means of determining
what return I can expect and as
a way of comparing potential
rewards and potential risks. I
try to minimize surprises by
thoroughly understanding
what the downside
possibilities are for each stock
I own. I attempt to select
stocks that I believe have two
or three times as much upside
potential as downside risk.
"One analogy I often use to
describe my style is imagining
if you could go to a store and
purchase a dollar for 80 cents.
I try to assess what will cause
that 80 cents to become a
dollar, how long it will take it to
get there and how much of it
to buy. Additionally, should
that 80 cents fall to 70 cents, I
will buy more if I firmly believe
it will eventually become a
dollar.
"I also focus on a company's
cash flow and balance sheet.
I've found that while
accounting conventions vary
dramatically from country to
country, the items that are
most comparable are cash
flows and balance sheets."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Volvo AB Class B 1.5 1.1
(Sweden, Autos, Tires, &
Accessories)
Alcatel Alsthom CGE 1.3 0.4
(France, Industrial Machinery)
ING Groep NV 1.2 0.9
(Netherlands, Credit & Other Finance)
Nomura Securities Co. Ltd. 1.0 0.9
(Japan, Securities Industry)
Stet (Societa Finanziaria Telefonica) 1.0 0.0
(Italy, Utilities)
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Finance 18.2 22.1
Durables 10.4 6.7
Utilities 7.4 8.1
Nondurables 5.8 7.8
Retail & Wholesale 5.4 5.6
TOP FIVE COUNTRIES AS OF APRIL 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
Japan 23.0 17.5
United Kingdom 11.7 13.3
France 6.2 4.7
Netherlands 5.0 5.6
Sweden 4.3 3.1
ASSET ALLOCATION
AS OF APRIL 30, 1996 AS OF OCTOBER 31, 1995
Row: 1, Col: 1, Value: 21.1
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 78.59999999999999
Stocks 82.0%
Bonds 0.2%
Short-term
investments 17.8%
Stocks 78.6%
Bonds 0.3%
Short-term
investments 21.1%
Row: 1, Col: 1, Value: 17.8
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 81.0
INVESTMENTS APRIL 30, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 76.5%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.9%
Banco de Galicia Y Buenos Aires SA sponsored ADR
representing Class B shares 39,400 $ 925,900
Buenos Aires Embotelladora SA sponsored ADR 25,200 400,050
Perez Companc Class B 251,223 1,562,779
Telecom Argentina:
Class B sponsored ADR 68,200 3,086,050
Stet France Telecom SA 155,200 701,581
YPF Sociedad Anonima sponsored ADR representing
Class D shares 94,800 2,073,750
8,750,110
AUSTRALIA - 1.1%
Brambles Industries Ltd. 238,150 3,271,589
Coles Myer Ltd. 427,900 1,549,576
FAI Insurance Ltd. Ord. 691,365 337,452
Fosters Brewing Group Ltd. 637,674 1,169,681
Qantas Airways Ltd. sponsored ADR (b) 26,600 488,775
Western Mining Holdings Ltd. 313,300 2,288,870
Westpac Banking Corp. 39,000 189,743
Woolworths Ltd. 705,800 1,805,833
11,101,519
AUSTRIA - 0.4%
EVN (Energie-Versor Nieder) 8,760 1,280,405
VA Technologie AG 4,300 571,045
VA Technologie AG (b) 13,100 1,739,697
3,591,147
BELGIUM - 0.5%
Bekaert SA 3,500 2,706,644
Delhaize Freres & Cie Le Lion SA 42,000 2,076,299
Petrofina SA (warrants) (a) 175 1,736
4,784,679
BRAZIL - 0.8%
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 1,987,400 955,683
Coteminas PN 1,600,000 671,002
Telebras PN (Pfd. Reg.) 60,460,600 3,273,083
Telebras sponsored ADR 47,400 2,565,525
