(2_FIDELITY_LOGOS)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
FOCUS FUNDS SM
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, 2000
CONTENTS
PERFORMANCE OVERVIEW 4
CONSUMER INDUSTRIES 5 PERFORMANCE
9 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENT SUMMARY
11 INVESTMENTS
15 FINANCIAL STATEMENTS
19 NOTES TO THE
FINANCIAL STATEMENTS
CYCLICAL INDUSTRIES 23 PERFORMANCE
27 FUND TALK: THE MANAGER'S OVERVIEW
28 INVESTMENT SUMMARY
29 INVESTMENTS
31 FINANCIAL STATEMENTS
35 NOTES TO THE
FINANCIAL STATEMENTS
FINANCIAL SERVICES 39 PERFORMANCE
43 FUND TALK: THE MANAGER'S OVERVIEW
44 INVESTMENT SUMMARY
45 INVESTMENTS
47 FINANCIAL STATEMENTS
51 NOTES TO THE
FINANCIAL STATEMENTS
HEALTH CARE 55 PERFORMANCE
59 FUND TALK: THE MANAGER'S OVERVIEW
60 INVESTMENT SUMMARY
61 INVESTMENTS
63 FINANCIAL STATEMENTS
67 NOTES TO THE
FINANCIAL STATEMENTS
NATURAL RESOURCES 71 PERFORMANCE
75 FUND TALK: THE MANAGER'S OVERVIEW
76 INVESTMENT SUMMARY
77 INVESTMENTS
79 FINANCIAL STATEMENTS
83 NOTES TO THE
FINANCIAL STATEMENTS
TECHNOLOGY 87 PERFORMANCE
91 FUND TALK: THE MANAGER'S OVERVIEW
92 INVESTMENT SUMMARY
93 INVESTMENTS
96 FINANCIAL STATEMENTS
100 NOTES TO THE
FINANCIAL STATEMENTS
UTILITIES GROWTH 104 PERFORMANCE
108 FUND TALK: THE MANAGER'S OVERVIEW
109 INVESTMENT SUMMARY
110 INVESTMENTS
112 FINANCIAL STATEMENTS
116 NOTES TO THE
FINANCIAL STATEMENTS
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THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF EACH FUND'S
PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS
STATED ON THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF
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PERFORMANCE OVERVIEW
Due to their volatile nature, technology stocks are capable of
producing dramatic performance swings - up or down - in any given time
period. Back in the fall of 1998, for instance, when several
technology-intensive Southeast Asian markets imploded, tech investors
the world over ran for safer ground. Funny how a year changes things.
Technology stocks dominated the U.S. equity market during the six
months that ended January 31, 2000, and `dominated' may be an
understatement: The NASDAQ Index, which serves as a general gauge of
tech stock performance, was up 49.52%. While technology stocks were
ruling the roost, however, the rest of the market had its hands full
just trying to generate positive returns. The market itself was
extremely narrow during the period, with a select group of stocks
clogging the top of the performance charts. Accordingly, the
bellwether U.S. stock indexes - the Standard & Poor's 500 SM Index and
the Dow Jones Industrial Average - returned 5.59% and 3.46%,
respectively, as such major sectors as finance and health turned in
lackluster performances. For calendar year 1999, in fact, the 10
best-performing stocks accounted for close to 70% of the market's
advance.
For the most part, investors continued to favor large-cap growth
stocks during the period. But thanks to the haughty performance of the
tech sector, many smaller stocks got in on the act as well. The
Russell 2000(registered trademark) Index - a popular performance gauge
for smaller stocks - outperformed the S&P 500(registered trademark)
during the period by posting a 12.25% return. A considerable
technology weighting certainly didn't hurt.
Of course, much of the fuel for the technology ride was supplied by
Internet-related stocks. Investors continued to gravitate toward these
stocks, bidding up their prices rapidly despite the fact that many
companies were unprofitable and showed no signs of being profitable in
the near future. This type of price momentum - which flew in the face
of conventional wisdom that a company's share price follows its
earnings - left many professional money managers scratching their
heads.
The policymakers of the Federal Reserve Board also wondered what to do
about the sector's dominance, specifically its influence on the
resilient U.S. economy. The Fed's answer - per usual - came in the
form of two successive interest-rate hikes, once in August and again
in November. These widely anticipated gestures, however - which took
back some of the rate cuts the Fed had made in 1998 - did very little
to temper the momentum. Tech stocks sold off some in January, mostly
triggered by anticipation that the Fed would raise rates again at its
February meeting.
Turning to individual sector performance, what more can be said about
TECHNOLOGY? Aside from the omnipresent Internet influence, tech stocks
also were boosted by increased corporate and consumer demand for data
storage, as well as the continued growth spurt within the wireless
communications area. The Goldman Sachs Technology Index - an index of
185 stocks designed to measure the performance of companies in the
tech sector - returned 41.54% during the six-month period.
Because of their narrow focus, sector funds tend to be more volatile
than funds that diversify across many sectors and companies. The only
other two Advisor Focus sectors that generated positive results - as
measured by industry-specific Goldman Sachs indexes - were utilities
and health care. The incredible demand for wireless and cellular
communications lifted many stocks within the UTILITIES sector.
Increased cost-cutting competition among long-distance telephone
service carriers, as well as a wave of domestic and international
consolidation, also marked the period. Bell Atlantic became the first
local telephone company to enter the $90 billion U.S. long-distance
business, while AT&T continued to transform itself from a standard
telephone company into a wide-ranging telecommunications provider. For
the period, the Goldman Sachs Utilities Index was up 12.17%.
HEALTH CARE stocks, on the other hand, received a much-needed boost
from the biotechnology sector, which continued to generate excitement
over the emerging field of genomics. Investors also kept watch on the
ongoing takeover battle between drug giants American Home Products and
Pfizer, both of which aggressively courted Warner-Lambert. Many health
care firms also began to leverage the power of the Internet during the
period.
The remaining four industry sectors couldn't reach positive territory
during the period. The performance of stocks in the CONSUMER
INDUSTRIES sector was influenced mostly by consumer confidence level
swings. Consumer confidence was down through the early part of the
period, implying that higher interest rates and falling stock prices
could cause many folks to keep their wallets in their pockets.
Confidence rebounded sharply as the year came to a close, however, as
strong economic data translated into strong sales for retailers. In
company-specific developments, Coca-Cola experienced a bit of
management chaos, while many leading retailers - including Wal-Mart
and Kmart - entered into online marketing alliances.
The anticipation and eventual reality of higher interest rates spelled
trouble for most FINANCIAL SERVICES stocks during the period. A
slowdown in banking mergers was attributed in large part to the rising
rate environment and sluggish revenue growth. Higher rates resulted in
lower loan volumes for many regional banks and, while the Fed left
interest rates untouched in December, speculation was that another
hike was in store in early 2000. The Goldman Sachs Financial Services
Index was down almost 8% during the period.
Interest-rate pressures also had a negative impact on the CYCLICAL
INDUSTRIES sector, predominately made up of economically sensitive
stocks. This group performed well through much of the period, buoyed
by increased manufacturing growth and strong consolidation rates among
commodity-based companies. But rate pressures in January took the wind
out of the sails, as concerns over an economic slowdown cast doubts
over continued manufacturing growth.
NATURAL RESOURCES stocks had mixed performance results. Gold prices
snapped back nicely in late September after a prolonged drought, and
the ministers of OPEC agreed to restrain oil output, indicating a
strong likelihood that oil prices would remain high during the winter
season in the Northern Hemisphere. A proposed merger between BP Amoco
and Atlantic Richfield was blocked due to antitrust laws, while
another mega-merger - this one between foreign giants Total Fina and
Elf Aquitane - was eventually finalized.
ADVISOR CONSUMER INDUSTRIES FUND - CLASS A
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL A -0.48% 0.27% 95.36%
FIDELITY ADV CONSUMER - CL A -6.20% -5.49% 84.13%
(INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Consumer Industries -1.06% -0.91% 82.75%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to the performance of both the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Consumer Industries Index - a market
capitalization-weighted index of 304 stocks designed to measure the
performance of companies in the consumer industries sector. Issues in
the index include providers of consumer services and products,
including producers of beverages - alcoholic and non-alcoholic, food,
personal care, household products and tobacco companies. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL A 0.27% 21.69%
FIDELITY ADV CONSUMER - CL A -5.49% 19.60%
(INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Consumer Industries -0.91% 19.33%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Consumer Ind -CL A S&P 500 GS Consumer Industries
00185 SP001 GS002
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 9943.38 10516.69 10513.26
1996/10/31 10056.48 10806.74 10515.20
1996/11/30 10395.78 11623.62 11025.10
1996/12/31 10216.82 11393.36 10884.77
1997/01/31 10710.11 12105.21 11305.36
1997/02/28 10842.92 12200.12 11695.56
1997/03/31 10529.87 11698.81 11296.69
1997/04/30 10700.63 12397.23 11790.13
1997/05/31 11525.94 13151.98 12465.57
1997/06/30 12114.10 13741.19 12976.04
1997/07/31 12787.63 14834.57 13662.47
1997/08/31 12332.28 14003.54 12875.85
1997/09/30 13156.20 14770.51 13567.42
1997/10/31 12917.00 14277.18 13296.15
1997/11/30 13551.41 14938.07 14130.89
1997/12/31 13988.48 15194.56 14591.98
1998/01/31 13923.62 15362.61 14472.66
1998/02/28 14928.97 16470.56 15602.11
1998/03/31 15782.98 17314.02 16489.31
1998/04/30 15685.69 17488.19 16327.46
1998/05/31 15761.36 17187.57 16451.19
1998/06/30 16550.51 17885.73 17157.68
1998/07/31 16301.88 17695.25 16593.20
1998/08/31 14010.10 15136.87 14250.87
1998/09/30 14167.78 16106.54 14330.43
1998/10/31 15878.08 17416.64 16100.92
1998/11/30 16802.57 18472.27 17178.98
1998/12/31 18004.40 19536.64 18227.30
1999/01/31 18362.64 20353.66 18442.58
1999/02/28 18177.75 19721.07 18139.22
1999/03/31 18478.20 20510.11 18457.02
1999/04/30 18709.33 21304.46 18831.12
1999/05/31 18374.20 20801.47 18406.85
1999/06/30 19102.23 21955.95 19134.43
1999/07/31 18501.32 21270.48 18470.42
1999/08/31 17773.28 21165.19 17776.69
1999/09/30 17390.66 20585.06 17266.59
1999/10/31 18295.44 21887.68 18350.63
1999/11/30 18577.46 22332.66 18648.14
1999/12/31 19834.75 23648.05 19743.97
2000/01/31 18412.95 22459.97 18274.61
IMATRL PRASUN SHR__CHT 20000131 20000216 142903 R00000000000044
</TABLE>
$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 5.75% sales
charge was paid. As the chart shows, by January 31, 2000, the value of
the investment would have grown to $18,413 - an 84.13% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Consumer Industries Index, it would have grown to $18,275 - an
82.75% increase.
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.
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND - CLASS T
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL T -0.61% -0.04% 93.15%
FIDELITY ADV CONSUMER - CL T -4.09% -3.54% 86.39%
(INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Consumer Industries -1.06% -0.91% 82.75%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to the performance of both the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Consumer Industries Index - a market
capitalization-weighted index of 304 stocks designed to measure the
performance of companies in the consumer industries sector. Issues in
the index include providers of consumer services and products,
including producers of beverages - alcoholic and non-alcoholic, food,
personal care, household products and tobacco companies. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL T -0.04% 21.29%
FIDELITY ADV CONSUMER - CL T -3.54% 20.03%
(INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Consumer Industries -0.91% 19.33%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Consumer Ind -CL T S&P 500 GS Consumer Industries
00195 SP001 GS002
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 10180.75 10516.69 10513.26
1996/10/31 10296.55 10806.74 10515.20
1996/11/30 10643.95 11623.62 11025.10
1996/12/31 10451.06 11393.36 10884.77
1997/01/31 10955.66 12105.21 11305.36
1997/02/28 11091.51 12200.12 11695.56
1997/03/31 10761.58 11698.81 11296.69
1997/04/30 10936.25 12397.23 11790.13
1997/05/31 11770.78 13151.98 12465.57
1997/06/30 12362.72 13741.19 12976.04
1997/07/31 13051.69 14834.57 13662.47
1997/08/31 12585.91 14003.54 12875.85
1997/09/30 13396.56 14770.51 13567.42
1997/10/31 13152.02 14277.18 13296.15
1997/11/30 13800.59 14938.07 14130.89
1997/12/31 14236.18 15194.56 14591.98
1998/01/31 14169.91 15362.61 14472.66
1998/02/28 15185.99 16470.56 15602.11
1998/03/31 16058.50 17314.02 16489.31
1998/04/30 15948.06 17488.19 16327.46
1998/05/31 16025.37 17187.57 16451.19
1998/06/30 16820.56 17885.73 17157.68
1998/07/31 16566.54 17695.25 16593.20
1998/08/31 14236.18 15136.87 14250.87
1998/09/30 14397.48 16106.54 14330.43
1998/10/31 16128.00 17416.64 16100.92
1998/11/30 17069.78 18472.27 17178.98
1998/12/31 18282.32 19536.64 18227.30
1999/01/31 18647.26 20353.66 18442.58
1999/02/28 18458.91 19721.07 18139.22
1999/03/31 18753.21 20510.11 18457.02
1999/04/30 18976.89 21304.46 18831.12
1999/05/31 18635.49 20801.47 18406.85
1999/06/30 19377.14 21955.95 19134.43
1999/07/31 18753.21 21270.48 18470.42
1999/08/31 18011.56 21165.19 17776.69
1999/09/30 17633.69 20585.06 17266.59
1999/10/31 18543.50 21887.68 18350.63
1999/11/30 18818.84 22332.66 18648.14
1999/12/31 20087.80 23648.05 19743.97
2000/01/31 18639.27 22459.97 18274.61
IMATRL PRASUN SHR__CHT 20000131 20000216 143119 R00000000000044
</TABLE>
$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 3.50% sales
charge was paid. As the chart shows, by January 31, 2000, the value of
the investment would have grown to $18,639 - an 86.39% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Consumer Industries Index, it would have grown to $18,275 - an
82.75% increase.
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.
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND - CLASS B
PERFORMANCE
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
shares' 12b-1 fee been reflected, returns prior to March 3, 1997 would
have been lower. Class B shares' contingent deferred sales charge
included in past six months, past one year and life of fund total
return figures are 5%, 5% and 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL B -0.87% -0.49% 90.43%
FIDELITY ADV CONSUMER - CL B -5.74% -5.38% 87.43%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Consumer Industries -1.06% -0.91% 82.75%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Consumer Industries Index - a market
capitalization-weighted index of 304 stocks designed to measure the
performance of companies in the consumer industries sector. Issues in
the index include providers of consumer services and products,
including producers of beverages - alcoholic and non-alcoholic, food,
personal care, household products and tobacco companies. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL B -0.49% 20.78%
FIDELITY ADV CONSUMER - CL B -5.38% 20.22%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Consumer Industries -0.91% 19.33%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Consumer Ind -CL B S&P 500 GS Consumer Industries
00190 SP001 GS002
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10550.00 10516.69 10513.26
1996/10/31 10670.00 10806.74 10515.20
1996/11/30 11030.00 11623.62 11025.10
1996/12/31 10830.11 11393.36 10884.77
1997/01/31 11353.01 12105.21 11305.36
1997/02/28 11493.80 12200.12 11695.56
1997/03/31 11151.90 11698.81 11296.69
1997/04/30 11322.85 12397.23 11790.13
1997/05/31 12187.65 13151.98 12465.57
1997/06/30 12791.00 13741.19 12976.04
1997/07/31 13494.90 14834.57 13662.47
1997/08/31 13012.22 14003.54 12875.85
1997/09/30 13841.35 14770.51 13567.42
1997/10/31 13576.87 14277.18 13296.15
1997/11/30 14249.10 14938.07 14130.89
1997/12/31 14689.16 15194.56 14591.98
1998/01/31 14620.57 15362.61 14472.66
1998/02/28 15649.39 16470.56 15602.11
1998/03/31 16541.02 17314.02 16489.31
1998/04/30 16426.71 17488.19 16327.46
1998/05/31 16506.73 17187.57 16451.19
1998/06/30 17318.35 17885.73 17157.68
1998/07/31 17044.00 17695.25 16593.20
1998/08/31 14643.44 15136.87 14250.87
1998/09/30 14798.16 16106.54 14330.43
1998/10/31 16577.85 17416.64 16100.92
1998/11/30 17528.63 18472.27 17178.98
1998/12/31 18771.97 19536.64 18227.30
1999/01/31 19137.66 20353.66 18442.58
1999/02/28 18942.63 19721.07 18139.22
1999/03/31 19235.18 20510.11 18457.02
1999/04/30 19454.59 21304.46 18831.12
1999/05/31 19088.90 20801.47 18406.85
1999/06/30 19844.66 21955.95 19134.43
1999/07/31 19210.80 21270.48 18470.42
1999/08/31 18430.66 21165.19 17776.69
1999/09/30 18039.23 20585.06 17266.59
1999/10/31 18956.69 21887.68 18350.63
1999/11/30 19241.85 22332.66 18648.14
1999/12/31 20531.25 23648.05 19743.97
2000/01/31 18743.00 22459.97 18274.61
IMATRL PRASUN SHR__CHT 20000131 20000216 142903 R00000000000044
</TABLE>
$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, 2000, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $18,743 - an
87.43% increase on the initial investment. For comparison, look at how
the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Consumer Industries Index,
it would have grown to $18,275 - an 82.75% increase.
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.
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND - CLASS C
PERFORMANCE
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 shares' 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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL C -0.93% -0.49% 90.36%
FIDELITY ADV CONSUMER - CL C -1.91% -1.47% 90.36%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Consumer Industries -1.06% -0.91% 82.75%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Consumer Industries Index - a market
capitalization-weighted index of 304 stocks designed to measure the
performance of companies in the consumer industries sector. Issues in
the index include providers of consumer services and products,
including producers of beverages - alcoholic and non-alcoholic, food,
personal care, household products and tobacco companies. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - CL C -0.49% 20.77%
FIDELITY ADV CONSUMER - CL C -1.47% 20.77%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Consumer Industries -0.91% 19.33%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Consumer Ind -CL C S&P 500 GS Consumer Industries
00282 SP001 GS002
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10550.00 10516.69 10513.26
1996/10/31 10670.00 10806.74 10515.20
1996/11/30 11030.00 11623.62 11025.10
1996/12/31 10830.11 11393.36 10884.77
1997/01/31 11353.01 12105.21 11305.36
1997/02/28 11493.80 12200.12 11695.56
1997/03/31 11151.90 11698.81 11296.69
1997/04/30 11322.85 12397.23 11790.13
1997/05/31 12187.65 13151.98 12465.57
1997/06/30 12791.00 13741.19 12976.04
1997/07/31 13494.90 14834.57 13662.47
1997/08/31 13012.22 14003.54 12875.85
1997/09/30 13841.35 14770.51 13567.42
1997/10/31 13576.87 14277.18 13296.15
1997/11/30 14247.70 14938.07 14130.89
1997/12/31 14686.44 15194.56 14591.98
1998/01/31 14606.62 15362.61 14472.66
1998/02/28 15655.65 16470.56 15602.11
1998/03/31 16545.05 17314.02 16489.31
1998/04/30 16431.02 17488.19 16327.46
1998/05/31 16510.84 17187.57 16451.19
1998/06/30 17320.42 17885.73 17157.68
1998/07/31 17046.76 17695.25 16593.20
1998/08/31 14652.23 15136.87 14250.87
1998/09/30 14807.22 16106.54 14330.43
1998/10/31 16585.06 17416.64 16100.92
1998/11/30 17534.87 18472.27 17178.98
1998/12/31 18776.92 19536.64 18227.30
1999/01/31 19130.05 20353.66 18442.58
1999/02/28 18947.40 19721.07 18139.22
1999/03/31 19239.65 20510.11 18457.02
1999/04/30 19458.83 21304.46 18831.12
1999/05/31 19093.52 20801.47 18406.85
1999/06/30 19848.49 21955.95 19134.43
1999/07/31 19215.29 21270.48 18470.42
1999/08/31 18435.96 21165.19 17776.69
1999/09/30 18044.96 20585.06 17266.59
1999/10/31 18961.45 21887.68 18350.63
1999/11/30 19246.30 22332.66 18648.14
1999/12/31 20534.34 23648.05 19743.97
2000/01/31 19035.76 22459.97 18274.61
IMATRL PRASUN SHR__CHT 20000131 20000216 142903 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$19,036 - a 90.36% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Consumer Industries Index,
it would have grown to $18,275 - an 82.75% increase.
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.
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of John Porter)
An interview with
John Porter, Portfolio
Manager of Fidelity Advisor Consumer Industries Fund
Q. HOW DID THE FUND PERFORM, JOHN?
A. For the six-month period that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares posted returns of -0.48%,
- -0.61%, -0.87% and -0.93%, respectively. For this same time frame, the
Goldman Sachs Consumer Industries Index - an index of 304 stocks
designed to measure the performance of companies in the consumer
industries sector - retreated 1.06%. The Standard & Poor's 500 Index
returned 5.59% during the six-month period. For the 12 months ending
January 31, 2000, the fund's Class A, Class T, Class B and Class C
shares returned 0.27%, -0.04%, -0.49% and -0.49%, respectively. By
comparison, the Goldman Sachs and S&P 500 indexes returned -0.91% and
10.35%, respectively.
Q. WHAT FACTORS HELPED THE FUND BEAT THE GOLDMAN SACHS INDEX DURING
THE PAST SIX MONTHS?
A. Some good picks, coupled with strong industry positioning, gave us
the upper hand during the period. We gained an advantage by
maintaining an underweighting in soft drinks, most notably Coca-Cola,
which continued to grapple with local market challenges and falling
sales volumes. The fund benefited from its overexposure to Procter &
Gamble, which rallied in response to recovering global economies and a
company-wide reorganization. Having a smaller stake than the index in
both retail department stores and foods, and a larger position in
broadcasting stocks, also helped. However, the fund's overweighting in
supermarkets and tobacco, both of which performed poorly, tempered its
gains.
Q. HAVE YOU MADE ANY NOTABLE CHANGES SINCE TAKING OVER THE FUND ON
SEPTEMBER 1, 1999?
A. As the period progressed, I became increasingly confident in the
state of the U.S. economy. So, I was more comfortable ramping up my
exposure on the domestic front, rotating away from defensive areas
such as supermarkets, and into more offensive high-growth retail,
advertising and media stocks. I did add modestly to the fund's stake
in multinationals as a play on the developing recoveries overseas.
Q. WITH HISTORICALLY HIGH LEVELS OF CONSUMER SPENDING FUELING THE
ECONOMY, THE SECTOR STILL SEEMED TO STRUGGLE. WHY?
A. It's true that consumer spending has been very strong, and a lot of
the companies are benefiting from it. But the growth, which is
attractive on an absolute basis, is simply not all that exciting on a
relative basis. We're living in an environment where investors are
expecting the market to continue to deliver growth in the mid-teens or
better, and there are really only one or two sectors that have done
that lately - technology and telecommunications. Rising interest rates
also proved troubling for consumer stocks, but to a much lesser degree
than the relative attractiveness of the tech and telecom sectors.
Q. HOW DID THE FUND'S INVESTMENTS IN THE VARIOUS CONSUMER INDUSTRIES
INFLUENCE PERFORMANCE?
A. Our exposure to high-growth retailers Wal-Mart, Home Depot and
Costco, as well as our avoidance of weak department store benchmark
issues Sears, Kmart and J.C. Penney, served us well. I cut back on the
fund's exposure to supermarkets - a group in part felled by execution
problems related to merger activity - but the stocks I held onto
really hurt. In advertising and media, I stepped up the fund's
weighting in radio stocks, many of which were big beneficiaries of
Internet advertising, and this strategy helped. Our overweighting in a
healthy household product segment gave us an additional lift. Finally,
in terms of food stocks, not holding Heinz or Campbell Soup, and
having less Pepsico than the benchmark, also contributed to returns.
Q. WHICH OTHER STOCKS WORKED OUT WELL FOR THE FUND? WHICH
DISAPPOINTED?
A. Disney, CBS, Corning and Time Warner were all strong contributors.
On the downside, the fund's stake in Saks hurt, as the stock recoiled
- - along with most department stores - in response to declining mall
traffic. Supermarket stocks Kroger, Albertson's and Safeway also were
big negatives, as was Philip Morris, which continued to struggle with
concerns surrounding tobacco-related litigation.
Q. WHAT'S YOUR OUTLOOK?
A. I'll continue to position the fund to further benefit from the
robustness of the U.S. economy, which I feel still has legs. Globally,
I feel it's too early to measure the sustainability of the recoveries
we're watching unfold today. If I happen to see signs of deterioration
domestically, I would consider adding more of the leading
multinationals, which could help performance in the event of a
slowdown.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$35 million
MANAGER: John Porter, since September 1999;
joined Fidelity in 1995
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Wal-Mart Stores, Inc. 7.4
Procter & Gamble Co. 6.5
Home Depot, Inc. 6.0
The Coca-Cola Co. 4.9
Walt Disney Co. 3.4
Time Warner, Inc. 2.9
AT&T Corp. - Liberty Media 2.5
Group Class A
McDonald's Corp. 2.0
MediaOne Group, Inc. 1.9
Philip Morris Companies, Inc. 1.9
39.4
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Broadcasting 15.6%
General Merchandise Stores 11.7%
Household Products 10.6%
Retail & Wholesale, 9.1%
Miscellaneous
Beverages 9.0%
All Others* 44.0%
Row: 1, Col: 1, Value: 15.6
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 11.7
Row: 1, Col: 4, Value: 10.6
Row: 1, Col: 5, Value: 9.1
Row: 1, Col: 6, Value: 9.0
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 44.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.3%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.7%
Interpublic Group of 4,900 $ 225,400
Companies, Inc.
Omnicom Group, Inc. 3,300 309,169
Young & Rubicam, Inc. 1,100 59,263
593,832
APPAREL STORES - 2.7%
Abercrombie & Fitch Co. Class 3,290 70,324
A (a)
American Eagle Outfitters, 1,100 39,944
Inc. (a)
AnnTaylor Stores Corp. (a) 1,700 37,400
Claire's Stores, Inc. 1,800 33,750
Gap, Inc. 12,268 548,226
Payless ShoeSource, Inc. (a) 700 28,525
Talbots, Inc. 900 31,894
The Limited, Inc. 4,340 133,184
TJX Companies, Inc. 2,300 37,519
Too, Inc. (a) 705 11,677
Venator Group, Inc. (a) 2,600 15,600
988,043
AUTOS, TIRES, & ACCESSORIES -
0.1%
AutoNation, Inc. (a) 6,800 51,425
BEVERAGES - 9.0%
Adolph Coors Co. Class B 1,400 67,900
Anheuser-Busch Companies, 7,000 472,500
Inc.
Canandaigua Brands, Inc. 1,800 93,375
Class A (a)
Celestial Seasonings, Inc. (a) 8,000 179,000
Coca-Cola Enterprises, Inc. 7,200 181,800
Panamerican Beverages, Inc. 1,600 29,900
Class A
Pepsi Bottling Group, Inc. 2,100 43,444
PepsiCo, Inc. 4,400 150,150
Seagram Co. Ltd. 4,200 241,187
The Coca-Cola Co. 30,800 1,769,075
3,228,331
BROADCASTING - 15.6%
Adelphia Communications Corp. 750 49,641
Class A (a)
American Tower Corp. Class A 500 17,813
(a)
AMFM, Inc. (a) 4,900 382,200
AT&T Corp. - Liberty Media 17,400 889,575
Group Class A (a)
Cablevision Systems Corp. 1,450 110,744
Class A (a)
CBS Corp. (a) 11,249 655,957
Clear Channel Communications, 3,350 289,356
Inc. (a)
Comcast Corp.:
Class A 1,200 51,750
Class A (special) 10,000 460,000
Cox Communications, Inc. 7,300 356,331
Class A (a)
E. W. Scripps Co. Class A 700 32,944
SHARES VALUE (NOTE 1)
EchoStar Communications Corp. 600 $ 48,863
Class A (a)
Hearst-Argyle Television, 700 17,063
Inc. (a)
Hispanic Broadcasting Corp. 700 72,756
(a)
Infinity Broadcasting Corp. 5,900 191,750
Class A
MediaOne Group, Inc. (a) 8,400 667,800
Time Warner, Inc. 13,194 1,054,695
UnitedGlobalCom, Inc. (a) 900 61,538
USA Networks, Inc. (a) 3,700 183,613
5,594,389
BUILDING MATERIALS - 0.1%
Fortune Brands, Inc. 1,800 52,200
CELLULAR - 0.3%
Rogers Communications, Inc. 3,300 100,003
Class B (non-vtg.) (a)
COMPUTER SERVICES & SOFTWARE
- - 0.8%
America Online, Inc. (a) 500 28,469
Circle.com (a) 600 6,600
Galileo International, Inc. 1,700 40,906
Microsoft Corp. (a) 1,800 176,175
Sykes Enterprises, Inc. (a) 1,600 44,300
296,450
COMPUTERS & OFFICE EQUIPMENT
- - 0.1%
Pitney Bowes, Inc. 900 44,100
CONSUMER ELECTRONICS - 0.5%
Gemstar International Group 2,400 159,300
Ltd. (a)
Whirlpool Corp. 600 34,950
194,250
DRUG STORES - 1.5%
CVS Corp. 4,030 140,798
Walgreen Co. 14,300 395,038
535,836
DRUGS & PHARMACEUTICALS - 0.3%
American Home Products Corp. 2,200 103,538
ENTERTAINMENT - 6.8%
Carnival Corp. 9,300 419,081
Fox Entertainment Group, Inc. 1,500 35,250
Class A (a)
Hollywood Entertainment Corp. 1,300 15,519
(a)
International Speedway Corp. 300 15,113
Class A
Royal Caribbean Cruises Ltd. 2,900 143,369
SFX Entertainment, Inc. Class 2,150 70,009
A (a)
Speedway Motorsports, Inc. (a) 700 22,050
Viacom, Inc.:
Class A (a) 1,600 89,300
Class B (non-vtg.) (a) 7,200 398,700
Walt Disney Co. 34,000 1,234,625
2,443,016
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FOODS - 3.9%
American Italian Pasta Co. 2,800 $ 76,650
Class A (a)
Bestfoods 3,950 171,825
Corn Products International, 3,589 82,547
Inc.
Dean Foods Co. 800 27,150
Earthgrains Co. 2,400 37,800
Flowers Industries, Inc. 2,200 26,813
General Mills, Inc. 2,300 71,731
Groupe Danone 100 21,349
Hormel Foods Corp. 900 36,563
IBP, Inc. 2,400 36,000
Keebler Foods Co. (a) 3,600 82,125
Kellogg Co. 1,500 36,375
Nabisco Group Holdings Corp. 8,100 69,863
Nabisco Holdings Corp. Class A 4,000 120,750
Quaker Oats Co. 4,300 255,313
Sara Lee Corp. 5,300 97,719
Sysco Corp. 4,200 149,363
1,399,936
GENERAL MERCHANDISE STORES -
11.7%
Ames Department Stores, Inc. 3,100 64,713
(a)
BJ's Wholesale Club, Inc. (a) 1,100 38,500
Consolidated Stores Corp. (a) 6,140 87,495
Costco Wholesale Corp. (a) 8,700 425,756
Dollar General Corp. 3,625 77,031
Dollar Tree Stores, Inc. (a) 850 37,453
Federated Department Stores, 1,200 49,950
Inc. (a)
Kohls Corp. (a) 3,100 217,388
Neiman Marcus Group, Inc. 346 7,742
Class B (a)
Stein Mart, Inc. (a) 5,000 24,063
Target Corp. 7,900 521,894
Wal-Mart Stores, Inc. 48,200 2,638,932
4,190,917
GROCERY STORES - 1.9%
Albertson's, Inc. 2,521 77,206
Fleming Companies, Inc. 5,220 52,200
Kroger Co. (a) 10,100 175,488
Safeway, Inc. (a) 7,550 288,316
U.S. Foodservice (a) 4,000 72,250
Winn-Dixie Stores, Inc. 600 12,150
677,610
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 0.9%
Linens'n Things, Inc. (a) 2,500 $ 49,063
Newell Rubbermaid, Inc. 8,900 267,000
316,063
HOUSEHOLD PRODUCTS - 10.6%
Avon Products, Inc. 11,950 380,159
Clorox Co. 4,798 229,105
Colgate-Palmolive Co. 3,000 177,750
Dial Corp. 7,500 120,469
Estee Lauder Companies, Inc. 4,300 219,838
Gillette Co. 4,600 173,075
Procter & Gamble Co. 22,985 2,318,612
Unilever NV 6,900 33,546
Unilever NV (NY Shares) 2,960 136,900
Yankee Candle Co., Inc. 700 11,681
3,801,135
LEASING & RENTAL - 0.1%
Crown Castle International 600 18,975
Corp. (a)
Hertz Corp. Class A 400 17,700
36,675
LEISURE DURABLES & TOYS - 0.4%
Callaway Golf Co. 1,100 14,025
Harley-Davidson, Inc. 2,100 147,394
161,419
LODGING & GAMING - 0.5%
Gtech Holdings Corp. (a) 900 20,025
Marriott International, Inc. 1,200 37,275
Class A
Mirage Resorts, Inc. (a) 3,100 38,750
Prime Hospitality Corp. (a) 4,600 36,225
Sun International Hotels Ltd. 400 8,350
(a)
WMS Industries, Inc. (a) 2,400 26,700
167,325
PACKAGING & CONTAINERS - 0.5%
Corning, Inc. 830 128,028
Tupperware Corp. 2,700 44,044
172,072
PAPER & FOREST PRODUCTS - 1.5%
Kimberly-Clark Corp. 8,900 551,244
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 2,000 123,750
PRINTING - 0.1%
R. R. Donnelley & Sons Co. 2,400 52,650
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PUBLISHING - 2.9%
Gannet Co., Inc. 2,800 $ 194,600
Harcourt General, Inc. 1,150 46,000
Harte Hanks Communications, 1,900 45,244
Inc.
Knight-Ridder, Inc. 700 37,319
McGraw-Hill Companies, Inc. 3,900 218,644
Meredith Corp. 2,400 84,000
Playboy Enterprises, Inc. 2,700 62,944
Class B (a)
Reader's Digest Association, 2,200 83,050
Inc. Class A (non-vtg.)
The New York Times Co. Class A 3,500 159,906
Tribune Co. 2,400 101,250
1,032,957
REAL ESTATE INVESTMENT TRUSTS
- - 0.1%
Pinnacle Holdings, Inc. 500 21,219
RESTAURANTS - 3.1%
Brinker International, Inc. 1,500 37,875
(a)
CEC Entertainment, Inc. (a) 1,350 34,003
Darden Restaurants, Inc. 1,900 30,163
Jack in the Box, Inc. (a) 2,700 55,519
McDonald's Corp. 19,800 736,313
Outback Steakhouse, Inc. (a) 4,550 112,613
Papa John's International, 1,600 39,800
Inc. (a)
Starbucks Corp. (a) 800 25,600
Tricon Global Restaurants, 1,550 44,369
Inc. (a)
1,116,255
RETAIL & WHOLESALE,
MISCELLANEOUS - 9.1%
Alberto-Culver Co. Class A 2,800 59,850
Bed Bath & Beyond, Inc. (a) 3,500 95,156
Best Buy Co., Inc. (a) 1,700 81,175
Chemdex Corp. 400 39,000
Circuit City Stores, Inc. - 4,200 161,700
Circuit City Group
Drugstore.com, Inc. 800 24,000
Home Depot, Inc. 37,900 2,146,088
Lowe's Companies, Inc. 7,600 339,150
Office Depot, Inc. (a) 2,300 23,144
Staples, Inc. (a) 8,750 208,359
Tiffany & Co., Inc. 400 29,600
Webvan Group, Inc. 2,400 36,150
Zale Corp. (a) 400 14,300
3,257,672
SECURITIES INDUSTRY - 0.1%
Macrovision Corp. (a) 200 18,738
SERVICES - 2.0%
ACNielsen Corp. (a) 5,300 108,650
Cendant Corp. (a) 5,500 111,031
H&R Block, Inc. 1,700 73,313
SHARES VALUE (NOTE 1)
Manpower, Inc. 2,400 $ 85,650
Modis Professional Services, 300 5,213
Inc. (a)
NCO Group, Inc. (a) 1,900 43,819
Profit Recovery Group 1,650 44,756
International, Inc. (a)
True North Communications 3,300 137,156
Viad Corp. 4,000 105,250
714,838
TEXTILES & APPAREL - 1.1%
Jones Apparel Group, Inc. (a) 3,300 72,600
Liz Claiborne, Inc. 2,600 87,913
Mohawk Industries, Inc. (a) 800 18,750
NIKE, Inc. Class B 3,100 141,050
Pacific Sunwear of 500 14,688
California, Inc. (a)
Shaw Industries, Inc. 1,300 17,631
Tommy Hilfiger (a) 300 3,619
WestPoint Stevens, Inc. Class 1,500 24,656
A
380,907
TOBACCO - 2.0%
Philip Morris Companies, Inc. 31,500 659,531
RJ Reynolds Tobacco Holdings, 2,800 48,125
Inc.
707,656
TOTAL COMMON STOCKS 33,126,451
(Cost $27,395,059)
CASH EQUIVALENTS - 8.4%
Central Cash Collateral Fund, 243,380 243,380
5.56% (b)
Taxable Central Cash Fund, 2,754,013 2,754,013
5.45% (b)
MATURITY AMOUNTS
Investments in repurchase $ 28,004 28,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.70%,
dated 1/31/00 due 2/1/00
TOTAL CASH EQUIVALENTS 3,025,393
(Cost $3,025,393)
TOTAL INVESTMENT PORTFOLIO - 36,151,844
100.7%
(Cost $30,420,452)
NET OTHER ASSETS - (0.7)% (242,518)
NET ASSETS - 100% $ 35,909,326
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $30,488,760. Net unrealized appreciation
aggregated $5,663,084, of which $7,990,832 related to appreciated
investment securities and $2,327,748 related to depreciated investment
securities.
ADVISOR CONSUMER INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 36,151,844
value (including repurchase
agreements of $28,000) (cost
$30,420,452) - See
accompanying schedule
Cash 944
Receivable for investments 119,619
sold
Receivable for fund shares 92,012
sold
Dividends receivable 11,306
Interest receivable 11,607
Other receivables 139
TOTAL ASSETS 36,387,471
LIABILITIES
Payable for investments $ 70,756
purchased
Payable for fund shares 99,493
redeemed
Accrued management fee 17,505
Distribution fees payable 18,572
Other payables and accrued 28,439
expenses
Collateral on securities 243,380
loaned, at value
TOTAL LIABILITIES 478,145
NET ASSETS $ 35,909,326
Net Assets consist of:
Paid in capital $ 30,723,618
Accumulated net investment (122,548)
loss
Accumulated undistributed net (423,092)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 5,731,348
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 35,909,326
CALCULATION OF MAXIMUM $15.67
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($3,330,380 (divided
by) 212,588 shares)
Maximum offering price per $16.63
share (100/94.25 of $15.67)
CLASS T: NET ASSET VALUE $15.57
and redemption price per
share ($16,044,729 (divided
by) 1,030,430 shares)
Maximum offering price per $16.13
share (100/96.50 of $15.57)
CLASS B: NET ASSET VALUE $15.36
and offering price per
share ($9,788,926 (divided
by) 637,420 shares) A
CLASS C: NET ASSET VALUE $15.37
and offering price per
share ($2,692,488 (divided
by) 175,161 shares) A
INSTITUTIONAL CLASS: NET $15.78
ASSET VALUE, offering price
and redemption price per
share ($4,052,803
(divided by) 256,765 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 164,421
Dividends
Interest 60,609
Security lending 305
TOTAL INCOME 225,335
EXPENSES
Management fee $ 110,013
Transfer agent fees 58,932
Distribution fees 109,746
Accounting and security 30,047
lending fees
Non-interested trustees' 55
compensation
Custodian fees and expenses 4,221
Registration fees 52,128
Audit 12,884
Legal 258
Miscellaneous 537
Total expenses before 378,821
reductions
Expense reductions (30,938) 347,883
NET INVESTMENT INCOME (LOSS) (122,548)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (268,219)
Foreign currency transactions (500) (268,719)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (18,445)
Assets and liabilities in (48) (18,493)
foreign currencies
NET GAIN (LOSS) (287,212)
NET INCREASE (DECREASE) IN $ (409,760)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (122,548) $ (162,801)
income (loss)
Net realized gain (loss) (268,719) 807,597
Change in net unrealized (18,493) 3,190,674
appreciation (depreciation)
NET INCREASE (DECREASE) IN (409,760) 3,835,470
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net realized gain (498,458) (1,579,052)
In excess of net realized (154,373) -
gain
TOTAL DISTRIBUTIONS (652,831) (1,579,052)
Share transactions - net (6,806,883) 13,658,707
increase (decrease)
Redemption fees 16,543 14,605
TOTAL INCREASE (DECREASE) (7,852,931) 15,929,730
IN NET ASSETS
NET ASSETS
Beginning of period 43,762,257 27,832,527
End of period (including $ 35,909,326 $ 43,762,257
accumulated net investment
loss of $122,548 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 16.01 $ 15.08 $ 13.48 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.03) (.06) (.05)
Net realized and unrealized (.07) 1.80 3.31 3.60
gain (loss)
Total from investment (.09) 1.77 3.25 3.55
operations
Less Distributions
From net realized gain (.20) (.85) (1.68) (.07)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.85) (1.68) (.07)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.67 $ 16.01 $ 15.08 $ 13.48
TOTAL RETURN B, C (0.48)% 13.49% 27.48% 35.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,330 $ 3,504 $ 2,220 $ 944
(000 omitted)
Ratio of expenses to average 1.50% A, F 1.55% F 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.49% A, G 1.54% G 1.73% G 1.73% A, G
net assets after expense
reductions
Ratio of net investment (.31)% A (.19)% (.47)% (.50)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 15.93 $ 15.00 $ 13.45 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.06) (.10) (.09)
Net realized and unrealized (.07) 1.79 3.28 3.60
gain (loss)
Total from investment (.11) 1.73 3.18 3.51
operations
Less Distributions
From net realized gain (.20) (.81) (1.66) (.06)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.81) (1.66) (.06)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.57 $ 15.93 $ 15.00 $ 13.45
TOTAL RETURN B, C (0.61)% 13.20% 26.93% 35.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 16,045 $ 21,714 $ 13,989 $ 7,314
(000 omitted)
Ratio of expenses to average 1.75% A, F 1.79% F 2.00% F 2.00% A, F
net assets
Ratio of expenses to average 1.74% A, G 1.77% G 1.98% G 1.97% A, G
net assets after expense
reductions
Ratio of net investment (.56)% A (.42)% (.71)% (.83)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 15.76 $ 14.91 $ 13.42 $ 11.46
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.14) (.17) (.08)
Net realized and unrealized (.07) 1.79 3.26 2.04
gain (loss)
Total from investment (.15) 1.65 3.09 1.96
operations
Less Distributions
From net realized gain (.20) (.81) (1.64) -
In excess of net realized gain (.06) - - -
Total distributions (.26) (.81) (1.64) -
Redemption fees added to paid .01 .01 .04 -
in capital
Net asset value, end of period $ 15.36 $ 15.76 $ 14.91 $ 13.42
TOTAL RETURN B, C (0.87)% 12.71% 26.30% 17.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,789 $ 9,832 $ 5,419 $ 596
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.31% F 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.24%A, G 2.30% G 2.48% G 2.46%A, G
net assets after expense
reductions
Ratio of net investment (1.06)% A (.95)% (1.23)% (1.60)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 15.78 $ 14.95 $ 12.66
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.15) (.13)
Net realized and unrealized (.08) 1.80 2.87
gain (loss)
Total from investment (.16) 1.65 2.74
operations
Less Distributions
From net realized gain (.20) (.83) (.49)
In excess of net realized gain (.06) - -
Total distributions (.26) (.83) (.49)
Redemption fees added to paid .01 .01 .04
in capital
Net asset value, end of period $ 15.37 $ 15.78 $ 14.95
TOTAL RETURN B, C (0.93)% 12.72% 22.67%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,692 $ 2,758 $ 1,461
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.32% F 2.50% A, F
net assets
Ratio of expenses to average 2.24% A, G 2.30% G 2.48% A, G
net assets after expense
reductions
Ratio of net investment (1.06)% A (.95)% (1.27)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 16.11 $ 15.12 $ 13.51 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.01) .02 (.03) (.01)
Net realized and unrealized (.07) 1.81 3.31 3.59
gain (loss)
Total from investment (.08) 1.83 3.28 3.58
operations
Less Distributions
From net realized gain (.20) (.85) (1.70) (.07)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.85) (1.70) (.07)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.78 $ 16.11 $ 15.12 $ 13.51
TOTAL RETURN B, C (0.41)% 13.87% 27.70% 35.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,053 $ 5,954 $ 4,745 $ 1,333
(000 omitted)
Ratio of expenses to average 1.25% A, F 1.26% F 1.50% F 1.50% A, F
net assets
Ratio of expenses to average 1.24% A, G 1.24% G 1.48% G 1.48% A, G
net assets after expense
reductions
Ratio of net investment (.06)% A .11% (.20)% (.13)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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 (the 1940 Act), as amended, 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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities (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. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $12,429,772 and $19,792,611, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 4,179 $ 20
CLASS T 43,696 5
CLASS B 48,539 36,416
CLASS C 13,332 7,223
$ 109,746 $ 43,664
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 8,987 $ 3,402
CLASS T 16,119 5,754
CLASS B 23,708 23,708*
CLASS C 910 910*
$ 49,724 $ 33,774
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 5,486 .33*
CLASS T 26,066 .30*
CLASS B 16,719 .34*
CLASS C 4,921 .37*
INSTITUTIONAL CLASS 5,740 .24*
$ 58,932
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $2,796 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $235,372. The fund received cash collateral of
$243,380 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) above the following
annual rates or range of annual rates of average net assets for each
of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.50% $ 2,959
CLASS T 1.75% 12,716
CLASS B 2.25% 9,241
CLASS C 2.25% 2,870
INSTITUTIONAL CLASS 1.25% 2,102
$ 29,888
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 $1,050 under this arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED
JULY 31,
2000 1999
FROM NET REALIZED GAIN
Class A $ 42,256 $ 121,205
Class T 225,116 772,710
Class B 124,776 327,913
Class C 33,822 82,950
Institutional Class 72,488 274,274
Total $ 498,458 $ 1,579,052
IN EXCESS OF NET REALIZED GAIN
Class A $ 13,086 $ -
Class T 69,719 -
Class B 38,643 -
Class C 10,475 -
Institutional Class 22,450 -
Total $ 154,373 $ -
$ 652,831 $ 1,579,052
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 115,099 $ 911,182
58,720
Reinvestment of distributions 3,047 9,730 47,113
Shares redeemed (68,047) (53,179) (1,067,352)
Net increase (decrease) (6,280) 71,650 $ (109,057)
CLASS T Shares sold 130,008 836,168 $ 2,035,038
Reinvestment of distributions 17,994 59,298 276,740
Shares redeemed (480,531) (465,170) (7,519,478)
Net increase (decrease) (332,529) 430,296 $ (5,207,700)
CLASS B Shares sold 146,998 400,266 $ 2,274,654
Reinvestment of distributions 9,759 25,754 148,334
Shares redeemed (143,341) (165,340) (2,194,935)
Net increase (decrease) 13,416 260,680 $ 228,053
CLASS C Shares sold 47,031 138,656 $ 733,013
Reinvestment of distributions 2,694 6,196 40,997
Shares redeemed (49,385) (67,731) (768,770)
Net increase (decrease) 340 77,121 $ 5,240
INSTITUTIONAL CLASS Shares 10,002 257,491 $ 155,502
sold
Reinvestment of distributions 4,958 21,083 77,138
Shares redeemed (127,737) (222,900) (1,956,059)
Net increase (decrease) (112,777) 55,674 $ (1,723,419)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 1,782,025
Reinvestment of distributions 119,873
Shares redeemed (794,506)
Net increase (decrease) $ 1,107,392
CLASS T Shares sold $ 12,781,566
Reinvestment of distributions 728,776
Shares redeemed (6,990,735)
Net increase (decrease) $ 6,519,607
CLASS B Shares sold $ 5,949,947
Reinvestment of distributions 314,459
Shares redeemed (2,389,462)
Net increase (decrease) $ 3,874,944
CLASS C Shares sold $ 2,101,382
Reinvestment of distributions 75,712
Shares redeemed (994,371)
Net increase (decrease) $ 1,182,723
INSTITUTIONAL CLASS Shares $ 3,899,578
sold
Reinvestment of distributions 260,589
Shares redeemed (3,186,126)
Net increase (decrease) $ 974,041
</TABLE>
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS A
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996 2000
FIDELITY ADV CYCLICAL - CL A -7.11% 4.00% 51.86%
FIDELITY ADV CYCLICAL - CL A -12.45% -1.98% 43.13%
(INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Cyclical Industries -10.93% -3.26% 38.24%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Cyclical Industries Index - a market
capitalization-weighted index of 246 stocks designed to measure the
performance of companies in the cyclical industries sector. Issues in
the index include providers of consumer and commercial goods and
services where performance is influenced by the cyclicality of
economy, such as: manufacturers of automobiles and companies involved
with construction of residential and commercial properties, producers
of chemicals, electrical equipment and components, and providers of
environmental services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996 2000
FIDELITY ADV CYCLICAL - CL A 4.00% 13.03%
FIDELITY ADV CYCLICAL - CL A -1.98% 11.09%
(INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Cyclical Industries -3.26% 9.96%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Cyclical Ind -CL A S&P 500 GS Cyclical Industries
00184 SP001 GS003
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 9783.15 10516.69 10449.51
1996/10/31 10065.90 10806.74 10623.81
1996/11/30 10669.10 11623.62 11299.86
1996/12/31 10612.70 11393.36 11101.84
1997/01/31 10888.23 12105.21 11459.45
1997/02/28 10916.74 12200.12 11487.29
1997/03/31 10584.20 11698.81 11120.08
1997/04/30 10745.72 12397.23 11654.84
1997/05/31 11638.82 13151.98 12461.54
1997/06/30 12246.89 13741.19 12959.26
1997/07/31 13111.49 14834.57 13980.32
1997/08/31 12826.45 14003.54 13471.60
1997/09/30 13135.80 14770.51 13938.94
1997/10/31 12290.57 14277.18 13095.58
1997/11/30 12499.40 14938.07 13453.87
1997/12/31 12592.62 15194.56 13598.24
1998/01/31 12859.24 15362.61 13598.41
1998/02/28 13874.44 16470.56 14714.19
1998/03/31 14561.50 17314.02 15518.24
1998/04/30 14756.33 17488.19 15588.62
1998/05/31 14530.73 17187.57 15359.18
1998/06/30 14592.26 17885.73 15161.59
1998/07/31 13905.20 17695.25 14328.86
1998/08/31 11792.76 15136.87 12063.57
1998/09/30 11875.60 16106.54 12434.95
1998/10/31 12998.82 17416.64 13538.58
1998/11/30 13413.21 18472.27 14155.28
1998/12/31 13991.18 19536.64 14242.33
1999/01/31 13762.18 20353.66 14290.54
1999/02/28 13424.12 19721.07 14008.83
1999/03/31 13565.89 20510.11 14191.98
1999/04/30 15408.84 21304.46 16333.87
1999/05/31 15158.02 20801.47 15712.77
1999/06/30 15735.99 21955.95 16252.48
1999/07/31 15408.84 21270.48 15520.45
1999/08/31 15125.31 21165.19 15169.89
1999/09/30 14708.36 20585.06 14547.14
1999/10/31 15069.51 21887.68 14604.43
1999/11/30 14620.81 22332.66 14151.81
1999/12/31 15781.09 23648.05 15031.88
2000/01/31 14313.08 22459.97 13824.02
IMATRL PRASUN SHR__CHT 20000131 20000216 143116 R00000000000044
</TABLE>
$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 5.75% sales
charge was paid. As the chart shows, by January 31, 2000, the value of
the investment would have grown to $14,313 - a 43.13% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Cyclical Industries Index, it would have grown to $13,824 - a
38.24% increase.
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS T
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996 2000
FIDELITY ADV CYCLICAL - CL T -7.28% 3.70% 50.73%
FIDELITY ADV CYCLICAL - CL T -10.52% 0.07% 45.45%
(INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Cyclical Industries -10.93% -3.26% 38.24%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Cyclical Industries Index - a market
capitalization-weighted index of 246 stocks designed to measure the
performance of companies in the cyclical industries sector. Issues in
the index include providers of consumer and commercial goods and
services where performance is influenced by the cyclicality of
economy, such as: manufacturers of automobiles and companies involved
with construction of residential and commercial properties, producers
of chemicals, electrical equipment and components, and providers of
environmental services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996 2000
FIDELITY ADV CYCLICAL - CL T 3.70% 12.78%
FIDELITY ADV CYCLICAL - CL T 0.07% 11.61%
(INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Cyclical Industries -3.26% 9.96%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Cyclical Ind -CL T S&P 500 GS Cyclical Industries
00194 SP001 GS003
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 10016.70 10516.69 10449.51
1996/10/31 10306.20 10806.74 10623.81
1996/11/30 10923.80 11623.62 11299.86
1996/12/31 10846.68 11393.36 11101.84
1997/01/31 11138.52 12105.21 11459.45
1997/02/28 11167.70 12200.12 11487.29
1997/03/31 10817.49 11698.81 11120.08
1997/04/30 10982.87 12397.23 11654.84
1997/05/31 11897.30 13151.98 12461.54
1997/06/30 12519.89 13741.19 12959.26
1997/07/31 13395.40 14834.57 13980.32
1997/08/31 13103.57 14003.54 13471.60
1997/09/30 13410.13 14770.51 13938.94
1997/10/31 12554.81 14277.18 13095.58
1997/11/30 12768.64 14938.07 13453.87
1997/12/31 12864.11 15194.56 13598.24
1998/01/31 13137.15 15362.61 13598.41
1998/02/28 14166.28 16470.56 14714.19
1998/03/31 14859.36 17314.02 15518.24
1998/04/30 15058.89 17488.19 15588.62
1998/05/31 14827.86 17187.57 15359.18
1998/06/30 14890.87 17885.73 15161.59
1998/07/31 14187.28 17695.25 14328.86
1998/08/31 12024.01 15136.87 12063.57
1998/09/30 12107.88 16106.54 12434.95
1998/10/31 13267.38 17416.64 13538.58
1998/11/30 13691.05 18472.27 14155.28
1998/12/31 14270.80 19536.64 14242.33
1999/01/31 14025.52 20353.66 14290.54
1999/02/28 13691.05 19721.07 14008.83
1999/03/31 13824.84 20510.11 14191.98
1999/04/30 15697.88 21304.46 16333.87
1999/05/31 15441.45 20801.47 15712.77
1999/06/30 16032.35 21955.95 16252.48
1999/07/31 15686.73 21270.48 15520.45
1999/08/31 15396.85 21165.19 15169.89
1999/09/30 14970.57 20585.06 14547.14
1999/10/31 15328.61 21887.68 14604.43
1999/11/30 14881.06 22332.66 14151.81
1999/12/31 16055.12 23648.05 15031.88
2000/01/31 14544.99 22459.97 13824.02
IMATRL PRASUN SHR__CHT 20000131 20000224 093928 R00000000000044
</TABLE>
$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 3.50% sales
charge was paid. As the chart shows, by January 31, 2000, the value of
the investment would have grown to $14,545 - a 45.45% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Cyclical Industries Index, it would have grown to $13,824 - a
38.24% increase.
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS B
PERFORMANCE
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
shares' 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 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CYCLICAL - CL B -7.44% 3.18% 48.51%
FIDELITY ADV CYCLICAL - CL B -11.99% -1.82% 45.51%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Cyclical Industries -10.93% -3.26% 38.24%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Cyclical Industries Index - a market
capitalization-weighted index of 246 stocks designed to measure the
performance of companies in the cyclical industries sector. Issues in
the index include providers of consumer and commercial goods and
services where performance is influenced by the cyclicality of
economy, such as: manufacturers of automobiles and companies involved
with construction of residential and commercial properties, producers
of chemicals, electrical equipment and components, and providers of
environmental services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CYCLICAL - CL B 3.18% 12.29%
FIDELITY ADV CYCLICAL - CL B -1.82% 11.62%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Cyclical Industries -3.26% 9.96%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Cyclical Ind -CL B S&P 500 GS Cyclical Industries
00234 SP001 GS003
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10380.00 10516.69 10449.51
1996/10/31 10680.00 10806.74 10623.81
1996/11/30 11320.00 11623.62 11299.86
1996/12/31 11240.08 11393.36 11101.84
1997/01/31 11542.50 12105.21 11459.45
1997/02/28 11572.75 12200.12 11487.29
1997/03/31 11209.84 11698.81 11120.08
1997/04/30 11381.21 12397.23 11654.84
1997/05/31 12318.73 13151.98 12461.54
1997/06/30 12953.82 13741.19 12959.26
1997/07/31 13861.09 14834.57 13980.32
1997/08/31 13548.58 14003.54 13471.60
1997/09/30 13866.28 14770.51 13938.94
1997/10/31 12958.74 14277.18 13095.58
1997/11/30 13169.80 14938.07 13453.87
1997/12/31 13268.76 15194.56 13598.24
1998/01/31 13540.88 15362.61 13598.41
1998/02/28 14596.72 16470.56 14714.19
1998/03/31 15304.25 17314.02 15518.24
1998/04/30 15511.06 17488.19 15588.62
1998/05/31 15260.71 17187.57 15359.18
1998/06/30 15315.13 17885.73 15161.59
1998/07/31 14585.84 17695.25 14328.86
1998/08/31 12354.42 15136.87 12063.57
1998/09/30 12441.29 16106.54 12434.95
1998/10/31 13619.57 17416.64 13538.58
1998/11/30 14035.44 18472.27 14155.28
1998/12/31 14636.13 19536.64 14242.33
1999/01/31 14393.54 20353.66 14290.54
1999/02/28 14035.44 19721.07 14008.83
1999/03/31 14174.06 20510.11 14191.98
1999/04/30 16080.10 21304.46 16333.87
1999/05/31 15814.41 20801.47 15712.77
1999/06/30 16403.55 21955.95 16252.48
1999/07/31 16045.45 21270.48 15520.45
1999/08/31 15745.10 21165.19 15169.89
1999/09/30 15303.38 20585.06 14547.14
1999/10/31 15674.37 21887.68 14604.43
1999/11/30 15199.04 22332.66 14151.81
1999/12/31 16391.66 23648.05 15031.88
2000/01/31 14551.00 22459.97 13824.02
IMATRL PRASUN SHR__CHT 20000131 20000216 143330 R00000000000044
</TABLE>
$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, 2000, the value of the investment, including the effect of
the contingent deferred sales charge, would have grown to $14,551 - a
45.51% increase on the initial investment. For comparison, look at how
the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Cyclical Industries Index,
it would have grown to $13,824 - a 38.24% increase.
ADVISOR CYCLICAL INDUSTRIES FUND - CLASS C
PERFORMANCE
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 shares' 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 JANUARY 31, 2000 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV CYCLICAL - CL C -7.50% 3.10% 48.28%
FIDELITY ADV CYCLICAL - CL C -8.41% 2.10% 48.28%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Cyclical Industries -10.93% -3.26% 38.24%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to the performance of both the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Cyclical Industries Index - a market
capitalization-weighted index of 246 stocks designed to measure the
performance of companies in the cyclical industries sector. Issues in
the index include providers of consumer and commercial goods and
services where performance is influenced by the cyclicality of
economy, such as: manufacturers of automobiles and companies involved
with construction of residential and commercial properties, producers
of chemicals, electrical equipment and components, and providers of
environmental services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CYCLICAL - CL C 3.10% 12.24%
FIDELITY ADV CYCLICAL - CL C 2.10% 12.24%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Cyclical Industries -3.26% 9.96%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Cyclical Ind -CL C S&P 500 GS Cyclical Industries
00283 SP001 GS003
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10380.00 10516.69 10449.51
1996/10/31 10680.00 10806.74 10623.81
1996/11/30 11320.00 11623.62 11299.86
1996/12/31 11240.08 11393.36 11101.84
1997/01/31 11542.50 12105.21 11459.45
1997/02/28 11572.75 12200.12 11487.29
1997/03/31 11209.84 11698.81 11120.08
1997/04/30 11381.21 12397.23 11654.84
1997/05/31 12318.73 13151.98 12461.54
1997/06/30 12953.82 13741.19 12959.26
1997/07/31 13861.09 14834.57 13980.32
1997/08/31 13548.58 14003.54 13471.60
1997/09/30 13866.28 14770.51 13938.94
1997/10/31 12958.74 14277.18 13095.58
1997/11/30 13169.84 14938.07 13453.87
1997/12/31 13257.55 15194.56 13598.24
1998/01/31 13528.55 15362.61 13598.41
1998/02/28 14590.89 16470.56 14714.19
1998/03/31 15295.51 17314.02 15518.24
1998/04/30 15501.47 17488.19 15588.62
1998/05/31 15252.14 17187.57 15359.18
1998/06/30 15306.35 17885.73 15161.59
1998/07/31 14580.05 17695.25 14328.86
1998/08/31 12357.81 15136.87 12063.57
1998/09/30 12433.79 16106.54 12434.95
1998/10/31 13609.18 17416.64 13538.58
1998/11/30 14035.55 18472.27 14155.28
1998/12/31 14623.24 19536.64 14242.33
1999/01/31 14381.25 20353.66 14290.54
1999/02/28 14024.02 19721.07 14008.83
1999/03/31 14162.30 20510.11 14191.98
1999/04/30 16063.67 21304.46 16333.87
1999/05/31 15798.63 20801.47 15712.77
1999/06/30 16386.33 21955.95 16252.48
1999/07/31 16029.10 21270.48 15520.45
1999/08/31 15729.49 21165.19 15169.89
1999/09/30 15288.86 20585.06 14547.14
1999/10/31 15647.37 21887.68 14604.43
1999/11/30 15173.21 22332.66 14151.81
1999/12/31 16373.52 23648.05 15031.88
2000/01/31 14827.53 22459.97 13824.02
IMATRL PRASUN SHR__CHT 20000131 20000216 143329 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$14,828 - a 48.28% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Cyclical Industries Index,
it would have grown to $13,824 - a 38.24% increase.
