(2_FIDELITY_LOGOS)FIDELITY
SELECT
PORTFOLIOS(REGISTERED TRADEMARK)
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
MONEY MARKET
MULTIMEDIA
NATURAL GAS
PAPER AND FOREST PRODUCTS
PRECIOUS METALS AND MINERALS
REGIONAL BANKS
RETAILING
SOFTWARE AND COMPUTER SERVICES
TECHNOLOGY
TELECOMMUNICATIONS
TRANSPORTATION
UTILITIES GROWTH
SEMIANNUAL REPORT
AUGUST 31, 1995
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PERFORMANCE OVERVIEW AND
MARKET RECAP 2
FUND UPDATES*
CONSUMER SECTOR 4 CONSUMER PRODUCTS
10 FOOD AND AGRICULTURE
15 LEISURE
22 MULTIMEDIA
28 RETAILING
CYCLICALS SECTOR 34 AIR TRANSPORTATION
40 AUTOMOTIVE
46 CHEMICALS
52 CONSTRUCTION AND HOUSING
58 ENVIRONMENTAL SERVICES
64 INDUSTRIAL EQUIPMENT
70 INDUSTRIAL MATERIALS
76 PAPER AND FOREST PRODUCTS
81 TRANSPORTATION
ENERGY, UTILITIES AND 86 AMERICAN GOLD
NATURAL RESOURCES SECTOR 92 ENERGY
98 ENERGY SERVICE
103 NATURAL GAS
109 PRECIOUS METALS AND MINERALS
115 UTILITIES GROWTH
FINANCIAL SERVICES SECTOR 121 BROKERAGE AND INVESTMENT MANAGEMENT
126 FINANCIAL SERVICES
131 HOME FINANCE
137 INSURANCE
142 REGIONAL BANKS
HEALTH CARE SECTOR 147 BIOTECHNOLOGY
153 HEALTH CARE
159 MEDICAL DELIVERY
TECHNOLOGY SECTOR 165 COMPUTERS
172 DEFENSE AND AEROSPACE
178 DEVELOPING COMMUNICATIONS
184 ELECTRONICS
191 SOFTWARE AND COMPUTER SERVICES
197 TECHNOLOGY
205 TELECOMMUNICATIONS
211 MONEY MARKET
NOTES TO FINANCIAL STATEMENTS 217 FOOTNOTES TO THE FINANCIAL STATEMENTS
STATISTICAL ROUNDUP 221
* FUND UPDATES FOR EACH SELECT PORTFOLIO INCLUDE: PERFORMANCE AND INVESTMENT SUMMARY, MANAGER'S OVERVIEW,
INVESTMENTS, AND FINANCIAL STATEMENTS.
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS
UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
PERFORMANCE OVERVIEW
DEAR SHAREHOLDER:
The six-month period ended August 31, 1995, was an excellent period for
most equity investors. The Standard & Poor's Composite Index of 500 Stocks
(S&P 500) returned 16.81% during the period, including reinvested
dividends. Overall, 21 out of 35 Select equity portfolios outperformed the
S&P 500 during the period. As one would expect with this group of
individually focused portfolios, returns among the portfolios varied
considerably. For example, Electronics generated a return of 75.05% over
the six-month period while Transportation produced a return of 7.06%. All
portfolios produced positive returns during the six-month period. For the
12 months ended August 31, 1995, the S&P 500 returned 21.45% and 14 out of
35 Select equity portfolios outperformed the index.
The backdrop for the very positive market environment over the six-month
period was a favorable interest rate environment, a somewhat slower but
steady economy and diminishing inflationary pressures. In addition, capital
spending geared toward enhancing corporate productivity remained at a very
high level. Accordingly, this environment was very favorable for companies
that produce TECHNOLOGY-related products. Electronics, Computers,
Technology, Developing Communications, and Software and Computer Services
produced impressive returns which ranged from 30.13% to 75.05%. This level
of returns, however, is unlikely to be repeated over such a brief period
and Select investors should temper and maintain moderate expectations for
the months ahead.
Despite what would normally be a positive environment for CYCLICALS - those
stocks that tend to rise and fall in step with the economy - the Select
portfolios that invest in this sector generally lagged the S&P 500.
Certainly, at this late stage of the economic upswing, the prospect of a
slower economy impacted this sector. Paper and Forest Products, Industrial
Materials, and Chemicals underperformed the S&P 500 mainly due to the
prospects for pricing pressures on key products resulting from growing
supplies for companies in these sectors. Companies in the Construction and
Housing, Automotive, and Transportation portfolios were certainly impacted
by lower levels of demand for their products. Two portfolios which bucked
the trend were Air Transportation and Industrial Equipment. Air
Transportation benefited from special factors affecting the competitive
environment for airlines in the U.S., while Industrial Equipment companies
continued to work down high profit margin backlogs of demand.
Interest rate-sensitive stocks in the FINANCIAL SERVICES sector performed
nicely over the past six months. However, the catalyst for the good
performance was not necessarily interest rates. The main driver of
performance was a continuation of merger and acquisition activity spurred
by recent regulatory changes which indirectly gave banks and financial
services companies incentives to broaden products and services over larger
geographical areas. The steady economy also kept loan growth at good levels
and credit problems relative to reserves at manageable levels. These
factors benefited Home Finance, Brokerage and Investment Management,
Regional Banks, Financial Services, and Insurance.
Companies that focus their activities in the CONSUMER products sector
continued to be challenged by cyclical and, in some cases, secular
pressures. The absence of pricing flexibility in many areas has forced many
consumer products companies to restructure operations and rationalize
distribution methods and channels. In some cases, these activities have
been best accomplished through mergers and acquisitions. These trends
seemed to be most evident at the points closest to the consumer, such as
retailing, which has suffered from an oversupply condition. Hence, it is
not surprising that Retailing, Consumer Products, and Food and Agriculture
lagged the S&P 500 over the past six months. One very positive note,
however, is that the entertainment and media sectors experienced some very
high profile merger and acquisition transactions. Again, a changing
regulatory environment spurred some of these activities. Beneficiaries were
Multimedia and Leisure.
The HEALTH CARE sector continued to face many crosscurrents leading to
divergent returns among various subsegments of the industry. Companies that
manufacture products or provide services that improve the efficiency of the
overall health care system continued to produce generous returns for
shareholders. Companies involved in the delivery and administration of
these products and services, however, have been under continued pressure to
reduce prices. Hence, it is not surprising that Biotechnology and Health
Care outperformed the S&P 500 over the six-month period and that Medical
Delivery underperformed.
Despite a rather benign inflationary environment, the NATURAL RESOURCE
area, namely companies involved with precious metals, generated solid
returns in the latest six-month period. Supply and demand factors were
starting to have a larger influence over these areas than historical
inflationary considerations. Overall, American Gold, and Precious Metals
and Minerals, generated returns of 22.40% and 17.16%, respectively.
The ENERGY sector turned in mixed results over the six-month period, while
the UTILITIES sector continued to struggle. Utility companies, namely
electric utilities, continued to face the prospect of increased competition
as regulators attempted to reduce the monopoly powers these companies have
long enjoyed in their regions of operation. Certainly, the electric utility
customer appears to be the beneficiary of these actions as opposed to the
shareholder. In the energy sector, energy producers lagged the S&P 500
return by a wide margin, reflecting steady but unspectacular business
prospects. The energy service sector, however, performed nicely as drilling
and workover activity has moved higher and the sector benefits from the
past decade of consolidation.
What follows are detailed reports for all the funds. We hope you find them
useful in evaluating your investments. As always, thank you for your
continued interest in the Fidelity Select Portfolios.
Sincerely,
Bart A. Grenier
Select Group Leader
CUMULATIVE TOTAL RETURNS*
FOR THE SIX-MONTH PERIOD ENDED AUGUST 31, 1995
Row: 1, Col: 1, Value: 75.05
Row: 2, Col: 1, Value: 55.75
Row: 3, Col: 1, Value: 47.01
Row: 4, Col: 1, Value: 31.82
Row: 5, Col: 1, Value: 30.87
Row: 6, Col: 1, Value: 30.13
Row: 7, Col: 1, Value: 28.8
Row: 8, Col: 1, Value: 27.76
Row: 9, Col: 1, Value: 27.75
Row: 10, Col: 1, Value: 24.93
Row: 11, Col: 1, Value: 24.12
Row: 12, Col: 1, Value: 23.09
Row: 13, Col: 1, Value: 22.4
Row: 14, Col: 1, Value: 21.14
Row: 15, Col: 1, Value: 21.0
Row: 16, Col: 1, Value: 20.59
Row: 17, Col: 1, Value: 20.16
Row: 18, Col: 1, Value: 19.51
Row: 19, Col: 1, Value: 19.05
Row: 20, Col: 1, Value: 17.79
Row: 21, Col: 1, Value: 17.16
Row: 22, Col: 1, Value: 16.81
Row: 23, Col: 1, Value: 15.84
Row: 24, Col: 1, Value: 15.15
Row: 25, Col: 1, Value: 14.57
Row: 26, Col: 1, Value: 13.72
Row: 27, Col: 1, Value: 12.98
Row: 28, Col: 1, Value: 12.37
Row: 29, Col: 1, Value: 12.2
Row: 30, Col: 1, Value: 11.85
Row: 31, Col: 1, Value: 11.84
Row: 32, Col: 1, Value: 11.1
Row: 33, Col: 1, Value: 10.18
Row: 34, Col: 1, Value: 10.12
Row: 35, Col: 1, Value: 10.02
Row: 36, Col: 1, Value: 7.06
Electronics 75.05%Computers 55.75%Technology 47.01%Developing
Communications 31.82%Air Transportation 30.87%Software and Computer
Services 30.13%Industrial Equipment 28.80%Home Finance 27.76%Defense and
Aerospace 27.75%Environmental Services 24.93%Multimedia
24.12%Telecommunications 23.09%American Gold 22.40%Energy Service
21.14%Leisure 21.00%Brokerage and Investment Management 20.59%Regional
Banks 20.16%Financial Services 19.51%Biotechnology 19.05%Health Care
17.79%Precious Metals and Minerals 17.16%S&P 500 16.81%Paper and Forest
Products 15.84%Industrial Materials 15.15%Insurance 14.57%Chemicals
13.72%Construction and Housing 12.98%Natural Gas 12.37%Utilities Growth
12.20%Food and Agriculture 11.85%Medical Delivery 11.84%Consumer Products
11.10%Automotive 10.18%Retailing 10.12%Energy 10.02%Transportation
7.06%
CONSUMER PRODUCTS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past one year, five years and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
CONSUMER PRODUCTS 11.10% 10.62% 110.84% 94.40%
CONSUMER PRODUCTS
(INCL. 3% SALES CHARGE) 7.77% 7.30% 104.52% 88.57%
S&P 500 16.81% 21.45% 102.17% 83.53%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 29, 1990. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
CONSUMER PRODUCTS 10.62% 16.09% 13.70%
CONSUMER PRODUCTS
(INCL. 3% SALES CHARGE) 7.30% 15.38% 13.03%
S&P 500 21.45% 15.12% 12.44%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Consumer ProducStandard & Po
06/29/90 9700.00 10000.00
06/30/90 9700.00 10012.31
07/31/90 9670.90 9980.27
08/31/90 8943.40 9078.05
09/30/90 8439.00 8635.95
10/31/90 8749.40 8598.82
11/30/90 9234.40 9154.30
12/31/90 9593.72 9409.71
01/31/91 9808.43 9819.97
02/28/91 10569.68 10522.10
03/31/91 11077.18 10776.73
04/30/91 10950.31 10802.60
05/31/91 11477.33 11269.27
06/30/91 10911.27 10753.14
07/31/91 11623.72 11254.23
08/31/91 12101.94 11520.96
09/30/91 11994.59 11328.56
10/31/91 12375.21 11480.36
11/30/91 11857.95 11017.70
12/31/91 13290.07 12278.13
01/31/92 13379.46 12049.75
02/29/92 13836.37 12206.40
03/31/92 13677.45 11968.38
04/30/92 13717.18 12320.25
05/31/92 13627.78 12380.62
06/30/92 13015.69 12196.14
07/31/92 13388.15 12694.97
08/31/92 13253.65 12434.72
09/30/92 13377.81 12581.45
10/31/92 13595.08 12625.48
11/30/92 14246.90 13056.01
12/31/92 14427.78 13216.60
01/31/93 14331.67 13327.62
02/28/93 13851.10 13508.88
03/31/93 14662.73 13793.92
04/30/93 14566.61 13460.10
05/31/93 15719.98 13820.83
06/30/93 15730.66 13860.91
07/31/93 15880.17 13805.47
08/31/93 16916.07 14328.70
09/30/93 17289.85 14218.37
10/31/93 17823.81 14512.69
11/30/93 17428.68 14374.82
12/31/93 17987.73 14548.75
01/31/94 17835.98 15043.41
02/28/94 17789.29 14635.73
03/31/94 16645.36 13997.61
04/30/94 16823.06 14176.78
05/31/94 16600.01 14409.28
06/30/94 15684.31 14056.26
07/31/94 16106.94 14517.30
08/31/94 17046.12 15112.51
09/30/94 16729.15 14742.25
10/31/94 17057.86 15073.95
11/30/94 16224.34 14524.96
12/31/94 16716.09 14740.37
01/31/95 16569.67 15122.58
02/28/95 16972.32 15711.91
03/31/95 17435.98 16175.57
04/30/95 17815.10 16651.94
05/31/95 18145.91 17317.52
06/30/95 18133.66 17719.80
07/31/95 18893.31 18307.39
08/31/95 18856.56 18353.34
Let's say you invested $10,000 in Fidelity Select Consumer Products
Portfolio on June 29, 1990, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $18,857 - a
88.57% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $18,353 over the same period - a 83.53% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Procter & Gamble Co. 6.3
Avon Products, Inc. 5.5
AirTouch Communications, Inc. 5.5
Gillette Co. 4.9
PepsiCo, Inc. 4.7
Medaphis Corp. 4.5
Federated Department Stores, Inc. 3.5
Nokia Corp. AB sponsored ADR 3.4
Ralston Purina Co. 3.4
UUNET Technologies, Inc. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 59.6
Row: 1, Col: 2, Value: 6.3
Row: 1, Col: 3, Value: 6.3
Row: 1, Col: 4, Value: 6.9
Row: 1, Col: 5, Value: 7.5
Row: 1, Col: 6, Value: 13.4
Cosmetics 13.4%
Soaps & Detergents 7.5%
Business Services
6.9%
Soft Drinks 6.3%
Cellular & Communication
Services 6.3%
All Others 59.6%*
* INCLUDES SHORT-TERM INVESTMENTS
CONSUMER PRODUCTS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Mary English,
Portfolio Manager of Fidelity Select Consumer Products Portfolio
Q. MARY, HOW HAS THE FUND PERFORMED?
A. For the six months ended August 31, 1995, the fund returned 11.10%. The
S&P 500 returned 16.81% for the same time period. For the 12 months ended
August 31, 1995, the fund returned 10.62% while the S&P 500 returned
21.45%.
Q. WHY DID THE FUND'S RETURNS LAG THE S&P?
A. Technology stocks have been a key driver behind the S&P Index for the
past six months. In consumer stocks, the problems that have plagued this
group in the past - such as too many brands chasing too little shelf space
- - continue. While it's true that the fund lagged the S&P, it still
performed well given its limited exposure to technology. At the end of the
period, the fund did have some exposure to technology, but it was
established late in the technology cycle.
Q. WHAT TECHNOLOGY STOCKS HAVE YOU ADDED TO THE FUND, AND WHY?
A. During the past six months, I added to what I call "consumerology"
stocks. That is, technology stocks that appeal directly to the consumer
such as cellular phone manufacturers, on-line services providers and
Internet companies. Also, during the past six months the fund has benefited
from its holdings in stocks such as AirTouch Communications, Nokia and
America Online that compete in these areas.
Q. HOW HAVE RECENT ECONOMIC FACTORS IMPACTED THE FUND?
A. The current slow-growth environment is not especially favorable to
traditional consumer stocks such as retailers. Slow growth generally means
that consumers are concerned about the economy worsening and are keeping
their wallets closed. At the same time, because inflation is so low,
companies are unable to raise prices or pass on rising raw materials costs
to the consumer. Wages haven't increased and the consumer marketplace
continues to be very competitive.
Q. WHAT STOCKS DID YOU LIKE AT THE END OF AUGUST?
A. Procter & Gamble, Avon and Gillette. All three are large, successful
multi-national corporations that I think are being unjustly penalized for
world-wide currency swings. They are multi-national plays on the continued
consumer global recovery, and I think they're likely to do well in a
continued slow-growth economy.
Q. WHAT ABOUT RETAILING . . .
A. Retailing performance has been dismal, but I've initiated a couple of
positions in selected stocks where I see a potential for superior
performance. When I look at retailers, I look for clean inventories, and
companies that are in position to acquire other retailers. I don't think
there's a lot of natural growth potential for retailers and I prefer that
they don't open an excess number of new stores - I think it gets them into
trouble. Federated Department Stores is new to the fund. Even though
overall retail sales have been weak, I think Federated can benefit if
retail begins to recover.
Q. WHAT INVESTMENTS HAVE BEEN DISAPPOINTING DURING THE PAST SIX MONTHS?
A. A couple of the fund's investments haven't performed as well as I would
have liked. I sold the fund's holding in Franklin Quest because of sluggish
sales at retail for their time management products and time management
seminars. The fund also suffered from its investment in IBM, which traded
down in August.
Q. WHAT'S AHEAD FOR THE FUND?
A. I think the fund is rather well-positioned now. I plan to continue to
rotate it as necessary to take advantage of what the economy is doing. The
fund's mix of consumer durable and non-durable stocks - with a smattering
of "consumerology" stocks - will probably continue throughout the next six
months; but I am considering increasing the defensive posture of the fund
to include more consumer staples such as food, beverages and tobacco. In
this type of investing environment, the best approach is investing on a
stock-by-stock basis.
FUND FACTS
START DATE: June 29, 1990
TRADING SYMBOL: FSCPX
SIZE: as of August 31, 1995, more than
$7 million
MANAGER: Mary English, since February 1994;
manager, Fidelity Select Retailing Portfolio,
1993-1994; equity analyst, specialty retail and
advertising industries, 1991-1993; joined
Fidelity in 1991
(checkmark)
CONSUMER PRODUCTS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.9%
SHARES VALUE (NOTE 1)
AIR TRANSPORTATION - 2.0%
AIR TRANSPORT, MAJOR NATIONAL - 2.0%
UAL Corp. (a) 1,000 $ 157,500
AUTOS, TIRES, & ACCESSORIES - 1.7%
MOTOR VEHICLES & CAR BODIES - 1.7%
Chrysler Corp. 700 37,713
General Motors Corp. 2,000 94,000
131,713
BEVERAGES - 6.3%
SOFT DRINKS - 6.3%
Coca-Cola Company (The) 2,000 128,500
PepsiCo, Inc. 8,000 362,000
490,500
BROADCASTING - 2.9%
CABLE TV OPERATORS - 2.9%
Viacom, Inc. Class A (a) 4,600 223,675
CELLULAR - 6.3%
CELLULAR & COMMUNICATION SERVICES - 6.3%
AirTouch Communications, Inc. (a) 13,000 422,500
Vodafone Group PLC
sponsored ADR 1,500 62,813
485,313
COMMUNICATIONS EQUIPMENT - 5.4%
TELEPHONE EQUIPMENT - 5.4%
DSC Communications Corp. (a) 3,000 157,500
Nokia Corp. AB sponsored ADR 3,800 263,625
421,125
COMPUTER SERVICES & SOFTWARE - 8.5%
COMPUTER RELATED SERVICES - 0.2%
Desktop Data, Inc. (a) 500 14,188
COMPUTER SERVICES - 5.4%
America Online, Inc. (a) 2,000 131,750
Performance Systems
International, Inc. (a) 2,000 37,000
UUNET Technologies, Inc. (a) 5,500 249,563
418,313
PREPACKAGED COMPUTER SOFTWARE - 2.9%
Netscape Communications Corp. (a) 400 19,800
Spyglass, Inc. (a) 4,800 204,600
224,400
TOTAL COMPUTER SERVICES & SOFTWARE 656,901
COMPUTERS & OFFICE EQUIPMENT - 3.6%
ELECTRONIC COMPUTERS - 1.7%
International Business Machines Corp. 1,300 134,388
MINI & MICRO COMPUTERS - 1.9%
Compaq Computer Corp. (a) 3,000 143,250
TOTAL COMPUTERS & OFFICE EQUIPMENT 277,638
CONSUMER ELECTRONICS - 1.0%
APPLIANCES - 1.0%
Black & Decker Corp. 2,500 80,938
DRUGS & PHARMACEUTICALS - 1.5%
DRUGS - 1.2%
Schering-Plough Corp. 2,000 93,250
SHARES VALUE (NOTE 1)
PHARMACEUTICAL PREPARATIONS - 0.3%
Nature's Sunshine Products, Inc. 800 $ 18,800
Rexall Sundown, Inc. 400 6,250
25,050
TOTAL DRUGS & PHARMACEUTICALS 118,300
ELECTRICAL EQUIPMENT - 2.9%
ALARMS & SIGNAL DEVICES - 1.4%
Pittway Corp. Class A 2,000 107,000
ELECTRICAL MACHINERY - 1.5%
General Electric Co. 2,000 117,750
TOTAL ELECTRICAL EQUIPMENT 224,750
ELECTRONICS - 2.4%
SEMICONDUCTORS - 2.4%
Motorola, Inc. 2,500 186,875
ENTERTAINMENT - 2.0%
AMUSEMENT - 2.0%
Scientific Games Holdings Corp. 4,000 152,000
FOODS - 5.1%
FOOD - 1.7%
Kellogg Co. 2,000 135,000
GRAIN MILL PRODUCTS - 3.4%
Ralston Purina Co. 5,000 260,000
TOTAL FOODS 395,000
GENERAL MERCHANDISE STORES - 4.2%
DEPARTMENT STORES - 3.5%
Federated Department Stores, Inc. 10,000 270,000
VARIETY STORES - 0.7%
Consolidated Stores Corp. (a) 2,500 55,000
TOTAL GENERAL MERCHANDISE STORES 325,000
HOUSEHOLD PRODUCTS - 21.1%
COSMETICS - 13.4%
Alberto-Culver Co. Class A 2,300 57,788
Avon Products, Inc. 6,000 423,750
Gillette Co. 9,000 375,750
Tambrands, Inc. 4,000 179,500
1,036,788
MANUFACTURED PRODUCTS - 0.2%
Helen of Troy Corp. (a) 900 18,675
SOAPS & DETERGENTS - 7.5%
Procter & Gamble Co. 7,000 485,625
Rubbermaid, Inc. 3,000 89,250
574,875
TOTAL HOUSEHOLD PRODUCTS 1,630,338
LODGING & GAMING - 2.4%
HOTELS, MOTELS, & TOURIST COURTS - 2.4%
Harrah's Entertainment, Inc. 3,000 95,625
Host Marriott Corp. (a) 8,000 92,000
187,625
PAPER & FOREST PRODUCTS - 1.7%
PAPER - 1.7%
Kimberly-Clark Corp. 2,000 127,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PHOTOGRAPHIC EQUIPMENT - 0.8%
Eastman Kodak Co. 1,000 $ 57,625
RESTAURANTS - 0.2%
McDonald's Corp. 500 18,250
RETAIL & WHOLESALE, MISCELLANEOUS - 1.2%
DURABLE GOODS - WHOLESALE - 1.2%
Sodak Gaming, Inc. 5,000 90,000
SERVICES - 12.1%
BUSINESS SERVICES - 6.9%
Medaphis Corp. (a) 15,000 346,875
NETCOM On-Line Communication
Services, Inc. (a) 5,000 186,872
533,747
COMMUNICATION, ECONOMY,
SOCIAL & EDUCATION RESEARCH - 1.8%
Gartner Group, Inc. Class A (a) 5,000 141,875
PERSONNEL SUPPLY SERVICES - 1.5%
Manpower, Inc. 2,000 57,500
Norrell Corp. GA 2,000 53,000
Romac International, Inc. 500 8,125
118,625
SECURITY SYSTEMS - 1.9%
ADT Ltd. (a) 11,000 143,000
TOTAL SERVICES 937,247
TEXTILES & APPAREL - 0.6%
FOOTWEAR - 0.6%
Nine West Group, Inc. (a) 1,000 42,625
TOTAL COMMON STOCKS
(Cost $6,561,803) 7,418,688
REPURCHASE AGREEMENTS - 4.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 314,051 314,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $6,875,803) $ 7,732,688
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $9,991,263 and $24,939,628, respectively (see Note 4 of Notes to
Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $11,120 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $2,642,000 and $1,695,200,
respectively. The weighted average interest rate paid was 6.3% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $6,877,574. Net unrealized appreciation aggregated
$855,114, of which $902,000 related to appreciated investment securities
and $46,886 related to depreciated investment securities.
CONSUMER PRODUCTS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $314,000) (cost $6,875,803) - See $ 7,732,688
accompanying schedule
Cash 742
Receivable for investments sold 1,419
Receivable for fund shares sold 12,170
Dividends receivable 11,624
Redemption fees receivable 45
Other receivables 1,311
Prepaid expenses 8,071
TOTAL ASSETS 7,768,070
LIABILITIES
Payable for investments purchased $ 5,263
Payable for fund shares redeemed 154,010
Accrued management fee 5,096
Other payables and accrued expenses 20,230
TOTAL LIABILITIES 184,599
NET ASSETS $ 7,583,471
Net Assets consist of:
Paid in capital $ 5,022,268
Undistributed net investment income 14,203
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 1,690,115
Net unrealized appreciation (depreciation) on investments 856,885
NET ASSETS, for 492,751 shares outstanding $ 7,583,471
NET ASSET VALUE and redemption price per share ($7,583,471 (divided by) 492,751 shares) $15.39
Maximum offering price per share (100/97.00 of $15.39) $15.87
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 137,182
Dividends
Interest 41,216
TOTAL INCOME 178,398
EXPENSES
Management fee $ 61,646
Transfer agent 58,759
Fees
Redemption fees (6,997
)
Accounting fees and expenses 22,665
Non-interested trustees' compensation 49
Custodian fees and expenses 10,125
Registration fees 8,071
Audit 8,191
Legal 117
Interest 1,472
Miscellaneous 243
Total expenses before reductions 164,341
Expense reductions (146 164,195
)
NET INVESTMENT INCOME 14,203
REALIZED AND UNREALIZED GAIN (LOSS) 1,709,710
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities 561,597
NET GAIN (LOSS) 2,271,307
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,285,510
OTHER INFORMATION $126,536
Sales Charges Paid to FDC
Deferred sales charges withheld $460
by FDC
Exchange fees withheld by FSC $4,883
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 14,203 $ (85,126
Net investment income (loss) )
Net realized gain (loss) 1,709,710 323,207
Change in net unrealized appreciation (depreciation) 561,597 (648,664
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,285,510 (410,583
)
Distributions to shareholders (77,616 (290,362
From net realized gains ) )
In excess of net realized gains (11,291 -
)
TOTAL DISTRIBUTIONS (88,907 (290,362
) )
Share transactions 8,029,439 18,706,244
Net proceeds from sales of shares
Reinvestment of distributions 88,457 284,767
Cost of shares redeemed (23,238,093 (6,171,937
) )
Paid in capital portion of redemption fees 5,759 9,205
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (15,114,438 12,828,279
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (12,917,835 12,127,334
)
NET ASSETS
Beginning of period 20,501,306 8,373,972
End of period (including undistributed net investment income of $14,203 and $0, respectively) $ 7,583,471 $ 20,501,306
OTHER INFORMATION
Shares
Sold 547,860 1,341,627
Issued in reinvestment of distributions 6,156 21,383
Redeemed (1,535,351 (438,536
) )
Net increase (decrease) (981,335 924,474
)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEAR ENDED JUNE 29, 1990
ENDED FEBRUARY 28, ENDED APRIL 30, (COMMENCEMENT
AUGUST 31, 1995 FEBRUARY 28, OF
OPERATIONS) TO
APRIL 30,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.91 $ 15.24 $ 12.97 $ 13.81 $ 11.22 $ 10.00
Income from Investment Operations
Net investment income (loss) .01 (.15) (.20) (.09) (.07) .05 E
Net realized and unrealized gain (loss) 1.53 (.60) 3.84 .20 2.86 1.18
Total from investment operations 1.54 (.75) 3.64 .11 2.79 1.23
Less Distributions - - - - - (.06)
From net investment income
From net realized gain (.05) (.60) (1.40) (.97) (.22) -
In excess of net realized gain (.01) - - - - -
Total distributions (.06) (.60) (1.40) (.97) (.22) (.06)
Redemption fees added to paid in capital - .02 .03 .02 .02 .05
Net asset value, end of period $ 15.39 $ 13.91 $ 15.24 $ 12.97 $ 13.81 $ 11.22
TOTAL RETURN B, C 11.10% (4.59)% 28.43% .98% 25.27% 12.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 7,583 $ 20,501 $ 8,374 $ 7,005 $ 7,553 $ 1,877
Ratio of expenses to average net assets 1.63% A 2.49% 2.48% 2.47% A 2.48% 2.43% A
Ratio of expenses to average net assets before 1.63% A 2.82% 2.62% 3.17% A 2.83% 3.11% A
expense reductions
Ratio of net investment income (loss) to average .14% A (1.08)% (1.34)% (.80)% (.56)% .62% A
net assets A
Portfolio turnover rate 108% A 190% 169% 215% A 140% 108% A
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN
(SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. D NET INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E INVESTMENT INCOME PER
SHARE REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.02 PER SHARE.
</TABLE>
FOOD AND AGRICULTURE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
FOOD AND AGRICULTURE 11.85% 18.84% 109.19% 472.31%
FOOD AND AGRICULTURE
(INCL. 3% SALES CHARGE) 8.50% 15.28% 102.91% 455.14%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
FOOD AND AGRICULTURE 18.84% 15.91% 19.06%
FOOD AND AGRICULTURE
(INCL. 3% SALES CHARGE) 15.28% 15.20% 18.70%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select Food & AStandard & Po
08/31/85 9700.00 10000.00
09/30/85 9514.77 9687.00
10/31/85 10245.93 10134.54
11/30/85 10918.59 10829.77
12/31/85 11220.80 11353.93
01/31/86 11172.06 11417.51
02/28/86 12390.65 12271.54
03/31/86 13209.55 12956.29
04/30/86 13696.98 12809.89
05/31/86 14223.42 13491.37
06/30/86 15022.81 13719.38
07/31/86 14174.67 12952.46
08/31/86 14857.09 13913.54
09/30/86 13657.99 12762.89
10/31/86 13960.20 13499.31
11/30/86 14125.93 13827.34
12/31/86 13745.73 13474.74
01/31/87 15422.51 15289.79
02/28/87 16621.61 15893.74
03/31/87 17128.54 16353.07
04/30/87 17070.05 16207.52
05/31/87 16962.81 16348.53
06/30/87 17947.44 17174.13
07/31/87 18600.60 18044.86
08/31/87 19253.77 18717.93
09/30/87 19058.79 18308.01
10/31/87 14759.60 14364.46
11/30/87 14106.43 13180.83
12/31/87 14778.42 14183.89
01/31/88 15356.57 14781.03
02/29/88 16117.30 15469.83
03/31/88 16228.87 14991.81
04/30/88 16279.59 15158.22
05/31/88 16401.30 15290.10
06/30/88 17070.74 15991.91
07/31/88 17192.46 15931.15
08/31/88 17182.32 15389.49
09/30/88 17872.04 16045.08
10/31/88 18703.77 16491.13
11/30/88 18267.62 16255.31
12/31/88 18735.24 16539.78
01/31/89 19701.50 17750.49
02/28/89 19345.51 17308.50
03/31/89 20077.83 17711.79
04/30/89 21115.29 18631.03
05/31/89 22417.20 19385.59
06/30/89 22857.67 19275.09
07/31/89 25038.07 21015.63
08/31/89 24652.06 21427.54
09/30/89 24756.39 21339.68
10/31/89 24506.01 20844.60
11/30/89 25434.50 21269.83
12/31/89 26017.15 21780.31
01/31/90 24207.46 20318.85
02/28/90 24553.76 20580.96
03/31/90 25615.00 21126.36
04/30/90 25514.46 20598.20
05/31/90 27737.48 22606.52
06/30/90 28637.23 22452.80
07/31/90 28625.95 22380.95
08/31/90 26537.70 20357.71
09/30/90 25691.11 19366.29
10/31/90 26300.65 19283.02
11/30/90 27384.28 20528.70
12/31/90 28443.78 21101.45
01/31/91 29260.13 22021.47
02/28/91 31464.26 23596.01
03/31/91 33003.65 24167.03
04/30/91 32502.18 24225.03
05/31/91 33691.71 25271.56
06/30/91 32303.58 24114.12
07/31/91 33655.50 25237.84
08/31/91 34995.55 25835.97
09/30/91 34378.89 25404.51
10/31/91 34390.75 25744.93
11/30/91 34153.57 24707.41
12/31/91 38140.18 27533.94
01/31/92 37571.66 27021.81
02/29/92 37361.55 27373.09
03/31/92 36533.49 26839.32
04/30/92 36113.29 27628.39
05/31/92 36434.62 27763.77
06/30/92 36036.26 27350.09
07/31/92 37428.16 28468.71
08/31/92 37262.15 27885.10
09/30/92 37887.87 28214.15
10/31/92 38296.50 28312.90
11/30/92 39765.03 29278.37
12/31/92 40438.49 29638.49
01/31/93 40451.56 29887.45
02/28/93 40346.97 30293.92
03/31/93 41445.20 30933.12
04/30/93 39835.96 30184.54
05/31/93 41090.21 30993.49
06/30/93 40681.21 31083.37
07/31/93 40176.79 30959.04
08/31/93 42099.06 32132.38
09/30/93 41962.73 31884.96
10/31/93 43544.17 32544.98
11/30/93 43039.74 32235.80
12/31/93 44004.13 32625.86
01/31/94 45334.98 33735.14
02/28/94 45063.09 32820.92
03/31/94 42959.48 31389.92
04/30/94 42479.47 31791.71
05/31/94 42170.79 32313.10
06/30/94 42494.17 31521.43
07/31/94 43919.95 32555.33
08/31/94 46712.72 33890.10
09/30/94 46800.91 33059.79
10/31/94 47682.83 33803.64
11/30/94 46521.63 32572.51
12/31/94 46685.73 33055.56
01/31/95 48653.85 33912.69
02/28/95 49630.28 35234.27
03/31/95 50759.28 36274.03
04/30/95 51868.70 37342.30
05/31/95 53730.02 38834.87
06/30/95 55001.92 39737.01
07/31/95 55606.85 41054.68
08/31/95 55513.78 41157.73
Let's say you invested $10,000 in Fidelity Select Food and Agriculture
Portfolio on August 31, 1985, and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $55,514 - a 455.14% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
RalCorp Holdings, Inc. 10.9
Ralston Purina Co. 8.9
Philip Morris Companies, Inc. 8.7
Pioneer Hi-Bred International, Inc. 7.8
PepsiCo, Inc. 6.4
RJR Nabisco Holdings Corp. 6.4
Kellogg Co. 6.0
GoodMark Foods, Inc. 4.9
DEKALB Genetics Corp. Class B 4.6
General Mills, Inc. 3.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
Crops 12.6%
Food 12.0%
Cereal Breakfast Foods 10.9%
Soft Drinks 9.5%
Grain Mill Products 8.9%
All Others 46.1%*
Row: 1, Col: 1, Value: 46.1
Row: 1, Col: 2, Value: 8.9
Row: 1, Col: 3, Value: 9.5
Row: 1, Col: 4, Value: 10.9
Row: 1, Col: 5, Value: 12.0
Row: 1, Col: 6, Value: 12.6
* INCLUDES SHORT-TERM INVESTMENTS
FOOD AND AGRICULTURE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
William Mankivsky,
Portfolio Manager of Fidelity Select Food and Agriculture Portfolio
Q. BILL, HOW HAS THE FUND PERFORMED?
A. For the six months ended August 31, 1995, the fund had a total return of
11.85%. The Standard & Poor's Composite Index of 500 Stocks returned 16.81%
for the same period. For the 12 months ended August 31, 1995, the fund
returned 18.84%, while the S&P 500 returned 21.45%.
Q. HOW DO YOU FEEL ABOUT THE FUND'S PERFORMANCE?
A. Given the return of this sector, I'm pleased with it. The stocks in the
fund are those of companies that generally have provided consistent
earnings growth regardless of the economic backdrop, usually in the high
single digits to low teens. So you can see that the fund's return is in
line with that kind of expectation. The S&P 500 has provided extraordinary
returns - well above its historical annual average of around 12% - driven
by exceptional performance in technology, finance and capital goods stocks.
It's hard to say whether those stocks can sustain that kind of pace.
Q. WHAT ARE SOME OF THE INVESTMENTS THAT HAVE HELPED THE FUND'S
PERFORMANCE?
A. Philip Morris, the fund's third largest investment at the end of August,
has shown good earnings growth despite concerns about litigation. It has
divested itself of underperforming food businesses. It's repurchasing about
$2 billion worth of stock - which is beneficial to shareholders because it
shows the company believes its stock is undervalued - and is continuing its
history of significantly increasing dividends . Kellogg has benefited from
strong growth in its convenience foods and international sales. It's buying
back more than $300 million in stock, and looks like it will buy back $400
million to $500 million more next year. The fund also has benefited from
two companies that specialize in corn seed, DEKALB Genetics and Pioneer
Hi-Bred. A mediocre corn crop this year should increase demand for
high-performance seed in 1996. At the end of the year, we'll probably see
record-low corn inventories, which should lead to increased planting.
Pioneer has virtually no debt and is buying back shares. DEKALB has ironed
out some operating problems and has new high-performance hybrids that
should hit the market in the next year or two.
Q. WHAT STOCKS HAVE TURNED IN DISAPPOINTING PERFORMANCES?
A. General Mills is one. It had some problems with pesticide-laced oats
last year and has seen a substantial short-term drop in the volume of its
cereal sales. I continue to hold the stock because it's relatively cheap
and the company is poised to take advantage if the cereal business
recovers. If it doesn't succeed, I would suspect it would be a prime
candidate for acquisition. RalCorp - which has been a good contributor to
performance since it was spun off from Ralston Purina in 1994 - suffered
from a poor winter at the ski areas the company owns in Colorado. There has
been talk the company may sell the ski areas - which should help the stock
- - but RalCorp may hold on to them to get a better price in a few years.
Q. A PRICE-FIXING SCANDAL AT ARCHER-DANIELS-MIDLAND - AN AGRICULTURAL
PRODUCTS COMPANY IN WHICH THE FUND ONCE HELD A POSITION - HAS BEEN IN THE
NEWS. WHAT ARE THE RAMIFICATIONS FOR THE SECTOR OR THE FUND THERE?
A. I believe it's relevant to the extent that there has been some
investigation into the U.S. corn processing industry. However, the
questions and problems in the news revolve exclusively around ADM itself,
and shouldn't have much of an effect on the sector or the fund.
Q. WHAT'S YOUR OUTLOOK?
A. I wouldn't be surprised if the market slows from the torrid pace it has
set so far in 1995. In today's market, those companies that benefit from
strong economic growth are showing the best earnings growth. With most of
the stocks in the fund, I feel that time is on my side. They tend to show
consistent returns in varied economic environments. If the market corrects,
the stocks in the fund could do better, relative to the market, because
they are seen as safe havens, providing consistent earnings growth no
matter what the economy is doing.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FDFAX
SIZE: as of August 31, 1995, more than
$116 million
MANAGER: William Mankivsky, since 1993;
manager, Fidelity Select Energy Service
Portfolio, 1991-1994; joined Fidelity in 1991
(checkmark)
FOOD AND AGRICULTURE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.8%
SHARES VALUE (NOTE 1)
AGRICULTURE - 12.6%
CROPS - 12.6%
DEKALB Genetics Corp. Class B 127,100 $ 5,068,109
Pioneer Hi-Bred International, Inc. 201,400 8,660,200
Sylvan Foods Holdings, Inc. (a) 14,900 165,763
13,894,072
BEVERAGES - 12.2%
MALT BEVERAGE - 2.7%
Anheuser-Busch Companies, Inc. 42,000 2,399,250
Fomento Economico Mexicano SA
de CV Class B 36,000 99,489
Quilmes Industries SA 28,000 546,000
3,044,739
SOFT DRINKS - 9.5%
Celestial Seasonings, Inc. (a) 95,400 1,741,050
Coca-Cola Company (The) 4,000 257,000
Panamerican Beverages, Inc. Class A 28,700 853,825
PepsiCo, Inc. 157,400 7,122,350
Serm Suk Co. Ltd. 38,800 511,342
10,485,567
TOTAL BEVERAGES 13,530,306
CONGLOMERATES - 2.3%
Whitman Corp. 127,800 2,571,975
FOODS - 47.1%
BAKERY PRODUCTS - 0.4%
Interstate Bakeries Corp. 21,400 417,300
CANNED SPECIALTIES - 0.2%
Campbell Soup Co. 4,000 183,000
CEREAL BREAKFAST FOODS - 10.9%
RalCorp Holdings, Inc. (a) 531,666 12,028,943
COOKIES & CRACKERS - 2.2%
Nabisco Holdings Class A 85,300 2,441,713
DAIRY - 1.1%
Dean Foods Co. 46,600 1,234,900
FOOD - 12.0%
Chiquita Brands International, Inc. 34,000 535,500
Dole Food, Inc. 32,100 1,051,275
General Mills, Inc. 71,500 3,691,188
Kellogg Co. 98,600 6,655,500
Nestle SA (Reg.) 1,280 1,297,549
13,231,012
GENERAL FOOD PREPARATIONS - 2.2%
CPC International, Inc. 36,200 2,276,075
Herdez SA de CV Class B (a) 438,846 143,713
2,419,788
GRAIN MILL PRODUCTS - 8.9%
Ralston Purina Co. 188,900 9,822,800
MEAT & FISH - 8.2%
GoodMark Foods, Inc. 313,400 5,406,150
Hormel (George A) & Co. 62,500 1,500,000
Tyson Foods, Inc. 83,700 2,155,275
9,061,425
SUGAR & CANDIES - 1.0%
Grist Mill Co. (a) 4,000 41,500
Tootsie Roll Industries, Inc. 27,472 1,095,446
1,136,946
TOTAL FOODS 51,977,827
SHARES VALUE (NOTE 1)
GROCERY STORES - 1.2%
GROCERY - RETAIL - 1.2%
Giant Food, Inc. Class A 43,600 $ 1,357,050
HOUSEHOLD PRODUCTS - 0.2%
COSMETICS - 0.2%
Gillette Co. 4,000 167,000
INDUSTRIAL MACHINERY & EQUIPMENT - 0.8%
FARM MACHINERY & EQUIPMENT - 0.8%
Case Corp. 24,200 913,550
Deere & Co. 200 17,100
930,650
RESTAURANTS - 2.3%
Darden Restaurants, Inc. (a) 237,600 2,435,400
McDonald's Corp. 4,000 146,000
2,581,400
TOBACCO - 15.1%
CIGARETTES - 6.4%
RJR Nabisco Holdings Corp. 248,020 7,068,570
TOBACCO MANUFACTURERS - 8.7%
Philip Morris Companies, Inc. 129,400 9,656,475
TOTAL TOBACCO 16,725,045
TOTAL COMMON STOCKS
(Cost $90,949,546) 103,735,325
REPURCHASE AGREEMENTS - 6.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $6,912,117 6,911,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $97,860,546) $ 110,646,325
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $72,062,449 and $169,686,213, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $99,038 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the period for
which the loan was outstanding amounted to $2,871,000. The weighted average
interest rate paid was 6.1% (see Note 6 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $97,936,835. Net unrealized appreciation aggregated
$12,709,490, of which $14,103,870 related to appreciated investment
securities and $1,394,380 related to depreciated investment securities.
FOOD AND AGRICULTURE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $6,911,000)
(cost $97,860,546) - See $ 110,646,325
accompanying schedule
Cash 301
Receivable for investments sold 13,090,726
Receivable for fund shares sold 264,836
Dividends receivable 310,090
Redemption fees receivable 579
Prepaid expenses 17,524
TOTAL ASSETS 124,330,381
LIABILITIES
Payable for investments purchased $ 1,470,462
Payable for fund shares redeemed 5,985,669
Accrued management fee 94,330
Other payables and accrued expenses 125,070
TOTAL LIABILITIES 7,675,531
NET ASSETS $ 116,654,850
Net Assets consist of:
Paid in capital $ 84,320,675
Undistributed net investment income 1,223,166
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 18,326,303
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 12,784,706
NET ASSETS, for 3,259,564 shares outstanding $ 116,654,850
NET ASSET VALUE and redemption price per share ($116,654,850 (divided by) 3,259,564 shares) $35.79
Maximum offering price per share (100/97.00 of $35.79) $36.90
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,053,081
Dividends
Interest 554,665
TOTAL INCOME 2,607,746
EXPENSES
Management fee $ 634,693
Transfer agent 676,183
Fees
Redemption fees (81,114
)
Accounting fees and expenses 103,505
Non-interested trustees' compensation 523
Custodian fees and expenses 6,747
Registration fees 17,524
Audit 10,608
Legal 359
Interest 488
Miscellaneous 937
Total expenses before reductions 1,370,453
Expense reductions (3,463 1,366,990
)
NET INVESTMENT INCOME 1,240,756
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 18,538,465
Foreign currency transactions (661 18,537,804
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 2,920,955
Assets and liabilities in foreign currencies (1,107 2,919,848
)
NET GAIN (LOSS) 21,457,652
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 22,698,408
OTHER INFORMATION $503,868
Sales Charges Paid to FDC
Deferred sales charges withheld $1,427
by FDC
Exchange fees withheld by FSC $67,208
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 1,240,756 $ 456,946
Net investment income
Net realized gain (loss) 18,537,804 7,641,023
Change in net unrealized appreciation (depreciation) 2,919,848 1,271,971
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 22,698,408 9,369,940
Distributions to shareholders (181,541 (213,103
From net investment income ) )
From net realized gain (3,146,388 (5,012,131
) )
TOTAL DISTRIBUTIONS (3,327,929 (5,225,234
) )
Share transactions 72,108,016 177,269,912
Net proceeds from sales of shares
Reinvestment of distributions 3,259,492 5,111,970
Cost of shares redeemed (175,258,770 (84,479,607
) )
Paid in capital portion of redemption fees 45,643 72,669
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (99,845,619 97,974,944
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (80,475,140 102,119,650
)
NET ASSETS
Beginning of period 197,129,990 95,010,340
End of period (including undistributed net investment income of $1,223,166 and $245,442,
respectively) $ 116,654,850 $ 197,129,990
OTHER INFORMATION
Shares
Sold 2,110,734 5,597,630
Issued in reinvestment of distributions 98,743 172,511
Redeemed (5,009,096 (2,728,534
) )
Net increase (decrease) (2,799,619 3,041,607
)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 32.53 $ 31.49 $ 30.86 $ 29.22 $ 27.87 $ 22.84
Income from Investment Operations
Net investment income .21 .15 .09 .05 .13 .21
Net realized and unrealized gain (loss) 3.59 2.80 3.29 3.26 2.89 5.78
Total from investment operations 3.80 2.95 3.38 3.31 3.02 5.99
Less Distributions (.03) (.08) (.06) (.10) (.11) (.27)
From net investment income
From net realized gain (.52) (1.85) (2.70) (1.57) (1.59) (.79)
Total distributions (.55) (1.93) (2.76) (1.67) (1.70) (1.06)
Redemption fees added to paid in capital .01 .02 .01 - .03 .10
Net asset value, end of period $ 35.79 $ 32.53 $ 31.49 $ 30.86 $ 29.22 $ 27.87
TOTAL RETURN B, C 11.85% 10.14% 11.69% 11.72% 11.11% 27.39%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 116,655 $ 197,130 $ 95,010 $ 108,377 $ 108,922 $ 64,490
Ratio of expenses to average net assets 1.31% A 1.68% 1.64% 1.67% A 1.83% 2.22%
Ratio of expenses to average net assets before 1.31% A 1.70% 1.65% 1.67% A 1.83% 2.22%
expense reductions
Ratio of net investment income to average net assets 1.19% A .49% .29% .21% A .46% .85%
Portfolio turnover rate 80% A 126% 96% 515% A 63% 124
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
LEISURE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTHS YEAR YEARS YEARS
LEISURE 21.00% 24.23% 160.63% 354.52%
LEISURE
(INCL. 3% SALES CHARGE) 17.37% 20.51% 152.81% 340.89%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
LEISURE 24.23% 21.12% 16.35%
LEISURE
(INCL. 3% SALES CHARGE) 20.51% 20.38% 15.99%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select LeisureStandard & Poor'
08/31/85 9700.00 10000.00
09/30/85 9034.19 9687.00
10/31/85 9516.75 10134.54
11/30/85 10316.94 10829.77
12/31/85 10848.36 11353.93
01/31/86 11220.97 11417.51
02/28/86 12387.66 12271.54
03/31/86 13364.99 12956.29
04/30/86 13768.14 12809.89
05/31/86 14666.06 13491.37
06/30/86 15008.12 13719.38
07/31/86 13571.64 12952.46
08/31/86 14018.52 13913.54
09/30/86 12653.40 12762.89
10/31/86 13302.29 13499.31
11/30/86 13137.01 13827.34
12/31/86 12555.45 13474.74
01/31/87 13877.73 15289.79
02/28/87 15371.40 15893.74
03/31/87 15555.05 16353.07
04/30/87 15200.00 16207.52
05/31/87 15824.40 16348.53
06/30/87 16503.90 17174.13
07/31/87 17722.11 18044.86
08/31/87 18089.40 18717.93
09/30/87 17697.62 18308.01
10/31/87 12647.28 14364.46
11/30/87 11765.77 13180.83
12/31/87 13270.65 14183.89
01/31/88 13474.92 14781.03
02/29/88 14652.87 15469.83
03/31/88 15143.12 14991.81
04/30/88 15238.44 15158.22
05/31/88 14843.52 15290.10
06/30/88 15834.93 15991.91
07/31/88 15966.60 15931.15
08/31/88 15342.91 15389.49
09/30/88 16410.12 16045.08
10/31/88 16410.12 16491.13
11/30/88 15779.49 16255.31
12/31/88 16721.97 16539.78
01/31/89 18149.54 17750.49
02/28/89 17858.48 17308.50
03/31/89 18697.00 17711.79
04/30/89 19757.28 18631.03
05/31/89 20741.34 19385.59
06/30/89 20938.01 19275.09
07/31/89 22695.10 21015.63
08/31/89 22877.11 21427.54
09/30/89 23024.11 21339.68
10/31/89 21365.03 20844.60
11/30/89 21617.04 21269.83
12/31/89 21940.53 21780.31
01/31/90 19279.72 20318.85
02/28/90 19108.77 20580.96
03/31/90 19257.42 21126.36
04/30/90 18506.75 20598.20
05/31/90 20037.83 22606.52
06/30/90 19807.42 22452.80
07/31/90 19123.64 22380.95
08/31/90 16916.21 20357.71
09/30/90 15310.80 19366.29
10/31/90 15132.42 19283.02
11/30/90 16336.48 20528.70
12/31/90 17050.97 21101.45
01/31/91 18004.51 22021.47
02/28/91 19386.00 23596.01
03/31/91 19708.85 24167.03
04/30/91 19761.41 24225.03
05/31/91 20444.65 25271.56
06/30/91 19295.91 24114.12
07/31/91 20219.41 25237.84
08/31/91 20429.64 25835.97
09/30/91 20955.20 25404.51
10/31/91 21585.89 25744.93
11/30/91 20549.77 24707.41
12/31/91 22667.06 27533.94
01/31/92 23177.61 27021.81
02/29/92 23988.49 27373.09
03/31/92 23500.46 26839.32
04/30/92 23763.25 27628.39
05/31/92 23905.90 27763.77
06/30/92 23538.00 27350.09
07/31/92 23650.62 28468.71
08/31/92 23312.76 27885.10
09/30/92 23770.76 28214.15
10/31/92 23950.95 28312.90
11/30/92 25580.22 29278.37
12/31/92 26346.05 29638.49
01/31/93 26999.25 29887.45
02/28/93 26856.60 30293.92
03/31/93 28253.11 30933.12
04/30/93 27616.39 30184.54
05/31/93 29600.15 30993.49
06/30/93 30396.77 31083.37
07/31/93 31209.02 30959.04
08/31/93 33356.79 32132.38
09/30/93 35020.33 31884.96
10/31/93 36957.23 32544.98
11/30/93 35582.66 32235.80
12/31/93 36766.87 32625.86
01/31/94 37149.02 33735.14
02/28/94 36831.92 32820.92
03/31/94 34604.12 31389.92
04/30/94 34673.88 31791.71
05/31/94 34306.91 32313.10
06/30/94 32856.95 31521.43
07/31/94 34127.91 32555.33
08/31/94 35488.37 33890.10
09/30/94 35479.42 33059.79
10/31/94 35354.11 33803.64
11/30/94 33841.49 32572.51
12/31/94 34253.21 33055.56
01/31/95 34879.74 33912.69
02/28/95 36437.11 35234.27
03/31/95 37394.80 36274.03
04/30/95 37726.09 37342.30
05/31/95 38456.10 38834.87
06/30/95 39943.15 39737.01
07/31/95 42718.99 41054.68
08/31/95 44088.88 41157.73
Let's say you invested $10,000 in Fidelity Select Leisure Portfolio on
August 31, 1985 and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $44,089 - a 340.89% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
News Corp. Ltd. sponsored ADR (vtg.) (Pfd. Reg.) 2.4
Omnicom Group, Inc. 2.2
Viacom, Inc. Class B (non-vtg.) 2.2
Silver King Communications, Inc. 2.1
Citicasters, Inc. 2.0
Meredith Corp. 1.7
Sierra On-Line, Inc. 1.6
WPP Group PLC ADR 1.5
TCI Group Class A 1.4
American Express Co. 1.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 60.8
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 4.2
Row: 1, Col: 4, Value: 5.3
Row: 1, Col: 5, Value: 12.5
Row: 1, Col: 6, Value: 13.2
Cable TV Operators 13.2%
Television Broadcasting 12.5%
Newspapers 5.3%
Advertising Agencies 4.2%
Prepackaged Computer
Software 4.0%
All Others 60.8%*
* INCLUDES SHORT-TERM INVESTMENTS
LEISURE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Deborah Wheeler,
Portfolio Manager of
Fidelity Select Leisure
Portfolio
Q. DEBORAH, HOW DID THE FUND PERFORM?
A. Quite well. The fund returned 21.00% during the six months ended August
31, 1995, compared to a 16.81% gain for the S&P 500. For the 12 months
ended August 31, 1995, the fund rose 24.23%, compared to a gain of 21.45%
for the S&P 500.
Q. WHAT HELPED THE FUND OUTPACE THE MARKET?
A. The fund's excess return came during the most recent three months, when
it climbed 14.65% versus 5.98% for the S&P 500. That surge was led by
strong gains in many entertainment and broadcasting stocks, which together
accounted for almost half of the fund's holdings at the start of the
period.
Q. WHAT DROVE THE RECENT GAINS IN BROADCASTING AND ENTERTAINMENT STOCKS?
A. Broadcasting companies continued to benefit from a strong advertising
environment and regulatory changes that have relaxed ownership limits on
radio and television stations. That helped such companies as News Corp.,
which owns Fox Broadcasting and its television stations; it remained the
fund's largest holding at the end of the period. The fund also held
entertainment companies such as Walt Disney, which benefited from improving
earnings and expansion of its valuation - the increase of its price
relative to earnings. Finally, many broadcasting and entertainment stocks
were driven higher by a series of acquisitions and mergers. The biggest
deal was Disney's agreement to acquire Capital Cities/ABC. I sold most of
the fund's stake in Disney to take profits. Discussions about a possible
acquisition of Turner Broadcasting by Time Warner also drew investors'
attention to companies in the sector.
Q. WHAT OTHER FACTORS HELPED THE FUND?
A. The fund held a 4.2% stake in advertising and marketing firms at the end
of the period. Their commission income continued to climb as strong demand
for advertising boosted prices. The fund also has maintained about a 14%
investment in shares of cable systems operators and firms that manufacture
cable-related equipment. Such stocks posted strong gains after the Senate
followed the House in passing a bill to deregulate cable prices. Investors
apparently believed the new rules would lead to higher profits for cable
system operators. That perception helped the performance of the fund's
investment in operators such as Cablevision and TCA Cable.
Q. WHAT SIGNIFICANT CHANGES HAVE YOU MADE IN THE FUND'S PORTFOLIO?
A. I increased the fund's stake in consumer electronics and software. I
invested in shares of two Japanese consumer electronics companies -
Matsushita and Sony. They have suffered greatly from the yen's strong
performance during the past five years, which has reduced demand for
Japanese exports. I'm betting that the Japanese cannot afford to support
their currency anymore. A declining yen would stimulate demand for Japanese
exports, including consumer electronics. Moreover, those companies have
done massive restructuring during recent years, and are much leaner as a
result. I more than doubled the fund's investment in companies that make
educational and entertainment software. I think demand for such software
will soar in the coming year, particularly with the explosive growth in
multimedia personal computers and new game player platforms. Software
companies that can place their programs on retailers' shelves would make
excellent acquisition targets for publishing and media conglomerates - and
even if they aren't bought out, these companies should enjoy rapid earnings
growth. At the same time, I've taken profits in sectors such as
entertainment, which shrank from 13% to 7% of the fund's investments during
the six-month period.
Q. CASH ACCOUNTED FOR SOME 20% OF THE FUND'S ASSETS AT THE END OF AUGUST.
WHY?
A. A good deal of money flowed into the fund in the past two months to take
advantage of the surge in broadcasting and entertainment stocks. The inflow
accounted for more than half of the growth of the fund's assets, which
climbed from $69 million to $112 million during the period. I will continue
to invest that cash in a deliberate fashion as I find attractively valued
stocks of companies with good fundamentals.
Q. WHAT IS YOUR STRATEGY GOING FORWARD?
A. I'm currently not inclined to increase investments in broadcasting or
entertainment stocks, which are trading at relatively high valuations right
now. I'll probably maintain a significant stake in cable and advertising
stocks, which should continue to perform well during the next year given
the relatively stable economy and favorable political climate. I also will
look for bargains in different groups on a company-by-company basis. In
general, my favorite choice will continue to be reasonably priced shares of
companies that I think can produce above- average earnings growth in the
current environment.
FUND FACTS
START DATE: May 8, 1984
TRADING SYMBOL: FDLSX
SIZE: as of August 31, 1995, more than
$112 million
MANAGER: Deborah Wheeler, since 1992;
manager, Fidelity Select Food and Agriculture
Portfolio, 1991-1993; Fidelity Select Retailing
Portfolio, 1989-1991; Fidelity Select Housing
Portfolio, 1986-1988; joined Fidelity in 1986
(checkmark)
LEISURE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 78.2%
SHARES VALUE (NOTE 1)
ADVERTISING - 4.7%
ADVERTISING - 0.5%
Cordiant PLC Sponsored ADR (a) 115,000 $ 589,371
ADVERTISING AGENCIES - 4.2%
ADVO-Systems, Inc. 18,500 344,563
Interpublic Group of Companies, Inc. 4,500 174,938
Omnicom Group, Inc. 40,100 2,516,275
WPP Group PLC ADR 325,000 1,706,250
4,742,026
TOTAL ADVERTISING 5,331,397
AIR TRANSPORTATION - 0.5%
AIR TRANSPORT, MAJOR NATIONAL - 0.5%
KLM Royal Dutch Airlines 18,487 612,382
BEVERAGES - 0.4%
SOFT DRINKS - 0.4%
Emvasa del Valle de Enah Ord. (a) 41,600 49,840
PepsiCo, Inc. 8,441 381,955
431,795
BROADCASTING - 29.7%
CABLE TV OPERATORS - 13.2%
American Telecasting, Inc. (a) 27,500 295,625
Bell Cablemedia PLC ADR (a) 1,000 19,000
BET Holdings, Inc. Class A (a) 17,200 316,050
CAI Wireless Systems, Inc. (a) 33,600 357,000
Cablemaxx, Inc. (a) 15,300 109,013
Cablevision Systems Corp. 19,000 1,244,500
Century Communications Corp.
Class A (a) 33,500 330,813
Comcast Corp. Class A 21,000 448,875
Cox Communications, Inc. Class A (a) 5,000 98,750
Gaylord Entertainment Co. Class A (a) 40,500 1,123,875
International Family Entertainment
Class B (a) 2,000 36,250
Liberty Media Group, Series A 13,875 368,555
NTN Communications, Inc. (a) 100 575
Nynex CableComms Group
ADR Units (a) 1,000 18,063
People's Choice TV Corp. (a) 14,500 279,125
Preferred Entertainment, Inc. (a) 37,600 526,400
TCA Cable TV, Inc. 34,000 1,075,250
TCI Group Class A 85,500 1,581,750
Time Warner, Inc. 4,283 180,421
Turner Broadcasting System, Inc. Class B 46,100 1,417,575
Valuevision International, Inc. (a) 126,900 864,506
Viacom, Inc. Class B:
(non-vtg.) (a) 49,855 2,424,199
(warrants C) (a) 172,000 731,000
(warrants E) (a) 70,000 490,000
Videotron Holdings PLC
sponsored ADR (a) 35,000 511,875
14,849,045
RADIO BROADCASTING - 4.0%
American Radio Systems Corp.
Class A (a) 11,300 322,050
Clear Channel Communications, Inc. (a) 12,225 912,291
EZ Communications, Inc. Class A (a) 32,400 656,100
Emmis Broadcasting Corp. Class A (a) 48,000 1,464,000
Evergreen Media Corp. Class A (a) 3,858 130,208
Grupo Radio Centro SA de CV
sponsored ADR 29,400 246,225
Heftel Broadcasting Corp. Class A (a) 30,000 562,500
SHARES VALUE (NOTE 1)
Infinity Broadcasting Corp. Class A (a) 4,150 $ 148,881
Saga Communications, Inc. Class A (a) 5,000 85,000
4,527,255
TELEVISION BROADCASTING - 12.5%
Australis Media Ltd. (a) 300,000 175,815
BHC Communications, Inc. Class A 3,400 308,550
British Sky Broadcasting Group
sponsored ADR (a) 10,000 317,500
CBS, Inc. 505 40,274
Capital Cities/ABC, Inc. 9,100 1,046,500
Carlton Communications 25,000 402,948
Chris-Craft Industries, Inc. (a) 15,030 676,350
Citicasters, Inc. (a) 59,000 2,256,750
Granite Broadcasting Corp. (a) 2,200 28,875
Groupo Televisa GDS (b) 44,000 1,045,000
Heritage Media Corp. Class A (a) 25,500 720,375
Home Shopping Network, Inc. (a) 61,300 643,650
Jacor Communications, Inc. Class A (a) 15,200 252,700
Lin Television Corp. (a) 10,500 383,250
Multimedia, Inc. (a) 15,300 650,250
New World Communications Group, Inc.
Class A (a) 21,100 490,575
Renaissance Communications Corp. (a) 34,300 1,269,100
Scandinavian Broadcasting Corp. (a) 8,100 219,713
Silver King Communications, Inc. (a) 65,700 2,385,731
Sinclair Broadcast Group, Inc.
Class A (a) 22,400 677,600
Westwood One, Inc. (a) 3,000 55,500
14,047,006
TOTAL BROADCASTING 33,423,306
CELLULAR - 2.5%
CELLULAR & COMMUNICATION SERVICES - 2.5%
AirTouch Communications, Inc. (a) 20,000 650,000
Cellular Communications, Inc.:
Class P 19,000 1,068,560
Series A (redeemable) (a) 9,600 523,200
International Cabletel, Inc. (a) 20,000 540,000
Rogers Communications, Inc. Class B (a) 2,000 20,462
2,802,222
COMMUNICATIONS EQUIPMENT - 0.4%
TELEPHONE EQUIPMENT - 0.4%
Ericsson (L.M.) Telephone Co.
Class B ADR 20,000 425,000
COMPUTER SERVICES & SOFTWARE - 4.2%
COMPUTER SERVICES - 0.2%
UUNET Technologies, Inc. (a) 6,000 272,250
PREPACKAGED COMPUTER SOFTWARE - 4.0%
Broderbund Software, Inc. (a) 6,000 441,750
Edmark Corp. (a) 15,000 600,000
Electronic Arts, Inc. (a) 14,000 532,000
Maxis, Inc. (a) 14,200 520,075
Netscape Communications Corp. (a) 200 9,900
Sierra On-Line, Inc. (a) 47,000 1,833,000
Spectrum Holobyte, Inc. (a) 34,500 595,125
4,531,850
TOTAL COMPUTER SERVICES & SOFTWARE 4,804,100
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSUMER ELECTRONICS - 2.3%
APPLIANCES - 1.2%
Matsushita Electric Industrial Co. Ltd. 89,000 $ 1,397,332
RADIOS, TELEVISIONS, STEREOS - 1.1%
Sony Corp. 23,200 1,271,298
TOTAL CONSUMER ELECTRONICS 2,668,630
CREDIT & OTHER FINANCE - 1.3%
FINANCIAL SERVICES - 1.3%
American Express Co. 37,200 1,501,950
DRUGS & PHARMACEUTICALS - 0.2%
BIOTECHNOLOGY - 0.2%
Idexx Laboratories 8,000 271,000
ELECTRICAL EQUIPMENT - 3.2%
ELECTRICAL MACHINERY - 1.4%
Amphenol Corp. Class A (a) 35,500 869,750
Philips Electronics NV 16,900 760,500
1,630,250
TV & RADIO COMMUNICATION EQUIPMENT - 1.8%
Avid Technology, Inc. (a) 17,000 675,750
California Amplifier, Inc. (a) 32,300 468,350
Pinnacle Systems (a) 4,100 109,675
Scientific-Atlanta, Inc. 37,200 744,000
1,997,775
TOTAL ELECTRICAL EQUIPMENT 3,628,025
ELECTRONICS - 0.3%
ELECTRONIC COMPONENTS & ACCESSORIES - 0.3%
General Cable PLC Sponsored ADR (a) 21,500 306,375
General Cable PLC (a) 10,000 28,051
334,426
ENTERTAINMENT - 5.0%
AMUSEMENT - 0.0%
Iwerks Entertainment, Inc. (a) 200 1,000
Mountasia Entertainment International (a) 6,000 44,250
45,250
AMUSEMENT & RECREATION SERVICES - 0.6%
IMAX Corp. (a) 45,000 714,375
MOTION PICTURE DISTRIBUTION - 0.1%
All American Communications (a) 2,500 30,938
Savoy Pictures Entertainment, Inc. (a) 5,000 45,000
75,938
MOTION PICTURE PRODUCTION - 1.5%
Cinergi Pictures Entertainment, Inc. (a) 86,400 410,400
Disney (Walt) Co. 12,200 684,725
Samuel Goldwyn Company (a) 500 3,875
King World Productions, Inc. (a) 100 3,800
Spelling Entertainment Group, Inc. 45,000 590,625
1,693,425
MOVIE THEATERS - 1.7%
AMC Entertainment, Inc. (a) 53,900 875,875
Carmike Cinemas, Inc. Class A (a) 11,600 237,800
Cineplex Odeon Corp. (a) 255,100 493,516
GC Companies, Inc. (a) 500 16,750
Regal Cinemas, Inc. (a) 9,800 333,200
1,957,141
RECORDS & CDS - 0.2%
PolyGram NV ADR 4,200 257,250
SHARES VALUE (NOTE 1)
RECREATIONAL SERVICES - 0.9%
Cedar Fair LP (depositary units) 6,000 $ 182,250
Discovery Zone, Inc. (a) 100 756
Granada Group PLC 85,000 818,721
1,001,727
TOTAL ENTERTAINMENT 5,745,106
FOODS - 0.2%
CEREAL BREAKFAST FOODS - 0.2%
RalCorp Holdings, Inc. (a) 9,800 221,725
GENERAL MERCHANDISE STORES - 1.6%
DEPARTMENT STORES - 0.8%
Federated Department Stores, Inc. 10,000 270,000
May Department Stores Co. (The) 5,000 211,875
Younkers, Inc. (a) 23,800 410,550
892,425
GENERAL MERCHANDISE STORES - 0.8%
Dayton Hudson Corp. 5,000 365,625
Wal-Mart Stores, Inc. 20,000 492,500
858,125
TOTAL GENERAL MERCHANDISE STORES 1,750,550
HOUSEHOLD PRODUCTS - 0.0%
MANUFACTURED PRODUCTS - 0.0%
Windmere Corp. (warrants) (a) 845 -
LEISURE DURABLES & TOYS - 2.2%
MOTORCYCLES - 0.2%
Harley Davidson, Inc. 8,400 233,100
SPORTING & ATHLETIC GOODS - 0.8%
Coleman, Inc. (a) 24,000 906,000
TOYS & GAMES - 1.2%
Hasbro, Inc. 24,000 777,000
Mattel, Inc. 375 10,875
Namco Ltd. 6,900 179,139
Toy Biz, Inc. Class A (a) 14,700 367,500
1,334,514
TOTAL LEISURE DURABLES & TOYS 2,473,614
LODGING & GAMING - 5.3%
HOTELS, MOTELS, & TOURIST COURTS - 2.7%
Hospitality Franchise Systems, Inc. 4,600 215,625
Host Marriott Corp. (a) 60,000 690,000
La Quinta Motor Inns, Inc. 30,100 903,000
Marriott International, Inc. 30,600 1,086,300
Mirage Resorts, Inc. (a) 3,400 116,875
3,011,800
RACING & GAMING - 2.6%
Grand Casinos, Inc. (a) 10,000 366,250
International Speedway Corp. 1,700 353,600
Players International, Inc. (a) 66,150 1,397,419
Speedway Motorsports (a) 500 12,438
WMS Industries, Inc. (a) 36,900 839,475
2,969,182
TOTAL LODGING & GAMING 5,980,982
PHOTOGRAPHIC EQUIPMENT - 0.4%
Eastman Kodak Co. 7,000 403,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PRINTING - 0.0%
COMMERCIAL PRINTING - 0.0%
Valassis Communications, Inc. (a) 1,000 $ 14,875
PUBLISHING - 7.0%
NEWSPAPERS - 5.3%
Belo (A.H.) Corp. Class A 5,200 182,650
News International PLC 150,000 767,151
News Corp. Ltd.:
ADR 7,900 179,725
sponsored ADR (vtg.)(Pfd. Reg.) 135,000 2,733,750
Pulitzer Publishing Co. 20,000 970,000
Scripps (E.W.) Co. Class A 33,400 1,123,075
5,956,351
PERIODICALS - 1.7%
Meredith Corp. 49,900 1,958,575
TOTAL PUBLISHING 7,914,926
RESTAURANTS - 0.5%
RESTAURANTS - 0.5%
Rainforest Cafe, Inc. (a) 30,000 547,500
RETAIL & WHOLESALE, MISCELLANEOUS - 1.7%
DURABLE GOODS - WHOLESALE - 0.6%
Sodak Gaming, Inc. (a) 34,400 619,200
LUMBER & BUILDING MATERIALS - RETAIL - 0.7%
Lowe's Companies, Inc. 23,000 764,750
RETAIL, GENERAL - 0.4%
Sotheby's Holdings, Inc. Class A 32,500 450,938
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 1,834,888
SERVICES - 1.3%
GENERAL SERVICES - 0.3%
Children's Discovery Centers of
America, Inc. (a) 4,100 55,350
Flextech PLC (a) 35,000 238,669
294,019
MANAGEMENT CONSULTING SERVICES - 0.9%
Dimac Corp. (a) 52,000 994,500
PUBLIC RELATIONS SERVICES - 0.1%
True North Communications 3,000 64,500
TOTAL SERVICES 1,353,019
TELEPHONE SERVICES - 0.9%
SBC Communications, Inc. 19,000 961,875
TEXTILES & APPAREL - 1.4%
APPAREL - 0.8%
Warnaco Group, Inc. Class A 40,000 870,000
FOOTWEAR - 0.6%
Nine West Group, Inc. (a) 15,000 639,375
TOTAL TEXTILES & APPAREL 1,509,375
TOBACCO - 1.0%
TOBACCO MANUFACTURERS - 1.0%
Philip Morris Companies, Inc. 15,000 1,119,375
TOTAL COMMON STOCKS
(Cost $74,306,735) 88,065,418
CONVERTIBLE PREFERRED STOCKS - 0.9%
SHARES VALUE (NOTE 1)
ENTERTAINMENT - 0.9%
MOTION PICTURE PRODUCTION - 0.9%
Time Warner Financing Trust $.31
(Cost $968,347) 28,600 $ 968,825
CONVERTIBLE BONDS - 0.6%
PRINCIPAL
AMOUNT
ENTERTAINMENT - 0.6%
RECREATIONAL SERVICES - 0.6%
Discovery Zone, Inc. liquid yield option
notes 0%, 10/14/13
(Cost $660,531) $ 1,960,000 627,200
REPURCHASE AGREEMENTS - 20.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 (Note 3) $ 22,783,683 22,780,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $98,715,613) $ 112,441,443
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,045,000 or 0.9% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $58,776,438 and $47,297,762, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $25,971 for the period (see
Note 5 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 86.0%
United Kingdom 5.1
Australia 2.7
Japan 2.5
Netherlands 1.5
Mexico 1.2
Others (individually less than 1%) 1.0
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $98,788,075. Net unrealized appreciation aggregated
$13,653,368, of which $15,435,182 related to appreciated investment
securities and $1,781,814 related to depreciated investment securities.
LEISURE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $22,780,000) (cost $98,715,613) - See $ 112,441,443
accompanying schedule
Cash 64
Receivable for investments sold 51,335
Receivable for fund shares sold 2,943,301
Dividends receivable 35,476
Redemption fees receivable 956
Other receivables 33,989
Prepaid expenses 3,858
TOTAL ASSETS 115,510,422
LIABILITIES
Payable for investments purchased $ 1,949,334
Payable for fund shares redeemed 632,928
Accrued management fee 50,255
Other payables and accrued expenses 106,293
TOTAL LIABILITIES 2,738,810
NET ASSETS $ 112,771,612
Net Assets consist of:
Paid in capital $ 93,089,645
Accumulated net investment (loss) (129,506
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 6,085,793
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 13,725,680
NET ASSETS, for 2,305,334 shares outstanding $ 112,771,612
NET ASSET VALUE and redemption price per share ($112,771,612 (divided by) 2,305,334 shares) $48.92
Maximum offering price per share (100/97.00 of $48.92) $50.43
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 207,212
Dividends
Interest 272,621
TOTAL INCOME 479,833
EXPENSES
Management fee $ 229,319
Transfer agent 352,743
Fees
Redemption fees (15,605
)
Accounting fees and expenses 37,539
Non-interested trustees' compensation 365
Custodian fees and expenses 12,666
Registration fees 8,177
Audit 9,846
Legal 251
Miscellaneous 488
Total expenses before reductions 635,789
Expense reductions (3,611 632,178
)
NET INVESTMENT INCOME (LOSS) (152,345
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 6,833,128
Foreign currency transactions 33 6,833,161
Change in net unrealized appreciation (depreciation) on:
Investment securities 7,644,624
Assets and liabilities in (158 7,644,466
foreign currencies )
NET GAIN (LOSS) 14,477,627
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 14,325,282
OTHER INFORMATION $235,842
Sales Charges Paid to FDC
Deferred sales charges withheld $8,982
by FDC
Exchange fees withheld by FSC $10,410
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (152,345 $ (380,902
Net investment income (loss) ) )
Net realized gain (loss) 6,833,161 203,901
Change in net unrealized appreciation (depreciation) 7,644,466 (3,201,870
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 14,325,282 (3,378,871
)
Distributions to shareholders (315,836 (8,699,446
From net realized gain ) )
In excess of net realized gain (159,238 -
)
TOTAL DISTRIBUTIONS (475,074 (8,699,446
) )
Share transactions 46,378,032 28,459,652
Net proceeds from sales of shares
Reinvestment of distributions 464,539 8,558,337
Cost of shares redeemed (17,515,496 (61,250,156
) )
Paid in capital portion of redemption fees 25,099 46,644
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 29,352,174 (24,185,523
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 43,202,382 (36,263,840
)
NET ASSETS
Beginning of period 69,569,230 105,833,070
End of period (including accumulated net investment loss of $129,506 and $68,073, respectively) $ 112,771,612 $ 69,569,230
OTHER INFORMATION
Shares
Sold 985,607 715,555
Issued in reinvestment of distributions 11,103 219,557
Redeemed (400,330 (1,562,185
) )
Net increase (decrease) 596,380 (627,073)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 40.71 $ 45.30 $ 35.77 $ 31.65 $ 26.32 $ 24.90
Income from Investment Operations
Net investment income (loss) (.09) (.21) (.29) (.11) (.08) .08
Net realized and unrealized gain (loss) 8.58 (.48) 12.98 4.21 5.40 1.55
Total from investment operations 8.49 (.69) 12.69 4.10 5.32 1.63
Less Distributions - - - - - (.23)
From net investment income
From net realized gain (.19) (3.93) (3.26) - - -
In excess of net realized gain (.10) - - - - -
Total distributions (.29) (3.93) (3.26) - - (.23)
Redemption fees added to paid in capital .01 .03 .10 .02 .01 .02
Net asset value, end of period $ 48.92 $ 40.71 $ 45.30 $ 35.77 $ 31.65 $ 26.32
TOTAL RETURN B, C 21.00% (1.07)% 37.14% 13.02% 20.25% 6.78%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 112,772 $ 69,569 $ 105,833 $ 44,824 $ 40,051 $ 40,727
Ratio of expenses to average net assets 1.66% A 1.62% 1.53% 1.90% A 2.21% 2.27%
Ratio of expenses to average net assets before 1.67% A 1.64% 1.55% 1.90% A 2.21% 2.27%
expense reductions
Ratio of net investment income (loss) to average net (.40)% (.52)% (.69)% (.39)% (.28)% .34%
assets A A
Portfolio turnover rate 137% A 103% 170% 109% A 45% 75%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
MULTIMEDIA PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
MULTIMEDIA 24.12% 31.27% 225.61% 357.10%
MULTIMEDIA
(INCL. 3% SALES CHARGE) 20.39% 27.33% 215.85% 343.38%
S&P 500 16.81% 21.45% 102.17% 201.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 30, 1986. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
MULTIMEDIA 31.27% 26.33% 18.01%
MULTIMEDIA
(INCL. 3% SALES CHARGE) 27.33% 25.86% 17.62%
S&P 500 21.45% 15.12% 12.78%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select MultimedStandard & Poor's
06/30/86 9700.00 10000.00
07/31/86 9253.80 9488.77
08/31/86 9777.60 10192.84
09/30/86 9263.50 9349.89
10/31/86 9700.00 9889.38
11/30/86 9777.60 10129.69
12/31/86 9486.60 9871.39
01/31/87 10621.50 11201.06
02/28/87 11911.60 11643.50
03/31/87 11872.80 11980.00
04/30/87 11688.50 11873.38
05/31/87 12231.70 11976.68
06/30/87 12745.80 12581.50
07/31/87 13725.50 13219.38
08/31/87 13715.80 13712.46
09/30/87 13386.00 13412.16
10/31/87 10660.30 10523.18
11/30/87 9923.10 9656.07
12/31/87 11377.70 10390.90
01/31/88 11566.11 10828.35
02/29/88 12340.67 11332.96
03/31/88 12874.49 10982.77
04/30/88 13031.50 11104.68
05/31/88 12811.69 11201.29
06/30/88 13254.20 11715.43
07/31/88 13232.54 11670.91
08/31/88 12734.43 11274.10
09/30/88 13535.74 11754.37
10/31/88 13687.34 12081.14
11/30/88 13579.06 11908.38
12/31/88 14432.31 12116.78
01/31/89 16155.73 13003.73
02/28/89 16122.38 12679.94
03/31/89 16878.46 12975.38
04/30/89 18012.59 13648.80
05/31/89 18879.86 14201.58
06/30/89 19266.45 14120.63
07/31/89 20732.13 15395.72
08/31/89 20709.75 15697.48
09/30/89 20385.29 15633.12
10/31/89 19009.12 15270.43
11/30/89 19121.00 15581.95
12/31/89 19129.10 15955.91
01/31/90 16589.03 14885.27
02/28/90 16170.05 15077.29
03/31/90 16012.93 15476.84
04/30/90 15253.52 15089.92
05/31/90 16706.86 16561.19
06/30/90 16562.84 16448.57
07/31/90 15646.32 16395.93
08/31/90 13616.88 14913.74
09/30/90 12451.59 14187.44
10/31/90 11914.77 14126.44
11/30/90 13145.53 15039.00
12/31/90 14114.42 15458.59
01/31/91 14873.82 16132.59
02/28/91 15973.65 17286.07
03/31/91 16405.72 17704.39
04/30/91 16968.73 17746.88
05/31/91 17060.38 18513.55
06/30/91 15711.78 17665.63
07/31/91 16300.98 18488.84
08/31/91 16811.61 18927.03
09/30/91 17832.88 18610.95
10/31/91 18736.30 18860.33
11/30/91 17453.17 18100.26
12/31/91 19456.43 20170.93
01/31/92 19967.06 19795.75
02/29/92 21079.98 20053.10
03/31/92 20543.16 19662.06
04/30/92 20857.39 20240.13
05/31/92 21171.63 20339.30
06/30/92 21250.19 20036.25
07/31/92 21302.56 20855.73
08/31/92 21014.51 20428.19
09/30/92 20883.58 20669.24
10/31/92 21224.00 20741.58
11/30/92 22769.00 21448.87
12/31/92 23639.18 21712.69
01/31/93 24116.74 21895.08
02/28/93 24222.86 22192.85
03/31/93 25177.98 22661.12
04/30/93 24526.88 22112.72
05/31/93 26198.86 22705.34
06/30/93 27021.36 22771.19
07/31/93 28032.64 22680.10
08/31/93 30419.26 23539.68
09/30/93 31147.38 23358.43
10/31/93 33480.06 23841.94
11/30/93 31295.13 23615.45
12/31/93 32626.91 23901.19
01/31/94 33092.22 24713.83
02/28/94 32667.96 24044.09
03/31/94 30669.84 22995.77
04/30/94 30684.72 23290.11
05/31/94 31813.18 23672.07
06/30/94 31102.09 23092.10
07/31/94 31859.55 23849.53
08/31/94 33776.38 24827.36
09/30/94 33544.50 24219.09
10/31/94 34301.96 24764.01
11/30/94 33219.88 23862.11
12/31/94 33933.14 24215.98
01/31/95 34316.74 24843.91
02/28/95 35723.30 25812.07
03/31/95 37992.97 26573.79
04/30/95 38872.06 27356.38
05/31/95 39079.85 28449.82
06/30/95 40582.31 29110.71
07/31/95 42979.84 30076.02
08/31/95 44338.45 30151.51
Let's say you invested $10,000 in Fidelity Select Multimedia Portfolio on
June 30, 1986, when the fund started, and paid a 3% sales charge. By August
31, 1995, your investment would have grown to $44,338 - a 343.38% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$30,152 over the same period - a 201.52% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Viacom, Inc. Class B (non-vtg.) 8.6
Meredith Corp. 7.6
NYNEX Corp. 4.9
Scripps (E.W.) Co. Class A 4.1
AirTouch Communications, Inc. 3.5
TCI Group Class A 3.2
AT&T Corp. 3.1
Disney (Walt) Co. 2.6
California Amplifier, Inc. 2.6
Scientific-Atlanta, Inc. 2.5
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 43.9
Row: 1, Col: 2, Value: 7.8
Row: 1, Col: 3, Value: 9.199999999999999
Row: 1, Col: 4, Value: 9.199999999999999
Row: 1, Col: 5, Value: 9.9
Row: 1, Col: 6, Value: 20.0
Cable TV Operators 20.0%
Telephone Services 9.9%
Newspapers 9.2%
TV & Radio Communication
Equipment 9.2%
Periodicals 7.8%
All Others 43.9%*
* INCLUDES SHORT-TERM INVESTMENTS
MULTIMEDIA PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Stephen DuFour,
Portfolio Manager of
Fidelity Select Multimedia Portfolio
Q. STEVE, HOW HAS THE FUND PERFORMED?
A. It has done very well. The fund had a total return of 24.12% from March
1, 1995, through August 31, 1995. During the same period, the Standard &
Poor's Composite Index of 500 Stocks returned 16.81%. For the 12 months
ended August 31, 1995, the fund rose 31.27%, while the S&P 500 was up
21.45%.
Q. WHAT HELPED THE FUND TOP THE RETURNS OF THE BROAD MARKET?
A. A very strong climate for television network and print advertising. In
addition, the value of television stations has gone up dramatically due to
new regulations currently under discussion in Congress. A year ago, a
company could own TV stations that, in sum, covered 25% of the U.S. If the
proposed legislation passes, broadcast companies would be able to own TV
assets that reach up to 35% of the country. This has been a very positive
move for a number of the fund's stocks, including News Corp. and Pulitzer
Publishing.
Q. ARE THERE OTHER STOCKS THAT HAVE PERFORMED WELL OVER THE PERIOD?
A. Meredith has been the fund's strongest performer during the period. It
has done a great job diversifying the mix of its magazines by focusing on
those that are more dependent on subscriptions, rather than magazines that
are dependent on advertising. That helps protect the company if and when
there is an economic slowdown.
Q. ARE YOU FOLLOWING ANY PARTICULAR THEMES?
A. Yes. First of all, let me remind investors that multimedia can be
separated broadly into five different industries: newspapers, publishing,
equipment, cable and content. Content refers to the movie studios
primarily, but includes any company that produces programming. I have
focused the fund's investments on the content and equipment side and
invested less in newspapers, publishing and cable. In addition, I've
avoided owning the stocks of companies that have high fixed costs
associated with maintaining equipment. That's because companies with high
fixed costs have to put a lot of money back into the business every year.
Viacom, the fund's largest position at the end of August, sold its
capital-intensive cable business and is focusing on its recently acquired
Paramount and Blockbuster Video businesses.
Q. THERE HAS BEEN A LOT OF MERGER AND ACQUISITION ACTIVITY IN THE SECTOR -
DISNEY JOINING FORCES WITH CAPITAL CITIES/ABC, FOR EXAMPLE. WHAT HAS THIS
MEANT TO THE SECTOR AND THE FUND?
A. The merger activity seen in the media industry is an indication of the
battle going on within the sector. Looking out over the next five or 10
years, the question remains whether the content side of the industry or the
distribution side, such as cable or networks, will perform better. For
example, if you order a pay-per-view movie at your house five years from
now and pay $5 for it, will $4 go to Viacom or another content company,
with the distribution company - the cable operator - receiving $1? Or, will
Viacom get $1 and the cable company $4? Some cable companies such as Time
Warner and TCI are expanding their cable presence to gain leverage over
content providers. The Disney/ABC merger is an attempt by Disney to get
into the distribution side, again to gain a competitive advantage. For the
moment, it's hard to predict how the battle will play out.
Q. LET'S TAKE A LOOK AT WHICH STOCKS DIDN'T PERFORM AS WELL AS YOU WOULD
HAVE HOPED.
A. Cable equipment providers have struggled for two reasons. First, the
cash flow for cable companies has slowed because new regulations have
capped or decreased subscriber rates. Second, the new telecommunications
bill being debated in Congress makes it uncertain whether cable companies
or telephone companies will gain the upper hand in bringing voice, data and
video into the home. As a result, investments such as General Instruments -
which the fund no longer owns - and Scientific-Atlanta haven't performed
well.
Q. WHAT DO YOU SEE LOOKING OUT OVER THE NEXT SIX MONTHS?
A. The industry is changing so rapidly that it's difficult to predict. The
demand for entertainment and information continues to grow, which should
benefit the large media properties that are the leading providers of
content. With increasing competition, a new telecommunications bill in
Congress and additional auctions of frequencies for TV and wireless cable
coming up, the road ahead may be rocky. But long term, the outlook for the
industry looks very good.
FUND FACTS
START DATE: June 30, 1986
TRADING SYMBOL: FBMPX
SIZE: as of August 31, 1995, more than
$93 million
MANAGER: Stephen DuFour, since 1993;
manager, Fidelity Select Transportation
Portfolio, since December 1994; equity
analyst, media, 1992-1993; joined Fidelity in
1992
(checkmark)
MULTIMEDIA PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.8%
SHARES VALUE (NOTE 1)
BEVERAGES - 0.5%
DISTILLED BEVERAGES - 0.5%
Seagram Co. Ltd. 11,900 $ 438,298
BROADCASTING - 27.4%
CABLE TV OPERATORS - 20.0%
ACS Enterprises, Inc. (a) 82,000 1,486,250
CAI Wireless Systems, Inc. (a) 63,100 670,438
Cablemaxx, Inc. (a) 26,500 188,813
Gaylord Entertainment Co. Class A (a) 33,000 915,750
People's Choice TV Corp. (a) 116,100 2,234,925
Preferred Entertainment, Inc. (a) 54,600 764,400
TCI Group Class A 155,000 2,867,500
Liberty Media Group, Series A 28,750 763,672
Viacom, Inc. Class B (a):
(non-vtg.) 159,984 7,779,222
(warrants) 125,000 531,250
18,202,220
RADIO BROADCASTING - 1.6%
Grupo Radio Centro SA de CV
sponsored ADR (a) 176,900 1,481,533
TELEVISION BROADCASTING - 5.8%
British Sky Broadcasting Group ADR (a) 9,200 292,100
Central European Media Class C (a) 55,000 1,381,875
Citicasters, Inc. (a) 13,300 508,725
Groupo Televisa GDS (b) 63,100 1,498,625
Heritage Media Corp. Class A (a) 20,300 573,475
Jacor Communications, Inc. Class A (a) 15,200 252,700
New World Communications Group,
Inc. Class A (a) 30,300 704,475
Sinclair Broadcast Group, Inc. Class A (a) 1,000 30,250
5,242,225
TOTAL BROADCASTING 24,925,978
CELLULAR - 4.9%
CELLULAR & COMMUNICATION SERVICES - 4.9%
AirTouch Communications, Inc. (a) 98,400 3,198,000
Vodafone Group PLC sponsored ADR 30,300 1,268,813
4,466,813
COMMUNICATIONS EQUIPMENT - 3.8%
TELEPHONE EQUIPMENT - 3.8%
Ericsson (L.M.) Telephone Co.
Class B ADR 80,000 1,710,000
Nokia Corp. AB sponsored ADR 25,000 1,734,375
3,444,375
COMPUTER SERVICES & SOFTWARE - 3.7%
COMPUTER SERVICES - 1.1%
Reuters Holdings PLC ADR Class B 20,000 1,047,500
PREPACKAGED COMPUTER SOFTWARE - 2.6%
Electronic Arts, Inc. (a) 42,000 1,596,000
Oracle Systems Corp. (a) 19,000 762,375
2,358,375
TOTAL COMPUTER SERVICES & SOFTWARE 3,405,875
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT - 2.9%
COMPUTER EQUIPMENT - WHOLESALE - 0.0%
Beamscope Canada, Inc. (a) 500 $ 5,581
ELECTRONIC COMPUTERS - 2.1%
International Business Machines Corp. 18,100 1,871,088
MINI & MICRO COMPUTERS - 0.8%
Compaq Computer Corp. (a) 16,000 764,000
TOTAL COMPUTERS & OFFICE EQUIPMENT 2,640,669
CONSUMER ELECTRONICS - 0.6%
RADIOS, TELEVISIONS, STEREOS - 0.6%
Sony Corp. ADR 9,300 512,663
CREDIT & OTHER FINANCE - 0.0%
FINANCIAL SERVICES - 0.0%
Benpress Holdings Corp. GDR (a) 486 3,524
ELECTRICAL EQUIPMENT - 9.2%
TV & RADIO COMMUNICATION EQUIPMENT - 9.2%
C-COR Electronics, Inc. (a) 49,400 1,580,800
California Amplifier, Inc. (a) 164,200 2,380,900
Leitch Technology (a) 88,200 1,337,159
Ortel Corp. (a) 47,100 765,375
Scientific-Atlanta, Inc. 113,300 2,266,000
8,330,234
ELECTRONICS - 0.8%
SEMICONDUCTORS - 0.8%
Motorola, Inc. 10,000 747,500
ENTERTAINMENT - 3.0%
MOTION PICTURE PRODUCTION - 3.0%
Alliance Communications Corp. (a):
Class A (vtg.) 12,500 134,864
Class B (non-vtg.) 12,500 120,912
Cinergi Pictures Entertainment, Inc. (a) 4,900 23,275
Disney (Walt) Co. 42,900 2,407,763
2,686,814
MEDICAL FACILITIES MANAGEMENT - 0.0%
HEALTH SERVICES - 0.0%
Lambert Communications, Inc. (a) 150,000 7,032
PUBLISHING - 16.9%
BOOK PUBLISHING & PRINTING - 0.2%
Nelson Thomas, Inc. 5,425 138,338
NEWSPAPERS - 8.9%
Belo (A.H.) Corp. Class A 10,000 351,250
Gannett Co., Inc. 15,000 802,500
News Corp. Ltd. (vtg.) sponsored ADR
(Pfd. Reg.) 41,700 844,425
Pulitzer Publishing Co. 43,050 2,087,925
Scripps (E.W.) Co. Class A 111,200 3,739,100
Washington Post Co. Class B 1,000 287,375
8,112,575
PERIODICALS - 7.8%
Marvel Entertainment Group, Inc. (a) 16,400 235,750
Meredith Corp. 175,500 6,888,375
7,124,125
TOTAL PUBLISHING 15,375,038
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 1.2%
GENERAL SERVICES - 1.2%
Flextech PLC (a) 160,000 $ 1,091,059
TELEPHONE SERVICES - 9.9%
AT&T Corp. 50,000 2,825,000
Frontier Corp. 19,000 529,625
NYNEX Corp. 100,000 4,500,000
SBC Communications, Inc. 22,400 1,134,000
Telephone & Data Systems, Inc. 810 33,210
9,021,835
TOTAL COMMON STOCKS
(Cost $67,699,272) 77,097,707
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
PUBLISHING - 0.3%
NEWSPAPERS - 0.3%
News Corp. Ltd. (ltd. vtg.)
(Cost $176,252) 50,353 259,532
REPURCHASE AGREEMENTS - 14.9%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 13,586,196 13,584,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $81,459,524) $ 90,941,239
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,498,625 or 1.6% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $134,891,907 and $107,331,976, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $50,460 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $7,608,000 and $1,754,000,
respectively. The weighted average interest rate paid was 6.5% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 83.3%
United Kingdom 4.1
Mexico 3.3
Canada 2.2
Finland 1.9
Sweden 1.9
Bermuda 1.5
Australia 1.2
Others (individually less than 1%) 0.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $81,464,212. Net unrealized appreciation aggregated
$9,477,027, of which $12,321,270 related to appreciated investment
securities and $2,844,243 related to depreciated investment securities.
