(2_FIDELITY_LOGOS)FIDELITY
EXCHANGE
FUND
SEMIANNUAL REPORT
JUNE 30, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 9 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 19 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although there have been positive market indications so far in 1995, no one
can predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1995 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Exchange 19.16% 30.05% 72.40% 290.44%
S&P 500(registered trademark) 20.21% 26.07% 76.98% 293.40%
Average Growth and Income Fund 16.75% 19.74% 69.84% 227.71%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 Stocks- a common proxy for the U.S. stock market. To measure
how the fund's performance stacked up against its peers, you can compare it
to the average growth and income fund, which reflects the performance of
432 growth and income funds with similar objectives tracked by Lipper
Analytical Services over the past six months. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Exchange 30.05% 11.51% 14.59%
S&P 500(registered trademark) 26.07% 12.09% 14.68%
Average Growth and Income Fund 19.74% 11.06% 12.47%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Exchange (033) Standard & Poor's
06/30/85 10000.00 10000.00
07/31/85 9959.59 9985.00
08/31/85 9889.21 9900.13
09/30/85 9603.67 9590.25
10/31/85 9969.64 10033.32
11/30/85 10737.77 10721.61
12/31/85 11224.39 11240.54
01/31/86 11324.93 11303.48
02/28/86 12276.50 12148.98
03/31/86 12990.44 12826.90
04/30/86 12975.87 12681.95
05/31/86 13706.47 13356.63
06/30/86 14079.05 13582.36
07/31/86 13277.69 12823.10
08/31/86 14023.24 13774.58
09/30/86 12691.31 12635.42
10/31/86 13416.29 13364.49
11/30/86 13791.42 13689.24
12/31/86 13550.37 13340.17
01/31/87 15399.13 15137.09
02/28/87 16244.68 15735.00
03/31/87 16521.81 16189.74
04/30/87 16161.72 16045.65
05/31/87 16322.99 16185.25
06/30/87 17195.58 17002.61
07/31/87 18037.24 17864.64
08/31/87 18608.09 18530.99
09/30/87 18175.14 18125.16
10/31/87 14403.53 14221.00
11/30/87 13249.73 13049.19
12/31/87 14237.01 14042.23
01/31/88 14759.31 14633.41
02/29/88 15547.47 15315.33
03/31/88 15050.69 14842.09
04/30/88 15089.79 15006.83
05/31/88 15082.89 15137.39
06/30/88 15610.80 15832.20
07/31/88 15454.74 15772.04
08/31/88 15177.56 15235.79
09/30/88 15755.22 15884.83
10/31/88 16449.34 16326.43
11/30/88 16307.26 16092.96
12/31/88 16570.25 16374.59
01/31/89 17545.25 17573.21
02/28/89 17215.51 17135.64
03/31/89 17627.16 17534.90
04/30/89 18575.37 18444.96
05/31/89 19261.14 19191.98
06/30/89 19176.50 19082.58
07/31/89 20929.38 20805.74
08/31/89 21054.58 21213.53
09/30/89 20914.35 21126.56
10/31/89 20586.31 20636.42
11/30/89 21127.20 21057.41
12/31/89 21464.47 21562.78
01/31/90 20051.70 20115.92
02/28/90 20222.95 20375.42
03/31/90 20763.44 20915.36
04/30/90 20346.03 20392.48
05/31/90 22604.32 22380.75
06/30/90 22647.70 22228.56
07/31/90 22496.04 22157.43
08/31/90 20611.22 20154.40
09/30/90 19652.56 19172.88
10/31/90 19498.20 19090.43
11/30/90 20730.37 20323.68
12/31/90 21359.37 20890.71
01/31/91 22062.35 21801.54
02/28/91 23687.64 23360.35
03/31/91 24325.95 23925.67
04/30/91 24244.40 23983.09
05/31/91 25301.68 25019.16
06/30/91 24067.75 23873.28
07/31/91 25296.60 24985.78
08/31/91 25837.06 25577.94
09/30/91 25344.95 25150.79
10/31/91 25831.37 25487.81
11/30/91 25023.52 24460.65
12/31/91 28069.79 27258.95
01/31/92 27456.45 26751.94
02/29/92 27937.33 27099.71
03/31/92 27401.74 26571.27
04/30/92 27914.30 27352.46
05/31/92 28084.19 27486.49
06/30/92 27376.07 27076.94
07/31/92 28653.77 28184.39
08/31/92 28272.50 27606.61
09/30/92 28388.92 27932.36
10/31/92 28645.04 28030.13
11/30/92 29518.19 28985.95
12/31/92 29384.74 29342.48
01/31/93 29156.01 29588.96
02/28/93 29245.13 29991.37
03/31/93 29916.47 30624.19
04/30/93 29331.27 29883.08
05/31/93 30076.88 30683.95