ADVISOR CYCLICAL INDUSTRIES FUND
FUND TALK: THE MANAGERS' OVERVIEW
(photographs of Albert Ruback and Brian Hogan)
NOTE TO SHAREHOLDERS: The following is an interview with Albert Ruback
(left), who managed Fidelity Advisor Cyclical Industries Fund during
the period covered by this report, with additional comments from Brian
Hogan, who became manager of the fund on February 1, 2000.
Q. HOW DID THE FUND PERFORM, ALBERT?
A. For the six months that ended January 31, 2000, the fund's Class
A, Class T, Class B and Class C shares returned -7.11%, -7.28%, -7.44%
and -7.50%, respectively. For the same six-month period, the Goldman
Sachs Cyclical Industries Index - an index of 246 stocks designed to
measure the performance of companies in the cyclical industries sector
- - returned -10.93%, while the Standard & Poor's 500 Index returned
5.59%. For the 12 months that ended January 31, 2000, the fund's Class
A, Class T, Class B and Class C shares returned 4.00%, 3.70%, 3.18%
and 3.10%, respectively, while the Goldman Sachs Cyclical Industries
Index returned -3.26%. The S&P 500 returned 10.35% over the same
twelve months.
Q. WHAT FACTORS DROVE CYCLICAL INDUSTRY STOCK PERFORMANCE DURING THE
PERIOD?
A.R. Overall, cyclical stocks were out of favor during the past six
months. Investors favored stocks with high revenue growth expectations
- - such as technology and communication stocks - at the expense of
stocks providing solid earnings growth with less spectacular revenue
gains. These conditions created obstacles for investors in many of the
well-managed industrial companies comprising the cyclical industries
group. Rising interest rates further complicated the investment
environment because cyclical stock price performance is closely linked
with investors' expectations about the economy's strength, and rising
interest rates typically suggest that economic growth may slow down.
Q. WHAT STRATEGY DID YOU USE TO OUTPERFORM THE GOLDMAN SACHS INDEX IN
THIS CHALLENGING ENVIRONMENT?
A.R. Although market sentiment was relatively unfavorable for the
cyclical sector, the fund substantially outperformed the Goldman Sachs
index by virtue of strong stock selection across a variety of cyclical
subsectors. I emphasized well-managed companies with dominant market
positions that adapted their business models to participate in the
evolving e-commerce environment. For example, companies such as
General Electric made sizable, early investments in Internet
technology and now are well-positioned to increase market share,
revenue growth and earnings potential. In addition, the fund benefited
from not owning certain stocks for much of the period, including those
of automobile manufacturers. Rising interest rates forced automakers
to offer significant incentives to maintain sales volume, and this had
a negative effect on earnings growth and stock prices.
Q. WHICH STOCKS PERFORMED WELL FOR THE FUND?
A.R. I already mentioned General Electric, which is the fund's largest
holding. GE should benefit from its early investment in web site
development, as much of the site's content can lead to new marketing
opportunities and enhanced revenue growth. For example, within the
Power Division, utility managers can access GE's web site and evaluate
the relative performance of their GE turbines vis-a-vis those of their
competitors. Furthermore, the site alerts managers to products and
services that have the potential to increase operating efficiency, an
important feature in the deregulating utility sector. Boeing also did
well late in the period. Performance was driven by substantial
progress in inventory reduction and a bottoming order cycle that
combined with improving global economic conditions - particularly in
Asia - to suggest that order rates and fundamental operations should
begin to improve.
Q. WHICH STOCKS WERE DISAPPOINTING?
A.R. Six months ago, Honeywell, Textron and SPX Corp. were among the
fund's top performers, benefiting from a cyclical stock rally that
enhanced their earnings potential. However, these stocks fell short of
my expectations during the past six months as market sentiment shifted
toward stocks offering higher revenue growth. Despite strong
management teams, positive operating fundamentals and appealing
long-term earnings prospects, these companies operate in mature,
slow-growth industrial markets such as avionics and automotive
components.
Q. TURNING TO YOU, BRIAN, WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
B.H. Industrial activity levels - domestically and abroad - suggest a
positive business environment for many cyclical companies. I
anticipate focusing on companies where earnings are driven by
accelerating revenue growth rather than by cost cutting. More
specifically, I intend to highlight companies that have taken
advantage of the "new economy" by expanding their markets and business
opportunities. I also expect to de-emphasize interest-rate sensitive
consumer-oriented stocks - such as auto manufacturers and building
material companies - that tend to perform poorly in rising
interest-rate environments.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$8 million
MANAGER: Brian Hogan, since February 2000;
joined Fidelity in 1994
(checkmark)
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
General Electric Co. 9.4
General Motors Corp. 6.1
Boeing Co. 5.7
Honeywell International, Inc. 5.1
Tyco International Ltd. 4.3
E. I. du Pont de Nemours and 3.7
Co.
General Dynamics Corp. 3.0
Union Carbide Corp. 2.9
United Technologies Corp. 2.9
Minnesota Mining & 2.7
Manufacturing Co.
45.8
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Aerospace & Defense 18.2%
Autos, Tires, & Accessories 12.7%
Chemicals & Plastics 12.1%
Electrical Equipment 11.1%
Electronics 4.3%
All Others* 41.6%
Row: 1, Col: 1, Value: 17.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 12.7
Row: 1, Col: 4, Value: 12.1
Row: 1, Col: 5, Value: 11.1
Row: 1, Col: 6, Value: 4.3
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 42.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 94.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 18.2%
Alliant Techsystems, Inc. (a) 200 $ 12,975
BFGoodrich Co. 700 17,500
Boeing Co. 11,000 487,438
Bombardier, Inc. Class B 1,900 38,517
Cordant Technologies, Inc. 1,000 33,063
Honeywell International, Inc. 9,112 437,376
Howmet International, Inc. (a) 1,000 18,375
Lockheed Martin Corp. 1,614 30,263
Rockwell International Corp. 1,200 59,325
Textron, Inc. 3,000 179,063
United Technologies Corp. 4,611 244,095
1,557,990
AIR TRANSPORTATION - 3.2%
America West Holding Corp. 1,200 21,450
Class B (a)
AMR Corp. (a) 4,100 220,631
Atlantic Coast Airlines 100 1,806
Holdings, Inc. (a)
Northwest Airlines Corp. 350 7,066
Class A (a)
Southwest Airlines Co. 1,725 27,492
278,445
AUTOS, TIRES, & ACCESSORIES -
12.7%
Danaher Corp. 650 28,031
Delphi Automotive Systems 2,500 43,281
Corp.
Federal-Mogul Corp. 50 756
Ford Motor Co. 3,700 184,075
General Motors Corp. 6,450 518,822
Johnson Controls, Inc. 500 27,625
Navistar International Corp. 1,500 58,969
(a)
SPX Corp. (a) 3,000 222,000
1,083,559
BUILDING MATERIALS - 3.2%
American Standard Companies, 3,000 112,500
Inc. (a)
Ferro Corp. 900 17,550
Fortune Brands, Inc. 800 23,200
Lafarge Corp. 1,100 26,538
Masco Corp. 2,900 57,819
Omnova Solutions, Inc. 2,900 21,750
Owens Corning 700 11,244
USG Corp. 200 7,525
278,126
CHEMICALS & PLASTICS - 12.0%
Air Products & Chemicals, 1,400 41,475
Inc.
Avery Dennison Corp. 1,000 67,750
CK Witco Corp. 1,293 15,435
E. I. du Pont de Nemours and 5,360 316,240
Co.
Engelhard Corp. 1,000 15,938
Potash Corp. of Saskatchewan 400 20,825
SHARES VALUE (NOTE 1)
Praxair, Inc. 3,700 $ 150,081
Rohm & Haas Co. 2,000 84,500
Sealed Air Corp. (a) 760 42,655
Solutia, Inc. 460 6,325
Spartech Corp. 800 20,500
Union Carbide Corp. 4,400 246,400
1,028,124
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 100 2,900
COMPUTER SERVICES & SOFTWARE
- - 1.6%
Litton Industries, Inc. (a) 3,200 135,800
COMPUTERS & OFFICE EQUIPMENT
- - 0.4%
Pitney Bowes, Inc. 700 34,300
CONSTRUCTION - 0.4%
Centex Corp. 500 11,000
Kaufman & Broad Home Corp. 600 13,013
Lennar Corp. 600 9,563
Oakwood Homes Corp. 700 1,925
35,501
CONSUMER DURABLES - 2.7%
Minnesota Mining & 2,500 234,063
Manufacturing Co.
CONSUMER ELECTRONICS - 1.0%
Black & Decker Corp. 700 28,044
General Motors Corp. Class H 500 56,250
(a)
84,294
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 100 1,400
ELECTRICAL EQUIPMENT - 11.1%
Emerson Electric Co. 2,500 137,656
General Electric Co. 6,000 800,241
Hubbell, Inc. Class B 500 12,969
950,866
ELECTRONIC INSTRUMENTS - 0.0%
Sequenom, Inc. 100 2,600
ELECTRONICS - 4.3%
Quantum Effect Devices, Inc. 100 1,600
Tyco International Ltd. 8,500 363,375
364,975
ENGINEERING - 3.3%
Fluor Corp. 2,200 87,863
PerkinElmer, Inc. 3,900 195,244
283,107
HOME FURNISHINGS - 0.3%
Leggett & Platt, Inc. 1,300 23,400
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.2%
Caterpillar, Inc. 2,000 $ 84,875
Deere & Co. 100 4,369
Illinois Tool Works, Inc. 2,200 128,700
Ingersoll-Rand Co. 2,200 103,538
Parker-Hannifin Corp. 800 34,600
356,082
IRON & STEEL - 0.5%
Bethlehem Steel Corp. (a) 4,100 27,931
USX - U.S. Steel Group 500 12,438
40,369
LEASING & RENTAL - 0.1%
Ryder System, Inc. 250 5,516
METALS & MINING - 1.9%
Alcoa, Inc. 1,770 123,347
Inco Ltd. (a) 500 9,444
Martin Marietta Materials, 774 32,508
Inc.
165,299
PACKAGING & CONTAINERS - 1.2%
Ball Corp. 700 25,463
Bemis Co., Inc. 1,000 31,563
Owens-Illinois, Inc. (a) 2,200 40,288
Silgan Holdings, Inc. (a) 700 9,450
106,764
PAPER & FOREST PRODUCTS - 3.7%
Bowater, Inc. 1,300 67,194
Champion International Corp. 900 52,650
Fort James Corp. 800 21,400
International Paper Co. 1,542 73,438
Smurfit-Stone Container Corp. 5,056 100,172
(a)
314,854
POLLUTION CONTROL - 0.4%
Ogden Corp. 1,900 21,494
Republic Services, Inc. Class 800 9,400
A (a)
30,894
RAILROADS - 2.9%
Burlington Northern Santa Fe 3,700 89,031
Corp.
Canadian Pacific Ltd. 4,000 85,792
CSX Corp. 950 27,788
Union Pacific Corp. 1,100 44,000
246,611
SHARES VALUE (NOTE 1)
SERVICES - 0.8%
Ecolab, Inc. 2,000 $ 70,375
SHIP BUILDING & REPAIR - 3.0%
General Dynamics Corp. 5,400 254,475
TEXTILES & APPAREL - 0.5%
Shaw Industries, Inc. 2,500 33,906
Unifi, Inc. (a) 500 5,531
39,437
TRUCKING & FREIGHT - 0.9%
Expeditors International of 800 33,725
Washington, Inc.
United Parcel Service, Inc. 600 35,700
Class B
USFreightways Corp. 200 7,275
76,700
TOTAL COMMON STOCKS 8,086,826
(Cost $8,114,198)
CONVERTIBLE PREFERRED STOCKS
- - 0.1%
CHEMICALS & PLASTICS - 0.1%
Sealed Air Corp. Series A, 142 7,562
$2.00 (Cost $6,266)
CASH EQUIVALENTS - 7.0%
Taxable Central Cash Fund, 600,013 600,013
5.45% (b) (Cost $600,013)
TOTAL INVESTMENT PORTFOLIO - 8,694,401
101.6% (Cost $8,720,477)
NET OTHER ASSETS - (1.6)% (140,192)
NET ASSETS - 100% $ 8,554,209
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $8,746,843. Net unrealized depreciation
aggregated $52,442, of which $839,419 related to appreciated
investment securities and $891,861 related to depreciated investment
securities.
ADVISOR CYCLICAL INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 8,694,401
value (cost $8,720,477) -
See accompanying schedule
Receivable for investments 627,861
sold
Receivable for fund shares 3,963
sold
Dividends receivable 5,428
Interest receivable 1,657
Other receivables 711
Receivable from investment 3,767
adviser for expense
reductions
TOTAL ASSETS 9,337,788
LIABILITIES
Payable for investments $ 743,397
purchased
Payable for fund shares 14,289
redeemed
Distribution fees payable 3,831
Other payables and accrued 22,062
expenses
TOTAL LIABILITIES 783,579
NET ASSETS $ 8,554,209
Net Assets consist of:
Paid in capital $ 8,477,944
Accumulated net investment (20,213)
loss
Accumulated undistributed net 122,554
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation (26,076)
(depreciation) on investments
NET ASSETS $ 8,554,209
CALCULATION OF MAXIMUM $12.87
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($917,663 (divided by)
71,322 shares)
Maximum offering price per $13.66
share (100/94.25 of
$12.87)
CLASS T: NET ASSET VALUE $12.81
and redemption price per
share ($2,752,031 (divided
by) 214,799 shares)
Maximum offering price per $13.27
share (100/96.50 of
$12.81)
CLASS B: NET ASSET VALUE $12.63
and offering price per
share ($1,957,470 (divided
by) 155,009 shares) A
CLASS C: NET ASSET VALUE $12.66
and offering price per
share ($792,354 (divided by)
62,577 shares) A
INSTITUTIONAL CLASS: NET $13.01
ASSET VALUE, offering price
and redemption price per
share ($2,134,691
(divided by) 164,138 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 62,173
Dividends
Interest 10,094
Security lending 25
TOTAL INCOME 72,292
EXPENSES
Management fee $ 28,729
Transfer agent fees 16,070
Distribution fees 24,123
Accounting and security 30,111
lending fees
Non-interested trustees' 19
compensation
Custodian fees and expenses 2,456
Registration fees 51,624
Audit 12,840
Legal 63
Miscellaneous 53
Total expenses before 166,088
reductions
Expense reductions (79,650) 86,438
NET INVESTMENT INCOME (LOSS) (14,146)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 268,034
Foreign currency transactions 170 268,204
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (980,908)
Assets and liabilities in 2 (980,906)
foreign currencies
NET GAIN (LOSS) (712,702)
NET INCREASE (DECREASE) IN $ (726,848)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (14,146) $ (11,063)
income (loss)
Net realized gain (loss) 268,204 28,779
Change in net unrealized (980,906) 563,364
appreciation (depreciation)
NET INCREASE (DECREASE) IN (726,848) 581,080
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to (6,067) -
shareholders In excess of
net investment income
From net realized gain (172,028) (287,985)
TOTAL DISTRIBUTIONS (178,095) (287,985)
Share transactions - net (1,779,960) 4,985,782
increase (decrease)
Redemption fees 852 6,625
TOTAL INCREASE (DECREASE) (2,684,051) 5,285,502
IN NET ASSETS
NET ASSETS
Beginning of period 11,238,260 5,952,758
End of period (including $ 8,554,209 $ 11,238,260
accumulated net investment
loss of $20,213 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 14.13 $ 13.56 $ 13.80 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.00) .01 (.03) (.01)
Net realized and unrealized (.99) 1.23 .76 3.89
gain (loss)
Total from investment (.99) 1.24 .73 3.88
operations
Less Distributions
From net investment income - - - (.01)
In excess of net investment (.01) - - -
income
From net realized gain (.26) (.68) (.99) (.08)
Total distributions (.27) (.68) (.99) (.09)
Redemption fees added to paid .00 .01 .02 .01
in capital
Net asset value, end of period $ 12.87 $ 14.13 $ 13.56 $ 13.80
TOTAL RETURN B, C (7.11)% 10.81% 6.05% 39.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 918 $ 896 $ 471 $ 365
(000 omitted)
Ratio of expenses to average 1.50% A, F 1.56% F 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.50% A 1.54% G 1.75% 1.73% A, G
net assets after expense
reductions
Ratio of net investment (.05)% A .05% (.22)% (.09)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 14.07 $ 13.51 $ 13.77 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.03) (.06) (.04)
Net realized and unrealized (.99) 1.24 .77 3.89
gain (loss)
Total from investment (1.01) 1.21 .71 3.85
operations
Less Distributions
From net investment income - - - (.01)
From net realized gain (.25) (.66) (.99) (.08)
Total distributions (.25) (.66) (.99) (.09)
Redemption fees added to paid .00 .01 .02 .01
in capital
Net asset value, end of period $ 12.81 $ 14.07 $ 13.51 $ 13.77
TOTAL RETURN B, C (7.28)% 10.57% 5.91% 38.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,752 $ 3,471 $ 2,973 $ 1,920
(000 omitted)
Ratio of expenses to average 1.75% A, F 1.83% F 2.00% F 2.00% A, F
net assets
Ratio of expenses to average 1.75% A 1.81% G 2.00% 1.97% A, G
net assets after expense
reductions
Ratio of net investment (.30)% A (.22)% (.47)% (.37)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 13.89 $ 13.40 $ 13.75 $ 11.56
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.09) (.14) (.06)
Net realized and unrealized (.97) 1.22 .76 2.25
gain (loss)
Total from investment (1.02) 1.13 .62 2.19
operations
Less Distributions
From net realized gain (.24) (.65) (.99) -
Redemption fees added to paid .00 .01 .02 -
in capital
Net asset value, end of period $ 12.63 $ 13.89 $ 13.40 $ 13.75
TOTAL RETURN B, C (7.44)% 10.01% 5.23% 18.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,957 $ 2,043 $ 985 $ 252
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.31% F 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.25% A 2.29% G 2.50% 2.45% A, G
net assets after expense
reductions
Ratio of net investment (.80)% A (.70)% (1.03)% (1.11)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 13.91 $ 13.45 $ 12.54
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.09) (.11)
Net realized and unrealized (.98) 1.20 1.39
gain (loss)
Total from investment (1.03) 1.11 1.28
operations
Less Distributions
From net realized gain (.22) (.67) (.38)
Redemption fees added to paid .00 .02 .01
in capital
Net asset value, end of period $ 12.66 $ 13.91 $ 13.45
TOTAL RETURN B, C (7.50)% 9.94% 10.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 792 $ 1,451 $ 165
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.28% F 2.50% A, F
net assets
Ratio of expenses to average 2.25% A 2.27% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.80)% A (.67)% (1.06)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100%
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 F
Net asset value, beginning of $ 14.28 $ 13.68 $ 13.84 $ 10.00
period
Income from Investment
Operations
Net investment income D .01 .04 .01 E .03
Net realized and unrealized (.99) 1.25 .75 3.91
gain (loss)
Total from investment (.98) 1.29 .76 3.94
operations
Less Distributions
From net investment income - - - (.02)
In excess of net investment (.03) - - -
income
From net realized gain (.26) (.70) (.95) (.08)
Total distributions (.29) (.70) (.95) (.10)
Redemption fees added to paid .00 .01 .03 -
in capital
Net asset value, end of period $ 13.01 $ 14.28 $ 13.68 $ 13.84
TOTAL RETURN B, C (6.97)% 11.15% 6.32% 39.64%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,135 $ 3,377 $ 1,360 $ 1,756
(000 omitted)
Ratio of expenses to average 1.25% A, G 1.31% G 1.50% G 1.50% A, G
net assets
Ratio of expenses to average 1.25% A 1.29% H 1.50% 1.48% A, H
net assets after expense
reductions
Ratio of net investment .20% A .31% .04% .25% A
income to average net assets
Portfolio turnover 67% A 115% 100% 155% A
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 DURING THE PERIOD, A
SIGNIFICANT SHAREHOLDER
REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL OF
INVESTMENT INCOME PER SHARE.
F FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE
OF INSTITUTIONAL CLASS
SHARES) TO JULY 31, 1997.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,180,488 and $4,768,115, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,203 $ 200
CLASS T 7,788 355
CLASS B 9,841 7,536
CLASS C 5,291 4,211
$ 24,123 $ 12,302
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,925 $ 1,087
CLASS T 4,483 2,094
CLASS B 3,759 3,759 *
CLASS C 2,171 2,171 *
$ 12,338 $ 9,111
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 1,789 .37 *
CLASS T 5,617 .36 *
CLASS B 3,623 .37 *
CLASS C 1,867 .35 *
INSTITUTIONAL CLASS 3,174 .22 *
$ 16,070
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $187 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end there were no loans
outstanding.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) above the following
annual rates or range of annual rates of average net assets for each
of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.50% $ 7,942
CLASS T 1.75% 25,510
CLASS B 2.25% 16,166
CLASS C 2.25% 8,614
INSTITUTIONAL CLASS 1.25% 21,256
$ 79,488
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 $162 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
approximately 18% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 805 $ -
Institutional Class 5,262 -
Total $ 6,067 $ -
FROM NET REALIZED GAIN
Class A $ 20,078 $ 23,684
Class T 54,397 144,300
Class B 34,806 41,003
Class C 14,419 9,726
Institutional Class 48,328 69,272
Total $ 172,028 $ 287,985
$ 178,095 $ 287,985
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 37,470 $ 378,674
28,028
Reinvestment of distributions 1,425 2,196 19,437
Shares redeemed (21,517) (11,006) (293,433)
Net increase (decrease) 7,936 28,660 $ 104,678
CLASS T Shares sold 30,509 149,470 $ 419,053
Reinvestment of distributions 3,842 13,134 52,336
Shares redeemed (66,275) (135,949) (911,212)
Net increase (decrease) (31,924) 26,655 $ (439,823)
CLASS B Shares sold 51,366 121,052 $ 699,004
Reinvestment of distributions 1,960 3,632 26,344
Shares redeemed (45,413) (51,075) (617,694)
Net increase (decrease) 7,913 73,609 $ 107,654
CLASS C Shares sold 18,871 106,908 $ 258,091
Reinvestment of distributions 650 915 8,758
Shares redeemed (61,305) (15,704) (824,943)
Net increase (decrease) (41,784) 92,119 $ (558,094)
INSTITUTIONAL CLASS Shares 12,901 145,280 $ 178,799
sold
Reinvestment of distributions 2,497 6,212 34,539
Shares redeemed (87,800) (14,316) (1,207,713)
Net increase (decrease) (72,402) 137,176 $ (994,375)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 504,717
Reinvestment of distributions 23,537
Shares redeemed (149,922)
Net increase (decrease) $ 378,332
CLASS T Shares sold $ 2,008,694
Reinvestment of distributions 140,529
Shares redeemed (1,711,581)
Net increase (decrease) $ 437,642
CLASS B Shares sold $ 1,640,891
Reinvestment of distributions 38,541
Shares redeemed (651,249)
Net increase (decrease) $ 1,028,183
CLASS C Shares sold $ 1,480,405
Reinvestment of distributions 9,726
Shares redeemed (201,951)
Net increase (decrease) $ 1,288,180
INSTITUTIONAL CLASS Shares $ 1,976,046
sold
Reinvestment of distributions 67,155
Shares redeemed (189,756)
Net increase (decrease) $ 1,853,445
</TABLE>
ADVISOR FINANCIAL SERVICES FUND - CLASS A
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL A -7.00% -4.04% 79.03%
FIDELITY ADV FINANCIAL - CL A -12.35% -9.56% 68.74%
(INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Financial Services -7.90% -5.46% 87.19%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Financial Services Index - a market
capitalization-weighted index of 251 stocks designed to measure the
performance of companies in the financial services sector. Issues in
the index include financial institutions providing banking services,
brokerage firms and asset managers, insurance companies, and real
estate holding and development companies. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL A -4.04% 18.62%
FIDELITY ADV FINANCIAL - CL A -9.56% 16.58%
(INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Financial Services -5.46% 20.18%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Financial Serv -CL A S&P 500 GS Financial Services
00183 SP001 GS004
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 10009.35 10516.69 10584.56
1996/10/31 10546.58 10806.74 11272.70
1996/11/30 11385.40 11623.62 12278.35
1996/12/31 11045.81 11393.36 12100.98
1997/01/31 11631.15 12105.21 12935.63
1997/02/28 11772.76 12200.12 13395.32
1997/03/31 10932.52 11698.81 12504.96
1997/04/30 11829.41 12397.23 13328.32
1997/05/31 12282.57 13151.98 14040.84
1997/06/30 12915.11 13741.19 14892.68
1997/07/31 14265.15 14834.57 16504.52
1997/08/31 13424.91 14003.54 15483.68
1997/09/30 14285.27 14770.51 16744.42
1997/10/31 14200.07 14277.18 16445.06
1997/11/30 14673.41 14938.07 17053.65
1997/12/31 15481.66 15194.56 17997.81
1998/01/31 15279.73 15362.61 17523.74
1998/02/28 16558.64 16470.56 19045.66
1998/03/31 17501.01 17314.02 20165.67
1998/04/30 17760.64 17488.19 20512.24
1998/05/31 17376.00 17187.57 20061.46
1998/06/30 18077.96 17885.73 20758.18
1998/07/31 18020.27 17695.25 20510.80
1998/08/31 14058.50 15136.87 16002.19
1998/09/30 14534.20 16106.54 16320.87
1998/10/31 15882.84 17416.64 18092.98
1998/11/30 16816.51 18472.27 19193.75
1998/12/31 17272.97 19536.64 19625.39
1999/01/31 17584.20 20353.66 19800.64
1999/02/28 17719.06 19721.07 19947.58
1999/03/31 18300.02 20510.11 20595.27
1999/04/30 19627.91 21304.46 22002.58
1999/05/31 18476.38 20801.47 20987.62
1999/06/30 19150.70 21955.95 21531.79
1999/07/31 18144.40 21270.48 20324.07
1999/08/31 17293.72 21165.19 19310.55
1999/09/30 16633.77 20585.06 18183.14
1999/10/31 18928.08 21887.68 20791.31
1999/11/30 17999.93 22332.66 19832.83
1999/12/31 17634.92 23648.05 19441.02
2000/01/31 16873.63 22459.97 18719.07
IMATRL PRASUN SHR__CHT 20000131 20000216 143519 R00000000000044
</TABLE>
$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 5.75% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $16,874 - a 68.74% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Financial Services Index, it would have grown to $18,719 - an
87.19% increase.
ADVISOR FINANCIAL SERVICES FUND - CLASS T
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL T -7.13% -4.28% 77.50%
FIDELITY ADV FINANCIAL - CL T -10.38% -7.63% 71.29%
(INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Financial Services -7.90% -5.46% 87.19%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Financial Services Index - a market
capitalization-weighted index of 251 stocks designed to measure the
performance of companies in the financial services sector. Issues in
the index include financial institutions providing banking services,
brokerage firms and asset managers, insurance companies, and real
estate holding and development companies. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL T -4.28% 18.32%
FIDELITY ADV FINANCIAL - CL T -7.63% 17.09%
(INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Financial Services -5.46% 20.18%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Financial Serv -CL T S&P 500 GS Financial Services
00193 SP001 GS004
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 10238.65 10516.69 10584.56
1996/10/31 10788.70 10806.74 11272.70
1996/11/30 11647.55 11623.62 12278.35
1996/12/31 11299.87 11393.36 12100.98
1997/01/31 11889.52 12105.21 12935.63
1997/02/28 12024.84 12200.12 13395.32
1997/03/31 11164.55 11698.81 12504.96
1997/04/30 12082.84 12397.23 13328.32
1997/05/31 12546.82 13151.98 14040.84
1997/06/30 13184.80 13741.19 14892.68
1997/07/31 14567.07 14834.57 16504.52
1997/08/31 13706.78 14003.54 15483.68
1997/09/30 14587.38 14770.51 16744.42
1997/10/31 14500.21 14277.18 16445.06
1997/11/30 14974.83 14938.07 17053.65
1997/12/31 15791.84 15194.56 17997.81
1998/01/31 15585.35 15362.61 17523.74
1998/02/28 16893.14 16470.56 19045.66
1998/03/31 17846.95 17314.02 20165.67
1998/04/30 18112.44 17488.19 20512.24
1998/05/31 17719.12 17187.57 20061.46
1998/06/30 18427.10 17885.73 20758.18
1998/07/31 18348.43 17695.25 20510.80
1998/08/31 14316.89 15136.87 16002.19
1998/09/30 14813.03 16106.54 16320.87
1998/10/31 16168.33 17416.64 18092.98
1998/11/30 17110.69 18472.27 19193.75
1998/12/31 17576.58 19536.64 19625.39
1999/01/31 17894.23 20353.66 19800.64
1999/02/28 18031.87 19721.07 19947.58
1999/03/31 18603.64 20510.11 20595.27
1999/04/30 19958.94 21304.46 22002.58
1999/05/31 18783.64 20801.47 20987.62
1999/06/30 19461.29 21955.95 21531.79
1999/07/31 18444.82 21270.48 20324.07
1999/08/31 17576.58 21165.19 19310.55
1999/09/30 16905.89 20585.06 18183.14
1999/10/31 19231.51 21887.68 20791.31
1999/11/30 18286.39 22332.66 19832.83
1999/12/31 17904.10 23648.05 19441.02
2000/01/31 17128.89 22459.97 18719.07
IMATRL PRASUN SHR__CHT 20000131 20000224 100140 R00000000000044
</TABLE>
$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 3.50% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $17,129 - a 71.29% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Financial Services Index, it would have grown to $18,719 - an
87.19% increase.
ADVISOR FINANCIAL SERVICES FUND - CLASS B
PERFORMANCE
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
shares' 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 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL B -7.38% -4.78% 74.91%
FIDELITY ADV FINANCIAL - CL B -12.01% -9.54% 71.91%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Financial Services -7.90% -5.46% 87.19%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Financial Services Index - a market
capitalization-weighted index of 251 stocks designed to measure the
performance of companies in the financial services sector. Issues in
the index include financial institutions providing banking services,
brokerage firms and asset managers, insurance companies, and real
estate holding and development companies. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL B -4.78% 17.81%
FIDELITY ADV FINANCIAL - CL B -9.54% 17.22%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Financial Services -5.46% 20.18%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(checkmark)
$10,000 OVER LIFE OF FUND
FA Financial Serv -CL B S&P 500 GS Financial Services
00163 SP001 GS004
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10610.00 10516.69 10584.56
1996/10/31 11180.00 10806.74 11272.70
1996/11/30 12070.00 11623.62 12278.35
1996/12/31 11709.71 11393.36 12100.98
1997/01/31 12320.74 12105.21 12935.63
1997/02/28 12460.98 12200.12 13395.32
1997/03/31 11569.48 11698.81 12504.96
1997/04/30 12511.06 12397.23 13328.32
1997/05/31 12991.87 13151.98 14040.84
1997/06/30 13642.97 13741.19 14892.68
1997/07/31 15065.36 14834.57 16504.52
1997/08/31 14173.86 14003.54 15483.68
1997/09/30 15067.02 14770.51 16744.42
1997/10/31 14976.56 14277.18 16445.06
1997/11/30 15459.02 14938.07 17053.65
1997/12/31 16306.56 15194.56 17997.81
1998/01/31 16072.16 15362.61 17523.74
1998/02/28 17417.45 16470.56 19045.66
1998/03/31 18385.65 17314.02 20165.67
1998/04/30 18650.63 17488.19 20512.24
1998/05/31 18242.97 17187.57 20061.46
1998/06/30 18956.38 17885.73 20758.18
1998/07/31 18874.85 17695.25 20510.80
1998/08/31 14716.67 15136.87 16002.19
1998/09/30 15219.88 16106.54 16320.87
1998/10/31 16624.45 17416.64 18092.98
1998/11/30 17579.13 18472.27 19193.75
1998/12/31 18050.98 19536.64 19625.39
1999/01/31 18369.20 20353.66 19800.64
1999/02/28 18500.88 19721.07 19947.58
1999/03/31 19082.46 20510.11 20595.27
1999/04/30 20454.11 21304.46 22002.58
1999/05/31 19258.03 20801.47 20987.62
1999/06/30 19938.37 21955.95 21531.79
1999/07/31 18884.94 21270.48 20324.07
1999/08/31 17985.14 21165.19 19310.55
1999/09/30 17293.82 20585.06 18183.14
1999/10/31 19664.04 21887.68 20791.31
1999/11/30 18687.42 22332.66 19832.83
1999/12/31 18292.39 23648.05 19441.02
2000/01/31 17191.00 22459.97 18719.07
IMATRL PRASUN SHR__CHT 20000131 20000216 143538 R00000000000044
</TABLE>
$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,
2000, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $17,191 - a
71.91% increase on the initial investment. For comparison, look at how
the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Financial Services Index, it
would have grown to $18,719 - an 87.19% increase.
ADVISOR FINANCIAL SERVICES FUND - CLASS C
PERFORMANCE
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 shares' 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 life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL C -7.37% -4.72% 74.74%
FIDELITY ADV FINANCIAL - CL C -8.30% -5.67% 74.74%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Financial Services -7.90% -5.46% 87.19%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Financial Services Index - a market
capitalization-weighted index of 251 stocks designed to measure the
performance of companies in the financial services sector. Issues in
the index include financial institutions providing banking services,
brokerage firms and asset managers, insurance companies, and real
estate holding and development companies. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - CL C -4.72% 17.78%
FIDELITY ADV FINANCIAL - CL C -5.67% 17.78%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Financial Services -5.46% 20.18%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Financial Serv -CL C S&P 500 GS Financial Services
00284 SP001 GS004
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10610.00 10516.69 10584.56
1996/10/31 11180.00 10806.74 11272.70
1996/11/30 12070.00 11623.62 12278.35
1996/12/31 11709.71 11393.36 12100.98
1997/01/31 12320.74 12105.21 12935.63
1997/02/28 12460.98 12200.12 13395.32
1997/03/31 11569.48 11698.81 12504.96
1997/04/30 12511.06 12397.23 13328.32
1997/05/31 12991.87 13151.98 14040.84
1997/06/30 13642.97 13741.19 14892.68
1997/07/31 15065.36 14834.57 16504.52
1997/08/31 14173.86 14003.54 15483.68
1997/09/30 15067.02 14770.51 16744.42
1997/10/31 14976.56 14277.18 16445.06
1997/11/30 15468.24 14938.07 17053.65
1997/12/31 16292.56 15194.56 17997.81
1998/01/31 16058.94 15362.61 17523.74
1998/02/28 17399.72 16470.56 19045.66
1998/03/31 18364.68 17314.02 20165.67
1998/04/30 18628.78 17488.19 20512.24
1998/05/31 18212.32 17187.57 20061.46
1998/06/30 18933.50 17885.73 20758.18
1998/07/31 18852.24 17695.25 20510.80
1998/08/31 14697.84 15136.87 16002.19
1998/09/30 15199.64 16106.54 16320.87
1998/10/31 16600.33 17416.64 18092.98
1998/11/30 17552.36 18472.27 19193.75
1998/12/31 18022.90 19536.64 19625.39
1999/01/31 18340.24 20353.66 19800.64
1999/02/28 18471.56 19721.07 19947.58
1999/03/31 19062.47 20510.11 20595.27
1999/04/30 20430.33 21304.46 22002.58
1999/05/31 19226.62 20801.47 20987.62
1999/06/30 19916.02 21955.95 21531.79
1999/07/31 18865.50 21270.48 20324.07
1999/08/31 17957.24 21165.19 19310.55
1999/09/30 17266.33 20585.06 18183.14
1999/10/31 19643.74 21887.68 20791.31
1999/11/30 18657.72 22332.66 19832.83
1999/12/31 18274.26 23648.05 19441.02
2000/01/31 17474.49 22459.97 18719.07
IMATRL PRASUN SHR__CHT 20000131 20000216 143712 R00000000000044
</TABLE>
$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,
2000, the value of the investment would have grown to $17,474 - a
74.74% increase on the initial investment. For comparison, look at how
the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Financial Services Index, it
would have grown to $18,719 - an 87.19% increase.
ADVISOR FINANCIAL SERVICES FUND
FUND TALK: THE MANAGERS' OVERVIEW
(photographs of Robert Ewing and James Catudal)
NOTE TO SHAREHOLDERS: The following is an interview with Robert Ewing
(left), who managed the Fidelity Advisor Financial Services Fund
during the period covered by this report, with additional comments
from James Catudal, who became manager of the fund on February 1,
2000.
Q. HOW DID THE FUND PERFORM, BOB?
A. During the six months that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares had total returns of
- -7.00%, -7.13%, -7.38% and -7.37%, respectively. During the same
period, the Goldman Sachs Financial Services Index, an index of 251
stocks designed to measure the performance of companies in the
financial services sector, had a return of -7.90%, while the Standard
& Poor's 500 Index returned 5.59%. For the 12-month period that ended
January 31, 2000, the fund's Class A, Class T, Class B and Class C
shares had total returns of -4.04%, -4.28%, -4.78% and -4.72%,
respectively, while the Goldman Sachs index returned -5.46% and the
S&P 500 index returned 10.35%.
Q. WHAT FACTORS AFFECTED PERFORMANCE DURING THE PERIOD?
R.E. It was a very challenging period for financial services stocks,
principally because interest rates were rising, which traditionally
undermines the value of these stocks. We consistently pursued three
investment themes: an emphasis on consumer-related companies; a
de-emphasis of regional banks; and an underweighting in property and
casualty companies. The strategy to overweight consumer companies
brought disappointing results, as higher interest rates hurt
mortgage-related and consumer credit firms. The decisions to
underweight regional banks and property and casualty insurers worked
well. Regional banks tend to be good investments early in economic
expansions, when their stocks are relatively inexpensive. This was not
the case early in the period. Moreover, as the difference between
short-term and long-term interest rates narrowed, banks lost some of
their ability to profit from the "spread" between interest rates. In
addition, competition facing regional banks intensified because of a
variety of factors, including the rising use of the Internet. Property
and casualty companies, especially those emphasizing consumer
businesses such as homeowners and automobile insurance, continued to
have difficulty because of intense price competition, including from
online competitors.
Q. WHAT WERE SOME OF THE CONTRIBUTORS TO PERFORMANCE?
R.E. Brokerages were big contributors. Major holdings such as Morgan
Stanley Dean Witter and Lehman Brothers were excellent performers,
helped by very active capital markets. U.S. brokerages also gained
business in Europe, where the capital markets were active. While most
consumer stocks were disappointing, an exception was American Express,
which benefited from heavy charge card usage and a rising number of
consumer accounts. Money center banks such as Citigroup and Chase
Manhattan performed better than most financial services stocks,
primarily because they benefited from capital markets activity.
Q. WHAT INVESTMENTS DISAPPOINTED YOU?
R.E. Associates First Capital, a consumer finance company, was very
disappointing. The company's earnings slipped as it spent money
building Internet operations and as delinquencies increased in home
equity loans and manufactured housing loans. Rising interest rates
also hurt mortgage-related stocks such as Freddie Mac and Fannie Mae,
even though their businesses remained fundamentally strong. Almost all
bank stocks were poor performers during the period.
Q. TURNING TO YOU, JIM, HOW WOULD YOU DESCRIBE YOUR INVESTMENT STYLE?
J.C. I look for companies with solid strategies and strong managements
who are able to execute those strategies. I prefer attractive stock
valuations, but I don't just buy cheap stocks. While I am a bottom-up
manager who looks for stocks of good companies, I recognize that it
can be difficult to invest in a company where the macroeconomic trends
are moving against it.
Q. WHAT IS YOUR OUTLOOK, JIM?
J.C. It is a tough and uncertain time for the financial services
industry, with the Federal Reserve Board raising short-term interest
rates and yields of 30-year Treasury bonds trading lower than 10-year
bonds. At the same time, many financial services companies offer
attractive stock valuations. Given the difficult interest-rate
outlook, I am cautious, looking for the best companies with the most
attractive valuations. Recently, the companies that have performed
relatively well have tended to be more fee-based than interest-rate
sensitive. Regardless of what happens with interest rates, I will
invest in companies that can execute in a difficult environment and
which offer the most attractive return potential.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$333 million
MANAGER: James Catudal, since February 2000;
joined Fidelity in 1997
(checkmark)
ADVISOR FINANCIAL SERVICES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Citigroup, Inc. 6.2
American International Group, 5.7
Inc.
American Express Co. 4.5
Freddie Mac 4.4
Bank of America Corp. 3.8
Chase Manhattan Corp. 3.6
Morgan Stanley Dean Witter & 3.7
Co.
Fannie Mae 3.6
Wells Fargo & Co. 3.1
Berkshire Hathaway, Inc. 2.5
Class A
41.1
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Banks 26.9%
Insurance 21.8%
Credit & Other Finance 15.7%
Securities Industry 9.2%
Federal Sponsored Credit 8.4%
All Others* 18.0%
Row: 1, Col: 1, Value: 26.9
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 21.8
Row: 1, Col: 4, Value: 15.7
Row: 1, Col: 5, Value: 9.199999999999999
Row: 1, Col: 6, Value: 8.4
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 18.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR FINANCIAL SERVICES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 89.0%
SHARES VALUE (NOTE 1)
BANKS - 26.9%
Bank of America Corp. 261,004 $ 12,642,381
Bank of New York Co., Inc. 163,760 6,652,750
Bank One Corp. 202,382 6,033,513
Chase Manhattan Corp. 151,800 12,210,413
Comerica, Inc. 50,250 2,220,422
First Union Corp. 76,192 2,557,194
Firstar Corp. 204,550 4,883,631
FleetBoston Financial Corp. 152,676 4,799,752
M&T Bank Corp. 2,400 986,400
Marshall & Ilsley Corp. 47,000 2,408,750
Mellon Financial Corp. 125,000 4,289,063
Northern Trust Corp. 37,000 2,233,875
Peoples Heritage Financial 15,000 220,313
Group, Inc.
PNC Financial Corp. 32,700 1,569,600
State Street Corp. 20,000 1,603,750
SunTrust Banks, Inc. 28,400 1,691,575
Synovus Finanical Corp. 30,000 570,000
Toronto Dominion Bank 62,000 1,554,987
U.S. Bancorp 194,650 4,318,797
UnionBanCal Corp. 27,800 988,638
Wachovia Corp. 29,605 1,896,570
Wells Fargo & Co. 260,400 10,416,000
Westamerica Bancorp. 50,000 1,262,500
Zions Bancorp 29,200 1,726,450
89,737,324
COMPUTER SERVICES & SOFTWARE
- - 0.2%
Intuit, Inc. (a) 9,200 554,875
Sanchez Computer Associates, 5,000 169,063
Inc. (a)
723,938
CREDIT & OTHER FINANCE - 15.7%
American Express Co. 91,300 15,047,381
Associates First Capital 384,000 7,680,000
Corp. Class A
Citigroup, Inc. 360,993 20,734,527
Household International, Inc. 115,057 4,055,759
MBNA Corp. 63,250 1,597,063
Metris Companies, Inc. 15,000 549,375
Providian Financial Corp. 33,107 2,793,403
52,457,508
FEDERAL SPONSORED CREDIT - 8.4%
Fannie Mae 201,935 12,103,479
Freddie Mac 292,020 14,655,754
SLM Holding Corp. 32,000 1,246,000
28,005,233
HOLDING COMPANIES - 0.4%
PartnerRe Ltd. 46,600 1,351,400
SHARES VALUE (NOTE 1)
INSURANCE - 21.8%
ACE Ltd. 65,000 $ 1,149,688
AFLAC, Inc. 72,200 3,136,188
Allmerica Financial Corp. 12,400 579,700
Ambac Financial Group, Inc. 97,100 4,751,831
American General Corp. 45,500 2,795,406
American International Group, 183,750 19,132,969
Inc.
Arthur J. Gallagher & Co. 10,000 537,500
Berkshire Hathaway, Inc.:
Class A (a) 165 8,448,000
Class B (a) 24 39,504
Blanch E.W. Holdings, Inc. 18,000 870,750
CIGNA Corp. 7,500 538,125
Everest Reinsurance Holdings, 7,700 193,944
Inc.
Financial Security Assurance 5,000 275,938
Holdings Ltd.
Hartford Financial Services 47,700 1,818,563
Group, Inc.
Hartford Life, Inc. Class A 49,500 2,014,031
HCC Insurance Holdings, Inc. 23,400 311,513
Jefferson-Pilot Corp. 15,000 881,250
Loews Corp. 14,600 817,600
Marsh & McLennan Companies, 70,950 6,669,300
Inc.
MBIA, Inc. 81,700 4,090,106
Mutual Risk Management Ltd. 55,000 900,625
Nationwide Financial 21,300 529,838
Services, Inc. Class A
PMI Group, Inc. 30,750 1,268,438
Reliastar Financial Corp. 88,503 2,627,433
RenaissanceRe Holdings Ltd. 21,500 837,156
The Chubb Corp. 57,500 3,234,375
Torchmark Corp. 20,000 503,750
Travelers Property Casualty 17,500 634,375
Corp. Class A
UICI (a) 70,200 693,225
Xl Capital Ltd. 55,000 2,481,875
72,762,996
LODGING & GAMING - 0.4%
Starwood Hotels & Resorts 50,400 1,209,600
Worldwide, Inc. unit
REAL ESTATE INVESTMENT TRUSTS
- - 4.2%
AMB Property Corp. 30,900 631,519
AMRESCO Capital Trust, Inc. 25,000 229,688
Apartment Investment & 42,400 1,605,900
Management Co. Class A
Arden Realty Group, Inc. 15,000 316,875
BRE Properties, Inc. Class A 10,000 220,000
Cousins Properties, Inc. 14,500 519,281
Crescent Real Estate Equities 66,100 1,189,800
Co.
Duke-Weeks Realty Corp. 67,500 1,337,344
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
REAL ESTATE INVESTMENT TRUSTS
- - CONTINUED
Equity Office Properties Trust 63,900 $ 1,633,444
Equity Residential Properties 30,300 1,257,450
Trust (SBI)
First Industrial Realty 6,000 161,250
Trust, Inc.
Indymac Mortgage Holdings, 155,000 1,724,375
Inc.
Kimco Realty Corp. 9,100 320,775
ProLogis Trust 34,500 657,656
Public Storage, Inc. 32,500 737,344
Simon Property Group, Inc. 36,000 888,750
Spieker Properties, Inc. 12,500 485,938
13,917,389
SAVINGS & LOANS - 1.7%
Charter One Financial, Inc. 34,500 670,594
Commercial Federal Corp. 10,000 145,000
Golden West Financial Corp. 61,200 1,801,575
TCF Financial Corp. 48,200 1,105,588
Washington Mutual, Inc. 83,520 2,119,320
5,842,077
SECURITIES INDUSTRY - 9.2%
AXA Financial, Inc. 35,900 1,168,994
Charles Schwab Corp. 125,000 4,507,813
Federated Investors, Inc. 15,000 296,250
Class B
Franklin Resources, Inc. 30,000 1,070,625
Goldman Sachs Group, Inc. 7,500 687,188
Investors Group, Inc. 50,000 581,174
Lehman Brothers Holdings, 14,400 1,029,600
Inc.
Merrill Lynch & Co., Inc. 57,600 4,996,800
Morgan Stanley Dean Witter & 184,000 12,190,000
Co.
The Bear Stearns Companies, 23,625 974,531
Inc.
Waddell & Reed Financial, Inc.:
Class A 97,845 2,825,274
Class B 12,245 342,095
30,670,344
SERVICES - 0.1%
CheckFree Holdings Corp. (a) 5,000 295,000
TOTAL COMMON STOCKS 296,972,809
(Cost $287,395,772)
CASH EQUIVALENTS - 11.2%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 1,261,100 $ 1,261,100
5.56% (b)
Taxable Central Cash Fund, 36,108,428 36,108,428
5.45% (b)
TOTAL CASH EQUIVALENTS 37,369,528
(Cost $37,369,528)
TOTAL INVESTMENT PORTFOLIO - 334,342,337
100.2%
(Cost $324,765,300)
NET OTHER ASSETS - (0.2)% (775,640)
NET ASSETS - 100% $ 333,566,697
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $325,625,531. Net unrealized appreciation
aggregated $8,716,806, of which $42,945,406 related to appreciated
investment securities and $34,228,600 related to depreciated
investment securities.
At July 31, 1999, the fund had a capital loss carryforward of
approximately $4,198,000 all of which will expire on July 31, 2007.
ADVISOR FINANCIAL SERVICES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 334,342,337
value (cost $324,765,300) -
See accompanying schedule
Receivable for investments 18,138,835
sold
Receivable for fund shares 2,938,389
sold
Dividends receivable 280,229
Interest receivable 133,919
Redemption fees receivable 306
Other receivables 431
TOTAL ASSETS 355,834,446
LIABILITIES
Payable for investments $ 19,207,983
purchased
Payable for fund shares 1,352,934
redeemed
Accrued management fee 153,781
Distribution fees payable 185,046
Other payables and accrued 106,905
expenses
Collateral on securities 1,261,100
loaned, at value
TOTAL LIABILITIES 22,267,749
NET ASSETS $ 333,566,697
Net Assets consist of:
Paid in capital $ 334,802,072
Undistributed net investment 676,638
income
Accumulated undistributed net (11,489,206)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 9,577,193
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 333,566,697
CALCULATION OF MAXIMUM $16.18
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($32,012,749 (divided
by) 1,979,069 shares)
Maximum offering price per $17.17
share (100/94.25 of
$16.18)
CLASS T: NET ASSET VALUE $16.13
and redemption price per
share ($135,739,503 (divided
by) 8,415,416 shares)
Maximum offering price per $16.72
share (100/96.50 of
$16.13)
CLASS B: NET ASSET VALUE $15.94
and offering price per
share ($107,748,865 (divided
by) 6,760,207 shares) A
CLASS C: NET ASSET VALUE $15.95
and offering price per
share ($48,189,846 (divided
by) 3,021,741 shares) A
INSTITUTIONAL CLASS: NET $16.24
ASSET VALUE, offering price
and redemption price per
share ($9,875,734
(divided by) 607,983 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,529,074
Dividends
Interest 623,265
Security lending 2,386
TOTAL INCOME 3,154,725
EXPENSES
Management fee $ 872,992
Transfer agent fees 443,587
Distribution fees 1,035,745
Accounting and security 65,954
lending fees
Non-interested trustees' 419
compensation
Custodian fees and expenses 4,354
Registration fees 79,888
Audit 14,222
Legal 1,823
Miscellaneous 1,863
Total expenses before 2,520,847
reductions
Expense reductions (13,133) 2,507,714
NET INVESTMENT INCOME 647,011
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (6,313,431)
Foreign currency transactions (562) (6,313,993)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (18,952,166)
Assets and liabilities in 495 (18,951,671)
foreign currencies
NET GAIN (LOSS) (25,265,664)
NET INCREASE (DECREASE) IN $ (24,618,653)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ 647,011 $ 798,328
income
Net realized gain (loss) (6,313,993) (5,100,835)
Change in net unrealized (18,951,671) 3,565,570
appreciation (depreciation)
NET INCREASE (DECREASE) IN (24,618,653) (736,937)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (642,365) (365,767)
From net investment income
From net realized gain - (12,710,202)
TOTAL DISTRIBUTIONS (642,365) (13,075,969)
Share transactions - net 65,369,927 75,395,927
increase (decrease)
Redemption fees 77,887 103,555
TOTAL INCREASE (DECREASE) 40,186,796 61,686,576
IN NET ASSETS
NET ASSETS
Beginning of period 293,379,901 231,693,325
End of period (including $ 333,566,697 $ 293,379,901
undistributed net investment
income of $676,638 and
$673,045, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.49 $ 18.74 $ 15.11 $ 10.00
period
Income from Investment
Operations
Net investment income D .07 .12 .11 .06
Net realized and unrealized (1.29) (.31) 3.80 5.06
gain (loss)
Total from investment (1.22) (.19) 3.91 5.12
operations
Less Distributions
From net investment income (.09) (.06) (.06) (.01)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.09) (1.07) (.29) (.02)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.18 $ 17.49 $ 18.74 $ 15.11
TOTAL RETURN B, C (7.00)% .69% 26.32% 51.35%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 32,013 $ 27,440 $ 21,907 $ 6,275
(000 omitted)
Ratio of expenses to average 1.25% A 1.24% 1.32% 1.75% A, F
net assets
Ratio of expenses to average 1.24% A, G 1.23% G 1.30% G 1.73% A, G
net assets after expense
reductions
Ratio of net investment .84% A .73% .63% .55% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.42 $ 18.66 $ 15.07 $ 10.00
period
Income from Investment
Operations
Net investment income D .05 .09 .07 .04
Net realized and unrealized (1.29) (.30) 3.78 5.04
gain (loss)
Total from investment (1.24) (.21) 3.85 5.08
operations
Less Distributions
From net investment income (.05) (.03) (.04) (.01)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.05) (1.04) (.27) (.02)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.13 $ 17.42 $ 18.66 $ 15.07
TOTAL RETURN B, C (7.13)% 0.53% 25.96% 50.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 135,740 $ 123,361 $ 118,608 $ 52,003
(000 omitted)
Ratio of expenses to average 1.47% A 1.47% 1.52% 1.94% A
net assets
Ratio of expenses to average 1.46% A, F 1.46% F 1.50% F 1.91% A, F
net assets after expense
reductions
Ratio of net investment .62% A .50% .44% .37% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.21 $ 18.52 $ 15.04 $ 12.56
period
Income from Investment
Operations
Net investment income (loss) D .01 - (.02) (.02)
Net realized and unrealized (1.28) (.29) 3.76 2.50
gain (loss)
Total from investment (1.27) (.29) 3.74 2.48
operations
Less Distributions
From net investment income - (.02) (.04) -
From net realized gain - (1.01) (.23) -
Total distributions - (1.03) (.27) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 15.94 $ 17.21 $ 18.52 $ 15.04
TOTAL RETURN B, C (7.38)% 0.05% 25.29% 19.75%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 107,749 $ 94,072 $ 65,926 $ 7,737
(000 omitted)
Ratio of expenses to average 2.00% A 1.99% 2.06% 2.50% A, F
net assets
Ratio of expenses to average 1.99% A, G 1.98% G 2.04% G 2.49% A, G
net assets after expense
reductions
Ratio of net investment .10% A (.02)% (.14)% (.37)% A
income (loss) to average net
assets
Portfolio turnover 40% A 38% 54% 26% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 17.24 $ 18.56 $ 15.24
period
Income from Investment
Operations
Net investment income (loss) D .01 - (.03)
Net realized and unrealized (1.28) (.29) 3.57
gain (loss)
Total from investment (1.27) (.29) 3.54
operations
Less Distributions
From net investment income (.02) (.03) (.02)
From net realized gain - (1.01) (.21)
Total distributions (.02) (1.04) (.23)
Redemption fees added to paid .00 .01 .01
in capital
Net asset value, end of period $ 15.95 $ 17.24 $ 18.56
TOTAL RETURN B, C (7.37)% 0.07% 23.56%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 48,190 $ 36,552 $ 19,983
(000 omitted)
Ratio of expenses to average 1.95% A 1.95% 2.09% A
net assets
Ratio of expenses to average 1.95% A 1.94% F 2.07% A, F
net assets after expense
reductions
Ratio of net investment .14% A .02% (.22)% A
income (loss) to average net
assets
Portfolio turnover 40% A 38% 54% A
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.60 $ 18.80 $ 15.14 $ 10.00
period
Income from Investment
Operations
Net investment income D .10 .18 .14 .10
Net realized and unrealized (1.31) (.30) 3.79 5.06
gain (loss)
Total from investment (1.21) (.12) 3.93 5.16
operations
Less Distributions
From net investment income (.15) (.08) (.05) (.02)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.15) (1.09) (.28) (.03)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.24 $ 17.60 $ 18.80 $ 15.14
TOTAL RETURN B, C (6.92)% 1.12% 26.39% 51.78%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,876 $ 11,956 $ 5,270 $ 3,758
(000 omitted)
Ratio of expenses to average .91% A .93% 1.14% 1.50% A, F
net assets
Ratio of expenses to average .90% A, G .92% G 1.13% G 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.18% A 1.04% .81% .85% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, passive foreign
investment companies (PFIC), non-taxable dividends, capital loss
carryforwards, 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.
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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $109,511,171 and $57,280,498, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 35,218 $ 68
CLASS T 313,086 241
CLASS B 486,696 365,237
CLASS C 200,745 118,651
$ 1,035,745 $ 484,197
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 91,219 $ 59,142
CLASS T 118,082 54,635
CLASS B 167,530 167,530 *
CLASS C 14,788 14,788 *
$ 391,619 $ 296,095
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 44,659 .32 *
CLASS T 180,213 .29 *
CLASS B 152,144 .31 *
CLASS C 54,351 .27 *
INSTITUTIONAL CLASS 12,220 .22 *
$ 443,587
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting 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 $9,570 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $1,246,244. The fund received cash collateral of
$1,261,100 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $12,798 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's expenses
were reduced by $335 under this arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ 141,476 $ 69,817
Class T 357,280 174,881
Class B - 68,552
Class C 41,773 31,424
Institutional Class 101,836 21,093
Total $ 642,365 $ 365,767
FROM NET REALIZED GAIN
Class A $ - $ 1,212,772
Class T - 6,262,898
Class B - 3,836,369
Class C - 1,125,444
Institutional Class - 272,719
Total $ - $ 12,710,202
$ 642,365 $ 13,075,969
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 822,308 $ 13,843,578
824,679
Reinvestment of distributions 7,540 85,902 129,106
Shares redeemed (421,630) (508,971) (7,040,462)
Net increase (decrease) 410,589 399,239 $ 6,932,222
CLASS T Shares sold 3,299,170 3,240,994 $ 55,340,944
Reinvestment of distributions 19,179 443,632 327,772
Shares redeemed (1,982,957) (2,959,321) (32,806,969)
Net increase (decrease) 1,335,392 725,305 $ 22,861,747
CLASS B Shares sold 2,295,180 2,867,874 $ 37,879,344
Reinvestment of distributions - 235,734 -
Shares redeemed (1,000,629) (1,197,148) (16,345,970)
Net increase (decrease) 1,294,551 1,906,460 $ 21,533,374
CLASS C Shares sold 1,551,245 1,453,651 $ 25,702,171
Reinvestment of distributions 1,942 57,370 32,875
Shares redeemed (652,005) (467,142) (10,705,246)
Net increase (decrease) 901,182 1,043,879 $ 15,029,800
INSTITUTIONAL CLASS Shares 281,463 511,162 $ 4,734,086
sold
Reinvestment of distributions 2,415 18,075 41,473
Shares redeemed (355,303) (130,140) (5,762,775)
Net increase (decrease) (71,425) 399,097 $ (987,216)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 14,081,934
Reinvestment of distributions 1,165,695
Shares redeemed (8,477,160)
Net increase (decrease) $ 6,770,469
CLASS T Shares sold $ 54,768,982
Reinvestment of distributions 6,006,779
Shares redeemed (48,376,793)
Net increase (decrease) $ 12,398,968
CLASS B Shares sold $ 48,151,991
Reinvestment of distributions 3,165,887
Shares redeemed (19,603,788)
Net increase (decrease) $ 31,714,090
CLASS C Shares sold $ 24,778,214
Reinvestment of distributions 771,627
Shares redeemed (7,840,548)
Net increase (decrease) $ 17,709,293
INSTITUTIONAL CLASS Shares $ 8,733,321
sold
Reinvestment of distributions 245,820
Shares redeemed (2,176,034)
Net increase (decrease) $ 6,803,107
</TABLE>
ADVISOR HEALTH CARE FUND - CLASS A
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL A 7.87% 6.27% 118.91%
FIDELITY ADV HEALTH CARE - CL 1.67% 0.16% 106.32%
A (INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Health Care 6.46% 2.57% 119.63%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to the performance of the Standard & Poor's
500 Index - a market capitalization-weighted index of common stocks -
and the Goldman Sachs Health Care Index - a market
capitalization-weighted index of 96 stocks designed to measure the
performance of companies in the health care sector. Issues in the
index include providers of health care related services including
long-term care and hospital facilities, health care management
organizations and continuing care services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL A 6.27% 25.82%
FIDELITY ADV HEALTH CARE - CL 0.16% 23.66%
A (INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Health Care 2.57% 25.94%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Health Care -CL A S&P 500 GS Health Care
00177 SP001 GS005
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 10056.48 10516.69 10812.87
1996/10/31 9830.28 10806.74 10714.59
1996/11/30 10329.80 11623.62 11456.00
1996/12/31 10395.78 11393.36 11211.23
1997/01/31 11027.25 12105.21 12140.37
1997/02/28 11159.20 12200.12 12322.91
1997/03/31 10556.00 11698.81 11479.40
1997/04/30 11093.23 12397.23 12192.08
1997/05/31 11932.05 13151.98 13124.59
1997/06/30 12818.00 13741.19 14149.23
1997/07/31 13289.25 14834.57 14590.78
1997/08/31 12469.28 14003.54 13768.10
1997/09/30 13258.30 14770.51 14522.88
1997/10/31 13133.40 14277.18 14348.05
1997/11/30 13383.20 14938.07 14887.11
1997/12/31 13606.41 15194.56 15322.92
1998/01/31 14411.52 15362.61 16033.22
1998/02/28 15196.51 16470.56 17070.43
1998/03/31 15790.28 17314.02 17844.91
1998/04/30 15961.36 17488.19 18314.30
1998/05/31 15830.53 17187.57 18020.01
1998/06/30 16685.96 17885.73 19053.99
1998/07/31 16806.73 17695.25 19066.04
1998/08/31 14763.76 15136.87 16554.54
1998/09/30 16451.72 16106.54 18419.75
1998/10/31 16926.78 17416.64 19244.11
1998/11/30 17804.62 18472.27 20271.43
1998/12/31 19023.27 19536.64 21491.50
1999/01/31 19415.71 20353.66 21413.35
1999/02/28 19229.82 19721.07 21147.66
1999/03/31 19570.62 20510.11 21793.82
1999/04/30 18858.03 21304.46 20778.64
1999/05/31 18682.46 20801.47 20429.00
1999/06/30 19591.28 21955.95 21294.51
1999/07/31 19126.54 21270.48 20629.59
1999/08/31 19653.24 21165.19 21030.23
1999/09/30 17910.96 20585.06 19154.33
1999/10/31 19155.66 21887.68 20553.14
1999/11/30 19661.98 22332.66 21159.98
1999/12/31 19356.08 23648.05 20622.65
2000/01/31 20632.42 22459.97 21962.65
IMATRL PRASUN SHR__CHT 20000131 20000216 150736 R00000000000044
</TABLE>
$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 5.75% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $20,632 - a 106.32% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Health Care Index, it would have grown to $21,963 - a 119.63%
increase.
