SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO. 2-69972)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 47 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. [ ]
Fidelity Select Portfolios
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617) 570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
( ) Immediately upon filing pursuant to paragraph (b) of Rule 485
( ) On () pursuant to paragraph (b) of Rule 485
( ) 60 days after filing pursuant to paragraph (a) of Rule 485
(x ) On April 30, 1994 pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such on or Rule before April 30, 1994.
FIDELITY SELECT PORTFOLIOS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
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1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
Performance
c....................................
4a Charter
i.................................
The Funds at a Glance; Investment Principles and
ii............................... Risks; Securities & Investment Practices
Securities & Investment Practices
b...................................
.
Who May Want to Invest; Investment Principles;
c.................................... Securities & Investment Practices
5a.................................. Charter
..
b Doing Business with Fidelity; Charter
i.................................
Charter
ii................................
Expenses; Breakdown of Expenses
iii................................
c, Charter; FMR and Its Affiliates; Breakdown of
d................................ Expenses
Cover Page; FMR and Its Affiliates
e....................................
Expenses
f....................................
5A Performance
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
*
iii...............................
*
b...................................
.
Exchange Restrictions
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
How to Buy Shares; Transaction Details
b...................................
.
Sales Charge Reductions and Waivers
c....................................
How to Buy Shares
d...................................
.
e, *
f................................
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY SELECT PORTFOLIOS
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
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10.................................. Cover Page
..
11.................................. Cover Page
..
12.................................. *
..
13a - Investment Policies and Limitations
c............................
Portfolio Transactions
d..................................
14a - Trustees and Officers
c............................
15a, *
b..............................
Trustees and Officers
c..................................
16a FMR
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with Companies Affiliated with FMR
d.............................
e - *
g...........................
Description of the Fund
h.................................
Contracts with Companies Affiliated with FMR
i.................................
17a - Portfolio Transactions
d............................
*
e.................................
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b..............................
*
c.................................
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
A Statement of Additional Information dated April __ 1994 has been filed
with the Securities and Exchange Commission, and is incorporated herein by
reference (is legally considered a part of this prospectus). The Statement
of Additional Information is available free upon request by calling
Fidelity at 1-800-544-8888.
Investments in the money market fund are neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the fund will
maintain a stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or endorsed or
guaranteed by, any bank, savings association, insured depositary
institution, or government agency, nor are they federally insured or
otherwise protected by the FDIC, the Federal Reserve Board, or any other
agency. Investments in the funds involve investment risk, including
possible loss of principal. The value of the investment and its return will
fluctuate and are not guaranteed. When sold, the value of the investment
may be higher or lower than the amount originally invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
SEL-pro-494
Each stock fund seeks to increase the value of your investment over the
long-term by investing mainly in equity securities of
companies within a particular industry.
FIDELITY
SELECT
PORTFOLIOS(Registered trademark)
The money market fund seeks high current income while maintaining a stable
$1.00 share price .
AIR TRANSPORTATION PORTFOLIO
AMERICAN GOLD PORTFOLIO
AUTOMOTIVE PORTFOLIO
BIOTECHNOLOGY PORTFOLIO
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
CHEMICALS PORTFOLIO
COMPUTERS PORTFOLIO
CONSTRUCTION AND HOUSING PORTFOLIO
CONSUMER PRODUCTS PORTFOLIO
DEFENSE AND AEROSPACE PORTFOLIO
DEVELOPING COMMUNICATIONS PORTFOLIO
ELECTRONICS PORTFOLIO
ENERGY PORTFOLIO
ENERGY SERVICE PORTFOLIO
ENVIRONMENTAL SERVICES PORTFOLIO
FINANCIAL SERVICES PORTFOLIO
FOOD AND AGRICULTURE PORTFOLIO
HEALTH CARE PORTFOLIO
HOME FINANCE PORTFOLIO
INDUSTRIAL EQUIPMENT PORTFOLIO
INDUSTRIAL MATERIALS PORTFOLIO
INSURANCE PORTFOLIO
LEISURE PORTFOLIO
MEDICAL DELIVERY PORTFOLIO
MULTIMEDIA PORTFOLIO
NATURAL GAS PORTFOLIO
PAPER AND FOREST PRODUCTS PORTFOLIO
PRECIOUS METALS AND MINERALS PORTFOLIO
REGIONAL BANKS PORTFOLIO
RETAILING PORTFOLIO
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
TECHNOLOGY PORTFOLIO
TELECOMMUNICATIONS PORTFOLIO
TRANSPORTATION PORTFOLIO
UTILITIES PORTFOLIO
MONEY MARKET PORTFOLIO
PROSPECTUS
APRIL __, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
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KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales charge (load) and
its yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE How each fund has done over
time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up
your account, including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out of and
closing your account.
INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
</TABLE>
KEY FACTS
THE FUNDS AT A GLANCE
STOCK FUNDS' GOAL: Capital appreciation (increase in the value of a fund's
shares). As with any mutual fund, there is no assurance that a fund will
achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager. FMR Texas, Inc. (FTX), a
subsidiary of FMR, chooses investments for the money market fund.
AIR TRANSPORTATION
STRATEGY: Invests mainly in equity securities of companies engaged in the
regional, national, and international movement of passengers, mail, and
freight via aircraft.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
AMERICAN GOLD
STRATEGY: Invests mainly in equity securities of companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals, and may also invest directly in gold.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
AUTOMOTIVE
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture, marketing, or sale of automobiles, trucks, specialty vehicles,
parts, tires, and related services.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
BIOTECHNOLOGY
STRATEGY: Invests mainly in equity securities of companies engaged in the
research, development, scale up, and manufacture of various
biotechnological products, services, and processes.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
BROKERAGE AND INVESTMENT MANAGEMENT
STRATEGY: Invests mainly in equity securities of companies engaged in stock
brokerage, commodity brokerage, investment banking, tax-advantaged
investment or investment sales, investment management, or related
investment advisory services.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
CHEMICALS
STRATEGY: Invests mainly in equity securities of companies engaged in the
research, development, manufacture or marketing of products or services
related to the chemical process industries.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
COMPUTERS
STRATEGY: Invests mainly in equity securities of companies engaged in
research, design, development, manufacture, or distribution of products,
processes, or services that relate to currently available or experimental
hardware technology within the computer industry.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
CONSTRUCTION AND HOUSING
STRATEGY: Invests mainly in equity securities of companies engaged in the
design and construction of residential, commercial, industrial, and public
works facilities, as well as companies engaged in the manufacture, supply,
distribution, or sale of products or services to these construction
industries.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
CONSUMERS PRODUCTS
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture and distribution of goods to consumers, both domestically and
internationally.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
DEFENSE AND AEROSPACE
STRATEGY: Invests mainly in equity securities of companies engaged in the
research, manufacture, or sale of products or services related to the
defense or aerospace industries.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
DEVELOPING COMMUNICATIONS
STRATEGY: Invests mainly in equity securities of companies engaged in the
development, manufacture, or sale of emerging communications services or
equipment.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
ELECTRONICS
STRATEGY: Invests mainly in equity securities of companies engaged in the
design, manufacture, or sale of electronic components; equipment vendors to
electronic component manufacturers, electronic component distributors, and
electronic instruments and electronics systems vendors.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
ENERGY
STRATEGY: Invests mainly in equity securities of companies in the energy
field, including the conventional areas of oil, gas, electricity, and coal,
and newer sources of energy such as nuclear, geothermal, oil shale, and
solar power.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
ENERGY SERVICE
STRATEGY: Invests mainly in equity securities of companies in the energy
service field, including those that provide services and equipment to the
conventional areas of oil, gas, electricity, and coal, and newer sources of
energy such as nuclear, geothermal, oil shale and solar power.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
ENVIRONMENTAL SERVICES
STRATEGY: Invests mainly in equity securities of companies engaged in the
research, development, manufacture, or distribution of products, processes,
or services related to waste management or pollution control.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
FINANCIAL SERVICES
STRATEGY: Invests mainly in equity securities of companies providing
financial services to consumers and industry.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
FOOD AND AGRICULTURE
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture, sale, or distribution of food and beverage products,
agricultural products, and products related to the development of new food
technologies.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
HEALTH CARE
STRATEGY: Invests mainly in equity securities of companies engaged in the
design, manufacture, or sale of products or services used for or in
connection with health care or medicine.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
HOME FINANCE
STRATEGY: Invests mainly in equity securities of companies engaged in
investing in real estate, usually through mortgages and other
consumer-related loans.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
INDUSTRIAL EQUIPMENT
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture, distribution, or service of products and equipment for the
industrial sector, including integrated producers of capital equipment,
parts suppliers and subcontractors.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
INDUSTRIAL MATERIALS
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture, mining, processing, or distribution of raw materials and
intermediate goods used in the industrial sector.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
INSURANCE
STRATEGY: Invests mainly in equity securities of companies engaged in
underwriting, reinsuring, selling, distributing, or placing of property and
casualty, life, or health insurance.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
LEISURE
STRATEGY: Invests mainly in equity securities of companies engaged in the
design, production, or distribution of goods or services in the leisure
industries.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
MEDICAL DELIVERY
STRATEGY: Invests mainly in equity securities of companies engaged in the
ownership or management of hospitals, nursing homes, health maintenance
organizations, and other companies specializing in the delivery of health
care services.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
MULTIMEDIA (FORMERLY BROADCAST AND MEDIA)
STRATEGY: Invests mainly in equity securities of companies engaged in the
development, production, sale, and distribution of goods or services used
in the broadcast and media industries.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
NATURAL GAS
STRATEGY: Invests mainly in equity securities of companies engaged in the
production, transmission, and distribution of natural gas, and involved in
the exploration of potential natural gas sources, as well as those
companies that provide services and equipment to natural gas producers,
refineries, cogeneration facilities, converters, and distributors.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
PAPER AND FOREST PRODUCTS
STRATEGY: Invests mainly in equity securities of companies engaged in the
manufacture, research, sale, or distribution of paper products, packaging
products, building materials, and other products related to the paper and
forest products industry.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
PRECIOUS METALS AND MINERALS
STRATEGY: Invests mainly in equity securities of companies engaged in
exploration, mining, processing, or dealing in gold, silver, platinum,
diamonds, or other precious metals and minerals, and may also invest
directly in precious metals.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
REGIONAL BANKS
STRATEGY: Invests mainly in equity securities of companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
RETAILING
STRATEGY: Invests mainly in equity securities of companies engaged in
merchandising finished goods and services primarily to individual
consumers.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
SOFTWARE AND COMPUTER SERVICES
STRATEGY: Invests mainly in equity securities of companies engaged in
research, design, production, or distribution of products or processes that
relate to software or information-based services.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
TECHNOLOGY
STRATEGY: Invests mainly in equity securities of companies which FMR
believes have, or will develop, products, processes, or services that will
provide or will benefit significantly from technological advances and
improvements.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
TELECOMMUNICATIONS
STRATEGY: Invests mainly in equity securities of companies engaged in the
development, manufacture, or sale of communications services or
communications equipment.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
TRANSPORTATION
STRATEGY: Invests mainly in equity securities of companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
UTILITIES
STRATEGY: Invests mainly in equity securities of companies in the public
utilities industry and companies deriving a majority of their revenues from
their public utility operations.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
MONEY MARKET
GOAL: Income while maintaining a stable share price.
STRATEGY: Invests in high-quality, short-term instruments of all types.
SIZE: As of February 28, 1994, the fund had over $000 million in assets.
WHO MAY WANT TO INVEST
The stock funds may be appropriate for investors who want to pursue growth
aggressively by concentrating their investment on domestic and foreign
securities within an industry or group of industries. The funds are
designed for those who are interested in actively monitoring the progress
of, and can accept the risks of, industry-focused investing. Because the
funds are so narrowly focused, changes in a particular industry can have a
substantial impact on a fund's share price. Also, because most of the funds
are non-diversified, changes in the value of one company's securities can
significantly affect a fund's performance.
The money market fund may be appropriate for investors who would like to
earn income at current money market rates while preserving the value of
their investment. The fund is managed to keep its share price stable at
$1.00. The money market fund is designed for use in connection with
exchanges between the stock funds. Since this money market fund is sold
with a sales charge, it is not recommended that you invest in the money
market fund unless you intend to use it for that purpose.
By themselves, these funds do not constitute a balanced investment plan.
The value of the stock funds' investments will vary from day to day,
generally reflecting changes in market and industry conditions, interest
rates, and other political and economic news. When you sell your stock fund
shares, they may be worth more or less than what you paid for them. The
rate of income for the money market fund will vary from day to day
generally reflecting short-term interest rates.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund. See pages xx and xx for an explanation of how and when
these charges apply. Lower sales charges may be available for accounts over
$250,000.
Maximum sales charge on purchases (as a % of offering price) 3.00%
Maximum sales charge on
reinvested dividends None
Deferred sales charge on redemptions None
Exchange fee $7.50
Redemption fees
on shares held 29 days or less (as a % of redemption amount) 0.75%
on shares held 30 days or more $7.50
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays management fees to FMR. Each fund also incurs other expenses for
services such as maintaining shareholder statements and fund reports.
Expenses are factored into each fund's share price or dividends and are not
charged directly to shareholder accounts (see page xx).
The operating expenses are projections based on historical expenses, and
are calculated as a percentage of average net assets. A portion of the
brokerage commissions that the funds paid may have been used to reduce fund
expenses. This would make the actual expenses higher than they appear in
the table.
EXAMPLES. Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as described. For every $1,000
you invested, the examples show how much you would have paid in total
expenses if you closed your account after the number of years indicated.
The examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
Operating expenses Examples
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AIR TRANSPORTATION Management fee (after 0.00 After 1 year $00
reimbursement) %A
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
AMERICAN GOLD Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
AUTOMOTIVE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
BIOTECHNOLOGY Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
BROKERAGE AND INVESTMENT MANAGEMENT Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
</TABLE>
A FMR REDUCED OR REIMBURSED THESE MANAGEMENT FEES OR OTHER EXPENSES AS A
RESULT OF EITHER A VOLUNTARY EXPENSE REIMBURSEMENT OR A STATE REGULATION.
EXPENSES ELIGIBLE FOR REDUCTION OR REIMBURSEMENT DO NOT INCLUDE INTEREST,
TAXES, BROKERAGE COMMISSIONS, OR EXTRAORDINARY EXPENSES. IF NOT FOR THE
REDUCTION OR REIMBURSEMENT, THE FUNDS' MANAGEMENT FEES, OTHER EXPENSES, AND
TOTAL OPERATING EXPENSES, RESPECTIVELY, WOULD BE: ____.
Operating expenses Examples
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CHEMICALS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
COMPUTERS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
CONSTRUCTION AND HOUSING Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
CONSUMER PRODUCTS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
DEFENSE AND AEROSPACE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
DEVELOPING COMMUNICATIONS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
ELECTRONICS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
ENERGY Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
</TABLE>
Operating expenses Examples
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ENERGY SERVICE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
ENVIRONMENTAL SERVICES Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
FINANCIAL SERVICES Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
FOOD AND AGRICULTURE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
HEALTH CARE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
HOME FINANCE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
INDUSTRIAL EQUIPMENT Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
INDUSTRIAL MATERIALS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
</TABLE>
Operating expenses Examples
<TABLE>
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<S> <C> <C> <C> <C>
INSURANCE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
LEISURE Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
MEDICAL DELIVERY Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
MULTIMEDIA Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
NATURAL GAS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
PAPER AND FOREST PRODUCTS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
PRECIOUS METALS AND MINERALS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
REGIONAL BANKS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
</TABLE>
Operating expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
RETAILING Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
SOFTWARE AND COMPUTER SERVICES Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
TECHNOLOGY Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
TELECOMMUNICATIONS Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
TRANSPORTATION Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
UTILITIES Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
MONEY MARKET Management fee 0.00 After 1 year $00
%
12b-1 fee None After 3 years $00
Other expenses 0.00 After 5 years $00
%
Total fund operating 0.00 After 10 $000
expenses % years
</TABLE>
FINANCIAL HIGHLIGHTS.
The charts that follow provide financial histories for all the funds. This
information has been audited by Price Waterhouse, independent accountants.
Their unqualified reports are included in the funds' Annual Report. The
Annual Report is incorporated by reference into (is legally a part of) the
Statement of Additional Information.
This information will be updated by subsequent amendment
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns in this section are based on historical fund results and do not
reflect the effect of of taxes.
The tables on pages 13 and 14 show the funds' performance over past fiscal
years compared to two measures: investment in a broad selection of stocks
(S&P 500), and not investing at all (inflation, or CPI). To help you
compare the funds to other funds, the charts beginning on page ___ display
calendar years. Each fund's fiscal year runs from March 1 through February
28 (February 29 in a leap year).
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal periods ended February 28, 1994 Average Annual Total Return Cumulative Total Return
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
AIR TRANSPORTATION 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
AIR TRANSPORTATION (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
AMERICAN GOLD 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
AMERICAN GOLD (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
AUTOMOTIVE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
AUTOMOTIVE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
BIOTECHNOLOGY 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
BIOTECHNOLOGY (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
BROKERAGE AND INVESTMENT MANAGEMENT 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
BROKERAGE AND INVESTMENT MANAGEMENT 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
(LOAD ADJ.A)
CHEMICALS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
CHEMICALS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
COMPUTERS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
COMPUTERS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CONSTRUCTION AND HOUSING 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
CONSTRUCTION AND HOUSING (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
CONSUMER PRODUCTS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
CONSUMER PRODUCTS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
DEFENSE AND AEROSPACE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
DEFENSE AND AEROSPACE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
DEVELOPING COMMUNICATIONS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
DEVELOPING COMMUNICATIONS (LOAD 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ADJ.A)
S&P 500 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
Consumer Price Index 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal periods February 28, 1994 Average Annual Total Return Cumulative Total Return
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ELECTRONICS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ELECTRONICS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENERGY 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENERGY (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENERGY SERVICE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENERGY SERVICE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENVIRONMENTAL SERVICES 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ENVIRONMENTAL SERVICES (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
FINANCIAL SERVICES 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
FINANCIAL SERVICES (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
FOOD AND AGRICULTURE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
FOOD AND AGRICULTURE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
HEALTH CARE PORTFOLIO 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
HEALTH CARE PORTFOLIO (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
HOME FINANCE PORTFOLIO 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
HOME FINANCE PORTFOLIO (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INDUSTRIAL EQUIPMENT 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INDUSTRIAL EQUIPMENT (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INDUSTRIAL MATERIALS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INDUSTRIAL MATERIALS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INSURANCE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
INSURANCE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
LEISURE 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
LEISURE (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MEDICAL DELIVERY 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MEDICAL DELIVERY (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MULTIMEDIA 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MULTIMEDIA (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
NATURAL GAS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
NATURAL GAS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
S&P 500 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
Consumer Price Index 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal periods ended February 28, 1994 Average Annual Total Return Cumulative Total Return
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Past 1 year Past 5 years Life of fund Past 1 year Past 5 years Life of fund
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PAPER AND FOREST PRODUCTS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
PAPER AND FOREST PRODUCTS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
PRECIOUS METALS AND MINERALS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
PRECIOUS METALS AND MINERALS (LOAD 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ADJ.A)
REGIONAL BANKS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
REGIONAL BANKS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
RETAILING 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
RETAILING (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
SOFTWARE AND COMPUTER SERVICES 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
SOFTWARE AND COMPUTER SERVICES (LOAD 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
ADJ.A)
TECHNOLOGY 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
TECHNOLOGY (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
TELECOMMUNICATIONS 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
TELECOMMUNICATIONS (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
TRANSPORTATION 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
TRANSPORTATION (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
UTILITIES 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
UTILITIES (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MONEY MARKET 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
MONEY MARKET (LOAD ADJ.A) 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
S&P 500 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
Consumer Price Index 00.00% 00.00% 00.00% 00.00% 00.00% 00.00%
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING A FUND'S SALES CHARGE.
B
C
D
E
F
G
H
I
J
K
L
M
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results. Average annual total returns covering
periods of less than one year assume that performance will remain constant
for the rest of the year.
THE S&P 500(Registered trademark) is the Standard & Poor's 500
Composite Stock Price Index, a widely recognized, unmanaged index of common
stock prices. The S&P 500 figures assume reinvestment of all dividends
paid by stocks included in the index. They do not, however, include any
allowance for the brokerage commissions or other fees you would pay if you
actually invested in those stocks.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
YIELD, for the money market fund, refers to the income generated by an
investment in a fund over a given period of time, expressed as an annual
percentage rate. Yields are calculated according to a standard that is
required for all money market funds. When a yield assumes that income
earned is reinvested, it is called an EFFECTIVE YIELD.
Other illustrations of fund performance may show moving averages over
specific periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in fund reports, which are sent to all shareholders. For current
performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
THE FUNDS ARE MUTUAL FUNDS: investments that pool shareholders' money and
invest it toward a specified goal. In technical terms, each stock fund
(except Financial Services, Regional Banks, and Home Finance Portfolios) is
a non-diversified fund of Fidelity Select Portfolios, an open-end,
management investment company. The money market fund and the remaining
stock funds are diversified funds of the trust. The trust was organized as
a Massachusetts business trust on November 20, 1980.
EACH FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based on the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses each fund's investments and
handles their business affairs. Fidelity Management and Research (U.K.)
Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR
Far East) assist FMR with foreign investments.
Paul Antico has been portfolio manager of Fidelity Select Developing
Communications Portfolio since November 1993. Previously, he served as an
analyst for the telecommunications equipment and restaurant industries. He
also served as an assistant on Fidelity Balanced Fund and Fidelity
Equity-Income II Fund. He joined Fidelity in 1991, after receiving a B.S.
in economics from the Massachusetts Institute of Technology.
Philip Barton has been portfolio manager of Fidelity Select Environmental
Services Portfolio since October 1993. Previously, he managed Fidelity
Select Developing Communications Portfolio and was senior European
technology analyst at Fidelity International in London. Barton joined the
company in 1986 as an analyst following first the banking industry and then
software and computer services. He received his C.F.A. in 1988.
Robert Bertelson has been portfolio manager of Fidelity Select Energy
Portfolio since January 1992. He joined the company as an equity analyst in
1991. Before that, Bertelson was vice president and research analyst at
Wellington Management Company.
Stephen Binder has been portfolio manager of Fidelity Select Financial
Services since December 1993, Fidelity Select Defense and Aerospace
Portfolio since October 1992, and Fidelity Select Regional Banks Portfolio
since May 1990. He joined Fidelity in 1989 as an equity analyst, after
receiving an M.B.A. in finance and accounting from the University of
Chicago.
Robert Chow has been portfolio manager of Fidelity Select Insurance
Portfolio since June 1993. He has also served as manager of Fidelity Select
Computers, Paper and Forest Products and Technology Portfolios and as an
assistant on Fidelity Growth & Income Portfolio. Chow joined the
company as a summer intern in 1989. Before that, he was a sub-project
manager at TRW, an aerospace company. Chow received an M.B.A. in finance
from the University of Chicago in 1990.
Arieh Coll has been portfolio manager of Fidelity Select Brokerage and
Investment Management Portfolio since November 1993 and Fidelity Select
Software and Computer Services Portfolio since October 1991. Previously, he
managed Fidelity Select Technology Portfolio. He joined Fidelity in 1989,
after receiving an M.B.A. from Northwestern University.
Katherine Collins has been portfolio manager of the Select Construction and
Housing Portfolio since June 1992. She joined the company in July 1990 as
an equity analyst following the home-building and construction industries.
She received her B.A. from Wellesley College in economics and Japanese
studies in 1990.
Stephen DuFour has been portfolio manager of Fidelity Select Multimedia
Portfolio since July 1993. He joined Fidelity as a media analyst in 1992,
after receiving an M.B.A. from the University of Chicago. Previously, he
worked as a financial analyst at PaineWebber. In 1988, DuFour received a
B.A. from the University of Notre Dame.
David Ellison has been portfolio manager of Fidelity Select Home Finance
Portfolio since December 1985. Previously, he managed the Fidelity Select
Brokerage and Investment Management and Financial Services Portfolios. He
has also been a banking and finance analyst.
Mary English has been portfolio manager of Fidelity Select Retailing
Portfolio since June 1993. Previously, she was an equity analyst following
the specialty retail and advertising industries. English joined Fidelity in
1991, after receiving her M.B.A. from the University of Virginia. Before
that, she was a senior equity analyst and vice president at Furman, Selz,
an institutional research firm.
Jeff Feinberg has been portfolio manager of Fidelity Select Retailing
Portfolio since February, 1994. Previously, he served as an analyst
following the footware and specialty retail industries. Mr. Feinberg
joined Fidelity in March 1992 while attending Harvard Business School. He
received his M.B.A. from Harvard in 1993. Before that, Feinberg was a
merger and acquisitions analyst at Wasserstein Perella & Co.
Karen Firestone has been portfolio manager of Fidelity Select Biotechnology
Portfolio since August 1992. Previously, she managed Fidelity Select Air
Transportation, Multimedia, Leisure, and Transportation Portfolios.
Firestone joined the company in 1983.
Harry Lange has been portfolio manager of Fidelity Select Electronics
Portfolio since February 1994, Fidelity Select Technology Portfolio since
November 1993, and Fidelity Select Computers Portfolio since June 1992.
Previously, he managed Fidelity Select Automation and Machinery and Capital
Goods Portfolios. He joined the company in 1987.
Malcolm MacNaught has been portfolio manager of Fidelity Select American
Gold Portfolio since December 1985 and Fidelity Select Precious Metals and
Minerals Portfolio since July 1981. He also manages Fidelity Advisor Global
Natural Resources Portfolio.
Charles Mangum has been portfolio manager of Fidelity Select Health Care
Portfolio since March 1992. Previously, he managed Fidelity Select Medical
Delivery Portfolio. He received an M.B.A. from the University of Chicago in
1990. Before joining Fidelity in 1990, he worked as a financial analyst at
Eppler, Guerin and Turner, a Dallas-based brokerage house.
William Mankivsky has been portfolio manager of Fidelity Select Food and
Agriculture Portfolio since April 1993 and Fidelity Select Energy Service
Portfolio since January 1992. He joined Fidelity in 1991 as an equity
analyst following the energy service and medical devices industries. He
received an M.B.A. in finance and accounting from the University of Chicago
in 1991. Before that, he was an analyst at the Prudential Property Company
in Chicago.
John Muresianu has been portfolio manager of Fidelity Select Natural Gas
Portfolio since April 1993, Fidelity Select Utilities Portfolio and
Fidelity Utilities Income Fund since December 1992. Previously, he managed
Fidelity Select Electric Utilities Portfolio and served as senior research
analyst following natural gas pipelines, life insurance, service companies,
Canadian stocks and foreign currencies. He has also been a pension fund
manager with the company. Muresianu joined Fidelity in 1986.
Scott Offen has been portfolio manager of Fidelity Select Paper and Forest
Products Portfolio since November 1993. Previously, he managed Fidelity
Select Brokerage and Investment Management and Life Insurance Portfolios.
Offen joined the company in 1985 as an insurance and finance analyst.
Richard Patton has been portfolio manager of Fidelity Select Automotive
Portfolio since July 1993. He joined Fidelity as a specialty chemicals
analyst in 1992, after receiving an M.B.A. from Harvard Business School.
Previously, Patton was an associate with Breau Capital Management and
president and founder of several businesses.
Stephen Pesek has been portfolio manager of Fidelity Select Consumer
Products Portfolio since April 1993. Previously, he managed the Fidelity
Select Chemicals, Industrial Materials, Insurance and Transportation
Portfolios. He joined the company in 1987, after receiving an M.B.A. from
Columbia University.
Brenda Reed has been portfolio manager of Fidelity Select Air
Transportation since December 1992. She joined the company in 1992 as an
equity analyst following the apparel and textile industries. Previously,
she was an equity analyst at the Putnam Companies and vice president of New
England Research and Management. Reed received an M.B.A. from Dartmouth
College in 1992, and a B.S. in financial management from Boston University
in 1989.
Albert Ruback has been portfolio manager of Fidelity Select Industrial
Equipment Portfolio since September 1991. He joined Fidelity in 1991, after
receiving an M.B.A. from Harvard University in 1991. Previously, he was a
research associate for Sanford C. Bernstein and Co.
Louis Salemy has been portfolio manager of Fidelity Select Medical Delivery
Portfolio since April 1993 and Fidelity Select Industrial Materials
Portfolio since August 1992. He joined Fidelity in April 1992. Previously,
he was a security analyst for Loomis, Sayles and Company. Salemy received
an M.B.A. in finance from New York University in 1989.
Fergus Shiel has been portfolio manager of Fidelity Select
Telecommunications Portfolio since June 1992. Previously, Shiel managed
Fidelity Select Multimedia Portfolio. He joined the company in 1989, after
receiving an M.B.A. in finance from Columbia University.
Beso Sikharulidze has been portfolio manager of Fidelity Select
Transportation Portfolio since November 1993. He joined Fidelity as an
equity analyst in 1992, after receiving an M.B.A. from Harvard Business
School. From January to August 1990, he worked at Pioneer Hybrid, a
multinational agricultural company based in Des Moines, Iowa. In 1988, he
co-founded the Science and Engineering Development Center, an engineering
and consulting firm in Soviet Georgia, where he served as chief operating
officer.
Mark Tempero has been portfolio manager of Fidelity Select Natural Gas
Portfolio since February 1994. He joined Fidelity in May 1993 as an
analyst following domestic oil and gas exploration and production as well
as conglomerates. Tempero received his M.B.A. from the University of
Chicago in 1993 and his masters in economics from the London School of
Economics in 1992.
John Todd has been portfolio manager of Fidelity Select Money Market
Portfolio since January 1991. He has also managed Spartan Money Market Fund
since 1989. He joined the company in 1981.
Deborah Wheeler has been portfolio manager of Fidelity Select Leisure
Portfolio since August 1992. Previously, Wheeler managed the Fidelity
Select Food and Agriculture, Housing, and Retailing Portfolios. She was
also an assistant on Fidelity Magellan Fund. Wheeler joined Fidelity in
1986.