MULTIMEDIA PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $13,584,000) (cost $81,459,524) - See $ 90,941,239
accompanying schedule
Cash 679
Receivable for investments sold 87,500
Receivable for fund shares sold 4,760,278
Dividends receivable 42,806
Redemption fees receivable 273
Other receivables 687
Prepaid expenses 537
TOTAL ASSETS 95,833,999
LIABILITIES
Payable for investments purchased $ 1,620,117
Payable for fund shares redeemed 463,104
Accrued management fee 41,043
Other payables and accrued expenses 102,069
TOTAL LIABILITIES 2,226,333
NET ASSETS $ 93,607,666
Net Assets consist of:
Paid in capital $ 74,382,473
Undistributed net investment income 36,433
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 9,707,045
Net unrealized appreciation (depreciation) on investments 9,481,715
NET ASSETS, for 3,374,261 shares outstanding $ 93,607,666
NET ASSET VALUE and redemption price per share ($93,607,666 (divided by) 3,374,261 shares) $27.74
Maximum offering price per share (100/97.00 of $27.74) $28.60
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 269,677
Dividends
Interest 472,693
TOTAL INCOME 742,370
EXPENSES
Management fee $ 301,172
Transfer agent 403,242
Fees
Redemption fees (74,141
)
Accounting fees and expenses 49,540
Non-interested trustees' compensation 207
Custodian fees and expenses 12,204
Registration fees 11,970
Audit 8,748
Legal 115
Interest 1,893
Miscellaneous 378
Total expenses before reductions 715,328
Expense reductions (9,391 705,937
)
NET INVESTMENT INCOME 36,433
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 9,873,487
Foreign currency transactions (29 9,873,458
)
Change in net unrealized appreciation (depreciation) on investment securities 7,276,896
NET GAIN (LOSS) 17,150,354
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 17,186,787
OTHER INFORMATION $526,723
Sales Charges Paid to FDC
Deferred sales charges withheld $895
by FDC
Exchange fees withheld by FSC $63,877
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 36,433 $ (21,240
Net investment income (loss) )
Net realized gain (loss) 9,873,458 713,620
Change in net unrealized appreciation (depreciation) 7,276,896 (46,862
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,186,787 645,518
Distributions to shareholders from net realized gains - (5,781,614
)
Share transactions 173,402,210 35,047,458
Net proceeds from sales of shares
Reinvestment of distributions - 5,728,603
Cost of shares redeemed (135,189,849 (46,707,859
) )
Paid in capital portion of redemption fees 51,413 48,397
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 38,263,774 (5,883,401
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 55,450,561 (11,019,497
)
NET ASSETS
Beginning of period 38,157,105 49,176,602
End of period (including undistributed net investment income of $36,433 and $0, respectively) $ 93,607,666 $ 38,157,105
OTHER INFORMATION
Shares
Sold 7,053,126 1,606,026
Issued in reinvestment of distributions - 293,006
Redeemed (5,385,757 (2,252,403
) )
Net increase (decrease) 1,667,369 (353,371)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.35 $ 23.87 $ 18.26 $ 15.93 $ 12.96 $ 11.65
Income from Investment Operations
Net investment income (loss) .01 (.01) (.10) (.07) (.17) (.05)
Net realized and unrealized gain (loss) 5.37 1.67 6.28 2.61 3.08 1.29
Total from investment operations 5.38 1.66 6.18 2.54 2.91 1.24
Less Distributions - (3.21) (.65) (.23) - -
From net realized gain
Redemption fees added to paid in capital .01 .03 .08 .02 .06 .07
Net asset value, end of period $ 27.74 $ 22.35 $ 23.87 $ 18.26 $ 15.93 $ 12.96
TOTAL RETURN B, C 24.12% 9.35% 34.86% 16.14% 22.92% 11.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 93,608 $ 38,157 $ 49,177 $ 16,647 $ 8,393 $ 5,177
Ratio of expenses to average net assets 1.42% A 2.03% 1.63% 2.49% A 2.49% 2.53%
Ratio of expenses to average net assets before 1.44% A 2.05% 1.66% 2.54% A 2.78% 2.77%
expense reductions
Ratio of net investment income (loss) to average net .07% A (.07)% (.42)% (.52)% (1.22)% (.43)%
assets A
Portfolio turnover rate 273% A 107% 340% 70% A 111% 150%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN
(SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
RETAILING PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
RETAILING 10.12% 2.77% 146.79% 329.78%
RETAILING
(INCL. 3% SALES CHARGE) 6.82% -0.31% 139.38% 316.88%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
RETAILING 2.77% 19.80% 16.19%
RETAILING
(INCL. 3% SALES CHARGE) -0.31% 19.07% 15.83%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select RetailStandard & Po
12/16/85 9700.00 10000.00
12/31/85 9506.00 10080.42
01/31/86 9583.60 10136.87
02/28/86 10252.90 10895.11
03/31/86 11174.40 11503.06
04/30/86 11378.10 11373.07
05/31/86 12668.20 11978.12
06/30/86 12978.60 12180.55
07/31/86 11271.40 11499.66
08/31/86 11271.40 12352.93
09/30/86 10446.90 11331.35
10/31/86 11368.40 11985.16
11/30/86 11678.80 12276.40
12/31/86 10854.30 11963.36
01/31/87 11756.40 13574.82
02/28/87 13124.10 14111.03
03/31/87 13521.80 14518.83
04/30/87 13104.70 14389.62
05/31/87 13337.50 14514.81
06/30/87 14065.00 15247.80
07/31/87 14773.10 16020.87
08/31/87 15102.90 16618.45
09/30/87 14026.20 16254.50
10/31/87 9835.80 12753.28
11/30/87 9156.80 11702.41
12/31/87 10055.27 12592.97
01/31/88 10690.46 13123.13
02/29/88 11928.52 13734.67
03/31/88 12079.25 13310.27
04/30/88 12456.05 13458.01
05/31/88 12100.78 13575.09
06/30/88 13166.59 14198.19
07/31/88 13048.17 14144.24
08/31/88 13015.87 13663.33
09/30/88 13780.24 14245.39
10/31/88 14070.92 14641.41
11/30/88 13877.14 14432.04
12/31/88 13947.18 14684.60
01/31/89 14636.88 15759.52
02/28/89 14439.82 15367.10
03/31/89 15129.52 15725.16
04/30/89 15983.43 16541.29
05/31/89 17089.13 17211.21
06/30/89 16784.90 17113.11
07/31/89 18138.52 18658.42
08/31/89 19018.37 19024.13
09/30/89 18973.25 18946.13
10/31/89 18059.56 18506.58
11/30/89 18172.36 18884.12
12/31/89 18065.92 19337.33
01/31/90 16654.93 18039.80
02/28/90 17235.15 18272.51
03/31/90 18646.14 18756.73
04/30/90 18382.40 18287.82
05/31/90 20835.15 20070.88
06/30/90 20571.41 19934.40
07/31/90 19727.45 19870.61
08/31/90 16892.29 18074.30
09/30/90 15006.58 17194.08
10/31/90 14307.68 17120.15
11/30/90 16259.33 18226.11
12/31/90 17157.06 18734.62
01/31/91 18822.54 19551.45
02/28/91 20567.32 20949.38
03/31/91 22708.65 21456.35
04/30/91 23025.88 21507.85
05/31/91 24942.51 22436.99
06/30/91 24149.42 21409.37
07/31/91 25695.94 22407.05
08/31/91 27057.40 22938.10
09/30/91 26766.60 22555.03
10/31/91 26264.31 22857.27
11/30/91 25762.03 21936.12
12/31/91 28846.71 24445.61
01/31/92 30446.30 23990.92
02/29/92 31910.32 24302.81
03/31/92 31273.20 23828.90
04/30/92 29998.96 24529.47
05/31/92 30622.52 24649.67
06/30/92 29193.09 24282.39
07/31/92 30491.82 25275.53
08/31/92 29800.11 24757.39
09/30/92 30689.45 25049.52
10/31/92 32792.82 25137.20
11/30/92 35277.34 25994.38
12/31/92 35214.99 26314.11
01/31/93 35457.95 26535.14
02/28/93 34114.52 26896.02
03/31/93 36744.21 27463.53
04/30/93 34635.18 26798.91
05/31/93 36553.66 27517.12
06/30/93 35674.97 27596.92
07/31/93 35850.71 27486.53
08/31/93 37490.94 28528.27
09/30/93 38633.24 28308.61
10/31/93 39233.68 28894.59
11/30/93 39614.45 28620.10
12/31/93 39804.05 28966.40
01/31/94 38030.76 29951.26
02/28/94 39439.90 29139.58
03/31/94 38616.58 27869.09
04/30/94 39788.22 28225.82
05/31/94 37824.93 28688.72
06/30/94 37508.27 27985.85
07/31/94 38141.59 28903.78
08/31/94 40564.04 30088.84
09/30/94 39772.39 29351.66
10/31/94 39946.55 30012.07
11/30/94 38553.25 28919.03
12/31/94 37809.10 29347.90
01/31/95 37508.27 30108.89
02/28/95 37856.60 31282.24
03/31/95 38284.09 32205.38
04/30/95 36795.79 33153.82
05/31/95 37444.94 34478.98
06/30/95 39835.72 35279.93
07/31/95 42273.99 36449.81
08/31/95 41688.18 36541.30
Let's say you invested $10,000 in Fidelity Select Retailing Portfolio on
December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $41,688 - a 316.88%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Nine West Group, Inc. 8.1
Lowe's Companies, Inc. 7.2
Federated Department Stores, Inc. 5.9
Dayton Hudson Corp. 5.6
May Department Stores Co. (The) 4.3
Talbots, Inc. 4.1
Wal-Mart Stores, Inc. 3.7
Vons Companies, Inc. 3.4
Tandy Corp. 3.1
Hudsons Bay Co. Ord. 3.1
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 41.6
Row: 1, Col: 2, Value: 8.1
Row: 1, Col: 3, Value: 8.300000000000001
Row: 1, Col: 4, Value: 9.9
Row: 1, Col: 5, Value: 12.9
Row: 1, Col: 6, Value: 19.4
Department Stores 19.4%
General Merchandise
Stores 12.9%
Grocery - Retail 9.9%
Lumber & Building
Materials - Retail 8.3%
Footwear 8.1%
All Others 41.4%
RETAILING PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Erin Sullivan,
Portfolio Manager of Fidelity Select Retailing
Portfolio
Q. HOW HAS THE FUND BEEN PERFORMING, ERIN?
A. It did pretty well during the period, but the sector as a whole
continues to lag the market by a substantial margin. For the six months
ended August 31, 1995, the fund showed a 10.12% gain, compared with a total
return of 16.81% for the S&P 500. In the 12-month comparison also ended
August 31, the fund returned 2.77%, well behind the S&P's 21.45% gain for
the period.
Q. WAS EXCESS CAPACITY STILL THE MAIN REASON FOR THIS UNDERPERFORMANCE?
A. Yes, I think that was still the case. There continued to be a
significant over-supply of retail stores, and this continues to make it
difficult for many retailers to deliver strong results. Competition has
been extremely intense as retailers fight for market share. While there has
been progress in some segments of the industry to reduce capacity, we are
still very early in that process. In addition, general economic activity
has been somewhat slow and demand for apparel has been weak. These factors
also have made it a tough environment for retailers.
Q. YET YOU DID MANAGE TO FIND OPPORTUNITIES WITHIN THIS ENVIRONMENT . . .
A. A few. When I took over the fund about six months ago, I began to
reposition it, scaling back on some of the more thinly-traded names and
buying or adding to names where I saw healthier prospects. Nine West, a
shoe manufacturer, was a consolidation story that I got excited about when
the company acquired a unit of U.S. Shoe. I increased the fund's holdings
in this stock, which appreciated more than 50% during the period. I also
found that department stores were a fairly stable place to be in the last
six months. Federated Department Stores, which acquired Macy's last year,
started to come through in spite of a tough apparel environment, and
Proffitts, a regional department store that has begun consolidating its
local market in the southeastern U.S., also helped.
Q. WHERE ELSE DID YOU FIND OPPORTUNITY?
A. There was some selective opportunity within specialty apparel. On the
manufacturing side, Kellwood benefited from its private label contract with
Wal-Mart Stores, and Tommy Hilfiger saw a lot of growth of its brand in
department store sales. Both these names did quite well. And on the
retailing side, Talbots, the women's specialty apparel store, and Gymboree,
a mall-based retailer of children's clothing, did very well in the period.
The fund also benefited from its holdings in Sunglass Hut, a mall-based
seller of sunglasses that has been expanding its franchise, and from
Circuit City, a service-oriented consumer electronics chain that has been
gaining market share. By the end of August, the fund no longer had
positions in Gymboree and Circuit City due to profit taking.
Q. WHERE DID YOU RUN INTO DIFFICULTIES?
A. Unfortunately, Old American Stores and Ann Taylor, two of our top
holdings at the beginning of the period, had some difficulties. Old
American, a craft supplies retailer, had to make some inventory adjustments
during the period, fell out of favor with the market and became a very
thinly traded stock that took a long time to pare down. The problems at
AnnTaylor, which was down nearly 25% during the period, were the result of
sluggish apparel sales at a time when the company had committed to
increasing its floor space substantially. I have eliminated the fund's
holdings in AnnTaylor.
Q. WHAT'S YOUR VIEW OF THE INDUSTRY AS YOU LOOK OUT SIX MONTHS OR SO?
A. I think excess capacity and a slowing economy could continue to make it
a difficult environment for retailers in general. The fall apparel season
is starting off slowly, and I expect there to be con-
tinuing weakness in this area. I think the off-price segment will continue
to have difficulties as well. And I believe that, in general, we'll be
seeing more retailers close their doors. That's why I'm tending to favor
larger companies that have the financial strength to make acquisitions or
close down stores. Also on the plus side, I think that demand is still
pretty strong in the consumer electronics segment and would expect some
continuing benefit from new products such as the recent introduction of
Microsoft's Windows 95.
Q. SO WHAT WILL BE YOUR STRATEGY GOING FORWARD?
A. I'm pretty happy with how the fund is currently positioned, which is to
be somewhat defensive in light of the continuing difficult environment,
while selectively picking stocks whose fundamentals and market positioning
look strongest.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSRPX
SIZE: as of August 31, 1995, more than
$40 million
MANAGER: Erin Sullivan, since February 1995;
equity analyst, medical technology and hospital
supply industries, 1993-1995; analyst, initial public
offerings, 1991-1992; joined Fidelity in 1991
(checkmark)
RETAILING PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 99.8%
SHARES VALUE (NOTE 1)
APPAREL STORES - 6.4%
GENERAL APPAREL STORES - 1.7%
Claire's Stores, Inc. 30,000 $ 648,748
WOMEN'S CLOTHING STORES - 4.7%
Cache, Inc. (a) 64,100 232,363
Talbots, Inc. 47,400 1,635,300
1,867,663
TOTAL APPAREL STORES 2,516,411
COMPUTER SERVICES & SOFTWARE - 0.9%
COMPUTER & SOFTWARE STORES - 0.9%
CompUSA, Inc. (a) 10,000 370,000
DRUG STORES - 2.5%
Eckerd Corp. (a) 3,900 142,838
Revco (D.S.), Inc. (a) 42,900 847,275
990,113
GENERAL MERCHANDISE STORES - 35.0%
DEPARTMENT STORES - 19.2%
Carson Pirie Scott & Co. (a) 29,072 523,296
Federated Department Stores, Inc. (a) 86,000 2,322,000
Hudsons Bay Co. Ord. 60,000 1,205,402
May Department Stores Co. (The) 40,000 1,695,000
Proffitts, Inc. (a) 35,000 923,125
Sears, Roebuck & Co. 200 6,475
Younkers, Inc. (a) 52,400 903,900
7,579,198
GENERAL MERCHANDISE STORES - 12.9%
Dayton Hudson Corp. 30,000 2,193,750
Dollar General Corp. 21,875 574,219
Price/Costco, Inc. (a) 51,100 862,313
Wal-Mart Stores, Inc. 60,000 1,477,500
5,107,782
VARIETY STORES - 2.9%
Consolidated Stores Corp. (a) 35,000 770,000
Mac Frugals Bargains Closeouts, Inc. (a) 21,000 351,750
1,121,750
TOTAL GENERAL MERCHANDISE STORES 13,808,730
GROCERY STORES - 11.8%
GROCERIES & RELATED PRODUCTS - WHOLESALE - 0.4%
Provigo, Inc. 25,000 148,815
GROCERIES, GENERAL LINE - WHOLESALE - 1.5%
Metro Richelieu, Inc. Class A 43,300 592,014
GROCERY - RETAIL - 9.9%
Albertson's, Inc. 10,000 318,750
Giant Food, Inc. Class A 30,000 933,750
Safeway, Inc. (a) 20,700 815,063
Stop & Shop Companies, Inc. (a) 20,000 485,000
Vons Companies, Inc. (a) 60,800 1,360,400
3,912,963
TOTAL GROCERY STORES 4,653,792
LEASING & RENTAL - 0.6%
EQUIPMENT RENTAL & LEASING - 0.6%
Renters Choice, Inc. (a) 9,000 256,500
SHARES VALUE (NOTE 1)
LEISURE DURABLES & TOYS - 1.3%
BOAT DEALERS - RETAIL - 1.3%
West Marine, Inc. (a) 19,500 $ 511,875
RETAIL & WHOLESALE, MISCELLANEOUS - 24.3%
JEWELRY STORES - 3.0%
Friedmans, Inc. Class A (a) 24,100 560,325
Tiffany & Co., Inc. 15,000 641,250
1,201,575
LUMBER & BUILDING MATERIALS - RETAIL - 8.3%
Lowe's Companies, Inc. 85,300 2,836,225
Wickes Lumber Co. (a) 31,500 433,125
3,269,350
MUSIC, TV, & ELECTRONIC STORES - 5.3%
InterTan, Inc. (a) 44,500 411,625
Rex Stores Corp. (a) 24,600 424,350
Sound Advice, Inc. (warrants) (a) 50 -
Tandy Corp. 20,000 1,242,500
2,078,475
PAINT, VARNISH & SUPPLIES - WHOLESALE - 1.4%
Finish Line, Inc. Class A (a) 66,600 557,775
RETAIL, GENERAL - 3.8%
Old American Stores, Inc. (a) 4,000 43,000
Pier 1 Imports, Inc. 34,600 320,050
Sunglass Hut International, Inc. (a) 27,000 1,147,500
1,510,550
SEWING STORES - 1.6%
Fabri-Centers of America, Inc. (a):
Class A 25,000 340,625
Class B (non-vtg) 25,000 284,375
625,000
SPORTING GOODS & BIKES STORES - 0.9%
Forzani Group Ltd. Class A (a) 60,300 342,116
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 9,584,841
SERVICES - 0.3%
GENERAL SERVICES - 0.3%
Regis Corp. 5,800 117,088
TEXTILES & APPAREL - 16.7%
APPAREL - 5.6%
Fila Holding Spa sponsored ADR 19,600 656,600
Kellwood Co. 54,600 1,146,600
Warnaco Group, Inc. Class A 20,000 435,000
2,238,200
FOOTWEAR - 8.1%
Nine West Group, Inc. (a) 75,200 3,205,400
MEN'S & BOYS' CLOTHING - 3.0%
Tommy Hilfiger (a) 35,000 1,172,500
TOTAL TEXTILES & APPAREL 6,616,100
TOTAL COMMON STOCKS
(Cost $36,663,261) 39,425,450
NONCONVERTIBLE CORPORATE BONDS - 0.2%
PRINCIPAL
AMOUNT
GENERAL MERCHANDISE STORES - 0.2%
DEPARTMENT STORES - 0.2%
Carson Pirie Scott & Co. 13%,
3/28/05 (Cost $75,110) $ 80,332 $ 80,332
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $36,738,371) $ 39,505,782
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $42,262,690 and $37,099,656, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $30,743 for the period
(see Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $411,625 and $445,000, respectively (see Note 7 of
Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $36,798,313. Net unrealized appreciation aggregated
$2,707,469, of which $3,940,923 related to appreciated investment
securities and $1,233,454 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $3,124,000 which will expire on February 28, 2003.
RETAILING PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value $ 39,505,782
(cost $36,738,371) - See accompanying schedule
Receivable for investments sold 9,378,964
Receivable for fund shares sold 84,062
Dividends receivable 62,908
Interest receivable 4,409
Redemption fees receivable 379
Other receivables 5,368
Prepaid expenses 7,301
TOTAL ASSETS 49,049,173
LIABILITIES
Payable to custodian bank $ 272,471
Payable for investments purchased 522,200
Payable for fund shares redeemed 7,191,038
Accrued management fee 25,766
Other payables and 53,641
accrued expenses
Collateral on securities loaned, 445,000
at value
TOTAL LIABILITIES 8,510,116
NET ASSETS $ 40,539,057
Net Assets consist of:
Paid in capital $ 41,099,115
Accumulated net investment (loss) (74,439
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (3,253,041
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 2,767,422
NET ASSETS, for 1,539,407 shares outstanding $ 40,539,057
NET ASSET VALUE and redemption price per share ($40,539,057 (divided by) 1,539,407 shares) $26.33
Maximum offering price per share (100/97.00 of $26.33) $27.14
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 119,132
Dividends
Interest (including income on securities loaned of $11,622) 139,155
TOTAL INCOME 258,287
EXPENSES
Management fee $ 111,801
Transfer agent 204,904
Fees
Redemption fees (23,445
)
Accounting and security lending fees 24,107
Non-interested trustees' compensation 246
Custodian fees and expenses 3,831
Registration fees 7,301
Audit 9,030
Legal 142
Miscellaneous 525
Total expenses before reductions 338,442
Expense reductions (5,716 332,726
)
NET INVESTMENT INCOME (LOSS) (74,439
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 8,912
Foreign currency transactions (108 8,804
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 3,699,935
Assets and liabilities in 11 3,699,946
foreign currencies
NET GAIN (LOSS) 3,708,750
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,634,311
OTHER INFORMATION $137,749
Sales Charges Paid to FDC
Deferred sales charges withheld $4,150
by FDC
Exchange fees withheld by FSC $16,815
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (74,439 $ (448,078
Net investment income (loss) ) )
Net realized gain (loss) 8,804 (3,125,930
)
Change in net unrealized appreciation (depreciation) 3,699,946 (4,256,876
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,634,311 (7,830,884
)
Share transactions 35,790,761 159,368,155
Net proceeds from sales of shares
Cost of shares redeemed (30,004,051 (173,586,110
) )
Paid in capital portion of redemption fees 27,579 349,164
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 5,814,289 (13,868,791
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 9,448,600 (21,699,675
)
NET ASSETS
Beginning of period 31,090,457 52,790,132
End of period (including accumulated net investment loss of $74,439 and $0, respectively) $ 40,539,057 $ 31,090,457
OTHER INFORMATION
Shares
Sold 1,427,939 6,306,112
Redeemed (1,189,005 (7,124,678
) )
Net increase (decrease) 238,934 (818,566)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.91 $ 24.91 $ 23.87 $ 22.13 $ 17.42 $ 13.94
Income from Investment Operations
Net investment income (loss) (.05) (.18) (.22) (.08) (.03) (.05)
Net realized and unrealized gain (loss) 2.45 (.96) 3.85 2.93 5.09 3.43
Total from investment operations 2.40 (1.14) 3.63 2.85 5.06 3.38
Less Distributions - - (2.63) (1.17) (.50) (.03)
From net realized gain
Redemption fees added to paid in capital .02 .14 .04 .06 .15 .13
Net asset value, end of period $ 26.33 $ 23.91 $ 24.91 $ 23.87 $ 22.13 $ 17.42
TOTAL RETURN B, C 10.12% (4.01)% 15.61% 13.72% 30.28% 25.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 40,539 $ 31,090 $ 52,790 $ 74,878 $ 48,441 $ 18,069
Ratio of expenses to average net assets 1.80% A 1.96% 1.83% 1.77% A 1.87% 2.54%
Ratio of expenses to average net assets before 1.83% A 2.07% 1.86% 1.77% A 1.87% 2.87%
expense reductions
Ratio of net investment income (loss) to average net (.40)% (.74)% (.87)% (.44)% (.13)% (.34)%
assets A A
Portfolio turnover rate 226% A 481% 154% 171% A 205% 115%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE
8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
AIR TRANSPORTATION PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past one year, five years and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
AIR TRANSPORTATION 30.87% 20.65% 116.46% 151.07%
AIR TRANSPORTATION
(INCL. 3% SALES CHARGE) 26.94% 17.03% 109.97% 143.54%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
AIR TRANSPORTATION 20.65% 16.70% 9.94%
AIR TRANSPORTATION
(INCL. 3% SALES CHARGE) 17.03% 15.99% 9.59%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select Air TrStandard & P
12/16/85 9700.00 10000.00
12/31/85 9215.00 10080.42
01/31/86 9961.90 10136.87
02/28/86 10553.60 10895.11
03/31/86 10573.00 11503.06
04/30/86 10388.70 11373.07
05/31/86 10408.10 11978.12
06/30/86 9826.10 12180.55
07/31/86 9234.40 11499.66
08/31/86 9486.60 12352.93
09/30/86 9680.60 11331.35
10/31/86 10194.70 11985.16
11/30/86 10320.80 12276.40
12/31/86 10485.70 11963.36
01/31/87 11426.60 13574.82
02/28/87 11911.60 14111.03
03/31/87 11504.20 14518.83
04/30/87 11513.90 14389.62
05/31/87 12202.60 14514.81
06/30/87 12357.80 15247.80
07/31/87 12629.40 16020.87
08/31/87 12736.10 16618.45
09/30/87 12270.50 16254.50
10/31/87 8565.10 12753.28
11/30/87 7983.10 11702.41
12/31/87 8319.92 12592.97
01/31/88 8552.88 13123.13
02/29/88 9262.84 13734.67
03/31/88 9662.20 13310.27
04/30/88 9551.27 13458.01
05/31/88 9407.05 13575.09
06/30/88 10616.22 14198.19
07/31/88 10305.61 14144.24
08/31/88 9728.76 13663.33
09/30/88 10372.17 14245.39
10/31/88 10571.84 14641.41
11/30/88 10327.79 14432.04
12/31/88 10738.24 14684.60
01/31/89 11736.63 15759.52
02/28/89 11958.50 15367.10
03/31/89 12557.53 15725.16
04/30/89 13056.73 16541.29
05/31/89 13389.52 17211.21
06/30/89 13322.59 17113.11
07/31/89 14260.65 18658.42
08/31/89 15343.87 19024.13
09/30/89 14740.84 18946.13
10/31/89 13579.44 18506.58
11/30/89 13445.43 18884.12
12/31/89 13565.94 19337.33
01/31/90 12169.79 18039.80
02/28/90 12681.71 18272.51
03/31/90 13344.88 18756.73
04/30/90 12856.23 18287.82
05/31/90 13752.09 20070.88
06/30/90 13786.99 19934.40
07/31/90 13368.15 19870.61
08/31/90 11250.65 18074.30
09/30/90 10122.10 17194.08
10/31/90 10657.29 17120.15
11/30/90 10494.40 18226.11
12/31/90 11099.40 18734.62
01/31/91 12414.11 19551.45
02/28/91 13810.26 20949.38
03/31/91 13752.09 21456.35
04/30/91 13414.69 21507.85
05/31/91 14205.84 22436.99
06/30/91 13906.30 21409.37
07/31/91 14333.82 22407.05
08/31/91 14155.69 22938.10
09/30/91 13680.66 22555.03
10/31/91 14345.70 22857.27
11/30/91 13704.41 21936.12
12/31/91 15212.61 24445.61
01/31/92 16091.41 23990.92
02/29/92 16815.82 24302.81
03/31/92 15830.14 23828.90
04/30/92 15010.73 24529.47
05/31/92 15212.61 24649.67
06/30/92 14718.62 24282.39
07/31/92 14634.03 25275.53
08/31/92 14017.73 24757.39
09/30/92 14476.93 25049.52
10/31/92 14996.56 25137.20
11/30/92 15359.08 25994.38
12/31/92 16211.74 26314.11
01/31/93 16358.35 26535.14
02/28/93 16614.90 26896.02
03/31/93 18447.43 27463.53
04/30/93 18655.96 26798.91
05/31/93 19721.67 27517.12
06/30/93 18251.73 27596.92
07/31/93 18876.45 27486.53
08/31/93 20003.40 28528.27
09/30/93 19599.17 28308.61
10/31/93 20726.12 28894.59
11/30/93 20775.12 28620.10
12/31/93 21219.10 28966.40
01/31/94 22038.56 29951.26
02/28/94 21256.35 29139.58
03/31/94 20027.16 27869.09
04/30/94 19895.45 28225.82
05/31/94 19063.73 28688.72
06/30/94 18482.84 27985.85
07/31/94 19446.58 28903.78
08/31/94 20185.90 30088.84
09/30/94 17928.35 29351.66
10/31/94 18073.57 30012.07
11/30/94 16872.19 28919.03
12/31/94 16605.32 29347.90
01/31/95 17139.69 30108.89
02/28/95 18609.18 31282.24
03/31/95 19811.50 32205.38
04/30/95 21401.23 33153.82
05/31/95 21748.56 34478.98
06/30/95 24500.53 35279.93
07/31/95 25328.79 36449.81
08/31/95 24353.58 36541.30
Let's say you invested $10,000 in Fidelity Select Air Transportation
Portfolio on December 16, 1985, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $24,354 - a
143.54% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Delta Air Lines, Inc. 13.6
Continental Airlines, Inc. 12.4
UAL Corp. 6.6
Lufthansa 6.3
KLM Royal Dutch Airlines 5.9
Northwest Airlines Corp. Class A 5.1
Japan Airlines Co. Ltd. 4.8
ValuJet Airlines 4.7
Comair Holdings, Inc. 4.0
AMR Corp. 3.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 6.2
Row: 1, Col: 2, Value: 2.1
Row: 1, Col: 3, Value: 2.3
Row: 1, Col: 4, Value: 3.5
Row: 1, Col: 5, Value: 6.3
Row: 1, Col: 6, Value: 79.59999999999999
Air Transportation,
Major National 82.6%
Air Transportation, Regional 6.3%
Airports & Terminal Services 2.5%
Railroad Equipment 1.3%
Petroleum - Wholesale 1.1%
All Others 6.2%*
* INCLUDES SHORT-TERM INVESTMENTS
AIR TRANSPORTATION PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Jason Weiner,
Portfolio Manager of
Fidelity Select Air
Transportation Portfolio
Q. JASON, HOW DID THE FUND PERFORM?
A. The fund gained 30.87% during the six months ended August 31, 1995. That
outpaced the S&P 500's 16.81% six-month return by a healthy margin. For the
12 months ended August 31, the fund returned 20.65%, while the S&P 500
returned 21.45%.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE STOCK MARKET DURING THE PAST
SIX MONTHS?
A. Airlines experienced a dramatic recovery in domestic revenues.
Continental Airlines dismantled its low-fare experiment, Continental Lite,
which operated on the East Coast. That allowed other carriers such as US
Air and Delta to raise fares, and beginning in May, helped generate the
best revenue growth for the industry in more than two years. There also
were some good things happening on the cost side. Fuel prices remained low
by historical standards, and airlines also benefited from a new $50 cap on
travel agent commissions for each leg of a journey. The cap was first
imposed by Delta, and the other carriers followed. All told, the move
probably will save the industry roughly $500 million annually. Companies
also saw results from cost-cutting initiatives begun in previous periods -
for example, Delta's $2 billion cost reduction program.
Q. WHAT ABOUT DOMESTIC REGIONAL AND INTERNATIONAL CARRIERS?
A. They also performed well. International carriers and some domestic
airlines with overseas routes benefited from strong air traffic over the
Atlantic and to Latin America. In addition, the strong yen was a boost for
carriers with Pacific routes. Like the major airlines, domestic regionals
benefited from less price competition - and some also rolled out jets that
have lower costs and greater passenger acceptance than the turbo props they
replaced.
Q. WHAT WAS YOUR STRATEGY IN THIS ENVIRONMENT?
A. I invested heavily in domestic airlines, especially large hub-and-spoke
carriers - which connect traffic over major hub cities - such as Delta,
Northwest, Continental, American - part of AMR - and United, or UAL. Their
earnings were very depressed in 1994, and they were poised for a fairly
dramatic recovery. I also had heavy investments in large European carriers
such as KLM, Lufthansa and British Air. These three airlines are developing
better cost structures and better international alliances than their
competitors in Europe, and currently are benefiting from the worldwide
aviation recovery. Although these and other foreign investments generally
carry more risk than investing in U.S. stocks, I feel overseas
opportunities are worth the additional risk at this time. I also bought
shares of domestic regionals that have been deploying jets to serve their
markets. Two of my biggest investments among regionals were Comair and
Atlantic Southeast Airlines, which are Delta connection carriers.
Q. THE FUND OWNS SOME AIR FREIGHT CARRIERS, AS WELL. ARE YOU CONCERNED
ABOUT COMPETITION IN THAT INDUSTRY?
A. Asset-based air freight companies - those that own their own planes -
are experiencing strong competitive pressures and making heavy capital
expenditures; I avoided them. But freight forwarders, which rent space on
commercial jets, performed well. The fund owned shares of firms such as Air
Express International, which experienced solid revenue growth and only
modest pricing pressure.
Q. WHAT'S AHEAD FOR THE INDUSTRY IN THE NEXT SIX TO 12 MONTHS?
A. Now that much of the pricing irrationality has been squeezed out of the
system, I find the big question to be the economy. It is likely that
earnings will continue to grow modestly for companies in the sector, but
revenue growth may slowly decelerate. Also, a fuel tax of 4.3 cents per
gallon is set to take effect in October. There is a better-than-even chance
that Congress will grant an exemption to the industry - but if not, the tax
will add around $500 million to the industry's annual costs. Finally,
low-cost, low-fare start-ups such as ValuJet are still a long-term threat
to the industry, especially in a weaker economic environment.
Q. HOW WILL YOU POSITION THE FUND?
A. I recently invested in Air New Zealand and Qantas to increase the fund's
exposure to Asian markets, which have underperformed the U.S. sector
recently. Any improvement in Japan's economy should give a strong boost to
traffic in the region - and in the long run, it appears Asia will continue
to deliver the fastest traffic growth in the world. I plan to continue to
hold domestic companies with strong international markets, such as
Northwest, United and American, as well as firms such as ValuJet and
Southwest, which boast the lowest costs in the industry and can compete
well in a difficult economic environment.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSAIX
SIZE: as of August 31, 1995, more than
$40 million
MANGER: Jason Weiner, since December
1994; equity analyst, biotechnology,
technology and retail products industries,
1993-1994; retail office products since
December 1994; joined Fidelity in 1991
(checkmark)
AIR TRANSPORTATION PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.1%
AIRCRAFT ENGINES & PARTS - 0.2%
Kellstrom Industries, Inc. (a) 18,500 $ 92,500
TRAINING EQUIPMENT & SIMULATORS - 0.9%
Flightsafety International, Inc. 7,600 337,250
TOTAL AEROSPACE & DEFENSE 429,750
AIR TRANSPORTATION - 91.2%
AIR TRANSPORTATION, MAJOR NATIONAL - 82.4%
AMR Corp. (a) 18,800 1,325,400
Air New Zealand Ltd. Class B 147,500 490,881
Atlas Air, Inc. (a) 5,100 109,650
British Airways PLC ADR 10,000 662,500
Braathens Safe 2,200 105,178
Cathay Pacific Airways Ltd. 667,000 1,003,922
Continental Airlines, Inc. (a) 156,000 4,621,500
Delta Air Lines, Inc. 68,000 5,057,500
Finnair OY 19,800 154,717
Japan Airlines Co. Ltd. (a) 272,000 1,769,605
KLM Royal Dutch Airlines 66,500 2,202,813
Lufthansa 15,900 2,343,842
Malaysian Airlines Systems BHD 365,000 1,097,854
Mesa Airlines, Inc. (a) 28,300 300,688
Northwest Airlines Corp. Class A (a) 52,300 1,889,338
Pan Am Corp. (a) 5,900 15
Qantas Airways Ltd. sponsored
ADR (a)(b) 67,500 1,113,750
Singapore International Airlines Ltd. 70,000 591,300
Southwest Airlines Co. 37,300 965,138
Swissair (Reg.) (a) 1,000 631,491
UAL Corp. (a) 15,500 2,441,250
ValuJet Airlines (a) 59,600 1,735,850
30,614,182
AIR TRANSPORTATION, REGIONAL - 6.3%
Atlantic Southeast Airlines, Inc. 33,600 840,000
Comair Holdings, Inc. 59,475 1,501,744
2,341,744
AIRPORTS & TERMINAL SERVICES - 2.5%
Kobenhaven Lufthave AS 12,700 924,811
TOTAL AIR TRANSPORTATION 33,880,737
AUTOS, TIRES, & ACCESSORIES - 1.1%
PETROLEUM - WHOLESALE - 1.1%
Mercury Air Group 50,260 402,080
RAILROADS - 1.3%
RAILROAD EQUIPMENT - 1.3%
Bombardier, Inc. Class B 38,800 472,745
SERVICES - 1.1%
TRAVEL AGENCIES - 1.1%
His Co. Ltd. (a) 9,000 390,662
SHARES VALUE (NOTE 1)
TRUCKING & FREIGHT - 0.5%
FREIGHT FORWARDING - 0.5%
Air Express International Corp. (a) 4,000 $ 91,000
Harper Group 5,200 93,600
184,600
TOTAL COMMON STOCKS
(Cost $32,201,854) 35,760,574
NONCONVERTIBLE BONDS - 0.2%
PRINCIPAL
AMOUNT
AIR TRANSPORTATION - 0.2%
AIR TRANSPORTATION, MAJOR NATIONAL - 0.2%
AMR Corp. 9 1/2%, 7/15/98
(Cost $79,922) $ 80,000 85,341
REPURCHASE AGREEMENTS - 3.5%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 1,312,212 1,312,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $33,593,776) $ 37,157,915
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,113,750 or 2.7% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $157,363,669 and $154,828,325, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $54,006 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the
periods for which loans were outstanding amounted to $31,185,000 and
$4,654,417, respectively. The weighted average interest rate paid was 6.2%
(see Note 6 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 62.4%
Germany 6.3
Netherlands 5.9
Japan 5.8
Australia 3.0
Malaysia 3.0
Hong Kong 2.7
Denmark 2.5
United Kingdom 1.8
Switzerland 1.7
Singapore 1.6
New Zealand 1.3
Canada 1.3
Others (individually less than 1%) 0.7
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $33,593,776. Net unrealized appreciation aggregated
$3,564,139, of which $4,436,848 related to appreciated investment
securities and $872,709 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$996,000 of losses recognized during the period November 1, 1994 to
February 28, 1995.
AIR TRANSPORTATION PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $1,312,000) (cost $33,593,776) - See $ 37,157,915
accompanying schedule
Cash 129
Receivable for investments sold 9,276,387
Receivable for fund shares sold 121,668
Dividends receivable 22,076
Interest receivable 950
Redemption fees receivable 1,747
Other receivables 510
Prepaid expenses 21,538
TOTAL ASSETS 46,602,920
LIABILITIES
Payable for fund shares redeemed $ 5,672,025
Accrued management fee 34,541
Other payables and accrued expenses 59,829
TOTAL LIABILITIES 5,766,395
NET ASSETS $ 40,836,525
Net Assets consist of:
Paid in capital $ 24,846,781
Undistributed net investment income 115,601
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 12,310,043
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 3,564,100
NET ASSETS, for 2,239,972 shares outstanding $ 40,836,525
NET ASSET VALUE and redemption price per share ($40,836,525 (divided by) 2,239,972 shares) $18.23
Maximum offering price per share (100/97.00 of $18.23) $18.79
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 427,829
Dividends
Interest 153,023
TOTAL INCOME 580,852
EXPENSES
Management fee $ 221,864
Transfer agent 208,842
Fees
Redemption fees (73,686
)
Accounting fees and expenses 37,861
Non-interested trustees' compensation 112
Custodian fees and expenses 24,898
Registration fees 25,216
Audit 8,148
Legal 51
Interest 19,386
Miscellaneous 502
Total expenses before reductions 473,194
Expense reductions (7,943 465,251
)
NET INVESTMENT INCOME 115,601
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 13,424,000
Foreign currency transactions (1,949 13,422,051
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 2,812,900
Assets and liabilities in (39 2,812,861
foreign currencies )
NET GAIN (LOSS) 16,234,912
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 16,350,513
OTHER INFORMATION $489,284
Sales Charges Paid to FDC
Deferred sales charges withheld $781
by FDC
Exchange fees withheld by FSC $58,073
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 115,601 $ (123,112
Net investment income (loss) )
Net realized gain (loss) 13,422,051 (856,081
)
Change in net unrealized appreciation (depreciation) 2,812,861 121,242
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 16,350,513 (857,951
)
Distributions to shareholders - (527,219
From net realized gain )
In excess of net realized gain - (98,627
)
TOTAL DISTRIBUTIONS - (625,846
)
Share transactions 211,857,002 30,972,770
Net proceeds from sales of shares
Reinvestment of distributions - 593,907
Cost of shares redeemed (206,317,509 (22,544,984
) )
Paid in capital portion of redemption fees 313,788 60,093
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 5,853,281 9,081,786
TOTAL INCREASE (DECREASE) IN NET ASSETS 22,203,794 7,597,989
NET ASSETS
Beginning of period 18,632,731 11,034,742
End of period (including undistributed net investment income of $115,601 and $0, respectively) $ 40,836,525 $ 18,632,731
OTHER INFORMATION
Shares
Sold 12,350,014 2,243,732
Issued in reinvestment of distributions - 41,090
Redeemed (11,447,497 (1,592,005
) )
Net increase (decrease) 902,517 692,817
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.93 $ 17.12 $ 13.60 $ 12.64 $ 11.53 $ 11.05
Income from Investment Operations
Net investment income (loss) .03 (.18) (.18) (.09) E (.13) (.04)
Net realized and unrealized gain (loss) 4.19 (2.01) 3.78 1.33 1.40 .38
Total from investment operations 4.22 (2.19) 3.60 1.24 1.27 .34
Less Distributions - (.92) (.22) (.36) (.25) -
From net realized gain
In excess of net realized gain - (.17) (.05) - - -
Total distributions - (1.09) (.27) (.36) (.25) -
Redemption fees added to paid in capital .08 .09 .19 .08 .09 .14
Net asset value, end of period $ 18.23 $ 13.93 $ 17.12 $ 13.60 $ 12.64 $ 11.53
TOTAL RETURN B, C 30.87% (12.45)% 27.94% 10.69% 11.90% 4.34%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 40,837 $ 18,633 $ 11,035 $ 11,868 $ 6,971 $ 4,372
Ratio of expenses to average net assets 1.28% A 2.50% 2.31% 2.48% A 2.51% 2.48%
Ratio of expenses to average net assets before 1.30% A 2.88% 2.33% 2.64% A 3.06% 3.03%
expense reductions
Ratio of net investment income (loss) to average net .32% A (1.31)% (1.11)% (.90)% (1.04)% (.34)%
assets A
Portfolio turnover rate 494% A 200% 171% 96% A 261% 106%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.01 PER SHARE.
</TABLE>
AUTOMOTIVE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
AUTOMOTIVE 10.18% 7.33% 152.59% 210.25%
AUTOMOTIVE
(INCL. 3% SALES CHARGE) 6.88% 4.11% 145.01% 200.94%
S&P 500 16.81% 21.45% 102.17% 201.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 30, 1986. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
AUTOMOTIVE 7.33% 20.36% 13.13%
AUTOMOTIVE
(INCL. 3% SALES CHARGE) 4.11% 19.63% 12.75%
S&P 500 21.45% 15.12% 12.78%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select AutomotiStandard & Poo
06/30/86 9700.00 10000.00
07/31/86 9176.20 9488.77
08/31/86 9603.00 10192.84
09/30/86 8943.40 9349.89
10/31/86 9399.30 9889.38
11/30/86 9506.00 10129.69
12/31/86 9341.10 9871.39
01/31/87 10747.60 11201.06
02/28/87 11707.90 11643.50
03/31/87 12028.00 11980.00
04/30/87 12202.60 11873.38
05/31/87 12183.20 11976.68
06/30/87 12367.50 12581.50
07/31/87 13230.80 13219.38
08/31/87 13744.90 13712.46
09/30/87 13541.20 13412.16
10/31/87 9476.90 10523.18
11/30/87 9098.60 9656.07
12/31/87 9952.20 10390.90
01/31/88 10402.71 10828.35
02/29/88 11068.24 11332.96
03/31/88 11866.87 10982.77
04/30/88 12071.65 11104.68
05/31/88 12030.69 11201.29
06/30/88 12726.94 11715.43
07/31/88 12583.59 11670.91
08/31/88 11999.98 11274.10
09/30/88 12051.17 11754.37
10/31/88 11959.02 12081.14
11/30/88 11703.05 11908.38
12/31/88 11948.78 12116.78
01/31/89 12501.68 13003.73
02/28/89 12368.58 12679.94
03/31/89 12604.07 12975.38
04/30/89 13167.21 13648.80
05/31/89 13361.75 14201.58
06/30/89 13126.26 14120.63
07/31/89 13587.01 15395.72
08/31/89 13720.11 15697.48
09/30/89 13402.71 15633.12
10/31/89 12286.67 15270.43
11/30/89 12399.29 15581.95
12/31/89 12438.82 15955.91
01/31/90 12110.37 14885.27
02/28/90 12470.61 15077.29
03/31/90 12936.80 15476.84
04/30/90 12894.42 15089.92
05/31/90 13625.49 16561.19
06/30/90 13869.48 16448.57
07/31/90 13912.45 16395.93
08/31/90 11914.22 14913.74
09/30/90 10775.44 14187.44
10/31/90 10560.57 14126.44
11/30/90 11183.68 15039.00
12/31/90 11602.66 15458.59
01/31/91 12258.00 16132.59
02/28/91 13257.12 17286.07
03/31/91 13364.55 17704.39
04/30/91 13514.95 17746.88
05/31/91 14600.02 18513.55
06/30/91 14567.79 17665.63
07/31/91 15169.41 18488.84
08/31/91 15663.59 18927.03
09/30/91 15201.64 18610.95
10/31/91 15599.14 18860.33
11/30/91 14825.62 18100.26
12/31/91 15933.39 20170.93
01/31/92 17654.69 19795.75
02/29/92 19432.62 20053.10
03/31/92 19851.62 19662.06
04/30/92 21119.95 20240.13
05/31/92 21108.62 20339.30
06/30/92 20983.04 20036.25
07/31/92 21175.86 20855.73
08/31/92 19860.16 20428.19
09/30/92 19531.24 20669.24
10/31/92 20347.88 20741.58
11/30/92 21334.65 21448.87
12/31/92 22564.01 21712.69
01/31/93 23605.96 21895.08
02/28/93 23953.28 22192.85
03/31/93 25238.35 22661.12
04/30/93 25092.53 22112.72
05/31/93 26620.52 22705.34
06/30/93 27086.08 22771.19
07/31/93 27396.46 22680.10
08/31/93 28351.45 23539.68
09/30/93 28649.89 23358.43
10/31/93 29258.70 23841.94
11/30/93 29258.70 23615.45
12/31/93 30548.19 23901.19
01/31/94 32289.60 24713.83
02/28/94 31247.21 24044.09
03/31/94 29052.05 22995.77
04/30/94 28461.32 23290.11
05/31/94 28039.67 23672.07
06/30/94 27680.03 23092.10
07/31/94 28510.92 23849.53
08/31/94 28039.67 24827.36
09/30/94 26849.13 24219.09
10/31/94 27357.59 24764.01
11/30/94 25708.20 23862.11
12/31/94 26652.41 24215.98
01/31/95 26019.14 24843.91
02/28/95 27313.22 25812.07
03/31/95 27175.55 26573.79
04/30/95 27092.95 27356.38
05/31/95 27643.62 28449.82
06/30/95 28331.96 29110.71
07/31/95 30369.43 30076.02
08/31/95 30094.10 30151.51
Let's say you invested $10,000 in Select Automotive Portfolio on June 30,
1986, when the fund started, and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $30,094 - a 200.94% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$30,152 over the same period - a 201.52% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Echlin, Inc. 7.9
Magna International, Inc. Class A 6.2
General Motors Corp. 5.5
Genuine Parts Co. 4.6
Exide Corp. 4.1
Michelin SA Cie Generale des Etablissements, Class B 3.9
Lear Seating Corp. 3.8
Chrysler Corp. 3.7
Gentex Corp. 3.4
Dana Corp. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1995
Durables 80.8%
Industrial Machinery &
Equment 8.4%
Auto & Truck Parts 45.7%
Motor Vehicles &
Car Bodies 14.7%
Tires & Inner Tubes 8.2%
Autos & Other Motor
Vehicles 4.6%
Storage batteries 4.1%
All Others 22.7%*
Row: 1, Col: 1, Value: 22.7
Row: 1, Col: 2, Value: 4.1
Row: 1, Col: 3, Value: 4.6
Row: 1, Col: 4, Value: 8.199999999999999
Row: 1, Col: 5, Value: 14.7
Row: 1, Col: 6, Value: 45.7
* INCLUDES SHORT-TERM INVESTMENTS
AUTOMOTIVE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Brenda Reed,
Portfolio Manager
of Fidelity Select Automotive Portfolio
Q. BRENDA, HOW DID THE FUND PERFORM?
A. For the six months and year ended August 31, 1995, the fund returned
10.18% and 7.33%, respectively. It lagged the S&P 500, which - helped by
technology stocks - returned 16.81% and 21.45% for the same periods.
Q. WHAT DROVE THE AUTO SECTOR'S RECENT RESULTS?
A. As usual, the economy. In 1994 and early 1995, auto stocks did poorly as
the Federal Reserve raised interest rates and dimmed the prospects for new
auto sales. As people held onto their old cars, the after-market companies
- - which make and supply replacement parts - did well. By May 1995, the
economy had slowed. It seemed likely that the Fed would lower rates to
stimulate the economy, boosting demand and therefore improving sales and
earnings. So the stocks of original equipment suppliers and the Big Three
started looking more attractive. These companies did well for the rest of
the period. Fortunately, I rotated the fund toward those areas last spring,
which helped performance over the summer.
Q. BESIDE THE ECONOMY, WHAT HELPED THE AUTO SUPPLIERS?
A. Three trends. First, the Big Three are outsourcing a lot of their work
to cut costs. Second, they're also consolidating the number of suppliers
they use, so the good companies are getting bigger. Third, suppliers are
merging to sell entire systems to the car manufacturers. That's what
recently happened with Lear Seating and Automotive Industries, two of the
fund's top performers. Lear makes car seats, and Automotive makes interior
trim like side panels and door moldings. Once Lear bought out Automotive,
it could supply almost the entire interior of a car. Automotive's stock
rose 70% before being acquired; while Lear's was up 37% over the six-month
period. Some of the fund's other top performers were also suppliers: Dana,
which makes large chassis parts for light trucks; Tower Automotive, which
does metal stampings for the sides of cars; and Magna International, which
also makes metal stampings, as well as interior and engine parts.
Q. WHAT HAPPENED WITH THE BIG THREE AUTO MAKERS?
A. Both General Motors and Chrysler, which were among the fund's top 10
stocks, did well. Chrysler recovered from a difficult new minivan launch,
announced a $2 billion share repurchase program and raised its dividend. GM
continued with its restructuring, which has the potential to yield benefits
soon. Over the next few years, I believe GM has the best prospects for
improving its profit margins through lower costs. On the other hand, the
fund owned very little Ford, whose higher than average development costs
have hurt profits.
Q. WHERE WERE THE DISAPPOINTMENTS?
A. In the after-market business. Although after-market parts aren't as tied
into the economic cycle, they do slow some with consumer purchasing.
Historically, the industry as a whole has increased sales about 2% to 3%
per year, but this year it's been about flat. As a result, companies like
Pep Boys had modestly disappointing earnings, and their stocks were flat or
down slightly. Tire companies like Cooper Tire and Rubber also had
disappointing results, as rising raw materials prices hurt their profit
margins. But there were also some pretty good performers like Exide, which
benefited as the hot summer increased sales for replacement batteries.
Echlin, which makes replacement brakes and emission control parts, was
another exception as it increased earnings through acquisitions.
Q. DO YOU SEE MUCH OPPORTUNITY OVERSEAS?
A. I do. While the U.S. came out its recession in 1992, Europe just started
coming out of its recession last year. And Japan may be about to turn the
corner. So in both places we may be at the beginning of a rebound tied to
the economy. That would mean they would have much higher demand in front of
them. Plus, if the dollar strengthened, it would give an added boost to
their U.S. sales. Recently, I've added selectively to some European and
Japanese companies, including Peugeot, Volvo, Volkswagen, Michelin and
Toyota.
Q. WHAT WILL YOU DO IF THE ECONOMY AND AUTO SALES DON'T PICK UP?
A. If it looked like the U.S. economy were going into a recession, I'd
concentrate more on the after-market suppliers. But that's not what I
expect. I believe lower interest rates will help demand to pick up later
this year or early next year. If that happens, we should see better
earnings growth, which would cause the Big Three and original equipment
suppliers stocks to perform quite well.
FUND FACTS
START DATE: June 30, 1986
TRADING SYMBOL: FSAVX
SIZE: as of August 31, 1995, more than
$67 million
MANAGER: Brenda Reed, since May 1994;
manager, Fidelity Select Air Transportation
Portfolio, 1992-1994; joined Fidelity in 1992
(checkmark)
AUTOMOTIVE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 86.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.1%
MISSILES & SPACE VEHICLES - 0.1%
Special Devices, Inc. (a) 4,800 $ 85,200
AUTOS, TIRES, & ACCESSORIES - 79.1%
AUTO & TRUCK PARTS - 45.7%
Borg-Warner Automotive, Inc. 60,000 1,785,000
Dana Corp. 71,800 2,145,025
Danaher Corp. 63,400 2,092,200
Donnelly Corp. Class A 33,000 528,000
Echlin, Inc. 155,000 5,347,500
Federal-Mogul Corp. 30,000 667,500
Gentex Corp. (a) 93,000 2,278,500
Harvard Industries, Inc. Class B (a) 30,000 735,000
Intermet Corp. (a) 45,000 500,625
Johnson Controls, Inc. 22,700 1,381,863
Lear Seating Corp. (a) 89,700 2,567,663
Magna International, Inc. Class A 93,500 4,174,263
Mascotech, Inc. 26,700 350,438
Masland Corp. 30,000 435,000
SPX Corp. 200 3,025
Smith (A.O.) Corp. Class B 66,600 1,656,675
Snap-on Tools Corp. 40,200 1,648,200
Titan Wheel International, Inc. 33,000 588,500
Tower Automotive (a) 132,500 1,722,500
Valeo SA 6,000 286,615
30,894,092
AUTO PARTS - RETAIL - 3.4%
Autozone, Inc. (a) 18,100 486,438
Monro Muffler Brake, Inc. 105,430 1,607,808
Pep Boys-Manny, Moe & Jack 7,600 209,000
2,303,246
AUTOS & OTHER MOTOR VEHICLES - 4.6%
Genuine Parts Co. 78,200 3,079,125
MOTOR VEHICLE SUPPLIES & NEW PARTS - 2.5%
APS Holding Corp. Class A (a) 64,000 1,664,000
MOTOR VEHICLES & CAR BODIES - 14.7%
Chrysler Corp. 46,300 2,494,413
Daimier Benz AG. Ord. 600 296,526
Ford Motor Co. 20,000 612,500
General Motors Corp. 78,823 3,704,681
Hyundai Motor Co. GDR Tranche
#2 (a)(b) 5,500 90,750
Peugeot SA Ord. 6,700 886,159
Suzuki Motor Corp. 21,000 245,665
Toyota Motor Corp. 12,000 238,892
Volkswagen AG 2,200 673,188
Volvo AB Class B 35,000 694,582
9,937,356
TIRES & INNER TUBES - 8.2%
Bandag, Inc. 26,700 1,585,313
Cooper Tire & Rubber Co. 29,300 761,800
Goodyear Tire & Rubber Co. 15,500 620,000
Michelin SA Cie Generale
des Etablissements, Class B 60,000 2,605,592
5,572,705
TOTAL AUTOS, TIRES, & ACCESSORIES 53,450,524
SHARES VALUE (NOTE 1)
CHEMICALS & PLASTICS - 0.4%
CHEMICALS - 0.4%
Quaker State Corp. 20,000 $ 300,000
COMMUNICATIONS EQUIPMENT - 1.2%
DATACOMMUNICATIONS EQUIPMENT - 1.2%
Lo Jack Corp. (a) 60,000 780,000
ELECTRICAL EQUIPMENT - 0.1%
Satcon Technology Corp. (a) 5,000 62,500
INDUSTRIAL MACHINERY & EQUIPMENT - 4.9%
METAL WORKING MACHINERY - 0.8%
Exco Technologies Ltd. (a) 79,500 517,597
STORAGE BATTERIES - 4.1%
Exide Corp. 53,400 2,783,475
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 3,301,072
IRON & STEEL - 0.8%
METAL FORGINGS & STAMPINGS - 0.8%
Linamar Corp. 35,000 540,380
TOTAL COMMON STOCKS
(Cost $54,919,676) 58,519,676
REPURCHASE AGREEMENTS - 13.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 9,100,471 9,099,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $64,018,676) $ 67,618,676
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $90,750 or 0.1% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $22,678,080 and $28,122,163, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $17,892 for the period
(see Note 5 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 82.8%
Canada 7.7
France 5.6
Germany 1.4
Sweden 1.0
Others (individually less than 1%) 1.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $64,556,063. Net unrealized appreciation aggregated
$3,062,613, of which $4,775,834 related to appreciated investment
securities and $1,713,221 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$3,944,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
AUTOMOTIVE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $9,099,000) (cost $64,018,676) - See $ 67,618,676
accompanying schedule
Cash 927
Receivable for investments sold 472,903
Receivable for fund shares sold 374,128
Dividends receivable 73,520
Redemption fees receivable 161
Prepaid expenses 6,810
TOTAL ASSETS 68,547,125
LIABILITIES
Payable for fund shares redeemed $ 507,699
Accrued management fee 35,724
Other payables and accrued expenses 93,873
TOTAL LIABILITIES 637,296
NET ASSETS $ 67,909,829
Net Assets consist of:
Paid in capital $ 68,052,773
Undistributed net investment income 44,293
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (3,787,253
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 3,600,016
NET ASSETS, for 3,106,474 shares outstanding $ 67,909,829
NET ASSET VALUE and redemption price per share ($67,909,829 (divided by) 3,106,474 shares) $21.86
Maximum offering price per share (100/97.00 of $21.86) $22.54
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 413,556
Dividends
Interest 163,870
TOTAL INCOME 577,426
EXPENSES
Management fee $ 176,252
Transfer agent 347,123
Fees
Redemption fees (43,914
)
Accounting fees and expenses 28,915
Non-interested trustees' compensation 499
Custodian fees and expenses 8,413
Registration fees 7,890
Audit 9,930
Legal 279
Miscellaneous 731
Total expenses before reductions 536,118
Expense reductions (3,445 532,673
)
NET INVESTMENT INCOME 44,753
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 777,135
Foreign currency transactions 707 777,842
Change in net unrealized appreciation (depreciation) on:
Investment securities 3,951,276
Assets and liabilities in 16 3,951,292
foreign currencies
NET GAIN (LOSS) 4,729,134
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,773,887
OTHER INFORMATION $161,613
Sales Charges Paid to FDC
Deferred sales charges withheld $1,665
by FDC
Exchange fees withheld by FSC $33,510
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 44,753 $ 346,115
Net investment income
Net realized gain (loss) 777,842 11,541,717
Change in net unrealized appreciation (depreciation) 3,951,292 (31,661,358
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,773,887 (19,773,526
)
Distributions to shareholders - (154,502
From net investment income )
From net realized gain - (7,650,364
)
TOTAL DISTRIBUTIONS - (7,804,866
)
Share transactions 54,136,239 91,986,801
Net proceeds from sales of shares
Reinvestment of distributions - 7,692,677
Cost of shares redeemed (51,137,380 (240,957,682
) )
Paid in capital portion of redemption fees 61,865 233,563
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 3,060,724(141,044,641
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 7,834,611(168,623,033
)
NET ASSETS
Beginning of period 60,075,218 228,698,251
End of period (including undistributed net investment income of $44,293 and $165,781, respectively) $ 67,909,829 $ 60,075,218
OTHER INFORMATION
Shares
Sold 2,588,456 4,119,242
Issued in reinvestment of distributions - 397,089
Redeemed (2,510,567 (10,463,135
) )
Net increase (decrease) 77,889 (5,946,804)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.84 $ 25.48 $ 20.69 $ 18.65 $ 12.58 $ 12.17
Income from Investment Operations
Net investment income .02 .08 .05 .13 .06 .25
Net realized and unrealized gain (loss) 1.98 (3.46) 6.00 2.26 6.55 .29
Total from investment operations 2.00 (3.38) 6.05 2.39 6.61 .54
Less Distributions - (.05) (.05) (.06) - (.18)
From net investment income
From net realized gain - (2.26) (1.26) (.36) (.70) -
Total distributions - (2.31) (1.31) (.42) (.70) (.18)
Redemption fees added to paid in capital .02 .05 .05 .07 .16 .05
Net asset value, end of period $ 21.86 $ 19.84 $ 25.48 $ 20.69 $ 18.65 $ 12.58
TOTAL RETURN B, C 10.18% (12.59)% 30.45% 13.42% 56.27% 4.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 67,910 $ 60,075 $ 228,698 $ 110,360 $ 178,445 $ 974
Ratio of expenses to average net assets 1.82% A 1.80% 1.68% 1.57% A 2.48% 2.25%
Ratio of expenses to average net assets before 1.84% A 1.82% 1.69% 1.57% A 2.48% 2.85%
expense reductions
Ratio of net investment income to average net assets .15% A .34% .22% .72% A .36% 2.06%
Portfolio turnover rate 84% A 63% 64% 140% A 29% 219%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
CHEMICALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five and 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
CHEMICALS 13.72% 9.91% 145.02% 446.53%
CHEMICALS
(INCL. 3% SALES CHARGE) 10.31% 6.61% 137.67% 430.14%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
CHEMICALS 9.91% 19.63% 18.51%
CHEMICALS
(INCL. 3% SALES CHARGE) 6.61% 18.90% 18.15%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select ChemicaStandard & Poor
08/31/85 9700.00 10000.00
09/30/85 9709.43 9687.00
10/31/85 10331.58 10134.54
11/30/85 10982.02 10829.77
12/31/85 11679.59 11353.93
01/31/86 12179.20 11417.51
02/28/86 13583.77 12271.54
03/31/86 14309.62 12956.29
04/30/86 14366.18 12809.89
05/31/86 14771.53 13491.37
06/30/86 15129.74 13719.38
07/31/86 14139.16 12952.46
08/31/86 15189.66 13913.54
09/30/86 13987.73 12762.89
10/31/86 14839.49 13499.31
11/30/86 15095.02 13827.34
12/31/86 14820.56 13474.74
01/31/87 16798.53 15289.79
02/28/87 18360.08 15893.74
03/31/87 18918.46 16353.07
04/30/87 19334.87 16207.52
05/31/87 19079.35 16348.53
06/30/87 20148.77 17174.13
07/31/87 21464.26 18044.86
08/31/87 22249.77 18717.93
09/30/87 22647.26 18308.01
10/31/87 15757.50 14364.46
11/30/87 15227.51 13180.83
12/31/87 17017.51 14183.89
01/31/88 16600.14 14781.03
02/29/88 18440.38 15469.83
03/31/88 19379.47 14991.81
04/30/88 19607.13 15158.22
05/31/88 18867.24 15290.10
06/30/88 21362.00 15991.91
07/31/88 20716.97 15931.15
08/31/88 19815.82 15389.49
09/30/88 20062.45 16045.08
10/31/88 20375.48 16491.13
11/30/88 19692.51 16255.31
12/31/88 20584.17 16539.78
01/31/89 21959.61 17750.49
02/28/89 21684.52 17308.50
03/31/89 21921.67 17711.79
04/30/89 22547.73 18631.03
05/31/89 23069.45 19385.59
06/30/89 22794.00 19275.09
07/31/89 24246.52 21015.63
08/31/89 25357.26 21427.54
09/30/89 24455.37 21339.68
10/31/89 22727.55 20844.60
11/30/89 23211.72 21269.83
12/31/89 24147.56 21780.31
01/31/90 22427.02 20318.85
02/28/90 22577.07 20580.96
03/31/90 23247.28 21126.36
04/30/90 22707.11 20598.20
05/31/90 24687.73 22606.52
06/30/90 24889.24 22452.80
07/31/90 24971.59 22380.95
08/31/90 21636.55 20357.71
09/30/90 20566.05 19366.29
10/31/90 20802.79 19283.02
11/30/90 22192.39 20528.70
12/31/90 23149.67 21101.45
01/31/91 24703.96 22021.47
02/28/91 26597.93 23596.01
03/31/91 27236.12 24167.03
04/30/91 27019.96 24225.03
05/31/91 28893.34 25271.56
06/30/91 28108.11 24114.12
07/31/91 29462.85 25237.84
08/31/91 30041.97 25835.97
09/30/91 29814.46 25404.51
10/31/91 30290.16 25744.93
11/30/91 28780.31 24707.41
12/31/91 32099.72 27533.94
01/31/92 32716.21 27021.81
02/29/92 33896.03 27373.09
03/31/92 33651.56 26839.32
04/30/92 34873.90 27628.39
05/31/92 34671.95 27763.77
06/30/92 33644.23 27350.09
07/31/92 34705.85 28468.71
08/31/92 33520.00 27885.10
09/30/92 33553.88 28214.15
10/31/92 33215.07 28312.90
11/30/92 34220.21 29278.37
12/31/92 34958.12 29638.49
01/31/93 34922.15 29887.45
02/28/93 34310.75 30293.92
03/31/93 35125.96 30933.12
04/30/93 35777.47 30184.54
05/31/93 36319.18 30993.49
06/30/93 35408.12 31083.37
07/31/93 35949.83 30959.04
08/31/93 37710.39 32132.38
09/30/93 36516.17 31884.96
10/31/93 37895.06 32544.98
11/30/93 38178.23 32235.80
12/31/93 39417.75 32625.86
01/31/94 42485.96 33735.14
02/28/94 42418.97 32820.92
03/31/94 41146.13 31389.92
04/30/94 43135.92 31791.71
05/31/94 44174.53 32313.10
06/30/94 43621.51 31521.43
07/31/94 45590.81 32555.33
08/31/94 48234.54 33890.10
09/30/94 47883.84 33059.79
10/31/94 47802.91 33803.64
11/30/94 44053.14 32572.51
12/31/94 45241.86 33055.56
01/31/95 44059.60 33912.69
02/28/95 46616.57 35234.27
03/31/95 48046.28 36274.03
04/30/95 49076.24 37342.30
05/31/95 49564.91 38834.87
06/30/95 50402.62 39737.01
07/31/95 52790.12 41054.68
08/31/95 53013.51 41157.73
Let's say you invested $10,000 in Fidelity Select Chemicals Portfolio on
August 31, 1985 and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $53,014 - a 430.14% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Grace (W.R.) & Co. 8.2
Cytec Industries, Inc. 5.8
Hercules, Inc. 5.7
du Pont (E.I.) de Nemours & Co. 5.3
Ferro Corp. 5.2
Hanna (M.A.) Co. 4.2
Airgas, Inc. 3.8
Agrium, Inc. 3.6
Albemarle Corp. 3.4
Sigma Aldrich Corp. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 28.0
Row: 1, Col: 2, Value: 4.8
Row: 1, Col: 3, Value: 6.1
Row: 1, Col: 4, Value: 10.1
Row: 1, Col: 5, Value: 12.3
Row: 1, Col: 6, Value: 38.7
Chemicals 38.7%
Adhesives & Sealants 12.3%
Agricultural Chemicals 10.1%
Plastics 6.1%
Chemicals, General 4.8%
All Others 28%*
* INCLUDES SHORT-TERM INVESTMENTS
CHEMICALS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Avery, Portfolio Manager of Fidelity Select
Chemicals Portfolio
Q. JOHN, HOW HAS THE FUND DONE?
A. The fund returned 13.72% and 9.91% for the six months and year ended
August 31, 1995. By comparison, the S&P 500 - spurred by strong performance
in the technology sector - returned 16.81% and 21.45% for the same two
periods.
Q. WHAT HAPPENED WITH CHEMICALS OVER THE PAST SIX MONTHS?
A. Diversified chemical companies were the best performers, followed by
specialty chemical companies. Commodity chemical companies, however, lagged
considerably. These are the companies that supply raw materials like
ethylene and methanol, which - in terms of chemicals - are the basic
building blocks of industry. Typically, when the economy is strong,
commodity chemical companies make a lot of money because their products are
in high demand, and they can raise prices. When that happens, they often
add new plants to increase supply. But once the economy starts to slow,
this extra capacity can drive prices down. The expectation that this
eventually will happen can hurt stock prices. As a result, I sold commodity
companies like Dow Chemical and Eastman Chemical.
Q. SO HAVE YOU SHIFTED THE FUND'S FOCUS TOWARD DIVERSIFIED AND SPECIALTY
COMPANIES?
A. Yes. Among the fund's larger investments were W.R. Grace, Cytec, and du
Pont - all diversified companies, which have been top contributors to
performance. Business has been strong for each and earnings have been
growing nicely. Plus, they're all currently going through major
restructurings, which have the potential to increase their values
significantly.
Q. WHAT MAKES SPECIALTY CHEMICAL COMPANIES LOOK GOOD?
A. Historically investors have bid up the prices of specialty chemical
stocks late in the economic cycle. These are companies that provide
technological services, such as chemical treatment systems to clean the
water used in cooling power plants. They typically have steady earnings
growth. But as the economy strengthens and demand rises, many of the
companies that use their services start running at near capacity. To
improve production efficiency and insure that their machines don't break
down, they increase the amount of chemicals used in their processes. This
means more business for the specialty chemical companies. In addition, the
specialty companies benefit from lower commodity chemical costs, since
these are their raw materials.
Q. WHICH COMPANIES FALL INTO THE SPECIALTY CHEMICALS CATEGORY?
A. Among the fund's largest investments were Hercules, Ferro, Hanna, and
Albemarle. Ferro and Albemarle are both companies whose profit margins have
been squeezed as ethylene prices have risen over the last year. But if
those prices continue to fall - as they've already started to - their
profit margins should improve. In addition, both Ferro and Hanna, which
make resins, are big in Europe, where the economy is still very strong. So
if things slow in the U.S., they still could have solid sales and earnings
growth from Europe. Hercules - one of the fund's top performers - is a
reorganization story with a management team whose number one goal has been
to provide high returns to shareholders.
Q. WHAT OTHER CHANGES HAVE YOU MADE TO THE FUND SINCE TAKING OVER?
A. I've cut the number of stocks in the fund from about 120 to 52, so I can
have bigger investments in the names I really believe in. Plus, in August I
started increasing my stake in fertilizer stocks with Agrium being the
largest. Right now, it looks like U.S. crop yields will be poor because of
floods and drought. If that's the case, the government probably will allow
farmers to grow more crops or plant more of their acreage next year. That
would mean they'd need more fertilizer, which would push up product prices
and help earnings grow.
Q. WHAT HURT PERFORMANCE?
A. Probably having as much in commodity chemical companies as we did early
in the period. These stocks were up, but not nearly as much as the
diversified and specialty companies. There were also some disappointments
like Geon, which makes the PVC plastic that goes in pipes, and Image
Industries, which recycles plastic bottles.
Q. SO WHERE DO YOU GO FROM HERE?
A. I'm optimistic. With its focus on diversified and specialty companies,
the fund is in a good position to benefit from flat or slow economic growth
in the U.S. I also expect economies abroad to grow faster than here, which
is why I like companies with earnings outside the U.S. Only a very strong
economy would cause me to shift back toward commodity chemical companies.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FSCHX
SIZE: as of August 31, 1995, more than
$75 million
MANAGER: John Avery, since July 1995; equity
analyst, specialty chemicals, since January
1995; joined Fidelity in December 1994
(checkmark)
CHEMICALS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.3%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 0.5%
PAINT & VARNISH - 0.5%
Dexter Corp. 15,200 $ 376,200
CHEMICALS & PLASTICS - 85.6%
ADHESIVES & SEALANTS - 12.3%
Arcadian Corp. (a) 42,000 782,250
Ferro Corp. 142,200 3,839,400
Fuller (H.B.) Co. 26,701 914,509
International Specialty Products, Inc. 105,000 931,875
Loctite Corp. 9,400 451,200
Nalco Chemical Co. 62,700 2,194,500
9,113,734
AGRICULTURAL CHEMICALS - 10.1%
Agrium, Inc. 78,600 2,690,278
First Mississippi Corp. 25,500 844,688
IMC Fertilizer Group, Inc. 6,000 379,500
OM Group, Inc. 45,000 1,350,000
Potash Corp. of Saskatchewan 13,400 755,274
Terra Industries, Inc. 43,900 587,163
Vigoro Corp. (a) 19,700 866,800
7,473,703
CHEMICALS - 38.7%
AKZO NV sponsored ADR 10,000 590,000
Cabot Corp. 10,000 481,250
Cytec Industries, Inc. (a) 71,271 4,311,896
du Pont (E.I.) de Nemours & Co. 59,900 3,915,963
Engelhard Corp. 25,000 706,250
Grace (W.R.) & Co. 91,400 6,089,525
Hercules, Inc. 75,400 4,194,125
Hoechst AG Ord. 5,200 1,251,826
Monsanto Co. 6,200 588,225
NL Industries, Inc. (a) 52,000 812,500
Olin Corp. 15,900 1,027,538
Raychem Corp. 16,300 715,163
Reliance Industries Ltd. GDR (b) 17,000 308,040
Rhodia Ster SA GDR (b) 25,000 346,875
Rohm & Haas Co. 17,000 1,015,750
Sasol Ltd. sponsored ADR 20,000 173,750
Union Carbide Corp. 43,700 1,551,350
Witco Corp. 15,000 498,750
28,578,776
CHEMICALS & ALLIED PRODUCTS - 2.6%
Kemira OY sponsored ADR (b) 73,200 1,143,750
Kemira OY 100,000 785,958
1,929,708
CHEMICALS, GENERAL - 4.8%
Albemarle Corp. 153,400 2,511,921
Great Lakes Chemical Corp. 15,800 1,044,775
3,556,696
INDUSTRIAL GASES - 3.8%
Airgas, Inc. (a) 101,200 2,783,000
ORGANIC CHEMICALS - 2.0%
Cambrex Corp. 20,000 800,000
Lubrizol Corp. 21,000 651,000
1,451,000
PLASTICS & SYNTHETIC RESINS - 0.5%
Geon Co. 12,700 338,138
SHARES VALUE (NOTE 1)
PLASTICS - 6.1%
Applied Extrusion Technologies, Inc. (a) 50,000 $ 912,500
Hanna (M.A.) Co. 111,850 3,131,800
Sealed Air Corp. (a) 8,300 437,825
4,482,125
PLASTICS, RESINS & ELASTOMERS - 4.7%
PT Tri Polyta Indonesia sponsored ADR 61,000 1,288,625
Praxair, Inc. 85,153 2,213,978
3,502,603
TOTAL CHEMICALS & PLASTICS 63,209,483
DRUGS & PHARMACEUTICALS - 4.6%
BIOTECHNOLOGY - 3.3%
Sigma Aldrich Corp. 50,000 2,400,000
PHARMACEUTICAL PREPARATIONS - 1.3%
Copley Pharmaceutical, Inc. (a) 55,000 990,000
TOTAL DRUGS & PHARMACEUTICALS 3,390,000
INDUSTRIAL MACHINERY & EQUIPMENT --1.0%
PUMPING EQUIPMENT - 1.0%
Duriron Co., Inc. 30,000 765,000
METALS & MINING - 0.9%
MISCELLANEOUS METAL ORES - 0.9%
Stillwater Mining Co. (a) 9,700 212,188
Stillwater Mining Co. (b) 20,000 437,500
649,688
OIL & GAS - 1.0%
CRUDE PETROLEUM & GAS - 1.0%
Occidental Petroleum Corp. 33,000 717,750
TEXTILES & APPAREL - 0.7%
CARPETS & RUGS - 0.7%
Image Industries, Inc. (a) 45,000 551,250
TOTAL COMMON STOCKS
(Cost $60,022,928) 69,659,371
REPURCHASE AGREEMENTS - 5.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $4,216,682 4,216,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $64,238,928) $ 73,875,371
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,236,165 or 2.9% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $37,471,896 and $70,002,144, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $51,139 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $1,328,000 and $1,161,500,
respectively. The weighted average interest rate paid was 6.5% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 87.4%
Canada 4.7
Finland 2.6
Indonesia 1.7
Germany 1.7
Others (individually less than 1%) 1.9
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $64,251,068. Net unrealized appreciation aggregated
$9,624,303, of which $73,875,369 related to appreciated investment
securities and $64,251,066 related to depreciated investment securities.
CHEMICALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $4,216,000) (cost $64,238,928) - See $ 73,875,371
accompanying schedule
Cash 492
Receivable for investments sold 3,411,071
Receivable for fund shares sold 585,034
Dividends receivable 192,777
Redemption fees receivable 319
Other receivables 3,800
Prepaid expenses 13,672
TOTAL ASSETS 78,082,536
LIABILITIES
Payable for investments purchased $ 1,634,755
Payable for fund shares redeemed 379,819
Accrued management fee 39,219
Other payables and accrued expenses 107,660
TOTAL LIABILITIES 2,161,453
NET ASSETS $ 75,921,083
Net Assets consist of:
Paid in capital $ 61,288,106
Undistributed net investment income 25,067
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 4,971,467
Net unrealized appreciation (depreciation) on investments 9,636,443
NET ASSETS, for 1,999,418 shares outstanding $ 75,921,083
NET ASSET VALUE and redemption price per share ($75,921,083 (divided by) 1,999,418 shares) $37.97
Maximum offering price per share (100/97.00 of $37.97) $39.14
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 860,779
Dividends
Interest (including income on securities loaned of $1,234) 77,299
TOTAL INCOME 938,078
EXPENSES
Management fee $ 261,233
Transfer agent 521,133
Fees
Redemption fees (45,717
)
Accounting and security lending fees 42,939
Non-interested trustees' compensation 678
Custodian fees and expenses 7,562
Registration fees 13,672
Audit 18,463
Legal 657
Interest 835
Miscellaneous 706
Total expenses before reductions 822,161
Expense reductions (10,832 811,329
)
NET INVESTMENT INCOME 126,749
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 5,187,571
Foreign currency transactions (307 5,187,264
)
Change in net unrealized appreciation (depreciation) on investment securities 5,135,840
NET GAIN (LOSS) 10,323,104
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 10,449,853
OTHER INFORMATION $220,843
Sales Charges Paid to FDC
Deferred sales charges withheld $13,312
by FDC
Exchange fees withheld by FSC $31,800
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 126,749 $ 1,534,984
Net investment income
Net realized gain (loss) 5,187,264 4,787,546
Change in net unrealized appreciation (depreciation) 5,135,840 576,053
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 10,449,853 6,898,583
Distributions to shareholders (214,326 (1,029,165
From net investment income ) )
From net realized gain (1,232,375 (2,261,141
) )
TOTAL DISTRIBUTIONS (1,446,701 (3,290,306
) )
Share transactions 27,262,158 295,805,417
Net proceeds from sales of shares
Reinvestment of distributions 1,417,990 3,230,231
Cost of shares redeemed (59,287,336(267,599,716
) )
Paid in capital portion of redemption fees 14,270 249,480
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (30,592,918 31,685,412
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (21,589,766 35,293,689
)
NET ASSETS
Beginning of period 97,510,849 62,217,160
End of period (including undistributed net investment income of $25,067 and $426,403, respectively) $ 75,921,083 $ 97,510,849
OTHER INFORMATION
Shares
Sold 762,032 8,887,417
Issued in reinvestment of distributions 41,029 101,777
Redeemed (1,679,576 (8,078,436
) )
Net increase (decrease) (876,515) 910,758
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 33.91 $ 31.66 $ 28.62 $ 32.81 $ 26.25 $ 22.70
Income from Investment Operations
Net investment income .05 .36 .29 .30 .12 .28
Net realized and unrealized gain (loss) 4.54 2.65 5.97 (.84) 7.27 3.94
Total from investment operations 4.59 3.01 6.26 (.54) 7.39 4.22
Less Distributions (.08) (.22) (.23) (.31) (.18) (.10)
From net investment income
From net realized gain (.46) (.60) (3.05) (3.36) (.71) (.60)
Total distributions (.54) (.82) (3.28) (3.67) (.89) (.70)
Redemption fees added to paid in capital .01 .06 .06 .02 .06 .03
Net asset value, end of period $ 37.97 $ 33.91 $ 31.66 $ 28.62 $ 32.81 $ 26.25
TOTAL RETURN B, C 13.72% 9.90% 23.63% (1.61)% 29.07% 18.99%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 75,921 $ 97,511 $ 62,217 $ 28,796 $ 39,566 $ 20,396
Ratio of expenses to average net assets 1.88% A 1.51% 1.93% 1.89% A 2.16% 2.50%
Ratio of expenses to average net assets before 1.91% A 1.52% 1.93% 1.89% A 2.16% 2.52%
expense reductions
Ratio of net investment income to average net assets .29% A 1.07% .97% 1.21% A .40% 1.21%
Portfolio turnover rate 90% A 106% 81% 214% A 87% 87%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
CONSTRUCTION AND HOUSING PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
CONSTRUCTION AND HOUSING 12.98% 6.63% 132.60% 187.42%
CONSTRUCTION AND HOUSING
(INCL. 3% SALES CHARGE) 9.59% 3.43% 125.62% 178.80%
S&P 500 16.81% 21.45% 102.17% 221.28%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on September 29, 1986. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
CONSTRUCTION AND HOUSING 6.63% 18.39% 12.55%
CONSTRUCTION AND HOUSING
(INCL. 3% SALES CHARGE) 3.43% 17.67% 12.17%
S&P 500 21.45% 15.12% 13.96%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select ConstruStandard & Poor
09/29/86 9700.00 10000.00
09/30/86 9709.70 9962.80
10/31/86 10262.60 10537.66
11/30/86 10369.30 10793.72
12/31/86 10437.20 10518.48
01/31/87 12192.90 11935.32
02/28/87 13483.00 12406.77
03/31/87 14307.50 12765.32
04/30/87 13327.80 12651.71
05/31/87 12949.50 12761.78
06/30/87 12804.00 13406.25
07/31/87 13599.40 14085.95
08/31/87 13890.40 14611.35
09/30/87 12823.40 14291.37
10/31/87 8749.40 11213.00
11/30/87 8109.20 10289.05
12/31/87 9141.24 11072.05
01/31/88 9466.31 11538.18
02/29/88 10352.85 12075.86
03/31/88 10766.57 11702.72
04/30/88 11081.79 11832.62
05/31/88 11012.83 11935.56
06/30/88 11662.97 12483.41
07/31/88 11544.76 12435.97
08/31/88 10953.73 12013.15
09/30/88 11288.65 12524.91
10/31/88 11367.45 12873.10
11/30/88 11229.54 12689.01
12/31/88 11809.46 12911.07
01/31/89 12529.18 13856.16
02/28/89 12377.13 13511.14
03/31/89 12691.37 13825.95
04/30/89 13188.08 14543.52
05/31/89 13654.38 15132.53
06/30/89 13645.75 15046.28
07/31/89 14199.39 16404.95
08/31/89 14438.22 16726.49
09/30/89 14698.76 16657.91
10/31/89 13873.72 16271.45
11/30/89 14079.98 16603.39
12/31/89 13769.49 17001.87
01/31/90 12900.94 15861.04
02/28/90 13167.30 16065.65
03/31/90 13908.46 16491.39
04/30/90 13503.14 16079.11
05/31/90 14753.86 17646.82
06/30/90 14487.50 17526.82
07/31/90 13731.86 17470.73
08/31/90 11986.06 15891.38
09/30/90 10748.37 15117.47
10/31/90 10370.55 15052.46
11/30/90 11373.73 16024.85
12/31/90 12442.05 16471.95
01/31/91 13536.43 17190.12
02/28/91 14722.01 18419.22
03/31/91 15086.80 18864.96
04/30/91 15321.31 18910.24
05/31/91 16845.63 19727.16
06/30/91 15985.76 18823.66
07/31/91 16402.66 19700.84
08/31/91 17080.14 20167.75
09/30/91 16702.32 19830.95
10/31/91 16415.69 20096.68
11/30/91 15594.91 19286.79
12/31/91 17582.47 21493.19
01/31/92 18889.56 21093.42
02/29/92 19198.76 21367.64
03/31/92 19184.71 20950.97
04/30/92 19451.75 21566.92
05/31/92 20070.16 21672.60
06/30/92 18636.06 21349.68
07/31/92 18973.62 22222.88
08/31/92 18326.63 21767.31
09/30/92 18565.74 22024.17
10/31/92 19212.72 22101.25
11/30/92 20323.86 22854.91
12/31/92 20872.39 23136.02
01/31/93 21744.42 23330.36
02/28/93 22138.23 23647.66
03/31/93 22658.64 24146.62
04/30/93 22123.98 23562.27
05/31/93 22363.23 24193.74
06/30/93 22630.63 24263.90
07/31/93 23404.69 24166.85
08/31/93 24375.78 25082.77
09/30/93 25163.91 24889.63
10/31/93 26078.71 25404.85
11/30/93 25670.57 25163.50
12/31/93 27887.78 25467.98
01/31/94 28798.86 26333.89
02/28/94 28215.20 25620.25
03/31/94 26563.85 24503.20
04/30/94 26503.76 24816.84
05/31/94 25101.29 25223.84
06/30/94 24485.92 24605.86
07/31/94 25187.15 25412.93
08/31/94 26145.98 26454.86
09/30/94 24686.27 25806.71
10/31/94 23956.42 26387.37
11/30/94 22983.28 25426.34
12/31/94 23441.19 25803.41
01/31/95 23544.07 26472.49
02/28/95 24675.71 27504.13
03/31/95 25116.61 28315.77
04/30/95 25146.00 29149.67
05/31/95 26380.52 30314.78
06/30/95 26630.37 31019.00
07/31/95 27864.89 32047.59
08/31/95 27879.58 32128.03
Let's say you invested $10,000 in Fidelity Select Construction and Housing
Portfolio on September 29, 1986, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $27,880 - a
178.80% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $32,128 over the same period - a 221.28% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Vulcan Materials Co. 7.7
United Dominion Industries Ltd. 6.8
Fluor Corp. 5.8
Lowe's Companies, Inc. 5.4
Aluminum Co. of America 5.2
Masco Corp. 5.1
Sunbeam-Oster, Inc. 5.1
Heilig-Meyers Co. 4.2
Federal National Mortgage Association 3.9
Sherwin-Williams Co. 3.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 54.6
Row: 1, Col: 2, Value: 6.9
Row: 1, Col: 3, Value: 7.0
Row: 1, Col: 4, Value: 7.2
Row: 1, Col: 5, Value: 8.1
Row: 1, Col: 6, Value: 16.2
Cement 16.2%
Operative Builders 8.1%
Appliances 7.2%
Federal & Federally Sponsored
Credit Agencies 7.0%
Prime Nonferrous Smelting 6.9%
All Others 54.6%
%
%
%
%
%
%*
CONSTRUCTION AND HOUSING PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Bill Bower,
Portfolio Manager of Fidelity Select Construction and Housing Portfolio
Q. BILL, CONSTRUCTION AND HOUSING STOCKS HAVE LAGGED THE MARKET IN RECENT
MONTHS. HOW HAS THE FUND PERFORMED IN THAT ENVIRONMENT?
A. Somewhat better than the sector, but still worse than the market as a
whole. For the six months ended August 31, 1995, the fund had a 12.98%
return, versus 16.81% for the S&P 500. During the 12 months ended August
31, 1995, the fund rose 6.63%, compared to a gain of 21.45% for the S&P
500.
Q. WHAT FACTORS HELPED THE FUND'S PERFORMANCE?
A. The significant decline in interest rates that took place during the
period helped the stock prices of homebuilders, which were among the fund's
largest investments. Homebuilders typically are among the first companies
in the construction and housing sector to feel the impact of lower rates,
which boost demand for new housing. The fund's investment in homebuilders
such as Pulte and Lennar helped its performance. In addition, for most of
the period, I avoided making sizable investments in retail home centers
such as Lowe's and Home Depot. At the beginning of the period they still
were suffering from the impact of slower home sales during 1994, which
meant there were fewer new homeowners out there to shop at their stores.
The fund's lack of investments in this area helped its performance.
Q. WHY DID THE SECTOR TRAIL THE S&P 500?
A. Although lower interest rates historically work their way through the
sector and stimulate demand, that doesn't happen immediately. Some groups
within the sector delivered disappointing earnings because of that lag
effect.
Q. HOW DID YOU CHANGE THE FUND'S STRATEGY DURING THE PERIOD?
A. During the past few months, I have begun to shift the fund's investments
into the sectors that should begin to revive later in the cycle. The fund
increased its stake in home retail centers, which should start to feel
additional demand from people who have been able to purchase new homes
thanks to the recent declines in interest rates. The fund's investment in
that group was Lowe's, which has been increasing its retail space at a
rapid pace and whose shares trade at an attractive valuation - price
relative to earnings. I also invested in building materials and furniture
stocks that should revive when new homeowners start to buy furniture and
remodel. The fund's new investments in those groups include Masco, which
plans to spin off its furniture division and concentrate on its very
well-managed building products business, and Heilig-Meyers, a furniture
retailer that has been growing rapidly and has a terrific track record that
isn't fully reflected in the stock price.
Q. YOU ALSO CONTINUED TO HOLD A SIGNIFICANT INVESTMENT IN CEMENT COMPANIES.
HOW DID THEY PERFORM?
A. Quite well. Cement goes into commercial buildings, highways and
airports. As a result, demand for cement stayed strong even when the
housing industry slumped in 1994. But cement stocks declined sharply
anyway, so I invested a significant portion of the fund's assets in them,
to the point where this industry has the largest representation in the
fund. As the construction cycle continued to mature, cement prices climbed
and the stocks performed well.
Q. ARE YOU TARGETING OTHER INDUSTRIES THAT USUALLY DO WELL AS THE CYCLE
PROGRESSES?
A. The fund's investments included shares of Texas Industries, which is
virtually uncovered by Wall Street analysts. The firm owns a cement
business and a structural steel division, both of which should benefit from
a strong construction market in Texas. The fund purchased shares of
structural steel producers - such as NorthWestern Steel & Wire - which tend
to prosper during the later stages of the construction cycle. And I also
bought shares of Aluminum Company of America, which is partly a play on
emerging markets, where aluminum has a major role in construction projects.
Q. ANY DISAPPOINTMENTS?
A. The fund invested in Vulcan and Martin Marietta because I expected
demand for their gravel and sand concrete additives used in heavy
construction to rise. But a wet spring in their markets curtailed demand,
and the firms delivered lower-than-expected earnings. That hurt the stocks,
but I still like their prospects as they get past the impact of that wet
weather.
Q. WHAT'S YOUR OUTLOOK FOR THE SECTOR?
A. There's a good chance that the sector will perform reasonably well
during the next six to 12 months. Valuations in the sector are quite
reasonable. Low interest rates likely will continue to support demand for
housing, and many companies should benefit from the ripple effect of past
interest rate cuts. I plan to continue to hold shares of retailers and
firms that make building materials, as well as late cycle firms whose
products go into heavy construction.
FUND FACTS
START DATE: September 29, 1986
TRADING SYMBOL: FSHOX
SIZE: as of August 31, 1995, more than $39 million
MANAGER: William Bower, since December
1994; equity analyst, building materials,
housing, recreational vehicle, and
manufactured housing industries, since 1994;
joined Fidelity in June 1994
(checkmark)
CONSTRUCTION AND HOUSING PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 100%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 33.7%
CEMENT - 16.2%
Centex Construction Products (a) 15,900 $ 206,700
Lafarge Corp. 50,000 1,056,250
Medusa Corp. 42,700 1,174,250
Texas Industries, Inc. 17,300 854,188
Vulcan Materials Co. 57,000 2,999,625
6,291,013
FABRICATED STRUCTURAL METAL - 6.7%
United Dominion Industries Ltd. 109,100 2,628,158
HEATING & AIR-CONDITION EQUIPMENT - 0.3%
Falcon Building Products, Inc. 10,000 111,250
PAINT & VARNISH - 3.6%
Sherwin-Williams Co. 38,900 1,395,537
PAVING, ROOFING & SIDING - 1.8%
Elcor Corp. 31,500 693,000
PLUMBING SUPPLIES - WHOLESALE - 5.1%
Masco Corp. 71,050 1,989,400
TOTAL BUILDING MATERIALS 13,108,358
CONSTRUCTION - 11.9%
CONSTRUCTION - 1.1%
Walter Industries, Inc. 30,000 420,000
OPERATIVE BUILDERS - 8.1%
Centex Corp. 18,100 529,425
Engle Homes, Inc. 20,000 175,000
Lennar Corp. 38,950 754,656
Pulte Corp. 44,500 1,201,500
Washington Homes, Inc. 101,000 467,125
3,127,706
PREFABRICATED WOOD BUILDINGS - 1.1%
American Homestar Corp. 30,800 435,050
SINGLE-FAMILY HOUSING CONSTRUCTION - 1.6%
Beazer Homes USA, Inc. (a) 40,000 635,000
TOTAL CONSTRUCTION 4,617,756
CONSUMER ELECTRONICS - 7.2%
APPLIANCES - 7.2%
Black & Decker Corp. 25,000 809,375
Sunbeam-Oster, Inc. 121,700 1,977,625
2,787,000
ENGINEERING - 5.8%
ARCHITECTS & ENGINEERS - 5.8%
Fluor Corp. 38,200 2,234,700
FEDERAL SPONSORED CREDIT - 7.0%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 7.0%
Federal Home Loan
Mortgage Corporation 18,800 1,207,900
Federal National Mortgage
Association 15,800 1,506,925
2,714,825
SHARES VALUE (NOTE 1)
HOME FURNISHINGS - 5.8%
FURNITURE - 0.3%
Interco, Inc. 15,000 $ 118,125
FURNITURE STORES - 5.5%
Haverty Furniture Companies, Inc. 41,750 511,438
Heilig-Meyers Co. 73,900 1,625,800
2,137,238
TOTAL HOME FURNISHINGS 2,255,363
HOUSEHOLD PRODUCTS - 2.3%
MANUFACTURED PRODUCTS - 1.1%
First Brands Corp. 10,000 436,250
SOAPS & DETERGENTS - 1.2%
Rubbermaid, Inc. 15,300 455,175
TOTAL HOUSEHOLD PRODUCTS 891,425
INDUSTRIAL MACHINERY & EQUIPMENT --0.9%
CONSTRUCTION EQUIPMENT - 0.9%
Caterpillar, Inc. 5,200 349,050
IRON & STEEL - 2.3%
BLAST FURNACES - 2.3%
Northwestern Steel & Wire Co. 92,300 899,925
LEISURE DURABLES & TOYS - 2.9%
TRAVEL TRAILERS AND CAMPERS - 2.9%
Champion Enterprises, Inc. (a) 67,000 1,139,000
METALS & MINING - 9.3%
NON-METALLIC MINERAL MINING - 2.4%
Martin Marietta Materials, Inc. 50,500 959,500
PRIME NONFERROUS SMELTING - 6.9%
Alcan Aluminium Ltd. 20,000 652,926
Aluminum Co. of America 35,200 2,010,800
2,663,726
TOTAL METALS & MINING 3,623,226
PAPER & FOREST PRODUCTS - 3.2%
PAPER - 3.2%
Champion International Corp. 22,000 1,245,750
RETAIL & WHOLESALE, MISCELLANEOUS - 6.5%
LUMBER & BUILDING MATERIALS-RETAIL - 5.4%
Lowe's Companies, Inc. 63,000 2,094,750
LUMBER - WHOLESALE - 1.1%
Cameron Ashley, Inc. 40,000 420,000
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 2,514,750
SHIPPING - 1.2%
Kirby Corp. 30,000 465,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $35,541,974) $ 38,846,128
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $44,015,334 and $25,615,658, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $15,805 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $3,426,000 and $2,484,125,
respectively. The weighted average interest rate paid was 6.5% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $35,593,533. Net unrealized appreciation aggregated
$3,252,595, of which $4,081,148 related to appreciated investment
securities and $828,553 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$335,000 of losses recognized during the period November 1,1994 to February
28, 1995.
CONSTRUCTION AND HOUSING PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value $ 38,846,128
(cost $35,541,974) - See accompanying schedule
Cash 768
Receivable for investments sold 2,530,277
Receivable for fund shares sold 231,989
Dividends receivable 58,902
Redemption fees receivable 129
Other receivables 427
Prepaid expenses 2,949
TOTAL ASSETS 41,671,569
LIABILITIES
Payable for fund shares redeemed $ 546,522
Accrued management fee 24,069
Notes payable 1,983,000
Other payables and accrued expenses 36,739
TOTAL LIABILITIES 2,590,330
NET ASSETS $ 39,081,239
Net Assets consist of:
Paid in capital $ 34,255,721
Undistributed net investment income 172,182
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions 1,349,165
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 3,304,171
NET ASSETS, for 2,060,460 shares outstanding $ 39,081,239
NET ASSET VALUE and redemption price per share ($39,081,239 (divided by) 2,060,460 shares) $18.97
Maximum offering price per share (100/97.00 of $18.97) $19.56
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 285,767
Dividends
Interest 172,034
TOTAL INCOME 457,801
EXPENSES
Management fee $ 132,025
Transfer agent 129,437
Fees
Redemption fees (24,268
)
Accounting fees and expenses 24,349
Non-interested trustees' compensation 197
Custodian fees and expenses 9,059
Registration fees 9,038
Audit 8,466
Legal 74
Interest 3,602
Miscellaneous 687
Total expenses before reductions 292,666
Expense reductions (5,462 287,204
)
NET INVESTMENT INCOME 170,597
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,864,000
Foreign currency transactions 10 1,864,010
Change in net unrealized appreciation (depreciation) on:
Investment securities 2,856,200
Assets and liabilities in 17 2,856,217
foreign currencies
NET GAIN (LOSS) 4,720,227
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,890,824
OTHER INFORMATION $119,423
Sales Charges Paid to FDC
Deferred sales charges withheld $1,006
by FDC
Exchange fees withheld by FSC $16,830
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 170,597 $ (45,685
Net investment income (loss) )
Net realized gain (loss) 1,864,010 847,689
Change in net unrealized appreciation (depreciation) 2,856,217 (10,454,301
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,890,824 (9,652,297
)
Distributions to shareholders from net realized gains - (804,434
)
Share transactions 67,347,748 23,825,749
Net proceeds from sales of shares
Reinvestment of distributions - 794,528
Cost of shares redeemed (50,065,472 (78,326,758
) )
Paid in capital portion of redemption fees 45,162 27,046
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 17,327,438 (53,679,435
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 22,218,262 (64,136,166
)
NET ASSETS
Beginning of period 16,862,977 80,999,143
End of period (including undistributed net investment income of $172,182 and $1,585, respectively) $ 39,081,239 $ 16,862,977
OTHER INFORMATION
Shares
Sold 3,769,131 1,308,527
Issued in reinvestment of distributions - 47,271
Redeemed (2,713,210 (4,437,862
) )
Net increase (decrease) 1,055,921 (3,082,064)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.79 $ 19.82 $ 15.74 $ 13.84 $ 11.76 $ 11.66
Income from Investment Operations
Net investment income (loss) .07 (.02) .01 .02 (.06) .01
Net realized and unrealized gain (loss) 2.09 (2.50) 4.26 1.87 2.93 1.45
Total from investment operations 2.16 (2.52) 4.27 1.89 2.87 1.46
Less Distributions - - - - - (.16)
From net investment income
From net realized gain - (.52) (.22) (.01) (.88) (1.27)
Total distributions - (.52) (.22) (.01) (.88) (1.43)
Redemption fees added to paid in capital .02 .01 .03 .02 .09 .07
Net asset value, end of period $ 18.97 $ 16.79 $ 19.82 $ 15.74 $ 13.84 $ 11.76
TOTAL RETURN B, C 12.98% (12.54)% 27.45% 13.81% 26.96% 13.46%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 39,081 $ 16,863 $ 80,999 $ 31,111 $ 26,687 $ 4,070
Ratio of expenses to average net assets 1.31% A 1.74% 1.66% 2.02% A 2.50% 2.48%
Ratio of expenses to average net assets before 1.34% A 1.76% 1.67% 2.02% A 3.10% 3.48%
expense reductions
Ratio of net investment income (loss) to average net .78% A (.11)% .03% .20% A (.49)% .08%
assets
Portfolio turnover rate 142% A 45% 35% 60% A 183% 137%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
ENVIRONMENTAL SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
ENVIRONMENTAL SERVICES 24.93% 17.38% 23.37% 38.17%
ENVIRONMENTAL SERVICES
(INCL. 3% SALES CHARGE) 21.18% 13.86% 19.66% 34.02%
S&P 500 16.81% 21.45% 102.17% 108.43%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 29, 1989. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
ENVIRONMENTAL SERVICES 17.38% 4.29% 5.37%
ENVIRONMENTAL SERVICES
(INCL. 3% SALES CHARGE) 13.86% 3.66% 4.85%
S&P 500 21.45% 15.12% 12.62%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select EnviroStandard & Poo
06/29/89 9700.00 10000.00
06/30/89 9573.90 9761.13
07/31/89 10485.70 10642.57
08/31/89 10621.50 10851.16
09/30/89 11193.80 10806.67
10/31/89 10941.60 10555.96
11/30/89 11009.50 10771.30
12/31/89 11368.64 11029.81
01/31/90 10358.96 10289.71
02/28/90 10562.83 10422.44
03/31/90 11019.13 10698.64
04/30/90 11077.38 10431.17
05/31/90 12106.48 11448.21
06/30/90 12485.11 11370.37
07/31/90 12407.45 11333.98
08/31/90 10863.80 10309.39
09/30/90 10281.29 9807.32
10/31/90 10135.66 9765.15
11/30/90 10485.17 10395.98
12/31/90 11087.09 10686.03
01/31/91 12057.94 11151.94
02/28/91 12611.32 11949.30
03/31/91 12611.32 12238.47
04/30/91 12572.49 12267.85
05/31/91 12601.62 12797.82
06/30/91 11650.18 12211.68
07/31/91 12019.11 12780.74
08/31/91 12232.69 13083.64
09/30/91 11941.44 12865.15
10/31/91 11494.85 13037.54
11/30/91 10863.80 12512.13
12/31/91 11936.55 13943.51
01/31/92 13005.20 13684.17
02/29/92 13146.34 13862.06
03/31/92 11835.74 13591.75
04/30/92 11482.88 13991.35
05/31/92 11190.52 14059.90
06/30/92 10592.18 13850.41
07/31/92 10665.31 14416.89
08/31/92 10445.94 14121.35
09/30/92 10571.29 14287.98
10/31/92 11072.70 14337.99
11/30/92 11762.13 14826.91
12/31/92 11772.58 15009.28
01/31/93 12002.39 15135.36
02/28/93 11866.59 15341.20
03/31/93 11574.10 15664.90
04/30/93 11333.85 15285.81
05/31/93 11584.55 15695.47
06/30/93 11438.31 15740.99
07/31/93 10957.79 15678.02
08/31/93 11542.77 16272.22
09/30/93 11553.21 16146.93
10/31/93 11877.04 16481.17
11/30/93 11354.74 16324.60
12/31/93 11699.45 16522.12
01/31/94 12691.82 17083.88
02/28/94 12462.01 16620.90
03/31/94 11333.85 15896.23
04/30/94 11521.87 16099.70
05/31/94 11490.54 16363.74
06/30/94 10801.10 15962.83
07/31/94 11030.91 16486.41
08/31/94 11417.41 17162.35
09/30/94 11344.29 16741.87
10/31/94 10957.79 17118.56
11/30/94 10341.48 16495.11
12/31/94 10581.74 16739.73
01/31/95 10592.18 17173.79
02/28/95 10727.98 17843.05
03/31/95 11239.83 18369.60
04/30/95 12044.17 18910.59
05/31/95 12232.20 19666.44
06/30/95 12733.60 20123.29
07/31/95 13214.12 20790.58
08/31/95 13391.70 20842.77
Let's say you invested $10,000 in Fidelity Select Environmental Services
Portfolio on June 29, 1989, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $13,402 -
a 34.02% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $20,843 over the same period - a 108.43% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Addington Resources, Inc. 10.8
Harsco Corp. 8.5
Memtec Ltd. sponsored ADR 8.0
Tetra Technologies, Inc. 5.0
IMCO Recycling, Inc. 4.4
Browning-Ferris Industries, Inc. 4.2
Microfluidics International Corp. 4.1
American Buildings Co. 4.0
Thermo Power Corp. 3.5
Continental Waste Industries, Inc. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 44.7
Row: 1, Col: 2, Value: 8.0
Row: 1, Col: 3, Value: 8.300000000000001
Row: 1, Col: 4, Value: 8.5
Row: 1, Col: 5, Value: 10.8
Row: 1, Col: 6, Value: 19.7
Refuse Systems 19.7%
Coal 10.8%
Ordnance 8.5%
Pollution Equipment
& Design 8.3%
Manufactured
Products 8.0%
All Others 44.7%*
* INCLUDES SHORT-TERM INVESTMENTS
ENVIRONMENTAL SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Philip Barton,
Portfolio Manager of Fidelity Select Environmental Services Portfolio
Q. HOW HAS THE FUND PERFORMED, PIP?
A. It has done very well. The fund had a total return of 24.93% from March
1, 1995, through August 31, 1995. During the same period, the Standard &
Poor's Composite Index of 500 Stocks returned 16.81%. For the 12 months
ended August 31, 1995, the fund rose 17.38%, while the S&P 500 was up
21.45%.
