(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
FOCUS FUNDS
CLASS A, CLASS T, CLASS B AND CLASS C
Consumer Industries
Cyclical Industries
Financial Services
Health Care
Natural Resources
Technology
Utilities Growth
SEMIANNUAL REPORT
JANUARY 31, 1998
CONTENTS
PERFORMANCE OVERVIEW 4
CONSUMER INDUSTRIES 5 PERFORMANCE AND INVESTMENT SUMMARY
9 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENTS
13 FINANCIAL STATEMENTS
17 NOTES TO THE FINANCIAL STATEMENTS
CYCLICAL INDUSTRIES 22 PERFORMANCE AND INVESTMENT SUMMARY
26 FUND TALK: THE MANAGER'S OVERVIEW
27 INVESTMENTS
30 FINANCIAL STATEMENTS
34 NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL SERVICES 39 PERFORMANCE AND INVESTMENT SUMMARY
43 FUND TALK: THE MANAGERS' OVERVIEW
44 INVESTMENTS
46 FINANCIAL STATEMENTS
50 NOTES TO THE FINANCIAL STATEMENTS
HEALTH CARE 55 PERFORMANCE AND INVESTMENT SUMMARY
59 FUND TALK: THE MANAGER'S OVERVIEW
60 INVESTMENTS
62 FINANCIAL STATEMENTS
66 NOTES TO THE FINANCIAL STATEMENTS
NATURAL RESOURCES 71 PERFORMANCE AND INVESTMENT SUMMARY
75 FUND TALK: THE MANAGER'S OVERVIEW
76 INVESTMENTS
79 FINANCIAL STATEMENTS
83 NOTES TO THE FINANCIAL STATEMENTS
TECHNOLOGY 88 PERFORMANCE AND INVESTMENT SUMMARY
92 FUND TALK: THE MANAGER'S OVERVIEW
93 INVESTMENTS
96 FINANCIAL STATEMENTS
100 NOTES TO THE FINANCIAL STATEMENTS
UTILITIES GROWTH 105 PERFORMANCE AND INVESTMENT SUMMARY
109 FUND TALK: THE MANAGER'S OVERVIEW
110 INVESTMENTS
112 FINANCIAL STATEMENTS
116 NOTES TO THE FINANCIAL STATEMENTS
PROXY VOTING RESULTS 121
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS 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 FUNDS 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.
U.S. STOCK MARKET ENVIRONMENT
Economic trouble in Southeast Asia and an ensuing "flight to safety"
mentality on the part of investors played leading roles in the
direction of the U.S. stock market over the past six months. Closer to
home, economic conditions in the U.S. continued to be favorable, with
moderate growth, low inflation and low interest rates providing a rosy
backdrop for both stocks and bonds. The Standard & Poor's 500 Index -
a measure of the U.S. stock market based on the average performance of
500 widely held stocks - returned 3.56% during this time, while the
Russell 2000 Index - a barometer of small-stock performance - gained
4.42%. The Dow Jones Industrial Average - an index of 30 blue-chip
stocks - had a six-month return of -3.03%.
After a long stretch of large-company stock dominance, several
developments triggered a turnaround. Multiple currency devaluations in
Southeast Asia caused several large U.S. multinational companies to
announce earnings shortfalls in August and investors grew wary. In the
months of August and September, in fact, small-company stocks
outperformed their larger counterparts due to stronger relative
earnings growth. Thousands of miles away, however, an imposing
obstacle loomed in the form of a wide-scale economic crisis. While
signs of economic deterioration in Southeast Asia had been evident as
far back as June, it wasn't until several larger markets - most
notably Hong Kong - became afflicted that investors in world markets
began to worry. In late October, spurred by several major currency
collapses throughout Asia, many world markets tumbled. In the U.S.,
for example, the Dow Jones average fell 550-plus points one day only
to reclaim a good portion of its losses back the next.
Another byproduct of the Asian crisis was the aforementioned flight to
safety. Concerned about global volatility, many investors rotated back
to stocks of companies with minimal international business exposure.
Larger-cap stocks - many of which tend to offer more stable earnings
growth than smaller stocks - also gained favor.
Two sectors - TECHNOLOGY and UTILITIES - exemplified the varying
effects of the Asian dilemma. Since Southeast Asia accounts for a
considerable portion of the world's technology growth and demand, many
U.S. technology stocks - particularly those involved in semiconductor
production - declined sharply. Disappointing earnings and a trend
toward cheaper personal-computer prices also spelled trouble for many
tech stocks. Utility stocks, on the other hand, benefited from the
flight to safety. While industry deregulation was a constant source of
uncertainty, investors were drawn to utility stocks for their domestic
emphasis.
As has been the case for the past couple of years, HEALTH CARE and
FINANCE stocks continued to perform well. In the health care sector,
stocks of larger pharmaceutical companies fared very well, due mostly
to enthusiasm for new-product development and an acceleration in the
Federal Drug Administration's approval process. Finance stocks,
meanwhile, performed well due to increased industry consolidation,
declining interest rates and a healthy economy that led to increased
financing activity.
On the NATURAL RESOURCES front, most commodity prices - including
those of oil, natural gas and gold - stumbled dramatically as it
became clear that Asian consumption would weaken. Accordingly, many
natural-resource stocks faltered during the period. CYCLICAL STOCKS -
those whose performance typically moves in line with prevailing
economic conditions - struggled over the past three months due to an
anticipated slowdown in Asian product demand. In particular, stocks of
many paper- and aluminum-related companies were hurt. Lastly, stocks
in the CONSUMER NONDURABLES area generated positive gains. Retail
companies, for instance, experienced encouraging sales growth due to
increased consumer confidence and a heavier reliance on information
technology designed to streamline store space and increase revenues.
ADVISOR CONSUMER INDUSTRIES FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CONSUMER - CL A 8.88% 30.00% 47.73%
FIDELITY ADV CONSUMER - CL A 2.62% 22.53% 39.24%
(INCL. 5.75% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CONSUMER - CL A 30.00% 31.86%
FIDELITY ADV CONSUMER - CL A 22.53% 26.44%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165300 S00000000000001
FA Consumer Ind -CL A S&P 500
00185 SP001
1996/09/03 9425.00 10000.00
1996/09/30 9943.38 10516.69
1996/10/31 10056.48 10806.74
1996/11/30 10395.78 11623.62
1996/12/31 10216.82 11393.36
1997/01/31 10710.11 12105.21
1997/02/28 10842.92 12200.12
1997/03/31 10529.87 11698.81
1997/04/30 10700.63 12397.23
1997/05/31 11525.94 13151.98
1997/06/30 12114.10 13741.19
1997/07/31 12787.63 14834.57
1997/08/31 12332.28 14003.54
1997/09/30 13156.20 14770.51
1997/10/31 12917.00 14277.18
1997/11/30 13551.41 14938.07
1997/12/31 13988.48 15194.56
1998/01/30 13923.62 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165302 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Consumer Industries - Class A on
September 3, 1996, when the fund started, and the current maximum
5.75% sales charge was paid. As the chart shows, by January 31, 1998,
the value of the investment would have grown to $13,924 - a 39.24%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WAL-MART STORES, INC. 6.0
COCA-COLA CO. (THE) 5.4
PROCTER & GAMBLE CO. 4.9
GILLETTE CO. 4.6
PEPSICO, INC. 4.3
DISNEY (WALT) CO. 4.1
PHILIP MORRIS COMPANIES, INC. 3.8
HOME DEPOT, INC. 1.9
SAFEWAY, INC. 1.8
TIME WARNER, INC. 1.7
TOP INDUSTRIES AS OF JANUARY 31, 1998
SOFT DRINKS 9.7%
SOAPS & DETERGENT S 8.2%
GENERAL MERCHANDISE STORES 7.1%
COSMETICS 6.5%
MOTION PICTURE PRODUCTION 5.4%
ALL OTHERS 63.1%
ROW: 1, COL: 1, VALUE: 63.1
ROW: 1, COL: 2, VALUE: 5.4
ROW: 1, COL: 3, VALUE: 6.5
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 8.199999999999999
ROW: 1, COL: 6, VALUE: 9.699999999999999
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CONSUMER INDUSTRIES FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CONSUMER - CL T 8.57% 29.34% 46.84%
FIDELITY ADV CONSUMER - CL T 4.77% 24.81% 41.70%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CONSUMER - CL T 29.34% 31.29%
FIDELITY ADV CONSUMER - CL T 24.81% 28.02%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165502 S00000000000001
FA Consumer Ind -CL T S&P 500
00195 SP001
1996/09/03 9650.00 10000.00
1996/09/30 10180.75 10516.69
1996/10/31 10296.55 10806.74
1996/11/30 10643.95 11623.62
1996/12/31 10451.06 11393.36
1997/01/31 10955.66 12105.21
1997/02/28 11091.51 12200.12
1997/03/31 10761.58 11698.81
1997/04/30 10936.25 12397.23
1997/05/31 11770.78 13151.98
1997/06/30 12362.72 13741.19
1997/07/31 13051.69 14834.57
1997/08/31 12585.91 14003.54
1997/09/30 13396.56 14770.51
1997/10/31 13152.02 14277.18
1997/11/30 13800.59 14938.07
1997/12/31 14236.18 15194.56
1998/01/30 14169.91 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165503 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Consumer Industries - Class T on
September 3, 1996, when the fund started, and the current maximum
3.50% sales charge was paid. As the chart shows, by January 31, 1998,
the value of the investment would have grown to $14,170 - a 41.70%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WAL-MART STORES, INC. 6.0
COCA-COLA CO. (THE) 5.4
PROCTER & GAMBLE CO. 4.9
GILLETTE CO. 4.6
PEPSICO, INC. 4.3
DISNEY (WALT) CO. 4.1
PHILIP MORRIS COMPANIES, INC. 3.8
HOME DEPOT, INC. 1.9
SAFEWAY, INC. 1.8
TIME WARNER, INC. 1.7
TOP INDUSTRIES AS OF JANUARY 31, 1998
SOFT DRINKS 9.7%
SOAPS & DETERGENT S 8.2%
GENERAL MERCHANDISE STORES 7.1%
COSMETICS 6.5%
MOTION PICTURE PRODUCTION 5.4%
ALL OTHERS 63.1%
ROW: 1, COL: 1, VALUE: 63.1
ROW: 1, COL: 2, VALUE: 5.4
ROW: 1, COL: 3, VALUE: 6.5
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 8.199999999999999
ROW: 1, COL: 6, VALUE: 9.699999999999999
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CONSUMER INDUSTRIES FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gain (the profits
earned upon the sale of securities that have grown in value). The
initial offering of Class B shares took place on March 3, 1997. Class
B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997 are
those of Class T which bears a 0.50% 12b-1 fee. Had Class B's 12b-1
fee been reflected, returns prior to March 3, 1997 would have been
lower. Class B shares' contingent deferred sales charge included in
the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CONSUMER - CL B 8.34% 28.78% 46.21%
FIDELITY ADV CONSUMER - CL B 3.58% 23.78% 42.21%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CONSUMER - CL B 28.78% 30.89%
FIDELITY ADV CONSUMER - CL B 23.78% 28.34%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 161306 S00000000000001
FA Consumer Ind -CL B S&P 500
00190 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10550.00 10516.69
1996/10/31 10670.00 10806.74
1996/11/30 11030.00 11623.62
1996/12/31 10830.11 11393.36
1997/01/31 11353.01 12105.21
1997/02/28 11493.80 12200.12
1997/03/31 11151.90 11698.81
1997/04/30 11322.85 12397.23
1997/05/31 12187.65 13151.98
1997/06/30 12791.00 13741.19
1997/07/31 13494.90 14834.57
1997/08/31 13012.22 14003.54
1997/09/30 13841.35 14770.51
1997/10/31 13576.87 14277.18
1997/11/30 14249.10 14938.07
1997/12/31 14689.16 15194.56
1998/01/30 14221.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 161308 R00000000000020
$10,000 OVER THE LIFE OF FUND: Let's say hypothetically that $10,000
was invested in Fidelity Advisor Consumer Industries - Class B on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $14,221 - a
42.21% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WAL-MART STORES, INC. 6.0
COCA-COLA CO. (THE) 5.4
PROCTER & GAMBLE CO. 4.9
GILLETTE CO. 4.6
PEPSICO, INC. 4.3
DISNEY (WALT) CO. 4.1
PHILIP MORRIS COMPANIES, INC. 3.8
HOME DEPOT, INC. 1.9
SAFEWAY, INC. 1.8
TIME WARNER, INC. 1.7
TOP INDUSTRIES AS OF JANUARY 31, 1998
SOFT DRINKS 9.7%
SOAPS & DETERGENT S 8.2%
GENERAL MERCHANDISE STORES 7.1%
COSMETICS 6.5%
MOTION PICTURE PRODUCTION 5.4%
ALL OTHERS 63.1%
ROW: 1, COL: 1, VALUE: 63.1
ROW: 1, COL: 2, VALUE: 5.4
ROW: 1, COL: 3, VALUE: 6.5
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 8.199999999999999
ROW: 1, COL: 6, VALUE: 9.699999999999999
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CONSUMER INDUSTRIES FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CONSUMER - CL C 8.24% 28.66% 46.07%
FIDELITY ADV CONSUMER - CL C 7.24% 27.66% 46.07%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CONSUMER - CL C 28.66% 30.80%
FIDELITY ADV CONSUMER - CL C 27.66% 30.80%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165352 S00000000000001
FA Consumer Ind -CL C S&P 500
00282 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10550.00 10516.69
1996/10/31 10670.00 10806.74
1996/11/30 11029.99 11623.62
1996/12/31 10830.11 11393.36
1997/01/31 11353.02 12105.21
1997/02/28 11493.79 12200.12
1997/03/31 11151.90 11698.81
1997/04/30 11322.84 12397.23
1997/05/31 12187.65 13151.98
1997/06/30 12790.99 13741.19
1997/07/31 13494.90 14834.57
1997/08/31 13012.23 14003.54
1997/09/30 13841.35 14770.51
1997/10/31 13576.87 14277.18
1997/11/30 14247.70 14938.07
1997/12/31 14686.44 15194.56
1998/01/30 14606.62 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165353 R00000000000020
$10,000 OVER THE LIFE OF FUND: Let's say hypothetically that $10,000
was invested in Fidelity Advisor Consumer Industries - Class C on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $14,607 - a
46.07% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WAL-MART STORES, INC. 6.0
COCA-COLA CO. (THE) 5.4
PROCTER & GAMBLE CO. 4.9
GILLETTE CO. 4.6
PEPSICO, INC. 4.3
DISNEY (WALT) CO. 4.1
PHILIP MORRIS COMPANIES, INC. 3.8
HOME DEPOT, INC. 1.9
SAFEWAY, INC. 1.8
TIME WARNER, INC. 1.7
TOP INDUSTRIES AS OF JANUARY 31, 1998
SOFT DRINKS 9.7%
SOAPS & DETERGENT S 8.2%
GENERAL MERCHANDISE STORES 7.1%
COSMETICS 6.5%
MOTION PICTURE PRODUCTION 5.4%
ALL OTHERS 63.1%
ROW: 1, COL: 1, VALUE: 63.1
ROW: 1, COL: 2, VALUE: 5.4
ROW: 1, COL: 3, VALUE: 6.5
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 8.199999999999999
ROW: 1, COL: 6, VALUE: 9.699999999999999
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CONSUMER INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Douglas Chase, Portfolio Manager of Fidelity Advisor Consumer
Industries Fund
Q. HOW DID THE FUND PERFORM, DOUG?
A. Very well. During the six-month period that ended January 31, 1998,
the fund's Class A, Class T, Class B and Class C shares returned
8.88%, 8.57%, 8.34% and 8.24%, respectively, outperforming the
Standard & Poor's 500 Index return of 3.56% for the same period. For
the 12 months that ended January 31, 1998, the fund's Class A, Class
T, Class B and Class C shares returned 30.00%, 29.34%, 28.78% and
28.66%, while the S&P 500 returned 26.91%.
Q. WHAT WAS THE MARKET ENVIRONMENT LIKE DURING THE PAST SIX MONTHS?
A. It was a volatile one. In August, we saw a big decline in some
stocks of companies with international exposure as problems in Asia
erupted, beginning with Thailand. Those events, combined with downward
revisions in earnings reported by Coca-Cola and Gillette, triggered a
decline in stock prices. In October, fears grew that more economies
would be pulled into a worldwide recession when South Korea, the
world's 11th largest economy, experienced its own troubles. Good but
unexciting earnings reports also caused the market to lose its
momentum, with stock prices spiraling downward. The dollar
strengthened, hurting prospects for multinational profits, and at
times global recession was predicted.
Q. WHAT STRATEGY DID YOU PURSUE IN THIS ENVIRONMENT?
A. When I took over the fund in August, its emphasis was on
small-capitalization stocks. I diversified the fund, placing greater
emphasis on large-cap stocks, particularly in August when I felt they
were undervalued. Also at that time of uncertainty in the market, I
believed that there could be a "flight to quality" to large-cap
companies, because they tend to have more predictable earnings growth.
I took the opportunity to sell many of the small-cap stocks in the
fund that had performed well, and shifted assets to large-cap stocks.
Q. WHICH STOCKS PERFORMED WELL?
A. Wal-Mart, the fund's number one holding, has been a terrific stock.
The company changed the way retailing works in this country. Wal-Mart
invested in information technology to hold inventories down and keep
exactly what the customer wants on the shelf, and now it allocates
floor space to the categories that sell fastest. Another strong
performer, ITT, was recently subject to a potential takeover battle,
and I sold the stock to take advantage of the jump in its stock price.
BET Holdings, a top holding six months ago, also benefited from a
buyout offer, and I sold it to take profits. During the last few
months of the period, Coca-Cola and Procter & Gamble outperformed the
market. A declining interest-rate environment such as we've had is
very good for steady growth companies like the ones I just mentioned.
And, when the market gets worried about its future prospects, there is
usually a flight to quality stocks like these two.
Q. EVEN WITH ITS STRONG PERFORMANCE, THE FUND MUST HAVE HELD SOME
DISAPPOINTING STOCKS . . .
A. Sure. Philip Morris turned out to be a disappointment, as the
anticipated lawsuit settlement continued to be delayed. In addition,
cereal companies such as Kellogg and General Mills didn't do as well
as expected. This industry did not get attractive pricing nor much
growth, and its product mix has shifted negatively to more generics
with lower profit margins.
Q. YOU'RE INTERESTED IN ENTERTAINMENT AND CABLE STOCKS. WHAT'S
HAPPENING THERE?
A. Right now, I'm very interested in broadcasting, entertainment,
cable and advertising. Ad rates are way up. Broadcasters profit by
charging more for ads, and newspapers benefit by increasing help
wanted and other types of ads. Cable operators are developing the
capability of two-way communication, and can raise prices and retain
market share. Their future is much brighter now than when satellite TV
exploded onto the scene last year.
Q. WHAT'S YOUR OUTLOOK?
A. I'm cautious, as always. Although the U.S. economy is strong and
unemployment continues to be low, personal indebtedness is still high.
If the economy weakens, the degree of indebtedness could be a big
issue. I believe that we won't know until the spring how great the
impact of Asia's problems will be, and how intertwined the global
economy is. Some Asian competitors are now dealing with currencies
that have been halved; that could make them low-cost producers. And,
with the U.S. market an open one, more imports could create problems
for smaller U.S. niche companies. The challenge right now is that
stocks aren't priced as low as they were six months ago, but my
discipline - finding a balance of risk and return - tends to remain
the same, no matter what the market conditions.
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
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$15 million
MANAGER: Doug Chase, since August 1997;
joined Fidelity in 1993
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.4%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.5%
ADVERTISING - 0.3%
Outdoor Systems, Inc. (a) 1,775 $ 42,600
ADVERTISING AGENCIES - 1.2%
Interpublic Group of Companies, Inc. 2,000 98,125
Omnicom Group, Inc. 2,100 85,181
183,306
TOTAL ADVERTISING 225,906
AGRICULTURE - 0.3%
CROPS - 0.3%
Pioneer Hi-Bred International, Inc. 500 50,031
AIR TRANSPORTATION - 0.6%
TRANSPORTATION SERVICES - 0.6%
Viad Corp. 4,400 87,450
APPAREL STORES - 2.0%
FAMILY CLOTHING STORES - 0.4%
Abercrombie & Fitch Co. (a) 1,500 46,688
Stage Stores, Inc. (a) 500 19,391
66,079
GENERAL APPAREL STORES - 1.1%
Gap, Inc. 3,575 139,648
TJX Companies, Inc. 900 30,488
170,136
SHOE STORES - 0.5%
Payless ShoeSource, Inc. (a) 1,100 71,569
TOTAL APPAREL STORES 307,784
BEVERAGES - 9.9%
MALT BEVERAGE - 0.2%
Coors (Adolph) Co. Class B 900 28,575
SOFT DRINKS - 9.7%
Coca-Cola Co. (The) 12,800 828,800
PepsiCo, Inc. 18,000 649,125
1,477,925
TOTAL BEVERAGES 1,506,500
BROADCASTING - 5.2%
CABLE TV OPERATORS - 4.1%
Comcast Corp.:
Class A 3,000 93,188
Class A special 900 28,181
Cox Communications, Inc. Class A (a) 1,800 66,375
TCA Cable TV, Inc. 1,600 74,800
Tele-Communications, Inc. (TCI Group),
Series A (a) 3,400 95,200
Time Warner, Inc. 4,125 264,773
622,517
RADIO BROADCASTING - 0.7%
Chancellor Media Corp. (a) 1,400 48,125
Clear Channel Communications, Inc. (a) 850 65,450
113,575
TELEVISION BROADCASTING - 0.4%
CBS Corp. 1,907 57,091
TOTAL BROADCASTING 793,183
SHARES VALUE (NOTE 1)
CELLULAR - 0.9%
CELLULAR & COMMUNICATION SERVICES - 0.9%
Centennial Cellular Corp. Class A (a) 1,400 $ 29,400
Mobile Telecommunications Technologies,
Inc. (a) 1,300 29,331
Nextel Communications, Inc. Class A (a) 3,000 81,938
140,669
COMPUTER SERVICES & SOFTWARE - 1.0%
COMPUTER & SOFTWARE STORES - 0.4%
CompUSA, Inc. (a) 2,000 61,875
COMPUTER SERVICES - 0.5%
America Online, Inc. (a) 575 55,020
Computer Learning Centers, Inc. (a) 800 27,250
82,270
PREPACKAGED COMPUTER SOFTWARE - 0.1%
Midway Games, Inc. (a) 500 10,875
TOTAL COMPUTER SERVICES & SOFTWARE 155,020
COMPUTERS & OFFICE EQUIPMENT - 0.2%
COMPUTER EQUIPMENT - WHOLESALE - 0.2%
CDW Computer Centers, Inc. (a) 400 24,350
CONSUMER DURABLES - 0.1%
MANUFACTURING INDUSTRIES, NEC - 0.1%
Blyth Industries, Inc. (a) 500 14,250
CONSUMER ELECTRONICS - 0.6%
APPLIANCES - 0.6%
Black & Decker Corp. 1,700 81,919
DRUG STORES - 1.7%
CVS Corp. 2,015 132,108
Rite Aid Corp. 400 24,975
Walgreen Co. 3,250 107,656
264,739
DRUGS & PHARMACEUTICALS - 0.2%
Rexall Sundown, Inc. (a) 1,000 34,563
EDUCATIONAL SERVICES - 0.4%
COLLEGES, UNIVERSITIES & PROFESSIONAL SCHOOLS - 0.3%
Apollo Group, Inc. Class A (a) 1,000 45,250
EDUCATIONAL SERVICES - 0.1%
Childrens Comprehensive Services,
Inc. (a) 600 10,350
TOTAL EDUCATIONAL SERVICES 55,600
ENGINEERING - 0.3%
SPECIAL CONTRACTORS - 0.3%
Comfort Systems USA, Inc. 2,400 46,350
ENTERTAINMENT - 6.2%
CRUISES - 0.8%
Carnival Cruise Lines, Inc. Class A 2,200 122,788
MOTION PICTURE PRODUCTION - 5.4%
Disney (Walt) Co. 5,900 628,719
King World Productions, Inc. 1,800 106,538
Viacom, Inc. Class B (non-vtg.) (a) 2,000 83,500
818,757
TOTAL ENTERTAINMENT 941,545
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FOODS - 8.0%
CANNED SPECIALTIES - 0.9%
Campbell Soup Co. 2,600 $ 139,100
FOOD - 4.0%
Dole Food, Inc. 775 36,038
General Mills, Inc. 1,250 93,047
Heinz (H.J.) Co. 3,175 176,014
Kellogg Co. 1,300 60,044
Sara Lee Corp. 4,500 245,531
610,674
GENERAL FOOD PREPARATIONS - 0.2%
Sysco Corp. 575 25,731
GRAIN MILL PRODUCTS - 1.2%
Archer-Daniels-Midland Co. 1,900 40,019
Corn Products International, Inc. 1,343 42,976
Quaker Oats Co. 500 26,875
Ralston Purina Co. 800 75,100
184,970
MEAT & FISH - 1.1%
ConAgra, Inc. 5,275 166,822
PACKAGED & FROZEN FOODS - 0.6%
Bestfoods 975 95,063
TOTAL FOODS 1,222,360
GENERAL MERCHANDISE STORES - 12.1%
DEPARTMENT STORES - 3.1%
Carson Pirie Scott & Co. (a) 600 30,600
Federated Department Stores, Inc. (a) 3,500 148,313
Kohls Corp. (a) 600 41,625
Meyer (Fred), Inc. (a) 1,300 47,938
Penney (J.C.) Co., Inc. 2,625 176,859
Proffitts, Inc. (a) 1,000 29,375
474,710
GENERAL MERCHANDISE STORES - 7.1%
Dayton Hudson Corp. 2,300 165,456
Wal-Mart Stores, Inc. 22,950 915,131
1,080,587
VARIETY STORES - 1.9%
Consolidated Stores Corp. (a) 1,440 59,220
Costco Companies, Inc. (a) 1,000 43,375
Dollar Tree Stores (a) 1,100 46,819
Michaels Stores, Inc. (a) 3,000 92,250
99 Cents Only Stores (a) 1,468 46,609
288,273
TOTAL GENERAL MERCHANDISE STORES 1,843,570
GROCERY STORES - 2.8%
GROCERIES, GENERAL LINE - WHOLESALE - 0.3%
JP Foodservice, Inc. (a) 1,400 48,913
GROCERY - RETAIL - 2.5%
Albertson's, Inc. 600 28,613
Dominick's Supermarkets, Inc. (a) 900 35,663
Hannaford Brothers Co. 1,000 38,938
Safeway, Inc. (a) 4,025 267,411
370,625
TOTAL GROCERY STORES 419,538
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 0.2%
FURNITURE - 0.2%
Leggett & Platt, Inc. 625 $ 28,242
HOUSEHOLD PRODUCTS - 15.0%
COSMETICS - 6.5%
Alberto-Culver Co. Class A 1,400 35,875
Avon Products, Inc. 3,075 184,500
Gillette Co. 7,150 706,063
Estee Lauder Companies, Inc. 400 21,975
Revlon, Inc. Class A 900 38,138
986,551
FABRICATED RUBBER PRODUCTS - 0.2%
Rubbermaid, Inc. 900 23,288
MANUFACTURED PRODUCTS - 0.1%
First Brands Corp. 475 13,152
SOAPS & DETERGENTS - 8.2%
Clorox Co. 1,400 107,275
Colgate-Palmolive Co. 2,050 150,163
Dial Corp. 600 12,563
Procter & Gamble Co. 9,530 746,914
Unilever NV ADR 4,200 239,663
1,256,578
TOTAL HOUSEHOLD PRODUCTS 2,279,569
LEASING & RENTAL - 0.5%
VIDEO TAPE RENTAL - 0.5%
Hollywood Entertainment Corp. (a) 8,300 79,888
LEISURE DURABLES & TOYS - 1.1%
MOTORCYCLES - 0.2%
Harley-Davidson, Inc. 1,000 25,125
SPORTING & ATHLETIC GOODS - 0.4%
Callaway Golf Co. 2,300 62,100
TOYS & GAMES - 0.5%
Mattel, Inc. 2,000 81,000
TOTAL LEISURE DURABLES & TOYS 168,225
LODGING & GAMING - 0.9%
HOTELS, MOTELS, & TOURIST CENTERS - 0.9%
Mirage Resorts, Inc. (a) 1,700 39,206
Promus Hotel Corp. (a) 1,000 45,188
Sun International Hotels Ltd. Ord. (a) 1,400 53,550
137,944
PHOTOGRAPHIC EQUIPMENT - 0.1%
Polaroid Corp. 300 12,319
PRINTING - 0.5%
COMMERCIAL PRINTING, NEC - 0.5%
Valassis Communications, Inc. (a) 2,400 82,800
PUBLISHING - 3.8%
BOOK PUBLISHING & PRINTING - 1.1%
Harcourt General, Inc. 1,550 82,620
Dun & Bradstreet Corp. 2,000 63,750
Scholastic Corp. (a) 800 28,000
174,370
NEWSPAPERS - 2.2%
Belo (A.H.) Corp. Class A 1,200 64,425
Dow Jones & Co., Inc. 450 22,613
Gannett Co., Inc. 1,950 117,975
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PUBLISHING - CONTINUED
NEWSPAPERS - CONTINUED
New York Times Co. (The) Class A 700 $ 45,544
Times Mirror Co. Class A 500 28,813
Tribune Co. 900 54,675
334,045
PERIODICALS - 0.5%
Playboy Enterprises, Inc. Class B (a) 4,700 74,613
TOTAL PUBLISHING 583,028
REAL ESTATE - 0.2%
CEMETERY SUBDIVIDERS & DEVELOP - 0.2%
Stewart Enterprises, Inc. Class A 600 27,600
RESTAURANTS - 0.7%
Logan's Roadhouse, Inc. (a) 25 456
Outback Steakhouse, Inc. (a) 1,400 44,800
Papa John's International, Inc. (a) 800 27,700
PJ America, Inc. (a) 2,400 40,200
113,156
RETAIL & WHOLESALE, MISCELLANEOUS - 4.9%
BOOK STORES - RETAIL - 0.3%
Barnes & Noble, Inc. (a) 1,700 54,081
BUILDING MATERIALS - RETAIL - 1.8%
Home Depot, Inc. 4,700 283,469
JEWELRY STORES - 0.2%
Zale Corp. (a) 1,000 24,500
LUMBER & BUILDING MATERIALS-RETAIL - 0.6%
Lowe's Companies, Inc. 1,800 91,013
MAIL ORDER - 0.3%
Brylane, Inc. 600 29,850
Tele-Communications Liberty Media
Group, Series A (a) 500 17,906
47,756
MISCELLANEOUS DURABLE GOODS - WHOLESALE - 0.2%
Action Performance Companies, Inc. (a) 800 25,300
MUSIC, TV, & ELECTRONICS STORES - 0.5%
Best Buy Co., Inc. (a) 800 40,500
Tandy Corp. 900 34,875
75,375
RETAIL, GENERAL - 1.0%
Bed Bath & Beyond, Inc. (a) 1,200 47,550
Office Depot, Inc. (a) 1,200 26,700
Staples, Inc. (a) 4,200 76,300
150,550
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 752,044
SERVICES - 1.4%
BEAUTY SHOPS - 0.5%
Steiner Leisure Ltd. (a) 2,450 76,563
BUSINESS CONSULTING SERVICES - 0.2%
Corrections Corp. of America (a) 800 29,500
DETECTIVE, GUARD & ARMORED CAR - 0.1%
Pittston Co. (Brinks Group) 300 12,169
PERSONAL SERVICES - 0.2%
Block (H&R), Inc. 700 30,713
SHARES VALUE (NOTE 1)
PERSONNEL SUPPLY SERVICES - 0.4%
AccuStaff, Inc. (a) 1,200 $ 30,900
Personnel Group of America, Inc. (a) 1,000 36,250
67,150
TOTAL SERVICES 216,095
TELEPHONE SERVICES - 0.9%
US WEST Media Group (a) 4,800 142,500
TEXTILES & APPAREL - 1.5%
APPAREL - 0.7%
Intimate Brands, Inc. Class A 1,000 25,313
Kellwood Co. 1,000 30,375
Warnaco Group, Inc. Class A 1,600 53,400
109,088
MEN'S & BOYS' CLOTHING - 0.6%
Pacific Sunwear of California,Inc. (a) 2,900 83,375
WOMEN'S & MISSES' OUTERWEAR - 0.2%
Jones Apparel Group, Inc. 700 30,450
TOTAL TEXTILES & APPAREL 222,913
TOBACCO - 4.7%
TOBACCO MANUFACTURERS - 4.7%
Consolidated Cigar Holdings, Inc.
Class A (a) 2,700 65,138
Philip Morris Companies, Inc. 13,800 572,700
UST, Inc. 2,100 72,450
710,288
TOTAL COMMON STOCKS
(Cost $12,727,307) 13,771,938
CASH EQUIVALENTS - 9.6%
Taxable Central Cash Fund (b)
(Cost $1,468,701) 1,468,701 1,468,701
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $14,196,008) $ 15,240,639
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $14,203,171. Net unrealized appreciation
aggregated $1,037,468, of which $1,245,952 related to appreciated
investment securities and $208,484 related to depreciated investment
securities.
ADVISOR CONSUMER INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $ 15,240,639
(COST $14,196,008) - SEE ACCOMPANYING SCHEDULE
CASH 40,700
RECEIVABLE FOR INVESTMENTS SOLD 147,853
RECEIVABLE FOR FUND SHARES SOLD 120,346
DIVIDENDS RECEIVABLE 9,178
INTEREST RECEIVABLE 4,833
PREPAID EXPENSES 10,766
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 680
TOTAL ASSETS 15,574,995
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 127,102
PAYABLE FOR FUND SHARES REDEEMED 989
DISTRIBUTION FEES PAYABLE 5,532
OTHER PAYABLES AND 22,368
ACCRUED EXPENSES
TOTAL LIABILITIES 155,991
NET ASSETS $ 15,419,004
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 14,009,706
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME (37,480)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 402,102
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES 1,044,676
NET ASSETS $ 15,419,004
</TABLE>
CALCULATION OF MAXIMUM $12.88
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($1,206,871 (DIVIDED BY)
93,725 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.67
(100/94.25 OF $12.88)
CLASS T: $12.83
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($10,182,898 (DIVIDED BY)
793,875 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.30
(100/96.50 OF $12.83)
CLASS B: $12.79
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($1,793,873 (DIVIDED BY)
140,310 SHARES) A
CLASS C: $12.81
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($83,766 (DIVIDED BY) 6,539
SHARES) A
INSTITUTIONAL CLASS: $12.89
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($2,151,596 (DIVIDED BY) 166,970 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 56,662
DIVIDENDS
INTEREST 25,700
TOTAL INCOME 82,362
EXPENSES
MANAGEMENT FEE $ 36,215
TRANSFER AGENT FEES 17,614
DISTRIBUTION FEES 27,058
ACCOUNTING FEES AND EXPENSES 30,009
NON-INTERESTED TRUSTEES' COMPENSATION 19
CUSTODIAN FEES AND EXPENSES 3,351
REGISTRATION FEES 33,714
AUDIT 16,678
LEGAL 199
REPORTS TO SHAREHOLDERS 4,976
MISCELLANEOUS 51
TOTAL EXPENSES BEFORE REDUCTIONS 169,884
EXPENSE REDUCTIONS (52,797) 117,087
NET INVESTMENT INCOME (LOSS) (34,725)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 1,012,392
FOREIGN CURRENCY TRANSACTIONS 33 1,012,425
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 24,648
ASSETS AND LIABILITIES IN 45 24,693
FOREIGN CURRENCIES
NET GAIN (LOSS) 1,037,118
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,002,393
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (34,725) $ (36,592)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 1,012,425 919,965
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 24,693 1,019,983
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,002,393 1,903,356
DISTRIBUTIONS TO SHAREHOLDERS (2,755) -
IN EXCESS OF NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,430,596) (29,021)
TOTAL DISTRIBUTIONS (1,433,351) (29,021)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 5,657,382 8,310,212
REDEMPTION FEES 6,060 1,973
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,232,484 10,186,520
NET ASSETS
BEGINNING OF PERIOD 10,186,520 -
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF $37,480 AND
$0, RESPECTIVELY) $ 15,419,004 $ 10,186,520
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.48 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.10 3.60
TOTAL FROM INVESTMENT OPERATIONS 1.07 3.55
LESS DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.67) (.07)
TOTAL DISTRIBUTIONS (1.68) (.07)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.88 $ 13.48
TOTAL RETURN B, C 8.88% 35.68%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,207 $ 944
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.73% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.40)% A (.50)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
CLASS A SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON
WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES
AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.45 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) (.09)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.07 3.60
TOTAL FROM INVESTMENT OPERATIONS 1.03 3.51
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.66) (.06)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.83 $ 13.45
TOTAL RETURN B, C 8.57% 35.25%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 10,183 $ 7,314
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.98% A, G 1.97% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.63)% A (.83)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
CLASS T SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON
WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES
AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.42 $ 11.46
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.07) (.08)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.07 2.04
TOTAL FROM INVESTMENT OPERATIONS 1.00 1.96
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.64) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.79 $ 13.42
TOTAL RETURN B, C 8.34% 17.10%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,794 $ 596
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.48% A, G 2.46% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.11)% A (1.60)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF
CLASS B SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.66
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) .67
TOTAL FROM INVESTMENT OPERATIONS .64
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.49)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 12.81
TOTAL RETURN B, C 5.11%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 84
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.00)% A
PORTFOLIO TURNOVER 213% A
AVERAGE COMMISSION RATE H $ .0223
</TABLE>
A ANNUALIZED B T
HE TOTAL RETURN WOULD
HAVE BEEN LOWER HAD
CERTAIN EXPENSES NOT
BEEN REDUCED DURING
THE PERIOD SHOWN
(SEE NOTE 5 OF NOTES
TO FINANCIAL
STATEMENTS). C T
OTAL RETURNS DO NOT
INCLUDE THE
CONTINGENT DEFERRED
SALES CHARGE AND FOR
PERIODS OF LESS THAN
ONE YEAR ARE NOT
ANNUALIZED. D NET
INVESTMENT INCOME
(LOSS) PER SHARE HAS
BEEN CALCULATED
BASED ON AVERAGE
SHARES OUTSTANDING
DURING THE
PERIOD. E FOR THE
PERIOD NOVEMBER 3,
1997
(COMMENCEMENT OF
SALE OF CLASS C
SHARES) TO JANUARY
31,
1998. 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 (SEE NOTE 5
OF NOTES TO FINANCIAL
STATEMENTS). G F
MR 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.51 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.08 3.59
TOTAL FROM INVESTMENT OPERATIONS 1.07 3.58
LESS DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME (.02) -
FROM NET REALIZED GAIN (1.68) (.07)
TOTAL DISTRIBUTIONS (1.70) (.07)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.89 $ 13.51
TOTAL RETURN B, C 8.86% 35.98%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,152 $ 1,333
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.48% A, G 1.48% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.12)% A (.13)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</TABLE>
A ANNUALIZED B TOTAL RETURNS
FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED. C THE
TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). D NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO
JULY 31, 1997. 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 (SEE NOTE 5 OF NOTES TO
FINANCIAL
STATEMENTS). 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 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Consumer Industries 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 net operating losses and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $15,121,055 and $12,128,299, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. For the period, the management fee was
equivalent to an annualized rate of .60% of average net assets.
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% *
CLASS C 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 $ 1,229 $ 1,229
CLASS T 20,851 20,851
CLASS B 4,863 1,215
CLASS C 115 -
$ 27,058 $ 23,295
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $487
CLASS T $890
CLASS B $159
CLASS C $201
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 3,989 $ 3,176
CLASS T 6,810 4,729
CLASS B 927 0 *
CLASS C 11 0 *
$ 11,737 $ 7,905
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 1,617 .33 *
CLASS T FIIOC ** 12,308 .30 *
CLASS B FIIOC ** 1,914 .40 *
CLASS C FIIOC ** 76 .68 *
INSTITUTIONAL CLASS FIIOC ** 1,699 .18 *
$ 17,614
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $2,120 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 7,575
CLASS T 2.00% 18,541
CLASS B 2.50% 15,126
CLASS C 2.50% 3,529
INSTITUTIONAL CLASS 1.50% 6,820
$ 51,591
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 $1,206 under this arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
IN EXCESS OF NET INVESTMENT INCOME $ 723 $ -
FROM NET REALIZED GAIN 121,875 4,926
TOTAL $ 122,598 $ 4,926
CLASS T
FROM NET REALIZED GAIN $ 1,001,052 $ 16,753
CLASS B
FROM NET REALIZED GAIN $ 102,510 $ -
CLASS C
FROM NET REALIZED GAIN $ 1,954 $ -
INSTITUTIONAL CLASS
IN EXCESS OF NET INVESTMENT INCOME $ 2,032 $ -
FROM NET REALIZED GAIN 203,205 7,342
TOTAL $ 205,237 $ 7,342
$ 1,433,351 $ 29,021
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 23,874 88,027 $ 311,282 $ 950,592
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 9,124 457 113,019 4,913
SHARES REDEEMED (9,289) (18,468) (121,191) (227,830)
NET INCREASE (DECREASE) 23,709 70,016 $ 303,110 $ 727,675
CLASS T 280,817 629,432 $ 3,609,525 $ 7,025,043
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 73,835 1,492 913,447 16,036
SHARES REDEEMED (104,712) (86,989) (1,338,376) (987,625)
NET INCREASE (DECREASE) 249,940 543,935 $ 3,184,596 $ 6,053,454
CLASS B 90,531 45,607 $ 1,158,051 $ 545,925
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 7,684 - 94,935 -
SHARES REDEEMED (2,310) (1,202) (29,781) (13,641)
NET INCREASE (DECREASE) 95,905 44,405 $ 1,223,205 $ 532,284
CLASS C 6,697 - $ 86,473 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 43 - 542 -
SHARES REDEEMED (201) - (2,510) -
NET INCREASE (DECREASE) 6,539 - $ 84,505 $ -
INSTITUTIONAL CLASS 69,833 121,713 $ 889,749 $ 1,256,098
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 15,764 682 196,010 7,342
SHARES REDEEMED (17,305) (23,717) (223,793) (266,641)
NET INCREASE (DECREASE) 68,292 98,678 $ 861,966 $ 996,799
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,893
CLASS T 6,105
CLASS B 13,178
CLASS C 3,462
INSTITUTIONAL CLASS 5,076
$ 33,714
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CYCLICAL - CL A -1.92% 18.10% 36.44%
FIDELITY ADV CYCLICAL - CL A -7.56% 11.31% 28.59%
(INCL. 5.75% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CYCLICAL - CL A 18.10% 24.63%
FIDELITY ADV CYCLICAL - CL A 11.31% 19.51%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165519 S00000000000001
FA Cyclical Ind -CL A S&P 500
00184 SP001
1996/09/03 9425.00 10000.00
1996/09/30 9783.15 10516.69
1996/10/31 10065.90 10806.74
1996/11/30 10669.10 11623.62
1996/12/31 10612.70 11393.36
1997/01/31 10888.23 12105.21
1997/02/28 10916.74 12200.12
1997/03/31 10584.20 11698.81
1997/04/30 10745.72 12397.23
1997/05/31 11638.82 13151.98
1997/06/30 12246.89 13741.19
1997/07/31 13111.49 14834.57
1997/08/31 12826.45 14003.54
1997/09/30 13135.80 14770.51
1997/10/31 12290.57 14277.18
1997/11/30 12499.40 14938.07
1997/12/31 12592.62 15194.56
1998/01/30 12859.24 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165521 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Cyclical Industries - Class A on
September 3, 1996, when the fund started, and the current maximum
5.75% sales charge was paid. As the chart shows, by January 31, 1998,
the value of the investment would have grown to $12,859 - a 28.59%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 9.5
FORD MOTOR CO. 4.6
TYCO INTERNATIONAL LTD. 2.7
LOCKHEED MARTIN CORP. 2.5
FLUOR CORP. 2.1
HONEYWELL, INC. 2.1
XEROX CORP. 2.0
EMERSON ELECTRIC CO. 1.9
ALUMINUM CO. OF AMERICA 1.9
MINNESOTA MINING & MANUFACTURING CO. 1.9
TOP INDUSTRIES AS OF JANUARY 31, 1998
ELECTRICAL MACHINERY 13.4%
CHEMICALS 5.3%
MOTOR VEHICLES &
CAR BODIES 5.0%
AIR TRANSPORT,
MAJOR NATIONAL 4.7%
GENERAL INDUSTRIAL MACHINERY 4.4%
ALL OTHERS 67.2%
ROW: 1, COL: 1, VALUE: 67.2
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.7
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 5.3
ROW: 1, COL: 6, VALUE: 13.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CYCLICAL - CL T -1.93% 17.94% 36.14%
FIDELITY ADV CYCLICAL - CL T -5.36% 13.82% 31.37%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CYCLICAL - CL T 17.94% 24.44%
FIDELITY ADV CYCLICAL - CL T 13.82% 21.33%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165829 S00000000000001
FA Cyclical Ind -CL T S&P 500
00194 SP001
1996/09/03 9650.00 10000.00
1996/09/30 10016.70 10516.69
1996/10/31 10306.20 10806.74
1996/11/30 10923.80 11623.62
1996/12/31 10846.68 11393.36
1997/01/31 11138.52 12105.21
1997/02/28 11167.70 12200.12
1997/03/31 10817.49 11698.81
1997/04/30 10982.87 12397.23
1997/05/31 11897.30 13151.98
1997/06/30 12519.89 13741.19
1997/07/31 13395.40 14834.57
1997/08/31 13103.57 14003.54
1997/09/30 13410.13 14770.51
1997/10/31 12554.81 14277.18
1997/11/30 12768.64 14938.07
1997/12/31 12864.11 15194.56
1998/01/30 13137.15 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165831 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Cyclical Industries - Class T on
September 3, 1996, when the fund started, and the current maximum
3.50% sales charge was paid. As the chart shows, by January 31, 1998,
the value of the investment would have grown to $13,137 - a 31.37%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 9.5
FORD MOTOR CO. 4.6
TYCO INTERNATIONAL LTD. 2.7
LOCKHEED MARTIN CORP. 2.5
FLUOR CORP. 2.1
HONEYWELL, INC. 2.1
XEROX CORP. 2.0
EMERSON ELECTRIC CO. 1.9
ALUMINUM CO. OF AMERICA 1.9
MINNESOTA MINING & MANUFACTURING CO. 1.9
TOP INDUSTRIES AS OF JANUARY 31, 1998
ELECTRICAL MACHINERY 13.4%
CHEMICALS 5.3%
MOTOR VEHICLES &
CAR BODIES 5.0%
AIR TRANSPORT,
MAJOR NATIONAL 4.7%
GENERAL INDUSTRIAL MACHINERY 4.4%
ALL OTHERS 67.2%
ROW: 1, COL: 1, VALUE: 67.2
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.7
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 5.3
ROW: 1, COL: 6, VALUE: 13.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 March 3, 1997.
Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997
are those of Class T which bears a 0.50% 12b-1 fee. Had Class B's
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class B shares' contingent deferred sales charge included
in the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CYCLICAL - CL B -2.31% 17.31% 35.41%
FIDELITY ADV CYCLICAL - CL B -6.83% 12.31% 31.41%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CYCLICAL - CL B 17.31% 23.97%
FIDELITY ADV CYCLICAL - CL B 12.31% 21.36%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 162302 S00000000000001
FA Cyclical Ind -CL B S&P 500
00234 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10380.00 10516.69
1996/10/31 10680.00 10806.74
1996/11/30 11320.00 11623.62
1996/12/31 11240.08 11393.36
1997/01/31 11542.50 12105.21
1997/02/28 11572.75 12200.12
1997/03/31 11209.84 11698.81
1997/04/30 11381.21 12397.23
1997/05/31 12318.73 13151.98
1997/06/30 12953.82 13741.19
1997/07/31 13861.09 14834.57
1997/08/31 13548.58 14003.54
1997/09/30 13866.28 14770.51
1997/10/31 12958.74 14277.18
1997/11/30 13169.80 14938.07
1997/12/31 13268.76 15194.56
1998/01/30 13141.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 162303 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Cyclical Industries - Class B on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $13,141 - a
31.41% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 9.5
FORD MOTOR CO. 4.6
TYCO INTERNATIONAL LTD. 2.7
LOCKHEED MARTIN CORP. 2.5
FLUOR CORP. 2.1
HONEYWELL, INC. 2.1
XEROX CORP. 2.0
EMERSON ELECTRIC CO. 1.9
ALUMINUM CO. OF AMERICA 1.9
MINNESOTA MINING & MANUFACTURING CO. 1.9
TOP INDUSTRIES AS OF JANUARY 31, 1998
ELECTRICAL MACHINERY 13.4%
CHEMICALS 5.3%
MOTOR VEHICLES &
CAR BODIES 5.0%
AIR TRANSPORT,
MAJOR NATIONAL 4.7%
GENERAL INDUSTRIAL MACHINERY 4.4%
ALL OTHERS 67.2%
ROW: 1, COL: 1, VALUE: 67.2
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.7
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 5.3
ROW: 1, COL: 6, VALUE: 13.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CYCLICAL - CL C -2.40% 17.21% 35.29%
FIDELITY ADV CYCLICAL - CL C -3.35% 16.21% 35.29%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CYCLICAL - CL C 17.21% 23.89%
FIDELITY ADV CYCLICAL - CL C 16.21% 23.89%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165738 S00000000000001
FA Cyclical Ind -CL C S&P 500
00283 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10380.00 10516.69
1996/10/31 10680.01 10806.74
1996/11/30 11320.00 11623.62
1996/12/31 11240.09 11393.36
1997/01/31 11542.51 12105.21
1997/02/28 11572.75 12200.12
1997/03/31 11209.84 11698.81
1997/04/30 11381.21 12397.23
1997/05/31 12318.73 13151.98
1997/06/30 12953.82 13741.19
1997/07/31 13861.09 14834.57
1997/08/31 13548.58 14003.54
1997/09/30 13866.28 14770.51
1997/10/31 12958.75 14277.18
1997/11/30 13169.84 14938.07
1997/12/31 13257.55 15194.56
1998/01/30 13528.56 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165740 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Cyclical Industries - Class C on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $13,529 - a
35.29% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 9.5
FORD MOTOR CO. 4.6
TYCO INTERNATIONAL LTD. 2.7
LOCKHEED MARTIN CORP. 2.5
FLUOR CORP. 2.1
HONEYWELL, INC. 2.1
XEROX CORP. 2.0
EMERSON ELECTRIC CO. 1.9
ALUMINUM CO. OF AMERICA 1.9
MINNESOTA MINING & MANUFACTURING CO. 1.9
TOP INDUSTRIES AS OF JANUARY 31, 1998
ELECTRICAL MACHINERY 13.4%
CHEMICALS 5.3%
MOTOR VEHICLES &
CAR BODIES 5.0%
AIR TRANSPORT,
MAJOR NATIONAL 4.7%
GENERAL INDUSTRIAL MACHINERY 4.4%
ALL OTHERS 67.2%
ROW: 1, COL: 1, VALUE: 67.2
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.7
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 5.3
ROW: 1, COL: 6, VALUE: 13.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CYCLICAL INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An Interview with
Albert Ruback, Portfolio Manager of Fidelity
Advisor Cyclical
Industries Fund
Q. HOW DID THE FUND PERFORM, ALBERT?
A. For the six-month period ending January 31, 1998, the fund's Class
A, Class T, Class B and Class C shares returned -1.92%, -1.93%, -2.31%
and -2.40%, respectively. By comparison, the Standard & Poor's 500
Index was up 3.56% over the same time frame. For the 12 month period
ending January 31, 1998, the fund's Class A, Class T, Class B and
Class C shares had returns of 18.10%, 17.94%, 17.31% and 17.21%,
respectively. During that same period, the S&P 500 returned 26.91%.
Q. WHY DID THE FUND'S PERFORMANCE LAG THAT OF THE S&P 500?
A. The biggest surprise for me was the magnitude of the impact from
concerns in the Asian Pacific. The fund's holdings in paper and
aluminum companies - such as Aluminum Company of America - took a hit
over concerns about diminished demand in that region. Any slight
change in customer demand can reduce commodity prices, which is then
reflected in stock performance, and so aluminum and paper stocks
suffered. These stocks have come back lately, however. While I have
trimmed back a little in paper stocks, I have maintained my conviction
and continue to hold aluminum stocks.
Q. WHAT ARE YOU LOOKING FOR IN TODAY'S MARKET?
A. Increasingly, I am looking for stability of earnings. So, for
example, I like companies that will benefit from the health of the
aerospace sector. I want companies that have more predictable
earnings. The mainstays in aerospace would be Textron, for example,
which saw a huge improvement in demand, or Gulfstream. These companies
should benefit from any improvement in the aerospace cycle, especially
in smaller niches such as business jets.
Q. YOU'RE A VALUE INVESTOR. IS IT HARDER TO BE VALUE-ORIENTED GIVEN
THE STATE OF THE MARKET TODAY?
A. It is more challenging. I have to be more selective. I have changed
my orientation towards what I consider value in today's market. Now, I
look at stocks more on a relative basis to the overall market
valuation, whereas I used to look at them almost entirely on an
absolute basis. So when I analyze a stock now, I look at it relative
to its industry, to other stocks within the general sector, and to the
overall market. An example of this orientation would be Textron. Over
the past seven years, the company's earnings growth has been better
than the earnings growth of the market. And yet, the stock is still
trading at a thirty percent discount to the market. So even though it
is at the high end of its historical range, I don't believe it should
be trading at such a discount. I think it should be trading at least
at parity if not at a premium.
Q. I SEE THAT SOME OF YOUR LARGEST HOLDINGS HAVEN'T CHANGED DURING THE
PAST SIX MONTHS. WHY IS THAT?
A. I choose stocks for the long term. That is the case with a stock
like General Electric, which is the largest holding in the fund. In
terms of earnings predictability, the company has a long history of
meeting shareholder expectations. Because GE has been very
conservative financially and hedges its currency exposure, at the end
of the period it appeared to have minimal exposure from the Asian
Pacific crisis. Also, it was in the midst of a significant cost-
reduction effort called the Six Sigma effort that aimed to potentially
double current earnings over the period of a couple of years. Ford,
which also has been in a major cost reduction effort, is a company
whose stock I have been acquiring recently. While I am concerned about
the overall auto cycle, Ford appeared to be well positioned because of
cost-reduction efforts and an aggressive stock buyback program. It
also plans to launch some attractive vehicles soon.