ADVISOR HEALTH CARE FUND - CLASS T
PERFORMANCE
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 JANUARY 31, 2000 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV HEALTH CARE - CL T 7.76% 6.03% 116.88%
FIDELITY ADV HEALTH CARE - CL 3.98% 2.32% 109.29%
T (INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Health Care 6.46% 2.57% 119.63%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to the performance of the Standard & Poor's
500 Index - a market capitalization-weighted index of common stocks -
and the Goldman Sachs Health Care Index - a market
capitalization-weighted index of 96 stocks designed to measure the
performance of companies in the health care sector. Issues in the
index include providers of health care related services including
long-term care and hospital facilities, health care management
organizations and continuing care services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL T 6.03% 25.48%
FIDELITY ADV HEALTH CARE - CL 2.32% 24.17%
T (INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Health Care 2.57% 25.94%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Health Care -CL T S&P 500 GS Health Care
00191 SP001 GS005
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 10286.90 10516.69 10812.87
1996/10/31 10055.30 10806.74 10714.59
1996/11/30 10566.75 11623.62 11456.00
1996/12/31 10624.65 11393.36 11211.23
1997/01/31 11271.20 12105.21 12140.37
1997/02/28 11396.65 12200.12 12322.91
1997/03/31 10779.05 11698.81 11479.40
1997/04/30 11319.45 12397.23 12192.08
1997/05/31 12178.30 13151.98 13124.59
1997/06/30 13075.75 13741.19 14149.23
1997/07/31 13558.25 14834.57 14590.78
1997/08/31 12718.70 14003.54 13768.10
1997/09/30 13526.32 14770.51 14522.88
1997/10/31 13398.52 14277.18 14348.05
1997/11/30 13654.11 14938.07 14887.11
1997/12/31 13872.26 15194.56 15322.92
1998/01/31 14696.15 15362.61 16033.22
1998/02/28 15478.85 16470.56 17070.43
1998/03/31 16086.47 17314.02 17844.91
1998/04/30 16261.54 17488.19 18314.30
1998/05/31 16117.36 17187.57 18020.01
1998/06/30 16992.75 17885.73 19053.99
1998/07/31 17106.03 17695.25 19066.04
1998/08/31 15025.71 15136.87 16554.54
1998/09/30 16741.42 16106.54 18419.75
1998/10/31 17216.43 17416.64 19244.11
1998/11/30 18103.12 18472.27 20271.43
1998/12/31 19338.14 19536.64 21491.50
1999/01/31 19739.26 20353.66 21413.35
1999/02/28 19538.70 19721.07 21147.66
1999/03/31 19897.60 20510.11 21793.82
1999/04/30 19169.25 21304.46 20778.64
1999/05/31 18979.24 20801.47 20429.00
1999/06/30 19897.60 21955.95 21294.51
1999/07/31 19422.59 21270.48 20629.59
1999/08/31 19960.93 21165.19 21030.23
1999/09/30 18184.98 20585.06 19154.33
1999/10/31 19433.18 21887.68 20553.14
1999/11/30 19960.44 22332.66 21159.98
1999/12/31 19637.63 23648.05 20622.65
2000/01/31 20928.87 22459.97 21962.65
IMATRL PRASUN SHR__CHT 20000131 20000216 151034 R00000000000044
</TABLE>
$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 3.50% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $20,929 - a 109.29% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Health Care Index, it would have grown to $21,963 - a 119.63%
increase.
ADVISOR HEALTH CARE FUND - CLASS B
PERFORMANCE
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
shares' 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 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL B 7.52% 5.49% 113.39%
FIDELITY ADV HEALTH CARE - CL 2.52% 0.49% 110.39%
B (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Health Care 6.46% 2.57% 119.63%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to the performance of the Standard & Poor's
500 Index - a market capitalization-weighted index of common stocks -
and the Goldman Sachs Health Care Index - a market
capitalization-weighted index of 96 stocks designed to measure the
performance of companies in the health care sector. Issues in the
index include providers of health care related services including
long-term care and hospital facilities, health care management
organizations and continuing care services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL B 5.49% 24.88%
FIDELITY ADV HEALTH CARE - CL 0.49% 24.37%
B (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Health Care 2.57% 25.94%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Health Care -CL B S&P 500 GS Health Care
00164 SP001 GS005
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10660.00 10516.69 10812.87
1996/10/31 10420.00 10806.74 10714.59
1996/11/30 10950.00 11623.62 11456.00
1996/12/31 11010.00 11393.36 11211.23
1997/01/31 11680.00 12105.21 12140.37
1997/02/28 11810.00 12200.12 12322.91
1997/03/31 11170.00 11698.81 11479.40
1997/04/30 11720.00 12397.23 12192.08
1997/05/31 12600.00 13151.98 13124.59
1997/06/30 13530.00 13741.19 14149.23
1997/07/31 14010.00 14834.57 14590.78
1997/08/31 13140.00 14003.54 13768.10
1997/09/30 13967.29 14770.51 14522.88
1997/10/31 13824.46 14277.18 14348.05
1997/11/30 14079.52 14938.07 14887.11
1997/12/31 14304.95 15194.56 15322.92
1998/01/31 15126.34 15362.61 16033.22
1998/02/28 15937.06 16470.56 17070.43
1998/03/31 16545.10 17314.02 17844.91
1998/04/30 16726.45 17488.19 18314.30
1998/05/31 16566.44 17187.57 18020.01
1998/06/30 17462.50 17885.73 19053.99
1998/07/31 17569.17 17695.25 19066.04
1998/08/31 15425.03 15136.87 16554.54
1998/09/30 17179.79 16106.54 18419.75
1998/10/31 17660.65 17416.64 19244.11
1998/11/30 18567.72 18472.27 20271.43
1998/12/31 19824.52 19536.64 21491.50
1999/01/31 20228.87 20353.66 21413.35
1999/02/28 20010.30 19721.07 21147.66
1999/03/31 20360.02 20510.11 21793.82
1999/04/30 19616.87 21304.46 20778.64
1999/05/31 19409.23 20801.47 20429.00
1999/06/30 20338.16 21955.95 21294.51
1999/07/31 19846.37 21270.48 20629.59
1999/08/31 20392.80 21165.19 21030.23
1999/09/30 18568.69 20585.06 19154.33
1999/10/31 19837.01 21887.68 20553.14
1999/11/30 20359.91 22332.66 21159.98
1999/12/31 20026.14 23648.05 20622.65
2000/01/31 21039.00 22459.97 21962.65
IMATRL PRASUN SHR__CHT 20000131 20000216 150736 R00000000000044
</TABLE>
$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, 2000,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $21,039 - a 110.39%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $22,460 - a 124.60% increase. If $10,000 was
invested in the Goldman Sachs Health Care Index, it would have grown
to $21,963 - a 119.63% increase.
ADVISOR HEALTH CARE FUND - CLASS C
PERFORMANCE
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 shares' 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 life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL C 7.52% 5.49% 113.15%
FIDELITY ADV HEALTH CARE - CL 6.52% 4.49% 113.15%
C (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Health Care 6.46% 2.57% 119.63%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks - and the Goldman Sachs
Health Care Index - a market capitalization-weighted index of 96
stocks designed to measure the performance of companies in the health
care sector. Issues in the index include providers of health care
related services including long-term care and hospital facilities,
health care management organizations and continuing care services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - CL C 5.49% 24.84%
FIDELITY ADV HEALTH CARE - CL 4.49% 24.84%
C (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Health Care 2.57% 25.94%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Health Care -CL C S&P 500 GS Health Care
00285 SP001 GS005
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10660.00 10516.69 10812.87
1996/10/31 10420.00 10806.74 10714.59
1996/11/30 10950.00 11623.62 11456.00
1996/12/31 11010.00 11393.36 11211.23
1997/01/31 11680.00 12105.21 12140.37
1997/02/28 11810.00 12200.12 12322.91
1997/03/31 11170.00 11698.81 11479.40
1997/04/30 11720.00 12397.23 12192.08
1997/05/31 12600.00 13151.98 13124.59
1997/06/30 13530.00 13741.19 14149.23
1997/07/31 14010.00 14834.57 14590.78
1997/08/31 13140.00 14003.54 13768.10
1997/09/30 13967.29 14770.51 14522.88
1997/10/31 13824.46 14277.18 14348.05
1997/11/30 14079.34 14938.07 14887.11
1997/12/31 14304.85 15194.56 15322.92
1998/01/31 15134.42 15362.61 16033.22
1998/02/28 15932.09 16470.56 17070.43
1998/03/31 16538.32 17314.02 17844.91
1998/04/30 16708.48 17488.19 18314.30
1998/05/31 16548.95 17187.57 18020.01
1998/06/30 17431.70 17885.73 19053.99
1998/07/31 17538.06 17695.25 19066.04
1998/08/31 15410.94 15136.87 16554.54
1998/09/30 17151.32 16106.54 18419.75
1998/10/31 17642.29 17416.64 19244.11
1998/11/30 18536.95 18472.27 20271.43
1998/12/31 19802.57 19536.64 21491.50
1999/01/31 20206.26 20353.66 21413.35
1999/02/28 19988.05 19721.07 21147.66
1999/03/31 20348.09 20510.11 21793.82
1999/04/30 19595.27 21304.46 20778.64
1999/05/31 19387.97 20801.47 20429.00
1999/06/30 20326.27 21955.95 21294.51
1999/07/31 19824.39 21270.48 20629.59
1999/08/31 20369.91 21165.19 21030.23
1999/09/30 18546.29 20585.06 19154.33
1999/10/31 19824.96 21887.68 20553.14
1999/11/30 20347.54 22332.66 21159.98
1999/12/31 20013.98 23648.05 20622.65
2000/01/31 21314.89 22459.97 21962.65
IMATRL PRASUN SHR__CHT 20000131 20000216 150736 R00000000000044
</TABLE>
$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, 2000,
the value of the investment would have grown to $21,315 - a 113.15%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $22,460 - a 124.60% increase. If $10,000 was
invested in the Goldman Sachs Health Care Index, it would have grown
to $21,963 - a 119.63% increase.
ADVISOR HEALTH CARE FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Ramin Arani)
An interview with
Ramin Arani, Portfolio Manager of Fidelity
Advisor Health Care Fund
Q. HOW DID THE FUND PERFORM, RAMIN?
A. For the six months that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares returned 7.87%, 7.76%,
7.52% and 7.52%, respectively. By comparison, the Goldman Sachs Health
Care Index - an index of 96 stocks designed to measure
the performance of companies in the health care sector - returned
6.46%. The Standard & Poor's 500 Index returned 5.59% during the same
period. For the 12 months that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares returned 6.27%, 6.03%,
5.49% and 5.49%, respectively. During the same period, the Goldman
Sachs index returned 2.57% and the S&P 500 returned 10.35%.
Q. WHY DID THE FUND OUTPACE THE S&P 500 AND THE GOLDMAN SACHS INDEX
DURING THE SIX-MONTH PERIOD?
A. Most of the fund's outperformance relative to the S&P 500 came very
late in the period. In fact, the average return of health care stocks
in the month of January was 700 to 800 basis points higher than the
return of the S&P 500 for that month. The fund was heavily weighted in
biotechnology names, which generated stellar returns during the
period. Investors became enamored with their upside earnings surprises
and the strong data coming out of their clinical trials. And although
pharmaceutical stocks bottomed out in December, they bounced back a
bit in January. The fund outpaced the Goldman Sachs index because I
maintained an overweighted position in biotech stocks relative to that
benchmark throughout the period.
Q. YOU MENTIONED THE STRONG PERFORMANCE OF BIOTECHNOLOGY STOCKS.
SPECIFICALLY, WHY DID THEY DO SO WELL?
A. Throughout 1999, biotech companies reported very good data from
their clinical trials for new products and, by and large, these stocks
trade relative to the quality of their clinical data. Promising new
products caused their earnings growth rates to accelerate - and many
times, to exceed analysts' expectations. In turn, investors flocked to
biotech stocks in droves, especially as the pharmaceutical sector
struggled.
Q. WHY DID PHARMACEUTICAL STOCKS UNDERPERFORM?
A. The earnings growth rate for the pharmaceutical industry had been
incredibly robust over the past couple of years, mostly due to U.S.
Food and Drug Administration reform that resulted in a significant
amount of new product approvals. Over the past year, however,
investors began to realize that this pace of product approvals was
unsustainable and that the earnings growth rate for pharmaceutical
companies was likely peaking in 1999. At that point, drug stocks
started losing their luster. On top of that, the stocks suffered from
political concerns, including fears about the passage of a universal
Medicare drug benefit and the possibility that it could lead to price
controls.
Q. WHICH INDIVIDUAL STOCKS HELPED PERFORMANCE? WHY?
A. The fund had a large position in Warner-Lambert, which helped
performance because the company was the target of a takeover battle
between American Home Products and Pfizer. Pfizer ultimately signed a
contract to acquire Warner-Lambert, but the ensuing battle drove the
stock price to record highs. The biggest winner on the biotech side
was Amgen. The company reported strong sales growth in its core
products, while also reporting good data from its clinical trials and
the promise to launch several new drugs over the next few years.
Stocks such as Affymetrix, a developer of genetic technology, and
Millennium Pharmaceuticals also boosted performance as those companies
generated strong earnings growth during the period.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
A. Some of the fund's large pharmaceutical holdings, such as Eli Lilly
and Schering-Plough, hurt returns. These stocks were dragged down by
the aforementioned issues that pressured the pharmaceutical group as a
whole, but company-specific concerns also played a part in their
underperformance. In addition, the fund held a few large positions in
health care service stocks, such as United HealthCare and Cardinal
Health, that fell under extreme pressures due to concerns about the
sustainability of their earnings growth rate.
Q. WHAT'S YOUR OUTLOOK?
A. Health care stocks are driven by relative earnings growth. Given
that the outlook for earnings growth in health care stocks is pretty
stable, the growth rate of the S&P 500 must decelerate for health care
issues to really outperform. I don't think I can predict the future of
the S&P 500's growth rate, but at some point I believe that a 20%
growth rate for that index is unsustainable. Therefore, I believe
health care stocks could generate strong returns when growth of the
broader market slows.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$813 million
MANAGER: Ramin Arani, since August 1999;
joined Fidelity in 1992
(checkmark)
ADVISOR HEALTH CARE FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Warner-Lambert Co. 10.7
Bristol-Myers Squibb Co. 8.2
Eli Lilly & Co. 6.2
Merck & Co., Inc. 6.0
Johnson & Johnson 4.9
American Home Products Corp. 4.8
Amgen, Inc. 4.8
Medtronic, Inc. 4.7
Schering-Plough Corp. 4.7
Pfizer, Inc. 2.6
57.6
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Drugs & Pharmaceuticals 62.8%
Medical Equipment & Supplies 19.7%
Medical Facilities Management 4.6%
Computer Services & Software 1.5%
Insurance 1.2%
All Others * 10.2%
Row: 1, Col: 1, Value: 62.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 19.7
Row: 1, Col: 4, Value: 4.6
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 1.2
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 10.2
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR HEALTH CARE FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 91.6%
SHARES VALUE (NOTE 1)
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 200 $ 5,800
COMPUTER SERVICES & SOFTWARE
- - 1.5%
Affymetrix, Inc. (a) 19,700 4,560,550
Healtheon/Web Maryland Corp. 42,700 2,775,500
IMS Health, Inc. 196,700 4,413,456
11,749,506
DRUG STORES - 0.3%
CVS Corp. 73,000 2,550,438
DRUGS & PHARMACEUTICALS - 62.8%
Allergan, Inc. 149,200 8,504,400
ALZA Corp. Class A. (a) 49,400 1,762,963
American Home Products Corp. 834,300 39,264,244
Amgen, Inc. (a) 610,600 38,887,588
Andrx Corp. (a) 32,600 2,290,150
Bausch & Lomb, Inc. 77,400 4,798,800
Biochem Pharma, Inc. (a) 2,400 68,080
Biogen, Inc. (a) 144,700 12,480,375
Biovail Corp. International 47,800 2,381,153
(a)
Bristol-Myers Squibb Co. 1,013,100 66,864,600
Cephalon, Inc. (a) 110,319 3,916,325
Chiron Corp. (a) 163,400 7,250,875
Eli Lilly & Co. 748,700 50,069,313
Enzon, Inc. (a) 30,500 1,542,156
Forest Laboratories, Inc. (a) 111,400 7,519,500
Genentech, Inc. 2,800 393,400
Genzyme Corp. - General 54,700 2,844,400
Division
Gilead Sciences, Inc. (a) 41,300 1,933,356
Human Genome Sciences, Inc. 34,200 3,351,600
(a)
IDEC Pharmaceuticals Corp. (a) 57,438 7,247,958
Immunex Corp. (a) 149,700 19,573,275
Medicis Pharmaceutical Corp. 35,100 1,465,425
Class A (a)
Medimmune, Inc. (a) 49,700 7,256,200
Merck & Co., Inc. 620,600 48,911,038
Millennium Pharmaceuticals, 32,900 6,166,694
Inc. (a)
Pfizer, Inc. 575,000 20,915,625
Pharmacia & Upjohn, Inc. 181,600 8,535,200
QLT PhotoTherapeutics, Inc. 12,800 867,887
(a)
Schering-Plough Corp. 860,400 37,857,600
Sepracor, Inc. (a) 48,400 6,776,000
Warner-Lambert Co. 915,500 86,915,276
Watson Pharmaceuticals, Inc. 52,300 2,108,344
(a)
510,719,800
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 300 4,200
SHARES VALUE (NOTE 1)
ELECTRONIC INSTRUMENTS - 1.2%
Beckman Coulter, Inc. 15,300 $ 800,381
PE Corp. - Biosystems Group 39,200 5,870,200
Sequenom, Inc. 500 13,000
Waters Corp. (a) 40,700 3,006,713
9,690,294
ELECTRONICS - 0.0%
Quantum Effect Devices, Inc. 200 3,200
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Mettler-Toledo International, 29,000 924,375
Inc. (a)
INSURANCE - 1.2%
CIGNA Corp. 136,700 9,808,225
MEDICAL EQUIPMENT & SUPPLIES
- - 19.7%
Abbott Laboratories 606,000 19,770,750
Allscripts, Inc. 500 23,813
AmeriSource Health Corp. 34,400 623,500
Class A (a)
Baxter International, Inc. 260,600 16,645,825
Becton, Dickinson & Co. 186,000 4,870,875
Biomet, Inc. 153,400 6,107,238
C. R. Bard, Inc. 100 4,475
Cardinal Health, Inc. 238,206 11,389,224
Guidant Corp. (a) 292,500 15,392,813
Johnson & Johnson 459,421 39,538,920
Mallinckrodt, Inc. 700 20,169
Medtronic, Inc. 840,128 38,435,856
Patterson Dental Co. (a) 20,400 888,675
Resmed, Inc. (a) 18,400 790,050
Stryker Corp. 36,000 2,268,000
Sybron International, Inc. (a) 126,500 2,917,406
VISX, Inc. (a) 23,400 663,975
160,351,564
MEDICAL FACILITIES MANAGEMENT
- - 4.6%
Columbia/HCA Healthcare Corp. 468,800 12,804,100
Express Scripts, Inc. Class A 105,400 5,447,863
(a)
Lincare Holdings, Inc. (a) 76,100 2,696,794
Oxford Health Plans, Inc. (a) 74,700 1,059,806
Trigon Healthcare, Inc. (a) 60,800 1,850,600
United HealthCare Corp. 161,500 8,559,500
Wellpoint Health Networks, 70,900 4,821,200
Inc. (a)
37,239,863
SERVICES - 0.2%
Caremark Rx, Inc. (a) 383,200 1,628,600
TOTAL COMMON STOCKS 744,675,865
(Cost $629,383,675)
CASH EQUIVALENTS - 9.8%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 4,241,550 $ 4,241,550
5.56% (b)
Taxable Central Cash Fund, 69,499,972 69,499,972
5.45% (b)
MATURITY AMOUNT
Investments in repurchase $ 5,963,947 5,963,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.72%,
dated 1/31/00 due 2/1/00
TOTAL CASH EQUIVALENTS 79,704,522
(Cost $79,704,522)
</TABLE>
TOTAL INVESTMENT PORTFOLIO - 824,380,387
101.4%
(Cost $709,088,197)
NET OTHER ASSETS - (1.4)% (11,363,006)
NET ASSETS - 100% $ 813,017,381
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $711,828,413. Net unrealized appreciation
aggregated $112,551,974, of which $143,142,802 related to appreciated
investment securities and $30,590,828 related to depreciated
investment securities.
ADVISOR HEALTH CARE FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 824,380,387
value (including repurchase
agreements of $5,963,000)
(cost $709,088,197) - See
accompanying schedule
Cash 931
Receivable for investments 9,319,915
sold
Receivable for fund shares 4,826,002
sold
Dividends receivable 386,731
Interest receivable 293,830
Redemption fees receivable 99
Other receivables 890
TOTAL ASSETS 839,208,785
LIABILITIES
Payable for investments $ 18,794,164
purchased
Payable for fund shares 2,128,653
redeemed
Accrued management fee 368,786
Distribution fees payable 458,171
Other payables and accrued 200,080
expenses
Collateral on securities 4,241,550
loaned, at value
TOTAL LIABILITIES 26,191,404
NET ASSETS $ 813,017,381
Net Assets consist of:
Paid in capital $ 704,865,430
Accumulated net investment (1,699,686)
loss
Accumulated undistributed net (5,439,964)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 115,291,601
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 813,017,381
CALCULATION OF MAXIMUM $19.56
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($82,137,252 (divided
by) 4,198,884 shares)
Maximum offering price per $20.75
share (100/94.25 of
$19.56)
CLASS T: NET ASSET VALUE $19.45
and redemption price per
share ($277,066,190 (divided
by) 14,243,273 shares)
Maximum offering price per $20.16
share (100/96.50 of
$19.45)
CLASS B: NET ASSET VALUE $19.18
and offering price per
share ($282,825,384 (divided
by) 14,747,872 shares) A
CLASS C: NET ASSET VALUE $19.17
and offering price per
share ($139,697,803 (divided
by) 7,286,757 shares) A
INSTITUTIONAL CLASS: NET $19.64
ASSET VALUE, offering price
and redemption price per
share ($31,290,752
(divided by) 1,593,294
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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,820,649
Dividends
Interest 1,410,302
Security lending 9,502
TOTAL INCOME 4,240,453
EXPENSES
Management fee $ 2,092,326
Transfer agent fees 1,007,464
Distribution fees 2,558,609
Accounting and security 136,817
lending fees
Non-interested trustees' 996
compensation
Custodian fees and expenses 8,580
Registration fees 108,207
Audit 14,461
Legal 4,193
Miscellaneous 3,971
Total expenses before 5,935,624
reductions
Expense reductions (51,471) 5,884,153
NET INVESTMENT INCOME (LOSS) (1,643,700)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (4,567,037)
Foreign currency transactions 13,431 (4,553,606)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 61,288,802
Assets and liabilities in (690) 61,288,112
foreign currencies
NET GAIN (LOSS) 56,734,506
NET INCREASE (DECREASE) IN $ 55,090,806
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (1,643,700) $ (1,677,006)
income (loss)
Net realized gain (loss) (4,553,606) 16,392,585
Change in net unrealized 61,288,112 24,414,060
appreciation (depreciation)
NET INCREASE (DECREASE) IN 55,090,806 39,129,639
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (55,986) -
In excess of net investment
income
From net realized gain (13,943,096) (5,527,534)
TOTAL DISTRIBUTIONS (13,999,082) (5,527,534)
Share transactions - net 88,806,967 416,927,170
increase (decrease)
Redemption fees 181,704 201,576
TOTAL INCREASE (DECREASE) 130,080,395 450,730,851
IN NET ASSETS
NET ASSETS
Beginning of period 682,936,986 232,206,135
End of period (including $ 813,017,381 $ 682,936,986
accumulated net investment
loss of $1,699,686 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.52 $ 16.70 $ 14.10 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .00 .00 (.03) (.02)
Net realized and unrealized 1.45 2.20 3.50 4.12
gain (loss)
Total from investment 1.45 2.20 3.47 4.10
operations
Less Distributions
From net realized gain (.41) (.39) (.88) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.56 $ 18.52 $ 16.70 $ 14.10
TOTAL RETURN B, C 7.87% 13.80% 26.47% 41.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 82,137 $ 66,142 $ 20,902 $ 5,488
(000 omitted)
Ratio of expenses to average 1.20% A 1.23% 1.38% 1.75% A, F
net assets
Ratio of expenses to average 1.19% A, G 1.21% G 1.36% G 1.74% A, G
net assets after expense
reductions
Ratio of net investment (.02)% A .01% (.18)% (.18)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.40 $ 16.61 $ 14.05 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.04) (.05) (.04)
Net realized and unrealized 1.44 2.19 3.47 4.09
gain (loss)
Total from investment 1.42 2.15 3.42 4.05
operations
Less Distributions
From net realized gain (.37) (.37) (.87) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.45 $ 18.40 $ 16.61 $ 14.05
TOTAL RETURN B, C 7.76% 13.54% 26.17% 40.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 277,066 $ 248,442 $ 124,652 $ 50,868
(000 omitted)
Ratio of expenses to average 1.42% A 1.46% 1.54% 1.97% A
net assets
Ratio of expenses to average 1.41% A, F 1.43% F 1.52% F 1.96% A, F
net assets after expense
reductions
Ratio of net investment (.24)% A (.21)% (.31)% (.39)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.16 $ 16.47 $ 14.01 $ 11.88
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.13) (.14) (.05)
Net realized and unrealized 1.43 2.17 3.45 2.18
gain (loss)
Total from investment 1.36 2.04 3.31 2.13
operations
Less Distributions
From net realized gain (.34) (.36) (.86) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.18 $ 18.16 $ 16.47 $ 14.01
TOTAL RETURN B, C 7.52% 12.96% 25.40% 17.93%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 282,825 $ 225,441 $ 57,074 $ 6,159
(000 omitted)
Ratio of expenses to average 1.94% A 1.98% 2.13% 2.50% A, F
net assets
Ratio of expenses to average 1.93% A, G 1.96% G 2.12% G 2.49% A, G
net assets after expense
reductions
Ratio of net investment (.76)% A (.73)% (.95)% (.99)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 18.17 $ 16.49 $ 13.85
period
Income from Investment
Operations
Net investment income (loss) D (.06) (.12) (.12)
Net realized and unrealized 1.42 2.17 3.39
gain (loss)
Total from investment 1.36 2.05 3.27
operations
Less Distributions
From net realized gain (.36) (.38) (.63)
Redemption fees added to paid .00 .01 -
in capital
Net asset value, end of period $ 19.17 $ 18.17 $ 16.49
TOTAL RETURN B, C 7.52% 13.04% 24.84%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 139,698 $ 109,372 $ 19,154
(000 omitted)
Ratio of expenses to average 1.90% A 1.95% 2.18% A
net assets
Ratio of expenses to average 1.89% A, F 1.92% F 2.17% A, F
net assets after expense
reductions
Ratio of net investment (.72)% A (.70)% (1.06)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.59 $ 16.73 $ 14.12 $ 10.00
period
Income from Investment
Operations
Net investment income D .02 .05 .03 .01
Net realized and unrealized 1.47 2.21 3.47 4.11
gain (loss)
Total from investment 1.49 2.26 3.50 4.12
operations
Less Distributions
In excess of net investment (.03) - - -
income
From net realized gain (.41) (.41) (.90) -
Total distributions (.44) (.41) (.90) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.64 $ 18.59 $ 16.73 $ 14.12
TOTAL RETURN B, C 8.07% 14.17% 26.70% 41.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 31,291 $ 33,540 $ 10,424 $ 6,875
(000 omitted)
Ratio of expenses to average .94% A .97% 1.07% 1.50% A, F
net assets
Ratio of expenses to average .93% A, G .95% G 1.04% G 1.49% A, G
net assets after expense
reductions
Ratio of net investment .24% A .28% .17% .08% A
income to average net assets
Portfolio turnover 55% A 98% 85% 67% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, non-taxable dividends,
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 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $242,690,912 and $186,794,750, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 88,302 $ 114
CLASS T 629,939 767
CLASS B 1,237,757 929,250
CLASS C 602,611 476,396
$ 2,558,609 $ 1,406,527
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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. In addition,
purchases of Class A and Class T shares that were subject to a
finder's fee bear a contingent deferred sales charge on assets that do
not remain in the fund for at least one year. The Class A and Class T
contingent deferred sales charge is based on 0.25% 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. A portion of the sales charges paid to FDC is paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 219,063 $ 125,045
CLASS T 253,893 106,262
CLASS B 419,586 419,586*
CLASS C 73,882 73,882*
$ 966,424 $ 724,775
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 105,582 .30 *
CLASS T 340,167 .27 *
CLASS B 361,170 .29 *
CLASS C 153,089 .25 *
INSTITUTIONAL CLASS 47,456 .29 *
$ 1,007,464
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting 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 $12,763 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $4,307,017. The fund received cash collateral of
$4,241,550 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $51,039 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's expenses
were reduced by $432 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 10% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED
2000 JULY 31,
1999
IN EXCESS OF NET INVESTMENT
INCOME
Institutional Class $ 55,986 $ -
FROM NET REALIZED GAIN
Class A $ 1,513,615 $ 506,267
Class T 5,017,608 2,852,284
Class B 4,390,777 1,389,695
Class C 2,255,381 512,786
Institutional Class 765,715 266,502
Total $ 13,943,096 $ 5,527,534
$ 13,999,082 $ 5,527,534
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 2,923,295 $ 27,415,812
1,484,764
Reinvestment of distributions 71,806 30,315 1,377,280
Shares redeemed (929,987) (633,263) (17,101,921)
Net increase (decrease) 626,583 2,320,347 $ 11,691,171
CLASS T Shares sold 4,338,922 9,152,907 $ 79,651,020
Reinvestment of distributions 246,623 182,634 4,708,021
Shares redeemed (3,846,204) (3,336,370) (69,522,562)
Net increase (decrease) 739,341 5,999,171 $ 14,836,479
CLASS B Shares sold 4,334,762 10,129,553 $ 78,586,019
Reinvestment of distributions 198,005 81,573 3,734,386
Shares redeemed (2,199,143) (1,262,369) (39,387,081)
Net increase (decrease) 2,333,624 8,948,757 $ 42,933,324
CLASS C Shares sold 2,438,432 5,638,208 $ 44,143,328
Reinvestment of distributions 83,902 26,607 1,581,557
Shares redeemed (1,253,796) (807,853) (22,515,319)
Net increase (decrease) 1,268,538 4,856,962 $ 23,209,566
INSTITUTIONAL CLASS Shares 605,402 1,586,418 $ 11,145,305
sold
Reinvestment of distributions 30,625 16,379 588,917
Shares redeemed (846,771) (421,646) (15,597,795)
Net increase (decrease) (210,744) 1,181,151 $ (3,863,573)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 52,957,834
Reinvestment of distributions 451,389
Shares redeemed (11,335,392)
Net increase (decrease) $ 42,073,831
CLASS T Shares sold $ 163,138,613
Reinvestment of distributions 2,706,621
Shares redeemed (58,873,247)
Net increase (decrease) $ 106,971,987
CLASS B Shares sold $ 180,199,139
Reinvestment of distributions 1,199,114
Shares redeemed (22,344,687)
Net increase (decrease) $ 159,053,566
CLASS C Shares sold $ 101,276,858
Reinvestment of distributions 391,120
Shares redeemed (14,456,971)
Net increase (decrease) $ 87,211,007
INSTITUTIONAL CLASS Shares $ 28,856,815
sold
Reinvestment of distributions 244,208
Shares redeemed (7,484,244)
Net increase (decrease) $ 21,616,779
</TABLE>
ADVISOR NATURAL RESOURCES FUND - CLASS A
PERFORMANCE
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 shares' 0.50% 12b-1 fee (0.65% prior to
January 1, 1996). If Fidelity had not reimbursed certain class
expenses, the 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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - CL A -2.05% 38.72% 84.22% 219.28%
FIDELITY ADV NATURAL - CL A -7.68% 30.75% 73.63% 200.92%
(INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 225.05% 442.52%
GS Natural Resources -3.94% 31.01% n/a n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns
to the performance of both the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks - and the Goldman Sachs
Natural Resources Index - a market capitalization-weighted index of
105 stocks designed to measure the performance of companies in the
natural resource sector. Issues in the index include extractive
industries including gold and precious metals mining along with other
mineral mining, energy companies providing oil and gas services, and
owners and operators of timber tracts and forestry services. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - CL A 38.72% 13.00% 12.31%
FIDELITY ADV NATURAL - CL A 30.75% 11.67% 11.65%
(INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.59% 18.42%
GS Natural Resources 31.01% n/a n/a
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.
(checkmark)
$10,000 OVER 10 YEARS
FA Natural Resources-CL A S&P 500
00247 SP001
1990/01/31 9425.00 10000.00
1990/02/28 9866.07 10129.00
1990/03/31 10051.79 10397.42
1990/04/30 9525.60 10137.48
1990/05/31 10492.86 11125.89
1990/06/30 10361.31 11050.23
1990/07/31 10872.02 11014.87
1990/08/31 10585.71 10019.13
1990/09/30 10252.98 9531.20
1990/10/31 9517.86 9490.21
1990/11/30 9672.62 10103.28
1990/12/31 9528.18 10385.16
1991/01/31 9842.56 10837.95
1991/02/28 11261.31 11612.87
1991/03/31 10995.29 11893.90
1991/04/30 11051.72 11922.44
1991/05/31 11583.75 12437.49
1991/06/30 10914.68 11867.86
1991/07/31 11277.43 12420.90
1991/08/31 11567.63 12715.27
1991/09/30 11116.21 12502.93
1991/10/31 11374.16 12670.47
1991/11/30 10455.20 12159.85
1991/12/31 10906.79 13550.93
1992/01/31 11584.12 13298.89
1992/02/29 11844.64 13471.77
1992/03/31 11549.39 13209.07
1992/04/30 11974.89 13597.42
1992/05/31 12296.19 13664.05
1992/06/30 11896.74 13460.45
1992/07/31 12374.34 14010.98
1992/08/31 12191.99 13723.76
1992/09/30 12313.56 13885.70
1992/10/31 12053.05 13934.30
1992/11/30 12209.35 14409.46
1992/12/31 12361.19 14586.70
1993/01/31 12757.44 14709.22
1993/02/28 13115.04 14909.27
1993/03/31 13984.87 15223.86
1993/04/30 14738.71 14855.44
1993/05/31 15463.57 15253.56
1993/06/30 15676.19 15297.80
1993/07/31 15463.57 15236.61
1993/08/31 16352.72 15814.08
1993/09/30 16265.74 15692.31
1993/10/31 17000.26 16017.14
1993/11/30 16362.39 15864.97
1993/12/31 17050.90 16056.94
1994/01/31 18087.64 16602.88
1994/02/28 17523.97 16152.94
1994/03/31 16446.97 15448.67
1994/04/30 16718.73 15646.41
1994/05/31 16940.18 15903.02
1994/06/30 16638.21 15513.39
1994/07/31 17201.88 16022.23
1994/08/31 18037.31 16679.14
1994/09/30 17946.72 16270.50
1994/10/31 17674.95 16636.59
1994/11/30 16517.43 16030.68
1994/12/31 16662.26 16268.42
1995/01/31 16334.94 16690.26
1995/02/28 16815.68 17340.68
1995/03/31 17756.71 17852.40
1995/04/30 18482.93 18378.16
1995/05/31 18738.64 19112.73
1995/06/30 19270.53 19556.72
1995/07/31 20078.58 20205.22
1995/08/31 20385.44 20255.94
1995/09/30 20559.32 21110.74
1995/10/31 19689.90 21035.37
1995/11/30 20692.29 21958.82
1995/12/31 21440.07 22381.75
1996/01/31 22254.92 23143.63
1996/02/29 22805.21 23358.17
1996/03/31 23503.65 23583.11
1996/04/30 24868.79 23930.72
1996/05/31 25334.42 24547.89
1996/06/30 25175.68 24641.42
1996/07/31 23810.54 23552.76
1996/08/31 24879.37 24049.49
1996/09/30 25937.62 25403.00
1996/10/31 26572.57 26103.61
1996/11/30 27905.96 28076.78
1996/12/31 27951.74 27520.58
1997/01/31 28404.58 29240.07
1997/02/28 26525.28 29469.31
1997/03/31 25834.70 28258.42
1997/04/30 25710.16 29945.44
1997/05/31 28053.63 31768.52
1997/06/30 27963.06 33191.75
1997/07/31 29615.94 35832.82
1997/08/31 29785.75 33825.47
1997/09/30 31924.68 35678.09
1997/10/31 29958.53 34486.44
1997/11/30 27463.04 36082.82
1997/12/31 27718.85 36702.36
1998/01/31 26957.78 37108.29
1998/02/28 27919.13 39784.53
1998/03/31 29134.17 41821.90
1998/04/30 30242.39 42242.63
1998/05/31 28693.55 41516.48
1998/06/30 27505.22 43202.88
1998/07/31 25288.78 42742.77
1998/08/31 20308.46 36563.02
1998/09/30 24347.50 38905.24
1998/10/31 24473.30 42069.80
1998/11/30 23522.88 44619.65
1998/12/31 23229.36 47190.63
1999/01/31 21691.92 49164.14
1999/02/28 21062.97 47636.12
1999/03/31 25409.74 49542.04
1999/04/30 29798.44 51460.81
1999/05/31 28722.23 50245.82
1999/06/30 30329.55 53034.46
1999/07/31 30720.90 51378.72
1999/08/31 31922.90 51124.40
1999/09/30 30651.02 49723.08
1999/10/31 29449.02 52869.56
1999/11/30 29658.67 53944.39
1999/12/31 31270.48 57121.72
2000/01/31 30092.05 54251.92
IMATRL PRASUN SHR__CHT 20000131 20000216 151146 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, 1990, and the current 5.75% sales charge was paid. As the chart
shows, by January 31, 2000, the value of the investment would have
grown to $30,092 - a 200.92% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $54,252 - a 442.52%
increase. (The Goldman Sachs Natural Resources Index does not extend
as far back as the fund's start date, and therefore cannot be used for
this comparison.)
ADVISOR NATURAL RESOURCES FUND - CLASS T
PERFORMANCE
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - CL T -2.16% 38.50% 83.92% 218.76%
FIDELITY ADV NATURAL - CL T -5.59% 33.65% 77.48% 207.60%
(INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 225.05% 442.52%
GS Natural Resources -3.94% 31.01% n/a n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns
to the performance of both the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks - and the Goldman Sachs
Natural Resources Index - a market capitalization-weighted index of
105 stocks designed to measure the performance of companies in the
natural resource sector. Issues in the index include extractive
industries including gold and precious metals mining along with other
mineral mining, energy companies providing oil and gas services, and
owners and operators of timber tracts and forestry services. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - CL T 38.50% 12.96% 12.29%
FIDELITY ADV NATURAL - CL T 33.65% 12.16% 11.89%
(INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.59% 18.42%
GS Natural Resources 31.01% n/a n/a
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.
(checkmark)
$10,000 OVER 10 YEARS
FA Natural Resources-CL T S&P 500
00166 SP001
1990/01/31 9650.00 10000.00
1990/02/28 10101.60 10129.00
1990/03/31 10291.75 10397.42
1990/04/30 9753.00 10137.48
1990/05/31 10743.35 11125.89
1990/06/30 10608.66 11050.23
1990/07/31 11131.57 11014.87
1990/08/31 10838.42 10019.13
1990/09/30 10497.74 9531.20
1990/10/31 9745.07 9490.21
1990/11/30 9903.53 10103.28
1990/12/31 9755.64 10385.16
1991/01/31 10077.53 10837.95
1991/02/28 11530.15 11612.87
1991/03/31 11257.78 11893.90
1991/04/30 11315.55 11922.44
1991/05/31 11860.29 12437.49
1991/06/30 11175.24 11867.86
1991/07/31 11546.65 12420.90
1991/08/31 11843.78 12715.27
1991/09/30 11381.58 12502.93
1991/10/31 11645.69 12670.47
1991/11/30 10704.80 12159.85
1991/12/31 11167.16 13550.93
1992/01/31 11860.67 13298.89
1992/02/29 12127.40 13471.77
1992/03/31 11825.10 13209.07
1992/04/30 12260.76 13597.42
1992/05/31 12589.73 13664.05
1992/06/30 12180.74 13460.45
1992/07/31 12669.75 14010.98
1992/08/31 12483.04 13723.76
1992/09/30 12607.52 13885.70
1992/10/31 12340.78 13934.30
1992/11/30 12500.82 14409.46
1992/12/31 12656.29 14586.70
1993/01/31 13062.00 14709.22
1993/02/28 13428.13 14909.27
1993/03/31 14318.72 15223.86
1993/04/30 15090.57 14855.44
1993/05/31 15832.73 15253.56
1993/06/30 16050.43 15297.80
1993/07/31 15832.73 15236.61
1993/08/31 16743.11 15814.08
1993/09/30 16654.05 15692.31
1993/10/31 17406.10 16017.14
1993/11/30 16753.00 15864.97
1993/12/31 17457.95 16056.94
1994/01/31 18519.44 16602.88
1994/02/28 17942.32 16152.94
1994/03/31 16839.60 15448.67
1994/04/30 17117.86 15646.41
1994/05/31 17344.58 15903.02
1994/06/30 17035.41 15513.39
1994/07/31 17612.53 16022.23
1994/08/31 18467.91 16679.14
1994/09/30 18375.16 16270.50
1994/10/31 18096.90 16636.59
1994/11/30 16911.74 16030.68
1994/12/31 17060.03 16268.42
1995/01/31 16724.90 16690.26
1995/02/28 17217.12 17340.68
1995/03/31 18180.61 17852.40
1995/04/30 18924.17 18378.16
1995/05/31 19185.99 19112.73
1995/06/30 19730.57 19556.72
1995/07/31 20557.91 20205.22
1995/08/31 20872.09 20255.94
1995/09/30 21050.13 21110.74
1995/10/31 20159.95 21035.37
1995/11/30 21186.27 21958.82
1995/12/31 21951.90 22381.75
1996/01/31 22786.21 23143.63
1996/02/29 23349.63 23358.17
1996/03/31 24064.75 23583.11
1996/04/30 25462.47 23930.72
1996/05/31 25939.22 24547.89
1996/06/30 25776.69 24641.42
1996/07/31 24378.96 23552.76
1996/08/31 25473.31 24049.49
1996/09/30 26567.65 25403.00
1996/10/31 27217.76 26103.61
1996/11/30 28593.82 28076.78
1996/12/31 28651.14 27520.58
1997/01/31 29112.51 29240.07
1997/02/28 27197.82 29469.31
1997/03/31 26482.70 28258.42
1997/04/30 26378.89 29945.44
1997/05/31 28778.02 31768.52
1997/06/30 28685.74 33191.75
1997/07/31 30381.28 35832.82
1997/08/31 30565.83 33825.47
1997/09/30 32755.30 35678.09
1997/10/31 30742.55 34486.44
1997/11/30 28165.71 36082.82
1997/12/31 28425.82 36702.36
1998/01/31 27639.23 37108.29
1998/02/28 28629.25 39784.53
1998/03/31 29876.95 41821.90
1998/04/30 31002.59 42242.63
1998/05/31 29415.85 41516.48
1998/06/30 28195.27 43202.88
1998/07/31 25916.87 42742.77
1998/08/31 20817.58 36563.02
1998/09/30 24942.15 38905.24
1998/10/31 25069.55 42069.80
1998/11/30 24092.81 44619.65
1998/12/31 23795.54 47190.63
1999/01/31 22210.12 49164.14
1999/02/28 21558.96 47636.12
1999/03/31 26003.81 49542.04
1999/04/30 30491.14 51460.81
1999/05/31 29387.00 50245.82
1999/06/30 31029.05 53034.46
1999/07/31 31439.56 51378.72
1999/08/31 32656.94 51124.40
1999/09/30 31354.63 49723.08
1999/10/31 30108.94 52869.56
1999/11/30 30321.27 53944.39
1999/12/31 31978.05 57121.72
2000/01/31 30760.11 54251.92
IMATRL PRASUN SHR__CHT 20000131 20000216 153322 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, 1990, and the current 3.50% sales charge was paid. As the chart
shows, by January 31, 2000, the value of the investment would have
grown to $30,760 - a 207.60% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $54,252 - a 442.52%
increase. (The Goldman Sachs Natural Resources Index does not extend
as far back as the fund's start date, and therefore cannot be used for
this comparison.)
ADVISOR NATURAL RESOURCES FUND - CLASS B
PERFORMANCE
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 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 shares' prior 0.65% 12b-1 fee. Had Class B shares' 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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996 2000
FIDELITY ADV NATURAL - CL B -2.39% 37.78% 79.04% 210.30%
FIDELITY ADV NATURAL - CL B -7.27% 32.78% 77.04% 210.30%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 225.05% 442.52%
GS Natural Resources -3.94% 31.01% n/a n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns
to the performance of both the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks - and the Goldman Sachs
Natural Resources Index - a market capitalization-weighted index of
105 stocks designed to measure the performance of companies in the
natural resource sector. Issues in the index include extractive
industries including gold and precious metals mining along with other
mineral mining, energy companies providing oil and gas services, and
owners and operators of timber tracts and forestry services. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996 2000
FIDELITY ADV NATURAL - CL B 37.78% 12.35% 11.99%
FIDELITY ADV NATURAL - CL B 32.78% 12.10% 11.99%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.59% 18.42%
GS Natural Resources 31.01% n/a n/a
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.
(checkmark)
$10,000 OVER 10 YEARS
FA Natural Resources-CL B S&P 500
00656 SP001
1990/01/31 10000.00 10000.00
1990/02/28 10467.98 10129.00
1990/03/31 10665.02 10397.42
1990/04/30 10106.73 10137.48
1990/05/31 11133.00 11125.89
1990/06/30 10993.43 11050.23
1990/07/31 11535.30 11014.87
1990/08/31 11231.53 10019.13
1990/09/30 10878.49 9531.20
1990/10/31 10098.52 9490.21
1990/11/30 10262.73 10103.28
1990/12/31 10109.47 10385.16
1991/01/31 10443.04 10837.95
1991/02/28 11948.34 11612.87
1991/03/31 11666.09 11893.90
1991/04/30 11725.96 11922.44
1991/05/31 12290.45 12437.49
1991/06/30 11580.56 11867.86
1991/07/31 11965.44 12420.90
1991/08/31 12273.35 12715.27
1991/09/30 11794.39 12502.93
1991/10/31 12068.08 12670.47
1991/11/30 11093.05 12159.85
1991/12/31 11572.19 13550.93
1992/01/31 12290.85 13298.89
1992/02/29 12567.25 13471.77
1992/03/31 12253.99 13209.07
1992/04/30 12705.46 13597.42
1992/05/31 13046.36 13664.05
1992/06/30 12622.53 13460.45
1992/07/31 13129.28 14010.98
1992/08/31 12935.79 13723.76
1992/09/30 13064.78 13885.70
1992/10/31 12788.38 13934.30
1992/11/30 12954.22 14409.46
1992/12/31 13115.32 14586.70
1993/01/31 13535.75 14709.22
1993/02/28 13915.16 14909.27
1993/03/31 14838.05 15223.86
1993/04/30 15637.89 14855.44
1993/05/31 16406.97 15253.56
1993/06/30 16632.57 15297.80
1993/07/31 16406.97 15236.61
1993/08/31 17350.37 15814.08
1993/09/30 17258.08 15692.31
1993/10/31 18037.41 16017.14
1993/11/30 17360.63 15864.97
1993/12/31 18091.14 16056.94
1994/01/31 19191.13 16602.88
1994/02/28 18593.07 16152.94
1994/03/31 17450.36 15448.67
1994/04/30 17738.71 15646.41
1994/05/31 17973.66 15903.02
1994/06/30 17653.27 15513.39
1994/07/31 18251.33 16022.23
1994/08/31 19137.73 16679.14
1994/09/30 19041.61 16270.50
1994/10/31 18753.27 16636.59
1994/11/30 17525.12 16030.68
1994/12/31 17678.79 16268.42
1995/01/31 17331.50 16690.26
1995/02/28 17841.57 17340.68
1995/03/31 18840.01 17852.40
1995/04/30 19610.54 18378.16
1995/05/31 19881.85 19112.73
1995/06/30 20446.18 19556.72
1995/07/31 21292.68 20205.22
1995/08/31 21618.26 20255.94
1995/09/30 21781.05 21110.74
1995/10/31 20869.43 21035.37
1995/11/30 21911.28 21958.82
1995/12/31 22671.01 22381.75
1996/01/31 23535.63 23143.63
1996/02/29 24097.08 23358.17
1996/03/31 24815.72 23583.11
1996/04/30 26230.55 23930.72
1996/05/31 26702.16 24547.89
1996/06/30 26511.27 24641.42
1996/07/31 25062.75 23552.76
1996/08/31 26163.18 24049.49
1996/09/30 27274.83 25403.00
1996/10/31 27937.34 26103.61
1996/11/30 29340.94 28076.78
1996/12/31 29389.08 27520.58
1997/01/31 29843.25 29240.07
1997/02/28 27871.22 29469.31
1997/03/31 27130.22 28258.42
1997/04/30 26998.75 29945.44
1997/05/31 29448.84 31768.52
1997/06/30 29341.28 33191.75
1997/07/31 31062.31 35832.82
1997/08/31 31229.64 33825.47
1997/09/30 33456.95 35678.09
1997/10/31 31386.63 34486.44
1997/11/30 28745.64 36082.82
1997/12/31 29000.77 36702.36
1998/01/31 28187.80 37108.29
1998/02/28 29182.99 39784.53
1998/03/31 30444.50 41821.90
1998/04/30 31579.87 42242.63
1998/05/31 29953.92 41516.48
1998/06/30 28692.40 43202.88
1998/07/31 26365.61 42742.77
1998/08/31 21151.36 36563.02
1998/09/30 25352.14 38905.24
1998/10/31 25468.91 42069.80
1998/11/30 24461.83 44619.65
1998/12/31 24140.73 47190.63
1999/01/31 22520.64 49164.14
1999/02/28 21863.85 47636.12
1999/03/31 26359.22 49542.04
1999/04/30 30869.19 51460.81
1999/05/31 29759.94 50245.82
1999/06/30 31409.22 53034.46
1999/07/31 31788.70 51378.72
1999/08/31 33029.30 51124.40
1999/09/30 31686.53 49723.08
1999/10/31 30416.73 52869.56
1999/11/30 30621.07 53944.39
1999/12/31 32270.34 57121.72
2000/01/31 31029.74 54251.92
IMATRL PRASUN SHR__CHT 20000131 20000216 151355 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, 1990. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $31,030 - a 210.30% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$54,252 - a 442.52% increase. (The Goldman Sachs Natural Resources
Index does not extend as far back as the fund's start date, and
therefore cannot be used for this comparison.)
ADVISOR NATURAL RESOURCES FUND - CLASS C
PERFORMANCE
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 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 shares'
prior 0.65% 12b-1 fee. Had Class C shares' 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, 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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEAR PAST 10 YEARS
1996 2000
FIDELITY ADV NATURAL - CL C -2.37% 37.89% 78.65% 209.63%
FIDELITY ADV NATURAL - CL C -3.35% 36.89% 78.65% 209.63%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 225.05% 442.52%
GS Natural Resources -3.94% 31.01% n/a n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns
to the performance of both the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks - and the Goldman Sachs
Natural Resources Index - a market capitalization-weighted index of
105 stocks designed to measure the performance of companies in the
natural resource sector. Issues in the index include extractive
industries including gold and precious metals mining along with other
mineral mining, energy companies providing oil and gas services, and
owners and operators of timber tracts and forestry services. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996 2000
FIDELITY ADV NATURAL - CL C 37.89% 12.31% 11.97%
FIDELITY ADV NATURAL - CL C 36.89% 12.31% 11.97%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.59% 18.42%
GS Natural Resources 31.01% n/a n/a
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.
(checkmark)
$10,000 OVER 10 YEARS
FA Natural Resources-CL C S&P 500
00528 SP001
1990/01/31 10000.00 10000.00
1990/02/28 10467.98 10129.00
1990/03/31 10665.02 10397.42
1990/04/30 10106.73 10137.48
1990/05/31 11133.00 11125.89
1990/06/30 10993.43 11050.23
1990/07/31 11535.30 11014.87
1990/08/31 11231.53 10019.13
1990/09/30 10878.49 9531.20
1990/10/31 10098.52 9490.21
1990/11/30 10262.73 10103.28
1990/12/31 10109.47 10385.16
1991/01/31 10443.04 10837.95
1991/02/28 11948.34 11612.87
1991/03/31 11666.09 11893.90
1991/04/30 11725.96 11922.44
1991/05/31 12290.45 12437.49
1991/06/30 11580.56 11867.86
1991/07/31 11965.44 12420.90
1991/08/31 12273.35 12715.27
1991/09/30 11794.39 12502.93
1991/10/31 12068.08 12670.47
1991/11/30 11093.05 12159.85
1991/12/31 11572.19 13550.93
1992/01/31 12290.85 13298.89
1992/02/29 12567.25 13471.77
1992/03/31 12253.99 13209.07
1992/04/30 12705.46 13597.42
1992/05/31 13046.36 13664.05
1992/06/30 12622.53 13460.45
1992/07/31 13129.28 14010.98
1992/08/31 12935.79 13723.76
1992/09/30 13064.78 13885.70
1992/10/31 12788.38 13934.30
1992/11/30 12954.22 14409.46
1992/12/31 13115.32 14586.70
1993/01/31 13535.75 14709.22
1993/02/28 13915.16 14909.27
1993/03/31 14838.05 15223.86
1993/04/30 15637.89 14855.44
1993/05/31 16406.97 15253.56
1993/06/30 16632.57 15297.80
1993/07/31 16406.97 15236.61
1993/08/31 17350.37 15814.08
1993/09/30 17258.08 15692.31
1993/10/31 18037.41 16017.14
1993/11/30 17360.63 15864.97
1993/12/31 18091.14 16056.94
1994/01/31 19191.13 16602.88
1994/02/28 18593.07 16152.94
1994/03/31 17450.36 15448.67
1994/04/30 17738.71 15646.41
1994/05/31 17973.66 15903.02
1994/06/30 17653.27 15513.39
1994/07/31 18251.33 16022.23
1994/08/31 19137.73 16679.14
1994/09/30 19041.61 16270.50
1994/10/31 18753.27 16636.59
1994/11/30 17525.12 16030.68
1994/12/31 17678.79 16268.42
1995/01/31 17331.50 16690.26
1995/02/28 17841.57 17340.68
1995/03/31 18840.01 17852.40
1995/04/30 19610.54 18378.16
1995/05/31 19881.85 19112.73
1995/06/30 20446.18 19556.72
1995/07/31 21292.68 20205.22
1995/08/31 21618.26 20255.94
1995/09/30 21781.05 21110.74
1995/10/31 20869.43 21035.37
1995/11/30 21911.28 21958.82
1995/12/31 22671.01 22381.75
1996/01/31 23535.63 23143.63
1996/02/29 24097.08 23358.17
1996/03/31 24815.72 23583.11
1996/04/30 26230.55 23930.72
1996/05/31 26702.16 24547.89
1996/06/30 26511.27 24641.42
1996/07/31 25062.75 23552.76
1996/08/31 26163.18 24049.49
1996/09/30 27274.83 25403.00
1996/10/31 27937.34 26103.61
1996/11/30 29340.94 28076.78
1996/12/31 29389.08 27520.58
1997/01/31 29843.25 29240.07
1997/02/28 27871.22 29469.31
1997/03/31 27130.22 28258.42
1997/04/30 26998.75 29945.44
1997/05/31 29448.84 31768.52
1997/06/30 29341.28 33191.75
1997/07/31 31062.31 35832.82
1997/08/31 31229.64 33825.47
1997/09/30 33456.95 35678.09
1997/10/31 31386.63 34486.44
1997/11/30 28736.36 36082.82
1997/12/31 28988.17 36702.36
1998/01/31 28184.48 37108.29
1998/02/28 29154.45 39784.53
1998/03/31 30401.55 41821.90
1998/04/30 31523.94 42242.63
1998/05/31 29888.85 41516.48
1998/06/30 28614.04 43202.88
1998/07/31 26272.26 42742.77
1998/08/31 21089.86 36563.02
1998/09/30 25276.48 38905.24
1998/10/31 25392.23 42069.80
1998/11/30 24393.90 44619.65
1998/12/31 24075.60 47190.63
1999/01/31 22455.12 49164.14
1999/02/28 21804.04 47636.12
1999/03/31 26274.81 49542.04
1999/04/30 30803.45 51460.81
1999/05/31 29674.91 50245.82
1999/06/30 31324.32 53034.46
1999/07/31 31714.97 51378.72
1999/08/31 32944.79 51124.40
1999/09/30 31599.22 49723.08
1999/10/31 30340.46 52869.56
1999/11/30 30543.02 53944.39
1999/12/31 32180.26 57121.72
2000/01/31 30962.63 54251.92
IMATRL PRASUN SHR__CHT 20000131 20000216 151357 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, 1990. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $30,963 - a 209.63% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$54,252 - a 442.52% increase. (The Goldman Sachs Natural Resources
Index does not extend as far back as the fund's start date, and
therefore cannot be used for this comparison.)
ADVISOR NATURAL RESOURCES FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Scott Offen)
An interview with Scott Offen, Portfolio Manager of Fidelity Advisor
Natural Resources Fund
Q. SCOTT, HOW DID THE FUND PERFORM?
A. For the six months that ended January 31, 2000, the fund's Class A,
Class T, Class B and Class C shares returned -2.05%, -2.16%, -2.39%
and -2.37%, respectively. To compare, the Goldman Sachs Natural
Resources Index - an index of 105 stocks designed to measure the
performance of companies in the natural resources sector - returned
- -3.94%, and the Standard & Poor's 500 Index returned 5.59%. For the 12
months that ended January 31, 2000, the fund's Class A, Class T, Class
B and Class C shares returned 38.72%, 38.50%, 37.78% and 37.89%,
respectively, while the Goldman Sachs index returned 31.01% and the
S&P 500 had a return of 10.35%.
Q. WHY DID NATURAL RESOURCES STOCKS STUMBLE OVER THE PAST SIX MONTHS?
A. The market felt that historically high oil prices were not
sustainable, despite positive fundamentals in the energy industry,
which makes up a large proportion of the natural resources sector. In
addition, like virtually every other non-technology sector in the
market, natural resources stocks couldn't offer investors the unit
growth that many technology companies enjoyed.
Q. WHAT MOVES HAVE YOU MADE WITH THE FUND SINCE TAKING OVER AT THE
BEGINNING OF SEPTEMBER?
A. I trimmed the number of stocks in the fund to focus on what I felt
were the best ideas. In addition, with oil prices at very high levels,
I organized the portfolio to benefit from a downward trend in prices
going forward. At the same time, I turned my attention to stocks that
typically do well when the price of oil is high but trending downward,
namely dollar-wise refiners and integrated oil companies. A greater
proportion of their earnings comes from refining and marketing. As the
price of oil falls, these companies typically see their earnings rise.
I also slightly overweighted the fund relative to the index in
exploration and production stocks because they were cheap; it looked
as if investors were underestimating the sustainable price of oil. The
fund also carried a larger weighting in energy services stocks than
the index because I felt that while oil prices may fall, they should
stay high enough to stimulate increased supply.
Q. WHAT INVESTMENTS DID YOU PURSUE OUTSIDE THE ENERGY SPHERE?
A. I looked to cut back the fund's investments in gold stocks, because
it was uncertain whether or not central banks around the world would
continue to sell some of their reserves. I also reduced the fund's
investments in non-ferrous metals just at their peak, and increased
the percentage of the fund dedicated to steel investments, though
stocks in that industry moved upward but then fell back. I'd also
mention that Goldman Sachs added paper and forest products stocks to
its Natural Resources Index in January 2000. At the end of the period,
those companies were unappealing to me because it appeared they had
peaked after a rally in 1999.
Q. WHAT STOCKS PERFORMED WELL? WHICH DISAPPOINTED?
A. Alcoa was the best performer for the fund, as low inventories and
strong demand caused aluminum prices to rise. Exxon Mobil also did
well, due to the cost-cutting benefits brought on by the merger of the
two companies. The performance of the fund's two biggest oil service
companies diverged. While Schlumberger performed well, Halliburton
suffered from missing its earnings estimates. Texaco struggled for the
same reason, and USX-Marathon turned off investors because of
questions related to its corporate structure.
