(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
OVERSEAS
FUND - CLASS A, CLASS T AND CLASS B
SEMIANNUAL REPORT
APRIL 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 10 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 13 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 14 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 34 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
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Through the first four months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will greatly
reduce your vulnerability to any single decline. We know from experience,
for example, that stock prices have gone up over longer periods of time,
have significantly outperformed other types of investments and have stayed
ahead of inflation.
Second, you can further manage your investing risk through diversification.
A stock mutual fund, for instance, is already diversified, because it
invests in many different companies. You can increase your diversification
further by investing in a number of different stock funds, or in such other
investment categories as bonds. If you have a short investment time
horizon, you might want to consider moving some of your investment into a
money market fund, which seeks income and a stable share price by investing
in high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will achieve
its goal of maintaining a stable net asset value of $1.00 per share, and
that these types of funds are neither insured nor guaranteed by any agency
of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
FIDELITY 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. Total return reflects
the change in the value of an investment, assuming reinvestment of the
class' dividend income and capital gains (the profits earned upon the sale
of securities that have grown in value). The initial offering of Class A
shares took place on September 3, 1996. Class A shares bear a 0.25% 12b-1
fee. Returns prior to September 3, 1996 are those of Class T, the original
class of the fund, and reflect Class T's 0.50% 12b-1 fee (0.65% prior to
January 1, 1996). If Fidelity had not reimbursed certain class expenses,
the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class A 9.75% 9.90% 66.75% 76.42%
Advisor Overseas - Class A 3.99% 4.13% 58.00% 67.16%
(incl. max. 5.25% sales
charge)
MSCI EAFE Index 1.57% -0.89% 65.37% 54.11%
International Funds Average 6.17% 5.43% 66.38% 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 (MSCI EAFE Index) - a market capitalization
weighted, unmanaged index of over 1,000 foreign stocks. 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 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
The past six months average represents a peer group of 396 mutual funds.
These benchmarks include reinvested dividends and capital gains, if any,
and exclude the effect of sales charges.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class A 9.90% 10.77% 8.41%
Advisor Overseas - Class A 4.13% 9.58% 7.59%
(incl. max. 5.25% sales charge)
MSCI EAFE Index -0.89% 10.58% 6.35%
International Funds Average 5.43% 10.58% n/a
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' 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
FA Overseas -CL A MS EAFE Index (Net)
00252 MS001
1990/04/23 9475.00 10000.00
1990/04/30 9370.78 9758.32
1990/05/31 9778.20 10871.75
1990/06/30 10270.90 10776.00
1990/07/31 10877.30 10927.78
1990/08/31 9579.23 9866.60
1990/09/30 8764.38 8491.55
1990/10/31 9048.63 9814.69
1990/11/30 9058.10 9235.74
1990/12/31 8970.25 9385.36
1991/01/31 9189.97 9688.93
1991/02/28 9600.75 10727.57
1991/03/31 9065.78 10083.57
1991/04/30 9056.23 10182.59
1991/05/31 9065.78 10288.84
1991/06/30 8387.52 9532.81
1991/07/31 8865.17 10001.17
1991/08/31 8998.91 9798.07
1991/09/30 9467.01 10350.28
1991/10/31 9342.82 10497.00
1991/11/30 9103.99 10006.96
1991/12/31 9578.32 10523.75
1992/01/31 9607.41 10298.96
1992/02/29 9830.38 9930.34
1992/03/31 9529.85 9274.77
1992/04/30 10024.28 9318.86
1992/05/31 10431.45 9942.63
1992/06/30 10266.64 9471.02
1992/07/31 9869.16 9228.63
1992/08/31 9597.71 9807.46
1992/09/30 9452.29 9613.79
1992/10/31 8793.06 9109.50
1992/11/30 8676.72 9195.22
1992/12/31 9115.33 9242.78
1993/01/31 9576.00 9241.65
1993/02/28 9781.83 9520.81
1993/03/31 10379.71 10350.70
1993/04/30 11183.43 11333.00
1993/05/31 11477.47 11572.36
1993/06/30 11163.83 11391.80
1993/07/31 11712.71 11790.57
1993/08/31 12487.02 12427.06
1993/09/30 12359.60 12147.34
1993/10/31 12673.25 12521.69
1993/11/30 12183.18 11427.16
1993/12/31 12928.83 12252.29
1994/01/31 13782.89 13288.16
1994/02/28 13596.37 13251.36
1994/03/31 13252.78 12680.60
1994/04/30 13822.16 13218.63
1994/05/31 13566.92 13142.74
1994/06/30 13458.94 13328.47
1994/07/31 13802.53 13456.65
1994/08/31 13930.15 13775.24
1994/09/30 13498.20 13341.38
1994/10/31 13802.53 13785.64
1994/11/30 13262.60 13123.10
1994/12/31 13184.58 13205.28
1995/01/31 12640.58 12697.99
1995/02/28 12670.26 12661.55
1995/03/31 13065.89 13451.26
1995/04/30 13451.64 13957.15
1995/05/31 13600.00 13790.77
1995/06/30 13698.91 13548.93
1995/07/31 14292.36 14392.43
1995/08/31 13876.95 13843.41
1995/09/30 14045.09 14113.77
1995/10/31 13768.15 13734.39
1995/11/30 13896.73 14116.54
1995/12/31 14323.79 14685.30
1996/01/31 14582.77 14745.58
1996/02/29 14612.65 14795.43
1996/03/31 14821.83 15109.63
1996/04/30 15210.31 15548.91
1996/05/31 15210.31 15262.79
1996/06/30 15319.88 15348.69
1996/07/31 14871.64 14900.09
1996/08/31 14971.25 14932.73
1996/09/30 15389.60 15329.43
1996/10/31 15230.23 15172.57
1996/11/30 16017.14 15776.26
1996/12/31 16093.29 15573.32
1997/01/31 16093.29 15028.29
1997/02/28 16451.86 15274.09
1997/03/31 16588.96 15329.40
1997/04/30 16726.06 15410.74
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Overseas Fund - Class A on April 23, 1990,
when the fund started, and the current maximum 5.25% sales charge was paid.
As the chart shows, by April 30, 1997, the value of the investment would
have grown to $16,716 - a 67.16% increase on the initial investment. For
comparison, look at how the MSCI EAFE Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$15,411 - a 54.11% 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)
FIDELITY ADVISOR OVERSEAS FUND - CLASS T
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. Total return reflects
the change in the value of an investment, assuming reinvestment of the
class' dividend income and capital gains (the profits earned upon the sale
of securities that have grown in value).
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class T 9.78% 9.99% 66.90% 76.57%
Advisor Overseas - Class T 5.94% 6.14% 61.06% 70.39%
(incl. max. 3.50% sales
charge)
MSCI EAFE Index 1.57% -0.89% 65.37% 54.11%
International Funds Average 6.17% 5.43% 66.38% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T'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 T's returns to the
performance of the Morgan Stanley Capital International Europe,
Australasia, Far East Index (MSCI EAFE Index) - a market capitalization
weighted, unmanaged index of over 1,000 foreign stocks. To measure how
Class T's performance stacked up against its peers, you can compare it to
the international funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
The past six months average represents a peer group of 396 mutual funds.
These benchmarks include reinvested dividends and capital gains, if any,
and exclude the effect of sales charges.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class T 9.99% 10.79% 8.43%
Advisor Overseas - Class T 6.14% 10.00% 7.88%
(incl. max. 3.50% sales charge)
MSCI EAFE Index -0.89% 10.58% 6.35%
International Funds Average 5.43% 10.58% n/a
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Class T shares' cumulative return and
show you what would have happened if Class T shares had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
FA Overseas -CL T MS EAFE Index (Net)
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
1996/05/31 15491.24 15262.79
1996/06/30 15602.83 15348.69
1996/07/31 15146.31 14900.09
1996/08/31 15247.76 14932.73
1996/09/30 15683.99 15329.43
1996/10/31 15521.67 15172.57
1996/11/30 16323.12 15776.26
1996/12/31 16398.87 15573.32
1997/01/31 16398.87 15028.29
1997/02/28 16772.54 15274.09
1997/03/31 16911.33 15329.40
1997/04/30 17039.45 15410.74
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Overseas Fund - Class T on April 23, 1990,
when the fund started, and the current maximum 3.50% sales charge was paid.
As the chart shows, by April 30, 1997, the value of the investment would
have grown to $17,039 - a 70.39% increase on the initial investment. For
comparison, look at how the MSCI EAFE Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$15,411 - a 54.11% 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)
FIDELITY 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. Total return reflects
the change in the value of an investment, assuming reinvestment of the
class' dividend income and capital gains (the profits earned upon the sale
of 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 T, the original class of the fund, and reflect Class T'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 5%, 5%, 2% and 0%, respectively. If Fidelity
had not reimbursed certain class expenses, the past five years and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED APRIL 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Class B 9.51% 9.22% 65.04% 74.61%
Advisor Overseas - Class B 4.51% 4.22% 63.04% 74.61%
(incl. contingent deferred sales
charge)
MSCI EAFE Index 1.57% -0.89% 65.37% 54.11%
International Funds Average 6.17% 5.43% 66.38% n/a
</TABLE>
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 (MSCI EAFE Index) - a market capitalization
weighted, unmanaged index of over 1,000 foreign stocks. 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 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
The past six months average represents a peer group of 396 mutual funds.
These benchmarks include reinvested dividends and capital gains, if any,
and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Class B 9.22% 10.54% 8.26%
Advisor Overseas - Class B 4.22% 10.27% 8.26%
(incl. contingent deferred sales charge)
MSCI EAFE Index -0.89% 10.58% 6.35%
International Funds Average 5.43% 10.58% n/a
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Class B shares' 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
FA Overseas -CL B MS EAFE Index (Net)
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 15987.52 15548.91
1996/05/31 15966.35 15262.79
1996/06/30 16072.23 15348.69
1996/07/31 15595.78 14900.09
1996/08/31 15691.07 14932.73
1996/09/30 16125.16 15329.43
1996/10/31 15945.17 15172.57
1996/11/30 16771.02 15776.26
1996/12/31 16838.38 15573.32
1997/01/31 16838.38 15028.29
1997/02/28 17205.39 15274.09
1997/03/31 17338.86 15329.40
1997/04/30 17461.20 15410.74
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Overseas Fund - Class B on April 23, 1990,
when the fund started. As the chart shows, by April 30, 1997, the value of
the investment would have been $17,461 - a 74.61% increase on the initial
investment. For comparison, look at how the MSCI EAFE Index did over the
same period. With dividends reinvested, the same $10,000 investment would
have grown to $15,411 - a 54.11% 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
Q. HOW DID THE FUND PERFORM, RICK?
A. For the six months that ended April 30, 1997, the fund's Class A, Class
T and Class B shares produced returns of 9.75%, 9.78% and 9.51%,
respectively. For the same period, the Morgan Stanley Capital International
Europe, Australasia, Far East Index (EAFE) returned 1.57%. The
international funds average, according to Lipper Analytical Services, had a
six-month return of 6.17%. For the 12 months that ended April 30, 1997, the
fund's Class A, Class T and Class B shares returned 9.90%, 9.99% and 9.22%,
respectively, while the EAFE index and Lipper peer group returned -0.89%
and 5.43%, respectively.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG SHOWING?
A. Individual stock selection had the biggest influence on the fund's
return, as several of the fund's larger positions performed well. Market
selection also played a key role during this time, specifically the fund's
underweighting in Japan relative to the EAFE index. While the EAFE index
had an approximate Japanese weighting of 30%, I kept the fund at around 22%
on average. As Japan's well-documented economic woes continued to hamper
the overall performance of Japanese securities, my strategy of
underweighting Japanese securities worked in the fund's favor. I would add,
however, that while market selection is important, I place more emphasis on
analyzing the specific pluses and minuses of a stock than I do on the
country where a stock is issued.