Q. DO YOU SEE ANY OTHER SHIFTS IN STRATEGY OVER THE NEXT SIX MONTHS?
A. I am looking for two types of companies: those that are doing a
good job of growing their unit sales, and those that are seemingly at
their capacity, which will enable them to get price improvements. A
good example of a company that was growing its unit sales at the end
of the period is the specialty chemical company Cytec.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$4 million
MANAGER: Albert Ruback, since inception;
joined Fidelity in 1991
(checkmark)
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 6.9%
AIRCRAFT - 3.0%
Gulfstream Aerospace Corp. (a) 700 $ 23,832
Lockheed Martin Corp. 1,057 109,994
133,826
AIRCRAFT & PARTS - 2.1%
Precision Castparts Corp. 200 10,425
Sundstrand Corp. 400 21,775
Textron, Inc. 1,000 59,813
92,013
AIRCRAFT EQUIPMENT - 0.4%
Aviall, Inc. (a) 500 7,375
Fairchild Corp. Class A (a) 500 10,188
17,563
MISSILES & SPACE VEHICLES - 1.0%
Alliant Techsystems, Inc. (a) 400 23,775
Thiokol Corp. 250 21,563
45,338
ORDNANCE - 0.4%
Harsco Corp. 400 16,225
TOTAL AEROSPACE & DEFENSE 304,965
AIR TRANSPORTATION - 4.7%
AIR TRANSPORT, MAJOR NATIONAL - 4.7%
AMR Corp. (a) 500 63,125
Alaska Air Group, Inc. 1,000 48,563
America West Holding Corp. Class B (a) 900 19,631
Continental Airlines, Inc. Class B (a) 500 23,188
Southwest Airlines Co. 1,100 28,669
US Airways Group, Inc. (a) 400 24,375
207,551
AUTOS, TIRES, & ACCESSORIES - 8.1%
AUTO & TRUCK PARTS - 2.8%
Borg-Warner Automotive, Inc. 200 10,713
Cummins Engine Co., Inc. 300 16,050
Eaton Corp. 200 17,950
SPX Corp. 600 43,800
TRW, Inc. 500 25,438
Wynn's International, Inc. 450 10,266
124,217
MOTOR VEHICLES & CAR BODIES - 5.0%
Ford Motor Co. 4,000 204,000
Lear Corp. (a) 300 14,906
218,906
TIRES & INNER TUBES - 0.3%
Goodyear Tire & Rubber Co. 200 12,525
TOTAL AUTOS, TIRES, & ACCESSORIES 355,648
BROADCASTING - 1.8%
TELEVISION BROADCASTING - 1.8%
CBS Corp. 2,600 77,838
BUILDING MATERIALS - 3.2%
AIR-CONDITIONING EQUIPMENT - 1.1%
American Standard Companies, Inc. (a) 1,200 48,075
CEMENT - 0.4%
Southdown, Inc. 300 18,919
CONCRETE, GYPSUM, PLASTER - 0.2%
USG Corp. (a) 200 10,525
SHARES VALUE (NOTE 1)
PAINT & VARNISH - 0.6%
Lilly Industrial Coatings, Inc. Class A 900 $ 16,313
Sherwin-Williams Co. 300 8,550
24,863
PLUMBING SUPPLIES - WHOLESALE - 0.9%
Masco Corp. 800 39,400
TOTAL BUILDING MATERIALS 141,782
CHEMICALS & PLASTICS - 9.4%
ADHESIVES & SEALANTS - 0.9%
Ferro Corp. 800 19,750
Nalco Chemical Co. 500 18,750
38,500
AGRICULTURAL CHEMICALS - 0.3%
OM Group, Inc. 300 11,494
CHEMICALS - 5.3%
Cytec Industries, Inc. (a) 900 46,294
du Pont (E.I.) de Nemours & Co. 800 45,300
Goodrich (B.F.) Co. 140 5,871
Monsanto Co. 1,600 75,900
NL Industries, Inc. (a) 1,000 17,813
Witco Corp. 1,100 44,550
235,728
INDUSTRIAL GASES - 0.5%
Air Products & Chemicals, Inc. 300 24,019
PLASTICS & SYNTHETIC RESINS - 0.5%
Solutia, Inc. 360 10,058
Spartech Corp. 700 11,288
21,346
PLASTICS, NEC - 1.1%
Ivex Packaging Corp. 2,200 46,200
UNSUPPORTED PLASTICS FILM & SHEET - 0.8%
W.R. Grace & Co. 300 23,569
Sealed Air Corp. (a) 200 12,575
36,144
TOTAL CHEMICALS & PLASTICS 413,431
COMPUTERS & OFFICE EQUIPMENT - 2.8%
OFFICE AUTOMATION - 2.8%
Pitney Bowes, Inc. 800 36,700
Xerox Corp. 1,100 88,413
125,113
CONSTRUCTION - 2.2%
GENERAL BUILDING - 0.2%
Toll Brothers, Inc. (a) 400 11,150
MOBILE HOMES - 0.6%
Oakwood Homes Corp. 700 25,156
OPERATIVE BUILDERS - 1.4%
Centex Corp. 200 12,550
Kaufman & Broad Home Corp. 500 12,875
Lennar Corp. 500 12,281
U.S. Home Corp. (a) 600 22,763
60,469
TOTAL CONSTRUCTION 96,775
CONSUMER DURABLES - 1.9%
MANUFACTURING INDUSTRIES, NEC - 1.9%
Minnesota Mining & Manufacturing Co. 1,000 83,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSUMER ELECTRONICS - 1.2%
APPLIANCES - 0.9%
Black & Decker Corp. 300 $ 14,456
Maytag Co. 600 23,063
37,519
RADIOS, TELEVISIONS, STEREOS - 0.3%
General Motors Corp. Class H 400 13,850
TOTAL CONSUMER ELECTRONICS 51,369
DEFENSE ELECTRONICS - 3.9%
Litton Industries, Inc. (a) 900 53,438
Northrop Grumman Corp. 500 61,313
Raytheon Co.:
Class A 281 14,366
Class B 800 41,700
170,817
ELECTRICAL EQUIPMENT - 13.9%
ELECTRICAL MACHINERY - 13.4%
Emerson Electric Co. 1,400 84,700
General Electric Co. 5,400 418,500
Honeywell, Inc. 1,300 91,081
594,281
ELECTRICAL, INDUSTRIAL APPARATUS - 0.5%
Hubbell, Inc. Class B 400 20,025
TOTAL ELECTRICAL EQUIPMENT 614,306
ELECTRONIC INSTRUMENTS - 1.1%
MEASURING INSTRUMENTS - 1.1%
Thermo Electron Corp. (a) 1,300 50,700
ENGINEERING - 2.3%
ARCHITECTS & ENGINEERS - 2.3%
EG & G, Inc. 400 9,650
Fluor Corp. 2,500 94,219
103,869
HOLDING COMPANIES - 1.0%
HOLDING COMPANY OFFICES, NEC - 1.0%
Norfolk Southern Corp. 1,400 44,188
INDUSTRIAL MACHINERY & EQUIPMENT - 6.7%
ACCESSORIES, MEASURING DEVICES & CUTTING TOOLS - 0.2%
Stanley Works 200 8,850
CONSTRUCTION EQUIPMENT - 1.2%
Caterpillar, Inc. 1,100 52,800
FARM MACHINERY & EQUIPMENT - 0.9%
Case Corp. 700 40,819
GENERAL INDUSTRIAL MACHINERY - 4.4%
Illinois Tool Works, Inc. 700 38,981
Ingersoll-Rand Co. 900 35,775
Tyco International Ltd. 2,700 119,813
194,569
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 297,038
IRON & STEEL - 2.4%
BLAST FURNACES - 0.5%
Steel Dynamics, Inc. (a) 1,100 22,000
FABRICATED METAL PRODUCTS - 0.6%
Aeroquip Vickers, Inc. 200 10,000
SPS Technologies, Inc. (a) 400 16,275
26,275
SHARES VALUE (NOTE 1)
IRON & STEEL BLAST FURNACES, MILLS - 0.8%
Inland Steel Industries, Inc. 800 $ 15,950
Nucor Corp. 400 19,050
35,000
IRON & STEEL FOUNDRIES - 0.5%
Dofasco Inc. 1,300 22,328
TOTAL IRON & STEEL 105,603
LEASING & RENTAL - 0.2%
EQUIPMENT RENTAL & LEASING, NEC - 0.2%
Ryder Systems, Inc. 250 8,375
METALS & MINING - 5.9%
ALUMINUM, EXTRUDED PRODUCTS - 0.6%
Alumax, Inc. (a) 800 27,850
METAL MINING - 0.5%
Phelps Dodge Corp. 300 19,763
METAL ORES - 0.2%
Pechiney SA Class A 200 7,841
METALS & MINERALS - WHOLESALE - 0.2%
Elkem ASA 800 10,487
NON-METALLIC MINERAL MINING - 0.2%
Martin Marietta Materials, Inc. 274 10,412
NONFERROUS ROLLING & DRAWING - 1.0%
Superior Telecom, Inc. (a) 1,100 43,450
PRIMARY PRODUCTION OF ALUMINUM - 0.6%
Reynolds Metals Co. 400 25,225
PRIME NONFERROUS SMELTING - 2.6%
Alcan Aluminium Ltd. 1,100 32,723
Aluminum Co. of America 1,100 84,013
116,736
TOTAL METALS & MINING 261,764
PACKAGING & CONTAINERS - 1.1%
GLASS CONTAINERS - 0.4%
Owens-Illinois, Inc. (a) 500 18,188
METAL CANS & CONTAINERS - 0.7%
Silgan Holdings, Inc. 1,100 30,388
TOTAL PACKAGING & CONTAINERS 48,576
PAPER & FOREST PRODUCTS - 3.2%
PAPER - 2.2%
Champion International Corp. 400 20,475
Stone Container Corp. (a) 1,400 17,850
Temple-Inland, Inc. 400 22,200
Union Camp Corp. 400 22,875
Willamette Industries, Inc. 500 16,750
100,150
PAPER MILLS - 1.0%
Fort James Corp. 1,000 42,938
TOTAL PAPER & FOREST PRODUCTS 143,088
POLLUTION CONTROL - 2.9%
POLLUTION EQUIPMENT & DESIGN - 0.5%
Ogden Corp. 800 20,050
REFUSE SYSTEMS - 1.6%
Browning-Ferris Industries, Inc. 900 31,106
Eastern Environmental Services Inc. 1,000 24,750
Waste Management, Inc. 600 14,100
69,956
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
POLLUTION CONTROL - CONTINUED
SANITARY SERVICES - 0.8%
USA Waste Services, Inc. (a) 992 $ 36,456
TOTAL POLLUTION CONTROL 126,462
PRINTING - 0.4%
COMMERCIAL PRINTING, NEC - 0.4%
Deluxe Corp. 500 16,500
RAILROADS - 2.8%
RAILROAD EQUIPMENT - 0.4%
Bombardier, Inc. Class B 800 15,444
RAILROADS - 2.4%
CSX Corp. 1,100 58,300
Canadian National Railway Co. 1,000 49,947
108,247
TOTAL RAILROADS 123,691
SHIP BUILDING & REPAIR - 1.2%
SHIP BUILDERS - 1.2%
Avondale Industries, Inc. (a) 1,000 28,281
General Dynamics Corp. 200 17,250
Newport News Shipbuilding, Inc. 400 10,050
55,581
TEXTILES & APPAREL - 0.5%
COTTON MILLS - 0.1%
Galey & Lord, Inc. (a) 400 6,375
TEXTILE MILL PRODUCTS - 0.4%
Unifi, Inc. 400 16,400
TOTAL TEXTILES & APPAREL 22,775
TRUCKING & FREIGHT - 1.9%
AIR COURIER SERVICES - 0.3%
CNF Transportation, Inc. 300 13,706
FREIGHT FORWARDING - 0.4%
Air Express International Corp. 300 7,969
Expeditors International
of Washington, Inc. 300 9,338
17,307
TRUCKING, LOCAL & LONG DISTANCE - 0.4%
Werner Enterprises, Inc. 800 18,400
TRUCKING, LONG DISTANCE - 0.8%
USFreightways Corp. 400 14,000
Yellow Corp. (a) 800 20,900
34,900
TOTAL TRUCKING & FREIGHT 84,313
TOTAL COMMON STOCKS
(Cost $3,766,934) 4,135,618
CASH EQUIVALENTS - 6.4%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b) 243,678 $ 243,678
MATURITY
AMOUNT
Investments in repurchase agreements
U.S. Treasury obligations), in a joint
trading account at 5.59%, dated
1/30/98 due 2/2/98 $ 41,019 41,000
TOTAL CASH EQUIVALENTS
(Cost $284,678) 284,678
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,051,612) $ 4,420,296
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $4,056,189. Net unrealized appreciation
aggregated $364,107, of which $483,468 related to appreciated
investment securities and $119,361 related to depreciated investment
securities.
ADVISOR CYCLICAL INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE AGREEMENTS OF $41,000) (COST $4,051,612) - SEE $
4,420,296
ACCOMPANYING SCHEDULE
CASH 37
RECEIVABLE FOR INVESTMENTS SOLD
110,206
RECEIVABLE FOR FUND SHARES SOLD
13,719
DIVIDENDS RECEIVABLE 2,857
INTEREST RECEIVABLE 1,259
PREPAID EXPENSES
11,013
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 9,936
TOTAL ASSETS
4,569,323
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 66,186
PAYABLE FOR FUND SHARES REDEEMED 10
DISTRIBUTION FEES PAYABLE 1,383
OTHER PAYABLES AND ACCRUED EXPENSES 82,336
TOTAL LIABILITIES
149,915
NET ASSETS $
4,419,408
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
3,973,982
ACCUMULATED NET INVESTMENT
(5,182)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
81,927
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
368,681
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
4,419,408
</TABLE>
CALCULATION OF MAXIMUM $12.54
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($393,570 (DIVIDED BY)
31,376 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/94.25 OF $12.54) $13.31
CLASS T: $12.51
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($2,348,216 (DIVIDED BY)
187,740 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $12.96
(100/96.50 OF $12.51)
CLASS B: $12.44
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($455,633 (DIVIDED BY) 36,628
SHARES) A
CLASS C: $12.48
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($41,069 (DIVIDED BY) 3,290
SHARES) A
INSTITUTIONAL CLASS: $12.64
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($1,180,920 (DIVIDED BY) 93,424 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 29,716
DIVIDENDS
INTEREST 8,290
TOTAL INCOME 38,006
EXPENSES
MANAGEMENT FEE $ 14,033
TRANSFER AGENT FEES 7,115
DISTRIBUTION FEES 7,906
ACCOUNTING FEES AND EXPENSES 30,004
NON-INTERESTED TRUSTEES' COMPENSATION 9
CUSTODIAN FEES AND EXPENSES 2,841
REGISTRATION FEES 32,690
AUDIT 15,875
LEGAL 86
REPORTS TO SHAREHOLDERS 2,707
MISCELLANEOUS 38
TOTAL EXPENSES BEFORE REDUCTIONS 113,304
EXPENSE REDUCTIONS (70,116) 43,188
NET INVESTMENT INCOME (LOSS) (5,182)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 231,436
FOREIGN CURRENCY TRANSACTIONS (19) 231,417
CHANGE IN NET UNREALIZED
APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (381,220)
ASSETS AND LIABILITIES IN 4 (381,216)
FOREIGN CURRENCIES
NET GAIN (LOSS) (149,799)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (154,981)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (5,182) $ 4,855
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 231,417 473,715
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (381,216) 749,897
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (154,981) 1,228,467
DISTRIBUTIONS TO SHAREHOLDERS - (10,690)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (348,447) (45,982)
TOTAL DISTRIBUTIONS (348,447) (56,672)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 624,706 3,118,751
REDEMPTION FEES 5,442 2,142
TOTAL INCREASE (DECREASE) IN NET ASSETS 126,720 4,292,688
NET ASSETS
BEGINNING OF PERIOD 4,292,688 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $5,182 AND $0, RESPECTIVELY) $ 4,419,408 $ 4,292,688
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.80 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.27) 3.89
TOTAL FROM INVESTMENT OPERATIONS (.28) 3.88
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01)
FROM NET REALIZED GAIN (.99) (.08)
TOTAL DISTRIBUTIONS (.99) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.54 $ 13.80
TOTAL RETURN B, C (1.92)% 39.11%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 393 $ 365
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.74% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.13)% A (.09)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD
SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.77 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02) (.04)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.26) 3.89
TOTAL FROM INVESTMENT OPERATIONS (.28) 3.85
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01)
FROM NET REALIZED GAIN (.99) (.08)
TOTAL DISTRIBUTIONS (.99) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.51 $ 13.77
TOTAL RETURN B, C (1.93)% 38.81%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,348 $ 1,920
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.99% A, G 1.97% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.39)% A (.37)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD
SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.75 $ 11.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06) (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.27) 2.25
TOTAL FROM INVESTMENT OPERATIONS (.33) 2.19
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.99) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.44 $ 13.75
TOTAL RETURN B, C (2.31)% 18.94%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 456 $ 252
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.50% A 2.45% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.89)% A (1.11)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY
31, 1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES. H 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.54
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) .34
TOTAL FROM INVESTMENT OPERATIONS .31
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.38)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01
NET ASSET VALUE, END OF PERIOD $ 12.48
TOTAL RETURN B, C 2.64%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 41
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.97)% A
PORTFOLIO TURNOVER 142% A
AVERAGE COMMISSION RATE G $ .0239
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
JANUARY 31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
G 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.84 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .01 .03
NET REALIZED AND UNREALIZED GAIN (LOSS) (.28) 3.91
TOTAL FROM INVESTMENT OPERATIONS (.27) 3.94
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.02)
FROM NET REALIZED GAIN (.95) (.08)
TOTAL DISTRIBUTIONS (.95) (.10)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .02 -
NET ASSET VALUE, END OF PERIOD $ 12.64 $ 13.84
TOTAL RETURN B, C (1.76)% 39.64%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,181 $ 1,756
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.49% A, G 1.48% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .11% A .25% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO JULY 31, 1997. 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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Cyclical Industries 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss 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.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,290,989 and $3,073,926, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
an annualized rate of .59% of average net assets.
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% *
CLASS C 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 $ 456 $ 456
CLASS T 5,847 5,847
CLASS B 1,555 389
CLASS C 48 -
$ 7,906 $ 6,692
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A 181
CLASS T 291
CLASS B 42
CLASS C 77
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 584 $ 328
CLASS T 1,942 804
CLASS B 0 0*
CLASS C 0 0*
$ 2,526 $ 1,132
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 849 .46 *
CLASS T FIIOC ** 4,007 .34 *
CLASS B FIIOC ** 808 .55 *
CLASS C FIIOC ** 54 1.19 *
INSTITUTIONAL CLASS FIIOC ** 1,397 .16 *
$ 7,115
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $568 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 8,976
CLASS T 2.00% 24,659
CLASS B 2.50% 15,670
CLASS C 2.50% 3,610
INSTITUTIONAL CLASS 1.50% 17,067
$ 69,982
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 $134 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR was record owner of approximately 34% of
the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
FROM NET INVESTMENT INCOME $ - $ 210
FROM NET REALIZED GAIN 27,503 1,679
TOTAL $ 27,503 $ 1,889
CLASS T
FROM NET INVESTMENT INCOME $ - $ 596
FROM NET REALIZED GAIN 168,735 4,766
TOTAL $ 168,735 $ 5,362
CLASS B
FROM NET REALIZED GAIN $ 21,647 $ -
CLASS C
FROM NET REALIZED GAIN $ 303 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ - $ 9,884
FROM NET REALIZED GAIN 130,259 39,537
TOTAL $ 130,259 $ 49,421
$ 348,447 $ 56,672
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 4,506 29,864 $ 57,055 $ 317,058
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2,141 169 27,217 1,885
SHARES REDEEMED (1,681) (3,623) (20,860) (42,214)
NET INCREASE (DECREASE) 4,966 26,410 $ 63,412 $ 276,729
CLASS T 127,608 159,328 $ 1,654,772 $ 1,808,520
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 12,558 440 158,925 4,903
SHARES REDEEMED (91,827) (20,367) (1,153,137) (254,181)
NET INCREASE (DECREASE) 48,339 139,401 $ 660,560 $ 1,559,242
CLASS B 16,600 18,329 $ 207,211 $ 222,169
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,702 - 21,404 -
SHARES REDEEMED (3) - (34) -
NET INCREASE (DECREASE) 18,299 18,329 $ 228,581 $ 222,169
CLASS C 3,265 - $ 39,782 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 25 - 303 -
NET INCREASE (DECREASE) 3,290 - $ 40,085 $ -
INSTITUTIONAL CLASS 24,071 595,951 $ 323,486 $ 6,237,387
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 10,114 4,432 129,319 49,421
SHARES REDEEMED (67,641) (473,503) (820,737) (5,226,197)
NET INCREASE (DECREASE) (33,456) 126,880 $ (367,932) $ 1,060,611
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,755
CLASS T 5,605
CLASS B 12,737
CLASS C 3,464
INSTITUTIONAL CLASS 5,129
$ 32,690
ADVISOR FINANCIAL SERVICES FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV FINANCIAL - CL A 7.11% 31.37% 62.12%
FIDELITY ADV FINANCIAL - CL A 0.95% 23.82% 52.80%
(INCL. 5.75% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV FINANCIAL - CL A 31.37% 40.84%
FIDELITY ADV FINANCIAL - CL A 23.82% 35.05%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 102748 S00000000000001
FA Financial Serv -CL A S&P 500
00183 SP001
1996/09/03 9425.00 10000.00
1996/09/30 10009.35 10516.69
1996/10/31 10546.58 10806.74
1996/11/30 11385.40 11623.62
1996/12/31 11045.81 11393.36
1997/01/31 11631.15 12105.21
1997/02/28 11772.76 12200.12
1997/03/31 10932.52 11698.81
1997/04/30 11829.41 12397.23
1997/05/31 12282.57 13151.98
1997/06/30 12915.11 13741.19
1997/07/31 14265.15 14834.57
1997/08/31 13424.91 14003.54
1997/09/30 14285.27 14770.51
1997/10/31 14200.07 14277.18
1997/11/30 14673.41 14938.07
1997/12/31 15481.66 15194.56
1998/01/30 15279.73 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 102750 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Financial Services - Class A on September
3, 1996, when the fund started, and the current maximum 5.75% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $15,280 - a 52.80% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
NATIONSBANK CORP. 4.3
BANC ONE CORP. 4.1
U.S. BANCORP 4.0
CITICORP 3.9
BANK OF NEW YORK CO., INC. 3.4
BANKAMERICA CORP. 3.3
ALLSTATE CORP. 3.2
AMERICAN EXPRESS CO. 3.1
AMERICAN INTERNATIONAL GROUP, INC. 3.1
FANNIE MAE 2.8
TOP INDUSTRIES AS OF JANUARY 31, 1998
NATIONAL COMMERCIAL BANKS 31.8%
PROPERTY-CASUALTY &
REINSURANCE 14.6%
FINANCIAL SERVICES 5.9%
PERSONAL CREDIT INSTITUTIONS 5.9%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 5.6%
ALL OTHERS 36.2%
ROW: 1, COL: 1, VALUE: 36.2
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 5.9
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 14.6
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR FINANCIAL SERVICES FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV FINANCIAL - CL T 6.99% 31.08% 61.51%
FIDELITY ADV FINANCIAL - CL T 3.25% 26.50% 55.85%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV FINANCIAL - CL T 31.08% 40.46%
FIDELITY ADV FINANCIAL - CL T 26.50% 36.96%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 103428 S00000000000001
FA Financial Serv -CL T S&P 500
00193 SP001
1996/09/03 9650.00 10000.00
1996/09/30 10238.65 10516.69
1996/10/31 10788.70 10806.74
1996/11/30 11647.55 11623.62
1996/12/31 11299.87 11393.36
1997/01/31 11889.52 12105.21
1997/02/28 12024.84 12200.12
1997/03/31 11164.55 11698.81
1997/04/30 12082.84 12397.23
1997/05/31 12546.82 13151.98
1997/06/30 13184.80 13741.19
1997/07/31 14567.07 14834.57
1997/08/31 13706.78 14003.54
1997/09/30 14587.38 14770.51
1997/10/31 14500.21 14277.18
1997/11/30 14974.83 14938.07
1997/12/31 15791.84 15194.56
1998/01/30 15585.35 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 103431 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Financial Services - Class T on September
3, 1996, when the fund started, and the current maximum 3.50% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $15,585 - a 55.85% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
NATIONSBANK CORP. 4.3
BANC ONE CORP. 4.1
U.S. BANCORP 4.0
CITICORP 3.9
BANK OF NEW YORK CO., INC. 3.4
BANKAMERICA CORP. 3.3
ALLSTATE CORP. 3.2
AMERICAN EXPRESS CO. 3.1
AMERICAN INTERNATIONAL GROUP, INC. 3.1
FANNIE MAE 2.8
TOP INDUSTRIES AS OF JANUARY 31, 1998
NATIONAL COMMERCIAL BANKS 31.8%
PROPERTY-CASUALTY &
REINSURANCE 14.6%
FINANCIAL SERVICES 5.9%
PERSONAL CREDIT INSTITUTIONS 5.9%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 5.6%
ALL OTHERS 36.2%
ROW: 1, COL: 1, VALUE: 36.2
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 5.9
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 14.6
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR FINANCIAL SERVICES FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 March 3, 1997.
Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997
are those of Class T which bears a 0.50% 12b-1 fee. Had Class B's
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class B shares' contingent deferred sales charge included
in the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the past one year and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV FINANCIAL - CL B 6.68% 30.45% 60.72%
FIDELITY ADV FINANCIAL - CL B 1.68% 25.45% 56.72%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV FINANCIAL - CL B 30.45% 39.97%
FIDELITY ADV FINANCIAL - CL B 25.45% 37.50%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 162904 S00000000000001
FA Financial Serv -CL B S&P 500
00163 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10610.00 10516.69
1996/10/31 11180.00 10806.74
1996/11/30 12070.00 11623.62
1996/12/31 11709.71 11393.36
1997/01/31 12320.74 12105.21
1997/02/28 12460.98 12200.12
1997/03/31 11569.48 11698.81
1997/04/30 12511.06 12397.23
1997/05/31 12991.87 13151.98
1997/06/30 13642.97 13741.19
1997/07/31 15065.36 14834.57
1997/08/31 14173.86 14003.54
1997/09/30 15067.02 14770.51
1997/10/31 14976.56 14277.18
1997/11/30 15459.02 14938.07
1997/12/31 16306.56 15194.56
1998/01/30 15672.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 162905 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Financial Services - Class B on September
3, 1996, when the fund started. As the chart shows, by January 31,
1998, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $15,672 - a
56.72% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
NATIONSBANK CORP. 4.3
BANC ONE CORP. 4.1
U.S. BANCORP 4.0
CITICORP 3.9
BANK OF NEW YORK CO., INC. 3.4
BANKAMERICA CORP. 3.3
ALLSTATE CORP. 3.2
AMERICAN EXPRESS CO. 3.1
AMERICAN INTERNATIONAL GROUP, INC. 3.1
FANNIE MAE 2.8
TOP INDUSTRIES AS OF JANUARY 31, 1998
NATIONAL COMMERCIAL BANKS 31.8%
PROPERTY-CASUALTY &
REINSURANCE 14.6%
FINANCIAL SERVICES 5.9%
PERSONAL CREDIT INSTITUTIONS 5.9%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 5.6%
ALL OTHERS 36.2%
ROW: 1, COL: 1, VALUE: 36.2
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 5.9
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 14.6
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR FINANCIAL SERVICES FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV FINANCIAL - CL C 6.60% 30.34% 60.59%
FIDELITY ADV FINANCIAL - CL C 5.60% 29.34% 60.59%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV FINANCIAL - CL C 30.34% 39.89%
FIDELITY ADV FINANCIAL - CL C 29.34% 39.89%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 103427 S00000000000001
FA Financial Serv -CL C S&P 500
00284 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10610.00 10516.69
1996/10/31 11179.99 10806.74
1996/11/30 12069.99 11623.62
1996/12/31 11709.71 11393.36
1997/01/31 12320.74 12105.21
1997/02/28 12460.97 12200.12
1997/03/31 11569.47 11698.81
1997/04/30 12511.06 12397.23
1997/05/31 12991.87 13151.98
1997/06/30 13642.97 13741.19
1997/07/31 15065.35 14834.57
1997/08/31 14173.85 14003.54
1997/09/30 15067.01 14770.51
1997/10/31 14976.55 14277.18
1997/11/30 15468.24 14938.07
1997/12/31 16292.55 15194.56
1998/01/30 16069.09 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 103432 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Financial Services - Class C on September
3, 1996, when the fund started. As the chart shows, by January 31,
1998, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $16,059 - a
60.59% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
NATIONSBANK CORP. 4.3
BANC ONE CORP. 4.1
U.S. BANCORP 4.0
CITICORP 3.9
BANK OF NEW YORK CO., INC. 3.4
BANKAMERICA CORP. 3.3
ALLSTATE CORP. 3.2
AMERICAN EXPRESS CO. 3.1
AMERICAN INTERNATIONAL GROUP, INC. 3.1
FANNIE MAE 2.8
TOP INDUSTRIES AS OF JANUARY 31, 1998
NATIONAL COMMERCIAL BANKS 31.8%
PROPERTY-CASUALTY &
REINSURANCE 14.6%
FINANCIAL SERVICES 5.9%
PERSONAL CREDIT INSTITUTIONS 5.9%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 5.6%
ALL OTHERS 36.2%
ROW: 1, COL: 1, VALUE: 36.2
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 5.9
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 14.6
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR FINANCIAL SERVICES FUND
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: Effective January 31, 1998, Robert Ewing (right)
became Portfolio Manager of Fidelity Advisor Financial Services Fund.
The following is an interview with Louis Salemy, who managed the fund
during the period covered by this report, and Robert Ewing, who
discusses his investment philosophy and outlook.
Q. LOUIS, HOW DID THE FUND PERFORM?
L.S. It did well. For the six-month period that ended January 31,
1998, the fund's Class A, Class T, Class B and Class C shares produced
returns of 7.11%, 6.99%, 6.68% and 6.60%, respectively. During the
same period, the Standard & Poor's 500 Index returned 3.56%. For the
12 months that ended January 31, 1998, the fund's Class A, Class T,
Class B and Class C shares returned 31.37%, 31.08%, 30.45% and 30.34%,
respectively, while the S&P 500 returned 26.91%.
Q. HOW WOULD YOU DESCRIBE THE INVESTMENT ENVIRONMENT FOR FINANCIAL
SERVICES STOCKS DURING THE SIX MONTHS?
L.S. It was a period of declining interest rates, which was positive
for the market and financial service company stocks. Financial service
companies, by definition, hold financial assets. When the financial
markets are healthy, financial assets increase in value and financial
company stocks rise. It also was a period of consolidation.
Speculation regarding potential takeovers helped support valuations,
leading to price appreciation. The financial crisis in Asia was
another important factor. In the finance sector, the only companies
exposed to this crisis were the money center banks, both because they
have operations in Asia and because they lend to companies affected by
Asia. On the other hand, many domestic-based financial services stocks
performed well as a result of the Asian financial crisis because they
were perceived as safe havens from the volatility.
Q. WHAT THEMES INFLUENCED THE FUND DURING THE PERIOD?
L.S. Two themes stand out: a financially healthier consumer and
consolidation among financial companies. The improving consumer credit
trend really bore out in the fourth quarter of 1997. American
consumers are in better shape than they have been in recent years.
This means that the quality of consumer loans, including credit card
loans, has been improving. I focused the fund on companies that have
large credit card businesses, including banks and credit companies. I
also tried to participate in the consolidation trend in the financial
services industry, looking for fundamentally sound companies. The fund
profited from owning Barnett Banks, which was taken over by
NationsBank.
Q. WHAT FINANCIAL SERVICE STOCKS WERE SOME OF THE MAJOR CONTRIBUTORS
TO PERFORMANCE?
L.S. American Express was a solid performer by increasing market share
in the credit card business. American Express continued to buy back
its own shares, supporting the price of the stock. Allstate Insurance,
the fund's largest insurance company investment, also did well.
Q. WERE THERE ANY DISAPPOINTMENTS?
L.S. Citicorp was a disappointment, although not for anything that the
company did wrong. The stock of this money center bank was hammered as
a result of the Asian crisis. I think the market's perception of
Citicorp's Asian problems was worse than the reality.
Q. TURNING TO YOU, BOB, PLEASE DESCRIBE YOUR INVESTMENT STYLE AND
OUTLOOK.
R.E. I tend to view myself more as a value investor than a growth or
momentum investor. I do well by buying stocks that are cheap, when
compared to stocks of similar companies, and owning them as their
stock prices appreciate. At the same time, I am very careful to pay
attention to growth opportunities, and I will pay a fair price for a
growing company. As for my outlook, the current valuations of
financial stocks are high by most historic standards and the American
economy is fairly late in the current economic cycle. While credit
quality now is good, there is a historic tendency for credit
fundamentals to slip as the economic cycle lengthens. The high
valuations and longevity of the economic cycle can mean a challenging
environment, which is made even more complex by the unfolding story in
Asia. The challenge, however, also plays to the strength of Fidelity's
team of financial analysts as we try to distinguish between good and
bad investment opportunities. I also expect the fund will be investing
in a greater number of companies and I will try to reduce the fund's
sensitivity to the biggest companies.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$117 million
MANAGER: Robert Ewing, since January 1998;
joined Fidelity in 1990
(checkmark)
ADVISOR FINANCIAL SERVICES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.7%
SHARES VALUE (NOTE 1)
BANKS - 34.4%
NATIONAL COMMERCIAL BANKS - 31.8%
Bank of New York Co., Inc. 73,380 $ 3,976,270
Banc One Corp. 84,652 4,729,931
BankAmerica Corp. 54,000 3,837,375
Citicorp 38,365 4,565,435
Comerica, Inc. 32,500 3,067,188
Marshall & Ilsley Corp. 5,500 305,938
Mellon Bank Corp. 21,000 1,267,875
National City Corp. 27,470 1,653,351
NationsBank Corp. 82,497 4,949,820
Providian Financial Corp. 12,205 596,519
Southwest Bancorporation Texas, Inc. 8,100 282,994
U.S. Bancorp 42,850 4,692,075
Wachovia Corp. 9,405 731,239
Wells Fargo & Co. 7,600 2,348,400
37,004,410
STATE BANKS FEDERAL RESERVE - 2.6%
North Fork Bancorp., Inc. 17,500 562,188
Northern Trust Corp. 33,000 2,223,375
Sterling Bancshares, Inc. 13,000 284,375
3,069,938
TOTAL BANKS 40,074,348
CREDIT & OTHER FINANCE - 12.8%
BANK HOLDING COMPANY OFFICES - 0.5%
Fleet Financial Group, Inc. 7,800 558,675
FINANCIAL SERVICES - 5.9%
American Express Co. 43,100 3,606,931
First Chicago NBD Corp. 16,670 1,243,999
Transamerica Corp. 20,400 2,096,100
6,947,030
MORTGAGE BANKERS - 0.5%
Countrywide Credit Industries, Inc. 6,500 303,063
Money Store, Inc. (The) 13,000 248,625
551,688
PERSONAL CREDIT INSTITUTIONS - 5.9%
Associates First Capital Corp. 13,100 890,800
Beneficial Corp. 22,800 1,769,850
Green Tree Financial Corp. 7,035 139,381
Household International, Inc. 15,580 1,939,710
MBNA Corp. 67,500 2,096,719
6,836,460
TOTAL CREDIT & OTHER FINANCE 14,893,853
FEDERAL SPONSORED CREDIT - 5.6%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 5.6%
Freddie Mac 48,720 2,168,040
Fannie Mae 52,935 3,268,736
SLM Holding Corp. 24,500 1,032,063
6,468,839
INSURANCE - 21.5%
INSURANCE BROKERS & SERVICES - 0.7%
Marsh & McLennan Companies, Inc. 11,500 849,563
INSURANCE CARRIERS - 3.1%
AFLAC, Inc. 46,200 2,515,013
AMBAC, Inc. 6,100 290,131
Blanch E.W. Holdings, Inc. 8,000 270,000
SHARES VALUE (NOTE 1)
MBIA, Inc. 4,500 $ 291,375
MGIC Investment Corp. 4,400 297,550
3,664,069
LIFE INSURANCE - 3.0%
American Bankers Insurance Group, Inc. 5,200 287,300
Aon Corp. 10,000 558,125
Nationwide Financial Services, Inc.
Class A 9,500 348,531
SunAmerica, Inc. 45,000 1,808,438
UNUM Corp. 10,900 530,013
3,532,407
PROPERTY-CASUALTY & REINSURANCE - 14.6%
Aegon NV (Reg.) 4,129 391,223
Allmerica Financial Corp. 7,000 368,375
Allstate Corp. 42,285 3,742,223
American International Group, Inc. 32,620 3,598,394
General Re Corp. 2,800 582,750
Hartford Financial Services Group, Inc. 18,600 1,674,000
Mercury General Corp. 5,200 250,575
PMI Group, Inc. 47,500 3,221,094
Progressive Corp. 6,700 732,813
Travelers Group, Inc. (The) 44,000 2,178,000
Vesta Insurance Group Corp. 3,500 197,750
16,937,197
SURETY INSURANCE - 0.1%
FPIC Insurance Group, Inc. 2,500 65,000
TOTAL INSURANCE 25,048,236
REAL ESTATE INVESTMENT TRUSTS - 1.9%
Apartment Investment & Management Co.
Class A 7,400 274,725
Crescent Real Estate Equities, Inc. 11,000 386,375
Duke Realty Investors, Inc. 17,500 415,625
Imperial Credit Commercial Mortgage
Investment Corp. 10,000 150,000
Novastar Financial, Inc. 10,000 170,000
Ocwen Asset Investment Corp. 10,000 203,750
Public Storage, Inc. 10,600 348,475
Starwood Lodging Trust combined
certificate (SBI) 5,000 271,875
2,220,825
SAVINGS & LOANS - 3.5%
SAVINGS BANKS, FEDERAL CHARTER - 3.5%
Ahmanson (H.F.) & Co. 7,500 437,344
Dime Bancorp., Inc. 11,500 322,000
Golden State Bancorp (a) 17,000 562,063
RedFed Bancorp, Inc. (a) 58,000 1,149,125
Washington Mutual, Inc. 24,000 1,542,000
4,012,532
SECURITIES INDUSTRY - 5.0%
INVESTMENT MANAGERS - 0.3%
Franklin Resources, Inc. 9,300 416,756
SECURITY & COMMODITY BROKERS - 2.0%
Midland Walwyn, Inc. 20,000 248,703
Morgan Stanley, Dean Witter, Discover
and Co. 35,660 2,081,653
2,330,356
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SECURITIES INDUSTRY - CONTINUED
SECURITY BROKERS & DEALERS - 2.7%
Lehman Brothers Holdings, Inc. 57,000 $ 3,095,813
TOTAL SECURITIES INDUSTRY 5,842,925
TOTAL COMMON STOCKS
(Cost $86,767,834) 98,561,558
CASH EQUIVALENTS - 15.3%
Taxable Central Cash Fund (b)
(Cost $17,870,195) 17,870,195 17,870,195
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $104,638,029) $ 116,431,753
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $104,684,512. Net unrealized appreciation
aggregated $11,747,241, of which $12,875,604 related to appreciated
investment securities and $1,128,363 related to depreciated investment
securities.
ADVISOR FINANCIAL SERVICES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
116,431,753
(COST $104,638,029) - SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 60,965
RECEIVABLE FOR FUND SHARES SOLD 933,778
DIVIDENDS RECEIVABLE 104,400
INTEREST RECEIVABLE 94,929
PREPAID EXPENSES 10,707
TOTAL ASSETS
117,636,532
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 45,793
PAYABLE FOR FUND SHARES REDEEMED 369,268
ACCRUED MANAGEMENT FEE 54,478
DISTRIBUTION FEES PAYABLE 52,286
OTHER PAYABLES AND 43,378
ACCRUED EXPENSES
TOTAL LIABILITIES 565,203
NET ASSETS $
117,071,329
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
100,177,684
UNDISTRIBUTED NET INVESTMENT INCOME 61,251
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 5,038,670
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
11,793,724
NET ASSETS $
117,071,329
</TABLE>
CALCULATION OF MAXIMUM $15.89
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($10,634,655 (DIVIDED BY)
669,191 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $16.86
(100/94.25 OF $15.89)
CLASS T: $15.85
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($76,888,206 (DIVIDED BY)
4,850,324 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $16.42
(100/96.50 OF $15.85)
CLASS B: $15.77
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($23,240,817 (DIVIDED BY)
1,473,276 SHARES) A
CLASS C: $15.81
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($2,692,030 (DIVIDED BY)
170,232 SHARES) A
INSTITUTIONAL CLASS: $15.93
NET ASSET VALUE, AND OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($3,615,621 (DIVIDED BY) 226,974 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 655,773
DIVIDENDS
INTEREST 303,936
TOTAL INCOME 959,709
EXPENSES
MANAGEMENT FEE $ 265,282
TRANSFER AGENT FEES 113,896
DISTRIBUTION FEES 241,018
ACCOUNTING FEES AND EXPENSES 34,473
NON-INTERESTED TRUSTEES' COMPENSATION 145
CUSTODIAN FEES AND EXPENSES 2,343
REGISTRATION FEES 40,340
AUDIT 16,743
LEGAL 1,313
REPORTS TO SHAREHOLDERS 23,112
MISCELLANEOUS 549
TOTAL EXPENSES BEFORE REDUCTIONS 739,214
EXPENSE REDUCTIONS (5,293) 733,921
NET INVESTMENT INCOME 225,788
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 6,475,059
FOREIGN CURRENCY TRANSACTIONS (2) 6,475,057
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENT SECURITIES (220,036)
NET GAIN (LOSS) 6,255,021
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,480,809
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ 225,788 $
100,774
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 6,475,057
27,297
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (220,036)
12,013,760
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 6,480,809
12,141,831
DISTRIBUTIONS TO SHAREHOLDERS (245,416)
(14,685)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,445,430)
(13,841)
TOTAL DISTRIBUTIONS (1,690,846)
(28,526)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 42,471,794
57,645,194
REDEMPTION FEES 36,480
14,593
TOTAL INCREASE (DECREASE) IN NET ASSETS 47,298,237
69,773,092
NET ASSETS
BEGINNING OF PERIOD 69,773,092 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $61,251 AND $86,089, RESPECTIVELY) $ 117,071,329 $
69,773,092
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .06 .06
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.00 5.06
TOTAL FROM INVESTMENT OPERATIONS 1.06 5.12
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.06) (.01)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.29) (.02)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.89 $ 15.11
TOTAL RETURN B, C 7.11% 51.35%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 10,635 $ 6,275
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.44% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.43% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .72% A .55% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</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 NET
INVESTMENT INCOME PER SHARE
HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
CLASS A SHARES) TO JULY 31,
1997. 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 A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON
WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES
AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.07 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .05 .04
NET REALIZED AND UNREALIZED GAIN (LOSS) .99 5.04
TOTAL FROM INVESTMENT OPERATIONS 1.04 5.08
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) (.01)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.27) (.02)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.85 $ 15.07
TOTAL RETURN B, C 6.99% 50.95%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 76,888 $ 52,003
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.56% A 1.94% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.55% A, F 1.91% A, F
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .60% A .37% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE G $ .0369 $ .0348
</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 NET
INVESTMENT INCOME PER SHARE
HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
CLASS T SHARES) TO JULY 31,
1997. F FMR OR THE FUND
HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A
PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). G A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON
WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES
AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.04 $ 12.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .00 (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) .99 2.50
TOTAL FROM INVESTMENT OPERATIONS .99 2.48
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) -
FROM NET REALIZED GAIN (.23) -
TOTAL DISTRIBUTIONS (.27) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 15.77 $ 15.04
TOTAL RETURN B, C 6.68% 19.75%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 23,241 $ 7,737
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.23% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.23% A 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.06)% A (.37)% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</TABLE>
A ANNUALIZED B THE TOTAL
RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS
SHOWN. C TOTAL RETURNS DO
NOT INCLUDE THE CONTINGENT
DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES
OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD
MARCH 3, 1997
(COMMENCEMENT OF SALE OF
CLASS B SHARES) TO JULY 31,
1997. 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. H 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.24
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .00
NET REALIZED AND UNREALIZED GAIN (LOSS) .80
TOTAL FROM INVESTMENT OPERATIONS .80
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02)
FROM NET REALIZED GAIN (.21)
TOTAL DISTRIBUTIONS (.23)
REDEMPTION FEES ADDED TO BE PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 15.81
TOTAL RETURN B, C 5.25%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,692
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.06)% A
PORTFOLIO TURNOVER 67% A
AVERAGE COMMISSION RATE H $ .0369
</TABLE>
A ANNUALIZED B T
HE TOTAL RETURN WOULD
HAVE BEEN LOWER HAD
CERTAIN EXPENSES NOT
BEEN REDUCED DURING
THE PERIOD SHOWN
(SEE NOTE 5 OF NOTES
TO FINANCIAL
STATEMENTS). C T
OTAL RETURNS DO NOT
INCLUDE THE
CONTINGENT DEFERRED
SALES CHARGE AND FOR
PERIODS OF LESS THAN
ONE YEAR ARE NOT
ANNUALIZED. D NET
INVESTMENT INCOME
(LOSS) PER SHARE HAS
BEEN CALCULATED
BASED ON AVERAGE
SHARES OUTSTANDING
DURING THE
PERIOD. E FOR THE
PERIOD NOVEMBER 3,
1997
(COMMENCEMENT OF
SALE OF CLASS C
SHARES) TO JANUARY
31,
1998. 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 (SEE NOTE 5
OF NOTES TO FINANCIAL
STATEMENTS). G F
MR 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.14 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .06 .10
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.00 5.06
TOTAL FROM INVESTMENT OPERATIONS 1.06 5.16
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.05) (.02)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.28) (.03)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.93 $ 15.14
TOTAL RETURN B, C 7.09% 51.78%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,616 $ 3,758
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.30% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.30% A 1.47% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .83% A .85% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</TABLE>
A ANNUALIZED B TOTAL RETURNS
FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED. C THE
TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS
SHOWN. D NET INVESTMENT
INCOME PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD
SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO
JULY 31, 1997. 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. H 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Financial Services 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments 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.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $54,480,958 and $26,275,280, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .60% of average net
assets.
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%*
CLASS C 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 $ 10,259 $ 10,259
CLASS T 157,290 157,290
CLASS B 71,069 18,078
CLASS C 2,400 -
$ 241,018 $ 185,627
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $2,676
CLASS T $5,116
CLASS B $1,896
CLASS C $2,357
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 62,858 $ 32,961
CLASS T 128,888 81,634
CLASS B 15,075 0 *
CLASS C 0 0 *
$ 206,821 $ 114,595
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 11,024 .27*
CLASS T FIIOC ** 78,995 .25*
CLASS B FIIOC** 20,056 .28*
CLASS C FIIOC** 602 .26*
INSTITUTIONAL CLASS FIIOC** 3,219 .20*
$ 113,896
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $14,567 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 2,674
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 $2,619 under this arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
FROM NET INVESTMENT INCOME $ 32,924 $ 1,796
FROM NET REALIZED GAIN 134,384 1,792
TOTAL $ 167,308 $ 3,588
CLASS T
FROM NET INVESTMENT INCOME $ 169,713 $ 11,192
FROM NET REALIZED GAIN 1,003,523 11,200
TOTAL $ 1,173,236 $ 22,392
CLASS B
FROM NET INVESTMENT INCOME $ 31,316 $ -
FROM NET REALIZED GAIN 247,910 -
TOTAL $ 279,226 $ -
CLASS C
FROM NET INVESTMENT INCOME $ 990 $ -
FROM NET REALIZED GAIN 10,862 -
TOTAL $ 11,852 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 10,473 $ 1,697
FROM NET REALIZED GAIN 48,751 849
TOTAL $ 59,224 $ 2,546
$ 1,690,846 $ 28,526
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 305,304 442,563 $ 4,668,312 $ 5,416,102
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 9,386 294 147,398 3,494
SHARES REDEEMED (60,758) (27,598) (923,718) (358,033)
NET INCREASE (DECREASE) 253,932 415,259 $ 3,891,992 $ 5,061,563
CLASS T 1,883,008 3,898,064 $ 28,793,501 $ 48,519,698
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 66,938 1,650 1,050,999 19,567
SHARES REDEEMED (550,841) (448,495) (8,324,045) (5,662,098)
NET INCREASE (DECREASE) 1,399,105 3,451,219 $ 21,520,455 $ 42,877,167
CLASS B 1,031,944 528,089 $ 15,768,091 $ 6,961,044
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 13,584 - 212,014 -
SHARES REDEEMED (86,794) (13,547) (1,328,677) (182,473)
NET INCREASE (DECREASE) 958,734 514,542 $ 14,651,428 $ 6,778,571
CLASS C 169,642 - $ 2,655,686 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 710 - 11,224 -
SHARES REDEEMED (120) - (1,889) -
NET INCREASE (DECREASE) 170,232 - $ 2,665,021 $ -
INSTITUTIONAL CLASS 87,559 324,063 $ 1,351,402 $ 3,934,976
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 3,344 215 52,667 2,546
SHARES REDEEMED (112,227) (75,980) (1,661,171) (1,009,629)
NET INCREASE (DECREASE) (21,324) 248,298 $ (257,102) $ 2,927,893
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 6,130
CLASS T 11,786
CLASS B 13,646
CLASS C 3,465
INSTITUTIONAL CLASS 5,313
$ 40,340
ADVISOR HEALTH CARE FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV HEALTH CARE - CL A 8.44% 30.69% 52.91%
FIDELITY ADV HEALTH CARE - CL A 2.21% 23.18% 44.12%
(INCL. 5.75% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV HEALTH CARE - CL A 30.69% 35.12%
FIDELITY ADV HEALTH CARE - CL A 23.18% 29.56%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165928 S00000000000001
FA Health Care -CL A S&P 500
00177 SP001
1996/09/03 9425.00 10000.00
1996/09/30 10056.48 10516.69
1996/10/31 9830.28 10806.74
1996/11/30 10329.80 11623.62
1996/12/31 10395.78 11393.36
1997/01/31 11027.25 12105.21
1997/02/28 11159.20 12200.12
1997/03/31 10556.00 11698.81
1997/04/30 11093.23 12397.23
1997/05/31 11932.05 13151.98
1997/06/30 12818.00 13741.19
1997/07/31 13289.25 14834.57
1997/08/31 12469.28 14003.54
1997/09/30 13258.30 14770.51
1997/10/31 13133.40 14277.18
1997/11/30 13383.20 14938.07
1997/12/31 13606.41 15194.56
1998/01/30 14411.52 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165929 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Health Care - Class A on September 3,
1996, when the fund started, and the current maximum 5.75% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $14,412 - a 44.12% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 9.5
WARNER-LAMBERT CO. 8.5
MERCK & CO., INC. 6.2
SCHERING-PLOUGH CORP. 5.1
LILLY (ELI) & CO. 4.9
ABBOTT LABORATORIES 3.2
BRISTOL-MYERS SQUIBB CO. 2.6
JOHNSON & JOHNSON 2.6
BAXTER INTERNATIONAL, INC. 2.4
MEDTRONIC, INC. 2.1
TOP INDUSTRIES AS OF JANUARY 31, 1998
DRUGS 46.3%
MEDICAL SUPPLIES &
APPLIANCES 12.6%
MEDICAL TECHNOLOGY 5.6%
BIOTECHNOLOGY 5.0%
HOSPITALS 4.6%
ALL OTHERS 25.9%
ROW: 1, COL: 1, VALUE: 46.3
ROW: 1, COL: 2, VALUE: 12.6
ROW: 1, COL: 3, VALUE: 5.6
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 4.6
ROW: 1, COL: 6, VALUE: 25.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR HEALTH CARE FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV HEALTH CARE - CL T 8.39% 30.39% 52.29%
FIDELITY ADV HEALTH CARE - CL T 4.60% 25.82% 46.96%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV HEALTH CARE - CL T 30.39% 34.73%
FIDELITY ADV HEALTH CARE - CL T 25.82% 31.37%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 170134 S00000000000001
FA Health Care -CL T S&P 500
00191 SP001
1996/09/03 9650.00 10000.00
1996/09/30 10286.90 10516.69
1996/10/31 10055.30 10806.74
1996/11/30 10566.75 11623.62
1996/12/31 10624.65 11393.36
1997/01/31 11271.20 12105.21
1997/02/28 11396.65 12200.12
1997/03/31 10779.05 11698.81
1997/04/30 11319.45 12397.23
1997/05/31 12178.30 13151.98
1997/06/30 13075.75 13741.19
1997/07/31 13558.25 14834.57
1997/08/31 12718.70 14003.54
1997/09/30 13526.32 14770.51
1997/10/31 13398.52 14277.18
1997/11/30 13654.11 14938.07
1997/12/31 13872.26 15194.56
1998/01/30 14696.15 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 170135 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Health Care - Class T on September 3,
1996, when the fund started, and the current maximum 3.50% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $14,696 - a 46.96% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 9.5
WARNER-LAMBERT CO. 8.5
MERCK & CO., INC. 6.2
SCHERING-PLOUGH CORP. 5.1
LILLY (ELI) & CO. 4.9
ABBOTT LABORATORIES 3.2
BRISTOL-MYERS SQUIBB CO. 2.6
JOHNSON & JOHNSON 2.6
BAXTER INTERNATIONAL, INC. 2.4
MEDTRONIC, INC. 2.1
TOP INDUSTRIES AS OF JANUARY 31, 1998
DRUGS 46.3%
MEDICAL SUPPLIES &
APPLIANCES 12.6%
MEDICAL TECHNOLOGY 5.6%
BIOTECHNOLOGY 5.0%
HOSPITALS 4.6%
ALL OTHERS 25.9%
ROW: 1, COL: 1, VALUE: 46.3
ROW: 1, COL: 2, VALUE: 12.6
ROW: 1, COL: 3, VALUE: 5.6
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 4.6
ROW: 1, COL: 6, VALUE: 25.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR HEALTH CARE FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate historical performance. You can
look at the total percentage change in the 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 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 March 3, 1997.
Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997
are those of Class T which bears a 0.50% 12b-1 fee. Had Class B's
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class B shares' contingent deferred sales charge included
in the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the past one year and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV HEALTH CARE - CL B 7.97% 29.51% 51.26%
FIDELITY ADV HEALTH CARE - CL B 2.97% 24.51% 47.26%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV HEALTH CARE - CL B 29.51% 34.09%
FIDELITY ADV HEALTH CARE - CL B 24.51% 31.56%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 163038 S00000000000001
FA Health Care -CL B S&P 500
00164 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10660.00 10516.69
1996/10/31 10420.00 10806.74
1996/11/30 10950.00 11623.62
1996/12/31 11010.00 11393.36
1997/01/31 11680.00 12105.21
1997/02/28 11810.00 12200.12
1997/03/31 11170.00 11698.81
1997/04/30 11720.00 12397.23
1997/05/31 12600.00 13151.98
1997/06/30 13530.00 13741.19
1997/07/31 14010.00 14834.57
1997/08/31 13140.00 14003.54
1997/09/30 13967.29 14770.51
1997/10/31 13824.46 14277.18
1997/11/30 14079.52 14938.07
1997/12/31 14304.95 15194.56
1998/01/30 14726.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 163039 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Health Care - Class B on September 3,
1996, when the fund started. As the chart shows, by January 31, 1998,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $14,726 - a 47.26% increase
on the initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $15,363 -
a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 9.5
WARNER-LAMBERT CO. 8.5
MERCK & CO., INC. 6.2
SCHERING-PLOUGH CORP. 5.1
LILLY (ELI) & CO. 4.9
ABBOTT LABORATORIES 3.2
BRISTOL-MYERS SQUIBB CO. 2.6
JOHNSON & JOHNSON 2.6
BAXTER INTERNATIONAL, INC. 2.4
MEDTRONIC, INC. 2.1
TOP INDUSTRIES AS OF JANUARY 31, 1998
DRUGS 46.3%
MEDICAL SUPPLIES &
APPLIANCES 12.6%
MEDICAL TECHNOLOGY 5.6%
BIOTECHNOLOGY 5.0%
HOSPITALS 4.6%
ALL OTHERS 25.9%
ROW: 1, COL: 1, VALUE: 46.3
ROW: 1, COL: 2, VALUE: 12.6
ROW: 1, COL: 3, VALUE: 5.6
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 4.6
ROW: 1, COL: 6, VALUE: 25.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR HEALTH CARE FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate historical performance. You can
look at the total percentage change in the 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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV HEALTH CARE - CL C 8.03% 29.58% 51.34%
FIDELITY ADV HEALTH CARE - CL C 7.03% 28.58% 51.34%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV HEALTH CARE - CL C 29.58% 34.14%
FIDELITY ADV HEALTH CARE - CL C 28.58% 34.14%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 170049 S00000000000001
FA Health Care -CL C S&P 500
00285 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10660.01 10516.69
1996/10/31 10420.01 10806.74
1996/11/30 10950.00 11623.62
1996/12/31 11010.00 11393.36
1997/01/31 11680.01 12105.21
1997/02/28 11810.01 12200.12
1997/03/31 11170.01 11698.81
1997/04/30 11720.00 12397.23
1997/05/31 12600.00 13151.98
1997/06/30 13530.00 13741.19
1997/07/31 14010.01 14834.57
1997/08/31 13140.01 14003.54
1997/09/30 13967.30 14770.51
1997/10/31 13824.46 14277.18
1997/11/30 14079.35 14938.07
1997/12/31 14304.85 15194.56
1998/01/30 15134.43 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 170051 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Health Care - Class C on September 3,
1996, when the fund started. As the chart shows, by January 31, 1998,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $15,134 - a 51.34% increase
on the initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $15,363 -
a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 9.5
WARNER-LAMBERT CO. 8.5
MERCK & CO., INC. 6.2
SCHERING-PLOUGH CORP. 5.1
LILLY (ELI) & CO. 4.9
ABBOTT LABORATORIES 3.2
BRISTOL-MYERS SQUIBB CO. 2.6
JOHNSON & JOHNSON 2.6
BAXTER INTERNATIONAL, INC. 2.4
MEDTRONIC, INC. 2.1
TOP INDUSTRIES AS OF JANUARY 31, 1998
DRUGS 46.3%
MEDICAL SUPPLIES &
APPLIANCES 12.6%
MEDICAL TECHNOLOGY 5.6%
BIOTECHNOLOGY 5.0%
HOSPITALS 4.6%
ALL OTHERS 25.9%
ROW: 1, COL: 1, VALUE: 46.3
ROW: 1, COL: 2, VALUE: 12.6
ROW: 1, COL: 3, VALUE: 5.6
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 4.6
ROW: 1, COL: 6, VALUE: 25.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR HEALTH CARE FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Beso Sikharulidze, Portfolio Manager of Fidelity Advisor Health Care
Fund
Q. HOW DID THE FUND PERFORM, BESO?
A. For the six months that ended January 31, 1998, the fund's Class A,
Class T, Class B and Class C shares returned 8.44%, 8.39%, 7.97% and
8.03%, respectively. By comparison, the Standard & Poor's 500 Index
returned 3.56%. For the 12 months that ended January 31, 1998, the
fund's Class A, Class T, Class B and Class C shares returned 30.69%,
30.39%, 29.51% and 29.58%, respectively. The S&P 500 returned 26.91%
during the 12-month period.
Q. HOW WAS THE FUND ABLE TO OUTPACE THE S&P 500 OVER THE PAST SIX
MONTHS?
A. The fund had a substantial weighting in large-capitalization
pharmaceutical stocks, which did well for two reasons. First, they
exhibited strong business prospects and steady earnings growth.
Second, their share prices benefited from a "flight to quality" during
the financial crisis in Southeast Asia. Investors generally took their
money out of technology stocks and other securities that had some
exposure to the Asian markets and reinvested it in large-cap companies
that were presumed to be "safe." The "safe" companies included
pharmaceutical names such as Johnson & Johnson. Consequently, the
fund's overexposure to pharmaceuticals boosted performance during the
period.
Q. WHICH INDIVIDUAL STOCKS HELPED PERFORMANCE IN THE LATEST SIX
MONTHS?
A. All of the major contributors were pharmaceutical stocks. In fact,
six of the fund's top 10 holdings as of January 31, 1998, were
pharmaceutical companies - the best-performing of which were
Bristol-Myers Squibb, Eli Lilly and Schering-Plough. Not only did
these companies get a boost from their solid earnings and the recent
market environment, but they reaped the benefits of accelerated review
by the Food and Drug Administration (FDA). Because drugs are moving
through the FDA review process more quickly, they're coming to market
sooner. And that's good news for pharmaceutical companies that are
spending many of their budget dollars on research and development.
Q. WHAT HAPPENED WITH HEALTH MAINTENANCE ORGANIZATIONS (HMOS)?
A. New competition created by employers forming their own health care
plans has created a situation where HMOs cannot raise prices to offset
cost increases. Because of this loss of pricing power, HMOs
underperformed other health care stocks during the period.
Q. WHAT ABOUT DEVICE MAKERS?
A. Many device makers did not fare well during the latest six months
because of the volatility of their business. As good as these
companies and their technologies are, the product life cycles are
short. These devices, such as heart defibrillators, are protected by
patents, but competitors may still develop similar products very
quickly. This volatile environment makes device makers much more like
technology companies than pharmaceutical firms.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. The fund's small exposure to Oxford Health Plans detracted from
performance. The company's stock plummeted more than 60% in one day
after the company announced that an accounting error had caused it to
severely misstate its quarterly earnings. The stock continued to
flounder after the company's warning of disappointing fourth-quarter
earnings. The fund sold its position in Oxford Health by the end of
the period. Columbia/HCA, a large HMO, was another detractor. The
company continued to struggle as investigations into its billing
practices progressed. Columbia/HCA announced a massive restructuring
toward the end of 1997, but still later hinted at disappointing
earnings amidst the widening probes.