Q. WHAT IS YOUR OUTLOOK?
A. At the end of the period, energy stocks were cheap. Prices
reflected an expectation that oil would fall from where it stood at
around $30 per barrel to possibly as low as $16. My feeling is that
the long-term price will be higher than that. Overall, the
fundamentals for the natural resources sector remain positive. The big
question is whether or not that will help stock prices. Recently, the
market has been driven by a preference for rapid-growth stocks, mainly
in the technology sector. People once invested in natural resources
stocks because they offered potentially high rewards for taking on
some additional risk. That role has been assumed by Internet stocks.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: December 29, 1987
SIZE: as of January 31, 2000, more than
$313 million
MANAGER: Scott Offen, since September 1999;
joined Fidelity in 1985
(checkmark)
ADVISOR NATURAL RESOURCES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Exxon Mobil Corp. 7.8
Royal Dutch Petroleum Co. (NY 6.2
Shares)
Chevron Corp. 5.4
Schlumberger Ltd. 4.3
Alcoa, Inc. 3.8
Halliburton Co. 3.6
Atlantic Richfield Co. 3.3
Amerada Hess Corp. 3.0
Texaco, Inc. 2.4
USX - Marathon Group 2.4
42.2
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Oil & Gas 54.0%
Energy Services 21.8%
Metals & Mining 7.1%
Precious Metals 3.6%
Gas 2.4%
All Others* 11.1%
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 21.8
Row: 1, Col: 4, Value: 7.1
Row: 1, Col: 5, Value: 3.6
Row: 1, Col: 6, Value: 2.4
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 11.1
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR NATURAL RESOURCES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 92.0%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES -
0.2%
Barrett Resources Corp. (a) 21,400 $ 632,638
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 100 2,900
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 100 1,400
ELECTRIC UTILITY - 0.5%
Calpine Corp. (a) 23,200 1,696,500
ELECTRONIC INSTRUMENTS - 0.0%
Sequenom, Inc. 100 2,600
ELECTRONICS - 0.0%
Quantum Effect Devices, Inc. 100 1,600
ENERGY SERVICES - 21.8%
Baker Hughes, Inc. 220,150 5,421,194
BJ Services Co. (a) 45,400 1,946,525
Diamond Offshore Drilling, 24,700 683,881
Inc.
ENSCO International, Inc. 207,100 4,737,413
Global Marine, Inc. (a) 96,600 1,720,688
Halliburton Co. 308,900 11,120,400
Hanover Compressor Co. (a) 27,800 1,101,575
Helmerich & Payne, Inc. 38,300 900,050
Marine Drilling Companies, 97,750 1,881,688
Inc. (a)
McDermott International, Inc. 500 4,938
Nabors Industries, Inc. (a) 146,800 4,348,950
Noble Drilling Corp. (a) 202,300 5,929,919
R&B Falcon Corp. 15,000 190,313
Rowan Companies, Inc. (a) 40,000 907,500
Santa Fe International Corp. 15,700 419,975
Schlumberger Ltd. 221,200 13,507,025
Smith International, Inc. (a) 115,100 5,906,069
Superior Energy Services, 100,400 709,075
Inc. (a)
Tidewater, Inc. 32,000 910,000
Transocean Sedco Forex, Inc. 70,578 2,245,263
UTI Energy Corp. (a) 1 28
Weatherford International, 93,600 3,515,850
Inc. (a)
68,108,319
GAS - 2.4%
Dynegy, Inc. 112,100 3,475,100
Kinder Morgan, Inc. 155,200 4,083,700
7,558,800
IRON & STEEL - 1.1%
USX - U.S. Steel Group 142,600 3,547,175
METALS & MINING - 7.1%
Alcan Aluminium Ltd. 20,000 774,899
Alcoa, Inc. 169,300 11,798,094
Camphor Ventures, Inc. (a) 141,866 42,206
Cominco Ltd. 57,500 1,173,591
SHARES VALUE (NOTE 1)
Freeport-McMoRan Copper & 43,500 $ 696,000
Gold, Inc. (a)
Freeport-McMoRan Copper & 51,000 889,313
Gold, Inc. Class B (a)
Inco Ltd. (a) 178,300 3,367,759
Phelps Dodge Corp. 26,600 1,546,125
Reynolds Metals Co. 28,300 1,889,025
22,177,012
OIL & GAS - 54.0%
Alberta Energy Co. Ltd. 81,900 2,408,240
Amerada Hess Corp. 177,600 9,446,100
Anadarko Petroleum Corp. 109,200 3,583,125
Apache Corp. 79,000 2,883,500
Atlantic Richfield Co. 133,300 10,264,100
Burlington Resources, Inc. 26,900 862,481
Cabot Oil & Gas Corp. Class A 50,000 737,500
Canada Occidental Petroleum 103,700 2,098,609
Ltd.
Canadian Hunter Exploration 56,200 894,316
Ltd. (a)
Chevron Corp. 201,600 16,846,200
Conoco, Inc.:
Class A 85,300 1,988,556
Class B 198,602 4,679,560
Cooper Cameron Corp. (a) 20,600 1,019,700
Crestar Energy, Inc. (a) 28,900 379,908
EOG Resources, Inc. 105,300 1,671,638
Exxon Mobil Corp. 292,980 24,463,822
Forest Oil Corp. (a) 48,900 489,000
Frontier Oil Corp. (a) 685,100 5,223,888
Gulf Canada Resources Ltd. (a) 4,100 12,793
Imperial Oil Ltd. 55,600 1,082,880
Magnum Hunter Resources, Inc. 1 3
Noble Affiliates, Inc. 20,000 401,250
Nuevo Energy Co. (a) 90,700 1,677,950
Occidental Petroleum Corp. 271,700 5,400,038
Penn West Petroleum Ltd. (a) 19,800 421,247
Petro-Canada 181,900 2,718,400
Phillips Petroleum Co. 39,100 1,598,213
Pioneer Natural Resources Co. 208,700 1,786,994
Pogo Producing Co. 30,000 676,875
Prima Energy Corp. (a) 34,700 971,600
Rio Alto Exploration Ltd. (a) 75,300 950,790
Royal Dutch Petroleum Co. (NY 351,400 19,348,963
Shares)
Santa Fe Snyder Corp. (a) 485,335 3,549,012
Shell Transport & Trading Co. 128,700 941,118
PLC (Reg.)
Suncor Energy, Inc. 96,400 4,115,183
Sunoco, Inc. 132,100 3,046,556
Swift Energy Co. (a) 1 11
Talisman Energy, Inc. (a) 110,200 2,935,414
Texaco, Inc. 141,000 7,455,375
Tosco Corp. 127,300 3,270,019
Total Fina SA sponsored ADR 16,370 1,019,033
Ultramar Diamond Shamrock 70,400 1,540,000
Corp.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
OIL & GAS - CONTINUED
Union Pacific Resources 138,200 $ 1,520,200
Group, Inc.
USX - Marathon Group 286,200 7,351,763
Valero Energy Corp. 93,500 2,121,281
Vastar Resources, Inc. 20,200 1,123,625
Vintage Petroleum, Inc. 163,600 2,096,125
Wiser Oil Co. (a) 1 3
169,072,957
PAPER & FOREST PRODUCTS - 1.3%
Abitibi-Consolidated, Inc. 77,800 976,974
Bowater, Inc. 21,700 1,121,619
Consolidated Papers, Inc. 39,100 1,080,138
Domtar, Inc. 74,900 912,056
4,090,787
PRECIOUS METALS - 3.6%
Barrick Gold Corp. 30,000 485,696
Greenstone Resources Ltd. (a) 1 0
Homestake Mining Co. 25,000 165,625
Meridian Gold, Inc. (a) 283,900 1,424,067
Newmont Mining Corp. 69,400 1,414,025
Placer Dome, Inc. 313,210 2,730,443
Stillwater Mining Co. (a) 138,000 4,916,250
William Resources, Inc. 1,029,000 7
warrants 2/15/03 (a)(c)
11,136,113
TOTAL COMMON STOCKS 288,028,801
(Cost $251,677,482)
CASH EQUIVALENTS - 10.3%
Central Cash Collateral Fund, 13,602,074 13,602,074
5.56% (b)
Taxable Central Cash Fund, 18,734,922 18,734,922
5.45% (b)
TOTAL CASH EQUIVALENTS 32,336,996
(Cost $32,336,996)
TOTAL INVESTMENT PORTFOLIO - 320,365,797
102.3%
(Cost $284,014,478)
NET OTHER ASSETS - (2.3)% (7,216,911)
NET ASSETS - 100% $ 313,148,886
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) 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 $7 or
0.0% of net assets.
Distribution of investments by country of issue, as a percentage of
net assets, is as follows:
United States of America 78.5%
Canada 9.7
Netherlands 6.2
Netherlands Antilles 4.3
Others (individually less 1.3
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $287,384,177. Net unrealized appreciation
aggregated $32,981,620, of which $47,264,252 related to appreciated
investment securities and $14,282,632 related to depreciated
investment securities.
At July 31, 1999, the fund had a capital loss carryforward of
approximately $21,051,000, all of which will expire on July 31, 2007.
The fund intends to elect to defer to its fiscal year ending July 31,
2000 approximately $26,387,000 of losses recognized during the period
November 1, 1998 to July 31, 1999.
ADVISOR NATURAL RESOURCES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 320,365,797
value (cost $284,014,478) -
See accompanying schedule
Receivable for investments 19,774,173
sold
Receivable for fund shares 350,757
sold
Dividends receivable 62,821
Interest receivable 62,817
Redemption fees receivable 508
Other receivables 76,033
TOTAL ASSETS 340,692,906
LIABILITIES
Payable to custodian bank $ 3,345
Payable for investments 12,604,756
purchased
Payable for fund shares 963,286
redeemed
Accrued management fee 156,233
Distribution fees payable 156,603
Other payables and accrued 57,723
expenses
Collateral on securities 13,602,074
loaned, at value
TOTAL LIABILITIES 27,544,020
NET ASSETS $ 313,148,886
Net Assets consist of:
Paid in capital $ 321,736,042
Distributions in excess of (191,689)
net investment income
Accumulated undistributed net (44,746,432)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,350,965
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 313,148,886
CALCULATION OF MAXIMUM $21.45
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($7,296,348 (divided
by) 340,090 shares)
Maximum offering price per $22.76
share (100/94.25 of
$21.45)
CLASS T: NET ASSET VALUE $21.72
and redemption price per
share ($247,461,928 (divided
by) 11,392,336 shares)
Maximum offering price per $22.51
share (100/96.50 of
$21.72)
CLASS B: NET ASSET VALUE $21.26
and offering price per
share ($45,957,943 (divided
by) 2,161,378 shares) A
CLASS C: NET ASSET VALUE $21.36
and offering price per
share ($9,519,075 (divided
by) 445,742 shares) A
INSTITUTIONAL CLASS: NET $21.73
ASSET VALUE, offering price
and redemption price per
share ($2,913,592
(divided by) 134,080 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,139,432
Dividends
Interest 342,632
Security lending 18,984
TOTAL INCOME 2,501,048
EXPENSES
Management fee $ 994,084
Transfer agent fees 458,895
Distribution fees 984,895
Accounting and security 75,604
lending fees
Non-interested trustees' 504
compensation
Custodian fees and expenses 17,672
Registration fees 56,332
Audit 14,350
Legal 2,341
Miscellaneous 1,470
Total expenses before 2,606,147
reductions
Expense reductions (70,016) 2,536,131
NET INVESTMENT INCOME (LOSS) (35,083)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 6,253,708
(including realized loss
of $138,833 on sales of
investments in affiliated
issues)
Foreign currency transactions (16,546) 6,237,162
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (15,065,623)
Assets and liabilities in (251) (15,065,874)
foreign currencies
NET GAIN (LOSS) (8,828,712)
NET INCREASE (DECREASE) IN $ (8,863,795)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (35,083) $ 463,885
income (loss)
Net realized gain (loss) 6,237,162 (51,289,494)
Change in net unrealized (15,065,874) 105,678,595
appreciation (depreciation)
NET INCREASE (DECREASE) IN (8,863,795) 54,852,986
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (26,747) (178,918)
From net investment income
In excess of net investment (156,606) -
income
From net realized gain - (13,935,776)
TOTAL DISTRIBUTIONS (183,353) (14,114,694)
Share transactions - net (30,232,671) (88,632,291)
increase (decrease)
Redemption fees 151,952 104,288
TOTAL INCREASE (DECREASE) (39,127,867) (47,789,711)
IN NET ASSETS
NET ASSETS
Beginning of period 352,276,753 400,066,464
End of period (including $ 313,148,886 $ 352,276,753
(over) under distribution of
net investment income of
($191,689) and $28,075,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 21.98 $ 18.94 $ 26.16 $ 25.11 $ 23.65
period
Income from Investment
Operations
Net investment income (loss) D .02 .07 .06 (.05) (.00)
Net realized and unrealized (.48) 3.71 (3.33) 2.81 1.46
gain (loss)
Total from investment (.46) 3.78 (3.27) 2.76 1.46
operations
Less Distributions
From net investment income (.01) (.04) - (.10) -
In excess of net investment (.07) - - (.04) -
income
From net realized gain - (.71) (3.96) (1.57) -
Total distributions (.08) (.75) (3.96) (1.71) -
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.45 $ 21.98 $ 18.94 $ 26.16 $ 25.11
TOTAL RETURN B, C (2.05)% 21.48% (14.61)% 11.45% 6.17%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 7,296 $ 7,801 $ 6,474 $ 6,372 $ 1,609
(000 omitted)
Ratio of expenses to average 1.27% A 1.28% 1.34% 1.71% A, G 1.66% A, G
net assets
Ratio of expenses to average 1.23% A, H 1.23% H 1.30% H 1.68% A, H 1.58% A, H
net assets after expense
reductions
Ratio of net investment .22% A .38% .28% (.28)% A (.01)% A
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</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 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 NINE MONTHS ENDED JULY 31,
1997.
F FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE
OF CLASS A SHARES) TO
OCTOBER 31, 1996.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F 1995 F
Net asset value,
beginning of $ 22.21 $ 19.11 $ 26.34 $ 25.12 $ 19.25 $ 17.56
period
Income from Investment
Operations
Net investment income
(loss) D .01 .04 .02 (.02) .00 (.05)
Net realized and
unrealized (.50) 3.76 (3.34) 2.83 6.56 2.00
gain (loss)
Total from investment (.49) 3.80 (3.32) 2.81 6.56 1.95
operations
Less Distributions
From net investment income (.00) (.01) - (.01) - -
In excess of net investment(.01) - - (.01) - -
income
From net realized gain - (.70) (3.92) (1.57) (.69) (.26)
Total distributions (.01) (.71) (3.92) (1.59) (.69) (.26)
Redemption fees added to
paid .01 .01 .01 - - -
in capital
Net asset value, end of
period $ 21.72 $ 22.21 $ 19.11 $ 26.34 $ 25.12 $ 19.25
TOTAL RETURN B, C (2.16)% 21.31% (14.69)% 11.62% 35.01% 11.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 247,462 $ 283,419 $ 342,347 $ 618,083 $ 602,915 $ 272,979
(000 omitted)
Ratio of expenses to
average 1.43% A 1.45% 1.43% 1.47% A 1.59% 1.86% G
net assets
Ratio of expenses to
average 1.39% A, H 1.40% H 1.39% H 1.44% A, H 1.56% H 1.84% H
net assets after expense
reductions
Ratio of net investment .06% A .20% .10% (.12)% A .00% (.30)%
income (loss) to average
net assets
Portfolio turnover 94% A 99% 97% 116% A 137% 161%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994 F
Net asset value, beginning of $ 17.59
period
Income from Investment
Operations
Net investment income (loss) D (.11)
Net realized and unrealized .76
gain (loss)
Total from investment .65
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain (.68)
Total distributions (.68)
Redemption fees added to paid -
in capital
Net asset value, end of period $ 17.56
TOTAL RETURN B, C 3.97%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 199,361
(000 omitted)
Ratio of expenses to average 2.10%
net assets
Ratio of expenses to average 2.07% H
net assets after expense
reductions
Ratio of net investment (.67)%
income (loss) to average
net assets
Portfolio turnover 125%
</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 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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED TO OCTOBER 31.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 21.78 $ 18.81 $ 25.99 $ 24.88 $ 19.23
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.06) (.09) (.12) (.15)
Net realized and unrealized (.48) 3.68 (3.29) 2.80 6.49
gain (loss)
Total from investment (.53) 3.62 (3.38) 2.68 6.34
operations
Less Distributions
From net realized gain - (.66) (3.81) (1.57) (.69)
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.26 $ 21.78 $ 18.81 $ 25.99 $ 24.88
TOTAL RETURN B, C (2.39)% 20.57% (15.12)% 11.19% 33.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 45,958 $ 47,792 $ 44,351 $ 59,044 $ 36,106
(000 omitted)
Ratio of expenses to average 1.97% A 1.99% 1.98% 2.04% A 2.28%
net assets
Ratio of expenses to average 1.93% A, I 1.95% I 1.94% I 2.02% A, I 2.24% I
net assets after expense
reductions
Ratio of net investment (.48)% A (.34)% (.41)% (.67)% A (.68)%
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1995 G
Net asset value, beginning of $ 18.87
period
Income from Investment
Operations
Net investment income (loss) D (.03)
Net realized and unrealized .39
gain (loss)
Total from investment .36
operations
Less Distributions
From net realized gain -
Redemption fees added to paid -
in capital
Net asset value, end of period $ 19.23
TOTAL RETURN B, C 1.91%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,508
(000 omitted)
Ratio of expenses to average 2.23% A, H
net assets
Ratio of expenses to average 2.21% A, I
net assets after expense
reductions
Ratio of net investment (.67)% A
income (loss) to average net
assets
Portfolio turnover 161%
</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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED OCTOBER 31.
G FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF
CLASS B SHARES) TO OCTOBER
31, 1995.
H FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 21.92 $ 18.96 $ 24.39
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.05) (.07)
Net realized and unrealized (.48) 3.71 (4.15)
gain (loss)
Total from investment (.53) 3.66 (4.22)
operations
Less Distributions
From net investment income (.01) (.01) -
In excess of net investment (.03) - -
income
From net realized gain - (.70) (1.22)
Total distributions (.04) (.71) (1.22)
Redemption fees added to paid .01 .01 .01
in capital
Net asset value, end of period $ 21.36 $ 21.92 $ 18.96
TOTAL RETURN B, C (2.37)% 20.72% (17.72)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,519 $ 8,761 $ 2,972
(000 omitted)
Ratio of expenses to average 1.91% A 1.94% 2.50% A, F
net assets
Ratio of expenses to average 1.87% A, G 1.89% G 2.44% A, G
net assets after expense
reductions
Ratio of net investment (.42)% A (.28)% (.48)% A
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 22.28 $ 19.15 $ 26.42 $ 25.17 $ 19.27
period
Income from Investment
Operations
Net investment income (loss) D .07 .14 .13 .04 .04
Net realized and unrealized (.50) 3.76 (3.35) 2.85 6.55
gain (loss)
Total from investment (.43) 3.90 (3.22) 2.89 6.59
operations
Less Distributions
From net investment income (.02) (.07) (.09) (.05) -
In excess of net investment (.11) - - (.02) -
income
From net realized gain - (.71) (3.97) (1.57) (.69)
Total distributions (.13) (.78) (4.06) (1.64) (.69)
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.73 $ 22.28 $ 19.15 $ 26.42 $ 25.17
TOTAL RETURN B, C (1.88)% 21.95% (14.29)% 11.95% 35.13%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,914 $ 4,505 $ 3,922 $ 10,042 $ 9,860
(000 omitted)
Ratio of expenses to average .88% A .87% .95% 1.08% A 1.44%
net assets
Ratio of expenses to average .84% A, I .82% I .91% I 1.06% A, I 1.39% I
net assets after expense
reductions
Ratio of net investment .61% A .78% .55% .24% A .17%
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1995 G
Net asset value, beginning of $ 18.87
period
Income from Investment
Operations
Net investment income (loss) D (.01)
Net realized and unrealized .41
gain (loss)
Total from investment .40
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain -
Total distributions -
Redemption fees added to paid -
in capital
Net asset value, end of period $ 19.27
TOTAL RETURN B, C 2.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 718
(000 omitted)
Ratio of expenses to average 1.68% A, H
net assets
Ratio of expenses to average 1.66% A, I
net assets after expense
reductions
Ratio of net investment (.13)% A
income (loss) to average net
assets
Portfolio turnover 161%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS 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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED OCTOBER 31.
G FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES)
TO OCTOBER 31, 1995.
H FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities (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. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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) and losses deferred due to
wash sales and excise tax regulations. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 $152,378,739 and $198,879,753, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 9,721 $ 15
CLASS T 683,913 3,466
CLASS B 240,054 180,209
CLASS C 51,207 37,909
$ 984,895 $ 221,599
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 25,521 $ 8,862
CLASS T 59,983 17,403
CLASS B 87,428 87,428*
CLASS C 5,981 5,981*
$ 178,913 $ 119,674
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 13,597 .35*
CLASS T 356,096 .26*
CLASS B 72,407 .30*
CLASS C 12,607 .25*
INSTITUTIONAL CLASS 4,188 .21*
$ 458,895
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $24,286 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $13,156,443. The fund received cash collateral of
$13,602,074 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $69,637 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's
custodian fees were reduced by $379, under this arrangement.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Camphor Ventures, Inc. $ - $ 178,630 $ - $ -
</TABLE>
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,1999
2000
FROM NET INVESTMENT INCOME
Class A $ 4,145 $ 14,537
Class T 17,279 148,852
Class C 2,465 1,336
Institutional Class 2,858 14,193
Total $ 26,747 $ 178,918
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 24,268 $ -
Class T 101,169 -
Class C 14,431 -
Institutional Class 16,738 -
Total $ 156,606 $ -
FROM NET REALIZED GAIN
Class A $ - $ 234,044
Class T - 11,934,513
Class B - 1,511,499
Class C - 111,651
Institutional Class - 144,069
Total $ - $ 13,935,776
$ 183,353 $ 14,114,694
</TABLE>
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 218,537 $ 2,055,241
92,879
Reinvestment of distributions 1,260 15,021 27,004
Shares redeemed (108,948) (220,423) (2,410,348)
Net increase (decrease) (14,809) 13,135 $ (328,103)
CLASS T Shares sold 1,586,971 3,047,055 $ 36,266,486
Reinvestment of distributions 5,078 703,210 110,191
Shares redeemed (2,963,208) (8,897,934) (65,534,398)
Net increase (decrease) (1,371,159) (5,147,669) $ (29,157,721)
CLASS B Shares sold 364,264 979,053 $ 8,039,219
Reinvestment of distributions - 80,941 -
Shares redeemed (396,817) (1,224,137) (8,619,611)
Net increase (decrease) (32,553) (164,143) $ (580,392)
CLASS C Shares sold 370,747 408,624 $ 8,352,919
Reinvestment of distributions 614 5,837 13,104
Shares redeemed (325,343) (171,451) (7,047,285)
Net increase (decrease) 46,018 243,010 $ 1,318,738
INSTITUTIONAL CLASS Shares 43,600 107,128 $ 991,824
sold
Reinvestment of distributions 553 8,746 11,999
Shares redeemed (112,296) (118,487) (2,489,016)
Net increase (decrease) (68,143) (2,613) $ (1,485,193)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 4,009,679
Reinvestment of distributions 240,787
Shares redeemed (4,042,409)
Net increase (decrease) $ 208,057
CLASS T Shares sold $ 55,714,382
Reinvestment of distributions 11,405,418
Shares redeemed (157,418,593)
Net increase (decrease) $ (90,298,793)
CLASS B Shares sold $ 17,717,381
Reinvestment of distributions 1,294,263
Shares redeemed (21,780,799)
Net increase (decrease) $ (2,769,155)
CLASS C Shares sold $ 7,488,770
Reinvestment of distributions 93,864
Shares redeemed (3,264,239)
Net increase (decrease) $ 4,318,395
INSTITUTIONAL CLASS Shares $ 1,948,930
sold
Reinvestment of distributions 141,597
Shares redeemed (2,181,322)
Net increase (decrease) $ (90,795)
</TABLE>
ADVISOR TECHNOLOGY FUND - CLASS A
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL A 46.80% 57.87% 311.94%
FIDELITY ADV TECHNOLOGY - CL 38.35% 48.79% 288.25%
A (INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Technology 41.54% 52.68% 347.46%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Technology Index - a market
capitalization-weighted index of 185 stocks designed to measure the
performance of companies in the technology sector. Issues in the index
include producers of sophisticated devices, services and software
related to the fields of computers, electronics, networking and
Internet services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL A 57.87% 51.44%
FIDELITY ADV TECHNOLOGY - CL 48.79% 48.84%
A (INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Technology 52.68% 55.16%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Technology -CL A S&P 500 GS Technology
00187 SP001 GS008
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 10480.60 10516.69 11083.33
1996/10/31 10584.28 10806.74 11005.93
1996/11/30 12007.45 11623.62 12484.68
1996/12/31 11770.98 11393.36 12085.30
1997/01/31 13089.41 12105.21 13401.78
1997/02/28 12178.84 12200.12 12346.74
1997/03/31 11448.49 11698.81 11700.17
1997/04/30 12121.93 12397.23 12745.92
1997/05/31 13487.78 13151.98 14042.99
1997/06/30 13620.57 13741.19 14224.25
1997/07/31 15138.19 14834.57 16770.21
1997/08/31 15583.99 14003.54 16383.11
1997/09/30 16235.26 14770.51 16876.01
1997/10/31 13883.05 14277.18 15423.60
1997/11/30 13682.86 14938.07 15675.33
1997/12/31 12996.44 15194.56 14927.75
1998/01/31 13717.28 15362.61 15702.74
1998/02/28 15275.58 16470.56 17407.22
1998/03/31 15254.38 17314.02 17691.17
1998/04/30 15858.62 17488.19 18693.45
1998/05/31 14724.35 17187.57 17416.86
1998/06/30 15858.62 17885.73 18931.40
1998/07/31 15773.82 17695.25 19348.25
1998/08/31 13356.86 15136.87 15845.13
1998/09/30 15339.19 16106.54 18099.82
1998/10/31 16219.05 17416.64 19431.16
1998/11/30 18434.59 18472.27 21695.15
1998/12/31 21742.00 19536.64 25251.29
1999/01/31 24593.59 20353.66 29307.61
1999/02/28 22240.23 19721.07 25789.36
1999/03/31 24848.00 20510.11 27994.44
1999/04/30 25038.81 21304.46 28876.92
1999/05/31 24201.36 20801.47 28562.51
1999/06/30 26936.34 21955.95 31922.25
1999/07/31 26448.70 21270.48 31614.43
1999/08/31 27741.99 21165.19 33261.48
1999/09/30 27649.45 20585.06 33593.44
1999/10/31 29572.79 21887.68 34783.42
1999/11/30 33719.65 22332.66 39644.67
1999/12/31 41283.55 23648.05 47692.15
2000/01/31 38825.40 22459.97 44746.18
IMATRL PRASUN SHR__CHT 20000131 20000216 153415 R00000000000044
</TABLE>
$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 5.75% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $38,825 - a 288.25% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Technology Index, it would have grown to $44,746 - a 347.46%
increase.
ADVISOR TECHNOLOGY FUND - CLASS T
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL T 46.63% 57.44% 307.89%
FIDELITY ADV TECHNOLOGY - CL 41.49% 51.92% 293.62%
T (INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Technology 41.54% 52.68% 347.46%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Technology Index - a market
capitalization-weighted index of 185 stocks designed to measure the
performance of companies in the technology sector. Issues in the index
include producers of sophisticated devices, services and software
related to the fields of computers, electronics, networking and
Internet services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL T 57.44% 51.01%
FIDELITY ADV TECHNOLOGY - CL 51.92% 49.44%
T (INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Technology 52.68% 55.16%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Technology -CL T S&P 500 GS Technology
00192 SP001 GS008
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 10721.15 10516.69 11083.33
1996/10/31 10817.65 10806.74 11005.93
1996/11/30 12274.80 11623.62 12484.68
1996/12/31 12022.98 11393.36 12085.30
1997/01/31 13372.89 12105.21 13401.78
1997/02/28 12440.58 12200.12 12346.74
1997/03/31 11683.07 11698.81 11700.17
1997/04/30 12372.59 12397.23 12745.92
1997/05/31 13771.07 13151.98 14042.99
1997/06/30 13897.32 13741.19 14224.25
1997/07/31 15451.17 14834.57 16770.21
1997/08/31 15907.62 14003.54 16383.11
1997/09/30 16564.69 14770.51 16876.01
1997/10/31 14167.57 14277.18 15423.60
1997/11/30 13962.69 14938.07 15675.33
1997/12/31 13249.04 15194.56 14927.75
1998/01/31 13975.46 15362.61 15702.74
1998/02/28 15558.40 16470.56 17407.22
1998/03/31 15525.88 17314.02 17691.17
1998/04/30 16143.87 17488.19 18693.45
1998/05/31 14983.77 17187.57 17416.86
1998/06/30 16143.87 17885.73 18931.40
1998/07/31 16046.30 17695.25 19348.25
1998/08/31 13585.14 15136.87 15845.13
1998/09/30 15590.93 16106.54 18099.82
1998/10/31 16479.98 17416.64 19431.16
1998/11/30 18735.13 18472.27 21695.15
1998/12/31 22096.18 19536.64 25251.29
1999/01/31 25001.86 20353.66 29307.61
1999/02/28 22594.92 19721.07 25789.36
1999/03/31 25251.23 20510.11 27994.44
1999/04/30 25435.55 21304.46 28876.92
1999/05/31 24589.86 20801.47 28562.51
1999/06/30 27354.60 21955.95 31922.25
1999/07/31 26845.02 21270.48 31614.43
1999/08/31 28156.91 21165.19 33261.48
1999/09/30 28052.66 20585.06 33593.44
1999/10/31 30005.33 21887.68 34783.42
1999/11/30 34205.85 22332.66 39644.67
1999/12/31 41859.06 23648.05 47692.15
2000/01/31 39361.72 22459.97 44746.18
IMATRL PRASUN SHR__CHT 20000131 20000216 162713 R00000000000044
</TABLE>
$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 3.50% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $39,362 - a 293.62% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Technology Index, it would have grown to $44,746 - a 347.46%
increase.
ADVISOR TECHNOLOGY FUND - CLASS B
PERFORMANCE
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
shares' 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 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL B 46.22% 56.74% 301.75%
FIDELITY ADV TECHNOLOGY - CL 41.22% 51.74% 298.75%
B (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Technology 41.54% 52.68% 347.46%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to the performance of the Standard & Poor's
500 Index - a market capitalization-weighted index of common stocks -
and the Goldman Sachs Technology Index - a market
capitalization-weighted index of 185 stocks designed to measure the
performance of companies in the technology sector. Issues in the index
include producers of sophisticated devices, services and software
related to the fields of computers, electronics, networking and
Internet services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL B 56.74% 50.34%
FIDELITY ADV TECHNOLOGY - CL 51.74% 50.01%
B (INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Technology 52.68% 55.16%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Technology -CL B S&P 500 GS Technology
00197 SP001 GS008
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 11110.00 10516.69 11083.33
1996/10/31 11210.00 10806.74 11005.93
1996/11/30 12720.00 11623.62 12484.68
1996/12/31 12459.04 11393.36 12085.30
1997/01/31 13857.92 12105.21 13401.78
1997/02/28 12891.79 12200.12 12346.74
1997/03/31 12116.87 11698.81 11700.17
1997/04/30 12821.34 12397.23 12745.92
1997/05/31 14260.47 13151.98 14042.99
1997/06/30 14391.30 13741.19 14224.25
1997/07/31 15981.39 14834.57 16770.21
1997/08/31 16454.39 14003.54 16383.11
1997/09/30 17124.90 14770.51 16876.01
1997/10/31 14635.94 14277.18 15423.60
1997/11/30 14412.57 14938.07 15675.33
1997/12/31 13670.35 15194.56 14927.75
1998/01/31 14412.33 15362.61 15702.74
1998/02/28 16042.43 16470.56 17407.22
1998/03/31 16008.70 17314.02 17691.17
1998/04/30 16627.02 17488.19 18693.45
1998/05/31 15424.12 17187.57 17416.86
1998/06/30 16604.53 17885.73 18931.40
1998/07/31 16503.35 17695.25 19348.25
1998/08/31 13962.65 15136.87 15845.13
1998/09/30 16019.95 16106.54 18099.82
1998/10/31 16930.55 17416.64 19431.16
1998/11/30 19235.18 18472.27 21695.15
1998/12/31 22675.25 19536.64 25251.29
1999/01/31 25631.91 20353.66 29307.61
1999/02/28 23158.66 19721.07 25789.36
1999/03/31 25868.00 20510.11 27994.44
1999/04/30 26059.11 21304.46 28876.92
1999/05/31 25170.99 20801.47 28562.51
1999/06/30 27992.75 21955.95 31922.25
1999/07/31 27475.61 21270.48 31614.43
1999/08/31 28790.93 21165.19 33261.48
1999/09/30 28683.57 20585.06 33593.44
1999/10/31 30661.75 21887.68 34783.42
1999/11/30 34936.03 22332.66 39644.67
1999/12/31 42738.02 23648.05 47692.15
2000/01/31 39875.00 22459.97 44746.18
IMATRL PRASUN SHR__CHT 20000131 20000216 153414 R00000000000044
</TABLE>
$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, 2000,
the value of the investment, including the effect of the contingent
deferred sales charge, would have grown to $39,875 - a 298.75%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $22,460 - a 124.60% increase. If $10,000 was
invested in the Goldman Sachs Technology Index, it would have grown to
$44,746 - a 347.46% increase.
ADVISOR TECHNOLOGY FUND - CLASS C
PERFORMANCE
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 shares' 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 life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL C 46.22% 56.72% 301.47%
FIDELITY ADV TECHNOLOGY - CL 45.22% 55.72% 301.47%
C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Technology 41.54% 52.68% 347.46%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Technology Index - a market
capitalization-weighted index of 185 stocks designed to measure the
performance of companies in the technology sector. Issues in the index
include producers of sophisticated devices, services and software
related to the fields of computers, electronics, networking and
Internet services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - CL C 56.72% 50.31%
FIDELITY ADV TECHNOLOGY - CL 55.72% 50.31%
C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 10.35% 26.77%
GS Technology 52.68% 55.16%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Technology -CL C S&P 500 GS Technology
00476 SP001 GS008
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 11110.00 10516.69 11083.33
1996/10/31 11210.00 10806.74 11005.93
1996/11/30 12720.00 11623.62 12484.68
1996/12/31 12459.04 11393.36 12085.30
1997/01/31 13857.92 12105.21 13401.78
1997/02/28 12891.79 12200.12 12346.74
1997/03/31 12116.87 11698.81 11700.17
1997/04/30 12821.34 12397.23 12745.92
1997/05/31 14260.47 13151.98 14042.99
1997/06/30 14391.30 13741.19 14224.25
1997/07/31 15981.39 14834.57 16770.21
1997/08/31 16454.39 14003.54 16383.11
1997/09/30 17124.90 14770.51 16876.01
1997/10/31 14635.94 14277.18 15423.60
1997/11/30 14426.16 14938.07 15675.33
1997/12/31 13677.73 15194.56 14927.75
1998/01/31 14406.46 15362.61 15702.74
1998/02/28 16043.30 16470.56 17407.22
1998/03/31 15998.46 17314.02 17691.17
1998/04/30 16615.07 17488.19 18693.45
1998/05/31 15415.47 17187.57 17416.86
1998/06/30 16592.65 17885.73 18931.40
1998/07/31 16480.54 17695.25 19348.25
1998/08/31 13958.01 15136.87 15845.13
1998/09/30 16009.67 16106.54 18099.82
1998/10/31 16906.57 17416.64 19431.16
1998/11/30 19216.08 18472.27 21695.15
1998/12/31 22657.94 19536.64 25251.29
1999/01/31 25617.71 20353.66 29307.61
1999/02/28 23151.23 19721.07 25789.36
1999/03/31 25853.14 20510.11 27994.44
1999/04/30 26043.74 21304.46 28876.92
1999/05/31 25158.05 20801.47 28562.51
1999/06/30 27983.28 21955.95 31922.25
1999/07/31 27456.35 21270.48 31614.43
1999/08/31 28779.28 21165.19 33261.48
1999/09/30 28660.15 20585.06 33593.44
1999/10/31 30645.21 21887.68 34783.42
1999/11/30 34920.74 22332.66 39644.67
1999/12/31 42728.44 23648.05 47692.15
2000/01/31 40147.45 22459.97 44746.18
IMATRL PRASUN SHR__CHT 20000131 20000224 154008 R00000000000044
</TABLE>
$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, 2000,
the value of the investment would have grown to $40,147 - a 301.47%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $22,460 - a 124.60% increase. If $10,000 was
invested in the Goldman Sachs Technology Index, it would have grown to
$44,746 - a 347.46% increase.
ADVISOR TECHNOLOGY FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Larry Rakers)
NOTE TO SHAREHOLDERS: Larry Rakers became Portfolio Manager of
Fidelity Advisor Technology Fund on January 4, 2000.
Q. HOW DID THE FUND PERFORM, LARRY?
A. For the six-month period that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares posted returns of 46.80%,
46.63%, 46.22% and 46.22%, respectively. This performance topped the
41.54% return of the Goldman Sachs Technology Index - an index of 185
stocks designed to measure the performance of companies in the
technology sector - and the Standard & Poor's 500 Index, which
returned 5.59%. For the year that ended January 31, 2000, the fund's
Class A, Class T, Class B and Class C shares returned 57.87%, 57.44%,
56.74% and 56.72%, respectively, outpacing the Goldman Sachs and S&P
500 indexes, which posted respective returns of 52.68% and 10.35%.
Q. WHAT FACTORS ENABLED THE FUND TO OUTPERFORM THE GOLDMAN SACHS INDEX
DURING THE SIX-MONTH PERIOD?
A. The decision to remain underweighted in many lagging computer
hardware manufacturers relative to the index paid off nicely for the
fund. Having no exposure to IBM and holding considerably less Dell
than the index really helped. Many of the key players in this space
were hurt by declining sales attributed to component shortages and
Y2K-related shortfalls. Another key was the overweighting in leading
communications equipment and Internet infrastructure names such as
Ericsson, Qualcomm, Nortel Networks and JDS Uniphase. Some good picks
within Internet services, namely Exodus Communications and Akamai
Technologies, further bolstered relative performance.
Q. WHAT CHANGES HAVE YOU MADE SINCE TAKING OVER THE FUND?
A. I haven't made any significant changes to the prevailing themes I
just outlined. The basic premise behind the fund's current positioning
is the same. It remains simply a function of where we perceive the
highest growth rates to be in the technology group, which hasn't
changed much in recent months. On the margin, though, I stepped up our
exposure to optical networking, an area I feel houses some of the best
growth prospects in the sector.
Q. TECHNOLOGY LED ALL OTHER SEGMENTS OF THE MARKET BY WIDE MARGINS
OVER THE PAST SIX MONTHS. WHAT HELPED FUEL THIS DISPARITY?
A. Simply put, it was relative growth rates. Investors rallied around
the group's superior earnings growth potential relative to all other
areas of the market, respectful of the power of the Internet to
reshape the face of the domestic economy and permanently alter the way
business is transacted. The market's confidence in the sector was so
strong that even markedly higher interest rates - typically a nemesis
of growth stocks - couldn't tame the bullishness.
Q. HOW DID OTHER STRATEGIES PLAY OUT FOR THE FUND?
A. Having exposure to software companies that provide Internet
infrastructure, such as Vignette and i2 Technologies, gave us a nice
lift. We weren't as fortunate with some of our holdings in computer
peripherals, namely Electronics for Imaging, and software utilities
companies such as BMC Software, which drifted lower alongside computer
stocks. The fund's underexposure to some of the period's biggest
winners, namely Sun Microsystems, Yahoo!, Intel and Oracle, also
dampened relative performance.
Q. WHICH STOCKS HELPED THE MOST? WHICH HURT?
A. The market rewarded JDS Uniphase, a top manufacturer of optical
network components, for its leadership position in the race for higher
bandwidth - a measure of transmission speed and capacity to deliver
data, voice and video. Exodus rose sharply on strong demand for its
Web hosting services from companies looking to bring their businesses
to the Internet. Gateway was one of the few stars in the computer
industry, benefiting in the months leading up to Y2K from selling
exclusively to consumers, a group seemingly less affected than
corporations by the millennium changeover. In terms of detractors,
Electronics for Imaging - a provider of printer-related products -
stumbled in response to weak earnings posted by Xerox, its largest
customer. BMC was felled by slowing sales related to Y2K and a
salesforce restructuring. An out-of- benchmark position in computer
hardware wholesaler Ingram Micro also hurt.
Q. WHAT'S YOUR OUTLOOK?
A. I expect much of the same in terms of strategy in the coming
months. That is, I'll likely maintain the fund's overweighting in
communications equipment and Internet infrastructure at the expense of
computer systems and hardware. I'll continue to be mindful of
valuations and relative growth rates to help me further hone my
industry positioning. With regard to security selection, I will rely
heavily on my team of 20 analysts to support me in my quest to uncover
the best stocks in a rapidly changing sector.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$2.4 billion
MANAGER: Larry Rakers, since January 2000;
joined Fidelity in 1993
(checkmark)
ADVISOR TECHNOLOGY FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Cisco Systems, Inc. 7.6
Microsoft Corp. 6.3
Motorola, Inc. 4.8
Oracle Corp. 3.6
Lucent Technologies, Inc. 3.3
EMC Corp. 2.9
Hewlett-Packard Co. 2.2
Texas Instruments, Inc. 2.1
Nortel Networks Corp. 2.0
Intuit, Inc. 1.9
36.7
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Computer Services & Software 37.2%
Electronics 19.2%
Communications Equipment 16.5%
Computers & Office Equipment 13.5%
Cellular 1.1%
All Others * 12.5%
Row: 1, Col: 1, Value: 37.2
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 19.2
Row: 1, Col: 4, Value: 16.5
Row: 1, Col: 5, Value: 13.5
Row: 1, Col: 6, Value: 1.1
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 12.5
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR TECHNOLOGY FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.0%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.0%
DoubleClick, Inc. (a) 190,000 $ 18,774,375
Internet Capital Group, Inc. 50,000 5,950,000
L90, Inc. 2,700 60,750
24,785,125
BROADCASTING - 0.1%
American Tower Corp. Class A 88,700 3,159,938
(a)
Regent Communication, Inc. 3,000 35,250
3,195,188
CELLULAR - 1.1%
QUALCOMM, Inc. (a) 204,000 25,908,000
COMMUNICATIONS EQUIPMENT -
16.5%
Cisco Systems, Inc. (a) 1,728,850 189,309,061
Efficient Networks, Inc. 56,500 4,318,719
Globalstar Telecommunications 156,600 5,158,013
Ltd. (a)
Jabil Circuit, Inc. (a) 143,900 9,101,675
Lucent Technologies, Inc. 1,476,538 81,578,725
Nokia AB sponsored ADR 120,400 22,033,200
Nortel Networks Corp. 528,370 50,119,021
Telefonaktiebolaget LM 546,300 40,733,494
Ericsson sponsored ADR
Tellabs, Inc. (a) 144,900 7,824,600
Tollgrade Communications, 12,500 726,563
Inc. (a)
Turnstone Systems, Inc. 1,000 29,000
410,932,071
COMPUTER SERVICES & SOFTWARE
- - 37.2%
Adobe Systems, Inc. 49,200 2,709,075
Affiliated Computer Services, 131,200 5,215,200
Inc. Class A (a)
Akamai Technologies, Inc. 80,800 20,129,300
Amazon.com, Inc. (a) 211,600 13,661,425
Amdocs Ltd. (a) 139,200 7,403,700
America Online, Inc. (a) 624,400 35,551,775
Ariba, Inc. 59,000 9,594,875
At Home Corp. Series A (a) 169,400 6,106,341
Automatic Data Processing, 383,200 18,178,050
Inc.
BEA Systems, Inc. (a) 355,800 26,818,425
BMC Software, Inc. (a) 304,100 11,517,788
Breakaway Solutions, Inc. 51,800 4,483,938
BroadVision, Inc. (a) 20,000 2,546,250
Cadence Design Systems, Inc. 150,000 3,093,750
(a)
Cambridge Technology 369,300 7,409,081
Partners, Inc. (a)
Caminus Corp. 1,800 40,050
Check Point Software 20,000 2,203,438
Technologies Ltd. (a)
Citrix Systems, Inc. (a) 130,500 17,911,125
Clarify, Inc. (a) 32,000 3,890,000
CMGI, Inc. (a) 131,200 14,768,200
SHARES VALUE (NOTE 1)
CNET, Inc. (a) 40,000 $ 1,960,000
Commerce One, Inc. 80,000 13,780,000
Computer Associates 455,600 31,294,025
International, Inc.
Computer Sciences Corp. (a) 111,500 10,244,063
Compuware Corp. (a) 82,300 1,743,731
CyberSource Corp. 16,200 569,025
Digital Insight Corp. 81,200 3,481,450
DST Systems, Inc. (a) 258,500 16,059,313
E.piphany, Inc. 14,300 2,259,400
eBay, Inc. (a) 58,800 8,823,675
Electronic Data Systems Corp. 58,200 3,935,775
Electronics for Imaging, Inc. 548,400 25,706,250
(a)
Engage Technologies, Inc. 20,000 2,600,000
Exodus Communications, Inc. 312,000 35,841,000
(a)
Extensity, Inc. 1,600 92,600
F5 Networks, Inc. 40,500 3,807,000
HealthGate Data Corp. 2,200 23,788
i2 Technologies, Inc. (a) 68,500 13,194,813
IMS Health, Inc. 75,900 1,703,006
Inktomi Corp. (a) 77,200 7,676,575
Intertrust Technologies Corp. 71,800 10,366,125
Intuit, Inc. (a) 776,800 46,850,750
J. D. Edwards & Co. (a) 65,000 1,937,813
Legato Systems, Inc. (a) 127,500 3,211,406
Lycos, Inc. (a) 50,000 3,671,875
Mercury Interactive Corp. (a) 30,000 3,281,250
Micromuse, Inc. (a) 61,000 9,954,438
Microsoft Corp. (a) 1,604,600 157,050,225
NCR Corp. (a) 29,400 1,131,900
Networks Associates, Inc. (a) 150,000 3,890,625
New Era of Networks, Inc. (a) 87,800 4,582,063
Oracle Corp. (a) 1,797,000 89,765,766
Peregrine Systems, Inc. (a) 45,000 3,417,188
Phone.com, Inc. 50,000 5,500,000
Portal Software, Inc. 41,200 2,044,550
Proxicom, Inc. 109,000 11,009,000
PSINet, Inc. (a) 20,000 1,597,500
Rational Software Corp. (a) 60,000 3,120,000
RealNetworks, Inc. (a) 125,900 19,789,906
Redback Networks, Inc. 116,400 21,672,225
Sabre Group Holdings, Inc. 115,000 5,117,500
Class A (a)
Siebel Systems, Inc. (a) 164,800 15,110,100
Silknet Software, Inc. 35,000 5,166,875
Software.com, Inc. 30,000 2,036,250
Unisys Corp. (a) 393,500 12,542,813
Usinternetworking, Inc. 87,200 3,793,200
Verio, Inc. (a) 45,000 2,896,875
VeriSign, Inc. (a) 90,700 14,636,713
VERITAS Software Corp. (a) 219,250 31,983,094
Vignette Corp. 126,000 24,570,000
Yahoo!, Inc. (a) 25,000 8,051,563
927,776,863
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT
- - 13.5%
Adaptec, Inc. (a) 100,000 $ 5,237,500
Advanced Digital Information 31,900 1,563,100
Corp. (a)
Alteon Websystems, Inc. 30,000 2,951,250
Apple Computer, Inc. (a) 43,200 4,482,000
Compaq Computer Corp. 733,300 20,074,088
Comverse Technology, Inc. (a) 148,700 21,319,863
Dell Computer Corp. (a) 825,400 31,726,313
EMC Corp. (a) 686,500 73,112,250
Emulex Corp. (a) 158,800 15,880,000
Gateway, Inc. (a) 214,800 13,143,075
Globix Corp. (a) 20,000 1,707,500
Hewlett-Packard Co. 494,800 53,562,100
Ingram Micro, Inc. Class A (a) 26,500 303,094
Juniper Networks, Inc. 209,600 28,361,500
Lexmark International Group, 78,300 7,379,775
Inc. Class A (a)
Network Appliance, Inc. (a) 263,600 26,458,850
SCI Systems, Inc. (a) 45,900 3,304,800
Sun Microsystems, Inc. (a) 285,000 22,390,313
Symbol Technologies, Inc. 54,000 3,223,125
T/R Systems, Inc. 3,300 39,806
336,220,302
CONSUMER ELECTRONICS - 0.4%
Gemstar International Group 163,200 10,832,400
Ltd. (a)
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 1,700 23,800
ELECTRICAL EQUIPMENT - 0.5%
American Power Conversion 85,300 2,353,747
Corp. (a)
Furukawa Electric Co. Ltd. 463,000 6,775,925
InterWAVE Communications 1,000 36,500
International Ltd.
Pinnacle Systems (a) 42,500 2,071,875
11,238,047
ELECTRONIC INSTRUMENTS - 0.8%
Agilent Technologies, Inc. 150,200 9,941,363
Cohu, Inc. 50,000 2,062,500
Lernout & Hauspie Speech 117,000 5,499,000
Products NV (a)
Sawtek, Inc. (a) 35,500 2,245,375
Sequenom, Inc. 900 23,400
19,771,638
SHARES VALUE (NOTE 1)
ELECTRONICS - 19.2%
Altera Corp. (a) 226,800 $ 14,912,100
Analog Devices, Inc. (a) 167,700 15,679,950
Applied Micro Circuits Corp. 104,000 15,366,000
(a)
AVX Corp. 237,100 14,107,450
Broadcom Corp. Class A (a) 58,600 16,953,713
Brocade Communications 110,700 17,933,400
Systems, Inc.
Conexant Systems, Inc. (a) 149,300 12,615,850
Cree Research, Inc. (a) 33,000 3,106,125
E Tek Dynamics, Inc. 20,000 3,640,000
Flextronics International 40,000 1,987,500
Ltd. (a)
Intel Corp. 310,000 30,670,625
JDS Uniphase Corp. (a) 167,600 34,179,925
KEMET Corp. (a) 423,200 20,128,450
Linear Technology Corp. 97,000 9,184,688
LSI Logic Corp. (a) 111,900 9,147,825
Maxim Integrated Products, 160,800 8,060,100
Inc. (a)
Microchip Technology, Inc. (a) 28,400 1,785,650
Micron Technology, Inc. (a) 25,000 1,554,688
Motorola, Inc. 884,289 120,926,521
National Semiconductor Corp. 82,100 4,310,250
(a)
PMC-Sierra, Inc. (a) 40,500 7,310,250
QLogic Corp. (a) 103,700 15,859,619
Quantum Effect Devices, Inc. 1,200 19,200
RF Micro Devices, Inc. (a) 40,600 3,288,600
Solectron Corp. (a) 165,000 11,983,125
STMicroelectronics NV 124,800 21,013,200
Texas Instruments, Inc. 479,600 51,736,850
Vitesse Semiconductor Corp. 164,000 7,134,000
(a)
Xilinx, Inc. (a) 105,160 4,811,070
479,406,724
MEDICAL EQUIPMENT & SUPPLIES
- - 0.0%
Aspect Medical Systems, Inc. 400 11,200
PACKAGING & CONTAINERS - 0.9%
Corning, Inc. 140,000 21,595,000
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.0%
Neoforma.com, Inc. 1,600 80,500
SERVICES - 0.8%
Diamond Technology Partners, 235,900 19,329,056
Inc. Class A (a)
Gartner Group, Inc. Class B 30,089 409,963
(a)
19,739,019
TOTAL COMMON STOCKS 2,291,515,877
(Cost $1,729,632,727)
CASH EQUIVALENTS - 10.3%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 40,297,538 $ 40,297,538
5.56% (b)
Taxable Central Cash Fund, 217,016,168 217,016,168
5.45% (b)
TOTAL CASH EQUIVALENTS 257,313,706
(Cost $257,313,706)
TOTAL INVESTMENT PORTFOLIO - 2,548,829,583
102.3%
(Cost $1,986,946,433)
NET OTHER ASSETS - (2.3)% (56,927,010)
NET ASSETS - 100% $ 2,491,902,573
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $1,999,015,452. Net unrealized appreciation
aggregated $549,814,131, of which $647,565,967 related to appreciated
investment securities and $97,751,836 related to depreciated
investment securities.
ADVISOR TECHNOLOGY FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,548,829,583
value (cost $1,986,946,433)
- - See accompanying schedule
Receivable for investments 1,084,690
sold
Receivable for fund shares 29,973,028
sold
Dividends receivable 68,646
Interest receivable 1,030,710
Redemption fees receivable 2,536
Other receivables 102,605
TOTAL ASSETS 2,581,091,798
LIABILITIES
Payable for investments $ 38,579,126
purchased
Payable for fund shares 7,001,406
redeemed
Accrued management fee 1,149,854
Distribution fees payable 1,412,219
Other payables and accrued 749,082
expenses
Collateral on securities 40,297,538
loaned, at value
TOTAL LIABILITIES 89,189,225
NET ASSETS $ 2,491,902,573
Net Assets consist of:
Paid in capital $ 1,866,680,807
Accumulated net investment (6,903,010)
loss
Accumulated undistributed net 70,241,626
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 561,883,150
(depreciation) on investments
NET ASSETS $ 2,491,902,573
CALCULATION OF MAXIMUM $34.59
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($265,669,245 (divided
by) 7,681,578 shares)
Maximum offering price per $36.70
share (100/94.25 of $34.59)
CLASS T: NET ASSET VALUE $34.36
and redemption price per
share ($923,464,936 (divided
by) 26,875,925 shares)
Maximum offering price per $35.61
share (100/96.50 of $34.36)
CLASS B: NET ASSET VALUE $33.86
and offering price per
share ($934,704,383 (divided
by) 27,608,455 shares) A
CLASS C: NET ASSET VALUE $33.91
and offering price per
share ($305,476,868 (divided
by) 9,007,353 shares) A
INSTITUTIONAL CLASS: NET $34.73
ASSET VALUE, offering price
and redemption price per
share ($62,587,141
(divided by) 1,802,082
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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 515,780
Dividends
Interest 4,147,441
Security lending 256,058
TOTAL INCOME 4,919,279
EXPENSES
Management fee $ 4,209,651
Transfer agent fees 1,870,724
Distribution fees 5,074,684
Accounting and security 219,840
lending fees
Non-interested trustees' 1,706
compensation
Custodian fees and expenses 23,343
Registration fees 461,177
Audit 14,284
Legal 5,492
Miscellaneous 3,899
Total expenses before 11,884,800
reductions
Expense reductions (62,511) 11,822,289
NET INVESTMENT INCOME (LOSS) (6,903,010)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 90,483,725
Foreign currency transactions 4,237 90,487,962
Change in net unrealized 440,895,528
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 531,383,490
NET INCREASE (DECREASE) IN $ 524,480,480
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (6,903,010) $ (3,282,503)
income (loss)
Net realized gain (loss) 90,487,962 51,119,572
Change in net unrealized 440,895,528 107,259,307
appreciation (depreciation)
NET INCREASE (DECREASE) IN 524,480,480 155,096,376
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (61,161,116) -
from net realized gains
Share transactions - net 1,164,428,435 557,638,871
increase (decrease)
Redemption fees 391,334 259,288
TOTAL INCREASE (DECREASE) 1,628,139,133 712,994,535
IN NET ASSETS
NET ASSETS
Beginning of period 863,763,440 150,768,905
End of period (including $ 2,491,902,573 $ 863,763,440
accumulated net investment
loss of $6,903,010 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.95 $ 14.88 $ 15.96 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.09) (.08) (.10)
Net realized and unrealized 11.29 10.15 .58 6.13
gain (loss)
Total from investment 11.21 10.06 .50 6.03
operations
Less Distributions
From net realized gain (1.58) - (1.14) (.08)
In excess of net realized gain - - (.45) -
Total distributions (1.58) - (1.59) (.08)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.59 $ 24.95 $ 14.88 $ 15.96
TOTAL RETURN B, C 46.80% 67.67% 4.20% 60.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 265,669 $ 94,621 $ 15,414 $ 7,313
(000 omitted)
Ratio of expenses to average 1.20% A 1.25% 1.39% 1.75% A, F
net assets
Ratio of expenses to average 1.19% A, G 1.24% G 1.35% G 1.70% A, G
net assets after expense
reductions
Ratio of net investment (.52)% A (.44)% (.59)% (.79)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.76 $ 14.80 $ 15.91 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.11) (.14) (.11) (.11)
Net realized and unrealized 11.21 10.09 .56 6.09
gain (loss)
Total from investment 11.10 9.95 .45 5.98
operations
Less Distributions
From net realized gain (1.51) - (1.12) (.08)
In excess of net realized gain - - (.45) -
Total distributions (1.51) - (1.57) (.08)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.36 $ 24.76 $ 14.80 $ 15.91
TOTAL RETURN B, C 46.63% 67.30% 3.85% 60.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 923,465 $ 349,533 $ 90,499 $ 57,624
(000 omitted)
Ratio of expenses to average 1.42% A 1.47% 1.60% 1.92% A
net assets
Ratio of expenses to average 1.41% A, F 1.46% F 1.56% F 1.87% A, F
net assets after expense
reductions
Ratio of net investment (.74)% A (.65)% (.80)% (.93)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.44 $ 14.68 $ 15.88 $ 12.88
period
Income from Investment
Operations
Net investment income (loss) D (.18) (.26) (.20) (.08)
Net realized and unrealized 11.04 10.01 .57 3.08
gain (loss)
Total from investment 10.86 9.75 .37 3.00
operations
Less Distributions
From net realized gain (1.45) - (1.13) -
In excess of net realized gain - - (.45) -
Total distributions (1.45) - (1.58) -
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 33.86 $ 24.44 $ 14.68 $ 15.88
TOTAL RETURN B, C 46.22% 66.49% 3.27% 23.29%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 934,704 $ 298,768 $ 31,041 $ 5,105
(000 omitted)
Ratio of expenses to average 1.95% A 2.01% 2.21% 2.50% A, F
net assets
Ratio of expenses to average 1.94% A, G 2.00% G 2.18% G 2.45% A, G
net assets after expense
reductions
Ratio of net investment (1.27)% A (1.19)% (1.40)% (1.41)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 24.49 $ 14.70 $ 14.28
period
Income from Investment
Operations
Net investment income (loss) D (.18) (.25) (.17)
Net realized and unrealized 11.06 10.03 1.27
gain (loss)
Total from investment 10.88 9.78 1.10
operations
Less Distributions
From net realized gain (1.47) - (.49)
In excess of net realized gain - - (.20)
Total distributions (1.47) - (.69)
Redemption fees added to paid .01 .01 .01
in capital
Net asset value, end of period $ 33.91 $ 24.49 $ 14.70
TOTAL RETURN B, C 46.22% 66.60% 8.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 305,477 $ 88,120 $ 6,754
(000 omitted)
Ratio of expenses to average 1.94% A 1.97% 2.43% A
net assets
Ratio of expenses to average 1.93% A, F 1.96% F 2.41% A, F
net assets after expense
reductions
Ratio of net investment (1.25)% A (1.16)% (1.64)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 25.05 $ 14.89 $ 15.98 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.04) (.04) (.06)
Net realized and unrealized 11.33 10.19 .55 6.12
gain (loss)
Total from investment 11.29 10.15 .51 6.06
operations
Less Distributions
From net realized gain (1.62) - (1.15) (.09)
In excess of net realized gain - - (.46) -
Total distributions (1.62) - (1.61) (.09)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.73 $ 25.05 $ 14.89 $ 15.98
TOTAL RETURN B, C 46.96% 68.23% 4.26% 60.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 62,587 $ 32,722 $ 7,060 $ 3,598
(000 omitted)
Ratio of expenses to average .93% A .98% 1.10% 1.50% A, F
net assets
Ratio of expenses to average .92% A, G .97% G 1.07% G 1.44% A, G
net assets after expense
reductions
Ratio of net investment (.24)% A (.17)% (.30)% (.50)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FOR THE PERIOD 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,768,158,376 and $722,058,263, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 197,761 $ 185
CLASS T 1,373,921 1,701
CLASS B 2,670,352 2,003,483
CLASS C 832,650 681,384
$ 5,074,684 $ 2,686,753
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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. In
addition, purchases of Class A and Class T shares that were subject to
a finder's fee bear a contingent deferred sales charge on assets that
do not remain in the fund for at least one year. The Class A and Class
T contingent deferred sales charge is based on 0.25% 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. A portion of the sales charges paid to FDC is paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,169,893 $ 626,593
CLASS T 1,244,394 509,029
CLASS B 489,943 489,943*
CLASS C 36,068 36,068*
$ 2,940,298 $ 1,661,633
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 216,174 .27 *
CLASS T 664,905 .24 *
CLASS B 718,383 .27 *
CLASS C 210,789 .25 *
INSTITUTIONAL CLASS 60,473 .25 *
$ 1,870,724
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $42,766 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $43,907,150. The fund received cash collateral of
$40,297,538 which was invested in cash equivalents, and U.S. Treasury
obligations valued at $5,805,000.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $59,953 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of expenses. During the period, the fund's custodian fees were
reduced by $2,558 under the custodian arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
FROM NET REALIZED GAIN
Class A $ 7,083,438 $ -
Class T 23,785,599 -
Class B 21,306,809 -
Class C 6,503,042 -
Institutional Class 2,482,228 -
Total $ 61,161,116 $ -
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 4,257,551 3,280,891 $ 132,860,477
Reinvestment of distributions 237,147 - 6,520,072
Shares redeemed (605,680) (524,386) (18,800,034)
Net increase (decrease) 3,889,018 2,756,505 $ 120,580,515
CLASS T Shares sold 14,406,521 10,904,693 $ 448,894,924
Reinvestment of distributions 830,793 - 22,659,130
Shares redeemed (2,478,103) (2,903,454) (72,433,209)
Net increase (decrease) 12,759,211 8,001,239 $ 399,120,845
CLASS B Shares sold 15,931,615 11,234,873 $ 484,384,843
Reinvestment of distributions 704,655 - 18,859,274
Shares redeemed (1,254,384) (1,122,956) (37,438,981)
Net increase (decrease) 15,381,886 10,111,917 $ 465,805,136
CLASS C Shares sold 5,731,533 3,451,291 $ 175,959,125
Reinvestment of distributions 200,006 - 5,388,508
Shares redeemed (522,956) (311,910) (16,127,127)
Net increase (decrease) 5,408,583 3,139,381 $ 165,220,506
INSTITUTIONAL CLASS Shares 990,830 1,121,900 $ 29,603,402
sold
Reinvestment of distributions 67,708 - 1,853,690
Shares redeemed (562,768) (289,655) (17,755,659)
Net increase (decrease) 495,770 832,245 $ 13,701,433
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 74,375,999
Reinvestment of distributions -
Shares redeemed (11,021,514)
Net increase (decrease) $ 63,354,485
CLASS T Shares sold $ 237,438,732
Reinvestment of distributions -
Shares redeemed (59,161,752)
Net increase (decrease) $ 178,276,980
CLASS B Shares sold $ 250,482,834
Reinvestment of distributions -
Shares redeemed (23,194,043)
Net increase (decrease) $ 227,288,791
CLASS C Shares sold $ 76,473,150
Reinvestment of distributions -
Shares redeemed (6,794,753)
Net increase (decrease) $ 69,678,397
INSTITUTIONAL CLASS Shares $ 24,772,786
sold
Reinvestment of distributions -
Shares redeemed (5,732,568)
Net increase (decrease) $ 19,040,218
</TABLE>
ADVISOR UTILITIES GROWTH FUND - CLASS A
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL A 18.64% 38.16% 192.12%
FIDELITY ADV UTILITIES - CL A 11.82% 30.22% 175.33%
(INCL. 5.75% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Utilities 12.17% 18.87% 144.74%
CUMULATIVE TOTAL RETURNS show Class A shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Utilities Index - a market
capitalization-weighted index of 151 stocks designed to measure the
performance of companies in the utilities sector. Issues in the index
include generators and distributors of electricity, distributors of
natural gas and water, and providers of telecommunications services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL A 38.16% 36.93%
FIDELITY ADV UTILITIES - CL A 30.22% 34.57%
(INCL. 5.75% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Utilities 18.87% 30.00%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Utilities Growth -CL A S&P 500 GS Utilities
00186 SP001 GS007
1996/09/03 9425.00 10000.00 10000.00
1996/09/30 9566.38 10516.69 10176.08
1996/10/31 10150.73 10806.74 10476.83
1996/11/30 10697.38 11623.62 10911.15
1996/12/31 10842.70 11393.36 10972.81
1997/01/31 11148.13 12105.21 11198.39
1997/02/28 11310.38 12200.12 11368.11
1997/03/31 10737.71 11698.81 10703.10
1997/04/30 11109.95 12397.23 10813.53
1997/05/31 11816.25 13151.98 11421.28
1997/06/30 12188.49 13741.19 11800.54
1997/07/31 12474.83 14834.57 12102.55
1997/08/31 12169.40 14003.54 11763.95
1997/09/30 13478.33 14770.51 12662.62
1997/10/31 13266.07 14277.18 12858.05
1997/11/30 13893.20 14938.07 14071.85
1997/12/31 14103.80 15194.56 14800.43
1998/01/31 15033.60 15362.61 15075.28
1998/02/28 16412.64 16470.56 15318.83
1998/03/31 17405.13 17314.02 16771.80
1998/04/30 17290.21 17488.19 16224.12
1998/05/31 16736.51 17187.57 16023.80
1998/06/30 16590.24 17885.73 16401.68
1998/07/31 16715.61 17695.25 16397.57
1998/08/31 14260.51 15136.87 15244.65
1998/09/30 15680.46 16106.54 16699.19
1998/10/31 15928.10 17416.64 17462.71
1998/11/30 16626.01 18472.27 18082.46
1998/12/31 18670.65 19536.64 19876.18
1999/01/31 19927.55 20353.66 20588.34
1999/02/28 19287.67 19721.07 19916.98
1999/03/31 20190.35 20510.11 19710.20
1999/04/30 21984.29 21304.46 21005.03
1999/05/31 22395.64 20801.47 21603.51
1999/06/30 23206.91 21955.95 22204.38
1999/07/31 23206.91 21270.48 21818.20
1999/08/31 21778.62 21165.19 20718.21
1999/09/30 22282.44 20585.06 21211.52
1999/10/31 24351.61 21887.68 22794.58
1999/11/30 25607.47 22332.66 23021.38
1999/12/31 26808.86 23648.05 23901.40
2000/01/31 27532.77 22459.97 24473.87
IMATRL PRASUN SHR__CHT 20000131 20000216 162738 R00000000000044
</TABLE>
$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 5.75% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $27,533 - a 175.33% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Utilities Index, it would have grown to $24,474 - a 144.74%
increase.
