(2_FIDELITY_LOGOS)FIDELITY
SELECT
PORTFOLIOS(REGISTERED TRADEMARK)
AIR TRANSPORTATION
AMERICAN GOLD
AUTOMOTIVE
BIOTECHNOLOGY
BROKERAGE AND INVESTMENT MANAGEMENT
CHEMICALS
COMPUTERS
CONSTRUCTION AND HOUSING
CONSUMER INDUSTRIES
CYCLICAL INDUSTRIES
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
NATURAL RESOURCES
PAPER AND FOREST PRODUCTS
PRECIOUS METALS AND MINERALS
REGIONAL BANKS
RETAILING
SOFTWARE AND COMPUTER SERVICES
TECHNOLOGY
TELECOMMUNICATIONS
TRANSPORTATION
UTILITIES GROWTH
SEMIANNUAL REPORT
AUGUST 31, 1997
CONTENTS
PERFORMANCE OVERVIEW AND 4
MARKET RECAP
FUND UPDATES*
CONSUMER SECTOR 6 CONSUMER INDUSTRIES
13 FOOD AND AGRICULTURE
19 LEISURE
25 MULTIMEDIA
31 RETAILING
CYCLICALS SECTOR 37 AIR TRANSPORTATION
42 AUTOMOTIVE
47 CHEMICALS
53 CYCLICAL INDUSTRIES
60 CONSTRUCTION AND HOUSING
66 DEFENSE AND AEROSPACE
72 ENVIRONMENTAL SERVICES
78 INDUSTRIAL EQUIPMENT
84 INDUSTRIAL MATERIALS
90 PAPER AND FOREST PRODUCTS
95 TRANSPORTATION
FINANCIAL SERVICES SECTOR 101 BROKERAGE AND INVESTMENT MANAGEMENT
107 FINANCIAL SERVICES
112 HOME FINANCE
119 INSURANCE
125 REGIONAL BANKS
HEALTH CARE SECTOR 130 BIOTECHNOLOGY
136 HEALTH CARE
142 MEDICAL DELIVERY
NATURAL RESOURCES SECTOR 148 AMERICAN GOLD
154 ENERGY
160 ENERGY SERVICE
166 NATURAL RESOURCES
173 PRECIOUS METALS AND MINERALS
* FUND UPDATES FOR EACH SELECT PORTFOLIO INCLUDE: PERFORMANCE AND
INVESTMENT SUMMARY, MANAGER'S OVERVIEW, INVESTMENTS, AND FINANCIAL
STATEMENTS.
TECHNOLOGY SECTOR 179 COMPUTERS
185 DEVELOPING COMMUNICATIONS
191 ELECTRONICS
198 SOFTWARE AND COMPUTER SERVICES
204 TECHNOLOGY
UTILITIES SECTOR 211 NATURAL GAS
216 TELECOMMUNICATIONS
222 UTILITIES GROWTH
228 MONEY MARKET
NOTES TO FINANCIAL STATEMENTS 235 FOOTNOTES TO THE FINANCIAL STATEMENTS
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
DEAR SHAREHOLDER:
While not quite matching its phenomenal returns of recent periods, the
U.S. stock market still managed to perform extremely well for the six
months that ended August 31, 1997. The Standard & Poor's 500 Index
(S&P 500) returned 14.78% in that time, easily ahead of its historical
annual average of around 11%. Of the 37 Select equity portfolios, 20
outperformed the S&P 500 over the past six months. To put that in
perspective, only seven Select funds had outperformed the index for
the 12 months ended February 28, 1997. The top-performing Select
portfolio was Energy Service, compiling a six-month return of 59.09%.
Precious Metals and Minerals was the worst performer, losing 30.05%.
Through the first half of the period, the eye-popping performance of a
narrow group of well-known, blue chip stocks continued to fuel the
market's upward surge. Favorable corporate earnings reports, large
cash inflows into mutual funds and a generally beneficial
interest-rate environment pushed stock prices - especially those of
certain blue chip stocks - to lofty levels.
Along the way, there were two interruptions that tested the market's
fortitude. The first came in March when the Federal Reserve Board
raised a key short-term interest rate by 0.25%. While this resulted in
a sharp equity sell-off through mid-April, the market was off and
running again through much of the summer as the Dow Jones Industrial
Average reached the 8000 mark for the first time in its history. The
dog days of August, however, took back some of that gain as investors
grew concerned over inflation, a weakened dollar and sluggish
corporate earnings, particularly among the heretofore reliable blue
chips.
In terms of the Select Portfolios themselves, we introduced two new
funds earlier in the year - Cyclical Industries and Natural Resources
- - as well as a new framework designed to help investors navigate our
product line more easily. Under this new alignment, the 37 Select
equity funds are divided into seven industry groupings: Consumer,
Cyclicals, Financial Services, Health Care, Natural Resources,
Technology and Utilities. Each group contains a "broad sector" fund as
well as additional industry-specific funds. Whereas the broad sector
fund can invest in a variety of industries within its sector, the
industry-specific funds concentrate on particular segments of that
industry.
Results in the CONSUMER sector were mixed. Retailing performed well,
as inventory levels were reduced and sales were better than expected.
With its increased exposure to advertising agency stocks, Multimedia
also performed well. Leisure and Consumer Industries underperformed
the S&P 500, as earnings disappointments in the apparel industry
brought negative results. Lastly, Food and Agriculture stocks - many
of which are capable of sustaining steady, predictable earnings growth
- - tend to perform better when the direction of the economy is
uncertain. With the U.S. economy continuing its strong run, many
investors looked elsewhere for higher returns.
On the other hand, CYCLICAL stocks - those that parallel the ups and
downs of the economy - benefited from economic growth. Transportation,
and Construction and Housing fared well, while Defense and Aerospace,
and Air Transportation thrived due to an increase in new airplane
orders. Favorable supply/demand conditions made for nice gains for
Paper and Forest Products, but slower new car sales put a brake on
Automotive's performance. Poor pricing trends and a significant
exposure to gold-related stocks hurt Industrial Materials, while the
weak performance of several key companies detracted from Environmental
Services' return.
Increased consolidation, as well as positive industry trends and a
benign interest-rate climate, helped FINANCIAL SERVICES funds perform
well, particularly Brokerage and Investment Management, and Insurance.
Financial Services, Home Finance and Regional Banks performed
moderately well, but were unable to match their return levels of six
months ago.
For a variety of reasons, the HEALTH CARE sector registered subpar
results over the past six months. The market's narrow large-cap
advance didn't help, nor did negative publicity surrounding certain
experimental drugs or increased government scrutiny over Medicare
billing practices. These developments held back the performance of
Biotechnology, Health Care and Medical Delivery.
The performance of Select portfolios in the NATURAL RESOURCES area
covered the entire spectrum. Increased oil and gas exploration
activity, spurred on by new technology, spelled good times for both
Energy and Energy Service. On a down note, a sharp decline in gold
prices hurt both American Gold, and Precious Metals and Minerals.
With companies worldwide looking to increase productivity, TECHNOLOGY
stocks were the clear beneficiaries. Steady orders and revenue growth
were prevalent throughout the sector - particularly for personal
computer and semiconductor manufacturers - and this benefited
Computers, Electronics, Software and Computer Services and Technology.
Additionally, rising demand for enhanced communications infrastructure
helped Developing Communications.
Uncertainty over the effects of deregulation continued to haunt the
UTILITIES group, as returns for Telecommunications and Utilities
Growth were somewhat disappointing. Natural Gas, however, capitalized
on favorable supply and demand conditions within its industry.
As we enter September 1997, the market is still trying to assess the
aforementioned developments of August. Stocks had reached record
valuation levels despite earnings growth that many felt didn't support
those valuations. The consensus among market followers is that with
large-cap stocks taking a step back, investors will realize that good
opportunities also exist in the small- and mid-cap arenas. A broader
market should also benefit the Select funds, many of which emphasize
smaller stocks. In the meantime, if the economy can maintain its
moderate growth rate and companies continue to increase their business
prospects through smarter capital management, it could bode well for
investors.
In the pages that follow, you'll find detailed summaries for each of
the Select funds. We hope that you find them informative and that you
will use them to evaluate your investments. Thank you very much for
your continued interest in the Fidelity Select Portfolios.
Sincerely,
Robert J. Haber
Director, U.S. Equity Research
Select Group Leader
CUMULATIVE TOTAL RETURNS
FOR THE SIX MONTHS ENDED AUGUST 31, 1997
Row: 1, Col: 1, Value: 59.09
Row: 2, Col: 1, Value: 36.63
Row: 3, Col: 1, Value: 30.03
Row: 4, Col: 1, Value: 29.92
Row: 5, Col: 1, Value: 27.56
Row: 6, Col: 1, Value: 25.97
Row: 7, Col: 1, Value: 25.0
Row: 8, Col: 1, Value: 23.53
Row: 9, Col: 1, Value: 22.56
Row: 10, Col: 1, Value: 22.54
Row: 11, Col: 1, Value: 21.84
Row: 12, Col: 1, Value: 21.78
Row: 13, Col: 1, Value: 21.58
Row: 14, Col: 1, Value: 21.38
Row: 15, Col: 1, Value: 18.7
Row: 16, Col: 1, Value: 18.6
Row: 17, Col: 1, Value: 18.47
Row: 18, Col: 1, Value: 17.28
Row: 19, Col: 1, Value: 17.21
Row: 20, Col: 1, Value: 16.31
Row: 21, Col: 1, Value: 14.78
Row: 22, Col: 1, Value: 14.41
Row: 23, Col: 1, Value: 14.29
Row: 24, Col: 1, Value: 13.52
Row: 25, Col: 1, Value: 13.21
Row: 26, Col: 1, Value: 13.2
Row: 27, Col: 1, Value: 13.08
Row: 28, Col: 1, Value: 11.93
Row: 29, Col: 1, Value: 10.73
Row: 30, Col: 1, Value: 10.47
Row: 31, Col: 1, Value: 9.93
Row: 32, Col: 1, Value: 8.33
Row: 33, Col: 1, Value: 8.33
Row: 34, Col: 1, Value: 6.430000000000001
Row: 35, Col: 1, Value: 5.33
Row: 36, Col: 1, Value: 0.47
Row: 37, Col: 1, Value: -24.07
Row: 38, Col: 1, Value: -30.05
Energy Service 59.09%Electronics 36.66%Defense & Aerospace
30.03%Computers 29.92%Technology 27.56%Developing Communications
25.97%Transportation 25.00%Air Transportation 23.53%Industrial
Equipment 22.56%Retailing 22.54%Brokerage and Investment Management
21.84%Construction and Housing 21.78%Software and Computer Services
21.58%Energy 21.38%Insurance 18.70%Cyclical Industries 1
18.60%Paper & Forest 18.47%Multimedia 17.28%Chemicals 17.21%Natural
Gas 16.31%S&P 500 14.78%Financial Services 14.41%Leisure
14.29%Home Finance 13.52%Consumer Industries 13.21%Natural Resources
1 13.20%Automotive 13.08%Regional Banks 11.93%Health Care
10.73%Telecommunications 10.47%Environmental Services
9.93%Industrial Materials 8.33%Medical Delivery 8.33%Food &
Agriculture 6.43%Utilities Growth 5.33%Biotechnology 0.47%American
Gold -24.07%Precious Metals & Minerals -30.05%
1 RETURNS ARE FROM INCEPTION DATE MARCH 3, 1997.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. TOTAL RETURNS
INCLUDE CHANGES IN A FUND'S SHARE PRICE, PLUS REINVESTMENT OF ANY
DIVIDENDS AND CAPITAL GAINS BUT DO NOT INCLUDE SELECT'S 3% SALES
CHARGE, AND CERTAIN FEES PAID BY SHAREHOLDERS UPON EXCHANGE OR
REDEMPTION. FIGURES FOR THE STANDARD & POOR'S 500 INDEX
(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. 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. IF
FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES FOR SOME OF THE FUNDS,
THOSE RETURNS WOULD HAVE BEEN LOWER.
CONSUMER INDUSTRIES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year 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, 1997 MONTHS YEAR YEARS FUND
CONSUMER INDUSTRIES 13.21% 29.37% 118.28% 198.24%
CONSUMER INDUSTRIES 9.82% 25.49% 111.73% 189.29%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 206.48%
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 the
fund's returns to the performance of the S&P 500 - a widely
recognized, unmanaged index of common stocks. This benchmark includes
reinvestment of dividends and capital gains, if any, and excludes the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1997 YEAR YEARS FUND
CONSUMER INDUSTRIES 29.37% 16.90% 16.44%
CONSUMER INDUSTRIES 25.49% 16.19% 15.94%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 16.88%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970909 114814 S00000000000001
Consumer Industries S&P 500
00517 SP001
1990/06/29 9700.00 10000.00
1990/07/31 9670.90 9980.27
1990/08/31 8943.40 9078.05
1990/09/30 8439.00 8635.95
1990/10/31 8749.40 8598.82
1990/11/30 9234.40 9154.30
1990/12/31 9593.72 9409.71
1991/01/31 9808.43 9819.97
1991/02/28 10569.68 10522.10
1991/03/31 11077.18 10776.73
1991/04/30 10950.31 10802.60
1991/05/31 11477.33 11269.27
1991/06/30 10911.27 10753.14
1991/07/31 11623.72 11254.23
1991/08/31 12101.94 11520.96
1991/09/30 11994.59 11328.56
1991/10/31 12375.21 11480.36
1991/11/30 11857.95 11017.70
1991/12/31 13290.07 12278.13
1992/01/31 13379.46 12049.75
1992/02/29 13836.37 12206.40
1992/03/31 13677.45 11968.38
1992/04/30 13717.18 12320.25
1992/05/31 13627.78 12380.62
1992/06/30 13015.69 12196.14
1992/07/31 13388.15 12694.97
1992/08/31 13253.65 12434.72
1992/09/30 13377.81 12581.45
1992/10/31 13595.08 12625.48
1992/11/30 14246.90 13056.01
1992/12/31 14427.78 13216.60
1993/01/31 14331.67 13327.62
1993/02/28 13851.10 13508.88
1993/03/31 14662.73 13793.92
1993/04/30 14566.61 13460.10
1993/05/31 15719.98 13820.83
1993/06/30 15730.66 13860.91
1993/07/31 15880.17 13805.47
1993/08/31 16916.07 14328.70
1993/09/30 17289.85 14218.37
1993/10/31 17823.81 14512.69
1993/11/30 17428.68 14374.82
1993/12/31 17987.73 14548.75
1994/01/31 17835.98 15043.41
1994/02/28 17789.29 14635.73
1994/03/31 16645.36 13997.61
1994/04/30 16823.06 14176.78
1994/05/31 16600.01 14409.28
1994/06/30 15684.31 14056.26
1994/07/31 16106.94 14517.30
1994/08/31 17046.12 15112.51
1994/09/30 16729.15 14742.25
1994/10/31 17057.86 15073.95
1994/11/30 16224.34 14524.96
1994/12/31 16716.09 14740.37
1995/01/31 16569.67 15122.58
1995/02/28 16972.32 15711.91
1995/03/31 17435.98 16175.57
1995/04/30 17815.10 16651.94
1995/05/31 18145.91 17317.52
1995/06/30 18133.66 17719.80
1995/07/31 18893.31 18307.39
1995/08/31 18856.56 18353.34
1995/09/30 19861.26 19127.86
1995/10/31 20755.69 19059.57
1995/11/30 21980.94 19896.28
1995/12/31 21446.67 20279.49
1996/01/31 21446.67 20969.80
1996/02/29 22065.08 21164.19
1996/03/31 22844.29 21368.00
1996/04/30 23611.12 21682.97
1996/05/31 24835.58 22242.17
1996/06/30 24711.90 22326.91
1996/07/31 22015.61 21340.51
1996/08/31 22361.92 21790.58
1996/09/30 23809.01 23016.95
1996/10/31 23994.54 23651.76
1996/11/30 24674.80 25439.60
1996/12/31 24266.64 24935.64
1997/01/31 25355.05 26493.62
1997/02/28 25552.95 26701.33
1997/03/31 24798.48 25604.17
1997/04/30 24984.00 27132.74
1997/05/31 26715.57 28784.58
1997/06/30 28026.61 30074.13
1997/07/31 29646.86 32467.13
1997/08/29 28917.13 30648.32
IMATRL PRASUN SHR__CHT 19970831 19970909 114820 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Select Consumer Industries Portfolio on June 29,
1990, when the fund started, and the current maximum 3% sales charge
was paid. As the chart shows, by August 31, 1997, the value of the
investment would have grown to $28,929 - a 189.29% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $30,648 - a 206.48%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
HFS, INC. 6.8
UNIVERSAL OUTDOOR HOLDINGS, INC. 3.0
BET HOLDINGS, INC. CLASS A 3.0
TJX COMPANIES, INC. 2.9
VIACOM, INC. CLASS B (NON-VTG.) 2.7
TIME WARNER, INC. 2.7
WAL-MART STORES, INC. 2.4
OUTDOOR SYSTEMS, INC. 2.3
STEINER LEISURE LTD. 2.1
GILLETTE CO. 2.1
TOP INDUSTRIES AS OF AUGUST 31, 1997
HOTELS, MOTELS, & TOURIST COURTS 10.0%
CABLE TV OPERATORS 5.6%
ADVERTISING 5.4%
RESTAURANTS 4.2%
MOTION PICTURE PRODUCTION 4.0%
ALL OTHERS 70.8%
ROW: 1, COL: 1, VALUE: 70.8
ROW: 1, COL: 2, VALUE: 4.0
ROW: 1, COL: 3, VALUE: 4.2
ROW: 1, COL: 4, VALUE: 5.4
ROW: 1, COL: 5, VALUE: 5.6
ROW: 1, COL: 6, VALUE: 10.0
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
CONSUMER INDUSTRIES PORTFOLIO
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: Effective August 18, 1997, Doug Chase (right)
became Portfolio Manager of Select Consumer Industries Portfolio. The
following is an interview with Paul Antico, who managed the fund
during most of the period covered by the report, and Doug Chase, who
discusses his investment philosophy and outlook.
Q. PAUL, HOW DID THE FUND PERFORM?
P.A. For the six- and 12-month periods that ended August 31, 1997, the
fund returned 13.21% and 29.37%, respectively. By comparison, the
Standard & Poor's 500 Index returned 14.78% and 40.65% for the same
time periods.
Q. DID YOU MAKE ANY SIGNIFICANT CHANGES IN THE FUND'S HOLDINGS DURING
THE PERIOD?
P.A. I increased the fund's weighting in outdoor advertising,
specifically such positions in the billboard industry as Outdoor
Systems and Universal Outdoor Holdings. This industry has similar
dynamics to the TV and radio industries. It's very fragmented, quite
dependent on advertising dollars and going through a period of
consolidation that should help it over time. In the cable television
industry, I increased the fund's positions in the networks to a
greater degree than the operators. With the operators - those
providing cable service to consumers - I was concerned about the lack
of industry standards for both cable and telephone service and how
that might increase operating costs and slow market penetration. On
the other hand, I was much more optimistic about cable networks. Their
ratings have been going up dramatically relative to the broadcast
channels, so their advertising rates have gone up. During the period,
I increased the fund's positions in such cable networks as BET
Holdings.
Q. YOU ALSO SEEMED TO REDUCE YOUR HOLDINGS IN CONSUMER STAPLES . . .
P.A. That's right. Later in the period I began to feel that valuations
in this sector were too high and that a contraction was starting in
this part of the market. I felt that Coca-Cola's stock, for example,
was too expensive based on an over-valuing of its bottlers, so I sold
it. With respect to Procter & Gamble and Gillette, I began to feel
that their valuations were high as well and didn't see the same
opportunities for appreciation going forward.
Q. WHAT STOCKS PERFORMED WELL DURING THE PERIOD?
P.A. The fund benefited from the strong performance of such
diversified companies as Nokia and General Electric. Computer Learning
Centers, which has training centers around the nation, was an
excellent stock. Starbucks also performed very well. I liked the
company's plans for expansion both domestically and internationally,
its record of terrific growth and its potential to exploit the
Starbucks brand name in supermarkets.
Q. WERE THERE ANY DISAPPOINTMENTS?
P.A. Apparel stocks have been a terribly disappointing group for the
fund. Gadzooks, for example, had to pre-announce an earnings
disappointment, which hurt its stock. Other disappointments included
Viacom, which was affected by problems experienced by its Blockbuster
Video subsidiary. Another related disappointment was Hollywood
Entertainment, the number two company in its market after Blockbuster.
Hollywood's stock was dragged down by Blockbuster's tumble.
Q. TURNING TO YOU, DOUG, WHAT IS YOUR INVESTMENT PHILOSOPHY AND
OUTLOOK?
D.C. Like Paul, I tend to take a bottom-up approach to stock
selection. I work with a team of analysts to use the best ideas of
individuals who have thorough knowledge of the consumer sector. Where
I differ from Paul is that I place a greater emphasis on blending a
variety of large-, mid-, and small-cap companies in the fund's
portfolio. Going forward, my research team and I will continue to
follow the Fidelity tradition of identifying those companies that have
the greatest potential for appreciation before the rest of the market
has had the opportunity to do so.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 29, 1990
FUND NUMBER: 517
TRADING SYMBOL: FSCPX
SIZE: as of August 31, 1997, more than
$15 million
MANAGER: Doug Chase, since August 1997;
manager, Fidelity Select Automotive Portfolio,
since 1994; Fidelity Select Industrial Materials
Portfolio, 1994-August 1997; joined Fidelity
in 1993
(checkmark)
CONSUMER INDUSTRIES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.1%
SHARES VALUE (NOTE 1)
ADVERTISING - 5.8%
ADVERTISING - 5.4%
Outdoor Systems, Inc. (a) 13,800 $ 364,838 69005710
Universal Outdoor Holdings, Inc. (a) 14,100 482,925 91377M10
847,763
ADVERTISING AGENCIES - 0.4%
Omnicom Group, Inc. 1,000 67,750 68191910
TOTAL ADVERTISING 915,513
APPAREL STORES - 5.7%
FOOTWEAR - WHOLESALE - 0.5%
Kenneth Cole Productions, Inc. Class A (a) 5,700 78,731 19329410
GENERAL APPAREL STORES - 3.4%
Ross Stores, Inc. 2,800 82,250 77829610
TJX Companies, Inc. 16,500 453,750 87254010
536,000
SHOE STORES - 1.8%
Baker (J.), Inc. 17,200 161,250 05723210
Payless ShoeSource, Inc. (a) 2,000 128,250 70437910
289,500
WOMEN'S CLOTHING STORES - 0.0%
Charming Shoppes, Inc. (a) 200 1,206 16113310
TOTAL APPAREL STORES 905,437
BEVERAGES - 0.9%
SOFT DRINKS - 0.9%
PepsiCo, Inc. 4,100 147,600 71344810
BROADCASTING - 7.9%
CABLE TV OPERATORS - 5.6%
BET Holdings, Inc. Class A (a) 12,000 472,500 08658510
Cox Communications, Inc. Class A (a) 4,000 108,250 22404410
TCA Cable TV, Inc. 4,200 159,600 87224110
Tele Communications, Inc. (TCI)
Series A (a) 8,000 140,000 87924V10
880,350
RADIO BROADCASTING - 1.3%
Clear Channel Communications, Inc. (a) 3,000 203,813 18450210
TELEVISION BROADCASTING - 1.0%
HSN, Inc. 5,000 165,000 40429R10
TOTAL BROADCASTING 1,249,163
CELLULAR - 3.9%
CELLULAR & COMMUNICATION SERVICES - 3.9%
AirTouch Communications, Inc. (a) 7,000 236,688 00949T10
Mobile Telecommunications
Technologies, Inc. (a) 6,000 73,500 60740610
Nextel Communications, Inc. Class A (a) 4,000 100,250 65332V10
United States Cellular Corp. (a) 7,000 210,875 91168410
621,313
COMMUNICATIONS EQUIPMENT - 1.0%
TELEPHONE EQUIPMENT - 1.0%
Nokia Corp. AB sponsored ADR 2,000 155,000 65490220
COMPUTER SERVICES & SOFTWARE - 2.6%
COMPUTER & SOFTWARE STORES - 1.4%
CompUSA, Inc. (a) 6,900 213,469 20493210
COMPUTER SERVICES - 1.0%
America Online, Inc. (a) 2,500 161,250 02364J10
SHARES VALUE (NOTE 1)
PREPACKAGED COMPUTER SOFTWARE - 0.2%
Spectrum Holobyte, Inc. (a) 8,100 $ 38,981 84762J10
TOTAL COMPUTER SERVICES & SOFTWARE 413,700
CONSUMER ELECTRONICS - 0.7%
RADIOS, TELEVISIONS, STEREOS - 0.7%
Philips Electronics NV 1,500 107,438 71833750
DRUG STORES - 2.0%
CVS Corp. 3,877 218,566 12665010
Rite Aid Corp. 2,000 100,125 76775410
318,691
DRUGS & PHARMACEUTICALS - 1.0%
PHARMACEUTICAL PREPARATIONS - 1.0%
NBTY, Inc. (a) 3,000 66,750 62878210
Twinlab Corp. 4,000 84,000 90177410
150,750
ELECTRICAL EQUIPMENT - 1.2%
ELECTRICAL MACHINERY - 1.2%
General Electric Co. 1,000 62,500 36960410
Westinghouse Electric Corp. 5,150 132,613 96040210
195,113
ELECTRONICS - 0.7%
ELECTRONIC PARTS - WHOLESALE - 0.7%
Brightpoint, Inc. (a) 3,100 116,250 10947310
ENTERTAINMENT - 8.2%
AMUSEMENT & RECREATIONAL SERVICES - 0.6%
IMAX Corp. 4,000 95,118 45245E10
MOTION PICTURE DISTRIBUTION - 0.7%
All American Communications, Inc.
Class B (non-vtg.) (a) 7,700 107,800 01648040
MOTION PICTURE PRODUCTION - 4.0%
Viacom, Inc. Class B (non-vtg.) (a) 14,500 429,556 92552430
King World Productions, Inc. 5,000 198,750 49566710
628,306
RECORDS & CD'S - 2.6%
Time Warner, Inc. 8,200 422,300 88731510
RECREATIONAL SERVICES - 0.3%
MGM Grand, Inc. (a) 1,200 48,150 55295310
TOTAL ENTERTAINMENT 1,301,674
FOODS - 2.4%
CANNED SPECIALTIES - 0.9%
Campbell Soup Co. 3,000 139,125 13442910
PACKAGED & FROZEN FOODS - 1.5%
Dreyer's Grand Ice Cream, Inc. 5,100 238,425 26187810
TOTAL FOODS 377,550
GENERAL MERCHANDISE STORES - 7.0%
DEPARTMENT STORES - 1.8%
Federated Department Stores, Inc. (a) 5,300 222,600 31410H10
Stein Mart, Inc. (a) 2,000 56,000 85837510
278,600
GENERAL MERCHANDISE STORES - 2.4%
Wal-Mart Stores, Inc. 10,900 386,950 93114210
VARIETY STORES - 2.8%
Dollar Tree Stores (a) 7,000 272,125 25674710
99 Cents Only Stores (a) 5,100 163,838 65440K10
435,963
TOTAL GENERAL MERCHANDISE STORES 1,101,513
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
GROCERY STORES - 1.2%
Safeway, Inc. (a) 3,700 $ 188,469 78651420
HOUSEHOLD PRODUCTS - 3.5%
COSMETICS - 2.7%
Avon Products, Inc. 1,400 89,688 05430310
Gillette Co. 4,000 331,250 37576610
420,938
SOAPS & DETERGENTS - 0.8%
Procter & Gamble Co. 1,000 133,063 74271810
TOTAL HOUSEHOLD PRODUCTS 554,001
LEASING & RENTAL - 1.5%
VIDEO TAPE RENTAL - 1.5%
Hollywood Entertainment Corp. (a) 14,600 239,075 43614110
LEISURE DURABLES & TOYS - 3.0%
SPORTING & ATHLETIC GOODS - 1.2%
Callaway Golf Co. 1,700 57,269 13119310
K2, Inc. 4,300 133,300 48273210
190,569
TOYS & GAMES - 1.3%
Mattel, Inc. 6,000 200,625 57708110
TRAVEL TRAILERS AND CAMPERS - 0.5%
Brunswick Corp. 2,500 76,250 11704310
TOTAL LEISURE DURABLES & TOYS 467,444
LODGING & GAMING - 10.0%
HOTELS, MOTELS, & TOURIST COURTS - 10.0%
HFS, Inc. (a) 19,400 1,080,338 40418110
ITT Corp. (a) 2,900 182,156 45091210
Mirage Resorts, Inc. (a) 9,200 246,675 60462E10
Servico, Inc. (a) 5,000 81,875 81764810
1,591,044
MEDICAL FACILITIES MANAGEMENT - 0.0%
HOME HEALTH CARE AGENCIES - 0.0%
Coram Healthcare Corp.
warrants 7/11/99 (a) 216 - 21810311
PAPER & FOREST PRODUCTS - 1.7%
PAPER - 1.7%
Kimberly-Clark Corp. 5,700 270,394 49436810
RESTAURANTS - 4.2%
CKE Restaurants, Inc. 2,000 64,500 12561E10
Logan's Roadhouse, Inc. (a) 3,700 90,650 54119810
NPC International, Inc. 7,000 79,625 62936030
PJ America, Inc. 5,100 81,600 72585Q10
Rainforest Cafe, Inc. (a) 8,200 220,375 75086K10
Starbucks Corp. (a) 3,000 123,000 85524410
659,750
RETAIL & WHOLESALE, MISCELLANEOUS - 6.0%
HOBBY, TOY, & GAME SHOPS - 0.8%
Toys "R" Us, Inc. (a) 3,800 131,338 89233510
RETAIL STORES - 0.9%
Gadzooks, Inc. (a) 7,100 134,900 36255310
SHARES VALUE (NOTE 1)
RETAIL, GENERAL - 2.5%
Bed Bath & Beyond, Inc. (a) 5,700 $ 176,700 07589610
Officemax, Inc. (a) 8,000 118,500 67622M10
Pier 1 Imports, Inc. 6,000 102,000 72027910
397,200
SEWING STORES - 0.6%
Fabri-Centers of America, Inc. Class A (a) 4,100 99,938 30284620
STATIONERY & OFFICE SUPPLIES - WHOLESALE - 1.2%
U.S. Office Products Co. 6,000 194,625 91232510
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 958,001
SERVICES - 2.9%
BEAUTY SHOPS - 2.1%
Steiner Leisure Ltd. 11,000 335,500 85899J22
BUSINESS SERVICES - 0.8%
Premier Technologies, Inc. (a) 4,100 127,356 74058F10
TOTAL SERVICES 462,856
TELEPHONE SERVICES - 1.0%
U.S. WEST Media Group 7,700 154,000 91288920
TEXTILES & APPAREL - 7.7%
APPAREL - 0.6%
Liz Claiborne, Inc. 2,200 98,038 53932010
COTTON MILLS - 0.6%
Galey & Lord, Inc. (a) 4,800 85,500 36352K10
FOOTWEAR - 3.5%
NIKE, Inc. Class B 2,800 149,450 65410610
Reebok International Ltd. 3,000 131,813 75811010
Timberland Co. Class A 4,100 270,856 88710010
552,119
KNIT OUTERWEAR MILLS - 0.2%
Tultex Corp. (a) 5,300 30,475 89990010
MEN'S & BOYS' CLOTHING - 2.8%
Cutter & Buck, Inc. (a) 7,000 138,250 23221710
Tommy Hilfiger (a) 7,100 309,738 89299B92
447,988
TOTAL TEXTILES & APPAREL 1,214,120
TOBACCO - 0.4%
TOBACCO MANUFACTURERS - 0.4%
Philip Morris Companies, Inc. 1,600 69,800 71815410
TOTAL COMMON STOCKS
(Cost $13,873,746) 14,905,659
CONVERTIBLE PREFERRED STOCKS - 1.5%
CELLULAR - 1.5%
CELLULAR & COMMUNICATION SERVICES - 1.5%
AirTouch Communications, Inc. Class B $1.74
(Cost $182,350) 7,000 229,250 00949T20
CASH EQUIVALENTS - 4.4%
Taxable Central Cash Fund (b)
(Cost $702,384) 702,384 702,384 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $14,758,480) $ 15,837,293
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $19,633,267 and $24,400,019, respectively (see Note 3 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 $5,120 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $14,765,922. Net unrealized appreciation
aggregated $1,071,371, of which $1,660,146 related to appreciated
investment securities and $588,775 related to depreciated investment
securities.
CONSUMER INDUSTRIES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 15,837,293
SECURITIES, AT
VALUE
(COST
$14,758,480
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 12,488
FUND SHARES
SOLD
DIVIDENDS 4,390
RECEIVABLE
INTEREST 2,732
RECEIVABLE
REDEMPTION FEES 23
RECEIVABLE
OTHER 16,014
RECEIVABLES
TOTAL ASSETS 15,872,940
LIABILITIES
PAYABLE FOR $ 55,823
FUND SHARES
REDEEMED
ACCRUED 8,380
MANAGEMENT
FEE
OTHER PAYABLES 32,712
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 96,915
NET ASSETS $ 15,776,025
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 12,484,103
ACCUMULATED (117,903)
NET INVESTMENT
(LOSS)
ACCUMULATED 2,331,012
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 1,078,813
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 15,776,025
674,413
SHARES
OUTSTANDING
NET ASSET $23.39
VALUE AND
REDEMPTION
PRICE PER
SHARE
($15,776,02
5 (DIVIDED BY) 674,413
SHARES)
MAXIMUM $24.11
OFFERING PRICE
PER SHARE
(100/97.00
OF $23.39)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 46,438
INCOME
DIVIDENDS
INTEREST 26,649
TOTAL INCOME 73,087
EXPENSES
MANAGEMENT $ 51,378
FEE
TRANSFER AGENT 82,640
FEES
ACCOUNTING FEES 30,304
AND EXPENSES
NON-INTERESTED 39
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 9,899
AND EXPENSES
REGISTRATION FEES 12,194
AUDIT 9,482
LEGAL 70
MISCELLANEOUS 43
TOTAL EXPENSES 196,049
BEFORE
REDUCTIONS
EXPENSE (5,059) 190,990
REDUCTIONS
NET INVESTMENT (117,903)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 2,396,206
SECURITIES
FOREIGN 73 2,396,279
CURRENCY
TRANSACTIONS
CHANGE IN NET (224,613)
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 2,171,666
NET INCREASE $ 2,053,763
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 19,065
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 472
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 5,153
WITHHELD BY
FSC
EXPENSE $ 4,964
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 95
CREDITS
$ 5,059
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (117,903) $ (287,928)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 2,396,279 2,053,365
GAIN (LOSS)
CHANGE IN NET (224,613) (1,279,001)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 2,053,763 486,436
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
SHARE 8,584,373 64,681,737
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
COST OF SHARES (13,281,210) (69,290,503)
REDEEMED
REDEMPTION 26,989 152,149
FEES
NET INCREASE (4,669,848) (4,456,617)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (2,616,085) (3,970,181)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 18,392,110 22,362,291
PERIOD
END OF PERIOD $ 15,776,025 $ 18,392,110
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$117,903
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 404,342 3,299,962
REDEEMED (620,307) (3,662,924)
NET INCREASE (215,965) (362,962)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 20.66 $ 17.84 $ 13.91 $ 15.24 $ 12.97 $ 13.81
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.15) (.22) .08 (.15) (.20) (.09)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 2.85 2.93 3.97 (.60) 3.84 .20
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 2.70 2.71 4.05 (.75) 3.64 .11
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - (.02) - - -
INVESTMENT
INCOME
FROM NET - - (.01) (.60) (1.40) (.97)
REALIZED GAIN
IN EXCESS OF - - (.20) - - -
NET REALIZED
GAIN
TOTAL - - (.23) (.60) (1.40) (.97)
DISTRIBUTIONS
REDEMPTION FEES .03 .11 .11 .02 .03 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 23.39 $ 20.66 $ 17.84 $ 13.91 $ 15.24 $ 12.97
END OF PERIOD
TOTAL RETURN B, C 13.21% 15.81% 30.01% (4.59)% 28.43% .98%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 15,776 $ 18,392 $ 22,362 $ 20,501 $ 8,374 $ 7,005
OF PERIOD
(000 OMITTED)
RATIO OF 2.27% A 2.49% 1.53% E 2.49% E 2.48% E 2.47% A, E
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 2.21% A, F 2.44% F 1.48% F 2.49% 2.48% 2.47% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (1.36)% A (1.13)% .46% (1.08)% (1.34)% (.80)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 239% A 340% 601% 190% 169% 215% A
TURNOVER RATE
AVERAGE $ .0321 $ .0355
COMMISSION
RATE G
</TABLE>
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 DURIN
G THE PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. F FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
FOOD AND AGRICULTURE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
FOOD AND AGRICULTURE 6.43% 26.36% 122.08% 329.80%
FOOD AND AGRICULTURE 3.24% 22.57% 115.42% 316.91%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
FOOD AND AGRICULTURE 26.36% 17.30% 15.70%
FOOD AND AGRICULTURE 22.57% 16.59% 15.35%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970923 094135 S00000000000001
Food & Agriculture S&P 500
00009 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9601.77 9781.00
1987/10/31 7435.85 7674.17
1987/11/30 7106.78 7041.82
1987/12/31 7445.33 7577.70
1988/01/31 7736.60 7896.72
1988/02/29 8119.85 8264.71
1988/03/31 8176.06 8009.33
1988/04/30 8201.61 8098.24
1988/05/31 8262.93 8168.69
1988/06/30 8600.20 8543.63
1988/07/31 8661.52 8511.17
1988/08/31 8656.41 8221.79
1988/09/30 9003.89 8572.04
1988/10/31 9422.91 8810.34
1988/11/30 9203.18 8684.35
1988/12/31 9438.77 8836.33
1989/01/31 9925.57 9483.15
1989/02/28 9746.22 9247.02
1989/03/31 10115.16 9462.47
1989/04/30 10637.83 9953.57
1989/05/31 11293.73 10356.69
1989/06/30 11515.64 10297.66
1989/07/31 12614.11 11227.54
1989/08/31 12419.65 11447.60
1989/09/30 12472.21 11400.66
1989/10/31 12346.06 11136.17
1989/11/30 12813.84 11363.35
1989/12/31 13107.38 11636.07
1990/01/31 12195.66 10855.29
1990/02/28 12370.12 10995.32
1990/03/31 12904.77 11286.70
1990/04/30 12854.12 11004.53
1990/05/31 13974.07 12077.47
1990/06/30 14427.37 11995.34
1990/07/31 14421.68 11956.96
1990/08/31 13369.62 10876.05
1990/09/30 12943.12 10346.39
1990/10/31 13250.20 10301.90
1990/11/30 13796.13 10967.40
1990/12/31 14329.91 11273.39
1991/01/31 14741.18 11764.91
1991/02/28 15851.61 12606.10
1991/03/31 16627.16 12911.17
1991/04/30 16374.52 12942.15
1991/05/31 16973.80 13501.25
1991/06/30 16274.46 12882.90
1991/07/31 16955.55 13483.24
1991/08/31 17630.67 13802.79
1991/09/30 17320.00 13572.29
1991/10/31 17325.97 13754.15
1991/11/30 17206.48 13199.86
1991/12/31 19214.92 14709.93
1992/01/31 18928.51 14436.32
1992/02/29 18822.66 14623.99
1992/03/31 18405.48 14338.83
1992/04/30 18193.78 14760.39
1992/05/31 18355.67 14832.71
1992/06/30 18154.97 14611.71
1992/07/31 18856.21 15209.33
1992/08/31 18772.58 14897.53
1992/09/30 19087.81 15073.32
1992/10/31 19293.68 15126.08
1992/11/30 20033.52 15641.88
1992/12/31 20372.81 15834.28
1993/01/31 20379.40 15967.28
1993/02/28 20326.70 16184.44
1993/03/31 20879.99 16525.93
1993/04/30 20069.26 16126.00
1993/05/31 20701.14 16558.18
1993/06/30 20495.09 16606.20
1993/07/31 20240.96 16539.77
1993/08/31 21209.40 17166.63
1993/09/30 21140.71 17034.45
1993/10/31 21937.44 17387.06
1993/11/30 21683.31 17221.88
1993/12/31 22169.17 17430.27
1994/01/31 22839.65 18022.90
1994/02/28 22702.67 17534.48
1994/03/31 21642.88 16769.97
1994/04/30 21401.05 16984.63
1994/05/31 21245.54 17263.18
1994/06/30 21408.45 16840.23
1994/07/31 22126.76 17392.59
1994/08/31 23533.75 18105.69
1994/09/30 23578.18 17662.10
1994/10/31 24022.49 18059.49
1994/11/30 23437.48 17401.77
1994/12/31 23520.15 17659.84
1995/01/31 24511.69 18117.75
1995/02/28 25003.61 18823.80
1995/03/31 25572.40 19379.29
1995/04/30 26131.32 19950.01
1995/05/31 27069.05 20747.42
1995/06/30 27709.83 21229.38
1995/07/31 28014.59 21933.35
1995/08/31 27967.70 21988.40
1995/09/30 30163.55 22916.31
1995/10/31 30210.43 22834.50
1995/11/30 31398.22 23836.93
1995/12/31 32137.65 24296.03
1996/01/31 33463.08 25123.07
1996/02/29 34485.79 25355.96
1996/03/31 33904.89 25600.14
1996/04/30 33286.85 25977.48
1996/05/31 34514.71 26647.44
1996/06/30 34548.35 26748.97
1996/07/31 34077.39 25567.20
1996/08/31 32992.50 26106.41
1996/09/30 34111.03 27575.68
1996/10/31 34741.78 28336.22
1996/11/30 36491.07 30478.15
1996/12/31 36427.86 29874.38
1997/01/31 38002.50 31740.93
1997/02/28 39172.48 31989.78
1997/03/31 38152.05 30675.32
1997/04/30 39665.70 32506.64
1997/05/31 40833.73 34485.64
1997/06/30 42190.14 36030.60
1997/07/31 43706.69 38897.55
1997/08/29 41690.91 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970923 094139 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Food and Agriculture Portfolio on August
31, 1987, and the current maximum 3% sales charge was paid. As the
chart shows, by August 31, 1997, the value of the investment would
have grown to $41,691 - a 316.91% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
PHILIP MORRIS COMPANIES, INC. 8.0
CAMPBELL SOUP CO. 5.6
HERSHEY FOODS CORP. 4.7
CPC INTERNATIONAL, INC. 4.7
PEPSICO, INC. 4.6
RALSTON PURINA CO. 4.5
RJR NABISCO HOLDINGS CORP. 4.4
SARA LEE CORP. 4.0
NABISCO HOLDINGS CORP. CLASS A 4.0
HEINZ (H.J.) CO. 3.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
FOOD 18.0%
GRAIN MILL PRODUCTS 8.9%
TOBACCO MANUFACTURERS 8.2%
SOFT DRINKS 7.6%
CANNED SPECIALTIES 5.6%
ALL OTHERS 51.7%
ROW: 1, COL: 1, VALUE: 51.7
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 7.6
ROW: 1, COL: 4, VALUE: 8.199999999999999
ROW: 1, COL: 5, VALUE: 8.9
ROW: 1, COL: 6, VALUE: 18.0
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
FOOD AND AGRICULTURE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Scott Offen,
Portfolio Manager of
Fidelity Select Food and Agriculture Portfolio
Q. HOW DID THE FUND PERFORM, SCOTT?
D.C. For the six months that ended August 31, 1997, the fund had a
total return of 6.43%, while the Standard & Poor's 500 Index returned
14.78%. For the 12 months that ended August 31, 1997, the fund
returned 26.36% and the S&P 500 returned 40.65%.
Q. WHY DID THE FUND AND THE SECTOR LAG THE OVERALL PERFORMANCE OF THE
S&P 500?
D.C. When the future of the economy is uncertain, this sector
generally performs best. That's because many of the companies within
the sector are capable of sustaining steady, reliable and predictable
earnings growth. However, over the past six months the economy has
been strong. As a result, other segments of the market posted much
better earnings growth and became more attractive to investors.
Q. WHAT SORTS OF THEMES HAVE YOU PURSUED?
D.C. My strategy hasn't changed over the past six months. I've
continued to focus on large-capitalization companies that have the
resources to cut costs from their operations and take advantage of
economies of scale. Examples of this in the fund would be Sara Lee,
H.J. Heinz and Hershey Foods - each of which performed well over the
past six months. By undertaking this strategy, these companies can
reinvest their cost savings back into their businesses through capital
expenditures or marketing, in order to increase volume growth to add
to market share. I've also focused on some commodity companies, those
that I call "close to the farm."
Q. TWO OF THE FUND'S TOP 10 INVESTMENTS AT THE END OF THE PERIOD WERE
TOBACCO STOCKS, PHILIP MORRIS AND RJR NABISCO. WHAT'S YOUR READ ON THE
RECENT TOBACCO SETTLEMENT AND ITS EFFECT ON THIS GROUP?
D.C. While the market seems to hope that the settlement might be
finalized by the end of 1997, I believe it will take longer. At this
point, it's difficult to predict either the time frame or the final
structure of the settlement. I continued to invest in these companies
despite these concerns because of their attractive business prospects.
While their stocks struggled somewhat during the period, these
companies have demonstrated strength and positive earnings growth both
domestically and overseas. In the U.S., the companies enjoy pricing
flexibility and margin expansion. Overseas, they've posted solid unit
growth. It's a business that has unusually good financial
characteristics. Further, I believe the stock prices in this group
reflect negative effects of litigation above and beyond the worst-case
scenario.
Q. WHAT'S YOUR OUTLOOK?
D.C. There's nothing I can see on the horizon indicating things will
be much different in the near future. We may see some action on the
tobacco front, but that also may take some time to reach closure. I'll
continue to look for companies that are trying to control their
destinies by reducing costs, increasing market share, pursuing
aggressive marketing tactics or introducing new products to create
demand. By doing so, they can create shareholder value. Beyond that, I
might look to add some small- and mid-capitalization companies to the
fund, because that area of the market has been less expensive and may
have more upside in the near future.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 009
TRADING SYMBOL: FDFAX
SIZE: as of August 31, 1997, more than
$220 million
MANAGER: Scott Offen, since 1996; manager,
Fidelity Select Paper and Forest Products
Portfolio, 1993-1996; Fidelity Select
Brokerage and Investment Management
Portfolio, 1990-1993; Fidelity Select Life
Insurance Portfolio, 1988-1990; joined Fidelity
in 1985
(checkmark)
FOOD AND AGRICULTURE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.7%
SHARES VALUE (NOTE 1)
AGRICULTURE - 2.9%
CROPS - 2.9%
DEKALB Genetics Corp. Class B 44,500 $ 1,746,625 24487820
Pioneer Hi-Bred International, Inc. 57,000 4,884,188 72368610
6,630,813
BEVERAGES - 8.4%
MALT BEVERAGE - 0.8%
Anheuser-Busch Companies, Inc. 43,300 1,845,663 03522910
SOFT DRINKS - 7.6%
Coca-Cola Co. (The) 104,900 6,012,081 19121610
PepsiCo, Inc. 293,900 10,580,400 71344810
Whitman Corp. 38,800 950,600 96647K10
17,543,081
TOTAL BEVERAGES 19,388,744
FOODS - 58.3%
BAKERY PRODUCTS - 1.8%
Earthgrains Co. 10,000 410,000 27031910
Flowers Industries, Inc. 124,100 2,295,850 34349610
Interstate Bakeries Corp. 24,700 1,448,038 46072H10
4,153,888
CANDY - 4.7%
Hershey Foods Corp. 203,300 10,851,138 42786610
CANNED SPECIALTIES - 5.6%
Campbell Soup Co. 280,300 12,998,913 13442910
COOKIES & CRACKERS - 4.0%
Nabisco Holdings Corp. Class A 220,600 9,154,900 62952610
DAIRY - 2.5%
Dean Foods Co. 60,200 2,671,375 24236110
Suiza Foods Corp. (a) 73,200 3,019,500 86507710
5,690,875
FOOD - 18.0%
Chiquita Brands International, Inc. 278,300 3,965,775 17003210
Dole Food, Inc. 86,800 3,390,625 25660510
General Mills, Inc. 102,511 6,573,518 37033410
Heinz (H.J.) Co. 206,100 8,578,913 42307410
Kellogg Co. 153,800 6,882,550 48783610
Nestle SA ADR (Reg.) 42,300 2,479,838 64106940
Nestle SA (Reg.) 480 556,382 64106992
Sara Lee Corp. 229,100 9,221,275 80311110
41,648,876
GENERAL FOOD PREPARATIONS - 5.5%
CPC International, Inc. 121,500 10,828,688 12614910
McCormick & Co., Inc. (non-vtg.) 76,400 1,804,950 57978020
12,633,638
GRAIN MILL PRODUCTS - 8.9%
Archer-Daniels-Midland Co. 277,885 6,009,263 03948310
Quaker Oats Co. 85,600 4,023,200 74740210
Ralston Purina Co. 115,900 10,431,000 75127730
20,463,463
MEAT & FISH - 5.0%
ConAgra, Inc. 92,000 5,916,750 20588710
Tyson Foods, Inc. 267,925 5,693,406 90249410
11,610,156
POULTRY, SLAUGHTER & PROCESSING - 0.0%
Pilgrim's Pride Corp. 2,000 23,500 72146710
SHARES VALUE (NOTE 1)
SUGAR & CANDIES - 2.3%
Tootsie Roll Industries, Inc. 23,754 $ 1,160,977 89051610
Wrigley (Wm.) Jr. Co. 57,900 4,197,750 98252610
5,358,727
TOTAL FOODS 134,588,074
GENERAL MERCHANDISE STORES - 0.3%
VARIETY STORES - 0.3%
Costco Companies, Inc. (a) 20,800 750,100 22160Q10
GROCERY STORES - 3.4%
GROCERY - RETAIL - 3.4%
American Stores Co. 45,900 1,087,256 03009610
Dominick's Supermarkets, Inc. (a) 52,400 1,441,000 25715910
Safeway, Inc. (a) 106,200 5,409,563 78651420
7,937,819
HOUSEHOLD PRODUCTS - 1.5%
SOAPS & DETERGENTS - 1.5%
Unilever:
PLC Ord. 64,600 1,788,531 90476710
NV ADR 7,900 1,589,875 90478450
3,378,406
RESTAURANTS - 3.2%
CKE Restaurants, Inc. 18,300 590,175 12561E10
McDonald's Corp. 117,400 5,554,483 58013510
Rainforest Cafe, Inc. (a) 49,600 1,333,000 75086K10
7,477,658
TOBACCO - 12.7%
CIGARETTES - 4.4%
RJR Nabisco Holdings Corp. 288,620 10,047,584 74960K87
TOBACCO & TOBACCO PRODUCTS - WHOLESALE - 0.1%
Dimon, Inc. 14,000 336,000 25439410
TOBACCO MANUFACTURERS - 8.2%
Philip Morris Companies, Inc. 422,900 18,449,013 71815410
Standard Commercial Corp. 1,100 15,950 85325810
Universal Corp. 10,000 363,750 91345610
18,828,713
TOTAL TOBACCO 29,212,297
TOTAL COMMON STOCKS
(Cost $183,379,118) 209,363,911
CASH EQUIVALENTS - 9.3%
Taxable Central Cash Fund (b)
(Cost $21,445,450) 21,445,450 21,445,450 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $204,824,568) $ 230,809,361
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $67,436,700 and $73,839,465, respectively (see Note 3 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 $24,896 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $9,100,950 and $9,569,200, respectively (see Note 6 of
Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $205,483,846. Net unrealized appreciation
aggregated $25,325,515, of which $26,599,187 related to appreciated
investment securities and $1,273,672 related to depreciated investment
securities.
FOOD AND AGRICULTURE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, ) )
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 230,809,361
SECURITIES, AT
VALUE
(COST
$204,824,56
8) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 139,300
RECEIVABLE FOR 1,439,126
INVESTMENTS
SOLD
RECEIVABLE FOR 346,868
FUND SHARES
SOLD
DIVIDENDS 259,949
RECEIVABLE
INTEREST 104,122
RECEIVABLE
REDEMPTION FEES 385
RECEIVABLE
OTHER 3,623
RECEIVABLES
TOTAL ASSETS 233,102,734
LIABILITIES
PAYABLE FOR $ 1,377,609
INVESTMENTS
PURCHASED
PAYABLE FOR 1,376,682
FUND SHARES
REDEEMED
ACCRUED 115,727
MANAGEMENT
FEE
OTHER PAYABLES 232,221
AND
ACCRUED
EXPENSES
COLLATERAL ON 9,569,200
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 12,671,439
NET ASSETS $ 220,431,295
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 181,769,108
UNDISTRIBUTED 1,021,898
NET INVESTMENT
INCOME
ACCUMULATED 11,655,565
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 25,984,724
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 220,431,295
4,979,945
SHARES
OUTSTANDING
NET ASSET $44.26
VALUE AND
REDEMPTION
PRICE PER
SHARE
($220,431,2
95 (DIVIDED BY)
4,979,945
SHARES)
MAXIMUM $45.63
OFFERING PRICE
PER SHARE
(100/97.00
OF $44.26)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 2,273,494
INCOME
DIVIDENDS
INTEREST 546,891
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$37,608)
TOTAL INCOME 2,820,385
EXPENSES
MANAGEMENT $ 712,935
FEE
TRANSFER AGENT 931,697
FEES
ACCOUNTING AND 121,223
SECURITY
LENDING FEES
NON-INTERESTED 528
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 7,456
AND EXPENSES
REGISTRATION FEES 29,313
AUDIT 13,829
LEGAL 665
MISCELLANEOUS 1,746
TOTAL EXPENSES 1,819,392
BEFORE
REDUCTIONS
EXPENSE (18,084) 1,801,308
REDUCTIONS
NET INVESTMENT 1,019,077
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 12,361,946
SECURITIES
FOREIGN (44) 12,361,902
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 1,928,449
SECURITIES
ASSETS AND (73) 1,928,376
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 14,290,278
NET INCREASE $ 15,309,355
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 378,816
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 2,529
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 37,283
WITHHELD BY
FSC
EXPENSE $ 18,063
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 4
CREDITS
TRANSFER 17
AGENT CREDITS
$ 18,084
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 1,019,077 $ 2,814,245
NET
INVESTMENT
INCOME
NET REALIZED 12,361,902 41,584,137
GAIN (LOSS)
CHANGE IN NET 1,928,376 (16,830,573)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 15,309,355 27,567,809
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (704,594) (1,549,005)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (13,500,766) (17,656,169)
REALIZED GAIN
TOTAL (14,205,360) (19,205,174)
DISTRIBUTIONS
SHARE 95,882,663 332,131,288
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 13,983,611 18,966,497
OF
DISTRIBUTIONS
COST OF SHARES (114,130,384) (437,551,907)
REDEEMED
REDEMPTION 168,848 411,716
FEES
NET INCREASE (4,095,262) (86,042,406)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (2,991,267) (77,679,771)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 223,422,562 301,102,333
PERIOD
END OF PERIOD $ 220,431,295 $ 223,422,562
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$1,021,89
8 AND
$1,614,81
8,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 2,219,930 8,035,192
ISSUED IN 350,995 465,609
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,608,334) (10,627,722)
NET INCREASE (37,409) (2,126,921)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 44.53 $ 42.15 $ 32.53 $ 31.49 $ 30.86 $ 29.22
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .19 .42 .37 .15 .09 .05
INVESTMENT
INCOME D
NET REALIZED 2.33 4.91 11.61 2.80 3.29 3.26
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 2.52 5.33 11.98 2.95 3.38 3.31
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.14) (.24) (.20) (.08) (.06) (.10)
INVESTMENT
INCOME
FROM NET (2.68) (2.77) (2.20) (1.85) (2.70) (1.57)
REALIZED GAIN
TOTAL (2.82) (3.01) (2.40) (1.93) (2.76) (1.67)
DISTRIBUTIONS
REDEMPTION FEES .03 .06 .04 .02 .01 -
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 44.26 $ 44.53 $ 42.15 $ 32.53 $ 31.49 $ 30.86
END OF PERIOD
TOTAL RETURN B, C 6.43% 13.59% 37.92% 10.14% 11.69% 11.72%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 220,431 $ 223,423 $ 301,102 $ 197,130 $ 95,010 $ 108,377
OF PERIOD
(000 OMITTED)
RATIO OF 1.51% A 1.52% 1.43% 1.70% 1.65% 1.67% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.50% A, E 1.50% E 1.42% E 1.68% E 1.64% E 1.67% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .85% A 1.01% .99% .49% .29% .21% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 61% A 91% 124% 126% 96% 515% A
TURNOVER RATE
AVERAGE $ .0329 $ .0326
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER 1,
1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
LEISURE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
LEISURE 14.29% 21.96% 151.06% 223.56%
LEISURE 10.86% 18.30% 143.53% 213.85%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
LEISURE 21.96% 20.21% 12.46%
LEISURE 18.30% 19.48% 12.12%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970916 120851 S00000000000001
Leisure S&P 500
00062 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9489.92 9781.00
1987/10/31 6781.79 7674.17
1987/11/30 6309.10 7041.82
1987/12/31 7116.06 7577.70
1988/01/31 7225.60 7896.72
1988/02/29 7857.24 8264.71
1988/03/31 8120.12 8009.33
1988/04/30 8171.24 8098.24
1988/05/31 7959.47 8168.69
1988/06/30 8491.09 8543.63
1988/07/31 8561.70 8511.17
1988/08/31 8227.26 8221.79
1988/09/30 8799.52 8572.04
1988/10/31 8799.52 8810.34
1988/11/30 8461.37 8684.35
1988/12/31 8966.74 8836.33
1989/01/31 9732.24 9483.15
1989/02/28 9576.17 9247.02
1989/03/31 10025.81 9462.47
1989/04/30 10594.36 9953.57
1989/05/31 11122.03 10356.69
1989/06/30 11227.50 10297.66
1989/07/31 12169.69 11227.54
1989/08/31 12267.29 11447.60
1989/09/30 12346.12 11400.66
1989/10/31 11456.48 11136.17
1989/11/30 11591.61 11363.35
1989/12/31 11765.07 11636.07
1990/01/31 10338.28 10855.29
1990/02/28 10246.61 10995.32
1990/03/31 10326.32 11286.70
1990/04/30 9923.79 11004.53
1990/05/31 10744.79 12077.47
1990/06/30 10621.24 11995.34
1990/07/31 10254.58 11956.96
1990/08/31 9070.90 10876.05
1990/09/30 8210.04 10346.39
1990/10/31 8114.39 10301.90
1990/11/30 8760.04 10967.40
1990/12/31 9143.17 11273.39
1991/01/31 9654.48 11764.91
1991/02/28 10395.27 12606.10
1991/03/31 10568.39 12911.17
1991/04/30 10596.57 12942.15
1991/05/31 10962.94 13501.25
1991/06/30 10346.96 12882.90
1991/07/31 10842.16 13483.24
1991/08/31 10954.89 13802.79
1991/09/30 11236.71 13572.29
1991/10/31 11574.90 13754.15
1991/11/30 11019.31 13199.86
1991/12/31 12154.65 14709.93
1992/01/31 12428.43 14436.32
1992/02/29 12863.24 14623.99
1992/03/31 12601.55 14338.83
1992/04/30 12742.46 14760.39
1992/05/31 12818.95 14832.71
1992/06/30 12621.68 14611.71
1992/07/31 12682.07 15209.33
1992/08/31 12500.90 14897.53
1992/09/30 12746.48 15073.32
1992/10/31 12843.11 15126.08
1992/11/30 13716.76 15641.88
1992/12/31 14127.42 15834.28
1993/01/31 14477.69 15967.28
1993/02/28 14401.19 16184.44
1993/03/31 15150.04 16525.93
1993/04/30 14808.61 16126.00
1993/05/31 15872.35 16558.18
1993/06/30 16299.52 16606.20
1993/07/31 16735.07 16539.77
1993/08/31 17886.76 17166.63
1993/09/30 18778.79 17034.45
1993/10/31 19817.41 17387.06
1993/11/30 19080.33 17221.88
1993/12/31 19715.34 17430.27
1994/01/31 19920.25 18022.90
1994/02/28 19750.21 17534.48
1994/03/31 18555.61 16769.97
1994/04/30 18593.02 16984.63
1994/05/31 18396.24 17263.18
1994/06/30 17618.73 16840.23
1994/07/31 18300.25 17392.59
1994/08/31 19029.77 18105.69
1994/09/30 19024.97 17662.10
1994/10/31 18957.78 18059.49
1994/11/30 18146.67 17401.77
1994/12/31 18367.44 17659.84
1995/01/31 18703.41 18117.75
1995/02/28 19538.51 18823.80
1995/03/31 20052.05 19379.29
1995/04/30 20229.69 19950.01
1995/05/31 20621.14 20747.42
1995/06/30 21418.54 21229.38
1995/07/31 22907.01 21933.35
1995/08/31 23641.58 21988.40
1995/09/30 23680.24 22916.31
1995/10/31 22539.72 22834.50
1995/11/30 23274.30 23836.93
1995/12/31 23318.90 24296.03
1996/01/31 23664.52 25123.07
1996/02/29 24933.61 25355.96
1996/03/31 25057.82 25600.14
1996/04/30 26086.66 25977.48
1996/05/31 27157.06 26647.44
1996/06/30 27052.22 26748.97
1996/07/31 25110.07 25567.20
1996/08/31 25733.55 26106.41
1996/09/30 26986.01 27575.68
1996/10/31 26246.67 28336.22
1996/11/30 26991.53 30478.15
1996/12/31 26444.87 29874.38
1997/01/31 27621.86 31740.93
1997/02/28 27461.10 31989.78
1997/03/31 26444.87 30675.32
1997/04/30 26694.09 32506.64
1997/05/31 29196.47 34485.64
1997/06/30 30348.17 36030.60
1997/07/31 31897.83 38897.55
1997/08/29 31385.30 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970916 120855 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Leisure Portfolio on August 31, 1987, and
the current maximum 3% sales charge was paid. As the chart shows, by
August 31, 1997, the value of the investment would have grown to
$31,385 - a 213.85% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
HFS, INC. 8.2
STARBUCKS CORP. 6.3
TIME WARNER, INC. 5.3
VIACOM, INC. CLASS B (NON-VTG.) 4.3
BET HOLDINGS, INC. CLASS A 3.8
NIKE, INC. CLASS B 3.3
WESTINGHOUSE ELECTRIC CORP. 3.2
DISNEY (WALT) CO. 3.1
STEINER LEISURE LTD 2.9
TELE-COMMUNICATIONS LIBERTY MEDIA GROUP, SERIES A 2.5
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 52.0
ROW: 1, COL: 2, VALUE: 4.0
ROW: 1, COL: 3, VALUE: 7.6
ROW: 1, COL: 4, VALUE: 9.1
ROW: 1, COL: 5, VALUE: 13.0
ROW: 1, COL: 6, VALUE: 14.3
CABLE TV OPERATORS 14.3%
HOTELS, MOTELS, &
TOURIST COURTS 13.0%
MOTION PICTURE PRODUCTION 9.1%
RESTAURANTS 7.6%
FOOTWEAR 4.0%
ALL OTHERS 52.0%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
LEISURE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Paul Antico, Portfolio Manager of Fidelity Select Leisure Portfolio
Q. HOW DID THE FUND PERFORM, PAUL?
D.C. For the six- and 12-month periods that ended August 31, 1997, the
fund returned 14.29% and 21.96%, respectively. By comparison, the
Standard & Poor's 500 Index returned 14.78% and 40.65% for the same
time periods.
Q. WHAT FACTORS ACCOUNTED FOR THE FUND'S PERFORMANCE OVER THE PAST SIX
MONTHS?
D.C. The key factors helping the fund's performance during the period
were the portfolio's weighting in large-capitalization, blue chip
stocks, plus selected investments in attractively valued mid- and
small-cap stocks, which helped lift returns nearer to that of the S&P
over the past several months. I found excellent value in such
companies as Coca-Cola and General Electric, as well as large-cap
entertainment stocks such as Walt Disney.
Q. DID YOU MAKE ANY SIGNIFICANT CHANGES IN THE FUND'S BROADCASTING
HOLDINGS DURING THE PERIOD?
D.C. Overall, I reduced the fund's weighting in radio broadcasting,
while increasing positions in cable television. In the cable
television industry, I increased the fund's positions in the networks
to a greater degree than the cable operators. With the operators -
those companies providing cable service to consumers - I was concerned
about the lack of industry standards for both cable and telephone
service and how that might increase operating costs and slow market
penetration. On the other hand, I was much more optimistic about cable
networks. Their ratings have been going up dramatically relative to
the broadcast channels, so their advertising rates have gone up.
During the period, I increased the fund's positions in such cable
networks as BET Holdings.
Q. YOU ALSO SEEMED TO REDUCE YOUR HOLDINGS IN MANY OF THE BLUE-CHIP
CONSUMER ISSUES . . .
D.C. That's right. Later in the period I began to feel that valuations
in this sector were too high, and that a contraction was starting in
this part of the market. I felt that Coca-Cola's stock, for example,
was too expensive based on an over-valuing of its bottlers, so I sold
some of it. With other companies, such as Procter & Gamble, I began to
feel that their valuations were high as well, and I didn't see the
same opportunities for appreciation going forward.
Q. WHAT STOCKS PERFORMED WELL DURING THE PERIOD?
D.C. The fund benefited from the strong performance of such
diversified companies as General Electric and Nokia. Starbucks also
performed very well. I liked this company's plans for expansion both
domestically and internationally, its record of terrific growth and
its potential to exploit the Starbucks brand name in supermarkets.
Q. WERE THERE ANY DISAPPOINTMENTS?
D.C. Apparel stocks have been a very disappointing group for the fund.
Gadzooks, for example, had to pre-announce an earnings disappointment,
which hurt its stock. Other disappointments included Viacom, which was
affected by problems experienced by its Blockbuster Video subsidiary.
Another related disappointment was Hollywood Entertainment, the number
two company in its market after Blockbuster. Hollywood's stock was
dragged down by Blockbuster's tumble.
Q. HOW ARE YOU POSITIONING THE FUND GOING FORWARD, PAUL?
D.C. Currently, I am optimistic about the market's potential. Change
is occurring in many leisure industries, such as cellular, cable and
broadcasting, and with change comes opportunity. That having been
said, the fund continues to employ a bottom-up stock picking strategy,
but is more aggressively investing in cable systems and networks,
cellular operators and suppliers, and diversified entertainment
companies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: May 8, 1984
FUND NUMBER: 062
TRADING SYMBOL: FDLSX
SIZE: as of August 31, 1997, more than
$98 million
MANAGER: Paul Antico, since January 1997;
manager, Fidelity Select Consumer Industries
Portfolio, since January 1997; Fidelity Advisor
Consumer Industries Portfolio, since January
1997; Fidelity Select Industrial Equipment
Portfolio, 1996-February 1997; Fidelity
Select Developing Communications Portfolio,
1993-1996; joined Fidelity in 1991
(checkmark)
LEISURE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.8%
SHARES VALUE (NOTE 1)
ADVERTISING - 4.5%
ADVERTISING - 3.7%
Outdoor Systems, Inc. (a) 61,800 $ 1,633,833 69005710
Universal Outdoor Holdings, Inc. (a) 58,700 2,010,475 91377M10
3,644,308
ADVERTISING AGENCIES - 0.8%
Omnicom Group, Inc. 12,200 826,550 68191910
TOTAL ADVERTISING 4,470,858
APPAREL STORES - 1.1%
GENERAL APPAREL STORES - 1.1%
TJX Companies, Inc. 40,000 1,100,000 87254010
BEVERAGES - 3.0%
DISTILLED & BLENDED LIQUOR - 1.1%
Seagram Co. Ltd. 30,000 1,048,460 81185010
SOFT DRINKS - 1.9%
Coca-Cola Co. (The) 10,000 573,125 19121610
PepsiCo, Inc. 37,382 1,345,752 71344810
1,918,877
TOTAL BEVERAGES 2,967,337
BROADCASTING - 15.3%
CABLE TV OPERATORS - 14.3%
BET Holdings, Inc. Class A (a) 94,400 3,717,000 08658510
Cox Communications, Inc. Class A (a) 60,700 1,642,694 22404410
TCA Cable TV, Inc. 24,800 942,400 87224110
Tele-Communications Liberty Media Group,
Series A (a) 95,000 2,505,625 87924V50
Time Warner, Inc. 101,900 5,247,850 88731510
14,055,569
TELEVISION BROADCASTING - 1.0%
HSN, Inc. 30,000 990,000 40429R10
TOTAL BROADCASTING 15,045,569
CELLULAR - 3.8%
CELLULAR & COMMUNICATION SERVICES - 3.8%
AirTouch Communications, Inc. (a) 50,000 1,690,625 00949T10
Nextel Communications, Inc. Class A (a) 45,000 1,127,813 65332V10
United States Cellular Corp. 30,000 903,750 91168410
3,722,188
COMMUNICATIONS EQUIPMENT - 0.1%
TELEPHONE EQUIPMENT - 0.1%
Nokia Corp. AB sponsored ADR 1,000 77,500 65490220
COMPUTER SERVICES & SOFTWARE - 2.1%
COMPUTER SERVICES - 1.1%
America Online, Inc. (a) 16,600 1,070,700 02364J10
ELECTRONIC INFORMATION RETRIEVAL - 1.0%
CUC International, Inc. (a) 43,800 1,029,300 12654510
TOTAL COMPUTER SERVICES & SOFTWARE 2,100,000
DRUG STORES - 0.6%
DRUG STORES - 0.6%
CVS Corp. 11,000 620,125 12665010
ELECTRICAL EQUIPMENT - 3.5%
ELECTRICAL MACHINERY - 3.5%
General Electric Co. 4,800 300,000 36960410
Westinghouse Electric Corp. 121,817 3,136,788 96040210
3,436,788
SHARES VALUE (NOTE 1)
TV & RADIO COMMUNICATION EQUIPMENT - 0.0%
Leitch Technology Corp. 600 $ 16,343 52543H10
TOTAL ELECTRICAL EQUIPMENT 3,453,131
ELECTRONICS - 0.9%
ELECTRONIC PARTS - WHOLESALE - 0.9%
Brightpoint, Inc. (a) 24,250 909,375 10947310
ENTERTAINMENT - 14.0%
AMUSEMENT & RECREATIONAL SERVICES - 1.3%
IMAX Corp. (a) 55,000 1,307,872 45245E10
MOTION PICTURE DISTRIBUTION - 1.7%
All American Communications, Inc.
Class B (non-vtg.) (a) 116,800 1,635,200 01648040
MOTION PICTURE PRODUCTION - 9.1%
Cinar Films, Inc. Class B (sub-vtg.) (a) 8,800 281,232 17190530
Disney (Walt) Co. 39,452 3,030,407 25468710
King World Productions, Inc. 35,000 1,391,250 49566710
Viacom, Inc. Class B (non-vtg.) (a) 142,500 4,221,563 92552430
8,924,452
RECREATIONAL SERVICES - 1.9%
MGM Grand, Inc. (a) 25,100 1,007,138 55295310
Premier Parks, Inc. (a) 25,900 835,275 74054020
1,842,413
TOTAL ENTERTAINMENT 13,709,937
FOODS - 1.2%
PACKAGED & FROZEN FOODS - 1.2%
Dreyer's Grand Ice Cream, Inc. 25,000 1,168,750 26187810
GENERAL MERCHANDISE STORES - 0.2%
VARIETY STORES - 0.2%
Michaels Stores, Inc. 10,000 244,375 59408710
LEASING & RENTAL - 2.3%
VIDEO TAPE RENTAL - 2.3%
Hollywood Entertainment Corp. (a) 139,500 2,284,313 43614110
LEISURE DURABLES & TOYS - 4.0%
MOTORCYCLES - 0.3%
Harley-Davidson, Inc. 5,000 270,625 41282210
SPORTING & ATHLETIC GOODS - 0.5%
Callaway Golf Co. 14,800 498,575 13119310
TOYS & GAMES - 2.1%
Mattel, Inc. 63,000 2,106,563 57708110
TRAVEL TRAILERS AND CAMPERS - 1.1%
Brunswick Corp. 34,300 1,046,150 11704310
TOTAL LEISURE DURABLES & TOYS 3,921,913
LODGING & GAMING - 14.5%
HOTELS, MOTELS, & TOURIST COURTS - 13.0%
HFS, Inc. (a) 144,400 8,041,275 40418110
Host Marriott Corp. (a) 40,000 780,000 44107810
ITT Corp. (New) (a) 26,200 1,645,688 45091210
Mirage Resorts, Inc. (a) 50,800 1,362,075 60462E10
Sun International Hotels Ltd. Ord. (a) 29,300 985,213 86699N22
12,814,251
LODGING PLACES, OTHER THAN HOTELS - 1.0%
Doubletree Corp. (a) 19,700 985,000 25862410
RACING & GAMING - 0.5%
Players International, Inc. (a) 130,800 474,150 72790310
TOTAL LODGING & GAMING 14,273,401
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PUBLISHING - 0.8%
PERIODICALS - 0.8%
Playboy Enterprises, Inc. Class B (a) 63,600 $ 802,950 72811730
REAL ESTATE INVESTMENT TRUSTS - 0.6%
Felcor Suite Hotels, Inc. (REIT) 14,500 551,000 31430510
RESTAURANTS - 7.6%
Rainforest Cafe, Inc. (a) 44,700 1,201,313 75086K10
Starbucks Corp. (a) 152,300 6,244,300 85524410
7,445,613
RETAIL & WHOLESALE, MISCELLANEOUS - 1.6%
HOBBY, TOY, & GAME SHOPS - 0.5%
Toys "R" Us, Inc. (a) 13,400 463,138 89233510
MAIL ORDER - 0.2%
Comcast Corp. Class A special 10,000 234,375 20030020
RETAIL STORES - 0.9%
Gadzooks, Inc. (a) 45,000 855,000 36255310
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 1,552,513
SERVICES - 5.1%
BEAUTY SHOPS - 2.9%
Steiner Leisure Ltd. 93,600 2,854,800 85899J22
MISCELLANEOUS BUSINESS SERVICES - 2.2%
Medialink Worldwide, Inc. 200,500 2,205,500 58445P10
TOTAL SERVICES 5,060,300
TELEPHONE SERVICES - 2.0%
TELEPHONE SERVICES - 2.0%
US WEST Media Group 100,100 2,002,000 91288920
TEXTILES & APPAREL - 6.0%
FOOTWEAR - 4.0%
NIKE, Inc. Class B 60,400 3,223,850 65410610
Reebok International Ltd. 16,000 703,000 75811010
3,926,850
KNIT OUTERWEAR MILLS - 0.2%
Tultex Corp. (a) 43,200 248,400 89990010
MEN'S & BOYS' CLOTHING - 1.8%
Tommy Hilfiger (a) 40,000 1,745,000 89299B92
TOTAL TEXTILES & APPAREL 5,920,250
TOTAL COMMON STOCKS
(Cost $88,273,940) 93,403,398
CONVERTIBLE PREFERRED STOCKS - 1.1%
CELLULAR - 1.1%
CELLULAR & COMMUNICATION SERVICES - 1.1%
AirTouch Communications, Inc.
Class B $1.74 28,167 922,469 00949T20
Class C $2.125 2,034 111,234 00949T30
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $861,809) 1,033,703
CASH EQUIVALENTS - 4.1%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund
(Cost $4,080,569) (b) 4,080,569 $ 4,080,569 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $93,216,318) $ 98,517,670
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $111,536,602 and $120,571,271, respectively (see Note 3 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 $46,372 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $93,216,318. Net unrealized appreciation
aggregated $5,301,352, of which $8,476,035 related to appreciated
investment securities and $3,174,683 related to depreciated investment
securities.
LEISURE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, ) )
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 98,517,670
SECURITIES, AT
VALUE
(COST
$93,216,318
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 2,484,960
INVESTMENTS
SOLD
RECEIVABLE FOR 15,686
FUND SHARES
SOLD
DIVIDENDS 50,016
RECEIVABLE
REDEMPTION FEES 83
RECEIVABLE
OTHER 47,310
RECEIVABLES
TOTAL ASSETS 101,115,725
LIABILITIES
PAYABLE FOR $ 1,868,727
INVESTMENTS
PURCHASED
PAYABLE FOR 232,839
FUND SHARES
REDEEMED
ACCRUED 49,463
MANAGEMENT
FEE
OTHER PAYABLES 81,722
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 2,232,751
NET ASSETS $ 98,882,974
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 80,090,341
UNDISTRIBUTED 105,875
NET INVESTMENT
INCOME
ACCUMULATED 13,385,406
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 5,301,352
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 98,882,974
1,899,710
SHARES
OUTSTANDING
NET ASSET $52.05
VALUE AND
REDEMPTION
PRICE PER
SHARE
($98,882,97
4 (DIVIDED BY)
1,899,710
SHARES)
MAXIMUM $53.66
OFFERING PRICE
PER SHARE
(100/97.00
OF $52.05)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 147,235
INCOME
DIVIDENDS
INTEREST 275,875
TOTAL INCOME 423,110
EXPENSES
MANAGEMENT $ 286,271
FEE
TRANSFER AGENT 354,222
FEES
ACCOUNTING FEES 48,219
AND EXPENSES
NON-INTERESTED 214
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 11,823
AND EXPENSES
REGISTRATION FEES 14,801
AUDIT 11,147
LEGAL 618
MISCELLANEOUS 291
TOTAL EXPENSES 727,606
BEFORE
REDUCTIONS
EXPENSE (33,792) 693,814
REDUCTIONS
NET INVESTMENT (270,704)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 13,435,557
SECURITIES
FOREIGN 429 13,435,986
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (1,081,476)
SECURITIES
ASSETS AND 55 (1,081,421)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 12,354,565
NET INCREASE $ 12,083,861
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 42,417
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 8,261
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 7,913
WITHHELD BY
FSC
EXPENSE $ 31,755
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 2,037
CREDITS
$ 33,792
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (270,704) $ (130,873)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 13,435,986 12,370,765
GAIN (LOSS)
CHANGE IN NET (1,081,421) (3,321,479)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,083,861 8,918,413
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (4,403,002) (6,329,218)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 20,304,635 109,666,003
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 4,315,001 6,225,261
OF
DISTRIBUTIONS
COST OF SHARES (31,573,100) (105,536,133)
REDEEMED
REDEMPTION 22,193 176,193
FEES
NET INCREASE (6,931,271) 10,531,324
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 749,588 13,120,519
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 98,133,386 85,012,867
PERIOD
END OF PERIOD $ 98,882,974 $ 98,133,386
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$105,875
AND
$376,579,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 410,783 2,311,420
ISSUED IN 98,091 136,974
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (660,890) (2,238,078)
NET INCREASE (152,016) 210,316
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 47.83 $ 46.17 $ 40.71 $ 45.30 $ 35.77 $ 31.65
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.14) (.06) G (.21) (.21) (.29) (.11)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 6.56 4.47 10.97 (.48) 12.98 4.21
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 6.42 4.41 10.76 (.69) 12.69 4.10
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (2.21) (2.83) (5.32) (3.93) (3.26) -
REALIZED GAIN
REDEMPTION FEES .01 .08 .02 .03 .10 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 52.05 $ 47.83 $ 46.17 $ 40.71 $ 45.30 $ 35.77
END OF PERIOD
TOTAL RETURN B, C 14.29% 10.14% 27.61% (1.07)% 37.14% 13.02%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 98,883 $ 98,133 $ 85,013 $ 69,569 $ 105,833 $ 44,824
OF PERIOD
(000 OMITTED)
RATIO OF 1.51% A 1.56% 1.64% 1.64% 1.55% 1.90% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.44% A, E 1.54% E 1.63% E 1.62% E 1.53% E 1.90% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.56)% A (.12)% (.46)% (.52)% (.69)% (.39)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 255% A 127% 141% 103% 170% 109% A
TURNOVER RATE
AVERAGE $ .0390 $ .0370
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. G INVEST
MENT INCOME
(LOSS) PER SHARE
REFLECTS A SPECIAL
DIVIDEND WHICH
AMOUNTED TO
$.23 PER SHARE.
MULTIMEDIA PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
MULTIMEDIA 17.28% 17.25% 151.22% 284.91%
MULTIMEDIA 13.76% 13.73% 143.69% 273.36%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
MULTIMEDIA 17.25% 20.23% 14.43%
MULTIMEDIA 13.73% 19.50% 14.08%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 145507 S00000000000001
Multimedia S&P 500
00503 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9466.76 9781.00
1987/10/31 7539.11 7674.17
1987/11/30 7017.75 7041.82
1987/12/31 8046.47 7577.70
1988/01/31 8179.71 7896.72
1988/02/29 8727.49 8264.71
1988/03/31 9105.02 8009.33
1988/04/30 9216.05 8098.24
1988/05/31 9060.60 8168.69
1988/06/30 9373.55 8543.63
1988/07/31 9358.23 8511.17
1988/08/31 9005.96 8221.79
1988/09/30 9572.66 8572.04
1988/10/31 9679.87 8810.34
1988/11/30 9603.29 8684.35
1988/12/31 10206.72 8836.33
1989/01/31 11425.55 9483.15
1989/02/28 11401.96 9247.02
1989/03/31 11936.68 9462.47
1989/04/30 12738.75 9953.57
1989/05/31 13352.09 10356.69
1989/06/30 13625.49 10297.66
1989/07/31 14662.04 11227.54
1989/08/31 14646.22 11447.60
1989/09/30 14416.75 11400.66
1989/10/31 13443.50 11136.17
1989/11/30 13522.63 11363.35
1989/12/31 13528.36 11636.07
1990/01/31 11731.98 10855.29
1990/02/28 11435.68 10995.32
1990/03/31 11324.56 11286.70
1990/04/30 10787.50 11004.53
1990/05/31 11815.32 12077.47
1990/06/30 11713.47 11995.34
1990/07/31 11065.29 11956.96
1990/08/31 9630.04 10876.05
1990/09/30 8805.93 10346.39
1990/10/31 8426.29 10301.90
1990/11/30 9296.70 10967.40
1990/12/31 9981.91 11273.39
1991/01/31 10518.97 11764.91
1991/02/28 11296.78 12606.10
1991/03/31 11602.35 12911.17
1991/04/30 12000.51 12942.15
1991/05/31 12065.33 13501.25
1991/06/30 11111.59 12882.90
1991/07/31 11528.27 13483.24
1991/08/31 11889.40 13802.79
1991/09/30 12611.65 13572.29
1991/10/31 13250.57 13754.15
1991/11/30 12343.12 13199.86
1991/12/31 13759.85 14709.93
1992/01/31 14120.98 14436.32
1992/02/29 14908.05 14623.99
1992/03/31 14528.40 14338.83
1992/04/30 14750.63 14760.39
1992/05/31 14972.86 14832.71
1992/06/30 15028.42 14611.71
1992/07/31 15065.46 15209.33
1992/08/31 14861.75 14897.53
1992/09/30 14769.15 15073.32
1992/10/31 15009.90 15126.08
1992/11/30 16102.54 15641.88
1992/12/31 16717.95 15834.28
1993/01/31 17055.68 15967.28
1993/02/28 17130.74 16184.44
1993/03/31 17806.21 16525.93
1993/04/30 17345.74 16126.00
1993/05/31 18528.19 16558.18
1993/06/30 19109.88 16606.20
1993/07/31 19825.06 16539.77
1993/08/31 21512.91 17166.63
1993/09/30 22027.85 17034.45
1993/10/31 23677.55 17387.06
1993/11/30 22132.34 17221.88
1993/12/31 23074.19 17430.27
1994/01/31 23403.27 18022.90
1994/02/28 23103.23 17534.48
1994/03/31 21690.13 16769.97
1994/04/30 21700.65 16984.63
1994/05/31 22498.71 17263.18
1994/06/30 21995.82 16840.23
1994/07/31 22531.51 17392.59
1994/08/31 23887.11 18105.69
1994/09/30 23723.13 17662.10
1994/10/31 24258.81 18059.49
1994/11/30 23493.55 17401.77
1994/12/31 23997.98 17659.84
1995/01/31 24269.27 18117.75
1995/02/28 25264.00 18823.80
1995/03/31 26869.14 19379.29
1995/04/30 27490.85 19950.01
1995/05/31 27637.80 20747.42
1995/06/30 28700.36 21229.38
1995/07/31 30395.93 21933.35
1995/08/31 31356.75 21988.40
1995/09/30 32249.75 22916.31
1995/10/31 31300.23 22834.50
1995/11/30 32509.74 23836.93
1995/12/31 32078.78 24296.03
1996/01/31 32275.06 25123.07
1996/02/29 33342.31 25355.96
1996/03/31 32900.69 25600.14
1996/04/30 34432.31 25977.48
1996/05/31 35575.86 26647.44
1996/06/30 33929.65 26748.97
1996/07/31 30700.05 25567.20
1996/08/31 31843.60 26106.41
1996/09/30 33866.81 27575.68
1996/10/31 32911.76 28336.22
1996/11/30 33514.95 30478.15
1996/12/31 32423.16 29874.38
1997/01/31 32257.02 31740.93
1997/02/28 31835.27 31989.78
1997/03/31 30288.88 30675.32
1997/04/30 30965.22 32506.64
1997/05/31 33921.76 34485.64
1997/06/30 36145.71 36030.60
1997/07/31 38081.86 38897.55
1997/08/29 37336.18 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 145530 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Multimedia Portfolio on August 31, 1987
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$37,336 - a 273.36% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
OMNICOM GROUP, INC. 6.9
WORLDCOM, INC. 5.8
MICROSOFT CORP. 5.4
TIMES MIRROR CO. CLASS A 5.4
COMPAQ COMPUTER CORP. 5.0
COGNIZANT CORP. 4.3
ORACLE CORP. 4.1
MOBILE TELECOMMUNICATIONS TECHNOLOGIES, INC. 4.0
GIBSON GREETINGS, INC. 3.7
ADVO, INC. 3.6
TOP INDUSTRIES AS OF AUGUST 31, 1997
7.7
PREPACKAGED COMPUTER
SOFTWARE 14.0%
NEWSPAPERS 11.5%
ADVERTISING AGENCIES 11.4%
BOOK PUBLISHING & PRINTING 9.0%
TELEPHONE SERVICES 8.2%
ALL OTHERS 45.9%
ROW: 1, COL: 1, VALUE: 45.9
ROW: 1, COL: 2, VALUE: 8.199999999999999
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 11.4
ROW: 1, COL: 5, VALUE: 11.5
ROW: 1, COL: 6, VALUE: 14.0
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
MULTIMEDIA PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
John Porter,
Portfolio Manager of
Fidelity Select Multimedia Portfolio
Q. HOW DID THE FUND PERFORM, JOHN?
D.C. For the six months that ended on August 31, 1997 the fund had a
total return of 17.28%. For the year that ended on August 31, 1997, it
returned 17.25%. For the same periods, the Standard & Poor's 500 Index
returned 14.78% and 40.65%, respectively.
Q. THE FUND'S PERFORMANCE RELATIVE TO THE OVERALL MARKET IMPROVED
SUBSTANTIALLY OVER THE PAST SIX MONTHS. WHAT WERE THE PRINCIPAL
REASONS?
D.C. I think there were three major factors that contributed to the
performance. First, the fund had a significant exposure to advertising
agencies, which had a very good year, particularly a very good past
six months. We have significant positions in two large advertising
agencies, Omnicom Group, Inc., and Interpublic Group, both of which
were fantastic stocks over the period. Omnicom, for example, was the
largest position in the fund for the past six months. It is up 48%
year-to-date. Second, I made a decision early this year to reduce the
exposure to publishing stocks, which had been strong contributors to
the fund in 1996. During the past six months, market expectations of
rising paper costs hurt the performance of print media stocks. The
decision to redeploy assets from publishing companies to other areas
turned out to be a good one. Third, we started to look more at
technology companies.
Q. WOULD YOU ELABORATE ON THE EMPHASIS ON TECHNOLOGY?
D.C. Certainly. Early this year, I started to think critically about
multimedia from a technology perspective. I began to look at hardware
and software companies in terms of the Internet and access to
information, and to take positions in companies such as Microsoft,
Intel and Compaq.
Q. HOW ELSE HAS YOUR DEFINITION OF MULTIMEDIA EVOLVED?
D.C. Early this year, the fund became more precisely focused on how
information is distributed. I thought more in terms of television
distribution, radio distribution, newspaper distribution and, on the
software side, on-line access to information. So the fund has become
more focused on media/information access.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO THE FUND'S
PERFORMANCE?
D.C. I've already mentioned Omnicom, Interpublic and the technology
companies. Cognizant Corporation has been one of the best performing
stocks. This is a strong growth company with some wonderful franchises
and a management team focused on its core businesses. It was spun out
of Dun & Bradstreet late in 1996. The company has a 20% growth rate,
yet was trading at a lower price-to-earnings multiple than companies
with comparable growth. It owns Nielson Media Research, the television
rating service, and IMS, which keeps track of pharmaceutical industry
market share. It also owns a large position in the Gartner Group,
which provides information technology consulting services. Another
strong contributor was the Tribune Company, best known for owning the
Chicago Tribune. The stock made a solid comeback this year.
Q. WERE THERE ANY DISAPPOINTMENTS?
D.C. Probably the biggest disappointment was the Times-Mirror Co. This
newspaper stock was one of the best contributors in 1996 and early
1997, and it's been one of the top five positions in the fund all year
long. However, in the last two quarters, concern has grown about a
couple of its businesses, especially a legal publishing business whose
turnaround has been slower than investors expected. However, the basic
story of the company continues to be strong.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
D.C. It's very difficult to talk about what may happen over the next
six months, and I've tried to position the fund for the next three to
five years. I've continued to modestly reduce the exposure to
publishing and newspapers, where earnings are slowing. I've readjusted
the fund to increase the exposure to technology, geared around access
to information. We are witnessing very powerful trends involving
Internet usage and on-line access to information. I think the fund is
very well positioned for the future.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 30, 1986
FUND NUMBER: 503
TRADING SYMBOL: FBMPX
SIZE: as of August 31, 1997, more than
$48 million
MANAGER: John Porter, since 1996; equity
analyst, newspaper and publishing industries,
since 1996; joined Fidelity in 1995
(checkmark)
MULTIMEDIA PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.5%
SHARES VALUE (NOTE 1)
ADVERTISING - 12.0%
ADVERTISING - 0.6%
Cordiant PLC sponsored ADR 50,000 $ 281,250 21851410
ADVERTISING AGENCIES - 11.4%
ADVO, Inc. (a) 95,800 1,766,313 00758510
Interpublic Group of Companies, Inc. 9,000 438,750 46069010
Omnicom Group, Inc. 50,000 3,387,500 68191910
5,592,563
TOTAL ADVERTISING 5,873,813
BROADCASTING - 4.0%
CABLE TV OPERATORS - 0.9%
TCI Group Class A 25,000 437,500 87924V10
TELEVISION BROADCASTING - 3.1%
Central European Media Class C (a) 15,000 388,125 15399422
HSN, Inc. (a) 35,000 1,155,000 40429R10
1,543,125
TOTAL BROADCASTING 1,980,625
CELLULAR - 4.0%
CELLULAR & COMMUNICATION SERVICES - 4.0%
Mobile Telecommunications
Technologies, Inc. (a) 160,000 1,960,000 60740610
COMPUTER SERVICES & SOFTWARE - 18.6%
COMPUTER RELATED SERVICES, NEC - 0.7%
Desktop Data, Inc. 34,500 351,469 25057H10
COMPUTER SERVICES - 3.9%
Barra, Inc. (a) 30,000 1,046,250 06831310
FactSet Research Systems, Inc. (a) 32,000 878,000 30307510
1,924,250
PREPACKAGED COMPUTER SOFTWARE - 14.0%
CBT Group PLC sponsored ADR (a) 10,000 650,000 12485310
Mapix, Inc. 2,400 28,200 56491010
Microsoft Corp. (a) 20,000 2,643,750 59491810
Netscape Communications Corp. 30,000 1,194,375 64114910
Oracle Corp. 52,500 2,001,563 68389X10
PeopleSoft, Inc. (a) 5,000 281,250 71271310
6,799,138
TOTAL COMPUTER SERVICES & SOFTWARE 9,074,857
COMPUTERS & OFFICE EQUIPMENT - 6.2%
MINI & MICRO COMPUTERS - 5.0%
Compaq Computer Corp. (a) 37,000 2,423,500 20449310
OFFICE AUTOMATION - 1.2%
Bell & Howell Co. (a) 20,000 612,500 07785210
TOTAL COMPUTERS & OFFICE EQUIPMENT 3,036,000
ELECTRICAL EQUIPMENT - 4.8%
ELECTRICAL MACHINERY - 2.3%
Westinghouse Electric Corp. 43,250 1,113,688 96040210
TV & RADIO COMMUNICATION EQUIPMENT - 2.5%
Scientific-Atlanta, Inc. 56,900 1,237,575 80865510
TOTAL ELECTRICAL EQUIPMENT 2,351,263
ELECTRONICS - 1.9%
SEMICONDUCTORS - 1.9%
Intel Corp. 10,000 921,250 45814010
SHARES VALUE (NOTE 1)
ENTERTAINMENT - 3.1%
MOTION PICTURE PRODUCTION - 3.1%
Disney (Walt) Co. 20,000 $ 1,536,250 25468710
PRINTING - 1.2%
COMMERCIAL PRINTING, NEC - 1.2%
Donnelley (R.R.) & Sons Co. 15,000 584,063 25786710
PUBLISHING - 28.5%
BOOK PUBLISHING & PRINTING - 9.0%
ACNielsen Corp. (a) 15,000 341,250 00483310
Cognizant Corp. 50,000 2,100,000 19244110
Harcourt General, Inc. 34,500 1,640,902 41163G10
McGraw-Hill, Inc. 5,000 306,563 58064510
4,388,715
GREETING CARDS - 3.7%
Gibson Greetings, Inc. (a) 80,000 1,800,000 37482710
NEWSPAPERS - 11.5%
Gannett Co., Inc. 7,000 682,063 36473010
New York Times Co. (The) Class A 11,900 562,275 65011110
Times Mirror Co. Class A 51,900 2,630,681 88736410
Tribune Co. 35,000 1,730,313 89604710
5,605,332
PERIODICALS - 4.3%
Meredith Corp. 33,000 990,000 58943310
Playboy Enterprises, Inc. Class B (a) 90,000 1,136,250 72811730
2,126,250
TOTAL PUBLISHING 13,920,297
SERVICES - 2.0%
BUSINESS SERVICES - 0.9%
Snyder Communications, Inc. (a) 15,000 429,375 83291410
COMMERCIAL, ECONOMIC, SOCIAL & EDUCATIONAL RESEARCH - 1.1%
Gartner Group, Inc. Class A (a) 20,000 528,750 36665110
TOTAL SERVICES 958,125
TELEPHONE SERVICES - 8.2%
AT&T Corp. 5,000 195,000 00195710
Tel-Save Holdings, Inc. (a) 20,000 357,500 87917610
Telebras sponsored ADR 5,000 590,000 87928710
WorldCom, Inc. (a) 95,000 2,844,063 98155K10
3,986,563
TOTAL COMMON STOCKS
(Cost $38,391,654) 46,183,106
CASH EQUIVALENTS - 5.5%
Taxable Central Cash Fund (b)
(Cost $2,696,596) 2,696,596 2,696,596 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $41,088,250) $ 48,879,702
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $23,295,503 and $36,332,695, respectively (see Note 3 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 $6,753 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and average daily balances during the period for which loans were
outstanding amounted to $2,952,000 and $2,610,500, respectively. The
weighted average interest rate was 5.8% (see Note 7 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $41,408,517. Net unrealized appreciation
aggregated $7,471,185 of which $8,326,069 related to appreciated
investment securities and $854,884 related to depreciated investment
securities.
MULTIMEDIA PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 48,879,702
SECURITIES, AT
VALUE
(COST
$41,088,250
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,084,857
INVESTMENTS
SOLD
RECEIVABLE FOR 23,764
FUND SHARES
SOLD
DIVIDENDS 28,132
RECEIVABLE
INTEREST 16,881
RECEIVABLE
REDEMPTION FEES 363
RECEIVABLE
TOTAL ASSETS 50,033,699
LIABILITIES
PAYABLE FOR $ 632,213
INVESTMENTS
PURCHASED
PAYABLE FOR 721,838
FUND SHARES
REDEEMED
ACCRUED 25,467
MANAGEMENT
FEE
OTHER PAYABLES 60,863
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 1,440,381
NET ASSETS $ 48,593,318
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 40,693,103
UNDISTRIBUTED 1,309,754
NET INVESTMENT
INCOME
ACCUMULATED (1,200,991)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 7,791,452
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 48,593,318
1,702,376
SHARES
OUTSTANDING
NET ASSET $28.54
VALUE AND
REDEMPTION
PRICE PER
SHARE
($48,593,31
8 (DIVIDED BY)
1,702,376
SHARES)
MAXIMUM $29.42
OFFERING PRICE
PER SHARE
(100/97.00
OF $28.54)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 145,157
INCOME
DIVIDENDS
INTEREST 117,156
TOTAL INCOME 262,313
EXPENSES
MANAGEMENT $ 147,498
FEE
TRANSFER AGENT 235,236
FEES
ACCOUNTING FEES 30,567
AND EXPENSES
NON-INTERESTED 115
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 6,729
AND EXPENSES
REGISTRATION FEES 8,532
AUDIT 10,514
LEGAL 153
INTEREST 843
MISCELLANEOUS 250
TOTAL EXPENSES 440,437
BEFORE
REDUCTIONS
EXPENSE (3,788) 436,649
REDUCTIONS
NET INVESTMENT (174,336)
INCOME (LOSS)
REALIZED AND (492,929)
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 7,852,235
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 7,359,306
NET INCREASE $ 7,184,970
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 46,710
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 524
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 8,805
WITHHELD BY
FSC
EXPENSE $ 3,770
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 18
CREDITS
$ 3,788
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (174,336) $ 1,133,306
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (492,929) 3,649,321
GAIN (LOSS)
CHANGE IN NET 7,852,235 (9,287,117)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 7,184,970 (4,504,490)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (432,239) (3,347,638)
SHAREHOLDERS
FROM NET
REALIZED GAINS
IN EXCESS OF (708,062) -
NET REALIZED
GAIN
TOTAL (1,140,301) (3,347,638)
DISTRIBUTIONS
SHARE 15,054,039 42,427,132
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 1,126,619 3,294,839
OF
DISTRIBUTIONS
COST OF SHARES (27,830,697) (78,777,876)
REDEEMED
REDEMPTION 27,859 109,141
FEES
NET INCREASE (11,622,180) (32,946,764)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (5,577,511) (40,798,892)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS 54,170,829 94,969,721
BEGINNING OF
PERIOD
END OF $ 48,593,318 $ 54,170,829
PERIOD
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$1,309,75
4 AND
$1,484,09
0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 570,703 1,577,831
ISSUED IN 48,395 127,316
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (1,091,162) (3,024,499)
NET INCREASE (472,064) (1,319,352)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 24.91 $ 27.18 $ 22.35 $ 23.87 $ 18.26 $ 15.93
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.09) .35 E .02 (.01) (.10) (.07)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 4.26 (1.58) 7.00 1.67 6.28 2.61
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 4.17 (1.23) 7.02 1.66 6.18 2.54
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - (.02) - - -
INVESTMENT
INCOME
FROM NET (.21) (1.07) (2.19) (3.21) (.65) (.23)
REALIZED GAIN
IN EXCESS OF (.34) - - - - -
NET REALIZED
GAIN
TOTAL (.55) (1.07) (2.21) (3.21) (.65) (.23)
DISTRIBUTIONS
REDEMPTION FEES .01 .03 .02 .03 .08 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 28.54 $ 24.91 $ 27.18 $ 22.35 $ 23.87 $ 18.26
END OF PERIOD
TOTAL RETURN B, C 17.28% (4.52)% 31.98% 9.35% 34.86% 16.14%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 48,593 $ 54,171 $ 94,970 $ 38,157 $ 49,177 $ 16,647
OF PERIOD
(000 OMITTED)
RATIO OF 1.77% A 1.60% 1.56% 2.05% 1.66% 2.49% A, G
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.76% A, F 1.56% F 1.54% F 2.03% F 1.63% F 2.49% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.70)% A 1.33% .08% (.07)% (.42)% (.52)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 101% A 99% 223% 107% 340% 70% A
TURNOVER RATE
AVERAGE $ .0369 $ .0400
COMMISSION
RATE H
</TABLE>
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 INVES
TMENT INCOME PER
SHARE REFLECTS A
SPECIAL DIVIDEND
WHICH AMOUNTED
TO $.49 PER
SHARE. F FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
DURING THE
PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. H FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
RETAILING PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
RETAILING 22.54% 26.49% 117.01% 328.19%
RETAILING 18.87% 22.70% 110.50% 315.34%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark reflects reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
RETAILING 26.49% 16.76% 15.65%
RETAILING 22.70% 16.05% 15.30%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970912 162814 S00000000000001
Retailing S&P 500
00046 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9008.48 9781.00
1987/10/31 6317.15 7674.17
1987/11/30 5881.05 7041.82
1987/12/31 6458.11 7577.70
1988/01/31 6866.06 7896.72
1988/02/29 7661.22 8264.71
1988/03/31 7758.03 8009.33
1988/04/30 8000.03 8098.24
1988/05/31 7771.85 8168.69
1988/06/30 8456.39 8543.63
1988/07/31 8380.33 8511.17
1988/08/31 8359.58 8221.79
1988/09/30 8850.51 8572.04
1988/10/31 9037.20 8810.34
1988/11/30 8912.74 8684.35
1988/12/31 8957.73 8836.33
1989/01/31 9400.69 9483.15
1989/02/28 9274.13 9247.02
1989/03/31 9717.10 9462.47
1989/04/30 10265.53 9953.57
1989/05/31 10975.68 10356.69
1989/06/30 10780.28 10297.66
1989/07/31 11649.66 11227.54
1989/08/31 12214.76 11447.60
1989/09/30 12185.78 11400.66
1989/10/31 11598.95 11136.17
1989/11/30 11671.39 11363.35
1989/12/31 11603.03 11636.07
1990/01/31 10696.81 10855.29
1990/02/28 11069.46 10995.32
1990/03/31 11975.68 11286.70
1990/04/30 11806.29 11004.53
1990/05/31 13381.60 12077.47
1990/06/30 13212.21 11995.34
1990/07/31 12670.17 11956.96
1990/08/31 10849.26 10876.05
1990/09/30 9638.14 10346.39
1990/10/31 9189.26 10301.90
1990/11/30 10442.73 10967.40
1990/12/31 11019.31 11273.39
1991/01/31 12088.98 11764.91
1991/02/28 13209.58 12606.10
1991/03/31 14584.88 12911.17
1991/04/30 14788.62 12942.15
1991/05/31 16019.59 13501.25
1991/06/30 15510.23 12882.90
1991/07/31 16503.49 13483.24
1991/08/31 17377.90 13802.79
1991/09/30 17191.14 13572.29
1991/10/31 16868.54 13754.15
1991/11/30 16545.94 13199.86
1991/12/31 18527.11 14709.93
1992/01/31 19554.46 14436.32
1992/02/29 20494.75 14623.99
1992/03/31 20085.55 14338.83
1992/04/30 19267.15 14760.39
1992/05/31 19667.64 14832.71
1992/06/30 18749.58 14611.71
1992/07/31 19583.70 15209.33
1992/08/31 19139.44 14897.53
1992/09/30 19710.63 15073.32
1992/10/31 21061.54 15126.08
1992/11/30 22657.25 15641.88
1992/12/31 22617.21 15834.28
1993/01/31 22773.25 15967.28
1993/02/28 21910.42 16184.44
1993/03/31 23599.37 16525.93
1993/04/30 22244.82 16126.00
1993/05/31 23476.98 16558.18
1993/06/30 22912.63 16606.20
1993/07/31 23025.50 16539.77
1993/08/31 24078.96 17166.63
1993/09/30 24812.61 17034.45
1993/10/31 25198.25 17387.06
1993/11/30 25442.80 17221.88
1993/12/31 25564.58 17430.27
1994/01/31 24425.67 18022.90
1994/02/28 25330.70 17534.48
1994/03/31 24801.92 16769.97
1994/04/30 25554.41 16984.63
1994/05/31 24293.47 17263.18
1994/06/30 24090.09 16840.23
1994/07/31 24496.85 17392.59
1994/08/31 26052.69 18105.69
1994/09/30 25544.24 17662.10
1994/10/31 25656.10 18059.49
1994/11/30 24761.24 17401.77
1994/12/31 24283.30 17659.84
1995/01/31 24090.09 18117.75
1995/02/28 24313.81 18823.80
1995/03/31 24588.37 19379.29
1995/04/30 23632.49 19950.01
1995/05/31 24049.42 20747.42
1995/06/30 25584.92 21229.38
1995/07/31 27150.93 21933.35
1995/08/31 26774.68 21988.40
1995/09/30 27578.02 22916.31
1995/10/31 26347.59 22834.50
1995/11/30 27669.54 23836.93
1995/12/31 27191.60 24296.03
1996/01/31 26398.43 25123.07
1996/02/29 28340.69 25355.96
1996/03/31 30445.65 25600.14
1996/04/30 32225.20 25977.48
1996/05/31 33770.87 26647.44
1996/06/30 33170.91 26748.97
1996/07/31 29998.22 25567.20
1996/08/31 32835.34 26106.41
1996/09/30 34014.93 27575.68
1996/10/31 33343.78 28336.22
1996/11/30 34625.06 30478.15
1996/12/31 32863.92 29874.38
1997/01/31 32711.02 31740.93
1997/02/28 33893.47 31989.78
1997/03/31 34321.59 30675.32
1997/04/30 34848.67 32506.64
1997/05/31 36465.95 34485.64
1997/06/30 38783.70 36030.60
1997/07/31 42976.25 38897.55
1997/08/29 41534.10 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970912 162820 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Retailing Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$41,534 - a 315.34% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
CVS CORP. 7.5
FEDERATED DEPARTMENT STORES, INC. 6.3
WAL-MART STORES, INC. 5.9
PAYLESS SHOESOURCE, INC. 5.4
HOME DEPOT, INC. 5.4
CONSOLIDATED STORES CORP. 5.1
SAFEWAY, INC. (NEW) 5.1
TJX COMPANIES, INC. 5.1
DAYTON HUDSON CORP. 4.9
PROFFITTS, INC. 4.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
DEPARTMENT STORES 19.1%
DRUG STORES 13.0%
GENERAL MERCHANDISE
STORES 10.9%
GENERAL APPAREL STORES 10.1%
GROCERY-RETAIL 9.4%
ALL OTHERS 37.5% *
ROW: 1, COL: 1, VALUE: 37.5
ROW: 1, COL: 2, VALUE: 9.4
ROW: 1, COL: 3, VALUE: 10.1
ROW: 1, COL: 4, VALUE: 10.9
ROW: 1, COL: 5, VALUE: 13.0
ROW: 1, COL: 6, VALUE: 19.1
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
RETAILING PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Ramin Arani,
Portfolio Manager of
Fidelity Select Retailing
Portfolio
Q. HOW DID THE FUND PERFORM, RAMIN?
D.C. For the six-month and 12-month periods ending August 31, 1997,
the fund returned 22.54% and 26.49%, outperforming its benchmark
index, the Standard & Poor's 500 Index, for the past six months and
underperforming it for the past 12 months. The index returned 14.78%
and 40.65% for the six- and 12-month periods, respectively.