Q. WHAT IS YOUR OUTLOOK FOR THE HEALTH CARE SECTOR?
A. I'm optimistic about the business prospects of most health care
stocks, especially pharmaceuticals. I expect that solid management
teams, new products and a favorable regulatory environment will
provide pharmaceutical companies with the stamina they need to
continue their bull run. In addition, medical device makers should do
reasonably well as they branch off into new areas, such as spinal, hip
and knee devices. I expect that HMOs and service providers will
continue to writhe under intense competition and resultant downward
pricing pressures amidst increased costs. Finally, biotechnology
companies - especially those with promising new products - could
benefit as pharmaceutical companies continue their acquisition spree
that we witnessed at the end of the period.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$108 million
MANAGER: Beso Sikharulidze, since 1997;
joined Fidelity in 1992
(checkmark)
ADVISOR HEALTH CARE FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.2%
SHARES VALUE (NOTE 1)
AGRICULTURE - 0.5%
CROPS - 0.5%
DEKALB Genetics Corp. Class B 20,000 $ 547,500
CHEMICALS & PLASTICS - 0.5%
CHEMICALS - 0.5%
Monsanto Co. 10,400 493,350
COMPUTER SERVICES & SOFTWARE - 2.0%
COMPUTER SERVICES - 1.1%
HBO & Co. 21,500 1,124,719
CAD/CAM/CAE - 0.9%
Shared Medical Systems Corp. 15,000 982,500
TOTAL COMPUTER SERVICES & SOFTWARE 2,107,219
DRUG STORES - 3.0%
CVS Corp. 14,000 917,875
Rite Aid Corp. 12,700 792,956
Walgreen Co. 45,000 1,490,625
3,201,456
DRUGS & PHARMACEUTICALS - 54.3%
BIOTECHNOLOGY - 5.0%
Amgen, Inc. 15,000 750,000
Aviron (a) 40,000 1,027,500
CV Therapeutics, Inc. 4,500 38,250
Chiron Corp. (a) 50,000 896,875
COR Therapeutics, Inc. (a) 800 7,750
Cytyc Corp. (a) 54,500 1,178,563
Genentech, Inc. special (a) 3,600 234,000
Magainin Pharmaceuticals, Inc. (a) 105,000 721,875
Sangstat Medical Corp. (a) 6,300 177,975
Zonagen, Inc. (a) 17,000 323,000
5,355,788
COMMERCIAL LABORATORY RESEARCH - 1.0%
Millennium Pharmaceuticals, Inc. (a) 17,700 332,981
Scios, Inc. (a) 80,000 760,000
1,092,981
DRUGS - 46.3%
Alliance Pharmaceutical Corp. (a) 100,000 712,500
American Home Products Corp. 106,500 10,164,094
Anesta Corp. (a) 40,200 688,425
Barr Laboratories, Inc. (a) 16,200 542,700
Bristol-Myers Squibb Co. 28,300 2,821,156
Elan Corp. PLC ADR (a) 9,200 477,825
Forest Laboratories, Inc. (a) 17,000 1,009,375
Lilly (Eli) & Co. 78,100 5,271,750
Merck & Co., Inc. 56,400 6,612,900
Pfizer, Inc. 23,300 1,909,144
Progenics Pharmaceuticals, Inc. 54,400 890,800
Rhone Poulenc Sponsored ADR
representing 1/4 share 34,200 1,577,475
Sankyo Co. Ltd. 14,000 365,026
Schering-Plough Corp. 75,300 5,449,838
Sequus Pharmaceuticals, Inc. (a) 89,000 739,813
SmithKline Beecham PLC ADR 2,300 145,044
Takeda Chemical Industries Ltd. 15,000 423,001
Warner-Lambert Co. 59,900 9,014,950
Watson Pharmaceuticals, Inc. (a) 8,200 301,350
Yamanouchi Pharmaceutical Co. Ltd. 8,000 194,092
49,311,258
PHARMACEUTICAL PREPARATIONS - 2.0%
Cellegy Pharmaceuticals, Inc. (a) 60,000 427,495
GelTex Pharmaceuticals, Inc. (a) 3,900 102,375
SHARES VALUE (NOTE 1)
Immunex Corp. (a) 2,100 $ 115,369
Ligand Pharmaceuticals, Inc. Class B (a) 43,600 479,600
Novartis AG (Reg.) 563 964,054
2,088,893
TOTAL DRUGS & PHARMACEUTICALS 57,848,920
ELECTRONIC INSTRUMENTS - 1.1%
LAB ANALYTICAL INSTRUMENTS - 1.1%
Waters Corp. (a) 25,800 1,190,025
ELECTRONICS - 0.2%
ELECTRONIC CAPACITORS - 0.2%
Maxwell Technologies, Inc. (a) 8,500 246,500
HOUSEHOLD PRODUCTS - 0.7%
COSMETICS - 0.6%
Avon Products, Inc. 10,400 624,000
FABRICATED RUBBER PRODUCTS - 0.1%
Safeskin Corp. 1,400 79,188
TOTAL HOUSEHOLD PRODUCTS 703,188
MEDICAL EQUIPMENT & SUPPLIES - 22.8%
DENTAL EQUIPMENT - 0.4%
Sybron International Corp. (a) 9,200 436,425
DRUG DISTRIBUTORS - WHOLESALE - 1.3%
Cardinal Health, Inc. 12,400 960,225
McKesson Corp. 7,600 363,850
PharMerica, Inc. (a) 6,098 68,603
1,392,678
MEDICAL, DENTAL, HOSPITAL EQUIPMENT - WHOLESALE - 0.7%
ESC Medical Systems Ltd. (a) 20,000 740,625
MEDICAL SUPPLIES & APPLIANCES - 12.6%
Abbott Laboratories 48,100 3,406,081
Baxter International, Inc. 46,200 2,572,763
Becton, Dickinson & Co. 18,100 1,142,563
Boston Scientific Corp. (a) 20,600 1,045,450
Johnson & Johnson 41,600 2,784,600
Omnicare, Inc. 8,000 230,000
Sofamor/Danek Group, Inc. (a) 12,300 770,288
Steris Corp. (a) 16,600 869,425
Terumo Corp. 39,000 626,703
13,447,873
MEDICAL TECHNOLOGY - 5.6%
Arterial Vascular Engineering, Inc. (a) 3,900 286,650
Ballard Medical Products 31,100 781,388
Biomet, Inc. 13,000 372,125
InControl, Inc. (a) 50,000 237,500
Medtronic, Inc. 43,500 2,221,219
Nitinol Medical Technologies, Inc. (a) 50,000 406,250
St. Jude Medical, Inc. (a) 14,800 481,000
Sonus Pharmaceuticals, Inc. (a) 8,400 283,500
Stryker Corp. 21,000 775,688
U.S. Surgical Corp. 3,177 90,743
5,936,063
X-RAY & RELATED APPARATUS - 0.4%
Hologic, Inc. (a) 21,600 418,500
X-RAY ELECTRO-MED APPARATUS - 1.8%
ADAC Laboratories (a) 45,000 950,625
Coherent, Inc. (a) 1,000 46,250
Guidant Corp. 13,600 873,800
1,870,675
TOTAL MEDICAL EQUIPMENT & SUPPLIES 24,242,839
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDICAL FACILITIES MANAGEMENT - 6.1%
HOSPITALS - 4.6%
Columbia/HCA Healthcare Corp. 54,300 $ 1,357,500
HEALTHSOUTH Corp. (a) 37,800 848,138
Health Management Associates, Inc.
Class A (a) 18,000 430,875
Tenet Healthcare Corp. (a) 18,900 652,050
Universal Health Services, Inc. Class B (a) 35,000 1,631,875
4,920,438
HMO'S & OUTPATIENT CARE - 1.1%
Humana, Inc. (a) 20,900 419,306
United HealthCare Corp. 15,400 789,249
1,208,555
NURSING CARE & NURSING HOMES - 0.2%
Health Care & Retirement Corp. 5,400 214,313
SKILLED NURSING CARE FACILITY - 0.2%
Beverly Enterprises, Inc. 13,400 185,925
TOTAL MEDICAL FACILITIES MANAGEMENT 6,529,231
TOTAL COMMON STOCKS
(Cost $84,754,839) 97,110,228
CASH EQUIVALENTS - 8.8%
Taxable Central Cash Fund (b)
(Cost $9,396,532) 9,396,532 9,396,532
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $94,151,371) $ 106,506,760
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $94,272,075. Net unrealized appreciation
aggregated $12,234,685, of which $15,586,059 related to appreciated
investment securities and $3,351,374 related to depreciated investment
securities.
ADVISOR HEALTH CARE FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
106,506,760
(COST $94,151,371) -
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD
1,091,703
RECEIVABLE FOR FUND SHARES SOLD
2,871,780
DIVIDENDS RECEIVABLE 30,240
INTEREST RECEIVABLE 34,417
PREPAID EXPENSES 10,764
TOTAL ASSETS
110,545,664
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,800,675
PAYABLE FOR FUND SHARES REDEEMED 528,947
ACCRUED MANAGEMENT FEE 46,405
DISTRIBUTION FEES PAYABLE 42,872
OTHER PAYABLES AND 52,340
ACCRUED EXPENSES
TOTAL LIABILITIES
2,471,239
NET ASSETS $
108,074,425
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
94,588,695
ACCUMULATED NET INVESTMENT
(196,590)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
1,327,078
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
12,355,242
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
108,074,425
</TABLE>
CALCULATION OF MAXIMUM $14.32
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($8,608,988 (DIVIDED BY)
601,309 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $15.19
(100/94.25 OF $14.32)
CLASS T: $14.27
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($74,934,393 (DIVIDED BY)
5,251,802 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $14.79
(100/96.50 OF $14.27)
CLASS B: $14.18
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($16,362,749 (DIVIDED BY)
1,153,535 SHARES) A
CLASS C: $14.23
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($1,642,796 (DIVIDED BY)
115,462 SHARES) A
INSTITUTIONAL CLASS: $14.34
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($6,525,499 (DIVIDED BY) 455,078 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 317,140
DIVIDENDS
INTEREST 170,911
TOTAL INCOME 488,051
EXPENSES
MANAGEMENT FEE $ 245,654
TRANSFER AGENT FEES 109,378
DISTRIBUTION FEES 212,159
ACCOUNTING FEES AND EXPENSES 33,148
NON-INTERESTED TRUSTEES' COMPENSATION 141
CUSTODIAN FEES AND EXPENSES 5,851
REGISTRATION FEES 52,717
AUDIT 16,741
LEGAL 1,285
REPORTS TO SHAREHOLDERS 24,350
MISCELLANEOUS 253
TOTAL EXPENSES BEFORE REDUCTIONS 701,677
EXPENSE REDUCTIONS (17,036) 684,641
NET INVESTMENT INCOME (LOSS) (196,590)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 5,446,912
FOREIGN CURRENCY TRANSACTIONS (510) 5,446,402
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 2,749,004
ASSETS AND LIABILITIES IN (147) 2,748,857
FOREIGN CURRENCIES
NET GAIN (LOSS) 8,195,259
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,998,669
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (196,590) $ (92,633)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 5,446,402 1,318,664
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 2,748,857 9,606,385
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,998,669 10,832,416
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAIN (5,317,358) -
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 35,971,031 58,550,028
REDEMPTION FEES 31,990 7,649
TOTAL INCREASE (DECREASE) IN NET ASSETS 38,684,332 69,390,093
NET ASSETS
BEGINNING OF PERIOD 69,390,093 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $196,590 AND $0, RESPECTIVELY) $ 108,074,425 $ 69,390,093
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.10 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02) (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.12
TOTAL FROM INVESTMENT OPERATIONS 1.09 4.10
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.88) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.32 $ 14.10
TOTAL RETURN B, C 8.44% 41.00%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 8,609 $ 5,488
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.57% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.54% A, G 1.74% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.36)% A (.18)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD
SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31,
1997. 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.05 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.04)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.09
TOTAL FROM INVESTMENT OPERATIONS 1.08 4.05
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.87) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.27 $ 14.05
TOTAL RETURN B, C 8.39% 40.50%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 74,934 $ 50,868
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.62% A 1.97% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.59% A, F 1.96% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.40)% A (.39)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE G $ .0434 $ .0383
</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 NET
INVESTMENT INCOME (LOSS) PER SHARE
HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER
3, 1996 (COMMENCEMENT OF SALE OF
CLASS T SHARES) TO JULY 31,
1997. F FMR OR THE FUND HAS
ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR
REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). G A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE
TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 11.88
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.08) (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 2.18
TOTAL FROM INVESTMENT OPERATIONS 1.03 2.13
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.86) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - -
NET ASSET VALUE, END OF PERIOD $ 14.18 $ 14.01
TOTAL RETURN B, C 7.97% 17.93%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,363 $ 6,159
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.40% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.37% A, G 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.20)% A (.99)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY
31, 1997. 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 A FUND
IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998
SELECTED PER-SHARE DATA (UNAUDITED) E
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.85
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.06
TOTAL FROM INVESTMENT OPERATIONS 1.01
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.63)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 14.23
TOTAL RETURN B, C 7.73%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,643
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.46% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.60)% A
PORTFOLIO TURNOVER 98% A
AVERAGE COMMISSION RATE H $ .0434
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD
NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY
31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.12 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D 0.00 .01
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.11
TOTAL FROM INVESTMENT OPERATIONS 1.11 4.12
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.90) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.34 $ 14.12
TOTAL RETURN B, C 8.60% 41.20%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,525 $ 6,875
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.18% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.14% A, G 1.49% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .06% A .08% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES
TO FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS SHARES) TO JULY 31,
1997. 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Health Care 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of
securities. The effects of changes in foreign currency exchange rates
on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 net operating losses and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $60,709,628 and $38,063,367, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .60% of average net
assets.
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%*
CLASS C 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 $ 8,223 $ 8,223
CLASS T 148,325 148,325
CLASS B 54,303 13,576
CLASS C 1,308 -
$ 212,159 $ 170,124
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 3,102
CLASS T $ 5,023
CLASS B $ 1,755
CLASS C $ 1,390
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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 $ 52,047 $ 35,832
CLASS T 123,183 80,047
CLASS B 7,504 0 *
CLASS C 0 0 *
$ 182,734 $ 115,879
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 10,420 .32 *
CLASS T FIIOC ** 76,472 .26 *
CLASS B FIIOC ** 17,084 .32 *
CLASS C FIIOC ** 386 .30 *
INSTITUTIONAL CLASS FIIOC ** 5,016 .18 *
$ 109,378
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $7,780 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 3,129
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 $13,732 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 $114
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER
AGENT
INTEREST CREDITS
INSTITUTIONAL CLASS $ 61
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED
JANUARY 31,
1998 A
CLASS A
FROM NET REALIZED GAIN $ 422,514
CLASS T
FROM NET REALIZED GAIN $ 3,804,341
CLASS B
FROM NET REALIZED GAIN $ 709,644
CLASS C
FROM NET REALIZED GAIN $ 21,184
INSTITUTIONAL CLASS
FROM NET REALIZED GAIN $ 359,675
$ 5,317,358
A DISTRIBUTIONS FOR CLASS C ARE FOR FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997B,C 1998A 1997 B,C
CLASS A 237,384 450,370 $ 3,259,754 $ 5,183,538
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 29,301 - 385,140 -
SHARES REDEEMED (54,712) (61,034) (752,361) (732,928)
NET INCREASE (DECREASE) 211,973 389,336 $ 2,892,533 $ 4,450,610
CLASS T 1,844,209 3,936,387 $ 25,286,144 $ 46,440,633
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 273,471 - 3,583,787 -
SHARES REDEEMED (486,812) (315,453) (6,628,631) (3,850,782)
NET INCREASE (DECREASE) 1,630,868 3,620,934 $ 22,241,300 $ 42,589,851
CLASS B 765,723 445,818 $ 10,407,187 $ 5,752,611
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 49,138 - 640,356 -
SHARES REDEEMED (100,938) (6,206) (1,376,450) (76,107)
NET INCREASE (DECREASE) 713,923 439,612 $ 9,671,093 $ 5,676,504
CLASS C 114,007 - $ 1,558,394 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,455 - 18,904 -
NET INCREASE (DECREASE) 115,462 - $ 1,577,298 $ -
INSTITUTIONAL CLASS 123,311 546,050 $ 1,706,663 $ 6,606,358
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 27,158 - 357,509 -
SHARES REDEEMED (182,272) (59,169) (2,475,365) (773,295)
NET INCREASE (DECREASE) (31,803) 486,881 $ (411,193) $ 5,833,063
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND THE INSTITUTIONAL CLASS
ARE FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 6,968
CLASS T 20,682
CLASS B 15,546
CLASS C 3,625
INSTITUTIONAL CLASS 5,896
$ 52,717
ADVISOR NATURAL RESOURCES FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 past
one year, past five year and past 10 year total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 MONTHS YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL A -8.98% -5.09% 111.31% 318.43%
FIDELITY ADV NATURAL - CL A (INCL. 5.75% SALES CHARGE) -14.21% -10.55% 99.16% 294.37%
S&P 500 3.56% 26.91% 152.28% 410.11%
</TABLE>
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 10 years. You can compare Class A's returns to the
performance of the S&P 500 - a widely recognized, unmanaged index of
common stocks. This benchmark includes reinvested dividends and
capital gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL A -5.09% 16.14% 15.39%
FIDELITY ADV NATURAL - CL A -10.55% 14.77% 14.71%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 20.33% 17.69%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19980131 19980212 112251 S00000000000001
FA Natural Resources-CL A S&P 500
00247 SP001
1988/01/31 9425.00 10000.00
1988/02/29 10140.46 10466.00
1988/03/31 10417.11 10142.60
1988/04/30 10588.82 10255.18
1988/05/31 10417.11 10344.40
1988/06/30 11103.95 10819.21
1988/07/31 11056.25 10778.10
1988/08/31 10760.53 10411.64
1988/09/30 10712.83 10855.18
1988/10/31 10941.78 11156.95
1988/11/30 10693.75 10997.41
1988/12/31 11053.30 11189.86
1989/01/31 11946.71 12008.96
1989/02/28 11770.10 11709.94
1989/03/31 11998.65 11982.78
1989/04/30 12372.63 12604.69
1989/05/31 12663.51 13115.18
1989/06/30 12621.96 13040.42
1989/07/31 13536.14 14217.97
1989/08/31 13941.29 14496.64
1989/09/30 13567.30 14437.21
1989/10/31 13089.44 14102.26
1989/11/30 13671.19 14389.95
1989/12/31 14716.13 14735.31
1990/01/31 13787.89 13746.57
1990/02/28 14433.13 13923.90
1990/03/31 14704.81 14292.88
1990/04/30 13935.05 13935.56
1990/05/31 15350.06 15294.28
1990/06/30 15157.62 15190.28
1990/07/31 15904.74 15141.67
1990/08/31 15485.90 13772.86
1990/09/30 14999.14 13102.12
1990/10/31 13923.73 13045.78
1990/11/30 14150.13 13888.54
1990/12/31 13938.83 14276.03
1991/01/31 14398.74 14898.47
1991/02/28 16474.23 15963.71
1991/03/31 16085.08 16350.03
1991/04/30 16167.62 16389.27
1991/05/31 16945.93 17097.28
1991/06/30 15967.15 16314.23
1991/07/31 16497.82 17074.47
1991/08/31 16922.35 17479.14
1991/09/30 16261.96 17187.24
1991/10/31 16639.33 17417.54
1991/11/30 15294.97 16715.62
1991/12/31 15955.60 18627.88
1992/01/31 16946.48 18281.40
1992/02/29 17327.58 18519.06
1992/03/31 16895.66 18157.94
1992/04/30 17518.14 18691.78
1992/05/31 17988.17 18783.37
1992/06/30 17403.80 18503.50
1992/07/31 18102.50 19260.30
1992/08/31 17835.72 18865.46
1992/09/30 18013.57 19088.07
1992/10/31 17632.47 19154.88
1992/11/30 17861.13 19808.06
1992/12/31 18083.26 20051.70
1993/01/31 18662.94 20220.14
1993/02/28 19186.07 20495.13
1993/03/31 20458.54 20927.58
1993/04/30 21561.35 20421.13
1993/05/31 22621.74 20968.42
1993/06/30 22932.79 21029.22
1993/07/31 22621.74 20945.11
1993/08/31 23922.49 21738.93
1993/09/30 23795.25 21571.54
1993/10/31 24869.78 22018.07
1993/11/30 23936.63 21808.90
1993/12/31 24943.85 22072.78
1994/01/31 26460.51 22823.26
1994/02/28 25635.92 22204.75
1994/03/31 24060.36 21236.62
1994/04/30 24457.93 21508.45
1994/05/31 24781.88 21861.19
1994/06/30 24340.13 21325.59
1994/07/31 25164.72 22025.07
1994/08/31 26386.88 22928.10
1994/09/30 26254.36 22366.36
1994/10/31 25856.79 22869.60
1994/11/30 24163.43 22036.69
1994/12/31 24375.31 22363.49
1995/01/31 23896.48 22943.38
1995/02/28 24599.76 23837.48
1995/03/31 25976.39 24540.93
1995/04/30 27038.78 25263.66
1995/05/31 27412.87 26273.45
1995/06/30 28190.96 26883.78
1995/07/31 29373.07 27775.24
1995/08/31 29821.97 27844.96
1995/09/30 30076.35 29020.02
1995/10/31 28804.46 28916.42
1995/11/30 30270.87 30185.85
1995/12/31 31364.80 30767.23
1996/01/31 32556.85 31814.54
1996/02/29 33361.87 32109.46
1996/03/31 34383.62 32418.68
1996/04/30 36380.69 32896.53
1996/05/31 37061.86 33744.93
1996/06/30 36829.64 33873.50
1996/07/31 34832.58 32376.97
1996/08/31 36396.17 33059.80
1996/09/30 37944.29 34920.40
1996/10/31 38873.16 35883.51
1996/11/30 40823.78 38595.94
1996/12/31 40890.75 37831.36
1997/01/31 41553.22 40195.06
1997/02/28 38803.98 40510.19
1997/03/31 37793.72 38845.62
1997/04/30 37611.54 41164.71
1997/05/31 41039.81 43670.82
1997/06/30 40907.32 45627.27
1997/07/31 43325.32 49257.83
1997/08/31 43573.74 46498.41
1997/09/30 46702.79 49045.12
1997/10/31 43826.50 47407.02
1997/11/30 40175.83 49601.49
1997/12/31 40550.06 50453.15
1998/01/30 39436.69 51011.16
IMATRL PRASUN SHR__CHT 19980131 19980212 112257 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Natural Resources - Class A on January
31, 1988, and the current maximum 5.75% sales charge was paid. As the
chart shows, by January 31, 1998, the value of the investment would
have grown to $39,437 - a 294.37% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $51,011 - a 410.11% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 4.6
TEXACO, INC. 4.1
USX-MARATHON GROUP 3.9
GETCHELL GOLD CORP. 3.3
TOSCO CORP. 3.2
COASTAL CORP. (THE) 3.0
ELF AQUITAINE SA SPONSORED ADR 3.0
BRITISH PETROLEUM PLC ADR 2.7
EURO-NEVADA MINING LTD. 2.5
ROYAL DUTCH PETROLEUM CO. 2.3
TOP INDUSTRIES AS OF JANUARY 31, 1998
CRUDE PETROLEUM & GAS 18.5%
OIL & GAS EXPLORATION 16.5%
PETROLEUM REFINERS 15.8%
GOLD ORES 7.0%
DRILLING 4.6%
ALL OTHERS 37.6%
ROW: 1, COL: 1, VALUE: 37.6
ROW: 1, COL: 2, VALUE: 4.6
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 15.8
ROW: 1, COL: 5, VALUE: 16.5
ROW: 1, COL: 6, VALUE: 18.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR NATURAL RESOURCES FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past five
year and 10 year total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 MONTHS YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL T -9.03% -5.06% 111.60% 319.00%
FIDELITY ADV NATURAL - CL T -12.21% -8.38% 104.19% 304.34%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 152.28% 410.11%
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 10 years. You can compare Class T's returns to the
performance of the S&P 500 - a widely recognized, unmanaged index of
common stocks. This benchmark includes reinvested dividends and
capital gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL T -5.06% 16.17% 15.40%
FIDELITY ADV NATURAL - CL T -8.38% 15.35% 14.99%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 20.33% 17.69%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19980131 19980212 112530 S00000000000001
FA Natural Resources-CL T S&P 500
00166 SP001
1988/01/31 9650.00 10000.00
1988/02/29 10382.54 10466.00
1988/03/31 10665.79 10142.60
1988/04/30 10841.60 10255.18
1988/05/31 10665.79 10344.40
1988/06/30 11369.03 10819.21
1988/07/31 11320.19 10778.10
1988/08/31 11017.41 10411.64
1988/09/30 10968.57 10855.18
1988/10/31 11202.99 11156.95
1988/11/30 10949.04 10997.41
1988/12/31 11317.17 11189.86
1989/01/31 12231.91 12008.96
1989/02/28 12051.09 11709.94
1989/03/31 12285.09 11982.78
1989/04/30 12668.00 12604.69
1989/05/31 12965.82 13115.18
1989/06/30 12923.28 13040.42
1989/07/31 13859.28 14217.97
1989/08/31 14274.10 14496.64
1989/09/30 13891.19 14437.21
1989/10/31 13401.92 14102.26
1989/11/30 13997.56 14389.95
1989/12/31 15067.45 14735.31
1990/01/31 14117.04 13746.57
1990/02/28 14777.69 13923.90
1990/03/31 15055.86 14292.88
1990/04/30 14267.71 13935.56
1990/05/31 15716.51 15294.28
1990/06/30 15519.47 15190.28
1990/07/31 16284.43 15141.67
1990/08/31 15855.59 13772.86
1990/09/30 15357.21 13102.12
1990/10/31 14256.12 13045.78
1990/11/30 14487.93 13888.54
1990/12/31 14271.58 14276.03
1991/01/31 14742.47 14898.47
1991/02/28 16867.51 15963.71
1991/03/31 16469.07 16350.03
1991/04/30 16553.59 16389.27
1991/05/31 17350.48 17097.28
1991/06/30 16348.33 16314.23
1991/07/31 16891.66 17074.47
1991/08/31 17326.33 17479.14
1991/09/30 16650.18 17187.24
1991/10/31 17036.55 17417.54
1991/11/30 15660.10 16715.62
1991/12/31 16336.51 18627.88
1992/01/31 17351.04 18281.40
1992/02/29 17741.24 18519.06
1992/03/31 17299.01 18157.94
1992/04/30 17936.34 18691.78
1992/05/31 18417.59 18783.37
1992/06/30 17819.28 18503.50
1992/07/31 18534.65 19260.30
1992/08/31 18261.51 18865.46
1992/09/30 18443.61 19088.07
1992/10/31 18053.40 19154.88
1992/11/30 18287.52 19808.06
1992/12/31 18514.95 20051.70
1993/01/31 19108.47 20220.14
1993/02/28 19644.09 20495.13
1993/03/31 20946.94 20927.58
1993/04/30 22076.08 20421.13
1993/05/31 23161.78 20968.42
1993/06/30 23480.26 21029.22
1993/07/31 23161.78 20945.11
1993/08/31 24493.59 21738.93
1993/09/30 24363.30 21571.54
1993/10/31 25463.49 22018.07
1993/11/30 24508.06 21808.90
1993/12/31 25539.33 22072.78
1994/01/31 27092.19 22823.26
1994/02/28 26247.92 22204.75
1994/03/31 24634.75 21236.62
1994/04/30 25041.81 21508.45
1994/05/31 25373.49 21861.19
1994/06/30 24921.20 21325.59
1994/07/31 25765.47 22025.07
1994/08/31 27016.81 22928.10
1994/09/30 26881.12 22366.36
1994/10/31 26474.06 22869.60
1994/11/30 24740.28 22036.69
1994/12/31 24957.21 22363.49
1995/01/31 24466.95 22943.38
1995/02/28 25187.02 23837.48
1995/03/31 26596.51 24540.93
1995/04/30 27684.27 25263.66
1995/05/31 28067.29 26273.45
1995/06/30 28863.96 26883.78
1995/07/31 30074.28 27775.24
1995/08/31 30533.90 27844.96
1995/09/30 30794.35 29020.02
1995/10/31 29492.10 28916.42
1995/11/30 30993.52 30185.85
1995/12/31 32113.56 30767.23
1996/01/31 33334.07 31814.54
1996/02/29 34158.31 32109.46
1996/03/31 35204.45 32418.68
1996/04/30 37249.20 32896.53
1996/05/31 37946.63 33744.93
1996/06/30 37708.87 33873.50
1996/07/31 35664.12 32376.97
1996/08/31 37265.05 33059.80
1996/09/30 38865.97 34920.40
1996/10/31 39817.01 35883.51
1996/11/30 41830.05 38595.94
1996/12/31 41913.91 37831.36
1997/01/31 42588.86 40195.06
1997/02/28 39787.85 40510.19
1997/03/31 38741.69 38845.62
1997/04/30 38589.82 41164.71
1997/05/31 42099.52 43670.82
1997/06/30 41964.53 45627.27
1997/07/31 44444.95 49257.83
1997/08/31 44714.92 46498.41
1997/09/30 47917.92 49045.12
1997/10/31 44973.45 47407.02
1997/11/30 41203.78 49601.49
1997/12/31 41584.30 50453.15
1998/01/30 40433.59 51011.16
IMATRL PRASUN SHR__CHT 19980131 19980212 112534 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Natural Resources - Class T on January
31, 1988, and the current maximum 3.50% sales charge was paid. As the
chart shows, by January 31, 1998, the value of the investment would
have grown to $40,434 - a 304.34% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $51,011 - a 410.11% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 4.6
TEXACO, INC. 4.1
USX-MARATHON GROUP 3.9
GETCHELL GOLD CORP. 3.3
TOSCO CORP. 3.2
COASTAL CORP. (THE) 3.0
ELF AQUITAINE SA SPONSORED ADR 3.0
BRITISH PETROLEUM PLC ADR 2.7
EURO-NEVADA MINING LTD. 2.5
ROYAL DUTCH PETROLEUM CO. 2.3
TOP INDUSTRIES AS OF JANUARY 31, 1998
CRUDE PETROLEUM & GAS 18.5%
OIL & GAS EXPLORATION 16.5%
PETROLEUM REFINERS 15.8%
GOLD ORES 7.0%
DRILLING 4.6%
ALL OTHERS 37.6%
ROW: 1, COL: 1, VALUE: 37.6
ROW: 1, COL: 2, VALUE: 4.6
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 15.8
ROW: 1, COL: 5, VALUE: 16.5
ROW: 1, COL: 6, VALUE: 18.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR NATURAL RESOURCES FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate historical performance. You can
look at the total percentage change in the 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 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 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 shares' contingent deferred sales charge included in the past six
months, past one year, past five years and 10 years total return
figures are 5%, 5%, 2% and 0%, respectively. If Fidelity had not
reimbursed certain class expenses, the past five year and 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 MONTHS YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL B -9.25% -5.55% 108.25% 312.36%
FIDELITY ADV NATURAL - CL B -13.12% -9.57% 106.25% 312.36%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 3.56% 26.91% 152.28% 410.11%
</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 10 years. You can compare Class B's returns to the
performance of the S&P 500 - a widely recognized, unmanaged index of
common stocks. This benchmark includes reinvested dividends and
capital gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL B -5.55% 15.80% 15.22%
FIDELITY ADV NATURAL - CL B (INCL. CONTINGENT -9.57% 15.58% 15.22%
DEFERRED SALES CHARGE)
S&P 500 26.91% 20.33% 17.69%
</TABLE>
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19980131 19980212 112257 S00000000000001
FA Natural Resources-CL B S&P 500
00656 SP001
1988/01/31 10000.00 10000.00
1988/02/29 10759.11 10466.00
1988/03/31 11052.63 10142.60
1988/04/30 11234.82 10255.18
1988/05/31 11052.63 10344.40
1988/06/30 11781.38 10819.21
1988/07/31 11730.77 10778.10
1988/08/31 11417.00 10411.64
1988/09/30 11366.40 10855.18
1988/10/31 11609.31 11156.95
1988/11/30 11346.15 10997.41
1988/12/31 11727.64 11189.86
1989/01/31 12675.55 12008.96
1989/02/28 12488.17 11709.94
1989/03/31 12730.66 11982.78
1989/04/30 13127.46 12604.69
1989/05/31 13436.08 13115.18
1989/06/30 13392.00 13040.42
1989/07/31 14361.95 14217.97
1989/08/31 14791.82 14496.64
1989/09/30 14395.02 14437.21
1989/10/31 13888.00 14102.26
1989/11/30 14505.24 14389.95
1989/12/31 15613.94 14735.31
1990/01/31 14629.06 13746.57
1990/02/28 15313.67 13923.90
1990/03/31 15601.92 14292.88
1990/04/30 14785.20 13935.56
1990/05/31 16286.54 15294.28
1990/06/30 16082.35 15190.28
1990/07/31 16875.06 15141.67
1990/08/31 16430.66 13772.86
1990/09/30 15914.20 13102.12
1990/10/31 14773.18 13045.78
1990/11/30 15013.40 13888.54
1990/12/31 14789.21 14276.03
1991/01/31 15277.17 14898.47
1991/02/28 17479.29 15963.71
1991/03/31 17066.39 16350.03
1991/04/30 17153.98 16389.27
1991/05/31 17979.77 17097.28
1991/06/30 16941.27 16314.23
1991/07/31 17504.31 17074.47
1991/08/31 17954.75 17479.14
1991/09/30 17254.07 17187.24
1991/10/31 17654.46 17417.54
1991/11/30 16228.09 16715.62
1991/12/31 16929.02 18627.88
1992/01/31 17980.35 18281.40
1992/02/29 18384.70 18519.06
1992/03/31 17926.43 18157.94
1992/04/30 18586.88 18691.78
1992/05/31 19085.59 18783.37
1992/06/30 18465.58 18503.50
1992/07/31 19206.89 19260.30
1992/08/31 18923.84 18865.46
1992/09/30 19112.54 19088.07
1992/10/31 18708.19 19154.88
1992/11/30 18950.80 19808.06
1992/12/31 19186.48 20051.70
1993/01/31 19801.53 20220.14
1993/02/28 20356.57 20495.13
1993/03/31 21706.67 20927.58
1993/04/30 22876.76 20421.13
1993/05/31 24001.85 20968.42
1993/06/30 24331.87 21029.22
1993/07/31 24001.85 20945.11
1993/08/31 25381.95 21738.93
1993/09/30 25246.94 21571.54
1993/10/31 26387.03 22018.07
1993/11/30 25396.96 21808.90
1993/12/31 26465.62 22072.78
1994/01/31 28074.81 22823.26
1994/02/28 27199.91 22204.75
1994/03/31 25528.23 21236.62
1994/04/30 25950.06 21508.45
1994/05/31 26293.77 21861.19
1994/06/30 25825.07 21325.59
1994/07/31 26699.97 22025.07
1994/08/31 27996.69 22928.10
1994/09/30 27856.08 22366.36
1994/10/31 27434.26 22869.60
1994/11/30 25637.60 22036.69
1994/12/31 25862.39 22363.49
1995/01/31 25354.36 22943.38
1995/02/28 26100.54 23837.48
1995/03/31 27561.15 24540.93
1995/04/30 28688.37 25263.66
1995/05/31 29085.27 26273.45
1995/06/30 29910.84 26883.78
1995/07/31 31149.18 27775.24
1995/08/31 31625.47 27844.96
1995/09/30 31863.61 29020.02
1995/10/31 30530.01 28916.42
1995/11/30 32054.13 30185.85
1995/12/31 33165.55 30767.23
1996/01/31 34430.41 31814.54
1996/02/29 35251.75 32109.46
1996/03/31 36303.06 32418.68
1996/04/30 38372.82 32896.53
1996/05/31 39062.75 33744.93
1996/06/30 38783.49 33873.50
1996/07/31 36664.44 32376.97
1996/08/31 38274.26 33059.80
1996/09/30 39900.51 34920.40
1996/10/31 40869.69 35883.51
1996/11/30 42923.03 38595.94
1996/12/31 42993.45 37831.36
1997/01/31 43657.85 40195.06
1997/02/28 40772.97 40510.19
1997/03/31 39688.96 38845.62
1997/04/30 39496.63 41164.71
1997/05/31 43080.87 43670.82
1997/06/30 42923.52 45627.27
1997/07/31 45441.23 49257.83
1997/08/31 45686.01 46498.41
1997/09/30 48944.36 49045.12
1997/10/31 45915.67 47407.02
1997/11/30 42052.15 49601.49
1997/12/31 42425.39 50453.15
1998/01/30 41236.09 51011.16
IMATRL PRASUN SHR__CHT 19980131 19980212 112301 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Natural Resources - Class B on January
31, 1988. As the chart shows, by January 31, 1998, the value of the
investment, including the effect of the contingent deferred sales
charge, would have grown to $41,236 - a 312.36% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $51,011 - a 410.11%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 4.6
TEXACO, INC. 4.1
USX-MARATHON GROUP 3.9
GETCHELL GOLD CORP. 3.3
TOSCO CORP. 3.2
COASTAL CORP. (THE) 3.0
ELF AQUITAINE SA SPONSORED ADR 3.0
BRITISH PETROLEUM PLC ADR 2.7
EURO-NEVADA MINING LTD. 2.5
ROYAL DUTCH PETROLEUM CO. 2.3
TOP INDUSTRIES AS OF JANUARY 31, 1998
CRUDE PETROLEUM & GAS 18.5%
OIL & GAS EXPLORATION 16.5%
PETROLEUM REFINERS 15.8%
GOLD ORES 7.0%
DRILLING 4.6%
ALL OTHERS 37.6%
ROW: 1, COL: 1, VALUE: 37.6
ROW: 1, COL: 2, VALUE: 4.6
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 15.8
ROW: 1, COL: 5, VALUE: 16.5
ROW: 1, COL: 6, VALUE: 18.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR NATURAL RESOURCES FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate historical performance. You can
look at the total percentage change in the 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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between July 3, 1995
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 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. Had Class C's 12b-1 fee been reflected, returns prior
to July 3, 1995 would have been lower. Class C shares' contingent
deferred sales charge included in the past six months, past one year,
past five year and past 10 year total return figures are 1%, 1%, 0%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 MONTHS YEAR YEAR YEARS
FIDELITY ADV NATURAL - CL C -9.26% -5.56% 108.22% 312.31%
FIDELITY ADV NATURAL - CL C -10.12% -6.45% 108.22% 312.31%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 152.28% 410.11%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. You can compare Class C's returns to the
performance of the S&P 500 - a widely recognized, unmanaged index of
common stocks. This benchmark includes reinvested dividends and
capital gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
FIDELITY ADV NATURAL - CL C -5.56% 15.80% 15.22%
FIDELITY ADV NATURAL - CL C -6.45% 15.80% 15.22%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 20.33% 17.69%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19980131 19980212 112319 S00000000000001
FA Natural Resources-CL C S&P 500
00528 SP001
1988/01/31 10000.00 10000.00
1988/02/29 10759.11 10466.00
1988/03/31 11052.63 10142.60
1988/04/30 11234.82 10255.18
1988/05/31 11052.63 10344.40
1988/06/30 11781.38 10819.21
1988/07/31 11730.78 10778.10
1988/08/31 11417.02 10411.64
1988/09/30 11366.40 10855.18
1988/10/31 11609.32 11156.95
1988/11/30 11346.15 10997.41
1988/12/31 11727.64 11189.86
1989/01/31 12675.55 12008.96
1989/02/28 12488.19 11709.94
1989/03/31 12730.67 11982.78
1989/04/30 13127.46 12604.69
1989/05/31 13436.10 13115.18
1989/06/30 13392.01 13040.42
1989/07/31 14361.96 14217.97
1989/08/31 14791.83 14496.64
1989/09/30 14395.02 14437.21
1989/10/31 13888.01 14102.26
1989/11/30 14505.26 14389.95
1989/12/31 15613.95 14735.31
1990/01/31 14629.07 13746.57
1990/02/28 15313.68 13923.90
1990/03/31 15601.94 14292.88
1990/04/30 14785.20 13935.56
1990/05/31 16286.54 15294.28
1990/06/30 16082.37 15190.28
1990/07/31 16875.07 15141.67
1990/08/31 16430.68 13772.86
1990/09/30 15914.21 13102.12
1990/10/31 14773.19 13045.78
1990/11/30 15013.42 13888.54
1990/12/31 14789.22 14276.03
1991/01/31 15277.18 14898.47
1991/02/28 17479.29 15963.71
1991/03/31 17066.39 16350.03
1991/04/30 17154.00 16389.27
1991/05/31 17979.79 17097.28
1991/06/30 16941.27 16314.23
1991/07/31 17504.32 17074.47
1991/08/31 17954.76 17479.14
1991/09/30 17254.08 17187.24
1991/10/31 17654.48 17417.54
1991/11/30 16228.09 16715.62
1991/12/31 16929.04 18627.88
1992/01/31 17980.37 18281.40
1992/02/29 18384.72 18519.06
1992/03/31 17926.45 18157.94
1992/04/30 18586.89 18691.78
1992/05/31 19085.61 18783.37
1992/06/30 18465.58 18503.50
1992/07/31 19206.90 19260.30
1992/08/31 18923.85 18865.46
1992/09/30 19112.55 19088.07
1992/10/31 18708.20 19154.88
1992/11/30 18950.82 19808.06
1992/12/31 19186.48 20051.70
1993/01/31 19801.53 20220.14
1993/02/28 20356.57 20495.13
1993/03/31 21706.69 20927.58
1993/04/30 22876.78 20421.13
1993/05/31 24001.87 20968.42
1993/06/30 24331.89 21029.22
1993/07/31 24001.87 20945.11
1993/08/31 25381.98 21738.93
1993/09/30 25246.96 21571.54
1993/10/31 26387.05 22018.07
1993/11/30 25396.97 21808.90
1993/12/31 26465.63 22072.78
1994/01/31 28074.82 22823.26
1994/02/28 27199.92 22204.75
1994/03/31 25528.24 21236.62
1994/04/30 25950.08 21508.45
1994/05/31 26293.78 21861.19
1994/06/30 25825.10 21325.59
1994/07/31 26699.98 22025.07
1994/08/31 27996.70 22928.10
1994/09/30 27856.11 22366.36
1994/10/31 27434.28 22869.60
1994/11/30 25637.62 22036.69
1994/12/31 25862.40 22363.49
1995/01/31 25354.38 22943.38
1995/02/28 26100.56 23837.48
1995/03/31 27561.17 24540.93
1995/04/30 28688.38 25263.66
1995/05/31 29085.28 26273.45
1995/06/30 29910.85 26883.78
1995/07/31 31149.20 27775.24
1995/08/31 31625.49 27844.96
1995/09/30 31863.64 29020.02
1995/10/31 30530.03 28916.42
1995/11/30 32054.15 30185.85
1995/12/31 33165.57 30767.23
1996/01/31 34430.43 31814.54
1996/02/29 35251.76 32109.46
1996/03/31 36303.07 32418.68
1996/04/30 38372.85 32896.53
1996/05/31 39062.78 33744.93
1996/06/30 38783.52 33873.50
1996/07/31 36664.47 32376.97
1996/08/31 38274.29 33059.80
1996/09/30 39900.52 34920.40
1996/10/31 40869.71 35883.51
1996/11/30 42923.05 38595.94
1996/12/31 42993.47 37831.36
1997/01/31 43657.88 40195.06
1997/02/28 40772.99 40510.19
1997/03/31 39688.97 38845.62
1997/04/30 39496.65 41164.71
1997/05/31 43080.90 43670.82
1997/06/30 42923.55 45627.27
1997/07/31 45441.25 49257.83
1997/08/31 45686.03 46498.41
1997/09/30 48944.38 49045.12
1997/10/31 45915.70 47407.02
1997/11/30 42038.61 49601.49
1997/12/31 42406.98 50453.15
1998/01/30 41190.72 51011.16
IMATRL PRASUN SHR__CHT 19980131 19980212 112323 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Natural Resources - Class C on January
31, 1988. As the chart shows, by January 31, 1998, the value of the
investment, including the effect of the contingent deferred sales
charge, would have grown to $41,231 - a 312.31% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $51,011 - a 410.11%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 4.6
TEXACO, INC. 4.1
USX-MARATHON GROUP 3.9
GETCHELL GOLD CORP. 3.3
TOSCO CORP. 3.2
COASTAL CORP. (THE) 3.0
ELF AQUITAINE SA SPONSORED ADR 3.0
BRITISH PETROLEUM PLC ADR 2.7
EURO-NEVADA MINING LTD. 2.5
ROYAL DUTCH PETROLEUM CO. 2.3
TOP INDUSTRIES AS OF JANUARY 31, 1998
CRUDE PETROLEUM & GAS 18.5%
OIL & GAS EXPLORATION 16.5%
PETROLEUM REFINERS 15.8%
GOLD ORES 7.0%
DRILLING 4.6%
ALL OTHERS 37.6%
ROW: 1, COL: 1, VALUE: 37.6
ROW: 1, COL: 2, VALUE: 4.6
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 15.8
ROW: 1, COL: 5, VALUE: 16.5
ROW: 1, COL: 6, VALUE: 18.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR NATURAL RESOURCES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Larry Rakers, Portfolio Manager of Fidelity Advisor Natural Resources
Fund
Q. HOW DID THE FUND PERFORM, LARRY?
A. For the six months that ended January 31, 1998, the fund's Class A,
Class T, Class B and Class C shares returned -8.98%, -9.03%, -9.25%
and -9.26%, respectively. During the same period, the Standard &
Poor's 500 Index returned 3.56%. For the 12 months that ended January
31, 1998, the fund's Class A, Class T, Class B and Class C shares
returned -5.09%, -5.06%, -5.55% and -5.56%, respectively. During the
same period, the S&P 500 returned 26.91%.
Q. WHAT FACTORS HURT THE FUND'S PERFORMANCE IN THE LATEST SIX MONTHS?
A. The financial turmoil in Southeast Asia was the major factor. Asia
is responsible for about half of the growth in demand for almost all
of the commodities in the natural resources sector. Slowing Asian
economies mean that the consumption of natural resources is going to
decline. Consequently, most commodity prices - oil, natural gas, gold
and many base metals - tanked during the period. In fact, most stocks
in the natural resources sector underperformed the S&P 500 index over
the latest six months.
Q. IN SPITE OF THIS NEGATIVE ENVIRONMENT, WERE THERE ANY STOCKS IN THE
PORTFOLIO THAT OUTPERFORMED THE S&P 500?
A. A few. One example was Wainoco Oil, a refiner that is undergoing a
restructuring and benefits somewhat when oil prices decline slightly.
In addition, some silver companies, such as Pan American Silver,
profited from the run-up in the silver price at the end of the period
after billionare investor Warren Buffett went on a silver-buying
spree.
Q. THE FUND'S WEIGHTING IN THE OIL AND GAS SECTOR INCREASED OVER THE
PAST SIX MONTHS. WHAT DID YOU SEE?
A. The price of oil was below trend - or below a normal range of $18
to $20 a barrel - over the past several months. Historically, the
price of oil doesn't hover below trend very often or for periods
longer than about six to nine months. For that reason, I felt that it
would be better to own more oil stocks because if oil returned to the
trend range, these stocks would outperform. Primarily, I invested in
integrated oil companies such as Total, Texaco, and British Petroleum,
which look for oil, process it in their refineries and make chemicals
out of it or make gasoline and sell it to consumers at gasoline
stations. I felt the integrated oil companies had the least downside
risk in case my assumption was incorrect and the oil price stayed
below trend for a long period of time. Most integrated oil companies
have strong balance sheets and stock repurchase programs, pay regular
dividends and generate solid cash flows from the diversification of
their business.
Q. DID A POSSIBLE MILITARY STRIKE ON IRAQ AFFECT OIL PRICES AT THE END
OF THE PERIOD?
A. Most analysts agree that oil prices would have been even lower -
maybe hitting about $14 a barrel - at the end of the period if it
weren't for the situation in Iraq. There are a few scenarios to
consider here. Because of the oil-for-food program that the United
Nations instituted to keep the Iraqi people fed, a military strike
would probably avoid hitting Iraqi oilfields - meaning oil prices
wouldn't change much. In addition, if the situation is resolved
diplomatically, oil prices will continue to linger below trend because
of Asia's financial problems. The bottom line is that unless some
Iraqi oil fields are destroyed, which is unlikely, the threat of a
military action against Iraq won't help boost the price of oil.
Q. THE FUND REDUCED ITS INVESTMENTS IN THE PAPER AND FOREST PRODUCTS
SECTOR. IN FACT, TWO PAPER COMPANIES, FORT HOWARD AND BOISE CASCADE,
DROPPED OUT OF THE TOP 10 SINCE THE END OF JULY. WHY WAS THAT?
A. A lot of paper is consumed in Asia, and the forecasts for lower
commodity prices caused me to reduce the fund's paper exposure.
Unfortunately, that reasoning didn't pan out in reducing the Fort
Howard position. Procter & Gamble raised its tissue prices during the
period, causing tissue prices overall to rebound and Fort Howard to
perform reasonably well. Boise Cascade did fall along with paper
prices, however, so reducing that position was a good move.
Q. WHAT'S YOUR OUTLOOK FOR THE NATURAL RESOURCES SECTOR?
A. I'm optimistic about the long-term prospects for natural resource
companies. The short-term, on the other hand, depends on what happens
in Asia. Most natural resource companies have been punished as
commodities prices plummeted, which in turn slowed capacity additions.
This situation is setting the sector up for a great run sometime - the
question is when. If Southeast Asia rebounds quickly, we could see a
spike in natural resource stocks as soon as late 1998.
FUND FACTS
START DATE: December 29, 1987
SIZE: as of January 31, 1998, more than
$524 million
MANAGER: Lawrence Rakers, since 1997; joined
Fidelity in 1993
(checkmark)
ADVISOR NATURAL RESOURCES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.2%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES - 0.0%
PETROLEUM - WHOLESALE - 0.0%
NGC Corp. 10,000 $ 160,000
CHEMICALS & PLASTICS - 2.5%
AGRICULTURAL CHEMICALS - 0.6%
Potash Corp. of Saskatchewan 35,000 2,981,691
CHEMICALS - 0.4%
Sasol, Ltd. 219,100 1,998,682
UNSUPPORTED PLASTICS FILM & SHEET - 1.5%
W.R. Grace & Co. 101,600 7,981,942
TOTAL CHEMICALS & PLASTICS 12,962,315
CONSTRUCTION - 0.4%
Walter Industries, Inc. (a) 45,800 864,475
Willbros Group, Inc. (a) 92,000 1,276,500
2,140,975
ELECTRONIC INSTRUMENTS - 0.1%
LAB ANALYTICAL INSTRUMENTS - 0.1%
Thermoquest Corp. (a) 21,500 301,000
ENERGY SERVICES - 7.0%
DRILLING - 4.6%
Diamond Offshore Drilling, Inc. 84,400 3,771,625
Noble Drilling Corp. 394,900 10,563,575
Transocean Offshore, Inc. 234,610 9,325,748
23,660,948
OIL & GAS SERVICES - 2.4%
Eni Spa 600,000 3,524,466
Halliburton Co. 42,940 1,929,616
McDermott International, Inc. 20,800 663,000
Schlumberger Ltd. 37,700 2,778,019
Weatherford Enterra, Inc. (a) 101,000 3,535,000
12,430,101
TOTAL ENERGY SERVICES 36,091,049
ENGINEERING - 0.1%
ARCHITECTS & ENGINEERS - 0.1%
Stolt Comex Seaway SA (a) 17,200 369,800
GAS - 2.1%
GAS DISTRIBUTION - 1.0%
MCN Corp. 135,000 4,995,000
GAS TRANSMISSION - 0.7%
Enron Corp. 60,001 2,486,291
Williams Companies, Inc. 35,000 997,500
3,483,791
GAS TRANSMISSION & DISTRIBUTION - 0.4%
Consolidated Natural Gas Co. 15,000 814,688
Questar Corp. 35,000 1,456,875
2,271,563
TOTAL GAS 10,750,354
HOLDING COMPANIES - 1.8%
HOLDING COMPANY OFFICES, NEC - 1.8%
Norfolk Southern Corp. 290,000 9,153,125
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
INDUSTRIAL MACHINERY - WHOLESALE - 0.1%
CE Franklin Ltd. (a) 80,000 604,582
SHARES VALUE (NOTE 1)
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.1%
Gasonics International Corp. (a) 60,000 $ 697,500
SPECIAL INDUSTRIAL MACHINERY - 0.1%
Thermo Fibertek, Inc. (a) 35,000 435,313
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,737,395
MEDICAL EQUIPMENT & SUPPLIES - 0.0%
MEDICAL TECHNOLOGY - 0.0%
Nitinol Medical Technologies, Inc. (a) 25,000 203,125
METALS & MINING - 3.9%
ALUMINUM, EXTRUDED PRODUCTS - 0.4%
Alumax, Inc. (a) 60,000 2,088,750
METAL MINING - 0.5%
Breakwater Resources Ltd. (a) 825,300 1,956,158
Columbia Metals Ltd. (a) 1,479,900 376,190
2,332,348
METAL MINING SERVICES - 0.1%
Minefinders Corp., Ltd. (a) 440,100 604,720
MISCELLANEOUS NONMETAL MINERALS - 0.1%
Camphor Ventures, Inc. (a) 573,600 512,301
MISCELLANEOUS METAL ORES, NEC - 0.0%
Helix Resources NL (a) 650,500 196,232
PRIMARY PRODUCTION OF ALUMINUM - 0.7%
Reynolds Metals Co. 60,000 3,783,750
PRIME NONFERROUS SMELTING - 2.1%
Alcan Aluminium Ltd. 135,000 4,016,008
Aluminum Co. of America 89,000 6,797,375Metaleurop SA warrants
2/4/00 (a) 16,000 20,083
10,833,466
TOTAL METALS & MINING 20,351,567
OIL & GAS - 52.0%
CRUDE PETROLEUM & GAS - 18.5%
Anadarko Petroleum Corp. 55,000 3,245,000
Beau Canada Exploration Ltd. (a) 550,000 982,447
British Borneo Petroleum 150,632 893,188
Brown (Tom), Inc. (a) 90,000 1,575,000
Burlington Resources, Inc. 57,365 2,452,354
Cabot Oil & Gas Corp. Class A 55,000 1,089,688
Canadian Natural Resources Ltd. (a) 30,000 587,407
EEX Corp. (a) 440,000 3,712,500
Elf Aquitaine SA sponsored ADR 272,500 15,413,281
Enron Oil & Gas Co. 70,000 1,400,000
HS Resources, Inc. (a) 85,000 1,195,313
Lomak Petroleum, Inc. 80,000 1,275,000
Louis Dreyfus Natural Gas Corp. (a) 85,000 1,535,313
Magnum Hunter Resources, Inc. (a) 270,000 1,316,250
Nuevo Energy Corp. (a) 88,400 3,237,650
Occidental Petroleum Corp. 144,800 3,692,400
Ocean Energy, Inc. (a) 83,500 3,830,563
Paramount Resources Ltd. (c) 262,600 2,661,090
Petsec Energy Ltd. sponsored ADR (a) 92,000 1,368,500
Petrobras PN (Pfd. Reg.) 45,480,000 9,719,249
Pioneer Natural Resources Co. 55,000 1,192,813
Plains Resources, Inc. (a) 94,600 1,466,300
Rio Alto Exploration Ltd. (a) 187,500 1,642,420
Santa Fe Energy Resources, Inc. 22,900 240,450
Total SA sponsored ADR 457,000 23,706,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
OIL & GAS - CONTINUED
CRUDE PETROLEUM & GAS - CONTINUED
Tullow Oil PLC (a) 201,600 $ 480,798
Vastar Resources, Inc. 25,000 829,688
YPF Sociedad Anonima:
sponsored ADR representing
Class D shares 120,000 3,652,500
Class D 35,000 1,060,882
95,454,919
OIL & GAS EXPLORATION - 16.5%
Abacan Resource Corp. (a) 794,300 1,290,738
Amerada Hess Corp. 90,000 4,921,875
Amoco Corp. 20,000 1,627,500
Chevron Corp. 10,000 748,125
Exxon Corp. 180,000 10,676,250
Kerr-McGee Corp. 80,000 5,010,000
Mobil Corp. 24,200 1,648,625
Petro-Canada 475,000 8,452,131
Phillips Petroleum Co. 212,200 9,336,800
Texaco, Inc. 410,000 21,345,625
USX-Marathon Group 597,300 20,046,881
Unocal Corp. 10,000 343,750
85,448,300
OIL FIELD EQUIPMENT - 1.2%
Cooper Cameron Corp. (a) 59,600 3,065,675
EVI, Inc. (a) 70,000 2,826,250
Ensign Resource Service Group Ord. 3,000 58,122
5,950,047
PETROLEUM REFINERS - 15.8%
Ashland, Inc. 25,000 1,318,750
British Petroleum PLC ADR 175,997 14,134,759
Coastal Corp. (The) 268,000 15,544,000
Royal Dutch Petroleum Co. 231,000 11,838,750
Shell Transport & Trading Co.
PLC ADR 36,100 1,462,050
Tosco Corp. 493,900 16,514,781
Tesoro Petroleum Corp. (a) 155,000 2,480,000
Ultramar Diamond Shamrock Corp. 74,800 2,491,775
Valero Energy Corp. 296,800 9,367,750
Wainoco Oil Corp. (a) 837,400 6,489,850
81,642,465
TOTAL OIL & GAS 268,495,731
PACKAGING & CONTAINERS - 0.6%
GLASS CONTAINERS - 0.6%
Owens-Illinois, Inc. (a) 83,400 3,033,675
PAPER & FOREST PRODUCTS - 8.7%
CONVERTED PAPER & PAPERBOARD - 1.9%
American Pad & Paper Co. (a) 57,300 454,819
Boise Cascade Corp. 300,000 9,600,000
10,054,819
ENVELOPES - 1.8%
Mail-Well, Inc. (a) 238,150 9,496,231
PAPER - 1.5%
Chesapeake Corp. 50,200 1,700,525
Georgia-Pacific Corp. 10,000 551,250
Mercer International, Inc. (SBI) 313,100 2,583,075
Stone Container Corp. (a) 105,000 1,338,750
Willamette Industries, Inc. 49,900 1,671,650
7,845,250
SHARES VALUE (NOTE 1)
PAPER MILLS - 2.2%
Alliance Forest Products, Inc. (a) 148,500 $ 2,744,427
Alliance Forest Products, Inc. (a)(c) 125,000 2,310,123
Fort James Corp. 145,800 6,260,288
11,314,838
PAPERBOARD MILLS - 0.3%
Jefferson Smurfit Corp. (a) 93,700 1,417,213
PULP MILLS - 1.0%
Buckeye Technologies, Inc. (a) 120,000 4,920,000
TOTAL PAPER & FOREST PRODUCTS 45,048,351
PRECIOUS METALS - 11.9%
GOLD & SILVER ORES - 4.4%
Getchell Gold Corp. (a) 669,500 17,072,250
Mentor Exploration &
Development Co. Ltd. (a) 80,000 453,437
Industrias Penoles SA 1,450,000 5,444,563
22,970,250
GOLD ORES - 7.0%
Bakyrchik Gold PLC (a) 160,000 18,295
Euro-Nevada Mining Ltd. 815,800 13,115,125
First Dynasty Mines Ltd. (a) 526,700 195,402
Franco-Nevada Mining Corp. 168,300 3,700,045
Francisco Gold Corp. (a) 71,000 621,930
Golden Knight Resources, Inc. (a) 25,000 41,222
Greenstone Resources Ltd. (a) 951,700 6,048,040
Greenstone Resources Ltd.
warrants 2/28/02 (a) 50,700 109,721
Greenstone Resources Ltd. (a)(c) 148,300 942,444
Indochina Goldfields Ltd. (a) 133,800 210,506
Indochina Goldfields Ltd. (a)(c) 170,000 267,459
Kalahari Goldridge Mining Co. Ltd. (a) 1,200,000 270,018
Kinross Gold Corp. (a) 199,100 752,327
Meridian Gold, Inc. (a) 946,400 2,990,924
Mountain Province Mining, Inc. (a) 135,000 394,181
Queenston Mining, Inc. (a) 385,400 225,063
Randgold & Exploration Co. Ltd. (a) 250,000 372,491
Repadre Capital Corp. (a) 50,000 171,756
Resources William, Inc. (a) 6,910,000 2,278,727
Resources William, Inc.