7,465,293
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CANADA - 0.5%
Alcan Aluminium Ltd. 111,400 $ 3,541,441
Midland Walwyn, Inc. 171,000 1,192,687
4,734,128
CHILE - 0.3%
Santa Isabel SA sponsored ADR (a) 76,300 2,203,163
Vina Concha Stet y Toro SA sponsored ADR 65,400 1,095,450
3,298,613
DENMARK - 0.7%
International Service Systems AS, Series B (a) 120,400 3,405,623
Unidanmark AS Class A (a) 72,400 3,225,136
6,630,759
FINLAND - 1.2%
America Group Ltd. Class A 5,400 100,402
Cultor OY, Series 1 46,000 1,948,126
Huhtamaki Ord. 56,200 1,857,640
Nokia Corp. AB Series A 40,500 1,446,623
Pohjola Class B 238,430 3,768,145
Valmet OY Class A 200,640 2,777,139
11,898,075
FRANCE - 6.2%
Alcatel Alsthom Cie Generale d'Electricite SA 134,200 12,610,441
Axa SA 102,090 6,077,632
Club Mediterranee SA Ord. 18,300 1,733,759
Elf Aquitaine SA 51,088 3,796,040
Eramet SA 31,300 2,386,837
Generale des Eaux 19,800 2,151,508
IMETAL SA Ord. 24,620 3,851,040
Lafarge Coppee SA 26,850 1,718,358
Michelin SA (Compagnie Generale des Etablissements)
Class B 154,800 7,665,174
Pechiney SA Class A 124,065 5,841,034
Peugeot SA Ord. 11,800 1,647,254
Total SA Class B 123,600 8,380,998
Usinor Sacilor 49,900 771,366
Vallourec SA 38,000 1,844,161
60,475,602
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GERMANY - 3.7%
Asko 3,850 $ 2,287,253
Bayer AG (a) 7,800 2,510,462
Continental Gummi-Werke AG 162,100 2,799,115
Daimler-Benz AG Ord. 8,300 4,543,529
Deutsche Bank AG 89,400 4,282,212
Hoechst AG Ord. 9,050 3,046,307
Kaufhof Holding AG 7,300 2,273,282
Mannesmann AG Ord. 10,800 3,687,547
Veba AG Ord. 106,300 5,281,169
Volkswagen AG 14,900 5,140,950
35,851,826
HONG KONG - 3.6%
Amoy Properties Ltd. 1,459,000 1,640,873
China Light & Power Co. Ltd. 294,000 1,387,205
Consolidated Electric Power Asia Ltd. 984,000 1,628,191
Consolidated Electric Power Asia Ltd.
sponsored ADR (a)(b) 22,600 367,250
Dickson Concepts International Ltd. 1,688,000 1,952,971
Great Eagle Holdings Ltd. 614,000 1,762,064
HSBC Holdings PLC 438,800 6,504,901
Hong Kong & China Gas Co. Ltd. 1,399,200 2,297,121
Hong Kong & China Gas Co. Ltd. (warrants) (a) 116,600 -
Hong Kong Electric Holdings Ord. 1,136,000 3,612,550
Hong Kong Land Holdings Ltd. 1,683,000 3,601,620
Hong Kong Telecommunications Ltd. 1,214,000 2,306,600
Hopewell Holdings Ltd. 2,545,000 1,554,497
Hysan Development Co. Ltd. 914,000 2,936,114
Hysan Development Co. Ltd. (warrants) (a) 45,700 -
Oriental Press Group Ltd. 2,094,000 974,495
Peregrine Investments Holdings Ltd. 685,000 1,058,178
Sun Hung Kai Properties Ltd. 97,000 924,771
34,509,401
HUNGARY - 0.1%
Borsodchem GDR (rights) (a)(b) 28,400 499,840
INDONESIA - 0.1%
Bank Niaga PT 83,000 206,743
Matahari Putra Prima PT (For. Reg.) 314,000 630,427
Sampoerna Hanjaya Mandala (For. Reg.) 14,350 158,691
995,861
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
IRELAND - 0.7%
Bank of Ireland, Inc. 616,500 $ 4,460,402
Independent Newspapers PLC 308,500 2,557,511
7,017,913
ITALY - 0.8%
Fiat Spa 256,900 874,141
Istituto Mobiliare Italiano 194,700 1,543,788
Magneti Marelli SPA 1,040,300 1,566,055
Montedison Spa Ord. (a) 1,012,400 615,910
Olivetti & Co. Spa Ord. (a) 2,791,600 1,830,412
SAI Sta Assieuratrice Industriale Spa 146,000 1,568,889
Simint Ord. (a) 3,989 6,462
8,005,657
JAPAN - 22.9%
Acom Co. Ltd. 15,000 563,454