ADVISOR UTILITIES GROWTH FUND - CLASS T
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL T 18.57% 37.93% 189.66%
FIDELITY ADV UTILITIES - CL T 14.42% 33.11% 179.52%
(INCL. 3.50% SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Utilities 12.17% 18.87% 144.74%
CUMULATIVE TOTAL RETURNS show Class T shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Utilities Index - a market
capitalization-weighted index of 151 stocks designed to measure the
performance of companies in the utilities sector. Issues in the index
include generators and distributors of electricity, distributors of
natural gas and water, and providers of telecommunications services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL T 37.93% 36.59%
FIDELITY ADV UTILITIES - CL T 33.11% 35.17%
(INCL. 3.50% SALES CHARGE)
S&P 500 10.35% 26.77%
GS Utilities 18.87% 30.00%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Utilities Growth -CL T S&P 500 GS Utilities
00196 SP001 GS007
1996/09/03 9650.00 10000.00 10000.00
1996/09/30 9794.75 10516.69 10176.08
1996/10/31 10393.05 10806.74 10476.83
1996/11/30 10943.10 11623.62 10911.15
1996/12/31 11101.67 11393.36 10972.81
1997/01/31 11404.62 12105.21 11198.39
1997/02/28 11560.98 12200.12 11368.11
1997/03/31 10974.62 11698.81 10703.10
1997/04/30 11345.98 12397.23 10813.53
1997/05/31 12069.16 13151.98 11421.28
1997/06/30 12440.51 13741.19 11800.54
1997/07/31 12733.69 14834.57 12102.55
1997/08/31 12420.97 14003.54 11763.95
1997/09/30 13750.63 14770.51 12662.62
1997/10/31 13533.46 14277.18 12858.05
1997/11/30 14175.09 14938.07 14071.85
1997/12/31 14379.75 15194.56 14800.43
1998/01/31 15329.86 15362.61 15075.28
1998/02/28 16728.34 16470.56 15318.83
1998/03/31 17731.82 17314.02 16771.80
1998/04/30 17603.72 17488.19 16224.12
1998/05/31 17048.60 17187.57 16023.80
1998/06/30 16899.14 17885.73 16401.68
1998/07/31 17027.25 17695.25 16397.57
1998/08/31 14518.53 15136.87 15244.65
1998/09/30 15956.09 16106.54 16699.19
1998/10/31 16208.81 17416.64 17462.71
1998/11/30 16921.04 18472.27 18082.46
1998/12/31 18983.17 19536.64 19876.18
1999/01/31 20265.02 20353.66 20588.34
1999/02/28 19612.44 19721.07 19916.98
1999/03/31 20521.40 20510.11 19710.20
1999/04/30 22350.96 21304.46 21005.03
1999/05/31 22758.82 20801.47 21603.51
1999/06/30 23574.55 21955.95 22204.38
1999/07/31 23574.55 21270.48 21818.20
1999/08/31 22129.55 21165.19 20718.21
1999/09/30 22631.16 20585.06 21211.52
1999/10/31 24726.19 21887.68 22794.58
1999/11/30 26005.13 22332.66 23021.38
1999/12/31 27215.77 23648.05 23901.40
2000/01/31 27952.32 22459.97 24473.87
IMATRL PRASUN SHR__CHT 20000131 20000216 163039 R00000000000044
</TABLE>
$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 3.50% sales charge was
paid. As the chart shows, by January 31, 2000, the value of the
investment would have grown to $27,952 - a 179.52% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$22,460 - a 124.60% increase. If $10,000 was invested in the Goldman
Sachs Utilities Index, it would have grown to $24,474 - a 144.74%
increase.
ADVISOR UTILITIES GROWTH FUND - CLASS B
PERFORMANCE
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
shares' 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 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL B 18.22% 37.21% 185.33%
FIDELITY ADV UTILITIES - CL B 13.22% 32.21% 182.33%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Utilities 12.17% 18.87% 144.74%
CUMULATIVE TOTAL RETURNS show Class B shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Utilities Index - a market
capitalization-weighted index of 151 stocks designed to measure the
performance of companies in the utilities sector. Issues in the index
include generators and distributors of electricity, distributors of
natural gas and water, and providers of telecommunications services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL B 37.21% 35.99%
FIDELITY ADV UTILITIES - CL B 32.21% 35.57%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Utilities 18.87% 30.00%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Utilities Growth -CL B S&P 500 GS Utilities
00189 SP001 GS007
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10150.00 10516.69 10176.08
1996/10/31 10770.00 10806.74 10476.83
1996/11/30 11340.00 11623.62 10911.15
1996/12/31 11504.32 11393.36 10972.81
1997/01/31 11818.26 12105.21 11198.39
1997/02/28 11980.29 12200.12 11368.11
1997/03/31 11372.67 11698.81 10703.10
1997/04/30 11747.37 12397.23 10813.53
1997/05/31 12496.77 13151.98 11421.28
1997/06/30 12871.47 13741.19 11800.54
1997/07/31 13175.28 14834.57 12102.55
1997/08/31 12841.09 14003.54 11763.95
1997/09/30 14219.71 14770.51 12662.62
1997/10/31 13984.25 14277.18 12858.05
1997/11/30 14639.45 14938.07 14071.85
1997/12/31 14841.43 15194.56 14800.43
1998/01/31 15815.36 15362.61 15075.28
1998/02/28 17243.06 16470.56 15318.83
1998/03/31 18272.33 17314.02 16771.80
1998/04/30 18139.52 17488.19 16224.12
1998/05/31 17552.95 17187.57 16023.80
1998/06/30 17386.94 17885.73 16401.68
1998/07/31 17519.75 17695.25 16397.57
1998/08/31 14929.97 15136.87 15244.65
1998/09/30 16408.14 16106.54 16699.19
1998/10/31 16658.19 17416.64 17462.71
1998/11/30 17372.63 18472.27 18082.46
1998/12/31 19493.97 19536.64 19876.18
1999/01/31 20795.98 20353.66 20588.34
1999/02/28 20108.81 19721.07 19916.98
1999/03/31 21037.10 20510.11 19710.20
1999/04/30 22905.72 21304.46 21005.03
1999/05/31 23315.61 20801.47 21603.51
1999/06/30 24147.45 21955.95 22204.38
1999/07/31 24135.39 21270.48 21818.20
1999/08/31 22640.50 21165.19 20718.21
1999/09/30 23134.78 20585.06 21211.52
1999/10/31 25275.72 21887.68 22794.58
1999/11/30 26560.29 22332.66 23021.38
1999/12/31 27798.29 23648.05 23901.40
2000/01/31 28233.00 22459.97 24473.87
IMATRL PRASUN SHR__CHT 20000131 20000216 162919 R00000000000044
</TABLE>
$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,
2000, the value of the investment, including the effect of the
contingent deferred sales charge, would have grown to $28,233 - a
182.33% increase on the initial investment. For comparison, look at
how the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Utilities Index, it would
have grown to $24,474 - a 144.74% increase.
ADVISOR UTILITIES GROWTH FUND - CLASS C
PERFORMANCE
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 shares' 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 life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL C 18.24% 37.24% 185.40%
FIDELITY ADV UTILITIES - CL C 17.24% 36.24% 185.40%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 5.59% 10.35% 124.60%
GS Utilities 12.17% 18.87% 144.74%
CUMULATIVE TOTAL RETURNS show Class C shares' 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 shares' returns to both the performance of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks - and the Goldman Sachs Utilities Index - a market
capitalization-weighted index of 151 stocks designed to measure the
performance of companies in the utilities sector. Issues in the index
include generators and distributors of electricity, distributors of
natural gas and water, and providers of telecommunications services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - CL C 37.24% 35.99%
FIDELITY ADV UTILITIES - CL C 36.24% 35.99%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 10.35% 26.77%
GS Utilities 18.87% 30.00%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Utilities Growth -CL C S&P 500 GS Utilities
00477 SP001 GS007
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10150.00 10516.69 10176.08
1996/10/31 10770.00 10806.74 10476.83
1996/11/30 11340.00 11623.62 10911.15
1996/12/31 11504.32 11393.36 10972.81
1997/01/31 11818.26 12105.21 11198.39
1997/02/28 11980.29 12200.12 11368.11
1997/03/31 11372.67 11698.81 10703.10
1997/04/30 11747.37 12397.23 10813.53
1997/05/31 12496.77 13151.98 11421.28
1997/06/30 12871.47 13741.19 11800.54
1997/07/31 13175.28 14834.57 12102.55
1997/08/31 12841.09 14003.54 11763.95
1997/09/30 14219.71 14770.51 12662.62
1997/10/31 13984.25 14277.18 12858.05
1997/11/30 14637.79 14938.07 14071.85
1997/12/31 14849.51 15194.56 14800.43
1998/01/31 15822.52 15362.61 15075.28
1998/02/28 17259.93 16470.56 15318.83
1998/03/31 18288.23 17314.02 16771.80
1998/04/30 18144.48 17488.19 16224.12
1998/05/31 17558.47 17187.57 16023.80
1998/06/30 17392.61 17885.73 16401.68
1998/07/31 17525.29 17695.25 16397.57
1998/08/31 14937.96 15136.87 15244.65
1998/09/30 16405.05 16106.54 16699.19
1998/10/31 16655.24 17416.64 17462.71
1998/11/30 17381.97 18472.27 18082.46
1998/12/31 19492.40 19536.64 19876.18
1999/01/31 20795.11 20353.66 20588.34
1999/02/28 20119.63 19721.07 19916.98
1999/03/31 21036.35 20510.11 19710.20
1999/04/30 22905.98 21304.46 21005.03
1999/05/31 23316.09 20801.47 21603.51
1999/06/30 24148.38 21955.95 22204.38
1999/07/31 24136.31 21270.48 21818.20
1999/08/31 22640.61 21165.19 20718.21
1999/09/30 23147.77 20585.06 21211.52
1999/10/31 25278.47 21887.68 22794.58
1999/11/30 26564.46 22332.66 23021.38
1999/12/31 27803.84 23648.05 23901.40
2000/01/31 28539.52 22459.97 24473.87
IMATRL PRASUN SHR__CHT 20000131 20000216 162917 R00000000000044
</TABLE>
$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,
2000, the value of the investment would have grown to $28,540 - a
185.40% increase on the initial investment. For comparison, look at
how the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Utilities Index, it would
have grown to $24,474 - a 144.74% increase.
ADVISOR UTILITIES GROWTH FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Peter Saperstone)
An interview with
Peter Saperstone, Portfolio Manager of Fidelity Advisor Utilities
Growth Fund
Q. HOW DID THE FUND PERFORM, PETER?
A. Both absolute and relative performance were strong. For the six
months that ended January 31, 2000, the fund's Class A, Class T, Class
B and Class C shares returned 18.64%, 18.57%, 18.22% and 18.24%,
respectively. During the same period, the Goldman Sachs Utilities
Index - an index of 151 stocks designed to measure the performance of
companies in the utilities sector - returned 12.17%, while the
Standard & Poor's 500 Index returned 5.59%. For the 12 months that
ended January 31, 2000, the fund's Class A, Class T, Class B and Class
C shares returned 38.16%, 37.93%, 37.21% and 37.24%, respectively,
while the Goldman Sachs index and the S&P 500 returned 18.87% and
10.35%, respectively.
Q. WHAT FACTORS ENABLED THE FUND TO OUTPERFORM THE GOLDMAN SACHS
INDEX?
A. I overweighted telecommunications stocks and underweighted electric
utilities relative to the Goldman Sachs index. That strategy helped
because the telecommunications sector continued to experience strong
growth, while electric utilities suffered from weak performance due to
higher interest rates and fears of slowing earnings growth as a result
of deregulation. Within the telecommunications sector, the fund
benefited from a concentration on newer entrants and less emphasis on
more established companies. My rationale was that newer companies have
more to gain and less to lose from deregulation than established
companies such as the regional Bell operating companies (RBOCs).
Within the electric utilities group, I stressed independent power
producers (IPPs) over traditional electric utilities. Although we
classify them as electric utilities, IPPs generally have much stronger
growth prospects than conventional electric utilities, and their
performance helped the fund substantially.
Q. WHAT WERE SOME EXAMPLES OF HIGH-GROWTH AREAS IN THE
TELECOMMUNICATIONS MARKETS?
A. One high-growth area for new entrants was the local telephone
service market, which until a few years ago was served exclusively by
the RBOCs. The new players on the block in that market are called
competitive local exchange carriers (CLECs). These companies have far
less overhead than the RBOCs, and they have taken away considerable
market share by offering extremely competitive service plans and
rates. Another area experiencing dramatic growth was the wireless
industry, which benefited from rapidly growing demand as a result of
falling prices and new features such as Internet access and voice
activation.
Q. WHAT STOCKS HELPED THE FUND'S PERFORMANCE?
A. Three wireless stocks made the list of holdings that performed well
- - Nextel, Sprint PCS and VoiceStream. All three benefited from the
rapidly growing market for wireless products and services. Also
helping performance was Calpine, an IPP. As investors became aware of
the large number of potentially profitable projects coming on line for
the company, the price-to-earnings ratio considered reasonable for its
stock expanded dramatically. Finally, two CLECs - McLeodUSA and
Metromedia Fiber - continued to gain market share and expand their
capacity to handle data traffic.
Q. WHAT STOCKS TURNED IN DISAPPOINTING PERFORMANCES?
A. SBC Communications and Bell Atlantic exemplified the poorly
performing RBOCs group. Investors shunned the stocks as they saw the
companies' markets increasingly penetrated by competitors. The stocks
of established long-distance companies AT&T and MCI WorldCom also hurt
performance. These two core holdings suffered from slowing growth and
eroding market share. Another lackluster performer, electric utility
PG&E, was representative of the twin problems facing many companies in
that industry during the period: slowing earnings growth and higher
interest rates.
Q. WHAT'S YOUR OUTLOOK, PETER?
A. The utilities market - especially the telecommunications industry -
should remain one of the premier growth areas of the economy for the
foreseeable future. Deregulation and technological innovation are
powerful forces benefiting telecommunications companies in the U.S and
abroad. While there may be occasional periods in which values get
ahead of themselves, the utilities sector should continue to
appreciate faster than the overall market in the long run. I plan to
continue my strategy of emphasizing "attackers" over "defenders" for
the reasons I mentioned earlier. For now, rising interest rates offer
another reason to underweight the RBOCs and traditional electric
utilities since those stocks often follow bond prices lower in such an
environment.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$416 million
MANAGER: Peter Saperstone, since 1998;
joined Fidelity in 1995
(checkmark)
ADVISOR UTILITIES GROWTH FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
AT&T Corp. 9.1
Nextel Communications, Inc. 7.0
Class A
SBC Communications, Inc. 6.9
BellSouth Corp. 6.9
MCI WorldCom, Inc. 6.9
Mannesmann AG (Reg.) 4.4
BCE, Inc. 3.4
Verio, Inc. 2.8
Sprint Corp. - PCS Group 2.6
Series 1
Sprint Corp. - FON Group 2.6
52.6
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Telephone Services 48.5%
Cellular 18.5%
Electric Utility 10.6%
Computer Services & Software 6.1%
Gas 4.3%
All Others * 12.0%
Row: 1, Col: 1, Value: 48.5
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 18.5
Row: 1, Col: 4, Value: 10.6
Row: 1, Col: 5, Value: 6.1
Row: 1, Col: 6, Value: 4.3
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 12.8
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR UTILITIES GROWTH FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 95.5%
SHARES VALUE (NOTE 1)
BROADCASTING - 1.2%
AT&T Corp. - Liberty Media 18,600 $ 950,925
Group Class A (a)
EchoStar Communications Corp. 4,800 390,900
Class A (a)
Metro One Telecommunications, 150,000 1,865,625
Inc. (a)
PanAmSat Corp. (a) 30,000 1,576,875
4,784,325
CELLULAR - 18.5%
ALLTEL Corp. 80,100 5,346,675
China Telecom (Hong Kong) 1,031,000 6,443,751
Ltd. (a)
Mannesmann AG (Reg.) 68,000 18,492,913
Nextel Communications, Inc. 275,000 29,253,125
Class A (a)
SBA Communications Corp. 115,000 3,485,938
Class A
Sprint Corp. - PCS Group 100,000 11,006,250
Series 1 (a)
Triton PCS Holdings, Inc. 37,100 1,518,781
Class A
VoiceStream Wireless Corp. (a) 15,000 1,760,625
77,308,058
COMMUNICATIONS EQUIPMENT - 2.2%
Globalstar Telecommunications 5,600 184,450
Ltd. (a)
Nokia AB sponsored ADR 50,000 9,150,000
9,334,450
COMPUTER SERVICES & SOFTWARE
- - 6.1%
Concentric Network Corp. (a) 61,700 2,614,538
Covad Communications Group, 100,000 7,075,000
Inc.
PSINet, Inc. (a) 50,000 3,993,750
Verio, Inc. (a) 182,600 11,754,875
25,438,163
CONSUMER ELECTRONICS - 0.6%
General Motors Corp. Class H 22,900 2,576,250
(a)
ELECTRIC UTILITY - 10.6%
AES Corp. (a) 100,000 8,012,500
Calpine Corp. (a) 113,000 8,263,125
Citizens Utilities Co. Class B 250,000 3,703,125
CMS Energy Corp. 139,400 4,182,000
Duke Energy Corp. 61,294 3,539,729
Entergy Corp. 233,500 5,822,906
Illinova Corp. 14,600 638,750
IPALCO Enterprises, Inc. 161,100 3,131,381
PG&E Corp. 35,800 785,363
Unicom Corp. 150,000 5,868,750
43,947,629
ELECTRICAL EQUIPMENT - 2.4%
ANTEC Corp. (a) 28,500 1,115,063
Omnipoint Corp. (a) 85,900 8,810,119
9,925,182
SHARES VALUE (NOTE 1)
GAS - 4.3%
Columbia Energy Group 8,100 $ 526,500
Dynegy, Inc. 75,900 2,352,900
Enron Corp. 47,600 3,210,025
Kinder Morgan, Inc. 365,100 9,606,694
Williams Companies, Inc. 52,981 2,053,014
17,749,133
LEASING & RENTAL - 0.5%
Crown Castle International 65,000 2,055,625
Corp. (a)
OIL & GAS - 0.1%
The Coastal Corp. 13,050 481,219
REAL ESTATE INVESTMENT TRUSTS
- - 0.5%
Pinnacle Holdings, Inc. 46,100 1,956,369
TELEPHONE SERVICES - 48.5%
Alaska Communication Systems 107,600 1,546,750
Group, Inc.
Allegiance Telecom, Inc. (a) 10,800 1,138,050
AT&T Corp. 718,164 37,883,144
BCE, Inc. 140,000 14,262,981
Bell Atlantic Corp. 25,700 1,591,794
BellSouth Corp. 606,200 28,529,288
CenturyTel, Inc. 100,500 3,844,125
Commonwealth Telephone 26,900 1,449,238
Enterprises, Inc. (a)
Focal Communications Corp. 37,300 1,496,663
Global TeleSystems Group, 20,000 498,750
Inc. (a)
GTE Corp. 14,400 1,055,700
Intermedia Communications, 20,000 860,000
Inc. (a)
MCI WorldCom, Inc. (a) 620,660 28,511,569
McLeodUSA, Inc. Class A (a) 118,000 8,112,500
Metromedia Fiber Network, 116,600 7,892,363
Inc. Class A (a)
NEXTLINK Communications, Inc. 112,700 9,509,063
Class A (a)
Qwest Communications 8,722 343,429
International, Inc. (a)
SBC Communications, Inc. 669,115 28,855,584
Sprint Corp. - FON Group 169,000 10,932,188
Telefonica SA sponsored ADR 50,402 3,830,552
WinStar Communications, Inc. 52,600 3,724,738
(a)
WinStar Communications, Inc. 117 8,285
Z-Tel Technologies, Inc. 162,200 5,859,475
201,736,229
TOTAL COMMON STOCKS 397,292,632
(Cost $341,707,381)
CASH EQUIVALENTS - 15.0%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 31,519,068 $ 31,519,068
5.56% (b)
Taxable Central Cash Fund, 31,059,121 31,059,121
5.45% (b)
TOTAL CASH EQUIVALENTS 62,578,189
(Cost $62,578,189)
TOTAL INVESTMENT PORTFOLIO - 459,870,821
110.5%
(Cost $404,285,570)
NET OTHER ASSETS - (10.5)% (43,628,781)
NET ASSETS - 100% $ 416,242,040
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
Distribution of investments by country of issue, as a percentage of
net assets, is as follows:
United States of America 87.5%
Germany 4.4
Canada 3.4
Finland 2.2
Hong Kong 1.6
Others (individually less 0.9
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $406,581,281. Net unrealized appreciation
aggregated $53,289,540, of which $65,456,529 related to appreciated
investment securities and $12,166,989 related to depreciated
investment securities.
ADVISOR UTILITIES GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 459,870,821
value (cost $404,285,570) -
See accompanying schedule
Receivable for investments 7,921,808
sold
Receivable for fund shares 5,950,724
sold
Dividends receivable 478,148
Interest receivable 186,259
Redemption fees receivable 521
Other receivables 15,734
TOTAL ASSETS 474,424,015
LIABILITIES
Payable for investments $ 25,622,973
purchased
Payable for fund shares 500,307
redeemed
Accrued management fee 177,571
Distribution fees payable 225,130
Other payables and accrued 136,926
expenses
Collateral on securities 31,519,068
loaned, at value
TOTAL LIABILITIES 58,181,975
NET ASSETS $ 416,242,040
Net Assets consist of:
Paid in capital $ 349,498,170
Distributions in excess of (339,364)
net investment income
Accumulated undistributed net 11,497,983
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 55,585,251
(depreciation) on investments
NET ASSETS $ 416,242,040
CALCULATION OF MAXIMUM $22.82
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($35,863,369 (divided
by) 1,571,481 shares)
Maximum offering price per $24.21
share (100/94.25 of
$22.82)
CLASS T: NET ASSET VALUE $22.77
and redemption price per
share ($144,596,924 (divided
by) 6,349,967 shares)
Maximum offering price per $23.60
share (100/96.50 of
$22.77)
CLASS B: NET ASSET VALUE $22.52
and offering price per
share ($155,534,566 (divided
by) 6,906,280 shares) A
CLASS C: NET ASSET VALUE $22.50
and offering price per
share ($66,354,841 (divided
by) 2,948,971 shares) A
INSTITUTIONAL CLASS: NET $22.91
ASSET VALUE, offering price
and redemption price per
share ($13,892,340
(divided by) 606,359 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 1,210,179
Dividends
Interest 632,911
Security lending 33,711
TOTAL INCOME 1,876,801
EXPENSES
Management fee $ 709,683
Transfer agent fees 297,711
Distribution fees 892,351
Accounting and security 53,128
lending fees
Non-interested trustees' 300
compensation
Custodian fees and expenses 6,164
Registration fees 126,013
Audit 12,934
Legal 1,020
Miscellaneous 689
Total expenses before 2,099,993
reductions
Expense reductions (12,139) 2,087,854
NET INVESTMENT INCOME (LOSS) (211,053)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 13,682,391
Foreign currency transactions 2,236 13,684,627
Change in net unrealized 34,519,028
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 48,203,655
NET INCREASE (DECREASE) IN $ 47,992,602
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (211,053) $ (97,227)
income (loss)
Net realized gain (loss) 13,684,627 8,970,907
Change in net unrealized 34,519,028 18,386,120
appreciation (depreciation)
NET INCREASE (DECREASE) IN 47,992,602 27,259,800
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (128,311) -
In excess of net investment
income
From net realized gain (9,710,886) (3,437,371)
TOTAL DISTRIBUTIONS (9,839,197) (3,437,371)
Share transactions - net 202,407,194 108,825,089
increase (decrease)
Redemption fees 62,766 29,790
TOTAL INCREASE (DECREASE) 240,623,365 132,677,308
IN NET ASSETS
NET ASSETS
Beginning of period 175,618,675 42,941,367
End of period (including $ 416,242,040 $ 175,618,675
under (over) distributions
of net investment income of
($339,364) and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.31 $ 16.00 $ 13.07 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .03 .05 (.02) .12
Net realized and unrealized 3.53 5.45 4.19 3.09
gain (loss)
Total from investment 3.56 5.50 4.17 3.21
operations
Less Distributions
From net investment income - - (.04) (.03)
In excess of net investment (.05) - - -
income
From net realized gain (1.01) (1.20) (1.21) (.11)
Total distributions (1.06) (1.20) (1.25) (.14)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.82 $ 20.31 $ 16.00 $ 13.07
TOTAL RETURN B, C 18.64% 38.83% 33.99% 32.36%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 35,863 $ 14,400 $ 3,186 $ 531
(000 omitted)
Ratio of expenses to average 1.24% A 1.34% 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.23% A, G 1.32% G 1.72% G 1.75% A
net assets after expense
reductions
Ratio of net investment .30% A .30% (.11)% 1.09% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.23 $ 15.95 $ 13.03 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .01 .01 (.04) .08
Net realized and unrealized 3.53 5.43 4.17 3.09
gain (loss)
Total from investment 3.54 5.44 4.13 3.17
operations
Less Distributions
From net investment income - - (.03) (.03)
In excess of net investment (.01) - - -
income
From net realized gain (1.00) (1.17) (1.19) (.11)
Total distributions (1.01) (1.17) (1.22) (.14)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.77 $ 20.23 $ 15.95 $ 13.03
TOTAL RETURN B, C 18.57% 38.45% 33.72% 31.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 144,597 $ 65,085 $ 19,918 $ 7,085
(000 omitted)
Ratio of expenses to average 1.49% A 1.58% 1.94% 2.00% A, F
net assets
Ratio of expenses to average 1.48% A, G 1.55% G 1.90% G 2.00% A
net assets after expense
reductions
Ratio of net investment .05% A .07% (.23)% .79% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.02 $ 15.83 $ 13.01 $ 11.76
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.08) (.13) .02
Net realized and unrealized 3.49 5.39 4.16 1.23
gain (loss)
Total from investment 3.44 5.31 4.03 1.25
operations
Less Distributions
From net investment income - - (.03) -
From net realized gain (.95) (1.13) (1.19) -
Total distributions (.95) (1.13) (1.22) -
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.52 $ 20.02 $ 15.83 $ 13.01
TOTAL RETURN B, C 18.22% 37.76% 32.97% 10.63%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 155,535 $ 65,645 $ 12,919 $ 2,039
(000 omitted)
Ratio of expenses to average 1.99% A 2.08% 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 1.98% A, G 2.05% G 2.47% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.45)% A (.43)% (.85)% .32% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 20.01 $ 15.85 $ 13.90
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.08) (.10)
Net realized and unrealized 3.49 5.38 3.16
gain (loss)
Total from investment 3.45 5.30 3.06
operations
Less Distributions
From net investment income - - (.02)
From net realized gain (.96) (1.15) (1.10)
Total distributions (.96) (1.15) (1.12)
Redemption fees added to paid - .01 .01
in capital
Net asset value, end of period $ 22.50 $ 20.01 $ 15.85
TOTAL RETURN B, C 18.24% 37.72% 23.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 66,355 $ 23,524 $ 3,489
(000 omitted)
Ratio of expenses to average 1.98% A 2.07% 2.50% A, F
net assets
Ratio of expenses to average 1.97% A, G 2.04% G 2.48% A, G
net assets after expense
reductions
Ratio of net investment (.44)% A (.43)% (.91)% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151%
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.38 $ 16.02 $ 13.09 $ 10.00
period
Income from Investment
Operations
Net investment income D .06 .11 .04 .14
Net realized and unrealized 3.55 5.46 4.17 3.10
gain (loss)
Total from investment 3.61 5.57 4.21 3.24
operations
Less Distributions
From net investment income - - (.07) (.04)
In excess of net investment (.08) - - -
income
From net realized gain (1.01) (1.22) (1.22) (.11)
Total distributions (1.09) (1.22) (1.29) (.15)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.91 $ 20.38 $ 16.02 $ 13.09
TOTAL RETURN B, C 18.86% 39.31% 34.36% 32.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 13,892 $ 6,963 $ 3,430 $ 2,246
(000 omitted)
Ratio of expenses to average .94% A 1.02% 1.46% 1.50% A, F
net assets
Ratio of expenses to average .93% A, G .99% G 1.43% G 1.50% A
net assets after expense
reductions
Ratio of net investment .60% A .63% .30% 1.29% A
income to average net assets
Portfolio turnover 128% A 149% 151% 13% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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 short-term gain remaining at fiscal year end is distributed
in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 $331,927,701 and $149,822,403, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees has adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 26,789 $ 28
CLASS T 209,112 235
CLASS B 469,963 352,554
CLASS C 186,487 150,437
$ 892,351 $ 503,254
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
bear a contingent deferred sales charge on assets that do not remain
in the fund for at least one year. The Class A and Class T contingent
deferred sales charge is based on 0.25% 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.
A portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 197,132 $ 94,319
CLASS T 257,213 95,438
CLASS B 82,211 82,211*
CLASS C 6,439 6,439*
$ 542,995 $ 278,407
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 26,976 .25 *
CLASS T 102,116 .24 *
CLASS B 116,424 .25 *
CLASS C 43,144 .23 *
INSTITUTIONAL CLASS 9,051 .20 *
$ 297,711
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $2,106 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $30,992,450. The fund received cash collateral of
$31,519,068 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $11,513 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's
custodian fees were reduced by $626 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 10% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 50,046 $ -
Class T 42,240 -
Class B - -
Class C - -
Institutional Class 36,025 -
Total $ 128,311 $ -
FROM NET REALIZED GAIN
Class A $ 860,425 $ 267,451
Class T 3,343,257 1,516,237
Class B 3,638,894 1,080,984
Class C 1,413,348 311,856
Institutional Class 454,962 260,843
Total $ 9,710,886 $ 3,437,371
$ 9,839,197 $ 3,437,371
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 610,783 $ 20,285,552
967,367
Reinvestment of distributions 41,771 17,188 805,886
Shares redeemed (146,766) (117,917) (3,098,732)
Net increase (decrease) 862,372 510,054 $ 17,992,706
CLASS T Shares sold 3,764,104 2,535,015 $ 79,452,336
Reinvestment of distributions 164,039 110,405 3,147,401
Shares redeemed (794,997) (677,022) (16,015,743)
Net increase (decrease) 3,133,146 1,968,398 $ 66,583,994
CLASS B Shares sold 3,941,296 2,681,105 $ 81,633,868
Reinvestment of distributions 148,935 65,772 2,811,761
Shares redeemed (463,688) (283,363) (9,229,005)
Net increase (decrease) 3,626,543 2,463,514 $ 75,216,624
CLASS C Shares sold 1,884,136 1,045,991 $ 39,128,015
Reinvestment of distributions 57,267 17,797 1,081,112
Shares redeemed (168,118) (108,216) (3,445,636)
Net increase (decrease) 1,773,285 955,572 $ 36,763,491
INSTITUTIONAL CLASS Shares 417,881 170,875 $ 8,842,862
sold
Reinvestment of distributions 17,930 18,455 342,837
Shares redeemed (171,187) (61,672) (3,335,320)
Net increase (decrease) 264,624 127,658 $ 5,850,379
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 10,991,149
Reinvestment of distributions 223,588
Shares redeemed (1,971,798)
Net increase (decrease) $ 9,242,939
CLASS T Shares sold $ 45,737,017
Reinvestment of distributions 1,432,350
Shares redeemed (11,443,758)
Net increase (decrease) $ 35,725,609
CLASS B Shares sold $ 47,915,404
Reinvestment of distributions 845,886
Shares redeemed (4,722,842)
Net increase (decrease) $ 44,038,448
CLASS C Shares sold $ 19,125,937
Reinvestment of distributions 228,735
Shares redeemed (1,876,189)
Net increase (decrease) $ 17,478,483
INSTITUTIONAL CLASS Shares $ 3,122,693
sold
Reinvestment of distributions 240,109
Shares redeemed (1,023,192)
Net increase (decrease) $ 2,339,610
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.
Fidelity Management & Research (Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
* 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 Latin America Fund
Fidelity Advisor Emerging Asia Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital
Appreciation Fund
Fidelity Advisor International Capital
Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant (registered trademark) Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
BULK RATE
U.S. POSTAGE
P A I D
F I D E L I T Y
INVESTMENTS
Fidelity Investments Institutional Services Co., Inc.
P.O. Box 505422
Cincinnati, OH 45250-5422
(2_FIDELITY_LOGOS)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
FOCUS FUNDS SM
INSTITUTIONAL CLASS
Consumer Industries
Cyclical Industries
Financial Services
Health Care
Natural Resources
Technology
Utilities Growth
SEMIANNUAL REPORT
JANUARY 31, 2000
CONTENTS
PERFORMANCE OVERVIEW 4
CONSUMER INDUSTRIES 5 PERFORMANCE
6 FUND TALK: THE MANAGER'S OVERVIEW
7 INVESTMENT SUMMARY
8 INVESTMENTS
12 FINANCIAL STATEMENTS
16 NOTES TO THE
FINANCIAL STATEMENTS
CYCLICAL INDUSTRIES 20 PERFORMANCE
21 FUND TALK: THE MANAGER'S OVERVIEW
22 INVESTMENT SUMMARY
23 INVESTMENTS
35 FINANCIAL STATEMENTS
39 NOTES TO THE
FINANCIAL STATEMENTS
FINANCIAL SERVICES 33 PERFORMANCE
34 FUND TALK: THE MANAGER'S OVERVIEW
35 INVESTMENT SUMMARY
36 INVESTMENTS
38 FINANCIAL STATEMENTS
42 NOTES TO THE
FINANCIAL STATEMENTS
HEALTH CARE 46 PERFORMANCE
47 FUND TALK: THE MANAGER'S OVERVIEW
48 INVESTMENT SUMMARY
49 INVESTMENTS
51 FINANCIAL STATEMENTS
55 NOTES TO THE
FINANCIAL STATEMENTS
NATURAL RESOURCES 59 PERFORMANCE
60 FUND TALK: THE MANAGER'S OVERVIEW
61 INVESTMENT SUMMARY
62 INVESTMENTS
64 FINANCIAL STATEMENTS
68 NOTES TO THE
FINANCIAL STATEMENTS
TECHNOLOGY 72 PERFORMANCE
73 FUND TALK: THE MANAGER'S OVERVIEW
74 INVESTMENT SUMMARY
75 INVESTMENTS
78 FINANCIAL STATEMENTS
82 NOTES TO THE
FINANCIAL STATEMENTS
UTILITIES GROWTH 86 PERFORMANCE
87 FUND TALK: THE MANAGER'S OVERVIEW
88 INVESTMENT SUMMARY
89 INVESTMENTS
91 FINANCIAL STATEMENTS
95 NOTES TO THE
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF EACH FUND'S
PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS
STATED ON THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF
FIDELITY OR ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH
VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND,
BECAUSE INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
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.
PERFORMANCE OVERVIEW
Due to their volatile nature, technology stocks are capable of
producing dramatic performance swings - up or down - in any given time
period. Back in the fall of 1998, for instance, when several
technology-intensive Southeast Asian markets imploded, tech investors
the world over ran for safer ground. Funny how a year changes things.
Technology stocks dominated the U.S. equity market during the six
months that ended January 31, 2000, and `dominated' may be an
understatement: The NASDAQ Index, which serves as a general gauge of
tech stock performance, was up 49.52%. While technology stocks were
ruling the roost, however, the rest of the market had its hands full
just trying to generate positive returns. The market itself was
extremely narrow during the period, with a select group of stocks
clogging the top of the performance charts. Accordingly, the
bellwether U.S. stock indexes - the Standard & Poor's 500 SM Index and
the Dow Jones Industrial Average - returned 5.59% and 3.46%,
respectively, as such major sectors as finance and health turned in
lackluster performances. For calendar year 1999, in fact, the 10
best-performing stocks accounted for close to 70% of the market's
advance.
For the most part, investors continued to favor large-cap growth
stocks during the period. But thanks to the haughty performance of the
tech sector, many smaller stocks got in on the act as well. The
Russell 2000(registered trademark) Index - a popular performance gauge
for smaller stocks - outperformed the S&P 500(registered trademark)
during the period by posting a 12.25% return. A considerable
technology weighting certainly didn't hurt.
Of course, much of the fuel for the technology ride was supplied by
Internet-related stocks. Investors continued to gravitate toward these
stocks, bidding up their prices rapidly despite the fact that many
companies were unprofitable and showed no signs of being profitable in
the near future. This type of price momentum - which flew in the face
of conventional wisdom that a company's share price follows its
earnings - left many professional money managers scratching their
heads.
The policymakers of the Federal Reserve Board also wondered what to do
about the sector's dominance, specifically its influence on the
resilient U.S. economy. The Fed's answer - per usual - came in the
form of two successive interest-rate hikes, once in August and again
in November. These widely anticipated gestures, however - which took
back some of the rate cuts the Fed had made in 1998 - did very little
to temper the momentum. Tech stocks sold off some in January, mostly
triggered by anticipation that the Fed would raise rates again at its
February meeting.
Turning to individual sector performance, what more can be said about
TECHNOLOGY? Aside from the omnipresent Internet influence, tech stocks
also were boosted by increased corporate and consumer demand for data
storage, as well as the continued growth spurt within the wireless
communications area. The Goldman Sachs Technology Index - an index of
185 stocks designed to measure the performance of companies in the
tech sector - returned 41.54% during the six-month period.
Because of their narrow focus, sector funds tend to be more volatile
than funds that diversify across many sectors and companies. The only
other two Advisor Focus sectors that generated positive
results - as measured by industry-specific Goldman Sachs indexes -
were utilities and health care. The incredible demand for wireless and
cellular communications lifted many stocks within the UTILITIES
sector. Increased cost-cutting competition among long-distance
telephone service carriers, as well as a wave of domestic and
international consolidation, also marked the period. Bell Atlantic
became the first local telephone company to enter the $90 billion U.S.
long-distance business, while AT&T continued to transform itself from
a standard telephone company into a wide-ranging telecommunications
provider. For the period, the Goldman Sachs Utilities Index was up
12.17%.
HEALTH CARE stocks, on the other hand, received a much-needed boost
from the biotechnology sector, which continued to generate excitement
over the emerging field of genomics. Investors also kept watch on the
ongoing takeover battle between drug giants American Home Products and
Pfizer, both of which aggressively courted Warner-Lambert. Many health
care firms also began to leverage the power of the Internet during the
period.
The remaining four industry sectors couldn't reach positive territory
during the period. The performance of stocks in the CONSUMER
INDUSTRIES sector was influenced mostly by consumer confidence level
swings. Consumer confidence was down through the early part of the
period, implying that higher interest rates and falling stock prices
could cause many folks to keep their wallets in their pockets.
Confidence rebounded sharply as the year came to a close, however, as
strong economic data translated into strong sales for retailers. In
company-specific developments, Coca-Cola experienced a bit of
management chaos, while many leading retailers - including Wal-Mart
and Kmart - entered into online marketing alliances.
The anticipation and eventual reality of higher interest rates spelled
trouble for most FINANCIAL SERVICES stocks during the period. A
slowdown in banking mergers was attributed in large part to the rising
rate environment and sluggish revenue growth. Higher rates resulted in
lower loan volumes for many regional banks and, while the Fed left
interest rates untouched in December, speculation was that another
hike was in store in early 2000. The Goldman Sachs Financial Services
Index was down almost 8% during the period.
Interest-rate pressures also had a negative impact on the CYCLICAL
INDUSTRIES sector, predominately made up of economically sensitive
stocks. This group performed well through much of the period, buoyed
by increased manufacturing growth and strong consolidation rates among
commodity-based companies. But rate pressures in January took the wind
out of the sails, as concerns over an economic slowdown cast doubts
over continued manufacturing growth.
NATURAL RESOURCES stocks had mixed performance results. Gold prices
snapped back nicely in late September after a prolonged drought, and
the ministers of OPEC agreed to restrain oil output, indicating a
strong likelihood that oil prices would remain high during the winter
season in the Northern Hemisphere. A proposed merger between BP Amoco
and Atlantic Richfield was blocked due to antitrust laws, while
another mega-merger - this one between foreign giants Total Fina and
Elf Aquitane - was eventually finalized.
ADVISOR CONSUMER INDUSTRIES FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - INST CL -0.41% 0.52% 96.92%
S&P 500 5.59% 10.35% 124.60%
GS Consumer Industries -1.06% -0.91% 82.75%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Consumer Industries Index - a
market capitalization-weighted index of 304 stocks designed to measure
the performance of companies in the consumer industries sector. Issues
in the index include providers of consumer services and products,
including producers of beverages - alcoholic and non-alcoholic, food,
personal care, household products, and tobacco companies. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CONSUMER - INST CL 0.52% 21.98%
S&P 500 10.35% 26.77%
GS Consumer Industries -0.91% 19.33%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Consumer Ind -CL I S&P 500 GS Consumer Industries
00205 SP001 GS002
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10560.00 10516.69 10513.26
1996/10/31 10680.00 10806.74 10515.20
1996/11/30 11050.00 11623.62 11025.10
1996/12/31 10860.20 11393.36 10884.77
1997/01/31 11383.58 12105.21 11305.36
1997/02/28 11524.49 12200.12 11695.56
1997/03/31 11192.34 11698.81 11296.69
1997/04/30 11383.58 12397.23 11790.13
1997/05/31 12259.24 13151.98 12465.57
1997/06/30 12883.27 13741.19 12976.04
1997/07/31 13597.89 14834.57 13662.47
1997/08/31 13124.83 14003.54 12875.85
1997/09/30 13966.13 14770.51 13567.42
1997/10/31 13723.24 14277.18 13296.15
1997/11/30 14407.74 14938.07 14130.89
1997/12/31 14871.94 15194.56 14591.98
1998/01/31 14803.03 15362.61 14472.66
1998/02/28 15871.05 16470.56 15602.11
1998/03/31 16789.78 17314.02 16489.31
1998/04/30 16686.43 17488.19 16327.46
1998/05/31 16778.30 17187.57 16451.19
1998/06/30 17628.12 17885.73 17157.68
1998/07/31 17363.99 17695.25 16593.20
1998/08/31 14917.87 15136.87 14250.87
1998/09/30 15096.88 16106.54 14330.43
1998/10/31 16925.69 17416.64 16100.92
1998/11/30 17919.87 18472.27 17178.98
1998/12/31 19208.63 19536.64 18227.30
1999/01/31 19589.12 20353.66 18442.58
1999/02/28 19405.01 19721.07 18139.22
1999/03/31 19724.13 20510.11 18457.02
1999/04/30 19981.89 21304.46 18831.12
1999/05/31 19625.94 20801.47 18406.85
1999/06/30 20411.47 21955.95 19134.43
1999/07/31 19773.23 21270.48 18470.42
1999/08/31 18987.70 21165.19 17776.69
1999/09/30 18593.67 20585.06 17266.59
1999/10/31 19567.03 21887.68 18350.63
1999/11/30 19879.01 22332.66 18648.14
1999/12/31 21226.74 23648.05 19743.97
2000/01/31 19691.82 22459.97 18274.61
IMATRL PRASUN SHR__CHT 20000131 20000216 143116 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$19,692 - a 96.92% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Consumer Industries Index,
it would have grown to $18,275 - a 82.75% increase.
ADVISOR CONSUMER INDUSTRIES FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of John Porter)
An interview with
John Porter, Portfolio
Manager of Fidelity Advisor Consumer Industries Fund
Q. HOW DID THE FUND PERFORM, JOHN?
A. For the six-month period that ended January 31, 2000, the fund's
Institutional Class shares posted a return of -0.41%. For this same
time frame, the Goldman Sachs Consumer Industries Index - an index of
304 stocks designed to measure the performance of companies in the
consumer industries sector - retreated 1.06%. The Standard & Poor's
500 Index returned 5.59% during the six-month period. For the 12
months ending January 31, 2000, the fund's Institutional Class shares
returned 0.52%. By comparison, the Goldman Sachs and S&P 500 indexes
returned -0.91% and 10.35%, respectively.
Q. WHAT FACTORS HELPED THE FUND BEAT THE GOLDMAN SACHS INDEX DURING
THE PAST SIX MONTHS?
A. Some good picks, coupled with strong industry positioning, gave us
the upper hand during the period. We gained an advantage by
maintaining an underweighting in soft drinks, most notably Coca-Cola,
which continued to grapple with local market challenges and falling
sales volumes. The fund benefited from its overexposure to Procter &
Gamble, which rallied in response to recovering global economies and a
company-wide reorganization. Having a smaller stake than the index in
both retail department stores and foods, and a larger position in
broadcasting stocks, also helped. However, the fund's overweighting in
supermarkets and tobacco, both of which performed poorly, tempered its
gains.
Q. HAVE YOU MADE ANY NOTABLE CHANGES SINCE TAKING OVER THE FUND ON
SEPTEMBER 1, 1999?
A. As the period progressed, I became increasingly confident in the
state of the U.S. economy. So, I was more comfortable ramping up my
exposure on the domestic front, rotating away from defensive areas
such as supermarkets, and into more offensive high-growth retail,
advertising and media stocks. I did add modestly to the fund's stake
in multinationals as a play on the developing recoveries overseas.
Q. WITH HISTORICALLY HIGH LEVELS OF CONSUMER SPENDING FUELING THE
ECONOMY, THE SECTOR STILL SEEMED TO STRUGGLE. WHY?
A. It's true that consumer spending has been very strong, and a lot of
the companies are benefiting from it. But the growth, which is
attractive on an absolute basis, is simply not all that exciting on a
relative basis. We're living in an environment where investors are
expecting the market to continue to deliver growth in the mid-teens or
better, and there are really only one or two sectors that have done
that lately - technology and telecommunications. Rising interest rates
also proved troubling for consumer stocks, but to a much lesser degree
than the relative attractiveness of the tech and telecom sectors.
Q. HOW DID THE FUND'S INVESTMENTS IN THE VARIOUS CONSUMER INDUSTRIES
INFLUENCE PERFORMANCE?
A. Our exposure to high-growth retailers Wal-Mart, Home Depot and
Costco, as well as our avoidance of weak department store benchmark
issues Sears, Kmart and J.C. Penney, served us well. I cut back on the
fund's exposure to supermarkets - a group in part felled by execution
problems related to merger activity - but the stocks I held onto
really hurt. In advertising and media, I stepped up the fund's
weighting in radio stocks, many of which were big beneficiaries of
Internet advertising, and this strategy helped. Our overweighting in a
healthy household product segment gave us an additional lift. Finally,
in terms of food stocks, not holding Heinz or Campbell Soup, and
having less Pepsico than the benchmark, also contributed to returns.
Q. WHICH OTHER STOCKS WORKED OUT WELL FOR THE FUND? WHICH
DISAPPOINTED?
A. Disney, CBS, Corning and Time Warner were all strong contributors.
On the downside, the fund's stake in Saks hurt, as the stock recoiled
- - along with most department stores - in response to declining mall
traffic. Supermarket stocks Kroger, Albertson's and Safeway also were
big negatives, as was Philip Morris, which continued to struggle with
concerns surrounding tobacco-related litigation.
Q. WHAT'S YOUR OUTLOOK?
A. I'll continue to position the fund to further benefit from the
robustness of the U.S. economy, which I feel still has legs. Globally,
I feel it's too early to measure the sustainability of the recoveries
we're watching unfold today. If I happen to see signs of deterioration
domestically, I would consider adding more of the leading
multinationals, which could help performance in the event of a
slowdown.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$35 million
MANAGER: John Porter, since September 1999;
joined Fidelity in 1995
(checkmark)
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Wal-Mart Stores, Inc. 7.4
Procter & Gamble Co. 6.5
Home Depot, Inc. 6.0
The Coca-Cola Co. 4.9
Walt Disney Co. 3.4
Time Warner, Inc. 2.9
AT&T Corp. - Liberty Media 2.5
Group Class A
McDonald's Corp. 2.0
MediaOne Group, Inc. 1.9
Philip Morris Companies, Inc. 1.9
39.4
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Broadcasting 15.6%
General Merchandise Stores 11.7%
Household Products 10.6%
Retail & Wholesale, 9.1%
Miscellaneous
Beverages 9.0%
All Others* 44.0%
Row: 1, Col: 1, Value: 15.6
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 11.7
Row: 1, Col: 4, Value: 10.6
Row: 1, Col: 5, Value: 9.1
Row: 1, Col: 6, Value: 9.0
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 44.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR CONSUMER INDUSTRIES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.3%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.7%
Interpublic Group of 4,900 $ 225,400
Companies, Inc.
Omnicom Group, Inc. 3,300 309,169
Young & Rubicam, Inc. 1,100 59,263
593,832
APPAREL STORES - 2.7%
Abercrombie & Fitch Co. Class 3,290 70,324
A (a)
American Eagle Outfitters, 1,100 39,944
Inc. (a)
AnnTaylor Stores Corp. (a) 1,700 37,400
Claire's Stores, Inc. 1,800 33,750
Gap, Inc. 12,268 548,226
Payless ShoeSource, Inc. (a) 700 28,525
Talbots, Inc. 900 31,894
The Limited, Inc. 4,340 133,184
TJX Companies, Inc. 2,300 37,519
Too, Inc. (a) 705 11,677
Venator Group, Inc. (a) 2,600 15,600
988,043
AUTOS, TIRES, & ACCESSORIES -
0.1%
AutoNation, Inc. (a) 6,800 51,425
BEVERAGES - 9.0%
Adolph Coors Co. Class B 1,400 67,900
Anheuser-Busch Companies, 7,000 472,500
Inc.
Canandaigua Brands, Inc. 1,800 93,375
Class A (a)
Celestial Seasonings, Inc. (a) 8,000 179,000
Coca-Cola Enterprises, Inc. 7,200 181,800
Panamerican Beverages, Inc. 1,600 29,900
Class A
Pepsi Bottling Group, Inc. 2,100 43,444
PepsiCo, Inc. 4,400 150,150
Seagram Co. Ltd. 4,200 241,187
The Coca-Cola Co. 30,800 1,769,075
3,228,331
BROADCASTING - 15.6%
Adelphia Communications Corp. 750 49,641
Class A (a)
American Tower Corp. Class A 500 17,813
(a)
AMFM, Inc. (a) 4,900 382,200
AT&T Corp. - Liberty Media 17,400 889,575
Group Class A (a)
Cablevision Systems Corp. 1,450 110,744
Class A (a)
CBS Corp. (a) 11,249 655,957
Clear Channel Communications, 3,350 289,356
Inc. (a)
Comcast Corp.:
Class A 1,200 51,750
Class A (special) 10,000 460,000
Cox Communications, Inc. 7,300 356,331
Class A (a)
E. W. Scripps Co. Class A 700 32,944
SHARES VALUE (NOTE 1)
EchoStar Communications Corp. 600 $ 48,863
Class A (a)
Hearst-Argyle Television, 700 17,063
Inc. (a)
Hispanic Broadcasting Corp. 700 72,756
(a)
Infinity Broadcasting Corp. 5,900 191,750
Class A
MediaOne Group, Inc. (a) 8,400 667,800
Time Warner, Inc. 13,194 1,054,695
UnitedGlobalCom, Inc. (a) 900 61,538
USA Networks, Inc. (a) 3,700 183,613
5,594,389
BUILDING MATERIALS - 0.1%
Fortune Brands, Inc. 1,800 52,200
CELLULAR - 0.3%
Rogers Communications, Inc. 3,300 100,003
Class B (non-vtg.) (a)
COMPUTER SERVICES & SOFTWARE
- - 0.8%
America Online, Inc. (a) 500 28,469
Circle.com (a) 600 6,600
Galileo International, Inc. 1,700 40,906
Microsoft Corp. (a) 1,800 176,175
Sykes Enterprises, Inc. (a) 1,600 44,300
296,450
COMPUTERS & OFFICE EQUIPMENT
- - 0.1%
Pitney Bowes, Inc. 900 44,100
CONSUMER ELECTRONICS - 0.5%
Gemstar International Group 2,400 159,300
Ltd. (a)
Whirlpool Corp. 600 34,950
194,250
DRUG STORES - 1.5%
CVS Corp. 4,030 140,798
Walgreen Co. 14,300 395,038
535,836
DRUGS & PHARMACEUTICALS - 0.3%
American Home Products Corp. 2,200 103,538
ENTERTAINMENT - 6.8%
Carnival Corp. 9,300 419,081
Fox Entertainment Group, Inc. 1,500 35,250
Class A (a)
Hollywood Entertainment Corp. 1,300 15,519
(a)
International Speedway Corp. 300 15,113
Class A
Royal Caribbean Cruises Ltd. 2,900 143,369
SFX Entertainment, Inc. Class 2,150 70,009
A (a)
Speedway Motorsports, Inc. (a) 700 22,050
Viacom, Inc.:
Class A (a) 1,600 89,300
Class B (non-vtg.) (a) 7,200 398,700
Walt Disney Co. 34,000 1,234,625
2,443,016
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FOODS - 3.9%
American Italian Pasta Co. 2,800 $ 76,650
Class A (a)
Bestfoods 3,950 171,825
Corn Products International, 3,589 82,547
Inc.
Dean Foods Co. 800 27,150
Earthgrains Co. 2,400 37,800
Flowers Industries, Inc. 2,200 26,813
General Mills, Inc. 2,300 71,731
Groupe Danone 100 21,349
Hormel Foods Corp. 900 36,563
IBP, Inc. 2,400 36,000
Keebler Foods Co. (a) 3,600 82,125
Kellogg Co. 1,500 36,375
Nabisco Group Holdings Corp. 8,100 69,863
Nabisco Holdings Corp. Class A 4,000 120,750
Quaker Oats Co. 4,300 255,313
Sara Lee Corp. 5,300 97,719
Sysco Corp. 4,200 149,363
1,399,936
GENERAL MERCHANDISE STORES -
11.7%
Ames Department Stores, Inc. 3,100 64,713
(a)
BJ's Wholesale Club, Inc. (a) 1,100 38,500
Consolidated Stores Corp. (a) 6,140 87,495
Costco Wholesale Corp. (a) 8,700 425,756
Dollar General Corp. 3,625 77,031
Dollar Tree Stores, Inc. (a) 850 37,453
Federated Department Stores, 1,200 49,950
Inc. (a)
Kohls Corp. (a) 3,100 217,388
Neiman Marcus Group, Inc. 346 7,742
Class B (a)
Stein Mart, Inc. (a) 5,000 24,063
Target Corp. 7,900 521,894
Wal-Mart Stores, Inc. 48,200 2,638,932
4,190,917
GROCERY STORES - 1.9%
Albertson's, Inc. 2,521 77,206
Fleming Companies, Inc. 5,220 52,200
Kroger Co. (a) 10,100 175,488
Safeway, Inc. (a) 7,550 288,316
U.S. Foodservice (a) 4,000 72,250
Winn-Dixie Stores, Inc. 600 12,150
677,610
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 0.9%
Linens'n Things, Inc. (a) 2,500 $ 49,063
Newell Rubbermaid, Inc. 8,900 267,000
316,063
HOUSEHOLD PRODUCTS - 10.6%
Avon Products, Inc. 11,950 380,159
Clorox Co. 4,798 229,105
Colgate-Palmolive Co. 3,000 177,750
Dial Corp. 7,500 120,469
Estee Lauder Companies, Inc. 4,300 219,838
Gillette Co. 4,600 173,075
Procter & Gamble Co. 22,985 2,318,612
Unilever NV 6,900 33,546
Unilever NV (NY Shares) 2,960 136,900
Yankee Candle Co., Inc. 700 11,681
3,801,135
LEASING & RENTAL - 0.1%
Crown Castle International 600 18,975
Corp. (a)
Hertz Corp. Class A 400 17,700
36,675
LEISURE DURABLES & TOYS - 0.4%
Callaway Golf Co. 1,100 14,025
Harley-Davidson, Inc. 2,100 147,394
161,419
LODGING & GAMING - 0.5%
Gtech Holdings Corp. (a) 900 20,025
Marriott International, Inc. 1,200 37,275
Class A
Mirage Resorts, Inc. (a) 3,100 38,750
Prime Hospitality Corp. (a) 4,600 36,225
Sun International Hotels Ltd. 400 8,350
(a)
WMS Industries, Inc. (a) 2,400 26,700
167,325
PACKAGING & CONTAINERS - 0.5%
Corning, Inc. 830 128,028
Tupperware Corp. 2,700 44,044
172,072
PAPER & FOREST PRODUCTS - 1.5%
Kimberly-Clark Corp. 8,900 551,244
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 2,000 123,750
PRINTING - 0.1%
R. R. Donnelley & Sons Co. 2,400 52,650
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PUBLISHING - 2.9%
Gannet Co., Inc. 2,800 $ 194,600
Harcourt General, Inc. 1,150 46,000
Harte Hanks Communications, 1,900 45,244
Inc.