(consent fee) (a) 686,000 158,364
Resources William, Inc. (consent fee)
warrants 12/31/02 (a) 1,029,000 -
Stillwater Mining Co. (a) 120,000 2,362,500
Sudbury Contact Mines Ltd. (a) 100,000 343,513
Sutton Resources Ltd. (a) 57,000 426,849
TVI Pacific, Inc. (a) 459,200 26,816
TVI Pacific, Inc. (a)(c) 1,860,000 108,619
West Rand Consolidated
Mines Ltd. (Reg.) (a) 242,200 159,568
36,311,905
SILVER ORES - 0.5%
Compania de Minas Buenaventura
SA Class B sponsored ADR 138,500 1,644,688
Pan American Silver Corp. (a) 74,800 714,314
2,359,002
TOTAL PRECIOUS METALS 61,641,157
RAILROADS - 1.7%
CSX Corp. 158,300 8,389,900
Illinois Central Corp., Series A 12,400 412,300
8,802,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
STATIONARY & OFFICE SUPPLIES - WHOLESALE - 0.1%
Boise Cascade Office Products Corp. (a) 25,000 $ 417,188
SERVICES - 0.1%
BUSINESS SERVICES - 0.1%
Zebra Technologies Corp. Class A (a) 15,000 416,250
SHIPPING - 0.1%
DEEP SEA TRANSPORT - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 30,000 603,750
TRUCKING & FREIGHT - 2.8%
AIR COURIER SERVICES - 2.2%
Airborne Freight Corp. 50,300 3,577,588
CNF Transportation, Inc. 170,000 7,766,875
11,344,463
FREIGHT FORWARDING - 0.5%
Expeditors International of
Washington, Inc. 91,000 2,832,374
TRUCKING, LONG DISTANCE - 0.1%
Consolidated Freightways Corp. (a) 40,000 592,500
TOTAL TRUCKING & FREIGHT 14,769,337
TOTAL COMMON STOCKS
(Cost $515,598,459) 497,448,344
CONVERTIBLE BONDS - 0.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT
METALS & MINING - 0.1%
METAL MINING - 0.1%
Dayton Mining Corp.
7%, 4/1/02
(Cost $318,250) - $ 475,000 304,000
CASH EQUIVALENTS - 3.7%
SHARES
Taxable Central Cash Fund (b)
(Cost $19,167,450) 19,167,450 19,167,450
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $535,084,159) $ 516,919,794
LEGEND
1.Non-income producing
2.At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
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 $6,289,735 or
1.2% of net assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 66.9%
Canada 13.4
France 7.6
United Kingdom 3.2
Netherlands 2.3
Brazil 1.9
Mexico 1.1
Others (individually less than 1%) 3.6
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $535,094,532. Net unrealized depreciation
aggregated $18,174,738, of which $46,839,362 related to appreciated
investment securities and $65,014,100 related to depreciated
investment securities.
ADVISOR NATURAL RESOURCES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
516,919,794
(COST $535,084,159) - SEE ACCOMPANYING SCHEDULE
FOREIGN CURRENCY HELD AT VALUE 96
(COST $96)
RECEIVABLE FOR INVESTMENTS SOLD
12,405,407
RECEIVABLE FOR FUND SHARES SOLD
453,937
DIVIDENDS RECEIVABLE
512,442
INTEREST RECEIVABLE
120,498
OTHER RECEIVABLES 41,435
PREPAID EXPENSES 10,593
TOTAL ASSETS
530,464,202
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 2,572,933
PAYABLE FOR FUND SHARES REDEEMED 2,353,681
ACCRUED MANAGEMENT FEE 259,141
DISTRIBUTION FEES PAYABLE 257,609
OTHER PAYABLES AND 200,940
ACCRUED EXPENSES
TOTAL LIABILITIES
5,644,304
NET ASSETS $
524,819,898
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
536,378,776
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
(1,119,377)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
7,729,231
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(18,168,732)
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
524,819,898
</TABLE>
CALCULATION OF MAXIMUM $20.19
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($6,393,855 (DIVIDED BY)
316,712 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $21.42
(100/94.25 OF $20.19)
CLASS T: $20.38
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($461,640,184 (DIVIDED BY)
22,651,266 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $21.12
(100/96.50 OF $20.38)
CLASS B: $20.11
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($51,712,003 (DIVIDED BY)
2,570,968 SHARES) A
CLASS C: $20.34
NET ASSET VALUE AND OFFERING
PRICE PER SHARE ($738,124 (DIVIDED BY)
36,288 SHARES) A
INSTITUTIONAL CLASS: $20.38
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($4,335,732 (DIVIDED BY) 212,727 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 2,681,587
DIVIDENDS
INTEREST 840,293
TOTAL INCOME 3,521,880
EXPENSES
MANAGEMENT FEE $ 1,897,337
TRANSFER AGENT FEES 764,483
DISTRIBUTION FEES 1,732,263
ACCOUNTING FEES AND EXPENSES 208,891
NON-INTERESTED TRUSTEES' COMPENSATION 1,284
CUSTODIAN FEES AND EXPENSES 54,739
REGISTRATION FEES 31,075
AUDIT 28,134
TOTAL EXPENSES BEFORE REDUCTIONS 4,718,206
EXPENSE REDUCTIONS (109,352) 4,608,854
NET INVESTMENT INCOME (LOSS) (1,086,974)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 41,713,592
FOREIGN CURRENCY TRANSACTIONS (37,794) 41,675,798
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (98,747,833)
ASSETS AND LIABILITIES IN (9) (98,747,842)
FOREIGN CURRENCIES
NET GAIN (LOSS) (57,072,044)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (58,159,018)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, 1998 JULY 31,
(UNAUDITED) 1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (1,086,974) $ (812,585)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 41,675,798 83,721,448
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (98,747,842) (11,245,423)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (58,159,018) 71,663,440
DISTRIBUTIONS TO SHAREHOLDERS - (376,703)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME (30,726) (156,340)
FROM NET REALIZED GAIN (102,296,701) (41,625,679)
TOTAL DISTRIBUTIONS (102,327,427) (42,158,722)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (8,291,059) 13,485,202
REDEMPTION FEES 55,282 60,962
TOTAL INCREASE (DECREASE) IN NET ASSETS (168,722,222) 43,050,882
NET ASSETS
BEGINNING OF PERIOD 693,542,120 650,491,238
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF $1,119,377
AND $1,677, RESPECTIVELY) $ 524,819,898 $ 693,542,120
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31, OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.16 $ 25.11 $ 23.65
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.05) 0.00
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.98) 2.81 1.46
TOTAL FROM INVESTMENT OPERATIONS (2.01) 2.76 1.46
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.10) -
IN EXCESS OF NET INVESTMENT INCOME - (.04) -
FROM NET REALIZED GAIN (3.96) (1.57) -
TOTAL DISTRIBUTIONS (3.96) (1.71) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - -
NET ASSET VALUE, END OF PERIOD $ 20.19 $ 26.16 $ 25.11
TOTAL RETURN B, C (8.98)% 11.45% 6.17%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,394 $ 6,372 $ 1,609
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.37% A 1.71% A, F 1.66% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.33% A, G 1.68% A, G 1.58% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.24)% A (.28)% A (.01)% A
PORTFOLIO TURNOVER 89% A 116% A 137%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
</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 NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996. 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 A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT
MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 1994 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.34 $ 25.12 $ 19.25 $ 17.56 $ 17.59 $ 13.88 $
14.11
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.03) D (.02) D .00 D (.05) D (.11) D .22
(.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.01) 2.83 6.56 2.00 .76 4.91 .79
TOTAL FROM INVESTMENT OPERATIONS (2.04) 2.81 6.56 1.95 .65 5.13 .69
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01) - - - - -
IN EXCESS OF NET INVESTMENT INCOME - (.01) - - - - -
FROM NET REALIZED GAIN (3.92) (1.57) (.69) (.26) (.68) (1.42)
(.92)
TOTAL DISTRIBUTIONS (3.92) (1.59) (.69) (.26) (.68) (1.42)
(.92)
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - - - - -
NET ASSET VALUE, END OF PERIOD $ 20.38 $ 26.34 $ 25.12 $ 19.25 $ 17.56 $ 17.59 $
13.88
TOTAL RETURN B, C (9.03)% 11.62% 35.01% 11.40% 3.97% 41.05%
5.97%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 461,640 $ 618,083 $ 602,915 $ 272,979 $ 199,361 $ 40,309 $
7,087
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.43% A 1.47% A 1.59% 1.86% E 2.10% 2.63%
3.27% H
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.40% A, F 1.44% A, F 1.56% F 1.84% F 2.07% F 2.62%
3.27%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME (LOSS) TO (.30)% A (.12)% A .00% (.30)% (.67)% (1.18)%
(1.22)%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 89% A 116% A 137% 161% 125% 208%
248%
AVERAGE COMMISSION RATE G $ .0142 $ .0286 $ .0337
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<C>
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 (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE
PERIOD. E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER. F FMR
OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR
REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER. H LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.99 $ 24.88 $ 19.23 $ 18.87
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.10) (.12) (.15) (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.97) 2.80 6.49 .39
TOTAL FROM INVESTMENT OPERATIONS (2.07) 2.68 6.34 .36
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (3.81) (1.57) (.69) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - -
NET ASSET VALUE, END OF PERIOD $ 20.11 $ 25.99 $ 24.88 $ 19.23
TOTAL RETURN B, C (9.25)% 11.19% 33.87% 1.91%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 51,712 $ 59,044 $ 36,106 $ 2,508
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.98% A 2.04% A 2.28% 2.23% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.94% A, G 2.02% A, G 2.24% G 2.21% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.85)% A (.67)% A (.68)% (.67)% A
PORTFOLIO TURNOVER 89% A 116% A 137% 161%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
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 NET
INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING
THE PERIOD. E FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF CLASS B 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.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 24.39
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.77)
TOTAL FROM INVESTMENT OPERATIONS (2.83)
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.22)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 20.34
TOTAL RETURN B, C (11.73)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 738
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.24% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.21% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.35)% A
PORTFOLIO TURNOVER 89% A
AVERAGE COMMISSION RATE H $ .0142
A ANNUALIZED B THE TOTAL
RETURN WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD
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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF
CLASS C SHARES) TO JANUARY 31,
1998. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 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
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.42 $ 25.17 $ 19.27 $ 18.87
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .03 .04 .04 (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.01) 2.85 6.55 .41
TOTAL FROM INVESTMENT OPERATIONS (1.98) 2.89 6.59 .40
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.05) - -
IN EXCESS OF NET INVESTMENT INCOME (.09) (.02) - -
FROM NET REALIZED GAIN (3.97) (1.57) (.69) -
TOTAL DISTRIBUTIONS (4.06) (1.64) (.69) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - -
NET ASSET VALUE, END OF PERIOD $ 20.38 $ 26.42 $ 25.17 $ 19.27
TOTAL RETURN B, C (8.97)% 11.95% 35.13% 2.12%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,336 $ 10,042 $ 9,860 $ 718
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A 1.08% A 1.44% 1.68% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS .86% A, G 1.06% A, G 1.39% G 1.66% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS .28% A .24% A .17% (.13)% A
PORTFOLIO TURNOVER 89% A 116% A 137% 161%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED. C THE TOTAL RETURNS
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS). D NET INVESTMENT
INCOME (LOSS) 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Natural Resources 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class C and shares of Class C for distribution under federal and state
securities law. These expenses are borne by Class C 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 litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), net operating losses and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
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 $268,695,205 and $375,192,301, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .59% of average net
assets.
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%*
CLASS C 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 $ 8,338 $ 8,338
CLASS T 1,432,628 1,432,628
CLASS B 290,460 72,616
CLASS C 837 -
$ 1,732,263 $ 1,513,582
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 4,004
CLASS T $ 60,472
CLASS B $ 15,600
CLASS C $ 1,526
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
based on declining rates ranging from 5% to 1% for Class B and 1% for
Class C, 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 $ 39,368 $ 29,191
CLASS T 179,624 124,785
CLASS B 112,759 0 *
CLASS C 0 0*
$ 331,751 $ 153,976
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 10,712 .32 *
CLASS T FIIOC ** 668,194 .24 *
CLASS B FIIOC ** 78,659 .27 *
CLASS C FIIOC ** 276 .28 *
INSTITUTIONAL CLASS FIIOC ** 6,642 .17 *
$ 764,483
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $60,394 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 2,672
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 $103,401 under this arrangement.
In addition, FMR voluntarily agreed to reimburse certain transfer
agent, distribution and registration expenses for Class C. For the
period the reimbursement reduced these expenses by $253.
In addition, the fund has entered into arrangements with its custodian
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 $3,026 under the custodian arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS NINE MONTHS
ENDED ENDED
JANUARY 31, JULY 31,
1998 A 1997
CLASS A
FROM NET INVESTMENT INCOME $ - $ 13,382
FROM NET REALIZED GAIN 1,048,812 150,076
TOTAL $ 1,048,812 $ 163,458
CLASS T
FROM NET INVESTMENT INCOME $ - $ 488,121
FROM NET REALIZED GAIN 90,875,603 38,300,093
TOTAL $ 90,875,603 $ 38,788,214
CLASS B
FROM NET REALIZED GAIN $ 8,917,590 $ 2,464,412
CLASS C
FROM NET REALIZED GAIN $ 16,549 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ - $ 31,540
IN EXCESS OF NET INVESTMENT INCOME 30,726 -
FROM NET REALIZED GAIN 1,438,147 711,098
TOTAL $ 1,468,873 $ 742,638
$ 102,327,427 $ 42,158,722
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
SIX MONTHS NINE MONTHS SIX MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 1998 A 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A 90,776 209,436 $ 2,149,446 $ 5,153,545
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 43,804 6,590 998,062 161,464
SHARES REDEEMED (61,484) (36,492) (1,422,035) (892,062)
NET INCREASE (DECREASE) 73,096 179,534 $ 1,725,473 $ 4,422,947
CLASS T 1,572,399 7,500,800 $ 37,361,018 $ 184,421,132
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 3,685,456 1,447,428 85,183,913 35,664,618
SHARES REDEEMED (6,071,121) (9,481,432) (136,799,443) (231,213,235)
NET INCREASE (DECREASE) (813,266) (533,204) $ (14,254,512) $ (11,127,485)
CLASS B 380,321 1,183,380 $ 8,806,265 $ 28,872,353
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 333,524 96,152 7,596,629 2,345,122
SHARES REDEEMED (414,874) (458,573) (9,159,727) (10,907,231)
NET INCREASE (DECREASE) 298,971 820,959 $ 7,243,167 $ 20,310,244
CLASS C 35,500 - $ 763,808 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 788 - 16,454 -
NET INCREASE (DECREASE) 36,288 - $ 780,262 $ -
INSTITUTIONAL CLASS 65,976 342,819 $ 1,545,784 $ 8,550,867
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 60,810 29,515 1,415,854 727,819
SHARES REDEEMED (294,145) (384,020) (6,747,087) (9,399,190)
NET INCREASE (DECREASE) (167,359) (11,686) $ (3,785,449) $ (120,504)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 3,421
CLASS T 19,865
CLASS B 2,514
CLASS C 3,215
INSTITUTIONAL CLASS 2,060
$ 31,075
ADVISOR TECHNOLOGY FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV TECHNOLOGY - CL A -9.39% 4.80% 45.54%
FIDELITY ADV TECHNOLOGY - CL A -14.60% -1.23% 37.17%
(INCL. 5.75% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV TECHNOLOGY - CL A 4.80% 30.47%
FIDELITY ADV TECHNOLOGY - CL A -1.23% 25.11%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 110332 S00000000000001
FA Technology -CL A S&P 500
00187 SP001
1996/09/03 9425.00 10000.00
1996/09/30 10480.60 10516.69
1996/10/31 10584.28 10806.74
1996/11/30 12007.45 11623.62
1996/12/31 11770.98 11393.36
1997/01/31 13089.41 12105.21
1997/02/28 12178.84 12200.12
1997/03/31 11448.49 11698.81
1997/04/30 12121.93 12397.23
1997/05/31 13487.78 13151.98
1997/06/30 13620.57 13741.19
1997/07/31 15138.19 14834.57
1997/08/31 15583.99 14003.54
1997/09/30 16235.26 14770.51
1997/10/31 13883.05 14277.18
1997/11/30 13682.86 14938.07
1997/12/31 12996.44 15194.56
1998/01/30 13717.28 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 110334 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Technology - Class A on September 3,
1996, when the fund started, and the current maximum 5.75% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $13,717 - a 37.17% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 10.8
LINEAR TECHNOLOGY CORP. 4.6
SOLECTRON CORP. 4.6
DELL COMPUTER CORP. 4.2
SCI SYSTEMS, INC. 3.9
MICRON TECHNOLOGY, INC. 3.8
MAXIM INTEGRATED PRODUCTS, INC. 3.3
MERCK & CO., INC. 2.9
MCI COMMUNICATIONS CORP. 2.5
HBO & CO. 2.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
SEMICONDUCTORS 20.9%
PREPACKAGED COMPUTER
SOFTWARE 17.4%
COMPUTER PERIPHERALS 7.0%
MINI & MICRO COMPUTERS 5.4%
COMPUTER SERVICES 4.8%
ALL OTHERS 44.5%
ROW: 1, COL: 1, VALUE: 45.5
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 17.4
ROW: 1, COL: 6, VALUE: 20.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR TECHNOLOGY FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV TECHNOLOGY - CL T -9.55% 4.51% 44.82%
FIDELITY ADV TECHNOLOGY - CL T -12.72% 0.85% 39.75%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV TECHNOLOGY - CL T 4.51% 30.01%
FIDELITY ADV TECHNOLOGY - CL T 0.85% 26.77%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 110504 S00000000000001
FA Technology -CL T S&P 500
00192 SP001
1996/09/03 9650.00 10000.00
1996/09/30 10721.15 10516.69
1996/10/31 10817.65 10806.74
1996/11/30 12274.80 11623.62
1996/12/31 12022.98 11393.36
1997/01/31 13372.89 12105.21
1997/02/28 12440.58 12200.12
1997/03/31 11683.07 11698.81
1997/04/30 12372.59 12397.23
1997/05/31 13771.07 13151.98
1997/06/30 13897.32 13741.19
1997/07/31 15451.17 14834.57
1997/08/31 15907.62 14003.54
1997/09/30 16564.69 14770.51
1997/10/31 14167.57 14277.18
1997/11/30 13962.69 14938.07
1997/12/31 13249.04 15194.56
1998/01/30 13975.46 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 110507 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Technology - Class T on September 3,
1996, when the fund started, and the current maximum 3.50% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $13,975 - a 39.75% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 10.8
LINEAR TECHNOLOGY CORP. 4.6
SOLECTRON CORP. 4.6
DELL COMPUTER CORP. 4.2
SCI SYSTEMS, INC. 3.9
MICRON TECHNOLOGY, INC. 3.8
MAXIM INTEGRATED PRODUCTS, INC. 3.3
MERCK & CO., INC. 2.9
MCI COMMUNICATIONS CORP. 2.5
HBO & CO. 2.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
SEMICONDUCTORS 20.9%
PREPACKAGED COMPUTER
SOFTWARE 17.4%
COMPUTER PERIPHERALS 7.0%
MINI & MICRO COMPUTERS 5.4%
COMPUTER SERVICES 4.8%
ALL OTHERS 44.5%
ROW: 1, COL: 1, VALUE: 45.5
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 17.4
ROW: 1, COL: 6, VALUE: 20.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR TECHNOLOGY FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 March 3, 1997.
Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997
are those of Class T which bears a 0.50% 12b-1 fee. Had Class B's
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class B shares' contingent deferred sales charge included
in the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the past one year and life of fund total
return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV TECHNOLOGY - CL B -9.82% 4.00% 44.12%
FIDELITY ADV TECHNOLOGY - CL B -13.85% -0.65% 40.12%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV TECHNOLOGY - CL B 4.00% 29.57%
FIDELITY ADV TECHNOLOGY - CL B -0.65% 27.01%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 164231 S00000000000001
FA Technology -CL B S&P 500
00197 SP001
1996/09/03 10000.00 10000.00
1996/09/30 11110.00 10516.69
1996/10/31 11210.00 10806.74
1996/11/30 12720.00 11623.62
1996/12/31 12459.04 11393.36
1997/01/31 13857.92 12105.21
1997/02/28 12891.79 12200.12
1997/03/31 12116.87 11698.81
1997/04/30 12821.34 12397.23
1997/05/31 14260.47 13151.98
1997/06/30 14391.30 13741.19
1997/07/31 15981.39 14834.57
1997/08/31 16454.39 14003.54
1997/09/30 17124.90 14770.51
1997/10/31 14635.94 14277.18
1997/11/30 14412.57 14938.07
1997/12/31 13670.35 15194.56
1998/01/30 14012.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 164232 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Technology - Class B on September 3,
1996, when the fund started. As the chart shows, by January 31, 1998,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $14,012 - a 40.12% increase
on the initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $15,363 -
a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 10.8
LINEAR TECHNOLOGY CORP. 4.6
SOLECTRON CORP. 4.6
DELL COMPUTER CORP. 4.2
SCI SYSTEMS, INC. 3.9
MICRON TECHNOLOGY, INC. 3.8
MAXIM INTEGRATED PRODUCTS, INC. 3.3
MERCK & CO., INC. 2.9
MCI COMMUNICATIONS CORP. 2.5
HBO & CO. 2.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
SEMICONDUCTORS 20.9%
PREPACKAGED COMPUTER
SOFTWARE 17.4%
COMPUTER PERIPHERALS 7.0%
MINI & MICRO COMPUTERS 5.4%
COMPUTER SERVICES 4.8%
ALL OTHERS 44.5%
ROW: 1, COL: 1, VALUE: 45.5
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 17.4
ROW: 1, COL: 6, VALUE: 20.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR TECHNOLOGY FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV TECHNOLOGY - CL C -9.85% 3.96% 44.06%
FIDELITY ADV TECHNOLOGY - CL C -10.71% 2.98% 44.06%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV TECHNOLOGY - CL C 3.96% 29.53%
FIDELITY ADV TECHNOLOGY - CL C 2.98% 29.53%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 110408 S00000000000001
FA Technology -CL C S&P 500
00476 SP001
1996/09/03 10000.00 10000.00
1996/09/30 11110.00 10516.69
1996/10/31 11210.00 10806.74
1996/11/30 12720.00 11623.62
1996/12/31 12459.05 11393.36
1997/01/31 13857.92 12105.21
1997/02/28 12891.79 12200.12
1997/03/31 12116.88 11698.81
1997/04/30 12821.34 12397.23
1997/05/31 14260.47 13151.98
1997/06/30 14391.30 13741.19
1997/07/31 15981.39 14834.57
1997/08/31 16454.39 14003.54
1997/09/30 17124.90 14770.51
1997/10/31 14635.95 14277.18
1997/11/30 14426.16 14938.07
1997/12/31 13677.73 15194.56
1998/01/30 14406.46 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 110410 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Technology - Class C on September 3,
1996, when the fund started. As the chart shows, by January 31, 1998,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $14,406 - a 44.06% increase
on the initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $15,363 -
a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 10.8
LINEAR TECHNOLOGY CORP. 4.6
SOLECTRON CORP. 4.6
DELL COMPUTER CORP. 4.2
SCI SYSTEMS, INC. 3.9
MICRON TECHNOLOGY, INC. 3.8
MAXIM INTEGRATED PRODUCTS, INC. 3.3
MERCK & CO., INC. 2.9
MCI COMMUNICATIONS CORP. 2.5
HBO & CO. 2.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
SEMICONDUCTORS 20.9%
PREPACKAGED COMPUTER
SOFTWARE 17.4%
COMPUTER PERIPHERALS 7.0%
MINI & MICRO COMPUTERS 5.4%
COMPUTER SERVICES 4.8%
ALL OTHERS 44.5%
ROW: 1, COL: 1, VALUE: 45.5
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 17.4
ROW: 1, COL: 6, VALUE: 20.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR TECHNOLOGY FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Adam Hetnarski, Portfolio Manager of Fidelity Advisor Technology Fund
Q. HOW DID THE FUND PERFORM, ADAM?
A. For the six months that ended January 31, 1998, the fund's Class A,
Class T, Class B and Class C shares returned -9.39%, -9.55%, -9.82%
and -9.85%, respectively. During the same period, the Standard &
Poor's 500 Index returned 3.56%. For the 12 months that ended January
31, 1998, the fund's Class A, Class T, Class B and Class C shares
returned 4.80%, 4.51%, 4.00% and 3.96%, respectively. The S&P 500
returned 26.91% during the 12-month period.
Q. WHY DID THE FUND UNDERPERFORM THE S&P 500?
A. I became bearish - or somewhat pessimistic - about the
steady-growing, larger-capitalization technology stocks toward the end
of July. I felt their multiples - or price-to-earnings ratios (P/Es) -
could not expand much further, especially after several companies
began to report disappointing earnings but their multiples weren't
reduced. This thought process led me to purchase shares of higher
growth companies - stocks of companies that have shown or are expected
to show rapid earnings and revenue growth. By late October, financial
turmoil in Southeast Asia and falling semiconductor prices forced the
multiples of many technology stocks to contract rapidly.
Unfortunately, the growth stocks were the hardest hit.
Q. LOOKING MORE CLOSELY, WHICH INDIVIDUAL HOLDINGS DETRACTED FROM THE
FUND'S RETURN?
A. MicroProse, a software game company, was scheduled to merge with GT
Interactive Software, but the merger fell through - sending MicroProse
shares tumbling. On top of that, the company "took its eye off of the
ball" during merger negotiations and, subsequently, its earnings
numbers came in far below expectations. Altera, which was hurt by a
slowdown in the semiconductor market, was another detractor. Finally,
the fund lost out by not owning Cisco Systems, a large computer
networking company, during the period. I felt that Cisco's products
were becoming commodities and that its stock would be penalized as a
result. That didn't happen. In fact, the company strengthened its
market position and even expanded into the emerging market for
voice-over-Internet transmission by making an acquisition at the end
of the period.
Q. ON THE POSITIVE SIDE, WHICH INDIVIDUAL HOLDINGS HELPED PERFORMANCE?
A. Yahoo, an Internet services company, historically has enjoyed a
seasonal boost in the fourth quarter, and that was the case this year
as well. More businesses advertise on the Internet during the
Christmas quarter and Yahoo derives all of its revenues from
advertising. HBO & Co. was another contributor to performance. The
company dominated its competitors by increasing sales of software and
services to health care providers.
Q. MICROSOFT REPRESENTED ABOUT 11% OF THE FUND AT THE END OF PERIOD.
WHAT DID YOU FIND ATTRACTIVE ABOUT THIS STOCK AND DID IT CONTRIBUTE TO
PERFORMANCE?
A. Holding Microsoft during the period didn't help performance, but it
didn't hurt either. However, there is something to be said for a stock
that remained fairly steady during the volatile environment for
technology stocks we saw in the fourth quarter of 1997. I found the
stock attractive because it plans to introduce two new operating
systems in late 1998 or early 1999 - Windows 98 and NT 5.0. I felt the
impending upgrade cycle at corporations boded well for future profits.
Q. APPLIED MATERIALS AND COMPAQ COMPUTER MADE UP ABOUT 17% OF THE
PORTFOLIO AT THE END OF JULY. WHY DID YOU DRAMATICALLY REDUCE THOSE
POSITIONS?
A. I decreased the fund's holdings in Applied Materials when memory
chip prices started to fall. I believed that there were going to be
capacity problems for memory providers. As for Compaq, I reduced the
position when the company reported slower-than-expected PC unit sales
growth. In addition, Compaq announced a $9.6-billion deal to acquire
Digital Equipment at the end of January, and I feel that big mergers
in the technology industry generally don't work.
Q. WHAT'S YOUR OUTLOOK FOR THE TECHNOLOGY MARKET?
A. I expect more bad news as a result of the fallout in Asia - meaning
U.S. technology exports may fall as Asian goods become cheaper. I also
anticipate more earnings disappointments, which should continue to eat
away at the multiples of many technology stocks. I believe that 1999
may be a better year, with the rollout of Microsoft's new operating
systems. These new product introductions should drive the requirement
for more powerful PCs and expanded bandwidth in the corporate
environment.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$106 million
MANAGER: Adam Hetnarski, since inception;
joined Fidelity in 1991
(checkmark)
ADVISOR TECHNOLOGY FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.4%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.0%
AIRCRAFT - 1.0%
Gulfstream Aerospace Corp. (a) 30,000 $ 1,021,866
AIR TRANSPORTATION - 1.1%
AIR TRANSPORT, MAJOR NATIONAL - 1.1%
Alaska Air Group, Inc. (a) 6,300 305,944
Southwest Airlines Co. 33,600 875,700
1,181,644
APPLIANCE STORES - 0.4%
ELECTRIC APPLIANCES - WHOLESALE - 0.4%
Cellstar Corp. (a) 22,000 437,250
COMMUNICATIONS EQUIPMENT - 7.5%
DATACOMMUNICATIONS EQUIPMENT - 4.1%
Cabletron Systems, Inc. (a) 28,900 417,244
Cisco Systems, Inc. (a) 18,750 1,182,422
IFR Systems, Inc. 21,100 340,238
Level One Communications, Inc. 8,800 339,900
3Com Corp. (a) 66,000 2,182,125
4,461,929
TELEPHONE EQUIPMENT - 3.4%
Ascend Communications, Inc. (a) 40,600 1,200,238
DSC Communications Corp. (a) 9,300 186,000
DSP Communications, Inc. (a) 66,600 949,050
Nokia Corp. AB sponsored ADR 17,100 1,299,600
3,634,888
TOTAL COMMUNICATIONS EQUIPMENT 8,096,817
COMPUTER SERVICES & SOFTWARE - 23.7%
COMPUTER SERVICES - 4.8%
Electronic Data Systems Corp. 19,000 790,875
Excite, Inc. (a) 5,800 247,950
HBO & Co. 50,900 2,662,706
Lycos, Inc. 1,500 57,281
PsiNet, Inc. 53,700 399,394
Yahoo, Inc. (a) 15,500 982,313
5,140,519
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.1%
Saville Systems Ireland PLC
sponsored ADR 2,100 85,575
Verisign, Inc. 100 1,400
86,975
CAD/CAM/CAE - 0.9%
Parametric Technology Corp. 1,600 81,200
Synopsys, Inc. 28,968 896,198
977,398
DATA PROCESSING - 0.2%
First Data Corp. 7,200 220,500
ELECTRONIC INFORMATION RETRIEVAL - 0.3%
E Trade Group, Inc. (a) 14,100 307,556
PREPACKAGED COMPUTER SOFTWARE - 17.4%
Autodesk, Inc. 5,200 200,850
Advant Corp. (a) 11,000 169,125
BMC Software, Inc. (a) 10,900 738,475
Cadence Design Systems, Inc. (a) 20,600 576,800
Computer Associates International, Inc. 1,300 69,144
Compuware Corp. (a) 18,500 721,500
Electronic Arts, Inc. (a) 21,807 783,689
Industrial-Matematik International Corp. 4,600 120,750
SHARES VALUE (NOTE 1)
i2 Technologies, Inc. 5,000 $ 268,125
Manugistics Group, Inc. 8,100 327,038
Microsoft Corp. 77,800 11,606,788
MicroProse, Inc. 195,100 378,006
Netscape Communications Corp. 7,800 125,288
PeopleSoft, Inc. 36,400 1,274,000
Platinum Technology, Inc. 17,200 481,600
Siebel Systems, Inc. 14,100 694,425
Systems Software Associates, Inc. 28,300 215,788
18,751,391
TOTAL COMPUTER SERVICES & SOFTWARE 25,484,339
COMPUTERS & OFFICE EQUIPMENT - 17.2%
COMPUTER PERIPHERALS - 7.0%
Creative Technology Ltd. (a) 20,300 386,969
EMC Corp. (a) 48,600 1,582,538
Fore Systems, Inc. (a) 81,700 1,205,075
Madge NV 8,100 40,247
SCI Systems, Inc. 96,400 4,193,400
Western Digital Corp. (a) 4,500 84,094
7,492,323
COMPUTER STORAGE DEVICES - 2.8%
Quantum Corp. 60,300 1,469,813
SanDisk Corp. 4,600 92,000
Seagate Technology 64,400 1,493,275
3,055,088
COMPUTERS & OFFICE EQUIPMENT - 1.5%
Hewlett-Packard Co. 13,300 798,000
International Business Machines Corp. 7,900 779,631
1,577,631
ELECTRONIC COMPUTERS - 0.2%
Gateway 2000, Inc. 1,600 60,300
Micron Electronics, Inc. 12,500 145,313
205,613
GRAPHICS WORKSTATIONS - 0.1%
Silicon Graphics, Inc. 3,900 60,450
Sun Microsystems, Inc. 1,600 76,700
137,150
MINI & MICRO COMPUTERS - 5.4%
Compaq Computer Corp. 46,000 1,382,875
Dell Computer Corp. (a) 45,000 4,474,688
5,857,563
OFFICE AUTOMATION - 0.2%
Nam Tai Electronics, Inc. 14,200 222,763
TOTAL COMPUTERS & OFFICE EQUIPMENT 18,548,131
CONSUMER DURABLES - 0.0%
GLASS, PRESSED OR BLOWN - 0.0%
Dupont Photomasks, Inc. (a) 600 17,550
DRUGS & PHARMACEUTICALS - 4.5%
BIOTECHNOLOGY - 0.0%
COR Therapeutics, Inc. 500 4,844
DRUGS - 4.5%
Barr Laboratories, Inc. (a) 27,650 926,275
Bristol-Myers Squibb Co. 2,900 289,094
Merck & Co., Inc. 26,400 3,095,400
Schering-Plough Corp. 7,500 542,813
4,853,582
TOTAL DRUGS & PHARMACEUTICALS 4,858,426
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRICAL EQUIPMENT - 1.6%
TV & RADIO COMMUNICATION EQUIPMENT - 1.6%
Loral Space & Communications Ltd. 75,500 $ 1,665,719
ELECTRONIC INSTRUMENTS - 2.7%
ELECTRONIC EQUIPMENT - 1.3%
ORBIT/FR, Inc. 9,300 151,125
Sawtek, Inc. 4,700 122,494
Teradyne, Inc. 28,800 1,137,600
1,411,219
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 1.4%
Applied Materials, Inc. (a) 800 26,250
KLA-Tencor Corp. 24,500 918,750
Lam Research Corp. 25,337 578,000
Novellus Systems, Inc. 500 18,031
1,541,031
TOTAL ELECTRONIC INSTRUMENTS 2,952,250
ELECTRONICS - 26.8%
CONNECTORS - 0.3%
AMP, Inc. 9,500 380,000
ELECTRONIC CAPACITORS - 0.4%
Maxwell Technologies, Inc. 15,000 435,000
ELECTRONIC COMPONENTS & ACCESSORIES - 0.0%
International Manufacturing Services,
Inc. Class A 100 788
ELECTRONICS & ELECTRONIC COMPONENTS - 4.6%
Solectron Corp. 113,600 4,913,200
PRINTED CIRCUIT BOARDS - 0.6%
DII Group, Inc. (a) 22,200 627,150
SEMICONDUCTORS - 20.9%
Altera Corp. (a) 48,900 1,674,825
Applied Micro Circuits Corp. 3,600 68,850
Cypress Semiconductor Corp. (a) 12,400 122,450
Integrated Circuit Systems, Inc. 6,800 175,950
Integrated Device Technology, Inc. 19,700 267,181
Intel Corp. 14,700 1,190,700
International Rectifier Corp. 18,900 216,169
Lattice Semiconductor Corp. 8,600 396,675
Linear Technology Corp. 74,300 4,922,375
Maxim Integrated Products, Inc. 102,100 3,535,213
Micrel, Inc. 33,600 1,016,400
Microchip Technology, Inc. 13,100 302,528
Micron Technology, Inc. 118,100 4,089,213
Motorola, Inc. 25,100 1,491,881
Texas Instruments, Inc. 27,000 1,474,875
3D Labs, Inc. Ltd. (a) 12,000 352,500
Vitesse Semiconductor Corp. 28,700 1,246,656
22,544,441
TOTAL ELECTRONICS 28,900,579
FOODS - 0.0%
COOKIES & CRACKERS - 0.0%
Keebler Foods Co. 100 2,750
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
ACCESSORIES & MEASURING CUTTING TOOLS - 0.1%
Stanley Works 1,800 79,650
GENERAL INDUSTRIAL MACHINERY - 1.4%
Manitowoc Co., Inc. 13,100 445,400
Tyco International Ltd. 24,188 1,073,343
1,518,743
SHARES VALUE (NOTE 1)
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.2%
ASM Lithography Holding NV (a) 3,000 $ 208,500
PRI Automation, Inc. 2,100 57,750
266,250
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,864,643
MEDICAL EQUIPMENT & SUPPLIES - 0.3%
MEDICAL TECHNOLOGY - 0.3%
Medtronic, Inc. 6,300 321,694
METALS & MINING - 0.7%
NONFERROUS WIRE - 0.7%
AFC Cable Systems, Inc. (a) 25,000 712,500
RETAIL & WHOLESALE, MISCELLANEOUS - 0.4%
BUILDING MATERIALS - RETAIL - 0.4%
Home Depot, Inc. 7,300 440,281
SERVICES - 0.3%
MANAGEMENT CONSULTING SERVICES - 0.1%
Hagler Bailly, Inc. 6,600 151,800
PERSONNEL SUPPLY SERVICES - 0.2%
Computer Horizons Corp. (a) 5,100 213,403
TOTAL SERVICES 365,203
TELEPHONE SERVICES - 2.5%
MCI Communications Corp. 58,100 2,698,019
TOTAL COMMON STOCKS
(Cost $94,715,440) 99,569,661
CONVERTIBLE BONDS - 0.3%
MOODY'S PRINCIPAL
RATINGS AMOUNT
ELECTRONIC INSTRUMENTS - 0.3%
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 0.3%
Lam Research Corp.
5%, 9/1/02 (d)
(Cost $375,300) B $ 360,000 293,400
CASH EQUIVALENTS - 7.3%
SHARES
Taxable Central Cash Fund (b)
(Cost $7,914,863) 7,914,863 7,914,863
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $103,005,603) $ 107,777,924
LEGEND
1.Non-income producing
2.At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3.Standard & Poor's credit ratings are used in the absence of a rating
by Moody's Investors Service, Inc.
4.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 $293,400 or 0.3%
of net assets.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $103,006,949. Net unrealized appreciation
aggregated $4,770,975, of which $9,103,261 related to appreciated
investment securities and $4,332,286 related to depreciated investment
securities.
ADVISOR TECHNOLOGY FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
107,777,924
(COST $103,005,603) - SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD
4,298,656
RECEIVABLE FOR FUND SHARES SOLD
692,667
DIVIDENDS RECEIVABLE 14,773
INTEREST RECEIVABLE 45,747
REDEMPTION FEES RECEIVABLE 104
OTHER RECEIVABLES 331
PREPAID EXPENSES 11,106
TOTAL ASSETS
112,841,308
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 6,214,745
PAYABLE FOR FUND SHARES REDEEMED 219,800
ACCRUED MANAGEMENT FEE 48,338
DISTRIBUTION FEES PAYABLE 43,950
OTHER PAYABLES AND 68,124
ACCRUED EXPENSES
TOTAL LIABILITIES
6,594,957
NET ASSETS $
106,246,351
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
112,599,182
ACCUMULATED NET INVESTMENT
(441,903)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
(10,683,206)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
4,772,278
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
106,246,351
</TABLE>
CALCULATION OF MAXIMUM $12.94
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($13,266,370 (DIVIDED BY)
1,025,390 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.73
(100/94.25 OF $12.94)
CLASS T: $12.89
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($71,613,343 (DIVIDED BY)
5,557,126 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.36
(100/96.50 OF $12.89)
CLASS B: $12.82
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($16,126,903 (DIVIDED BY)
1,258,085 SHARES) A
CLASS C: $12.85
NET ASSET VALUE AND OFFERING
PRICE PER SHARE ($1,408,882 (DIVIDED BY)
109,622 SHARES) A
INSTITUTIONAL CLASS: $12.93
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($3,830,853 (DIVIDED BY)
296,192 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 62,930
DIVIDENDS
INTEREST 285,525
TOTAL INCOME 348,455
EXPENSES
MANAGEMENT FEE $ 276,805
TRANSFER AGENT FEES 132,650
DISTRIBUTION FEES 241,382
ACCOUNTING FEES AND EXPENSES 33,347
NON-INTERESTED TRUSTEES' COMPENSATION 155
CUSTODIAN FEES AND EXPENSES 22,103
REGISTRATION FEES 66,963
AUDIT 16,732
LEGAL 1,540
REPORTS TO SHAREHOLDERS 27,153
MISCELLANEOUS 562
TOTAL EXPENSES BEFORE REDUCTIONS 819,392
EXPENSE REDUCTIONS (29,034) 790,358
NET INVESTMENT INCOME (LOSS) (441,903)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (5,157,063)
FOREIGN CURRENCY TRANSACTIONS 263 (5,156,800)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (4,851,487)
ASSETS AND LIABILITIES IN (5) (4,851,492)
FOREIGN CURRENCIES
NET GAIN (LOSS) (10,008,292)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (10,450,195)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (441,903) $ (264,379)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) (5,156,800) 4,756,140
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (4,851,492) 9,623,770
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (10,450,195) 14,115,531
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAIN (4,185,800) (119,780)
IN EXCESS OF NET REALIZED GAIN (5,526,406) -
TOTAL DISTRIBUTIONS (9,712,206) (119,780)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 52,729,915 59,627,327
REDEMPTION FEES 40,162 15,597
TOTAL INCREASE (DECREASE) IN NET ASSETS 32,607,676 73,638,675
NET ASSETS
BEGINNING OF PERIOD 73,638,675 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $441,903 AND $0, RESPECTIVELY) $ 106,246,351 $ 73,638,675
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.96 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05) (.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.39) 6.13
TOTAL FROM INVESTMENT OPERATIONS (1.44) 6.03
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.69) (.08)
IN EXCESS OF NET REALIZED GAIN (.90) -
TOTAL DISTRIBUTIONS (1.59) (.08)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.94 $ 15.96
TOTAL RETURN B, C (9.39)% 60.62%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,266 $ 7,313
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.52% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.46% A, G 1.70% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.71)% A (.79)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
CLASS A SHARES) TO
JULY 31, 1997. 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 A
FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER
SHARE FOR SECURITY TRADES ON
WHICH COMMISSIONS ARE CHARGED.
THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES
AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.91 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06) (.11)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.40) 6.09
TOTAL FROM INVESTMENT OPERATIONS (1.46) 5.98
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.68) (.08)
IN EXCESS OF NET REALIZED GAIN (.89) -
TOTAL DISTRIBUTIONS (1.57) (.08)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.89 $ 15.91
TOTAL RETURN B, C (9.55)% 60.12%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 71,613 $ 57,624
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.69% A 1.92% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.63% A, F 1.87% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.89)% A (.93)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE G $ .0419 $ .0415
</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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS T SHARES) TO JULY 31,
1997. F FMR OR THE FUND HAS ENTERED INTO
VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). G A FUND IS REQUIRED TO DISCLOSE
ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.88 $ 12.88
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.11) (.08)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.38) 3.08
TOTAL FROM INVESTMENT OPERATIONS (1.49) 3.00
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.68) -
IN EXCESS OF NET REALIZED GAIN (.90) -
TOTAL DISTRIBUTIONS (1.58) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.82 $ 15.88
TOTAL RETURN B, C (9.82)% 23.29%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,127 $ 5,105
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.44% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.38% A, G 2.45% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.61)% A (1.41)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF
CLASS B SHARES) TO JULY 31,
1997. 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 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.28
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.69)
TOTAL FROM INVESTMENT OPERATIONS (.74)
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.30)
IN EXCESS OF NET REALIZED GAIN (.39)
TOTAL DISTRIBUTIONS (.69)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 12.85
TOTAL RETURN B, C (4.75)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,409
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.43% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.65)% A
PORTFOLIO TURNOVER 523% A
AVERAGE COMMISSION RATE H $ .0419
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 NET
INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING
THE PERIOD. E FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY
31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.98 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.41) 6.12
TOTAL FROM INVESTMENT OPERATIONS (1.45) 6.06
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.69) (.09)
IN EXCESS OF NET REALIZED GAIN (.92) -
TOTAL DISTRIBUTIONS (1.61) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.93 $ 15.98
TOTAL RETURN B, C (9.46)% 60.95%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,831 $ 3,598
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.34% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.29% A, G 1.44% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.56)% A (.50)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</TABLE>
A ANNUALIZED B TOTAL RETURNS
FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED. C THE
TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). D NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO
JULY 31, 1997. 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 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Technology 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 foreign currency transactions, partnerships, net
operating losses and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
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 $258,825,863 and $218,922,272, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .59% of average net
assets.
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% *
CLASS C 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 $ 12,136 $ 12,136
CLASS T 169,507 169,507
CLASS B 58,347 14,587
CLASS C 1,392 0
$ 241,382 $ 196,230
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 3,780
CLASS T $ 6,609
CLASS B $ 2,271
CLASS C $ 1,682
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
and 1% for Class C, 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 $ 97,440 $ 60,650
CLASS T 190,150 115,044
CLASS B 22,450 0 *
CLASS C 0 0 *
$ 310,040 $ 175,694
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 14,080 .29*
CLASS T FIIOC ** 94,270 .28*
CLASS B FIIOC ** 20,246 .35*
CLASS C FIIOC ** 427 .31*
INSTITUTIONAL CLASS FIIOC ** 3,627 .20*
$ 132,650
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $22,688 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 3,113
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 $25,705 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
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 $216 under the custodian arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B
CLASS A
FROM NET REALIZED GAIN $ 440,106 $ 16,754
IN EXCESS OF NET REALIZED GAIN 581,062 -
TOTAL $ 1,021,168 $ 16,754
CLASS T
FROM NET REALIZED GAIN $ 3,046,936 $ 94,078
IN EXCESS OF NET REALIZED GAIN 4,022,792 -
TOTAL $ 7,069,728 $ 94,078
CLASS B
FROM NET REALIZED GAIN $ 514,174 $ -
IN EXCESS OF NET REALIZED GAIN 678,852 -
TOTAL $ 1,193,026 $ -
CLASS C
FROM NET REALIZED GAIN $ 12,248 $ -
IN EXCESS OF NET REALIZED GAIN 16,170 -
TOTAL $ 28,418 $ -
INSTITUTIONAL CLASS
FROM NET REALIZED GAIN $ 172,336 $ 8,948
IN EXCESS OF NET REALIZED GAIN 227,530 -
TOTAL $ 399,866 $ 8,948
$ 9,712,206 $ 119,780
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND THE INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B,C 1998 A 1997 B,C
CLASS A 582,990 504,366 $ 8,026,456 $ 6,388,175
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 69,527 1,197 934,118 15,029
SHARES REDEEMED (85,188) (47,502) (1,187,461) (617,865)
NET INCREASE (DECREASE) 567,329 458,061 $ 7,773,113 $ 5,785,339
CLASS T 2,443,712 4,187,137 $ 36,096,313 $ 54,310,830
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 495,110 7,154 6,736,761 89,642
SHARES REDEEMED (1,004,588) (571,399) (14,087,572) (7,714,355)
NET INCREASE (DECREASE) 1,934,234 3,622,892 $ 28,745,502 $ 46,686,117
CLASS B 967,716 352,887 $ 14,239,268 $ 4,850,934
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 78,347 - 1,031,733 -
SHARES REDEEMED (109,338) (31,527) (1,459,994) (463,394)
NET INCREASE (DECREASE) 936,725 321,360 $ 13,811,007 $ 4,387,540
CLASS C 107,593 - $ 1,361,810 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2,343 - 27,642 -
SHARES REDEEMED (314) - (3,832) -
NET INCREASE (DECREASE) 109,622 - $ 1,385,620 $ -
INSTITUTIONAL CLASS 119,912 229,260 $ 1,685,058 $ 2,822,866
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 27,259 714 379,700 8,948
SHARES REDEEMED (76,150) (4,803) (1,050,085) (63,483)
NET INCREASE (DECREASE) 71,021 225,171 $ 1,014,673 $ 2,768,331
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T, AND THE INSTITUTIONAL CLASS
ARE FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO JULY 31,1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 8,271
CLASS T 32,822
CLASS B 16,110
CLASS C 3,663
INSTITUTIONAL CLASS 6,097
$ 66,963
ADVISOR UTILITIES GROWTH FUND - CLASS A
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV UTILITIES - CL A 20.51% 34.85% 59.51%
FIDELITY ADV UTILITIES - CL A 13.58% 27.10% 50.34%
(INCL. 5.75% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class A's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV UTILITIES - CL A 34.85% 39.22%
FIDELITY ADV UTILITIES - CL A 27.10% 33.50%
(INCL. 5.75% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 112547 S00000000000001
FA Utilities Growth -CL A S&P 500
00186 SP001
1996/09/03 9425.00 10000.00
1996/09/30 9566.38 10516.69
1996/10/31 10150.73 10806.74
1996/11/30 10697.38 11623.62
1996/12/31 10842.70 11393.36
1997/01/31 11148.13 12105.21
1997/02/28 11310.38 12200.12
1997/03/31 10737.71 11698.81
1997/04/30 11109.95 12397.23
1997/05/31 11816.25 13151.98
1997/06/30 12188.49 13741.19
1997/07/31 12474.83 14834.57
1997/08/31 12169.40 14003.54
1997/09/30 13478.33 14770.51
1997/10/31 13266.07 14277.18
1997/11/30 13893.20 14938.07
1997/12/31 14103.80 15194.56
1998/01/30 15044.05 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 112549 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Utilities Growth - Class A on September
3, 1996, when the fund started, and the current maximum 5.75% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $15,034 - a 50.34% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WORLDCOM, INC 10.0
TEL-SAVE HOLDINGS, INC. 7.9
MCI COMMUNICATIONS CORP. 7.3
GTE CORP. 5.5
AT&T CORP. 5.0
SBC COMMUNICATIONS, INC. 4.3
TITAN CORP. 4.2
TELEPORT COMMUNICATIONS GROUP, INC. CLASS A 4.0
BELL ATLANTIC CORP. 3.6
AMNEX, INC. 3.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
TELEPHONE SERVICES 57.8%
ELECTRIC POWER 10.9%
ELECTRIC & OTHER SERVICES 4.9%
TV & RADIO COMMUNICATION
EQUIPMENT 4.2%
PETROLEUM REFINERS 3.4%
ALL OTHERS 18.8% *
ROW: 1, COL: 1, VALUE: 57.8
ROW: 1, COL: 2, VALUE: 10.9
ROW: 1, COL: 3, VALUE: 4.9
ROW: 1, COL: 4, VALUE: 4.2
ROW: 1, COL: 5, VALUE: 3.4
ROW: 1, COL: 6, VALUE: 18.8
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR UTILITIES GROWTH FUND - CLASS T
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV UTILITIES - CL T 20.39% 34.42% 58.86%
FIDELITY ADV UTILITIES - CL T 16.17% 29.71% 53.30%
(INCL. 3.50% SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class T's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV UTILITIES - CL T 34.42% 38.82%
FIDELITY ADV UTILITIES - CL T 29.71% 35.36%
(INCL. 3.50% SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 112746 S00000000000001
FA Utilities Growth -CL T S&P 500
00196 SP001
1996/09/03 9650.00 10000.00
1996/09/30 9794.75 10516.69
1996/10/31 10393.05 10806.74
1996/11/30 10943.10 11623.62
1996/12/31 11101.67 11393.36
1997/01/31 11404.62 12105.21
1997/02/28 11560.98 12200.12
1997/03/31 10974.62 11698.81
1997/04/30 11345.98 12397.23
1997/05/31 12069.16 13151.98
1997/06/30 12440.51 13741.19
1997/07/31 12733.69 14834.57
1997/08/31 12420.97 14003.54
1997/09/30 13750.63 14770.51
1997/10/31 13533.46 14277.18
1997/11/30 14175.09 14938.07
1997/12/31 14379.75 15194.56
1998/01/30 15329.86 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 112749 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Utilities Growth - Class T on September
3, 1996, when the fund started, and the current maximum 3.50% sales
charge was paid. As the chart shows, by January 31, 1998, the value of
the investment would have grown to $15,330 - a 53.30% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $15,363 - a 53.63%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WORLDCOM, INC 10.0
TEL-SAVE HOLDINGS, INC. 7.9
MCI COMMUNICATIONS CORP. 7.3
GTE CORP. 5.5
AT&T CORP. 5.0
SBC COMMUNICATIONS, INC. 4.3
TITAN CORP. 4.2
TELEPORT COMMUNICATIONS GROUP, INC. CLASS A 4.0
BELL ATLANTIC CORP. 3.6
AMNEX, INC. 3.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
TELEPHONE SERVICES 57.8%
ELECTRIC POWER 10.9%
ELECTRIC & OTHER SERVICES 4.9%
TV & RADIO COMMUNICATION
EQUIPMENT 4.2%
PETROLEUM REFINERS 3.4%
ALL OTHERS 18.8% *
ROW: 1, COL: 1, VALUE: 57.8
ROW: 1, COL: 2, VALUE: 10.9
ROW: 1, COL: 3, VALUE: 4.9
ROW: 1, COL: 4, VALUE: 4.2
ROW: 1, COL: 5, VALUE: 3.4
ROW: 1, COL: 6, VALUE: 18.8
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR UTILITIES GROWTH FUND - CLASS B
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 March 3, 1997.
Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3, 1997
are those of Class T which bears a 0.50% 12b-1 fee. Had Class B's
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class B shares' contingent deferred sales charge included
in the past six months, past one year and life of fund total return
figures are 5%, 5% and 4% respectively. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV UTILITIES - CL B 20.04% 33.82% 58.15%
FIDELITY ADV UTILITIES - CL B 15.04% 28.82% 54.15%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class B's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV UTILITIES - CL B 33.82% 38.39%
FIDELITY ADV UTILITIES - CL B 28.82% 35.90%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL 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.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980226 164922 S00000000000001
FA Utilities Growth -CL B S&P 500
00189 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10150.00 10516.69
1996/10/31 10770.00 10806.74
1996/11/30 11340.00 11623.62
1996/12/31 11504.32 11393.36
1997/01/31 11818.26 12105.21
1997/02/28 11980.29 12200.12
1997/03/31 11372.67 11698.81
1997/04/30 11747.37 12397.23
1997/05/31 12496.77 13151.98
1997/06/30 12871.47 13741.19
1997/07/31 13175.28 14834.57
1997/08/31 12841.09 14003.54
1997/09/30 14219.71 14770.51
1997/10/31 13984.25 14277.18
1997/11/30 14639.45 14938.07
1997/12/31 14841.43 15194.56
1998/01/30 15415.00 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980226 164923 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Utilities Growth - Class B on September
3, 1996, when the fund started. As the chart shows, by January 31,
1998, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $15,415 - a
54.15% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WORLDCOM, INC 10.0
TEL-SAVE HOLDINGS, INC. 7.9
MCI COMMUNICATIONS CORP. 7.3
GTE CORP. 5.5
AT&T CORP. 5.0
SBC COMMUNICATIONS, INC. 4.3
TITAN CORP. 4.2
TELEPORT COMMUNICATIONS GROUP, INC. CLASS A 4.0
BELL ATLANTIC CORP. 3.6
AMNEX, INC. 3.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
TELEPHONE SERVICES 57.8%
ELECTRIC POWER 10.9%
ELECTRIC & OTHER SERVICES 4.9%
TV & RADIO COMMUNICATION
EQUIPMENT 4.2%
PETROLEUM REFINERS 3.4%
ALL OTHERS 18.8% *
ROW: 1, COL: 1, VALUE: 57.8
ROW: 1, COL: 2, VALUE: 10.9
ROW: 1, COL: 3, VALUE: 4.9
ROW: 1, COL: 4, VALUE: 4.2
ROW: 1, COL: 5, VALUE: 3.4
ROW: 1, COL: 6, VALUE: 18.8
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR UTILITIES GROWTH FUND - CLASS C
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1 fee. Returns between March 3, 1997
and November 3, 1997 are those of Class B shares and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T which bears a 0.50% 12b-1 fee. Had Class C's 12b-1 fee been
reflected, returns prior to March 3, 1997 would have been lower. Class
C shares' contingent deferred sales charge included in the past six
months, past one year and life of fund total return figures are 1%, 1%
and 0% respectively. If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV UTILITIES - CL C 20.09% 33.88% 58.23%
FIDELITY ADV UTILITIES - CL C 19.09% 32.88% 58.23%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on September 3, 1996. You can compare Class C's
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV UTILITIES - CL C 33.88% 38.43%
FIDELITY ADV UTILITIES - CL C 32.88% 38.43%
(INCL. CONTINGENT DEFERRED SALES CHARGE)
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Class C shares' cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 112633 S00000000000001
FA Utilities Growth -CL C S&P 500
00477 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10150.00 10516.69
1996/10/31 10770.00 10806.74
1996/11/30 11340.01 11623.62
1996/12/31 11504.33 11393.36
1997/01/31 11818.26 12105.21
1997/02/28 11980.29 12200.12
1997/03/31 11372.67 11698.81
1997/04/30 11747.38 12397.23
1997/05/31 12496.77 13151.98
1997/06/30 12871.48 13741.19
1997/07/31 13175.29 14834.57
1997/08/31 12841.09 14003.54
1997/09/30 14219.71 14770.51
1997/10/31 13984.25 14277.18
1997/11/30 14637.79 14938.07
1997/12/31 14849.51 15194.56
1998/01/30 15822.53 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 112636 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Utilities Growth - Class C on September
3, 1996, when the fund started. As the chart shows, by January 31,
1998, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $15,823 - a
58.23% increase on the initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WORLDCOM, INC 10.0
TEL-SAVE HOLDINGS, INC. 7.9
MCI COMMUNICATIONS CORP. 7.3
GTE CORP. 5.5
AT&T CORP. 5.0
SBC COMMUNICATIONS, INC. 4.3
TITAN CORP. 4.2
TELEPORT COMMUNICATIONS GROUP, INC. CLASS A 4.0
BELL ATLANTIC CORP. 3.6
AMNEX, INC. 3.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
TELEPHONE SERVICES 57.8%
ELECTRIC POWER 10.9%
ELECTRIC & OTHER SERVICES 4.9%
TV & RADIO COMMUNICATION
EQUIPMENT 4.2%
PETROLEUM REFINERS 3.4%
ALL OTHERS 18.8% *
ROW: 1, COL: 1, VALUE: 57.8
ROW: 1, COL: 2, VALUE: 10.9
ROW: 1, COL: 3, VALUE: 4.9
ROW: 1, COL: 4, VALUE: 4.2
ROW: 1, COL: 5, VALUE: 3.4
ROW: 1, COL: 6, VALUE: 18.8
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR UTILITIES GROWTH FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Nick Thakore, Portfolio Manager of Fidelity Advisor
Utilities Growth Fund
Q. HOW DID THE FUND PERFORM, NICK?
A. For the six months that ended January 31, 1998, the fund's Class A,
Class T, Class B and Class C shares returned 20.51%, 20.39%, 20.04%
and 20.09%, respectively. In comparison, the Standard & Poor's 500
Index had a return of 3.56%. For the 12-month period that ended on the
same date, the fund's Class A, Class T, Class B and Class C shares had
a total return of 34.85%, 34.42%, 33.82% and 33.88%, respectively,
while the S&P 500 had a 26.91% return.