Q. WHAT HELPED THE FUND PERFORM SO WELL OVER THE PAST SIX MONTHS?
A. It came down to individual stock selection, as well as a focus on two
industries that posted very good results: recycling and secondary solid
waste companies.
Q. WHAT DO YOU MEAN BY SECONDARY SOLID WASTE COMPANIES?
A. That's a term that refers to solid waste disposal in about 150 smaller
metropolitan markets in the United States. Rapid consolidation is the main
appeal of this industry at the moment. Companies such as United Waste and
Continental Waste - two of the larger positions in the fund and two of the
best performing stocks during the past six months - are in the process of
acquiring local solid waste companies and setting up operations that, from
an economic standpoint, are quite efficient and profitable. In essence,
these companies establish themselves as local solid waste monopolies, both
in terms of collection and landfill management. Once they do so, they can
use pricing leverage to improve profit margins, and can create economies of
scale to make their operations more efficient.
Q. WHAT'S BEEN THE APPEAL OF RECYCLING STOCKS?
A. The economics of the business has seen a dramatic improvement. For
example, companies such as Thermo Fibertek have seen increased demand for
white paper recycling equipment used to enable pulp mills to accept
recycled input. Harsco, Tetra Technologies and IMCO Recycling are three
recycling companies that were among the fund's top 10 investments and best
performers during the period. Harsco provides a broad range of recycling
services in steel and base metals. Tetra Technologies, 5% of the fund as of
August 31, 1995, continued to do well in specialty chemicals recycling,
including calcium chloride for offshore drilling and specialized
applications in snow and ice melt products and food processing. It has made
significant capacity increases over the past few months. And IMCO is the
leader in the recovery and sales of aluminum scrap and recycled content.
Q. YOU'VE TALKED ABOUT SOLID WASTE AND RECYCLING. HOW HAVE THE HAZARDOUS
WASTE AND INSTRUMENTATION INDUSTRIES FARED?
A. Both of these industries have suffered from the atmosphere of
deregulation that arrived with the Republican sweep in 1994's Congressional
elections. Hazardous waste businesses have been in decline since cuts in
the budget for the Environmental Protection Agency were proposed by the
Republicans. American Ecology, for example, has been a poor performer for
the fund. And the instrumentation business has ebbed as government
regulation tied to the Clean Air Act and Clean Water Act has been
postponed. For example, TRC Companies and Earth Technology - which help
businesses monitor emissions from smoke stacks - were disappointing
investments for the fund. While these companies' businesses have been
strong in the permitting of manufacturing facilities and Clean Air Act
compliance, their hazardous waste consulting businesses have been
disappointing. Uncertainty on the regulation and enforcement fronts
continued to plague the hazardous waste industry. The fund still owned TRC
Companies at the end of the period, but I've sold off its stake in Earth
Technology.
Q. ADDINGTON RESOURCES, AT 10.8% OF THE FUND'S INVESTMENTS, WAS THE FUND'S
LARGEST HOLDING AT THE END OF AUGUST. WHAT'S THE STORY BEHIND THIS COMPANY?
A. Addington used to be a coal mining company. It has established landfill
sites at locations where it used to mine coal, while at the same time
selling off its coal assets. Recently, there was a management coup, where
shareholders wrested power from the family that ran the business. It
appears to be an attractive takeover target and a value investment.
Q. HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
A. I've tried to position the fund defensively, by focusing on the
secondary solid waste companies and recycling stocks that should offer
growth even with a difficult market backdrop. I'm also looking to get
broader international exposure from companies in the U.S. that are
successful abroad such as Browning-Ferris Industries and WMX Technologies.
FUND FACTS
START DATE: June 29, 1989
TRADING SYMBOL: FSLEX
SIZE: as of August 31, 1995, more than
$32 million
MANAGER: Philip Barton, since 1993; manager,
Fidelity Select Developing Communications,
1993; senior European technology analyst,
Fidelity International, London, 1989 -1993;
joined Fidelity in 1986
(checkmark)
ENVIRONMENTAL SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 8.5%
ORDNANCE - 8.5%
Harsco Corp. 49,000 $ 2,744,000
BUILDING MATERIALS - 3.4%
AIRCONDITIONING EQUIPMENT - 3.4%
Thermo Power Corp. (a) 70,000 1,120,000
COAL - 10.8%
Addington Resources, Inc. 254,000 3,476,623
COMPUTER SERVICES & SOFTWARE - 1.4%
PREPACKAGED COMPUTER SOFTWARE - 1.4%
Telepanel Systems, Inc. (a) 231,500 439,246
CONSTRUCTION - 4.0%
PREFABRICATED METAL BUILDINGS - 4.0%
American Buildings Co. 50,000 1,275,000
DEFENSE ELECTRONICS - 0.3%
Comarco, Inc. 10,000 101,250
DRUGS & PHARMACEUTICALS - 0.4%
COMMERCIAL LABORATORY RESEARCH - 0.4%
Zenon Environmental, Inc. (a) 44,000 144,053
ELECTRIC UTILITY - 0.1%
ELECTRIC POWER - 0.1%
Thermo Ecotek (a) 1,662 26,177
ELECTRONIC INSTRUMENTS - 8.7%
ELECTRONIC EQUIPMENT - 2.2%
Thermo Voltek Corp. 25,000 393,750
Thermospectra Corp. 17,000 303,875
697,625
INDUSTRIAL MEASUREMENT INSTRUMENTS - 2.4%
TSI, Inc. 71,800 789,800
LABORATORY & RESEARCH EQUIPMENT - 4.1%
Microfluidics International Corp. (a)(c) 392,800 1,325,700
TOTAL ELECTRONIC INSTRUMENTS 2,813,125
ENERGY SERVICES - 1.4%
OIL & GAS SERVICES - 1.4%
Serv-Tech, Inc. (a) 70,400 466,400
ENGINEERING - 3.4%
ARCHITECTS & ENGINEERS - 3.4%
Fluor Corp. 11,000 643,500
VA Technologie AG 2,000 220,898
VA Technologie AG (b) 2,000 220,898
1,085,296
HOUSEHOLD PRODUCTS - 8.0%
MANUFACTURED PRODUCTS - 8.0%
Memtec Ltd. sponsored ADR 143,000 2,574,000
INDUSTRIAL MACHINERY & EQUIPMENT - 4.4%
SERVICE INDUSTRY MACHINERY - 2.6%
Trojan Technologies Corp. (a) 137,700 832,480
SPECIAL INDUSTRIAL MACHINERY - 1.8%
Thermo Fibertek, Inc. 25,500 592,875
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,425,355
SHARES VALUE (NOTE 1)
MEDICAL EQUIPMENT & SUPPLIES - 0.8%
X-RAY ELECTRO-MEDICAL APPARATUS - 0.8%
Imatron, Inc. 270,000 $ 270,000
METALS & MINING - 4.4%
SECONDARY NONFERROUS SMELTING - 4.4%
IMCO Recycling, Inc. 69,700 1,411,425
OIL & GAS - 0.4%
CRUDE PETROLEUM & GAS - 0.4%
Unimar Co., Indonesian
(Participating Certificate) 20,000 135,000
POLLUTION CONTROL - 34.0%
HAZARDOUS WASTE MANAGEMENT - 6.0%
American Ecology Corp. 95,900 431,550
GNI Group, Inc. (a) 67,600 490,100
TRC Companies, Inc. (a) 127,100 1,016,800
1,938,450
POLLUTION EQUIPMENT & DESIGN - 8.3%
Harding Associates, Inc. (a) 47,300 354,750
Sevenson Environmental Services, Inc. 40,900 715,750
TETRA Technologies, Inc. (a) 115,700 1,605,338
2,675,838
REFUSE SYSTEMS - 19.7%
Browning-Ferris Industries, Inc. 40,600 1,365,175
Continental Waste Industries, Inc. (a) 69,800 1,047,000
Sanifill, Inc. (a) 25,700 819,188
United Waste Systems, Inc. (a) 13,600 527,000
WMX Technologies, Inc. 35,000 1,028,125
Western Waste Industries, Inc. (a) 32,780 741,648
Wheelabrator Technologies, Inc. 53,100 829,688
6,357,824
SANITARY SERVICES - 0.0%
USA Waste Services, Inc. 1 20
TOTAL POLLUTION CONTROL 10,972,132
SECURITIES INDUSTRY - 1.3%
PATENT OWNERS-LESSORS - 1.3%
Western Water Co. 15,000 405,000
TOTAL COMMON STOCKS
(Cost $29,865,306) 30,884,082
REPURCHASE AGREEMENTS - 4.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 1,373,222 1,373,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $31,238,306) $ 32,257,082
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $220,898 or 0.7% of net
assets.
3. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Microfluidics International Corp. $ 571,103 $ - $ - $ 1,325,700
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $26,005,948 and $33,019,664, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $30,797 for the period
(see Note 5 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 86.2%
Australia 8.0
Canada 4.4
Austria 1.4
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $31,265,597. Net unrealized appreciation aggregated
$991,485, of which $3,557,440 related to appreciated investment securities
and $2,565,955 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$3,177,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
ENVIRONMENTAL SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $1,373,000) (cost $31,238,306) - See $ 32,257,082
accompanying schedule
Cash 874
Receivable for investments sold 537,213
Receivable for fund shares sold 218,612
Dividends receivable 11,987
Redemption fees receivable 58
Other receivables 64,214
Prepaid expenses 5,900
TOTAL ASSETS 33,095,940
LIABILITIES
Payable for investments purchased $ 206,875
Payable for fund shares redeemed 78,976
Accrued management fee 16,637
Other payables and accrued expenses 54,286
TOTAL LIABILITIES 356,774
NET ASSETS $ 32,739,166
Net Assets consist of:
Paid in capital $ 31,210,214
Accumulated net investment (loss) (222,952
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 733,128
Net unrealized appreciation (depreciation) on investments 1,018,776
NET ASSETS, for 2,550,901 shares outstanding $ 32,739,166
NET ASSET VALUE and redemption price per share ($32,739,166 (divided by) 2,550,901 shares) $12.83
Maximum offering price per share (100/97.00 of $12.83) $13.23
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 84,633
Dividends
Interest 61,472
TOTAL INCOME 146,105
EXPENSES
Management fee $ 102,304
Transfer agent 241,063
Fees
Redemption fees (17,997
)
Accounting fees and expenses 22,695
Non-interested trustees' compensation 209
Custodian fees and expenses 13,325
Registration fees 5,900
Audit 8,922
Legal 128
Miscellaneous 1,128
Total expenses before reductions 377,677
Expense reductions (8,620 369,057
)
NET INVESTMENT INCOME (LOSS) (222,952
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 4,029,194
Foreign currency transactions (213 4,028,981
)
Change in net unrealized appreciation (depreciation) on investment securities 3,418,594
NET GAIN (LOSS) 7,447,575
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,224,623
OTHER INFORMATION $29,064
Sales Charges Paid to FDC
Deferred sales charges withheld $5,721
by FDC
Exchange fees withheld by FSC $13,035
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (222,952 $ (595,469
Net investment income (loss) ) )
Net realized gain (loss) 4,028,981 (2,723,480
)
Change in net unrealized appreciation (depreciation) 3,418,594 (5,250,926
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,224,623 (8,569,875
)
Share transactions 11,655,995 27,529,233
Net proceeds from sales of shares
Cost of shares redeemed (17,428,601 (53,674,761
) )
Paid in capital portion of redemption fees 16,837 29,932
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (5,755,769 (26,115,596
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,468,854 (34,685,471
)
NET ASSETS
Beginning of period 31,270,312 65,955,783
End of period (including accumulated net investment loss of $222,952 and $0, respectively) $ 32,739,166 $ 31,270,312
OTHER INFORMATION
Shares
Sold 1,006,170 2,591,147
Redeemed (1,500,905 (5,072,812
) )
Net increase (decrease) (494,735) (2,481,665)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.27 $ 11.93 $ 11.36 $ 11.39 $ 12.95 $ 11.41
Income from Investment Operations
Net investment income (loss) (.08) (.14) (.11) (.06) (.09) (.04)
Net realized and unrealized gain (loss) 2.63 (1.53) .67 .42 (1.06) 1.55
Total from investment operations 2.55 (1.67) .56 .36 (1.15) 1.51
Less Distributions - - - (.39) (.42) -
From net realized gain
Redemption fees added to paid in capital .01 .01 .01 - .01 .03
Net asset value, end of period $ 12.83 $ 10.27 $ 11.93 $ 11.36 $ 11.39 $ 12.95
TOTAL RETURN B, C 24.93% (13.91)% 5.02% 3.34% (8.67)% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 32,739 $ 31,270 $ 65,956 $ 65,913 $ 65,132 $ 100,263
Ratio of expenses to average net assets 2.18% A 2.01% 2.03% 1.99% A 2.03% 2.03%
Ratio of expenses to average net assets before 2.23% A 2.04% 2.07% 1.99% A 2.03% 2.03%
expense reductions
Ratio of net investment income (loss) to average net (1.32)% (1.32)% (1.02)% (.70)% (.74)% (.30)%
assets A A
Portfolio turnover rate 165% A 82% 191% 176% A 130% 122%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
INDUSTRIAL EQUIPMENT PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
INDUSTRIAL EQUIPMENT 28.80% 29.77% 147.89% 177.62%
INDUSTRIAL EQUIPMENT
(INCL. 3% SALES CHARGE) 24.94% 25.88% 140.45% 169.29%
S&P 500 16.81% 21.45% 102.17% 221.28%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on September 29, 1986. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
INDUSTRIAL EQUIPMENT 29.77% 19.91% 12.11%
INDUSTRIAL EQUIPMENT
(INCL. 3% SALES CHARGE) 25.88% 19.18% 11.73%
S&P 500 21.45% 15.12% 13.96%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select IndustriaStandard & Poor'
09/29/86 9700.00 10000.00
09/30/86 9729.10 9962.80
10/31/86 10039.50 10537.66
11/30/86 10291.70 10793.72
12/31/86 10311.10 10518.48
01/31/87 11804.90 11935.32
02/28/87 12804.00 12406.77
03/31/87 12580.90 12765.32
04/30/87 12367.50 12651.71
05/31/87 12357.80 12761.78
06/30/87 12707.00 13406.25
07/31/87 13483.00 14085.95
08/31/87 14084.40 14611.35
09/30/87 14414.20 14291.37
10/31/87 8759.10 11213.00
11/30/87 8361.40 10289.05
12/31/87 9357.40 11072.05
01/31/88 9188.17 11538.18
02/29/88 10024.36 12075.86
03/31/88 10173.68 11702.72
04/30/88 10472.32 11832.62
05/31/88 10412.60 11935.56
06/30/88 11149.24 12483.41
07/31/88 10561.92 12435.97
08/31/88 9606.27 12013.15
09/30/88 9785.45 12524.91
10/31/88 9626.18 12873.10
11/30/88 9317.58 12689.01
12/31/88 9815.31 12911.07
01/31/89 10532.05 13856.16
02/28/89 10113.96 13511.14
03/31/89 10263.28 13825.95
04/30/89 10999.92 14543.52
05/31/89 11597.20 15132.53
06/30/89 11099.47 15046.28
07/31/89 11806.25 16404.95
08/31/89 12025.25 16726.49
09/30/89 11856.02 16657.91
10/31/89 11069.60 16271.45
11/30/89 11378.20 16603.39
12/31/89 11577.29 17001.87
01/31/90 11189.06 15861.04
02/28/90 11756.48 16065.65
03/31/90 12453.31 16491.39
04/30/90 12353.76 16079.11
05/31/90 13498.55 17646.82
06/30/90 13258.63 17526.82
07/31/90 13008.09 17470.73
08/31/90 10863.46 15891.38
09/30/90 9390.28 15117.47
10/31/90 9139.74 15052.46
11/30/90 9440.38 16024.85
12/31/90 9781.12 16471.95
01/31/91 10823.37 17190.12
02/28/91 11845.58 18419.22
03/31/91 11745.36 18864.96
04/30/91 11625.10 18910.24
05/31/91 12116.16 19727.16
06/30/91 11725.01 18823.66
07/31/91 11825.31 19700.84
08/31/91 12005.85 20167.75
09/30/91 12286.69 19830.95
10/31/91 12216.48 20096.68
11/30/91 11634.74 19286.79
12/31/91 12406.41 21493.19
01/31/92 13519.55 21093.42
02/29/92 14480.89 21367.64
03/31/92 14055.88 20950.97
04/30/92 14055.88 21566.92
05/31/92 14167.19 21672.60
06/30/92 13296.92 21349.68
07/31/92 13418.36 22222.88
08/31/92 12720.11 21767.31
09/30/92 12983.22 22024.17
10/31/92 12932.62 22101.25
11/30/92 13549.91 22854.91
12/31/92 13813.01 23136.02
01/31/93 14460.66 23330.36
02/28/93 15219.61 23647.66
03/31/93 15492.84 24146.62
04/30/93 16201.67 23562.27
05/31/93 17011.75 24193.74
06/30/93 17234.52 24263.90
07/31/93 17477.55 24166.85
08/31/93 18672.42 25082.77
09/30/93 18459.77 24889.63
10/31/93 19077.46 25404.85
11/30/93 19057.21 25163.50
12/31/93 19798.04 25467.98
01/31/94 20728.99 26333.89
02/28/94 21318.58 25620.25
03/31/94 20087.67 24503.20
04/30/94 19905.86 24816.84
05/31/94 19498.98 25223.84
06/30/94 18497.43 24605.86
07/31/94 19373.79 25412.93
08/31/94 20750.92 26454.86
09/30/94 20813.52 25806.71
10/31/94 21074.34 26387.37
11/30/94 20051.92 25426.34
12/31/94 20417.07 25803.41
01/31/95 20302.31 26472.49
02/28/95 20907.41 27504.13
03/31/95 22639.27 28315.77
04/30/95 23703.68 29149.67
05/31/95 24183.81 30314.78
06/30/95 25102.32 31019.00
07/31/95 27461.20 32047.59
08/31/95 26928.89 32128.03
Let's say you invested $10,000 in Fidelity Select Industrial Equipment
Portfolio on September 29, 1986, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $26,929 - a
169.29% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $32,128 over the same period - a 221.28% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Caterpillar, Inc. 8.2
Deere & Co. 7.5
Compaq Computer Corp. 6.3
Harnischfeger Industries, Inc. 5.9
Case Corp. 5.7
Parker-Hannifin Corp. 5.5
Dover Corp. 5.3
Ingersoll-Rand Co. 4.3
International Business Machines Corp. 4.3
Intel Corp. 2.9
TOP INDUSTRIES AS OF AUGUST 31, 1995
General Industrial Machinery 26.4%
Farm Machinery & Equipment 17.3%
Construction Equipment 8.7%
Mini & Micro Computers 6.4%
Pumping Equipment 5.1%
All Others 36.1%*
Row: 1, Col: 1, Value: 36.1
Row: 1, Col: 2, Value: 5.1
Row: 1, Col: 3, Value: 6.4
Row: 1, Col: 4, Value: 8.699999999999999
Row: 1, Col: 5, Value: 17.3
Row: 1, Col: 6, Value: 26.4
* INCLUDES SHORT-TERM INVESTMENTS
INDUSTRIAL EQUIPMENT PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Robert Bertelson,
Portfolio Manager of Fidelity Select Industrial Equipment Portfolio
Q. HOW HAS THE FUND PERFORMED, BOB?
A. Very well. The portfolio returned 28.80% for the six months ended August
31, 1995. The Standard & Poor's 500 Index returned 16.81% for the same time
period. For the 12 months ended August 31, 1995, the portfolio returned
29.77% while the S&P returned 21.45%.
Q. WHAT ACCOUNTS FOR THE FUND'S STRONG RETURNS?
A. A couple of things. The first is that the overall market has done well
and many of the stocks in this fund tend to do well when the market rises
because they're economically sensitive. In 1994, there were a number of
interest rate hikes which caused investors to become concerned about the
economy in 1995 and be fearful that the U.S. was headed for a recession.
However, in 1995 the economy rebounded strongly and investors who had sold
out of industrial equipment stocks in 1994 started buying them again. Along
with the favorable economic backdrop, many companies in this market sector
posted better-than-expected earnings.
Q. HAS YOUR INVESTMENT STRATEGY CHANGED DURING THE PAST SIX MONTHS?
A. Not really. The themes in the fund today are similar to the ones six
months ago. The fund remains heavily invested in agricultural equipment
stocks. Stocks like Deere & Co., Case Corp. and AGCO could perform well if
food demand continues to grow worldwide, particularly in Asia. Agricultural
companies had a difficult time in the 1980s and had to restructure and cut
costs. Now lean and efficient, they have been able to compete
internationally, especially given the favorable industry backdrop. I
believe we're on the brink of a multi-year agricultural expansion that
should lead to higher earnings.
Q. WHAT OTHER THEMES ARE EVIDENT IN THE FUND?
A. I favor companies that are dominant globally in their industry.
Caterpillar, the fund's largest holding at the end of the period, is a good
example. Caterpillar currently is the leading global supplier of
construction machinery with its market share approaching 50%. In addition,
nearly 50% of its sales have come from outside the United States. While the
U.S. recovery has been a boost to its earnings, the next leg of the story
will happen if international economies extend the cycle. Against that
backdrop we should see improving profits and large free cash flow
generation. Caterpillar recently announced a significant stock buy-back
program, which also should boost earnings.
Q. WHERE ELSE HAVE YOU FOUND OPPORTUNITIES?
A. I've begun to position the fund in late-cycle companies. Late-cycle
companies usually benefit from capital spending that occurs at the end of
the economic cycle, after companies have grown earnings and profits and
begin to bump up against capacity constraints. An example is Harnischfeger
Industries, a company that should get a boost from the capital spending
trends in the mining and paper industries.
Q. YOU'VE INCREASED THE FUND'S HOLDINGS IN TECHNOLOGY-RELATED INDUSTRIES.
WHAT'S YOUR STRATEGY?
A. Technology - hardware and peripherals - is one of the most important
types of capital equipment that companies are investing in today. I've
increased the fund's technology holdings during the past six months,
initiating a large position in Compaq and increasing the fund's stake in
Intel. My strategy is to increase the overall growth profile of companies
in the fund and move away from those with slower growth rates. Investing in
technology can be an efficient way to accomplish that goal.
Q. WHAT INVESTMENTS DIDN'T TURN OUT AS YOU WOULD HAVE LIKED?
A. The pump and valve industry didn't see the recovery I thought it would.
Six months ago I thought this area would have been further along in its
recovery by the end of August than it was. As an example, Goulds Pumps, one
of the fund's top holdings six months ago, remained flat during the period
and underperformed the fund. I also eliminated the fund's position in
Trinity Industries because rail car orders haven't kept up the pace they
were showing earlier in the year.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. The themes in the fund have worked well during the past six months and I
think they still have some strength. I think there may be more earnings
gains in store for investors if we stick to the themes the fund's been
working on.
FUND FACTS
START DATE: September 29, 1986
TRADING SYMBOL: FSCGX
SIZE: as of August 31, 1995, more than
$116 million
MANAGER: Robert Bertelson, since December
1994; manager Fidelity Select Energy
Portfolio, 1992 - 1994; equity analyst, since
1991; joined Fidelity in 1991
(checkmark)
INDUSTRIAL EQUIPMENT PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 88.9%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES - 4.0%
AUTO & TRUCK PARTS - 1.8%
Titan Wheel International, Inc. 78,250 $ 2,093,184
INDUSTRIAL TRUCKS - 2.2%
NACCO Industries, Inc. Class A 43,800 2,518,500
TOTAL AUTOS, TIRES, & ACCESSORIES 4,611,684
BUILDING MATERIALS - 1.9%
AIRCONDITIONING EQUIPMENT - 1.5%
Tecumseh Products Co. Class A 36,100 1,750,850
FLUID VALVE & HOSE FITTINGS - 0.4%
Cooper Cameron Corp. 17,399 411,051
TOTAL BUILDING MATERIALS 2,161,901
COMMUNICATIONS EQUIPMENT - 0.6%
TELEPHONE INTERCONNECT SYSTEMS - 0.6%
General Instrument Corp. 20,000 730,000
COMPUTERS & OFFICE EQUIPMENT - 10.7%
ELECTRONIC COMPUTERS - 4.3%
International Business Machines Corp. 47,700 4,930,988
MINI & MICRO COMPUTERS - 6.4%
Compaq Computer Corp. 151,000 7,210,250
TOTAL COMPUTERS & OFFICE EQUIPMENT 12,141,238
ELECTRICAL EQUIPMENT - 2.5%
ELECTRICAL MACHINERY - 1.6%
General Signal Corp. 50,200 1,782,100
MOTORS & GENERATORS - 0.9%
Pacific Scientific Co. 40,000 1,005,000
TOTAL ELECTRICAL EQUIPMENT 2,787,100
ELECTRONICS - 4.0%
ELECTRONICS & ELECTRONIC COMPONENTS - 1.1%
Hitachi Ltd. ADR 11,600 1,261,500
SEMICONDUCTORS - 2.9%
Intel Corp. 54,400 3,338,800
TOTAL ELECTRONICS 4,600,300
INDUSTRIAL MACHINERY & EQUIPMENT - 63.1%
BALL & ROLLER BEARINGS - 1.5%
Bearings, Inc. 48,900 1,656,488
CONSTRUCTION EQUIPMENT - 8.7%
Caterpillar, Inc. 139,100 9,337,088
Svedala Industrial 20,000 551,560
9,888,648
FARM MACHINERY & EQUIPMENT - 17.3%
AGCO Corp. 50,000 2,431,250
Case Corp. 173,100 6,534,525
Deere & Co. 99,800 8,532,900
Varity Corp. 47,500 2,161,250
19,659,925
SHARES VALUE (NOTE 1)
GENERAL INDUSTRIAL MACHINERY - 26.4%
Commercial Intertech Corp. 42,500 $ 855,313
Cooper Industries, Inc. 22,767 865,146
Dover Corp. 75,800 6,045,050
Harnischfeger Industries, Inc. 183,717 6,751,600
Illinois Tool Works, Inc. 50,400 3,087,000
Ingersoll-Rand Co. 130,300 4,935,113
Parker-Hannifin Corp. 156,900 6,217,163
Scottsman Industries, Inc. 40,100 751,875
TRINOVA Corp. 14,200 521,850
30,030,110
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
Hardinge Brothers, Inc. 21,800 506,850
MACHINE TOOLS, METAL CUTTING - 3.2%
Gleason Corp. 70,000 2,345,000
Greenfield Industries, Inc. 37,000 1,248,750
3,593,750
PUMPING EQUIPMENT - 5.1%
Duriron Co., Inc. 71,250 1,816,875
Goulds Pumps, Inc. 96,700 2,079,050
IDEX Corp. 47,000 1,891,750
5,787,675
SPECIAL INDUSTRIAL MACHINERY - 0.5%
Valmet Corp. OY Ord. 20,000 574,091
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 71,697,537
IRON & STEEL - 0.7%
METAL FORGINGS & STAMPINGS - 0.7%
TriMas Corp. 37,800 807,975
PAPER & FOREST PRODUCTS - 1.4%
PAPER - 1.4%
Albany International Corp. Class A 65,800 1,595,650
TOTAL COMMON STOCKS
(Cost $82,468,366) 101,133,385
REPURCHASE AGREEMENTS - 11.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account, at 5.82% dated
8/31/95 due 9/1/95 $ 12,563,031 12,561,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $95,029,366) $ 113,694,385
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $40,880,253 and $71,366,722, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $26,235 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $4,448,000 and $2,102,125,
respectively. The weighted average interest rate paid was 6.7% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $95,117,475. Net unrealized appreciation aggregated
$18,576,910, of which $19,564,444 related to appreciated investment
securities and $987,534 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $907,000 which will expire on February 28, 2003.
On October 26, 1990, the fund acquired all of the assets of Automation and
Machinery Portfolio in a tax-free exchange for shares of Industrial
Equipment Portfolio. Automation and Machinery Portfolio has a capital loss
carryover of approximately $106,000 available to offset future realized
capital gains in Industrial Equipment Portfolio, to the extent provided by
regulations.
The fund has elected to defer to its fiscal year ending February 28, 1996
$515,000 of losses recognized during the period November 1,1994 to February
28, 1995.
INDUSTRIAL EQUIPMENT PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $12,561,000) (cost $95,029,366) - See $ 113,694,385
accompanying schedule
Cash 829
Receivable for investments sold 5,044,006
Receivable for fund shares sold 588,353
Dividends receivable 139,020
Redemption fees receivable 207
Prepaid expenses 10,589
TOTAL ASSETS 119,477,389
LIABILITIES
Payable for investments purchased $ 1,906,250
Payable for fund shares redeemed 1,113,301
Accrued management fee 61,483
Other payables and accrued expenses 105,999
TOTAL LIABILITIES 3,187,033
NET ASSETS $ 116,290,356
Net Assets consist of:
Paid in capital $ 92,161,075
Undistributed net investment income 142,369
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 5,321,893
Net unrealized appreciation (depreciation) on investments 18,665,019
NET ASSETS, for 4,507,585 shares outstanding $ 116,290,356
NET ASSET VALUE and redemption price per share ($116,290,356 (divided by) 4,507,585 shares) $25.80
Maximum offering price per share (100/97.00 of $25.80) $26.60
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 752,414
Dividends
Interest 224,416
TOTAL INCOME 976,830
EXPENSES
Management fee $ 348,957
Transfer agent 467,814
Fees
Redemption fees (77,470
)
Accounting fees and expenses 57,048
Non-interested trustees' compensation 579
Custodian fees and expenses 8,541
Registration fees 10,589
Audit 12,642
Legal 427
Interest 6,226
Miscellaneous 1,007
Total expenses before reductions 836,360
Expense reductions (4,998 831,362
)
NET INVESTMENT INCOME 145,468
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 6,847,091
Foreign currency transactions (483 6,846,608
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 19,090,808
Assets and liabilities in (15 19,090,793
foreign currencies )
NET GAIN (LOSS) 25,937,401
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 26,082,869
OTHER INFORMATION $240,623
Sales Charges Paid to FDC
Deferred sales charges withheld $5,145
by FDC
Exchange fees withheld by FSC $58,043
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 145,468 $ 79,635
Net investment income
Net realized gain (loss) 6,846,608 (1,498,946
)
Change in net unrealized appreciation (depreciation) 19,090,793 (14,340,997
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 26,082,869 (15,760,308
)
Distributions to shareholders (48,754 (37,665
From net investment income ) )
From net realized gain - (1,765,984
)
TOTAL DISTRIBUTIONS (48,754 (1,803,649
) )
Share transactions 98,452,948 154,753,559
Net proceeds from sales of shares
Reinvestment of distributions 47,496 1,784,486
Cost of shares redeemed (118,289,193 (235,232,664
) )
Paid in capital portion of redemption fees 77,052 214,170
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (19,711,697 (78,480,449
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,322,418 (96,044,406
)
NET ASSETS
Beginning of period 109,967,938 206,012,344
End of period (including undistributed net investment income of $142,369 and $45,655, respectively)$ 116,290,356 $ 109,967,938
OTHER INFORMATION
Shares
Sold 4,247,679 7,719,747
Issued in reinvestment of distributions 2,145 90,354
Redeemed (5,230,739 (12,319,237
) )
Net increase (decrease) (980,915) (4,509,136)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.04 $ 20.61 $ 15.04 $ 13.89 $ 11.60 $ 12.41
Income from Investment Operations
Net investment income (loss) .03 .01 - .02 (.07) .01
Net realized and unrealized gain (loss) 5.72 (.44) 5.92 1.09 2.39 (.80)
Total from investment operations 5.75 (.43) 5.92 1.11 2.32 (.79)
Less Distributions (.01) (.01) E (.01) - - -
From net investment income
In excess of net investment income - - - - (.11) (.09)
From net realized gain - (.16) E (.40) - - -
Total distributions (.01) (.17) (.41) - (.11) (.09)
Redemption fees added to paid in capital .02 .03 .06 .04 .08 .07
Net asset value, end of period $ 25.80 $ 20.04 $ 20.61 $ 15.04 $ 13.89 $ 11.60
TOTAL RETURN B, C 28.80% (1.93)% 40.07% 8.28% 20.91% (5.90)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 116,290 $ 109,968 $ 206,012 $ 14,601 $ 7,529 $ 1,949
Ratio of expenses to average net assets 1.44% A 1.78% 1.68% 2.49% A 2.49% 2.52%
Ratio of expenses to average net assets before 1.45% A 1.80% 1.69% 3.40% A 2.86% 2.99%
expense reductions
Ratio of net investment income (loss) to average net .25% A .06% .01% .15% A (.57)% .09%
assets
Portfolio turnover rate 77% A 131% 95% 407% A 167% 43%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
INDUSTRIAL MATERIALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
INDUSTRIAL MATERIALS 15.15% 12.51% 144.82% 184.38%
INDUSTRIAL MATERIALS
(INCL. 3% SALES CHARGE) 11.70% 9.13% 137.48% 175.85%
S&P 500 16.81% 21.45% 102.17% 221.28%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on September 29, 1986. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
INDUSTRIAL MATERIALS 12.51% 19.61% 12.42%
INDUSTRIAL MATERIALS
(INCL. 3% SALES CHARGE) 9.13% 18.88% 12.03%
S&P 500 21.45% 15.12% 13.96%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select IndustriStandard & Poor
09/29/86 9700.00 10000.00
09/30/86 9729.10 9962.80
10/31/86 10262.60 10537.66
11/30/86 10621.50 10793.72
12/31/86 10233.50 10518.48
01/31/87 12008.60 11935.32
02/28/87 13017.40 12406.77
03/31/87 13958.30 12765.32
04/30/87 14123.20 12651.71
05/31/87 13764.30 12761.78
06/30/87 14482.10 13406.25
07/31/87 15820.70 14085.95
08/31/87 16363.90 14611.35
09/30/87 16606.40 14291.37
10/31/87 10301.40 11213.00
11/30/87 10252.90 10289.05
12/31/87 11834.99 11072.05
01/31/88 11222.33 11538.18
02/29/88 12544.89 12075.86
03/31/88 12768.56 11702.72
04/30/88 12788.01 11832.62
05/31/88 12476.82 11935.56
06/30/88 13838.28 12483.41
07/31/88 13322.87 12435.97
08/31/88 12603.24 12013.15
09/30/88 12710.21 12524.91
10/31/88 12476.82 12873.10
11/30/88 12360.12 12689.01
12/31/88 13117.42 12911.07
01/31/89 13908.23 13856.16
02/28/89 13305.24 13511.14
03/31/89 13166.85 13825.95
04/30/89 13572.13 14543.52
05/31/89 13750.06 15132.53
06/30/89 12949.38 15046.28
07/31/89 14115.81 16404.95
08/31/89 15242.70 16726.49
09/30/89 14313.51 16657.91
10/31/89 13137.19 16271.45
11/30/89 13325.01 16603.39
12/31/89 13700.64 17001.87
01/31/90 12652.83 15861.04
02/28/90 12870.30 16065.65
03/31/90 13245.93 16491.39
04/30/90 12287.08 16079.11
05/31/90 13028.46 17646.82
06/30/90 12890.20 17526.82
07/31/90 12738.07 17470.73
08/31/90 11267.51 15891.38
09/30/90 10466.31 15117.47
10/31/90 10344.61 15052.46
11/30/90 10892.27 16024.85
12/31/90 11348.65 16471.95
01/31/91 11754.32 17190.12
02/28/91 12616.37 18419.22
03/31/91 12788.78 18864.96
04/30/91 12809.06 18910.24
05/31/91 13904.37 19727.16
06/30/91 13752.20 18823.66
07/31/91 14302.29 19700.84
08/31/91 14638.46 20167.75
09/30/91 14444.91 19830.95
10/31/91 15066.30 20096.68
11/30/91 13864.26 19286.79
12/31/91 15412.65 21493.19
01/31/92 16084.98 21093.42
02/29/92 16869.37 21367.64
03/31/92 16573.95 20950.97
04/30/92 17439.83 21566.92
05/31/92 17643.57 21672.60
06/30/92 17215.31 21349.68
07/31/92 17602.63 22222.88
08/31/92 16491.63 21767.31
09/30/92 16267.40 22024.17
10/31/92 16450.86 22101.25
11/30/92 17062.42 22854.91
12/31/92 17319.00 23136.02
01/31/93 17687.49 23330.36
02/28/93 17851.26 23647.66
03/31/93 18148.10 24146.62
04/30/93 17881.97 23562.27
05/31/93 18618.95 24193.74
06/30/93 18669.79 24263.90
07/31/93 18926.53 24166.85
08/31/93 19419.46 25082.77
09/30/93 18813.56 24889.63
10/31/93 19922.66 25404.85
11/30/93 20189.67 25163.50
12/31/93 21021.49 25467.98
01/31/94 22726.21 26333.89
02/28/94 22253.82 25620.25
03/31/94 21627.38 24503.20
04/30/94 22439.14 24816.84
05/31/94 22665.59 25223.84
06/30/94 22428.85 24605.86
07/31/94 23262.60 25412.93
08/31/94 24518.37 26454.86
09/30/94 24209.57 25806.71
10/31/94 23890.48 26387.37
11/30/94 22202.40 25426.34
12/31/94 22743.96 25803.41
01/31/95 22101.83 26472.49
02/28/95 23955.73 27504.13
03/31/95 24504.65 28315.77
04/30/95 24618.13 29149.67
05/31/95 24369.15 30314.78
06/30/95 25458.44 31019.00
07/31/95 27657.79 32047.59
08/31/95 27595.54 32128.03
Let's say you invested $10,000 in Fidelity Select Industrial Materials
Portfolio on September 29, 1986, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $27,585 - a
175.85% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $32,128 over the same period - a 221.28% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Aluminum Co. of America 9.1
Kaiser Aluminum Corp. 6.6
Alumax, Inc. 6.6
Alcan Aluminum Ltd. 5.4
Western Mining Holdings Ltd. 5.3
Reynolds Metals Co. 4.3
Inco Ltd. 3.9
Champion International Corp. 3.2
QNI Ltd. 2.6
British Petroleum PLC ADR 2.4
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 53.4
Row: 1, Col: 2, Value: 6.1
Row: 1, Col: 3, Value: 6.6
Row: 1, Col: 4, Value: 6.8
Row: 1, Col: 5, Value: 7.9
Row: 1, Col: 6, Value: 19.2
Prime Nonferrous Smelting 19.2%
Gold Ores 7.9%
Aluminum Sheet, Plate &
Foil 6.8%
Aluminum, Extruded
Products 6.6%
Metal Ores 6.1%
All Others 53.4%*
* INCLUDES SHORT-TERM INVESTMENTS
INDUSTRIAL MATERIALS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Doug Chase,
Portfolio Manager of Fidelity Select Industrial Materials Portfolio
Q. DOUG, HOW DID THE FUND DO?
A. For the six months ended August 31, 1995, Select Industrial Materials
returned 15.15%. The Standard & Poor's 500 Index returned 16.81% for the
same time period. For the 12 months ended August 31, 1995, the portfolio
returned 12.51%, while the S&P returned 21.45%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S RESULTS?
A. I tried to own stocks where I thought the supply, demand and inventory
fundamentals were the best, and where the values were attractive. That led
me to make a large investment in aluminum stocks. Though it was impossible
to forecast GNP growth exactly, I thought aluminum was going to outperform
paper, chemicals and other materials or metals that the fund could invest
in under any circumstances. Most people think that the economy today isn't
as strong as they expected it to be six months ago. Although most
industrial materials stocks lagged the market, aluminum stocks have done
very well, despite the fact that they usually rise and fall with the
economy.
Q. WHAT CAUSED ALUMINUM STOCKS TO OUTPERFORM?
A. The industry outlook was favorable because demand exceeded supply.
Months ago, aluminum manufacturers curtailed capacity due to the low price
for aluminum. During the period, stock prices began reacting to the
business prospects for the industry and the tightening market for aluminum.
In addition, when the Federal Reserve Board cut short-term interest rates
during the summer, aluminum stocks really took off.
Q. WHICH ALUMINUM STOCKS PERFORMED BEST?
A. The five North American aluminum stocks have been in the fund's top 10
holdings for most of the six months ended August 31, 1995. Aluminum Company
of America (ALCOA), the fund's top holding at the end of the period, was
one of the best performing stocks in the fund. It started out at $39 and
went as high as $60 during the period. Alcan Aluminum also appreciated
markedly during the past six months. I bought a lot of Kaiser Aluminum in
June when the stock price was between $10 - $12 per share; by mid-August,
it was trading as high as $21 per share.
Q. WHERE ELSE HAVE YOU FOUND INVESTMENT OPPORTUNITIES?
A. I've begun to accumulate a large position in stocks that are exposed to
nickel. Nickel looked extremely attractive as an investment. In its last
price cycle, nickel was about $8 per pound, and had spiked as high as $11.
For the last year, it's been hovering between $3 and $5. At the beginning
of 1995, there was a sell-off and nickel dropped from $4.75 to $3.00 in
three weeks. That was a huge move in the metal, and the stocks followed.
Russia supplies about 25% of the world's nickel and the large amount of the
material coming into the Western market was largely responsible for the big
decline in nickel prices from the last peak. But something interesting has
happened. We should have seen a big increase in nickel inventory this
summer since Russia's nickel deposits are in the Arctic Circle and can only
ship in warm weather. But inventories never increased. Therefore, I think
the price of nickel has the potential to go up.
Q. HOW IS NICKEL USED?
A. The biggest use of nickel is in stainless steel. Unlike carbon steel,
it's rust-proof, has a hardening characteristic and is very heat resistant.
Though stainless is more expensive than carbon, it doesn't rust over its
lifetime like carbon does. You'll find stainlees steel in everything from
fast-food store counter tops to auto exhaust systems.
Q. WHAT INVESTMENTS PROVED DISAPPOINTING?
A. I held some paper stocks a little too long and that hurt the fund's
performance. The first quarter of the year was great, but I should have
reduced the fund's position in Stone Container and Temple Inland earlier
than I did. I have kept the fund's position in Champion, which I still
consider to be undervalued.
Q. WHAT'S AHEAD FOR THE FUND?
A. If we don't head into recession, I think aluminum can stay strong for
some time to come. There's a correlation between the price of the metal and
the price of the stocks and I think the price of the metal is going up. I
also think the business prospects for nickel will continue to improve over
the next six months.
FUND FACTS
START DATE: September 29, 1986
TRADING SYMBOL: FSDPX
SIZE: as of August 31, 1995, more than
$157 million
MANAGER: Douglas B. Chase, since November
1994; equity analyst, steel, non-ferrous
metals, since 1993; joined Fidelity in 1993
(checkmark)
INDUSTRIAL MATERIALS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 79.8%
SHARES VALUE (NOTE 1)
CHEMICALS & PLASTICS - 8.5%
CHEMICALS - 6.0%
AKZO NV sponsored ADR 30,000 $ 1,770,000
du Pont (E.I.) de Nemours & Co. 60,000 3,922,500
Grace (W.R.) & Co. 48,200 3,211,325
Union Carbide Corp. 6,200 220,100
Witco Corp. 43,900 1,459,675
10,583,600
CHEMICALS, GENERAL - 1.0%
Great Lakes Chemical Corp. 26,700 1,765,538
PLASTICS, RESINS & ELASTOMERS - 1.5%
Praxair, Inc. 100,000 2,600,000
TOTAL CHEMICALS & PLASTICS 14,949,138
CONGLOMERATES - 0.5%
Brascan Ltd. Class A 50,000 818,483
INDUSTRIAL MACHINERY & EQUIPMENT - 2.8%
CONSTRUCTION EQUIPMENT - 0.3%
Caterpillar, Inc. 8,200 550,425
FARM MACHINERY & EQUIPMENT - 0.4%
Kverneland Gruppen AS 50,000 751,382
GENERAL INDUSTRIAL MACHINERY - 0.0%
Ingersoll-Rand Co. 1,900 71,963
STORAGE BATTERIES - 2.1%
Exide Corp. 70,600 3,680,025
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,053,795
IRON & STEEL - 3.4%
BLAST FURNACES - 3.4%
Armco, Inc. (a) 125,000 781,250
Huntco, Inc. Class A 200,000 3,450,000
Republic Engineered Steels, Inc. 262,000 1,801,250
6,032,500
METALS & MINING - 44.9%
ALUMINUM, EXTRUDED PRODUCTS - 6.6%
Alumax, Inc. (a) 339,700 11,592,263
ALUMINUM SHEET, PLATE & FOIL - 6.6%
Kaiser Aluminum Corp. (a) 671,100 11,660,363
COPPER ORES - 0.2%
Freeport McMoRan Copper Co. Class A 20,000 467,500
METAL MINING SERVICES - 0.4%
Eramet SA 10,000 719,810
METAL ORES - 6.1%
Comalco Ltd. 296,800 1,511,944
Falconbridge Ltd. 50,000 1,064,958
Falconbridge Ltd. (1st Installment
Receipt) (c) 250,000 2,139,218
Pechiney International SA 23,000 1,491,374
QNI Ltd. 2,260,400 4,540,460
10,747,954
MISCELLANEOUS METAL ORES - 0.6%
Stillwater Mining Co. (b) 50,000 1,093,750
PRIMARY PRODUCTION OF ALUMINUM - 5.2%
Capral Aluminium Ltd. 636,200 1,601,318
Reynolds Metals Co. 126,600 7,564,350
9,165,668
SHARES VALUE (NOTE 1)
PRIME NONFERROUS SMELTING - 19.2%
Alcan Aluminium Ltd. 291,975 $ 9,531,903
Aluminum Co. of America 281,800 16,097,825
Inco Ltd. 200,000 6,975,706
Noranda, Inc. 65,000 1,317,943
33,923,377
TOTAL METALS & MINING 79,370,685
OIL & GAS - 4.5%
OIL & GAS EXPLORATION - 4.5%
Amerada Hess Corp. 78,300 3,709,463
British Petroleum PLC ADR 46,342 4,176,573
7,886,036
PAPER & FOREST PRODUCTS - 4.4%
PAPER - 4.4%
Champion International Corp. 100,000 5,662,500
Domtar Inc. 151,900 1,426,941
Donohue, Inc. Class A 50,000 697,571
7,787,012
PRECIOUS METALS - 7.9%
GOLD ORES - 7.9%
Barrick Gold Corp. 95,400 2,404,609
Newmont Gold Co. 20,000 830,000
Newmont Mining Corp. 30,000 1,305,000
Western Mining Holdings Ltd. 1,399,400 9,389,358
13,928,967
RAILROADS - 1.4%
CSX Corp. 27,000 2,227,500
Santa Fe Pacific Corp. 10,000 283,750
2,511,250
SERVICES - 1.5%
SURVEYING SERVICES - 1.5%
Western Atlas, Inc. (a) 60,000 2,722,500
TOTAL COMMON STOCKS
(Cost $126,005,935) 141,060,366
CONVERTIBLE PREFERRED STOCKS - 0.2%
METALS & MINING - 0.2%
ALUMINUM SHEET, PLATE & FOIL - 0.2%
Kaiser Aluminum Corp. depositary
shares representing 1/10 share,
Series A, $.65 (Cost $395,460) 31,200 358,800
REPURCHASE AGREEMENTS - 20.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 35,276,702 35,271,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $161,672,395) $ 176,690,166
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,093,750 or 0.7% of net
assets.
3. Purchased on an installment basis. Market value reflects only those
payments made through August 31, 1995. The remaining installments
aggregating CAD 4,750,000 are due July 31, 1996 and January 31, 1997.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $101,707,445 and $138,466,140, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $80,178 for the period (see
Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $11,307,650 and $12,365,200, respectively (see Note
7 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 70.5%
Canada 14.9
Australia 9.5
United Kingdom 2.4
France 1.3
Netherlands 1.0
Others (individually less than 1%) 0.4
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $162,205,713. Net unrealized appreciation aggregated
$14,484,453, of which $16,791,340 related to appreciated investment
securities and $2,306,887 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of approx-
imately $6,176,000 of which $5,277,000, $141,000 and $758,000 will expire
on February 28, 1997, 1998 and 1999, respectively.
The fund has elected to defer to its fiscal year ending February 28, 1996
$4,644,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
INDUSTRIAL MATERIALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $35,271,000) (cost $161,672,395) - $ 176,690,166
See accompanying schedule
Cash 953
Receivable for investments sold 265,250
Receivable for fund shares sold 987,113
Dividends receivable 139,388
Redemption fees receivable 3,480
Prepaid expenses 12,699
TOTAL ASSETS 178,099,049
LIABILITIES
Payable for investments purchased $ 3,913,671
Payable for fund shares redeemed 3,876,663
Accrued management fee 81,322
Other payables and 195,581
accrued expenses
Collateral on securities loaned, 12,365,200
at value
TOTAL LIABILITIES 20,432,437
NET ASSETS $ 157,666,612
Net Assets consist of:
Paid in capital $ 148,100,309
Undistributed net investment income 197,378
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (5,649,466
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 15,018,391
NET ASSETS, for 5,928,741 shares outstanding $ 157,666,612
NET ASSET VALUE and redemption price per share ($157,666,612 (divided by) 5,928,741 shares) $26.59
Maximum offering price per share (100/97.00 of $26.59) $27.41
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 847,508
Dividends
Interest (including income on securities loaned of $49,826) 467,817
TOTAL INCOME 1,315,325
EXPENSES
Management fee $ 427,960
Transfer agent 696,654
Fees
Redemption fees (105,618
)
Accounting and security lending fees 70,247
Non-interested trustees' compensation 835
Custodian fees and expenses 11,833
Registration fees 12,699
Audit 19,723
Legal 748
Miscellaneous 1,655
Total expenses before reductions 1,136,736
Expense reductions (23,152 1,113,584
)
NET INVESTMENT INCOME 201,741
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 5,891,091
Foreign currency transactions 1 5,891,092
Change in net unrealized appreciation (depreciation) on:
Investment securities 9,125,259
Assets and liabilities in 230 9,125,489
foreign currencies
NET GAIN (LOSS) 15,016,581
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 15,218,322
OTHER INFORMATION $227,602
Sales Charges Paid to FDC
Deferred sales charges withheld $5,260
by FDC
Exchange fees withheld by FSC $85,200
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 201,741 $ 1,365,664
Net investment income
Net realized gain (loss) 5,891,092 (284,364
)
Change in net unrealized appreciation (depreciation) 9,125,489 5,772,228
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 15,218,322 6,853,528
Distributions to shareholders from net investment income (247,247 (1,376,864
) )
Share transactions 104,749,320 260,333,131
Net proceeds from sales of shares
Reinvestment of distributions 243,968 1,355,960
Cost of shares redeemed (145,869,137 (239,750,488
) )
Paid in capital portion of redemption fees 117,373 318,123
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (40,758,476 22,256,726
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (25,787,401 27,733,390
)
NET ASSETS
Beginning of period 183,454,013 155,720,623
End of period (including undistributed net investment income of $197,378 and $242,884, respectively)$ 157,666,612 $ 183,454,013
OTHER INFORMATION
Shares
Sold 4,056,454 11,552,985
Issued in reinvestment of distributions 10,169 64,252
Redeemed (6,069,165 (10,870,758
) )
Net increase (decrease) (2,002,542) 746,479
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.13 $ 21.67 $ 17.44 $ 17.12 $ 12.63 $ 12.43
Income from Investment Operations
Net investment income .04 .17 .15 .12 .04 .15
Net realized and unrealized gain (loss) 3.44 1.43 4.07 .19 4.32 .37
Total from investment operations 3.48 1.60 4.22 .31 4.36 .52
Less Distributions (.04) (.18) (.06) (.08) - -
From net investment income
In excess of net investment income - - - - (.06) (.34)
Total distributions (.04) (.18) (.06) (.08) (.06) (.34)
Redemption fees added to paid in capital .02 .04 .07 .09 .19 .02
Net asset value, end of period $ 26.59 $ 23.13 $ 21.67 $ 17.44 $ 17.12 $ 12.63
TOTAL RETURN B, C 15.15% 7.65% 24.66% 2.36% 36.15% 4.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 157,667 $ 183,454 $ 155,721 $ 25,041 $ 22,184 $ 2,689
Ratio of expenses to average net assets 1.57% A 1.53% 2.08% 2.02% A 2.47% 2.49%
Ratio of expenses to average net assets before 1.60% A 1.56% 2.10% 2.02% A 2.81% 2.67%
expense reductions
Ratio of net investment income to average net assets .28% A .77% .75% .86% A .25% 1.30%
Portfolio turnover rate 156% A 139% 185% 273% A 222% 148%
</TABLE>
<TABLE>
<CAPTION>
<S><C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
PAPER AND FOREST PRODUCTS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
PAPER AND FOREST PRODUCTS 15.84% 19.98% 167.47% 204.63%
PAPER AND FOREST PRODUCTS
(INCL. 3% SALES CHARGE) 12.36% 16.38% 159.44% 195.49%
S&P 500 16.81% 21.45% 102.17% 201.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 30, 1986. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
PAPER AND FOREST PRODUCTS 19.98% 21.75% 12.90%
PAPER AND FOREST PRODUCTS
(INCL. 3% SALES CHARGE) 16.38% 21.01% 12.53%
S&P 500 21.45% 15.12% 12.78%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select Paper & Standard & Poor
06/30/86 9700.00 10000.00
07/31/86 9515.70 9488.77
08/31/86 10689.40 10192.84
09/30/86 10573.00 9349.89
10/31/86 11358.70 9889.38
11/30/86 11834.00 10129.69
12/31/86 11659.40 9871.39
01/31/87 14714.90 11201.06
02/28/87 15190.20 11643.50
03/31/87 16354.20 11980.00
04/30/87 15384.20 11873.38
05/31/87 14501.50 11976.68
06/30/87 15141.70 12581.50
07/31/87 15326.00 13219.38
08/31/87 16441.50 13712.46
09/30/87 15946.80 13412.16
10/31/87 11213.20 10523.18
11/30/87 10825.20 9656.07
12/31/87 12118.45 10390.90
01/31/88 11629.03 10828.35
02/29/88 12724.90 11332.96
03/31/88 12320.60 10982.77
04/30/88 12458.91 11104.68
05/31/88 12320.60 11201.29
06/30/88 13597.35 11715.43
07/31/88 12990.89 11670.91
08/31/88 12352.52 11274.10
09/30/88 12597.23 11754.37
10/31/88 12320.60 12081.14
11/30/88 12054.61 11908.38
12/31/88 12938.95 12116.78
01/31/89 13066.96 13003.73
02/28/89 12682.95 12679.94
03/31/89 12693.61 12975.38
04/30/89 13152.29 13648.80
05/31/89 13386.96 14201.58
06/30/89 12533.61 14120.63
07/31/89 13738.97 15395.72
08/31/89 14720.33 15697.48
09/30/89 13909.64 15633.12
10/31/89 13280.29 15270.43
11/30/89 13184.29 15581.95
12/31/89 13466.66 15955.91
01/31/90 12235.55 14885.27
02/28/90 12354.34 15077.29
03/31/90 12699.91 15476.84
04/30/90 11879.17 15089.92
05/31/90 12667.52 16561.19
06/30/90 12365.14 16448.57
07/31/90 12548.72 16395.93
08/31/90 11047.63 14913.74
09/30/90 9978.50 14187.44
10/31/90 9665.33 14126.44
11/30/90 10637.26 15039.00
12/31/90 11432.18 15458.59
01/31/91 12376.62 16132.59
02/28/91 12969.65 17286.07
03/31/91 13233.21 17704.39
04/30/91 13881.15 17746.88
05/31/91 15473.53 18513.55
06/30/91 15078.18 17665.63
07/31/91 15089.16 18488.84
08/31/91 15166.03 18927.03
09/30/91 14583.99 18610.95
10/31/91 15133.09 18860.33
11/30/91 13979.98 18100.26
12/31/91 15406.61 20170.93
01/31/92 16823.56 19795.75
02/29/92 16902.28 20053.10
03/31/92 17014.74 19662.06
04/30/92 17284.64 20240.13
05/31/92 16801.07 20339.30
06/30/92 16689.46 20036.25
07/31/92 16565.50 20855.73
08/31/92 15900.62 20428.19
09/30/92 15731.59 20669.24
10/31/92 16497.88 20741.58
11/30/92 17106.41 21448.87
12/31/92 17263.87 21712.69
01/31/93 17795.59 21895.08
02/28/93 18191.55 22192.85
03/31/93 18168.92 22661.12
04/30/93 18995.42 22112.72
05/31/93 19052.02 22705.34
06/30/93 18644.49 22771.19
07/31/93 18452.05 22680.10
08/31/93 18950.14 23539.68
09/30/93 18044.52 23358.43
10/31/93 18746.37 23841.94
11/30/93 19912.36 23615.45
12/31/93 20467.06 23901.19
01/31/94 22844.31 24713.83
02/28/94 22199.06 24044.09
03/31/94 19844.44 22995.77
04/30/94 19822.26 23290.11
05/31/94 20630.86 23672.07
06/30/94 20422.94 23092.10
07/31/94 22155.65 23849.53
08/31/94 24627.66 24827.36
09/30/94 25066.62 24219.09
10/31/94 23507.17 24764.01
11/30/94 22479.09 23862.11
12/31/94 23360.76 24215.98
01/31/95 23203.89 24843.91
02/28/95 25508.60 25812.07
03/31/95 25689.59 26573.79
04/30/95 25795.82 27356.38
05/31/95 26222.30 28449.82
06/30/95 28598.39 29110.71
07/31/95 29573.20 30076.02
08/31/95 29548.83 30151.51
Let's say you invested $10,000 in Fidelity Select Paper and Forest Products
Portfolio on June 30, 1986, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $29,549 - a
195.49% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $30,152 over the same period - a 201.52% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Champion International Corp. 9.2
Boise Cascade Corp. 5.7
Consolidated Papers, Inc. 5.7
Weyerhaeuser Co. 5.4
Bowater, Inc. 5.2
James River Corp. of Virginia 5.1
Mead Corp. 4.8
Kimberly-Clark Corp. 4.0
Willamette Industries, Inc. 3.8
Union Camp Corp. 3.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 3.6
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 2.2
Row: 1, Col: 4, Value: 93.2
Paper & Allied Products 93.2%
Services for Print Industry 2.2%
Paper Containers 1.0%
All Others 3.6%*
* INCLUDES SHORT-TERM INVESTMENTS
PAPER AND FOREST PRODUCTS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Scott Offen,
Portfolio Manager of Fidelity Select Paper and Forest Products Portfolio
Q. SCOTT, HOW HAS THE FUND PERFORMED?
A. The fund had a total return of 15.84% for the six months ended August
31, 1995. During the same period, the Standard & Poor's Composite Index of
500 Stocks returned 16.81%. For the 12 months ended August 31, 1995, the
fund rose 19.98%, while the S&P 500 was up 21.45%.
Q. WHY DID THE FUND LAG THE BROAD MARKET?
A. Despite the fact that paper companies have posted record earnings, many
investors believe we're near the peak of the paper cycle. Along with
increasing investor anxiety, we've seen a drop in demand for paper products
over the summer, leading to uncertainty about what's on the horizon. Given
that backdrop, I'm very pleased with the returns of the fund. Its positive
performance position was the result of the stocks I chose for the
portfolio.
Q. WHY HAS THERE BEEN UNCERTAINTY ABOUT PAPER STOCKS?
A. Paper stock prices generally start to go up before paper company
earnings do. And, paper stock prices tend to go down some time before paper
company earnings. That's because investors try to stay ahead of the paper
cycle. While paper companies have continued to post solid earnings, there
was a more pronounced slowdown in demand this summer. With paper prices
steadily rising, businesses that use paper inventoried excess supply to
protect themselves from future price increases. When businesses started
experiencing their typical summer slowdown, they started to liquidate their
inventories rather than purchasing more paper. In addition, paper companies
have started to post all-time high profit margins and most paper prices are
at, or approaching, all-time highs. Typically, that's not a situation that
lasts too long, and makes investors nervous that the next turn will be
downward.
Q. SO WHY HAVEN'T PAPER STOCKS UNDERPERFORMED EVEN MORE SHARPLY?
A. For two reasons. First, it's uncertain whether or not demand will drop
further. Unless we see a recession, it's hard for me to imagine a sustained
downturn in demand. Second, and more important, while new capacity has been
coming on line, it hasn't looked excessive across the board.
Q. WHAT SORT OF THEMES HAVE YOU BEEN FOLLOWING?
A. The one I've focused on is a move away from companies that produce brown
paper - such as corrugated cardboard - to those that produce white - such
as magazine and office paper, or newsprint. That's because white paper is a
commodity that historically has done better later in the economic cycle.
Prices for linerboard have reached a level where they've started to deter
consumption, and capacity has been added there as well. As a result, the
fund's investments in companies such as Stone Container, Gaylord Container
and Jefferson Smurfit detracted from performance. I've sold out the last
two stocks.
Q. AND WHICH INVESTMENTS HAVE BEEN POSITIVE CONTRIBUTORS?
A. Those focused on white paper production. Champion International, the
fund's largest holding at the end of the period, was the strongest
contributor to return. The stock was cheap, and management was taking
concrete steps to restructure, cut costs and repurchase shares - a move
seen as positive to shareholders because it shows management has confidence
in its own stock and tends to increase the value of outstanding shares.
James River currently is poised well from a cost and price perspective. It
has announced a restructuring program designed to take $680 million in
costs out by 1998, and is a major manufacturer of tissue, the grade that
typically does best at the end of the economic cycle. Bowater is the
largest U.S. producer of newsprint and is cutting costs. And Boise Cascade
seems to have the right mix of grades and is cutting costs as well.
Q. YOU'VE TALKED ABOUT THE UNCERTAINTY REGARDING PAPER STOCKS GOING
FORWARD. WHAT'S YOUR READ ON THE SITUATION?
A. For the first time in the almost two years I've managed the fund, I can
see some clouds on the horizon. Some parts of the industry should benefit
from price increases, while others could suffer from price cuts as a result
of added capacity.
FUND FACTS
START DATE: June 30, 1986
TRADING SYMBOL: FSPFX
SIZE: as of August 31, 1995, more than
$66 million
MANAGER: Scott Offen, since 1993; manager
Fidelity Select Brokerage and Investment
Management Portfolio, 1990-1993; Fidelity
Select Life Insurance Portfolio, 1988-1990;
joined Fidelity in 1985
(checkmark)
PAPER AND FOREST PRODUCTS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.4%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 0.4%
ABRASIVES AND ASBESTOS - 0.4%
Manville Corp. (a) 17,500 $ 258,125
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
SPECIAL INDUSTRIAL MACHINERY - 0.6%
Valmet OY Class A 14,100 404,734
PACKAGING & CONTAINERS - 1.0%
PAPER CONTAINERS - 1.0%
Mayr Melnhof Karton AG 10,100 630,177
PAPER & FOREST PRODUCTS - 93.2%
PAPER & ALLIED PRODUCTS - 93.2%
Abitibi Price, Inc.
2nd installment receipt (a)(b) 57,700 756,697
Asia Pulp & Paper Co. Ltd.
sponsored ADR (a) 40,000 525,000
Avenor, Inc. 40,200 893,616
Boise Cascade Corp. 85,900 3,682,963
Bowater, Inc. 70,500 3,366,375
Champion International Corp. 103,900 5,883,338
Consolidated Papers, Inc. 60,100 3,636,050
Domtar Inc. (a) 150,200 1,410,971
Enso-Gutzeit OY Class R Free shares 27,000 233,737
Federal Paper Board Co., Inc. 55,300 2,191,263
Fletcher Challenge Canada Ltd. Class A 49,500 805,694
Georgia-Pacific Corp. 20,000 1,800,000
International Paper Co. 21,700 1,776,688
James River Corp. of Virginia 94,800 3,294,300
Kimberly-Clark Corp. 40,300 2,574,163
Kymmene Corp. 15,300 449,636
Louisiana-Pacific Corp. 30,000 712,500
MacMillan Bloedel Ltd. 50,000 660,367
Mead Corp. 50,300 3,087,163
Metsa-Serla Ltd. Class B 7,000 275,882
Mo Och Domsjoe AB Class B 8,000 459,861
Portucel Industrial (a) 60,000 436,486
QUNO Corp. (a) 30,100 565,516
Rayonier, Inc. 48,600 1,865,025
Repola OY 14,000 267,590
Repap Enterprises, Inc. (a) 134,400 987,536
Scott Paper Co. 40,000 1,855,000
Stone Consolidated Corp. (a) 100,000 1,488,151
Stone Container Corp. (a) 43,000 935,250
Stora Kopparbergs B Free shares 40,000 498,183
Svenska Cellulosa AB
Class B Free shares 23,000 377,743
Temple-Inland, Inc. 25,700 1,329,975
Union Camp Corp. 41,000 2,331,875
Wausau Paper Mills Co. 12,810 297,833
Westvaco Corp. 50,400 2,223,900
Weyerhaeuser Co. 75,800 3,486,800
Willamette Industries, Inc. 35,600 2,447,500
59,870,627
PRINTING - 2.2%
SERVICES FOR PRINT INDUSTRY - 2.2%
Alco Standard Corp. 17,200 1,384,600
TOTAL COMMON STOCKS
(Cost $54,035,453) 62,548,263
REPURCHASE AGREEMENTS - 2.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 1,686,273 $ 1,686,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $55,721,453) $ 64,234,263
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Non-income producing
2. Purchased on an installment basis. Market value reflects only those
payments made through August 31, 1995. The remaining installment
aggregating CAD 288,500 is due October, 1995.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $25,709,751 and $55,234,605, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $20,018 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $2,982,000 and $2,948,000,
respectively. The weighted average interest rate paid was 6.4% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.1%
Canada 11.8
Finland 2.5
Sweden 2.1
Austria 1.0
Others (individually less than 1%) 1.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $56,217,332. Net unrealized appreciation aggregated
$8,016,931, of which $8,699,382 related to appreciated investment
securities and $682,451 related to depreciated investment securities.
PAPER AND FOREST PRODUCTS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $1,686,000) (cost $55,721,453) - See $ 64,234,263
accompanying schedule
Cash 354
Receivable for investments sold 2,134,422
Receivable for fund shares sold 184,029
Dividends receivable 122,700
Redemption fees receivable 218
Prepaid expenses 12,267
TOTAL ASSETS 66,688,253
LIABILITIES
Payable for fund shares redeemed $ 532,791
Accrued management fee 37,857
Other payables and accrued expenses 80,320
TOTAL LIABILITIES 650,968
NET ASSETS $ 66,037,285
Net Assets consist of:
Paid in capital $ 54,273,430
Undistributed net investment income 220,287
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 3,030,724
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 8,512,844
NET ASSETS, for 2,722,649 shares outstanding $ 66,037,285
NET ASSET VALUE and redemption price per share ($66,037,285 (divided by) 2,722,649 shares) $24.25
Maximum offering price per share (100/97.00 of $24.25) $25.00
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 665,759
Dividends
Interest (including income on securities loaned of $2,764) 157,538
TOTAL INCOME 823,297
EXPENSES
Management fee $ 218,218
Transfer agent 373,352
Fees
Redemption fees (67,003
)
Accounting and security lending fees 35,888
Non-interested trustees' compensation 352
Custodian fees and expenses 19,574
Registration fees 12,267
Audit 10,845
Legal 324
Interest 2,093
Miscellaneous 652
Total expenses before reductions 606,562
Expense reductions (3,552 603,010
)
NET INVESTMENT INCOME 220,287
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 4,043,464
Foreign currency transactions (1,222 4,042,242
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 3,454,105
Assets and liabilities in (22 3,454,083
foreign currencies )
NET GAIN (LOSS) 7,496,325
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,716,612
OTHER INFORMATION $344,796
Sales Charges Paid to FDC
Deferred sales charges withheld $1,262
by FDC
Exchange fees withheld by FSC $45,338
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 220,287 $ 27,739
Net investment income
Net realized gain (loss) 4,042,242 2,948,989
Change in net unrealized appreciation (depreciation) 3,454,083 2,027,950
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,716,612 5,004,678
Distributions to shareholders from net realized gains (742,026 (2,454,993
) )
Share transactions 73,512,716 242,587,009
Net proceeds from sales of shares
Reinvestment of distributions 713,862 2,407,320
Cost of shares redeemed (109,563,293 (220,695,611
) )
Paid in capital portion of redemption fees 180,533 462,733
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (35,156,182 24,761,451
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (28,181,596 27,311,136
)
NET ASSETS
Beginning of period 94,218,881 66,907,745
End of period (including undistributed net investment income of $220,287 and $31,587, respectively)$ 66,037,285 $ 94,218,881
OTHER INFORMATION
Shares
Sold 3,257,398 12,091,048
Issued in reinvestment of distributions 33,405 132,918
Redeemed (5,024,346 (11,180,290
) )
Net increase (decrease) (1,733,543) 1,043,676
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.14 $ 19.61 $ 16.08 $ 15.37 $ 12.64 $ 11.00
Income from Investment Operations
Net investment income (loss) .07 .01 (.01) .06 .13 .19
Net realized and unrealized gain (loss) 3.19 2.53 3.38 .65 2.64 1.56
Total from investment operations 3.26 2.54 3.37 .71 2.77 1.75
Less Distributions - - (.01) (.09) (.30) (.17)
From net investment income
From net realized gain (.21) (1.17) - - - -
Total distributions (.21) (1.17) (.01) (.09) (.30) (.17)
Redemption fees added to paid in capital .06 .16 .17 .09 .26 .06
Net asset value, end of period $ 24.25 $ 21.14 $ 19.61 $ 16.08 $ 15.37 $ 12.64
TOTAL RETURN B, C 15.84% 14.91% 22.03% 5.25% 24.52% 16.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 66,037 $ 94,219 $ 66,908 $ 25,098 $ 28,957 $ 12,579
Ratio of expenses to average net assets 1.67% A 1.87% 2.07% 2.21% A 2.05% 2.49%
Ratio of expenses to average net assets before 1.68% A 1.88% 2.08% 2.21% A 2.05% 2.72%
expense reductions
Ratio of net investment income (loss) to average net .61% A .05% (.08)% .49% A .92% 1.73%
assets
Portfolio turnover rate 77% A 209% 176% 222% A 421% 171%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
TRANSPORTATION PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
TRANSPORTATION 7.06% 9.30% 170.08% 247.90%
TRANSPORTATION
(INCL. 3% SALES CHARGE) 3.85% 6.02% 161.98% 237.46%
S&P 500 16.81% 21.45% 102.17% 221.28%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on September 29, 1986. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
TRANSPORTATION 9.30% 21.98% 14.98%
TRANSPORTATION
(INCL. 3% SALES CHARGE) 6.02% 21.24% 14.59%
S&P 500 21.45% 15.12% 13.96%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select TranspoStandard & Poor
09/29/86 9700.00 10000.00
09/30/86 9748.50 9962.80
10/31/86 10039.50 10537.66
11/30/86 10204.40 10793.72
12/31/86 10039.50 10518.48
01/31/87 10737.90 11935.32
02/28/87 11397.50 12406.77
03/31/87 11397.50 12765.32
04/30/87 11475.10 12651.71
05/31/87 11649.70 12761.78
06/30/87 11998.90 13406.25
07/31/87 12474.20 14085.95
08/31/87 12474.20 14611.35
09/30/87 11795.20 14291.37
10/31/87 7992.80 11213.00
11/30/87 7527.20 10289.05
12/31/87 8284.50 11072.05
01/31/88 8698.73 11538.18
02/29/88 9418.69 12075.86
03/31/88 9704.70 11702.72
04/30/88 9734.29 11832.62
05/31/88 9675.11 11935.56
06/30/88 10661.36 12483.41
07/31/88 10523.29 12435.97
08/31/88 10030.16 12013.15
09/30/88 10690.95 12524.91
10/31/88 11036.14 12873.10
11/30/88 11134.76 12689.01
12/31/88 11470.09 12911.07
01/31/89 12456.34 13856.16
02/28/89 12584.55 13511.14
03/31/89 12969.19 13825.95
04/30/89 13403.14 14543.52
05/31/89 13975.16 15132.53
06/30/89 13889.01 15046.28
07/31/89 14730.77 16404.95
08/31/89 15688.27 16726.49
09/30/89 15383.13 16657.91
10/31/89 14404.59 16271.45
11/30/89 14530.85 16603.39
12/31/89 14737.71 17001.87
01/31/90 13812.21 15861.04
02/28/90 14456.54 16065.65
03/31/90 14890.01 16491.39
04/30/90 14327.68 16079.11
05/31/90 14854.86 17646.82
06/30/90 14691.33 17526.82
07/31/90 14642.53 17470.73
08/31/90 12494.96 15891.38
09/30/90 10884.28 15117.47
10/31/90 10713.45 15052.46
11/30/90 11152.72 16024.85
12/31/90 11555.39 16471.95
01/31/91 12543.76 17190.12
02/28/91 13763.97 18419.22
03/31/91 13776.18 18864.96
04/30/91 13739.57 18910.24
05/31/91 14825.56 19727.16
06/30/91 14702.46 18823.66
07/31/91 15596.12 19700.84
08/31/91 15877.68 20167.75
09/30/91 15583.88 19830.95
10/31/91 16734.61 20096.68
11/30/91 15694.05 19286.79
12/31/91 17811.89 21493.19
01/31/92 17971.04 21093.42
02/29/92 18938.14 21367.64
03/31/92 18485.20 20950.97
04/30/92 18962.63 21566.92
05/31/92 19354.37 21672.60
06/30/92 18521.92 21349.68
07/31/92 18791.24 22222.88
08/31/92 18228.12 21767.31
09/30/92 18950.39 22024.17
10/31/92 19758.35 22101.25
11/30/92 21190.65 22854.91
12/31/92 22049.78 23136.02
01/31/93 23037.27 23330.36
02/28/93 23349.77 23647.66
03/31/93 24912.25 24146.62
04/30/93 24850.15 23562.27
05/31/93 25778.43 24193.74
06/30/93 25853.69 24263.90
07/31/93 25853.69 24166.85
08/31/93 26330.38 25082.77
09/30/93 26393.10 24889.63
10/31/93 26945.04 25404.85
11/30/93 27095.57 25163.50
12/31/93 28513.94 25467.98
01/31/94 29763.83 26333.89
02/28/94 29763.83 25620.25
03/31/94 28967.19 24503.20
04/30/94 29508.50 24816.84
05/31/94 29034.13 25223.84
06/30/94 29006.23 24605.86
07/31/94 29982.87 25412.93
08/31/94 30875.80 26454.86
09/30/94 30052.63 25806.71
10/31/94 30499.09 26387.37
11/30/94 28671.38 25426.34
12/31/94 29616.40 25803.41
01/31/95 29416.80 26472.49
02/28/95 31520.20 27504.13
03/31/95 31934.73 28315.77
04/30/95 32410.69 29149.67
05/31/95 31443.43 30314.78
06/30/95 31105.66 31019.00
07/31/95 33777.12 32047.59
08/31/95 33746.42 32128.03
Let's say you invested $10,000 in Fidelity Select Transportation Portfolio
on September 29, 1986, when the fund started and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $33,746 - a 237.46%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $32,128 over the same period - a 221.28% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Burlington Northern, Inc. 11.6
CSX Corp. 9.7
Santa Fe Pacific Corp. 6.2
Chrysler Corp. 5.5
Landstar System, Inc. 5.0
PACCAR, Inc. 4.9
Southern Pacific Rail Corp. 4.9
Hunt (J.B.) Transport Services, Inc. 4.7
Roadway Services, Inc. 4.5
American President Companies Ltd. 4.4
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 13.5
Row: 1, Col: 2, Value: 8.800000000000001
Row: 1, Col: 3, Value: 10.1
Row: 1, Col: 4, Value: 11.5
Row: 1, Col: 5, Value: 12.5
Row: 1, Col: 6, Value: 43.6
Railroads 43.6%
Motor Vehicles &
Car Bodies 12.5%
Trucking, Local &
Long Distance 11.5%
Shipping 10.1%
Trucking, Long Distance 8.8%
All Others 13.5%
TRANSPORTATION PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Stephen DuFour,
Portfolio Manager of Fidelity Select Transportation Portfolio
Q. HOW DID THE FUND PERFORM, STEVE?
A. For the six months ended August 31, 1995, the fund had a total return of
7.06%. During the same period, the Standard & Poor's Composite Index of 500
Stocks returned 16.81%. For the 12 months ended August 31, 1995, the fund
rose 9.30%, while the S&P 500 was up 21.45%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. The fund invests primarily in three industries: railroads, trucking and
airlines. During the period, railroad stocks received the highest weighting
in the fund. Railroads outperformed the overall market and were solid
contributors to the fund's performance. Trucking stocks made up the second
largest position, but they performed very poorly. Airline stocks received
the lowest weighting of the three industries; they made a strong upward
move. The fund would have been better off with more concentration in
airlines and less in trucking. Going forward, the fund probably will
continue to have a strong stake in railroad stocks, but I plan to increase
its position in airlines and decrease holdings in truck stocks.
Q. LET'S TAKE THESE INDUSTRIES ONE AT A TIME, STARTING WITH RAILROADS.
A. I believe railroads are generally well positioned for the next 10 years.
There has been a fair amount of consolidation within the industry. In
addition, since most of the railroads have strong holds on regions or parts
of the country, they're able to raise rates or handle excess capacity by
adding a new car to the end of a train. When business improves for airlines
or trucking, companies buy more planes or trucks, increasing supply and
putting downward pressure on prices. Railroads don't have to deal with
this. In addition, cost cutting over the past 10 years has made railroads
more profitable.
Q. LOOKING AT RAILROADS, WHICH INVESTMENTS HELPED THE FUND?
A. Burlington Northern, the fund's largest position, was one. It's due to
complete its acquisition of Santa Fe Pacific in September. This move should
create a few hundred million dollars in cost savings. In addition,
Burlington Northern is the nation's largest mover of grain. Due to
increased demand for U.S. grain, combined with poor crop conditions
elsewhere in the world, the company is in a position to prosper at least
for the next six months. Other acquisitions also helped the fund during the
period. Union Pacific purchased the Chicago & North Western railroad, and
Union Pacific recently announced it was going to acquire Southern Pacific.
The fund held each of these stocks, all of which helped its performance.
CSX, an eastern railroad, has done a great job cutting costs and paying
down debt; the investment there was another positive contributor.
Q. LET'S TURN TO TRUCKING . . .
A. The problem with trucking is that there are too many trucks. There's
been a slowdown in industrial production, so demand has dropped off. At the
same time, we've had record production of new trucks. As a result, there
have been too many trucks chasing too few loads. Rates have gone down and
the profitability of trucking companies has declined. The fund's
investments in Rollins Truck Leasing, Carolina Freight, J.B. Hunt, TNT
Freightways and Landstar System were among those that were drags on
performance.
Q. AND, FINALLY, AIRLINES . . .
A. Airlines, in general, succeeded at increasing passenger loads and did a
good job restraining capacity additions. AMR Corp., the parent company of
American Airlines, was one airline stock that helped the fund.
Q. WHAT DO YOU SEE HAPPENING IN THE SECTOR AND THE FUND OVER THE NEXT SIX
MONTHS?
A. There is a good chance that the sector will attract investors. One thing
investors look at is comparable results from year to year. After a poor
second and third quarter in 1995, it appears the sector is a bit better
positioned looking toward the last quarter of 1995 and the first quarter of
1996, primarily due to rail and airlines. Improving trends, compared
against weak results in 1995, will be good for attracting investors. All
three industries behave like commodities, dependent upon pressures of
supply and demand. My job is to keep a pulse on the supply/demand dynamic,
then decide which industry within the sector is best positioned, and invest
accordingly.
FUND FACTS
START DATE: September 29, 1986
TRADING SYMBOL: FSRFX
SIZE: as of August 31, 1995, more than
$10 million
MANAGER: Stephen DuFour, since December
1994; manager, Fidelity Select Multimedia
Portfolio, since 1993; equity analyst, media,
1992-1993; joined Fidelity in 1992
(checkmark)
TRANSPORTATION PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 100%
SHARES VALUE (NOTE 1)
AIR TRANSPORTATION - 7.5%
AIR TRANSPORT, MAJOR NATIONAL - 7.5%
AMR Corp. (a) 5,500 $ 387,748
Delta Air Lines, Inc. 5,000 371,875
759,623
AUTOS, TIRES, & ACCESSORIES - 14.3%
AUTO & TRUCK PARTS - 1.8%
Cummins Engine Co., Inc. 4,500 176,625
Snap-on Tools Corp. 200 8,200
184,825
MOTOR VEHICLES & CAR BODIES - 12.5%
Chrysler Corp. 10,300 554,913
General Motors Corp. 4,000 188,000
PACCAR, Inc. 10,000 495,000
Sime Darby Hongkong Ltd. 20,000 24,289
1,262,202
TRUCK & BUS BODIES - 0.0%
Grupo Dina sponsored ADR, Series L 11 25
TOTAL AUTOS, TIRES, & ACCESSORIES 1,447,052
HOLDING COMPANIES - 2.2%
HOLDING COMPANY OFFICES - 2.2%
Norfolk Southern Corp. 3,100 219,325
RAILROADS - 43.6%
Burlington Northern, Inc. 16,900 1,170,325
CSX Corp. 11,900 981,750
Canadian Pacific Ltd. Ord. 10,000 166,487
Illinois Central Corp., Series A 7,200 276,300
Santa Fe Pacific Corp. 21,948 622,775
Southern Pacific Rail Corp. (a) 20,000 490,000
Union Pacific Corp. 5,000 327,500
Wisconsin Central
Transportation Corp. (a) 6,000 357,000
4,392,137
SECURITIES INDUSTRY - 0.1%
INVESTMENT MANAGERS - 0.1%
Alleghany Corp. 30 5,078
SHIPPING - 12.0%
DEEP SEA TRANSPORT - 1.9%
Pacific Basin Bulk Shipping Ltd 1,000 14,250
Pacific Basin Bulk Shipping
Ltd. (warrants) (a) 1,000 625
Transportacion Maritima Mexicana SA
de CV ADR representing L share (a) 20,000 172,500
187,375
SHIPPING - 10.1%
American President Companies Ltd. 15,000 440,625
IM Skaugen AS 100,000 66,963
Kirby Corp. 25,000 387,500
Storli Skibs, Series A AS 7,000 127,540
1,022,628
TOTAL SHIPPING 1,210,003
TRUCKING & FREIGHT - 20.3%
TRUCKING, LOCAL & LONG DISTANCE- 11.5%
Hitachi Transport System Co. 5,000 46,126
Landstar System, Inc. (a) 18,000 504,000
Roadway Services, Inc. 8,200 451,000
Rollins Truck Leasing Corp. 15,000 163,125
1,164,251
SHARES VALUE (NOTE 1)
TRUCKING, LONG DISTANCE - 8.8%
Aasche Transportation 5,000 $ 36,875
Hunt (J.B.) Transport Services Inc. 29,800 476,800
PST Vans, Inc. 15,000 108,750
TNT Freightways Corp. 12,800 265,600
888,025
TOTAL TRUCKING & FREIGHT 2,052,276
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $9,339,963) $ 10,085,494
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $11,241,234 and $13,500,806, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $4,400 for the period
(see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $9,339,963. Net unrealized appreciation aggregated
$745,531, of which $1,040,529 related to appreciated investment securities
and $294,998 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$313,000 of losses recognized during the period November 1,1994 to February
28, 1995.
TRANSPORTATION PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value $ 10,085,494
(cost $9,339,963) - See accompanying schedule
Receivable for investments sold 1,450,815
Receivable for fund shares sold 3,680
Dividends receivable 19,023
Redemption fees receivable 3,270
Prepaid expenses 6,378
TOTAL ASSETS 11,568,660
LIABILITIES
Payable to custodian bank $ 102,497
Payable for fund shares redeemed 1,090,705
Accrued management fee 6,782
Other payables and accrued expenses 25,937
TOTAL LIABILITIES 1,225,921
NET ASSETS $ 10,342,739
Net Assets consist of:
Paid in capital $ 8,648,285
Accumulated net investment (loss) (42,657
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 991,580
Net unrealized appreciation (depreciation) on investments 745,531
NET ASSETS, for 470,531 shares outstanding $ 10,342,739
NET ASSET VALUE and redemption price per share ($10,342,739 (divided by) 470,531 shares) $21.98
Maximum offering price per share (100/97.00 of $21.98) $22.66
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 64,221
Dividends
Interest 32,483
TOTAL INCOME 96,704
EXPENSES
Management fee $ 36,739
Transfer agent 70,248
Fees
Redemption fees (12,548
)
Accounting fees and expenses 22,668
Non-interested trustees' compensation 63
Custodian fees and expenses 9,129
Registration fees 6,378
Audit 8,479
Legal 47
Miscellaneous 152
Total expenses before reductions 141,355
Expense reductions (1,994 139,361
)
NET INVESTMENT INCOME (LOSS) (42,657
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,308,963
Foreign currency transactions 1,556 1,310,519
Change in net unrealized appreciation (depreciation) on:
Investment securities (556,245
)
Assets and liabilities in (13 (556,258
foreign currencies ) )
NET GAIN (LOSS) 754,261
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 711,604
OTHER INFORMATION $82,175
Sales Charges Paid to FDC
Deferred sales charges withheld $1,765
by FDC
Exchange fees withheld by FSC $10,523
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (42,657 $ (105,448
Net investment income (loss) ) )
Net realized gain (loss) 1,310,519 1,298,543
Change in net unrealized appreciation (depreciation) (556,258 (804,930
) )
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 711,604 388,165
Distributions to shareholders from net realized gains - (1,219,559
)
Share transactions 14,077,786 21,385,934
Net proceeds from sales of shares
Reinvestment of distributions - 1,177,973
Cost of shares redeemed (17,184,921 (22,133,063
) )
Paid in capital portion of redemption fees 33,853 28,174
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (3,073,282 459,018
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,361,678 (372,376
) )
NET ASSETS
Beginning of period 12,704,417 13,076,793
End of period (including accumulated net investment loss of $42,657 and $0, respectively) $ 10,342,739 $ 12,704,417
OTHER INFORMATION
Shares
Sold 661,060 1,018,198
Issued in reinvestment of distributions - 62,121
Redeemed (809,402 (1,064,813
) )
Net increase (decrease) (148,342) 15,506
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.53 $ 21.67 $ 18.68 $ 15.49 $ 11.26 $ 12.23
Income from Investment Operations
Net investment income (loss) (.08) (.17) (.20) (.07) (.05) .06
Net realized and unrealized gain (loss) 1.47 1.17 5.07 3.55 4.18 (.57)
Total from investment operations 1.39 1.00 4.87 3.48 4.13 (.51)
Less Distributions - - - - (.04) -
From net investment income
From net realized gain - (2.19) (1.96) (.36) - (.50)
Total distributions - (2.19) (1.96) (.36) (.04) (.50)
Redemption fees added to paid in capital .06 .05 .08 .07 .14 .04
Net asset value, end of period $ 21.98 $ 20.53 $ 21.67 $ 18.68 $ 15.49 $ 11.26
TOTAL RETURN B, C 7.06% 5.90% 27.47% 23.14% 38.01% (4.10)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 10,343 $ 12,704 $ 13,077 $ 10,780 $ 2,998 $ 770
Ratio of expenses to average net assets 2.30% A 2.36% 2.39% 2.48% A 2.43% 2.39%
Ratio of expenses to average net assets before 2.33% A 2.37% 2.40% 4.20% A 3.13% 2.89%
expense reductions
Ratio of net investment income (loss) to average net (.70)% (.83)% (.96)% (.53)% (.34)% .52%
assets A A
Portfolio turnover rate 205% A 178% 115% 116% A 423% 187%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
AMERICAN GOLD PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
AMERICAN GOLD 22.40% 3.77% 38.64% 129.03%
AMERICAN GOLD
(INCL. 3% SALES CHARGE) 18.73% 0.66% 34.48% 122.16%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
AMERICAN GOLD 3.77% 6.75% 8.90%
AMERICAN GOLD
(INCL. 3% SALES CHARGE) 0.66% 6.10% 8.56%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select AmericStandard & Po
12/16/85 9700.00 10000.00
12/31/85 9719.40 10080.42
01/31/86 10097.70 10136.87
02/28/86 9622.40 10895.11
03/31/86 10010.40 11503.06
04/30/86 9806.70 11373.07
05/31/86 9855.20 11978.12
06/30/86 9874.60 12180.55
07/31/86 9826.10 11499.66
08/31/86 10941.60 12352.93
09/30/86 11475.10 11331.35
10/31/86 11310.20 11985.16
11/30/86 11494.50 12276.40
12/31/86 11475.10 11963.36
01/31/87 13221.10 13574.82
02/28/87 14588.80 14111.03
03/31/87 16975.00 14518.83
04/30/87 18032.30 14389.62
05/31/87 17072.00 14514.81
06/30/87 16538.50 15247.80
07/31/87 19739.50 16020.87
08/31/87 19409.70 16618.45
09/30/87 20234.20 16254.50
10/31/87 14326.90 12753.28
11/30/87 16616.10 11702.41
12/31/87 16122.97 12592.97
01/31/88 13701.57 13123.13
02/29/88 14065.77 13734.67
03/31/88 15473.33 13310.27
04/30/88 15571.76 13458.01
05/31/88 15473.33 13575.09
06/30/88 15778.47 14198.19
07/31/88 15739.09 14144.24
08/31/88 14813.84 13663.33
09/30/88 14174.04 14245.39
10/31/88 14321.69 14641.41
11/30/88 14518.55 14432.04
12/31/88 14114.98 14684.60
01/31/89 14626.82 15759.52
02/28/89 15394.59 15367.10
03/31/89 14853.22 15725.16
04/30/89 14134.67 16541.29
05/31/89 13622.83 17211.21
06/30/89 14390.59 17113.11
07/31/89 14538.24 18658.42
08/31/89 15276.47 19024.13
09/30/89 15365.06 18946.13
10/31/89 15522.55 18506.58
11/30/89 17501.01 18884.12
12/31/89 17225.40 19337.33
01/31/90 17983.32 18039.80
02/28/90 17481.32 18272.51
03/31/90 16802.15 18756.73
04/30/90 14981.18 18287.82
05/31/90 16300.15 20070.88
06/30/90 15256.78 19934.40
07/31/90 16319.84 19870.61
08/31/90 16024.54 18074.30
09/30/90 16014.70 17194.08
10/31/90 13386.60 17120.15
11/30/90 13219.26 18226.11
12/31/90 14262.63 18734.62
01/31/91 12284.17 19551.45
02/28/91 13396.44 20949.38
03/31/91 13347.22 21456.35
04/30/91 12874.76 21507.85
05/31/91 13317.69 22436.99
06/30/91 14213.42 21409.37
07/31/91 14055.93 22407.05
08/31/91 12914.13 22938.10
09/30/91 12697.58 22555.03
10/31/91 13672.05 22857.27
11/30/91 13642.52 21936.12
12/31/91 13386.60 24445.61
01/31/92 13711.42 23990.92
02/29/92 13288.17 24302.81
03/31/92 12382.60 23828.90
04/30/92 11752.64 24529.47
05/31/92 12589.31 24649.67
06/30/92 13406.28 24282.39
07/31/92 14252.79 25275.53
08/31/92 13987.02 24757.39
09/30/92 13908.28 25049.52
10/31/92 13494.87 25137.20
11/30/92 12353.07 25994.38
12/31/92 12973.19 26314.11
01/31/93 12727.11 26535.14
02/28/93 13927.97 26896.02
03/31/93 15493.02 27463.53
04/30/93 17451.79 26798.91
05/31/93 19390.88 27517.12
06/30/93 20522.83 27596.92
07/31/93 22156.79 27486.53
08/31/93 20995.30 28528.27
09/30/93 18770.76 28308.61
10/31/93 21576.04 28894.59
11/30/93 21595.73 28620.10
12/31/93 23180.47 28966.40
01/31/94 23190.31 29951.26
02/28/94 22304.43 29139.58
03/31/94 22845.80 27869.09
04/30/94 20916.56 28225.82
05/31/94 21822.12 28688.72
06/30/94 20749.22 27985.85
07/31/94 20444.09 28903.78
08/31/94 21408.71 30088.84
09/30/94 23278.90 29351.66
10/31/94 21595.73 30012.07
11/30/94 19036.53 28919.03
12/31/94 19597.58 29347.90
01/31/95 17550.22 30108.89
02/28/95 18150.65 31282.24
03/31/95 20936.24 32205.38
04/30/95 20857.50 33153.82
05/31/95 21290.59 34478.98
06/30/95 21585.89 35279.93
07/31/95 22166.63 36449.81
08/31/95 22215.84 36541.30
Let's say you invested $10,000 in Fidelity Select American Gold Portfolio
on December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $22,216 - a 122.16%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Barrick Gold Corp. 9.9
Newmont Mining Corp. 8.5
Placer Dome, Inc. 6.3
Euro-Nevada Mining Corp. 6.0
Kinross Gold Corp. 4.8
Cambior, Inc. 4.6
Agnico Eagle Mines Ltd. 4.3
Franco Nevada Mining Corp. 4.2
Freeport McMoRan Copper Co. Class A 2.6
Newmont Mining Corp. depositary shares 2.4
representing 1/2 share, $1.375
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 9.9
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 2.6
Row: 1, Col: 5, Value: 4.4
Row: 1, Col: 6, Value: 80.0
Gold Ores 80.0%
Miscellaneous Metal
Ores 4.4%
Copper Ores 2.6%
Investment Managers 2.0%
Agricultural
Chemicals 1.1%
All Others 9.9%*
* INCLUDES SHORT-TERM INVESTMENTS
AMERICAN GOLD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Larry Rakers,
Portfolio Manager of
Fidelity Select American Gold Portfolio
Q. HOW HAS THE FUND PERFORMED, LARRY?
A. For the six months ended August 31, 1995, the portfolio returned 22.40%.
The Standard & Poor's 500 Index returned 16.81% for the same time period.
For the 12 months ended August 31, 1995, the portfolio returned 3.77% while
the S&P returned 21.45%.
Q. WHY HAS THE FUND'S PERFORMANCE BEEN UP IN THE PAST SIX MONTHS?
A. The fund was focused on gold companies which were increasing reserves
and production. This has resulted in capital appreciation despite the fact
that the price of gold has traded in a narrow range.
Q. WHAT'S YOUR STRATEGY BEEN IN THE RECENT INVESTING ENVIRONMENT?
A. The fund invests primarily in North, Central and South American precious
metals companies and can also buy gold bullion. Although I was bullish on
the outlook for the price of gold, I continued to invest in companies that
have been growing production and reserves. This strategy should allow
investors to enjoy modest capital appreciation in a flat gold price
environment as well as more substantial gains in an improving gold price
environment.
Q. WHAT STOCKS DID YOU LIKE AT THE END OF AUGUST?
A. The fund's top two holdings at the end of the period, Barrick Gold and
Newmont Mining, have continued to experience strong production. Barrick had
outstanding exploration success both in Nevada and Chile earlier this year.
I think they can increase production from 3 million ounces this year to
more than 4 million in the next two to three years. Newmont Mining,
meanwhile, has developed a new technique by which it uses bacteria to
process ore and extract gold. I believe this new technology has the
potential to change the production and reserve profile of Newmont in the
years to come. In addition, Newmont has been aggressive in seeking new gold
properties internationally.
Q. WHAT OTHER INVESTMENTS BENEFITED THE FUND DURING THE PERIOD?
A. Pioneer Group, a Boston-based investment adviser, invested in a gold
mine in Ghana that has been very successful, and the fund held a large
position in Pioneer Group. It also has a similar project in Russia that
looks interesting. Euro-Nevada Mining and Franco Nevada Mining have each
appreciated nicely during the period. Most of their revenues have come from
gold royalties in North American mines, which have been profitable so far
this year. The most lucrative have been their royalties on Barrick Gold's
Gold Strike Mine.
Q. WHERE ELSE ARE YOU FINDING OPPORTUNITIES?
A. I have been increasing the fund's investments in companies which deal
with silver and platinum. The supply/demand picture for silver has looked
very favorable. Stillwater Mining is the only platinum company available
in North America and I've increased the fund's holding in it.