Steven Wymer has been portfolio manager of Fidelity Select Chemicals
Portfolio since January 1993. He is also an assistant on Fidelity Magellan
Fund. Previously, he was portfolio manager of Fidelity Select Automotive
Portfolio and an assistant on Fidelity Growth & Income Portfolio. Wymer
joined the company in 1989, after receiving an M.B.A. from the University
of Chicago.
FDC distributes and markets Fidelity's funds and services. Fidelity Service
Co. (FSC) is the funds' transfer, shareholder service, and dividend-paying
agent.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trust), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
A broker-dealer may use a portion of the commissions paid by a fund to
reduce custodian or transfer agent fees. FMR may use its broker-dealer
affiliates and other firms that sell fund shares to carry out a fund's
transactions, provided that the fund receives brokerage services and
commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The stock funds seek capital appreciation by investing primarily in equity
securities, although they may invest in other types of instruments as well.
American Gold and Precious Metals and Minerals Portfolios can also invest
in precious metals. Each stock fund focuses its investments on a particular
industry, normally investing most of its assets in securities of companies
principally engaged in the business activities identified below. For most
of the stock funds, an issuer is considered principally engaged in a
business activity if at least 50% of its assets, gross income, or net
profits are committed to, or derived from, that activity. For Brokerage and
Investment Management and Financial Services Portfolios, an issuer is
considered principally engaged if it derives more than 15% of revenues or
profits from brokerage or investment management activities.The funds'
strategy can lead to investments in small companies, which often involve
more risk than larger companies. Securities of small companies, especially
those that base their business on emerging products or concepts, may be
volatile due to limited product lines, markets, or financial resources. The
funds invest in domestic and foreign securities, including securities of
emerging markets, which can be considered speculative, and experience more
volatility than those of the more developed nations.
Non-diversified funds may have greater investments in a single issuer than
diversified funds, so the performance of a single issuer can have a
substantial impact on a fund's share price. Additionally, since the stock
funds focus on specific industries, their prices may be more volatile than
those of more broadly diversified investments. Each fund's performance is
closely tied to its industry, as well as to the economy as a whole.
Securities in an industry often react similarly to market conditions, and
may move in unison. As a result, the narrower a fund's focus is, the more
volatile its performance is likely to be. In many cases, the focus of a
fund differs from another only slightly, so they may invest in many of the
same securities.
FMR may use various techniques to hedge a fund's risks, but there is no
guarantee that these strategies will work as FMR intends. When you sell
your shares in a stock fund, they may be worth more or less than what you
paid for them.
FMR normally invests each fund's assets according to its investment
strategy. When FMR considers it appropriate for defensive purposes,
however, each stock fund may temporarily invest substantially in
investment-grade debt securities.
AIR TRANSPORTATION PORTFOLIO invests primarily in companies engaged in the
regional, national and international movement of passengers, mail, and
freight via aircraft. Investments in this fund may include, for example,
the airlines, air cargo providers, or companies that provide equipment or
services to these companies.
Airline profitability is substantially influenced by competition within the
industry, domestic and foreign economies and government regulation, and the
price of fuel. Additionally, the industry is still feeling the effects of
deregulation.
AMERICAN GOLD PORTFOLIO invests primarily in companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals. The fund focuses on North, Central, and South American companies
engaged in gold-related activities. This focus may also include gold
bullion or coins and securities indexed to the price of gold. The fund may
also invest in securities of companies which themselves invest in companies
engaged in these activities.
The price of gold and other precious metal mining securities can face
substantial short-term volatility caused by international monetary and
political developments such as currency devaluations or revaluations,
economic and social conditions within a country, or trade restrictions
between countries. Since much of the world's gold reserves are located in
South Africa, the social and economic conditions there can affect gold and
gold-related companies located elsewhere. The price of gold bullion or
coins is more affected by broad economic and political conditions.
FMR does not currently intend to purchase gold if, as a result, more than
25% of the fund's total assets would be invested in gold and gold-indexed
securities, and does not currently intend to purchase coins. Under current
federal tax law, gains from selling gold may not exceed 10% of the fund's
annual gross income. This tax requirement could cause the fund to hold or
sell bullion or securities when it would not otherwise do so.
AUTOMOTIVE PORTFOLIO invests primarily in companies engaged in the
manufacture, marketing, or sale of automobiles, trucks, specialty vehicles,
parts, tires, and related services. These companies may include, for
example, automobile manufacturers, distributors, and parts providers. The
fund may also invest in companies that provide services to automobile
manufacturers, distributors, or consumers.
The automotive industry is highly cyclical and companies in the industry
may suffer periodic operating losses. While most of the major manufacturers
are large, financially strong companies, some are smaller manufacturers
that have a non-diversified product line or customer base.
BIOTECHNOLOGY PORTFOLIO invests primarily in companies engaged in the
research, development, scale up, and manufacture of various
biotechnological products, services, and processes. This may include, for
example, companies involved with new or experimental technologies such as
genetic engineering. The fund may also invest in companies that
manufacture, distribute, or benefit from biotechnological and biomedical
products, processes, or services.
FMR interprets the biotechnology sector broadly. For example, the fund may
invest in companies involved in applications and developments in such areas
as health care, pharmaceuticals, and agriculture.
Biotechnology companies are affected by patent considerations, intense
competition, rapid technological change and obsolescence, and regulatory
requirements. In addition, many of these companies may not offer products
yet and may have persistent losses or erratic revenue patterns.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO invests primarily in
companies engaged in stock brokerage, commodity brokerage, investment
banking, tax-advantaged investment or investment sales, investment
management, or related investment advisory services. The fund does not
invest in securities of FMR or its affiliated companies. Under SEC
regulations the fund may not invest more than 5% of its total assets in the
securities of any company that derives more than 15% of its revenues from
brokerage or investment management activities.
Changes in regulations, brokerage commission structure, stock market
activity, and the competitive environment, combined with the operating
leverage inherent in companies in these industries, can produce erratic
returns over time.
CHEMICALS PORTFOLIO invests primarily in companies engaged in the research,
development, manufacture, or marketing of products or services related to
the chemical process industries. These products may include, for example,
synthetic and natural materials, such as fertilizers, building materials,
and plastics. The fund may also hold the securities of companies providing
design, engineering, construction, and consulting services to companies
engaged in chemical processing.
Companies in the chemical processing field are subject to intense
competition, product obsolescence and significant governmental regulation.
As regulations are developed and enforced, such companies may be required
to alter or cease production of a product, to pay fines, or to pay for
cleaning up a disposal site. In addition, chemical companies face unique
risks associated with handling hazardous products.
COMPUTERS PORTFOLIO invests primarily in companies engaged in research,
design, development, manufacture or distribution of products, processes, or
services that relate to currently available or experimental hardware
technology within the computer industry. The fund may invest in companies
that provide products or services such as computer and office equipment
wholesalers, software retailers, data processors, and designers of
artificial intelligence.
Competitive pressures and changing domestic and international demand may
have a significant effect on the financial condition of companies in the
computer industry. Companies in the industry spend heavily on research and
development and are sensitive to the risk of product obsolescence.
CONSTRUCTION AND HOUSING PORTFOLIO invests primarily in companies engaged
in the design and construction of residential, commercial, industrial, and
public works facilities, as well as companies engaged in the manufacture,
supply, distribution, or sale of products or services to these construction
industries. Examples of companies engaged in these activities include
companies that produce basic building materials such as cement, supply home
furnishings, or provide engineering or contracting services. The fund also
may invest in companies involved in real estate development and
construction financing such as home builders, architectural and design
firms, and property managers, and in companies involved in the home
improvement and maintenance industry.
Companies in this industry are subject to a variety of factors such as
government spending on housing subsidies, public works, and transportation
facilities, as well as changes in interest rates, consumer confidence and
spending, taxation, demographic patterns, the level of new and existing
home sales, and other economic activity.
CONSUMER PRODUCTS PORTFOLIO invests primarily in companies engaged in the
manufacture and distribution of goods to consumers both domestically and
internationally. This may include, for example, companies that manufacture
or sell durable goods such as homes, cars, boats, major appliances, and
personal computers. It may also include companies that manufacture or sell
non-durable goods such as food or entertainment products, and companies
that provide services such as lodging or childcare.
The success of consumer product manufacturers and retailers is closely tied
to the performance of the overall economy, interest rates, competition, and
consumer confidence. Success depends heavily on disposable household income
and consumer spending. Changes in demographics and consumer tastes can also
affect the demand for, and success of, consumer products in the
marketplace.
DEFENSE AND AEROSPACE PORTFOLIO invests primarily in companies engaged in
the research, manufacture, or sale of products or services related to the
defense or aerospace industries. For example, the fund may invest in
companies involved in defense electronics, aircraft or spacecraft
production, missile design, data processing or computer-related services.
The financial condition of companies in the industry and investor interest
in these companies are heavily influenced by government defense and
aerospace spending policies. Defense spending is currently under pressure
from efforts to control the U.S. budget deficit.
DEVELOPING COMMUNICATIONS PORTFOLIO invests primarily in companies engaged
in the development, manufacture, or sale of emerging communications
services or equipment. Emerging communications are those which derive from
new technologies or new applications of existing technologies. Examples of
the fund's investments may include companies involved in cellular
communications, software development, video conferencing or data
processing. The fund places less emphasis on traditional communications
companies such as large long distance carriers.
Products or services provided by this industry may be in the development
stage and can face risks such as failure to obtain financing or regulatory
approval, intense competition, product incompatibility, consumer
preferences, and rapid obsolescence.
ELECTRONICS PORTFOLIO invests primarily in companies engaged in the design,
manufacture, or sale of electronic components (semiconductors, connectors,
printed circuit boards, and other components); equipment vendors to
electronic component manufacturers; electronic component distributors; and
electronic instruments and electronic systems vendors. This may include
companies involved in new technologies or specialty areas such as defense
electronics, advanced design and manufacturing technologies, or lasers.
Many of the products offered by companies engaged in the design,
production, or distribution of electronic products are subject to risks of
rapid obsolescence and intense competition.
ENERGY PORTFOLIO invests primarily in companies in the energy field,
including the conventional areas of oil, gas, electricity, and coal, and
newer sources of energy such as nuclear, geothermal, oil shale, and solar
power. This may include, for example, companies that produce, transmit,
market, or measure energy, as well as companies involved in the exploration
of new sources of energy.
Securities of companies in the energy field are subject to changes in value
and dividend yield which depend largely on the price and supply of energy
fuels. Swift price and supply fluctuations may be caused by events relating
to international politics, energy conservation, the success of exploration
projects, and tax and other governmental regulatory policies.
ENERGY SERVICE PORTFOLIO invests primarily in companies in the energy
service field, including those that provide services and equipment to the
conventional areas of oil, gas, electricity, and coal, and newer sources of
energy such as nuclear, geothermal, oil shale, and solar power. Holdings
may include companies providing services such as onshore or offshore
drilling, or those involved in production and well maintenance, exploration
technology, energy transport or equipment and plant design or construction.
Energy service firms are affected by supply and demand both for their
specific product or service, and for energy products in general. The price
of oil and gas, exploration and production spending, governmental
regulation, world events and economic conditions will likewise affect the
performance of these companies.
ENVIRONMENTAL SERVICES PORTFOLIO invests primarily in companies engaged in
the research, development, manufacture, or distribution of products,
processes, or services related to waste management or pollution control.
The fund may invest in companies participating in pollution control through
methods such as packaging, disposal, and sanitation, companies that are
investigating new ways to protect the environment, and companies engaged in
design, construction, or consulting.
This industry can be impacted by legislation, government regulations, and
enforcement policies. As regulations are developed and enforced, companies
may be required to alter or cease production of a product or service. In
addition, hazardous materials may be involved, and companies can face
significant liability risk.
FINANCIAL SERVICES PORTFOLIO invests primarily in companies providing
financial services to consumers and industry. Examples of companies in the
financial services field include commercial banks, savings and loan
associations, brokerage companies, insurance companies, real estate and
leasing companies, and companies that span across these segments. Under SEC
regulations, the fund may not invest more than 5% of its total assets in
the securities of any company that derives more than 15% of its revenues
from brokerage or investment management activities.
Financial services companies are subject to extensive governmental
regulation which may limit both the amounts and types of loans and other
financial commitments they can make, and the interest rates and fees they
can charge. Profitability is largely dependent on the availability and cost
of capital funds, and can fluctuate significantly when interest rates
change. Credit losses resulting from financial difficulties of borrowers
can negatively impact the industry. Insurance companies may be subject to
severe price competition.
FOOD AND AGRICULTURE PORTFOLIO invests primarily in companies engaged in
the manufacture, sale, or distribution of food and beverage products,
agricultural products, and products related to the development of new food
technologies. This may include, for example, companies that sell products
and services, such as, grocery stores, and restaurants, companies that
manufacture and distribute products such as soft drinks, and companies
engaged in the development of new technologies such as improved hybrid
seeds.
The success of the industry is closely tied to supply and demand, which may
be affected by demographic and product trends, or stimulated by food fads,
marketing campaigns, and environmental factors. In the U.S., the
agricultural products industry is subject to regulation by numerous
government agencies.
HEALTH CARE PORTFOLIO invests primarily in companies engaged in the design,
manufacture, or sale of products or services used for or in connection with
health care or medicine. Companies in the health care field may include,
for example, pharmaceutical companies, companies involved in research and
development, companies involved in the operation of health care facilities,
and other companies involved in the design, manufacture, or sale of related
products or services.
Many of these companies are subject to government regulation and approval
of their products and services, which could have a significant effect on
their price and availability. Furthermore, the types of products or
services produced or provided by these companies may quickly become
obsolete. The administration is currently examining the health care
industry to determine whether government funds are spent appropriately, and
to ensure that adequate health care is available to everyone.
HOME FINANCE PORTFOLIO invests primarily in companies engaged in investing
in real estate, usually through mortgages and other consumer-related loans.
These companies may also offer discount brokerage services, insurance
products, leasing services, and joint venture financing. This may include,
for example, mortgage banking companies, real estate investment trusts,
banks, and other depository institutions.
The residential real estate finance industry has changed rapidly over the
last decade and is expected to continue to change. Regulatory changes at
federally insured institutions, in response to a high failure rate, have
mandated higher capital ratios and more prudent underwriting. This reduced
capacity has created growth opportunities for uninsured companies and
secondary market products to fill unmet demand for home finance. Regulatory
changes, interest rate movements, home mortgage demand, and residential
delinquency trends will affect the industry.
INDUSTRIAL EQUIPMENT PORTFOLIO invests primarily in companies engaged in
the manufacture, distribution, or service of products and equipment for the
industrial sector, including integrated producers of capital equipment
(such as general industry machinery, farm equipment, and computers), parts
suppliers, and subcontractors. This may include, for example, companies
that manufacture products or service equipment for railroads, construction,
or farming.
The success of equipment manufacturing and distribution companies is
closely tied to overall capital spending levels, which is influenced by an
individual company's profitability, and broader issues such as interest
rates and foreign competition. The industry may also be affected by
economic cycles, technical progress, labor relations, and government
regulations.
INDUSTRIAL MATERIALS PORTFOLIO invests primarily in companies engaged in
the manufacture, mining, processing, or distribution of raw materials and
intermediate goods used in the industrial sector. These materials and goods
may include, for example, chemicals, metals, and wood products. Investments
may also include mining, processing, transportation, and distribution
companies, including equipment suppliers and railroads.
Many companies in this sector are significantly affected by the level and
volatility of commodity prices, the exchange value of the dollar, import
controls, and worldwide competition. At times, worldwide production of
these materials has exceeded demand as a result of over-building or
economic downturns, leading to poor investment returns or losses. Other
risks may include liability for environmental damage, depletion of
resources, and mandated expenditures for safety and pollution control.
INSURANCE PORTFOLIO invests primarily in companies engaged in underwriting,
reinsuring, selling, distributing, or placing of property and casualty,
life, or health insurance. Examples of the fund's investments may include
companies that provide a specific type of insurance, such as life or health
insurance, those that offer a variety of insurance products and those that
provide insurance services such as brokers and claims processors.
Insurance company profits are affected by interest rate levels, general
economic conditions, and price and marketing competition. Certain types of
insurance may be impacted by events or trends such as natural catastrophes
or mortality rates. Companies may be exposed to material risks including
shortage of cash reserves and the inability to collect from reinsurance
carriers. Also, insurance companies are subject to extensive governmental
regulation, and can be adversely affected by proposed or potential tax law
changes.
LEISURE PORTFOLIO invests primarily in companies engaged in the design,
production, or distribution of goods or services in the leisure industries.
The goods or services provided by companies in the fund may include, for
example, television and radio broadcast, motion pictures, cellular phones,
gaming casinos, theme parks, and lodging.
Securities of companies in the leisure industry may be considered
speculative and generally exhibit greater volatility than the overall
market. Many companies have unpredictable earnings, due in part to changing
consumer tastes and intense competition. The industry has reacted strongly
to technological developments and to the threat of government regulation.
MEDICAL DELIVERY PORTFOLIO invests primarily in companies engaged in the
ownership or management of hospitals, nursing homes, health maintenance
organizations, and other companies specializing in the delivery of health
care services. This may include, for example, companies that operate acute
care, psychiatric, teaching, or specialized treatment hospitals, as well as
home health care providers, medical equipment suppliers, and those that
provide related services.
Federal and state governments provide a substantial percentage of revenues
to health care service providers via Medicare and Medicaid. These sources
are subject to extensive governmental regulation and appropriations are a
continued source of debate. The administration is currently examining the
health care industry to determine whether government funds are spent
appropriately, and to ensure that adequate health care is available to
everyone.
The demand for health care services should increase as the population ages.
However, studies have shown the ability of health care providers to curtail
unnecessary hospital stays and reduce costs. These changes could alter the
health care industry, focusing it more on home care, and placing less
emphasis on inpatient revenues as a source of profit.
MULTIMEDIA PORTFOLIO invests primarily in companies engaged in the
development, production, sale, and distribution of goods or services used
in the broadcast and media industries. The fund's investments may include
broadcasting companies, such as cable television providers, companies
involved in emerging technologies such as cellular communications, or other
companies involved in the ownership, operation or development of media
products or services.
Some of the companies in these industries are undergoing significant change
because of federal deregulation of cable and broadcasting. As a result,
competitive pressures are intense and the stocks are subject to increased
price volatility. FMR abides by Federal Communications Commission rules
governing the concentration of investment in AM, FM, or TV stations
limiting investment alternatives.
NATURAL GAS PORTFOLIO invests primarily in companies engaged in the
production, transmission, and distribution of natural gas, and involved in
the exploration of potential natural gas sources, as well as those
companies that provide services and equipment to natural gas producers,
refineries, cogeneration facilities, converters, and distributors. This may
include, for example, companies participating in gas research, exploration,
or refining, companies working toward technological advances in the natural
gas field, and other companies providing products or services to the
industry.
The companies in the natural gas field are subject to changes in price and
supply of both conventional and alternative energy sources. Swift price and
supply fluctuations may be caused by events relating to international
politics, energy conservation, the success of energy source exploration
projects, and tax and other regulatory policies of domestic and foreign
governments.
PAPER AND FOREST PRODUCTS PORTFOLIO invests primarily in companies engaged
in the manufacture, research, sale, or distribution of paper products,
packaging products, building materials (such as lumber and paneling
products), and other products related to the paper and forest products
industry. Examples of the fund's investments may include paper production
companies, printers, and publishers.
The success of these companies depends on the health of the economy,
worldwide production capacity for the industry's products, and interest
rate levels, which may affect product pricing, costs, and operating
margins. These variables also affect the level of industry and consumer
capital spending for paper and forest products.
PRECIOUS METALS AND MINERALS PORTFOLIO invests primarily in companies
engaged in exploration, mining, processing or dealing in gold, silver,
platinum, diamonds or other precious metals and minerals. In addition to
its investments in these securities, the fund's focus includes investments
in precious metals, such as gold, silver, and platinum, coins, and
securities indexed to the price of gold or other precious metals. The fund
may also invest in securities of companies which themselves invest in
companies engaged in these activities.
The price of precious metals is affected by broad economic and political
conditions. For example, the price of gold and other precious metal mining
securities can face substantial short-term volatility caused by
international monetary and political developments such as currency
devaluations or revaluations, economic and social conditions within a
country, or trade restrictions between countries. Since much of the world's
gold reserves are located in South Africa, the social and economic
conditions there can affect gold and gold-related companies located
elsewhere. The price precious metals is more affected by broad economic and
political conditions.
FMR does not currently intend to purchase precious metals if, as a result,
more than 25% of the fund's total assets would be invested in precious
metals and securities indexed to the price of precious metals. Under
current federal tax law, gains from selling precious metals may not exceed
10% of the fund's annual gross income. This tax requirement could cause the
fund to hold or sell precious metals or securities when it would not
otherwise do so.
REGIONAL BANKS PORTFOLIO invests primarily in companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans. These companies concentrate their operations in a specific
part of the country. This may include, for example, state chartered banks,
savings and loan institutions, and banks that are members of the Federal
Reserve System. The fund may own securities of U.S. institutions whose
deposits are not insured by the federal government.
As the services offered by banks expand, banks are becoming more exposed to
well-established competitors. This exposure has also increased due to the
erosion of historical distinctions between regional banks and other
financial institutions. Increased competition may result from the
broadening of regional and national interstate banking powers, which has
already reduced the number of publicly traded regional banks. In addition,
general economic conditions are important to regional banks which face
exposure to credit losses, and dependence on interest rate activity.
RETAILING PORTFOLIO invests primarily in companies engaged in merchandising
finished goods and services primarily to individual consumers. This may
include, for example, department stores, food retailers, warehouse
membership clubs, mail order operations, or other companies involved in
alternative selling methods.
The success of retailing companies is closely tied to consumer spending,
which is affected by general economic conditions and consumer confidence
levels. The retailing industry is highly competitive, and a company's
success is often tied to its ability to anticipate changing consumer
tastes.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO invests primarily in companies
engaged in research, design, production or distribution of products or
processes that relate to software or information-based services. This may
include, for example, companies that design products such as systems level
software to run the basic functions of a computer, or applications software
for one type of work, and consulting, communications, and related services.
Competitive pressures may have a significant effect on the financial
condition of companies in the software and computer services industries.
For example, an increasing number of companies and new product offerings
can lead to aggressive pricing and slower selling cycles.
TECHNOLOGY PORTFOLIO invests primarily in companies which FMR believes
have, or will develop, products, processes, or services that will provide
or will benefit significantly from technological advances and improvements.
The description of the technology sector will be interpreted broadly by FMR
and may include such products or services as inexpensive computing power
such as personal computers, improved methods of communications such as
satellite transmission, or labor saving machines or instruments such as
computer-aided design equipment.
The fund emphasizes those companies positioned to benefit from
technological advances in areas such as semiconductors, minicomputers and
peripheral equipment, scientific instruments, computer software,
communications, and future automation trends in both office and factory
settings.
Competitive pressures may have a significant effect on the financial
condition of companies in the technology industry. For example, if
technology continues to advance at an accelerated rate, and the number of
companies and product offerings continues to expand, these companies could
become increasingly sensitive to short product cycles and aggressive
pricing.
TELECOMMUNICATIONS PORTFOLIO invests primarily in companies engaged in the
development, manufacture, or sale of communications services or
communications equipment. Companies in the telecommunications field may
range from traditional local and long-distance telephone service or
equipment providers, to companies involved in new technologies such as
cellular telephone or paging services.
Telephone operating companies are subject to both federal and state
regulations governing rates of return and services that may be offered.
Many companies represented in the fund are engaged in fierce competition
for market share. Although telephone companies usually pay an above average
dividend, the fund's investment decisions are primarily based on growth
potential and not on income.
TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
Transportation services may include, for example, companies involved in the
movement of freight or people such as airlines, railroads, and bus
companies, equipment manufacturers, parts suppliers, and companies involved
in leasing, maintenance and related services.
Transportation stocks are cyclical and have occasional sharp price
movements which may result from changes in the economy, fuel prices, labor
agreements, and insurance costs. The U.S. has been deregulating these
industries, but it is uncertain whether this trend will continue and what
its effect will be.
UTILITIES PORTFOLIO invests primarily in companies in the public utilities
industry and companies deriving a majority of their revenues from their
public utility operations. This may include, for example, companies that
manufacture, produce, sell, or transmit gas or electric energy, and those
involved in telephone, satellite, and other communication fields.
Public utility stocks have traditionally produced above-average dividend
income, but the fund's investments are based on growth potential. The gas
and electric public utilities industries may be subject to broad risks
resulting from governmental regulation, financing difficulties, supply and
demand of services or fuel, and special risks associated with energy and
atmosphere conservation. The fund may not own more than 5% of the
outstanding voting securities of more than one public utility company as
defined by the Public Utility Holding Company Act of 1935.
MONEY MARKET PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term money market instruments. As a result, your investment earns
income at current money market rates, and when you sell your shares, they
should be worth the same amount as when you bought them. Of course, there
is no guarantee that the fund will maintain a stable $1.00 share price.
The fund invests in U.S. dollar-denominated instruments of domestic and
foreign issuers, including banks and other financial institutions,
governments and their agencies and instrumentalities, and corporations. The
fund stresses income, preservation of capital, and liquidity, and does not
seek the higher yields or capital appreciation that more aggressive
investments may provide. The fund's yield will vary from day to day,
generally reflecting current short-term interest rates and other market
conditions.
The fund follows industry-standard guidelines on the quality and maturity
of its investments, which are designed to help maintain a stable $1.00
share price. The fund will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities it buys. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the fund's investments could cause its share price (and the
value of your investment) to change.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. As a shareholder, you will receive financial
reports every six months detailing fund holdings and describing recent
investment activities.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. This ownership interest
often gives a fund the right to vote on measures affecting the company's
organization and operations. Although common stocks have a history of
long-term growth in value, their prices tend to fluctuate in the short
term, particularly those of smaller companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
RESTRICTIONS: Each stock fund does not currently intend to invest more than
5% of its assets in lower-quality debt securities, sometimes called "junk
bonds" (those rated below Baa by Moody's or BBB by S&P, and unrated
securities judged by FMR to be of equivalent quality).
FOREIGN SECURITIES and foreign currencies may involve additional risks.
These include currency fluctuations, risks relating to political or
economic conditions in the foreign country, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
In addition to the political and economic factors that can affect foreign
securities, a governmental issuer may be unwilling to repay principal and
interest when due and may require that the conditions for payment be
renegotiated. These factors could make foreign investments, especially
those in developing countries, more volatile.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities may be subject to legal restrictions.
Difficulty in selling securities may result in a loss or may be costly to a
fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
ASSET-BACKED SECURITIES may include pools of mortgages, loans, receivables,
or other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities.
OTHER MONEY MARKET INSTRUMENTS may include commercial paper, certificates
of deposit, bankers' acceptances, time deposits, and short-term corporate
obligations. These instruments may carry fixed or variable interest rates.
STRIPPED SECURITIES are the separate income or principal components of a
debt instrument. These involve risks that are similar to those of other
debt securities, although they may be more volatile.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in a fund's
yield or in the market value of its assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. A fund that
is not diversified may be more sensitive to changes in the market value of
a single issuer or industry.
RESTRICTIONS: The stock funds (except Financial Services, Home Finance, and
Regional Banks Portfolios) are considered non-diversified. Generally, to
meet federal tax requirements at the close of each quarter, a stock fund
does not invest more than 25% of its total assets in any one issuer and,
with respect to 50% of total assets, does not invest more than 5% of its
total assets in any one issuer. With respect to 75% of total assets,
Financial Services Portfolio, Regional Banks Portfolio, and Home Finance
Portfolio may not invest more than 5% of their total assets in any one
issuer. The money market fund may not invest more than 5% of its total
assets in the securities of any one issuer, except that it may invest up to
10% of its assets in the highest-quality securities of a single issuer for
up to three days. Each stock fund normally invests at least 80% , but
always at least 25%, of its assets in securities of companies principally
engaged in the business activities identified for that fund. For Precious
Metals and Minerals Portfolio, the fund normally invests at least 80% of
its total assets in securities of companies principally engaged in the
business activities identified for the fund, precious metals, and
instruments whose value is linked to the price of precious metals. The
money market fund may not invest more than 25% of its total assets in any
one industry (other than the financial services industry; see below). These
limitations do not apply to U.S. government securities.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: The money market fund will invest more than 25% of its total
assets in the financial services industry.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a stock fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering a fund's securities. A fund
may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
AIR TRANSPORTATION PORTFOLIO invests primarily in companies engaged in the
regional, national and international movement of passengers, mail, and
freight via aircraft.
AMERICAN GOLD PORTFOLIO invests primarily in companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals. Normally at least 80% of the fund's assets will be invested in
securities of North, Central and South American companies engaged in
gold-related activities, and in gold bullion or coins. The fund is
authorized to invest up to 50% of its total assets in gold bullion or
coins.
AUTOMOTIVE PORTFOLIO invests primarily in companies engaged in the
manufacture, marketing or sale of automobiles, trucks, specialty vehicles,
parts, tires, and related services.
BIOTECHNOLOGY PORTFOLIO invests primarily in companies engaged in the
research, development, scale up and manufacture of various biotechnological
products, services and processes.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO invests primarily in
companies engaged in stock brokerage, commodity brokerage, investment
banking, tax-advantaged investment or investment sales, investment
management, or related investment advisory services. A company is
principally engaged in the industry if it derives more than 15% of revenues
or profits from brokerage or investment management activities.
CHEMICALS PORTFOLIO invests primarily in companies engaged in the research,
development, manufacture or marketing of products or services related to
the chemical process industries.
COMPUTERS PORTFOLIO invests primarily in companies engaged in research,
design, development, manufacture or distribution of products, processes or
services that relate to currently available or experimental hardware
technology within the computer industry.
CONSTRUCTION AND HOUSING PORTFOLIO invests primarily in companies engaged
in the design and construction of residential, commercial, industrial and
public works facilities, as well as companies engaged in the manufacture,
supply, distribution or sale of products or services to these construction
industries.
CONSUMER PRODUCTS PORTFOLIO invests primarily in companies engaged in the
manufacture and distribution of goods to consumers both domestically and
internationally.