Q. HOW DID THE OVERALL RETAIL SECTOR LOOK DURING THE PAST SIX MONTHS?
D.C. The retail sector outperformed the market mostly because
retailers planned their inventory levels quite conservatively and
sales were better than expected. These two factors resulted in the
sector beating earnings expectations.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE SIX-MONTH
PERIOD?
D.C. In general, I think there were three reasons why the fund
performed so well over the past six months. First, it was overweighted
in the drug store industry. This strategy paid off since drug stores
were very strong performers due to consolidation in the industry,
strong store sales in the front end of the store and the pharmacy, and
an increase in third-party penetration. By this I mean that an
increasing number of customers belong to an HMO or third-party payer
through which the consumer makes only a small co-payment for
prescription drugs. As a result, more customers are buying
prescription drugs because they're more affordable. A good example of
a company that is benefiting from these trends is drug-store chain
CVS, the fund's top holding at the end of the period. CVS not only
benefited from the third-party trend, but also adjusted its
promotional strategy in the front end of the store and notably
increased its sales of non-prescription products. In addition, the
company has benefited from its acquisition of Revco.
Q. AND THE OTHER REASONS THAT THE FUND LOOKED GOOD?
D.C. The fund was overweighted in two discount stores, Wal-Mart and
Dayton Hudson, both solid performers over the period. About 12 months
ago, Wal-Mart initiated a plan to reduce inventories, which improved
its margins dramatically and allowed it to drive sales at a higher
rate. In terms of Dayton Hudson, its Target stores grew their square
footage very aggressively, and its Mervyns' division showed a
turnaround in earnings. The other reason the fund did well was that it
was underweighted in restaurants and supermarkets, which generally
were poor performers all year. One notable exception was the
supermarket chain Safeway, one of the fund's top holdings. Safeway
acquired Vons last year, which has dramatically accelerated its
earnings growth outlook.
Q. SO YOU BENEFITED FROM SOME TRENDS IN THE RETAIL SECTOR OVER THE
PERIOD?
D.C. It appears so. However, I should note that generally I don't look
for trends. My focus is on specific stocks. I look for companies that
are cutting costs and where there are a lot of margin expansion
opportunities. I'm also interested in companies with management teams
that do smart things with the cash they generate and have aggressive
returns on investment targets.
Q. DID YOU EXPERIENCE ANY REGRETS OVER THE PERIOD?
D.C. Sure. Department stores as a group performed very well, and I
probably should have owned more of the top performers than I did. I
owned Federated, which had superior earnings growth. But I wish I also
had owned J.C. Penny's and Dillards, which both turned in
stronger-than-expected performances.
Q. RAMIN, HOW DOES THE FUND LOOK GOING FORWARD?
D.C. I continue to be cautious about the sales environment, especially
as we approach the Christmas season. Over the past couple of years,
Christmas-time sales have been very unpredictable and generally
disappointing. Going forward, I'll continue to focus on companies that
offer profit margin expansion and generation of strong free cash flow
that can be returned to shareholders.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 046
TRADING SYMBOL: FSRPX
SIZE: as of August 31, 1997, more than
$117 million
MANAGER: Ramin Arani, since January 1997;
joined Fidelity in 1992
(checkmark)
RETAILING PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.7%
SHARES VALUE (NOTE 1)
APPAREL STORES - 16.1%
GENERAL APPAREL STORES - 10.1%
Gap, Inc. 123,500 $ 5,488,028 36476010
Men's Wearhouse, Inc. (The) (a) 13,000 472,063 58711810
Ross Stores, Inc. 2,900 85,188 77829610
TJX Companies, Inc. 221,200 6,083,000 87254010
12,128,279
SHOE STORES - 6.0%
Footstar, Inc. (a) 25,930 643,388 34491210
Payless ShoeSource, Inc. (a) 102,000 6,540,750 70437910
7,184,138
TOTAL APPAREL STORES 19,312,417
COMPUTER SERVICES & SOFTWARE - 0.4%
COMPUTER & SOFTWARE STORES - 0.4%
CompUSA, Inc. (a) 17,100 529,031 20493210
DRUG STORES - 13.0%
CVS Corp. 159,459 8,989,501 12665010
Long Drug Stores, Inc. 2,100 53,156 54316210
Rite Aid Corp. 51,800 2,593,238 76775410
Walgreen Co. 148,200 3,992,138 93142210
15,628,033
GENERAL MERCHANDISE STORES - 37.9%
DEPARTMENT STORES - 19.1%
Federated Department Stores, Inc. (a) 179,900 7,555,800 31410H10
Kohls Corp. (a) 29,000 1,999,188 50025510
May Department Stores Co. (The) 8,000 430,500 57777810
Meyer (Fred), Inc. (a) 11,900 618,800 59309810
Neiman-Marcus Group, Inc. (a) 9,200 284,050 64020410
Nordstrom, Inc. 22,000 1,287,000 65566410
Proffitts, Inc. (a) 104,752 5,623,873 74292510
Sears, Roebuck & Co. 72,200 4,097,350 81238710
Stein Mart, Inc. 40,000 1,120,000 85837510
23,016,561
GENERAL MERCHANDISE STORES - 10.9%
Dayton Hudson Corp. 104,400 5,950,800 23975310
Family Dollar Stores, Inc. 3,000 63,750 30700010
Wal-Mart Stores, Inc. 200,100 7,103,550 93114210
13,118,100
VARIETY STORES - 7.9%
Consolidated Stores Corp. (a) 164,218 6,147,911 21014910
Costco Companies, Inc. (a) 33,700 1,215,306 22160Q10
Dollar Tree Stores (a) 17,700 688,088 25674710
Michaels Stores, Inc. 47,500 1,160,781 59408710
Woolworth Corp. (a) 11,700 261,788 98088310
9,473,874
TOTAL GENERAL MERCHANDISE STORES 45,608,535
GROCERY STORES - 9.4%
GROCERY - RETAIL - 9.4%
American Stores Co. 102,400 2,425,600 03009610
Dominick's Supermarkets, Inc. (a) 62,000 1,705,000 25715910
Hannaford Brothers Co. 15,000 510,000 41055010
Kroger Co. (The) (a) 18,400 554,300 50104410
Safeway, Inc. (New) (a) 119,487 6,086,369 78651420
11,281,269
SHARES VALUE (NOTE 1)
LODGING & GAMING - 0.7%
HOTELS, MOTELS, & TOURIST COURTS - 0.7%
HFS, Inc. (a) 15,000 $ 835,313 40418110
REAL ESTATE INVESTMENT TRUSTS - 0.0%
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Equity Office Properties Trust (REIT) 100 2,919 29474110
RESTAURANTS - 1.2%
RESTAURANTS - 1.2%
McDonald's Corp. 7,800 369,038 58013510
Starbucks Corp. (a) 26,500 1,086,500 85524410
1,455,538
RETAIL & WHOLESALE, MISCELLANEOUS - 15.5%
BUILDING MATERIALS - RETAIL - 5.4%
Home Depot, Inc. 137,300 6,478,844 43707610
HOBBY, TOY, & GAME SHOPS - 3.0%
Toys "R" Us, Inc. (a) 106,391 3,677,139 89233510
JEWELRY STORES - 0.2%
Tiffany & Co., Inc. 4,600 208,150 88654710
LUMBER & BUILDING MATERIALS - RETAIL - 2.2%
Lowe's Companies, Inc. 75,700 2,616,381 54866110
MAIL ORDER - 0.0%
Viking Office Products, Inc. (a) 200 4,225 92691310
RETAIL STORES - 0.5%
Gadzooks, Inc. 30,000 570,000 36255310
RETAIL, GENERAL - 2.2%
Bed Bath & Beyond, Inc. (a) 27,000 837,000 07589610
Staples, Inc. (a) 76,000 1,786,000 85503010
2,623,000
STATIONERY & OFFICE SUPPLIES - WHOLESALE - 2.0%
Corporate Express, Inc. 104,500 1,783,031 21988810
U.S. Office Products Co. 20,500 664,969 91232510
2,448,000
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 18,625,739
TEXTILES & APPAREL - 0.5%
APPAREL - 0.5%
Liz Claiborne, Inc. 13,500 601,594 53932010
Polo Ralph Lauren Corp. Class A 400 10,500 73157210
612,094
TOTAL COMMON STOCKS
(Cost $100,640,681) 113,890,888
CASH EQUIVALENTS - 5.3%
Taxable Central Cash Fund (b)
(Cost $6,404,511) 6,404,511 6,404,511 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $107,045,192) $ 120,295,399
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $213,013,910 and $159,377,357, respectively (see Note 3 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 $44,282 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the security lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan
and the average daily loan balances during the periods for which loans
were outstanding amounted to $9,812,000 and $4,757,778, respectively.
The weighted average interest rate paid was 5.8% (see Note 7 of Notes
to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $107,427,188. Net unrealized appreciation
aggregated $12,868,211, of which $14,270,164 related to appreciated
investment securities and $1,401,953 related to depreciated investment
securities.
RETAILING PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 120,295,399
SECURITIES, AT
VALUE
(COST
$107,045,19
2) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 402,371
INVESTMENTS
SOLD
RECEIVABLE FOR 119,956
FUND SHARES
SOLD
DIVIDENDS 50,663
RECEIVABLE
INTEREST 42,344
RECEIVABLE
REDEMPTION FEES 334
RECEIVABLE
OTHER 21,910
RECEIVABLES
TOTAL ASSETS 120,932,977
LIABILITIES
PAYABLE FOR $ 3,031,890
FUND SHARES
REDEEMED
ACCRUED 63,910
MANAGEMENT
FEE
OTHER PAYABLES 126,005
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 3,221,805
NET ASSETS $ 117,711,172
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 106,870,412
ACCUMULATED (486,709)
NET INVESTMENT
(LOSS)
ACCUMULATED (1,922,738)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 13,250,207
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 117,711,172
2,919,205
SHARES
OUTSTANDING
NET ASSET $40.32
VALUE AND
REDEMPTION
PRICE PER
SHARE
($117,711,1
72 (DIVIDED BY)
2,919,205
SHARES)
MAXIMUM $41.57
OFFERING PRICE
PER SHARE
(100/97.00
OF $40.32)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 245,299
INCOME
DIVIDENDS
INTEREST 246,357
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$30,943)
TOTAL INCOME 491,656
EXPENSES
MANAGEMENT $ 330,132
FEE
TRANSFER AGENT 556,876
FEES
ACCOUNTING AND 57,391
SECURITY
LENDING FEES
NON-INTERESTED 248
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 13,304
AND EXPENSES
REGISTRATION FEES 34,341
AUDIT 12,070
LEGAL 443
INTEREST 6,942
MISCELLANEOUS 259
TOTAL EXPENSES 1,012,006
BEFORE
REDUCTIONS
EXPENSE (33,641) 978,365
REDUCTIONS
NET INVESTMENT (486,709)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT (954,961)
SECURITIES
FOREIGN (2) (954,963)
CURRENCY
TRANSACTIONS
CHANGE IN NET 8,538,926
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 7,583,963
NET INCREASE $ 7,097,254
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 143,483
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 1,268
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 48,608
WITHHELD BY
FSC
EXPENSE $ 32,653
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 988
CREDITS
$ 33,641
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (486,709) $ (863,712)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (954,963) 7,830,939
GAIN (LOSS)
CHANGE IN NET 8,538,926 2,577,741
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 7,097,254 9,544,968
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (1,103,164) (523,662)
SHAREHOLDERS
FROM NET
REALIZED GAIN
IN EXCESS OF (967,775) -
NET REALIZED
GAIN
TOTAL (2,070,939) (523,662)
DISTRIBUTIONS
SHARE 280,507,349 606,855,160
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 2,058,854 520,661
OF
DISTRIBUTIONS
COST OF SHARES (230,149,606) (601,757,660)
REDEEMED
REDEMPTION 919,895 657,715
FEES
NET INCREASE 53,336,492 6,275,876
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 58,362,807 15,297,182
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 59,348,365 44,051,183
PERIOD
END OF PERIOD $ 117,711,172 $ 59,348,365
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$486,709
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 7,769,945 19,012,106
ISSUED IN 62,088 15,768
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (6,697,887) (18,823,522)
NET INCREASE 1,134,146 204,352
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 33.25 $ 27.87 $ 23.91 $ 24.91 $ 23.87 $ 22.13
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.16) (.13) (.14) (.18) (.22) (.08)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 7.28 5.49 4.07 (.96) 3.85 2.93
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 7.12 5.36 3.93 (1.14) 3.63 2.85
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.19) (.08) - - (2.63) (1.17)
REALIZED GAIN
IN EXCESS OF (.16) - - - - -
NET REALIZED
GAIN
TOTAL (.35) (.08) - - (2.63) (1.17)
DISTRIBUTIONS
REDEMPTION FEES .30 .10 .03 .14 .04 .06
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 40.32 $ 33.25 $ 27.87 $ 23.91 $ 24.91 $ 23.87
END OF PERIOD
TOTAL RETURN B, C 22.54% 19.59% 16.56% (4.01)% 15.61% 13.72%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 117,711 $ 59,348 $ 44,051 $ 31,090 $ 52,790 $ 74,878
OF PERIOD
(000 OMITTED)
RATIO OF 1.82% A 1.45% 1.94% 2.07% 1.86% 1.77% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.76% A, E 1.39% E 1.92% E 1.96% E 1.83% E 1.77% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.87)% A (.39)% (.53)% (.74)% (.87)% (.44)% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 312% A 278% 235% 481% 154% 171% A
TURNOVER RATE
AVERAGE $ .0392 $ .0403
COMMISSION
RATE F
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
AIR TRANSPORTATION PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
AIR TRANSPORTATION 23.53% 26.31% 115.79% 137.50%
AIR TRANSPORTATION 19.83% 22.52% 109.32% 130.38%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
AIR TRANSPORTATION 26.31% 16.63% 9.04%
AIR TRANSPORTATION 22.52% 15.92% 8.70%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114323 S00000000000001
Air Transportation S&P 500
00034 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9345.39 9781.00
1987/10/31 6523.31 7674.17
1987/11/30 6080.05 7041.82
1987/12/31 6336.57 7577.70
1988/01/31 6514.00 7896.72
1988/02/29 7054.72 8264.71
1988/03/31 7358.87 8009.33
1988/04/30 7274.38 8098.24
1988/05/31 7164.55 8168.69
1988/06/30 8085.47 8543.63
1988/07/31 7848.90 8511.17
1988/08/31 7409.56 8221.79
1988/09/30 7899.59 8572.04
1988/10/31 8051.67 8810.34
1988/11/30 7865.80 8684.35
1988/12/31 8178.40 8836.33
1989/01/31 8938.79 9483.15
1989/02/28 9107.77 9247.02
1989/03/31 9564.00 9462.47
1989/04/30 9944.19 9953.57
1989/05/31 10197.66 10356.69
1989/06/30 10146.68 10297.66
1989/07/31 10861.12 11227.54
1989/08/31 11686.12 11447.60
1989/09/30 11226.84 11400.66
1989/10/31 10342.30 11136.17
1989/11/30 10240.24 11363.35
1989/12/31 10332.02 11636.07
1990/01/31 9268.69 10855.29
1990/02/28 9658.57 10995.32
1990/03/31 10163.66 11286.70
1990/04/30 9791.49 11004.53
1990/05/31 10473.79 12077.47
1990/06/30 10500.38 11995.34
1990/07/31 10181.38 11956.96
1990/08/31 8568.66 10876.05
1990/09/30 7709.14 10346.39
1990/10/31 8116.75 10301.90
1990/11/30 7992.69 10967.40
1990/12/31 8453.47 11273.39
1991/01/31 9454.77 11764.91
1991/02/28 10518.10 12606.10
1991/03/31 10473.79 12911.17
1991/04/30 10216.82 12942.15
1991/05/31 10819.38 13501.25
1991/06/30 10591.24 12882.90
1991/07/31 10916.85 13483.24
1991/08/31 10781.18 13802.79
1991/09/30 10419.39 13572.29
1991/10/31 10925.89 13754.15
1991/11/30 10437.48 13199.86
1991/12/31 11586.15 14709.93
1992/01/31 12255.45 14436.32
1992/02/29 12807.17 14623.99
1992/03/31 12056.47 14338.83
1992/04/30 11432.39 14760.39
1992/05/31 11586.15 14832.71
1992/06/30 11209.92 14611.71
1992/07/31 11145.49 15209.33
1992/08/31 10676.11 14897.53
1992/09/30 11025.84 15073.32
1992/10/31 11421.60 15126.08
1992/11/30 11697.70 15641.88
1992/12/31 12347.10 15834.28
1993/01/31 12458.76 15967.28
1993/02/28 12654.15 16184.44
1993/03/31 14049.83 16525.93
1993/04/30 14208.65 16126.00
1993/05/31 15020.31 16558.18
1993/06/30 13900.78 16606.20
1993/07/31 14376.58 16539.77
1993/08/31 15234.88 17166.63
1993/09/30 14927.01 17034.45
1993/10/31 15785.32 17387.06
1993/11/30 15822.64 17221.88
1993/12/31 16160.78 17430.27
1994/01/31 16784.89 18022.90
1994/02/28 16189.15 17534.48
1994/03/31 15252.98 16769.97
1994/04/30 15152.67 16984.63
1994/05/31 14519.21 17263.18
1994/06/30 14076.80 16840.23
1994/07/31 14810.80 17392.59
1994/08/31 15373.88 18105.69
1994/09/30 13654.49 17662.10
1994/10/31 13765.10 18059.49
1994/11/30 12850.11 17401.77
1994/12/31 12646.86 17659.84
1995/01/31 13053.83 18117.75
1995/02/28 14173.03 18823.80
1995/03/31 15088.73 19379.29
1995/04/30 16299.49 19950.01
1995/05/31 16564.02 20747.42
1995/06/30 18659.96 21229.38
1995/07/31 19290.78 21933.35
1995/08/31 18548.04 21988.40
1995/09/30 19229.73 22916.31
1995/10/31 19005.90 22834.50
1995/11/30 21457.94 23836.93
1995/12/31 20176.67 24296.03
1996/01/31 19719.05 25123.07
1996/02/29 21955.12 25355.96
1996/03/31 23078.36 25600.14
1996/04/30 22111.83 25977.48
1996/05/31 22322.32 26647.44
1996/06/30 22217.07 26748.97
1996/07/31 18575.62 25567.20
1996/08/31 18238.84 26106.41
1996/09/30 18017.82 27575.68
1996/10/31 17849.43 28336.22
1996/11/30 20027.99 30478.15
1996/12/31 20427.92 29874.38
1997/01/31 19628.06 31740.93
1997/02/28 18649.29 31989.78
1997/03/31 19796.45 30675.32
1997/04/30 20880.47 32506.64
1997/05/31 22332.84 34485.64
1997/06/30 22595.95 36030.60
1997/07/31 23953.60 38897.55
1997/08/29 23037.98 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114327 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Air Transportation Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $23,038 - a 130.38% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
SABRE GROUP HOLDINGS, INC. CLASS A 7.5
AIR NEW ZEALAND LTD. CLASS B 6.2
ATLAS AIR, INC. 5.5
DELTA AIR LINES, INC. 4.9
AMR CORP. 4.9
UAL CORP. 4.6
COMAIR HOLDINGS, INC. 4.5
CONTINENTAL AIRLINES, INC. CLASS B 4.4
AIR EXPRESS INTERNATIONAL CORP. 4.3
BOEING CO. 4.2
TOP INDUSTRIES AS OF AUGUST 31, 1997
AIR TRANSPORT, MAJOR NATIONAL 52.5%
AIR TRANSPORTATION, REGIONAL 8.1%
FREIGHT FORWARDING 8.0%
CAD/CAM/CAE 7.5%
AIRCRAFT 4.2%
ALL OTHERS 19.7%
ROW: 1, COL: 1, VALUE: 19.7
ROW: 1, COL: 2, VALUE: 4.2
ROW: 1, COL: 3, VALUE: 7.5
ROW: 1, COL: 4, VALUE: 8.0
ROW: 1, COL: 5, VALUE: 8.1
ROW: 1, COL: 6, VALUE: 52.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
AIR TRANSPORTATION PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Peter Saperstone became Portfolio Manager of
Fidelity Select Air Transportation Portfolio on June 23, 1997.
Q. HOW DID THE FUND PERFORM, PETER?
A. For the six-month period that ended August 31, 1997, the fund
returned 23.53%. This topped the Standard & Poor's 500 Index, which
returned 14.78% in that same time span. For the 12 months that ended
August 31, 1997, the fund returned 26.31% while the index returned
40.65%.
Q. WHAT FACTORS DROVE PERFORMANCE?
A. Several industry variables came together to create a positive
atmosphere. One of the chief hindrances to good stock performance in
this sector is overcapacity, or when airlines buy too many jets. Over
the past six months, airlines as a group have controlled capacity
growth, and the market has recognized this. Second, air traffic has
been strong and airlines have been able to increase business fares due
to strong demand. Finally, cash flows have risen throughout the
industry and some airlines have used this extra cash to initiate stock
buyback programs.
Q. SIX MONTHS AGO, WE DISCUSSED THE STATUS OF THE EXCISE TAX BEING
LEVIED ON AIRLINES BY THE GOVERNMENT. CAN YOU GIVE AN UPDATE?
A. The excise tax situation was finalized in late July. The plan calls
for an increase in taxes on international routes, an initiation of a
domestic per-head tax and a decrease in the tax rate on domestic fare
revenue. All in all, I'd say the revised tax plan will be a slight
negative for the airline industry, with some of the shorter-haul, pure
domestic carriers feeling the greatest pinch.
Q. WHAT CHANGES HAVE YOU MADE TO THE FUND SINCE TAKING OVER IN JUNE?
A. I'd say the most obvious change is that I've decreased the fund's
exposure to smaller, foreign carriers while emphasizing larger U.S.
airlines. The U.S. economy has been strong, traffic flows have risen
and carriers based in the U.S. have benefited.
Q. WITH RESPECT TO INDIVIDUAL POSITIONS, WERE THERE ANY UNIQUE
STORIES?
A. Sabre - a company that provides computerized reservation systems to
the airlines - was a pleasant surprise. Sabre's revenues are tied to
the number of tickets being purchased, so strong air traffic flow has
contributed to the company's success.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Airlines typically trade as a group. Since the last six months were
a strong period for the sector, most of the fund's positions - such as
Delta, American and Continental - performed well. In terms of
disappointments, America West has been under pressure due to
competitive pricing in its key markets of Phoenix and Las Vegas.
Q. WHAT'S YOUR OUTLOOK?
A. The favorable conditions I mentioned at the outset seem to be
sustainable. Traffic flow should remain strong and airlines will most
likely continue to exercise caution with respect to capacity. As for
the fund itself, I may look for opportunities among regional airlines
if their earnings prospects look bright. I don't expect to make any
considerable allocation changes in the near-term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 034
TRADING SYMBOL: FSAIX
SIZE: as of August 31, 1997, more than
$34 million
MANAGER: Peter Saperstone, since June 1997;
manager, Fidelity Select Defense & Aerospace
Portfolio, since June 1997; Fidelity Select
Construction and Housing Portfolio, since
1996; equity analyst, defense/aerospace and
airlines, since 1997; building materials and
appliances, since 1996; textile, apparel and
footwear industries, since 1995; joined Fidelity
in 1995
(checkmark)
AIR TRANSPORTATION PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.8%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 10.9%
AIRCRAFT - 4.2%
Boeing Co. 27,000 $ 1,469,813 09702310
AIRCRAFT & PARTS - 2.9%
Precision Castparts Corp. 7,000 452,375 74018910
Sundstrand Corp. 9,500 560,500 86732310
1,012,875
AIRCRAFT ENGINES & PARTS - 3.8%
United Technologies Corp. 17,000 1,327,063 91301710
TOTAL AEROSPACE & DEFENSE 3,809,751
AIR TRANSPORTATION - 60.6%
AIR TRANSPORT, MAJOR NATIONAL - 52.5%
AMR Corp. (a) 17,000 1,712,750 00176510
Air Canada, Inc. 10,000 78,544 00891110
Air New Zealand Ltd. Class B 800,000 2,161,868 00999E92
Alaska Air Group, Inc. (a) 51,500 1,413,031 01165910
America West Airlines, Inc.
Class B warrants 8/25/99 (a) 196,700 774,506 02365011
America West Holding Corp. Class B (a) 80,600 972,238 02365720
ASA Holdings, Inc. 30,000 892,500 04338Q10
Atlas Air, Inc. 70,000 1,942,500 04916410
British Airways PLC ADR 1,000 103,313 11041930
Continental Airlines, Inc. Class B (a) 42,500 1,556,563 21079530
Delta Air Lines, Inc. 20,000 1,730,000 24736110
KLM Royal Dutch Airlines NV 20,246 663,057 48251610
Mesaba Holdings, Inc. 4,700 92,238 59066B10
Northwest Airlines Corp. Class A (a) 20,900 764,156 66728010
Pan Am Corp. (a) 5,900 69775710 -
Ryanair Holdings PLC sponsored ADR 21,000 577,500 78351310
Southwest Airlines Co. 47,000 1,316,000 84474110
UAL Corp. (a) 21,000 1,599,938 90254950
US Airways Group, Inc. 1,000 34,125 91190510
18,384,827
AIR TRANSPORTATION, REGIONAL - 8.1%
Comair Holdings, Inc. 58,500 1,572,188 19978910
Midwest Express Holdings, Inc. (a) 18,100 523,765 59791110
SkyWest, Inc. 39,000 745,875 83087910
2,841,828
TOTAL AIR TRANSPORTATION 21,226,655
AUTOS, TIRES & ACCESSORIES - 0.8%
AUTO DEALERS, NEC - RETAIL - 0.8%
Aviation Sales Co. 10,000 282,500 05367210
COMPUTER SERVICES & SOFTWARE - 7.5%
CAD/CAM/CAE - 7.5%
Sabre Group Holdings, Inc. Class A (a) 85,600 2,632,200 78590510
TRUCKING & FREIGHT - 8.0%
FREIGHT FORWARDING - 8.0%
Air Express International Corp. 50,000 1,518,750 00910410
Expeditors International of
Washington, Inc. 35,100 1,285,538 30213010
2,804,288
TOTAL COMMON STOCKS
(Cost $29,933,239) 30,755,394
CASH EQUIVALENTS - 12.2%
MATURITY AMOUNT VALUE (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.33%, dated
8/29/97 due 9/2/97 $ 43,025 $ 43,000 66199GRV
SHARES
Taxable Central Cash Fund (b) 4,216,344 4,216,344 31635A10
TOTAL CASH EQUIVALENTS
(Cost $4,259,344) 4,259,344
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $34,192,583) $ 35,014,738
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $100,108,006 and $116,006,597, respectively (see Note 3 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 $27,401 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and the average daily loan balances during the periods for which loans
were outstanding amounted to $9,339,000 and $3,746,400, respectively.
The weighted average interest rate paid was 5.8% (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 89.8%
New Zealand 6.2
Netherlands 1.9
Ireland 1.6
Others (individually less than 1%) 0.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $34,227,578. Net unrealized appreciation
aggregated $787,160, of which $2,445,283 related to appreciated
investment securities and $1,658,123 related to depreciated investment
securities.
At February 28,1997, the fund had a capital loss carryforward of
approximately $4,508,000 which will expire on February 28, 2005.
AIR TRANSPORTATION PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 35,014,738
SECURITIES, AT
VALUE
(INCLUDING
REPURCHASE
AGREEMENTS OF
$43,000)
(COST
$34,192,583
) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 916
RECEIVABLE FOR 24,994
INVESTMENTS
SOLD
RECEIVABLE FOR 146,095
FUND SHARES
SOLD
DIVIDENDS 10,428
RECEIVABLE
INTEREST 15,419
RECEIVABLE
REDEMPTION FEES 146
RECEIVABLE
OTHER 2,313
RECEIVABLES
TOTAL ASSETS 35,215,049
LIABILITIES
PAYABLE FOR $ 280,200
INVESTMENTS
PURCHASED
PAYABLE FOR 447,374
FUND SHARES
REDEEMED
ACCRUED 17,520
MANAGEMENT
FEE
OTHER PAYABLES 69,289
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 814,383
NET ASSETS $ 34,400,666
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 29,874,012
ACCUMULATED (225,859)
NET INVESTMENT
(LOSS)
ACCUMULATED 3,930,358
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 822,155
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 34,400,666
1,571,460
SHARES
OUTSTANDING
NET ASSET $21.89
VALUE AND
REDEMPTION
PRICE PER
SHARE
($34,400,66
6 (DIVIDED BY)
1,571,460
SHARES)
MAXIMUM $22.57
OFFERING PRICE
PER SHARE
(100/97.00
OF $21.89)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 249,164
INCOME
DIVIDENDS
INTEREST 82,537
TOTAL INCOME 331,701
EXPENSES
MANAGEMENT $ 170,983
FEE
TRANSFER AGENT 317,917
FEES
ACCOUNTING FEES 34,180
AND EXPENSES
NON-INTERESTED 138
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 19,209
AND EXPENSES
REGISTRATION FEES 23,771
AUDIT 14,286
LEGAL 151
INTEREST 6,029
MISCELLANEOUS 251
TOTAL EXPENSES 586,915
BEFORE
REDUCTIONS
EXPENSE (29,355) 557,560
REDUCTIONS
NET INVESTMENT (225,859)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 8,837,633
SECURITIES
FOREIGN 402 8,838,035
CURRENCY
TRANSACTIONS
CHANGE IN NET 3,398,914
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 12,236,949
NET INCREASE $ 12,011,090
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 79,659
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 787
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 30,765
WITHHELD BY
FSC
EXPENSE $ 26,987
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 1,364
CREDITS
TRANSFER 1,004
AGENT CREDITS
$ 29,355
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (225,859) $ (979,722)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 8,838,035 (3,349,104)
GAIN (LOSS)
CHANGE IN NET 3,398,914 (6,154,936)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,011,090 (10,483,762)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (609,796)
SHAREHOLDERS
FROM NET
REALIZED GAIN
IN EXCESS OF - (1,596,628)
NET REALIZED
GAIN
TOTAL - (2,206,424)
DISTRIBUTIONS
SHARE 108,718,560 442,243,515
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT - 2,188,450
OF
DISTRIBUTIONS
COST OF SHARES (122,518,035) (472,146,987)
REDEEMED
REDEMPTION 231,473 1,004,107
FEES
NET INCREASE (13,568,002) (26,710,915)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (1,556,912) (39,401,101)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 35,957,578 75,358,679
PERIOD
END OF PERIOD $ 34,400,666 $ 39,957,578
(INCLUDING NET
ACCUMULATED
INVESTMENT
LOSS OF
$225,859
AND 0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 5,511,346 22,183,259
ISSUED IN - 96,706
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (5,968,963) (23,821,393)
NET INCREASE (457,617) (1,541,428)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 17.72 $ 21.11 $ 13.93 $ 17.12 $ 13.60 $ 12.64
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INVESTMENT (.08) (.22) (.01) (.18) (.18) (.09) E
INCOME (LOSS) D
NET REALIZED 4.17 (3.12) 7.47 (2.01) 3.78 1.33
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 4.09 (3.34) 7.46 (2.19) 3.60 1.24
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.07) (.46) (.92) (.22) (.36)
REALIZED GAIN
IN EXCESS OF - (.20) - (.17) (.05) -
NET REALIZED
GAIN
TOTAL - (.27) (.46) (1.09) (.27) (.36)
DISTRIBUTIONS
REDEMPTION FEES .08 .22 .18 .09 .19 .08
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 21.89 $ 17.72 $ 21.11 $ 13.93 $ 17.12 $ 13.60
END OF PERIOD
TOTAL RETURN B, C 23.53% (15.06)% 54.91% (12.45)% 27.94% 10.69%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 34,401 $ 35,958 $ 75,359 $ 18,633 $ 11,035 $ 11,868
OF PERIOD
(000 OMITTED)
RATIO OF 2.04% A 1.89% 1.47% 2.50% F 2.33% 2.48% A, F
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.94% A, G 1.80% G 1.41% G 2.50% 2.31% G 2.48% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.78)% A (1.10)% (.07)% (1.31)% (1.11)% (.90)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 392% A 469% 504% 200% 171% 96% A
TURNOVER RATE
AVERAGE $ .0242 $ .0409
COMMISSION
RATE H
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING DURING
THE
PERIOD. E INVEST
MENT INCOME
(LOSS) PER SHARE
REFLECTS A SPECIAL
DIVIDEND WHICH
AMOUNTED TO $.01
PER SHARE.
F FMR AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES
DURING THE PERIOD.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S EXPENSE
RATIO WOULD HAVE
BEEN HIGHER (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). G
FMR OR THE FUND
HAS ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). H
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
AUTOMOTIVE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
AUTOMOTIVE 13.08% 25.30% 106.54% 198.44%
AUTOMOTIVE 9.68% 21.54% 100.35% 189.48%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
AUTOMOTIVE 25.30% 15.61% 11.55%
AUTOMOTIVE 21.54% 14.91% 11.21%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114450 S00000000000001
Automotive S&P 500
00502 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9556.25 9781.00
1987/10/31 6688.00 7674.17
1987/11/30 6421.03 7041.82
1987/12/31 7023.43 7577.70
1988/01/31 7341.36 7896.72
1988/02/29 7811.04 8264.71
1988/03/31 8374.65 8009.33
1988/04/30 8519.16 8098.24
1988/05/31 8490.26 8168.69
1988/06/30 8981.61 8543.63
1988/07/31 8880.45 8511.17
1988/08/31 8468.58 8221.79
1988/09/30 8504.71 8572.04
1988/10/31 8439.68 8810.34
1988/11/30 8259.03 8684.35
1988/12/31 8432.45 8836.33
1989/01/31 8822.64 9483.15
1989/02/28 8728.71 9247.02
1989/03/31 8894.90 9462.47
1989/04/30 9292.32 9953.57
1989/05/31 9429.60 10356.69
1989/06/30 9263.41 10297.66
1989/07/31 9588.57 11227.54
1989/08/31 9682.51 11447.60
1989/09/30 9458.51 11400.66
1989/10/31 8670.90 11136.17
1989/11/30 8750.38 11363.35
1989/12/31 8778.28 11636.07
1990/01/31 8546.49 10855.29
1990/02/28 8800.71 10995.32
1990/03/31 9129.71 11286.70
1990/04/30 9099.80 11004.53
1990/05/31 9615.73 12077.47
1990/06/30 9787.92 11995.34
1990/07/31 9818.24 11956.96
1990/08/31 8408.06 10876.05
1990/09/30 7604.40 10346.39
1990/10/31 7452.77 10301.90
1990/11/30 7892.50 10967.40
1990/12/31 8188.19 11273.39
1991/01/31 8650.67 11764.91
1991/02/28 9355.76 12606.10
1991/03/31 9431.58 12911.17
1991/04/30 9537.72 12942.15
1991/05/31 10303.47 13501.25
1991/06/30 10280.73 12882.90
1991/07/31 10705.30 13483.24
1991/08/31 11054.05 13802.79
1991/09/30 10728.04 13572.29
1991/10/31 11008.56 13754.15
1991/11/30 10462.69 13199.86
1991/12/31 11244.45 14709.93
1992/01/31 12459.20 14436.32
1992/02/29 13713.91 14623.99
1992/03/31 14009.61 14338.83
1992/04/30 14904.69 14760.39
1992/05/31 14896.70 14832.71
1992/06/30 14808.07 14611.71
1992/07/31 14944.15 15209.33
1992/08/31 14015.64 14897.53
1992/09/30 13783.51 15073.32
1992/10/31 14359.83 15126.08
1992/11/30 15056.21 15641.88
1992/12/31 15923.79 15834.28
1993/01/31 16659.11 15967.28
1993/02/28 16904.22 16184.44
1993/03/31 17811.11 16525.93
1993/04/30 17708.21 16126.00
1993/05/31 18786.54 16558.18
1993/06/30 19115.09 16606.20
1993/07/31 19334.13 16539.77
1993/08/31 20008.08 17166.63
1993/09/30 20218.69 17034.45
1993/10/31 20648.34 17387.06
1993/11/30 20648.34 17221.88
1993/12/31 21558.36 17430.27
1994/01/31 22787.29 18022.90
1994/02/28 22051.66 17534.48
1994/03/31 20502.51 16769.97
1994/04/30 20085.62 16984.63
1994/05/31 19788.05 17263.18
1994/06/30 19534.25 16840.23
1994/07/31 20120.62 17392.59
1994/08/31 19788.05 18105.69
1994/09/30 18947.87 17662.10
1994/10/31 19306.70 18059.49
1994/11/30 18142.69 17401.77
1994/12/31 18809.04 17659.84
1995/01/31 18362.13 18117.75
1995/02/28 19275.38 18823.80
1995/03/31 19178.23 19379.29
1995/04/30 19119.94 19950.01
1995/05/31 19508.55 20747.42
1995/06/30 19994.32 21229.38
1995/07/31 21432.20 21933.35
1995/08/31 21237.90 21988.40
1995/09/30 21344.77 22916.31
1995/10/31 20353.79 22834.50
1995/11/30 20858.99 23836.93
1995/12/31 21335.05 24296.03
1996/01/31 21082.45 25123.07
1996/02/29 21228.18 25355.96
1996/03/31 22520.33 25600.14
1996/04/30 23658.13 25977.48
1996/05/31 24202.89 26647.44
1996/06/30 23920.78 26748.97
1996/07/31 22529.70 25567.20
1996/08/31 23103.64 26106.41
1996/09/30 23298.20 27575.68
1996/10/31 23405.20 28336.22
1996/11/30 24592.00 30478.15
1996/12/31 24763.81 29874.38
1997/01/31 25197.56 31740.93
1997/02/28 25601.04 31989.78
1997/03/31 25096.69 30675.32
1997/04/30 25657.45 32506.64
1997/05/31 27124.79 34485.64
1997/06/30 27942.31 36030.60
1997/07/31 29168.58 38897.55
1997/08/29 28948.48 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114454 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Select Automotive Portfolio on August 31, 1987, and the
current maximum 3% sales charge was paid. As the chart shows, by
August 31, 1997, the value of the investment would have grown to
$28,948 - a 189.48% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
TOWER AUTOMOTIVE, INC. 13.0
JOHNSON CONTROLS, INC. 7.4
VOLVO AB ADR CLASS B 5.6
EATON CORP. 5.6
MARK IV INDUSTRIES, INC. 4.9
SNAP-ON TOOLS CORP. 4.1
MAGNA INTERNATIONAL, INC. CLASS A 4.1
GOODYEAR TIRE & RUBBER CO. 4.0
ITT INDUSTRIES, INC. 3.9
BORG-WARNER AUTOMOTIVE, INC. 3.8
TOP INDUSTRIES AS OF AUGUST 31, 1997
AUTO & TRUCK PARTS 57.5%
MOTOR VEHICLES & CAR BODIES 15.6%
PUBLIC BUILDING & RELATED
FURNITURE 7.4%
TIRES & INNER TUBES 6.2%
GASKETS, HOSES, BELTS 4.9%
ALL OTHERS 8.4%
ROW: 1, COL: 1, VALUE: 8.4
ROW: 1, COL: 2, VALUE: 4.9
ROW: 1, COL: 3, VALUE: 6.2
ROW: 1, COL: 4, VALUE: 7.4
ROW: 1, COL: 5, VALUE: 15.6
ROW: 1, COL: 6, VALUE: 57.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
AUTOMOTIVE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Doug Chase,
Portfolio Manager of
Fidelity Select Automotive Portfolio
Q. HOW DID THE FUND PERFORM, DOUG?
A. For the six- and 12-month periods that ended August 31, 1997, the
fund returned 13.08% and 25.30%, respectively. By comparison, the
Standard & Poor's 500 Index returned 14.78% and 40.65% for the same
periods.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS?
A. It was an atypical period for auto stocks. The stock market was
willing to bid up companies in this sector that simply were talking
about planned improvements or new products. That didn't happen in
1996, when the market waited for concrete proof. In 1997, investors
appeared to be willing to pay more for the possibility of gains
because cyclicals had lagged growth stocks for so long that it now
seemed to be the right buying opportunity for cyclical stocks such as
auto companies and their suppliers. In June and July, we saw investors
move over to cyclical stocks, and that has meant strong performance
for many automotive stocks, which are cheap on a near-term
price-to-earnings (P/E) basis. While there have been some companies in
particular whose consensus earnings outlooks have improved, that has
not been generally true for the group.
Q. WHAT ABOUT FOREIGN STOCKS?
A. Owning foreign stocks was generally detrimental. Even companies
with good performance, such as Honda, did not see that performance
reflected in the stock price because of worries about the Japanese
economy. Those worries were unjustified, in my opinion, because Honda,
one of the fund's largest holdings, makes most of its money on U.S.
sales, and the company is very well-positioned for future success. On
the other hand there were exceptions to this rule; Volvo proved to be
a good addition to the fund. The company performed well, and showed
good sales results, both in Europe and in the States. If the new
models turn out to be a hit, it will make a big difference in the
company's volumes and margins. Volvo has worked hard to realize the
value of under-appreciated assets for shareholders by selling those
assets, always a good sign.
Q. WHICH STOCKS PERFORMED WELL?
A. Tower, Borg-Warner and Lear were three very strong performers.
Borg-Warner had been 20%-owned by an investment bank, which
subsequently sold its stock, and outside investors became willing to
pay more for the stock. Lear is a very well-known company, but lowered
its earnings estimates last fall, the first time it did so since going
public, and the stock got hurt. It took some time, but investors
finally realized that Lear is a terrific company and a good buy; its
stock appreciated nicely over the last three months of the period.
Q. WHAT STOCKS DISAPPOINTED?
A. Mark IV Industries, an auto parts supplier, has not been recognized
as an attractive company by the market and didn't do as well as
expected. I liked Mark IV because it's cheaply priced, and I believe
in what their management is doing, but it's a relatively illiquid
stock. The company has a great long-term track record, but it has
suffered by not being well-covered on Wall Street.
Q. WHAT'S YOUR INVESTMENT STRATEGY AND OUTLOOK IN THIS ENVIRONMENT,
DOUG?
A. With the market so reactive and sensitive to valuations, I have
positioned the portfolio to be in stocks where there is potential for
earnings estimates to increase and where valuations relative to the
automotive group look good. My strategy continues to be to own the
cheapest stocks where fundamentals are strong. When the market gets a
hint of something positive, a company's stock can move up dramatically
right now. As a rule, I look for companies where management is
effective and the company is solid, and I search for the best buys. I
have been most successful when I find companies doing things better
than the rest of the group, and I can usually buy great companies at a
discount in this sector.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 30, 1986
FUND NUMBER: 502
TRADING SYMBOL: FSAVX
SIZE: as of August 31, 1997, more than
$64 million
MANAGER: Doug Chase, since 1996; manager,
Fidelity Select Industrial Materials Portfolio,
since 1994; equity analyst, steel, non-ferrous
metals, since 1993; joined Fidelity in 1993
(checkmark)
AUTOMOTIVE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.0%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES - 80.9%
AUTO & TRUCK PARTS - 57.5%
Amcast Industrial Corp. 90,000 $ 2,182,499 02339510
Borg-Warner Automotive, Inc. 47,200 2,460,300 09972410
Danaher Corp. 37,700 2,019,306 23585110
Eaton Corp. 40,000 3,602,500 27805810
Echlin, Inc. 19,800 733,838 27874910
Intermet Corp. 42,200 730,588 45881K10
ITT Industries, Inc. 80,000 2,520,000 45091110
Johnson Controls, Inc. 100,000 4,768,750 47836610
Magna International, Inc. Class A 40,000 2,651,774 55922240
Modine Manufacturing Co. 65,800 2,015,125 60782810
Snap-On Tools Corp. 63,600 2,671,200 83303410
SPX Corp. 40,000 2,325,000 78463510
Standard Products Co. 6,700 177,550 85383610
Tower Automotive, Inc. (a) 188,400 8,454,450 89170710
37,312,880
MOTOR VEHICLE SUPPLIES & NEW PARTS - 0.5%
APS Holding Corp. Class A (a) 35,200 272,800 00193710
MOTOR VEHICLES & CAR BODIES - 15.6%
Chrysler Corp. 25,000 878,125 17119610
Ford Motor Co. 15,000 645,000 34537010
General Motors Corp. 10,000 627,500 37044210
Honda Motor Co. Ltd. 78,000 2,401,987 43812810
Lear Corp. (a) 42,800 1,960,775 52186510
Volvo AB ADR Class B 140,400 3,615,300 92885640
10,128,687
TIRES & INNER TUBES - 6.2%
Bandag, Inc. 8,500 453,156 05981510
Cooper Tire & Rubber Co. 25,000 628,125 21683110
Goodyear Tire & Rubber Co. 42,000 2,588,250 38255010
Michelin SA (Compagnie Generale
des Etablissements) Class B 6,732 377,189 59410020
4,046,720
TRUCK & BUS BODIES - 1.1%
Miller Industries, Inc. (a) 47,150 698,409 60055110
TOTAL AUTOS, TIRES, & ACCESSORIES 52,459,496
BUILDING MATERIALS - 4.9%
GASKETS, HOSES, BELTS - 4.9%
Mark IV Industries, Inc. 125,700 3,158,213 57038710
ELECTRICAL EQUIPMENT - 2.4%
MOTORS & GENERATORS - 2.4%
Smith (A.O.) Corp. Class B 43,900 1,547,475 83186520
IRON & STEEL - 1.2%
FABRICATED METAL PRODUCTS - 1.2%
SPS Technologies, Inc. (a) 19,000 815,813 78462610
LEASING & RENTAL - 3.7%
TRUCK RENT & LEASE, NO DRIVER - 3.7%
Hertz Corp. Class A 70,000 2,419,375 42804010
TRUCKING & FREIGHT - 1.9%
AIR COURIER SERVICES - 1.7%
CNF Transportation, Inc. 30,000 1,083,750 12612W10
TRUCKING, LONG DISTANCE - 0.2%
Consolidated Freightways Corp. (a) 10,000 156,250 20923210
TOTAL TRUCKING & FREIGHT 1,240,000
TOTAL COMMON STOCKS
(Cost $53,997,112) 61,640,372
CASH EQUIVALENTS - 5.0%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $3,225,127) 3,225,127 $ 3,225,127 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $57,222,239) $ 64,865,499
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $38,088,396 and $65,555,035, respectively (see Note 3 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 $18,806 for the
period (see Note 4 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%
Sweden 5.6
Canada 4.1
Japan 3.7
Others (individually less than 1%) 0.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $57,257,467. Net unrealized appreciation
aggregated $7,608,032, of which $8,333,357 related to appreciated
investment securities and $725,325 related to depreciated investment
securities.
AUTOMOTIVE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 64,865,499
SECURITIES, AT
VALUE
(COST
$57,222,239
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 80,850
FUND SHARES
SOLD
DIVIDENDS 77,642
RECEIVABLE
INTEREST 19,167
RECEIVABLE
REDEMPTION FEES 31
RECEIVABLE
OTHER 4,808
RECEIVABLES
TOTAL ASSETS 65,047,997
LIABILITIES
PAYABLE TO $ 10,476
CUSTODIAN
BANK
PAYABLE FOR 174,354
FUND SHARES
REDEEMED
ACCRUED 31,662
MANAGEMENT
FEE
OTHER PAYABLES 63,600
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 280,092
NET ASSETS $ 64,767,905
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 52,186,298
UNDISTRIBUTED 82,949
NET INVESTMENT
INCOME
ACCUMULATED 4,858,074
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 7,640,584
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 64,767,905
2,345,234
SHARES
OUTSTANDING
NET ASSET $27.62
VALUE AND
REDEMPTION
PRICE PER
SHARE
($64,767,90
5 (DIVIDED BY)
2,345,234
SHARES)
MAXIMUM $28.47
OFFERING PRICE
PER SHARE
(100/97.00
OF $27.62)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 434,173
INCOME
DIVIDENDS
INTEREST 195,171
TOTAL INCOME 629,344
EXPENSES
MANAGEMENT $ 202,543
FEE
TRANSFER AGENT 265,548
FEES
ACCOUNTING FEES 34,195
AND EXPENSES
NON-INTERESTED 162
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 6,172
AND EXPENSES
REGISTRATION FEES 18,015
AUDIT 10,424
LEGAL 269
MISCELLANEOUS 2,180
TOTAL EXPENSES 539,508
BEFORE
REDUCTIONS
EXPENSE (12,173) 527,335
REDUCTIONS
NET INVESTMENT 102,009
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 5,444,436
SECURITIES
FOREIGN 856 5,445,292
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 2,760,392
SECURITIES
ASSETS AND (1,012) 2,759,380
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 8,204,672
NET INCREASE $ 8,306,681
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 27,318
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 367
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 9,908
WITHHELD BY
FSC
EXPENSE $ 12,166
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 7
CREDITS
$ 12,173
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 102,009 $ 643,042
NET
INVESTMENT
INCOME
NET REALIZED 5,445,292 8,357,523
GAIN (LOSS)
CHANGE IN NET 2,759,380 2,143,826
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 8,306,681 11,144,391
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (159,578) (492,439)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (2,267,665) (2,049,624)
REALIZED GAIN
TOTAL (2,427,243) (2,542,063)
DISTRIBUTIONS
SHARE 21,986,329 256,027,701
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 2,411,607 2,523,772
OF
DISTRIBUTIONS
COST OF SHARES (51,881,078) (236,749,789)
REDEEMED
REDEMPTION 25,043 189,071
FEES
NET INCREASE (27,458,099) 21,990,755
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (21,578,661) 30,593,083
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 86,346,566 55,753,483
PERIOD
END OF PERIOD $ 64,767,905 $ 86,346,566
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$82,949
AND
$225,693,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 850,024 10,548,479
ISSUED IN 102,360 104,848
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,008,718) (9,803,178)
NET INCREASE (1,056,334) 850,149
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 25.38 $ 21.85 $ 19.84 $ 25.48 $ 20.69 $ 18.65
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .04 .13 .03 .08 .05 .13
INVESTMENT
INCOME D
NET REALIZED 3.11 4.28 1.95 (3.46) 6.00 2.26
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 3.15 4.41 1.98 (3.38) 6.05 2.39
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.06) (.17) - (.05) (.05) (.06)
INVESTMENT
INCOME
FROM NET (.86) (.75) - (2.26) (1.26) (.36)
REALIZED GAIN
TOTAL (.92) (.92) - (2.31) (1.31) (.42)
DISTRIBUTIONS
REDEMPTION FEES .01 .04 .03 .05 .05 .07
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 27.62 $ 25.38 $ 21.85 $ 19.84 $ 25.48 $ 20.69
END OF PERIOD
TOTAL RETURN B, C 13.08% 20.60% 10.13% (12.59)% 30.45% 13.42%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 64,768 $ 86,347 $ 55,753 $ 60,075 $ 228,698 $ 110,360
OF PERIOD
(000 OMITTED)
RATIO OF 1.58% A 1.56% 1.81% 1.82% 1.69% 1.57% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.55% A, E 1.52% E 1.80% E 1.80% E 1.68% E 1.57% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .30% A .54% .13% .34% .22% .72% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 121% A 175% 61% 63% 64% 140% A
TURNOVER RATE
AVERAGE $ .0429 $ .0495
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
CHEMICALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
CHEMICALS 17.21% 29.00% 139.09% 260.20%
CHEMICALS 13.69% 25.13% 131.92% 249.40%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
CHEMICALS 29.00% 19.05% 13.67%
CHEMICALS 25.13% 18.32% 13.33%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114614 S00000000000001
Chemicals S&P 500
00069 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9873.29 9781.00
1987/10/31 6869.63 7674.17
1987/11/30 6638.58 7041.82
1987/12/31 7418.95 7577.70
1988/01/31 7236.99 7896.72
1988/02/29 8039.26 8264.71
1988/03/31 8448.67 8009.33
1988/04/30 8547.92 8098.24
1988/05/31 8225.35 8168.69
1988/06/30 9312.97 8543.63
1988/07/31 9031.76 8511.17
1988/08/31 8638.90 8221.79
1988/09/30 8746.42 8572.04
1988/10/31 8882.89 8810.34
1988/11/30 8585.14 8684.35
1988/12/31 8973.86 8836.33
1989/01/31 9573.50 9483.15
1989/02/28 9453.57 9247.02
1989/03/31 9556.96 9462.47
1989/04/30 9829.90 9953.57
1989/05/31 10057.35 10356.69
1989/06/30 9937.26 10297.66
1989/07/31 10570.50 11227.54
1989/08/31 11054.74 11447.60
1989/09/30 10661.55 11400.66
1989/10/31 9908.29 11136.17
1989/11/30 10119.37 11363.35
1989/12/31 10527.36 11636.07
1990/01/31 9777.27 10855.29
1990/02/28 9842.69 10995.32
1990/03/31 10134.87 11286.70
1990/04/30 9899.38 11004.53
1990/05/31 10762.85 12077.47
1990/06/30 10850.70 11995.34
1990/07/31 10886.60 11956.96
1990/08/31 9432.66 10876.05
1990/09/30 8965.96 10346.39
1990/10/31 9069.18 10301.90
1990/11/30 9674.98 10967.40
1990/12/31 10092.32 11273.39
1991/01/31 10769.93 11764.91
1991/02/28 11595.62 12606.10
1991/03/31 11873.85 12911.17
1991/04/30 11779.61 12942.15
1991/05/31 12596.33 13501.25
1991/06/30 12254.00 12882.90
1991/07/31 12844.61 13483.24
1991/08/31 13097.08 13802.79
1991/09/30 12997.90 13572.29
1991/10/31 13205.28 13754.15
1991/11/30 12547.05 13199.86
1991/12/31 13994.18 14709.93
1992/01/31 14262.94 14436.32
1992/02/29 14777.30 14623.99
1992/03/31 14670.72 14338.83
1992/04/30 15203.61 14760.39
1992/05/31 15115.57 14832.71
1992/06/30 14667.52 14611.71
1992/07/31 15130.34 15209.33
1992/08/31 14613.36 14897.53
1992/09/30 14628.13 15073.32
1992/10/31 14480.42 15126.08
1992/11/30 14918.63 15641.88
1992/12/31 15240.32 15834.28
1993/01/31 15224.65 15967.28
1993/02/28 14958.10 16184.44
1993/03/31 15313.49 16525.93
1993/04/30 15597.53 16126.00
1993/05/31 15833.69 16558.18
1993/06/30 15436.51 16606.20
1993/07/31 15672.67 16539.77
1993/08/31 16440.20 17166.63
1993/09/30 15919.57 17034.45
1993/10/31 16520.71 17387.06
1993/11/30 16644.16 17221.88
1993/12/31 17184.54 17430.27
1994/01/31 18522.16 18022.90
1994/02/28 18492.95 17534.48
1994/03/31 17938.05 16769.97
1994/04/30 18805.52 16984.63
1994/05/31 19258.31 17263.18
1994/06/30 19017.21 16840.23
1994/07/31 19875.75 17392.59
1994/08/31 21028.31 18105.69
1994/09/30 20875.42 17662.10
1994/10/31 20840.13 18059.49
1994/11/30 19205.38 17401.77
1994/12/31 19723.62 17659.84
1995/01/31 19208.20 18117.75
1995/02/28 20322.94 18823.80
1995/03/31 20946.23 19379.29
1995/04/30 21395.25 19950.01
1995/05/31 21608.29 20747.42
1995/06/30 21973.50 21229.38
1995/07/31 23014.35 21933.35
1995/08/31 23111.74 21988.40
1995/09/30 23476.95 22916.31
1995/10/31 22308.28 22834.50
1995/11/30 23282.17 23836.93
1995/12/31 23953.99 24296.03
1996/01/31 25055.03 25123.07
1996/02/29 25907.01 25355.96
1996/03/31 27158.78 25600.14
1996/04/30 27441.79 25977.48
1996/05/31 27382.44 26647.44
1996/06/30 27032.90 26748.97
1996/07/31 25938.13 25567.20
1996/08/31 27085.66 26106.41
1996/09/30 28285.95 27575.68
1996/10/31 28477.21 28336.22
1996/11/30 29525.81 30478.15
1996/12/31 29108.70 29874.38
1997/01/31 29564.29 31740.93
1997/02/28 29809.61 31989.78
1997/03/31 28849.36 30675.32
1997/04/30 29916.12 32506.64
1997/05/31 31389.47 34485.64
1997/06/30 32252.44 36030.60
1997/07/31 34834.31 38897.55
1997/08/29 34940.00 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114622 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Chemicals Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$34,940 - a 249.40% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
CYTEC INDUSTRIES, INC. 7.5
PRAXAIR, INC. 7.3
AIR PRODUCTS & CHEMICALS, INC. 5.9
ICI (IMPERIAL CHEMICAL INDUSTRIES) PLC ADR CLASS L 5.8
SEALED AIR CORP. 4.9
WITCO CORP. 4.9
UNION CARBIDE CORP. 4.8
RAYCHEM CORP. 4.7
MINNESOTA MINING & MANUFACTURING CO. 4.4
W.R. GRACE & CO. 4.0
TOP INDUSTRIES AS OF AUGUST 31, 1997
36
CHEMICALS 35.9%
INDUSTRIAL GASES 16.4%
UNSUPPORTED PLASTICS
FILM & SHEET 8.9%
MANUFACTURING INDUSTRIES,
NEC 4.4%
PAINT & VARNISH 3.6%
ALL OTHERS 30.8%
ROW: 1, COL: 1, VALUE: 30.8
ROW: 1, COL: 2, VALUE: 3.6
ROW: 1, COL: 3, VALUE: 4.4
ROW: 1, COL: 4, VALUE: 8.9
ROW: 1, COL: 5, VALUE: 16.4
ROW: 1, COL: 6, VALUE: 35.9
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
CHEMICALS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Audra Barranco became Portfolio Manager of
Fidelity Select Chemicals Portfolio on June 2, 1997.
Q. HOW DID THE FUND PERFORM, AUDRA?
A. For the six months that ended on August 31, 1997, the fund had a
total return of 17.21%. For the 12 months, the fund's return was
29.00%. For the same periods, the Standard & Poor's 500 Index returned
14.78% and 40.65%, respectively.
Q. THE FUND HAD A RELATIVELY STRONG SIX MONTHS. WHAT ACCOUNTED FOR
THIS?
A. By the nature of the specialty and diversified chemical industries,
stock selection on a case-by-case basis is more the fund's strategy,
versus an industry call. The chemical companies in which we invest
produce a variety of highly specialized products and serve widely
diversified markets, and because the companies differ as much as they
do from each other, individual stock picking is very important.
Therefore, reducing the number of holdings in the portfolio from about
60 to about 45 and concentrating more of the assets in our favorite
chemical selections seemed to be an appropriate strategy for
outperforming the fund's benchmark.
Q. WHAT COMPANIES CONTRIBUTED TO THIS STRONG PERFORMANCE?
A. We had four companies in the top 10 holdings that had very large
moves. The fund's largest holding at the end of the period, Cytec
Industries, went up 20% following its acquisition of the majority of
Fiberite, Inc. Two other top 10 holdings, Sealed Air Corp. and W.R.
Grace & Co., merged their packaging divisions, which led to
significant appreciation in their stocks' prices. Another top holding
in the fund, Imperial Chemical Industries, PLC, a company based in the
United Kingdom, performed well when the market finally recognized its
potential. A fifth strong contributor was another top 10 holding,
Witco Corp., a specialty chemicals company, which continues to make
progress in its major restructuring. We added to existing weightings
in Grace, Cytec and Witco. In all these cases, we knew they were great
stories. We were waiting for their value to be recognized, and it has
begun to happen after a slow start in the beginning of 1997.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Commodity companies in general have not performed well. They are
the most affected by the business cycle and are capacity-driven. One
example of a portfolio holding that we own but whose value we believe
was not recognized by the market during the six months was Union
Carbide, which is a commodity-chemical company. We started the
six-month period underweighted in commodities, and we have reduced our
commodity weightings even more. We believe this is the best strategy,
as we are heading into a cyclical trough with commodity chemicals, as
new capacity is coming on and ethylene margins will be declining.
Q. WHY ARE SPECIALTY AND DIVERSIFIED COMPANIES LESS AFFECTED BY THE
BUSINESS CYCLE?
A. Because these companies take commodity raw materials and turn them
into such value-added or "specialized" products for their customers,
the pricing strategy is different for them than for commodity chemical
companies. The specialty companies' product pricing is based largely
on the value the products bring the customers, and therefore pricing
is not as affected by the capacity-driven issues that affect commodity
chemicals' product prices. Hence, the specialty/diversifieds tend to
have smaller fluctuations in prices/margins and earnings over the
course of a cycle.
Q. WHAT IS YOUR OUTLOOK?
A. The outlook for a number of specialty and diversified companies is
great. I see plenty of opportunities for revenue growth, margin
improvements and earnings growth. With a number of companies there is
a lot of opportunity for strategic acquisitions. Cytec is a case in
point. It already had been in the aerospace composites business, but
it solidified and enlarged its presence in this business through a
strategic acquisition. In addition, many of the chemical companies
want to grow and add to their business outside the United States and
are looking for growth in Latin America and Asia Pacific through
strategic acquisitions. Right now, I plan to stay more heavily
weighted in specialty and diversified companies, rather than
commodities, for reasons I explained earlier. Within the specialty and
diversified companies, it's a case-by-case, stock-picking strategy.
This is definitely not an industry call. It is by no means a
homogeneous industry.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 069
TRADING SYMBOL: FSCHX
SIZE: as of August 31, 1997, more than
$84 million
MANAGER: Audra Barranco, since June 1997;
equity analyst, specialty and diversified
chemicals; joined Fidelity in 1996
(checkmark)
CHEMICALS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.1%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.7%
ORDNANCE - 0.7%
Primex Technologies, Inc. 19,560 $ 572,130 74159710
BUILDING MATERIALS - 6.9%
ABRASIVES AND ASBESTOS - 3.3%
Hexcel Corp. (a) 105,000 2,920,313 42829110
PAINT & VARNISH - 3.6%
Lilly Industrial Coatings, Inc. Class A 104,000 2,301,000 53249110
Sherwin-Williams Co. 29,500 809,406 82434810
3,110,406
TOTAL BUILDING MATERIALS 6,030,719
CHEMICALS & PLASTICS - 71.3%
ADHESIVES & SEALANTS - 1.9%
Ferro Corp. 19,100 718,638 31540510
International Specialty Products, Inc. (a) 48,900 699,881 46033410
Lydall, Inc. (a) 10,500 249,375 55081910
1,667,894
AGRICULTURAL CHEMICALS - 3.2%
IMC Global, Inc. 19,740 694,601 44966910
OM Group, Inc. 27,900 1,021,838
Potash Corp. of Saskatchewan 14,400 1,067,220 73755L10
2,783,659
CHEMICALS - 35.9%
Bayer AG 4,800 179,074 07273010
Cabot Corp. 14,700 402,413 12705510
Cytec Industries, Inc. (a) 133,713 6,526,866 23282010
du Pont (E.I.) de Nemours & Co. 33,800 2,106,163 26353410
ICI (Imperial Chemical Industries)
PLC ADR Class L 77,500 5,085,938 45270450
Monsanto Co. 70,000 3,075,625 61166210
NL Industries, Inc. 19,800 262,350 62915640
Olin Corp. 24,800 1,103,600 68066520
Raychem Corp. 44,500 4,141,281 75460310
Union Carbide Corp. 82,200 4,217,888 90558110
Witco Corp. 90,700 4,262,900 97738510
31,364,098
INDUSTRIAL GASES - 16.4%
AGA AB Series B shares 83,100 1,188,104 00107010
Air Products & Chemicals, Inc. 63,200 5,154,750 00915810
BOC Group PLC 48,441 835,618 09676210
L'Air Liquide 3,970 605,992 00867810
NuCo2, Inc. (a) 12,000 198,000 62942810
Praxair, Inc. 118,553 6,335,176 74005P10
14,317,640
INORGANIC CHEMICALS - 1.8%
Minerals Technologies, Inc. 7,700 306,075 60315810
Valspar Corp. 42,100 1,297,206 92035510
1,603,281
NITROGENOUS FERTILIZERS - 1.0%
Soc Quimica y Minera de Chile ADR 14,300 863,363 83363510
PLASTICS & SYNTHETIC RESINS - 2.2%
Geon Co. 2,100 41,738 37246W10
Spartech Corp. 118,200 1,876,425 84722020
1,918,163
SHARES VALUE (NOTE 1)
UNSUPPORTED PLASTICS FILM & SHEET - 8.9%
Sealed Air Corp. (a) 82,500 $ 4,279,688 81211510
W.R. Grace & Co. 51,100 3,516,319 38391110
7,796,007
TOTAL CHEMICALS & PLASTICS 62,314,105
CONSUMER DURABLES - 4.4%
MANUFACTURING INDUSTRIES, NEC - 4.4%
Minnesota Mining & Manufacturing Co. 42,400 3,810,700 60405910
DRUGS & PHARMACEUTICALS - 1.3%
BIOTECHNOLOGY - 1.3%
Sigma Aldrich Corp. 33,600 1,096,200 82655210
ELECTRONIC INSTRUMENTS - 0.0%
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 0.0%
Lam Research Corp. 373 21,075 51280710
HOUSEHOLD PRODUCTS - 1.0%
COSMETICS - 1.0%
Gillette Co. 11,100 919,219 37576610
PACKAGING & CONTAINERS - 3.2%
GLASS CONTAINERS - 1.5%
Owens-Illinois, Inc. (a) 36,900 1,284,581 69076840
METAL CANS & CONTAINERS - 1.7%
Silgan Holdings, Inc. 37,700 1,545,700 82704810
TOTAL PACKAGING & CONTAINERS 2,830,281
PRECIOUS METALS - 0.4%
GOLD ORES - 0.4%
Stillwater Mining Co. (a)(c) 15,300 321,300 86074Q90
RETAIL & WHOLESALE, MISCELLANEOUS - 0.9%
RETAIL STORES - 0.9%
Gadzooks, Inc. (a) 40,000 760,000 36255310
TOTAL COMMON STOCKS
(Cost $62,073,652) 78,675,729
CASH EQUIVALENTS - 9.9%
Taxable Central Cash Fund (b)
(Cost $8,619,397) 8,619,397 8,619,397 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $70,693,049) $ 87,295,126
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $321,300 or 0.4%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $8,788,619 and $50,039,464, respectively (see Note 3 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 $16,086 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $4,279,688 and $4,455,000, respectively (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 88.6%
United Kingdom 7.0
Sweden 1.3
Canada 1.2
Others (individually less than 1%) 1.9
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $70,693,049. Net unrealized appreciation
aggregated $16,602,077, of which $17,200,816 related to appreciated
investment securities and $598,739 related to depreciated investment
securities.
CHEMICALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 87,295,126
SECURITIES, AT
VALUE
(COST
$70,693,049
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 2,282,994
INVESTMENTS
SOLD
RECEIVABLE FOR 82,305
FUND SHARES
SOLD
DIVIDENDS 162,670
RECEIVABLE
INTEREST 55,404
RECEIVABLE
REDEMPTION FEES 85
RECEIVABLE
OTHER 1,658
RECEIVABLES
TOTAL ASSETS 89,880,242
LIABILITIES
PAYABLE FOR $ 281,550
FUND SHARES
REDEEMED
ACCRUED 42,475
MANAGEMENT
FEE
OTHER PAYABLES 110,449
AND
ACCRUED
EXPENSES
COLLATERAL ON 4,455,000
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 4,889,474
NET ASSETS $ 84,990,768
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 61,348,723
UNDISTRIBUTED 125,558
NET INVESTMENT
INCOME
ACCUMULATED 6,914,580
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 16,601,907
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 84,990,768
1,706,651
SHARES
OUTSTANDING
NET ASSET $49.80
VALUE AND
REDEMPTION
PRICE PER
SHARE
($84,990,76
8 (DIVIDED BY)
1,706,651
SHARES)
MAXIMUM $51.34
OFFERING PRICE
PER SHARE
(100/97.00
OF $49.80)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 733,000
INCOME
DIVIDENDS
INTEREST 196,260
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$56,611)
TOTAL INCOME 929,260
EXPENSES
MANAGEMENT $ 281,952
FEE
TRANSFER AGENT 410,704
FEES
ACCOUNTING AND 50,085
SECURITY
LENDING FEES
NON-INTERESTED 224
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 7,380
AND EXPENSES
REGISTRATION FEES 24,622
AUDIT 11,190
LEGAL 701
MISCELLANEOUS 176
TOTAL EXPENSES 787,034
BEFORE
REDUCTIONS
EXPENSE (5,307) 781,727
REDUCTIONS
NET INVESTMENT 147,533
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 7,160,710
SECURITIES
FOREIGN (1,675) 7,159,035
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 5,970,958
SECURITIES
ASSETS AND 500 5,971,458
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 13,130,493
NET INCREASE $ 13,278,026
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 56,959
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 2,731
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 33,263
WITHHELD BY
FSC
EXPENSE $ 5,293
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 14
CREDITS
$ 5,307
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 147,533 $ 822,641
NET
INVESTMENT
INCOME
NET REALIZED 7,159,035 14,200,355
GAIN (LOSS)
CHANGE IN NET 5,971,458 (2,755,765)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 13,278,026 12,267,231
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (26,599) (228,367)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (79,366) (6,676,304)
REALIZED GAIN
TOTAL (105,965) (6,904,671)
DISTRIBUTIONS
SHARE 22,119,627 349,364,954
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 104,505 6,799,944
OF
DISTRIBUTIONS
COST OF SHARES (61,886,033) (339,611,033)
REDEEMED
REDEMPTION 71,326 262,393
FEES
NET INCREASE (39,590,575) 16,816,258
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (26,418,514) 22,178,818
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 111,409,282 89,230,464
PERIOD
END OF PERIOD $ 84,990,768 $ 111,409,282
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$125,558
AND
$583,830,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 493,654 8,409,682
ISSUED IN 2,571 164,313
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (1,409,097) (8,211,486)
NET INCREASE (912,872) 362,509
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 42.53 $ 39.53 $ 33.91 $ 31.66 $ 28.62 $ 32.81
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .07 .28 .01 .36 .29 .30
INVESTMENT
INCOME D
NET REALIZED 7.21 5.49 8.89 2.65 5.97 (.84)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 7.28 5.77 8.90 3.01 6.26 (.54)
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.01) (.12) (.08) (.22) (.23) (.31)
INVESTMENT
INCOME
FROM NET (.03) (2.74) (3.22) (.60) (3.05) (3.36)
REALIZED GAIN
TOTAL (.04) (2.86) (3.30) (.82) (3.28) (3.67)
DISTRIBUTIONS
REDEMPTION FEES .03 .09 .02 .06 .06 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 49.80 $ 42.53 $ 39.53 $ 33.91 $ 31.66 $ 28.62
END OF PERIOD
TOTAL RETURN B, C 17.21% 15.06% 27.48% 9.90% 23.63% (1.61)%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 84,991 $ 111,409 $ 89,230 $ 97,511 $ 62,217 $ 28,796
OF PERIOD
(000 OMITTED)
RATIO OF 1.66% A 1.83% 1.99% 1.52% 1.93% 1.89% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.65% A, E 1.81% E 1.97% E 1.51% E 1.93% 1.89% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .31% A .67% .04% 1.07% .97% 1.21% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 19% A 207% 87% 106% 81% 214% A
TURNOVER RATE
AVERAGE $ .0405 $ .0458
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
CYCLICAL INDUSTRIES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED LIFE OF
AUGUST 31, 1997 FUND
CYCLICAL INDUSTRIES 18.60%
CYCLICAL INDUSTRIES 15.04%
(INCL. 3% SALES CHARGE)
S&P 500 14.77%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, since the fund started on
March 3, 1997. You can compare the fund's returns to the performance
of the S&P 500 - a widely recognized, unmanaged index of common
stocks. This benchmark includes reinvestment of dividends and capital
gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate
each year. Average annual total returns will appear once the fund is a
year old, and the growth of a hypothetical $10,000 investment in the
fund will appear in the fund's next report six months from now.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
GENERAL ELECTRIC CO. 5.6
FORT JAMES CORP. 3.2
WESTINGHOUSE ELECTRIC CORP. 2.5
MINNESOTA MINING & MANUFACTURING CO. 2.4
QUANEX CORP. 2.4
DU PONT (E.I.) DE NEMOURS & CO. 2.2
ALUMINUM CO. OF AMERICA 2.2
DOFASCO INC. 2.2
EMERSON ELECTRIC CO. 2.0
W.R. GRACE & CO. 1.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
ELECTRICAL MACHINERY 10.1%
PAPER 6.5%
CHEMICALS 5.4%
IRON & STEEL BLAST
FURNACES, MILLS 4.6%
PAPER MILLS 4.4%
ALL OTHERS 69.0%
ROW: 1, COL: 1, VALUE: 69.0
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.6
ROW: 1, COL: 4, VALUE: 5.4
ROW: 1, COL: 5, VALUE: 6.5
ROW: 1, COL: 6, VALUE: 10.1
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
CYCLICAL INDUSTRIES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Albert Ruback,
Portfolio Manager of
Fidelity Select Cyclical
Industries Portfolio
Q. HOW DID THE FUND PERFORM, ALBERT?
A. From its inception on March 3, 1997, through August 31, 1997, the
fund had a return of 18.60%, outperforming the Standard & Poor's 500
Index, which returned 14.77% during the same time frame.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE DURING THE PERIOD?
A. Almost without exception until the last month of the period, the
stock market was led - dominated, in fact - by a relatively small
group of the largest-capitalization stocks, such as Gillette and
Coca-Cola. Companies such as these and a couple of dozen others have
been responsible for an unusually large portion of the S&P 500's gains
over the past couple of years. The cyclical sector performed well due
to a generally strong economy, one characterized by moderate growth,
low unemployment and low interest rates. All in all, it was an
excellent environment for cyclical stocks.
Q. WHAT WAS YOUR INVESTING STRATEGY OVER THE PAST SIX MONTHS?
A. I generally favored three sectors over the course of the period -
paper and forest products, metals and mining, and aerospace and
defense, although I also held significant positions in iron and steel,
chemicals and plastics, and electrical equipment. Business prospects
for companies in the paper and forest products sector continued to
improve, and valuations were still attractive even as many of the
stocks appreciated in price. Fort James - the fund's second-largest
holding at the end of the period - is a good example of my investments
in this sector. On the metals side, particularly aluminum, there were
low inventory levels and what I believed to be an inflection point for
commodity prices - meaning a point where I felt commodity metal prices
were going to increase. Alcoa - the Aluminum Company of America - and
Alumax helped the fund in this area. As far as aerospace and defense,
I felt we were in the early phases of a huge backlog-building cycle
where cash-flow generation would be enormous and stocks in this area
would appreciate. Northrop Grumman, a defense electronics company, and
Lockheed Martin were two holdings that reflected this strategy.
Q. HOW DID THE FUND'S LARGEST HOLDINGS PERFORM? WHICH CONTRIBUTED TO
THE FUND'S PERFORMANCE DURING THE PERIOD?
A. General Electric, which represented almost 6% of the fund's
holdings at the end of the period as my top position, was up over 20%
during the past six months, although it retreated pretty significantly
late in the period, as did many of the stock market's largest-cap
companies. Fort James, manufacturer of Quilted Northern bathroom
tissues, Brawny paper towels and Dixie cups, also appreciated over 20%
over the past six months. Westinghouse Electric, the fund's
third-largest position at the end of August, had a stellar
performance, with its stock jumping almost 50%. Quanex, a metals
manufacturer, and W.R. Grace, the specialty chemical and health care
company, also contributed nicely during the period.
Q. DESPITE THE PORTFOLIO'S STRONG SHOWING SINCE INCEPTION, THERE MUST
HAVE BEEN SOME DISAPPOINTMENTS . . .
A. That's true. Minnesota Mining & Manufacturing - 3M to most of us -
was basically flat during the period and, as the fund's fourth-largest
position at the end of August, it detracted from the fund's return.
The stocks of DuPont, Alcoa and Emerson Electric, all top 10 holdings,
each appreciated over the past six months, but not as impressively as
the fund in general or the S&P.
Q. WHAT'S YOUR OUTLOOK FOR THE REST OF THE YEAR, ALBERT?
A. Generally speaking, the only two areas within the cyclicals that
I'm worried about are autos and chemicals, where I think possible
over-capacity by the producers could hurt their profitability. Right
now, everything seems to be holding up all right, so I'm not that
concerned, although I will be watching these sectors closely. I think
the key question, though, is what the Federal Reserve Board will do
with interest rates. Cyclical industries, by definition, are tied to
the performance of the economy. If the Fed raises rates to slow down
economic growth, it will most likely have a negative effect on
cyclical companies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: March 3, 1997
FUND NUMBER: 515
TRADING SYMBOL: FCYCF
SIZE: as of August 31, 1997, more than
$4 million
MANAGER: Albert Ruback, since inception;
manager, Fidelity Select Energy Portfolio,
1994-1996; Fidelity Select Industrial
Equipment Portfolio, 1991-1994; sector
leader, cyclical industries, since 1996; joined
Fidelity in 1991
(checkmark)
CYCLICAL INDUSTRIES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.9%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 6.4%
AIRCRAFT - 1.6%
Boeing Co. 540 $ 29,396 09702310
Lockheed Martin Corp. 400 41,475 53983010
70,871
AIRCRAFT & PARTS - 2.0%
Precision Castparts Corp. 200 12,925 74018910
Rohr Industries, Inc. (a) 400 10,825 77542210
Sundstrand Corp. 900 53,100 86732310
Textron, Inc. 200 12,463 88320310
89,313
AIRCRAFT ENGINES & PARTS - 2.2%
AlliedSignal, Inc. 600 49,521 01951210
United Technologies Corp. 600 46,838 91301710
96,359
AIRCRAFT EQUIPMENT - 0.3%
Aviall, Inc. (a) 700 11,463 05366B10
MISSILES & SPACE VEHICLES - 0.3%
Thiokol Corp. 200 15,925 88410310
TOTAL AEROSPACE & DEFENSE 283,931
AIR TRANSPORTATION - 2.6%
AIR TRANSPORT, MAJOR NATIONAL - 2.6%
AMR Corp. (a) 700 70,525 00176510
America West Holding Corp. Class B (a) 1,100 13,269 02365720
Continental Airlines, Inc. Class B (a) 700 25,638 21079530
Ryanair Holdings PLC sponsored ADR 300 8,250 78351310
117,682
AUTOS, TIRES, & ACCESSORIES - 3.6%
AUTO & TRUCK PARTS - 2.3%
Eaton Corp. 500 45,031 27805810
SPX Corp. 800 46,500 78463510
Wynn's International, Inc. 400 11,550 98319510
103,081
MOTOR VEHICLES & CAR BODIES - 1.3%
Chrysler Corp. 1,100 38,638 17119610
Lear Corp. (a) 400 18,325 52186510
56,963
TOTAL AUTOS, TIRES & ACCESSORIES 160,044
BUILDING MATERIALS - 1.8%
AIRCONDITIONING EQUIPMENT - 0.8%
American Standard Companies, Inc. (a) 600 28,200 02971210
York International Corp. 200 8,975 98667010
37,175
PAINT & VARNISH - 0.6%
Lilly Industrial Coatings, Inc. Class A 1,100 24,338 53249110
PLUMBING SUPPLIES - WHOLESALE - 0.4%
Masco Corp. 400 17,775 57459910
TOTAL BUILDING MATERIALS 79,288
CHEMICALS & PLASTICS - 10.5%
ADHESIVES & SEALANTS - 1.1%
Ferro Corp. 700 26,338 31540510
Nalco Chemical Co. 600 24,000 62985310
50,338
AGRICULTURAL CHEMICALS - 0.3%
OM Group, Inc. 400 14,650 67087210
SHARES VALUE (NOTE 1)
CHEMICALS - 5.4%
Cytec Industries, Inc. (a) 1,300 $ 63,456 23282010
du Pont (E.I.) de Nemours & Co. 1,600 99,700 26353410
Monsanto Co. 1,200 52,725 61166210
NL Industries, Inc. 1,300 17,225 62915640
Witco Corp. 200 9,400 97738510
242,506
INDUSTRIAL GASES - 1.5%
Air Products & Chemicals, Inc. 400 32,625 00915810
Praxair, Inc. 600 32,063 74005P10
64,688
PLASTICS & SYNTHETIC RESINS - 0.3%
Spartech Corp. 800 12,700 84722020
UNSUPPORTED PLASTICS FILM & SHEET - 1.9%
Sealed Air Corp. (a) 200 10,375 81211510
W.R. Grace & Co. 1,100 75,694 38391110
86,069
TOTAL CHEMICALS & PLASTICS 470,951
COMMUNICATIONS EQUIPMENT - 0.4%
TELEPHONE EQUIPMENT - 0.4%
Perceptron, Inc. (a) 600 15,750 71361F10
COMPUTERS & OFFICE EQUIPMENT - 0.3%
OFFICE AUTOMATION - 0.3%
Pitney Bowes, Inc. 200 15,275 72447910
CONSTRUCTION - 0.6%
GENERAL BUILDING - 0.3%
D.R. Horton, Inc. 800 12,600 23331A10
OPERATIVE BUILDERS - 0.3%
Kaufman & Broad Home Corp. 700 14,000 48616810
TOTAL CONSTRUCTION 26,600
CONSUMER DURABLES - 2.4%
MANUFACTURING INDUSTRIES, NEC - 2.4%
Minnesota Mining & Manufacturing Co. 1,200 107,850 60405910
CONSUMER ELECTRONICS - 0.6%
APPLIANCES - 0.6%
Maytag Co. 700 19,206 57859210
Whirlpool Corp. 100 5,725 96332010
24,931
DEFENSE ELECTRONICS - 2.2%
Litton Industries, Inc. (a) 300 14,963 53802110
Northrop Grumman Corp. 500 58,531 66680710
Raytheon Co. 400 22,000 75511110
95,494
ELECTRICAL EQUIPMENT - 11.3%
ELECTRICAL MACHINERY - 10.1%
Emerson Electric Co. 1,600 87,500 29101110
General Electric Co. 4,000 250,000 36960410
Westinghouse Electric Corp. 4,400 113,300 96040210
450,800
TV & RADIO COMMUNICATION EQUIPMENT - 1.2%
Gilat Satellite Networks Ltd. (a) 1,600 52,000 40199892
TOTAL ELECTRICAL EQUIPMENT 502,800
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENGINEERING - 0.4%
ARCHITECTS & ENGINEERS - 0.4%
EG & G, Inc. 600 $ 12,750 26845710
Fluor Corp. 100 5,613 34386110
18,363
HOLDING COMPANIES - 1.3%
HOLDING COMPANY OFFICES, NEC - 1.3%
Norfolk Southern Corp. 600 58,800 65584410
INDUSTRIAL MACHINERY & EQUIPMENT - 5.2%
CONSTRUCTION EQUIPMENT - 1.6%
Caterpillar, Inc. 1,200 69,675 14912310
ACCESSORIES & MEASURING CUTTING TOOLS - 0.2%
Stanley Works 200 8,513 85461610
FARM MACHINERY & EQUIPMENT - 1.5%
Case Corp. 1,000 67,063 14743R10
GENERAL INDUSTRIAL MACHINERY - 1.9%
Illinois Tool Works, Inc. 600 29,025 45230810
Ingersoll-Rand Co. 700 42,088 45686610
Tyco International Ltd. 200 15,688 90212410
86,801
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 232,052
IRON & STEEL - 8.8%
BLAST FURNACES - 1.3%
AK Steel Holding Corp. 200 9,050 00154710
Steel Dynamics, Inc. 1,900 47,975 85811910
57,025
FABRICATED METAL PRODUCTS - 0.7%
Aeroquip Vickers, Inc. 200 11,175 00786910
SPS Technologies, Inc. (a) 200 17,175 78462610
28,350
IRON & STEEL BLAST FURNACES, MILLS - 4.6%
Inland Steel Industries, Inc. 2,000 42,125 45747210
Nucor Corp. 1,000 56,688 67034610
Quanex Corp. 2,900 105,306 74762010
204,119
IRON & STEEL FOUNDRIES - 2.1%
Dofasco Inc. 4,700 95,846 25690070
METAL FORGINGS & STAMPINGS - 0.1%
TriMas Corp. 200 5,725 89621510
TOTAL IRON & STEEL 391,065
METALS & MINING - 9.3%
ALUMINUM, EXTRUDED PRODUCTS - 1.3%
Alumax, Inc. (a) 1,400 58,013 02219710
METAL MINING - 1.1%
Phelps Dodge Corp. 600 48,263 71726510
METALS SERVICE CENTERS - WHOLESALE - 0.3%
Ryerson Tull, Inc. Class A (a) 700 11,419 78375510
NON-METALLIC MINERAL MINING - 0.3%
Martin Marietta Materials, Inc. 400 13,975 57328410
NONFERROUS ROLLING & DRAWING - 2.6%
Essex International, Inc. 1,400 53,813 29702510
Special Metals Corp. 600 10,575 84741Y10
Superior Telecom, Inc. (a) 1,400 52,938 86836510
117,326
SHARES VALUE (NOTE 1)
PRIME NONFERROUS SMELTING - 3.4%
Alcan Aluminium Ltd. 1,100 $ 38,444 01371610
Aluminum Co. of America 1,200 98,700 02224910
Inco Ltd. 600 16,235 45325840
153,379
SECONDARY NONFERROUS SMELTING - 0.3%
IMCO Recycling, Inc. 600 11,513 44968110
TOTAL METALS & MINING 413,888
PACKAGING & CONTAINERS - 2.7%
GLASS CONTAINERS - 1.4%
Owens-Illinois, Inc. (a) 1,800 62,663 69076840
METAL CANS & CONTAINERS - 1.3%
Silgan Holdings, Inc. 1,400 57,400 82704810
TOTAL PACKAGING & CONTAINERS 120,063
PAPER & FOREST PRODUCTS - 13.7%
CONVERTED PAPER & PAPERBOARD - 0.5%
Boise Cascade Corp. 600 23,738 09738310
LUMBER & WOOD - 0.8%
Weyerhaeuser Co. 600 34,650 96216610
PAPER - 6.5%
Champion International Corp. 600 35,513 15852510
Chesapeake Corp. 2,000 68,750 16515910
Georgia-Pacific Corp. 200 18,250 37329810
Stone Container Corp. 1,700 29,325 86158910
Temple-Inland, Inc. 600 38,700 87986810
Union Camp Corp. 600 35,588 90553010
Westvaco Corp. 900 30,488 96154810
Willamette Industries, Inc. 400 31,900 96913310
288,514
PAPER MILLS - 4.4%
Bowater, Inc. 1,000 51,188 10218310
Fort James Corp. 3,387 142,254 34747110
193,442
PAPERBOARD MILLS - 0.6%
Mead Corp. 400 28,375 58283410
PULP MILLS - 0.9%
Tembec, Inc. Class A (a) 4,400 41,218 87992010
TOTAL PAPER & FOREST PRODUCTS 609,937
PHOTOGRAPHIC EQUIPMENT - 0.3%
Imation Corp. (a) 500 13,531 45245A10
POLLUTION CONTROL - 2.8%
POLLUTION EQUIPMENT & DESIGN - 0.3%
Ogden Corp. 600 13,913 67634610
REFUSE SYSTEMS - 1.5%
Browning-Ferris Industries, Inc. 700 24,456 11588510
Waste Management, Inc. 1,300 41,600 94106K10
66,056
SANITARY SERVICES - 1.0%
USA Waste Services, Inc. (a) 1,037 43,554 90291710
TOTAL POLLUTION CONTROL 123,523
RAILROADS - 4.5%
RAILROAD EQUIPMENT - 0.1%
Bombardier, Inc. Class B 300 5,826 09775120
RAILROADS - 4.4%
CSX Corp. 1,000 57,188 12640810
Canadian National Railway Co. 1,200 59,362 13637510
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RAILROADS - CONTINUED
RAILROADS - CONTINUED
Union Pacific Corp. 800 $ 51,950 90781810
Wisconsin Central Transportation Corp. (a) 800 24,800 97659210
193,300
TOTAL RAILROADS 199,126
SHIP BUILDING & REPAIR - 1.8%
SHIP BUILDERS - 1.8%
Avondale Industries, Inc. (a) 1,300 29,738 05435010
General Dynamics Corp. 500 39,813 36955010
Newport News Shipbuilding, Inc. 600 11,625 65222810
81,176
TEXTILES & APPAREL - 0.8%
COTTON MILLS - 0.2%
Galey & Lord, Inc. (a) 600 10,688 36352K10
TEXTILE MILL PRODUCTS - 0.6%
Unifi, Inc. 700 26,863 90467710
TOTAL TEXTILES & APPAREL 37,551
TRUCKING & FREIGHT - 2.6%
AIR COURIER SERVICES - 0.3%
CNF Transportation, Inc. 400 14,450 12612W10
FREIGHT FORWARDING - 0.6%
Air Express International Corp. 300 9,113 00910410
Expeditors International of
Washington, Inc. 500 18,313 30213010
27,426
TRUCKING, LOCAL & LONG DISTANCE - 0.4%
Werner Enterprises, Inc. 900 19,688 95075510
TRUCKING, LONG DISTANCE - 1.3%
USFreightways Corp. 600 18,000 91690610
Yellow Corp. (a) 1,200 37,650 98550910
55,650
TOTAL TRUCKING & FREIGHT 117,214
TOTAL COMMON STOCKS
(Cost $3,923,560) 4,316,885
CASH EQUIVALENTS - 3.1%
Taxable Central Cash Fund (b)
(Cost $135,953) 135,953 135,953 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,059,513) $ 4,452,838
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $5,531,758 and $1,779,835, respectively (see Note 3 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 $202 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $4,059,513. Net unrealized appreciation
aggregated $393,325, of which $457,735 related to appreciated
investment securities and $64,410 related to depreciated investment
securities.
CYCLICAL INDUSTRIES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 4,452,838
SECURITIES, AT
VALUE
(COST
$4,059,513)
- - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 95,491
INVESTMENTS
SOLD
RECEIVABLE FOR 29,828
FUND SHARES
SOLD
DIVIDENDS 6,178
RECEIVABLE
INTEREST 1,124
RECEIVABLE
REDEMPTION FEES 93
RECEIVABLE
PREPAID 9,213
EXPENSES
RECEIVABLE FROM 6,414
INVESTMENT
ADVISER FOR
EXPENSE
REDUCTIONS
TOTAL ASSETS 4,601,179
LIABILITIES
PAYABLE TO $ 18,357
CUSTODIAN
BANK
PAYABLE FOR 221,241
FUND SHARES
REDEEMED
OTHER PAYABLES 22,850
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 262,448
NET ASSETS $ 4,338,731
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 3,788,902
ACCUMULATED (15,133)
NET INVESTMENT
(LOSS)
ACCUMULATED 171,637
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS)
ON
INVESTMENTS
NET UNREALIZED 393,325
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 4,338,731
365,841
SHARES
OUTSTANDING
NET ASSET $11.86
VALUE AND
REDEMPTION
PRICE PER
SHARE
($4,338,731
(DIVIDED BY) 365,841
SHARES)
MAXIMUM $12.23
OFFERING PRICE
PER SHARE
(100/97.00
OF $11.86)
STATEMENT OF OPERATIONS
MARCH 3, 1997
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31, 1997
(UNAUDITED)
INVESTMENT $ 19,204
INCOME
DIVIDENDS
INTEREST 6,767
TOTAL INCOME 25,971
EXPENSES
MANAGEMENT $ 9,699
FEE
TRANSFER AGENT 11,037
FEES
ACCOUNTING FEES 29,751
AND EXPENSES
NON-INTERESTED 2
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 10,334
AND EXPENSES
REGISTRATION FEES 29,681
AUDIT 9,000
TOTAL EXPENSES 99,504
BEFORE
REDUCTIONS
EXPENSE (58,400) 41,104
REDUCTIONS
NET INVESTMENT (15,133)
INCOME (LOSS)
REALIZED AND 171,637
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 393,325
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 564,962
NET INCREASE $ 549,829
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 23,036
INFORMATION
SALES CHARGES
PAID TO FDC
EXCHANGE FEES $ 1,620
WITHHELD BY
FSC
EXPENSE $ 39
REDUCTIONS
CUSTODIAN
CREDITS
FMR 58,361
REIMBURSEMEN
T
$ 58,400
STATEMENT OF CHANGES IN NET ASSETS
INCREASE MARCH 3, 1997
(DECREASE) IN (COMMENCEMENT
NET ASSETS OF OPERATIONS) TO
AUGUST 31, 1997
(UNAUDITED)
OPERATIONS $ (15,133)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 171,637
GAIN (LOSS)
CHANGE IN NET 393,325
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 549,829
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
SHARE 7,729,625
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
COST OF SHARES (3,951,442)
REDEEMED
REDEMPTION 10,719
FEES
NET INCREASE 3,788,902
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 4,338,731
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF -
PERIOD
END OF PERIOD $ 4,338,731
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$15,133)
OTHER
INFORMATION
SHARES
SOLD 710,250
REDEEMED (344,409)
NET INCREASE 365,841
(DECREASE)
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
MARCH 3, 1997
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31, 1997
SELECTED (UNAUDITED)
PER-SHARE
DATA
NET ASSET VALUE, $ 10.00
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.05)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 1.87
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.82
INVESTMENT
OPERATIONS
REDEMPTION FEES .04
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 11.86
END OF PERIOD
TOTAL RETURN B, C 18.60%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 4,339
OF PERIOD
(000 OMITTED)
RATIO OF 2.50% A,
EXPENSES TO E
AVERAGE NET
ASSETS
RATIO OF NET (.92)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 128% A
TURNOVER RATE
AVERAGE $ .0194
COMMISSION
RATE F
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIOD
SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED.
NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE FOR SECURITY TRADES
ON WHICH COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO PERIOD AND
FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
CONSTRUCTION AND HOUSING PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
CONSTRUCTION AND HOUSING 21.78% 33.88% 136.90% 212.56%
CONSTRUCTION AND HOUSING 18.13% 29.86% 129.79% 203.18%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
CONSTRUCTION AND HOUSING 33.88% 18.83% 12.07%
CONSTRUCTION AND HOUSING 29.86% 18.10% 11.73%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 123925 S00000000000001
Construction & Housing S&P 500
00511 SP001
1987/08/31 9700.00 10000.00
1987/09/30 8954.89 9781.00
1987/10/31 6109.92 7674.17
1987/11/30 5662.85 7041.82
1987/12/31 6383.55 7577.70
1988/01/31 6610.55 7896.72
1988/02/29 7229.65 8264.71
1988/03/31 7518.56 8009.33
1988/04/30 7738.68 8098.24
1988/05/31 7690.53 8168.69
1988/06/30 8144.53 8543.63
1988/07/31 8061.98 8511.17
1988/08/31 7649.25 8221.79
1988/09/30 7883.13 8572.04
1988/10/31 7938.16 8810.34
1988/11/30 7841.86 8684.35
1988/12/31 8246.83 8836.33
1989/01/31 8749.43 9483.15
1989/02/28 8643.25 9247.02
1989/03/31 8862.69 9462.47
1989/04/30 9209.55 9953.57
1989/05/31 9535.18 10356.69
1989/06/30 9529.15 10297.66
1989/07/31 9915.78 11227.54
1989/08/31 10082.56 11447.60
1989/09/30 10264.50 11400.66
1989/10/31 9688.35 11136.17
1989/11/30 9832.39 11363.35
1989/12/31 9615.57 11636.07
1990/01/31 9009.04 10855.29
1990/02/28 9195.04 10995.32
1990/03/31 9712.61 11286.70
1990/04/30 9429.57 11004.53
1990/05/31 10302.97 12077.47
1990/06/30 10116.97 11995.34
1990/07/31 9589.29 11956.96
1990/08/31 8370.15 10876.05
1990/09/30 7505.84 10346.39
1990/10/31 7242.00 10301.90
1990/11/30 7942.55 10967.40
1990/12/31 8688.58 11273.39
1991/01/31 9452.82 11764.91
1991/02/28 10280.73 12606.10
1991/03/31 10535.48 12911.17
1991/04/30 10699.24 12942.15
1991/05/31 11763.71 13501.25
1991/06/30 11163.24 12882.90
1991/07/31 11454.37 13483.24
1991/08/31 11927.47 13802.79
1991/09/30 11663.63 13572.29
1991/10/31 11463.47 13754.15
1991/11/30 10890.30 13199.86
1991/12/31 12278.26 14709.93
1992/01/31 13191.03 14436.32
1992/02/29 13406.96 14623.99
1992/03/31 13397.14 14338.83
1992/04/30 13583.62 14760.39
1992/05/31 14015.47 14832.71
1992/06/30 13014.01 14611.71
1992/07/31 13249.73 15209.33
1992/08/31 12797.93 14897.53
1992/09/30 12964.90 15073.32
1992/10/31 13416.71 15126.08
1992/11/30 14192.64 15641.88
1992/12/31 14575.69 15834.28
1993/01/31 15184.65 15967.28
1993/02/28 15459.66 16184.44
1993/03/31 15823.07 16525.93
1993/04/30 15449.70 16126.00
1993/05/31 15616.78 16558.18
1993/06/30 15803.51 16606.20
1993/07/31 16344.06 16539.77
1993/08/31 17022.19 17166.63
1993/09/30 17572.56 17034.45
1993/10/31 18211.39 17387.06
1993/11/30 17926.37 17221.88
1993/12/31 19474.70 17430.27
1994/01/31 20110.94 18022.90
1994/02/28 19703.35 17534.48
1994/03/31 18550.18 16769.97
1994/04/30 18508.21 16984.63
1994/05/31 17528.83 17263.18
1994/06/30 17099.11 16840.23
1994/07/31 17588.79 17392.59
1994/08/31 18258.37 18105.69
1994/09/30 17239.02 17662.10
1994/10/31 16729.34 18059.49
1994/11/30 16049.78 17401.77
1994/12/31 16369.55 17659.84
1995/01/31 16441.39 18117.75
1995/02/28 17231.64 18823.80
1995/03/31 17539.53 19379.29
1995/04/30 17560.06 19950.01
1995/05/31 18422.15 20747.42
1995/06/30 18596.62 21229.38
1995/07/31 19458.72 21933.35
1995/08/31 19468.98 21988.40
1995/09/30 19356.09 22916.31
1995/10/31 19345.83 22834.50
1995/11/30 20536.34 23836.93
1995/12/31 21080.24 24296.03
1996/01/31 21037.33 25123.07
1996/02/29 20983.69 25355.96
1996/03/31 21702.46 25600.14
1996/04/30 21730.01 25977.48
1996/05/31 22445.03 26647.44
1996/06/30 22579.10 26748.97
1996/07/31 21629.46 25567.20
1996/08/31 22646.13 26106.41
1996/09/30 23875.08 27575.68
1996/10/31 23517.57 28336.22
1996/11/30 24590.10 30478.15
1996/12/31 23865.49 29874.38
1997/01/31 24103.13 31740.93
1997/02/28 24895.25 31989.78
1997/03/31 24182.34 30675.32
1997/04/30 24673.63 32506.64
1997/05/31 27034.93 34485.64
1997/06/30 27514.76 36030.60
1997/07/31 30406.40 38897.55
1997/08/29 30318.01 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 123928 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Construction and Housing Portfolio on
August 31, 1987, and the current maximum 3% sales charge was paid. As
the chart shows, by August 31, 1997, the value of the investment would
have grown to $30,318 - a 203.18% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
AMERICAN STANDARD COMPANIES, INC. 6.8
ELCOR CORP. 5.5
HOME DEPOT, INC. 5.2
CASE CORP. 5.0
MASCO CORP. 4.9
LOWE'S COMPANIES, INC. 4.8
LAFARGE CORP. 4.7
CHAMPION ENTERPRISES, INC. 4.6
STONE CONTAINER CORP. 3.8
SHERWIN-WILLIAMS CO. 3.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
CEMENT 7.5%
PAPER 7.3%
AIR-CONDITIONING EQUIPMENT 6.8%
PAVING, ROOFING & SIDING 5.5%
BUILDING MATERIALS - RETAIL 5.2%
ALL OTHERS 67.7%
ROW: 1, COL: 1, VALUE: 67.7
ROW: 1, COL: 2, VALUE: 5.5
ROW: 1, COL: 3, VALUE: 5.2
ROW: 1, COL: 4, VALUE: 6.8
ROW: 1, COL: 5, VALUE: 7.3
ROW: 1, COL: 6, VALUE: 7.5
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
CONSTRUCTION AND HOUSING PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Peter Saperstone,
Portfolio Manager of
Fidelity Select Construction and Housing Portfolio
Q. HOW DID THE FUND PERFORM, PETER?
A. For the six-month period that ended August 31, 1997, the fund
returned 21.78%. This topped the Standard & Poor's 500 Index, which
returned 14.78% in that time. For the 12 months that ended August 31,
1997, the fund returned 33.88% while the index returned 40.65%.