Knight-Ridder, Inc. 700 37,319
McGraw-Hill Companies, Inc. 3,900 218,644
Meredith Corp. 2,400 84,000
Playboy Enterprises, Inc. 2,700 62,944
Class B (a)
Reader's Digest Association, 2,200 83,050
Inc. Class A (non-vtg.)
The New York Times Co. Class A 3,500 159,906
Tribune Co. 2,400 101,250
1,032,957
REAL ESTATE INVESTMENT TRUSTS
- - 0.1%
Pinnacle Holdings, Inc. 500 21,219
RESTAURANTS - 3.1%
Brinker International, Inc. 1,500 37,875
(a)
CEC Entertainment, Inc. (a) 1,350 34,003
Darden Restaurants, Inc. 1,900 30,163
Jack in the Box, Inc. (a) 2,700 55,519
McDonald's Corp. 19,800 736,313
Outback Steakhouse, Inc. (a) 4,550 112,613
Papa John's International, 1,600 39,800
Inc. (a)
Starbucks Corp. (a) 800 25,600
Tricon Global Restaurants, 1,550 44,369
Inc. (a)
1,116,255
RETAIL & WHOLESALE,
MISCELLANEOUS - 9.1%
Alberto-Culver Co. Class A 2,800 59,850
Bed Bath & Beyond, Inc. (a) 3,500 95,156
Best Buy Co., Inc. (a) 1,700 81,175
Chemdex Corp. 400 39,000
Circuit City Stores, Inc. - 4,200 161,700
Circuit City Group
Drugstore.com, Inc. 800 24,000
Home Depot, Inc. 37,900 2,146,088
Lowe's Companies, Inc. 7,600 339,150
Office Depot, Inc. (a) 2,300 23,144
Staples, Inc. (a) 8,750 208,359
Tiffany & Co., Inc. 400 29,600
Webvan Group, Inc. 2,400 36,150
Zale Corp. (a) 400 14,300
3,257,672
SECURITIES INDUSTRY - 0.1%
Macrovision Corp. (a) 200 18,738
SERVICES - 2.0%
ACNielsen Corp. (a) 5,300 108,650
Cendant Corp. (a) 5,500 111,031
H&R Block, Inc. 1,700 73,313
SHARES VALUE (NOTE 1)
Manpower, Inc. 2,400 $ 85,650
Modis Professional Services, 300 5,213
Inc. (a)
NCO Group, Inc. (a) 1,900 43,819
Profit Recovery Group 1,650 44,756
International, Inc. (a)
True North Communications 3,300 137,156
Viad Corp. 4,000 105,250
714,838
TEXTILES & APPAREL - 1.1%
Jones Apparel Group, Inc. (a) 3,300 72,600
Liz Claiborne, Inc. 2,600 87,913
Mohawk Industries, Inc. (a) 800 18,750
NIKE, Inc. Class B 3,100 141,050
Pacific Sunwear of 500 14,688
California, Inc. (a)
Shaw Industries, Inc. 1,300 17,631
Tommy Hilfiger (a) 300 3,619
WestPoint Stevens, Inc. Class 1,500 24,656
A
380,907
TOBACCO - 2.0%
Philip Morris Companies, Inc. 31,500 659,531
RJ Reynolds Tobacco Holdings, 2,800 48,125
Inc.
707,656
TOTAL COMMON STOCKS 33,126,451
(Cost $27,395,059)
CASH EQUIVALENTS - 8.4%
Central Cash Collateral Fund, 243,380 243,380
5.56% (b)
Taxable Central Cash Fund, 2,754,013 2,754,013
5.45% (b)
MATURITY AMOUNTS
Investments in repurchase $ 28,004 28,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.70%,
dated 1/31/00 due 2/1/00
TOTAL CASH EQUIVALENTS 3,025,393
(Cost $3,025,393)
TOTAL INVESTMENT PORTFOLIO - 36,151,844
100.7%
(Cost $30,420,452)
NET OTHER ASSETS - (0.7)% (242,518)
NET ASSETS - 100% $ 35,909,326
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $30,488,760. Net unrealized appreciation
aggregated $5,663,084, of which $7,990,832 related to appreciated
investment securities and $2,327,748 related to depreciated investment
securities.
ADVISOR CONSUMER INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 36,151,844
value (including repurchase
agreements of $28,000) (cost
$30,420,452) - See
accompanying schedule
Cash 944
Receivable for investments 119,619
sold
Receivable for fund shares 92,012
sold
Dividends receivable 11,306
Interest receivable 11,607
Other receivables 139
TOTAL ASSETS 36,387,471
LIABILITIES
Payable for investments $ 70,756
purchased
Payable for fund shares 99,493
redeemed
Accrued management fee 17,505
Distribution fees payable 18,572
Other payables and accrued 28,439
expenses
Collateral on securities 243,380
loaned, at value
TOTAL LIABILITIES 478,145
NET ASSETS $ 35,909,326
Net Assets consist of:
Paid in capital $ 30,723,618
Accumulated net investment (122,548)
loss
Accumulated undistributed net (423,092)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 5,731,348
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 35,909,326
CALCULATION OF MAXIMUM $15.67
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($3,330,380 (divided
by) 212,588 shares)
Maximum offering price per $16.63
share (100/94.25 of $15.67)
CLASS T: NET ASSET VALUE $15.57
and redemption price per
share ($16,044,729 (divided
by) 1,030,430 shares)
Maximum offering price per $16.13
share (100/96.50 of $15.57)
CLASS B: NET ASSET VALUE $15.36
and offering price per
share ($9,788,926 (divided
by) 637,420 shares) A
CLASS C: NET ASSET VALUE $15.37
and offering price per
share ($2,692,488 (divided
by) 175,161 shares) A
INSTITUTIONAL CLASS: NET $15.78
ASSET VALUE, offering price
and redemption price per
share ($4,052,803
(divided by) 256,765 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 164,421
Dividends
Interest 60,609
Security lending 305
TOTAL INCOME 225,335
EXPENSES
Management fee $ 110,013
Transfer agent fees 58,932
Distribution fees 109,746
Accounting and security 30,047
lending fees
Non-interested trustees' 55
compensation
Custodian fees and expenses 4,221
Registration fees 52,128
Audit 12,884
Legal 258
Miscellaneous 537
Total expenses before 378,821
reductions
Expense reductions (30,938) 347,883
NET INVESTMENT INCOME (LOSS) (122,548)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (268,219)
Foreign currency transactions (500) (268,719)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (18,445)
Assets and liabilities in (48) (18,493)
foreign currencies
NET GAIN (LOSS) (287,212)
NET INCREASE (DECREASE) IN $ (409,760)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (122,548) $ (162,801)
income (loss)
Net realized gain (loss) (268,719) 807,597
Change in net unrealized (18,493) 3,190,674
appreciation (depreciation)
NET INCREASE (DECREASE) IN (409,760) 3,835,470
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net realized gain (498,458) (1,579,052)
In excess of net realized (154,373) -
gain
TOTAL DISTRIBUTIONS (652,831) (1,579,052)
Share transactions - net (6,806,883) 13,658,707
increase (decrease)
Redemption fees 16,543 14,605
TOTAL INCREASE (DECREASE) (7,852,931) 15,929,730
IN NET ASSETS
NET ASSETS
Beginning of period 43,762,257 27,832,527
End of period (including $ 35,909,326 $ 43,762,257
accumulated net investment
loss of $122,548 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 16.01 $ 15.08 $ 13.48 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.03) (.06) (.05)
Net realized and unrealized (.07) 1.80 3.31 3.60
gain (loss)
Total from investment (.09) 1.77 3.25 3.55
operations
Less Distributions
From net realized gain (.20) (.85) (1.68) (.07)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.85) (1.68) (.07)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.67 $ 16.01 $ 15.08 $ 13.48
TOTAL RETURN B, C (0.48)% 13.49% 27.48% 35.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,330 $ 3,504 $ 2,220 $ 944
(000 omitted)
Ratio of expenses to average 1.50% A, F 1.55% F 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.49% A, G 1.54% G 1.73% G 1.73% A, G
net assets after expense
reductions
Ratio of net investment (.31)% A (.19)% (.47)% (.50)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 15.93 $ 15.00 $ 13.45 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.06) (.10) (.09)
Net realized and unrealized (.07) 1.79 3.28 3.60
gain (loss)
Total from investment (.11) 1.73 3.18 3.51
operations
Less Distributions
From net realized gain (.20) (.81) (1.66) (.06)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.81) (1.66) (.06)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.57 $ 15.93 $ 15.00 $ 13.45
TOTAL RETURN B, C (0.61)% 13.20% 26.93% 35.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 16,045 $ 21,714 $ 13,989 $ 7,314
(000 omitted)
Ratio of expenses to average 1.75% A, F 1.79% F 2.00% F 2.00% A, F
net assets
Ratio of expenses to average 1.74% A, G 1.77% G 1.98% G 1.97% A, G
net assets after expense
reductions
Ratio of net investment (.56)% A (.42)% (.71)% (.83)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 15.76 $ 14.91 $ 13.42 $ 11.46
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.14) (.17) (.08)
Net realized and unrealized (.07) 1.79 3.26 2.04
gain (loss)
Total from investment (.15) 1.65 3.09 1.96
operations
Less Distributions
From net realized gain (.20) (.81) (1.64) -
In excess of net realized gain (.06) - - -
Total distributions (.26) (.81) (1.64) -
Redemption fees added to paid .01 .01 .04 -
in capital
Net asset value, end of period $ 15.36 $ 15.76 $ 14.91 $ 13.42
TOTAL RETURN B, C (0.87)% 12.71% 26.30% 17.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,789 $ 9,832 $ 5,419 $ 596
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.31% F 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.24%A, G 2.30% G 2.48% G 2.46%A, G
net assets after expense
reductions
Ratio of net investment (1.06)% A (.95)% (1.23)% (1.60)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 15.78 $ 14.95 $ 12.66
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.15) (.13)
Net realized and unrealized (.08) 1.80 2.87
gain (loss)
Total from investment (.16) 1.65 2.74
operations
Less Distributions
From net realized gain (.20) (.83) (.49)
In excess of net realized gain (.06) - -
Total distributions (.26) (.83) (.49)
Redemption fees added to paid .01 .01 .04
in capital
Net asset value, end of period $ 15.37 $ 15.78 $ 14.95
TOTAL RETURN B, C (0.93)% 12.72% 22.67%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,692 $ 2,758 $ 1,461
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.32% F 2.50% A, F
net assets
Ratio of expenses to average 2.24% A, G 2.30% G 2.48% A, G
net assets after expense
reductions
Ratio of net investment (1.06)% A (.95)% (1.27)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 16.11 $ 15.12 $ 13.51 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.01) .02 (.03) (.01)
Net realized and unrealized (.07) 1.81 3.31 3.59
gain (loss)
Total from investment (.08) 1.83 3.28 3.58
operations
Less Distributions
From net realized gain (.20) (.85) (1.70) (.07)
In excess of net realized gain (.06) - - -
Total distributions (.26) (.85) (1.70) (.07)
Redemption fees added to paid .01 .01 .03 -
in capital
Net asset value, end of period $ 15.78 $ 16.11 $ 15.12 $ 13.51
TOTAL RETURN B, C (0.41)% 13.87% 27.70% 35.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,053 $ 5,954 $ 4,745 $ 1,333
(000 omitted)
Ratio of expenses to average 1.25% A, F 1.26% F 1.50% F 1.50% A, F
net assets
Ratio of expenses to average 1.24% A, G 1.24% G 1.48% G 1.48% A, G
net assets after expense
reductions
Ratio of net investment (.06)% A .11% (.20)% (.13)% A
income (loss) to average net
assets
Portfolio turnover 69% A 80% 144% 203% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS 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 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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 (the 1940 Act), as amended, 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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities (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. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $12,429,772 and $19,792,611, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 4,179 $ 20
CLASS T 43,696 5
CLASS B 48,539 36,416
CLASS C 13,332 7,223
$ 109,746 $ 43,664
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 8,987 $ 3,402
CLASS T 16,119 5,754
CLASS B 23,708 23,708*
CLASS C 910 910*
$ 49,724 $ 33,774
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 5,486 .33*
CLASS T 26,066 .30*
CLASS B 16,719 .34*
CLASS C 4,921 .37*
INSTITUTIONAL CLASS 5,740 .24*
$ 58,932
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $2,796 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $235,372. The fund received cash collateral of
$243,380 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) above the following
annual rates or range of annual rates of average net assets for each
of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.50% $ 2,959
CLASS T 1.75% 12,716
CLASS B 2.25% 9,241
CLASS C 2.25% 2,870
INSTITUTIONAL CLASS 1.25% 2,102
$ 29,888
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 $1,050 under this arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED
JULY 31,
2000 1999
FROM NET REALIZED GAIN
Class A $ 42,256 $ 121,205
Class T 225,116 772,710
Class B 124,776 327,913
Class C 33,822 82,950
Institutional Class 72,488 274,274
Total $ 498,458 $ 1,579,052
IN EXCESS OF NET REALIZED GAIN
Class A $ 13,086 $ -
Class T 69,719 -
Class B 38,643 -
Class C 10,475 -
Institutional Class 22,450 -
Total $ 154,373 $ -
$ 652,831 $ 1,579,052
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 115,099 $ 911,182
58,720
Reinvestment of distributions 3,047 9,730 47,113
Shares redeemed (68,047) (53,179) (1,067,352)
Net increase (decrease) (6,280) 71,650 $ (109,057)
CLASS T Shares sold 130,008 836,168 $ 2,035,038
Reinvestment of distributions 17,994 59,298 276,740
Shares redeemed (480,531) (465,170) (7,519,478)
Net increase (decrease) (332,529) 430,296 $ (5,207,700)
CLASS B Shares sold 146,998 400,266 $ 2,274,654
Reinvestment of distributions 9,759 25,754 148,334
Shares redeemed (143,341) (165,340) (2,194,935)
Net increase (decrease) 13,416 260,680 $ 228,053
CLASS C Shares sold 47,031 138,656 $ 733,013
Reinvestment of distributions 2,694 6,196 40,997
Shares redeemed (49,385) (67,731) (768,770)
Net increase (decrease) 340 77,121 $ 5,240
INSTITUTIONAL CLASS Shares 10,002 257,491 $ 155,502
sold
Reinvestment of distributions 4,958 21,083 77,138
Shares redeemed (127,737) (222,900) (1,956,059)
Net increase (decrease) (112,777) 55,674 $ (1,723,419)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 1,782,025
Reinvestment of distributions 119,873
Shares redeemed (794,506)
Net increase (decrease) $ 1,107,392
CLASS T Shares sold $ 12,781,566
Reinvestment of distributions 728,776
Shares redeemed (6,990,735)
Net increase (decrease) $ 6,519,607
CLASS B Shares sold $ 5,949,947
Reinvestment of distributions 314,459
Shares redeemed (2,389,462)
Net increase (decrease) $ 3,874,944
CLASS C Shares sold $ 2,101,382
Reinvestment of distributions 75,712
Shares redeemed (994,371)
Net increase (decrease) $ 1,182,723
INSTITUTIONAL CLASS Shares $ 3,899,578
sold
Reinvestment of distributions 260,589
Shares redeemed (3,186,126)
Net increase (decrease) $ 974,041
</TABLE>
ADVISOR CYCLICAL INDUSTRIES FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CYCLICAL - INST CL -6.97% 4.27% 53.51%
S&P 500 5.59% 10.35% 124.60%
GS Cyclical Industries -10.93% -3.26% 38.24%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Cyclical Industries Index - a
market capitalization-weighted index of 246 stocks designed to measure
the performance of companies in the cyclical industries sector. Issues
in the index include providers of consumer and commercial goods and
services where performance is influenced by the cyclicality of
economy, such as: manufacturers of automobiles and companies involved
with construction of residential and commercial properties, producers
of chemicals, electrical equipment and components, and providers of
environmental services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV CYCLICAL - INST CL 4.27% 13.39%
S&P 500 10.35% 26.77%
GS Cyclical Industries -3.26% 9.96%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Cyclical Ind -CL I S&P 500 GS Cyclical Industries
00204 SP001 GS003
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10390.00 10516.69 10449.51
1996/10/31 10690.00 10806.74 10623.81
1996/11/30 11330.00 11623.62 11299.86
1996/12/31 11260.09 11393.36 11101.84
1997/01/31 11562.78 12105.21 11459.45
1997/02/28 11603.14 12200.12 11487.29
1997/03/31 11239.91 11698.81 11120.08
1997/04/30 11441.70 12397.23 11654.84
1997/05/31 12390.13 13151.98 12461.54
1997/06/30 13045.96 13741.19 12959.26
1997/07/31 13964.13 14834.57 13980.32
1997/08/31 13661.43 14003.54 13471.60
1997/09/30 13989.10 14770.51 13938.94
1997/10/31 13094.39 14277.18 13095.58
1997/11/30 13315.44 14938.07 13453.87
1997/12/31 13424.95 15194.56 13598.24
1998/01/31 13717.97 15362.61 13598.41
1998/02/28 14803.26 16470.56 14714.19
1998/03/31 15530.40 17314.02 15518.24
1998/04/30 15747.45 17488.19 15588.62
1998/05/31 15519.54 17187.57 15359.18
1998/06/30 15584.66 17885.73 15161.59
1998/07/31 14846.67 17695.25 14328.86
1998/08/31 12589.28 15136.87 12063.57
1998/09/30 12688.05 16106.54 12434.95
1998/10/31 13901.39 17416.64 13538.58
1998/11/30 14340.50 18472.27 14155.28
1998/12/31 14964.50 19536.64 14242.33
1999/01/31 14721.83 20353.66 14290.54
1999/02/28 14363.61 19721.07 14008.83
1999/03/31 14525.39 20510.11 14191.98
1999/04/30 16489.84 21304.46 16333.87
1999/05/31 16235.62 20801.47 15712.77
1999/06/30 16848.07 21955.95 16252.48
1999/07/31 16501.40 21270.48 15520.45
1999/08/31 16200.95 21165.19 15169.89
1999/09/30 15770.72 20585.06 14547.14
1999/10/31 16153.39 21887.68 14604.43
1999/11/30 15677.95 22332.66 14151.81
1999/12/31 16931.73 23648.05 15031.88
2000/01/31 15350.65 22459.97 13824.02
IMATRL PRASUN SHR__CHT 20000131 20000216 143320 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$15,351 - a 53.51% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Cyclical Industries Index,
it would have grown to $13,824 - a 38.24% increase.
ADVISOR CYCLICAL INDUSTRIES FUND
FUND TALK: THE MANAGERS' OVERVIEW
(photographs of Albert Ruback and Brian Hogan)
NOTE TO SHAREHOLDERS: The following is an interview with Albert Ruback
(left), who managed Fidelity Advisor Cyclical Industries Fund during
the period covered by this report, with additional comments from Brian
Hogan, who became manager of the fund on February 1, 2000.
Q. HOW DID THE FUND PERFORM, ALBERT?
A. For the six months that ended January 31, 2000, the fund's
Institutional Class shares returned -6.97%. For the same six-month
period, the Goldman Sachs Cyclical Index - an index of 246 stocks
designed to measure the performance of companies in the cyclical
industries sector - returned -10.93%, while the Standard & Poor's 500
Index returned 5.59%. For the 12 months that ended January 31, 2000,
the fund returned 4.27% while the Goldman Sachs index and the S&P 500
returned -3.26% and 10.35%, respectively.
Q. WHAT FACTORS DROVE CYCLICAL INDUSTRY STOCK PERFORMANCE DURING THE
PERIOD?
A.R. Overall, cyclical stocks were out of favor during the past six
months. Investors favored stocks with high revenue growth expectations
- - such as technology and communication stocks - at the expense of
stocks providing solid earnings growth with less spectacular revenue
gains. These conditions created obstacles for investors in many of the
well-managed industrial companies comprising the cyclical industries
group. Rising interest rates further complicated the investment
environment because cyclical stock price performance is closely linked
with investors' expectations about the economy's strength, and rising
interest rates typically suggest that economic growth may slow down.
Q. WHAT STRATEGY DID YOU USE TO OUTPERFORM THE GOLDMAN SACHS INDEX IN
THIS CHALLENGING ENVIRONMENT?
A.R. Although market sentiment was relatively unfavorable for the
cyclical sector, the fund substantially outperformed the Goldman Sachs
index by virtue of strong stock selection across a variety of cyclical
subsectors. I emphasized well-managed companies with dominant market
positions that adapted their business models to participate in the
evolving e-commerce environment. For example, companies such as
General Electric made sizable, early investments in Internet
technology and now are well-positioned to increase market share,
revenue growth and earnings potential. In addition, the fund benefited
from not owning certain stocks for much of the period, including those
of automobile manufacturers. Rising interest rates forced automakers
to offer significant incentives to maintain sales volume, and this had
a negative effect on earnings growth and stock prices.
Q. WHICH STOCKS PERFORMED WELL FOR THE FUND?
A.R. I already mentioned General Electric, which is the fund's largest
holding. GE should benefit from its early investment in web site
development, as much of the site's content can lead to new marketing
opportunities and enhanced revenue growth. For example, within the
Power Division, utility managers can access GE's web site and evaluate
the relative performance of their GE turbines vis-a-vis those of their
competitors. Furthermore, the site alerts managers to products and
services that have the potential to increase operating efficiency, an
important feature in the deregulating utility sector. Boeing also did
well late in the period. Performance was driven by substantial
progress in inventory reduction and a bottoming order cycle that
combined with improving global economic conditions - particularly in
Asia - to suggest that order rates and fundamental operations should
begin to improve.
Q. WHICH STOCKS WERE DISAPPOINTING?
A.R. Six months ago, Honeywell, Textron and SPX Corp. were among the
fund's top performers, benefiting from a cyclical stock rally that
enhanced their earnings potential. However, these stocks fell short of
my expectations during the past six months as market sentiment shifted
toward stocks offering higher revenue growth. Despite strong
management teams, positive operating fundamentals and appealing
long-term earnings prospects, these companies operate in mature,
slow-growth industrial markets such as avionics and automotive
components.
Q. TURNING TO YOU, BRIAN, WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
B.H. Industrial activity levels - domestically and abroad - suggest a
positive business environment for many cyclical companies. I
anticipate focusing on companies where earnings are driven by
accelerating revenue growth rather than by cost cutting. More
specifically, I intend to highlight companies that have taken
advantage of the "new economy" by expanding their markets and business
opportunities. I also expect to de-emphasize interest-rate sensitive
consumer-oriented stocks - such as auto manufacturers and building
material companies - that tend to perform poorly in rising
interest-rate environments.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$8 million
MANAGER: Brian Hogan, since February 2000;
joined Fidelity in 1994
(checkmark)
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
General Electric Co. 9.4
General Motors Corp. 6.1
Boeing Co. 5.7
Honeywell International, Inc. 5.1
Tyco International Ltd. 4.3
E. I. du Pont de Nemours and 3.7
Co.
General Dynamics Corp. 3.0
Union Carbide Corp. 2.9
United Technologies Corp. 2.9
Minnesota Mining & 2.7
Manufacturing Co.
45.8
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Aerospace & Defense 18.2%
Autos, Tires, & Accessories 12.7%
Chemicals & Plastics 12.1%
Electrical Equipment 11.1%
Electronics 4.3%
All Others* 41.6%
Row: 1, Col: 1, Value: 17.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 12.7
Row: 1, Col: 4, Value: 12.1
Row: 1, Col: 5, Value: 11.1
Row: 1, Col: 6, Value: 4.3
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 42.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR CYCLICAL INDUSTRIES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 94.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 18.2%
Alliant Techsystems, Inc. (a) 200 $ 12,975
BFGoodrich Co. 700 17,500
Boeing Co. 11,000 487,438
Bombardier, Inc. Class B 1,900 38,517
Cordant Technologies, Inc. 1,000 33,063
Honeywell International, Inc. 9,112 437,376
Howmet International, Inc. (a) 1,000 18,375
Lockheed Martin Corp. 1,614 30,263
Rockwell International Corp. 1,200 59,325
Textron, Inc. 3,000 179,063
United Technologies Corp. 4,611 244,095
1,557,990
AIR TRANSPORTATION - 3.2%
America West Holding Corp. 1,200 21,450
Class B (a)
AMR Corp. (a) 4,100 220,631
Atlantic Coast Airlines 100 1,806
Holdings, Inc. (a)
Northwest Airlines Corp. 350 7,066
Class A (a)
Southwest Airlines Co. 1,725 27,492
278,445
AUTOS, TIRES, & ACCESSORIES -
12.7%
Danaher Corp. 650 28,031
Delphi Automotive Systems 2,500 43,281
Corp.
Federal-Mogul Corp. 50 756
Ford Motor Co. 3,700 184,075
General Motors Corp. 6,450 518,822
Johnson Controls, Inc. 500 27,625
Navistar International Corp. 1,500 58,969
(a)
SPX Corp. (a) 3,000 222,000
1,083,559
BUILDING MATERIALS - 3.2%
American Standard Companies, 3,000 112,500
Inc. (a)
Ferro Corp. 900 17,550
Fortune Brands, Inc. 800 23,200
Lafarge Corp. 1,100 26,538
Masco Corp. 2,900 57,819
Omnova Solutions, Inc. 2,900 21,750
Owens Corning 700 11,244
USG Corp. 200 7,525
278,126
CHEMICALS & PLASTICS - 12.0%
Air Products & Chemicals, 1,400 41,475
Inc.
Avery Dennison Corp. 1,000 67,750
CK Witco Corp. 1,293 15,435
E. I. du Pont de Nemours and 5,360 316,240
Co.
Engelhard Corp. 1,000 15,938
Potash Corp. of Saskatchewan 400 20,825
SHARES VALUE (NOTE 1)
Praxair, Inc. 3,700 $ 150,081
Rohm & Haas Co. 2,000 84,500
Sealed Air Corp. (a) 760 42,655
Solutia, Inc. 460 6,325
Spartech Corp. 800 20,500
Union Carbide Corp. 4,400 246,400
1,028,124
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 100 2,900
COMPUTER SERVICES & SOFTWARE
- - 1.6%
Litton Industries, Inc. (a) 3,200 135,800
COMPUTERS & OFFICE EQUIPMENT
- - 0.4%
Pitney Bowes, Inc. 700 34,300
CONSTRUCTION - 0.4%
Centex Corp. 500 11,000
Kaufman & Broad Home Corp. 600 13,013
Lennar Corp. 600 9,563
Oakwood Homes Corp. 700 1,925
35,501
CONSUMER DURABLES - 2.7%
Minnesota Mining & 2,500 234,063
Manufacturing Co.
CONSUMER ELECTRONICS - 1.0%
Black & Decker Corp. 700 28,044
General Motors Corp. Class H 500 56,250
(a)
84,294
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 100 1,400
ELECTRICAL EQUIPMENT - 11.1%
Emerson Electric Co. 2,500 137,656
General Electric Co. 6,000 800,241
Hubbell, Inc. Class B 500 12,969
950,866
ELECTRONIC INSTRUMENTS - 0.0%
Sequenom, Inc. 100 2,600
ELECTRONICS - 4.3%
Quantum Effect Devices, Inc. 100 1,600
Tyco International Ltd. 8,500 363,375
364,975
ENGINEERING - 3.3%
Fluor Corp. 2,200 87,863
PerkinElmer, Inc. 3,900 195,244
283,107
HOME FURNISHINGS - 0.3%
Leggett & Platt, Inc. 1,300 23,400
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.2%
Caterpillar, Inc. 2,000 $ 84,875
Deere & Co. 100 4,369
Illinois Tool Works, Inc. 2,200 128,700
Ingersoll-Rand Co. 2,200 103,538
Parker-Hannifin Corp. 800 34,600
356,082
IRON & STEEL - 0.5%
Bethlehem Steel Corp. (a) 4,100 27,931
USX - U.S. Steel Group 500 12,438
40,369
LEASING & RENTAL - 0.1%
Ryder System, Inc. 250 5,516
METALS & MINING - 1.9%
Alcoa, Inc. 1,770 123,347
Inco Ltd. (a) 500 9,444
Martin Marietta Materials, 774 32,508
Inc.
165,299
PACKAGING & CONTAINERS - 1.2%
Ball Corp. 700 25,463
Bemis Co., Inc. 1,000 31,563
Owens-Illinois, Inc. (a) 2,200 40,288
Silgan Holdings, Inc. (a) 700 9,450
106,764
PAPER & FOREST PRODUCTS - 3.7%
Bowater, Inc. 1,300 67,194
Champion International Corp. 900 52,650
Fort James Corp. 800 21,400
International Paper Co. 1,542 73,438
Smurfit-Stone Container Corp. 5,056 100,172
(a)
314,854
POLLUTION CONTROL - 0.4%
Ogden Corp. 1,900 21,494
Republic Services, Inc. Class 800 9,400
A (a)
30,894
RAILROADS - 2.9%
Burlington Northern Santa Fe 3,700 89,031
Corp.
Canadian Pacific Ltd. 4,000 85,792
CSX Corp. 950 27,788
Union Pacific Corp. 1,100 44,000
246,611
SHARES VALUE (NOTE 1)
SERVICES - 0.8%
Ecolab, Inc. 2,000 $ 70,375
SHIP BUILDING & REPAIR - 3.0%
General Dynamics Corp. 5,400 254,475
TEXTILES & APPAREL - 0.5%
Shaw Industries, Inc. 2,500 33,906
Unifi, Inc. (a) 500 5,531
39,437
TRUCKING & FREIGHT - 0.9%
Expeditors International of 800 33,725
Washington, Inc.
United Parcel Service, Inc. 600 35,700
Class B
USFreightways Corp. 200 7,275
76,700
TOTAL COMMON STOCKS 8,086,826
(Cost $8,114,198)
CONVERTIBLE PREFERRED STOCKS
- - 0.1%
CHEMICALS & PLASTICS - 0.1%
Sealed Air Corp. Series A, 142 7,562
$2.00 (Cost $6,266)
CASH EQUIVALENTS - 7.0%
Taxable Central Cash Fund, 600,013 600,013
5.45% (b) (Cost $600,013)
TOTAL INVESTMENT PORTFOLIO - 8,694,401
101.6% (Cost $8,720,477)
NET OTHER ASSETS - (1.6)% (140,192)
NET ASSETS - 100% $ 8,554,209
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $8,746,843. Net unrealized depreciation
aggregated $52,442, of which $839,419 related to appreciated
investment securities and $891,861 related to depreciated investment
securities.
ADVISOR CYCLICAL INDUSTRIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 8,694,401
value (cost $8,720,477) -
See accompanying schedule
Receivable for investments 627,861
sold
Receivable for fund shares 3,963
sold
Dividends receivable 5,428
Interest receivable 1,657
Other receivables 711
Receivable from investment 3,767
adviser for expense
reductions
TOTAL ASSETS 9,337,788
LIABILITIES
Payable for investments $ 743,397
purchased
Payable for fund shares 14,289
redeemed
Distribution fees payable 3,831
Other payables and accrued 22,062
expenses
TOTAL LIABILITIES 783,579
NET ASSETS $ 8,554,209
Net Assets consist of:
Paid in capital $ 8,477,944
Accumulated net investment (20,213)
loss
Accumulated undistributed net 122,554
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation (26,076)
(depreciation) on investments
NET ASSETS $ 8,554,209
CALCULATION OF MAXIMUM $12.87
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($917,663 (divided by)
71,322 shares)
Maximum offering price per $13.66
share (100/94.25 of
$12.87)
CLASS T: NET ASSET VALUE $12.81
and redemption price per
share ($2,752,031 (divided
by) 214,799 shares)
Maximum offering price per $13.27
share (100/96.50 of
$12.81)
CLASS B: NET ASSET VALUE $12.63
and offering price per
share ($1,957,470 (divided
by) 155,009 shares) A
CLASS C: NET ASSET VALUE $12.66
and offering price per
share ($792,354 (divided by)
62,577 shares) A
INSTITUTIONAL CLASS: NET $13.01
ASSET VALUE, offering price
and redemption price per
share ($2,134,691
(divided by) 164,138 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 62,173
Dividends
Interest 10,094
Security lending 25
TOTAL INCOME 72,292
EXPENSES
Management fee $ 28,729
Transfer agent fees 16,070
Distribution fees 24,123
Accounting and security 30,111
lending fees
Non-interested trustees' 19
compensation
Custodian fees and expenses 2,456
Registration fees 51,624
Audit 12,840
Legal 63
Miscellaneous 53
Total expenses before 166,088
reductions
Expense reductions (79,650) 86,438
NET INVESTMENT INCOME (LOSS) (14,146)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 268,034
Foreign currency transactions 170 268,204
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (980,908)
Assets and liabilities in 2 (980,906)
foreign currencies
NET GAIN (LOSS) (712,702)
NET INCREASE (DECREASE) IN $ (726,848)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (14,146) $ (11,063)
income (loss)
Net realized gain (loss) 268,204 28,779
Change in net unrealized (980,906) 563,364
appreciation (depreciation)
NET INCREASE (DECREASE) IN (726,848) 581,080
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to (6,067) -
shareholders In excess of
net investment income
From net realized gain (172,028) (287,985)
TOTAL DISTRIBUTIONS (178,095) (287,985)
Share transactions - net (1,779,960) 4,985,782
increase (decrease)
Redemption fees 852 6,625
TOTAL INCREASE (DECREASE) (2,684,051) 5,285,502
IN NET ASSETS
NET ASSETS
Beginning of period 11,238,260 5,952,758
End of period (including $ 8,554,209 $ 11,238,260
accumulated net investment
loss of $20,213 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 14.13 $ 13.56 $ 13.80 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.00) .01 (.03) (.01)
Net realized and unrealized (.99) 1.23 .76 3.89
gain (loss)
Total from investment (.99) 1.24 .73 3.88
operations
Less Distributions
From net investment income - - - (.01)
In excess of net investment (.01) - - -
income
From net realized gain (.26) (.68) (.99) (.08)
Total distributions (.27) (.68) (.99) (.09)
Redemption fees added to paid .00 .01 .02 .01
in capital
Net asset value, end of period $ 12.87 $ 14.13 $ 13.56 $ 13.80
TOTAL RETURN B, C (7.11)% 10.81% 6.05% 39.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 918 $ 896 $ 471 $ 365
(000 omitted)
Ratio of expenses to average 1.50% A, F 1.56% F 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.50% A 1.54% G 1.75% 1.73% A, G
net assets after expense
reductions
Ratio of net investment (.05)% A .05% (.22)% (.09)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 14.07 $ 13.51 $ 13.77 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.03) (.06) (.04)
Net realized and unrealized (.99) 1.24 .77 3.89
gain (loss)
Total from investment (1.01) 1.21 .71 3.85
operations
Less Distributions
From net investment income - - - (.01)
From net realized gain (.25) (.66) (.99) (.08)
Total distributions (.25) (.66) (.99) (.09)
Redemption fees added to paid .00 .01 .02 .01
in capital
Net asset value, end of period $ 12.81 $ 14.07 $ 13.51 $ 13.77
TOTAL RETURN B, C (7.28)% 10.57% 5.91% 38.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,752 $ 3,471 $ 2,973 $ 1,920
(000 omitted)
Ratio of expenses to average 1.75% A, F 1.83% F 2.00% F 2.00% A, F
net assets
Ratio of expenses to average 1.75% A 1.81% G 2.00% 1.97% A, G
net assets after expense
reductions
Ratio of net investment (.30)% A (.22)% (.47)% (.37)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 13.89 $ 13.40 $ 13.75 $ 11.56
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.09) (.14) (.06)
Net realized and unrealized (.97) 1.22 .76 2.25
gain (loss)
Total from investment (1.02) 1.13 .62 2.19
operations
Less Distributions
From net realized gain (.24) (.65) (.99) -
Redemption fees added to paid .00 .01 .02 -
in capital
Net asset value, end of period $ 12.63 $ 13.89 $ 13.40 $ 13.75
TOTAL RETURN B, C (7.44)% 10.01% 5.23% 18.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,957 $ 2,043 $ 985 $ 252
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.31% F 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.25% A 2.29% G 2.50% 2.45% A, G
net assets after expense
reductions
Ratio of net investment (.80)% A (.70)% (1.03)% (1.11)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100% 155% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 13.91 $ 13.45 $ 12.54
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.09) (.11)
Net realized and unrealized (.98) 1.20 1.39
gain (loss)
Total from investment (1.03) 1.11 1.28
operations
Less Distributions
From net realized gain (.22) (.67) (.38)
Redemption fees added to paid .00 .02 .01
in capital
Net asset value, end of period $ 12.66 $ 13.91 $ 13.45
TOTAL RETURN B, C (7.50)% 9.94% 10.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 792 $ 1,451 $ 165
(000 omitted)
Ratio of expenses to average 2.25% A, F 2.28% F 2.50% A, F
net assets
Ratio of expenses to average 2.25% A 2.27% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.80)% A (.67)% (1.06)% A
income (loss) to average net
assets
Portfolio turnover 67% A 115% 100%
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 F
Net asset value, beginning of $ 14.28 $ 13.68 $ 13.84 $ 10.00
period
Income from Investment
Operations
Net investment income D .01 .04 .01 E .03
Net realized and unrealized (.99) 1.25 .75 3.91
gain (loss)
Total from investment (.98) 1.29 .76 3.94
operations
Less Distributions
From net investment income - - - (.02)
In excess of net investment (.03) - - -
income
From net realized gain (.26) (.70) (.95) (.08)
Total distributions (.29) (.70) (.95) (.10)
Redemption fees added to paid .00 .01 .03 -
in capital
Net asset value, end of period $ 13.01 $ 14.28 $ 13.68 $ 13.84
TOTAL RETURN B, C (6.97)% 11.15% 6.32% 39.64%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,135 $ 3,377 $ 1,360 $ 1,756
(000 omitted)
Ratio of expenses to average 1.25% A, G 1.31% G 1.50% G 1.50% A, G
net assets
Ratio of expenses to average 1.25% A 1.29% H 1.50% 1.48% A, H
net assets after expense
reductions
Ratio of net investment .20% A .31% .04% .25% A
income to average net assets
Portfolio turnover 67% A 115% 100% 155% A
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 DURING THE PERIOD, A
SIGNIFICANT SHAREHOLDER
REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL OF
INVESTMENT INCOME PER SHARE.
F FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE
OF INSTITUTIONAL CLASS
SHARES) TO JULY 31, 1997.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,180,488 and $4,768,115, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,203 $ 200
CLASS T 7,788 355
CLASS B 9,841 7,536
CLASS C 5,291 4,211
$ 24,123 $ 12,302
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,925 $ 1,087
CLASS T 4,483 2,094
CLASS B 3,759 3,759 *
CLASS C 2,171 2,171 *
$ 12,338 $ 9,111
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 1,789 .37 *
CLASS T 5,617 .36 *
CLASS B 3,623 .37 *
CLASS C 1,867 .35 *
INSTITUTIONAL CLASS 3,174 .22 *
$ 16,070
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $187 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end there were no loans
outstanding.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, certain securities lending fees, brokerage
commissions and extraordinary expenses, if any) above the following
annual rates or range of annual rates of average net assets for each
of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.50% $ 7,942
CLASS T 1.75% 25,510
CLASS B 2.25% 16,166
CLASS C 2.25% 8,614
INSTITUTIONAL CLASS 1.25% 21,256
$ 79,488
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 $162 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
approximately 18% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 805 $ -
Institutional Class 5,262 -
Total $ 6,067 $ -
FROM NET REALIZED GAIN
Class A $ 20,078 $ 23,684
Class T 54,397 144,300
Class B 34,806 41,003
Class C 14,419 9,726
Institutional Class 48,328 69,272
Total $ 172,028 $ 287,985
$ 178,095 $ 287,985
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 37,470 $ 378,674
28,028
Reinvestment of distributions 1,425 2,196 19,437
Shares redeemed (21,517) (11,006) (293,433)
Net increase (decrease) 7,936 28,660 $ 104,678
CLASS T Shares sold 30,509 149,470 $ 419,053
Reinvestment of distributions 3,842 13,134 52,336
Shares redeemed (66,275) (135,949) (911,212)
Net increase (decrease) (31,924) 26,655 $ (439,823)
CLASS B Shares sold 51,366 121,052 $ 699,004
Reinvestment of distributions 1,960 3,632 26,344
Shares redeemed (45,413) (51,075) (617,694)
Net increase (decrease) 7,913 73,609 $ 107,654
CLASS C Shares sold 18,871 106,908 $ 258,091
Reinvestment of distributions 650 915 8,758
Shares redeemed (61,305) (15,704) (824,943)
Net increase (decrease) (41,784) 92,119 $ (558,094)
INSTITUTIONAL CLASS Shares 12,901 145,280 $ 178,799
sold
Reinvestment of distributions 2,497 6,212 34,539
Shares redeemed (87,800) (14,316) (1,207,713)
Net increase (decrease) (72,402) 137,176 $ (994,375)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 504,717
Reinvestment of distributions 23,537
Shares redeemed (149,922)
Net increase (decrease) $ 378,332
CLASS T Shares sold $ 2,008,694
Reinvestment of distributions 140,529
Shares redeemed (1,711,581)
Net increase (decrease) $ 437,642
CLASS B Shares sold $ 1,640,891
Reinvestment of distributions 38,541
Shares redeemed (651,249)
Net increase (decrease) $ 1,028,183
CLASS C Shares sold $ 1,480,405
Reinvestment of distributions 9,726
Shares redeemed (201,951)
Net increase (decrease) $ 1,288,180
INSTITUTIONAL CLASS Shares $ 1,976,046
sold
Reinvestment of distributions 67,155
Shares redeemed (189,756)
Net increase (decrease) $ 1,853,445
</TABLE>
ADVISOR FINANCIAL SERVICES FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - INST -6.92% -3.81% 80.56%
CL
S&P 500 5.59% 10.35% 124.60%
GS Financial Services -7.90% -5.46% 87.19%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Financial Services Index - a
market capitalization-weighted index of 251 stocks designed to measure
the performance of companies in the financial services sector. Issues
in the index include financial institutions providing banking
services, brokerage firms and asset managers, insurance companies, and
real estate holding and development companies. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV FINANCIAL - INST -3.81% 18.91%
CL
S&P 500 10.35% 26.77%
GS Financial Services -5.46% 20.18%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Financial Serv -CL I S&P 500 GS Financial Services
00273 SP001 GS004
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10620.00 10516.69 10584.56
1996/10/31 11190.00 10806.74 11272.70
1996/11/30 12090.00 11623.62 12278.35
1996/12/31 11729.57 11393.36 12100.98
1997/01/31 12351.14 12105.21 12935.63
1997/02/28 12501.52 12200.12 13395.32
1997/03/31 11619.29 11698.81 12504.96
1997/04/30 12571.69 12397.23 13328.32
1997/05/31 13052.91 13151.98 14040.84
1997/06/30 13734.63 13741.19 14892.68
1997/07/31 15178.26 14834.57 16504.52
1997/08/31 14275.99 14003.54 15483.68
1997/09/30 15189.28 14770.51 16744.42
1997/10/31 15098.86 14277.18 16445.06
1997/11/30 15601.15 14938.07 17053.65
1997/12/31 16458.84 15194.56 17997.81
1998/01/31 16254.76 15362.61 17523.74
1998/02/28 17622.08 16470.56 19045.66
1998/03/31 18611.86 17314.02 20165.67
1998/04/30 18907.77 17488.19 20512.24
1998/05/31 18499.62 17187.57 20061.46
1998/06/30 19244.50 17885.73 20758.18
1998/07/31 19183.28 17695.25 20510.80
1998/08/31 14969.08 15136.87 16002.19
1998/09/30 15496.48 16106.54 16320.87
1998/10/31 16940.32 17416.64 18092.98
1998/11/30 17932.27 18472.27 19193.75
1998/12/31 18428.25 19536.64 19625.39
1999/01/31 18769.92 20353.66 19800.64
1999/02/28 18913.20 19721.07 19947.58
1999/03/31 19530.42 20510.11 20595.27
1999/04/30 20952.21 21304.46 22002.58
1999/05/31 19739.83 20801.47 20987.62
1999/06/30 20456.24 21955.95 21531.79
1999/07/31 19398.16 21270.48 20324.07
1999/08/31 18483.36 21165.19 19310.55
1999/09/30 17788.75 20585.06 18183.14
1999/10/31 20245.82 21887.68 20791.31
1999/11/30 19256.32 22332.66 19832.83
1999/12/31 18867.19 23648.05 19441.02
2000/01/31 18055.58 22459.97 18719.07
IMATRL PRASUN SHR__CHT 20000131 20000225 083924 R00000000000044
$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, 2000, the value of the investment would have grown to
$18,056 - a 80.56% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,460 - a 124.60% increase. If
$10,000 was invested in the Goldman Sachs Financial Services
Industries Index, it would have grown to $18,719 - a 87.19% increase.
ADVISOR FINANCIAL SERVICES FUND
FUND TALK: THE MANAGERS' OVERVIEW
(photogrtaphs of Robert Ewing and James Catudal)
NOTE TO SHAREHOLDERS: The following is an interview with Robert Ewing
(left), who managed the Fidelity Advisor Financial Services Fund
during the period covered by this report, with additional comments
from James Catudal, who became manager of the fund on February 1,
2000.
Q. HOW DID THE FUND PERFORM, BOB?
A. During the six months that ended January 31, 2000, the fund's
Institutional Class shares had a total return of -6.92%. During the
same period, the Goldman Sachs Financial Services Index, an index of
251 stocks designed to measure the performance of companies in the
financial services sector, had a return of -7.90%, while the Standard
& Poor's 500 Index returned 5.59%. For the 12-month period that ended
January 31, 2000, the fund's Institutional Class shares had a total
return of -3.81%, while the Goldman Sachs index returned -5.46% and
the S&P 500 index returned 10.35%.
Q. WHAT FACTORS AFFECTED PERFORMANCE DURING THE PERIOD?
R.E. It was a very challenging period for financial services stocks,
principally because interest rates were rising, which traditionally
undermines the value of these stocks. We consistently pursued three
investment themes: an emphasis on consumer-related companies; a
de-emphasis of regional banks; and an underweighting in property and
casualty companies. The strategy to overweight consumer companies
brought disappointing results, as higher interest rates hurt
mortgage-related and consumer credit firms. The decisions to
underweight regional banks and property and casualty insurers worked
well. Regional banks tend to be good investments early in economic
expansions, when their stocks are relatively inexpensive. This was not
the case early in the period. Moreover, as the difference between
short-term and long-term interest rates narrowed, banks lost some of
their ability to profit from the "spread" between interest rates. In
addition, competition facing regional banks intensified because of a
variety of factors, including the rising use of the Internet. Property
and casualty companies, especially those emphasizing consumer
businesses such as homeowners and automobile insurance, continued to
have difficulty because of intense price competition, including from
online competitors.
Q. WHAT WERE SOME OF THE CONTRIBUTORS TO PERFORMANCE?
R.E. Brokerages were big contributors. Major holdings such as Morgan
Stanley Dean Witter and Lehman Brothers were excellent performers,
helped by very active capital markets. U.S. brokerages also gained
business in Europe, where the capital markets were active. While most
consumer stocks were disappointing, an exception was American Express,
which benefited from heavy charge card usage and a rising number of
consumer accounts. Money center banks such as Citigroup and Chase
Manhattan performed better than most financial services stocks,
primarily because they benefited from capital markets activity.
Q. WHAT INVESTMENTS DISAPPOINTED YOU?
R.E. Associates First Capital, a consumer finance company, was very
disappointing. The company's earnings slipped as it spent money
building Internet operations and as delinquencies increased in home
equity loans and manufactured housing loans. Rising interest rates
also hurt mortgage-related stocks such as Freddie Mac and Fannie Mae,
even though their businesses remained fundamentally strong. Almost all
bank stocks were poor performers during the period.
Q. TURNING TO YOU, JIM, HOW WOULD YOU DESCRIBE YOUR INVESTMENT STYLE?
J.C. I look for companies with solid strategies and strong managements
who are able to execute those strategies. I prefer attractive stock
valuations, but I don't just buy cheap stocks. While I am a bottom-up
manager who looks for stocks of good companies, I recognize that it
can be difficult to invest in a company where the macroeconomic trends
are moving against it.
Q. WHAT IS YOUR OUTLOOK, JIM?
J.C. It is a tough and uncertain time for the financial services
industry, with the Federal Reserve Board raising short-term interest
rates and yields of 30-year Treasury bonds trading lower than 10-year
bonds. At the same time, many financial services companies offer
attractive stock valuations. Given the difficult interest-rate
outlook, I am cautious, looking for the best companies with the most
attractive valuations. Recently, the companies that have performed
relatively well have tended to be more fee-based than interest-rate
sensitive. Regardless of what happens with interest rates, I will
invest in companies that can execute in a difficult environment and
which offer the most attractive return potential.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$333 million
MANAGER: James Catudal, since February 2000;
joined Fidelity in 1997
(checkmark)
ADVISOR FINANCIAL SERVICES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Citigroup, Inc. 6.2
American International Group, 5.7
Inc.
American Express Co. 4.5
Freddie Mac 4.4
Bank of America Corp. 3.8
Chase Manhattan Corp. 3.6
Morgan Stanley Dean Witter & 3.7
Co.
Fannie Mae 3.6
Wells Fargo & Co. 3.1
Berkshire Hathaway, Inc. 2.5
Class A
41.1
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Banks 26.9%
Insurance 21.8%
Credit & Other Finance 15.7%
Securities Industry 9.2%
Federal Sponsored Credit 8.4%
All Others* 18.0%
Row: 1, Col: 1, Value: 26.9
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 21.8
Row: 1, Col: 4, Value: 15.7
Row: 1, Col: 5, Value: 9.199999999999999
Row: 1, Col: 6, Value: 8.4
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 18.0
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR FINANCIAL SERVICES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 89.0%
SHARES VALUE (NOTE 1)
BANKS - 26.9%
Bank of America Corp. 261,004 $ 12,642,381
Bank of New York Co., Inc. 163,760 6,652,750
Bank One Corp. 202,382 6,033,513
Chase Manhattan Corp. 151,800 12,210,413
Comerica, Inc. 50,250 2,220,422
First Union Corp. 76,192 2,557,194
Firstar Corp. 204,550 4,883,631
FleetBoston Financial Corp. 152,676 4,799,752
M&T Bank Corp. 2,400 986,400
Marshall & Ilsley Corp. 47,000 2,408,750
Mellon Financial Corp. 125,000 4,289,063
Northern Trust Corp. 37,000 2,233,875
Peoples Heritage Financial 15,000 220,313
Group, Inc.
PNC Financial Corp. 32,700 1,569,600
State Street Corp. 20,000 1,603,750
SunTrust Banks, Inc. 28,400 1,691,575
Synovus Finanical Corp. 30,000 570,000
Toronto Dominion Bank 62,000 1,554,987
U.S. Bancorp 194,650 4,318,797
UnionBanCal Corp. 27,800 988,638
Wachovia Corp. 29,605 1,896,570
Wells Fargo & Co. 260,400 10,416,000
Westamerica Bancorp. 50,000 1,262,500
Zions Bancorp 29,200 1,726,450
89,737,324
COMPUTER SERVICES & SOFTWARE
- - 0.2%
Intuit, Inc. (a) 9,200 554,875
Sanchez Computer Associates, 5,000 169,063
Inc. (a)
723,938
CREDIT & OTHER FINANCE - 15.7%
American Express Co. 91,300 15,047,381
Associates First Capital 384,000 7,680,000
Corp. Class A
Citigroup, Inc. 360,993 20,734,527
Household International, Inc. 115,057 4,055,759
MBNA Corp. 63,250 1,597,063
Metris Companies, Inc. 15,000 549,375
Providian Financial Corp. 33,107 2,793,403
52,457,508
FEDERAL SPONSORED CREDIT - 8.4%
Fannie Mae 201,935 12,103,479
Freddie Mac 292,020 14,655,754
SLM Holding Corp. 32,000 1,246,000
28,005,233
HOLDING COMPANIES - 0.4%
PartnerRe Ltd. 46,600 1,351,400
SHARES VALUE (NOTE 1)
INSURANCE - 21.8%
ACE Ltd. 65,000 $ 1,149,688
AFLAC, Inc. 72,200 3,136,188
Allmerica Financial Corp. 12,400 579,700
Ambac Financial Group, Inc. 97,100 4,751,831
American General Corp. 45,500 2,795,406
American International Group, 183,750 19,132,969
Inc.
Arthur J. Gallagher & Co. 10,000 537,500
Berkshire Hathaway, Inc.:
Class A (a) 165 8,448,000
Class B (a) 24 39,504
Blanch E.W. Holdings, Inc. 18,000 870,750
CIGNA Corp. 7,500 538,125
Everest Reinsurance Holdings, 7,700 193,944
Inc.
Financial Security Assurance 5,000 275,938
Holdings Ltd.
Hartford Financial Services 47,700 1,818,563
Group, Inc.
Hartford Life, Inc. Class A 49,500 2,014,031
HCC Insurance Holdings, Inc. 23,400 311,513
Jefferson-Pilot Corp. 15,000 881,250
Loews Corp. 14,600 817,600
Marsh & McLennan Companies, 70,950 6,669,300
Inc.
MBIA, Inc. 81,700 4,090,106
Mutual Risk Management Ltd. 55,000 900,625
Nationwide Financial 21,300 529,838
Services, Inc. Class A
PMI Group, Inc. 30,750 1,268,438
Reliastar Financial Corp. 88,503 2,627,433
RenaissanceRe Holdings Ltd. 21,500 837,156
The Chubb Corp. 57,500 3,234,375
Torchmark Corp. 20,000 503,750
Travelers Property Casualty 17,500 634,375
Corp. Class A
UICI (a) 70,200 693,225
Xl Capital Ltd. 55,000 2,481,875
72,762,996
LODGING & GAMING - 0.4%
Starwood Hotels & Resorts 50,400 1,209,600
Worldwide, Inc. unit
REAL ESTATE INVESTMENT TRUSTS
- - 4.2%
AMB Property Corp. 30,900 631,519
AMRESCO Capital Trust, Inc. 25,000 229,688
Apartment Investment & 42,400 1,605,900
Management Co. Class A
Arden Realty Group, Inc. 15,000 316,875
BRE Properties, Inc. Class A 10,000 220,000
Cousins Properties, Inc. 14,500 519,281
Crescent Real Estate Equities 66,100 1,189,800
Co.
Duke-Weeks Realty Corp. 67,500 1,337,344
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
REAL ESTATE INVESTMENT TRUSTS
- - CONTINUED
Equity Office Properties Trust 63,900 $ 1,633,444
Equity Residential Properties 30,300 1,257,450
Trust (SBI)
First Industrial Realty 6,000 161,250
Trust, Inc.
Indymac Mortgage Holdings, 155,000 1,724,375
Inc.
Kimco Realty Corp. 9,100 320,775
ProLogis Trust 34,500 657,656
Public Storage, Inc. 32,500 737,344
Simon Property Group, Inc. 36,000 888,750
Spieker Properties, Inc. 12,500 485,938
13,917,389
SAVINGS & LOANS - 1.7%
Charter One Financial, Inc. 34,500 670,594
Commercial Federal Corp. 10,000 145,000
Golden West Financial Corp. 61,200 1,801,575
TCF Financial Corp. 48,200 1,105,588
Washington Mutual, Inc. 83,520 2,119,320
5,842,077
SECURITIES INDUSTRY - 9.2%
AXA Financial, Inc. 35,900 1,168,994
Charles Schwab Corp. 125,000 4,507,813
Federated Investors, Inc. 15,000 296,250
Class B
Franklin Resources, Inc. 30,000 1,070,625
Goldman Sachs Group, Inc. 7,500 687,188
Investors Group, Inc. 50,000 581,174
Lehman Brothers Holdings, 14,400 1,029,600
Inc.
Merrill Lynch & Co., Inc. 57,600 4,996,800
Morgan Stanley Dean Witter & 184,000 12,190,000
Co.
The Bear Stearns Companies, 23,625 974,531
Inc.
Waddell & Reed Financial, Inc.:
Class A 97,845 2,825,274
Class B 12,245 342,095
30,670,344
SERVICES - 0.1%
CheckFree Holdings Corp. (a) 5,000 295,000
TOTAL COMMON STOCKS 296,972,809
(Cost $287,395,772)
CASH EQUIVALENTS - 11.2%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 1,261,100 $ 1,261,100
5.56% (b)
Taxable Central Cash Fund, 36,108,428 36,108,428
5.45% (b)
TOTAL CASH EQUIVALENTS 37,369,528
(Cost $37,369,528)
TOTAL INVESTMENT PORTFOLIO - 334,342,337
100.2%
(Cost $324,765,300)
NET OTHER ASSETS - (0.2)% (775,640)
NET ASSETS - 100% $ 333,566,697
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $325,625,531. Net unrealized appreciation
aggregated $8,716,806, of which $42,945,406 related to appreciated
investment securities and $34,228,600 related to depreciated
investment securities.
At July 31, 1999, the fund had a capital loss carryforward of
approximately $4,198,000 all of which will expire on July 31, 2007.
ADVISOR FINANCIAL SERVICES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 334,342,337
value (cost $324,765,300) -
See accompanying schedule
Receivable for investments 18,138,835
sold
Receivable for fund shares 2,938,389
sold
Dividends receivable 280,229
Interest receivable 133,919
Redemption fees receivable 306
Other receivables 431
TOTAL ASSETS 355,834,446
LIABILITIES
Payable for investments $ 19,207,983
purchased
Payable for fund shares 1,352,934
redeemed
Accrued management fee 153,781
Distribution fees payable 185,046
Other payables and accrued 106,905
expenses
Collateral on securities 1,261,100
loaned, at value
TOTAL LIABILITIES 22,267,749
NET ASSETS $ 333,566,697
Net Assets consist of:
Paid in capital $ 334,802,072
Undistributed net investment 676,638
income
Accumulated undistributed net (11,489,206)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 9,577,193
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 333,566,697
CALCULATION OF MAXIMUM $16.18
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($32,012,749 (divided
by) 1,979,069 shares)
Maximum offering price per $17.17
share (100/94.25 of
$16.18)
CLASS T: NET ASSET VALUE $16.13
and redemption price per
share ($135,739,503 (divided
by) 8,415,416 shares)
Maximum offering price per $16.72
share (100/96.50 of
$16.13)
CLASS B: NET ASSET VALUE $15.94
and offering price per
share ($107,748,865 (divided
by) 6,760,207 shares) A
CLASS C: NET ASSET VALUE $15.95
and offering price per
share ($48,189,846 (divided
by) 3,021,741 shares) A
INSTITUTIONAL CLASS: NET $16.24
ASSET VALUE, offering price
and redemption price per
share ($9,875,734
(divided by) 607,983 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,529,074
Dividends
Interest 623,265
Security lending 2,386
TOTAL INCOME 3,154,725
EXPENSES
Management fee $ 872,992
Transfer agent fees 443,587
Distribution fees 1,035,745
Accounting and security 65,954
lending fees
Non-interested trustees' 419
compensation
Custodian fees and expenses 4,354
Registration fees 79,888
Audit 14,222
Legal 1,823
Miscellaneous 1,863
Total expenses before 2,520,847
reductions
Expense reductions (13,133) 2,507,714
NET INVESTMENT INCOME 647,011
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (6,313,431)
Foreign currency transactions (562) (6,313,993)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (18,952,166)
Assets and liabilities in 495 (18,951,671)
foreign currencies
NET GAIN (LOSS) (25,265,664)
NET INCREASE (DECREASE) IN $ (24,618,653)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ 647,011 $ 798,328
income
Net realized gain (loss) (6,313,993) (5,100,835)
Change in net unrealized (18,951,671) 3,565,570
appreciation (depreciation)
NET INCREASE (DECREASE) IN (24,618,653) (736,937)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (642,365) (365,767)
From net investment income
From net realized gain - (12,710,202)
TOTAL DISTRIBUTIONS (642,365) (13,075,969)
Share transactions - net 65,369,927 75,395,927
increase (decrease)
Redemption fees 77,887 103,555
TOTAL INCREASE (DECREASE) 40,186,796 61,686,576
IN NET ASSETS
NET ASSETS
Beginning of period 293,379,901 231,693,325
End of period (including $ 333,566,697 $ 293,379,901
undistributed net investment
income of $676,638 and
$673,045, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.49 $ 18.74 $ 15.11 $ 10.00
period
Income from Investment
Operations
Net investment income D .07 .12 .11 .06
Net realized and unrealized (1.29) (.31) 3.80 5.06
gain (loss)
Total from investment (1.22) (.19) 3.91 5.12
operations
Less Distributions
From net investment income (.09) (.06) (.06) (.01)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.09) (1.07) (.29) (.02)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.18 $ 17.49 $ 18.74 $ 15.11
TOTAL RETURN B, C (7.00)% .69% 26.32% 51.35%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 32,013 $ 27,440 $ 21,907 $ 6,275
(000 omitted)
Ratio of expenses to average 1.25% A 1.24% 1.32% 1.75% A, F
net assets
Ratio of expenses to average 1.24% A, G 1.23% G 1.30% G 1.73% A, G
net assets after expense
reductions
Ratio of net investment .84% A .73% .63% .55% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.42 $ 18.66 $ 15.07 $ 10.00
period
Income from Investment
Operations
Net investment income D .05 .09 .07 .04
Net realized and unrealized (1.29) (.30) 3.78 5.04
gain (loss)
Total from investment (1.24) (.21) 3.85 5.08
operations
Less Distributions
From net investment income (.05) (.03) (.04) (.01)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.05) (1.04) (.27) (.02)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.13 $ 17.42 $ 18.66 $ 15.07
TOTAL RETURN B, C (7.13)% 0.53% 25.96% 50.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 135,740 $ 123,361 $ 118,608 $ 52,003
(000 omitted)
Ratio of expenses to average 1.47% A 1.47% 1.52% 1.94% A
net assets
Ratio of expenses to average 1.46% A, F 1.46% F 1.50% F 1.91% A, F
net assets after expense
reductions
Ratio of net investment .62% A .50% .44% .37% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.21 $ 18.52 $ 15.04 $ 12.56
period
Income from Investment
Operations
Net investment income (loss) D .01 - (.02) (.02)
Net realized and unrealized (1.28) (.29) 3.76 2.50
gain (loss)
Total from investment (1.27) (.29) 3.74 2.48
operations
Less Distributions
From net investment income - (.02) (.04) -
From net realized gain - (1.01) (.23) -
Total distributions - (1.03) (.27) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 15.94 $ 17.21 $ 18.52 $ 15.04
TOTAL RETURN B, C (7.38)% 0.05% 25.29% 19.75%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 107,749 $ 94,072 $ 65,926 $ 7,737
(000 omitted)
Ratio of expenses to average 2.00% A 1.99% 2.06% 2.50% A, F
net assets
Ratio of expenses to average 1.99% A, G 1.98% G 2.04% G 2.49% A, G
net assets after expense
reductions
Ratio of net investment .10% A (.02)% (.14)% (.37)% A
income (loss) to average net
assets
Portfolio turnover 40% A 38% 54% 26% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 17.24 $ 18.56 $ 15.24
period
Income from Investment
Operations
Net investment income (loss) D .01 - (.03)
Net realized and unrealized (1.28) (.29) 3.57
gain (loss)
Total from investment (1.27) (.29) 3.54
operations
Less Distributions
From net investment income (.02) (.03) (.02)
From net realized gain - (1.01) (.21)
Total distributions (.02) (1.04) (.23)
Redemption fees added to paid .00 .01 .01
in capital
Net asset value, end of period $ 15.95 $ 17.24 $ 18.56
TOTAL RETURN B, C (7.37)% 0.07% 23.56%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 48,190 $ 36,552 $ 19,983
(000 omitted)
Ratio of expenses to average 1.95% A 1.95% 2.09% A
net assets
Ratio of expenses to average 1.95% A 1.94% F 2.07% A, F
net assets after expense
reductions
Ratio of net investment .14% A .02% (.22)% A
income (loss) to average net
assets
Portfolio turnover 40% A 38% 54% A
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 17.60 $ 18.80 $ 15.14 $ 10.00
period
Income from Investment
Operations
Net investment income D .10 .18 .14 .10
Net realized and unrealized (1.31) (.30) 3.79 5.06
gain (loss)
Total from investment (1.21) (.12) 3.93 5.16
operations
Less Distributions
From net investment income (.15) (.08) (.05) (.02)
From net realized gain - (1.01) (.23) (.01)
Total distributions (.15) (1.09) (.28) (.03)
Redemption fees added to paid .00 .01 .01 .01
in capital
Net asset value, end of period $ 16.24 $ 17.60 $ 18.80 $ 15.14
TOTAL RETURN B, C (6.92)% 1.12% 26.39% 51.78%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,876 $ 11,956 $ 5,270 $ 3,758
(000 omitted)
Ratio of expenses to average .91% A .93% 1.14% 1.50% A, F
net assets
Ratio of expenses to average .90% A, G .92% G 1.13% G 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.18% A 1.04% .81% .85% A
income to average net assets
Portfolio turnover 40% A 38% 54% 26% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, passive foreign
investment companies (PFIC), non-taxable dividends, capital loss
carryforwards, 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.