ADO Electronic Industrial Co. Ltd. 26,000 667,586
Aida Engineering Ltd. Ord. 112,000 1,065,094
Amada Metrecs Co. Ltd. 109,000 1,793,258
Amadasonoike Co. Ltd. 178,000 1,328,800
Amway Japan Ltd. 49,600 2,542,380
Aoyama Trading Co. Ord. 75,600 2,365,308
Bridgestone Corp. 215,000 3,966,525
Canon, Inc. 354,000 7,002,235
Catena Corp. 1,000 12,363
Citizen Watch Co. Ltd. Ord. 275,000 2,392,896
Daiwa House Industry Co. Ltd. 371,000 5,891,969
Daiwa House Industry Co. Ltd. (warrants) (a) 300 318,750
Daiwa Securities Co. Ltd. 537,000 8,221,863
Dennys Japan Co. Ltd. 42,000 1,589,653
Daito Trust Construction 77,400 1,140,887
East Japan Railway Co. Ord. 407 2,163,597
Fanuc Ltd. 60,000 2,596,167
Fuji Bank Ltd. 91,000 1,981,741
Fuji Photo Film Co. Ltd. 181,000 5,611,335
Futaba Industrial Co. Ltd. 86,000 1,692,929
Hankyu Department Stores, Inc. 78,000 1,134,896
Hanshin Department Store Ltd. 49,000 405,402
Hitachi Ltd. 739,000 7,941,324
Hitachi Maxell Ltd. 94,000 2,020,256
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Honda Motor Co. Ltd. 390,000 $ 8,864,058
Ito-Yokado Co. Ltd. 138,000 8,097,190
Izumiya Co. Ltd. 12,000 228,235
Japan Airlines Co. Ltd. (a) 300,000 2,387,903
Onward Kashiyama & Co. Ltd. 189,000 3,181,304
Kao Corp. 79,000 1,051,781
Kobe Steel Ltd. Ord. (a) 1,012,000 3,127,764
Komatsu Ltd. Ord. 696,000 6,684,989
Komatsu Seiren Co. Ltd. 65,000 741,762
Marubeni Corp. 267,000 1,592,021
Marukyo Corp. 18,000 332,081
Matsushita Electric Industrial Co. Ltd. 125,000 2,199,135
Minebea Co. Ltd. 340,000 3,107,223
Mitsubishi Corp. 89,000 1,261,091
Mitsubishi Electric Co. Ord. 689,000 5,399,039
Mitsubishi Estate Co. Ltd. 164,000 2,292,616
Mitsubishi Heavy Industries Ltd. 323,000 2,868,927
Mitsui Trust and Banking 289,000 3,462,888
Mitsukoshi Ltd. 208,000 2,294,518
Nichido Fire & Marine Insurance Co. Ltd. 393,750 3,295,136
Nikko Securities Co. Ltd. 334,000 4,224,430
Nippon Shokubai Co. Ltd. 84,000 910,656
Nippon Thompson Co. Ltd. 99,000 979,126
Nissan Motor Co. Ltd. Ord. 306,000 2,572,431
Nitto Denko Corp. 63,000 1,012,505
Nomura International PLC (warrants) (a) 400 355,000
Nomura Securities Co. Ltd. 466,000 10,103,942
Omron Corp. 96,000 2,154,534
Orix Corp. 149,000 6,135,419
Ricoh Co. Ltd. Ord. 364,000 4,257,715
Rohm Co. Ltd. 33,000 2,090,057
Sakura Bank Ltd. 38,000 444,487
Sankyo Co. Ltd. 123,000 2,971,043
Santen Pharmaceutical Co. Ord. 2,200 51,258
Seino Transportation Co. Ltd. 91,000 1,592,316
Sekisui Chemical Co. Ltd. 213,000 2,673,767
Sekisui House Ltd. 118,000 1,458,799
Sho Bond Corp. Ord. 29,000 1,047,977
Sony Corp. 58,000 3,750,654
Sumitomo Marine and Fire Insurance Co. Ltd. 245,000 2,320,574
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Sumitomo Realty & Development Co. Ltd. 466,000 $ 3,731,368
Sumitomo Trust & Banking Co. Ltd. 205,000 2,982,740
TDK Corp. 35,000 1,993,723
Tadano Ltd. 9,000 86,444
Takashimaya Co. Ltd. 209,000 3,398,697
Takeda Chemical Industries Ltd. 314,000 5,404,783
Tokio Marine & Fire Insurance Co. Ltd. (The) 675,000 9,243,497
Toshiba Corp. 201,000 1,555,932
Toyota Motor Corp. 373,000 8,477,676
Tsugami Corp. 121,000 724,930
Uny Co. Ltd. 66,000 1,274,119
Yamanouchi Pharmaceutical Co. Ltd. 127,000 2,995,197
Yoshinoya D&C Co. Ltd. Ord. 30 425,087
222,281,212
KOREA (SOUTH) - 0.6%
Korea Electric Power Corp. 118,250 5,648,801
MALAYSIA - 0.2%