06/30/93 30096.41 30772.93
07/31/93 29537.79 30649.84
08/31/93 30615.99 31811.47
09/30/93 30360.70 31566.52
10/31/93 31270.71 32219.95
11/30/93 30838.23 31913.86
12/31/93 31306.62 32300.02
01/31/94 31812.06 33398.22
02/28/94 31067.63 32493.12
03/31/94 29795.62 31076.42
04/30/94 30298.29 31474.20
05/31/94 30800.96 31990.38
06/30/94 30021.80 31206.62
07/31/94 30970.05 32230.19
08/31/94 32305.66 33551.63
09/30/94 31995.77 32729.61
10/31/94 32838.67 33466.03
11/30/94 32256.08 32247.20
12/31/94 32764.65 32725.42
01/31/95 33954.41 33573.99
02/28/95 35118.38 34882.37
03/31/95 35711.63 35911.75
04/30/95 36855.98 36969.35
05/31/95 38233.74 38447.02
06/30/95 39043.78 39340.14
$10,000 OVER 10 YEARS: Let's
say you invested $10,000 in Fidelity Exchange Fund on June 30, 1985. As the
chart shows, by June 30, 1995, the value of your investment would have
grown to $39,044 - a 290.44% increase on your initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$39,340 - a 293.40% 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
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
A Message from Jonathan F. Weed, Portfolio Manager of Fidelity
Exchange Fund
Dear Exchange Fund Shareholder:
The past six months have been rewarding for investors in the U.S. stock
markets, and for the fund's shareholders in particular. For the six months
ended June 30, 1995, the fund had a total return of 19.16%. That slightly
trailed the 20.21% total return of the Standard & Poor's 500 stock index
during the same period. The fund outperformed the average growth and income
fund tracked by Lipper Analytical Services, which returned 16.75% during
the six-month period. For the 12 months ended June 30, the fund rose
30.05%, the S&P 500 was up 26.07%, and the average growth and income fund
gained 19.74%.
Many factors have fueled the market's rise to record high levels since the
beginning of 1995. Perhaps the most important has been superior corporate
earnings. Traditionally, stock prices tend to follow earnings over time,
and scores of U.S. companies have consistently beaten analysts' earnings
estimates in recent months. Of course, the growth in the economy through
the end of 1994 helped. In addition, effective cost-cutting measures
undertaken by many companies in recent years have made their way to the
bottom line in 1995.
This year's improving interest rate environment also has boosted stocks. By
the end of 1994, many investors were beginning to believe that the Federal
Reserve Board was nearing the end of its short-term interest rate hikes. In
fact, the Fed raised rates only once in early 1995. As winter moved into
spring, long-term interest rates progressively fell and the economy began
to show signs of deterioration. Because controlling future inflation had
been the primary goal of the Fed rate hikes, investors responded positively
to the economic slowdown. And, as it turned out, the Fed reacted to the
economic weakness by lowering short-term rates a few days after this
reporting period ended.
Interestingly, only about 12% of all stock mutual funds tracked by Lipper
have topped the performance of the S&P 500 during the first six months of
1995. The fact that the fund's returns have run nearly neck-and-neck with
the S&P 500's during that time is no coincidence. Both the fund and the
index feature well-known, large-cap stocks. And these are the stocks that
have led this recent market rally. Near the end of 1994 and into 1995,
investors began to gravitate toward large U.S. companies that had
traditionally offered steady earnings growth in the face of higher interest
rates. In addition, the weak U.S. dollar enhanced the earnings generated by
these companies' significant overseas operations when converted back into
U.S. dollars. That served to further boost overall profitability.