Q. WHY WAS THE FUND'S PERFORMANCE STRONGER THAN THE INDEX'S,
ESPECIALLY DURING THE MOST RECENT SIX-MONTH PERIOD?
A. After advancing sharply over the previous four months, the overall
market - as reflected by the S&P 500 and other indexes that contain
stocks from a variety of sectors - made no sustained moves either up
or down from August through the end of January. However, utilities in
general, and in particular many of the telephone utility growth stocks
that form the fund's core holdings, turned in strong performances.
Q. WHAT MADE TELEPHONE UTILITIES ATTRACTIVE TO INVESTORS?
A. Deregulation has created many opportunities both for established
telephone utility companies and especially for a number of relative
newcomers that are claiming increasingly larger shares of the
long-distance telephone service market. Looking ahead, once the
regulatory issues are sorted out, many of these companies will be in a
position to offer their customers integrated packages of
long-distance, local and cellular phone service. Investors have
responded to the potential growth in earnings that these changes might
bring, as well as the healthy earnings trends already in place at many
companies.
Q. YOU INCREASED THE FUND'S INVESTMENT IN ELECTRIC UTILITIES BY ABOUT
50%. WHY?
A. The recent turmoil in Asia had two consequences that were positive
for electric utilities. First, many investors bought electric utility
stocks because of a perception that they offer more protection than
stocks in other sectors against the threats to earnings growth posed
by the unstable financial conditions in Asia. Second, volatility in
the stock market spurred a transfer of some investment funds to the
bond market, accelerating the upward move in bond prices - and
corresponding downward trend in interest rates - that was already in
progress. While all utility stocks are sensitive to interest rates,
electric utility stocks tend to be even more so, and they responded
well to this development.
Q. ON THE OTHER HAND, YOU CUT BACK SHARPLY ON THE FUND'S HOLDINGS OF
GAS UTILITIES . . .
A. The supply and demand factors affecting natural gas prices have not
been attractive, and the sector does not characteristically benefit as
much as electric utilities from falling interest rates or the move
toward investments perceived as offering greater safety. I reduced the
fund's holdings of gas utilities to about 4% of the portfolio by the
end of the period - roughly one-fifth of what they had been six months
earlier.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Tel-Save Holdings is a long-distance reseller whose stock benefited
from investors' positive reception of the company's recent agreement
to market its services through the extensive America OnLine electronic
network. Also, MCI's stock surged upward as the company was pursued by
no fewer than three corporate suitors during the period, with WorldCom
the apparent winner. Another stock that helped the fund's performance
was AT&T, which was helped by improved earnings trends and investors'
confidence in the abilities of the company's new CEO.
Q. WHICH OF THE FUND'S HOLDINGS PROVED TO BE DISAPPOINTMENTS?
A. EXCEL Communications posted earnings that were short of Wall
Street's expectations, primarily because of higher-than-expected
marketing costs. Sonat suffered because it is one of the gas companies
most sensitive to natural gas prices, which were weak during the
period. The fund no longer holds this stock.
Q. WHAT'S YOUR OUTLOOK, NICK?
A. I don't foresee much change for the fund's positioning. I will
continue to emphasize telephone utility stocks because, based on
current and projected price-to-earnings multiples, I think they offer
better growth potential than the shares of electric and gas companies.
At the same time, I have become more cautious about the short-term
investment environment. My increased emphasis on electric utilities
reflects this outlook.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$24 million
MANAGER: Nick Thakore, since August 1997;
joined Fidelity in 1993
(checkmark)
ADVISOR UTILITIES GROWTH FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.1%
SHARES VALUE (NOTE 1)
BROADCASTING - 1.8%
CABLE TV OPERATORS - 1.8%
Cable Michigan, Inc. 325 $ 7,304
RCN Corp. 10,600 443,875
TCI Satellite Entertainment, Inc.
Class A (a) 10 55
Tele-Communications, Inc. (TCI Group),
Series A (a) 127 3,556
Tele-Communications, Inc.
(TCI Ventures Group),
Series A (a) 73 2,154
456,944
CELLULAR - 1.1%
CELLULAR & COMMUNICATION SERVICES - 1.1%
Cellnet Data Systems, Inc. (a) 1,200 11,550
Teleglobe, Inc. 8,000 261,070
Telephone & Data Systems, Inc. 400 17,600
290,220
COAL - 0.2%
MAPCO, Inc. 1,100 51,356
COMMUNICATIONS EQUIPMENT - 0.9%
TELEPHONE INTERCONNECT SYSTEMS - 0.9%
Intermedia Communications, Inc. (a) 3,900 239,850
COMPUTER SERVICES & SOFTWARE - 0.7%
CAD/CAM/CAE - 0.7%
ICG Communications, Inc. (a) 7,250 178,531
ELECTRIC UTILITY - 16.2%
COMBINATION UTILITIES, NEC - 0.4%
Citizens Utilities Co. Class B 10,100 95,950
ELECTRIC & OTHER SERVICES - 4.9%
CMS Energy Corp. 2,300 97,894
Commonwealth Energy Systems (SBI) (a) 7,200 247,500
Consolidated Edison, Inc. 6,200 256,138
DPL, Inc. 2,400 43,950
Enova Corp. 1,300 32,988
Hidroelectrica de Cantabrico SA 100 4,277
IES Industries, Inc. 500 18,344
LG&E Energy Corp. 400 9,350
Montana Power Co. 4,300 129,000
NIPSCO Industries, Inc. 1,000 51,063
New York State Electric & Gas Corp. 5,800 204,450
PECO Energy Co. 1,500 28,406
PacifiCorp. 1,900 44,056
Public Service Co. of New Mexico 1,500 33,938
Rochester Gas & Electric Corp. 1,400 43,925
Sierra Pacific Resources 300 10,613
Utilicorp United, Inc. 200 7,075
1,262,967
ELECTRIC POWER - 10.9%
American Electric Power Co., Inc. 2,500 123,281
Baycorp Holdings Ltd. (a) 100 656
Boston Edison Co. 9,300 346,425
Central & South West Corp. 1,700 46,006
Central Louisiana Electric Co., Inc. 1,800 55,913
DQE, Inc. 1,400 45,763
Duke Energy Corp. 11,494 622,831
Entergy Corp. 400 11,450
FPL Group, Inc. 4,000 229,500
GPU, Inc. 5,600 220,150
Houston Industries, Inc. 452 11,809
SHARES VALUE (NOTE 1)
IPALCO Enterprises, Inc. 12,000 $ 501,000
Kansas City Power & Light Co. 400 11,350
New England Electric System 7,500 315,000
Pinnacle West Capital Corp. 3,400 136,000
Southern Co. 1,000 24,313
TECO Energy, Inc. 300 7,781
Texas Utilities Co. 1,990 81,839
United Illuminating Co. 400 17,050
2,808,117
TOTAL ELECTRIC UTILITY 4,167,034
ELECTRICAL EQUIPMENT - 4.2%
TV & RADIO COMMUNICATION EQUIPMENT - 4.2%
Titan Corp. (a) 180,700 1,084,200
GAS - 4.1%
GAS & OTHER SERVICES - 0.4%
MDU Resources Group, Inc. 2,500 74,688
UGI Corp. 1,050 29,728
Western Resources, Inc. 300 12,225
116,641
GAS DISTRIBUTION - 2.2%
Eastern Enterprises Co. 3,300 136,538
Energen Corp. 800 31,200
K N Energy, Inc. 1,300 65,325
MCN Corp. 4,000 148,000
National Fuel Gas Co. 400 18,400
NICOR, Inc. 400 16,100
Pacific Enterprises 2,950 106,384
Peoples Energy Corp. 500 18,875
WICOR, Inc. 300 13,294
554,116
GAS TRANSMISSION - 0.9%
Williams Companies, Inc. 7,750 220,875
GAS TRANSMISSION & DISTRIBUTION - 0.6%
Columbia Gas System, Inc. (The) 1,650 125,194
Equitable Resources, Inc. 450 14,794
ONEOK, Inc. 700 23,931
163,919
TOTAL GAS 1,055,551
HOLDING COMPANIES - 0.3%
HOLDING COMPANY OFFICES, NEC - 0.3%
CINergy Corp. 1,900 65,550
INDEPENDENT POWER - 0.0%
STEAM SUPPLY - 0.0%
Bonneville Pacific Corp. (a) 300 525
METALS & MINING - 0.9%
NONFERROUS ROLLING & DRAWING - 0.9%
Superior Telecom, Inc. (a) 6,100 240,950
OIL & GAS - 3.9%
CRUDE PETROLEUM & GAS - 0.5%
EEX Corp. (a) 13,295 112,177
Occidental Petroleum Corp. 600 15,300
127,477
PETROLEUM REFINERS - 3.4%
Coastal Corp. (The) 14,875 862,750
TOTAL OIL & GAS 990,227
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - 57.8%
AT&T Corp. 20,500 $ 1,283,813
ALLTEL Corp. 400 17,100
AMNEX, Inc. (a) 640,300 900,422
BCE, Inc. 2,500 78,321
Bell Atlantic Corp. 10,000 925,625
BellSouth Corp. 6,800 411,825
Cincinnati Bell, Inc. 7,200 258,300
Commonwealth Telephone
Enterprises, Inc. 866 20,351
EXCEL Communications, Inc. (a) 32,800 518,650
France Telecom SA (a) 632 26,941
GTE Corp. 25,900 1,413,169
ITC Deltacom, Inc. 100 1,913
MCI Communications Corp. 40,500 1,880,719
NEXTLINK Communications, Inc.
Class A 3,000 74,625
Qwest Communications
International, Inc. 100 7,088
SBC Communications, Inc. 14,300 1,111,825
Tel-Save Holdings, Inc. (a) 85,100 2,021,125
Teleport Communications Group, Inc.
Class A (a) 18,500 1,032,531
Winstar Communications, Inc. (a) 8,900 290,919
WorldCom, Inc. (a) 71,575 2,563,280
14,838,542
TOTAL COMMON STOCKS
(Cost $21,073,725) 23,659,480
CONVERTIBLE PREFERRED STOCKS - 0.1%
ELECTRIC UTILITY - 0.1%
COMBINATION UTILITIES, NEC - 0.1%
Citizens Utilities Trust $2.50 EPPICS
(Cost $19,495) 400 19,250
CASH EQUIVALENTS - 7.8%
Taxable Central Cash Fund (b)
(Cost $2,006,443) 2,006,443 2,006,443
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $23,099,663) $ 25,685,173
SECURITY TYPE ABBREVIATIONS
EPPICS - Equity Providing Preferred
Income Convertible Securities
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $23,099,663. Net unrealized appreciation
aggregated $2,585,510 of which $2,928,132 related to appreciated
investment securities and $342,622 related to depreciated investment
securities.
ADVISOR UTILITIES GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
25,685,173
(COST $23,099,663) -
SEE ACCOMPANYING SCHEDULE
CASH 7
FOREIGN CURRENCY HELD AT VALUE (COST $52) 52
RECEIVABLE FOR INVESTMENTS SOLD
694,887
RECEIVABLE FOR FUND SHARES SOLD
239,053
DIVIDENDS RECEIVABLE 34,050
INTEREST RECEIVABLE 11,574
PREPAID EXPENSES 10,718
TOTAL ASSETS
26,675,514
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,624,288
PAYABLE FOR FUND SHARES REDEEMED 17,452
ACCRUED MANAGEMENT FEE 7,625
DISTRIBUTION FEES PAYABLE 9,349
OTHER PAYABLES AND ACCRUED EXPENSES 24,833
TOTAL LIABILITIES
1,683,547
NET ASSETS $
24,991,967
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
21,868,904
DISTRIBUTIONS IN EXCESS OF
(15,176)
NET INVESTMENT INCOME
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
552,633
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
2,585,606
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
24,991,967
</TABLE>
CALCULATION OF MAXIMUM $14.39
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($1,097,613 (DIVIDED BY)
76,252 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $15.27
(100/94.25 OF $14.39)
CLASS T: $14.36
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($13,669,677 (DIVIDED BY)
951,697 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $14.88
(100/96.50 OF $14.36)
CLASS B: $14.29
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($5,012,096 (DIVIDED BY)350,657
SHARES) A
CLASS C: $14.31
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($947,365 (DIVIDED BY) 66,194
SHARES) A
INSTITUTIONAL CLASS: $14.39
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($4,265,216 (DIVIDED BY) 296,450 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 105,761
DIVIDENDS
INTEREST 37,661
TOTAL INCOME 143,422
EXPENSES
MANAGEMENT FEE $ 46,225
TRANSFER AGENT FEES 19,098
DISTRIBUTION FEES 37,538
ACCOUNTING FEES AND EXPENSES 30,011
NON-INTERESTED TRUSTEES' COMPENSATION 25
CUSTODIAN FEES AND EXPENSES 5,809
REGISTRATION FEES 34,940
AUDIT 16,678
LEGAL 226
REPORTS TO SHAREHOLDERS 4,792
MISCELLANEOUS 54
TOTAL EXPENSES BEFORE REDUCTIONS 195,396
EXPENSE REDUCTIONS (45,157) 150,239
NET INVESTMENT INCOME (LOSS) (6,817)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 1,940,958
FOREIGN CURRENCY TRANSACTIONS 1,920 1,942,878
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 1,135,477
ASSETS AND LIABILITIES IN 107 1,135,584
FOREIGN CURRENCIES
NET GAIN (LOSS) 3,078,462
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,071,645
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (6,817) $ 52,435
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 1,942,878 129,499
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 1,135,584 1,450,022
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,071,645 1,631,956
DISTRIBUTIONS TO SHAREHOLDERS (36,509) (13,446)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME (8,359) -
FROM NET REALIZED GAIN (1,470,557) (43,681)
TOTAL DISTRIBUTIONS (1,515,425) (57,127)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 11,522,506 10,325,481
REDEMPTION FEES 12,083 848
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,090,809 11,901,158
NET ASSETS
BEGINNING OF PERIOD 11,901,158 -
END OF PERIOD (INCLUDING UNDER (OVER) DISTRIBUTION OF NET INVESTMENT INCOME OF $(15,176) AND $ 24,991,967 $ 11,901,158
$38,999, RESPECTIVELY)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.07 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .01 .12
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.09
TOTAL FROM INVESTMENT OPERATIONS 2.56 3.21
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) (.03)
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.20) (.11)
TOTAL DISTRIBUTIONS (1.25) (.14)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.39 $ 13.07
TOTAL RETURN B, C 20.51% 32.36%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,098 $ 531
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.71% A, G 1.75% A
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .14% A 1.09% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31, 1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.03 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.09
TOTAL FROM INVESTMENT OPERATIONS 2.54 3.17
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02) (.03)
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.19) (.11)
TOTAL DISTRIBUTIONS (1.22) (.14)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.36 $ 13.03
TOTAL RETURN B, C 20.39% 31.96%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,670 $ 7,085
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.95% A, G 2.00% A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.11)% A .79% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 (LOSS) PER SHARE
HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E
FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO JULY 31, 1997. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.01 $ 11.76
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) .02
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.53 1.23
TOTAL FROM INVESTMENT OPERATIONS 2.49 1.25
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.03) -
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.18) -
TOTAL DISTRIBUTIONS (1.22) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.29 $ 13.01
TOTAL RETURN B, C 20.04% 10.63%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 5,012 $ 2,039
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.45% A, G 2.50% A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.59)% A .32% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 NET
INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E
FOR THE PERIOD MARCH 3,
1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY 31, 1997. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998
SELECTED PER-SHARE DATA (UNAUDITED) E
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.90
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.55
TOTAL FROM INVESTMENT OPERATIONS 1.53
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02)
IN EXCESS OF NET INVESTMENT INCOME (.00)
FROM NET REALIZED GAIN (1.10)
TOTAL DISTRIBUTIONS (1.12)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 14.31
TOTAL RETURN B, C 11.59%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 947
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.44% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.52)% A
PORTFOLIO TURNOVER 280% A
AVERAGE COMMISSION RATE H $ .0263
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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
NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER
3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY 31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.09 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .03 .14
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.10
TOTAL FROM INVESTMENT OPERATIONS 2.58 3.24
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.07) (.04)
IN EXCESS OF NET INVESTMENT INCOME (.02) -
FROM NET REALIZED GAIN (1.20) (.11)
TOTAL DISTRIBUTIONS (1.29) (.15)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.39 $ 13.09
TOTAL RETURN B, C 20.68% 32.68%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,265 $ 2,246
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.46% A, G 1.50% A
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .40% A 1.29% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE
NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES TO
FINANCIAL
STATEMENTS). 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Utilities Growth 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, Class C 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received and gains and losses between
trade date and settlement date on purchases and sales of securities.
The effects of changes in foreign currency exchange rates on
investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date
, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 may result in distribution
reclassifications. The fund also utilized earnings and profits
distributed to shareholders on redemptions of shares as a part of the
dividend paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distribution in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $29,231,113 and $20,233,937, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus
a fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
an annualized rate of .60% of average net assets.
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%*
CLASS C 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 $ 879 $ 879
CLASS T 21,820 21,820
CLASS B 14,153 3,539
CLASS C 686 -
$ 37,538 $ 26,238
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 336
CLASS T $ 727
CLASS B $ 231
CLASS C $ 340
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 11,828 $ 8,137
CLASS T 13,354 10,329
CLASS B 237 0 *
CLASS C 0 0*
$ 25,419 $ 18,466
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC** $ 1,326 .38 *
CLASS T FIIOC** 11,583 .27 *
CLASS B FIIOC** 3,413 .24 *
CLASS C FIIOC** 182 .27 *
INSTITUTIONAL CLASS FIIOC** 2,594 .16 *
$ 19,098
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $3,555 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 6,445
CLASS T 2.00% 12,445
CLASS B 2.50% 14,241
CLASS C 2.50% 3,625
INSTITUTIONAL CLASS 1.50% 4,882
$ 41,638
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $2,966 under this arrangement.
In addition, the fund has entered into arrangements with its
custodian 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 $553 under the custodian
arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR was record owner of approximately 6% of
the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B,C
CLASS A
FROM NET INVESTMENT INCOME $ 1,806 $ 816
IN EXCESS OF NET INVESTMENT INCOME 414 -
FROM NET REALIZED GAIN 65,646 2,993
TOTAL $ 67,866 $ 3,809
CLASS T
FROM NET INVESTMENT INCOME $ 13,576 $ 6,500
IN EXCESS OF NET INVESTMENT INCOME 3,108 -
FROM NET REALIZED GAIN 746,560 23,832
TOTAL $ 763,244 $ 30,332
CLASS B
FROM NET INVESTMENT INCOME $ 4,607 $ -
IN EXCESS OF NET INVESTMENT INCOME 1,055 -
FROM NET REALIZED GAIN 266,559 -
TOTAL $ 272,221 $ -
CLASS C
FROM NET INVESTMENT INCOME $ 251 $ -
IN EXCESS OF NET INVESTMENT INCOME 57 -
FROM NET REALIZED GAIN 16,938 -
TOTAL $ 17,246 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 16,269 $ 6,130
IN EXCESS OF NET INVESTMENT INCOME 3,725 -
FROM NET REALIZED GAIN 374,854 16,856
TOTAL $ 394,848 $ 22,986
$ 1,515,425 $ 57,127
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
C DISTRIBUTIONS FOR CLASS A , CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B,C 1998 A 1997 B,C
CLASS A 37,900 50,784 $ 525,716 $ 550,067
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 4,614 351 61,624 3,875
SHARES REDEEMED (6,876) (10,521) (95,816) (126,974)
NET INCREASE (DECREASE) 35,638 40,614 $ 491,524 $ 426,968
CLASS T 494,330 599,685 $ 6,827,185 $ 6,865,905
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 53,698 2,654 715,847 29,247
SHARES REDEEMED (140,029) (58,641) (1,907,528) (701,040)
NET INCREASE (DECREASE) 407,999 543,698 $ 5,635,504 $ 6,194,112
CLASS B 203,308 159,349 $ 2,796,640 $ 1,941,989
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 15,243 - 202,512 -
SHARES REDEEMED (24,598) (2,645) (320,723) (32,964)
NET INCREASE (DECREASE) 193,953 156,704 $ 2,678,429 $ 1,909,025
CLASS C 65,031 - $ 908,367 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,164 - 15,529 -
SHARES REDEEMED (1) - (12) -
NET INCREASE (DECREASE) 66,194 - $ 923,884 $ -
INSTITUTIONAL CLASS 193,036 180,368 $ 2,754,350 $ 1,895,917
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 22,978 1,242 307,065 13,709
SHARES REDEEMED (91,195) (9,979) (1,268,250) (114,250)
NET INCREASE (DECREASE) 124,819 171,631 $ 1,793,165 $ 1,795,376
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS A , CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,685
CLASS T 7,671
CLASS B 13,022
CLASS C 3,463
INSTITUTIONAL CLASS 5,099
$ 34,940
PROXY VOTING RESULTS
A special meeting of the funds' shareholders was held on September 17,
1997. The results of votes taken among shareholders on proposals are
listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
RALPH F. COX
AFFIRMATIVE 57,903,244.044 98.066
WITHHELD 1,141,937.251 1.934
TOTAL 59,045,181.295 100.000
PHYLLIS BURKE DAVIS
AFFIRMATIVE 57,904,814.528 98.069
WITHHELD 1,140,366.767 1.931
TOTAL 59,045,181.295 100.000
ROBERT M. GATES
AFFIRMATIVE 57,879,136.486 98.025
WITHHELD 1,166,044.809 1.975
TOTAL 59,045,181.295 100.000
EDWARD C. JOHNSON 3D
AFFIRMATIVE 57,896,786.565 98.055
WITHHELD 1,148,394.730 1.945
TOTAL 59,045,181.295 100.000
E. BRADLEY JONES
AFFIRMATIVE 57,897,315.886 98.056
WITHHELD 1,147,865.409 1.944
TOTAL 59,045,181.295 100.000
DONALD J. KIRK
AFFIRMATIVE 57,909,771.510 98.077
WITHHELD 1,135,409.785 1.923
TOTAL 59,045,181.295 100.000
# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 57,907,706.022 98.074
WITHHELD 1,137,475.273 1.926
TOTAL 59,045,181.295 100.000
WILLIAM O. MCCOY
AFFIRMATIVE 57,907,818.657 98.074
WITHHELD 1,137,362.638 1.926
TOTAL 59,045,181.295 100.000
GERALD C. MCDONOUGH
AFFIRMATIVE 57,902,025.368 98.064
WITHHELD 1,143,155.927 1.936
TOTAL 59,045,181.295 100.000
MARVIN L. MANN
AFFIRMATIVE 57,912,967.933 98.082
WITHHELD 1,132,213.362 1.918
TOTAL 59,045,181.295 100.000
ROBERT C. POZEN
AFFIRMATIVE 57,911,186.572 98.079
WITHHELD 1,133,994.723 1.921
TOTAL 59,045,181.295 100.000
THOMAS R. WILLIAMS
AFFIRMATIVE 57,897,766.878 98.057
WITHHELD 1,147,414.417 1.943
TOTAL 59,045,181.295 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. and Price
Waterhouse LLP as independent accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 56,463,250.131 95.627
AGAINST 946,012.589 1.602
ABSTAIN 1,635,918.575 2.771
TOTAL 59,045,181.295 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
AFFIRMATIVE 43,059,373.430 92.162
AGAINST 1,624,371.900 3.477
ABSTAIN 2,037,576.965 4.361
TOTAL 46,721,322.295 100.000
FIDELITY ADVISOR CONSUMER INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 478,059.734 95.892
AGAINST 11,175.817 2.242
ABSTAIN 9,303.171 1.866
TOTAL 498,538.722 100.000
BROKER NON-VOTES 95,912.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 37,370.697 100.000
AGAINST 0.000 0.000
ABSTAIN 0.000 0.000
TOTAL 37,370.697 100.000
BROKER NON-VOTES 19,037.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 333,001.486 94.994
AGAINST 9,933.817 2.834
ABSTAIN 7,615.510 2.172
TOTAL 350,550.813 100.000
BROKER NON-VOTES 68,478.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 24,691.099 95.625
AGAINST 0.000 0.000
ABSTAIN 1,129.661 4.375
TOTAL 25,820.760 100.000
BROKER NON-VOTES 4,335.000
FIDELITY ADVISOR CYCLICAL INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 194,518.087 91.926
AGAINST 8,248.339 3.898
ABSTAIN 8,837.573 4.176
TOTAL 211,603.999 100.000
BROKER NON-VOTES 52,076.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 14,916.538 93.647
AGAINST 0.000 0.000
ABSTAIN 1,012.000 6.353
TOTAL 15,928.538 100.000
BROKER NON-VOTES 4,363.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 77,998.098 89.104
AGAINST 2,457.339 2.807
ABSTAIN 7,080.573 8.089
TOTAL 87,536.010 100.000
BROKER NON-VOTES 22,056.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 12,828.953 100.000
AGAINST 0.000 0.000
ABSTAIN 0.000 0.000
TOTAL 12,828.953 100.000
BROKER NON-VOTES 2,463.000
FIDELITY ADVISOR FINANCIAL SERVICES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,265,266.761 88.300
AGAINST 134,086.411 5.226
ABSTAIN 166,075.369 6.474
TOTAL 2,565,428.541 100.000
BROKER NON-VOTES 698,438.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 187,717.686 89.936
AGAINST 6,937.557 3.324
ABSTAIN 14,068.360 6.740
TOTAL 208,723.603 100.000
BROKER NON-VOTES 87,255.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 1,734,196.110 87.691
AGAINST 110,324.666 5.579
ABSTAIN 133,091.193 6.730
TOTAL 1,977,611.969 100.000
BROKER NON-VOTES 479,090.000
PROPOSAL 3 - CONTINUED
FIDELITY ADVISOR FINANCIAL SERVICES - CONTINUED
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 216,076.772 91.751
AGAINST 6,748.188 2.866
ABSTAIN 12,677.252 5.383
TOTAL 235,502.212 100.000
BROKER NON-VOTES 58,701.000
FIDELITY ADVISOR HEALTH CARE
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,605,175.249 90.401
AGAINST 108,745.891 3.773
ABSTAIN 167,886.931 5.826
TOTAL 2,881,808.071 100.000
BROKER NON-VOTES 806,586.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 183,609.663 92.481
AGAINST 10,078.848 5.077
ABSTAIN 4,848.799 2.442
TOTAL 198,537.310 100.000
BROKER NON-VOTES 77,373.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 1,975,729.914 90.942
AGAINST 84,344.345 3.883
ABSTAIN 112,437.936 5.175
TOTAL 2,172,512.195 100.000
BROKER NON-VOTES 536,412.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 211,950.969 93.228
AGAINST 4,446.698 1.956
ABSTAIN 10,950.196 4.816
TOTAL 227,347.863 100.000
BROKER NON-VOTES 64,551.000
FIDELITY ADVISOR TECHNOLOGY
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,249,390.478 89.128
AGAINST 114,053.752 4.519
ABSTAIN 160,332.055 6.353
TOTAL 2,523,776.285 100.000
BROKER NON-VOTES 849,931.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 205,751.863 90.634
AGAINST 5,248.401 2.312
ABSTAIN 16,013.693 7.054
TOTAL 227,013.957 100.000
BROKER NON-VOTES 78,736.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 1,802,432.418 88.644
AGAINST 98,797.133 4.858
ABSTAIN 132,117.596 6.498
TOTAL 2,033,347.147 100.000
BROKER NON-VOTES 682,796.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 140,308.155 90.242
AGAINST 4,246.218 2.731
ABSTAIN 10,924.766 7.027
TOTAL 155,479.139 100.000
BROKER NON-VOTES 56,015.000
FIDELITY ADVISOR UTILITIES GROWTH
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 602,239.977 96.023
AGAINST 4,037.681 0.644
ABSTAIN 20,904.080 3.333
TOTAL 627,181.738 100.000
BROKER NON-VOTES 96,340.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS A OF CLASS A
AFFIRMATIVE 30,230.234 96.429
AGAINST 440.529 1.405
ABSTAIN 679.109 2.166
TOTAL 31,349.872 100.000
BROKER NON-VOTES 4,596.000
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS T OF CLASS T
AFFIRMATIVE 319,775.898 93.235
AGAINST 3,597.152 1.048
ABSTAIN 19,606.464 5.717
TOTAL 342,979.514 100.000
BROKER NON-VOTES 62,405.000
PROPOSAL 3 - CONTINUED
FIDELITY ADVISOR UTILITIES GROWTH - CONTINUED
# OF % OF
SHARES VOTED SHARES VOTED
OF CLASS B OF CLASS B
AFFIRMATIVE 95,940.887 99.359
AGAINST 0.000 0.000
ABSTAIN 618.507 0.641
TOTAL 96,559.394 100.000
BROKER NON-VOTES 21,880.000
PROPOSAL 4
To amend the Declaration of Trust to eliminate the requirement that
shareholders be notified in the event of an appointment of a trustee
within three months of the appointment.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 43,054,638.285 91.646
AGAINST 1,293,400.432 2.754
ABSTAIN 2,631,057.578 5.600
TOTAL 46,979,096.295 100.000
BROKER NON-VOTES 12,066,085.000
PROPOSAL 5
To amend the Declaration of Trust to clarify that the Trustees may
authorize the investment of all of a fund's assets in another open-end
investment company with substantially the same investment objective
and policies.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 40,990,623.684 87.734
AGAINST 2,750,475.964 5.887
ABSTAIN 2,980,221.647 6.379
TOTAL 46,721,321.295 100.000
BROKER NON-VOTES 12,323,860.000
PROPOSAL 6
To adopt a new fundamental investment policy for the fund that would
permit it to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.
FIDELITY ADVISOR CONSUMER INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 457,257.094 91.719
AGAINST 31,261.290 6.271
ABSTAIN 10,020.338 2.010
TOTAL 498,538.722 100.000
BROKER NON-VOTES 95,912.000
FIDELITY ADVISOR CYCLICAL INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 194,062.694 91.710
AGAINST 8,531.732 4.032
ABSTAIN 9,009.573 4.258
TOTAL 211,603.999 100.000
BROKER NON-VOTES 52,076.000
FIDELITY ADVISOR FINANCIAL SERVICES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,183,875.429 85.127
AGAINST 196,032.597 7.641
ABSTAIN 185,520.515 7.232
TOTAL 2,565,428.541 100.000
BROKER NON-VOTES 698,438.000
FIDELITY ADVISOR HEALTH CARE
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,423,136.531 84.084
AGAINST 311,696.569 10.816
ABSTAIN 146,974.971 5.100
TOTAL 2,881,808.071 100.000
BROKER NON-VOTES 806,586.000
FIDELITY ADVISOR TECHNOLOGY
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,186,398.196 86.632
AGAINST 155,622.035 6.166
ABSTAIN 181,755.054 7.202
TOTAL 2,523,775.285 100.000
BROKER NON-VOTES 849,932.000
FIDELITY ADVISOR UTILITIES GROWTH
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 579,091.722 92.332
AGAINST 18,202.745 2.903
ABSTAIN 29,887.271 4.765
TOTAL 627,181.738 100.000
BROKER NON-VOTES 93,340.000
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
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
(dagger) CUSTODIAN FOR FIDELITY ADVISOR NATURAL RESOURCES FUND ONLY
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
New York, NY
Brown Brothers Harriman & Co. (dagger)
Boston, MA
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 International Capital
Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant Growth Fund
SM
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 Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(REGISTERED TRADEMARK)
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
FOCUS FUNDS
INSTITUTIONAL CLASS
Consumer Industries
Cyclical Industries
Financial Services
Health Care
Natural Resources
Technology
Utilities Growth
SEMIANNUAL REPORT
JANUARY 31, 1998
CONTENTS
PERFORMANCE OVERVIEW 4
CONSUMER INDUSTRIES 5 PERFORMANCE AND INVESTMENT SUMMARY
6 FUND TALK: THE MANAGER'S OVERVIEW
7 INVESTMENTS
10 FINANCIAL STATEMENTS
14 NOTES TO THE FINANCIAL STATEMENTS
CYCLICAL INDUSTRIES 19 PERFORMANCE AND INVESTMENT SUMMARY
20 FUND TALK: THE MANAGER'S OVERVIEW
21 INVESTMENTS
24 FINANCIAL STATEMENTS
28 NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL SERVICES 33 PERFORMANCE AND INVESTMENT SUMMARY
34 FUND TALK: THE MANAGERS' OVERVIEW
35 INVESTMENTS
37 FINANCIAL STATEMENTS
41 NOTES TO THE FINANCIAL STATEMENTS
HEALTH CARE 46 PERFORMANCE AND INVESTMENT SUMMARY
47 FUND TALK: THE MANAGER'S OVERVIEW
48 INVESTMENTS
50 FINANCIAL STATEMENTS
54 NOTES TO THE FINANCIAL STATEMENTS
NATURAL RESOURCES 59 PERFORMANCE AND INVESTMENT SUMMARY
60 FUND TALK: THE MANAGER'S OVERVIEW
61 INVESTMENTS
64 FINANCIAL STATEMENTS
68 NOTES TO THE FINANCIAL STATEMENTS
TECHNOLOGY 73 PERFORMANCE AND INVESTMENT SUMMARY
74 FUND TALK: THE MANAGER'S OVERVIEW
75 INVESTMENTS
78 FINANCIAL STATEMENTS
82 NOTES TO THE FINANCIAL STATEMENTS
UTILITIES GROWTH 87 PERFORMANCE AND INVESTMENT SUMMARY
88 FUND TALK: THE MANAGER'S OVERVIEW
89 INVESTMENTS
91 FINANCIAL STATEMENTS
95 NOTES TO THE FINANCIAL STATEMENTS
PROXY VOTING RESULTS 100
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS 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 FUNDS 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.
U.S. STOCK MARKET ENVIRONMENT
Economic trouble in Southeast Asia and an ensuing "flight to safety"
mentality on the part of investors played leading roles in the
direction of the U.S. stock market over the past six months. Closer to
home, economic conditions in the U.S. continued to be favorable, with
moderate growth, low inflation and low interest rates providing a rosy
backdrop for both stocks and bonds. The Standard & Poor's 500 Index -
a measure of the U.S. stock market based on the average performance of
500 widely held stocks - returned 3.56% during this time, while the
Russell 2000 Index - a barometer of small-stock performance - gained
4.42%. The Dow Jones Industrial Average - an index of 30 blue-chip
stocks - had a six-month return of -3.03%.
After a long stretch of large-company stock dominance, several
developments triggered a turnaround. Multiple currency devaluations in
Southeast Asia caused several large U.S. multinational companies to
announce earnings shortfalls in August and investors grew wary. In the
months of August and September, in fact, small-company stocks
outperformed their larger counterparts due to stronger relative
earnings growth. Thousands of miles away, however, an imposing
obstacle loomed in the form of a wide-scale economic crisis. While
signs of economic deterioration in Southeast Asia had been evident as
far back as June, it wasn't until several larger markets - most
notably Hong Kong - became afflicted that investors in world markets
began to worry. In late October, spurred by several major currency
collapses throughout Asia, many world markets tumbled. In the U.S.,
for example, the Dow Jones average fell 550-plus points one day only
to reclaim a good portion of its losses back the next.
Another byproduct of the Asian crisis was the aforementioned flight to
safety. Concerned about global volatility, many investors rotated back
to stocks of companies with minimal international business exposure.
Larger-cap stocks - many of which tend to offer more stable earnings
growth than smaller stocks - also gained favor.
Two sectors - TECHNOLOGY and UTILITIES - exemplified the varying
effects of the Asian dilemma. Since Southeast Asia accounts for a
considerable portion of the world's technology growth and demand, many
U.S. technology stocks - particularly those involved in semiconductor
production - declined sharply. Disappointing earnings and a trend
toward cheaper personal-computer prices also spelled trouble for many
tech stocks. Utility stocks, on the other hand, benefited from the
flight to safety. While industry deregulation was a constant source of
uncertainty, investors were drawn to utility stocks for their domestic
emphasis.
As has been the case for the past couple of years, HEALTH CARE and
FINANCE stocks continued to perform well. In the health care sector,
stocks of larger pharmaceutical companies fared very well, due mostly
to enthusiasm for new-product development and an acceleration in the
Federal Drug Administration's approval process. Finance stocks,
meanwhile, performed well due to increased industry consolidation,
declining interest rates and a healthy economy that led to increased
financing activity.
On the NATURAL RESOURCES front, most commodity prices - including
those of oil, natural gas and gold - stumbled dramatically as it
became clear that Asian consumption would weaken. Accordingly, many
natural-resource stocks faltered during the period. CYCLICAL STOCKS -
those whose performance typically moves in line with prevailing
economic conditions - struggled over the past three months due to an
anticipated slowdown in Asian product demand. In particular, stocks of
many paper- and aluminum-related companies were hurt. Lastly, stocks
in the CONSUMER NONDURABLES area generated positive gains. Retail
companies, for instance, experienced encouraging sales growth due to
increased consumer confidence and a heavier reliance on information
technology designed to streamline store space and increase revenues.
ADVISOR CONSUMER INDUSTRIES FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
AUGUST 31, 1993 MONTHS YEAR FUND
FIDELITY ADV CONSUMER - INST CL 8.86% 30.04% 48.03%
S&P 500 (REGISTERED TRADEMARK) 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
AUGUST 31, 1993 YEAR FUND
FIDELITY ADV CONSUMER - INST CL 30.04% 32.05%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165259 S00000000000001
FA Consumer Ind -CL I S&P 500
00205 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10560.00 10516.69
1996/10/31 10680.00 10806.74
1996/11/30 11050.00 11623.62
1996/12/31 10860.20 11393.36
1997/01/31 11383.58 12105.21
1997/02/28 11524.49 12200.12
1997/03/31 11192.34 11698.81
1997/04/30 11383.58 12397.23
1997/05/31 12259.24 13151.98
1997/06/30 12883.27 13741.19
1997/07/31 13597.89 14834.57
1997/08/31 13124.83 14003.54
1997/09/30 13966.13 14770.51
1997/10/31 13723.24 14277.18
1997/11/30 14407.74 14938.07
1997/12/31 14871.94 15194.56
1998/01/30 14803.03 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165301 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Consumer Industries - Institutional Class
on September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$14,803 - a 48.03% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WAL-MART STORES, INC. 6.0
COCA-COLA CO. (THE) 5.4
PROCTER & GAMBLE CO. 4.9
GILLETTE CO. 4.6
PEPSICO, INC. 4.3
DISNEY (WALT) CO. 4.1
PHILIP MORRIS COMPANIES, INC. 3.8
HOME DEPOT, INC. 1.9
SAFEWAY, INC. 1.8
TIME WARNER, INC. 1.7
TOP INDUSTRIES AS OF JANUARY 31, 1998
SOFT DRINKS 9.7%
SOAPS & DETERGENT S 8.2%
GENERAL MERCHANDISE STORES 7.1%
COSMETICS 6.5%
MOTION PICTURE PRODUCTION 5.4%
ALL OTHERS 63.1%
ROW: 1, COL: 1, VALUE: 63.1
ROW: 1, COL: 2, VALUE: 5.4
ROW: 1, COL: 3, VALUE: 6.5
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 8.199999999999999
ROW: 1, COL: 6, VALUE: 9.699999999999999
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CONSUMER INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Douglas Chase, Portfolio Manager of Fidelity Advisor Consumer
Industries Fund
Q. HOW DID THE FUND PERFORM, DOUG?
Q. WHAT WAS THE MARKET ENVIRONMENT LIKE DURING THE PAST SIX MONTHS?
A. It was a volatile one. In August, we saw a big decline in some
stocks of companies with international exposure as problems in Asia
erupted, beginning with Thailand. Those events, combined with downward
revisions in earnings reported by Coca-Cola and Gillette, triggered a
decline in stock prices. In October, fears grew that more economies
would be pulled into a worldwide recession when South Korea, the
world's 11th largest economy, experienced its own troubles. Good but
unexciting earnings reports also caused the market to lose its
momentum, with stock prices spiraling downward. The dollar
strengthened, hurting prospects for multinational profits, and at
times global recession was predicted.
Q. WHAT STRATEGY DID YOU PURSUE IN THIS ENVIRONMENT?
A. When I took over the fund in August, its emphasis was on
small-capitalization stocks. I diversified the fund, placing greater
emphasis on large-cap stocks, particularly in August when I felt they
were undervalued. Also at that time of uncertainty in the market, I
believed that there could be a "flight to quality" to large-cap
companies, because they tend to have more predictable earnings growth.
I took the opportunity to sell many of the small-cap stocks in the
fund that had performed well, and shifted assets to large-cap stocks.
Q. WHICH STOCKS PERFORMED WELL?
A. Wal-Mart, the fund's number one holding, has been a terrific stock.
The company changed the way retailing works in this country. Wal-Mart
invested in information technology to hold inventories down and keep
exactly what the customer wants on the shelf, and now it allocates
floor space to the categories that sell fastest. Another strong
performer, ITT, was recently subject to a potential takeover battle,
and I sold the stock to take advantage of the jump in its stock price.
BET Holdings, a top holding six months ago, also benefited from a
buyout offer, and I sold it to take profits. During the last few
months of the period, Coca-Cola and Procter & Gamble outperformed the
market. A declining interest-rate environment such as we've had is
very good for steady growth companies like the ones I just mentioned.
And, when the market gets worried about its future prospects, there is
usually a flight to quality stocks like these two.
Q. EVEN WITH ITS STRONG PERFORMANCE, THE FUND MUST HAVE HELD SOME
DISAPPOINTING STOCKS . . .
A. Sure. Philip Morris turned out to be a disappointment, as the
anticipated lawsuit settlement continued to be delayed. In addition,
cereal companies such as Kellogg and General Mills didn't do as well
as expected. This industry did not get attractive pricing nor much
growth, and its product mix has shifted negatively to more generics
with lower profit margins.
Q. YOU'RE INTERESTED IN ENTERTAINMENT AND CABLE STOCKS. WHAT'S
HAPPENING THERE?
A. Right now, I'm very interested in broadcasting, entertainment,
cable and advertising. Ad rates are way up. Broadcasters profit by
charging more for ads, and newspapers benefit by increasing help
wanted and other types of ads. Cable operators are developing the
capability of two-way communication, and can raise prices and retain
market share. Their future is much brighter now than when satellite TV
exploded onto the scene last year.
Q. WHAT'S YOUR OUTLOOK?
A. I'm cautious, as always. Although the U.S. economy is strong and
unemployment continues to be low, personal indebtedness is still high.
If the economy weakens, the degree of indebtedness could be a big
issue. I believe that we won't know until the spring how great the
impact of Asia's problems will be, and how intertwined the global
economy is. Some Asian competitors are now dealing with currencies
that have been halved; that could make them low-cost producers. And,
with the U.S. market an open one, more imports could create problems
for smaller U.S. niche companies. The challenge right now is that
stocks aren't priced as low as they were six months ago, but my
discipline - finding a balance of risk and return - tends to remain
the same, no matter what the market conditions.
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
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$15 million
MANAGER: Doug Chase, since August 1997;
joined Fidelity in 1993
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.4%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.5%
ADVERTISING - 0.3%
Outdoor Systems, Inc. (a) 1,775 $ 42,600 69005710
ADVERTISING AGENCIES - 1.2%
Interpublic Group of Companies, Inc. 2,000 98,125 46069010
Omnicom Group, Inc. 2,100 85,181 68191910
183,306
TOTAL ADVERTISING 225,906
AGRICULTURE - 0.3%
CROPS - 0.3%
Pioneer Hi-Bred International, Inc. 500 50,031 72368610
AIR TRANSPORTATION - 0.6%
TRANSPORTATION SERVICES - 0.6%
Viad Corp. 4,400 87,450 92552R10
APPAREL STORES - 2.0%
FAMILY CLOTHING STORES - 0.4%
Abercrombie & Fitch Co. (a) 1,500 46,688 00289620
Stage Stores, Inc. (a) 500 19,391 85254C10
66,079
GENERAL APPAREL STORES - 1.1%
Gap, Inc. 3,575 139,648 36476010
TJX Companies, Inc. 900 30,488 87254010
170,136
SHOE STORES - 0.5%
Payless ShoeSource, Inc. (a) 1,100 71,569 70437910
TOTAL APPAREL STORES 307,784
BEVERAGES - 9.9%
MALT BEVERAGE - 0.2%
Coors (Adolph) Co. Class B 900 28,575 21701610
SOFT DRINKS - 9.7%
Coca-Cola Co. (The) 12,800 828,800 19121610
PepsiCo, Inc. 18,000 649,125 71344810
1,477,925
TOTAL BEVERAGES 1,506,500
BROADCASTING - 5.2%
CABLE TV OPERATORS - 4.1%
Comcast Corp.: 20030010
Class A 3,000 93,188 20030010
Class A special 900 28,181 20030020
Cox Communications, Inc. Class A (a) 1,800 66,375 22404410
TCA Cable TV, Inc. 1,600 74,800 87224110
Tele-Communications, Inc. (TCI Group),
Series A (a) 3,400 95,200 87924V10
Time Warner, Inc. 4,125 264,773 88731510
622,517
RADIO BROADCASTING - 0.7%
Chancellor Media Corp. (a) 1,400 48,125 15891510
Clear Channel Communications, Inc. (a) 850 65,450 18450210
113,575
TELEVISION BROADCASTING - 0.4%
CBS Corp. 1,907 57,091 12490K10
TOTAL BROADCASTING 793,183
SHARES VALUE (NOTE 1)
CELLULAR - 0.9%
CELLULAR & COMMUNICATION SERVICES - 0.9%
Centennial Cellular Corp. Class A (a) 1,400 $ 29,400 15133V10
Mobile Telecommunications Technologies,
Inc. (a) 1,300 29,331 60740610
Nextel Communications, Inc. Class A (a) 3,000 81,938 65332V10
140,669
COMPUTER SERVICES & SOFTWARE - 1.0%
COMPUTER & SOFTWARE STORES - 0.4%
CompUSA, Inc. (a) 2,000 61,875 20493210
COMPUTER SERVICES - 0.5%
America Online, Inc. (a) 575 55,020 02364J10
Computer Learning Centers, Inc. (a) 800 27,250 20519910
82,270
PREPACKAGED COMPUTER SOFTWARE - 0.1%
Midway Games, Inc. (a) 500 10,875 59814810
TOTAL COMPUTER SERVICES & SOFTWARE 155,020
COMPUTERS & OFFICE EQUIPMENT - 0.2%
COMPUTER EQUIPMENT - WHOLESALE - 0.2%
CDW Computer Centers, Inc. (a) 400 24,350 12512910
CONSUMER DURABLES - 0.1%
MANUFACTURING INDUSTRIES, NEC - 0.1%
Blyth Industries, Inc. (a) 500 14,250 09643P10
CONSUMER ELECTRONICS - 0.6%
APPLIANCES - 0.6%
Black & Decker Corp. 1,700 81,919 09179710
DRUG STORES - 1.7%
CVS Corp. 2,015 132,108 12665010
Rite Aid Corp. 400 24,975 76775410
Walgreen Co. 3,250 107,656 93142210
264,739
DRUGS & PHARMACEUTICALS - 0.2%
Rexall Sundown, Inc. (a) 1,000 34,563 76164810
EDUCATIONAL SERVICES - 0.4%
COLLEGES, UNIVERSITIES & PROFESSIONAL SCHOOLS - 0.3%
Apollo Group, Inc. Class A (a) 1,000 45,250 03760410
EDUCATIONAL SERVICES - 0.1%
Childrens Comprehensive Services, 16875K20
Inc. (a) 600 10,350 16875K20
TOTAL EDUCATIONAL SERVICES 55,600
ENGINEERING - 0.3%
SPECIAL CONTRACTORS - 0.3%
Comfort Systems USA, Inc. 2,400 46,350 19990810
ENTERTAINMENT - 6.2%
CRUISES - 0.8%
Carnival Cruise Lines, Inc. Class A 2,200 122,788 14365810
MOTION PICTURE PRODUCTION - 5.4%
Disney (Walt) Co. 5,900 628,719 25468710
King World Productions, Inc. 1,800 106,538 49566710
Viacom, Inc. Class B (non-vtg.) (a) 2,000 83,500 92552430
818,757
TOTAL ENTERTAINMENT 941,545
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FOODS - 8.0%
CANNED SPECIALTIES - 0.9%
Campbell Soup Co. 2,600 $ 139,100 13442910
FOOD - 4.0%
Dole Food, Inc. 775 36,038 25660510
General Mills, Inc. 1,250 93,047 37033410
Heinz (H.J.) Co. 3,175 176,014 42307410
Kellogg Co. 1,300 60,044 48783610
Sara Lee Corp. 4,500 245,531 80311110
610,674
GENERAL FOOD PREPARATIONS - 0.2%
Sysco Corp. 575 25,731 87182910
GRAIN MILL PRODUCTS - 1.2%
Archer-Daniels-Midland Co. 1,900 40,019 03948310
Corn Products International, Inc. 1,343 42,976 21902310
Quaker Oats Co. 500 26,875 74740210
Ralston Purina Co. 800 75,100 75127730
184,970
MEAT & FISH - 1.1%
ConAgra, Inc. 5,275 166,822 20588710
PACKAGED & FROZEN FOODS - 0.6%
Bestfoods 975 95,063 08658U10
TOTAL FOODS 1,222,360
GENERAL MERCHANDISE STORES - 12.1%
DEPARTMENT STORES - 3.1%
Carson Pirie Scott & Co. (a) 600 30,600 14590310
Federated Department Stores, Inc. (a) 3,500 148,313 31410H10
Kohls Corp. (a) 600 41,625 50025510
Meyer (Fred), Inc. (a) 1,300 47,938 59290710
Penney (J.C.) Co., Inc. 2,625 176,859 70816010
Proffitts, Inc. (a) 1,000 29,375 74292510
474,710
GENERAL MERCHANDISE STORES - 7.1%
Dayton Hudson Corp. 2,300 165,456 23975310
Wal-Mart Stores, Inc. 22,950 915,131 93114210
1,080,587
VARIETY STORES - 1.9%
Consolidated Stores Corp. (a) 1,440 59,220 21014910
Costco Companies, Inc. (a) 1,000 43,375 22160Q10
Dollar Tree Stores (a) 1,100 46,819 25674710
Michaels Stores, Inc. (a) 3,000 92,250 59408710
99 Cents Only Stores (a) 1,468 46,609 65440K10
288,273
TOTAL GENERAL MERCHANDISE STORES 1,843,570
GROCERY STORES - 2.8%
GROCERIES, GENERAL LINE - WHOLESALE - 0.3%
JP Foodservice, Inc. (a) 1,400 48,913 46623210
GROCERY - RETAIL - 2.5%
Albertson's, Inc. 600 28,613 01310410
Dominick's Supermarkets, Inc. (a) 900 35,663 25715910
Hannaford Brothers Co. 1,000 38,938 41055010
Safeway, Inc. (a) 4,025 267,411 78651420
370,625
TOTAL GROCERY STORES 419,538
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 0.2%
FURNITURE - 0.2%
Leggett & Platt, Inc. 625 $ 28,242 52466010
HOUSEHOLD PRODUCTS - 15.0%
COSMETICS - 6.5%
Alberto-Culver Co. Class A 1,400 35,875 01306820
Avon Products, Inc. 3,075 184,500 05430310
Gillette Co. 7,150 706,063 37576610
Estee Lauder Companies, Inc. 400 21,975 51843910
Revlon, Inc. Class A 900 38,138 76152550
986,551
FABRICATED RUBBER PRODUCTS - 0.2%
Rubbermaid, Inc. 900 23,288 78108810
MANUFACTURED PRODUCTS - 0.1%
First Brands Corp. 475 13,152 31935610
SOAPS & DETERGENTS - 8.2%
Clorox Co. 1,400 107,275 18905410
Colgate-Palmolive Co. 2,050 150,163 19416210
Dial Corp. 600 12,563 25247D10
Procter & Gamble Co. 9,530 746,914 74271810
Unilever NV ADR 4,200 239,663 90478450
1,256,578
TOTAL HOUSEHOLD PRODUCTS 2,279,569
LEASING & RENTAL - 0.5%
VIDEO TAPE RENTAL - 0.5%
Hollywood Entertainment Corp. (a) 8,300 79,888 43614110
LEISURE DURABLES & TOYS - 1.1%
MOTORCYCLES - 0.2%
Harley-Davidson, Inc. 1,000 25,125 41282210
SPORTING & ATHLETIC GOODS - 0.4%
Callaway Golf Co. 2,300 62,100 13119310
TOYS & GAMES - 0.5%
Mattel, Inc. 2,000 81,000 57708110
TOTAL LEISURE DURABLES & TOYS 168,225
LODGING & GAMING - 0.9%
HOTELS, MOTELS, & TOURIST CENTERS - 0.9%
Mirage Resorts, Inc. (a) 1,700 39,206 60462E10
Promus Hotel Corp. (a) 1,000 45,188 74342P10
Sun International Hotels Ltd. Ord. (a) 1,400 53,550 86699N22
137,944
PHOTOGRAPHIC EQUIPMENT - 0.1%
Polaroid Corp. 300 12,319 73109510
PRINTING - 0.5%
COMMERCIAL PRINTING, NEC - 0.5%
Valassis Communications, Inc. (a) 2,400 82,800 91886610
PUBLISHING - 3.8%
BOOK PUBLISHING & PRINTING - 1.1%
Harcourt General, Inc. 1,550 82,620 41163G10
Dun & Bradstreet Corp. 2,000 63,750 26483010
Scholastic Corp. (a) 800 28,000 80706610
174,370
NEWSPAPERS - 2.2%
Belo (A.H.) Corp. Class A 1,200 64,425 08055510
Dow Jones & Co., Inc. 450 22,613 26056110
Gannett Co., Inc. 1,950 117,975 36473010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PUBLISHING - CONTINUED
NEWSPAPERS - CONTINUED
New York Times Co. (The) Class A 700 $ 45,544 65011110
Times Mirror Co. Class A 500 28,813 88736410
Tribune Co. 900 54,675 89604710
334,045
PERIODICALS - 0.5%
Playboy Enterprises, Inc. Class B (a) 4,700 74,613 72811730
TOTAL PUBLISHING 583,028
REAL ESTATE - 0.2%
CEMETERY SUBDIVIDERS & DEVELOP - 0.2%
Stewart Enterprises, Inc. Class A 600 27,600 86037010
RESTAURANTS - 0.7%
Logan's Roadhouse, Inc. (a) 25 456 54119810
Outback Steakhouse, Inc. (a) 1,400 44,800 68989910
Papa John's International, Inc. (a) 800 27,700 69881310
PJ America, Inc. (a) 2,400 40,200 72585Q10
113,156
RETAIL & WHOLESALE, MISCELLANEOUS - 4.9%
BOOK STORES - RETAIL - 0.3%
Barnes & Noble, Inc. (a) 1,700 54,081 06777410
BUILDING MATERIALS - RETAIL - 1.8%
Home Depot, Inc. 4,700 283,469 43707610
JEWELRY STORES - 0.2%
Zale Corp. (a) 1,000 24,500 98885810
LUMBER & BUILDING MATERIALS-RETAIL - 0.6%
Lowe's Companies, Inc. 1,800 91,013 54866110
MAIL ORDER - 0.3%
Brylane, Inc. 600 29,850 11766110
Tele-Communications Liberty Media 87924V50 87924V50
Group, Series A (a) 500 87924V50 17,906 87924V50
47,756
MISCELLANEOUS DURABLE GOODS - WHOLESALE - 0.2%
Action Performance Companies, Inc. (a) 800 25,300 00493310
MUSIC, TV, & ELECTRONICS STORES - 0.5%
Best Buy Co., Inc. (a) 800 40,500 08651610
Tandy Corp. 900 34,875 87538210
75,375
RETAIL, GENERAL - 1.0%
Bed Bath & Beyond, Inc. (a) 1,200 47,550 07589610
Office Depot, Inc. (a) 1,200 26,700 67622010
Staples, Inc. (a) 4,200 76,300 85503010
150,550
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 752,044
SERVICES - 1.4%
BEAUTY SHOPS - 0.5%
Steiner Leisure Ltd. (a) 2,450 76,563 85899J22
BUSINESS CONSULTING SERVICES - 0.2%
Corrections Corp. of America (a) 800 29,500 22025610
DETECTIVE, GUARD & ARMORED CAR - 0.1%
Pittston Co. (Brinks Group) 300 12,169 72570110
PERSONAL SERVICES - 0.2%
Block (H&R), Inc. 700 30,713 09367110
SHARES VALUE (NOTE 1)
PERSONNEL SUPPLY SERVICES - 0.4%
AccuStaff, Inc. (a) 1,200 $ 30,900 00440110
Personnel Group of America, Inc. (a) 1,000 36,250 71533810
67,150
TOTAL SERVICES 216,095
TELEPHONE SERVICES - 0.9%
US WEST Media Group (a) 4,800 142,500 91288920
TEXTILES & APPAREL - 1.5%
APPAREL - 0.7%
Intimate Brands, Inc. Class A 1,000 25,313 46115610
Kellwood Co. 1,000 30,375 48804410
Warnaco Group, Inc. Class A 1,600 53,400 93439010
109,088
MEN'S & BOYS' CLOTHING - 0.6%
Pacific Sunwear of California,Inc. (a) 2,900 83,375 69487310
WOMEN'S & MISSES' OUTERWEAR - 0.2%
Jones Apparel Group, Inc. 700 30,450 48007410
TOTAL TEXTILES & APPAREL 222,913
TOBACCO - 4.7%
TOBACCO MANUFACTURERS - 4.7%
Consolidated Cigar Holdings, Inc.
Class A (a) 2,700 65,138 20902E10
Philip Morris Companies, Inc. 13,800 572,700 71815410
UST, Inc. 2,100 72,450 90291110
710,288
TOTAL COMMON STOCKS
(Cost $12,727,307) 13,771,938
CASH EQUIVALENTS - 9.6%
Taxable Central Cash Fund (b)
(Cost $1,468,701) 1,468,701 1,468,701 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $14,196,008) $ 15,240,639
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $14,203,171. Net unrealized appreciation
aggregated $1,037,468, of which $1,245,952 related to appreciated
investment securities and $208,484 related to depreciated investment
securities.