DEFENSE AND AEROSPACE PORTFOLIO invests primarily in companies engaged in
the research, manufacture or sale of products or services related to the
defense or aerospace industries.
DEVELOPING COMMUNICATIONS PORTFOLIO invests primarily in companies engaged
in the development, manufacture or sale of emerging communications services
or equipment.
ELECTRONICS PORTFOLIO invests primarily in companies engaged in the design,
manufacture, or sale of electronic components (semiconductors, connectors,
printed circuit boards and other components); equipment vendors to
electronic component manufacturers; electronic component distributors; and
electronic instruments and electronic systems vendors.
ENERGY PORTFOLIO invests primarily in companies in the energy field,
including the conventional areas of oil, gas, electricity and coal, and
newer sources of energy such as nuclear, geothermal, oil shale and solar
power.
ENERGY SERVICE PORTFOLIO invests primarily in companies in the energy
service field, including those that provide services and equipment to the
conventional areas of oil, gas, electricity and coal, and newer sources of
energy such as nuclear, geothermal, oil shale and solar power.
ENVIRONMENTAL SERVICES PORTFOLIO invests primarily in companies engaged in
the research, development, manufacture or distribution of products,
processes or services related to waste management or pollution control.
FINANCIAL SERVICES PORTFOLIO invests primarily in companies providing
financial services to consumers and industry. A company is principally
engaged in the industry if it derives more than 15% of revenues or profits
from brokerage or investment management activities.
FOOD AND AGRICULTURE PORTFOLIO invests primarily in companies engaged in
the manufacture, sale or distribution of food and beverage products,
agricultural products, and products related to the development of new food
technologies.
HEALTH CARE PORTFOLIO invests primarily in companies engaged in the design,
manufacture, or sale of products or services used for or in connection with
health care or medicine.
HOME FINANCE PORTFOLIO invests primarily in companies engaged in investing
in real estate, usually through mortgages and other consumer-related loans.
INDUSTRIAL EQUIPMENT PORTFOLIO invests primarily in companies engaged in
the manufacture, distribution or service of products and equipment for the
industrial sector, including integrated producers of capital equipment
(such as general industry machinery, farm equipment, and computers), parts
suppliers and subcontractors.
INDUSTRIAL MATERIALS PORTFOLIO invests primarily in companies engaged in
the manufacture, mining, processing, or distribution of raw materials and
intermediate goods used in the industrial sector.
INSURANCE PORTFOLIO invests primarily in companies engaged in underwriting,
reinsuring, selling, distributing, or placing of property and casualty,
life, or health insurance.
LEISURE PORTFOLIO invests primarily in companies engaged in the design,
production, or distribution of goods or services in the leisure industries.
MEDICAL DELIVERY PORTFOLIO invests primarily in companies engaged in the
ownership or management of hospitals, nursing homes, health maintenance
organizations, and other companies specializing in the delivery of health
care services.
MULTIMEDIA PORTFOLIO invests primarily in companies engaged in the
development, production, sale and distribution of goods or services used in
the broadcast and media industries.
NATURAL GAS PORTFOLIO invests primarily in companies engaged in the
production, transmission, and distribution of natural gas, and involved in
the exploration of potential natural gas sources, as well as those
companies that provide services and equipment to natural gas producers,
refineries, cogeneration facilities, converters, and distributors.
PAPER AND FOREST PRODUCTS PORTFOLIO invests primarily in companies engaged
in the manufacture, research, sale, or distribution of paper products,
packaging products, building materials (such as lumber and paneling
products), and other products related to the paper and forest products
industry.
PRECIOUS METALS AND MINERALS PORTFOLIO invests primarily in companies
engaged in exploration, mining, processing or dealing in gold, silver,
platinum, diamonds or other precious metals and minerals. Under normal
conditions, the fund will invest at least 80% of its total assets in (i)
securities of companies principally engaged in exploration, mining,
processing, or dealing in gold, silver, platinum, diamonds, or other
precious metals and minerals, and (ii) precious metals. The fund is
authorized to invest up to 50% of its total assets in precious metals.
REGIONAL BANKS PORTFOLIO invests primarily in companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans.
RETAILING PORTFOLIO invests primarily in companies engaged in merchandising
finished goods and services primarily to individual consumers.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO invests primarily in companies
engaged in research, design, production or distribution of products or
processes that relate to software or information-based services.
TECHNOLOGY PORTFOLIO invests primarily in companies which FMR believes
have, or will develop, products, processes or services that will provide or
will benefit significantly from technological advances and improvements.
TELECOMMUNICATIONS PORTFOLIO invests primarily in companies engaged in the
development, manufacture, or sale of communications services or
communications equipment.
TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
UTILITIES PORTFOLIO invests primarily in companies in the public utilities
industry and companies deriving a majority of their revenues from their
public utility operations.
MONEY MARKET PORTFOLIO seeks to provide high current income, consistent
with preservation of capital and liquidity, by investing in a broad range
of high quality money market instruments. At all times, 80% or more of the
fund's assets will be invested in money market instruments. The fund may
not invest more than 25% of its total assets in any one industry, except
that the fund will invest more than 25% of its total assets in the
financial services industry.
EACH STOCK FUND seeks capital appreciation. The funds seek to achieve this
objective by investing primarily in equity securities, including common
stocks and securities convertible into common stocks, and for American Gold
Portfolio and Precious Metals and Minerals Portfolio, in certain precious
metals. Normally, at least 80%, and in no event less than 25%, of a stock
fund's assets will be invested in securities of companies principally
engaged in the business activities identified for that fund (except
Precious Metals and Minerals Portfolio). For the purposes of these
policies, a company is considered to be "principally engaged" in a
designated business activity (unless otherwise noted) if at least 50% of
its assets, gross income, or net profits are committed to, or derived from,
that activity. FMR does not place any emphasis on income when selecting
securities for the stock funds, except when it believes that income may
have a favorable effect on a security's market value.
When FMR considers it appropriate for defensive purposes, each stock fund
may temporarily invest substantially in investment-grade debt securities.
EACH FUND may borrow only for temporary or emergency purposes or engage in
reverse repurchase agreements, but not in an amount exceeding 33% of its
total assets. Loans, in the aggregate, may not exceed 33% of total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay expenses related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services for the funds. Each fund also pays OTHER
EXPENSES, which are explained at right.
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
EACH STOCK FUND'S management fee is calculated and paid to FMR every month.
The fee for each fund is calculated by adding a group fee rate to an
individual fund fee rate, and multiplying the result by the respective
fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase. For February 1994, the group fee
rate was ____%. The individual fund fee rate is .30% for the stock funds.
The total management fee for fiscal 1994 was ___%.
THE MONEY MARKET FUND'S management fee is calculated by multiplying the sum
of two components by the fund's average net assets and adding an
income-based fee. One component, the group fee rate, is based on the
average net assets of all the mutual funds advised by FMR. It cannot rise
above .37% and it drops as total assets, under management increase. The
other component, the individual fund fee rate, is .03%. The income-based
fee is 6% of the fund's gross income in excess of a 5% yield and cannot
rise above .24% of the fund's average net assets.
For February, 1994, the group fee rate was ___%. The money market's total
management fee for fiscal 1994 was ___%.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East on behalf of
the stock funds (except American Gold Portfolio). These sub-advisers
provide FMR with investment research and advice on companies based outside
the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and
FMR Far East fees equal to 110% and 105%, respectively, of the costs of
providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East 50% of its management fee rate
with respect to a fund's investments that the sub-adviser manage on a
discretionary basis.
FMR HAS A SUB-ADVISORY AGREEMENT with FTX, which has primary responsibility
for providing investment management for the money market fund, while FMR
retains responsibility for providing other management services. FMR pays
FTX 50% of its management fee (before expense reimbursements) for these
services. FMR paid FTX __% of the money market fund's average net assets
for fiscal 1994.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing the funds' investments, and handling securities loans. In fiscal
1994 the funds paid FSC the fees outlined in the following chart:
Fee to
Fund FSC
Air Transportation .___%
American Gold .___%
Automotive .___%
Biotechnology .___%
Brokerage and Investment Management .___%
Chemicals .___%
Computers .___%
Construction and Housing .___%
Consumer Products .___%
Defense and Aerospace .___%
Developing Communications .___%
Electronics .___%
Energy .___%
Energy Service .___%
Environmental Services .___%
Financial Services .___%
Food and Agriculture .___%
Health Care .___%
Home Finance .___%
Industrial Equipment .___%
Industrial Materials .___%
Insurance .___%
Leisure .___%
Medical Delivery .___%
Multimedia .___%
Natural Gas .___%
Paper and Forest Products .___%
Precious Metals and Minerals .___%
Regional Banks .___%
Retailing .___%
Software and Computer Services .___%
Technology .___%
Telecommunications .___%
Transportation .___%
Utilities .___%
Money Market .___%
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
Each fund's turnover rate varies from year to year, depending on market
conditions. These rates vary from year to year. High turnover rates
increase transaction costs, and may increase taxable capital gains. Of
course, FMR considers these effects when evaluating the anticipated
benefits of short-term investing. The funds' portfolio turnover rates for
fiscal 1994 were as follows:
Fund Turnover %
Air Transportation .___%
American Gold .___%
Automotive .___%
Biotechnology .___%
Brokerage and Investment Management .___%
Chemicals .___%
Computers .___%
Construction and Housing .___%
Consumer Products .___%
Defense and Aerospace .___%
Developing Communications .___%
Electronics .___%
Energy .___%
Energy Service .___%
Environmental Services .___%
Financial Services .___%
Food and Agriculture .___%
Health Care .___%
Home Finance .___%
Industrial Equipment .___%
Industrial Materials .___%
Insurance .___%
Leisure .___%
Medical Delivery .___%
Multimedia .___%
Natural Gas .___%
Paper and Forest Products .___%
Precious Metals and Minerals .___%
Regional Banks .___%
Retailing .___%
Software and Computer Services .___%
Technology .___%
Telecommunications .___%
Transportation .___%
Utilities .___%
Money Market n/a
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over __ walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the funds or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a Fidelity brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in a fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and capital
gains from current taxes. In addition, contributions to these accounts may
be tax deductible. Retirement accounts require special applications and
typically have lower minimums.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under
70 with earned income to save up to $2,000 per tax year. If your spouse has
earned income of less than $250 per year, you can invest an additional $250
per year in your spouse's name.
ROLLOVER IRAS retain special tax advantages for certain distributions from
employer-sponsored retirement plans.
KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners (and their employees) to
make tax deductible contributions for themselves and any eligible employees
up to $30,000 per year.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners
or those with self-employed income (and their eligible employees) with many
of the same advantages as a Keogh, but with fewer administrative
requirements.
403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt
institutions, including schools, hospitals, and other charitable
organizations.
401(K) PROGRAMS allow employees of corporations of all sizes to contribute
a percentage of their wages on a tax-deferred basis. These accounts need to
be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
INSTITUTIONS, OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated
hourly, each business day, from 10 a.m. to 4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described at right. If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a specially marked application.
Retirement investing also involves its own investment procedures. Call
1-800-544-8888 for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(Registered trademark) and
then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
SHARE PRICE
Once each hour of every business day, two share prices are calculated for
each fund: the offering price and the net asset value (NAV). The offering
price includes the sales charge, if any, which you pay when you buy shares,
unless you qualify for a deduction or waiver as described on page xx. When
you buy shares at the offering price, Fidelity deducts the amount of any
sales charge and invests the rest at the NAV.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
FEES AND KEY INFORMATION
IF YOU SELL SHARES OF A STOCK FUND AFTER HOLDING THEM 29 DAYS OR LESS, THE
FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO .75% OF THE VALUE OF THOSE
SHARES. FOR SHARES HELD 30 DAYS OR LONGER, THE REDEMPTION FEE IS UP TO
$7.50. IN ADDITION, THERE MAY BE A $7.50 FEE FOR EACH EXCHANGE OUT OF A
STOCK FUND.
<TABLE>
<CAPTION>
<S> <C>
PHONE 1-800-544-7777
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(bullet) Maximum check request: $100,000.
(bullet) For Money Line transfers to your bank account; minimum: $10; maximum: $100,000.
ALL ACCOUNT TYPES
(bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s),
address, and taxpayer ID number.
MAIL OR IN PERSON
INDIVIDUAL, JOINT TENANTS, SOLE PROPRIETORSHIPS, UGMA, UTMA
(bullet) The letter of instruction must be signed by all persons required to sign for transactions, exactly as their
names appear on the account.
RETIREMENT ACCOUNTS
(bullet) The account owner should complete a retirement distribution form. Call 1-800-544-6666 to request one.
TRUSTS
(bullet) The trustee must sign the letter indicating capacity as trustee. If the trustee's name is not in the account
registration, provide a copy of the trust document certified within the last 60 days.
BUSINESSES OR ORGANIZATIONS
(bullet) At least one person authorized by corporate resolution to act on the account must sign the letter.
(bullet) Include a corporate resolution with corporate seal or a signature guarantee.
EXECUTORS, ADMINISTRATORS, CONSERVATORS, GUARDIANS
(bullet) Call 1-800-544-6666 for instructions.
WIRE
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(bullet) You must sign up for the wire feature before using it. To verify that it is in place, call 1-800-544-6666.
Minimum wire: $5,000.
(bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be
wired on the next business day.
</TABLE>
(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED:
1-800-544-0118
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated hourly, each business day, from 10 a.m.
to 4 p.m. Eastern time.
Before the fund's current 3% sales charge became effective the funds'
shares were sold with a 2% sales charge and a 1% deferred sales charge. The
deferred sales charge applies to redemptions of fund shares (including
Select Cash Reserves) purchased prior to October 12, 1990, but does not
apply to exchanges between Select funds, or if you qualify for a sales
charge waiver.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on this page.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is not being mailed to the address on your account
(record address),
(bullet) The check is not being made out to the account owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
FEES AND KEY INFORMATION
IF YOU SELL SHARES OF A STOCK FUND AFTER HOLDING THEM 29 DAYS OR LESS, THE
FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO .75% OF THE VALUE OF THOSE
SHARES. FOR SHARES HELD 30 DAYS OR LONGER, THE REDEMPTION FEE IS UP TO
$7.50. IN ADDITION, THERE MAY BE A $7.50 FEE FOR EACH EXCHANGE OUT OF A
STOCK FUND.
<TABLE>
<CAPTION>
<S> <C>
PHONE 1-800-544-7777
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(bullet) Maximum check request: $100,000.
(bullet) For Money Line transfers to your bank account; minimum: $10; maximum: $100,000.
ALL ACCOUNT TYPES
(bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s),
address, and taxpayer ID number.
MAIL OR IN PERSON
INDIVIDUAL, JOINT TENANTS, SOLE PROPRIETORSHIPS, UGMA, UTMA
(bullet) The letter of instruction must be signed by all persons required to sign for transactions, exactly as their
names appear on the account.
RETIREMENT ACCOUNTS
(bullet) The account owner should complete a retirement distribution form. Call 1-800-544-6666 to request one.
TRUSTS
(bullet) The trustee must sign the letter indicating capacity as trustee. If the trustee's name is not in the account
registration, provide a copy of the trust document certified within the last 60 days.
BUSINESSES OR ORGANIZATIONS
(bullet) At least one person authorized by corporate resolution to act on the account must sign the letter.
(bullet) Include a corporate resolution with corporate seal or a signature guarantee.
EXECUTORS, ADMINISTRATORS, CONSERVATORS, GUARDIANS
(bullet) Call 1-800-544-6666 for instructions.
WIRE
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(bullet) You must sign up for the wire feature before using it. To verify that it is in place, call 1-800-544-6666.
Minimum wire: $5,000.
(bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be
wired on the next business day.
</TABLE>
(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED:
1-800-544-0118
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name
(bullet) Your fund's name
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affects your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Fund reports (every six months)
To reduce expenses, only one copy of most fund reports will be mailed to
your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of fund reports or historical account
information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or written exchange. The shares you exchange
will carry credit for any sales charge you previously paid in connection
with their purchase. There is a $7.50 fee for each exchange out of a stock
fund, unless you place your transaction on Fidelity's automated exchange
services. This fee would apply in addition to the redemption fees which you
pay every time you sell your shares.
For exchanges made by mail, orders are executed:
(bullet) Between Select funds, or from a Fidelity money market fund
generally at 10:00 a.m. the day after the order is received.
(bullet) From another Fidelity stock or bond fund, generally at 4:00 p.m.
For exchanges made by phone, orders are executed:
(bullet) From a Select fund or from a Fidelity money market fund, at the
next hourly price following acceptance of your order.
(bullet) From another Fidelity stock or bond fund, at the 4:00 p.m. price
next determined after your order is accepted.
Note that exchanges between Select funds are unlimited, but exchanges out
of the funds to other Fidelity funds are limited to four per calendar year
and that exchanges may have tax consequences for you. For complete policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up monthly or quarterly redemptions
from your account.
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTOR PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDER SM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (bullet) For a new account,
quarterly complete the appropriate
section on the fund
application.
(bullet) For existing accounts,
call 1-800-544-6666 for
an application.
(bullet) To change the amount or
frequency of your
investment, call 1-800-
544-6666 at least three
business days prior to
your next scheduled
investment date.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (bullet) Not available for Select
period stock funds.
(bullet) Check the appropriate
box on the fund
application, or call
1-800-544-6666 for an
authorization form.
(bullet) Changes require a new
authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (bullet) Check the appropriate
period box on the fund
application, or call
1-800-544-6666 for an
authorization form.
(bullet) Changes require a new
authorization form.
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THE STOCK FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each stock fund distributes substantially all of its net investment income
and capital gains to shareholders each year, normally in April and
December. Income dividends for the money market fund are declared daily and
paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options (three for the money market fund):
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution. This option is not available for the money market fund.
3. CASH OPTION. You will be sent a check for each dividend and capital gain
distribution.
4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund. Call 1-800-544-6666 for more
information.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
For the stock funds, distributions will be reinvested, or deducted from the
share price, at 10:00 a.m. on the ex-dividend date. Shareholders of record
at 4:00 p.m. on the business day before the ex-dividend will be entitled to
receive the distribution. For the money market fund, dividends will be
reinvested at 4:00 p.m. of the last day of the month. Cash distribution
checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of the following tax implications:
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them in additional shares.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes these earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. A fund realizes capital
gains whenever it sells securities for a higher
price than it paid for them. These are passed
along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
distribution from its share price, you will pay the full price for the
shares and then receive a portion of the price back as a taxable
distribution.
There are some tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements, a
fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's net asset value and
offering price, hourly, from 10:00 a.m. to 4:00 p.m. each business day of
the NYSE.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding up the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The stock funds' portfolio securities and other assets are valued primarily
on the basis of market quotations or, if quotations are not readily
available, by a method that the Board of Trustees believes accurately
reflects fair value. Foreign securities are valued on the basis of
quotations from the primary market in which they are traded, and are
translated from the local currency into U.S. dollars using current exchange
rates.
The money market fund values the securities it owns on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps the fund to maintain a stable $1.00 share price.
EACH FUND'S OFFERING PRICE (price to buy one share)is the fund's NAV plus a
sales charge. The sales charge is 3% of the offering price, or 3.09% of the
net amount invested. The REDEMPTION PRICE (price to sell one share) is the
fund's NAV plus a redemption fee of $7.50 or of 1% of the value of your
redemptions depending on how long your shares were held. Exchanges will
also be charged an additional $7.50 fee.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identify of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they are of
a size that would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) Each fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees a fund or its transfer agent has
incurred.
(bullet) If you do not specify a particular stock fund, your investment
will be made in the money market fund until FSC receives instructions from
you.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or Direct Deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for service features or fees that
this prospectus may not mention.
Fidelity Brokerage Services, Inc. (FBSI) established a program permitting
customers with Fidelity brokerage accounts to sell short shares of Select
stock funds. FMR reserves the right to suspend the short selling program at
any time in the future.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
Fidelity Distributors Corporation (FDC) may enter confirmed purchase orders
on behalf of customers by phone, with payment to follow no later than the
time when the fund is priced on the following business day. If payment is
not received by that time, the financial institution could be held liable
for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Please
note the following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) Each fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed on days
when the NYSE is closed (other than weekends or holidays), when trading on
the NYSE is restricted, or as permitted by the SEC.
THE REDEMPTION FEE, if applicable, will be deducted from the amount of your
redemption. This fee is paid to the fund rather than FMR, and it does not
apply to shares that were acquired through reinvestment of distributions.
If shares you are redeeming were not all held for the same length of time,
those shares you held longest will be redeemed first for purposes of
determining whether the fee applies.
The long-term redemption fee may be reduced to ensure that the fee is no
greater than 0.75% of the net asset value of the long-term shares redeemed.
Shares acquired through the reinvestment of dividends and capital gains
will be treated as long-term shares for purposes of the redemption fee.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
THE SELECT CASH RESERVES ACCOUNT no longer accepts new investments. If you
have an investment in this account, you may leave it there, redeem your
investment, or exchange your shares for shares of a Select fund or another
Fidelity fund. The 1% deferred sales charge will apply to shares in the
Select Cash Reserves Account redeemed or exchange to another Fidelity fund,
since these shares were available for purchase only when the 1% deferred
sales charge was still in effect. If you redeem by check from Select Cash
Reserves, and the amount of the check is greater than the value of your
account, your check will be returned to you and you may be subject to extra
charges.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from the funds' sales charge and may pay a
portion of them to securities dealers who have sold the fund's shares, or
to others, including banks and other financial institutions (qualified
recipients), under special arrangements in connection with FDC's sales
activities. The sales charge paid is 2.25% of the offering price.
FDC may, at its own expense, provide promotional incentives to
q ualified r ecipients who support the sale of shares of the
funds without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including banks and
other financial institutions, under special arrangements in connection with
FDC's sales activities. In some instances, these incentives may be offered
only to certain institutions whose representatives provide services in
connection with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, you should read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Although there is no limit on the number of exchanges you may
make between the Select funds, the funds reserve the right to enact
limitations in the future. Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to temporarily
or permanently terminate the exchange privilege of any investor who makes
more than four exchanges out of the Select funds to other Fidelity funds
per calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted
together for purposes of the four exchange limit.
(bullet) Each fund reserves the right to reject exchange purchases in
excess of 1% of its net assets or $1 million, whichever is less. For
purposes of this policy, accounts under common ownership or control will be
aggregated.
(bullet) Each fund also reserves the right to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest the money effectively in accordance with its investment objective
and policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if the funds receive
or anticipate simultaneous orders affecting significant portions of the
funds' assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the funds.
(bullet) Each exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
(bullet) For cash management purposes, up to seven days may pass before
exchange proceeds are paid from one Select fund to another, or to another
Fidelity equity fund. Exchange proceeds are recorded in your shareholder
account when the transaction occurs. Therefore, when you exchange from a
stock fund to the money market fund, you will earn money market dividends
immediately. When you exchange from the money market fund to a stock fund,
you will not earn dividends during the seven-day period. This policy could
increase the volatility of the money market fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. Each stock fund's sales charge may be reduced if you invest
directly with Fidelity or through prototype or prototype-like retirement
plans sponsored by FMR or FMR Corp. Purchases made with assistance or
intervention from a financial intermediary are not eligible. The amount you
invest, plus the value of your account, must fall within the ranges shown
below. Call Fidelity to see if your purchase qualifies.
Net amount
Ranges Sales charge invested
$0 - 249,000 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
The sales charge for the stock funds and the money market fund will
also be reduced by the percentage of any sales charge you previously paid
on investments in other Fidelity funds (not including Fidelity's Foreign
Currency Funds). Similarly, your shares carry credit for any sales charge
you would have paid if the reductions in the table above had not been
available. These sales charge credits only apply if you continuously owned
Fidelity fund shares or a Fidelity brokerage core account, or participated
in The CORPORATEplan for Retirement Program, and only to purchases made in
one of the following ways:
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a Fidelity brokerage core account,
including any free credit balance, core money market fund, or margin
availability, to the extent such proceeds were derived from redemption
proceeds from another Fidelity fund.
3. With redemption proceeds from one of Fidelity's Foreign Currency
Portfolios, if the Foreign Currency Portfolio shares were originally
purchased with redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page ).
5. By participants in The CORPORATEplan for Retirement Program when shares
are purchased through plan-qualified loan repayments, and for exchanges
into and out of the Managed Income Portfolio.
WAIVERS. The fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more than
200 eligible employees or a minimum of $3 million in plan assets invested
in Fidelity mutual funds. Plan sponsors are encouraged to notify Fidelity
when they first satisfy either of these requirements.
2. To shares in a Fidelity Rollover IRA account purchased with the proceeds
of a distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan that
both qualified for waiver (1) above and had at least some of its assets
invested in Fidelity-managed products.
3. If you are a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code).
5. If you are an investor participating in the Fidelity Trust Portfolios
program.
6. To shares purchased through Portfolio Advisory Services.
7. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or full-time employee of FMR Corp.
or its direct or indirect subsidiaries (a Fidelity Trustee or employee),
the spouse of a Fidelity trustee or employee, a Fidelity trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a Fidelity
trustee or employee.
8. If you are a bank trust officer, registered representative, or other
employee of a qualified recipient, as defined on page .
9. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed and
distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
10. If you are a registered investment adviser (RIA) purchasing for your
discretionary accounts, provided you execute a Fidelity RIA load waiver
agreement which specifies certain aggregate minimum and operating
provisions. This waiver is available only for shares purchased directly
from Fidelity, without a broker, and is unavailable if the RIA is part of
an organization principally engaged in the brokerage business.
11. If you are a trust institution or bank trust department purchasing for
your non-discretionary, non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is available, if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), (5), and (9) is contained in the
Statement of Additional Information. A representative of your plan or
organization should call Fidelity for more information.
FIDELITY SELECT PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
APRIL __ , 199 4
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated April __ , 199 4 ). Please
retain this document for future reference. The Annual Report for the
fiscal period ended February 28, 199 4 is incorporated herein by
reference. To obtain an additional copy of the Prospectus or the Annual
Report, please call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts With Companies Affiliated With FMR
Description of the Trust
Financial Statements
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
FMR Texas Inc. ( FTX ) (Money Market Portfolio only)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
SEL-ptB- ___
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with the fund's investment
policies and limitations.
The funds of the trust are registered as non-diversified investment
companies (except Financial Services, Regional Banks, Home Finance, and
Money Market Portfolios) Under the Investment Company Act of 1940, as
amended, an investment company is diversified if at least 75% of the value
of its total assets are represented by cash, cash items, U.S. government
securities, and other securities of issuers which represent, with respect
to each issuer, no more than 5% of the value of the investment company's
total assets and no more than 10% of the outstanding voting securities of
such issuer. As a non-diversified investment company, the fund need not
satisfy these conditions. However, the equity funds' fundamental
investment limitations provide that a fund will not purchase the securities
of any issuer (except securities issued or guaranteed by the United States
government or its agencies or instrumentalities) if, as a result, more than
10% of the outstanding voting securities of that issuer would be owned by
the fund. It is anticipated that each of the equity funds, except the
Financial Services, Regional Banks, and Home Finance Portfolios, will
operate as "non-diversified," subject to the above conditions and any other
conditions applicable to the entire trust. The Financial Services,
Regional Banks, and Home Finance Portfolios will not purchase the
securities of any issuer (other than obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, with respect to 75% of its total
assets, more than 5% of a fund's total assets would be invested in the
securities of that issuer, and each will operate as a diversified fund.
The Money Market Portfolio also will operate as a diversified fund. Each
fund intends to meet the diversification requirements necessary to qualify
as a regulated investment company for purposes of the Internal Revenue
Code. (See non-fundamental limit (i) on page _ and "Distributions
and Taxes" beginning on page _ .)
Each fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of that
fund. However, with respect to the money market fund, except for the
fundamental investment limitations set forth below, the investment policies
and limitations described in this Statement of Additional Information are
not fundamental and may be changed without shareholder approval THE
FOLLOWING ARE EACH EQUITY FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. EACH EQUITY FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that a fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days ( not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that a
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase or sell the securities of any issuer, if, as a result of such
purchase or sale, less than 25% of the assets of the fund would be invested
in the securities of issuers principally engaged in the business activities
having the specific characteristics denoted by the fund;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent a
fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent a
fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities). This limitation does not apply to the Precious Metals and
Minerals Portfolio (see below) or to the American Gold Portfolio;
(7) lend any security or make any other loan if, as a result, more than
33 1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
IN ADDITION, A FUND MAY:
(8) notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objectives, policies, and limitations as the fund.
THE PRECIOUS METALS AND MINERALS PORTFOLIO MAY NOT:
(1) purchase any precious metal if, as a result, more than 50% of its total
assets would be invested in precious metals; or
(2) purchase or sell physical commodities, provided that the fund may
purchase and sell precious metals, and further provided that the fund may
sell physical commodities acquired as a result of ownership of securities.
The fund may not purchase or sell options, options on futures contracts, or
futures contracts on physical commodities other than precious metals.
THE FINANCIAL SERVICES, REGIONAL BANKS, AND HOME FINANCE PORTFOLIOS
MAY NOT:
(1) with respect to 75% of total assets, purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) if, as a result,
more than 5% of its total assets would be invested in the securities of
that issuer.
THE FOLLOWING ARE THE EQUITY FUNDS' NON-FUNDAMENTAL LIMITATIONS WHICH MAY
BE CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," each fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) Each fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iii) Each fund does not currently intend to purchase securities on
margin, except that a fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
( i v) Each fund does not currently intend to hedge more than 40% of
its total assets with short sales against the box under normal conditions.
(v) Each fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). Each fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. Each fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(vi) Each fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vii) Each fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
( vii ) Each fund (except the American Gold Portfolio and the Precious
Metals and Minerals Portfolio) will not purchase physical commodities, or
purchase or sell futures contracts based on physical commodities.
( i x) The American Gold Portfolio and the Precious Metals and
Minerals Portfolio will each limit investment in gold bullion or coins to
no more than 25% of its total assets.