Examples of solid performance by these large-cap stocks cross a number of
market sectors. Among those stocks that made the most significant positive
contributions to the fund's performance were such household names as
McDonald's (up 34% during the six-month period), Disney (up 20%), Coca-Cola
(up 23%) and Gillette (up 19%). As a group, the fund's largest sector -
health care at about 18% of investments - turned in consistently good
performance. Pharmaceutical companies such as Schering-Plough and American
Home Products, and medical equipment companies such as Johnson & Johnson
and Abbott Labs, generally rebounded from depressed levels and showed
impressive earnings growth.
No doubt, the most explosive earnings growth of the past six months
belonged to the technology sector, which comprises several different
industries. Although the fund is underweighted relative to the broad market
in technology, the sector was a key contributor to the fund's total return.
Corporations around the world have continued their relentless commitment to
technology, and the greater efficiency it provides in the workplace. That
has maintained strong demand for personal computers and related products.
In fact, Hewlett-Packard - which manufactures computers, calculators,
printers and more - had the largest positive influence on the fund's total
return over both the trailing six-month and one-year periods. Its stock
price rose 49% during the six-month period. To a lesser but still
significant degree, IBM (up 30%) and Motorola (up 16%) also boosted
returns.
As far as disappointments are concerned, they are mostly relative in a
period such as we've seen. Generally, retail stocks were among the market's
poorest performers. Competition remains fierce as there continues to be too
much capacity - or stores - for the number of available consumers. Edison
Brothers Stores was a casualty of this tough environment. The footwear and
apparel retailer cut its stock dividend for the first time in 40 years, and
investors reacted by heavily selling the stock. The other disappointing
stories were spread among a number of industries. One example is General
Mills. The company experienced rising internal costs at the same time that
increased competition led General Mills to cut the prices of its cereals.
This led to disappointing earnings which caused the stock to suffer.
Will the stock market continue its upward trend through the end of the
year? As always, that's impossible to predict. Any time the market rises
this quickly it beckons caution. Stock valuations - prices relative to
other measures such as earnings - are higher than they were six months ago.
And there do appear to be some risks in this market. It's still uncertain
whether this recent economic slowdown is a harbinger of recession, or
merely a pause on the way to steady, albeit slower, growth. The key for
stocks will be the effect of this slower economy on corporate earnings. I'm
concerned that many companies may not be able to keep up the strong pace of
profit growth they've established thus far in 1995. It's shaping up to be
an interesting next six months.
Sincerely,
Jonathan F. Weed
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JUNE 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Hewlett-Packard Co. 4.0 3.1
Johnson & Johnson 3.3 3.0
Disney (Walt) Co. 3.0 2.8
McDonald's Corp. 3.0 2.6
Schering-Plough Corp. 2.9 2.7
Gillette Co. 2.9 2.7
American Home Products Corp. 2.7 2.4
General Electric Co. 2.6 2.7
Motorola, Inc. 2.6 2.5
Coca-Cola Company (The) 2.3 2.8
TOP FIVE MARKET SECTORS AS OF JUNE 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Health 17.9 17.1
Nondurables 16.5 17.3
Media & Leisure 13.7 13.0
Energy 9.3 9.2
Technology 8.1 6.9
ASSET ALLOCATION
AS OF JUNE 30, 1995 AS OF DECEMBER 31, 1994
Row: 1, Col: 1, Value: 4.2
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 4, Value: 45.8
Row: 1, Col: 1, Value: 7.6
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 4, Value: 42.3