Q. WHAT FACTORS DROVE PERFORMANCE?
A. With a healthy U.S. economy serving as a backdrop, the sector
experienced strong housing activity. The interest-rate environment has
also been conducive to good performance. The Federal Reserve Board
raised interest rates by 0.25% in March, but deemed further hikes
unnecessary from that point through the end of August. Mortgage rates
continued to hover in the 7%-8% range, and housing-related companies
continued to report nice gains in both sales and earnings.
Q. WHICH PARTICULAR SEGMENTS OF THE INDUSTRY CONTRIBUTED THE MOST TO
PERFORMANCE?
A. I continued to focus on the repair/remodel segment of the group, as
well as cement and paper companies. While new housing starts remained
strong, many established homeowners continued to upgrade their
existing properties - remodeling either a kitchen or bathroom, for
example. Masco - one of the fund's larger positions and a leading
manufacturer of kitchen and bathroom products - benefited from this
trend. Cement manufacturers thrived due to a favorable supply/demand
situation, as increased public infrastructure building - such as
highway projects - easily satisfied industry supply. The fund's
cement-related positions included Medusa, Southdown and Lafarge. Paper
manufacturers - which either can be involved in lumber products or
home consumer goods, such as tissues or toilet paper - also prospered.
Examples of positions the fund held in this area included Fort James
and Georgia-Pacific.
Q. SINCE YOU TOOK OVER THE FUND, YOU'VE KEPT THE NUMBER OF POSITIONS
AT AROUND 35. WHAT'S BEHIND THIS STRATEGY?
A. My rationale is that fewer names allow me to condense my research
efforts and know those companies better. Also, directing more of the
fund's assets into its top positions reflects my confidence in those
stocks.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Home Depot did very well, as the company's low-cost approach and
superior price/value relationship continued to equate to strong stock
performance. Green Tree Financial was another positive contributor.
American Standard - a company specializing in plumbing and air
conditioning fixtures - was somewhat disappointing. Cool summers in
many pockets of the country hurt American Standard's air conditioning
business during the period.
Q. WHAT'S YOUR OUTLOOK?
A. As long as interest rates stay flat and inflation remains in check,
I think the sector will continue to perform well. Paper and cement
stocks have gotten a bit expensive after a nice run-up, and I may look
to reduce the fund's exposure in those areas. Companies specializing
in building materials and furniture may offer attractive opportunities
in the coming months.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: September 29, 1986
FUND NUMBER: 511
TRADING SYMBOL: FSHOX
SIZE: as of August 31, 1997, more than
$36 million
MANAGER: Peter Saperstone, since 1996;
manager, Fidelity Select Defense & Aerospace
Portfolio and Fidelity Select Air Transportation
Portfolio, since June 1997; equity analyst,
defense/aerospace and airlines, since 1997;
building materials and appliances, since
1996; textile, apparel and footwear
industries, since 1995; joined Fidelity in
1995
(checkmark)
CONSTRUCTION AND HOUSING PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.8%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 32.6%
AIR-CONDITIONING EQUIPMENT - 6.8%
American Standard Companies, Inc. (a) 55,500 $ 2,608,500 02971210
CEMENT - 7.5%
Lafarge Corp. 56,000 1,820,000 50586210
Medusa Corp. 12,100 568,700 58507230
St. Lawrence Cement, Inc. Class A 11,600 114,934 79106010
Southdown, Inc. 7,900 370,806 84129710
2,874,440
CONCRETE, GYPSUM, PLASTER - 1.6%
USG Corp. (a) 14,400 617,400 90329340
PAINT & VARNISH - 3.7%
Sherwin-Williams Co. 51,900 1,424,006 82434810
PAVING, ROOFING & SIDING - 5.5%
Elcor Corp. 67,900 2,100,656 28444310
PLUMBING SUPPLIES - WHOLESALE - 4.9%
Masco Corp. 42,100 1,870,819 57459910
STRUCTURAL METAL & WOOD PRODUCT - 2.6%
American Woodmark Corp. 63,500 992,188 03050610
TOTAL BUILDING MATERIALS 12,488,009
CONSTRUCTION - 2.5%
CONSTRUCTION - 1.3%
Walter Industries, Inc. (a) 27,600 501,975 93317Q10
MOBILE HOMES - 0.4%
Oakwood Homes Corp. 5,500 149,188 67409810
OPERATIVE BUILDERS - 0.2%
U.S. Home Corp. (a) 2,600 91,813 91192010
SINGLE-FAMILY HOUSING CONSTRUCTION - 0.6%
Beazer Homes USA, Inc. (a) 12,100 228,388 07556Q10
TOTAL CONSTRUCTION 971,364
CONSUMER ELECTRONICS - 1.8%
APPLIANCES - 1.8%
Maytag Co. 25,000 685,938 57859210
CREDIT & OTHER FINANCE - 1.1%
PERSONAL CREDIT INSTITUTIONS - 1.1%
Green Tree Financial Corp. 9,200 404,225 39350510
ENGINEERING - 0.4%
ARCHITECTS & ENGINEERS - 0.4%
Fluor Corp. 2,600 145,925 34386110
FEDERAL SPONSORED CREDIT - 2.2%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 2.2%
Federal National Mortgage Association 18,800 827,200 31358610
HOME FURNISHINGS - 7.5%
FURNITURE - 0.1%
Leggett & Platt, Inc. 1,200 51,600 52466010
FURNITURE STORES - 2.6%
Ethan Allen Interiors, Inc. 6,600 485,100 29760210
Heilig-Meyers Co. 33,500 502,500 42289310
987,600
NON-WOOD OFFICE FURNITURE - 3.9%
HON Industries, Inc. 7,000 409,500 43809210
Miller (Herman), Inc. 20,900 1,081,575 60054410
1,491,075
WOOD HOUSEHOLD FURNITURE - 0.9%
Ladd Furniture, Inc. 23,300 364,063 50573920
TOTAL HOME FURNISHINGS 2,894,338
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 6.5%
ACCESSORIES & MEASURING CUTTING TOOLS - 1.5%
Stanley Works 14,200 $ 604,388 85461610
FARM MACHINERY & EQUIPMENT - 5.0%
Case Corp. 28,400 1,904,575 14743R10
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 2,508,963
LEISURE DURABLES & TOYS - 4.6%
TRAVEL TRAILERS AND CAMPERS - 4.6%
Champion Enterprises, Inc. (a) 102,200 1,762,950 15849610
PAPER & FOREST PRODUCTS - 14.5%
CONVERTED PAPER & PAPERBOARD - 3.7%
Boise Cascade Corp. 35,500 1,404,469 09738310
PAPER - 7.3%
Georgia-Pacific Corp. 14,900 1,359,625 37329810
Stone Container Corp. 83,600 1,442,100 86158910
2,801,725
PAPER MILLS - 3.5%
Fort James Corp. 32,000 1,344,000 34747110
TOTAL PAPER & FOREST PRODUCTS 5,550,194
RETAIL & WHOLESALE, MISCELLANEOUS - 10.0%
BUILDING MATERIALS - RETAIL - 5.2%
Home Depot, Inc. 42,000 1,981,875 43707610
LUMBER & BUILDING MATERIALS - RETAIL - 4.8%
Lowe's Companies, Inc. 53,700 1,856,003 54866110
TOTAL RETAIL & WHOLESALE, MISCELLANEOUS 3,837,878
TEXTILES & APPAREL - 1.1%
CARPETS & RUGS - 0.5%
Mohawk Industries, Inc. (a) 7,400 191,475 60819010
SILK MILLS - 0.6%
Quaker Fabric Corp. (a) 10,800 248,400 74739910
TOTAL TEXTILES & APPAREL 439,875
TOTAL COMMON STOCKS
(Cost $30,686,232) 32,516,859
CASH EQUIVALENTS - 15.2%
Taxable Central Cash Fund (b)
(Cost $5,846,578) 5,846,578 5,846,578 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $36,532,810) $ 38,363,437
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $53,062,867 and $51,942,101, respectively (see Note 3 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 $29,541 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $36,567,571. Net unrealized appreciation
aggregated $1,795,866, of which $2,289,385 related to appreciated
investment securities and $493,519 related to depreciated investment
securities.
CONSTRUCTION AND HOUSING PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 38,363,437
SECURITIES, AT
VALUE
(COST
$36,532,810
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 662,899
INVESTMENTS
SOLD
RECEIVABLE FOR 187,200
FUND SHARES
SOLD
DIVIDENDS 11,588
RECEIVABLE
INTEREST 21,116
RECEIVABLE
REDEMPTION FEES 268
RECEIVABLE
OTHER 275
RECEIVABLES
TOTAL ASSETS 39,246,783
LIABILITIES
PAYABLE FOR $ 1,719,631
INVESTMENTS
PURCHASED
PAYABLE FOR 711,513
FUND SHARES
REDEEMED
ACCRUED 18,879
MANAGEMENT
FEE
OTHER PAYABLES 50,811
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 2,500,834
NET ASSETS $ 36,745,949
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 33,019,160
DISTRIBUTIONS IN (136,932)
EXCESS OF NET
INVESTMENT
INCOME
ACCUMULATED 2,033,094
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 1,830,627
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 36,745,949
1,530,297
SHARES
OUTSTANDING
NET ASSET $24.01
VALUE AND
REDEMPTION
PRICE PER
SHARE
($36,745,94
9 (DIVIDED BY)
1,530,297
SHARES)
MAXIMUM $24.75
OFFERING PRICE
PER SHARE
(100/97.00
OF $24.01)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 99,795
INCOME
DIVIDENDS
INTEREST 73,001
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$2,250)
TOTAL INCOME 172,796
EXPENSES
MANAGEMENT $ 74,081
FEE
TRANSFER AGENT 191,928
FEES
ACCOUNTING AND 30,475
SECURITY
LENDING FEES
NON-INTERESTED 64
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 11,529
AND EXPENSES
REGISTRATION FEES 16,412
AUDIT 10,724
LEGAL 113
MISCELLANEOUS 64
TOTAL EXPENSES 335,390
BEFORE
REDUCTIONS
EXPENSE (31,140) 304,250
REDUCTIONS
NET INVESTMENT (131,454)
INCOME (LOSS)
REALIZED AND 2,524,668
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 920,719
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 3,445,387
NET INCREASE $ 3,313,933
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 59,022
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 121
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 9,345
WITHHELD BY
FSC
EXPENSE $ 6,604
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENT
CUSTODIAN 241
CREDITS
FMR 24,295
REIMBURSEMEN
T
$ 31,140
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (131,454) $ 181,247
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 2,524,668 10,158,974
GAIN (LOSS)
CHANGE IN NET 920,719 (2,418,313)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 3,313,933 7,921,908
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (23,292) (112,820)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
IN EXCESS OF (5,478) -
NET INVESTMENT
INCOME
FROM NET (3,121,581) (3,093,992)
REALIZED GAIN
TOTAL (3,150,351) (3,206,812)
DISTRIBUTIONS
SHARE 52,131,354 137,278,007
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 3,127,504 3,185,271
OF
DISTRIBUTIONS
COST OF SHARES (49,332,645) (157,413,712)
REDEEMED
REDEMPTION 75,528 147,951
FEES
NET INCREASE 6,001,741 (16,802,483)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 6,165,323 (12,087,387)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 30,580,626 42,668,013
PERIOD
END OF PERIOD $ 36,745,949 $ 30,580,626
(INCLUDING
UNDER (OVER)
DISTRIBUTION
OF NET
INVESTMENT
INCOME OF
$(136,932)
AND
$68,372,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 2,288,045 6,539,196
ISSUED IN 165,477 160,947
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,313,356) (7,491,813)
NET INCREASE 140,166 (791,670)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 22.00 $ 19.56 $ 16.79 $ 19.82 $ 15.74 $ 13.84
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.12) .06 .07 (.02) .01 .02
INVESTMENT
INCOME (LOSS) D
NET REALIZED 4.25 3.38 3.55 (2.50) 4.26 1.87
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 4.13 3.44 3.62 (2.52) 4.27 1.89
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.02) (.02) (.07) - - -
INVESTMENT
INCOME
FROM NET (2.17) (1.03) (.81) (.52) (.22) (.01)
REALIZED GAIN
TOTAL (2.19) (1.05) (.88) (.52) (.22) (.01)
DISTRIBUTIONS
REDEMPTION FEES .07 .05 .03 .01 .03 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 24.01 $ 22.00 $ 19.56 $ 16.79 $ 19.82 $ 15.74
END OF PERIOD
TOTAL RETURN B, C 21.78% 18.64% 21.77% (12.54)% 27.45% 13.81%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 36,746 $ 30,581 $ 42,668 $ 16,863 $ 80,999 $ 31,111
OF PERIOD
(000 OMITTED)
RATIO OF 2.50% A, G 1.41% 1.43% 1.76% 1.67% 2.02% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 2.45% A, E 1.35% E 1.40% E 1.74% E 1.66% E 2.02% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (1.06)% A .27% .39% (.11)% .03% .20% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 426% A 270% 139% 45% 35% 60% A
TURNOVER RATE
AVERAGE $ .0305 $ .0410
COMMISSION
RATE F
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. G FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES
DURING THE PERIOD.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER (SEE NOTE
8 OF NOTES TO
FINANCIAL
STATEMENTS).
DEFENSE AND AEROSPACE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
DEFENSE AND AEROSPACE 30.03% 41.31% 247.52% 206.02%
DEFENSE AND AEROSPACE 26.13% 37.07% 237.10% 196.84%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
DEFENSE AND AEROSPACE 41.31% 28.29% 11.83%
DEFENSE AND AEROSPACE 37.07% 27.51% 11.49%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970923 140050 S00000000000001
Defense & Aerospace S&P 500
00067 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9505.15 9781.00
1987/10/31 7081.67 7674.17
1987/11/30 6716.32 7041.82
1987/12/31 6916.61 7577.70
1988/01/31 7361.61 7896.72
1988/02/29 7800.26 8264.71
1988/03/31 7781.19 8009.33
1988/04/30 7730.33 8098.24
1988/05/31 7437.90 8168.69
1988/06/30 7743.04 8543.63
1988/07/31 7590.47 8511.17
1988/08/31 7406.11 8221.79
1988/09/30 7628.61 8572.04
1988/10/31 7615.90 8810.34
1988/11/30 7278.97 8684.35
1988/12/31 7215.40 8836.33
1989/01/31 7501.47 9483.15
1989/02/28 7469.68 9247.02
1989/03/31 7622.26 9462.47
1989/04/30 7895.62 9953.57
1989/05/31 8035.47 10356.69
1989/06/30 7940.12 10297.66
1989/07/31 8455.05 11227.54
1989/08/31 8671.19 11447.60
1989/09/30 8512.26 11400.66
1989/10/31 8029.12 11136.17
1989/11/30 7723.97 11363.35
1989/12/31 7851.12 11636.07
1990/01/31 7406.11 10855.29
1990/02/28 7431.54 10995.32
1990/03/31 7889.26 11286.70
1990/04/30 7565.04 11004.53
1990/05/31 8124.47 12077.47
1990/06/30 8130.32 11995.34
1990/07/31 7804.08 11956.96
1990/08/31 7119.62 10876.05
1990/09/30 6889.34 10346.39
1990/10/31 6799.78 10301.90
1990/11/30 7164.40 10967.40
1990/12/31 7491.22 11273.39
1991/01/31 8152.40 11764.91
1991/02/28 8312.88 12606.10
1991/03/31 8954.80 12911.17
1991/04/30 8807.16 12942.15
1991/05/31 9217.99 13501.25
1991/06/30 8754.20 12882.90
1991/07/31 9134.54 13483.24
1991/08/31 9037.84 13802.79
1991/09/30 8825.11 13572.29
1991/10/31 9250.57 13754.15
1991/11/30 8831.56 13199.86
1991/12/31 9508.43 14709.93
1992/01/31 9476.20 14436.32
1992/02/29 9624.47 14623.99
1992/03/31 9431.07 14338.83
1992/04/30 9263.47 14760.39
1992/05/31 8799.33 14832.71
1992/06/30 8386.76 14611.71
1992/07/31 8709.08 15209.33
1992/08/31 8541.47 14897.53
1992/09/30 8663.95 15073.32
1992/10/31 8734.86 15126.08
1992/11/30 9037.84 15641.88
1992/12/31 9508.43 15834.28
1993/01/31 9792.07 15967.28
1993/02/28 9721.16 16184.44
1993/03/31 10236.87 16525.93
1993/04/30 10269.10 16126.00
1993/05/31 10584.98 16558.18
1993/06/30 11029.78 16606.20
1993/07/31 11481.03 16539.77
1993/08/31 11461.69 17166.63
1993/09/30 11758.22 17034.45
1993/10/31 12228.81 17387.06
1993/11/30 11867.81 17221.88
1993/12/31 12252.36 17430.27
1994/01/31 12835.80 18022.90
1994/02/28 12835.80 17534.48
1994/03/31 12319.42 16769.97
1994/04/30 12386.28 16984.63
1994/05/31 12427.12 17263.18
1994/06/30 12114.06 16840.23
1994/07/31 12291.00 17392.59
1994/08/31 12842.26 18105.69
1994/09/30 12195.72 17662.10
1994/10/31 12495.17 18059.49
1994/11/30 12005.17 17401.77
1994/12/31 12467.95 17659.84
1995/01/31 12461.14 18117.75
1995/02/28 13366.30 18823.80
1995/03/31 13937.97 19379.29
1995/04/30 14707.01 19950.01
1995/05/31 15612.16 20747.42
1995/06/30 16190.64 21229.38
1995/07/31 17082.18 21933.35
1995/08/31 17075.38 21988.40
1995/09/30 17551.77 22916.31
1995/10/31 16912.04 22834.50
1995/11/30 18130.25 23836.93
1995/12/31 18372.32 24296.03
1996/01/31 18701.05 25123.07
1996/02/29 19701.85 25355.96
1996/03/31 20154.76 25600.14
1996/04/30 21125.82 25977.48
1996/05/31 21915.78 26647.44
1996/06/30 21396.67 26748.97
1996/07/31 19952.17 25567.20
1996/08/31 21005.45 26106.41
1996/09/30 22036.16 27575.68
1996/10/31 21652.46 28336.22
1996/11/30 22833.64 30478.15
1996/12/31 22970.48 29874.38
1997/01/31 22473.52 31740.93
1997/02/28 22828.49 31989.78
1997/03/31 22678.61 30675.32
1997/04/30 23284.50 32506.64
1997/05/31 25148.22 34485.64
1997/06/30 25748.12 36030.60
1997/07/31 28131.77 38897.55
1997/08/29 29683.53 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970923 140053 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Defense and Aerospace Portfolio on August
31, 1987, and the current maximum 3% sales charge was paid. As the
chart shows, by August 31, 1997, the value of the investment would
have grown to $29,684 - a 196.84% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
REMEC, INC. 6.0
MAXWELL TECHNOLOGIES, INC. 5.7
GENERAL MOTORS CORP. CLASS H 5.1
LOCKHEED MARTIN CORP. 5.0
NORTHROP GRUMMAN CORP. 4.5
LORAL SPACE & COMMUNICATIONS LTD. 4.4
GULFSTREAM AEROSPACE CORP. 4.3
FAIRCHILD CORP. CLASS A 3.9
UNITED TECHNOLOGIES CORP. 3.8
BOEING CO. 3.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
AEROSPACE & DEFENSE 27.6%
DEFENSE ELECTRONICS 17.3%
ELECTRICAL EQUIPMENT 12.8%
ELECTRONICS 8.0%
AUTOS, TIRES, & ACCESSORIES 5.1%
ALL OTHERS 29.2%
ROW: 1, COL: 1, VALUE: 29.2
ROW: 1, COL: 2, VALUE: 5.1
ROW: 1, COL: 3, VALUE: 8.0
ROW: 1, COL: 4, VALUE: 12.8
ROW: 1, COL: 5, VALUE: 17.3
ROW: 1, COL: 6, VALUE: 27.6
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
DEFENSE AND AEROSPACE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Peter Saperstone became Portfolio Manager of
Fidelity Select Defense and Aerospace Portfolio on June 23, 1997.
Q. HOW DID THE FUND PERFORM, PETER?
A. For the six-month period that ended August 31, 1997, the fund
returned 30.03%. This topped the Standard & Poor's 500 Index, which
returned 14.78% in that same time span. For the 12 months that ended
August 31, 1997, the fund returned 41.31% while the index returned
40.65%.
Q. WHAT FACTORS FIGURED INTO THE FUND'S STRONG PERFORMANCE OVER THE
PAST SIX MONTHS?
A. The sector has prospered from a favorable aerospace cycle. As is
typical in an up cycle, aircraft manufacturers have experienced a
significant increase in new jet orders. To illustrate, the number of
plane deliveries for 1995 was approximately 480. We should see 650 new
deliveries this year and 1,100 by the year 2000. This surge in demand
not only has benefited the primary jet builders, but also those
smaller firms that make many of the planes' components.
Q. WHAT HAS DRIVEN THESE NEW ORDERS?
A. Global air traffic - a key industry measure that typically grows
around 5%-6% each year - has been one of the primary influences
spurring this activity. The industry also benefited from increased
replacement demand and from fleet expansion in emerging-market
countries. Government regulation has played a role here as well, as
some replacement demand has been driven by regulations to reduce
noise.
Q. DID YOU PLAY ANY PARTICULAR THEMES DURING THE PERIOD?
A. The fund has significant positions in satellite-related stocks,
with approximately 25% of its assets currently allocated to this
group. Demand for satellites has grown over the past few years, fueled
mostly by three satellite-dependent technologies: video programming,
mobile telecommunications and high-speed data transmission. As a
result, satellite manufacturers such as Lockheed-Martin and Loral have
benefited quite significantly. The service providers - such as
PanAmSat - that actually own the satellite and lease the transponder
space to one of the three technology sources also have benefited. I
think people are gradually beginning to understand the need for this
type of technology and, as a result, the satellite group is becoming a
more viable industry.
Q. THERE HAS BEEN A LOT OF CONSOLIDATION IN THE DEFENSE INDUSTRY OVER
THE PAST FEW YEARS. HAS THIS ACTIVITY FIZZLED?
A. When Lockheed-Martin acquired Northrop Grumman during the period -
both of which are positions in the fund - it signaled a probable end
to large-scale mergers in the industry. With the consolidation we've
seen in recent years - including McDonnell-Douglas/Boeing and
Raytheon/Hughes - the number of major defense firms has been reduced
from 20 five years ago to just three. These consolidations have been
positive for the sector, since the acquired company is typically
bought at a premium, and the acquiring company gains scale. We may see
a number of smaller acquisitions involving sub-contractors, though,
and that could translate into some interesting buying opportunities.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Most of the fund's satellite-related stocks performed well,
including Remec and PanAmSat. In terms of disappointments, I'd point
to Boeing. While the plane ordering cycle I mentioned earlier has
helped Boeing, the company has had some trouble translating volume
into profits.
Q. WHAT'S YOUR OUTLOOK?
A. All in all, I'm upbeat. I think the aerospace cycle we've seen thus
far has another one to two years left, and I'm very bullish on the
satellite group over the long-term. In terms of the fund, I like how
it's allocated currently and don't foresee any significant changes at
this time.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: May 8, 1984
FUND NUMBER: 067
TRADING SYMBOL: FSDAX
SIZE: as of August 31, 1997, more than
$61 million
MANAGER: Peter Saperstone, since June 1997;
manager, Fidelity Select Air Transportation
Portfolio, since June 1997; Fidelity Select
Construction and Housing Portfolio, since 1996;
equity analyst, defense/aerospace and airlines,
since 1997; building materials and appliances,
since 1996; textile, apparel and footwear
industries, since 1995; joined Fidelity in 1995
(checkmark)
DEFENSE AND AEROSPACE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.2%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 27.6%
AIRCRAFT - 13.0%
Boeing Co. 42,400 $ 2,308,150 09702310
Gulfstream Aerospace Corp. (a) 90,200 2,672,175 40273410
Lockheed Martin Corp. 30,200 3,131,363 53983010
8,111,688
AIRCRAFT & PARTS - 2.4%
Rohr Industries, Inc. 20,000 541,250 77542210
Sundstrand Corp. 15,700 926,300 86732310
1,467,550
AIRCRAFT ENGINES & PARTS - 7.6%
Doncasters PLC sponsored ADR 67,200 1,730,400 25769210
Sequa Corp. Class A (a) 12,500 640,625 81732010
United Technologies Corp. 30,000 2,341,875 91301710
4,712,900
AIRCRAFT EQUIPMENT - 3.9%
Fairchild Corp. Class A (a) 115,400 2,430,613 30369810
MISSILES & SPACE VEHICLES - 0.0%
Thiokol Corp. 300 23,888 88410310
ORDNANCE - 0.7%
Primex Technologies, Inc. 15,400 450,450 74159710
TOTAL AEROSPACE & DEFENSE 17,197,089
AIR TRANSPORTATION - 2.2%
AIR TRANSPORT, MAJOR NATIONAL - 2.2%
AMR Corp. (a) 9,000 906,750 00176510
Alaska Air Group, Inc. (a) 300 8,231 01165910
America West Airlines, Inc.
Class B (warrants) (a) 17,000 66,938 02365011
Continental Airlines, Inc. Class B (a) 10,700 391,888 21079530
1,373,807
AUTOS, TIRES, & ACCESSORIES - 5.1%
MOTOR VEHICLES & CAR BODIES - 5.1%
General Motors Corp.
Class H 50,000 3,178,125 37044250
BROADCASTING - 4.0%
COMMUNICATIONS SERVICES - 4.0%
APT Satellite Holdings Ltd.
sponsored ADR 18,900 281,138 00203R10
Asia Satellite Telecommunications
Holdings Ltd. sponsored ADR 8,800 253,000 04516X10
Asia Satellite Telecommunications
Holdings Ltd. 130,000 362,346 04699K22
PanAmSat Corp. (a) 43,800 1,593,225 69793310
2,489,709
BUILDING MATERIALS - 2.2%
ABRASIVES AND ASBESTOS - 2.2%
Hexcel Corp. 50,000 1,390,625 42829110
COMMUNICATIONS EQUIPMENT - 1.8%
DATACOMMUNICATIONS EQUIPMENT - 0.2%
IFR Systems, Inc. 6,200 158,875 44950710
TELEPHONE EQUIPMENT - 1.6%
Globalstar Telecommunications Ltd. 25,000 970,313 37999822
TOTAL COMMUNICATIONS EQUIPMENT 1,129,188
COMPUTERS & OFFICE EQUIPMENT - 1.1%
COMPUTERS - 1.1%
Evans & Sutherland Computer Corp. (a) 22,700 683,838 29909610
SHARES VALUE (NOTE 1)
DEFENSE ELECTRONICS - 17.3%
Litton Industries, Inc. 40,200 $ 2,004,975 53802110
Northrop Grumman Corp. 23,800 2,786,082 66680710
Raytheon Co. 40,000 2,200,000 75511110
Remec, Inc. (a) 112,300 3,748,013 75954310
10,739,070
ELECTRICAL EQUIPMENT - 12.8%
TV & RADIO COMMUNICATION EQUIPMENT - 12.8%
Globecomm Systems, Inc. 600 7,875 37956X10
Gilat Satellite Networks Ltd. (a) 42,300 1,374,750 40199892
Innova Corp. 100 2,200 45766A10
Loral Space & Communications Ltd. (a) 155,100 2,714,250 54399E22
Titan Corp. (a) 300,000 2,137,500 88826610
Viasat, Inc. 98,100 1,741,275 92552V10
7,977,850
ELECTRONIC INSTRUMENTS - 0.7%
ORBIT/FR, Inc. 15,900 433,275 68592910
ELECTRONICS - 8.0%
ELECTRONIC CAPACITORS - 5.7%
Maxwell Technologies, Inc. (a) 115,300 3,516,650 57776710
ELECTRONIC PARTS - WHOLESALE - 2.3%
Airport Systems International, Inc. (a)(c) 209,700 1,441,688
00949N10
TOTAL ELECTRONICS 4,958,338
SERVICES - 0.4%
BUSINESS SERVICES - 0.4%
Orion Network Systems, Inc. (a) 15,500 236,375 68628K10
SHIP BUILDING & REPAIR - 1.0%
SHIP BUILDERS - 1.0%
General Dynamics Corp. 7,500 597,188 36955010
TOTAL COMMON STOCKS
(Cost $44,870,997) 52,384,477
CASH EQUIVALENTS - 15.8%
Taxable Central Cash Fund (b)
(Cost $9,846,118) 9,846,118 9,846,118 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $54,717,115) $ 62,230,595
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements).
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $73,931,355 and $100,385,501, respectively (see Note 3 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 $30,121 for the
period (see Note 4 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 87.7%
Bermuda 5.9
United Kingdom 2.8
Israel 2.2
Hong Kong 1.4
100.0%
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Airport Systems
International, Inc. $ - $ 72,025 $ - $ 1,441,688
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $54,717,115. Net unrealized appreciation
aggregated $7,513,480, of which $7,819,274 related to appreciated
investment securities and $305,794 related to depreciated investment
securities.
DEFENSE AND AEROSPACE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 62,230,595
SECURITIES, AT
VALUE
(COST
$54,717,115
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,824,265
INVESTMENTS
SOLD
RECEIVABLE FOR 3,149,331
FUND SHARES
SOLD
DIVIDENDS 46,797
RECEIVABLE
INTEREST 23,480
RECEIVABLE
REDEMPTION FEES 177
RECEIVABLE
TOTAL ASSETS 67,274,645
LIABILITIES
PAYABLE FOR $ 5,351,004
INVESTMENTS
PURCHASED
PAYABLE FOR 603,182
FUND SHARES
REDEEMED
ACCRUED 25,352
MANAGEMENT
FEE
OTHER PAYABLES 68,020
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 6,047,558
NET ASSETS $ 61,227,087
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 47,593,948
ACCUMULATED (216,508)
NET INVESTMENT
(LOSS)
ACCUMULATED 6,336,167
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 7,513,480
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 61,227,087
1,649,875
SHARES
OUTSTANDING
NET ASSET $37.11
VALUE AND
REDEMPTION
PRICE PER
SHARE
($61,227,08
7 (DIVIDED BY)
1,649,875
SHARES)
MAXIMUM $38.26
OFFERING PRICE
PER SHARE
(100/97.00
OF $37.11)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 164,299
INCOME
DIVIDENDS
INTEREST 116,611
TOTAL INCOME 280,910
EXPENSES
MANAGEMENT $ 174,014
FEE
TRANSFER AGENT 270,183
FEES
ACCOUNTING FEES 30,712
AND EXPENSES
NON-INTERESTED 137
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 12,405
AND EXPENSES
REGISTRATION FEES 19,418
AUDIT 12,273
LEGAL 116
MISCELLANEOUS 97
TOTAL EXPENSES 519,355
BEFORE
REDUCTIONS
EXPENSE (21,937) 497,418
REDUCTIONS
NET INVESTMENT (216,508)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 6,427,158
SECURITIES
(INCLUDING
REALIZED GAIN
OF $28,439
ON SALES OF
INVESTMENTS IN
AFFILIATED
ISSUERS)
FOREIGN 443 6,427,601
CURRENCY
TRANSACTIONS
CHANGE IN NET 5,927,584
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 12,355,185
NET INCREASE $ 12,138,677
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 88,140
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 855
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 40,755
WITHHELD BY
FSC
EXCHANGE $ 17,860
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 4,077
CREDITS
$ 21,937
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (216,508) $ (173,302)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 6,427,601 4,765,161
GAIN (LOSS)
CHANGE IN NET 5,927,584 (539,108)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,138,677 4,052,751
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (885,294) (2,799,166)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 67,347,117 127,346,343
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 876,630 2,752,265
OF
DISTRIBUTIONS
COST OF SHARES (87,168,878) (89,310,784)
REDEEMED
REDEMPTION 116,295 112,916
FEES
NET INCREASE (18,828,836) 40,900,740
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (7,575,453) 42,154,325
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 68,802,540 26,648,215
PERIOD
END OF PERIOD $ 61,227,087 $ 68,802,540
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$216,508
AND $0
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 2,025,847 4,464,416
ISSUED IN 31,511 99,462
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,784,884) (3,174,693)
NET INCREASE (727,526) 1,389,185
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 28.94 $ 26.97 $ 19.64 $ 19.14 $ 15.08 $ 14.37
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.12) (.11) (.05) (.06) .07 (.02)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 8.62 4.18 9.09 .70 4.57 .69
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 8.50 4.07 9.04 .64 4.64 .67
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - - - (.10) -
INVESTMENT
INCOME
FROM NET (.39) (2.17) (1.82) (.27) (.62) -
REALIZED GAIN
TOTAL (.39) (2.17) (1.82) (.27) (.72) -
DISTRIBUTIONS
REDEMPTION FEES .06 .07 .11 .13 .14 .04
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 37.11 $ 28.94 $ 26.97 $ 19.64 $ 19.14 $ 15.08
END OF PERIOD
TOTAL RETURN B, C 30.03% 15.87% 47.40% 4.13% 32.04% 4.94%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 61,227 $ 68,803 $ 26,648 $ 4,985 $ 11,136 $ 1,463
OF PERIOD
(000 OMITTED)
RATIO OF 1.77% A 1.84% 1.77% G 2.49% G 2.53% G 2.48% A, G
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.70% A, E 1.81% E 1.75% E 2.49% 2.53% 2.48% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.74)% A (.39)% (.20)% (.32)% .40% (.14)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 268% A 219% 267% 146% 324% 87% A
TURNOVER RATE
AVERAGE $ .0367 $ .0335
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. G DURING
THE PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER.
ENVIRONMENTAL SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
AUGUST 31, 1997 MONTHS YEAR YEARS FUND
ENVIRONMENTAL SERVICES 9.93% 19.76% 68.30% 81.24%
ENVIRONMENTAL SERVICES 6.63% 16.17% 63.25% 75.81%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 248.05%
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 the
fund's returns to the performance of the S&P 500 - a widely
recognized, unmanaged index of common stocks. This benchmark includes
reinvestment of dividends and capital gains, if any, and excludes the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1997 YEAR YEARS FUND
ENVIRONMENTAL SERVICES 19.76% 10.97% 7.54%
ENVIRONMENTAL SERVICES 16.17% 10.30% 7.14%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 16.47%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970909 115127 S00000000000001
Environmental Services S&P 500
00516 SP001
1989/06/29 9700.00 10000.00
1989/06/30 9573.90 9761.13
1989/07/31 10485.70 10642.57
1989/08/31 10621.50 10851.16
1989/09/30 11193.80 10806.67
1989/10/31 10941.60 10555.96
1989/11/30 11009.50 10771.30
1989/12/31 11368.64 11029.81
1990/01/31 10358.96 10289.71
1990/02/28 10562.83 10422.44
1990/03/31 11019.13 10698.64
1990/04/30 11077.38 10431.17
1990/05/31 12106.48 11448.21
1990/06/30 12485.11 11370.37
1990/07/31 12407.45 11333.98
1990/08/31 10863.80 10309.39
1990/09/30 10281.29 9807.32
1990/10/31 10135.66 9765.15
1990/11/30 10485.17 10395.98
1990/12/31 11087.09 10686.03
1991/01/31 12057.94 11151.94
1991/02/28 12611.32 11949.30
1991/03/31 12611.32 12238.47
1991/04/30 12572.49 12267.85
1991/05/31 12601.62 12797.82
1991/06/30 11650.18 12211.68
1991/07/31 12019.11 12780.74
1991/08/31 12232.69 13083.64
1991/09/30 11941.44 12865.15
1991/10/31 11494.85 13037.54
1991/11/30 10863.80 12512.13
1991/12/31 11936.55 13943.51
1992/01/31 13005.20 13684.17
1992/02/29 13146.34 13862.06
1992/03/31 11835.74 13591.75
1992/04/30 11482.88 13991.35
1992/05/31 11190.52 14059.90
1992/06/30 10592.18 13850.41
1992/07/31 10665.31 14416.89
1992/08/31 10445.94 14121.35
1992/09/30 10571.29 14287.98
1992/10/31 11072.70 14337.99
1992/11/30 11762.13 14826.91
1992/12/31 11772.58 15009.28
1993/01/31 12002.39 15135.36
1993/02/28 11866.59 15341.20
1993/03/31 11574.10 15664.90
1993/04/30 11333.85 15285.81
1993/05/31 11584.55 15695.47
1993/06/30 11438.31 15740.99
1993/07/31 10957.79 15678.02
1993/08/31 11542.77 16272.22
1993/09/30 11553.21 16146.93
1993/10/31 11877.04 16481.17
1993/11/30 11354.74 16324.60
1993/12/31 11699.45 16522.12
1994/01/31 12691.82 17083.88
1994/02/28 12462.01 16620.90
1994/03/31 11333.85 15896.23
1994/04/30 11521.87 16099.70
1994/05/31 11490.54 16363.74
1994/06/30 10801.10 15962.83
1994/07/31 11030.91 16486.41
1994/08/31 11417.41 17162.35
1994/09/30 11344.29 16741.87
1994/10/31 10957.79 17118.56
1994/11/30 10341.48 16495.11
1994/12/31 10581.74 16739.73
1995/01/31 10592.18 17173.79
1995/02/28 10727.98 17843.05
1995/03/31 11239.83 18369.60
1995/04/30 12044.17 18910.59
1995/05/31 12232.20 19666.44
1995/06/30 12733.60 20123.29
1995/07/31 13214.12 20790.58
1995/08/31 13402.14 20842.77
1995/09/30 13872.21 21722.33
1995/10/31 12890.29 21644.78
1995/11/30 13339.47 22594.99
1995/12/31 13346.83 23030.17
1996/01/31 13809.34 23814.11
1996/02/29 13677.20 24034.87
1996/03/31 14282.87 24266.33
1996/04/30 14757.09 24624.01
1996/05/31 15893.10 25259.07
1996/06/30 15606.34 25355.30
1996/07/31 13808.58 24235.11
1996/08/31 14679.89 24746.22
1996/09/30 15209.29 26138.94
1996/10/31 15054.88 26859.85
1996/11/30 15462.96 28890.19
1996/12/31 15429.87 28317.87
1997/01/31 16389.42 30087.18
1997/02/28 15992.36 30323.06
1997/03/31 15087.97 29077.08
1997/04/30 14999.73 30812.99
1997/05/31 16025.45 32688.88
1997/06/30 16918.82 34153.34
1997/07/31 17348.96 36870.92
1997/08/29 17580.57 34805.42
IMATRL PRASUN SHR__CHT 19970831 19970909 115133 R00000000000102
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Select Environmental Services Portfolio on June
29, 1989, when the fund started, and the current maximum 3% sales
charge was paid. As the chart shows, by August 31, 1997, the value of
the investment would have grown to $17,581 - a 75.81% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $34,805 - a 248.05%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
USA WASTE SERVICES, INC. 13.5
WASTE MANAGEMENT, INC. 6.1
ALLIED WASTE INDUSTRIES, INC. 6.0
BROWNING-FERRIS INDUSTRIES, INC. 5.0
THERMO ELECTRON CORP. 4.8
LAIDLAW, INC. 3.7
OGDEN CORP. 3.6
SAFETY KLEEN CORP. 3.3
NEWPARK RESOURCES, INC. 3.0
NALCO CHEMICAL CO. 2.9
TOP INDUSTRIES AS OF AUGUST 31, 1997
REFUSE SYSTEMS 23.0%
SANITARY SERVICES 16.7%
POLLUTION EQUIPMENT & DESIGN 9.7%
MEASURING INSTRUMENTS 4.8%
BUS & TRAIN LINES 3.7%
ALL OTHERS 42.1%
ROW: 1, COL: 1, VALUE: 42.1
ROW: 1, COL: 2, VALUE: 3.7
ROW: 1, COL: 3, VALUE: 4.8
ROW: 1, COL: 4, VALUE: 9.699999999999999
ROW: 1, COL: 5, VALUE: 16.7
ROW: 1, COL: 6, VALUE: 23.0
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ENVIRONMENTAL SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Robert Ewing,
Portfolio Manager
of Fidelity Select
Environmental Services
Q. HOW DID THE FUND PERFORM, BOB?
A. We had a respectable six months given the environment in our
sector. For the six months that ended August 31, 1997, the fund was up
9.93%, compared to a gain of 14.78% in the Standard & Poor's 500 Index
over the same period. For the 12 months that ended August 31, 1997,
the fund gained 19.76%, while the S&P 500 gained 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE PERIOD?
A. The environmental services sector is performing better after going
through some rough years earlier in the decade. Unrealistic
expectations for solid waste disposal operations had led to many
companies being overvalued and to the creation of excess capacity. The
result was a number of years of disappointing earnings. What we are
now seeing is what I call a "rationalization of assets." Larger
companies are selling off unproductive assets and acquiring ones that
make more economic sense given their existing operations. Many of the
small- to medium-sized growth companies have added assets that will
make them more competitive as well. For example, we'll see more
vertical integration, which means that there will be more
opportunities for companies to collect solid waste and then transport
it to one of their own landfills instead of someone else's - at a
lower cost. Many of the stocks in the sector are now beginning to
reflect these improving fundamentals.
Q. WHAT STRATEGY HAVE YOU USED IN THIS ENVIRONMENT?
A. We still have significant though somewhat smaller positions in some
of the major players in the industry. At the same time, we've tried to
increase our holdings of some of the small- and medium-sized companies
that we think will benefit most from the synergies arising from the
consolidation process I spoke of earlier. There are two categories
that I am generally avoiding at this time: hazardous waste disposal
and consulting services. Hazardous waste disposal operations are
plagued by excess capacity and shrinking demand, as more companies
phase out processes that produce hazardous waste. Consulting has
suffered as a result of less activity by the federal government in
projects requiring environmental consulting. There's been more
competition for the work that's available in the private sector, with
a resulting decline in profit margins.
Q. WHAT STOCKS PERFORMED WELL DURING THE PERIOD?
A. United Waste Systems performed well, and we took profits in the
stock. The company has concentrated on developing its rural
operations, and has acquired a high percentage of the existing
landfills in its areas. Another stock that helped the fund was USA
Waste Services. Its strategy is to target urban areas, and the company
has been very successful at it. In August of this year, these two
profitable companies with complementary operations merged, and the new
company will use the USA Waste Systems name. Another stock that helped
us, Allied Waste Industries, acquired Laidlaw Environmental Services,
and that union looks to be beneficial, too.
Q. WHAT ABOUT DISAPPOINTMENTS?
A. One of the industry's major players, WMX Technologies, has not kept
pace with the market's expectations for it, and the stock struggled as
a result. We felt there were better opportunities elsewhere, so we
sold our position in that stock. Memtec, a manufacturer of commercial,
industrial and residential water filtration systems, had disappointing
earnings.
Q. WHAT'S YOUR OUTLOOK FOR THE ENVIRONMENTAL SERVICES SECTOR, BOB?
A. I think the industry has a more positive outlook now than at any
time in the last seven years or so. The merger and acquisition
activity that has been taking place is very constructive. For the most
part, companies and assets that should, for economic reasons, be
getting together are doing so. As a result, I think we'll see an
overall improvement in revenues and earnings going forward. Equity
prices should reflect that improvement.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 29, 1989
FUND NUMBER: 516
TRADING SYMBOL: FSLEX
SIZE: as of August 31, 1997, more than
$27 million
MANAGER: Robert Ewing, since 1996; manager,
Fidelity Select Energy Service, since 1996;
joined Fidelity in 1990
(checkmark)
ENVIRONMENTAL SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.4%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 2.1%
ORDNANCE - 2.1%
Harsco Corp. 13,200 $ 594,825 41586410
BUILDING MATERIALS - 0.4%
AIR CONDITIONING EQUIPMENT - 0.4%
Thermo Power Corp. 15,000 103,122 88358910
CHEMICALS & PLASTICS - 5.2%
ADHESIVES & SEALANTS - 2.9%
Nalco Chemical Co. 20,000 800,000 62985310
CHEMICALS - 2.3%
Betz Dearborn, Inc. 10,000 651,875 08777910
TOTAL CHEMICALS & PLASTICS 1,451,875
ENGINEERING - 2.1%
ARCHITECTS & ENGINEERS - 2.1%
Fluor Corp. 10,200 572,475 34386110
ELECTRONIC INSTRUMENTS - 7.9%
INDUSTRIAL MEASUREMENT INSTRUMENTS - 0.6%
TSI, Inc. 19,300 173,700 87287610
LAB & RESEARCH EQUIPMENT - 0.1%
Microfluidics International Corp. (a) 9,300 17,438 59507310
LAB ANALYTICAL INSTRUMENTS - 2.4%
Thermo Optek Corp. 15,000 258,750 88358210
Thermoquest Corp. (a) 25,000 418,750 88365510
677,500
MEASURING INSTRUMENTS - 4.8%
Thermo Electron Corp. (a) 32,950 1,326,238 88355610
TOTAL ELECTRONIC INSTRUMENTS 2,194,876
ENERGY SERVICES - 3.0%
OIL & GAS SERVICES - 3.0%
Newpark Resources, Inc. (a) 24,800 840,100 65171850
HOUSEHOLD PRODUCTS - 0.8%
MANUFACTURED PRODUCTS - 0.8%
Memtec Ltd. sponsored ADR 11,600 230,550 58626530
INDUSTRIAL MACHINERY & EQUIPMENT - 2.5%
SERVICE INDUSTRY MACHINERY, NEC - 1.5%
Ionics, Inc. (a) 6,000 256,500 46221810
Trojan Technologies Corp. (a) 10,300 149,184 89692410
405,684
SPECIAL INDUSTRIAL MACHINERY - 1.0%
Thermo Fibertek, Inc. (a) 23,275 282,209 88355W10
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 687,893
LEASING & RENTAL - 2.8%
AUTO RENTAL & LEASING - 2.8%
Republic Industries, Inc. (a) 31,280 768,315 76051610
MEDICAL EQUIPMENT & SUPPLIES - 1.7%
MEDICAL TECHNOLOGY - 0.9%
Thermedics, Inc. (a) 13,000 238,875 88390110
X-RAY & RELATED APPARATUS - 0.8%
Trex Medical Corp. 15,000 232,500 89531R10
TOTAL MEDICAL EQUIPMENT & SUPPLIES 471,375
SHARES VALUE (NOTE 1)
METALS & MINING - 2.5%
SECONDARY NONFERROUS SMELTING - 2.5%
IMCO Recycling, Inc. 35,800 $ 686,913 44968110
POLLUTION CONTROL - 51.6%
HAZARDOUS WASTE MANAGEMENT - 2.2%
Laidlaw Environmental Services, Inc. (a) 75,000 346,875 50730L10
Stericycle, Inc. 25,000 250,000 85891210
596,875
POLLUTION EQUIPMENT & DESIGN - 9.7%
Dames & Moore, Inc. 10,000 131,250 23571310
Ogden Corp. 43,400 1,006,338 67634610
Sevenson Environmental Services, Inc. 15,300 321,300 81806310
TETRA Technologies, Inc. (a) 6,900 144,900 88162F10
Thermo Instrument Systems, Inc. (a) 19,200 766,800 88355910
Waste Management International
PLC sponsored ADR (a) 42,000 341,250 94090610
2,711,838
REFUSE SYSTEMS - 23.0%
Allied Waste Industries, Inc. (a) 110,300 1,661,394 01958930
American Disposal Services, Inc. (a) 15,000 412,500 02538910
Browning-Ferris Industries, Inc. 39,500 1,380,031 11588510
Eastern Environmental Services, Inc. (a) 10,000 200,000 27636910
Superior Services, Inc. (a) 11,300 303,688 86831610
Waste Industries, Inc. 30,100 549,325 94105810
Waste Management, Inc. 53,000 1,696,000 94106K10
Wheelabrator Technologies, Inc. 12,800 200,800 96290130
6,403,738
SANITARY SERVICES - 16.7%
Safety Kleen Corp. 45,100 910,456 78648410
USA Waste Services, Inc. (a) 89,340 3,752,280 90291710
4,662,736
TOTAL POLLUTION CONTROL 14,375,187
RETAIL & WHOLESALE, MISCELLANEOUS - 2.3%
MISCELLANEOUS DURABLE GOODS - WHOLESALE - 2.3%
Philip Services Corp. (a) 35,719 640,896 71819M10
TRUCKING & FREIGHT - 3.7%
BUS & TRAIN LINES - 3.7%
Laidlaw, Inc. 71,000 1,038,588 50730K50
WATER - 1.8%
WATER SUPPLY - 1.8%
American Water Works, Inc. 25,000 518,750 03041110
TOTAL COMMON STOCKS
(Cost $22,071,734) 25,175,740
CASH EQUIVALENTS - 9.6%
Taxable Central Cash Fund (b)
(Cost $2,674,652) 2,674,652 2,674,652 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $24,746,386) $ 27,850,392
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $4,143,989 and $12,236,870, respectively (see Note 3 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 $1,564 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $24,792,864. Net unrealized appreciation
aggregated $3,057,528, of which $4,109,046 related to appreciated
investment securities and $1,051,518 related to depreciated investment
securities.
At February 28, 1997, the fund had a capital loss carryforward of
approximately $797,000, which will expire on February 28, 2005.
ENVIRONMENTAL SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 27,850,392
SECURITIES, AT
VALUE
(COST
$24,746,386
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 96,292
FUND SHARES
SOLD
DIVIDENDS 11,216
RECEIVABLE
INTEREST 13,816
RECEIVABLE
REDEMPTION FEES 59
RECEIVABLE
OTHER 10,141
RECEIVABLES
TOTAL ASSETS 27,981,916
LIABILITIES
PAYABLE TO $ 28,189
CUSTODIAN
BANK
PAYABLE FOR 11,400
INVESTMENTS
PURCHASED
PAYABLE FOR 101,582
FUND SHARES
REDEEMED
ACCRUED 13,795
MANAGEMENT
FEE
OTHER PAYABLES 47,913
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 202,879
NET ASSETS $ 27,779,037
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 27,374,029
ACCUMULATED (113,430)
NET INVESTMENT
(LOSS)
ACCUMULATED (2,585,280)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 3,103,718
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 27,779,037
1,742,349
SHARES
OUTSTANDING
NET ASSET $15.94
VALUE AND
REDEMPTION
PRICE PER
SHARE
($27,779,03
7 (DIVIDED BY)
1,742,349
SHARES)
MAXIMUM $16.43
OFFERING PRICE
PER SHARE
(100/97.00
OF $15.94)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 143,824
INCOME
DIVIDENDS
INTEREST 59,134
TOTAL INCOME 202,958
EXPENSES
MANAGEMENT $ 80,643
FEE
TRANSFER AGENT 169,110
FEES
ACCOUNTING FEES 30,312
AND EXPENSES
NON-INTERESTED 62
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 6,097
AND EXPENSES
REGISTRATION FEES 17,775
AUDIT 9,695
LEGAL 149
MISCELLANEOUS 3,264
TOTAL EXPENSES 317,107
BEFORE
REDUCTIONS
EXPENSE (719) 316,388
REDUCTIONS
NET INVESTMENT (113,430)
INCOME (LOSS)
REALIZED AND (1,739,049)
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 4,255,371
SECURITIES
ASSETS AND (354) 4,255,017
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 2,515,968
NET INCREASE $ 2,402,538
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 17,578
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 4,409
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 5,783
WITHHELD BY
FSC
EXPENSE $ 719
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (113,430) $ (244,407)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (1,739,049) (600,025)
GAIN (LOSS)
CHANGE IN NET 4,255,017 (1,589,539)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 2,402,538 (2,433,971)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (48,255)
SHAREHOLDERS
IN EXCESS OF
NET REALIZED
GAIN
SHARE 4,849,616 138,035,351
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT - 47,653
OF
DISTRIBUTIONS
COST OF SHARES (12,018,382) (131,078,192)
REDEEMED
REDEMPTION 19,828 415,631
FEES
NET INCREASE (7,148,938) 7,420,443
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (4,746,400) 4,938,217
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 32,525,437 27,587,220
PERIOD
END OF PERIOD $ 27,779,037 $ 32,525,437
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$113,430
AND 0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 325,375 9,698,891
ISSUED IN - 3,673
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (825,504) (9,681,633)
NET INCREASE (500,129) 20,931
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 14.50 $ 12.42 $ 10.27 $ 11.93 $ 11.36 $ 11.39
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.06) (.08) (.17) (.14) (.11) (.06)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 1.49 2.04 G 2.95 (1.53) .67 .42
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.43 1.96 2.78 (1.67) .56 .36
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - (.65) - - (.39)
REALIZED GAIN
IN EXCESS OF - (.02) - - - -
NET REALIZED
GAIN
REDEMPTION FEES .01 .14 .02 .01 .01 -
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 15.94 $ 14.50 $ 12.42 $ 10.27 $ 11.93 $ 11.36
END OF PERIOD
TOTAL RETURN B, C 9.93% 16.93% 27.49% (13.91)% 5.02% 3.34%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 27,779 $ 32,525 $ 27,587 $ 31,270 $ 65,956 $ 65,913
OF PERIOD
(000 OMITTED)
RATIO OF 2.34% A 2.18% 2.36% 2.04% 2.07% 1.99% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 2.33% A, E 2.11% E 2.32% E 2.01% E 2.03% E 1.99% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.84)% A (.59)% (1.43)% (1.32)% (1.02)% (.70)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 33% A 252% 138% 82% 191% 176% A
TURNOVER RATE
AVERAGE $ .0330 $ .0348
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. G THE
AMOUNT SHOWN FOR
A SHARE
OUTSTANDING DOES
NOT CORRESPOND
WITH THE
AGGREGATE NET LOSS
ON INVESTMENTS
FOR THE PERIOD DUE
TO THE TIMING OF
SALES AND
REPURCHASES OF
FUND SHARES IN
RELATION TO
FLUCTUATING MARKET
VALUES OF THE
INVESTMENTS OF
THE FUND.
INDUSTRIAL EQUIPMENT PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
INDUSTRIAL EQUIPMENT 22.56% 42.16% 226.02% 194.44%
INDUSTRIAL EQUIPMENT 18.89% 37.90% 216.24% 185.61%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
INDUSTRIAL EQUIPMENT 42.16% 26.66% 11.40%
INDUSTRIAL EQUIPMENT 37.90% 25.89% 11.06%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A SECTOR
THAT IS ABOUT TO EXPERIENCE RAPID GROWTH YOU MAY
HAVE THE POTENTIAL FOR ABOVE-AVERAGE GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115542 S00000000000001
Industrial Equipment S&P 500
00510 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9927.13 9781.00
1987/10/31 6032.44 7674.17
1987/11/30 5758.54 7041.82
1987/12/31 6444.49 7577.70
1988/01/31 6327.94 7896.72
1988/02/29 6903.83 8264.71
1988/03/31 7006.67 8009.33
1988/04/30 7212.34 8098.24
1988/05/31 7171.21 8168.69
1988/06/30 7678.54 8543.63
1988/07/31 7274.05 8511.17
1988/08/31 6615.89 8221.79
1988/09/30 6739.29 8572.04
1988/10/31 6629.60 8810.34
1988/11/30 6417.07 8684.35
1988/12/31 6759.86 8836.33
1989/01/31 7253.48 9483.15
1989/02/28 6965.53 9247.02
1989/03/31 7068.37 9462.47
1989/04/30 7575.70 9953.57
1989/05/31 7987.05 10356.69
1989/06/30 7644.26 10297.66
1989/07/31 8131.03 11227.54
1989/08/31 8281.86 11447.60
1989/09/30 8165.31 11400.66
1989/10/31 7623.69 11136.17
1989/11/30 7836.23 11363.35
1989/12/31 7973.34 11636.07
1990/01/31 7705.96 10855.29
1990/02/28 8096.75 10995.32
1990/03/31 8576.66 11286.70
1990/04/30 8508.10 11004.53
1990/05/31 9296.52 12077.47
1990/06/30 9131.29 11995.34
1990/07/31 8958.74 11956.96
1990/08/31 7481.72 10876.05
1990/09/30 6467.13 10346.39
1990/10/31 6294.58 10301.90
1990/11/30 6501.64 10967.40
1990/12/31 6736.31 11273.39
1991/01/31 7454.11 11764.91
1991/02/28 8158.11 12606.10
1991/03/31 8089.09 12911.17
1991/04/30 8006.27 12942.15
1991/05/31 8344.46 13501.25
1991/06/30 8075.08 12882.90
1991/07/31 8144.15 13483.24
1991/08/31 8268.49 13802.79
1991/09/30 8461.91 13572.29
1991/10/31 8413.55 13754.15
1991/11/30 8012.91 13199.86
1991/12/31 8544.36 14709.93
1992/01/31 9310.98 14436.32
1992/02/29 9973.07 14623.99
1992/03/31 9680.36 14338.83
1992/04/30 9680.36 14760.39
1992/05/31 9757.02 14832.71
1992/06/30 9157.66 14611.71
1992/07/31 9241.29 15209.33
1992/08/31 8760.41 14897.53
1992/09/30 8941.61 15073.32
1992/10/31 8906.77 15126.08
1992/11/30 9331.89 15641.88
1992/12/31 9513.09 15834.28
1993/01/31 9959.13 15967.28
1993/02/28 10481.83 16184.44
1993/03/31 10670.00 16525.93
1993/04/30 11158.17 16126.00
1993/05/31 11716.08 16558.18
1993/06/30 11869.51 16606.20
1993/07/31 12036.88 16539.77
1993/08/31 12859.79 17166.63
1993/09/30 12713.34 17034.45
1993/10/31 13138.75 17387.06
1993/11/30 13124.80 17221.88
1993/12/31 13635.02 17430.27
1994/01/31 14276.16 18022.90
1994/02/28 14682.22 17534.48
1994/03/31 13834.48 16769.97
1994/04/30 13709.27 16984.63
1994/05/31 13429.05 17263.18
1994/06/30 12739.27 16840.23
1994/07/31 13342.83 17392.59
1994/08/31 14291.27 18105.69
1994/09/30 14334.38 17662.10
1994/10/31 14514.01 18059.49
1994/11/30 13809.86 17401.77
1994/12/31 14061.34 17659.84
1995/01/31 13982.31 18117.75
1995/02/28 14399.05 18823.80
1995/03/31 15591.78 19379.29
1995/04/30 16324.85 19950.01
1995/05/31 16655.52 20747.42
1995/06/30 17288.10 21229.38
1995/07/31 18912.67 21933.35
1995/08/31 18546.07 21988.40
1995/09/30 17697.83 22916.31
1995/10/31 17661.89 22834.50
1995/11/30 18265.72 23836.93
1995/12/31 17972.38 24296.03
1996/01/31 18694.42 25123.07
1996/02/29 19706.84 25355.96
1996/03/31 19848.10 25600.14
1996/04/30 20212.77 25977.48
1996/05/31 20359.65 26647.44
1996/06/30 20269.89 26748.97
1996/07/31 19258.03 25567.20
1996/08/31 20090.36 26106.41
1996/09/30 21045.11 27575.68
1996/10/31 20914.54 28336.22
1996/11/30 22611.86 30478.15
1996/12/31 22772.88 29874.38
1997/01/31 23585.87 31740.93
1997/02/28 23302.70 31989.78
1997/03/31 22361.82 30675.32
1997/04/30 23177.12 32506.64
1997/05/31 25235.55 34485.64
1997/06/30 26809.06 36030.60
1997/07/31 28738.84 38897.55
1997/08/29 28560.71 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115549 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Industrial Equipment Portfolio on August
31, 1987, and the current maximum 3% sales charge was paid. As the
chart shows, by August 31, 1997, the value of the investment would
have grown to $28,561 - a 185.61% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
APPLIED MATERIALS, INC. 4.6
PITNEY BOWES, INC. 3.0
COOPER INDUSTRIES, INC. 3.0
TYCO INTERNATIONAL LTD. 2.9
CASE CORP. 2.8
ROCKWELL INTERNATIONAL CORP. 2.8
EMERSON ELECTRIC CO. 2.7
GENERAL ELECTRIC CO. 2.7
INGERSOLL-RAND CO. 2.6
DOVER CORP. 2.3
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 54.1
ROW: 1, COL: 2, VALUE: 5.7
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 7.6
ROW: 1, COL: 5, VALUE: 10.5
ROW: 1, COL: 6, VALUE: 15.1
GENERAL INDUSTRIAL MACHINERY 15.1%
ELECTRICAL MACHINERY 10.5%
SEMICONDUCTOR CAPITAL
EQUIPMENT 7.6%
FARM MACHINERY & EQUIPMENT 7.0%
TV & RADIO COMMUNICATION
EQUIPMENT 5.7%
ALL OTHERS 54.1%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
INDUSTRIAL EQUIPMENT PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Simon Wolf became Portfolio Manager of Fidelity
Select Industrial Equipment Portfolio on August 12, 1997.
Q. HOW DID THE FUND PERFORM, SIMON?
A. For the six months that ended on August 31, 1997, the fund had a
total return of 22.56%. For the year that ended on August 31, 1997, it
returned 42.16%. For the same periods, the Standard & Poor's 500 Index
returned 14.78% and 40.65%, respectively.
Q. WHAT ACCOUNTED FOR THE STRONG PERFORMANCE?
A. The fund was helped by very strong construction in the
semiconductor industry, as companies involved in building and
supplying equipment for chip fabrication plants did well. In addition,
many larger capital-equipment companies, including farm equipment and
some construction companies, continued to perform well, due to the
amazing economic environment we've seen lately, with soaring
productivity and benign inflation. This environment has helped some of
the larger construction companies continue to improve their margins
above previous peaks.
Q. WHAT COMPANIES HELPED SUPPORT THIS STRONG PERFORMANCE?
A. Two portfolio holdings in particular were helped by the return to
investment in the semiconductor industry, including both plant
expansion and technology-enabling capacity. Applied Materials and
Teradyne, both of which develop, manufacture and market specialized
equipment for the manufacturing process of semiconductors, were strong
performers. The proliferation of outsourcing in networking and
telecommunications helped Sanmina. Other major contributors to
performance included: Cummins Engine Co., a designer and manufacturer
of diesel engines; Ingersoll-Rand, a manufacturer of industrial
machinery; Superior Telecom, which provides copper wire for the
telecommunications industry; and Pitney Bowes, Inc., a provider of
business equipment services and industrial financing.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The biggest disappointment was Rockwell International Corp.
Problems in developing its 56.6K speed modem and intense competition
from U.S. Robotics put pressure on Rockwell's stock.
Q. WHAT IS YOUR CURRENT STRATEGY?
A. Basically, we are looking for industries growing independently of
the economic cycle. As we go through the economic cycle, there is
always an industry that is just beginning a building cycle. Now, we
are seeing substantial capital investments, or build-outs, in the
satellite, aerospace and telecommunications industries. We are moving
some of the fund into smaller-cap companies, a little farther down in
the chain of supply. As orders come in, they tend first to benefit the
larger companies and then the smaller companies. We are looking at
these trends and trying to find smaller companies that can benefit by
providing a specialized component or technology that other companies
need.
Q. WHAT KINDS OF STOCKS ARE YOU LOOKING FOR IN MANAGING THE FUND?
A. We are looking for companies whose earnings outlooks are improving
dramatically due to changes or catalysts that would allow the firms to
accelerate their growth beyond what analysts would expect, based on
past performance. We also are looking for companies whose current
stock valuations versus their growth rates are compelling when
compared with the valuations and growth rates of comparable companies.
Q. WHAT IS YOUR OUTLOOK?
A. We always have to keep in mind that we are looking at the high
valuations in the market and an uncertain economic outlook. However,
we believe that, with the help of Fidelity's research department, we
can find good values that should help the fund continue to perform
well. In this context, we'll continue to look at smaller-cap companies
to tap undiscovered value.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: September 29, 1986
FUND NUMBER: 510
TRADING SYMBOL: FSCGX
SIZE: as of August 31, 1997, more than
$61 million
MANAGER: Simon Wolf, since August 1997;
research analyst, industrial and electrical
equipment industries, since 1997; joined
Fidelity in 1996
(checkmark)
INDUSTRIAL EQUIPMENT PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 9.8%
AIRCRAFT & PARTS - 1.7%
Sundstrand Corp. 17,300 $ 1,020,693 86732310
AIRCRAFT ENGINES & PARTS - 2.5%
AlliedSignal, Inc. 8,900 734,806 01951210
Kellstrom Industries, Inc. 10,000 153,750 48803510
United Technologies Corp. 8,100 632,306 91301710
1,520,862
AIRCRAFT EQUIPMENT - 1.7%
BE Aerospace, Inc. (a) 28,400 1,008,200 07330210
GUIDED MISSILES & SPACE VEHICLES - 2.8%
Rockwell International Corp. 27,900 1,674,000 77390310
ORDNANCE - 1.1%
Harsco Corp. 14,100 635,381 41586410
TOTAL AEROSPACE & DEFENSE 5,859,136
AUTOS, TIRES, & ACCESSORIES - 3.1%
AUTO & TRUCK PARTS - 3.1%
Cummins Engine Co., Inc. 8,100 623,194 23102110
Eaton Corp. 10,300 927,644 27805810
LucasVarity PLC sponsored ADR 10,000 316,875 54939510
1,867,713
MOTOR VEHICLES & CAR BODIES - 0.0%
Navistar International Corp. 500 12,406 63934E10
TOTAL AUTOS, TIRES, & ACCESSORIES 1,880,119
BUILDING MATERIALS - 2.2%
AIR-CONDITIONING EQUIPMENT - 1.1%
American Standard Companies,
Inc. (a) 14,300 672,100 02971210
GASKETS, HOSES, BELTS - 1.1%
Coltec Industries, Inc. (a) 29,000 648,875 19687910
TOTAL BUILDING MATERIALS 1,320,975
COMMUNICATIONS EQUIPMENT - 0.6%
DATACOMMUNICATIONS EQUIPMENT - 0.6%
Aspect Telecommunications Corp. (a) 6,500 143,000 04523710
IFR Systems, Inc. 7,300 187,063 44950710
330,063
COMPUTER SERVICES & SOFTWARE - 0.3%
CAD/CAM/CAE - 0.3%
JetFax, Inc. 20,000 197,500 47690910
COMPUTERS & OFFICE EQUIPMENT - 5.6%
COMPUTER PERIPHERALS - 1.5%
SCI Systems, Inc. (a) 22,600 888,463 78389010
OFFICE AUTOMATION - 4.1%
General Binding Corp. 20,600 638,600 36915410
Pitney Bowes, Inc. 23,600 1,802,450 72447910
2,441,050
TOTAL COMPUTERS & OFFICE EQUIPMENT 3,329,513
DEFENSE ELECTRONICS - 1.8%
Ducommun, Inc. (a) 25,000 931,250 26414710
Stanford Telecommunications, Inc. 5,100 126,225 85440210
1,057,475
SHARES VALUE (NOTE 1)
ELECTRICAL EQUIPMENT - 22.3%
ELECTRICAL MACHINERY - 10.5%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 22,300 $ 549,138 01390430
Emerson Electric Co. 30,000 1,640,625 29101110
General Electric Co. 25,500 1,593,750 36960410
General Signal Corp. 9,200 399,050 37083810
Honeywell, Inc. 19,800 1,368,675 43850610
Westinghouse Electric Corp. 28,600 736,450 96040210
6,287,688
ELECTRICAL, INDUSTRIAL APPARATUS - 3.3%
Baldor Electric Co. 35,900 1,094,950 05774110
Hubbell, Inc. Class B 20,000 917,500 44351020
2,012,450
MOTORS & GENERATORS - 1.5%
AMETEK, Inc. 40,000 920,000 03110010
RESIDENTIAL ELECTRIC LIGHTING - 0.7%
Holophane Corp. (a) 16,800 390,600 43645B10
TV & RADIO COMMUNICATION EQUIPMENT - 5.7%
Loral Space & Communications Ltd. (a) 41,538 726,915 54399E22
Mas Technology Ltd. 7,600 163,400 55263A10
Scientific-Atlanta, Inc. 39,200 852,600 80865510
Titan Corp. 123,900 882,788 88826610
Viasat, Inc. 43,700 775,675 92552V10
3,401,378
WIRING & LIGHTING - 0.6%
Chicago Miniature Lamp, Inc. (a) 11,300 369,369 16778110
TOTAL ELECTRICAL EQUIPMENT 13,381,485
ELECTRONIC INSTRUMENTS - 8.9%
ELECTRONIC EQUIPMENT - 1.2%
Teradyne, Inc. 12,500 696,094 88077010
LAB & RESEARCH EQUIPMENT - 0.1%
Newport Corp. 5,000 65,000 65182410
SEMICONDUCTOR CAPITAL EQUIPMENT - 7.6%
Applied Materials, Inc. (a) 29,500 2,784,063 03822210
KLA-Tencor Corp. 12,580 891,608 48248010
Novellus Systems, Inc. 7,600 871,150 67000810
4,546,821
TOTAL ELECTRONIC INSTRUMENTS 5,307,915
ELECTRONICS - 6.8%
CONNECTORS - 0.8%
Methode Electronics, Inc. Class A 400 9,500 59152020
Thomas & Betts Corp. 8,000 448,000 88431510
457,500
ELECTRONIC CAPACITORS - 0.1%
Maxwell Technologies, Inc. 1,800 54,900 57776710
ELECTRONICS & ELECTRONIC COMPONENTS - 5.0%
Advanced Energy Industries, Inc. (a) 10,000 315,000 00797310
Alpine Group, Inc. (a) 33,300 470,363 02082510
Sanmina Corp. (a) 16,050 1,271,963 80090710
Solectron Corp. (a) 22,600 946,375 83418210
3,003,701
SEMICONDUCTORS - 0.9%
Etec Systems, Inc. (a) 8,100 542,700 26922C10
TOTAL ELECTRONICS 4,058,801
ENERGY SERVICES - 0.5%
OIL & GAS SERVICES - 0.5%
Dresser Industries, Inc. 7,500 313,125 26159710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 23.8%
CONSTRUCTION EQUIPMENT - 1.4%
Caterpillar, Inc. 15,000 $ 870,938 14912310
FARM MACHINERY & EQUIPMENT - 7.0%
AGCO Corp. 30,900 1,004,250 00108410
Case Corp. 25,000 1,676,563 14743R10
Deere & Co. 15,500 868,000 24419910
Lindsay Manufacturing Co. 16,550 645,450 53555510
4,194,263
GENERAL INDUSTRIAL MACHINERY - 15.1%
Cooper Industries, Inc. 33,700 1,796,631 21666910
Dover Corp. 20,200 1,395,063 26000310
Harnischfeger Industries, Inc. 11,717 470,145 41334510
Illinois Tool Works, Inc. 25,500 1,233,563 45230810
Ingersoll-Rand Co. 26,300 1,581,288 45686610
Manitowoc Co., Inc. 5,250 189,656 56357110
Regal-Beloit Corp. 21,800 655,363 75875010
Tyco International Ltd. 21,833 1,712,526 90212410
9,034,235
PUMPING EQUIPMENT - 0.3%
IDEX Corp. 5,600 181,300 45167R10
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 14,280,736
IRON & STEEL - 1.6%
FABRICATED METAL PRODUCTS - 1.0%
Aeroquip Vickers, Inc. 10,600 592,275 00786910
IRON & STEEL FOUNDRIES - 0.6%
Steel of West Virginia, Inc. (a) 35,000 350,000 85815410
TOTAL IRON & STEEL 942,275
METALS & MINING - 4.1%
NONFERROUS ROLLING & DRAWING - 2.9%
Essex International, Inc. 9,300 357,469 29702510
Superior Telecom, Inc. (a) 36,000 1,361,250 86836510
1,718,719
NONFERROUS WIRE - 1.2%
AFC Cable Systems, Inc. (a) 13,600 408,000 00095010
Belden, Inc. 8,000 310,000 07745910
718,000
TOTAL METALS & MINING 2,436,719
PAPER & FOREST PRODUCTS - 1.5%
ENVELOPES - 1.5%
Mail-Well, Inc. (a) 33,000 921,938 56032120
PHOTOGRAPHIC EQUIPMENT - 1.7%
Imation Corp. (a) 38,400 1,039,200 45245A10
TOTAL COMMON STOCKS
(Cost $45,444,424) 56,656,975
CASH EQUIVALENTS - 5.4%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $3,239,371) 3,239,371 $ 3,239,371 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $48,683,795) $ 59,896,346
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $37,295,945 and $91,653,106, respectively (see Note 3 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 $20,998 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $48,701,740. Net unrealized appreciation
aggregated $11,194,606, of which $11,651,788 related to appreciated
investment securities and $457,182 related to depreciated investment
securities.
On October 26, 1990, the fund acquired substantially 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 $33,000
available to offset future realized capital gains in Industrial
Equipment Portfolio, to the extent provided by regulations.
INDUSTRIAL EQUIPMENT PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 59,896,346
SECURITIES, AT
VALUE
(COST
$48,683,795
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 2,784,081
INVESTMENTS
SOLD
RECEIVABLE FOR 65,212
FUND SHARES
SOLD
DIVIDENDS 62,064
RECEIVABLE
INTEREST 20,526
RECEIVABLE
REDEMPTION FEES 60
RECEIVABLE
OTHER 16,504
RECEIVABLES
TOTAL ASSETS 62,844,793
LIABILITIES
PAYABLE FOR $ 569,184
INVESTMENTS
PURCHASED
PAYABLE FOR 356,870
FUND SHARES
REDEEMED
ACCRUED 30,641
MANAGEMENT
FEE
OTHER PAYABLES 63,326
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 1,020,021
NET ASSETS $ 61,824,772
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 43,943,530
ACCUMULATED (81,948)
NET INVESTMENT
(LOSS)
ACCUMULATED 6,750,639
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 11,212,551
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 61,824,772
2,142,177
SHARES
OUTSTANDING
NET ASSET $28.86
VALUE AND
REDEMPTION
PRICE PER
SHARE
($61,824,77
2 (DIVIDED BY)
2,142,177
SHARES)
MAXIMUM $29.75
OFFERING PRICE
PER SHARE
(100/97.00
OF $28.86)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 309,155
INCOME
DIVIDENDS
INTEREST 153,117
TOTAL INCOME 462,272
EXPENSES
MANAGEMENT $ 205,478
FEE
TRANSFER AGENT 287,351
FEES
ACCOUNTING FEES 34,903
AND EXPENSES
NON-INTERESTED 172
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 8,566
AND EXPENSES
REGISTRATION FEES 16,054
AUDIT 10,764
LEGAL 318
MISCELLANEOUS 135
TOTAL EXPENSES 563,741
BEFORE
REDUCTIONS
EXPENSE (19,577) 544,164
REDUCTIONS
NET INVESTMENT (81,892)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 6,875,298
SECURITIES
FOREIGN (4,148) 6,871,150
CURRENCY
TRANSACTIONS
CHANGE IN NET 5,962,520
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 12,833,670
NET INCREASE $ 12,751,778
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 35,388
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 1,084
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 28,455
WITHHELD BY
FSC
EXPENSE $ 19,577
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (81,892) $ 227,943
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 6,871,150 20,831,090
GAIN (LOSS)
CHANGE IN NET 5,962,520 (7,537,624)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,751,778 13,521,409
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (59,949) (140,245)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (5,575,247) (13,222,285)
REALIZED GAIN
TOTAL (5,635,196) (13,362,530)
DISTRIBUTIONS
SHARE 16,590,368 90,579,551
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 5,555,038 13,206,101
OF
DISTRIBUTIONS
COST OF SHARES (70,360,065) (138,841,270)
REDEEMED
REDEMPTION 40,566 259,034
FEES
NET INCREASE (48,174,093) (34,796,584)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (41,057,511) (34,637,705)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 102,882,283 137,519,988
PERIOD
END OF PERIOD $ 61,824,772 $ 102,882,283
(INCLUDING
ACCUMULATE
D NET
INVESTMENT
(LOSS)/INCOM
E OF
$(81,948)
AND
$126,009,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 624,686 3,535,843
ISSUED IN 246,343 542,236
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,761,875) (5,521,656)
NET INCREASE (1,890,846) (1,443,577)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 25.51 $ 25.11 $ 20.04 $ 20.61 $ 15.04 $ 13.89
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.03) .06 .04 .01 - .02
INVESTMENT
INCOME (LOSS) D
NET REALIZED 5.24 4.15 7.10 (.44) 5.92 1.09
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.21 4.21 7.14 (.43) 5.92 1.11
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.02) (.04) (.05) (.01) (.01) -
INVESTMENT
INCOME
FROM NET (1.86) (3.84) (2.05) (.16) (.40) -
REALIZED GAIN
TOTAL (1.88) (3.88) (2.10) (.17) (.41) -
DISTRIBUTIONS
REDEMPTION FEES .02 .07 .03 .03 .06 .04
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 28.86 $ 25.51 $ 25.11 $ 20.04 $ 20.61 $ 15.04
END OF PERIOD
TOTAL RETURN B, C 22.56% 18.25% 36.86% (1.93)% 40.07% 8.28%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 61,825 $ 102,882 $ 137,520 $ 109,968 $ 206,012 $ 14,601
OF PERIOD
(000 OMITTED)
RATIO OF 1.63% A 1.51% 1.54% 1.80% 1.69% 2.49% A,
EXPENSES TO E
AVERAGE NET
ASSETS
RATIO OF 1.58% A, 1.44% F 1.53% F 1.78% F 1.68% F 2.49% A
EXPENSES TO F
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.24)% A .25% .19% .06% .01% .15% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 113% A 261% 115% 131% 95% 407% A
TURNOVER RATE
AVERAGE $ .0370 $ .0401
COMMISSION
RATE G
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E DURING
THE PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. F FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
INDUSTRIAL MATERIALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
INDUSTRIAL MATERIALS 8.33% 16.92% 101.06% 102.63%
INDUSTRIAL MATERIALS 5.08% 13.42% 95.03% 96.55%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
INDUSTRIAL MATERIALS 16.92% 14.99% 7.32%
INDUSTRIAL MATERIALS 13.42% 14.29% 6.99%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
Fidelity Select Industrial Materials Standard & Poor's 500
$36,619
$19,655
$
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Industrial Materials Portfolio on August
31, 1987, and the current maximum 3% sales charge was paid. As the
chart shows, by August 31, 1997, the value of the investment would
have grown to $19,655 - a 96.55% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
CYTEC INDUSTRIES, INC. 9.7
PECHINEY SA CLASS A 5.7
BOISE CASCADE CORP. 4.5
MINNESOTA MINING & MANUFACTURING CO. 4.4
RAYCHEM CORP. 4.2
KIMBERLY-CLARK CORP. 4.1
MEAD CORP. 4.1
ALUMINUM CO. OF AMERICA 3.3
WISCONSIN CENTRAL TRANSPORTATION CORP. 3.1
BOWATER, INC. 2.9
TOP INDUSTRIES AS OF AUGUST 31, 1997
CHEMICALS 21.6%
PAPER 6.0%
GOLD ORES 5.9%
PRIME NONFERROUS
SMELTING 5.8%
METAL ORES 5.7%
ALL OTHERS 55.0%
ROW: 1, COL: 1, VALUE: 55.0
ROW: 1, COL: 2, VALUE: 5.7
ROW: 1, COL: 3, VALUE: 5.8
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 6.0
ROW: 1, COL: 6, VALUE: 21.6
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
INDUSTRIAL MATERIALS PORTFOLIO
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: On August 18, 1997, James Catudal (right) became
Portfolio Manager of Fidelity Select Industrial Materials Portfolio.
The following is an interview with Doug Chase, who managed the fund
during most of the period covered by the report, and James Catudal,
who discusses his investment philosophy and outlook.
Q. DOUG, HOW DID THE FUND PERFORM?
D.C. The fund did not perform as well as I would have liked. For the
six- and 12-month periods that ended August 31, 1997, the fund
returned 8.33% and 16.92%, respectively. By comparison, the Standard &
Poor's 500 Index returned 14.78% and 40.65% for the same periods.
Q. WHAT ACCOUNTED FOR THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
D.C. Through most of the period, cyclical stocks such as those in this
sector continued to lag the overall stock market. International stocks
underperformed U.S. stocks, as Japan, Germany and Southeast Asia
struggled. For many industrial materials, including steel, non-ferrous
metals, and paper, the pricing outlook improved later in the period.
Q. WHERE DID YOU FIND THE BEST OPPORTUNITIES? WHAT STOCKS HELPED
PERFORMANCE?
D.C. The paper industry had strong performance. Prices had dropped to
low levels and the supply/demand scenario appeared attractive relative
to valuations. So I increased holdings significantly in a variety of
paper producers. Paper capacity was absorbed by the market, demand was
stronger than expected, prices started to improve, and sentiment
changed in the market. Then, when company valuations exceeded
fundamentals, I reduced the fund's weighting. Paper companies Champion
International Corp. and Georgia-Pacific performed strongly. Newsprint
companies, such as Bowater, also contributed to the fund's
performance. Bowater benefited from a strong increase in demand for
newsprint, reflecting growth in classified advertising as the U.S.
economy continued to grow. Cytec, the fund's top holding, performed
very well during the period.
Q. HOW DID EVENTS IN THE GOLD MARKET NEGATIVELY AFFECT THE FUND'S
PERFORMANCE?
D.C. Previously, I had increased the weighting in gold producers
significantly, because sentiment was at a 14-year low and gold was
priced cheaply, at around $320 per ounce. Normally, the time to buy
cyclical stocks such as gold is when they are out of favor and,
initially, this strategy appeared to work when the price of gold
increased to $360. However, central banks continued to sell gold, and
the threat of ongoing sell-offs by European central banks weighed on
the market more than I anticipated. The price of gold has since
stabilized at $320, but has not appreciated. As the U.S. dollar has
strengthened, its appreciation could hurt gold consumption. Newmont
Mining Corp. is representative of the general underperformance of
gold-related stocks during the period.
Q. TURNING TO YOU, JIM, WHAT'S YOUR INVESTMENT PHILOSOPHY AND OUTLOOK?
A. When adding a company to the fund, I focus on three factors: growth
prospects, the fundamentals of the underlying material and
management's ability to create shareholder value. I believe that
demand drives industrial material price increases, which leads to
higher earnings and stock prices. Capacity expansion in an industry
can depress material prices, especially if demand is low.
Specifically, demand has been strong for aluminum, industrial gases
and zinc, and companies in this sector have looked attractive.
Chemical and paper stocks also look relatively attractive. However,
I'm cautious in my outlook for industrial material stocks generally.
Demand usually weakens in the summer, and future order trends are not
apparent until the fall. In addition, the current economic slowdown in
Asia could reduce demand for industrial materials and depress prices.
If economic growth in the rest of the world continues and Asia's
economic growth improves, the fund could perform very well. No matter
what the outlook, I will continue to search for those companies that
have the potential to perform well relative to the sector.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: September 29, 1986
FUND NUMBER: 509
TRADING SYMBOL: FSDPX
SIZE: as of August 31, 1997, more than
$34 million
MANAGER: James Catudal, since August 1997;
analyst, North American non-ferrous metals
companies; joined Fidelity in 1997
(checkmark)
INDUSTRIAL MATERIALS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.8%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 2.2%
AIRCRAFT ENGINES & PARTS - 2.2%
AlliedSignal, Inc. 6,000 $ 495,375 01951210
Doncasters PLC sponsored ADR 10,000 257,500 25769210
752,875
BUILDING MATERIALS - 4.7%
CEMENT - 1.1%
Lafarge Corp. 12,000 390,000 50586210
METAL WORK - 0.0%
SIFCO Industries, Inc. 400 7,725 82654610
PAINT & VARNISH - 1.0%
Sherwin-Williams Co. 12,600 345,713 82434810
PLUMBING SUPPLIES - WHOLESALE - 2.6%
Masco Corp. 19,900 884,306 57459910
TOTAL BUILDING MATERIALS 1,627,744
CHEMICALS & PLASTICS - 28.2%
AGRICULTURAL CHEMICALS - 0.7%
FMC Corp. (a) 2,900 240,881 30249130
CHEMICALS - 21.6%
Cytec Industries, Inc. (a) 68,700 3,353,419 23282010
du Pont (E.I.) de Nemours & Co. 14,000 872,375 26353410
Monsanto Co. 19,400 852,388 61166210
Raychem Corp. 15,610 1,452,706 75460310
Union Carbide Corp. 9,000 461,813 90558110
Witco Corp. 11,000 517,000 97738510
7,509,701
INDUSTRIAL GASES - 3.2%
Air Products & Chemicals, Inc. 2,500 203,906 00915810
Praxair, Inc. 17,000 908,438 74005P10
1,112,344
ORGANIC CHEMICALS - 1.0%
Cambrex Corp. 7,000 340,813 13201110
PLASTICS & SYNTHETIC RESINS - 0.5%
Spartech Corp. 12,000 190,500 84722020
UNSUPPORTED PLASTICS FILM & SHEET - 1.2%
W.R. Grace & Co. 6,000 412,875 38391110
TOTAL CHEMICALS & PLASTICS 9,807,114
CONSUMER DURABLES - 4.4%
MANUFACTURING INDUSTRIES, NEC - 4.4%
Minnesota Mining & Manufacturing Co. 17,000 1,527,875 60405910
ELECTRONICS - 1.2%
ELECTRONIC CAPACITORS - 0.4%
Maxwell Technologies, Inc. 4,000 122,000 57776710
ELECTRONICS & ELECTRIC COMPONENTS - 0.8%
Alpine Group, Inc. 20,000 282,500 02082510
TOTAL ELECTRONICS 404,500
HOLDING COMPANIES - 0.8%
HOLDING COMPANY OFFICES, NEC - 0.8%
Norfolk Southern Corp. 3,000 294,000 65584410
IRON & STEEL - 0.6%
IRON & STEEL FOUNDRIES - 0.6%
Dofasco, Inc. 10,000 203,927 25690070
SHARES VALUE (NOTE 1)
METALS & MINING - 13.3%
METAL ORES - 5.7%
Pechiney SA Class A 45,954 $ 1,981,290 70599396
NONFERROUS ROLLING & DRAWING - 1.6%
Essex International, Inc. 7,000 269,063 29702510
Superior Telecom, Inc. 8,000 302,500 86836510
571,563
PRIME NONFERROUS SMELTING - 5.8%
Alcan Aluminium Ltd. 25,000 873,716 01371610
Aluminum Co. of America 14,000 1,151,500 02224910
2,025,216
SECONDARY NONFERROUS SMELTING - 0.2%
IMCO Recycling, Inc. 2,900 55,644 44968110
TOTAL METALS & MINING 4,633,713
PACKAGING & CONTAINERS - 5.1%
GLASS CONTAINERS - 2.7%
Owens-Illinois, Inc. 27,000 939,938 69076840
METAL CANS & CONTAINERS - 2.4%
Silgan Holdings, Inc. 20,000 820,000 82704810
TOTAL PACKAGING & CONTAINERS 1,759,938
PAPER & FOREST PRODUCTS - 18.1%
CONVERTED PAPER & PAPERBOARD - 4.5%
Boise Cascade Corp. 39,487 1,562,204 09738310
PAPER - 6.0%
Champion International Corp. 3,400 201,238 15852510
Georgia-Pacific Corp. 5,000 456,250 37329810
Kimberly-Clark Corp. 30,000 1,423,125 49436810
2,080,613
PAPER MILLS - 3.5%
Bowater, Inc. 20,000 1,023,750 10218310
Fort James Corp. 5,000 210,000 34747110
1,233,750
PAPERBOARD MILLS - 4.1%
Mead Corp. 20,000 1,418,750 58283410
TOTAL PAPER & FOREST PRODUCTS 6,295,317
PRECIOUS METALS - 5.9%
GOLD ORES - 5.9%
Breakwater Resources Ltd. 80,000 371,825 10690230
Golden Knight Resources, Inc. (a) 54,300 123,253 38109010
Kinross Gold Corp. (a) 29,100 126,864 49690210
Newmont Gold Co. 11,700 506,025 65163710
Newmont Mining Corp. 21,700 918,181 65163910
2,046,148
RAILROADS - 5.5%
CSX Corp. 8,900 508,966 12640810
Kansas City Southern Industries, Inc. 4,000 299,500 48517010
Wisconsin Central Transportation Corp. 35,000 1,085,000 97659210
1,893,466
TRUCKING & FREIGHT - 0.8%
TRUCKING, LOCAL & LONG DISTANCE - 0.4%
Heartland Express, Inc. 6,000 148,500 42234710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRUCKING & FREIGHT - CONTINUED
TRUCKING, LONG DISTANCE - 0.4%
USFreightways Corp. 5,000 $ 150,000 91690610
TOTAL TRUCKING & FREIGHT 298,500
TOTAL COMMON STOCKS
(Cost $28,639,207) 31,545,117
CASH EQUIVALENTS - 9.2%
Taxable Central Cash Fund (b)
(Cost $3,195,106) 3,195,106 3,195,106 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $31,834,313) $ 34,740,223
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $25,763,657 and $61,046,649, respectively (see Note 3 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 $15,145 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and the average daily loan balance during the periods for which the
loan was outstanding amounted to $2,443,000. The weighted average
interest rate paid was 5.8% (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 88.7%
France 5.7
Canada 4.9
Others (individually less than 1%) 0.7
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $31,903,840. Net unrealized appreciation
aggregated $2,836,383 of which $3,521,535 related to appreciated
investment securities and $685,152 related to depreciated investment
securities.
INDUSTRIAL MATERIALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 34,740,223
SECURITIES, AT
VALUE
(COST
$31,834,313
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 310,187
INVESTMENTS
SOLD
RECEIVABLE FOR 388,161
FUND SHARES
SOLD
DIVIDENDS 59,367
RECEIVABLE
INTEREST 9,427
RECEIVABLE
REDEMPTION FEES 68
RECEIVABLE
OTHER 3,942
RECEIVABLES
TOTAL ASSETS 35,511,375
LIABILITIES
PAYABLE TO $ 3,292
CUSTODIAN
BANK
PAYABLE FOR 633,708
INVESTMENTS
PURCHASED
PAYABLE FOR 337,458
FUND SHARES
REDEEMED
ACCRUED 16,639
MANAGEMENT
FEE
OTHER PAYABLES 49,793
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 1,040,890
NET ASSETS $ 34,470,485
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 28,991,517
DISTRIBUTIONS IN (33,494)
EXCESS OF NET
INVESTMENT
INCOME
ACCUMULATED 2,609,558
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 2,902,904
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 34,470,485
1,249,933
SHARES
OUTSTANDING
NET ASSET $27.58
VALUE AND
REDEMPTION
PRICE PER
SHARE
($34,470,48
5 (DIVIDED BY)
1,249,933
SHARES)
MAXIMUM $28.43
OFFERING PRICE
PER SHARE
(100/97.00
OF $27.58)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 205,811
INCOME
DIVIDENDS
INTEREST 88,961
TOTAL INCOME 294,772
EXPENSES
MANAGEMENT $ 102,515
FEE
TRANSFER AGENT 159,019
FEES
ACCOUNTING FEES 30,320
AND EXPENSES
NON-INTERESTED 95
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 9,639
AND EXPENSES
REGISTRATION FEES 16,506
AUDIT 13,127
LEGAL 155
INTEREST 390
MISCELLANEOUS 213
TOTAL EXPENSES 331,979
BEFORE
REDUCTIONS
EXPENSE (8,238) 323,741
REDUCTIONS
NET INVESTMENT (28,969)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 2,854,173
SECURITIES
FOREIGN (8,839) 2,845,334
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (504,539)
SECURITIES
ASSETS AND 4,385 (500,154)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 2,345,180
NET INCREASE $ 2,316,211
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 12,958
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 1,288
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 8,483
WITHHELD BY
FSC
EXPENSE $ 8,238
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (28,969) $ 220,365
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 2,845,334 8,999,452
GAIN (LOSS)
CHANGE IN NET (500,154) 1,201,543
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 2,316,211 10,421,360
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (32,754) (200,673)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
IN EXCESS OF (4,525) -
NET INVESTMENT
INCOME
FROM NET (2,485,229) (5,508,154)
REALIZED GAIN
TOTAL (2,522,508) (5,708,827)
DISTRIBUTIONS
SHARE 10,729,683 113,772,805
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 2,473,198 5,651,415
OF
DISTRIBUTIONS
COST OF SHARES (45,010,939) (144,145,096)
REDEEMED
REDEMPTION 22,970 131,891
FEES
NET INCREASE (31,785,088) (24,588,985)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (31,991,385) (19,876,452)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 66,461,870 86,338,322
PERIOD
END OF PERIOD $ 34,470,485 $ 66,461,870
(INCLUDING
UNDER (OVER)
DISTRIBUTION
OF
$(33,494)
AND
$67,759,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 405,131 4,147,616
ISSUED IN 105,332 212,018
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (1,663,316) (5,268,325)
NET INCREASE (1,152,853) (908,691)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 27.66 $ 26.07 $ 23.13 $ 21.67 $ 17.44 $ 17.12
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INVESTMENT (.02) .06 .12 .17 .15 .12
INCOME (LOSS) D
NET REALIZED 1.95 3.12 2.92 1.43 4.07 .19
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.93 3.18 3.04 1.60 4.22 .31
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.03) (.06) (.15) (.18) (.06) (.08)
INVESTMENT
INCOME
FROM NET (2.00) (1.57) - - - -
REALIZED GAIN
TOTAL (2.03) (1.63) (.15) (.18) (.06) (.08)
DISTRIBUTIONS
REDEMPTION FEES .02 .04 .05 .04 .07 .09
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 27.58 $ 27.66 $ 26.07 $ 23.13 $ 21.67 $ 17.44
END OF PERIOD
TOTAL RETURN B, C 8.33% 12.69% 13.38% 7.65% 24.66% 2.36%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 34,470 $ 66,462 $ 86,338 $ 183,454 $ 155,721 $ 25,041
OF PERIOD
(000 OMITTED)
RATIO OF 1.93% A 1.54% 1.64% 1.56% 2.10% 2.02% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.88% A, E 1.51% E 1.61% E 1.53% E 2.08% E 2.02% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.17)% A .23% .49% .77% .75% .86% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 148% A 105% 138% 139% 185% 273% A
TURNOVER RATE
AVERAGE $ .0197 $ .0242
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
PAPER AND FOREST PRODUCTS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
PAPER AND FOREST PRODUCTS 18.47% 25.92% 130.07% 122.50%
PAPER AND FOREST PRODUCTS 14.92% 22.14% 123.17% 115.83%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
PAPER AND FOREST PRODUCTS 25.92% 18.13% 8.33%
PAPER AND FOREST PRODUCTS 22.14% 17.42% 8.00%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970912 162814 S00000000000001
Paper & Forest S&P 500
00506 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9408.14 9781.00
1987/10/31 6615.46 7674.17
1987/11/30 6386.55 7041.82
1987/12/31 7149.53 7577.70
1988/01/31 6860.78 7896.72
1988/02/29 7507.32 8264.71
1988/03/31 7268.79 8009.33
1988/04/30 7350.39 8098.24
1988/05/31 7268.79 8168.69
1988/06/30 8022.03 8543.63
1988/07/31 7664.24 8511.17
1988/08/31 7287.62 8221.79
1988/09/30 7431.99 8572.04
1988/10/31 7268.79 8810.34
1988/11/30 7111.87 8684.35
1988/12/31 7633.60 8836.33
1989/01/31 7709.12 9483.15
1989/02/28 7482.56 9247.02
1989/03/31 7488.86 9462.47
1989/04/30 7759.46 9953.57
1989/05/31 7897.91 10356.69
1989/06/30 7394.46 10297.66
1989/07/31 8105.59 11227.54
1989/08/31 8684.56 11447.60
1989/09/30 8206.28 11400.66
1989/10/31 7834.98 11136.17
1989/11/30 7778.34 11363.35
1989/12/31 7944.93 11636.07
1990/01/31 7218.61 10855.29
1990/02/28 7288.69 10995.32
1990/03/31 7492.57 11286.70
1990/04/30 7008.36 11004.53
1990/05/31 7473.46 12077.47
1990/06/30 7295.07 11995.34
1990/07/31 7403.38 11956.96
1990/08/31 6517.78 10876.05
1990/09/30 5887.02 10346.39
1990/10/31 5702.26 10301.90
1990/11/30 6275.67 10967.40
1990/12/31 6744.65 11273.39
1991/01/31 7301.84 11764.91
1991/02/28 7651.71 12606.10
1991/03/31 7807.21 12911.17
1991/04/30 8189.47 12942.15
1991/05/31 9128.92 13501.25
1991/06/30 8895.68 12882.90
1991/07/31 8902.16 13483.24
1991/08/31 8947.51 13802.79
1991/09/30 8604.12 13572.29
1991/10/31 8928.07 13754.15
1991/11/30 8247.78 13199.86
1991/12/31 9089.44 14709.93
1992/01/31 9925.41 14436.32
1992/02/29 9971.85 14623.99
1992/03/31 10038.19 14338.83
1992/04/30 10197.43 14760.39
1992/05/31 9912.14 14832.71
1992/06/30 9846.29 14611.71
1992/07/31 9773.15 15209.33
1992/08/31 9380.90 14897.53
1992/09/30 9281.17 15073.32
1992/10/31 9733.26 15126.08
1992/11/30 10092.28 15641.88
1992/12/31 10185.17 15834.28
1993/01/31 10498.87 15967.28
1993/02/28 10732.48 16184.44
1993/03/31 10719.13 16525.93
1993/04/30 11206.74 16126.00
1993/05/31 11240.13 16558.18
1993/06/30 10999.70 16606.20
1993/07/31 10886.16 16539.77
1993/08/31 11180.02 17166.63
1993/09/30 10645.73 17034.45
1993/10/31 11059.81 17387.06
1993/11/30 11747.71 17221.88
1993/12/31 12074.96 17430.27
1994/01/31 13477.47 18022.90
1994/02/28 13096.79 17534.48
1994/03/31 11707.64 16769.97
1994/04/30 11694.55 16984.63
1994/05/31 12171.60 17263.18
1994/06/30 12048.93 16840.23
1994/07/31 13071.18 17392.59
1994/08/31 14529.59 18105.69
1994/09/30 14788.56 17662.10
1994/10/31 13868.54 18059.49
1994/11/30 13262.00 17401.77
1994/12/31 13782.16 17659.84
1995/01/31 13689.61 18117.75
1995/02/28 15049.32 18823.80
1995/03/31 15156.10 19379.29
1995/04/30 15218.77 19950.01
1995/05/31 15470.38 20747.42
1995/06/30 16872.21 21229.38
1995/07/31 17447.31 21933.35
1995/08/31 17432.94 21988.40
1995/09/30 17145.38 22916.31
1995/10/31 16893.77 22834.50
1995/11/30 17145.38 23836.93
1995/12/31 16802.49 24296.03
1996/01/31 17221.56 25123.07
1996/02/29 16430.86 25355.96
1996/03/31 17269.00 25600.14
1996/04/30 18024.06 25977.48
1996/05/31 17660.77 26647.44
1996/06/30 16669.99 26748.97
1996/07/31 16232.39 25567.20
1996/08/31 17140.61 26106.41
1996/09/30 17759.85 27575.68
1996/10/31 17726.83 28336.22
1996/11/30 17933.24 30478.15
1996/12/31 17989.74 29874.38
1997/01/31 18175.02 31740.93
1997/02/28 18217.13 31989.78
1997/03/31 17231.74 30675.32
1997/04/30 17747.46 32506.64
1997/05/31 19937.76 34485.64
1997/06/30 20093.59 36030.60
1997/07/31 21660.56 38897.55
1997/08/29 21582.64 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970912 162818 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Paper and Forest Products Portfolio on
August 31, 1987, and the current maximum 3% sales charge was paid. As
the chart shows, by August 31, 1997, the value of the investment would
have grown to $21,583 - a 115.83% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
FORT JAMES CORP. 10.8
CHESAPEAKE CORP. 7.9
BOISE CASCADE CORP. 6.0
GEORGIA-PACIFIC CORP. 5.1
MEAD CORP. 4.5
BUCKEYE CELLULOSE CORP. 3.9
BOWATER, INC. 3.9
FIBERMARK, INC. 3.9
KIMBERLY-CLARK CORP. 3.4
INTERNATIONAL PAPER CO. 3.4
TOP INDUSTRIES AS OF AUGUST 31, 1997
PAPER & FOREST PRODUCTS 83.9%
TOBACCO 2.7%
RETAIL & WHOLESALE,
MISCELLANEOUS 1.9%
PACKAGING & CONTAINERS 1.3%
METALS & MINING 0.9%
ALL OTHERS 9.3%
ROW: 1, COL: 1, VALUE: 8.300000000000001
ROW: 1, COL: 2, VALUE: 1.8
ROW: 1, COL: 3, VALUE: 1.5
ROW: 1, COL: 4, VALUE: 2.4
ROW: 1, COL: 5, VALUE: 3.2
ROW: 1, COL: 6, VALUE: 82.90000000000001
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
PAPER AND FOREST PRODUCTS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Larry Rakers,
Portfolio Manager of
Fidelity Select Paper and Forest Products Portfolio
Q. HOW DID THE FUND PERFORM, LARRY?
A. The fund returned 18.47% during the six months that ended August
31, 1997, compared to the 14.78% return of the Standard & Poor's 500
Index. For the 12 months that ended August 31, 1997, the fund
generated a return of 25.92%, compared to a 40.65% return by the S&P
500.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE DURING THE
PERIOD?