(x) Each fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 5% of its net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not apply to
purchases of debt securities or to repurchase agreements.)
(xi) Each fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(xii) Each fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic and foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(xi ii ) Each fund does not currently intend to purchase warrants,
valued at the lower of cost or market, in excess of 5% of the fund's net
assets. Included in that amount, but not to exceed 2% of a fund's net
assets, may be warrants that are not listed on the New York Stock Exchange
or the American Stock Exchange. Warrants acquired by a fund in units or
attached to securities are not subject to these restrictions. The
Brokerage and Investment Management Portfolio and Financial Services
Portfolio are subject to additional restrictions on the purchase of
warrants and rights. See page 6.
(x i v) Each fund does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases; provided,
however, that if consistent with the designated business activities of a
particular fund, a fund may purchase securities of issuers whose principal
business activities fall within these areas.
(xv) Each fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xvi) Each fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the funds.
For the equity funds' limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
beginning on page __.
THE FOLLOWING ARE THE MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE MONEY MARKET FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer.
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and (ii)
engage in reverse repurchase agreements for any purpose; provided that (i)
and (ii) in combination do not exceed 33 1/3% of the fund's total assets
(including the amount borrowed) less liabilities (other than borrowings).
Any borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
( 4 ) underwrite securities issued by others, except to the extent
that the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
( 5 ) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
( 8 ) lend any security or make any other loan if, as a result,
more than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements;
(9) invest in companies for the purpose of exercising control or
management.
IN ADDITION, THE FUND MAY:
(10) notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objectives, policies, and limitations as the fund.
THE FOLLOWING ARE THE MONEY MARKET FUND'S NON-FUNDAMENTAL LIMITATIONS WHICH
MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other
than a security issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days.
(ii) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security whil borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vii) The fund does not currently intend to purchase physical commodities
or purchase or sell futures contracts based on physical commodities.
(viii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
(xii) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to or acquired or traded together with their underlying securities
and does not apply to securities that incorporate features similar to
options or futures contracts.
(xiii) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objective, policies, and
limitations as the fund.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO AND FINANCIAL SERVICES
PORTFOLIO Rule 12d3-1 under the Investment Company Act of 1940, as
amended, allows investment portfolios such as these funds to invest in
companies engaged in securities-related activities subject to certain
conditions. Purchases of securities of a company that derived 15% or less
of gross revenues during its most recent fiscal year from
securities-related activities (i.e., broker/dealer, underwriting, or
investment advisory activities) are subject only to the same percentage
limitations as would apply to any other security the funds may purchase.
Each fund may purchase securities of an issuer that derived more than 15%
of its gross revenues in its most recent fiscal year from
securities-related activities, subject to the following conditions:
a. the purchase cannot cause more than 5% of the fund's total assets to
be invested in securities of that issuer;
b. for an equity security, the purchase cannot result in the fund owning
more than 5% of the issuer's outstanding securities in that class;
c. for a debt security, the purchase cannot result in the fund owning
more than 10% of the outstanding principal amount of the issuer's debt
securities.
In applying the gross revenue test, an issuer's own securities-related
activities must be combined with its ratable share of securities-related
revenues from enterprises in which it owns a 20% or greater voting or
equity interest. All of the above percentage limitations, as well as the
issuer's gross revenue test, are applicable at the time of purchase. With
respect to warrants, rights, and convertible securities, a determination of
compliance with the above limitations shall be made as though such warrant,
right, or conversion privilege had been exercised. Neither fund will be
required to divest its holdings of a particular issuer when circumstances
subsequent to the purchase cause one of the above conditions to not be met.
The funds are not permitted to acquire any security issued by FMR, FDC, or
any affiliated company of these companies that is a securities-related
business. The purchase of a general partnership interest in a
securities-related business is prohibited.
MULTIMEDIA PORTFOLIO
The Federal Communications Commission (FCC) has certain rules which limit
ownership of corporate broadcast licensees in an effort to assure that no
one person or entity (including mutual funds) exercises an unacceptable
degree of influence or control over broadcast facilities. Current FCC
rules prohibit the fund, together with all other funds advised by FMR, from
holding in the aggregate 10% of the voting stock of more than 18 AM, 18 FM,
or 12 TV broadcast stations. If the officer or director of a broadcast
licensee is a representative of the fund, that licensee must also be taken
into account in determining whether the limitation on the number of
stations has been exceeded. FCC rules also limit investment in multiple
stations serving the same area.
The attribution rules are not applicable to noncommercial educational FM
and TV stations, or to TV stations that are primarily "satellite"
operations. In addition, the rules do not restrict the ownership of a
broadcast licensee if any other person holds more than 50% of the
outstanding voting stock of the licensee. These limitations apply to the
aggregate assets of Multimedia Portfolio and of all funds managed by
FMR.
AMERICAN GOLD PORTFOLIO AND PRECIOUS METALS AND MINERALS PORTFOLIO
The American Gold Portfolio and the Precious Metals and Minerals Portfolio
each have the authority to invest a portion of their assets in gold. The
Precious Metals and Minerals Portfolio can invest in other precious metals,
such as platinum, palladium, and silver. No more than 50% of the American
Gold Portfolio's total assets may be invested in gold bullion or coins. No
more than 50% of the Precious Metals and Minerals Portfolio's total assets
may be invested in precious metals, including gold bullion or coins.
FMR does not currently intend that either fund will hold gold coins, but
the Trustees reserve the right of the Portfolios to do so in the future.
Transactions in gold coins will be entered into only with prior approval by
the Trustees, prior notice to current shareholders, and provided that
disclosure regarding the nature of such investments is set forth in a
subsequent Prospectus that is part of the Registration Statement declared
effective by the Securities and Exchange Commission. In addition, the
ability of the funds to hold gold coins may be restricted by the securities
laws and/or regulations of states where the funds' shares are qualified for
sale.
The funds may also consider investments in securities indexed to the price
of gold (both funds) or other precious metals (Precious Metals Portfolio
only) as an alternative to direct investments in precious metals. These
securities are discussed on page 11.
The Precious Metals and Minerals Portfolio's gold-related investments will
often contain securities of companies located in the Republic of South
Africa, which is a principal producer of gold. Unsettled political and
social conditions in South Africa and its neighboring countries, may from
time to time pose certain risks to the Precious Metals and Minerals
Portfolio's investments in South African issuers. These events could also
have an impact on the American Gold Portfolio through their influence on
the price of gold and related mining securities worldwide.
FUND DESCRIPTIONS
THE EQUITY FUNDS INVEST PRIMARILY WITHIN THE INVESTMENT AREAS DESCRIBED
BELOW.
AIR TRANSPORTATION PORTFOLIO: COMPANIES ENGAGED IN THE REGIONAL,
NATIONAL AND INTERNATIONAL MOVEMENT OF PASSENGERS, MAIL, AND FREIGHT VIA
AIRCRAFT. Such companies include the major airlines, commuter airlines, air
cargo and express delivery operators, air freight forwarders, aviation
service firms, and manufacturers of aeronautical equipment.
Airline deregulation has substantially diminished the government's role
in the air transport industry while promoting an increased level of
competition. However, regulations and policies of various domestic and
foreign governments can still affect the profitability of individual
carriers as well as the entire industry. In addition to regulations and
competition, the air transport industry is also very sensitive to fuel
price levels and the state of foreign and domestic economies.
AMERICAN GOLD PORTFOLIO: COMPANIES ENGAGED IN EXPLORATION, MINING,
PROCESSING, OR DEALING IN GOLD, OR, TO A LESSER DEGREE, IN SILVER,
PLATINUM, DIAMONDS, OR OTHER PRECIOUS METALS AND MINERALS. FMR also may
invest in securities of companies which themselves invest in companies
engaged in these activities. Normally at least 80% of the fund's assets
will be invested in securities of North, Central and South American
companies engaged in gold-related activities, and in gold bullion or
coins.
The prices of gold and other precious metal mining securities have been
subject to substantial fluctuations over short periods of time and may be
affected by unpredictable international monetary and political developments
such as currency devaluations or revaluations, economic and social
conditions within a country, trade imbalances, or trade or currency
restrictions between countries. Since much of the world's gold reserves are
located in South Africa, the social upheaval and related economic
difficulties there may, from time to time, influence the price of gold and
the share values of precious metals mining companies located elsewhere.
Investors should understand the special considerations and risks related to
such an investment emphasis, and, accordingly, the potential effect on the
fund's value.
In addition to its investments in securities, the fund may invest a
portion of its assets in gold bullion or coins. The price of gold is
affected by broad economic and political conditions, but is less subject to
local and company-specific factors than securities of individual companies.
As a result, gold may be more or less volatile in price than securities of
companies engaged in gold-related businesses. FMR intends to purchase only
those forms of gold that are readily marketable and that can be stored in
accordance with custody regulations applicable to mutual funds. The fund
may incur higher custody and transaction costs for gold than for
securities.
The fund is authorized to invest up to 50% of its total assets in gold
bullion or coins; however, as a non-fundamental policy (which can be
changed without shareholder approval), FMR does not currently intend to
purchase gold if, as a result, more than 25% of the fund's total assets
would be invested in gold, and does not currently intend to purchase coins.
As a further limit on gold investments, under current federal tax law,
gains from selling gold may not exceed 10% of the fund's annual gross
income. This tax requirement could cause the fund to hold or sell bullion
or securities when it would not otherwise do so. The fund also may purchase
securities whose redemption value is indexed to the price of gold, which
are discussed in the Statement of Additional Information. Because the value
of these securities is directly linked to the price of gold, they involve
risks and pricing characteristics similar to direct investments in gold.
FMR currently intends to treat such securities as gold investments for the
purposes of the 25% and 50% limitations above and the 80% policy in the
first paragraph of this section.
AUTOMOTIVE PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE, MARKETING OR
SALE OF AUTOMOBILES, TRUCKS, SPECIALTY VEHICLES, PARTS, TIRES, AND RELATED
SERVICES. These companies include those involved with the manufacture and
distribution of vehicles, vehicle parts and tires - either original
equipment or for the aftermarket - and those which are involved in the
retail sale of vehicles, parts or tires. In addition, the fund may invest
in companies that provide automotive-related services to manufacturers,
distributors or consumers.
The automotive industry is highly cyclical and companies involved in
this business may suffer periodic operating losses. While most of the major
manufacturers are large, financially strong companies, many others are
small and may be non-diversified in both product line and customer
base.
BIOTECHNOLOGY PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH, DEVELOPMENT,
SCALE UP AND MANUFACTURE OF VARIOUS BIOTECHNOLOGICAL PRODUCTS, SERVICES AND
PROCESSES. These include companies involved with new or experimental
technologies such as genetic engineering, hybridoma and recombinant DNA
techniques and monoclonal antibodies. The fund may also invest in companies
that manufacture and/or distribute biotechnological and biomedical
products, including devices and instruments, and in companies that provide
or benefit significantly from scientific and technological advances in
biotechnology. Some biotechnology companies may provide processes or
services instead of, or in addition to, products.
The description of the biotechnology sector will be interpreted broadly
by FMR, and may include applications and developments in such areas as
human health care (e.g., cancer, infectious disease, diagnostics and
therapeutics); pharmaceuticals (e.g., new drug development and production);
agricultural and veterinary applications (e.g., improved seed varieties,
animal growth hormones); chemicals (e.g., enzymes, toxic waste treatment);
medical/surgical (e.g., epidermal growth factor, in vivo
imaging/therapeutics); and industry (e.g., biochips, fermentation, enhanced
mineral recovery).
Many of these companies may have losses and may not offer products until
the late 1990's. These companies may have persistent losses during a new
product's transition from development to production, and revenue patterns
may be erratic. In addition, biotechnology companies are affected by patent
considerations, intense competition, rapid technological change and
obsolescence, and regulatory requirements of the U.S. Food and Drug
Administration, the Environmental Protection Agency, state and local
governments, and foreign regulatory authorities. Many of these companies
are relatively small and their stock is thinly traded.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO: COMPANIES ENGAGED IN
STOCK BROKERAGE, COMMODITY BROKERAGE, INVESTMENT BANKING, TAX-ADVANTAGED
INVESTMENT OR INVESTMENT SALES, INVESTMENT MANAGEMENT, OR RELATED
INVESTMENT ADVISORY SERVICES. Holdings may include diversified companies
with operations in the aforementioned areas, in addition to firms
principally engaged in brokerage activities or investment management. The
fund will not invest in securities of FMR or its affiliated companies.
Changes in regulations, the brokerage commission structure, and the
competitive environment, combined with the operating leverage inherent in
companies in these industries, can produce erratic revenues and earnings
over time. The performance of companies in this industry can be closely
tied to the stock market and can suffer during market declines. Revenues
often depend on overall market activity. Securities and Exchange Commission
regulations provide that the fund may not invest more than 5% of its total
assets in the securities of any one company that derives more than 15% of
its revenues from brokerage or investment management activities. These
companies, as well as those deriving more than 15% of profits from
brokerage and investment management activities, will be considered to be
"principally engaged" in this fund's specific business activity.
CHEMICALS PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH, DEVELOPMENT,
MANUFACTURE OR MARKETING OF PRODUCTS OR SERVICES RELATED TO THE CHEMICAL
PROCESS INDUSTRIES. Such products may include synthetic and natural
materials, such as basic and intermediate organic and inorganic chemicals,
plastics, synthetic fibers, fertilizers, industrial gases, flavorings,
fragrances, biological materials, catalysts, carriers, additives, and
process aids. The fund may also hold the securities of companies providing
design, engineering, construction, and consulting services to companies
engaged in chemical processing.
Companies in the chemical processing field are subject to regulation by
various federal and state authorities, including the Environmental
Protection Agency and its state agency counterparts. As regulations are
developed and enforced, such companies may be required to alter or cease
production of a product, to pay fines or to pay for cleaning up a disposal
site, or to agree to restrictions on their operations. In addition, some of
the materials and processes used by these companies involve hazardous
components. There are risks associated with their production, handling and
disposal. These risks are in addition to the more common risks of intense
competition and product obsolescence.
COMPUTERS PORTFOLIO: COMPANIES ENGAGED IN RESEARCH, DESIGN, DEVELOPMENT,
MANUFACTURE OR DISTRIBUTION OF PRODUCTS, PROCESSES OR SERVICES THAT RELATE
TO CURRENTLY AVAILABLE OR EXPERIMENTAL HARDWARE TECHNOLOGY WITHIN THE
COMPUTER INDUSTRY. The fund may hold securities of companies that provide
the following products or services: mainframes, minicomputers,
microcomputers, peripherals, data or information processing, office or
factory automation, robotics, artificial intelligence, computer aided
design, medical technology, engineering and manufacturing, data
communications and software.
Competitive pressures may have a significant effect on the financial
conditions of companies in the computer industry. For example, as product
cycles shorten and manufacturing capacity increases, these companies could
become increasingly subject to aggressive pricing, which hampers
profitability. Fluctuating domestic and international demand also affect
profitability.
CONSTRUCTION AND HOUSING PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN AND
CONSTRUCTION OF RESIDENTIAL, COMMERCIAL, INDUSTRIAL AND PUBLIC WORKS
FACILITIES, AS WELL AS COMPANIES ENGAGED IN THE MANUFACTURE, SUPPLY,
DISTRIBUTION OR SALE OF PRODUCTS OR SERVICES TO THESE CONSTRUCTION
INDUSTRIES. Examples of companies engaged in these activities include
companies that provide engineering and contracting services, and companies
that produce basic building materials such as cement, aggregates, gypsum,
timber, wall coverings, and floor coverings.
The fund also may invest in the securities of companies involved in real
estate development and construction financing. Such companies could include
homebuilders, architectural and design firms, and property managers.
Additionally, the fund may invest in the securities of companies involved
in the home improvement and maintenance industry, which would include
building material retailers and distributors, household service firms, and
those that supply such companies.
The companies that the fund may invest in are subject to, among other
factors, changes in government spending on public works and transportation
facilities such as highways and airports, as well as changes in interest
rates and levels of economic activity, government-sponsored housing subsidy
programs, rate of housing turnover, taxation, demographic patterns,
consumer spending, consumer confidence, and new and existing home
sales.
CONSUMER PRODUCTS PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE AND
DISTRIBUTION OF GOODS TO CONSUMERS BOTH DOMESTICALLY AND INTERNATIONALLY.
The fund may invest in companies that manufacture or sell durable products
such as homes, cars, boats, furniture, major appliances, and personal
computers.
The fund will also invest in companies that manufacture, wholesale, or
retail non-durable goods such as food, beverages, tobacco, health care
products, household and personal care products, apparel, and entertainment
products (books, magazines, TV, cable, movies, music). Consumer products
and services such as lodging, child care, convenience stores, and car
rentals may also be represented in the fund.
The success of durable goods manufacturers and retailers is closely tied
to the performance of the overall economy, interest rates, and consumer
confidence. These segments are very competitive; success depends heavily on
household disposable income and consumer spending. Consumer product and
retailing concepts tend to rise and fall with changes in demographics and
consumer tastes.
DEFENSE AND AEROSPACE PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
MANUFACTURE OR SALE OF PRODUCTS OR SERVICES RELATED TO THE DEFENSE OR
AEROSPACE INDUSTRIES. The fund may hold securities of companies that
provide the following products or services: air transport; data processing,
or computer-related services; communications systems; research; development
and manufacture of military weapons and transportation; general aviation
equipment, missiles, space launch vehicles, and spacecraft; units for
guidance, propulsion, and control of flight vehicles; equipment components
and airborne and ground-based equipment essential to the testing,
operation, and maintenance of flight vehicles.
Companies involved in the defense and aerospace industries rely to a
large extent on U.S. (and other) government demand for their products and
services. The financial condition of such companies and investor interest
in the stocks of these companies are heavily influenced by federal defense
and aerospace spending policies. For example, defense spending is currently
under pressure from efforts to control the U.S. budget deficit.
DEVELOPING COMMUNICATIONS PORTFOLIO: COMPANIES ENGAGED IN THE
DEVELOPMENT, MANUFACTURE OR SALE OF EMERGING COMMUNICATIONS SERVICES OR
EQUIPMENT. The fund may invest in companies developing or offering services
or products based on communications technologies such as cellular, paging,
personal communications networks, special mobile radio, facsimile, fiber
optic transmission, voice mail, video conferencing, microwave, satellite,
local and wide area networking, and other transmission electronics. For
purposes of characterizing the fund's investments, communications services
or equipment may be deemed to be "emerging" if they derive from new
technologies or new applications of existing technologies. The fund will
focus on companies whose business is based on these emerging technologies,
with less emphasis on traditional telephone utilities and large long
distance carriers. The fund will attempt to exploit growth opportunities
presented by new technologies and applications in the communications field.
Many of these opportunities may be in the development stage and, as such,
can pose large risks as well as potential rewards. Such risks might include
failure to obtain (or delays in obtaining) adequate financing or necessary
regulatory approvals, intense competition, product incompatibility,
consumer preferences and rapid obsolescence. Securities of small companies
that base their business on emerging technologies may be volatile due to
limited product lines, markets, or financial resources.
ELECTRONICS PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, MANUFACTURE, OR
SALE OF ELECTRONIC COMPONENTS (SEMICONDUCTORS, CONNECTORS, PRINTED CIRCUIT
BOARDS AND OTHER COMPONENTS); EQUIPMENT VENDORS TO ELECTRONIC COMPONENT
MANUFACTURERS; ELECTRONIC COMPONENT DISTRIBUTORS; AND ELECTRONIC
INSTRUMENTS AND ELECTRONIC SYSTEMS VENDORS. In addition, the fund may
invest in companies in the fields of defense electronics, medical
electronics, consumer electronics, advanced manufacturing technologies
(computer-aided design and computer-aided manufacturing [CAD/CAM],
computer-aided engineering, and robotics), lasers and electro-optics, and
other new electronic technologies. Many of the products offered by
companies engaged in the design, production or distribution of electronic
products are subject to risks of rapid obsolescence.
ENERGY PORTFOLIO: COMPANIES IN THE ENERGY FIELD, INCLUDING THE
CONVENTIONAL AREAS OF OIL, GAS, ELECTRICITY AND COAL, AND NEWER SOURCES OF
ENERGY SUCH AS NUCLEAR, GEOTHERMAL, OIL SHALE AND SOLAR POWER. The business
activities of companies held in the Energy Portfolio may include:
production, generation, transmission, marketing, control, or measurement of
energy or energy fuels; providing component parts or services to companies
engaged in the above activities; energy research or experimentation; and
environmental activities related to the solution of energy problems, such
as energy conservation and pollution control. Companies participating in
new activities resulting from technological advances or research
discoveries in the energy field will also be considered for this fund.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the price
and supply of energy fuels. Swift price and supply fluctuations may be
caused by events relating to international politics, energy conservation,
the success of exploration projects, and tax and other regulatory policies
of various governments.
ENERGY SERVICE PORTFOLIO: COMPANIES IN THE ENERGY SERVICE FIELD,
INCLUDING THOSE THAT PROVIDE SERVICES AND EQUIPMENT TO THE CONVENTIONAL
AREAS OF OIL, GAS, ELECTRICITY AND COAL, AND NEWER SOURCES OF ENERGY SUCH
AS NUCLEAR, GEOTHERMAL, OIL SHALE AND SOLAR POWER. Holdings may include
companies involved in providing services and equipment for drilling
processes such as offshore and onshore drilling, drill bits, drilling rig
equipment, drilling string equipment, drilling fluids, tool joints and
wireline logging. Many energy service companies are engaged in production
and well maintenance, providing such products and services as packers,
perforating equipment, pressure pumping, downhole equipment, valves, pumps,
compression equipment, and well completion equipment and service. Certain
companies supply energy providers with exploration technology such as
seismic data, geological and geophysical services, and interpretation of
this data. Holdings may also include companies with a variety of products
or services including pipeline construction, oil tool rental, underwater
well services, helicopter services, geothermal plant design or
construction, electric and nuclear plant design or construction,
energy-related capital equipment, mining related equipment or services, and
high technology companies serving the above industries.
Energy service firms are affected by supply, demand and other normal
competitive factors for their specific products or services. They are also
affected by other unpredictable factors such as supply and demand for oil
and gas, prices of oil and gas, exploration and production spending,
governmental regulation, world events and economic conditions.
ENVIRONMENTAL SERVICES PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
DEVELOPMENT, MANUFACTURE OR DISTRIBUTION OF PRODUCTS, PROCESSES OR SERVICES
RELATED TO WASTE MANAGEMENT OR POLLUTION CONTROL. Such products or services
may include the transportation, treatment and disposal of both hazardous
and solid wastes, including waste-to-energy and recycling; remedial project
efforts, including groundwater and underground storage tank
decontamination, asbestos cleanup and emergency cleanup response; and the
detection, analysis, evaluation, and treatment of both existing and
potential environmental problems including, among others, contaminated
water, air pollution, and acid rain. The fund may also hold the securities
of companies providing design, engineering, construction, and consulting
services to companies engaged in waste management or pollution control.
The environmental services industry has generally been positively
influenced by legislation resulting in stricter government regulations and
enforcement policies for both commercial and governmental generators of
waste materials, as well as specific expenditures designated for remedial
cleanup efforts. Companies in the environmental services field are also
affected by regulation by various federal and state authorities, including
the federal Environmental Protection Agency and its state agency
counterparts. As regulations are developed and enforced, such companies may
be required to alter or cease production of a product or service or to
agree to restrictions on their operations. In addition, since the materials
handled and processes involved include hazardous components, there is
significant liability risk. There are also risks of intense competition
within the environmental services industry.
FINANCIAL SERVICES PORTFOLIO: COMPANIES PROVIDING FINANCIAL SERVICES TO
CONSUMERS AND INDUSTRY. Companies in the financial services field include:
commercial banks and savings and loan associations, consumer and industrial
finance companies, securities brokerage companies, real estate-related
companies, leasing companies, and a variety of firms in all segments of the
insurance field such as multi-line, property and casualty, and life
insurance.
The financial services area is currently undergoing relatively rapid
change as existing distinctions between financial service segments become
less clear. For instance, recent business combinations have included
insurance, finance, and securities brokerage under single ownership. Some
primarily retail corporations have expanded into securities and insurance
fields. Moreover, the federal laws generally separating commercial and
investment banking are currently being studied by Congress.
Banks, savings and loan associations, and finance companies are subject
to extensive governmental regulation which may limit both the amounts and
types of loans and other financial commitments they can make and the
interest rates and fees they can charge. The profitability of these groups
is largely dependent on the availability and cost of capital funds, and can
fluctuate significantly when interest rates change. In addition, general
economic conditions are important to the operations of these concerns, with
exposure to credit losses resulting from possible financial difficulties of
borrowers potentially having an adverse effect. Insurance companies are
likewise subject to substantial governmental regulation, predominantly at
the state level, and may be subject to severe price competition.
Securities and Exchange Commission regulations provide that the fund may
not invest more than 5% of its assets in the securities of any one company
that derives more than 15% of its revenues from brokerage or investment
management activities. These companies as well as those deriving more than
15% of profits from brokerage and investment management activities will be
considered to be "principally engaged" in this fund's business
activity.
FOOD AND AGRICULTURE PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
SALE OR DISTRIBUTION OF FOOD AND BEVERAGE PRODUCTS, AGRICULTURAL PRODUCTS,
AND PRODUCTS RELATED TO THE DEVELOPMENT OF NEW FOOD TECHNOLOGIES. The goods
and services provided or manufactured by companies in the fund may include:
packaged food products such as cereals, pet foods and frozen foods; meat
and poultry processing; the production of hybrid seeds; the wholesale and
retail distribution and warehousing of food and food-related products,
including restaurants; and the manufacture and distribution of health food
and dietary products, fertilizer and agricultural machinery, wood products,
tobacco, and tobacco leaf. In addition to the above, food technology
companies engaged in and pioneering the development of new technologies to
provide improved hybrid seeds, new and safer food storage, and new enzyme
technologies may be purchased by the fund.
The success of food and food-related products is closely tied to supply
and demand, which may be strongly affected by demographic and product
trends, stimulated by food fads, marketing campaigns, and environmental
factors. In the U.S., the agricultural products industry is subject to
regulation by numerous federal and municipal government agencies.
HEALTH CARE PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, MANUFACTURE, OR
SALE OF PRODUCTS OR SERVICES USED FOR OR IN CONNECTION WITH HEALTH CARE OR
MEDICINE. Companies in the health care field include pharmaceutical
companies; firms that design, manufacture, sell, or supply medical, dental,
and optical products, hardware or services; companies involved in
biotechnology, medical diagnostic, and biochemical research and
development, as well as companies involved in the operation of health care
facilities. Many of these companies are subject to government regulation of
their products and services, a factor which could have a significant and
possibly unfavorable effect on the price and availability of such products
or services. Furthermore, the types of products or services produced or
provided by these companies may become obsolete quickly.
HOME FINANCE PORTFOLIO : COMPANIES ENGAGED IN INVESTING IN REAL ESTATE,
USUALLY THROUGH MORTGAGES AND OTHER CONSUMER-RELATED LOANS. These companies
may also offer discount brokerage services, insurance products, leasing
services, and joint venture financing. Investments may include mortgage
banking companies, government-sponsored enterprises, real estate investment
trusts, consumer finance companies, and similar entities, as well as
savings and loan associations, savings banks, building and loan
associations, cooperative banks, commercial banks, and similar depository
institutions. The fund may hold securities of U.S. depository institutions
whose customer deposits are insured by the Savings Association Insurance
Fund (SAIF) or the Bank Insurance Fund (BIF).
The residential real estate finance industry has changed rapidly over
the last decade. Regulatory changes at federally insured institutions, in
response to a high failure rate, have mandated higher capital ratios and
more prudent underwriting. This reduced capacity has created growth
opportunities for uninsured companies and secondary market products to fill
unmet demand for home finance. Continued change in the origination,
packaging, selling, holding, and insuring of home finance products is
expected going forward.
The fund will be influenced by potential regulatory changes, interest
rate movements, the level of home mortgage demand, and residential
delinquency trends.
INDUSTRIAL EQUIPMENT PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
DISTRIBUTION OR SERVICE OF PRODUCTS AND EQUIPMENT FOR THE INDUSTRIAL
SECTOR, INCLUDING INTEGRATED PRODUCERS OF CAPITAL EQUIPMENT (SUCH AS
GENERAL INDUSTRY MACHINERY, FARM EQUIPMENT, AND COMPUTERS), PARTS SUPPLIERS
AND SUBCONTRACTORS. The fund may invest in companies that manufacture
products or service equipment for the food, clothing or sporting goods
industries.
The success of equipment manufacturing and distribution companies is
closely tied to overall capital spending levels. Capital spending is
influenced by the individual company's profitability, and broader issues
such as interest rates and foreign competition, which are partly determined
by currency exchange rates. Equipment manufacturing concerns may also be
affected by economic cycles, technical obsolescence, labor relations
difficulties and government regulations pertaining to products, production
facilities, or production processes.
INDUSTRIAL MATERIALS PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
MINING, PROCESSING, OR DISTRIBUTION OF RAW MATERIALS AND INTERMEDIATE GOODS
USED IN THE INDUSTRIAL SECTOR. The products handled by the companies held
in the fund may include chemicals, timber, paper, copper, iron ore, nickel,
steel, aluminum, textiles, cement, and gypsum. Investments may also be made
in the securities of mining, processing, transportation, and distribution
companies, including equipment suppliers and railroads.
Many companies in this sector are significantly affected by the level
and volatility of commodity prices, the exchange value of the dollar,
import controls, and worldwide competition. At times, worldwide production
of these materials has exceeded demand as a result of over-building or
economic downturns. During these times, commodity price declines, and unit
volume reductions have led to poor investment returns and losses. Other
risks include liability for environmental damage, depletion of resources,
and mandated expenditures for safety and pollution control.
INSURANCE PORTFOLIO: COMPANIES ENGAGED IN UNDERWRITING, REINSURING,
SELLING, DISTRIBUTING, OR PLACING OF PROPERTY AND CASUALTY, LIFE, OR HEALTH
INSURANCE. The fund may invest in multi-line companies that provide
property and casualty coverage, as well as life and health insurance. The
fund may invest in insurance brokers, reciprocals, and claims processors.