Magnum Corp. BHD 202,500 350,832
TA Enterprise BHD 1,145,000 1,974,534
2,325,366
MEXICO - 1.3%
BANACCI SA de CV (a):
Class B 326,100 752,911
Class L 26,577 54,695
Cemex SA, Series B 766,300 3,276,023
Cifra SA Class C 1,082,200 1,441,960
Consorcio Grupo Dina de CV sponsored ADR 38,400 105,600
Empresas Ica Sociedad Controladora SA de CV
sponsored ADR representing Ord. (part. certs.) 134,200 1,862,025
Grupo Carso SA de CV Class A-1 (a) 327,600 2,505,047
Grupo Dina sponsored ADR, Series L 11,173 23,743
Grupo Financiero Bancomer Class B (a) 3,614,000 1,608,388
Grupo Financiero Bancomer SA de CV (a):
sponsored ADR, Series C (b) 62,300 545,125
Series L 122,005 43,438
12,218,955
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - 5.0%
AKZO NV 66,500 $ 7,723,081
DSM NV 20,400 2,083,455
IHC Caland NV 35,600 1,398,238
ING Groep NV 147,357 11,377,491
KLM Royal Dutch Airlines NV 78,839 2,645,604
Philips Electronics NV (Bearer) 26,400 932,127
Pirelli Tyre Holdings NV Ord. (a) 349,300 2,894,695
Royal Dutch Petroleum Co. Ord. 58,100 8,276,749
Royal Ptt Nederland NV 135,313 5,077,692
Unilever NV Ord. 34,000 4,639,160
Vendex International NV 16,200 464,208
Vendex International NV (a)(b) 43,900 1,257,946
48,770,446
NORWAY - 1.5%
Bergesen Group Class B 52,800 907,568
Christiania Bank Free shares Ord. 450,400 979,719
Den Norske Bank Class A Free shares 684,500 1,967,896
Norsk Hydro AS 100,750 4,597,622
Orkla AS Class B (non-vtg.) 36,000 1,642,823
Saga Petroleum AS Class B 157,300 2,129,540
Transocean Drilling AS (a) 76,800 2,149,543
14,374,711
PAKISTAN - 0.0%
Hub Power Co. Ltd. GDR (a) 20,600 494,400
PERU - 0.0%
Banco Weise Ltd. sponsored ADR 73,400 495,450
PHILIPPINES - 0.1%
Filinvest Land, Inc. ORD (a) 1,250,625 645,638
SINGAPORE - 0.4%
Kim Engineering Holdings Ltd. 1,562,000 1,621,991
Overseas Union Bank Ltd. (For Reg.) 165,000 1,279,161
Van Der Horst Ltd. 186,000 919,417
3,820,569
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - 3.5%
Banco Bilbao Vizcaya SA Ord. (Reg.) (a) 220,600 $ 8,376,667
Banco de Santander SA Ord. (Reg.) 140,887 6,539,246
Banco Intercontinental Espanol 37,200 3,909,024
Repsol SA Ord. 89,700 3,286,347
Tabacalera SA, Series A 138,900 6,327,024
Telefonica de Espana SA Ord. 321,000 5,710,084
34,148,392
SWEDEN - 4.3%
Electrolux AB 78,600 3,957,453
Ericsson (L.M.) Telephone Co. Class B 75,800 1,534,402
Esselte AB Class B Free shares 47,900 959,051
Investor AB Class B Free shares 100,000 3,989,665
SKF AB Ord. 84,500 1,965,536
Scania AB (a):
Class A 30,700 849,696
Class B 313,900 8,664,824
Skandia Foersaekrings AB 55,500 1,266,461
Skandinaviska Enskilda Banken Class A Free shares 590,700 4,435,109
Volvo AB Class B 621,900 14,236,988
41,859,185
SWITZERLAND - 2.5%
Adia SA (Bearer) 8,500 1,857,774
Baloise-Holding (Reg.) 1,110 2,376,979
CIBA-GEIGY AG (Reg.) 5,400 6,252,632
Nestle SA (Reg.) 7,300 8,100,683
Roche Holdings Ltd. (part. certs.) 750 5,884,894
24,472,962
THAILAND - 0.8%
Krung Thai Bank Ltd. (For. Reg.) 472,770 2,320,941
Phatra Thanakit PCL (For. Reg.) 100 871
Ruam Pattana Fund II (For. Reg.) 242,700 158,543
Ruang Khao Unit Trust (For. Reg.) 466,300 299,993
Siam City Bank PCL (For. Reg.) 3,636,800 4,355,492
Telecomasia Corp. PCL (For. Reg.) (a) 117,300 306,503
7,442,343
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TURKEY - 0.1%