Stocks 95.8%
Bonds 0.0%
Short-term
investments 4.2%
Stocks 92.3%
Bonds 0.1%
Short-term
investments 7.6%
INVESTMENTS JUNE 30, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.5%
DEFENSE ELECTRONICS - 1.5%
Raytheon Co. 40,000 $ 3,105,000
BASIC INDUSTRIES - 3.3%
CHEMICALS & PLASTICS - 3.3%
Air Products & Chemicals, Inc. 47,634 2,655,596
Cabot Corp. 47,900 2,526,725
Minnesota Mining & Manufacturing Co. 30,000 1,717,500
6,899,821
CONGLOMERATES - 0.5%
United Technologies Corp. 13,686 1,069,219
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES - 1.8%
Dana Corp. 80,670 2,309,179
General Motors Corp. 30,000 1,406,250
3,715,429
CONSUMER ELECTRONICS - 0.2%
Stanley Works 14,374 544,415
TOTAL DURABLES 4,259,844
ENERGY - 9.3%
ENERGY SERVICES - 2.1%
Dresser Industries, Inc. 40,000 890,000
Halliburton Co. 50,700 1,812,525
Schlumberger Ltd. 26,919 1,672,343
4,374,868
OIL & GAS - 7.2%
Amoco Corp. 40,000 2,665,000
Chevron Corp. 60,000 2,797,500
Exxon Corp. 47,900 3,382,938
Kerr-McGee Corp. 13,480 722,865
Mobil Corp. 40,000 3,840,000
Royal Dutch Petroleum Co. 15,000 1,828,125
15,236,428
TOTAL ENERGY 19,611,296
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 5.3%
BANKS - 1.3%
Bankers Trust New York Corp. 17,700 $ 1,097,400
CoreStates Financial Corp. 43,800 1,527,525
2,624,925
CREDIT & OTHER FINANCE - 1.6%
American Express Co. 94,788 3,329,429
INSURANCE - 2.2%
General Re Corp. 23,360 3,127,320
Torchmark Corp. 41,616 1,571,004
4,698,324
SECURITIES INDUSTRY - 0.2%
Lehman Brothers Holdings, Inc. 18,357 401,559
TOTAL FINANCE 11,054,237
HEALTH - 17.9%
DRUGS & PHARMACEUTICALS - 11.6%
American Home Products Corp. 73,767 5,707,722
Bristol-Myers Squibb Co. 60,584 4,127,285
Lilly (Eli) & Co. 26,252 2,060,782
Merck & Co., Inc. 33,619 1,647,331
Pfizer, Inc. 100,000 4,618,750
Schering-Plough Corp. 140,040 6,179,265
24,341,135
MEDICAL EQUIPMENT & SUPPLIES - 6.3%
Abbott Laboratories 110,216 4,463,748
Becton Dickinson & Co. 32,000 1,864,000
Johnson & Johnson 103,370 6,990,396
13,318,144
TOTAL HEALTH 37,659,279
INDUSTRIAL MACHINERY & EQUIPMENT - 6.0%
ELECTRICAL EQUIPMENT - 3.4%
General Electric Co. 98,534 5,554,854
General Signal Corp. 40,000 1,590,000
7,144,854
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
Parker-Hannifin Corp. 113,905 $ 4,129,056
POLLUTION CONTROL - 0.7%
WMX Technologies, Inc. 50,000 1,418,750
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 12,692,660
MEDIA & LEISURE - 13.5%
BROADCASTING - 1.7%
Capital Cities/ABC, Inc. 20,000 2,097,500
Cox Communications, Inc. Class A (a) 37,488 726,330
Viacom, Inc. Class B (non-vtg.) (a) 15,283 708,749
3,532,579
ENTERTAINMENT - 3.0%
Disney (Walt) Co. 113,454 6,310,879
PUBLISHING - 5.5%
Gannett Co., Inc. 55,214 2,995,360
Harcourt General, Inc. 40,000 1,700,000
Knight-Ridder, Inc. 32,200 1,831,375
McGraw-Hill, Inc. 34,756 2,637,112
Media General, Inc. Class A 34,382 1,048,651
Times Mirror Co. Class A 55,902 1,334,660
11,547,158
RESTAURANTS - 3.3%
Darden Restaurants, Inc. 50,000 543,750
Dave & Busters, Inc. 4,900 97,388
McDonald's Corp. 159,480 6,239,655
6,880,793
TOTAL MEDIA & LEISURE 28,271,409
NONDURABLES - 16.5%
BEVERAGES - 3.8%
Anheuser-Busch Companies, Inc. 57,067 3,245,686
Coca-Cola Company (The) 75,589 4,818,799
8,064,485
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - 3.6%
General Mills, Inc. 50,000 $ 2,568,750
Ralston Purina Co. 35,298 1,800,198
Sara Lee Corp. 111,000 3,163,500
7,532,448
HOUSEHOLD PRODUCTS - 7.5%
Colgate-Palmolive Co. 60,000 4,387,500
Gillette Co. 134,344 5,995,101
International Flavors & Fragrances, Inc. 22,447 1,116,738
Procter & Gamble Co. 59,300 4,262,188
15,761,527
TOBACCO - 1.6%
Philip Morris Companies, Inc. 44,150 3,283,656
TOTAL NONDURABLES 34,642,116
RETAIL & WHOLESALE - 3.4%
APPAREL STORES - 0.1%
Edison Brothers Stores, Inc. 24,500 294,000
GENERAL MERCHANDISE STORES - 2.2%
K mart Corp. 80,678 1,179,916
May Department Stores Co. (The) 82,126 3,418,495
4,598,411
GROCERY STORES - 1.1%
Supervalu, Inc. 76,080 2,215,830