The fund may also invest in diversified financial companies with
subsidiaries (including insurance brokers, reciprocals and claims
processors) engaged in underwriting, reinsuring, selling, distributing or
placing insurance with independent third parties.
Insurance company profits are affected by interest rate levels, general
economic conditions, and price and marketing competition. Property and
casualty insurance profits may also be affected by weather catastrophes and
other disasters. Life and health insurance profits may be affected by
mortality and morbidity rates. Individual companies may be exposed to
material risks including reserve inadequacy and the inability to collect
from reinsurance carriers. Insurance companies are subject to extensive
governmental regulation, including the imposition of maximum rate levels,
which may not be adequate for some lines of business. Proposed or potential
tax law changes may also adversely affect insurance companies' policy
sales, tax obligations, and profitability.
LEISURE PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, PRODUCTION, OR
DISTRIBUTION OF GOODS OR SERVICES IN THE LEISURE INDUSTRIES. The goods or
services provided by companies in the fund may include: television and
radio broadcast or manufacture (including cable television); motion
pictures and photography; recordings and musical instruments; publishing,
including newspapers and magazines; sporting goods and camping and
recreational equipment; and sports arenas. Other goods and services may
include toys and games (including video and other electronic games),
amusement and theme parks, travel-related services, hotels and motels,
leisure apparel or footwear, fast food, beverages, restaurants, and gaming
casinos.
Securities of companies in the leisure industry may be considered
speculative. Companies engaged in entertainment, gaming, broadcasting,
cable television and cellular communications, for example, have
unpredictable earnings, due in part to changing consumer tastes and intense
competition. Securities of companies in the leisure industry generally
exhibit greater volatility than the overall market. The market has been
known to react strongly to technological developments and to the specter of
government regulation in the leisure industry.
MEDICAL DELIVERY PORTFOLIO: COMPANIES ENGAGED IN THE OWNERSHIP OR
MANAGEMENT OF HOSPITALS, NURSING HOMES, HEALTH MAINTENANCE ORGANIZATIONS,
AND OTHER COMPANIES SPECIALIZING IN THE DELIVERY OF HEALTH CARE SERVICES.
Holdings may include companies that operate acute care, psychiatric,
teaching, or specialized treatment hospitals; firms that provide outpatient
surgical, outpatient rehabilitation, or other specialized care, home health
care, drug and alcohol abuse treatment, and dental care; firms operating
comprehensive health maintenance organizations and nursing homes for the
elderly and disabled; and firms that provide related laboratory
services.
Federal and state governments provide a substantial percentage of
revenues to health care service providers via Medicare and Medicaid. The
future growth of this source of funds is subject to great uncertainty.
Additionally, the complexion of the private payment system is changing. For
example, insurance companies are beginning to offer long term health care
insurance for nursing home patients to supplement or replace government
benefits. Also, membership in health maintenance organizations or prepaid
health plans is displacing individual payments for each service rendered by
a hospital or physician.
The demand for health care services will tend to increase as the
population ages. However, review of patients' need for hospitalization by
Medicare and health maintenance organizations has demonstrated the ability
of health care providers to curtail unnecessary hospital stays and reduce
costs.
MULTIMEDIA PORTFOLIO (FORMERLY BROADCAST AND MEDIA PORTFOLIO): COMPANIES
ENGAGED IN THE DEVELOPMENT, PRODUCTION, SALE AND DISTRIBUTION OF GOODS OR
SERVICES USED IN THE BROADCAST AND MEDIA INDUSTRIES. Business activities of
companies held in the fund may include: ownership, operation, or broadcast
of free or pay television, radio or cable stations; publication and sale of
newspapers, magazines, books or video products; and distribution of
data-based information. The fund may also invest in companies involved in
the development, syndication and transmission of the following products:
television and movie programming, pay-per-view television, advertising,
cellular communications, and emerging technology for the broadcast and
media industries.
Some of the companies in these industries are undergoing significant
change because of federal deregulation of cable and broadcasting. As a
result, competitive pressures are intense and the stocks are subject to
increased price volatility. Current Federal Communications Commission rules
prohibit the fund, together with all other funds advised by FMR, from
holding in the aggregate 10% of the voting stock of more than 18 AM, 18 FM
or 12 TV stations.
This fund may purchase securities identical to those in the Leisure
Portfolio, or securities of companies that are engaged in business
activities similar to those of certain companies in the Leisure Portfolio.
The Broadcast and Media Portfolio's narrower focus may make it a more
volatile investment than the Leisure Portfolio.
NATURAL GAS PORTFOLIO: COMPANIES ENGAGED IN THE PRODUCTION,
TRANSMISSION, AND DISTRIBUTION OF NATURAL GAS, AND INVOLVED IN THE
EXPLORATION OF POTENTIAL NATURAL GAS SOURCES, AS WELL AS THOSE COMPANIES
THAT PROVIDE SERVICES AND EQUIPMENT TO NATURAL GAS PRODUCERS, REFINERIES,
COGENERATION FACILITIES, CONVERTERS, AND DISTRIBUTORS. The business
activities of companies held in the Natural Gas Portfolio may include:
production, transmission, distribution, marketing, control, or measurement
of natural gas; exploration of potential natural gas sources; providing
component parts or services to companies engaged in the above activities;
natural gas research or experimentation; and environmental activities
related to the solution of energy problems, such as energy conservation or
pollution control through the use of natural gas. Companies participating
in new activities working toward technological advances in the natural gas
field may also be considered for the fund.
The companies in the natural gas field are subject to, among other
factors, changes in price and supply of both conventional and alternative
energy sources. Swift price and supply fluctuations may be caused by events
relating to international politics, energy conservation, the success of
energy source exploration projects, and tax and other regulatory policies
of domestic and foreign governments.
PAPER AND FOREST PRODUCTS PORTFOLIO: COMPANIES ENGAGED IN THE
MANUFACTURE, RESEARCH, SALE, OR DISTRIBUTION OF PAPER PRODUCTS, PACKAGING
PRODUCTS, BUILDING MATERIALS (SUCH AS LUMBER AND PANELING PRODUCTS), AND
OTHER PRODUCTS RELATED TO THE PAPER AND FOREST PRODUCTS INDUSTRY. Holdings
may include diversified companies with operations in the aforementioned
activities.
The success of these companies depends on, among other things, the
health of the economy, worldwide production capacity and prevailing
interest rate levels, which, in turn, may affect product pricing, costs and
operating margins. These variables also affect the level of industry and
consumer capital spending for paper and forest products.
PRECIOUS METALS AND MINERALS PORTFOLIO: COMPANIES ENGAGED IN
EXPLORATION, MINING, PROCESSING OR DEALING IN GOLD, SILVER, PLATINUM,
DIAMONDS OR OTHER PRECIOUS METALS AND MINERALS. The fund may also invest in
securities of companies which themselves invest in companies engaged in
these activities. Under normal conditions, the fund will invest at least
80% of its total assets in (i) securities of companies principally engaged
in exploration, mining, processing, or dealing in gold, silver, platinum,
diamonds, or other precious metals and minerals, and (ii) precious metals.
The fund's investments also may include securities whose redemption value
is indexed to the price of gold or other precious metals.
The value of the fund's investments may be affected by changes in the
price of gold and other precious metals. Gold has been subject to
substantial price fluctuations over short periods of time and may be
affected by unpredictable international monetary and other governmental
policies, such as currency devaluations or revaluations; economic and
social conditions within a country; trade imbalances; or trade or currency
restrictions between countries. Since much of the world's known gold
reserves are located in South Africa, political and social conditions there
may pose certain risks to the fund's investments. For instance, social
upheaval and related economic difficulties in South Africa could cause a
decrease in the share values of South African issuers. A number of
institutions have adopted policies precluding investments in companies
doing business in South Africa.
Because companies involved in exploring, mining, processing, or dealing
in precious metals or minerals are frequently located outside of the United
States, all or a significant portion of this fund may be invested in
securities of foreign issuers. Investors should understand the special
considerations and risks related to such an investment emphasis.
In addition to its investments in securities, the fund may invest a
portion of its assets in precious metals, such as gold, silver, platinum,
and palladium. The prices of precious metals are affected by broad economic
and political conditions, but are less subject to local and
company-specific factors than securities of individual companies. As a
result, precious metals may be more or less volatile in price than
securities of companies engaged in precious metals-related businesses. The
fund may purchase precious metals in any form, including bullion and coins,
provided that FMR intends to purchase only those forms of precious metals
that are readily marketable and that can be stored in accordance with
custody regulations applicable to mutual funds. The fund may incur higher
custody and transaction costs for precious metals than for securities.
Also, precious metals investments do not pay income.
The fund is authorized to invest up to 50% of its total assets in
precious metals; however, as a non-fundamental policy (which can be changed
without shareholder approval), FMR does not currently intend to purchase
precious metals if, as a result, more than 25% of the fund's total assets
would be invested in precious metals. As a further limit on precious metals
investments, under current federal tax law, gains from selling precious
metals may not exceed 10% of the fund's annual gross income. This tax
requirement could cause the fund to hold or sell precious metals or
securities when it would not otherwise do so.
Securities whose redemption value is indexed to the price of gold or
other precious metals involve risks and pricing characteristics similar to
direct precious metals investments. FMR currently intends to treat such
securities as investments in precious metals for the purposes of the 25%
and 50% limitations above and the 80% policy in the first paragraph of this
section.
REGIONAL BANKS PORTFOLIO: COMPANIES ENGAGED IN ACCEPTING DEPOSITS AND
MAKING COMMERCIAL AND PRINCIPALLY NON-MORTGAGE CONSUMER LOANS. In addition,
these companies may offer the following services: merchant banking,
consumer and commercial finance, discount brokerage, leasing and insurance.
These companies concentrate their operations within a specific part of the
country rather than operating predominantly on a national or international
scale. The fund may invest in securities of foreign institutions, although
the majority of publicly-traded regional banks currently are organized in
the United States.
The fund may own, among others, securities of U.S. institutions whose
customer deposits may or may not be insured by the federal government. Such
U.S. institutions may include, but are not limited to, state chartered
banks, savings and loan institutions, and banks that are members of the
Federal Reserve System.
Federal laws generally separating commercial and investment banking, as
well as laws governing the capitalization and regulation of the savings and
loan industry, are currently being reexamined by Congress. The services
offered by banks may expand if legislation broadening bank powers is
enacted. While providing diversification, expanded powers could expose
banks to well-established competitors, particularly as the historical
distinctions between regional banks and other financial institutions erode.
Increased competition may also result from the broadening of regional and
national interstate banking powers, which has already reduced the number of
publicly traded regional banks. In addition, general economic conditions
are important to regional banking concerns, with exposure to credit losses
resulting from possible financial difficulties of borrowers potentially
having an adverse effect.
RETAILING PORTFOLIO: COMPANIES ENGAGED IN MERCHANDISING FINISHED GOODS
AND SERVICES PRIMARILY TO INDIVIDUAL CONSUMERS. Companies in the fund may
include: general merchandise retailers, department stores, food retailers,
drug stores, and any specialty retailers selling a single category of
merchandise such as apparel, toys, or consumer electronics products.
Companies engaged in selling goods and services through alternative means
such as direct telephone marketing, mail order, membership warehouse clubs,
computer, or video based electronic systems may also be purchased by the
fund.
The success of retailing companies is closely tied to consumer spending
which, in turn, is affected by general economic conditions and consumer
confidence levels. The retailing industry is highly competitive; success is
often tied to a company's ability to anticipate changing consumer
tastes.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO: COMPANIES ENGAGED IN RESEARCH,
DESIGN, PRODUCTION OR DISTRIBUTION OF PRODUCTS OR PROCESSES THAT RELATE TO
SOFTWARE OR INFORMATION-BASED SERVICES. The fund may hold securities of
companies that provide systems level software (designed to run the basic
functions of a computer) or applications software (designed for one type of
work) directed at either horizontal (general use) or vertical (certain
industries or groups) markets, time-sharing services, information-based
services, computer consulting or facilities management services,
communications software, and data communications services.
Competitive pressures may have a significant effect on the financial
condition of companies in the software and computer services industries.
For example, the increasing number of companies and product offerings in
the vertical and horizontal markets may lead to aggressive pricing and
slower selling cycles.
TECHNOLOGY PORTFOLIO: COMPANIES WHICH FMR BELIEVES HAVE, OR WILL
DEVELOP, PRODUCTS, PROCESSES OR SERVICES THAT WILL PROVIDE OR WILL BENEFIT
SIGNIFICANTLY FROM TECHNOLOGICAL ADVANCES AND IMPROVEMENTS. The description
of the technology sector will be interpreted broadly by FMR and may include
such products or services as inexpensive computing power, such as personal
computers; improved methods of communications, such as satellite
transmission, or labor saving machines or instruments, such as
computer-aided design equipment.
The prime emphasis of the fund will be to identify those companies
positioned to benefit from technological advances in areas such as
semiconductors, minicomputers and peripheral equipment, scientific
instruments, computer software, communications, and future automation
trends in both office and factory settings.
Competitive pressures may have a significant effect on the financial
condition of companies in the technology industry. For example, if
technology continues to advance at an accelerated rate, and the number of
companies and product offerings continue to expand, these companies could
become increasingly sensitive to short product cycles and aggressive
pricing.
TELECOMMUNICATIONS PORTFOLIO: COMPANIES ENGAGED IN THE DEVELOPMENT,
MANUFACTURE, OR SALE OF COMMUNICATIONS SERVICES OR COMMUNICATIONS
EQUIPMENT. Companies in the telecommunications field offer a variety of
services and products, including local and long distance telephone service;
cellular, paging, local and wide area product networks; satellite,
microwave and cable television; and equipment used to provide these
products and services. Long distance telephone companies may also have
interests in new technologies, such as fiber optics and data
transmission.
Telephone operating companies are subject to both federal and state
regulation affecting permitted rates of return and the kinds of services
that may be offered. Telephone companies usually pay an above average
dividend. However, the fund's investment decisions are based primarily upon
capital appreciation potential rather than income considerations. Certain
types of companies represented in the fund are engaged in fierce
competition for a share of the market for their products. In recent years,
these have been companies providing goods or services such as private and
local area networks, or engaged in the sale of telephone set equipment.
TRANSPORTATION PORTFOLIO: COMPANIES ENGAGED IN PROVIDING TRANSPORTATION
SERVICES OR COMPANIES ENGAGED IN THE DESIGN, MANUFACTURE, DISTRIBUTION, OR
SALE OF TRANSPORTATION EQUIPMENT. Transportation services include the
movement of freight or people by airlines, railroads, ships, trucks, and
bus companies. Other service companies include those providing auto, truck,
container, rail car, and plane leasing and maintenance. Equipment
manufacturers include makers of trucks, autos, planes, containers, rail
cars, or any other mode of transportation and their related products. In
addition, the fund may invest in companies that sell fuel saving devices to
the transportation industry and those that sell insurance and software
developed primarily for transportation companies.
Risk factors that affect transportation stocks include the state of the
economy, fuel prices, labor agreements, and insurance costs. Transportation
stocks are cyclical and have occasional sharp price movements. The U.S.
trend has been to deregulate these industries, which could have a favorable
long-term effect, but future government decisions may adversely affect
these companies.
UTILITIES PORTFOLIO: COMPANIES IN THE PUBLIC UTILITIES INDUSTRY AND
COMPANIES DERIVING A MAJORITY OF THEIR REVENUES FROM THEIR PUBLIC UTILITY
OPERATIONS. Public utility investments will include companies engaged in
the manufacture, production, generation, transmission and sale of gas and
electric energy, and companies engaged in the communications field,
including telephone, telegraph, satellite, microwave and the provision of
other communication facilities for the public benefit (not including
companies involved in public broadcasting). Public utility stocks have
traditionally produced above-average dividend income, but the fund's
investments are made based on capital appreciation potential. The fund may
not own more than 5% of the outstanding voting securities of more than one
public utility company as defined by the Public Utility Holding Company Act
of 1935. This policy is non-fundamental and may be changed by the Board of
Trustees.
QUALITY AND MATURITY. (money market fund) Pursuant to procedures
adopted by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high-quality, a security must be a U.S. government security; rated in
accordance with applicable rules in one of the two highest categories for
short-term securities by at least two nationally recognized rating services
(or by one, if only one rating service has rated the security); or, if
unrated, judged to be of equivalent quality by FMR
High quality securities are divided into "first tier" and "second tier"
securities. First tier securities have received the highest rating (e.g.,
Standard & Poor's A-1 rating) from at least two rating services (or
one, if only one has rated the security). Second tier securities have
received ratings within the two highest categories (e.g., Standard &
Poor's A-1 or A-2) from at least two rating services ( or one, if only one
has rated the security), but do not qualify as first tier securities. If a
security has been assigned different ratings by different ratings services,
at least two rating services must have assigned the higher rating in order
for FMR to determine eligibility on the basis of that higher rating. Based
on procedures adopted by the Board of Trustees, FMR may determine that an
unrated security is of equivalent quality to a rated first or second tier
security.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund must limit its investments to securities with remaining
maturities of 397 days or less and must maintain a dollar-weighted average
maturity of 90 days or less.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions
with banks that are, or may be considered to be, "affiliated persons" of
the fun d under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S.
government securities with affiliated financial institutions that
are primary dealers in these securities ; short-term currency
transactions; and short-term borrowing. In accordance with exemptive
orders issued by the Securities and Exchange Commission, the Board of
Trustees has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
FUND'S RIGHTS AS A SHAREHOLDER. The equity funds do not intend to direct
or administer the day-to-day operations of any company. Each equity fund,
however, may exercise its rights as a shareholder and may communicate its
views on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters could
have a significant effect on the value of the fund's investment in the
company. The activities that each fund may engage in, either individually
or in conjunction with others, may include, among others, supporting or
opposing proposed changes in a company's corporate structure or business
activities; seeking changes in a company's directors or management; seeking
changes in a company's direction or policies; seeking the sale or
reorganization of the company or a portion of its assets; or supporting or
opposing third party takeover efforts. This area of corporate activity is
increasingly prone to litigation and it is possible that a fund could be
involved in lawsuits related to such activities. FMR will monitor such
activities with a view to mitigating, to the extent possible, the risk of
litigation against each fund and the risk of actual liability if the fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities incurred.
ASSET-BACKED SECURITIES may include pools of mortgages, loans,
receivables or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities, and, in certain cases, supported by letters of credit, surety
bonds, or other credit enhancements. The value of asset-backed securities
may also be affected by the creditworthiness of the servicing agent for the
pool, the originator of the loans or receivables, or the financial
institution(s) providing the credit support.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the funds' investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the funds' investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features) and (5) the nature of the marketplace for
trades (including the ability to assign or offset a fund's rights and
obligations relating to the investment).
For the money market fund, investments currently considered by the fund to
be illiquid include repurchase agreements not entitling the holder to
payment of principal and interest within seven days . Also, FMR may
determine some restricted securities and time deposits to be
illiquid.
Investments currently considered by the equity funds to be illiquid
include repurchase agreements not entitling the holder to payment of
principal and interest within seven days, over-the-counter options, and
non-government stripped fixed-rate mortgage-backed securities. Also, FMR
may determine some restricted securities, government-stripped fixed-rate
mortgage-backed securities, and swap agreements to be illiquid. However,
with respect to over-the-counter options the fund writes, all or a portion
of the value of the underlying instrument may be illiquid depending on the
assets held to cover the option and the nature and terms of any agreement
the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are, for the
money market fund, valued for purposes of monitoring amortized cost
valuation, or, for the equity funds, priced at fair value as determined in
good faith by a committee appointed by the Board of Trustees. If through a
change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time the fund may be permitted to
sell a security under an effective registration statement. If, during such
a period, adverse market conditions were to develop, the fund might obtain
a less favorable price than prevailed when it decided to seek registration
of the security. However, in general, the money market fund anticipates
holding restricted securities to maturity or selling them in an exempt
transaction.
LOWER-RATED DEBT SECURITIES. The equity funds may purchase lower-rated
debt securities (those rated Ba or lower by Moody's or BB or lower by
S tandard & Poor's Corporation ) that have poor protection with
respect to the payment of interest and repayment of principal, or may be
in default. These securities are often considered to be speculative
and involve greater risk of loss or price changes due to changes in the
issuer's capacity to pay. The market prices of lower-rated debt securities
may fluctuate more than those of higher-rated debt securities and may
decline significantly in periods of general economic difficulty which may
follow periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund
highly leveraged corporate acquisitions and restructurings. Past
experience may not provide an accurate indication of future performance of
the high-yield bond market, especially during periods of economic
recession. In fact, from 1989 to 1991, the percentage of lower-rated
securities that defaulted rose significantly above prior levels,
although the default rate decreased in 1992.
The market for lower-rated debt securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not
available, lower-rated debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-rated debt
securities and the funds' ability to sell these securities.
Since the risk of default is higher for lower-rated debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type held by a fund. In considering investments for the
funds, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of its shareholders.
VARIABLE- OR FLOATING-RATE INSTRUMENTS. The money market fund may invest
in variable- or floating-rate instruments that ultimately mature in more
than one year, if the fund acquires a right to sell the securities that
meets certain requirements set forth in Rule 2a-7. Variable-rate
instruments (including instruments subject to a demand feature) that mature
in 397 days or less may be deemed to have maturities equal to the period
remaining until the next readjustment of the interest rate. Other variable
rate instruments with demand features may be deemed to have a maturity
equal to the longer of the period remaining until the next readjustment of
the interest rate or the period remaining until the principal amount can be
recovered through demand. A floating rate instrument subject to a demand
feature may be deemed to have a maturity equal to the period remaining
until the principal amount can be recovered through demand.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed upon resale price and marked to market daily) of the
underlying security. A fund may engage in a repurchase agreement
with respect to any security in which it is authorized to invest even
if, with respect to the money market fund, the underlying security matures
in more than 397 days. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
of a decline in the market value of the underlying securities, as well as
delays and costs to a fund in connection with bankruptcy proceedings) ;
it is the funds' current policy to limit repurchase agreement transactions
to those parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The funds will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
DELAYED-DELIVERY TRANSACTIONS. The money market fund may buy and sell
securities on a delayed-delivery or when-issued basis. These transactions
involve a commitment by the fund to purchase or sell specific securities at
a predetermined price or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
INTERFUND BORROWING PROGRAM. Each fund has received permission from the
SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund will lend through the program only when
the returns are higher than those available at the same time from other
short-term instruments (such as repurchase agreements), and will borrow
through the program only when the costs are equal to or lower than the cost
of bank loans. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment
to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
SECURITIES LENDING. The equity funds may lend securities to parties such
as broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows the funds to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may
be delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which the funds are authorized to invest. Investing this cash subjects
that investment, as well as the security loaned, to market forces (i.e.,
capital appreciation or depreciation).
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar.
Foreign securities markets generally have less trading volume and less
liquidity than U.S. markets, and prices on some foreign markets can be
highly volatile. Many foreign countries lack uniform accounting and
disclosure standards comparable to those applicable to U.S. companies, and
it may be more difficult to obtain reliable information regarding an
issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions, and
custodial costs, are generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including
those involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be
difficult to enforce legal rights in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention.
There may be a greater possibility of default by foreign governments or
foreign government-sponsored enterprises. Investments in foreign countries
also involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
The funds may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject
to transfer restrictions may be marketable abroad, they may be less liquid
than foreign securities of the same class that are not subject to such
restrictions.
American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs) are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
FOREIGN CURRENCY TRANSACTIONS. The funds may hold foreign currency
deposits from time to time, and may convert dollars and foreign currencies
in the foreign exchange markets. Currency conversion involves dealer
spreads and other costs, although commissions usually are not charged.
Currencies may be exchanged on a spot (i.e., cash) basis, or by entering
into forward contracts to purchase or sell foreign currencies at a future
date and price. Forward contracts generally are traded in an interbank
market conducted directly between currency traders (usually large
commercial banks) and their customers. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may
hold the contract to maturity and complete the contemplated currency
exchange.
The funds may use currency forward contracts to manage currency risks and
to facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the funds.
In connection with purchases and sales of securities denominated in foreign
currencies, the funds may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the funds' foreign investments. The funds
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in the pound's value. Such
a hedge (sometimes referred to as a "position hedge") would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The fund could also
hedge the position by selling another currency expected to perform
similarly to the pound sterling - for example, by entering into a forward
contract to sell Deutschemarks or European Currency Units in return for
U.S. dollars. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change a fund's investment exposure to changes in currency
exchange rates, and could result in losses to the fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged a fund by selling that currency in exchange for
dollars, the fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, a fund
could realize currency losses from the hedge and the security position at
the same time if the two currencies do not move in tandem. Similarly, if
FMR increases a fund's exposure to a foreign currency, and that currency's
value declines, the fund will realize a loss. There is no assurance that
FMR's use of forward currency contracts will be advantageous to the funds
or that it will hedge at an appropriate time. The policies described in
this section are non-fundamental policies of the funds.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency
values, mortgage securities, corporate borrowing rates, or other factors
such as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names. The equity funds are
not limited to any particular form of swap agreement if FMR determines it
is consistent with a fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a fee
by the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if a fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by a fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. Each equity fund expects to be
able to eliminate its exposure under swap agreements either by assignment
or other disposition, or by entering into an offsetting swap agreement with
the same party or a similarly creditworthy party.
Each equity fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
If a fund enters into a swap agreement on a net basis, it will segregate
assets with a daily value at least equal to the excess, if any, of the
fund's accrued obligations under the swap agreement over the accrued amount
the fund is entitled to receive under the agreement. If a fund enters into
a swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. Each equity fund may purchase securities whose
prices are indexed to the prices of other securities, securities indices,
currencies, precious metals or other commodities, or other financial
indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is determined
by reference to a specific instrument or statistic. Gold-indexed
securities typically are short-term to intermediate-term debt securities
whose maturity values or interest rates are determined by reference to the
values of one or more specified foreign currencies, and may offer higher
yields than U.S. dollar-denominated securities of equivalent issuers.
Currency-indexed securities may be positively or negatively indexed; that
is, their maturity value may increase when the specified currency value
increases, resulting in a security that performs similarly to a
foreign-denominated instrument, or their maturity value may decline when
foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency.
Currency-indexed securities may also have prices that depend on the values
of a number of different foreign currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than the underlying instruments.
The American Gold Portfolio and the Precious Metals and Minerals Portfolio
may consider purchasing securities indexed to the price of gold as an
alternative to direct investments in gold. The funds will only buy
gold-indexed securities when they are satisfied with the creditworthiness
of the issuers liable for payment. The securities generally will earn a
nominal rate of interest while held by a fund, and may have maturities of
one year or more. In addition, the securities may be subject to being put
by a fund to the issuer, with payment to be received on no more than seven
days' notice. The put feature would ensure the liquidity of the notes in
the absence of an active secondary market. The Precious Metals and
Minerals fund may consider investments in securities indexed to the price
of platinum, silver, or other precious metals.
SHORT SALES "AGAINST THE BOX". The money market fund may sell
securities short when it owns or has the right to obtain securities
equivalent in kind or amount to the securities sold short. Short sales
could be used to protect the net asset value per share of the fund in
anticipation of increase interest rates, without sacrificing the current
yield of the securities sold short. If the money market fund or an equity
fund enters into a short sale against the box, it will be required to set
aside securities equivalent in kind and amount to the securities sold short
(or securities convertible or exchangeable into such securities) and will
be required to hold such securities while the short sale is outstanding.
The fund will incur transaction costs, including interest expense, in
connection with opening, maintaining, and closing short sales against the
box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each equity fund intends
to file a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets, before engaging in any purchases or sales
of futures contracts or options on futures contracts.
The equity funds intend to comply with Section 4.5 of the regulations under
the Commodities Exchange Act, which limits the extent to which the funds
can commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date.
When a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when a fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500). Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the funds' investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund
pays the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. A fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the fund assumes the obligation to pay
the strike price for the option's underlying instrument if the other party
to the option chooses to exercise it. When writing an option on a futures
contract the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those
of writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple
trades, they result in higher transaction costs and may be more difficult
to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. Each fund may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which it typically invests
which involves a risk that the options or futures position will not track
the performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result,
the fund's access to other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows a fund
greater flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. The funds may also purchase and write currency options
in conjunction with each other or with currency futures or forward
contracts. Currency futures and options values can be expected to
correlate with exchange rates, but may not reflect other factors that
affect the value of the funds' investments. A currency hedge, for example,
should protect a Yen-denominated security from a decline in the Yen, but
will not protect a fund against a price decline resulting from
deterioration in the issuer's creditworthiness. Because the value of a
fund's foreign-denominated investments changes in response to many factors
other than exchange rates, it may not be possible to match the amount of
currency options and futures to the value of the fund's investments exactly
over time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in
a segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the funds by FMR (either directly or, for the money market fund,
through an affiliated sub-adviser) pursuant to authority contained in each
fund's management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. Securities purchased and sold
by the money market fund will generally be traded on a net basis (i.e.,
without commission). In selecting broker-dealers, subject to the
applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commission s; and, for the equity funds,
arrangements for payment of fund expenses . Commissions for foreign
investments traded on foreign exchanges will generally be higher than for
U.S. investments and may not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds and other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing, or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). The selection of
such broker-dealers is generally made by FMR (to the extent possible
consistent with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based upon
the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to a fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause a
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to September 4, 1992, FBSL operated under the name
Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of
Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of
FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family , own directly or indirectly, more than 25%
of the voting common stock of FIL.
FMR may allocate transactions to broker-dealers who have entered into
arrangements with FMR under which the broker-dealer allocates a portion of
the commissions paid by the fund toward payment of the fund's expenses such
as transfer agent fees of FSC or custodian fees. The transaction quality
must, however, be comparable to those of other qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except in accordance with
regulations of the Securities and Exchange Commission. Pursuant to such
regulations, the Board of Trustees has approved a written agreement that
permits FBSI to effect portfolio transactions on national securities
exchanges and to retain compensation in connection with such transactions.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
funds and review the commissions paid by the funds over representative
periods of time to determine if they are reasonable in relation to the
benefits to the funds.