Aksigorta (b) 812,500 $ 167,295
Tofas Turk Otomobil Fabrikasi AS ADR (b) 173,300 86,650
Tofas Turk Otomobil Fabrikasi AS 4,272,800 459,755
713,700
UNITED KINGDOM - 11.7%
Allied Lyons PLC 271,204 2,099,115
Argyll Group PLC Ord. 4,187 20,953
Associated British Ports PLC Ord. 167,500 757,418
Barclays PLC Ord. 522,300 5,802,127
Barratt Developments PLC 736,400 2,991,385
Barratt Developments PLC (rights) (a) 184,100 188,696
Bass PLC Ord. 374,000 4,416,826
Berkely Group PLC 323,888 2,733,900
Booker PLC 221,900 1,291,054
Boots Co. PLC (The) 187,500 1,790,390
British Airways PLC Ord. 316,500 2,475,944
British Land Co. PLC, (The) Ord. 214,850 1,397,384
British Petroleum PLC Ord. 618,500 5,588,929
British Telecommunications PLC Ord. 473,300 2,600,362
Cable & Wireless PLC Ord. 427,000 3,356,463
Cadbury-Schweppes PLC Ord. 649,300 5,040,253
Caradon PLC 414,600 1,437,331
Christies International PLC 78,300 260,238
Cookson Group PLC 721,400 3,436,077
Courtaulds PLC Ord. 26,700 172,248
Dixons Group PLC 750,258 5,575,159
Grand Metropolitan PLC 765,958 5,045,290
Great Universal Stores PLC Ord Class A 260,000 2,839,301
Hanson Trust PLC Ord. 438,000 1,300,589
Lloyds Abbey Life PLC 376,200 3,037,950
Lloyds TSB Group PLC 355,171 1,705,087
MFI Furniture Group PLC 808,500 2,163,107
Mirror Group Newspaper PLC 1,233,600 4,239,444
National Westminster Bank PLC Ord. 566,500 5,230,048
Prudential Corp. PLC 459,500 3,168,665
RTZ PLC Ord. 124,100 1,956,605
Redland PLC Ord. 216,900 1,396,005
Rolls Royce PLC Ord. 576,400 2,059,074
Royal Insurance Holdings PLC 671,400 3,673,564
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Rugby Group 73,100 $ 141,035
Scottish Power PLC ADR 69,400 389,660
Shell Transport & Trading PLC 432,400 5,712,646
Shell Transport & Trading PLC ADR 10,900 872,000
South West Water PLC Ord. 247,100 2,543,860
Unigate Ltd. Ord. 191,300 1,198,080
United Utilities PLC 204,007 1,826,549
Vodafone Group PLC 779,793 3,120,639
Whitbread Co. PLC Class A 344,600 3,900,811
Wickes PLC 466,500 917,618
Yorkshire Water PLC Ord. 149,600 1,513,042
113,382,921
TOTAL COMMON STOCKS
(Cost $652,739,299) 742,705,474
PREFERRED STOCKS - 2.1%
CONVERTIBLE PREFERRED STOCKS - 0.1%
JAPAN - 0.1%
AJL PEPS Trust exchangeable 45,000 1,001,250
NONCONVERTIBLE PREFERRED STOCKS - 2.0%
AUSTRIA - 0.3%
Creditanstalt Bankverein 59,100 3,296,283
GERMANY - 0.4%
Porsche AG Ord. (a) 2,200 1,202,154
Volkswagen AG 4% 8,600 2,184,038
3,386,192
ITALY - 1.3%
Banco Ambro Veneto 100 161
Fiat Spa 737,800 1,390,352
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
ITALY - CONTINUED
SAI Sta Assicuratrice Industriale Spa 390,400 $ 1,691,616
Stet (Societa Finanziaria Telefonica) Spa 3,539,900 9,268,380
12,350,509
TOTAL NONCONVERTIBLE PREFERRED STOCKS 19,032,984
TOTAL PREFERRED STOCKS
(Cost $18,312,886) 20,034,234
CORPORATE BONDS - 0.3%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT
BERMUDA - 0.3%
MBL International Finance Bermuda 3%,
11/30/02 (cost $3,128,455) Aa3 $ 2,762,000 3,190,110
REPURCHASE AGREEMENTS - 21.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.33%, dated
4/30/96 due 5/1/96 (Note 3) $ 205,057,355 205,027,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $879,207,640) $ 970,956,818
LEGEND
1. Non-income producing
2. 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 $5,152,578 or 0.5% of net
assets.