TOTAL RETAIL & WHOLESALE 7,108,241
SERVICES - 1.4%
PRINTING - 1.1%
Harland (John H.) Co. 100,000 2,287,500
SERVICES - 0.3%
Jostens, Inc. 33,307 707,774
TOTAL SERVICES 2,995,274
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 8.1%
COMPUTERS & OFFICE EQUIPMENT - 4.5%
Hewlett-Packard Co. 114,184 $ 8,506,708
International Business Machines Corp. 9,097 873,312
9,380,020
ELECTRONICS - 2.6%
Motorola, Inc. 81,906 5,497,940
PHOTOGRAPHIC EQUIPMENT - 1.0%
Eastman Kodak Co. 36,242 2,197,171
TOTAL TECHNOLOGY 17,075,131
TRANSPORTATION - 0.5%
RAILROADS - 0.5%
Union Pacific Corp. 19,090 1,057,106
UTILITIES - 6.4%
ELECTRIC UTILITY - 4.2%
Central Louisiana Electric Co., Inc. 60,000 1,410,000
Duke Power Co. 50,000 2,075,000
Hawaiian Electric Industries, Inc. 40,000 1,455,000
PacifiCorp. 55,400 1,038,750
Potomac Electric Power Co. 70,000 1,505,000
SCEcorp 80,000 1,370,000
8,853,750
GAS - 0.5%
Williams Companies, Inc. 30,680 1,069,965
TELEPHONE SERVICES - 1.7%
MCI Communications Corp. 80,000 1,760,000
Sprint Corp. 50,000 1,681,250
3,441,250
TOTAL UTILITIES 13,364,965
TOTAL COMMON STOCKS
(Cost $24,348,075) 200,865,598
CONVERTIBLE PREFERRED STOCKS - 0.2%
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 0.2%
PUBLISHING - 0.2%
Times Mirror Co. Series B $1.374 (Cost $1,786) 18,879 $ 450,736
REPURCHASE AGREEMENTS - 4.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 6.15%,
dated 6/30/95 due 7/3/95 $ 8,853,535 8,849,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $33,198,861) $ 210,165,334
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At June 30, 1995, the aggregate cost of investment securities for income
tax purposes was $33,198,861. Net unrealized appreciation aggregated
$176,966,473, of which $181,609,367 related to appreciated investment
securities and $4,642,894 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 210,165,334
agreements of $8,849,000) (cost $33,198,861) -
See accompanying schedule
Cash 571
Dividends receivable 351,168
TOTAL ASSETS 210,517,073
LIABILITIES
Payable for fund shares redeemed $ 3,000
Accrued management fee 94,164
Other payables and accrued expenses 33,189
TOTAL LIABILITIES 130,353
NET ASSETS $ 210,386,720
Net Assets consist of:
Paid in capital $ 28,258,818
Undistributed net investment income 7,198
Accumulated undistributed net realized gain (loss) 5,154,231
on investments
Net unrealized appreciation (depreciation) on 176,966,473
investments
NET ASSETS, for 1,764,611 shares outstanding $ 210,386,720
NET ASSET VALUE, offering price and redemption price per $119.23
share ($210,386,720 (divided by) 1,764,611 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,443,086
Dividends
Interest 297,670
TOTAL INCOME 2,740,756
EXPENSES
Management fee $ 530,562
Transfer agent fees 67,799
Accounting fees and expenses 427
Non-interested trustees' compensation 3,503
Custodian fees and expenses 6,259
Registration fees 125
Audit 9,526
Legal 347
Miscellaneous 2,252
TOTAL EXPENSES 620,800
NET INVESTMENT INCOME 2,119,956
REALIZED AND UNREALIZED GAIN (LOSS) 5,166,500
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on 27,012,039
investment securities
NET GAIN (LOSS) 32,178,539
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 34,298,495
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,119,956 $ 4,615,407
Net investment income
Net realized gain (loss) 5,166,500 11,556,177
Change in net unrealized appreciation (depreciation) 27,012,039 (7,788,111)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 34,298,495 8,383,473
FROM OPERATIONS
Distributions to shareholders (2,112,758) (4,356,411)
From net investment income
From net realized gain (3,033,709) (3,128,466)
TOTAL DISTRIBUTIONS (5,146,467) (7,484,877)
Share transactions 1,487,315 1,974,773
Reinvestment of distributions
Cost of shares redeemed (5,851,469) (6,632,358)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (4,364,154) (4,657,585)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 24,787,874 (3,758,989)
NET ASSETS