Q. WHAT'S BEEN YOUR BIGGEST DISAPPOINTMENT OVER THE PAST SIX MONTHS?
A. Despite increasing demand, the price of gold has been relatively flat.
Sales of gold by central banks and producer forward selling has limited the
upward movement in gold prices.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I think the supply/demand picture looks favorable for all of the
precious metals. However, additional central bank selling or producer
forward selling could prevent upward movements in the metals prices.
Shareholders should understand that gold and precious metals prices are
very volatile and anything can happen.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSAGX
SIZE: as of August 31, 1995, more than
$346 million
MANAGER: Larry Rakers, since July 1995;
research analyst following precious metals, coal
and restaurants since 1993; joined Fidelity in
1993
(checkmark)
AMERICAN GOLD PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 89.9%
SHARES VALUE (NOTE 1)
CANADA - 59.2%
HOLDING COMPANIES - 0.3%
HOLDING COMPANY OFFICES - 0.3%
Bolivar Goldfields Ltd. (a)(c) 941,100 $ 1,120,398
METALS & MINING - 1.2%
LEAD & ZINC ORES - 0.1%
Cominco Ltd. (a) 17,789 352,418
METAL MINING - 0.5%
Arlo Resources Ltd. 50,000 37,204
Dayton Mining Corp. (a) 200,000 837,084
Southernera Resources Ltd. (a)(c) 253,900 689,559
1,563,847
MISCELLANEOUS NONMETAL MINERALS - 0.6%
DIA Metropolitan Minerals Ltd. (a):
Class A 46,050 419,742
Class B 179,500 1,769,691
2,189,433
TOTAL METALS & MINING 4,105,698
PRECIOUS METALS - 57.7%
GOLD & SILVER ORES - 0.9%
Greenstone Resources Ltd. (a) 424,800 1,169,508
Mentor Exploration & Development
Co. Ltd. (a)(c) 188,000 1,923,436
3,092,944
GOLD ORES - 56.6%
Aber Resources Ltd. (a) 129,900 942,391
Adrian Resources Ltd. 113,900 476,719
Agnico Eagle Mines Ltd. 1,108,700 15,055,448
Barrick Gold Corp. 1,387,600 34,975,221
Bema Gold Corp. (a) 350,000 710,966
Breakwater Resources Ltd. (a) 21,475 37,551
Cambior, Inc. 1,497,900 16,160,978
Campbell Resources, Inc. (a) 1,320,000 1,070,573
Canaarc Resources Corp. (a) 300,000 412,962
Cathedral Gold Corp. (a) 211,000 463,149
Crown Resources Corp. (a) 84,600 465,300
Echo Bay Mines Ltd. 175,400 1,827,151
Euro-Nevada Mining Corp. 551,000 21,319,248
Franco Nevada Mining Corp. 232,000 14,953,681
Golden Knight Resources, Inc. 406,200 2,531,288
Golden Star Resources, Ltd. Canada (a) 1,078,000 6,216,373
Hemlo Gold Mines Inc. 622,500 5,905,633
International Gold Resources Corp. (a) 350,000 1,367,240
Kinross Gold Corp. (a) 2,090,000 17,106,295
Metallica Resources, Inc. (a) 50,000 120,912
Mountain Province Mining, Inc. (a) 232,300 1,339,577
Orvana Minerals Corp. (a)(c) 1,352,800 4,781,282
Pegasus Gold, Inc. (a) 609,300 7,537,193
Placer Dome, Inc. 863,400 22,404,911
Prime Equities, Inc. (a) 55,883 195,431
Prime Resources Group, Inc. (a) 953,900 7,630,065
Rayrock Yellowknife Resources Inc. (a) 264,500 2,952,119
Royal Oak Mines, Inc. (warrants) (a) 100,000 37,204
Sudbury Contact Mines, Ltd. (a) 420,100 4,376,203
TVI Pacific, Inc. (a) 1,268,000 1,368,058
TVX Gold, Inc. 10,000 70,687
War Eagle Mining, Inc. (a) 368,000 1,369,100
Wharf Resources Ltd. 570,000 4,294,243
200,475,152
SHARES VALUE (NOTE 1)
SILVER ORES - 0.2%
Pan American Silver Corp. (a) 58,600 $ 392,425
Rea Gold Corp. (a) 125,000 297,630
United Keno Hill Mines Ltd. 5,000 9,115
699,170
TOTAL PRECIOUS METALS 204,267,266
TOTAL CANADA 209,493,362
FRANCE - 0.3%
PRECIOUS METALS - 0.3%
GOLD ORES - 0.3%
Guyanor Resources SA Class B (a)(b) 200,000 401,800
Guyanor Resources SA Class B (a) 313,440 629,701
1,031,501
GHANA - 1.6%
PRECIOUS METALS - 1.6%
GOLD ORES - 1.6%
Ashanti Goldfields Ltd. GDR (b) 23,000 473,800
Ashanti Goldfields Ltd. GDR 252,000 5,191,200
5,665,000
PERU - 0.9%
PRECIOUS METALS - 0.9%
GOLD ORES - 0.9%
Buenaventura (CIA DE MIN) Class T 573,923 3,325,465
UNITED STATES - 27.9%
CHEMICALS & PLASTICS - 1.1%
AGRICULTURAL CHEMICALS - 1.1%
First Mississippi Corp. 111,700 3,700,063
METALS & MINING - 7.0%
COPPER ORES - 2.6%
Freeport McMoRan Copper Co.
Class A 400,000 9,350,000
MISCELLANEOUS METAL ORES - 4.4%
Stillwater Mining Co. (a)(b) 350,000 7,656,250
Stillwater Mining Co. (a) 360,000 7,875,000
15,531,250
TOTAL METALS & MINING 24,881,250
PRECIOUS METALS - 17.7%
GOLD ORES - 17.7%
Alta Gold Co. (a) 65,000 81,250
Amax Gold, Inc. (a) 1,013,100 6,585,150
Battle Mountain Gold Co. 520,400 5,138,950
Canyon Resources Corp. (a) 826,700 2,118,419
Centurion Mines Corp. (a) 5,000 10,469
Coeur d'Alene Mines Corp. 147,400 2,819,025
Firstmiss Gold, Inc. (a) 87,000 1,957,500
Hecla Mining Co. (a) 309,500 3,559,250
Homestake Mining Co. 392,300 6,472,950
Newmont Mining Corp. 688,105 29,932,568
Santa Fe Pacific Gold Corp. 340,000 4,122,500
TOTAL PRECIOUS METALS 62,798,031
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SECURITIES INDUSTRY - 2.0%
INVESTMENT MANAGERS - 2.0%
Pioneer Group, Inc. 247,500 $ 7,053,750
SERVICES - 0.1%
JEWELRY, PRECIOUS METAL - 0.1%
OroAmerica, Inc. (a) 50,000 200,000
TOTAL UNITED STATES 98,633,094
TOTAL COMMON STOCKS
(Cost $265,707,987) 318,148,422
CONVERTIBLE PREFERRED STOCKS - 2.8%
UNITED STATES - 2.8%
PRECIOUS METALS - 2.8%
GOLD ORES - 2.8%
Battle Mountain Gold Co. $3.25 29,000 1,584,125
Newmont Mining Corp. depositary
shares representing 1/2 share,
$1.375 (b) 138,800 8,432,100
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $10,365,123) 10,016,225
CONVERTIBLE BONDS - 0.1%
PRINCIPAL
AMOUNT
UNITED STATES - 0.1%
PRECIOUS METALS - 0.1%
GOLD ORES - 0.1%
Canyon Resources Corp. 6%,
6/1/98 (b) (Cost $249,000) $ 300,000 237,000
BULLION - 2.5%
TROY OUNCES
Silver Bullion (5,000 oz Bar)
(Cost $8,840,321) 1,677,084 8,955,631
REPURCHASE AGREEMENTS - 4.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 16,566,678 16,564,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $301,726,431) $ 353,921,278
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $17,200,950 or 5.0% of net
assets.
3. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Bolivar Goldfields Ltd. $ - $ - $ - $ 1,120,398
Mentor Exploration & Development
Co. Ltd. - - - 1,923,436
Orvana Minerals Corp. - - - 4,781,282
Southernera Resources Ltd. - - - 689,559
Totals $ - $ - $ - $ 8,514,675
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $80,528,673 and $68,178,649, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $146,957 for the period
(see Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $3,305,363 and $3,474,000, respectively (see Note 7
of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the period for
which the loan was outstanding amounted to $4,084,000. The weighted average
interest rate paid was 6.4% (see Note 6 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
Canada 59.2%
United States 38.0
Ghana 1.6
Others (individually less than 1%) 1.2
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $303,068,739. Net unrealized appreciation aggregated
$50,852,539, of which $80,333,650 related to appreciated investment
securities and $29,481,111 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $35,816,000 of which $10,629,000, $2,503,000, $1,152,000,
$13,193,000 and $8,339,000 will expire on February 28, 1997, 1998, 1999,
2000 and 2001, respectively.
AMERICAN GOLD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $16,564,000) (cost $301,726,431) - $ 353,921,278
See accompanying schedule
Cash 230
Receivable for investments sold 3,159,244
Receivable for fund shares sold 1,471,421
Dividends receivable 297,261
Interest receivable 4,450
Redemption fees receivable 1,363
Other receivables 10,156
Prepaid expenses 15,944
TOTAL ASSETS 358,881,347
LIABILITIES
Payable for investments purchased $ 1,407,841
Payable for fund shares redeemed 6,464,665
Accrued management fee 181,860
Other payables and accrued expenses 373,356
Collateral on securities loaned, at value 3,474,000
TOTAL LIABILITIES 11,901,722
NET ASSETS $ 346,979,625
Net Assets consist of:
Paid in capital $ 319,480,011
Accumulated net investment (loss) (9,753
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (24,686,210
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 52,195,577
NET ASSETS, for 15,375,930 shares outstanding $ 346,979,625
NET ASSET VALUE and redemption price per share ($346,979,625 (divided by) 15,375,930 shares) $22.57
Maximum offering price per share (100/97.00 of $22.57) $23.27
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,674,408
Dividends
Interest (including income on securities loaned of $33,752) 862,284
TOTAL INCOME 2,536,692
EXPENSES
Management fee $ 1,090,282
Transfer agent 1,232,148
Fees
Redemption fees (125,448
)
Accounting and security lending fees 179,498
Non-interested trustees' compensation 1,689
Custodian fees and expenses 33,711
Registration fees 15,944
Audit 17,808
Legal 1,204
Interest 2,191
Miscellaneous 2,436
Total expenses before reductions 2,451,463
Expense reductions (7,608 2,443,855
)
NET INVESTMENT INCOME 92,837
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including 12,591,119
realized gain of $998,618
on sales of investments in
precious metals)
Foreign currency transactions (1,323 12,589,796
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 51,823,266
Assets and liabilities in 730 51,823,996
foreign currencies
NET GAIN (LOSS) 64,413,792
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 64,506,629
OTHER INFORMATION $598,412
Sales Charges Paid to FDC
Deferred sales charges withheld $12,695
by FDC
Exchange fees withheld by FSC $89,940
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 92,837 $ (779,678
Net investment income (loss) )
Net realized gain (loss) 12,589,796 3,326,739
Change in net unrealized appreciation (depreciation) 51,823,996 (79,195,428
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 64,506,629 (76,648,367
)
Share transactions 280,775,159 526,647,371
Net proceeds from sales of shares
Cost of shares redeemed (277,201,391 (520,560,579
) )
Paid in capital portion of redemption fees 701,947 1,352,412
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 4,275,715 7,439,204
TOTAL INCREASE (DECREASE) IN NET ASSETS 68,782,344 (69,209,163
)
NET ASSETS
Beginning of period 278,197,281 347,406,444
End of period (including accumulated net investment loss of $9,753 and $102,590, respectively) $ 346,979,625 $ 278,197,281
OTHER INFORMATION
Shares
Sold 13,153,810 24,289,524
Redeemed (12,864,592 (24,535,614
) )
Net increase (decrease) 289,218 (246,090)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.44 $ 22.66 $ 14.15 $ 11.94 $ 13.08 $ 15.22
Income from Investment Operations
Net investment income (loss) .01 (.05) (.11) (.05) (.06) (.04)
Net realized and unrealized gain (loss) 4.08 (4.25) 8.44 2.16 (1.17) (2.23)
Total from investment operations 4.09 (4.30) 8.33 2.11 (1.23) (2.27)
Redemption fees added to paid in capital .04 .08 .18 .10 .09 .13
Net asset value, end of period $ 22.57 $ 18.44 $ 22.66 $ 14.15 $ 11.94 $ 13.08
TOTAL RETURN B, C 22.40% (18.62)% 60.14% 18.51% (8.72)% (14.06)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 346,980 $ 278,197 $ 347,406 $ 168,033 $ 130,407 $ 164,137
Ratio of expenses to average net assets 1.36% A 1.41% 1.49% 1.59% A 1.75% 1.75%
Ratio of expenses to average net assets before 1.37% A 1.41% 1.50% 1.59% A 1.75% 1.75%
expense reductions
Ratio of net investment income (loss) to average net .05% A (.22)% (.51)% (.44)% (.47)% (.29)%
assets A
Portfolio turnover rate 42% A 34% 39% 30% A 40% 38%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
ENERGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
ENERGY 10.02% 7.08% 16.10% 114.61%
ENERGY
(INCL. 3% SALES CHARGE) 6.72% 3.86% 12.62% 108.17%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
ENERGY 7.08% 3.03% 7.94%
ENERGY
(INCL. 3% SALES CHARGE) 3.86% 2.41% 7.61%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select EnergyStandard & Poo
08/31/85 9700.00 10000.00
09/30/85 9396.88 9687.00
10/31/85 9958.55 10134.54
11/30/85 10119.03 10829.77
12/31/85 9744.58 11353.93
01/31/86 9075.92 11417.51
02/28/86 8870.86 12271.54
03/31/86 8826.29 12956.29
04/30/86 8844.12 12809.89
05/31/86 9254.23 13491.37
06/30/86 9280.97 13719.38
07/31/86 8701.47 12952.46
08/31/86 9851.56 13913.54
09/30/86 9744.58 12762.89
10/31/86 10003.13 13499.31
11/30/86 10208.18 13827.34
12/31/86 10279.50 13474.74
01/31/87 11367.19 15289.79
02/28/87 11590.07 15893.74
03/31/87 12552.94 16353.07
04/30/87 12196.32 16207.52
05/31/87 12624.26 16348.53
06/30/87 13061.12 17174.13
07/31/87 13738.69 18044.86
08/31/87 13658.46 18717.93
09/30/87 13364.25 18308.01
10/31/87 9833.73 14364.46
11/30/87 9423.62 13180.83
12/31/87 10094.50 14183.89
01/31/88 10470.41 14781.03
02/29/88 10846.31 15469.83
03/31/88 11616.47 14991.81
04/30/88 12056.55 15158.22
05/31/88 11616.47 15290.10
06/30/88 11744.82 15991.91
07/31/88 11818.17 15931.15
08/31/88 11368.92 15389.49
09/30/88 11240.56 16045.08
10/31/88 11341.41 16491.13
11/30/88 11368.92 16255.31
12/31/88 11703.78 16539.78
01/31/89 12588.14 17750.49
02/28/89 12390.57 17308.50
03/31/89 13105.59 17711.79
04/30/89 13547.78 18631.03
05/31/89 13707.72 19385.59
06/30/89 13989.96 19275.09
07/31/89 14573.27 21015.63
08/31/89 14893.15 21427.54
09/30/89 15128.35 21339.68
10/31/89 15024.86 20844.60
11/30/89 15589.35 21269.83
12/31/89 16715.98 21780.31
01/31/90 15969.64 20318.85
02/28/90 16467.20 20580.96
03/31/90 16476.77 21126.36
04/30/90 15921.80 20598.20
05/31/90 16888.21 22606.52
06/30/90 16490.19 22452.80
07/31/90 17613.36 22380.95
08/31/90 17929.89 20357.71
09/30/90 17878.84 19366.29
10/31/90 16959.88 19283.02
11/30/90 16776.09 20528.70
12/31/90 15965.04 21101.45
01/31/91 14930.95 22021.47
02/28/91 16323.80 23596.01
03/31/91 16102.21 24167.03
04/30/91 16281.59 24225.03
05/31/91 16376.56 25271.56
06/30/91 15646.97 24114.12
07/31/91 16450.47 25237.84
08/31/91 16767.63 25835.97
09/30/91 16598.48 25404.51
10/31/91 17095.37 25744.93
11/30/91 15826.70 24707.41
12/31/91 15970.66 27533.94
01/31/92 15116.04 27021.81
02/29/92 15137.40 27373.09
03/31/92 14699.41 26839.32
04/30/92 15703.59 27628.39
05/31/92 16451.38 27763.77
06/30/92 15637.30 27350.09
07/31/92 16055.01 28468.71
08/31/92 16344.19 27885.10
09/30/92 16440.58 28214.15
10/31/92 15733.69 28312.90
11/30/92 15369.54 29278.37
12/31/92 15589.20 29638.49
01/31/93 16177.06 29887.45
02/28/93 17243.92 30293.92
03/31/93 18125.71 30933.12
04/30/93 18474.37 30184.54
05/31/93 19029.91 30993.49
06/30/93 19280.45 31083.37
07/31/93 19138.84 30959.04
08/31/93 20652.95 32132.38
09/30/93 20533.13 31884.96
10/31/93 20239.02 32544.98
11/30/93 17788.12 32235.80
12/31/93 18575.23 32625.86
01/31/94 19570.13 33735.14
02/28/94 18914.40 32820.92
03/31/94 17998.64 31389.92
04/30/94 19373.50 31791.71
05/31/94 19578.51 32313.10
06/30/94 19476.00 31521.43
07/31/94 19772.13 32555.33
08/31/94 19441.83 33890.10
09/30/94 19293.77 33059.79
10/31/94 20387.16 33803.64
11/30/94 19134.32 32572.51
12/31/94 18651.84 33055.56
01/31/95 18205.23 33912.69
02/28/95 18922.16 35234.27
03/31/95 19956.41 36274.03
04/30/95 20569.73 37342.30
05/31/95 21100.48 38834.87
06/30/95 20487.17 39737.01
07/31/95 20970.74 41054.68
08/31/95 20817.41 41157.73
Let's say you invested $10,000 in Fidelity Select Energy Portfolio on
August 31, 1985, and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $20,817 - a 108.17% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Atlantic Richfield Co. 8.8
Amerada Hess Corp. 7.9
Unocal Corp. 7.0
Phillips Petroleum Co. 6.0
Total SA Class B sponsored ADR 4.6
Occidental Petroleum Corp. 4.5
Kerr-McGee Corp. 4.2
Schlumberger Ltd. 3.8
Norsk Hydro AS ADR 3.6
Newfield Exploration Co. 3.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 7.2
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 3.5
Row: 1, Col: 4, Value: 8.199999999999999
Row: 1, Col: 5, Value: 37.0
Row: 1, Col: 6, Value: 42.6
Crude Petroleum & Gas 42.6%
Oil & Gas Exploration 37.0%
Oil & Gas Services 8.2%
Drilling 3.5%
Oil Field Equipment 1.5%
All Others 7.2%
ENERGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Albert Ruback,
Portfolio Manager of Fidelity Select Energy
Portfolio
Q. HOW HAS THE FUND PERFORMED, ALBERT?
A. For the six months ended August 31, 1995, the fund had a total return of
10.02%. During the same period, the Standard & Poor's Composite Index of
500 Stocks returned 16.81%. For the 12 months ended August 31, 1995, the
fund rose 7.08%, while the S&P was up 21.45%.
Q. WHILE THE FUND RETURNED JUST OVER 10%, IT LAGGED THE BROAD MARKET. WHY
IS THAT?
A. Returns in the broad market were buoyed by the very strong performance
of the technology sector. The fund's focus currently does not include tech
stocks. At the same time, the fund achieved a solid 10% return, due in part
to the strong performance of the chemical divisions within many of the
companies whose stocks I had selected for the fund. A short-term increase
in the price of oil in the second quarter also helped to bolster energy
company earnings. In addition, the fund's small stake in refining and
marketing (R&M) companies benefited from the seasonal strength they saw in
the summer. Finally, some exploration and production (E&P) stocks that I
bought at cheap valuations - something I look to do as a matter of course -
rebounded from very low levels.
Q. LET'S START WITH CHEMICALS. WHY HAVE ENERGY STOCKS WITH CHEMICAL
DIVISIONS DONE WELL?
A. With the economic growth we've seen sustained since the beginning of the
year, demand for chemicals has been growing steadily. This is typical for a
commodity at this point in the economic cycle. Chemical earnings reached a
crescendo in the second quarter of 1995. In addition, there have been no
significant capacity additions in the chemicals area, helping to keep
supply down. This has caused a tightening of the supply/demand equation,
which has enabled companies to increase product prices and improve profit
margins. Occidental was one stock that reaped the benefits of this trend.
The company also has been seeing improvements in its E&P business and has
been using increased cash flow and selling assets to pay off its large debt
burden. Amoco was another company helped by strong chemical earnings; it
also is in the final stages of a cost-cutting program that has helped its
balance sheet.
Q. WHICH OTHER STOCKS PROVED SUCCESSFUL?
A. An E&P company, Newfield Exploration, has benefited from improving
commodity prices and growing production. Two energy service companies,
Schlumberger and Halliburton, benefited from stronger demand for the
high-end seismic exploration technology for which exploration companies
have come to depend on them. Two French companies - Elf Acquitaine and
Total - also were strong performers. Total should have strong production
growth going forward and is emphasizing reducing its costs. I find it to be
a premium company that was trading at what I consider to be an average or
below-average valuation, or stock price relative to cash flow and earnings.
Elf Acquitaine provided solid returns for the fund, although I've since
reduced the stake there because I found the company wasn't being as
aggressive in cost cutting as I had expected. Another stock that helped the
fund was Gas Natural, a company that has the potential to take advantage of
Spain's development and use of natural gas as an energy source.
Q. WHAT STOCKS DIDN'T PERFORM AS WELL AS YOU HAD HOPED?
A. Amerada Hess was a bit frustrating, because its story is taking longer
to develop than I had hoped. I currently intend to stick with the
investment, though, because the company has been cutting costs and selling
assets that don't contribute to its core E&P business. In addition, the
company holds attractive lease positions in the frontier West of Shetlands
area. Atlantic Richfield has been down a bit, but is an extremely
attractive investment. That's because it appears Congress will open the
Alaska National Wildlife Refuge to exploration and production. Atlantic
Richfield has a strong knowledge of the Alaskan geology and is well
positioned to take advantage of new opportunities there. Petroleum Geo
Services, a company focused on the latest seismic technology, had some
short-term scheduling disruptions, but should benefit in the long run from
demand for its products and services.
Q. WHAT'S YOUR OUTLOOK?
A. The next few months could prove difficult for energy companies. While
chemical earnings should remain strong, they could come down off peak
levels. On the E&P side, gas prices have remained sluggish and oil prices
have declined which should pressure earnings. R&M is coming off the summer,
its strongest season historically, which would suggest earnings here could
decline as well. As far as my management is concerned, I'll continue to
pick investments stock-by-stock, looking for those that are selling at
attractive valuations.
FUND FACTS
START DATE: July 14, 1981
TRADING SYMBOL: FSENX
SIZE: as of August 31, 1995, more than
$96 million
MANAGER: Albert Ruback, since December
1994; manager, Fidelity Select Industrial
Equipment Portfolio, 1991-December 1994;
joined Fidelity in 1991
(checkmark)
ENERGY PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 100.0%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 0.5%
FABRICATED PIPE & FITTINGS - 0.5%
Coflexip sponsored ADR (a) 27,000 $ 472,500
CHEMICALS & PLASTICS - 1.2%
PLASTICS & SYNTHETIC RESINS - 1.2%
ARCO Chemical Co. 21,600 1,042,200
CONSTRUCTION - 0.6%
HEAVY CONSTRUCTION - 0.6%
McDermott (J. Ray) SA 21,500 505,250
ENERGY SERVICES - 11.7%
DRILLING - 3.5%
Noble Drilling Corp. (a) 102,600 820,800
Reading & Bates Corp. (a) 98,400 1,193,100
Sonat Offshore Drilling, Inc. 34,400 1,178,200
3,192,100
OIL & GAS SERVICES - 8.2%
Halliburton Co. 70,000 2,966,250
Input/Output, Inc. (a) 13,300 495,425
Nowsco Well Service Ltd. (a) 11,100 118,726
Schlumberger Ltd. 53,200 3,431,400
Tidewater, Inc. 17,000 420,750
7,432,551
TOTAL ENERGY SERVICES 10,624,651
GAS - 2.5%
GAS TRANSMISSION - 1.1%
Enron Corp. 30,000 1,008,750
GAS TRANSMISSION & DISTRIBUTION - 1.4%
Gas Natural SDG SA Series E 10,000 1,228,560
TOTAL GAS 2,237,310
HOLDING COMPANIES - 1.1%
HOLDING COMPANY OFFICES - 1.1%
Shell Transport & Trading PLC 14,800 1,026,750
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.0%
AIR & GAS COMPRESSORS - 0.0%
Enerflex Systems Ltd. (a) 1,200 14,956
OIL & GAS - 82.3%
CRUDE PETROLEUM & GAS - 42.6%
Apache Corp. 36,215 1,054,762
Atlantic Richfield Co. 73,100 7,977,038
Bellwether Exploration Co. (a) 50,000 293,750
British Borneo Petroleum 245,900 1,017,527
Burlington Resources, Inc. 25,000 1,015,625
Coho Resources, Inc. (a) 50,000 243,750
Elf Aquitaine sponsored ADR 5,500 201,438
Global Natural Resources, Inc. (a) 50,000 543,750
Louis Dreyfus Natural Gas Corp. (a) 63,300 862,463
NGC Corp. 18,995 180,453
Newfield Exploration Co. (a) 111,000 3,232,875
Norsk Hydro AS ADR 78,300 3,308,175
Nuevo Energy Corp. (a) 26,200 648,450
Occidental Petroleum Corp. 187,400 4,075,950
Paramount Resources Ltd. 31,000 322,929
Renaissance Energy Ltd. (a) 102,908 2,249,282
Renaissance Energy Ltd. (a)(b) 11,000 240,429
Rio Alto Exploration Ltd. (a) 317,500 885,914
Total SA Class B sponsored ADR 141,167 4,199,718
SHARES VALUE (NOTE 1)
Triton Energy Corp. 40,000 $ 2,120,000
Tullow Oil PLC (a) 1,000,000 1,162,345
Ulster Petroleums Ltd. (a) 168,900 609,521
United Meridian Corp. (a) 20,000 357,500
Vintage Petroleum, Inc. 96,400 1,928,000
38,731,644
NATURAL GAS LIQUIDS - 0.2%
Western Gas Resources, Inc. 10,100 172,963
OIL & GAS EXPLORATION - 37.0%
Amerada Hess Corp. 151,000 7,153,625
Amoco Corp. 10,000 637,500
British Petroleum PLC ADR 35,247 3,176,636
Chevron Corp. 10,400 503,100
Exxon Corp. 14,800 1,017,500
Kerr-McGee Corp. 69,100 3,800,500
Louisiana Land & Exploration Co. 25,000 956,250
Mobil Corp. 11,100 1,057,275
Petroleum Geo-Services AS ADR (a) 110,900 2,841,813
Phillips Petroleum Co. 166,500 5,473,688
Royal Dutch Petroleum Co. 5,000 596,250
Unocal Corp. 218,261 6,356,852
33,570,989
OIL FIELD EQUIPMENT - 1.5%
Camco International, Inc. 58,700 1,335,425
PETROLEUM REFINERS - 1.0%
Repsol SA sponsored ADR 20,000 632,500
Tesoro Petroleum Corp. (a) 30,000 288,750
921,250
TOTAL OIL & GAS 74,732,271
TRUCKING & FREIGHT - 0.1%
TRUCKING, LONG DISTANCE - 0.1%
Trimac Ltd. 15,500 135,515
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $84,200,573) $ 90,791,403
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $240,429 or 0.2% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $30,834,189 and $42,446,797, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $27,215 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balance during the period for
which the loan was outstanding amounted to $3,833,000. The weighted average
interest rate paid was 6.4% (see Note 6 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 72.4%
Norway 6.8
United Kingdom 5.8
France 5.5
Canada 5.0
Spain 2.0
Ireland 1.3
Others (individually less than 1%) 1.2
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $84,694,509. Net unrealized appreciation aggregated
$6,096,894, of which $8,623,910 related to appreciated investment
securities and $2,527,016 related to depreciated investment securities.
ENERGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $84,200,573) - See accompanying schedule $ 90,791,403
Receivable for investments sold 7,052,084
Receivable for fund shares sold 198,826
Dividends receivable 347,951
Redemption fees receivable 315
Other receivables 3,980
Prepaid expenses 11,398
TOTAL ASSETS 98,405,957
LIABILITIES
Payable to custodian bank $ 490,799
Payable for fund shares redeemed 1,440,210
Accrued management fee 51,981
Other payables and accrued expenses 109,416
TOTAL LIABILITIES 2,092,406
NET ASSETS $ 96,313,551
Net Assets consist of:
Paid in capital $ 86,588,120
Undistributed net investment income 872,306
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 2,262,295
Net unrealized appreciation (depreciation) on investments 6,590,830
NET ASSETS, for 5,455,883 shares outstanding $ 96,313,551
NET ASSET VALUE and redemption price per share ($96,313,551 (divided by) 5,455,883 shares) $17.65
Maximum offering price per share (100/97.00 of $17.65) $18.20
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,485,135
Dividends
Interest (including income on securities loaned of $6,603) 289,323
TOTAL INCOME 1,774,458
EXPENSES
Management fee $ 351,153
Transfer agent 513,473
Fees
Redemption fees (53,716
)
Accounting and security lending fees 57,635
Non-interested trustees' compensation 521
Custodian fees and expenses 7,480
Registration fees 11,398
Audit 12,843
Legal 394
Interest 2,056
Miscellaneous 1,063
Total expenses before reductions 904,300
Expense reductions (2,148 902,152
)
NET INVESTMENT INCOME 872,306
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,813,983
Foreign currency transactions 2,088 2,816,071
Change in net unrealized appreciation (depreciation) on investment securities 6,694,936
NET GAIN (LOSS) 9,511,007
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 10,383,313
OTHER INFORMATION $263,240
Sales Charges Paid to FDC
Deferred sales charges withheld $12,018
by FDC
Exchange fees withheld by FSC $40,560
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 872,306 $ 441,180
Net investment income
Net realized gain (loss) 2,816,071 3,967,653
Change in net unrealized appreciation (depreciation) 6,694,936 (6,553,635
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 10,383,313 (2,144,802
)
Distributions to shareholders - (468,393
From net investment income )
From net realized gain (410,066 (3,119,569
) )
TOTAL DISTRIBUTIONS (410,066 (3,587,962
) )
Share transactions 62,436,553 139,154,943
Net proceeds from sales of shares
Reinvestment of distributions 402,158 3,509,410
Cost of shares redeemed (72,567,570 (186,610,132
) )
Paid in capital portion of redemption fees 46,549 211,181
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (9,682,310 (43,734,598
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS 290,937 (49,467,362
)
NET ASSETS
Beginning of period 96,022,614 145,489,976
End of period (including undistributed net investment income of $872,306 and $0, respectively) $ 96,313,551 $ 96,022,614
OTHER INFORMATION
Shares
Sold 3,618,726 8,177,307
Issued in reinvestment of distributions 23,768 222,729
Redeemed (4,151,188 (11,129,608
) )
Net increase (decrease) (508,694) (2,729,572)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.10 $ 16.73 $ 15.84 $ 14.70 $ 15.43 $ 16.64
Income from Investment Operations
Net investment income .13 .07 .06 .23 .17 .16
Net realized and unrealized gain (loss) 1.47 (.11) 1.35 1.16 (.75) .15
Total from investment operations 1.60 (.04) 1.41 1.39 (.58) .31
Less Distributions - (.08) E (.03) (.27) (.16) (.15)
From net investment income
From net realized gain (.06) (.54) E (.57) - (.02) (1.43)
Total distributions (.06) (.62) (.60) (.27) (.18) (1.58)
Redemption fees added to paid in capital .01 .03 .08 .02 .03 .06
Net asset value, end of period $ 17.65 $ 16.10 $ 16.73 $ 15.84 $ 14.70 $ 15.43
TOTAL RETURN B, C 10.02% .04% 9.69% 9.81% (3.55)% 2.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 96,314 $ 96,023 $ 145,490 $ 179,133 $ 77,334 $ 92,611
Ratio of expenses to average net assets 1.56% A 1.85% 1.66% 1.71% A 1.78% 1.79%
Ratio of expenses to average net assets before 1.56% A 1.85% 1.67% 1.71% A 1.78% 1.79%
expense reductions
Ratio of net investment income to average net assets 1.51% A .42% .37% 1.88% A 1.16% .99%
Portfolio turnover rate 59% A 106% 157% 72% A 81% 61%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
ENERGY SERVICE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
ENERGY SERVICE 21.14% 27.15% 5.29% 52.89%
ENERGY SERVICE
(INCL. 3% SALES CHARGE) 17.50% 23.33% 2.14% 48.30%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
ENERGY SERVICE 27.15% 1.04% 4.47%
ENERGY SERVICE
(INCL. 3% SALES CHARGE) 23.33% 0.42% 4.14%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select EnergyStandard & Poo
12/16/85 9700.00 10000.00
12/31/85 9855.20 10080.42
01/31/86 9118.00 10136.87
02/28/86 8739.70 10895.11
03/31/86 8671.80 11503.06
04/30/86 8555.40 11373.07
05/31/86 9050.10 11978.12
06/30/86 8885.20 12180.55
07/31/86 7614.50 11499.66
08/31/86 8371.10 12352.93
09/30/86 8235.30 11331.35
10/31/86 7944.30 11985.16
11/30/86 8215.90 12276.40
12/31/86 8303.20 11963.36
01/31/87 9234.40 13574.82
02/28/87 9622.40 14111.03
03/31/87 10534.20 14518.83
04/30/87 10534.20 14389.62
05/31/87 11349.00 14514.81
06/30/87 12464.50 15247.80
07/31/87 13279.30 16020.87
08/31/87 12270.50 16618.45
09/30/87 11872.80 16254.50
10/31/87 7633.90 12753.28
11/30/87 6799.70 11702.41
12/31/87 7323.50 12592.97
01/31/88 7614.50 13123.13
02/29/88 8283.80 13734.67
03/31/88 8768.80 13310.27
04/30/88 8943.40 13458.01
05/31/88 8332.30 13575.09
06/30/88 7857.00 14198.19
07/31/88 7730.90 14144.24
08/31/88 7876.40 13663.33
09/30/88 7536.90 14245.39
10/31/88 7284.70 14641.41
11/30/88 6974.30 14432.04
12/31/88 7294.40 14684.60
01/31/89 7740.60 15759.52
02/28/89 7827.90 15367.10
03/31/89 8322.60 15725.16
04/30/89 8720.30 16541.29
05/31/89 8875.50 17211.21
06/30/89 9166.50 17113.11
07/31/89 9680.60 18658.42
08/31/89 10136.50 19024.13
09/30/89 9991.00 18946.13
10/31/89 9496.30 18506.58
11/30/89 10311.10 18884.12
12/31/89 11630.30 19337.33
01/31/90 10883.40 18039.80
02/28/90 11911.60 18272.51
03/31/90 12483.90 18756.73
04/30/90 11824.30 18287.82
05/31/90 13812.80 20070.88
06/30/90 13104.70 19934.40
07/31/90 14336.60 19870.61
08/31/90 14084.40 18074.30
09/30/90 13812.80 17194.08
10/31/90 12076.50 17120.15
11/30/90 12260.80 18226.11
12/31/90 11834.41 18734.62
01/31/91 11300.01 19551.45
02/28/91 13116.95 20949.38
03/31/91 12096.75 21456.35
04/30/91 12155.04 21507.85
05/31/91 12475.68 22436.99
06/30/91 10843.35 21409.37
07/31/91 11659.51 22407.05
08/31/91 11533.20 22938.10
09/30/91 10474.13 22555.03
10/31/91 10629.59 22857.27
11/30/91 9356.76 21936.12
12/31/91 9055.56 24445.61
01/31/92 8929.24 23990.92
02/29/92 9113.85 24302.81
03/31/92 8462.86 23828.90
04/30/92 9162.43 24529.47
05/31/92 9891.15 24649.67
06/30/92 9317.89 24282.39
07/31/92 9706.55 25275.53
08/31/92 10202.07 24757.39
09/30/92 10512.99 25049.52
10/31/92 9968.88 25137.20
11/30/92 9764.84 25994.38
12/31/92 9366.48 26314.11
01/31/93 9735.69 26535.14
02/28/93 10697.60 26896.02
03/31/93 11542.92 27463.53
04/30/93 12165.15 26798.91
05/31/93 12729.16 27517.12
06/30/93 12661.09 27596.92
07/31/93 12836.13 27486.53
08/31/93 13283.45 28528.27
09/30/93 12894.47 28308.61
10/31/93 12709.71 28894.59
11/30/93 11367.75 28620.10
12/31/93 11329.36 28966.40
01/31/94 11436.70 29951.26
02/28/94 11378.15 29139.58
03/31/94 10529.18 27869.09
04/30/94 11079.69 28225.82
05/31/94 11573.24 28688.72
06/30/94 11925.78 27985.85
07/31/94 12147.37 28903.78
08/31/94 11663.90 30088.84
09/30/94 12107.08 29351.66
10/31/94 12590.56 30012.07
11/30/94 11935.85 28919.03
12/31/94 11393.65 29347.90
01/31/95 11465.24 30108.89
02/28/95 12242.55 31282.24
03/31/95 12917.57 32205.38
04/30/95 13705.11 33153.82
05/31/95 14063.07 34478.98
06/30/95 13582.37 35279.93
07/31/95 14257.40 36449.81
08/31/95 14840.38 36541.30
Let's say you invested $10,000 in Fidelity Select Energy Service Portfolio
on December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $14,830 - a 48.30%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Western Atlas, Inc. 9.2
Schlumberger Ltd. 8.9
Sonat Offshore Drilling, Inc. 8.8
BJ Services Co. 8.1
McDermott (J. Ray) SA 7.7
Baker Hughes, Inc. 6.9
Halliburton Co. 4.8
Reading & Bates Corp. 4.7
Nabors Industries, Inc. 3.4
Cooper Cameron Corp. 2.7
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 7.4
Row: 1, Col: 2, Value: 2.7
Row: 1, Col: 3, Value: 9.1
Row: 1, Col: 4, Value: 9.199999999999999
Row: 1, Col: 5, Value: 31.1
Row: 1, Col: 6, Value: 40.5
Oil & Gas Services 40.5%
Drilling 31.1%
Surveying Services 9.2%
Heavy Construction 9.1%
Fluid Valve & Hose Fittings 2.7%
All Others 7.4%
ENERGY SERVICE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Daniel Pickering,
Portfolio Manager of Fidelity Select Energy
Service Portfolio
Q. DAN, HOW HAS THE FUND PERFORMED?
A. It has done very well. The fund had a total return of 21.14% from March
1, 1995, through August 31, 1995. During the same period, the Standard &
Poor's Composite Index of 500 Stocks returned 16.81%. For the 12 months
ended August 31, 1995, the fund rose 27.15%, while the S&P 500 was up
21.45%.
Q. WHAT HELPED THE FUND PERFORM SO WELL?
A. Most of the large companies in the sector posted earnings improvements;
many had significant positive earnings surprises. Improved oil prices early
in the year gave energy service customers - diversified energy companies
such as British Petroleum, Shell and Exxon - increased confidence and
higher levels of free cash flow. These customers stepped up their drilling
activity, which resulted in higher revenues and profits for the energy
service sector.
Q. DID YOU FOCUS ON ANY PARTICULAR SEGMENTS OF THE ENERGY SERVICE SECTOR?
A. There were two areas. One was companies with international exposure.
When drilling activity picks up internationally, the rigs involved tend to
generate more revenue for a company such as Schlumberger than similar
activity in the U.S. In addition, I also put about 15% to 20% of the fund's
investments into companies that offer deep water drilling technology, such
as Sonat Offshore and Reading & Bates. The combination of higher oil
prices, increased oil company spending and successful exploration in the
North Sea and the Gulf of Mexico increased demand for this specialized
technology. There are currently 22 rigs capable of deep water drilling, and
demand for rigs increased to 30. As a result, these companies were able to
get better prices and lock up contracts for the next two years.
Q. YOU'VE MENTIONED THREE STOCKS THAT HAVE DONE WELL - SCHLUMBERGER, SONAT
OFFSHORE AND READING & BATES. WHAT WERE SOME OF THE OTHER SOLID PERFORMERS
FOR THE FUND?
A. Similar to Schlumberger, Baker Hughes and Western Atlas benefited from
the pick-up in international drilling activity. All three companies also
reaped the benefits of demand for the new high-end drilling products
they've developed. BJ Services merged with Western Company. During the
process, uncertainty over the merger forced both stocks down, at which
point I bought more. As the deal went through, both stocks went up and made
money for the fund. Camco, a company that sells drill bits and pumps, also
saw earnings improvements due to increased drilling activity.
Q. WHICH STOCKS DIDN'T PERFORM AS WELL AS YOU HAD HOPED?
A. McDermott International - a company that supplies power generation
equipment and a stock the fund no longer owns - stalled as the big
international power projects it's involved in took longer to come to
fruition than expected. Sonat, Inc., a gas pipeline company that owns 40%
of Sonat Offshore, also stumbled. I bought the stock as another way to gain
exposure to Sonat Offshore. During the time the fund owned the stock, I
anticipated that investors would come to appreciate what was going on with
Sonat Offshore and that Sonat, Inc., would also benefit. Unfortunately,
natural gas prices weakened during the first half of the year, and that
factor overwhelmed whatever positive influence Sonat Offshore had on
investor interest in the stock.
Q. WHAT DO YOU SEE HAPPENING IN THE ENERGY SERVICE SECTOR OVER THE NEXT SIX
MONTHS?
A. I expect we could see continued strength in international drilling
activity based on improved commodity - oil and gas - prices. In addition,
it appears that integrated oil companies such as Exxon will use the extra
cash flow they've enjoyed from strength in their chemicals divisions to
reinvest in the exploration and production side of their business. If
improvements in international activity continue - along with higher
projected earnings in 1996 compared to 1995 - there is a potential for
ongoing enthusiasm for the sector as an investment, which would push the
stocks higher. The risk to this story is in the commodity and in people's
perception of the link between oil prices and energy service companies. The
Organization of Petroleum Exporting Countries - OPEC - has a meeting coming
up in November, and it might increase production to increase its share of
worldwide production. That would lead to a drop in oil prices. At the same
time, people need oil - demand is growing one million barrels a day per
year - and somebody has to find new oil. The companies in this sector help
to do so, so demand for their services should be sustained.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSESX
SIZE: as of August 31, 1995, more than
$103 million
MANAGER: Daniel Pickering, since December
1994; manager Fidelity Select Natural Gas
Portfolio, since February 1995; equity analyst
since August 1994; joined Fidelity in 1994
(checkmark)
ENERGY SERVICE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.6%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 2.7%
FLUID VALVE & HOSE FITTINGS - 2.7%
Cooper Cameron Corp. (a) 100,088 $ 2,364,579
COMPUTER SERVICES & SOFTWARE - 1.1%
CAD/CAM/CAE - 1.1%
Landmark Graphics Corp. (a) 38,500 981,750
CONSTRUCTION - 7.7%
HEAVY CONSTRUCTION - 7.7%
McDermott (J. Ray) SA 288,800 6,786,800
ELECTRONIC INSTRUMENTS - 0.8%
LABORATORY ANALYTICAL INSTRUMENTS - 0.8%
Numar Corp. (a) 58,000 714,125
ENERGY SERVICES - 70.6%
DRILLING - 31.1%
Arethusa Offshore Ltd. 108,800 2,284,800
Atwood Oceanics, Inc. (a) 49,200 1,055,494
ENSCO International, Inc. (a) 108,800 1,958,400
Falcon Drilling, Inc. (a) 30,000 345,000
Global Marine, Inc. (a) 110,000 742,500
Marine Drilling Cos., Inc. (a) 177,900 867,263
Nabors Industries, Inc. (a) 322,000 2,978,500
Noble Drilling Corp. (a) 294,250 2,354,000
Reading & Bates Corp. (a) 346,700 4,203,738
Rowan Companies, Inc. (a) 90,000 731,250
Smedvig AS 4,500 81,289
Sonat Offshore Drilling, Inc. 228,300 7,819,275
Transocean Drilling AS (a) 125,400 1,786,826
Wilrig AS (a) 28,100 299,747
27,508,082
OIL & GAS SERVICES - 39.5%
BJ Services Co. (a) 287,088 7,177,200
Baker Hughes, Inc. 270,700 6,090,750
Canadian Fracmaster Ltd. 40,000 171,137
Dresser Industries, Inc. 21,200 508,800
Energy Ventures, Inc. (a) 59,000 1,180,000
Enterra Corp. (a) 20,000 437,500
Global Industries Ltd. (a) 22,100 491,725
Halliburton Co. 100,100 4,241,738
Hornbeck Offshore Services, Inc. (a) 30,000 451,875
Offshore Logistics, Inc. (a) 37,600 517,000
Petroleum Helicopters, Inc. (non-vtg.) 8,300 72,625
Pride Petroleum Services, Inc. (a) 128,400 1,139,550
Schlumberger Ltd. 121,800 7,856,100
Smith International, Inc. (a) 50,000 875,000
Tidewater, Inc. 57,600 1,425,600
Varco International, Inc. (a) 7,400 81,400
Weatherford International, Inc. (a) 176,500 2,316,563
35,034,563
TOTAL ENERGY SERVICES 62,542,645
OIL & GAS - 5.5%
CRUDE PETROLEUM & GAS - 2.1%
Canada Occidental Petroleum Ltd. 10,000 312,512
Chesapeake Energy Corp. (a) 35,600 907,800
Unit Corp. (a) 172,100 623,863
1,844,175
OIL & GAS EXPLORATION - 0.8%
Petroleum Geo-Services AS ADR 30,000 768,750
OIL FIELD EQUIPMENT - 2.6%
Camco International, Inc. 100,700 2,290,925
TOTAL OIL & GAS 4,903,850
SHARES VALUE (NOTE 1)
SERVICES - 9.2%
SURVEYING SERVICES - 9.2%
Western Atlas, Inc. (a) 179,500 $ 8,144,813
TOTAL COMMON STOCKS
(Cost $76,984,477) 86,438,562
CONVERTIBLE PREFERRED STOCKS - 1.4%
CONSTRUCTION - 1.4%
HEAVY CONSTRUCTION - 1.4%
McDermott (J. Ray) SA Series B $2.25
(Cost $1,523,148) 25,100 1,242,450
NONCONVERTIBLE BONDS - 1.0%
PRINCIPAL
AMOUNT
ENERGY SERVICES - 1.0%
OIL & GAS SERVICES - 1.0%
Tuboscope Vetco International, Inc.
gtd. 10 3/4%, 4/15/03
(Cost $900,000) $ 900,000 906,750
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $79,407,625) $ 88,587,762
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $222,650,457 and $214,926,153, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $239,485 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $8,961,000 and $2,528,844,
respectively. The weighted average interest rate paid was 6.3% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 84.5%
Panama 9.1
Norway 5.9
Others (individually less than 1%) 0.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $79,942,475. Net unrealized appreciation aggregated
$8,645,287, of which $10,010,066 related to appreciated investment
securities and $1,364,779 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$1,641,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
ENERGY SERVICE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value $ 88,587,762
(cost $79,407,625) - See accompanying schedule
Cash 79
Receivable for investments sold 5,988,633
Receivable for fund shares sold 12,030,875
Dividends receivable 84,500
Interest receivable 36,281
Redemption fees receivable 620
Prepaid expenses 31,413
TOTAL ASSETS 106,760,163
LIABILITIES
Payable for investments purchased $ 71,812
Payable for fund shares redeemed 2,995,946
Accrued management fee 55,178
Notes payable 171,000
Other payables and accrued expenses 126,514
TOTAL LIABILITIES 3,420,450
NET ASSETS $ 103,339,713
Net Assets consist of:
Paid in capital $ 81,414,457
Undistributed net investment income 1,013,286
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 11,731,833
Net unrealized appreciation (depreciation) on investments 9,180,137
NET ASSETS, for 7,126,098 $ 103,339,713
shares outstanding
NET ASSET VALUE and redemption price per share ($103,339,713 (divided by) 7,126,098 shares) $14.50
Maximum offering price per share (100/97.00 of $14.50) $14.95
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,332,767
Dividends
Interest (including income on securities loaned of $7,429) 812,352
TOTAL INCOME 2,145,119
EXPENSES
Management fee $ 501,026
Transfer agent 669,690
Fees
Redemption fees (182,848
)
Accounting and security lending fees 81,765
Non-interested trustees' compensation 325
Custodian fees and expenses 16,393
Registration fees 31,413
Audit 11,056
Legal 220
Interest 14,224
Miscellaneous 1,153
Total expenses before reductions 1,144,417
Expense reductions (12,584 1,131,833
)
NET INVESTMENT INCOME 1,013,286
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 14,538,797
Foreign currency transactions (164 14,538,633
)
Change in net unrealized appreciation (depreciation) on investment securities 10,461,348
NET GAIN (LOSS) 24,999,981
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 26,013,267
OTHER INFORMATION $697,191
Sales Charges Paid to FDC
Deferred sales charges withheld $2,469
by FDC
Exchange fees withheld by FSC $154,568
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 1,013,286 $ 114,673
Net investment income
Net realized gain (loss) 14,538,633 274,562
Change in net unrealized appreciation (depreciation) 10,461,348 74,964
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 26,013,267 464,199
Distributions to shareholders - (50,886
From net investment income )
In excess of net investment income - (42,014
)
From net realized gain - (1,312,181
)
In excess of net realized gain - (498,798
)
TOTAL DISTRIBUTIONS - (1,903,879
)
Share transactions 373,264,046 244,302,548
Net proceeds from sales of shares
Reinvestment of distributions - 1,876,010
Cost of shares redeemed (360,084,596 (222,407,429
) )
Paid in capital portion of redemption fees 352,550 606,169
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 13,532,000 24,377,298
TOTAL INCREASE (DECREASE) IN NET ASSETS 39,545,267 22,937,618
NET ASSETS
Beginning of period 63,794,446 40,856,828
End of period (including undistributed net investment income of $1,013,286 and $66,450, respectively)$103,339,713 $ 63,794,446
OTHER INFORMATION
Shares
Sold 28,756,143 20,716,490
Issued in reinvestment of distributions - 177,460
Redeemed (26,960,385 (19,068,782
) )
Net increase (decrease) 1,795,758 1,825,168
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.97 $ 11.66 $ 11.01 $ 9.43 $ 12.51 $ 12.19
Income from Investment Operations
Net investment income (loss) .08 .02 .03 .01 (.12) -
Net realized and unrealized gain (loss) 2.42 .67 .51 1.47 (3.11) .15
Total from investment operations 2.50 .69 .54 1.48 (3.23) .15
Less Distributions - (.01) (.05) - - (.02)
From net investment income
In excess of net investment income - (.01) - - - -
From net realized gain - (.35) - - - -
In excess of net realized gain - (.13) - - - -
Total distributions - (.50) (.05) - - (.02)
Redemption fees added to paid in capital .03 .12 .16 .10 .15 .19
Net asset value, end of period $ 14.50 $ 11.97 $ 11.66 $ 11.01 $ 9.43 $ 12.51
TOTAL RETURN B, C 21.14% 7.60% 6.36% 16.76% (24.62)% 2.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 103,340 $ 63,794 $ 40,857 $ 85,234 $ 41,322 $ 73,398
Ratio of expenses to average net assets 1.38% A 1.79% 1.65% 1.76% A 2.07% 1.82%
Ratio of expenses to average net assets before 1.39% A 1.81% 1.66% 1.76% A 2.07% 1.82%
expense reductions
Ratio of net investment income (loss) to average net 1.23% A .19% .23% .13% A (1.13)% (.02)%
assets
Portfolio turnover rate 335% A 209% 137% 236% A 89% 62%
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D NET INVESTMENT
INCOME
(LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD.
</TABLE>
NATURAL GAS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
AUGUST 31, 1995 MONTHS YEAR FUND
NATURAL GAS 12.37% 7.14% 2.59%
NATURAL GAS
(INCL. 3% SALES CHARGE) 9.00% 3.92% -0.49%
S&P 500 16.81% 21.45% 34.91%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 21, 1993. You can compare these figures to the performance
of the S&P 500 - a common proxy for the U.S. stock market. This benchmark
includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
AUGUST 31, 1995 YEAR FUND
NATURAL GAS 7.14% 1.09%
NATURAL GAS
(INCL. 3% SALES CHARGE) 3.92% -0.21%
S&P 500 21.45% 13.50%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Fidelity SeleStandard &
04/21/93 9700.00 10000.00
04/30/93 9515.70 9893.80
05/31/93 9670.90 10158.96
06/30/93 9952.20 10188.42
07/31/93 9913.40 10147.66
08/31/93 10767.00 10532.26
09/30/93 10582.70 10451.16
10/31/93 10010.40 10667.50
11/30/93 9156.80 10566.16
12/31/93 9209.91 10694.01
01/31/94 9672.37 11057.61
02/28/94 9327.98 10757.95
03/31/94 8993.44 10288.90
04/30/94 9692.05 10420.60
05/31/94 9613.33 10591.50
06/30/94 9662.53 10332.00
07/31/94 9603.49 10670.89
08/31/94 9288.63 11108.40
09/30/94 9229.59 10836.24
10/31/94 9554.30 11080.06
11/30/94 8717.93 10676.52
12/31/94 8580.06 10834.86
01/31/95 8313.78 11115.81
02/28/95 8856.20 11548.99
03/31/95 9378.89 11889.80
04/30/95 9536.79 12239.95
05/31/95 9902.07 12729.18
06/30/95 9665.13 13024.88
07/31/95 9665.13 13456.79
08/31/95 9951.43 13490.56
Let's say you invested $10,000 in Fidelity Select Natural Gas Portfolio on
April 21, 1993, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would be valued at $9,951 - a -0.49%
decrease. That compares to $10,000 invested in the S&P 500, which would
have grown to $13,491 over the same period - a 34.91% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Anadarko Petroleum Corp. 8.0
Chesapeake Energy Corp. 5.4
Burlington Resources, Inc. 4.6
Enron Corp. 3.3
Pacific Enterprises 3.2
Panhandle Eastern Corp. 3.2
Vastar Resources, Inc. 3.1
Global Natural Resources, Inc. 2.8
Louisiana Land & Exploration Co. 2.6
TransTexas Gas Corp. 2.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 16.6
Row: 1, Col: 2, Value: 3.3
Row: 1, Col: 3, Value: 9.5
Row: 1, Col: 4, Value: 10.1
Row: 1, Col: 5, Value: 13.1
Row: 1, Col: 6, Value: 47.4
Crude Petroleum & Gas 47.4%
Gas Distribution 13.1%
Gas Transmission 10.1%
Gas Transmission &
Distribution 9.5%
Oil & Gas Exploration 3.3%
All Others 16.6%*
* INCLUDES SHORT-TERM INVESTMENTS
NATURAL GAS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Daniel Pickering,
Portfolio Manager
of Fidelity Select
Natural Gas Portfolio
Q. DAN, HOW HAS THE FUND PERFORMED?
A. For the six months ended August 31, 1995, the fund had a total return of
12.37%. During the same period, the Standard & Poor's Composite Index of
500 Stocks returned 16.81%. For the 12 months ended August 31, 1995, the
fund rose 7.14%, while the S&P 500 was up 21.45%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. Even though the fund trailed the broad market, I thought it performed
well given the fact that the price of natural gas was low. When the
commodity price is low, natural gas stocks generally suffer. And, except
for a seasonal pick-up in prices toward the end of the period, natural gas
prices generally decreased during most of the first eight months of 1995.
The two factors that helped the fund overcome this price pressure were a
concentration on gas pipeline and distribution companies and a focus on
small exploration and production (E&P) companies that were showing strong
production growth.
Q. WHY DID NATURAL GAS PRICES FALL DURING MOST OF THE PERIOD?
A. Because of oversupply. First of all, we had a warm winter, leading to a
build-up in natural gas inventories. At the same time, drilling activity
has been strong. The added supply from this activity, added to excess
inventory, depressed prices. Prices picked back up a bit in March and April
due to cooler weather, which increased demand and worked off some of the
inventory. But prices stalled in the May-June-July timeframe because supply
from rigs was still strong. Looking toward the winter, it appears prices
could rebound because inventories need to be built back up.
Q. WHY DID THE FUND BENEFIT FROM HOLDING PIPELINE AND DISTRIBUTION STOCKS,
AS WELL AS SMALL E&P COMPANIES SHOWING STRONG PRODUCTION GROWTH?
A. The pipeline and distribution stocks did well because their prices are
strongly affected by interest rates. The interest rate environment has been
positive for these stocks, because rates have fallen. As far as the small
E&P companies are concerned, strong production growth can help to generate
better financial results and stock prices, even when commodity prices are
weak. At the same time, if one of these companies doesn't meet investors'
production expectations, its stock can suffer. I try to mitigate this
company risk by diversifying my investments in several of these
opportunities. While these stocks may not have been among the top
contributors for the period individually, in aggregate they helped. And
several have been in the fund's top 10 investments, including Chesapeake
Energy, Global Natural Resources and TransTexas Gas.
Q. WHICH STOCKS WERE STRONG CONTRIBUTORS TO THE FUND'S PERFORMANCE?
A. Columbia Gas was one. This pipeline company is coming out of bankruptcy,
and its stock has done well as the uncertainties related to that process
are resolved. Anadarko, a large E&P company and the fund's largest
investment, performed well because of production prospects in Algeria and
the Gulf of Mexico. Vastar, an E&P company spun out from Atlantic
Richfield, has the fifth largest acreage position in the Gulf of Mexico and
has strong production growth.
Q. AND WHICH INVESTMENTS DIDN'T WORK OUT AS WELL AS YOU HAD HOPED?
A. Tejas Power, a gas storage company, suffered because several
high-profile projects are coming on slower than expected. Ampolex fell
because there is a court challenge concerning the value of some convertible
bonds the company issued previously; some holders of those notes contend
they should receive more shares of stock from the conversion than the
company is offering. As a result, investors are unsure of the value of
their equity holdings. Tarragon and Inverness are two Canadian E&P stocks
that haven't performed well because export capacity to the U.S. is limited
and Canadian prices have fallen dramatically.
Q. WHAT'S YOUR OUTLOOK?
A. I continue to be concerned about the long-term supply and demand
scenario. Demand is steady, but supply is growing stronger; it's become
easier and cheaper to find gas. Therefore, I'm not optimistic about gas
prices over the next few years. As a result, I'll continue to look for
companies that are increasing production, because they'll be more immune
from the effects of price. I also intend to focus on gas pipeline stocks
because the interest rate backdrop looks favorable for the near future.
FUND FACTS
START DATE: April 21, 1993
TRADING SYMBOL: FSNGX
SIZE: as of August 31, 1995, more than
$62 million
MANAGER: Daniel Pickering, since February
1995; manager, Fidelity Select Energy Service
Portfolio, since December 1994; equity
analyst, energy service and hotel industries,
since 1994; joined Fidelity in August 1994
(checkmark)
NATURAL GAS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.4%
SHARES VALUE (NOTE 1)
COAL - 1.6%
Eastern Enterprises Co. 34,400 $ 1,053,500
COMPUTER SERVICES & SOFTWARE - 0.8%
CAD/CAM/CAE - 0.8%
Landmark Graphics Corp. (a) 20,000 510,000
ENERGY SERVICES - 1.3%
DRILLING - 0.1%
Wilrig AS (a) 4,100 43,731
OIL & GAS SERVICES - 1.2%
Schlumberger Ltd. 12,300 793,350
TOTAL ENERGY SERVICES 837,081
GAS - 33.9%
GAS & OTHER SERVICES - 1.2%
UGI Corp. 34,368 734,616
GAS DISTRIBUTION - 13.1%
Aquila Gas Pipeline Corp. 94,000 904,750
Brooklyn Union Gas Co. (The) 20,000 502,500
Indiana Energy, Inc. 10,000 207,500
K N Energy, Inc. 34,400 898,700
MCN Corp. 30,000 558,750
NICOR, Inc. 20,000 512,500
National Fuel Gas Co. 10,000 281,250
Northwest Natural Gas Co. 9,000 279,000
Pacific Enterprises 85,100 2,042,400
Piedmont Natural Gas, Inc. 36,462 742,913
Public Service Co. of
North Carolina, Inc. 10,282 156,801
WICOR, Inc. 10,000 293,750
Washington Gas Light Co. 50,000 956,250
8,337,064
GAS TRANSMISSION - 10.1%
Enron Corp. 62,410 2,098,536
ONEOK, Inc. 24,700 540,313
Panhandle Eastern Corp. 81,550 2,038,750
Tejas Power Corp. (a) 71,000 639,000
Williams Companies, Inc. 31,400 1,150,025
6,466,624
GAS TRANSMISSION & DISTRIBUTION - 9.5%
Bay State Gas Co. 10,000 235,000
Columbia Gas System, Inc. (The) (a) 34,695 1,222,999
Consolidated Natural Gas Co. 25,000 965,625
El Paso Natural Gas Co. 11,400 320,625
Equitable Resources, Inc. 20,000 557,500
Questar Corp. 42,740 1,303,570
South Jersey Industries, Inc. 5,000 99,375
Southern Union Company 10,000 175,000
Tejas Gas Corp. (a) 19,670 978,583
Yankee Energy System, Inc. 10,000 208,750
6,067,027
TOTAL GAS 21,605,331
OIL & GAS - 52.4%
CRUDE PETROLEUM & GAS - 46.9%
American Exploration Co. (a) 12,000 138,000
Anadarko Petroleum Corp. 107,075 5,112,831
Apache Corp. 3,225 93,928
SHARES VALUE (NOTE 1)
Barrett Resources Corp. (a) 23,700 $ 509,550
Belden & Blake Corp. 30,000 487,500
Berry Petroleum Co. Class A (a) 36,600 356,850
Burlington Resources, Inc. 71,657 2,911,066
Canada Occidental Petroleum Ltd. 40,400 1,262,547
Chesapeake Energy Corp. (a) 136,200 3,473,100
Devon Energy Corp. (a) 18,100 382,363
Enron Oil & Gas Co. 43,900 1,020,675
Flores & Rucks, Inc. (a) 77,200 849,200
Fortune Petroleum Corp. 85,000 286,875
Global Natural Resources, Inc. (a) 165,500 1,799,813
Inverness Petroleum Ltd. (a) 32,000 154,768
NGC Corp. 17,805 169,148
Newfield Exploration Co. (a) 26,350 767,444
Noble Affiliates, Inc. 41,950 1,158,869
Northstar Energy Corp. (a) 47,800 404,573
Pancanadian Petroleum Ltd. 20,000 710,592
Pinnacle Resources Ltd. (a) 22,900 257,720
Renaissance Energy Ltd. (a) 23,000 502,716
Swift Energy Co. 40,000 360,000
Tarragon Oil & Gas Ltd. (a) 40,500 354,087
Texas Meridian Resources Corp. 60,000 660,000
Total SA sponsored ADR 12,470 370,983
TransTexas Gas Corp. 83,800 1,487,450
Triton Energy Corp. 9,900 524,700
Unit Corp. (a) 30,000 108,750
United Meridian Corp. (a) 30,000 536,250
Vastar Resources, Inc. 63,500 1,984,375
Vintage Petroleum, Inc. 30,100 602,000
Wascana Energy, Inc. (a) 15,000 129,748
29,928,471
OIL & GAS EXPLORATION - 3.3%
Ampolex Ltd. Ord. 151,801 359,275
Louisiana Land & Exploration Co. 43,000 1,644,750
Petro-Canada 10,000 98,590
2,102,615
OIL FIELD EQUIPMENT - 0.5%
Ensign Resource Service Group Ord. 93,300 347,111
PETROLEUM REFINERS - 1.7%
Coastal Corp. (The) 32,900 1,077,475
TOTAL OIL & GAS 33,455,672
SERVICES - 1.4%
SURVEYING SERVICES - 1.4%
Western Atlas, Inc. (a) 19,800 898,425
TOTAL COMMON STOCKS
(Cost $55,286,570) 58,360,009
NONCONVERTIBLE BONDS - 0.5%
PRINCIPAL
AMOUNT
OIL & GAS - 0.5%
CRUDE PETROLEUM & GAS - 0.5%
Mesa Capital Corp. secured
12 3/4%, 6/30/98 (b)
(Cost $319,056) $ 350,000 322,000
REPURCHASE AGREEMENTS - 8.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 5,180,837 $ 5,180,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $60,785,626) $ 63,862,009
LEGEND
1. Non-income producing
2. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $21,060,469 and $47,623,093 respectively (see Note 4 of Notes to
Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $47,324 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $1,782,000 and $1,395,000,
respectively. The weighted average interest rate paid was 6.5% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $61,095,580. Net unrealized appreciation aggregated
$2,766,429, of which $4,377,294 related to appreciated investment
securities and $1,610,865 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $2,687,000 which will expire on February 28, 2003.
The fund has elected to defer to its fiscal year ending February 28, 1996
$5,603,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
NATURAL GAS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $5,180,000) (cost $60,785,626) - See $ 63,862,009
accompanying schedule
Cash 37
Receivable for investments sold 1,661,881
Receivable for fund shares sold 334,454
Dividends receivable 117,024
Interest receivable 7,438
Redemption fees receivable 159
Other receivables 230
Prepaid expenses 9,838
TOTAL ASSETS 65,993,070
LIABILITIES
Payable for investments purchased $ 2,146,188
Payable for fund shares redeemed 850,333
Accrued management fee 32,327
Other payables and accrued expenses 78,207
TOTAL LIABILITIES 3,107,055
NET ASSETS $ 62,886,015
Net Assets consist of:
Paid in capital $ 64,556,427
Undistributed net investment income 162,794
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (4,909,572
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 3,076,366
NET ASSETS, for 6,239,225 $ 62,886,015
shares outstanding
NET ASSET VALUE and redemption price per share ($62,886,015 (divided by) 6,239,225 shares) $10.08
Maximum offering price per share (100/97.00 of $10.08) $10.39
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 667,593
Dividends
Interest 104,490
TOTAL INCOME 772,083
EXPENSES
Management fee $ 228,563
Transfer agent 332,420
Fees
Redemption fees (47,985
)
Accounting fees and expenses 37,404
Non-interested trustees' compensation 374
Custodian fees and expenses 10,418
Registration fees 9,838
Audit 12,480
Legal 306
Interest 1,504
Miscellaneous 598
Total expenses before reductions 585,920
Expense reductions (3,303 582,617
)
NET INVESTMENT INCOME 189,466
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 4,115,606
Foreign currency transactions (19 4,115,587
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 4,746,911
Assets and liabilities in foreign currencies (17 4,746,894
)
NET GAIN (LOSS) 8,862,481
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 9,051,947
OTHER INFORMATION $134,504
Sales Charges Paid to FDC
Deferred sales charges withheld $3,979
by FDC
Exchange fees withheld by FSC $27,563
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 189,466 $ 233,355
Net investment income
Net realized gain (loss) 4,115,587 (8,500,543
)
Change in net unrealized appreciation (depreciation) 4,746,894 3,240,598
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 9,051,947 (5,026,590
)
Distributions to shareholders from net investment income (84,840 (174,881
) )
Share transactions 31,952,927 105,674,129
Net proceeds from sales of shares
Reinvestment of distributions 81,459 162,769
Cost of shares redeemed (58,034,344 (83,945,454
) )
Paid in capital portion of redemption fees 25,043 130,955
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (25,974,915 22,022,399
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,007,808 16,820,928
)
NET ASSETS
Beginning of period 79,893,823 63,072,895
End of period (including undistributed net investment income of $162,794 and $58,168, respectively) $ 62,886,015 $ 79,893,823
OTHER INFORMATION
Shares
Sold 3,334,514 11,247,429
Issued in reinvestment of distributions 8,521 18,602
Redeemed (5,997,467 (9,026,223
) )
Net increase (decrease) (2,654,432) 2,239,808
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS YEAR ENDED APRIL 21, 1993
ENDED FEBRUARY 28, (COMMENCEMENT
AUGUST 31, 1995 OF
OPERATIONS) TO
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 FEBRUARY 28, 1994
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 8.98 $ 9.48 $ 10.00
Income from Investment Operations
Net investment income .02 .03 .02
Net realized and unrealized gain (loss) 1.09 (.53) (.46)
Total from investment operations 1.11 (.50) (.44)
Less Distributions (.01) (.02) -
From net investment income
From net realized gain - - (.07)
In excess of net realized gain - - (.06)
Total distributions (.01) (.02) (.13)
Redemption fees added to paid in capital - .02 .05
Net asset value, end of period $ 10.08 $ 8.98 $ 9.48
TOTAL RETURN B, C 12.37% (5.06)% (3.84)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 62,886 $ 79,894 $ 63,073
Ratio of expenses to average net assets 1.55% A 1.66% 1.93% A
Ratio of expenses to average net assets before expense reductions 1.55% A 1.70% 1.94% A
Ratio of net investment income to average net assets .50% A .30% .17% A
Portfolio turnover rate 59% A 177% 44% A
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
PRECIOUS METALS AND MINERALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
PRECIOUS METALS AND
MINERALS 17.16% -2.97% 48.96% 124.23%
PRECIOUS METALS AND MINERALS
(INCL. 3% SALES CHARGE) 13.64% -5.89% 44.49% 117.50%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
PRECIOUS METALS AND MINERALS -2.97% 8.30% 8.41%
PRECIOUS METALS AND MINERALS
(INCL. 3% SALES CHARGE) -5.89% 7.64% 8.08%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have a
history of growth in the long run. And, as with all
stock funds, the share price and return of a
fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to experience
rapid growth you may have the potential for
above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select Precious Standard & Poor
08/31/85 9700.00 10000.00
09/30/85 9374.21 9687.00
10/31/85 8533.48 10134.54
11/30/85 9521.34 10829.77
12/31/85 8922.32 11353.93
01/31/86 10813.98 11417.51
02/28/86 10950.60 12271.54
03/31/86 10278.01 12956.29
04/30/86 9742.04 12809.89
05/31/86 8754.17 13491.37
06/30/86 8932.83 13719.38
07/31/86 8816.50 12952.46
08/31/86 10496.85 13913.54
09/30/86 11868.78 12762.89
10/31/86 10826.54 13499.31
11/30/86 11943.23 13827.34
12/31/86 11858.14 13474.74
01/31/87 13283.25 15289.79
02/28/87 14219.14 15893.74
03/31/87 18281.75 16353.07
04/30/87 19547.33 16207.52
05/31/87 17803.17 16348.53
06/30/87 17547.93 17174.13
07/31/87 21121.32 18044.86
08/31/87 20568.30 18717.93
09/30/87 21206.40 18308.01
10/31/87 15357.10 14364.46
11/30/87 17292.68 13180.83
12/31/87 16305.91 14183.89
01/31/88 13441.07 14781.03
02/29/88 13462.61 15469.83
03/31/88 14582.70 14991.81
04/30/88 14098.05 15158.22
05/31/88 14173.44 15290.10
06/30/88 13656.47 15991.91
07/31/88 13742.63 15931.15
08/31/88 12924.11 15389.49
09/30/88 12051.73 16045.08
10/31/88 12493.30 16491.13
11/30/88 12956.42 16255.31
12/31/88 12415.34 16539.78
01/31/89 12931.71 17750.49
02/28/89 13347.05 17308.50
03/31/89 13347.05 17711.79
04/30/89 12740.88 18631.03
05/31/89 12134.70 19385.59
06/30/89 13088.87 19275.09
07/31/89 13448.08 21015.63
08/31/89 13717.49 21427.54
09/30/89 14200.18 21339.68
10/31/89 14188.96 20844.60
11/30/89 15996.25 21269.83
12/31/89 16408.43 21780.31
01/31/90 17715.19 20318.85
02/28/90 16192.53 20580.96
03/31/90 15488.01 21126.36
04/30/90 13897.17 20598.20
05/31/90 14692.59 22606.52
06/30/90 13624.45 22452.80
07/31/90 14453.96 22380.95
08/31/90 14601.68 20357.71
09/30/90 14272.15 19366.29
10/31/90 12669.94 19283.02
11/30/90 12442.68 20528.70
12/31/90 12950.59 21101.45
01/31/91 11544.92 22021.47
02/28/91 12581.89 23596.01
03/31/91 12339.93 24167.03
04/30/91 12305.37 24225.03
05/31/91 12996.68 25271.56
06/30/91 13849.30 24114.12
07/31/91 13849.30 25237.84
08/31/91 12397.54 25835.97
09/30/91 12651.03 25404.51
10/31/91 13503.64 25744.93
11/30/91 13929.95 24707.41
12/31/91 13149.71 27533.94
01/31/92 13428.75 27021.81
02/29/92 12731.15 27373.09
03/31/92 12231.21 26839.32
04/30/92 11510.36 27628.39
05/31/92 12266.09 27763.77
06/30/92 12335.29 27350.09
07/31/92 12498.37 28468.71
08/31/92 11939.26 27885.10
09/30/92 11450.04 28214.15
10/31/92 10716.21 28312.90
11/30/92 10087.22 29278.37
12/31/92 10274.40 29638.49
01/31/93 10523.26 29887.45
02/28/93 11684.61 30293.92
03/31/93 13272.58 30933.12
04/30/93 15417.52 30184.54
05/31/93 17455.81 30993.49
06/30/93 17740.22 31083.37
07/31/93 20051.07 30959.04
08/31/93 18036.48 32132.38
09/30/93 16614.42 31884.96
10/31/93 18972.67 32544.98
11/30/93 18937.12 32235.80
12/31/93 21743.10 32625.86
01/31/94 20843.63 33735.14
02/28/94 19932.17 32820.92
03/31/94 19728.29 31389.92
04/30/94 19729.09 31791.71
05/31/94 19765.09 32313.10
06/30/94 20161.11 31521.43
07/31/94 20929.15 32555.33
08/31/94 22417.23 33890.10
09/30/94 24133.33 33059.79
10/31/94 23197.28 33803.64
11/30/94 20713.14 32572.51
12/31/94 21495.01 33055.56
01/31/95 17750.41 33912.69
02/28/95 18564.98 35234.27
03/31/95 20449.44 36274.03
04/30/95 20619.65 37342.30
05/31/95 20364.34 38834.87
06/30/95 20607.49 39737.01
07/31/95 21458.54 41054.68
08/31/95 21750.33 41157.73
Let's say you invested $10,000 in Fidelity Select Precious Metals and
Minerals Portfolio on August 31, 1985, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $21,750 - a 117.50%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Barrick Gold Corp. 11.2
Western Areas Gold Mining Ltd. Ord. 4.4
Newmont Mining Corp. 3.9
Anglo American Corp. of South Africa Ltd. ADR 3.8
Western Deep Levels Ltd. ADR 3.7
De Beers Consolidated Mines Ltd. ADR 3.7
Vaal Reefs Exploration & Mining Co. Ltd. ADR 3.6
Free State Consolidated Gold Mines Ltd. ADR 3.5
Euro-Nevada Mining Corp. 3.1
Gold Fields South Africa Ltd. sponsored ADR 3.1
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 27.8
Row: 1, Col: 2, Value: 5.3
Row: 1, Col: 3, Value: 5.9
Row: 1, Col: 4, Value: 30.4
Row: 1, Col: 5, Value: 30.6
Gold Ores
(South Africa) 30.6.%
Gold Ores (Canada) 30.4%
Gold Ores (U.S.) 5.9%
Gold Ores (Australia) 5.3%
All Others 27.8%*
* INCLUDES SHORT-TERM INVESTMENTS
PRECIOUS METALS AND MINERALS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Malcolm MacNaught, Portfolio Manager of Fidelity Select Precious
Metals and Minerals
Portfolio
Q. HOW HAS THE FUND PERFORMED, MALCOLM?
A. For the six months ended August 31, 1995, the fund returned 17.16%.
That's a little better than the Standard & Poor's 500 Index which returned
16.81% for the same time period. For the 12 months ended August 31, 1995,
the fund returned -2.97% and the S&P 500 returned 21.45%.
Q. WHAT FACTORS CONTRIBUTED TO PERFORMANCE?
A. While there's still no inflation out there, retail demand for gold
stocks has grown due to inflation fears. Gold stocks can be much more
volatile than the underlying bullion both on the upside and the downside.
During the past 12 months, the price of gold is down approximately 1%.
Q. WHAT'S YOUR STRATEGY IN THIS KIND OF ENVIRONMENT?
A. The fund has been in a holding pattern for the past twelve months. South
African and Australian markets have underperformed the gold index
representing most North American companies. The fund is still invested in
South African stocks because it's the largest producer of gold in the
world. The market there continues to be plagued by labor disruptions - part
of the new independence process for South Africans. I expect those problems
to lessen eventually and I think we'll see the miners go from a
five-and-a-half day mining schedule to a seven-day schedule at a number of
mines. If that happens, productivity will improve immensely. In the
meantime, 1995 South African production is down 5% to 7% and investors
remain cautious in the face of these unpredictable labor problems.
Q. WHAT ABOUT THE REST OF THE MARKET?
A. Jewelry demand in developing countries is up so far in 1995. There's
particularly strong demand from India, Southeast Asia and a number of
Middle Eastern countries. This has offset heavy selling of gold by several
central banks.
Q. THE FUND'S TOP HOLDINGS HAVEN'T CHANGED MUCH DURING THE PAST SIX MONTHS
. . .
A. That's true. Barrick Gold was still the fund's largest holding at the
end of August. During the past six months it's had outstanding exploration
successes both in Nevada and Chile. I think Barrick has the potential to
grow production from three million ounces of production this year to
something over four million ounces in the next two to three years. In this
environment, that's great news. I also increased the fund's holdings in
Western Areas Gold Mining during the period. Western Areas completed a
merger with South Deep Exploration and now is the longest life mine in
South Africa. That means, it has reserves that will last longer than anyone
else's. Earlier in the year I reduced the fund's holdings in Western Areas
because I wasn't in favor of the acquisition. I used the subsequent drop in
the price of the stock as a buying opportunity. Agnico-Eagle Mines
continues to have outstanding development success at their La Ronde mine in
Quebec. It's also in the process of deepening its main shaft and building a
new deep shaft elsewhere on its property.
Q. WHAT'S BEEN YOUR BIGGEST DISAPPOINTMENT DURING THE PAST SIX MONTHS?
A. The price of gold. Its been trading between $365 and $400 per ounce and
has been unable to break out of that range because of central bank selling
and producer forward selling whenever the cash price approaches $400 per
ounce. I also don't see any reason why it should during the next few months
if economic factors remain the way they were at the end of August. The good
news is that South African production is in a long-term decline and the
former Soviet states will be fortunate to hold production flat.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. With the improbability of gold breaking much above $400 per ounce, the
next few months could be tough. The only strategy that makes sense is to
search for the best companies with growing reserves, production and
earnings. When the market for gold improves, the fund will be well
positioned in quality companies - the ones I expect to perform best over
time. However, this is a highly specialized sector of the market which
depends on perceived inflation and foreign buying of gold. Shareholders
should understand that gold and precious metals are very volatile and
anything can happen.
FUND FACTS
START DATE: July 14, 1981
TRADING SYMBOL: FDPMX
SIZE: as of August 31, 1995, more than
$372 million
MANAGER: Malcolm MacNaught, since 1981;
manager, Fidelity Select American Gold Portfolio,
1985-1995; Fidelity Advisor Global Resources
Fund, since 1988; joined Fidelity in 1968
(checkmark)
PRECIOUS METALS AND MINERALS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.5%
SHARES VALUE (NOTE 1)
AUSTRALIA - 8.5%
METALS & MINING - 0.9%
METAL MINING SERVICES - 0.9%
Acacia Resources Ltd. (a) 1,800,000 $ 3,448,692
PRECIOUS METALS - 7.6%
GOLD & SILVER ORES - 2.3%
Golden Shamrock Mines Ltd. (a) 1,000,000 691,240
North Flindes 540,000 3,042,970
Plutonic Resources Ltd. 1,074,900 5,007,282
8,741,492
GOLD ORES - 5.3%
Aurora Gold Ltd. (a) 500,000 563,515
Gold Mines of Kalgoorlie Ltd. 3,900,000 3,340,506
Goldfields Ltd. (a) 125,860 313,955
Great Central Mines NL
sponsored ADR (a) 100,000 656,250
Great Central Mines NL (a) 2,089,500 4,552,853
Poseidon Gold Ltd. 3,884,800 7,559,821
Ranger Minerals NL (a) 100,000 232,167
Resolute Samantha Ltd. 450,000 1,007,559
St. Barbara Mines Ltd. 2,500,000 1,803,250
20,029,876
TOTAL PRECIOUS METALS 28,771,368
TOTAL AUSTRALIA 32,220,060
CANADA - 31.1%
HOLDING COMPANIES - 0.3%
HOLDING COMPANY OFFICES - 0.3%
Bolivar Goldfields Ltd. (a) 807,200 960,988
METALS & MINING - 0.3%
METAL MINING - 0.3%
Dayton Mining Corp. 255,000 1,067,282
PRECIOUS METALS - 30.5%
GOLD & SILVER ORES - 0.1%
Greenstone Resources Ltd. 200,000 550,616
GOLD ORES - 30.4%
Agnico Eagle Mines Ltd. 851,100 11,557,402
Barrick Gold Corp. 1,700,000 42,849,435
Cambior, Inc. 391,000 4,218,534
Echo Bay Mines Ltd. 400,000 4,166,820
Euro-Nevada Mining Corp. 310,000 11,994,495
Franco Nevada Mining Corp. 140,000 9,023,773
Golden Star Resources
Ltd. Canada (a) 347,600 2,004,463
Kinross Gold Corp. (a) 1,200,000 9,821,796
Orvana Minerals Corp. (a) 950,000 3,357,642
Pegasus Gold, Inc. (a) 427,900 5,293,230
Placer Dome, Inc. 170,000 4,411,437
Prime Resources Group, Inc. (a) 796,956 6,374,700
TVI Pacific, Inc. (a) 639,300 689,747
115,763,474
TOTAL PRECIOUS METALS 116,314,090
TOTAL CANADA 118,342,360
SHARES VALUE (NOTE 1)
GHANA - 2.3%
PRECIOUS METALS - 2.3%
GOLD ORES - 2.3%
Ashanti Goldfields Ltd. GDR 422,800 $ 8,709,680
SOUTH AFRICA - 42.5%
CREDIT & OTHER FINANCE - 0.9%
FINANCIAL SERVICES - 0.9%
Genbel Investments Ltd. Ord. 1,400,000 3,331,048
HOLDING COMPANIES - 1.2%
HOLDING COMPANY OFFICES - 1.2%
Beatrix Mines Ltd. ADR 380,300 3,327,625
Gencor Ltd. (Reg.) 319,500 1,201,457
4,529,082
METALS & MINING - 8.4%
MISCELLANEOUS NONMETAL MINERALS - 3.7%
De Beers Consolidated Mines
Ltd. ADR 548,300 14,084,456
MISCELLANEOUS METAL ORES - 4.7%
Impala Platinum Holdings Ltd.:
ADR (a) 300,000 7,500,000
Ord. 104,700 2,662,957
Rustenberg Platinum Holding
Ltd. ADR 346,558 7,710,916
17,873,873
TOTAL METALS & MINING 31,958,329
PRECIOUS METALS - 32.0%
GOLD & SILVER ORES - 1.4%
Southvaal Holdings Ltd. ADR 194,800 5,503,100
GOLD ORES - 30.6%
Anglo American Corp. of
South Africa Ltd. ADR 270,000 14,411,250
Driefontein Consolidated Ltd.:
ADR 707,500 10,435,625
Ord. 20,700 306,551
Free State Consolidated Gold Mines
Ltd. ADR 1,147,800 13,343,175
Gold Fields of South Africa Ltd. 20,000 552,441
Gold Fields of South Africa Ltd.
sponsored ADR 431,200 11,750,200
Kloof Gold Mining Co. Ltd.
sponsored ADR 930,000 10,578,750
Middle Witwatersrand West Area 600,000 1,722,960
Randfontein Estates Gold Mining Co.
Ltd. ADR (a) 890,700 5,678,213
Vaal Reefs Exploration & Mining Co.
Ltd. ADR 1,947,900 13,757,044
Western Areas Gold Mining Ltd. Ord. 1,070,000 16,753,044
Western Deep Levels Ltd.:
ADR 415,000 14,213,720
Ord. 37,000 1,274,990
Winkelhaak Mines Ltd. ADR 245,700 1,842,750
116,620,713
TOTAL PRECIOUS METALS 122,123,813
TOTAL SOUTH AFRICA 161,942,272
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA - 10.1%
METALS & MINING - 2.6%
MISCELLANEOUS METAL ORES - 2.6%
Stillwater Mining Co. (b) 250,000 $ 5,468,750
Stillwater Mining Co. (a) 200,000 4,375,000
9,843,750
PRECIOUS METALS - 5.2%
GOLD ORES - 5.2%
Amax Gold, Inc. (a) 400,000 2,600,000
Hecla Mining Co. (a) 130,000 1,495,000
Newmont Mining Corp. 345,000 15,007,500
Santa Fe Pacific Gold Corp. 75,000 909,375
20,011,875
SECURITIES INDUSTRY - 2.3%
INVESTMENT MANAGERS - 2.3%
Pioneer Group, Inc. 310,000 8,835,000
TOTAL UNITED STATES OF AMERICA 38,690,625
TOTAL COMMON STOCKS
(Cost $319,585,605) 359,904,997
CONVERTIBLE PREFERRED STOCKS - 0.7%
UNITED STATES OF AMERICA - 0.7%
PRECIOUS METALS - 0.7%
GOLD ORES - 0.7%
Newmont Mining Corp. depositary shares
representing 1/2 share, $1.375 (b)
(Cost $3,015,897) 46,000 2,794,500
BULLION - 0.0%
TROY OUNCES
Gold Bullion (a) 263 100,421
Silver Bullion (5,000 oz Bar) (a) 6,013 32,108
TOTAL BULLION
(Cost $129,751) 132,529
REPURCHASE AGREEMENTS - 4.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account, at 5.82% dated
8/31/95 due 9/1/95 $ 18,135,932 18,133,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $340,864,253) $ 380,965,026
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $8,263,250 or 2.2% of net
assets.
OTHER INFORMATION
Purchases and sales of investments, other than short-term securities,
aggregated $47,184,782 and $87,737,785, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $93,044 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $4,971,000 and $3,405,818,
respectively. The weighted average interest rate paid was 6.6% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
South Africa 42.5%
Canada 31.1
United States 15.6
Australia 8.5
Ghana 2.3
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $341,793,909. Net unrealized appreciation aggregated
$39,171,117, of which $69,126,172 related to appreciated investment
securities and $29,955,055 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $45,248,000 of which $17,296,000, $6,357,000, $2,070,000,
$8,843,000 and $10,682,000 will expire on February 28, 1997, 1998, 1999,
2000 and 2001, respectively.
PRECIOUS METALS AND MINERALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $18,133,000) (cost $340,864,253) - $ 380,965,026
See accompanying schedule
Cash 255
Receivable for investments sold 992,130
Receivable for fund shares sold 492,094
Dividends receivable 1,144,176
Redemption fees receivable 2,691
Prepaid expenses 42,529
TOTAL ASSETS 383,638,901
LIABILITIES
Payable for investments purchased $ 1,008,938
Payable for fund shares redeemed 9,291,135
Accrued management fee 195,663
Other payables and 376,652
accrued expenses
TOTAL LIABILITIES 10,872,388
NET ASSETS $ 372,766,513
Net Assets consist of:
Paid in capital $ 366,859,470
Undistributed net investment income 278,016
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (34,471,107
)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 40,100,134
NET ASSETS, for 20,842,261 shares outstanding $ 372,766,513
NET ASSET VALUE and redemption price per share ($372,766,513 (divided by) 20,842,261 shares) $17.89
Maximum offering price per share (100/97.00 of $17.89) $18.44
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 3,447,134
Dividends
Interest 738,283
TOTAL INCOME 4,185,417
EXPENSES
Management fee $ 1,232,674
Transfer agent 1,597,521
Fees
Redemption fees (162,598
)
Accounting fees and expenses 201,124
Non-interested trustees' compensation 2,124
Custodian fees and expenses 48,035
Registration fees 42,529
Audit 22,306
Legal 1,650
Interest 6,869
Miscellaneous 3,722
Total expenses before reductions 2,995,956
Expense reductions (1,259 2,994,697
)
NET INVESTMENT INCOME 1,190,720
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including 11,767,634
realized loss of $12,243 on sale
of investments in precious metals)
Foreign currency transactions 9,157 11,776,791
Change in net unrealized appreciation (depreciation) on:
Investment securities 45,943,424
Assets and liabilities in foreign currencies (621 45,942,803
)
NET GAIN (LOSS) 57,719,594
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 58,910,314
OTHER INFORMATION $531,133
Sales Charges Paid to FDC
Deferred sales charges withheld $11,084
by FDC
Exchange fees withheld by FSC $119,708
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 1,190,720 $ 4,315,352
Net investment income
Net realized gain (loss) 11,776,791 25,267,179
Change in net unrealized appreciation (depreciation) 45,942,803 (77,536,148
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 58,910,314 (47,953,617
)
Distributions to shareholders - (4,315,352
From net investment income )
In excess of net investment income - (1,235,277
)
TOTAL DISTRIBUTIONS - (5,550,629
)
Share transactions 366,320,138 934,524,938
Net proceeds from sales of shares
Reinvestment of distributions - 5,435,430
Cost of shares redeemed (418,245,736 (934,775,405
) )
Paid in capital portion of redemption fees 1,577,850 3,310,757
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (50,347,748 8,495,720
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,562,566 (45,008,526
)
NET ASSETS
Beginning of period 364,203,947 409,212,473
End of period (including under (over) distribution of net investment income of $278,016 and
$(912,704), $ 372,766,513 $ 364,203,947
respectively)
OTHER INFORMATION
Shares
Sold 21,633,292 53,173,413
Issued in reinvestment of distributions - 324,762
Redeemed (24,646,505 (54,266,578
) )
Net increase (decrease) (3,013,213) (768,403)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.27 $ 16.62 $ 9.86 $ 9.90 $ 10.68 $ 12.23
Income from Investment Operations
Net investment income .05 .17 .21 .09 .10 .18
Net realized and unrealized gain (loss) 2.50 (1.42) 6.48 (.05) (.91) (1.71)
Total from investment operations 2.55 (1.25) 6.69 .04 (.81) (1.53)
Less Distributions - (.18) (.19) (.17) (.10) (.15)
From net investment income
In excess of net investment income - (.05) (.02) - - -
Total distributions - (.23) (.21) (.17) (.10) (.15)
Redemption fees added to paid in capital .07 .13 .28 .09 .13 .13
Net asset value, end of period $ 17.89 $ 15.27 $ 16.62 $ 9.86 $ 9.90 $ 10.68
TOTAL RETURN B, C 17.16% (6.86)% 70.58% 1.51% (6.46)% (11.45)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 372,767 $ 364,204 $ 409,212 $ 137,922 $ 130,002 $ 155,367
Ratio of expenses to average net assets 1.48% A 1.46% 1.55% 1.73% A 1.81% 1.79%
Ratio of expenses to average net assets before 1.48% A 1.46% 1.55% 1.73% A 1.81% 1.79%
expense reductions
Ratio of net investment income to average net assets .59% A .99% 1.38% 1.12% A .92% 1.52%
Portfolio turnover rate 25% A 43% 73% 36% A 44% 41%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
UTILITIES GROWTH PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
UTILITIES GROWTH 12.20% 13.26% 80.86% 240.89%
UTILITIES GROWTH
(INCL. 3% SALES CHARGE) 8.83% 9.86% 75.43% 230.66%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
UTILITIES GROWTH 13.26% 12.58% 13.05%
UTILITIES GROWTH
(INCL. 3% SALES CHARGE) 9.86% 11.90% 12.70%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select UtilitiStandard & Poor's
08/31/85 9700.00 10000.00
09/30/85 9263.55 9687.00
10/31/85 9901.06 10134.54
11/30/85 10312.99 10829.77
12/31/85 10935.79 11353.93
01/31/86 11239.84 11417.51
02/28/86 12034.28 12271.54
03/31/86 12436.40 12956.29
04/30/86 12191.20 12809.89
05/31/86 12696.31 13491.37
06/30/86 13431.90 13719.38
07/31/86 14031.83 12952.46
08/31/86 14960.66 13913.54
09/30/86 13306.65 12762.89
10/31/86 13927.52 13499.31
11/30/86 14051.70 13827.34
12/31/86 13564.93 13474.74
01/31/87 14662.64 15289.79
02/28/87 14146.07 15893.74
03/31/87 13862.95 16353.07
04/30/87 13068.23 16207.52
05/31/87 12859.61 16348.53
06/30/87 13316.58 17174.13
07/31/87 13132.80 18044.86
08/31/87 13545.06 18717.93
09/30/87 13435.79 18308.01
10/31/87 12626.16 14364.46
11/30/87 12203.97 13180.83
12/31/87 12309.37 14183.89
01/31/88 13373.14 14781.03
02/29/88 13268.33 15469.83
03/31/88 12891.04 14991.81
04/30/88 12927.72 15158.22
05/31/88 13331.22 15290.10
06/30/88 13682.31 15991.91
07/31/88 13638.89 15931.15
08/31/88 13617.32 15389.49
09/30/88 14091.72 16045.08
10/31/88 14388.22 16491.13
11/30/88 14361.26 16255.31
12/31/88 14335.03 16539.78
01/31/89 15010.27 17750.49
02/28/89 14916.18 17308.50
03/31/89 15170.78 17711.79
04/30/89 15951.18 18631.03
05/31/89 16709.44 19385.59
06/30/89 17131.50 19275.09
07/31/89 18069.66 21015.63
08/31/89 18149.27 21427.54
09/30/89 18410.82 21339.68
10/31/89 18325.53 20844.60
11/30/89 18928.23 21269.83
12/31/89 19928.94 21780.31
01/31/90 18945.29 20318.85
02/28/90 18911.17 20580.96
03/31/90 18808.83 21126.36
04/30/90 18024.18 20598.20
05/31/90 18962.34 22606.52
06/30/90 19187.05 22452.80
07/31/90 19344.56 22380.95
08/31/90 18282.83 20357.71
09/30/90 18329.50 19366.29
10/31/90 19268.72 19283.02
11/30/90 19776.25 20528.70
12/31/90 20039.45 21101.45
01/31/91 19951.09 22021.47
02/28/91 20811.11 23596.01
03/31/91 21046.73 24167.03
04/30/91 20952.48 24225.03
05/31/91 20958.37 25271.56
06/30/91 20704.14 24114.12
07/31/91 21377.94 25237.84
08/31/91 21867.98 25835.97
09/30/91 22541.78 25404.51
10/31/91 22854.18 25744.93
11/30/91 23117.58 24707.41
12/31/91 24253.35 27533.94
01/31/92 23506.80 27021.81
02/29/92 23334.52 27373.09
03/31/92 23092.05 26839.32
04/30/92 23723.75 27628.39
05/31/92 24183.17 27763.77
06/30/92 24462.92 27350.09
07/31/92 25763.65 28468.71
08/31/92 25750.44 27885.10
09/30/92 25889.10 28214.15
10/31/92 25882.49 28312.90
11/30/92 26060.77 29278.37
12/31/92 26822.35 29638.49
01/31/93 27278.61 29887.45
02/28/93 28681.94 30293.92
03/31/93 29456.19 30933.12
04/30/93 29295.20 30184.54
05/31/93 29358.04 30993.49
06/30/93 30482.09 31083.37
07/31/93 30831.18 30959.04
08/31/93 32171.66 32132.38
09/30/93 32171.66 31884.96
10/31/93 31843.52 32544.98
11/30/93 30286.60 32235.80
12/31/93 30187.13 32625.86
01/31/94 30805.66 33735.14
02/28/94 29407.95 32820.92
03/31/94 28347.63 31389.92
04/30/94 29163.07 31791.71
05/31/94 28580.79 32313.10
06/30/94 28490.58 31521.43
07/31/94 29310.69 32555.33
08/31/94 29195.88 33890.10
09/30/94 28449.58 33059.79
10/31/94 28810.43 33803.64
11/30/94 27768.89 32572.51
12/31/94 27950.06 33055.56
01/31/95 29090.70 33912.69
02/28/95 29470.92 35234.27
03/31/95 29589.21 36274.03
04/30/95 30620.62 37342.30
05/31/95 31094.44 38834.87
06/30/95 31399.03 39737.01
07/31/95 32245.14 41054.68
08/31/95 33065.87 41157.73
Let's say you invested $10,000 in Fidelity Select Utilities Growth
Portfolio on August 31, 1985, and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $33,066 - a 230.66% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Ameritech Corp. 8.5
SBC Communications, Inc. 8.2
BellSouth Corp. 7.9
NYNEX Corp. 6.9
U.S. West, Inc. 6.7
Bell Atlantic Corp. 5.6
GTE Corp. 4.3
Williams Companies, Inc. 3.6
Enron Corp. 2.9
Pacific Enterprises 2.8
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 16.6
Row: 1, Col: 2, Value: 7.2
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 9.300000000000001
Row: 1, Col: 5, Value: 10.7
Row: 1, Col: 6, Value: 48.8
Telephone Services 48.8%
Electric Power 10.7%
Gas Transmission 9.3%
Gas Distribution 7.4%
Electric & Other Services 7.2%
All Others 16.6%*
* INCLUDES SHORT-TERM INVESTMENTS
UTILITIES GROWTH PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
John Muresianu,
Portfolio Manager of
Fidelity Select Utilities
Growth Portfolio
Q. JOHN, HOW HAS THE FUND PERFORMED?
A. For the six months ended August 31, 1995, the fund had a total return of
12.20%, lagging the Standard & Poor's Composite Index of 500 Stocks, which
returned 16.81% for the same period. For the 12 months ended August 31,
1995, the fund returned 13.26%, while the S&P 500 returned 21.45%.
Q. WHAT HAS THE INVESTING ENVIRONMENT BEEN LIKE?
A. Looking broadly, we've seen a strong six months, with the market rising
more than 16%. That was driven by a combination of two factors. First,
corporate earnings continued to be strong, especially in the technology
sector. Second, bond yields dropped significantly - and bond prices rose -
as it became apparent that the economy was slowing. Bond investors often
perceive a slower economy to be a positive backdrop, because it usually is
an environment in which inflation does not threaten to erode the value of a
bond's fixed-income payments. In general, the lower the bond yields, the
higher the stock market, as competition from bonds diminishes. In addition,
with lower bond yields, investors are willing to pay higher valuations -
yardsticks such as price-to-earnings ratios - for corporate earnings.