A. The paper market, which bottomed out in February and March, began
an upward cycle during the period, helping many paper stocks to
perform well. Paper companies are adding less capacity and demand is
growing, which helps boost prices. Demand generally follows the growth
in worldwide Gross Domestic Product, or GDP, and right now we have
reasonably strong economies throughout the world - all of which bodes
well for the current state of the paper market.
Q. WHAT DRIVES DEMAND IN THE PAPER MARKET?
A. As I said, demand for paper products is pretty consistent with GDP
growth. But, there is one other factor that drives demand - customer
panic. When consumers see the price of paper going up, they build
inventories. For example, if a buyer typically keeps three weeks of
inventory, but hears that prices are going up, he immediately wants
four weeks of inventory. If everyone builds inventory in front of a
price increase, then demand increases. Over the past few months, this
cycle started to work - a few price increases came down the pike
during a period of steady economic growth and it appears that we have
started to see consumers build inventory. All of these things drove
demand and pushed the paper market into an upswing.
Q. AT THE END OF THE PERIOD, FORT JAMES REPRESENTED ALMOST 11% OF THE
FUND'S INVESTMENTS. WHAT DID YOU FIND ATTRACTIVE ABOUT THIS STOCK?
A. Fort James is the end product of a merger between Fort Howard and
James River, two tissue companies. Management of the new company
promised substantial cost savings from the merger and, at the time the
deal was announced, I believed the individual stocks were undervalued.
The performance of the stocks was bound to improve on the cost-cutting
prospects alone. I bought the stocks to reap the rewards of cost
savings and multiple expansion - meaning that their price-to-earnings
ratios (PEs) could increase. Fort Howard and James River both
appreciated considerably before the merger was completed at the end of
August.
Q. WHAT OTHER STOCKS HELPED THE FUND'S PERFORMANCE?
A. I felt that Buckeye Cellulose, a specialty pulp producer, was
undervalued because the market didn't understand its business. The
company makes specialty pulp that is used in such consumer
applications as air filters and shampoo, rather than in paper
products. The market is starting to treat the company as more of a
specialty chemical company than a paper company by giving it a higher
P/E. In addition, the company recently has completed a few
acquisitions that should drive earnings and cash flow. Mead is another
company that has driven earnings and cash flow by making some key
acquisitions - helping to boost its share price during the period.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. Mercer International, a maker of pulp and linerboard, was flat
during the period. The company is working to upgrade its pulp facility
in East Germany, but has had problems finalizing certain aspects of
the deal. The uncertainty surrounding these assets held the company's
stock back during the period.
Q. WHAT'S YOUR SHORT-TERM OUTLOOK FOR THE PAPER AND FOREST PRODUCTS
MARKET?
A. The direction of the market is difficult to predict since it is
heavily tied to the growth of the economy. As long as the economy
stays reasonably strong, it appears that operating rates will continue
to improve and paper prices will continue to strengthen, which would
help paper stocks. If the economy slows, however, the stocks could
fall as a result of decreased demand.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 30, 1986
FUND NUMBER: 506
TRADING SYMBOL: FSPFX
SIZE: as of August 31, 1997, more than
$29 million
MANAGER: Larry Rakers, since 1996; manager,
Fidelity Select Energy Portfolio, since January
1997; Fidelity Select American Gold Portfolio,
1995-February 1997; Fidelity Select Precious
Metals and Minerals Portfolio, 1996-February
1997; joined Fidelity in 1993
(checkmark)
PAPER AND FOREST PRODUCTS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.7%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 86.1%
METALS & MINING - 0.9%
English China Clay PLC 74,000 $ 279,407 29321792
PACKAGING & CONTAINERS - 1.3%
Gaylord Container Corp. Class A (a) 25,100 236,881 36814510
Sonoco Products Co. 5,000 162,813 83549510
399,694
PAPER & FOREST PRODUCTS - 83.9%
Abitibi-Consolidated, Inc. 15,000 262,655 00392410
Alliance Forest Products, Inc. 25,000 591,785 01859J10
Alliance Forest Products, Inc. (c) 16,400 388,211 01859J93
American Pad & Paper Co. (a) 15,700 361,100 02881610
Assi Doman AB Free shares 3,000 90,718 04699G22
Boise Cascade Corp. 45,400 1,796,138 09738310
Bowater, Inc. 23,100 1,182,431 10218310
Buckeye Cellulose Corp. (a) 30,100 1,185,188 11815H10
Caraustar Industries, Inc. 5,000 179,688 14090910
Champion International Corp. 6,400 378,800 15852510
Chesapeake Corp. 69,300 2,382,188 16515910
Consolidated Papers, Inc. 7,700 449,006 20975910
Domtar, Inc. 39,400 326,500 25756110
Enso OY Class R 3,700 32,082 29399Q22
FiberMark, Inc. (a) 56,550 1,162,809 31564610
Fort James Corp. 77,462 3,253,404 34747110
Georgia-Pacific Corp. 16,700 1,523,875 37329810
International Paper Co. 19,400 1,023,350 46014610
Jefferson Smurfit Corp. (a) 10,000 194,375 47508710
Kimberly-Clark Corp. 21,760 1,032,240 49436810
Louisiana-Pacific Corp. 3,100 68,588 54634710
Mail-Well, Inc. (a) 27,900 779,454 56032120
Mead Corp. 19,200 1,362,000 58283410
Mercer International, Inc. (SBI) 63,600 659,850 58805610
Metsa-Serla Ltd. Class B 31,400 259,571 59299992
Stone Container Corp. 53,800 928,050 86158910
Svenska Cellulosa AB (SCA)
Class B Ord. 27,000 596,121 86958730
Tembec, Inc. Class A (a) 52,500 491,803 87992010
Triangle Pacific Corp. 5,000 157,500 89591210
Union Camp Corp. 10,000 593,125 90553010
UPM-Kymmene Corp. 3,200 75,538 91599K22
Wausau Paper Mills Co. 4,337 94,872 94331710
Weyerhaeuser Co. 7,600 438,900 96216610
Willamette Industries, Inc. 12,000 957,000 96913310
25,258,915
TOTAL BASIC INDUSTRIES 25,938,016
NONDURABLES - 2.7%
TOBACCO - 2.7%
Schweitzer-Mauduit International, Inc. 20,100 804,000 80854110
RETAIL & WHOLESALE - 1.9%
RETAIL & WHOLESALE, MISCELLANEOUS - 1.9%
Boise Cascade Office Products Corp. 5,000 105,313 09740310
IKON Office Solutions, Inc. 18,300 475,800 45171310
581,113
TOTAL COMMON STOCKS
(Cost $25,582,464) 27,323,129
CASH EQUIVALENTS - 9.3%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $2,788,960) 2,788,960 $ 2,788,960 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $28,371,424) $ 30,112,089
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $388,211 or 1.3%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $23,492,203 and $17,821,081, respectively (see Note 3 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 com-missions paid to these affiliated firms were $4,428 for the
period (see Note 4 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 86.6%
Canada 9.0
Sweden 2.3
Finland 1.2
Others (individually less than 1%) 0.9
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $28,418,085. Net unrealized appreciation
aggregated $1,694,004, of which $2,832,188 related to appreciated
investment securities and $1,138,184 related to depreciated investment
securities.
PAPER AND FOREST PRODUCTS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 30,112,089
SECURITIES, AT
VALUE
(COST
$28,371,424
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 122,846
INVESTMENTS
SOLD
RECEIVABLE FOR 126,708
FUND SHARES
SOLD
DIVIDENDS 14,050
RECEIVABLE
INTEREST 11,325
RECEIVABLE
REDEMPTION FEES 76
RECEIVABLE
OTHER 13,959
RECEIVABLES
TOTAL ASSETS 30,401,053
LIABILITIES
PAYABLE FOR $ 259,150
INVESTMENTS
PURCHASED
PAYABLE FOR 368,647
FUND SHARES
REDEEMED
ACCRUED 14,525
MANAGEMENT
FEE
OTHER PAYABLES 43,609
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 685,931
NET ASSETS $ 29,715,122
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 26,195,890
DISTRIBUTIONS IN (188,891)
EXCESS OF NET
INVESTMENT
INCOME
ACCUMULATED 1,967,456
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 1,740,667
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 29,715,122
1,191,937
SHARES
OUTSTANDING
NET ASSET $24.93
VALUE AND
REDEMPTION
PRICE PER
SHARE
($29,715,12
2 (DIVIDED BY)
1,191,937
SHARES)
MAXIMUM $25.70
OFFERING PRICE
PER SHARE
(100/97.00
OF $24.93)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 147,754
INCOME
DIVIDENDS
INTEREST 56,067
TOTAL INCOME 203,821
EXPENSES
MANAGEMENT $ 72,849
FEE
TRANSFER AGENT 123,324
FEES
ACCOUNTING FEES 30,310
AND EXPENSES
NON-INTERESTED 50
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 11,512
AND EXPENSES
REGISTRATION FEES 13,660
AUDIT 9,557
LEGAL 114
MISCELLANEOUS 97
TOTAL EXPENSES 261,473
BEFORE
REDUCTIONS
EXPENSE (3,497) 257,976
REDUCTIONS
NET INVESTMENT (54,155)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 2,090,997
SECURITIES
FOREIGN (646) 2,090,351
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 1,763,012
SECURITIES
ASSETS AND 20 1,763,032
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 3,853,383
NET INCREASE $ 3,799,228
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 52,840
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 913
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 10,800
WITHHELD BY
FSC
EXPENSE $ 3,445
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 52
CREDITS
$ 3,497
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (54,155) $ 12,943
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 2,090,351 1,735,212
GAIN (LOSS)
CHANGE IN NET 1,763,032 336,313
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 3,799,228 2,084,468
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (29,671)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
IN EXCESS OF (31,544) (84,325)
NET INVESTMENT
INCOME
FROM NET (402,189) (2,413,337)
REALIZED GAIN
TOTAL (433,733) (2,527,333)
DISTRIBUTIONS
SHARE 36,705,390 84,816,161
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 414,828 2,489,372
OF
DISTRIBUTIONS
COST OF SHARES (30,334,477) (94,819,778)
REDEEMED
REDEMPTION 80,372 170,585
FEES
NET INCREASE 6,866,113 (7,343,660)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 10,231,608 (7,786,525)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 19,483,514 27,270,039
PERIOD
END OF PERIOD $ 29,715,122 $ 19,483,514
(INCLUDING
DISTRIBUTIONS
IN EXCESS OF
NET
INVESTMENT
INCOME OF
$(188,891)
AND
$(45,703),
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 1,565,370 3,914,858
ISSUED IN 21,057 118,411
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (1,295,226) (4,444,689)
NET INCREASE 291,201 (411,420)
(DECREASE)
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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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 21.63 $ 20.78 $ 21.14 $ 19.61 $ 16.08 $ 15.37
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.05) .01 .08 .01 (.01) .06
INVESTMENT
INCOME (LOSS) D
NET REALIZED 3.82 2.08 1.83 2.53 3.38 .65
AND
UNREALIZED
GAIN
TOTAL FROM 3.77 2.09 1.91 2.54 3.37 .71
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.03) (.08) - (.01) (.09)
INVESTMENT
INCOME
IN EXCESS OF (.04) (.07) - - - -
NET INVESTMENT
INCOME
FROM NET (.51) (1.25) (2.27) (1.17) - -
REALIZED GAIN
TOTAL (.55) (1.35) (2.35) (1.17) (.01) (.09)
DISTRIBUTIONS
REDEMPTION FEES .08 .11 .08 .16 .17 .09
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 24.93 $ 21.63 $ 20.78 $ 21.14 $ 19.61 $ 16.08
END OF PERIOD
TOTAL RETURN B, C 18.47% 10.87% 9.18% 14.91% 22.03% 5.25%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 29,715 $ 19,484 $ 27,270 $ 94,219 $ 66,908 $ 25,098
OF PERIOD
(000 OMITTED)
RATIO OF 2.13% A 2.19% 1.91% 1.88% 2.08% 2.21% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 2.10% A, E 2.16% E 1.90% E 1.87% E 2.07% E 2.21% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.44)% A .04% .34% .05% (.08)% .49% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 160% A 180% 78% 209% 176% 222% A
TURNOVER RATE
AVERAGE $ .0299 $ .0306
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
TRANSPORTATION PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past one year, past five years
and past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
TRANSPORTATION 25.00% 32.43% 155.55% 273.43%
TRANSPORTATION 21.25% 28.45% 147.89% 262.23%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
TRANSPORTATION 32.43% 20.64% 14.08%
TRANSPORTATION 28.45% 19.91% 13.74%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970916 122520 S00000000000001
Transportation S&P 500
00512 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9172.01 9781.00
1987/10/31 6215.24 7674.17
1987/11/30 5853.19 7041.82
1987/12/31 6442.07 7577.70
1988/01/31 6764.17 7896.72
1988/02/29 7324.02 8264.71
1988/03/31 7546.42 8009.33
1988/04/30 7569.43 8098.24
1988/05/31 7523.42 8168.69
1988/06/30 8290.33 8543.63
1988/07/31 8182.96 8511.17
1988/08/31 7799.50 8221.79
1988/09/30 8313.34 8572.04
1988/10/31 8581.76 8810.34
1988/11/30 8658.45 8684.35
1988/12/31 8919.20 8836.33
1989/01/31 9686.11 9483.15
1989/02/28 9785.81 9247.02
1989/03/31 10084.90 9462.47
1989/04/30 10422.35 9953.57
1989/05/31 10867.16 10356.69
1989/06/30 10800.16 10297.66
1989/07/31 11454.72 11227.54
1989/08/31 12199.27 11447.60
1989/09/30 11962.00 11400.66
1989/10/31 11201.08 11136.17
1989/11/30 11299.26 11363.35
1989/12/31 11460.12 11636.07
1990/01/31 10740.44 10855.29
1990/02/28 11241.48 10995.32
1990/03/31 11578.54 11286.70
1990/04/30 11141.27 11004.53
1990/05/31 11551.21 12077.47
1990/06/30 11424.06 11995.34
1990/07/31 11386.10 11956.96
1990/08/31 9716.14 10876.05
1990/09/30 8463.67 10346.39
1990/10/31 8330.83 10301.90
1990/11/30 8672.41 10967.40
1990/12/31 8985.53 11273.39
1991/01/31 9754.09 11764.91
1991/02/28 10702.94 12606.10
1991/03/31 10712.42 12911.17
1991/04/30 10683.96 12942.15
1991/05/31 11528.43 13501.25
1991/06/30 11432.71 12882.90
1991/07/31 12127.62 13483.24
1991/08/31 12346.56 13802.79
1991/09/30 12118.10 13572.29
1991/10/31 13012.92 13754.15
1991/11/30 12203.77 13199.86
1991/12/31 13850.62 14709.93
1992/01/31 13974.37 14436.32
1992/02/29 14726.40 14623.99
1992/03/31 14374.18 14338.83
1992/04/30 14745.43 14760.39
1992/05/31 15050.05 14832.71
1992/06/30 14402.74 14611.71
1992/07/31 14612.16 15209.33
1992/08/31 14174.27 14897.53
1992/09/30 14735.91 15073.32
1992/10/31 15364.19 15126.08
1992/11/30 16477.95 15641.88
1992/12/31 17146.02 15834.28
1993/01/31 17913.90 15967.28
1993/02/28 18156.90 16184.44
1993/03/31 19371.89 16525.93
1993/04/30 19323.60 16126.00
1993/05/31 20045.43 16558.18
1993/06/30 20103.96 16606.20
1993/07/31 20103.96 16539.77
1993/08/31 20474.63 17166.63
1993/09/30 20523.40 17034.45
1993/10/31 20952.60 17387.06
1993/11/30 21069.65 17221.88
1993/12/31 22172.58 17430.27
1994/01/31 23144.50 18022.90
1994/02/28 23144.50 17534.48
1994/03/31 22525.03 16769.97
1994/04/30 22945.96 16984.63
1994/05/31 22577.09 17263.18
1994/06/30 22555.39 16840.23
1994/07/31 23314.83 17392.59
1994/08/31 24009.17 18105.69
1994/09/30 23369.07 17662.10
1994/10/31 23716.25 18059.49
1994/11/30 22295.01 17401.77
1994/12/31 23029.86 17659.84
1995/01/31 22874.65 18117.75
1995/02/28 24510.26 18823.80
1995/03/31 24832.61 19379.29
1995/04/30 25202.71 19950.01
1995/05/31 24450.57 20747.42
1995/06/30 24187.92 21229.38
1995/07/31 26265.26 21933.35
1995/08/31 26241.38 21988.40
1995/09/30 26002.61 22916.31
1995/10/31 25680.26 22834.50
1995/11/30 26563.73 23836.93
1995/12/31 26523.07 24296.03
1996/01/31 26927.23 25123.07
1996/02/29 27685.04 25355.96
1996/03/31 28354.43 25600.14
1996/04/30 29283.29 25977.48
1996/05/31 29321.39 26647.44
1996/06/30 29461.07 26748.97
1996/07/31 27327.69 25567.20
1996/08/31 27353.08 26106.41
1996/09/30 27480.07 27575.68
1996/10/31 27264.19 28336.22
1996/11/30 29194.40 30478.15
1996/12/31 29043.70 29874.38
1997/01/31 29252.27 31740.93
1997/02/28 28978.52 31989.78
1997/03/31 29864.95 30675.32
1997/04/30 31409.75 32506.64
1997/05/31 33544.40 34485.64
1997/06/30 34552.05 36030.60
1997/07/31 36965.13 38897.55
1997/08/29 36222.64 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970916 122524 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Transportation Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $36,223 - a 262.23% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
AIRBORNE FREIGHT CORP. 6.1
EATON CORP. 5.4
NORFOLK SOUTHERN CORP. 5.3
CSX CORP. 5.1
UNION PACIFIC CORP. 4.9
CNF TRANSPORTATION, INC. 4.3
UAL CORP. 4.1
AIR EXPRESS INTERNATIONAL CORP. 4.1
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. 3.9
AMR CORP. 3.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 32.5
ROW: 1, COL: 2, VALUE: 8.800000000000001
ROW: 1, COL: 3, VALUE: 10.6
ROW: 1, COL: 4, VALUE: 13.3
ROW: 1, COL: 5, VALUE: 15.1
ROW: 1, COL: 6, VALUE: 19.7
AIR TRANSPORT, MAJOR
NATIONAL 19.7%
RAILROADS 15.1%
AIR COURIER SERVICES 13.3%
AUTO & TRUCK PARTS 10.6%
FREIGHT FORWARDING 8.8%
ALL OTHERS 32.5%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
TRANSPORTATION PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Jean-Marc Berteaux,
Portfolio Manager
of Fidelity Select
Transportation Portfolio
Q. HOW DID THE FUND PERFORM, JEAN-MARC?
A. For the six months that ended August 31, 1997, the fund returned
25.00%, compared to the 14.78% return of the Standard & Poor's 500
Index. For the 12-month period that ended August 31, 1997, the fund
generated a return of 32.43%, while the S&P 500 returned 40.65%.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE S&P 500 INDEX DURING
THE LATEST SIX-MONTH PERIOD?
A. My stock selection strategy worked well for the fund. I invested in
companies that I believed would benefit from consolidation in the
industry and improving business fundamentals, as well as stocks that I
felt were undervalued relative to their peers and their earnings
potential. The overall economic climate also bolstered the fund's
performance. Transportation companies thrive in a solid,
moderate-growth environment because they can improve earnings by
quietly raising prices and eliminating excess capacity.
Q. ABOUT 33% OF THE PORTFOLIO WAS INVESTED IN TRUCKING AND FREIGHT
STOCKS AT THE END OF THE PERIOD. WHAT DID YOU FIND ATTRACTIVE ABOUT
THESE COMPANIES?
A. I never make investments in an entire sector, but rather I invest
on a stock-by-stock basis. I liked the business fundamentals of many
companies in these two areas of the transportation industry. As an
example, about 6% of the fund was invested in Airborne Freight at the
end of the period. I felt that the market dramatically underestimated
Airborne's earnings power, so I made that stock the fund's largest
holding. That investment turned out to be a significant contributor to
the fund's performance during the period because the company reported
higher-than-expected earnings and the market rewarded the stock with a
higher valuation.
Q. YOU MENTIONED CONSOLIDATION TRENDS EARLIER. WAS THIS HAPPENING IN
ALL AREAS OF THE TRANSPORTATION INDUSTRY?
A. Mergers have been very evident in trucking and freight-forwarding.
It's an especially interesting story among freight-forwarding
companies - pure service companies that organize shipping for other
companies - because technology is forcing the issue. There is a huge
gap between the companies that have good internal software and
information technology (IT) systems, and the smaller companies that
can't afford to keep pace with the technological advancements.
Therefore, we're seeing the bigger companies snapping up the little
companies at a rapid pace. Consolidation also was evident in railroads
and shipping companies. The only place we didn't see a lot of merger
activity was in the airline sector.
Q. DID THE UPS STRIKE LATE IN THE PERIOD AFFECT YOUR INVESTMENT
STRATEGY IN ANY WAY?
A. Not really. I saw it as a short-term blip and I invest for
long-term returns, so I thought it would be foolhardy to change my
strategy to try and benefit from a two-week strike. By happenstance,
several companies in the fund's portfolio - such as Airborne Freight,
Federal Express and CNF Transportation - reaped short-term benefits
from the strike.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. Most of the airlines appreciated significantly through the early
part of 1997. The fund reduced many of these positions to take
advantage of these gains before hitting the airlines' traditionally
slow summer months. However, the fund had a fairly significant
position in America West during the period and that stock was flat. I
sold the fund's shares in America West by the end of the period.
Q. WHAT'S YOUR OUTLOOK FOR THE TRANSPORTATION MARKET IN THE NEAR TERM?
A. If this period of solid, contained economic growth continues, the
transportation industry should continue to thrive. If the economy
grows too quickly, transportation companies tend to order too much
capacity, and if the economy then slows, they are left with excess
capacity and high fixed costs. Overall, I think we'll see more
consolidation in the industry and transportation companies will
continue to improve their business fundamentals.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: September 29, 1986
FUND NUMBER: 512
TRADING SYMBOL: FSRFX
SIZE: as of August 31, 1997, more than
$54 million
MANAGER: Jean-Marc Berteaux, since January
1997; equity analyst, European paper and
European diversified industrial industries, since
1994; joined Fidelity in 1994
(checkmark)
TRANSPORTATION PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.5%
SHARES VALUE (NOTE 1)
AIR TRANSPORTATION - 19.7%
AIR TRANSPORT, MAJOR NATIONAL - 19.7%
AMR Corp. (a) 20,500 $ 2,065,375 00176510
Alaska Air Group, Inc. (a) 60,100 1,648,994 01165910
Atlas Air, Inc. (a) 18,500 513,375 04916410
Continental Airlines, Inc. Class B (a) 31,000 1,135,375 21079530
Delta Air Lines, Inc. 20,000 1,730,000 24736110
Kitty Hawk, Inc. 30,000 596,250 49832610
KLM Royal Dutch Airlines NV (NY Reg.) 10,000 327,500 48251610
Northwest Airlines Corp. Class A (a) 20,100 734,906 66728010
UAL Corp. (a) 30,000 2,285,625 90254950
11,037,400
AUTOS, TIRES, & ACCESSORIES - 13.9%
AUTO & TRUCK PARTS - 10.6%
Cummins Engine Co., Inc. 20,800 1,600,300 23102110
Eaton Corp. 33,400 3,008,088 27805810
Modine Manufacturing Co. 14,800 453,250 60782810
Wabash National Corp. 30,000 881,250 92956610
5,942,888
MOTOR VEHICLES & CAR BODIES - 3.3%
Navistar International Corp. (a) 37,300 925,506 63934E10
PACCAR, Inc. 20,000 947,500 69371810
1,873,006
TOTAL AUTOS, TIRES, & ACCESSORIES 7,815,894
COMPUTER SERVICES & SOFTWARE - 0.3%
CAD/CAM/CAE - 0.3%
Sabre Group Holdings, Inc. Class A (a) 5,300 162,975 78590510
HOLDING COMPANIES - 6.1%
HOLDING COMPANY OFFICES, NEC - 6.1%
Lagardere S.C.A. (Reg.) 17,334 462,821 50699S22
Norfolk Southern Corp. 30,000 2,940,000 65584410
3,402,821
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
ENGINES & TURBINES - 0.4%
Detroit Diesel Corp. (a) 10,000 216,875 25083710
LEASING & RENTAL - 2.2%
EQUIPMENT RENTAL & LEASING, NEC- 2.2%
Ryder Systems, Inc. 35,000 1,249,063 78354910
RAILROADS - 15.1%
CSX Corp. 50,000 2,859,375 12640810
Canadian Pacific Ltd. 20,000 583,679 13592310
Canadian National Railway Co. 26,500 1,310,917 13637510
Union Pacific Corp. 42,000 2,727,375 90781810
Wisconsin Central Transportation Corp. (a) 30,800 954,800 97659210
8,436,146
SERVICES - 0.9%
DETECTIVE, GUARD & ARMORED CAR - 0.9%
Pittston Co. (Burlington Group) 20,000 480,000 72570188
SHIPPING - 2.0%
DEEP SEA TRANSPORT - 0.3%
Teekay Shipping Corp. 5,000 164,688 88099J22
SHARES VALUE (NOTE 1)
SHIPPING - 1.7%
ICB Shipping Class B 20,000 $ 253,049 44999B92
Knightsbridge Tankers Ltd. 26,000 679,250 49999N22
932,299
TOTAL SHIPPING 1,096,987
TRUCKING & FREIGHT - 32.9%
AIR COURIER SERVICES - 13.3%
Airborne Freight Corp. 69,300 3,413,025 00926610
CNF Transportation, Inc. 66,000 2,384,250 12612W10
Federal Express Corp. 25,000 1,660,938 31330910
7,458,213
FREIGHT FORWARDING - 8.8%
Air Express International Corp. 75,000 2,278,125 00910410
Circle International Group, Inc. 18,300 459,784 17257410
Expeditors International of
Washington, Inc. 60,000 2,197,500 30213010
4,935,409
TRUCKING, LOCAL & LONG DISTANCE - 4.5%
Knight Transportation, Inc. (a) 20,000 510,000 49906410
Roadway Express, Inc. 10,000 230,000 76974210
Swift Transportation Co., Inc. (a) 33,800 988,650 87075610
Werner Enterprises, Inc. 25,000 546,875 95075510
XTRA Corp. 5,000 234,688 98413810
2,510,213
TRUCKING, LONG DISTANCE - 6.3%
Consolidated Freightways Corp. (a) 23,500 367,188 20923210
Professional Transportation Group, Inc. 30,000 105,000 74296310
Simon Transportation Services, Inc.
Class A (a) 18,100 404,988 82881310
Trimac Ltd. 50,000 376,509 89620810
US Xpress Enterprises, Inc. (a) 28,500 546,844 90338N10
USFreightways Corp. 36,600 1,098,000 91690610
Yellow Corp. (a) 20,000 627,500 98550910
3,526,029
TOTAL TRUCKING & FREIGHT 18,429,864
TOTAL COMMON STOCKS
(Cost $46,888,789) 52,328,025
CASH EQUIVALENTS - 6.5%
Taxable Central Cash Fund (b)
(Cost $3,653,263) 3,653,263 3,653,263 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $50,542,052) $ 55,981,288
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $97,167,715 and $64,952,422, respectively (see Note 3 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 $8,071 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $1,648,964 and $1,682,800, respectively (see Note 6 of
Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $50,574,044. Net unrealized appreciation
aggregated $5,407,244, of which $6,285,608 related to appreciated
investment securities and $878,364 related to depreciated investment
securities.
TRANSPORTATION PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 55,981,288
SECURITIES, AT
VALUE
(COST
$50,542,052
) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 758,800
RECEIVABLE FOR 48,142
FUND SHARES
SOLD
DIVIDENDS 59,407
RECEIVABLE
INTEREST 19,581
RECEIVABLE
REDEMPTION FEES 212
RECEIVABLE
OTHER 6,675
RECEIVABLES
TOTAL ASSETS 56,874,105
LIABILITIES
PAYABLE FOR $ 175,463
INVESTMENTS
PURCHASED
PAYABLE FOR 539,583
FUND SHARES
REDEEMED
ACCRUED 27,994
MANAGEMENT
FEE
OTHER PAYABLES 64,781
AND
ACCRUED
EXPENSES
COLLATERAL ON 1,682,800
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 2,490,621
NET ASSETS $ 54,383,484
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 42,451,333
ACCUMULATED (38,485)
NET INVESTMENT
(LOSS)
ACCUMULATED 6,531,554
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 5,439,082
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 54,383,484
1,990,448
SHARES
OUTSTANDING
NET ASSET $27.32
VALUE AND
REDEMPTION
PRICE PER
SHARE
($54,383,48
4 (DIVIDED BY)
1,990,448
SHARES)
MAXIMUM $28.16
OFFERING PRICE
PER SHARE
(100/97.00
OF $27.32)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 248,102
INCOME
DIVIDENDS
INTEREST 131,649
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$16,944)
TOTAL INCOME 379,751
EXPENSES
MANAGEMENT $ 155,974
FEE
TRANSFER AGENT 185,756
FEES
ACCOUNTING AND 34,676
SECURITY
LENDING FEES
NON-INTERESTED 91
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 10,515
AND EXPENSES
REGISTRATION FEES 31,766
AUDIT 9,417
LEGAL 91
MISCELLANEOUS 277
TOTAL EXPENSES 428,563
BEFORE
REDUCTIONS
EXPENSE (10,327) 418,236
REDUCTIONS
NET INVESTMENT (38,485)
INCOME (LOSS)
REALIZED AND 6,591,469
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 5,192,338
SECURITIES
ASSETS AND (154) 5,192,184
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 11,783,653
NET INCREASE $ 11,745,168
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 73,151
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 374
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 15,038
WITHHELD BY
FSC
EXPENSE $ 9,368
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 959
CREDITS
$ 10,327
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (38,485) $ (72,506)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 6,591,469 966,188
GAIN (LOSS)
CHANGE IN NET 5,192,184 (640,423)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 11,745,168 253,259
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (186,230) (369,344)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 107,021,358 27,406,552
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 183,741 362,964
OF
DISTRIBUTIONS
COST OF SHARES (73,352,524) (30,259,063)
REDEEMED
REDEMPTION 81,596 50,774
FEES
NET INCREASE 33,934,171 (2,438,773)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 45,493,109 (2,554,858)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 8,890,375 11,445,233
PERIOD
END OF PERIOD $ 54,383,484 $ 8,890,375
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$38,485 AND
$0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 4,431,956 1,216,922
ISSUED IN 8,055 16,356
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,849,524) (1,355,455)
NET INCREASE 1,590,487 (122,177)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED FEBRUARY 28, TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 22.23 $ 21.92 $ 20.53 $ 21.67 $ 18.68 $ 15.49
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.02) (.13) (.09) F (.17) (.20) (.07)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 5.46 1.06 2.60 1.17 5.07 3.55
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.44 .93 2.51 1.00 4.87 3.48
INVESTMENT
OPERATIONS
LESS (.39) (.71) (1.22) (2.19) (1.96) (.36)
DISTRIBUTIONS
FROM NET
REALIZED GAIN
REDEMPTION FEES .04 .09 .10 .05 .08 .07
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 27.32 $ 22.23 $ 21.92 $ 20.53 $ 21.67 $ 18.68
END OF PERIOD
TOTAL RETURN B, C 25.00% 4.67% 12.95% 5.90% 27.47% 23.14%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 54,383 $ 8,890 $ 11,445 $ 12,704 $ 13,077 $ 10,780
OF PERIOD
(000 OMITTED)
RATIO OF 1.62% A 2.50% G 2.47% G 2.37% 2.40% 2.48% A, G
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.58% A, E 2.48% E 2.44% E 2.36% E 2.39% E 2.48% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.15)% A (.58)% (.43)% (.83)% (.96)% (.53)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 280% A 148% 175% 178% 115% 116% A
TURNOVER RATE
AVERAGE $ .0314 $ .0313
COMMISSION
RATE H
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
INVESTMENT
INCOME PER SHARE
REFLECTS A SPECIAL
DIVIDEND WHICH
AMOUNTED TO
$.05 PER
SHARE. G DURING
THE PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. H FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
BROKERAGE AND INVESTMENT 21.84% 66.60% 235.95% 272.46%
MANAGEMENT
BROKERAGE AND INVESTMENT 18.19% 61.60% 225.88% 261.28%
MANAGEMENT
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
BROKERAGE AND INVESTMENT MANAGEMENT 66.60% 27.43% 14.05%
BROKERAGE AND INVESTMENT 61.60% 26.65% 13.71%
MANAGEMENT (INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114602 S00000000000001
Brokerage/Invt. Mgt S&P 500
00068 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9368.89 9781.00
1987/10/31 5922.34 7674.17
1987/11/30 5478.36 7041.82
1987/12/31 5759.66 7577.70
1988/01/31 6172.34 7896.72
1988/02/29 6468.40 8264.71
1988/03/31 6297.94 8009.33
1988/04/30 6405.60 8098.24
1988/05/31 6163.37 8168.69
1988/06/30 6818.33 8543.63
1988/07/31 6764.43 8511.17
1988/08/31 6719.52 8221.79
1988/09/30 6890.20 8572.04
1988/10/31 6917.15 8810.34
1988/11/30 6764.43 8684.35
1988/12/31 6827.99 8836.33
1989/01/31 7717.81 9483.15
1989/02/28 7536.21 9247.02
1989/03/31 7545.29 9462.47
1989/04/30 7617.93 9953.57
1989/05/31 8117.32 10356.69
1989/06/30 7889.10 10297.66
1989/07/31 8838.71 11227.54
1989/08/31 9057.85 11447.60
1989/09/30 8774.79 11400.66
1989/10/31 8062.58 11136.17
1989/11/30 7980.41 11363.35
1989/12/31 7787.95 11636.07
1990/01/31 7445.72 10855.29
1990/02/28 7695.45 10995.32
1990/03/31 7908.19 11286.70
1990/04/30 7371.73 11004.53
1990/05/31 8074.68 12077.47
1990/06/30 8065.20 11995.34
1990/07/31 7778.15 11956.96
1990/08/31 6722.54 10876.05
1990/09/30 6148.44 10346.39
1990/10/31 5768.79 10301.90
1990/11/30 6148.44 10967.40
1990/12/31 6528.09 11273.39
1991/01/31 7071.32 11764.91
1991/02/28 7773.76 12606.10
1991/03/31 8569.87 12911.17
1991/04/30 8691.63 12942.15
1991/05/31 9150.56 13501.25
1991/06/30 8541.27 12882.90
1991/07/31 9197.57 13483.24
1991/08/31 9403.83 13802.79
1991/09/30 9891.37 13572.29
1991/10/31 10547.67 13754.15
1991/11/30 9966.38 13199.86
1991/12/31 11897.77 14709.93
1992/01/31 12066.53 14436.32
1992/02/29 11991.53 14623.99
1992/03/31 11672.76 14338.83
1992/04/30 10763.31 14760.39
1992/05/31 10735.18 14832.71
1992/06/30 10482.04 14611.71
1992/07/31 11072.71 15209.33
1992/08/31 10753.94 14897.53
1992/09/30 10678.93 15073.32
1992/10/31 11157.09 15126.08
1992/11/30 12160.29 15641.88
1992/12/31 12507.19 15834.28
1993/01/31 13247.87 15967.28
1993/02/28 13332.26 16184.44
1993/03/31 14401.09 16525.93
1993/04/30 14354.19 16126.00
1993/05/31 14823.28 16558.18
1993/06/30 15526.92 16606.20
1993/07/31 16042.92 16539.77
1993/08/31 17309.46 17166.63
1993/09/30 17628.45 17034.45
1993/10/31 17056.15 17387.06
1993/11/30 16587.06 17221.88
1993/12/31 18676.38 17430.27
1994/01/31 19074.41 18022.90
1994/02/28 18115.07 17534.48
1994/03/31 16084.14 16769.97
1994/04/30 15951.47 16984.63
1994/05/31 16339.29 17263.18
1994/06/30 16961.83 16840.23
1994/07/31 16563.81 17392.59
1994/08/31 16686.28 18105.69
1994/09/30 16053.53 17662.10
1994/10/31 16043.32 18059.49
1994/11/30 14930.90 17401.77
1994/12/31 15451.39 17659.84
1995/01/31 15257.48 18117.75
1995/02/28 15829.00 18823.80
1995/03/31 15992.29 19379.29
1995/04/30 16476.80 19950.01
1995/05/31 17403.29 20747.42
1995/06/30 18382.42 21229.38
1995/07/31 19266.80 21933.35
1995/08/31 19087.82 21988.40
1995/09/30 20245.93 22916.31
1995/10/31 19119.40 22834.50
1995/11/30 19582.65 23836.93
1995/12/31 19097.03 24296.03
1996/01/31 20342.00 25123.07
1996/02/29 20553.21 25355.96
1996/03/31 21475.82 25600.14
1996/04/30 21606.53 25977.48
1996/05/31 22322.20 26647.44
1996/06/30 22254.04 26748.97
1996/07/31 20890.85 25567.20
1996/08/31 21686.05 26106.41
1996/09/30 22799.32 27575.68
1996/10/31 23605.87 28336.22
1996/11/30 25923.29 30478.15
1996/12/31 26670.38 29874.38
1997/01/31 28615.70 31740.93
1997/02/28 29651.66 31989.78
1997/03/31 26647.36 30675.32
1997/04/30 29530.14 32506.64
1997/05/31 31733.36 34485.64
1997/06/30 33578.99 36030.60
1997/07/31 37270.26 38897.55
1997/08/29 36128.28 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114607 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Brokerage and Investment Management
Portfolio on August 31, 1987, and the current maximum 3% sales charge
was paid. As the chart shows, by August 31, 1997, the value of the
investment would have grown to $36,128 - a 261.28% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $36,619 - a 266.19%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
MORGAN STANLEY DEAN WITTER DISCOVER AND CO. 6.5
LEHMAN BROTHERS HOLDINGS, INC. 5.0
PAINEWEBBER GROUP, INC. 4.9
BEAR STEARNS COMPANIES, INC. 4.7
TRAVELERS GROUP, INC. (THE) 4.3
BANKERS TRUST NEW YORK CORP. 3.9
EDWARDS (A.G.), INC. 3.8
SALOMON, INC. 3.3
MERRILL LYNCH & CO., INC. 3.3
CREDIT SUISSE GROUP (REG.) 2.4
TOP INDUSTRIES AS OF AUGUST 31, 1997
SECURITY & COMMODITY BROKERS 35.2%
SECURITY BROKERS & DEALERS 15.1%
INVESTMENT MANAGERS 8.5%
LIFE INSURANCE 7.1%
STATE BANKS FEDERAL RESERVE 6.3%
ALL OTHERS 27.8%*
ROW: 1, COL: 1, VALUE: 27.8
ROW: 1, COL: 2, VALUE: 6.3
ROW: 1, COL: 3, VALUE: 7.1
ROW: 1, COL: 4, VALUE: 8.5
ROW: 1, COL: 5, VALUE: 15.1
ROW: 1, COL: 6, VALUE: 35.2
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Peter Fruzzetti, Portfolio Manager of Fidelity Select Brokerage and
Investment Management Portfolio
Q. HOW DID THE FUND PERFORM, PETER?
A. Very well. For the six months that ended on August 31, 1997, the
fund had a total return of 21.84%. For the year that ended August 31,
1997, it returned 66.60%. For the same periods, the Standard & Poor's
500 Index returned 14.78% and 40.65%, respectively.
Q. WHAT ACCOUNTED FOR THE STRONG PERFORMANCE?
A. There was a combination of factors. Investment banking conditions
remained robust, with companies seeing good results from the equity
markets, debt offerings and continued strength in mergers and
acquisitions. We've also seen strong asset management in-flows into
mutual funds. Additionally, there has been more takeover speculation
and activity, especially in investment banking, driving stocks in many
cases to new highs.
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST SIX MONTHS,
AND HOW DID IT AFFECT THE BROKERAGE AND INVESTMENT MANAGEMENT AREAS?
A. Long interest rates have gone from 7.2% to 6.3% in just the past
three or four months and to some extent, interest-rate speculation has
driven the stock market higher. Additionally, in 1997, with the
anticipated fall of the Glass-Steagall Act, which prohibited
commercial banks from competing in the investment banking sector, we
have seen more takeover activity, and I assume this will continue.
European banks and U.S. commercial banks desire a presence in equity
underwriting, which is perceived to be a more profitable business with
better returns on equity than traditional banking. We have seen a
number of commercial banks investing excess capital into investment
banking.
Q. HOW HAS THIS MERGER AND ACQUISITION ACTIVITY AFFECTED PORTFOLIO
STRATEGY?
A. We try to buy companies with the best fundamentals and the best
valuations. That's one part of the strategy. In addition, because we
are in a period of consolidation, we try to pick the most likely
takeover candidates. We have seen a number of portfolio holdings in
merger announcements to the benefit of the fund's performance. One of
our positions was in Alex Brown, for example, which is being merged
with Bankers Trust.
Q. WHAT OTHER STOCKS HAD A STRONG, POSITIVE EFFECT ON PERFORMANCE?
A. Most of our larger positions did well. Merrill Lynch, Lehman
Brothers and Bear Stearns all had very strong performance. One of the
best performing stocks was Donaldson Lufkin & Jenrette, due mostly to
takeover speculation.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. With large in-flows at the beginning of the year, we started the
six-month period with a rather large cash position. The fact that this
money was not invested held back performance a bit. Right now, one
challenge is that valuations of the group have drifted higher. It's
more difficult to find compelling values today than one year ago.
Q. WHAT IS YOUR OUTLOOK?
A. So far, 1997 has been better than anticipated. While 1997 has not
experienced the same growth as 1996, business has nonetheless remained
very solid. There are a lot of variables, including both the direction
of interest rates and the stock market. Because the last 12 months
have been so robust, I would not anticipate comparable growth over the
next 12 months. However, with consolidation within the industry, there
still are a lot of names in this group whose valuations can be
sustained and enhanced.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 068
TRADING SYMBOL: FSLBX
SIZE: as of August 31, 1997, more than
$344 million
MANAGER: Peter Fruzzetti, since February 1997;
equity analyst, insurance and health care industries,
1993-1996; equity analyst, insurance industry,
since 1996; joined Fidelity in 1993
(checkmark)
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.7%
SHARES VALUE (NOTE 1)
BANKS - 12.3%
INTERNATIONAL BANKS - 2.0%
Bank of Nova Scotia (Halifax) 50,000 $ 2,159,971 06414910
Deutsche Bank AG 30,000 1,766,657 25152592
Julius Baer Holding AG 2,000 2,814,070 48199K22
Toronto Dominion Bank 14,443 437,115 89116050
7,177,813
NATIONAL COMMERCIAL BANKS - 4.0%
BankAmerica Corp. 40,000 2,632,500 06605010
Citicorp 65,000 8,295,625 17303410
Mellon Bank Corp. 60,000 2,887,500 58550910
13,815,625
STATE BANKS FEDERAL RESERVE - 6.3%
Bankers Trust New York Corp. 130,000 13,487,500 06636510
Credit Suisse Group (Reg.) 70,900 8,491,374 22540192
21,978,874
TOTAL BANKS 42,972,312
COMPUTER SERVICES & SOFTWARE - 1.1%
DATA PROCESSING - 1.1%
Fiserv, Inc. (a) 83,116 3,740,220 33773810
CREDIT & OTHER FINANCE - 3.4%
FINANCIAL SERVICES - 3.4%
American Express Co. 40,000 3,110,000 02581610
Equitable Companies, Inc. 145,000 6,307,500 29444G10
Investors Financial Services Corp. 6,297 279,429 46191510
Investors Financial Services Corp.
Class A 1,210 41,745 46191520
Perpetual PLC 20,000 832,937 71499822
Phoenix Duff & Phelps Corp. 160,000 1,220,000 71892410
11,791,611
MORTGAGE BANKERS - 0.0%
Homeside, Inc. 3,000 68,250 43760810
TOTAL CREDIT & OTHER FINANCE 11,859,861
INSURANCE - 13.8%
ACCIDENT & HEALTH INSURANCE - 0.1%
UICI (a) 15,000 450,000 90273710
INSURANCE BROKERS & SERVICES - 0.6%
Marsh & McLennan Companies, Inc. 30,000 2,047,500 57174810
INSURANCE CARRIERS - 1.4%
AFLAC, Inc. 90,000 4,955,625 00105510
LIFE INSURANCE - 7.1%
ARM Financial Group, Inc. Class A 400 7,775 00194410
Amerus Life Holdings, Inc. 15,500 445,625 03073210
Conseco, Inc. 110,000 4,730,000 20846410
Delphi Financial Group, Inc. Class A 20,400 893,775 24713110
Liberty Financial Companies, Inc. 82,000 4,064,125 53051210
Life RE Corp. 14,300 733,769 53216010
Nationwide Financial Services, Inc.
Class A 2,000 55,500 63861210
Protective Life Corp. 19,000 945,250 74367410
Providian Financial Corp. 200,000 7,450,000 74406A10
SunAmerica, Inc. 149,250 5,360,562 86693010
24,686,381
PROPERTY-CASUALTY & REINSURANCE - 4.6%
Reinsurance Group of America, Inc. 30,000 1,198,750 75935110
Travelers Group, Inc. (The) 234,000 14,859,000 89419010
16,057,750
TOTAL INSURANCE 48,197,256
SHARES VALUE (NOTE 1)
SAVINGS & LOANS - 0.1%
SAVINGS BANKS, FEDERAL CHARTER - 0.1%
Dime Bancorp., Inc. 20,000 $ 386,250 25429Q10
SECURITIES INDUSTRY - 63.0%
INVESTMENT ADVICE - 4.2%
Mutual Fund Co., Ltd. (For. Reg.) 27,600 79,111 65499B23
New England Investment Companies LP 109,100 2,945,700 64409510
Oppenheimer Capital LP unit 50,000 2,487,500 68392810
PIMCO Advisors LP Class A unit 72,700 2,112,844 69338X10
Trimark Financial Corp. 67,000 3,140,587 89621H10
United Asset Management Corp. 140,000 3,753,750 90942010
14,519,492
INVESTMENT MANAGERS - 8.5%
Alliance Capital Management LP 55,000 1,859,688 01854810
Eaton Vance Corp. 45,000 1,288,125 27826510
Franklin Resources, Inc. 93,350 7,222,956 35461310
Investors Group, Inc. 65,800 1,574,174 46152H10
John Nuveen Co. Class A 50,000 1,521,875 47803510
Mackenzie Financial Corp. 103,100 2,165,639 55453110
Pioneer Group, Inc. 170,000 5,525,000 72368410
Price (T. Rowe) Associates, Inc. 153,000 8,415,000 74147710
29,572,457
SECURITY & COMMODITY BROKERS - 35.2%
Advest Group, Inc. (The) 275,800 6,274,450 00756610
Alex Brown, Inc. 30,000 2,540,625 01390210
Bear Stearns Companies, Inc. 413,172 16,346,117 07390210
Edwards (A.G.), Inc. 337,000 13,395,750 28176010
Fahnestock Viner Holdings, Inc. Class A 77,600 1,411,926 30292110
First Marathon, Inc. Class A (non-vtg.) 44,700 644,208 32076L20
Jefferies Group, Inc. 61,800 4,202,400 47231810
Legg Mason, Inc. 76,700 4,736,225 52490110
McDonald & Co. Investments, Inc. 48,000 2,118,000 58004710
Merrill Lynch & Co., Inc. 188,000 11,562,000 59018810
Midland Walwyn, Inc. 335,000 4,236,534 59780110
Morgan Keegan, Inc. 91,950 2,350,472 61741010
Morgan Stanley Dean Witter Discover
and Co. 474,065 22,814,376 61744644
Peregrine Investments Holdings Ltd. 84,300 156,645 71399492
Piper Jaffray Inc. 32,600 737,575 72408110
Quick & Reilly Group, Inc. (The) 129,162 4,423,799 74837610
Raymond James Financial, Inc. 236,850 6,868,650 75473010
Salomon, Inc. 194,000 11,615,750 79549B10
Schwab (Charles) Corp. 95,400 4,048,538 80851310
Southwest Securities Group, Inc. 71,400 1,713,600 84522410
Stifel Financial Corp. 50,000 540,625 86063010
122,738,265
SECURITY BROKERS & DEALERS - 15.1%
Donaldson Lufkin & Jenrette, Inc. 99,500 5,907,813 25766110
Everen Capital Corp. 90,400 2,971,900 29976110
Hambrecht & Quist Group 45,000 1,420,313 40654510
Interra Financial, Inc. 177,950 7,740,825 46069M10
Lehman Brothers Holdings, Inc. 397,000 17,418,375 52490810
PaineWebber Group, Inc. 440,700 16,939,406 69562910
52,398,632
TOTAL SECURITIES INDUSTRY 219,228,846
TOTAL COMMON STOCKS
(Cost $268,883,769) 326,384,745
CASH EQUIVALENTS - 6.3%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $21,999,370) 21,999,370 $ 21,999,370 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $290,883,139) $ 348,384,115
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $142,274,696 and $266,905,436, respectively (see Note 3 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 $47,603 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and average daily balances during the period for which loans were
outstanding amounted to $11,972,000 and $8,206,500, respectively. The
weighted average interest rate was 5.7% (see Note 7 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $290,925,485. Net unrealized appreciation
aggregated $57,458,630, of which $60,606,046 related to appreciated
investment securities and $3,147,416 related to depreciated investment
securities.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 348,384,115
SECURITIES, AT
VALUE
(COST
$290,883,13
9) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,261,946
FUND SHARES
SOLD
DIVIDENDS 179,762
RECEIVABLE
INTEREST 107,047
RECEIVABLE
REDEMPTION FEES 4,094
RECEIVABLE
OTHER 4,752
RECEIVABLES
TOTAL ASSETS 349,941,716
LIABILITIES
PAYABLE FOR $ 1,111,374
INVESTMENTS
PURCHASED
PAYABLE FOR 3,913,884
FUND SHARES
REDEEMED
ACCRUED 172,009
MANAGEMENT
FEE
OTHER PAYABLES 222,213
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 5,419,480
NET ASSETS $ 344,522,236
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 282,243,602
UNDISTRIBUTED 901,694
NET INVESTMENT
INCOME
ACCUMULATED 3,877,037
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 57,499,903
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 344,522,236
10,998,653
SHARES
OUTSTANDING
NET ASSET $31.32
VALUE AND
REDEMPTION
PRICE PER
SHARE
($344,522,2
36 (DIVIDED BY)
10,998,653
SHARES)
MAXIMUM $32.29
OFFERING PRICE
PER SHARE
(100/97.00
OF $31.32)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 2,039,550
INCOME
DIVIDENDS
INTEREST 874,165
TOTAL INCOME 2,913,715
EXPENSES
MANAGEMENT $ 881,304
FEE
TRANSFER AGENT 1,033,050
FEES
ACCOUNTING FEES 147,859
AND EXPENSES
NON-INTERESTED 612
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 13,439
AND EXPENSES
REGISTRATION FEES 23,731
AUDIT 15,169
LEGAL 507
INTEREST 2,595
MISCELLANEOUS 313
TOTAL EXPENSES 2,118,579
BEFORE
REDUCTIONS
EXPENSE (104,050) 2,014,529
REDUCTIONS
NET INVESTMENT 899,186
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 3,986,396
SECURITIES
FOREIGN (403) 3,985,993
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 37,255,019
SECURITIES
ASSETS AND (1,073) 37,253,946
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 41,239,939
NET INCREASE $ 42,139,125
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 1,126,581
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 848
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 99,075
WITHHELD BY
FSC
EXPENSE $ 100,727
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 1,678
CREDITS
TRANSFER 1,645
AGENT CREDITS
$ 104,050
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 899,186 $ 269,737
NET
INVESTMENT
INCOME
NET REALIZED 3,985,993 1,506,496
GAIN (LOSS)
CHANGE IN NET 37,253,946 16,730,770
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 42,139,125 18,507,003
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (75,185) (152,473)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (300,702) (1,573,937)
REALIZED GAIN
TOTAL (375,887) (1,726,410)
DISTRIBUTIONS
SHARE 259,257,341 516,393,133
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 372,115 1,697,946
OF
DISTRIBUTIONS
COST OF SHARES (416,164,710) (114,791,803)
REDEEMED
REDEMPTION 507,072 325,639
FEES
NET INCREASE (156,028,182) 403,624,915
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (114,264,944) 420,405,508
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 458,787,180 38,381,672
PERIOD
END OF PERIOD $ 344,522,236 $ 458,787,180
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$901,694
AND
$162,209,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 9,189,862 20,890,431
ISSUED IN 15,821 83,782
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (16,017,692) (5,239,816)
NET INCREASE (6,812,009) 15,734,397
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 25.76 $ 18.49 $ 15.51 $ 17.75 $ 14.22 $ 11.48
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .09 .08 .09 (.03) (.02) -
INVESTMENT
INCOME (LOSS) D
NET REALIZED 5.47 7.80 4.29 (2.25) 4.95 2.65
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.56 7.88 4.38 (2.28) 4.93 2.65
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.01) (.06) (.04) - (.01) -
INVESTMENT
INCOME
FROM NET (.04) (.65) (1.09) - (1.47) -
REALIZED GAIN
IN EXCESS OF - - (.35) - - -
NET REALIZED
GAIN
TOTAL (.05) (.71) (1.48) - (1.48) -
DISTRIBUTIONS
REDEMPTION FEES .05 .10 .08 .04 .08 .09
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 31.32 $ 25.76 $ 18.49 $ 15.51 $ 17.75 $ 14.22
END OF PERIOD
TOTAL RETURN B, C 21.84% 44.27% 29.85% (12.62)% 35.87% 23.87%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 344,522 $ 458,787 $ 38,382 $ 27,346 $ 59,810 $ 24,687
OF PERIOD
(000 OMITTED)
RATIO OF 1.43% A 1.94% 1.64% E 2.54% E 1.79% 2.21% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.36% A, F 1.93% F 1.61% F 2.54% 1.77% F 2.21% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .61% A .37% .50% (.20)% (.14)% .02% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 104% A 16% 166% 139% 295% 111% A
TURNOVER RATE
AVERAGE $ .0452 $ .0392
COMMISSION
RATE G
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E DURING
THE PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. F FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
FINANCIAL SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
FINANCIAL SERVICES 14.41% 48.17% 230.20% 369.58%
FINANCIAL SERVICES 10.98% 43.73% 220.29% 355.49%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
FINANCIAL SERVICES 48.17% 26.99% 16.73%
FINANCIAL SERVICES 43.73% 26.21% 16.37%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970923 094102 S00000000000001
Financial Services S&P 500
00066 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9355.70 9781.00
1987/10/31 7238.40 7674.17
1987/11/30 6796.51 7041.82
1987/12/31 7140.87 7577.70
1988/01/31 7678.54 7896.72
1988/02/29 7934.30 8264.71
1988/03/31 7797.70 8009.33
1988/04/30 7661.10 8098.24
1988/05/31 7736.67 8168.69
1988/06/30 8213.31 8543.63
1988/07/31 8158.09 8511.17
1988/08/31 8134.84 8221.79
1988/09/30 8471.97 8572.04
1988/10/31 8495.22 8810.34
1988/11/30 8143.55 8684.35
1988/12/31 7998.80 8836.33
1989/01/31 8408.76 9483.15
1989/02/28 8390.81 9247.02
1989/03/31 9004.26 9462.47
1989/04/30 9168.84 9953.57
1989/05/31 9743.39 10356.69
1989/06/30 9675.50 10297.66
1989/07/31 10449.90 11227.54
1989/08/31 10745.20 11447.60
1989/09/30 10968.18 11400.66
1989/10/31 9922.58 11136.17
1989/11/30 9786.99 11363.35
1989/12/31 9545.96 11636.07
1990/01/31 8740.07 10855.29
1990/02/28 9056.34 10995.32
1990/03/31 8916.45 11286.70
1990/04/30 8600.18 11004.53
1990/05/31 9357.41 12077.47
1990/06/30 9095.88 11995.34
1990/07/31 8511.99 11956.96
1990/08/31 7493.23 10876.05
1990/09/30 6377.15 10346.39
1990/10/31 5820.63 10301.90
1990/11/30 6641.72 10967.40
1990/12/31 7223.44 11273.39
1991/01/31 7879.83 11764.91
1991/02/28 8785.09 12606.10
1991/03/31 9205.06 12911.17
1991/04/30 9503.71 12942.15
1991/05/31 10231.65 13501.25
1991/06/30 9401.05 12882.90
1991/07/31 10144.54 13483.24
1991/08/31 10816.49 13802.79
1991/09/30 10751.16 13572.29
1991/10/31 10987.59 13754.15
1991/11/30 10172.54 13199.86
1991/12/31 11675.13 14709.93
1992/01/31 12256.69 14436.32
1992/02/29 13136.88 14623.99
1992/03/31 12841.39 14338.83
1992/04/30 13334.92 14760.39
1992/05/31 13907.05 14832.71
1992/06/30 14227.05 14611.71
1992/07/31 14633.90 15209.33
1992/08/31 13794.56 14897.53
1992/09/30 14223.84 15073.32
1992/10/31 14787.67 15126.08
1992/11/30 15899.31 15641.88
1992/12/31 16674.43 15834.28
1993/01/31 17726.19 15967.28
1993/02/28 18197.43 16184.44
1993/03/31 19150.15 16525.93
1993/04/30 18233.38 16126.00
1993/05/31 18240.30 16558.18
1993/06/30 18921.24 16606.20
1993/07/31 19429.35 16539.77
1993/08/31 20034.25 17166.63
1993/09/30 20497.43 17034.45
1993/10/31 19947.84 17387.06
1993/11/30 19059.50 17221.88
1993/12/31 19601.52 17430.27
1994/01/31 20932.17 18022.90
1994/02/28 20172.36 17534.48
1994/03/31 19251.14 16769.97
1994/04/30 19982.18 16984.63
1994/05/31 20835.11 17263.18
1994/06/30 20343.19 16840.23
1994/07/31 21053.29 17392.59
1994/08/31 21791.17 18105.69
1994/09/30 20148.80 17662.10
1994/10/31 20041.69 18059.49
1994/11/30 18772.22 17401.77
1994/12/31 18886.56 17659.84
1995/01/31 19863.30 18117.75
1995/02/28 21124.74 18823.80
1995/03/31 21497.04 19379.29
1995/04/30 22171.56 19950.01
1995/05/31 23402.34 20747.42
1995/06/30 23511.84 21229.38
1995/07/31 24300.24 21933.35
1995/08/31 25246.32 21988.40
1995/09/30 26687.34 22916.31
1995/10/31 26004.06 22834.50
1995/11/30 27756.06 23836.93
1995/12/31 27827.49 24296.03
1996/01/31 29128.55 25123.07
1996/02/29 29374.46 25355.96
1996/03/31 29723.20 25600.14
1996/04/30 29393.32 25977.48
1996/05/31 30076.35 26647.44
1996/06/30 30516.43 26748.97
1996/07/31 29851.73 25567.20
1996/08/31 30741.05 26106.41
1996/09/30 32780.98 27575.68
1996/10/31 34857.58 28336.22
1996/11/30 37851.00 30478.15
1996/12/31 36765.02 29874.38
1997/01/31 38953.93 31740.93
1997/02/28 39813.17 31989.78
1997/03/31 36822.63 30675.32
1997/04/30 39923.74 32506.64
1997/05/31 41234.37 34485.64
1997/06/30 43427.15 36030.60
1997/07/31 48291.60 38897.55
1997/08/29 45549.36 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970923 094112 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Financial Services Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $45,549 - a 355.49% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
BARNETT BANKS, INC. 6.6
ASSOCIATES FIRST CAPITAL CORP. 6.3
FIRST CHICAGO NBD CORP. 6.1
HOUSEHOLD INTERNATIONAL, INC. 5.8
CITICORP 5.5
BANC ONE CORP. 5.5
NATIONAL CITY CORP. 5.5
AMERICAN EXPRESS CO. 5.3
BENEFICIAL CORP. 5.1
MBNA CORP. 4.8
TOP INDUSTRIES AS OF AUGUST 31, 1997
NATIONAL COMMERCIAL BANKS 31.8%
PERSONAL CREDIT INSTITUTIONS 22.0%
FINANCIAL SERVICES 11.9%
STATE BANKS FEDERAL
RESERVE 10.4%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 8.1%
ALL OTHERS 15.8%
ROW: 1, COL: 1, VALUE: 15.8
ROW: 1, COL: 2, VALUE: 8.1
ROW: 1, COL: 3, VALUE: 10.4
ROW: 1, COL: 4, VALUE: 11.9
ROW: 1, COL: 5, VALUE: 22.0
ROW: 1, COL: 6, VALUE: 31.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
FINANCIAL SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Louis Salemy,
Portfolio Manager of
Fidelity Select Financial
Services Portfolio
Q. HOW DID THE FUND PERFORM, LOUIS?
A. For the six months that ended August 31, 1997, the fund returned
14.41%. This slightly trailed the Standard & Poor's 500 Index, which
returned 14.78% over the same period. For the 12 months that ended
August 31, 1997, the fund returned 48.17%, while the S&P 500 returned
40.65%.
Q. CAN YOU DESCRIBE THE INVESTING CLIMATE FOR FINANCIAL STOCKS AND HOW
IT RELATED TO FUND PERFORMANCE?
A. Throughout the first quarter of 1997, financial stock investors
expressed concern over the direction of interest rates and wondered
whether the economy could sustain its steady growth pace. In March,
the Federal Reserve Board announced it was raising interest rates by a
quarter of a percentage point and, since finance stocks are especially
susceptible to rate movement, we witnessed some pretty tough sledding
through the end of April. In the spring and early summer, economic
news came out indicating that while the economy was still growing at a
good clip, the pace had slowed some. Additionally, the Fed indicated
no desire to raise rates again, as many had suspected. These
developments had a favorable effect on the fund's performance, as
investors gradually regained confidence in the sector. As a result,
financial stocks bounced back through the end of July.
Q. AUGUST WAS A FAIRLY VOLATILE MONTH FOR THE MARKET. WHAT HAPPENED
AND HOW WAS THE FUND AFFECTED?
A. Part of the reason for the bumpy ride in August was that the
large-cap stocks that had been driving the market for so long finally
took a break. Several key companies announced earnings disappointments
and investors showed their concern by seeking alternatives. At the
same time, Citicorp - one of the fund's top positions - suffered from
a currency devaluation in Malaysia, where it has substantial
operations, raising questions about the company's ability to operate
efficiently there.
Q. TWO OF THE FUND'S LARGER POSITIONS - BARNETT BANKS AND NATIONSBANK
- - WERE INVOLVED IN A SIGNIFICANT MERGER DURING THE PERIOD. WHAT IMPACT
DID THIS HAVE ON THE PORTFOLIO?
A. The late-August acquisition of the Barnett bank chain by
NationsBank caught a lot of industry insiders by surprise. Barnett was
a really solid franchise and had a good foothold in the Southeast, one
of the nation's better growth regions. On the day the deal was
announced, NationsBank stock fell by around 10% and Barnett's stock
rose sharply. In order to buy Barnett, NationsBank had to issue 245
million shares in addition to its existing share base. Investor
concern centered around the fact that NationsBank may have overpaid
for Barnett and, in doing so, may have reduced its future earnings
growth rate. Because the fund owned significantly more Barnett stock
than NationsBank stock, the immediate effect on the portfolio was
positive.
Q. WHICH INDIVIDUAL STOCKS PERFORMED WELL? WHICH PROVED DISAPPOINTING?
A. First Chicago and Household International - two companies with
credit card-related businesses - performed well on the heels of an
improving credit situation within the sector. American Express was
also a positive contributor. Disappointments included Capital One, a
credit-card issuer that experienced scaled-back earnings expectations.
Q. WHAT'S YOUR OUTLOOK?
A. I think we'll see a continuation of the benign rate environment
that existed at the end of the period, and I fully expect the consumer
credit situation to keep improving. Enhanced credit conditions would
play a big role in prolonging the sector's strong performance.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 10, 1981
FUND NUMBER: 066
TRADING SYMBOL: FIDSX
SIZE: as of August 31, 1997, more than
$436 million
MANAGER: Louis Salemy, since 1994; manager,
Fidelity Select Brokerage and Investment
Management Portfolio, 1995-1997; joined
Fidelity in 1992
(checkmark)
FINANCIAL SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.8%
SHARES VALUE (NOTE 1)
BANKS - 42.2%
NATIONAL COMMERCIAL BANKS - 31.8%
Banc One Corp. 449,290 $ 24,093,176 05943810
Bank of New York Co., Inc. 451,068 20,128,910 06405710
Capital One Financial Corp. 291,700 11,230,450 14040H10
Citicorp 190,000 24,248,750 17303410
Comerica, Inc. 109,445 7,750,074 20034010
First Union Corp. 2 96 33735810
Mercantile Bancorp., Inc. 22,050 1,520,070 58734210
National City Corp. 425,000 24,012,500 63540510
NationsBank Corp. 340,000 20,187,500 63858510
Republic New York Corp. 3,000 321,188 76071910
U.S. Bancorp 63 5,516 90297310
Wachovia Corp. 89,500 5,571,375 92977110
139,069,605
STATE BANKS FEDERAL RESERVE - 10.4%
Barnett Banks, Inc. 425,600 28,994,000 06805510
Northern Trust Corp. 315,000 16,734,375 66585910
45,728,375
TOTAL BANKS 184,797,980
CREDIT & OTHER FINANCE - 37.2%
BANK HOLDING COMPANY OFFICES - 3.3%
Fleet Financial Group, Inc. 224,167 14,444,761 33891510
FINANCIAL SERVICES - 11.9%
American Express Co. 297,300 23,115,075 02581610
Equitable Companies, Inc. 44,200 1,922,700 29444G10
First Chicago NBD Corp. 375,000 26,906,250 31945A10
51,944,025
PERSONAL CREDIT INSTITUTIONS - 22.0%
Associates First Capital Corp. 472,000 27,405,500 04600810
Beneficial Corp. 311,800 22,313,188 08172110
Household International, Inc. 229,300 25,437,969 44181510
MBNA Corp. 550,000 21,140,625 55262L10
96,297,282
TOTAL CREDIT & OTHER FINANCE 162,686,068
FEDERAL SPONSORED CREDIT - 8.1%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 8.1%
Federal Home Loan Mortgage
Corporation 369,600 12,035,100 31340030
Federal National Mortgage Association 300,000 13,200,000 31358610
SLM Holding Corp. 76,000 10,298,000 78442A10
35,533,100
INSURANCE - 8.3%
INSURANCE CARRIERS - 0.8%
MGIC Investment Corp. 70,000 3,521,875 55284810
LIFE INSURANCE - 0.4%
American Bankers Insurance
Group, Inc. 6,400 422,400 02445610
Conseco, Inc. 694 29,842 20846410
Providian Financial Corp. 21,800 812,050 74406A10
Torchmark Corp. 10,000 376,875 89102710
1,641,167
PROPERTY-CASUALTY & REINSURANCE - 7.1%
Aegon NV (Reg.) 9,470 703,148 00792410
Allstate Corp. 287,400 20,998,163 02000210
Berkley (W.R.) Corp. 50,000 2,765,625 08442310
SHARES VALUE (NOTE 1)
PMI Group, Inc. 50,000 $ 2,890,625 69344M10
Progressive Corp. 40,000 3,960,000 74331510
31,317,561
TOTAL INSURANCE 36,480,603
TOTAL COMMON STOCKS
(Cost $307,329,637) 419,497,751
CASH EQUIVALENTS - 4.2%
Taxable Central Cash Fund (a)
(Cost $18,314,086) 18,314,086 18,314,086 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $325,643,723) $ 437,811,837
LEGEND
1. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $113,457,745 and $135,754,308, respectively (see Note 3 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 $18,336 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan
and average daily balances during the period for which loans were
outstanding amounted to $5,445,000 and $4,251,000, respectively. The
weighted average interest rate was 5.9%. Interest expense includes
$1,387 paid under the bank borrowing program (see Note 7 of Notes to
Financial Statements).
The fund participated in the interfund lending program as a borrower.
The maximum loan and average daily balance during the period for which
the loan was outstanding amounted to $21,034,000. The weighted average
interest rate was 5.8%. Interest expense includes $3,363 paid under
the interfund lending program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $325,653,109. Net unrealized appreciation
aggregated $112,158,728, of which $114,496,211 related to appreciated
investment securities and $2,337,483 related to depreciated investment
securities.
FINANCIAL SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 437,811,837
SECURITIES, AT
VALUE
(COST
$325,643,72
3) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 7,144,667
INVESTMENTS
SOLD
RECEIVABLE FOR 637,228
FUND SHARES
SOLD
DIVIDENDS 545,892
RECEIVABLE
INTEREST 88,750
RECEIVABLE
REDEMPTION FEES 3,938
RECEIVABLE
OTHER 9,347
RECEIVABLES
TOTAL ASSETS 446,241,659
LIABILITIES
PAYABLE FOR $ 9,316,173
FUND SHARES
REDEEMED
ACCRUED 231,056
MANAGEMENT
FEE
OTHER PAYABLES 287,907
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 9,835,136
NET ASSETS $ 436,406,523
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 300,279,924
UNDISTRIBUTED 1,648,602
NET INVESTMENT
INCOME
ACCUMULATED 22,309,883
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 112,168,114
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 436,406,523
4,829,630
SHARES
OUTSTANDING
NET ASSET $90.36
VALUE AND
REDEMPTION
PRICE PER
SHARE
($436,406,5
23 (DIVIDED BY)
4,829,630
SHARES)
MAXIMUM $93.15
OFFERING PRICE
PER SHARE
(100/97.00
OF $90.36)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 3,516,427
INCOME
DIVIDENDS
INTEREST 985,786
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$8,163)
TOTAL INCOME 4,502,213
EXPENSES
MANAGEMENT $ 1,306,697
FEE
TRANSFER AGENT 1,288,309
FEES
ACCOUNTING AND 219,644
SECURITY
LENDING FEES
NON-INTERESTED 927
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 6,767
AND EXPENSES
REGISTRATION FEES 54,456
AUDIT 15,387
LEGAL 845
INTEREST 4,750
MISCELLANEOUS 920
TOTAL EXPENSES 2,898,702
BEFORE
REDUCTIONS
EXPENSE (37,426) 2,861,276
REDUCTIONS
NET INVESTMENT 1,640,937
INCOME
REALIZED AND 22,555,571
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 30,671,095
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 53,226,666
NET INCREASE $ 54,867,603
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 951,563
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 3,759
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 76,920
WITHHELD BY
FSC
EXPENSE $ 36,449
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 45
CREDITS
TRANSFER 932
AGENT CREDITS
$ 37,426
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 1,640,937 $ 2,811,616
NET
INVESTMENT
INCOME
NET REALIZED 22,555,571 37,306,366
GAIN (LOSS)
CHANGE IN NET 30,671,095 40,110,184
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 54,867,603 80,228,166
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (836,263) (2,448,822)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (15,229,661) (17,755,935)
REALIZED GAIN
TOTAL (16,065,924) (20,204,757)
DISTRIBUTIONS
SHARE 268,348,398 393,395,549
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 15,772,391 19,821,424
OF
DISTRIBUTIONS
COST OF SHARES (313,466,689) (317,821,398)
REDEEMED
REDEMPTION 526,557 538,820
FEES
NET INCREASE (28,819,343) 95,934,395
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 9,982,336 155,957,804
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 426,424,187 270,466,383
PERIOD
END OF PERIOD $ 436,406,523 $ 426,424,187
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$1,648,60
2 AND
$1,356,39
8,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 3,209,041 5,282,928
ISSUED IN 216,625 276,585
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (3,737,569) (4,534,794)
NET INCREASE (311,903) 1,024,719
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 82.94 $ 65.70 $ 48.23 $ 51.24 $ 53.29 $ 42.42
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .32 .74 1.03 .76 .29 .33
INVESTMENT
INCOME D
NET REALIZED 10.65 21.55 17.56 .87 5.02 14.30
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 10.97 22.29 18.59 1.63 5.31 14.63
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.19) (.63) (.37) (.79) (.20) (.51)
INVESTMENT
INCOME
FROM NET (3.46) (4.56) (.91) (3.93) (7.32) (3.38)
REALIZED GAIN
TOTAL (3.65) (5.19) (1.28) (4.72) (7.52) (3.89)
DISTRIBUTIONS
REDEMPTION FEES .10 .14 .16 .08 .16 .13
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 90.36 $ 82.94 $ 65.70 $ 48.23 $ 51.24 $ 53.29
END OF PERIOD
TOTAL RETURN B, C 14.41% 35.54% 39.05% 4.72% 10.85% 36.46%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 436,407 $ 426,424 $ 270,466 $ 153,089 $ 116,195 $ 214,612
OF PERIOD
(000 OMITTED)
RATIO OF 1.32% A 1.45% 1.42% 1.56% 1.64% 1.54% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.30% A, E 1.43% E 1.41% E 1.54% E 1.63% E 1.54% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .75% A 1.03% 1.78% 1.52% .53% .86% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 56% A 80% 125% 107% 93% 100% A
TURNOVER RATE
AVERAGE $ .0467 $ .0433
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
HOME FINANCE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
HOME FINANCE 13.52% 52.38% 332.64% 672.17%
HOME FINANCE 10.12% 47.81% 319.66% 649.01%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
HOME FINANCE 52.38% 34.04% 22.68%
HOME FINANCE 47.81% 33.22% 22.31%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115404 S00000000000001
Home Finance S&P 500
00098 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9077.64 9781.00
1987/10/31 7311.15 7674.17
1987/11/30 6713.93 7041.82
1987/12/31 7453.54 7577.70
1988/01/31 8352.46 7896.72
1988/02/29 8118.36 8264.71
1988/03/31 7893.63 8009.33
1988/04/30 8024.73 8098.24
1988/05/31 8015.36 8168.69
1988/06/30 8521.00 8543.63
1988/07/31 8670.82 8511.17
1988/08/31 8455.46 8221.79
1988/09/30 8886.19 8572.04
1988/10/31 9139.01 8810.34
1988/11/30 8680.19 8684.35
1988/12/31 8832.14 8836.33
1989/01/31 9572.90 9483.15
1989/02/28 9781.83 9247.02
1989/03/31 9829.32 9462.47
1989/04/30 10332.65 9953.57
1989/05/31 10779.01 10356.69
1989/06/30 10995.97 10297.66
1989/07/31 11379.11 11227.54
1989/08/31 12078.33 11447.60
1989/09/30 12528.51 11400.66
1989/10/31 10967.24 11136.17
1989/11/30 10612.84 11363.35
1989/12/31 9655.85 11636.07
1990/01/31 8855.37 10855.29
1990/02/28 9185.57 10995.32
1990/03/31 9205.58 11286.70
1990/04/30 8985.45 11004.53
1990/05/31 9835.96 12077.47
1990/06/30 9735.90 11995.34
1990/07/31 8895.39 11956.96
1990/08/31 7994.85 10876.05
1990/09/30 7304.43 10346.39
1990/10/31 6754.09 10301.90
1990/11/30 7484.54 10967.40
1990/12/31 8199.46 11273.39
1991/01/31 8983.75 11764.91
1991/02/28 10206.03 12606.10
1991/03/31 10674.57 12911.17
1991/04/30 11041.26 12942.15
1991/05/31 11499.61 13501.25
1991/06/30 10857.92 12882.90
1991/07/31 12019.08 13483.24
1991/08/31 12477.44 13802.79
1991/09/30 12375.58 13572.29
1991/10/31 12161.68 13754.15
1991/11/30 11601.47 13199.86
1991/12/31 13496.77 14709.93
1992/01/31 14826.86 14436.32
1992/02/29 15796.07 14623.99
1992/03/31 15527.99 14338.83
1992/04/30 15857.93 14760.39
1992/05/31 17425.17 14832.71
1992/06/30 17447.00 14611.71
1992/07/31 18304.87 15209.33
1992/08/31 17312.63 14897.53
1992/09/30 17591.70 15073.32
1992/10/31 17922.45 15126.08
1992/11/30 19762.24 15641.88
1992/12/31 21305.02 15834.28
1993/01/31 22833.54 15967.28
1993/02/28 23220.90 16184.44
1993/03/31 24047.98 16525.93
1993/04/30 22745.43 16126.00
1993/05/31 22356.17 16558.18
1993/06/30 22913.76 16606.20
1993/07/31 24386.64 16539.77
1993/08/31 25670.14 17166.63
1993/09/30 27311.35 17034.45
1993/10/31 27521.76 17387.06
1993/11/30 26290.85 17221.88
1993/12/31 27120.22 17430.27
1994/01/31 28307.57 18022.90
1994/02/28 27774.93 17534.48
1994/03/31 27253.38 16769.97
1994/04/30 28307.08 16984.63
1994/05/31 30053.00 17263.18
1994/06/30 30553.49 16840.23
1994/07/31 31228.58 17392.59
1994/08/31 32241.21 18105.69
1994/09/30 31135.46 17662.10
1994/10/31 29273.16 18059.49
1994/11/30 27760.03 17401.77
1994/12/31 27847.34 17659.84
1995/01/31 29074.56 18117.75
1995/02/28 31228.71 18823.80
1995/03/31 31176.49 19379.29
1995/04/30 32808.43 19950.01
1995/05/31 34753.69 20747.42
1995/06/30 35119.25 21229.38
1995/07/31 36529.24 21933.35
1995/08/31 39897.55 21988.40
1995/09/30 40733.10 22916.31
1995/10/31 39988.94 22834.50
1995/11/30 42195.32 23836.93
1995/12/31 42743.27 24296.03
1996/01/31 43911.93 25123.07
1996/02/29 44731.33 25355.96
1996/03/31 45752.22 25600.14
1996/04/30 45168.09 25977.48
1996/05/31 46174.89 26647.44
1996/06/30 46381.77 26748.97
1996/07/31 47209.28 25567.20
1996/08/31 49153.92 26106.41
1996/09/30 51636.44 27575.68
1996/10/31 55263.68 28336.22
1996/11/30 59401.22 30478.15
1996/12/31 58505.25 29874.38
1997/01/31 62306.15 31740.93
1997/02/28 65977.97 31989.78
1997/03/31 59867.84 30675.32
1997/04/30 61662.24 32506.64
1997/05/31 65794.48 34485.64
1997/06/30 71411.27 36030.60
1997/07/31 78129.99 38897.55
1997/08/29 74900.72 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115408 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Home Finance Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$74,901 - a 649.01% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
WASHINGTON MUTUAL, INC. 4.5
CHARTER ONE FINANCIAL CORP. 3.4
GREENPOINT FINANCIAL CORP. 3.0
AHMANSON (H.F.) & CO. 2.6
DIME BANCORP., INC. 2.5
TCF FINANCIAL CORP. 2.5
ASTORIA FINANCIAL CORP. 2.2
CHASE MANHATTAN CORP. 2.2
COMMERCIAL FEDERAL CORP. 2.1
PEOPLES HERITAGE FINANCIAL GROUP, INC. 2.1
TOP INDUSTRIES AS OF AUGUST 31, 1997
SAVINGS BANKS, FEDERAL
CHARTER 23.2%
NATIONAL COMMERCIAL
BANKS 18.9%
SAVINGS BANKS &
SAVINGS & LOANS 17.3%
MORTGAGE BANKERS 8.2%
FEDERAL & FEDERALLY SPONSORED
CREDIT AGENCIES 4.1%
ALL OTHERS 28.3%
ROW: 1, COL: 1, VALUE: 28.3
ROW: 1, COL: 2, VALUE: 4.1
ROW: 1, COL: 3, VALUE: 8.199999999999999
ROW: 1, COL: 4, VALUE: 17.3
ROW: 1, COL: 5, VALUE: 18.9
ROW: 1, COL: 6, VALUE: 23.2
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
HOME FINANCE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Bill Rubin,
Portfolio Manager of
Fidelity Select Home
Finance Portfolio
Q. HOW DID THE FUND PERFORM, BILL?
A. For the six-month period that ended August 31, 1997, the fund
returned 13.52%. The Standard & Poor's 500 Index returned 14.78% in
that same time. For the 12 months that ended August 31, 1997, the fund
returned 52.38% while the index returned 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. The fund's performance was hurt early in the period - as the
Federal Reserve Board raised interest rates in March - but has
rebounded nicely from that point due to positive economic trends, a
favorable backdrop in the mortgage finance industry and positive
developments concerning individual companies. In the housing area,
home prices in the U.S. continued to rise at a modest to healthy pace,
supporting both mortgage loan business and credit quality. Many
financial services companies - through smarter overall management -
continued to improve their profit margins and returns, and experienced
rapid earnings growth. Also, more dependable earnings, acquisitions,
consolidation and stock buybacks played a key role in helping to
support stock valuations.
Q. YOU MENTIONED THAT BUSINESS MANAGEMENT HAS IMPROVED. WHAT ARE
THRIFTS AND BANKS DOING DIFFERENTLY?
A. Company managements are aggressively controlling operating
expenses, improving efficiency and taking advantage of fee-income
opportunities with customers. Managements also are scrutinizing more
closely their lending practices, as well as decisions on how to
redeploy capital. If they cannot make loans that will result in a
higher profit margin or return, managements are using the capital to
buy back their stock, which increases a company's earnings per share.
Managements also are using this cash - as well as their stock - to
acquire other companies. Ideally, because of excess capital and
smarter decision-making, these companies are finding ways to
simultaneously grow their loan business, make acquisitions and buy
back stock.
Q. Q: CAN YOU DISCUSS THE RECENT TRANSACTION INVOLVING GREAT WESTERN,
WASHINGTON MUTUAL AND AHMANSON AND EXPLAIN ITS EFFECT ON THE FUND?
A. Washington Mutual and Ahmanson engaged in a spirited bidding war
for Great Western, an attractive West Coast thrift, with Washington
Mutual emerging as the victor. The fund has held all three stocks for
quite some time, and the takeover situation boosted the value of each
- - it was a win/win/win proposition. Great Western's stock rose on the
takeover valuation, while Washington Mutual's stock climbed on the
prospects for cost savings and revenue enhancement. Ahmanson's stock
rose as well, as its own prospects for strong earnings per share
growth and future consolidation involvement played a role.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Prior to its conversion to Washington Mutual stock, Great Western
was a leading contributor to performance. I'd also add Charter One
Financial, Greenpoint Financial, Ahmanson, Green Tree Financial and
People's Heritage to the list of big pluses. On the down side, home
equity lenders Cityscape and Aames Financial were disappointments.
Q. WHAT'S YOUR OUTLOOK?
A. The positive, near-term growth outlook for thrifts and banks should
remain in place if companies continue the proactive management I've
mentioned. In addition, continued acquisitions will keep the industry
consolidation trend intact and should support the high valuations
we've seen. In terms of the portfolio, I'm pleased with its current
allocation and feel confident that the fund can continue to achieve
solid returns.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 098
TRADING SYMBOL: FSVLX
SIZE: as of August 31, 1997, more than
$1.3 billion
MANAGER: Bill Rubin, since 1996; manager,
Fidelity Select Defense & Aerospace Portfolio,
1994-1997; equity analyst, various industry
sectors since 1994; joined Fidelity in 1994
(checkmark)
HOME FINANCE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.6%
MISSILES & SPACE VEHICLES - 0.6%
Orbital Sciences Corp. (a) 380,100 $ 8,243,419 68556410
AUTOS, TIRES, & ACCESSORIES - 0.5%
AUTO DEALERS, GAS STATIONS - RETAIL - 0.5%
Ugly Duckling Corp. (a) 475,000 6,590,625 90351210
BANKS - 22.6%
COMMERCIAL BANKS, NEC - 0.1%
Norwalk Savings Society 35,000 1,220,625 66920410
NATIONAL COMMERCIAL BANKS - 18.9%
Advanta Corp. 150,000 4,968,750 00794210
Banc One Corp. 50,200 2,691,975 05943810
Bank of New York Co., Inc. 325,100 14,507,588 06405710
BankBoston Corp. 172,148 14,309,803 06605R10
BankAmerica Corp. 288,600 18,993,488 06605010
Chase Manhattan Corp. 257,500 28,630,781 16161A10
Citicorp 168,800 21,543,100 17303410
Comerica, Inc. 106,400 7,534,450 20034010
CoreStates Financial Corp. 79,900 4,913,850 21869510
First Savings Bank of Washington
Bancorp, Inc. 87,000 2,153,250 33620W10
First Tennessee National Corp. 45,000 2,396,250 33716210
First Union Corp. 169,374 8,140,538 33735810
Mellon Bank Corp. 162,600 7,825,125 58550910
National City Corp. 106,721 6,029,737 63540510
NationsBank Corp. 305,300 18,127,188 63858510
Norwest Corp. 105,000 6,030,938 66938010
PNC Financial Corp. 145,000 6,271,250 69347510
Peoples Heritage Financial Group, Inc. 743,500 27,695,375 71114710
Republic New York Corp. 90,900 9,731,981 76071910
Riggs National Corp. 210,000 4,410,000 76657010
St. Francis Capital Corp. 10,000 337,500 78937410
SouthTrust Corp. 40,000 1,790,000 84473010
T.F. Financial Corp. (c) 245,400 4,723,950 87239110
U.S. Bancorp 83,400 7,302,713 90297310
Union Planters Corp. 195,203 10,004,154 90806810
UnionBanCal Corp. 51,900 4,012,519 90890610
Wells Fargo & Co. 23,900 6,076,575 94974010
251,152,828
STATE BANKS FEDERAL RESERVE - 3.6%
Crestar Financial Corp. 100,732 4,532,161 22609110
North Fork Bancorp., Inc. 885,016 22,070,087 65942410
R&G Financial Corp. Class B (c) 185,000 6,752,500 74913610
T.R. Financial Corp. 354,600 9,795,825 87263010
Trust Co. of New Jersey 17,000 310,250 89830410
U.S. Trust Corp. 183,240 3,939,660 90290010
47,400,483
TOTAL BANKS 299,773,936
CREDIT & OTHER FINANCE - 16.4%
BANK HOLDING COMPANY OFFICES - 3.7%
Fleet Financial Group, Inc. 106,400 6,856,150 33891510
Greenpoint Financial Corp. 656,600 40,421,938 39538410
Little Falls Bancorp, Inc. 110,000 1,911,250 53710110
49,189,338
BUSINESS CREDIT - 0.2%
Federal Agricultural Mortgage Corp.
Class C (non-vtg.) (a) 60,000 2,205,000 31314830
SHARES VALUE (NOTE 1)
FINANCIAL SERVICES - 0.7%
ContiFinancial Corp. (a) 103,300 $ 3,395,988 21075V10
RCSB Financial, Inc. 95,000 4,643,125 74937110
Wilshire Financial Services Group, Inc. (a) 81,300 1,382,100
97186710
9,421,213
MORTGAGE BANKERS - 8.2%
Aames Financial Corp. 882,450 15,718,641 00253A10
Cityscape Financial Corp. (a) 324,900 3,350,531 17877810
Countrywide Credit Industries, Inc. 219,600 7,397,775 22237210
Delta Financial Corp. (a) 413,300 8,136,844 24791810
First Alliance Mortgage Co. (a) 113,500 3,121,250 31793610
Homeside, Inc. 338,100 7,691,775 43760810
IMC Mortgage Co. (a) 270,000 4,505,625 44992310
Imperial Credit Industries (a) 227,000 4,227,875 45272910
Imperial Credit Mortgage
Holdings, Inc. 177,800 4,389,438 45292210
Life Financial Corp. 209,200 3,582,550 53184P10
Long Beach Financial Corp. 858,600 9,766,575 54244610
Money Store, Inc. 489,800 13,959,300 60934T10
New Century Financial Corp. 143,400 2,419,875 64352D10
North American Mortgage Co. 383,200 9,915,300 65703710
Resource Bancshares Mortgage
Group, Inc. 97,500 1,645,313 76119710
Southern Pacific Funding Corp. (a) 233,000 3,480,438 84357610
United Companies Financial Corp. 212,600 6,059,100 90987010
109,368,205
PERSONAL CREDIT INSTITUTIONS - 3.6%
Associates First Capital Corp. 50,000 2,903,125 04600810
Beneficial Corp. 96,200 6,884,313 08172110
FIRSTPLUS Financial Group, Inc. (a) 280,600 12,907,600 33763B10
Green Tree Financial Corp. 575,100 25,268,456 39350510
47,963,494
TOTAL CREDIT & OTHER FINANCE 218,147,250
FEDERAL SPONSORED CREDIT - 4.1%
FEDERAL & FEDERALLY SPONSORED CREDIT AGENCIES - 4.1%
Federal Home Loan
Mortgage Corporation 720,600 23,464,538 31340030
Federal National
Mortgage Association 588,900 25,911,600 31358610
SLM Holding Corp. 40,900 5,541,950 78442A10
54,918,088
INSURANCE - 2.8%
INSURANCE BROKERS & SERVICES - 0.0%
Stewart Information Services Corp. 12,900 316,856 86037210
INSURANCE CARRIERS - 0.5%
MGIC Investment Corp. 120,000 6,037,500 55284810
LIFE INSURANCE - 0.7%
Providian Financial Corp. 102,500 3,818,125 74406A10
SunAmerica, Inc. 101,300 5,457,537 86693010
9,275,662
PROPERTY-CASUALTY & REINSURANCE - 1.6%
PMI Group, Inc. 374,600 21,656,563 69344M10
TOTAL INSURANCE 37,286,581
LODGING & GAMING - 1.1%
HOTELS, MOTELS, & TOURIST COURTS - 1.1%
HFS, Inc. (a) 256,500 14,283,844 40418110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
REAL ESTATE INVESTMENT TRUSTS - 2.5%
Capstead Mortgage Corp. 453,531 $ 11,905,189 14067E10
Criimi Mae, Inc. 92,000 1,535,250 22660310
INMC Mortgage Holdings, Inc. 150,000 3,590,625 44977L10
Ocwen Asset Investment Corp. 200,000 4,675,000 67574M10
Redwood Trust, Inc. 100,142 3,842,949 75807540
Thornburg Mortgage Asset Corp. 302,000 6,983,750 88521810
32,532,763
SAVINGS & LOANS - 42.6%
SAVINGS BANKS & SAVINGS & LOANS - 17.3%
Andover Bancorp., Inc. 87,500 2,668,750 03425810
Astoria Financial Corp. 604,400 29,086,750 04626510
Bankers Corp. 79,500 2,245,875 06612010
Bay View Capital, Inc. 422,598 10,934,723 07262L10
BostonFed Bancorp, Inc. 11,535 217,723 10117810
Cameron Financial Corp. 110,000 1,911,250 13342510
Charter One Financial Corp. 833,000 45,294,375 16090310
Coast Savings Financial, Inc. (a) 276,800 12,750,100 19039M10
Commercial Federal Corp. 673,550 28,331,197 20164710
First Federal Savings & Loan Association 118,400 3,848,000
31994410
First Financial Corp. of Wisconsin 332,425 10,720,706 32022710
FirstFed Financial Corp. (a) 406,600 13,722,750 33790710
GA Financial, Inc. 292,700 5,488,125 36143710
Golden West Financial Corp. 6,800 559,725 38131710
MAF Bancorp., Inc. 150,000 4,612,500 55261R10
Pamrapo Bancorp, Inc. 35,000 726,250 69773810
Sovereign Bancorp., Inc. 969,020 15,019,810 84590510
TCF Financial Corp. 631,100 33,645,519 87227510
Webster Financial Corp. 118,600 6,270,975 94789010
Westcorp, Inc. 90,900 1,960,031 95790710
230,015,134
SAVINGS BANKS, NO FEDERAL CHARTER - 2.1%
Acadiana Bancshares, Inc. (c) 153,300 3,295,950 00428010
Avondale Financial Corp. (a)(c) 297,700 4,242,225 05434110
Dime Financial Corp. (c) 262,800 7,424,100 25432H10
Downey Financial Corp. 129,250 2,859,656 26101810
ITLA Capital Corp. (a) 158,000 2,804,500 45056510
People's Bancshares, Inc. 102,500 1,716,875 70979510
SIS Bancorp., Inc. 189,200 5,534,100 78427E10
27,877,406
SAVINGS BANKS, FEDERAL CHARTER - 23.2%
Affiliated Community Bancorp., Inc. 153,750 4,035,938 00818810
Ahmanson (H.F.) & Co. 684,600 34,743,450 00867710
Albank Financial Corp. 207,500 7,988,750 01204610
Bank Plus Corp. (a) 518,000 5,633,250 06444610
Bank United Corp. Class A 569,300 20,565,963 06541210
Carver Bancorp, Inc. (c) 142,000 1,757,250 14687510
Catskill Financial Corp. 80,000 1,310,000 14934810
CenFed Financial Corp. 132,270 4,364,910 15131U10
Citizens First Financial Corp. (a)(c) 174,700 2,751,525 17462310
Coastal Bancorp, Inc. 30,000 885,000 19041P10
D & N Financial Corp. (a) 65,000 1,210,625 23286410
Dime Community Bancorp, Inc. 475,900 9,339,538 25392210
Dime Bancorp., Inc. 1,747,100 33,740,869 25429Q10
First Bergen Bancorp (c) 235,000 4,171,250 31891510
First Defiance Financial Corp. (c) 457,900 6,754,025 32006W10
First Federal Bancshares of
Arkansas, Inc. 75,000 1,575,000 32020F10
First Palm Beach Bancorp, Inc. 40,000 1,400,000 33589B10
Flagstar Bancorp, Inc. (c) 320,000 6,280,000 33793010
Golden State Bancorp 602,200 17,388,525 38119710
HF Bancorp, Inc. (a) 115,000 1,681,875 40391010
Haven Bancorp., Inc. 200,400 7,590,150 41935210
SHARES VALUE (NOTE 1)
Long Island Bancorp., Inc. 488,300 $ 19,470,963 54266210
ML Bancorp, Inc. 138,900 2,847,450 55305M10
Ocean Financial Corp. 247,500 8,322,188 67490410
Ocwen Financial Corp. 50,000 2,134,375 67574610
PFF Bancorp, Inc. (a) 489,300 9,419,025 69331W10
Provident Financial Holdings, Inc. (a) 180,000 3,465,000 74386810
Quaker City Bancorp (a) 112,500 2,306,250 74731K10
RedFed Bancorp, Inc. (a)(c) 387,500 6,732,813 75734110
SGV Bancorp., Inc. (a)(c) 140,000 2,117,500 78422T10
Washington Federal, Inc. 575,280 15,676,380 93882410
Washington Mutual, Inc. 1,000,015 59,875,886 93932210
Yonkers Financial Corp. 85,000 1,476,875 98607310
309,012,598
TOTAL SAVINGS & LOANS 566,905,138
SECURITIES INDUSTRY - 1.8%
SECURITY & COMMODITY BROKERS - 1.7%
Advest Group, Inc. (The) 100,100 2,277,275 00756610
Edwards (A.G.), Inc. 100,000 3,975,000 28176010
McDonald & Co. Investments, Inc. 99,300 4,381,613 58004710
Morgan Keegan, Inc. 130,000 3,323,125 61741010
Morgan Stanley Dean Witter Discover
and Co. 150,000 7,218,750 61744644
Quick & Reilly Group, Inc. (The) 42,500 1,455,625 74837610
22,631,388
SECURITY BROKERS & DEALERS - 0.1%
Interra Financial, Inc. 28,800 1,252,800 46069M10
TOTAL SECURITIES INDUSTRY 23,884,188
SERVICES - 0.6%
LEGAL SERVICES - 0.2%
Lawyers Title Corp. 104,100 2,901,788 52102910
MANAGEMENT CONSULTING SERVICES - 0.4%
Aresco, Inc. (a) 171,000 5,097,938 03190910
Firstmark Corp. (a) 103,400 180,950 33790820
5,278,888
TOTAL SERVICES 8,180,676
TOTAL COMMON STOCKS
(Cost $976,572,064) 1,270,746,508
CONVERTIBLE PREFERRED STOCKS - 0.7%
REAL ESTATE INVESTMENT TRUSTS - 0.7%
Criimi Mae, Inc. $2.71875 179,500 6,877,094 22660320
Walden Residential Properties, Inc.,
Series B, $2.29 80,000 2,280,000 93121030
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $7,973,750) 9,157,094
CASH EQUIVALENTS - 3.7%
Taxable Central Cash Fund (b)
(Cost $49,686,145) 49,686,145 49,686,145 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,034,231,959) $ 1,329,589,747
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements)
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $389,848,620 and $355,109,533, respectively (see Note 3 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 $142,929 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and the average daily balances during the period for which loans were
outstanding amounted to $6,191,000 and $3,951,400, respectively. The
weighted average interest rate was 5.8% (see Note 7 of Notes to
Financial Statements).
Transactions during the period with companies that are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Acadiana Bancshares, Inc. $ - $ - $ 27,594 $ 3,295,950
Avondale Financial Corp. 667,400 1,284,963 - 4,242,225
Carver Bancorp, Inc. - - 7,100 1,757,250
Citizens First Financial Corp. - - - 2,751,525
Dime Financial Corp. - 96,563 52,560 7,424,100
First Bergen Bancorp - - 14,100 4,171,250
First Defiance Financial Corp. - 282,813 76,464 6,754,025
Flagstar Bancorp, Inc. 270,000 - - 6,280,000
R&G Financial Corp. Class B 985,625 - 12,904 6,752,500
RedFed Bancorp, Inc. 312,500 - - 6,732,813
SGV Bancorp., Inc. - - - 2,117,500
TF Financial Corp. - 73,125 49,080 4,723,950
Wilshire Financial Services
Group, Inc. - - - -
Totals $ 2,235,525 $ 1,737,464 $ 239,802 $ 57,003,088
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $1,034,578,609. Net unrealized appreciation
aggregated $295,011,138, of which $309,980,053 related to appreciated
investment securities and $14,968,915 related to depreciated
investment securities.