Beginning of period 185,598,846 189,357,835
End of period (including undistributed net investment $ 210,386,720 $ 185,598,846
income of $7,198 and $0, respectively)
OTHER INFORMATION
Shares
Issued in reinvestment of distributions 13,623 19,403
Redeemed (55,828) (65,474)
Net increase (decrease) (42,205) (46,071)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30, 1995
(UNAUDITED) 1994 1993 C 1992 1991 1990
SELECTED PER-SHARE DATA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $ 102.72 $ 102.20 $ 98.92 $ 97.48 $ 75.96 $ 80.22
beginning of period
Income from Investment 1.20 2.56 2.26 2.19 2.13 2.16
Operations
Net investment
income
Net realized and 18.23 2.12 4.14 2.34 21.49 (2.52)
unrealized gain
(loss)
Total from investment 19.43 4.68 6.40 4.53 23.62 (.36)
operations
Less Distributions (1.20) (2.42) (2.26) (2.23) (2.10) (2.20)
From net investment
income
In excess of net - - (.09) - - -
investment income
From net realized gain (1.72) (1.74) (.77) (.86) - (1.70)
Total distributions (2.92) (4.16) (3.12) (3.09) (2.10) (3.90)
Net asset value, end $ 119.23 $ 102.72 $ 102.20 $ 98.92 $ 97.48 $ 75.96
of period
TOTAL RETURN B 19.16% 4.66% 6.54% 4.68% 31.42% (.49)
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 210,387 $ 185,599 $ 189,358 $ 186,886 $ 187,876 $ 150,050
(000 omitted)
Ratio of expenses to .63% .58% .57% .58% .58% .56%
average net assets A
Ratio of net investment 2.16% 2.50% 2.24% 2.23% 2.42% 2.72%
income to average A
net assets
Portfolio turnover rate 0% 0% 0% 0% 0% 0%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Exchange Fund (the fund) 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 and is
authorized to issue 10 million shares. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
redemptions in kind.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income (loss) 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.
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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. FMR, the fund's
investment adviser, is responsible for determining that the value of these
underlying securities remains at least equal to the resale price.
2. PURCHASES AND SALES
OF INVESTMENTS.
Sales of securities, other than short-term securities, aggregated
$5,636,817, which represents the current value of securities delivered in
redemption of fund shares. There were no purchases of securities during the
period.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee at a
rate of 1/20 of 1% per month (which is equivalent to an annual rate of 6/10
of 1%) of the fund's average net assets determined as of the close of
business on each business day throughout the month. In addition, under the
Management Contract, FMR provides portfolio accounting and bookkeeping
services to the fund and determines the net asset value per share of the
fund. The management fee is subject to a reduction to the extent that the
monthly average net assets of all mutual funds advised by FMR exceed $4
billion in any month. The management fee payable by the fund on its portion
of the excess is reduced by 10%. For the period, the management fee was
reduced by $58,065. For the period, the management fee was equivalent to an
annualized rate of .54% of average net assets.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
Effective January 1, 1995, the Board of Trustees approved a revised
transfer agent contract pursuant to which FSC receives account fees and
asset-based fees that vary according to account size and type of account.
Under the prior transfer agent contract, FSC received fees based on the
type, size, number of accounts and the number of transactions made by
shareholders. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Stephen P. Jonas, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Congress Street Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Exchange Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Income Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