Remember that utility stocks, in particular, more closely track bonds in
price terms than the market, in general, because of their relatively high
yields and slow growth. Like bonds, utility stocks did well over the past
six months, but not as well as the broad market.
Q. HOW HAVE THE THREE MAJOR SEGMENTS OF THE UTILITIES SECTOR - GAS,
ELECTRIC AND TELEPHONE - PERFORMED?
A. In general, natural gas utility stocks started out well, and then
stumbled. They performed well initially due to the combination of lower
bond yields and the expectation that natural gas prices would rebound from
low levels seen at the beginning of the period. When gas prices did not
recover - and fell further - gas stocks suffered. Electrics - historically
the highest yielding of the three industries - did well initially, because
they are seen as most sensitive to what's going on in the bond market. When
that market gave back some of its gains from mid-July to mid-August,
electrics were quick to do so as well. In addition, concerns about
deregulation and competition can surface from time to time, leading to some
volatility. The same is true for telephone utility stocks, which were
volatile over the period, but ended up performing better than the other
sectors.
Q. YOU'VE CONTINUED TO FOCUS MOST OF THE FUND ON TELEPHONE STOCKS . . .
A. Right. Currently, it appears that the move in the utilities sector is
toward deregulation and competition. Deregulation will bring price
competition to every local monopoly, whether it's an electric, gas or phone
utility. What I think telephone stocks have that electrics and gas don't
have is some growth potential to offset price erosion in the core business.
Cellular service is one area that provides growth potential.
Q. WHAT STOCKS HAVE PROVIDED STRONG PERFORMANCE FOR THE FUND?
A. Earnings growth drove strong performances by several telephone company
stocks, including Ameritech, BellSouth, NYNEX, SBC Communications, U.S.
West, Bell Atlantic and GTE. Williams Companies, an interstate gas pipeline
company with an interest in telecommunications, posted strong performance
as its acquisition of Transco last year was seen in a more favorable light
by investors.
Q. AND WHICH STOCKS DIDN'T DO AS WELL AS YOU WOULD HAVE LIKED?
A. Disappointing earnings caused by a difficult regulatory environment hurt
Pacific Telesis. Regulators set a high productivity hurdle for the company
to meet, and assumed a stronger demand response that didn't materialize
when the company lowered its rates. The low level of earnings raised the
specter of a dividend reduction. El Paso Natural Gas posted disappointing
earnings caused by weak natural gas prices and unusually strong hydro-power
conditions in California that took away market share. And Niagara Mohawk
was hurt by fears that some of its high-priced contracts would be at risk
as the result of the deregulation of the electric utility business in New
York.
Q. WHAT'S YOUR OUTLOOK?
A. It's very uncertain where the market will go from here. On the one hand,
valuations in the market are at historically high levels and profit margins
are near the historical highs seen in the 1960s. That might lead one to
think a correction is in the cards. On the other hand, inflation is at
30-year lows and corporate earnings continue to surprise on the upside as
companies slash costs and benefit from the relatively weak dollar. So the
market could surprise everyone again and go up another 20%. Or, we could
stay right about where we are right now; or it could go down. Given this
uncertainty, I'm focusing on adding value one company at a time, and having
big-picture considerations weigh less in determining how I position the
portfolio.
FUND FACTS
START DATE: December 10, 1981
TRADING SYMBOL: FSUTX
SIZE: as of August 31, 1995, more than
$224 million
MANAGER: John Muresianu, since 1992;
manager, Fidelity Utilities Fund, since 1992;
Fidelity Select Natural Gas Portfolio,
1993-1994; U.S. pension accounts and Canadian
mutual funds, 1990-1992; analyst, natural gas,
life insurance, 1989-1992; joined Fidelity in
1986
(checkmark)
UTILITIES GROWTH PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
CELLULAR - 2.2%
CELLULAR & COMMUNICATION SERVICES - 2.2%
AirTouch Communications, Inc. (a) 153,600 $ 4,992,000
COMPUTERS & OFFICE EQUIPMENT - 0.0%
ELECTRONIC COMPUTERS - 0.0%
Itron, Inc. (a) 1,100 27,500
ELECTRIC UTILITY - 17.2%
ELECTRIC & OTHER SERVICES - 6.5%
Hidroelectrisa de Cantabrico SA 16,550 514,918
IES Industries, Inc. 21,900 552,975
Illinova Corp. 113,100 2,841,638
LG&E Energy Corp. 9,900 383,625
Montana Power Co. 73,300 1,612,600
NIPSCO Industries, Inc. 117,100 3,835,025
New York State Electric & Gas Corp. 300 7,238
Niagara Mohawk Power Corp. 32,100 385,200
Peco Energy Co. 52,600 1,400,475
Public Service Co. of New Mexico (a) 125,500 1,913,875
Rochester Gas & Electric Corp. 21,200 471,700
Sierra Pacific Resources 12,400 266,600
Utilicorp United, Inc. 8,366 226,928
14,412,797
ELECTRIC POWER - 10.7%
AES Corp. (a) 252,249 4,666,607
Boston Edison Co. 46,700 1,196,688
Centerior Energy Corp. 36,700 394,525
Central & South West Corp. 9,200 225,400
Central Louisiana Electric Co., Inc. 66,106 1,619,597
CESC Ltd. GDR (a)(b) 45,000 174,600
CESC Ltd. GDR (warrants) (a)(b) 18,000 -
DQE, Inc. 105,450 2,517,619
Detroit Edison Co. 14,500 444,063
Eastern Utilities Associates 118,244 2,763,954
General Public Utilities Corp. 14,600 417,925
Great Bay Power (a) 12,090 93,698
IPALCO Enterprises, Inc. 800 27,700
Maine Public Service Co. 44,200 988,975
New England Electric Systems 17,800 623,000
Northeast Utilities 23,000 526,125
Nova Scotia Power, Inc. 49,700 425,276
Ohio Edison Co. 26,500 573,063
Pinnacle West Capital Corp. 150,200 3,736,225
Portland General Corp. 47,100 1,130,400
Sithe Energies, Inc. (a) 27,200 244,800
TECO Energy, Inc. 16,900 365,463
United Illuminating Co. 22,500 753,750
23,909,453
TOTAL ELECTRIC UTILITY 38,322,250
GAS - 25.0%
GAS & OTHER SERVICES - 1.7%
MDU Resources Group, Inc. 66,600 2,014,650
UGI Corp. 58,190 1,243,811
Western Resources, Inc. 15,000 453,750
3,712,211
GAS DISTRIBUTION - 7.4%
Energen Corp. 43,500 951,563
MCN Corp. 305,400 5,688,075
NUI Corp. 27,100 409,888
National Fuel Gas Co. 16,800 472,500
New Jersey Resources Corp. 18,400 441,600
NICOR, Inc. 37,100 950,688
SHARES VALUE (NOTE 1)
Pacific Enterprises 257,800 $ 6,187,200
Peoples Energy Corp. 21,300 580,425
WICOR, Inc. 24,700 725,563
16,407,502
GAS TRANSMISSION - 9.3%
Enron Corp. 191,600 6,442,550
ONEOK, Inc. 58,600 1,281,875
Sonat, Inc. 160,800 5,105,400
Tejas Power Corp. (a) 4,500 40,500
Williams Companies, Inc. 217,523 7,966,780
20,837,105
GAS TRANSMISSION & DISTRIBUTION - 6.6%
Columbia Gas System, Inc. (The) (a) 111,900 3,944,475
Consolidated Natural Gas Co. 9,400 363,075
ENSERCH Corp. 87,400 1,431,175
Equitable Resources, Inc. 28,150 784,681
Noram Energy Corp. 58,900 419,663
Questar Corp. 102,300 3,120,150
Tejas Gas Corp. (a) 11,330 563,668
Westcoast Energy, Inc. 218,700 3,335,949
Yankee Energy System, Inc. 36,600 764,025
14,726,861
TOTAL GAS 55,683,679
HOLDING COMPANIES - 1.2%
HOLDING COMPANY OFFICES - 1.2%
CINergy Corp. 102,706 2,631,841
INDEPENDENT POWER - 0.0%
STEAM SUPPLY - 0.0%
Bonneville Pacific Corp. (a) 11,300 57
METALS & MINING - 0.4%
METAL ORES - 0.4%
Cameco, Inc. 32,500 1,015,663
OIL & GAS - 0.9%
CRUDE PETROLEUM & GAS - 0.3%
Nuevo Energy Corp. (a) 1,400 34,650
Occidental Petroleum Corp. 26,500 576,375
611,025
PETROLEUM REFINERS - 0.6%
Coastal Corp. (The) 39,700 1,300,175
TOTAL OIL & GAS 1,911,200
TELEPHONE SERVICES - 48.8%
ALLTEL Corp. 15,600 440,700
Ameritech Corp. 372,100 19,070,125
BCE, Inc. 257 8,271
Bell Atlantic Corp. 207,300 12,386,175
BellSouth Corp. 254,900 17,524,375
Cincinnati Bell, Inc. 22,000 599,500
GTE Corp. 258,900 9,482,213
NYNEX Corp. 343,100 15,439,500
SBC Communications, Inc. 361,100 18,280,680
Telephone & Data Systems, Inc. 17,604 721,764
U.S. West, Inc. 343,659 14,949,167
108,902,470
TOTAL COMMON STOCKS
(Cost $191,777,107) 213,486,660
NONCONVERTIBLE PREFERRED STOCKS - 0.7%
SHARES VALUE (NOTE 1)
ELECTRIC UTILITY - 0.7%
ELECTRIC & OTHER SERVICES - 0.7%
Long Island Lighting Co. $7.95
(Cost $1,595,000) 63,800 $ 1,563,100
REPURCHASE AGREEMENTS - 3.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 7,999,293 7,998,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $201,370,107) $ 223,047,760
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $174,600 or 0.1% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $67,932 and $20,838,979, respectively (see Note 4 of Notes to
Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $3,344 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $1,078,000 and $776,600,
respectively. The weighted average interest rate paid was 6.2% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $201,593,946. Net unrealized appreciation aggregated
$21,453,814, of which $25,948,781 related to appreciated investment
securities and $4,494,967 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$853,000 of losses recognized during the period November 1,1994 to February
28, 1995.
UTILITIES GROWTH PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $7,998,000) (cost $201,370,107) - See $ 223,047,760
accompanying schedule
Cash 392
Receivable for investments sold 1,019,533
Receivable for fund shares sold 879,957
Dividends receivable 506,090
Redemption fees receivable 287
Other receivables 13,518
Prepaid expenses 15,214
TOTAL ASSETS 225,482,751
LIABILITIES
Payable for fund shares redeemed $ 479,996
Accrued management fee 113,188
Other payables and accrued expenses 179,430
TOTAL LIABILITIES 772,614
NET ASSETS $ 224,710,137
Net Assets consist of:
Paid in capital $ 200,906,202
Undistributed net investment income 3,693,801
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (1,567,519
)
Net unrealized appreciation (depreciation) on investments 21,677,653
NET ASSETS, for 5,749,690 $ 224,710,137
shares outstanding
NET ASSET VALUE and redemption price per share ($224,710,137 (divided by) 5,749,690 shares) $39.08
Maximum offering price per share (100/97.00 of $39.08) $40.29
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 4,872,284
Dividends
Interest 203,994
TOTAL INCOME 5,076,278
EXPENSES
Management fee $ 682,815
Transfer agent 795,626
Fees
Redemption fees (53,553
)
Accounting fees and expenses 111,468
Non-interested trustees' compensation 1,098
Custodian fees and expenses 7,190
Registration fees 15,214
Audit 14,286
Legal 825
Interest 665
Miscellaneous 3,626
Total expenses before reductions 1,579,260
Expense reductions (4,015 1,575,245
)
NET INVESTMENT INCOME 3,501,033
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (541,238
)
Foreign currency transactions (66 (541,304
) )
Change in net unrealized appreciation (depreciation) on investment securities 22,098,872
NET GAIN (LOSS) 21,557,568
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 25,058,601
OTHER INFORMATION $154,999
Sales Charges Paid to FDC
Deferred sales charges withheld $10,623
by FDC
Exchange fees withheld by FSC $35,655
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 3,501,033 $ 7,276,449
Net investment income
Net realized gain (loss) (541,304 (691,652
) )
Change in net unrealized appreciation (depreciation) 22,098,872 (7,619,880
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 25,058,601 (1,035,083
)
Distributions to shareholders (310,459 (6,365,877
From net investment income ) )
From net realized gain - (4,277,985
)
TOTAL DISTRIBUTIONS (310,459 (10,643,862
) )
Share transactions 37,728,222 155,428,275
Net proceeds from sales of shares
Reinvestment of distributions 295,707 10,195,372
Cost of shares redeemed (75,723,614 (167,054,799
) )
Paid in capital portion of redemption fees 26,474 223,028
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (37,673,211 (1,208,124
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS (12,925,069 (12,887,069
) )
NET ASSETS
Beginning of period 237,635,206 250,522,275
End of period (including undistributed net investment income of $3,693,801 and $1,881,976,
respectively) $ 224,710,137 $ 237,635,206
OTHER INFORMATION
Shares
Sold 1,033,619 4,450,667
Issued in reinvestment of distributions 8,287 303,279
Redeemed (2,105,776 (4,783,040
) )
Net increase (decrease) (1,063,870) (29,094)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.88 $ 36.61 $ 41.49 $ 37.18 $ 35.57 $ 31.70
Income from Investment Operations
Net investment income .58 1.13 1.33 1.19 1.66 1.59
Net realized and unrealized gain (loss) 3.67 (1.17) (.16) 6.14 2.82 3.41
Total from investment operations 4.25 (.04) 1.17 7.33 4.48 5.00
Less Distributions (.05) (1.05) (1.13) (1.33) (1.69) (.60)
From net investment income
From net realized gain - (.67) (4.94) (1.70) (1.19) (.58)
Total distributions (.05) (1.72) (6.07) (3.03) (2.88) (1.18)
Redemption fees added to paid in capital - .03 .02 .01 .01 .05
Net asset value, end of period $ 39.08 $ 34.88 $ 36.61 $ 41.49 $ 37.18 $ 35.57
TOTAL RETURN B, C 12.20% .21% 2.53% 20.90% 13.23% 16.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 224,710 $ 237,635 $ 250,522 $ 290,718 $ 206,872 $ 197,409
Ratio of expenses to average net assets 1.40% A 1.42% 1.35% 1.42% A 1.51% 1.65%
Ratio of expenses to average net assets before 1.40% A 1.43% 1.36% 1.42% A 1.51% 1.65%
expense reductions
Ratio of net investment income to average net assets 3.10% A 3.24% 3.11% 3.71% A 4.58% 4.75%
Portfolio turnover rate 0% A 24% 61% 34% A 45% 45%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past one, five and 10 years total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
BROKERAGE AND INVESTMENT MANAGEMENT
20.59% 14.39% 183.94% 166.33%
BROKERAGE AND INVESTMENT MANAGEMENT
(INCL. 3% SALES CHARGE)
16.97% 10.96% 175.42% 158.34%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
BROKERAGE AND INVESTMENT
MANAGEMENT 14.39% 23.21% 10.29%
BROKERAGE AND INVESTMENT
MANAGEMENT (INCL. 3% SALES CHARGE) 10.96% 22.46% 9.96%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select BrokeraStandard & Poo
08/31/85 9700.00 10000.00
09/30/85 9080.42 9687.00
10/31/85 9862.51 10134.54
11/30/85 10827.43 10829.77
12/31/85 11264.19 11353.93
01/31/86 12554.14 11417.51
02/28/86 13458.12 12271.54
03/31/86 13813.61 12956.29
04/30/86 13691.73 12809.89
05/31/86 13833.93 13491.37
06/30/86 13823.77 13719.38
07/31/86 12568.12 12952.46
08/31/86 13688.46 13913.54
09/30/86 12089.43 12762.89
10/31/86 13413.46 13499.31
11/30/86 12751.45 13827.34
12/31/86 12344.05 13474.74
01/31/87 14656.02 15289.79
02/28/87 14992.12 15893.74
03/31/87 14931.01 16353.07
04/30/87 13301.43 16207.52
05/31/87 12710.71 16348.53
06/30/87 12690.34 17174.13
07/31/87 12720.89 18044.86
08/31/87 13128.29 18717.93
09/30/87 12680.15 18308.01
10/31/87 8015.49 14364.46
11/30/87 7414.58 13180.83
12/31/87 7795.30 14183.89
01/31/88 8353.84 14781.03
02/29/88 8754.54 15469.83
03/31/88 8523.83 14991.81
04/30/88 8669.54 15158.22
05/31/88 8341.70 15290.10
06/30/88 9228.15 15991.91
07/31/88 9155.20 15931.15
08/31/88 9094.41 15389.49
09/30/88 9325.41 16045.08
10/31/88 9361.89 16491.13
11/30/88 9155.20 16255.31
12/31/88 9241.22 16539.78
01/31/89 10445.53 17750.49
02/28/89 10199.75 17308.50
03/31/89 10212.04 17711.79
04/30/89 10310.35 18631.03
05/31/89 10986.24 19385.59
06/30/89 10677.36 19275.09
07/31/89 11962.59 21015.63
08/31/89 12259.19 21427.54
09/30/89 11876.09 21339.68
10/31/89 10912.16 20844.60
11/30/89 10800.94 21269.83
12/31/89 10540.45 21780.31
01/31/90 10077.28 20318.85
02/28/90 10415.27 20580.96
03/31/90 10703.19 21126.36
04/30/90 9977.13 20598.20
05/31/90 10928.52 22606.52
06/30/90 10915.70 22452.80
07/31/90 10527.19 22380.95
08/31/90 9098.50 20357.71
09/30/90 8321.50 19366.29
10/31/90 7807.67 19283.02
11/30/90 8321.50 20528.70
12/31/90 8835.32 21101.45
01/31/91 9570.54 22021.47
02/28/91 10521.26 23596.01
03/31/91 11598.74 24167.03
04/30/91 11763.53 24225.03
05/31/91 12384.66 25271.56
06/30/91 11560.03 24114.12
07/31/91 12448.28 25237.84
08/31/91 12727.45 25835.97
09/30/91 13387.30 25404.51
10/31/91 14275.55 25744.93
11/30/91 13488.81 24707.41
12/31/91 16102.82 27533.94
01/31/92 16331.23 27021.81
02/29/92 16229.72 27373.09
03/31/92 15798.28 26839.32
04/30/92 14567.41 27628.39
05/31/92 14529.34 27763.77
06/30/92 14186.73 27350.09
07/31/92 14986.16 28468.71
08/31/92 14554.72 27885.10
09/30/92 14453.20 28214.15
10/31/92 15100.36 28312.90
11/30/92 16458.13 29278.37
12/31/92 16927.63 29638.49
01/31/93 17930.09 29887.45
02/28/93 18044.30 30293.92
03/31/93 19490.89 30933.12
04/30/93 19427.42 30184.54
05/31/93 20062.30 30993.49
06/30/93 21014.62 31083.37
07/31/93 21712.99 30959.04
08/31/93 23427.18 32132.38
09/30/93 23858.90 31884.96
10/31/93 23084.34 32544.98
11/30/93 22449.46 32235.80
12/31/93 25277.21 32625.86
01/31/94 25815.91 33735.14
02/28/94 24517.52 32820.92
03/31/94 21768.79 31389.92
04/30/94 21589.23 31791.71
05/31/94 22114.11 32313.10
06/30/94 22956.68 31521.43
07/31/94 22417.99 32555.33
08/31/94 22583.74 33890.10
09/30/94 21727.35 33059.79
10/31/94 21713.54 33803.64
11/30/94 20207.96 32572.51
12/31/94 20912.40 33055.56
01/31/95 20649.96 33912.69
02/28/95 21423.47 35234.27
03/31/95 21644.48 36274.03
04/30/95 22300.22 37342.30
05/31/95 23554.17 38834.87
06/30/95 24879.35 39737.01
07/31/95 26076.30 41054.68
08/31/95 25834.06 41157.73
Let's say you invested $10,000 in Fidelity Select Brokerage and Investment
Management Portfolio on August 31, 1985, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $25,834 - a 158.34%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Waterhouse Investor Services, Inc. 6.6
Legg Mason, Inc. 6.5
Quick & Reilly Group, Inc. (The) 6.2
Jefferies Group, Inc. 6.1
Inter-Regional Financial Group, Inc. 5.9
Morgan Stanley Group, Inc. 5.7
Edwards (A.G.), Inc. 5.3
Morgan Keegan, Inc. 4.9
Raymond James Financial, Inc. 4.7
Perpetual PLC 4.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 6.6
Row: 1, Col: 2, Value: 4.6
Row: 1, Col: 3, Value: 5.3
Row: 1, Col: 4, Value: 7.3
Row: 1, Col: 5, Value: 7.8
Row: 1, Col: 6, Value: 68.40000000000001
Security & Commodity Brokers 68.4%
Investment Managers 7.8%
Security Brokers & Dealers 7.3%
Investment Advice 5.3%
Financial Services 4.6%
All Others 6.6%*
* INCLUDES SHORT-TERM INVESTMENTS
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Jeff Feinberg,
Portfolio Manager of Fidelity Select Brokerage and Investment
Management Portfolio
Q. JEFF, HOW HAS THE FUND PERFORMED?
A. For the six months ended August 31, 1995, the fund returned 20.59%. That
beat the S&P 500 which returned 16.81% for the same time period. For the 12
months ended August 31, 1995, the fund returned 14.39% while the S&P 500
returned 21.45%.
Q. HOW DO YOU EXPLAIN THE FUND'S STRONG PERFORMANCE DURING THE PAST SIX
MONTHS?
A. The business prospects for the brokerage and investment management
industries were very strong during the past six months. Both are tied to
the economy; when interest rates decline, volumes and profits both
increase. For example, when interest rates decline, securities prices
typically increase which benefits brokers in a variety of ways: 1) their
existing inventories increase in value; 2) underwriting levels for new
issues increase, and 3) overall trading values typically increase. There
also seems to be a trend in the current slow growth environment in which
higher stock prices propel industry consolidations, particularly in the
banking, communications and entertainment industries. For every corporate
action, whether a company is going public, merging or issuing new stock,
investment advisors are hired and fees are earned. This kind of activity is
very positive news for brokerage and investment management stocks.
Q. WHAT CHANGES HAVE YOU MADE TO THE FUND DURING THE PAST SIX MONTHS?
A. I've added several regional names to the fund recently. I've been quite
bullish on the domestic market and think many regional firms are
attractively valued. My goal has been to make larger investments in those
stocks I have the most confidence in.
Q. SPECIFICALLY, WHAT ARE SOME OF THE REGIONAL FIRMS THAT YOU'VE FOUND
ATTRACTIVE?
A. Legg Mason in Baltimore is both new to the fund, and one of the top
holdings as of August 31, 1995. It's an investment manager and a brokerage
firm with a stable earnings stream, and a very reasonably priced stock that
I expect will provide positive earnings surprises. Inter-Regional Financial
Group owns brokers Dain Bosworth and Raucher Pierce and as of August 31,
1995, the stock was trading at only six times next year's earnings; many
similar firms are trading at about eight- to 10-times earnings.
Q. WHAT OTHER INVESTMENT THEMES HAVE YOU EMPLOYED DURING THE PAST SIX
MONTHS?
A. I'm interested in discount and deep-discount brokers. Their revenues are
driven solely by the number of trades they execute per day. July 1995 was a
record-breaking month for discount brokers. Waterhouse Investor Services is
a deep-discount brokerage firm. When volume goes up, this fixed-cost
operation enjoys very profitable incremental trades. As of August, it was
trading at less than 10 times earnings and was a very attractively priced
stock. The Quick & Reilly Group is another discount broker and large
holding in the fund. It has been experiencing tremendous volume and should
surpass earnings expectations in the next couple of quarters. As of August,
Quick & Reilly also was trading at an attractive eight times earnings.
Q. OF COURSE, YOU STILL HAVE SOME OF THE LARGER, WELL-KNOWN NAMES IN THE
FUND . . .
A. Yes. Morgan Stanley, Merrill Lynch and AG Edwards are still very
attractive stocks with good prospects. However, the SEC sets limits on the
percentage of outstanding equity the fund may hold of any individual
securities firm, and I'm at the maximum on Morgan Stanley and AG Edwards.
You'll notice that the fund holds a small number of stocks and that there's
usually not a big difference in percentage weighting between the largest
holding and the tenth largest holding.
Q. HAVE THERE BEEN ANY DISAPPOINTMENTS DURING THE PAST SIX MONTHS?
A. The investing environment has been very positive and the fund hasn't
suffered many major disappointments. I reduced the fund's holdings in
Charles Schwab and eliminated the fund's holdings in stocks such as Midland
Walwyn and American Express, but that was profit taking, not loss cutting.
Q. WHAT'S AHEAD FOR THE FUND?
A. As long as interest rates are stable to down, I think brokerage and
investment management stocks have the potential to outperform the market.
Brokerage stocks aren't exactly cheap, but they aren't overly expensive
either. My plans are to fine tune the fund and monitor the holdings to make
sure they produce the way I think they should.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FSLBX
SIZE: as of August 31, 1995, more than
$31 million
MANAGER: Jeff Feinberg, since January 1995;
manager, Fidelity Select Retailing, February
1994-February 1995; equity analyst, footwear
and specialty retail industries, 1992-1994;
joined Fidelity in 1992
(checkmark)
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.1%
SHARES VALUE (NOTE 1)
BANKS - 3.4%
NATIONAL COMMERCIAL BANKS - 3.4%
Bank of New York Co., Inc. 25,000 $ 1,087,500
CREDIT & OTHER FINANCE - 5.9%
FINANCIAL SERVICES - 4.6%
Perpetual PLC 55,000 1,449,063
MANAGEMENT & INVESTMENT OFFICES - 1.3%
Trimark Financial Corp. 18,900 418,375
TOTAL CREDIT & OTHER FINANCE 1,867,438
SECURITIES INDUSTRY - 88.8%
INVESTMENT ADVICE - 5.3%
CI Fund Management, Inc. 85,400 762,528
CI Fund Management, Inc. (a)(b) 10,000 89,289
Mutual Fund Co. Ltd. (For.) (a) 34,900 847,412
1,699,229
INVESTMENT MANAGERS - 7.8%
Eaton Vance Corp. 14,000 535,500
Franklin Resources, Inc. 1,100 60,500
Peregrine Investments Holdings Ltd. 843,000 1,203,475
Price (T. Rowe) Associates, Inc. 14,000 665,000
2,464,475
SECURITY & COMMODITY BROKERS - 68.4%
Advest Group, Inc. (The) (a) 100,000 800,000
BHC Financial, Inc. 65,000 1,129,375
Bear Stearns Companies, Inc. 26,460 545,738
Edwards (A.G.), Inc. 69,000 1,681,875
First Marathon, Inc. Class A (non-vtg.) 100,200 987,872
Interstate/Johnson Lane, Inc. 38,900 403,588
Jefferies Group, Inc. 49,100 1,939,450
Legg Mason, Inc. 69,700 2,056,150
McDonald & Co. Investments, Inc. 34,200 577,125
Merrill Lynch & Co., Inc. 17,700 1,019,963
Morgan Keegan, Inc. 134,950 1,551,925
Morgan Stanley Group, Inc. 20,800 1,807,000
Piper Jaffray, Inc. 53,600 777,200
Quick & Reilly Group, Inc. (The) 53,050 1,982,744
Raymond James Financial, Inc. 67,900 1,493,800
Schwab (Charles) Corp. 8,100 376,650
Southwest Securities Group, Inc. 40,000 365,000
Stifel Financial Corp. (a) 29,600 192,400
Waterhouse Investor Services, Inc. 73,000 2,089,625
21,777,480
SECURITY BROKERS & DEALERS - 7.3%
Finanza & Futuro Holdings SPA 2,600 10,346
Inter-Regional Financial Group, Inc. 58,500 1,872,000
Lehman Brothers Holdings, Inc. 1,100 26,125
Sherwood Group, Inc. (a) 48,300 410,550
2,319,021
TOTAL SECURITIES INDUSTRY 28,260,205
TOTAL COMMON STOCKS
(Cost $27,457,216) 31,215,143
REPURCHASE AGREEMENTS - 1.9%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 610,099 $ 610,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $28,067,216) $ 31,825,143
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $89,289 or 0.3% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $32,986,260 and $33,511,944, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $11,593 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $3,294,000 and $1,941,875,
respectively. The weighted average interest rate paid was 6.3% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.8%
Canada 7.1
United Kingdom 4.6
Hong Kong 3.8
Thailand 2.7
Others (individually less than 1%) 0.0
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $28,081,835. Net unrealized appreciation aggregated
$3,743,308, of which $4,090,398 related to appreciated investment
securities and $347,090 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$1,914,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $610,000) (cost $28,067,216) - See $ 31,825,143
accompanying schedule
Cash 160,803
Receivable for investments sold 1,071,045
Receivable for fund shares sold 125,151
Dividends receivable 57,253
Redemption fees receivable 179
Other receivables 11,242
Prepaid expenses 7,219
TOTAL ASSETS 33,258,035
LIABILITIES
Payable for investments purchased $ 568,688
Payable for fund shares redeemed 1,021,205
Accrued management fee 19,116
Other payables and accrued expenses 43,856
TOTAL LIABILITIES 1,652,865
NET ASSETS $ 31,605,170
Net Assets consist of:
Paid in capital $ 26,232,243
Undistributed net investment income 105,427
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 1,509,579
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 3,757,921
NET ASSETS, for 1,743,328 $ 31,605,170
shares outstanding
NET ASSET VALUE and redemption price per share ($31,605,170 (divided by) 1,743,328 shares) $18.13
Maximum offering price per share (100/97.00 of $18.13) $18.69
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 310,540
Dividends
Interest 87,144
TOTAL INCOME 397,684
EXPENSES
Management fee $ 109,119
Transfer agent 158,182
Fees
Redemption fees (25,066
)
Accounting fees and expenses 22,772
Non-interested trustees' compensation 171
Custodian fees and expenses 14,494
Registration fees 7,219
Audit 8,604
Legal 93
Interest 2,146
Miscellaneous 276
Total expenses before reductions 298,010
Expense reductions (5,753 292,257
)
NET INVESTMENT INCOME 105,427
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 3,463,378
Foreign currency transactions (828 3,462,550
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 3,130,397
Assets and liabilities in (13 3,130,384
foreign currencies )
NET GAIN (LOSS) 6,592,934
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,698,361
OTHER INFORMATION $106,555
Sales Charges Paid to FDC
Deferred sales charges withheld $3,682
by FDC
Exchange fees withheld by FSC $16,740
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 105,427 $ (59,459
Net investment income (loss) )
Net realized gain (loss) 3,462,550 144,552
Change in net unrealized appreciation (depreciation) 3,130,384 (6,407,629
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 6,698,361 (6,322,536
)
Distributions to shareholders (152,294 -
From net realized gain )
In excess of net realized gain (687,018 -
)
TOTAL DISTRIBUTIONS (839,312 -
)
Share transactions 42,589,290 41,178,684
Net proceeds from sales of shares
Reinvestment of distributions 820,067 -
Cost of shares redeemed (45,052,331 (67,399,063
) )
Paid in capital portion of redemption fees 43,243 78,929
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (1,599,731 (26,141,450
) )
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,259,318 (32,463,986
)
NET ASSETS
Beginning of period 27,345,852 59,809,838
End of period (including undistributed net investment income of $105,427 and $0, respectively) $ 31,605,170 $ 27,345,852
OTHER INFORMATION
Shares
Sold 2,548,030 2,575,103
Issued in reinvestment of distributions 52,908 -
Redeemed (2,620,357 (4,181,828
) )
Net increase (decrease) (19,419) (1,606,725)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.51 $ 17.75 $ 14.22 $ 11.48 $ 9.28 $ 7.97
Income from Investment Operations
Net investment income (loss) .05 (.03) (.02) - .02 .08
Net realized and unrealized gain (loss) 3.04 (2.25) 4.95 2.65 1.96 1.15
Total from investment operations 3.09 (2.28) 4.93 2.65 1.98 1.23
Less Distributions - - (.01) - (.01) (.09)
From net investment income
From net realized gain (.09) - (1.47) - - -
In excess of net realized gain (.40) - - - - -
Total distributions (.49) - (1.48) - (.01) (.09)
Redemption fees added to paid in capital .02 .04 .08 .09 .23 .17
Net asset value, end of period $ 18.13 $ 15.51 $ 17.75 $ 14.22 $ 11.48 $ 9.28
TOTAL RETURN B, C 20.59% (12.62)% 35.87% 23.87% 23.84% 17.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 31,605 $ 27,346 $ 59,810 $ 24,687 $ 17,915 $ 11,285
Ratio of expenses to average net assets 1.62% A 2.54% 1.77% 2.21% A 2.17% 2.50%
Ratio of expenses to average net assets before 1.65% A 2.90% 1.79% 2.21% A 2.17% 2.91%
expense reductions
Ratio of net investment income (loss) to average net .59% A (.20)% (.14)% .02% A .16% .94%
assets
Portfolio turnover rate 206% A 139% 295% 111% A 254% 62%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
FINANCIAL SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
FINANCIAL SERVICES 19.51% 15.86% 236.92% 280.49%
FINANCIAL SERVICES
(INCL. 3% SALES CHARGE) 15.93% 12.38% 226.81% 269.07%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
FINANCIAL SERVICES 15.86% 27.50% 14.30%
FINANCIAL SERVICES
(INCL. 3% SALES CHARGE) 12.38% 26.72% 13.95%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select FinanciStandard & Poo
08/31/85 9700.00 10000.00
09/30/85 9282.33 9687.00
10/31/85 9891.27 10134.54
11/30/85 10476.78 10829.77
12/31/85 10874.93 11353.93
01/31/86 11518.99 11417.51
02/28/86 12713.44 12271.54
03/31/86 13537.06 12956.29
04/30/86 13412.15 12809.89
05/31/86 13962.54 13491.37
06/30/86 14372.39 13719.38
07/31/86 13344.12 12952.46
08/31/86 14188.28 13913.54
09/30/86 12670.37 12762.89
10/31/86 12951.76 13499.31
11/30/86 12824.94 13827.34
12/31/86 12507.88 13474.74
01/31/87 13387.71 15289.79
02/28/87 14275.47 15893.74
03/31/87 13732.51 16353.07
04/30/87 12868.53 16207.52
05/31/87 12777.38 16348.53
06/30/87 13249.00 17174.13
07/31/87 13403.56 18044.86
08/31/87 14180.35 18717.93
09/30/87 13677.03 18308.01
10/31/87 10581.76 14364.46
11/30/87 9935.76 13180.83
12/31/87 10439.18 14183.89
01/31/88 11225.20 14781.03
02/29/88 11599.09 15469.83
03/31/88 11399.40 14991.81
04/30/88 11199.71 15158.22
05/31/88 11310.17 15290.10
06/30/88 12006.97 15991.91
07/31/88 11926.24 15931.15
08/31/88 11892.25 15389.49
09/30/88 12385.11 16045.08
10/31/88 12419.10 16491.13
11/30/88 11905.00 16255.31
12/31/88 11693.38 16539.78
01/31/89 12292.70 17750.49
02/28/89 12266.46 17308.50
03/31/89 13163.25 17711.79
04/30/89 13403.86 18631.03
05/31/89 14243.79 19385.59
06/30/89 14144.54 19275.09
07/31/89 15276.63 21015.63
08/31/89 15708.32 21427.54
09/30/89 16034.29 21339.68
10/31/89 14505.75 20844.60
11/30/89 14307.52 21269.83
12/31/89 13955.16 21780.31
01/31/90 12777.04 20318.85
02/28/90 13239.40 20580.96
03/31/90 13034.89 21126.36
04/30/90 12572.54 20598.20
05/31/90 13679.53 22606.52
06/30/90 13297.19 22452.80
07/31/90 12443.61 22380.95
08/31/90 10954.29 20357.71
09/30/90 9322.71 19366.29
10/31/90 8509.14 19283.02
11/30/90 9709.48 20528.70
12/31/90 10559.89 21101.45
01/31/91 11519.46 22021.47
02/28/91 12842.86 23596.01
03/31/91 13456.81 24167.03
04/30/91 13893.39 24225.03
05/31/91 14957.57 25271.56
06/30/91 13743.32 24114.12
07/31/91 14830.23 25237.84
08/31/91 15812.54 25835.97
09/30/91 15717.04 25404.51
10/31/91 16062.67 25744.93
11/30/91 14871.16 24707.41
12/31/91 17067.78 27533.94
01/31/92 17917.95 27021.81
02/29/92 19204.70 27373.09
03/31/92 18772.72 26839.32
04/30/92 19494.22 27628.39
05/31/92 20330.60 27763.77
06/30/92 20798.41 27350.09
07/31/92 21393.18 28468.71
08/31/92 20166.16 27885.10
09/30/92 20793.72 28214.15
10/31/92 21617.98 28312.90
11/30/92 23243.07 29278.37
12/31/92 24376.22 29638.49
01/31/93 25913.77 29887.45
02/28/93 26602.68 30293.92
03/31/93 27995.46 30933.12
04/30/93 26655.24 30184.54
05/31/93 26665.34 30993.49
06/30/93 27660.81 31083.37
07/31/93 28403.62 30959.04
08/31/93 29287.92 32132.38
09/30/93 29965.03 31884.96
10/31/93 29161.59 32544.98
11/30/93 27862.93 32235.80
12/31/93 28655.31 32625.86
01/31/94 30600.58 33735.14
02/28/94 29489.82 32820.92
03/31/94 28143.09 31389.92
04/30/94 29211.80 31791.71
05/31/94 30458.68 32313.10
06/30/94 29739.55 31521.43
07/31/94 30777.65 32555.33
08/31/94 31856.34 33890.10
09/30/94 29455.37 33059.79
10/31/94 29298.79 33803.64
11/30/94 27442.97 32572.51
12/31/94 27610.11 33055.56
01/31/95 29038.00 33912.69
02/28/95 30882.09 35234.27
03/31/95 31426.35 36274.03
04/30/95 32412.43 37342.30
05/31/95 34211.70 38834.87
06/30/95 34371.77 39737.01
07/31/95 35524.33 41054.68
08/31/95 36907.39 41157.73
Let's say you invested $10,000 in Fidelity Select Financial Services
Portfolio on August 31, 1985 and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $36,907 - a 269.07% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
American Express Co. 5.6
Bank of New York Co., Inc. 5.1
Household International, Inc. 5.1
Beneficial Corp. 5.0
Allstate Corp. 4.8
First Bank System, Inc. 4.7
Shawmut National Corp. 4.7
Federal Home Loan Mortgage Corporation 4.7
Banc One Corp. 4.4
Federal National Mortgage Association 4.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
National Commercial Banks 37.4%
Personal Credit Institutions 10.1%
Federal & Federally
Sponsored Credit Agencies 9.0%
Financial Services 8.7%
Property-Casualty &
Reinsurance 6.3%
All Others 28.5%*
Row: 1, Col: 1, Value: 28.5
Row: 1, Col: 2, Value: 6.3
Row: 1, Col: 3, Value: 8.699999999999999
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 10.1
Row: 1, Col: 6, Value: 37.4
* INCLUDES SHORT-TERM INVESTMENTS
FINANCIAL SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Louis Salemy,
Portfolio Manager of Fidelity Select Financial Services Portfolio
Q. HOW HAS THE FUND PERFORMED, LOUIS?
A. The fund has done fairly well over the recent past. For the six months
ended August 31, 1995, it outpaced the market, gaining 19.51% compared with
a 16.81% return for the S&P 500. In the 12- month comparison, the fund
trailed the index, returning 15.86% compared with the S&P 500's 21.45%
gain.
Q. WHAT FACTORS CONTRIBUTED TO FUND PERFORMANCE?
A. The stabilization and slight lowering of interest rates probably played
the biggest role in the fund's recent performance. Short-term rates were
only down about 25 basis points during the period, but longer-term rates
improved to a greater degree. Investors seemed to believe that improvements
in the rate environment also would improve the fundamentals of many of the
companies in the sector, and in many cases, this proved to be accurate.
Lower rates probably had the greatest positive impact on the brokerage
segment; they also helped spur new mortgage refinancing activity, which
benefited companies that operate in the secondary mortgage market, such as
Fannie Mae and Freddie Mac. At the same time, I should point out that a lot
of what was gained in the period was simply a recapture of depressed
valuations caused by the run-up in short-term interest rates during much of
1994.
Q. WERE THERE OTHER FACTORS THAT HELPED THE FUND?
A. Many companies in the sector have continued to reshape and reposition
their businesses, and this kind of internal dynamics at certain individual
companies had a positive impact on the fund. American Express, for example,
has been focusing on cutting costs and growing its core businesses, instead
of diversifying. Its cardholder base is growing again, its personal
investment services business (American Express Financial Advisors) has been
doing well in a higher stock market, the fundamentals of the company have
been improving, and all of this has been reflected in a higher stock price.
The fund also has benefited from acquisition activity, particularly in the
banking sector, where names like Midlantic Bank - which the fund no longer
owns - and Shawmut Bank have done quite well.
Q. WHAT OTHER NAMES DID YOU LIKE?
A. Among the bank group, there were three others that did especially well
during the period. Bank of New York continues to be a strong contributor.
As an asset-sensitive institution - one whose assets, or loans, tend to
re-price more quickly than its liabilities, or deposits - the company
showed good earnings during last year's rising rate environment, which
eventually was reflected in a higher stock price. Bank of Boston is a
similar story, although I recently liquidated the position. The company has
had a phenomenal run, based on consistently strong earnings and takeover
speculation. I also liked Banc One, which is a financial turnaround story.
Q. HAVE YOU MADE ANY MAJOR CHANGES IN INVESTMENT STRATEGY?
A. Nothing major. I've sold a number of the bank positions that have
reached my price targets. Over time, I've been trying to diversify the
fund. So what I'm seeking to own now are basically good, solid core
financial institutions that don't appear to be subject to any takeover
speculation and that have consistently generated higher returns than their
peers. I generally like the portfolio the way it's currently structured and
don't plan to make any changes in strategy right now.
Q. WHAT IS YOUR OUTLOOK FOR THE SECTOR AND FOR ITS FUTURE PERFORMANCE?
A. I'm somewhat concerned about the sector because I think valuations for a
lot of the stocks are at their upper end. But as long as the rate
environment remains positive, I think the fund should continue to do fairly
well.
FUND FACTS
START DATE: December 10, 1981
TRADING SYMBOL: FIDSX
SIZE: as of August 31, 1995, more than
$171 million
MANAGER: Louis Salemy, since December
1994; manager, Fidelity Select Regional
Banks Portfolio, since December 1994;
manager, Fidelity Select Medical Delivery
Portfolio, 1993-1994; manager, Fidelity Select
Industrial Materials Portfolio, 1992-1994;
joined Fidelity in 1992
(checkmark)
FINANCIAL SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 83.7%
SHARES VALUE (NOTE 1)
BANKS - 37.4%
NATIONAL COMMERCIAL BANKS - 37.4%
Banc One Corp. 219,400 $ 7,377,322
Bank of New York Co., Inc. 195,334 8,497,029
BankAmerica Corp. 100,000 5,650,000
Comerica, Inc. 84,445 3,008,353
First Bank System, Inc. 172,400 7,865,750
First Chicago Corp. 85,800 5,437,575
First Union Corp. 1 50
Fleet Financial Group, Inc. 119,596 4,425,052
Mercantile Bancorporation, Inc. 22,050 997,763
Morgan (J.P.) & Co., Inc. 96,300 7,017,863
NBD Bancorp, Inc. 24,100 861,575
Shawmut National Corp. 240,000 7,770,000
Zions Bancorporation 58,000 3,204,500
62,112,832
CREDIT & OTHER FINANCE - 18.8%
FINANCIAL SERVICES - 8.7%
American Express Co. 230,000 9,286,250
Equitable Companies, Inc. 200,000 5,150,000
14,436,250
PERSONAL CREDIT INSTITUTIONS - 10.1%
Beneficial Corp. 167,900 8,248,088
Household International, Inc. 150,500 8,446,813
16,694,901
TOTAL CREDIT & OTHER FINANCE 31,131,151
FEDERAL SPONSORED CREDIT - 9.0%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES - 9.0%
Federal Home Loan Mortgage
Corporation 120,700 7,754,975
Federal National Mortgage Association 75,600 7,210,350
14,965,325
INSURANCE - 13.3%
INSURANCE BROKERS & SERVICES - 3.4%
Alexander & Alexander Services, Inc. 250,000 5,781,250
LIFE INSURANCE - 3.6%
Providian Corp. 96,800 3,714,700
Torchmark Corp. 55,000 2,200,000
5,914,700
PROPERTY-CASUALTY& REINSURANCE - 6.3%
Allstate Corp. 236,700 8,018,213
Travelers, Inc. (The) 49,633 2,382,384
10,400,597
TOTAL INSURANCE 22,096,547
SAVINGS & LOANS - 2.1%
SAVINGS BANKS & SAVINGS & LOANS - 0.9%
Standard Federal Bancorporation, Inc. 39,300 1,532,700
SAVINGS BANKS, FEDERAL CHARTER - 1.2%
Ahmanson (H.F.) & Co. 82,900 1,968,875
TOTAL SAVINGS & LOANS 3,501,575
SECURITIES INDUSTRY - 1.8%
SECURITY & COMMODITY BROKERS - 1.8%
Morgan Stanley Group, Inc. 34,300 2,979,813
SHARES VALUE (NOTE 1)
SERVICES - 1.3%
CREDIT REPORTING AGENCIES - 1.3%
First Financial Management Corp. 25,000 $ 2,234,090
TOTAL COMMON STOCKS
(Cost $117,285,160) 139,021,333
REPURCHASE AGREEMENTS - 16.3%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 27,083,378 27,079,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $144,364,160) $ 166,100,333
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities, aggre-
gated $68,796,866 and $75,288,901, respectively (see Note 4 of Notes to
Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $40,395 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the period
for which the loan was outstanding amounted to $1,601,000. The weighted
average interest rate paid was 6.5% (see Note 6 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $144,613,332. Net unrealized appreciation aggregated
$21,487,001, of which $21,755,917 related to appreciated investment
securities and $268,916 related to depreciated investment securities.
FINANCIAL SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $27,079,000) (cost $144,364,160) - $ 166,100,333
See accompanying schedule
Cash 766
Receivable for fund shares sold 16,202,382
Dividends receivable 282,250
Redemption fees receivable 16,328
Other receivables 5,478
Prepaid expenses 12,205
TOTAL ASSETS 182,619,742
LIABILITIES
Payable for investments purchased $ 8,195,858
Payable for fund shares redeemed 2,690,069
Accrued management fee 72,512
Other payables and accrued expenses 128,179
TOTAL LIABILITIES 11,086,618
NET ASSETS $ 171,533,124
Net Assets consist of:
Paid in capital $ 141,943,940
Undistributed net investment income 1,311,150
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 6,541,861
Net unrealized appreciation (depreciation) on investments 21,736,173
NET ASSETS, for 2,975,687 shares outstanding $ 171,533,124
NET ASSET VALUE and redemption price per share ($171,533,124 (divided by) 2,975,687 shares) $57.64
Maximum offering price per share (100/97.00 of $57.64) $59.42
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,676,645
Dividends
Interest 663,336
TOTAL INCOME 2,339,981
EXPENSES
Management fee $ 433,183
Transfer agent 558,536
Fees
Redemption fees (58,745
)
Accounting fees and expenses 70,746
Non-interested trustees' compensation 555
Custodian fees and expenses 7,666
Registration fees 12,205
Audit 10,878
Legal 384
Interest 290
Miscellaneous 983
Total expenses before reductions 1,036,681
Expense reductions (7,722 1,028,959
)
NET INVESTMENT INCOME 1,311,022
REALIZED AND UNREALIZED GAIN (LOSS) 6,787,271
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities 15,527,232
NET GAIN (LOSS) 22,314,503
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 23,625,525
OTHER INFORMATION $375,839
Sales Charges Paid to FDC
Deferred sales charges withheld $8,153
by FDC
Exchange fees withheld by FSC $41,483
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 1,311,022 $ 1,646,581
Net investment income
Net realized gain (loss) 6,787,271 9,348,163
Change in net unrealized appreciation (depreciation) 15,527,232 (5,791,837
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 23,625,525 5,202,907
Distributions to shareholders - (1,391,905
From net investment income )
From net realized gain - (6,998,318
)
TOTAL DISTRIBUTIONS - (8,390,223
)
Share transactions 112,467,831 137,344,321
Net proceeds from sales of shares
Reinvestment of distributions - 8,148,541
Cost of shares redeemed (117,775,019 (105,579,333
) )
Paid in capital portion of redemption fees 125,885 167,317
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (5,181,303 40,080,846
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 18,444,222 36,893,530
NET ASSETS
Beginning of period 153,088,902 116,195,372
End of period (including undistributed net investment income of $1,311,150 and $304,699,
respectively) $ 171,533,124 $ 153,088,902
OTHER INFORMATION
Shares
Sold 2,094,573 2,833,201
Issued in reinvestment of distributions - 192,390
Redeemed (2,293,218 (2,118,831
) )
Net increase (decrease) (198,645) 906,760
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 48.23 $ 51.24 $ 53.29 $ 42.42 $ 30.55 $ 28.28
Income from Investment Operations
Net investment income .49 .76 .29 .33 .54 .58
Net realized and unrealized gain (loss) 8.87 .87 5.02 14.30 11.35 1.67
Total from investment operations 9.36 1.63 5.31 14.63 11.89 2.25
Less Distributions - (.79) E (.20) (.51) (.35) (.52)
From net investment income
From net realized gain - (3.93) E (7.32) (3.38) - -
Total distributions - (4.72) (7.52) (3.89) (.35) (.52)
Redemption fees added to paid in capital .05 .08 .16 .13 .33 .54
Net asset value, end of period $ 57.64 $ 48.23 $ 51.24 $ 53.29 $ 42.42 $ 30.55
TOTAL RETURN B, C 19.51% 4.72% 10.85% 36.46% 40.31% 10.51%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 171,533 $ 153,089 $ 116,195 $ 214,612 $ 91,700 $ 35,962
Ratio of expenses to average net assets 1.44% A 1.54% 1.63% 1.54% A 1.85% 2.49%
Ratio of expenses to average net assets before 1.45% A 1.56% 1.64% 1.54% A 1.85% 2.49%
expense reductions
Ratio of net investment income to average net assets 1.83% A 1.52% .53% .86% A 1.49% 2.22%
Portfolio turnover rate 113% A 107% 93% 100% A 164% 237%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL
STATEMENTS).
</TABLE>
HOME FINANCE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
HOME FINANCE 27.76% 23.75% 399.04% 534.66%
HOME FINANCE
(INCL. 3% SALES CHARGE) 23.93% 20.03% 384.07% 515.62%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
HOME FINANCE 23.75% 37.92% 20.95%
HOME FINANCE
(INCL. 3% SALES CHARGE) 20.03% 37.08% 20.57%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select Home FinanStandard & Poor's
12/16/85 9700.00 10000.00
12/31/85 9797.00 10080.42
01/31/86 11378.10 10136.87
02/28/86 12794.30 10895.11
03/31/86 13065.90 11503.06
04/30/86 12920.40 11373.07
05/31/86 13065.90 11978.12
06/30/86 14132.90 12180.55
07/31/86 13259.90 11499.66
08/31/86 13405.40 12352.93
09/30/86 11804.90 11331.35
10/31/86 12241.40 11985.16
11/30/86 12464.50 12276.40
12/31/86 12493.60 11963.36
01/31/87 14423.90 13574.82
02/28/87 15781.90 14111.03
03/31/87 14841.00 14518.83
04/30/87 14006.80 14389.62
05/31/87 13521.80 14514.81
06/30/87 13774.00 15247.80
07/31/87 13725.50 16020.87
08/31/87 14967.10 16618.45
09/30/87 14006.80 16254.50
10/31/87 11281.10 12753.28
11/30/87 10359.60 11702.41
12/31/87 11500.81 12592.97
01/31/88 12887.84 13123.13
02/29/88 12526.63 13734.67
03/31/88 12179.88 13310.27
04/30/88 12382.15 13458.01
05/31/88 12367.70 13575.09
06/30/88 13147.91 14198.19
07/31/88 13379.08 14144.24
08/31/88 13046.77 13663.33
09/30/88 13711.39 14245.39
10/31/88 14101.49 14641.41
11/30/88 13393.53 14432.04
12/31/88 13627.99 14684.60
01/31/89 14770.98 15759.52
02/28/89 15093.36 15367.10
03/31/89 15166.63 15725.16
04/30/89 15943.28 16541.29
05/31/89 16632.01 17211.21
06/30/89 16966.78 17113.11
07/31/89 17557.96 18658.42
08/31/89 18636.86 19024.13
09/30/89 19331.49 18946.13
10/31/89 16922.44 18506.58
11/30/89 16375.61 18884.12
12/31/89 14898.98 19337.33
01/31/90 13663.83 18039.80
02/28/90 14173.33 18272.51
03/31/90 14204.21 18756.73
04/30/90 13864.55 18287.82
05/31/90 15176.89 20070.88
06/30/90 15022.50 19934.40
07/31/90 13725.59 19870.61
08/31/90 12336.05 18074.30
09/30/90 11270.73 17194.08
10/31/90 10421.57 17120.15
11/30/90 11548.64 18226.11
12/31/90 12651.76 18734.62
01/31/91 13861.93 19551.45
02/28/91 15747.91 20949.38
03/31/91 16470.87 21456.35
04/30/91 17036.66 21507.85
05/31/91 17743.90 22436.99
06/30/91 16753.76 21409.37
07/31/91 18545.44 22407.05
08/31/91 19252.68 22938.10
09/30/91 19095.52 22555.03
10/31/91 18765.47 22857.27
11/30/91 17901.07 21936.12
12/31/91 20825.52 24445.61
01/31/92 22877.84 23990.92
02/29/92 24373.33 24302.81
03/31/92 23959.69 23828.90
04/30/92 24468.79 24529.47
05/31/92 26887.03 24649.67
06/30/92 26920.71 24282.39
07/31/92 28244.42 25275.53
08/31/92 26713.39 24757.39
09/30/92 27143.99 25049.52
10/31/92 27654.33 25137.20
11/30/92 30493.13 25994.38
12/31/92 32873.65 26314.11
01/31/93 35232.15 26535.14
02/28/93 35829.85 26896.02
03/31/93 37106.03 27463.53
04/30/93 35096.20 26798.91
05/31/93 34495.57 27517.12
06/30/93 35355.93 27596.92
07/31/93 37628.58 27486.53
08/31/93 39609.03 28528.27
09/30/93 42141.41 28308.61
10/31/93 42466.07 28894.59
11/30/93 40566.79 28620.10
12/31/93 41846.50 28966.40
01/31/94 43678.57 29951.26
02/28/94 42856.71 29139.58
03/31/94 42051.97 27869.09
04/30/94 43677.83 28225.82
05/31/94 46371.77 28688.72
06/30/94 47144.04 27985.85
07/31/94 48185.70 28903.78
08/31/94 49748.18 30088.84
09/30/94 48042.02 29351.66
10/31/94 45168.48 30012.07
11/30/94 42833.73 28919.03
12/31/94 42968.45 29347.90
01/31/95 44862.04 30108.89
02/28/95 48185.90 31282.24
03/31/95 48105.32 32205.38
04/30/95 50623.40 33153.82
05/31/95 53624.95 34478.98
06/30/95 54189.00 35279.93
07/31/95 56364.61 36449.81
08/31/95 61561.92 36541.30
Let's say you invested $10,000 in Fidelity Select Home Finance Portfolio on
December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $61,562 - a 515.62%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Standard Federal Bancorporation, Inc. 6.1
Astoria Financial Corp. 5.3
FirstFed Michigan Corp. 5.3
North Side Savings Bank 4.1
Greenpoint Financial Corp. 3.9
Federal National Mortgage Association 3.8
Collective Bancorp, Inc. 3.2
Capstead Mortgage Corp. 2.9
Long Island Bancorp, Inc. 2.5
Washington Mutual, Inc. 2.5
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 25.9
Row: 1, Col: 2, Value: 4.1
Row: 1, Col: 3, Value: 5.7
Row: 1, Col: 4, Value: 6.3
Row: 1, Col: 5, Value: 21.0
Row: 1, Col: 6, Value: 37.0
Savings Banks &
Savings & Loans 37.0%
Savings Banks,
Federal Charter 21.0%
National Commercial
Banks 6.3%
Federal & Federally
Sponsored Credit
Agencies 5.7%
Bank Holding
Company Offices 4.1%
All Others 25.9%*
* INCLUDES SHORT-TERM INVESTMENTS
HOME FINANCE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
David Ellison,
Portfolio Manager
of Fidelity Select
Home Finance Portfolio
Q. HOW HAS THE FUND BEEN PERFORMING, DAVE?
A. Quite well, actually, particularly over the last six months. For the
six-month period ended August 31, 1995, the fund returned 27.76%, well
ahead of the S&P 500's 16.81% return. For the 12 months ended August 31, it
was up 23.75%, compared with a 21.45% gain for the S&P 500.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE MARKET?
A. There were four major factors. First, the leveling off of interest rates
from their large increases during much of 1994 had a net positive effect,
particularly insofar as the market was discounting for higher rates that
did not materialize. Second, there was above-average takeover activity that
got investors excited and drove some stock prices higher. Third, there was
continuing activity in stock-repurchase programs, which I see as a
manifestation of a depository institutions industry that is in good health.
Fourth, and more recently, there was a significant court ruling that may
increase the book value and strengthen the balance sheets of certain
institutions in the industry, which had the effect of giving stock prices
for the entire group a nice lift.
Q. THE INDUSTRY HAS BEEN LOOKING PRETTY GOOD THEN . . .
A. Yes, from a fundamental point of view, I'd say things looked pretty
healthy. Capital levels have been extraordinarily high. Credit quality and
demand have been very good. And from an earnings point of view, in terms of
the quality of balance sheets and income statements, I think the industry
was as strong as I've seen it in the last 10-12 years.
Q. WERE THERE ANY NEGATIVE FACTORS AFFECTING THE INDUSTRY DURING THE
PERIOD?
A. The only real negative for the group as a whole has been that lending
spreads - the difference between rates institutions charge for loans and
what they pay for deposits - have been under pressure for the past 18
months or so. Even though interest rates stabilized in the first half of
1995, spreads have not yet improved in any bona fide way. Many institutions
have been able to make up for this through increasing loan growth and by
various cost-cutting programs, but the yield curve still has been somewhat
flat.
Q. DO YOU EXPECT TO SEE BETTER SPREADS GOING FORWARD?
A. I think there could be some improvement in the next six months. The cost
of funds has stabilized, and this should eventually have a positive effect
on spreads. But the real question is how much of an impact will widening
spreads have on earnings in the near term and how will that affect stock
prices.
Q. WHAT IS YOUR OUTLOOK FOR THE INDUSTRY?
A. There has been a large run-up in industry stock prices recently, and I'm
not sure how long it will last. Periods of appreciation are always followed
by periods of correction, so I'd have to say I'm cautious in my outlook.
I'm not sure what interest rates will do going forward. I believe that
credit quality in the industry is currently pretty solid, but some
observers are becoming concerned about growing levels of consumer loans
held by the industry.
Q. HOW WILL THIS AFFECT YOUR INVESTMENT STRATEGY LOOKING AHEAD?
A. It really should not affect my game plan. I manage the portfolio in a
very disciplined way. I don't make bets on yield curves and don't buy
companies based on "good stories." I judge stocks mainly on their
valuations. I buy on my analysis of a company's growth potential and its
value relative to earnings or price-to-book ratio. This strategy allowed me
to take advantage of a number of good values among smaller thrift
institutions that converted to public ownership over the past year or so. I
bought about 20 newly converted thrifts over the last 12 months, and even
though they were all relatively small positions, they added a fair amount
of horsepower to fund performance. I believe there will be a continuing
trend toward thrift conversions, which means there are likely to be a
number of new names to consider buying if their fundamentals look good.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSVLX
SIZE: as of August 31, 1995, more than
$353 million
MANAGER: David Ellison, since December
1985; manager, Fidelity Select Financial
Services Portfolio, 1985-1987; Fidelity Select
Brokerage and Investment Management
Portfolio, 1987-1990; joined Fidelity in 1985.
(checkmark)
HOME FINANCE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 86.7%
SHARES VALUE (NOTE 1)
BANKS - 7.9%
COMMERCIAL BANKS - 0.7%
MLF Bancorp, Inc. 76,900 $ 1,826,367
Norwalk Savings Society (a) 15,000 283,125
2,109,492
NATIONAL COMMERCIAL BANKS - 6.3%
Bank Atlantic Bancorp, Inc. (a) 2,750 51,563
Bank of New York Co., Inc. 46,100 2,005,350
Chase Manhattan Corp. 30,000 1,725,000
Citicorp 6,490 430,774
First Interstate Bancorp 52,900 5,051,950
NationsBank Corp. 50,000 3,068,750
PNC Financial Corp. 95,000 2,493,750
Peoples Heritage Financial Group, Inc. 196,800 4,009,800
Union Bank of San Francisco 27,500 1,409,375
20,246,312
STATE BANKS FEDERAL RESERVE - 0.9%
Chemical Banking Corp. 40,000 2,330,000
TR Financial Corp. 30,000 678,750
3,008,750
TOTAL BANKS 25,364,554
CONSTRUCTION - 0.3%
OPERATIVE BUILDERS - 0.3%
Kaufman & Broad Home Corp. 65,000 869,375
CREDIT & OTHER FINANCE - 5.3%
BANK HOLDING COMPANY OFFICES - 4.1%
First Keystone Financial, Inc. (a) 12,800 211,200
Greenpoint Financial Corp. 445,690 12,367,898
IBS Financial Corp. 33,400 501,000
13,080,098
FINANCIAL SERVICES - 0.0%
Fidelity Federal Bank FSB Class A (a) 40,000 60,000
LOAN BROKERS - 0.3%
Aames Financial Corp. 40,000 1,090,000
MORTGAGE BANKERS - 0.9%
Countrywide Credit Industries, Inc. 98,900 2,175,800
First Financial Caribbean Corp. 7,743 113,241
Money Store, Inc. 10,000 656,250
2,945,291
TOTAL CREDIT & OTHER FINANCE 17,175,389
FEDERAL SPONSORED CREDIT - 5.7%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 5.7%
Federal Home Loan Mortgage
Corporation 93,700 6,020,225
Federal National Mortgage Association 127,100 12,122,163
18,142,388
INSURANCE - 1.9%
INSURANCE BROKERS & SERVICES - 0.9%
Fidelity National Financial, Inc. 154,000 2,002,000
Stewart Information Services Corp. 45,000 843,750
2,845,750
PROPERTY-CASUALTY & REINSURANCE - 1.0%
First American Financial Corp. 102,900 2,469,600
Old Republic International Corp. 24,200 668,525
3,138,125
TOTAL INSURANCE 5,983,875
SHARES VALUE (NOTE 1)
REAL ESTATE INVESTMENT TRUSTS - 4.0%
Capstead Mortgage Corp. 302,497 $ 9,377,407
Prime Multifamily, Inc. 37,800 590,625
Thornburg Mortgage Asset Corp. 185,000 2,751,875
12,719,907
SAVINGS & LOANS - 60.6%
SAVINGS BANKS & SAVINGS & LOANS - 37.0%
Andover Bancorp, Inc. 6,900 146,625
Astoria Financial Corp. 395,400 17,002,200
Bankers Corp. 20,000 355,000
Cameron Financial Corp. (a)(b) 207,900 3,014,550
Charter One Financial Corp. 113,500 3,419,188
Coast Savings Financial, Inc. (a) 5,000 139,375
Collective Bancorp, Inc. 410,200 10,255,000
Commercial Federal Corp. (a) 140,000 4,935,000
Co-Operative Bank of Concord 99,600 1,718,100
First Federal Savings & Loan Association 44,700 888,413
First Financial Corp. of Wisconsin 126,300 2,494,425
FirstFed Michigan Corp. 476,450 16,854,419
FirstFed Financial Corp. (a) 230,600 3,804,900
Glendale Federal Bank FSB (a) 133,900 2,108,925
Golden West Financial Corp. 134,200 6,408,050
Great Western Financial Corp. 280,516 6,557,062
Loyola Capital Corp. 15,000 525,000
MidConn Bank 31,900 470,525
Monterey Bay Bancorp, Inc. (a)(b) 225,000 2,840,625
North Side Savings Bank (b) 452,292 13,116,468
Standard Federal Bancorporation, Inc. 501,400 19,554,600
Wells Financial Corp. (a)(b) 200,000 2,050,000
118,658,450
SAVINGS BANKS, NO FEDERAL CHARTER - 2.9%
Avondale Financial Corp. (a)(b) 220,400 3,307,875
Farmers & Mechanics Bank (a) 52,500 892,500
First Republic Bancorp, Inc. (a) 14,200 195,250
Lakeview Financial Corp. 50,500 883,750
Northwest Savings Bank 55,000 1,182,500
Queens County Bancorp, Inc. 30,000 1,095,000
Springfield Institution for Savings (a) 101,800 1,590,625
Sterling Financial Corp. (a) 15,700 200,175
9,347,675
SAVINGS BANKS, FEDERAL CHARTER - 20.7%
Ahmanson (H.F.) & Co. 168,953 4,012,634
Brooklyn Bancorp, Inc. (a) 112,500 4,204,688
Carver Federal Savings Bank (a)(b) 155,500 1,263,438
CenFed Financial Corp. (b) 249,250 5,795,063
Coastal Bancorp, Inc. 10,000 168,750
D & N Financial Corp. (a) 8,500 106,250
Dime Bancorp, Inc. (a) 246,236 2,985,612
HF Bancorp, Inc. (a) 40,400 388,850
HMN Financial, Inc. (a) 120,000 1,770,000
Haven Bancorp, Inc. (a)(b) 202,500 4,682,813
Long Island Bancorp, Inc. 319,980 8,119,493
Main Street Community Bancorp 95,000 1,615,000
Mississippi View Holding Co. (a)(b) 75,000 731,250
Pennfed Financial Services, Inc. (a) 94,900 1,387,913
Primary Bank (a) 84,200 1,199,850
Quaker City Bancorp (a) 199,900 2,723,638
RedFed Bancorp, Inc. (a) 109,400 1,011,950
Reliance BanCorp, Inc. 188,200 2,658,325
Roosevelt Financial Group, Inc. 20,000 362,500
SGV Bancorp, Inc. 75,000 703,125
Standard Financial, Inc. (a) 263,700 3,823,650
Teche Holding Co. 182,000 2,434,250
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SAVINGS & LOANS - CONTINUED
SAVINGS BANKS, FEDERAL CHARTER - CONTINUED
Washington Federal, Inc. 262,900 $ 6,112,425
Washington Mutual, Inc. 312,300 8,080,763
66,342,230
TOTAL SAVINGS & LOANS 194,348,355
SECURITIES INDUSTRY - 0.6%
INVESTMENT MANAGERS - 0.6%
Duff & Phelps Credit Rating Co. 131,100 1,900,950
SERVICES - 0.4%
LEGAL SERVICES - 0.4%
Lawyers Title Corp. 94,500 1,393,875
TOTAL COMMON STOCKS
(Cost $219,267,512) 277,898,668
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
SAVINGS & LOANS - 0.3%
SAVINGS BANKS, FEDERAL CHARTER - 0.3%
First Nationwide Bank 11 1/2%
(cost $1,076,250) 10,000 1,070,000
REPURCHASE AGREEMENTS - 13.0%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 41,614,727 41,608,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $261,951,762) $ 320,576,668
LEGEND
1. Non-income producing
2. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Avondale Financial Corp. $ - $ - $ - $ 3,307,875
Cameron Financial Corp. 606,239 - - 3,014,550
Carver Federal Savings Bank 225,625 - - 1,263,438
CenFed Financial Corp. - 933,650 51,165 5,795,063
Mississippi View Holding Co. 191,875 - - 731,250
Monterey Bay Bancorp, Inc. 288,750 - - 2,840,625
Haven Bancorp, Inc. - - - 4,682,813
North Side Savings Bank 410,413 - 243,468 13,116,468
Wells Financial Corp. 853,438 - - 2,050,000
Totals $ 2,576,340 $ 933,650 $ 294,633 $ 36,802,082
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $181,578,389 and $111,045,254, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $94,013 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $7,920,000 and $3,381,417,
respectively. The weighted average interest rate paid was 6.3% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $262,029,769. Net unrealized appreciation aggregated
$58,546,899, of which $59,239,149 related to appreciated investment
securities and $692,250 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending February 28, 1996
$1,328,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
HOME FINANCE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $41,608,000) (cost $261,951,762) - $ 320,576,668
See accompanying schedule
Cash 522
Receivable for investments sold 19,671
Receivable for fund shares sold 42,313,064
Dividends receivable 428,579
Redemption fees receivable 955
Other receivables 3,475
Prepaid expenses 22,195
TOTAL ASSETS 363,365,129
LIABILITIES
Payable for investments purchased $ 8,719,560
Payable for fund shares redeemed 1,308,401
Accrued management fee 133,748
Other payables and 193,387
accrued expenses
TOTAL LIABILITIES 10,355,096
NET ASSETS $ 353,010,033
Net Assets consist of:
Paid in capital $ 276,245,676
Undistributed net investment income 2,324,599
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 15,814,852
Net unrealized appreciation (depreciation) on investments 58,624,906
NET ASSETS, for 11,549,925 $ 353,010,033
shares outstanding
NET ASSET VALUE and redemption price per share ($353,010,033 (divided by) 11,549,925 shares) $30.56
Maximum offering price per share (100/97.00 of $30.56) $31.51
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,644,065
Dividends (including $294,633 received from affiliated issuers)
Interest 1,426,765
TOTAL INCOME 4,070,830
EXPENSES
Management fee $ 811,968
Transfer agent 927,851
Fees
Redemption fees (142,043
)
Accounting fees and expenses 132,449
Non-interested trustees' compensation 985
Custodian fees and expenses 14,460
Registration fees 22,195
Audit 12,012
Legal 563
Interest 7,076
Miscellaneous 2,179
Total expenses before reductions 1,789,695
Expense reductions (43,543 1,746,152
)
NET INVESTMENT INCOME 2,324,678
REALIZED AND UNREALIZED GAIN (LOSS) 17,092,253
Net realized gain (loss) on investment securities (including realized gain (loss) of $503,598 on sales of
investment in affiliated issuers)
Change in net unrealized appreciation (depreciation) on investment securities 43,455,810
NET GAIN (LOSS) 60,548,063
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 62,872,741
OTHER INFORMATION $1,135,474
Sales Charges Paid to FDC
Deferred sales charges withheld $671
by FDC
Exchange fees withheld by FSC $115,125
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 2,324,678 $ 1,608,322
Net investment income
Net realized gain (loss) 17,092,253 20,398,138
Change in net unrealized appreciation (depreciation) 43,455,810 (3,449,716
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 62,872,741 18,556,744
Distributions to shareholders - (641,452
From net investment income )
From net realized gain - (19,377,299
)
TOTAL DISTRIBUTIONS - (20,018,751
)
Share transactions 376,180,036 425,502,908
Net proceeds from sales of shares
Reinvestment of distributions - 19,534,918
Cost of shares redeemed (316,271,025 (369,762,089
) )
Paid in capital portion of redemption fees 304,066 547,208
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 60,213,077 75,822,945
TOTAL INCREASE (DECREASE) IN NET ASSETS 123,085,818 74,360,938
NET ASSETS
Beginning of period 229,924,215 155,563,277
End of period (including undistributed net investment income of $2,324,599 and $963,664,
respectively) $ 353,010,033 $ 229,924,215
OTHER INFORMATION
Shares
Sold 14,042,559 16,880,752
Issued in reinvestment of distributions - 895,378
Redeemed (12,104,746 (14,378,596
) )
Net increase (decrease) 1,937,813 3,397,534
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.92 $ 25.03 $ 22.18 $ 15.38 $ 10.84 $ 8.98
Income from Investment Operations
Net investment income .23 .20 .03 .09 .05 .16
Net realized and unrealized gain (loss) 6.38 2.34 4.15 6.80 4.40 1.69
Total from investment operations 6.61 2.54 4.18 6.89 4.45 1.85
Less Distributions - (.12) (.01) (.01) (.14) (.14)
From net investment income
From net realized gain - (3.60) (1.40) (.28) - -
Total distributions - (3.72) (1.41) (.29) (.14) (.14)
Redemption fees added to paid in capital .03 .07 .08 .20 .23 .15
Net asset value, end of period $ 30.56 $ 23.92 $ 25.03 $ 22.18 $ 15.38 $ 10.84
TOTAL RETURN B, C 27.76% 12.43% 19.61% 46.43% 43.62% 22.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 353,010 $ 229,924 $ 155,563 $ 337,903 $ 49,405 $ 8,782
Ratio of expenses to average net assets 1.30% A 1.45% 1.58% 1.55% A 2.08% 2.50%
Ratio of expenses to average net assets before 1.33% A 1.47% 1.58% 1.55% A 2.08% 2.82%
expense reductions
Ratio of net investment income to average net assets 1.73% A .80% .11% .61% A .40% 1.78%
Portfolio turnover rate 100% A 124% 95% 61% A 134% 159%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
INSURANCE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
INSURANCE 14.57% 19.97% 127.98% 210.46%
INSURANCE
(INCL. 3% SALES CHARGE) 11.13% 16.37% 121.14% 201.15%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
INSURANCE 19.97% 17.92% 12.37%
INSURANCE
(INCL. 3% SALES CHARGE) 16.37% 17.20% 12.02%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select InsurStandard & P
12/16/85 9700.00 10000.00
12/31/85 9884.30 10080.42
01/31/86 10660.30 10136.87
02/28/86 11475.10 10895.11
03/31/86 12018.30 11503.06
04/30/86 11649.70 11373.07
05/31/86 12299.60 11978.12
06/30/86 12241.40 12180.55
07/31/86 11824.30 11499.66
08/31/86 12901.00 12352.93
09/30/86 11222.90 11331.35
10/31/86 11106.50 11985.16
11/30/86 10737.90 12276.40
12/31/86 10640.90 11963.36
01/31/87 11387.80 13574.82
02/28/87 12590.60 14111.03
03/31/87 11950.40 14518.83
04/30/87 10961.00 14389.62
05/31/87 10815.50 14514.81
06/30/87 11164.70 15247.80
07/31/87 11271.40 16020.87
08/31/87 12086.20 16618.45
09/30/87 12086.20 16254.50
10/31/87 9816.40 12753.28
11/30/87 9127.70 11702.41
12/31/87 9347.08 12592.97
01/31/88 10066.08 13123.13
02/29/88 10056.23 13734.67
03/31/88 9819.85 13310.27
04/30/88 9750.90 13458.01
05/31/88 10016.83 13575.09
06/30/88 10469.91 14198.19
07/31/88 10519.15 14144.24
08/31/88 10627.50 13663.33
09/30/88 10991.92 14245.39
10/31/88 10942.68 14641.41
11/30/88 10706.29 14432.04
12/31/88 10973.61 14684.60
01/31/89 11807.80 15759.52
02/28/89 11887.25 15367.10
03/31/89 12165.32 15725.16
04/30/89 12562.55 16541.29
05/31/89 12632.07 17211.21
06/30/89 12910.01 17113.11
07/31/89 13994.13 18658.42
08/31/89 14421.81 19024.13
09/30/89 14620.73 18946.13
10/31/89 15098.15 18506.58
11/30/89 15505.94 18884.12
12/31/89 15125.05 19337.33
01/31/90 13841.23 18039.80
02/28/90 14232.39 18272.51
03/31/90 14162.18 18756.73
04/30/90 13670.72 18287.82
05/31/90 14924.45 20070.88
06/30/90 14964.57 19934.40
07/31/90 14743.92 19870.61
08/31/90 13209.35 18074.30
09/30/90 12065.94 17194.08
10/31/90 11584.51 17120.15
11/30/90 13119.08 18226.11
12/31/90 13640.63 18734.62
01/31/91 14372.81 19551.45
02/28/91 15827.14 20949.38
03/31/91 16870.25 21456.35
04/30/91 16779.98 21507.85
05/31/91 17201.24 22436.99
06/30/91 16131.95 21409.37
07/31/91 16730.93 22407.05
08/31/91 16629.41 22938.10
09/30/91 16791.85 22555.03
10/31/91 17299.46 22857.27
11/30/91 17147.18 21936.12
12/31/91 18644.06 24445.61
01/31/92 18623.69 23990.92
02/29/92 19122.90 24302.81
03/31/92 18847.82 23828.90
04/30/92 18368.99 24529.47
05/31/92 18613.50 24649.67
06/30/92 19002.90 24282.39
07/31/92 20079.59 25275.53
08/31/92 19491.30 24757.39
09/30/92 20523.58 25049.52
10/31/92 21400.47 25137.20
11/30/92 22133.06 25994.38
12/31/92 22839.20 26314.11
01/31/93 23794.11 26535.14
02/28/93 24243.48 26896.02
03/31/93 25524.18 27463.53
04/30/93 24916.83 26798.91
05/31/93 24275.05 27517.12
06/30/93 24534.02 27596.92
07/31/93 25389.72 27486.53
08/31/93 26684.54 28528.27
09/30/93 26774.62 28308.61
10/31/93 25997.72 28894.59
11/30/93 24410.16 28620.10
12/31/93 24706.64 28966.40
01/31/94 25039.68 29951.26
02/28/94 23941.88 29139.58
03/31/94 22819.41 27869.09
04/30/94 23066.11 28225.82
05/31/94 24126.90 28688.72
06/30/94 23991.22 27985.85
07/31/94 24435.27 28903.78
08/31/94 25101.35 30088.84
09/30/94 24928.66 29351.66
10/31/94 24620.29 30012.07
11/30/94 23374.48 28919.03
12/31/94 24620.29 29347.90
01/31/95 25508.40 30108.89
02/28/95 26285.49 31282.24
03/31/95 26704.88 32205.38
04/30/95 26951.59 33153.82
05/31/95 27544.75 34478.98
06/30/95 28409.77 35279.93
07/31/95 29262.44 36449.81
08/31/95 30115.10 36541.30
Let's say you invested $10,000 in Fidelity Select Insurance Portfolio on
December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $30,115 - a 201.15%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Federal Home Loan Mortgage Corporation 7.4
General Re Corp. 5.8
Allstate Corp. 5.5
Equitable Iowa Companies 5.3
Aetna Life & Casualty Co. 5.1
Conseco, Inc. 4.9
National Re Corp. 4.7
American International Group, Inc. 4.7
Triad Guaranty, Inc. 3.8
Gryphon Holdings, Inc. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 28.9
Row: 1, Col: 2, Value: 7.1
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 10.2
Row: 1, Col: 5, Value: 46.4
Property-Casualty &
Reinsurance 46.4%
Life Insurance 10.2%
Federal & Federally Sponsored
Credit Agencies 7.4%
Insurance Brokers &
Services 7.1%
All Others 28.9%*
* INCLUDES SHORT-TERM INVESTMENTS
28.9
INSURANCE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Michael Tempero,
Portfolio Manager
of Fidelity Select
Insurance Portfolio
Q. HOW HAS THE FUND BEEN PERFORMING, MIKE?
A. It's done pretty well, but the insurance sector as a whole has been
struggling just to stay even with the broad market. For the six months
ended August 31, 1995, Select Insurance had a total return of 14.57%,
compared with the S&P 500's 16.81% gain; for the 12 months ended August 31,
the fund was up by 19.97%, again slightly lower than the S&P, which had a
21.45% return over the same period.
Q. EXPECTATIONS FOR FALLING INTEREST RATES HELPED THE SECTOR RALLY SOMEWHAT
LAST FALL. WERE RATES ALSO A FACTOR IN DRIVING RECENT PERFORMANCE?
A. Yes, the stable and somewhat lower rate environment has had a positive
effect on performance. Lower rates have contributed to a generally stronger
bond market over the past six months, and this has been reflected in higher
stock prices for many stocks in the group. The reason for this is that
insurance companies' portfolios are typically quite heavily invested in
bonds; thus, when bond prices strengthen (as they do when interest rates
decline), company assets grow in value, increasing their earnings, which
the market often rewards with higher stock prices.
Q. WHAT STOCKS DID WELL FOR YOU?
A. The fund's large-company stocks - Aetna and Allstate, for example -
generally performed quite well as rates turned. But there were other, more
fundamental, company-specific factors that also helped performance. Aetna,
for instance, is actively working to create more shareholder value. It has
been replenishing reserves for environmental exposure in its property and
casualty business. It has gone through various cost-cutting programs, and
is considering new ways to configure its businesses to create better value
for shareholders. Allstate began to show a nice rebound from a tough 1994,
when it was hit with huge claims from the California earthquake. The
company is planning to expand its auto insurance business, which it
believes should show increasing profit potential as a maturing population
and safer cars improve the economics of this business.
Q. WHERE ELSE DID YOU FIND OPPORTUNITIES?
A. American Express was one of the top contributors to fund performance.
The company is seeing good success in turning around its credit card
business, and its stock has had a good run over the recent past. I sold the
position during the period and took some nice profit. Insurance names that
did well included TIG Holdings (Transamerica), Conseco, and General Re, a
reinsurer, whose recent acquisition of a European firm shows good prospects
for future growth.
Q. ANY BIG DISAPPOINTMENTS?
A. Nothing big, but there were some names - mostly smaller companies - that
didn't perform as well as I'd hoped. Crop Growers Corp., for instance,
which writes crop/hail insurance for farmers, showed some weakness when its
earnings failed to meet the expectations that were built into its stock
price. Alexander & Alexander, an insurance broker, didn't really do much
during the period, although I continue to like the stock's prospects going
forward. For a number of the stocks that didn't do especially well, it
wasn't so much that their fundamentals were poor, but more a case of the
market moving toward names whose stocks were rising faster in the positive
interest rate environment.
Q. MIKE, YOU STARTED MANAGING THE FUND ONLY ABOUT SIX MONTHS AGO. WHAT
CHANGES IN STRATEGY DID YOU MAKE?
A. Since taking over the fund, I've emphasized a bottom-up approach to
analyzing the industry. That is, I've been selecting stocks one at a time
based on visits with a lot of companies and seeking out the best values and
growth stories. I've also done some repositioning around the theme of
mortgage insurance, a business that is benefiting from the recent bounce in
the housing market and from more stringent requirements for mortgage
insurance.
Q. WHAT'S YOUR VIEW TO THE FUTURE?
A. I'm somewhat cautious. There has been no real improvement in the
underlying fundamentals of supply and demand in the insurance market. Even
though many stocks have done well in the current declining rate environment
(and probably can continue doing well for a while), there's likely to be
more value in the sector when industry fundamentals are improving. So I'll
continue to look for value-oriented stocks in segments of the industry,
like mortgage insurance, for instance, where fundamentals are getting
better.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FSPCX
SIZE: as of August 31, 1995, more than
$15 million
MANAGER: Michael Tempero, since February
1995; equity analyst, insurance industry;
analyst, domestic oil and gas exploration and
production, conglomerates and household
products, 1993-1995; joined Fidelity in 1993.
(checkmark)
INSURANCE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.3%
SHARES VALUE (NOTE 1)
BANKS - 4.2%
NATIONAL COMMERCIAL BANKS - 4.2%
BankAmerica Corp. 5,000 $ 282,500
Mercantile Bancorporation, Inc. 7,000 316,750
Merchants Bancorp 2,000 52,000
651,250
COMPUTER SERVICES & SOFTWARE - 3.2%
PREPACKAGED COMPUTER SOFTWARE - 3.2%
Policy Management Systems Corp. (a) 10,000 495,000
CREDIT & OTHER FINANCE - 3.8%
MORTGAGE BANKERS - 3.8%
Triad Guaranty, Inc. (a) 25,500 596,063
FEDERAL SPONSORED CREDIT - 7.4%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 7.4%
Federal Home Loan Mortgage
Corporation 17,900 1,150,075
INSURANCE - 71.7%
INSURANCE BROKERS & SERVICES - 7.1%
Alexander & Alexander Services, Inc. 20,000 462,500
Crop Growers Corp. (a) 13,000 178,750
Frontier Insurance Group, Inc. 16,000 464,000
1,105,250
INSURANCE CARRIERS - 1.1%
AMBAC, Inc. 1,000 42,250
MBIA, Inc. 1,000 68,000
MGIC Investment Corp. 1,000 56,000
166,250
LIFE INSURANCE - 10.2%
Conseco, Inc. 15,000 753,750
Equitable Iowa Companies 22,000 819,500
1,573,250
MULTI-LINE INSURANCE - 6.9%
Aetna Life & Casualty Co. 11,500 784,875
CIGNA Corp. 2,000 193,500
CNA Financial Corp. 1,000 95,875
1,074,250
PROPERTY-CASUALTY & REINSURANCE - 46.4%
ACE Ltd. 15,000 461,250
Allstate Corp. 25,000 846,875
American International Group, Inc. 9,000 725,625
Berkley (W.R.) Corp. 7,000 300,125
Chubb Corp. (The) 5,000 456,250
Enhance Financial Services Group Corp. 5,000 101,250
Fremont General Corp. 2,000 54,500
General Re Corp. 6,000 891,750
Gryphon Holdings, Inc. (a) 35,000 503,125
NAC Re Corp. 13,000 474,500
National Re Corp. 23,000 730,249
Old Republic International Corp. 14,100 389,513
Renaissance RE Holdings (a) 5,000 122,500
SAFECO Corp. 1,000 64,625
St. Paul Companies, Inc. (The) 3,000 162,750
Selective Insurance Group, Inc. 14,500 496,625
TIG Holdings, Inc. 15,500 397,188
7,178,700
TOTAL INSURANCE 11,097,700
TOTAL COMMON STOCKS
(Cost $12,734,977) 13,990,088
REPURCHASE AGREEMENTS - 9.7%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $1,497,242 $ 1,497,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $14,231,977) $ 15,487,088
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $9,390,161 and $17,308,988, respectively (see Note 4 of Notes to
Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $10,083 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $2,042,000 and $1,168,385,
respectively. The weighted average interest rate paid was 6.5% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $14,247,036. Net unrealized appreciation aggregated
$1,240,052, of which $1,315,146 related to appreciated investment
securities and $75,094 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $938,000 which will expire on February 28, 2003.
On October 26, 1990, the fund acquired all of the assets of Life Insurance
Portfolio in a tax-free exchange for shares of Insurance portfolio. Life
Insurance Portfolio has a capital loss carryover of approximately $97,000
available to offset future realized capital gains in Insurance Portfolio,
to the extent provided by regulations.
The fund has elected to defer to its fiscal year ending February 28, 1996
$77,000 of losses recognized during the period November 1,1994 to February
28, 1995.
INSURANCE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $1,497,000) (cost $14,231,977) - See $ 15,487,088
accompanying schedule
Cash 954
Receivable for investments sold 1,598,968
Receivable for fund shares sold 928,798
Dividends receivable 15,025
Redemption fees receivable 545
Other receivables 2,046
Prepaid expenses 4,824
TOTAL ASSETS 18,038,248
LIABILITIES
Payable for investments purchased $ 2,534,612
Payable for fund shares redeemed 134,413
Accrued management fee 6,744
Other payables and accrued expenses 34,846
TOTAL LIABILITIES 2,710,615
NET ASSETS $ 15,327,633
Net Assets consist of:
Paid in capital $ 13,053,619
Undistributed net investment income 1,074
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 1,017,829
Net unrealized appreciation (depreciation) on investments 1,255,111
NET ASSETS, for 629,080 $ 15,327,633
shares outstanding
NET ASSET VALUE and redemption price per share ($15,327,633 (divided by) 629,080 shares) $24.37
Maximum offering price per share (100/97.00 of $24.37) $25.12
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 131,766
Dividends
Interest 19,085
TOTAL INCOME 150,851
EXPENSES
Management fee $ 46,328
Transfer agent 64,865
Fees
Redemption fees (9,046
)
Accounting fees and expenses 22,671
Non-interested trustees' compensation 62
Custodian fees and expenses 6,635
Registration fees 4,824
Audit 8,232
Legal 45
Interest 2,753
Miscellaneous 764
Total expenses before reductions 148,133
Expense reductions (3,224 144,909
)
NET INVESTMENT INCOME 5,942
REALIZED AND UNREALIZED GAIN (LOSS) 2,055,315
Net realized gain (loss) on
investment securities
Change in net unrealized appreciation (depreciation) on investment securities (119,900
)
NET GAIN (LOSS) 1,935,415
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,941,357
OTHER INFORMATION $40,310
Sales Charges Paid to FDC
Deferred sales charges withheld $5,834
by FDC
Exchange fees withheld by FSC $6,720
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 5,942 $ 25,733
Net investment income
Net realized gain (loss) 2,055,315 (1,038,394
)
Change in net unrealized appreciation (depreciation) (119,900 1,757,862
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,941,357 745,201
Distributions to shareholders from net investment income (30,601 -
)
Share transactions 7,402,124 33,064,318
Net proceeds from sales of shares
Reinvestment of distributions 29,922 -
Cost of shares redeemed (15,859,190 (30,429,283
) )
Paid in capital portion of redemption fees 5,711 39,347
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (8,421,433 2,674,382
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,510,677 3,419,583
)
NET ASSETS
Beginning of period 21,838,310 18,418,727
End of period (including undistributed net investment income of $1,074 and $25,733, respectively) $ 15,327,633 $ 21,838,310
OTHER INFORMATION
Shares
Sold 324,862 1,639,929
Issued in reinvestment of distributions 1,373 -
Redeemed (722,164 (1,564,065
) )
Net increase (decrease) (395,929) 75,864
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.31 $ 19.41 $ 21.58 $ 18.03 $ 16.73 $ 13.63
Income from Investment Operations
Net investment income (loss) .01 .05 - (.04) .04 .23
Net realized and unrealized gain (loss) 3.08 1.78 (.24) 5.12 1.48 2.83
Total from investment operations 3.09 1.83 (.24) 5.08 1.52 3.06
Less Distributions (.04) - (.01) - (.26) -
From net investment income
In excess of net investment income - - - (.03) - -
From net realized gain - - (1.96) (1.71) - -
Total distributions (.04) - (1.97) (1.74) (.26) -
Redemption fees added to paid in capital .01 .07 .04 .21 .04 .04
Net asset value, end of period $ 24.37 $ 21.31 $ 19.41 $ 21.58 $ 18.03 $ 16.73
TOTAL RETURN B, C 14.57% 9.79% (1.24)% 31.98% 9.47% 22.74%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 15,328 $ 21,838 $ 18,419 $ 26,367 $ 2,573 $ 2,176
Ratio of expenses to average net assets 1.89% A 2.34% 1.93% 2.49% A 2.47% 2.49%
Ratio of expenses to average net assets before 1.93% A 2.36% 1.93% 2.52% A 2.71% 2.73%
expense reductions
Ratio of net investment income (loss) to average net .08% A .25% (.02)% (.26)% .22% 1.58%
assets A
Portfolio turnover rate 126% A 265% 101% 81% A 112% 98%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
REGIONAL BANKS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
REGIONAL BANKS 20.16% 16.01% 279.30% 281.33%
REGIONAL BANKS
(INCL. 3% SALES CHARGE) 16.55% 12.53% 267.92% 269.89%
S&P 500 16.81% 21.45% 102.17% 201.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 30, 1986. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
REGIONAL BANKS 16.01% 30.56% 15.70%
REGIONAL BANKS
(INCL. 3% SALES CHARGE) 12.53% 29.76% 15.32%
S&P 500 21.45% 15.12% 12.78%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select RegionalStandard & Poor's
06/30/86 9700.00 10000.00
07/31/86 9040.40 9488.77
08/31/86 9379.90 10192.84
09/30/86 8361.40 9349.89
10/31/86 8574.80 9889.38
11/30/86 8545.70 10129.69
12/31/86 8283.80 9871.39
01/31/87 8894.90 11201.06
02/28/87 9486.60 11643.50
03/31/87 9506.00 11980.00
04/30/87 8933.70 11873.38
05/31/87 8982.20 11976.68
06/30/87 9302.30 12581.50
07/31/87 9302.30 13219.38
08/31/87 9729.10 13712.46
09/30/87 9476.90 13412.16
10/31/87 7924.90 10523.18
11/30/87 7672.70 9656.07
12/31/87 8031.30 10390.90
01/31/88 8599.97 10828.35
02/29/88 8819.46 11332.96
03/31/88 9019.00 10982.77
04/30/88 8919.23 11104.68
05/31/88 9078.86 11201.29
06/30/88 9717.37 11715.43
07/31/88 9767.25 11670.91
08/31/88 9637.56 11274.10
09/30/88 10006.70 11754.37
10/31/88 10126.42 12081.14
11/30/88 9877.00 11908.38
12/31/88 10095.78 12116.78
01/31/89 10736.78 13003.73
02/28/89 10897.03 12679.94
03/31/89 11794.44 12975.38
04/30/89 12104.25 13648.80
05/31/89 13033.71 14201.58
06/30/89 12816.91 14120.63
07/31/89 13957.63 15395.72
08/31/89 14302.00 15697.48
09/30/89 14420.37 15633.12
10/31/89 13085.95 15270.43
11/30/89 13064.43 15581.95
12/31/89 12785.92 15955.91
01/31/90 11633.93 14885.27
02/28/90 12112.98 15077.29
03/31/90 11816.42 15476.84
04/30/90 11143.48 15089.92
05/31/90 11919.08 16561.19
06/30/90 11451.44 16448.57
07/31/90 10755.68 16395.93
08/31/90 9751.97 14913.74
09/30/90 8565.77 14187.44
10/31/90 8314.84 14126.44
11/30/90 9421.20 15039.00
12/31/90 10143.16 15458.59
01/31/91 10816.28 16132.59
02/28/91 11733.11 17286.07
03/31/91 12394.62 17704.39
04/30/91 13230.21 17746.88
05/31/91 14089.02 18513.55
06/30/91 13253.42 17665.63
07/31/91 14355.94 18488.84
08/31/91 15388.83 18927.03
09/30/91 15087.09 18610.95
10/31/91 15713.78 18860.33
11/30/91 14994.24 18100.26
12/31/91 16816.65 20170.93
01/31/92 17868.45 19795.75
02/29/92 19311.63 20053.10
03/31/92 19042.56 19662.06
04/30/92 20155.52 20240.13
05/31/92 21011.64 20339.30
06/30/92 21221.29 20036.25
07/31/92 21245.91 20855.73
08/31/92 20113.45 20428.19
09/30/92 21048.96 20669.24
10/31/92 21947.54 20741.58
11/30/92 23744.70 21448.87
12/31/92 24976.49 21712.69
01/31/93 26017.18 21895.08
02/28/93 26826.61 22192.85
03/31/93 27970.08 22661.12
04/30/93 26530.16 22112.72
05/31/93 26270.83 22705.34
06/30/93 27736.08 22771.19
07/31/93 27813.88 22680.10
08/31/93 28202.89 23539.68
09/30/93 29175.40 23358.43
10/31/93 27606.41 23841.94
11/30/93 26737.63 23615.45
12/31/93 27767.00 23901.19
01/31/94 29386.34 24713.83
02/28/94 28560.79 24044.09
03/31/94 28084.51 22995.77
04/30/94 29572.73 23290.11
05/31/94 31050.56 23672.07
06/30/94 30279.52 23092.10
07/31/94 31082.69 23849.53
08/31/94 31885.86 24827.36
09/30/94 29990.38 24219.09
10/31/94 29861.87 24764.01
11/30/94 27934.26 23862.11
12/31/94 27827.58 24215.98
01/31/95 29229.22 24843.91
02/28/95 30784.69 25812.07
03/31/95 31041.09 26573.79
04/30/95 31810.28 27356.38
05/31/95 33895.64 28449.82
06/30/95 34322.96 29110.71
07/31/95 35656.23 30076.02
08/31/95 36989.49 30151.51
Let's say you invested $10,000 in Fidelity Select Regional Banks Portfolio
on June 30, 1986, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $36,989 - a 269.89%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $30,152 over the same period - a 201.52% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
American Express Co. 4.9
First Bank System, Inc. 4.9
Shawmut National Corp. 4.9
Bank of New York Co., Inc. 4.8
Crestar Financial Corp. 4.7
BankAmerica Corp. 4.5
First Chicago Corp. 4.4
NBD Bancorp, Inc. 4.4
Banc One Corp. 4.2
Morgan (J.P.) & Co., Inc. 4.0
TOP REGIONS AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 31.8
Row: 1, Col: 2, Value: 4.7
Row: 1, Col: 3, Value: 6.2
Row: 1, Col: 4, Value: 8.9
Row: 1, Col: 5, Value: 21.1
Row: 1, Col: 6, Value: 27.3
Northeast 27.3%
Midwest 21.1%
Mid-Atlantic 8.9%
West 6.2%
Multi-Regional 4.7%
All Others 31.8%*
* INCLUDES SHORT-TERM INVESTMENTS
REGIONAL BANKS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Louis Salemy,
Portfolio Manager of
Fidelity Select Regional Banks Portfolio
Q. HOW HAS THE FUND BEEN DOING, LOUIS?
A. Performance generally has been good, particularly of late. For the six
months ended August 31, 1995, the fund outperformed the broad market,
gaining 20.16% compared with the S&P 500's 16.81% return. For the 12 months
ended August 31, it lagged the average a bit, showing a 16.01% gain versus
the S&P 500's total return of 21.45%.
Q. WHAT WERE THE MAJOR FACTORS THAT INFLUENCED FUND PERFORMANCE?
A. A lot of the gain in regional banks simply has been a rebound from the
second half of 1994, when the group really was out of favor, due in large
part to the negative effects of higher interest rates on lending spreads
and earnings. The fundamentals remained fairly strong during this period
for a number of the names in the group, and credit quality never became an
issue. So when the rate environment began to stabilize earlier this year,
regional bank stocks started to move higher, based initially on an
improving interest rate scenario and subsequently, in many cases, on real
or anticipated takeover activity.
Q. BANK OF BOSTON, YOUR TOP HOLDING SIX MONTHS AGO, IS NO LONGER IN THE
PORTFOLIO. WHY?
A. Bank of Boston has had a phenomenal run over the past several quarters.
It turned in very strong earnings, even when rates were high, and the stock
also has received a substantial lift from recent takeover speculation. I
sold the position because I thought the stock was valued quite high and
because I questioned whether a buyer would pay a high premium to acquire
the Bank of Boston franchise. In any event, Bank of Boston was one of the
top contributors to fund performance during the period.
Q. WHAT OTHER REGIONAL BANKS HAVE DONE WELL FOR YOU THIS YEAR?
A. Midlantic Bank - which I've since sold - and Shawmut National, both of
which are in the process of being taken over by larger institutions, were
top performers in both the six months and full-year comparisons. So too was
Bank of New York, which has been generating good results from its fee-based
processing businesses and has been very profitable.