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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $109,511,171 and $57,280,498, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 35,218 $ 68
CLASS T 313,086 241
CLASS B 486,696 365,237
CLASS C 200,745 118,651
$ 1,035,745 $ 484,197
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 91,219 $ 59,142
CLASS T 118,082 54,635
CLASS B 167,530 167,530 *
CLASS C 14,788 14,788 *
$ 391,619 $ 296,095
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 44,659 .32 *
CLASS T 180,213 .29 *
CLASS B 152,144 .31 *
CLASS C 54,351 .27 *
INSTITUTIONAL CLASS 12,220 .22 *
$ 443,587
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting 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 $9,570 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $1,246,244. The fund received cash collateral of
$1,261,100 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $12,798 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's expenses
were reduced by $335 under this arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ 141,476 $ 69,817
Class T 357,280 174,881
Class B - 68,552
Class C 41,773 31,424
Institutional Class 101,836 21,093
Total $ 642,365 $ 365,767
FROM NET REALIZED GAIN
Class A $ - $ 1,212,772
Class T - 6,262,898
Class B - 3,836,369
Class C - 1,125,444
Institutional Class - 272,719
Total $ - $ 12,710,202
$ 642,365 $ 13,075,969
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 822,308 $ 13,843,578
824,679
Reinvestment of distributions 7,540 85,902 129,106
Shares redeemed (421,630) (508,971) (7,040,462)
Net increase (decrease) 410,589 399,239 $ 6,932,222
CLASS T Shares sold 3,299,170 3,240,994 $ 55,340,944
Reinvestment of distributions 19,179 443,632 327,772
Shares redeemed (1,982,957) (2,959,321) (32,806,969)
Net increase (decrease) 1,335,392 725,305 $ 22,861,747
CLASS B Shares sold 2,295,180 2,867,874 $ 37,879,344
Reinvestment of distributions - 235,734 -
Shares redeemed (1,000,629) (1,197,148) (16,345,970)
Net increase (decrease) 1,294,551 1,906,460 $ 21,533,374
CLASS C Shares sold 1,551,245 1,453,651 $ 25,702,171
Reinvestment of distributions 1,942 57,370 32,875
Shares redeemed (652,005) (467,142) (10,705,246)
Net increase (decrease) 901,182 1,043,879 $ 15,029,800
INSTITUTIONAL CLASS Shares 281,463 511,162 $ 4,734,086
sold
Reinvestment of distributions 2,415 18,075 41,473
Shares redeemed (355,303) (130,140) (5,762,775)
Net increase (decrease) (71,425) 399,097 $ (987,216)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 14,081,934
Reinvestment of distributions 1,165,695
Shares redeemed (8,477,160)
Net increase (decrease) $ 6,770,469
CLASS T Shares sold $ 54,768,982
Reinvestment of distributions 6,006,779
Shares redeemed (48,376,793)
Net increase (decrease) $ 12,398,968
CLASS B Shares sold $ 48,151,991
Reinvestment of distributions 3,165,887
Shares redeemed (19,603,788)
Net increase (decrease) $ 31,714,090
CLASS C Shares sold $ 24,778,214
Reinvestment of distributions 771,627
Shares redeemed (7,840,548)
Net increase (decrease) $ 17,709,293
INSTITUTIONAL CLASS Shares $ 8,733,321
sold
Reinvestment of distributions 245,820
Shares redeemed (2,176,034)
Net increase (decrease) $ 6,803,107
</TABLE>
ADVISOR HEALTH CARE FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - 8.07% 6.57% 120.72%
INST CL
S&P 500 5.59% 10.35% 124.60%
GS Health Care 6.46% 2.57% 119.63%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Health Care Index - a market
capitalization-weighted index of 96 stocks designed to measure the
performance of companies in the health care sector. Issues in the
index include providers of health care related services including
long-term care and hospital facilities, health care management
organizations and continuing care services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV HEALTH CARE - 6.57% 26.13%
INST CL
S&P 500 10.35% 26.77%
GS Health Care 2.57% 25.94%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Health Care -CL I S&P 500 GS Health Care
00271 SP001 GS005
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10670.00 10516.69 10812.87
1996/10/31 10430.00 10806.74 10714.59
1996/11/30 10960.00 11623.62 11456.00
1996/12/31 11030.00 11393.36 11211.23
1997/01/31 11710.00 12105.21 12140.37
1997/02/28 11850.00 12200.12 12322.91
1997/03/31 11210.00 11698.81 11479.40
1997/04/30 11770.00 12397.23 12192.08
1997/05/31 12680.00 13151.98 13124.59
1997/06/30 13620.00 13741.19 14149.23
1997/07/31 14120.00 14834.57 14590.78
1997/08/31 13250.00 14003.54 13768.10
1997/09/30 14087.43 14770.51 14522.88
1997/10/31 13965.02 14277.18 14348.05
1997/11/30 14240.45 14938.07 14887.11
1997/12/31 14467.59 15194.56 15322.92
1998/01/31 15333.72 15362.61 16033.22
1998/02/28 16167.77 16470.56 17070.43
1998/03/31 16798.66 17314.02 17844.91
1998/04/30 16991.13 17488.19 18314.30
1998/05/31 16841.43 17187.57 18020.01
1998/06/30 17761.03 17885.73 19053.99
1998/07/31 17889.34 17695.25 19066.04
1998/08/31 15729.36 15136.87 16554.54
1998/09/30 17524.28 16106.54 18419.75
1998/10/31 18040.67 17416.64 19244.11
1998/11/30 18974.57 18472.27 20271.43
1998/12/31 20282.02 19536.64 21491.50
1999/01/31 20710.52 20353.66 21413.35
1999/02/28 20512.75 19721.07 21147.66
1999/03/31 20897.30 20510.11 21793.82
1999/04/30 20139.19 21304.46 20778.64
1999/05/31 19941.43 20801.47 20429.00
1999/06/30 20919.27 21955.95 21294.51
1999/07/31 20424.85 21270.48 20629.59
1999/08/31 21007.17 21165.19 21030.23
1999/09/30 19139.00 20585.06 19154.33
1999/10/31 20476.37 21887.68 20553.14
1999/11/30 21027.05 22332.66 21159.98
1999/12/31 20701.14 23648.05 20622.65
2000/01/31 22072.23 22459.97 21962.65
IMATRL PRASUN SHR__CHT 20000131 20000216 151026 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$22,072 - a 120.72% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $22,460 - a 124.60%
increase. If $10,000 was invested in the Goldman Sachs Health Care
Index, it would have grown to $21,963 - a 119.63% increase.
ADVISOR HEALTH CARE FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Ramin Arani)
An interview with
Ramin Arani, Portfolio Manager of Fidelity
Advisor Health Care Fund
Q. HOW DID THE FUND PERFORM, RAMIN?
A. For the six months that ended January 31, 2000, the fund's
Institutional Class shares returned 8.07%, outpacing the 6.46% return
of the Goldman Sachs Health Care Index - an index of 96 stocks
designed to measure the performance of companies in the health care
sector. The Standard & Poor's 500 Index returned 5.59% during the same
period. For the 12 months that ended January 31, 2000, the fund's
Institutional Class shares returned 6.57%, while the Goldman Sachs
index returned 2.57% and the S&P 500 returned 10.35%.
Q. WHY DID THE FUND OUTPACE THE S&P 500 AND THE GOLDMAN SACHS INDEX
DURING THE SIX-MONTH PERIOD?
A. Most of the fund's outperformance relative to the S&P 500 came very
late in the period. In fact, the average return of health care stocks
in the month of January was 700 to 800 basis points higher than the
return of the S&P 500 for that month. The fund was heavily weighted in
biotechnology names, which generated stellar returns during the
period. Investors became enamored with their upside earnings surprises
and the strong data coming out of their clinical trials. And although
pharmaceutical stocks bottomed out in December, they bounced back a
bit in January. The fund outpaced the Goldman Sachs index because I
maintained an overweighted position in biotech stocks relative to that
benchmark throughout the period.
Q. YOU MENTIONED THE STRONG PERFORMANCE OF BIOTECHNOLOGY STOCKS.
SPECIFICALLY, WHY DID THEY DO SO WELL?
A. Throughout 1999, biotech companies reported very good data from
their clinical trials for new products and, by and large, these stocks
trade relative to the quality of their clinical data. Promising new
products caused their earnings growth rates to accelerate - and many
times, to exceed analysts' expectations. In turn, investors flocked to
biotech stocks in droves, especially as the pharmaceutical sector
struggled.
Q. WHY DID PHARMACEUTICAL STOCKS UNDERPERFORM?
A. The earnings growth rate for the pharmaceutical industry had been
incredibly robust over the past couple of years, mostly due to U.S.
Food and Drug Administration reform that resulted in a significant
amount of new product approvals. Over the past year, however,
investors began to realize that this pace of product approvals was
unsustainable and that the earnings growth rate for pharmaceutical
companies was likely peaking in 1999. At that point, drug stocks
started losing their luster. On top of that, the stocks suffered from
political concerns, including fears about the passage of a universal
Medicare drug benefit and the possibility that it could lead to price
controls.
Q. WHICH INDIVIDUAL STOCKS HELPED PERFORMANCE? WHY?
A. The fund had a large position in Warner-Lambert, which helped
performance because the company was the target of a takeover battle
between American Home Products and Pfizer. Pfizer ultimately signed a
contract to acquire Warner-Lambert, but the ensuing battle drove the
stock price to record highs. The biggest winner on the biotech side
was Amgen. The company reported strong sales growth in its core
products, while also reporting good data from its clinical trials and
the promise to launch several new drugs over the next few years.
Stocks such as Affymetrix, a developer of genetic technology, and
Millennium Pharmaceuticals also boosted performance as those companies
generated strong earnings growth during the period.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
A. Some of the fund's large pharmaceutical holdings, such as Eli Lilly
and Schering-Plough, hurt returns. These stocks were dragged down by
the aforementioned issues that pressured the pharmaceutical group as a
whole, but company-specific concerns also played a part in their
underperformance. In addition, the fund held a few large positions in
health care service stocks, such as United HealthCare and Cardinal
Health, that fell under extreme pressures due to concerns about the
sustainability of their earnings growth rate.
Q. WHAT'S YOUR OUTLOOK?
A. Health care stocks are driven by relative earnings growth. Given
that the outlook for earnings growth in health care stocks is pretty
stable, the growth rate of the S&P 500 must decelerate for health care
issues to really outperform. I don't think I can predict the future of
the S&P 500's growth rate, but at some point I believe that a 20%
growth rate for that index is unsustainable. Therefore, I believe
health care stocks could generate strong returns when growth of the
broader market slows.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$813 million
MANAGER: Ramin Arani, since August 1999;
joined Fidelity in 1992
(checkmark)
ADVISOR HEALTH CARE FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Warner-Lambert Co. 10.7
Bristol-Myers Squibb Co. 8.2
Eli Lilly & Co. 6.2
Merck & Co., Inc. 6.0
Johnson & Johnson 4.9
American Home Products Corp. 4.8
Amgen, Inc. 4.8
Medtronic, Inc. 4.7
Schering-Plough Corp. 4.7
Pfizer, Inc. 2.6
57.6
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Drugs & Pharmaceuticals 62.8%
Medical Equipment & Supplies 19.7%
Medical Facilities Management 4.6%
Computer Services & Software 1.5%
Insurance 1.2%
All Others * 10.2%
Row: 1, Col: 1, Value: 62.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 19.7
Row: 1, Col: 4, Value: 4.6
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 1.2
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 10.2
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR HEALTH CARE FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 91.6%
SHARES VALUE (NOTE 1)
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 200 $ 5,800
COMPUTER SERVICES & SOFTWARE
- - 1.5%
Affymetrix, Inc. (a) 19,700 4,560,550
Healtheon/Web Maryland Corp. 42,700 2,775,500
IMS Health, Inc. 196,700 4,413,456
11,749,506
DRUG STORES - 0.3%
CVS Corp. 73,000 2,550,438
DRUGS & PHARMACEUTICALS - 62.8%
Allergan, Inc. 149,200 8,504,400
ALZA Corp. Class A. (a) 49,400 1,762,963
American Home Products Corp. 834,300 39,264,244
Amgen, Inc. (a) 610,600 38,887,588
Andrx Corp. (a) 32,600 2,290,150
Bausch & Lomb, Inc. 77,400 4,798,800
Biochem Pharma, Inc. (a) 2,400 68,080
Biogen, Inc. (a) 144,700 12,480,375
Biovail Corp. International 47,800 2,381,153
(a)
Bristol-Myers Squibb Co. 1,013,100 66,864,600
Cephalon, Inc. (a) 110,319 3,916,325
Chiron Corp. (a) 163,400 7,250,875
Eli Lilly & Co. 748,700 50,069,313
Enzon, Inc. (a) 30,500 1,542,156
Forest Laboratories, Inc. (a) 111,400 7,519,500
Genentech, Inc. 2,800 393,400
Genzyme Corp. - General 54,700 2,844,400
Division
Gilead Sciences, Inc. (a) 41,300 1,933,356
Human Genome Sciences, Inc. 34,200 3,351,600
(a)
IDEC Pharmaceuticals Corp. (a) 57,438 7,247,958
Immunex Corp. (a) 149,700 19,573,275
Medicis Pharmaceutical Corp. 35,100 1,465,425
Class A (a)
Medimmune, Inc. (a) 49,700 7,256,200
Merck & Co., Inc. 620,600 48,911,038
Millennium Pharmaceuticals, 32,900 6,166,694
Inc. (a)
Pfizer, Inc. 575,000 20,915,625
Pharmacia & Upjohn, Inc. 181,600 8,535,200
QLT PhotoTherapeutics, Inc. 12,800 867,887
(a)
Schering-Plough Corp. 860,400 37,857,600
Sepracor, Inc. (a) 48,400 6,776,000
Warner-Lambert Co. 915,500 86,915,276
Watson Pharmaceuticals, Inc. 52,300 2,108,344
(a)
510,719,800
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 300 4,200
SHARES VALUE (NOTE 1)
ELECTRONIC INSTRUMENTS - 1.2%
Beckman Coulter, Inc. 15,300 $ 800,381
PE Corp. - Biosystems Group 39,200 5,870,200
Sequenom, Inc. 500 13,000
Waters Corp. (a) 40,700 3,006,713
9,690,294
ELECTRONICS - 0.0%
Quantum Effect Devices, Inc. 200 3,200
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Mettler-Toledo International, 29,000 924,375
Inc. (a)
INSURANCE - 1.2%
CIGNA Corp. 136,700 9,808,225
MEDICAL EQUIPMENT & SUPPLIES
- - 19.7%
Abbott Laboratories 606,000 19,770,750
Allscripts, Inc. 500 23,813
AmeriSource Health Corp. 34,400 623,500
Class A (a)
Baxter International, Inc. 260,600 16,645,825
Becton, Dickinson & Co. 186,000 4,870,875
Biomet, Inc. 153,400 6,107,238
C. R. Bard, Inc. 100 4,475
Cardinal Health, Inc. 238,206 11,389,224
Guidant Corp. (a) 292,500 15,392,813
Johnson & Johnson 459,421 39,538,920
Mallinckrodt, Inc. 700 20,169
Medtronic, Inc. 840,128 38,435,856
Patterson Dental Co. (a) 20,400 888,675
Resmed, Inc. (a) 18,400 790,050
Stryker Corp. 36,000 2,268,000
Sybron International, Inc. (a) 126,500 2,917,406
VISX, Inc. (a) 23,400 663,975
160,351,564
MEDICAL FACILITIES MANAGEMENT
- - 4.6%
Columbia/HCA Healthcare Corp. 468,800 12,804,100
Express Scripts, Inc. Class A 105,400 5,447,863
(a)
Lincare Holdings, Inc. (a) 76,100 2,696,794
Oxford Health Plans, Inc. (a) 74,700 1,059,806
Trigon Healthcare, Inc. (a) 60,800 1,850,600
United HealthCare Corp. 161,500 8,559,500
Wellpoint Health Networks, 70,900 4,821,200
Inc. (a)
37,239,863
SERVICES - 0.2%
Caremark Rx, Inc. (a) 383,200 1,628,600
TOTAL COMMON STOCKS 744,675,865
(Cost $629,383,675)
CASH EQUIVALENTS - 9.8%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 4,241,550 $ 4,241,550
5.56% (b)
Taxable Central Cash Fund, 69,499,972 69,499,972
5.45% (b)
MATURITY AMOUNT
Investments in repurchase $ 5,963,947 5,963,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.72%,
dated 1/31/00 due 2/1/00
TOTAL CASH EQUIVALENTS 79,704,522
(Cost $79,704,522)
</TABLE>
TOTAL INVESTMENT PORTFOLIO - 824,380,387
101.4%
(Cost $709,088,197)
NET OTHER ASSETS - (1.4)% (11,363,006)
NET ASSETS - 100% $ 813,017,381
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $711,828,413. Net unrealized appreciation
aggregated $112,551,974, of which $143,142,802 related to appreciated
investment securities and $30,590,828 related to depreciated
investment securities.
ADVISOR HEALTH CARE FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 824,380,387
value (including repurchase
agreements of $5,963,000)
(cost $709,088,197) - See
accompanying schedule
Cash 931
Receivable for investments 9,319,915
sold
Receivable for fund shares 4,826,002
sold
Dividends receivable 386,731
Interest receivable 293,830
Redemption fees receivable 99
Other receivables 890
TOTAL ASSETS 839,208,785
LIABILITIES
Payable for investments $ 18,794,164
purchased
Payable for fund shares 2,128,653
redeemed
Accrued management fee 368,786
Distribution fees payable 458,171
Other payables and accrued 200,080
expenses
Collateral on securities 4,241,550
loaned, at value
TOTAL LIABILITIES 26,191,404
NET ASSETS $ 813,017,381
Net Assets consist of:
Paid in capital $ 704,865,430
Accumulated net investment (1,699,686)
loss
Accumulated undistributed net (5,439,964)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 115,291,601
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 813,017,381
CALCULATION OF MAXIMUM $19.56
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($82,137,252 (divided
by) 4,198,884 shares)
Maximum offering price per $20.75
share (100/94.25 of
$19.56)
CLASS T: NET ASSET VALUE $19.45
and redemption price per
share ($277,066,190 (divided
by) 14,243,273 shares)
Maximum offering price per $20.16
share (100/96.50 of
$19.45)
CLASS B: NET ASSET VALUE $19.18
and offering price per
share ($282,825,384 (divided
by) 14,747,872 shares) A
CLASS C: NET ASSET VALUE $19.17
and offering price per
share ($139,697,803 (divided
by) 7,286,757 shares) A
INSTITUTIONAL CLASS: NET $19.64
ASSET VALUE, offering price
and redemption price per
share ($31,290,752
(divided by) 1,593,294
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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,820,649
Dividends
Interest 1,410,302
Security lending 9,502
TOTAL INCOME 4,240,453
EXPENSES
Management fee $ 2,092,326
Transfer agent fees 1,007,464
Distribution fees 2,558,609
Accounting and security 136,817
lending fees
Non-interested trustees' 996
compensation
Custodian fees and expenses 8,580
Registration fees 108,207
Audit 14,461
Legal 4,193
Miscellaneous 3,971
Total expenses before 5,935,624
reductions
Expense reductions (51,471) 5,884,153
NET INVESTMENT INCOME (LOSS) (1,643,700)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (4,567,037)
Foreign currency transactions 13,431 (4,553,606)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 61,288,802
Assets and liabilities in (690) 61,288,112
foreign currencies
NET GAIN (LOSS) 56,734,506
NET INCREASE (DECREASE) IN $ 55,090,806
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (1,643,700) $ (1,677,006)
income (loss)
Net realized gain (loss) (4,553,606) 16,392,585
Change in net unrealized 61,288,112 24,414,060
appreciation (depreciation)
NET INCREASE (DECREASE) IN 55,090,806 39,129,639
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (55,986) -
In excess of net investment
income
From net realized gain (13,943,096) (5,527,534)
TOTAL DISTRIBUTIONS (13,999,082) (5,527,534)
Share transactions - net 88,806,967 416,927,170
increase (decrease)
Redemption fees 181,704 201,576
TOTAL INCREASE (DECREASE) 130,080,395 450,730,851
IN NET ASSETS
NET ASSETS
Beginning of period 682,936,986 232,206,135
End of period (including $ 813,017,381 $ 682,936,986
accumulated net investment
loss of $1,699,686 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.52 $ 16.70 $ 14.10 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .00 .00 (.03) (.02)
Net realized and unrealized 1.45 2.20 3.50 4.12
gain (loss)
Total from investment 1.45 2.20 3.47 4.10
operations
Less Distributions
From net realized gain (.41) (.39) (.88) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.56 $ 18.52 $ 16.70 $ 14.10
TOTAL RETURN B, C 7.87% 13.80% 26.47% 41.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 82,137 $ 66,142 $ 20,902 $ 5,488
(000 omitted)
Ratio of expenses to average 1.20% A 1.23% 1.38% 1.75% A, F
net assets
Ratio of expenses to average 1.19% A, G 1.21% G 1.36% G 1.74% A, G
net assets after expense
reductions
Ratio of net investment (.02)% A .01% (.18)% (.18)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.40 $ 16.61 $ 14.05 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) (.04) (.05) (.04)
Net realized and unrealized 1.44 2.19 3.47 4.09
gain (loss)
Total from investment 1.42 2.15 3.42 4.05
operations
Less Distributions
From net realized gain (.37) (.37) (.87) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.45 $ 18.40 $ 16.61 $ 14.05
TOTAL RETURN B, C 7.76% 13.54% 26.17% 40.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 277,066 $ 248,442 $ 124,652 $ 50,868
(000 omitted)
Ratio of expenses to average 1.42% A 1.46% 1.54% 1.97% A
net assets
Ratio of expenses to average 1.41% A, F 1.43% F 1.52% F 1.96% A, F
net assets after expense
reductions
Ratio of net investment (.24)% A (.21)% (.31)% (.39)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.16 $ 16.47 $ 14.01 $ 11.88
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.13) (.14) (.05)
Net realized and unrealized 1.43 2.17 3.45 2.18
gain (loss)
Total from investment 1.36 2.04 3.31 2.13
operations
Less Distributions
From net realized gain (.34) (.36) (.86) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.18 $ 18.16 $ 16.47 $ 14.01
TOTAL RETURN B, C 7.52% 12.96% 25.40% 17.93%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 282,825 $ 225,441 $ 57,074 $ 6,159
(000 omitted)
Ratio of expenses to average 1.94% A 1.98% 2.13% 2.50% A, F
net assets
Ratio of expenses to average 1.93% A, G 1.96% G 2.12% G 2.49% A, G
net assets after expense
reductions
Ratio of net investment (.76)% A (.73)% (.95)% (.99)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85% 67% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 18.17 $ 16.49 $ 13.85
period
Income from Investment
Operations
Net investment income (loss) D (.06) (.12) (.12)
Net realized and unrealized 1.42 2.17 3.39
gain (loss)
Total from investment 1.36 2.05 3.27
operations
Less Distributions
From net realized gain (.36) (.38) (.63)
Redemption fees added to paid .00 .01 -
in capital
Net asset value, end of period $ 19.17 $ 18.17 $ 16.49
TOTAL RETURN B, C 7.52% 13.04% 24.84%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 139,698 $ 109,372 $ 19,154
(000 omitted)
Ratio of expenses to average 1.90% A 1.95% 2.18% A
net assets
Ratio of expenses to average 1.89% A, F 1.92% F 2.17% A, F
net assets after expense
reductions
Ratio of net investment (.72)% A (.70)% (1.06)% A
income (loss) to average net
assets
Portfolio turnover 55% A 98% 85%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 18.59 $ 16.73 $ 14.12 $ 10.00
period
Income from Investment
Operations
Net investment income D .02 .05 .03 .01
Net realized and unrealized 1.47 2.21 3.47 4.11
gain (loss)
Total from investment 1.49 2.26 3.50 4.12
operations
Less Distributions
In excess of net investment (.03) - - -
income
From net realized gain (.41) (.41) (.90) -
Total distributions (.44) (.41) (.90) -
Redemption fees added to paid .00 .01 .01 -
in capital
Net asset value, end of period $ 19.64 $ 18.59 $ 16.73 $ 14.12
TOTAL RETURN B, C 8.07% 14.17% 26.70% 41.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 31,291 $ 33,540 $ 10,424 $ 6,875
(000 omitted)
Ratio of expenses to average .94% A .97% 1.07% 1.50% A, F
net assets
Ratio of expenses to average .93% A, G .95% G 1.04% G 1.49% A, G
net assets after expense
reductions
Ratio of net investment .24% A .28% .17% .08% A
income to average net assets
Portfolio turnover 55% A 98% 85% 67% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, non-taxable dividends,
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 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $242,690,912 and $186,794,750, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 88,302 $ 114
CLASS T 629,939 767
CLASS B 1,237,757 929,250
CLASS C 602,611 476,396
$ 2,558,609 $ 1,406,527
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions
4. FEES AND OTHER TRANSACTIONS WITH
AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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. In addition,
purchases of Class A and Class T shares that were subject to a
finder's fee bear a contingent deferred sales charge on assets that do
not remain in the fund for at least one year. The Class A and Class T
contingent deferred sales charge is based on 0.25% 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. A portion of the sales charges paid to FDC is paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 219,063 $ 125,045
CLASS T 253,893 106,262
CLASS B 419,586 419,586*
CLASS C 73,882 73,882*
$ 966,424 $ 724,775
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 105,582 .30 *
CLASS T 340,167 .27 *
CLASS B 361,170 .29 *
CLASS C 153,089 .25 *
INSTITUTIONAL CLASS 47,456 .29 *
$ 1,007,464
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting 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 $12,763 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $4,307,017. The fund received cash collateral of
$4,241,550 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $51,039 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's expenses
were reduced by $432 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 10% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED
2000 JULY 31,
1999
IN EXCESS OF NET INVESTMENT
INCOME
Institutional Class $ 55,986 $ -
FROM NET REALIZED GAIN
Class A $ 1,513,615 $ 506,267
Class T 5,017,608 2,852,284
Class B 4,390,777 1,389,695
Class C 2,255,381 512,786
Institutional Class 765,715 266,502
Total $ 13,943,096 $ 5,527,534
$ 13,999,082 $ 5,527,534
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 2,923,295 $ 27,415,812
1,484,764
Reinvestment of distributions 71,806 30,315 1,377,280
Shares redeemed (929,987) (633,263) (17,101,921)
Net increase (decrease) 626,583 2,320,347 $ 11,691,171
CLASS T Shares sold 4,338,922 9,152,907 $ 79,651,020
Reinvestment of distributions 246,623 182,634 4,708,021
Shares redeemed (3,846,204) (3,336,370) (69,522,562)
Net increase (decrease) 739,341 5,999,171 $ 14,836,479
CLASS B Shares sold 4,334,762 10,129,553 $ 78,586,019
Reinvestment of distributions 198,005 81,573 3,734,386
Shares redeemed (2,199,143) (1,262,369) (39,387,081)
Net increase (decrease) 2,333,624 8,948,757 $ 42,933,324
CLASS C Shares sold 2,438,432 5,638,208 $ 44,143,328
Reinvestment of distributions 83,902 26,607 1,581,557
Shares redeemed (1,253,796) (807,853) (22,515,319)
Net increase (decrease) 1,268,538 4,856,962 $ 23,209,566
INSTITUTIONAL CLASS Shares 605,402 1,586,418 $ 11,145,305
sold
Reinvestment of distributions 30,625 16,379 588,917
Shares redeemed (846,771) (421,646) (15,597,795)
Net increase (decrease) (210,744) 1,181,151 $ (3,863,573)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 52,957,834
Reinvestment of distributions 451,389
Shares redeemed (11,335,392)
Net increase (decrease) $ 42,073,831
CLASS T Shares sold $ 163,138,613
Reinvestment of distributions 2,706,621
Shares redeemed (58,873,247)
Net increase (decrease) $ 106,971,987
CLASS B Shares sold $ 180,199,139
Reinvestment of distributions 1,199,114
Shares redeemed (22,344,687)
Net increase (decrease) $ 159,053,566
CLASS C Shares sold $ 101,276,858
Reinvestment of distributions 391,120
Shares redeemed (14,456,971)
Net increase (decrease) $ 87,211,007
INSTITUTIONAL CLASS Shares $ 28,856,815
sold
Reinvestment of distributions 244,208
Shares redeemed (7,484,244)
Net increase (decrease) $ 21,616,779
</TABLE>
ADVISOR NATURAL RESOURCES FUND - INSTITUTIONAL CLASS
PERFORMANCE
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
shares' 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - INST CL -1.88% 39.24% 87.19% 224.43%
S&P 500 5.59% 10.35% 225.05% 442.52%
GS Natural Resources -3.94% 31.01% n/a n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, one
year, five years or 10 years. You can compare Institutional Class'
returns to the performance of both the Standard & Poor's 500 Index - a
market capitalization-weighted index of common stocks - and the
Goldman Sachs Natural Resources Index - a market
capitalization-weighted index of 105 stocks designed to measure the
performance of companies in the natural resource sector. Issues in the
index include extractive industries including gold and precious metals
mining along with other mineral mining, energy companies providing oil
and gas services, and owners and operators of timber tracts and
forestry services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1996
FIDELITY ADV NATURAL - INST CL 39.24% 13.36% 12.49%
S&P 500 10.35% 26.59% 18.42%
GS Natural Resources 31.01% n/a n/a
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.
(checkmark)
$10,000 OVER 10 YEARS
FA Natural Resources-CL I S&P 500
00686 SP001
1990/01/31 10000.00 10000.00
1990/02/28 10467.98 10129.00
1990/03/31 10665.02 10397.42
1990/04/30 10106.73 10137.48
1990/05/31 11133.00 11125.89
1990/06/30 10993.43 11050.23
1990/07/31 11535.30 11014.87
1990/08/31 11231.53 10019.13
1990/09/30 10878.49 9531.20
1990/10/31 10098.52 9490.21
1990/11/30 10262.73 10103.28
1990/12/31 10109.47 10385.16
1991/01/31 10443.04 10837.95
1991/02/28 11948.34 11612.87
1991/03/31 11666.09 11893.90
1991/04/30 11725.96 11922.44
1991/05/31 12290.45 12437.49
1991/06/30 11580.56 11867.86
1991/07/31 11965.44 12420.90
1991/08/31 12273.35 12715.27
1991/09/30 11794.39 12502.93
1991/10/31 12068.08 12670.47
1991/11/30 11093.05 12159.85
1991/12/31 11572.19 13550.93
1992/01/31 12290.85 13298.89
1992/02/29 12567.25 13471.77
1992/03/31 12253.99 13209.07
1992/04/30 12705.46 13597.42
1992/05/31 13046.36 13664.05
1992/06/30 12622.53 13460.45
1992/07/31 13129.28 14010.98
1992/08/31 12935.79 13723.76
1992/09/30 13064.78 13885.70
1992/10/31 12788.38 13934.30
1992/11/30 12954.22 14409.46
1992/12/31 13115.32 14586.70
1993/01/31 13535.75 14709.22
1993/02/28 13915.16 14909.27
1993/03/31 14838.05 15223.86
1993/04/30 15637.89 14855.44
1993/05/31 16406.97 15253.56
1993/06/30 16632.57 15297.80
1993/07/31 16406.97 15236.61
1993/08/31 17350.37 15814.08
1993/09/30 17258.08 15692.31
1993/10/31 18037.41 16017.14
1993/11/30 17360.63 15864.97
1993/12/31 18091.14 16056.94
1994/01/31 19191.13 16602.88
1994/02/28 18593.07 16152.94
1994/03/31 17450.36 15448.67
1994/04/30 17738.71 15646.41
1994/05/31 17973.66 15903.02
1994/06/30 17653.27 15513.39
1994/07/31 18251.33 16022.23
1994/08/31 19137.73 16679.14
1994/09/30 19041.61 16270.50
1994/10/31 18753.27 16636.59
1994/11/30 17525.12 16030.68
1994/12/31 17678.79 16268.42
1995/01/31 17331.50 16690.26
1995/02/28 17841.57 17340.68
1995/03/31 18840.01 17852.40
1995/04/30 19610.54 18378.16
1995/05/31 19881.85 19112.73
1995/06/30 20446.18 19556.72
1995/07/31 21314.39 20205.22
1995/08/31 21650.81 20255.94
1995/09/30 21813.60 21110.74
1995/10/31 20912.84 21035.37
1995/11/30 21976.39 21958.82
1995/12/31 22780.63 22381.75
1996/01/31 23645.14 23143.63
1996/02/29 24228.97 23358.17
1996/03/31 24969.99 23583.11
1996/04/30 26429.57 23930.72
1996/05/31 26912.35 24547.89
1996/06/30 26743.94 24641.42
1996/07/31 25284.36 23552.76
1996/08/31 26429.57 24049.49
1996/09/30 27574.77 25403.00
1996/10/31 28259.65 26103.61
1996/11/30 29708.00 28076.78
1996/12/31 29779.82 27520.58
1997/01/31 30258.79 29240.07
1997/02/28 28283.05 29469.31
1997/03/31 27552.62 28258.42
1997/04/30 27444.85 29945.44
1997/05/31 29947.46 31768.52
1997/06/30 29863.64 33191.75
1997/07/31 31635.82 35832.82
1997/08/31 31839.38 33825.47
1997/09/30 34143.87 35678.09
1997/10/31 32061.60 34486.44
1997/11/30 29378.68 36082.82
1997/12/31 29648.88 36702.36
1998/01/31 28855.98 37108.29
1998/02/28 29889.58 39784.53
1998/03/31 31206.37 41821.90
1998/04/30 32409.88 42242.63
1998/05/31 30753.28 41516.48
1998/06/30 29478.97 43202.88
1998/07/31 27114.43 42742.77
1998/08/31 21776.49 36563.02
1998/09/30 26120.37 38905.24
1998/10/31 26268.78 42069.80
1998/11/30 25244.74 44619.65
1998/12/31 24947.92 47190.63
1999/01/31 23300.56 49164.14
1999/02/28 22632.71 47636.12
1999/03/31 27307.66 49542.04
1999/04/30 32027.13 51460.81
1999/05/31 30884.37 50245.82
1999/06/30 32620.78 53034.46
1999/07/31 33066.01 51378.72
1999/08/31 34372.03 51124.40
1999/09/30 33006.65 49723.08
1999/10/31 31715.47 52869.56
1999/11/30 31952.93 53944.39
1999/12/31 33697.17 57121.72
2000/01/31 32443.04 54251.92
IMATRL PRASUN SHR__CHT 20000131 20000216 151406 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, 1990. As the chart shows, by January 31, 2000, the
value of the investment would have grown to $32,443 - a 224.43%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $54,252 - a 442.52% increase. (The Goldman Sachs
Natural Resources Index does not extend as far back as the fund's
start date, and therefore cannot be used for this comparison.)
ADVISOR NATURAL RESOURCES FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Scott Offen)
An interview with Scott Offen, Portfolio Manager of Fidelity Advisor
Natural Resources Fund
Q. SCOTT, HOW DID THE FUND PERFORM?
A. For the six months that ended January 31, 2000, the fund's
Institutional Class shares returned -1.88%. To compare, the Goldman
Sachs Natural Resources Index - an index of 105 stocks designed to
measure the performance of companies in the natural resources sector -
returned -3.94%, and the Standard & Poors 500 Index returned 5.59%.
For the 12 months that ended January 31, 2000, the fund's
Institutional Class shares returned 39.24%, respectively, while the
Goldman Sachs index returned 31.01% and the S&P 500 had a return of
10.35%.
Q. WHY DID NATURAL RESOURCES STOCKS STUMBLE OVER THE PAST SIX MONTHS?
A. The market felt that historically high oil prices were not
sustainable, despite positive fundamentals in the energy industry,
which makes up a large proportion of the natural resources sector. In
addition, like virtually every other non-technology sector in the
market, natural resources stocks couldn't offer investors the unit
growth that many technology companies enjoyed.
Q. WHAT MOVES HAVE YOU MADE WITH THE FUND SINCE TAKING OVER AT THE
BEGINNING OF SEPTEMBER?
A. I trimmed the number of stocks in the fund to focus on what I felt
were the best ideas. In addition, with oil prices at very high levels,
I organized the portfolio to benefit from a downward trend in prices
going forward. At the same time, I turned my attention to stocks that
typically do well when the price of oil is high but trending downward,
namely dollar-wise refiners and integrated oil companies. A greater
proportion of their earnings comes from refining and marketing. As the
price of oil falls, these companies typically see their earnings rise.
I also slightly overweighted the fund relative to the index in
exploration and production stocks because they were cheap; it looked
as if investors were underestimating the sustainable price of oil. The
fund also carried a larger weighting in energy services stocks than
the index because I felt that while oil prices may fall, they should
stay high enough to stimulate increased supply.
Q. WHAT INVESTMENTS DID YOU PURSUE OUTSIDE THE ENERGY SPHERE?
A. I looked to cut back the fund's investments in gold stocks, because
it was uncertain whether or not central banks around the world would
continue to sell some of their reserves. I also reduced the fund's
investments in non-ferrous metals just at their peak, and increased
the percentage of the fund dedicated to steel investments, though
stocks in that industry moved upward but then fell back. I'd also
mention that Goldman Sachs added paper and forest products stocks to
its Natural Resources Index in January 2000. At the end of the period,
those companies were unappealing to me because it appeared they had
peaked after a rally in 1999.
Q. WHAT STOCKS PERFORMED WELL? WHICH DISAPPOINTED?
A. Alcoa was the best performer for the fund, as low inventories and
strong demand caused aluminum prices to rise. Exxon Mobil also did
well, due to the cost-cutting benefits brought on by the merger of the
two companies. The performance of the fund's two biggest oil service
companies diverged. While Schlumberger performed well, Halliburton
suffered from missing its earnings estimates. Texaco struggled for the
same reason, and USX-Marathon turned off investors because of
questions related to its corporate structure.
Q. WHAT IS YOUR OUTLOOK?
A. At the end of the period, energy stocks were cheap. Prices
reflected an expectation that oil would fall from where it stood at
around $30 per barrel to possibly as low as $16. My feeling is that
the long-term price will be higher than that. Overall, the
fundamentals for the natural resources sector remain positive. The big
question is whether or not that will help stock prices. Recently, the
market has been driven by a preference for rapid-growth stocks, mainly
in the technology sector. People once invested in natural resources
stocks because they offered potentially high rewards for taking on
some additional risk. That role has been assumed by Internet stocks.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: December 29, 1987
SIZE: as of January 31, 2000, more than
$313 million
MANAGER: Scott Offen, since September 1999;
joined Fidelity in 1985
(checkmark)
ADVISOR NATURAL RESOURCES FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Exxon Mobil Corp. 7.8
Royal Dutch Petroleum Co. (NY 6.2
Shares)
Chevron Corp. 5.4
Schlumberger Ltd. 4.3
Alcoa, Inc. 3.8
Halliburton Co. 3.6
Atlantic Richfield Co. 3.3
Amerada Hess Corp. 3.0
Texaco, Inc. 2.4
USX - Marathon Group 2.4
42.2
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Oil & Gas 54.0%
Energy Services 21.8%
Metals & Mining 7.1%
Precious Metals 3.6%
Gas 2.4%
All Others* 11.1%
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 21.8
Row: 1, Col: 4, Value: 7.1
Row: 1, Col: 5, Value: 3.6
Row: 1, Col: 6, Value: 2.4
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 11.1
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR NATURAL RESOURCES FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 92.0%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES -
0.2%
Barrett Resources Corp. (a) 21,400 $ 632,638
COMMUNICATIONS EQUIPMENT - 0.0%
Turnstone Systems, Inc. 100 2,900
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 100 1,400
ELECTRIC UTILITY - 0.5%
Calpine Corp. (a) 23,200 1,696,500
ELECTRONIC INSTRUMENTS - 0.0%
Sequenom, Inc. 100 2,600
ELECTRONICS - 0.0%
Quantum Effect Devices, Inc. 100 1,600
ENERGY SERVICES - 21.8%
Baker Hughes, Inc. 220,150 5,421,194
BJ Services Co. (a) 45,400 1,946,525
Diamond Offshore Drilling, 24,700 683,881
Inc.
ENSCO International, Inc. 207,100 4,737,413
Global Marine, Inc. (a) 96,600 1,720,688
Halliburton Co. 308,900 11,120,400
Hanover Compressor Co. (a) 27,800 1,101,575
Helmerich & Payne, Inc. 38,300 900,050
Marine Drilling Companies, 97,750 1,881,688
Inc. (a)
McDermott International, Inc. 500 4,938
Nabors Industries, Inc. (a) 146,800 4,348,950
Noble Drilling Corp. (a) 202,300 5,929,919
R&B Falcon Corp. 15,000 190,313
Rowan Companies, Inc. (a) 40,000 907,500
Santa Fe International Corp. 15,700 419,975
Schlumberger Ltd. 221,200 13,507,025
Smith International, Inc. (a) 115,100 5,906,069
Superior Energy Services, 100,400 709,075
Inc. (a)
Tidewater, Inc. 32,000 910,000
Transocean Sedco Forex, Inc. 70,578 2,245,263
UTI Energy Corp. (a) 1 28
Weatherford International, 93,600 3,515,850
Inc. (a)
68,108,319
GAS - 2.4%
Dynegy, Inc. 112,100 3,475,100
Kinder Morgan, Inc. 155,200 4,083,700
7,558,800
IRON & STEEL - 1.1%
USX - U.S. Steel Group 142,600 3,547,175
METALS & MINING - 7.1%
Alcan Aluminium Ltd. 20,000 774,899
Alcoa, Inc. 169,300 11,798,094
Camphor Ventures, Inc. (a) 141,866 42,206
Cominco Ltd. 57,500 1,173,591
SHARES VALUE (NOTE 1)
Freeport-McMoRan Copper & 43,500 $ 696,000
Gold, Inc. (a)
Freeport-McMoRan Copper & 51,000 889,313
Gold, Inc. Class B (a)
Inco Ltd. (a) 178,300 3,367,759
Phelps Dodge Corp. 26,600 1,546,125
Reynolds Metals Co. 28,300 1,889,025
22,177,012
OIL & GAS - 54.0%
Alberta Energy Co. Ltd. 81,900 2,408,240
Amerada Hess Corp. 177,600 9,446,100
Anadarko Petroleum Corp. 109,200 3,583,125
Apache Corp. 79,000 2,883,500
Atlantic Richfield Co. 133,300 10,264,100
Burlington Resources, Inc. 26,900 862,481
Cabot Oil & Gas Corp. Class A 50,000 737,500
Canada Occidental Petroleum 103,700 2,098,609
Ltd.
Canadian Hunter Exploration 56,200 894,316
Ltd. (a)
Chevron Corp. 201,600 16,846,200
Conoco, Inc.:
Class A 85,300 1,988,556
Class B 198,602 4,679,560
Cooper Cameron Corp. (a) 20,600 1,019,700
Crestar Energy, Inc. (a) 28,900 379,908
EOG Resources, Inc. 105,300 1,671,638
Exxon Mobil Corp. 292,980 24,463,822
Forest Oil Corp. (a) 48,900 489,000
Frontier Oil Corp. (a) 685,100 5,223,888
Gulf Canada Resources Ltd. (a) 4,100 12,793
Imperial Oil Ltd. 55,600 1,082,880
Magnum Hunter Resources, Inc. 1 3
Noble Affiliates, Inc. 20,000 401,250
Nuevo Energy Co. (a) 90,700 1,677,950
Occidental Petroleum Corp. 271,700 5,400,038
Penn West Petroleum Ltd. (a) 19,800 421,247
Petro-Canada 181,900 2,718,400
Phillips Petroleum Co. 39,100 1,598,213
Pioneer Natural Resources Co. 208,700 1,786,994
Pogo Producing Co. 30,000 676,875
Prima Energy Corp. (a) 34,700 971,600
Rio Alto Exploration Ltd. (a) 75,300 950,790
Royal Dutch Petroleum Co. (NY 351,400 19,348,963
Shares)
Santa Fe Snyder Corp. (a) 485,335 3,549,012
Shell Transport & Trading Co. 128,700 941,118
PLC (Reg.)
Suncor Energy, Inc. 96,400 4,115,183
Sunoco, Inc. 132,100 3,046,556
Swift Energy Co. (a) 1 11
Talisman Energy, Inc. (a) 110,200 2,935,414
Texaco, Inc. 141,000 7,455,375
Tosco Corp. 127,300 3,270,019
Total Fina SA sponsored ADR 16,370 1,019,033
Ultramar Diamond Shamrock 70,400 1,540,000
Corp.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
OIL & GAS - CONTINUED
Union Pacific Resources 138,200 $ 1,520,200
Group, Inc.
USX - Marathon Group 286,200 7,351,763
Valero Energy Corp. 93,500 2,121,281
Vastar Resources, Inc. 20,200 1,123,625
Vintage Petroleum, Inc. 163,600 2,096,125
Wiser Oil Co. (a) 1 3
169,072,957
PAPER & FOREST PRODUCTS - 1.3%
Abitibi-Consolidated, Inc. 77,800 976,974
Bowater, Inc. 21,700 1,121,619
Consolidated Papers, Inc. 39,100 1,080,138
Domtar, Inc. 74,900 912,056
4,090,787
PRECIOUS METALS - 3.6%
Barrick Gold Corp. 30,000 485,696
Greenstone Resources Ltd. (a) 1 0
Homestake Mining Co. 25,000 165,625
Meridian Gold, Inc. (a) 283,900 1,424,067
Newmont Mining Corp. 69,400 1,414,025
Placer Dome, Inc. 313,210 2,730,443
Stillwater Mining Co. (a) 138,000 4,916,250
William Resources, Inc. 1,029,000 7
warrants 2/15/03 (a)(c)
11,136,113
TOTAL COMMON STOCKS 288,028,801
(Cost $251,677,482)
CASH EQUIVALENTS - 10.3%
Central Cash Collateral Fund, 13,602,074 13,602,074
5.56% (b)
Taxable Central Cash Fund, 18,734,922 18,734,922
5.45% (b)
TOTAL CASH EQUIVALENTS 32,336,996
(Cost $32,336,996)
TOTAL INVESTMENT PORTFOLIO - 320,365,797
102.3%
(Cost $284,014,478)
NET OTHER ASSETS - (2.3)% (7,216,911)
NET ASSETS - 100% $ 313,148,886
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) 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 $7 or
0.0% of net assets.
Distribution of investments by country of issue, as a percentage of
net assets, is as follows:
United States of America 78.5%
Canada 9.7
Netherlands 6.2
Netherlands Antilles 4.3
Others (individually less 1.3
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $287,384,177. Net unrealized appreciation
aggregated $32,981,620, of which $47,264,252 related to appreciated
investment securities and $14,282,632 related to depreciated
investment securities.
At July 31, 1999, the fund had a capital loss carryforward of
approximately $21,051,000, all of which will expire on July 31, 2007.
The fund intends to elect to defer to its fiscal year ending July 31,
2000 approximately $26,387,000 of losses recognized during the period
November 1, 1998 to July 31, 1999.
ADVISOR NATURAL RESOURCES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 320,365,797
value (cost $284,014,478) -
See accompanying schedule
Receivable for investments 19,774,173
sold
Receivable for fund shares 350,757
sold
Dividends receivable 62,821
Interest receivable 62,817
Redemption fees receivable 508
Other receivables 76,033
TOTAL ASSETS 340,692,906
LIABILITIES
Payable to custodian bank $ 3,345
Payable for investments 12,604,756
purchased
Payable for fund shares 963,286
redeemed
Accrued management fee 156,233
Distribution fees payable 156,603
Other payables and accrued 57,723
expenses
Collateral on securities 13,602,074
loaned, at value
TOTAL LIABILITIES 27,544,020
NET ASSETS $ 313,148,886
Net Assets consist of:
Paid in capital $ 321,736,042
Distributions in excess of (191,689)
net investment income
Accumulated undistributed net (44,746,432)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,350,965
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 313,148,886
CALCULATION OF MAXIMUM $21.45
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($7,296,348 (divided
by) 340,090 shares)
Maximum offering price per $22.76
share (100/94.25 of
$21.45)
CLASS T: NET ASSET VALUE $21.72
and redemption price per
share ($247,461,928 (divided
by) 11,392,336 shares)
Maximum offering price per $22.51
share (100/96.50 of
$21.72)
CLASS B: NET ASSET VALUE $21.26
and offering price per
share ($45,957,943 (divided
by) 2,161,378 shares) A
CLASS C: NET ASSET VALUE $21.36
and offering price per
share ($9,519,075 (divided
by) 445,742 shares) A
INSTITUTIONAL CLASS: NET $21.73
ASSET VALUE, offering price
and redemption price per
share ($2,913,592
(divided by) 134,080 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 2,139,432
Dividends
Interest 342,632
Security lending 18,984
TOTAL INCOME 2,501,048
EXPENSES
Management fee $ 994,084
Transfer agent fees 458,895
Distribution fees 984,895
Accounting and security 75,604
lending fees
Non-interested trustees' 504
compensation
Custodian fees and expenses 17,672
Registration fees 56,332
Audit 14,350
Legal 2,341
Miscellaneous 1,470
Total expenses before 2,606,147
reductions
Expense reductions (70,016) 2,536,131
NET INVESTMENT INCOME (LOSS) (35,083)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 6,253,708
(including realized loss
of $138,833 on sales of
investments in affiliated
issues)
Foreign currency transactions (16,546) 6,237,162
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (15,065,623)
Assets and liabilities in (251) (15,065,874)
foreign currencies
NET GAIN (LOSS) (8,828,712)
NET INCREASE (DECREASE) IN $ (8,863,795)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (35,083) $ 463,885
income (loss)
Net realized gain (loss) 6,237,162 (51,289,494)
Change in net unrealized (15,065,874) 105,678,595
appreciation (depreciation)
NET INCREASE (DECREASE) IN (8,863,795) 54,852,986
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (26,747) (178,918)
From net investment income
In excess of net investment (156,606) -
income
From net realized gain - (13,935,776)
TOTAL DISTRIBUTIONS (183,353) (14,114,694)
Share transactions - net (30,232,671) (88,632,291)
increase (decrease)
Redemption fees 151,952 104,288
TOTAL INCREASE (DECREASE) (39,127,867) (47,789,711)
IN NET ASSETS
NET ASSETS
Beginning of period 352,276,753 400,066,464
End of period (including $ 313,148,886 $ 352,276,753
(over) under distribution of
net investment income of
($191,689) and $28,075,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 21.98 $ 18.94 $ 26.16 $ 25.11 $ 23.65
period
Income from Investment
Operations
Net investment income (loss) D .02 .07 .06 (.05) (.00)
Net realized and unrealized (.48) 3.71 (3.33) 2.81 1.46
gain (loss)
Total from investment (.46) 3.78 (3.27) 2.76 1.46
operations
Less Distributions
From net investment income (.01) (.04) - (.10) -
In excess of net investment (.07) - - (.04) -
income
From net realized gain - (.71) (3.96) (1.57) -
Total distributions (.08) (.75) (3.96) (1.71) -
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.45 $ 21.98 $ 18.94 $ 26.16 $ 25.11
TOTAL RETURN B, C (2.05)% 21.48% (14.61)% 11.45% 6.17%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 7,296 $ 7,801 $ 6,474 $ 6,372 $ 1,609
(000 omitted)
Ratio of expenses to average 1.27% A 1.28% 1.34% 1.71% A, G 1.66% A, G
net assets
Ratio of expenses to average 1.23% A, H 1.23% H 1.30% H 1.68% A, H 1.58% A, H
net assets after expense
reductions
Ratio of net investment .22% A .38% .28% (.28)% A (.01)% A
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</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 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 NINE MONTHS ENDED JULY 31,
1997.
F FOR THE PERIOD SEPTEMBER 3,
1996 (COMMENCEMENT OF SALE
OF CLASS A SHARES) TO
OCTOBER 31, 1996.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F 1995 F
Net asset value,
beginning of $ 22.21 $ 19.11 $ 26.34 $ 25.12 $ 19.25 $ 17.56
period
Income from Investment
Operations
Net investment income
(loss) D .01 .04 .02 (.02) .00 (.05)
Net realized and
unrealized (.50) 3.76 (3.34) 2.83 6.56 2.00
gain (loss)
Total from investment (.49) 3.80 (3.32) 2.81 6.56 1.95
operations
Less Distributions
From net investment
income (.00) (.01) - (.01) - -
In excess of net investment(.01) - - (.01) - -
income
From net realized gain - (.70) (3.92) (1.57) (.69) (.26)
Total distributions (.01) (.71) (3.92) (1.59) (.69) (.26)
Redemption fees added to
paid .01 .01 .01 - - -
in capital
Net asset value, end of
period $ 21.72 $ 22.21 $ 19.11 $ 26.34 $ 25.12 $ 19.25
TOTAL RETURN B, C (2.16)% 21.31% (14.69)% 11.62% 35.01% 11.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of
period $ 247,462 $ 283,419 $ 342,347 $ 618,083 $ 602,915 $ 272,979
(000 omitted)
Ratio of expenses to
average 1.43% A 1.45% 1.43% 1.47% A 1.59% 1.86% G
net assets
Ratio of expenses to
average 1.39% A, H 1.40% H 1.39% H 1.44% A, H 1.56% H 1.84% H
net assets after expense
reductions
Ratio of net investment .06% A .20% .10% (.12)% A .00% (.30)%
income (loss) to average
net assets
Portfolio turnover 94% A 99% 97% 116% A 137% 161%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1994 F
Net asset value, beginning of $ 17.59
period
Income from Investment
Operations
Net investment income (loss) D (.11)
Net realized and unrealized .76
gain (loss)
Total from investment .65
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain (.68)
Total distributions (.68)
Redemption fees added to paid -
in capital
Net asset value, end of period $ 17.56
TOTAL RETURN B, C 3.97%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 199,361
(000 omitted)
Ratio of expenses to average 2.10%
net assets
Ratio of expenses to average 2.07% H
net assets after expense
reductions
Ratio of net investment (.67)%
income (loss) to average
net assets
Portfolio turnover 125%
</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 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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED TO OCTOBER 31.
G FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 21.78 $ 18.81 $ 25.99 $ 24.88 $ 19.23
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.06) (.09) (.12) (.15)
Net realized and unrealized (.48) 3.68 (3.29) 2.80 6.49
gain (loss)
Total from investment (.53) 3.62 (3.38) 2.68 6.34
operations
Less Distributions
From net realized gain - (.66) (3.81) (1.57) (.69)
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.26 $ 21.78 $ 18.81 $ 25.99 $ 24.88
TOTAL RETURN B, C (2.39)% 20.57% (15.12)% 11.19% 33.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 45,958 $ 47,792 $ 44,351 $ 59,044 $ 36,106
(000 omitted)
Ratio of expenses to average 1.97% A 1.99% 1.98% 2.04% A 2.28%
net assets
Ratio of expenses to average 1.93% A, I 1.95% I 1.94% I 2.02% A, I 2.24% I
net assets after expense
reductions
Ratio of net investment (.48)% A (.34)% (.41)% (.67)% A (.68)%
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1995 G
Net asset value, beginning of $ 18.87
period
Income from Investment
Operations
Net investment income (loss) D (.03)
Net realized and unrealized .39
gain (loss)
Total from investment .36
operations
Less Distributions
From net realized gain -
Redemption fees added to paid -
in capital
Net asset value, end of period $ 19.23
TOTAL RETURN B, C 1.91%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,508
(000 omitted)
Ratio of expenses to average 2.23% A, H
net assets
Ratio of expenses to average 2.21% A, I
net assets after expense
reductions
Ratio of net investment (.67)% A
income (loss) to average net
assets
Portfolio turnover 161%
</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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED OCTOBER 31.
G FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF
CLASS B SHARES) TO OCTOBER
31, 1995.
H FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 21.92 $ 18.96 $ 24.39
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.05) (.07)
Net realized and unrealized (.48) 3.71 (4.15)
gain (loss)
Total from investment (.53) 3.66 (4.22)
operations
Less Distributions
From net investment income (.01) (.01) -
In excess of net investment (.03) - -
income
From net realized gain - (.70) (1.22)
Total distributions (.04) (.71) (1.22)
Redemption fees added to paid .01 .01 .01
in capital
Net asset value, end of period $ 21.36 $ 21.92 $ 18.96
TOTAL RETURN B, C (2.37)% 20.72% (17.72)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,519 $ 8,761 $ 2,972
(000 omitted)
Ratio of expenses to average 1.91% A 1.94% 2.50% A, F
net assets
Ratio of expenses to average 1.87% A, G 1.89% G 2.44% A, G
net assets after expense
reductions
Ratio of net investment (.42)% A (.28)% (.48)% A
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E 1996 F
Net asset value, beginning of $ 22.28 $ 19.15 $ 26.42 $ 25.17 $ 19.27
period
Income from Investment
Operations
Net investment income (loss) D .07 .14 .13 .04 .04
Net realized and unrealized (.50) 3.76 (3.35) 2.85 6.55
gain (loss)
Total from investment (.43) 3.90 (3.22) 2.89 6.59
operations
Less Distributions
From net investment income (.02) (.07) (.09) (.05) -
In excess of net investment (.11) - - (.02) -
income
From net realized gain - (.71) (3.97) (1.57) (.69)
Total distributions (.13) (.78) (4.06) (1.64) (.69)
Redemption fees added to paid .01 .01 .01 - -
in capital
Net asset value, end of period $ 21.73 $ 22.28 $ 19.15 $ 26.42 $ 25.17
TOTAL RETURN B, C (1.88)% 21.95% (14.29)% 11.95% 35.13%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,914 $ 4,505 $ 3,922 $ 10,042 $ 9,860
(000 omitted)
Ratio of expenses to average .88% A .87% .95% 1.08% A 1.44%
net assets
Ratio of expenses to average .84% A, I .82% I .91% I 1.06% A, I 1.39% I
net assets after expense
reductions
Ratio of net investment .61% A .78% .55% .24% A .17%
income (loss) to average net
assets
Portfolio turnover 94% A 99% 97% 116% A 137%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA 1995 G
Net asset value, beginning of $ 18.87
period
Income from Investment
Operations
Net investment income (loss) D (.01)
Net realized and unrealized .41
gain (loss)
Total from investment .40
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain -
Total distributions -
Redemption fees added to paid -
in capital
Net asset value, end of period $ 19.27
TOTAL RETURN B, C 2.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 718
(000 omitted)
Ratio of expenses to average 1.68% A, H
net assets
Ratio of expenses to average 1.66% A, I
net assets after expense
reductions
Ratio of net investment (.13)% A
income (loss) to average net
assets
Portfolio turnover 161%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS 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 NINE MONTHS ENDED JULY 31,
1997.