HOME FINANCE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 1,329,589,747
SECURITIES, AT
VALUE
(COST
$1,034,231,
959) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,504,864
INVESTMENTS
SOLD
RECEIVABLE FOR 3,503,098
FUND SHARES
SOLD
DIVIDENDS 1,060,359
RECEIVABLE
INTEREST 241,069
RECEIVABLE
REDEMPTION FEES 7,028
RECEIVABLE
OTHER 35,856
RECEIVABLES
TOTAL ASSETS 1,335,942,021
LIABILITIES
PAYABLE FOR $ 29,756
INVESTMENTS
PURCHASED
PAYABLE FOR 13,529,714
FUND SHARES
REDEEMED
ACCRUED 676,701
MANAGEMENT
FEE
OTHER PAYABLES 696,050
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 14,932,221
NET ASSETS $ 1,321,009,800
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 941,341,737
UNDISTRIBUTED 4,169,881
NET INVESTMENT
INCOME
ACCUMULATED 80,140,394
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 295,357,788
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 1,321,009,800
26,991,768
SHARES
OUTSTANDING
NET ASSET $48.94
VALUE AND
REDEMPTION
PRICE PER
SHARE
($1,321,009,
800 (DIVIDED BY)
26,991,768
SHARES)
MAXIMUM $50.45
OFFERING PRICE
PER SHARE
(100/97.00
OF $48.94)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 9,699,840
INCOME
DIVIDENDS
(INCLUDING
$239,802
RECEIVED FROM
AFFILIATED
ISSUERS)
INTEREST 1,380,458
TOTAL INCOME 11,080,298
EXPENSES
MANAGEMENT $ 3,426,860
FEE
TRANSFER AGENT 3,147,844
FEES
ACCOUNTING FEES 390,061
AND EXPENSES
NON-INTERESTED 2,381
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 37,967
AND EXPENSES
REGISTRATION FEES 49,401
AUDIT 23,791
LEGAL 2,379
INTEREST 3,195
MISCELLANEOUS 3,833
TOTAL EXPENSES 7,087,712
BEFORE
REDUCTIONS
EXPENSE (101,863) 6,985,849
REDUCTIONS
NET INVESTMENT 4,094,449
INCOME
REALIZED AND 80,640,475
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
(INCLUDING
REALIZED GAIN
OF $240,404
ON SALES OF
INVESTMENTS IN
AFFILIATED
ISSUERS)
CHANGE IN NET 51,515,437
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 132,155,912
NET INCREASE $ 136,250,361
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 4,432,761
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 3,273
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 131,625
WITHHELD BY
FSC
EXPENSE $ 90,480
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 5,972
CREDITS
TRANSFER 5,411
AGENT CREDITS
$ 101,863
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 4,094,449 $ 9,748,801
NET
INVESTMENT
INCOME
NET REALIZED 80,640,475 116,726,321
GAIN (LOSS)
CHANGE IN NET 51,515,437 155,888,034
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 136,250,361 282,363,156
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (3,115,273) (6,671,424)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (55,297,244) (44,835,125)
REALIZED GAIN
TOTAL (58,412,517) (51,506,549)
DISTRIBUTIONS
SHARE 560,037,727 1,276,779,331
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 57,568,932 50,762,550
OF
DISTRIBUTIONS
COST OF SHARES (552,210,699) (999,588,979)
REDEEMED
REDEMPTION 947,966 983,081
FEES
NET INCREASE 66,343,926 328,935,983
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 144,181,770 559,792,590
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 1,176,828,030 617,035,440
PERIOD
END OF PERIOD $ 1,321,009,800 $ 1,176,828,030
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$4,169,88
1 AND
$4,942,44
1,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 12,214,689 32,961,709
ISSUED IN 1,467,475 1,354,504
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (12,272,981) (27,265,709)
NET INCREASE 1,409,183 7,050,504
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 46.00 $ 33.30 $ 23.92 $ 25.03 $ 22.18 $ 15.38
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .16 .53 .53 .20 .03 .09
INVESTMENT
INCOME D
NET REALIZED 5.37 14.60 9.72 2.34 4.15 6.80
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.53 15.13 10.25 2.54 4.18 6.89
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.14) (.32) (.19) (.12) (.01) (.01)
INVESTMENT
INCOME
FROM NET (2.49) (2.16) (.73) (3.60) (1.40) (.28)
REALIZED GAIN
TOTAL (2.63) (2.48) (.92) (3.72) (1.41) (.29)
DISTRIBUTIONS
REDEMPTION FEES .04 .05 .05 .07 .08 .20
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 48.94 $ 46.00 $ 33.30 $ 23.92 $ 25.03 $ 22.18
END OF PERIOD
TOTAL RETURN B, C 13.52% 47.50% 43.24% 12.43% 19.61% 46.43%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 1,321,010 $ 1,176,828 $ 617,035 $ 229,924 $ 155,563 $ 337,903
OF PERIOD
(000 OMITTED)
RATIO OF 1.23% A 1.38% 1.35% 1.47% 1.58% 1.55% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.21% A, E 1.34% E 1.32% E 1.45% E 1.58% 1.55% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .71% A 1.41% 1.80% .80% .11% .61% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 64% A 78% 81% 124% 95% 61% A
TURNOVER RATE
AVERAGE $ .0410 $ .0417
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
INSURANCE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five and past 10 year total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
INSURANCE 18.70% 47.34% 165.95% 328.89%
INSURANCE 15.14% 42.92% 157.97% 316.02%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
INSURANCE 47.34% 21.61% 15.67%
INSURANCE 42.92% 20.87% 15.32%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115550 S00000000000001
Insurance S&P 500
00045 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9700.00 9781.00
1987/10/31 7878.33 7674.17
1987/11/30 7325.60 7041.82
1987/12/31 7501.67 7577.70
1988/01/31 8078.72 7896.72
1988/02/29 8070.81 8264.71
1988/03/31 7881.10 8009.33
1988/04/30 7825.76 8098.24
1988/05/31 8039.19 8168.69
1988/06/30 8402.81 8543.63
1988/07/31 8442.34 8511.17
1988/08/31 8529.29 8221.79
1988/09/30 8821.77 8572.04
1988/10/31 8782.25 8810.34
1988/11/30 8592.53 8684.35
1988/12/31 8807.07 8836.33
1989/01/31 9476.57 9483.15
1989/02/28 9540.33 9247.02
1989/03/31 9763.50 9462.47
1989/04/30 10082.30 9953.57
1989/05/31 10138.09 10356.69
1989/06/30 10361.16 10297.66
1989/07/31 11231.25 11227.54
1989/08/31 11574.49 11447.60
1989/09/30 11734.14 11400.66
1989/10/31 12117.29 11136.17
1989/11/30 12444.57 11363.35
1989/12/31 12138.89 11636.07
1990/01/31 11108.53 10855.29
1990/02/28 11422.47 10995.32
1990/03/31 11366.12 11286.70
1990/04/30 10971.69 11004.53
1990/05/31 11977.89 12077.47
1990/06/30 12010.09 11995.34
1990/07/31 11833.00 11956.96
1990/08/31 10601.40 10876.05
1990/09/30 9683.74 10346.39
1990/10/31 9297.36 10301.90
1990/11/30 10528.95 10967.40
1990/12/31 10947.54 11273.39
1991/01/31 11535.16 11764.91
1991/02/28 12702.36 12606.10
1991/03/31 13539.53 12911.17
1991/04/30 13467.08 12942.15
1991/05/31 13805.16 13501.25
1991/06/30 12946.99 12882.90
1991/07/31 13427.72 13483.24
1991/08/31 13346.24 13802.79
1991/09/30 13476.60 13572.29
1991/10/31 13884.00 13754.15
1991/11/30 13761.78 13199.86
1991/12/31 14963.13 14709.93
1992/01/31 14946.78 14436.32
1992/02/29 15347.43 14623.99
1992/03/31 15126.66 14338.83
1992/04/30 14742.36 14760.39
1992/05/31 14938.60 14832.71
1992/06/30 15251.13 14611.71
1992/07/31 16115.24 15209.33
1992/08/31 15643.10 14897.53
1992/09/30 16471.57 15073.32
1992/10/31 17175.33 15126.08
1992/11/30 17763.29 15641.88
1992/12/31 18330.02 15834.28
1993/01/31 19096.40 15967.28
1993/02/28 19457.05 16184.44
1993/03/31 20484.90 16525.93
1993/04/30 19997.46 16126.00
1993/05/31 19482.38 16558.18
1993/06/30 19690.22 16606.20
1993/07/31 20376.98 16539.77
1993/08/31 21416.17 17166.63
1993/09/30 21488.46 17034.45
1993/10/31 20864.95 17387.06
1993/11/30 19590.82 17221.88
1993/12/31 19828.76 17430.27
1994/01/31 20096.05 18022.90
1994/02/28 19214.99 17534.48
1994/03/31 18314.13 16769.97
1994/04/30 18512.12 16984.63
1994/05/31 19363.48 17263.18
1994/06/30 19254.59 16840.23
1994/07/31 19610.97 17392.59
1994/08/31 20145.55 18105.69
1994/09/30 20006.95 17662.10
1994/10/31 19759.46 18059.49
1994/11/30 18759.61 17401.77
1994/12/31 19759.46 17659.84
1995/01/31 20472.23 18117.75
1995/02/28 21095.90 18823.80
1995/03/31 21432.48 19379.29
1995/04/30 21630.49 19950.01
1995/05/31 22106.54 20747.42
1995/06/30 22800.78 21229.38
1995/07/31 23485.10 21933.35
1995/08/31 24169.42 21988.40
1995/09/30 25369.46 22916.31
1995/10/31 24605.80 22834.50
1995/11/30 26073.62 23836.93
1995/12/31 26637.66 24296.03
1996/01/31 27413.32 25123.07
1996/02/29 27321.46 25355.96
1996/03/31 27015.28 25600.14
1996/04/30 26680.20 25977.48
1996/05/31 27219.40 26647.44
1996/06/30 27706.76 26748.97
1996/07/31 27094.97 25567.20
1996/08/31 28235.59 26106.41
1996/09/30 29614.71 27575.68
1996/10/31 31170.10 28336.22
1996/11/30 33088.42 30478.15
1996/12/31 32952.51 29874.38
1997/01/31 34306.28 31740.93
1997/02/28 35047.63 31989.78
1997/03/31 33156.65 30675.32
1997/04/30 35113.46 32506.64
1997/05/31 37693.18 34485.64
1997/06/30 40453.14 36030.60
1997/07/31 43866.48 38897.55
1997/08/29 41602.19 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115553 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Insurance Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$41,602 - a 316.02% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
HARTFORD FINANCIAL SERVICES GROUP, INC. 4.5
ALLSTATE CORP. 4.4
AMERICAN INTERNATIONAL GROUP, INC. 4.4
CIGNA CORP. 4.0
SUNAMERICA, INC. 3.4
AMERICAN BANKERS INSURANCE GROUP, INC. 3.2
PROGRESSIVE CORP. 3.1
TRAVELERS GROUP, INC. (THE) 3.0
UNUM CORP. 2.9
FRONTIER INSURANCE GROUP, INC. 2.7
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 14.4
ROW: 1, COL: 2, VALUE: 4.8
ROW: 1, COL: 3, VALUE: 5.8
ROW: 1, COL: 4, VALUE: 7.4
ROW: 1, COL: 5, VALUE: 21.5
ROW: 1, COL: 6, VALUE: 46.1
PROPERTY-CASUALTY &
REINSURANCE 46.1%
LIFE INSURANCE 21.5%
INSURANCE CARRIERS 7.4%
MULTI-LINE INSURANCE 5.8%
INSURANCE BROKERS & SERVICES 4.8%
ALL OTHERS 14.4%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
INSURANCE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Thomas Allen,
Portfolio Manager of
Fidelity Select Insurance Portfolio
Q. HOW DID THE FUND PERFORM, TOM?
A. For the six months that ended on August 31, 1997, the fund had a
total return of 18.70%. For the 12 months, the fund returned 47.34%.
During the same periods, the Standard & Poor's 500 Index returned
14.78% and 40.65%, respectively.
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THIS PERIOD?
A. We've had the best of all worlds: good earnings and industry
consolidation. We've also had a relatively benign interest-rate
environment, which has been particularly important in the
interest-rate-sensitive insurance industry. Both the property and
casualty companies and the life insurance companies had strong
earnings growth as well as price/earnings (P/E) expansion, as the
market has been willing to pay more for their earnings.
Q. HOW DID PROPERTY AND CASUALTY COMPANIES DO IN THIS ENVIRONMENT?
A. They had relatively strong results, helped by modest claim losses.
An absence of major storms helped this area, as well as limited
automobile claim losses. Given this favorable loss pattern, companies
with strong balance sheets have been able to release money from
reserves set aside to cover losses and to treat this money as current
income. The only area that could be better is revenue growth. The
property and casualty industry is over-capitalized. When you have too
much capital in this industry, you have too much capacity and you see
price competition, which limits premium growth. So far, this hasn't
shown up in earnings.
Q. HOW DID LIFE INSURANCE COMPANIES DO?
A. Life insurance companies have done well. They have continued to
undergo consolidation, particularly among small- and mid-cap
companies. Life companies also have experienced P/E multiple expansion
and delivered strong earnings growth. They are now being seen as asset
gatherers, similar to mutual fund companies, particularly because of
the strength of annuities, which are a retirement savings product
similar to mutual funds, but with an insurance wrapper.
Q. WHAT COMPANIES, IN PARTICULAR, CONTRIBUTED TO THE FUND'S STRONG
PERFORMANCE?
A. The fund had four small- and mid-cap companies that were taken over
by larger companies, and this helped performance. The portfolio
companies that were acquired were Equitable of Iowa, Integon, Western
National and Unionamerica. We also were helped by the performance of
large-cap companies, notably American International Group and two
automobile insurers, Allstate Corporation and Progressive Corp.
(Ohio).
Q. WERE THERE ANY DISAPPOINTMENTS?
A. In hindsight, the main disappointment was the relatively poor
performance of a handful of small specialty companies. Lately, though,
the smaller-cap companies appeared to be gaining momentum.
Q. WHAT IS YOUR OUTLOOK, AND HOW DOES THIS OUTLOOK AFFECT YOUR
STRATEGY?
A. Insurance stocks are very interest-rate sensitive, more
interest-rate sensitive than the market as a whole. Regardless of the
individual company business prospects, if interest rates increase in
the short term, I would expect this group to underperform because the
stocks tend to trade like bond surrogates. Longer term, the outlook
for the fund is to invest in good underwriters with top-line revenue
growth. I am looking for growth at a reasonable price. In the property
and casualty group, I'm also focusing on companies with strong balance
sheets. As the pricing environment worsens, companies with strong
balance sheets have greater ability to make good on their earnings
estimates. Consolidation should continue among insurance companies,
and the fund will be interested in selected acquisition candidates.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: DECEMBER 16, 1985
FUND NUMBER: 045
TRADING SYMBOL: FSPCX
SIZE: AS OF AUGUST 31, 1997, MORE THAN
$138 MILLION
MANAGER: TOM ALLEN, SINCE FEBRUARY 1997;
ANALYST, PROPERTY, CASUALTY AND MULTI-LINE
INSURANCE, SINCE 1995; JOINED FIDELITY IN 1995
(CHECKMARK)
INSURANCE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 96.7%
SHARES VALUE (NOTE 1)
CREDIT & OTHER FINANCE - 2.2%
FINANCIAL SERVICES - 1.8%
Equitable Companies, Inc. 23,000 $ 1,000,496 29444G10
Transamerica Corp. 15,600 1,537,575 89348510
2,538,071
MORTGAGE BANKERS - 0.4%
Triad Guaranty, Inc. (a) 8,700 487,200 89592510
TOTAL CREDIT & OTHER FINANCE 3,025,271
HOLDING COMPANIES - 2.4%
Leucadia National Corp. 58,700 1,871,063 52728810
Partner Re Ltd. 36,400 1,446,900 70299522
3,317,963
INSURANCE - 92.1%
ACCIDENT & HEALTH INSURANCE - 3.9%
Aetna, Inc. 30,200 2,882,213 00811710
Provident Companies, Inc. 17,400 1,133,175 74386210
UICI (a) 45,700 1,371,000 90273710
5,386,388
INSURANCE BROKERS & SERVICES - 4.8%
Frontier Insurance Group, Inc. 107,780 3,772,300 35908110
Gallagher (Arthur J.) & Co. 34,900 1,247,675 36357610
Marsh & McLennan Companies, Inc. 13,800 941,850 57174810
Mutual Risk Management Ltd. 12,600 582,750 62835110
Poe & Associates, Inc. 2,200 81,950 73044410
6,626,525
INSURANCE CARRIERS - 7.4%
AFLAC, Inc. 62,400 3,435,900 00105510
AMBAC, Inc. 28,100 2,270,831 02313910
Blanch E.W. Holdings, Inc. 52,400 1,539,250 09321010
MBIA, Inc. 13,217 1,496,825 55262C10
MGIC Investment Corp. 28,400 1,428,875 55284810
10,171,681
LIFE INSURANCE - 21.5%
American Bankers Insurance Group, Inc. 66,000 4,356,000 02445610
American Heritage Life Investment Corp. 7,600 268,375 02652210
Amerus Life Holdings, Inc. 6,932 199,295 03073210
Amvestors Financial Corp. 24,600 581,175 03234330
Aon Corp. 54,100 2,755,719 03738910
Life USA Holding, Inc. (a) 64,500 975,563 53191820
Life RE Corp. 7,500 384,844 53216010
Penn Treaty American Corp. (a) 9,000 289,125 70787410
Protective Life Corp. 21,900 1,089,525 74367410
Providian Financial Corp. 100,200 3,732,450 74406A10
Reliastar Financial Corp. 25,474 1,904,182 75952U10
SunAmerica, Inc. 128,700 4,622,475 86693010
Torchmark Corp. 91,100 3,433,331 89102710
UNUM Corp. 95,500 3,939,375 90319210
Western National Corp. 35,100 978,413 95884510
29,509,847
MULTI-LINE INSURANCE - 5.8%
American Financial Group, Inc. 44,500 1,924,625 02608W10
CIGNA Corp. 30,200 5,537,925 12550910
Exel Ltd. 8,400 460,950 30199F22
7,923,500
PROPERTY-CASUALTY & REINSURANCE - 46.1%
Acceptance Insurance Co., Inc. 10,900 242,525 00430810
ACE Ltd. 40,200 3,341,625 00499G92
Allmerica Financial Corp. 6,300 260,663 01975410
SHARES VALUE (NOTE 1)
Allstate Corp. 83,100 $ 6,071,494 02000210
American International Group, Inc. 64,000 6,040,000 02687410
Berkley (W.R.) Corp. 2,500 138,281 08442310
Capital Re Corp. 29,300 1,488,806 14043210
Chubb Corp. (The) 51,700 3,457,438 17123210
Enhance Financial Services Group Corp. 46,000 2,127,500 29331010
Executive Risk, Inc. 19,900 1,150,469 30158610
Fremont General Corp. 28,900 1,152,388 35728810
General Re Corp. 11,100 2,152,013 37056310
HCC Insurance Holdings Inc. 54,200 1,432,913 40413210
Hartford Financial Services Group, Inc. 77,900 6,212,525 41651510
Highlands Insurance Group, Inc. (a) 10,500 247,406 43103210
Horace Mann Educators Corp. 15,500 846,688 44032710
Mercury General Corp. 15,100 1,321,250 58940010
Mid Ocean Ltd. 17,900 1,015,825 59599D23
NAC Re Corp. 14,600 688,025 62890710
Old Republic International Corp. 41,500 1,491,406 68022310
PMI Group, Inc. 58,000 3,353,125 69344M10
Philadelphia Consolidated Holding
Corp. (a) 34,000 1,406,750 71752810
Progressive Corp. 42,500 4,207,500 74331510
Reinsurance Group of America, Inc. 21,300 851,112 75935110
St. Paul Companies, Inc. (The) 11,600 851,150 79286010
Selective Insurance Group, Inc. 7,600 374,300 81630010
Transatlantic Holdings, Inc. 23,300 1,647,019 89352110
Travelers Group, Inc. (The) 64,566 4,099,941 89419010
USF&G Corp. 52,800 1,158,300 90329010
Terra Nova (Bermuda) Holdings Ltd. 33,800 764,725 90699Q22
Unionamerica Holdings PLC
sponsored ADR 44,900 898,000 90904810
Vesta Insurance Group Corp. 56,000 2,761,500 92539110
63,252,662
SURETY INSURANCE - 2.6%
Amerin Corp. (a) 8,000 185,000 03070X10
CapMAC Holdings, Inc. 80,000 2,220,000 14064910
MMI Companies, Inc. 36,300 909,769 55308710
Penn-America Group, Inc. 11,200 204,400 70724710
3,519,169
TOTAL INSURANCE 126,389,772
TOTAL COMMON STOCKS
(Cost $120,452,989) 132,733,006
CASH EQUIVALENTS - 3.3%
Taxable Central Cash Fund (b)
(Cost $4,576,671) 4,576,671 4,576,671 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $125,029,660) $ 137,309,677
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $133,461,507 and $56,066,619, respectively (see Note 3 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 $20,823 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $125,061,650. Net unrealized appreciation
aggregated $12,248,027, of which $13,762,059 related to appreciated
investment securities and $1,514,032 related to depreciated investment
securities.
INSURANCE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 137,309,677
SECURITIES, AT
VALUE
(COST
$125,029,66
0) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 8,685,482
INVESTMENTS
SOLD
RECEIVABLE FOR 391,726
FUND SHARES
SOLD
DIVIDENDS 118,536
RECEIVABLE
INTEREST 29,083
RECEIVABLE
REDEMPTION FEES 1,248
RECEIVABLE
TOTAL ASSETS 146,535,752
LIABILITIES
PAYABLE FOR $ 8,027,961
FUND SHARES
REDEEMED
ACCRUED 79,784
MANAGEMENT
FEE
OTHER PAYABLES 130,753
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 8,238,498
NET ASSETS $ 138,297,254
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 117,241,020
UNDISTRIBUTED 7,556
NET INVESTMENT
INCOME
ACCUMULATED 8,768,661
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 12,280,017
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 138,297,254
3,744,649
SHARES
OUTSTANDING
NET ASSET $36.93
VALUE AND
REDEMPTION
PRICE PER
SHARE
($138,297,2
54 (DIVIDED BY)
3,744,649
SHARES)
MAXIMUM $38.07
OFFERING PRICE
PER SHARE
(100/97.00
OF $36.93)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 554,662
INCOME
DIVIDENDS
INTEREST 188,198
TOTAL INCOME 742,860
EXPENSES
MANAGEMENT $ 294,496
FEE
TRANSFER AGENT 321,066
FEES
ACCOUNTING FEES 52,964
AND EXPENSES
NON-INTERESTED 157
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 7,599
AND EXPENSES
REGISTRATION FEES 60,252
AUDIT 9,822
LEGAL 95
MISCELLANEOUS 113
TOTAL EXPENSES 746,564
BEFORE
REDUCTIONS
EXPENSE (8,880) 737,684
REDUCTIONS
NET INVESTMENT 5,176
INCOME
REALIZED AND 8,814,620
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 6,897,556
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 15,712,176
NET INCREASE $ 15,717,352
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 359,940
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 134
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 23,610
WITHHELD BY
FSC
EXPENSE $ 8,776
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 104
CREDITS
$ 8,880
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 5,176 $ 17,362
NET
INVESTMENT
INCOME
NET REALIZED 8,814,620 5,349,488
GAIN (LOSS)
CHANGE IN NET 6,897,556 2,095,799
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 15,717,352 7,462,649
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (35,964)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (1,679,356) (1,652,709)
REALIZED GAIN
TOTAL (1,679,356) (1,688,673)
DISTRIBUTIONS
SHARE 163,747,222 82,947,138
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 1,650,586 1,660,671
OF
DISTRIBUTIONS
COST OF SHARES (83,614,297) (87,137,695)
REDEEMED
REDEMPTION 108,874 129,084
FEES
NET INCREASE 81,892,385 (2,400,802)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 95,930,381 3,373,174
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 42,366,873 38,993,699
PERIOD
END OF PERIOD $ 138,297,254 $ 42,366,873
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$7,556 AND
$5,935,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 4,697,329 2,922,405
ISSUED IN 55,575 58,747
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,307,248) (3,138,702)
NET INCREASE 2,445,656 (157,550)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 32.62 $ 26.77 $ 21.31 $ 19.41 $ 21.58 $ 18.03
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET - .01 .06 .05 - (.04)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 5.71 7.21 6.15 1.78 (.24) 5.12
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.71 7.22 6.21 1.83 (.24) 5.08
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.03) (.07) - (.01) -
INVESTMENT
INCOME
IN EXCESS OF - - - - - (.03)
NET INVESTMENT
INCOME
FROM NET (1.44) (1.45) (.72) - (1.96) (1.71)
REALIZED GAIN
TOTAL (1.44) (1.48) (.79) - (1.97) (1.74)
DISTRIBUTIONS
REDEMPTION FEES .04 .11 .04 .07 .04 .21
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 36.93 $ 32.62 $ 26.77 $ 21.31 $ 19.41 $ 21.58
END OF PERIOD
TOTAL RETURN B, C 18.70% 28.28% 29.51% 9.79% (1.24)% 31.98%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 138,297 $ 42,367 $ 38,994 $ 21,838 $ 18,419 $ 26,367
OF PERIOD
(000 OMITTED)
RATIO OF 1.49% A 1.82% 1.77% 2.36% 1.93% 2.49% A, F
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.48% A, E 1.77% E 1.74% E 2.34% E 1.93% 2.49% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .01% A .05% .26% .25% (.02)% (.26)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 122% A 142% 164% 265% 101% 81% A
TURNOVER RATE
AVERAGE $ .0351 $ .0261
COMMISSION
RATE G
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
DURING THE
PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION.
WITHOUT THIS
REIMBURSEMENT,
THE FUND'S
EXPENSE RATIO
WOULD HAVE BEEN
HIGHER. G FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
REGIONAL BANKS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
REGIONAL BANKS 11.93% 48.01% 246.06% 615.43%
REGIONAL BANKS 8.57% 43.57% 235.68% 593.97%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
REGIONAL BANKS 48.01% 28.18% 21.75%
REGIONAL BANKS 43.57% 27.40% 21.38%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 145939 S00000000000001
Regional Banks S&P 500
00507 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9448.55 9781.00
1987/10/31 7901.20 7674.17
1987/11/30 7649.75 7041.82
1987/12/31 8007.28 7577.70
1988/01/31 8574.25 7896.72
1988/02/29 8793.08 8264.71
1988/03/31 8992.02 8009.33
1988/04/30 8892.55 8098.24
1988/05/31 9051.70 8168.69
1988/06/30 9688.31 8543.63
1988/07/31 9738.04 8511.17
1988/08/31 9608.73 8221.79
1988/09/30 9976.77 8572.04
1988/10/31 10096.13 8810.34
1988/11/30 9847.46 8684.35
1988/12/31 10065.58 8836.33
1989/01/31 10704.67 9483.15
1989/02/28 10864.44 9247.02
1989/03/31 11759.16 9462.47
1989/04/30 12068.05 9953.57
1989/05/31 12994.72 10356.69
1989/06/30 12778.58 10297.66
1989/07/31 13915.88 11227.54
1989/08/31 14259.22 11447.60
1989/09/30 14377.24 11400.66
1989/10/31 13046.81 11136.17
1989/11/30 13025.35 11363.35
1989/12/31 12747.68 11636.07
1990/01/31 11599.13 10855.29
1990/02/28 12076.75 10995.32
1990/03/31 11781.08 11286.70
1990/04/30 11110.15 11004.53
1990/05/31 11883.43 12077.47
1990/06/30 11417.19 11995.34
1990/07/31 10723.51 11956.96
1990/08/31 9722.80 10876.05
1990/09/30 8540.15 10346.39
1990/10/31 8289.97 10301.90
1990/11/30 9393.02 10967.40
1990/12/31 10112.83 11273.39
1991/01/31 10783.93 11764.91
1991/02/28 11698.02 12606.10
1991/03/31 12357.55 12911.17
1991/04/30 13190.64 12942.15
1991/05/31 14046.88 13501.25
1991/06/30 13213.78 12882.90
1991/07/31 14313.00 13483.24
1991/08/31 15342.80 13802.79
1991/09/30 15041.96 13572.29
1991/10/31 15666.78 13754.15
1991/11/30 14949.39 13199.86
1991/12/31 16766.35 14709.93
1992/01/31 17815.01 14436.32
1992/02/29 19253.86 14623.99
1992/03/31 18985.60 14338.83
1992/04/30 20095.23 14760.39
1992/05/31 20948.79 14832.71
1992/06/30 21157.82 14611.71
1992/07/31 21182.36 15209.33
1992/08/31 20053.29 14897.53
1992/09/30 20986.00 15073.32
1992/10/31 21881.89 15126.08
1992/11/30 23673.68 15641.88
1992/12/31 24901.79 15834.28
1993/01/31 25939.36 15967.28
1993/02/28 26746.37 16184.44
1993/03/31 27886.42 16525.93
1993/04/30 26450.81 16126.00
1993/05/31 26192.25 16558.18
1993/06/30 27653.12 16606.20
1993/07/31 27730.69 16539.77
1993/08/31 28118.53 17166.63
1993/09/30 29088.13 17034.45
1993/10/31 27523.84 17387.06
1993/11/30 26657.66 17221.88
1993/12/31 27683.94 17430.27
1994/01/31 29298.45 18022.90
1994/02/28 28475.37 17534.48
1994/03/31 28000.51 16769.97
1994/04/30 29484.27 16984.63
1994/05/31 30957.69 17263.18
1994/06/30 30188.95 16840.23
1994/07/31 30989.72 17392.59
1994/08/31 31790.49 18105.69
1994/09/30 29900.67 17662.10
1994/10/31 29772.55 18059.49
1994/11/30 27850.71 17401.77
1994/12/31 27744.35 17659.84
1995/01/31 29141.79 18117.75
1995/02/28 30692.61 18823.80
1995/03/31 30948.24 19379.29
1995/04/30 31715.13 19950.01
1995/05/31 33794.25 20747.42
1995/06/30 34220.30 21229.38
1995/07/31 35549.58 21933.35
1995/08/31 36878.85 21988.40
1995/09/30 38548.97 22916.31
1995/10/31 38361.51 22834.50
1995/11/30 40559.92 23836.93
1995/12/31 40719.75 24296.03
1996/01/31 42051.04 25123.07
1996/02/29 43258.08 25355.96
1996/03/31 44536.12 25600.14
1996/04/30 44155.79 25977.48
1996/05/31 44902.35 26647.44
1996/06/30 44556.38 26748.97
1996/07/31 44629.22 25567.20
1996/08/31 46887.08 26106.41
1996/09/30 49199.57 27575.68
1996/10/31 52349.65 28336.22
1996/11/30 56774.34 30478.15
1996/12/31 55332.66 29874.38
1997/01/31 59413.19 31740.93
1997/02/28 62001.30 31989.78
1997/03/31 57826.32 30675.32
1997/04/30 60962.36 32506.64
1997/05/31 63109.05 34485.64
1997/06/30 66699.54 36030.60
1997/07/31 73880.53 38897.55
1997/08/29 69397.16 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 145959 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Regional Banks Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $69,397 - a 593.97% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
BANKAMERICA CORP. 7.5
U.S. BANCORP 6.3
BANK OF NEW YORK CO., INC. 5.5
NATIONSBANK CORP. 5.4
FIRST CHICAGO NBD CORP. 5.3
CITICORP 5.2
WELLS FARGO & CO. 5.1
BANC ONE CORP. 4.0
FIRST UNION CORP. 3.9
COMERICA, INC. 3.9
TOP REGIONS AS OF AUGUST 31, 1997
WEST 17.3%
NORTHEAST 13.8%
MIDWEST 15.1%
MULTI-REGIONAL 11.6%
MONEY CENTER 11.5%
ALL OTHERS 30.8%
ROW: 1, COL: 1, VALUE: 30.8
ROW: 1, COL: 2, VALUE: 11.5
ROW: 1, COL: 3, VALUE: 11.6
ROW: 1, COL: 4, VALUE: 15.1
ROW: 1, COL: 5, VALUE: 13.8
ROW: 1, COL: 6, VALUE: 17.3
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
REGIONAL BANKS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
John Avery,
Portfolio Manager of
Fidelity Select Regional Banks Portfolio
Q. HOW DID THE FUND PERFORM, JOHN?
A. For the six-month period that ended August 31, 1997, the fund
returned 11.93%. The Standard & Poor's 500 Index returned 14.78% in
that same time span. For the 12 months ended August 31, 1997, the fund
returned 48.01%, while the S&P returned 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. Though the fund trailed its index over the past six months, I would
still characterize the past six months as being a positive period for
bank stocks. While the interest-rate hike by the Federal Reserve Board
in March hurt the sector, the same climate I've mentioned in previous
reports remained intact. Banks continued to generate strong earnings
growth - some have been able to produce revenue growth two to three
times greater than their expenses - and they've done so on a
consistent basis. The market has begun to realize this consistency,
and investors have displayed prolonged confidence in the sector.
Q. HOW HAVE BANKS BEEN ABLE TO SUSTAIN THIS GROWTH?
A. Bank stocks typically do well amidst the economic backdrop we've
seen over the past couple years, namely moderate growth and
nonexistent inflation. These conditions are conducive to better
borrowing demand from both businesses and consumers, and have resulted
in increased cash flows within the industry. Another factor is the
increasingly proactive role bank managements are playing. In the past,
the conditions I just mentioned would often get banks into hot water.
They'd often take their excess cash and use it to generate more loan
business. In doing so, though, banks would often lower their
credit-quality requirements. This time around, speculative lending has
taken a backseat. Instead, banks are being more disciplined in their
lending processes, are buying back their own shares and many are
making huge investments in technology, which can increase efficiency
and lower costs.
Q. SCANNING THE FUND'S TOP 20 POSITIONS, TWO THOUGHTS COME TO MIND: 1)
YOU'VE DEVOTED MORE OF THE FUND'S ASSETS TO THESE TOP NAMES, AND 2)
THE FUND HAS A DECIDED BIAS TOWARD LARGER BANKS . . .
A. Both issues are actually intertwined. As the fund's assets have
increased, I've made larger bets in the top 20 positions because those
are the names with which I'm most comfortable. At the end of the
period, in fact, approximately 75% of the fund's assets were allocated
among the top 20 exposures. The majority of these positions also
happen to be large-cap banks, or those with market capitalizations of
$5 billion or more. In this industry, where the ability to cut costs
and make large technology investments is essential, the bigger banks
often have a leg up on their smaller counterparts.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. BankAmerica and US Bancorp performed extremely well, as both banks
benefited from favorable regional economies. BankAmerica rode the
economic wave in California while US Bancorp boasted significant
exposure in the bustling Pacific Northwest area. Other stocks that did
well included Comerica and American Express. On the downside,
Wells-Fargo was the biggest disappointment. The company acquired a
bank in California just over a year ago and everything that could go
wrong seems to have gone wrong.
Q. WHAT'S YOUR OUTLOOK?
A. Not to sound boring, but I think we're in for more of the same. I
don't see anything on the horizon that would upset the economic
conditions we've seen, and I think bank managements will continue to
stress internal efficiency. I don't have any reason to believe that
the good growth we've seen can't be sustained.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 30, 1986
FUND NUMBER: 507
TRADING SYMBOL: FSRBX
SIZE: as of August 31, 1997, more than
$971 million
MANAGER: John Avery, since 1996; manager,
Fidelity Select Chemicals Portfolio,
1995-1997; joined Fidelity in 1994
(checkmark)
REGIONAL BANKS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.9%
SHARES VALUE (NOTE 1)
BANKS - 84.0%
INTERNATIONAL - 4.2%
Allied Irish Bank sponsored ADR 88,900 $ 4,467,225 01922840
Bank of Nova Scotia 183,000 7,905,495 06414910
Canadian Imperial Bank of Commerce 399,700 10,354,325 13606910
HSBC Holdings PLC 194,825 5,834,393 42199192
National Bank of Canada 300,000 3,869,573 63306710
Royal Bank of Canada 188,600 8,854,109 78008710
41,285,120
MID-ATLANTIC - 0.9%
Crestar Financial Corp. 30,466 1,361,449 22609110
HUBCO, Inc. 5,565 170,428 40438210
PNC Financial Corp. 164,800 7,127,600 69347510
8,659,477
MIDWEST - 15.1%
Banc One Corp. 735,273 39,429,015 05943810
Charter One Financial Corp. 20,400 1,109,250 16090310
Comerica, Inc. 535,900 37,948,419 20034010
Fifth Third Bancorp 28,950 1,693,575 31677310
KeyCorp. 22,200 1,345,875 49326710
National City Corp. 369,809 20,894,209 63540510
Northern Trust Corp. 243,500 12,935,938 66585910
Norwest Corp. 419,700 24,106,519 66938010
Star Banc Corp. 196,300 8,870,306 85508310
148,333,106
NORTHEAST - 13.8%
Bank of New York Co., Inc. 1,214,848 54,212,592 06405710
Bankers Trust New York Corp. 14,300 1,483,625 06636510
Chase Manhattan Corp. 295,300 32,833,669 16161A10
Mellon Bank Corp. 602,000 28,971,250 58550910
North Fork Bancorp., Inc. 295,200 7,361,550 65942410
State Street Corp. 197,800 9,865,275 85747710
134,727,961
SOUTHEAST - 9.6%
Barnett Banks, Inc. 190,400 12,971,000 06805510
First Tennessee National Corp. 189,700 10,101,525 33716210
First Union Corp. 796,600 38,286,588 33735810
Meritor Savings Bank (a) 51,100 103,797 59000710
Popular, Inc. 517,302 22,373,312 73317410
SunTrust Banks, Inc. 50,900 3,181,250 86791410
Synovus Financial Corp. 131,450 3,442,347 87161C10
Union Planters Corp. 66,200 3,392,750 90806810
93,852,569
WEST - 17.3%
BankAmerica Corp. 1,109,200 72,999,225 06605010
First Security Corp. 209,750 5,925,438 33629410
Silicon Valley Bancshares (a) 87,300 4,692,375 82706410
UnionBanCal Corp. 16,900 1,306,581 90890610
Washington Mutual, Inc. 200,600 12,010,920 93932210
Wells Fargo & Co. 197,166 50,129,456 94974010
Westamerica Bancorporation 65,000 5,330,000 95709010
Zions Bancorp 427,300 16,557,875 98970110
168,951,870
MONEY CENTER - 11.5%
BankBoston Corp. 122,400 10,174,500 06605R10
Citicorp 396,700 50,628,838 17303410
First Chicago NBD Corp. 719,300 51,609,775 31945A10
112,413,113
SHARES VALUE (NOTE 1)
MULTI-REGIONAL - 11.6%
NationsBank Corp. 889,036 $ 52,786,513 63858510
U.S. Bancorp 699,232 61,226,502 90297310
114,013,015
TOTAL BANKS 822,236,231
CREDIT & OTHER FINANCE - 11.8%
BANK HOLDING COMPANY OFFICES - 1.9%
Fleet Financial Group, Inc. 284,367 18,323,899 33891510
FINANCIAL SERVICES - 3.2%
American Express Co. 411,400 31,986,350 02581610
PERSONAL CREDIT INSTITUTIONS - 6.7%
Associates First Capital Corp. 493,700 28,665,456 04600810
Beneficial Corp. 200,400 14,341,125 08172110
Household International, Inc. 176,600 19,591,563 44181510
MBNA Corp. 84,000 3,228,750 55262L10
65,826,894
TOTAL CREDIT & OTHER FINANCE 116,137,143
INSURANCE - 0.1%
SURETY INSURANCE - 0.1%
Centris Group, Inc. 44,700 991,781 15590410
TOTAL COMMON STOCKS
(Cost $703,625,100) 939,365,155
CASH EQUIVALENTS - 4.1%
Taxable Central Cash Fund (b)
(Cost $39,859,566) 39,859,566 39,859,566 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $743,484,666) $ 979,224,721
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $250,758,600 and $109,932,438, respectively (see Note 3 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 $36,419 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the end of
the period, there were no loans outstanding (see Note 6 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $743,942,536. Net unrealized appreciation
aggregated $235,282,185, of which $247,854,805 related to appreciated
investment securities and $12,572,620 related to depreciated
investment securities.
REGIONAL BANKS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 979,224,721
SECURITIES, AT
VALUE
(COST
$743,484,66
6) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 19,999
INVESTMENTS
SOLD
RECEIVABLE FOR 2,051,785
FUND SHARES
SOLD
DIVIDENDS 1,602,093
RECEIVABLE
INTEREST 208,083
RECEIVABLE
REDEMPTION FEES 2,839
RECEIVABLE
OTHER 94
RECEIVABLES
TOTAL ASSETS 983,109,614
LIABILITIES
PAYABLE FOR $ 10,964,541
FUND SHARES
REDEEMED
ACCRUED 504,612
MANAGEMENT
FEE
OTHER PAYABLES 580,623
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 12,049,776
NET ASSETS $ 971,059,838
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 702,228,371
UNDISTRIBUTED 4,962,366
NET INVESTMENT
INCOME
ACCUMULATED 28,129,102
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 235,739,999
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 971,059,838
26,580,829
SHARES
OUTSTANDING
NET ASSET $36.53
VALUE AND
REDEMPTION
PRICE PER
SHARE
($971,059,8
38 (DIVIDED BY)
26,580,829
SHARES)
MAXIMUM $37.66
OFFERING PRICE
PER SHARE
(100/97.00
OF $36.53)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 9,118,370
INCOME
DIVIDENDS
INTEREST 1,659,356
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$31,954)
TOTAL INCOME 10,777,726
EXPENSES
MANAGEMENT $ 2,712,207
FEE
TRANSFER AGENT 2,684,032
FEES
ACCOUNTING AND 355,698
SECURITY
LENDING FEES
NON-INTERESTED 1,864
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 18,803
AND EXPENSES
REGISTRATION FEES 15,973
AUDIT 20,640
LEGAL 1,461
MISCELLANEOUS 3,147
TOTAL EXPENSES 5,813,825
BEFORE
REDUCTIONS
EXPENSE (47,310) 5,766,515
REDUCTIONS
NET INVESTMENT 5,011,211
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 28,737,363
SECURITIES
FOREIGN (9,298) 28,728,065
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 61,722,824
SECURITIES
ASSETS AND (188) 61,722,636
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 90,450,701
NET INCREASE $ 95,461,912
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 3,791,454
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 2,844
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 125,175
WITHHELD BY
FSC
EXPENSE $ 41,812
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 654
CREDITS
TRANSFER 4,844
AGENT CREDITS
$ 47,310
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 5,011,211 $ 5,674,368
NET
INVESTMENT
INCOME
NET REALIZED 28,728,065 27,631,220
GAIN (LOSS)
CHANGE IN NET 61,722,636 124,368,117
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 95,461,912 157,673,705
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (725,360) (4,305,859)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (3,384,646) (22,112,110)
REALIZED GAIN
TOTAL (4,110,006) (26,417,969)
DISTRIBUTIONS
SHARE 505,311,058 797,514,088
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 4,026,132 25,807,948
OF
DISTRIBUTIONS
COST OF SHARES (468,429,577) (432,510,460)
REDEEMED
REDEMPTION 848,643 706,766
FEES
NET INCREASE 41,756,256 391,518,342
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 133,108,162 522,774,078
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 837,951,676 315,177,598
PERIOD
END OF PERIOD $ 971,059,838 $ 837,951,676
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$4,962,36
6 AND
$2,586,44
3,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 14,846,412 27,686,494
ISSUED IN 132,875 968,599
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (13,926,818) (16,057,387)
NET INCREASE 1,052,469 12,597,706
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 32.82 $ 24.37 $ 18.01 $ 17.99 $ 20.88 $ 16.48
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .19 .37 .52 .37 .19 .16
INVESTMENT
INCOME D
NET REALIZED 3.66 9.70 6.78 .87 .93 5.09
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 3.85 10.07 7.30 1.24 1.12 5.25
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.03) (.27) (.25) (.29) (.15) (.11)
INVESTMENT
INCOME
FROM NET (.14) (1.40) (.72) (.98) (3.92) (.81)
REALIZED GAIN
TOTAL (.17) (1.67) (.97) (1.27) (4.07) (.92)
DISTRIBUTIONS
REDEMPTION FEES .03 .05 .03 .05 .06 .07
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 36.53 $ 32.82 $ 24.37 $ 18.01 $ 17.99 $ 20.88
END OF PERIOD
TOTAL RETURN B, C 11.93% 43.33% 40.94% 7.79% 6.46% 33.10%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 971,060 $ 837,952 $ 315,178 $ 164,603 $ 97,429 $ 315,520
OF PERIOD
(000 OMITTED)
RATIO OF 1.27% A 1.46% 1.41% 1.58% 1.62% 1.49% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.26% A, E 1.45% E 1.40% E 1.56% E 1.60% E 1.49% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET 1.10% A 1.36% 2.42% 1.99% .88% 1.06% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 26% A 43% 103% 106% 74% 63% A
TURNOVER RATE
AVERAGE $ .0375 $ .0384
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
BIOTECHNOLOGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past five year and past 10 year
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
BIOTECHNOLOGY 0.47% 14.80% 56.33% 270.19%
BIOTECHNOLOGY -2.54% 11.36% 51.64% 259.08%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
BIOTECHNOLOGY 14.80% 9.35% 13.98%
BIOTECHNOLOGY 11.36% 8.68% 13.64%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114515 S00000000000001
Biotechnology S&P 500
00042 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9557.75 9781.00
1987/10/31 6617.95 7674.17
1987/11/30 5974.44 7041.82
1987/12/31 6774.49 7577.70
1988/01/31 7116.71 7896.72
1988/02/29 7382.10 8264.71
1988/03/31 7333.22 8009.33
1988/04/30 7200.52 8098.24
1988/05/31 7060.84 8168.69
1988/06/30 7298.30 8543.63
1988/07/31 7291.31 8511.17
1988/08/31 7088.77 8221.79
1988/09/30 7235.44 8572.04
1988/10/31 7158.61 8810.34
1988/11/30 6823.38 8684.35
1988/12/31 7053.85 8836.33
1989/01/31 7542.74 9483.15
1989/02/28 7486.86 9247.02
1989/03/31 8038.60 9462.47
1989/04/30 8310.98 9953.57
1989/05/31 8688.11 10356.69
1989/06/30 8464.63 10297.66
1989/07/31 9246.84 11227.54
1989/08/31 9596.04 11447.60
1989/09/30 10001.11 11400.66
1989/10/31 10036.03 11136.17
1989/11/30 10350.31 11363.35
1989/12/31 10152.79 11636.07
1990/01/31 9393.10 10855.29
1990/02/28 10280.59 10995.32
1990/03/31 10713.68 11286.70
1990/04/30 10848.57 11004.53
1990/05/31 12375.04 12077.47
1990/06/30 13239.23 11995.34
1990/07/31 13275.13 11956.96
1990/08/31 12865.89 10876.05
1990/09/30 12578.70 10346.39
1990/10/31 12686.40 10301.90
1990/11/30 14222.84 10967.40
1990/12/31 14655.32 11273.39
1991/01/31 16338.40 11764.91
1991/02/28 18653.56 12606.10
1991/03/31 20579.18 12911.17
1991/04/30 19682.52 12942.15
1991/05/31 20931.97 13501.25
1991/06/30 19820.61 12882.90
1991/07/31 21604.93 13483.24
1991/08/31 23118.89 13802.79
1991/09/30 24316.16 13572.29
1991/10/31 26710.70 13754.15
1991/11/30 24926.38 13199.86
1991/12/31 29170.70 14709.93
1992/01/31 28586.00 14436.32
1992/02/29 26391.39 14623.99
1992/03/31 24389.01 14338.83
1992/04/30 22114.30 14760.39
1992/05/31 23700.19 14832.71
1992/06/30 23284.21 14611.71
1992/07/31 24501.40 15209.33
1992/08/31 22968.96 14897.53
1992/09/30 22890.15 15073.32
1992/10/31 24011.02 15126.08
1992/11/30 26375.34 15641.88
1992/12/31 26153.51 15834.28
1993/01/31 24809.47 15967.28
1993/02/28 20804.97 16184.44
1993/03/31 21117.97 16525.93
1993/04/30 21661.10 16126.00
1993/05/31 23060.38 16558.18
1993/06/30 23198.46 16606.20
1993/07/31 22434.39 16539.77
1993/08/31 23281.31 17166.63
1993/09/30 24238.71 17034.45
1993/10/31 26043.04 17387.06
1993/11/30 25840.51 17221.88
1993/12/31 26337.62 17430.27
1994/01/31 27239.78 18022.90
1994/02/28 25417.05 17534.48
1994/03/31 22848.65 16769.97
1994/04/30 22434.39 16984.63
1994/05/31 22056.95 17263.18
1994/06/30 21182.41 16840.23
1994/07/31 21237.64 17392.59
1994/08/31 23226.08 18105.69
1994/09/30 23152.43 17662.10
1994/10/31 22360.74 18059.49
1994/11/30 21946.48 17401.77
1994/12/31 21550.64 17659.84
1995/01/31 22517.24 18117.75
1995/02/28 23290.52 18823.80
1995/03/31 23667.96 19379.29
1995/04/30 24404.42 19950.01
1995/05/31 24625.35 20747.42
1995/06/30 25518.31 21229.38
1995/07/31 26659.82 21933.35
1995/08/31 27727.69 21988.40
1995/09/30 28970.46 22916.31
1995/10/31 28740.32 22834.50
1995/11/30 29697.72 23836.93
1995/12/31 32132.04 24296.03
1996/01/31 34032.47 25123.07
1996/02/29 33764.93 25355.96
1996/03/31 33229.86 25600.14
1996/04/30 33947.32 25977.48
1996/05/31 34343.49 26647.44
1996/06/30 32268.35 26748.97
1996/07/31 29900.81 25567.20
1996/08/31 31277.94 26106.41
1996/09/30 33107.84 27575.68
1996/10/31 31957.08 28336.22
1996/11/30 32145.73 30478.15
1996/12/31 33934.18 29874.38
1997/01/31 35489.45 31740.93
1997/02/28 35739.96 31989.78
1997/03/31 32055.32 30675.32
1997/04/30 30649.40 32506.64
1997/05/31 34545.78 34485.64
1997/06/30 35450.68 36030.60
1997/07/31 35663.59 38897.55
1997/08/29 35908.45 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114522 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Biotechnology Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $35,908 - a 259.08% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
GENENTECH, INC. SPECIAL 10.1
SCHERING-PLOUGH CORP. 4.4
ALKERMES, INC. 4.2
GENZYME CORP. 4.0
MERCK & CO., INC. 3.7
GILEAD SCIENCES, INC. 3.6
PROTEIN DESIGN LABS, INC. 3.6
ICN PHARMACEUTICALS, INC. 3.5
BEVERLY ENTERPRISES, INC. 3.2
INTERNEURON PHARMACEUTICALS, INC. 3.0
TOP INDUSTRIES AS OF AUGUST 31, 1997
BIOTECHNOLOGY 46.3%
PHARMACEUTICAL
PREPARATIONS 18.2%
DRUGS 13.5%
SKILLED NURSING CARE
FACILITIES 3.1%
LAB ANALYTICAL
INSTRUMENTS 2.1%
ALL OTHERS 16.8%
ROW: 1, COL: 1, VALUE: 16.8
ROW: 1, COL: 2, VALUE: 2.1
ROW: 1, COL: 3, VALUE: 3.1
ROW: 1, COL: 4, VALUE: 13.5
ROW: 1, COL: 5, VALUE: 18.2
ROW: 1, COL: 6, VALUE: 46.3
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
BIOTECHNOLOGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: James Harmon became Portfolio Manager of
Fidelity Select Biotechnology Portfolio on June 2, 1997.
Q. HOW DID THE FUND PERFORM, JAMIE?
A. For the six-month and 12-month periods ending August 31, 1997, the
fund returned 0.47% and 14.80%, underperforming its benchmark index,
the Standard & Poor's 500 Index, which returned 14.78% and 40.65%,
respectively.
Q. WHY DID THE FUND UNDERPERFORM THE INDEX OVER THE PAST SIX MONTHS?
A. It was not just the fund; the entire biotechnology sector was flat
or down over most of the period. In fact, I think the fund did fairly
well when you look at the industry as a whole. There are two major
reasons behind the sector's poor performance over the period. First,
there were a number of high-profile product failures, which increased
investors' concerns about the likelihood of clinical success for the
whole sector. As of the end of the period, the success rate of
late-phase clinical drug trials in 1997 was 38% - far below the 63%
success rate in 1996. The sector also was hurt by a number of biotech
and pharmaceutical companies that had disappointing drug sales.
Q. YOU MENTIONED A SECOND REASON . . .
A. Yes. The sector was negatively affected by heightened concerns that
the Federal Reserve Board might raise interest rates over the period.
Rising interest rates are considered to be especially bad news for the
biotechnology sector because the value of biotechnology companies is
usually based on their future, not present, earnings. That's because
most biotech companies are in the process of developing new drugs that
won't be marketed until a later date. When you try to calculate a
company's future earnings to determine its present value, interest
rates play a key role because the higher the interest rate, the lower
the present value of future earnings.
Q. SINCE YOU TOOK OVER THE FUND, YOU'VE ADDED SEVERAL NEW STOCKS TO
ITS TOP 10 HOLDINGS. HOW DID THEY DO?
A. They've generally done well. One new top 10 holding, Genzyme
Corporation, looked strong mostly because of upcoming new products.
Leading pharmaceutical company Merck, another addition to the top 10,
produced phenomenally high returns on assets and strong earnings
growth.
Q. AT THE END OF THE PERIOD, GENENTECH MADE UP MORE THAN 10% OF THE
FUND. HOW DID IT LOOK?
A. I saw Genentech as a very low-risk and potentially high-return
investment. First, investors in the company's common stock, such as
the fund, have the right the sell their stock to Swiss pharmaceutical
company Roche Holdings in 1999 at a guaranteed profit. In addition, I
believe Genentech has the best pipeline of upcoming products of any
biotech company right now. Over the period, this stock boosted the
fund's performance.
Q. DID YOU EXPERIENCE ANY REGRETS OVER THE PERIOD?
A. Sure. I wish I had sold the fund's holdings in Amgen sooner. The
fund's largest holding six months ago, Amgen was hurt by disappointing
sales of some of its key drugs.
Q. JAMIE, HOW DOES THE FUND LOOK GOING FORWARD?
A. I'm optimistic about specific biotechnology stocks. I think there
will be certain companies that will dramatically outperform the market
as they develop novel therapeutic treatments. I'm much more cautious
about the group as a whole. There is a lot of clinical data on new
products that should be coming out over the next few years. However,
as we've seen during this period, simply introducing a new product is
no guarantee of success. Still, I think there is potential for some
real home runs in the biotechnology sector in the near future.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 042
TRADING SYMBOL: FBIOX
SIZE: as of August 31, 1997, more than
$517 million
MANAGER: James Harmon, since June 1997;
research associate covering nursing homes,
non-technology IPOs and petroleum refining,
1995-1997; research analyst covering
biotechnology and nursing homes, since 1997;
joined Fidelity in 1995
(checkmark)
BIOTECHNOLOGY PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.6%
SHARES VALUE (NOTE 1)
DRUGS & PHARMACEUTICALS - 79.9%
BIOTECHNOLOGY - 46.3%
Alkermes, Inc. (a)(c) 1,210,300 $ 22,541,838 01642T10
Ariad Pharmaceuticals, Inc. (a) 749,200 4,307,900 04033A10
Aviron 461,800 11,545,000 05376210
Cell Genesys, Inc. (a) 342,600 1,713,000 15092110
Chiron Corp. (a) 600,300 13,431,713 17004010
COR Therapeutics, Inc. (a) 496,800 8,197,200 21775310
Creative Biomolecules, Inc. (a) 250,000 2,109,375 22527010
Genentech, Inc. special (a) 946,600 54,074,525 36871030
Genome Therapeutics Corp. (a) 425,000 3,373,438 37243010
Genzyme Corp. 771,200 21,690,000 37291710
Genzyme Corp.-Tissue Repair (a) 24,300 261,225 37291740
Gilead Sciences, Inc. (a) 605,200 19,593,350 37555810
IDEC Pharmaceuticals Corp. (a) 135,100 4,103,663 44937010
Imclone Systems, Inc. (a) 200,000 1,350,000 45245W10
Interneuron Pharmaceuticals, Inc. (a) 868,200 16,061,700 46057310
Magainin Pharmaceuticals, Inc. (a) 559,800 4,688,325 55903610
Medimmune, Inc. (a) 350,000 9,275,000 58469910
Molecular Biosystems, Inc. (a) 48,400 426,525 60851310
Neurex Corp. (a) 175,000 2,275,000 64123810
Neurogen Corp. (a) 167,700 3,301,594 64124E10
Protein Design Labs, Inc. (a) 537,800 19,159,125 74369L10
Regeneron Pharmaceuticals, Inc. (a) 164,200 1,518,850 75886F10
Sangstat Medical Corp. (a) 328,700 7,560,100 80100310
Sepracor, Inc. (a) 526,800 11,589,600 81731510
Sequana Therapeutics, Inc. (a) 263,300 2,863,388 81732210
Sugen, Inc. (a) 125,700 1,775,513 86504110
248,786,947
COMMERCIAL LABORATORY RESEARCH - 1.6%
Arqule, Inc. 193,400 3,529,550 04269E10
BioReliance Corp. 600 13,050 09095110
Intercardia, Inc. (a) 225,000 4,725,000 45844M10
Millennium Pharmaceuticals, Inc. (a) 25,700 346,950 59990210
8,614,550
DRUGS - 13.5%
American Home Products Corp. 121,200 8,726,400 02660910
Anesta Corp. (a) 371,900 7,159,075 03460310
Forest Laboratories, Inc. 273,400 11,226,488 34583810
Merck & Co., Inc. 215,000 19,739,688 58933110
Schering-Plough Corp. 489,800 23,510,400 80660510
Sequus Pharmaceuticals, Inc. (a) 343,000 2,315,250 81747110
72,677,301
IN VITRO, IN VIVO DIAGNOSTIC SUBSTANCES - 0.3%
Human Genome Sciences, Inc. (a) 3,900 145,275 44490310
Hyseq, Inc. 100,200 1,415,325 44916330
1,560,600
PHARMACEUTICAL PREPARATIONS - 18.2%
Alpharma, Inc.:
Class A 29,300 642,769 02081310
Class A rights 11/25/97 4,883 26,857 02081313
Arris Pharmaceutical Corp. (a) 603,500 8,222,688 04269W10
GelTex Pharmaceuticals, Inc. (a) 100,000 2,012,500 36853810
Guilford Pharmaceuticals, Inc. (a) 131,750 3,540,781 40182910
ICN Pharmaceuticals, Inc. 520,000 18,785,000 44892410
Immunex Corp. (a) 298,600 13,063,750 45252810
Inhale Therapeutic Systems (a) 446,800 10,053,000 45719110
LeukoSite, Inc. (c) 250,000 1,515,625 52728R10
Ligand Pharmaceuticals, Inc. Class B (a) 911,965 13,223,493
53220K20
Novartis AG (Reg.) 6,236 8,807,690 66999Q22
NPS Pharmaceuticals, Inc. (a) 307,500 2,613,750 62936P10
SHARES VALUE (NOTE 1)
Nexstar Pharmaceuticals, Inc. (a) 350,800 $ 5,327,775 65333B10
T Cell Sciences, Inc. (a) 247,100 532,809 87234210
Theratech, Inc. (a) 195,000 2,023,125 88338310
ViroPharma, Inc. 449,600 7,193,600 92824110
97,585,212
TOTAL DRUGS & PHARMACEUTICALS 429,224,610
ELECTRICAL EQUIPMENT - 0.0%
TV & RADIO COMMUNICATION EQUIPMENT - 0.0%
ASN (warrants) (a) 5,000 - 04599F22
ENGINEERING - 1.9%
WATER & SEWER PIPES - 1.9%
MasTec, Inc. (a) 219,800 10,261,913 57632310
MEDICAL EQUIPMENT & SUPPLIES - 1.9%
DRUG DISTRIBUTORS - WHOLESALE - 0.6%
Allegiance Corp. 95,000 2,980,625 01747510
MEDICAL SUPPLIES & APPLIANCES - 0.3%
Cygnus, Inc. (a) 100,000 1,875,000 23256010
MEDICAL TECHNOLOGY - 0.9%
Ballard Medical Products 204,300 4,724,438 05856610
OPHTHALMIC GOODS - 0.1%
Cooper Companies, Inc. 18,000 594,000 21664840
TOTAL MEDICAL EQUIPMENT & SUPPLIES 10,174,063
MEDICAL FACILITIES MANAGEMENT - 6.9%
MEDICAL SERVICES - 0.2%
Carematrix Corp. (a) 47,300 969,650 14170610
NURSING CARE & NURSING HOMES - 1.7%
Integrated Health Services, Inc. 270,900 8,939,700 45812C10
NURSING, PERSONAL CARE FACILITIES - 1.9%
NovaCare, Inc. 679,600 10,236,475 66993010
SKILLED NURSING CARE FACILITIES - 3.1%
Beverly Enterprises, Inc. (a) 1,037,900 16,930,744 08785110
TOTAL MEDICAL FACILITIES MANAGEMENT 37,076,569
TOTAL COMMON STOCKS
(Cost $462,148,538) 486,737,155
CASH EQUIVALENTS - 9.4%
Taxable Central Cash Fund (b)
(Cost $50,297,221) 50,297,221 50,297,221 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $512,445,759) $ 537,034,376
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements)
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $326,215,587 and $456,786,611, respectively (see Note 3 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 $77,706 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $15,796,384 and $16,554,400, respectively (see Note 6 of
Notes to Financial Statements).
Transactions during the period with companies that are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Alkermes, Inc. $ 2,494,377 $ - $ - $ 22,541,838
Ariad Pharmaceuticals, Inc. - 327,813 - -
Arqule, Inc. 509,516 - - -
LeukoSite, Inc. - - - 1,515,625
Sequana Therapeutics, Inc. - 387,900 - -
TOTALS $ 3,003,893 $ 715,713 $ - $ 24,057,463
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $512,745,805. Net unrealized appreciation
aggregated $24,288,571, of which $59,221,794 related to appreciated
investment securities and $34,933,223 related to depreciated
investment securities.
BIOTECHNOLOGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 537,034,376
SECURITIES, AT
VALUE
(COST
$512,445,75
9) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 377,988
RECEIVABLE FOR 3,726,057
INVESTMENTS
SOLD
RECEIVABLE FOR 2,966,545
FUND SHARES
SOLD
DIVIDENDS 80,752
RECEIVABLE
INTEREST 224,188
RECEIVABLE
REDEMPTION FEES 1,050
RECEIVABLE
OTHER 107,235
RECEIVABLES
TOTAL ASSETS 544,518,191
LIABILITIES
PAYABLE FOR $ 5,197,207
INVESTMENTS
PURCHASED
PAYABLE FOR 4,181,968
FUND SHARES
REDEEMED
ACCRUED 254,999
MANAGEMENT
FEE
OTHER PAYABLES 527,230
AND
ACCRUED
EXPENSES
COLLATERAL ON 16,554,400
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 26,715,804
NET ASSETS $ 517,802,387
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 431,555,039
ACCUMULATED (2,249,554)
NET INVESTMENT
(LOSS)
ACCUMULATED 63,909,115
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 24,587,787
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 517,802,387
15,350,467
SHARES
OUTSTANDING
NET ASSET $33.73
VALUE AND
REDEMPTION
PRICE PER
SHARE
($517,802,3
87 (DIVIDED BY)
15,350,467
SHARES)
MAXIMUM $34.77
OFFERING PRICE
PER SHARE
(100/97.00
OF $33.73)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 603,067
INCOME
DIVIDENDS
INTEREST 1,414,403
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$58,119)
TOTAL INCOME 2,017,470
EXPENSES
MANAGEMENT $ 1,672,014
FEE
TRANSFER AGENT 2,252,185
FEES
ACCOUNTING AND 266,734
SECURITY
LENDING FEES
NON-INTERESTED 1,305
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 32,012
AND EXPENSES
REGISTRATION FEES 35,036
AUDIT 20,861
LEGAL 3,650
MISCELLANEOUS 3,319
TOTAL EXPENSES 4,287,116
BEFORE
REDUCTIONS
EXPENSE (20,092) 4,267,024
REDUCTIONS
NET INVESTMENT (2,249,554)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 64,368,331
SECURITIES
(INCLUDING
REALIZED GAIN
OF $383,302
ON SALE OF
INVESTMENTS IN
AFFILIATED
ISSUES)
FOREIGN 903 64,369,234
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (67,878,140)
SECURITIES
ASSETS AND (830) (67,878,970)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) (3,509,736)
NET INCREASE $ (5,759,290)
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 394,816
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 19,598
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 93,330
WITHHELD BY
FSC
EXPENSE $ 18,945
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 976
CREDITS
TRANSFER 171
AGENT CREDITS
$ 20,092
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (2,249,554) $ (4,230,936)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 64,369,234 107,758,165
GAIN (LOSS)
CHANGE IN NET (67,878,970) (82,231,616)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE (5,759,290) 21,295,613
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (758,609)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (10,193,633) (74,788,474)
REALIZED GAIN
TOTAL (10,193,633) (75,547,083)
DISTRIBUTIONS
SHARE 126,046,332 434,127,456
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 9,940,373 73,785,664
OF
DISTRIBUTIONS
COST OF SHARES (277,665,839) (876,553,990)
REDEEMED
REDEMPTION 532,080 930,907
FEES
NET INCREASE (141,147,054) (367,709,963)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (157,099,977) (421,961,433)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 674,902,364 1,096,863,797
PERIOD
END OF PERIOD $ 517,802,387 $ 674,902,364
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$2,249,554
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 3,816,616 12,636,024
ISSUED IN 335,372 2,313,606
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (8,513,986) (25,208,094)
NET INCREASE (4,361,998) (10,258,464)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 34.24 $ 36.60 $ 25.30 $ 27.61 $ 22.60 $ 27.61
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INVESTMENT (.13) (.20) .11 (.06) (.18) (.08)
INCOME (LOSS) D
NET REALIZED .18 H 1.89 11.21 (2.26) 5.15 (1.09)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM .05 1.69 11.32 (2.32) 4.97 (1.17)
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.03) (.07) - - -
INVESTMENT
INCOME
FROM NET (.59) (4.06) - - - (3.89)
REALIZED GAIN
TOTAL (.59) (4.09) (.07) - - (3.89)
DISTRIBUTIONS
REDEMPTION FEES .03 .04 .05 .01 .04 .05
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 33.73 $ 34.24 $ 36.60 $ 25.30 $ 27.61 $ 22.60
END OF PERIOD
TOTAL RETURN B, C 0.47% 5.85% 44.97% (8.37)% 22.17% (5.92)%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 517,802 $ 674,902 $ 1,096,864 $ 448,197 $ 481,146 $ 507,993
OF PERIOD
(000 OMITTED)
RATIO OF 1.53% A 1.57% 1.44% F 1.59% 1.62% 1.50% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.52% A, E 1.56% E 1.43% E 1.59% 1.61% E 1.50% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.80)% A (.59)% .35% (.27)% (.69)% (.37)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 126% A 41% 67% 77% 51% 79% A
TURNOVER RATE
AVERAGE $ .0486 $ .0376
COMMISSION
RATE G
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). F
DURING THE
PERIOD, FMR
AGREED TO
REIMBURSE A
PORTION OF THE
FUND'S EXPENSES,
OR EXPENSES WERE
LIMITED IN
ACCORDANCE WITH A
STATE EXPENSE
LIMITATION. WITHOUT
THIS
REIMBURSEMENT,
THE FUND'S EXPENSE
RATIO WOULD HAVE
BEEN
HIGHER. G FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. H THE
AMOUNT SHOWN FOR
A SHARE
OUTSTANDING DOES
NOT CORRESPOND
WITH THE
AGGREGATE NET LOSS
ON INVESTMENTS FOR
THE PERIOD DUE TO
THE TIMING OF SALES
AND REPURCHASES OF
FUND SHARES IN
RELATION TO
FLUCTUATING MARKET
VALUES OF THE
INVESTMENTS OF THE
FUND.
HEALTH CARE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
HEALTH CARE 10.73% 31.81% 148.02% 411.39%
HEALTH CARE 7.41% 27.86% 140.58% 396.05%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
HEALTH CARE 31.81% 19.92% 17.73%
HEALTH CARE 27.86% 19.19% 17.37%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115337 S00000000000001
Health Care S&P 500
00063 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9518.09 9781.00
1987/10/31 7006.83 7674.17
1987/11/30 6327.27 7041.82
1987/12/31 6810.42 7577.70
1988/01/31 7316.57 7896.72
1988/02/29 7536.26 8264.71
1988/03/31 7348.88 8009.33
1988/04/30 7234.73 8098.24
1988/05/31 7215.34 8168.69
1988/06/30 7404.88 8543.63
1988/07/31 7394.11 8511.17
1988/08/31 7193.80 8221.79
1988/09/30 7435.03 8572.04
1988/10/31 7527.65 8810.34
1988/11/30 7307.96 8684.35
1988/12/31 7411.70 8836.33
1989/01/31 7935.05 9483.15
1989/02/28 7783.04 9247.02
1989/03/31 8193.48 9462.47
1989/04/30 8640.83 9953.57
1989/05/31 8910.11 10356.69
1989/06/30 8709.27 10297.66
1989/07/31 9788.06 11227.54
1989/08/31 10024.86 11447.60
1989/09/30 10097.22 11400.66
1989/10/31 10022.67 11136.17
1989/11/30 10454.63 11363.35
1989/12/31 10560.82 11636.07
1990/01/31 9954.87 10855.29
1990/02/28 9850.55 10995.32
1990/03/31 10243.42 11286.70
1990/04/30 10243.42 11004.53
1990/05/31 11652.86 12077.47
1990/06/30 12049.90 11995.34
1990/07/31 12216.26 11956.96
1990/08/31 11668.64 10876.05
1990/09/30 11317.43 10346.39
1990/10/31 11576.22 10301.90
1990/11/30 12807.78 10967.40
1990/12/31 13128.83 11273.39
1991/01/31 14424.86 11764.91
1991/02/28 16206.59 12606.10
1991/03/31 17651.31 12911.17
1991/04/30 17344.03 12942.15
1991/05/31 18285.69 13501.25
1991/06/30 17461.15 12882.90
1991/07/31 19006.20 13483.24
1991/08/31 19955.98 13802.79
1991/09/30 20358.11 13572.29
1991/10/31 21699.45 13754.15
1991/11/30 20514.20 13199.86
1991/12/31 24116.67 14709.93
1992/01/31 23325.41 14436.32
1992/02/29 22306.87 14623.99
1992/03/31 20946.01 14338.83
1992/04/30 19759.12 14760.39
1992/05/31 20165.97 14832.71
1992/06/30 19388.69 14611.71
1992/07/31 20555.05 15209.33
1992/08/31 20000.65 14897.53
1992/09/30 18616.18 15073.32
1992/10/31 19188.75 15126.08
1992/11/30 20239.98 15641.88
1992/12/31 19912.11 15834.28
1993/01/31 18842.71 15967.28
1993/02/28 16831.96 16184.44
1993/03/31 17296.23 16525.93
1993/04/30 17289.82 16126.00
1993/05/31 17981.42 16558.18
1993/06/30 17917.38 16606.20
1993/07/31 17334.65 16539.77
1993/08/31 17952.60 17166.63
1993/09/30 18512.92 17034.45
1993/10/31 19889.70 17387.06
1993/11/30 19822.46 17221.88
1993/12/31 20393.32 17430.27
1994/01/31 20797.21 18022.90
1994/02/28 20293.95 17534.48
1994/03/31 18970.08 16769.97
1994/04/30 19731.12 16984.63
1994/05/31 20845.49 17263.18
1994/06/30 20514.71 16840.23
1994/07/31 20925.78 17392.59
1994/08/31 23671.56 18105.69
1994/09/30 23841.77 17662.10
1994/10/31 24172.55 18059.49
1994/11/30 24696.01 17401.77
1994/12/31 24769.44 17659.84
1995/01/31 26081.39 18117.75
1995/02/28 26634.15 18823.80
1995/03/31 27358.34 19379.29
1995/04/30 27739.68 19950.01
1995/05/31 28006.95 20747.42
1995/06/30 29424.18 21229.38
1995/07/31 31108.67 21933.35
1995/08/31 31372.42 21988.40
1995/09/30 33130.77 22916.31
1995/10/31 33211.65 22834.50
1995/11/30 34611.30 23836.93
1995/12/31 36129.92 24296.03
1996/01/31 37422.26 25123.07
1996/02/29 37203.79 25355.96
1996/03/31 37333.39 25600.14
1996/04/30 37177.10 25977.48
1996/05/31 37851.51 26647.44
1996/06/30 37878.34 26748.97
1996/07/31 36399.22 25567.20
1996/08/31 37633.09 26106.41
1996/09/30 40223.46 27575.68
1996/10/31 39434.09 28336.22
1996/11/30 41553.13 30478.15
1996/12/31 41715.33 29874.38
1997/01/31 44233.99 31740.93
1997/02/28 44798.07 31989.78
1997/03/31 42340.62 30675.32
1997/04/30 44453.71 32506.64
1997/05/31 47839.36 34485.64
1997/06/30 51398.28 36030.60
1997/07/31 53318.23 38897.55
1997/08/29 49600.09 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115344 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Health Care Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$49,605 - a 396.05% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
AMERICAN HOME PRODUCTS CORP. 8.4
WARNER-LAMBERT CO. 7.8
SCHERING-PLOUGH CORP. 7.0
BRISTOL-MYERS SQUIBB CO. 6.4
MERCK & CO., INC. 5.9
LILLY (ELI) & CO. 5.0
JOHNSON & JOHNSON 4.1
ABBOTT LABORATORIES 3.9
MEDTRONIC, INC. 2.6
BAXTER INTERNATIONAL, INC. 2.4
TOP INDUSTRIES AS OF AUGUST 31, 1997
DRUGS 49.3%
MEDICAL SUPPLIES &
APPLIANCES 16.2%
MEDICAL TECHNOLOGY 5.9%
HOSPITALS 4.4%
PHARMACEUTICAL
PREPARATIONS 3.0%
ALL OTHERS 21.2%
ROW: 1, COL: 1, VALUE: 21.2
ROW: 1, COL: 2, VALUE: 3.0
ROW: 1, COL: 3, VALUE: 4.4
ROW: 1, COL: 4, VALUE: 5.9
ROW: 1, COL: 5, VALUE: 16.2
ROW: 1, COL: 6, VALUE: 49.3
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
HEALTH CARE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Beso Sikharulidze became Portfolio Manager of
Fidelity Select Health Care Portfolio on June 2, 1997.
Q. HOW DID THE FUND PERFORM, BESO?
A. During the six months that ended August 31, 1997, the fund
generated a return of 10.73%, compared to the 14.78% return of the
Standard & Poor's 500 Index. For the 12-month period that ended August
31, 1997, the fund returned 31.81%, underperforming the 40.65% return
of the S&P 500 Index.
Q. WHY DID THE FUND UNDERPERFORM THE S&P 500 DURING THE PERIOD?
A. Much of the S&P 500's strong performance was driven by a narrow
group of the larger-cap stocks at the top of the index. If you had
exposure to smaller-cap stocks, as this fund did, you underperformed
the broader benchmark. Larger-cap health care stocks, particularly
pharmaceuticals, performed well during much of the period, but
suffered a correction in the late summer months.
Q. WHAT FACTORS HELPED HEALTH CARE STOCKS DURING THE PERIOD?
A. Pharmaceutical companies have reaped the benefits of some new
trends in the industry, including acceleration of reviews by the Food
and Drug Administration (FDA) and allowances for direct-to-consumer
marketing of drugs. Considering drugs are moving through the FDA
review process more quickly, they're coming to market sooner. And
that's good news for pharmaceutical companies that are spending a lot
of money on research and development. Direct marketing also has
allowed companies to introduce new categories of drugs to consumers,
such as those that lower cholesterol. As a result, people are visiting
their doctors and saying that they'd like to try a certain
antihistamine or antidepressant, for example, rather than waiting for
the doctor to prescribe something. This trend is triggering demand for
new drugs and accelerating unit volume growth. We've also seen a
revolution in medical devices, especially cardiac devices that are
making surgery easier, more accurate and more effective.
Q. WERE THERE ANY PARTICULAR STOCKS THAT STOOD OUT DURING THE PERIOD?
A. At the end of the period, almost 8% of the fund's portfolio was
invested in Warner-Lambert. The company's shares appreciated
considerably during the period on stronger-than-expected sales of two
new drugs: Lipitor, which helps lower cholesterol, and Rezulin, a
diabetes drug. Six of the fund's top 10 holdings at the end of the
period were pharmaceutical stocks - five of which contributed to
performance. Medtronic, a maker of cardiac devices, also performed
well, benefiting from the demand for innovative products.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. By the end of the period, about 6% of the fund was invested in
Merck & Co. - the one pharmaceutical stock among the fund's top 10
holdings that didn't help performance. In fact, the company's shares
were flat during the six-month period. Merck's share price suffered a
correction in August, when many large-cap stocks that had appreciated
considerably in the first half of the year were knocked down a notch.
St. Jude Medical's stock also was flat during the period. The company
reported lower-than-expected earnings in the second quarter as it
continued to wrestle with the integration of its Telectronics and
Ventritex acquisitions.
Q. WHAT IS YOUR OUTLOOK FOR THE HEALTH CARE SECTOR?
A. I'm optimistic about health care stocks over the next six to 12
months. Pharmaceutical companies should continue to do well on the
strength of their business fundamentals, such as earnings and
revenues. I think medical device companies will continue to benefit
from product innovations. Overall, the health care sector should be
strong. Even if the economy slows down, the sector can still be a
strong performer since demand for health services remains fairly
constant in any environment.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 14, 1981
FUND NUMBER: 063
TRADING SYMBOL: FSPHX
SIZE: as of August 31, 1997, more than
$1.5 billion
MANAGER: Beso Sikharulidze, since June 1997;
manager, Fidelity Select Transportation Portfolio,
1993-1994; security analyst, appliance
trucking and shipping industries, 1992-1993;
joined Fidelity in 1992
(checkmark)
HEALTH CARE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.4%
SHARES VALUE (NOTE 1)
CHEMICALS & PLASTICS - 1.2%
CHEMICALS - 1.2%
AKZO Nobel NV 60,000 $ 9,281,963 01019910
AKZO NV sponsored ADR 7,300 571,225 01019930
Hoechst AG Ord. 210,000 8,093,448 43439010
17,946,636
COMPUTER SERVICES & SOFTWARE - 1.0%
COMPUTER SERVICES - 1.0%
HBO & Co. 221,000 15,829,125 40410010
DRUGS & PHARMACEUTICALS - 55.2%
BIOTECHNOLOGY - 2.9%
Cytyc Corp. (a) 493,500 9,870,000 23294610
Elf Sanofi SA 70,000 6,705,444 91399A92
Genentech, Inc. special (a) 397,400 22,701,475 36871030
Sangstat Medical Corp. (a) 78,900 1,814,700 80100310
Sepracor, Inc. (a) 128,700 2,831,400 81731510
43,923,019
COMMERCIAL LABORATORY RESEARCH - 0.0%
Millennium Pharmaceuticals, Inc. (a) 13,600 183,600 59990210
DRUGS - 49.3%
American Home Products Corp. 1,781,800 128,289,600 02660910
Barr Laboratories, Inc. (a) 438,600 17,215,050 06830610
Bristol-Myers Squibb Co. 1,281,200 97,371,200 11012210
Elan Corp. PLC ADR (a) 297,020 13,514,410 28413120
Glaxo PLC sponsored ADR 230,000 9,171,250 37733W10
Glaxo Holdings PLC 220,000 4,402,899 37733W92
Lilly (Eli) & Co. 730,806 76,460,578 53245710
Merck & Co., Inc. 980,800 90,049,700 58933110
Pfizer, Inc. 499,200 27,643,200 71708110
Rhone Poulenc Sponsored ADR
representing 1/4 share 702,000 26,588,250 76242660
Sankyo Co. Ltd. 432,000 13,088,742 80029710
Schering-Plough Corp. 2,238,600 107,452,800 80660510
Takeda Chemical Industries Ltd. 448,000 11,904,636 87405810
Warner-Lambert Co. 935,000 118,803,438 93448810
Watson Pharmaceuticals, Inc. (a) 126,400 6,643,900 94268310
Yamanouchi Pharmaceutical Co. Ltd. 233,000 5,554,967 98414010
754,154,620
PHARMACEUTICAL PREPARATIONS - 3.0%
Astra AB Class A Free shares 1,547,200 24,567,741 04632292
ICN Pharmaceuticals, Inc. 5,552 200,566 44892410
Novartis AG (Reg.) 14,600 20,620,972 66999Q22
45,389,279
TOTAL DRUGS & PHARMACEUTICALS 843,650,518
ELECTRONIC INSTRUMENTS - 0.2%
LAB ANALYTICAL INSTRUMENTS - 0.2%
Waters Corp. (a) 100,000 3,331,250 94184810
ELECTRONICS - 0.6%
ELECTRONIC CAPACITORS - 0.6%
Maxwell Technologies, Inc. (a) 283,000 8,631,500 57776710
HOUSEHOLD PRODUCTS - 0.5%
FABRICATED RUBBER PRODUCTS - 0.5%
Safeskin Corp. (a) 240,000 7,980,000 78645410
SHARES VALUE (NOTE 1)
MEDICAL EQUIPMENT & SUPPLIES - 26.8%
DENTAL EQUIPMENT - 0.7%
Sybron International Corp. (a) 282,300 $ 11,274,356 87114F10
DRUG DISTRIBUTORS - WHOLESALE - 2.3%
Bergen Brunswig Corp. Class A 687,237 28,863,954 08373910
Cardinal Health, Inc. 18,200 1,205,750 14149Y10
McKesson Corp. 64,500 6,042,844 58155710
36,112,548
MEDICAL SUPPLIES & APPLIANCES - 16.2%
Abbott Laboratories 997,200 59,769,675 00282410
Baxter International, Inc. 683,000 36,327,063 07181310
Becton, Dickinson & Co. 590,600 28,311,888 07588710
Boston Scientific Corp. (a) 489,768 34,528,644 10113710
Depuy, Inc. 267,900 6,195,188 24972610
Johnson & Johnson 1,103,900 62,577,331 47816010
Sofamor/Danek Group, Inc. (a) 400,500 19,198,969 83400510
246,908,758
MEDICAL TECHNOLOGY - 5.9%
Arterial Vascular Engineering, Inc. (a) 300,000 11,100,000 04301310
Medtronic, Inc. 441,200 39,873,450 58505510
Micro Therapeutics, Inc. 52,300 209,200 59500W10
St. Jude Medical, Inc. (a) 439,400 16,724,663 79084910
Sonus Pharmaceuticals, Inc. (a) 258,200 10,295,725 83569210
Stryker Corp. 220,000 8,786,250 86366710
U.S. Surgical Corp. 105,931 3,489,102 91270710
90,478,390
X-RAY & RELATED APPARATUS - 0.5%
Hologic, Inc. (a) 293,700 7,122,225 43644010
X-RAY ELECTRO-MED. APPARATUS - 1.2%
Guidant Corp. 202,730 17,802,228 40169810
TOTAL MEDICAL EQUIPMENT & SUPPLIES 409,698,505
MEDICAL FACILITIES MANAGEMENT - 7.9%
HOME HEALTH CARE AGENCIES - 0.0%
Coram Healthcare Corp.
warrants 7/11/99 (a) 19,069 - 21810311
HOSPITALS - 4.4%
Columbia/HCA Healthcare Corp. 571,000 18,022,188 19767710
HEALTHSOUTH Corp. (a) 472,000 11,770,500 42192410
Health Management Associates, Inc.
Class A (a) 293,400 8,673,638 42193310
Quorum Health Group, Inc. (a) 390,000 13,284,375 74908410
Tenet Healthcare Corp. (a) 582,700 15,878,570 88033G10
67,629,271
HMOS & OUTPATIENT CARE - 2.6%
Humana, Inc. (a) 511,500 12,052,219 44485910
Oxford Health Plans, Inc. (a) 343,900 25,147,688 69147110
United HealthCare Corp. 47,090 2,289,751 91058110
39,489,658
SKILLED NURSING CARE FACILITIES - 0.9%
Beverly Enterprises, Inc. (a) 433,100 7,064,944 08785110
Vencor, Inc. (a) 167,100 6,704,888 92260210
13,769,832
TOTAL MEDICAL FACILITIES MANAGEMENT 120,888,761
TOTAL COMMON STOCKS
(Cost $1,126,142,727) 1,427,956,295
CASH EQUIVALENTS - 6.6%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $100,227,537) 100,227,537 $ 100,227,537 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,226,370,264) $ 1,528,183,832
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $672,069,400 and $580,471,354, respectively (see Note 3 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 $116,067 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $16,185,468 and $16,987,100, respectively (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 89.9%
France 2.2
Japan 2.0
Sweden 1.6
Switzerland 1.3
Others (individually less than 1%) 3.0
TOTAL 100.0%
Transactions during the period with companies that are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Arqule, Inc. $ - $ 349,200 $ - $ -
Intergrated Living Communities, Inc. 249,320 3,172,470 - -
Micro Therapeutics, Inc. - 166,200 - -
TOTALS $ 249,320 $ 3,687,870 $ - $ -
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $1,226,508,826. Net unrealized appreciation
aggregated $301,675,006, of which $332,285,586 related to appreciated
investment securities and $30,610,580 related to depreciated
investment securities.
HEALTH CARE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 1,528,183,832
SECURITIES, AT
VALUE
(COST
$1,226,370,
264) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 404,395
INVESTMENTS
SOLD
RECEIVABLE FOR 3,211,363
FUND SHARES
SOLD
DIVIDENDS 2,158,453
RECEIVABLE
INTEREST 394,432
RECEIVABLE
REDEMPTION FEES 2,591
RECEIVABLE
OTHER 423,072
RECEIVABLES
TOTAL ASSETS 1,534,778,138
LIABILITIES
PAYABLE FOR $ 6,164,734
FUND SHARES
REDEEMED
ACCRUED 776,647
MANAGEMENT
FEE
OTHER PAYABLES 937,280
AND
ACCRUED
EXPENSES
COLLATERAL ON 16,987,100
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 24,865,761
NET ASSETS $ 1,509,912,377
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 1,087,929,095
UNDISTRIBUTED 2,197,052
NET INVESTMENT
INCOME
ACCUMULATED 117,974,322
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 301,811,908
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN FOREIGN
CURRENCIES
NET ASSETS, FOR $ 1,509,912,377
14,253,902
SHARES
OUTSTANDING
NET ASSET $105.93
VALUE AND
REDEMPTION
PRICE PER
SHARE
($1,509,912,
377 (DIVIDED BY)
14,253,902
SHARES)
MAXIMUM $109.21
OFFERING PRICE
PER SHARE
(100/97.00
OF $105.93)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 7,997,288
INCOME
DIVIDENDS
INTEREST 3,073,814
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$55,680)
TOTAL INCOME 11,071,102
EXPENSES
MANAGEMENT $ 4,439,785
FEE
TRANSFER AGENT 3,892,926
FEES
ACCOUNTING AND 403,744
SECURITY
LENDING FEES
NON-INTERESTED 1,435
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 66,241
AND EXPENSES
REGISTRATION FEES 108,351
AUDIT 32,033
LEGAL 10,636
MISCELLANEOUS 3,550
TOTAL EXPENSES 8,958,701
BEFORE
REDUCTIONS
EXPENSE (130,211) 8,828,490
REDUCTIONS
NET INVESTMENT 2,242,612
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 118,181,832
SECURITIES
(INCLUDING
REALIZED GAIN
OF
$1,751,840
ON SALES OF
INVESTMENTS OF
AFFILIATED
ISSUERS)
FOREIGN (16,708) 118,165,124
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 28,349,114
SECURITIES
ASSETS AND 6,471 28,355,585
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 146,520,709
NET INCREASE $ 148,763,321
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 1,645,625
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 32,568
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 100,358
WITHHELD BY
FSC
EXPENSE $ 126,561
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 1,323
CREDITS
TRANSFER 2,327
AGENT CREDITS
$ 130,211
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 2,242,612 $ 6,636,874
NET
INVESTMENT
INCOME
NET REALIZED 118,165,124 276,138,063
GAIN (LOSS)
CHANGE IN NET 28,355,585 (55,053,844)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 148,763,321 227,721,093
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (1,273,612) (7,843,463)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (80,180,371) (188,056,633)
REALIZED GAIN
TOTAL (81,453,983) (195,900,096)
DISTRIBUTIONS
SHARE 412,890,162 445,765,805
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 79,533,093 191,246,667
OF
DISTRIBUTIONS
COST OF SHARES (422,894,145) (822,846,541)
REDEEMED
REDEMPTION 519,487 657,588
FEES
NET INCREASE 70,048,597 (185,176,481)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 137,357,935 (153,355,484)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 1,372,554,442 1,525,909,926
PERIOD
END OF PERIOD $ 1,509,912,377 $ 1,372,554,442
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$2,197,05
2 AND
$1,993,28
4,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 3,970,354 4,420,102
ISSUED IN 884,100 2,023,821
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (3,998,076) (8,234,436)
NET INCREASE 856,378 (1,790,513)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 102.45 $ 100.47 $ 76.13 $ 63.31 $ 52.57 $ 70.42
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INVESTMENT .16 .52 .95 .75 .15 .13
INCOME D
NET REALIZED 9.66 18.01 28.85 18.38 10.61 (9.34)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 9.82 18.53 29.80 19.13 10.76 (9.21)
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.10) (.65) (.59) (.62) (.07) (.16)
INVESTMENT
INCOME
FROM NET (6.28) (15.95) (4.92) (5.74) - (8.51)
REALIZED GAIN
TOTAL (6.38) (16.60) (5.51) (6.36) (.07) (8.67)
DISTRIBUTIONS
REDEMPTION FEES .04 .05 .05 .05 .05 .03
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 105.93 $ 102.45 $ 100.47 $ 76.13 $ 63.31 $ 52.57
END OF PERIOD
TOTAL RETURN B, C 10.73% 20.41% 39.68% 31.24% 20.57% (14.81)%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 1,509,912 $ 1,372,554 $ 1,525,910 $ 943,141 $ 522,890 $ 536,367
OF PERIOD
(000 OMITTED)
RATIO OF 1.20% A 1.33% 1.31% 1.39% 1.59% 1.46% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.18% A, E 1.32% E 1.30% E 1.36% E 1.55% E 1.46% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .30% A .52% 1.06% 1.08% .26% .24% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 85% A 59% 54% 151% 213% 112% A
TURNOVER RATE
AVERAGE $ .0469 $ .0466
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
MEDICAL DELIVERY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
MEDICAL DELIVERY 8.33% 23.53% 118.74% 423.04%
MEDICAL DELIVERY 5.08% 19.82% 112.18% 407.34%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
MEDICAL DELIVERY 23.53% 16.95% 17.99%
MEDICAL DELIVERY 19.82% 16.24% 17.63%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970923 144541 S00000000000001
Medical Delivery S&P 500
00505 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9550.46 9781.00
1987/10/31 6828.88 7674.17
1987/11/30 6420.14 7041.82
1987/12/31 7178.09 7577.70
1988/01/31 7220.44 7896.72
1988/02/29 7590.99 8264.71
1988/03/31 7792.15 8009.33
1988/04/30 7855.67 8098.24
1988/05/31 7728.63 8168.69
1988/06/30 7972.13 8543.63
1988/07/31 7887.43 8511.17
1988/08/31 7665.10 8221.79
1988/09/30 8099.18 8572.04
1988/10/31 8310.92 8810.34
1988/11/30 8046.24 8684.35
1988/12/31 8310.92 8836.33
1989/01/31 8924.97 9483.15
1989/02/28 9253.18 9247.02
1989/03/31 9761.36 9462.47
1989/04/30 10428.35 9953.57
1989/05/31 10968.30 10356.69
1989/06/30 10840.78 10297.66
1989/07/31 12071.24 11227.54
1989/08/31 12633.44 11447.60
1989/09/30 12983.48 11400.66
1989/10/31 12548.58 11136.17
1989/11/30 13131.99 11363.35
1989/12/31 13132.75 11636.07
1990/01/31 11199.23 10855.29
1990/02/28 11481.65 10995.32
1990/03/31 12013.92 11286.70
1990/04/30 12133.40 11004.53
1990/05/31 13849.68 12077.47
1990/06/30 14512.29 11995.34
1990/07/31 14566.60 11956.96
1990/08/31 13404.31 10876.05
1990/09/30 12513.59 10346.39
1990/10/31 12361.52 10301.90
1990/11/30 14077.79 10967.40
1990/12/31 15268.39 11273.39
1991/01/31 17729.23 11764.91
1991/02/28 18825.42 12606.10
1991/03/31 21621.83 12911.17
1991/04/30 20973.06 12942.15
1991/05/31 22706.83 13501.25
1991/06/30 20793.89 12882.90
1991/07/31 22880.28 13483.24
1991/08/31 23148.36 13802.79
1991/09/30 23358.16 13572.29
1991/10/31 23871.02 13754.15
1991/11/30 23206.64 13199.86
1991/12/31 27151.02 14709.93
1992/01/31 27174.88 14436.32
1992/02/29 26125.10 14623.99
1992/03/31 24395.36 14338.83
1992/04/30 23429.09 14760.39
1992/05/31 23190.50 14832.71
1992/06/30 21969.34 14611.71
1992/07/31 23219.52 15209.33
1992/08/31 23193.48 14897.53
1992/09/30 20471.73 15073.32
1992/10/31 21487.50 15126.08
1992/11/30 23597.18 15641.88
1992/12/31 23571.14 15834.28
1993/01/31 22373.05 15967.28
1993/02/28 18830.87 16184.44
1993/03/31 19247.59 16525.93
1993/04/30 19013.18 16126.00
1993/05/31 19599.21 16558.18
1993/06/30 19794.55 16606.20
1993/07/31 20289.41 16539.77
1993/08/31 20224.30 17166.63
1993/09/30 21891.21 17034.45
1993/10/31 22920.00 17387.06
1993/11/30 23297.66 17221.88
1993/12/31 24873.41 17430.27
1994/01/31 26266.84 18022.90
1994/02/28 26410.09 17534.48
1994/03/31 25094.80 16769.97
1994/04/30 25902.21 16984.63
1994/05/31 26774.73 17263.18
1994/06/30 25120.84 16840.23
1994/07/31 26240.80 17392.59
1994/08/31 28897.43 18105.69
1994/09/30 29926.23 17662.10
1994/10/31 30902.93 18059.49
1994/11/30 29574.62 17401.77
1994/12/31 29808.32 17659.84
1995/01/31 31116.77 18117.75
1995/02/28 31593.82 18823.80
1995/03/31 33597.39 19379.29
1995/04/30 32505.47 19950.01
1995/05/31 31439.27 20747.42
1995/06/30 31945.03 21229.38
1995/07/31 35170.98 21933.35
1995/08/31 35335.01 21988.40
1995/09/30 36073.15 22916.31
1995/10/31 35458.03 22834.50
1995/11/30 38424.26 23836.93
1995/12/31 39401.47 24296.03
1996/01/31 41520.62 25123.07
1996/02/29 42382.89 25355.96
1996/03/31 42792.11 25600.14
1996/04/30 43279.35 25977.48
1996/05/31 43187.94 26647.44
1996/06/30 42167.28 26748.97
1996/07/31 37597.12 25567.20
1996/08/31 41070.44 26106.41
1996/09/30 44010.57 27575.68
1996/10/31 40689.59 28336.22
1996/11/30 42989.90 30478.15
1996/12/31 43737.51 29874.38
1997/01/31 45806.84 31740.93
1997/02/28 46833.23 31989.78
1997/03/31 43869.94 30675.32
1997/04/30 44870.09 32506.64
1997/05/31 49030.70 34485.64
1997/06/30 49371.44 36030.60
1997/07/31 52545.70 38897.55
1997/08/29 50734.40 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970923 144544 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Medical Delivery Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $50,734 - a 407.34% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
HEALTHSOUTH CORP. 8.0
HEALTH MANAGEMENT ASSOCIATES, INC. CLASS A 7.6
COLUMBIA/HCA HEALTHCARE CORP. 7.5
UNITED HEALTHCARE CORP. 7.1
UNIVERSAL HEALTH SERVICES, INC. CLASS B 6.9
TENET HEALTHCARE CORP. 6.8
WELLPOINT HEALTH NETWORKS, INC. 5.5
LINCARE HOLDINGS, INC. 3.9
OXFORD HEALTH PLANS, INC. 3.4
CIGNA CORP. 3.4
TOP INDUSTRIES AS OF AUGUST 31, 1997
HOSPITALS 40.1%
HMO'S & OUTPATIENT CARE 27.0%
MISCELLANEOUS HEALTH & ALLIED
SERVICES, NEC 6.5%
MEDICAL SUPPLIES & APPLIANCES 4.2%
MEDICAL SERVICES 3.9%
ALL OTHERS 18.3%
ROW: 1, COL: 1, VALUE: 18.3
ROW: 1, COL: 2, VALUE: 3.9
ROW: 1, COL: 3, VALUE: 4.2
ROW: 1, COL: 4, VALUE: 6.5
ROW: 1, COL: 5, VALUE: 27.0
ROW: 1, COL: 6, VALUE: 40.1
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
MEDICAL DELIVERY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Deborah Wheeler,
Portfolio Manager of
Fidelity Select Medical
Delivery Portfolio
Q. HOW DID THE FUND PERFORM, DEBORAH?
A. The fund had a total return of 8.33% for the six months through
August 31, 1997. That compared to a return of 14.78% for the Standard
& Poor's 500 Index during the same period. The fund's 12-month return
was 23.53%, compared to a 40.65% return for the S&P 500 for the year
that ended August 31, 1997.
Q. WHY DID THE FUND LAG THE S&P 500 DURING THE RECENT SIX-MONTH
PERIOD?
A. The medical delivery industry is largely driven by two sectors:
managed-care companies and hospitals. Each of these sectors trailed
the broader stock market during the recent six-month period as well as
during the past 12 months.
Q. WHAT INFLUENCED THE PERFORMANCE OF THE HOSPITAL STOCKS?
A. The hospital stocks as a group actually experienced good business
fundamentals. They benefited from rising admissions as well as
historically high profit margins, which reflected their continued
success in taking market share away from non-profit hospitals. In
fact, stocks of many hospital companies posted respectable gains.
However, increased federal government scrutiny of Medicare billing
practices in the industry caused concern among investors. It
especially hurt the performance of Columbia/HCA, which is by far the
largest company in the group. As a result, hospital stocks as a group
underperformed on a market-cap weighted basis -stocks such as
Columbia/HCA.
Q. WHAT WAS GOING ON IN THE MANAGED-CARE SECTOR?
A. The managed-care sector includes HMOs as well as other types of
managed care. These companies' stocks posted sizable gains during
January and February, just before the start of the recent six-month
period. Investors began to realize that the companies had raised their
prices sufficiently to keep up with medical cost inflation after
failing to do so in 1996. During the past six months, however,
managed-care stocks generally trailed the market as a whole - partly
because they previously had climbed sharply. During the period, I
increased the fund's weighting in the managed-care group from around
21% to 27% for two reasons. First, it became increasingly clear that
the firms are negotiating better pricing arrangements and will benefit
from higher profit margins this year and in 1998. Second, they became
more attractive on a relative basis as other stocks outpaced them.
Q. WHAT OTHER FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. Pacificare, one of California's largest HMOs, was the fund's
third-largest holding at the beginning of the period. Its stock
suffered because the firm's acquisition of FHP, another California
HMO, depressed Pacificare's earnings. I have reduced the fund's
exposure to Pacificare. HEALTHSOUTH, a rehabilitation services
company, accounted for 7% of the fund's assets at the end of February,
and was a strong performer during the recent six months due to solid
earnings growth. It is now the fund's biggest position.
Q. WHY DID YOU REDUCE THE FUND'S EXPOSURE TO PHARMACEUTICAL
MANUFACTURERS AND DISTRIBUTORS?
A. Those stocks have done very well thanks to drug price inflation.
But it seems likely that in the long run that trend will abate. In
light of the stocks' sizable gains, this seemed like a good time to
take profits.
Q. WHAT'S AHEAD FOR THE MEDICAL DELIVERY SECTOR?
A. Profit margins for managed-care companies should continue to rise
in 1998 as those companies benefit from better pricing. Managed-care
stocks also look inexpensive relative to other stock market sectors.
At the same time, hospital stocks will likely be volatile amid
continued concerns that the government will crack down on Medicare
billing fraud. I will try to overweight hospital stocks that already
reflect those risks, and stay clear of those that seem to run the
greatest risk of receiving special government scrutiny. Those are
short-term considerations, however. Over the long-term, health
services in general should benefit from the aging population, and thus
continue to grow faster than the economy.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 30, 1986
FUND NUMBER: 505
TRADING SYMBOL: FSHCX
SIZE: as of August 31, 1997, more than
$150 million
MANAGER: Deborah Wheeler, since 1996;
manager, Fidelity Select Leisure Portfolio,
1991-1996; Fidelity Select Food and
Agriculture Portfolio, 1991-1993; Fidelity
Select Retailing Portfolio, 1990-1991;
Fidelity Select Construction and Housing
Portfolio, 1986-1988; assistant, Fidelity
Magellan Fund, 1988-1990; joined Fidelity in
1986
(checkmark)
MEDICAL DELIVERY PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.9%
SHARES VALUE (NOTE 1)
COMPUTER SERVICES & SOFTWARE - 0.8%
COMPUTER SERVICES - 0.8%
HBO & Co. 17,800 $ 1,274,921 40410010
DRUGS & PHARMACEUTICALS - 2.6%
BIOTECHNOLOGY - 0.5%
Gilead Sciences, Inc. 3,500 113,313 37555810
Idexx Laboratories, Inc. (a) 34,800 654,675 45168D10
767,988
DRUGS - 2.1%
Bristol-Myers Squibb Co. 10,000 760,000 11012210
Lilly (Eli) & Co. 5,000 523,125 53245710
Pfizer, Inc. 10,000 553,750 71708110
Schering-Plough Corp. 25,000 1,200,000 80660510
3,036,875
TOTAL DRUGS & PHARMACEUTICALS 3,804,863
INSURANCE - 5.0%
ACCIDENT & HEALTH INSURANCE - 0.7%
Aetna, Inc. 11,400 1,087,988 00811710
LIFE INSURANCE - 0.9%
United Wisconsin Services, Inc. 40,100 1,310,769 91323610
MULTI-LINE INSURANCE - 3.4%
CIGNA Corp. 27,000 4,951,125 12550910
TOTAL INSURANCE 7,349,882
MEDICAL EQUIPMENT & SUPPLIES - 6.7%
DRUG DISTRIBUTORS - WHOLESALE - 1.2%
Cardinal Health, Inc. 27,600 1,828,500 14149Y10
MEDICAL SUPPLIES & APPLIANCES - 4.2%
Abbott Laboratories 27,900 1,672,256 00282410
Baxter International, Inc. 35,000 1,861,563 07181310
Boston Scientific Corp. (a) 25,600 1,804,800 10113710
Johnson & Johnson 15,000 850,313 47816010
6,188,932
MEDICAL TECHNOLOGY - 0.2%
Fresenius Medical Care AG
sponsored ADR (a) 1,000 23,188 35802910
Medtronic, Inc. 400 36,150 58505510
St. Jude Medical, Inc. (a) 4,650 176,991 79084910
236,329
OPHTHALMIC GOODS - 1.1%
Cooper Companies, Inc. (a) 48,500 1,600,500 21664840
TOTAL MEDICAL EQUIPMENT & SUPPLIES 9,854,261
MEDICAL FACILITIES MANAGEMENT - 79.3%
HOME HEALTH CARE AGENCIES - 0.4%
American HomePatient, Inc. (a) 1,700 28,475 02664910
Coram Healthcare Corp.
warrants 7/11/99 (a) 9,740 -
Home Health Corp. of America, Inc. (a) 47,900 586,775 43693610
615,250
HOSPITALS - 40.1%
Columbia/HCA Healthcare Corp. 349,823 11,041,288 19767710
HEALTHSOUTH Corp. 472,800 11,790,450 42192410
Health Management Associates, Inc.
Class A (a) 376,752 11,137,731 42193310
Magellan Health Services, Inc. (a) 10,000 305,000 55907910
SHARES VALUE (NOTE 1)
Quorum Health Group, Inc. (a) 130,000 $ 4,428,125 74908410
Tenet Healthcare Corp. (a) 370,400 10,093,400 88033G10
Universal Health Services, Inc. Class B (a) 233,700 10,238,981
91390310
59,034,975
HMO'S & OUTPATIENT CARE - 27.0%
Coventry Corp. (a) 180,600 3,002,475 22285310
Foundation Health Systems, Inc.
Class A (a) 42,070 1,338,352 35040410
Humana, Inc. (a) 205,100 4,832,669 44485910
Maxicare Health Plans, Inc. (a) 1,000 18,000 57790420
Mid-Atlantic Medical Services, Inc. (a) 80,000 1,235,000 59523C10
Oxford Health Plans, Inc. (a) 69,000 5,045,625 69147110
PacifiCare Health Systems, Inc.
Class A (a) 26,500 1,755,625 69511210
Sierra Health Services, Inc. (a) 114,400 3,768,050 82632210
Trigon Healthcare, Inc. 8,400 200,550 89618L10
United HealthCare Corp. 216,100 10,507,863 91058110
Wellpoint Health Networks, Inc. (a) 150,000 8,156,250 94973H10
39,860,459
MEDICAL SERVICES - 3.9%
Lincare Holdings, Inc. (a) 119,900 5,717,731 53279110
National Surgery Centers, Inc. (a) 3,750 74,375 63804410
5,792,106
MISCELLANEOUS HEALTH & ALLIED SERVICES, NEC - 6.5%
Renal Treatment Centers, Inc. (a) 130,300 4,413,913 75967110
Renal Care Group, Inc. (a) 125,000 4,078,125 75993010
Total Renal Care Holdings, Inc. (a) 25,000 1,143,750 89151A10
9,635,788
NURSING CARE & NURSING HOMES - 0.4%
Health Care & Retirement Corp. (a) 15,000 546,563 42193710
NURSING, PERSONAL CARE FACILITIES - 0.5%
NovaCare, Inc. (a) 45,000 677,813 66993010
SKILLED NURSING CARE FACILITIES - 0.5%
Multicare Companies, Inc. (a) 24,950 689,244 62543V10
TOTAL MEDICAL FACILITIES MANAGEMENT 116,852,198
SERVICES - 0.5%
MANAGEMENT CONSULTING SERVICES - 0.5%
HealthCare COMPARE Corp. (a) 13,700 763,775 42192810
MANAGEMENT SERVICES - 0.0%
Medpartners, Inc. (a) 1,000 21,375 58503X10
TOTAL SERVICES 785,150
TOTAL COMMON STOCKS
(Cost $119,237,879) 139,921,275
CASH EQUIVALENTS - 5.1%
Taxable Central Cash Fund (b)
(Cost $7,485,118) 7,485,118 7,485,118 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $126,722,997) $ 147,406,393
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $94,250,369 and $114,996,187, respectively (see Note 3 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 $38,647 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $126,747,691. Net unrealized appreciation
aggregated $20,658,702, of which $24,798,883 related to appreciated
investment securities and $4,140,181 related to depreciated investment
securities.