Q. WHAT STOCKS ARE YOU PARTICULARLY HIGH ON AT THE MOMENT?
A. Fleet Financial is by far my favorite name within the group. I think
Fleet will do a good job integrating its acquisition of Shawmut. There are
great cost-cutting opportunities between the two companies, and when that
occurs, I think returns will improve substantially and result in a higher
multiple. I like Banc One, which has a financial turnaround story in
progress, and I'm also very high on First Bank System in Minneapolis, which
is very shareholder-oriented.
Q. FIRST BANK SYSTEM WAS, IN FACT, THE SECOND LARGEST HOLDING IN THE
PORTFOLIO AT THE END OF AUGUST. WHY ARE YOU SO KEEN ON THIS STOCK?
A. What's exciting about this company is that it is aggressively growing
its corporate credit card business. The market for this product, which is
similar to the American Express corporate card, is massive, there is very
low credit risk, and as a fee-service business, it requires little capital
to grow. So I think this is a huge growth opportunity for the company. In
addition, First Bank System runs a very lean ship, and I have little worry
that they will overpay for any future acquisitions.
Q. HAS YOUR INVESTMENT STRATEGY CHANGED TO ANY GREAT DEGREE?
A. In the past, I've tended to focus on stocks that were valued
inexpensively. But with the group as a whole now valued at rather high
levels, I'm looking more at companies that are committed to increasing
shareholder value and those with superior franchises that generate high
returns. For example, I recently bought First Bank System, which we've
already talked about, and I increased the fund's positions in Crestar
Financial and Wachovia, both of which I consider to be high-quality banks.
When the group as a whole is expensive, I want to hold the names that
generate the highest returns, because they are the ones likely to hold up
the best in the event of a market correction.
Q. WHAT IS YOUR OUTLOOK FOR THE SECTOR?
A. I have some basic concerns. First, I think that net interest margins
will remain under pressure. Second, I think that loan growth is likely to
slow as the general economy weakens. And third, I am concerned that credit
quality may weaken down the road. None of these factors leads me to be
overly optimistic about the group.
FUND FACTS
START DATE: June 30, 1986
TRADING SYMBOL: FSRBX
SIZE: as of August 31, 1995, more than
$209 million
MANAGER: Louis Salemy, since December
1994; manager, Fidelity Select Financial
Services Portfolio, since December 1994;
manager, Fidelity Select Medical Delivery
Portfolio, 1993-1994; manager, Fidelity Select
Industrial Materials Portfolio, 1992-1994;
joined Fidelity in 1992
(checkmark)
REGIONAL BANKS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 80.0%
SHARES VALUE (NOTE 1)
BANKS - 71.6%
MID-ATLANTIC - 8.9%
Crestar Financial Corp. 162,283 $ 9,148,704
HUBCO, Inc. 75,030 1,481,843
Wachovia Corp. 172,600 6,860,850
17,491,397
MIDWEST - 21.1%
Boatmen's Bancshares, Inc. 199,100 7,366,700
Comerica, Inc. 207,300 7,385,063
First Bank System, Inc. 211,100 9,631,438
First Chicago Corp. 137,500 8,714,063
Mercantile Bancorporation, Inc. 40,500 1,832,625
National City Corp. 172,209 5,123,218
Norwest Corp. 47,696 1,436,842
41,489,949
NORTHEAST - 27.3%
Banc One Corp. 246,600 8,291,925
Bank of New York Co., Inc. 214,924 9,349,190
Fleet Financial Group, Inc. 195,000 7,215,000
Morgan (J.P.) & Co., Inc. 107,500 7,834,063
NBD Bancorp, Inc. 239,700 8,569,275
Shawmut National Corp. 297,300 9,625,088
U.S. Bancorp 100,000 2,862,500
53,747,041
SOUTHEAST - 3.4%
BanPonce Corp. 178,501 6,626,850
WEST - 6.2%
BankAmerica Corp. 156,800 8,859,200
Zions Bancorporation 60,000 3,315,000
12,174,200
MULTI-REGIONAL - 4.7%
Keycorp 100,000 3,100,000
NationsBank Corp. 101,253 6,214,403
9,314,403
TOTAL BANKS 140,843,840
CREDIT & OTHER FINANCE - 8.4%
FINANCIAL SERVICES - 4.9%
American Express Co. 240,000 9,690,000
PERSONAL CREDIT INSTITUTIONS - 3.5%
Beneficial Corp. 140,500 6,902,063
TOTAL CREDIT & OTHER FINANCE 16,592,063
TOTAL COMMON STOCKS
(Cost $134,971,916) 157,435,903
REPURCHASE AGREEMENTS - 20.0%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 (Note 3) $ 39,247,344 39,241,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $174,212,916) $ 196,676,903
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $80,480,378 and $74,985,924, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $45,925 for the period (see
Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $174,418,447. Net unrealized appreciation aggregated
$22,258,456, of which $22,398,176 related to appreciated investment
securities and $139,720 related to depreciated investment securities.
REGIONAL BANKS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $39,241,000) (cost $174,212,916) - $ 196,676,903
See accompanying schedule
Cash 24
Receivable for fund shares sold 12,791,361
Dividends receivable 461,294
Redemption fees receivable 1,680
Other receivables 8,970
Prepaid expenses 10,046
TOTAL ASSETS 209,950,278
LIABILITIES
Payable for fund shares redeemed $ 700,945
Accrued management fee 94,492
Other payables and 146,522
accrued expenses
TOTAL LIABILITIES 941,959
NET ASSETS $ 209,008,319
Net Assets consist of:
Paid in capital $ 174,146,432
Undistributed net investment income 2,145,172
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 10,252,728
Net unrealized appreciation (depreciation) on investments 22,463,987
NET ASSETS, for 9,659,485 $ 209,008,319
shares outstanding
NET ASSET VALUE and redemption price per share ($209,008,319 (divided by) 9,659,485 shares) $21.64
Maximum offering price per share (100/97.00 of $21.64) $22.31
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 2,321,106
Dividends
Interest 1,027,873
TOTAL INCOME 3,348,979
EXPENSES
Management fee $ 509,612
Transfer agent 642,779
Fees
Redemption fees (56,422
)
Accounting fees and expenses 83,217
Non-interested trustees' compensation 683
Custodian fees and expenses 7,202
Registration fees 10,046
Audit 11,747
Legal 470
Miscellaneous 1,765
Total expenses before reductions 1,211,099
Expense reductions (7,292 1,203,807
)
NET INVESTMENT INCOME 2,145,172
REALIZED AND UNREALIZED GAIN (LOSS) 10,473,162
Net realized gain (loss) on
investment securities
Change in net unrealized appreciation (depreciation) on investment securities 16,871,906
NET GAIN (LOSS) 27,345,068
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 29,490,240
OTHER INFORMATION $587,669
Sales Charges Paid to FDC
Deferred sales charges withheld $1,104
by FDC
Exchange fees withheld by FSC $39,135
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 2,145,172 $ 2,858,182
Net investment income
Net realized gain (loss) 10,473,162 6,429,187
Change in net unrealized appreciation (depreciation) 16,871,906 (2,016,821
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 29,490,240 7,270,548
Distributions to shareholders - (1,863,695
From net investment income )
From net realized gain - (6,217,044
)
TOTAL DISTRIBUTIONS - (8,080,739
)
Share transactions 115,561,425 301,180,682
Net proceeds from sales of shares
Reinvestment of distributions - 7,855,119
Cost of shares redeemed (100,729,619 (241,446,435
) )
Paid in capital portion of redemption fees 83,489 394,744
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 14,915,295 67,984,110
TOTAL INCREASE (DECREASE) IN NET ASSETS 44,405,535 67,173,919
NET ASSETS
Beginning of period 164,602,784 97,428,865
End of period (including undistributed net investment income of $2,145,172 and $1,047,856,
respectively) $ 209,008,319 $ 164,602,784
OTHER INFORMATION
Shares
Sold 5,756,757 16,228,773
Issued in reinvestment of distributions - 468,963
Redeemed (5,238,855 (12,971,096
) )
Net increase (decrease) 517,902 3,726,640
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.01 $ 17.99 $ 20.88 $ 16.48 $ 11.40 $ 9.77
Income from Investment Operations
Net investment income .25 .37 .19 .16 .25 .22
Net realized and unrealized gain (loss) 3.37 .87 .93 5.09 5.37 1.41
Total from investment operations 3.62 1.24 1.12 5.25 5.62 1.63
Less Distributions - (.29) E (.15) (.11) (.15) (.15)
From net investment income
From net realized gain - (.98) E (3.92) (.81) (.53) -
Total distributions - (1.27) (4.07) (.92) (.68) (.15)
Redemption fees added to paid in capital .01 .05 .06 .07 .14 .15
Net asset value, end of period $ 21.64 $ 18.01 $ 17.99 $ 20.88 $ 16.48 $ 11.40
TOTAL RETURN B, C 20.16% 7.79% 6.46% 33.10% 52.34% 18.73%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 209,008 $ 164,603 $ 97,429 $ 315,520 $ 156,570 $ 24,212
Ratio of expenses to average net assets 1.43% A 1.56% 1.60% 1.49% A 1.77% 2.51%
Ratio of expenses to average net assets before 1.44% A 1.58% 1.62% 1.49% A 1.77% 2.94%
expense reductions
Ratio of net investment income to average net assets 2.54% A 1.99% .88% 1.06% A 1.80% 2.34%
Portfolio turnover rate 113% A 106% 74% 63% A 89% 110%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL
STATEMENTS).
</TABLE>
BIOTECHNOLOGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
BIOTECHNOLOGY 19.05% 19.38% 115.51% 309.34%
BIOTECHNOLOGY
(INCL. 3% SALES CHARGE) 15.48% 15.80% 109.05% 297.06%
S&P 500 16.81% 21.45% 102.17% 265.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 16, 1985. You can compare these figures
to the performance of the S&P 500 - a common proxy for the U.S. stock
market. This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
BIOTECHNOLOGY 19.38% 16.60% 15.61%
BIOTECHNOLOGY
(INCL. 3% SALES CHARGE) 15.80% 15.89% 15.25%
S&P 500 21.45% 15.12% 14.27%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select BiotechnoStandard & Poor'
12/16/85 9700.00 10000.00
12/31/85 9700.00 10080.42
01/31/86 10175.30 10136.87
02/28/86 10417.80 10895.11
03/31/86 12192.90 11503.06
04/30/86 12377.20 11373.07
05/31/86 12988.30 11978.12
06/30/86 13715.80 12180.55
07/31/86 11863.10 11499.66
08/31/86 12328.70 12352.93
09/30/86 10214.10 11331.35
10/31/86 10970.70 11985.16
11/30/86 10728.20 12276.40
12/31/86 10039.50 11963.36
01/31/87 11378.10 13574.82
02/28/87 13715.80 14111.03
03/31/87 13657.60 14518.83
04/30/87 13483.00 14389.62
05/31/87 13424.80 14514.81
06/30/87 13327.80 15247.80
07/31/87 13347.20 16020.87
08/31/87 13890.40 16618.45
09/30/87 13686.70 16254.50
10/31/87 9476.90 12753.28
11/30/87 8555.40 11702.41
12/31/87 9701.08 12592.97
01/31/88 10191.13 13123.13
02/29/88 10571.17 13734.67
03/31/88 10501.16 13310.27
04/30/88 10311.14 13458.01
05/31/88 10111.12 13575.09
06/30/88 10451.16 14198.19
07/31/88 10441.16 14144.24
08/31/88 10151.13 13663.33
09/30/88 10361.15 14245.39
10/31/88 10251.14 14641.41
11/30/88 9771.08 14432.04
12/31/88 10101.12 14684.60
01/31/89 10801.20 15759.52
02/28/89 10721.19 15367.10
03/31/89 11511.28 15725.16
04/30/89 11901.32 16541.29
05/31/89 12441.38 17211.21
06/30/89 12121.34 17113.11
07/31/89 13241.47 18658.42
08/31/89 13741.52 19024.13
09/30/89 14321.59 18946.13
10/31/89 14371.59 18506.58
11/30/89 14821.64 18884.12
12/31/89 14538.79 19337.33
01/31/90 13450.92 18039.80
02/28/90 14721.80 18272.51
03/31/90 15341.98 18756.73
04/30/90 15535.16 18287.82
05/31/90 17721.06 20070.88
06/30/90 18958.58 19934.40
07/31/90 19009.98 19870.61
08/31/90 18423.95 18074.30
09/30/90 18012.70 17194.08
10/31/90 18166.92 17120.15
11/30/90 20367.10 18226.11
12/31/90 20986.41 18734.62
01/31/91 23396.59 19551.45
02/28/91 26711.89 20949.38
03/31/91 29469.39 21456.35
04/30/91 28185.36 21507.85
05/31/91 29974.57 22436.99
06/30/91 28383.11 21409.37
07/31/91 30938.25 22407.05
08/31/91 33106.26 22938.10
09/30/91 34820.75 22555.03
10/31/91 38249.73 22857.27
11/30/91 35694.58 21936.12
12/31/91 41772.44 24445.61
01/31/92 40935.15 23990.92
02/29/92 37792.47 24302.81
03/31/92 34925.06 23828.90
04/30/92 31667.68 24529.47
05/31/92 33938.67 24649.67
06/30/92 33342.98 24282.39
07/31/92 35086.00 25275.53
08/31/92 32891.56 24757.39
09/30/92 32778.70 25049.52
10/31/92 34383.78 25137.20
11/30/92 37769.49 25994.38
12/31/92 37451.82 26314.11
01/31/93 35527.16 26535.14
02/28/93 29792.72 26896.02
03/31/93 30240.93 27463.53
04/30/93 31018.70 26798.91
05/31/93 33022.46 27517.12
06/30/93 33220.20 27596.92
07/31/93 32126.04 27486.53
08/31/93 33338.84 28528.27
09/30/93 34709.84 28308.61
10/31/93 37293.63 28894.59
11/30/93 37003.61 28620.10
12/31/93 37715.47 28966.40
01/31/94 39007.37 29951.26
02/28/94 36397.21 29139.58
03/31/94 32719.26 27869.09
04/30/94 32126.04 28225.82
05/31/94 31585.55 28688.72
06/30/94 30333.21 27985.85
07/31/94 30412.30 28903.78
08/31/94 33259.75 30088.84
09/30/94 33154.29 29351.66
10/31/94 32020.58 30012.07
11/30/94 31427.36 28919.03
12/31/94 30860.51 29347.90
01/31/95 32244.69 30108.89
02/28/95 33352.03 31282.24
03/31/95 33892.51 32205.38
04/30/95 34947.12 33153.82
05/31/95 35263.51 34478.98
06/30/95 36542.22 35279.93
07/31/95 38176.86 36449.81
08/31/95 39706.05 36541.30
Let's say you invested $10,000 in Fidelity Select Biotechnology Portfolio
on December 16, 1985, when the fund started, and paid a 3% sales charge. By
August 31, 1995, your investment would have grown to $39,706 - a 297.06%
increase. That compares to $10,000 invested in the S&P 500, which would
have grown to $36,541 over the same period - a 265.41% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Amgen, Inc. 9.0
Biogen, Inc. 4.5
Roche Holdings Ltd. participation certificates 3.9
Genentech, Inc. 3.2
Schering-Plough Corp. 3.0
Merck & Co., Inc. 2.4
COR Therapeutics, Inc. 1.8
Protein Design Labs, Inc. 1.7
Genetics Institute, Inc. depositary share 1.7
SmithKline Beecham PLC ADR 1.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Biotechnology 33.5%
Drugs 21.3%
Pharmaceutical
Preparations 4.7%
Medical Supplies &
Appliances 1.8%
Medical Technology 1.6%
All Others 37.1%*
Row: 1, Col: 1, Value: 37.1
Row: 1, Col: 2, Value: 1.6
Row: 1, Col: 3, Value: 1.8
Row: 1, Col: 4, Value: 4.7
Row: 1, Col: 5, Value: 21.3
Row: 1, Col: 6, Value: 33.5
* INCLUDES SHORT-TERM INVESTMENTS
BIOTECHNOLOGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Karen Firestone,
Portfolio Manager of Fidelity Select
Biotechnology Portfolio
Q. KAREN, HOW DID THE FUND PERFORM?
A. The fund has performed very well. For the six months ended August 31,
1995, the fund returned 19.05% versus the Standard & Poor's Index which
returned 16.81% for the same time period. For the 12 months ended August
31, 1995, the fund returned 19.38% and the S&P returned 21.45%.
Q. WHAT LED THE FUND TO OUTPERFORM THE STANDARD & POOR'S 500 INDEX?
A. I think it was a combination of factors. First of all, market
participants were attracted to technology and higher-risk stocks during the
past six months. The investors who fueled the demand for semiconductor and
computer stocks are the same type of investors who are looking for risk in
other areas. Although biotechnology isn't the same as technology, they are
related in terms of risk/reward. Secondly, the low interest rate
environment and strong stock market we've been experiencing is favorable
for biotech companies since they are better able to raise money under such
favorable economic conditions. Finally, there have been some successful
drug trials that have occurred during the past six months that have
propelled the entire sector.
Q. CAN YOU GIVE AN EXAMPLE OF A SUCCESSFUL DRUG TRIAL THAT OCCURRED DURING
THE PERIOD?
A. Sure. Cephalon kicked off the recent rally in biotech when they
announced in the spring that their drug, Myotrophin, was successful in the
treatment of amyotrophic lateral sclerosis (Lou Gehrig's disease). At
first, I was skeptical about what they were saying and I only bought the
stock after I went through Cephalon's data with their biostatistician.
During the period, the stock has risen more than 75%. In this kind of
market, interest in biotechnology stocks transcends the skepticism that was
prevalent a few years ago. Sometimes I have to suspend my own skepticism to
take advantage of what's happening in the market.
Q. THE FUND'S TOP COUPLE OF HOLDINGS HAVEN'T CHANGED MUCH DURING THE PAST
SIX MONTHS . . .
A. That's right. Amgen continues to be the largest and most successful
biotech company. Its earnings have grown faster than expected, and sales
have been better than expected. During the past six months I've doubled the
fund's holding in Amgen because I'm optimistic about the company's earnings
over the next year. I'm still bullish on Biogen as well. The company has a
drug for multiple sclerosis that I think will be approved in the near
future. The stock has performed well during the period, increasing more
than 30%.
Q. WHERE HAVE YOU FOUND OPPORTUNITIES DURING THE PAST SIX MONTHS?
A. Merck is a large addition to the fund's holdings. The company is working
on a couple of new drugs that I think will prove beneficial. One in
particular, Fosamax, is for use in the treatment of osteoporosis. The drug
was presented to the FDA and was met with a positive reaction. I believe
the drug will receive approval within the next several months. Most biotech
drugs, such as Fosamax, can't fit neatly into a pure pharmaceutical or
biotechnology category. The only real distinction is that biotech uses
living cells as their manufacturing plants. Today, almost every large drug
company has a biotechnology component and Merck has one of the largest.
Q. WHAT INVESTMENTS PROVED DISAPPOINTING DURING THE PAST SIX MONTHS.
A. COR Therapeutics, one of the fund's largest holdings, had a negative
impact on results during the past six months. The company reported some
unfavorable results and the stock dropped by almost 50% in one day. I'm not
as negative as the market is on their cardiovascular drug. I think it's a
product that will ultimately be approved, and I used the drop in the
stock's value as a buying opportunity. Another disappointment was the
fund's holding in Teva. Six months ago it was one of the fund's top 10
holdings, but I later became dissatisfied with the company's data on their
multiple sclerosis drug and sold the position. I also wish I'd owned more
Cephalon and Chiron, two drug stocks that performed very well during the
period.
Q. HOW DOES THE FUND LOOK GOING FORWARD?
A. I think the biotechnology stocks will continue to outperform the market.
After more than three years of trending downward, they've turned up and
aren't ready to turn down again. I also think the larger names such as
Amgen and Biogen are in a particularly strong position. Good clinical
results will help the group a lot, and poor reports probably won't
negatively impact these stocks as much as they would have two or three
years ago.
FUND FACTS
START DATE: December 16, 1985
TRADING SYMBOL: FBIOX
SIZE: as of August 31, 1995, more than
$597 million
MANAGER: Karen Firestone, since 1992;
manager, Fidelity Select Health Care Portfolio
since February 1995; manager, Fidelity Select
Air Transportation Portfolio, 1987-1992;
Fidelity Select Leisure Portfolio, 1989-1992;
joined Fidelity in 1983
(checkmark)
BIOTECHNOLOGY PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 66.8%
SHARES VALUE (NOTE 1)
AGRICULTURE - 0.2%
CROPS - 0.2%
DEKALB Genetics Corp. Class B 23,700 $ 945,038
CELLULAR - 0.1%
CELLULAR & COMMUNICATION SERVICES - 0.1%
Millicom International Cellular SA (a) 26,942 794,789
DRUG STORES - 1.0%
Eckerd Corp. (a) 125,000 4,578,125
Revco (D.S.), Inc. 100,000 1,975,000
6,553,125
DRUGS & PHARMACEUTICALS - 60.9%
BIOTECHNOLOGY - 33.5%
Alkermes, Inc. (a) 432,100 2,970,688
Amgen, Inc. (a) 1,181,600 56,569,100
Athena Neurosciences, Inc. (a) 402,700 4,178,013
Bio-Rad Laboratories, Inc. Class A (a) 36,000 1,377,000
Biochem Pharmaceuticals, Inc. (a) 124,000 3,702,146
Biogen, Inc. (a) 519,800 28,459,050
Cambridge Neuroscience, Inc. (a) 358,000 3,848,500
Cell Genesys, Inc. (a) 149,000 1,005,750
Centocor, Inc. (a) 88,400 1,071,850
Cephalon, Inc. (a) 326,000 7,905,500
Chiron Corp. (a) 59,086 5,302,969
Collagen Corp. (a) 30,300 545,400
COR Therapeutics, Inc. (a)(c) 975,500 11,340,188
Creative Biomolecules, Inc. (a) 58,100 275,975
Dynagen, Inc. (warrants) (a) 40,000 60,000
Genentech, Inc. (redeemable) (a) 426,200 20,084,675
Genetics Institute, Inc. (warrants) (a) 40,000 300,000
Genetics Institute, Inc.
depositary share (a) 279,180 10,957,815
Genzyme Corp. 165,200 9,230,550
Genzyme Corp.-Tissue Repair (a) 28,539 410,248
Gilead Sciences, Inc. (a) 218,700 4,756,725
Idexx Laboratories (a) 30,000 1,016,250
Insite Vision, Inc. (a)(c) 612,200 2,448,800
Magainin Pharmaceuticals, Inc. (a) 136,700 1,332,825
Neurogen Corp. (a) 112,400 1,882,700
North American Biologicals, Inc. (a) 171,400 1,564,025
North American Vaccine, Inc. (a) 393,300 3,982,163
Protein Design Labs, Inc. (a) 605,400 10,972,875
Quidel Corp. (a) 95,500 561,063
SciGenics, Inc. (a)(c) 122,000 1,616,500
Sequana Therapeutics, Inc. (a) 160,000 1,680,000
Somatix Therapy Corp. (a) 659,600 4,081,275
Sugen, Inc. (a) 185,000 2,173,750
Univax Biologics, Inc. (a) 46,000 365,125
Vical, Inc. (a) 198,900 2,312,213
210,341,706
COMMERCIAL LABORATORY RESEARCH - 0.4%
Cantab Pharmaceutical
Sponsored ADR (a) 5,000 12,500
Cryomedical Sciences, Inc. (a) 393,000 1,228,125
Medarex, Inc. (warrants) (a) 175,000 267,969
Medarex Inc. (a)(b) 175,000 1,050,000
2,558,594
DRUGS - 21.3%
A.L. Laboratories, Inc. Class A 116,700 2,450,700
Allergan, Inc. 247,400 7,514,775
Astra AB Class A Free shares 60,000 1,987,258
Astra AB Class B Free Shares 165,000 5,352,047
SHARES VALUE (NOTE 1)
Barr Laboratories, Inc. (a) 50,000 $ 1,093,750
Dura Pharmaceuticals, Inc. (a) 160,000 3,920,000
Elan PLC (warrants) (a) 76,575 1,837,800
Elan Corp. PLC ADR (warrants) (a) 14,339 175,653
Elan Corp. PLC ADR (a) 83,215 3,266,189
Glaxo Holdings PLC 47,000 557,049
IVAX Corp. 32 820
Lynx Therapeutics, Inc. (a) 193,995 2
Marsam Pharmaceuticals, Inc. (a) 50,000 1,044,532
Merck & Co., Inc. 300,000 14,962,500
Mylan Laboratories, Inc. 140,100 3,204,788
Novo-Nordisk AS Class B 15,500 1,776,013
Novo Industri A/S ADR 16,000 456,000
Pfizer, Inc. 115,600 5,707,750
Pharmacia AB Class A Free shares 302,300 8,254,081
Roche Holdings Ltd. (part. certs.) 3,650 24,474,865
Schering-Plough Corp. 400,000 18,650,000
Schering-Plough Corp. Unit (a)(d) 6,300 450,765
Sequus Pharmaceuticals, Inc. (a) 70,000 918,750
SmithKline Beecham PLC ADR 220,000 9,845,000
Upjohn Co. 200,000 8,475,000
Watson Pharmaceuticals, Inc. (a) 188,894 7,815,489
134,191,576
IN VITRO, IN VIVO DIAGNOSTIC SUBSTANCES - 0.2%
Igen, Inc. (a) 173,900 1,173,825
Serologicals Corp. 3,000 48,750
1,222,575
MEDICINAL CHEMICALS - 0.8%
Martek Biosciences (a) 350,000 4,987,500
PHARMACEUTICAL PREPARATIONS - 4.7%
Advanced Therapeutic Systems Ltd. (a) 14,339 392,530
Arris Pharmaceutical Corp. (a) 55,000 694,375
Cocensys, Inc. (a) 206,000 1,751,000
Copley Pharmaceutical, Inc. (a) 210,300 3,785,400
Guilford Pharmaceuticals, Inc. (a) 185,000 1,641,875
Immunex Corp. (a) 379,900 5,888,450
Inhale Therapeutic Systems (a) 224,000 2,716,000
La Jolla Pharmaceutical Co. (a) 227,300 923,406
Ligand Pharmaceuticals, Inc. Class B (a) 431,265 3,989,201
Neurobiological Technologies, Inc. (a) 57,900 260,550
Procept, Inc. (a) 306,100 2,066,175
Rhone Poulenc Rorer, Inc. 37,400 1,654,950
T Cell Sciences, Inc. (a) 394,100 1,921,238
Theratech, Inc. (a) 130,000 1,950,000
29,635,150
TOTAL DRUGS & PHARMACEUTICALS 382,937,101
ELECTRICAL EQUIPMENT - 0.0%
TV & RADIO COMMUNICATION EQUIPMENT - 0.0%
ASN (warrants) (a) 5,000 -
MEDICAL EQUIPMENT & SUPPLIES - 3.6%
DRUG DISTRIBUTORS - WHOLESALE - 0.2%
Bergen Brunswig Corp. Class A 60,000 1,252,500
MEDICAL SUPPLIES & APPLIANCES - 1.8%
Abaxis, Inc. (a) 118,000 885,000
Abbott Laboratories 135,000 5,231,250
Boston Scientific Corp. (a) 119,005 4,730,449
Exogen, Inc. (a) 42,500 555,150
11,401,849
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
MEDICAL TECHNOLOGY - 1.6%
Advanced Technology Laboratories, Inc. (a) 108,700 $ 1,847,900
Haemonetics Corp. (a) 240,700 5,175,050
St. Jude Medical, Inc. 51,600 3,076,650
10,099,600
TOTAL MEDICAL EQUIPMENT & SUPPLIES 22,753,949
MEDICAL FACILITIES MANAGEMENT - 1.0%
HEALTH SERVICES - 0.1%
Healthwise America, Inc. (a) 22,950 619,650
HOME HEALTH CARE AGENCIES - 0.4%
Apria Healthcare Group, Inc. (a) 75,620 2,117,360
HOSPITALS - 0.1%
Vencor, Inc. (a) 24,300 719,888
SKILLED NURSING CARE FACILITIES - 0.4%
Mariner Health Group, Inc. (a) 50,000 687,500
TheraTx, Inc. (a) 149,500 1,980,875
2,668,375
TOTAL MEDICAL FACILITIES MANAGEMENT 6,125,273
TOTAL COMMON STOCKS
(Cost $362,035,283) 420,109,275
REPURCHASE AGREEMENTS - 33.2%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 (Note 3) $ 208,456,695 208,423,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $570,458,283) $ 628,532,275
LEGEND
1. Non-income producing
2. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Medarex, Inc. 12/18/92 $ 853,125
3. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
COR Therapeutics, Inc. $ 966,405 $ 1,821,825 $ - $ 11,340,188
Insite Vision, Inc. 468,125 468,438 - 2,448,800
SciGenics, Inc. - - - 1,616,500
Totals $ 1,434,530 $ 2,290,263 $ - $ 15,405,488
4. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $450,765 or 0.1% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $208,631,980 and $180,075,918 respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $75,019 for the period (see
Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $10,524,025 and $11,169,300, respectively (see Note
7 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 89.1%
Switzerland 3.9
Sweden 2.5
United Kingdom 1.7
Canada 1.2
Others (individually less than 1%) 1.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $571,567,769. Net unrealized appreciation aggregated
$56,964,506, of which $73,919,987 related to appreciated investment
securities and $16,955,481 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $33,875,000 of which $10,904,000 and $22,971,000 will expire
on February 28, 2002 and February 28, 2003, respectively.
The fund has elected to defer to its fiscal year ending February 28, 1996
$5,719,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
BIOTECHNOLOGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $208,423,000) (cost $570,458,283) - $ 628,532,275
See accompanying schedule
Cash 114
Receivable for investments sold 1,782,249
Receivable for fund shares sold 11,567,988
Dividends receivable 198,048
Redemption fees receivable 1,450
Other receivables 1,147,706
Prepaid expenses 12,941
TOTAL ASSETS 643,242,771
LIABILITIES
Payable for investments purchased $ 29,516,598
Payable for fund shares redeemed 4,276,293
Accrued management fee 249,853
Other payables and 831,725
accrued expenses
Collateral on securities loaned, 11,169,300
at value
TOTAL LIABILITIES 46,043,769
NET ASSETS $ 597,199,002
Net Assets consist of:
Paid in capital $ 550,048,222
Undistributed net investment income 827,273
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions (11,750,485
)
Net unrealized appreciation (depreciation) on investments 58,073,992
NET ASSETS, for 19,829,443 $ 597,199,002
shares outstanding
NET ASSET VALUE and redemption price per share ($597,199,002 (divided by) 19,829,443 shares) $30.12
Maximum offering price per share (100/97.00 of $30.12) $31.05
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 1,147,393
Dividends
Interest (including income on 3,212,928
securities loaned of $97,231)
TOTAL INCOME 4,360,321
EXPENSES
Management fee $ 1,321,594
Transfer agent 2,026,998
Fees
Redemption fees (94,351
)
Accounting and security lending fees 218,808
Non-interested trustees' compensation 2,066
Custodian fees and expenses 24,487
Registration fees 12,941
Audit 20,388
Legal 1,575
Miscellaneous 7,366
Total expenses before reductions 3,541,872
Expense reductions (8,824 3,533,048
)
NET INVESTMENT INCOME 827,273
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including 29,976,027
realized gain (loss) of $(692,463)
on sales of investment in
affiliated issuers)
Foreign currency transactions (3,523 29,972,504
)
Change in net unrealized appreciation (depreciation) on investment securities 42,027,442
NET GAIN (LOSS) 71,999,946
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 72,827,219
OTHER INFORMATION $697,828
Sales Charges Paid to FDC
Deferred sales charges withheld $13,776
by FDC
Exchange fees withheld by FSC $62,618
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 827,273 $ (1,097,554
Net investment income (loss) )
Net realized gain (loss) 29,972,504 (28,000,457
)
Change in net unrealized appreciation (depreciation) 42,027,442 (10,252,135
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 72,827,219 (39,350,146
)
Share transactions 229,814,217 208,388,703
Net proceeds from sales of shares
Cost of shares redeemed (153,771,903 (202,202,871
) )
Paid in capital portion of redemption fees 132,699 214,866
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 76,175,013 6,400,698
TOTAL INCREASE (DECREASE) IN NET ASSETS 149,002,232 (32,949,448
)
NET ASSETS
Beginning of period 448,196,770 481,146,218
End of period (including undistributed net investment income of $827,273 and $0, respectively) $ 597,199,002 $ 448,196,770
OTHER INFORMATION
Shares
Sold 7,866,977 8,583,014
Redeemed (5,751,267 (8,294,600
) )
Net increase (decrease) 2,115,710 288,414
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.30 $ 27.61 $ 22.60 $ 27.61 $ 26.78 $ 15.28
Income from Investment Operations
Net investment income (loss) .05 (.06) (.18) (.08) (.11) .05 E
Net realized and unrealized gain (loss) 4.76 (2.26) 5.15 (1.09) 3.36 11.80
Total from investment operations 4.81 (2.32) 4.97 (1.17) 3.25 11.85
Less Distributions - - - - (.02) -
In excess of net investment income
From net realized gain - - - (3.89) (2.52) (.67)
Total distributions - - - (3.89) (2.54) (.67)
Redemption fees added to paid in capital .01 .01 .04 .05 .12 .32
Net asset value, end of period $ 30.12 $ 25.30 $ 27.61 $ 22.60 $ 27.61 $ 26.78
TOTAL RETURN B, C 19.05% (8.37)% 22.17% (5.92)% 12.36% 81.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 597,199 $ 448,197 $ 481,146 $ 507,993 $ 679,877 $ 482,271
Ratio of expenses to average net assets 1.62% A 1.59% 1.61% 1.50% A 1.50% 1.63%
Ratio of expenses to average net assets before 1.62% A 1.59% 1.62% 1.50% A 1.50% 1.63%
expense reductions
Ratio of net investment income (loss) to average net .38% A (.27)% (.69)% (.37)% (.34)% .24%
assets A
Portfolio turnover rate 105% A 77% 51% 79% A 160% 166%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.02 PER SHARE.
</TABLE>
HEALTH CARE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
HEALTH CARE 17.79% 32.53% 168.86% 514.44%
HEALTH CARE
(INCL. 3% SALES CHARGE) 14.26% 28.56% 160.80% 496.01%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
HEALTH CARE 32.53% 21.87% 19.91%
HEALTH CARE
(INCL. 3% SALES CHARGE) 28.56% 21.13% 19.54%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select Health (Standard & Poor
08/31/85 9700.00 10000.00
09/30/85 8917.55 9687.00
10/31/85 9503.40 10134.54
11/30/85 10395.95 10829.77
12/31/85 10675.11 11353.93
01/31/86 10745.89 11417.51
02/28/86 11504.74 12271.54
03/31/86 13042.12 12956.29
04/30/86 13199.39 12809.89
05/31/86 14017.23 13491.37
06/30/86 14956.95 13719.38
07/31/86 13887.43 12952.46
08/31/86 14399.87 13913.54
09/30/86 12433.54 12762.89
10/31/86 13518.00 13499.31
11/30/86 13319.38 13827.34
12/31/86 13021.46 13474.74
01/31/87 14963.95 15289.79
02/28/87 17184.51 15893.74
03/31/87 17081.23 16353.07
04/30/87 16676.04 16207.52
05/31/87 16838.91 16348.53
06/30/87 17240.12 17174.13
07/31/87 17899.54 18044.86
08/31/87 18427.86 18717.93
09/30/87 18082.27 18308.01
10/31/87 13311.44 14364.46
11/30/87 12020.42 13180.83
12/31/87 12938.30 14183.89
01/31/88 13899.88 14781.03
02/29/88 14317.24 15469.83
03/31/88 13961.25 14991.81
04/30/88 13744.39 15158.22
05/31/88 13707.56 15290.10
06/30/88 14067.64 15991.91
07/31/88 14047.18 15931.15
08/31/88 13666.64 15389.49
09/30/88 14124.93 16045.08
10/31/88 14300.87 16491.13
11/30/88 13883.51 16255.31
12/31/88 14080.59 16539.78
01/31/89 15074.85 17750.49
02/28/89 14786.06 17308.50
03/31/89 15565.80 17711.79
04/30/89 16415.67 18631.03
05/31/89 16927.24 19385.59
06/30/89 16545.68 19275.09
07/31/89 18595.15 21015.63
08/31/89 19045.03 21427.54
09/30/89 19182.50 21339.68
10/31/89 19040.87 20844.60
11/30/89 19861.49 21269.83
12/31/89 20063.23 21780.31
01/31/90 18912.06 20318.85
02/28/90 18713.87 20580.96
03/31/90 19460.23 21126.36
04/30/90 19460.23 20598.20
05/31/90 22137.86 22606.52
06/30/90 22892.15 22452.80
07/31/90 23208.21 22380.95
08/31/90 22167.85 20357.71
09/30/90 21500.62 19366.29
10/31/90 21992.27 19283.02
11/30/90 24331.96 20528.70
12/31/90 24941.88 21101.45
01/31/91 27404.05 22021.47
02/28/91 30788.95 23596.01
03/31/91 33533.59 24167.03
04/30/91 32949.83 24225.03
05/31/91 34738.79 25271.56
06/30/91 33172.33 24114.12
07/31/91 36107.58 25237.84
08/31/91 37911.96 25835.97
09/30/91 38675.93 25404.51
10/31/91 41224.16 25744.93
11/30/91 38972.47 24707.41
12/31/91 45816.36 27533.94
01/31/92 44313.14 27021.81
02/29/92 42378.14 27373.09
03/31/92 39792.80 26839.32
04/30/92 37537.97 27628.39
05/31/92 38310.90 27763.77
06/30/92 36834.25 27350.09
07/31/92 39050.06 28468.71
08/31/92 37996.83 27885.10
09/30/92 35366.63 28214.15
10/31/92 36454.39 28312.90
11/30/92 38451.50 29278.37
12/31/92 37828.63 29638.49
01/31/93 35796.99 29887.45
02/28/93 31977.02 30293.92
03/31/93 32859.02 30933.12
04/30/93 32846.86 30184.54
05/31/93 34160.73 30993.49
06/30/93 34039.08 31083.37
07/31/93 32932.02 30959.04
08/31/93 34105.99 32132.38
09/30/93 35170.47 31884.96
10/31/93 37786.05 32544.98
11/30/93 37658.31 32235.80
12/31/93 38742.81 32625.86
01/31/94 39510.12 33735.14
02/28/94 38554.03 32820.92
03/31/94 36038.98 31389.92
04/30/94 37484.78 31791.71
05/31/94 39601.84 32313.10
06/30/94 38973.43 31521.43
07/31/94 39754.36 32555.33
08/31/94 44970.75 33890.10
09/30/94 45294.10 33059.79
10/31/94 45922.51 33803.64
11/30/94 46916.98 32572.51
12/31/94 47056.49 33055.56
01/31/95 49548.89 33912.69
02/28/95 50599.02 35234.27
03/31/95 51974.82 36274.03
04/30/95 52699.28 37342.30
05/31/95 53207.03 38834.87
06/30/95 55899.45 39737.01
07/31/95 59099.62 41054.68
08/31/95 59600.69 41157.73
Let's say you invested $10,000 in Fidelity Select Health Care Portfolio on
August 31, 1985, and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $59,601 - a 496.01% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Schering-Plough Corp. 7.9
Bristol-Myers Squibb Co. 6.1
Johnson & Johnson 5.4
St. Jude Medical, Inc. 4.8
Allergan, Inc. 4.4
American Home Products Corp. 4.1
Boston Scientific Corp. 3.3
Pfizer, Inc. 2.9
Becton, Dickinson & Co. 2.8
Amgen, Inc. 2.6
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 25.4
Row: 1, Col: 2, Value: 3.7
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 12.8
Row: 1, Col: 5, Value: 14.0
Row: 1, Col: 6, Value: 36.7
Drugs 36.7%
Medical Supplies &
Appliances 14.0%
Medical Technology 12.8%
Biotechnology 7.4%
Drug Distributors - Wholesale 3.7%
All Others 25.4%*
* INCLUDES SHORT-TERM INVESTMENTS
HEALTH CARE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Karen Firestone,
Portfolio Manager of Fidelity Select
Health Care Portfolio
Q. HOW HAS THE FUND PERFORMED, KAREN?
A. Quite well. For the six months ended August 31, 1995, the fund returned
17.79% while the Standard & Poor's 500 Index returned 16.81% for the same
time period. For the 12 months ended August 31, 1995, the fund returned
32.53% and the S&P returned 21.45%.
Q. WHY DOES THE FUND'S PERFORMANCE CONTINUE TO BE STRONG?
A. Let's start with the drug stocks. Many pharmaceutical companies have
shown sales and earnings growth in the double digits during the past six
months. The industry is adjusting to managed care better than expected, and
many investors are attracted to the non-cyclical nature of the
pharmaceutical industry - people are sick regardless of what the economy is
doing. In addition, many companies in this market sector have been aided by
the weak dollar. Larger drug companies have a high degree of overseas sales
and their revenues in dollars go up when the dollar is weak.
Q. WHAT OTHER FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. The medical device industry has also been strong. I've owned companies
such as St. Jude Medical and Boston Scientific for some time now. They've
contributed to performance based on the momentum they've generated with
strong sales revenues, international demand and strong unit growth. Both
companies have several new products that have gained market share and
surpassed market expectations. I also added some biotechnology stocks such
as Amgen and Biogen, which helped the fund outperform during the period.
Finally, I didn't own many HMO stocks, many of which suffered declines in
their stock prices during the past six months.
Q. THE FUND'S TOP 10 HOLDINGS HAVEN'T CHANGED MUCH DURING THE PAST SIX
MONTHS. WHAT'S HAPPENED IN THOSE STOCKS?
A. Schering-Plough continues to be the fund's largest holding and should
continue to have strong earnings over the next couple of years. Claritin,
their leading asthma drug, should be facing generic competition, but thus
far no one has developed anything as effective. Bristol-Myers Squibb has
been a good stock. It's continued to show earnings growth and a large
number of its products are gaining market share. Not only that, it's
trading at a reasonable 12 times next year's earnings. Johnson & Johnson
has also increased earnings and is growing very rapidly. The company had a
great second quarter in 1995, a trend I expect to continue.
Q. WE'VE TALKED ABOUT SOME OF THE MORE FAMILIAR NAMES IN THE FUND. HAVE YOU
ADDED ANY NEW STOCKS DURING THE PAST SIX MONTHS?
A. Yes. I've found some interesting stocks that I think will benefit the
fund. Allergan is primarily an eye care company that makes products to
treat cataracts. However, recently they've come up with a drug for
psoriasis that I think will receive FDA approval. Another new stock, Apria
Healthcare, is a home healthcare company which has begun to show strong
earnings growth in a rapidly expanding industry.
Q. WHICH INVESTMENTS DIDN'T TURN OUT AS YOU'D HOPED?
A. Most of the stocks in the fund performed pretty well during the past six
months - I don't have many complaints. However, I do regret not owning more
high-tech related healthcare stocks. Some major technology companies, such
as Compaq and Oracle, have begun to sell into the healthcare market by
customizing their products for the healthcare industry and the fund could
have benefited from the rally in technology.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Healthcare is an industry that has undergone wrenching change during the
past several years. Those companies that have been able to adapt to
everything from managed care to mail order drugs have been the most
successful. Whether they're trying to please buyers of drugs or adapt to
the consolidation in the hospital industry, companies in this competitive
industry must provide products and services for the lowest cost and for the
best therapeutic value. I believe that those companies that can meet the
challenges inherent to the industry will outperform the market, and I'll
continue to try to position the fund in those names.
FUND FACTS
START DATE: July 14, 1981
TRADING SYMBOL: FSPHX
SIZE: as of August 31, 1995, more than
$1.0 billion
MANAGER: Karen Firestone, since February
1995; manager Fidelity Select Biotechnology
Portfolio since 1992; manager, Fidelity Select
Air Transportation portfolio, 1987-1992;
Fidelity Select Leisure Portfolio, 1989-1992;
joined Fidelity in 1983
(checkmark)
HEALTH CARE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 81.8%
SHARES VALUE (NOTE 1)
DEFENSE ELECTRONICS - 0.0%
Maxwell Laboratories, Inc. 10,000 $ 86,243
DRUG STORES - 0.5%
Eckerd Corp. (a) 50,000 1,831,250
Revco (D.S.), Inc. 200,060 3,951,185
5,782,435
DRUGS & PHARMACEUTICALS - 45.5%
BIOTECHNOLOGY - 7.4%
Amgen, Inc. (a) 590,000 28,246,250
Athena Neurosciences, Inc. (a) 100,000 1,037,500
Biochem Pharmaceuticals, Inc. (a) 31,200 931,508
Biogen, Inc. (a) 344,700 18,872,325
Cambridge Neuroscience, Inc. (a) 45,900 493,425
Cephalon, Inc. (a) 175,000 4,243,750
COR Therapeutics, Inc. (a) 387,100 4,500,038
Genentech, Inc. (redeemable) (a) 207,400 9,773,725
Genetics Institute, Inc.
depositary share (a) 72,000 2,826,000
Gilead Sciences, Inc. 251,000 5,459,250
Magainin Pharmaceuticals, Inc. 100,000 975,000
North American Biologicals, Inc. (a) 51,800 472,675
Sequana Therapeutics, Inc. (a) 100,000 1,050,000
78,881,446
DRUGS - 36.7%
Allergan, Inc. 1,529,400 46,455,525
American Home Products Corp. 562,400 43,304,800
Astra AB Class A Free shares 225,000 7,452,218
Bristol-Myers Squibb Co. 941,100 64,582,988
Dura Pharmaceuticals, Inc. (a) 100,000 2,450,000
Elan Corp. PLC ADR (a) 130,850 5,135,863
Elan Corp. PLC ADR (warrants) (a) 27,111 332,110
Glaxo PLC sponsored ADR 145,000 3,443,750
Lilly (Eli) & Co. 100,000 8,187,500
Merck & Co., Inc. 440,000 21,945,000
Pfizer, Inc. 633,600 31,284,000
Pharmacia AB Class A Free shares 807,300 22,042,737
Roche Holdings Ltd. (part. certs.) 2,000 13,410,885
Sabdoz AG 11,000 7,967,902
Schering-Plough Corp. 1,808,400 84,316,650
SmithKline Beecham PLC ADR 450,000 20,137,500
Upjohn Co. 50,000 2,118,750
Warner-Lambert Co. 75,900 6,859,463
391,427,641
IN VITRO, IN VIVO DIAGNOSTIC SUBSTANCES - 0.1%
Igen, Inc. (a) 174,000 1,174,500
PHARMACEUTICAL PREPARATIONS - 1.3%
Advanced Therapeutic Systems Ltd. (a) 27,111 742,164
Copley Pharmaceutical, Inc. (a) 220,500 3,969,000
Immunex Corp. (a) 386,300 5,987,650
Inhale Therapeutic Systems (a) 39,000 472,875
Ligand Pharmaceuticals, Inc. Class B (a) 232,800 2,153,400
13,325,089
TOTAL DRUGS & PHARMACEUTICALS 484,808,676
MEDICAL EQUIPMENT & SUPPLIES - 30.5%
DRUG DISTRIBUTORS - WHOLESALE - 3.7%
Bergen Brunswig Corp. Class A 1,150,490 24,016,479
Cardinal Health, Inc. 297,666 15,925,131
39,941,610
MEDICAL, DENTAL, HOSPITALS EQUIPMENT - WHOLESALE - 0.3%
Sterile Concepts Holdings 252,200 3,625,375
SHARES VALUE (NOTE 1)
MEDICAL SUPPLIES & APPLIANCES - 14.0%
Abbott Laboratories 5,000 $ 193,750
Baxter International, Inc. 623,000 24,297,000
Becton, Dickinson & Co. 535,300 30,177,538
Boston Scientific Corp. (a) 888,668 35,324,553
Healthdyne, Inc. (a) 258,200 2,501,313
Johnson & Johnson 829,600 57,242,400
149,736,554
MEDICAL TECHNOLOGY - 11.7%
Advanced Medical, Inc. (a) 196,460 577,101
Advanced Technology Laboratories, Inc. 477,600 8,119,200
AMSCO International, Inc. (a) 210,800 3,768,050
Beckman Instruments, Inc. 354,000 10,133,250
Gish Biomedical, Inc. (a) 141,700 1,169,025
Haemonetics Corp. (a) 270,000 5,805,000
Mentor Corp. 142,600 5,454,450
Nellcor, Inc. (a) 371,400 19,312,800
St. Jude Medical, Inc. 864,600 51,551,775
Spacelabs Medical, Inc. (a)(c) 574,300 15,003,588
Vital Signs, Inc. 179,300 3,429,113
124,323,352
X-RAY ELECTRO-MEDICAL APPARATUS - 0.8%
Healthdyne Technologies, Inc. (a) 168,013 2,247,174
Protocol Systems, Inc. (a)(c) 503,000 5,941,688
8,188,862
TOTAL MEDICAL EQUIPMENT & SUPPLIES 325,815,753
MEDICAL FACILITIES MANAGEMENT - 5.3%
HOME HEALTH CARE AGENCIES - 1.8%
Apria Healthcare Group, Inc. (a) 691,880 19,372,640
HOSPITALS - 2.1%
Columbia/HCA Healthcare Corp. 341,705 16,060,135
NovaCare, Inc. (a) 50,000 412,500
Tenet Healthcare Corp. (a) 200,000 3,175,000
Vencor, Inc. (a) 80,600 2,387,775
22,035,410
MEDICAL SERVICES - 0.5%
Lincare Holdings, Inc. (a) 150,000 4,481,250
Syncor International Corp. (a) 107,500 1,075,000
5,556,250
SKILLED NURSING CARE FACILITIES - 0.3%
TheraTx, Inc. (a) 205,600 2,724,200
SPECIALTY OUTPATIENT CLINICS - 0.6%
Foundation Health Corp. (a) 200,000 6,925,000
TOTAL MEDICAL FACILITIES MANAGEMENT 56,613,500
SERVICES - 0.0%
BUILDING MAINTENANCE - 0.0%
Health Care Services Group, Inc. 577 6,419
TOTAL COMMON STOCKS
(Cost $685,267,369) 873,113,026
CONVERTIBLE PREFERRED STOCKS - 0.9%
MEDICAL EQUIPMENT & SUPPLIES - 0.9%
MEDICAL TECHNOLOGY - 0.9%
U.S. Surgical Corp. $2.20
(b) (Cost $7,710,166) 332,800 9,526,400
NONCONVERTIBLE BONDS - 0.2%
PRINCIPAL VALUE (NOTE 1)
AMOUNT
MEDICAL EQUIPMENT & SUPPLIES - 0.2%
MEDICAL TECHNOLOGY - 0.2%
Advanced Medical, Inc. 15%,
7/15/99 (Cost $1,542,097) $ 2,090,000 $ 2,090,000
REPURCHASE AGREEMENTS - 17.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 182,089,433 182,060,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $876,579,632) $1,066,789,426
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $9,526,400 or 0.9% of net
assets.
3. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Protocol Systems, Inc. $ 430,525 $ - $ - $ 5,941,688
Spacelabs Medical, Inc. - - - 15,003,588
Totals $ 430,525 $ - $ - $ 20,945,276
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $219,588,173 and $282,640,714, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $134,054 for the period
(see Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $19,368,638 and $20,312,400, respectively (see Note
7 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $878,486,293. Net unrealized appreciation aggregated
$188,303,133, of which $194,782,598 related to appreciated investment
securities and $6,479,465 related to depreciated investment securities.
HEALTH CARE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $182,060,000) (cost $876,579,632) - $ 1,066,789,426
See accompanying schedule
Cash 418
Receivable for investments sold 1,032,496
Receivable for fund shares sold 4,488,127
Dividends receivable 1,673,342
Interest receivable 39,188
Redemption fees receivable 1,760
Other receivables 929,674
Prepaid expenses 46,703
TOTAL ASSETS 1,075,001,134
LIABILITIES
Payable for investments purchased $ 13,635,606
Payable for fund shares redeemed 2,882,497
Accrued management fee 503,612
Other payables and 911,603
accrued expenses
Collateral on securities loaned, 20,312,400
at value
TOTAL LIABILITIES 38,245,718
NET ASSETS $ 1,036,755,416
Net Assets consist of:
Paid in capital $ 789,096,207
Undistributed net investment income 4,878,205
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 52,571,210
Net unrealized appreciation (depreciation) on investments 190,209,794
NET ASSETS, for 11,621,586 shares outstanding $ 1,036,755,416
NET ASSET VALUE and redemption price per share ($1,036,755,416 (divided by) 11,621,586 shares) $89.21
Maximum offering price per share (100/97.00 of $89.21) $91.97
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 7,583,253
Dividends
Interest (including income on securities loaned of $131,422) 3,542,204
TOTAL INCOME 11,125,457
EXPENSES
Management fee $ 2,805,055
Transfer agent 3,184,785
Fees
Redemption fees (246,354
)
Accounting and security lending fees 360,962
Non-interested trustees' compensation 3,489
Custodian fees and expenses 31,573
Registration fees 46,703
Audit 41,735
Legal 3,191
Miscellaneous 7,912
Total expenses before reductions 6,239,051
Expense reductions (29,280 6,209,771
)
NET INVESTMENT INCOME 4,915,686
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 55,077,588
Foreign currency transactions (10,157 55,067,431
)
Change in net unrealized appreciation (depreciation) on investment securities 82,714,799
NET GAIN (LOSS) 137,782,230
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 142,697,916
OTHER INFORMATION $2,480,069
Sales Charges Paid to FDC
Deferred sales charges withheld $28,470
by FDC
Exchange fees withheld by FSC $184,875
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 4,915,686 $ 6,943,717
Net investment income
Net realized gain (loss) 55,067,431 79,587,152
Change in net unrealized appreciation (depreciation) 82,714,799 91,979,090
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 142,697,916 178,509,959
Distributions to shareholders (637,345) (5,882,332
From net investment income )
From net realized gain (4,592,709) (56,259,930
)
TOTAL DISTRIBUTIONS (5,230,054) (62,142,262
)
Share transactions 400,461,685 608,744,670
Net proceeds from sales of shares
Reinvestment of distributions 5,130,212 60,781,787
Cost of shares redeemed (449,648,143) (366,138,010
)
Paid in capital portion of redemption fees 202,828 495,264
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (43,853,418) 303,883,711
TOTAL INCREASE (DECREASE) IN NET ASSETS 93,614,444 420,251,408
NET ASSETS
Beginning of period 943,140,972 522,889,564
End of period (including undistributed net investment income of $4,878,205 and $2,008,371,
respectively) $ 1,036,755,416 $ 943,140,972
OTHER INFORMATION
Shares
Sold 4,811,357 8,512,762
Issued in reinvestment of distributions 65,049 871,512
Redeemed (5,643,937) (5,254,899
)
Net increase (decrease) (767,531) 4,129,375
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 76.13 $ 63.31 $ 52.57 $ 70.42 $ 69.99 $ 46.15
Income from Investment Operations
Net investment income (loss) .44 .75 .15 .13 (.02) .73 E
Net realized and unrealized gain (loss) 13.03 18.38 10.61 (9.34) 9.47 28.70
Total from investment operations 13.47 19.13 10.76 (9.21) 9.45 29.43
Less Distributions (.05) (.62) (.07) (.16) (.34) (.20)
From net investment income
From net realized gain (.36) (5.74) - (8.51) (8.81) (5.67)
Total distributions (.41) (6.36) (.07) (8.67) (9.15) (5.87)
Redemption fees added to paid in capital .02 .05 .05 .03 .13 .28
Net asset value, end of period $ 89.21 $ 76.13 $ 63.31 $ 52.57 $ 70.42 $ 69.99
TOTAL RETURN B, C 17.79% 31.24% 20.57% (14.81)% 13.92% 69.32%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 1,036,755 $ 943,141 $ 522,890 $ 536,367 $ 838,814 $ 624,018
Ratio of expenses to average net assets 1.34% A 1.36% 1.55% 1.46% A 1.44% 1.53%
Ratio of expenses to average net assets before expense 1.35% A 1.39% 1.59% 1.46% A 1.44% 1.53%
reductions
Ratio of net investment income (loss) to average net 1.06% A 1.08% .26% .24% A (.02)% 1.28%
assets
Portfolio turnover rate 54% A 151% 213% 112% A 154% 159%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.55 PER SHARE.
</TABLE>
MEDICAL DELIVERY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
MEDICAL DELIVERY 11.84% 22.28% 163.61% 254.44%
MEDICAL DELIVERY
(INCL. 3% SALES CHARGE) 8.49% 18.61% 155.70% 243.81%
S&P 500 16.81% 21.45% 102.17% 201.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 30, 1986. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
MEDICAL DELIVERY 22.28% 21.39% 14.78%
MEDICAL DELIVERY
(INCL. 3% SALES CHARGE) 18.61% 20.66% 14.40%
S&P 500 21.45% 15.12% 12.78%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Select Medical Standard & Poor'
06/30/86 9700.00 10000.00
07/31/86 9011.30 9488.77
08/31/86 9108.30 10192.84
09/30/86 8380.80 9349.89
10/31/86 9040.40 9889.38
11/30/86 8506.90 10129.69
12/31/86 7944.30 9871.39
01/31/87 8342.00 11201.06
02/28/87 8953.10 11643.50
03/31/87 9379.90 11980.00
04/30/87 8409.90 11873.38
05/31/87 8671.80 11976.68
06/30/87 9263.50 12581.50
07/31/87 9661.20 13219.38
08/31/87 9438.10 13712.46
09/30/87 9292.60 13412.16
10/31/87 6644.50 10523.18
11/30/87 6246.80 9656.07
12/31/87 6984.28 10390.90
01/31/88 7025.49 10828.35
02/29/88 7386.04 11332.96
03/31/88 7581.76 10982.77
04/30/88 7643.57 11104.68
05/31/88 7519.95 11201.29
06/30/88 7756.88 11715.43
07/31/88 7674.47 11670.91
08/31/88 7458.14 11274.10
09/30/88 7880.50 11754.37
10/31/88 8086.52 12081.14
11/30/88 7828.99 11908.38
12/31/88 8086.52 12116.78
01/31/89 8684.00 13003.73
02/28/89 9003.34 12679.94
03/31/89 9497.80 12975.38
04/30/89 10146.79 13648.80
05/31/89 10672.15 14201.58
06/30/89 10548.08 14120.63
07/31/89 11745.32 15395.72
08/31/89 12292.34 15697.48
09/30/89 12632.93 15633.12
10/31/89 12209.77 15270.43
11/30/89 12777.42 15581.95
12/31/89 12778.17 15955.91
01/31/90 10896.85 14885.27
02/28/90 11171.65 15077.29
03/31/90 11689.54 15476.84
04/30/90 11805.80 15089.92
05/31/90 13475.74 16561.19
06/30/90 14120.46 16448.57
07/31/90 14173.30 16395.93
08/31/90 13042.40 14913.74
09/30/90 12175.72 14187.44
10/31/90 12027.75 14126.44
11/30/90 13697.69 15039.00
12/31/90 14856.14 15458.59
01/31/91 17250.54 16132.59
02/28/91 18317.13 17286.07
03/31/91 21038.04 17704.39
04/30/91 20406.79 17746.88
05/31/91 22093.75 18513.55
06/30/91 20232.46 17665.63
07/31/91 22262.51 18488.84
08/31/91 22523.35 18927.03
09/30/91 22727.49 18610.95
10/31/91 23226.50 18860.33
11/30/91 22580.06 18100.26
12/31/91 26417.94 20170.93
01/31/92 26441.16 19795.75
02/29/92 25419.73 20053.10
03/31/92 23736.68 19662.06
04/30/92 22796.50 20240.13
05/31/92 22564.36 20339.30
06/30/92 21376.17 20036.25
07/31/92 22592.60 20855.73
08/31/92 22567.26 20428.19
09/30/92 19918.99 20669.24
10/31/92 20907.34 20741.58
11/30/92 22960.06 21448.87
12/31/92 22934.72 21712.69
01/31/93 21768.98 21895.08
02/28/93 18322.43 22192.85
03/31/93 18727.91 22661.12
04/30/93 18499.83 22112.72
05/31/93 19070.03 22705.34
06/30/93 19260.09 22771.19
07/31/93 19741.60 22680.10
08/31/93 19678.24 23539.68
09/30/93 21300.14 23358.43
10/31/93 22301.16 23841.94
11/30/93 22668.62 23615.45
12/31/93 24201.83 23901.19
01/31/94 25557.64 24713.83
02/28/94 25697.02 24044.09
03/31/94 24417.24 22995.77
04/30/94 25202.85 23290.11
05/31/94 26051.81 23672.07
06/30/94 24442.58 23092.10
07/31/94 25532.30 23849.53
08/31/94 28117.20 24827.36
09/30/94 29118.22 24219.09
10/31/94 30068.56 24764.01
11/30/94 28776.10 23862.11
12/31/94 29003.49 24215.98
01/31/95 30276.62 24843.91
02/28/95 30740.78 25812.07
03/31/95 32690.26 26573.79
04/30/95 31627.82 27356.38
05/31/95 30590.41 28449.82
06/30/95 31082.52 29110.71
07/31/95 34221.36 30076.02
08/31/95 34380.96 30151.51
Let's say you invested $10,000 in Fidelity Select Medical Delivery
Portfolio on June 30, 1986, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $34,381 - a
243.81% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $30,152 over the same period - a 201.52% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Columbia/HCA Healthcare Corp. 7.4
Apria Healthcare Group, Inc. 7.2
Baxter International, Inc. 7.1
Health Management Associates, Inc. Class A 6.4
Universal Health Services, Inc. Class B 5.8
Lincare Holdings, Inc. 5.0
Tenet Healthcare Corp. 4.3
HEALTHSOUTH Rehabilitation Corp. 3.6
Warner-Lambert Co. 3.0
Capstone Capital Corp. 2.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 43.0
Row: 1, Col: 2, Value: 5.9
Row: 1, Col: 3, Value: 6.5
Row: 1, Col: 4, Value: 7.7
Row: 1, Col: 5, Value: 7.8
Row: 1, Col: 6, Value: 29.1
Hospitals 29.1%
Medical Supplies &
Appliances 7.8%
Home Health Care Agencies 7.7%
Medical Services 6.5%
Drug Distributors - Wholesale 5.9%
All Others 43.0%*
* INCLUDES SHORT-TERM INVESTMENTS
MEDICAL DELIVERY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Stephen Binder,
Portfolio Manager of Fidelity Select Medical
Delivery Portfolio
Q. HOW HAS THE FUND PERFORMED, STEVE?
A. For the six months ended August 31, 1995, Select Medical Delivery
returned 11.84%. The Standard & Poor's 500 Index returned 16.81% for the
same time period. For the 12 months ended August 31, 1995, the fund
returned 22.28%, while the S&P returned 21.45%
Q. WHAT FACTORS CONTRIBUTED TO RESULTS?
A. There were several themes during the past six months. The gross
underperformance of HMO stocks had a negative impact on the fund, but was
partially offset by the strong performance of most hospital stocks.
Q. WHAT HAPPENED TO HEALTH MAINTENANCE ORGANIZATION, OR HMO, STOCKS DURING
THE PERIOD?
A. They got clobbered. Ironically, HMO enrollment growth accelerated, but
new members are much less profitable than existing, and earnings have
slowed. U.S. Healthcare, which was one of the fund's largest holdings six
months ago, hasn't held up well. Its profit margins dramatically compressed
when they cut prices in order to gain market share. This strategy backfired
and the stock collapsed. By March, I'd decreased the fund's holdings in
U.S. Healthcare nearly in half and was out of the stock completely by May.
Another disappointment was United HealthCare. It maintained its price
discipline, but enrollment growth slowed and earnings were disappointing. I
liquidated the fund's position in United HealthCare as well.
Q. DID THE FUND OWN ANY HMO STOCKS AT THE END OF AUGUST?
A. Yes, but I've cut the fund's holdings by about 75%. Oxford Health Plans
is the fund's largest HMO position. I owned it six months ago but have
added to the position during the past six months. Located in the New York
metropolitan area, Oxford is an HMO that is growing enrollment by more than
100 percent per year in a market that's under-penetrated by managed care.
In short, Oxford Health Plans is growing so rapidly it's overwhelming the
competitive pressures that are plaguing the industry.
Q. YOU SAID THE HOSPITAL STOCKS PERFORMED BETTER THAN THE HMOS AS A GROUP.
WHAT'S THE STORY THERE?
A. In contrast to HMOs, hospital stocks equaled or exceeded Wall Street
expectations. During the past six months, Columbia/HCA was up about 50%,
Health Management Associates was up about 30%, and Universal Health
Services was up about 36%. Hospitals benefited from an increase in
surgeries and outpatient visits. In general, hospital admissions have been
stronger this year than they were last year. Many hospitals have
experienced strong revenue growth, employed effective cost control
strategies and have begun to use ample free cash flow to acquire other
hospitals.
Q. OBVIOUSLY HMOS WERE THE MAJOR DISAPPOINTMENT OF THE PAST SIX MONTHS.
WHAT OTHER INVESTMENTS DIDN'T WORK OUT AS YOU WOULD HAVE LIKED?
A. Nursing homes underperformed, but fortunately the fund was not heavily
weighted in them anyway. Longer term, nursing homes are an attractive
industry, but there are a couple of near-term issues that are causing the
stocks to be more volatile than usual. One is the prospect of Medicaid
block grants to the states by the federal government. States could be
released from their obligations to make adequate reimbursements to nursing
homes for their Medicaid patients. Another is the investigation into the
level of payment to contract therapists for Medicare patients. There is a
movement afoot to reduce the rates paid to speech and occupational
therapists, which could hurt nursing home earnings.
Q. WHAT'S AHEAD FOR THE FUND?
A. I have already begun to cut back on the fund's hospital stocks that have
run up in recent months. They've had a decent move and their valuations are
no longer compelling. I'm interested in adding some HMOs again, but am
still cautious.
FUND FACTS
START DATE: June 30, 1986
TRADING SYMBOL: FSHCX
SIZE: as of August 31, 1995, more than $183
million
MANAGER: Stephen Binder, since December
1994; manager, Fidelity Select Financial
Services Portfolio 1993-1994; Fidelity Select
Defense and Aerospace Portfolio, 1992-1994;
Fidelity Select Regional Banks Portfolio,
1990-1994; joined Fidelity in 1989
(checkmark)
MEDICAL DELIVERY PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 82.9%
SHARES VALUE (NOTE 1)
CHEMICALS & PLASTICS - 1.6%
CHEMICALS - 1.6%
Grace (W.R.) & Co. 43,900 $ 2,924,833
DRUGS & PHARMACEUTICALS - 3.2%
DRUGS - 3.0%
Warner-Lambert Co. 63,500 5,738,813
IN VITRO, IN VIVO DIAGNOSTIC SUBSTANCES - 0.2%
Serologicals Corp. (a) 22,600 367,250
TOTAL DRUGS & PHARMACEUTICALS 6,106,063
ELECTRICAL EQUIPMENT - 0.0%
TV & RADIO COMMUNICATION EQUIPMENT - 0.0%
Lifeline Systems, Inc. 4,800 53,400
INSURANCE - 0.1%
INSURANCE BROKERS & SERVICES - 0.1%
HealthCare COMPARE Corp. 5,000 187,813
MEDICAL EQUIPMENT & SUPPLIES - 15.4%
DRUG DISTRIBUTORS - WHOLESALE - 5.9%
Amerisource Distribution Corp. Class A 85,000 1,933,750
Bergen Brunswig Corp. Class A 200,965 4,195,144
Cardinal Health, Inc. 50,000 2,675,000
McKesson Corp. 55,000 2,392,500
11,196,394
MEDICAL SUPPLIES & APPLIANCES - 7.8%
Baxter International, Inc. 347,300 13,544,700
Boston Scientific Corp. (a) 30,000 1,192,500
14,737,200
MEDICAL TECHNOLOGY - 0.6%
St. Jude Medical, Inc. 20,100 1,198,463
X-RAY & RELATED APPARATUS - 0.4%
Hologic, Inc. 41,400 693,450
X-RAY ELECTRO-MEDICAL APPARATUS - 0.7%
Fischer Imaging Corp. (a) 100,000 750,000
Protocol Systems, Inc. (a) 43,800 517,388
1,267,388
TOTAL MEDICAL EQUIPMENT & SUPPLIES 29,092,895
MEDICAL FACILITIES MANAGEMENT - 59.9%
HMO'S & OUTPATIENT CARE - 4.5%
Oxford Health Plans, Inc. (a) 85,200 4,174,800
Pacificare Health Systems, Inc.
Class B (a) 20,100 1,150,725
Physician Corp of America 100,000 1,600,000
Sierra Health Services, Inc. (a) 59,700 1,596,975
8,522,500
HEALTH SERVICES - 0.8%
Rotech Medical Corp. (a) 56,300 1,449,725
HOME HEALTH CARE AGENCIES - 7.7%
Apria Healthcare Group, Inc. (a) 487,800 13,658,400
Vivra, Inc. (a) 30,000 993,750
14,652,150
HOSPITALS - 29.1%
Columbia/HCA Healthcare Corp. 299,682 14,085,054
Community Psychiatric Centers 166,300 1,954,025
Health Management Associates, Inc.
Class A (a) 364,712 12,217,852
HEALTHSOUTH Rehabilitation Corp. (a) 285,200 6,737,850
Quorum Health Group, Inc. (a) 45,400 964,750
Tenet Healthcare Corp. (a) 510,800 8,108,950
SHARES VALUE (NOTE 1)
Universal Health Services, Inc.
Class B (a) 319,300 $ 10,975,938
Vencor, Inc. (a) 1,200 35,550
55,079,969
MEDICAL SERVICES - 6.5%
Laboratory Corp. of America Holdings 150,000 2,081,250
Lincare Holdings, Inc. (a) 317,900 9,497,263
Surgical Care Affiliates, Inc. 30,000 656,250
12,234,763
MISCELLANEOUS HEALTH & ALLIED SERVICES - 0.4%
Renal Treatment Centers, Inc. (a) 25,000 812,500
NURSING CARE & NURSING HOMES - 3.9%
Arbor Health Care Co. (a) 17,000 365,500
Health Care & Retirement Corp. (a) 40,000 1,260,000
Integrated Health Services, Inc. 91,100 2,721,613
Manor Care, Inc. 95,000 3,075,625
7,422,738
PSYCHIATRIC HOSPITALS - 0.6%
Horizon Mental Health
Management, Inc. (a) 75,300 1,129,500
SKILLED NURSING CARE FACILITIES - 5.5%
Beverly Enterprises, Inc. (a) 65,000 861,250
Hillhaven Corp. (a) 86,900 2,422,338
Horizon/CMS Healthcare Corp. (a) 80,955 1,770,891
Multicare Companies, Inc. (a) 166,100 3,550,388
TheraTx, Inc. (a) 140,400 1,860,300
10,465,167
SPECIALTY OUTPATIENT CLINICS - 0.9%
Foundation Health Corp. (a) 50,000 1,731,250
TOTAL MEDICAL FACILITIES MANAGEMENT 113,500,262
REAL ESTATE INVESTMENT TRUSTS - 2.3%
Capstone Capital Corp. (b) 247,400 4,422,275
SERVICES - 0.4%
BUILDING MAINTENANCE - 0.0%
Health Care Services Group, Inc. 1,004 11,170
MANAGEMENT SERVICES - 0.4%
Emcare Holdings (a) 39,200 764,400
TOTAL SERVICES 775,570
TOTAL COMMON STOCKS
(Cost $128,559,149) 157,063,111
REPURCHASE AGREEMENTS - 17.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 32,388,235 32,383,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $160,942,149) $ 189,446,111
LEGEND
1. Non-income producing
2. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Capstone Capital Corp. $ - $ 1,200,956 $ 234,151 $ 4,422,275
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $65,150,649 and $183,628,625, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $61,720 for the period (see
Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $1,731,250 and $1,800,000, respectively (see Note 7
of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $1,760,000 and $945,700,
respectively. The weighted average interest rate paid was 6.2% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $160,942,149. Net unrealized appreciation aggregated
$28,503,962, of which $29,674,359 related to appreciated investment
securities and $1,170,397 related to depreciated investment securities.
MEDICAL DELIVERY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $32,383,000) (cost $160,942,149) - $ 189,446,111
See accompanying schedule
Cash 815
Receivable for investments sold 2,320,615
Receivable for fund shares sold 403,814
Dividends receivable 114,906
Redemption fees receivable 209
Other receivables 322,714
Prepaid expenses 19,241
TOTAL ASSETS 192,628,425
LIABILITIES
Payable for investments purchased $ 3,024,417
Payable for fund shares redeemed 4,063,404
Accrued management fee 95,153
Other payables and 262,002
accrued expenses
Collateral on securities loaned, 1,800,000
at value
TOTAL LIABILITIES 9,244,976
NET ASSETS $ 183,383,449
Net Assets consist of:
Paid in capital $ 134,779,342
Accumulated net investment (loss) (104,940
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 20,205,085
Net unrealized appreciation (depreciation) on investments 28,503,962
NET ASSETS, for 7,095,261 $ 183,383,449
shares outstanding
NET ASSET VALUE and redemption price per share ($183,383,449 (divided by) 7,095,261 shares) $25.85
Maximum offering price per share (100/97.00 of $25.85) $26.65
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 847,172
Dividends (including $234,151 received from affiliated issuers)
Interest (including income on securities loaned of $138,325) 588,029
TOTAL INCOME 1,435,201
EXPENSES
Management fee $ 598,094
Transfer agent 972,681
Fees
Redemption fees (162,493
)
Accounting and security lending fees 99,201
Non-interested trustees' compensation 1,043
Custodian fees and expenses 8,555
Registration fees 19,241
Audit 22,142
Legal 979
Interest 1,624
Miscellaneous 2,319
Total expenses before reductions 1,563,386
Expense reductions (23,245 1,540,141
)
NET INVESTMENT INCOME (LOSS) (104,940
)
REALIZED AND UNREALIZED GAIN (LOSS) 20,184,940
Net realized gain (loss) on investment securities (including realized gain (loss) of $(177,843) on sales of
investment in affiliated issuers)
Change in net unrealized appreciation (depreciation) on investment securities (3,146,218
)
NET GAIN (LOSS) 17,038,722
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 16,933,782
OTHER INFORMATION $649,615
Sales Charges Paid to FDC
Deferred sales charges withheld $2,504
by FDC
Exchange fees withheld by FSC $131,138
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (104,940 $ 620,837
Net investment income (loss) )
Net realized gain (loss) 20,184,940 25,519,856
Change in net unrealized appreciation (depreciation) (3,146,218 5,905,629
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 16,933,782 32,046,322
Distributions to shareholders - (620,837
From net investment income )
From net realized gain (700,387 (9,893,316
) )
TOTAL DISTRIBUTIONS (700,387 (10,514,153
) )
Share transactions 137,076,585 408,339,151
Net proceeds from sales of shares
Reinvestment of distributions 685,465 10,314,005
Cost of shares redeemed (270,397,857 (329,680,344
) )
Paid in capital portion of redemption fees 216,013 512,240
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS (132,419,794 89,485,052
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (116,186,399 111,017,221
)
NET ASSETS
Beginning of period 299,569,848 188,552,627
End of period (including accumulated net investment loss of $104,940 and $0, respectively) $ 183,383,449 $ 299,569,848
OTHER INFORMATION
Shares
Sold 5,577,687 18,773,290
Issued in reinvestment of distributions 28,359 506,086
Redeemed (11,434,845 (15,651,245
) )
Net increase (decrease) (5,828,799) 3,628,131
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.18 $ 20.28 $ 14.46 $ 19.64 $ 18.75 $ 11.17
Income from Investment Operations
Net investment income (loss) (.01) .06 (.10) (.13) (.15) (.01)
Net realized and unrealized gain (loss) 2.72 3.74 5.84 (3.56) 2.16 7.76
Total from investment operations 2.71 3.80 5.74 (3.69) 2.01 7.75
Less Distributions - (.06) E - - - -
From net investment income
From net realized gain (.07) (.89) E - (1.55) (1.24) (.39)
Total distributions (.07) (.95) - (1.55) (1.24) (.39)
Redemption fees added to paid in capital .03 .05 .08 .06 .12 .22
Net asset value, end of period $ 25.85 $ 23.18 $ 20.28 $ 14.46 $ 19.64 $ 18.75
TOTAL RETURN B, C 11.84% 19.63% 40.25% (19.63)% 11.71% 72.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 183,383 $ 299,570 $ 188,553 $ 71,809 $ 129,361 $ 131,622
Ratio of expenses to average net assets 1.56% A 1.45% 1.79% 1.77% A 1.69% 1.94%
Ratio of expenses to average net assets before expense 1.58% A 1.48% 1.82% 1.77% A 1.69% 1.94%
reductions
Ratio of net investment income (loss) to average net (.11)% .29% (.57)% (.89)% (.71)% (.07)%
assets A A
Portfolio turnover rate 70% A 123% 164% 155% A 181% 165%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
COMPUTERS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
COMPUTERS 55.75% 69.69% 371.03% 478.79%
COMPUTERS
(INCL. 3% SALES CHARGE) 51.08% 64.60% 356.90% 461.43%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
COMPUTERS 69.69% 36.34% 19.19%
COMPUTERS
(INCL. 3% SALES CHARGE) 64.60% 35.51% 18.83%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select CompuStandard & Poor
08/31/85 9700.00 10000.00
09/30/85 9275.63 9687.00
10/31/85 9831.35 10134.54
11/30/85 10912.50 10829.77
12/31/85 11478.33 11353.93
01/31/86 11609.69 11417.51
02/28/86 12215.94 12271.54
03/31/86 12215.94 12956.29
04/30/86 13438.54 12809.89
05/31/86 13963.96 13491.37
06/30/86 13034.38 13719.38
07/31/86 11012.24 12952.46
08/31/86 12087.10 13913.54
09/30/86 11154.21 12762.89
10/31/86 12249.35 13499.31
11/30/86 12330.47 13827.34
12/31/86 12381.17 13474.74
01/31/87 14845.24 15289.79
02/28/87 16325.70 15893.74
03/31/87 16437.25 16353.07
04/30/87 16832.71 16207.52
05/31/87 16761.73 16348.53
06/30/87 16416.97 17174.13
07/31/87 16690.75 18044.86
08/31/87 17836.59 18717.93
09/30/87 17988.69 18308.01
10/31/87 11640.94 14364.46
11/30/87 10069.21 13180.83
12/31/87 11594.96 14183.89
01/31/88 10988.55 14781.03
02/29/88 11981.81 15469.83
03/31/88 11793.61 14991.81
04/30/88 12400.02 15158.22
05/31/88 12034.09 15290.10
06/30/88 13173.72 15991.91
07/31/88 12180.46 15931.15
08/31/88 11019.92 15389.49
09/30/88 11312.67 16045.08
10/31/88 10403.05 16491.13
11/30/88 10340.32 16255.31
12/31/88 11009.46 16539.78
01/31/89 11657.69 17750.49
02/28/89 11448.59 17308.50
03/31/89 10904.91 17711.79
04/30/89 12128.18 18631.03
05/31/89 13205.08 19385.59
06/30/89 11636.78 19275.09
07/31/89 11845.89 21015.63
08/31/89 12023.63 21427.54
09/30/89 12305.93 21339.68
10/31/89 11898.17 20844.60
11/30/89 11636.78 21269.83
12/31/89 11762.25 21780.31
01/31/90 11657.69 20318.85
02/28/90 12713.68 20580.96
03/31/90 13623.30 21126.36
04/30/90 13257.36 20598.20
05/31/90 14982.49 22606.52
06/30/90 15254.33 22452.80
07/31/90 14166.97 22380.95
08/31/90 11919.08 20357.71
09/30/90 11134.93 19366.29
10/31/90 11553.14 19283.02
11/30/90 13456.01 20528.70
12/31/90 13927.29 21101.45
01/31/91 16301.26 22021.47
02/28/91 17356.36 23596.01
03/31/91 18727.99 24167.03
04/30/91 17514.63 24225.03
05/31/91 18400.91 25271.56
06/30/91 15895.32 24114.12
07/31/91 17492.46 25237.84
08/31/91 18578.95 25835.97
09/30/91 17601.11 25404.51
10/31/91 17253.43 25744.93
11/30/91 16069.16 24707.41
12/31/91 18209.54 27533.94
01/31/92 20110.90 27021.81
02/29/92 21490.74 27373.09
03/31/92 19795.82 26839.32
04/30/92 19154.79 27628.39
05/31/92 19393.82 27763.77
06/30/92 17525.06 27350.09
07/31/92 18383.38 28468.71
08/31/92 17329.49 27885.10
09/30/92 18187.81 28214.15
10/31/92 19621.98 28312.90
11/30/92 20838.85 29278.37
12/31/92 22207.82 29638.49
01/31/93 23500.74 29887.45
02/28/93 21892.74 30293.92
03/31/93 22327.34 30933.12
04/30/93 21693.21 30184.54
05/31/93 24234.87 30993.49
06/30/93 23265.02 31083.37
07/31/93 24234.87 30959.04
08/31/93 25672.90 32132.38
09/30/93 26397.50 31884.96
10/31/93 26397.50 32544.98
11/30/93 27523.40 32235.80
12/31/93 28618.76 32625.86
01/31/94 30463.99 33735.14
02/28/94 31756.83 32820.92
03/31/94 31427.74 31389.92
04/30/94 31227.94 31791.71
05/31/94 31204.43 32313.10
06/30/94 28642.26 31521.43
07/31/94 29547.25 32555.33
08/31/94 33084.93 33890.10
09/30/94 32849.86 33059.79
10/31/94 34083.94 33803.64
11/30/94 34283.74 32572.51
12/31/94 34471.79 33055.56
01/31/95 33414.01 33912.69
02/28/95 36046.70 35234.27
03/31/95 38820.43 36274.03
04/30/95 41904.83 37342.30
05/31/95 43976.26 38834.87
06/30/95 48785.79 39737.01
07/31/95 54916.76 41054.68
08/31/95 56142.95 41157.73
Let's say you invested $10,000 in Fidelity Select Computers Portfolio on
August 31, 1985, and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $56,143 - a 461.43% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Micron Technology, Inc. 9.0
Compaq Computer Corp. 5.0
Nippon Steel Semiconductor Corp. 3.8
SGS-Thomson Microelectronic NV 2.5
Structural Dynamics Research Corp. 2.4
Digital Equipment Corp. 2.3
Sun Microsystems, Inc. 2.1
International Business Machines Corp. 2.1
LSI Logic Corp. 2.0
Apple Computer, Inc. 2.0
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 43.7
Row: 1, Col: 2, Value: 4.2
Row: 1, Col: 3, Value: 5.5
Row: 1, Col: 4, Value: 6.2
Row: 1, Col: 5, Value: 9.4
Row: 1, Col: 6, Value: 31.0
Semiconductors 31.0%
Mini & Micro Computers 9.4%
Electronic Equipment 6.2%
Electronic Computers 5.5%
Prepackaged Computer
Software 4.2%
All Others 43.7%*
* INCLUDES SHORT-TERM INVESTMENTS
COMPUTERS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Harry Lange,
Portfolio Manager of Fidelity Select Computers Portfolio
Q. HARRY, HOW DID THE FUND PERFORM?
A. It's been a strong six months for computer-related stocks. The fund had
a total return of 55.75% from March 1, 1995, through August 31, 1995.
During the same period, the S&P 500 returned 16.81%. For the 12 months
ended August 31, 1995, the fund rose 69.69%, while the S&P 500 was up
21.45%.
Q. HOW DID THE FUND SO HANDILY TOP THE RETURNS OF THE BROAD MARKET?
A. Over the past six months, the technology sector has shown the strongest
earnings gains and stock performance in the market, and computer and
semiconductor stocks - which make up most of this fund - have led the
technology rally. Essentially, the story hasn't changed much. The 20%-plus
growth of the personal computer industry has continued uninterrupted.
Businesses have continued to embrace PCs to improve productivity, while
consumers have continued to be enamored with the ever-growing capabilities
of computers and software products. If ever there were a time that PC
growth would have slowed, it would have been in advance of Microsoft's
release of its new PC software program, Windows 95; it's simply such a
large-scale product transition. However, the growth continued right through
the release, and it even appears to be accelerating as we look to year-end
and the holiday season.
Q. LET'S START WITH COMPUTER STOCKS. WHICH PROVED SUCCESSFUL?
A. Compaq Computer - the fund's second largest investment at the end of the
period - made solid gains. Compaq launched a new product line earlier this
year, and the stock hesitated for a time as investors waited to see how the
transition would go. Ultimately, the transition was successful, and the
stock rose quickly from mid-April through August. IBM was another strong
performer. The company had huge up-side earnings surprises in the first two
quarters of 1995. Overall revenues were strong and a multi-year
cost-cutting effort boosted profits.
Q. HOW ABOUT THE SEMICONDUCTOR COMPANIES?
A. Broadly speaking, worldwide demand for computer chips has far
outstripped existing supply, which has helped keep prices steady and
earnings strong. Micron Technology - the fund's largest investment at the
end of the period - made, by far, the strongest positive contribution to
the fund's performance over the past six months. The company has back
orders for its DRAMs - or memory chips - for the next six months at
constant prices. And Windows 95 requires greater memory power, which should
further boost demand for Micron's products. In addition, Micron has
developed ways to produce a far greater number of chips at little
additional cost, which should enhance profits going forward. Other
semiconductor companies that helped the fund included Texas Instruments,
Intel, LSI Logic, and SGS-Thomson Microelectric. Also, I've made a small
investment - less than 5% of the fund - in Japanese semiconductor
manufacturers. Nippon Steel Semiconductor is a good example of a Japanese
company benefiting from the same worldwide supply/demand dynamics as the
U.S. companies, but whose stock was significantly cheaper.
Q. WHICH STOCKS DIDN'T PERFORM AS WELL AS YOU HAD HOPED?
A. Fortunately, most of the few disappointments were among the fund's
smaller holdings. The exception was Amdahl, which manufactures mainframe
computers. The company had trouble producing its next generation of disk
drives, which led to lower-than-expected earnings.
Q. LET'S TURN TO YOUR OUTLOOK. CAN THESE STOCKS CONTINUE TO OUTPERFORM THE
REST OF THE MARKET?
A. It's a good possibility, though these stocks are historically volatile,
and a 10% to 15% correction can occur at any time. But, overall, I'm
optimistic about the fund's prospects through the end of the year and into
1996. There seems to be no let-up in the demand for PCs and related
products, with a greater share of the new demand coming from overseas
countries that are increasingly making the transition to computer-based
operations. In addition, although these stocks are somewhat more expensive
than they were six months ago, their valuations - prices relative to
earnings - generally are still quite attractive. Of course, if earnings for
these companies come in below expectations at any point during the rest of
the year, investors who have been looking for a reason to sell will
certainly have found it.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FDCPX
SIZE: as of August 31, 1995, more than
$598 million
MANAGER: Harry Lange, since 1992; manager,
Fidelity Select Technology Portfolio since
1993; Fidelity Select Electronics Portfolio,
January 1994-March 1995; research director,
Fidelity Investments Far East 1988-1992;
manager, Fidelity Select Capital Goods Portfolio,
and Fidelity Select Automation and Machinery
Portfolio, 1988; joined Fidelity in 1987
(checkmark)
COMPUTERS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 85.2%
SHARES VALUE (NOTE 1)
BROADCASTING - 0.2%
CABLE TV OPERATORS - 0.2%
Heartland Wireless
Communications, Inc. (a) 50,000 $ 1,087,500
COMMUNICATIONS EQUIPMENT - 4.2%
DATACOMMUNICATIONS EQUIPMENT - 1.1%
Cisco Systems, Inc. (a) 70,000 4,593,750
General DataComm Industries, Inc. (a) 100,000 1,175,000
3Com Corp. (a) 20,000 780,000
6,548,750
TELEPHONE EQUIPMENT - 3.1%
Colonial Data Technologies, Inc. (a) 50,000 906,250
DSC Communications Corp. (a) 11,000 577,500
Data Race, Inc. (a) 35,000 225,313
Global Village Communication (a) 20,000 312,500
Natural Microsystems (a) 87,700 2,170,575
Network Equipment Technologies (a) 61,700 2,313,750
Newbridge Networks Corp. (a) 13,900 401,363
Nokia Corp. AB sponsored ADR 100,000 6,937,500
Perceptron, Inc. (a) 130,600 3,526,200
Target Technologies, Inc. (a) 70,000 455,000
U.S. Robotics Corp. 8,032 1,126,488
18,952,439
TOTAL COMMUNICATIONS EQUIPMENT 25,501,189
COMPUTER SERVICES & SOFTWARE - 7.7%
CAD/CAM/CAE - 2.7%
Brooktrout Technology (a) 17,100 329,175
Chipcom Corp. (a) 30,000 1,203,750
Integrated Silicon Systems, Inc. (a) 1,000 28,500
Structural Dynamics Research Corp. (a) 800,000 14,500,000
Tecnomatix Technologies (a) 7,500 78,750
Viewlogic Systems, Inc. (a) 20,000 260,000
16,400,175
COMPUTER & SOFTWARE STORES - 0.4%
MicroAge, Inc. (a) 192,800 2,265,400
COMPUTER RELATED SERVICES - 0.2%
Inso Corp. (a) 20,800 1,302,600
COMPUTER SERVICES - 0.2%
CompuCom Systems, Inc. (a) 50,000 268,750
Datastream Systems, Inc. (a) 20,000 630,000
898,750
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.0%
Harris Computer Systems Corp. (a) 9,100 133,088
ELECTRONIC INFORMATION RETRIEVAL - 0.0%
Data Broadcasting Corp. (a) 15,000 133,125
PREPACKAGED COMPUTER SOFTWARE - 4.2%
Broderbund Software, Inc. (a) 20,000 1,472,500
CBT Group PLC sponsored ADR (a) 21,000 829,500
Delrina Corp. (a) 10,000 167,417
Fuji Soft, Inc. 13,000 305,490
Geoworks (a) 94,200 1,201,050
Globalink, Inc. (a) 174,300 1,786,575
Inference Corp. Class A (a) 600 10,800
Learning Co. (a) 10,000 585,000
National Instrument Corp. (a) 51,000 1,102,875
Novell, Inc. (a) 27,000 486,000
Oracle Systems Corp. (a) 30,000 1,203,750
Parcplace Systems, Inc. (a) 15,000 150,000
Softkey International, Inc. (a) 278,900 11,121,138
SHARES VALUE (NOTE 1)
Systems & Computer Technology
Corp. (a) 106,400 $ 2,832,900
Systems Software Associates, Inc. 68,500 2,162,031
Wonderware Corp. (a) 4,000 138,000
25,555,026
TOTAL COMPUTER SERVICES & SOFTWARE 46,688,164
COMPUTERS & OFFICE EQUIPMENT - 25.6%
COMPUTER EQUIPMENT - 0.5%
GVC Corp. GDR (a)(b) 324,000 2,835,000
COMPUTER EQUIPMENT - WHOLESALE - 0.9%
GBC Technologies, Inc. (a) 249,200 1,962,450
Merisel, Inc. (a) 278,800 1,777,350
Southern Electronics Corp. (a) 20,000 125,000
Tech Data Corp. (a) 158,300 1,879,813
5,744,613
COMPUTER PERIPHERALS - 1.7%
In Focus Systems, Inc. (a) 100,000 3,112,500
Key Tronic Corp. (a) 357,500 5,451,875
Komag, Inc. (a) 19,700 1,226,325
Liuski International, Inc. (a) 22,500 98,438
Plannar Systems, Inc. (a) 5,000 100,000
Western Digital Corp. (a) 6,200 127,875
10,117,013
COMPUTER RENTAL & LEASING - 1.5%
Comdisco, Inc. 297,200 9,064,600
COMPUTER STORAGE DEVICES - 2.0%
ADAPTEC, Inc. (a) 1,800 76,500
Hutchinson Technology, Inc. (a) 122,100 9,554,325
Maxtor Corp. (a) 110,000 598,125
Read Rite Corp. (a) 10,300 421,013
Seagate Technology (a) 34,000 1,504,500
12,154,463
COMPUTERS - 1.2%
Gateway 2000, Inc. (a) 270,800 7,210,050
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Canon, Inc. 15,000 272,447
Data General Corp. (a) 59,400 579,150
Diebold, Inc. 35,000 1,631,875
2,483,472
ELECTRONIC COMPUTERS - 3.7%
Bay Networks, Inc. (a) 40,000 1,900,000
Hewlett-Packard Co. (a) 100,000 8,000,000
International Business Machines Corp. 122,600 12,673,775
22,573,775
GRAPHICS WORKSTATIONS - 2.5%
Silicon Graphics, Inc. (a) 58,000 2,450,500
Sun Microsystems, Inc. (a) 223,400 12,929,275
15,379,775
MAGNETIC & OPTICAL RECORDING MEDIA - 0.5%
Boca Research, Inc. (a) 120,000 2,850,000
MAINFRAME COMPUTERS - 1.2%
Amdahl Corp. (a) 820,100 7,483,413
MINI & MICRO COMPUTERS - 9.4%
Apple Computer, Inc. 280,000 12,040,000
Compaq Computer Corp. (a) 633,400 30,244,850
Digital Equipment Corp. (a) 333,800 13,936,150
Tandem Computers, Inc. (a) 60,000 735,000
56,956,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
OFFICE AUTOMATION - 0.1%
Filenet Corp. (a) 13,000 $ 594,750
TOTAL COMPUTERS & OFFICE EQUIPMENT 155,446,924
CONSUMER ELECTRONICS - 0.0%
RADIOS, TELEVISIONS, STEREOS - 0.0%
Foster Electric Co. Ltd. 20,000 110,826
Odetics, Inc. Class A (a) 26,000 130,000
240,826
ELECTRICAL EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.0%
Fusion Systems Corp. (a) 7,500 213,750
TV & RADIO COMMUNICATION EQUIPMENT - 0.1%
Avid Technology, Inc. (a) 500 19,875
Leitch Technology (a) 20,000 303,211
323,086
TOTAL ELECTRICAL EQUIPMENT 536,836
ELECTRONIC INSTRUMENTS - 10.3%
ELECTRONIC EQUIPMENT - 6.2%
Advantest Corp. 84,000 4,844,330
ASECO Corp. (a) 63,200 1,169,200
Credence Systems Corp. (a) 174,600 6,154,650
Fluke (John) Mfg. Co., Inc. 98,700 3,799,950
GenRad, Inc. (a) 51,500 424,875
LTX Corp. (a) 990,000 11,261,250
Megatest Corp. (a) 355,200 8,569,200
Micro Component Technology, Inc. (a) 200 1,200
Mosaid Technologies, Inc. (a) 107,400 1,448,435
37,673,090
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 4.1%
Applied Materials, Inc. (a) 51,600 5,366,400
Electro Scientific Industries, Inc. (a) 79,500 2,683,125
KLA Instruments Corp. (a) 70,700 6,044,850
Lam Research Corp. (a) 10,000 602,500
Silicon Valley Group, Inc. (a) 240,700 10,350,100
25,046,975
TOTAL ELECTRONIC INSTRUMENTS 62,720,065
ELECTRONICS - 33.4%
ELECTRONIC CAPACITORS - 0.2%
AVX Corp. (a) 32,000 1,016,000
ELECTRONIC PARTS - WHOLESALE - 0.1%
Pioneer Standard Electronics, Inc. 4,950 127,463
Sterling Electronics Corp. (a) 32,800 643,700
771,163
ELECTRONICS & ELECTRONIC COMPONENTS - 3.6%
Cirrus Logic, Inc. (a) 190,000 10,355,000
Kyocera Corp. (warrants) (a) 4,000 7,900,000
Photronics, Inc. (a) 65,000 2,273,985
Sanmina Corp. (a) 10,000 455,000
Smartflex Systems, Inc. (a) 3,000 54,750
Solectron Corp. (a) 30,800 1,093,400
22,132,135
SEMICONDUCTORS - 29.5%
Act Manufacturing, Inc. 13,000 251,875
Alliance Semiconductor Corp. (a) 22,500 880,313
Altera Corp. (a) 11,600 726,450
Atmel Corp. (a) 43,000 1,359,875
SHARES VALUE (NOTE 1)
Austria Mikro Systeme International (a) 10,000 $ 1,754,590
Burr-Brown Corp. (a) 331,900 10,952,700
Catalyst Semiconductor, Inc. (a) 65,600 344,400
Cypress Semiconductor Corp. (a) 10,100 460,813
Electroglas, Inc. (a) 20,600 1,555,300
Genus, Inc. (a) 100,000 1,375,000
Geotek Industries, Inc. (a) 80,000 625,000
IMP, Inc. (a) 260,000 1,430,000
Information Storage Devices (a) 600 16,350
Integrated Device Technology, Inc. (a) 56,200 3,238,525
Integrated Silicon Solution (a) 48,000 2,388,000
International Rectifier Corp. (a) 4,000 162,000
Interpoint Corp. (a) 10,000 110,000
LSI Logic Corp. (a) 245,600 12,095,800
Lattice Semiconductor Corp. (a) 26,000 854,750
Linear Technology Corp. 10,000 810,000
Logic Devices, Inc. (a) 30,000 356,250
Micro Linear Corp. (a) 118,300 1,863,225
Micron Technology, Inc. 713,300 54,834,938
National Semiconductor Corp. (a) 343,600 9,706,700
Nippon Steel Semiconductor Corp. (a) 850 23,288,859
Quality Semiconductor, Inc. (a) 92,400 1,593,900
SGS-Thomson Microelectronic NV (a) 315,900 15,202,688
S-3, Inc. (a) 72,400 2,841,700
Samsung Electronics Co. Ltd.:
(vtg.) (a) 1,062 106,200
GDR (non-vtg.) (a) 14,168 887,625
GDR partial dividend (a)(b) 980 98,000
GDR representing shares (a)(b) 1,287 128,224
GDR representing shares
(non-vtg.) (a)(b) 11,809 739,834
GDR (vtg.) (a) 87 8,700
GDR (vtg.) (New) (a) 18 1,793
GDR (vtg.) (b) 6,507 650,700
GDS (b) 59,675 3,759,525
GDS (non-vtg.) (Reg.)(a) 71,600 4,510,800
Siliconix, Inc. (a) 600 18,300
Supertex, Inc. (a) 20,000 220,000
Tencor Instruments (a) 48,400 2,099,350
Texas Instruments, Inc. 58,600 4,387,675
Tokyo Electron Ltd. 105,000 4,245,254
Tower Semiconductor Ltd. (a) 30,000 933,750
Uniphase Corp. (a) 14,300 452,238
Xilinx, Inc. (a) 114,000 4,887,750
179,215,719
TOTAL ELECTRONICS 203,135,017
INDUSTRIAL MACHINERY & EQUIPMENT - 2.1%
SPECIAL INDUSTRIAL MACHINERY - 2.1%
Fuji Machine Manufacturing Co.