F YEAR ENDED OCTOBER 31.
G FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES)
TO OCTOBER 31, 1995.
H FMR AGREED TO REIMBURSE A
PORTION OF THE CLASS'
EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
I FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities (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. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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) and losses deferred due to
wash sales and excise tax regulations. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 $152,378,739 and $198,879,753, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 9,721 $ 15
CLASS T 683,913 3,466
CLASS B 240,054 180,209
CLASS C 51,207 37,909
$ 984,895 $ 221,599
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, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% 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. A
portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 25,521 $ 8,862
CLASS T 59,983 17,403
CLASS B 87,428 87,428*
CLASS C 5,981 5,981*
$ 178,913 $ 119,674
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 13,597 .35*
CLASS T 356,096 .26*
CLASS B 72,407 .30*
CLASS C 12,607 .25*
INSTITUTIONAL CLASS 4,188 .21*
$ 458,895
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $24,286 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $13,156,443. The fund received cash collateral of
$13,602,074 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $69,637 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's
custodian fees were reduced by $379, under this arrangement.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Camphor Ventures, Inc. $ - $ 178,630 $ - $ -
</TABLE>
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,1999
2000
FROM NET INVESTMENT INCOME
Class A $ 4,145 $ 14,537
Class T 17,279 148,852
Class C 2,465 1,336
Institutional Class 2,858 14,193
Total $ 26,747 $ 178,918
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 24,268 $ -
Class T 101,169 -
Class C 14,431 -
Institutional Class 16,738 -
Total $ 156,606 $ -
FROM NET REALIZED GAIN
Class A $ - $ 234,044
Class T - 11,934,513
Class B - 1,511,499
Class C - 111,651
Institutional Class - 144,069
Total $ - $ 13,935,776
$ 183,353 $ 14,114,694
</TABLE>
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 218,537 $ 2,055,241
92,879
Reinvestment of distributions 1,260 15,021 27,004
Shares redeemed (108,948) (220,423) (2,410,348)
Net increase (decrease) (14,809) 13,135 $ (328,103)
CLASS T Shares sold 1,586,971 3,047,055 $ 36,266,486
Reinvestment of distributions 5,078 703,210 110,191
Shares redeemed (2,963,208) (8,897,934) (65,534,398)
Net increase (decrease) (1,371,159) (5,147,669) $ (29,157,721)
CLASS B Shares sold 364,264 979,053 $ 8,039,219
Reinvestment of distributions - 80,941 -
Shares redeemed (396,817) (1,224,137) (8,619,611)
Net increase (decrease) (32,553) (164,143) $ (580,392)
CLASS C Shares sold 370,747 408,624 $ 8,352,919
Reinvestment of distributions 614 5,837 13,104
Shares redeemed (325,343) (171,451) (7,047,285)
Net increase (decrease) 46,018 243,010 $ 1,318,738
INSTITUTIONAL CLASS Shares 43,600 107,128 $ 991,824
sold
Reinvestment of distributions 553 8,746 11,999
Shares redeemed (112,296) (118,487) (2,489,016)
Net increase (decrease) (68,143) (2,613) $ (1,485,193)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 4,009,679
Reinvestment of distributions 240,787
Shares redeemed (4,042,409)
Net increase (decrease) $ 208,057
CLASS T Shares sold $ 55,714,382
Reinvestment of distributions 11,405,418
Shares redeemed (157,418,593)
Net increase (decrease) $ (90,298,793)
CLASS B Shares sold $ 17,717,381
Reinvestment of distributions 1,294,263
Shares redeemed (21,780,799)
Net increase (decrease) $ (2,769,155)
CLASS C Shares sold $ 7,488,770
Reinvestment of distributions 93,864
Shares redeemed (3,264,239)
Net increase (decrease) $ 4,318,395
INSTITUTIONAL CLASS Shares $ 1,948,930
sold
Reinvestment of distributions 141,597
Shares redeemed (2,181,322)
Net increase (decrease) $ (90,795)
</TABLE>
ADVISOR TECHNOLOGY FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - 46.96% 58.27% 314.89%
INST CL
S&P 500 5.59% 10.35% 124.60%
GS Technology 41.54% 52.68% 347.46%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Technology Index - a market
capitalization-weighted index of 185 stocks designed to measure the
performance of companies in the technology sector. Issues in the index
include producers of sophisticated devices, services and software
related to the fields of computers, electronics, networking and
Internet services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV TECHNOLOGY - 58.27% 51.76%
INST CL
S&P 500 10.35% 26.77%
GS Technology 52.68% 55.16%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Technology -CL I S&P 500 GS Technology
00202 SP001 GS008
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 11120.00 10516.69 11083.33
1996/10/31 11230.00 10806.74 11005.93
1996/11/30 12740.00 11623.62 12484.68
1996/12/31 12478.92 11393.36 12085.30
1997/01/31 13888.97 12105.21 13401.78
1997/02/28 12932.15 12200.12 12346.74
1997/03/31 12146.56 11698.81 11700.17
1997/04/30 12871.72 12397.23 12745.92
1997/05/31 14332.13 13151.98 14042.99
1997/06/30 14473.13 13741.19 14224.25
1997/07/31 16094.69 14834.57 16770.21
1997/08/31 16568.06 14003.54 16383.11
1997/09/30 17259.77 14770.51 16876.01
1997/10/31 14759.13 14277.18 15423.60
1997/11/30 14546.31 14938.07 15675.33
1997/12/31 13816.57 15194.56 14927.75
1998/01/31 14571.63 15362.61 15702.74
1998/02/28 16239.54 16470.56 17407.22
1998/03/31 16217.00 17314.02 17691.17
1998/04/30 16870.63 17488.19 18693.45
1998/05/31 15653.51 17187.57 17416.86
1998/06/30 16881.90 17885.73 18931.40
1998/07/31 16780.48 17695.25 19348.25
1998/08/31 14222.27 15136.87 15845.13
1998/09/30 16329.69 16106.54 18099.82
1998/10/31 17265.07 17416.64 19431.16
1998/11/30 19631.69 18472.27 21695.15
1998/12/31 23170.36 19536.64 25251.29
1999/01/31 26213.16 20353.66 29307.61
1999/02/28 23711.30 19721.07 25789.36
1999/03/31 26506.17 20510.11 27994.44
1999/04/30 26709.02 21304.46 28876.92
1999/05/31 25818.72 20801.47 28562.51
1999/06/30 28737.55 21955.95 31922.25
1999/07/31 28230.42 21270.48 31614.43
1999/08/31 29616.59 21165.19 33261.48
1999/09/30 29517.01 20585.06 33593.44
1999/10/31 31586.51 21887.68 34783.42
1999/11/30 36021.16 22332.66 39644.67
1999/12/31 44104.76 23648.05 47692.15
2000/01/31 41488.58 22459.97 44746.18
IMATRL PRASUN SHR__CHT 20000131 20000216 162636 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$41,489 - a 314.89% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $22,460 - a 124.60%
increase. If $10,000 was invested in the Goldman Sachs Technology
Index, it would have grown to $44,746 - a 347.46% increase.
ADVISOR TECHNOLOGY FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Larry Rakers)
NOTE TO SHAREHOLDERS: Larry Rakers became Portfolio Manager of
Fidelity Advisor Technology Fund on January 4, 2000.
Q. HOW DID THE FUND PERFORM, LARRY?
A. For the six-month period that ended January 31, 2000, the fund's
Institutional Class shares posted a return of 46.96%. This performance
topped the Goldman Sachs Technology Index - an index of 185 stocks
designed to measure the performance of companies in the technology
sector - and the Standard & Poor's 500 Index, which returned 41.54%
and 5.59%, respectively. For the year that ended January 31, 2000, the
fund's Institutional Class shares returned 58.27%, outpacing the
Goldman Sachs and S&P 500 indexes, which posted respective returns of
52.68% and 10.35%.
Q. WHAT FACTORS ENABLED THE FUND TO OUTPERFORM THE GOLDMAN SACHS INDEX
DURING THE SIX-MONTH PERIOD?
A. The decision to remain underweighted in many lagging computer
hardware manufacturers relative to the index paid off nicely for the
fund. Having no exposure to IBM and holding considerably less Dell
than the index really helped. Many of the key players in this space
were hurt by declining sales attributed to component shortages and
Y2K-related shortfalls. Another key was the overweighting in leading
communications equipment and Internet infrastructure names such as
Ericsson, Qualcomm, Nortel Networks and JDS Uniphase. Some good picks
within Internet services, namely Exodus Communications and Akamai
Technologies, further bolstered relative performance.
Q. WHAT CHANGES HAVE YOU MADE SINCE TAKING OVER THE FUND?
A. I haven't made any significant changes to the prevailing themes I
just outlined. The basic premise behind the fund's current positioning
is the same. It remains simply a function of where we perceive the
highest growth rates to be in the technology group, which hasn't
changed much in recent months. On the margin, though, I stepped up our
exposure to optical networking, an area I feel houses some of the best
growth prospects in the sector.
Q. TECHNOLOGY LED ALL OTHER SEGMENTS OF THE MARKET BY WIDE MARGINS
OVER THE PAST SIX MONTHS. WHAT HELPED FUEL THIS DISPARITY?
A. Simply put, it was relative growth rates. Investors rallied around
the group's superior earnings growth potential relative to all other
areas of the market, respectful of the power of the Internet to
reshape the face of the domestic economy and permanently alter the way
business is transacted. The market's confidence in the sector was so
strong that even markedly higher interest rates - typically a nemesis
of growth stocks - couldn't tame the bullishness.
Q. HOW DID OTHER STRATEGIES PLAY OUT FOR THE FUND?
A. Having exposure to software companies that provide Internet
infrastructure, such as Vignette and i2 Technologies, gave us a nice
lift. We weren't as fortunate with some of our holdings in computer
peripherals, namely Electronics for Imaging, and software utilities
companies such as BMC Software, which drifted lower alongside computer
stocks. The fund's underexposure to some of the period's biggest
winners, namely Sun Microsystems, Yahoo!, Intel and Oracle, also
dampened relative performance.
Q. WHICH STOCKS HELPED THE MOST? WHICH HURT?
A. The market rewarded JDS Uniphase, a top manufacturer of optical
network components, for its leadership position in the race for higher
bandwidth - a measure of transmission speed and capacity to deliver
data, voice and video. Exodus rose sharply on strong demand for its
Web hosting services from companies looking to bring their businesses
to the Internet. Gateway was one of the few stars in the computer
industry, benefiting in the months leading up to Y2K from selling
exclusively to consumers, a group seemingly less affected than
corporations by the millennium changeover. In terms of detractors,
Electronics for Imaging - a provider of printer-related products -
stumbled in response to weak earnings posted by Xerox, its largest
customer. BMC was felled by slowing sales related to Y2K and a
salesforce restructuring. An out-of- benchmark position in computer
hardware wholesaler Ingram Micro also hurt.
Q. WHAT'S YOUR OUTLOOK?
A. I expect much of the same in terms of strategy in the coming
months. That is, I'll likely maintain the fund's overweighting in
communications equipment and Internet infrastructure at the expense of
computer systems and hardware. I'll continue to be mindful of
valuations and relative growth rates to help me further hone my
industry positioning. With regard to security selection, I will rely
heavily on my team of 20 analysts to support me in my quest to uncover
the best stocks in a rapidly changing sector.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$2.4 billion
MANAGER: Larry Rakers, since January 2000;
joined Fidelity in 1993
(checkmark)
ADVISOR TECHNOLOGY FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Cisco Systems, Inc. 7.6
Microsoft Corp. 6.3
Motorola, Inc. 4.8
Oracle Corp. 3.6
Lucent Technologies, Inc. 3.3
EMC Corp. 2.9
Hewlett-Packard Co. 2.2
Texas Instruments, Inc. 2.1
Nortel Networks Corp. 2.0
Intuit, Inc. 1.9
36.7
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Computer Services & Software 37.2%
Electronics 19.2%
Communications Equipment 16.5%
Computers & Office Equipment 13.5%
Cellular 1.1%
All Others * 12.5%
Row: 1, Col: 1, Value: 37.2
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 19.2
Row: 1, Col: 4, Value: 16.5
Row: 1, Col: 5, Value: 13.5
Row: 1, Col: 6, Value: 1.1
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 12.5
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR TECHNOLOGY FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.0%
SHARES VALUE (NOTE 1)
ADVERTISING - 1.0%
DoubleClick, Inc. (a) 190,000 $ 18,774,375
Internet Capital Group, Inc. 50,000 5,950,000
L90, Inc. 2,700 60,750
24,785,125
BROADCASTING - 0.1%
American Tower Corp. Class A 88,700 3,159,938
(a)
Regent Communication, Inc. 3,000 35,250
3,195,188
CELLULAR - 1.1%
QUALCOMM, Inc. (a) 204,000 25,908,000
COMMUNICATIONS EQUIPMENT -
16.5%
Cisco Systems, Inc. (a) 1,728,850 189,309,061
Efficient Networks, Inc. 56,500 4,318,719
Globalstar Telecommunications 156,600 5,158,013
Ltd. (a)
Jabil Circuit, Inc. (a) 143,900 9,101,675
Lucent Technologies, Inc. 1,476,538 81,578,725
Nokia AB sponsored ADR 120,400 22,033,200
Nortel Networks Corp. 528,370 50,119,021
Telefonaktiebolaget LM 546,300 40,733,494
Ericsson sponsored ADR
Tellabs, Inc. (a) 144,900 7,824,600
Tollgrade Communications, 12,500 726,563
Inc. (a)
Turnstone Systems, Inc. 1,000 29,000
410,932,071
COMPUTER SERVICES & SOFTWARE
- - 37.2%
Adobe Systems, Inc. 49,200 2,709,075
Affiliated Computer Services, 131,200 5,215,200
Inc. Class A (a)
Akamai Technologies, Inc. 80,800 20,129,300
Amazon.com, Inc. (a) 211,600 13,661,425
Amdocs Ltd. (a) 139,200 7,403,700
America Online, Inc. (a) 624,400 35,551,775
Ariba, Inc. 59,000 9,594,875
At Home Corp. Series A (a) 169,400 6,106,341
Automatic Data Processing, 383,200 18,178,050
Inc.
BEA Systems, Inc. (a) 355,800 26,818,425
BMC Software, Inc. (a) 304,100 11,517,788
Breakaway Solutions, Inc. 51,800 4,483,938
BroadVision, Inc. (a) 20,000 2,546,250
Cadence Design Systems, Inc. 150,000 3,093,750
(a)
Cambridge Technology 369,300 7,409,081
Partners, Inc. (a)
Caminus Corp. 1,800 40,050
Check Point Software 20,000 2,203,438
Technologies Ltd. (a)
Citrix Systems, Inc. (a) 130,500 17,911,125
Clarify, Inc. (a) 32,000 3,890,000
CMGI, Inc. (a) 131,200 14,768,200
SHARES VALUE (NOTE 1)
CNET, Inc. (a) 40,000 $ 1,960,000
Commerce One, Inc. 80,000 13,780,000
Computer Associates 455,600 31,294,025
International, Inc.
Computer Sciences Corp. (a) 111,500 10,244,063
Compuware Corp. (a) 82,300 1,743,731
CyberSource Corp. 16,200 569,025
Digital Insight Corp. 81,200 3,481,450
DST Systems, Inc. (a) 258,500 16,059,313
E.piphany, Inc. 14,300 2,259,400
eBay, Inc. (a) 58,800 8,823,675
Electronic Data Systems Corp. 58,200 3,935,775
Electronics for Imaging, Inc. 548,400 25,706,250
(a)
Engage Technologies, Inc. 20,000 2,600,000
Exodus Communications, Inc. 312,000 35,841,000
(a)
Extensity, Inc. 1,600 92,600
F5 Networks, Inc. 40,500 3,807,000
HealthGate Data Corp. 2,200 23,788
i2 Technologies, Inc. (a) 68,500 13,194,813
IMS Health, Inc. 75,900 1,703,006
Inktomi Corp. (a) 77,200 7,676,575
Intertrust Technologies Corp. 71,800 10,366,125
Intuit, Inc. (a) 776,800 46,850,750
J. D. Edwards & Co. (a) 65,000 1,937,813
Legato Systems, Inc. (a) 127,500 3,211,406
Lycos, Inc. (a) 50,000 3,671,875
Mercury Interactive Corp. (a) 30,000 3,281,250
Micromuse, Inc. (a) 61,000 9,954,438
Microsoft Corp. (a) 1,604,600 157,050,225
NCR Corp. (a) 29,400 1,131,900
Networks Associates, Inc. (a) 150,000 3,890,625
New Era of Networks, Inc. (a) 87,800 4,582,063
Oracle Corp. (a) 1,797,000 89,765,766
Peregrine Systems, Inc. (a) 45,000 3,417,188
Phone.com, Inc. 50,000 5,500,000
Portal Software, Inc. 41,200 2,044,550
Proxicom, Inc. 109,000 11,009,000
PSINet, Inc. (a) 20,000 1,597,500
Rational Software Corp. (a) 60,000 3,120,000
RealNetworks, Inc. (a) 125,900 19,789,906
Redback Networks, Inc. 116,400 21,672,225
Sabre Group Holdings, Inc. 115,000 5,117,500
Class A (a)
Siebel Systems, Inc. (a) 164,800 15,110,100
Silknet Software, Inc. 35,000 5,166,875
Software.com, Inc. 30,000 2,036,250
Unisys Corp. (a) 393,500 12,542,813
Usinternetworking, Inc. 87,200 3,793,200
Verio, Inc. (a) 45,000 2,896,875
VeriSign, Inc. (a) 90,700 14,636,713
VERITAS Software Corp. (a) 219,250 31,983,094
Vignette Corp. 126,000 24,570,000
Yahoo!, Inc. (a) 25,000 8,051,563
927,776,863
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT
- - 13.5%
Adaptec, Inc. (a) 100,000 $ 5,237,500
Advanced Digital Information 31,900 1,563,100
Corp. (a)
Alteon Websystems, Inc. 30,000 2,951,250
Apple Computer, Inc. (a) 43,200 4,482,000
Compaq Computer Corp. 733,300 20,074,088
Comverse Technology, Inc. (a) 148,700 21,319,863
Dell Computer Corp. (a) 825,400 31,726,313
EMC Corp. (a) 686,500 73,112,250
Emulex Corp. (a) 158,800 15,880,000
Gateway, Inc. (a) 214,800 13,143,075
Globix Corp. (a) 20,000 1,707,500
Hewlett-Packard Co. 494,800 53,562,100
Ingram Micro, Inc. Class A (a) 26,500 303,094
Juniper Networks, Inc. 209,600 28,361,500
Lexmark International Group, 78,300 7,379,775
Inc. Class A (a)
Network Appliance, Inc. (a) 263,600 26,458,850
SCI Systems, Inc. (a) 45,900 3,304,800
Sun Microsystems, Inc. (a) 285,000 22,390,313
Symbol Technologies, Inc. 54,000 3,223,125
T/R Systems, Inc. 3,300 39,806
336,220,302
CONSUMER ELECTRONICS - 0.4%
Gemstar International Group 163,200 10,832,400
Ltd. (a)
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 1,700 23,800
ELECTRICAL EQUIPMENT - 0.5%
American Power Conversion 85,300 2,353,747
Corp. (a)
Furukawa Electric Co. Ltd. 463,000 6,775,925
InterWAVE Communications 1,000 36,500
International Ltd.
Pinnacle Systems (a) 42,500 2,071,875
11,238,047
ELECTRONIC INSTRUMENTS - 0.8%
Agilent Technologies, Inc. 150,200 9,941,363
Cohu, Inc. 50,000 2,062,500
Lernout & Hauspie Speech 117,000 5,499,000
Products NV (a)
Sawtek, Inc. (a) 35,500 2,245,375
Sequenom, Inc. 900 23,400
19,771,638
SHARES VALUE (NOTE 1)
ELECTRONICS - 19.2%
Altera Corp. (a) 226,800 $ 14,912,100
Analog Devices, Inc. (a) 167,700 15,679,950
Applied Micro Circuits Corp. 104,000 15,366,000
(a)
AVX Corp. 237,100 14,107,450
Broadcom Corp. Class A (a) 58,600 16,953,713
Brocade Communications 110,700 17,933,400
Systems, Inc.
Conexant Systems, Inc. (a) 149,300 12,615,850
Cree Research, Inc. (a) 33,000 3,106,125
E Tek Dynamics, Inc. 20,000 3,640,000
Flextronics International 40,000 1,987,500
Ltd. (a)
Intel Corp. 310,000 30,670,625
JDS Uniphase Corp. (a) 167,600 34,179,925
KEMET Corp. (a) 423,200 20,128,450
Linear Technology Corp. 97,000 9,184,688
LSI Logic Corp. (a) 111,900 9,147,825
Maxim Integrated Products, 160,800 8,060,100
Inc. (a)
Microchip Technology, Inc. (a) 28,400 1,785,650
Micron Technology, Inc. (a) 25,000 1,554,688
Motorola, Inc. 884,289 120,926,521
National Semiconductor Corp. 82,100 4,310,250
(a)
PMC-Sierra, Inc. (a) 40,500 7,310,250
QLogic Corp. (a) 103,700 15,859,619
Quantum Effect Devices, Inc. 1,200 19,200
RF Micro Devices, Inc. (a) 40,600 3,288,600
Solectron Corp. (a) 165,000 11,983,125
STMicroelectronics NV 124,800 21,013,200
Texas Instruments, Inc. 479,600 51,736,850
Vitesse Semiconductor Corp. 164,000 7,134,000
(a)
Xilinx, Inc. (a) 105,160 4,811,070
479,406,724
MEDICAL EQUIPMENT & SUPPLIES
- - 0.0%
Aspect Medical Systems, Inc. 400 11,200
PACKAGING & CONTAINERS - 0.9%
Corning, Inc. 140,000 21,595,000
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.0%
Neoforma.com, Inc. 1,600 80,500
SERVICES - 0.8%
Diamond Technology Partners, 235,900 19,329,056
Inc. Class A (a)
Gartner Group, Inc. Class B 30,089 409,963
(a)
19,739,019
TOTAL COMMON STOCKS 2,291,515,877
(Cost $1,729,632,727)
CASH EQUIVALENTS - 10.3%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 40,297,538 $ 40,297,538
5.56% (b)
Taxable Central Cash Fund, 217,016,168 217,016,168
5.45% (b)
TOTAL CASH EQUIVALENTS 257,313,706
(Cost $257,313,706)
TOTAL INVESTMENT PORTFOLIO - 2,548,829,583
102.3%
(Cost $1,986,946,433)
NET OTHER ASSETS - (2.3)% (56,927,010)
NET ASSETS - 100% $ 2,491,902,573
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $1,999,015,452. Net unrealized appreciation
aggregated $549,814,131, of which $647,565,967 related to appreciated
investment securities and $97,751,836 related to depreciated
investment securities.
ADVISOR TECHNOLOGY FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,548,829,583
value (cost $1,986,946,433)
- - See accompanying schedule
Receivable for investments 1,084,690
sold
Receivable for fund shares 29,973,028
sold
Dividends receivable 68,646
Interest receivable 1,030,710
Redemption fees receivable 2,536
Other receivables 102,605
TOTAL ASSETS 2,581,091,798
LIABILITIES
Payable for investments $ 38,579,126
purchased
Payable for fund shares 7,001,406
redeemed
Accrued management fee 1,149,854
Distribution fees payable 1,412,219
Other payables and accrued 749,082
expenses
Collateral on securities 40,297,538
loaned, at value
TOTAL LIABILITIES 89,189,225
NET ASSETS $ 2,491,902,573
Net Assets consist of:
Paid in capital $ 1,866,680,807
Accumulated net investment (6,903,010)
loss
Accumulated undistributed net 70,241,626
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 561,883,150
(depreciation) on investments
NET ASSETS $ 2,491,902,573
CALCULATION OF MAXIMUM $34.59
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($265,669,245 (divided
by) 7,681,578 shares)
Maximum offering price per $36.70
share (100/94.25 of $34.59)
CLASS T: NET ASSET VALUE $34.36
and redemption price per
share ($923,464,936 (divided
by) 26,875,925 shares)
Maximum offering price per $35.61
share (100/96.50 of $34.36)
CLASS B: NET ASSET VALUE $33.86
and offering price per
share ($934,704,383 (divided
by) 27,608,455 shares) A
CLASS C: NET ASSET VALUE $33.91
and offering price per
share ($305,476,868 (divided
by) 9,007,353 shares) A
INSTITUTIONAL CLASS: NET $34.73
ASSET VALUE, offering price
and redemption price per
share ($62,587,141
(divided by) 1,802,082
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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 515,780
Dividends
Interest 4,147,441
Security lending 256,058
TOTAL INCOME 4,919,279
EXPENSES
Management fee $ 4,209,651
Transfer agent fees 1,870,724
Distribution fees 5,074,684
Accounting and security 219,840
lending fees
Non-interested trustees' 1,706
compensation
Custodian fees and expenses 23,343
Registration fees 461,177
Audit 14,284
Legal 5,492
Miscellaneous 3,899
Total expenses before 11,884,800
reductions
Expense reductions (62,511) 11,822,289
NET INVESTMENT INCOME (LOSS) (6,903,010)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 90,483,725
Foreign currency transactions 4,237 90,487,962
Change in net unrealized 440,895,528
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 531,383,490
NET INCREASE (DECREASE) IN $ 524,480,480
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (6,903,010) $ (3,282,503)
income (loss)
Net realized gain (loss) 90,487,962 51,119,572
Change in net unrealized 440,895,528 107,259,307
appreciation (depreciation)
NET INCREASE (DECREASE) IN 524,480,480 155,096,376
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (61,161,116) -
from net realized gains
Share transactions - net 1,164,428,435 557,638,871
increase (decrease)
Redemption fees 391,334 259,288
TOTAL INCREASE (DECREASE) 1,628,139,133 712,994,535
IN NET ASSETS
NET ASSETS
Beginning of period 863,763,440 150,768,905
End of period (including $ 2,491,902,573 $ 863,763,440
accumulated net investment
loss of $6,903,010 and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.95 $ 14.88 $ 15.96 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.08) (.09) (.08) (.10)
Net realized and unrealized 11.29 10.15 .58 6.13
gain (loss)
Total from investment 11.21 10.06 .50 6.03
operations
Less Distributions
From net realized gain (1.58) - (1.14) (.08)
In excess of net realized gain - - (.45) -
Total distributions (1.58) - (1.59) (.08)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.59 $ 24.95 $ 14.88 $ 15.96
TOTAL RETURN B, C 46.80% 67.67% 4.20% 60.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 265,669 $ 94,621 $ 15,414 $ 7,313
(000 omitted)
Ratio of expenses to average 1.20% A 1.25% 1.39% 1.75% A, F
net assets
Ratio of expenses to average 1.19% A, G 1.24% G 1.35% G 1.70% A, G
net assets after expense
reductions
Ratio of net investment (.52)% A (.44)% (.59)% (.79)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.76 $ 14.80 $ 15.91 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.11) (.14) (.11) (.11)
Net realized and unrealized 11.21 10.09 .56 6.09
gain (loss)
Total from investment 11.10 9.95 .45 5.98
operations
Less Distributions
From net realized gain (1.51) - (1.12) (.08)
In excess of net realized gain - - (.45) -
Total distributions (1.51) - (1.57) (.08)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.36 $ 24.76 $ 14.80 $ 15.91
TOTAL RETURN B, C 46.63% 67.30% 3.85% 60.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 923,465 $ 349,533 $ 90,499 $ 57,624
(000 omitted)
Ratio of expenses to average 1.42% A 1.47% 1.60% 1.92% A
net assets
Ratio of expenses to average 1.41% A, F 1.46% F 1.56% F 1.87% A, F
net assets after expense
reductions
Ratio of net investment (.74)% A (.65)% (.80)% (.93)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 24.44 $ 14.68 $ 15.88 $ 12.88
period
Income from Investment
Operations
Net investment income (loss) D (.18) (.26) (.20) (.08)
Net realized and unrealized 11.04 10.01 .57 3.08
gain (loss)
Total from investment 10.86 9.75 .37 3.00
operations
Less Distributions
From net realized gain (1.45) - (1.13) -
In excess of net realized gain - - (.45) -
Total distributions (1.45) - (1.58) -
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 33.86 $ 24.44 $ 14.68 $ 15.88
TOTAL RETURN B, C 46.22% 66.49% 3.27% 23.29%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 934,704 $ 298,768 $ 31,041 $ 5,105
(000 omitted)
Ratio of expenses to average 1.95% A 2.01% 2.21% 2.50% A, F
net assets
Ratio of expenses to average 1.94% A, G 2.00% G 2.18% G 2.45% A, G
net assets after expense
reductions
Ratio of net investment (1.27)% A (1.19)% (1.40)% (1.41)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 24.49 $ 14.70 $ 14.28
period
Income from Investment
Operations
Net investment income (loss) D (.18) (.25) (.17)
Net realized and unrealized 11.06 10.03 1.27
gain (loss)
Total from investment 10.88 9.78 1.10
operations
Less Distributions
From net realized gain (1.47) - (.49)
In excess of net realized gain - - (.20)
Total distributions (1.47) - (.69)
Redemption fees added to paid .01 .01 .01
in capital
Net asset value, end of period $ 33.91 $ 24.49 $ 14.70
TOTAL RETURN B, C 46.22% 66.60% 8.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 305,477 $ 88,120 $ 6,754
(000 omitted)
Ratio of expenses to average 1.94% A 1.97% 2.43% A
net assets
Ratio of expenses to average 1.93% A, F 1.96% F 2.41% A, F
net assets after expense
reductions
Ratio of net investment (1.25)% A (1.16)% (1.64)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348%
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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
31, 1998.
F FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 25.05 $ 14.89 $ 15.98 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.04) (.04) (.06)
Net realized and unrealized 11.33 10.19 .55 6.12
gain (loss)
Total from investment 11.29 10.15 .51 6.06
operations
Less Distributions
From net realized gain (1.62) - (1.15) (.09)
In excess of net realized gain - - (.46) -
Total distributions (1.62) - (1.61) (.09)
Redemption fees added to paid .01 .01 .01 .01
in capital
Net asset value, end of period $ 34.73 $ 25.05 $ 14.89 $ 15.98
TOTAL RETURN B, C 46.96% 68.23% 4.26% 60.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 62,587 $ 32,722 $ 7,060 $ 3,598
(000 omitted)
Ratio of expenses to average .93% A .98% 1.10% 1.50% A, F
net assets
Ratio of expenses to average .92% A, G .97% G 1.07% G 1.44% A, G
net assets after expense
reductions
Ratio of net investment (.24)% A (.17)% (.30)% (.50)% A
income (loss) to average net
assets
Portfolio turnover 107% A 170% 348% 517% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING
THE PERIOD.
E FOR THE PERIOD 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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,768,158,376 and $722,058,263, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 197,761 $ 185
CLASS T 1,373,921 1,701
CLASS B 2,670,352 2,003,483
CLASS C 832,650 681,384
$ 5,074,684 $ 2,686,753
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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. In
addition, purchases of Class A and Class T shares that were subject to
a finder's fee bear a contingent deferred sales charge on assets that
do not remain in the fund for at least one year. The Class A and Class
T contingent deferred sales charge is based on 0.25% 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. A portion of the sales charges paid to FDC is paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,169,893 $ 626,593
CLASS T 1,244,394 509,029
CLASS B 489,943 489,943*
CLASS C 36,068 36,068*
$ 2,940,298 $ 1,661,633
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 216,174 .27 *
CLASS T 664,905 .24 *
CLASS B 718,383 .27 *
CLASS C 210,789 .25 *
INSTITUTIONAL CLASS 60,473 .25 *
$ 1,870,724
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $42,766 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $43,907,150. The fund received cash collateral of
$40,297,538 which was invested in cash equivalents, and U.S. Treasury
obligations valued at $5,805,000.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $59,953 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of expenses. During the period, the fund's custodian fees were
reduced by $2,558 under the custodian arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
FROM NET REALIZED GAIN
Class A $ 7,083,438 $ -
Class T 23,785,599 -
Class B 21,306,809 -
Class C 6,503,042 -
Institutional Class 2,482,228 -
Total $ 61,161,116 $ -
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 4,257,551 3,280,891 $ 132,860,477
Reinvestment of distributions 237,147 - 6,520,072
Shares redeemed (605,680) (524,386) (18,800,034)
Net increase (decrease) 3,889,018 2,756,505 $ 120,580,515
CLASS T Shares sold 14,406,521 10,904,693 $ 448,894,924
Reinvestment of distributions 830,793 - 22,659,130
Shares redeemed (2,478,103) (2,903,454) (72,433,209)
Net increase (decrease) 12,759,211 8,001,239 $ 399,120,845
CLASS B Shares sold 15,931,615 11,234,873 $ 484,384,843
Reinvestment of distributions 704,655 - 18,859,274
Shares redeemed (1,254,384) (1,122,956) (37,438,981)
Net increase (decrease) 15,381,886 10,111,917 $ 465,805,136
CLASS C Shares sold 5,731,533 3,451,291 $ 175,959,125
Reinvestment of distributions 200,006 - 5,388,508
Shares redeemed (522,956) (311,910) (16,127,127)
Net increase (decrease) 5,408,583 3,139,381 $ 165,220,506
INSTITUTIONAL CLASS Shares 990,830 1,121,900 $ 29,603,402
sold
Reinvestment of distributions 67,708 - 1,853,690
Shares redeemed (562,768) (289,655) (17,755,659)
Net increase (decrease) 495,770 832,245 $ 13,701,433
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 74,375,999
Reinvestment of distributions -
Shares redeemed (11,021,514)
Net increase (decrease) $ 63,354,485
CLASS T Shares sold $ 237,438,732
Reinvestment of distributions -
Shares redeemed (59,161,752)
Net increase (decrease) $ 178,276,980
CLASS B Shares sold $ 250,482,834
Reinvestment of distributions -
Shares redeemed (23,194,043)
Net increase (decrease) $ 227,288,791
CLASS C Shares sold $ 76,473,150
Reinvestment of distributions -
Shares redeemed (6,794,753)
Net increase (decrease) $ 69,678,397
INSTITUTIONAL CLASS Shares $ 24,772,786
sold
Reinvestment of distributions -
Shares redeemed (5,732,568)
Net increase (decrease) $ 19,040,218
</TABLE>
ADVISOR UTILITIES GROWTH FUND - INSTITUTIONAL CLASS
PERFORMANCE
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 life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - INST 18.86% 38.73% 195.16%
CL
S&P 500 5.59% 10.35% 124.60%
GS Utilities 12.17% 18.87% 144.74%
CUMULATIVE TOTAL RETURNS show Institutional Class shares' 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 shares' returns to the performance of both the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks - and the Goldman Sachs Utilities Index - a market
capitalization-weighted index of 151 stocks designed to measure the
performance of companies in the utilities sector. Issues in the index
include generators and distributors of electricity, distributors of
natural gas and water, and providers of telecommunications services.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, PAST 1 YEAR LIFE OF FUND
1996
FIDELITY ADV UTILITIES - INST 38.73% 37.34%
CL
S&P 500 10.35% 26.77%
GS Utilities 18.87% 30.00%
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.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$10,000 OVER LIFE OF FUND
FA Utilities Growth -CL I S&P 500 GS Utilities
00206 SP001 GS007
1996/09/03 10000.00 10000.00 10000.00
1996/09/30 10160.00 10516.69 10176.08
1996/10/31 10780.00 10806.74 10476.83
1996/11/30 11360.00 11623.62 10911.15
1996/12/31 11524.62 11393.36 10972.81
1997/01/31 11848.98 12105.21 11198.39
1997/02/28 12021.29 12200.12 11368.11
1997/03/31 11413.13 11698.81 10703.10
1997/04/30 11808.43 12397.23 10813.53
1997/05/31 12558.50 13151.98 11421.28
1997/06/30 12953.80 13741.19 11800.54
1997/07/31 13268.01 14834.57 12102.55
1997/08/31 12943.66 14003.54 11763.95
1997/09/30 14335.34 14770.51 12662.62
1997/10/31 14119.85 14277.18 12858.05
1997/11/30 14786.84 14938.07 14071.85
1997/12/31 15011.00 15194.56 14800.43
1998/01/31 16012.47 15362.61 15075.28
1998/02/28 17470.17 16470.56 15318.83
1998/03/31 18527.29 17314.02 16771.80
1998/04/30 18416.01 17488.19 16224.12
1998/05/31 17837.38 17187.57 16023.80
1998/06/30 17681.60 17885.73 16401.68
1998/07/31 17826.25 17695.25 16397.57
1998/08/31 15211.29 15136.87 15244.65
1998/09/30 16723.52 16106.54 16699.19
1998/10/31 16987.26 17416.64 17462.71
1998/11/30 17742.52 18472.27 18082.46
1998/12/31 19922.89 19536.64 19876.18
1999/01/31 21275.46 20353.66 20588.34
1999/02/28 20593.08 19721.07 19916.98
1999/03/31 21567.90 20510.11 19710.20
1999/04/30 23505.36 21304.46 21005.03
1999/05/31 23944.03 20801.47 21603.51
1999/06/30 24821.37 21955.95 22204.38
1999/07/31 24833.55 21270.48 21818.20
1999/08/31 23310.39 21165.19 20718.21
1999/09/30 23847.71 20585.06 21211.52
1999/10/31 26069.07 21887.68 22794.58
1999/11/30 27422.31 22332.66 23021.38
1999/12/31 28717.70 23648.05 23901.40
2000/01/31 29516.49 22459.97 24473.87
IMATRL PRASUN SHR__CHT 20000131 20000216 162918 R00000000000044
</TABLE>
$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, 2000, the value of the investment would have grown to
$29,516 - a 195.16% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $22,460 - a 124.60%
increase. If $10,000 was invested in the Goldman Sachs Utilities
Index, it would have grown to $24,474 - a 144.74% increase.
ADVISOR UTILITIES GROWTH FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Peter Saperstone)
An interview with
Peter Saperstone, Portfolio Manager of Fidelity Advisor Utilities
Growth Fund
Q. HOW DID THE FUND PERFORM, PETER?
A. Both absolute and relative performance were strong. For the six
months that ended January 31, 2000, the fund's Institutional Class
shares returned 18.86%. During the same period, the Goldman Sachs
Utilities Index - an index of 151 stocks designed to measure the
performance of companies in the utilities sector - returned 12.17%,
while the Standard & Poor's 500 Index returned 5.59%. For the 12
months that ended January 31, 2000, the fund's Institutional Class
shares returned 38.73%, while the Goldman Sachs index and the S&P 500
returned 18.87% and 10.35%, respectively.
Q. WHAT FACTORS ENABLED THE FUND TO OUTPERFORM THE GOLDMAN SACHS
INDEX?
A. I overweighted telecommunications stocks and underweighted electric
utilities relative to the Goldman Sachs index. That strategy helped
because the telecommunications sector continued to experience strong
growth, while electric utilities suffered from weak performance due to
higher interest rates and fears of slowing earnings growth as a result
of deregulation. Within the telecommunications sector, the fund
benefited from a concentration on newer entrants and less emphasis on
more established companies. My rationale was that newer companies have
more to gain and less to lose from deregulation than established
companies such as the regional Bell operating companies (RBOCs).
Within the electric utilities group, I stressed independent power
producers (IPPs) over traditional electric utilities. Although we
classify them as electric utilities, IPPs generally have much stronger
growth prospects than conventional electric utilities, and their
performance helped the fund substantially.
Q. WHAT WERE SOME EXAMPLES OF HIGH-GROWTH AREAS IN THE
TELECOMMUNICATIONS MARKETS?
A. One high-growth area for new entrants was the local telephone
service market, which until a few years ago was served exclusively by
the RBOCs. The new players on the block in that market are called
competitive local exchange carriers (CLECs). These companies have far
less overhead than the RBOCs, and they have taken away considerable
market share by offering extremely competitive service plans and
rates. Another area experiencing dramatic growth was the wireless
industry, which benefited from rapidly growing demand as a result of
falling prices and new features such as Internet access and voice
activation.
Q. WHAT STOCKS HELPED THE FUND'S PERFORMANCE?
A. Three wireless stocks made the list of holdings that performed well
- - Nextel, Sprint PCS and VoiceStream. All three benefited from the
rapidly growing market for wireless products and services. Also
helping performance was Calpine, an IPP. As investors became aware of
the large number of potentially profitable projects coming on line for
the company, the price-to-earnings ratio considered reasonable for its
stock expanded dramatically. Finally, two CLECs - McLeodUSA and
Metromedia Fiber - continued to gain market share and expand their
capacity to handle data traffic.
Q. WHAT STOCKS TURNED IN DISAPPOINTING PERFORMANCES?
A. SBC Communications and Bell Atlantic exemplified the poorly
performing RBOCs group. Investors shunned the stocks as they saw the
companies' markets increasingly penetrated by competitors. The stocks
of established long-distance companies AT&T and MCI WorldCom also hurt
performance. These two core holdings suffered from slowing growth and
eroding market share. Another lackluster performer, electric utility
PG&E, was representative of the twin problems facing many companies in
that industry during the period: slowing earnings growth and higher
interest rates.
Q. WHAT'S YOUR OUTLOOK, PETER?
A. The utilities market - especially the telecommunications industry -
should remain one of the premier growth areas of the economy for the
foreseeable future. Deregulation and technological innovation are
powerful forces benefiting telecommunications companies in the U.S and
abroad. While there may be occasional periods in which values get
ahead of themselves, the utilities sector should continue to
appreciate faster than the overall market in the long run. I plan to
continue my strategy of emphasizing "attackers" over "defenders" for
the reasons I mentioned earlier. For now, rising interest rates offer
another reason to underweight the RBOCs and traditional electric
utilities since those stocks often follow bond prices lower in such an
environment.
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 OR OTHER CONDITIONS. FOR MORE INFORMATION, SEE PAGE 3.
FUND FACTS
START DATE: September 3, 1996
SIZE: as of January 31, 2000, more than
$416 million
MANAGER: Peter Saperstone, since 1998;
joined Fidelity in 1995
(checkmark)
ADVISOR UTILITIES GROWTH FUND
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
AT&T Corp. 9.1
Nextel Communications, Inc. 7.0
Class A
SBC Communications, Inc. 6.9
BellSouth Corp. 6.9
MCI WorldCom, Inc. 6.9
Mannesmann AG (Reg.) 4.4
BCE, Inc. 3.4
Verio, Inc. 2.8
Sprint Corp. - PCS Group 2.6
Series 1
Sprint Corp. - FON Group 2.6
52.6
TOP INDUSTRIES AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS
Telephone Services 48.5%
Cellular 18.5%
Electric Utility 10.6%
Computer Services & Software 6.1%
Gas 4.3%
All Others * 12.0%
Row: 1, Col: 1, Value: 48.5
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 18.5
Row: 1, Col: 4, Value: 10.6
Row: 1, Col: 5, Value: 6.1
Row: 1, Col: 6, Value: 4.3
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 12.8
* INCLUDES SHORT-TERM
INVESTMENTS AND NET OTHER
ASSETS.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
ADVISOR UTILITIES GROWTH FUND
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 95.5%
SHARES VALUE (NOTE 1)
BROADCASTING - 1.2%
AT&T Corp. - Liberty Media 18,600 $ 950,925
Group Class A (a)
EchoStar Communications Corp. 4,800 390,900
Class A (a)
Metro One Telecommunications, 150,000 1,865,625
Inc. (a)
PanAmSat Corp. (a) 30,000 1,576,875
4,784,325
CELLULAR - 18.5%
ALLTEL Corp. 80,100 5,346,675
China Telecom (Hong Kong) 1,031,000 6,443,751
Ltd. (a)
Mannesmann AG (Reg.) 68,000 18,492,913
Nextel Communications, Inc. 275,000 29,253,125
Class A (a)
SBA Communications Corp. 115,000 3,485,938
Class A
Sprint Corp. - PCS Group 100,000 11,006,250
Series 1 (a)
Triton PCS Holdings, Inc. 37,100 1,518,781
Class A
VoiceStream Wireless Corp. (a) 15,000 1,760,625
77,308,058
COMMUNICATIONS EQUIPMENT - 2.2%
Globalstar Telecommunications 5,600 184,450
Ltd. (a)
Nokia AB sponsored ADR 50,000 9,150,000
9,334,450
COMPUTER SERVICES & SOFTWARE
- - 6.1%
Concentric Network Corp. (a) 61,700 2,614,538
Covad Communications Group, 100,000 7,075,000
Inc.
PSINet, Inc. (a) 50,000 3,993,750
Verio, Inc. (a) 182,600 11,754,875
25,438,163
CONSUMER ELECTRONICS - 0.6%
General Motors Corp. Class H 22,900 2,576,250
(a)
ELECTRIC UTILITY - 10.6%
AES Corp. (a) 100,000 8,012,500
Calpine Corp. (a) 113,000 8,263,125
Citizens Utilities Co. Class B 250,000 3,703,125
CMS Energy Corp. 139,400 4,182,000
Duke Energy Corp. 61,294 3,539,729
Entergy Corp. 233,500 5,822,906
Illinova Corp. 14,600 638,750
IPALCO Enterprises, Inc. 161,100 3,131,381
PG&E Corp. 35,800 785,363
Unicom Corp. 150,000 5,868,750
43,947,629
ELECTRICAL EQUIPMENT - 2.4%
ANTEC Corp. (a) 28,500 1,115,063
Omnipoint Corp. (a) 85,900 8,810,119
9,925,182
SHARES VALUE (NOTE 1)
GAS - 4.3%
Columbia Energy Group 8,100 $ 526,500
Dynegy, Inc. 75,900 2,352,900
Enron Corp. 47,600 3,210,025
Kinder Morgan, Inc. 365,100 9,606,694
Williams Companies, Inc. 52,981 2,053,014
17,749,133
LEASING & RENTAL - 0.5%
Crown Castle International 65,000 2,055,625
Corp. (a)
OIL & GAS - 0.1%
The Coastal Corp. 13,050 481,219
REAL ESTATE INVESTMENT TRUSTS
- - 0.5%
Pinnacle Holdings, Inc. 46,100 1,956,369
TELEPHONE SERVICES - 48.5%
Alaska Communication Systems 107,600 1,546,750
Group, Inc.
Allegiance Telecom, Inc. (a) 10,800 1,138,050
AT&T Corp. 718,164 37,883,144
BCE, Inc. 140,000 14,262,981
Bell Atlantic Corp. 25,700 1,591,794
BellSouth Corp. 606,200 28,529,288
CenturyTel, Inc. 100,500 3,844,125
Commonwealth Telephone 26,900 1,449,238
Enterprises, Inc. (a)
Focal Communications Corp. 37,300 1,496,663
Global TeleSystems Group, 20,000 498,750
Inc. (a)
GTE Corp. 14,400 1,055,700
Intermedia Communications, 20,000 860,000
Inc. (a)
MCI WorldCom, Inc. (a) 620,660 28,511,569
McLeodUSA, Inc. Class A (a) 118,000 8,112,500
Metromedia Fiber Network, 116,600 7,892,363
Inc. Class A (a)
NEXTLINK Communications, Inc. 112,700 9,509,063
Class A (a)
Qwest Communications 8,722 343,429
International, Inc. (a)
SBC Communications, Inc. 669,115 28,855,584
Sprint Corp. - FON Group 169,000 10,932,188
Telefonica SA sponsored ADR 50,402 3,830,552
WinStar Communications, Inc. 52,600 3,724,738
(a)
WinStar Communications, Inc. 117 8,285
Z-Tel Technologies, Inc. 162,200 5,859,475
201,736,229
TOTAL COMMON STOCKS 397,292,632
(Cost $341,707,381)
CASH EQUIVALENTS - 15.0%
SHARES VALUE (NOTE 1)
Central Cash Collateral Fund, 31,519,068 $ 31,519,068
5.56% (b)
Taxable Central Cash Fund, 31,059,121 31,059,121
5.45% (b)
TOTAL CASH EQUIVALENTS 62,578,189
(Cost $62,578,189)
TOTAL INVESTMENT PORTFOLIO - 459,870,821
110.5%
(Cost $404,285,570)
NET OTHER ASSETS - (10.5)% (43,628,781)
NET ASSETS - 100% $ 416,242,040
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
Distribution of investments by country of issue, as a percentage of
net assets, is as follows:
United States of America 87.5%
Germany 4.4
Canada 3.4
Finland 2.2
Hong Kong 1.6
Others (individually less 0.9
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 2000, the aggregate cost of investment securities for
income tax purposes was $406,581,281. Net unrealized appreciation
aggregated $53,289,540, of which $65,456,529 related to appreciated
investment securities and $12,166,989 related to depreciated
investment securities.
ADVISOR UTILITIES GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 459,870,821
value (cost $404,285,570) -
See accompanying schedule
Receivable for investments 7,921,808
sold
Receivable for fund shares 5,950,724
sold
Dividends receivable 478,148
Interest receivable 186,259
Redemption fees receivable 521
Other receivables 15,734
TOTAL ASSETS 474,424,015
LIABILITIES
Payable for investments $ 25,622,973
purchased
Payable for fund shares 500,307
redeemed
Accrued management fee 177,571
Distribution fees payable 225,130
Other payables and accrued 136,926
expenses
Collateral on securities 31,519,068
loaned, at value
TOTAL LIABILITIES 58,181,975
NET ASSETS $ 416,242,040
Net Assets consist of:
Paid in capital $ 349,498,170
Distributions in excess of (339,364)
net investment income
Accumulated undistributed net 11,497,983
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 55,585,251
(depreciation) on investments
NET ASSETS $ 416,242,040
CALCULATION OF MAXIMUM $22.82
OFFERING PRICE CLASS A:
NET ASSET VALUE and
redemption price per
share ($35,863,369 (divided
by) 1,571,481 shares)
Maximum offering price per $24.21
share (100/94.25 of
$22.82)
CLASS T: NET ASSET VALUE $22.77
and redemption price per
share ($144,596,924 (divided
by) 6,349,967 shares)
Maximum offering price per $23.60
share (100/96.50 of
$22.77)
CLASS B: NET ASSET VALUE $22.52
and offering price per
share ($155,534,566 (divided
by) 6,906,280 shares) A
CLASS C: NET ASSET VALUE $22.50
and offering price per
share ($66,354,841 (divided
by) 2,948,971 shares) A
INSTITUTIONAL CLASS: NET $22.91
ASSET VALUE, offering price
and redemption price per
share ($13,892,340
(divided by) 606,359 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,
2000 (UNAUDITED)
INVESTMENT INCOME $ 1,210,179
Dividends
Interest 632,911
Security lending 33,711
TOTAL INCOME 1,876,801
EXPENSES
Management fee $ 709,683
Transfer agent fees 297,711
Distribution fees 892,351
Accounting and security 53,128
lending fees
Non-interested trustees' 300
compensation
Custodian fees and expenses 6,164
Registration fees 126,013
Audit 12,934
Legal 1,020
Miscellaneous 689
Total expenses before 2,099,993
reductions
Expense reductions (12,139) 2,087,854
NET INVESTMENT INCOME (LOSS) (211,053)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 13,682,391
Foreign currency transactions 2,236 13,684,627
Change in net unrealized 34,519,028
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 48,203,655
NET INCREASE (DECREASE) IN $ 47,992,602
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1999
ASSETS 2000 (UNAUDITED)
Operations Net investment $ (211,053) $ (97,227)
income (loss)
Net realized gain (loss) 13,684,627 8,970,907
Change in net unrealized 34,519,028 18,386,120
appreciation (depreciation)
NET INCREASE (DECREASE) IN 47,992,602 27,259,800
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (128,311) -
In excess of net investment
income
From net realized gain (9,710,886) (3,437,371)
TOTAL DISTRIBUTIONS (9,839,197) (3,437,371)
Share transactions - net 202,407,194 108,825,089
increase (decrease)
Redemption fees 62,766 29,790
TOTAL INCREASE (DECREASE) 240,623,365 132,677,308
IN NET ASSETS
NET ASSETS
Beginning of period 175,618,675 42,941,367
End of period (including $ 416,242,040 $ 175,618,675
under (over) distributions
of net investment income of
($339,364) and $0,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.31 $ 16.00 $ 13.07 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .03 .05 (.02) .12
Net realized and unrealized 3.53 5.45 4.19 3.09
gain (loss)
Total from investment 3.56 5.50 4.17 3.21
operations
Less Distributions
From net investment income - - (.04) (.03)
In excess of net investment (.05) - - -
income
From net realized gain (1.01) (1.20) (1.21) (.11)
Total distributions (1.06) (1.20) (1.25) (.14)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.82 $ 20.31 $ 16.00 $ 13.07
TOTAL RETURN B, C 18.64% 38.83% 33.99% 32.36%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 35,863 $ 14,400 $ 3,186 $ 531
(000 omitted)
Ratio of expenses to average 1.24% A 1.34% 1.75% F 1.75% A, F
net assets
Ratio of expenses to average 1.23% A, G 1.32% G 1.72% G 1.75% A
net assets after expense
reductions
Ratio of net investment .30% A .30% (.11)% 1.09% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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 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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.23 $ 15.95 $ 13.03 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D .01 .01 (.04) .08
Net realized and unrealized 3.53 5.43 4.17 3.09
gain (loss)
Total from investment 3.54 5.44 4.13 3.17
operations
Less Distributions
From net investment income - - (.03) (.03)
In excess of net investment (.01) - - -
income
From net realized gain (1.00) (1.17) (1.19) (.11)
Total distributions (1.01) (1.17) (1.22) (.14)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.77 $ 20.23 $ 15.95 $ 13.03
TOTAL RETURN B, C 18.57% 38.45% 33.72% 31.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 144,597 $ 65,085 $ 19,918 $ 7,085
(000 omitted)
Ratio of expenses to average 1.49% A 1.58% 1.94% 2.00% A, F
net assets
Ratio of expenses to average 1.48% A, G 1.55% G 1.90% G 2.00% A
net assets after expense
reductions
Ratio of net investment .05% A .07% (.23)% .79% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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 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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.02 $ 15.83 $ 13.01 $ 11.76
period
Income from Investment
Operations
Net investment income (loss) D (.05) (.08) (.13) .02
Net realized and unrealized 3.49 5.39 4.16 1.23
gain (loss)
Total from investment 3.44 5.31 4.03 1.25
operations
Less Distributions
From net investment income - - (.03) -
From net realized gain (.95) (1.13) (1.19) -
Total distributions (.95) (1.13) (1.22) -
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.52 $ 20.02 $ 15.83 $ 13.01
TOTAL RETURN B, C 18.22% 37.76% 32.97% 10.63%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 155,535 $ 65,645 $ 12,919 $ 2,039
(000 omitted)
Ratio of expenses to average 1.99% A 2.08% 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 1.98% A, G 2.05% G 2.47% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.45)% A (.43)% (.85)% .32% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151% 13% A
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.
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 E
Net asset value, beginning of $ 20.01 $ 15.85 $ 13.90
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.08) (.10)
Net realized and unrealized 3.49 5.38 3.16
gain (loss)
Total from investment 3.45 5.30 3.06
operations
Less Distributions
From net investment income - - (.02)
From net realized gain (.96) (1.15) (1.10)
Total distributions (.96) (1.15) (1.12)
Redemption fees added to paid - .01 .01
in capital
Net asset value, end of period $ 22.50 $ 20.01 $ 15.85
TOTAL RETURN B, C 18.24% 37.72% 23.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 66,355 $ 23,524 $ 3,489
(000 omitted)
Ratio of expenses to average 1.98% A 2.07% 2.50% A, F
net assets
Ratio of expenses to average 1.97% A, G 2.04% G 2.48% A, G
net assets after expense
reductions
Ratio of net investment (.44)% A (.43)% (.91)% A
income (loss) to average net
assets
Portfolio turnover 128% A 149% 151%
</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 NOVEMBER 3,
1997 (COMMENCEMENT OF SALE
OF CLASS C SHARES) TO JULY
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 E
Net asset value, beginning of $ 20.38 $ 16.02 $ 13.09 $ 10.00
period
Income from Investment
Operations
Net investment income D .06 .11 .04 .14
Net realized and unrealized 3.55 5.46 4.17 3.10
gain (loss)
Total from investment 3.61 5.57 4.21 3.24
operations
Less Distributions
From net investment income - - (.07) (.04)
In excess of net investment (.08) - - -
income
From net realized gain (1.01) (1.22) (1.22) (.11)
Total distributions (1.09) (1.22) (1.29) (.15)
Redemption fees added to paid .01 .01 .01 -
in capital
Net asset value, end of period $ 22.91 $ 20.38 $ 16.02 $ 13.09
TOTAL RETURN B, C 18.86% 39.31% 34.36% 32.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 13,892 $ 6,963 $ 3,430 $ 2,246
(000 omitted)
Ratio of expenses to average .94% A 1.02% 1.46% 1.50% A, F
net assets
Ratio of expenses to average .93% A, G .99% G 1.43% G 1.50% A
net assets after expense
reductions
Ratio of net investment .60% A .63% .30% 1.29% A
income to average net assets
Portfolio turnover 128% A 149% 151% 13% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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.
G FMR OR THE FUND HAS ENTERED
INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A
PORTION OF THE CLASS'
EXPENSES.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. 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, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent 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.
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, 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 short-term gain remaining at fiscal year end is distributed
in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 60 days are subject to a short-term trading 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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR are transferred to an
account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 $331,927,701 and $149,822,403, 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 .2167% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees has adopted separate Distribution and
Service 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. A portion of this fee may be reallowed
to securities dealers, banks and other financial institutions for the
distribution of each class of shares and providing shareholder support
services. For the period, this fee was 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 retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 26,789 $ 28
CLASS T 209,112 235
CLASS B 469,963 352,554
CLASS C 186,487 150,437
$ 892,351 $ 503,254
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. 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. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
bear a contingent deferred sales charge on assets that do not remain
in the fund for at least one year. The Class A and Class T contingent
deferred sales charge is based on 0.25% 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.
A portion of the sales charges paid to FDC is paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 197,132 $ 94,319
CLASS T 257,213 95,438
CLASS B 82,211 82,211*
CLASS C 6,439 6,439*
$ 542,995 $ 278,407
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS,
AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives 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 FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 26,976 .25 *
CLASS T 102,116 .24 *
CLASS B 116,424 .25 *
CLASS C 43,144 .23 *
INSTITUTIONAL CLASS 9,051 .20 *
$ 297,711
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting 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 $2,106 for the period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $30,992,450. The fund received cash collateral of
$31,519,068 which was invested in cash equivalents.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $11,513 under this arrangement.
In addition, through an arrangement with the fund's custodian, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's
custodian fees were reduced by $626 under this arrangement.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 10% of the total outstanding shares of the fund.
8. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31,
2000 1999
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 50,046 $ -
Class T 42,240 -
Class B - -
Class C - -
Institutional Class 36,025 -
Total $ 128,311 $ -
FROM NET REALIZED GAIN
Class A $ 860,425 $ 267,451
Class T 3,343,257 1,516,237
Class B 3,638,894 1,080,984
Class C 1,413,348 311,856
Institutional Class 454,962 260,843
Total $ 9,710,886 $ 3,437,371
$ 9,839,197 $ 3,437,371
9. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, SIX MONTHS ENDED JANUARY 31,
2000 1999 2000
CLASS A Shares sold 610,783 $ 20,285,552
967,367
Reinvestment of distributions 41,771 17,188 805,886
Shares redeemed (146,766) (117,917) (3,098,732)
Net increase (decrease) 862,372 510,054 $ 17,992,706
CLASS T Shares sold 3,764,104 2,535,015 $ 79,452,336
Reinvestment of distributions 164,039 110,405 3,147,401
Shares redeemed (794,997) (677,022) (16,015,743)
Net increase (decrease) 3,133,146 1,968,398 $ 66,583,994
CLASS B Shares sold 3,941,296 2,681,105 $ 81,633,868
Reinvestment of distributions 148,935 65,772 2,811,761
Shares redeemed (463,688) (283,363) (9,229,005)
Net increase (decrease) 3,626,543 2,463,514 $ 75,216,624
CLASS C Shares sold 1,884,136 1,045,991 $ 39,128,015
Reinvestment of distributions 57,267 17,797 1,081,112
Shares redeemed (168,118) (108,216) (3,445,636)
Net increase (decrease) 1,773,285 955,572 $ 36,763,491
INSTITUTIONAL CLASS Shares 417,881 170,875 $ 8,842,862
sold
Reinvestment of distributions 17,930 18,455 342,837
Shares redeemed (171,187) (61,672) (3,335,320)
Net increase (decrease) 264,624 127,658 $ 5,850,379
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDED JULY 31,
1999
CLASS A Shares sold $ 10,991,149
Reinvestment of distributions 223,588
Shares redeemed (1,971,798)
Net increase (decrease) $ 9,242,939
CLASS T Shares sold $ 45,737,017
Reinvestment of distributions 1,432,350
Shares redeemed (11,443,758)
Net increase (decrease) $ 35,725,609
CLASS B Shares sold $ 47,915,404
Reinvestment of distributions 845,886
Shares redeemed (4,722,842)
Net increase (decrease) $ 44,038,448
CLASS C Shares sold $ 19,125,937
Reinvestment of distributions 228,735
Shares redeemed (1,876,189)
Net increase (decrease) $ 17,478,483
INSTITUTIONAL CLASS Shares $ 3,122,693
sold
Reinvestment of distributions 240,109
Shares redeemed (1,023,192)
Net increase (decrease) $ 2,339,610
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
* 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 Latin America Fund
Fidelity Advisor Emerging Asia Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital
Appreciation Fund
Fidelity Advisor International Capital
Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant (registered trademark) Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
BULK RATE
U.S. POSTAGE
P A I D
F I D E L I T Y
INVESTMENTS
(registered trademark)
Fidelity Investments Institutional Services Co., Inc.
P.O. Box 505422
Cincinnati, OH 45250-5422