The equity funds' annualized portfolio turnover rates for the fiscal
year ended February 28, 1994, the fiscal period May 1, 1992 to
February 28, 1993, and the fiscal year ended April 30, 1992 are listed in
the table on page __ . The equity funds' annual portfolio turnover
rates may be substantially greater than those of other equity investment
companies. The significantly higher or lower portfolio turnover rates from
year to year are primarily the result of fluctuations in asset levels and
FMR's assessment of changing economic conditions throughout each year for
various industries. High turnover may also be the result of short-term
shareholder trading activity which increases brokerage and operating costs.
This shareholder activity may also result in required purchases or sales of
portfolio securities at disadvantageous times.
The brokerage commissions incurred by each equity fund for the fiscal
year ended February 28, 1994, the 1993 fiscal period, and the fiscal
year ended April 30, 19 92 are also listed in the table on
page __ . The significantly higher or lower brokerage commissions
paid by many of the funds from year to year are primarily a result of
changing asset levels throughout the year. Durin g fiscal 1994 , the
funds paid commissions to brokerage firms that provided research services,
although the provision of such services was not necessarily a factor in the
placement of all of this business with these firms. The percentage of
brokerage commissions paid by each fund during fiscal 1994 to
brokerage firms that provided research services is also listed in the table
below. The Natural Gas Portfolio had not yet commenced operations and
therefore had not incurred any brokerage commissions as of February 28,
1993.
% OF COMMISSIONS
PAID TO BROKERAGE
FIRMS PROVIDING
PORTFOLIO TURNOVER RATE BROKERAGE COMMISSIONS RESEARCH SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL
1994 1993* 1994 1993 1992 199 4
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ENERGY 72% $ 225,088 $ 240,443
FINANCIAL SERVICES 100 171,411 183,687
HEALTH CARE 112 1,113,199 1,778,708
PRECIOUS METALS
AND MINERALS 36 111,030 278,343
TECHNOLOGY 259 192,404 437,708
UTILITIES 34 144,012 242,874
DEFENSE AND AEROSPACE 87 501 2,632
LEISURE 109 41,547 49,783
BROKERAGE AND
INVESTMENT MANAGEMENT 111 39,681 102,968
CHEMICALS 214 73,037 51,321
COMPUTERS 254 124,610 211,386
ELECTRONICS 293 53,635 122,511
FOOD AND AGRICULTURE 515 87,850 124,197
SOFTWARE AND
COMPUTER SERVICES 402 270,455 21,892
TELECOMMUNICATIONS 115 90,726 28,026
AIR TRANSPORTATION 96 44,823 67,843
AMERICAN GOLD 30 222,189 445,129
BIOTECHNOLOGY 79 194,398 1,077,771
ENERGY SERVICE 236 252,703 212,947
INSURANCE 81 16,431 2,875
RETAILING 171 131,980 168,548
HOME FINANCE 61 113,247 55,268
AUTOMOTIVE 140 237,775 180,328
MULTIMEDIA 70 4,868 11,569
MEDICAL DELIVERY 155 308,801 362,067
PAPER AND FOREST
PRODUCTS 222 49,472 214,407
REGIONAL BANKS 63 159,549 134,811
INDUSTRIAL EQUIPMENT 407 8,169 20,214
CONSTRUCTION AND HOUSING 60 30,468 58,069
INDUSTRIAL MATERIALS 273 77,224 57,399
TRANSPORTATION 116 5,219 28,039
ENVIRONMENTAL SERVICES 176 271,040 361,267
CONSUMER PRODUCTS 215 9,272 14,091
DEVELOPING COMMUNICATIONS 77 35,996 17,065
NATURAL GAS
</TABLE>
* Annualized
The funds pay both commissions and spreads in connection with the placement
of portfolio transactions; FBSI is paid on a commission basis. During
fiscal 1994, the fiscal period ended February 28, 1993 , and
the fiscal year ended April 30, 1992, the equity funds paid brokerage
commissions to FBSI, the amounts of which are listed in the table below
entitled "Brokerage Commissions paid to FBSI." This table also lists the
percentage of each fund's aggregate brokerage commissions paid to FBSI
during the fiscal 1994 as well as the percentage of each fund's
aggregate dollar amount of transactions executed through FBSI. The
difference in the percentage of the brokerage commissions paid to and the
percentage of the dollar amount of transactions effected through FBSI is a
result of the low commission rates charged by FBSI.
During fiscal 1994, the 1993 fiscal period and fiscal 1992, some
equity funds also paid brokerage commissions to FBSL, the amounts of which
are listed in the table entitled "Brokerage Commissions Paid to FBSL"on
page __ . The table also lists the percentage of each fund's
aggregate brokerage commissions paid to FBSL during fiscal 1994 , and
the percentage of each fund's aggregate dollar amount of transactions
executed through FBSL during the same period. The difference in the
percentage of brokerage commissions paid to and the percentage of the
dollar amount of transactions executed through FBSL is a result of the
lower commission rates charged by FBSL.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. The funds seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to
continue to review whether recapture opportunities are available and are
legally permissible and, if so, to determine, in the exercise of their
business judgment, whether it would be advisable for the funds to seek such
recapture.
Although the Trustees and officers of the funds are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. Likewise, the investment decisions for each
Select fund are made independently of those for the other Select funds. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or other Fidelity funds or accounts. Simultaneous
transactions are inevitable when several funds are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as a fund is concerned.
In other cases, however, the ability of a fund to participate in volume
transactions will produce better executions and prices for the fund. It is
the current opinion of the Trustees that the desirability of retaining FMR
as investment adviser to the funds outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
BROKERAGE COMMISSIONS PAID TO FBSI
% OF AGGREGATE
% OF BROKERAGE DOLLAR AMOUNT OF
COMMISSIONS PAID COMMISSIONS PAID TRANSACTIONS EXECUTED
TO FBSI TO FBSI THROUGH FBSI
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FISCAL FISCAL FISCAL FISCAL FISCAL
1994 1993 1992 199 4 199 4
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ENERGY $ 42,457 $ 43,456
FINANCIAL SERVICES 104,207 72,930
HEALTH CARE 292,180 478,294
PRECIOUS METALS
AND MINERALS 10,336 29,957
TECHNOLOGY 121,695 167,987
UTILITIES 59,948 58,722
DEFENSE AND AEROSPACE 1,191 1,543
LEISURE 20,247 8,906
BROKERAGE AND INVESTMENT
MANAGEMENT 15,956 27,337
CHEMICALS 54,712 16,436
COMPUTERS 92,069 70,291
ELECTRONICS 81,597 53,076
FOOD AND AGRICULTURE 49,642 39,318
SOFTWARE AND COMPUTER
SERVICES 126,315 53,042
TELECOMMUNICATIONS 43,393 4,653
AIR TRANSPORTATION 8,582 4,223
AMERICAN GOLD 18,310 29,559
BIOTECHNOLOGY 111,543 254,319
ENERGY SERVICE 209,611 90,301
INSURANCE 7,778 1,131
RETAILING 84,290 45,165
HOME FINANCE 100,744 23,189
AUTOMOTIVE 144,584 53,103
MULTIMEDIA 3,678 3,219
MEDICAL DELIVERY 105,300 134,267
PAPER AND FOREST PRODUCTS 41,247 54,522
REGIONAL BANKS 85,117 52,554
INDUSTRIAL EQUIPMENT 10,864 10,730
CONSTRUCTION AND HOUSING 21,890 21,116
INDUSTRIAL MATERIALS 39,122 18,840
TRANSPORTATION 5,310 8,818
ENVIRONMENTAL SERVICES 89,654 48,631
CONSUMER PRODUCTS 14,397 7,281
DEVELOPING COMMUNICATIONS 8,888 2,936
NATURAL GAS
</TABLE>
BROKERAGE COMMISSIONS PAID TO FBSL
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S
% OF FUND'S AGGREGATE DOLLAR AMOUNT
COMMISSIONS PAID AGGREGATE OF TRANSACTIONS
COMMISSIONS
TO FBSL PAID TO FBSL THROUGH FBSL
</TABLE>
FISCAL FISCAL FISCAL FISCAL FISCAL
1994 1993 1992 1994 1994
HEALTH CARE $ 575 $ 4,353 .04% .04%
PRECIOUS METALS
AND MINERALS -- -- -- --
TECHNOLOGY -- -- -- --
LEISURE -- 1,658 -- --
RETAILING -- -- -- --
MULTIMEDIA -- -- -- --
BIOTECHNOLOGY -- 2,861 -- --
SOFTWARE AND COMPUTER
SERVICES 931 1,281 .21 .26
ENVIRONMENTAL SERVICES -- -- -- --
UTILITIES -- 3,483 -- --
VALUATION OF PORTFOLIO SECURITIES
Each equity fund's net asset value is determined hourly during business
hours observed by the New York Stock Exchange. Currently, the Exchange is
open from 9:30 a.m. to 4:00 p.m. Eastern time, Monday through Friday. The
Board has approved the following "valuation times" for the determination of
each fund's net asset value: 10:00 a.m., 11:00 a.m., 12:00 noon, 1:00
p.m., 2:00 p.m., 3:00 p.m. and 4:00 p.m. At each valuation time, the value
of each fund's assets will be determined in the manner described on the
following page.
EQUITY FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade. Equity
securities for which the primary market is the U.S. are valued at last sale
price or, if no sale has occurred, at the closing bid price. Equity
securities for which the primary market is outside the U.S. are valued
using the official closing price or the last sale price in the principal
market where they are traded. If the last sale price (on the local
exchange) is unavailable, the last evaluated quote or last bid price is
normally used. Short-term securities are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. Fixed-income securities are valued primarily by a pricing
service that uses a vendor security valuation matrix which incorporates
both dealer-supplied valuations and electronic data processing techniques.
This twofold approach is believed to more accurately reflect fair value
because it takes into account appropriate factors such as institutional
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data,
without exclusive reliance upon quoted, exchange, or over-the counter
prices. Use of pricing services has been approved by the Board of
Trustees.
Securities and other assets for which there is no readily available
market are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as
well as corporate bonds, U.S. government securities, money market
instruments, and repurchase agreements, is substantially completed each day
at the close of the NYSE. The values of any such securities held by the
fund are determined as of such time for the purpose of computing the fund's
net asset value. Foreign security prices are furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currency into
U.S. dollars. Any changes in the value of forward contracts due to
exchange rate fluctuations and days to maturity are included in the
calculation of net asset value. If an extraordinary event that is expected
to materially affect the value of a portfolio security occurs after the
close of an exchange on which that security is traded, then the security
will be valued as determined in good faith by a committee appointed by the
Board of Trustees.
MONEY MARKET FUND. The fund values its investments on the basis of
amortized cost. This technique involves valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its value based on current market quotations or appropriate
substitutes which reflect current market conditions. The amortized cost
value of an instrument may be higher or lower than the price the fund would
receive if it sold the instrument.
Valuing the fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the
Investment Company Act of 1940. The fund must adhere to certain conditions
under Rule 2a-7; these conditions are summarized in the Prospectus.
The Board of Trustees oversees FMR's adherence to SEC rules concerning
money market funds, and has established procedures designed to stabilize
the fund's NAV at $1.00. At such intervals as they deem appropriate, the
Trustees consider the extent to which NAV calculated by using market
valuations would deviate from $1.00 per share. If the Trustees believe
that a deviation from the fund's amortized cost per share may result in
material dilution or other unfair results to shareholders, the Trustees
have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; establishing NAV by using available market
quotations; and such other measures as the Trustees may deem appropriate.
During periods of declining interest rates, the fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in the fund would be able to
obtain a somewhat higher yield than would result if the fund utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. The equity funds' share prices,
yields and total returns, and the money market fund's yields and total
returns, fluctuate in response to market conditions and other factors.
When redeemed, the value of the equity funds' shares may be more or less
than their original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in a fund's net asset value
per share (NAV) over the period. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical historical
investment in a fund over a stated period, and then calculating the
annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. For example, a cumulative return of 100% over ten years would
produce an average annual return of 7.18%, which is the steady annual rate
that would equal 100% growth on a compounded basis in ten years. While
average annual returns are a convenient means of comparing investment
alternatives, investors should realize that each fund's performance is not
constant over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance of each fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, and/or a
series of redemptions, over any time period. Total returns may be broken
down into their components of income and capital (including capital gains
and changes in share price) in order to illustrate the relationship of
these factors and their contributions to total return. An example of this
type of illustration is given on pages 20 through 26. Total returns may be
quoted with or without taking the funds' 3% sales charge into account.
Total returns generally will not include the effect of paying exchange or
redemption fees or other charges for special transactions or services.
Excluding fees or charges from a total return calculation produces a higher
total return figure. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a stock fund's net asset
values, adjusted net asset values, and benchmark indices may be used to
exhibit performance. An adjusted NAV includes any distributions paid by
the fund and reflects all elements of its return. Unless otherwise
indicated, the fund's adjusted NAVs are not adjusted for sales charges, if
any.
MOVING AVERAGES. An equity fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving average
is the average of each day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine adjusted closing NAVs from the
last business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above, or
stayed below its moving average. On February 28, 199 4 , the 13-week
and 39-week short-term moving averages for each equity fund were as
follows: Air Transportation, __ and __ ; American Gold, __
and __ ; Automotive, __ and __ ; Biotechnology,
__ and __ ; Brokerage and Investment Management, __ and
__ ; Chemicals, __ and __ ; Computers, __ and __;
Construction and Housing, __ and __ ; Consumer Products,
__ and __ ; Defense and Aerospace, __ and __ ;
Developing Communications, __ and __ ; Electronics, __
and __ ; Energy, and ; Energy Service, __ and __ ;
Environmental Services, __ and __ ; Financial Services,
__ and __ ; Food and Agriculture, __ and __ ;
Health Care, __ and __ ; Home Finance, __ and
__ ; Industrial Equipment, __ and __ ; Industrial
Materials, __ and __ ; Insurance, __ and __ ;
Leisure, __ and __ ; Medical Delivery, __ and
__ ; Multimedia, __ and __; Paper and Forest Products, __
and __ ; Natural Gas, __ and __; Precious Metals, __
and __ ; Regional Banks, __ and __ ; Retailing,
__ and __ ; Software and Computer Services, __ and
__ ; Technology, __ and __ ; Telecommunications, __
and __ ; Transportation, __ and __ ; and Utilities,
__ and , respectively.
HISTORICAL RESULTS. The following table shows each fund's total returns
for the periods ended February 28, 199 4 . The total returns quoted
are based on a hypothetical $10,000 investment in each fund and include the
effect of the funds' 3% sales charge, but do not include the effects of the
equity funds' exchange or redemption fees.
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
One Five Ten Life of One Five Ten Life of
Year Years Years Fund Year Years Years Fund
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Air Transportation
American Gold
Automotive
Biotechnology
Brokerage and Investment
Management
Chemicals
Computers
Construction and Housing
Consumer Products
Defense and Aerospace
Developing Communications
Electronics
Energy
Energy Service
Environmental Services
Financial Services
Food and Agriculture
Health Care
Home Finance
Industrial Equipment
Industrial Materials
Insurance
Leisure
Medical Delivery
Multimedia
Natural Gas
Paper and Forest Products
Precious Metals and Minerals
Regional Banks
Retailing
Software and Computer Services
Technology
Telecommunications
Transportation
Utilities
Money Market
</TABLE>
The table below shows the value of a hypothetical $10,000 investment
invested in each equity fund from its commencement of operations, or
February 28, 198 4 for funds in operation for ten years or more,
through February 28, 199 4 , after deducting the funds' 3% sales
charge and assuming all distributions were reinvested. The table compares
each fund's return to the record of the Standard & Poor's 500 Composite
Stock Price Index (S&P 500) and the cost of living (measured by the
Consumer Price Index, or CPI) over the same period. The S&P 500
comparison is provided to show how each fund's total return compared to the
record of a broad average of common stock prices. Each fund has the
ability to invest in securities not included in the index, and its
investment portfolio normally will not be similar in composition to the
index. The S&P 500 is based on the prices of unmanaged groups of
stocks and assumes reinvestment of dividends paid on those stocks. Unlike
each fund's returns, its return does not include the effect of paying
brokerage commissions and other costs of investing. S&P 500 is a
registered trademark of Standard & Poor's Corporation. The figures
below (rounded to the nearest dollar) represent the value of an investment
in each fund before redemption, and do not take the equity funds' exchange
or redemption fees into account. This was a period of widely fluctuating
stock prices, and should not be considered representative of the dividend
income or capital gain or loss that could be realized from investments in
the funds today.
<TABLE>
<CAPTION>
<S> <C>
FIDELITY SELECT PORTFOLIOS INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
ENERGY 2/28/85 13,449 0 179 13,628 13,394 10,827
2/28/86 12,110 0 913 13,023 17,480 11,164
2/28/87 15,822 0 1,194 17,015 22,640 11,399
2/29/88 14,398 396 1,130 15,923 22,036 11,849
2/28/89 16,029 440 1,722 18,191 24,655 12,421
2/28/90 20,946 882 2,347 24,175 29,316 13,075
2/28/91 18,828 2,824 2,313 23,965 33,611 13,769
2/29/92 17,246 2,615 2,362 22,223 38,991 14,157
2/28/93 19,278 2,924 3,114 25,316 43,152 14,617
2/28/94
FINANCIAL 2/28/85 16,194 37 91 16,321 13,394 10,827
SERVICES 2/28/86 24,117 55 424 24,596 17,480 11,164
2/28/87 26,671 318 629 27,618 22,640 11,399
2/29/88 20,215 1,640 585 22,440 22,036 11,849
2/28/89 20,762 1,685 1,284 23,731 24,655 12,421
2/28/90 22,051 1,943 1,620 25,613 29,316 13,075
2/28/91 20,911 1,842 2,093 24,846 33,611 13,769
2/29/92 30,944 2,726 3,484 37,154 38,991 14,157
2/28/93 39,459 7,029 4,978 51,466 43,152 14,617
2/28/94
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
HEALTH CARE 2/28/85 11,254 91 42 11,387 13,394 10,827
2/28/86 16,062 130 90 16,282 17,480 11,164
2/28/87 23,748 440 133 24,321 22,640 11,399
2/29/88 19,208 947 107 20,263 22,036 11,849
2/28/89 19,674 971 281 20,926 24,655 12,421
2/28/90 24,363 1,697 426 26,485 29,316 13,075
2/28/91 35,902 6,893 780 43,574 33,611 13,769
2/29/92 43,642 15,119 1,216 59,976 38,991 14,157
2/28/93 28,858 15,486 912 45,256 43,152 14,617
2/28/94
PRECIOUS 2/28/85 7,419 12 109 7,540 13,394 10,827
METALS AND 2/28/86 8,112 13 428 8,553 17,480 11,164
MINERALS 2/28/87 10,408 17 681 11,106 22,640 11,399
2/29/88 9,731 99 685 10,515 22,036 11,849
2/28/89 9,256 94 1,075 10,425 24,655 12,421
2/28/90 11,093 113 1,441 12,647 29,316 13,075
2/28/91 8,501 86 1,240 9,827 33,611 13,769
2/29/92 8,524 86 1,333 9,944 38,991 14,157
2/28/93 7,676 78 1,373 9,126 43,152 14,617
2/28/94
</TABLE>
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
TECHNOLOGY 2/28/85 10,648 227 0 10,875 13,394 10,827
2/28/86 10,789 230 227 11,246 17,480 11,164
2/28/87 12,202 309 257 12,768 22,640 11,399
2/29/88 8,086 613 170 8,869 22,036 11,849
2/28/89 7,954 603 167 8,724 24,655 12,421
2/28/90 9,158 694 193 10,044 29,316 13,075
2/28/91 12,011 910 253 13,174 33,611 13,769
2/29/92 16,300 1,235 446 17,981 38,991 14,157
2/28/93 15,781 2,787 432 19,000 43,152 14,617
2/28/94
UTILITIES 2/28/85 13,677 0 221 13,898 13,394 10,827
2/28/86 18,802 0 756 19,558 17,480 11,164
2/28/87 21,821 115 1,054 22,990 22,640 11,399
2/29/88 19,400 835 1,329 21,564 22,036 11,849
2/28/89 20,649 888 2,705 24,242 24,655 12,421
2/28/90 25,484 1,096 4,155 30,735 29,316 13,075
2/28/91 27,070 1,741 5,012 33,822 33,611 13,769
2/29/92 28,020 3,004 6,900 37,923 38,991 14,157
2/28/93 31,789 5,421 9,404 46,614 43,152 14,617
2/28/94
DEFENSE AND 2/28/85(1) $ 12,959 $ 0 $ 0 $12,959 $11,801 $10,281*
AEROSPACE 2/28/86 14,453 0 113 14,566 15,401 10,601
2/28/87 16,587 211 156 16,953 19,947 10,824
2/29/88 11,902 687 112 12,700 19,415 11,251
2/28/89 11,398 658 107 12,162 21,722 11,794
2/28/90 11,339 654 106 12,100 25,829 12,415
2/28/91 12,562 725 249 13,535 29,613 13,075
2/29/92 14,482 836 353 15,670 34,354 13,443
2/28/93 14,628 844 356 15,828 38,019 13,880
2/28/94
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
LEISURE 2/28/85(1) $ 13,202 $ 0 $ 0 $13,202 $11,801 $10,281
2/28/86 19,672 0 32 19,704 15,401 10,601
2/28/87 24,357 43 50 24,450 19,947 10,824
2/29/88 20,874 2,389 43 23,307 19,415 11,251
2/28/89 24,997 3,357 52 28,406 21,722 11,794
2/28/90 24,939 5,335 120 30,394 25,829 12,415
2/28/91 25,045 5,358 432 30,835 29,613 13,075
2/29/92 30,992 6,630 534 38,156 34,354 13,443
2/28/93 34,697 7,423 598 42,718 38,019 13,880
2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990; or
(8) April 21, 1993. .
*Cost of living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
BROKERAGE AND 2/28/86(2) $ 12,853 $ 0 $ 0 $12,853 $12,078 $10,139
INVESTMENT 2/28/87 14,278 22 17 14,317 15,643 10,353
MANAGEMENT 2/29/88 6,994 1,324 42 8,361 15,225 10,761
2/28/89 8,051 1,525 165 9,741 17,035 11,280
2/28/90 8,070 1,528 348 9,947 20,256 11,874
2/28/91 8,051 1,525 472 10,048 23,223 12,505
2/29/92 12,406 2,349 744 15,499 26,940 12,857
2/28/93 13,793 2,612 827 17,232 29,815 13,275
2/28/94
CHEMICALS 2/28/86(2) $ 13,978 $ 0 $ 0 $13,978 $12,078 $10,139
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
2/28/87 18,818 75 0 18,893 15,643 10,353
2/29/88 18,857 118 0 18,975 15,225 10,761
2/28/89 22,174 139 0 22,313 17,035 11,280
2/28/90 21,893 1,190 149 23,232 20,256 11,874
2/28/91 25,065 2,024 281 27,369 23,223 12,505
2/29/92 30,933 3,379 566 34,879 26,940 12,857
2/28/93 27,761 6,683 862 35,306 29,815 13,275
2/28/94
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTERS 2/28/86(2) $ 11,727 $ 0 $ 0 $11,727 $12,078 $10,139
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
2/28/87 15,617 56 0 15,673 15,643 10,353
2/29/88 11,116 376 10 11,503 15,225 10,761
2/28/89 10,622 359 10 10,991 17,035 11,280
2/28/90 11,795 399 11 12,205 20,256 11,874
2/28/91 15,957 540 166 16,662 23,223 12,505
2/29/92 19,187 917 528 20,631 26,94 0 12,857
2/28/93 19,546 934 538 21,017 29,815 13,275
2/28/94
ELECTRONICS 2/28/86(2) $ 11,097 $ 0 $ 0 $11,097 $12,078 $10,139
2/28/87 10,331 0 0 10,331 15,643 10,353
2/29/88 7,401 0 0 7,401 15,225 10,761
2/28/89 6,635 0 0 6,635 17,035 11,280
2/28/90 8,391 0 0 8,391 20,256 11,874
2/28/91 9,846 0 12 9,858 23,223 12,505
2/29/92 12,678 0 16 12,694 26,940 12,857
2/28/93 13,852 0 17 13,869 29,815 13,275
2/28/94
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FOOD AND 2/28/86(2) $ 12,329 $ 0 $ 0 $12,329 $12,078 $10,139
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AGRICULTURE 2/28/87 16,539 0 0 16,539 15,643 10,353
2/29/88 15,413 591 32 16,037 15,225 10,761
2/28/89 18,449 708 92 19,249 17,035 11,280
2/28/90 21,321 2,965 146 24,431 20,256 11,874
2/28/91 26,171 4,620 517 31,307 23,223 12,505
2/29/92 29,323 7,138 714 37,175 26,940 12,857
2/28/93 29,934 9,354 857 40,145 29,815 13,275
2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990 ; or (8)
April 21, 1993 .
* Cost of Living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SOFTWARE AND 2/28/86(2) $11,776 $ 0 $ 0 $11,776 $12,078 $10,139
COMPUTER 2/28/87 16,277 0 0 16,277 15,643 10,353
SERVICES 2/29/88 13,405 708 0 14,113 15,225 10,761
2/28/89 14,278 754 0 15,032 17,035 11,280
2/28/90 14,579 1,657 0 16,236 20,256 11,874
2/28/91 18,285 2,078 0 20,362 23,223 12,505
2/29/92 22,611 6,241 0 28,852 26,940 12,857
2/28/93 26,791 7,395 0 34,186 29,815 13,275
2/28/94
TELECOMMUN- 2/28/86(2) $11,650 $ 0 $ 0 $11,650 $12,078 $10,139
ICATIONS 2/28/87 15,607 0 0 15,607 15,643 10,353
2/29/88 15,452 401 22 15,876 15,225 10,761
2/28/89 19,720 545 161 20,427 17,035 11,280
2/28/90 23,358 1,560 303 25,221 20,256 11,874
2/28/91 23,076 1,541 787 25,405 23,223 12,505
2/29/92 28,314 1,891 1,288 31,494 26,940 12,857
2/28/93 33,164 2,778 1,729 37,672 29,815 13,275
2/28/94
AIR TRANS- 2/28/86(3) $10,554 $ 0 $ 0 $10,554 $10,895 $10,000
PORTATION 2/28/87 11,912 0 0 11,912 14,111 10,210
2/29/88 8,100 1,141 22 9,263 13,735 10,613
2/28/89 10,457 1,474 28 11,959 15,367 11,125
2/28/90 10,573 2,080 29 12,682 18,273 11,711
2/28/91 11,514 2,265 31 13,810 20,949 12,333
2/29/92 13,735 3,043 37 16,816 24,303 12,681
2/28/93 13,192 3,387 36 16,615 26,896 13,092
2/28/94
AMERICAN GOLD 2/28/86(3) $ 9,622 $ 0 $ 0 $ 9,622 $10,895 $10,000
2/28/87 14,589 0 0 14,589 14,111 10,210
2/29/88 13,861 153 51 14,066 13,735 10,613
2/28/89 15,171 168 56 15,395 15,367 11,125
2/28/90 17,227 191 64 17,481 18,273 11,711
2/28/91 13,202 146 49 13,396 20,949 12,333
2/29/92 13,095 145 48 13,288 24,303 12,681
2/28/93 13,726 152 51 13,928 26,896 13,092
2/28/94
BIOTECHNOLOGY 2/28/86(3) $10,418 $ 0 $ 0 $10,418 $10,895 $10,000
2/28/87 13,716 0 0 13,716 14,111 10,210
2/29/88 10,253 318 0 10,571 13,735 10,613
2/28/89 10,398 323 0 10,721 15,367 11,125
2/28/90 14,046 676 0 14,722 18,273 11,711
2/28/91 24,619 2,093 0 26,712 20,949 12,333
2/29/92 31,962 5,805 26 37,793 24,303 12,681
2/28/93 21,922 7,853 18 29,793 26,896 13,092
2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990 ; or (8)
April 21, 1993 .
* Cost of Living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
ENERGY SERVICE 2/28/86(3) $ 8,740 $ 0 $ 0 $ 8,740 $10,895 $10,000
2/28/87 9,622 0 0 9,622 14,111 10,210
2/29/88 8,284 0 0 8,284 13,735 10,613
2/28/89 7,828 0 0 7,828 15,367 11,125
2/28/90 11,912 0 0 11,912 18,273 11,711
2/28/91 13,095 0 22 13,117 20,949 12,333
2/29/92 9,099 0 15 9,114 24,303 12,681
2/28/93 10,680 0 18 10,698 26,896 13,092
2/28/94
HOME FINANCE 2/28/86(3) $12,794 $ 0 $ 0 $12,794 $10,895 $10,000
2/28/87 15,782 0 0 15,782 14,111 10,210
2/29/88 8,410 4,117 0 12,527 13,735 10,613
2/28/89 9,991 4,891 212 15,093 15,367 11,125
2/28/90 8,905 5,024 245 14,173 18,273 11,711
2/28/91 9,719 5,483 545 15,748 20,949 12,333
2/29/92 14,860 8,384 1,129 24,373 24,303 12,681
2/28/93 21,515 12,662 1,653 35,830 26,896 13,092
2/28/94
INSURANCE 2/28/86(3) $11,475 $ 0 $ 0 $11,475 $10,895 $10,000
2/28/87 12,591 0 0 12,591 14,111 10,210
2/29/88 9,904 0 153 10,056 13,735 10,613
2/28/89 11,611 0 276 11,887 15,367 11,125
2/28/91 15,307 0 521 15,827 20,949 12,333
2/29/92 18,207 0 916 19,123 24,303 12,681
2/28/93 20,933 2,218 1,092 24,243 26,896 13,092
2/28/94
RETAILING 2/28/86(3) $10,253 $ 0 $ 0 $10,253 $10,895 $10,000
2/28/87 13,124 0 0 13,124 14,111 10,210
2/29/88 10,748 907 274 11,929 13,735 10,613
2/28/89 12,794 1,285 361 14,440 15,367 11,125
2/28/90 12,678 4,026 532 17,235 18,273 11,711
2/28/91 15,093 4,841 633 20,567 20,949 12,333
2/29/92 22,834 8,119 958 31,910 24,303 12,681
2/28/93 23,154 9,990 971 34,115 26,896 13,092
2/28/94
AUTOMOTIVE 2/28/87(4) $11,708 $ 0 $ 0 $11,708 $11,644 $10,192
2/29/88 10,486 536 47 11,068 11,333 10,594
2/28/89 11,718 599 52 12,369 12,680 11,105
2/28/90 11,417 584 470 12,471 15,077 11,689
2/28/91 11,970 612 676 13,257 17,286 12,311
2/29/92 16,645 1,848 939 19,433 20,053 12,658
2/28/93 20,069 2,677 1,207 23,953 22,193 13,068
MULTIMEDIA 2/28/87(4) $11,912 $ 0 $ 0 $11,912 $11,644 $10,192
2/29/88 11,436 893 11 12,341 11,333 10,594
2/28/89 14,065 2,043 14 16,122 12,680 11,105
2/28/90 11,980 4,179 12 16,170 15,077 11,689
2/28/91 11,834 4,128 12 15,974 17,286 12,311
2/29/92 15,617 5,447 16 21,080 20,053 12,658
2/28/93 17,712 6,493 18 24,223 22,193 13,068
2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990; or (8)
April 21, 1993 .