Ltd. Ord. 30,000 1,145,203
Gasonics International Corp. (a) 65,800 2,286,550
PRI Automation, Inc. (a) 67,500 2,548,125
Tylan General, Inc. (a) 175,000 2,931,250
Veeco Instruments, Inc. (a) 160,800 3,618,000
12,529,128
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
LEASING & RENTAL - 0.0%
EQUIPMENT RENTAL & LEASING - 0.0%
Leasing Solutions, Inc. (a) 14,000 $ 173,250
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
MEDICAL SUPPLIES & APPLIANCES - 0.1%
Steris Corp. (a) 20,000 587,500
METALS & MINING - 0.7%
METAL ORES - 0.7%
Sumitomo Sitix Corp. 300,000 4,556,184
PRINTING - 0.8%
COMMERCIAL PRINTING, LITHOGRAPHIC - 0.8%
ASM Lithography Holding NV (a) 109,300 5,150,763
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
STATIONARY & OFFICE SUPPLIES - WHOLESALE - 0.0%
Daisytek International Corp. (a) 1,000 23,500
SERVICES - 0.0%
ELECTRICAL REPAIR SHOPS - 0.0%
Cerplex Group, Inc. (a) 20,000 120,000
TOTAL COMMON STOCKS
(Cost $374,120,038) 518,496,846
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
COMPUTER SERVICES & SOFTWARE - 0.0%
PREPACKAGED COMPUTER SOFTWARE - 0.0%
SAP AG (cost $122,656) 2,000 295,913
CONVERTIBLE BONDS - 3.4%
PRINCIPAL
AMOUNT
COMPUTERS & OFFICE EQUIPMENT - 1.9%
ELECTRONIC COMPUTERS - 1.8%
Acer, Inc. 4%, 6/10/01 $ 3,570,000 10,888,500
OFFICE EQUIPMENT - WHOLESALE - 0.1%
Kinpo Electronics, Inc. euro 3%,
7/21/01 950,000 717,250
TOTAL COMPUTERS & OFFICE EQUIPMENT 11,605,750
ELECTRONICS - 1.5%
SEMICONDUCTORS - 1.5%
United Microelectronics Corp.:
1 1/4%, 6/8/04 (b) 1,070,000 1,789,575
euro 1 1/4%, 6/8/04 4,330,000 7,241,925
9,031,500
TOTAL CONVERTIBLE BONDS
(Cost $17,457,228) 20,637,250
REPURCHASE AGREEMENTS - 11.4%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 69,292,200 $ 69,281,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $460,980,922) $ 608,711,009
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $10,000,858 or 1.7% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $306,365,802 and $150,084,631, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $50,235 for the period (see
Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $8,559,325 and $8,556,000, respectively (see Note 7
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 84.0%
Japan 4.9
Taiwan (Free China) 3.9
Netherlands 3.3
Korea 1.8
Finland 1.1
Others (individually less than 1%) 1.0
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $461,606,190. Net unrealized appreciation aggregated
$147,104,819, of which $157,344,242 related to appreciated investment
securities and $10,239,423 related to depreciated investment securities.
COMPUTERS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $69,281,000) (cost $460,980,922) - $ 608,711,009
See accompanying schedule
Receivable for investments sold 14,048,811
Receivable for fund shares sold 5,273,190
Dividends receivable 112,516
Interest receivable 16,487
Redemption fees receivable 690
Other receivables 49,240
Prepaid expenses 14,215
TOTAL ASSETS 628,226,158
LIABILITIES
Payable to custodian bank $ 6,170
Payable for investments purchased 5,337,021
Payable for fund shares redeemed 14,898,869
Accrued management fee 302,926
Other payables and 1,097,892
accrued expenses
Collateral on securities loaned, 8,556,000
at value
TOTAL LIABILITIES 30,198,878
NET ASSETS $ 598,027,280
Net Assets consist of:
Paid in capital $ 411,248,810
Accumulated net investment (loss) (1,137,882
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 40,186,392
Net unrealized appreciation (depreciation) on investments 147,729,960
and assets and liabilities in
foreign currencies
NET ASSETS, for 12,680,993 $ 598,027,280
shares outstanding
NET ASSET VALUE and redemption price per share ($598,027,280 (divided by) 12,680,993 shares) $47.16
Maximum offering price per share (100/97.00 of $47.16) $48.62
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 389,784
Dividends
Interest (including income on securities loaned of $49,012) 1,295,609
TOTAL INCOME 1,685,393
EXPENSES
Management fee $ 1,248,771
Transfer agent 1,367,450
Fees
Redemption fees (123,992
)
Accounting and security lending fees 200,740
Non-interested trustees' compensation 918
Custodian fees and expenses 17,170
Registration fees 87,085
Audit 17,853
Legal 768
Miscellaneous 2,323
Total expenses before reductions 2,819,086
Expense reductions (17,794 2,801,292
)
NET INVESTMENT INCOME (LOSS) (1,115,899
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 41,613,400
Foreign currency transactions 90 41,613,490
Change in net unrealized appreciation (depreciation) on:
Investment securities 129,197,820
Assets and liabilities in (155 129,197,665
foreign currencies )
NET GAIN (LOSS) 170,811,155
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 169,695,256
OTHER INFORMATION $4,607,027
Sales Charges Paid to FDC
Deferred sales charges withheld $5,877
by FDC
Exchange fees withheld by FSC $89,655
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (1,115,899 $ (1,469,757
Net investment income (loss) ) )
Net realized gain (loss) 41,613,490 3,564,127
Change in net unrealized appreciation (depreciation) 129,197,665 2,952,740
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 169,695,256 5,047,110
Distributions to shareholders from net realized gains (3,461,715 -
)
Share transactions 470,147,822 529,347,764
Net proceeds from sales of shares
Reinvestment of distributions 3,418,258 -
Cost of shares redeemed (257,243,074 (441,147,769
) )
Paid in capital portion of redemption fees 456,933 1,332,121
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 216,779,939 89,532,116
TOTAL INCREASE (DECREASE) IN NET ASSETS 383,013,480 94,579,226
NET ASSETS
Beginning of period 215,013,800 120,434,574
End of period (including accumulated net investment loss of $1,137,882 and $21,983, respectively) $ 598,027,280 $ 215,013,800
OTHER INFORMATION
Shares
Sold 12,018,644 18,730,329
Issued in reinvestment of distributions 105,048 -
Redeemed (6,453,942 (16,175,513
) )
Net increase (decrease) 5,669,750 2,554,816
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 30.67 $ 27.02 $ 20.15 $ 17.63 $ 16.60 $ 12.68
Income from Investment Operations
Net investment income (loss) (.11) (.31) (.21) E (.15) (.03) G .42 F
Net realized and unrealized gain (loss) 16.98 3.68 8.66 2.44 1.18 3.21
Total from investment operations 16.87 3.37 8.45 2.29 1.15 3.63
Less Distributions - - - - - (.12)
From net investment income
In excess of net investment income - - - - (.27) -
From net realized gain (.42) - (1.80) - (.22) -
Total distributions (.42) - (1.80) - (.49) (.12)
Redemption fees added to paid in capital .04 .28 .22 .23 .37 .41
Net asset value, end of period $ 47.16 $ 30.67 $ 27.02 $ 20.15 $ 17.63 $ 16.60
TOTAL RETURN B, C 55.75% 13.51% 45.06% 14.29% 9.36% 32.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 598,027 $ 215,014 $ 120,435 $ 47,596 $ 32,810 $ 29,455
Ratio of expenses to average net assets 1.35% A 1.69% 1.89% 1.81% A 2.17% 2.26%
Ratio of expenses to average net assets before 1.36% A 1.71% 1.90% 1.81% A 2.17% 2.26%
expense reductions
Ratio of net investment income (loss) to average net (.54)% (1.12)% (.91)% (.98)% (.18)% 2.94%
assets A A
Portfolio turnover rate 80% A 189% 145% 254% A 568% 695%
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO
FINANCIAL STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D NET
INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. E INVESTMENT INCOME PER SHARE
REFLECTS A SPECIAL DIVIDEND FROM INTELLIGENT ELECTRONICS WHICH AMOUNTED
TO $.07 PER SHARE. F INVESTMENT INCOME PER SHARE REFLECTS SPECIAL
DIVIDENDS
WHICH AMOUNTED TO $.08 PER SHARE AND $.36 PER SHARE RELATING TO A
NONRECURRING INITIATIVE TO INVEST IN DIVIDEND INCOME PRODUCING
SECURITIES WHICH WAS IN
EFFECT FOR A PORTION OF 1991. G INVESTMENT INCOME PER SHARE REFLECTS A
SPECIAL DIVIDEND WHICH AMOUNTED TO $.22 PER SHARE RELATING TO A
NONRECURRING
INITIATIVE TO INVEST IN DIVIDEND INCOME PRODUCING SECURITIES WHICH WAS
IN EFFECT FOR A PORTION OF 1992.
</TABLE>
DEFENSE AND AEROSPACE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past one, five, and 10 years total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
DEFENSE AND AEROSPACE 27.75% 32.96% 139.84% 109.27%
DEFENSE AND AEROSPACE
(INCL. 3% SALES CHARGE) 23.92% 28.97% 132.64% 102.99%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
DEFENSE AND AEROSPACE 32.96% 19.12% 7.66%
DEFENSE AND AEROSPACE
(INCL. 3% SALES CHARGE) 28.97% 18.40% 7.34%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and return
of
a fund that invests in a sector will vary. That
means if you sell your shares during a sector
downturn, you might lose money. But if you
can identify a sector that is about to
experience rapid growth you may have the
potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select DefenseStandard & Poor
08/31/85 9700.00 10000.00
09/30/85 9136.13 9687.00
10/31/85 9300.29 10134.54
11/30/85 9799.93 10829.77
12/31/85 10213.91 11353.93
01/31/86 10085.43 11417.51
02/28/86 10635.03 12271.54
03/31/86 11241.72 12956.29
04/30/86 11327.37 12809.89
05/31/86 11605.74 13491.37
06/30/86 11848.42 13719.38
07/31/86 11111.65 12952.46
08/31/86 11683.52 13913.54
09/30/86 10742.47 12762.89
10/31/86 10887.24 13499.31
11/30/86 11234.71 13827.34
12/31/86 10706.27 13474.74
01/31/87 11640.09 15289.79
02/28/87 12378.45 15893.74
03/31/87 12146.81 16353.07
04/30/87 11618.37 16207.52
05/31/87 11459.11 16348.53
06/30/87 11350.53 17174.13
07/31/87 11654.56 18044.86
08/31/87 11531.50 18717.93
09/30/87 11299.86 18308.01
10/31/87 8418.79 14364.46
11/30/87 7984.46 13180.83
12/31/87 8222.57 14183.89
01/31/88 8751.59 14781.03
02/29/88 9273.06 15469.83
03/31/88 9250.39 14991.81
04/30/88 9189.93 15158.22
05/31/88 8842.28 15290.10
06/30/88 9205.04 15991.91
07/31/88 9023.66 15931.15
08/31/88 8804.50 15389.49
09/30/88 9069.01 16045.08
10/31/88 9053.89 16491.13
11/30/88 8653.35 16255.31
12/31/88 8577.77 16539.78
01/31/89 8917.86 17750.49
02/28/89 8880.07 17308.50
03/31/89 9061.45 17711.79
04/30/89 9386.43 18631.03
05/31/89 9552.69 19385.59
06/30/89 9439.33 19275.09
07/31/89 10051.49 21015.63
08/31/89 10308.44 21427.54
09/30/89 10119.50 21339.68
10/31/89 9545.13 20844.60
11/30/89 9182.37 21269.83
12/31/89 9333.52 21780.31
01/31/90 8804.50 20318.85
02/28/90 8834.73 20580.96
03/31/90 9378.87 21126.36
04/30/90 8993.43 20598.20
05/31/90 9658.50 22606.52
06/30/90 9665.44 22452.80
07/31/90 9277.61 22380.95
08/31/90 8463.91 20357.71
09/30/90 8190.15 19366.29
10/31/90 8083.68 19283.02
11/30/90 8517.15 20528.70
12/31/90 8905.67 21101.45
01/31/91 9691.69 22021.47
02/28/91 9882.47 23596.01
03/31/91 10645.60 24167.03
04/30/91 10470.08 24225.03
05/31/91 10958.48 25271.56
06/30/91 10407.13 24114.12
07/31/91 10859.28 25237.84
08/31/91 10744.32 25835.97
09/30/91 10491.42 25404.51
10/31/91 10997.22 25744.93
11/30/91 10499.09 24707.41
12/31/91 11303.76 27533.94
01/31/92 11265.44 27021.81
02/29/92 11441.71 27373.09
03/31/92 11211.80 26839.32
04/30/92 11012.55 27628.39
05/31/92 10460.77 27763.77
06/30/92 9970.30 27350.09
07/31/92 10353.48 28468.71
08/31/92 10154.23 27885.10
09/30/92 10299.84 28214.15
10/31/92 10384.13 28312.90
11/30/92 10744.32 29278.37
12/31/92 11303.76 29638.49
01/31/93 11640.96 29887.45
02/28/93 11556.66 30293.92
03/31/93 12169.75 30933.12
04/30/93 12208.06 30184.54
05/31/93 12583.58 30993.49
06/30/93 13112.36 31083.37
07/31/93 13648.81 30959.04
08/31/93 13625.82 32132.38
09/30/93 13978.35 31884.96
10/31/93 14537.79 32544.98
11/30/93 14108.63 32235.80
12/31/93 14565.78 32625.86
01/31/94 15259.39 33735.14
02/28/94 15259.39 32820.92
03/31/94 14645.51 31389.92
04/30/94 14725.00 31791.71
05/31/94 14773.54 32313.10
06/30/94 14401.37 31521.43
07/31/94 14611.73 32555.33
08/31/94 15267.07 33890.10
09/30/94 14498.46 33059.79
10/31/94 14854.45 33803.64
11/30/94 14271.92 32572.51
12/31/94 14822.08 33055.56
01/31/95 14813.99 33912.69
02/28/95 15890.05 35234.27
03/31/95 16569.67 36274.03
04/30/95 17483.91 37342.30
05/31/95 18559.97 38834.87
06/30/95 19247.67 39737.01
07/31/95 20307.55 41054.68
08/31/95 20299.46 41157.73
Let's say you invested $10,000 in Fidelity Select Defense and Aerospace
Portfolio on August 31, 1985, and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $20,299 - a 102.99% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
United Technologies Corp. 6.1
Vishay Intertechnology, Inc. 5.1
Boeing Co. 4.9
Litton Industries, Inc. 4.3
Rockwell International Corp. 4.2
Loral Corp. 3.5
McDonnell Douglas Corp. 3.4
AMP, Inc. 3.2
Thiokol Corp. 2.8
Sundstrand Corp. 2.8
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 41.5
Row: 1, Col: 2, Value: 7.4
Row: 1, Col: 3, Value: 9.4
Row: 1, Col: 4, Value: 10.2
Row: 1, Col: 5, Value: 13.2
Row: 1, Col: 6, Value: 18.3
Defense Electronics 18.3%
Aircraft 13.2%
Conglomerates 10.2%
Missiles & Space Vehicles 9.4%
Aircraft & Parts 7.4%
All Others 41.5%*
* INCLUDES SHORT-TERM INVESTMENTS
DEFENSE AND AEROSPACE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Bill Rubin,
Portfolio Manager of
Fidelity Select Defense and Aerospace Portfolio
Q. HOW HAS THE FUND BEEN DOING, BILL?
A. The fund has performed extremely well. For the six months ended August
31, 1995, the fund was up 27.75%, compared to the S&P 500's 16.81% gain
during the same period. For the 12 months ended August 31, it also
outperformed the market significantly, gaining 32.96% to the S&P's 21.45%
total return.
Q. WHAT ACCOUNTED FOR THESE BIG GAINS?
A. There certainly has been rising public interest in defense and aerospace
stocks and a growing awareness of the industry's ability to generate strong
earnings and cash flow. Profit margins in most of the companies the fund
owned continued to rise, cash flow remained very strong, and the companies
exhibited aggressive cash redeployment strategies aimed at enhancing
shareholder value. They have done a good job of lowering their cost
structures, through consolidation and downsizing, while they accrue higher
profit margins from maturing defense programs. Another positive factor is
that Congress appears to be comfortable with higher 1996 levels of funding
for the defense budget.
Q. TOTAL FUND ASSETS HAVE GROWN BY A FACTOR OF FOUR OR FIVE TIMES OVER THE
LAST SIX MONTHS, BILL. WHAT'S THE STORY HERE?
A. Actually, by mid-July this year, assets saw an almost 10-fold increase,
rising from about $5 million at the beginning of the period to a high of
about $48 million. This increase was driven by substantial appreciation in
fund asset values and also by very high inflows of cash, in part, in
recognition of the fund's strong performance. Shortly after mid-year, when
performance statistics for all such funds were announced, we saw a period
of steep outflows, which probably suggests that investors did not believe
the industry could sustain its strong performance in the second half. The
fund now has total assets of about $22 million.
Q. WHICH INDIVIDUAL STOCKS DROVE PERFORMANCE?
A. In fact, nearly all of the stocks owned by the fund at the beginning of
the period were up by the end of the period, many by wide margins. Among
the top 25 holdings, almost all were up substantially. On the defense side,
McDonnell Douglas was up 43% and continued to grow profits beyond
expectations. Tracor was up 60% on good program performance and acquisition
growth. General Dynamics was somewhat of a surprise winner in the later
stages of the period, based on Congress's apparent comfort with funding a
third Seawolf submarine program and the company's recent announcement that
it would acquire Bath Iron Works, the Maine-based naval shipbuilder. United
Technologies, our top holding and up 26%, continued to show good results,
as did Northrop Grumman (up 37%) and Loral (up 34%). In general, the
commercial aerospace stocks all have taken off impressively, led by Boeing
(up 39%), Precision Castparts (up 46%), Rohr Industries (up 38%) and
Sundstrand (up 49%), which have done especially well in anticipation of
rising production of new commercial aircraft, following a large uptick in
plane orders over the past 12 months.
Q. SIX MONTHS AGO YOU INDICATED YOU PLANNED TO BECOME MORE HEAVILY INVESTED
IN THE COMMERCIAL AEROSPACE SECTOR. HAVE YOU MADE THAT SHIFT?
A. Yes, I have. Nearly half of the fund's top 25 holdings at the end of the
period had commercial aerospace exposure. All of them have performed very
well, and I would expect they could continue to do well as plane orders,
particularly from foreign airlines, continue rising, and as they prove
they've become much more efficient and profitable.
Q. ANY OTHER CHANGES IN STRATEGY?
A. Not really. I'm very comfortable with the fund's current positioning,
but I did add many new names to the portfolio during the period. Most of
these are smaller cap stocks, companies that were not being followed to a
great degree, but which have high growth potential - which can entail
higher risk- and were inexpensive.
Q. YOU SOUND PRETTY OPTIMISTIC ABOUT THE FUND GOING FORWARD . . .
A. I am. I continue to be bullish on both the defense and commercial
aerospace segments of the industry. I think defense contractors generally
should continue to experience expanding valuations - stock prices relative
to other measures such as earnings - and should continue to show rising
profits. As new aircraft orders make it onto the production line in the
next 18 months, I believe the commercial aerospace segment should raise
production rates and generate impressive earnings and cash flow growth. The
stocks in both groups should follow these improving business prospects. I
believe both groups could continue to outperform the broad market for the
next couple of years.
FUND FACTS
START DATE: May 8, 1984
TRADING SYMBOL: FSDAX
SIZE: as of August 31, 1995, more than
$22 million
MANAGER: Bill Rubin, since December 1,
1994; equity analyst, defense electronics,
aerospace, and electronic connectors
industries, since August 1994; joined Fidelity
in 1994
(checkmark)
DEFENSE AND AEROSPACE PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.4%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 40.0%
AIRCRAFT - 13.2%
Boeing Co. 16,900 $ 1,077,370
British Aerospace 12,000 122,558
Lockheed Martin Corp. 8,750 532,656
McDonnell Douglas Corp. 9,200 738,300
Northrop Grumman Corp. 7,000 426,125
2,897,009
AIRCRAFT & PARTS - 7.4%
Precision Castparts Corp. 11,800 399,725
Rohr Industries, Inc. (a) 26,600 412,300
Sundstrand Corp. 9,000 613,125
Wyman-Gordon Co. (a) 16,000 206,000
1,631,150
AIRCRAFT ENGINES & PARTS - 2.0%
General Motors Corp. Class H 9,500 378,813
UNC, Inc. (a) 10,000 58,750
437,563
AIRCRAFT EQUIPMENT - 3.3%
Aviall, Inc. 7,000 54,250
BE Aerospace, Inc. (a) 10,000 75,000
Cobham PLC 15,000 97,637
Teleflex, Inc. 10,400 419,900
Transtechnology Corp. 6,200 78,275
725,062
MISSILES & SPACE VEHICLES - 9.3%
Orbital Sciences Corp. (a) 11,400 195,225
Rockwell International Corp. 20,500 917,375
Special Devices, Inc. (a) 17,200 305,300
Thiokol Corp. 17,900 624,263
2,042,163
ORDNANCE - 1.2%
Alliant Techsystems, Inc. (a) 5,600 263,200
TRAINING EQUIPMENT & SIMULATORS - 3.6%
BVR Technologies Ltd. (a) 10,000 58,750
C A E Industries Ltd. 36,000 241,080
Flightsafety International, Inc. 11,300 501,438
801,268
TOTAL AEROSPACE & DEFENSE 8,797,415
AIR TRANSPORTATION - 0.4%
AIR TRANSPORT, MAJOR NATIONAL - 0.4%
KLM Royal Dutch Airlines 2,458 81,421
AUTOS, TIRES, & ACCESSORIES - 1.6%
AUTO & TRUCK PARTS - 1.6%
Safety Components International, Inc. (a) 7,500 135,000
Sparton Corp. (a) 10,000 43,750
TRW, Inc. 2,300 179,113
357,863
COMMUNICATIONS EQUIPMENT - 0.5%
TELEPHONE EQUIPMENT - 0.5%
Tadiran Ltd. 5,000 113,750
COMPUTER SERVICES & SOFTWARE - 0.6%
CAD/CAM/CAE - 0.4%
Dynamics Research Corp. (a) 15,000 84,375
COMPUTER SERVICES - 0.0%
BDM International, Inc. (a) 100 2,513
SHARES VALUE (NOTE 1)
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.2%
CACI International, Inc. Class A (a) 3,300 $ 40,838
TOTAL COMPUTER SERVICES & SOFTWARE 127,726
COMPUTERS & OFFICE EQUIPMENT - 0.5%
COMPUTER PERIPHERALS - 0.1%
Miltope Group, Inc. (a) 5,000 15,625
GRAPHICS WORKSTATIONS - 0.4%
Scitex Ltd. Ord. 5,000 101,875
TOTAL COMPUTERS & OFFICE EQUIPMENT 117,500
CONGLOMERATES - 10.2%
Allied-Signal, Inc. 5,300 235,188
GenCorp, Inc. 5,000 59,375
Harris Corp. 4,500 259,313
Sequa Corp. Class A (a) 6,000 159,750
Textron, Inc. 2,900 198,650
United Technologies Corp. 16,000 1,334,000
2,246,276
DEFENSE ELECTRONICS - 18.3%
Alpha Industries, Inc. (a) 5,000 85,625
Anaren Microwave Inc. (a) 5,000 38,125
ESCO Electronics Corp. (trust receipt) (a) 10,000 92,500
Geodynamics Corp. 12,500 152,344
Litton Industries, Inc. (a) 24,300 941,625
Logicon, Inc. 3,300 181,500
Loral Corp. 14,000 766,500
Nichols Research Corp. (a) 10,000 185,000
Raytheon Co. 3,900 315,413
Tech-Sym Corp. (a) 6,300 183,488
Tracor, Inc. (a) 9,900 168,300
Trimble Navigation Ltd. (a) 15,400 494,725
Watkins-Johnson Co. 4,500 226,125
Whittaker Corp. (a) 10,600 206,700
4,037,970
ELECTRICAL EQUIPMENT - 3.6%
CURRENT-CARRYING WIRING DEVICE - 1.1%
Adflex Solutions (a) 8,900 241,413
ELECTRICAL MACHINERY - 1.6%
Amphenol Corp. Class A (a) 9,700 237,650
General Electric Co. 2,000 117,750
355,400
MOTORS & GENERATORS - 0.9%
Pacific Scientific Co. 7,600 190,950
TOTAL ELECTRICAL EQUIPMENT 787,763
ELECTRONICS - 15.8%
CONNECTORS - 4.8%
AMP, Inc. 17,500 710,938
Augat, Inc. 4,000 88,000
Thomas & Betts Corp. 3,700 249,750
1,048,688
ELECTRONIC CAPACITORS - 1.1%
AVX Corp. 500 15,875
Kemet Corp. (a) 3,800 216,600
232,475
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - CONTINUED
ELECTRONIC PARTS - WHOLESALE - 3.0%
Kent Electronics Corp. (a) 6,100 $ 247,050
Richey Electronics, Inc. (a) 33,500 259,625
Zero Corp. 10,000 157,500
664,175
ELECTRONICS & ELECTRONIC COMPONENTS - 6.9%
Alpine Group Inc. 4,100 23,831
Molex, Inc. 9,700 383,150
Vishay Intertechnology, Inc. 27,700 1,121,850
1,528,831
TOTAL ELECTRONICS 3,474,169
METALS & MINING - 0.7%
NONFERROUS ROLLING & DRAWING - 0.3%
Oregon Metallurgical Corp. (a) 5,000 61,250
PRIME NONFERROUS SMELTING - 0.4%
Tremont Corp (a). 5,000 95,625
TOTAL METALS & MINING 156,875
RAILROADS - 2.8%
RAILROAD EQUIPMENT - 2.8%
Bombardier, Inc. Class B 50,000 609,212
SHIP BUILDING & REPAIR - 1.8%
SHIP BUILDERS - 1.8%
General Dynamics Corp. 7,400 389,425
TELEPHONE SERVICES - 0.6%
Globalstar Telecommunications Ltd. (a) 9,500 147,250
TOTAL COMMON STOCKS
(Cost $19,426,367) 21,444,615
CONVERTIBLE CORPORATE BONDS - 0.1%
PRINCIPAL
AMOUNT
AEROSPACE & DEFENSE - 0.1%
MISSILES & SPACE VEHICLES - 0.1%
Orbital Sciences Corp. 6 3/4%,
3/1/03 (Cost $18,000) $ 18,000 22,320
REPURCHASE AGREEMENTS - 2.5%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 546,088 $ 546,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $19,990,367) $ 22,012,935
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $38,319,412 and $26,390,225, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $20,501 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $4,697,000 and $1,793,188,
respectively The weighted average interest rate paid was 6.2% (see Note 6
of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $19,995,908. Net unrealized appreciation aggregated
$2,017,027, of which $2,225,969 related to appreciated investment
securities and $208,942 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $287,000 which will expire on February 28, 2003.
DEFENSE AND AEROSPACE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $546,000) (cost $19,990,367) - See $ 22,012,935
accompanying schedule
Cash 917
Receivable for investments sold 881,841
Receivable for fund shares sold 202,860
Dividends receivable 50,792
Interest receivable 604
Redemption fees receivable 164
Other receivables 88
Prepaid expenses 2,940
TOTAL ASSETS 23,153,141
LIABILITIES
Payable for fund shares redeemed $ 720,418
Accrued management fee 12,593
Other payables and accrued expenses 27,777
TOTAL LIABILITIES 760,788
NET ASSETS $ 22,392,353
Net Assets consist of:
Paid in capital $ 17,122,690
Undistributed net investment income 29,638
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 3,217,457
Net unrealized appreciation (depreciation) on investments 2,022,568
NET ASSETS, for 892,494 shares outstanding $ 22,392,353
NET ASSET VALUE and redemption price per share ($22,392,353 (divided by) 892,494 shares) $25.09
Maximum offering price per share (100/97.00 of $25.09) $25.87
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 154,934
Dividends
Interest 59,677
TOTAL INCOME 214,611
EXPENSES
Management fee $ 69,426
Transfer agent 81,852
Fees
Redemption fees (17,711
)
Accounting fees and expenses 22,664
Non-interested trustees' compensation 44
Custodian fees and expenses 10,231
Registration fees 7,222
Audit 8,217
Legal 20
Interest 4,971
Miscellaneous 53
Total expenses before reductions 186,989
Expense reductions (2,016 184,973
)
NET INVESTMENT INCOME 29,638
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 3,528,746
Foreign currency transactions (34 3,528,712
)
Change in net unrealized appreciation (depreciation) on investment securities 1,741,992
NET GAIN (LOSS) 5,270,704
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 5,300,342
OTHER INFORMATION $163,730
Sales Charges Paid to FDC
Deferred sales charges withheld $3,864
by FDC
Exchange fees withheld by FSC $14,603
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 29,638 $ (16,833
Net investment income (loss) )
Net realized gain (loss) 3,528,712 (307,440
)
Change in net unrealized appreciation (depreciation) 1,741,992 (46,619
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 5,300,342 (370,892
)
Distributions to shareholders from net realized gains - (145,443
)
Share transactions 50,636,279 13,049,647
Net proceeds from sales of shares
Reinvestment of distributions - 142,332
Cost of shares redeemed (38,571,233 (18,865,024
) )
Paid in capital portion of redemption fees 42,313 38,135
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 12,107,359 (5,634,910
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,407,701 (6,151,245
)
NET ASSETS
Beginning of period 4,984,652 11,135,897
End of period (including undistributed net investment income of $29,638 and $0, respectively) $ 22,392,353 $ 4,984,652
OTHER INFORMATION
Shares
Sold 2,242,849 690,722
Issued in reinvestment of distributions - 7,812
Redeemed (1,604,192 (1,026,621
) )
Net increase (decrease) 638,657 (328,087)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.64 $ 19.14 $ 15.08 $ 14.37 $ 13.72 $ 11.90
Income from Investment Operations
Net investment income (loss) .03 (.06) .07 (.02) (.01) .10
Net realized and unrealized gain (loss) 5.38 .70 E 4.57 .69 .67 1.72
Total from investment operations 5.41 .64 4.64 .67 .66 1.82
Less Distributions - - (.10) - (.04) (.12)
From net investment income
In excess of net investment income - - - - (.02) -
From net realized gain - (.27) (.62) - - -
Total distributions - (.27) (.72) - (.06) (.12)
Redemption fees added to paid in capital .04 .13 .14 .04 .05 .12
Net asset value, end of period $ 25.09 $ 19.64 $ 19.14 $ 15.08 $ 14.37 $ 13.72
TOTAL RETURN B, C 27.75% 4.13% 32.04% 4.94% 5.18% 16.42%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 22,392 $ 4,985 $ 11,136 $ 1,463 $ 1,280 $ 3,070
Ratio of expenses to average net assets 1.61% A 2.49% 2.53% 2.48% A 2.46% 2.49%
Ratio of expenses to average net assets before 1.63% A 3.95% 3.58% 9.63% A 2.72% 3.11%
expense reductions
Ratio of net investment income (loss) to average net .26% A (.32)% .40% (.14)% (.10)% .78%
assets A
Portfolio turnover rate 265% A 146% 324% 87% A 32% 162%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD ENDED DUE TO
THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
</TABLE>
DEVELOPING COMMUNICATIONS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five years and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 MONTH YEAR YEARS FUND
S
DEVELOPING COMMUNICATIONS 31.82% 47.41% 324.56% 244.32%
DEVELOPING COMMUNICATIONS (INCL. 3% SALES CHARGE)
27.86% 42.98% 311.83% 233.99%
S&P 500 16.81% 21.45% 102.17% 83.53%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on June 29, 1990. You can compare these figures to
the performance of the S&P 500 - a common proxy for the U.S. stock market.
This benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1995 YEAR YEARS FUND
DEVELOPING COMMUNICATIONS 47.41% 33.53% 26.97%
DEVELOPING COMMUNICATIONS
(INCL. 3% SALES CHARGE) 42.98% 32.72% 26.23%
S&P 500 21.45% 15.12% 12.44%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER LIFE OF FUND
Developing CommuStandard & Poor's
06/29/90 9700.00 10000.00
06/30/90 9700.00 10012.31
07/31/90 8953.10 9980.27
08/31/90 7866.70 9078.05
09/30/90 6751.20 8635.95
10/31/90 7081.00 8598.82
11/30/90 8235.30 9154.30
12/31/90 8759.10 9409.71
01/31/91 10146.20 9819.97
02/28/91 10776.70 10522.10
03/31/91 11494.50 10776.73
04/30/91 11591.50 10802.60
05/31/91 11766.10 11269.27
06/30/91 10841.06 10753.14
07/31/91 11963.62 11254.23
08/31/91 12670.42 11520.96
09/30/91 12815.94 11328.56
10/31/91 13564.32 11480.36
11/30/91 12888.70 11017.70
12/31/91 14135.99 12278.13
01/31/92 14510.18 12049.75
02/29/92 14998.70 12206.40
03/31/92 14260.72 11968.38
04/30/92 14073.63 12320.25
05/31/92 14011.26 12380.62
06/30/92 13512.35 12196.14
07/31/92 14104.81 12694.97
08/31/92 13574.71 12434.72
09/30/92 14032.05 12581.45
10/31/92 14655.70 12625.48
11/30/92 15986.14 13056.01
12/31/92 16569.33 13216.60
01/31/93 17017.15 13327.62
02/28/93 17121.30 13508.88
03/31/93 17735.75 13793.92
04/30/93 17206.93 13460.10
05/31/93 18365.83 13820.83
06/30/93 19160.51 13860.91
07/31/93 19535.77 13805.47
08/31/93 21323.79 14328.70
09/30/93 21621.79 14218.37
10/31/93 22372.32 14512.69
11/30/93 20672.60 14374.82
12/31/93 21833.52 14548.75
01/31/94 22673.27 15043.41
02/28/94 22298.78 14635.73
03/31/94 20744.11 13997.61
04/30/94 21598.03 14176.78
05/31/94 20440.78 14409.28
06/30/94 18918.07 14056.26
07/31/94 20879.32 14517.30
08/31/94 22657.83 15112.51
09/30/94 22962.38 14742.25
10/31/94 25021.07 15073.95
11/30/94 24314.54 14524.96
12/31/94 25138.57 14740.37
01/31/95 24467.87 15122.58
02/28/95 25337.29 15711.91
03/31/95 25473.91 16175.57
04/30/95 26593.13 16651.94
05/31/95 27505.97 17317.52
06/30/95 30405.58 17719.80
07/31/95 33318.60 18307.39
08/31/95 33399.15 18353.34
Let's say you invested $10,000 in Fidelity Select Developing Communications
Portfolio on June 29, 1990, when the fund started, and paid a 3% sales
charge. By August 31, 1995, your investment would have grown to $33,399 - a
233.99% increase. That compares to $10,000 invested in the S&P 500, which
would have grown to $18,353 over the same period - an 83.53% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
DSC Communications Corp. 9.5
AirTouch Communications, Inc. 7.6
Vodafone Group PLC sponsored ADR 5.1
Nokia Corp. AB sponsored ADR 4.4
Glenayre Technologies, Inc. 4.4
Cellular Communications, Inc. Series A (redeemable) 2.8
LSI Logic Corp. 2.7
California Microwave Corp. 2.5
United States Cellular Corp. 2.3
Allen Group, Inc. (The) 2.3
TOP INDUSTRIES AS OF AUGUST 31, 1995
Cellular & Communication
Services 30.6%
Telephone Equipment 23.0%
TV & Radio Communication
Equipment 12.6%
Electronics & Electronic
Components 4.6%
Semiconductors 4.5%
All Others 24.7%*
Row: 1, Col: 1, Value: 24.7
Row: 1, Col: 2, Value: 4.5
Row: 1, Col: 3, Value: 4.6
Row: 1, Col: 4, Value: 12.6
Row: 1, Col: 5, Value: 23.0
Row: 1, Col: 6, Value: 30.6
* INCLUDES SHORT-TERM INVESTMENTS
DEVELOPING COMMUNICATIONS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Paul Antico,
Portfolio Manager of
Fidelity Select Developing
Communications Portfolio
Q. HOW DID THE FUND PERFORM, PAUL?
A. It did extremely well. For the six-months ended August 31, 1995, the
fund returned 31.82%, compared with a 16.81% gain for the S&P 500 Index.
For the 12 months ended August 31, it gained 47.41%, more than double the
S&P's 21.45% return over the same period.
Q. WHAT FACTORS DROVE THIS IMPRESSIVE SHOWING?
A. There certainly has been heightened interest in technology stocks over
the recent past, and I think the fund benefited to some extent from this
broad level of investor interest. But more specifically, I believe
performance was driven by the continuing rapid growth of wireless
communications and the continuing build-out of land-line telecommunications
services, both domestically and internationally. The portfolio is about
evenly split between wireless stocks and telecommunications technology
stocks.
Q. DID BOTH THESE SEGMENTS PERFORM EQUALLY WELL?
A. No, they didn't. The wireless services stocks did not perform as well as
I had hoped, although the underlying business of providing cellular phone
and paging services continues to grow at very impressive rates and
represent a tremendous future opportunity. I think the problems with their
current stock performance is that investors are not yet comfortable about
how to value these companies since many of them are relatively immature and
still don't have earnings. The wireless equipment manufacturers, however,
have done extremely well and more than made up for the lagging performance
of the service providers. The other telecommunications technology stocks
also have done very well, driven by what I call the "broadband revolution,"
or the growing demand for more high speed data services and broader
communications bandwidths, in the U.S. and developed economies throughout
the world. In addition, there is strong demand in the developing economies
of the world - China, India, and areas of Latin America, for example - to
build basic telecommunications infrastructure, which should continue to
strengthen earnings for the industry.
Q. WERE THERE ANY INDIVIDUAL STOCKS THAT PERFORMED BETTER THAN YOU
EXPECTED?
A. There were three equipment manufacturers that did especially well.
Glenayre Technologies continues to capitalize on the phenomenal growth of
paging systems, both in the U.S., where growth is accelerating briskly, and
internationally, where the market for paging is absolutely booming. Nokia,
the Finnish cellular equipment provider, continues to gain market share
worldwide in both the infrastructure and handset sides of the business.
Both these stocks, which were among the fund's top 10 holdings on August
31, made strong performance contributions. Another stock that performed
above expectations was ADC Telecommunications, a supplier of a broad range
of products, which is well positioned to meet the growing demands of the
broadband revolution and whose earnings continue to accelerate year after
year.
Q. EVEN THOUGH THEIR RETURNS HAVEN'T BEEN PARTICULARLY STRONG OF LATE, ARE
YOU STILL COMFORTABLE WITH YOUR POSITIONING IN CELLULAR SERVICE STOCKS?
A. Yes, because I think the fundamentals in the cellular service industry
are still very good. Many of the smaller companies I owned in this segment
have been growing their subscriber bases and increasing their cash flows
and margins faster than the industry as a whole. In spite of this, the
market seems not to know what to make of these smaller cellular companies,
particularly in anticipation of competition from the emerging personal
communication service (PCS) technologies. While these stocks have not done
much lately, I believe their strong fundamentals should show good upside
for the future. Actually, two of the fund's larger holdings, AirTouch
Communications and Vodafone, a British cellular service company, both did
very well over the period.
Q. CAN WE EXPECT ANY CHANGES TO YOUR GAME PLAN GOING FORWARD, PAUL?
A. Nothing radical. I continue to have a very strong focus on wireless
communications, including both the cellular service and cellular equipment
providers, as well as selective plays on the broadband revolution. I
recently have invested a bit more internationally because some of these
overseas companies, particularly on the equipment side, have been more
attractive from a valuation point of view. My outlook for the fund
continues to be very positive.
FUND FACTS
START DATE: June 29, 1990
TRADING SYMBOL: FSDCX
SIZE: as of August 31, 1995, more than
$477 million
MANAGER: Paul Antico, since 1993; equity
analyst, telecommunications equipment, since
1992, restaurant industry, 1992-1993, and
wireless communications, since 1993;
assistant, Fidelity Balanced Fund and Fidelity
Equity Income II Fund, 1991-1992; joined
Fidelity in 1991
(checkmark)
DEVELOPING COMMUNICATIONS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.9%
SHARES VALUE (NOTE 1)
APPLIANCE STORES - 0.8%
ELECTRIC APPLIANCES - WHOLESALE - 0.8%
Cellstar Corp. 129,200 $ 4,118,250
BROADCASTING - 1.0%
CABLE TV OPERATORS - 1.0%
Viacom, Inc. Class B (non-vtg.) (a) 60,000 2,917,500
Videotron Holdings PLC
sponsored ADR 129,000 1,886,625
4,804,125
CELLULAR - 30.6%
CELLULAR & COMMUNICATION SERVICES - 30.6%
A Plus Communications, Inc. 217,500 2,881,875
AirTouch Communications, Inc. 1,153,425 37,486,313
Arch Communications Group, Inc. 111,400 3,042,613
BCE Mobile Communications, Inc. 139,500 4,346,562
Cellular Communications, Inc.
Series A (redeemable) 252,100 13,739,450
Cellular Communications, Inc. Class P 19,550 1,099,492
Cellular Communications
International, Inc. 49,000 1,862,000
Cellular Communications Puerto Rico Inc. 336,100 10,335,075
Metrocall, Inc. (a) 159,400 3,666,200
Mobile Telecommunications
Technologies, Inc. 155,200 4,772,400
Nera SA 92,100 2,983,229
Palmer Wireless, Inc. 367,500 8,452,500
USA Mobile Communications (a) 396,742 8,629,139
United States Cellular Corp. (a) 324,200 11,347,000
Vanguard Cellular Systems, Inc.
Class A (a) 407,050 11,041,231
Vodafone Group PLC sponsored ADR (a) 601,900 25,204,563
150,889,642
COMMUNICATIONS EQUIPMENT - 25.6%
DATACOMMUNICATIONS EQUIPMENT - 2.2%
Ascom Holding Ltd. (Bearer) 500 567,096
Cisco Systems, Inc. 40,000 2,625,000
Dynatech Corp. (a) 282,500 5,650,000
Microcom, Inc. 92,000 1,840,000
10,682,096
TELEPHONE EQUIPMENT - 23.0%
ADC Telecommunications, Inc. 120,200 4,657,750
Andrew Corp. 50,600 2,947,450
Brite Voice Systems, Inc. 221,200 5,115,250
DSC Communications Corp. (a) 890,800 46,767,000
DSP Communications, Inc. 106,700 2,720,850
Dialogic Corp. (a) 71,800 1,768,075
Ericsson (L.M.) Telephone Co.
Class B ADR 119,400 2,552,175
Filtronic Comtek PLC 588,400 3,602,014
Inter-Tel, Inc. (a) 271,600 4,515,350
InterVoice, Inc. 116,000 2,566,500
Network Equipment Technologies (a) 134,400 5,040,000
Nokia Corp. AB sponsored ADR 315,100 21,860,063
Octel Communications Corp. 75,000 2,559,375
Tellabs, Inc. (a) 70,000 3,272,500
U.S. Robotics Corp. 25,100 3,520,275
113,464,627
TELEPHONE INTERCONNECT SYSTEMS - 0.4%
P-COM, Inc. 64,200 2,198,850
TOTAL COMMUNICATIONS EQUIPMENT 126,345,573
SHARES VALUE (NOTE 1)
COMPUTER SERVICES & SOFTWARE - 0.5%
CAD/CAM/CAE - 0.5%
Ascend Communications, Inc. 35,000 $ 2,257,500
COMPUTERS & OFFICE EQUIPMENT - 1.1%
COMPUTER COMMUNICATIONS EQUIPMENT - 0.1%
Comverse Technology, Inc. 36,900 738,000
COMPUTER PERIPHERALS - 0.7%
Micom Communication Corp. (a) 145,033 1,269,039
Safeguard Scientifics, Inc. 41,900 2,100,238
3,369,277
MAGNETIC & OPTICAL RECORDING MEDIA - 0.3%
Boca Research, Inc. 56,000 1,330,000
TOTAL COMPUTERS & OFFICE EQUIPMENT 5,437,277
DEFENSE ELECTRONICS - 2.4%
Alpha Industries, Inc. 49,100 840,838
Datum, Inc. (b) 263,000 3,484,750
Whittaker Corp. 390,500 7,614,750
11,940,338
ELECTRICAL EQUIPMENT - 15.1%
ELECTRICAL MACHINERY - 2.5%
Amphenol Corp. Class A 228,700 5,603,150
Murata Manufacturing Co. Ltd. 23,000 920,472
Philips Electronics NV 129,400 5,823,000
12,346,622
TV & RADIO COMMUNICATION EQUIPMENT - 12.6%
Allen Group, Inc. (The) 343,500 11,206,688
Avid Technology, Inc. 163,000 6,479,250
C-COR Electronics, Inc. 64,700 2,070,400
California Microwave Corp. 464,200 12,185,250
Glenayre Technologies, Inc. 332,750 21,711,938
Leitch Technology (a) 99,500 1,508,473
Pinnacle Systems 71,500 1,912,625
TSX Corp. 71,100 2,017,463
Telular Corp. (a) 100,000 1,407,813
Vertex Communications Corp. (a) 103,400 1,744,875
62,244,775
TOTAL ELECTRICAL EQUIPMENT 74,591,397
ELECTRONICS - 11.1%
ELECTRONIC COMPONENTS & ACCESSORIES - 0.4%
General Cable PLC sponsored ADR 127,000 1,809,750
ELECTRONIC PARTS - WHOLESALE - 1.2%
ARC International Corp. (b) 549,700 2,164,444
Wholesale Cellular USA, Inc. 190,800 3,792,150
5,956,594
ELECTRONICS & ELECTRONIC COMPONENTS - 4.6%
Allgon AB Class B Free shares 192,900 3,854,541
Benefon Oy 49,400 1,643,084
Hirose Electric Co. Ltd. 32,000 2,183,684
Kyocera Corp. 80,000 7,092,868
Sanmina Corp. (a) 152,200 6,925,100
Tokin Corp. 56,000 844,741
22,544,018
PRINTED CIRCUIT BOARDS - 0.4%
Altron Inc. 80,000 2,180,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - CONTINUED
SEMICONDUCTORS - 4.5%
Austria Mikro Systeme International 21,600 $ 3,789,914
LSI Logic Corp. (a) 266,100 13,105,425
Motorola, Inc. 70,000 5,232,500
22,127,839
TOTAL ELECTRONICS 54,618,201
ENGINEERING - 0.3%
WATER & SEWER PIPES - 0.3%
MasTec, Inc. (a) 125,000 1,312,500
IRON & STEEL - 1.4%
IRON & STEEL BLAST FURNACES, MILLS - 0.1%
UNR Industries, Inc. 63,400 499,275
STEEL PIPES & TUBES - 1.3%
Mannesmann AG Ord. 20,000 6,310,627
TOTAL IRON & STEEL 6,809,902
PACKAGING & CONTAINERS - 0.3%
GLASS CONTAINERS - 0.3%
Corning, Inc. 49,100 1,601,888
TELEPHONE SERVICES - 3.7%
ALLTEL Corp. 40,000 1,130,000
BellSouth Corp. 20,000 1,375,000
DDI Corp. Ord. 50 423,807
Telephone & Data Systems, Inc. 137,100 5,621,100
WorldCom, Inc. 283,400 9,547,032
18,096,939
TOTAL COMMON STOCKS
(Cost $395,536,245) 462,823,532
REPURCHASE AGREEMENTS 6.1%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/01/95 $30,248,889 30,244,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $425,780,245) $ 493,067,532
LEGEND
1. Non-income producing
2. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
ARC International Corp. $ - $ - $ - $ 2,164,444
Datum, Inc. 883,863 - - 3,484,750
Total $ 883,863 $ - $ - $ 5,649,194
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $421,633,542 and $287,613,002, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $101,162 for the period
(see Note 5 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 79.8%
United Kingdom 6.6
Finland 4.8
Japan 2.3
Germany 1.3
Sweden 1.3
Canada 1.2
Netherlands 1.2
Others (individually less than 1%) 1.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $425,787,917. Net unrealized appreciation aggregated
$67,279,615, of which $74,880,886 related to appreciated investment
securities and $7,601,271 related to depreciated investment securities.
DEVELOPING COMMUNICATIONS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $30,244,000) (cost $425,780,245) - $ 493,067,532
See accompanying schedule
Cash 849
Receivable for investments sold 16,709,506
Receivable for fund shares sold 2,182,413
Dividends receivable 15,677
Redemption fees receivable 1,322
Other receivables 89,469
Prepaid expenses 10,768
TOTAL ASSETS 512,077,536
LIABILITIES
Payable for investments purchased $ 23,161,632
Payable for fund shares redeemed 10,966,976
Accrued management fee 244,949
Other payables and 329,384
accrued expenses
TOTAL LIABILITIES 34,702,941
NET ASSETS $ 477,374,595
Net Assets consist of:
Paid in capital $ 378,900,388
Accumulated net investment (loss) (895,591
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 32,082,609
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies 67,287,189
NET ASSETS, for 19,185,205 $ 477,374,595
shares outstanding
NET ASSET VALUE and redemption price per share ($477,374,595 (divided by) 19,185,205 shares) $24.88
Maximum offering price per share (100/97.00 of $24.88) $25.65
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 676,316
Dividends
Interest 794,419
TOTAL INCOME 1,470,735
EXPENSES
Management fee $ 986,687
Transfer agent 1,228,329
Fees
Redemption fees (88,300
)
Accounting fees and expenses 161,133
Non-interested trustees' compensation 1,282
Custodian fees and expenses 23,635
Registration fees 58,569
Audit 20,365
Legal 1,144
Miscellaneous 2,388
Total expenses before reductions 2,395,232
Expense reductions (28,906 2,366,326
)
NET INVESTMENT INCOME (LOSS) (895,591
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 32,539,749
Foreign currency transactions (18,127 32,521,622
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 55,903,781
Assets and liabilities in foreign (98 55,903,683
currencies )
NET GAIN (LOSS) 88,425,305
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 87,529,714
OTHER INFORMATION $1,224,619
Sales Charges Paid to FDC
Deferred sales charges withheld $2,013
by FDC
Exchange fees withheld by FSC $62,385
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (895,591 $ (1,840,119
Net investment income (loss) ) )
Net realized gain (loss) 32,521,622 30,202,368
Change in net unrealized appreciation (depreciation) 55,903,683 (4,667,340
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 87,529,714 23,694,909
Distributions to shareholders from net realized gains (17,239,478 (19,859,395
) )
Share transactions 282,219,803 296,420,644
Net proceeds from sales of shares
Reinvestment of distributions 16,999,404 19,590,893
Cost of shares redeemed (146,701,008 (287,865,261
) )
Paid in capital portion of redemption fees 140,521 334,629
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 152,658,720 28,480,905
TOTAL INCREASE (DECREASE) IN NET ASSETS 222,948,956 32,316,419
NET ASSETS
Beginning of period 254,425,639 222,109,220
End of period (including accumulated net investment loss of $895,591 and $0, respectively) $ 477,374,595 $ 254,425,639
OTHER INFORMATION
Shares
Sold 12,449,183 15,233,264
Issued in reinvestment of distributions 898,014 1,085,216
Redeemed (6,630,815 (15,155,323
) )
Net increase (decrease) 6,716,382 1,163,157
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEAR JUNE 29, 1990
ENDED FEBRUARY 28, ENDED ENDED (COMMENCEMEN
AUGUST 31, 1995 FEBRUARY 28, APRIL 30, T OF OPERATIONS
TO) APRIL 30,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.40 $ 19.65 $ 16.44 $ 13.54 $ 11.95 $ 10.00
Income from Investment Operations
Net investment income (loss) (.06) (.16) (.16) (.07) (.08) E (.10)
Net realized and unrealized gain (loss) 6.06 2.55 4.82 2.98 2.42 1.86
Total from investment operations 6.00 2.39 4.66 2.91 2.34 1.76
Less Distributions (1.53) (1.67) (1.47) (.03) (.79) -
From net realized gain
Redemption fees added to paid in capital .01 .03 .02 .02 .04 .19
Net asset value, end of period $ 24.88 $ 20.40 $ 19.65 $ 16.44 $ 13.54 $ 11.95
TOTAL RETURN B, C 31.82% 13.63% 30.24% 21.66% 21.41% 19.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 477,375 $ 254,426 $ 222,109 $ 83,383 $ 39,261 $ 7,745
Ratio of expenses to average net assets 1.45% A 1.56% 1.56% 1.88% A 2.50% 2.50% A
Ratio of expenses to average net assets before 1.46% A 1.58% 1.56% 1.88% A 2.50% 3.29% A
expense reductions
Ratio of net investment income (loss) to average (.55)% (.83)% (.88)% (.59)% (.61)% (1.23)%
net assets A A A
Portfolio turnover rate 186% A 266% 280% 77% A 25% 469% A
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.06 PER SHARE.
</TABLE>
ELECTRONICS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
ELECTRONICS 75.05% 88.06% 380.82% 292.85%
ELECTRONICS
(INCL. 3% SALES CHARGE) 69.80% 82.42% 366.39% 281.06%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
ELECTRONICS 88.06% 36.90% 14.66%
ELECTRONICS
(INCL. 3% SALES CHARGE) 82.42% 36.07% 14.31%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select ElectrStandard & Po
08/31/85 9700.00 10000.00
09/30/85 8650.10 9687.00
10/31/85 8603.64 10134.54
11/30/85 9653.54 10829.77
12/31/85 10322.51 11353.93
01/31/86 10424.71 11417.51
02/28/86 10629.12 12271.54
03/31/86 10424.71 12956.29
04/30/86 11279.50 12809.89
05/31/86 10396.84 13491.37
06/30/86 9384.10 13719.38
07/31/86 8259.87 12952.46
08/31/86 8966.00 13913.54
09/30/86 7971.84 12762.89
10/31/86 7999.71 13499.31
11/30/86 7999.71 13827.34
12/31/86 7860.34 13474.74
01/31/87 9161.11 15289.79
02/28/87 9895.11 15893.74
03/31/87 9737.16 16353.07
04/30/87 10025.19 16207.52
05/31/87 9820.79 16348.53
06/30/87 9607.09 17174.13
07/31/87 9904.41 18044.86
08/31/87 10619.83 18717.93
09/30/87 10610.54 18308.01
10/31/87 7005.56 14364.46
11/30/87 5909.20 13180.83
12/31/87 6801.15 14183.89
01/31/88 6410.92 14781.03
02/29/88 7089.18 15469.83
03/31/88 6986.97 14991.81
04/30/88 7302.87 15158.22
05/31/88 7052.01 15290.10
06/30/88 7739.56 15991.91
07/31/88 7265.71 15931.15
08/31/88 6541.00 15389.49
09/30/88 6643.20 16045.08
10/31/88 6160.06 16491.13
11/30/88 5853.45 16255.31
12/31/88 6225.10 16539.78
01/31/89 6448.08 17750.49
02/28/89 6355.17 17308.50
03/31/89 6308.72 17711.79
04/30/89 6801.15 18631.03
05/31/89 7451.53 19385.59
06/30/89 6717.53 19275.09
07/31/89 6791.86 21015.63
08/31/89 7024.14 21427.54
09/30/89 7219.25 21339.68
10/31/89 6894.06 20844.60
11/30/89 6912.64 21269.83
12/31/89 7200.67 21780.31
01/31/90 7442.24 20318.85
02/28/90 8036.88 20580.96
03/31/90 8427.11 21126.36
04/30/90 8464.27 20598.20
05/31/90 9709.29 22606.52
06/30/90 9857.95 22452.80
07/31/90 9393.39 22380.95
08/31/90 7925.38 20357.71
09/30/90 6726.82 19366.29
10/31/90 6485.25 19283.02
11/30/90 7154.21 20528.70
12/31/90 7618.87 21101.45
01/31/91 8679.37 22021.47
02/28/91 9442.18 23596.01
03/31/91 9944.53 24167.03
04/30/91 10000.34 24225.03
05/31/91 10325.94 25271.56
06/30/91 9070.08 24114.12
07/31/91 9693.36 25237.84
08/31/91 10093.37 25835.97
09/30/91 9321.25 25404.51
10/31/91 9777.08 25744.93
11/30/91 9181.71 24707.41
12/31/91 10307.33 27533.94
01/31/92 11525.98 27021.81
02/29/92 12158.56 27373.09
03/31/92 11200.38 26839.32
04/30/92 10986.42 27628.39
05/31/92 11005.03 27763.77
06/30/92 10205.00 27350.09
07/31/92 10744.55 28468.71
08/31/92 10856.19 27885.10
09/30/92 11246.90 28214.15
10/31/92 12093.44 28312.90
11/30/92 12884.16 29278.37
12/31/92 13135.33 29638.49
01/31/93 13581.86 29887.45
02/28/93 13284.18 30293.92
03/31/93 13749.31 30933.12
04/30/93 13506.95 30184.54
05/31/93 14862.32 30993.49
06/30/93 15133.39 31083.37
07/31/93 15563.37 30959.04
08/31/93 16900.04 32132.38
09/30/93 17180.46 31884.96
10/31/93 16853.31 32544.98
11/30/93 16722.44 32235.80
12/31/93 17349.12 32625.86
01/31/94 18547.51 33735.14
02/28/94 19427.06 32820.92
03/31/94 19218.16 31389.92
04/30/94 19163.19 31791.71
05/31/94 19108.22 32313.10
06/30/94 18085.74 31521.43
07/31/94 18459.55 32555.33
08/31/94 20262.63 33890.10
09/30/94 19679.93 33059.79
10/31/94 20482.52 33803.64
11/30/94 20218.65 32572.51
12/31/94 20328.60 33055.56
01/31/95 19745.89 33912.69
02/28/95 21768.86 35234.27
03/31/95 24011.71 36274.03
04/30/95 26694.34 37342.30
05/31/95 28640.34 38834.87
06/30/95 32719.26 39737.01
07/31/95 37611.75 41054.68
08/31/95 38106.50 41157.73
Let's say you invested $10,000 in Fidelity Select Electronics Portfolio on
August 31, 1985, and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $38,106 - a 281.06% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Micron Technology, Inc. 9.2
Analog Devices, Inc. 5.5
Xilinx, Inc. 3.6
Silicon Valley Group, Inc. 3.5
Advantest Corp. 3.3
Tokyo Electron Ltd. 3.2
Burr-Brown Corp. 3.2
LSI Logic Corp. 2.9
Nokia Corp. AB sponsored ADR 2.9
Cirrus Logic, Inc. 2.9
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 13.4
Row: 1, Col: 2, Value: 4.8
Row: 1, Col: 3, Value: 7.2
Row: 1, Col: 4, Value: 8.1
Row: 1, Col: 5, Value: 11.1
Row: 1, Col: 6, Value: 55.4
Semiconductors 55.4%
Semi-Conductor Capital
Equipment 11.1%
Electronics & Electronic
Components 8.1%
Electronic Equipment 7.2%
Telephone Equipment 4.8%
All Others 13.4%*
* INCLUDES SHORT-TERM INVESTMENTS
ELECTRONICS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Marc Kaufman,
Portfolio Manager of
Fidelity Select Electronics Portfolio
Q. HOW HAS THE FUND PERFORMED, MARC?
A. I am extremely pleased with its performance. For the six months ended
August 31, 1995, the fund was the highest performer of any in its category,
gaining 75.05% compared with the S&P 500's 16.81% total return for the
period. For the 12 months ended August 31, the fund was up 88.06%, more
than four times the S&P's 21.45% return for the comparable period.
Q. THAT'S A HUGE LEAP FROM WHAT THE FUND DID SIX MONTHS AGO. WHAT'S THE
STORY BEHIND THIS IMPRESSIVE GAIN?
A. Probably the biggest factor is that the portfolio was very heavily
invested in semiconductor companies and other related businesses, and these
stocks have had an extremely good run over the recent past. In fact, the
semiconductor industry is probably as strong now as it has ever been,
driven by such factors as the growing strength of PC sales on a global
basis, the advent of the Pentium chip and Windows 95, the rapid growth of
wireless communications, and a marketplace with very favorable supply and
demand characteristics. The long and short of it is that demand for larger
and more powerful chips has been moving faster than the industry's ability
to supply them. Since I took over the fund in March of this year, I've
increased the fund's holdings in semiconductors from about half the
portfolio to as much as two-thirds at times.
Q. WHICH OF THE FUND'S HOLDINGS HAD THE GREATEST IMPACT ON PERFORMANCE?
A. There were several, particularly in the semiconductor group. Micron
Technology, the fund's top position on August 31, continued to do very
well: its stock price gained nearly 150% during the period. Right now,
Micron is arguably the best manufacturer of dynamic RAM chips in the world
and has been able to hold its chip prices high in a tight supply market.
Xilinx, a maker of programmable logic chips, is another good growth story.
Burr-Brown Corporation, which produces analog chips, also did extremely
well, as did Altera, Applied Materials and LSI Logic.
Q. WHAT OPPORTUNITIES DID YOU FIND OUTSIDE THE SEMICONDUCTOR GROUP?
A. The recent boom in technology stocks provided growth in most areas. In
addition to semiconductor companies, I also owned a variety of computer,
telecommunications and networking stocks. The dynamic growth of PC sales
drove good returns from such computer makers as Compaq, Dell and IBM. On
the telecommunications side, Nokia, Ericsson, DSC Communications and
Motorola all benefited from worldwide growth in the wireless arena. Such
networking names as Cisco Systems and Baynet also made strong contributions
to fund performance.
Q. GIVEN THE RECENT PERFORMANCE, I SUPPOSE IT SHOULDN'T BE A SURPRISE THAT
FUND ASSETS GREW MORE THAN FIVE-FOLD DURING THE PERIOD . . .
A. Part of that growth was asset appreciation, but inflows of new money
were very significant during the period. Fund assets grew from a little
over $200 million at the end of February to about $1.2 billion now.
Q. ARE YOU AT ALL CONCERNED ABOUT THE FUND'S ABILITY TO SUSTAIN ITS
DRAMATIC INCREASES?
A. Anytime a group of stocks is up this much, there always is concern that
there may be a correction. And I do expect there to be some near-term
volatility in the group. At the same time, I think the market fundamentals
remain very strong. Demand shows little sign of abating, and the pricing
environment continues to be favorable. I also believe that Microsoft's
recent introduction of Windows 95 will provide another leg of growth for
the PC market, which should help the semiconductor companies sustain their
robust earnings growth. All of which leads me to believe that the outlook
for further growth, especially within the semiconductor segment, remains
positive.
Q. WHAT WILL BE YOUR GAME PLAN GOING FORWARD?
A. I don't plan any changes in strategy. Since taking over the portfolio,
I've positioned it more heavily on "pure plays" in the semiconductor
industry, and I think that strategy should continue to provide solid
performance. I believe the growth prospects in semiconductors should remain
quite strong for at least the next six months and possibly longer.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FSELX
SIZE: as of August 31, 1995, more than
$1.2 billion
MANAGER: Marc Kaufman, since March 1995;
analyst, semiconductor industry, 1992-1995;
joined Fidelity in 1992
(checkmark)
ELECTRONICS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.6%
SHARES VALUE (NOTE 1)
CELLULAR - 0.5%
CELLULAR & COMMUNICATION SERVICES - 0.5%
AirTouch Communications, Inc. (a) 100,000 $ 3,250,000
Vodafone Group PLC sponsored ADR 50,000 2,093,750
5,343,750
COMMUNICATIONS EQUIPMENT - 5.6%
DATACOMMUNICATIONS EQUIPMENT - 0.8%
Cisco Systems, Inc. (a) 110,000 7,218,750
3Com Corp. (a) 50,000 1,950,000
9,168,750
TELEPHONE EQUIPMENT - 4.8%
ADC Telecommunications, Inc. (a) 6,100 235,350
DSC Communications Corp. (a) 129,000 6,772,500
Ericsson (L.M.) Telephone Co.
Class B ADR 210,000 4,488,750
Network Equipment Technologies (a) 45,500 1,706,250
Nokia Corp. AB sponsored ADR 487,600 33,827,250
Tellabs, Inc. (a) 50,000 2,322,265
U.S. Robotics Corp. 45,000 6,311,250
55,663,615
TOTAL COMMUNICATIONS EQUIPMENT 64,832,365
COMPUTER SERVICES & SOFTWARE - 0.4%
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.1%
Epic Design Technology (a) 29,000 1,250,625
PREPACKAGED COMPUTER SOFTWARE - 0.3%
Microsoft Corp. (a) 40,400 3,737,000
TOTAL COMPUTER SERVICES & SOFTWARE 4,987,625
COMPUTERS & OFFICE EQUIPMENT - 6.0%
COMPUTER PERIPHERALS - 0.2%
Cambex Corp. (a) 170,000 2,018,750
COMPUTER STORAGE DEVICES - 2.5%
ADAPTEC, Inc. (a) 694,100 29,499,250
COMPUTERS & OFFICE EQUIPMENT - 0.5%
NEC Corp. 421,000 5,529,810
ELECTRONIC COMPUTERS - 1.0%
International Business Machines Corp. 113,900 11,774,413
GRAPHICS WORKSTATIONS - 0.1%
Silicon Graphics, Inc. (a) 27,200 1,149,200
MINI & MICRO COMPUTERS - 1.7%
Apple Computer, Inc. 89,100 3,831,300
Compaq Computer Corp. (a) 240,100 11,464,775
Dell Computer Corp. (a) 56,000 4,312,000
19,608,075
TOTAL COMPUTERS & OFFICE EQUIPMENT 69,579,498
DRUGS & PHARMACEUTICALS - 0.1%
COMMERCIAL LABORATORY RESEARCH - 0.1%
Integrated Process Equipment Corp. (a) 41,500 1,499,188
ELECTRICAL EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 0.2%
Shinko Electric Industries Co. Ltd. 78,000 2,641,355
ELECTRICAL MACHINERY - 1.2%
Murata Manufacturing Co. Ltd. 362,000 14,487,428
RELAYS & INDUSTRIAL CONTROLS - 0.2%
Omron Corp. 97,000 2,140,072
TOTAL ELECTRICAL EQUIPMENT 19,268,855
SHARES VALUE (NOTE 1)
ELECTRONIC INSTRUMENTS - 18.3%
ELECTRONIC EQUIPMENT - 7.2%
Advantest Corp. 668,000 $ 38,523,961
Credence Systems Corp. (a) 322,110 11,354,378
LTX Corp. (a) 100,000 1,137,500
Megatest Corp. (a) 207,000 4,993,875
Plasma & Materials Technologies, Inc. 2,000 38,000
Teradyne, Inc. (a) 641,000 24,277,875
Varian Associates, Inc. 60,600 3,272,400
83,597,989
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 11.1%
Applied Materials, Inc. (a) 286,800 29,827,200
Electro Scientific Industries, Inc. (a) 20,900 705,375
KLA Instruments Corp. (a) 164,500 14,064,750
Kulicke & Soffa Industries, Inc. (a) 579,100 22,512,513
Lam Research Corp. 30,000 1,807,500
Novellus System, Inc. (a) 278,000 20,485,125
Silicon Valley Group, Inc. (a) 947,500 40,742,500
130,144,963
TOTAL ELECTRONIC INSTRUMENTS 213,742,952
ELECTRONICS - 64.3%
ELECTRONIC CAPACITORS - 0.5%
Kemet Corp. (a) 100,000 5,700,000
ELECTRONIC PARTS - WHOLESALE - 1.3%
Arrow Electronics, Inc. (a) 58,600 3,179,050
Avnet, Inc. 148,500 7,647,750
Marshall Industries (a) 16,100 511,175
NU Horizons Electronics Corp. (a) 100,000 1,062,500
Sterling Electronics Corp. (a) 153,200 3,006,550
15,407,025
ELECTRONIC RESISTORS - 0.2%
Yageo Corp. GDR (a) 174,643 2,095,716
ELECTRONICS & ELECTRONIC COMPONENTS - 8.1%
Cirrus Logic, Inc. (a) 620,000 33,790,000
Hitachi Ltd. 1,312,000 14,405,747
Kyocera Corp. 217,000 19,239,404
Kyocera Corp. ADR 10,000 1,782,500
Kyocera Corp. (warrants) (a) 2,000 3,950,000
Microsemi Corp. (a) 350,000 4,462,500
Rohm Co. Ltd. 165,000 10,209,852
Rohm Co. Ltd. (warrants) (a) 2,800 2,047,362
Vishay Intertechnology, Inc. 125,000 5,062,500
94,949,865
SEMICONDUCTORS - 54.2%
Actel Corp. (a) 353,000 5,868,625
Alliance Semiconductor Corp. (a) 212,450 8,312,106
Altera Corp. (a) 323,220 20,241,653
Analog Devices, Inc. (a) 1,867,900 64,676,038
Apollo Electronics Co. Ltd. (a) 9,000 221,652
Atmel Corp. (a) 775,200 24,515,700
Austria Mikro Systeme International (a) 18,000 3,158,262
Burr-Brown Corp. (a)(c) 1,126,300 37,167,900
Chips & Technologies, Inc. (a) 160,500 2,206,875
Cypress Semiconductor Corp. (a) 183,700 8,381,313
Electroglas, Inc. (a) 114,300 8,629,650
Genus, Inc. (a) 100,000 1,375,000
Integrated Device Technology, Inc. (a) 475,000 27,371,875
Integrated Silicon Solution (a)(c) 365,500 18,183,625
International Rectifier Corp. (a) 95,000 3,847,500
LSI Logic Corp. (a) 696,600 34,307,550
Linear Technology Corp. 234,300 18,978,300
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - CONTINUED
SEMICONDUCTORS - CONTINUED
Maxim Integrated Products, Inc. (a) 179,900 $ 13,717,375
Microchip Technology, Inc. (a) 336,900 12,802,200
Micron Technology, Inc. 1,398,600 107,517,375
Motorola, Inc. 230,000 17,192,500
National Semiconductor Corp. (a) 193,500 5,466,375
Nippon Steel Semiconductor Corp. 102 2,794,667
Opti, Inc. (a) 39,100 786,888
Quality Semiconductor, Inc. (a) 152,000 2,622,000
SGS-Thomson Microelectronic NV (a) 137,700 6,626,813
S-3, Inc. (a) 518,800 20,362,900
Samsung Electronics Co. Ltd.:
GDR partial dividend (b) 990 99,000
GDR representing shares (a)(b) 615 61,272
GDR representing shares
(non-vtg.) (a)(b) 8,603 538,978
GDR (vtg.) (a) 174 17,400
GDR (vtg.) (b) 664 66,400
GDR (vtg.) (New) (a) 34 3,387
GDS (b) 39,475 2,486,925
GDS (non-vtg.) (a) 12,685 794,715
GDS (non-vtg.) (Reg.) (a) 472,100 29,742,300
GDS (vtg.) 4,934 493,400
GDS (vtg.) (b) 35,500 4,650,500
(New) 163 20,660
(vtg.) 17,600 3,640,868
Siliconix, Inc. (a) 26,600 811,300
Tencor Instruments (a) 150,600 6,532,275
Texas Instruments, Inc. 100,200 7,502,475
Tower Semiconductor Ltd. (a) 27,500 855,938
Tokyo Electron Ltd. 920,000 37,196,511
Unitrode Corp. (a) 508,200 15,246,000
Wako Electric Co. Ltd. 10,000 219,600
Xilinx, Inc. (a) 994,600 42,643,475
Xicor, Inc. (a) 480,000 3,480,000
634,436,096
TOTAL ELECTRONICS 752,588,702
INDUSTRIAL MACHINERY & EQUIPMENT - 0.7%
SPECIAL INDUSTRIAL MACHINERY - 0.7%
Gasonics International Corp. (a) 57,500 1,998,125
Shinkawa Ltd. 124,000 4,657,157
Tylan General, Inc. (a) 123,000 2,060,250
8,715,532
PHOTOGRAPHIC EQUIPMENT - 1.1%
Nikon Corp. 933,000 12,829,347
TOTAL COMMON STOCKS
(Cost $968,999,348) 1,153,387,814
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
SHARES VALUE (NOTE 1)
ELECTRONICS - 0.0%
SEMICONDUCTORS - 0.0%
Samsung Electronics Co. Ltd.
(Cost $40,304) 400 $ 36,463
CONVERTIBLE BONDS - 1.2%
PRINCIPAL
AMOUNT
COMPUTERS & OFFICE EQUIPMENT - 0.0%
ELECTRONIC COMPUTERS - 0.0%
Acer, Inc. euro 4%, 6/10/01 $ 110,000 335,500
ELECTRONICS - 1.2%
SEMICONDUCTORS - 1.2%
United Microelectronics Corp.
1 1/4%, 6/8/04 (b) 1,120,000 1,873,200
euro 1 1/4%, 6/8/04 6,765,000 11,314,463
13,187,663
TOTAL CONVERTIBLE BONDS
(Cost $12,395,196) 13,523,163
REPURCHASE AGREEMENTS - 0.2%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 2,756,446 2,756,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $984,190,848) $ 1,169,703,440
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $9,776,275 or 0.8% of net
assets.
3. A company in which the fund has ownership of at least 5% of the voting
securities is an affiliated company. Transactions during the period with
companies that are or were affiliates are as follows:
PURCHASES SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Burr-Brown Corp. $ 435,925 $ 693,400 $ - $ 37,167,900
Integrated Silicon Solution - - - 18,183,625
Totals $ 435,925 $ 693,400 $ - $ 55,351,525
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,477,651,859 and $895,661,755, respectively (see Note 4 of
Notes to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $118,543 for the period
(see Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $8,528,000 and $7,079,000,
respectively. The weighted average interest rate paid was 6.2% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 76.0%
Japan 14.6
Korea 3.7
Finland 2.9
Taiwan (Free China) 1.3
Others (individually less than 1%) 1.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $984,535,699. Net unrealized appreciation aggregated
$185,167,741, of which $195,744,641 related to appreciated investment
securities and $10,576,900 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $7,628,000 which will expire on February 28, 2003.
ELECTRONICS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $2,756,000) (cost $984,190,848) - $ 1,169,703,440
See accompanying schedule
Receivable for investments sold 127,676,737
Receivable for fund shares sold 26,275,380
Dividends receivable 80,700
Interest receivable 2,557
Redemption fees receivable 5,305
Other receivables 33,192
Prepaid expenses 39,846
TOTAL ASSETS 1,323,817,157
LIABILITIES
Payable to custodian bank $ 6,410
Payable for investments purchased 35,745,221
Payable for fund shares redeemed 50,619,614
Accrued management fee 654,912
Other payables and accrued expenses 641,548
TOTAL LIABILITIES 87,667,705
NET ASSETS $ 1,236,149,452
Net Assets consist of:
Paid in capital $ 846,960,976
Accumulated net investment (loss) (2,202,898)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 205,878,782
Net unrealized appreciation (depreciation) on investments 185,512,592
NET ASSETS, for 35,660,374 shares outstanding $ 1,236,149,452
NET ASSET VALUE and redemption price per share ($1,236,149,452 (divided by) 35,660,374 shares) $34.66
Maximum offering price per share (100/97.00 of $34.66) $35.73
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 608,278
Dividends
Interest (including income on securities loaned of $26,866) 1,798,810
TOTAL INCOME 2,407,088
EXPENSES
Management fee $ 2,424,710
Transfer agent 1,989,628
Fees
Redemption fees (345,576
)
Accounting and security lending fees 294,274
Non-interested trustees' compensation 1,249
Custodian fees and expenses 32,769
Registration fees 255,961
Audit 18,590
Legal 748
Interest 2,458
Miscellaneous 3,920
Total expenses before reductions 4,678,731
Expense reductions (68,745 4,609,986
)
NET INVESTMENT INCOME (LOSS) (2,202,898
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including 215,297,077
realized gain of $419,017
on sales of investment in
affiliated issuers)
Foreign currency transactions (2,374 215,294,703
)
Change in net unrealized appreciation (depreciation) on investment securities 165,152,099
NET GAIN (LOSS) 380,446,802
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 378,243,904
OTHER INFORMATION $9,319,434
Sales Charges Paid to FDC
Deferred sales charges withheld $9,500
by FDC
Exchange fees withheld by FSC $258,975
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (2,202,898) $ (1,534,580
Net investment income (loss) )
Net realized gain (loss) 215,294,703 (9,362,352
)
Change in net unrealized appreciation (depreciation) 165,152,099 8,764,347
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 378,243,904 (2,132,585
)
Share transactions 1,736,033,652 612,603,897
Net proceeds from sales of shares
Cost of shares redeemed (1,097,721,827) (506,775,203
)
Paid in capital portion of redemption fees 3,161,186 1,742,948
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 641,473,011 107,571,642
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,019,716,915 105,439,057
NET ASSETS
Beginning of period 216,432,537 110,993,480
End of period (including accumulated net investment loss of $2,202,898 and $0, respectively) $ 1,236,149,452 $ 216,432,537
OTHER INFORMATION
Shares
Sold 61,890,203 33,789,699
Redeemed (37,162,096) (29,140,209
)
Net increase (decrease) 24,728,107 4,649,490
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED TEN MONTHS YEARS ENDED
AUGUST 31, 1995 FEBRUARY 28, ENDED APRIL 30,
FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.80 $ 17.67 $ 14.28 $ 11.81 $ 10.75 $ 9.11
Income from Investment Operations
Net investment income (loss) (.08) (.18) (.09) (.05) (.12) (.04)
Net realized and unrealized gain (loss) 14.83 2.11 6.09 2.33 1.00 1.53
Total from investment operations 14.75 1.93 6.00 2.28 .88 1.49
Less Distributions - - - - - (.01)
From net investment income
From net realized gain - - (2.75) - - -
Total distributions - - (2.75) - - (.01)
Redemption fees added to paid in capital .11 .20 .14 .19 .18 .16
Net asset value, end of period $ 34.66 $ 19.80 $ 17.67 $ 14.28 $ 11.81 $ 10.75
TOTAL RETURN B, C 75.05% 12.05% 46.24% 20.91% 9.86% 18.15%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 1,236,149 $ 216,433 $ 110,993 $ 48,027 $ 34,222 $ 18,178
Ratio of expenses to average net assets 1.15% A 1.71% 1.67% 1.69% A 2.16% 2.26%
Ratio of expenses to average net assets before 1.16% A 1.72% 1.67% 1.69% A 2.16% 2.26%
expense reductions
Ratio of net investment income (loss) to average (.55)% (.98)% (.52)% (.50)% (1.07)% (.45)%
net assets A A
Portfolio turnover rate 241% A 205% 163% 293% A 299% 268%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
</TABLE>
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past five and 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
SOFTWARE AND COMPUTER 30.13% 54.91% 298.69% 534.99%
SERVICES
SOFTWARE AND COMPUTER
SERVICES (INCL. 3% SALES CHARGE) 26.23% 50.27% 286.73% 515.94%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
SOFTWARE AND COMPUTER SERVICES 54.91% 31.86% 20.30%
SOFTWARE AND COMPUTER
SERVICES (INCL. 3% SALES CHARGE) 50.27% 31.06% 19.94%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select SoftwStandard & Po
08/31/85 9700.00 10000.00
09/30/85 9106.73 9687.00
10/31/85 9393.48 10134.54
11/30/85 10481.14 10829.77
12/31/85 10985.42 11353.93
01/31/86 11232.62 11417.51
02/28/86 12003.87 12271.54
03/31/86 12082.98 12956.29
04/30/86 13210.19 12809.89
05/31/86 13744.14 13491.37
06/30/86 13398.06 13719.38
07/31/86 11450.15 12952.46
08/31/86 12399.39 13913.54
09/30/86 11450.15 12762.89
10/31/86 12518.04 13499.31
11/30/86 12794.90 13827.34
12/31/86 12508.15 13474.74
01/31/87 15167.99 15289.79
02/28/87 16591.85 15893.74
03/31/87 16868.71 16353.07
04/30/87 17155.45 16207.52
05/31/87 17234.56 16348.53
06/30/87 16631.40 17174.13
07/31/87 16581.96 18044.86
08/31/87 17748.73 18717.93
09/30/87 17936.60 18308.01
10/31/87 13190.42 14364.46
11/30/87 11934.66 13180.83
12/31/87 13689.02 14183.89
01/31/88 13293.44 14781.03
02/29/88 14386.48 15469.83
03/31/88 14511.40 14991.81
04/30/88 14948.62 15158.22
05/31/88 14542.63 15290.10
06/30/88 15687.72 15991.91
07/31/88 14906.98 15931.15
08/31/88 13876.40 15389.49
09/30/88 14771.65 16045.08
10/31/88 13990.91 16491.13
11/30/88 13782.71 16255.31
12/31/88 14927.80 16539.78
01/31/89 16041.66 17750.49
02/28/89 15323.37 17308.50
03/31/89 14948.62 17711.79
04/30/89 16395.59 18631.03
05/31/89 16988.96 19385.59
06/30/89 15306.42 19275.09
07/31/89 14854.65 21015.63
08/31/89 15532.30 21427.54
09/30/89 15844.24 21339.68
10/31/89 16177.69 20844.60
11/30/89 16650.97 21269.83
12/31/89 16726.48 21780.31
01/31/90 16131.86 20318.85
02/28/90 16550.30 20580.96
03/31/90 17210.99 21126.36
04/30/90 17155.93 20598.20
05/31/90 19314.19 22606.52
06/30/90 19765.66 22452.80
07/31/90 17959.77 22380.95
08/31/90 15449.15 20357.71
09/30/90 13676.29 19366.29
10/31/90 13951.58 19283.02
11/30/90 15746.46 20528.70
12/31/90 16869.63 21101.45
01/31/91 19347.22 22021.47
02/28/91 20756.69 23596.01
03/31/91 21934.92 24167.03
04/30/91 21769.75 24225.03
05/31/91 22166.17 25271.56
06/30/91 20541.55 24114.12
07/31/91 21803.40 25237.84
08/31/91 23574.85 25835.97
09/30/91 22798.33 25404.51
10/31/91 23938.85 25744.93
11/30/91 21318.07 24707.41
12/31/91 24603.48 27533.94
01/31/92 28552.66 27021.81
02/29/92 29410.62 27373.09
03/31/92 27997.50 26839.32
04/30/92 27290.94 27628.39
05/31/92 27719.92 27763.77
06/30/92 26218.48 27350.09
07/31/92 28073.20 28468.71
08/31/92 25978.75 27885.10
09/30/92 27858.71 28214.15
10/31/92 30104.57 28312.90
11/30/92 32728.94 29278.37
12/31/92 33347.18 29638.49
01/31/93 35063.12 29887.45
02/28/93 34848.62 30293.92
03/31/93 35593.04 30933.12
04/30/93 34994.04 30184.54
05/31/93 38940.84 30993.49
06/30/93 40949.86 31083.37
07/31/93 39710.25 30959.04
08/31/93 42388.95 32132.38
09/30/93 43243.85 31884.96
10/31/93 43144.11 32544.98
11/30/93 42075.48 32235.80
12/31/93 44261.99 32625.86
01/31/94 45804.34 33735.14
02/28/94 46414.85 32820.92
03/31/94 41434.37 31389.92
04/30/94 41648.73 31791.71
05/31/94 37480.60 32313.10
06/30/94 34191.69 31521.43
07/31/94 35868.71 32555.33
08/31/94 39760.05 33890.10
09/30/94 41567.32 33059.79
10/31/94 44123.56 33803.64
11/30/94 43114.09 32572.51
12/31/94 44432.91 33055.56
01/31/95 43700.23 33912.69
02/28/95 47331.06 35234.27
03/31/95 50033.83 36274.03
04/30/95 51596.88 37342.30
05/31/95 52997.11 38834.87
06/30/95 57686.26 39737.01
07/31/95 61170.55 41054.68
08/31/95 61593.88 41157.73
Let's say you invested $10,000 in Fidelity Select Software and Computer
Services Portfolio on August 31, 1985 and paid a 3% sales charge. By August
31, 1995, your investment would have grown to $61,594 - a 515.94% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Microsoft Corp. 9.5
Micron Technology, Inc. 9.4
Oracle Systems Corp. 9.4
Novell, Inc. 7.3
Symantec Corp. 5.3
Intel Corp. 5.0
SAP AG 4.1
First Data Corp. 3.4
General Motors Corp. Class E 3.4
Computer Sciences Corp. 3.1
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 23.5
Row: 1, Col: 2, Value: 2.8
Row: 1, Col: 3, Value: 7.5
Row: 1, Col: 4, Value: 9.199999999999999
Row: 1, Col: 5, Value: 14.4
Row: 1, Col: 6, Value: 42.6
Prepackaged Computer
Software 42.6%
Semiconductors 14.4%
Data Processing 9.2%
Computer Services 7.5%
Mini & Micro Computers 2.8%
All Others 23.5%*
* INCLUDES SHORT-TERM INVESTMENTS
SOFTWARE & COMPUTER SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
John Hurley,
Portfolio Manager of
Fidelity Select Software and
Computer Services Portfolio
Q. HOW HAS THE FUND PERFORMED, JOHN?
A. I think it performed well. For the six months ended August 31, 1995, the
fund was up 30.13%, compared with the S&P 500's 16.81% gain. For the 12
months also ended August 31, it outperformed the market by a larger margin,
gaining 54.91% for the period, compared with a 21.45% return for the S&P.
Q. WHAT FACTORS INFLUENCED PERFORMANCE?
A. Software and computer service companies generally have performed pretty
well over the last six months, though they haven't really matched the
extraordinary returns seen in many of the other technology sectors. But
while the industry as a whole has done only okay, our fund actually did
quite a bit better than the norm. The reasons for that are two-fold: first,
the fund avoided most of the major "blow-ups" that occurred in the software
industry, where a number of stocks were severely punished; and second, I
was fortunate to have made good bets in a couple of places.
Q. WHERE DID YOU FIND THOSE GOOD OPPORTUNITIES?
A. One stock that helped quite a bit was Microsoft. I had not been a major
holder of this company in the past, but I got aggressive in buying it at
$60-$70 a share in March, mainly on the strength of its dominant position
in supplying operating systems for the PC market and also in anticipation
of its Windows 95 launch. And by the end of the period, Microsoft had risen
by about 45%. I also went a bit beyond the fund's usual holdings and made a
significant investment in Micron Technology, a top manufacturer of dynamic
RAM chips, for which there currently is huge worldwide demand. Micron has
done extraordinarily well - it rose about 150% during the period - and
helped the fund quite a bit. Another name that's done very well is Oracle
Systems, a producer of relational database and applications software for
the client-server market, which returned about 28% for the period. I also
bought into a couple of computer services stocks - Ceridian and First Data
- - that gave the fund a nice lift.
Q. ANY OTHER NAMES THAT YOU REALLY LIKED?
A. One in particular comes to mind - Electronics for Imaging - which makes
a product that allows you to use a copying machine as a printer off your
computer network, enabling creation of very high quality color images. The
company now virtually owns the market, when its stock price went up by
about 65% during the period, the fund took profits.
Q. WHAT DIDN'T WORK AS WELL AS YOU'D HOPED?
A. Unfortunately, I was not able to avoid entirely the problems at
Compuware, whose stock suffered significantly when their merger with
Uniface failed to pan out. Novell also hurt the fund a bit, when its
Netware and WordPerfect upgrades did not take off as quickly as expected.
While I continue to like Novell and have a big position in its stock, it
didn't really perform to my expectations during the period.
Q. SOUNDS LIKE IT'S BEEN AN UP-AND-DOWN YEAR FOR THE SOFTWARE STOCKS . . .
A. It really has been a tough year. For every ten stocks you show me that
are up, I'll show ten that are down. And I think that's always going to be
true about the industry; you'll probably never see a situation where a
rising tide lifts all boats. The reason for this is that software companies
all are special situations. The industry is not really constrained by
issues of production capacity, but rather by the market's perception of
product quality and overall marketing strategy. So, it's always going to be
a stock picker's market.
Q. WHAT'S YOUR OUTLOOK AND GAME PLAN AS WE MOVE FORWARD?
A. Actually, I'm feeling a bit better about software than I have in the
past. I think fundamentals are improving for a lot of companies. I believe
there is another upside leg to the Windows 95 story that will basically
help everyone who is writing applications programs for this new operating
system. I think mainframe software companies may have a tough road ahead
and, consequently, would expect enterprise software stocks could do well in
the next six months. I think there may be some good values in select
computer services stocks. So looking ahead, I'll continue looking for good
names to play in these areas.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FSCSX
SIZE: as of August 31, 1995, more than
$333 million
MANAGER: John Hurley, since August 1994;
analyst, PC software, database software and
mainframe software industries, since 1994;
joined Fidelity in 1993
(checkmark)
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 83.6%
SHARES VALUE (NOTE 1)
COMMUNICATIONS EQUIPMENT - 4.6%
DATACOMMUNICATIONS EQUIPMENT - 2.0%
3Com Corp. (a) 171,600 $ 6,692,400
TELEPHONE EQUIPMENT - 2.6%
DSC Communications Corp. (a) 102,000 5,355,000
Inter-Tel, Inc. 203,100 3,376,538
8,731,538
TOTAL COMMUNICATIONS EQUIPMENT 15,423,938
COMPUTER SERVICES & SOFTWARE - 56.2%
CAD/CAM/CAE - 1.0%
Ascend Communications, Inc. (a) 8,000 516,000
Computer Data Systems, Inc. 50,000 481,250
Network Peripherals, Inc. (a) 100,000 1,412,500
State of The Art, Inc. (a) 63,100 560,013
Stratacom, Inc. (a) 8,300 406,700
3,376,463
COMPUTER RELATED SERVICES - 0.0%
Thrustmaster, Inc. (a) 10,000 80,000
COMPUTER SERVICES - 7.5%
Bisys Group, Inc. (The) (a) 70,000 1,715,000
Computer Sciences Corp. (a) 174,100 10,489,525
Firefox Communications, Inc. (a) 500 9,750
SHL Systemhouse, Inc. (a) 546,000 3,605,600
SunGard Data Systems, Inc. (a) 350,000 9,712,500
25,532,375
DATA PROCESSING - 9.2%
Ceridian Corp. (a) 175,800 7,691,250
First Data Corp. 200,000 11,675,000
General Motors Corp. Class E 250,000 11,656,250
31,022,500
PREPACKAGED COMPUTER SOFTWARE - 38.5%
Boole & Babbage, Inc. (a) 1,500 45,188
Computron Software, Inc. 500 9,500
General Magic, Inc. (a) 89,400 1,463,925
Intuit (a) 50,000 2,153,125
Manugistics Group, Inc. (a) 55,000 852,500
Marcam Corp. (a) 72,500 815,625
Mercury Interactive Group Corp. (a) 169,300 3,830,413
Metrowerks, Inc. (a) 158,300 853,957
Microsoft Corp. (a) 350,000 32,375,000
Midisoft Corp. (a) 80,000 520,000
Novell, Inc. (a) 1,373,100 24,715,800
On Technology Corp. (a) 400 6,400
Oracle Systems Corp. (a) 796,800 31,971,600
Peoplesoft, Inc. (a) 56,500 3,898,500
Platinum Technology, Inc. (a) 183,800 4,342,275
SPSS, Inc. (a) 71,100 1,128,713
Sanctuary Woods Multimedia Corp. (a) 53,300 347,018
Symantec Corp. (a) 626,500 18,090,188
Systems Software Associates, Inc. 100,000 3,156,250
Xcellenet, Inc. 3,000 53,250
130,629,227
TOTAL COMPUTER SERVICES & SOFTWARE 190,640,565
COMPUTERS & OFFICE EQUIPMENT - 4.1%
COMPUTER PERIPHERALS - 1.0%
Applied Magnetics Corp. 300,000 3,450,000
SHARES VALUE (NOTE 1)
COMPUTER STORAGE DEVICES - 0.2%
ADAPTEC, Inc. (a) 10,000 $ 425,000
ELECTRONIC COMPUTERS - 0.1%
International Business Machines Corp. 3,200 330,800
MINI & MICRO COMPUTERS - 2.8%
Compaq Computer Corp. (a) 200,000 9,550,000
TOTAL COMPUTERS & OFFICE EQUIPMENT 13,755,800
ELECTRONIC INSTRUMENTS - 1.5%
SEMI-CONDUCTOR CAPITAL EQUIPMENT 1.5%
Applied Materials, Inc. (a) 50,000 5,200,000
ELECTRONICS - 16.0%
ELECTRONIC PARTS - WHOLESALE - 0.1%
ARC International Corp. (a) 133,500 525,656
ELECTRONICS & ELECTRONIC COMPONENTS - 1.5%
Sanmina Corp. (a) 109,200 4,968,600
SEMICONDUCTORS - 14.4%
Intel Corp. 275,000 16,878,125
Micron Technology, Inc. 416,800 32,041,500
48,919,625
TOTAL ELECTRONICS 54,413,881
METALS & MINING - 0.1%
PRIME NONFERROUS SMELTING - 0.1%
Tremont Corp. (a) 15,000 286,875
PHOTOGRAPHIC EQUIPMENT - 0.3%
3D Systems Corp. (a) 69,000 1,129,875
RETAIL & WHOLESALE, MISCELLANEOUS - 0.4%
MUSIC, TV, & ELECTRONIC STORES - 0.4%
Best Buy Co., Inc. (a) 50,000 1,362,500
TELEPHONE SERVICES - 0.4%
Frontier Corp. 52,400 1,460,650
TOTAL COMMON STOCKS
(Cost $213,914,845) 283,674,084
PREFERRED STOCKS - 4.9%
CONVERTIBLE PREFERRED STOCKS - 0.8%
PUBLISHING - 0.8%
BOOK PUBLISHING & PRINTING - 0.8%
Houghton Mifflin Co. $1.02 (stock
appreciation income linked) 43,200 2,721,600
NONCONVERTIBLE PREFERRED STOCKS - 4.1%
COMPUTER SERVICES & SOFTWARE - 4.1%
PREPACKAGED COMPUTER SOFTWARE - 4.1%
SAP AG 95,000 14,055,858
TOTAL PREFERRED STOCKS
(Cost $8,543,216) 16,777,458
REPURCHASE AGREEMENTS - 11.5%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 39,031,309 $ 39,025,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $261,483,061) $ 339,476,542
LEGEND
1. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $145,622,525 and $137,066,461, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $12,172 for the period
(see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $261,839,642. Net unrealized appreciation aggregated
$77,636,900, of which $83,378,956 related to appreciated investment
securities and $5,742,056 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $6,020,000 which will expire on February 28, 2003.
The fund has elected to defer to its fiscal year ending February 28, 1996
$1,988,000 of losses recognized during the period November 1,1994 to
February 28, 1995.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $39,025,000) (cost $261,483,061) - $ 339,476,542
See accompanying schedule
Cash 121
Receivable for investments sold 1,405,174
Receivable for fund shares sold 1,766,113
Dividends receivable 44,300
Redemption fees receivable 403
Other receivables 130,063
Prepaid expenses 17,979
TOTAL ASSETS 342,840,695
LIABILITIES
Payable for investments purchased $ 2,725,000
Payable for fund shares redeemed 6,527,800
Accrued management fee 168,460
Other payables and accrued expenses 274,314
TOTAL LIABILITIES 9,695,574
NET ASSETS $ 333,145,121
Net Assets consist of:
Paid in capital $ 240,095,020
Accumulated net investment (loss) (932,402
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 15,989,022
Net unrealized appreciation (depreciation) on investments 77,993,481
NET ASSETS, for 8,805,829 shares outstanding $ 333,145,121
NET ASSET VALUE and redemption price per share ($333,145,121 (divided by) 8,805,829 shares) $37.83
Maximum offering price per share (100/97.00 of $37.83) $39.00
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 218,790
Dividends
Interest (including income on securities loaned of $11,657) 857,989
TOTAL INCOME 1,076,779
EXPENSES
Management fee $ 858,810
Transfer agent 1,060,202
Fees
Redemption fees (105,667
)
Accounting and security lending fees 141,561
Non-interested trustees' compensation 1,022
Custodian fees and expenses 10,762
Registration fees 27,564
Audit 17,965
Legal 867
Miscellaneous 2,488
Total expenses before reductions 2,015,574
Expense reductions (6,393 2,009,181
)
NET INVESTMENT INCOME (LOSS) (932,402
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 24,488,790
Foreign currency transactions (99 24,488,691
)
Change in net unrealized appreciation (depreciation) on investment securities 45,530,085
NET GAIN (LOSS) 70,018,776
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 69,086,374
OTHER INFORMATION $1,856,656
Sales Charges Paid to FDC
Deferred sales charges withheld $2,746
by FDC
Exchange fees withheld by FSC $69,705
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (932,402 $ (1,835,964
Net investment income (loss) ) )
Net realized gain (loss) 24,488,691 (7,382,123
)
Change in net unrealized appreciation (depreciation) 45,530,085 17,246,063
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 69,086,374 8,027,976
Distributions to shareholders from net realized gains - (2,015,425
)
Share transactions 224,648,665 367,638,603
Net proceeds from sales of shares
Reinvestment of distributions - 1,989,953
Cost of shares redeemed (197,275,262 (317,960,229
) )
Paid in capital portion of redemption fees 240,258 730,383
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 27,613,661 52,398,710
TOTAL INCREASE (DECREASE) IN NET ASSETS 96,700,035 58,411,261
NET ASSETS
Beginning of period 236,445,086 178,033,825
End of period (including undistributed net investment loss of $932,402 and $0, respectively) $ 333,145,121 $ 236,445,086
OTHER INFORMATION
Shares
Sold 6,660,514 14,345,417
Issued in reinvestment of distributions - 80,950
Redeemed (5,988,289 (12,454,413
) )
Net increase (decrease) 672,225 1,971,954
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.07 $ 28.89 $ 27.62 $ 21.63 $ 19.77 $ 15.58
Income from Investment Operations
Net investment income (loss) (.11) (.26) (.34) (.07) F (.28) (.14) E
Net realized and unrealized gain (loss) 8.84 .67 7.92 5.88 4.37 4.06
Total from investment operations 8.73 .41 7.58 5.81 4.09 3.92
Less Distributions - (.33) (6.48) - (2.50) -
From net realized gain
Redemption fees added to paid in capital .03 .10 .17 .18 .27 .27
Net asset value, end of period $ 37.83 $ 29.07 $ 28.89 $ 27.62 $ 21.63 $ 19.77
TOTAL RETURN B, C 30.13% 1.97% 33.19% 27.69% 25.36% 26.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 333,145 $ 236,445 $ 178,034 $ 151,212 $ 89,571 $ 17,290
Ratio of expenses to average net assets 1.41% A 1.50% 1.57% 1.64% A 1.98% 2.50%
Ratio of expenses to average net assets before 1.42% A 1.52% 1.57% 1.64% A 1.98% 2.82%
expense reductions
Ratio of net investment income (loss) to average (.66)% (1.01)% (1.19)% (.37)% (1.30)% (.84)%
net assets A A
Portfolio turnover rate 107% A 164% 376% 402% A 348% 326%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.02 PER SHARE.
F INVESTMENT INCOME PER SHARE REFLECTS DIVIDENDS RECEIVED IN ARREARS
FROM UNISYS CORP., WHICH AMOUNTED TO $.03 PER SHARE.