ADVISOR CONSUMER INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $ 15,240,639
(COST $14,196,008) - SEE ACCOMPANYING SCHEDULE
CASH 40,700
RECEIVABLE FOR INVESTMENTS SOLD 147,853
RECEIVABLE FOR FUND SHARES SOLD 120,346
DIVIDENDS RECEIVABLE 9,178
INTEREST RECEIVABLE 4,833
PREPAID EXPENSES 10,766
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 680
TOTAL ASSETS 15,574,995
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 127,102
PAYABLE FOR FUND SHARES REDEEMED 989
DISTRIBUTION FEES PAYABLE 5,532
OTHER PAYABLES AND 22,368
ACCRUED EXPENSES
TOTAL LIABILITIES 155,991
NET ASSETS $ 15,419,004
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 14,009,706
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME (37,480)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 402,102
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES 1,044,676
NET ASSETS $ 15,419,004
</TABLE>
CALCULATION OF MAXIMUM $12.88
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($1,206,871 (DIVIDED BY)
93,725 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.67
(100/94.25 OF $12.88)
CLASS T: $12.83
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($10,182,898 (DIVIDED BY)
793,875 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.30
(100/96.50 OF $12.83)
CLASS B: $12.79
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($1,793,873 (DIVIDED BY)
140,310 SHARES) A
CLASS C: $12.81
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($83,766 (DIVIDED BY) 6,539
SHARES) A
INSTITUTIONAL CLASS: $12.89
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
($2,151,596 (DIVIDED BY) 166,970 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 56,662
DIVIDENDS
INTEREST 25,700
TOTAL INCOME 82,362
EXPENSES
MANAGEMENT FEE $ 36,215
TRANSFER AGENT FEES 17,614
DISTRIBUTION FEES 27,058
ACCOUNTING FEES AND EXPENSES 30,009
NON-INTERESTED TRUSTEES' COMPENSATION 19
CUSTODIAN FEES AND EXPENSES 3,351
REGISTRATION FEES 33,714
AUDIT 16,678
LEGAL 199
REPORTS TO SHAREHOLDERS 4,976
MISCELLANEOUS 51
TOTAL EXPENSES BEFORE REDUCTIONS 169,884
EXPENSE REDUCTIONS (52,797) 117,087
NET INVESTMENT INCOME (LOSS) (34,725)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 1,012,392
FOREIGN CURRENCY TRANSACTIONS 33 1,012,425
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 24,648
ASSETS AND LIABILITIES IN 45 24,693
FOREIGN CURRENCIES
NET GAIN (LOSS) 1,037,118
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,002,393
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (34,725) $ (36,592)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 1,012,425 919,965
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 24,693 1,019,983
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,002,393 1,903,356
DISTRIBUTIONS TO SHAREHOLDERS (2,755) -
IN EXCESS OF NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,430,596) (29,021)
TOTAL DISTRIBUTIONS (1,433,351) (29,021)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 5,657,382 8,310,212
REDEMPTION FEES 6,060 1,973
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,232,484 10,186,520
NET ASSETS
BEGINNING OF PERIOD 10,186,520 -
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF $37,480 AND
$0, RESPECTIVELY) $ 15,419,004 $ 10,186,520
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.48 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.10 3.60
TOTAL FROM INVESTMENT OPERATIONS 1.07 3.55
LESS DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.67) (.07)
TOTAL DISTRIBUTIONS (1.68) (.07)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.88 $ 13.48
TOTAL RETURN B, C 8.88% 35.68%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,207 $ 944
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.73% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.40)% A (.50)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS A SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). 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 A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.45 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) (.09)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.07 3.60
TOTAL FROM INVESTMENT OPERATIONS 1.03 3.51
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.66) (.06)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.83 $ 13.45
TOTAL RETURN B, C 8.57% 35.25%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 10,183 $ 7,314
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.98% A, G 1.97% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.63)% A (.83)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
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 (LOSS) PER SHARE HAS
BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
JULY 31, 1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.42 $ 11.46
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.07) (.08)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.07 2.04
TOTAL FROM INVESTMENT OPERATIONS 1.00 1.96
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.64) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.79 $ 13.42
TOTAL RETURN B, C 8.34% 17.10%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,794 $ 596
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.48% A, G 2.46% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.11)% A (1.60)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</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 NET INVESTMENT
INCOME (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF CLASS B SHARES) TO
JULY 31, 1997. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS). 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 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.66
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) .67
TOTAL FROM INVESTMENT OPERATIONS .64
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.49)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 12.81
TOTAL RETURN B, C 5.11%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 84
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.00)% A
PORTFOLIO TURNOVER 213% A
AVERAGE COMMISSION RATE H $ .0223
A ANNUALIZED B THE TOTAL RETURN
WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE
PERIOD 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 NET
INVESTMENT INCOME (LOSS) PER SHARE HAS
BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF CLASS C
SHARES) TO JANUARY 31, 1998. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.51 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.08 3.59
TOTAL FROM INVESTMENT OPERATIONS 1.07 3.58
LESS DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME (.02) -
FROM NET REALIZED GAIN (1.68) (.07)
TOTAL DISTRIBUTIONS (1.70) (.07)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.89 $ 13.51
TOTAL RETURN B, C 8.86% 35.98%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,152 $ 1,333
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.48% A, G 1.48% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.12)% A (.13)% A
PORTFOLIO TURNOVER 213% A 203% A
AVERAGE COMMISSION RATE H $ .0223 $ .0307
</TABLE>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). D NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF INSTITUTIONAL CLASS SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). 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 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Consumer Industries 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 net operating losses and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $15,121,055 and $12,128,299, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. For the period, the management fee was
equivalent to an annualized rate of .60% of average net assets.
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% *
CLASS C 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 $ 1,229 $ 1,229
CLASS T 20,851 20,851
CLASS B 4,863 1,215
CLASS C 115 -
$ 27,058 $ 23,295
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $487
CLASS T $890
CLASS B $159
CLASS C $201
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 3,989 $ 3,176
CLASS T 6,810 4,729
CLASS B 927 0 *
CLASS C 11 0 *
$ 11,737 $ 7,905
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 1,617 .33 *
CLASS T FIIOC ** 12,308 .30 *
CLASS B FIIOC ** 1,914 .40 *
CLASS C FIIOC ** 76 .68 *
INSTITUTIONAL CLASS FIIOC ** 1,699 .18 *
$ 17,614
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $2,120 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 7,575
CLASS T 2.00% 18,541
CLASS B 2.50% 15,126
CLASS C 2.50% 3,529
INSTITUTIONAL CLASS 1.50% 6,820
$ 51,591
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 $1,206 under this arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
IN EXCESS OF NET INVESTMENT INCOME $ 723 $ -
FROM NET REALIZED GAIN 121,875 4,926
TOTAL $ 122,598 $ 4,926
CLASS T
FROM NET REALIZED GAIN $ 1,001,052 $ 16,753
CLASS B
FROM NET REALIZED GAIN $ 102,510 $ -
CLASS C
FROM NET REALIZED GAIN $ 1,954 $ -
INSTITUTIONAL CLASS
IN EXCESS OF NET INVESTMENT INCOME $ 2,032 $ -
FROM NET REALIZED GAIN 203,205 7,342
TOTAL $ 205,237 $ 7,342
$ 1,433,351 $ 29,021
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 23,874 88,027 $ 311,282 $ 950,592
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 9,124 457 113,019 4,913
SHARES REDEEMED (9,289) (18,468) (121,191) (227,830)
NET INCREASE (DECREASE) 23,709 70,016 $ 303,110 $ 727,675
CLASS T 280,817 629,432 $ 3,609,525 $ 7,025,043
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 73,835 1,492 913,447 16,036
SHARES REDEEMED (104,712) (86,989) (1,338,376) (987,625)
NET INCREASE (DECREASE) 249,940 543,935 $ 3,184,596 $ 6,053,454
CLASS B 90,531 45,607 $ 1,158,051 $ 545,925
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 7,684 - 94,935 -
SHARES REDEEMED (2,310) (1,202) (29,781) (13,641)
NET INCREASE (DECREASE) 95,905 44,405 $ 1,223,205 $ 532,284
CLASS C 6,697 - $ 86,473 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 43 - 542 -
SHARES REDEEMED (201) - (2,510) -
NET INCREASE (DECREASE) 6,539 - $ 84,505 $ -
INSTITUTIONAL CLASS 69,833 121,713 $ 889,749 $ 1,256,098
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 15,764 682 196,010 7,342
SHARES REDEEMED (17,305) (23,717) (223,793) (266,641)
NET INCREASE (DECREASE) 68,292 98,678 $ 861,966 $ 996,799
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,893
CLASS T 6,105
CLASS B 13,178
CLASS C 3,462
INSTITUTIONAL CLASS 5,076
$ 33,714
ADVISOR CYCLICAL INDUSTRIES FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV CYCLICAL - INST CL -1.76% 18.64% 37.18%
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV CYCLICAL - INST CL 18.64% 25.11%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 165803 S00000000000001
FA Cyclical Ind -CL I S&P 500
00204 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10390.00 10516.69
1996/10/31 10690.00 10806.74
1996/11/30 11330.00 11623.62
1996/12/31 11260.09 11393.36
1997/01/31 11562.78 12105.21
1997/02/28 11603.14 12200.12
1997/03/31 11239.91 11698.81
1997/04/30 11441.70 12397.23
1997/05/31 12390.13 13151.98
1997/06/30 13045.96 13741.19
1997/07/31 13964.13 14834.57
1997/08/31 13661.43 14003.54
1997/09/30 13989.10 14770.51
1997/10/31 13094.39 14277.18
1997/11/30 13315.44 14938.07
1997/12/31 13424.95 15194.56
1998/01/30 13717.97 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 165805 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Cyclical Industries - Institutional Class
on September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$13,718 - a 37.18% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 9.5
FORD MOTOR CO. 4.6
TYCO INTERNATIONAL LTD. 2.7
LOCKHEED MARTIN CORP. 2.5
FLUOR CORP. 2.1
HONEYWELL, INC. 2.1
XEROX CORP. 2.0
EMERSON ELECTRIC CO. 1.9
ALUMINUM CO. OF AMERICA 1.9
MINNESOTA MINING & MANUFACTURING CO. 1.9
TOP INDUSTRIES AS OF JANUARY 31, 1998
ELECTRICAL MACHINERY 13.4%
CHEMICALS 5.3%
MOTOR VEHICLES &
CAR BODIES 5.0%
AIR TRANSPORT,
MAJOR NATIONAL 4.7%
GENERAL INDUSTRIAL MACHINERY 4.4%
ALL OTHERS 67.2%
ROW: 1, COL: 1, VALUE: 67.2
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.7
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 5.3
ROW: 1, COL: 6, VALUE: 13.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR CYCLICAL INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An Interview with
Albert Ruback, Portfolio Manager of Fidelity
Advisor Cyclical
Industries Fund
Q. HOW DID THE FUND PERFORM, ALBERT?
Q. WHY DID THE FUND'S PERFORMANCE LAG THAT OF THE S&P 500?
A. The biggest surprise for me was the magnitude of the impact from
concerns in the Asian Pacific. The fund's holdings in paper and
aluminum companies - such as Aluminum Company of America - took a hit
over concerns about diminished demand in that region. Any slight
change in customer demand can reduce commodity prices, which is then
reflected in stock performance, and so aluminum and paper stocks
suffered. These stocks have come back lately, however. While I have
trimmed back a little in paper stocks, I have maintained my conviction
and continue to hold aluminum stocks.
Q. WHAT ARE YOU LOOKING FOR IN TODAY'S MARKET?
A. Increasingly, I am looking for stability of earnings. So, for
example, I like companies that will benefit from the health of the
aerospace sector. I want companies that have more predictable
earnings. The mainstays in aerospace would be Textron, for example,
which saw a huge improvement in demand, or Gulfstream. These companies
should benefit from any improvement in the aerospace cycle, especially
in smaller niches such as business jets.
Q. YOU'RE A VALUE INVESTOR. IS IT HARDER TO BE VALUE-ORIENTED GIVEN
THE STATE OF THE MARKET TODAY?
A. It is more challenging. I have to be more selective. I have changed
my orientation towards what I consider value in today's market. Now, I
look at stocks more on a relative basis to the overall market
valuation, whereas I used to look at them almost entirely on an
absolute basis. So when I analyze a stock now, I look at it relative
to its industry, to other stocks within the general sector, and to the
overall market. An example of this orientation would be Textron. Over
the past seven years, the company's earnings growth has been better
than the earnings growth of the market. And yet, the stock is still
trading at a thirty percent discount to the market. So even though it
is at the high end of its historical range, I don't believe it should
be trading at such a discount. I think it should be trading at least
at parity if not at a premium.
Q. I SEE THAT SOME OF YOUR LARGEST HOLDINGS HAVEN'T CHANGED DURING THE
PAST SIX MONTHS. WHY IS THAT?
A. I choose stocks for the long term. That is the case with a stock
like General Electric, which is the largest holding in the fund. In
terms of earnings predictability, the company has a long history of
meeting shareholder expectations. Because GE has been very
conservative financially and hedges its currency exposure, at the end
of the period it appeared to have minimal exposure from the Asian
Pacific crisis. Also, it was in the midst of a significant cost-
reduction effort called the Six Sigma effort that aimed to potentially
double current earnings over the period of a couple of years. Ford,
which also has been in a major cost reduction effort, is a company
whose stock I have been acquiring recently. While I am concerned about
the overall auto cycle, Ford appeared to be well positioned because of
cost-reduction efforts and an aggressive stock buyback program. It
also plans to launch some attractive vehicles soon.
Q. DO YOU SEE ANY OTHER SHIFTS IN STRATEGY OVER THE NEXT SIX MONTHS?
A. I am looking for two types of companies: those that are doing a
good job of growing their unit sales, and those that are seemingly at
their capacity, which will enable them to get price improvements. A
good example of a company that was growing its unit sales at the end
of the period is the specialty chemical company Cytec.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$4 million
MANAGER: Albert Ruback, since inception;
joined Fidelity in 1991
(checkmark)
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 6.9%
AIRCRAFT - 3.0%
Gulfstream Aerospace Corp. (a) 700 $ 23,832
Lockheed Martin Corp. 1,057 109,994
133,826
AIRCRAFT & PARTS - 2.1%
Precision Castparts Corp. 200 10,425
Sundstrand Corp. 400 21,775
Textron, Inc. 1,000 59,813
92,013
AIRCRAFT EQUIPMENT - 0.4%
Aviall, Inc. (a) 500 7,375
Fairchild Corp. Class A (a) 500 10,188
17,563
MISSILES & SPACE VEHICLES - 1.0%
Alliant Techsystems, Inc. (a) 400 23,775
Thiokol Corp. 250 21,563
45,338
ORDNANCE - 0.4%
Harsco Corp. 400 16,225
TOTAL AEROSPACE & DEFENSE 304,965
AIR TRANSPORTATION - 4.7%
AIR TRANSPORT, MAJOR NATIONAL - 4.7%
AMR Corp. (a) 500 63,125
Alaska Air Group, Inc. 1,000 48,563
America West Holding Corp. Class B (a) 900 19,631
Continental Airlines, Inc. Class B (a) 500 23,188
Southwest Airlines Co. 1,100 28,669
US Airways Group, Inc. (a) 400 24,375
207,551
AUTOS, TIRES, & ACCESSORIES - 8.1%
AUTO & TRUCK PARTS - 2.8%
Borg-Warner Automotive, Inc. 200 10,713
Cummins Engine Co., Inc. 300 16,050
Eaton Corp. 200 17,950
SPX Corp. 600 43,800
TRW, Inc. 500 25,438
Wynn's International, Inc. 450 10,266
124,217
MOTOR VEHICLES & CAR BODIES - 5.0%
Ford Motor Co. 4,000 204,000
Lear Corp. (a) 300 14,906
218,906
TIRES & INNER TUBES - 0.3%
Goodyear Tire & Rubber Co. 200 12,525
TOTAL AUTOS, TIRES, & ACCESSORIES 355,648
BROADCASTING - 1.8%
TELEVISION BROADCASTING - 1.8%
CBS Corp. 2,600 77,838
BUILDING MATERIALS - 3.2%
AIR-CONDITIONING EQUIPMENT - 1.1%
American Standard Companies, Inc. (a) 1,200 48,075
CEMENT - 0.4%
Southdown, Inc. 300 18,919
CONCRETE, GYPSUM, PLASTER - 0.2%
USG Corp. (a) 200 10,525
SHARES VALUE (NOTE 1)
PAINT & VARNISH - 0.6%
Lilly Industrial Coatings, Inc. Class A 900 $ 16,313
Sherwin-Williams Co. 300 8,550
24,863
PLUMBING SUPPLIES - WHOLESALE - 0.9%
Masco Corp. 800 39,400
TOTAL BUILDING MATERIALS 141,782
CHEMICALS & PLASTICS - 9.4%
ADHESIVES & SEALANTS - 0.9%
Ferro Corp. 800 19,750
Nalco Chemical Co. 500 18,750
38,500
AGRICULTURAL CHEMICALS - 0.3%
OM Group, Inc. 300 11,494
CHEMICALS - 5.3%
Cytec Industries, Inc. (a) 900 46,294
du Pont (E.I.) de Nemours & Co. 800 45,300
Goodrich (B.F.) Co. 140 5,871
Monsanto Co. 1,600 75,900
NL Industries, Inc. (a) 1,000 17,813
Witco Corp. 1,100 44,550
235,728
INDUSTRIAL GASES - 0.5%
Air Products & Chemicals, Inc. 300 24,019
PLASTICS & SYNTHETIC RESINS - 0.5%
Solutia, Inc. 360 10,058
Spartech Corp. 700 11,288
21,346
PLASTICS, NEC - 1.1%
Ivex Packaging Corp. 2,200 46,200
UNSUPPORTED PLASTICS FILM & SHEET - 0.8%
W.R. Grace & Co. 300 23,569
Sealed Air Corp. (a) 200 12,575
36,144
TOTAL CHEMICALS & PLASTICS 413,431
COMPUTERS & OFFICE EQUIPMENT - 2.8%
OFFICE AUTOMATION - 2.8%
Pitney Bowes, Inc. 800 36,700
Xerox Corp. 1,100 88,413
125,113
CONSTRUCTION - 2.2%
GENERAL BUILDING - 0.2%
Toll Brothers, Inc. (a) 400 11,150
MOBILE HOMES - 0.6%
Oakwood Homes Corp. 700 25,156
OPERATIVE BUILDERS - 1.4%
Centex Corp. 200 12,550
Kaufman & Broad Home Corp. 500 12,875
Lennar Corp. 500 12,281
U.S. Home Corp. (a) 600 22,763
60,469
TOTAL CONSTRUCTION 96,775
CONSUMER DURABLES - 1.9%
MANUFACTURING INDUSTRIES, NEC - 1.9%
Minnesota Mining & Manufacturing Co. 1,000 83,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSUMER ELECTRONICS - 1.2%
APPLIANCES - 0.9%
Black & Decker Corp. 300 $ 14,456
Maytag Co. 600 23,063
37,519
RADIOS, TELEVISIONS, STEREOS - 0.3%
General Motors Corp. Class H 400 13,850
TOTAL CONSUMER ELECTRONICS 51,369
DEFENSE ELECTRONICS - 3.9%
Litton Industries, Inc. (a) 900 53,438
Northrop Grumman Corp. 500 61,313
Raytheon Co.:
Class A 281 14,366
Class B 800 41,700
170,817
ELECTRICAL EQUIPMENT - 13.9%
ELECTRICAL MACHINERY - 13.4%
Emerson Electric Co. 1,400 84,700
General Electric Co. 5,400 418,500
Honeywell, Inc. 1,300 91,081
594,281
ELECTRICAL, INDUSTRIAL APPARATUS - 0.5%
Hubbell, Inc. Class B 400 20,025
TOTAL ELECTRICAL EQUIPMENT 614,306
ELECTRONIC INSTRUMENTS - 1.1%
MEASURING INSTRUMENTS - 1.1%
Thermo Electron Corp. (a) 1,300 50,700
ENGINEERING - 2.3%
ARCHITECTS & ENGINEERS - 2.3%
EG & G, Inc. 400 9,650
Fluor Corp. 2,500 94,219
103,869
HOLDING COMPANIES - 1.0%
HOLDING COMPANY OFFICES, NEC - 1.0%
Norfolk Southern Corp. 1,400 44,188
INDUSTRIAL MACHINERY & EQUIPMENT - 6.7%
ACCESSORIES, MEASURING DEVICES & CUTTING TOOLS - 0.2%
Stanley Works 200 8,850
CONSTRUCTION EQUIPMENT - 1.2%
Caterpillar, Inc. 1,100 52,800
FARM MACHINERY & EQUIPMENT - 0.9%
Case Corp. 700 40,819
GENERAL INDUSTRIAL MACHINERY - 4.4%
Illinois Tool Works, Inc. 700 38,981
Ingersoll-Rand Co. 900 35,775
Tyco International Ltd. 2,700 119,813
194,569
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 297,038
IRON & STEEL - 2.4%
BLAST FURNACES - 0.5%
Steel Dynamics, Inc. (a) 1,100 22,000
FABRICATED METAL PRODUCTS - 0.6%
Aeroquip Vickers, Inc. 200 10,000
SPS Technologies, Inc. (a) 400 16,275
26,275
SHARES VALUE (NOTE 1)
IRON & STEEL BLAST FURNACES, MILLS - 0.8%
Inland Steel Industries, Inc. 800 $ 15,950
Nucor Corp. 400 19,050
35,000
IRON & STEEL FOUNDRIES - 0.5%
Dofasco Inc. 1,300 22,328
TOTAL IRON & STEEL 105,603
LEASING & RENTAL - 0.2%
EQUIPMENT RENTAL & LEASING, NEC - 0.2%
Ryder Systems, Inc. 250 8,375
METALS & MINING - 5.9%
ALUMINUM, EXTRUDED PRODUCTS - 0.6%
Alumax, Inc. (a) 800 27,850
METAL MINING - 0.5%
Phelps Dodge Corp. 300 19,763
METAL ORES - 0.2%
Pechiney SA Class A 200 7,841
METALS & MINERALS - WHOLESALE - 0.2%
Elkem ASA 800 10,487
NON-METALLIC MINERAL MINING - 0.2%
Martin Marietta Materials, Inc. 274 10,412
NONFERROUS ROLLING & DRAWING - 1.0%
Superior Telecom, Inc. (a) 1,100 43,450
PRIMARY PRODUCTION OF ALUMINUM - 0.6%
Reynolds Metals Co. 400 25,225
PRIME NONFERROUS SMELTING - 2.6%
Alcan Aluminium Ltd. 1,100 32,723
Aluminum Co. of America 1,100 84,013
116,736
TOTAL METALS & MINING 261,764
PACKAGING & CONTAINERS - 1.1%
GLASS CONTAINERS - 0.4%
Owens-Illinois, Inc. (a) 500 18,188
METAL CANS & CONTAINERS - 0.7%
Silgan Holdings, Inc. 1,100 30,388
TOTAL PACKAGING & CONTAINERS 48,576
PAPER & FOREST PRODUCTS - 3.2%
PAPER - 2.2%
Champion International Corp. 400 20,475
Stone Container Corp. (a) 1,400 17,850
Temple-Inland, Inc. 400 22,200
Union Camp Corp. 400 22,875
Willamette Industries, Inc. 500 16,750
100,150
PAPER MILLS - 1.0%
Fort James Corp. 1,000 42,938
TOTAL PAPER & FOREST PRODUCTS 143,088
POLLUTION CONTROL - 2.9%
POLLUTION EQUIPMENT & DESIGN - 0.5%
Ogden Corp. 800 20,050
REFUSE SYSTEMS - 1.6%
Browning-Ferris Industries, Inc. 900 31,106
Eastern Environmental Services Inc. 1,000 24,750
Waste Management, Inc. 600 14,100
69,956
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
POLLUTION CONTROL - CONTINUED
SANITARY SERVICES - 0.8%
USA Waste Services, Inc. (a) 992 $ 36,456
TOTAL POLLUTION CONTROL 126,462
PRINTING - 0.4%
COMMERCIAL PRINTING, NEC - 0.4%
Deluxe Corp. 500 16,500
RAILROADS - 2.8%
RAILROAD EQUIPMENT - 0.4%
Bombardier, Inc. Class B 800 15,444
RAILROADS - 2.4%
CSX Corp. 1,100 58,300
Canadian National Railway Co. 1,000 49,947
108,247
TOTAL RAILROADS 123,691
SHIP BUILDING & REPAIR - 1.2%
SHIP BUILDERS - 1.2%
Avondale Industries, Inc. (a) 1,000 28,281
General Dynamics Corp. 200 17,250
Newport News Shipbuilding, Inc. 400 10,050
55,581
TEXTILES & APPAREL - 0.5%
COTTON MILLS - 0.1%
Galey & Lord, Inc. (a) 400 6,375
TEXTILE MILL PRODUCTS - 0.4%
Unifi, Inc. 400 16,400
TOTAL TEXTILES & APPAREL 22,775
TRUCKING & FREIGHT - 1.9%
AIR COURIER SERVICES - 0.3%
CNF Transportation, Inc. 300 13,706
FREIGHT FORWARDING - 0.4%
Air Express International Corp. 300 7,969
Expeditors International
of Washington, Inc. 300 9,338
17,307
TRUCKING, LOCAL & LONG DISTANCE - 0.4%
Werner Enterprises, Inc. 800 18,400
TRUCKING, LONG DISTANCE - 0.8%
USFreightways Corp. 400 14,000
Yellow Corp. (a) 800 20,900
34,900
TOTAL TRUCKING & FREIGHT 84,313
TOTAL COMMON STOCKS
(Cost $3,766,934) 4,135,618
CASH EQUIVALENTS - 6.4%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b) 243,678 $ 243,678
MATURITY
AMOUNT
Investments in repurchase agreements
U.S. Treasury obligations), in a joint
trading account at 5.59%, dated
1/30/98 due 2/2/98 $ 41,019 41,000
TOTAL CASH EQUIVALENTS
(Cost $284,678) 284,678
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,051,612) $ 4,420,296
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $4,056,189. Net unrealized appreciation
aggregated $364,107, of which $483,468 related to appreciated
investment securities and $119,361 related to depreciated investment
securities.
ADVISOR CYCLICAL INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE AGREEMENTS OF $41,000) (COST $4,051,612) - SEE $
4,420,296
ACCOMPANYING SCHEDULE
CASH 37
RECEIVABLE FOR INVESTMENTS SOLD
110,206
RECEIVABLE FOR FUND SHARES SOLD
13,719
DIVIDENDS RECEIVABLE 2,857
INTEREST RECEIVABLE 1,259
PREPAID EXPENSES
11,013
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 9,936
TOTAL ASSETS
4,569,323
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 66,186
PAYABLE FOR FUND SHARES REDEEMED 10
DISTRIBUTION FEES PAYABLE 1,383
OTHER PAYABLES AND ACCRUED EXPENSES 82,336
TOTAL LIABILITIES
149,915
NET ASSETS $
4,419,408
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
3,973,982
ACCUMULATED NET INVESTMENT
(5,182)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
81,927
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
368,681
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
4,419,408
</TABLE>
CALCULATION OF MAXIMUM $12.54
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($393,570 (DIVIDED BY)
31,376 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/94.25 OF $12.54) $13.31
CLASS T: $12.51
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($2,348,216 (DIVIDED BY)
187,740 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $12.96
(100/96.50 OF $12.51)
CLASS B: $12.44
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($455,633 (DIVIDED BY) 36,628
SHARES) A
CLASS C: $12.48
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($41,069 (DIVIDED BY) 3,290
SHARES) A
INSTITUTIONAL CLASS: $12.64
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($1,180,920 (DIVIDED BY) 93,424 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 29,716
DIVIDENDS
INTEREST 8,290
TOTAL INCOME 38,006
EXPENSES
MANAGEMENT FEE $ 14,033
TRANSFER AGENT FEES 7,115
DISTRIBUTION FEES 7,906
ACCOUNTING FEES AND EXPENSES 30,004
NON-INTERESTED TRUSTEES' COMPENSATION 9
CUSTODIAN FEES AND EXPENSES 2,841
REGISTRATION FEES 32,690
AUDIT 15,875
LEGAL 86
REPORTS TO SHAREHOLDERS 2,707
MISCELLANEOUS 38
TOTAL EXPENSES BEFORE REDUCTIONS 113,304
EXPENSE REDUCTIONS (70,116) 43,188
NET INVESTMENT INCOME (LOSS) (5,182)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 231,436
FOREIGN CURRENCY TRANSACTIONS (19) 231,417
CHANGE IN NET UNREALIZED
APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (381,220)
ASSETS AND LIABILITIES IN 4 (381,216)
FOREIGN CURRENCIES
NET GAIN (LOSS) (149,799)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (154,981)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (5,182) $ 4,855
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 231,417 473,715
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (381,216) 749,897
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (154,981) 1,228,467
DISTRIBUTIONS TO SHAREHOLDERS - (10,690)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (348,447) (45,982)
TOTAL DISTRIBUTIONS (348,447) (56,672)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 624,706 3,118,751
REDEMPTION FEES 5,442 2,142
TOTAL INCREASE (DECREASE) IN NET ASSETS 126,720 4,292,688
NET ASSETS
BEGINNING OF PERIOD 4,292,688 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $5,182 AND $0, RESPECTIVELY) $ 4,419,408 $ 4,292,688
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.80 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.27) 3.89
TOTAL FROM INVESTMENT OPERATIONS (.28) 3.88
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01)
FROM NET REALIZED GAIN (.99) (.08)
TOTAL DISTRIBUTIONS (.99) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.54 $ 13.80
TOTAL RETURN B, C (1.92)% 39.11%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 393 $ 365
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.74% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.13)% A (.09)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31, 1997. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.77 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02) (.04)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.26) 3.89
TOTAL FROM INVESTMENT OPERATIONS (.28) 3.85
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01)
FROM NET REALIZED GAIN (.99) (.08)
TOTAL DISTRIBUTIONS (.99) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.51 $ 13.77
TOTAL RETURN B, C (1.93)% 38.81%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,348 $ 1,920
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.99% A, G 1.97% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.39)% A (.37)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
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 (LOSS) PER SHARE
HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO JULY 31, 1997. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.75 $ 11.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06) (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.27) 2.25
TOTAL FROM INVESTMENT OPERATIONS (.33) 2.19
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.99) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.44 $ 13.75
TOTAL RETURN B, C (2.31)% 18.94%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 456 $ 252
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.50% A 2.45% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.89)% A (1.11)% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 NET
INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 3,
1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY 31, 1997. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). G FMR OR THE FUND HAS ENTERED INTO
VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES. H 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.54
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) .34
TOTAL FROM INVESTMENT OPERATIONS .31
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.38)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01
NET ASSET VALUE, END OF PERIOD $ 12.48
TOTAL RETURN B, C 2.64%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 41
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.97)% A
PORTFOLIO TURNOVER 142% A
AVERAGE COMMISSION RATE G $ .0239
<TABLE>
<CAPTION>
<S> <C>
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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER
3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY 31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.84 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .01 .03
NET REALIZED AND UNREALIZED GAIN (LOSS) (.28) 3.91
TOTAL FROM INVESTMENT OPERATIONS (.27) 3.94
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.02)
FROM NET REALIZED GAIN (.95) (.08)
TOTAL DISTRIBUTIONS (.95) (.10)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .02 -
NET ASSET VALUE, END OF PERIOD $ 12.64 $ 13.84
TOTAL RETURN B, C (1.76)% 39.64%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,181 $ 1,756
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.49% A, G 1.48% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .11% A .25% A
PORTFOLIO TURNOVER 142% A 155% A
AVERAGE COMMISSION RATE H $ .0239 $ .0210
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF INSTITUTIONAL
CLASS SHARES) TO JULY 31, 1997. 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 (SEE
NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Cyclical Industries 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss 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.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,290,989 and $3,073,926, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
an annualized rate of .59% of average net assets.
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% *
CLASS C 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 $ 456 $ 456
CLASS T 5,847 5,847
CLASS B 1,555 389
CLASS C 48 -
$ 7,906 $ 6,692
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A 181
CLASS T 291
CLASS B 42
CLASS C 77
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 584 $ 328
CLASS T 1,942 804
CLASS B 0 0*
CLASS C 0 0*
$ 2,526 $ 1,132
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 849 .46 *
CLASS T FIIOC ** 4,007 .34 *
CLASS B FIIOC ** 808 .55 *
CLASS C FIIOC ** 54 1.19 *
INSTITUTIONAL CLASS FIIOC ** 1,397 .16 *
$ 7,115
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $568 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 8,976
CLASS T 2.00% 24,659
CLASS B 2.50% 15,670
CLASS C 2.50% 3,610
INSTITUTIONAL CLASS 1.50% 17,067
$ 69,982
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 $134 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR was record owner of approximately 34% of
the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
FROM NET INVESTMENT INCOME $ - $ 210
FROM NET REALIZED GAIN 27,503 1,679
TOTAL $ 27,503 $ 1,889
CLASS T
FROM NET INVESTMENT INCOME $ - $ 596
FROM NET REALIZED GAIN 168,735 4,766
TOTAL $ 168,735 $ 5,362
CLASS B
FROM NET REALIZED GAIN $ 21,647 $ -
CLASS C
FROM NET REALIZED GAIN $ 303 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ - $ 9,884
FROM NET REALIZED GAIN 130,259 39,537
TOTAL $ 130,259 $ 49,421
$ 348,447 $ 56,672
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 4,506 29,864 $ 57,055 $ 317,058
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2,141 169 27,217 1,885
SHARES REDEEMED (1,681) (3,623) (20,860) (42,214)
NET INCREASE (DECREASE) 4,966 26,410 $ 63,412 $ 276,729
CLASS T 127,608 159,328 $ 1,654,772 $ 1,808,520
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 12,558 440 158,925 4,903
SHARES REDEEMED (91,827) (20,367) (1,153,137) (254,181)
NET INCREASE (DECREASE) 48,339 139,401 $ 660,560 $ 1,559,242
CLASS B 16,600 18,329 $ 207,211 $ 222,169
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,702 - 21,404 -
SHARES REDEEMED (3) - (34) -
NET INCREASE (DECREASE) 18,299 18,329 $ 228,581 $ 222,169
CLASS C 3,265 - $ 39,782 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 25 - 303 -
NET INCREASE (DECREASE) 3,290 - $ 40,085 $ -
INSTITUTIONAL CLASS 24,071 595,951 $ 323,486 $ 6,237,387
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 10,114 4,432 129,319 49,421
SHARES REDEEMED (67,641) (473,503) (820,737) (5,226,197)
NET INCREASE (DECREASE) (33,456) 126,880 $ (367,932) $ 1,060,611
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,755
CLASS T 5,605
CLASS B 12,737
CLASS C 3,464
INSTITUTIONAL CLASS 5,129
$ 32,690
ADVISOR FINANCIAL SERVICES FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
AUGUST 31, 1993 MONTHS YEAR FUND
FIDELITY ADV FINANCIAL - INST CL 7.09% 31.61% 62.55%
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
AUGUST 31, 1993 YEAR FUND
FIDELITY ADV FINANCIAL - INST CL 31.61% 41.10%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 103426 S00000000000001
FA Financial Serv -CL I S&P 500
00273 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10620.00 10516.69
1996/10/31 11190.00 10806.74
1996/11/30 12090.00 11623.62
1996/12/31 11729.57 11393.36
1997/01/31 12351.14 12105.21
1997/02/28 12501.52 12200.12
1997/03/31 11619.29 11698.81
1997/04/30 12571.69 12397.23
1997/05/31 13052.91 13151.98
1997/06/30 13734.63 13741.19
1997/07/31 15178.26 14834.57
1997/08/31 14275.99 14003.54
1997/09/30 15189.28 14770.51
1997/10/31 15098.86 14277.18
1997/11/30 15601.15 14938.07
1997/12/31 16458.84 15194.56
1998/01/30 16244.56 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 103429 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Financial Services - Institutional Class
on September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$16,255 - a 62.55% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
NATIONSBANK CORP. 4.3
BANC ONE CORP. 4.1
U.S. BANCORP 4.0
CITICORP 3.9
BANK OF NEW YORK CO., INC. 3.4
BANKAMERICA CORP. 3.3
ALLSTATE CORP. 3.2
AMERICAN EXPRESS CO. 3.1
AMERICAN INTERNATIONAL GROUP, INC. 3.1
FANNIE MAE 2.8
TOP INDUSTRIES AS OF JANUARY 31, 1998
NATIONAL COMMERCIAL BANKS 31.8%
PROPERTY-CASUALTY &
REINSURANCE 14.6%
FINANCIAL SERVICES 5.9%
PERSONAL CREDIT INSTITUTIONS 5.9%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 5.6%
ALL OTHERS 36.2%
ROW: 1, COL: 1, VALUE: 36.2
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 5.9
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 14.6
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR FINANCIAL SERVICES FUND
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: Effective January 31, 1998, Robert Ewing (right)
became Portfolio Manager of Fidelity Advisor Financial Services Fund.
The following is an interview with Louis Salemy, who managed the fund
during the period covered by this report, and Robert Ewing, who
discusses his investment philosophy and outlook.
Q. LOUIS, HOW DID THE FUND PERFORM?
Q. HOW WOULD YOU DESCRIBE THE INVESTMENT ENVIRONMENT FOR FINANCIAL
SERVICES STOCKS DURING THE SIX MONTHS?
L.S. It was a period of declining interest rates, which was positive
for the market and financial service company stocks. Financial service
companies, by definition, hold financial assets. When the financial
markets are healthy, financial assets increase in value and financial
company stocks rise. It also was a period of consolidation.
Speculation regarding potential takeovers helped support valuations,
leading to price appreciation. The financial crisis in Asia was
another important factor. In the finance sector, the only companies
exposed to this crisis were the money center banks, both because they
have operations in Asia and because they lend to companies affected by
Asia. On the other hand, many domestic-based financial services stocks
performed well as a result of the Asian financial crisis because they
were perceived as safe havens from the volatility.
Q. WHAT THEMES INFLUENCED THE FUND DURING THE PERIOD?
L.S. Two themes stand out: a financially healthier consumer and
consolidation among financial companies. The improving consumer credit
trend really bore out in the fourth quarter of 1997. American
consumers are in better shape than they have been in recent years.
This means that the quality of consumer loans, including credit card
loans, has been improving. I focused the fund on companies that have
large credit card businesses, including banks and credit companies. I
also tried to participate in the consolidation trend in the financial
services industry, looking for fundamentally sound companies. The fund
profited from owning Barnett Banks, which was taken over by
NationsBank.
Q. WHAT FINANCIAL SERVICE STOCKS WERE SOME OF THE MAJOR CONTRIBUTORS
TO PERFORMANCE?
L.S. American Express was a solid performer by increasing market share
in the credit card business. American Express continued to buy back
its own shares, supporting the price of the stock. Allstate Insurance,
the fund's largest insurance company investment, also did well.
Q. WERE THERE ANY DISAPPOINTMENTS?
L.S. Citicorp was a disappointment, although not for anything that the
company did wrong. The stock of this money center bank was hammered as
a result of the Asian crisis. I think the market's perception of
Citicorp's Asian problems was worse than the reality.
Q. TURNING TO YOU, BOB, PLEASE DESCRIBE YOUR INVESTMENT STYLE AND
OUTLOOK.
R.E. I tend to view myself more as a value investor than a growth or
momentum investor. I do well by buying stocks that are cheap, when
compared to stocks of similar companies, and owning them as their
stock prices appreciate. At the same time, I am very careful to pay
attention to growth opportunities, and I will pay a fair price for a
growing company. As for my outlook, the current valuations of
financial stocks are high by most historic standards and the American
economy is fairly late in the current economic cycle. While credit
quality now is good, there is a historic tendency for credit
fundamentals to slip as the economic cycle lengthens. The high
valuations and longevity of the economic cycle can mean a challenging
environment, which is made even more complex by the unfolding story in
Asia. The challenge, however, also plays to the strength of Fidelity's
team of financial analysts as we try to distinguish between good and
bad investment opportunities. I also expect the fund will be investing
in a greater number of companies and I will try to reduce the fund's
sensitivity to the biggest companies.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$117 million
MANAGER: Robert Ewing, since January 1998;
joined Fidelity in 1990
(checkmark)
ADVISOR FINANCIAL SERVICES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.7%
SHARES VALUE (NOTE 1)
BANKS - 34.4%
NATIONAL COMMERCIAL BANKS - 31.8%
Bank of New York Co., Inc. 73,380 $ 3,976,270 06405710
Banc One Corp. 84,652 4,729,931 05943810
BankAmerica Corp. 54,000 3,837,375 06605010
Citicorp 38,365 4,565,435 17303410
Comerica, Inc. 32,500 3,067,188 20034010
Marshall & Ilsley Corp. 5,500 305,938 57183410
Mellon Bank Corp. 21,000 1,267,875 58550910
National City Corp. 27,470 1,653,351 63540510
NationsBank Corp. 82,497 4,949,820 63858510
Providian Financial Corp. 12,205 596,519 74406A10
Southwest Bancorporation Texas, Inc. 8,100 282,994 84476R10
U.S. Bancorp 42,850 4,692,075 90297310
Wachovia Corp. 9,405 731,239 92977110
Wells Fargo & Co. 7,600 2,348,400 94974010
37,004,410
STATE BANKS FEDERAL RESERVE - 2.6%
North Fork Bancorp., Inc. 17,500 562,188 65942410
Northern Trust Corp. 33,000 2,223,375 66585910
Sterling Bancshares, Inc. 13,000 284,375 85890710
3,069,938
TOTAL BANKS 40,074,348
CREDIT & OTHER FINANCE - 12.8%
BANK HOLDING COMPANY OFFICES - 0.5%
Fleet Financial Group, Inc. 7,800 558,675 33891510
FINANCIAL SERVICES - 5.9%
American Express Co. 43,100 3,606,931 02581610
First Chicago NBD Corp. 16,670 1,243,999 31945A10
Transamerica Corp. 20,400 2,096,100 89348510
6,947,030
MORTGAGE BANKERS - 0.5%
Countrywide Credit Industries, Inc. 6,500 303,063 22237210
Money Store, Inc. (The) 13,000 248,625 60934T10
551,688
PERSONAL CREDIT INSTITUTIONS - 5.9%
Associates First Capital Corp. 13,100 890,800 04600810
Beneficial Corp. 22,800 1,769,850 08172110
Green Tree Financial Corp. 7,035 139,381 39350510
Household International, Inc. 15,580 1,939,710 44181510
MBNA Corp. 67,500 2,096,719 55262L10
6,836,460
TOTAL CREDIT & OTHER FINANCE 14,893,853
FEDERAL SPONSORED CREDIT - 5.6%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 5.6%
Freddie Mac 48,720 2,168,040 31340030
Fannie Mae 52,935 3,268,736 31358610
SLM Holding Corp. 24,500 1,032,063 78442A10
6,468,839
INSURANCE - 21.5%
INSURANCE BROKERS & SERVICES - 0.7%
Marsh & McLennan Companies, Inc. 11,500 849,563 57174810
INSURANCE CARRIERS - 3.1%
AFLAC, Inc. 46,200 2,515,013 00105510
AMBAC, Inc. 6,100 290,131 02313910
Blanch E.W. Holdings, Inc. 8,000 270,000 09321010
SHARES VALUE (NOTE 1)
MBIA, Inc. 4,500 $ 291,375 55262C10
MGIC Investment Corp. 4,400 297,550 55284810
3,664,069
LIFE INSURANCE - 3.0%
American Bankers Insurance Group, Inc. 5,200 287,300 02445610
Aon Corp. 10,000 558,125 03738910
Nationwide Financial Services, Inc.
Class A 9,500 348,531 63861210
SunAmerica, Inc. 45,000 1,808,438 86693010
UNUM Corp. 10,900 530,013 90319210
3,532,407
PROPERTY-CASUALTY & REINSURANCE - 14.6%
Aegon NV (Reg.) 4,129 391,223 00792410
Allmerica Financial Corp. 7,000 368,375 01975410
Allstate Corp. 42,285 3,742,223 02000210
American International Group, Inc. 32,620 3,598,394 02687410
General Re Corp. 2,800 582,750 37056310
Hartford Financial Services Group, Inc. 18,600 1,674,000 41651510
Mercury General Corp. 5,200 250,575 58940010
PMI Group, Inc. 47,500 3,221,094 69344M10
Progressive Corp. 6,700 732,813 74331510
Travelers Group, Inc. (The) 44,000 2,178,000 89419010
Vesta Insurance Group Corp. 3,500 197,750 92539110
16,937,197
SURETY INSURANCE - 0.1%
FPIC Insurance Group, Inc. 2,500 65,000 30256310
TOTAL INSURANCE 25,048,236
REAL ESTATE INVESTMENT TRUSTS - 1.9%
Apartment Investment & Management Co.
Class A 7,400 274,725 03748R10
Crescent Real Estate Equities, Inc. 11,000 386,375 22575610
Duke Realty Investors, Inc. 17,500 415,625 26441150
Imperial Credit Commercial Mortgage
Investment Corp. 10,000 150,000 45272T10
Novastar Financial, Inc. 10,000 170,000 66994740
Ocwen Asset Investment Corp. 10,000 203,750 67574M10
Public Storage, Inc. 10,600 348,475 74460D10
Starwood Lodging Trust combined
certificate (SBI) 5,000 271,875 85590520
2,220,825
SAVINGS & LOANS - 3.5%
SAVINGS BANKS, FEDERAL CHARTER - 3.5%
Ahmanson (H.F.) & Co. 7,500 437,344 00867710
Dime Bancorp., Inc. 11,500 322,000 25429Q10
Golden State Bancorp (a) 17,000 562,063 38119710
RedFed Bancorp, Inc. (a) 58,000 1,149,125 75734110
Washington Mutual, Inc. 24,000 1,542,000 93932210
4,012,532
SECURITIES INDUSTRY - 5.0%
INVESTMENT MANAGERS - 0.3%
Franklin Resources, Inc. 9,300 416,756 35461310
SECURITY & COMMODITY BROKERS - 2.0%
Midland Walwyn, Inc. 20,000 248,703 59780110
Morgan Stanley, Dean Witter, Discover
and Co. 35,660 2,081,653 61744644
2,330,356
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SECURITIES INDUSTRY - CONTINUED
SECURITY BROKERS & DEALERS - 2.7%
Lehman Brothers Holdings, Inc. 57,000 $ 3,095,813 52490810
TOTAL SECURITIES INDUSTRY 5,842,925
TOTAL COMMON STOCKS
(Cost $86,767,834) 98,561,558
CASH EQUIVALENTS - 15.3%
Taxable Central Cash Fund (b)
(Cost $17,870,195) 17,870,195 17,870,195 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $104,638,029) $ 116,431,753
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $104,684,512. Net unrealized appreciation
aggregated $11,747,241, of which $12,875,604 related to appreciated
investment securities and $1,128,363 related to depreciated investment
securities.
ADVISOR FINANCIAL SERVICES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
116,431,753
(COST $104,638,029) - SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 60,965
RECEIVABLE FOR FUND SHARES SOLD 933,778
DIVIDENDS RECEIVABLE 104,400
INTEREST RECEIVABLE 94,929
PREPAID EXPENSES 10,707
TOTAL ASSETS
117,636,532
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 45,793
PAYABLE FOR FUND SHARES REDEEMED 369,268
ACCRUED MANAGEMENT FEE 54,478
DISTRIBUTION FEES PAYABLE 52,286
OTHER PAYABLES AND 43,378
ACCRUED EXPENSES
TOTAL LIABILITIES 565,203
NET ASSETS $
117,071,329
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
100,177,684
UNDISTRIBUTED NET INVESTMENT INCOME 61,251
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 5,038,670
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
11,793,724
NET ASSETS $
117,071,329
</TABLE>
CALCULATION OF MAXIMUM $15.89
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($10,634,655 (DIVIDED BY)
669,191 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $16.86
(100/94.25 OF $15.89)
CLASS T: $15.85
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($76,888,206 (DIVIDED BY)
4,850,324 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $16.42
(100/96.50 OF $15.85)
CLASS B: $15.77
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($23,240,817 (DIVIDED BY)
1,473,276 SHARES) A
CLASS C: $15.81
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($2,692,030 (DIVIDED BY)
170,232 SHARES) A
INSTITUTIONAL CLASS: $15.93
NET ASSET VALUE, AND OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($3,615,621 (DIVIDED BY) 226,974 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 655,773
DIVIDENDS
INTEREST 303,936
TOTAL INCOME 959,709
EXPENSES
MANAGEMENT FEE $ 265,282
TRANSFER AGENT FEES 113,896
DISTRIBUTION FEES 241,018
ACCOUNTING FEES AND EXPENSES 34,473
NON-INTERESTED TRUSTEES' COMPENSATION 145
CUSTODIAN FEES AND EXPENSES 2,343
REGISTRATION FEES 40,340
AUDIT 16,743
LEGAL 1,313
REPORTS TO SHAREHOLDERS 23,112
MISCELLANEOUS 549
TOTAL EXPENSES BEFORE REDUCTIONS 739,214
EXPENSE REDUCTIONS (5,293) 733,921
NET INVESTMENT INCOME 225,788
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 6,475,059
FOREIGN CURRENCY TRANSACTIONS (2) 6,475,057
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENT SECURITIES (220,036)
NET GAIN (LOSS) 6,255,021
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,480,809
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ 225,788 $
100,774
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 6,475,057
27,297
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (220,036)
12,013,760
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 6,480,809
12,141,831
DISTRIBUTIONS TO SHAREHOLDERS (245,416)
(14,685)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,445,430)
(13,841)
TOTAL DISTRIBUTIONS (1,690,846)
(28,526)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 42,471,794
57,645,194
REDEMPTION FEES 36,480
14,593
TOTAL INCREASE (DECREASE) IN NET ASSETS 47,298,237
69,773,092
NET ASSETS
BEGINNING OF PERIOD 69,773,092 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $61,251 AND $86,089, RESPECTIVELY) $ 117,071,329 $
69,773,092
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .06 .06
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.00 5.06
TOTAL FROM INVESTMENT OPERATIONS 1.06 5.12
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.06) (.01)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.29) (.02)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.89 $ 15.11
TOTAL RETURN B, C 7.11% 51.35%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 10,635 $ 6,275
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.44% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.43% A, G 1.73% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .72% A .55% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</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 NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS A SHARES) TO JULY 31,
1997. 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 A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.07 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .05 .04
NET REALIZED AND UNREALIZED GAIN (LOSS) .99 5.04
TOTAL FROM INVESTMENT OPERATIONS 1.04 5.08
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) (.01)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.27) (.02)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.85 $ 15.07
TOTAL RETURN B, C 6.99% 50.95%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 76,888 $ 52,003
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.56% A 1.94% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.55% A, F 1.91% A, F
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .60% A .37% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE G $ .0369 $ .0348
</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 NET INVESTMENT INCOME PER
SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS T SHARES) TO JULY 31,
1997. F FMR OR THE FUND HAS ENTERED INTO
VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). G A FUND IS REQUIRED TO DISCLOSE
ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.04 $ 12.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .00 (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) .99 2.50
TOTAL FROM INVESTMENT OPERATIONS .99 2.48
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) -
FROM NET REALIZED GAIN (.23) -
TOTAL DISTRIBUTIONS (.27) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 15.77 $ 15.04
TOTAL RETURN B, C 6.68% 19.75%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 23,241 $ 7,737
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.23% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.23% A 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.06)% A (.37)% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</TABLE>
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN. C TOTAL
RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED
SALES CHARGE AND FOR PERIODS OF LESS THAN ONE
YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS
BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FOR THE
PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE
OF CLASS B SHARES) TO JULY 31, 1997. 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. H 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.24
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .00
NET REALIZED AND UNREALIZED GAIN (LOSS) .80
TOTAL FROM INVESTMENT OPERATIONS .80
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02)
FROM NET REALIZED GAIN (.21)
TOTAL DISTRIBUTIONS (.23)
REDEMPTION FEES ADDED TO BE PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 15.81
TOTAL RETURN B, C 5.25%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,692
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.06)% A
PORTFOLIO TURNOVER 67% A
AVERAGE COMMISSION RATE H $ .0369
A ANNUALIZED B THE TOTAL
RETURN WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD
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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF
CLASS C SHARES) TO JANUARY 31,
1998. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.14 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .06 .10
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.00 5.06
TOTAL FROM INVESTMENT OPERATIONS 1.06 5.16
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.05) (.02)
FROM NET REALIZED GAIN (.23) (.01)
TOTAL DISTRIBUTIONS (.28) (.03)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 15.93 $ 15.14
TOTAL RETURN B, C 7.09% 51.78%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,616 $ 3,758
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.30% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.30% A 1.47% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .83% A .85% A
PORTFOLIO TURNOVER 67% A 26% A
AVERAGE COMMISSION RATE H $ .0369 $ .0348
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN. D NET INVESTMENT INCOME PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF INSTITUTIONAL CLASS SHARES) TO JULY 31, 1997. 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. H 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Financial Services 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments 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.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $54,480,958 and $26,275,280, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .60% of average net
assets.
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%*
CLASS C 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 $ 10,259 $ 10,259
CLASS T 157,290 157,290
CLASS B 71,069 18,078
CLASS C 2,400 -
$ 241,018 $ 185,627
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $2,676
CLASS T $5,116
CLASS B $1,896
CLASS C $2,357
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 62,858 $ 32,961
CLASS T 128,888 81,634
CLASS B 15,075 0 *
CLASS C 0 0 *
$ 206,821 $ 114,595
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 11,024 .27*
CLASS T FIIOC ** 78,995 .25*
CLASS B FIIOC** 20,056 .28*
CLASS C FIIOC** 602 .26*
INSTITUTIONAL CLASS FIIOC** 3,219 .20*
$ 113,896
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $14,567 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 2,674
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 $2,619 under this arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B, C
CLASS A
FROM NET INVESTMENT INCOME $ 32,924 $ 1,796
FROM NET REALIZED GAIN 134,384 1,792
TOTAL $ 167,308 $ 3,588
CLASS T
FROM NET INVESTMENT INCOME $ 169,713 $ 11,192
FROM NET REALIZED GAIN 1,003,523 11,200
TOTAL $ 1,173,236 $ 22,392
CLASS B
FROM NET INVESTMENT INCOME $ 31,316 $ -
FROM NET REALIZED GAIN 247,910 -
TOTAL $ 279,226 $ -
CLASS C
FROM NET INVESTMENT INCOME $ 990 $ -
FROM NET REALIZED GAIN 10,862 -
TOTAL $ 11,852 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 10,473 $ 1,697
FROM NET REALIZED GAIN 48,751 849
TOTAL $ 59,224 $ 2,546
$ 1,690,846 $ 28,526
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
C DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B, C 1998 A 1997 B, C
CLASS A 305,304 442,563 $ 4,668,312 $ 5,416,102
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 9,386 294 147,398 3,494
SHARES REDEEMED (60,758) (27,598) (923,718) (358,033)
NET INCREASE (DECREASE) 253,932 415,259 $ 3,891,992 $ 5,061,563
CLASS T 1,883,008 3,898,064 $ 28,793,501 $ 48,519,698
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 66,938 1,650 1,050,999 19,567
SHARES REDEEMED (550,841) (448,495) (8,324,045) (5,662,098)
NET INCREASE (DECREASE) 1,399,105 3,451,219 $ 21,520,455 $ 42,877,167
CLASS B 1,031,944 528,089 $ 15,768,091 $ 6,961,044
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 13,584 - 212,014 -
SHARES REDEEMED (86,794) (13,547) (1,328,677) (182,473)
NET INCREASE (DECREASE) 958,734 514,542 $ 14,651,428 $ 6,778,571
CLASS C 169,642 - $ 2,655,686 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 710 - 11,224 -
SHARES REDEEMED (120) - (1,889) -
NET INCREASE (DECREASE) 170,232 - $ 2,665,021 $ -
INSTITUTIONAL CLASS 87,559 324,063 $ 1,351,402 $ 3,934,976
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 3,344 215 52,667 2,546
SHARES REDEEMED (112,227) (75,980) (1,661,171) (1,009,629)
NET INCREASE (DECREASE) (21,324) 248,298 $ (257,102) $ 2,927,893
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 6,130
CLASS T 11,786
CLASS B 13,646
CLASS C 3,465
INSTITUTIONAL CLASS 5,313
$ 40,340
ADVISOR HEALTH CARE FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV HEALTH CARE - INST CL 8.60% 30.95% 53.34%
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV HEALTH CARE - INST CL 30.95% 35.39%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980211 170118 S00000000000001
FA Health Care -CL I S&P 500
00271 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10670.00 10516.69
1996/10/31 10430.00 10806.74
1996/11/30 10960.00 11623.62
1996/12/31 11030.00 11393.36
1997/01/31 11710.00 12105.21
1997/02/28 11850.00 12200.12
1997/03/31 11210.00 11698.81
1997/04/30 11770.00 12397.23
1997/05/31 12680.00 13151.98
1997/06/30 13620.00 13741.19
1997/07/31 14120.00 14834.57
1997/08/31 13250.00 14003.54
1997/09/30 14087.43 14770.51
1997/10/31 13965.02 14277.18
1997/11/30 14240.45 14938.07
1997/12/31 14467.59 15194.56
1998/01/30 15333.72 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980211 170120 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Health Care - Institutional Class on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$15,334 - a 53.34% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 9.5
WARNER-LAMBERT CO. 8.5
MERCK & CO., INC. 6.2
SCHERING-PLOUGH CORP. 5.1
LILLY (ELI) & CO. 4.9
ABBOTT LABORATORIES 3.2
BRISTOL-MYERS SQUIBB CO. 2.6
JOHNSON & JOHNSON 2.6
BAXTER INTERNATIONAL, INC. 2.4
MEDTRONIC, INC. 2.1
TOP INDUSTRIES AS OF JANUARY 31, 1998
DRUGS 46.3%
MEDICAL SUPPLIES &
APPLIANCES 12.6%
MEDICAL TECHNOLOGY 5.6%
BIOTECHNOLOGY 5.0%
HOSPITALS 4.6%
ALL OTHERS 25.9% *
ROW: 1, COL: 1, VALUE: 46.3
ROW: 1, COL: 2, VALUE: 12.6
ROW: 1, COL: 3, VALUE: 5.6
ROW: 1, COL: 4, VALUE: 5.0
ROW: 1, COL: 5, VALUE: 4.6
ROW: 1, COL: 6, VALUE: 25.9
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR HEALTH CARE FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Beso Sikharulidze, Portfolio Manager of Fidelity Advisor Health Care
Fund
Q. HOW DID THE FUND PERFORM, BESO?
Q. HOW WAS THE FUND ABLE TO OUTPACE THE S&P 500 OVER THE PAST SIX
MONTHS?
A. The fund had a substantial weighting in large-capitalization
pharmaceutical stocks, which did well for two reasons. First, they
exhibited strong business prospects and steady earnings growth.
Second, their share prices benefited from a "flight to quality" during
the financial crisis in Southeast Asia. Investors generally took their
money out of technology stocks and other securities that had some
exposure to the Asian markets and reinvested it in large-cap companies
that were presumed to be "safe." The "safe" companies included
pharmaceutical names such as Johnson & Johnson. Consequently, the
fund's overexposure to pharmaceuticals boosted performance during the
period.
Q. WHICH INDIVIDUAL STOCKS HELPED PERFORMANCE IN THE LATEST SIX
MONTHS?
A. All of the major contributors were pharmaceutical stocks. In fact,
six of the fund's top 10 holdings as of January 31, 1998, were
pharmaceutical companies - the best-performing of which were
Bristol-Myers Squibb, Eli Lilly and Schering-Plough. Not only did
these companies get a boost from their solid earnings and the recent
market environment, but they reaped the benefits of accelerated review
by the Food and Drug Administration (FDA). Because drugs are moving
through the FDA review process more quickly, they're coming to market
sooner. And that's good news for pharmaceutical companies that are
spending many of their budget dollars on research and development.