Q. HOW DID THE FUND'S EUROPEAN HOLDINGS PERFORM?
A. The overall decline in European interest rates had favorable
implications for the European stock markets. This rate environment, which
may have been related to continuing optimism on proposed economic unity
throughout Europe, led to strong performances in countries such as Spain,
Italy and Sweden. In Europe, I basically continued my strategy of looking
for companies based on three themes: those that would benefit from a rising
dollar, those that would gain from the overall improvement of world
economies and those companies that were engaging in restructurings designed
to improve the return on capital employed in their businesses.
Q. DID YOUR STRATEGIES LEAD YOU TO ANY OTHER REGIONS OF THE WORLD?
A. The fund's Latin American positions - with the exception of Telebras, a
privatized telecommunications company based in Brazil - have been
relatively uneventful. I'll invest in emerging market stocks, but only when
valuations are attractive. If an emerging market stock is undervalued and
has a potentially attractive risk/reward tradeoff, I'll consider adding it
to the portfolio. The other area that came into play was Canada. I've
previously mentioned my strategy of looking for stocks that can benefit
from improving economies, and Canada's many natural resource-related stocks
fit that bill. Stocks such as Inco, a nickel producer, aluminum-producer
Alcan, and Noranda, a paper and forest products company, reflected this
strategy.
Q. FOLLOWING THE LEAD OF AMERICAN CORPORATIONS, INTERNATIONAL COMPANIES
HAVE BEEN IMPLEMENTING VARIOUS COST-CUTTING AND RESTRUCTURING STRATEGIES.
CAN YOU EXPLAIN WHY THIS IS A POSITIVE DEVELOPMENT? HOW HAS THIS TREND
AFFECTED THE FUND?
A. Worldwide, company managements have gotten smarter about how they run
their businesses. In order to earn returns above their cost of capital,
companies have had to reduce expenses, either by cutting personnel,
restructuring their balance sheets or upgrading their technology. As they
strive to become more shareholder-friendly, international companies also
are coming up with new ways to utilize their existing assets. In terms of
the fund, several individual holdings are good illustrations of this trend.
For example, Volvo, one of the fund's more significant stakes and a strong
performer during the period, divested many of its non-core businesses and
has announced plans to implement a share redemption program in which the
company will buy back one of every 20 outstanding shares. As companies
strive to push their share prices up, they can do one of two things. They
can wait for investors to bid the price up or they can take a proactive
approach and try to increase the value themselves. In the case of Volvo,
management has taken a proactive stance and set forth a list of goals for
doing this; for the most part, the company has seen its plan through. This
emphasis on managing core businesses to be more efficient can enhance a
company's value and put smiles on the faces of money managers throughout
the world.
Q. WHICH INDIVIDUAL STOCK POSITIONS BENEFITED THE FUND? WERE THERE ANY
DISAPPOINTMENTS?
A. As I mentioned earlier, individual stock selection was a real key to the
fund's performance. Aside from the strong performances of Volvo and
Telebras, the fund's positions in Total, a French-based oil company, and
Alcatel, which specializes in telecommunications and electrical equipment,
turned in good results. Disappointments included the poor performance of
several Japanese brokerage companies, including Nomura Securities and Nikko
Securities.
Q. WHAT'S YOUR OUTLOOK?
A. More and more, individual stock selection is outdistancing country
selection in terms of performance influence. In my opinion, this trend will
most likely continue and will place even more emphasis on thorough research
and analysis of individual stocks. With this in mind, I'll continue to use
my three-pronged approach of looking for stocks that can benefit from a
rising dollar, stronger economies and increased corporate efficiencies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S 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, 1997,
more than $1.1 billion
MANAGER: Richard Mace,
since 1996; joined Fidelity
in 1987
(checkmark)
RICK MACE ON FIDELITY'S
INTERNATIONAL STOCK PICKING
PROCESS:
"Over the past few years,
Fidelity has been increasing
its presence on the
international investing stage.
The process of searching the
globe for attractive
investment opportunities isn't
all that different from choosing
domestic stocks. Like U.S.
stock fund managers, we
target stocks, conduct our
analysis, pick up the phone
and visit companies on a
regular basis. The best way to
find opportunities is to take a
hands-on approach; if you
turn over enough rocks and
kick enough tires, you'll find
some winners. Fidelity's
international stock picking
machine involves hundreds
of analysts and fund
managers, located in several
countries around the world.
We consider our international
team to be among the best
and brightest in the industry,
and we function as a
complete team. The fact that
we have aggressively grown
our international staff, I think, is
a reflection of Fidelity's
commitment to being
successful internationally. And
we've started to see the
benefits. Fidelity recently won
several distinguished awards
for its international research
and fund management.
Perhaps most significantly,
those awards singled out
Fidelity's impressive devotion
to teamwork. One award, in
fact, identified "Team Fidelity"
as its honoree."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Alcatel Alsthom Compagnie Generale 2.2 1.6
d'Electricite SA (France, Electrical
Equipment)
Total SA Class B (France, Oil & Gas) 1.9 2.2
Fuji Photo Film Co. Ltd. 1.7 1.4
(Japan, Photographic Equipment)
Novartis AG (Reg.) (Switzerland, 1.7 0.0
Drugs & Pharmaceuticals)
Takeda Chemical Industries Ltd. (Japan, 1.7 1.3
Drugs & Pharmaceuticals)
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Finance 13.9 14.2
Durables 10.5 14.1
Basic Industries 10.4 9.9
Technology 8.4 5.4
Health 7.8 4.4
TOP FIVE COUNTRIES AS OF APRIL 30, 1997
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
Japan 24.2 23.7
United Kingdom 13.9 11.9
France 10.1 9.3
Netherlands 7.7 5.4
Sweden 5.3 6.6
TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY, INCLUDING
WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT RISKS.
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1997 AS OF OCTOBER 31, 1996
Row: 1, Col: 1, Value: 9.9
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 44.9
Row: 1, Col: 4, Value: 44.0
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 48.1
Row: 1, Col: 4, Value: 40.0
Stocks, closed-end
investment companies
and equity futures 89.9%
Bonds 0.2%
Short-term
investments 9.9%
Stocks, closed-end
investment companies
and equity futures 88.1%
Bonds 0.3%
Short-term
investments 11.6%
INVESTMENTS APRIL 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.7%
SHARES VALUE (NOTE 1)
(000S)
ARGENTINA - 0.2%
Perez Companc Class B 273,523 $ 2,219
AUSTRALIA - 1.7%
Aberfoyle Ltd. 14,300 41
Australia & New Zealand Banking Group Ltd. 85,100 544
Brambles Industries Ltd. 126,150 2,286
CSR Ltd. 1,341,500 4,967
Coles Myer Ltd. 455,700 2,217
National Australia Bank Ltd. 81,300 1,114
Pasminco Ltd. 297,000 566
QNI Ltd. 540,953 1,006
Tabcorp Holdings Ltd. 42,700 213
Western Mining Holdings Ltd. 623,489 3,701
Westpac Banking Corp. 92,900 501
Woolworths Ltd. 768,400 2,269
19,425
AUSTRIA - 0.0%
Voest-Alpine Stahl AG 13,600 537
BELGIUM - 0.2%
BBL (Banque Bruxelles Lambert) 400 100
Credit Communal Holding/Dexia (c) 15,300 1,521
Delhaize Freres & Cie Le Lion SA 1,400 70
1,691
BRAZIL - 0.7%
Multicanal Participacoes SA sponsored ADR 58,800 853
Telebras sponsored ADR 59,400 6,816
7,669
CANADA - 2.6%
Alcan Aluminium Ltd. 171,800 5,827
Alliance Forest Products (c) 54,300 1,243
BCE, Inc. 73,500 3,440
Bro-X Minerals Ltd. 27,050 15
Canadian Natural Resources Ltd. (a) 111,600 2,659
Cominco Ltd. (a) 152,800 3,936
Domtar, Inc. 53,300 454
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CANADA - CONTINUED
Greenstone Resources Ltd. (a) 89,500 $ 845
Inco Ltd. 197,500 6,325
Noranda, Inc. 190,700 4,026
Renaissance Energy Ltd. (a) 42,400 1,174
29,944
DENMARK - 0.7%
Den Danske Bank Group AS 35,000 3,028
International Service Systems AS, Series B 82,500 2,441
Novo-Nordisk AS Class B 15,000 1,484
Unidanmark AS Class A 31,500 1,558
8,511
FINLAND - 1.9%
Cultor OY, Series 1 36,400 1,974
Huhtamaki Ord. 120,200 5,214
Metsa-Serla Ltd. Class B 357,000 2,678
Nokia Corp. AB, Series A 82,500 5,147
Pohjola Class B 77,830 2,216
Rauma OY 1,464 30
UPM-Kymmene Corp. 52,600 1,204
Valmet OY 217,040 3,670
22,133
FRANCE - 10.1%
Alcatel Alsthom Compagnie Generale d'Electricite SA 229,500 25,530
Axa SA 71,490 4,400
BQE National Paris Ord. 37,300 1,592
Canal Plus SA 6,611 1,194
Cap Gemini Sogeti SA 18,200 1,103
Compagnie de Saint Gobain 9,900 1,327
Credit Commercial de France Ord. 35,700 1,585
Credit Local de France SA 25,200 2,332
Eramet SA 82,875 4,190
Generale des Eaux, Cie 12,000 1,672
Group Axime (a) 1,300 156
Groupe Danone 25,600 3,730
Lafarge Coppee SA 39,050 2,562
Lagardere S.C.A. (Reg.) 49,600 1,535
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FRANCE - CONTINUED
Michelin SA (Compagnie Generale des Etablissements)
Class B 121,900 $ 6,813
Nationale Elf Aquitaine 82,400 7,994
Paribas SA (Cie Financiere) Class A 28,800 1,817
Pechiney SA Class A 257,824 9,634
Rhone Poulenc SA Class A 216,200 7,274
Societe Generale Class A 41,500 4,652
Total SA Class B 261,090 21,662
Unibail 5,100 494
Usinor Sacilor 122,000 1,844
Valeo SA 10,000 617
115,709
GERMANY - 4.2%
Allianz Versich Holdings Ord. (Reg.) (a) 8,000 1,552
Altana AG 400 310
BASF AG 85,900 3,364
Bayer AG 168,500 6,545
Buderus AG 5,200 2,439
Continental Gummi-Werke AG 84,300 1,853
Daimler-Benz AG Ord. 48,000 3,555
Daimler-Benz AG (rights) (a) 48,000 4
Degussa AG 48,200 2,127
Dresdner Bank AG Ord. 19,000 605
Hoechst AG Ord. 53,500 2,102