MEDICAL DELIVERY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 147,406,393
SECURITIES, AT
VALUE
(COST
$126,722,99
7) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 3,440,185
INVESTMENTS
SOLD
RECEIVABLE FOR 471,736
FUND SHARES
SOLD
DIVIDENDS 13,096
RECEIVABLE
INTEREST 39,759
RECEIVABLE
REDEMPTION FEES 614
RECEIVABLE
OTHER 167,822
RECEIVABLES
TOTAL ASSETS 151,539,605
LIABILITIES
PAYABLE FOR $ 935,816
FUND SHARES
REDEEMED
ACCRUED 77,649
MANAGEMENT
FEE
OTHER PAYABLES 147,554
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 1,161,019
NET ASSETS $ 150,378,586
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 114,776,035
ACCUMULATED (768,614)
NET INVESTMENT
(LOSS)
ACCUMULATED 15,687,769
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 20,683,396
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 150,378,586
5,316,495
SHARES
OUTSTANDING
NET ASSET $28.29
VALUE AND
REDEMPTION
PRICE PER
SHARE
($150,378,5
86 (DIVIDED BY)
5,316,495
SHARES)
MAXIMUM $29.16
OFFERING PRICE
PER SHARE
(100/97.00
OF $28.29)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 121,963
INCOME
DIVIDENDS
INTEREST 431,909
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$16,029)
TOTAL INCOME 553,872
EXPENSES
MANAGEMENT $ 511,471
FEE
TRANSFER AGENT 680,323
FEES
ACCOUNTING AND 88,447
SECURITY
LENDING FEES
NON-INTERESTED 385
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 13,290
AND EXPENSES
REGISTRATION FEES 29,592
AUDIT 12,543
LEGAL 3,588
MISCELLANEOUS 592
TOTAL EXPENSES 1,340,231
BEFORE
REDUCTIONS
EXPENSE (17,745) 1,322,486
REDUCTIONS
NET INVESTMENT (768,614)
INCOME (LOSS)
REALIZED AND 15,632,176
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET (4,913,314)
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 10,718,862
NET INCREASE $ 9,950,248
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 111,679
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 2,510
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 34,185
WITHHELD BY
FSC
EXPENSE $ 15,787
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 887
CREDITS
TRANSFER 1,071
AGENT CREDITS
$ 17,745
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (768,614) $ (1,815,979)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 15,632,176 39,056,721
GAIN (LOSS)
CHANGE IN NET (4,913,314) (20,650,234)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 9,950,248 16,590,508
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (11,752,213) (25,354,918)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 82,246,266 213,043,160
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 11,578,782 24,874,771
OF
DISTRIBUTIONS
COST OF SHARES (134,286,482) (332,613,257)
REDEEMED
REDEMPTION 257,219 355,703
FEES
NET INCREASE (40,204,215) (94,339,623)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (42,006,180) (103,104,033)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 192,384,766 295,488,799
PERIOD
END OF PERIOD $ 150,378,586 $ 192,384,766
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$768,614
AND 0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 2,922,405 7,704,445
ISSUED IN 475,127 921,317
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (4,881,557) (12,015,996)
NET INCREASE (1,484,025) (3,390,234)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 28.29 $ 29.00 $ 23.18 $ 20.28 $ 14.46 $ 19.64
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.12) (.23) (.03) .06 (.10) (.13)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 2.11 2.92 7.72 3.74 5.84 (3.56)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.99 2.69 7.69 3.80 5.74 (3.69)
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - - (.06) - -
INVESTMENT
INCOME
FROM NET (2.03) (3.45) (1.91) (.89) - (1.55)
REALIZED GAIN
TOTAL (2.03) (3.45) (1.91) (.95) - (1.55)
DISTRIBUTIONS
REDEMPTION FEES .04 .05 .04 .05 .08 .06
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 28.29 $ 28.29 $ 29.00 $ 23.18 $ 20.28 $ 14.46
END OF PERIOD
TOTAL RETURN B, C 8.33% 10.50% 34.15% 19.63% 40.25% (19.63)%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 150,379 $ 192,385 $ 295,489 $ 299,570 $ 188,553 $ 71,809
OF PERIOD
(000 OMITTED)
RATIO OF 1.56% A 1.57% 1.65% 1.48% 1.82% 1.77% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.54% A, E 1.53% E 1.62% E 1.45% E 1.79% E 1.77% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.89)% A (.84)% (.13)% .29% (.57)% (.89)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 123% A 78% 132% 123% 164% 155% A
TURNOVER RATE
AVERAGE $ .0421 $ .0434
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
AMERICAN GOLD PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
AMERICAN GOLD -24.07% -25.41% 53.69% 10.75%
AMERICAN GOLD -26.35% -27.65% 49.08% 7.43%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
AMERICAN GOLD -25.41% 8.98% 1.03%
AMERICAN GOLD -27.65% 8.31% 0.72%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114427 S00000000000001
American Gold S&P 500
00041 SP001
1987/08/31 9700.00 10000.00
1987/09/30 10112.04 9781.00
1987/10/31 7159.87 7674.17
1987/11/30 8303.90 7041.82
1987/12/31 8057.46 7577.70
1988/01/31 6847.36 7896.72
1988/02/29 7029.37 8264.71
1988/03/31 7732.80 8009.33
1988/04/30 7781.99 8098.24
1988/05/31 7732.80 8168.69
1988/06/30 7885.29 8543.63
1988/07/31 7865.61 8511.17
1988/08/31 7403.22 8221.79
1988/09/30 7083.48 8572.04
1988/10/31 7157.27 8810.34
1988/11/30 7255.65 8684.35
1988/12/31 7053.97 8836.33
1989/01/31 7309.76 9483.15
1989/02/28 7693.45 9247.02
1989/03/31 7422.90 9462.47
1989/04/30 7063.80 9953.57
1989/05/31 6808.01 10356.69
1989/06/30 7191.70 10297.66
1989/07/31 7265.49 11227.54
1989/08/31 7634.42 11447.60
1989/09/30 7678.69 11400.66
1989/10/31 7757.39 11136.17
1989/11/30 8746.13 11363.35
1989/12/31 8608.40 11636.07
1990/01/31 8987.16 10855.29
1990/02/28 8736.29 10995.32
1990/03/31 8396.87 11286.70
1990/04/30 7486.84 11004.53
1990/05/31 8146.00 12077.47
1990/06/30 7624.58 11995.34
1990/07/31 8155.84 11956.96
1990/08/31 8008.27 10876.05
1990/09/30 8003.35 10346.39
1990/10/31 6689.95 10301.90
1990/11/30 6606.33 10967.40
1990/12/31 7127.75 11273.39
1991/01/31 6139.02 11764.91
1991/02/28 6694.87 12606.10
1991/03/31 6670.28 12911.17
1991/04/30 6434.16 12942.15
1991/05/31 6655.52 13501.25
1991/06/30 7103.16 12882.90
1991/07/31 7024.45 13483.24
1991/08/31 6453.84 13802.79
1991/09/30 6345.62 13572.29
1991/10/31 6832.61 13754.15
1991/11/30 6817.85 13199.86
1991/12/31 6689.95 14709.93
1992/01/31 6852.28 14436.32
1992/02/29 6640.76 14623.99
1992/03/31 6188.21 14338.83
1992/04/30 5873.39 14760.39
1992/05/31 6291.51 14832.71
1992/06/30 6699.79 14611.71
1992/07/31 7122.83 15209.33
1992/08/31 6990.02 14897.53
1992/09/30 6950.66 15073.32
1992/10/31 6744.06 15126.08
1992/11/30 6173.45 15641.88
1992/12/31 6483.35 15834.28
1993/01/31 6360.37 15967.28
1993/02/28 6960.50 16184.44
1993/03/31 7742.64 16525.93
1993/04/30 8721.53 16126.00
1993/05/31 9690.59 16558.18
1993/06/30 10256.29 16606.20
1993/07/31 11072.86 16539.77
1993/08/31 10492.40 17166.63
1993/09/30 9380.69 17034.45
1993/10/31 10782.63 17387.06
1993/11/30 10792.47 17221.88
1993/12/31 11584.44 17430.27
1994/01/31 11589.36 18022.90
1994/02/28 11146.64 17534.48
1994/03/31 11417.19 16769.97
1994/04/30 10453.05 16984.63
1994/05/31 10905.61 17263.18
1994/06/30 10369.43 16840.23
1994/07/31 10216.94 17392.59
1994/08/31 10699.01 18105.69
1994/09/30 11633.63 17662.10
1994/10/31 10792.47 18059.49
1994/11/30 9513.51 17401.77
1994/12/31 9793.89 17659.84
1995/01/31 8770.73 18117.75
1995/02/28 9070.79 18823.80
1995/03/31 10462.89 19379.29
1995/04/30 10423.54 19950.01
1995/05/31 10639.98 20747.42
1995/06/30 10787.55 21229.38
1995/07/31 11077.78 21933.35
1995/08/31 11102.37 21988.40
1995/09/30 11097.45 22916.31
1995/10/31 9759.46 22834.50
1995/11/30 10664.57 23836.93
1995/12/31 10890.85 24296.03
1996/01/31 12824.05 25123.07
1996/02/29 13335.63 25355.96
1996/03/31 13655.37 25600.14
1996/04/30 13980.03 25977.48
1996/05/31 15504.95 26647.44
1996/06/30 13315.96 26748.97
1996/07/31 13070.00 25567.20
1996/08/31 14403.08 26106.41
1996/09/30 14137.45 27575.68
1996/10/31 13748.84 28336.22
1996/11/30 13158.55 30478.15
1996/12/31 13060.36 29874.38
1997/01/31 12503.64 31740.93
1997/02/28 14148.72 31989.78
1997/03/31 11901.78 30675.32
1997/04/30 11182.79 32506.64
1997/05/31 11824.39 34485.64
1997/06/30 10811.63 36030.60
1997/07/31 10641.95 38897.55
1997/08/29 10742.69 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114432 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select American Gold Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $10,743 - a 7.43% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
GETCHELL GOLD CORP. 9.6
PLACER DOME, INC. 8.6
EURO-NEVADA MINING LTD. 8.4
NEWMONT MINING CORP. 7.8
NEWMONT GOLD CO. 5.8
GREENSTONE RESOURCES LTD. 4.6
MERIDIAN GOLD, INC. 4.4
FRANCO-NEVADA MINING CORP. 4.4
PIONEER GROUP, INC. 3.2
CAMBIOR, INC. 3.0
TOP INDUSTRIES AS OF AUGUST 31, 1997
GOLD ORES 75.8%
GOLD & SILVER ORES 10.4%
INVESTMENT MANAGERS 3.2%
COPPER ORES 2.3%
METAL MINING 1.9%
ALL OTHERS 6.4%
ROW: 1, COL: 1, VALUE: 6.4
ROW: 1, COL: 2, VALUE: 1.9
ROW: 1, COL: 3, VALUE: 2.3
ROW: 1, COL: 4, VALUE: 3.2
ROW: 1, COL: 5, VALUE: 10.4
ROW: 1, COL: 6, VALUE: 75.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
AMERICAN GOLD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
George Domolky, Portfolio Manager of Fidelity Select American Gold
Q. GEORGE, HOW DID THE FUND PERFORM DURING THE PERIOD?
A. Like most gold funds, we've struggled recently. For the six months
that ended August 31, 1997, the fund was down 24.07%, compared to a
gain of 14.78% in the Standard & Poor's 500 Index over the same
period. For the 12 months that ended August 31, 1997, the fund lost
25.41%, while the S&P 500 gained 40.65%.
Q. WHAT INFLUENCED THE FUND'S PERFORMANCE OVER THE PERIOD?
A. Without question, the most important factor was the sharp decline
in the price of gold - from roughly $360 an ounce at the time of our
last report in February to about $320 an ounce currently. The
combination of low inflation, a strong dollar and an explosive U.S.
stock market has made gold unattractive to many people as an
alternative investment.
Q. WHAT IS THE CURRENT SUPPLY/DEMAND SITUATION FOR GOLD?
A. The supply/demand situation is largely unchanged from what it was
six months ago. Overall, there is an annual production shortfall that
is currently being offset by central bank sales. Demand for gold
jewelry continues to increase, especially in the Far East and India.
However, the gap between production and consumption continues to be
more than offset by central bank selling. In July, for example, there
was a large sale by Australia that caused a sharp selloff. With the
U.S. dollar as strong as it is, there is considerable incentive for
central bankers to hold dollars rather than gold. If the dollar should
weaken or we get a resurgence of inflation, it would reduce that
incentive.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. The fund's strategy had two main components. First, we concentrated
on established companies with strong production profiles, low cash
costs and proven managements. These companies generally held up
reasonably well due to the high quality of earnings. Second, we looked
for smaller companies with excellent exploration and production
opportunities, and with cash on hand. In addition, the fund had
approximately 4% of its holdings in diamond equities, which were some
of the better performers in our portfolio during the period.
Q. CAN YOU PROVIDE THE NAMES OF SOME SPECIFIC STOCKS IN THOSE
CATEGORIES?
A. Certainly. In the category of established companies, Newmont
Mining, Placer Dome and Barrick Gold performed as well as can be
expected considering the decline in gold's price. Some of the
better-performing small-company stocks included Getchell Gold,
Greenstone Resources, Meridian Gold, Euro-Nevada Mining Corp, and
Franco-Nevada. In the category of diamond equities, SouthernEra
Resources and DIA Metropolitan Minerals were excellent performers due
to new exploration successes.
Q. WHAT ABOUT DISAPPOINTMENTS?
A. TVI Pacific showed very poor results because its joint venture with
Echo Bay in the Philippines did not materialize. This is a good
example of the rule that foreign investments generally carry greater
risk than U.S. investments. William Resources was also a
disappointment due to the effect lower gold prices had on its high
cash-cost structure, and we have liquidated our position as a result.
Q. WHAT'S YOUR OUTLOOK, GEORGE?
A. Low gold prices have led to a decline in exploration activities
because many mines are economically unfeasible at the current gold
price level. Eventually, that should result in a contraction in supply
and provide some support for the price of gold. We will continue the
fund's policy of identifying and purchasing low-cost producers and
promising exploration companies with cash in the bank. The stock of
these companies typically has a greater capacity to move independently
of the price of gold and offers the most promising investment
opportunities in the current economic environment.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 041
TRADING SYMBOL: FSAGX
SIZE: as of August 31, 1997, more than
$297 million
MANAGER: George Domolky, since February 1997;
manager, Fidelity Select Precious Metals and
Minerals Portfolio, since February 1997; Fidelity
Canada Fund, 1987-1996; Fidelity Select
Food and Agriculture Portfolio, 1985-1987;
joined Fidelity in 1981
(checkmark)
AMERICAN GOLD PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.4%
SHARES VALUE (NOTE 1)
CANADA - 55.9%
METALS & MINING - 3.2%
METAL MINING - 1.9%
Arizona Star Resource Corp. (a) 494,900 $ 2,496,343 04059G10
Morgain Minerals, Inc. (a) 295,000 408,143 61688E10
Romarco Minerals, Inc. (a) 160,800 480,865 77590310
SouthernEra Resources Ltd. (a) 268,900 2,325,203 84390110
5,710,554
METAL MINING SERVICES - 0.3%
Minefinders Corp. Ltd. (a) 300,000 756,620 60290010
MISCELLANEOUS NONMETAL MINERALS - 1.0%
Camphor Ventures, Inc. 14,100 25,299 13461V10
DIA Metropolitan Minerals Ltd. (a):
Class A 50,650 958,071 25243K20
Class B 102,500 2,167,808 25243K30
3,151,178
TOTAL METALS & MINING 9,618,352
OIL & GAS - 0.4%
OIL & GAS EXPLORATION - 0.4%
Southwestern Gold Corp. (a) 207,500 1,241,038 84548W10
PRECIOUS METALS - 52.3%
GOLD & SILVER ORES - 0.8%
Gold Corp, Inc. Class A (a) 34,500 211,313 38095610
Mentor Exploration & Development
Co. Ltd. (a)(d) 188,000 1,557,917 58719310
Richmont Mines, Inc. (a) 187,300 647,840 76547T10
2,417,070
GOLD ORES - 50.7%
Aber Resources Ltd. (a) 99,900 1,310,164 00291610
Agnico Eagle Mines Ltd. 100,600 880,771 00847410
Argosy Mining Corp. (a) 55,000 29,725 04022W10
Argosy Mining Corp. (warrants) (a)(c) 187,500 - 04022W94
Argosy Mining Corp. (a)(c) 375,000 202,666 04022W99
Barrick Gold Corp. 350,000 7,919,294 06790110
Bema Gold Corp. (a) 415,000 2,183,030 08135F10
Brazilian Resources, Inc. (a) 580,000 125,383 10591310
Cambior, Inc. 830,700 8,889,133 13201L10
Canaarc Resources Corp. (a) 530,000 225,330 13722D10
Canaarc Resources Corp. (warrants) (a) 125,000 - 13722D92
Cathedral Gold Corp. (a) 79,000 39,279 14890710
Crown Resources Corp. (a) 214,600 1,368,075 22856910
Echo Bay Mines Ltd. 405,000 2,042,875 27875110
Euro-Nevada Mining Ltd. 1,651,600 25,290,218 29870P10
Franco-Nevada Mining Corp. 552,600 13,120,641 35186010
Francisco Gold Corp. (a) 161,200 2,468,384 35190210
Francisco Gold Corp. (a)(c) 82,000 1,255,630 35190294
Geomaque Explorations Ltd. (a) 555,900 1,237,781 37247E10
Golden Knight Resources, Inc. (a) 530,800 1,204,842 38109010
Golden Queen Mining Co. Ltd. (a) 120,800 139,276 38115J10
Greenstone Resources Ltd. (a) 1,486,700 13,659,107 39573W10
Iamgold International African Mining
Gold Corp. (a) 100,000 421,546 45091310
Indochina Goldfields Ltd. 20,000 89,353 45591310
Indochina Goldfields Ltd. (a)(c) 100,000 446,767 45591392
International Pursuit Corp. (warrants) (a) 150,000 - 46022D92
Kinross Gold Corp. (a) 938,100 4,089,717 49690210
Meridian Gold, Inc. (a) 2,975,100 13,291,746 58997510
Metallica Resources, Inc. (a) 1,011,600 2,004,612 59125J10
SHARES VALUE (NOTE 1)
Mountain Province Mining, Inc. (a) 722,400 $ 2,863,052 62426E10
Nevsun Resources Ltd. (a) 582,000 2,180,796 64156L10
Oliver Gold Corp. (a) 273,800 155,865 68085H10
Oliver Gold Corp. (warrants) (a) 50,000 - 68085H92
Orvana Minerals Corp. (a) 228,100 821,834 68759M10
Placer Dome, Inc. 1,550,000 25,912,448 72590610
Prime Resources Group, Inc. 1,069,100 8,628,298 74157L10
Queenston Mining, Inc. (a) 254,000 210,485 74832E10
Repadre Capital Corp. (a) 121,900 658,800 76026J10
Repadre Capital Corp. (a)(c) 155,000 837,687 76026J92
Rio Narcea Gold Mines Ltd. (a) 57,900 183,578 76690910
Samax Gold, Inc. (a)(c) 240,000 864,709 79591592
Silver Standard Resources, Inc. (a) 157,700 562,504 82823L10
Sudbury Contact Mines Ltd. (a) 114,800 521,160 86462610
Sutton Resources Ltd. (a) 51,700 489,897 86947440
TVI Pacific, Inc. (a)(d) 6,779,500 1,319,015 87291710
TVI Pacific, Inc. (a)(c) 96,000 18,678 87291792
Teck Corp. Class B (sub-vtg.) 46,000 861,827 87874220
Valerie Gold Resources Ltd. (warrants) (a) 25,000 - 91890897
Viceroy Resources Corp. (a) 70,000 166,456 92564C10
Vista Gold Corp. (a) 1,335,600 885,427 92792610
152,077,861
SILVER ORES - 0.8%
Pan American Silver Corp. (a) 182,700 1,184,869 69790010
Pan American Silver Corp. (warrants) (a) 87,500 - 69790092
Pan American Silver Corp. (a)(c) 175,000 1,134,931 69790096
2,319,800
TOTAL PRECIOUS METALS 156,814,731
TOTAL CANADA 167,674,121
FRANCE - 0.3%
PRECIOUS METALS - 0.3%
GOLD ORES - 0.3%
Guyanor Resources SA Class B (a) 493,440 977,813 40299D23
GHANA - 1.4%
PRECIOUS METALS - 1.4%
GOLD ORES - 1.4%
Ashanti Goldfields Co. Ltd. GDR 389,152 4,037,452 04374320
PERU - 4.8%
PRECIOUS METALS - 4.8%
GOLD ORES - 3.9%
Compania de Minas Buenaventura SA:
Class A 278,182 2,432,192 17999B23
Class B 92,846 843,259 17999B27
Class T 1,208,703 8,472,537 17999B22
11,747,988
SILVER ORES - 0.9%
Compania de Minas Buenaventura SA
Class B sponsored ADR 144,200 2,667,700 20444810
TOTAL PERU 14,415,688
UNITED STATES OF AMERICA - 35.0%
METALS & MINING - 2.3%
COPPER ORES - 2.3%
Freeport McMoRan Copper & Gold, Inc.
Class A 250,000 6,687,500 35671D10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA - CONTINUED
PRECIOUS METALS - 29.1%
GOLD & SILVER ORES - 9.6%
Getchell Gold Corp. (a) 849,948 $ 28,898,232 37426510
GOLD ORES - 19.5%
Battle Mountain Gold Co. 305,000 1,734,688 07159310
Canyon Resources Corp. (a) 678,734 1,527,152 13886910
Homestake Mining Co. 350,000 4,900,000 43761410
Newmont Gold Co. 401,900 17,382,175 65163710
Newmont Mining Corp. 549,240 23,239,718 65163910
Stillwater Mining Co. (a) 185,000 3,885,000 86074Q10
Stillwater Mining Co. (a)(c) 271,800 5,707,800 86074Q90
58,376,533
TOTAL PRECIOUS METALS 87,274,765
SECURITIES INDUSTRY - 3.2%
INVESTMENT MANAGERS - 3.2%
Pioneer Group, Inc. 297,600 9,672,000 72368410
SERVICES - 0.4%
JEWELRY, PRECIOUS METAL - 0.4%
Lazare Kaplan International, Inc. (a) 74,300 1,221,306 52107810
TOTAL UNITED STATES OF AMERICA 104,855,571
TOTAL COMMON STOCKS
(Cost $283,011,383) 291,960,645
CASH EQUIVALENTS - 2.6%
Taxable Central Cash Fund (b)
(Cost $7,860,245) 7,860,245 7,860,245 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $290,871,628) $ 299,820,890
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $10,468,868 or
3.5% of net assets.
4. Affiliated company (see Note 10 of Notes to Financial Statements).
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $158,620,375 and $179,046,880, respectively (see Note 3 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 $47,728 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Mentor Exploration & Development
Co. Ltd. $ - $ - $ - $ 1,557,917
Sudbury Contact Mines Ltd. - 454,796 - -
TVI Pacific, Inc. 1,480,536 908,277 - 1,319,015
TOTALS $ 1,480,536 $ 1,363,073 $ - $ 2,876,932
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $290,942,765. Net unrealized appreciation
aggregated $8,878,125, of which $51,272,043 related to appreciated
investment securities and $42,393,918 related to depreciated
investment securities.
AMERICAN GOLD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 299,820,890
SECURITIES, AT
VALUE
(COST
$290,871,62
8) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,040,164
INVESTMENTS
SOLD
RECEIVABLE FOR 608,971
FUND SHARES
SOLD
DIVIDENDS 172,388
RECEIVABLE
INTEREST 76,510
RECEIVABLE
REDEMPTION FEES 3,904
RECEIVABLE
OTHER 3,500
RECEIVABLES
TOTAL ASSETS 301,726,327
LIABILITIES
PAYABLE TO $ 446,985
CUSTODIAN
BANK
PAYABLE FOR 3,399,551
FUND SHARES
REDEEMED
ACCRUED 148,060
MANAGEMENT
FEE
OTHER PAYABLES 247,189
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 4,241,785
NET ASSETS $ 297,484,542
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 310,777,056
ACCUMULATED (4,255,325)
NET INVESTMENT
(LOSS)
ACCUMULATED (17,986,898)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 8,949,709
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 297,484,542
14,679,793
SHARES
OUTSTANDING
NET ASSET $20.26
VALUE AND
REDEMPTION
PRICE PER
SHARE
($297,484,5
42 (DIVIDED BY)
14,679,793
SHARES)
MAXIMUM $20.89
OFFERING PRICE
PER SHARE
(100/97.00
OF $20.26)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 1,068,174
INCOME
DIVIDENDS
INTEREST 427,456
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$9,885)
TOTAL INCOME 1,495,630
EXPENSES
MANAGEMENT $ 947,981
FEE
TRANSFER AGENT 1,139,478
FEES
ACCOUNTING AND 159,930
SECURITY
LENDING FEES
NON-INTERESTED 733
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 51,894
AND EXPENSES
REGISTRATION FEES 46,092
AUDIT 15,704
LEGAL 936
MISCELLANEOUS 1,016
TOTAL EXPENSES 2,363,764
BEFORE
REDUCTIONS
EXPENSE (103,974) 2,259,790
REDUCTIONS
NET INVESTMENT (764,160)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT (17,143,031)
SECURITIES
(INCLUDING
REALIZED GAIN
(LOSS)
OF
$(491,416)
ON SALES OF
INVESTMENTS
IN AFFILIATED
ISSUERS)
FOREIGN (13,432) (17,156,463)
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (80,342,008)
SECURITIES
ASSETS AND 740 (80,341,268)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) (97,497,731)
NET INCREASE $ (98,261,891)
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 446,086
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 16,189
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 76,823
WITHHELD BY
FSC
EXPENSE $ 102,869
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 288
CREDITS
TRANSFER 817
AGENT CREDITS
$ 103,974
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (764,160) $ (2,461,841)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (17,156,463) 35,925,067
GAIN (LOSS)
CHANGE IN NET (80,341,268) (16,652,278)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE (98,261,891) 16,810,948
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (17,387,791) (6,827,284)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 264,985,697 757,145,884
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 17,028,543 6,693,065
OF
DISTRIBUTIONS
COST OF SHARES (298,199,195) (799,571,083)
REDEEMED
REDEMPTION 1,216,204 2,358,350
FEES
NET INCREASE (14,968,751) (33,373,784)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (130,618,433) (23,390,120)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 428,102,975 451,493,095
PERIOD
END OF PERIOD $ 297,484,542 $ 428,102,975
(INCLUDING
ACCUMULATE
D NET
INVESTMENT
LOSS OF
$4,255,32
5 AND
$3,491,16
5,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 12,036,728 27,099,046
ISSUED IN 755,146 262,370
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (13,289,744) (28,839,831)
NET INCREASE (497,870) (1,478,415)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 28.21 $ 27.11 $ 18.44 $ 22.66 $ 14.15 $ 11.94
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.05) (.16) (.06) (.05) (.11) (.05)
INVESTMENT
INCOME (LOSS) D
NET REALIZED (6.69) 1.60 8.62 (4.25) 8.44 2.16
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM (6.74) 1.44 8.56 (4.30) 8.33 2.11
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (1.29) (.50) - - - -
REALIZED GAIN
REDEMPTION FEES .08 .16 .11 .08 .18 .10
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 20.26 $ 28.21 $ 27.11 $ 18.44 $ 22.66 $ 14.15
END OF PERIOD
TOTAL RETURN B, C (24.07)% 6.10% 47.02% (18.62)% 60.14% 18.51%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 297,485 $ 428,103 $ 451,493 $ 278,197 $ 347,406 $ 168,033
OF PERIOD
(000 OMITTED)
RATIO OF 1.49% A 1.44% 1.39% 1.41% 1.50% 1.59% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.42% A, E 1.42% E 1.39% 1.41% 1.49% E 1.59% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.48)% A (.59)% (.27)% (.22)% (.51)% (.44)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 103% A 63% 56% 34% 39% 30% A
TURNOVER RATE
AVERAGE $ .0243 $ .0270
COMMISSION
RATE F
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING DURING
THE
PERIOD. E FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS WITH
THIRD PARTIES WHO
EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES TO
FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER 1,
1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING ON
THE MIX OF TRADES
EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
ENERGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
ENERGY 21.38% 27.88% 104.51% 144.72%
ENERGY 17.74% 24.05% 98.37% 137.38%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark included reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
ENERGY 27.88% 15.38% 9.36%
ENERGY 24.05% 14.68% 9.03%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 132832 S00000000000001
Energy S&P 500
00060 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9491.06 9781.00
1987/10/31 6983.75 7674.17
1987/11/30 6692.49 7041.82
1987/12/31 7168.94 7577.70
1988/01/31 7435.90 7896.72
1988/02/29 7702.86 8264.71
1988/03/31 8249.81 8009.33
1988/04/30 8562.36 8098.24
1988/05/31 8249.81 8168.69
1988/06/30 8340.97 8543.63
1988/07/31 8393.06 8511.17
1988/08/31 8074.01 8221.79
1988/09/30 7982.85 8572.04
1988/10/31 8054.47 8810.34
1988/11/30 8074.01 8684.35
1988/12/31 8311.82 8836.33
1989/01/31 8939.88 9483.15
1989/02/28 8799.57 9247.02
1989/03/31 9307.37 9462.47
1989/04/30 9621.40 9953.57
1989/05/31 9734.99 10356.69
1989/06/30 9935.43 10297.66
1989/07/31 10349.69 11227.54
1989/08/31 10576.86 11447.60
1989/09/30 10743.90 11400.66
1989/10/31 10670.40 11136.17
1989/11/30 11071.29 11363.35
1989/12/31 11871.40 11636.07
1990/01/31 11341.36 10855.29
1990/02/28 11694.72 10995.32
1990/03/31 11701.52 11286.70
1990/04/30 11307.39 11004.53
1990/05/31 11993.71 12077.47
1990/06/30 11711.05 11995.34
1990/07/31 12508.70 11956.96
1990/08/31 12733.50 10876.05
1990/09/30 12697.24 10346.39
1990/10/31 12044.61 10301.90
1990/11/30 11914.09 10967.40
1990/12/31 11338.09 11273.39
1991/01/31 10603.70 11764.91
1991/02/28 11592.88 12606.10
1991/03/31 11435.51 12911.17
1991/04/30 11562.91 12942.15
1991/05/31 11630.35 13501.25
1991/06/30 11112.21 12882.90
1991/07/31 11682.84 13483.24
1991/08/31 11908.08 13802.79
1991/09/30 11787.95 13572.29
1991/10/31 12140.84 13754.15
1991/11/30 11239.85 13199.86
1991/12/31 11342.08 14709.93
1992/01/31 10735.15 14436.32
1992/02/29 10750.32 14623.99
1992/03/31 10439.27 14338.83
1992/04/30 11152.42 14760.39
1992/05/31 11683.49 14832.71
1992/06/30 11105.34 14611.71
1992/07/31 11401.99 15209.33
1992/08/31 11607.36 14897.53
1992/09/30 11675.82 15073.32
1992/10/31 11173.80 15126.08
1992/11/30 10915.18 15641.88
1992/12/31 11071.18 15834.28
1993/01/31 11488.67 15967.28
1993/02/28 12246.33 16184.44
1993/03/31 12872.57 16525.93
1993/04/30 13120.18 16126.00
1993/05/31 13514.72 16558.18
1993/06/30 13692.64 16606.20
1993/07/31 13592.07 16539.77
1993/08/31 14667.37 17166.63
1993/09/30 14582.28 17034.45
1993/10/31 14373.41 17387.06
1993/11/30 12632.82 17221.88
1993/12/31 13191.81 17430.27
1994/01/31 13898.37 18022.90
1994/02/28 13432.68 17534.48
1994/03/31 12782.32 16769.97
1994/04/30 13758.72 16984.63
1994/05/31 13904.32 17263.18
1994/06/30 13831.52 16840.23
1994/07/31 14041.83 17392.59
1994/08/31 13807.26 18105.69
1994/09/30 13702.10 17662.10
1994/10/31 14478.61 18059.49
1994/11/30 13588.86 17401.77
1994/12/31 13246.22 17659.84
1995/01/31 12929.04 18117.75
1995/02/28 13438.19 18823.80
1995/03/31 14172.70 19379.29
1995/04/30 14608.27 19950.01
1995/05/31 14985.20 20747.42
1995/06/30 14549.63 21229.38
1995/07/31 14893.06 21933.35
1995/08/31 14784.17 21988.40
1995/09/30 14792.55 22916.31
1995/10/31 14155.95 22834.50
1995/11/30 14968.45 23836.93
1995/12/31 16078.65 24296.03
1996/01/31 16327.07 25123.07
1996/02/29 16249.97 25355.96
1996/03/31 17337.88 25600.14
1996/04/30 18177.46 25977.48
1996/05/31 18365.32 26647.44
1996/06/30 18705.25 26748.97
1996/07/31 17864.37 25567.20
1996/08/31 18562.12 26106.41
1996/09/30 19546.14 27575.68
1996/10/31 20342.30 28336.22
1996/11/30 21469.44 30478.15
1996/12/31 21299.95 29874.38
1997/01/31 21786.34 31740.93
1997/02/28 19556.31 31989.78
1997/03/31 20097.76 30675.32
1997/04/30 19918.36 32506.64
1997/05/31 21731.75 34485.64
1997/06/30 22050.05 36030.60
1997/07/31 23496.91 38897.55
1997/08/29 23738.05 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 132836 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Energy Portfolio on August 31, 1987, and
the current maximum 3% sales charge was paid. As the chart shows, by
August 31, 1997, the value of the investment would have grown to
$23,738 - a 137.38% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 7.2
BRITISH PETROLEUM PLC ADR 5.4
MOBIL CORP. 5.0
USX-MARATHON GROUP 4.3
TEXACO, INC. 4.0
COASTAL CORP. (THE) 3.9
EXXON CORP. 3.7
ROYAL DUTCH PETROLEUM CO. 3.7
TRANSOCEAN OFFSHORE, INC. 3.6
ELF AQUITAINE SA SPONSORED ADR 3.5
TOP INDUSTRIES AS OF AUGUST 31, 1997
OIL & GAS EXPLORATION 26.8%
PETROLEUM REFINERS 22.6%
CRUDE PETROLEUM & GAS 21.6%
DRILLING 8.7%
OIL & GAS SERVICES 5.9%
ALL OTHERS 14.4%
ROW: 1, COL: 1, VALUE: 14.4
ROW: 1, COL: 2, VALUE: 5.9
ROW: 1, COL: 3, VALUE: 8.699999999999999
ROW: 1, COL: 4, VALUE: 21.6
ROW: 1, COL: 5, VALUE: 22.6
ROW: 1, COL: 6, VALUE: 26.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ENERGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Larry Rakers, Portfolio Manager of Fidelity
Select Energy Portfolio
Q. HOW DID THE FUND PERFORM, LARRY?
A. For the six months that ended August 31, 1997, the fund generated a
return of 21.38%, compared to the 14.78% return of the Standard &
Poor's 500 Index. For the 12 months that ended August 31, 1997, the
fund returned 27.88%, while the S&P 500 returned 40.65%.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE S&P 500 DURING THE
LATEST SIX-MONTH PERIOD?
A. Since the energy market was fairly stable during the period, the
fund didn't get much help from big changes in oil and natural gas
prices. Therefore, stock selection was the key to the fund's strong
performance during the period. The movement toward deep-water
exploration and the investments I have made in those companies, such
as Schlumberger, Halliburton, Transocean Offshore, Diamond Offshore
Drilling and Noble Drilling, benefited the fund.
Q. COULD YOU EXPLAIN THE MOVEMENT TO DEEP-WATER EXPLORATION?
A. In the past five years, technology has been developed to extract
oil and gas from large deep-water fields in cost-effective ways.
Specifically, a company might be able to return its cost of capital on
the average oil field when oil prices are about $20 a barrel. In deep
waters, a company may be able to return its cost of capital when oil
prices are as low as $12. On top of that, many shallow-water drilling
opportunities have been exhausted. As a result, we've seen an
explosion of exploration activity in the deep waters in the Gulf of
Mexico, off the coast of the U.S., offshore from West Africa and in
the North Sea.
Q. TOTAL WAS AGAIN THE FUND'S LARGEST HOLDING AT THE END OF THE
PERIOD. WHAT DID YOU FIND ATTRACTIVE ABOUT THIS STOCK?
A. Total is a French integrated oil company that formerly was
partially owned by the government and had a relatively high cost
structure. Over the past few years, the company has transitioned into
a more shareholder-focused company and, in an effort to grow earnings
and cash flow, has cut costs and boosted production. The company has
done a good job with this transition and was rewarded by a higher
stock price during the period.
Q. SEVERAL OF THE FUND'S TOP 10 HOLDINGS WERE INTEGRATED OIL
COMPANIES, SUCH AS MOBIL, TEXACO AND EXXON. WHY?
A. The price of oil recently has traded above $20 a barrel - a level
at which most companies have a return above their cost of capital. As
a result, companies have taken their excess returns and plowed the
money back into exploration activities. Over time, I think the supply
of oil will increase, which may drive down its price. Considering that
possibility, I invested a large portion of the fund's assets in
integrated oil companies because they are less sensitive to oil prices
than pure exploration and production companies. Integrated oil
companies look for oil, process it in their refineries, and make
chemicals out of it or make gasoline and sell it to consumers at
gasoline stations. If oil prices go down, these companies still make
money by selling gasoline to consumers and from their chemical
operations.
Q. WHAT WERE THE WEAK AREAS FOR THE FUND?
A. Chesapeake Energy, an exploration and production company, was a big
disappointment. About two or three years ago, the company began
drilling a few potentially interesting plays in Texas and Louisiana.
Chesapeake produced a lot of gas in the first two or three years, and
analysts projected the fields would last several more years into the
future. However, recent exploration has been unsuccessful, causing the
stock to fall during the period. The fund sold its position in
Chesapeake by the end of the period.
Q. WHAT'S YOUR OUTLOOK FOR THE ENERGY MARKET IN THE NEAR FUTURE?
A. It's difficult to project short-term energy price movements because
they are so dependent on three unpredictable factors: political
instability, the weather and economic growth. If we see political
instability in any oil-producing country, I think oil prices may go
up. Weather can swing the markets, too. We've seen many reports about
El Nino lately. This phenomenon occurs when the temperature in the
Pacific Ocean is warmer than average, which some scientists believe is
a precursor to a warmer-than-average winter. A warm winter likely
would cause decreased demand for oil and gas, pushing prices down.
Finally, economic growth helps boost demand, which would bolster the
energy market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: JULY 14, 1981
FUND NUMBER: 060
TRADING SYMBOL: FSENX
SIZE: AS OF AUGUST 31, 1997, MORE THAN
$179 MILLION
MANAGER: LAWRENCE RAKERS, SINCE JANUARY
1997; MANAGER, FIDELITY SELECT PAPER AND
FOREST PRODUCTS PORTFOLIO, SINCE 1996; FIDELITY
SELECT AMERICAN GOLD PORTFOLIO, 1995-FEBRUARY
1997; FIDELITY SELECT PRECIOUS METALS AND
MINERALS PORTFOLIO, 1996-FEBRUARY 1997;
JOINED FIDELITY IN 1993
(CHECKMARK)
ENERGY PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 94.2%
SHARES VALUE (NOTE 1)
AUTOS, TIRES, & ACCESSORIES - 0.4%
PETROLEUM - WHOLESALE - 0.4%
World Fuel Services Corp. 32,300 $ 747,445 98147510
CHEMICALS & PLASTICS - 5.2%
CHEMICALS - 3.6%
du Pont (E.I.) de Nemours & Co. 32,500 2,025,156 26353410
Monsanto Co. 46,100 2,025,519 61166210
Sasol, Ltd. 45,800 610,016 80386610
Solutia, Inc. 10,000 189,375 83437610
Witco Corp. 30,000 1,410,000 97738510
6,260,066
UNSUPPLIED PLASTICS FILM & SHEET - 1.6%
W.R. Grace & Co. 40,000 2,752,500 38391110
TOTAL CHEMICALS & PLASTICS 9,012,566
COAL - 0.3%
BITUMINOUS COAL, LIG SURFACE MINING - 0.3%
Zeigler Coal Holding Co. 20,000 511,250 98928610
ELECTRICAL EQUIPMENT - 0.1%
MOTORS & GENERATORS - 0.1%
NQL Drilling Tools, Inc. Class A 20,000 147,721 62936W10
ENERGY SERVICES - 14.6%
DRILLING - 8.7%
Artisan Corp. 15,000 151,324 04314F10
Diamond Offshore Drilling, Inc. 96,200 5,254,925 25271C10
Noble Drilling Corp. (a) 123,800 3,520,563 65504210
Ryan Energy Technologies, Inc. 20,000 146,280 78348T10
Transocean Offshore, Inc. 65,566 6,232,868 89381710
15,305,960
OIL & GAS SERVICES - 5.9%
Dresser Industries, Inc. 27,800 1,160,650 26159710
Eni Spa sponsored ADR 25,100 1,393,050 26874R10
Halliburton Co. 85,200 4,068,300 40621610
Schlumberger Ltd. 25,300 1,927,544 80685710
Weatherford Enterra, Inc. (a) 37,600 1,731,950 94707110
10,281,494
TOTAL ENERGY SERVICES 25,587,454
HOLDING COMPANIES - 1.3%
HOLDING COMPANY OFFICES, NEC - 1.3%
Norfolk Southern Corp. 23,600 2,312,800 65584410
IRON & STEEL - 0.2%
FABRICATED METAL PRODUCTS - 0.2%
Prudential Steel Ltd. 10,000 398,126 74435C10
OIL & GAS - 71.6%
CRUDE PETROLEUM & GAS - 21.6%
Anadarko Petroleum Corp. 27,800 2,041,563 03251110
Basin Exploration, Inc. (a) 41,800 428,450 07010710
Burlington Resources, Inc. 33,600 1,701,000 12201410
Elf Aquitaine SA sponsored ADR 108,500 6,048,875 28626910
Enserch Exploration, Inc. (a) 250,000 2,250,000 29356V10
Nuevo Energy Corp. 20,000 1,016,250 67050910
OEMV AG 9,000 1,183,736 67399592
Occidental Petroleum Corp. 40,000 937,500 67459910
Ocean Energy, Inc. (a) 49,500 3,183,469 67481210
Petrobras PN (Pfd. Reg.) 3,800,000 925,938 71699794
Rio Alto Exploration Ltd. (a) 159,600 1,483,581 76689210
Santa Fe Energy Resources, Inc. 130,600 1,444,763 80201210
Stone Energy Corp. 20,000 610,000 86164210
SHARES VALUE (NOTE 1)
Total SA sponsored ADR 264,900 $ 12,549,638 89151E10
Tullow Oil PLC (a) 268,160 421,517 89999C22
United Meridian Corp. (a) 42,800 1,677,225 91086510
37,903,505
OIL & GAS EXPLORATION - 26.8%
Abacan Resource Corp. (a) 187,200 514,800 00291910
Amerada Hess Corp. 55,700 3,237,563 02355110
Anderson Exploration Ltd. (a) 66,900 833,990 03390110
Chevron Corp. 50,100 3,879,619 16675110
Exxon Corp. 105,700 6,467,519 30229010
Kerr-McGee Corp. 34,100 2,118,463 49238610
Mobil Corp. 121,200 8,817,300 60705910
Petro-Canada 135,100 2,336,444 71644E10
Phillips Petroleum Co. 59,200 2,815,700 71850710
Texaco, Inc. 61,300 7,064,825 88169410
USX-Marathon Group 232,400 7,567,525 90290582
Unocal Corp. 7,635 298,242 91528910
Woodside Petroleum Ltd. 114,000 909,645 98022810
46,861,635
OIL FIELD EQUIPMENT - 0.6%
EVI, Inc. (a) 19,000 998,688 26893910
PETROLEUM REFINERS - 22.6%
British Petroleum PLC ADR 112,536 9,523,359 11088940
Coastal Corp. (The) 118,600 6,849,150 19044110
Pennzoil Co. 27,000 2,084,063 70990310
Royal Dutch Petroleum Co. 126,100 6,399,575 78025780
Shell Transport & Trading Co. PLC
ADR 133,400 5,427,713 82270360
Tesoro Petroleum Corp. 4,100 69,700 88160910
Tosco Corp. 95,700 3,164,081 89149030
Ultramar Diamond Shamrock Corp. 12,000 391,500 90400010
Valero Energy Corp. 166,000 5,529,875 91913Y10
Wainoco Oil Corp. 33,100 153,088 93067610
39,592,104
TOTAL OIL & GAS 125,355,932
RAILROADS - 0.5%
Wisconsin Central Transportation Corp. 30,000 930,000 97659210
TOTAL COMMON STOCKS
(Cost $139,228,942) 165,003,294
CASH EQUIVALENTS - 5.8%
Taxable Central Cash Fund (b)
(Cost $10,159,125) 10,159,125 10,159,125 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $149,388,067) $ 175,162,419
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $104,557,732 and $168,414,345, respectively (see Note 3 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 $31,210 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (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 70.7%
France 10.6
United Kingdom 8.5
Netherlands 3.7
Canada 3.4
Others (individually less than 1%) 3.1
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $149,533,638. Net unrealized appreciation
aggregated $25,628,781, of which $27,646,127 related to appreciated
investment securities and $2,017,346 related to depreciated investment
securities.
ENERGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 175,162,419
SECURITIES, AT
VALUE
(COST
$149,388,06
7) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 2,718,907
INVESTMENTS
SOLD
RECEIVABLE FOR 2,738,763
FUND SHARES
SOLD
DIVIDENDS 598,256
RECEIVABLE
INTEREST 62,440
RECEIVABLE
REDEMPTION FEES 584
RECEIVABLE
TOTAL ASSETS 181,281,369
LIABILITIES
PAYABLE FOR $ 1,123,475
INVESTMENTS
PURCHASED
PAYABLE FOR 797,155
FUND SHARES
REDEEMED
ACCRUED 86,661
MANAGEMENT
FEE
OTHER PAYABLES 170,330
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 2,177,621
NET ASSETS $ 179,103,748
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 133,043,510
UNDISTRIBUTED 870,700
NET INVESTMENT
INCOME
ACCUMULATED 19,417,585
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 25,771,953
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 179,103,748
7,277,268
SHARES
OUTSTANDING
NET ASSET $24.61
VALUE AND
REDEMPTION
PRICE PER
SHARE
($179,103,7
48 (DIVIDED BY)
7,277,268
SHARES)
MAXIMUM $25.37
OFFERING PRICE
PER SHARE
(100/97.00
OF $24.61)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 2,022,077
INCOME
DIVIDENDS
INTEREST 478,227
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$21,107)
TOTAL INCOME 2,500,304
EXPENSES
MANAGEMENT $ 628,211
FEE
TRANSFER AGENT 827,706
FEES
ACCOUNTING AND 106,009
SECURITY
LENDING FEES
NON-INTERESTED 492
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 23,246
AND EXPENSES
REGISTRATION FEES 30,374
AUDIT 13,588
LEGAL 664
MISCELLANEOUS 2,930
TOTAL EXPENSES 1,633,220
BEFORE
REDUCTIONS
EXPENSE (43,683) 1,589,537
REDUCTIONS
NET INVESTMENT 910,767
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 19,722,447
SECURITIES
FOREIGN (11,390) 19,711,057
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 18,793,081
SECURITIES
ASSETS AND (2,399) 18,790,682
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 38,501,739
NET INCREASE $ 39,412,506
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 252,355
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 7,698
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 61,635
WITHHELD BY
FSC
EXPENSE $ 43,683
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 910,767 $ 1,086,670
NET
INVESTMENT
INCOME
NET REALIZED 19,711,057 20,637,191
GAIN (LOSS)
CHANGE IN NET 18,790,682 (2,355,783)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 39,412,506 19,368,078
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (309,753) (1,000,086)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (10,331,545) (9,661,247)
REALIZED GAIN
TOTAL (10,641,298) (10,661,333)
DISTRIBUTIONS
SHARE 84,495,577 338,291,399
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 10,476,877 10,462,236
OF
DISTRIBUTIONS
COST OF SHARES (148,060,645) (274,385,798)
REDEEMED
REDEMPTION 156,173 514,459
FEES
NET INCREASE (52,932,018) 74,882,296
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (24,160,810) 83,589,041
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 203,264,558 119,675,517
PERIOD
END OF PERIOD $ 179,103,748 $ 203,264,558
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$870,700
AND
$428,529,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 3,738,962 15,419,263
ISSUED IN 519,427 507,572
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (6,518,948) (12,698,556)
NET INCREASE (2,260,559) 3,228,279
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY FEBRUARY 28,
28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 21.31 $ 18.97 $ 16.10 $ 16.73 $ 15.84 $ 14.70
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .10 .13 .18 .07 .06 .23
INVESTMENT
INCOME D
NET REALIZED 4.21 3.59 3.13 (.11) 1.35 1.16
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 4.31 3.72 3.31 (.04) 1.41 1.39
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.03) (.13) (.11) (.08) (.03) (.27)
INVESTMENT
INCOME
FROM NET (1.00) (1.31) (.36) (.54) (.57) -
REALIZED GAIN
TOTAL (1.03) (1.44) (.47) (.62) (.60) (.27)
DISTRIBUTIONS
REDEMPTION FEES .02 .06 .03 .03 .08 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 24.61 $ 21.31 $ 18.97 $ 16.10 $ 16.73 $ 15.84
END OF PERIOD
TOTAL RETURN B, C 21.38% 20.35% 20.92% .04% 9.69% 9.81%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 179,104 $ 203,265 $ 119,676 $ 96,023 $ 145,490 $ 179,133
OF PERIOD
(000 OMITTED)
RATIO OF 1.54% A 1.57% 1.63% 1.85% 1.67% 1.71% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.50% A, 1.55% 1.63% 1.85% 1.66% 1.71% A
EXPENSES TO E E E
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET .86% A .62% 1.04% .42% .37% 1.88% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 110% A 87% 97% 106% 157% 72% A
TURNOVER RATE
AVERAGE $ .0244 $ .0399
COMMISSION
RATE F
</TABLE>
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 N
ET INVESTMENT
INCOME PER SHARE
HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
ENERGY SERVICE PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
ENERGY SERVICE 59.09% 82.75% 251.34% 192.11%
ENERGY SERVICE 54.32% 77.27% 240.80% 183.35%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
ENERGY SERVICE 82.75% 28.57% 11.32%
ENERGY SERVICE 77.27% 27.79% 10.98%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115122 S00000000000001
Energy Service S&P 500
00043 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9385.61 9781.00
1987/10/31 6034.70 7674.17
1987/11/30 5375.26 7041.82
1987/12/31 5789.33 7577.70
1988/01/31 6019.37 7896.72
1988/02/29 6548.46 8264.71
1988/03/31 6931.86 8009.33
1988/04/30 7069.88 8098.24
1988/05/31 6586.80 8168.69
1988/06/30 6211.07 8543.63
1988/07/31 6111.38 8511.17
1988/08/31 6226.40 8221.79
1988/09/30 5958.02 8572.04
1988/10/31 5758.66 8810.34
1988/11/30 5513.28 8684.35
1988/12/31 5766.32 8836.33
1989/01/31 6119.05 9483.15
1989/02/28 6188.06 9247.02
1989/03/31 6579.13 9462.47
1989/04/30 6893.52 9953.57
1989/05/31 7016.21 10356.69
1989/06/30 7246.25 10297.66
1989/07/31 7652.65 11227.54
1989/08/31 8013.04 11447.60
1989/09/30 7898.02 11400.66
1989/10/31 7506.96 11136.17
1989/11/30 8151.07 11363.35
1989/12/31 9193.91 11636.07
1990/01/31 8603.48 10855.29
1990/02/28 9416.28 10995.32
1990/03/31 9868.70 11286.70
1990/04/30 9347.27 11004.53
1990/05/31 10919.21 12077.47
1990/06/30 10359.45 11995.34
1990/07/31 11333.28 11956.96
1990/08/31 11133.91 10876.05
1990/09/30 10919.21 10346.39
1990/10/31 9546.64 10301.90
1990/11/30 9692.33 10967.40
1990/12/31 9355.26 11273.39
1991/01/31 8932.82 11764.91
1991/02/28 10369.13 12606.10
1991/03/31 9562.64 12911.17
1991/04/30 9608.73 12942.15
1991/05/31 9862.20 13501.25
1991/06/30 8571.82 12882.90
1991/07/31 9217.01 13483.24
1991/08/31 9117.16 13802.79
1991/09/30 8279.94 13572.29
1991/10/31 8402.84 13754.15
1991/11/30 7396.65 13199.86
1991/12/31 7158.54 14709.93
1992/01/31 7058.69 14436.32
1992/02/29 7204.63 14623.99
1992/03/31 6690.01 14338.83
1992/04/30 7243.03 14760.39
1992/05/31 7819.09 14832.71
1992/06/30 7365.92 14611.71
1992/07/31 7673.16 15209.33
1992/08/31 8064.88 14897.53
1992/09/30 8310.67 15073.32
1992/10/31 7880.54 15126.08
1992/11/30 7719.24 15641.88
1992/12/31 7404.33 15834.28
1993/01/31 7696.20 15967.28
1993/02/28 8456.60 16184.44
1993/03/31 9124.84 16525.93
1993/04/30 9616.72 16126.00
1993/05/31 10062.58 16558.18
1993/06/30 10008.77 16606.20
1993/07/31 10147.14 16539.77
1993/08/31 10500.75 17166.63
1993/09/30 10193.26 17034.45
1993/10/31 10047.20 17387.06
1993/11/30 8986.36 17221.88
1993/12/31 8956.02 17430.27
1994/01/31 9040.87 18022.90
1994/02/28 8994.59 17534.48
1994/03/31 8323.47 16769.97
1994/04/30 8758.65 16984.63
1994/05/31 9148.81 17263.18
1994/06/30 9427.49 16840.23
1994/07/31 9602.67 17392.59
1994/08/31 9220.47 18105.69
1994/09/30 9570.82 17662.10
1994/10/31 9953.01 18059.49
1994/11/30 9435.46 17401.77
1994/12/31 9006.84 17659.84
1995/01/31 9063.43 18117.75
1995/02/28 9677.90 18823.80
1995/03/31 10211.52 19379.29
1995/04/30 10834.08 19950.01
1995/05/31 11117.06 20747.42
1995/06/30 10737.05 21229.38
1995/07/31 11270.67 21933.35
1995/08/31 11723.44 21988.40
1995/09/30 11755.78 22916.31
1995/10/31 10737.05 22834.50
1995/11/30 11343.44 23836.93
1995/12/31 12688.29 24296.03
1996/01/31 12964.49 25123.07
1996/02/29 13466.67 25355.96
1996/03/31 14529.60 25600.14
1996/04/30 15622.27 25977.48
1996/05/31 15395.00 26647.44
1996/06/30 15428.67 26748.97
1996/07/31 14578.54 25567.20
1996/08/31 15504.43 26106.41
1996/09/30 16085.21 27575.68
1996/10/31 17878.07 28336.22
1996/11/30 18601.94 30478.15
1996/12/31 18916.21 29874.38
1997/01/31 19969.53 31740.93
1997/02/28 17810.66 31989.78
1997/03/31 19064.20 30675.32
1997/04/30 18843.83 32506.64
1997/05/31 21459.23 34485.64
1997/06/30 22863.97 36030.60
1997/07/31 26458.99 38897.55
1997/08/29 28335.05 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115131 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Energy Service Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $28,335 - a 183.35% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
COOPER CAMERON CORP. 5.7
HALLIBURTON CO. 5.2
SCHLUMBERGER LTD. 4.2
TRANSOCEAN OFFSHORE, INC. 4.1
NOBLE DRILLING CORP. 4.0
WESTERN ATLAS, INC. 3.9
DRESSER INDUSTRIES, INC. 3.7
WEATHERFORD ENTERRA, INC. 3.6
BAKER HUGHES, INC. 3.5
DIAMOND OFFSHORE DRILLING, INC. 3.0
TOP INDUSTRIES AS OF AUGUST 31, 1997
OIL & GAS SERVICES 39.9%
DRILLING 25.3%
OIL FIELD EQUIPMENT 10.8%
FABRICATED PIPE & FITTINGS 2.7%
ARCHITECTS & ENGINEERING 2.7%
ALL OTHERS 18.6%
ROW: 1, COL: 1, VALUE: 18.6
ROW: 1, COL: 2, VALUE: 2.7
ROW: 1, COL: 3, VALUE: 2.7
ROW: 1, COL: 4, VALUE: 10.8
ROW: 1, COL: 5, VALUE: 25.3
ROW: 1, COL: 6, VALUE: 42.6
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ENERGY SERVICE PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Robert Ewing, Portfolio Manager of Fidelity Select Energy Service
Portfolio
Q. HOW DID THE FUND PERFORM, BOB?
A. It would be hard to beat our performance over the period just past.
For the six months that ended August 31, 1997, the fund was up 59.09%,
compared to a gain of 14.78% in the Standard & Poor's 500 Index over
the same period. For the 12 months that ended August 31, 1997, the
fund gained 82.75%, while the S&P 500 gained 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE PERIOD?
A. This sector is benefiting from an economic revival after about 15
years of tough times. As a result of high demand for hydrocarbons in
the 1970s, we had increasing energy prices, which led to more
exploration. People assumed that prices would keep going up, and when
they didn't, a lot of firms were left with excess capacity. For
example, the number of drill rigs in use worldwide in the early 1980s
was roughly 5,000. By the early 1990s that number was down below
1,700. Currently, it is somewhere around 2,200, and utilization has
reached the point at which many of the companies in our sector have
benefited from favorable pricing. The demand for offshore equipment is
especially strong.
Q. AGAINST THIS BACKDROP, WHAT STRATEGY HAVE YOU USED?
A. We've tried to expose the fund to those segments of the industry
with the most pricing leverage. In the energy service sector, there
are cycles of profitability that are predictable to some extent.
First, the makers of drill rigs and related equipment do well when
exploration activity is high. As wells are discovered and built,
companies that manufacture the materials to build the wells benefit.
In the next stage, an infrastructure must be built to transport oil
and gas from the wells to the distribution points. We've tried to get
in front of those waves of activity. In addition, now that many stocks
in the sector have risen substantially, we've been using various
valuation filters to prevent us from chasing stocks that are too
expensive.
Q. ARE THERE ANY OTHER THEMES YOU'D LIKE TO HIGHLIGHT?
A. Yes, there are. We are particularly interested in companies
involved in some facet of deep water drilling. Exploration results to
date indicate that in size and flow rate, some deep water finds far
exceed the typical shallow water site. Due to recent advances in
drilling technology, many of these deep water sites have just become
reachable in the last five years. Deep water drilling is really the
frontier of this industry right now, and we are trying to position the
fund to benefit from it.
Q. WHAT STOCKS PERFORMED WELL FOR YOU OVER THE PERIOD?
A. Cooper Cameron performed extremely well. The company manufactures
pressure control equipment, risers, valves and other enabling
technologies for deep water drilling. Schlumberger, with one of the
biggest fleets of offshore drilling equipment in the industry, saw its
revenues grow 25% to 30%, and earnings grew even faster. Halliburton
has done well because of strong demand for its pressure pumping
equipment and higher operating margins in its consulting business.
Q. HOW ABOUT DISAPPOINTMENTS?
A. United Meridian is an exploration and production company that,
although it posted a positive return, was hurt by the decline in
commodity prices. The same conditions applied to Union Pacific
Resources, which we no longer hold.
Q. WHAT'S THE CURRENT OUTLOOK FOR ENERGY SERVICE, BOB?
A. Although capacity is still very tight in the sector, equity prices
have increased to the point where it is much more difficult than it
was even six months ago to find reasonably valued stocks. Our
valuation screens will play a more important role in our strategy as
we move forward. We also will continue to emphasize deep water
opportunities because the economics of those fields makes them quite
attractive.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: December 16, 1985
FUND NUMBER: 043
TRADING SYMBOL: FSESX
SIZE: as of August 31, 1997, more than
$1 billion
MANAGER: Robert Ewing, since 1996; manager,
Select Environmental Services Portfolio, since
1996; joined Fidelity in 1990
(checkmark)
ENERGY SERVICE PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.1%
SHARES VALUE (NOTE 1)
BUILDING MATERIALS - 2.7%
FABRICATED PIPE & FITTINGS - 2.7%
Coflexip sponsored ADR 582,000 $ 29,063,625
CONSTRUCTION - 2.5%
HEAVY CONSTRUCTION, NEC - 2.5%
McDermott (J. Ray) SA 668,100 26,389,944 58099A22
ELECTRICAL EQUIPMENT - 0.3%
MOTORS & GENERATORS - 0.3%
NQL Drilling Tools, Inc. Class A 460,400 3,400,540 62936W10
ENERGY SERVICES - 65.2%
DRILLING - 25.3%
Atwood Oceanics, Inc. (a) 40,000 3,627,500 05009510
Cliffs Drilling Co. (a) 342,000 16,309,125 18682C10
Diamond Offshore Drilling, Inc. 581,000 31,737,125 25271C10
Discoverer ASA (a) 90,666 2,664,723 25399L22
ENSCO International, Inc. (a) 238,000 15,113,000 26874Q10
Falcon Drilling, Inc. (a) 748,200 23,568,300 30591410
Helmerich & Payne, Inc. 150,100 10,600,813 42345210
Marine Drilling Companies, Inc. (a) 378,800 9,091,200 56824020
Nabors Industries, Inc. (a) 658,900 22,690,869 62956810
Noble Drilling Corp. (a) 1,489,250 42,350,547 65504210
Pride International, Inc. (a) 35,600 1,139,200 74193210
Reading & Bates Corp. (a) 855,000 31,047,188 75528180
Ryan Energy Technologies, Inc. 438,500 3,207,188 78348T10
Smedvig AS 182,900 5,033,452 79799892
Smedvig AS, Series B 75,725 2,094,086 79799897
Santa Fe International Corp. 5,100 228,225 80299J22
Transocean Offshore, Inc. 456,777 43,422,364 89381710
UTI Energy Corp. (a) 37,800 2,896,425 90338710
266,821,330
OIL & GAS SERVICES - 39.9%
BJ Services Co. (a) 327,088 23,632,108 05548210
Baker Hughes, Inc. 859,456 36,419,448 05722410
CAL Dive International, Inc. 120,000 4,080,000 12791410
Canadian Fracmaster Ltd.
Installment Receipt (c)(e) 250,000 1,990,632 13591392
Carbo Ceramics, Inc. 15,700 437,638 14078110
Computalog Ltd. (a) 15,400 242,472 20490830
Daniel Industries, Inc. 146,300 2,724,838 23623510
Dawson Geophysical Co. (a) 69,500 1,511,625 23935910
Dresser Industries, Inc. 928,800 38,777,400 26159710
Global Industries Ltd. (a) 509,400 18,561,263 37933610
Halliburton Co. 1,149,438 54,885,665 40621610
Input/Output, Inc. (a) 139,600 2,931,600 45765210
Lone Star Technologies, Inc. (a) 35,100 1,432,519 54231210
McDermott International, Inc. 631,600 20,369,100 58003710
Numar Corp. (a) 103,300 4,674,325 67052E10
Oceaneering International, Inc. (a) 560,000 13,055,000 67523210
Offshore Logistics, Inc. (a) 375,000 6,843,750 67625510
Pool Energy Services Co. (a) 269,000 8,423,063 73278810
Schlumberger Ltd. 576,900 43,952,569 80685710
SEACOR SMIT, Inc. (a) 135,300 7,323,113 81190410
Smith International, Inc. (a) 45,800 3,331,950 83211010
Tidewater, Inc. 176,565 9,269,663 88642310
Tuboscope, Inc. (a) 500,000 13,937,500 89860010
Varco International, Inc. (a) 567,400 22,554,150 92212610
Weatherford Enterra, Inc. (a) 824,600 37,983,138 94707110
Western Atlas, Inc. (a) 519,800 41,194,150 95767410
420,538,679
TOTAL ENERGY SERVICES 687,360,009
SHARES VALUE (NOTE 1)
ENGINEERING - 2.7%
ARCHITECTS & ENGINEERS - 2.7%
Stolt Comex Seaway SA (a)(d) 530,000 $ 28,288,750 86199A22
IRON & STEEL - 0.6%
FABRICATED METAL PRODUCTS - 0.6%
Prudential Steel Ltd. 150,000 5,971,897 74435C10
OIL & GAS - 14.8%
CRUDE PETROLEUM & GAS - 1.6%
Ocean Energy, Inc. (a) 74,500 4,791,281 67481210
Total SA sponsored ADR 115,000 5,448,125 89151E10
Unit Corp. (a) 320,400 4,305,375 90921810
United Meridian Corp. (a) 48,000 1,881,000 91086510
16,425,781
OIL & GAS EXPLORATION - 1.6%
Companie Generale de Geophysique SA 150,000 3,609,375 20438610
Petroleum Geo-Services AS
sponsored ADR (a) 110,400 6,699,900 71659710
Veritas DGC, Inc. (a) 208,500 7,141,125 92343P10
17,450,400
OIL FIELD EQUIPMENT - 10.8%
Camco International, Inc. 239,710 16,510,026 13263210
Cooper Cameron Corp. (a) 918,876 59,612,081 21664010
Dailey Petroleum Services Corp. 60,000 540,000 23380G10
EVI, Inc. (a) 549,600 28,888,350 26893910
Gulf Island Fabrication, Inc. (d) 136,000 5,508,000 40230710
National-Oilwell, Inc. (a) 46,800 2,881,125 63707110
113,939,582
PETROLEUM REFINERS - 0.8%
British Petroleum PLC ADR 25,060 2,120,703 11088940
Royal Dutch Petroleum Co. 127,400 6,465,550 78025780
8,586,253
TOTAL OIL & GAS 156,402,016
SHIP BUILDING & REPAIR - 0.7%
SHIP BUILDERS - 0.7%
Halter Marine Group, Inc. (a) 185,700 7,346,756 40642Y10
SHIP BUILDING & REPAIRING - 0.0%
Friede Goldman International, Inc. 1,000 40,250 35843010
TOTAL SHIP BUILDING & REPAIR 7,387,006
SHIPPING - 0.6%
DEEP SEA TRANSPORT - 0.3%
Farstad Shipping ASA (a) 750,000 3,296,417 31199C22
SHIPPING - 0.3%
Hvide Marine, Inc. 80,900 2,497,788 44851510
TOTAL SHIPPING 5,794,205
TOTAL COMMON STOCKS
(Cost $649,126,356) 950,057,992
CASH EQUIVALENTS - 9.9%
Taxable Central Cash Fund (b)
(Cost $104,318,062) 104,318,062 104,318,062 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $753,444,418) $ 1,054,376,054
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $1,990,632 or
0.2% of net assets.
4. Affiliated company (see Note 10 of Notes to Financial Statements).
5. Purchased on an installment basis. Market value reflects only those
payments made through August 31, 1997. The remaining installment
aggregating CAD 2,437,500 is due September 9, 1998.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $351,180,518 and $146,905,669, respectively (see Note 3 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 $29,786 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the
period end, the value of securities loaned and the value of collateral
amounted to $2,881,102 and $2,995,200, respectively (see Note 6 of
Notes to Financial Statements).
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Gulf Island Fabrication, Inc. $ 811,813 $ - $ - $ 5,508,000
Stolt Comex Seaway SA 2,063,124 - - 28,288,750
TOTALS $ 2,874,937 $ - $ - $ 33,796,750
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $753,852,067. Net unrealized appreciation
aggregated $300,523,987, of which $303,473,955 related to appreciated
investment securities and $2,949,968 related to depreciated investment
securities.
ENERGY SERVICE PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 1,054,376,054
SECURITIES, AT
VALUE
(COST
$753,444,41
8) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 49,990,009
FUND SHARES
SOLD
DIVIDENDS 489,458
RECEIVABLE
INTEREST 551,836
RECEIVABLE
REDEMPTION FEES 16,627
RECEIVABLE
TOTAL ASSETS 1,105,423,984
LIABILITIES
PAYABLE FOR $ 1,752,841
INVESTMENTS
PURCHASED
PAYABLE FOR 15,243,625
FUND SHARES
REDEEMED
ACCRUED 485,702
MANAGEMENT
FEE
OTHER PAYABLES 608,222
AND
ACCRUED
EXPENSES
COLLATERAL ON 2,995,200
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 21,085,590
NET ASSETS $ 1,084,338,394
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 758,652,322
ACCUMULATED (725,412)
NET INVESTMENT
(LOSS)
ACCUMULATED 25,479,927
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 300,931,557
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 1,084,338,394
35,365,630
SHARES
OUTSTANDING
NET ASSET $30.66
VALUE AND
REDEMPTION
PRICE PER
SHARE
($1,084,338,
394 (DIVIDED BY)
35,365,630
SHARES)
MAXIMUM $31.61
OFFERING PRICE
PER SHARE
(100/97.00
OF $30.66)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 1,622,532
INCOME
DIVIDENDS
INTEREST 2,090,593
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$35,939)
TOTAL INCOME 3,713,125
EXPENSES
MANAGEMENT $ 2,005,416
FEE
TRANSFER AGENT 2,006,293
FEES
ACCOUNTING AND 293,185
SECURITY
LENDING FEES
NON-INTERESTED 1,305
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 17,045
AND EXPENSES
REGISTRATION FEES 171,837
AUDIT 22,117
LEGAL 982
MISCELLANEOUS 1,909
TOTAL EXPENSES 4,520,089
BEFORE
REDUCTIONS
EXPENSE (81,552) 4,438,537
REDUCTIONS
NET INVESTMENT (725,412)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 26,782,539
SECURITIES
FOREIGN 269 26,782,808
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 290,502,671
SECURITIES
ASSETS AND (79) 290,502,592
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 317,285,400
NET INCREASE $ 316,559,988
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 2,211,761
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 4,617
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 131,250
WITHHELD BY
FSC
EXPENSE $ 77,441
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 2,514
CREDITS
TRANSFER 1,597
AGENT CREDITS
$ 81,552
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (725,412) $ (344,131)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 26,782,808 90,047,658
GAIN (LOSS)
CHANGE IN NET 290,502,592 (16,245,487)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 316,559,988 73,458,040
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (27,396,195) (17,911,527)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 870,998,209 1,555,976,986
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 26,949,026 17,660,042
OF
DISTRIBUTIONS
COST OF SHARES (543,581,306) (1,466,322,715)
REDEEMED
REDEMPTION 1,304,963 2,837,620
FEES
NET INCREASE 355,670,892 110,151,933
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 644,834,685 165,698,446
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 439,503,709 273,805,263
PERIOD
END OF PERIOD $ 1,084,338,394 $ 439,503,709
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$725,412
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 35,522,784 78,524,862
ISSUED IN 1,372,849 891,837
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (23,015,545) (74,951,258)
NET INCREASE 13,880,088 4,465,441
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 20.46 $ 16.09 $ 11.97 $ 11.66 $ 11.01 $ 9.43
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.03) (.01) .08 E .02 .03 .01
INVESTMENT
INCOME (LOSS) D
NET REALIZED 11.39 5.05 4.49 .67 .51 1.47
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 11.36 5.04 4.57 .69 .54 1.48
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - (.04) (.01) (.05) -
INVESTMENT
INCOME
IN EXCESS OF - - - (.01) - -
NET INVESTMENT
INCOME
FROM NET (1.21) (.79) (.48) (.35) - -
REALIZED GAIN
IN EXCESS OF - - - (.13) - -
NET REALIZED
GAIN
TOTAL (1.21) (.79) (.52) (.50) (.05) -
DISTRIBUTIONS
REDEMPTION FEES .05 .12 .07 .12 .16 .10
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 30.66 $ 20.46 $ 16.09 $ 11.97 $ 11.66 $ 11.01
END OF PERIOD
TOTAL RETURN B, C 59.09% 32.26% 39.15% 7.60% 6.36% 16.76%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 1,084,338 $ 439,504 $ 273,805 $ 63,794 $ 40,857 $ 85,234
OF PERIOD
(000 OMITTED)
RATIO OF 1.33% A 1.47% 1.59% 1.81% 1.66% 1.76% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.31% A, F 1.45% F 1.58% F 1.79% F 1.65% F 1.76% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.21)% A (.07)% .60% .19% .23% .13% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 48% A 167% 223% 209% 137% 236% A
TURNOVER RATE
AVERAGE $ .0374 $ .0374
COMMISSION
RATE G
</TABLE>
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 FMR OR
THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
FOR FISCAL YEARS
BEGINNING ON OR
AFTER
SEPTEMBER 1,
1995, A FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS MAY
VARY FROM PERIOD
TO PERIOD AND FUND
TO FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
NATURAL RESOURCES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED LIFE OF
AUGUST 31, 1997 FUND
NATURAL RESOURCES 13.20%
NATURAL RESOURCES 9.80%
(INCL. 3% SALES CHARGE)
S&P 500 14.77%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, since the fund started on
March 3, 1997. You can compare the fund's returns to the performance
of the S&P 500 - a widely recognized, unmanaged index of common
stocks. This benchmark includes reinvestment of dividends and capital
gains, if any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate
each year. Average annual total returns will appear once the fund is a
year old, and the growth of a hypothetical $10,000 investment in the
fund will appear in the fund's next report six months from now.
UNDERSTANDING PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. THE STOCK MARKET, FOR
EXAMPLE, HAS A HISTORY OF LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
TOTAL SA SPONSORED ADR 3.0
TEXACO, INC. 2.9
GETCHELL GOLD CORP. 2.8
FORT JAMES CORP. 2.8
BRITISH PETROLEUM PLC ADR 2.4
COASTAL CORP. (THE) 2.1
TOSCO CORP. 2.0
MOBIL CORP. 1.9
EURO-NEVADA MINING LTD. 1.8
NORFOLK SOUTHERN CORP. 1.8
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 51.1
ROW: 1, COL: 2, VALUE: 4.9
ROW: 1, COL: 3, VALUE: 8.1
ROW: 1, COL: 4, VALUE: 10.5
ROW: 1, COL: 5, VALUE: 12.7
ROW: 1, COL: 6, VALUE: 12.7
PETROLEUM REFINERS 12.7%
OIL & GAS EXPLORATION 12.7%
CRUDE PETROLEUM & GAS 10.5%
GOLD ORES 8.1%
DRILLING 4.9%
ALL OTHERS 51.1%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
NATURAL RESOURCES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Larry Rakers,
Portfolio Manager of Fidelity Select Natural Resources Portfolio
Q. HOW DID THE FUND PERFORM, LARRY?
A. From inception on March 3, 1997 through August 31, 1997, the fund
returned 13.20%. During the same time period, the Standard & Poor's
500 Index returned 14.77%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
A. Although oil prices peaked at about $26 a barrel and natural gas
hit a level of about $4 per thousand cubic feet in January, both
commodity prices plummeted shortly thereafter. Since many of the
fund's energy holdings were sensitive to the commodity prices, the
fund underperformed the broader market index during the period.
However, I was able to mute this effect by investing some of the
fund's assets in companies that tend to do better in flat-to-declining
oil price environments because their operations are more diversified.
For example, I invested in integrated oil companies, which look for
oil, process it in their refineries, and make chemicals out of it or
make gasoline and sell it to consumers at gasoline stations. When oil
prices go down, these companies still make money by selling gasoline
to consumers and from their chemical operations.
Q. AT THE END OF THE PERIOD, ABOUT 10% OF THE FUND WAS INVESTED IN THE
PAPER AND FOREST PRODUCTS SECTOR. WHY?
A. I saw a good opportunity to buy paper stocks in late March, when
the paper and forest product market bottomed. In fact, the fund had an
overweighted position in these stocks relative to its benchmark in the
latter part of the period, which helped performance. Fort James and
Boise Cascade were particularly good performers.
Q. WHAT OTHER AREAS DID YOU TARGET?
A. In the last five years, technology has made it possible to explore
deep-water oil and gas prospects in a cost-effective way. This trend
has gained even more steam lately, considering that most of the
shallow-water plays have been exhausted. Companies such as Transocean
Offshore, Schlumberger and Halliburton have benefited from the
exploration activity in deep waters, and their share prices reflected
this good fortune during the period.
Q. WERE THERE ANY BIG DISAPPOINTMENTS DURING THE PERIOD?
A. The biggest disappointment has been the price of gold. The absolute
supply and demand for gold shows that we consume more gold than we
mine. However, gauging the direction of the gold price is nearly
impossible because central banks hold so much of it, which they can
sell at any time and swing the market. We've had some big sales of
gold by central banks recently, which has led to the decline in its
price. When the dollar is strong and there is virtually no inflation -
like the environment we've seen in the last six months - there's very
little incentive for a central bank to own gold. On the other hand,
when the dollar's weak and there's a lot of inflation, central banks
want to own it. Many market watchers see the strength of the dollar
and low inflation continuing, and the gold price reflects that
outlook. If the environment changes, there could be a good opportunity
in this precious metal.
Q. WHAT'S YOUR OUTLOOK FOR THE NATURAL RESOURCES MARKET?
A. In a slow-growth, no-inflation economy, the natural resource sector
tends to underperform. Each commodity has its own supply/demand
outlook, so I'm constantly searching for an area within natural
resources where supply/demand is starting to look favorable. For
example, in late fall and early winter, gas prices often benefit from
seasonal trends, as demand strengthens due to the winter heating
season. However, several large companies engaged in oil and gas
exploration recently have begun to increase their production volume.
While this should benefit these companies on a short-term basis, the
industry as a whole could suffer because increased production means
greater supply and weaker prices. Overall, I am emphasizing stocks
that are less sensitive to energy prices. As far as sectors, I remain
positive on deep-water drilling and service companies. Also, I think
the fundamentals of paper and forest products companies are continuing
to improve.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: March 3, 1997
FUND NUMBER: 514
TRADING SYMBOL: FNATF
SIZE: as of August 31, 1997, more than
$7 million
MANAGER: Lawrence Rakers, since inception;
manager, Fidelity Select Energy Portfolio, since
January 1997; Fidelity Select Paper and Forest
Products Portfolio, since 1996; Fidelity Select
American Gold Portfolio, 1995-February
1997; Fidelity Select Precious Metals and
Minerals Portfolio, 1996-February 1997;
joined Fidelity in 1993
(checkmark)
NATURAL RESOURCES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.2%
SHARES VALUE (NOTE 1)
AUTO, TIRES & ACCESSORIES - 0.5%
AUTO & TRUCK PARTS - 0.5%
Eaton Corp. 500 $ 45,031 27805810
CHEMICALS & PLASTICS - 3.7%
AGRICULTURAL CHEMICALS - 0.3%
Agrium, Inc. 2,300 27,513 00891610
CHEMICALS - 2.1%
Monsanto Co. 2,300 101,056 61166210
Sasol Ltd. 2,500 33,298 80386610
Solutia, Inc. (a) 1,000 18,938 83437610
Witco Corp. 500 23,500 97738510
176,792
UNSUPPORTED PLASTICS FILM & SHEET - 1.3%
W.R. Grace & Co. 1,500 103,219 38391110
TOTAL CHEMICALS & PLASTICS 307,524
ELECTRICAL EQUIPMENT - 0.4%
ELECTRICAL EQUIPMENT - WHOLESALE - 0.4%
Anixter International, Inc. 1,900 30,756 03529010
ELECTRONIC INSTRUMENTS - 0.5%
LAB ANALYTICAL INSTRUMENTS - 0.2%
Thermoquest Corp. (a) 700 11,725 88365510
MEASURING INSTRUMENTS - 0.3%
Thermo Electron Corp. (a) 700 28,175 88355610
TOTAL ELECTRONIC INSTRUMENTS 39,900
ENERGY SERVICES - 8.6%
DRILLING - 4.9%
Diamond Offshore Drilling, Inc. 2,000 109,250 25271C10
Maverick Tube Corp. (a) 900 29,363 57791410
Noble Drilling Corp. (a) 4,400 125,125 65504210
Transocean Offshore, Inc. 1,500 142,594 89381710
406,332
OIL & GAS SERVICES - 3.7%
Dresser Industries, Inc. 1,100 45,925 26159710
Halliburton Co. 2,100 100,275 40621610
Schlumberger Ltd. 900 68,569 80685710
Weatherford Enterra, Inc. (a) 1,900 87,519 94707110
302,288
TOTAL ENERGY SERVICES 708,620
GAS - 0.1%
GAS TRANSMISSION & DISTRIBUTION - 0.1%
Consolidated Natural Gas Co. 200 11,813 20961510
HOLDING COMPANIES - 1.8%
HOLDING COMPANY OFFICES, NEC - 1.8%
Norfolk Southern Corp. 1,500 147,000 65584410
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.1%
Gasonics International Corp. (a) 300 5,325 36727810
IRON & STEEL - 0.4%
FABRICATED METAL PRODUCTS - 0.1%
Prudential Steel Ltd. 200 7,963 74435C10
IRON & STEEL BLAST FURNACE, MILLS - 0.0%
Oregon Steel Mills, Inc. 200 5,388 68607910
SHARES VALUE (NOTE 1)
IRON & STEEL FOUNDRIES - 0.3%
Dofasco Inc. 1,100 $ 22,432 25690070
TOTAL IRON & STEEL 35,783
LODGING & GAMING - 0.1%
HOTELS, MOTELS, & TOURIST COURTS - 0.1%
HFS, Inc. (a) 200 11,138 40418110
METALS & MINING - 5.2%
ALUMINUM, EXTRUDED PRODUCTS - 1.4%
Alumax, Inc. (a) 2,700 111,881 02219710
KAOLIN & BALL CLAY - 0.1%
English China Clay PLC 2,900 10,950 29321792
METAL MINING - 0.3%
Arizona Star Resource Corp. (a) 1,000 5,044 04059G10
Pasminco Ltd. 2,400 4,327 70265092
Phelps Dodge Corp. 200 16,088 71726510
25,459
METAL MINING SERVICES - 0.1%
Minefinders Corp. Ltd. (a) 2,500 6,305 60290010
METAL ORES - 1.0%
Comalco Ltd. 2,900 14,436 19983099
Pechiney SA Class A 1,612 69,501 70599396
83,937
METALS & MINERALS - WHOLESALE - 0.1%
Elkem ASA 500 8,884 28773299
MISCELLANEOUS NONMETAL MINERALS - 0.1%
Camphor Ventures, Inc. (a) 3,500 6,280 13461V10
MISCELLANEOUS METAL ORES, NEC - 0.0%
Helix Resources NL (a) 5,800 2,378 42399L22
PRIME NONFERROUS SMELTING - 2.1%
Alcan Aluminium Ltd. 1,800 62,908 01371610
Aluminum Co. of America 1,000 82,250 02224910
Metaleurop SA (a) 2,000 26,947 60299892
172,105
TOTAL METALS & MINING 428,179
OIL & GAS - 36.4%
CRUDE PETROLEUM & GAS - 10.5%
Anadarko Petroleum Corp. 900 66,094 03251110
British Borneo Petroleum 1,464 11,032 11099D22
Burlington Resources, Inc. 400 20,250 12201410
Elf Aquitaine SA sponsored ADR 2,200 122,650 28626910
Enserch Exploration, Inc. 8,000 72,000 29356V10
Newfield Exploration Co. (a) 700 17,981 65129010
Nuevo Energy Corp. 300 15,301 67050910
Occidental Petroleum Corp. 1,100 25,781 67459910
Ocean Energy, Inc. (a) 1,100 70,744 67481210
Petrobras PN (Pfd. Reg.) 320,000 77,974 71699794
Petsec Energy Ltd. sponsored ADR (a) 1,000 24,375 71579610
Rio Alto Exploration Ltd. (a) 2,100 19,521 76689210
Santa Fe Energy Resources, Inc. 2,100 23,231 80201210
Total SA sponsored ADR 5,300 251,088 89151E10
Tullow Oil PLC (a) 5,100 8,017 89999C22
United Meridian Corp. (a) 800 31,350 91086510
YPF Sociedad Anonima Class D 400 13,050 98424592
870,439
OIL & GAS EXPLORATION - 12.7%
Abacan Resource Corp. (a) 8,700 23,925 00291910
Amerada Hess Corp. 1,000 58,125 02355110
Chevron Corp. 600 46,463 16675110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
OIL & GAS - CONTINUED
OIL & GAS EXPLORATION - CONTINUED
Exxon Corp. 1,500 $ 91,781 30229010
Gulfstream Resources Canada Ltd. 1,100 9,314 40274110
Kerr-McGee Corp. 900 55,913 49238610
Mobil Corp. 2,200 160,050 60705910
Petro-Canada 4,600 79,553 71644E10
Phillips Petroleum Co. 2,500 118,906 71850710
Texaco, Inc. 2,100 242,025 88169410
USX-Marathon Group 4,400 143,275 90290582
Woodside Petroleum Ltd. 2,200 17,555 98022810
1,046,885
OIL FIELD EQUIPMENT - 0.5%
Cooper Cameron Corp. (a) 600 38,925 21664010
PETROLEUM REFINERS - 12.7%
British Petroleum PLC ADR 2,306 195,145 11088940
Coastal Corp. (The) 3,000 173,250 19044110
Eni Spa 5,400 29,828 26874R93
Murphy Oil Corp. 900 48,597 62671710
Pennzoil Co. 1,300 100,344 70990310
Royal Dutch Petroleum Co. 2,400 121,800 78025780
Shell Transport & Trading Co. PLC ADR 2,100 85,444 82270360
Tosco Corp. 4,900 162,006 89149030
Ultramar Diamond Shamrock Corp. 100 3,250 90400010
Valero Energy Corp. 3,100 103,269 91913Y10
Wainoco Oil Corp. (a) 5,200 24,050 93067610
1,046,983
TOTAL OIL & GAS 3,003,232
PACKAGING & CONTAINERS - 0.8%
GLASS CONTAINERS - 0.8%
Owens-Illinois, Inc. (a) 1,800 62,663 69076840
PAPER & FOREST PRODUCTS - 9.9%
CONVERTED PAPER & PAPERBOARD - 1.8%
American Pad & Paper Co. (a) 800 18,400 02881610
Boise Cascade Corp. 3,300 130,556 09738310
148,956
ENVELOPES - 1.1%
Mail-Well, Inc. (a) 3,150 88,003 56032120
PAPER - 2.3%
Buckeye Cellulose Corp. (a) 1,200 47,250 11815H10
Chesapeake Corp. 1,300 44,688 16515910
Mercer International, Inc. (SBI) 2,200 22,825 58805610
Stone Container Corp. 1,200 20,700 86158910
Willamette Industries, Inc. 700 55,825 96913310
191,288
PAPER MILLS - 4.1%
Alliance Forest Products, Inc. (a) 2,600 61,545 01859J10
Alliance Forest Products, Inc. (a)(c) 1,000 23,671 01859J93
Bowater, Inc. 500 25,594 10218310
Fort James Corp. 5,400 226,800 34747110
337,610
SHARES VALUE (NOTE 1)
PAPERBOARD MILLS - 0.6%
Fiber Mark, Inc. (a) 700 $ 14,394 31564610
Jefferson Smurfit Corp. (a) 700 13,606 47508710
Mead Corp. 300 21,281 58283410
49,281
TOTAL PAPER & FOREST PRODUCTS 815,138
PRECIOUS METALS - 12.0%
GOLD & SILVER ORES - 3.3%
Getchell Gold Corp. (a) 6,700 227,800 37426510
Industrias Penoles SA 9,500 42,472 78899A23
270,272
GOLD ORES - 8.1%
Barrick Gold Corp. 2,500 56,567 06790110
Breakwater Resources Ltd. (a) 8,800 40,901 10690230
Euro-Nevada Mining Ltd. 9,600 147,001 29870P10
Franco-Nevada Mining Corp. 2,200 52,235 35186010
Indochina Goldfields Ltd. (a) 3,900 17,423 45591310
Placer Dome, Inc. 1,600 26,749 72590610
Francisco Gold Corp. (a) 3,000 45,938 35190210
Francisco Gold Corp. (a)(c) 700 10,719 35190294
Greenstone Resources Ltd. (a) 8,200 75,338 39573W10
Kalahari Goldridge Mining Co. Ltd. (a) 4,500 1,726 48699R22
Meridian Gold, Inc. (a) 14,000 62,547 58997510
Newmont Mining Corp. 2,015 85,260 65163910
Queenston Mining, Inc. (a) 20,000 16,574 74832E10
Stillwater Mining Co. (a) 1,300 27,300 86074Q10
TVI Pacific, Inc. (a) 10,000 1,946 87291710
668,224
SILVER ORES - 0.6%
Compania de Minas Buenaventura SA
Class B sponsored ADR 2,000 37,000 20444810
Pan American Silver Corp. (a) 1,500 9,728 69790010
46,728
TOTAL PRECIOUS METALS 985,224
RAILROADS - 2.3%
CSX Corp. 1,800 102,958 12640810
Wisconsin Central Transportation Corp. (a) 2,700 83,700 97659210
186,658
RETAIL & WHOLESALE, MISCELLANEOUS - 0.3%
STATIONERY & OFFICE SUPPLIES - WHOLESALE - 0.3%
Boise Cascade Office Products Corp. (a) 1,000 21,063 09740310
TOBACCO - 0.2%
CIGARETTES - 0.2%
Schweitzer-Mauduit International, Inc. 500 20,000 80854110
TRUCKING & FREIGHT - 0.9%
AIR COURIER SERVICES - 0.9%
Airborne Freight Corp. 800 39,400 00926610
CNF Transportation, Inc. 1,000 36,125 12612W10
75,525
TOTAL COMMON STOCKS
(Cost $6,530,985) 6,940,572
CASH EQUIVALENTS - 15.8%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $1,306,274) 1,306,274 $ 1,306,274 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $7,837,259) $ 8,246,846
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $34,390 or 0.5%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $9,333,009 and $3,027,394, respectively (see Note 3 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 com-missions paid to these affiliated firms were $609 for the
period (see Note 4 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 73.9%
Canada 11.4
France 5.7
United Kingdom 3.7
Netherlands 1.5
Others (individually less than 1%) 3.8
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $7,837,259. Net unrealized appreciation
aggregated $409,587, of which $626,225 related to appreciated
investment securities and $216,638 related to depreciated investment
securities.
NATURAL RESOURCES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 8,246,846
SECURITIES, AT
VALUE
(COST
$7,837,259)
- - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 95,903
INVESTMENTS
SOLD
RECEIVABLE FOR 195,852
FUND SHARES
SOLD
DIVIDENDS 11,105
RECEIVABLE
INTEREST 3,735
RECEIVABLE
REDEMPTION FEES 23
RECEIVABLE
PREPAID 9,213
EXPENSES
RECEIVABLE FROM 6,865
INVESTMENT
ADVISER FOR
EXPENSE
REDUCTIONS
TOTAL ASSETS 8,569,542
LIABILITIES
PAYABLE FOR $ 1,032,359
INVESTMENTS
PURCHASED
PAYABLE FOR 57,112
FUND SHARES
REDEEMED
OTHER PAYABLES 28,181
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 1,117,652
NET ASSETS $ 7,451,890
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 6,829,616
ACCUMULATED (12,646)
NET INVESTMENT
(LOSS)
ACCUMULATED 225,350
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 409,570
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 7,451,890
658,391
SHARES
OUTSTANDING
NET ASSET $11.32
VALUE AND
REDEMPTION
PRICE PER
SHARE
($7,451,890
(DIVIDED BY) 658,391
SHARES)
MAXIMUM $11.67
OFFERING PRICE
PER SHARE
(100/97.00
OF $11.32)
STATEMENT OF OPERATIONS
MARCH 3, 1997
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31,
1997
(UNAUDITED)
INVESTMENT $ 31,506
INCOME
DIVIDENDS
INTEREST 13,929
TOTAL INCOME 45,435
EXPENSES
MANAGEMENT $ 13,729
FEE
TRANSFER AGENT 18,419
FEES
ACCOUNTING FEES 29,752
AND EXPENSES
NON-INTERESTED 3
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 19,551
AND EXPENSES
REGISTRATION FEES 30,376
AUDIT 9,000
LEGAL 3
TOTAL EXPENSES 120,833
BEFORE
REDUCTIONS
EXPENSE (62,752) 58,081
REDUCTIONS
NET INVESTMENT (12,646)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 225,370
SECURITIES
FOREIGN (20) 225,350
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 409,587
SECURITIES
ASSETS AND (17) 409,570
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 634,920
NET INCREASE $ 622,274
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 45,735
INFORMATION
SALES CHARGES
PAID TO FDC
EXCHANGE FEES $ 2,048
WITHHELD BY
FSC
EXPENSE $ 23
REDUCTIONS
CUSTODIAN
CREDITS
FMR 62,729
REIMBURSEMEN
T
$ 62,752
STATEMENT OF CHANGES IN NET ASSETS
INCREASE MARCH 3, 1997
(DECREASE) IN (COMMENCEMENT
NET ASSETS OF OPERATIONS) TO
AUGUST 31, 1997
(UNAUDITED)
OPERATIONS $ (12,646)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 225,350
GAIN (LOSS)
CHANGE IN NET 409,570
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 622,274
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
SHARE 10,989,894
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
COST OF SHARES (4,173,285)
REDEEMED
REDEMPTION 13,007
FEES
NET INCREASE 6,829,616
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 7,451,890
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF -
PERIOD
END OF PERIOD $ 7,451,890
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$12,646)
OTHER
INFORMATION
SHARES
SOLD 1,056,014
REDEEMED (397,623)
NET INCREASE 658,391
(DECREASE)
<TABLE>
<CAPTION>
<S> <C> <C>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
MARCH 3, 1997
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31, 1997
SELECTED (UNAUDITED)
PER-SHARE
DATA
NET ASSET VALUE, $ 10.00
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.03)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 1.32
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.29
INVESTMENT
OPERATIONS
REDEMPTION FEES .03
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 11.32
END OF PERIOD
TOTAL RETURN B, C 13.20%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 7,452
OF PERIOD
(000 OMITTED)
RATIO OF 2.50% A,
EXPENSES TO E
AVERAGE NET
ASSETS
RATIO OF NET (.54)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 148% A
TURNOVER RATE
AVERAGE $ .0222
COMMISSION
RATE F
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIOD
SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED.
NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN
CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS
REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE
COMMISSION RATE PER SHARE FOR SECURITY TRADES
ON WHICH COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO PERIOD AND
FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
PRECIOUS METALS AND MINERALS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
PRECIOUS METALS AND MINERALS -30.05% -31.99% 40.44% -18.48%
PRECIOUS METALS AND MINERALS -32.15% -34.03% 36.23% -20.92%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
PRECIOUS METALS AND MINERALS -31.99% 7.03% -2.02%
PRECIOUS METALS AND MINERALS -34.03% 6.38% -2.32%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 145503 S00000000000001
Precious Metals S&P 500
00061 SP001
1987/08/31 9700.00 10000.00
1987/09/30 10000.93 9781.00
1987/10/31 7242.40 7674.17
1987/11/30 8155.22 7041.82
1987/12/31 7689.86 7577.70
1988/01/31 6338.80 7896.72
1988/02/29 6348.96 8264.71
1988/03/31 6877.19 8009.33
1988/04/30 6648.63 8098.24
1988/05/31 6684.19 8168.69
1988/06/30 6440.39 8543.63
1988/07/31 6481.02 8511.17
1988/08/31 6095.00 8221.79
1988/09/30 5683.59 8572.04
1988/10/31 5891.84 8810.34
1988/11/30 6110.24 8684.35
1988/12/31 5855.07 8836.33
1989/01/31 6098.59 9483.15
1989/02/28 6294.46 9247.02
1989/03/31 6294.46 9462.47
1989/04/30 6008.59 9953.57
1989/05/31 5722.72 10356.69
1989/06/30 6172.70 10297.66
1989/07/31 6342.11 11227.54
1989/08/31 6469.16 11447.60
1989/09/30 6696.80 11400.66
1989/10/31 6691.51 11136.17
1989/11/30 7543.83 11363.35
1989/12/31 7738.21 11636.07
1990/01/31 8354.48 10855.29
1990/02/28 7636.39 10995.32
1990/03/31 7304.14 11286.70
1990/04/30 6553.90 11004.53
1990/05/31 6929.02 12077.47
1990/06/30 6425.28 11995.34
1990/07/31 6816.48 11956.96
1990/08/31 6886.15 10876.05
1990/09/30 6730.74 10346.39
1990/10/31 5975.14 10301.90
1990/11/30 5867.96 10967.40
1990/12/31 6107.49 11273.39
1991/01/31 5444.58 11764.91
1991/02/28 5933.62 12606.10
1991/03/31 5819.51 12911.17
1991/04/30 5803.21 12942.15
1991/05/31 6129.23 13501.25
1991/06/30 6531.32 12882.90
1991/07/31 6531.32 13483.24
1991/08/31 5846.68 13802.79
1991/09/30 5966.22 13572.29
1991/10/31 6368.31 13754.15
1991/11/30 6569.36 13199.86
1991/12/31 6201.40 14709.93
1992/01/31 6332.99 14436.32
1992/02/29 6004.01 14623.99
1992/03/31 5768.23 14338.83
1992/04/30 5428.28 14760.39
1992/05/31 5784.68 14832.71
1992/06/30 5817.32 14611.71
1992/07/31 5894.22 15209.33
1992/08/31 5630.55 14897.53
1992/09/30 5399.83 15073.32
1992/10/31 5053.76 15126.08
1992/11/30 4757.13 15641.88
1992/12/31 4845.40 15834.28
1993/01/31 4962.76 15967.28
1993/02/28 5510.46 16184.44
1993/03/31 6259.34 16525.93
1993/04/30 7270.90 16126.00
1993/05/31 8232.15 16558.18
1993/06/30 8366.28 16606.20
1993/07/31 9456.08 16539.77
1993/08/31 8506.00 17166.63
1993/09/30 7835.35 17034.45
1993/10/31 8947.50 17387.06
1993/11/30 8930.74 17221.88
1993/12/31 10254.03 17430.27
1994/01/31 9829.85 18022.90
1994/02/28 9400.00 17534.48
1994/03/31 9303.85 16769.97
1994/04/30 9304.23 16984.63
1994/05/31 9321.21 17263.18
1994/06/30 9507.97 16840.23
1994/07/31 9870.18 17392.59
1994/08/31 10571.96 18105.69
1994/09/30 11381.27 17662.10
1994/10/31 10939.83 18059.49
1994/11/30 9768.31 17401.77
1994/12/31 10137.04 17659.84
1995/01/31 8371.08 18117.75
1995/02/28 8755.24 18823.80
1995/03/31 9643.95 19379.29
1995/04/30 9724.22 19950.01
1995/05/31 9603.81 20747.42
1995/06/30 9718.48 21229.38
1995/07/31 10119.84 21933.35
1995/08/31 10257.44 21988.40
1995/09/30 10286.11 22916.31
1995/10/31 9001.78 22834.50
1995/11/30 9632.48 23836.93
1995/12/31 9798.53 24296.03
1996/01/31 11852.60 25123.07
1996/02/29 12059.73 25355.96
1996/03/31 11990.69 25600.14
1996/04/30 12262.16 25977.48
1996/05/31 12971.59 26647.44
1996/06/30 11166.30 26748.97
1996/07/31 11027.87 25567.20
1996/08/31 11627.72 26106.41
1996/09/30 11143.23 27575.68
1996/10/31 11050.94 28336.22
1996/11/30 10497.24 30478.15
1996/12/31 10329.98 29874.38
1997/01/31 9885.87 31740.93
1997/02/28 11304.72 31989.78
1997/03/31 9626.32 30675.32
1997/04/30 8986.10 32506.64
1997/05/31 9136.06 34485.64
1997/06/30 8190.16 36030.60
1997/07/31 7867.17 38897.55
1997/08/29 7907.54 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 145521 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Precious Metals and Minerals Portfolio on
August 31, 1987, and the current maximum 3% sales charge was paid. As
the chart shows, by August 31, 1997, the value of the investment would
have been $7,908 - a 20.92% decrease on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
GETCHELL GOLD CORP. 9.5
EURO-NEVADA MINING LTD. 8.8
NEWMONT MINING CORP. 8.5
FRANCO-NEVADA MINING CORP. 5.6
MERIDIAN GOLD, INC. 5.3
NORMANDY MINING LTD. 4.3
PLACER DOME, INC. 3.2
GREAT CENTRAL MINES NL 3.0
PIONEER GROUP, INC. 2.8
CENTAUR MINING & EXPLORATION LTD. 2.8
TOP INDUSTRIES AS OF AUGUST 31, 1997
GOLD ORES (CANADA) 32.8%
GOLD ORES (SOUTH AFRICA) 17.0%
GOLD ORES (U.S.) 13.4%
GOLD & SILVER ORES (U.S.) 9.5%
GOLD ORES (AUSTRALIA) 6.9%
ALL OTHERS 20.4%
ROW: 1, COL: 1, VALUE: 20.4
ROW: 1, COL: 2, VALUE: 6.9
ROW: 1, COL: 3, VALUE: 9.5
ROW: 1, COL: 4, VALUE: 13.4
ROW: 1, COL: 5, VALUE: 17.0
ROW: 1, COL: 6, VALUE: 32.8
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
PRECIOUS METALS AND MINERALS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
George Domolky,
Portfolio Manager of Fidelity Select Precious Metals and Minerals
Portfolio
Q. GEORGE, HOW WAS THE FUND'S PERFORMANCE?
A. We've just come through a very difficult period. For the six months
that ended August 31, 1997, the fund was down 30.05% compared to a
gain of 14.78% in the Standard & Poor's 500 Index over the same
period. For the 12 months that ended August 31, 1997, the fund lost
31.99%, while the Standard & Poor's 500 Index gained 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE PERIOD?
A. The biggest factor was the sharply falling price of gold, which
fell from around $360 per ounce last February to the current level of
approximately $320 an ounce. The recent economic environment has been
characterized by low inflation, a strong dollar and an explosive stock
market. That environment does not favor gold as an alternative
investment.
Q. WHAT CAN YOU SAY ABOUT THE CURRENT SUPPLY/DEMAND SITUATION FOR
GOLD?
A. Central bank selling has continued, culminating in a large sale by
Australia in July that sent the market sharply lower and intensified
its negative psychology. On the other side of the ledger, demand for
gold as jewelry continues to increase, especially in the Far East and
India. Overall, there is an annual production shortfall that is
currently being offset by central bank sales.
Q. WHAT FACTORS COULD IMPROVE GOLD'S ATTRACTIVENESS?
A. It could be any number of things: a severe correction in the stock
market, weakness in the dollar, a resurgence of inflation, reduced
central bank sales, or some combination of those elements.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. The decline in gold's price was especially hard on South African
equities because they are, in general, higher-cost producers than
mining companies located elsewhere. Accordingly, we tried to limit our
exposure to South Africa while maintaining a position consistent with
the worldwide mandate of the fund's charter. We also increased the
fund's holdings in Australia, where the environment for gold producers
has been more favorable. Finally, we have continued to add promising
smaller companies with meaningful exploration and production
potential.
Q. WHAT STOCKS PERFORMED WELL DURING THE PERIOD?
A. While none of our holdings performed well, some held their ground
better than others. We developed a major position in a leading
Australian producer, Normandy Mining, which helped the fund.