Q. WHAT HAPPENED WITH HEALTH MAINTENANCE ORGANIZATIONS (HMOS)?
A. New competition created by employers forming their own health care
plans has created a situation where HMOs cannot raise prices to offset
cost increases. Because of this loss of pricing power, HMOs
underperformed other health care stocks during the period.
Q. WHAT ABOUT DEVICE MAKERS?
A. Many device makers did not fare well during the latest six months
because of the volatility of their business. As good as these
companies and their technologies are, the product life cycles are
short. These devices, such as heart defibrillators, are protected by
patents, but competitors may still develop similar products very
quickly. This volatile environment makes device makers much more like
technology companies than pharmaceutical firms.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. The fund's small exposure to Oxford Health Plans detracted from
performance. The company's stock plummeted more than 60% in one day
after the company announced that an accounting error had caused it to
severely misstate its quarterly earnings. The stock continued to
flounder after the company's warning of disappointing fourth-quarter
earnings. The fund sold its position in Oxford Health by the end of
the period. Columbia/HCA, a large HMO, was another detractor. The
company continued to struggle as investigations into its billing
practices progressed. Columbia/HCA announced a massive restructuring
toward the end of 1997, but still later hinted at disappointing
earnings amidst the widening probes.
Q. WHAT IS YOUR OUTLOOK FOR THE HEALTH CARE SECTOR?
A. I'm optimistic about the business prospects of most health care
stocks, especially pharmaceuticals. I expect that solid management
teams, new products and a favorable regulatory environment will
provide pharmaceutical companies with the stamina they need to
continue their bull run. In addition, medical device makers should do
reasonably well as they branch off into new areas, such as spinal, hip
and knee devices. I expect that HMOs and service providers will
continue to writhe under intense competition and resultant downward
pricing pressures amidst increased costs. Finally, biotechnology
companies - especially those with promising new products - could
benefit as pharmaceutical companies continue their acquisition spree
that we witnessed at the end of the period.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$108 million
MANAGER: Beso Sikharulidze, since 1997;
joined Fidelity in 1992
(checkmark)
ADVISOR HEALTH CARE FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.2%
SHARES VALUE (NOTE 1)
AGRICULTURE - 0.5%
CROPS - 0.5%
DEKALB Genetics Corp. Class B 20,000 $ 547,500
CHEMICALS & PLASTICS - 0.5%
CHEMICALS - 0.5%
Monsanto Co. 10,400 493,350
COMPUTER SERVICES & SOFTWARE - 2.0%
COMPUTER SERVICES - 1.1%
HBO & Co. 21,500 1,124,719
CAD/CAM/CAE - 0.9%
Shared Medical Systems Corp. 15,000 982,500
TOTAL COMPUTER SERVICES & SOFTWARE 2,107,219
DRUG STORES - 3.0%
CVS Corp. 14,000 917,875
Rite Aid Corp. 12,700 792,956
Walgreen Co. 45,000 1,490,625
3,201,456
DRUGS & PHARMACEUTICALS - 54.3%
BIOTECHNOLOGY - 5.0%
Amgen, Inc. 15,000 750,000
Aviron (a) 40,000 1,027,500
CV Therapeutics, Inc. 4,500 38,250
Chiron Corp. (a) 50,000 896,875
COR Therapeutics, Inc. (a) 800 7,750
Cytyc Corp. (a) 54,500 1,178,563
Genentech, Inc. special (a) 3,600 234,000
Magainin Pharmaceuticals, Inc. (a) 105,000 721,875
Sangstat Medical Corp. (a) 6,300 177,975
Zonagen, Inc. (a) 17,000 323,000
5,355,788
COMMERCIAL LABORATORY RESEARCH - 1.0%
Millennium Pharmaceuticals, Inc. (a) 17,700 332,981
Scios, Inc. (a) 80,000 760,000
1,092,981
DRUGS - 46.3%
Alliance Pharmaceutical Corp. (a) 100,000 712,500
American Home Products Corp. 106,500 10,164,094
Anesta Corp. (a) 40,200 688,425
Barr Laboratories, Inc. (a) 16,200 542,700
Bristol-Myers Squibb Co. 28,300 2,821,156
Elan Corp. PLC ADR (a) 9,200 477,825
Forest Laboratories, Inc. (a) 17,000 1,009,375
Lilly (Eli) & Co. 78,100 5,271,750
Merck & Co., Inc. 56,400 6,612,900
Pfizer, Inc. 23,300 1,909,144
Progenics Pharmaceuticals, Inc. 54,400 890,800
Rhone Poulenc Sponsored ADR
representing 1/4 share 34,200 1,577,475
Sankyo Co. Ltd. 14,000 365,026
Schering-Plough Corp. 75,300 5,449,838
Sequus Pharmaceuticals, Inc. (a) 89,000 739,813
SmithKline Beecham PLC ADR 2,300 145,044
Takeda Chemical Industries Ltd. 15,000 423,001
Warner-Lambert Co. 59,900 9,014,950
Watson Pharmaceuticals, Inc. (a) 8,200 301,350
Yamanouchi Pharmaceutical Co. Ltd. 8,000 194,092
49,311,258
PHARMACEUTICAL PREPARATIONS - 2.0%
Cellegy Pharmaceuticals, Inc. (a) 60,000 427,495
GelTex Pharmaceuticals, Inc. (a) 3,900 102,375
SHARES VALUE (NOTE 1)
Immunex Corp. (a) 2,100 $ 115,369
Ligand Pharmaceuticals, Inc. Class B (a) 43,600 479,600
Novartis AG (Reg.) 563 964,054
2,088,893
TOTAL DRUGS & PHARMACEUTICALS 57,848,920
ELECTRONIC INSTRUMENTS - 1.1%
LAB ANALYTICAL INSTRUMENTS - 1.1%
Waters Corp. (a) 25,800 1,190,025
ELECTRONICS - 0.2%
ELECTRONIC CAPACITORS - 0.2%
Maxwell Technologies, Inc. (a) 8,500 246,500
HOUSEHOLD PRODUCTS - 0.7%
COSMETICS - 0.6%
Avon Products, Inc. 10,400 624,000
FABRICATED RUBBER PRODUCTS - 0.1%
Safeskin Corp. 1,400 79,188
TOTAL HOUSEHOLD PRODUCTS 703,188
MEDICAL EQUIPMENT & SUPPLIES - 22.8%
DENTAL EQUIPMENT - 0.4%
Sybron International Corp. (a) 9,200 436,425
DRUG DISTRIBUTORS - WHOLESALE - 1.3%
Cardinal Health, Inc. 12,400 960,225
McKesson Corp. 7,600 363,850
PharMerica, Inc. (a) 6,098 68,603
1,392,678
MEDICAL, DENTAL, HOSPITAL EQUIPMENT - WHOLESALE - 0.7%
ESC Medical Systems Ltd. (a) 20,000 740,625
MEDICAL SUPPLIES & APPLIANCES - 12.6%
Abbott Laboratories 48,100 3,406,081
Baxter International, Inc. 46,200 2,572,763
Becton, Dickinson & Co. 18,100 1,142,563
Boston Scientific Corp. (a) 20,600 1,045,450
Johnson & Johnson 41,600 2,784,600
Omnicare, Inc. 8,000 230,000
Sofamor/Danek Group, Inc. (a) 12,300 770,288
Steris Corp. (a) 16,600 869,425
Terumo Corp. 39,000 626,703
13,447,873
MEDICAL TECHNOLOGY - 5.6%
Arterial Vascular Engineering, Inc. (a) 3,900 286,650
Ballard Medical Products 31,100 781,388
Biomet, Inc. 13,000 372,125
InControl, Inc. (a) 50,000 237,500
Medtronic, Inc. 43,500 2,221,219
Nitinol Medical Technologies, Inc. (a) 50,000 406,250
St. Jude Medical, Inc. (a) 14,800 481,000
Sonus Pharmaceuticals, Inc. (a) 8,400 283,500
Stryker Corp. 21,000 775,688
U.S. Surgical Corp. 3,177 90,743
5,936,063
X-RAY & RELATED APPARATUS - 0.4%
Hologic, Inc. (a) 21,600 418,500
X-RAY ELECTRO-MED APPARATUS - 1.8%
ADAC Laboratories (a) 45,000 950,625
Coherent, Inc. (a) 1,000 46,250
Guidant Corp. 13,600 873,800
1,870,675
TOTAL MEDICAL EQUIPMENT & SUPPLIES 24,242,839
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDICAL FACILITIES MANAGEMENT - 6.1%
HOSPITALS - 4.6%
Columbia/HCA Healthcare Corp. 54,300 $ 1,357,500
HEALTHSOUTH Corp. (a) 37,800 848,138
Health Management Associates, Inc.
Class A (a) 18,000 430,875
Tenet Healthcare Corp. (a) 18,900 652,050
Universal Health Services, Inc. Class B (a) 35,000 1,631,875
4,920,438
HMO'S & OUTPATIENT CARE - 1.1%
Humana, Inc. (a) 20,900 419,306
United HealthCare Corp. 15,400 789,249
1,208,555
NURSING CARE & NURSING HOMES - 0.2%
Health Care & Retirement Corp. 5,400 214,313
SKILLED NURSING CARE FACILITY - 0.2%
Beverly Enterprises, Inc. 13,400 185,925
TOTAL MEDICAL FACILITIES MANAGEMENT 6,529,231
TOTAL COMMON STOCKS
(Cost $84,754,839) 97,110,228
CASH EQUIVALENTS - 8.8%
Taxable Central Cash Fund (b)
(Cost $9,396,532) 9,396,532 9,396,532
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $94,151,371) $ 106,506,760
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.63%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $94,272,075. Net unrealized appreciation
aggregated $12,234,685, of which $15,586,059 related to appreciated
investment securities and $3,351,374 related to depreciated investment
securities.
ADVISOR HEALTH CARE FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
106,506,760
(COST $94,151,371) -
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD
1,091,703
RECEIVABLE FOR FUND SHARES SOLD
2,871,780
DIVIDENDS RECEIVABLE 30,240
INTEREST RECEIVABLE 34,417
PREPAID EXPENSES 10,764
TOTAL ASSETS
110,545,664
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,800,675
PAYABLE FOR FUND SHARES REDEEMED 528,947
ACCRUED MANAGEMENT FEE 46,405
DISTRIBUTION FEES PAYABLE 42,872
OTHER PAYABLES AND 52,340
ACCRUED EXPENSES
TOTAL LIABILITIES
2,471,239
NET ASSETS $
108,074,425
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
94,588,695
ACCUMULATED NET INVESTMENT
(196,590)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
1,327,078
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
12,355,242
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
108,074,425
</TABLE>
CALCULATION OF MAXIMUM $14.32
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($8,608,988 (DIVIDED BY)
601,309 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $15.19
(100/94.25 OF $14.32)
CLASS T: $14.27
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($74,934,393 (DIVIDED BY)
5,251,802 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $14.79
(100/96.50 OF $14.27)
CLASS B: $14.18
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($16,362,749 (DIVIDED BY)
1,153,535 SHARES) A
CLASS C: $14.23
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($1,642,796 (DIVIDED BY)
115,462 SHARES) A
INSTITUTIONAL CLASS: $14.34
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($6,525,499 (DIVIDED BY) 455,078 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 317,140
DIVIDENDS
INTEREST 170,911
TOTAL INCOME 488,051
EXPENSES
MANAGEMENT FEE $ 245,654
TRANSFER AGENT FEES 109,378
DISTRIBUTION FEES 212,159
ACCOUNTING FEES AND EXPENSES 33,148
NON-INTERESTED TRUSTEES' COMPENSATION 141
CUSTODIAN FEES AND EXPENSES 5,851
REGISTRATION FEES 52,717
AUDIT 16,741
LEGAL 1,285
REPORTS TO SHAREHOLDERS 24,350
MISCELLANEOUS 253
TOTAL EXPENSES BEFORE REDUCTIONS 701,677
EXPENSE REDUCTIONS (17,036) 684,641
NET INVESTMENT INCOME (LOSS) (196,590)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 5,446,912
FOREIGN CURRENCY TRANSACTIONS (510) 5,446,402
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 2,749,004
ASSETS AND LIABILITIES IN (147) 2,748,857
FOREIGN CURRENCIES
NET GAIN (LOSS) 8,195,259
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,998,669
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (196,590) $ (92,633)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 5,446,402 1,318,664
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 2,748,857 9,606,385
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,998,669 10,832,416
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAIN (5,317,358) -
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 35,971,031 58,550,028
REDEMPTION FEES 31,990 7,649
TOTAL INCREASE (DECREASE) IN NET ASSETS 38,684,332 69,390,093
NET ASSETS
BEGINNING OF PERIOD 69,390,093 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $196,590 AND $0, RESPECTIVELY) $ 108,074,425 $ 69,390,093
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.10 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02) (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.12
TOTAL FROM INVESTMENT OPERATIONS 1.09 4.10
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.88) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.32 $ 14.10
TOTAL RETURN B, C 8.44% 41.00%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 8,609 $ 5,488
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.57% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.54% A, G 1.74% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.36)% A (.18)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 (LOSS) PER
SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER
3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31, 1997. 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
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.05 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.04)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.09
TOTAL FROM INVESTMENT OPERATIONS 1.08 4.05
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.87) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.27 $ 14.05
TOTAL RETURN B, C 8.39% 40.50%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 74,934 $ 50,868
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.62% A 1.97% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.59% A, F 1.96% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.40)% A (.39)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE G $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 (LOSS) PER SHARE HAS
BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E FOR THE
PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS T SHARES) TO JULY 31, 1997. F FMR OR THE FUND HAS
ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS). G 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 11.88
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.08) (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 2.18
TOTAL FROM INVESTMENT OPERATIONS 1.03 2.13
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.86) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - -
NET ASSET VALUE, END OF PERIOD $ 14.18 $ 14.01
TOTAL RETURN B, C 7.97% 17.93%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,363 $ 6,159
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.40% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.37% A, G 2.49% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.20)% A (.99)% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH
3, 1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY 31, 1997. 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 A FUND
IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998
SELECTED PER-SHARE DATA (UNAUDITED) E
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.85
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.06
TOTAL FROM INVESTMENT OPERATIONS 1.01
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.63)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 14.23
TOTAL RETURN B, C 7.73%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,643
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.46% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.60)% A
PORTFOLIO TURNOVER 98% A
AVERAGE COMMISSION RATE H $ .0434
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD
NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY 31, 1998.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.12 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D 0.00 .01
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.11 4.11
TOTAL FROM INVESTMENT OPERATIONS 1.11 4.12
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.90) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.34 $ 14.12
TOTAL RETURN B, C 8.60% 41.20%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,525 $ 6,875
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.18% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.14% A, G 1.49% A, G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .06% A .08% A
PORTFOLIO TURNOVER 98% A 67% A
AVERAGE COMMISSION RATE H $ .0434 $ .0383
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO JULY 31,
1997. 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Health Care 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of
securities. The effects of changes in foreign currency exchange rates
on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 net operating losses and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $60,709,628 and $38,063,367, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .60% of average net
assets.
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%*
CLASS C 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 $ 8,223 $ 8,223
CLASS T 148,325 148,325
CLASS B 54,303 13,576
CLASS C 1,308 -
$ 212,159 $ 170,124
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 3,102
CLASS T $ 5,023
CLASS B $ 1,755
CLASS C $ 1,390
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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 $ 52,047 $ 35,832
CLASS T 123,183 80,047
CLASS B 7,504 0 *
CLASS C 0 0 *
$ 182,734 $ 115,879
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 10,420 .32 *
CLASS T FIIOC ** 76,472 .26 *
CLASS B FIIOC ** 17,084 .32 *
CLASS C FIIOC ** 386 .30 *
INSTITUTIONAL CLASS FIIOC ** 5,016 .18 *
$ 109,378
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $7,780 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 3,129
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 $13,732 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 $114
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER
AGENT
INTEREST CREDITS
INSTITUTIONAL CLASS $ 61
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED
JANUARY 31,
1998 A
CLASS A
FROM NET REALIZED GAIN $ 422,514
CLASS T
FROM NET REALIZED GAIN $ 3,804,341
CLASS B
FROM NET REALIZED GAIN $ 709,644
CLASS C
FROM NET REALIZED GAIN $ 21,184
INSTITUTIONAL CLASS
FROM NET REALIZED GAIN $ 359,675
$ 5,317,358
A DISTRIBUTIONS FOR CLASS C ARE FOR FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997B,C 1998A 1997 B,C
CLASS A 237,384 450,370 $ 3,259,754 $ 5,183,538
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 29,301 - 385,140 -
SHARES REDEEMED (54,712) (61,034) (752,361) (732,928)
NET INCREASE (DECREASE) 211,973 389,336 $ 2,892,533 $ 4,450,610
CLASS T 1,844,209 3,936,387 $ 25,286,144 $ 46,440,633
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 273,471 - 3,583,787 -
SHARES REDEEMED (486,812) (315,453) (6,628,631) (3,850,782)
NET INCREASE (DECREASE) 1,630,868 3,620,934 $ 22,241,300 $ 42,589,851
CLASS B 765,723 445,818 $ 10,407,187 $ 5,752,611
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 49,138 - 640,356 -
SHARES REDEEMED (100,938) (6,206) (1,376,450) (76,107)
NET INCREASE (DECREASE) 713,923 439,612 $ 9,671,093 $ 5,676,504
CLASS C 114,007 - $ 1,558,394 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,455 - 18,904 -
NET INCREASE (DECREASE) 115,462 - $ 1,577,298 $ -
INSTITUTIONAL CLASS 123,311 546,050 $ 1,706,663 $ 6,606,358
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 27,158 - 357,509 -
SHARES REDEEMED (182,272) (59,169) (2,475,365) (773,295)
NET INCREASE (DECREASE) (31,803) 486,881 $ (411,193) $ 5,833,063
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T AND THE INSTITUTIONAL CLASS
ARE FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 6,968
CLASS T 20,682
CLASS B 15,546
CLASS C 3,625
INSTITUTIONAL CLASS 5,896
$ 52,717
ADVISOR NATURAL RESOURCES FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 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 year and 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 MONTHS YEAR YEARS YEARS
FIDELITY ADV NATURAL - -8.79% -4.64% 113.18% 322.14%
INST CL
S&P 500 3.56% 26.91% 152.28% 410.11%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year, five years or 10 years. You can compare Institutional Class'
returns to the performance of the S&P 500 - a widely recognized,
unmanaged index of common stocks. This benchmark includes reinvested
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
FIDELITY ADV NATURAL - -4.64% 16.35% 15.49%
INST CL
S&P 500 26.91% 20.33% 17.69%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19980131 19980212 112337 S00000000000001
FA Natural Resources-CL I S&P 500
00686 SP001
1988/01/31 10000.00 10000.00
1988/02/29 10759.11 10466.00
1988/03/31 11052.63 10142.60
1988/04/30 11234.82 10255.18
1988/05/31 11052.63 10344.40
1988/06/30 11781.38 10819.21
1988/07/31 11730.77 10778.10
1988/08/31 11417.00 10411.64
1988/09/30 11366.40 10855.18
1988/10/31 11609.31 11156.95
1988/11/30 11346.15 10997.41
1988/12/31 11727.64 11189.86
1989/01/31 12675.55 12008.96
1989/02/28 12488.17 11709.94
1989/03/31 12730.66 11982.78
1989/04/30 13127.46 12604.69
1989/05/31 13436.08 13115.18
1989/06/30 13392.00 13040.42
1989/07/31 14361.95 14217.97
1989/08/31 14791.82 14496.64
1989/09/30 14395.02 14437.21
1989/10/31 13888.00 14102.26
1989/11/30 14505.24 14389.95
1989/12/31 15613.94 14735.31
1990/01/31 14629.06 13746.57
1990/02/28 15313.67 13923.90
1990/03/31 15601.92 14292.88
1990/04/30 14785.20 13935.56
1990/05/31 16286.54 15294.28
1990/06/30 16082.35 15190.28
1990/07/31 16875.06 15141.67
1990/08/31 16430.66 13772.86
1990/09/30 15914.20 13102.12
1990/10/31 14773.18 13045.78
1990/11/30 15013.40 13888.54
1990/12/31 14789.21 14276.03
1991/01/31 15277.17 14898.47
1991/02/28 17479.29 15963.71
1991/03/31 17066.39 16350.03
1991/04/30 17153.98 16389.27
1991/05/31 17979.77 17097.28
1991/06/30 16941.27 16314.23
1991/07/31 17504.31 17074.47
1991/08/31 17954.75 17479.14
1991/09/30 17254.07 17187.24
1991/10/31 17654.46 17417.54
1991/11/30 16228.09 16715.62
1991/12/31 16929.02 18627.88
1992/01/31 17980.35 18281.40
1992/02/29 18384.70 18519.06
1992/03/31 17926.43 18157.94
1992/04/30 18586.88 18691.78
1992/05/31 19085.59 18783.37
1992/06/30 18465.58 18503.50
1992/07/31 19206.89 19260.30
1992/08/31 18923.84 18865.46
1992/09/30 19112.54 19088.07
1992/10/31 18708.19 19154.88
1992/11/30 18950.80 19808.06
1992/12/31 19186.48 20051.70
1993/01/31 19801.53 20220.14
1993/02/28 20356.57 20495.13
1993/03/31 21706.67 20927.58
1993/04/30 22876.76 20421.13
1993/05/31 24001.85 20968.42
1993/06/30 24331.87 21029.22
1993/07/31 24001.85 20945.11
1993/08/31 25381.95 21738.93
1993/09/30 25246.94 21571.54
1993/10/31 26387.03 22018.07
1993/11/30 25396.96 21808.90
1993/12/31 26465.62 22072.78
1994/01/31 28074.81 22823.26
1994/02/28 27199.91 22204.75
1994/03/31 25528.23 21236.62
1994/04/30 25950.06 21508.45
1994/05/31 26293.77 21861.19
1994/06/30 25825.07 21325.59
1994/07/31 26699.97 22025.07
1994/08/31 27996.69 22928.10
1994/09/30 27856.08 22366.36
1994/10/31 27434.26 22869.60
1994/11/30 25637.60 22036.69
1994/12/31 25862.39 22363.49
1995/01/31 25354.36 22943.38
1995/02/28 26100.54 23837.48
1995/03/31 27561.15 24540.93
1995/04/30 28688.37 25263.66
1995/05/31 29085.27 26273.45
1995/06/30 29910.84 26883.78
1995/07/31 31180.94 27775.24
1995/08/31 31673.10 27844.96
1995/09/30 31911.24 29020.02
1995/10/31 30593.51 28916.42
1995/11/30 32149.39 30185.85
1995/12/31 33325.91 30767.23
1996/01/31 34590.61 31814.54
1996/02/29 35444.70 32109.46
1996/03/31 36528.74 32418.68
1996/04/30 38663.96 32896.53
1996/05/31 39370.23 33744.93
1996/06/30 39123.86 33873.50
1996/07/31 36988.63 32376.97
1996/08/31 38663.96 33059.80
1996/09/30 40339.29 34920.40
1996/10/31 41341.20 35883.51
1996/11/30 43460.00 38595.94
1996/12/31 43565.07 37831.36
1997/01/31 44265.75 40195.06
1997/02/28 41375.43 40510.19
1997/03/31 40306.88 38845.62
1997/04/30 40149.23 41164.71
1997/05/31 43810.30 43670.82
1997/06/30 43687.68 45627.27
1997/07/31 46280.22 49257.83
1997/08/31 46578.01 46498.41
1997/09/30 49949.26 49045.12
1997/10/31 46903.10 47407.02
1997/11/30 42978.23 49601.49
1997/12/31 43373.51 50453.15
1998/01/30 42213.57 51011.16
IMATRL PRASUN SHR__CHT 19980131 19980212 112343 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Natural Resources - Institutional Class
on January 31, 1988. As the chart shows, by January 31, 1998, the
value of the investment would have grown to $42,214 - a 322.14%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$51,011 - a 410.11% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 4.6
TEXACO, INC. 4.1
USX-MARATHON GROUP 3.9
GETCHELL GOLD CORP. 3.3
TOSCO CORP. 3.2
COASTAL CORP. (THE) 3.0
ELF AQUITAINE SA SPONSORED ADR 3.0
BRITISH PETROLEUM PLC ADR 2.7
EURO-NEVADA MINING LTD. 2.5
ROYAL DUTCH PETROLEUM CO. 2.3
TOP INDUSTRIES AS OF JANUARY 31, 1998
CRUDE PETROLEUM & GAS 18.5%
OIL & GAS EXPLORATION 16.5%
PETROLEUM REFINERS 15.8%
GOLD ORES 7.0%
DRILLING 4.6%
ALL OTHERS 37.6%
ROW: 1, COL: 1, VALUE: 37.6
ROW: 1, COL: 2, VALUE: 4.6
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 15.8
ROW: 1, COL: 5, VALUE: 16.5
ROW: 1, COL: 6, VALUE: 18.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR NATURAL RESOURCES FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Larry Rakers, Portfolio Manager of Fidelity Advisor Natural Resources
Fund
Q. HOW DID THE FUND PERFORM, LARRY?
Q. WHAT FACTORS HURT THE FUND'S PERFORMANCE IN THE LATEST SIX MONTHS?
A. The financial turmoil in Southeast Asia was the major factor. Asia
is responsible for about half of the growth in demand for almost all
of the commodities in the natural resources sector. Slowing Asian
economies mean that the consumption of natural resources is going to
decline. Consequently, most commodity prices - oil, natural gas, gold
and many base metals - tanked during the period. In fact, most stocks
in the natural resources sector underperformed the S&P 500 index over
the latest six months.
Q. IN SPITE OF THIS NEGATIVE ENVIRONMENT, WERE THERE ANY STOCKS IN THE
PORTFOLIO THAT OUTPERFORMED THE S&P 500?
A. A few. One example was Wainoco Oil, a refiner that is undergoing a
restructuring and benefits somewhat when oil prices decline slightly.
In addition, some silver companies, such as Pan American Silver,
profited from the run-up in the silver price at the end of the period
after billionare investor Warren Buffett went on a silver-buying
spree.
Q. THE FUND'S WEIGHTING IN THE OIL AND GAS SECTOR INCREASED OVER THE
PAST SIX MONTHS. WHAT DID YOU SEE?
A. The price of oil was below trend - or below a normal range of $18
to $20 a barrel - over the past several months. Historically, the
price of oil doesn't hover below trend very often or for periods
longer than about six to nine months. For that reason, I felt that it
would be better to own more oil stocks because if oil returned to the
trend range, these stocks would outperform. Primarily, I invested in
integrated oil companies such as Total, Texaco, and British Petroleum,
which look for oil, process it in their refineries and make chemicals
out of it or make gasoline and sell it to consumers at gasoline
stations. I felt the integrated oil companies had the least downside
risk in case my assumption was incorrect and the oil price stayed
below trend for a long period of time. Most integrated oil companies
have strong balance sheets and stock repurchase programs, pay regular
dividends and generate solid cash flows from the diversification of
their business.
Q. DID A POSSIBLE MILITARY STRIKE ON IRAQ AFFECT OIL PRICES AT THE END
OF THE PERIOD?
A. Most analysts agree that oil prices would have been even lower -
maybe hitting about $14 a barrel - at the end of the period if it
weren't for the situation in Iraq. There are a few scenarios to
consider here. Because of the oil-for-food program that the United
Nations instituted to keep the Iraqi people fed, a military strike
would probably avoid hitting Iraqi oilfields - meaning oil prices
wouldn't change much. In addition, if the situation is resolved
diplomatically, oil prices will continue to linger below trend because
of Asia's financial problems. The bottom line is that unless some
Iraqi oil fields are destroyed, which is unlikely, the threat of a
military action against Iraq won't help boost the price of oil.
Q. THE FUND REDUCED ITS INVESTMENTS IN THE PAPER AND FOREST PRODUCTS
SECTOR. IN FACT, TWO PAPER COMPANIES, FORT HOWARD AND BOISE CASCADE,
DROPPED OUT OF THE TOP 10 SINCE THE END OF JULY. WHY WAS THAT?
A. A lot of paper is consumed in Asia, and the forecasts for lower
commodity prices caused me to reduce the fund's paper exposure.
Unfortunately, that reasoning didn't pan out in reducing the Fort
Howard position. Procter & Gamble raised its tissue prices during the
period, causing tissue prices overall to rebound and Fort Howard to
perform reasonably well. Boise Cascade did fall along with paper
prices, however, so reducing that position was a good move.
Q. WHAT'S YOUR OUTLOOK FOR THE NATURAL RESOURCES SECTOR?
A. I'm optimistic about the long-term prospects for natural resource
companies. The short-term, on the other hand, depends on what happens
in Asia. Most natural resource companies have been punished as
commodities prices plummeted, which in turn slowed capacity additions.
This situation is setting the sector up for a great run sometime - the
question is when. If Southeast Asia rebounds quickly, we could see a
spike in natural resource stocks as soon as late 1998.
FUND FACTS
START DATE: December 29, 1987
SIZE: as of January 31, 1998, more than
$524 million
MANAGER: Lawrence Rakers, since 1997; joined
Fidelity in 1993
(checkmark)
ADVISOR NATURAL RESOURCES FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.2%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES - 0.0%
PETROLEUM - WHOLESALE - 0.0%
NGC Corp. 10,000 $ 160,000
CHEMICALS & PLASTICS - 2.5%
AGRICULTURAL CHEMICALS - 0.6%
Potash Corp. of Saskatchewan 35,000 2,981,691
CHEMICALS - 0.4%
Sasol, Ltd. 219,100 1,998,682
UNSUPPORTED PLASTICS FILM & SHEET - 1.5%
W.R. Grace & Co. 101,600 7,981,942
TOTAL CHEMICALS & PLASTICS 12,962,315
CONSTRUCTION - 0.4%
Walter Industries, Inc. (a) 45,800 864,475
Willbros Group, Inc. (a) 92,000 1,276,500
2,140,975
ELECTRONIC INSTRUMENTS - 0.1%
LAB ANALYTICAL INSTRUMENTS - 0.1%
Thermoquest Corp. (a) 21,500 301,000
ENERGY SERVICES - 7.0%
DRILLING - 4.6%
Diamond Offshore Drilling, Inc. 84,400 3,771,625
Noble Drilling Corp. 394,900 10,563,575
Transocean Offshore, Inc. 234,610 9,325,748
23,660,948
OIL & GAS SERVICES - 2.4%
Eni Spa 600,000 3,524,466
Halliburton Co. 42,940 1,929,616
McDermott International, Inc. 20,800 663,000
Schlumberger Ltd. 37,700 2,778,019
Weatherford Enterra, Inc. (a) 101,000 3,535,000
12,430,101
TOTAL ENERGY SERVICES 36,091,049
ENGINEERING - 0.1%
ARCHITECTS & ENGINEERS - 0.1%
Stolt Comex Seaway SA (a) 17,200 369,800
GAS - 2.1%
GAS DISTRIBUTION - 1.0%
MCN Corp. 135,000 4,995,000
GAS TRANSMISSION - 0.7%
Enron Corp. 60,001 2,486,291
Williams Companies, Inc. 35,000 997,500
3,483,791
GAS TRANSMISSION & DISTRIBUTION - 0.4%
Consolidated Natural Gas Co. 15,000 814,688
Questar Corp. 35,000 1,456,875
2,271,563
TOTAL GAS 10,750,354
HOLDING COMPANIES - 1.8%
HOLDING COMPANY OFFICES, NEC - 1.8%
Norfolk Southern Corp. 290,000 9,153,125
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
INDUSTRIAL MACHINERY - WHOLESALE - 0.1%
CE Franklin Ltd. (a) 80,000 604,582
SHARES VALUE (NOTE 1)
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.1%
Gasonics International Corp. (a) 60,000 $ 697,500
SPECIAL INDUSTRIAL MACHINERY - 0.1%
Thermo Fibertek, Inc. (a) 35,000 435,313
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,737,395
MEDICAL EQUIPMENT & SUPPLIES - 0.0%
MEDICAL TECHNOLOGY - 0.0%
Nitinol Medical Technologies, Inc. (a) 25,000 203,125
METALS & MINING - 3.9%
ALUMINUM, EXTRUDED PRODUCTS - 0.4%
Alumax, Inc. (a) 60,000 2,088,750
METAL MINING - 0.5%
Breakwater Resources Ltd. (a) 825,300 1,956,158
Columbia Metals Ltd. (a) 1,479,900 376,190
2,332,348
METAL MINING SERVICES - 0.1%
Minefinders Corp., Ltd. (a) 440,100 604,720
MISCELLANEOUS NONMETAL MINERALS - 0.1%
Camphor Ventures, Inc. (a) 573,600 512,301
MISCELLANEOUS METAL ORES, NEC - 0.0%
Helix Resources NL (a) 650,500 196,232
PRIMARY PRODUCTION OF ALUMINUM - 0.7%
Reynolds Metals Co. 60,000 3,783,750
PRIME NONFERROUS SMELTING - 2.1%
Alcan Aluminium Ltd. 135,000 4,016,008
Aluminum Co. of America 89,000 6,797,375Metaleurop SA warrants
2/4/00 (a) 16,000 20,083
10,833,466
TOTAL METALS & MINING 20,351,567
OIL & GAS - 52.0%
CRUDE PETROLEUM & GAS - 18.5%
Anadarko Petroleum Corp. 55,000 3,245,000
Beau Canada Exploration Ltd. (a) 550,000 982,447
British Borneo Petroleum 150,632 893,188
Brown (Tom), Inc. (a) 90,000 1,575,000
Burlington Resources, Inc. 57,365 2,452,354
Cabot Oil & Gas Corp. Class A 55,000 1,089,688
Canadian Natural Resources Ltd. (a) 30,000 587,407
EEX Corp. (a) 440,000 3,712,500
Elf Aquitaine SA sponsored ADR 272,500 15,413,281
Enron Oil & Gas Co. 70,000 1,400,000
HS Resources, Inc. (a) 85,000 1,195,313
Lomak Petroleum, Inc. 80,000 1,275,000
Louis Dreyfus Natural Gas Corp. (a) 85,000 1,535,313
Magnum Hunter Resources, Inc. (a) 270,000 1,316,250
Nuevo Energy Corp. (a) 88,400 3,237,650
Occidental Petroleum Corp. 144,800 3,692,400
Ocean Energy, Inc. (a) 83,500 3,830,563
Paramount Resources Ltd. (c) 262,600 2,661,090
Petsec Energy Ltd. sponsored ADR (a) 92,000 1,368,500
Petrobras PN (Pfd. Reg.) 45,480,000 9,719,249
Pioneer Natural Resources Co. 55,000 1,192,813
Plains Resources, Inc. (a) 94,600 1,466,300
Rio Alto Exploration Ltd. (a) 187,500 1,642,420
Santa Fe Energy Resources, Inc. 22,900 240,450
Total SA sponsored ADR 457,000 23,706,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
OIL & GAS - CONTINUED
CRUDE PETROLEUM & GAS - CONTINUED
Tullow Oil PLC (a) 201,600 $ 480,798
Vastar Resources, Inc. 25,000 829,688
YPF Sociedad Anonima:
sponsored ADR representing
Class D shares 120,000 3,652,500
Class D 35,000 1,060,882
95,454,919
OIL & GAS EXPLORATION - 16.5%
Abacan Resource Corp. (a) 794,300 1,290,738
Amerada Hess Corp. 90,000 4,921,875
Amoco Corp. 20,000 1,627,500
Chevron Corp. 10,000 748,125
Exxon Corp. 180,000 10,676,250
Kerr-McGee Corp. 80,000 5,010,000
Mobil Corp. 24,200 1,648,625
Petro-Canada 475,000 8,452,131
Phillips Petroleum Co. 212,200 9,336,800
Texaco, Inc. 410,000 21,345,625
USX-Marathon Group 597,300 20,046,881
Unocal Corp. 10,000 343,750
85,448,300
OIL FIELD EQUIPMENT - 1.2%
Cooper Cameron Corp. (a) 59,600 3,065,675
EVI, Inc. (a) 70,000 2,826,250
Ensign Resource Service Group Ord. 3,000 58,122
5,950,047
PETROLEUM REFINERS - 15.8%
Ashland, Inc. 25,000 1,318,750
British Petroleum PLC ADR 175,997 14,134,759
Coastal Corp. (The) 268,000 15,544,000
Royal Dutch Petroleum Co. 231,000 11,838,750
Shell Transport & Trading Co.
PLC ADR 36,100 1,462,050
Tosco Corp. 493,900 16,514,781
Tesoro Petroleum Corp. (a) 155,000 2,480,000
Ultramar Diamond Shamrock Corp. 74,800 2,491,775
Valero Energy Corp. 296,800 9,367,750
Wainoco Oil Corp. (a) 837,400 6,489,850
81,642,465
TOTAL OIL & GAS 268,495,731
PACKAGING & CONTAINERS - 0.6%
GLASS CONTAINERS - 0.6%
Owens-Illinois, Inc. (a) 83,400 3,033,675
PAPER & FOREST PRODUCTS - 8.7%
CONVERTED PAPER & PAPERBOARD - 1.9%
American Pad & Paper Co. (a) 57,300 454,819
Boise Cascade Corp. 300,000 9,600,000
10,054,819
ENVELOPES - 1.8%
Mail-Well, Inc. (a) 238,150 9,496,231
PAPER - 1.5%
Chesapeake Corp. 50,200 1,700,525
Georgia-Pacific Corp. 10,000 551,250
Mercer International, Inc. (SBI) 313,100 2,583,075
Stone Container Corp. (a) 105,000 1,338,750
Willamette Industries, Inc. 49,900 1,671,650
7,845,250
SHARES VALUE (NOTE 1)
PAPER MILLS - 2.2%
Alliance Forest Products, Inc. (a) 148,500 $ 2,744,427
Alliance Forest Products, Inc. (a)(c) 125,000 2,310,123
Fort James Corp. 145,800 6,260,288
11,314,838
PAPERBOARD MILLS - 0.3%
Jefferson Smurfit Corp. (a) 93,700 1,417,213
PULP MILLS - 1.0%
Buckeye Technologies, Inc. (a) 120,000 4,920,000
TOTAL PAPER & FOREST PRODUCTS 45,048,351
PRECIOUS METALS - 11.9%
GOLD & SILVER ORES - 4.4%
Getchell Gold Corp. (a) 669,500 17,072,250
Mentor Exploration &
Development Co. Ltd. (a) 80,000 453,437
Industrias Penoles SA 1,450,000 5,444,563
22,970,250
GOLD ORES - 7.0%
Bakyrchik Gold PLC (a) 160,000 18,295
Euro-Nevada Mining Ltd. 815,800 13,115,125
First Dynasty Mines Ltd. (a) 526,700 195,402
Franco-Nevada Mining Corp. 168,300 3,700,045
Francisco Gold Corp. (a) 71,000 621,930
Golden Knight Resources, Inc. (a) 25,000 41,222
Greenstone Resources Ltd. (a) 951,700 6,048,040
Greenstone Resources Ltd.
warrants 2/28/02 (a) 50,700 109,721
Greenstone Resources Ltd. (a)(c) 148,300 942,444
Indochina Goldfields Ltd. (a) 133,800 210,506
Indochina Goldfields Ltd. (a)(c) 170,000 267,459
Kalahari Goldridge Mining Co. Ltd. (a) 1,200,000 270,018
Kinross Gold Corp. (a) 199,100 752,327
Meridian Gold, Inc. (a) 946,400 2,990,924
Mountain Province Mining, Inc. (a) 135,000 394,181
Queenston Mining, Inc. (a) 385,400 225,063
Randgold & Exploration Co. Ltd. (a) 250,000 372,491
Repadre Capital Corp. (a) 50,000 171,756
Resources William, Inc. (a) 6,910,000 2,278,727
Resources William, Inc.
(consent fee) (a) 686,000 158,364
Resources William, Inc. (consent fee)
warrants 12/31/02 (a) 1,029,000 -
Stillwater Mining Co. (a) 120,000 2,362,500
Sudbury Contact Mines Ltd. (a) 100,000 343,513
Sutton Resources Ltd. (a) 57,000 426,849
TVI Pacific, Inc. (a) 459,200 26,816
TVI Pacific, Inc. (a)(c) 1,860,000 108,619
West Rand Consolidated
Mines Ltd. (Reg.) (a) 242,200 159,568
36,311,905
SILVER ORES - 0.5%
Compania de Minas Buenaventura
SA Class B sponsored ADR 138,500 1,644,688
Pan American Silver Corp. (a) 74,800 714,314
2,359,002
TOTAL PRECIOUS METALS 61,641,157
RAILROADS - 1.7%
CSX Corp. 158,300 8,389,900
Illinois Central Corp., Series A 12,400 412,300
8,802,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
STATIONARY & OFFICE SUPPLIES - WHOLESALE - 0.1%
Boise Cascade Office Products Corp. (a) 25,000 $ 417,188
SERVICES - 0.1%
BUSINESS SERVICES - 0.1%
Zebra Technologies Corp. Class A (a) 15,000 416,250
SHIPPING - 0.1%
DEEP SEA TRANSPORT - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 30,000 603,750
TRUCKING & FREIGHT - 2.8%
AIR COURIER SERVICES - 2.2%
Airborne Freight Corp. 50,300 3,577,588
CNF Transportation, Inc. 170,000 7,766,875
11,344,463
FREIGHT FORWARDING - 0.5%
Expeditors International of
Washington, Inc. 91,000 2,832,374
TRUCKING, LONG DISTANCE - 0.1%
Consolidated Freightways Corp. (a) 40,000 592,500
TOTAL TRUCKING & FREIGHT 14,769,337
TOTAL COMMON STOCKS
(Cost $515,598,459) 497,448,344
CONVERTIBLE BONDS - 0.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT
METALS & MINING - 0.1%
METAL MINING - 0.1%
Dayton Mining Corp.
7%, 4/1/02
(Cost $318,250) - $ 475,000 304,000
CASH EQUIVALENTS - 3.7%
SHARES
Taxable Central Cash Fund (b)
(Cost $19,167,450) 19,167,450 19,167,450
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $535,084,159) $ 516,919,794
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
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 $6,289,735 or
1.2% of net assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 66.9%
Canada 13.4
France 7.6
United Kingdom 3.2
Netherlands 2.3
Brazil 1.9
Mexico 1.1
Others (individually less than 1%) 3.6
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $535,094,532. Net unrealized depreciation
aggregated $18,174,738, of which $46,839,362 related to appreciated
investment securities and $65,014,100 related to depreciated
investment securities.
ADVISOR NATURAL RESOURCES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
516,919,794
(COST $535,084,159) - SEE ACCOMPANYING SCHEDULE
FOREIGN CURRENCY HELD AT VALUE 96
(COST $96)
RECEIVABLE FOR INVESTMENTS SOLD
12,405,407
RECEIVABLE FOR FUND SHARES SOLD
453,937
DIVIDENDS RECEIVABLE
512,442
INTEREST RECEIVABLE
120,498
OTHER RECEIVABLES 41,435
PREPAID EXPENSES 10,593
TOTAL ASSETS
530,464,202
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 2,572,933
PAYABLE FOR FUND SHARES REDEEMED 2,353,681
ACCRUED MANAGEMENT FEE 259,141
DISTRIBUTION FEES PAYABLE 257,609
OTHER PAYABLES AND 200,940
ACCRUED EXPENSES
TOTAL LIABILITIES
5,644,304
NET ASSETS $
524,819,898
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
536,378,776
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
(1,119,377)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
7,729,231
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(18,168,732)
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
524,819,898
</TABLE>
CALCULATION OF MAXIMUM $20.19
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($6,393,855 (DIVIDED BY)
316,712 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $21.42
(100/94.25 OF $20.19)
CLASS T: $20.38
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($461,640,184 (DIVIDED BY)
22,651,266 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $21.12
(100/96.50 OF $20.38)
CLASS B: $20.11
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($51,712,003 (DIVIDED BY)
2,570,968 SHARES) A
CLASS C: $20.34
NET ASSET VALUE AND OFFERING
PRICE PER SHARE ($738,124 (DIVIDED BY)
36,288 SHARES) A
INSTITUTIONAL CLASS: $20.38
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($4,335,732 (DIVIDED BY) 212,727 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 2,681,587
DIVIDENDS
INTEREST 840,293
TOTAL INCOME 3,521,880
EXPENSES
MANAGEMENT FEE $ 1,897,337
TRANSFER AGENT FEES 764,483
DISTRIBUTION FEES 1,732,263
ACCOUNTING FEES AND EXPENSES 208,891
NON-INTERESTED TRUSTEES' COMPENSATION 1,284
CUSTODIAN FEES AND EXPENSES 54,739
REGISTRATION FEES 31,075
AUDIT 28,134
TOTAL EXPENSES BEFORE REDUCTIONS 4,718,206
EXPENSE REDUCTIONS (109,352) 4,608,854
NET INVESTMENT INCOME (LOSS) (1,086,974)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 41,713,592
FOREIGN CURRENCY TRANSACTIONS (37,794) 41,675,798
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (98,747,833)
ASSETS AND LIABILITIES IN (9) (98,747,842)
FOREIGN CURRENCIES
NET GAIN (LOSS) (57,072,044)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (58,159,018)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED NINE MONTHS ENDED
JANUARY 31, 1998 JULY 31,
(UNAUDITED) 1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (1,086,974) $ (812,585)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 41,675,798 83,721,448
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (98,747,842) (11,245,423)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (58,159,018) 71,663,440
DISTRIBUTIONS TO SHAREHOLDERS - (376,703)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME (30,726) (156,340)
FROM NET REALIZED GAIN (102,296,701) (41,625,679)
TOTAL DISTRIBUTIONS (102,327,427) (42,158,722)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (8,291,059) 13,485,202
REDEMPTION FEES 55,282 60,962
TOTAL INCREASE (DECREASE) IN NET ASSETS (168,722,222) 43,050,882
NET ASSETS
BEGINNING OF PERIOD 693,542,120 650,491,238
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF
$1,119,377 AND $1,677, RESPECTIVELY) $ 524,819,898 $ 693,542,120
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31, OCTOBER 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.16 $ 25.11 $ 23.65
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.03) (.05) 0.00
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.98) 2.81 1.46
TOTAL FROM INVESTMENT OPERATIONS (2.01) 2.76 1.46
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.10) -
IN EXCESS OF NET INVESTMENT INCOME - (.04) -
FROM NET REALIZED GAIN (3.96) (1.57) -
TOTAL DISTRIBUTIONS (3.96) (1.71) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - -
NET ASSET VALUE, END OF PERIOD $ 20.19 $ 26.16 $ 25.11
TOTAL RETURN B, C (8.98)% 11.45% 6.17%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,394 $ 6,372 $ 1,609
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.37% A 1.71% A, F 1.66% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.33% A, G 1.68% A, G 1.58% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.24)% A (.28)% A (.01)% A
PORTFOLIO TURNOVER 89% A 116% A 137%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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 (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO OCTOBER 31,
1996. 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 1994 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.34 $ 25.12 $ 19.25 $ 17.56 $ 17.59 $ 13.88 $
14.11
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.03) D (.02) D .00 D (.05) D (.11) D .22
(.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.01) 2.83 6.56 2.00 .76 4.91 .79
TOTAL FROM INVESTMENT OPERATIONS (2.04) 2.81 6.56 1.95 .65 5.13 .69
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.01) - - - - -
IN EXCESS OF NET INVESTMENT INCOME - (.01) - - - - -
FROM NET REALIZED GAIN (3.92) (1.57) (.69) (.26) (.68) (1.42)
(.92)
TOTAL DISTRIBUTIONS (3.92) (1.59) (.69) (.26) (.68) (1.42)
(.92)
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - - - - -
NET ASSET VALUE, END OF PERIOD $ 20.38 $ 26.34 $ 25.12 $ 19.25 $ 17.56 $ 17.59 $
13.88
TOTAL RETURN B, C (9.03)% 11.62% 35.01% 11.40% 3.97% 41.05%
5.97%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 461,640 $ 618,083 $ 602,915 $ 272,979 $ 199,361 $ 40,309 $
7,087
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.43% A 1.47% A 1.59% 1.86% E 2.10% 2.63%
3.27% H
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.40% A, F 1.44% A, F 1.56% F 1.84% F 2.07% F 2.62%
3.27%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME (LOSS) TO (.30)% A (.12)% A .00% (.30)% (.67)% (1.18)%
(1.22)%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 89% A 116% A 137% 161% 125% 208%
248%
AVERAGE COMMISSION RATE G $ .0142 $ .0286 $ .0337
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER. F FMR OR THE FUND
HAS ENTERED INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE
5 OF NOTES TO FINANCIAL STATEMENTS). G FOR
FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE
ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER. H LIMITED IN
ACCORDANCE WITH A STATE EXPENSE LIMITATION.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.99 $ 24.88 $ 19.23 $ 18.87
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.10) (.12) (.15) (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.97) 2.80 6.49 .39
TOTAL FROM INVESTMENT OPERATIONS (2.07) 2.68 6.34 .36
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (3.81) (1.57) (.69) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - -
NET ASSET VALUE, END OF PERIOD $ 20.11 $ 25.99 $ 24.88 $ 19.23
TOTAL RETURN B, C (9.25)% 11.19% 33.87% 1.91%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 51,712 $ 59,044 $ 36,106 $ 2,508
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.98% A 2.04% A 2.28% 2.23% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.94% A, G 2.02% A, G 2.24% G 2.21% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.85)% A (.67)% A (.68)% (.67)% A
PORTFOLIO TURNOVER 89% A 116% A 137% 161%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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 NET
INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD. E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT
OF SALE OF CLASS B 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.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 24.39
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.77)
TOTAL FROM INVESTMENT OPERATIONS (2.83)
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (1.22)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 20.34
TOTAL RETURN B, C (11.73)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 738
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.24% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.21% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.35)% A
PORTFOLIO TURNOVER 89% A
AVERAGE COMMISSION RATE H $ .0142
A ANNUALIZED B THE TOTAL
RETURN WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD
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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF
CLASS C SHARES) TO JANUARY 31,
1998. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 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
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED NINE MONTHS ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 1996 1995 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.42 $ 25.17 $ 19.27 $ 18.87
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D .03 .04 .04 (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.01) 2.85 6.55 .41
TOTAL FROM INVESTMENT OPERATIONS (1.98) 2.89 6.59 .40
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME - (.05) - -
IN EXCESS OF NET INVESTMENT INCOME (.09) (.02) - -
FROM NET REALIZED GAIN (3.97) (1.57) (.69) -
TOTAL DISTRIBUTIONS (4.06) (1.64) (.69) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - - -
NET ASSET VALUE, END OF PERIOD $ 20.38 $ 26.42 $ 25.17 $ 19.27
TOTAL RETURN B, C (8.97)% 11.95% 35.13% 2.12%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,336 $ 10,042 $ 9,860 $ 718
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A 1.08% A 1.44% 1.68% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS .86% A, G 1.06% A, G 1.39% G 1.66% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS .28% A .24% A .17% (.13)% A
PORTFOLIO TURNOVER 89% A 116% A 137% 161%
AVERAGE COMMISSION RATE H $ .0142 $ .0286 $ .0337
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). D NET INVESTMENT INCOME (LOSS) 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Natural Resources 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value 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. Purchases
and sales, of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class C and shares of Class C for distribution under federal and state
securities law. These expenses are borne by Class C 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 litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), net operating losses and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
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 $268,695,205 and $375,192,301, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .59% of average net
assets.
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%*
CLASS C 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 $ 8,338 $ 8,338
CLASS T 1,432,628 1,432,628
CLASS B 290,460 72,616
CLASS C 837 -
$ 1,732,263 $ 1,513,582
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 4,004
CLASS T $ 60,472
CLASS B $ 15,600
CLASS C $ 1,526
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
based on declining rates ranging from 5% to 1% for Class B and 1% for
Class C, 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 $ 39,368 $ 29,191
CLASS T 179,624 124,785
CLASS B 112,759 0 *
CLASS C 0 0*
$ 331,751 $ 153,976
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 10,712 .32 *
CLASS T FIIOC ** 668,194 .24 *
CLASS B FIIOC ** 78,659 .27 *
CLASS C FIIOC ** 276 .28 *
INSTITUTIONAL CLASS FIIOC ** 6,642 .17 *
$ 764,483
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $60,394 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 2,672
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 $103,401 under this arrangement.
In addition, FMR voluntarily agreed to reimburse certain transfer
agent, distribution and registration expenses for Class C. For the
period the reimbursement reduced these expenses by $253.
In addition, the fund has entered into arrangements with its custodian
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 $3,026 under the custodian arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS NINE MONTHS
ENDED ENDED
JANUARY 31, JULY 31,
1998 A 1997
CLASS A
FROM NET INVESTMENT INCOME $ - $ 13,382
FROM NET REALIZED GAIN 1,048,812 150,076
TOTAL $ 1,048,812 $ 163,458
CLASS T
FROM NET INVESTMENT INCOME $ - $ 488,121
FROM NET REALIZED GAIN 90,875,603 38,300,093
TOTAL $ 90,875,603 $ 38,788,214
CLASS B
FROM NET REALIZED GAIN $ 8,917,590 $ 2,464,412
CLASS C
FROM NET REALIZED GAIN $ 16,549 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ - $ 31,540
IN EXCESS OF NET INVESTMENT INCOME 30,726 -
FROM NET REALIZED GAIN 1,438,147 711,098
TOTAL $ 1,468,873 $ 742,638
$ 102,327,427 $ 42,158,722
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
SIX MONTHS NINE MONTHS SIX MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 1998 A 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A 90,776 209,436 $ 2,149,446 $ 5,153,545
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 43,804 6,590 998,062 161,464
SHARES REDEEMED (61,484) (36,492) (1,422,035) (892,062)
NET INCREASE (DECREASE) 73,096 179,534 $ 1,725,473 $ 4,422,947
CLASS T 1,572,399 7,500,800 $ 37,361,018 $ 184,421,132
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 3,685,456 1,447,428 85,183,913 35,664,618
SHARES REDEEMED (6,071,121) (9,481,432) (136,799,443) (231,213,235)
NET INCREASE (DECREASE) (813,266) (533,204) $ (14,254,512) $ (11,127,485)
CLASS B 380,321 1,183,380 $ 8,806,265 $ 28,872,353
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 333,524 96,152 7,596,629 2,345,122
SHARES REDEEMED (414,874) (458,573) (9,159,727) (10,907,231)
NET INCREASE (DECREASE) 298,971 820,959 $ 7,243,167 $ 20,310,244
CLASS C 35,500 - $ 763,808 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 788 - 16,454 -
NET INCREASE (DECREASE) 36,288 - $ 780,262 $ -
INSTITUTIONAL CLASS 65,976 342,819 $ 1,545,784 $ 8,550,867
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 60,810 29,515 1,415,854 727,819
SHARES REDEEMED (294,145) (384,020) (6,747,087) (9,399,190)
NET INCREASE (DECREASE) (167,359) (11,686) $ (3,785,449) $ (120,504)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 3,421
CLASS T 19,865
CLASS B 2,514
CLASS C 3,215
INSTITUTIONAL CLASS 2,060
$ 31,075
ADVISOR TECHNOLOGY FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the past one
year and life of fund total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED PAST 6 PAST 1 LIFE OF
AUGUST 31, 1993 MONTHS YEAR FUND
FIDELITY ADV TECHNOLOGY - INST CL -9.46% 4.92% 45.72%
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED PAST 1 LIFE OF
AUGUST 31, 1993 YEAR FUND
FIDELITY ADV TECHNOLOGY - INST CL 4.92% 30.58%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 110426 S00000000000001
FA Technology -CL I S&P 500
00202 SP001
1996/09/03 10000.00 10000.00
1996/09/30 11120.00 10516.69
1996/10/31 11230.00 10806.74
1996/11/30 12740.00 11623.62
1996/12/31 12478.92 11393.36
1997/01/31 13888.97 12105.21
1997/02/28 12932.15 12200.12
1997/03/31 12146.56 11698.81
1997/04/30 12871.72 12397.23
1997/05/31 14332.13 13151.98
1997/06/30 14473.13 13741.19
1997/07/31 16094.69 14834.57
1997/08/31 16568.06 14003.54
1997/09/30 17259.77 14770.51
1997/10/31 14759.13 14277.18
1997/11/30 14546.31 14938.07
1997/12/31 13816.57 15194.56
1998/01/30 14571.63 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 110427 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Technology - Institutional Class on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$14,572 - a 45.72% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 10.8
LINEAR TECHNOLOGY CORP. 4.6
SOLECTRON CORP. 4.6
DELL COMPUTER CORP. 4.2
SCI SYSTEMS, INC. 3.9
MICRON TECHNOLOGY, INC. 3.8
MAXIM INTEGRATED PRODUCTS, INC. 3.3
MERCK & CO., INC. 2.9
MCI COMMUNICATIONS CORP. 2.5
HBO & CO. 2.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
SEMICONDUCTORS 20.9%
PREPACKAGED COMPUTER
SOFTWARE 17.4%
COMPUTER PERIPHERALS 7.0%
MINI & MICRO COMPUTERS 5.4%
COMPUTER SERVICES 4.8%
ALL OTHERS 44.5%
ROW: 1, COL: 1, VALUE: 45.5
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 17.4
ROW: 1, COL: 6, VALUE: 20.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR TECHNOLOGY FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with
Adam Hetnarski, Portfolio Manager of Fidelity Advisor Technology Fund
Q. HOW DID THE FUND PERFORM, ADAM?
Q. WHY DID THE FUND UNDERPERFORM THE S&P 500?
A. I became bearish - or somewhat pessimistic - about the
steady-growing, larger-capitalization technology stocks toward the end
of July. I felt their multiples - or price-to-earnings ratios (P/Es) -
could not expand much further, especially after several companies
began to report disappointing earnings but their multiples weren't
reduced. This thought process led me to purchase shares of higher
growth companies - stocks of companies that have shown or are expected
to show rapid earnings and revenue growth. By late October, financial
turmoil in Southeast Asia and falling semiconductor prices forced the
multiples of many technology stocks to contract rapidly.
Unfortunately, the growth stocks were the hardest hit.
Q. LOOKING MORE CLOSELY, WHICH INDIVIDUAL HOLDINGS DETRACTED FROM THE
FUND'S RETURN?
A. MicroProse, a software game company, was scheduled to merge with GT
Interactive Software, but the merger fell through - sending MicroProse
shares tumbling. On top of that, the company "took its eye off of the
ball" during merger negotiations and, subsequently, its earnings
numbers came in far below expectations. Altera, which was hurt by a
slowdown in the semiconductor market, was another detractor. Finally,
the fund lost out by not owning Cisco Systems, a large computer
networking company, during the period. I felt that Cisco's products
were becoming commodities and that its stock would be penalized as a
result. That didn't happen. In fact, the company strengthened its
market position and even expanded into the emerging market for
voice-over-Internet transmission by making an acquisition at the end
of the period.
Q. ON THE POSITIVE SIDE, WHICH INDIVIDUAL HOLDINGS HELPED PERFORMANCE?
A. Yahoo, an Internet services company, historically has enjoyed a
seasonal boost in the fourth quarter, and that was the case this year
as well. More businesses advertise on the Internet during the
Christmas quarter and Yahoo derives all of its revenues from
advertising. HBO & Co. was another contributor to performance. The
company dominated its competitors by increasing sales of software and
services to health care providers.