Karstadt AG 1,100 329
Lufthansa 73,000 1,016
Mannesmann AG Ord. 7,100 2,792
Metallgesellschaft AG Ord. (a) 164,400 3,397
Thyssen AG Ord. 2,600 565
Veba AG Ord. 118,700 6,137
Viag AG 500 222
Volkswagen AG 15,327 9,705
48,619
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HONG KONG - 1.5%
Great Eagle Holdings Ltd. 334,000 $ 998
HSBC Holdings PLC 468,800 11,828
Hong Kong & China Gas Co. Ltd. 1,067,040 1,694
Hutchison Whampoa Ltd. Ord. 152,000 1,128
Peregrine Investments Holdings Ltd. 725,000 1,114
Wharf Holdings Ltd. 131,000 495
17,257
INDONESIA - 0.3%
Matahari Putra Prima PT (For. Reg.) 1,417,500 1,983
Multipolar PT (For. Reg.) 1,534,000 884
Putra Surya Multidana PT (For. Reg.) 561,000 635
3,502
IRELAND - 0.9%
Bank of Ireland, Inc. 603,700 6,283
CRH PLC 63,600 619
Independent Newspapers PLC 560,666 2,867
9,769
ITALY - 1.4%
Credito Italiano Ord. 2,546,100 3,573
Eni Spa 1,344,700 6,850
Telecom Italia Spa 480,700 1,273
Telecom Italia Mobile Spa 1,228,100 3,855
15,551
JAPAN - 23.4%
Acom Co. Ltd. 55,000 2,243
Amway Japan Ltd. 107,600 3,278
Asahi Chemical Industry Co. Ltd. 172,000 1,002
Asahi Breweries Ltd. 210,000 2,314
Bank of Tokyo-Mitsubishi Ltd. 207,000 3,275
Canon, Inc. 652,000 15,447
Citizen Watch Co. Ltd. Ord. 299,000 2,149
DDI Corp. Ord. 577 3,829
Dai-Tokyo Fire & Marine Insurance Ord. 224,000 1,049
Daiichi Pharmaceutical Co. Ltd. 62,000 996
Daito Trust Construction Co. 374,800 3,776
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
JAPAN - CONTINUED
Daiwa House Industry Co. Ltd. 186,000 $ 2,079
Daiwa Securities Co. Ltd. 486,000 3,232
Denso Corp. 135,000 3,071
Denny's Japan Co. Ltd. 50,600 1,318
Fuji Bank Ltd. 315,000 3,546
Fuji Photo Film Co. Ltd. 526,000 20,081
Fujitsu Ltd. 688,000 7,148
Hitachi Ltd. 1,493,000 13,512
Hitachi Maxell Ltd. 242,000 5,086
Honda Motor Co. Ltd. 283,000 8,777
Hoya Corp. 22,000 1,008
Ibiden Co. Ltd. 192,000 2,524
Ito-Yokado Co. Ltd. 108,000 5,177
Jusco Co. Ltd. 69,000 2,118
Kao Corp. 82,000 955
Kobe Steel Ltd. Ord. (a) 537,000 976
Komatsu Ltd. Ord. 786,000 5,741
Konica Corp. 39,000 227
Kyocera Corp. 16,000 957
Matsushita Communication Industrial Co. Ltd. 20,000 516
Matsushita Electric Industrial Co. Ltd. 512,000 8,181
Matsushita Electric Works Co. Ltd. 185,000 1,878
Minebea Co. Ltd. 28,000 234
Minolta Camera Co. Ltd. 401,000 2,500
Mitsubishi Estate Co. Ltd. 178,000 2,242
Mitsubishi Heavy Industries Ltd. 744,000 4,907
Murata Manufacturing Co. Ltd. 15,000 553
NEC Corp. 131,000 1,598
NKK Corp. 492,000 1,061
Nichiei Co. Ltd. 18,900 1,517
Nikko Securities Co. Ltd. 359,000 2,001
Nintendo Co. Ltd. Ord. 134,300 9,810
Nippon Telegraph & Telephone Corp. Ord. 306 2,156
Nitto Denko Corp. 16,000 232
Nomura Securities Co. Ltd. 507,000 5,667
Omron Corp. 105,000 1,984
Onward Kashiyama & Co. Ltd. 205,000 2,630
Orix Corp. 163,000 8,224
Ricoh Co. Ltd. Ord. 398,000 4,730
Rohm Co. Ltd. 54,000 4,182
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
JAPAN - CONTINUED
Sakura Bank Ltd. 1,400,000 $ 7,394
Sankyo Co. Ltd. 147,000 3,934
Shin-Etsu Chemical Co. Ltd. 52,000 1,043
Shinko Electric Industries Co. Ltd. 4,300 147
Sony Corp. 154,000 11,200
Shohkoh Fund & Co. Ltd. 2,200 512
TDK Corp. 63,000 4,537
Takeda Chemical Industries Ltd. 825,000 19,028
Terumo Corp. 78,000 1,185
THK Co. Ltd. 62,000 717
Toyota Motor Corp. 590,000 17,090
Tokyo Electron Ltd. 67,100 2,588
Uni Charm Corp. Ord. 51,000 1,562
Uny Co. Ltd. 174,000 3,054
Xebio Co. Ltd. 7,200 165
Yamanouchi Pharmaceutical Co. Ltd. 51,000 1,088
268,938
KOREA (SOUTH) - 0.3%
Korea Electric Power Corp. 123,550 3,684
MALAYSIA - 0.3%
Arab Malaysian Corp. BHD 424,000 1,756
Magnum Corp. BHD 247,000 392
Oriental Holdings BHD 115,000 870
3,018
MEXICO - 0.3%
Cifra SA Series C 1,127,200 1,730
Cifra SA de CV, Series A 137,865 208
Gruma SA Class B sponsored ADR (a)(c) 56,800 1,079
Tubos De Acero De Mexico ADR (a) 49,500 811
3,828
NETHERLANDS - 7.7%
AKZO Nobel NV 96,400 12,425
Ahold NV 10,000 683
Chicago Bridge & Iron Co. NV 85,600 1,455
DSM NV 45,900 4,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NETHERLANDS - CONTINUED
ING Groep NV 253,970 $ 9,976
KBB NV Ord. 23,500 1,551
KLM Royal Dutch Air Lines NV 25,000 739
Koninklijke Hoogovens NV 75,300 3,441
Koninklijke KNP BT NV 184,000 3,628
Koninklijke Pakhoed NV 3,200 104
New Holland NV (a) 155,000 3,429
Philips Electronics NV (Bearer) 321,300 16,780
Royal Dutch Petroleum Co. Ord. 71,100 12,710
Unilever NV Ord. 64,600 12,569
Vendex International NV (c) 92,100 4,375
88,437
NETHERLANDS ANTILLES - 0.2%
Schlumberger Ltd. 20,800 2,304
NEW ZEALAND - 0.0%
Air New Zealand Ltd. Class B 85,900 248
NORWAY - 0.7%
Den Norske Bank AS Class A Free shares 301,900 1,094
Elkem ASA 225,200 4,317
Orkla AS Class B (non-vtg.) 9,900 766
NCL Holdings AS 67,300 170
Saga Petroleum AS Class B 79,000 1,270
7,617
PERU - 0.1%
Compania de Minas Buenaventura SA Class B
sponsored ADR 49,400 1,074
SINGAPORE - 0.1%
Kim Engineering Holdings Ltd. 1,700,000 1,398
SOUTH AFRICA - 0.3%
Gencor Ltd. (Reg.) 497,900 2,094
JCI Ltd. 125,200 1,210
3,304
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SPAIN - 2.3%
Acerinox SA (Reg.) 18,409 $ 2,694
Asturiana del Zinc SA (c) 229,100 3,531
Banco Bilbao Vizcaya SA Ord. (Reg.) 46,600 3,141
Banco de Santander SA Ord. (Reg.) 26,700 2,012
Banco Intercontinental Espanol 6,600 986
Tabacalera SA, Series A 123,900 6,230
Telefonica de Espana SA Ord. (a) 318,800 8,179
26,773
SWEDEN - 5.3%
ABB AB, Series B 94,000 1,138
Astra AB Class A Free shares 251,700 10,296
Assi Doman AB Free shares 40,200 1,007
Electrolux AB 60,500 3,470
Ericsson (L.M.) Telephone Co.:
Class B 97,800 3,091
Class B ADR 30,500 1,026
Esselte AB Class B Free shares 57,700 1,316
Investor AB Class B Free shares 50,000 2,186
Nordbanken AB 98,600 3,028
SKF AB Ord. 22,200 481
Scania AB Class B 132,100 3,409
Skandia Foersaekrings AB 157,400 4,553
Svenska Cellulosa AB (SCA) Class B Ord. 64,500 1,381
Svenska Handelsbanken 100,100 2,755
Swedish Match Co. 1,326,600 4,328
Volvo AB Class B 686,500 17,279
60,744
SWITZERLAND - 4.6%
ABB AG (Bearer) 400 484
Credit Suisse Group (Reg.) 121,725 13,705
Julius Baer Holding AG 3,429 4,292
Nestle SA (Reg.) 5,693 6,913
Novartis AG (Reg.) 15,000 19,764
Roche Holding AG participation certificates 762 6,436
Sulzer AG (Reg.) 1,500 1,033
Surveillance, Societe Generale (Bearer) 275 569
53,196
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED KINGDOM - 13.9%
Asda Group PLC 1,723,600 $ 3,218
BAT Industries PLC Ord. 967,700 8,154
BOC Group PLC 31,500 483
Barclays PLC Ord. 144,000 2,682
Barratt Developments PLC 529,800 2,228
Bass PLC Ord. 153,000 1,977
Blue Circle Industries PLC 273,000 1,862
Boots Co. PLC (The) Class L 204,100 2,293
British Aerospace PLC 164,200 3,495
British Petroleum PLC:
Ord. 611,435 7,028
ADR 15,500 2,133
British Land Co. PLC (The) Ord. 32,300 321
British Steel PLC Ord. 780,000 1,760
British Telecommunications PLC Ord. 545,000 3,999
Cable & Wireless PLC Ord. 218,500 1,685
Caradon PLC 1,702,400 6,827
Cookson Group PLC 2,498,100 8,801
Dixons Group PLC 208,858 1,714
English China Clay PLC 99,700 333
Glaxo Holdings PLC 338,900 6,674
Granada Group PLC 523,400 7,571
Grand Metropolitan PLC 953,758 7,974
Guinness PLC Ord. 137,900 1,142
HSBC Holdings PLC Ord. 20,300 534
Hays PLC 60,700 537
ICI (Imperial Chemical Industries) PLC Class L 84,800 965
Inchcape PLC Ord. 239,500 1,065
Ladbroke Group PLC Ord. 724,800 2,706
Lloyds TSB Group PLC 1,188,774 10,866
LucasVarity PLC 1,385,800 4,207
Mercury Asset Management Group PLC 49,000 1,063
National Grid Co. PLC 991,700 3,574
Perpetual PLC 12,500 534
Prudential Corp. PLC 272,839 2,653
RTZ Corp. PLC Ord. 33,600 535
Redland PLC Ord. 290,800 1,652
Rentokil Group PLC 1,593,800 10,456
Rolls Royce PLC Ord. 488,378 1,927
Rugby Group PLC 654,700 1,190
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED KINGDOM - CONTINUED
Shell Transport & Trading Co. PLC (Reg.) 485,500 $ 8,599
SmithKline Beecham PLC Ord. 604,430 9,695
Thames Water PLC Ord. 92,700 1,016
Unigate PLC 210,900 1,592
Unilever PLC Ord. 170,700 4,492
Vodafone Group PLC 1,177,893 5,278
WPP Group PLC 160,100 652
160,142
UNITED STATES OF AMERICA - 1.8%
Alumax, Inc. (a) 154,400 5,636
Aluminum Co. of America 88,200 6,162
D.R. Horton, Inc. 103,900 1,013
Hertz Corp. Class A 4,500 131
Jefferson Smurfit Corp. (a) 37,000 481
Kaiser Aluminum Corp. (a) 83,400 897
MCI Communications Corp. 134,700 5,135
Newmont Mining Corp. 29,200 1,011
Silgan Holdings, Inc. 1,600 42
20,508
TOTAL COMMON STOCKS
(Cost $886,410) 1,007,749
PREFERRED STOCKS - 1.1%
CONVERTIBLE PREFERRED STOCKS - 0.1%
JAPAN - 0.1%
AJL participating trust (a) 45,000 726
NONCONVERTIBLE PREFERRED STOCKS - 1.0%
ITALY - 1.0%
Banco Ambro Veneto 100 -
Stet (Societa Finanziaria Telefonica) Spa 2,167,900 8,032
Telecom Italia Mobile Spa de Risp 2,121,500 3,920
TOTAL NONCONVERTIBLE PREFERRED STOCKS 11,952
TOTAL PREFERRED STOCKS
(Cost $7,902) 12,678
CLOSED-END INVESTMENT COMPANIES - 0.4%
SHARES VALUE (NOTE 1)
(000S)
EMERGING MARKETS - 0.2%
GT Global Developing Markets Fund 117,300 $ 1,393
Morgan Stanley Asia-Pacific Fund, Inc. 52,400 511
TCW/DW Emerging Markets Opportunities Trust (SBI) 45,600 604
Templeton Dragon Fund, Inc. 33,000 487
2,995
GERMANY - 0.2%
Emerging Germany Fund, Inc. 23,700 210
New Germany Fund, Inc. (The) (a) 118,800 1,708
1,918
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $4,905) 4,913
CONVERTIBLE BONDS - 0.2%
PRINCIPAL
AMOUNT (000S)
BERMUDA - 0.2%
MBL International Finance of Bermuda
3%, 11/30/02 (Cost $3,166) $ 2,797 2,839
U.S. GOVERNMENT OBLIGATIONS - 0.0%
U.S. Treasury Bill, yields at dates of purchase
5.27% to 5.30%, 6/26/97 (b) (Cost $273) 275 273
CASH EQUIVALENTS - 10.6%
SHARES
Taxable Central Cash Fund (d)
(Cost $121,288) 121,287,818 121,288
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,023,944) $ 1,149,740
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
87 Nikkei 225 Futures Contracts June 1997 $ 8,457 $ 290
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.7%
LEGEND
1. Non-income producing
2. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $248,000.