</TABLE>
TECHNOLOGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
TECHNOLOGY 47.01% 54.32% 323.84% 321.21%
TECHNOLOGY
(INCL. 3% SALES CHARGE) 42.60% 49.69% 311.13% 308.58%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
TECHNOLOGY 54.32% 33.49% 15.46%
TECHNOLOGY
(INCL. 3% SALES CHARGE) 49.69% 32.68% 15.11%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select TechnoStandard & Poor'
08/31/85 9700.00 10000.00
09/30/85 8974.95 9687.00
10/31/85 9224.80 10134.54
11/30/85 10229.09 10829.77
12/31/85 10772.88 11353.93
01/31/86 10880.66 11417.51
02/28/86 11595.91 12271.54
03/31/86 11620.40 12956.29
04/30/86 12213.18 12809.89
05/31/86 11835.96 13491.37
06/30/86 11101.11 13719.38
07/31/86 9678.28 12952.46
08/31/86 10165.14 13913.54
09/30/86 9265.18 12762.89
10/31/86 9796.30 13499.31
11/30/86 10184.81 13827.34
12/31/86 9968.43 13474.74
01/31/87 11827.36 15289.79
02/28/87 13165.01 15893.74
03/31/87 12417.50 16353.07
04/30/87 12776.50 16207.52
05/31/87 13066.66 16348.53
06/30/87 12678.15 17174.13
07/31/87 12806.01 18044.86
08/31/87 13558.44 18717.93
09/30/87 13627.29 18308.01
10/31/87 8832.41 14364.46
11/30/87 7681.64 13180.83
12/31/87 8794.38 14183.89
01/31/88 8320.12 14781.03
02/29/88 9144.92 15469.83
03/31/88 9046.97 14991.81
04/30/88 9392.35 15158.22
05/31/88 9134.61 15290.10
06/30/88 9974.87 15991.91
07/31/88 9232.55 15931.15
08/31/88 8381.98 15389.49
09/30/88 8608.80 16045.08
10/31/88 8253.11 16491.13
11/30/88 8005.67 16255.31
12/31/88 8557.25 16539.78
01/31/89 9248.02 17750.49
02/28/89 8995.42 17308.50
03/31/89 8830.46 17711.79
04/30/89 9469.68 18631.03
05/31/89 10242.92 19385.59
06/30/89 9335.65 19275.09
07/31/89 9500.61 21015.63
08/31/89 9706.81 21427.54
09/30/89 9938.78 21339.68
10/31/89 9866.61 20844.60
11/30/89 9892.39 21269.83
12/31/89 10010.95 21780.31
01/31/90 9804.75 20318.85
02/28/90 10356.33 20580.96
03/31/90 10840.90 21126.36
04/30/90 10351.18 20598.20
05/31/90 11686.32 22606.52
06/30/90 11789.42 22452.80
07/31/90 11160.51 22380.95
08/31/90 9639.79 20357.71
09/30/90 8820.15 19366.29
10/31/90 9072.75 19283.02
11/30/90 10433.66 20528.70
12/31/90 11062.56 21101.45
01/31/91 12928.66 22021.47
02/28/91 13583.34 23596.01
03/31/91 14671.04 24167.03
04/30/91 13949.35 24225.03
05/31/91 14722.59 25271.56
06/30/91 13294.33 24114.12
07/31/91 14766.30 25237.84
08/31/91 15491.91 25835.97
09/30/91 15569.66 25404.51
10/31/91 15989.48 25744.93
11/30/91 15466.00 24707.41
12/31/91 17586.31 27533.94
01/31/92 18255.13 27021.81
02/29/92 18540.29 27373.09
03/31/92 17067.85 26839.32
04/30/92 16818.98 27628.39
05/31/92 16984.89 27763.77
06/30/92 15770.63 27350.09
07/31/92 16574.15 28468.71
08/31/92 15725.36 27885.10
09/30/92 16494.93 28214.15
10/31/92 17468.22 28312.90
11/30/92 18882.88 29278.37
12/31/92 19120.54 29638.49
01/31/93 19703.38 29887.45
02/28/93 19590.21 30293.92
03/31/93 19844.85 30933.12
04/30/93 19787.95 30184.54
05/31/93 21784.26 30993.49
06/30/93 22848.13 31083.37
07/31/93 22241.10 30959.04
08/31/93 23430.13 32132.38
09/30/93 23793.10 31884.96
10/31/93 23323.74 32544.98
11/30/93 23098.45 32235.80
12/31/93 24598.59 32625.86
01/31/94 25837.10 33735.14
02/28/94 26567.50 32820.92
03/31/94 25671.96 31389.92
04/30/94 25154.90 31791.71
05/31/94 25194.56 32313.10
06/30/94 23059.76 31521.43
07/31/94 23952.01 32555.33
08/31/94 26476.76 33890.10
09/30/94 26344.57 33059.79
10/31/94 27329.35 33803.64
11/30/94 26952.62 32572.51
12/31/94 27335.96 33055.56
01/31/95 26271.87 33912.69
02/28/95 27792.00 35234.27
03/31/95 29483.98 36274.03
04/30/95 31706.22 37342.30
05/31/95 32932.76 38834.87
06/30/95 35992.31 39737.01
07/31/95 39631.07 41054.68
08/31/95 40857.61 41157.73
Let's say you invested $10,000 in Fidelity Select Technology Portfolio on
August 31, 1985, and paid a 3% sales charge. By August 31, 1995, your
investment would have grown to $40,858 - a 308.58% increase. That compares
to $10,000 invested in the S&P 500, which would have grown to $41,158 over
the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Micron Technology, Inc. 8.7
Compaq Computer Corp. 4.3
Cisco Systems, Inc. 3.4
International Business Machines Corp. 2.9
Digital Equipment Corp. 2.7
Sun Microsystems, Inc. 2.5
Nippon Steel Semiconductor Corp. 2.3
Nokia Corp. AB sponsored ADR 2.2
LSI Logic Corp. 2.1
Oracle Systems Corp. 1.4
TOP INDUSTRIES AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 53.3
Row: 1, Col: 2, Value: 5.5
Row: 1, Col: 3, Value: 5.5
Row: 1, Col: 4, Value: 5.9
Row: 1, Col: 5, Value: 8.0
Row: 1, Col: 6, Value: 21.8
Semiconductors 21.8%
Mini & Micro Computers 8.0%
Electronic Computers 5.9%
Prepackaged Computer
Software 5.5%
Datacommunications
Equipment 5.5%
All Others 53.3%*
* INCLUDES SHORT-TERM INVESTMENTS
TECHNOLOGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Harry Lange,
Portfolio Manager of
Fidelity Select Technology Portfolio
Q. HARRY, HOW DID THE FUND DO?
A. It's been a powerful past six months for the technology sector. The fund
had a total return of 47.01% from March 1, 1995, through August 31, 1995.
That topped the performance of the S&P 500, which returned 16.81% during
the same period. For the 12 months ended August 31, the fund returned
54.32%, compared to 21.45% for the S&P 500.
Q. WHAT FUELED THE FUND'S PERFORMANCE?
A. Very strong earnings growth across the technology sector. In addition,
technology stocks experienced increases in valuation - a stock's price
relative to its earnings. This happened because more and more investors
began to view technology as a maturing growth industry, rather than as a
cyclical commodity industry prone to volatile swings in earnings. As a
result, they were willing to pay higher stock prices to achieve strong
earnings growth. Typically, technology cycles last two or three years, but
this year tech stocks have continued to rise right through what would have
been the typical end of their cycle.
Q. WHAT HAS TRIGGERED THIS CHANGE?
A. Two things. First, the industry has matured and ordering has become much
more efficient. For example, in years past, if a semiconductor company
received a big order from a personal computer company that didn't seem to
make sense given the business environment, it would usually fill the order
anyway. In the process, the semiconductor company might build a new plant,
and that excess capacity would eventually trigger volatility in the
company's earnings stream and stock price. Now, companies are communicating
better and are much smarter about adding capacity. The second factor
causing tech stocks to blow through their traditional cycle is the
continued strong sales of personal computers and related products. If
anything, the PC story has improved since the beginning of the year.
Q. WHICH OF THE FUND'S STOCKS HAVE BENEFITED MOST?
A. Semiconductor companies have shown the strongest gains as a group. These
include Micron Technology, Texas Instruments, LSI Logic and Intel. Because
PC sales remain strong, the demand for computer chips worldwide is still
far greater than the supply, which has resulted in significant earnings
gains for these companies. In addition, millions of personal computers will
need greater memory capacity to run Microsoft's new PC software product,
Windows 95. Micron, the fund's largest investment on August 31,
manufactures memory chips and could benefit from this increased demand.
Also, Micron has found ways to improve productivity - make more chips -
without a substantial increase in costs. Although the stock has risen
nearly 150% over the past six months, it remains relatively cheap on a
price-to-earnings basis, and I continue to like its prospects going
forward.
Q. WHERE ELSE HAVE YOU FOUND OPPORTUNITIES?
A. IBM continued to benefit from its multi-year restructuring program and
showed surprisingly strong earnings growth during the first two quarters of
1995. Compaq Computer - the fund's second largest investment at the end of
the period - successfully navigated through a new product cycle and turned
in strong performance. Other stocks that benefited from the favorable PC
environment included Cisco Systems, which manufactures computer networking
equipment, and Sun Microsystems, which makes workstations.
Q. AREN'T TECHNOLOGY STOCKS EXPENSIVE, NOW THAT PRICES HAVE RISEN SO
SHARPLY OVER THE PAST SIX MONTHS?
A. Broadly speaking, they're only somewhat more expensive than they were
six months ago on a price-to-earnings basis because earnings growth has
nearly kept pace with rising stock prices. And it's important to keep in
mind that many tech stocks were quite cheap at the beginning of the year.
So, although stock valuations are somewhat higher, in most cases they're
still very attractive relative to the broad market.
Q. WERE THERE ANY STOCKS THAT DIDN'T DO AS WELL AS YOU HAD HOPED?
A. Sure. Some companies disappointed for various reasons. Mainframe
computer manufacturer Amdahl turned in lower-than-expected earnings after
the company had trouble turning out its new generation of disk drives.
Software manufacturer Novell's revenues were hurt because customers have
put off buying its products until the company starts selling programs
geared toward Windows 95.
Q. HOW ABOUT THE NEXT SIX MONTHS?
A. I'm optimistic, based on my projections for PC sales for the rest of
1995 and 1996 and the windfall many companies should experience on the
heels of Windows 95. However, it's important to keep in mind that sharp,
rapid, short-term corrections can happen at any time. These stocks have a
history of volatility. But unless companies begin to report
lower-than-expected earnings, my long-term outlook remains quite positive.
FUND FACTS
START DATE: July 14, 1981
TRADING SYMBOL: FSPTX
SIZE: as of August 31, 1995, more than
$468 million
MANAGER: Harry Lange, since 1993; manager,
Fidelity Select Computers Portfolio, since
1992; research director, Fidelity Investments
Far East, 1988-1992; manager, Fidelity Select
Capital Goods Portfolio and Fidelity Select
Automation and Machinery Portfolio, 1988;
joined Fidelity in 1987
(checkmark)
TECHNOLOGY PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 82.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.0%
AIRCRAFT & PARTS - 0.0%
Hong Kong Aircraft &
Engineering Co. 50,000 $ 117,568
BROADCASTING - 0.6%
CABLE TV OPERATORS - 0.2%
Heartland Wireless Communications,
Inc. (a) 50,000 1,087,500
NTN Communications, Inc. (a) 3,800 21,850
1,109,350
TELEVISION BROADCASTING - 0.4%
Scandinavian Broadcasting Corp. (a) 60,000 1,627,500
TOTAL BROADCASTING 2,736,850
CELLULAR - 0.0%
CELLULAR & COMMUNICATION SERVICES - 0.0%
Advanced Information Services
(For. Reg.) 7,500 115,615
Millicom International Cellular SA (a) 2,800 82,600
198,215
COMMUNICATIONS EQUIPMENT - 9.6%
DATACOMMUNICATIONS EQUIPMENT - 5.5%
Broadband Technologies, Inc. (a) 20,000 490,000
Cisco Systems, Inc. (a) 245,900 16,137,188
General DataComm Industries, Inc. (a) 115,000 1,351,250
Network General Corp. (a) 127,500 4,486,406
Telebit Corp. (a) 100,000 406,250
3Com Corp. (a) 70,000 2,730,000
25,601,094
TELEPHONE EQUIPMENT - 4.1%
Colonial Data Technologies, Inc. (a) 50,000 906,250
Global Village Communication (a) 20,000 312,500
Natural Microsystems (a) 28,800 712,800
Network Equipment Technologies (a) 121,300 4,548,750
Newbridge Networks Corp. (a) 41,000 1,183,875
Nokia Corp. AB sponsored ADR (a) 150,000 10,406,250
Perceptron, Inc. (a) 30,400 820,800
Teledata Communications Ltd. (a) 7,300 69,350
18,960,575
TOTAL COMMUNICATIONS EQUIPMENT 44,561,669
COMPUTER SERVICES & SOFTWARE - 7.8%
CAD/CAM/CAE - 1.2%
Brooktrout Technology (a) 17,900 344,575
Chipcom Corp. (a) 29,300 1,175,663
Integrated Silicon Systems, Inc. (a) 10,000 285,000
Mentor Graphics Corp. (a) 1,900 36,575
Network Peripherals, Inc. (a) 14,300 201,988
Structural Dynamics Research Corp. (a) 200,000 3,625,000
5,668,801
COMPUTER & SOFTWARE STORES - 0.8%
Inacom Corp. (a) 37,300 466,250
MicroAge, Inc. (a) 238,000 2,796,500
Software Spectrum, Inc. (a) 8,000 192,000
3,454,750
COMPUTER RELATED SERVICES - 0.2%
Inso Corp. (a) 14,200 889,275
Wave Systems Corp. Class A (a) 43,300 184,025
1,073,300
SHARES VALUE (NOTE 1)
COMPUTER SERVICES - 0.1%
CompuCom Systems, Inc. (a) 8,400 $ 45,150
Datastream Systems, Inc. (a) 20,000 630,000
675,150
ELECTRONIC INFORMATION RETRIEVAL - 0.0%
Data Broadcasting Corp. (a) 15,000 133,125
Quickresponse Services, Inc. (a) 1,500 34,500
167,625
PREPACKAGED COMPUTER SOFTWARE - 5.5%
Acclaim Entertainment, Inc. (a) 20,000 505,000
Brock Control Systems, Inc. (a) 82,400 618,000
Broderbund Software, Inc. (a) 10,000 736,250
CBT Group PLC sponsored ADR (a) 19,000 750,500
Delrina Corp. (a) 10,000 167,417
EICON Technology Corp. (a) 21,000 187,507
Fourth Dimension Software (a) 38,000 247,000
Fourth Shift Corp. (a) 54,000 297,000
Geoworks (a) 101,800 1,297,950
Globalink, Inc. (a) 162,600 1,666,650
Inference Corp. Class A (a) 300 5,400
Learning Co. (a) 7,500 438,750
MDL Information Systems, Inc. (a) 16,000 272,000
Media Logic, Inc. (a) 65,000 211,250
Microsoft Corp. (a) 32,100 2,969,250
National Instrument Corp. (a) 51,000 1,102,875
Novell, Inc. (a) 101,400 1,825,200
Oracle Systems Corp. (a) 165,700 6,648,713
Platinum Technology, Inc. (a) 4,000 94,500
Softkey International, Inc. (a) 95,200 3,796,100
Systems Software Associates, Inc. 52,900 1,669,656
Wonderware Corp. (a) 9,300 320,850
25,827,818
TOTAL COMPUTER SERVICES & SOFTWARE 36,867,444
COMPUTERS & OFFICE EQUIPMENT - 24.5%
COMPUTER EQUIPMENT - 0.2%
GVC Corp. GDR (a)(b) 90,000 787,500
Stratus Computer, Inc. (a) 12,000 336,000
1,123,500
COMPUTER EQUIPMENT - WHOLESALE - 0.8%
GBC Technologies, Inc. (a) 206,000 1,622,250
Merisel, Inc. (a) 308,300 1,965,413
Tech Data Corp. (a) 24,700 293,313
3,880,976
COMPUTER PERIPHERALS - 1.5%
Fore Systems, Inc. (a) 20,000 675,000
In Focus Systems, Inc. (a) 100,000 3,112,500
Key Tronic Corp. (a) 104,000 1,586,000
Komag, Inc. (a) 23,800 1,481,550
Liuski International, Inc. (a) 2,500 10,938
Plannar Systems, Inc. (a) 5,000 100,000
Western Digital Corp. (a) 3,900 80,438
7,046,426
COMPUTER RENTAL & LEASING - 0.2%
Comdisco, Inc. 23,300 710,650
COMPUTER STORAGE DEVICES - 1.9%
Ameriquest Technologies, Inc. (a) 19,142 28,713
Hutchinson Technology, Inc. (a) 80,000 6,260,000
Maxtor Corp. (a) 100,000 543,750
Pinnacle Micro, Inc. (a) 84,500 1,795,625
Seagate Technology (a) 3,400 150,450
8,778,538
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
COMPUTERS - 0.8%
Gateway 2000, Inc. (a) 140,000 $ 3,727,500
COMPUTERS & OFFICE EQUIPMENT - 1.5%
Diebold, Inc. 25,000 1,165,625
Fujitsu Ltd. 50,000 543,869
OKI Electric Industry Co. Ltd. (a) 639,000 5,494,940
7,204,434
ELECTRONIC COMPUTERS - 5.0%
Bay Networks, Inc. (a) 80,000 3,800,000
Hewlett-Packard Co. 75,000 6,000,000
International Business Machines Corp. 130,090 13,448,054
TSL Holding, Inc. (a) 10,864 326
Tricord Systems, Inc. (a) 40,500 156,938
23,405,318
GRAPHICS WORKSTATIONS - 2.7%
Silicon Graphics, Inc. (a) 27,400 1,157,650
Sun Microsystems, Inc. (a) 201,500 11,661,813
12,819,463
MAGNETIC & OPTICAL RECORDING MEDIA - 0.4%
Boca Research, Inc. (a) 70,000 1,662,500
MAINFRAME COMPUTERS - 0.7%
Amdahl Corp. (a) 348,000 3,175,500
Control Data Systems, Inc. (a) 5,000 50,313
3,225,813
MINI & MICRO COMPUTERS - 8.0%
Apple Computer, Inc. 100,000 4,300,000
Compaq Computer Corp. (a) 418,600 19,988,150
Digital Equipment Corp. (a) 301,900 12,604,325
Tandem Computers, Inc. (a) 50,000 612,500
37,504,975
OFFICE AUTOMATION - 0.3%
Filenet Corp. (a) 11,400 521,550
Xerox Corp. 5,000 603,750
1,125,300
PENS, PENCILS, OFFICE SUPPLIES - 0.5%
International Imaging
Materials, Inc. (a) 99,700 2,342,950
TOTAL COMPUTERS & OFFICE EQUIPMENT 114,558,343
CONSUMER ELECTRONICS - 1.1%
APPLIANCES - 1.0%
Sanyo Electric Co. Ltd. 868,000 4,809,848
RADIOS, TELEVISIONS, STEREOS - 0.1%
Foster Electric Co. Ltd. 40,000 221,652
Odetics, Inc. Class A (a) 57,000 285,000
506,652
TOTAL CONSUMER ELECTRONICS 5,316,500
DEFENSE ELECTRONICS - 0.0%
Stanford Telecommunications, Inc. (a) 200 4,350
DRUGS & PHARMACEUTICALS - 2.3%
BIOTECHNOLOGY - 0.9%
Amgen, Inc. (a) 20,000 957,500
Applied Immune Sciences, Inc. (a) 1,100 8,525
COR Therapeutics, Inc. (a) 210,000 2,441,250
Genentech, Inc. (redeemable) (a) 20,000 942,500
Molecular Biosystems, Inc. (a) 871 7,404
4,357,179
SHARES VALUE (NOTE 1)
DRUGS - 1.4%
A.L. Laboratories, Inc. Class A 5,000 $ 105,000
Pfizer, Inc. 40,000 1,975,000
Schering-Plough Corp. 60,000 2,797,500
Warner-Lambert Co. 20,000 1,807,500
Watson Pharmaceuticals, Inc. (a) 400 16,550
6,701,550
TOTAL DRUGS & PHARMACEUTICALS 11,058,729
ELECTRICAL EQUIPMENT - 0.9%
ELECTRICAL EQUIPMENT - 0.7%
Fusion Systems Corp. (a) 7,500 213,750
IEC Electronics Corp. (a) 5,000 51,875
Shinko Electric Industries Co. Ltd. 84,000 2,844,536
3,110,161
TV & RADIO COMMUNICATION EQUIPMENT - 0.2%
Allen Group, Inc. (The) 2,400 78,300
Avid Technology, Inc. (a) 12,000 477,000
Leitch Technology (a) 20,000 303,211
858,511
TOTAL ELECTRICAL EQUIPMENT 3,968,672
ELECTRONIC INSTRUMENTS - 5.6%
ELECTRONIC EQUIPMENT - 3.2%
Advantest Corp. 48,000 2,768,189
ASECO Corp. (a) 15,000 277,500
Credence Systems Corp. (a) 163,350 5,758,088
Fluke (John) Manufacturing Co., Inc. 73,600 2,833,600
GenRad, Inc. (a) 41,500 342,375
Megatest Corp. (a) 43,000 1,037,375
Micrion Corp. (a) 30,700 383,750
Micro Component Technology, Inc. (a) 600 3,600
Teradyne, Inc. (a) 40,000 1,515,000
14,919,477
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 2.4%
Applied Materials, Inc. (a) 3,300 343,200
Electro Scientific Industries, Inc. (a) 32,300 1,090,125
KLA Instruments Corp. (a) 39,100 3,343,050
Kulicke & Soffa Industries, Inc. (a) 21,600 839,700
Lam Research Corp. (a) 18,400 1,108,600
Silicon Valley Group, Inc. (a) 104,100 4,476,300
11,200,975
TOTAL ELECTRONIC INSTRUMENTS 26,120,452
ELECTRONICS - 23.6%
CONNECTORS - 0.0%
Thomas & Betts Corp. 2,000 135,000
ELECTRONIC CAPACITORS - 0.2%
AVX Corp. (a) 31,500 1,000,125
ELECTRONIC PARTS - WHOLESALE - 0.2%
Pioneer Standard Electronics, Inc. 5,100 131,325
Sterling Electronics Corp. (a) 40,000 785,000
916,325
ELECTRONIC RESISTORS - 0.1%
Yageo Corp. GDR (a)(b) 21,322 255,864
ELECTRONICS & ELECTRONIC COMPONENTS - 2.3%
CTS Corp. 2,800 88,550
Cirrus Logic, Inc. (a) 50,000 2,725,000
GTI Corp. (a) 20,000 437,500
Hitachi Ltd. ADR 10,800 1,174,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - CONTINUED
ELECTRONICS & ELECTRONIC COMPONENTS - CONTINUED
Kyocera Corp. (warrants) (a) 3,000 $ 5,925,000
Photronics, Inc. (a) 2,550 89,210
Smartflex Systems, Inc. (a) 2,000 36,500
Toshiba Corp. 50,000 362,237
10,838,497
SEMICONDUCTORS - 20.8%
Act Manufacturing, Inc. (a) 13,000 251,875
Altera Corp. (a) 12,800 801,600
Atmel Corp. (a) 3,000 94,875
Burr-Brown Corp. (a) 98,000 3,234,000
Catalyst Semiconductor, Inc. (a) 67,500 354,375
Electroglas, Inc. (a) 20,000 1,510,000
Geotek Industries, Inc. (a) 99,000 773,438
Information Storage Devices (a) 600 16,350
Integrated Device Technology, Inc. (a) 32,600 1,878,575
International Rectifier Corp. (a) 6,000 243,000
Interpoint Corp. (a) 10,000 110,000
LSI Logic Corp. (a) 203,000 9,997,750
Lattice Semiconductor Corp. (a) 30,000 986,250
Linear Technology Corp. 20,000 1,620,000
Micro Linear Corp. (a) 90,300 1,422,225
Micron Technology, Inc. (a) 530,000 40,743,876
National Semiconductor Corp. (a) 100,900 2,850,425
Nippon Steel Semiconductor Corp. (a) 400 10,959,467
Quality Semiconductor, Inc. (a) 2,000 34,500
SGS-Thomson Microelectronic NV 70,900 3,412,063
Samsung Electronics Co. Ltd.:
GDR partial dividend (b) 1,614 161,400
GDR representing shares (a)(b) 1,209 120,453
GDR representing shares
(non-vtg.) (a)(b) 20,339 1,274,238
GDR (vtg.) (b) 6,113 611,300
GDS (b) 102,775 6,474,825
GDS (non-vtg.) (a) 2,335 146,288
GDS (non-vtg.) (Reg.) (a) 11,800 743,400
GDS (vtg.) (a) 174 17,400
Siliconix, Inc. (a) 600 18,300
Tencor Instruments (a) 9,400 407,725
Texas Instruments, Inc. 38,800 2,905,150
Tower Semiconductor Ltd. (a) 20,000 622,500
Tokyo Electron Ltd. 53,000 2,142,842
Uniphase Corp. (a) 17,000 537,625
97,478,090
TOTAL ELECTRONICS 110,623,901
INDUSTRIAL MACHINERY & EQUIPMENT - 1.5%
SPECIAL INDUSTRIAL MACHINERY - 1.5%
Fuji Machine Manufacturing Co.
Ltd. Ord. 50,000 1,908,671
Gasonics International Corp. (a) 10,000 347,500
PRI Automation, Inc. (a) 20,000 755,000
Tylan General, Inc. (a) 57,000 954,750
Veeco Instruments, Inc. (a) 140,400 3,159,000
7,124,921
SHARES VALUE (NOTE 1)
MEDICAL EQUIPMENT & SUPPLIES - 0.9%
MEDICAL SUPPLIES & APPLIANCES - 0.3%
Healthdyne, Inc. (a) 25,000 $ 242,188
Johnson & Johnson 17,300 1,193,700
Medical Technology Systems, Inc. (a) 9,800 49,613
1,485,501
MEDICAL TECHNOLOGY - 0.5%
Mallinckrodt Group, Inc. 11,900 447,738
Medtronic, Inc. 20,000 1,887,500
2,335,238
X-RAY ELECTRO-MEDICAL APPARATUS - 0.1%
Healthdyne Technologies, Inc. (a) 16,267 217,571
TOTAL MEDICAL EQUIPMENT & SUPPLIES 4,038,310
MEDICAL FACILITIES MANAGEMENT - 0.3%
HOME HEALTH CARE AGENCIES - 0.1%
Apria Healthcare Group, Inc. (a) 12,325 345,100
HOSPITALS - 0.2%
Columbia/HCA Healthcare Corp. 5,404 253,988
Health Management Associates,
Inc. Class A (a) 19,575 655,763
909,751
HOSPITALS, GENERAL MEDICAL - 0.0%
Charter Medical Corp. (a) 5,000 100,625
TOTAL MEDICAL FACILITIES MANAGEMENT 1,355,476
METALS & MINING - 0.5%
METAL ORES - 0.5%
Sumitomo Sitix Corp. 150,000 2,278,092
PHOTOGRAPHIC EQUIPMENT - 0.6%
Nikon Corp. 184,000 2,530,118
PRINTING - 1.1%
COMMERCIAL PRINTING, LITHOGRAPHIC - 1.1%
ASM Lithography Holding NV (a) 109,400 5,155,475
RETAIL & WHOLESALE, MISCELLANEOUS - 0.9%
MAIL ORDER - 0.9%
Micro Warehouse, Inc. (a) 87,400 4,173,350
STATIONARY & OFFICE SUPPLIES - WHOLESALE - 0.0%
Daisytek International Corp. (a) 1,000 23,500
TOTAL RETAIL & WHOLESALE, MISCELLEANOUS 4,196,850
SERVICES - 0.0%
ELECTRICAL REPAIR SHOPS - 0.0%
Cerplex Group, Inc. (a) 10,000 60,000
JEWELRY, SILVERWARE, & PLATED - 0.0%
Aurora Electronics (a) 7,000 24,500
TOTAL SERVICES 84,500
TELEPHONE SERVICES - 0.7%
Japan Telecom Co. Ltd. (b) 6 126,834
MFS Communications, Inc. (a) 3,300 146,025
SBC Communications, Inc. 10,000 506,250
Telebras PN (Pfd. Reg.) 48,000,000 2,083,200
U.S. Long Distance Corp. (a) 12,500 184,375
3,046,684
TOTAL COMMON STOCKS
(Cost $277,715,774) 385,943,119
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - 0.3%
Stet (Societa Finanziaria
Telefonica) Spa (Cost $970,657) 635,100 $ 1,554,547
CONVERTIBLE BONDS - 2.3%
PRINCIPAL
AMOUNT
COMPUTER SERVICES & SOFTWARE - 0.0%
PREPACKAGED COMPUTER SOFTWARE - 0.0%
Sterling Software, Inc. 5 3/4%,
2/01/03 $ 62,000 98,270
COMPUTERS & OFFICE EQUIPMENT - 1.3%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Data General Corp. 7 3/4%,
6/1/01 770,000 693,000
ELECTRONIC COMPUTERS - 0.9%
Acer, Inc. euro 4%, 6/10/01 1,410,000 4,300,500
OFFICE EQUIPMENT - WHOLESALE - 0.2%
Kinpo Electronics, Inc. euro
3%, 7/21/01 860,000 649,300
TOTAL COMPUTERS & OFFICE EQUIPMENT 5,642,800
ELECTRONICS - 1.0%
SEMICONDUCTORS - 1.0%
United Microelectronics Corp.:
1 1/4%, 6/8/04 (b) 870,000 1,455,075
euro 1 1/4%, 6/8/04 1,995,000 3,336,638
4,791,713
TOTAL CONVERTIBLE BONDS
(Cost $9,369,359) 10,532,783
REPURCHASE AGREEMENTS - 14.9%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 69,975,311 69,964,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $358,019,790) $ 467,994,449
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $11,267,489 or 2.4% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $173,079,782 and $119,674,503, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $29,058 for the period (see
Note 5 of Notes to Financial Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $3,890,375 and $3,977,300, respectively (see Note 7
of Notes to Financial Statements).
The maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $6,151,000 and $4,944,625,
respectively. The weighted average interest rate paid was 6.4% (see Note 6
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 82.0%
Japan 7.7
Taiwan (Free China) 2.3
Finland 2.2
Korea 2.0
Netherlands 1.8
Others (individually less than 1%) 2.0
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $358,752,932. Net unrealized appreciation aggregated
$109,241,517, of which $119,875,778 related to appreciated investment
securities and $10,634,261 related to depreciated investment securities.
TECHNOLOGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $69,964,000) (cost $358,019,790) - $ 467,994,449
See accompanying schedule
Receivable for investments sold 16,574,962
Receivable for fund shares sold 3,100,017
Dividends receivable 105,482
Interest receivable 23,331
Redemption fees receivable 1,327
Other receivables 168,633
Prepaid expenses 36,278
TOTAL ASSETS 488,004,479
LIABILITIES
Payable to custodian bank $ 5,096
Payable for investments purchased 5,819,841
Payable for fund shares redeemed 8,658,299
Accrued management fee 234,245
Other payables and 731,297
accrued expenses
Collateral on securities loaned, 3,977,300
at value
TOTAL LIABILITIES 19,426,078
NET ASSETS $ 468,578,401
Net Assets consist of:
Paid in capital $ 319,630,719
Accumulated net investment (loss) (955,452
)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 39,928,475
Net unrealized appreciation (depreciation) on investments 109,974,659
NET ASSETS, for 7,814,829 $ 468,578,401
shares outstanding
NET ASSET VALUE and redemption price per share ($468,578,401 (divided by) 7,814,829 shares) $59.96
Maximum offering price per share (100/97.00 of $59.96) $61.81
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 474,587
Dividends
Interest (including income on securities loaned of $46,851) 868,971
TOTAL INCOME 1,343,558
EXPENSES
Management fee $ 1,004,429
Transfer agent 1,144,545
Fees
Redemption fees (86,767
)
Accounting and security lending fees 166,276
Non-interested trustees' compensation 1,154
Custodian fees and expenses 17,718
Registration fees 36,278
Audit 15,078
Legal 922
Interest 7,071
Miscellaneous 2,042
Total expenses before reductions 2,308,746
Expense reductions (9,736 2,299,010
)
NET INVESTMENT INCOME (LOSS) (955,452
)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 40,916,082
Foreign currency transactions (381 40,915,701
)
Change in net unrealized appreciation (depreciation) on investment securities 79,623,815
NET GAIN (LOSS) 120,539,516
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 119,584,064
OTHER INFORMATION $1,841,280
Sales Charges Paid to FDC
Deferred sales charges withheld $21,418
by FDC
Exchange fees withheld by FSC $59,558
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ (955,452 $ (2,016,455
Net investment income (loss) ) )
Net realized gain (loss) 40,915,701 11,157,808
Change in net unrealized appreciation (depreciation) 79,623,815 (4,708,436
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 119,584,064 4,432,917
Distributions to shareholders from net realized gains (7,650,644 (7,172,823
) )
Share transactions 273,551,161 291,385,384
Net proceeds from sales of shares
Reinvestment of distributions 7,471,243 6,939,366
Cost of shares redeemed (154,411,973 (269,114,732
) )
Paid in capital portion of redemption fees 273,879 815,900
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 126,884,310 30,025,918
TOTAL INCREASE (DECREASE) IN NET ASSETS 238,817,730 27,286,012
NET ASSETS
Beginning of period 229,760,671 202,474,659
End of period (including net investment loss of $955,452 and $0, respectively) $ 468,578,401 $ 229,760,671
OTHER INFORMATION
Shares
Sold 5,164,094 7,232,669
Issued in reinvestment of distributions 167,818 187,906
Redeemed (2,981,126 (6,796,592
) )
Net increase (decrease) 2,350,786 623,983
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 42.05 $ 41.83 $ 34.62 $ 32.44 $ 27.06 $ 20.08
Income from Investment Operations
Net investment income (loss) (.15) (.39) (.24) E .13 F (.26) .14 G
Net realized and unrealized gain (loss) 19.40 1.95 11.04 4.68 5.56 6.46
Total from investment operations 19.25 1.56 10.80 4.81 5.30 6.60
Less Distributions - - (.13) - - -
From net investment income
In excess of net investment income - - - - (.16) -
From net realized gain (1.38) (1.50) (3.70) (2.75) - -
Total distributions (1.38) (1.50) (3.83) (2.75) (.16) -
Redemption fees added to paid in capital .04 .16 .24 .12 .24 .38
Net asset value, end of period $ 59.96 $ 42.05 $ 41.83 $ 34.62 $ 32.44 $ 27.06
TOTAL RETURN B, C 47.01% 4.61% 35.62% 16.48% 20.57% 34.76%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 468,578 $ 229,761 $ 202,475 $ 132,689 $ 105,954 $ 117,055
Ratio of expenses to average net assets 1.38% A 1.56% 1.54% 1.64% A 1.72% 1.83%
Ratio of expenses to average net assets before 1.39% A 1.57% 1.55% 1.64% A 1.72% 1.83%
expense reductions
Ratio of net investment income (loss) to average net (.57)% (.98)% (.65)% .52% A (.84)% .61%
assets A
Portfolio turnover rate 78% A 102% 213% 259% A 353% 442%
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D NET
INVESTMENT INCOME
(LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING
DURING THE PERIOD. E INVESTMENT INCOME PER SHARE REFLECTS DIVIDENDS
RECEIVED IN
ARREARS WHICH AMOUNTED TO $.03 PER SHARE. F INVESTMENT INCOME PER SHARE
REFLECTS DIVIDENDS RECEIVED IN ARREARS WHICH AMOUNTED TO $.10 PER
SHARE. G INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS WHICH
AMOUNTED TO $.06 PER SHARE AND $.20 PER SHARE RELATING TO A NONRECURRING
INITIATIVE TO
INVEST IN DIVIDEND INCOME PRODUCING SECURITIES WHICH WAS IN EFFECT FOR
A PORTION OF 1991.
</TABLE>
TELECOMMUNICATIONS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the
growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any
dividends (income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). If Fidelity had not reimbursed
certain expenses, the past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
TELECOMMUNICATIONS 23.09% 24.95% 175.14% 533.03%
TELECOMMUNICATIONS
(INCL. 3% SALES CHARGE) 19.40% 21.20% 166.89% 514.04%
S&P 500 16.81% 21.45% 102.17% 311.58%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. You
can compare these figures to the performance of the S&P 500 - a common
proxy for the U.S. stock market. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
TELECOMMUNICATIONS 24.95% 22.44% 20.27%
TELECOMMUNICATIONS
(INCL. 3% SALES CHARGE) 21.20% 21.69% 19.90%
S&P 500 21.45% 15.12% 15.20%
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
UNDERSTANDING PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of growth in the long run
and volatility in the short run. Unlike the broader
market, however, some sectors may not have
a history of growth in the long run. And, as
with all stock funds, the share price and
return of a fund that invests in a sector will
vary. That means if you sell your shares
during a sector downturn, you might lose
money. But if you can identify a sector that is
about to experience rapid growth you may
have the potential for above-average gains.
(checkmark)
$10,000 OVER 10 YEARS
Select TelecommStandard & Poor's
08/31/85 9700.00 10000.00
09/30/85 9319.42 9687.00
10/31/85 9670.72 10134.54
11/30/85 10080.58 10829.77
12/31/85 10734.41 11353.93
01/31/86 10958.85 11417.51
02/28/86 11720.02 12271.54
03/31/86 11963.98 12956.29
04/30/86 12422.64 12809.89
05/31/86 12734.91 13491.37
06/30/86 12793.46 13719.38
07/31/86 12168.91 12952.46
08/31/86 12998.39 13913.54
09/30/86 12198.19 12762.89
10/31/86 12822.74 13499.31
11/30/86 13047.18 13827.34
12/31/86 12861.77 13474.74
01/31/87 14481.69 15289.79
02/28/87 15701.51 15893.74
03/31/87 15506.34 16353.07
04/30/87 15272.13 16207.52
05/31/87 15857.65 16348.53
06/30/87 16462.68 17174.13
07/31/87 16979.88 18044.86
08/31/87 17780.08 18717.93
09/30/87 18141.15 18308.01
10/31/87 14950.10 14364.46
11/30/87 13925.45 13180.83
12/31/87 14818.58 14183.89
01/31/88 15510.38 14781.03
02/29/88 15971.58 15469.83
03/31/88 16041.76 14991.81
04/30/88 16563.12 15158.22
05/31/88 16773.67 15290.10
06/30/88 17645.94 15991.91
07/31/88 17395.29 15931.15
08/31/88 16753.62 15389.49
09/30/88 17786.30 16045.08
10/31/88 18147.24 16491.13
11/30/88 18307.66 16255.31
12/31/88 18932.56 16539.78
01/31/89 20469.00 17750.49
02/28/89 20549.87 17308.50
03/31/89 21388.84 17711.79
04/30/89 23006.15 18631.03
05/31/89 24704.31 19385.59
06/30/89 24100.79 19275.09
07/31/89 25930.46 21015.63
08/31/89 26550.52 21427.54
09/30/89 27526.34 21339.68
10/31/89 26550.52 20844.60
11/30/89 27221.39 21269.83
12/31/89 28565.78 21780.31
01/31/90 25467.90 20318.85
02/28/90 25373.07 20580.96
03/31/90 25963.14 21126.36
04/30/90 24435.28 20598.20
05/31/90 27006.30 22606.52
06/30/90 26468.92 22452.80
07/31/90 25257.16 22380.95
08/31/90 22317.34 20357.71
09/30/90 20873.78 19366.29
10/31/90 21600.83 19283.02
11/30/90 22833.66 20528.70
12/31/90 23881.97 21101.45
01/31/91 24730.68 22021.47
02/28/91 25557.90 23596.01
03/31/91 26277.69 24167.03
04/30/91 26836.33 24225.03
05/31/91 27115.65 25271.56
06/30/91 25987.62 24114.12
07/31/91 27459.43 25237.84
08/31/91 28275.91 25835.97
09/30/91 28641.18 25404.51
10/31/91 29769.21 25744.93
11/30/91 28630.43 24707.41
12/31/91 31249.98 27533.94
01/31/92 31293.39 27021.81
02/29/92 31684.15 27373.09
03/31/92 30566.14 26839.32
04/30/92 31716.72 27628.39
05/31/92 31347.67 27763.77
06/30/92 30619.64 27350.09
07/31/92 32262.70 28468.71
08/31/92 31881.86 27885.10
09/30/92 32502.09 28214.15
10/31/92 32828.52 28312.90
11/30/92 34536.87 29278.37
12/31/92 36036.87 29638.49
01/31/93 35926.02 29887.45
02/28/93 37899.13 30293.92
03/31/93 39451.01 30933.12
04/30/93 39534.24 30184.54
05/31/93 41125.62 30993.49
06/30/93 42898.86 31083.37
07/31/93 44149.22 30959.04
08/31/93 47479.74 32132.38
09/30/93 48161.76 31884.96
10/31/93 49548.52 32544.98
11/30/93 45490.52 32235.80
12/31/93 46745.45 32625.86
01/31/94 47691.82 33735.14
02/28/94 46197.56 32820.92
03/31/94 44753.11 31389.92
04/30/94 45551.89 31791.71
05/31/94 45284.39 32313.10
06/30/94 45246.18 31521.43
07/31/94 47755.61 32555.33
08/31/94 49144.07 33890.10
09/30/94 48570.85 33059.79
10/31/94 50889.21 33803.64
11/30/94 48188.71 32572.51
12/31/94 48764.45 33055.56
01/31/95 49441.01 33912.69
02/28/95 49883.38 35234.27
03/31/95 50507.90 36274.03
04/30/95 52077.70 37342.30
05/31/95 53499.21 38834.87
06/30/95 56076.52 39737.01
07/31/95 59636.94 41054.68
08/31/95 61403.86 41157.73
Let's say you invested $10,000 in Fidelity Select Telecommunications
Portfolio on August 31, 1985, and paid a 3% sales charge. By August 31,
1995, your investment would have grown to $61,404 - a 514.04% increase.
That compares to $10,000 invested in the S&P 500, which would have grown to
$41,158 over the same period - a 311.58% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1995
% OF FUND'S
INVESTMENTS
Ericsson (L.M.) Telephone Co. Class B ADR 7.7
Frontier Corp. 7.3
Ameritech Corp. 5.5
NYNEX Corp. 5.0
SBC Communications, Inc. 4.2
BellSouth Corp. 4.0
WorldCom, Inc. 3.9
Bell Atlantic Corp. 3.6
Phillips Electronics NV 2.8
MFS Communications, Inc. 2.8
TOP INDUSTRIES AS OF AUGUST 31, 1995
Telephone Services 53.9%
Telephone Equipment 16.9%
Cellular & Communication
Services 5.3%
Cable TV Operators 3.1%
Electrical Machinery 2.8%
All Others 18%*
Row: 1, Col: 1, Value: 18.0
Row: 1, Col: 2, Value: 2.8
Row: 1, Col: 3, Value: 3.1
Row: 1, Col: 4, Value: 5.3
Row: 1, Col: 5, Value: 16.9
Row: 1, Col: 6, Value: 53.9
* INCLUDES SHORT-TERM INVESTMENTS
TELECOMMUNICATIONS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
David Felman,
Portfolio Manager of
Fidelity Select Telecommunications Portfolio
Q. DAVID, HOW DID THE FUND PERFORM?
A. For the six months ended August 31, 1995, the fund had a total return of
23.09%. That beat the S&P 500's return of 16.81% for the same period. For
the year ended August 31, the fund was up 24.95%, compared to 21.45% for
the S&P.
Q. WHAT BOOSTED THE FUND'S RECENT RESULTS?
A. First, strong worldwide cellular growth continued to help the stocks of
wireless equipment providers. As long as people continue to buy cellular
phones - and cellular penetration globally is under 1% - these companies
benefit. The fund had large stakes in Ericsson and Nokia, for example, both
of which returned over 50% during the past six months. Second, many of the
regional Bell operating companies, or Baby Bells, did quite well.
Q. WHAT HELPED THE BABY BELLS?
A. Last year there was concern that the Baby Bells - which are basically
monopolies - might suffer if legislation opened up their markets. But
investors' fears started to ease as people began believing that entering
new markets such as long distance and cable could help offset the increase
in competition. As a result, the stocks of companies like Ameritech with
its midwest franchise and Bell South posted solid returns of about 20% for
the six months ended August 31.
Q. WHAT WAS THE STORY WITH LONG DISTANCE?
A. The winners were long-distance resellers - small companies that buy
excess capacity in bulk from carriers like AT&T and then resell it at a 10%
or 20% discount; they posted strong returns as they grew revenues at rates
usually better than 30% per year. The big carriers had plenty of excess to
sell, plus there was no problem reselling it at discount prices to small
and mid-size businesses. The resellers also did well on the prospect that
they might be bought out. In August, for example, Frontier, which used to
be Rochester Telephone, bought out Michigan-based ALC Communications.
Clearly, Frontier - and other regional carriers - want to become
long-distance powers. And the quickest way to do that is through the
acquisition of these smaller long-distance resellers. Fortunately, the fund
benefited from this particular merger since it had a sizable stake in ALC.
As a result of the merger, Frontier became the fund's second largest
investment. I also built a sizable stake in WorldCom, another long-distance
reseller.
Q. HAVE YOU CHANGED YOUR THINKING ON THE BIG LONG-DISTANCE CARRIERS?
A. No, I still think their prospects aren't as attractive as other areas of
the telecommunications sector. My concern is that at some point the Baby
Bells are going to be allowed to sell long distance services. Once that
happens, they'll be able to take business away from companies like AT&T,
MCI, and Sprint. With this in mind, I've steered clear of the large,
long-distance carriers and focused on the Baby Bells instead. If you look
at the fund's top 10 names, at the end of August half of them are Baby
Bells. They include NYNEX, which is attractive because of its cost-cutting
strategy, and SBC Communications (formerly Southwestern Bell), which has in
place a diversification strategy that has produced superior earnings
growth.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Several of the fund's smaller investments had flat or slightly negative
returns for the period, but nothing that had a major impact on the fund's
results. I was, however, disappointed that I didn't have bigger stakes in
the top performers. I also missed some companies that did quite well. For
example, last spring I sold the fund's stake in QualComm. The company had
developed a proprietary technology for boosting the number of phone calls
that wireless phone companies could carry over their networks. But
acceptance was slow, and the stock suffered. Once its prospects brightened,
the stock rebounded nicely.
Q. THE FUND HAS DONE WELL OVER THE PAST SIX MONTHS. CAN THE GOOD TIMES
CONTINUE?
A. It's hard to say, although I'm cautiously optimistic about the sector's
prospects. On the one hand, I think the telecommunications industry has
great potential over time, because a lot more data will be going over phone
lines whether they're wireless or not. On the other hand, it's always
complicated when you have new markets opening up. Federal legislation may
pass soon to open up markets. But if not, competition probably will
increase anyway as markets open on a state-by-state basis. Regardless, my
strategy will be the same: to invest in those companies with solid revenue
and earnings growth wherever I can find them.
FUND FACTS
START DATE: July 29, 1985
TRADING SYMBOL: FSTCX
SIZE: As of August 31, 1995, more than
$448 million
MANAGER: David Felman, since April 1994;
manager, Fidelity Select Chemicals Portfolio,
January 1995-July 1995; analyst, specialty
chemicals, construction and engineering
industries; joined Fidelity in 1992
(checkmark)
TELECOMMUNICATIONS PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 89.6%
SHARES VALUE (NOTE 1)
ADVERTISING - 0.3%
ADVERTISING AGENCIES - 0.3%
ADVO-Systems, Inc. 79,500 $ 1,480,715
APPLIANCE STORES - 0.1%
ELECTRIC APPLIANCES - WHOLESALE - 0.1%
Cellstar Corp. (a) 10,000 318,750
BROADCASTING - 3.7%
CABLE TV OPERATORS - 3.1%
Gaylord Entertainment Co. Class A (a) 60,270 1,672,493
Viacom, Inc. (a):
Class A 88,628 4,309,537
Class B (non-vtg.) 172,285 8,377,358
14,359,388
TELEVISION BROADCASTING - 0.6%
Heritage Media Corp. Class A (a) 19,700 556,525
Multimedia, Inc. (a) 50,000 2,125,000
2,681,525
TOTAL BROADCASTING 17,040,913
CELLULAR - 5.3%
CELLULAR & COMMUNICATION SERVICES - 5.3%
AirTouch Communications, Inc. (a) 60,200 1,956,500
BCE Mobile Communications, Inc. (a) 30,000 934,745
Cellular Communications, Inc. (a):
Class P 51,100 2,873,864
Series A (redeemable) 13,000 708,500
Century Telephone Enterprises, Inc. 180,887 5,042,225
Nextel Communications, Inc. Class A (a) 116,155 2,076,271
Rogers Cantel Mobile Communications,
Inc. Class B (non-vtg.) (a) 120,600 2,893,969
Rogers Communications, Inc. Class B (a) 420,000 4,297,037
Vanguard Cellular Systems, Inc.
Class A (a) 9,300 252,263
Vodafone Group PLC sponsored ADR 74,000 3,098,750
24,134,124
COMMUNICATIONS EQUIPMENT - 16.7%
TELEPHONE EQUIPMENT - 16.7%
ADC Telecommunications, Inc. (a) 6,600 255,750
DSC Communications Corp. (a) 121,200 6,363,000
Ericsson (L.M.) Telephone Co.:
Class B (a) 80,000 1,708,057
Class B ADR 1,656,000 35,397,000
InterVoice, Inc. (a) 10,000 221,250
Newbridge Networks Corp. (a) 18,400 531,300
Nokia Corp. AB:
Series A 154,800 10,579,673
sponsored ADR 166,800 11,571,750
Northern Telecom Ltd. 259,600 9,513,226
76,141,006
COMPUTER SERVICES & SOFTWARE - 3.1%
CAD/CAM/CAE - 0.7%
ECI Telecom Ltd. 110,000 2,268,750
EIS International, Inc. (a) 55,500 1,047,563
3,316,313
DATA PROCESSING - 0.8%
Automatic Data Processing, Inc. 10,000 650,000
Ceridian Corp. (a) 70,000 3,062,500
3,712,500
SHARES VALUE (NOTE 1)
PREPACKAGED COMPUTER SOFTWARE - 1.6%
Microsoft Corp. (a) 65,000 $ 6,012,500
Sybase, Inc. (a) 30,000 963,750
6,976,250
TOTAL COMPUTER SERVICES & SOFTWARE 14,005,063
COMPUTERS & OFFICE EQUIPMENT - 0.5%
COMPUTER PERIPHERALS - 0.5%
Norand Corp. (a) 65,000 2,502,500
ELECTRICAL EQUIPMENT - 5.4%
ELECTRICAL MACHINERY - 2.8%
Philips Electronics NV 285,800 12,861,000
TV & RADIO COMMUNICATION EQUIPMENT - 2.6%
Glenayre Technologies, Inc. 155,925 10,174,106
Ortel Corp. (a) 115,000 1,868,750
12,042,856
TOTAL ELECTRICAL EQUIPMENT 24,903,856
ELECTRONIC INSTRUMENTS - 0.1%
ELECTRONIC EQUIPMENT - 0.1%
Teradyne, Inc. (a) 15,400 583,275
ELECTRONICS - 2.1%
ELECTRONIC PARTS - WHOLESALE - 0.0%
Marshall Industries (a) 4,800 152,400
SEMICONDUCTORS - 2.1%
Intel Corp. 70,400 4,320,800
Motorola, Inc. 68,000 5,083,000
9,403,800
TOTAL ELECTRONICS 9,556,200
PRINTING - 0.7%
MANIFOLD BUSINESS FORMS - 0.7%
Reynolds & Reynolds Co. Class A 102,800 3,302,450
SERVICES - 0.1%
PUBLIC RELATIONS SERVICES - 0.1%
True North Communications 14,700 316,050
TELEPHONE SERVICES - 51.5%
Ameritech Corp. 493,500 25,291,875
Bell Atlantic Corp. 273,700 16,353,575
BellSouth Corp. 266,800 18,342,500
British Telecommunications PLC ADR 5,000 313,750
Cincinnati Bell, Inc. 54,100 1,474,225
Comsat Corp., Series 1 41,750 970,688
DDI Corp. Ord. 797 6,755,485
Frontier Corp. 1,196,800 33,360,800
GTE Corp. 187,773 6,877,186
Incomnet, Inc. (a) 119,000 1,829,625
Koninklijke PPT Nederland 236,000 8,144,865
Koninklijke PPT Nederland (a)(b) 44,200 1,525,437
Koninklijke PTT Nederland
sponsored ADR (b) 20,000 665,000
LCI International, Inc. (a) 143,900 5,738,013
MFS Communications, Inc. (a) 285,962 12,653,819
Nippon Telegraph & Telephone
Corp. Ord. 142 1,288,127
NYNEX Corp. 503,700 22,666,500
Pacific Telesis Group 193,400 5,487,725
SBC Communications, Inc. 380,600 19,267,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - CONTINUED
Southern New England
Telecommunications Corp. 58,800 $ 1,977,150
Sprint Corp. 25,600 908,800
Tele Danmark AS Class B 30,000 1,573,960
Tele Danmark AS Class B ADR 217,700 5,796,263
Telecom Argentina Stet France
Telecom SA 53,500 236,576
Telecom Italia Ord. 350,000 561,162
Telecom Italia Mobile Spa (a) 350,000 514,021
Telebras PN (Pfd. Reg.) 9,921,131 430,577
Telefonica de Argentina SA Class B 191,000 483,448
Telefonica de Espana SA sponsored ADR 20,000 812,500
Telephone & Data Systems, Inc. 180,805 7,413,005
U.S. West, Inc. 176,700 7,686,450
WorldCom, Inc. (a) 524,212 17,659,392
235,060,374
TOTAL COMMON STOCKS
(Cost $329,112,335) 409,345,276
PREFERRED STOCKS - 2.4%
CONVERTIBLE PREFERRED STOCKS - 1.4%
TELEPHONE SERVICES - 1.4%
LCI International, Inc. $1.25 10,000 526,250
MFS Communications, Inc. $2.68 90,000 3,735,000
Philippine Long Distance Telephone GDR 34,000 1,972,000
6,233,250
NONCONVERTIBLE PREFERRED STOCKS - 1.0%
TELEPHONE SERVICES - 1.0%
Stet (Societa Finanziaria
Telefonica) Spa (a) 945,200 2,313,585
Telecom Italia Mobile SA De Risp (a) 1,000,000 1,003,070
Telecom Italia Ord. 1,000,000 1,282,290
4,598,945
TOTAL PREFERRED STOCKS
(Cost $9,540,921) 10,832,195
CONVERTIBLE BONDS - 0.2%
PRINCIPAL
AMOUNT
COMMUNICATIONS EQUIPMENT - 0.2%
TELEPHONE EQUIPMENT - 0.2%
Ericsson (L.M.) Telephone Co.
4 1/4%, 6/30/00
(Cost $480,442) $ 345,700 971,417
REPURCHASE AGREEMENTS - 7.8%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.82% dated
8/31/95 due 9/1/95 $ 35,665,765 35,660,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $374,793,698) $ 456,808,888
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,190,437 or 0.5% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $122,353,660 and $81,419,118, respectively (see Note 4 of Notes
to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of Fidelity Management & Research Company. The
commissions paid to these affiliated firms were $45,200 for the period (see
Note 5 of Notes to Financial Statements).
The maximum loan and the average daily loan balance during the period for
which the loan was outstanding amounted to $4,178,000. The weighted aver-
age interest rate paid was 6.4% (see Note 6 of Notes to Financial
Statements).
At the period end, the value of securities loaned and the value of
collateral amounted to $7,292,500 and $7,402,000, respectively (see Note 7
of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 71.0%
Sweden 8.3
Netherlands 5.1
Finland 4.9
Canada 4.0
Japan 1.8
Denmark 1.6
Italy 1.2
Others (individually less than 1%) 2.1
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $375,734,047. Net unrealized appreciation aggregated
$81,074,841, of which $88,974,598 related to appreciated investment
securities and $7,899,757 related to depreciated investment securities.
TELECOMMUNICATIONS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $35,660,000) (cost $374,793,698) - $ 456,808,888
See accompanying schedule
Cash 844
Receivable for fund shares sold 1,330,835
Dividends receivable 141,533
Interest receivable 7,958
Other receivables 70,538
Prepaid expenses 13,885
TOTAL ASSETS 458,374,481
LIABILITIES
Payable for fund shares redeemed $ 1,733,479
Accrued management fee 221,946
Other payables and 406,482
accrued expenses
Collateral on securities loaned, 7,402,000
at value
TOTAL LIABILITIES 9,763,907
NET ASSETS $ 448,610,574
Net Assets consist of:
Paid in capital $ 358,407,236
Undistributed net investment income 2,674,059
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions 5,514,089
Net unrealized appreciation (depreciation) on investments 82,015,190
NET ASSETS, for 9,705,069 shares outstanding $ 448,610,574
NET ASSET VALUE and redemption price per share ($448,610,574 (divided by) 9,705,069 shares) $46.22
Maximum offering price per share (100/97.00 of $46.22) $47.65
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INVESTMENT INCOME $ 4,290,750
Dividends
Interest (including income on securities loaned of $57,164) 1,343,052
TOTAL INCOME 5,633,802
EXPENSES
Management fee $ 1,207,405
Transfer agent 1,556,698
Fees
Redemption fees (65,722
)
Accounting and security lending fees 199,970
Non-interested trustees' compensation 1,880
Custodian fees and expenses 20,312
Registration fees 13,885
Audit 19,374
Legal 1,477
Interest 2,241
Miscellaneous 6,034
Total expenses before reductions 2,963,554
Expense reductions (3,811 2,959,743
)
NET INVESTMENT INCOME 2,674,059
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 6,500,298
Foreign currency transactions 552 6,500,850
Change in net unrealized appreciation (depreciation) on investment securities 73,072,571
NET GAIN (LOSS) 79,573,421
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 82,247,480
OTHER INFORMATION $710,028
Sales Charges Paid to FDC
Deferred sales charges withheld $19,307
by FDC
Exchange fees withheld by FSC $42,863
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 2,674,059 $ 2,874,925
Net investment income
Net realized gain (loss) 6,500,850 13,108,456
Change in net unrealized appreciation (depreciation) 73,072,571 10,501,018
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 82,247,480 26,484,399
Distributions to shareholders - (3,125,414
From net investment income )
From net realized gain (7,713,250 (12,275,476
) )
TOTAL DISTRIBUTIONS (7,713,250 (15,400,890
) )
Share transactions 71,749,768 199,692,240
Net proceeds from sales of shares
Reinvestment of distributions 7,533,453 15,044,524
Cost of shares redeemed (74,721,229 (227,502,551
) )
Paid in capital portion of redemption fees 37,950 133,502
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 4,599,942 (12,632,285
)
TOTAL INCREASE (DECREASE) IN NET ASSETS 79,134,172 (1,548,776
)
NET ASSETS
Beginning of period 369,476,402 371,025,178
End of period (including undistributed net investment income of $2,674,059 and $0, respectively) $ 448,610,574 $ 369,476,402
OTHER INFORMATION
Shares
Sold 1,689,230 5,395,122
Issued in reinvestment of distributions 193,712 417,307
Redeemed (1,814,176 (6,175,717
) )
Net increase (decrease) 68,766 (363,288)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED TEN MONTHS YEARS ENDED
ENDED FEBRUARY 28, ENDED APRIL 30,
AUGUST 31, 1995 FEBRUARY 28,
SELECTED PER-SHARE DATA D (UNAUDITED) 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 38.34 $ 37.10 $ 34.19 $ 29.22 $ 24.98 $ 23.19
Income from Investment Operations
Net investment income .28 .29 .25 .29 .36 .31
Net realized and unrealized gain (loss) 8.42 2.54 7.00 5.29 4.13 1.86
Total from investment operations 8.70 2.83 7.25 5.58 4.49 2.17
Less Distributions - (.33) E (.20) (.18) (.28) (.43)
From net investment income
From net realized gain (.82) (1.27) E (4.18) (.48) - -
Total distributions (.82) (1.60) (4.38) (.66) (.28) (.43)
Redemption fees added to paid in capital - .01 .04 .05 .03 .05
Net asset value, end of period $ 46.22 $ 38.34 $ 37.10 $ 34.19 $ 29.22 $ 24.98
TOTAL RETURN B, C 23.09% 7.98% 21.90% 19.49% 18.19% 9.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 448,611 $ 369,476 $ 371,025 $ 134,338 $ 78,533 $ 55,162
Ratio of expenses to average net assets 1.48% A 1.55% 1.53% 1.74% A 1.90% 1.97%
Ratio of expenses to average net assets before expense 1.48% A 1.56% 1.54% 1.74% A 1.90% 1.97%
reductions
Ratio of net investment income to average net assets 1.34% A .77% .64% 1.16% A 1.32% 1.35%
Portfolio turnover rate 45% 107% 241% 115% A 20% 262%
A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
</TABLE>
MONEY MARKET PORTFOLIO
PERFORMANCE
PERFORMANCE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of its dividends (or income).
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 MONTH YEAR YEARS YEARS
S
MONEY MARKET 2.85% 5.39% 24.19% 76.46%
MONEY MARKET
(INCL. 3% SALES CHARGE) -0.23% 2.22% 20.46% 71.17%
Average All Taxable
Money Market Fund 2.78% 5.25% 23.68% 75.30%
Consumer Price Index 1.33% 2.62% 16.19% 41.57%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050 without including
the effect of the 3% sales charge. To measure how the fund's performance
stacked up against its peers, you can compare it to the average all taxable
money market fund, which reflects the performance of 756 all taxable money
market funds with similar objectives tracked by IBC/Donoghue's MONEY FUND
REPORT(registered trademark) over the past six months. Comparing the fund's
performance to the consumer price index helps show how your investment did
compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1995 YEAR YEARS YEARS
MONEY MARKET 5.39% 4.43% 5.84%
MONEY MARKET
(INCL. 3% SALES CHARGE) 2.22% 3.79% 5.52%
Average All Taxable
Money Market Fund 5.25% 4.34% 5.77%
Consumer Price Index 2.62% 3.05% 3.54%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELD
Row: 1, Col: 1, Value: 4.26
Row: 1, Col: 2, Value: 4.08
Row: 1, Col: 3, Value: 2.45
Row: 2, Col: 1, Value: 4.470000000000001
Row: 2, Col: 2, Value: 4.84
Row: 2, Col: 3, Value: 2.68
Row: 3, Col: 1, Value: 5.85
Row: 3, Col: 2, Value: 5.49
Row: 3, Col: 3, Value: 2.88
Row: 4, Col: 1, Value: 5.970000000000001
Row: 4, Col: 2, Value: 5.51
Row: 4, Col: 3, Value: 2.89
Row: 5, Col: 1, Value: 5.41
Row: 5, Col: 2, Value: 5.25
Row: 5, Col: 3, Value: 2.84
6% -
4% -
2% -
0%
Money Market
Average All
Taxable Money
Market Fund
MMDA
8/30/94 11/29/94 2/28/95 5/30/95 8/29/95
Money Market 4.26% 4.47% 5.85% 5.97% 5.41%
Average All
Taxable Money
Market Fund 4.08% 4.84% 5.49% 5.51% 5.25%
8/25/94 11/30/94 3/1/95 5/31/95 8/30/95
MMDA 2.45% 2.68% 2.88% 2.89% 2.84%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average all taxable money market fund and the
average bank money market deposit account (MMDA). Figures for the average
all taxable money market fund are from the IBC/Donoghue's MONEY FUND
REPORT.(registered trademark) The MMDA average is supplied by BANK RATE
MONITOR.(Trademark)
COMPARING PERFORMANCE
There are some important differences between
a bank money market deposit account (MMDA)
and a money market fund. First, the U.S.
government neither insures nor guarantees a
money market fund. In fact, there is no
assurance that a money fund will maintain a $1
share price. Second, a money market fund
returns to its shareholders income earned by the
fund's investments after expenses. This is in
contrast to banks, which set their MMDA rates
periodically based on current interest rates,
competitors' rates, and internal criteria.
(checkmark)
MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
John Todd,
Portfolio Manager of Fidelity Select Money
Market Portfolio
Q. JOHN, CAN YOU BRING US UP TO DATE ON DEVELOPMENTS IN THE INVESTMENT
CLIMATE DURING THE PAST SIX MONTH?
A. Sure. Last February, when the period began, we were coming off a very
strong 1994, during which the economy expanded at a rapid pace and interest
rates rose dramatically. During the fourth quarter of 1994, gross domestic
product grew at an annual rate of 5.1%. Responding to continued rapid
growth and the threat of inflation, the Federal Reserve in February 1995
raised the federal funds rate - the interest rate banks charge each other
for overnight loans - one- half percentage point. It was the seventh rate
increase in little more than a year and lifted the federal funds rate to
6%, exactly double what it had been when the cycle of rate increases began.
But by then, the seeds of an eventual slowdown had already been planted.
Q. WHY DID THE ECONOMIC GROWTH RATE SUDDENLY SLOW DOWN IN EARLY 1995?
A. There were many reasons, of course, but one of the most important was
the impact of the Mexican currency crisis in December 1994. The collapse of
the peso led to a sudden, sharp decline in U.S. exports to Mexico, which
had a ripple effect throughout the U.S. economy, especially in the
manufacturing sector, leading to slower growth, layoffs, and a decline in
consumer confidence. Consequently, economic growth declined during the
first quarter of 1995 to an annual rate of 2.7%. That was close to the
Fed's long-term target growth rate of 2.5%, and so throughout the spring
and early summer the Fed stood pat. But as time passed, it became apparent
that the hoped-for soft landing of the economy was in jeopardy, and indeed
was in danger of slipping into recession. In July, after a slow second
quarter in which the economy expanded at a rate of only 1.1%, the Fed
reversed policy, cutting the federal funds rate one-quarter percentage
point.
Q. WHERE DID THAT LEAVE THINGS AT THE END OF THE PERIOD?
A. The economy seems to have stabilized. We've seen some improvement in job
growth lately, as well as a modest rebound in the housing and auto sectors.
Car and home sales had fallen off dramatically during the second quarter of
1995 but were helped later in the summer by declining consumer interest
rates. Overall, we've seen a so-called flattening of the yield curve, with
longer-term interest rates falling more sharply than short-term rates. That
partly reflects a growing consensus among market participants that despite
stirrings of new growth, the inflation risk remains low.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. The fund's average maturity at the beginning of the period was 31 days,
reflecting the continuing uncertainty in the market and the possibility of
further rate increases. As it became clear that the Fed was finished
raising rates, at least for the time being, I moved gradually out the yield
curve, buying longer-term securities and extending the fund's average
maturity to almost 52 days by the end of June. Since then, as the yield
curve has flattened, I've brought the fund's average maturity back down to
around 36 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1995 was 5.31%, compared to
5.85% on February 28, 1995. The fund's six month total return was 2.85%,
compared to 2.78% for the all average taxable money market fund, according
to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. The consensus in the market seems to be that conditions have stabilized
and there's no immediate need for the Fed to cut rates again. Those who see
the next rate cut coming sooner rather than later argue the Fed may
anticipate the restrictive impact of possible Congressional deficit
reduction initiatives by taking steps now to ease money market rates. My
view is that, with elections coming in 1996, Congress is unlikely to make
the kind of dramatic cuts that would result in an economic slowdown so
there's no need for the Fed to act right away. In any case, there's enough
uncertainty that I'll probably want to preserve some flexibility by moving
the fund's average maturity back out to around 50 days as opportunities
present themselves.
FUND FACTS
START DATE: August 30, 1985
TRADING SYMBOL: FSMMKT
SIZE: As of August 31, 1995 more than $644
million
MANAGER: John Todd, since January 1991;
manager Spartan Money Market Fund, since
1989, Daily Money Fund: Money Market and
Fidelity Institutional Cash Portfolios: Money
Market, since 1992; joined Fidelity in 1981
(checkmark)
MONEY MARKET PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
BANKERS' ACCEPTANCES - 0.5%
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
DOMESTIC BANKERS' ACCEPTANCES - 0.5%
CHEMICAL BANK
11/1/95 6.06% $ 2,100,000 $ 2,079,006
11/20/95 6.08 1,060,167 1,046,267
3,125,273
CERTIFICATES OF DEPOSIT - 39.9%
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.8%
ABN-AMRO BANK
9/11/95 6.00 5,000,000 5,000,000
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 25.1%
BANK OF MONTREAL
9/29/95 5.90 10,000,000 10,000,000
BANQUE NATIONALE DE PARIS
11/28/95 5.75 10,000,000 10,000,000
BAYERISCHE LANDESBANK GIROZENTRALE
10/23/95 5.75 25,000,000 25,000,000
BAYERISCHE VEREINSBANK A.G.
9/19/95 5.77 10,000,000 10,000,000
9/20/95 5.77 10,000,000 10,000,000
9/22/95 5.77 10,000,000 10,000,000
CANADIAN IMPERIAL BANK OF COMMERCE
9/29/95 5.90 10,000,000 10,000,000
FUJI BANK, LTD.
9/26/95 5.89 6,000,000 6,000,000
INDUSTRIAL BANK OF JAPAN, LTD.
10/11/95 5.85 6,000,000 6,000,000
NATIONAL WESTMINSTER BANK, PLC
11/8/95 6.05 20,000,000 20,002,711
11/13/95 5.80 5,000,000 5,000,000
ROYAL BANK OF CANADA
12/13/95 6.31 5,000,000 5,012,959
SUMITOMO BANK, LTD.
10/13/95 5.88 5,000,000 5,000,110
SWISS BANK CORP.
11/6/95 5.77 25,000,000 25,000,000
12/4/95 5.77 5,000,000 5,000,000
162,015,780
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 14.0%
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOC.
9/29/95 5.91 10,000,000 10,000,000
CHEMICAL BANK
11/20/95 5.76 10,000,000 10,000,000
LANDESBANK HESSEN - THURINGEN
9/21/95 5.75 25,000,000 24,999,724
MITSUBISHI BANK, LTD.
9/25/95 5.89 5,000,000 4,999,993
TORONTO-DOMINION BANK
10/10/95 6.02 15,000,000 15,000,776
WESTDEUTSCHE LANDESBANK
11/1/95 5.75 25,000,000 25,000,417
90,000,910
257,016,690
COMMERCIAL PAPER - 33.1%
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
AMERICAN HOME PRODUCTS
9/15/95 5.80% $ 5,000,000 $ 4,988,819
10/24/95 5.82 5,000,000 4,957,747
ASSET SECURITIZATION COOP. CORP.
9/11/95 5.79 10,000,000 9,984,028
A.H. ROBINS COMPANY, INCORPORATED
9/7/95 5.99 5,000,000 4,995,067
BENEFICIAL CORP.
9/29/95 5.81 10,000,000 9,955,667
CHRYSLER FINANCIAL CORPORATION
9/13/95 5.87 1,000,000 998,050
10/16/95 5.88 5,000,000 4,963,625
11/7/95 5.85 2,000,000 1,978,467
COMMERZBANK U.S. FINANCE, INC.
9/12/95 5.77 10,000,000 9,982,553
9/13/95 5.77 10,000,000 9,980,967
12/14/95 5.88 3,075,000 3,024,276
12/15/95 5.88 1,900,000 1,868,357
CORESTATES CAPITAL CORP. (A)
9/8/95 5.84 15,000,000 15,000,000
CORPORATE ASSET FUNDING CO., INC.
10/11/95 5.76 16,000,000 15,898,667
DEAN WITTER, DISCOVER & CO.
9/1/95 5.78 15,000,000 15,000,000
ENTERPRISE FUNDING CORP.
9/12/95 5.82 10,000,000 9,982,339
FORD MOTOR CREDIT, PLC
10/16/95 5.76 4,000,000 3,971,600
GENERAL ELECTRIC CAPITAL CORP.
9/1/95 5.82 (a) 5,000,000 5,000,000
9/7/95 5.95 2,000,000 1,998,040
GENERAL MOTORS ACCEPTANCE CORP.
9/14/95 6.05 5,000,000 4,989,221
11/22/95 5.89 8,000,000 7,894,311
GLAXO HOLDINGS, PLC
11/28/9 5.81 5,000,000 4,930,089
GOLDMAN SACHS GROUP, L.P. (THE)
9/18/95 6.02 5,000,000 4,986,046
HOUSEHOLD FINANCE CORP.
9/25/95 5.91 15,000,000 14,941,800
MONSANTO CO.
10/20/95 6.00 10,000,000 9,920,103
PREFERRED RECEIVABLES FUNDING CORP.
9/19/95 5.78 5,000,000 4,985,625
9/27/95 5.78 5,000,000 4,979,236
SEARS ROEBUCK ACCEPTANCE CORP.
9/18/95 6.00 10,000,000 9,972,092
11/8/95 5.82 1,000,000 989,139
VICTORIA, TREASURY CORP. OF
9/25/95 5.78 10,000,000 9,961,666
213,077,597
FEDERAL AGENCIES - 0.8%
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
FEDERAL FARM CREDIT BANK - AGENCY COUPONS (A) - 0.8%
9/1/95 5.99% $ 5,000,000 $ 4,998,006
BANK NOTES - 7.6%
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOC.
9/1/95 5.82 (a) 3,000,000 2,998,248
10/20/95 5.75 17,000,000 16,999,964
BOATMEN'S NATIONAL BANK OF ST. LOUIS (A)
9/15/95 5.86 4,000,000 3,999,377
COMERICA BANK - DETROIT (A)
12/1/95 5.81 5,000,000 4,996,300
NATIONSBANK OF TEXAS
9/28/95 6.15 5,000,000 5,000,319
WACHOVIA BANK OF NORTH CAROLINA, N.A.
9/26/95 5.75 5,000,000 4,999,947
9/27/95 5.75 10,000,000 9,999,889
48,994,044
MASTER NOTES (A) - 1.1%
J.P. MORGAN SECURITIES
9/1/95 6.08 7,000,000 7,000,000
MEDIUM-TERM NOTES (A) - 5.3%
ABBEY NATIONAL TREASURY SERVICES (B)
9/30/95 6.00 8,000,000 8,000,000
GENERAL ELECTRIC CAPITAL CORP.
9/1/95 5.96 5,000,000 4,999,225
GENERAL MOTORS ACCEPTANCE CORP.
11/7/95 5.98 5,000,000 5,000,000
GOLDMAN SACHS GROUP, L.P. (THE) (B)
9/1/95 5.97 4,000,000 4,000,000
12/16/95 5.89 4,000,000 4,000,000
NORWEST CORP.
9/15/95 6.00 8,000,000 8,000,000
33,999,225
SHORT-TERM NOTES (A) (C) - 3.1%
SMM TRUST COMPANY (1995-I)
9/13/95 5.98 6,000,000 5,998,707
SMM TRUST COMPANY (1995-J)
9/15/95 5.88 14,000,000 14,000,000
19,998,707
TIME DEPOSITS - 1.5%
MITSUBISHI BANK, LTD.
9/7/95 5.91 10,000,000 10,000,000
REPURCHASE AGREEMENTS - 7.1%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Government obligations),
in a joint trading account at 5.87%
dated 8/31/95 due 9/1/95 $ 46,064,511 $ 46,057,000
TOTAL INVESTMENTS - 100% $ 644,266,542
TOTAL COST FOR INCOME TAX PURPOSES - $644,266,542
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $16,000,000 or 2.5% of net
assets.
3. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
SMM Trust Company:
(1995-I) 5/31/95 $ 5,998,263
(1995-J) 5/31/95 $ 14,000,000
INCOME TAX INFORMATION
At February 28, 1995, the fund had a capital loss carryforward of
approximately $30,600 of which $3,200, $21,400, and $6,000 will expire on
February 28, 1998, 2000, and 2002, respectively.
MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $46,057,000) - See accompanying $ 644,266,542
schedule
Cash 5,441,260
Interest receivable 3,226,791
TOTAL ASSETS 652,934,593
LIABILITIES
Payable for investments purchased $ 7,994,548
Accrued management fee 130,699
Other payables and accrued expenses 207,876
TOTAL LIABILITIES 8,333,123
NET ASSETS $ 644,601,470
Net Assets consist of:
Paid in capital $ 644,612,050
Accumulated net realized gain (loss) on investments (10,580
)
NET ASSETS, for 644,606,792 $ 644,601,470
shares outstanding
NET ASSET VALUE, offering price and redemption price per share ($644,601,470 (divided by) 644,606,792 shares) $1.00
Maximum offering price per share (100/97 of $1.00) $1.03
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
INTEREST INCOME $ 19,104,894
EXPENSES
Management fee $ 777,175
Transfer agent fees 816,033
Accounting fees and expenses 48,301
Non-interested trustees' 1,147
compensation
Custodian fees and expenses 16,216
Registration fees 99,734
Audit 35,364
Legal 2,630
Reports to shareholders 6,238
Miscellaneous 1,070
TOTAL EXPENSES 1,803,908
NET INTEREST INCOME 17,300,986
NET REALIZED GAIN (LOSS) 19,958
ON INVESTMENTS
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,320,944
OTHER INFORMATION
Sales charges paid to FDC $2,047,913
Deferred sales charges withheld $33,872
by FDC
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 17,300,986 $ 28,489,953
Net interest income
Net realized gain (loss) 19,958 34,131
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,320,944 28,524,084
Distributions to shareholders from net interest income (17,300,986) (28,489,953)
Share transactions at net asset value of $1.00 per share 2,778,227,747 4,782,122,991
Proceeds from sales of shares
Reinvestment of distributions from net interest income 16,137,360 26,192,515
Cost of shares redeemed (2,722,927,575) (4,753,862,525)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES RESULTING FROM SHARE TRANSACTIONS 71,437,532 54,452,981
TOTAL INCREASE (DECREASE) IN NET ASSETS 71,457,490 54,487,112
NET ASSETS
Beginning of period 573,143,980 518,656,868
End of period $ 644,601,470 $ 573,143,980
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED TEN MONTHS ENDED YEARS ENDED
AUGUST 31, 1995 FEBRUARY 28, FEBRUARY 28, APRIL 30,
SELECTED
PER-SHARE
DATA (UNAUDITED) 1995 1994 1993 1992 1991
Net asset value, beginning
of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment
Operations .028 .042 .026 .026 .048 .073
Net interest income
Less
Distributions (.028) (.042) (.026) (.026) (.048) (.073)
From net interest income
Net asset value,
end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B 2.85% 4.28 2.62 2.63% 4.93 7.50
% % % %
Ratios and Supplemental Data
Net assets, end
of period (000
omitted) $ 644,601 $ 573,144 $ 518,657 $ 431,133 $ 542,620 $ 608,394
Ratio of expenses
to average net
assets .58% A .65 .72 .56% A .64 .73
% % % %
Ratio of net interest
income to average
net assets 5.54% A 4.19 2.59 3.09% A 4.84 7.20
% % % %
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Select Portfolios (the trust) is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The trust
has thirty-five equity funds (the fund or the funds) which invest primarily
in securities of companies whose principal business activities fall within
specific industries; and a money market fund which invests in high quality
money market instruments. Each fund is authorized to issue an unlimited
number of shares. The American Gold Portfolio and the Precious Metals and
Minerals Portfolio may also invest in certain precious metals. The
following summarizes the significant accounting policies of the funds:
SECURITY VALUATION:
EQUITY FUNDS. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith following consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities maturing within
sixty days are valued at amortized cost or original cost plus accrued
interest, both of which approximate current value. Direct investments in
precious metals in the form of bullion are valued at the most recent bid
price quoted by a major bank on the New York Commodities Exchange.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
FOREIGN CURRENCY TRANSLATION. The accounting records of each fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME:
EQUITY FUNDS. Dividend income is recorded on the ex-dividend date, except
certain dividends from foreign securities where the ex-dividend date may
have passed, are recorded as soon as the funds are informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
MONEY MARKET FUND. Interest income, which includes amortization of premium
and accretion of discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. For each equity fund, Fidelity Management and Research
Company (FMR) bears all organizational expenses except for registering and
qualifying the fund and shares of the fund for distribution under federal
and state securities law, which are borne by each fund and amortized over
one year.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income for the money market fund. Distributions
are recorded on the ex-dividend date for all other funds.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
non-taxable dividends, foreign currency transactions, net operating losses,
litigation, expiring capital loss carryforwards and losses deferred due to
wash sales and excise tax regulations. The funds also utilized earnings and
profits distributed to shareholders on redemption of shares as a part of
the dividends paid deduction for income tax purposes. Permanent book and
tax basis differences relating to shareholder distributions will result in
reclassifications to paid in capital.
REDEMPTION FEES. Shares redeemed (including exchanges) from an equity fund
are subject to redemption fees. Shares held less than 30 days are subject
to a short-term redemption fee equal to .75% of the net asset value of
shares redeemed. Shares held 30 days or more are subject to a long-term
redemption fee
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REDEMPTION FEES - CONTINUED
equal to the lesser of $7.50 or .75% of the net asset value of shares
redeemed. The long-term redemption fee and the first $7.50 of the
short-term redemption fee are accounted for as a reduction of transfer
agent expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on
each fund and its shareholders. The remainder of the short-term redemption
fee is accounted for as an addition to paid in capital.
There is a $7.50 fee for shares exchanged into another Fidelity fund (see
Note 5 of Notes to Financial Statements). This is in addition to the
applicable redemption fees.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The equity funds may use forward
foreign currency contracts to facilitate transactions in foreign securities
and to manage each funds' currency exposure. Contracts to buy generally are
used to acquire exposure to foreign currencies, while contracts to sell are
used to hedge a fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (SEC), the funds, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The funds, through their custodian, receive delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the funds, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
funds to borrow from, or lend money to, other participating funds.
INDEXED SECURITIES. The funds may invest in indexed securities whose values
are linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other underlying instruments. The
funds use these securities to increase or decrease their exposure to
different underlying instruments and to gain exposure to markets that might
be difficult to invest in through conventional securities. Indexed
securities may be more volatile than their underlying instruments, but any
loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The funds are permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $1,050,000 and
$19,998,707 or 0.2% and 3.1% of the net assets of Biotechnology Portfolio
and Money Market Portfolio, respectively.
3. JOINT TRADING ACCOUNT.
At the end of the period, the following funds had 20% or more of their
total investments in repurchase agreements through a joint trading account.
These repurchase agreements were with entities whose creditworthiness has
been reviewed and found satisfactory by FMR. The maturity values of the
joint trading account investments were $22,783,683 for Leisure Portfolio,
$35,276,702 for Industrial Materials Portfolio, $39,247,344 for Regional
Banks Portfolio, and $208,456,695 for Biotechnology Portfolio, all at
5.82%. The investments in repurchase agreements through the joint trading
account are summarized as follows:
SUMMARY OF JOINT TRADING
Dated August 31, 1995, due September 1, 1995
Number of dealers or banks 26
Maximum amount with one dealer or bank 17.85%
Aggregate principal amount of agreements $16,889,053,000
Aggregate maturity amount of agreements $16,891,781,769
Aggregate market value of collateral $17,254,482,483
Coupon rates of collateral 0% to 15 3/4%
Maturity dates of collateral 9/7/95 to 8/15/25
4. PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and sales of securities (other than
short-term securities) is included under the caption "Other Information" at
the end of each equity fund's schedule of investments.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a monthly
fee.
For each equity fund, the monthly fee is calculated on the basis of a group
fee rate plus a fixed individual fund fee rate applied to the average net
assets of each fund. The group fee rate is the weighted average of a series
of rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2700% to .5200% for the
period. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%. For the period, the management fee was
equivalent to an annualized rate of .62% of average net assets for each
equity fund.
For the money market fund, FMR receives a monthly fee that is calculated on
the basis of a group fee rate plus a fixed individual fund fee rate applied
to the average net assets of the fund and an income-based fee. The group
fee rate is the weighted average of a series of rates and is based on the
monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1200% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during those periods,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .03%. The
income based fee is added only when the fund's yield exceeds 5%. At that
time, the fee would equal 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. For the
period, the management fee was equivalent to an annualized rate of .25% of
average net assets.
SUB-ADVISER FEE. As the money market fund's investment sub- adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
SALES LOAD. Fidelity Distributors Corporation (FDC), an affiliate of FMR,
is the general distributor of each fund. FDC is paid a 3% sales charge on
sales of shares of each fund. Prior to October 12, 1990, FDC was paid a 2%
sales charge and a 1% deferred sales charge. Shares purchased before
October 12, 1990 are subject to the deferred sales charge upon redemption
or exchange to any other Fidelity fund (other than Select funds). The
amounts received by FDC for sales charges and deferred sales charges are
shown under the caption "Other Information" on each fund's Statement of
Operations.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the funds' transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the funds' accounting
records and administers their security lending program. The security
lending fee is based on the number and duration of lending transactions.
The accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
EXCHANGE FEES. FSC charges an exchange fee of $7.50 to cover administrative
costs associated with exchanges out of an equity fund to any other Fidelity
fund. The exchange fees retained by FSC are shown under the caption "Other
Information" on each fund's Statement of Operations.
BROKERAGE COMMISSIONS. Each equity fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms are shown under the caption
"Other Information" at the end of each applicable fund's schedule of
investments.
6. BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The funds have established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, each fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. At
the period end, the maximum loan and average daily loan balances during the
periods for which loans were outstanding are shown under the caption "Other
Information" on each fund's schedule of investments.
7. SECURITY LENDING.
Certain equity funds loaned securities to certain brokers who paid the fund
negotiated lenders' fees during the period. These fees are included in
interest income. Each fund receives U.S. Treasury obligations and/or cash
as collateral against the loaned securities, in an amount at least equal to
102% of the market value of the loaned securities at the inception of each
loan. This collateral must be maintained at not less than 100% of the
market value of the loaned securities during the period of the loan. For
funds with loans outstanding at the period end, the value of the securities
loaned and the value of collateral held are shown under the caption "Other
Information" on each fund's schedule of investments.
8. EXPENSE REDUCTIONS.
FMR directed certain portfolio trades to brokers who paid a portion of the
funds' expenses (soft-dollar arrangement). For the period, the aggregate
reductions under this arrangement totalled $389,526.
9. BENEFICIAL INTEREST.
At the end of the period, certain shareholders were record owners of more
than 25% of the total outstanding shares of the following funds:
BENEFICIAL INTEREST
NUMBER OF %
FUND SHAREHOLDERS OWNERSHIP
Construction and Housing 1 49.3 Insurance 1 36.4
STATISTICAL ROUNDUP: FIDELITY SELECT PORTFOLIOS(REGISTERED TRADEMARK)
LEGEND
TOTAL RETURNS include change in share price and reinvestment of dividends
and capital gains. CUMULATIVE TOTAL RETURNS do not reflect Select's 3%
sales charge. However, each Fund Update includes load-adjusted cumulative
total returns. AVERAGE ANNUAL RETURNS are load-adjusted. Average Annual
Returns assume a steady compounded rate of return and are not year-by-year
results, which fluctuated over the periods shown. LIFE OF FUND figures are
from commencement of operations to August 31, 1995.
Figures for the S&P 500(registered trademark), an unmanaged index of common
stock prices, include reinvestment of dividends. S&P 500 is a registered
trademark of Standard & Poor's Corporation.
If the advisor had not reimbursed certain expenses for some of the funds
during the periods shown, those funds' returns would have been lower.
Expense reimbursements may be revised at any time.
All performance numbers are historical; each equity fund's share price and
return will vary and shareholders may have a gain or loss when they sell
their shares.
VOLATILITY
A fund's RELATIVE VOLATILITY measures the fund's volatility to the
volatility of a benchmark index, in this case, the S&P 500. By definition,
the S&P 500 has a relative volatility of 1.0. Relative volatility is
calculated by comparing a fund's standard deviation of monthly returns over
a three year period to the comparable standard deviation of the S&P 500.
(Standard deviation measures the range within which a fund's returns have
fallen over a specified period of time). Relative volatility measures are
not calculated for funds which are less than three years old.
Relative volatility measures are given to investors to assist in
determining the historical volatility relationship between the fund and a
benchmark index. THE CALCULATIONS ARE NOT MEANT TO PREDICT PERFORMANCE OR
FUTURE VOLATILITY and may change quickly as fund composition, company
fundamentals, and market conditions change.
MEDIAN PRICE/SALES
This figure represents the median price-to-sales ratio for all the stocks
in a fund on a given date. A stock's price-to-sales ratio compares the
company's market value with its total revenue. The ratio is calculated by
dividing the stock price by the most recent 12 months' revenues per share.
All price-to-sales ratios are from company 10Q filings. Excluded from the
median price/sales calculations are foreign companies without ADRs
(American Depository Receipts), IPOs (Initial Public Offerings) and certain
financial companies.
MEDIAN PRICE/BOOK
This figure represents the median price-to-book ratio of all the stocks in
a fund on a given date. A stock's price-to-book ratio compares the
company's market value with its book value or net asset value. The ratio is
calculated by dividing the stock price by the book value per share. All
price-to-book ratios are from company 10Q filings. Excluded from the median
price/book calculations are foreign companies without ADRs and certain
financial companies.
STATISTICAL ROUNDUP(DAGGER) (UNAUDITED)
CUMULATIVE TOTAL RETURNS AVERAGE ANNUAL RETURNS OPENING CLOSING
FOR PERIODS ENDED 8/31/95 FOR PERIODS ENDED 8/31/95 NAV NAV
YTD(double dagger) 1 YEAR LIFE OF FUND 1 YEAR 5 YEARS LIFE OF FUND 3/1/95
8/31/95
Air Transportation (12/16/85) 46.66% 20.65% 151.07% 17.03% 15.99% 9.59%
$13.93 $18.23
American Gold (12/16/85) 13.36 3.77 129.03 0.66 6.10 8.56 18.44 22.57
Automotive (6/30/86) 12.91 7.33 210.25 4.11 19.63 12.75 19.84 21.86
Biotechnology (12/16/85) 28.66 19.38 309.34 15.80 15.89 15.25 25.30 30.12
Brokerage and Investment Mgmt. (7/29/85) 23.53 14.39 154.35 10.96 22.46
9.96* 15.51 18.13
Chemicals (7/29/85) 17.18 9.91 462.38 6.61 18.90 18.15* 33.91 37.97
Computers (7/29/85) 62.87 69.69 455.64 64.60 35.51 18.83* 30.67 47.16
Construction and Housing (9/29/86) 18.93 6.63 187.42 3.43 17.67 12.17 16.79
18.97
Consumer Products (6/29/90) 12.80 10.62 94.40 7.30 15.38 13.03 13.91 15.39
Defense and Aerospace (5/8/84) 36.95 32.96 186.62 28.97 18.40 7.34* 19.64
25.09
Developing Communications (6/29/90) 32.86 47.41 244.32 42.98 32.72 26.23
20.40 24.88
Electronics (7/29/85) 87.45 88.06 310.14 82.42 36.07 14.31* 19.80 34.66
Energy (7/14/81) 11.61 7.08 151.11 3.86 2.41 7.61* 16.10 17.65
Energy Service (12/16/85) 30.16 27.15 52.89 23.33 0.42 4.14 11.97 14.50
Environmental Services (6/29/89) 26.65 17.38 38.17 13.86 3.66 4.85 10.27
12.83
Financial Services (12/10/81) 33.67 15.86 864.30 12.38 26.72 13.95* 48.23
57.64
Food and Agriculture (7/29/85) 18.91 18.84 469.45 15.28 15.20 18.70* 32.53
35.79
Health Care (7/14/81) 26.66 32.53 1436.57 28.56 21.13 19.45 76.13 89.21
Home Finance (12/16/85) 43.27 23.75 534.66 20.03 37.08 20.57 23.92 30.56
Industrial Equipment (9/29/86) 31.89 29.77 177.62 25.88 19.18 11.73 20.04
25.80
Industrial Materials (9/29/86) 21.29 12.51 184.38 9.13 18.88 12.03 23.13
26.59
Insurance (12/16/85) 22.32 19.97 210.46 16.37 17.20 12.02 21.31 24.37
Leisure (5/8/84) 28.71 24.23 622.97 20.51 20.38 15.99* 40.71 48.92
Medical Delivery (6/30/86) 18.54 22.28 254.44 18.61 20.66 14.40 23.18 25.85
Multimedia (6/30/86) 30.66 31.27 357.10 27.33 25.86 17.62 22.35 27.74
Natural Gas (4/21/93) 15.98 7.14 2.59 3.92 N/A (0.21) 8.98 10.08
Paper and Forest Products (6/30/86) 26.49 19.98 204.63 16.38 21.01 12.53
21.14 24.25
Precious Metals and Minerals (7/14/81) 1.19 (2.97) 118.22 (5.89) 7.64 8.08*
15.27 17.89
Regional Banks (6/30/86) 32.92 16.01 281.33 12.53 29.76 15.32 18.01 21.64
Retailing (12/16/85) 10.26 2.77 329.78 (0.31) 19.07 15.83 23.91 26.33
Software and Computer Services (7/29/85) 38.62 54.91 522.92 50.27 31.06
19.94* 29.07 37.83
Technology (7/14/81) 49.46 54.32 769.32 49.69 32.68 15.11* 42.05 59.96
Telecommunications (7/29/85) 25.92 24.95 529.23 21.20 21.69 19.90* 38.34
46.22
Transportation (9/29/86) 13.95 9.30 247.90 6.02 21.24 14.59 20.53 21.98
Utilities Growth (12/10/81) 18.30 13.26 601.38 9.86 11.90 12.70 34.88 39.08
S&P 500 24.51 21.45 - 21.45 15.12 - 487.39 561.88
(dagger) See "Legend" on page for explanation of information on this
table.
* 10-year Average Annual Total Return.
(dagger)(dagger) Total net assets are based on 4:00 p.m. prices.
** High/Low NAVs are based on 4:00 p.m. prices for the period 2/28/95 -
8/31/95.
(double dagger) January 1, 1995 to August 31, 1995.
HIGH LOW TOTAL NET ASSETS(dagger)(dagger) DISTRIBUTIONS MEDIAN MEDIAN
NAV** NAV** $MM 1/1/95 - 8/31/95 PRICE/SALES PRICE/BOOK
FOR 6 MONTHS ENDED 8/31/95 2/28/95 8/31/95 CAP GAINS DIVS RELATIVE
VOLATILITY AS OF 8/31/95
$19.37 $13.83 $18.6 $40.8 $- $- 2.25 0.50 2.94
23.60 17.95 278.2 347.0 - - 3.15 4.14 3.05
22.14 19.06 60.1 67.9 - - 1.52 0.56 2.36
30.48 25.10 448.2 597.2 - - 2.23 7.91 5.26
18.31 15.17 27.3 31.6 .49 - 2.02 0.87 1.70
38.12 32.99 97.5 75.9 .46 .08 1.35 1.16 2.97
48.34 30.81 215.0 598.0 .42 - 2.18 1.91 3.49
19.41 16.42 16.9 39.1 - - 1.47 0.63 1.95
15.55 13.79 20.5 7.6 .06 - 1.41 2.02 5.23
25.20 19.57 5.0 22.4 - - 1.34 0.82 2.39
25.10 18.89 254.4 477.4 1.53 - 2.15 2.81 4.41
35.74 20.04 216.4 1,236.1 - - 2.23 3.43 5.26
17.96 16.13 96.0 96.3 .06 - 1.83 1.13 2.15
14.50 11.94 63.8 103.3 - - 2.02 1.67 2.20
12.86 10.18 31.3 32.7 - - 1.67 1.45 2.43
57.67 47.12 153.1 171.5 - - 1.70 1.42 1.92
36.33 32.41 197.1 116.7 .52 .03 1.04 0.89 3.11
89.43 76.16 943.1 1,036.8 .36 .05 1.91 1.75 3.25
30.56 23.71 229.9 353.0 - - 1.82 1.27 1.20
26.36 19.72 110.0 116.3 - .01 1.55 0.79 2.52
27.44 22.15 183.5 157.7 - .04 1.49 0.61 1.89
24.37 20.90 21.8 15.3 - .04 1.37 1.46 1.43
48.92 40.51 69.6 112.8 .29 - 1.44 2.38 4.16
26.10 22.50 299.6 183.4 .07 - 2.43 1.15 2.93
27.95 22.30 38.2 93.6 - - 1.54 2.29 4.67
10.09 8.95 79.9 62.9 - .01 - 1.14 1.83
25.02 20.17 94.2 66.0 .21 - 2.06 0.89 1.91
18.47 14.98 364.2 372.8 - - 3.45 3.89 4.83
21.67 17.60 164.6 209.0 - - 1.67 1.57 1.70
26.76 23.00 31.1 40.5 - - 1.62 0.49 2.47
39.18 29.03 236.4 333.1 - - 2.32 3.28 4.67
60.81 42.11 229.8 468.6 1.38 - 1.93 1.66 3.50
46.22 37.99 369.5 448.6 .82 - 1.41 1.86 2.91
22.26 19.69 12.7 10.3 - - 1.38 0.79 1.95
39.08 34.10 237.6 224.7 - .05 1.08 1.27 1.43
- - - - - 1.11 3.66
TO CALL FIDELITY
FOR PORTFOLIO INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you to set up your Personal Identification Number (PIN). The PIN assures
that only you have automated telephone access to your account information.
Please have your Customer Number (T-account #) handy when you call - you'll
need it to establish your PIN. If you would ever like to change your PIN,
just choose the "Change your Personal Identification Number" option when
you call. If you forget your PIN, please call a Fidelity representative at
1-800-544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this recorded menu:
PRESS
For quotes on funds you own.
1
For an individual fund quote.
2
For the ten most frequently
requested Fidelity fund quotes.
3
For quotes on Fidelity Select
Portfolios(registered trademark).
4
To change your Personal
Identification Number (PIN).
5
To speak with a Fidelity
representative.
6
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1
For your most recent fund activity
(purchases, redemptions, and
dividends).
2
To change your Personal
Identification Number (PIN).
3
To speak with a Fidelity
representative.
4
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL
ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR
SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE
TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS
ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
FMR Texas Inc., Irving, TX
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
William J. Hayes, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
Thomas D. Maher, ASSISTANT VICE PRESIDENT, MONEY MARKET FUND
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIANS
Brown Brothers Harriman & Co.
Boston, MA
and
The Bank of New York
New York, NY
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
* INDEPENDENT TRUSTEES
FIDELITY SELECT PORTFOLIOS
CONSUMER SECTOR
Consumer Products
Food and Agriculture
Leisure
Multimedia
Retailing
CYCLICALS SECTOR
Air Transportation
Automotive
Chemicals
Construction and Housing
Environmental Services
Industrial Equipment
Industrial Materials
Paper and Forest Products
Transportation
ENERGY, UTILITIES & NATURAL RESOURCES SECTOR
American Gold
Energy
Energy Service
Natural Gas
Precious Metals and Minerals
Utilities Growth
FINANCIAL SERVICES SECTOR
Brokerage and Investment Management
Financial Services
Home Finance
Insurance
Regional Banks
HEALTH CARE SECTOR
Biotechnology
Health Care
Medical Delivery
TECHNOLOGY SECTOR
Computers
Defense and Aerospace
Developing Communications
Electronics
Software and Computer Services
Technology
Telecommunications
Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY INVESTMENTS
P.O. Box 193
BOSTON, MA 02101
BULK RATE
U.S. Postage
PAID
Fidelity
Investments