INCOME TAX INFORMATION
At April 30, 1996, the aggregate cost of investment securities for income
tax purposes was $879,367,097. Net unrealized appreciation aggregated
$91,589,721, of which $108,065,896 related to appreciated investment
securities and $16,476,175 related to depreciated investment securities.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities
Aerospace & Defense 0.2%
Basic Industries 5.3
Conglomerates 0.1
Construction & Real Estate 5.3
Durables 10.4
Energy 4.5
Finance 18.2
Health 2.4
Holding Companies 0.7
Industrial Machinery &
Equipment 4.6
Media & Leisure 1.2
Nondurables 5.8
Precious Metals 0.2
Retail & Wholesale 5.4
Services 1.0
Repurchase Agreements 21.1
Technology 4.4
Transportation 1.8
Utilities 7.4
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 970,956,818
agreements of $205,027,000) (cost $879,207,640) -
See accompanying schedule
Cash 874
Receivable for investments sold 16,728,914
Receivable for fund shares sold 4,049,459
Dividends receivable 4,725,442
Interest receivable 34,525
Prepaid expenses 6,250
TOTAL ASSETS 996,502,282
LIABILITIES
Payable for investments purchased $ 17,846,306
Payable for fund shares redeemed 2,320,753
Accrued management fee 575,481
Distribution fees payable 413,370
Other payables and accrued expenses 339,771
TOTAL LIABILITIES 21,495,681
NET ASSETS $ 975,006,601
Net Assets consist of:
Paid in capital $ 852,468,456
Undistributed net investment income 2,334,028
Accumulated undistributed net realized gain (loss) on 28,523,269
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 91,680,848
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 975,006,601
CALCULATION OF MAXIMUM OFFERING PRICE $15.27
CLASS A:
NET ASSET VALUE, and redemption price per share
($956,078,334 (divided by) 62,607,518 shares)
Maximum offering price per share (100/96.50 of $15.27) $15.82
</TABLE>
CLASS B: $15.10
NET ASSET VALUE, and offering price per share
($13,155,018 (divided by) 871,126 shares) A
INSTITUTIONAL CLASS: $15.20
NET ASSET VALUE, offering price and redemption price
per share ($5,773,249 (divided by) 379,906 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
Dividends $ 8,254,134
Interest 3,214,110
11,468,244
Less foreign taxes withheld (993,106)
TOTAL INCOME 10,475,138
EXPENSES $ 3,221,871
Management fee
Basic fee
Performance adjustment (159,258
)
Transfer agent fees 1,065,291
Class A
Class B 12,582
Institutional Class 3,622
Distribution fees 2,304,838
Class A
Class B 36,294
Accounting fees and expenses 238,321
Non-interested trustees' compensation 1,430
Custodian fees and expenses 296,521
Registration fees 59,790
Class A
Class B 22,829
Institutional Class 21,373
Audit 26,753
Legal 7,043
Miscellaneous 23,713
Total expenses before reductions 7,183,013
Expense reductions (58,400 7,124,613
)
NET INVESTMENT INCOME 3,350,525
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 28,829,785
Foreign currency transactions (30,849 28,798,936
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 52,487,814
Assets and liabilities in foreign currencies (63,013 52,424,801
)
NET GAIN (LOSS) 81,223,737
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 84,574,262
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30,1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 3,350,525 $ 6,946,124
Net investment income
Net realized gain (loss) 28,798,936 (2,526,663)
Change in net unrealized appreciation (depreciation) 52,424,801 (5,095,943)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 84,574,262 (676,482)
FROM OPERATIONS
Distributions to shareholders (4,861,925) -
From net investment income
Class A
Class B (54,544) -
Institutional Class (33,859) -
From net realized gain (540,206) (812,249)
Class A
Class B (2,871) -
Institutional Class (1,612) -
In excess of net realized gain - (3,950,288)
Class A
TOTAL DISTRIBUTIONS (5,495,017) (4,762,537)
Share transactions - net increase (decrease) 149,517,625 98,075,180
TOTAL INCREASE (DECREASE) IN NET ASSETS 228,596,870 92,636,161
NET ASSETS
Beginning of period 746,409,731 653,773,570
End of period (including undistributed net investment $ 975,006,601 $ 746,409,731
income of $2,334,028 and $4,207,428, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1996
(UNAUDITED) 1995 1994 E 1993 1992 1991
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78 $ 9.55
beginning of period
Income from Investment
Operations
Net investment .06 C .07 .01 .03 .05 .14
income
Net realized and 1.39 (.11) 1.14 3.93 (.62) .17
unrealized
gain (loss)
Total from investment 1.45 (.04) 1.15 3.96 (.57) .31
operations
Less Distributions
From net investment (.09) - - (.07) (.14) (.07)
income
From net (.01) (.10) (.02) (.03) D - (.01) D
realized gain
Total distributions (.10) (.10) (.02) (.10) (.14) (.08)
Net asset value, $ 15.27 $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78
end of period
TOTAL RETURN B 10.47% (.25) 8.91% 44.13% (5.88) 3.25%
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 956,078 $ 741,928 $ 653,774 $ 221,370 $ 18,652 $ 19,091
(000 omitted)
Ratio of expenses to 1.71% A 1.90% 2.12% 2.38% 2.64% 2.85%
average net assets
Ratio of expenses to 1.70% A, 1.90% 2.12% 2.38% 2.64% 2.85%
average net assets F
after expense
reductions
Ratio of net investment .81% A 1.01% .05% (.18) .48% 1.48%
income to average %
net assets
Portfolio turnover rate 86% A 47% 34% 42% 168% 226%
Average commission $ .0216
rate G
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY
RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
E EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1996
(UNAUDITED) 1995 D
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.92 $ 13.89
Income from Investment Operations
Net investment income (loss) .00 E .01
Net realized and unrealized gain (loss) 1.38 .02
Total from investment operations 1.38 .03
Less Distributions
From net investment income (.19) -
From net realized gain (.01) -
Total distributions (.20) -
Net asset value, end of period $ 15.10 $ 13.92
TOTAL RETURN B, C 10.02% .22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 13,155 $ 2,999
Ratio of expenses to average net assets 2.56% A, H 1.97% A,
H
Ratio of expenses to average net assets after expense 2.56% A, F 1.97% A
reductions
Ratio of net investment income (loss) to average net assets (.05)% A .94% A
Portfolio turnover rate 86% A 47%
Average commission rate G $ .0216
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF CLASS B SHARES TO
OCTOBER 31, 1995).
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
H FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1996
(UNAUDITED) 1995 D
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.97 $ 13.89
Income from Investment Operations
Net investment income .06 E .05
Net realized and unrealized gain (loss) 1.39 .03
Total from investment operations 1.45 .08
Less Distributions
From net investment income (.21) -
From net realized gain (.01) -
Total distributions (.22) -
Net asset value, end of period $ 15.20 $ 13.97
TOTAL RETURN B, C 10.51% .58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 5,773 $ 1,482
Ratio of expenses to average net assets 1.60% A, .97% A,
H H
Ratio of expenses to average net assets after expense 1.58% A, .97% A
reductions F
Ratio of net investment income to average net assets .92% A 1.94% A
Portfolio turnover rate 86% A 47%
Average commission rate G $ .0216
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF INSTITUTIONAL CLASS
SHARES TO OCTOBER 31, 1995).
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
H FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER. (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Overseas Fund (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 fund offers Class A, Class B, and Institutional Class shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the fund are allocated on a pro rata basis to each class based
on the relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit 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 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
(including restricted 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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 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. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. FMR bears all organizational expenses except for
registering and qualifying each class and shares of each class for
distribution under federal and state securities law. These expenses are
borne by each class and amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends are declared separately for each class,
while capital gain distributions are declared at the fund level and
allocated to each class on a pro rata basis based on the number of shares
held by each class 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 foreign
currency transactions, passive foreign investment companies (PFIC) 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 unrealized 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements 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 U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. 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.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were $205,057,355 at 5.33%. The investments in repurchase
agreements through the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING
DATED 4/30/96, DUE 5/1/96
Number of dealers or banks 23
Maximum amount with one dealer or bank 11.8%
Aggregate principal amount of agreements $24,542,776,000
Aggregate maturity amount of agreements $24,546,409,934
Aggregate market value of collateral $25,046,511,376
Coupon rates of collateral 0% to 14.25%
Maturity dates of collateral 5/2/96 to 2/15/26
4. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $350,729,180 and $309,341,707, respectively.
5. 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 .2500% 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 investment performance of the lowest performing class as
compared to the appropriate index over a specified period of time. The
investment performance is measured separately for each class of shares. For
the period, the management fee was equivalent to an annualized rate of .73%
of average net assets after the performance adjustment.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research Far East Inc., Fidelity International Investment
Advisors (FIIA). In addition, 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 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.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
and Institutional Class shares (collectively referred to as "the Plans").
Under the Class A Plan and Class B Plan, the fund pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution and
service fee. For the period November 1, to December 31, 1995, this fee was
based on annual rates of .65% and 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class A and Class B shares, respectively.