3. 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 $11,749,000 or 1.0% of net
assets.
4. At period end, the seven-day yield on the Taxable Central Cash Fund was
5.45%. The yield refers to the income earned by investing in the fund over
the seven-day period, expressed as an annual percentage.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities
Aerospace & Defense 0.5%
Basic Industries 10.4
Cash Equivalents 10.6
Construction & Real Estate 3.5
Durables 10.5
Energy 6.7
Finance 13.9
Health 7.8
Holding Companies 1.2
Industrial Machinery &
Equipment 4.9
Media & Leisure 2.4
Nondurables 6.3
Precious Metals 0.6
Retail & Wholesale 3.4
Services 2.0
Technology 8.4
Transportation 0.4
Utilities 6.5
100.0%
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $1,024,136,000. Net unrealized appreciation aggregated
$125,604,000, of which $170,842,000 related to appreciated investment
securities and $45,238,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $1,023,944) - $ 1,149,740
See accompanying schedule
Cash 1,324
Receivable for investments sold 13,330
Receivable for fund shares sold 3,277
Dividends receivable 4,825
Interest receivable 587
Receivable for daily variation on futures contracts 156
Other receivables 10
Prepaid expenses 5
TOTAL ASSETS 1,173,254
LIABILITIES
Payable for investments purchased $ 29,445
Payable for fund shares redeemed 2,210
Accrued management fee 732
Distribution fees payable 459
Other payables and accrued expenses 342
TOTAL LIABILITIES 33,188
NET ASSETS $ 1,140,066
Net Assets consist of:
Paid in capital $ 975,572
Undistributed net investment income 2,549
Accumulated undistributed net realized gain (loss) on 35,992
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 125,953
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 1,140,066
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997 (UNAUDITED)
CALCULATION OF MAXIMUM OFFERING PRICE $15.85
CLASS A:
NET ASSET VALUE and redemption price per share
($2,170 (divided by) 136.87 shares)
Maximum offering price per share (100/94.75 of $15.85) $16.73
CLASS T: $15.96
NET ASSET VALUE and redemption price per share
($1,082,381 (divided by) 67,798 shares)
Maximum offering price per share (100/96.50 of $15.96) $16.54
CLASS B: $15.70
NET ASSET VALUE and offering price per share
($26,135 (divided by) 1,664.48 shares) A
INSTITUTIONAL CLASS: $15.83
NET ASSET VALUE, offering price and redemption price
per share ($29,380 (divided by) 1,856 shares)
</TABLE>
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>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 9,538
Dividends
Interest 3,190
12,728
Less foreign taxes withheld (1,069)
TOTAL INCOME 11,659
EXPENSES
Management fee $ 4,059
Basic fee
Performance adjustment 39
Transfer agent fees 1,230
Distribution fees 2,694
Accounting fees and expenses 298
Non-interested trustees' compensation 4
Custodian fees and expenses 302
Registration fees 62
Audit 34
Legal 12
Miscellaneous 33
Total expenses before reductions 8,767
Expense reductions (55) 8,712
NET INVESTMENT INCOME 2,947
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 37,714
Foreign currency transactions (19)
Futures contracts (1,119) 36,576
Change in net unrealized appreciation (depreciation) on:
Investment securities 60,602
Assets and liabilities in foreign currencies (140)
Futures contracts 446 60,908
NET GAIN (LOSS) 97,484
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 100,431
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,947 $ 11,992
Net investment income
Net realized gain (loss) 36,576 48,710
Change in net unrealized appreciation (depreciation) 60,908 25,789
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 100,431 86,491
FROM OPERATIONS
Distributions to shareholders (10,797) (4,950)
From net investment income
From net realized gain (42,335) (545)
TOTAL DISTRIBUTIONS (53,132) (5,495)
Share transactions - net increase (decrease) 62,211 203,150
TOTAL INCREASE (DECREASE) IN NET ASSETS 109,510 284,146
NET ASSETS
Beginning of period 1,030,556 746,410
End of period (including undistributed net investment $ 1,140,066 $ 1,030,556
income of $2,549 and $11,770, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1997
(UNAUDITED) 1996 F
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.29 $ 14.98
Income from Investment Operations
Net investment income .04 E .04 E
Net realized and unrealized gain (loss) 1.40 .27
Total from investment operations 1.44 .31
Less Distributions
From net investment income (.25) -
From net realized gain (.63) -
Total distributions (.88) -
Net asset value, end of period $ 15.85 $ 15.29
TOTAL RETURN B, C 9.75% 2.07%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 2,170 $ 637
Ratio of expenses to average net assets 1.89% A, 1.16% A,
G G
Ratio of expenses to average net assets after expense reductions 1.88% A, 1.16% A
H
Ratio of net investment income to average net assets .57% A 1.74% A
Portfolio turnover 81% A 82%
Average commission rate D $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO OCTOBER 31, 1996.
G 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 5 OF NOTES TO FINANCIAL STATEMENTS).
H 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1997
(UNAUDITED) 1996 1995 1994 F 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 15.30 $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78
beginning of period
Income from
Investment
Operations
Net investment .04 D .19 D, .07 .01 .03 .05
income I
Net realized and 1.41 1.29 (.11) 1.14 3.93 (.62)
unrealized gain
(loss)
Total from investment 1.45 1.48 (.04) 1.15 3.96 (.57)
operations
Less Distributions
From net investment (.16) (.09) - - (.07) (.14)
income
From net realized gain (.63) (.01) (.02) (.02) (.03) H -
In excess of net - - (.08) - - -
realized gain
Total distributions (.79) (.10) (.10) (.02) (.10) (.14)
Net asset value, $ 15.96 $ 15.30 $ 13.92 $ 14.06 $ 12.93 $ 9.07
end of period
TOTAL RETURN B, C 9.78% 10.69% (.25) 8.91% 44.13% (5.88)
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 1,082,381 $ 995,004 $ 741,928 $ 653,774 $ 221,370 $ 18,652
period (000 omitted)
Ratio of expenses to 1.65% A 1.61% 1.90% 2.12% 2.38% 2.64%
average net assets
Ratio of expenses to 1.64% A 1.60% 1.90% 2.12% 2.38% 2.64%
average net assets , E E
after expense
reductions
Ratio of net investment .56% A 1.30% 1.01% .05% (.18) .48%
income to average %
net assets
Portfolio turnover 81% A 82% 47% 34% 42% 168%
Average commission $ .0206 $ .0133
rate G
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE
TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. D NET INVESTMENT INCOME
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E 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 5 OF NOTES TO FINANCIAL STATEMENTS).
F 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. 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 INCLUDES AMOUNTS
DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY
INCOME. I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
FROM VOLVO AB CLASS B WHICH
AMOUNTED TO $.04 PER SHARE.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS YEARS ENDED OCTOBER
ENDED 31,
APRIL 30, 1997
(UNAUDITED) 1996 1995 F
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.06 $ 13.92 $ 13.89
Income from Investment Operations
Net investment income .00 E .08 E, .01
D
Net realized and unrealized gain (loss) 1.39 1.26 .02
Total from investment operations 1.39 1.34 .03
Less Distributions
From net investment income (.12) (.19) -
From net realized gain (.63) (.01) -
Total distributions (.75) (.20) -
Net asset value, end of period $ 15.70 $ 15.06 $ 13.92
TOTAL RETURN B, C 9.51% 9.73% .22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 26,135 $ 18,668 $ 2,999
Ratio of expenses to average net assets 2.33% A 2.37% 1.97% A,
G
Ratio of expenses to average net assets after 2.32% A, 2.37% 1.97% A
expense reductions H
Ratio of net investment income to average net assets (.06)% A .53% .94% A
Portfolio turnover 81% A 82% 47%
Average commission rate I $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB
CLASS B WHICH AMOUNTED TO $.04 PER SHARE.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
OCTOBER 31, 1995.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
H 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
I 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 - INSTITUTIONAL CLASS
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1997
(UNAUDITED) 1996 1995 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.20 $ 13.97 $ 13.89
Income from Investment Operations
Net investment income .08 D .21 D, I .05
Net realized and unrealized gain (loss) 1.41 1.24 .03
Total from investment operations 1.49 1.45 .08
Less Distributions
From net investment income (.23) (.21) -
From net realized gain (.63) (.01) -
Total distributions (.86) (.22) -
Net asset value, end of period $ 15.83 $ 15.20 $ 13.97
TOTAL RETURN B, C 10.15% 10.51% .58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 29,380 $ 16,247 $ 1,482
Ratio of expenses to average net assets 1.18% A 1.44% .97% A,
F
Ratio of expenses to average net assets after 1.17% A, 1.43% G .97% A
expense reductions G
Ratio of net investment income to average net 1.13% A 1.46% 1.94% A
assets
Portfolio turnover 81% A 82% 47%
Average commission rate H $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
G 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
H 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.
I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB
CLASS B WHICH AMOUNTED TO $.04 PER SHARE.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997 (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 T, 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, the
common expenses of the fund, and certain fund-level expense reductions 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, expenses, and expense
reductions.
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 with remaining maturities of sixty days or less for
which quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
and the U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are included
with the net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The fund may be subject to foreign taxes on income and
gains on investments which are accrued based upon the fund's understanding
of the tax rules and regulations that exist in the markets in which it
invests. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, 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. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying Class A and
shares of Class A for distribution under federal and state securities law.
These expenses are borne by Class A and amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
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 paydown
gains/losses on certain securities, futures and options transactions,
foreign currency transactions, passive foreign investment companies (PFIC),
market discount 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund)
managed by FMR Texas, an affiliate of FMR. The Cash Fund is an open-end
money market fund available only to investment companies and other accounts
managed by FMR and its affiliates. The Cash Fund seeks preservation of
capital, liquidity, and current income by investing in U.S. Treasury
securities and repurchase agreements for these securities. Dividends from
the Cash Fund are declared daily and paid monthly from net interest income.
Income distributions received by the fund are recorded as interest income
in the accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock and bond markets and to fluctuations in interest
rates and currency values. Buying futures tends to increase the fund's
exposure to the underlying instrument, while selling futures tends to
decrease the fund's exposure to the underlying instrument or hedge other
fund investments. Futures contracts involve, to varying degrees, risk of
loss in excess of the futures variation margin reflected in the Statement
of Assets and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of investments
under the caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms. Futures contracts are valued at the settlement
price established each day by the board of trade or exchange on which they
are traded.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $420,196,000 and $389,946,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $17,282,000 and $13,488,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .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 ".20%
of the fund's average net assets over the performance period) based on the
investment performance of the lowest
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
performing class as compared to the appropriate index over a specified
period of time. For the period, the management fee was equivalent to an
annualized rate of .77% 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., and 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.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
each class of shares (collectively referred to as "the Plans"). Under
certain of the Plans, the class pays Fidelity Distributors Corporation
(FDC), an affiliate of FMR, a distribution and service fee. This fee is
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion of
which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares, and
providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 2,000 $ 2,000
CLASS T 2,581,000 2,581,000
CLASS B 111,000 28,000
$ 2,694,000 $ 2,611,000
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The Plans
also authorize payments to third parties that assist in the sale of each
class' shares or render shareholder support services.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% for
selling Class A shares and 3.50% for selling Class T shares of the fund,
respectively, and the proceeds of a contingent deferred sales charge levied
on Class B share redemptions occurring within six years of purchase (five
years prior to January 2, 1997). The Class B charge is based on declining
rates which range from 5% to 1%(4% to 1% prior to January 2, 1997) 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 the following sales charge amounts related to
each class, a portion of which is paid to securities dealers, banks, and
other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 30,000 $ 24,000
CLASS T 383,000 283,000
CLASS B 36,000 0 *
$ 449,000 $ 307,000
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM ITS OWN
RESOURCES TO DEALERS THROUGH WHICH
THE SALES ARE MADE.