* Cost of Living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
MEDICAL 2/28/87(4) $ 8,953 $ 0 $ 0 $ 8,953 $11,644 $10,192
DELIVERY 2/29/88 6,955 408 23 7,386 11,333 10,594
2/28/89 8,478 498 28 9,003 12,680 11,105
2/28/90 10,253 837 81 11,172 15,077 11,689
2/28/91 16,325 1,862 130 18,317 17,286 12,311
2/29/92 21,243 4,008 169 25,420 20,053 12,658
2/28/93 14,026 4,185 111 18,322 22,193 13,068
2/28/94
PAPER AND FOREST 2/28/87(4) $15,190 $ 0 $ 0 $15,190 $11,644 $10,192
PRODUCTS 2/29/88 11,601 1,082 42 12,725 11,333 10,594
2/28/89 11,533 1,076 74 12,683 12,680 11,105
2/28/90 11,097 1,035 222 12,354 15,077 11,689
2/28/91 11,456 1,069 445 12,970 17,286 12,311
2/29/92 14,579 1,360 963 16,902 20,053 12,658
2/28/93 15,598 1,455 1,139 18,192 22,193 13,068
2/28/94
REGIONAL BANKS 2/28/87(4) $ 9,487 $ 0 $ 0 $ 9,487 $11,644 $10,192
2/29/88 8,575 175 70 8,819 11,333 10,594
2/28/89 9,894 707 296 10,897 12,680 11,105
2/28/90 10,301 1,392 419 12,113 15,077 11,689
2/28/91 9,807 1,325 601 11,733 17,286 12,311
2/29/92 15,316 2,839 1,156 19,312 20,053 12,658
2/28/93 20,254 4,889 1,684 26,827 22,193 13,068
2/28/94
CONSTRUCTION 2/28/87(5) $13,483 $ 0 $ 0 $13,483 $12,407 $10,127
AND HOUSING 2/29/88 10,195 158 0 10,353 12,076 10,526
2/28/89 11,844 470 64 12,377 13,511 11,034
2/28/90 11,029 2,007 132 13,167 16,066 11,615
2/28/91 10,961 3,447 314 14,722 18,419 12,232
2/29/92 13,250 5,569 380 19,199 21,368 12,577
2/28/93 15,268 6,433 437 22,138 23,648 12,985
2/28/94
INDUSTRIAL 2/28/87(5) $12,804 $ 0 $ 0 $12,804 $12,407 $10,127
EQUIPMENT 2/29/88 9,768 256 0 10,024 12,076 10,526
2/28/89 9,855 259 0 10,114 13,511 11,034
2/28/90 11,456 301 0 11,756 16,066 11,615
2/28/91 11,465 301 79 11,846 18,419 12,232
2/29/92 13,881 364 236 14,481 21,368 12,577
2/28/93 14,589 383 248 15,220 23,648 12,985
2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990 ; or (8)
April 21, 1993 .
* Cost of Living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
FIDELITY SELECT PORTFOLIOS INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF VALUE OF VALUE OF
FISCAL INITIAL REINVESTED REINVESTED
PERIOD $10,000 CAPITAL GAIN DIVIDEND TOTAL COST
FUND ENDED INVESTMENT DISTRIBUTIONS DISTRIBUTIONS VALUE S&P 500 OF LIVING
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDUSTRIAL 2/28/87(5) $13,017 $ 0 $ 0 $13,017 $12,407 $10,127
MATERIALS 2/29/88 12,513 11 21 12,545 12,076 10,526
2/28/89 13,056 11 238 13,305 13,511 11,034
2/28/90 12,629 11 230 12,870 16,066 11,615
2/28/91 12,067 10 539 12,616 18,419 12,232
2/29/92 16,063 14 793 16,869 21,368 12,577
2/28/93 16,917 14 920 17,851 23,648 12,985
2/28/94
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSPORTATION 2/28/87(5) $11,398 $ 0 $ 0 $11,398 $12,407 $10,127
2/29/88 9,264 155 0 9,419 12,076 10,526
2/28/89 12,377 207 0 12,585 13,511 11,034
2/28/90 11,970 2,487 0 14,457 16,066 11,615
2/28/91 10,942 2,822 0 13,764 18,419 12,232
2/29/92 15,006 3,871 61 18,938 21,368 12,577
2/28/93 18,120 5,156 74 23,350 23,648 12,985
2/28/94
ENVIRONMENTAL 2/28/90(6) $10,554 $ 0 $ 9 $10,563 $10,422 $10,314
SERVICES 2/28/91 12,600 0 11 12,611 11,949 10,862
2/29/92 12,649 486 11 13,146 13,862 11,168
2/28/93 11,019 838 10 11,867 15,341 11,531
2/28/94
CONSUMER 2/28/91(7) $10,505 $ 0 $ 65 $10,570 $10,522 $10,377
PRODUCTS 2/29/92 13,512 241 83 13,836 12,206 10,670
2/28/93 12,581 1,193 77 13,851 13,509 11,016
DEVELOPING 2/28/91(7) $10,777 $ 0 $ 0 $10,777 $10,522 $10,377
COMMUNICATIONS 2/29/92 13,997 1,002 0 14,999 12,206 10,670
2/28/93 15,947 1,174 0 17,121 13,509 11,016
2/28/94
NATURAL GAS 2/28/94
</TABLE>
Initial $10,000 investment made on (1) May 8, 1984; (2) July 29, 1985; (3)
December 16, 1985; (4) June 30, 1986;
(5) September 29, 1986; (6) June 29, 1989; (7) June 29, 1990 ; or (8)
April 21, 1993 .
* Cost of Living as measured by the Consumer Price Index starting at the
month-end closest to the initial investment date.
Explanatory Notes: Investments in the funds are subject to a sales charge
of 3% of the offering price (or 3.09% of the net amount invested). After
deduction of the sales charge, the net amount invested in shares of each
fund was $9,700. Values for each fund are based on changes in net asset
value, including net investment income earned and net capital gains
realized during each period by each fund.
The table below reflects the cost of the initial $10,000 investment in each
of the equity funds, plus the aggregate cost of reinvested dividends and
capital gain distributions, if any, from commencement of operations, or
February 28, 198 4 for funds in operation for ten years or more,
through February 28, 199 4 . If no additional shares of these funds
had been acquired through the reinvestment of distributions, the cash
payments from these funds would have come to the amounts shown in column
(A) for capital gain distributions, and the amounts shown in column (B) for
income dividends. No adjustment has been made for a shareholder's income
tax liability on dividends and capital gain distributions.
(A) (B)
CAPITAL GAIN INCOME
FUND COST DISTRIBUTIONS DIVIDENDS
Energy
Financial Services
Health Care
Precious Metals
Technology
Utilities
Defense
Leisure
Brokerage
Chemicals
Computers
Electronics
Food and Agriculture
Software
Telecommunications
Air Transportation
American Gold
Biotechnology
Energy Service
Home Finance
Insurance
Retailing
Automotive
Multimedia
Medical Delivery
Paper and Forest Products
Regional Banks
Construction and Housing
Industrial Equipment
Industrial Materials
Transportation
Environmental Services
Consumer Products
Developing Communications
Natural Gas
YIELD CALCULATIONS. To compute the money market fund's yield for a period,
the net change in value of a hypothetical account containing one share
reflects the value of additional shares purchased with dividends from the
original share and dividends declared on both the original share and any
additional shares. The net change is then divided by the value of the
account at the beginning of the period to obtain a base period return.
This base period return is annualized to obtain a current annualized yield.
The money market fund may also calculate an effective yield by compounding
the base period return over a one-year period. In addition to current
yield, the fund may quote yields in advertising based on any historical
seven-day period.
Yield information may be useful in reviewing the fund's performance and in
providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. The fund's yield is
calculated on the same basis as yields for other money market funds, as
required by regulations. When comparing investment alternatives, investors
should also note the quality and maturity of the portfolio securities of
the respective investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates the
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
The money market fund may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry.
A fund's performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings
prepared by Lipper Analytical Services, Inc. (Lipper), an independent
service located in Summit, New Jersey that monitors the performance of
mutual funds. Lipper generally ranks funds on the basis of total return,
assuming reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank money market funds based on yield. In
addition to the mutual fund rankings, a fund's performance may be compared
to mutual fund performance indices prepared by Lipper.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in
advertising.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial strategies.
For example, Fidelity's FundMatchsm Program includes a workbook describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to
those of the funds. Ibbotson calculates total returns in the same method
as the funds. The funds may also compare performance to that of other
compilations or indices that may be developed and made available in the
future.
The money market fund may compare its performance or the performance of
securities in which it may invest to averages published by IBC USA
(Publications), Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(registered trademark)/All Taxable, which is reported in the MONEY
FUND REPORT(registered trademark), covers over ___ taxable money market
funds.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(registered trademark)
number, and CUSIP number, and discuss or quote its current portfolio
manager.
VOLATILITY. The equity funds may quote various measures of volatility
and benchmark correlation in advertising. In addition, a fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate an equity fund's price movements over
specific periods of time. Each point on the momentum indicator represents
the fund's percentage change in price movements over that period.
The equity funds may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In
such a program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are high
and more shares when prices are low. While such a strategy does not assure
a profit or guard against loss in a declining market, the investor's
average cost per share can be lower than if fixed numbers of shares are
purchased at the same intervals. In evaluating such a plan, investors
should consider their ability to continue purchasing shares during periods
of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of February 28, 199 4 , FMR managed over $ __ billion in
equity fund assets as defined and tracked by Lipper. This figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
As provided for in Rule 22d-1 under the Investment Company Act of 1940, FDC
exercises its right to waive the funds' 3% sales charge on shares acquired
through reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust.
In addition, the funds' sales charge will not apply (1) if you buy shares
as part of an employee benefit plan (including the Fidelity-sponsored
403(b) and corporate IRA programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a U.S. employer and having
more than 200 eligible employees, or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary group
of corporations (within the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%") any member of which
maintains an employee benefit plan having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a non-U.S.
employer having 200 or more eligible employees or a minimum of $3,000,000
in plan assets invested in Fidelity mutual funds, the assets of which are
held in a bona fide trust for the exclusive benefit of employees
participating therein; (2) to shares purchased by an insurance company
separate account used to fund annuity contracts purchased by employee
benefit plans (including 403(b) programs, but otherwise as defined in the
Employee Retirement Income Security Act), which, in the aggregate, have
either more than 200 eligible employees or a minimum of $3,000,000 in
assets invested in Fidelity funds; (3) to shares in a Fidelity IRA account
purchased (including purchases by exchange) with the proceeds of a
distribution from an employee benefit plan provided that: (i) at the time
of the distribution, the employer, or an affiliate (as described in
exemption (1) above) of such employer, maintained at least one employee
benefit plan that qualified for exemption (1) and that had at least some
portion of its assets invested in one or more mutual funds advised by FMR,
or in one or more accounts or pools advised by Fidelity Management Trust
Company; and (ii) the distribution is transferred from the plan to a
Fidelity Rollover IRA account within 60 days from the date of the
distribution; (4) if you are a charitable organization (as defined in
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
(5) if you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code); (6) if you are an
investor participating in the Fidelity Trust Portfolios program (these
investors must make initial investments of $100,000 or more in the Trust
Portfolios and must, during the initial six-month period, reach and
maintain an aggregate balance of at least $500,000 in all accounts and
subaccounts purchased through the Trust Portfolios program); (7) to shares
purchased through Portfolio Advisory Services; (8) if you are a current or
former Trustee or officer of a Fidelity fund or a current or retired
officer, director, or full-time employee of FMR Corp. or its direct or
indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a
Fidelity Trustee or employee, a Fidelity Trustee or employee acting as
custodian for a minor child, or a person acting as trustee of a trust for
the sole benefit of the minor child of a Fidelity Trustee or employee; or
(9) if you are a bank trust officer, registered representative, or other
employee of a Qualified Recipient. Qualified Recipients are securities
dealers, or other entities, including banks and other financial
institutions, who have sold the funds' shares under special arrangements in
connection with FDC's sales activities. FDC has chosen to waive the fund's
sales charge in these instances because of the efficiencies involved in
sales of shares to these investors.
The fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction as noted
in the prospectus, in connection with investments in other Fidelity funds.
This includes reductions for investments in the following prototype or
prototype-like retirement plans sponsored by FMR or FMR Corp.: The Fidelity
IRA, The Fidelity Rollover IRA, The Fidelity SEP-IRA, The Fidelity 403(b)
Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers, and the CORPORATEplan for Retirement (Profit Sharing and Money
Purchase Plan).
Each fund is open for business and its net asset value per share (NAV)
is calculated hourly each day the New York Stock Exchange (NYSE) is open
for trading. The NYSE has designated the following holiday closings for
1994: Washington's Birthday (observed), Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day (observed). Although FMR expects the same holiday schedule, with the
addition of New Year's Day, to be observed in the future, the NYSE may
modify its holiday schedule at any time.
FSC normally determines each fund's NAV hourly, from 10:00 a.m.
to 4:00 p.m., and the final determination of each fund's NAV will coincide
with the close of business of the NYSE (normally 4:00 p.m. Eastern time);
however, NAV calculations may cease earlier if trading on the NYSE is
restricted or as permitted by the SEC. To the extent that portfolio
securities are traded in other markets on days when the NYSE is closed, a
fund's NAV may be affected on days when investors do not have access to the
fund to purchase or redeem shares. Portfolio securities in foreign markets
may not be traded during the funds' business hours. The price of these
securities will be their last determined price in the foreign market, and
will not change during the funds' business day.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the
1940 Act), each fund is required to give shareholders at least 60 days'
notice prior to terminating or modifying its exchange privilege. Under the
Rule, the 60-day notification requirement may be waived if (i) the only
effect of a modification would be to reduce or eliminate an administrative
fee, redemption fee, or deferred sales charge ordinarily payable at the
time of an exchange, or (ii) a fund suspends the redemption of the shares
to be exchanged as permitted under the 1940 Act or the rules and
regulations thereunder, or the fund to be acquired suspends the sale of its
shares because it is unable to invest amounts effectively in accordance
with its investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves
the right at any time, without prior notice, to refuse exchange purchases
by any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of the equity funds' dividends may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that the funds' income is derived from qualifying dividends.
Because the funds may earn other types of income, such as interest, income
from securities loans, non-qualifying dividends and short-term capital
gains, the percentage of dividends from the equity funds that qualify for
the deduction will generally be less than 100%. Each fund will notify
corporate shareholders annually of the percentage of that fund's dividends
that qualify for the dividends-received deduction. A portion of the funds'
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation. Gains (losses) attributable to foreign
currency fluctuations are generally taxable as ordinary income and
therefore will increase (decrease) dividend distributions. The funds will
send each shareholder a notice in January describing the tax status of
dividends and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the funds on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes.
Short-term capital gains distributed by the funds are taxable to
shareholders as dividends, not as capital gains. Distributions from
short-term capital gains do not qualify for the dividends-received
deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities typically at a rate
between 10% and 35%. If, at the close of its fiscal year, more than 50% of
a fund's total assets are invested in securities of foreign issuers, each
fund will elect to pass through foreign taxes paid and thereby allow
shareholders to take a credit or deduction on their individual tax returns.
With the possible exception of the Precious Metals and Minerals Portfolio,
FMR does not currently anticipate that the funds will qualify to pass
foreign taxes paid through to shareholders.
TAX STATUS OF THE FUNDS. Each fund has qualified and intends to continue
to qualify as a "regulated investment company" for tax purposes, so that it
will not be liable for federal tax on income and capital gains distributed
to shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes, each fund intends to
distribute substantially all of its net investment income and realized
capital gains within each calendar year as well as on a fiscal year basis.
Each fund intends to comply with other tax rules applicable to regulated
investment companies, including a requirement that capital gains from the
sale of securities held less than three months constitute less than 30% of
a fund's gross income for each fiscal year. Gains from some forward
currency contracts, futures contracts, and options are included in this 30%
calculation, which may limit the funds' investments in such instruments.
Each fund is treated as a separate entity from the other portfolios of the
fund for tax purposes.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFIC's) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on the fund with respect to deferred taxes
arising from such distributions or gains.
As of February 28, 199 4 the funds had capital loss carryovers
available to offset future capital gains, approximated as follows:
Aggregate
Capital
Loss Amount that Expires on February 28,
Fund Carryovers 1996 1997 1998 1999 2000 2001
American Gold
Brokerage and Investment
Management
Defense
Energy
Energy Service
Environmental Services
Industrial Equipment
Medical Delivery
Money Market
Paper and Forest Products
Precious Metals and Minerals
Industrial Materials
Subsequent to the reorganization of certain funds of the trust on October
26, 1990, the Insurance and Industrial Equipment Portfolios acquired
substantially all of the assets of the Life Insurance and Automation and
Machinery Portfolios, respectively. The Life Insurance and Automation and
Machinery Portfolios have capital loss carryovers of approximately $96,000
and $143,000, respectively, available to offset future realized capital
gains in the Insurance and Industrial Equipment Portfolios, respectively,
to the extent provided by regulations.
To the extent that capital loss carryovers are used to offset any future
capital gains, it is unlikely that the gains so offset will be distributed
to shareholders since any such distributions may be taxable to shareholders
as ordinary income.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the funds and their shareholders
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on distributions received from the funds. Investors should
consult their tax advisors to determine whether the funds are suitable for
their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned
subsidiaries of FMR formed in 1986, supply investment research information
and may supply portfolio management services to FMR in connection with
certain funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR
Far East research and visit thousands of domestic and foreign companies
each year. F TX , a wholly owned subsidiary of FMR formed in 1989,
supplies portfolio management and research services in connection with
certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the
Investment Company Act of 1940) by virtue of their affiliation with either
the trust or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments, Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior
to his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989),
is Chairman of G.M. Management Group (strategic advisory services). Prior
to his retirement in July 1988, he was Chairman and Chief Executive Officer
of Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee.
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of
FMR.
THOMAS D. MAHER, Assistant Vice President of Select Money Market Portfolio
(1990), is Assistant Vice President of Fidelity's money market funds and
Vice President of FMR Texas Inc. (1990).
RICHARD A. SPILLANE, Vice President of each equity fund (199_), is Vice
President of FMR (199_), and Director of Equity Research.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
BENEFICIAL OWNERSHIP. to be added by subsequent amendment
MANAGEMENT CONTRACTS
The trust employs FMR to furnish investment advisory and other services.
There is a separate management contract with FMR with respect to each fund.
Under its management contracts with the trust on behalf of each fund, FMR
acts as investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
funds with all necessary office facilities and personnel for servicing the
funds' investments, and compensates all officers of the trust, all Trustees
who are "interested persons" of the trust or FMR, and all personnel of the
trust or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the funds. These services include providing
facilities for maintaining the funds' organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the funds; preparing all general shareholder
communications and conducting shareholder relations; maintaining the funds'
records and the registration of the funds' shares under federal and state
law; developing management and shareholder services for the funds; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fees payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. The funds pay for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the funds will pay for typesetting,
printing and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, the trust has entered into a
revised transfer agent agreement with FSC, pursuant to which FSC bears the
cost of providing these services to existing shareholders. Other expenses
paid by the funds include interest, taxes, brokerage commissions, each
fund's proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal and state
securities laws. The funds are also liable for such nonrecurring expenses
as may arise, including costs of any litigation to which the funds may be a
party, and any obligation they may have to indemnify the trust's officers
and Trustees with respect to litigation.
MONEY MARKET FUND. FMR is the money market fund's manager pursuant to a
management contract dated March 1, 1994 , which was approved by
shareholders on ___________.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee calculated by adding a basic fee, which consists of a group
fee rate and an individual fund fee rate (.03%), to an income-based
component of 6% of the fund's gross income in excess of a 5% yield, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown on the left of the chart below. On the right, the effective
fee rate schedule shows the results of cumulatively applying the annualized
rates at varying asset levels. For example, the effective annual fee rate
at $___ billion of group net assets--their approximate level for February
29, 1994--was _____%, which is the weighted average of the respective fee
rates for each level of group net assets up to _____ billion.
AVERAGE GROUP EFFECTIVE
GROUP ANNUALIZED NET ANNUAL
ASSETS RATE ASSETS FEE RATE
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Based on the average net assets of funds advised by FMR for February
1994, the basic fee rate would be calculated as follows:
GROUP FEE RATE INDIVIDUAL FUND FEE RATE BASIC FEE RATE
% + .03% = %
One twelfth (1/12) of the basic fee is applied to the fund's average net
assets for the current month, giving a dollar amount which is the basic fee
for that month.
If the fund's gross yield is 5% or less, the basic fee is the total
management fee. The income-based component of the proposed fee is added to
the basic fee when the fund's yield is greater than 5%. The income-based
fee equals 6% of that portion of the fund's gross income that represents a
gross yield of more than 5% per year. The maximum income-based component is
.24% (annualized) of average net assets, at a fund gross yield of 9%. Gross
income for this purpose, includes interest accrued and/or discount earned
(including both original issue discount and market discount) on portfolio
obligations, less amortization of premium. Realized and unrealized gains
and losses, if any, are not included in gross income.
The fund's management contract with FMR prior to March 1, 1994 was dated
May 1, 1987. For the services of FMR under the contract, the money market
fund paid FMR a monthly management fee computed on the basis of the fund's
gross income. To the extent that the fund's monthly gross income equalled
an annualized yield of 5% or less, FMR received 4% of that amount of the
fund's gross income. To the extent that the fund's monthly income exceeded
an annualized yield of 5%, FMR received 6% of that excess. For this
purpose, gross income includes interest accrued or discount earned
(including both original issue and market discount), less amortization of
premium. The amount of discount or premium on portfolio instruments is
fixed at the time of purchase. Realized and unrealized gains and losses,
if any, are not included in gross income.
Pursuant to the terms of the contract, limitations we re imposed on
the compensation FMR could receive under the above formula. These
limitations we re based on the fund's average monthly net assets as
follows:
Annualized
Rate
On the first $1.5 billion .50%
On the portion in excess of $1.5 to $3.0 billion .45%
On the portion in excess of $3.0 billion to $4.5 billion .43%
On the portion in excess of $4.5 billion to $6.0 billion .41%
On the portion in excess of $6.0 billion .40%
SUB-ADVISER. With respect to the money market fund, FMR has entered
into a sub-advisory agreement with FMR Texas, dated _____, 1994 pursuant to
which FMR Texas has primary responsibility for providing portfolio
investment management services to the money market fund.
The sub-advisory agreement provides that FMR will pay F TX fees equal
to 50% of the management fee payable to FMR under its management contract
with the fund. The fees paid to F TX are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect from
time to time. During the year ended February 28, 1994, the fiscal
period May 1, 1992 to February 28, 1993 , and the fiscal year ended
April 30, 1992, FMR paid F TX fees of $ _______, $ 286,083,
and $673,018, respectively, with respect to the money market fund.
EQUITY FUNDS. FMR is each equity fund's manager pursuant to management
contracts dated March 1, 1994 . For the services of FMR under the
contracts, the funds each pay FMR a monthly management fee composed of the
sum of two elements: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated schedule
shown on the left of the chart below. On the right, the
effective annual fee rate shows the results of cumulatively applying the
annualized rates to varying asset levels. For example, the effective
annual group fee rate at $ ___ billion of group net assets - their
approximate level for February 199 4 - was ____ %, which is
the weighted average of the respective fee rates for each level of group
net assets up to ___ billion.
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AVERAGE GROUP EFFECTIVE
GROUP ANNUALIZED NET ANNUAL
ASSETS RATE ASSETS FEE RATE
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
0 - $ 3 billion .520% $ 0.5 billion .5200%
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
</TABLE>
* The rates shown for average group assets in excess of $174 billion
were adopted by FMR on a voluntary basis on November 1, 1993 pending
shareholder approval of new management contracts reflecting the extended
schedule. The extended schedule provides for lower management fees as total
assets under management increase and was approved by shareholders on
February 16, 1994.
The schedule above (minus the breakpoints added November 1, 1993) was
voluntarily adopted by FMR on January 1, 1992 pending shareholder approval
of new management contracts reflecting the extended schedule. On February
17, 1993, shareholders of the Home Finance Portfolio approved an amended
management contract which was effective March 1, 1993, containing the
revised group fee rate schedule. Prior to January 1, 1992, the fund's
group fee rate was based on a schedule with breakpoints ending at .310% for
average group assets in excess of $102 billion. Shareholders voted to
adopt the shorter schedule on ____________________.
The individual fund fee rate is .30%. Based on the average net assets of
funds advised by FMR for February 1994, the annual management fee rate
would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
.___% + .30% = .___%
One twelfth (1/12) of this annual management fee rate is then applied to
each fund's average net assets for the current month, giving a dollar
amount which is the fee for that month.
Fees Collected by FMR. The table on page __ provides information about the
management fees payable to FMR under the management contracts in effect for
the last three fiscal periods. The column entitled "Gross Management Fees"
provides the dollar amount of management fees provided for under those
contracts. The column entitled "Reimbursements" lists the sum of any fees
and other expenses of the fund that FMR effectively assumed by reimbursing
the funds for those expenses, as discussed below. Expense reimbursements
represent reductions of FMR's revenues from the funds. The column entitled
"Net Fees" represents the gross management fees payable to FMR, less the
amount of fee and expense reimbursements by FMR during the period.
Reimbursement of Expenses. To comply with the California Code of
Regulations, FMR will reimburse each fund if and to the extent that a
fund's aggregate annual operating expenses exceed specified percentages of
its average net assets. In connection with the expense limitation
regulations, each fund has received an order which permits excluding from
aggregate operating expenses a portion of its transfer and shareholder's
servicing agent fees and out-of-pocket expenses. The applicable
percentages are 2 1/2% of the first $30 million, 2% of the next $70
million, and 1 1/2% of average net assets in excess of $100 million. When
calculating each fund's expenses for purposes of this regulation, a fund
may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities. In addition, the fund has agreed to a
condition imposed by the State of California which requires certain funds,
for purposes of the expense limitation regulations, to include in aggregate
operating expenses all expenses incurred in connection with the
acquisition, retention, and disposal of gold, including brokerage
commissions. Also, FMR voluntarily limits expenses, excluding interest,
taxes, brokerage commissions, and extraordinary expenses of each fund to 2
1/2% of average net assets.
[INSERT MANAGEMENT FEES TABLE]
Foreign Sub-Advisers. On January 1, 1990, FMR entered into sub-advisory
agreements with FMR U.K. and FMR Far East pursuant to which FMR U.K. and
FMR Far East supply FMR with investment research and recommendations
concerning securities on behalf of of the equity funds (excluding the
American Gold and Natural Gas Portfolios). Effective April 15, 1993, FMR
entered into sub-advisory agreements with FMR U.K. and FMR Far East on
behalf of the Natural Gas Portfolio. These agreements are the same as the
current sub-advisory agreements for the other equity funds. On _____,
1994, FMR entered into sub-advisory agreements with FMR U.K. and FMR Far
East on behalf of the equity funds (except American Gold Portfolio).
Pursuant to the sub-advisory agreements, FMR may receive investment advice
and research services with respect to companies based outside the U.S. and
may grant the sub-advisers investment management authority as well as the
authority to buy and sell securities if FMR believes it would be beneficial
to the funds.
For providing investment advice and research services FMR pays FMR U.K.
and FMR Far East fees equal to 110% and 105%, respectively, of FMR U.K.'s
and FMR Far East's costs incurred in connection with providing investment
advice and research services. For providing investment management and
executing portfolio transactions, FMR pays FMR U.K. and FMR Far East 50% of
its monthly management fee with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis. The table below shows
the fees paid by FMR to FMR U.K. and FMR Far East with respect to certain
of the funds for the fiscal year ended February 28, 1994, the fiscal period
ended Februar y 28, 1993 and the fiscal year ended April 30,
1992. No fees were paid with respect to funds omitted from this table.
FEES PAID BY FMR TO FOREIGN SUB-ADVISERS
FUND FEES PAID BY FMR TO FMR U.K.
FEES PAID BY FMR TO FMR FAR EAST
FISCAL 1994 FISCAL 1993 FISCAL 1992 FISCAL 1994 FISCAL 1993 FISCAL 1992
Air Transportation $ $ $ $
American Gold --
Automotive
Biotechnology
Multimedia
Chemicals
Developing
Communications
Electronics
Energy
Energy Service
Environmental
Services
Financial Services
Food and Agriculture
Health
Leisure
Precious Metals
Retailing
Software
Technology
Telecommunications
Utilities
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent for
the funds. Under the trust's contract with FSC, the equity funds pay an
annual fee of $63 per basic retail account with a balance of $5,000 or
more, $35 per basic retail account with a balance of less than $5,000 and a
supplemental activity charge of $5.61 for monetary transactions. The money
market fund pays an annual fee of $13.75 per basic retail account with a
balance of $5,000 or more, $10 per basic retail account with a balance of
less than $5,000 and a supplemental activity charge of $5.61 for monetary
transactions . These fees and charges are subject to annual cost
escalation based on postal rate changes and changes in wage and price
levels as measured by the National Consumer Price Index for Urban Areas.