Greenstone Resources and Buenaventura are good examples of smaller
companies that helped to some extent because of increases in
production and reserves. The same comments apply to Getchell Gold, a
Nevada-based exploration company and our current number one holding.
Q. WHAT STOCKS PERFORMED POORLY OVER THE PERIOD?
A. The whole South African sector of the fund underperformed due to
the factors I mentioned earlier. It's worth noting, though, that
because of their leverage, the same South African stocks that are
laggards now could well be the star performers of tomorrow if the
price of gold recovers even a moderate amount. Although foreign stocks
carry a greater risk than U.S. stocks we continue to feel that
selected South African equities offer potential rewards that outweigh
their risks.
Q. WHAT'S YOUR OUTLOOK, GEORGE?
A. I think it's important to put things in perspective. Just as we've
had an uncommonly positive economic environment for U.S. equities
during the period covered by this report, we've had an unusually bad
one for precious metals stocks. Although I cannot make short-term
predictions about where gold's price will go, it's reasonable to think
that our so-called "Goldilocks" economy will not last forever, and
eventually the environment will become more favorable for gold. In the
meantime, we will continue to emphasize the acquisition of low-cost
producers and exploration companies with strong cash positions.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 14, 1981
FUND NUMBER: 061
TRADING SYMBOL: FDPMX
SIZE: as of August 31, 1997, more than
$196 million
MANAGER: George Domolky, since February
1997; manager, Fidelity Select American Gold
Portfolio, since February 1997; Fidelity Canada
Fund, 1987-1996; Fidelity Select Food and
Agriculture Portfolio, 1985-1987; joined
Fidelity in 1981
(checkmark)
PRECIOUS METALS AND MINERALS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.7%
SHARES VALUE (NOTE 1)
AUSTRALIA - 13.5%
METALS & MINING - 0.6%
METAL MINING - 0.0%
Panorama Resources NL (a) 120,000 $ 16,252 69999H23
METAL MINING SERVICES - 0.5%
Acacia Resources Ltd. (a) 900,000 988,268 00399822
MISCELLANEOUS METAL ORES, NEC - 0.1%
Helix Resources NL (a) 150,000 61,492 42399L22
TOTAL METALS & MINING 1,066,012
PRECIOUS METALS - 12.9%
GOLD & SILVER ORES - 6.0%
Normandy Mining Ltd. 6,969,585 8,418,440 65699J22
North Flinders Mines Ltd. 349,060 1,712,047 65940091
Plutonic Resources Ltd. 485,000 1,377,572 72999192
Sons of Gwalia NL 75,000 236,086 83568810
11,744,145
GOLD ORES - 6.9%
Centaur Mining & Exploration Ltd. (a) 5,515,000 5,450,295 32399022
Great Central Mines NL 3,465,206 5,834,419 39029092
Great Central Mines NL
sponsored ADR 90,000 450,000 39029010
Leo Shield Exploration NL (a) 412,000 54,289 52699L22
Lihir Gold Ltd. (a) 300,000 450,211 53234992
Resolute Samantha Ltd. 1,000,000 1,471,421 76099D22
13,710,635
TOTAL PRECIOUS METALS 25,454,780
TOTAL AUSTRALIA 26,520,792
CANADA - 33.4%
OIL & GAS - 0.5%
CRUDE PETROLEUM & GAS - 0.0%
Solomon Resources Ltd. (a) 200,000 63,412 83427D10
OIL & GAS EXPLORATION - 0.5%
Southwestern Gold Corp. (a) 135,000 807,422 84548W10
TOTAL OIL & GAS 870,834
PRECIOUS METALS - 32.9%
GOLD & SILVER ORES - 0.0%
Consolidated Nevada Goldfields
(warrants) (a) 371,500 - 20965D92
GOLD ORES - 32.8%
Agnico Eagle Mines Ltd. 444,800 3,894,304 00847410
Argosy Mining Corp. (a) 169,200 91,443 04022W10
Bema Gold Corp. (a) 50,000 263,016 08135F10
Cambior, Inc. 90,000 963,070 13201L10
Euro-Nevada Mining Ltd. 1,137,000 17,410,380 29870P10
Franco-Nevada Mining Corp. 461,000 10,945,740 35186010
Francisco Gold Corp. (a) 8,100 124,032 35190210
Francisco Gold Corp. (a)(c) 54,500 834,534 35190294
Geomaque Explorations Ltd. (a) 271,000 603,416 37247E10
Greenstone Resources Ltd. (a) 169,900 1,560,962 39573W10
Indochina Goldfields Ltd. 20,000 89,353 45591310
Indochina Goldfields Ltd. (a)(c) 70,000 312,736 45591392
Kinross Gold Corp. (a) 110,000 479,553 49690210
Meridian Gold, Inc. (a) 2,329,000 10,405,188 58997510
Metallica Resources, Inc. (a) 297,300 589,137 59125J10
Mountain Province Mining, Inc. (a) 284,000 1,125,563 62426E10
Nevsun Resources Ltd. (a) 108,600 406,932 64156L10
SHARES VALUE (NOTE 1)
Orvana Minerals Corp. (a) 263,900 $ 950,820 68759M10
Placer Dome, Inc. 380,000 6,352,729 72590610
Prime Resources Group, Inc. 353,700 2,854,578 74157L10
Repadre Capital Corp. (a) 100,000 540,443 76026J10
Rio Narcea Gold Mines Ltd. (a) 788,900 2,501,286 76690910
South Pacific Resources, Inc. (a) 59,500 18,865 83890320
Sudbury Contact Mines Ltd. 87,600 397,680 86462610
Sutton Resources Ltd. (a) 70,000 663,304 86947440
TVI Pacific, Inc. (a) 1,146,800 223,121 87291710
Viceroy Resources Corp. (a) 25,000 59,449 92564C10
64,661,634
SILVER ORES - 0.1%
Pan American Silver Corp. (a) 30,000 194,560 69790010
TOTAL PRECIOUS METALS 64,856,194
TOTAL CANADA 65,727,028
GHANA - 1.1%
PRECIOUS METALS - 1.1%
GOLD ORES - 1.1%
Ashanti Goldfields Co. Ltd. GDR 210,554 2,184,498 04374320
PERU - 0.8%
PRECIOUS METALS - 0.8%
SILVER ORES - 0.8%
Compania de Minas Buenaventura SA
Class B sponsored ADR 85,800 1,587,300 20444810
SOUTH AFRICA - 20.8%
HOLDING COMPANIES - 1.2%
HOLDING COMPANY OFFICES, NEC - 1.2%
Beatrix Mines Ltd. 503,600 2,361,044 07419010
METALS & MINING - 2.5%
METAL MINING - 2.2%
JCI Ltd. 700,000 4,400,639 46799A22
MISCELLANEOUS METAL ORES, NEC - 0.3%
Potgietersrust Platinums Ltd. 72,785 499,452 73799922
TOTAL METALS & MINING 4,900,091
PRECIOUS METALS - 17.0%
GOLD ORES - 17.0%
Avgold Ltd. (a) 96,500 88,017 05399V22
Consolidated Mining Corporation Ltd. (a) 16,500,000 1,511,987
20999922
De Beers Consolidated Mines Ltd. ADR 20,000 641,250 24025330
Driefontein Consolidated Ltd.:
Ord. 275,900 2,013,761 26202630
ADR 224,000 1,680,000 26202650
Durban Roodepoort Deep
sponsored ADR (a) 15,000 49,688 26659730
Gold Fields of South Africa Ltd. 60,000 1,227,491 38059730
Gold Fields of South Africa Ltd.
sponsored ADR 163,700 3,294,463 38059750
Harmony Gold Mining Co. Ltd. Class R 913,200 4,427,342 41321610
Randgold & Exploration Co. Ltd. (a) 815,900 2,868,908 75299A22
Rustenberg Platinum Holdings Ltd. ADR (a) 30,221 506,202 78307820
Vaal Reefs Exploration & Mining Co Ltd.:
ADR 887,000 4,435,000 91850640
(Reg.) 8,200 408,908 91850610
West Rand Consolidated
Mines Ltd. (Reg.) (a) 120,400 205,264 95599H22
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SOUTH AFRICA - CONTINUED
PRECIOUS METALS - CONTINUED
GOLD ORES - CONTINUED
Western Areas Gold
Mining Ltd. Ord. 582,064 $ 4,868,622 95765410
Western Deep Levels Ltd.:
ADR 214,500 5,121,182 95807720
Ord. 6,200 148,641 95807710
TOTAL PRECIOUS METALS 33,496,726
SECURITIES INDUSTRY - 0.1%
SECURITY BROKERS & DEALERS - 0.1%
Genbel Securities Ltd. 19,640 255,310 36899L22
TOTAL SOUTH AFRICA 41,013,171
UNITED KINDOM - 0.0%
PRECIOUS METALS - 0.0%
GOLD ORES - 0.0%
Bakyrchik Gold PLC (a) 70,900 49,404 05799422
UNITED STATES OF AMERICA - 27.1%
METALS & MINING - 1.4%
COPPER ORES - 1.4%
Freeport McMoRan Copper & Gold, Inc.
Class A 100,000 2,675,000 35671D10
PRECIOUS METALS - 22.9%
GOLD & SILVER ORES - 9.5%
Getchell Gold Corp. (a) 552,300 18,778,200 37426510
GOLD ORES - 13.4%
Battle Mountain Gold Co. 150,000 853,125 07159310
Homestake Mining Co. 29,000 406,000 43761410
Newmont Gold Co. 59,000 2,551,750 65163710
Newmont Mining Corp. 393,610 16,654,623 65163910
Stillwater Mining Co. (a) 49,500 1,039,500 86074Q10
Stillwater Mining Co. (a)(c) 231,200 4,855,200 86074Q90
26,360,198
TOTAL PRECIOUS METALS 45,138,398
SECURITIES INDUSTRY - 2.8%
INVESTMENT MANAGERS - 2.8%
Pioneer Group, Inc. 170,000 5,525,000 72368410
TOTAL UNITED STATES OF AMERICA 53,338,398
TOTAL COMMON STOCKS
(Cost $209,651,605) 190,420,591
CONVERTIBLE BONDS - 0.2%
PRINCIPAL
AMOUNT
SOUTH AFRICA - 0.2%
PRECIOUS METALS - 0.2%
GOLD ORES - 0.2%
Randgold Financial 7%, 9/30/01 (c)
(Cost $500,000) $ 500,000 415,000 752341AA
CASH EQUIVALENTS - 3.1%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $6,095,719) 6,095,719 $ 6,095,719 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $216,247,324) $ 196,931,310
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $6,417,470 or
3.3% of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $69,663,995 and $100,590,383, respectively (see Note 3 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 $11,635 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, there were no loans outstanding (see Note 6 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan
and average daily balance during the period for which the loan was
outstanding amounted to $5,198,000. The weighted average interest rate
was 5.9% (see Note 7 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $216,435,589. Net unrealized depreciation
aggregated $19,504,279, of which $29,278,803 related to appreciated
investment securities and $48,783,082 related to depreciated
investment securities.
At February 28, 1997, the fund had a capital loss carryforward of
approximately $1,376,000 which will expire on February 28, 2001.
PRECIOUS METALS AND MINERALS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 196,931,310
SECURITIES, AT
VALUE
(COST
$216,247,32
4) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,173,980
INVESTMENTS
SOLD
RECEIVABLE FOR 455,888
FUND SHARES
SOLD
DIVIDENDS 640,300
RECEIVABLE
INTEREST 54,833
RECEIVABLE
REDEMPTION FEES 769
RECEIVABLE
TOTAL ASSETS 199,257,080
LIABILITIES
PAYABLE FOR $ 2,721,767
FUND SHARES
REDEEMED
ACCRUED 99,130
MANAGEMENT
FEE
OTHER PAYABLES 225,805
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 3,046,702
NET ASSETS $ 196,210,378
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 250,940,604
ACCUMULATED (2,779,323)
NET INVESTMENT
(LOSS)
ACCUMULATED (32,628,918)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED (19,321,985)
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 196,210,378
14,310,830
SHARES
OUTSTANDING
NET ASSET $13.71
VALUE AND
REDEMPTION
PRICE PER
SHARE
($196,210,3
78 (DIVIDED BY)
14,310,830
SHARES)
MAXIMUM $14.13
OFFERING PRICE
PER SHARE
(100/97.00
OF $13.71)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 1,472,764
INCOME
DIVIDENDS
INTEREST 315,679
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$5,038)
TOTAL INCOME 1,788,443
EXPENSES
MANAGEMENT $ 674,554
FEE
TRANSFER AGENT 1,036,930
FEES
ACCOUNTING AND 113,663
SECURITY
LENDING FEES
NON-INTERESTED 533
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 60,590
AND EXPENSES
REGISTRATION FEES 50,526
AUDIT 13,939
LEGAL 675
INTEREST 857
MISCELLANEOUS 1,126
TOTAL EXPENSES 1,953,393
BEFORE
REDUCTIONS
EXPENSE (61,322) 1,892,071
REDUCTIONS
NET INVESTMENT (103,628)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT (30,585,141)
SECURITIES
FOREIGN (7,604) (30,592,745)
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (56,898,257)
SECURITIES
ASSETS AND (6,373) (56,904,630)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) (87,497,375)
NET INCREASE $ (87,601,003)
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 296,236
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 17,657
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 49,950
WITHHELD BY
FSC
EXPENSE $ 59,637
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 34
CREDITS
TRANSFER 1,651
AGENT CREDITS
$ 61,322
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (103,628) $ (181,419)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (30,592,745) 16,412,795
GAIN (LOSS)
CHANGE IN NET (56,904,630) (43,173,440)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE (87,601,003) (26,942,064)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (846,595)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
IN EXCESS OF - (176,411)
NET INVESTMENT
INCOME
TOTAL - (1,023,006)
DISTRIBUTIONS
SHARE 128,416,975 435,994,024
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT - 1,004,423
OF
DISTRIBUTIONS
COST OF SHARES (170,859,321) (552,635,513)
REDEEMED
REDEMPTION 667,382 1,992,596
FEES
NET INCREASE (41,774,964) (113,644,470)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (129,375,967) (141,609,540)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 325,586,345 467,195,885
PERIOD
END OF PERIOD $ 196,210,378 $ 325,586,345
(INCLUDING
ACCUMULATE
D NET
INVESTMENT
LOSS OF
$2,779,32
3 AND
$44,636,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 8,375,247 22,221,455
ISSUED IN - 48,973
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (10,675,047) (27,946,037)
NET INCREASE (2,299,800) (5,675,609)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 19.60 $ 20.96 $ 15.27 $ 16.62 $ 9.86 $ 9.90
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.01) (.01) .07 .17 .21 .09
INVESTMENT
INCOME (LOSS) D
NET REALIZED (5.93) (1.42) 5.54 (1.42) 6.48 (.05)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM (5.94) (1.43) 5.61 (1.25) 6.69 .04
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.04) (.06) (.18) (.19) (.17)
INVESTMENT
INCOME
IN EXCESS OF - (.01) - (.05) (.02) -
NET INVESTMENT
INCOME
TOTAL - (.05) (.06) (.23) (.21) (.17)
DISTRIBUTIONS
REDEMPTION FEES .05 .12 .14 .13 .28 .09
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 13.71 $ 19.60 $ 20.96 $ 15.27 $ 16.62 $ 9.86
END OF PERIOD
TOTAL RETURN B, C (30.05)% (6.26)% 37.74% (6.86)% 70.58% 1.51%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 196,210 $ 325,586 $ 467,196 $ 364,204 $ 409,212 $ 137,922
OF PERIOD
(000 OMITTED)
RATIO OF 1.73% A 1.62% 1.52% 1.46% 1.55% 1.73% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.67% A, E 1.61% E 1.52% 1.46% 1.55% 1.73% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.09)% A (.05)% .39% .99% 1.38% 1.12% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 63% A 54% 53% 43% 73% 36% A
TURNOVER RATE
AVERAGE $ .0074 $ .0141
COMMISSION
RATE F
</TABLE>
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 N
ET INVESTMENT
INCOME (LOSS) PER
SHARE HAS BEEN
CALCULATED BASED
ON AVERAGE SHARES
OUTSTANDING
DURING THE
PERIOD. E FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
COMPUTERS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
COMPUTERS 29.92% 69.76% 411.91% 397.35%
COMPUTERS 26.03% 64.67% 396.55% 382.43%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
COMPUTERS 69.76% 38.62% 17.40%
COMPUTERS 64.67% 37.78% 17.04%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 114622 S00000000000001
Computers S&P 500
00007 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9782.72 9781.00
1987/10/31 6330.64 7674.17
1987/11/30 5475.90 7041.82
1987/12/31 6305.64 7577.70
1988/01/31 5975.86 7896.72
1988/02/29 6516.02 8264.71
1988/03/31 6413.67 8009.33
1988/04/30 6743.45 8098.24
1988/05/31 6544.45 8168.69
1988/06/30 7164.21 8543.63
1988/07/31 6624.05 8511.17
1988/08/31 5992.92 8221.79
1988/09/30 6152.12 8572.04
1988/10/31 5657.45 8810.34
1988/11/30 5623.34 8684.35
1988/12/31 5987.23 8836.33
1989/01/31 6339.76 9483.15
1989/02/28 6226.04 9247.02
1989/03/31 5930.37 9462.47
1989/04/30 6595.62 9953.57
1989/05/31 7181.27 10356.69
1989/06/30 6328.38 10297.66
1989/07/31 6442.10 11227.54
1989/08/31 6538.76 11447.60
1989/09/30 6692.28 11400.66
1989/10/31 6470.53 11136.17
1989/11/30 6328.38 11363.35
1989/12/31 6396.61 11636.07
1990/01/31 6339.76 10855.29
1990/02/28 6914.03 10995.32
1990/03/31 7408.70 11286.70
1990/04/30 7209.70 11004.53
1990/05/31 8147.87 12077.47
1990/06/30 8295.70 11995.34
1990/07/31 7704.37 11956.96
1990/08/31 6481.90 10876.05
1990/09/30 6055.46 10346.39
1990/10/31 6282.90 10301.90
1990/11/30 7317.73 10967.40
1990/12/31 7574.02 11273.39
1991/01/31 8865.05 11764.91
1991/02/28 9438.84 12606.10
1991/03/31 10184.77 12911.17
1991/04/30 9524.91 12942.15
1991/05/31 10006.89 13501.25
1991/06/30 8644.29 12882.90
1991/07/31 9512.85 13483.24
1991/08/31 10103.71 13802.79
1991/09/30 9571.94 13572.29
1991/10/31 9382.86 13754.15
1991/11/30 8738.83 13199.86
1991/12/31 9902.82 14709.93
1992/01/31 10936.83 14436.32
1992/02/29 11687.22 14623.99
1992/03/31 10765.48 14338.83
1992/04/30 10416.87 14760.39
1992/05/31 10546.86 14832.71
1992/06/30 9530.58 14611.71
1992/07/31 9997.36 15209.33
1992/08/31 9424.22 14897.53
1992/09/30 9891.00 15073.32
1992/10/31 10670.94 15126.08
1992/11/30 11332.70 15641.88
1992/12/31 12077.19 15834.28
1993/01/31 12780.31 15967.28
1993/02/28 11905.84 16184.44
1993/03/31 12142.18 16525.93
1993/04/30 11797.33 16126.00
1993/05/31 13179.55 16558.18
1993/06/30 12652.12 16606.20
1993/07/31 13179.55 16539.77
1993/08/31 13961.59 17166.63
1993/09/30 14355.64 17034.45
1993/10/31 14355.64 17387.06
1993/11/30 14967.94 17221.88
1993/12/31 15563.62 17430.27
1994/01/31 16567.11 18022.90
1994/02/28 17270.18 17534.48
1994/03/31 17091.22 16769.97
1994/04/30 16982.56 16984.63
1994/05/31 16969.78 17263.18
1994/06/30 15576.40 16840.23
1994/07/31 16068.56 17392.59
1994/08/31 17992.44 18105.69
1994/09/30 17864.61 17662.10
1994/10/31 18535.73 18059.49
1994/11/30 18644.39 17401.77
1994/12/31 18746.65 17659.84
1995/01/31 18171.40 18117.75
1995/02/28 19603.13 18823.80
1995/03/31 21111.55 19379.29
1995/04/30 22788.93 19950.01
1995/05/31 23915.43 20747.42
1995/06/30 26530.98 21229.38
1995/07/31 29865.15 21933.35
1995/08/31 30531.99 21988.40
1995/09/30 32280.00 22916.31
1995/10/31 31108.19 22834.50
1995/11/30 30357.19 23836.93
1995/12/31 28463.11 24296.03
1996/01/31 28280.61 25123.07
1996/02/29 29952.33 25355.96
1996/03/31 27419.19 25600.14
1996/04/30 30433.04 25977.48
1996/05/31 31484.76 26647.44
1996/06/30 29196.17 26748.97
1996/07/31 27240.87 25567.20
1996/08/31 28418.49 26106.41
1996/09/30 31906.92 27575.68
1996/10/31 33588.19 28336.22
1996/11/30 38157.96 30478.15
1996/12/31 37462.68 29874.38
1997/01/31 42264.80 31740.93
1997/02/28 37131.76 31989.78
1997/03/31 34207.40 30675.32
1997/04/30 36073.28 32506.64
1997/05/31 38673.31 34485.64
1997/06/30 38421.69 36030.60
1997/07/31 47286.95 38897.55
1997/08/29 48243.09 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 114629 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Computers Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$48,243 - a 382.43% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
COMPAQ COMPUTER CORP. 10.3
DELL COMPUTER CORP. 7.0
QUANTUM CORP. 6.2
EMC CORP. 5.9
TERADYNE, INC. 4.4
WESTERN DIGITAL CORP. 3.9
TEXAS INSTRUMENTS, INC. 3.8
APPLIED MATERIALS, INC. 3.5
INTEL CORP. 3.4
HEWLETT-PACKARD CO. 2.6
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 38.5
ROW: 1, COL: 2, VALUE: 5.6
ROW: 1, COL: 3, VALUE: 10.6
ROW: 1, COL: 4, VALUE: 11.5
ROW: 1, COL: 5, VALUE: 13.6
ROW: 1, COL: 6, VALUE: 20.2
MINI & MICRO COMPUTERS 20.2%
SEMICONDUCTORS 13.6%
COMPUTER PERIPHERALS 11.5%
COMPUTER STORAGE DEVICES 10.6%
ELECTRONIC EQUIPMENT 5.6%
ALL OTHERS 38.5%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
COMPUTERS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Michael Tempero,
Portfolio Manager of
Fidelity Select Computers Portfolio
Q. HOW DID THE FUND PERFORM, MICHAEL?
A. The fund outperformed the broader market in the latest period. The
fund generated a return of 29.92% in the six months that ended August
31, 1997, about doubling the 14.78% return of the Standard & Poor's
500 Index. During the 12 months that ended August 31, 1997, the fund
returned 69.76%, compared to the 40.65% return of the S&P 500.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
A. The fund performed well because it's invested in the right sector
of the market - technology. Over the past few years, technology has
improved productivity across the board in corporate America. This
trend has benefited the overall economy, as well as technology
companies - particularly PC and semiconductor makers. In fact, much of
the long-running bull market has been led by large-cap technology
stocks, such as Intel and Dell Computer.
Q. DELL AND COMPAQ TOGETHER REPRESENTED MORE THAN 17% OF THE FUND'S
INVESTMENTS . . .
A. That's right. Dell Computer is growing faster than any other
company in the PC market because it's done an outstanding job of
executing throughout all stages of its business, including
manufacturing, managing inventory, marketing and sales. Its stock has
appreciated considerably as analysts have raised earnings estimates to
reflect the fact that the company is growing so quickly. Compaq hasn't
been growing quite as fast, but the outlook for the company is
improving. These two companies have established themselves as leaders
in the PC market and stand to benefit the most from increased demand.
Q. THE FUND REDUCED ITS POSITION IN DISK-DRIVE MANUFACTURER SEAGATE
TECHNOLOGY FROM ABOUT 11% OF THE FUND AT THE END OF FEBRUARY TO LESS
THAN 1% AT THE END OF THIS PERIOD. WHY?
A. Late last year, Seagate was benefiting from a shortage of
disk-drive heads in the market, but the shortage eased up during the
period. Seagate also faced new competition at the high end of its
product line, which was very important for its profitability. These
factors caused the company to miss earnings estimates in the June
quarter. As these circumstances came to light, I began reducing the
fund's position in Seagate. As it turned out, the stock was down
significantly during the period.
Q. QUANTUM, WESTERN DIGITAL AND INTEL WERE AGAIN AMONG THE FUND'S TOP
10 HOLDINGS AT THE END OF THE PERIOD. WHAT DID YOU LIKE ABOUT THESE
INVESTMENTS?
A. Quantum and Western Digital are Seagate's new competitors in the
high end of the disk-drive market, and have the leading technology in
the desktop segment of the PC market. Both stocks benefited from
Seagate's earnings shortfall late in the period. I invested in these
companies because I thought they were undervalued relative to their
earnings growth potential. I liked Intel because most PCs that go out
the door are made with its processors. The company has an incredibly
powerful market position and can generate strong cash flow. All three
stocks appreciated considerably during the period.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. I think I had too many large holdings in the disk-drive business at
the beginning of the period. That area of the industry has improved
since June, but before that time, those investments didn't perform as
well as I had expected. In hindsight, I would've invested some of
those assets in the PC makers.
Q. WHAT IS YOUR SHORT-TERM OUTLOOK FOR THE COMPUTER MARKET?
A. I'm pretty optimistic about the PC market in the fourth quarter. A
good Christmas shopping season could boost already healthy sales of
PCs. Overall, technology companies should continue to perform well,
considering they have better operating margins, return on equity and
return on assets than most other segments of the market. This sector
continues to benefit from government, corporate and consumer spending
as technological change becomes more of a driving force behind the
growing global economy.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 007
TRADING SYMBOL: FDCPX
SIZE: as of August 31, 1997, more than
$801 million
MANAGER: Michael Tempero, since January
1997; manager, Fidelity Select Insurance Portfolio,
1995-February 1997; Fidelity Select Natural Gas
Portfolio, 1994-1995; joined Fidelity in 1993
(checkmark)
COMPUTERS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 89.9%
SHARES VALUE (NOTE 1)
COMMUNICATIONS EQUIPMENT - 1.2%
DATACOMMUNICATIONS EQUIPMENT - 0.0%
Dynatech Corp. (a) 2,900 $ 110,925 26813810
TELEPHONE EQUIPMENT - 1.2%
Ascend Communications, Inc. 200,000 8,487,500 04349110
Newbridge Networks Corp. (a) 26,500 1,205,750 65090110
9,693,250
TOTAL COMMUNICATIONS EQUIPMENT 9,804,175
COMPUTER SERVICES & SOFTWARE - 8.1%
COMPUTER & SOFTWARE STORES - 0.2%
MicroAge, Inc. (a) 50,000 1,359,375 59492810
COMPUTER SERVICES - 1.2%
Computer Learning Centers, Inc. (a) 163,300 7,838,400 20519910
Equifax, Inc. 68,800 2,025,300 29442910
9,863,700
CAD/CAM/CAE - 0.3%
JetFax, Inc. 100,000 987,500 47690910
Synopsys, Inc. 46,100 1,596,213 87160710
2,583,713
DATA PROCESSING - 0.8%
Ceridian Corp. 200,000 6,912,500 15677T10
PREPACKAGED COMPUTER SOFTWARE - 5.6%
Cadence Design Systems, Inc. (a) 38,800 1,845,425 12738710
Electronics for Imaging, Inc. (a) 352,400 18,853,400 28608210
McAfee Associates, Inc. (a) 800 45,300 57905710
Netscape Communications Corp. (a) 362,400 14,428,050 64114910
Peerless Systems Corp. 60,000 877,500 70553610
PeopleSoft, Inc. (a) 165,000 9,281,250 71271310
Siebel Systems, Inc. 2,200 79,475 82617010
45,410,400
TOTAL COMPUTER SERVICES & SOFTWARE 66,129,688
COMPUTERS & OFFICE EQUIPMENT - 51.3%
COMPUTER COMMUNICATIONS EQUIPMENT - 3.9%
Apex PC Solutions, Inc. 355,000 14,200,000 03794510
Bay Networks, Inc. 500,000 17,687,500 07251010
31,887,500
COMPUTER EQUIPMENT - 0.3%
Stratus Computer, Inc. 41,100 2,281,050 86315510
COMPUTER EQUIPMENT - WHOLESALE - 0.6%
Allstar Systems, Inc. (c) 100,000 731,250 01989210
Insight Enterprises, Inc. 25,000 1,081,250 45765U10
Pomeroy Computer Resources, Inc. (a) 97,000 3,201,000 73182210
5,013,500
COMPUTER PERIPHERALS - 11.5%
Applied Magnetics Corp. (a) 200,000 7,387,500 03821310
Creative Technology Corp. Ltd. (a) 143,400 2,760,450 22599992
EMC Corp. (a) 939,500 48,208,094 26864810
Fore Systems, Inc. 200,000 4,087,500 34544910
Western Digital Corp. (a) 654,900 31,517,063 95810210
93,960,607
COMPUTER RENTAL & LEASING - 0.3%
Comdisco, Inc. 80,600 2,191,313 20033610
COMPUTER STORAGE DEVICES - 10.6%
Adaptec, Inc. 15,400 739,200 00651F10
Advanced Digital Information Corp. (a) 100,700 1,837,775 00752510
Iomega Corp. (a) 700,000 17,937,500 46203010
Quantum Corp. (a) 1,433,200 50,251,575 74790610
SHARES VALUE (NOTE 1)
Read-Rite Corp. 297,400 $ 8,531,663 75524610
Seagate Technology (a) 184,600 7,049,413 81180410
86,347,126
COMPUTERS & OFFICE EQUIPMENT - 3.0%
Diebold, Inc. 54,900 2,545,988 25365110
Hewlett-Packard Co. 350,000 21,459,375 42823610
24,005,363
ELECTRONIC COMPUTERS - 0.0%
Micron Electronics, Inc. (a) 5,100 83,194 59510010
GRAPHICS WORKSTATIONS - 0.9%
Silicon Graphics, Inc. 100,000 2,743,750 82705610
Sun Microsystems, Inc. 100,000 4,800,000 86681010
7,543,750
MINI & MICRO COMPUTERS - 20.2%
Compaq Computer Corp. (a) 1,283,000 84,036,500 20449310
Dell Computer Corp. (a) 700,000 57,443,750 24702510
Sequent Computer Systems, Inc. 114,800 3,235,925 81733810
Tandem Computers, Inc. 600,000 20,400,000 87537010
165,116,175
TOTAL COMPUTERS & OFFICE EQUIPMENT 418,429,578
DRUGS & PHARMACEUTICALS - 0.4%
COMMERCIAL LABORATORY RESEARCH - 0.4%
Integrated Process Equipment Corp. 100,000 3,300,000 45812K10
ELECTRICAL EQUIPMENT - 0.0%
ELECTRICAL MACHINERY - 0.0%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 5,900 145,288 01390430
ELECTRONIC INSTRUMENTS - 11.3%
ELECTRONIC EQUIPMENT - 5.6%
Advantest Corp. 100,000 9,105,961 00799010
Sawtek, Inc. 3,200 126,000 80546810
Teradyne, Inc. (a) 650,000 36,196,875 88077010
45,428,836
OPTICAL INSTRUMENTS - 0.2%
Zygo Corporation 50,000 1,550,000 98985510
SEMICONDUCTOR CAPITAL EQUIPMENT - 5.5%
Applied Materials, Inc. (a) 300,000 28,312,500 03822210
KLA-Tencor Corp. (a) 234,500 16,620,188 48248010
Lam Research Corp. 8,100 457,650 51280710
45,390,338
TOTAL ELECTRONIC INSTRUMENTS 92,369,174
ELECTRONICS - 14.0%
ELECTRONICS & ELECTRONIC COMPONENTS - 0.4%
Cirrus Logic, Inc. 190,500 3,274,219 17275510
SEMICONDUCTORS - 13.6%
Altera Corp. (a) 122,500 6,523,125 02144110
Etec Systems, Inc. 14,400 964,800 26922C10
Integrated Device Technology, Inc. 200,000 2,725,000 45811810
Integrated Silicon Solution 100,000 1,462,500 45812P10
Intel Corp. 300,800 27,711,200 45814010
Linear Technology Corp. 64,500 4,228,781 53567810
Maxim Integrated Products, Inc. (a) 149,600 10,341,100 57772K10
Micron Technology, Inc. (a) 402,000 17,914,125 59511210
S3, Inc. 266,700 4,283,869 78484910
Texas Instruments, Inc. 270,000 30,678,750 88250810
VLSI Technology, Inc. 78,200 2,580,600 91827010
Xilinx, Inc. (a) 26,200 1,244,500 98391910
110,658,350
TOTAL ELECTRONICS 113,932,569
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
SPECIAL INDUSTRIAL MACHINERY - 1.9%
ASM Lithography Holding NV (a) 181,500 $ 15,427,500 04599S23
PUBLISHING - 0.8%
BOOK PUBLISHING & PRINTING - 0.8%
Cognizant Corp. 154,900 6,505,800 19244110
RETAIL & WHOLESALE, MISCELLANEOUS - 0.3%
MAIL ORDER - 0.3%
Micro Warehouse, Inc. 100,000 2,612,500 59501B10
SERVICES - 0.0%
PERSONNEL SUPPLY SERVICES - 0.0%
AccuStaff, Inc. (a) 14,100 374,531 00440110
TELEPHONE SERVICES - 0.6%
Tel-Save Holdings, Inc. (a) 185,000 3,306,870 87917610
WorldCom, Inc. (a) 57,500 1,721,406 98155K10
5,028,276
TOTAL COMMON STOCKS
(Cost $597,369,179) 734,059,079
CASH EQUIVALENTS - 10.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.35%, dated
8/29/97 due 9/2/97 $ 3,902,318 3,900,000 66199GSA
SHARES
Taxable Central Cash Fund (b) 78,386,230 78,386,230 31635A10
TOTAL CASH EQUIVALENTS
(Cost $82,286,230) 82,286,230
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $679,655,409) $ 816,345,309
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements).
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $952,027,420 and $944,418,927, respectively (see Note 3 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 $116,853 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $23,523,306 and $23,701,500, respectively (see Note 6 of
Notes to Financial Statements).
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Allstar Systems, Inc. $ - $ - $ - $ 731,250
Procom Technology, Inc. - 105,300 - -
TOTALS $ - $ 105,300 $ - $ 731,250
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $679,659,335. Net unrealized appreciation
aggregated $136,685,974, of which $149,279,054 related to appreciated
investment securities and $12,593,080 related to depreciated
investment securities.
COMPUTERS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 816,345,309
SECURITIES, AT
VALUE
(INCLUDING
REPURCHASE
AGREEMENTS OF
$3,900,000)
(COST
$679,655,40
9) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 73,138,928
INVESTMENTS
SOLD
RECEIVABLE FOR 18,753,879
FUND SHARES
SOLD
DIVIDENDS 76,529
RECEIVABLE
INTEREST 366,132
RECEIVABLE
REDEMPTION FEES 12,741
RECEIVABLE
OTHER 83,101
RECEIVABLES
TOTAL ASSETS 908,776,619
LIABILITIES
PAYABLE FOR $ 73,607,708
INVESTMENTS
PURCHASED
PAYABLE FOR 9,292,973
FUND SHARES
REDEEMED
ACCRUED 384,682
MANAGEMENT
FEE
OTHER PAYABLES 484,524
AND
ACCRUED
EXPENSES
COLLATERAL ON 23,701,500
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 107,471,387
NET ASSETS $ 801,305,232
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 566,619,648
ACCUMULATED (2,027,800)
NET INVESTMENT
(LOSS)
ACCUMULATED 100,023,484
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 136,689,900
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 801,305,232
13,930,854
SHARES
OUTSTANDING
NET ASSET $57.52
VALUE AND
REDEMPTION
PRICE PER
SHARE
($801,305,2
32 (DIVIDED BY)
13,930,854
SHARES)
MAXIMUM $59.30
OFFERING PRICE
PER SHARE
(100/97.00
OF $57.52)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 437,675
INCOME
DIVIDENDS
INTEREST 1,751,728
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$135,680)
TOTAL INCOME 2,189,403
EXPENSES
MANAGEMENT $ 1,859,999
FEE
TRANSFER AGENT 2,077,820
FEES
ACCOUNTING AND 284,542
SECURITY
LENDING FEES
NON-INTERESTED 1,345
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 40,724
AND EXPENSES
REGISTRATION FEES 87,512
AUDIT 21,394
LEGAL 11,079
MISCELLANEOUS 2,206
TOTAL EXPENSES 4,386,621
BEFORE
REDUCTIONS
EXPENSE (169,418) 4,217,203
REDUCTIONS
NET INVESTMENT (2,027,800)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 101,228,552
SECURITIES
(INCLUDING
REALIZED GAIN
OF $32,708
ON SALES OF
INVESTMENTS IN
AFFILIATED
ISSUES)
FOREIGN 1,811 101,230,363
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 62,358,869
SECURITIES
ASSETS AND 140 62,359,009
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 163,589,372
NET INCREASE $ 161,561,572
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 1,597,494
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 4,236
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 104,348
WITHHELD BY
FSC
EXPENSE $ 168,111
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 541
CREDITS
TRANSFER 766
AGENT CREDITS
$ 169,418
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (2,027,800) $ (4,516,493)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 101,230,363 104,428,835
GAIN (LOSS)
CHANGE IN NET 62,359,009 8,119,973
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 161,561,572 108,032,315
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (44,870,274) (31,596,668)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 413,709,907 659,275,361
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 44,278,958 31,233,988
OF
DISTRIBUTIONS
COST OF SHARES (378,531,674) (691,302,094)
REDEEMED
REDEMPTION 870,264 1,306,734
FEES
NET INCREASE 80,327,455 513,989
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 197,018,753 76,949,636
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 604,286,479 527,336,843
PERIOD
END OF PERIOD $ 801,305,232 $ 604,286,479
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$2,027,800
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 8,214,233 14,415,549
ISSUED IN 1,049,760 674,688
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (7,856,647) (15,418,220)
NET INCREASE 1,407,346 (327,983)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 48.25 $ 41.03 $ 30.67 $ 27.02 $ 20.15 $ 17.63
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.16) (.36) (.23) (.31) (.21) F (.15)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 13.15 9.94 16.10 3.68 8.66 2.44
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 12.99 9.58 15.87 3.37 8.45 2.29
INVESTMENT
OPERATIONS
LESS (3.79) (2.47) (5.61) - (1.80) -
DISTRIBUTIONS
FROM NET
REALIZED GAIN
REDEMPTION FEES .07 .11 .10 .28 .22 .23
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 57.52 $ 48.25 $ 41.03 $ 30.67 $ 27.02 $ 20.15
END OF PERIOD
TOTAL RETURN B, C 29.92% 23.97% 52.79% 13.51% 45.06% 14.29%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 801,305 $ 604,286 $ 527,337 $ 215,014 $ 120,435 $ 47,596
OF PERIOD
(000 OMITTED)
RATIO OF 1.40% 1.48% 1.40% 1.71% 1.90% 1.81% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.35% A, E 1.44% E 1.38% E 1.69% E 1.89% E 1.81% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.65)% A (.83)% (.56)% (1.12)% (.91)% (.98)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 327% A 255% 129% 189% 145% 254% A
TURNOVER RATE
AVERAGE $ .0450 $ .0432
COMMISSION
RATE G
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
INVESTMENT
INCOME PER SHARE
REFLECTS A SPECIAL
DIVIDEND WHICH
AMOUNTED TO
$.07 PER
SHARE. G FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
DEVELOPING COMMUNICATIONS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund 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, 1997 MONTHS YEAR YEARS FUND
DEVELOPING COMMUNICATIONS 25.97% 24.82% 190.30% 306.26%
DEVELOPING COMMUNICATIONS 22.19% 21.08% 181.59% 294.08%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 206.48%
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 the
fund's returns to the performance of the S&P 500 - a widely
recognized, unmanaged index of common stocks. This benchmark includes
reinvestment of dividends and capital gains, if any, and excludes the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
AUGUST 31, 1997 YEAR YEARS FUND
DEVELOPING COMMUNICATIONS 24.82% 23.76% 21.56%
DEVELOPING COMMUNICATIONS 21.08% 23.01% 21.04%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 16.88%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970909 115030 S00000000000001
Developing Communications S&P 500
00518 SP001
1990/06/29 9700.00 10000.00
1990/07/31 8953.10 9980.27
1990/08/31 7866.70 9078.05
1990/09/30 6751.20 8635.95
1990/10/31 7081.00 8598.82
1990/11/30 8235.30 9154.30
1990/12/31 8759.10 9409.71
1991/01/31 10146.20 9819.97
1991/02/28 10776.70 10522.10
1991/03/31 11494.50 10776.73
1991/04/30 11591.50 10802.60
1991/05/31 11766.10 11269.27
1991/06/30 10841.06 10753.14
1991/07/31 11963.62 11254.23
1991/08/31 12670.42 11520.96
1991/09/30 12815.94 11328.56
1991/10/31 13564.32 11480.36
1991/11/30 12888.70 11017.70
1991/12/31 14135.99 12278.13
1992/01/31 14510.18 12049.75
1992/02/29 14998.70 12206.40
1992/03/31 14260.72 11968.38
1992/04/30 14073.63 12320.25
1992/05/31 14011.26 12380.62
1992/06/30 13512.35 12196.14
1992/07/31 14104.81 12694.97
1992/08/31 13574.71 12434.72
1992/09/30 14032.05 12581.45
1992/10/31 14655.70 12625.48
1992/11/30 15986.14 13056.01
1992/12/31 16569.33 13216.60
1993/01/31 17017.15 13327.62
1993/02/28 17121.30 13508.88
1993/03/31 17735.75 13793.92
1993/04/30 17206.93 13460.10
1993/05/31 18365.83 13820.83
1993/06/30 19160.51 13860.91
1993/07/31 19535.77 13805.47
1993/08/31 21323.79 14328.70
1993/09/30 21621.79 14218.37
1993/10/31 22372.32 14512.69
1993/11/30 20672.60 14374.82
1993/12/31 21833.52 14548.75
1994/01/31 22673.27 15043.41
1994/02/28 22298.78 14635.73
1994/03/31 20744.11 13997.61
1994/04/30 21598.03 14176.78
1994/05/31 20440.78 14409.28
1994/06/30 18918.07 14056.26
1994/07/31 20879.32 14517.30
1994/08/31 22657.83 15112.51
1994/09/30 22962.38 14742.25
1994/10/31 25021.07 15073.95
1994/11/30 24314.54 14524.96
1994/12/31 25138.57 14740.37
1995/01/31 24467.87 15122.58
1995/02/28 25337.29 15711.91
1995/03/31 25473.91 16175.57
1995/04/30 26593.13 16651.94
1995/05/31 27505.97 17317.52
1995/06/30 30405.58 17719.80
1995/07/31 33318.60 18307.39
1995/08/31 33399.15 18353.34
1995/09/30 34285.14 19127.86
1995/10/31 30875.42 19059.57
1995/11/30 31023.08 19896.28
1995/12/31 29504.05 20279.49
1996/01/31 28582.05 20969.80
1996/02/29 30871.16 21164.19
1996/03/31 30569.12 21368.00
1996/04/30 32572.09 21682.97
1996/05/31 34416.10 22242.17
1996/06/30 32921.82 22326.91
1996/07/31 30060.43 21340.51
1996/08/31 31570.61 21790.58
1996/09/30 34416.10 23016.95
1996/10/31 32969.51 23651.76
1996/11/30 34527.37 25439.60
1996/12/31 33796.13 24935.64
1997/01/31 35226.82 26493.62
1997/02/28 31284.47 26701.33
1997/03/31 28566.15 25604.17
1997/04/30 29742.50 27132.74
1997/05/31 33907.41 28784.58
1997/06/30 35099.65 30074.13
1997/07/31 39566.59 32467.13
1997/08/29 39407.62 30648.32
IMATRL PRASUN SHR__CHT 19970831 19970909 115035 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Select Developing Communications Portfolio on
June 29, 1990, when the fund started, and the current maximum 3% sales
charge was paid. As the chart shows, by August 31, 1997, the value of
the investment would have grown to $39,408 - a 294.08% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $30,648 - a 206.48%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
VITESSE SEMICONDUCTOR CORP. 6.7
COMPAQ COMPUTER CORP. 6.1
MICRON TECHNOLOGY, INC. 4.8
NEXTEL COMMUNICATIONS, INC. CLASS A 4.4
ANDREW CORP. 3.5
TELLABS, INC. 3.5
BRIGHTPOINT, INC. 3.4
ADC TELECOMMUNICATIONS, INC. 3.3
ALCATEL ALSTHOM COMPAGNIE GENERALE D'ELECTRICITE SA 3.2
MOTOROLA, INC. 3.0
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 36.1
ROW: 1, COL: 2, VALUE: 4.0
ROW: 1, COL: 3, VALUE: 4.4
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 23.4
ROW: 1, COL: 6, VALUE: 25.1
SEMICONDUCTORS 25.1%
TELEPHONE EQUIPMENT 23.4%
MINI & MICRO COMPUTERS 7.0%
CELLULAR & COMMUNICATION
SERVICES 4.4%
COMPUTER PERIPHERALS 4.0%
ALL OTHERS 36.1%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
DEVELOPING COMMUNICATIONS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Nicholas Romano,
Portfolio Manager of
Fidelity Select Developing Communications Portfolio
Q. HOW DID THE FUND PERFORM, NICK?
A. For the six-month period that ended August 31, 1997, the fund
returned 25.97%. This topped the Standard & Poor's 500 Index, which
returned 14.78% in that same time span. For the 12 months that ended
August 31, 1997, the fund returned 24.82%, while the index returned
40.65%.
Q. WHAT FACTORS DROVE PERFORMANCE?
A. Two of the more important sub-segments of this industry are the
equipment suppliers and the service providers. When I took over the
fund just prior to March, I decided to focus more heavily on the
equipment supplier side and to de-emphasize the service providers.
This move paid off nicely. In the past six months, service providers
have been building extensive networks and overhauling existing
networks, each of which have been aimed at meeting rapidly growing
demand for advanced telephone networks, the Internet and wireless
communications. Along the way, the service providers have experienced
new competition, which increases the cost of doing business and, in
many cases, reduces their ability to set prices. Meanwhile, the
buildout of these new competing facilities and the upgrades to
existing facilities have resulted in a significant increase in
worldwide equipment spending.
Q. DID THE SERVICE PROVIDERS PERFORM POORLY?
A. Not at all. In many cases, service provider stocks performed
capably, but couldn't match the dramatic upward move of the equipment
suppliers. Some good service provider stocks to own included WorldCom,
Brooks Fiber and NexTel.
Q. TWO WELL-KNOWN STOCKS - COMPAQ AND MICRON - HAVE MADE THEIR WAY
ONTO THE FUND'S LIST OF TOP HOLDINGS . . .
A. These two positions benefited from the healthy demand for PCs as
well as rapidly improving profitability. Compaq's stock did quite well
during the period and, while Micron has not been as strong, I am
hopeful that the upcoming holiday season will create a supply/demand
imbalance in DRAMs. An imbalance could help drive near-term earnings.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Vitesse, a manufacturer of semiconductors and the fund's top
holding, performed extremely well due to high demand for high-speed
communications equipment. French telecommunications company Alcatel -
which is making progress as a restructuring story - also performed
nicely. Wireless communications stocks Nokia and Ericsson continued to
post strong performance, as worldwide demand for mobile phones and
infrastructure stayed high. Disappointments included telemarketing
outsourcing stocks Sitel Corp. and APAC TeleServices. In retrospect, I
also could have had higher weightings in several stocks where I had
more conviction that results would be strong, including Brightpoint,
Nokia and Alcatel.
Q. WHAT'S YOUR OUTLOOK?
A. Many of the companies that I believe are best-positioned for the
long-term are at high valuation levels, but I expect that the end
demand for services such as the Internet and wireless communications -
both long-term trends - will continue to keep demand for equipment at
high levels. This should produce good additional investing
opportunities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: June 29, 1990
FUND NUMBER: 518
TRADING SYMBOL: FSDCX
SIZE: as of August 31, 1997, more than
$277 million
MANAGER: Nicholas Romano, since February
1997; equity analyst, telecommunications
equipment industry and conglomerates, since
1995; joined Fidelity in 1995
(checkmark)
DEVELOPING COMMUNICATIONS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 91.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.7%
MISSILES & SPACE VEHICLES - 0.7%
Orbital Sciences Corp. (a) 86,200 $ 1,869,463 68556410
APPLIANCE STORES - 0.3%
ELECTRIC APPLIANCES - WHOLESALE - 0.3%
Cellstar Corp. (a) 25,350 844,472 15092510
BROADCASTING - 0.5%
COMMUNICATIONS SERVICES, NEC - 0.5%
APT Satellite Holdings Ltd.
sponsored ADR 92,200 1,371,475 00203R10
CELLULAR - 4.4%
CELLULAR & COMMUNICATION SERVICES - 4.4%
Nextel Communications, Inc. Class A (a) 500,000 12,531,250 65332V10
COMMUNICATIONS EQUIPMENT - 21.1%
DATACOMMUNICATIONS EQUIPMENT - 0.9%
Dynatech Corp. (a) 69,550 2,660,288 26813810
TELEPHONE EQUIPMENT - 18.9%
ADC Telecommunications, Inc. (a) 248,900 9,240,413 00088610
Advanced Fibre Communication, Inc. 33,600 2,091,600 00754A10
Andrew Corp. (a) 401,500 9,987,313 03442510
Applied Innovation, Inc. (a) 110,000 467,500 03791610
Boston Technology, Inc. (a) 100,400 2,955,525 10114330
DSP Communications, Inc. 169,800 3,268,650 23332K10
Ericsson (L.M.) Telephone Co. Class B 50,000 2,075,004 29482120
Newbridge Networks Corp. (a) 100,000 4,550,000 65090110
Nokia Corp. AB sponsored ADR 85,100 6,595,250 65490220
Tellabs, Inc. (a) 166,000 9,908,125 87966410
Teledata Communications Ltd. (a) 65,200 2,249,400 93799992
53,388,780
TELEPHONE INTERCONNECT SYSTEMS - 1.3%
Intermedia Communications, Inc. (a) 100,000 3,575,000 45880110
TOTAL COMMUNICATIONS EQUIPMENT 59,624,068
COMPUTER SERVICES & SOFTWARE - 2.7%
PREPACKAGED COMPUTER SOFTWARE - 2.7%
Citrix Systems, Inc. (a) 100,000 5,050,000 17737610
Oracle Corp. (a) 68,700 2,619,188 68389X10
7,669,188
COMPUTERS & OFFICE EQUIPMENT - 13.6%
COMPUTER COMMUNICATIONS EQUIPMENT - 1.4%
Proxim, Inc. 160,000 3,960,000 74428410
COMPUTER PERIPHERALS - 4.0%
Applied Magnetics Corp. (a) 100,000 3,693,750 03821310
EMC Corp. (a) 75,000 3,848,438 26864810
Western Digital Corp. 81,000 3,898,125 95810210
11,440,313
COMPUTER STORAGE DEVICES - 0.2%
Quantum Corp. 16,000 561,000 74790610
GRAPHICS WORKSTATIONS - 1.0%
Silicon Graphics, Inc. 100,000 2,743,750 82705610
MINI & MICRO COMPUTERS - 7.0%
Compaq Computer Corp. (a) 262,500 17,193,750 20449310
Dell Computer Corp. (a) 30,000 2,461,875 24702510
19,655,625
TOTAL COMPUTERS & OFFICE EQUIPMENT 38,360,688
SHARES VALUE (NOTE 1)
ELECTRICAL EQUIPMENT - 5.8%
ELECTRICAL MACHINERY - 4.5%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 146,200 $ 3,600,175 01390430
Alcatel Alsthom Compagnie Generale
d'Electricite SA 73,500 8,985,064 01390492
12,585,239
TV & RADIO COMMUNICATION EQUIPMENT - 1.3%
Allen Telecom, Inc. (a) 78,600 1,876,575 01809110
Corsair Communications, Inc. 200 4,000 22040610
Viasat, Inc. 104,900 1,861,975 92552V10
3,742,550
TOTAL ELECTRICAL EQUIPMENT 16,327,789
ELECTRONIC INSTRUMENTS - 4.1%
ELECTRONIC EQUIPMENT - 1.7%
Sawtek, Inc. (a) 120,200 4,732,875 80546810
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 2.4%
Applied Materials, Inc. (a) 71,200 6,719,500 03822210
Novellus Systems, Inc. (a) 1,100 126,088 67000810
6,845,588
TOTAL ELECTRONIC INSTRUMENTS 11,578,463
ELECTRONICS - 30.7%
ELECTRONIC COMP. & ACCESSORIES - 1.0%
World Access, Inc. 100,000 2,650,000 98141A10
ELECTRONIC PARTS - WHOLESALE - 3.4%
Brightpoint, Inc. 256,400 9,615,000 10947310
ELECTRONICS & ELECTRONIC COMPONENTS - 1.2%
Sanmina Corp. (a) 34,400 2,726,200 80090710
Solectron Corp. (a) 17,000 711,875 83418210
3,438,075
SEMICONDUCTORS - 25.1%
Altera Corp. (a) 55,900 2,976,675 02144110
Atmel Corp. (a) 37,700 1,333,638 04951310
Intel Corp. warrants 3/14/98 (a) 100,000 7,162,500 45814014
Linear Technology Corp. 41,000 2,688,063 53567810
MEMC Electronic Materials, Inc. (a) 60,000 1,740,000 55271510
Maxim Integrated Products, Inc. (a) 33,000 2,281,125 57772K10
Micron Technology, Inc. (a) 301,200 13,422,225 59511210
Motorola, Inc. 116,600 8,555,525 62007610
RF Micro Devices, Inc. 200 3,750 74994110
Texas Instruments, Inc. 72,600 8,249,175 88250810
Unitrode Corp. (a) 44,700 3,486,600 91328310
Vitesse Semiconductor Corp. (a) 401,800 18,934,825 92849710
70,834,101
TOTAL ELECTRONICS 86,537,176
INDUSTRIAL MACHINERY & EQUIPMENT - 2.1%
SPECIAL INDUSTRIAL MACHINERY, NEC - 2.1%
ASM Lithography Holding NV (a) 68,800 5,848,000 04599S23
SERVICES - 1.5%
BUSINESS SERVICES - 1.5%
Sitel Corp. (a) 399,300 4,242,563 82980K10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - 4.0%
Brooks Fiber Properties, Inc. (a) 150,000 $ 5,043,750 11439910
McLeod USA, Inc. Class A (a) 100,000 3,387,500 58226610
WorldCom, Inc. (a) 100,170 2,998,835 98155K10
11,430,085
TOTAL COMMON STOCKS
(Cost $224,402,564) 258,234,680
CASH EQUIVALENTS - 8.5%
Taxable Central Cash Fund (b)
(Cost $24,002,468) 24,002,468 24,002,468 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $248,405,032) $ 282,237,148
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $338,976,813 and $335,327,521, respectively (see Note 3 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 $58,469 for the
period (see Note 4 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 87.5%
France 4.5
Finland 2.3
Netherlands 2.1
Canada 1.6
Others (individually less than 1%) 2.0
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $248,491,292. Net unrealized appreciation
aggregated $33,745,856, of which $38,976,072 related to appreciated
investment securities and $5,230,216 related to depreciated investment
securities.
At February 28,1997, the fund had a capital loss carryforward of
approximately $1,633,000 which will expire on February 28, 2005.
DEVELOPING COMMUNICATIONS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 282,237,148
SECURITIES, AT
VALUE
(COST
$248,405,03
2) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 1,557,287
INVESTMENTS
SOLD
RECEIVABLE FOR 372,445
FUND SHARES
SOLD
DIVIDENDS 65,834
RECEIVABLE
INTEREST 100,135
RECEIVABLE
REDEMPTION FEES 700
RECEIVABLE
OTHER 35,088
RECEIVABLES
TOTAL ASSETS 284,368,637
LIABILITIES
PAYABLE FOR $ 298,438
INVESTMENTS
PURCHASED
PAYABLE FOR 6,375,887
FUND SHARES
REDEEMED
ACCRUED 145,145
MANAGEMENT
FEE
OTHER PAYABLES 237,920
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 7,057,390
NET ASSETS $ 277,311,247
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 214,438,405
ACCUMULATED (774,725)
NET INVESTMENT
(LOSS)
ACCUMULATED 29,817,811
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 33,829,756
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 277,311,247
11,185,609
SHARES
OUTSTANDING
NET ASSET $24.79
VALUE AND
REDEMPTION
PRICE PER
SHARE
($277,311,2
47 (DIVIDED BY)
11,185,609
SHARES)
MAXIMUM $25.56
OFFERING PRICE
PER SHARE
(100/97.00
OF $24.79)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 381,895
INCOME
DIVIDENDS
INTEREST 721,621
TOTAL INCOME 1,103,516
EXPENSES
MANAGEMENT $ 711,502
FEE
TRANSFER AGENT 1,068,013
FEES
ACCOUNTING FEES 119,448
AND EXPENSES
NON-INTERESTED 508
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 16,632
AND EXPENSES
REGISTRATION FEES 21,967
AUDIT 16,720
LEGAL 722
MISCELLANEOUS 1,113
TOTAL EXPENSES 1,956,625
BEFORE
REDUCTIONS
EXPENSE (78,384) 1,878,241
REDUCTIONS
NET INVESTMENT (774,725)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 32,367,866
SECURITIES
FOREIGN (5,884) 32,361,982
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 23,108,648
SECURITIES
ASSETS AND 315 23,108,963
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 55,470,945
NET INCREASE $ 54,696,220
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 212,130
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 5,047
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 44,835
WITHHELD BY
FSC
EXPENSE $ 77,940
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 444
CREDITS
$ 78,384
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (774,725) $ (2,645,399)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 32,361,982 20,142,886
GAIN (LOSS)
CHANGE IN NET 23,108,963 (10,187,726)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 54,696,220 7,309,761
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
SHARE 112,788,410 146,934,555
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
COST OF SHARES (110,761,059) (267,415,417)
REDEEMED
REDEMPTION 227,954 345,334
FEES
NET INCREASE 2,255,305 (120,135,528)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 56,951,525 (112,825,767)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 220,359,722 333,185,489
PERIOD
END OF PERIOD $ 277,311,247 $ 220,359,722
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$774,725
AND 0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 5,023,557 7,119,930
REDEEMED (5,037,551) (13,076,634)
NET INCREASE (13,994) (5,956,704)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 19.68 $ 19.42 $ 20.40 $ 19.65 $ 16.44 $ 13.54
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.07) (.18) (.17) (.16) (.16) (.07)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 5.16 .42 4.17 2.55 4.82 2.98
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 5.09 .24 4.00 2.39 4.66 2.91
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - (5.00) (1.67) (1.47) (.03)
REALIZED GAIN
REDEMPTION FEES .02 .02 .02 .03 .02 .02
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 24.79 $ 19.68 $ 19.42 $ 20.40 $ 19.65 $ 16.44
END OF PERIOD
TOTAL RETURN B, C 25.97% 1.34% 21.84% 13.63% 30.24% 21.66%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 277,311 $ 220,360 $ 333,185 $ 254,426 $ 222,109 $ 83,383
OF PERIOD
(000 OMITTED)
RATIO OF 1.63% A 1.64% 1.53% 1.58% 1.56% 1.88% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.57% A, E 1.62% E 1.51% E 1.56% E 1.56% 1.88% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.65)% A (.86)% (.78)% (.83)% (.88)% (.59)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 318% A 202% 249% 266% 280% 77% A
TURNOVER RATE
AVERAGE $ .0407 $ .0346
COMMISSION
RATE F
</TABLE>
ANNUALIZED
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
).
TOTAL RETURNS DO
NOT INCLUDE
THE ONE
TIME SALES
CHARGE AND
FOR PERIODS
OF LESS THAN
ONE YEAR
ARE NOT
ANNUALIZED.
NET INVESTMENT
INCOME
(LOSS) PER
SHARE HAS
BEEN
CALCULATED
BASED ON
AVERAGE
SHARES
OUTSTANDING
DURING THE
PERIOD.
FMR OR THE FUND
HAS ENTERED
INTO
VARYING
ARRANGEME
NTS WITH
THIRD
PARTIES WHO
EITHER PAID
OR REDUCED
A PORTION OF
THE FUND'S
EXPENSES
(SEE NOTE
8 OF NOTES
TO FINANCIAL
STATEMENTS
).
FOR FISCAL YEARS
BEGINNING
ON OR AFTER
SEPTEMBER
1, 1995, A
FUND IS
REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION
RATE PER
SHARE FOR
SECURITY
TRADES ON
WHICH
COMMISSION
S ARE
CHARGED.
THIS
AMOUNT
MAY VARY
FROM PERIOD
TO PERIOD
AND FUND TO
FUND
DEPENDING
ON THE MIX
OF TRADES
EXECUTED IN
VARIOUS
MARKETS
WHERE
TRADING
PRACTICES
AND
COMMISSION
RATE
STRUCTURES
MAY DIFFER.
ELECTRONICS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
ELECTRONICS 36.66% 87.03% 537.50% 551.69%
ELECTRONICS 32.56% 81.42% 518.38% 532.14%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
ELECTRONICS 87.03% 44.84% 20.62%
ELECTRONICS 81.42% 43.96% 20.25%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 115038 S00000000000001
Electronics S&P 500
00008 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9691.51 9781.00
1987/10/31 6398.78 7674.17
1987/11/30 5397.38 7041.82
1987/12/31 6212.07 7577.70
1988/01/31 5855.64 7896.72
1988/02/29 6475.15 8264.71
1988/03/31 6381.80 8009.33
1988/04/30 6670.34 8098.24
1988/05/31 6441.21 8168.69
1988/06/30 7069.20 8543.63
1988/07/31 6636.40 8511.17
1988/08/31 5974.45 8221.79
1988/09/30 6067.80 8572.04
1988/10/31 5626.51 8810.34
1988/11/30 5346.46 8684.35
1988/12/31 5685.91 8836.33
1989/01/31 5889.59 9483.15
1989/02/28 5804.72 9247.02
1989/03/31 5762.29 9462.47
1989/04/30 6212.07 9953.57
1989/05/31 6806.12 10356.69
1989/06/30 6135.70 10297.66
1989/07/31 6203.59 11227.54
1989/08/31 6415.75 11447.60
1989/09/30 6593.96 11400.66
1989/10/31 6296.94 11136.17
1989/11/30 6313.91 11363.35
1989/12/31 6576.99 11636.07
1990/01/31 6797.64 10855.29
1990/02/28 7340.77 10995.32
1990/03/31 7697.20 11286.70
1990/04/30 7731.15 11004.53
1990/05/31 8868.33 12077.47
1990/06/30 9004.11 11995.34
1990/07/31 8579.79 11956.96
1990/08/31 7238.93 10876.05
1990/09/30 6144.18 10346.39
1990/10/31 5923.53 10301.90
1990/11/30 6534.56 10967.40
1990/12/31 6958.96 11273.39
1991/01/31 7927.61 11764.91
1991/02/28 8624.36 12606.10
1991/03/31 9083.19 12911.17
1991/04/30 9134.17 12942.15
1991/05/31 9431.56 13501.25
1991/06/30 8284.48 12882.90
1991/07/31 8853.77 13483.24
1991/08/31 9219.14 13802.79
1991/09/30 8513.90 13572.29
1991/10/31 8930.25 13754.15
1991/11/30 8386.44 13199.86
1991/12/31 9414.57 14709.93
1992/01/31 10527.66 14436.32
1992/02/29 11105.45 14623.99
1992/03/31 10230.27 14338.83
1992/04/30 10034.84 14760.39
1992/05/31 10051.84 14832.71
1992/06/30 9321.10 14611.71
1992/07/31 9813.92 15209.33
1992/08/31 9915.89 14897.53
1992/09/30 10272.76 15073.32
1992/10/31 11045.97 15126.08
1992/11/30 11768.21 15641.88
1992/12/31 11997.63 15834.28
1993/01/31 12405.48 15967.28
1993/02/28 12133.58 16184.44
1993/03/31 12558.42 16525.93
1993/04/30 12337.05 16126.00
1993/05/31 13575.03 16558.18
1993/06/30 13822.62 16606.20
1993/07/31 14215.36 16539.77
1993/08/31 15436.26 17166.63
1993/09/30 15692.39 17034.45
1993/10/31 15393.57 17387.06
1993/11/30 15274.04 17221.88
1993/12/31 15846.44 17430.27
1994/01/31 16941.03 18022.90
1994/02/28 17744.40 17534.48
1994/03/31 17553.60 16769.97
1994/04/30 17503.39 16984.63
1994/05/31 17453.18 17263.18
1994/06/30 16519.26 16840.23
1994/07/31 16860.69 17392.59
1994/08/31 18507.60 18105.69
1994/09/30 17975.37 17662.10
1994/10/31 18708.44 18059.49
1994/11/30 18467.43 17401.77
1994/12/31 18567.85 17659.84
1995/01/31 18035.62 18117.75
1995/02/28 19883.37 18823.80
1995/03/31 21931.96 19379.29
1995/04/30 24382.23 19950.01
1995/05/31 26159.68 20747.42
1995/06/30 29885.30 21229.38
1995/07/31 34354.04 21933.35
1995/08/31 34805.94 21988.40
1995/09/30 35428.55 22916.31
1995/10/31 34454.46 22834.50
1995/11/30 33590.84 23836.93
1995/12/31 31373.78 24296.03
1996/01/31 32434.20 25123.07
1996/02/29 34347.83 25355.96
1996/03/31 32336.69 25600.14
1996/04/30 36029.88 25977.48
1996/05/31 36980.60 26647.44
1996/06/30 33872.47 26748.97
1996/07/31 32239.18 25567.20
1996/08/31 33799.34 26106.41
1996/09/30 38357.93 27575.68
1996/10/31 38662.64 28336.22
1996/11/30 44464.48 30478.15
1996/12/31 44464.48 29874.38
1997/01/31 51412.05 31740.93
1997/02/28 46256.22 31989.78
1997/03/31 43038.40 30675.32
1997/04/30 47048.84 32506.64
1997/05/31 52218.45 34485.64
1997/06/30 51897.03 36030.60
1997/07/31 60910.37 38897.55
1997/08/29 63200.53 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 115051 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Electronics Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$63,214 - a 532.14% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
COMPAQ COMPUTER CORP. 8.0
TERADYNE, INC. 6.8
MICRON TECHNOLOGY, INC. 5.5
WESTERN DIGITAL CORP. 4.0
INTEL CORP. 3.4
KLA-TENCOR CORP. 3.1
TEXAS INSTRUMENTS, INC. 3.1
VLSI TECHNOLOGY, INC. 2.8
APPLIED MATERIALS, INC. 2.2
DELL COMPUTER CORP. 2.1
TOP INDUSTRIES AS OF AUGUST 31, 1997
SEMICONDUCTORS 30.0%
ELECTRONIC EQUIPMENT 12.2%
MINI & MICRO COMPUTERS 11.0%
COMPUTER PERIPHERALS 6.6%
SEMI-CONDUCTOR CAPITAL
EQUIPMENT 6.1%
ALL OTHERS 34.1%
ROW: 1, COL: 1, VALUE: 34.1
ROW: 1, COL: 2, VALUE: 6.1
ROW: 1, COL: 3, VALUE: 6.6
ROW: 1, COL: 4, VALUE: 11.0
ROW: 1, COL: 5, VALUE: 12.2
ROW: 1, COL: 6, VALUE: 30.0
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
ELECTRONICS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Andrew Kaplan,
Portfolio Manager of
Fidelity Select Electronics Portfolio
Q. HOW DID THE FUND PERFORM, ANDY?
A. During the six months that ended August 31, 1997, the fund
generated a return of 36.66%, outperforming the 14.78% return of the
broader Standard & Poor's 500 Index. For the 12 months that ended
August 31, 1997, the fund returned 87.03%, compared to the 40.65%
return of the S&P 500.
Q. WHAT CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
A. In the first half of 1997, I invested some of the fund's assets in
semiconductor capital equipment companies, hopeful that these stocks
would stage a recovery after a downturn that lasted from late 1995
until early 1997. Several of these stocks - such as Applied Materials
and KLA Tencor - rebounded so much that I would call them monumental
outperformers. This happened for a few key reasons. This is a cyclical
business, but I determined that these companies improved their
business models so that margins at the bottom of a downturn weren't
hit as hard by lost revenues as we've seen in previous cycles. For
example, the companies are outsourcing more often, which lowers fixed
costs and, in turn, allows for better margins when sales slow. In
addition, there is more concentration in the industry among the lead
players, so there's less pricing pressure. Considering margins would
be less hurt by downturns, I recognized that investors may start
treating these companies less like cyclicals and more like growth
stocks - eventually causing a revaluation of the multiples. My wish
came true and we saw a big upward revaluation in the first half of the
year.
Q. COMPAQ WAS THE FUND'S TOP POSITION AT THE END OF THE PERIOD,
REPRESENTING 8% OF THE PORTFOLIO. WHAT DID YOU FIND ATTRACTIVE ABOUT
THIS STOCK?
A. I was bullish about PC makers and, specifically, I thought Compaq
was starting to emulate Dell Computer, which has been the best
performer in that sector over the past year. The company is managing
its balance sheet better, which led to improved returns and a
better-performing stock. Overall, the PC market is starting to divide
itself into the haves and have-nots. In this environment, good
executors - such as Compaq and Dell - are devouring the market share
of their competitors at a rapid rate.
Q. WERE THERE ANY OTHER STOCKS THAT STOOD OUT DURING THE PERIOD?
A. Texas Instruments was a company-specific turnaround story.
Historically, the company has been involved in dozens of different
businesses - a lot of which weren't earning the return on capital that
could be derived from its high-value-added semiconductor operations.
About a year ago, the company's new management indicated a
determination to divest non-core businesses and improve returns. The
company has sold off several operations, such as its defense business,
and refocused on semiconductors, improving its return on capital. The
market started to recognize these improvements and boosted the
company's share price during the period.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Atmel, a provider of non-volatile memory in the communications
sector, was the fund's second-largest holding at the beginning of the
six-month period. Non-volatile memory chips retain information even
when a PC's power is off. The entire non-volatile memory market
suffered a period of oversupply in the spring. I mis-estimated the
supply and demand imbalance, thinking that Atmel would benefit from
its focus on communications applications. The company actually
reported lower-than-expected earnings as a result of the general
oversupply and its stock suffered, so I reduced that position by the
end of the period.
Q. WHAT'S YOUR SHORT-TERM OUTLOOK FOR THE ELECTRONICS MARKET?
A. Both PC retailers and manufacturers are optimistic that they are
hitting the right price points with desirable products, which usually
has a good effect up and down the technology supply chain. After all,
if PC makers sell lots of computers during the Christmas shopping
season, then the component suppliers and equipment makers will
benefit, too. Clearly, valuations are higher than they were six months
ago, so I'm not looking for the same dramatic upside that we saw
during the past year. However, the demand in the end-market looks
healthy, so I feel these stocks should continue to perform reasonably
well in the near term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 008
TRADING SYMBOL: FSELX
SIZE: as of August 31, 1997, more than
$2.8 billion
MANAGER: Andrew Kaplan, since August 1996;
analyst, semiconductor equipment companies and
producers, since 1995; joined Fidelity in 1995
(checkmark)
ELECTRONICS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.1%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.0%
AIRCRAFT ENGINES & PARTS - 0.0%
Doncasters PLC sponsored ADR 37,500 $ 965,625 25769210
COMMUNICATIONS EQUIPMENT - 5.5%
DATACOMMUNICATIONS EQUIPMENT - 1.1%
Level One Communications, Inc. (a) 879,750 31,341,094 52729510
TELEPHONE EQUIPMENT - 4.4%
Advanced Fibre Communication, Inc. 22,500 1,400,625 00754A10
Andrew Corp. (a) 1,000,000 24,875,000 03442510
DSP Communications, Inc. 1,155,100 22,235,675 23332K10
Dialogic Corp. (a) 97,400 3,896,000 25249910
Ericsson (L.M.) Telephone Co.
Class B ADR 600,000 25,012,500 29482140
Lucent Technologies, Inc. 81,300 6,331,238 54946310
Matsushita Communication
Industrial Co. Ltd. 600,000 19,519,868 57688099
Newbridge Networks Corp. (a) 228,500 10,396,750 65090110
Nokia Corp. AB sponsored ADR 263,200 20,398,000 65490220
134,065,656
TOTAL COMMUNICATIONS EQUIPMENT 165,406,750
COMPUTER SERVICES & SOFTWARE - 6.6%
CAD/CAM/CAE - 0.7%
Synopsys, Inc. (a) 636,800 22,049,200 87160710
CUSTOM COMPUTER PROGRAMMING SERVICES - 1.0%
Saville Systems Ireland PLC
sponsored ADR 450,000 30,093,750 80517410
PREPACKAGED COMPUTER SOFTWARE - 4.9%
Advent Software, Inc. (a) 112,000 2,968,000 00797410
Advant Corp. (a)(c) 1,480,000 43,012,500 05348710
BMC Software, Inc. (a) 200,000 12,525,000 05592110
Cadence Design Systems, Inc. (a) 932,300 44,342,519 12738710
Citrix Systems, Inc. (a) 600,000 30,300,000 17737610
Electronics for Imaging, Inc. (a) 100,600 5,382,100 28608210
Midway Games, Inc. (a) 181,200 3,827,850 59814810
Oracle Corp. (a) 108,150 4,123,219 68389X10
146,481,188
TOTAL COMPUTER SERVICES & SOFTWARE 198,624,138
COMPUTERS & OFFICE EQUIPMENT - 21.6%
COMPUTER PERIPHERALS - 6.6%
Creative Technology Corp. Ltd. (a) 1,632,200 31,419,850 22599992
EMC Corp. (a) 750,000 38,484,375 26864810
Galileo Technology Ltd. (c) 276,300 8,599,838 36399N22
Western Digital Corp. 2,499,200 120,274,000 95810210
198,778,063
COMPUTER STORAGE DEVICES - 3.2%
Iomega Corp. (a) 400,000 10,250,000 46203010
Quantum Corp. 1,360,500 47,702,531 74790610
Read-Rite Corp. 737,600 21,159,900 75524610
Sandisk Corp. (a) 284,900 7,727,913 80004C10
Trident Microsystems, Inc. (a) 601,200 10,746,450 89591910
97,586,794
COMPUTERS & OFFICE EQUIPMENT - 0.7%
Fujitsu Ltd. 1,500,000 17,880,795 35959010
International Business Machines Corp. 41,600 4,196,400 45920010
22,077,195
MAGNETIC & OPTICAL RECORDING MEDIA - 0.1%
HMT Technology Corp. 117,500 1,962,497 40391710
SHARES VALUE (NOTE 1)
MINI & MICRO COMPUTERS - 11.0%
Compaq Computer Corp. (a) 3,707,500 $ 242,841,250 20449310
Dell Computer Corp. (a) 766,200 62,876,288 24702510
Sequent Computer Systems, Inc. (a) 932,900 26,296,119 81733810
332,013,657
TOTAL COMPUTERS & OFFICE EQUIPMENT 652,418,206
CONSUMER ELECTRONICS - 0.9%
RADIOS, TELEVISIONS, STEREOS - 0.9%
Philips Electronics NV 400,000 28,650,000 71833750
DEFENSE ELECTRONICS - 0.1%
Remec, Inc. (a) 60,300 2,012,513 75954310
ELECTRICAL EQUIPMENT - 1.7%
ELECTRICAL EQUIPMENT, NEC - 0.9%
Vicor Corp. (a) 1,115,600 28,029,450 92581510
ELECTRICAL MACHINERY - 0.7%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 900,000 22,162,500 01390430
TV & RADIO COMMUNICATION EQUIPMENT - 0.1%
Ortel Corp. 65,000 1,535,625 68749W10
TOTAL ELECTRICAL EQUIPMENT 51,727,575
ELECTRONIC INSTRUMENTS - 19.9%
ELECTRONIC EQUIPMENT - 12.2%
Advantest Corp. 400,000 36,423,842 00799010
Aetrium, Inc. (a) 192,800 4,651,300 00817R10
Anadigics, Inc. 198,900 9,845,550 03251510
Cohu, Inc. 461,500 25,844,000 19257610
Credence Systems Corp. (a) 365,500 17,201,344 22530210
Helix Technology Corp. (c) 533,200 31,858,700 42331910
LTX Corp. 323,600 2,558,463 50239210
Sawtek, Inc. (a) 475,200 18,711,000 80546810
Smart Modular Technologies, Inc. (a) 257,300 15,180,700 83169010
Teradyne, Inc. (a) 3,671,100 204,434,381 88077010
366,709,280
INDUSTRIAL MEASUREMENT INSTRUMENTS - 0.1%
ADE Corp. 49,100 2,013,100 00089C10
MEASURING INSTRUMENTS - 0.7%
Perkin-Elmer Corp. 286,700 21,215,800 71404110
OPTICAL INSTRUMENTS - 0.8%
Cognex Corp. (a) 669,500 25,608,375 19242210
SEMI-CONDUCTOR CAPITAL EQUIPMENT - 6.1%
Applied Materials, Inc. (a) 690,000 65,118,750 03822210
Lam Research Corp. (a) 83,527 4,719,270 51280710
KLA-Tencor Corp. 1,323,800 93,824,325 48248010
Novellus Systems, Inc. (a) 184,200 21,113,925 67000810
184,776,270
TOTAL ELECTRONIC INSTRUMENTS 600,322,825
ELECTRONICS - 31.2%
CONNECTORS - 0.0%
PCD, Inc. 15,000 270,000 69318P10
ELECTRONIC CAPACITORS - 0.1%
KEMET Corp. (a) 56,800 1,654,300 48836010
ELECTRONICS & ELECTRONIC COMPONENTS - 0.9%
Advanced Energy Industries, Inc. 167,500 5,276,250 00797310
Sanmina Corp. (a) 65,000 5,151,250 80090710
Solectron Corp. (a) 101,600 4,254,500 83418210
TDK Corp. 150,000 11,498,345 87235110
26,180,345
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - CONTINUED
PRINTED CIRCUIT BOARDS - 0.2%
DII Group, Inc. 124,900 $ 6,838,275 23294910
SEMICONDUCTORS - 30.0%
Actel Corp. (a) 628,300 12,762,344 00493410
Altera Corp. (a) 407,000 21,672,750 02144110
Analog Devices, Inc. 177,000 5,863,125 03265410
Atmel Corp. (a) 242,000 8,560,750 04951310
Benchmarq Microelectronics, Inc. (a) 246,700 7,647,700 08160310
Burr-Brown Corp. (a) 200,000 7,100,000 12257410
C-Cube Microsystems, Inc. 400,000 12,000,000 12501510
CFM Technologies, Inc. (a) 110,500 3,577,438 12525K10
Electroglas, Inc. (a) 728,500 23,312,000 28532410
Integrated Circuit Systems, Inc. 74,400 2,566,800 45811K10
Integrated Device Technology, Inc. (a) 200,000 2,725,000 45811810
Intel Corp. 1,110,000 102,258,750 45814010
International Rectifier Corp. (a)(c) 2,643,200 60,298,000 46025410
Lattice Semiconductor Corp. (a) 686,000 43,689,625 51841510
Linear Technology Corp. 229,310 15,034,137 53567810
MEMC Electronic Materials, Inc. (a) 282,100 8,180,900 55271510
Maxim Integrated Products, Inc. (a) 395,700 27,352,763 57772K10
Micrel, Inc. 30,000 1,072,500 59479310
Microchip Technology, Inc. (a) 301,600 12,195,950 59501710
Micron Technology, Inc. (a) 3,752,800 167,234,150 59511210
PMC-Sierra, Inc. (a) 324,500 9,309,094 69344F10
QLogic Corp. 240,000 9,420,000 74727710
Semtech Corp. 158,400 9,365,400 81685010
Sipex Corp. (a) 186,800 5,277,100 82990910
Speedfam International, Inc. (a) 225,700 12,385,288 84770610
3D Labs, Inc. Ltd. 275,000 10,896,875 92199N22
Texas Instruments, Inc. 822,600 93,467,925 88250810
Transwitch Corp. 208,000 2,379,000 89406510
Triquint Semiconductor, Inc. (a) 185,900 6,878,300 89674K10
Uniphase Corp. (a) 62,200 4,245,150 90914910
Unitrode Corp. (a)(c) 731,700 57,072,600 91328310
VLSI Technology, Inc. (a)(c) 2,582,100 85,209,300 91827010
Vitesse Semiconductor Corp. (a) 983,350 46,340,369 92849710
Xilinx, Inc. (a) 28,200 1,339,500 98391910
Zilog, Inc. (a) 332,000 8,134,000 98952410
906,824,583
TOTAL ELECTRONICS 941,767,503
ENGINEERING - 0.6%
ARCHITECTS & ENGINEERS - 0.6%
DSP Group, Inc. (c) 558,000 17,088,750 23332B10
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
SPECIAL INDUSTRIAL MACHINERY, NEC - 2.0%
ASM Lithography Holding NV (a) 597,200 50,762,000 04599S23
Gasonics International Corp. (a) 467,800 8,303,450 36727810
59,065,450
PUBLISHING - 0.0%
GENERAL PUBLISHING - 0.0%
Applied Graphics Technologies 22,500 928,125 03793710
TOTAL COMMON STOCKS
(Cost $2,351,912,642) 2,718,977,460
CASH EQUIVALENTS - 9.9%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $299,087,293) 299,087,293 $299,087,293 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,650,999,935) $ 3,018,064,753
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements)
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $4,086,040,135 and $3,671,526,472, respectively (see Note 3
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 $520,131 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $76,286,950 and $80,452,900, respectively (see Note 6 of
Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and average daily balance during the period for which the loan was
outstanding amounted to $10,536,000 and $9,468,000, respectively. The
weighted average interest rate was 5.8%. (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 89.3%
Japan 2.8
Netherlands 2.6
Singapore 1.0
Ireland 1.0
Others (individually less than 1%) 3.3
TOTAL 100.0%
Transactions during the period with companies that are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Actel Corp. $ 12,337,016 $ 14,094,480 $ - $ -
Advant Corp. 6,120,392 - - 43,012,500
DSP Group, Inc. 383,252 - - 17,088,750
Galileo Technology Ltd. 682,365 - - 8,599,838
Helix Technology Corp. 9,431,309 6,797,837 221,620 31,858,700
International Rectifier Corp. 1,467,778 - - 60,298,000
Micrel, Inc. 14,215,494 16,008,213 - -
Photronics, Inc. - 4,435,876 - -
Sipex Corp. 9,793,050 13,095,651 - -
Triquint Semiconductor, Inc. 8,204,770 10,899,837 - -
Unitrode Corp. 14,733,708 4,974,109 - 57,072,600
VLSI Technology, Inc. 6,136,387 - - 85,209,300
Zilog, Inc. - 1,546,962 - -
TOTALS $ 83,505,521 $ 71,852,965 $ 221,620 $ 303,139,688
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $2,651,435,193. Net unrealized appreciation
aggregated $366,629,560, of which $408,668,693 related to appreciated
investment securities and $42,039,133 related to depreciated
investment securities.
ELECTRONICS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 3,018,064,753
SECURITIES, AT
VALUE
(COST
$2,650,999,
935) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 2,354,784
RECEIVABLE FOR 72,278,541
INVESTMENTS
SOLD
RECEIVABLE FOR 30,489,266
FUND SHARES
SOLD
DIVIDENDS 200,314
RECEIVABLE
INTEREST 1,291,472
RECEIVABLE
REDEMPTION FEES 24,199
RECEIVABLE
OTHER 54,685
RECEIVABLES
TOTAL ASSETS 3,124,758,014
LIABILITIES
PAYABLE FOR $ 121,881,575
INVESTMENTS
PURCHASED
PAYABLE FOR 23,617,350
FUND SHARES
REDEEMED
ACCRUED 1,381,147
MANAGEMENT
FEE
OTHER PAYABLES 1,355,483
AND
ACCRUED
EXPENSES
COLLATERAL ON 80,452,900
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 228,688,455
NET ASSETS $ 2,896,069,559
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 2,086,684,068
ACCUMULATED (4,234,085)
NET INVESTMENT
(LOSS)
ACCUMULATED 446,554,758
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 367,064,818
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 2,896,069,559
61,360,151
SHARES
OUTSTANDING
NET ASSET $47.20
VALUE AND
REDEMPTION
PRICE PER
SHARE
($2,896,069,
559 (DIVIDED BY)
61,360,151
SHARES)
MAXIMUM $48.66
OFFERING PRICE
PER SHARE
(100/97.00
OF $47.20)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 1,621,776
INCOME
DIVIDENDS
(INCLUDING
$221,620
RECEIVED FROM
AFFILIATED
ISSUERS)
INTEREST 6,228,315
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$168,046)
TOTAL INCOME 7,850,091
EXPENSES
MANAGEMENT $ 6,355,784
FEE
TRANSFER AGENT 5,317,887
FEES
ACCOUNTING AND 408,097
SECURITY
LENDING FEES
NON-INTERESTED 4,313
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 58,321
AND EXPENSES
REGISTRATION FEES 349,249
AUDIT 38,459
LEGAL 3,393
INTEREST 3,064
MISCELLANEOUS 7,475
TOTAL EXPENSES 12,546,042
BEFORE
REDUCTIONS
EXPENSE (461,866) 12,084,176
REDUCTIONS
NET INVESTMENT (4,234,085)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 452,168,765
SECURITIES
(INCLUDING
REALIZED GAIN
OF
$10,888,545
ON SALE OF
INVESTMENTS IN
AFFILIATED
ISSUERS)
FOREIGN 95 452,168,860
CURRENCY
TRANSACTIONS
CHANGE IN NET 221,863,638
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 674,032,498
NET INCREASE $ 669,798,413
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 9,049,728
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 5,784
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 260,528
WITHHELD BY
FSC
EXPENSE $ 443,065
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 12,176
CREDITS
TRANSFER 6,625
AGENT CREDITS
$ 461,866
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (4,234,085) $ (6,964,256)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 452,168,860 272,103,872
GAIN (LOSS)
CHANGE IN NET 221,863,638 64,022,840
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 669,798,413 329,162,456
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (143,127,869) -
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 1,768,596,559 2,439,060,498
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 140,892,552 -
OF
DISTRIBUTIONS
COST OF SHARES (1,287,468,408) (2,163,322,518)
REDEEMED
REDEMPTION 3,361,799 5,754,283
FEES
NET INCREASE 625,382,502 281,492,263
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 1,152,053,046 610,654,719
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 1,744,016,513 1,133,361,794
PERIOD
END OF PERIOD 2,896,069,559 1,744,016,513
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$4,234,085
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 44,239,799 73,288,709
ISSUED IN 4,282,459 -
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (33,119,535) (67,555,816)
NET INCREASE 15,402,723 5,732,893
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 37.95 $ 28.18 $ 19.80 $ 17.67 $ 14.28 $ 11.81
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.08) (.17) (.08) (.18) (.09) (.05)
INVESTMENT
INCOME (LOSS) D
NET REALIZED 12.52 9.80 13.51 2.11 6.09 2.33
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 12.44 9.63 13.43 1.93 6.00 2.28
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (3.25) - (5.25) - (2.75) -
REALIZED GAIN
REDEMPTION FEES .06 .14 .20 .20 .14 .19
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 47.20 $ 37.95 $ 28.18 $ 19.80 $ 17.67 $ 14.28
END OF PERIOD
TOTAL RETURN B, C 36.66% 34.67% 72.75% 12.05% 46.24% 20.91%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 2,896,070 $ 1,744,017 $ 1,133,362 $ 216,433 $ 110,993 $ 48,027
OF PERIOD
(000 OMITTED)
RATIO OF 1.17% A 1.33% 1.25% 1.72% 1.67% 1.69% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.13% A, E 1.29% E 1.22% E 1.71% E 1.67% 1.69% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.40)% A (.54)% (.28)% (.98)% (.52)% (.50)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 378% A 341% 366% 205% 163% 293% A
TURNOVER RATE
AVERAGE $ .0427 $ .0421
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the past 10 year total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
SOFTWARE AND 21.58% 42.08% 260.62% 427.84%
COMPUTER SERVICES
SOFTWARE AND 17.93% 37.81% 249.80% 412.01%
COMPUTER SERVICES
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
SOFTWARE AND COMPUTER SERVICES 42.08% 29.24% 18.10%
SOFTWARE AND COMPUTER SERVICES 37.81% 28.46% 17.74%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970916 120940 S00000000000001
Software/Computer Svcs S&P 500
00028 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9802.67 9781.00
1987/10/31 7208.80 7674.17
1987/11/30 6522.51 7041.82
1987/12/31 7481.30 7577.70
1988/01/31 7265.11 7896.72
1988/02/29 7862.47 8264.71
1988/03/31 7930.74 8009.33
1988/04/30 8169.69 8098.24
1988/05/31 7947.81 8168.69
1988/06/30 8573.62 8543.63
1988/07/31 8146.93 8511.17
1988/08/31 7583.70 8221.79
1988/09/30 8072.97 8572.04
1988/10/31 7646.28 8810.34
1988/11/30 7532.50 8684.35
1988/12/31 8158.31 8836.33
1989/01/31 8767.06 9483.15
1989/02/28 8374.50 9247.02
1989/03/31 8169.69 9462.47
1989/04/30 8960.49 9953.57
1989/05/31 9284.77 10356.69
1989/06/30 8365.24 10297.66
1989/07/31 8118.33 11227.54
1989/08/31 8488.69 11447.60
1989/09/30 8659.16 11400.66
1989/10/31 8841.40 11136.17
1989/11/30 9100.06 11363.35
1989/12/31 9141.32 11636.07
1990/01/31 8816.35 10855.29
1990/02/28 9045.04 10995.32
1990/03/31 9406.12 11286.70
1990/04/30 9376.03 11004.53
1990/05/31 10555.55 12077.47
1990/06/30 10802.29 11995.34
1990/07/31 9815.34 11956.96
1990/08/31 8443.24 10876.05
1990/09/30 7474.34 10346.39
1990/10/31 7624.79 10301.90
1990/11/30 8605.72 10967.40
1990/12/31 9219.56 11273.39
1991/01/31 10573.61 11764.91
1991/02/28 11343.91 12606.10
1991/03/31 11987.83 12911.17
1991/04/30 11897.56 12942.15
1991/05/31 12114.21 13501.25
1991/06/30 11226.33 12882.90
1991/07/31 11915.95 13483.24
1991/08/31 12884.08 13802.79
1991/09/30 12459.70 13572.29
1991/10/31 13083.02 13754.15
1991/11/30 11650.71 13199.86
1991/12/31 13446.25 14709.93
1992/01/31 15604.54 14436.32
1992/02/29 16073.44 14623.99
1992/03/31 15301.14 14338.83
1992/04/30 14914.99 14760.39
1992/05/31 15149.44 14832.71
1992/06/30 14328.87 14611.71
1992/07/31 15342.51 15209.33
1992/08/31 14197.86 14897.53
1992/09/30 15225.29 15073.32
1992/10/31 16452.69 15126.08
1992/11/30 17886.96 15641.88
1992/12/31 18224.84 15834.28
1993/01/31 19162.63 15967.28
1993/02/28 19045.40 16184.44
1993/03/31 19452.24 16525.93
1993/04/30 19124.87 16126.00
1993/05/31 21281.87 16558.18
1993/06/30 22379.84 16606.20
1993/07/31 21702.37 16539.77
1993/08/31 23166.33 17166.63
1993/09/30 23633.55 17034.45
1993/10/31 23579.04 17387.06
1993/11/30 22995.01 17221.88
1993/12/31 24189.98 17430.27
1994/01/31 25032.90 18022.90
1994/02/28 25366.55 17534.48
1994/03/31 22644.63 16769.97
1994/04/30 22761.78 16984.63
1994/05/31 20483.83 17263.18
1994/06/30 18686.38 16840.23
1994/07/31 19602.90 17392.59
1994/08/31 21729.58 18105.69
1994/09/30 22717.29 17662.10
1994/10/31 24114.32 18059.49
1994/11/30 23562.63 17401.77
1994/12/31 24283.39 17659.84
1995/01/31 23882.97 18117.75
1995/02/28 25867.28 18823.80
1995/03/31 27344.40 19379.29
1995/04/30 28198.63 19950.01
1995/05/31 28963.88 20747.42
1995/06/30 31526.58 21229.38
1995/07/31 33430.82 21933.35
1995/08/31 33662.17 21988.40
1995/09/30 35050.30 22916.31
1995/10/31 35468.52 22834.50
1995/11/30 36474.02 23836.93
1995/12/31 35517.91 24296.03
1996/01/31 34155.69 25123.07
1996/02/29 36259.12 25355.96
1996/03/31 35337.61 25600.14
1996/04/30 38895.18 25977.48
1996/05/31 40251.38 26647.44
1996/06/30 38242.95 26748.97
1996/07/31 35302.78 25567.20
1996/08/31 36037.82 26106.41
1996/09/30 40748.31 27575.68
1996/10/31 40893.25 28336.22
1996/11/30 44133.65 30478.15
1996/12/31 43248.39 29874.38
1997/01/31 46719.61 31740.93
1997/02/28 42113.14 31989.78
1997/03/31 39951.82 30675.32
1997/04/30 42294.79 32506.64
1997/05/31 45875.92 34485.64
1997/06/30 45899.32 36030.60
1997/07/31 51446.56 38897.55
1997/08/29 51200.80 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970916 120944 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Software and Computer Services Portfolio
on August 31, 1987, and the current maximum 3% sales charge was paid.
As the chart shows, by August 31, 1997, the value of the investment
would have grown to $51,201 - a 412.01% increase on the initial
investment. For comparison, look at how the S&P 500 did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
MICROSOFT CORP. 9.4
ORACLE CORP. 5.5
BMC SOFTWARE, INC. 5.1
PEOPLESOFT, INC. 4.8
ELECTRONICS FOR IMAGING, INC. 4.3
COMPAQ COMPUTER CORP. 4.1
SUNGARD DATA SYSTEMS, INC. 3.8
TEXAS INSTRUMENTS, INC. 3.5
DELL COMPUTER CORP. 3.0
NETSCAPE COMMUNICATIONS CORP. 2.5
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 29.7
ROW: 1, COL: 2, VALUE: 3.1
ROW: 1, COL: 3, VALUE: 5.1
ROW: 1, COL: 4, VALUE: 7.1
ROW: 1, COL: 5, VALUE: 9.1
ROW: 1, COL: 6, VALUE: 45.9
PREPACKAGED COMPUTER
SOFTWARE 45.9%
SEMICONDUCTORS 9.1%
MINI & MICRO COMPUTERS 7.1%
COMPUTER SERVICES 5.1%
DATA PROCESSING 3.1%
ALL OTHERS 29.7%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: John Porter became Portfolio Manager of Fidelity
Select Software and Computer Services Portfolio on June 2, 1997.
Q. HOW DID THE FUND PERFORM, JOHN?
A. For the six months that ended on August 31, 1997, the fund had a
total return of 21.58%. For the 12 months, it returned 42.08%. For the
same periods, the Standard & Poor's 500 Index returned 14.78% and
40.65%, respectively.
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST SIX MONTHS
AND HOW DID IT AFFECT PERFORMANCE?
A. The environment for software and computer stocks improved
significantly toward the latter part of the six-month period. Through
March and early April, the overall market was concerned about
valuations of stocks as well as the prospects for specific companies.
This changed, however, as a number of companies reported very solid
earnings results for the first calendar quarter of 1997. From
mid-April on, the software and computer services area, with very few
exceptions, was very strong, and that's reflected in strong stock
performance for a number of companies with solid earnings. We have had
very strong market demand for software and computer services. Revenues
are growing at a 15-to-20% annual rate, much faster than the revenue
growth of the underlying S&P 500 companies. In the March-April period,
we had valuations that did not reflect this much-faster growth.
Earlier, the market had been concerned about the valuations of
companies such as Oracle and PeopleSoft, and their stocks wound up
being crushed. The stock prices came down to the level where they were
really fantastic opportunities and prices rebounded.
Q. THE FUND CONTINUES TO HAVE A MAJOR INVESTMENT IN MICROSOFT, WHICH
AT THE END OF THE PERIOD WAS ABOUT 9% OF TOTAL INVESTMENTS. HOW DID
THIS INVESTMENT AFFECT FUND PERFORMANCE?
A. Microsoft performed very well, continuing to outperform the overall
software market. This is largely reflective of Microsoft's
fundamentals, including revenues and earnings, which were much
stronger than expected. In April, the company reported results for the
March quarter that were, by any definition, fantastic. This
announcement proved to be a catalyst for the performance of the stock.
To a lesser extent, Microsoft also has benefited from a market that
has moved to blue chip companies.
Q. WHAT WERE THE BEST OPPORTUNITIES OVER THE PAST SIX MONTHS?
A. The whole enterprise-software area has been very strong. This
sector includes data base companies, primarily Oracle, as well as
companies that produce software for mission-critical areas, such as
financial or human resource operations. Strong performers in this area
have included PeopleSoft; SAP AG, a German holding company; Computer
Associates; and BMC Software.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The only disappointing area - and this was a common theme across
the market - was in the small-cap stock area. There were a number of
attractive stories among small-cap companies, but the market has not
fully appreciated them, and the stocks have been mediocre performers.
Q. WHAT IS YOUR OUTLOOK?
A. I am very upbeat about software and computer services. There is a
very strong secular outlook for a continued healthy, 15% compounded
annual growth rate for information technology budgets, and the
computer services segment is going to get an ever-increasing piece of
that pie. Software companies continue to roll out new products with
high returns that are good investments for corporations as they reduce
complexity and enhance productivity. Probably the one concern in
software is corporate spending to deal with the "year 2000 problem." A
lot of existing software is written for two-digit dates, and not for
four-digit dates. Companies are spending very aggressively to buy new
software or to fix old software, and the concern is that today's
spending may be cannibalizing the spending of two years from now. One
concern in computer services is that intensive competition has
tightened the profit margins of some companies, particularly those
competing for large contracts. However, the fundamental outlook still
is very strong for both software and computer services.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 028
TRADING SYMBOL: FSCSX
SIZE: as of August 31, 1997, more than
$450 million
MANAGER: John Porter, since June 1997;
manager, Fidelity Select Multimedia Portfolio,
since 1996; joined Fidelity in 1995
(checkmark)
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 88.9%
SHARES VALUE (NOTE 1)
COMMUNICATIONS EQUIPMENT - 2.1%
TELEPHONE EQUIPMENT - 2.1%
Ericsson (L.M.) Telephone Co.