TRANSFER AGENT FEES. Each class of the fund has entered into a separate
transfer, dividend disbursing, and shareholder servicing agent
(collectively referred to as the Transfer Agents) contract with respect to
its 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. For the period, the
following amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC* $ 3,000 .38
CLASS T** FIIOC* 1,173,000 .23
CLASS B FIIOC* 34,000 .31
INSTITUTIONAL CLASS FIIOC* 20,000 .17
$ 1,230,000
* FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.(FIIOC) AN
AFFILIATE OF FMR.
** PRIOR TO JANUARY 1, 1997 STATE STREET BANK AND TRUST COMPANY WAS THE
TRANSFER AGENT FOR THE FUND'S CLASS T SHARES. STATE STREET, HOWEVER, HAD
DELEGATED CERTAIN
TRANSFER, DIVIDEND DISBURSING, AND SHAREHOLDER SERVICES TO FIIOC FOR WHICH
FIIOC RECEIVED ITS ALLOCABLE SHARE OF ALL SUCH FEES.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. Fidelity Service Company, Inc., 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 $121,000 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates or range of annual rates of average net assets for
each class:
FMR REIMBURSEME
EXPENSE NT
LIMITATIONS
CLASS A 2.00% $ 10,000
In addition, FMR agreed to reimburse certain transfer agent, registration
and other class specific expenses for Class A. For the period, the
reimbursement reduced these expenses by $1,000.
FMR has also 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 $40,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses. During
the period, the fund's custodian fees were reduced by $2,000 under the
custodian arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER
AGENT
INTEREST
CREDITS
CLASS T $ 1,000
INSTITUTIONAL CLASS 1,000
$ 2,000
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1997 1996 A
CLASS A
From net investment income $ 15 $ -
From net realized gain 38 -
Total $ 53 $ -
CLASS T
From net investment income $ 10,326 $ 4,861
From net realized gain 40,659 540
Total $ 50,985 $ 5,401
CLASS B
From net investment income $ 154 $ 55
From net realized gain 812 3
Total $ 966 $ 58
INSTITUTIONAL CLASS
From net investment income $ 302 $ 34
From net realized gain 826 2
Total $ 1,128 $ 36
$ 53,132 $ 5,495
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31, ENDED APRIL 30, OCTOBER 31,
1997 1996 A 1997 1996 A
CLASS A 98 48 $ 1,515 $ 729
Shares sold
Reinvestment of distributions 3 - 52 -
Shares redeemed (6) (6) (96) (90)
Net increase (decrease) 95 42 $ 1,471 $ 639
CLASS T 15,435 30,743 $ 240,564 $ 457,298
Shares sold
Reinvestment of distributions 3,177 351 47,915 4,964
Shares redeemed (15,857) (19,351) (246,308) (289,234)
Net increase (decrease) 2,755 11,743 $ 42,171 $ 173,028
CLASS B 488 1,135 $ 7,487 $ 16,670
Shares sold
Reinvestment of distributions 63 4 930 54
Shares redeemed (126) (115) (1,930) (1,701)
Net increase (decrease) 425 1,024 $ 6,487 $ 15,023
INSTITUTIONAL CLASS 956 1,071 $ 14,727 $ 16,083
Shares sold
Reinvestment of distributions 68 2 1,019 32
Shares redeemed (237) (110) (3,664) (1,655)
Net increase (decrease) 787 963 $ 12,082 $ 14,460
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 13,000
CLASS T 28,000
CLASS B 10,000
INSTITUTIONAL CLASS 11,000
$ 62,000
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 *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
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, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
* INDEPENDENT TRUSTEES
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities 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 Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
OVERSEAS
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
APRIL 30, 1997
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 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
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Through the first four months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will greatly
reduce your vulnerability to any single decline. We know from experience,
for example, that stock prices have gone up over longer periods of time,
have significantly outperformed other types of investments and have stayed
ahead of inflation.
Second, you can further manage your investing risk through diversification.
A stock mutual fund, for instance, is already diversified, because it
invests in many different companies. You can increase your diversification
further by investing in a number of different stock funds, or in such other
investment categories as bonds. If you have a short investment time
horizon, you might want to consider moving some of your investment into a
money market fund, which seeks income and a stable share price by investing
in high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will achieve
its goal of maintaining a stable net asset value of $1.00 per share, and
that these types of funds are neither insured nor guaranteed by any agency
of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
FIDELITY 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. Total return reflects
the change in the value of an investment, assuming reinvestment of the
class' dividend income and capital gains (the profits earned upon the sale
of 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 T, the original class of
the fund, and reflect Class T's prior 0.65% 12b-1 fee. If Fidelity had not
reimbursed certain class expenses, the past five years and life of fund
total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Advisor Overseas - Institutional Class 10.15% 10.15% 67.78% 77.51%
MSCI EAFE Index 1.57% -0.89% 65.37% 54.11%
International Funds Average 6.17% 5.43% 66.38% n/a
</TABLE>
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 (MSCI EAFE Index) - a market capitalization
weighted, unmanaged index of over 1,000 foreign stocks. 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 mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past six months average represents a peer
group of 396 mutual funds. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Advisor Overseas - Institutional Class 10.15% 10.90% 8.51%
MSCI EAFE Index -0.89% 10.58% 6.35%
International Funds Average 5.43% 10.58% n/a
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative return
and show you what would have happened if Institutional Class shares had
performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Overseas -CL I MS EAFE Index (Net)
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 16115.31 15548.91
1996/05/31 16094.11 15262.79
1996/06/30 16200.13 15348.69
1996/07/31 15723.03 14900.09
1996/08/31 15829.05 14932.73
1996/09/30 16284.95 15329.43
1996/10/31 16115.31 15172.57
1996/11/30 16963.49 15776.26
1996/12/31 17055.42 15573.32
1997/01/31 17066.64 15028.29
1997/02/28 17447.89 15274.09
1997/03/31 17604.88 15329.40
1997/04/30 17750.65 15410.74
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Overseas Fund - Institutional Class on April
23, 1990, when the fund started. As the chart shows, by April 30, 1997, the
value of the investment would have grown to $17,751 - a 77.51% increase on
the initial investment. For comparison, look at how the MSCI EAFE Index did
over the same period. With dividends reinvested, the same $10,000
investment would have grown to $15,411 - a 54.11% 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
Q. HOW DID THE FUND PERFORM, RICK?
A. For the six months that ended April 30, 1997, the fund's Institutional
Class shares returned 10.15%. For the same period, the Morgan Stanley
Capital International Europe, Australasia, Far East Index (EAFE) returned
1.57%. The international funds average, according to Lipper Analytical
Services, had a six-month return of 6.17%. For the 12 months that ended
April 30, 1997, the fund's Institutional Class shares returned 10.15%,
while the EAFE index and Lipper peer group returned -0.89% and 5.43%,
respectively.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG SHOWING?
A. Individual stock selection had the biggest influence on the fund's
return, as several of the fund's larger positions performed well. Market
selection also played a key role during this time, specifically the fund's
underweighting in Japan relative to the EAFE index. While the EAFE index
had an approximate Japanese weighting of 30%, I kept the fund at around 22%
on average. As Japan's well-documented economic woes continued to hamper
the overall performance of Japanese securities, my strategy of
underweighting Japanese securities worked in the fund's favor. I would add,
however, that while market selection is important, I place more emphasis on
analyzing the specific pluses and minuses of a stock than I do on the
country where a stock is issued.
Q. HOW DID THE FUND'S EUROPEAN HOLDINGS PERFORM?
A. The overall decline in European interest rates had favorable
implications for the European stock markets. This rate environment, which
may have been related to continuing optimism on proposed economic unity
throughout Europe, led to strong performances in countries such as Spain,
Italy and Sweden. In Europe, I basically continued my strategy of looking
for companies based on three themes: those that would benefit from a rising
dollar, those that would gain from the overall improvement of world
economies and those companies that were engaging in restructurings designed
to improve the return on capital employed in their businesses.
Q. DID YOUR STRATEGIES LEAD YOU TO ANY OTHER REGIONS OF THE WORLD?
A. The fund's Latin American positions - with the exception of Telebras, a
privatized telecommunications company based in Brazil - have been
relatively uneventful. I'll invest in emerging market stocks, but only when
valuations are attractive. If an emerging market stock is undervalued and
has a potentially attractive risk/reward tradeoff, I'll consider adding it
to the portfolio. The other area that came into play was Canada. I've
previously mentioned my strategy of looking for stocks that can benefit
from improving economies, and Canada's many natural resource-related stocks
fit that bill. Stocks such as Inco, a nickel producer, aluminum-producer
Alcan, and Noranda, a paper and forest products company, reflected this
strategy.
Q. FOLLOWING THE LEAD OF AMERICAN CORPORATIONS, INTERNATIONAL COMPANIES
HAVE BEEN IMPLEMENTING VARIOUS COST-CUTTING AND RESTRUCTURING STRATEGIES.
CAN YOU EXPLAIN WHY THIS IS A POSITIVE DEVELOPMENT? HOW HAS THIS TREND
AFFECTED THE FUND?
A. Worldwide, company managements have gotten smarter about how they run
their businesses. In order to earn returns above their cost of capital,
companies have had to reduce expenses, either by cutting personnel,
restructuring their balance sheets or upgrading their technology. As they
strive to become more shareholder-friendly, international companies also
are coming up with new ways to utilize their existing assets. In terms of
the fund, several individual holdings are good illustrations of this trend.
For example, Volvo, one of the fund's more significant stakes and a strong
performer during the period, divested many of its non-core businesses and
has announced plans to implement a share redemption program in which the
company will buy back one of every 20 outstanding shares. As companies
strive to push their share prices up, they can do one of two things. They
can wait for investors to bid the price up or they can take a proactive
approach and try to increase the value themselves. In the case of Volvo,
management has taken a proactive stance and set forth a list of goals for
doing this; for the most part, the company has seen its plan through. This
emphasis on managing core businesses to be more efficient can enhance a
company's value and put smiles on the faces of money managers throughout
the world.
Q. WHICH INDIVIDUAL STOCK POSITIONS BENEFITED THE FUND? WERE THERE ANY
DISAPPOINTMENTS?
A. As I mentioned earlier, individual stock selection was a real key to the
fund's performance. Aside from the strong performances of Volvo and
Telebras, the fund's positions in Total, a French-based oil company, and
Alcatel, which specializes in telecommunications and electrical equipment,
turned in good results. Disappointments included the poor performance of
several Japanese brokerage companies, including Nomura Securities and Nikko
Securities.
Q. WHAT'S YOUR OUTLOOK?
A. More and more, individual stock selection is outdistancing country
selection in terms of performance influence. In my opinion, this trend will
most likely continue and will place even more emphasis on thorough research
and analysis of individual stocks. With this in mind, I'll continue to use
my three-pronged approach of looking for stocks that can benefit from a
rising dollar, stronger economies and increased corporate efficiencies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S 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, 1997,
more than $1.1 billion
MANAGER: Richard Mace,
since 1996; joined Fidelity
in 1987
(checkmark)
RICK MACE ON FIDELITY'S
INTERNATIONAL STOCK PICKING
PROCESS:
"Over the past few years,
Fidelity has been increasing
its presence on the
international investing stage.
The process of searching the
globe for attractive
investment opportunities isn't
all that different from choosing
domestic stocks. Like U.S.
stock fund managers, we
target stocks, conduct our
analysis, pick up the phone
and visit companies on a
regular basis. The best way to
find opportunities is to take a
hands-on approach; if you
turn over enough rocks and
kick enough tires, you'll find
some winners. Fidelity's
international stock picking
machine involves hundreds
of analysts and fund
managers, located in several
countries around the world.
We consider our international
team to be among the best
and brightest in the industry,
and we function as a
complete team. The fact that
we have aggressively grown
our international staff, I think, is
a reflection of Fidelity's
commitment to being
successful internationally. And
we've started to see the
benefits. Fidelity recently won
several distinguished awards
for its international research
and fund management.