Effective January 1, 1996, the Board of Trustees approved a revised Class A
distribution plan, under which the fee is based on an annual rate of .50%
of the average net assets of the Class A shares. For the period, the fund
paid FDC $2,304,838 and $36,294 under the Class A Plan and Class B Plan,
respectively, of which $2,097,449 and $9,382 were paid to securities
dealers, banks and other financial institutions for the distribution of
Class A and Class B shares, respectively, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
and Institutional Class shares. The Plans also authorize payments to third
parties that assist in the sale of the fund's shares or render shareholder
support services.
SALES LOAD. For the period November 1, 1995 through December 31, 1995, FDC
received a front-end sales charge of up to 4.75% for selling Class A shares
of the fund. Effective January 1, 1996, the Board of Trustees approved a
revised Class A sales charge. Under the revised arrangement, FDC receives a
front-end sales charge of up to 3.50% for selling Class A shares of the
fund. For the period, FDC received sales charges of $1,587,595 on sales of
Class A shares of the fund, of which $1,338,979 was paid to securities
dealers, banks, and other financial institutions. FDC also receives the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The charge is based on
declining rates which range from 4% to 1% of the lesser of the cost of
shares at the initial date of purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains. For
the period, FDC received contingent deferred sales charges of $9,703 on
Class B share redemptions from the fund. When Class B shares are sold, FDC
pays commissions from its own resources to dealers through which the sales
are made.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street) is
the transfer, dividend disbursing, and shareholder servicing agent for the
fund's Class A shares, while Fidelity Investments Institutional Operations
Company (FIIOC), an affiliate of FMR
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
(FIIOC) (collectively, with State Street, referred to as the Transfer
Agents) acts in that capacity for the fund's Class B and Institutional
Class shares. The Transfer Agents receive account fees and asset-based fees
that vary according to the account size and type of account of the
shareholders of the respective classes of the fund. With respect to the
Class A shares, State Street has delegated certain transfer, dividend
paying, and shareholder services to FIIOC for which FIIOC receives its
allocable share of all such fees. FIIOC 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
.26 %, .34%, and .22 % of average net assets for Class A, Class B, and
Institutional Class, respectively.
ACCOUNTING FEES. Fidelity Service Co., 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 $55,298 for the period.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates of average net assets for Class A, Class B, and
Institutional Class.
(I) CLASS A. Effective January 1, 1996, the expense limitation changed from
an annual rate of 2.40% to 2.25% of average net assets.
(II) CLASS B. For the period, this expense limitation was 2.75% of average
net assets and the reimbursement reduced expenses by $7,264.
(III) INSTITUTIONAL CLASS. For the period, this expense limitation was
1.75% of average net assets and the reimbursement reduced expenses by
$12,318.
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
$16,812 under this arrangement.
In addition, the fund has entered into an arrangement with its transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of the class' expenses. During the period, Class A, Class
B, and Institutional Class expenses were reduced by $21,772, $ 0, and $234,
respectively, under the transfer agent arrangement.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED APRIL 30, OCTOBER 31,
APRIL 30, OCTOBER 31,
1996 1995 A 1996 1995 A
CLASS A
Shares sold 17,584,571 28,552,115 $ 256,757,945 $ 388,824,457
Reinvestment of distributions 351,341 327,371 4,964,446 4,329,810
Shares redeemed (8,628,807) (22,093,191) (125,688,751) (299,648,593)
Net increase (decrease) 9,307,105 6,786,295 $ 136,033,640 $ 93,505,674
CLASS B
Shares sold 685,019 218,660 $ 9,916,328 $ 3,101,939
Reinvestment of distributions 3,850 - 54,016 -
Shares redeemed (33,204) (3,199) (479,928) (45,230)
Net increase (decrease) 655,665 215,461 $ 9,490,416 $ 3,056,709
INSTITUTIONAL CLASS
Shares sold 301,126 108,485 $ 4,394,071 $ 1,546,753
Reinvestment of distributions 2,320 - 32,661 -
Shares redeemed (29,660) (2,365) (433,163) (33,956)
Net increase (decrease) 273,786 106,120 $ 3,993,569 $ 1,512,797
I SHARE TRANSACTIONS FOR CLASS B AND THE INSTITUTIONAL CLASS ARE FOR THE
PERIOD JULY 3, 1995 (COMMENCEMENT OF SALES OF SHARES) TO OCTOBER 31, 1995.
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
Fidelity International Investment Advisors (U.K.) Limited
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Richard Mace, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, 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
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Global Resources Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Income & Growth Fund
TAXABLE 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 Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income 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)