Q. MICROSOFT REPRESENTED ABOUT 11% OF THE FUND AT THE END OF PERIOD.
WHAT DID YOU FIND ATTRACTIVE ABOUT THIS STOCK AND DID IT CONTRIBUTE TO
PERFORMANCE?
A. Holding Microsoft during the period didn't help performance, but it
didn't hurt either. However, there is something to be said for a stock
that remained fairly steady during the volatile environment for
technology stocks we saw in the fourth quarter of 1997. I found the
stock attractive because it plans to introduce two new operating
systems in late 1998 or early 1999 - Windows 98 and NT 5.0. I felt the
impending upgrade cycle at corporations boded well for future profits.
Q. APPLIED MATERIALS AND COMPAQ COMPUTER MADE UP ABOUT 17% OF THE
PORTFOLIO AT THE END OF JULY. WHY DID YOU DRAMATICALLY REDUCE THOSE
POSITIONS?
A. I decreased the fund's holdings in Applied Materials when memory
chip prices started to fall. I believed that there were going to be
capacity problems for memory providers. As for Compaq, I reduced the
position when the company reported slower-than-expected PC unit sales
growth. In addition, Compaq announced a $9.6-billion deal to acquire
Digital Equipment at the end of January, and I feel that big mergers
in the technology industry generally don't work.
Q. WHAT'S YOUR OUTLOOK FOR THE TECHNOLOGY MARKET?
A. I expect more bad news as a result of the fallout in Asia - meaning
U.S. technology exports may fall as Asian goods become cheaper. I also
anticipate more earnings disappointments, which should continue to eat
away at the multiples of many technology stocks. I believe that 1999
may be a better year, with the rollout of Microsoft's new operating
systems. These new product introductions should drive the requirement
for more powerful PCs and expanded bandwidth in the corporate
environment.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$106 million
MANAGER: Adam Hetnarski, since inception;
joined Fidelity in 1991
(checkmark)
ADVISOR TECHNOLOGY FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.4%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.0%
AIRCRAFT - 1.0%
Gulfstream Aerospace Corp. (a) 30,000 $ 1,021,866 40273410
AIR TRANSPORTATION - 1.1%
AIR TRANSPORT, MAJOR NATIONAL - 1.1%
Alaska Air Group, Inc. (a) 6,300 305,944 01165910
Southwest Airlines Co. 33,600 875,700 84474110
1,181,644
APPLIANCE STORES - 0.4%
ELECTRIC APPLIANCES - WHOLESALE - 0.4%
Cellstar Corp. (a) 22,000 437,250 15092510
COMMUNICATIONS EQUIPMENT - 7.5%
DATACOMMUNICATIONS EQUIPMENT - 4.1%
Cabletron Systems, Inc. (a) 28,900 417,244 12692010
Cisco Systems, Inc. (a) 18,750 1,182,422 17275R10
IFR Systems, Inc. 21,100 340,238 44950710
Level One Communications, Inc. 8,800 339,900 52729510
3Com Corp. (a) 66,000 2,182,125 88553510
4,461,929
TELEPHONE EQUIPMENT - 3.4%
Ascend Communications, Inc. (a) 40,600 1,200,238 04349110
DSC Communications Corp. (a) 9,300 186,000 23331110
DSP Communications, Inc. (a) 66,600 949,050 23332K10
Nokia Corp. AB sponsored ADR 17,100 1,299,600 65490220
3,634,888
TOTAL COMMUNICATIONS EQUIPMENT 8,096,817
COMPUTER SERVICES & SOFTWARE - 23.7%
COMPUTER SERVICES - 4.8%
Electronic Data Systems Corp. 19,000 790,875 28566110
Excite, Inc. (a) 5,800 247,950 30090410
HBO & Co. 50,900 2,662,706 40410010
Lycos, Inc. 1,500 57,281 55081810
PsiNet, Inc. 53,700 399,394 74437C10
Yahoo, Inc. (a) 15,500 982,313 98433210
5,140,519
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.1%
Saville Systems Ireland PLC
sponsored ADR 2,100 85,575 80517410
Verisign, Inc. 100 1,400 92343E10
86,975
CAD/CAM/CAE - 0.9%
Parametric Technology Corp. 1,600 81,200 69917310
Synopsys, Inc. 28,968 896,198 87160710
977,398
DATA PROCESSING - 0.2%
First Data Corp. 7,200 220,500 31996310
ELECTRONIC INFORMATION RETRIEVAL - 0.3%
E Trade Group, Inc. (a) 14,100 307,556 26924610
PREPACKAGED COMPUTER SOFTWARE - 17.4%
Autodesk, Inc. 5,200 200,850 05276910
Advant Corp. (a) 11,000 169,125 05348710
BMC Software, Inc. (a) 10,900 738,475 05592110
Cadence Design Systems, Inc. (a) 20,600 576,800 12738710
Computer Associates International, Inc. 1,300 69,144 20491210
Compuware Corp. (a) 18,500 721,500 20563810
Electronic Arts, Inc. (a) 21,807 783,689 28551210
Industrial-Matematik International Corp. 4,600 120,750 45579210
SHARES VALUE (NOTE 1)
i2 Technologies, Inc. 5,000 $ 268,125 46575410
Manugistics Group, Inc. 8,100 327,038 56501110
Microsoft Corp. 77,800 11,606,788 59491810
MicroProse, Inc. 195,100 378,006 59513V10
Netscape Communications Corp. 7,800 125,288 64114910
PeopleSoft, Inc. 36,400 1,274,000 71271310
Platinum Technology, Inc. 17,200 481,600 72764T10
Siebel Systems, Inc. 14,100 694,425 82617010
Systems Software Associates, Inc. 28,300 215,788 87183910
18,751,391
TOTAL COMPUTER SERVICES & SOFTWARE 25,484,339
COMPUTERS & OFFICE EQUIPMENT - 17.2%
COMPUTER PERIPHERALS - 7.0%
Creative Technology Ltd. (a) 20,300 386,969 22599992
EMC Corp. (a) 48,600 1,582,538 26864810
Fore Systems, Inc. (a) 81,700 1,205,075 34544910
Madge NV 8,100 40,247 55799522
SCI Systems, Inc. 96,400 4,193,400 78389010
Western Digital Corp. (a) 4,500 84,094 95810210
7,492,323
COMPUTER STORAGE DEVICES - 2.8%
Quantum Corp. 60,300 1,469,813 74790610
SanDisk Corp. 4,600 92,000 80004C10
Seagate Technology 64,400 1,493,275 81180410
3,055,088
COMPUTERS & OFFICE EQUIPMENT - 1.5%
Hewlett-Packard Co. 13,300 798,000 42823610
International Business Machines Corp. 7,900 779,631 45920010
1,577,631
ELECTRONIC COMPUTERS - 0.2%
Gateway 2000, Inc. 1,600 60,300 36783310
Micron Electronics, Inc. 12,500 145,313 59510010
205,613
GRAPHICS WORKSTATIONS - 0.1%
Silicon Graphics, Inc. 3,900 60,450 82705610
Sun Microsystems, Inc. 1,600 76,700 86681010
137,150
MINI & MICRO COMPUTERS - 5.4%
Compaq Computer Corp. 46,000 1,382,875 20449310
Dell Computer Corp. (a) 45,000 4,474,688 24702510
5,857,563
OFFICE AUTOMATION - 0.2%
Nam Tai Electronics, Inc. 14,200 222,763 62986520
TOTAL COMPUTERS & OFFICE EQUIPMENT 18,548,131
CONSUMER DURABLES - 0.0%
GLASS, PRESSED OR BLOWN - 0.0%
Dupont Photomasks, Inc. (a) 600 17,550 26613X10
DRUGS & PHARMACEUTICALS - 4.5%
BIOTECHNOLOGY - 0.0%
COR Therapeutics, Inc. 500 4,844 21775310
DRUGS - 4.5%
Barr Laboratories, Inc. (a) 27,650 926,275 06830610
Bristol-Myers Squibb Co. 2,900 289,094 11012210
Merck & Co., Inc. 26,400 3,095,400 58933110
Schering-Plough Corp. 7,500 542,813 80660510
4,853,582
TOTAL DRUGS & PHARMACEUTICALS 4,858,426
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRICAL EQUIPMENT - 1.6%
TV & RADIO COMMUNICATION EQUIPMENT - 1.6%
Loral Space & Communications Ltd. 75,500 $ 1,665,719 54399E22
ELECTRONIC INSTRUMENTS - 2.7%
ELECTRONIC EQUIPMENT - 1.3%
ORBIT/FR, Inc. 9,300 151,125 68592910
Sawtek, Inc. 4,700 122,494 80546810
Teradyne, Inc. 28,800 1,137,600 88077010
1,411,219
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 1.4%
Applied Materials, Inc. (a) 800 26,250 03822210
KLA-Tencor Corp. 24,500 918,750 48248010
Lam Research Corp. 25,337 578,000 51280710
Novellus Systems, Inc. 500 18,031 67000810
1,541,031
TOTAL ELECTRONIC INSTRUMENTS 2,952,250
ELECTRONICS - 26.8%
CONNECTORS - 0.3%
AMP, Inc. 9,500 380,000 03189710
ELECTRONIC CAPACITORS - 0.4%
Maxwell Technologies, Inc. 15,000 435,000 57776710
ELECTRONIC COMPONENTS & ACCESSORIES - 0.0%
International Manufacturing Services,
Inc. Class A 100 788 45985A10
ELECTRONICS & ELECTRONIC COMPONENTS - 4.6%
Solectron Corp. 113,600 4,913,200 83418210
PRINTED CIRCUIT BOARDS - 0.6%
DII Group, Inc. (a) 22,200 627,150 23294910
SEMICONDUCTORS - 20.9%
Altera Corp. (a) 48,900 1,674,825 02144110
Applied Micro Circuits Corp. 3,600 68,850 03822W10
Cypress Semiconductor Corp. (a) 12,400 122,450 23280610
Integrated Circuit Systems, Inc. 6,800 175,950 45811K10
Integrated Device Technology, Inc. 19,700 267,181 45811810
Intel Corp. 14,700 1,190,700 45814010
International Rectifier Corp. 18,900 216,169 46025410
Lattice Semiconductor Corp. 8,600 396,675 51841510
Linear Technology Corp. 74,300 4,922,375 53567810
Maxim Integrated Products, Inc. 102,100 3,535,213 57772K10
Micrel, Inc. 33,600 1,016,400 59479310
Microchip Technology, Inc. 13,100 302,528 59501710
Micron Technology, Inc. 118,100 4,089,213 59511210
Motorola, Inc. 25,100 1,491,881 62007610
Texas Instruments, Inc. 27,000 1,474,875 88250810
3D Labs, Inc. Ltd. (a) 12,000 352,500 92199N22
Vitesse Semiconductor Corp. 28,700 1,246,656 92849710
22,544,441
TOTAL ELECTRONICS 28,900,579
FOODS - 0.0%
COOKIES & CRACKERS - 0.0%
Keebler Foods Co. 100 2,750 48725610
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
ACCESSORIES & MEASURING CUTTING TOOLS - 0.1%
Stanley Works 1,800 79,650 85461610
GENERAL INDUSTRIAL MACHINERY - 1.4%
Manitowoc Co., Inc. 13,100 445,400 56357110
Tyco International Ltd. 24,188 1,073,343 90212410
1,518,743
SHARES VALUE (NOTE 1)
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.2%
ASM Lithography Holding NV (a) 3,000 $ 208,500 04599S23
PRI Automation, Inc. 2,100 57,750 69357H10
266,250
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,864,643
MEDICAL EQUIPMENT & SUPPLIES - 0.3%
MEDICAL TECHNOLOGY - 0.3%
Medtronic, Inc. 6,300 321,694 58505510
METALS & MINING - 0.7%
NONFERROUS WIRE - 0.7%
AFC Cable Systems, Inc. (a) 25,000 712,500 00095010
RETAIL & WHOLESALE, MISCELLANEOUS - 0.4%
BUILDING MATERIALS - RETAIL - 0.4%
Home Depot, Inc. 7,300 440,281 43707610
SERVICES - 0.3%
MANAGEMENT CONSULTING SERVICES - 0.1%
Hagler Bailly, Inc. 6,600 151,800 40518310
PERSONNEL SUPPLY SERVICES - 0.2%
Computer Horizons Corp. (a) 5,100 213,403 20590810
TOTAL SERVICES 365,203
TELEPHONE SERVICES - 2.5%
MCI Communications Corp. 58,100 2,698,019 55267310
TOTAL COMMON STOCKS
(Cost $94,715,440) 99,569,661
CONVERTIBLE BONDS - 0.3%
MOODY'S PRINCIPAL
RATINGS AMOUNT
ELECTRONIC INSTRUMENTS - 0.3%
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 0.3%
Lam Research Corp.
5%, 9/1/02 (d)
(Cost $375,300) B $ 360,000 293,400 512807AB
CASH EQUIVALENTS - 7.3%
SHARES
Taxable Central Cash Fund (b)
(Cost $7,914,863) 7,914,863 7,914,863 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $103,005,603) $ 107,777,924
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash Fund
was 5.63%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4. 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 $293,400 or 0.3%
of net assets.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $103,006,949. Net unrealized appreciation
aggregated $4,770,975, of which $9,103,261 related to appreciated
investment securities and $4,332,286 related to depreciated investment
securities.
ADVISOR TECHNOLOGY FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
107,777,924
(COST $103,005,603) - SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD
4,298,656
RECEIVABLE FOR FUND SHARES SOLD
692,667
DIVIDENDS RECEIVABLE 14,773
INTEREST RECEIVABLE 45,747
REDEMPTION FEES RECEIVABLE 104
OTHER RECEIVABLES 331
PREPAID EXPENSES 11,106
TOTAL ASSETS
112,841,308
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 6,214,745
PAYABLE FOR FUND SHARES REDEEMED 219,800
ACCRUED MANAGEMENT FEE 48,338
DISTRIBUTION FEES PAYABLE 43,950
OTHER PAYABLES AND 68,124
ACCRUED EXPENSES
TOTAL LIABILITIES
6,594,957
NET ASSETS $
106,246,351
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
112,599,182
ACCUMULATED NET INVESTMENT
(441,903)
INCOME (LOSS)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
(10,683,206)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
4,772,278
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
106,246,351
</TABLE>
CALCULATION OF MAXIMUM $12.94
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($13,266,370 (DIVIDED BY)
1,025,390 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.73
(100/94.25 OF $12.94)
CLASS T: $12.89
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($71,613,343 (DIVIDED BY)
5,557,126 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $13.36
(100/96.50 OF $12.89)
CLASS B: $12.82
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($16,126,903 (DIVIDED BY)
1,258,085 SHARES) A
CLASS C: $12.85
NET ASSET VALUE AND OFFERING
PRICE PER SHARE ($1,408,882 (DIVIDED BY)
109,622 SHARES) A
INSTITUTIONAL CLASS: $12.93
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($3,830,853 (DIVIDED BY)
296,192 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 62,930
DIVIDENDS
INTEREST 285,525
TOTAL INCOME 348,455
EXPENSES
MANAGEMENT FEE $ 276,805
TRANSFER AGENT FEES 132,650
DISTRIBUTION FEES 241,382
ACCOUNTING FEES AND EXPENSES 33,347
NON-INTERESTED TRUSTEES' COMPENSATION 155
CUSTODIAN FEES AND EXPENSES 22,103
REGISTRATION FEES 66,963
AUDIT 16,732
LEGAL 1,540
REPORTS TO SHAREHOLDERS 27,153
MISCELLANEOUS 562
TOTAL EXPENSES BEFORE REDUCTIONS 819,392
EXPENSE REDUCTIONS (29,034) 790,358
NET INVESTMENT INCOME (LOSS) (441,903)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (5,157,063)
FOREIGN CURRENCY TRANSACTIONS 263 (5,156,800)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (4,851,487)
ASSETS AND LIABILITIES IN (5) (4,851,492)
FOREIGN CURRENCIES
NET GAIN (LOSS) (10,008,292)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (10,450,195)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (441,903) $ (264,379)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) (5,156,800) 4,756,140
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (4,851,492) 9,623,770
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (10,450,195) 14,115,531
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAIN (4,185,800) (119,780)
IN EXCESS OF NET REALIZED GAIN (5,526,406) -
TOTAL DISTRIBUTIONS (9,712,206) (119,780)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 52,729,915 59,627,327
REDEMPTION FEES 40,162 15,597
TOTAL INCREASE (DECREASE) IN NET ASSETS 32,607,676 73,638,675
NET ASSETS
BEGINNING OF PERIOD 73,638,675 -
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $441,903 AND $0, RESPECTIVELY) $ 106,246,351 $ 73,638,675
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.96 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05) (.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.39) 6.13
TOTAL FROM INVESTMENT OPERATIONS (1.44) 6.03
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.69) (.08)
IN EXCESS OF NET REALIZED GAIN (.90) -
TOTAL DISTRIBUTIONS (1.59) (.08)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.94 $ 15.96
TOTAL RETURN B, C (9.39)% 60.62%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,266 $ 7,313
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.52% A 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.46% A, G 1.70% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.71)% A (.79)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS A SHARES) TO
JULY 31, 1997. 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 A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.91 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.06) (.11)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.40) 6.09
TOTAL FROM INVESTMENT OPERATIONS (1.46) 5.98
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.68) (.08)
IN EXCESS OF NET REALIZED GAIN (.89) -
TOTAL DISTRIBUTIONS (1.57) (.08)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.89 $ 15.91
TOTAL RETURN B, C (9.55)% 60.12%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 71,613 $ 57,624
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.69% A 1.92% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.63% A, F 1.87% A, F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.89)% A (.93)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE G $ .0419 $ .0415
</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 NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS T SHARES) TO JULY 31,
1997. F FMR OR THE FUND HAS ENTERED INTO
VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). G A FUND IS REQUIRED TO DISCLOSE
ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE
CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.88 $ 12.88
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.11) (.08)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.38) 3.08
TOTAL FROM INVESTMENT OPERATIONS (1.49) 3.00
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.68) -
IN EXCESS OF NET REALIZED GAIN (.90) -
TOTAL DISTRIBUTIONS (1.58) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 12.82 $ 15.88
TOTAL RETURN B, C (9.82)% 23.29%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,127 $ 5,105
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.44% A 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.38% A, G 2.45% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.61)% A (1.41)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</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 NET INVESTMENT
INCOME (LOSS) PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF CLASS B SHARES) TO
JULY 31, 1997. 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 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.
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998 E
SELECTED PER-SHARE DATA (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.28
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.69)
TOTAL FROM INVESTMENT OPERATIONS (.74)
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.30)
IN EXCESS OF NET REALIZED GAIN (.39)
TOTAL DISTRIBUTIONS (.69)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 12.85
TOTAL RETURN B, C (4.75)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,409
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.43% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.65)% A
PORTFOLIO TURNOVER 523% A
AVERAGE COMMISSION RATE H $ .0419
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 NET
INVESTMENT INCOME (LOSS) PER
SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E FOR THE
PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF
CLASS C SHARES) TO JANUARY 31,
1998. 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 (SEE NOTE 5 OF
NOTES TO FINANCIAL
STATEMENTS). 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 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 ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.98 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) (.06)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.41) 6.12
TOTAL FROM INVESTMENT OPERATIONS (1.45) 6.06
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.69) (.09)
IN EXCESS OF NET REALIZED GAIN (.92) -
TOTAL DISTRIBUTIONS (1.61) (.09)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 .01
NET ASSET VALUE, END OF PERIOD $ 12.93 $ 15.98
TOTAL RETURN B, C (9.46)% 60.95%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,831 $ 3,598
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.34% A 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.29% A, G 1.44% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.56)% A (.50)% A
PORTFOLIO TURNOVER 523% A 517% A
AVERAGE COMMISSION RATE H $ .0419 $ .0415
</TABLE>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). D NET INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF INSTITUTIONAL CLASS SHARES) TO JULY 31,
1997. 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 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.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Technology 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, Class C, 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 foreign currency transactions, partnerships, net
operating losses and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), a wholly owned subsidiary 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. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
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 $258,825,863 and $218,922,272, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .59% of average net
assets.
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% *
CLASS C 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 $ 12,136 $ 12,136
CLASS T 169,507 169,507
CLASS B 58,347 14,587
CLASS C 1,392 0
$ 241,382 $ 196,230
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 3,780
CLASS T $ 6,609
CLASS B $ 2,271
CLASS C $ 1,682
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
and 1% for Class C, 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 $ 97,440 $ 60,650
CLASS T 190,150 115,044
CLASS B 22,450 0 *
CLASS C 0 0 *
$ 310,040 $ 175,694
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC ** $ 14,080 .29*
CLASS T FIIOC ** 94,270 .28*
CLASS B FIIOC ** 20,246 .35*
CLASS C FIIOC ** 427 .31*
INSTITUTIONAL CLASS FIIOC ** 3,627 .20*
$ 132,650
* ANNUALIZED.
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $22,688 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATION
CLASS C 2.50% $ 3,113
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 $25,705 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
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 $216 under the custodian arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B
CLASS A
FROM NET REALIZED GAIN $ 440,106 $ 16,754
IN EXCESS OF NET REALIZED GAIN 581,062 -
TOTAL $ 1,021,168 $ 16,754
CLASS T
FROM NET REALIZED GAIN $ 3,046,936 $ 94,078
IN EXCESS OF NET REALIZED GAIN 4,022,792 -
TOTAL $ 7,069,728 $ 94,078
CLASS B
FROM NET REALIZED GAIN $ 514,174 $ -
IN EXCESS OF NET REALIZED GAIN 678,852 -
TOTAL $ 1,193,026 $ -
CLASS C
FROM NET REALIZED GAIN $ 12,248 $ -
IN EXCESS OF NET REALIZED GAIN 16,170 -
TOTAL $ 28,418 $ -
INSTITUTIONAL CLASS
FROM NET REALIZED GAIN $ 172,336 $ 8,948
IN EXCESS OF NET REALIZED GAIN 227,530 -
TOTAL $ 399,866 $ 8,948
$ 9,712,206 $ 119,780
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS A, CLASS T AND THE INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B,C 1998 A 1997 B,C
CLASS A 582,990 504,366 $ 8,026,456 $ 6,388,175
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 69,527 1,197 934,118 15,029
SHARES REDEEMED (85,188) (47,502) (1,187,461) (617,865)
NET INCREASE (DECREASE) 567,329 458,061 $ 7,773,113 $ 5,785,339
CLASS T 2,443,712 4,187,137 $ 36,096,313 $ 54,310,830
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 495,110 7,154 6,736,761 89,642
SHARES REDEEMED (1,004,588) (571,399) (14,087,572) (7,714,355)
NET INCREASE (DECREASE) 1,934,234 3,622,892 $ 28,745,502 $ 46,686,117
CLASS B 967,716 352,887 $ 14,239,268 $ 4,850,934
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 78,347 - 1,031,733 -
SHARES REDEEMED (109,338) (31,527) (1,459,994) (463,394)
NET INCREASE (DECREASE) 936,725 321,360 $ 13,811,007 $ 4,387,540
CLASS C 107,593 - $ 1,361,810 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2,343 - 27,642 -
SHARES REDEEMED (314) - (3,832) -
NET INCREASE (DECREASE) 109,622 - $ 1,385,620 $ -
INSTITUTIONAL CLASS 119,912 229,260 $ 1,685,058 $ 2,822,866
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 27,259 714 379,700 8,948
SHARES REDEEMED (76,150) (4,803) (1,050,085) (63,483)
NET INCREASE (DECREASE) 71,021 225,171 $ 1,014,673 $ 2,768,331
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS A, CLASS T, AND THE INSTITUTIONAL CLASS
ARE FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO JULY 31,1997.
C SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 8,271
CLASS T 32,822
CLASS B 16,110
CLASS C 3,663
INSTITUTIONAL CLASS 6,097
$ 66,963
ADVISOR UTILITIES GROWTH FUND - INSTITUTIONAL CLASS
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
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 dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
If Fidelity had not reimbursed certain class expenses, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED PAST 6 PAST 1 LIFE OF
JANUARY 31, 1998 MONTHS YEAR FUND
FIDELITY ADV UTILITIES - INST CL 20.68% 35.14% 60.12%
S&P 500 3.56% 26.91% 53.63%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on September 3, 1996. You can compare
Institutional Class' returns to the performance of the S&P 500 - a
widely recognized, unmanaged index of common stocks. This benchmark
includes reinvested dividends and capital gains, if any, and excludes
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED PAST 1 LIFE OF
JANUARY 31, 1998 YEAR FUND
FIDELITY ADV UTILITIES - INST CL 35.14% 39.61%
S&P 500 26.91% 35.57%
AVERAGE ANNUAL RETURNS take Institutional Class shares' cumulative
return and show you what would have happened if Institutional Class
shares had performed at a constant rate each year.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980212 112745 S00000000000001
FA Utilities Growth -CL I S&P 500
00206 SP001
1996/09/03 10000.00 10000.00
1996/09/30 10160.00 10516.69
1996/10/31 10780.00 10806.74
1996/11/30 11360.00 11623.62
1996/12/31 11524.62 11393.36
1997/01/31 11848.98 12105.21
1997/02/28 12021.29 12200.12
1997/03/31 11413.13 11698.81
1997/04/30 11808.43 12397.23
1997/05/31 12558.50 13151.98
1997/06/30 12953.80 13741.19
1997/07/31 13268.01 14834.57
1997/08/31 12943.66 14003.54
1997/09/30 14335.34 14770.51
1997/10/31 14119.85 14277.18
1997/11/30 14786.84 14938.07
1997/12/31 15011.00 15194.56
1998/01/30 16012.47 15362.61
IMATRL PRASUN SHR__CHT 19980131 19980212 112747 R00000000000020
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Utilities Growth - Institutional Class on
September 3, 1996, when the fund started. As the chart shows, by
January 31, 1998, the value of the investment would have grown to
$16,012 - a 60.12% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $15,363 - a 53.63% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY 31, 1998
% OF FUND'S
INVESTMENTS
WORLDCOM, INC 10.0
TEL-SAVE HOLDINGS, INC. 7.9
MCI COMMUNICATIONS CORP. 7.3
GTE CORP. 5.5
AT&T CORP. 5.0
SBC COMMUNICATIONS, INC. 4.3
TITAN CORP. 4.2
TELEPORT COMMUNICATIONS GROUP, INC. CLASS A 4.0
BELL ATLANTIC CORP. 3.6
AMNEX, INC. 3.5
TOP INDUSTRIES AS OF JANUARY 31, 1998
TELEPHONE SERVICES 57.8%
ELECTRIC POWER 10.9%
ELECTRIC & OTHER SERVICES 4.9%
TV & RADIO COMMUNICATION
EQUIPMENT 4.2%
PETROLEUM REFINERS 3.4%
ALL OTHERS 18.8% *
ROW: 1, COL: 1, VALUE: 57.8
ROW: 1, COL: 2, VALUE: 10.9
ROW: 1, COL: 3, VALUE: 4.9
ROW: 1, COL: 4, VALUE: 4.2
ROW: 1, COL: 5, VALUE: 3.4
ROW: 1, COL: 6, VALUE: 18.8
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ADVISOR UTILITIES GROWTH FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Nick Thakore, Portfolio Manager of Fidelity Advisor
Utilities Growth Fund
Q. HOW DID THE FUND PERFORM, NICK?
Q. WHY WAS THE FUND'S PERFORMANCE STRONGER THAN THE INDEX'S,
ESPECIALLY DURING THE MOST RECENT SIX-MONTH PERIOD?
A. After advancing sharply over the previous four months, the overall
market - as reflected by the S&P 500 and other indexes that contain
stocks from a variety of sectors - made no sustained moves either up
or down from August through the end of January. However, utilities in
general, and in particular many of the telephone utility growth stocks
that form the fund's core holdings, turned in strong performances.
Q. WHAT MADE TELEPHONE UTILITIES ATTRACTIVE TO INVESTORS?
A. Deregulation has created many opportunities both for established
telephone utility companies and especially for a number of relative
newcomers that are claiming increasingly larger shares of the
long-distance telephone service market. Looking ahead, once the
regulatory issues are sorted out, many of these companies will be in a
position to offer their customers integrated packages of
long-distance, local and cellular phone service. Investors have
responded to the potential growth in earnings that these changes might
bring, as well as the healthy earnings trends already in place at many
companies.
Q. YOU INCREASED THE FUND'S INVESTMENT IN ELECTRIC UTILITIES BY ABOUT
50%. WHY?
A. The recent turmoil in Asia had two consequences that were positive
for electric utilities. First, many investors bought electric utility
stocks because of a perception that they offer more protection than
stocks in other sectors against the threats to earnings growth posed
by the unstable financial conditions in Asia. Second, volatility in
the stock market spurred a transfer of some investment funds to the
bond market, accelerating the upward move in bond prices - and
corresponding downward trend in interest rates - that was already in
progress. While all utility stocks are sensitive to interest rates,
electric utility stocks tend to be even more so, and they responded
well to this development.
Q. ON THE OTHER HAND, YOU CUT BACK SHARPLY ON THE FUND'S HOLDINGS OF
GAS UTILITIES . . .
A. The supply and demand factors affecting natural gas prices have not
been attractive, and the sector does not characteristically benefit as
much as electric utilities from falling interest rates or the move
toward investments perceived as offering greater safety. I reduced the
fund's holdings of gas utilities to about 4% of the portfolio by the
end of the period - roughly one-fifth of what they had been six months
earlier.
Q. WHAT STOCKS DID WELL FOR THE FUND?
A. Tel-Save Holdings is a long-distance reseller whose stock benefited
from investors' positive reception of the company's recent agreement
to market its services through the extensive America OnLine electronic
network. Also, MCI's stock surged upward as the company was pursued by
no fewer than three corporate suitors during the period, with WorldCom
the apparent winner. Another stock that helped the fund's performance
was AT&T, which was helped by improved earnings trends and investors'
confidence in the abilities of the company's new CEO.
Q. WHICH OF THE FUND'S HOLDINGS PROVED TO BE DISAPPOINTMENTS?
A. EXCEL Communications posted earnings that were short of Wall
Street's expectations, primarily because of higher-than-expected
marketing costs. Sonat suffered because it is one of the gas companies
most sensitive to natural gas prices, which were weak during the
period. The fund no longer holds this stock.
Q. WHAT'S YOUR OUTLOOK, NICK?
A. I don't foresee much change for the fund's positioning. I will
continue to emphasize telephone utility stocks because, based on
current and projected price-to-earnings multiples, I think they offer
better growth potential than the shares of electric and gas companies.
At the same time, I have become more cautious about the short-term
investment environment. My increased emphasis on electric utilities
reflects this outlook.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 1998, more than
$24 million
MANAGER: Nick Thakore, since August 1997;
joined Fidelity in 1993
(checkmark)
ADVISOR UTILITIES GROWTH FUND
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.1%
SHARES VALUE (NOTE 1)
BROADCASTING - 1.8%
CABLE TV OPERATORS - 1.8%
Cable Michigan, Inc. 325 $ 7,304
RCN Corp. 10,600 443,875
TCI Satellite Entertainment, Inc.
Class A (a) 10 55
Tele-Communications, Inc. (TCI Group),
Series A (a) 127 3,556
Tele-Communications, Inc.
(TCI Ventures Group),
Series A (a) 73 2,154
456,944
CELLULAR - 1.1%
CELLULAR & COMMUNICATION SERVICES - 1.1%
Cellnet Data Systems, Inc. (a) 1,200 11,550
Teleglobe, Inc. 8,000 261,070
Telephone & Data Systems, Inc. 400 17,600
290,220
COAL - 0.2%
MAPCO, Inc. 1,100 51,356
COMMUNICATIONS EQUIPMENT - 0.9%
TELEPHONE INTERCONNECT SYSTEMS - 0.9%
Intermedia Communications, Inc. (a) 3,900 239,850
COMPUTER SERVICES & SOFTWARE - 0.7%
CAD/CAM/CAE - 0.7%
ICG Communications, Inc. (a) 7,250 178,531
ELECTRIC UTILITY - 16.2%
COMBINATION UTILITIES, NEC - 0.4%
Citizens Utilities Co. Class B 10,100 95,950
ELECTRIC & OTHER SERVICES - 4.9%
CMS Energy Corp. 2,300 97,894
Commonwealth Energy Systems (SBI) (a) 7,200 247,500
Consolidated Edison, Inc. 6,200 256,138
DPL, Inc. 2,400 43,950
Enova Corp. 1,300 32,988
Hidroelectrica de Cantabrico SA 100 4,277
IES Industries, Inc. 500 18,344
LG&E Energy Corp. 400 9,350
Montana Power Co. 4,300 129,000
NIPSCO Industries, Inc. 1,000 51,063
New York State Electric & Gas Corp. 5,800 204,450
PECO Energy Co. 1,500 28,406
PacifiCorp. 1,900 44,056
Public Service Co. of New Mexico 1,500 33,938
Rochester Gas & Electric Corp. 1,400 43,925
Sierra Pacific Resources 300 10,613
Utilicorp United, Inc. 200 7,075
1,262,967
ELECTRIC POWER - 10.9%
American Electric Power Co., Inc. 2,500 123,281
Baycorp Holdings Ltd. (a) 100 656
Boston Edison Co. 9,300 346,425
Central & South West Corp. 1,700 46,006
Central Louisiana Electric Co., Inc. 1,800 55,913
DQE, Inc. 1,400 45,763
Duke Energy Corp. 11,494 622,831
Entergy Corp. 400 11,450
FPL Group, Inc. 4,000 229,500
GPU, Inc. 5,600 220,150
Houston Industries, Inc. 452 11,809
SHARES VALUE (NOTE 1)
IPALCO Enterprises, Inc. 12,000 $ 501,000
Kansas City Power & Light Co. 400 11,350
New England Electric System 7,500 315,000
Pinnacle West Capital Corp. 3,400 136,000
Southern Co. 1,000 24,313
TECO Energy, Inc. 300 7,781
Texas Utilities Co. 1,990 81,839
United Illuminating Co. 400 17,050
2,808,117
TOTAL ELECTRIC UTILITY 4,167,034
ELECTRICAL EQUIPMENT - 4.2%
TV & RADIO COMMUNICATION EQUIPMENT - 4.2%
Titan Corp. (a) 180,700 1,084,200
GAS - 4.1%
GAS & OTHER SERVICES - 0.4%
MDU Resources Group, Inc. 2,500 74,688
UGI Corp. 1,050 29,728
Western Resources, Inc. 300 12,225
116,641
GAS DISTRIBUTION - 2.2%
Eastern Enterprises Co. 3,300 136,538
Energen Corp. 800 31,200
K N Energy, Inc. 1,300 65,325
MCN Corp. 4,000 148,000
National Fuel Gas Co. 400 18,400
NICOR, Inc. 400 16,100
Pacific Enterprises 2,950 106,384
Peoples Energy Corp. 500 18,875
WICOR, Inc. 300 13,294
554,116
GAS TRANSMISSION - 0.9%
Williams Companies, Inc. 7,750 220,875
GAS TRANSMISSION & DISTRIBUTION - 0.6%
Columbia Gas System, Inc. (The) 1,650 125,194
Equitable Resources, Inc. 450 14,794
ONEOK, Inc. 700 23,931
163,919
TOTAL GAS 1,055,551
HOLDING COMPANIES - 0.3%
HOLDING COMPANY OFFICES, NEC - 0.3%
CINergy Corp. 1,900 65,550
INDEPENDENT POWER - 0.0%
STEAM SUPPLY - 0.0%
Bonneville Pacific Corp. (a) 300 525
METALS & MINING - 0.9%
NONFERROUS ROLLING & DRAWING - 0.9%
Superior Telecom, Inc. (a) 6,100 240,950
OIL & GAS - 3.9%
CRUDE PETROLEUM & GAS - 0.5%
EEX Corp. (a) 13,295 112,177
Occidental Petroleum Corp. 600 15,300
127,477
PETROLEUM REFINERS - 3.4%
Coastal Corp. (The) 14,875 862,750
TOTAL OIL & GAS 990,227
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - 57.8%
AT&T Corp. 20,500 $ 1,283,813
ALLTEL Corp. 400 17,100
AMNEX, Inc. (a) 640,300 900,422
BCE, Inc. 2,500 78,321
Bell Atlantic Corp. 10,000 925,625
BellSouth Corp. 6,800 411,825
Cincinnati Bell, Inc. 7,200 258,300
Commonwealth Telephone
Enterprises, Inc. 866 20,351
EXCEL Communications, Inc. (a) 32,800 518,650
France Telecom SA (a) 632 26,941
GTE Corp. 25,900 1,413,169
ITC Deltacom, Inc. 100 1,913
MCI Communications Corp. 40,500 1,880,719
NEXTLINK Communications, Inc.
Class A 3,000 74,625
Qwest Communications
International, Inc. 100 7,088
SBC Communications, Inc. 14,300 1,111,825
Tel-Save Holdings, Inc. (a) 85,100 2,021,125
Teleport Communications Group, Inc.
Class A (a) 18,500 1,032,531
Winstar Communications, Inc. (a) 8,900 290,919
WorldCom, Inc. (a) 71,575 2,563,280
14,838,542
TOTAL COMMON STOCKS
(Cost $21,073,725) 23,659,480
CONVERTIBLE PREFERRED STOCKS - 0.1%
ELECTRIC UTILITY - 0.1%
COMBINATION UTILITIES, NEC - 0.1%
Citizens Utilities Trust $2.50 EPPICS
(Cost $19,495) 400 19,250
CASH EQUIVALENTS - 7.8%
Taxable Central Cash Fund (b)
(Cost $2,006,443) 2,006,443 2,006,443
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $23,099,663) $ 25,685,173
SECURITY TYPE ABBREVIATIONS
EPPICS - Equity Providing Preferred
Income Convertible Securities
LEGEND
1. Non-income producing
2. At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.63%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $23,099,663. Net unrealized appreciation
aggregated $2,585,510 of which $2,928,132 related to appreciated
investment securities and $342,622 related to depreciated investment
securities.
ADVISOR UTILITIES GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
INVESTMENT IN SECURITIES, AT VALUE $
25,685,173
(COST $23,099,663) -
SEE ACCOMPANYING SCHEDULE
CASH 7
FOREIGN CURRENCY HELD AT VALUE (COST $52) 52
RECEIVABLE FOR INVESTMENTS SOLD
694,887
RECEIVABLE FOR FUND SHARES SOLD
239,053
DIVIDENDS RECEIVABLE 34,050
INTEREST RECEIVABLE 11,574
PREPAID EXPENSES 10,718
TOTAL ASSETS
26,675,514
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,624,288
PAYABLE FOR FUND SHARES REDEEMED 17,452
ACCRUED MANAGEMENT FEE 7,625
DISTRIBUTION FEES PAYABLE 9,349
OTHER PAYABLES AND ACCRUED EXPENSES 24,833
TOTAL LIABILITIES
1,683,547
NET ASSETS $
24,991,967
NET ASSETS CONSIST OF:
PAID IN CAPITAL $
21,868,904
DISTRIBUTIONS IN EXCESS OF
(15,176)
NET INVESTMENT INCOME
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
552,633
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
2,585,606
AND ASSETS AND LIABILITIES IN
FOREIGN CURRENCIES
NET ASSETS $
24,991,967
</TABLE>
CALCULATION OF MAXIMUM $14.39
OFFERING PRICE
CLASS A:
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($1,097,613 (DIVIDED BY)
76,252 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $15.27
(100/94.25 OF $14.39)
CLASS T: $14.36
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($13,669,677 (DIVIDED BY)
951,697 SHARES)
MAXIMUM OFFERING PRICE PER SHARE $14.88
(100/96.50 OF $14.36)
CLASS B: $14.29
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($5,012,096 (DIVIDED BY)350,657
SHARES) A
CLASS C: $14.31
NET ASSET VALUE AND OFFERING PRICE
PER SHARE ($947,365 (DIVIDED BY) 66,194
SHARES) A
INSTITUTIONAL CLASS: $14.39
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($4,265,216 (DIVIDED BY) 296,450 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME $ 105,761
DIVIDENDS
INTEREST 37,661
TOTAL INCOME 143,422
EXPENSES
MANAGEMENT FEE $ 46,225
TRANSFER AGENT FEES 19,098
DISTRIBUTION FEES 37,538
ACCOUNTING FEES AND EXPENSES 30,011
NON-INTERESTED TRUSTEES' COMPENSATION 25
CUSTODIAN FEES AND EXPENSES 5,809
REGISTRATION FEES 34,940
AUDIT 16,678
LEGAL 226
REPORTS TO SHAREHOLDERS 4,792
MISCELLANEOUS 54
TOTAL EXPENSES BEFORE REDUCTIONS 195,396
EXPENSE REDUCTIONS (45,157) 150,239
NET INVESTMENT INCOME (LOSS) (6,817)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 1,940,958
FOREIGN CURRENCY TRANSACTIONS 1,920 1,942,878
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 1,135,477
ASSETS AND LIABILITIES IN 107 1,135,584
FOREIGN CURRENCIES
NET GAIN (LOSS) 3,078,462
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,071,645
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS ENDED SEPTEMBER 3, 1996
JANUARY 31, 1998 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
JULY 31,
1997
<TABLE>
<CAPTION>
<S> <C> <C>
OPERATIONS $ (6,817) $ 52,435
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 1,942,878 129,499
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 1,135,584 1,450,022
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,071,645 1,631,956
DISTRIBUTIONS TO SHAREHOLDERS (36,509) (13,446)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME (8,359) -
FROM NET REALIZED GAIN (1,470,557) (43,681)
TOTAL DISTRIBUTIONS (1,515,425) (57,127)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) 11,522,506 10,325,481
REDEMPTION FEES 12,083 848
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,090,809 11,901,158
NET ASSETS
BEGINNING OF PERIOD 11,901,158 -
END OF PERIOD (INCLUDING UNDER (OVER) DISTRIBUTION OF NET INVESTMENT INCOME OF $(15,176) AND $ 24,991,967 $ 11,901,158
$38,999, RESPECTIVELY)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.07 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .01 .12
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.09
TOTAL FROM INVESTMENT OPERATIONS 2.56 3.21
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) (.03)
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.20) (.11)
TOTAL DISTRIBUTIONS (1.25) (.14)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.39 $ 13.07
TOTAL RETURN B, C 20.51% 32.36%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,098 $ 531
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, F 1.75% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.71% A, G 1.75% A
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .14% A 1.09% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 FOR THE PERIOD
SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY 31, 1997. 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 (SEE NOTE
5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.03 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.01) .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.09
TOTAL FROM INVESTMENT OPERATIONS 2.54 3.17
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02) (.03)
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.19) (.11)
TOTAL DISTRIBUTIONS (1.22) (.14)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.36 $ 13.03
TOTAL RETURN B, C 20.39% 31.96%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,670 $ 7,085
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00% A, F 2.00% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.95% A, G 2.00% A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.11)% A .79% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING
THE PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT
OF SALE OF CLASS T SHARES) TO JULY 31, 1997. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.01 $ 11.76
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.04) .02
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.53 1.23
TOTAL FROM INVESTMENT OPERATIONS 2.49 1.25
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.03) -
IN EXCESS OF NET INVESTMENT INCOME (.01) -
FROM NET REALIZED GAIN (1.18) -
TOTAL DISTRIBUTIONS (1.22) -
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.29 $ 13.01
TOTAL RETURN B, C 20.04% 10.63%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 5,012 $ 2,039
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.45% A, G 2.50% A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.59)% A .32% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 NET
INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E
FOR THE PERIOD MARCH 3,
1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY 31, 1997. 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
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE
STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS C
PERIOD ENDED
JANUARY 31, 1998
SELECTED PER-SHARE DATA (UNAUDITED) E
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.90
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.55
TOTAL FROM INVESTMENT OPERATIONS 1.53
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02)
IN EXCESS OF NET INVESTMENT INCOME (.00)
FROM NET REALIZED GAIN (1.10)
TOTAL DISTRIBUTIONS (1.12)
REDEMPTION FEES ADDED TO PAID IN CAPITAL -
NET ASSET VALUE, END OF PERIOD $ 14.31
TOTAL RETURN B, C 11.59%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 947
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.44% A, G
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.52)% A
PORTFOLIO TURNOVER 280% A
AVERAGE COMMISSION RATE H $ .0263
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
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 NET
INVESTMENT INCOME (LOSS)
PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER
3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO JANUARY 31, 1998. 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). 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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
SELECTED PER-SHARE DATA (UNAUDITED) 1997 E
<TABLE>
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.09 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .03 .14
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.55 3.10
TOTAL FROM INVESTMENT OPERATIONS 2.58 3.24
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.07) (.04)
IN EXCESS OF NET INVESTMENT INCOME (.02) -
FROM NET REALIZED GAIN (1.20) (.11)
TOTAL DISTRIBUTIONS (1.29) (.15)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .01 -
NET ASSET VALUE, END OF PERIOD $ 14.39 $ 13.09
TOTAL RETURN B, C 20.68% 32.68%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,265 $ 2,246
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% A, F 1.50% A, F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.46% A, G 1.50% A
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .40% A 1.29% A
PORTFOLIO TURNOVER 280% A 13% A
AVERAGE COMMISSION RATE H $ .0263 $ .0162
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE
NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE
PERIOD. E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO JULY 31,
1997. 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 (SEE NOTE 5 OF NOTES
TO FINANCIAL
STATEMENTS). 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Utilities Growth 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, Class C 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. The fund commenced sale of Class C shares on
November 3, 1997. Investment income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, 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 exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value 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. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received and gains and losses between
trade date and settlement date on purchases and sales of securities.
The effects of changes in foreign currency exchange rates on
investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date
, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class B and Class C and shares of Class B and Class C for distribution
under federal and state securities law. These expenses are borne by
Class B and Class C 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 may result in distribution
reclassifications. The fund also utilized earnings and profits
distributed to shareholders on redemptions of shares as a part of the
dividend paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distribution in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares held in the fund less than 60 days are subject
to a redemption fee equal to 1% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of 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 Fidelity Investments Money Management, Inc.
(formerly FMR Texas, Inc.), an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $29,231,113 and $20,233,937, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus
a fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
an annualized rate of .60% of average net assets.
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%*
CLASS C 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 $ 879 $ 879
CLASS T 21,820 21,820
CLASS B 14,153 3,539
CLASS C 686 -
$ 37,538 $ 26,238
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. For the period, the following amounts were paid to third
parties under the Plans:
CLASS A $ 336
CLASS T $ 727
CLASS B $ 231
CLASS C $ 340
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares (5.25% prior to August 1, 1997), and 3.50% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within six years of purchase and Class C share
redemptions occurring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 5% to 1% for
Class B and 1% for Class C, 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.
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 $ 11,828 $ 8,137
CLASS T 13,354 10,329
CLASS B 237 0 *
CLASS C 0 0*
$ 25,419 $ 18,466
* WHEN CLASS B AND CLASS C 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.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the following
amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A FIIOC** $ 1,326 .38 *
CLASS T FIIOC** 11,583 .27 *
CLASS B FIIOC** 3,413 .24 *
CLASS C FIIOC** 182 .27 *
INSTITUTIONAL CLASS FIIOC** 2,594 .16 *
$ 19,098
* ANNUALIZED
** FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
(FIIOC), AN AFFILIATE OF FMR.
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 $3,555 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 of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A 1.75% $ 6,445
CLASS T 2.00% 12,445
CLASS B 2.50% 14,241
CLASS C 2.50% 3,625
INSTITUTIONAL CLASS 1.50% 4,882
$ 41,638
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $2,966 under this arrangement.
In addition, the fund has entered into arrangements with its
custodian 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 $553 under the custodian
arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR was record owner of approximately 6% of
the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31,
1998 A 1997 B,C
CLASS A
FROM NET INVESTMENT INCOME $ 1,806 $ 816
IN EXCESS OF NET INVESTMENT INCOME 414 -
FROM NET REALIZED GAIN 65,646 2,993
TOTAL $ 67,866 $ 3,809
CLASS T
FROM NET INVESTMENT INCOME $ 13,576 $ 6,500
IN EXCESS OF NET INVESTMENT INCOME 3,108 -
FROM NET REALIZED GAIN 746,560 23,832
TOTAL $ 763,244 $ 30,332
CLASS B
FROM NET INVESTMENT INCOME $ 4,607 $ -
IN EXCESS OF NET INVESTMENT INCOME 1,055 -
FROM NET REALIZED GAIN 266,559 -
TOTAL $ 272,221 $ -
CLASS C
FROM NET INVESTMENT INCOME $ 251 $ -
IN EXCESS OF NET INVESTMENT INCOME 57 -
FROM NET REALIZED GAIN 16,938 -
TOTAL $ 17,246 $ -
INSTITUTIONAL CLASS
FROM NET INVESTMENT INCOME $ 16,269 $ 6,130
IN EXCESS OF NET INVESTMENT INCOME 3,725 -
FROM NET REALIZED GAIN 374,854 16,856
TOTAL $ 394,848 $ 22,986
$ 1,515,425 $ 57,127
A DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
C DISTRIBUTIONS FOR CLASS A , CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO JULY
31, 1997.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, JANUARY 31, JULY 31,
1998 A 1997 B,C 1998 A 1997 B,C
CLASS A 37,900 50,784 $ 525,716 $ 550,067
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 4,614 351 61,624 3,875
SHARES REDEEMED (6,876) (10,521) (95,816) (126,974)
NET INCREASE (DECREASE) 35,638 40,614 $ 491,524 $ 426,968
CLASS T 494,330 599,685 $ 6,827,185 $ 6,865,905
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 53,698 2,654 715,847 29,247
SHARES REDEEMED (140,029) (58,641) (1,907,528) (701,040)
NET INCREASE (DECREASE) 407,999 543,698 $ 5,635,504 $ 6,194,112
CLASS B 203,308 159,349 $ 2,796,640 $ 1,941,989
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 15,243 - 202,512 -
SHARES REDEEMED (24,598) (2,645) (320,723) (32,964)
NET INCREASE (DECREASE) 193,953 156,704 $ 2,678,429 $ 1,909,025
CLASS C 65,031 - $ 908,367 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,164 - 15,529 -
SHARES REDEEMED (1) - (12) -
NET INCREASE (DECREASE) 66,194 - $ 923,884 $ -
INSTITUTIONAL CLASS 193,036 180,368 $ 2,754,350 $ 1,895,917
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 22,978 1,242 307,065 13,709
SHARES REDEEMED (91,195) (9,979) (1,268,250) (114,250)
NET INCREASE (DECREASE) 124,819 171,631 $ 1,793,165 $ 1,795,376
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JANUARY 31, 1998.
B SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO JULY 31, 1997.
C SHARE TRANSACTIONS FOR CLASS A , CLASS T AND INSTITUTIONAL CLASS ARE
FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
JULY 31, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 5,685
CLASS T 7,671
CLASS B 13,022
CLASS C 3,463
INSTITUTIONAL CLASS 5,099
$ 34,940
PROXY VOTING RESULTS
A special meeting of the funds' shareholders was held on September 17,
1997. The results of votes taken among shareholders on proposals are
listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
RALPH F. COX
AFFIRMATIVE 57,903,244.044 98.066
WITHHELD 1,141,937.251 1.934
TOTAL 59,045,181.295 100.000
PHYLLIS BURKE DAVIS
AFFIRMATIVE 57,904,814.528 98.069
WITHHELD 1,140,366.767 1.931
TOTAL 59,045,181.295 100.000
ROBERT M. GATES
AFFIRMATIVE 57,879,136.486 98.025
WITHHELD 1,166,044.809 1.975
TOTAL 59,045,181.295 100.000
EDWARD C. JOHNSON 3D
AFFIRMATIVE 57,896,786.565 98.055
WITHHELD 1,148,394.730 1.945
TOTAL 59,045,181.295 100.000
E. BRADLEY JONES
AFFIRMATIVE 57,897,315.886 98.056
WITHHELD 1,147,865.409 1.944
TOTAL 59,045,181.295 100.000
DONALD J. KIRK
AFFIRMATIVE 57,909,771.510 98.077
WITHHELD 1,135,409.785 1.923
TOTAL 59,045,181.295 100.000
# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 57,907,706.022 98.074
WITHHELD 1,137,475.273 1.926
TOTAL 59,045,181.295 100.000
WILLIAM O. MCCOY
AFFIRMATIVE 57,907,818.657 98.074
WITHHELD 1,137,362.638 1.926
TOTAL 59,045,181.295 100.000
GERALD C. MCDONOUGH
AFFIRMATIVE 57,902,025.368 98.064
WITHHELD 1,143,155.927 1.936
TOTAL 59,045,181.295 100.000
MARVIN L. MANN
AFFIRMATIVE 57,912,967.933 98.082
WITHHELD 1,132,213.362 1.918
TOTAL 59,045,181.295 100.000
ROBERT C. POZEN
AFFIRMATIVE 57,911,186.572 98.079
WITHHELD 1,133,994.723 1.921
TOTAL 59,045,181.295 100.000
THOMAS R. WILLIAMS
AFFIRMATIVE 57,897,766.878 98.057
WITHHELD 1,147,414.417 1.943
TOTAL 59,045,181.295 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. and Price
Waterhouse LLP as independent accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 56,463,250.131 95.627
AGAINST 946,012.589 1.602
ABSTAIN 1,635,918.575 2.771
TOTAL 59,045,181.295 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
AFFIRMATIVE 43,059,373.430 92.162
AGAINST 1,624,371.900 3.477
ABSTAIN 2,037,576.965 4.361
TOTAL 46,721,322.295 100.000
BROKER NON-VOTES 12,323,859.000
FIDELITY ADVISOR CONSUMER INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 478,059.734 95.892
AGAINST 11,175.817 2.242
ABSTAIN 9,303.171 1.866
TOTAL 498,538.722 100.000
BROKER NON-VOTES 95,912.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 82,996.452 97.877
AGAINST 1,242.000 1.465
ABSTAIN 558.000 0.658
TOTAL 84,796.452 100.000
BROKER NON-VOTES 4,062.000
FIDELITY ADVISOR CYCLICAL INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 194,518.087 91.926
AGAINST 8,248.339 3.898
ABSTAIN 8,837.573 4.176
TOTAL 211,603.999 100.000
BROKER NON-VOTES 52,076.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 88,774.498 93.142
AGAINST 5,791.000 6.076
ABSTAIN 745.000 0.782
TOTAL 95,310.498 100.000
BROKER NON-VOTES 23,194.000
FIDELITY ADVISOR FINANCIAL SERVICES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,265,266.761 88.300
AGAINST 134,086.411 5.226
ABSTAIN 166,075.369 6.474
TOTAL 2,565,428.541 100.000
BROKER NON-VOTES 698,438.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 127,276.193 88.638
AGAINST 10,076.000 7.017
ABSTAIN 6,238.564 4.345
TOTAL 143,590.757 100.000
BROKER NON-VOTES 73,392.000
FIDELITY ADVISOR HEALTH CARE
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,605,175.249 90.401
AGAINST 108,745.891 3.773
ABSTAIN 167,886.931 5.826
TOTAL 2,881,808.071 100.000
BROKER NON-VOTES 806,586.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 233,884.703 82.525
AGAINST 9,876.000 3.485
ABSTAIN 39,650.000 13.990
TOTAL 283,410.703 100.000
BROKER NON-VOTES 128,250.000
FIDELITY ADVISOR TECHNOLOGY
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,249,390.478 89.128
AGAINST 114,053.752 4.519
ABSTAIN 160,332.055 6.353
TOTAL 2,523,776.285 100.000
BROKER NON-VOTES 849,931.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 100,898.042 93.479
AGAINST 5,762.000 5.339
ABSTAIN 1,276.000 1.182
TOTAL 107,936.042 100.000
BROKER NON-VOTES 32,384.000
PROPOSAL 3 - CONTINUED
FIDELITY ADVISOR UTILITIES GROWTH
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 602,239.977 96.023
AGAINST 4,037.681 0.644
ABSTAIN 20,904.080 3.333
TOTAL 627,181.738 100.000
BROKER NON-VOTES 96,340.000
# OF % OF
SHARES VOTED SHARES VOTED
OF INST CLASS OF INST CLASS
AFFIRMATIVE 156,292.958 100.000
AGAINST 0.000 0.000
ABSTAIN 0.000 0.000
TOTAL 156,292.958 100.000
BROKER NON-VOTES 7,459.000
PROPOSAL 4
To amend the Declaration of Trust to eliminate the requirement that
shareholders be notified in the event of an appointment of a trustee
within three months of the appointment.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 43,054,638.285 91.646
AGAINST 1,293,400.432 2.754
ABSTAIN 2,631,057.578 5.600
TOTAL 46,979,096.295 100.000
BROKER NON-VOTES 12,066,085.000
PROPOSAL 5
To amend the Declaration of Trust to clarify that the Trustees may
authorize the investment of all of a fund's assets in another open-end
investment company with substantially the same investment objective
and policies.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 40,990,623.684 87.734
AGAINST 2,750,475.964 5.887
ABSTAIN 2,980,221.647 6.379
TOTAL 46,721,321.295 100.000
BROKER NON-VOTES 12,323,860.000
PROPOSAL 6
To adopt a new fundamental investment policy for the fund that would
permit it to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.
FIDELITY ADVISOR CONSUMER INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 457,257.094 91.719
AGAINST 31,261.290 6.271
ABSTAIN 10,020.338 2.010
TOTAL 498,538.722 100.000
BROKER NON-VOTES 95,912.000
FIDELITY ADVISOR CYCLICAL INDUSTRIES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 194,062.694 91.710
AGAINST 8,531.732 4.032
ABSTAIN 9,009.573 4.258
TOTAL 211,603.999 100.000
BROKER NON-VOTES 52,076.000
FIDELITY ADVISOR FINANCIAL SERVICES
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,183,875.429 85.127
AGAINST 196,032.597 7.641
ABSTAIN 185,520.515 7.232
TOTAL 2,565,428.541 100.000
BROKER NON-VOTES 698,438.000
FIDELITY ADVISOR HEALTH CARE
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,423,136.531 84.084
AGAINST 311,696.569 10.816
ABSTAIN 146,974.971 5.100
TOTAL 2,881,808.071 100.000
BROKER NON-VOTES 806,586.000
FIDELITY ADVISOR TECHNOLOGY
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 2,186,398.196 86.632
AGAINST 155,622.035 6.166
ABSTAIN 181,755.054 7.202
TOTAL 2,523,775.285 100.000
BROKER NON-VOTES 849,932.000
FIDELITY ADVISOR UTILITIES GROWTH
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 579,091.722 92.332
AGAINST 18,202.745 2.903
ABSTAIN 29,887.271 4.765
TOTAL 627,181.738 100.000
BROKER NON-VOTES 93,340.000
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
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
(dagger) CUSTODIAN FOR FIDELITY ADVISOR NATURAL RESOURCES FUND ONLY
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
New York, NY
Brown Brothers Harriman & Co. (dagger)
Boston, MA
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 International Capital
Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant Growth Fund
SM
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 Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(REGISTERED TRADEMARK)