Perhaps most significantly,
those awards singled out
Fidelity's impressive devotion
to teamwork. One award, in
fact, identified "Team Fidelity"
as its honoree."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Alcatel Alsthom Compagnie Generale 2.2 1.6
d'Electricite SA (France, Electrical
Equipment)
Total SA Class B (France, Oil & Gas) 1.9 2.2
Fuji Photo Film Co. Ltd. 1.7 1.4
(Japan, Photographic Equipment)
Novartis AG (Reg.) (Switzerland, 1.7 0.0
Drugs & Pharmaceuticals)
Takeda Chemical Industries Ltd. (Japan, 1.7 1.3
Drugs & Pharmaceuticals)
TOP FIVE MARKET SECTORS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Finance 13.9 14.2
Durables 10.5 14.1
Basic Industries 10.4 9.9
Technology 8.4 5.4
Health 7.8 4.4
TOP FIVE COUNTRIES AS OF APRIL 30, 1997
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
Japan 24.2 23.7
United Kingdom 13.9 11.9
France 10.1 9.3
Netherlands 7.7 5.4
Sweden 5.3 6.6
TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY, INCLUDING
WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT RISKS.
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1997 AS OF OCTOBER 31, 1996
Row: 1, Col: 1, Value: 9.9
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 44.9
Row: 1, Col: 4, Value: 44.0
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 48.1
Row: 1, Col: 4, Value: 40.0
Stocks, closed-end
investment companies
and equity futures 89.9%
Bonds 0.2%
Short-term
investments 9.9%
Stocks, closed-end
investment companies
and equity futures 88.1%
Bonds 0.3%
Short-term
investments 11.6%
INVESTMENTS APRIL 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.7%
SHARES VALUE (NOTE 1)
(000S)
ARGENTINA - 0.2%
Perez Companc Class B 273,523 $ 2,219
AUSTRALIA - 1.7%
Aberfoyle Ltd. 14,300 41
Australia & New Zealand Banking Group Ltd. 85,100 544
Brambles Industries Ltd. 126,150 2,286
CSR Ltd. 1,341,500 4,967
Coles Myer Ltd. 455,700 2,217
National Australia Bank Ltd. 81,300 1,114
Pasminco Ltd. 297,000 566
QNI Ltd. 540,953 1,006
Tabcorp Holdings Ltd. 42,700 213
Western Mining Holdings Ltd. 623,489 3,701
Westpac Banking Corp. 92,900 501
Woolworths Ltd. 768,400 2,269
19,425
AUSTRIA - 0.0%
Voest-Alpine Stahl AG 13,600 537
BELGIUM - 0.2%
BBL (Banque Bruxelles Lambert) 400 100
Credit Communal Holding/Dexia (c) 15,300 1,521
Delhaize Freres & Cie Le Lion SA 1,400 70
1,691
BRAZIL - 0.7%
Multicanal Participacoes SA sponsored ADR 58,800 853
Telebras sponsored ADR 59,400 6,816
7,669
CANADA - 2.6%
Alcan Aluminium Ltd. 171,800 5,827
Alliance Forest Products (c) 54,300 1,243
BCE, Inc. 73,500 3,440
Bro-X Minerals Ltd. 27,050 15
Canadian Natural Resources Ltd. (a) 111,600 2,659
Cominco Ltd. (a) 152,800 3,936
Domtar, Inc. 53,300 454
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CANADA - CONTINUED
Greenstone Resources Ltd. (a) 89,500 $ 845
Inco Ltd. 197,500 6,325
Noranda, Inc. 190,700 4,026
Renaissance Energy Ltd. (a) 42,400 1,174
29,944
DENMARK - 0.7%
Den Danske Bank Group AS 35,000 3,028
International Service Systems AS, Series B 82,500 2,441
Novo-Nordisk AS Class B 15,000 1,484
Unidanmark AS Class A 31,500 1,558
8,511
FINLAND - 1.9%
Cultor OY, Series 1 36,400 1,974
Huhtamaki Ord. 120,200 5,214
Metsa-Serla Ltd. Class B 357,000 2,678
Nokia Corp. AB, Series A 82,500 5,147
Pohjola Class B 77,830 2,216
Rauma OY 1,464 30
UPM-Kymmene Corp. 52,600 1,204
Valmet OY 217,040 3,670
22,133
FRANCE - 10.1%
Alcatel Alsthom Compagnie Generale d'Electricite SA 229,500 25,530
Axa SA 71,490 4,400
BQE National Paris Ord. 37,300 1,592
Canal Plus SA 6,611 1,194
Cap Gemini Sogeti SA 18,200 1,103
Compagnie de Saint Gobain 9,900 1,327
Credit Commercial de France Ord. 35,700 1,585
Credit Local de France SA 25,200 2,332
Eramet SA 82,875 4,190
Generale des Eaux, Cie 12,000 1,672
Group Axime (a) 1,300 156
Groupe Danone 25,600 3,730
Lafarge Coppee SA 39,050 2,562
Lagardere S.C.A. (Reg.) 49,600 1,535
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FRANCE - CONTINUED
Michelin SA (Compagnie Generale des Etablissements)
Class B 121,900 $ 6,813
Nationale Elf Aquitaine 82,400 7,994
Paribas SA (Cie Financiere) Class A 28,800 1,817
Pechiney SA Class A 257,824 9,634
Rhone Poulenc SA Class A 216,200 7,274
Societe Generale Class A 41,500 4,652
Total SA Class B 261,090 21,662
Unibail 5,100 494
Usinor Sacilor 122,000 1,844
Valeo SA 10,000 617
115,709
GERMANY - 4.2%
Allianz Versich Holdings Ord. (Reg.) (a) 8,000 1,552
Altana AG 400 310
BASF AG 85,900 3,364
Bayer AG 168,500 6,545
Buderus AG 5,200 2,439
Continental Gummi-Werke AG 84,300 1,853
Daimler-Benz AG Ord. 48,000 3,555
Daimler-Benz AG (rights) (a) 48,000 4
Degussa AG 48,200 2,127
Dresdner Bank AG Ord. 19,000 605
Hoechst AG Ord. 53,500 2,102
Karstadt AG 1,100 329
Lufthansa 73,000 1,016
Mannesmann AG Ord. 7,100 2,792
Metallgesellschaft AG Ord. (a) 164,400 3,397
Thyssen AG Ord. 2,600 565
Veba AG Ord. 118,700 6,137
Viag AG 500 222
Volkswagen AG 15,327 9,705
48,619
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HONG KONG - 1.5%
Great Eagle Holdings Ltd. 334,000 $ 998
HSBC Holdings PLC 468,800 11,828
Hong Kong & China Gas Co. Ltd. 1,067,040 1,694
Hutchison Whampoa Ltd. Ord. 152,000 1,128
Peregrine Investments Holdings Ltd. 725,000 1,114
Wharf Holdings Ltd. 131,000 495
17,257
INDONESIA - 0.3%
Matahari Putra Prima PT (For. Reg.) 1,417,500 1,983
Multipolar PT (For. Reg.) 1,534,000 884
Putra Surya Multidana PT (For. Reg.) 561,000 635
3,502
IRELAND - 0.9%
Bank of Ireland, Inc. 603,700 6,283
CRH PLC 63,600 619
Independent Newspapers PLC 560,666 2,867
9,769
ITALY - 1.4%
Credito Italiano Ord. 2,546,100 3,573
Eni Spa 1,344,700 6,850
Telecom Italia Spa 480,700 1,273
Telecom Italia Mobile Spa 1,228,100 3,855
15,551
JAPAN - 23.4%
Acom Co. Ltd. 55,000 2,243
Amway Japan Ltd. 107,600 3,278
Asahi Chemical Industry Co. Ltd. 172,000 1,002
Asahi Breweries Ltd. 210,000 2,314
Bank of Tokyo-Mitsubishi Ltd. 207,000 3,275
Canon, Inc. 652,000 15,447
Citizen Watch Co. Ltd. Ord. 299,000 2,149
DDI Corp. Ord. 577 3,829
Dai-Tokyo Fire & Marine Insurance Ord. 224,000 1,049
Daiichi Pharmaceutical Co. Ltd. 62,000 996
Daito Trust Construction Co. 374,800 3,776
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
JAPAN - CONTINUED
Daiwa House Industry Co. Ltd. 186,000 $ 2,079
Daiwa Securities Co. Ltd. 486,000 3,232
Denso Corp. 135,000 3,071
Denny's Japan Co. Ltd. 50,600 1,318
Fuji Bank Ltd. 315,000 3,546
Fuji Photo Film Co. Ltd. 526,000 20,081
Fujitsu Ltd. 688,000 7,148
Hitachi Ltd. 1,493,000 13,512
Hitachi Maxell Ltd. 242,000 5,086
Honda Motor Co. Ltd. 283,000 8,777
Hoya Corp. 22,000 1,008
Ibiden Co. Ltd. 192,000 2,524
Ito-Yokado Co. Ltd. 108,000 5,177
Jusco Co. Ltd. 69,000 2,118
Kao Corp. 82,000 955
Kobe Steel Ltd. Ord. (a) 537,000 976
Komatsu Ltd. Ord. 786,000 5,741
Konica Corp. 39,000 227
Kyocera Corp. 16,000 957
Matsushita Communication Industrial Co. Ltd. 20,000 516
Matsushita Electric Industrial Co. Ltd. 512,000 8,181
Matsushita Electric Works Co. Ltd. 185,000 1,878
Minebea Co. Ltd. 28,000 234
Minolta Camera Co. Ltd. 401,000 2,500
Mitsubishi Estate Co. Ltd. 178,000 2,242
Mitsubishi Heavy Industries Ltd. 744,000 4,907
Murata Manufacturing Co. Ltd. 15,000 553
NEC Corp. 131,000 1,598
NKK Corp. 492,000 1,061
Nichiei Co. Ltd. 18,900 1,517
Nikko Securities Co. Ltd. 359,000 2,001
Nintendo Co. Ltd. Ord. 134,300 9,810
Nippon Telegraph & Telephone Corp. Ord. 306 2,156
Nitto Denko Corp. 16,000 232
Nomura Securities Co. Ltd. 507,000 5,667
Omron Corp. 105,000 1,984
Onward Kashiyama & Co. Ltd. 205,000 2,630
Orix Corp. 163,000 8,224
Ricoh Co. Ltd. Ord. 398,000 4,730
Rohm Co. Ltd. 54,000 4,182
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
JAPAN - CONTINUED
Sakura Bank Ltd. 1,400,000 $ 7,394
Sankyo Co. Ltd. 147,000 3,934
Shin-Etsu Chemical Co. Ltd. 52,000 1,043
Shinko Electric Industries Co. Ltd. 4,300 147
Sony Corp. 154,000 11,200
Shohkoh Fund & Co. Ltd. 2,200 512
TDK Corp. 63,000 4,537
Takeda Chemical Industries Ltd. 825,000 19,028
Terumo Corp. 78,000 1,185
THK Co. Ltd. 62,000 717
Toyota Motor Corp. 590,000 17,090
Tokyo Electron Ltd. 67,100 2,588
Uni Charm Corp. Ord. 51,000 1,562
Uny Co. Ltd. 174,000 3,054
Xebio Co. Ltd. 7,200 165
Yamanouchi Pharmaceutical Co. Ltd. 51,000 1,088
268,938
KOREA (SOUTH) - 0.3%
Korea Electric Power Corp. 123,550 3,684
MALAYSIA - 0.3%
Arab Malaysian Corp. BHD 424,000 1,756
Magnum Corp. BHD 247,000 392
Oriental Holdings BHD 115,000 870
3,018
MEXICO - 0.3%
Cifra SA Series C 1,127,200 1,730
Cifra SA de CV, Series A 137,865 208
Gruma SA Class B sponsored ADR (a)(c) 56,800 1,079
Tubos De Acero De Mexico ADR (a) 49,500 811
3,828
NETHERLANDS - 7.7%
AKZO Nobel NV 96,400 12,425
Ahold NV 10,000 683
Chicago Bridge & Iron Co. NV 85,600 1,455
DSM NV 45,900 4,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NETHERLANDS - CONTINUED
ING Groep NV 253,970 $ 9,976
KBB NV Ord. 23,500 1,551
KLM Royal Dutch Air Lines NV 25,000 739
Koninklijke Hoogovens NV 75,300 3,441
Koninklijke KNP BT NV 184,000 3,628
Koninklijke Pakhoed NV 3,200 104
New Holland NV (a) 155,000 3,429
Philips Electronics NV (Bearer) 321,300 16,780
Royal Dutch Petroleum Co. Ord. 71,100 12,710
Unilever NV Ord. 64,600 12,569
Vendex International NV (c) 92,100 4,375
88,437
NETHERLANDS ANTILLES - 0.2%
Schlumberger Ltd. 20,800 2,304
NEW ZEALAND - 0.0%
Air New Zealand Ltd. Class B 85,900 248
NORWAY - 0.7%
Den Norske Bank AS Class A Free shares 301,900 1,094
Elkem ASA 225,200 4,317
Orkla AS Class B (non-vtg.) 9,900 766
NCL Holdings AS 67,300 170
Saga Petroleum AS Class B 79,000 1,270
7,617
PERU - 0.1%
Compania de Minas Buenaventura SA Class B
sponsored ADR 49,400 1,074
SINGAPORE - 0.1%
Kim Engineering Holdings Ltd. 1,700,000 1,398
SOUTH AFRICA - 0.3%
Gencor Ltd. (Reg.) 497,900 2,094
JCI Ltd. 125,200 1,210
3,304
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SPAIN - 2.3%
Acerinox SA (Reg.) 18,409 $ 2,694
Asturiana del Zinc SA (c) 229,100 3,531
Banco Bilbao Vizcaya SA Ord. (Reg.) 46,600 3,141