With respect to institutional client master accounts, each fund pays FSC a
per-account fee of $95, and monetary transaction charges of $20 or $17.50,
depending on the nature of services provided. With respect to certain
broker-dealer master accounts, the funds pay FSC a per-account fee of $30
and a charge of $6 for monetary transactions. Fees for certain
institutional retirement plan accounts are based on the net assets of all
such accounts in each fund.
Under the contract, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, with the exception of proxy statements.
The table below shows the transfer agent fees, including reimbursement for
out-of-pocket expenses, paid to FSC for the fiscal year ended February 28.
1994, the fiscal period May 1, 1992 to February 28, 1993, and the fiscal
year ended April 30, 1992.
TRANSFER AGENT FEES
FISCAL FISCAL FISCAL
1994 1993 1992
ENERGY $ 588,317 $ 778,899
FINANCIAL SERVICES 751,881 543,660
HEALTH CARE 4,978,972 6,339,307
PRECIOUS METALS AND MINERALS 1,003,502 1,604,326
TECHNOLOGY 834,807 1,076,669
UTILITIES 1,335,888 1,695,320
DEFENSE AND AEROSPACE 17,117 37,099
LEISURE 337,467 497,792
BROKERAGE AND INVESTMENT
MANAGEMENT 168,092 212,155
CHEMICALS 305,400 321,595
COMPUTERS 318,208 365,299
ELECTRONICS 362,155 247,544
FOOD AND AGRICULTURE 809,112 948,355
SOFTWARE AND COMPUTER SERVICES 846,760 442,252
TELECOMMUNICATIONS 762,528 686,869
AIR TRANSPORTATION 117,931 110,792
AMERICAN GOLD 1,086,255 1,536,749
BIOTECHNOLOGY 5,041,968 6,286,150
ENERGY SERVICE 432,758 571,797
INSURANCE 121,497 36,047
RETAILING 522,518 381,749
HOME FINANCE 848,854 179,087
MONEY MARKET 1,476,509 1,869,920
AUTOMOTIVE 776,705 159,416
MULTIMEDIA 141,067 81,381
MEDICAL DELIVERY 1,142,334 1,474,335
PAPER AND FOREST PRODUCTS 162,052 295,185
REGIONAL BANKS 1,187,398 404,277
INDUSTRIAL EQUIPMENT 64,231 43,790
CONSTRUCTION AND HOUSING 183,446 129,029
INDUSTRIAL MATERIALS 234,240 116,715
TRANSPORTATION 48,712 57,479
ENVIRONMENTAL SERVICES 640,648 1,081,939
CONSUMER PRODUCTS 77,241 56,942
DEVELOPING COMMUNICATIONS 440,744 229,577
NATURAL GAS 199,958 273,635
If a portion of the fund's brokerage commissions had not resulted in
payment of certain of these fees, the fund would have paid transfer agent
fees of _____________, respectively.
The trust's contract with FSC also provides that FSC will perform the
calculations necessary to determine each fund's net asset value per share
and dividends, and maintain each fund's accounting records. Prior to July
1, 1991, the annual fee for these pricing and bookkeeping services was
based on two schedules, one pertaining to each fund's average net assets,
and one pertaining to the type and number of transactions each fund made.
The fee rates in effect as of July 1, 1991 are based on each fund's average
net assets, specifically, .10% for the first $500 million of average net
assets and .05% for average net assets in excess of $500 million. The fee
is limited to a minimum of $45,000 and a maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses for each fund for
fiscal 1994, the fiscal 1993 period, and fiscal 1992.
PRICING AND BOOKKEEPING FEES
FISCAL FISCAL FISCAL
1994 1993 1992
ENERGY $ 66,546 $ 77,067
FINANCIAL SERVICES 104,535 61,679
HEALTH CARE 553,099 620,889
PRECIOUS METALS AND MINERALS 108,598 151,827
TECHNOLOGY 97,062 110,871
UTILITIES 204,083 202,173
DEFENSE AND AEROSPACE 37,615 44,219
LEISURE 37,900 50,760
BROKERAGE AND INVESTMENT MANAGEMENT 37,712 45,643
CHEMICALS 37,786 45,696
COMPUTERS 41,740 46,388
ELECTRONICS 47,286 48,970
FOOD AND AGRICULTURE 91,812 92,535
SOFTWARE AND COMPUTER SERVICES 99,153 64,998
TELECOMMUNICATIONS 81,440 64,096
AIR TRANSPORTATION 37,638 44,836
AMERICAN GOLD 135,825 152,898
BIOTECHNOLOGY 541,731 588,902
ENERGY SERVICE 45,991 50,706
INSURANCE 37,521 44,529
RETAILING 53,809 51,626
HOME FINANCE 117,281 46,083
MONEY MARKET 70,831 96,341
AUTOMOTIVE 90,154 53,397
BROADCAST AND MEDIA 37,725 45,369
ELECTRIC UTILITIES 37,658 44,797
MEDICAL DELIVERY 109,268 143,364
PAPER AND FOREST PRODUCTS 37,829 50,805
REGIONAL BANKS 165,687 58,483
INDUSTRIAL EQUIPMENT 37,581 44,747
CONSTRUCTION AND HOUSING 37,822 48,196
INDUSTRIAL MATERIALS 37,737 46,057
TRANSPORTATION 37,639 46,165
ENVIRONMENTAL SERVICES 52,744 78,539
CONSUMER PRODUCTS 37,669 45,454
DEVELOPING COMMUNICATIONS 46,374 44,346
FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. The table on the next page shows the
securities lending fees paid to FSC for fiscal 1994 and the fiscal period
ended February 28, 1993. For fiscal 1992 the fees for securities lending
are included in the pricing and bookkeeping fees in the table above.
SECURITIES LENDING FEES
FISCAL 1994
FISCAL 1993
ENERGY $ 632
FINANCIAL SERVICES 28,974
HEALTH CARE 165,457
PRECIOUS METALS AND MINERALS 1,194
UTILITIES 528
ELECTRONICS 399
SOFTWARE AND COMPUTER SERVICES 13,661
TELECOMMUNICATIONS 16,157
AMERICAN GOLD 2,777
BIOTECHNOLOGY 129,715
RETAILING 1,574
MEDICAL DELIVERY 30,881
REGIONAL BANKS 23,970
From December 1, 1987 to November 15, 1989, the fund charged a $25 fee for
exchanges among the Select funds (excluding exchanges out of the money
market fund and the Select Cash Reserves Account). Out of this $25
exchange fee, $15 was retained by FSC and the remaining $10 was credited to
the fund from which the exchange originated and used to offset the fund's
transfer agent expenses. During the period May 1, 1989 to November 15,
1989 and the fiscal year ended April 30, 1989 aggregate exchange fees
credited to the funds amounted to $792,990 and $1,708,984, respectively.
The aggregate exchange fees retained by FSC during the fiscal period ended
February 28, 1993 and fiscal years ended April 30, 1992, and 1991 amounted
to $2,069,471, $2,009,728, and $1,649,183, respectively. Exchange fees
retained by FSC or credited to the funds are not reflected in the table
above. Currently, FSC is credited with a $7.50 exchange fee for each
exchange from an equity fund, including each exchange from an equity fund
to another Fidelity fund. The funds are credited with redemption fees, the
amounts of which are based on the length of time shares are held in an
equity fund prior to redemption.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. Each fund's distribution agreement
calls for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FDC.
For the fiscal period ended February 28, 1993 and for fiscal 1992 and 1991,
FDC collected, in the aggregate, $1,331,160, $2,651,710, and $3,217,732,
respectively, of deferred sales charges from the total value of shares
redeemed by shareholders in all funds and from the Select Cash Reserves
Account. Beginning on June 15, 1983, the funds' shares were sold subject
to a 2% sales charge. On October 12, 1990, the fund's 2% sales charge was
increased to 3% and the 1% deferred sales charge was eliminated. FDC
received aggregate sales charge revenue for the fiscal period ended
February 28, 1993 and for fiscal 1992 and 1991 in amounts of $22,273,836,
$37,889,250, and $16,779,270, respectively.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Select Portfolios is an open-end management
investment company organized as a Massachusetts business trust on November
20, 1980. Subsequent to the reorganization of certain funds of the trust
on October 26, 1990, Automation and Machinery Portfolio, Life Insurance
Portfolio, and Restaurant Industry Portfolio no longer exist. Also due to
the reorganization, Capital Goods Portfolio was renamed "Industrial
Technology Portfolio," and Property and Casualty Insurance Portfolio was
renamed "Insurance Portfolio." Subsequent to an additional
reorganization on February 25, 1994, Electric Utilities Portfolio no longer
exists.
On April 25, 1994, Broadcast and Media Portfolio was renamed "Multimedia
Portfolio."
On February 17, 1993, Savings and Loan Portfolio was renamed "Home Finance
Portfolio."
On June 29, 1992, Industrial Technology Portfolio was renamed "Industrial
Equipment Portfolio."
On June 14, 1990, Housing Portfolio was renamed "Construction and Housing
Portfolio."
On July 10, 1987, Health Care Delivery Portfolio was renamed "Medical
Delivery Portfolio."
On July 29, 1985, Leisure and Entertainment Portfolio was renamed "Leisure
Portfolio."
Currently there are thirty-six funds of the trust. The Declaration
of Trust permits the Trustees to create additional funds.
In the event that FMR cease to be the investment adviser to the trust or
a fund, the right of the trust or fund to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one fund
might become liable for any misstatement in its prospectus or statement of
additional information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to
be allocated in proportion to the asset value of the respective funds,
except where allocations of direct expense can otherwise be fairly made.
The officers of the trust, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust also
provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgement thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they
have exercised reasonable care, will not be liable for nay neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value per share you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of redemption,
and the privilege of exchange are described in the Prospectus. share are
fully paid and nonasssessable, except as set forth under the heading
"Shareholder and trustee liability" above. Shareholder representing 10% or
more of the trust or a fund may, as set forth in the Declaration of Trust,
call meetings of the trust or a fund for any purpose related to the trust
or fund, as the case may be including, in the case of a meeting of the
entire trust, the purpose of voting on removal of one or more Trustees.
The trust or the fund may be terminated upon the sale of its assets to
another open-end management investment company,or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the trust or the fund, as determined by the current value of
each shareholder's investment in the fund or trust. If not so terminated,
the trust and the funds will continue indefinitely. The trust may invest
all of its assets in another investment company.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of the equity funds. The Bank of
New York, 110 Washington Street, New York, New York is custodian of the
assets of the money market fund. The custodian is responsible for the
safekeeping of the fund's assets and the appointment of subcustodian banks
and clearing agencies. The custodian takes no part in determining the
investment policies of the funds or in deciding which securities are
purchased or sold by the funds. The funds may, however, invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. The Boston branch of the equity funds' custodian leases its office
space from an affiliate of FMR at a lease payment which, when entered into,
was consistent with prevailing market rates. Transactions that have
occurred to date include mortgages and personal and general business loans.
In the judgment of FMR, the terms and conditions of those transactions were
not influenced by existing or potential custodial or other fund
relationships.
AUDITOR. Price Waterhouse, 160 Federal Street, Boston, Massachusetts,
serves as the trust's independent accountant. The auditor examines
financial statements for the funds and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
The funds' Annual Report for the fiscal year ended February 28,
1994 is a separate report supplied with this Statement of Additional
Information and is incorporated herein by reference.
To Be Updated
SELECT PORTFOLIOS MANAGEMENT FEES
Fiscal 1993 Fiscal 1992 Fiscal 1991
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Reimbursements Gross Reimbursements Gross Reimbursements
Management by Net Management by Net Management by Net
Fees FMR Fees Fees FMR Fees Fees FMR Fees
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Energy
$ 416,288 $ -- $ 416,288 $ 508,749 $ -- $ 508,749 $ 668,405 $ -- $ 668,405
Financial Services
638,638 -- 638,638 337,114 -- 337,114 143,222 -- 143,222
Health Care
4,123,675 -- 4,123,675 5,569,078 -- 5,569,078 2,491,241 -- 2,491,241
Precious Metals and Minerals
674,744 -- 674,744 1,025,350 -- 1,025,350 1,193,504 -- 1,193,504
Technology
611,003 -- 611,003 709,494 -- 709,494 627,594 -- 627,594
Utilities
1,288,773 -- 1,288,773 1,405,035 -- 1,405,035 1,018,744 -- 1,018,744
Defense and Aerospace
6,864 76,661 -- 13,086 79,708 -- 13,517 106,456 --
Leisure
209,257 -- 209,257 247,251 -- 247,251 267,006 -- 267,006
Brokerage and Investment
95,887 -- 95,887 116,514 -- 116,514 24,192 91,935 --
Management
Chemicals
185,268 -- 185,268 171,330 -- 171,330 123,246 2,902 120,344
Computers
204,894 -- 204,894 178,574 -- 178,574 179,368 -- 179,368
Electronics
250,377 -- 250,377 136,804 -- 136,804 152,301 -- 152,301
Food and Agriculture
576,530 -- 576,530 582,126 -- 582,126 234,307 -- 234,307
Software and Computer Services
607,554 -- 607,554 266,322 -- 266,322 90,399 44,867 45,532
Telecommunications
504,083 -- 504,083 393,527 -- 393,527 392,744 -- 392,744
Air Transportation
59,743 14,656 45,087 45,893 57,520 -- 26,142 103,831 --
American Gold
845,121 -- 845,121 1,044,883 -- 1,044,883 1,264,272 -- 1,264,272
Biotechnology
3,963,575 -- 3,963,575 4,999,395 -- 4,999,395 1,558,805 -- 1,558,805
Energy Service
275,342 -- 275,342 272,314 -- 272,314 594,804 -- 594,804
Home Finance
740,779 -- 740,779 17,259 89,441 -- 37,779 82,954 --
Insurance
66,292 3,264 63,028 243,819 -- 243,819 14,357 122,395 --
Retailing
334,719 -- 334,719 121,491 -- 121,491 52,282 74,297 --
Money Market
572,165 -- 572,165 1,346,034 -- 1,346,034 2,195,222 -- 2,195,222
Automotive
567,565 -- 567,565 107,873 -- 107,873 3,717 109,509 --
Broadcast and Media
73,299 6,172 67,127 36,063 62,779 -- 37,331 102,651 --
Electric Utilities
161,463 -- 161,463 187,116 -- 187,116 145,820 -- 145,820
Medical Delivery
664,439 -- 664,439 946,897 -- 946,897 335,402 -- 335,402
Paper and Forest Products
92,798 -- 92,798 159,393 -- 159,393 31,078 96,209 --
Regional Banks
1,028,328 -- 1,028,328 298,441 -- 298,441 51,250 66,775 --
Construction and Housing
117,233 -- 117,233 20,946 91,040 -- 9,560 121,627 --
Industrial Equipment
32,577 46,631 -- 49,283 90,575 -- 11,493 133,471 --
Industrial Materials
131,822 -- 131,822 56,572 29,837 26,735 15,474 106,640 --
Transportation
23,650 62,581 -- 19,507 89,539 -- 5,988 114,117 --
Environmental Services
330,763 -- 330,763 523,226 -- 523,226 694,679 -- 694,679
Consumer Products
39,378 43,176 -- 26,792 76,900 -- 4,576 111,589 --
Developing Communications
273,728 -- 273,728 113,409 1,359 112,050 19,526 119,671 --
</TABLE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Not applicable
(b) Exhibits:
(1) (a) Declaration of Trust dated November 20, 1980, as amended, is
incorporated herein by reference to
Exhibit 1(b)(1) to the Registration Statement.
(b) Supplement to Declaration of Trust, dated as of June 9, 1981, is
incorporated herein by reference to
Exhibit 1(b)(1)(b) to Pre-Effective Amendment No. 2.
(c) Supplement to Declaration of Trust, dated as of May 15, 1987, is
incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 22.
(d) Amended and Restated Declaration of Trust, dated as of January 1, 1990,
is incorporated herein by reference to Exhibit 1(d) to Post-Effective
Amendment No. 33.
(2) Not applicable.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contracts between Registrant's Air Transportation,
American Gold, Automotive,
Biotechnology, Broadcast and Media, Brokerage and Investment Management,
Chemicals, Computers, Construction and Housing (formerly Housing),
Defense and Aerospace, Electron ics, Energy, Energy Service, Financial
Services, Food and Agriculture, Health Care, Industrial Materials,
Industrial Equip ment (formerly Industrial Technology), Insurance
(formerly Property and Casualty Insurance), Leisure, Medical Delivery,
Paper and Forest Products, Precious Metals and Minerals, Regional Banks,
Retailing, Software and Computer Services, Technology,
Telecommunications, Transportation and Utilities Portfo lios and Fidelity
Management & Research Company, each of which is dated January 1, 1990,
are in corporated herein by reference to Exhibit Nos. 5(a)(1-35) to
Post-Effective Amendment No. 34.
(b) Management Contract dated June 29, 1989 between Registrant's
Environmental Services Portfolio and Fidelity Management & Research
Company is incorporated herein by reference to Exhibit 5(b) to
Post-Effective Amendment No. 33.
(c) Management Contract dated June 14, 1990 between Registrant's Consumer
Products Portfolio and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(c) to Post-Effective
Amendment No. 36.
(d) Management Contract dated June 14, 1990 between Registrant's Developing
Communications Portfolio and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(d) to Post-Effective
Amendment No. 36.
(e) Management Contract between Registrant's Home Finance Portfolio
(formerly Savings and Loan Portfolio) and Fidelity Management &
Research Company, dated March 1, 1993 is incorporated herein by reference
to Exhibit 5(e) to Post-Effective Amendment No. 46.
(f) Management Contract between Registrant's Natural Gas Portfolio and
Fidelity Management & Research Company, dated April 15, 1993 is
incorporated herein by reference to Exhibit 5(f) to Post-Effective
Amendment No. 46.
(g) Sub-Advisory Agreements between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. with respect to
each equity Portfolio (except the American Gold Portfolio, Consumer
Products Portfolio, Developing Communications Portfolio, and Natural Gas
Portfolio), each of which is dated January 1, 1990, are incorporated herein
by reference to Exhibit Nos. 5(e)(1-35) to Post-Effective Amendment No 34.
(h) Sub-Advisory Agreements between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. with respect
to each equity Portfolio (except the American Gold Portfolio, Consumer
Products Portfolio, Developing Communications Portfolio, and Natural Gas
Portfolio), each of which is dated January 1, 1990, are incorporated herein
by reference to Exhibit Nos. 5(f)(1-35) to Post-Effective Amendment No. 34.
(i) Sub-Advisory Agreement between Fidelity Management & Research
Company and FMR Texas Inc. with respect to the Money Market Portfolio,
dated January 1, 1990, is incorporated herein by reference to Exhibit 5(g)
to Post-Effective Amendment No. 34.
(j) Sub-Advisory Agreements between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. with respect to
the Consumer Products Portfolio and Developing Communications Portfolio,
each of which is dated June 14, 1990, are incorporated herein by reference
to Exhibit Nos. 5(h)(1-2) to Post-Effective Amendment No. 36.
(k) Sub-Advisory Agreements between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. with respect
to the Consumer Products Portfolio and Developing Communications Portfolio,
each of which is dated June 14, 1990, are incorporated herein by reference
to Exhibit Nos. 5(i)(1-2) to Post-Effective Amendment No. 36.
(l) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., with respect to
the Natural Gas Portfolio, dated April 15, 1993, is incorporated herein by
reference to Exhibit 5(l) to Post-Effective Amendment No. 46.
(m) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., with
respect to the Natural Gas Portfolio, dated April 15, 1993, is incorporated
herein by reference to Exhibit 5(m) to Post-Effective Amendment No. 46.
(6) (a) Distribution Agreements between Registrant's Air Transportation,
American Gold, Automotive, Biotechnology, Broadcast and Media, Brokerage
and Investment Management, Chemicals, Computers, Construction and Housing
(formerly Housing),Defense and Aerospace, Electronics, Energy, Energy
Service, Financial Services, Food and Agriculture, Health Care, Home
Finance (formerly Savings and Loan), Industrial Materials, Industrial
Equipment (formerly Industrial Technology), Insurance (formerly Property
and Casualty Insurance), Leisure, Medical Delivery, Money Market, Paper and
Forest Products, Precious Metals and Minerals, Regional Banks, Retailing,
Software and Computer Services, Technology, Telecommunications,
Transportation and Utilities Portfolios and Fidelity Distributors
Corporation, each of which is dated April 1, 1987, are incorporated herein
by reference to Exhibit Nos. 6(a) (1-36) to Post-Effective Amendment No.
23.
(b) Amendment to Distribution Agreements between Air Transportation,
American Gold, Automotive, Biotechnology, Broadcast and Media, Brokerage
and Investment Management, Chemicals, Computers, Construction and Housing
(formerly Housing), Defense and Aerospace, Electronics, Energy, Energy
Service, Financial Services, Food and Agriculture, Health Care, Home
Finanace (formerly Savings and Loan), Industrial Materials, Industrial
Equipment (formerly Industrial Technology), Insurance (formerly Property
and Casualty Insurance), Leisure, Medical Delivery, Money Market, Paper and
Forest Products, Precious Metals and Minerals, Regional Banks, Retailing,
Software and Computer Services, Technology, Telecommunications,
Transportation and Utilities Portfolios and Fidelity Distributors
Corporation, each of which is dated January 1, 1988, is incorporated herein
by reference to Exhibit 6(b) to Post-Effective Amendment No. 25.
(c) Distribution Agreement between Registrant's Environmental Services
Portfolio and Fidelity Distributors Corporation, dated June 29, 1989, is
incorporated herein by reference to Exhibit 6(c) to Post-Effective
Amendment No. 34.
(d) Distribution Agreement between Registrant's Consumer Products Portfolio
and Fidelity Distributors Corporation, dated June 14, 1990 is incorporated
herein by reference to Exhibit 6(d) to Post-Effective Amendment No. 36.
(e) Distribution Agreement between Registrant's Developing Communications
Portfolio and Fidelity Distributors Corporation, dated June 14, 1990 is
incorporated herein by reference to Exhibit 6(e) to Post-Effective
Amendment No. 36.
(f) Distribution Agreement between Registrant's Natural Gas Portfolio and
Fidelity Distributors Corporation, dated April 15, 1993 is incorporated
herein by reference to Exhibit 6(f) to Post-Effective Amendment No. 46.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein
by reference to Exhibit 7 to Post-Effective Amendment No. 42.
(8) (a) Custodian Contract between Registrant and Brown Brothers Harriman
& Co,. on behalf of the equity Portfolios, dated as of July 18,
1991, is incorporated herein by reference to Exhibit 8(a) to Post-Ef
fective Amendment No. 41.
(b) Custodian Contract between Registrant and Bank of New York, on behalf
of Select Money Market Port folio, dated as of July 18, 1991, is
incorporated herein by reference to Exhibit 8(b) to Post- Effective
Amendment No. 41.
(9) (a) Amended Service Agreement between FMR Corp., Fidelity Service Co.
and Registrant, dated June 1, 1989, is incorporated herein by reference
to Exhibit 9(a) to Post-Effective Amendment No. 32.
(b) Schedule A (transfer agent, dividend and distribution disbursing agent,
and shareholder servicing agent) to the Amended Agreement, dated June 1,
1989, with respect to the Registrant's equity Portfolios, is incorporated
herein by reference to Exhibit 9(b) to Post-Effective Amendment No. 32.
(c) Schedule A (transfer agent, dividend and distribution disbursing agent,
and shareholder servicing agent) to the Amended Agreement, dated June 1,
1989, with respect to the Registrant's Money Market Portfolio, is
incorporated herein by reference to Exhibit 9(c) to Post-Effective
Amendment No. 32.
(d) Schedule B (agent to perform portfolio pricing and bookkeeping) to the
Amended Agreement, dated June 1, 1989, with respect to the Registrant's
equity Portfolios, is incorporated herein by reference to Exhibit 9(d) to
Post-Effective Amendment No. 32.
(e) Schedule B (agent to perform portfolio pricing and bookkeeping) to the
Amended Agreement, dated June 1, 1989, with respect to the Registrant's
Money Market Portfolio, is incorporated herein by reference to Exhibit 9(e)
to Post-Effective Amendment No. 32.
(f) Schedule C (agent for securities lending transactions) to the Amended
Agreement, dated June 1, 1989, with respect to the Registrant's equity
Portfolios, is incorporated herein by reference to Exhibit 9(f) to
Post-Effective Amendment No. 32.
(g) Schedule C (agent for securities lending transactions) to the Amended
Agreement, dated June 1, 1989, with respect to the Registrant's Money
Market Portfolio, is incorporated herein by reference to Exhibit 9(g) to
Post-Effective Amendment No. 32.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Post-Effective Amendment No. 38.
(b) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(b)
to Post-Effective Amendment No. 38.
(c) Fidelity Defined Benefit Pension Plan and Trust Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(c) to
Post-Effective Amendment No. 38.
(d) Fidelity Group Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(d) to Post-Effective Amendment No. 38.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by refer ence to Exhibit 14(e) to
Post-Effective Amendment No. 39.
(f) Fidelity Master Plan for Savings and Investments, as currently in
effect, is incorporated herein by refer ence to Exhibit 14(f) to
Post-Effective Amendment No. 39.
(g) Fidelity 401(a) Prototype Plan for Tax-Exempt Employers, as currently
in effect, is incorporated herein by reference to Exhibit 14(g) to
Post-Effective Amendment No. 38.
(15) Not applicable.
(16) (a) A schedule for computation of performance quotations for each
Portfolio then registered was filed as Exhibit 16 to Post-Effective
Amendment No. 26.
(b) A schedule for computation of performance quotations regarding
adjusted net asset value for the equity Portfolios was filed as Exhibit
16(b) to Post-Effective Amendment No. 44.
(c) Backup for the computation of a moving average (using Select American
Gold Portfolio as an example) was filed as Exhibit 16 (c) to
Post-Effective Amendment No. 45.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities December 31, 1994
Title of Class: Shares of Beneficial Interest
Title of Class Number of Record Holders
Air Transportation Portfolio 5,611
American Gold Portfolio 50,239
Automotive Portfolio 28,208
Biotechnology Portfolio 120,923
Broadcast and Media Portfolio 17,189
Brokerage and Investment Management Portfolio 15,601
Chemicals Portfolio 7,405
Computers Portfolio 10,887
Construction and Housing Portfolio 7,860
Consumer Products Portfolio 3,037
Defense and Aerospace Portfolio 1,770
Developing Communications Portfolio 35,587
Electronics Portfolio 12,448
Energy Portfolio 26,877
Energy Service Portfolio 19,359
Environmental Services Portfolio 18,768
Financial Services Portfolio 32,320
Food and Agriculture Portfolio 26,117
Health Care Portfolio 111,586
Home Finance Portfolio 44,736
Industrial Equipment Portfolio 12,639
Industrial Materials Portfolio 7,275
Insurance Portfolio 5,643
Leisure Portfolio 16,303
Medical Delivery Portfolio 30,235
Money Market Portfolio 51,320
Natural Gas Portfolio 10,843
Paper and Forest Products Portfolio 6,875
Precious Metals and Minerals Portfolio 62,462
Regional Banks Portfolio 42,481
Retailing Portfolio 16,425
Software and Computer Services Portfolio 34,323
Technology Portfolio 32,127
Telecommunications Portfolio 66,513
Transportation Portfolio 3,005
Utilities Portfolio 41,966
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds advised
by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director
of Worldwide Research of FMR.
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management
& Research (Far East) Inc.; Treasurer of FMR Texas Inc.,
Senior Vice President and Chief Financial Officer of the Fidelity
funds.
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management &
Research (Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management
& Research (U.K.) Inc.; Senior Vice President and
Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research
(U.K.) Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
FMR Texas Inc.; Senior Vice President and Chief
Financial Officer of the Fidelity funds.
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management
& Research (U.K.) Inc.; Secretary of FMR Texas
Inc.
</TABLE>
(4) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management
& Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past two
fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity
Management & Research (Far East) Inc. and
Fidelity Management & Research (U.K.) Inc.;
President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far
East) Inc. and Fidelity Management & Research
(U.K.) Inc.; Senior Vice President and Trustee of funds
advised by FMR.
Frederic L. Henning Jr. Senior Vice President of FMR Texas; Money Market
Group Leader.
Leland Baron Vice President of FMR Texas and of funds advised by
FMR.
Thomas D. Maher Vice President of FMR Texas.
Burnell Stehman Vice President of FMR Texas and of funds advised by
FMR.
John Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds advised by
FMR.
Charles F. Dornbush Treasurer of FMR Texas; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
Fidelity Management & Research (Far East) Inc.;
Senior Vice President and Chief Financial Officer of the
Fidelity funds.
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity
Management & Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian The Bank of New York, 110 Washington Street, New York,
N.Y or Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 32. Undertakings
The Registrant undertakes for Natural Gas Portfolio: 1) to call a meeting
of shareholders for the purpose of voting upon the question of removal of a
trustee or trustees, when requested to do so by record holders of not less
than 10% of its outstanding shares; and 2) to assist in communications with
other shareholders pursuant to Section 16(c)(1) and (2), whenever
shareholders meeting the qualifications set forth in Section 16(c) seek the
opportunity to communicate with other shareholders with a view toward
requesting a meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No.47 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 14th day of February
1994.
FIDELITY SELECT PORTFOLIOS
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee February 14, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer February 14, 1994
Gary L. French
/s/J. Gary Burkhead Trustee February 14, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee February 14, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee February 14, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee February 14, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee February 14, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee February 14, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee Februry 14, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee February 14, 1994
Edward H. Malone
/s/Gerald C. McDonough* Trustee February 14, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee February 14, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