Banco de Santander SA Ord. (Reg.) 26,700 2,012
Banco Intercontinental Espanol 6,600 986
Tabacalera SA, Series A 123,900 6,230
Telefonica de Espana SA Ord. (a) 318,800 8,179
26,773
SWEDEN - 5.3%
ABB AB, Series B 94,000 1,138
Astra AB Class A Free shares 251,700 10,296
Assi Doman AB Free shares 40,200 1,007
Electrolux AB 60,500 3,470
Ericsson (L.M.) Telephone Co.:
Class B 97,800 3,091
Class B ADR 30,500 1,026
Esselte AB Class B Free shares 57,700 1,316
Investor AB Class B Free shares 50,000 2,186
Nordbanken AB 98,600 3,028
SKF AB Ord. 22,200 481
Scania AB Class B 132,100 3,409
Skandia Foersaekrings AB 157,400 4,553
Svenska Cellulosa AB (SCA) Class B Ord. 64,500 1,381
Svenska Handelsbanken 100,100 2,755
Swedish Match Co. 1,326,600 4,328
Volvo AB Class B 686,500 17,279
60,744
SWITZERLAND - 4.6%
ABB AG (Bearer) 400 484
Credit Suisse Group (Reg.) 121,725 13,705
Julius Baer Holding AG 3,429 4,292
Nestle SA (Reg.) 5,693 6,913
Novartis AG (Reg.) 15,000 19,764
Roche Holding AG participation certificates 762 6,436
Sulzer AG (Reg.) 1,500 1,033
Surveillance, Societe Generale (Bearer) 275 569
53,196
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED KINGDOM - 13.9%
Asda Group PLC 1,723,600 $ 3,218
BAT Industries PLC Ord. 967,700 8,154
BOC Group PLC 31,500 483
Barclays PLC Ord. 144,000 2,682
Barratt Developments PLC 529,800 2,228
Bass PLC Ord. 153,000 1,977
Blue Circle Industries PLC 273,000 1,862
Boots Co. PLC (The) Class L 204,100 2,293
British Aerospace PLC 164,200 3,495
British Petroleum PLC:
Ord. 611,435 7,028
ADR 15,500 2,133
British Land Co. PLC (The) Ord. 32,300 321
British Steel PLC Ord. 780,000 1,760
British Telecommunications PLC Ord. 545,000 3,999
Cable & Wireless PLC Ord. 218,500 1,685
Caradon PLC 1,702,400 6,827
Cookson Group PLC 2,498,100 8,801
Dixons Group PLC 208,858 1,714
English China Clay PLC 99,700 333
Glaxo Holdings PLC 338,900 6,674
Granada Group PLC 523,400 7,571
Grand Metropolitan PLC 953,758 7,974
Guinness PLC Ord. 137,900 1,142
HSBC Holdings PLC Ord. 20,300 534
Hays PLC 60,700 537
ICI (Imperial Chemical Industries) PLC Class L 84,800 965
Inchcape PLC Ord. 239,500 1,065
Ladbroke Group PLC Ord. 724,800 2,706
Lloyds TSB Group PLC 1,188,774 10,866
LucasVarity PLC 1,385,800 4,207
Mercury Asset Management Group PLC 49,000 1,063
National Grid Co. PLC 991,700 3,574
Perpetual PLC 12,500 534
Prudential Corp. PLC 272,839 2,653
RTZ Corp. PLC Ord. 33,600 535
Redland PLC Ord. 290,800 1,652
Rentokil Group PLC 1,593,800 10,456
Rolls Royce PLC Ord. 488,378 1,927
Rugby Group PLC 654,700 1,190
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UNITED KINGDOM - CONTINUED
Shell Transport & Trading Co. PLC (Reg.) 485,500 $ 8,599
SmithKline Beecham PLC Ord. 604,430 9,695
Thames Water PLC Ord. 92,700 1,016
Unigate PLC 210,900 1,592
Unilever PLC Ord. 170,700 4,492
Vodafone Group PLC 1,177,893 5,278
WPP Group PLC 160,100 652
160,142
UNITED STATES OF AMERICA - 1.8%
Alumax, Inc. (a) 154,400 5,636
Aluminum Co. of America 88,200 6,162
D.R. Horton, Inc. 103,900 1,013
Hertz Corp. Class A 4,500 131
Jefferson Smurfit Corp. (a) 37,000 481
Kaiser Aluminum Corp. (a) 83,400 897
MCI Communications Corp. 134,700 5,135
Newmont Mining Corp. 29,200 1,011
Silgan Holdings, Inc. 1,600 42
20,508
TOTAL COMMON STOCKS
(Cost $886,410) 1,007,749
PREFERRED STOCKS - 1.1%
CONVERTIBLE PREFERRED STOCKS - 0.1%
JAPAN - 0.1%
AJL participating trust (a) 45,000 726
NONCONVERTIBLE PREFERRED STOCKS - 1.0%
ITALY - 1.0%
Banco Ambro Veneto 100 -
Stet (Societa Finanziaria Telefonica) Spa 2,167,900 8,032
Telecom Italia Mobile Spa de Risp 2,121,500 3,920
TOTAL NONCONVERTIBLE PREFERRED STOCKS 11,952
TOTAL PREFERRED STOCKS
(Cost $7,902) 12,678
CLOSED-END INVESTMENT COMPANIES - 0.4%
SHARES VALUE (NOTE 1)
(000S)
EMERGING MARKETS - 0.2%
GT Global Developing Markets Fund 117,300 $ 1,393
Morgan Stanley Asia-Pacific Fund, Inc. 52,400 511
TCW/DW Emerging Markets Opportunities Trust (SBI) 45,600 604
Templeton Dragon Fund, Inc. 33,000 487
2,995
GERMANY - 0.2%
Emerging Germany Fund, Inc. 23,700 210
New Germany Fund, Inc. (The) (a) 118,800 1,708
1,918
TOTAL CLOSED-END INVESTMENT COMPANIES
(Cost $4,905) 4,913
CONVERTIBLE BONDS - 0.2%
PRINCIPAL
AMOUNT (000S)
BERMUDA - 0.2%
MBL International Finance of Bermuda
3%, 11/30/02 (Cost $3,166) $ 2,797 2,839
U.S. GOVERNMENT OBLIGATIONS - 0.0%
U.S. Treasury Bill, yields at dates of purchase
5.27% to 5.30%, 6/26/97 (b) (Cost $273) 275 273
CASH EQUIVALENTS - 10.6%
SHARES
Taxable Central Cash Fund (d)
(Cost $121,288) 121,287,818 121,288
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,023,944) $ 1,149,740
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
87 Nikkei 225 Futures Contracts June 1997 $ 8,457 $ 290
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.7%
LEGEND
1. Non-income producing
2. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $248,000.
3. 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 $11,749,000 or 1.0% of net
assets.
4. At period end, the seven-day yield on the Taxable Central Cash Fund was
5.45%. The yield refers to the income earned by investing in the fund over
the seven-day period, expressed as an annual percentage.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of Investment
in Securities
Aerospace & Defense 0.5%
Basic Industries 10.4
Cash Equivalents 10.6
Construction & Real Estate 3.5
Durables 10.5
Energy 6.7
Finance 13.9
Health 7.8
Holding Companies 1.2
Industrial Machinery &
Equipment 4.9
Media & Leisure 2.4
Nondurables 6.3
Precious Metals 0.6
Retail & Wholesale 3.4
Services 2.0
Technology 8.4
Transportation 0.4
Utilities 6.5
100.0%
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $1,024,136,000. Net unrealized appreciation aggregated
$125,604,000, of which $170,842,000 related to appreciated investment
securities and $45,238,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $1,023,944) - $ 1,149,740
See accompanying schedule
Cash 1,324
Receivable for investments sold 13,330
Receivable for fund shares sold 3,277
Dividends receivable 4,825
Interest receivable 587
Receivable for daily variation on futures contracts 156
Other receivables 10
Prepaid expenses 5
TOTAL ASSETS 1,173,254
LIABILITIES
Payable for investments purchased $ 29,445
Payable for fund shares redeemed 2,210
Accrued management fee 732
Distribution fees payable 459
Other payables and accrued expenses 342
TOTAL LIABILITIES 33,188
NET ASSETS $ 1,140,066
Net Assets consist of:
Paid in capital $ 975,572
Undistributed net investment income 2,549
Accumulated undistributed net realized gain (loss) on 35,992
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 125,953
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 1,140,066
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997 (UNAUDITED)
CALCULATION OF MAXIMUM OFFERING PRICE $15.85
CLASS A:
NET ASSET VALUE and redemption price per share
($2,170 (divided by) 136.87 shares)
Maximum offering price per share (100/94.75 of $15.85) $16.73
CLASS T: $15.96
NET ASSET VALUE and redemption price per share
($1,082,381 (divided by) 67,798 shares)
Maximum offering price per share (100/96.50 of $15.96) $16.54
CLASS B: $15.70
NET ASSET VALUE and offering price per share
($26,135 (divided by) 1,664.48 shares) A
INSTITUTIONAL CLASS: $15.83
NET ASSET VALUE, offering price and redemption price
per share ($29,380 (divided by) 1,856 shares)
</TABLE>
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>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 9,538
Dividends
Interest 3,190
12,728
Less foreign taxes withheld (1,069)
TOTAL INCOME 11,659
EXPENSES
Management fee $ 4,059
Basic fee
Performance adjustment 39
Transfer agent fees 1,230
Distribution fees 2,694
Accounting fees and expenses 298
Non-interested trustees' compensation 4
Custodian fees and expenses 302
Registration fees 62
Audit 34
Legal 12
Miscellaneous 33
Total expenses before reductions 8,767
Expense reductions (55) 8,712
NET INVESTMENT INCOME 2,947
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 37,714
Foreign currency transactions (19)
Futures contracts (1,119) 36,576
Change in net unrealized appreciation (depreciation) on:
Investment securities 60,602
Assets and liabilities in foreign currencies (140)
Futures contracts 446 60,908
NET GAIN (LOSS) 97,484
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 100,431
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,947 $ 11,992
Net investment income
Net realized gain (loss) 36,576 48,710
Change in net unrealized appreciation (depreciation) 60,908 25,789
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 100,431 86,491
FROM OPERATIONS
Distributions to shareholders (10,797) (4,950)
From net investment income
From net realized gain (42,335) (545)
TOTAL DISTRIBUTIONS (53,132) (5,495)
Share transactions - net increase (decrease) 62,211 203,150
TOTAL INCREASE (DECREASE) IN NET ASSETS 109,510 284,146
NET ASSETS
Beginning of period 1,030,556 746,410
End of period (including undistributed net investment $ 1,140,066 $ 1,030,556
income of $2,549 and $11,770, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1997
(UNAUDITED) 1996 F
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.29 $ 14.98
Income from Investment Operations
Net investment income .04 E .04 E
Net realized and unrealized gain (loss) 1.40 .27
Total from investment operations 1.44 .31
Less Distributions
From net investment income (.25) -
From net realized gain (.63) -
Total distributions (.88) -
Net asset value, end of period $ 15.85 $ 15.29
TOTAL RETURN B, C 9.75% 2.07%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 2,170 $ 637
Ratio of expenses to average net assets 1.89% A, 1.16% A,
G G
Ratio of expenses to average net assets after expense reductions 1.88% A, 1.16% A
H
Ratio of net investment income to average net assets .57% A 1.74% A
Portfolio turnover 81% A 82%
Average commission rate D $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO OCTOBER 31, 1996.
G 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 5 OF NOTES TO FINANCIAL STATEMENTS).
H 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1997
(UNAUDITED) 1996 1995 1994 F 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 15.30 $ 13.92 $ 14.06 $ 12.93 $ 9.07 $ 9.78
beginning of period
Income from
Investment
Operations
Net investment .04 D .19 D, .07 .01 .03 .05
income I
Net realized and 1.41 1.29 (.11) 1.14 3.93 (.62)
unrealized gain
(loss)
Total from investment 1.45 1.48 (.04) 1.15 3.96 (.57)
operations
Less Distributions
From net investment (.16) (.09) - - (.07) (.14)
income
From net realized gain (.63) (.01) (.02) (.02) (.03) H -
In excess of net - - (.08) - - -
realized gain
Total distributions (.79) (.10) (.10) (.02) (.10) (.14)
Net asset value, $ 15.96 $ 15.30 $ 13.92 $ 14.06 $ 12.93 $ 9.07
end of period
TOTAL RETURN B, C 9.78% 10.69% (.25) 8.91% 44.13% (5.88)
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 1,082,381 $ 995,004 $ 741,928 $ 653,774 $ 221,370 $ 18,652
period (000 omitted)
Ratio of expenses to 1.65% A 1.61% 1.90% 2.12% 2.38% 2.64%
average net assets
Ratio of expenses to 1.64% A 1.60% 1.90% 2.12% 2.38% 2.64%
average net assets , E E
after expense
reductions
Ratio of net investment .56% A 1.30% 1.01% .05% (.18) .48%
income to average %
net assets
Portfolio turnover 81% A 82% 47% 34% 42% 168%
Average commission $ .0206 $ .0133
rate G
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). C
TOTAL RETURNS DO NOT INCLUDE THE ONE
TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. D NET INVESTMENT INCOME
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E 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 5 OF NOTES TO FINANCIAL STATEMENTS). F
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. 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 INCLUDES AMOUNTS
DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY
INCOME. I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
FROM VOLVO AB CLASS B WHICH
AMOUNTED TO $.04 PER SHARE.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS YEARS ENDED OCTOBER
ENDED 31,
APRIL 30, 1997
(UNAUDITED) 1996 1995 F
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.06 $ 13.92 $ 13.89
Income from Investment Operations
Net investment income .00 E .08 E, .01
D
Net realized and unrealized gain (loss) 1.39 1.26 .02
Total from investment operations 1.39 1.34 .03
Less Distributions
From net investment income (.12) (.19) -
From net realized gain (.63) (.01) -
Total distributions (.75) (.20) -
Net asset value, end of period $ 15.70 $ 15.06 $ 13.92
TOTAL RETURN B, C 9.51% 9.73% .22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 26,135 $ 18,668 $ 2,999
Ratio of expenses to average net assets 2.33% A 2.37% 1.97% A,
G
Ratio of expenses to average net assets after 2.32% A, 2.37% 1.97% A
expense reductions H
Ratio of net investment income to average net assets (.06)% A .53% .94% A
Portfolio turnover 81% A 82% 47%
Average commission rate I $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB
CLASS B WHICH AMOUNTED TO $.04 PER SHARE.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
OCTOBER 31, 1995.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
H 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
I 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 - INSTITUTIONAL CLASS
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1997
(UNAUDITED) 1996 1995 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 15.20 $ 13.97 $ 13.89
Income from Investment Operations
Net investment income .08 D .21 D, I .05
Net realized and unrealized gain (loss) 1.41 1.24 .03
Total from investment operations 1.49 1.45 .08
Less Distributions
From net investment income (.23) (.21) -
From net realized gain (.63) (.01) -
Total distributions (.86) (.22) -
Net asset value, end of period $ 15.83 $ 15.20 $ 13.97
TOTAL RETURN B, C 10.15% 10.51% .58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 29,380 $ 16,247 $ 1,482
Ratio of expenses to average net assets 1.18% A 1.44% .97% A,
F
Ratio of expenses to average net assets after 1.17% A, 1.43% G .97% A
expense reductions G
Ratio of net investment income to average net 1.13% A 1.46% 1.94% A
assets
Portfolio turnover 81% A 82% 47%
Average commission rate H $ .0206 $ .0133
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
G 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 5 OF
NOTES TO FINANCIAL STATEMENTS).
H 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.
I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM VOLVO AB
CLASS B WHICH AMOUNTED TO $.04 PER SHARE.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997 (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 T, 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, the
common expenses of the fund, and certain fund-level expense reductions 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, expenses, and expense
reductions.
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 with remaining maturities of sixty days or less for
which quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
and the U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are included
with the net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The fund may be subject to foreign taxes on income and
gains on investments which are accrued based upon the fund's understanding
of the tax rules and regulations that exist in the markets in which it
invests. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, 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. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying Class A and
shares of Class A for distribution under federal and state securities law.
These expenses are borne by Class A and amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
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 paydown
gains/losses on certain securities, futures and options transactions,
foreign currency transactions, passive foreign investment companies (PFIC),
market discount 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund)
managed by FMR Texas, an affiliate of FMR. The Cash Fund is an open-end
money market fund available only to investment companies and other accounts
managed by FMR and its affiliates. The Cash Fund seeks preservation of
capital, liquidity, and current income by investing in U.S. Treasury
securities and repurchase agreements for these securities. Dividends from
the Cash Fund are declared daily and paid monthly from net interest income.
Income distributions received by the fund are recorded as interest income
in the accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock and bond markets and to fluctuations in interest
rates and currency values. Buying futures tends to increase the fund's
exposure to the underlying instrument, while selling futures tends to
decrease the fund's exposure to the underlying instrument or hedge other
fund investments. Futures contracts involve, to varying degrees, risk of
loss in excess of the futures variation margin reflected in the Statement
of Assets and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of investments
under the caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms. Futures contracts are valued at the settlement
price established each day by the board of trade or exchange on which they
are traded.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $420,196,000 and $389,946,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $17,282,000 and $13,488,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .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 ".20%
of the fund's average net assets over the performance period) based on the
investment performance of the lowest
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
performing class as compared to the appropriate index over a specified
period of time. For the period, the management fee was equivalent to an
annualized rate of .77% 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., and 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.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
each class of shares (collectively referred to as "the Plans"). Under
certain of the Plans, the class pays Fidelity Distributors Corporation
(FDC), an affiliate of FMR, a distribution and service fee. This fee is
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion of
which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares, and
providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 2,000 $ 2,000
CLASS T 2,581,000 2,581,000
CLASS B 111,000 28,000
$ 2,694,000 $ 2,611,000
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The Plans
also authorize payments to third parties that assist in the sale of each
class' shares or render shareholder support services.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% for
selling Class A shares and 3.50% for selling Class T shares of the fund,
respectively, and the proceeds of a contingent deferred sales charge levied
on Class B share redemptions occurring within six years of purchase (five
years prior to January 2, 1997). The Class B charge is based on declining
rates which range from 5% to 1%(4% to 1% prior to January 2, 1997) 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 the following sales charge amounts related to
each class, a portion of which is paid to securities dealers, banks, and
other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 30,000 $ 24,000
CLASS T 383,000 283,000
CLASS B 36,000 0 *
$ 449,000 $ 307,000
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM ITS OWN
RESOURCES TO DEALERS THROUGH WHICH
THE SALES ARE MADE.
TRANSFER AGENT FEES. Each class of the fund has entered into a separate
transfer, dividend disbursing, and shareholder servicing agent
(collectively referred to as the Transfer Agents) contract with respect to
its 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. For the period, the
following amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC* $ 3,000 .38
CLASS T** FIIOC* 1,173,000 .23
CLASS B FIIOC* 34,000 .31
INSTITUTIONAL CLASS FIIOC* 20,000 .17
$ 1,230,000
* FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.(FIIOC) AN
AFFILIATE OF FMR.
** PRIOR TO JANUARY 1, 1997 STATE STREET BANK AND TRUST COMPANY WAS THE
TRANSFER AGENT FOR THE FUND'S CLASS T SHARES. STATE STREET, HOWEVER, HAD
DELEGATED CERTAIN
TRANSFER, DIVIDEND DISBURSING, AND SHAREHOLDER SERVICES TO FIIOC FOR WHICH
FIIOC RECEIVED ITS ALLOCABLE SHARE OF ALL SUCH FEES.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. Fidelity Service Company, Inc., 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 $121,000 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates or range of annual rates of average net assets for
each class:
FMR REIMBURSEME
EXPENSE NT
LIMITATIONS
CLASS A 2.00% $ 10,000
In addition, FMR agreed to reimburse certain transfer agent, registration
and other class specific expenses for Class A. For the period, the
reimbursement reduced these expenses by $1,000.
FMR has also 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 $40,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses. During
the period, the fund's custodian fees were reduced by $2,000 under the
custodian arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER
AGENT
INTEREST
CREDITS
CLASS T $ 1,000
INSTITUTIONAL CLASS 1,000
$ 2,000
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1997 1996 A
CLASS A
From net investment income $ 15 $ -
From net realized gain 38 -
Total $ 53 $ -
CLASS T
From net investment income $ 10,326 $ 4,861
From net realized gain 40,659 540
Total $ 50,985 $ 5,401
CLASS B
From net investment income $ 154 $ 55
From net realized gain 812 3
Total $ 966 $ 58
INSTITUTIONAL CLASS
From net investment income $ 302 $ 34
From net realized gain 826 2
Total $ 1,128 $ 36
$ 53,132 $ 5,495
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31, ENDED APRIL 30, OCTOBER 31,
1997 1996 A 1997 1996 A
CLASS A 98 48 $ 1,515 $ 729
Shares sold
Reinvestment of distributions 3 - 52 -
Shares redeemed (6) (6) (96) (90)
Net increase (decrease) 95 42 $ 1,471 $ 639
CLASS T 15,435 30,743 $ 240,564 $ 457,298
Shares sold
Reinvestment of distributions 3,177 351 47,915 4,964
Shares redeemed (15,857) (19,351) (246,308) (289,234)
Net increase (decrease) 2,755 11,743 $ 42,171 $ 173,028
CLASS B 488 1,135 $ 7,487 $ 16,670
Shares sold
Reinvestment of distributions 63 4 930 54
Shares redeemed (126) (115) (1,930) (1,701)
Net increase (decrease) 425 1,024 $ 6,487 $ 15,023
INSTITUTIONAL CLASS 956 1,071 $ 14,727 $ 16,083
Shares sold
Reinvestment of distributions 68 2 1,019 32
Shares redeemed (237) (110) (3,664) (1,655)
Net increase (decrease) 787 963 $ 12,082 $ 14,460
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1996
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 13,000
CLASS T 28,000
CLASS B 10,000
INSTITUTIONAL CLASS 11,000
$ 62,000
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 *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
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, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
* INDEPENDENT TRUSTEES
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities 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 Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(REGISTERED TRADEMARK)