Class B ADR 20,000 $ 833,750 29482140
Nokia Corp. AB sponsored ADR 115,400 8,943,500 65490220
9,777,250
COMPUTER SERVICES & SOFTWARE - 58.8%
CAD/CAM/CAE - 2.4%
Cambridge Technology Partners
Massachusetts, Inc. (a) 150,000 4,837,500 13252410
JDA Software Group, Inc. (a) 30,000 937,500 46612K10
Parametric Technology Corp. (a) 119,700 5,558,569 69917310
11,333,569
COMPUTER & SOFTWARE STORES - 1.1%
CompUSA, Inc. (a) 162,600 5,030,438 20493210
COMPUTER SERVICES - 5.1%
Bisys Group, Inc. (The) (a) 100,000 3,375,000 05547210
Electronic Data Systems Corp. 29,600 1,119,250 28566110
Paychex, Inc. 35,625 1,220,156 70432610
SunGard Data Systems, Inc. (a) 335,100 17,467,088 86736310
Technology Solutions, Inc. (a) 30,000 697,500 87872T10
23,878,994
DATA PROCESSING - 3.1%
Automatic Data Processing, Inc. 140,000 6,378,750 05301510
Fiserv, Inc. (a) 180,000 8,100,000 33773810
14,478,750
ELECTRONIC INFORMATION RETRIEVAL - 1.2%
CUC International, Inc. (a) 140,000 3,290,000 12654510
Galileo International, Inc. 80,000 2,115,000 36354710
5,405,000
PREPACKAGED COMPUTER SOFTWARE - 45.9%
Arbor Software Corp. (a) 25,900 1,026,288 03891810
BMC Software, Inc. (a) 379,800 23,784,975 05592110
Business Objects SA sponsored ADR (a) 379,900 2,991,713 12328X10
Cadence Design Systems, Inc. (a) 144,100 6,853,750 12738710Citrix
Systems, Inc. 150,000 7,575,000 17737610
Computer Associates International, Inc. 26,100 1,745,438 20491210
Eidos PLC sponsored ADR 146,000 1,113,250 28248510
Electronic Arts, Inc. (a) 59,152 1,822,621 28551210
Electronics for Imaging, Inc. (a) 375,400 20,083,900 28608210
i2 Technologies, Inc. (a) 100,000 4,625,000 46575410
Mapix, Inc. 20,000 235,000 56491010
Manugistics Group, Inc. (a) 114,200 4,839,225 56501110
McAfee Associates, Inc. (a) 20,000 1,132,500 57905710
Microsoft Corp. (a) 330,900 43,740,844 59491810
Midway Games, Inc. (a) 98,700 2,085,038 59814810
Netscape Communications Corp. (a) 298,000 11,864,125 64114910
New Era of Networks, Inc. 24,000 330,000 64431210
Oracle Corp. (a) 675,600 25,757,250 68389X10
PeopleSoft, Inc. (a) 396,000 22,275,000 71271310
Policy Management Systems Corp. (a) 119,200 7,159,450 73110810
Remedy Corp. (a) 90,000 3,470,625 75954810
Scopus Technology, Inc. (a) 117,600 2,910,600 80917210
Segue Software, Inc. (a) 20,000 167,500 81580710
Siebel Systems, Inc. 174,100 6,289,363 82617010
Sybase, Inc. 45,000 838,125 87113010
Symantec Corp. (a) 100,000 2,406,250 87150310
SHARES VALUE (NOTE 1)
Vantive Corp. (a) 192,100 $ 5,859,050 92209110
Veritas Software Corp. (a) 11,072 698,920 92343610
213,680,800
TOTAL COMPUTER SERVICES & SOFTWARE 273,807,551
COMPUTERS & OFFICE EQUIPMENT - 11.8%
COMPUTER EQUIPMENT - WHOLESALE - 1.7%
CDW Computer Centers, Inc. (a) 25,700 1,872,888 12512910
Tech Data Corp. (a) 159,600 6,214,425 87823710
8,087,313
COMPUTER STORAGE DEVICES - 1.4%
Adaptec, Inc. 139,800 6,710,400 00651F10
COMPUTERS & OFFICE EQUIPMENT - 1.6%
International Business Machines Corp. 65,000 6,556,875 45920010
MICROS Systems, Inc. (a) 20,000 935,000 59490110
7,491,875
MINI & MICRO COMPUTERS - 7.1%
Compaq Computer Corp. (a) 288,750 18,913,125 20449310
Dell Computer Corp. (a) 170,000 13,950,625 24702510
32,863,750
TOTAL COMPUTERS & OFFICE EQUIPMENT 55,153,338
ELECTRONIC INSTRUMENTS - 1.7%
Teradyne, Inc. (a) 145,900 8,124,806 88077010
ELECTRONICS - 9.1%
SEMICONDUCTORS - 9.1%
Altera Corp. (a) 47,800 2,545,350 02144110
Intel Corp. 77,000 7,093,625 45814010
Intel Corp. warrants 3/14/98 (a) 23,000 1,647,375 45814014
LSI Logic Corp. (a) 40,000 1,287,500 50216110
Micron Technology, Inc. (a) 175,000 7,798,438 59511210
Texas Instruments, Inc. 145,000 16,475,625 88250810
VLSI Technology, Inc. (a) 20,000 660,000 91827010
Xilinx, Inc. (a) 100,000 4,750,000 98391910
42,257,913
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
SPECIAL INDUSTRIAL MACHINERY, NEC - 0.1%
ASM Lithography Holding NV (a) 5,000 425,000 04599S23
LODGING & GAMING - 1.1%
HOTELS, MOTELS, & TOURIST COURTS - 0.6%
HFS, Inc. 50,000 2,784,375 40418110
RACING & GAMING - 0.5%
WMS Industries, Inc. 87,100 2,150,281 92929710
TOTAL LODGING & GAMING 4,934,656
PUBLISHING - 0.7%
BOOK PUBLISHING & PRINTING - 0.7%
Cognizant Corp. 81,300 3,414,600 19244110
SERVICES - 3.5%
COMMERCIAL, ECONOMIC, SOCIAL & EDUCATIONAL
RESEARCH - 0.9%
Gartner Group, Inc. Class A (a) 155,000 4,097,813 36665110
MANAGEMENT CONSULTING SERVICES - 1.7%
Registry, Inc. (a) 169,700 7,784,988 75913U10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - CONTINUED
PERSONNEL SUPPLY SERVICES - 0.9%
AccuStaff, Inc. (a) 105,000 $ 2,789,063 00440110
Computer Horizons Corp. (a) 36,300 1,442,925 20590810
4,231,988
TOTAL SERVICES 16,114,789
TOTAL COMMON STOCKS
(Cost $332,709,757) 414,009,903
NONCONVERTIBLE PREFERRED STOCKS - 1.0%
COMPUTER SERVICES & SOFTWARE - 1.0%
PREPACKAGED COMPUTER SOFTWARE - 1.0%
SAP AG 20,000 4,600,498 80899893
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $4,833,043) 4,600,498
CASH EQUIVALENTS - 10.1%
Taxable Central Cash Fund (b)
(Cost $46,872,089) 46,872,089 46,872,089 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $384,414,889) $ 465,482,490
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $384,420,702 and $403,614,891, respectively (see Note 3 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 $44,528 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $19,889,489 and $20,300,500, respectively (see Note 6 of
Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $384,482,072. Net unrealized appreciation
aggregated $81,000,418, of which $89,039,311 related to appreciated
investment securities and $8,038,893 related to depreciated investment
securities.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 465,482,490
SECURITIES, AT
VALUE
(COST
$384,414,88
9) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 709,500
RECEIVABLE FOR 15,244,433
INVESTMENTS
SOLD
RECEIVABLE FOR 628,554
FUND SHARES
SOLD
DIVIDENDS 21,000
RECEIVABLE
INTEREST 257,203
RECEIVABLE
REDEMPTION FEES 1,425
RECEIVABLE
OTHER 105,377
RECEIVABLES
TOTAL ASSETS 482,449,982
LIABILITIES
PAYABLE FOR $ 8,749,856
INVESTMENTS
PURCHASED
PAYABLE FOR 2,170,409
FUND SHARES
REDEEMED
ACCRUED 228,872
MANAGEMENT
FEE
OTHER PAYABLES 366,073
AND
ACCRUED
EXPENSES
COLLATERAL ON 20,300,500
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 31,815,710
NET ASSETS $ 450,634,272
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 335,434,757
ACCUMULATED (1,578,281)
NET INVESTMENT
(LOSS)
ACCUMULATED 35,710,195
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 81,067,601
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 450,634,272
10,299,395
SHARES
OUTSTANDING
NET ASSET $43.75
VALUE AND
REDEMPTION
PRICE PER
SHARE
($450,634,2
72 (DIVIDED BY)
10,299,395
SHARES)
MAXIMUM $45.10
OFFERING PRICE
PER SHARE
(100/97.00
OF $43.75)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 121,940
INCOME
DIVIDENDS
INTEREST 1,351,065
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$542,405)
TOTAL INCOME 1,473,005
EXPENSES
MANAGEMENT $ 1,264,853
FEE
TRANSFER AGENT 1,523,008
FEES
ACCOUNTING AND 225,078
SECURITY
LENDING FEES
NON-INTERESTED 917
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 21,659
AND EXPENSES
REGISTRATION FEES 36,150
AUDIT 16,565
LEGAL 1,633
MISCELLANEOUS 3,877
TOTAL EXPENSES 3,093,740
BEFORE
REDUCTIONS
EXPENSE (42,454) 3,051,286
REDUCTIONS
NET INVESTMENT (1,578,281)
INCOME (LOSS)
REALIZED AND 38,095,197
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON
INVESTMENT
SECURITIES
CHANGE IN NET 45,714,184
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 83,809,381
NET INCREASE $ 82,231,100
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 673,530
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 3,621
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 60,825
WITHHELD BY
FSC
EXPENSE $ 34,649
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 7,805
CREDITS
$ 42,454
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (1,578,281) $ (2,797,099)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 38,095,197 61,210,968
GAIN (LOSS)
CHANGE IN NET 45,714,184 (9,105,850)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 82,231,100 49,308,019
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (24,600,090) (32,120,784)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 142,902,523 568,629,736
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 24,279,066 31,720,922
OF
DISTRIBUTIONS
COST OF SHARES (164,142,098) (566,265,440)
REDEEMED
REDEMPTION 264,915 793,106
FEES
NET INCREASE 3,304,406 34,878,324
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 60,935,416 52,065,559
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 389,698,856 337,633,297
PERIOD
END OF PERIOD $ 450,634,272 $ 389,698,856
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$1,578,281
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 3,627,845 14,976,546
ISSUED IN 711,794 840,597
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (4,140,406) (15,044,201)
NET INCREASE 199,233 772,942
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 38.58 $ 36.20 $ 29.07 $ 28.89 $ 27.62 $ 21.63
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.15) (.25) (.19) (.26) (.34) (.07) E
INVESTMENT
INCOME (LOSS) D
NET REALIZED 7.76 5.87 11.85 .67 7.92 5.88
AND
UNREALIZED
GAIN
TOTAL FROM 7.61 5.62 11.66 .41 7.58 5.81
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (2.46) (3.31) (4.60) (.33) (6.48) -
REALIZED GAIN
REDEMPTION FEES .02 .07 .07 .10 .17 .18
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 43.75 $ 38.58 $ 36.20 $ 29.07 $ 28.89 $ 27.62
END OF PERIOD
TOTAL RETURN B, C 21.58% 16.14% 40.17% 1.97% 33.19% 27.69%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 450,634 $ 389,699 $ 337,633 $ 236,445 $ 178,034 $ 151,212
OF PERIOD
(000 OMITTED)
RATIO OF 1.45% A 1.54% 1.48% 1.52% 1.57% 1.64% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.43% A, F 1.51% F 1.47% F 1.50% F 1.57% 1.64% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.74)% A (.66)% (.54)% (1.01)% (1.19)% (.37)% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 197% A 279% 183% 164% 376% 402% A
TURNOVER RATE
AVERAGE $ .0356 $ .0427
COMMISSION
RATE G
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). G
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
TECHNOLOGY PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
TECHNOLOGY 27.56% 61.98% 282.73% 343.90%
TECHNOLOGY 23.74% 57.12% 271.25% 330.59%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
TECHNOLOGY 61.98% 30.79% 16.07%
TECHNOLOGY 57.12% 30.00% 15.72%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 151130 S00000000000001
Technology S&P 500
00064 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9749.26 9781.00
1987/10/31 6318.90 7674.17
1987/11/30 5495.61 7041.82
1987/12/31 6291.69 7577.70
1988/01/31 5952.39 7896.72
1988/02/29 6542.47 8264.71
1988/03/31 6472.40 8009.33
1988/04/30 6719.49 8098.24
1988/05/31 6535.09 8168.69
1988/06/30 7136.23 8543.63
1988/07/31 6605.17 8511.17
1988/08/31 5996.65 8221.79
1988/09/30 6158.92 8572.04
1988/10/31 5904.45 8810.34
1988/11/30 5727.43 8684.35
1988/12/31 6122.04 8836.33
1989/01/31 6616.23 9483.15
1989/02/28 6435.52 9247.02
1989/03/31 6317.50 9462.47
1989/04/30 6774.81 9953.57
1989/05/31 7328.01 10356.69
1989/06/30 6678.93 10297.66
1989/07/31 6796.94 11227.54
1989/08/31 6944.46 11447.60
1989/09/30 7110.42 11400.66
1989/10/31 7058.79 11136.17
1989/11/30 7077.23 11363.35
1989/12/31 7162.05 11636.07
1990/01/31 7014.53 10855.29
1990/02/28 7409.15 10995.32
1990/03/31 7755.81 11286.70
1990/04/30 7405.46 11004.53
1990/05/31 8360.64 12077.47
1990/06/30 8434.40 11995.34
1990/07/31 7984.47 11956.96
1990/08/31 6896.52 10876.05
1990/09/30 6310.13 10346.39
1990/10/31 6490.84 10301.90
1990/11/30 7464.46 10967.40
1990/12/31 7914.40 11273.39
1991/01/31 9249.45 11764.91
1991/02/28 9717.82 12606.10
1991/03/31 10495.98 12911.17
1991/04/30 9979.66 12942.15
1991/05/31 10532.86 13501.25
1991/06/30 9511.05 12882.90
1991/07/31 10564.13 13483.24
1991/08/31 11083.25 13802.79
1991/09/30 11138.87 13572.29
1991/10/31 11439.22 13754.15
1991/11/30 11064.71 13199.86
1991/12/31 12581.63 14709.93
1992/01/31 13060.12 14436.32
1992/02/29 13264.12 14623.99
1992/03/31 12210.71 14338.83
1992/04/30 12032.66 14760.39
1992/05/31 12151.36 14832.71
1992/06/30 11282.65 14611.71
1992/07/31 11857.51 15209.33
1992/08/31 11250.26 14897.53
1992/09/30 11800.83 15073.32
1992/10/31 12497.14 15126.08
1992/11/30 13509.22 15641.88
1992/12/31 13679.25 15834.28
1993/01/31 14096.22 15967.28
1993/02/28 14015.26 16184.44
1993/03/31 14197.43 16525.93
1993/04/30 14156.72 16126.00
1993/05/31 15584.93 16558.18
1993/06/30 16346.05 16606.20
1993/07/31 15911.76 16539.77
1993/08/31 16762.42 17166.63
1993/09/30 17022.10 17034.45
1993/10/31 16686.31 17387.06
1993/11/30 16525.13 17221.88
1993/12/31 17598.37 17430.27
1994/01/31 18484.42 18022.90
1994/02/28 19006.96 17534.48
1994/03/31 18366.28 16769.97
1994/04/30 17996.36 16984.63
1994/05/31 18024.73 17263.18
1994/06/30 16497.45 16840.23
1994/07/31 17135.79 17392.59
1994/08/31 18942.04 18105.69
1994/09/30 18847.48 17662.10
1994/10/31 19552.01 18059.49
1994/11/30 19282.49 17401.77
1994/12/31 19556.74 17659.84
1995/01/31 18795.46 18117.75
1995/02/28 19883.00 18823.80
1995/03/31 21093.47 19379.29
1995/04/30 22683.31 19950.01
1995/05/31 23560.81 20747.42
1995/06/30 25749.68 21229.38
1995/07/31 28352.92 21933.35
1995/08/31 29230.42 21988.40
1995/09/30 30575.92 22916.31
1995/10/31 30117.67 22834.50
1995/11/30 29961.67 23836.93
1995/12/31 28123.93 24296.03
1996/01/31 28408.95 25123.07
1996/02/29 29965.61 25355.96
1996/03/31 27647.07 25600.14
1996/04/30 30027.95 25977.48
1996/05/31 30842.36 26647.44
1996/06/30 28648.44 26748.97
1996/07/31 25590.24 25567.20
1996/08/31 26581.94 26106.41
1996/09/30 29989.17 27575.68
1996/10/31 29773.10 28336.22
1996/11/30 33446.26 30478.15
1996/12/31 32572.63 29874.38
1997/01/31 36427.75 31740.93
1997/02/28 33754.32 31989.78
1997/03/31 31519.63 30675.32
1997/04/30 33356.89 32506.64
1997/05/31 36902.49 34485.64
1997/06/30 37582.01 36030.60
1997/07/31 41887.86 38897.55
1997/08/29 43058.52 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 151156 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Technology Portfolio on August 31, 1987,
and the current maximum 3% sales charge was paid. As the chart shows,
by August 31, 1997, the value of the investment would have grown to
$43,059 - a 330.59% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
COMPAQ COMPUTER CORP. 10.0
APPLIED MATERIALS, INC. 9.3
TERADYNE, INC. 5.9
ADVANTEST CORP. 5.2
KLA-TENCOR CORP. 2.7
LUCENT TECHNOLOGIES, INC. 2.6
LAM RESEARCH CORP. 1.7
READ-RITE CORP. 1.7
WESTERN DIGITAL CORP. 1.6
SILICON GRAPHICS, INC. 1.5
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 43.3
ROW: 1, COL: 2, VALUE: 4.7
ROW: 1, COL: 3, VALUE: 10.1
ROW: 1, COL: 4, VALUE: 13.6
ROW: 1, COL: 5, VALUE: 14.1
ROW: 1, COL: 6, VALUE: 14.2
SEMICONDUCTOR CAPITAL
EQUIPMENT 14.5%
ELECTRONIC EQUIPMENT 14.2%
SEMICONDUCTORS 13.6%
MINI & MICRO COMPUTERS 10.1%
TELEPHONE EQUIPMENT 4.7%
ALL OTHERS 42.9%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
TECHNOLOGY PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Adam Hetnarski, Portfolio Manager
of Fidelity Select
Technology Portfolio
Q. HOW DID THE FUND PERFORM, ADAM?
A. The fund performed very well. For the six months that ended August
31, 1997, the fund returned 27.56%, compared to a return of 14.78% by
the Standard & Poor's 500 Index. During the 12 months that ended
August 31, 1997, the fund generated a return of 61.98%, far outpacing
the 40.65% return of the S&P 500 over the same period.
Q. WHAT HELPED THE FUND OUTPERFORM THE S&P 500?
A. Being invested in the right stocks at the right time paid off for
the fund. For example, the fund was heavily overweighted in
semiconductor capital equipment companies during the period. These
companies reported robust order and revenue growth throughout the
first half of 1997, which helped the fund's performance. Conversely,
staying away from the wrong stocks at the right time also helped
performance. For instance, the fund was underweighted in networking
stocks when the companies in that sector imploded in March and April.
By that I mean pricing pressures surfaced in the industry and many
analysts cut first-quarter earnings estimates for several large
networking companies. I anticipated problems in the industry, so the
fund reduced its exposure to those stocks. Therefore, the fund's
performance wasn't hurt as much when the market dipped during those
months.
Q. HOW WOULD YOU DESCRIBE THE INVESTING ENVIRONMENT DURING THE PERIOD?
A. The stock market achieved substantial gains over the past 12
months, largely fueled by a narrow group of the larger-cap stocks at
the top of the S&P 500 Index. Several of the best-performing stocks in
the index were technology stocks, including Microsoft, Compaq and
Intel. Even in August when many of the large-cap stocks in the S&P 500
experienced a slight correction, the fund was able to outperform the
index because of its focus on technology stocks.
Q. AT THE END OF THE PERIOD, APPLIED MATERIALS REPRESENTED ABOUT 9% OF
THE FUND'S INVESTMENTS AND COMPAQ ACCOUNTED FOR ABOUT 10%. WHAT DID
YOU FIND ATTRACTIVE ABOUT THESE STOCKS?
A. These companies are involved in different industries, but the story
for both is the same: improving fundamentals. Compaq's year-over-year
unit growth last quarter was stronger than it's been in two or three
years. Margins continued to improve, along with return on assets and
return on equity. The same holds true for Applied Materials, a
semiconductor capital equipment company. Orders improved and, even in
the trough of the cycle, the company generated net margins of more
than 10%.
Q. WHAT WOULD YOU CHARACTERIZE AS THE BIGGEST DISAPPOINTMENT DURING
THE PERIOD?
A. I had the fund positioned too defensively late in the period
because I thought the technology sector might underperform the broad
market, especially after Intel missed expectations for its
second-quarter sales and warned that revenue in the September quarter
would be flat compared to its previous quarter. Seagate Technologies
and Western Digital also reported earnings that came in lower than
analysts' estimates. In short, there was every indication that PC
sales were going to be weak, and I positioned the fund accordingly.
However, the technology market actually rallied dramatically in July,
and the fund's positioning didn't allow it to reap all of the rewards
of that upswing.
Q. WHAT'S YOUR OUTLOOK FOR THE TECHNOLOGY MARKET OVER THE NEXT SIX
MONTHS?
A. It's hard to say, since so many technology stocks are trading close
to peak valuations. In addition, it's difficult to predict PC unit
growth going forward. Basically, I'm more cautious going into the next
six to 12 months. However, technology represents about 12%-14% of the
S&P 500 and it's growing faster than any other segment of the index.
Technology companies also have better operating margins, return on
equity and return on assets than most other segments. They are the
beneficiaries of government, corporate and consumer spending as
technological change becomes more of a driving force behind the
growing global economy. Therefore, I think technology can outperform
the broader market in the long run.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 14, 1981
FUND NUMBER: 064
TRADING SYMBOL: FSPTX
SIZE: as of August 31, 1997, more than
$636 million
MANAGER: Adam Hetnarski, since 1996; analyst,
networking, electronics, CAD/CAM, and
technology sectors, since 1994; structured equity
analyst and portfolio manager, Fidelity
Management Trust Company, 1992-1994;
joined Fidelity in 1991
(checkmark)
TECHNOLOGY PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 88.0%
SHARES VALUE (NOTE 1)
ADVERTISING - 0.3%
Lycos, Inc. (a) 68,600 $ 2,148,038 55081810
AEROSPACE & DEFENSE - 0.4%
AIRCRAFT EQUIPMENT - 0.4%
BE Aerospace, Inc. (a) 84,000 2,982,000
BROADCASTING - 0.3%
COMMUNICATIONS SERVICES - 0.1%
Advanced Communication
Systems, Inc. 45,600 501,600 00750X10
RADIO BROADCASTING - 0.2%
American Radio Systems Corp.
Class A 35,300 1,738,525 02916110
TOTAL BROADCASTING 2,240,125
BUILDING MATERIALS - 0.7%
FLAT GLASS - 0.7%
Toshiba Ceramics Co., Ltd. 427,000 4,383,107 89149499
COMMUNICATIONS EQUIPMENT - 5.6%
DATACOMMUNICATIONS EQUIPMENT - 0.9%
Aspect Telecommunications Corp. (a) 1,600 35,200 04523710
Level One Communications, Inc. (a) 91,500 3,259,688 52729510
Network General Corp. (a) 179,200 2,979,200 64121010
6,274,088
TELEPHONE EQUIPMENT - 4.7%
Ascend Communications, Inc. (a) 217,600 9,234,400 04349110
Ericsson (L.M.) Telephone Co.
Class B ADR 26,500 1,104,719 29482140
Lucent Technologies, Inc. 225,900 17,591,963 54946310
Matsushita Communication
Industrial Co. Ltd. 45,000 1,463,990 57688099
Nokia Corp. AB sponsored ADR 22,700 1,759,250 65490220
31,154,322
TOTAL COMMUNICATIONS EQUIPMENT 37,428,410
COMPUTER SERVICES & SOFTWARE - 5.2%
COMPUTER SERVICES - 1.0%
Cerner Corp. (a) 43,700 1,289,150 15678210
Computer Learning Centers, Inc. (a) 83,900 4,027,200 20519910
HBO & Co. 6,362 455,678 40410010
Software Artistry, Inc. 26,400 323,400 83402810
Syntel, Inc. 13,900 234,563 87162H10
6,329,991
CUSTOM COMPUTER PROGRAMMING SERVICES - 0.7%
Saville Systems Ireland PLC
sponsored ADR 65,700 4,393,688 80517410
PREPACKAGED COMPUTER SOFTWARE - 3.5%
Broderbund Software, Inc. (a) 117,900 3,478,050 11201410
Eagle Point Software Corp. (a) 227,900 740,675 26982410
Electronic Arts, Inc. (a) 32,108 989,328 28551210
Microsoft Corp. (a) 25,000 3,304,688 59491810
PeopleSoft, Inc. 23,200 1,305,000 71271310
Siebel Systems, Inc. 46,400 1,676,200 82617010
Spectrum Holobyte, Inc. (a) 1,336,600 6,432,388 84762J10
Systems & Computer Technology Corp. (a) 97,200 3,426,300 87187310
Vantive Corp. 71,300 2,174,650 92209110
23,527,279
TOTAL COMPUTER SERVICES & SOFTWARE 34,250,958
SHARES VALUE (NOTE 1)
COMPUTERS & OFFICE EQUIPMENT - 17.7%
COMPUTER PERIPHERALS - 3.0%
EMC Corp. 49,000 $ 2,514,313 26864810
Fore Systems, Inc. (a) 242,800 4,962,225 34544910
Galileo Technology Ltd. 57,400 1,786,575 36399N22
Western Digital Corp. 220,900 10,630,813 95810210
19,893,926
COMPUTER STORAGE DEVICES - 2.4%
Quantum Corp. 137,100 4,807,069 74790610
Read-Rite Corp. 385,000 11,044,688 75524610
15,851,757
GRAPHICS WORKSTATIONS - 1.5%
Silicon Graphics, Inc. (a) 368,500 10,110,719 82705610
MINI & MICRO COMPUTERS - 10.1%
Compaq Computer Corp. (a) 1,017,450 66,642,975 20449310
Dell Computer Corp. 8,600 705,738 24702510
67,348,713
OFFICE AUTOMATION - 0.7%
Nam Tai Electronics, Inc. 184,200 4,605,000 62986520
TOTAL COMPUTERS & OFFICE EQUIPMENT 117,810,115
CREDIT & OTHER FINANCE - 0.2%
MORTGAGE BANKERS - 0.2%
New Century Financial Corp. 71,300 1,203,188 64352D10
DRUGS & PHARMACEUTICALS - 1.1%
COMMERCIAL LABORATORY RESEARCH - 0.0%
Millennium Pharmaceuticals, Inc. (a) 14,900 201,150 59990210
DRUGS - 1.1%
Barr Laboratories, Inc. (a) 61,800 2,425,650 06830610
Bristol-Myers Squibb Co. 61,700 4,689,200 11012210
7,114,850
TOTAL DRUGS & PHARMACEUTICALS 7,316,000
ELECTRICAL EQUIPMENT - 0.1%
Vicor Corp. 20,900 525,113 92581510
ELECTRONIC INSTRUMENTS - 29.4%
ELECTRONIC EQUIPMENT - 14.2%
Advantest Corp. 379,400 34,548,015 00799010
Anadigics, Inc. 46,900 2,321,550 03251510
Cohu, Inc. 35,400 1,982,400 19257610
Credence Systems Corp. (a) 92,200 4,339,163 22530210
Helix Technology Corp. 140,500 8,394,875 42331910
LTX Corp. (a) 490,100 3,874,853 50239210
Teradyne, Inc. (a) 699,600 38,958,975 88077010
94,419,831
INDUSTRIAL MEASUREMENT INSTRUMENTS - 0.2%
ADE Corp. 33,300 1,365,300 00089C10
LAB. & RESEARCH EQUIPMENT - 0.9%
Newport Corp. 26,900 349,700 65182410
Tokyo Seimitsu Co. Ltd. 229,000 5,781,871 89799792
6,131,571
SEMICONDUCTOR CAPITAL EQUIPMENT - 14.1%
Applied Materials, Inc. (a) 653,800 61,702,375 03822210
KLA-Tencor Corp. (a) 257,000 18,214,875 48248010
Lam Research Corp. 203,682 11,508,033 51280710
Novellus Systems, Inc. 2,500 286,563 67000810
Silicon Valley Group, Inc. (a) 61,600 2,079,000 82706610
93,790,846
TOTAL ELECTRONIC INSTRUMENTS 195,707,548
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ELECTRONICS - 15.3%
ELECTRONIC PARTS - WHOLESALE - 0.4%
Audiovox Corp. Class A (a) 289,200 $ 2,259,375 05075710
ELECTRONICS & ELECTRONIC COMPONENTS - 0.4%
Advanced Energy Industries, Inc. (a) 84,700 2,668,050 00797310
PRINTED CIRCUIT BOARDS - 0.9%
DII Group, Inc. (a) 111,400 6,099,150 23294910
SEMICONDUCTORS - 13.6%
Actel Corp. 35,100 712,969 00493410
Alliance Semiconductor Corp. 385,400 5,106,550 01877H10
Electroglas, Inc. (a) 190,000 6,080,000 28532410
Integrated Circuit Systems, Inc. (a) 71,700 2,473,650 45811K10
Integrated Device Technology, Inc. 697,900 9,508,888 45811810
Intel Corp. 70,100 6,457,963 45814010
Intel Corp. warrants 3/14/98 (a) 141,900 10,163,588 45814014
International Rectifier Corp. 19,200 438,000 46025410
Lattice Semiconductor Corp. (a) 26,600 1,694,088 51841510
Linear Technology Corp. 100 6,556 53567810
Maxim Integrated Products, Inc. 14,300 988,488 57772K10
Micron Technology, Inc. 7,000 311,938 59511210
PMC-Sierra, Inc. (a) 31,700 909,394 69344F10
Quality Semiconductor, Inc. (a) (d) 369,400 5,587,175 74758B10
RF Micro Devices, Inc. (d) 228,000 4,275,000 74994110
Texas Instruments, Inc. 75,100 8,533,238 88250810
Tokyo Electron Ltd. 184,000 9,976,822 89499999
Unitrode Corp. 6,700 522,600 91328310
VLSI Technology, Inc. 273,000 9,009,000 91827010
Vitesse Semiconductor Corp. (a) 162,900 7,676,663 92849710
90,432,570
TOTAL ELECTRONICS 101,459,145
ENERGY SERVICES - 2.3%
DRILLING - 2.3%
Cliffs Drilling Co. (a) 99,900 4,763,981 18682C10
ENSCO International, Inc. 56,500 3,587,750 26874Q10
Falcon Drilling, Inc. (a) 146,900 4,627,350 30591410
Transocean Offshore, Inc. 21,100 2,005,813 89381710
14,984,894
INDUSTRIAL MACHINERY & EQUIPMENT - 3.6%
FARM MACHINERY & EQUIPMENT - 0.5%
Case Corp. 47,000 3,151,938 14743R10
GENERAL INDUSTRIAL MACHINERY - 1.0%
Tyco International Ltd. 90,160 7,071,925 90212410
SPECIAL INDUSTRIAL MACHINERY - 2.1%
ASM Lithography Holding NV 105,800 8,993,000 04599S23
Semitool, Inc. 57,600 1,123,200 81690910
Asyst Technologies, Inc. (a) 111,400 3,808,488 04648X10
13,924,688
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 24,148,551
LEASING & RENTAL - 0.2%
EQUIPMENT RENTAL & LEASING - 0.2%
Alrenco, Inc. (a) 33,200 522,900 02109K10
Rent-Way, Inc. (a) 34,700 628,938 76009U10
1,151,838
SHARES VALUE (NOTE 1)
LODGING & GAMING - 0.3%
RACING & GAMING - 0.3%
Penn National Gaming, Inc. (a) 122,900 $ 2,181,475 70756910
MEDICAL FACILITIES MANAGEMENT - 0.2%
HOSPITALS - 0.1%
Health Management Associates, Inc.
Class A (a) 26,500 783,406 42193310
HMOS & OUTPATIENT CARE - 0.1%
United HealthCare Corp. 17,700 860,663 91058110
TOTAL MEDICAL FACILITIES MANAGEMENT 1,644,069
METALS & MINING - 0.4%
NONFERROUS WIRE - 0.4%
AFC Cable Systems, Inc. (a) 78,800 2,364,000 00095010
OIL & GAS - 0.3%
CRUDE PETROLEUM & GAS - 0.3%
Ocean Energy, Inc. 31,300 2,012,981 67481210
PACKAGING & CONTAINERS - 0.0%
GLASS CONTAINERS - 0.0%
Corning, Inc. 2,700 142,763 21935010
PAPER & FOREST PRODUCTS - 0.5%
PAPER - 0.5%
Champion International Corp. 53,800 3,184,282 15852510
PRECIOUS METALS - 0.3%
GOLD ORES - 0.3%
Newmont Mining Corp. 53,400 2,259,488 65163910
RAILROADS - 0.5%
Kansas City Southern Industries, Inc. 45,300 3,391,838 48517010
RESTAURANTS - 0.4%
Starbucks Corp. (a) 60,100 2,464,100 85524410
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
STATIONERY & OFFICE SUPPLIES - WHOLESALE - 0.8%
Corporate Express, Inc. 209,100 3,567,769 21988810
IKON Office Solutions, Inc. 74,900 1,947,400 45171310
5,515,169
SERVICES - 0.9%
MANAGEMENT CONSULTING SERVICES - 0.4%
Hagler Bailly, Inc. 124,300 2,687,988 40518310
MANAGEMENT SERVICES - 0.5%
Maximus, Inc. 146,600 3,353,475 57793310
TOTAL SERVICES 6,041,463
SHIPPING - 0.2%
Trico Marine Services, Inc. 36,900 1,143,900 89610610
TELEPHONE SERVICES - 0.8%
Brooks Fiber Properties, Inc. (a) 67,800 2,279,775 11439910
Teleport Communications Group, Inc.
Class A (a) 89,400 3,251,92 879463106
5,531,701
TOTAL COMMON STOCKS
(Cost $515,803,663) 585,616,259
CONVERTIBLE BONDS - 0.8%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
COMPUTER SERVICES & SOFTWARE - 0.4%
PREPACKAGED COMPUTER SOFTWARE - 0.4%
Vantive Corp. 4 3/4%,
9/1/02 (c) $ 2,650,000 $ 2,669,875 922091AA
ELECTRONIC INSTRUMENTS - 0.4%
SEMICONDUCTOR CAPITAL EQUIPMENT - 0.4%
Lam Research Corp. 5%,
9/1/02 (c) 2,640,000 2,640,000 512807AB
TOTAL CONVERTIBLE BONDS
(Cost $5,402,200) 5,309,875
CASH EQUIVALENTS - 11.2%
SHARES
Taxable Central Cash Fund (b)
(Cost $74,208,651) 74,208,651 74,208,651 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $595,414,514) $ 665,134,785
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $5,309,875 or
0.8% of net assets.
4. Affiliated company (see Note 10 of the Notes to Financial
Statements).
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,453,178,400 and $1,402,741,259, respectively (see Note 3
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 $192,656 for the
period (see Note 4 of Notes to Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $10,626,065 and $11,202,600, respectively (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 87.6%
Japan 8.8
Netherland 1.4
Others (individually less than 1%) 2.2
TOTAL 100.0%
Transactions during the period with companies that are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Ciena Corp $ 3,855,911 $ 9,674,051 $ - $ -
Midway Games, Inc. 908,129 1,325,956 - -
Quality Semiconductor, Inc. 132,825 - - 5,587,175
Softdesk, Inc. - - - -
RF Micro Devices, Inc. 1,280,701 - - 4,275,000
TOTALS $ 6,177,566 $ 11,000,007 $ - $ 9,862,175
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $595,453,010. Net unrealized appreciation
aggregated $69,681,775, of which $79,762,120 related to appreciated
investment securities and $10,080,345 related to depreciated
investment securities.
TECHNOLOGY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 665,134,785
SECURITIES, AT
VALUE
(COST
$595,414,51
4) - SEE
ACCOMPANYIN
G SCHEDULE
CASH 1,020,582
RECEIVABLE FOR 25,541,864
INVESTMENTS
SOLD
RECEIVABLE FOR 3,029,775
FUND SHARES
SOLD
DIVIDENDS 19,628
RECEIVABLE
INTEREST 254,976
RECEIVABLE
REDEMPTION FEES 4,409
RECEIVABLE
OTHER 69,758
RECEIVABLES
TOTAL ASSETS 695,075,777
LIABILITIES
PAYABLE FOR $ 43,075,250
INVESTMENTS
PURCHASED
PAYABLE FOR 3,807,025
FUND SHARES
REDEEMED
ACCRUED 298,665
MANAGEMENT
FEE
OTHER PAYABLES 445,549
AND
ACCRUED
EXPENSES
COLLATERAL ON 11,202,600
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 58,829,089
NET ASSETS $ 636,246,688
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 499,349,023
ACCUMULATED (984,848)
NET INVESTMENT
(LOSS)
ACCUMULATED 68,162,527
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 69,719,986
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 636,246,688
9,940,826
SHARES
OUTSTANDING
NET ASSET $64.00
VALUE AND
REDEMPTION
PRICE PER
SHARE
($636,246,6
88 (DIVIDED BY)
9,940,826
SHARES)
MAXIMUM $65.98
OFFERING PRICE
PER SHARE
(100/97.00
OF $64.00)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 652,586
INCOME
DIVIDENDS
INTEREST 1,838,105
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$206,475)
TOTAL INCOME 2,490,691
EXPENSES
MANAGEMENT $ 1,566,145
FEE
TRANSFER AGENT 1,612,660
FEES
ACCOUNTING AND 267,523
SECURITY
LENDING FEES
NON-INTERESTED 1,107
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 68,376
AND EXPENSES
REGISTRATION FEES 77,172
AUDIT 18,216
LEGAL 11,990
MISCELLANEOUS 1,419
TOTAL EXPENSES 3,624,608
BEFORE
REDUCTIONS
EXPENSE (149,069) 3,475,539
REDUCTIONS
NET INVESTMENT (984,848)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 72,307,421
SECURITIES
(INCLUDING
REALIZED LOSS
OF $649,353
ON SALES OF
INVESTMENTS IN
AFFILIATED
ISSUERS)
FOREIGN 203 72,307,624
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 58,555,699
SECURITIES
ASSETS AND (285) 58,555,414
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 130,863,038
NET INCREASE $ 129,878,190
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 817,866
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 13,060
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 59,790
WITHHELD BY
FSC
EXPENSE $ 137,226
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 11,095
CREDITS
TRANSFER 748
AGENT CREDITS
$ 149,069
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (984,848) $ (3,324,717)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 72,307,624 119,114,979
GAIN (LOSS)
CHANGE IN NET 58,555,414 (64,793,710)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 129,878,190 50,996,552
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (59,404,224) (30,475,050)
SHAREHOLDERS
FROM NET
REALIZED GAINS
SHARE 240,498,662 480,116,219
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 57,937,549 29,879,560
OF
DISTRIBUTIONS
COST OF SHARES (211,478,406) (536,349,238)
REDEEMED
REDEMPTION 370,714 1,250,125
FEES
NET INCREASE 87,328,519 (25,103,334)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 157,802,485 (4,581,832)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 478,444,203 483,026,035
PERIOD
END OF $ 636,246,688 $ 478,444,203
PERIOD
(INCLUDING
ACCUMULATE
D NET
INVESTMENT
LOSS OF
$984,848
AND $0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 4,224,186 8,803,236
ISSUED IN 1,214,372 541,096
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (3,789,426) (9,887,922)
NET INCREASE 1,649,132 (543,590)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 57.70 $ 54.67 $ 42.05 $ 41.83 $ 34.62 $ 32.44
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.11) (.39) (.28) (.39) (.24) F .13 G
INVESTMENT
INCOME (LOSS) D
NET REALIZED 13.53 6.95 20.83 1.95 11.04 4.68
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 13.42 6.56 20.55 1.56 10.80 4.81
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - - - - (.13) -
INVESTMENT
INCOME
FROM NET (7.16) (3.68) (8.05) (1.50) (3.70) (2.75)
REALIZED GAIN
TOTAL (7.16) (3.68) (8.05) (1.50) (3.83) (2.75)
DISTRIBUTIONS
REDEMPTION FEES .04 .15 .12 .16 .24 .12
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 64.00 $ 57.70 $ 54.67 $ 42.05 $ 41.83 $ 34.62
END OF PERIOD
TOTAL RETURN B, C 27.56% 12.64% 50.71% 4.61% 35.62% 16.48%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 636,247 $ 478,444 $ 483,026 $ 229,761 $ 202,475 $ 132,689
OF PERIOD
(000 OMITTED)
RATIO OF 1.37% A 1.49% 1.40% 1.57% 1.55% 1.64% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.32% A, E 1.44% E 1.39% E 1.56% E 1.54% E 1.64% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.37)% A (.72)% (.52)% (.98)% (.65)% .52% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 601% A 549% 112% 102% 213% 259% A
TURNOVER RATE
AVERAGE $ .0448 $ .0191
COMMISSION
RATE H
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
INVESTMENT
INCOME (LOSS) PER
SHARE REFLECTS
DIVIDENDS RECEIVED
IN ARREARS WHICH
AMOUNTED TO
$.03 PER
SHARE. G INVEST
MENT INCOME PER
SHARE REFLECTS
DIVIDENDS RECEIVED
IN ARREARS WHICH
AMOUNTED TO
$.10 PER
SHARE. H FOR
FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
NATURAL GAS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
AUGUST 31, 1997 MONTHS YEAR FUND
NATURAL GAS 16.31% 14.41% 51.77%
NATURAL GAS 12.82% 10.98% 47.22%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 125.28%
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 the fund's returns
to the performance of the S&P 500 - a widely recognized, unmanaged
index of common stocks. This benchmark includes reinvestment of
dividends and capital gains, if any, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
AUGUST 31, 1997 YEAR FUND
NATURAL GAS 14.41% 10.02%
NATURAL GAS 10.98% 9.26%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 20.44%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970917 083411 S00000000000001
Natural Gas S&P 500
00513 SP001
1993/04/21 9700.00 10000.00
1993/04/30 9515.70 9893.80
1993/05/31 9670.90 10158.96
1993/06/30 9952.20 10188.42
1993/07/31 9913.40 10147.66
1993/08/31 10767.00 10532.26
1993/09/30 10582.70 10451.16
1993/10/31 10010.40 10667.50
1993/11/30 9156.80 10566.16
1993/12/31 9209.91 10694.01
1994/01/31 9672.37 11057.61
1994/02/28 9327.98 10757.95
1994/03/31 8993.44 10288.90
1994/04/30 9692.05 10420.60
1994/05/31 9613.33 10591.50
1994/06/30 9662.53 10332.00
1994/07/31 9603.49 10670.89
1994/08/31 9288.63 11108.40
1994/09/30 9229.59 10836.24
1994/10/31 9554.30 11080.06
1994/11/30 8717.93 10676.52
1994/12/31 8580.06 10834.86
1995/01/31 8313.78 11115.81
1995/02/28 8856.20 11548.99
1995/03/31 9378.89 11889.80
1995/04/30 9536.79 12239.95
1995/05/31 9902.07 12729.18
1995/06/30 9665.13 13024.88
1995/07/31 9665.13 13456.79
1995/08/31 9951.43 13490.56
1995/09/30 10237.73 14059.87
1995/10/31 9793.47 14009.67
1995/11/30 10632.63 14624.70
1995/12/31 11187.09 14906.37
1996/01/31 11236.63 15413.78
1996/02/29 11256.45 15556.67
1996/03/31 11761.80 15706.48
1996/04/30 12587.74 15937.99
1996/05/31 12687.64 16349.03
1996/06/30 13356.99 16411.32
1996/07/31 12397.92 15686.27
1996/08/31 12867.47 16017.09
1996/09/30 13406.94 16918.54
1996/10/31 14376.00 17385.15
1996/11/30 15195.20 18699.29
1996/12/31 15026.99 18328.86
1997/01/31 14794.09 19474.05
1997/02/28 12657.51 19626.72
1997/03/31 12617.00 18820.26
1997/04/30 12431.17 19943.83
1997/05/31 13607.66 21158.01
1997/06/30 13097.50 22105.89
1997/07/31 13670.13 23864.86
1997/08/29 14721.67 22527.95
IMATRL PRASUN SHR__CHT 19970831 19970917 083415 R00000000000056
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Select Natural Gas Portfolio on April 21, 1993,
when the fund started, and the current maximum 3% sales charge was
paid. As the chart shows, by August 31, 1997, the value of the
investment would have grown to $14,722 - a 47.22% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $22,528 - a 125.28%
increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
OCEAN ENERGY, INC. 6.1
ANADARKO PETROLEUM CORP. 5.2
COASTAL CORP. (THE) 5.0
AMOCO CORP. 4.6
BURLINGTON RESOURCES, INC. 3.8
ENRON OIL & GAS CO. 3.2
CABOT OIL & GAS CORP. CLASS A 3.0
APACHE CORP. 3.0
UNION PACIFIC RESOURCES GROUP, INC. 2.9
CONSOLIDATED NATURAL GAS CO. 2.6
TOP INDUSTRIES AS OF AUGUST 31, 1997
CRUDE PETROLEUM & GAS 53.4%
OIL & GAS EXPLORATION 11.5%
GAS TRANSMISSION &
DISTRIBUTION 7.4%
GAS TRANSMISSION 5.1%
PETROLEUM REFINERS 5.0%
ALL OTHERS 17.6%
ROW: 1, COL: 1, VALUE: 17.6
ROW: 1, COL: 2, VALUE: 5.0
ROW: 1, COL: 3, VALUE: 5.1
ROW: 1, COL: 4, VALUE: 7.4
ROW: 1, COL: 5, VALUE: 11.5
ROW: 1, COL: 6, VALUE: 53.4
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
NATURAL GAS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Stephen Binder,
Portfolio Manager of Fidelity Select Natural
Gas Portfolio
Q. HOW DID THE FUND PERFORM, STEVE?
A. For the six- and 12-month periods ending August 31, 1997, the fund
returned 16.31% and 14.41%, outperforming its benchmark, the Standard
& Poor's 500 Index, for the past six months and underperforming it for
the past 12 months. The index returned 14.78% and 40.65% for the six-
and 12-month periods, respectively
Q. WHY DID THE FUND PERFORM WELL OVER THE PAST SIX MONTHS?
A. Mostly because of its extremely strong performance over the last
few months of the period. Overall, the fund's performance was hurt by
unfavorable weather conditions over the first part of the period and
boosted by a drop in natural gas supply at the end of the period that
raised gas prices.
Q. CAN YOU EXPLAIN THESE CIRCUMSTANCES IN MORE DETAIL?
A. At the beginning of the period, the fund had pretty much bottomed
following a warmer-than-average winter - a period of lower-than-normal
natural gas demand - which caused a build up of natural gas
inventories, or storage. While a cool April produced a
stronger-than-normal heating demand that helped consume some of the
surplus supply, a cooler-than-normal late spring and early summer
reduced the need for air conditioning and thus negatively affected
demand, and storage built up again. Then in mid- to- late-summer
something unexpected happened - the surplus started to shrink as less
natural gas was injected into storage. Apparently, demand was
outpacing supply, which was great news for the fund and the sector
because it dramatically boosted the price of natural gas. The relative
shortfall in supply seemed especially strange because, as I noted in
the last shareholder report, I had been concerned that an increase in
drilling activity would deliver too much new natural gas supply.
Q. SO WHAT WAS BEHIND THE DROP IN THE SUPPLY?
A. It was a somewhat inexplicable situation. As I had expected, the
number of rigs drilling for natural gas increased over the period,
from about 510 at the beginning of March to 600 at the end of August.
This should have meant that the supply of natural gas would increase
as well. Instead, as I noted earlier, production growth was lagging
demand growth at the end of the period. There are a couple of theories
as to why this situation existed. One is that the depletion of natural
gas in existing wells was greater than expected. The other is that
exploration success was worse than expected.
Q. WHAT TYPES OF NATURAL GAS COMPANIES DID WELL OVER THE PERIOD?
A. Exploration and production (E&P) companies did well largely because
of rising gas prices and a notable increase in the number of mergers
and acquisitions in this group, which made investors more positive
toward E&P companies. One good example is that top 10 holding
Burlington Resources agreed to buy Louisiana Land & Exploration. This
benefited the fund's positions in both stocks. Another E&P company in
the fund's top 10 holdings was Ocean Energy, formerly known as Flores
& Rucks. This company experienced very rapid growth in its offshore
drilling in the Gulf of Mexico. In addition, E&P company Anadarko,
another top 10 holding, has a big oil exploration and development
project in Algeria.
Q. DO YOU WISH YOU HAD AVOIDED SOME STOCKS OVER THE PERIOD?
A. Yes. Two stocks definitely hurt the fund. The harder hit of the two
was Chesapeake Energy, which drilled too many unsuccessful wells.
Another problem stock was Abacan Resources. This Canadian company ran
into production problems and needed financing. The stock plummeted as
shareholders feared too much equity dilution would result. I sold both
of these stocks during the period.
Q. STEVE, HOW DOES THE FUND LOOK GOING FORWARD?
A. I think it will be affected by two positive and two negative
factors. In the fund's favor, strong merger and acquisition activity
should continue to help. It also should continue to benefit from the
low storage levels that we discussed. On the negative side, the rig
count remains high, so gas supply could increase too much. In
addition, the global weather system called El Nio tends to indicate a
warm winter - bad news for natural gas demand.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: APRIL 21, 1993
FUND NUMBER: 513
TRADING SYMBOL: FSNGX
SIZE: AS OF AUGUST 31, 1997, MORE THAN
$99 MILLION
MANAGER: STEPHEN BINDER, SINCE 1996; MANAGER,
FIDELITY SELECT MEDICAL DELIVERY PORTFOLIO, 1994-
1996; 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)
NATURAL GAS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 92.5%
SHARES VALUE (NOTE 1)
ENERGY SERVICES - 3.6%
DRILLING - 2.5%
Diamond Offshore Drilling, Inc. 20,000 $ 1,092,500 25271C10
Noble Drilling Corp. (a) 42,600 1,211,438 65504210
2,303,938
OIL & GAS SERVICES - 1.1%
Weatherford Enterra, Inc. (a) 22,800 1,050,225 94707110
TOTAL ENERGY SERVICES 3,354,163
GAS - 17.1%
GAS DISTRIBUTION - 4.6%
Aquila Gas Pipeline Corp. 40,300 420,631 03839B10
K N Energy, Inc. 23,000 954,500 48262010
MCN Corp. 27,400 840,838 55267J10
Pacific Enterprises 60,000 1,976,250 69423210
4,192,219
GAS TRANSMISSION - 5.1%
Leviathan Gas Pipeline Partners LP unit 35,200 906,400 52736710
ONEOK, Inc. 49,123 1,590,357 68267810
Sonat, Inc. 19,900 991,269 83541510
Williams Companies, Inc. 25,850 1,203,641 96945710
4,691,667
GAS TRANSMISSION & DISTRIBUTION - 7.4%
Consolidated Natural Gas Co. 41,000 2,421,563 20961510
El Paso Natural Gas Co. 30,000 1,687,500 28369587
Midcoast Energy Resources, Inc. 25,000 496,875 59563W10
Questar Corp. 32,600 1,304,000 74835610
Tejas Gas Corp. 18,200 864,500 87907510
6,774,438
TOTAL GAS 15,658,324
OIL & GAS - 70.9%
CRUDE PETROLEUM & GAS - 53.4%
Anadarko Petroleum Corp. 64,575 4,742,227 03251110
Apache Corp. 69,325 2,751,336 03741110
Burlington Resources, Inc. 69,257 3,506,136 12201410
Cabot Oil & Gas Corp. Class A 119,300 2,766,269 12709710
Canadian Natural Resources Ltd. (a) 46,900 1,208,049 13638510
Comstock Resources, Inc. (a) 56,200 688,450 20576820
Devon Energy Corp. 19,200 819,600 25179910
Enron Oil & Gas Co. 121,200 2,923,950 29356210
Houston Exploration Co. (a) 39,200 737,450 44212010
Meridian Resource Corp. (a) 49,900 545,781 58977Q10
Newfield Exploration Co. 37,000 950,438 65129010
Noble Affiliates, Inc. 21,000 973,875 65489410
Nuevo Energy Corp. 20,000 1,016,250 67050910
Ocean Energy, Inc. (a) 87,000 5,595,188 67481210
Oryx Energy Co. (a) 85,600 2,263,050 68763F10
Pioneer Natural Resources Co. 26,200 1,046,363 72378710
Pogo Producing Co. 29,700 1,288,238 73044810
Renaissance Energy Ltd. (a) 90,800 2,339,110 75966610
Rio Alto Exploration Ltd. (a) 135,100 1,255,985 76689210
Rutherford-Moran Oil Corp. (a) 38,400 859,200 78328610
Santa Fe Energy Resources, Inc. 71,200 787,650 80201210
Snyder Oil Corp. 76,300 1,502,156 83348210
Swift Energy Co. (a) 34,200 887,063 87073810
Union Pacific Resources Group, Inc. 105,000 2,625,000 90783410
United Meridian Corp. (a) 60,000 2,351,250 91086510
Vastar Resources, Inc. 31,100 1,327,581 92238010
Vintage Petroleum, Inc. 30,000 1,288,125 92746010
49,045,770
SHARES VALUE (NOTE 1)
GENERAL PETROLEUM PRODUCTS - 1.0%
KCS Group, Inc. 35,400 $ 944,733 48243420
OIL & GAS EXPLORATION - 11.5%
Amoco Corp. 44,300 4,189,119 03190510
Anderson Exploration Ltd. 60,000 747,973 03390110
Chieftain International, Inc. (a) 17,900 435,327 16867C10
Cross Timbers Oil Co. 28,200 608,063 22757310
Denbury Resources, Inc. (a) 25,900 425,523 24791620
Louisiana Land & Exploration Co. 18,000 1,378,125 54626810
Seagull Energy Corp. 63,800 1,559,113 81200710
USX-Marathon Group 37,000 1,204,813 90290582
10,548,056
PETROLEUM REFINERS - 5.0%
Coastal Corp. (The) 79,900 4,614,225 19044110
TOTAL OIL & GAS 65,152,784
SERVICES - 0.9%
MANAGEMENT CONSULTING SERVICES - 0.9%
Metzler Group, Inc. 23,200 794,600 59290310
TOTAL COMMON STOCKS
(Cost $73,893,671) 84,959,871
CASH EQUIVALENTS - 7.5%
Taxable Central Cash Fund (b)
(Cost $6,858,707) 6,858,707 6,858,707 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $80,752,378) $ 91,818,578
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $42,287,729 and $46,210,364, respectively (see Note 3 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 $17,071 for the
period (see Note 4 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $81,071,930. Net unrealized appreciation
aggregated $10,746,648, of which $11,844,633 related to appreciated
investment securities and $1,097,985 related to depreciated investment
securities.
NATURAL GAS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 91,818,578
SECURITIES, AT
VALUE
(COST
$80,752,378
) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 13,584,914
FUND SHARES
SOLD
DIVIDENDS 69,564
RECEIVABLE
INTEREST 32,810
RECEIVABLE
REDEMPTION FEES 1,913
RECEIVABLE
TOTAL ASSETS 105,507,779
LIABILITIES
PAYABLE FOR $ 5,172,012
INVESTMENTS
PURCHASED
PAYABLE FOR 903,652
FUND SHARES
REDEEMED
ACCRUED 39,443
MANAGEMENT
FEE
OTHER PAYABLES 99,752
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 6,214,859
NET ASSETS $ 99,292,920
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 91,280,248
ACCUMULATED (6,894)
NET INVESTMENT
(LOSS)
ACCUMULATED (3,046,634)
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 11,066,200
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
NET ASSETS, FOR $ 99,292,920
7,022,828
SHARES
OUTSTANDING
NET ASSET $14.14
VALUE AND
REDEMPTION
PRICE PER
SHARE
($99,292,92
0 (DIVIDED BY)
7,022,828
SHARES)
MAXIMUM $14.58
OFFERING PRICE
PER SHARE
(100/97.00
OF $14.14)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 352,816
INCOME
DIVIDENDS
INTEREST 227,973
TOTAL INCOME 580,789
EXPENSES
MANAGEMENT $ 242,575
FEE
TRANSFER AGENT 435,353
FEES
ACCOUNTING FEES 40,899
AND EXPENSES
NON-INTERESTED 191
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 10,063
AND EXPENSES
REGISTRATION FEES 23,482
AUDIT 11,994
LEGAL 217
MISCELLANEOUS 255
TOTAL EXPENSES 765,029
BEFORE
REDUCTIONS
EXPENSE (8,532) 756,497
REDUCTIONS
NET INVESTMENT (175,708)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT (1,715,709)
SECURITIES
FOREIGN (237) (1,715,946)
CURRENCY
TRANSACTIONS
CHANGE IN NET 13,933,789
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON INVESTMENT
SECURITIES
NET GAIN (LOSS) 12,217,843
NET INCREASE $ 12,042,135
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 127,288
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 789
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 26,535
WITHHELD BY
FSC
EXPENSE $ 8,532
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (175,708) $ (514,205)
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED (1,715,946) 7,806,794
GAIN (LOSS)
CHANGE IN NET 13,933,789 (8,433,548)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,042,135 (1,140,959)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (52,511)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (755,502) (2,534,533)
REALIZED GAIN
IN EXCESS OF (1,330,688) -
NET REALIZED
GAIN
TOTAL (2,086,190) (2,587,044)
DISTRIBUTIONS
SHARE 59,735,910 455,349,313
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 2,046,549 2,542,586
OF
DISTRIBUTIONS
COST OF SHARES (54,110,645) (434,506,274)
REDEEMED
REDEMPTION 98,998 1,680,459
FEES
NET INCREASE 7,770,812 25,066,084
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL 17,726,757 21,338,081
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS 81,566,163 60,228,082
BEGINNING OF
PERIOD
END OF PERIOD $ 99,292,920 $ 81,566,163
(INCLUDING
UNDISTRIBUTED
NET INVESTMENT
INCOME (LOSS)
OF $(6,894)
AND
$168,814,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 4,559,075 33,713,794
ISSUED IN 174,766 179,967
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (4,233,796) (32,674,374)
NET INCREASE 500,045 1,219,387
(DECREASE)
<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>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEAR ENDED APRIL 21, 1993
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, (COMMENCEMENT
OF OPERATIONS) TO
FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 12.50 $ 11.36 $ 8.98 $ 9.48 $ 10.00
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.03) (.06) .05 .03 .02
INVESTMENT
INCOME (LOSS) D
NET REALIZED 1.98 1.30 F 2.36 (.53) (.46)
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 1.95 1.24 2.41 (.50) (.44)
INVESTMENT
OPERATIONS
LESS - (.01) (.05) (.02) -
DISTRIBUTIONS
FROM NET
INVESTMENT
INCOME
FROM NET (.12) (.29) - - (.07)
REALIZED GAIN
IN EXCESS OF (.21) - - - (.06)
NET REALIZED
GAIN
TOTAL (.33) (.30) (.05) (.02) (.13)
DISTRIBUTIONS
REDEMPTION FEES .02 .20 .02 .02 .05
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 14.14 $ 12.50 $ 11.36 $ 8.98 $ 9.48
END OF PERIOD
TOTAL RETURN B, C 16.31% 12.45% 27.10% (5.06)% (3.84)%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 99,293 $ 81,566 $ 60,228 $ 79,894 $ 63,073
OF PERIOD
(000 OMITTED)
RATIO OF 1.87% A 1.70% 1.68% 1.70% 1.94% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.85% A, E 1.66% E 1.67% E 1.66% E 1.93% A, E
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.43)% A (.46)% .46% .30% .17% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 112% A 283% 79% 177% 44% A
TURNOVER RATE
AVERAGE $ .0370 $ .0361
COMMISSION
RATE G
</TABLE>
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 F
MR OR THE FUND
HAS ENTERED
INTO VARYING
ARRANGEMENTS
WITH THIRD
PARTIES WHO
EITHER PAID OR
REDUCED A
PORTION OF THE
FUND'S
EXPENSES (SEE
NOTE 8 OF
NOTES TO
FINANCIAL
STATEMENTS).
F THE
AMOUNT SHOWN
FOR A SHARE
OUTSTANDING
DOES NOT
CORRESPOND
WITH THE
AGGREGATE NET
LOSS ON
INVESTMENTS FOR
THE PERIOD DUE
TO THE TIMING OF
SALES AND
REPURCHASES OF
FUND SHARES IN
RELATION TO
FLUCTUATING
MARKET VALUES
OF THE
INVESTMENTS OF
THE
FUND. G FOR
FISCAL YEARS
BEGINNING ON OR
AFTER
SEPTEMBER 1,
1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION
RATE PER SHARE
FOR SECURITY
TRADES ON
WHICH
COMMISSIONS
ARE CHARGED.
THIS AMOUNT
MAY VARY FROM
PERIOD TO PERIOD
AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED
IN VARIOUS
MARKETS WHERE
TRADING
PRACTICES AND
COMMISSION
RATE STRUCTURES
MAY DIFFER.
TELECOMMUNICATIONS PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption. If Fidelity had not
reimbursed certain fund expenses, the past 10 year total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
TELECOMMUNICATIONS 10.47% 17.37% 134.49% 320.47%
TELECOMMUNICATIONS 7.15% 13.85% 127.46% 307.86%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
TELECOMMUNICATIONS 17.37% 18.58% 15.44%
TELECOMMUNICATIONS 13.85% 17.86% 15.09%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 151130 S00000000000001
Telecommunications S&P 500
00096 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9896.98 9781.00
1987/10/31 8156.09 7674.17
1987/11/30 7597.09 7041.82
1987/12/31 8084.34 7577.70
1988/01/31 8461.75 7896.72
1988/02/29 8713.36 8264.71
1988/03/31 8751.65 8009.33
1988/04/30 9036.08 8098.24
1988/05/31 9150.95 8168.69
1988/06/30 9626.82 8543.63
1988/07/31 9490.07 8511.17
1988/08/31 9140.01 8221.79
1988/09/30 9703.40 8572.04
1988/10/31 9900.31 8810.34
1988/11/30 9987.82 8684.35
1988/12/31 10328.74 8836.33
1989/01/31 11166.95 9483.15
1989/02/28 11211.07 9247.02
1989/03/31 11668.78 9462.47
1989/04/30 12551.10 9953.57
1989/05/31 13477.55 10356.69
1989/06/30 13148.29 10297.66
1989/07/31 14146.48 11227.54
1989/08/31 14484.75 11447.60
1989/09/30 15017.11 11400.66
1989/10/31 14484.75 11136.17
1989/11/30 14850.75 11363.35
1989/12/31 15584.18 11636.07
1990/01/31 13894.13 10855.29
1990/02/28 13842.39 10995.32
1990/03/31 14164.30 11286.70
1990/04/30 13330.77 11004.53
1990/05/31 14733.41 12077.47
1990/06/30 14440.23 11995.34
1990/07/31 13779.16 11956.96
1990/08/31 12175.32 10876.05
1990/09/30 11387.78 10346.39
1990/10/31 11784.43 10301.90
1990/11/30 12457.00 10967.40
1990/12/31 13028.91 11273.39
1991/01/31 13491.93 11764.91
1991/02/28 13943.22 12606.10
1991/03/31 14335.91 12911.17
1991/04/30 14640.68 12942.15
1991/05/31 14793.06 13501.25
1991/06/30 14177.66 12882.90
1991/07/31 14980.61 13483.24
1991/08/31 15426.05 13802.79
1991/09/30 15625.32 13572.29
1991/10/31 16240.72 13754.15
1991/11/30 15619.46 13199.86
1991/12/31 17048.56 14709.93
1992/01/31 17072.25 14436.32
1992/02/29 17285.43 14623.99
1992/03/31 16675.49 14338.83
1992/04/30 17303.19 14760.39
1992/05/31 17101.85 14832.71
1992/06/30 16704.68 14611.71
1992/07/31 17601.06 15209.33
1992/08/31 17393.29 14897.53
1992/09/30 17731.65 15073.32
1992/10/31 17909.74 15126.08
1992/11/30 18841.74 15641.88
1992/12/31 19660.07 15834.28
1993/01/31 19599.60 15967.28
1993/02/28 20676.03 16184.44
1993/03/31 21522.67 16525.93
1993/04/30 21568.08 16126.00
1993/05/31 22436.26 16558.18
1993/06/30 23403.66 16606.20
1993/07/31 24085.80 16539.77
1993/08/31 25902.78 17166.63
1993/09/30 26274.86 17034.45
1993/10/31 27031.41 17387.06
1993/11/30 24817.55 17221.88
1993/12/31 25502.18 17430.27
1994/01/31 26018.48 18022.90
1994/02/28 25203.28 17534.48
1994/03/31 24415.25 16769.97
1994/04/30 24851.03 16984.63
1994/05/31 24705.10 17263.18
1994/06/30 24684.25 16840.23
1994/07/31 26053.28 17392.59
1994/08/31 26810.76 18105.69
1994/09/30 26498.04 17662.10
1994/10/31 27762.83 18059.49
1994/11/30 26289.56 17401.77
1994/12/31 26603.66 17659.84
1995/01/31 26972.76 18117.75
1995/02/28 27214.09 18823.80
1995/03/31 27554.80 19379.29
1995/04/30 28411.21 19950.01
1995/05/31 29186.72 20747.42
1995/06/30 30592.79 21229.38
1995/07/31 32535.19 21933.35
1995/08/31 33499.14 21988.40
1995/09/30 34600.80 22916.31
1995/10/31 33151.25 22834.50
1995/11/30 33883.27 23836.93
1995/12/31 34493.27 24296.03
1996/01/31 34737.42 25123.07
1996/02/29 34233.86 25355.96
1996/03/31 34073.64 25600.14
1996/04/30 35664.48 25977.48
1996/05/31 36455.93 26647.44
1996/06/30 36826.92 26748.97
1996/07/31 34040.37 25567.20
1996/08/31 34749.38 26106.41
1996/09/30 35771.66 27575.68
1996/10/31 35062.66 28336.22
1996/11/30 36126.16 30478.15
1996/12/31 36355.79 29874.38
1997/01/31 36603.11 31740.93
1997/02/28 36921.09 31989.78
1997/03/31 33811.95 30675.32
1997/04/30 34869.79 32506.64
1997/05/31 39833.04 34485.64
1997/06/30 42028.85 36030.60
1997/07/31 42881.77 38897.55
1997/08/29 40785.77 36718.51
IMATRL PRASUN SHR__CHT 19970831 19970909 151150 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Telecommunications Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $40,786 - a 307.86% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
WORLDCOM, INC. 14.3
TEL-SAVE HOLDINGS, INC. 13.2
ALCATEL ALSTHOM COMPAGNIE GENERALE
D'ELECTRICITE SA 7.3
MCI COMMUNICATIONS CORP. 6.8
APT SATELLITE HOLDINGS LTD. SPONSORED ADR 5.1
MOTOROLA, INC. 4.1
BROOKS FIBER PROPERTIES, INC. 4.0
TELCO COMMUNICATIONS GROUP, INC. 3.7
NOKIA CORP. AB SPONSORED ADR 3.6
BCE, INC. 3.3
TOP INDUSTRIES AS OF AUGUST 31, 1997
ROW: 1, COL: 1, VALUE: 14.6
ROW: 1, COL: 2, VALUE: 3.1
ROW: 1, COL: 3, VALUE: 4.4
ROW: 1, COL: 4, VALUE: 5.8
ROW: 1, COL: 5, VALUE: 15.4
ROW: 1, COL: 6, VALUE: 56.7
ROW: 1, COL: 1, VALUE: 16.5
ROW: 1, COL: 2, VALUE: 3.4
ROW: 1, COL: 3, VALUE: 3.8
ROW: 1, COL: 4, VALUE: 6.2
ROW: 1, COL: 5, VALUE: 9.300000000000001
ROW: 1, COL: 6, VALUE: 60.8
TELEPHONE SERVICES 56.7%
TELEPHONE EQUIPMENT 15.4%
COMMUNICATIONS SERVICES 5.8%
SEMICONDUCTORS 4.4%
NONFERROUS ROLLING
& DRAWING 3.1%
ALL OTHERS 14.6%
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
TELECOMMUNICATIONS PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
Nick Thakore,
Portfolio Manager of
Fidelity Select Telecommunications Portfolio
Q. HOW DID THE FUND PERFORM, NICK?
A. For the six months that ended August 31, 1997, the fund had a total
return of 10.47%, while the Standard & Poor's 500 Index returned
14.78%. For the 12 months that ended August 31, 1997, the fund
returned 17.37% and the S&P 500 returned 40.65%.
Q. WHY DID THE FUND'S PERFORMANCE LAG THAT OF THE S&P 500?
A. The story in the telecommunications sector really hasn't changed
for some time now. Fears over how and when deregulation will shape the
competitive landscape continued to plague telecommunications stocks,
including AT&T and the regional Bell operating companies (RBOCs). As
in the past, investors during the past six months were concerned that
as both local and long-distance markets continue to open, increased
competition will hurt earnings. Uncertainty over the timing of
deregulation and competitive guidelines, combined with deteriorating
business prospects, hurt many stocks in the group.
Q. WHAT FACTORS HURT BUSINESS PROSPECTS FOR COMPANIES IN THE SECTOR?
A. Among the long distance providers, increased competition and more
aggressive pricing made it tougher for companies to increase their
earnings. On the local side, line growth has slowed and we've started
to see competitive local exchange companies (CLECs) eat into the
market share of the RBOCs.
Q. WHAT SORTS OF THEMES HAVE YOU PURSUED IN THIS UNCERTAIN
ENVIRONMENT?
A. I've tried to focus on those stocks that I feel have a noteworthy
advantage. I believe the industry is biased against the larger
incumbent, or existing, telephone providers, and favors companies that
don't have incumbent market share but have strategies or assets in
place that should allow them to gain much more market share going
forward. In essence, the incumbents have more to lose, while the new
competitors have more to gain. I also emphasized equipment providers,
which have been in high demand due to companies' focus on
infrastructure improvements. Finally, as this industry continued to
consolidate, I've looked for companies that are likely to be acquired
at a premium.
Q. WHAT STOCKS HAVE DONE WELL FOR THE FUND? WHICH WERE DISAPPOINTING?
A. The fund's two largest holdings, WorldCom and Tel-Save, performed
quite well. WorldCom was well-positioned because of the assets it has
in place in terms of local, Internet, long-distance and international
networks. Shares of Tel-Save rose in anticipation of its long-distance
service that will be sold over America Online. In addition, Tel-Save
recently started a CLEC to diversify its fiberoptic product line. In
general, CLECs performed well, including Brooks Fiber, one of the
fund's top 10 investments. The equipment providers also generally saw
share price gains, including Alcatel. On the minus side, MCI struggled
as it encountered some difficulties in finalizing its acquisition by
British Telecommunications. Beyond that, some smaller equipment
providers and phone service stocks proved disappointing. Among these
was Viatel, an international long-distance provider that fell due to
concerns over its long-term growth potential, given the intense
competitive environment.
Q. YOU HAVE MORE THAN 25% OF THE FUND CONCENTRATED IN THE TOP TWO
STOCKS, AND ALMOST 50% OF THE FUND INVESTED IN THE TOP FIVE. WHY IS
THAT, AND DOES THAT MAKE THE FUND MORE VOLATILE?
A. In managing the fund, I'm dealing with an industry in which
competition is intense. I've concentrated the fund among its larger
holdings because I have a great deal of conviction in them when
compared to the alternatives. In a sector where the environment is
uncertain, I feel I would be watering down my ability to perform well
if I spread my investments out. The concentration of the fund may have
created more volatility, but the fund's top holdings contributed
significantly to the fund's performance.
Q. WHAT'S YOUR OUTLOOK?
A. I don't believe the investing environment for the sector will
change appreciably in the near future. Increased competition is
coming, but slowly. There is still a great deal of uncertainty over
the ultimate form of regulations within the industry. But enough
competition is developing to weaken the incumbents' growth. As a
result, I'll probably continue to pursue my theme of focusing on
smaller, developing companies with some kind of competitive advantage
that will help them capture market share. And, I think the telephone
services group as a whole will have a difficult operating outlook for
the next couple of years, which is why I'll probably continue to
maintain a stake in the equipment providers as well.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: July 29, 1985
FUND NUMBER: 096
TRADING SYMBOL: FSTCX
SIZE: as of August 31, 1997, more than
$352 million
MANAGER: Nick Thakore, since 1996; manager,
Fidelity Utilities Fund, Fidelity Advisor Utilities
Fund and Fidelity Select Utilities Growth
Portfolio, since August 1997; analyst, various
industries, 1993-1996; joined Fidelity in 1993
(checkmark)
TELECOMMUNICATIONS PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.6%
SHARES VALUE (NOTE 1)
APPLIANCE STORES - 2.8%
ELECTRIC APPLIANCES - WHOLESALE - 2.8%
Cellstar Corp. 300,000 $ 9,993,750
BROADCASTING - 5.8%
COMMUNICATIONS SERVICES - 5.8%
APT Satellite Holdings Ltd.
sponsored ADR 1,223,200 18,195,100 00203R10
Smartalk Teleservices, Inc. (a) 100,300 2,306,900 83169A10
20,502,000
CELLULAR - 0.7%
CELLULAR & COMMUNICATION SERVICES - 0.7%
Nextel Communications, Inc. Class A (a) 100,000 2,506,250 65332V10
COMMUNICATIONS EQUIPMENT - 8.1%
TELEPHONE EQUIPMENT - 8.1%
Advanced Fibre Communication, Inc. 5,800 361,050 00754A10
Andrew Corp. (a) 384,700 9,569,413 03442510
Nokia Corp. AB sponsored ADR 165,000 12,787,500 65490220
Tellabs, Inc. (a) 100,000 5,968,750 87966410
28,686,713
COMPUTER SERVICES & SOFTWARE - 1.0%
COMPUTER SERVICES - 1.0%
NETCOM On-Line Communication
Services, Inc. (a) 279,000 3,644,438 64108110
ELECTRICAL EQUIPMENT - 8.2%
ELECTRICAL MACHINERY - 7.3%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 900 22,163 01390430
Alcatel Alsthom Compagnie Generale
d'Electricite SA 213,000 26,038,350 01390492
26,060,513
TV & RADIO COMMUNICATION EQUIPMENT - 0.9%
California Amplifier, Inc. (a)(c) 654,300 3,251,053 12990010
TOTAL ELECTRICAL EQUIPMENT 29,311,566
ELECTRONICS - 6.0%
ELECTRONICS & ELECTRONIC COMPONENTS - 1.6%
Alpine Group, Inc. 401,600 5,672,600 02082510
SEMICONDUCTORS - 4.4%
Intel Corp. warrants 3/14/98 (a) 14,900 1,067,213 45814014
Motorola, Inc. 200,000 14,675,000 62007610
15,742,213
TOTAL ELECTRONICS 21,414,813
METALS & MINING - 3.1%
NONFERROUS ROLLING & DRAWING - 3.1%
Superior Telecom, Inc. 288,300 10,901,342 86836510
SERVICES - 1.2%
BUSINESS SERVICES - 1.2%
Sitel Corp. (a) 150,000 1,593,750 82980K10
Snyder Communications, Inc. (a) 90,000 2,576,250 83291410
4,170,000
MANAGEMENT CONSULTING SERVICES - 0.0%
Hagler Bailly, Inc. 300 6,488 40518310
TOTAL SERVICES 4,176,488
TELEPHONE SERVICES - 56.7%
BCE, Inc. 415,100 11,770,265 05534B10
Brooks Fiber Properties, Inc. (a) 428,000 14,391,500 11439910
SHARES VALUE (NOTE 1)
Cincinnati Bell, Inc. 280,800 $ 7,564,050 17187010
MCI Communications Corp. 850,000 24,225,000 55267310
McLeodUSA, Inc. Class A (a) 328,200 11,117,775 58226610
Nippon Telegraph & Telephone
Corp. Ord. 1,054 9,859,437 65462492
Primus Telecommunications Group, Inc. 457,300 3,658,400 74192910
Qwest Communications
International, Inc. 1,200 48,900 74912110
STAR Telecommunications, Inc. 11,800 202,075 85492310
Tel-Save Holdings, Inc. (a) 2,622,000 46,868,250 87917610
Telco Communications Group, Inc. 438,800 12,999,450 87920510
Viatel, Inc. (a)(c) 1,656,000 7,866,000 92552920
WorldCom, Inc. (a) 1,699,245 50,871,147 98155K10
201,442,249
TOTAL COMMON STOCKS
(Cost $301,457,932) 332,579,609
CASH EQUIVALENTS - 6.4%
Taxable Central Cash Fund (b)
(Cost $22,925,645) 22,925,645 22,925,645 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $324,383,577) $ 355,505,254
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 10 of Notes to Financial Statements).
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $204,743,940 and $277,408,563 respectively (see Note 3 of
Notes to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these
affiliated firms were $40,625 for the period (see Note 4 of Notes to
Financial Statements).
The fund participated in the securities lending program. At the period
end, the value of securities loaned and the value of collateral
amounted to $2,300,000 and $2,400,000 respectively (see Note 6 of
Notes to Financial Statements).
The fund participated in the bank borrowing program. The maximum loan
and the average daily loan balances during the periods for which loans
were outstanding amounted to $4,576,000 and $3,806,167, respectively.
The weighted average interest rate paid was 5.86% (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 77.9%
France 7.3
Hong Kong 5.1
Finland 3.6
Canada 3.3
Japan 2.8
TOTAL 100.0%
Transactions during the period with companies which are or were
affiliates are as follows:
PURCHASES SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
California Amplifier, Inc. $ - $ - $ - $ 3,251,053
Viatel, Inc. - - - 7,866,000
TOTALS $ - $ - $ - $ 11,117,053
INCOME TAX INFORMATION
At August 31,1997, the aggregate cost of investment securities for
income tax purposes was $324,394,082. Net unrealized appreciation
aggregated $31,111,172, of which $57,592,812 related to appreciated
investment securities and $26,481,640 related to depreciated
investment securities.
TELECOMMUNICATIONS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 355,505,254
SECURITIES, AT
VALUE
(COST
$324,383,57
7) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 917,420
INVESTMENTS
SOLD
RECEIVABLE FOR 214,675
FUND SHARES
SOLD
DIVIDENDS 155,197
RECEIVABLE
INTEREST 75,093
RECEIVABLE
REDEMPTION FEES 350
RECEIVABLE
OTHER 62,732
RECEIVABLES
TOTAL ASSETS 356,930,721
LIABILITIES
PAYABLE FOR $ 1,110,052
FUND SHARES
REDEEMED
ACCRUED 183,082
MANAGEMENT
FEE
OTHER PAYABLES 324,890
AND
ACCRUED
EXPENSES
COLLATERAL ON 2,400,000
SECURITIES
LOANED,
AT VALUE
TOTAL LIABILITIES 4,018,024
NET ASSETS $ 352,912,697
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 292,893,853
ACCUMULATED (1,013,876)
NET INVESTMENT
(LOSS)
ACCUMULATED 29,918,107
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 31,114,613
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 352,912,697
7,851,395
SHARES
OUTSTANDING
NET ASSET $44.95
VALUE AND
REDEMPTION
PRICE PER
SHARE
($352,912,6
97 (DIVIDED BY)
7,851,395
SHARES)
MAXIMUM $46.34
OFFERING PRICE
PER SHARE
(100/97.00
OF $44.95)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 1,222,949
INCOME
DIVIDENDS
INTEREST 651,648
(INCLUDING
INCOME ON
SECURITIES
LOANED OF
$55,434)
TOTAL INCOME 1,874,597
EXPENSES
MANAGEMENT $ 1,102,938
FEE
TRANSFER AGENT 1,490,200
FEES
ACCOUNTING AND 188,981
SECURITY
LENDING FEES
NON-INTERESTED 834
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 45,187
AND EXPENSES
REGISTRATION FEES 25,537
AUDIT 17,217
LEGAL 1,532
INTEREST 3,719
MISCELLANEOUS 37,992
TOTAL EXPENSES 2,914,137
BEFORE
REDUCTIONS
EXPENSE (25,664) 2,888,473
REDUCTIONS
NET INVESTMENT (1,013,876)
INCOME (LOSS)
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 30,131,763
SECURITIES
FOREIGN (48,671) 30,083,092
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT 5,805,838
SECURITIES
ASSETS AND (7,064) 5,798,774
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 35,881,866
NET INCREASE $ 34,867,990
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 233,224
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 9,425
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 41,910
WITHHELD BY
FSC
EXPENSE $ 24,693
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
CUSTODIAN 929
CREDITS
TRANSFER 42
AGENT CREDITS
$ 25,664
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ (1,013,876) $ 1,291,317
NET
INVESTMENT
INCOME (LOSS)
NET REALIZED 30,083,092 45,424,681
GAIN (LOSS)
CHANGE IN NET 5,798,774 (11,984,796)
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 34,867,990 34,731,202
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO - (1,643,666)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (9,196,271) (63,334,526)
REALIZED GAIN
TOTAL (9,196,271) (64,978,192)
DISTRIBUTIONS
SHARE 55,830,112 194,213,580
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 8,968,860 63,659,054
OF
DISTRIBUTIONS
COST OF SHARES (126,236,043) (307,709,801)
REDEEMED
REDEMPTION 142,818 319,443
FEES
NET INCREASE (61,294,253) (49,517,724)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (35,622,534) (79,764,714)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 388,535,231 468,299,945
PERIOD
END OF PERIOD $ 352,912,697 $ 388,535,231
(INCLUDING
ACCUMULATED
NET INVESTMENT
LOSS OF
$1,013,876
AND $0
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 1,268,785 4,489,283
ISSUED IN 235,092 1,575,164
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (2,948,654) (7,203,986)
NET INCREASE (1,444,777) (1,139,539)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 41.80 $ 44.87 $ 38.34 $ 37.10 $ 34.19 $ 29.22
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET (.12) .12 G .51 .29 .25 .29
INVESTMENT
INCOME (LOSS) D
NET REALIZED 4.29 2.92 9.15 2.54 7.00 5.29
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 4.17 3.04 9.66 2.83 7.25 5.58
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET - (.16) (.39) (.33) (.20) (.18)
INVESTMENT
INCOME
FROM NET (1.04) (5.98) (2.75) (1.27) (4.18) (.48)
REALIZED GAIN
TOTAL (1.04) (6.14) (3.14) (1.60) (4.38) (.66)
DISTRIBUTIONS
REDEMPTION FEES .02 .03 .01 .01 .04 .05
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 44.95 $ 41.80 $ 44.87 $ 38.34 $ 37.10 $ 34.19
END OF PERIOD
TOTAL RETURN B, C 10.47% 7.85% 25.79% 7.98% 21.90% 19.49%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 352,913 $ 388,535 $ 468,300 $ 369,476 $ 371,025 $ 134,338
OF PERIOD
(000 OMITTED)
RATIO OF 1.57% A 1.51% 1.52% 1.56% 1.54% 1.74% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.55% A, E 1.47% E 1.52% 1.55% E 1.53% E 1.74% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET (.55)% A .27% 1.17% .77% .64% 1.16% A
INVESTMENT
INCOME (LOSS)
TO AVERAGE NET
ASSETS
PORTFOLIO 117% A 175% 89% 107% 241% 115% A
TURNOVER RATE
AVERAGE $ .0035 $ .0321
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER. G INVEST
MENT INCOME PER
SHARE REFLECTS A
SPECIAL DIVIDEND
WHICH AMOUNTED
TO $.07 PER
SHARE.
UTILITIES GROWTH PORTFOLIO
PERFORMANCE AND INVESTMENT SUMMARY
PERFORMANCE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value), but does not include certain fees paid by
shareholders upon exchange or redemption.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 MONTHS YEAR YEARS YEARS
UTILITIES GROWTH 5.33% 24.15% 79.18% 240.64%
UTILITIES GROWTH 2.17% 20.42% 73.80% 230.42%
(INCL. 3% SALES CHARGE)
S&P 500 14.78% 40.65% 146.47% 266.19%
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 the fund's returns to the performance of the
S&P 500 - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvestment of dividends and capital gains, if
any, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
UTILITIES GROWTH 24.15% 12.37% 13.04%
UTILITIES GROWTH 20.42% 11.69% 12.70%
(INCL. 3% SALES CHARGE)
S&P 500 40.65% 19.77% 13.86%
AVERAGE ANNUAL RETURNS take the fund's 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 LONG-TERM GROWTH AND
SHORT-TERM VOLATILITY. UNLIKE THE BROADER MARKET,
HOWEVER, SOME SECTORS MAY NOT HAVE A HISTORY
OF GROWTH IN THE LONG RUN. AND, AS WITH ALL STOCK
FUNDS, THE SHARE PRICE AND RETURN OF A FUND THAT
INVESTS IN A SECTOR WILL VARY. THAT MEANS IF YOU
SELL YOUR SHARES DURING A SECTOR DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN IDENTIFY A
SECTOR THAT IS ABOUT TO EXPERIENCE RAPID GROWTH
YOU MAY HAVE THE POTENTIAL FOR ABOVE-AVERAGE
GAINS.
(CHECKMARK)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970831 19970909 151200 S00000000000001
Utilities Growth S&P 500
00065 SP001
1987/08/31 9700.00 10000.00
1987/09/30 9621.75 9781.00
1987/10/31 9041.95 7674.17
1987/11/30 8739.60 7041.82
1987/12/31 8815.08 7577.70
1988/01/31 9576.88 7896.72
1988/02/29 9501.83 8264.71
1988/03/31 9231.63 8009.33
1988/04/30 9257.90 8098.24
1988/05/31 9546.86 8168.69
1988/06/30 9798.29 8543.63
1988/07/31 9767.19 8511.17
1988/08/31 9751.75 8221.79
1988/09/30 10091.48 8572.04
1988/10/31 10303.81 8810.34
1988/11/30 10284.50 8684.35
1988/12/31 10265.72 8836.33
1989/01/31 10749.28 9483.15
1989/02/28 10681.89 9247.02
1989/03/31 10864.22 9462.47
1989/04/30 11423.09 9953.57
1989/05/31 11966.10 10356.69
1989/06/30 12268.35 10297.66
1989/07/31 12940.19 11227.54
1989/08/31 12997.20 11447.60
1989/09/30 13184.50 11400.66
1989/10/31 13123.43 11136.17
1989/11/30 13555.04 11363.35
1989/12/31 14271.68 11636.07
1990/01/31 13567.25 10855.29
1990/02/28 13542.82 10995.32
1990/03/31 13469.53 11286.70
1990/04/30 12907.62 11004.53
1990/05/31 13579.47 12077.47
1990/06/30 13740.39 11995.34
1990/07/31 13853.18 11956.96
1990/08/31 13092.85 10876.05
1990/09/30 13126.27 10346.39
1990/10/31 13798.87 10301.90
1990/11/30 14162.33 10967.40
1990/12/31 14350.82 11273.39
1991/01/31 14287.54 11764.91
1991/02/28 14903.42 12606.10
1991/03/31 15072.15 12911.17
1991/04/30 15004.66 12942.15
1991/05/31 15008.88 13501.25
1991/06/30 14826.82 12882.90
1991/07/31 15309.34 13483.24
1991/08/31 15660.28 13802.79
1991/09/30 16142.80 13572.29
1991/10/31 16366.52 13754.15
1991/11/30 16555.15 13199.86
1991/12/31 17368.51 14709.93
1992/01/31 16833.88 14436.32
1992/02/29 16710.51 14623.99
1992/03/31 16536.87 14338.83
1992/04/30 16989.24 14760.39
1992/05/31 17318.25 14832.71
1992/06/30 17518.58 14611.71
1992/07/31 18450.07 15209.33
1992/08/31 18440.62 14897.53
1992/09/30 18539.91 15073.32
1992/10/31 18535.18 15126.08
1992/11/30 18662.85 15641.88
1992/12/31 19208.24 15834.28
1993/01/31 19534.98 15967.28
1993/02/28 20539.94 16184.44
1993/03/31 21094.41 16525.93
1993/04/30 20979.12 16126.00
1993/05/31 21024.12 16558.18
1993/06/30 21829.08 16606.20
1993/07/31 22079.07 16539.77
1993/08/31 23039.03 17166.63
1993/09/30 23039.03 17034.45
1993/10/31 22804.04 17387.06
1993/11/30 21689.09 17221.88
1993/12/31 21617.85 17430.27
1994/01/31 22060.80 18022.90
1994/02/28 21059.86 17534.48
1994/03/31 20300.53 16769.97
1994/04/30 20884.50 16984.63
1994/05/31 20467.51 17263.18
1994/06/30 20402.91 16840.23
1994/07/31 20990.21 17392.59
1994/08/31 20907.99 18105.69
1994/09/30 20373.54 17662.10
1994/10/31 20631.96 18059.49
1994/11/30 19886.08 17401.77
1994/12/31 20015.82 17659.84
1995/01/31 20832.67 18117.75
1995/02/28 21104.95 18823.80
1995/03/31 21189.66 19379.29
1995/04/30 21928.28 19950.01
1995/05/31 22267.60 20747.42
1995/06/30 22485.73 21229.38
1995/07/31 23091.65 21933.35
1995/08/31 23679.40 21988.40
1995/09/30 24806.41 22916.31
1995/10/31 25048.78 22834.50
1995/11/30 25600.17 23836.93
1995/12/31 26899.16 24296.03
1996/01/31 27183.02 25123.07
1996/02/29 26553.59 25355.96
1996/03/31 26319.09 25600.14
1996/04/30 27381.75 25977.48
1996/05/31 27401.57 26647.44
1996/06/30 27824.35 26748.97
1996/07/31 26608.85 25567.20
1996/08/31 26615.46 26106.41
1996/09/30 27097.69 27575.68
1996/10/31 28233.92 28336.22
1996/11/30 29561.72 30478.15
1996/12/31 29956.49 29874.38
1997/01/31 30857.23 31740.93
1997/02/28 31369.02 31989.78
1997/03/31 29704.01 30675.32
1997/04/30 30767.15 32506.64
1997/05/31 32789.83 34485.64
1997/06/30 33790.67 36030.60
1997/07/31 34595.54 38897.55
1997/08/29 33041.79 36618.51
IMATRL PRASUN SHR__CHT 19970831 19970909 151217 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Select Utilities Growth Portfolio on August 31,
1987, and the current maximum 3% sales charge was paid. As the chart
shows, by August 31, 1997, the value of the investment would have
grown to $33,042 - a 230.42% increase on the initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $36,619 - a 266.19% increase.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S
INVESTMENTS
SBC COMMUNICATIONS, INC. 9.5
WORLDCOM, INC. 9.3
BELLSOUTH CORP. 4.8
BELL ATLANTIC CORP. 4.7
AMERITECH CORP. 4.5
AES CORP. 4.2
GTE CORP. 4.0
U.S. WEST COMMUNICATIONS GROUP 3.3
AIRTOUCH COMMUNICATIONS, INC. 3.2
MCI COMMUNICATIONS CORP. 3.2
TOP INDUSTRIES AS OF AUGUST 31, 1997
TELEPHONE SERVICES 50.7%
ELECTRIC POWER 10.1%
GAS DISTRIBUTION 8.2%
GAS TRANSMISSION
& DISTRIBUTION 5.8%
GAS TRANSMISSION 4.7%
ALL OTHERS 20.5%
ROW: 1, COL: 1, VALUE: 20.5
ROW: 1, COL: 2, VALUE: 4.7
ROW: 1, COL: 3, VALUE: 5.8
ROW: 1, COL: 4, VALUE: 8.199999999999999
ROW: 1, COL: 5, VALUE: 10.1
ROW: 1, COL: 6, VALUE: 50.7
*
* INCLUDES SHORT-TERM INVESTMENTS
% OF FUND'S INVESTMENTS
UTILITIES GROWTH PORTFOLIO
FUND TALK: THE MANAGERS' OVERVIEW
NOTE TO SHAREHOLDERS: On August 18, 1997, Nick Thakore (right) became
Portfolio Manager of Fidelity Select Utilities Growth Portfolio. The
following is an interview with John Muresianu (left), who managed the
fund during most of the period covered by this report, with comments
from Nick Thakore on his outlook.
Q. JOHN, HOW DID THE FUND PERFORM?
J.M. For the six months that ended August 31, 1997, the fund had a
total return of 5.33%, while the Standard & Poor's 500 Index returned
14.78%. For the 12 months that ended August 31, 1997, the fund
returned 24.15% and the S&P 500 returned 40.65%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
J.M. The sector underperformed the broad market as investors continued
to be concerned about how ongoing deregulation would affect utilities
companies, especially in the telephone and electric industries.
Overall, though, the fund benefited from two factors. First, it had a
solid concentration in telephone and gas utility stocks. During the
period, telephone utility stocks performed the best among the three
industries, with gas utility stocks and electric utility stocks
falling in line, respectively. Second, strong individual stock
selection had a positive effect on performance as well.
Q. WHAT HELPED TELEPHONE STOCKS PERFORM THE BEST AMONG THE UTILITY
SECTOR?
J.M. In general, telephone companies posted the best earnings growth -
and stock prices generally follow earnings - even though there was
some concern about future competition due to deregulation. Gas
companies, on the other hand, after performing quite well in 1995 and
1996, were hurt by weaker-than-expected natural gas prices due to
unexpectedly mild weather. Nevertheless, the price of natural gas did
not fall to levels that would have caused major problems, and the
expectation of industry consolidation helped sustain stock prices
somewhat. Stocks in the electric utility industry were stalled by
three factors: These stocks tend to trade in concert with bonds and,
because of an uncertain interest-rate backdrop, the bond market proved
to be fairly volatile; operating costs have increased for most
electric utilities with nuclear power plants as a result of regulatory
pressure; and earnings suffered due to the mild weather over the
period.
Q. ELECTRIC UTILITY STOCKS LAGGED THE PHONE AND GAS UTILITIES, YET YOU
INCREASED THE FUND'S INVESTMENTS IN THE ELECTRICS. WHY WAS THAT?
J.M. In my judgment, selected electric utility stocks were oversold
and became too cheap to ignore. I took profits by selling stocks in
other areas to replace them with a higher weighting in these
attractive electric stocks.
Q. WHAT WERE SOME OF THE FUND'S STRONGER-PERFORMING STOCKS OVER THE
PERIOD? WHAT WERE THE DISAPPOINTMENTS?
J.M. WorldCom was one of the fund's top performers. It posted very
strong earnings growth as it consistently beat expectations. AirTouch
Communications also proved to be a positive contributor, turning
around its earnings more than the market expected. It was helped by
strong domestic and international subscriber additions for its
wireless communications services. Sprint also did well, as many
investors anticipated that the company would be acquired. On the minus
side, Enron was hurt by declining natural gas prices and disappointing
earnings from its pipeline and trading operations.
Q. TURNING TO YOU, NICK, WHAT'S YOUR OUTLOOK?
A. Deregulation - in all of the utilities industries, but especially
in the telephones - should lead to tremendous changes in the
competitive landscape. My goal will be to find the companies that will
be the net beneficiaries of this competition and that show superior
earnings growth relative to their group. In the past, there hasn't
been much of a difference among many of the stocks in the sector, but
we're entering an era where the differences should become much more
dramatic. With the sector going through such significant changes, it
will be important to differentiate between the winners and the losers.
I'll focus on newer companies that may be less vulnerable to
deregulation, as well as companies that are likely to be acquired
through consolidation.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: DECEMBER 10, 1981
FUND NUMBER: 065
TRADING SYMBOL: FSUTX
SIZE: AS OF AUGUST 31, 1997, MORE THAN
$223 MILLION
MANAGER: NICK THAKORE, SINCE AUGUST 1997;
MANAGER, FIDELITY SELECT TELECOMMUNICATIONS
PORTFOLIO, SINCE 1996; FIDELITY UTILITIES FUND AND
FIDELITY ADVISOR UTILITIES GROWTH FUND, SINCE
AUGUST 1997; JOINED FIDELITY IN 1993
(CHECKMARK)
UTILITIES GROWTH PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 94.1%
SHARES VALUE (NOTE 1)
BROADCASTING - 0.0%
CABLE TV OPERATORS - 0.0%
TCI Satellite Entertainment, Inc. Class A (a) 450 $ 3,108 87229810
Tele Communications, Inc. (TCI), Series A (a) 4,300 75,250 87924V10
78,358
CELLULAR - 3.8%
CELLULAR & COMMUNICATION SERVICES - 3.8%
AirTouch Communications, Inc. (a) 212,300 7,178,394 00949T10
Cellnet Data Systems, Inc. (a) 23,700 284,400 15115M10
Telephone & Data Systems, Inc. 7,706 304,387 87943310
Vodafone Group PLC sponsored ADR 14,400 733,500 92857T10
8,500,681
COAL - 0.3%
MAPCO, Inc. 21,500 645,000 56509710
COMMUNICATIONS EQUIPMENT - 1.8%
TELEPHONE EQUIPMENT - 1.8%
Lucent Technologies, Inc. 52,456 4,085,011 54946310
COMPUTER SERVICES & SOFTWARE - 0.2%
DATA PROCESSING - 0.2%
NCR Corp. (a) 10,156 359,903 62886E10
ELECTRIC UTILITY - 13.1%
ELECTRIC & OTHER SERVICES - 3.0%
DPL, Inc. 31,600 748,525 23329310
Enova Corp. 26,900 645,600 29355210
Hidroelectrica de Cantabrico SA 10,150 381,764 42899999
IES Industries, Inc. 9,600 294,000 44949M10
LG&E Energy Corp. 8,300 187,788 50191710
Montana Power Co. 29,100 671,119 61208510
NIPSCO Industries, Inc. 25,000 1,020,313 62914010
PECO Energy Co. 30,000 714,375 69330410
PacifiCorp. 42,500 881,875 69511410
Public Service Co. of New Mexico 30,600 558,450 74449910
Rochester Gas & Electric Corp. 8,400 197,925 77136710
Sierra Pacific Resources 5,100 159,375 82642510
Utilicorp United, Inc. 3,838 114,181 91800510
WPL Holdings, Inc. 900 24,919 92930510
6,600,209
ELECTRIC POWER - 10.1%
AES Corp. (a) 254,298 9,409,026 00130H10
American Electric Power Co., Inc. 14,100 615,994 02553710
Baycorp Holdings Ltd. (a) 1,629 13,236 07272810
Boston Edison Co. 9,500 268,375 10059910
Central & South West Corp. 38,000 786,125 15235710
Central Louisiana Electric Co., Inc. 35,806 939,908 15389760
CESC Ltd. GDR (c) 32,600 32,600 15712810
DQE, Inc. 28,050 890,588 23329J10
Duke Energy Corp. 113,108 5,478,669 26439910
Entergy Corp. 15,200 377,150 29364G10
Houston Industries, Inc. 9,636 195,129 44216110
Kansas City Power & Light Co. 8,100 231,863 48513410
Korea Electric Power Corp.
sponsored ADR 19,000 309,938 50063110
Pinnacle West Capital Corp. 22,700 733,494 72348410
Southern Co. 19,000 400,188 84258710
TECO Energy, Inc. 6,600 158,813 87237510
Texas Utilities Co. 39,757 1,386,525 88284810
United Illuminating Co. 7,600 265,525 91063710
22,493,146
TOTAL ELECTRIC UTILITY 29,093,355
SHARES VALUE (NOTE 1)
GAS - 19.8%
GAS & OTHER SERVICES - 1.1%
MDU Resources Group, Inc. 49,300 $ 1,180,119 55269010
UGI Corp. 41,051 1,072,457 90268110
Western Resources, Inc. 6,200 207,700 95942510
2,460,276
GAS DISTRIBUTION - 8.2%
Eastern Enterprises Co. 65,500 2,337,531 27637F10
Energen Corp. 31,900 1,150,394 29265N10
K N Energy, Inc. 60,600 2,514,900 48262010
MCN Corp. 182,400 5,597,400 55267J10
NUI Corp. 16,600 381,800 62943010
National Fuel Gas Co. 7,400 328,838 63618010
New Jersey Resources Corp. 8,200 262,913 64602510
NICOR, Inc. 16,100 584,631 65408610
Northwest Natural Gas Co. 4,150 103,750 66765510
Pacific Enterprises 126,700 4,173,181 69423210
Peoples Energy Corp. 9,200 346,725 71103010
WICOR, Inc. 11,200 443,100 92925310
18,225,163
GAS TRANSMISSION - 4.7%
Enron Corp. 83,696 3,227,527 29356110
ONEOK, Inc. 28,759 931,073 68267810
Sonat, Inc. 81,000 4,034,813 83541510
USX-Delhi Group 5,400 72,225 90336X10
Williams Companies, Inc. 49,334 2,297,114 96945710
10,562,752
GAS TRANSMISSION & DISTRIBUTION - 5.8%
Bay State Gas Co. 13,400 391,113 07261260
Columbia Gas System, Inc. (The) 65,000 4,290,000 19764810
Consolidated Natural Gas Co. 17,300 1,021,781 20961510
Equitable Resources, Inc. 17,550 536,372 29454910
Questar Corp. 116,300 4,652,000 74835610
Tejas Gas Corp (a). 34,995 1,662,263 87907510
Yankee Energy System, Inc. 15,700 370,913 98477910
12,924,442
TOTAL GAS 44,172,633
HOLDING COMPANIES - 0.6%
CINergy Corp. 42,206 1,395,436 17247410
INDEPENDENT POWER - 0.0%
STEAM SUPPLY - 0.0%
Bonneville Pacific Corp. (a) 10,700 21,400 09890410
OIL & GAS - 3.8%
CRUDE PETROLEUM & GAS - 1.2%
Enserch Exploration, Inc. 264,962 2,384,658 29356V10
Nuevo Energy Corp. (a) 800 40,650 67050910
Occidental Petroleum Corp. 11,500 269,531 67459910
2,694,839
PETROLEUM REFINERS - 2.6%
Coastal Corp. (The) 97,800 5,647,940 19044110
TOTAL OIL & GAS 8,342,779
TELEPHONE SERVICES - 50.7%
AT&T Corp. 80,500 3,139,500 00195710
ALLTEL Corp. 7,000 221,375 02003910
Ameritech Corp. 160,400 10,055,075 03095410
BCE, Inc. 55,520 1,574,284 05534B10
Bell Atlantic Corp. 145,084 10,500,455 07785310
BellSouth Corp. 243,600 10,718,400 07986010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TELEPHONE SERVICES - CONTINUED
Cincinnati Bell, Inc. 26,600 $ 716,538 17187010
Frontier Corp. 800 17,650 35906P10
GTE Corp. 201,500 8,979,344 36232010
MCI Communications Corp. 249,000 7,096,500 55267310
SBC Communications, Inc. 390,196 21,216,908 78387G10
Sprint Corp. 144,800 6,805,600 85206110
U.S. West Communications Group 204,159 7,311,444 91288910
U.S. West Media Group (a) 192,359 3,847,180 91288920
WorldCom, Inc. (a) 687,700 20,588,019 98155K10
112,788,272
TOTAL COMMON STOCKS
(Cost $162,471,312) 209,482,828
CONVERTIBLE PREFERRED STOCKS - 0.7%
ELECTRIC UTILITY - 0.7%
COMBINATION UTILITIES - 0.7%
Citizens Utilities Trust $2.50
(Cost $1,620,000) 32,400 1,445,850 17735120
CASH EQUIVALENTS - 5.2%
Taxable Central Cash Fund (b)
(Cost $11,619,511) 11,619,511 11,619,511 31635A10
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $175,710,823) $ 222,548,189
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $32,600 or 0.0%
of net assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $4,922,694 and $58,038,140 respectively (see Note 3 of
Notes to Financial Statements).
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these
affiliated firms were $5,309 for the period (see Note 4 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $175,862,642. Net unrealized appreciation
aggregated $46,685,547, of which $48,575,288 related to appreciated
investment securities and $1,889,741 related to depreciated investment
securities.
UTILITIES GROWTH PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
(UNAUDITED)
ASSETS
INVESTMENT IN $ 222,548,189
SECURITIES, AT
VALUE
(COST
$175,710,82
3) - SEE
ACCOMPANYIN
G SCHEDULE
RECEIVABLE FOR 4,019,165
INVESTMENTS
SOLD
RECEIVABLE FOR 130,441
FUND SHARES
SOLD
DIVIDENDS 409,185
RECEIVABLE
INTEREST 26,927
RECEIVABLE
REDEMPTION FEES 362
RECEIVABLE
TOTAL ASSETS 227,134,269
LIABILITIES
PAYABLE TO $ 33,385
CUSTODIAN
BANK
PAYABLE FOR 2,503,192
INVESTMENTS
PURCHASED
PAYABLE FOR 955,624
FUND SHARES
REDEEMED
ACCRUED 116,384
MANAGEMENT
FEE
OTHER PAYABLES 169,271
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 3,777,856
NET ASSETS $ 223,356,413
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 162,551,866
UNDISTRIBUTED 1,681,031
NET INVESTMENT
INCOME
ACCUMULATED 12,286,243
UNDISTRIBUTED
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
AND FOREIGN
CURRENCY
TRANSACTIONS
NET UNREALIZED 46,837,273
APPRECIATION
(DEPRECIATION)
ON
INVESTMENTS
AND ASSETS
AND LIABILITIES
IN
FOREIGN
CURRENCIES
NET ASSETS, FOR $ 223,356,413
4,731,014
SHARES
OUTSTANDING
NET ASSET $47.21
VALUE AND
REDEMPTION
PRICE PER
SHARE
($223,356,4
13 (DIVIDED BY)
4,731,014
SHARES)
MAXIMUM $48.67
OFFERING PRICE
PER SHARE
(100/97.00
OF $47.21)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
(UNAUDITED)
INVESTMENT $ 3,139,937
INCOME
DIVIDENDS
INTEREST 111,026
TOTAL INCOME 3,250,963
EXPENSES
MANAGEMENT $ 713,494
FEE
TRANSFER AGENT 728,643
FEES
ACCOUNTING FEES 119,740
AND EXPENSES
NON-INTERESTED 537
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 13,078
AND EXPENSES
REGISTRATION FEES 23,460
AUDIT 13,882
LEGAL 512
MISCELLANEOUS 1,401
TOTAL EXPENSES 1,614,747
BEFORE
REDUCTIONS
EXPENSE (16,415) 1,598,332
REDUCTIONS
NET INVESTMENT 1,652,631
INCOME
REALIZED AND
UNREALIZED
GAIN (LOSS)
NET REALIZED
GAIN (LOSS) ON:
INVESTMENT 12,409,982
SECURITIES
FOREIGN (494) 12,409,488
CURRENCY
TRANSACTIONS
CHANGE IN NET
UNREALIZED
APPRECIATION
(DEPRECIATION)
ON:
INVESTMENT (1,819,234)
SECURITIES
ASSETS AND (57) (1,819,291)
LIABILITIES IN
FOREIGN
CURRENCIES
NET GAIN (LOSS) 10,590,197
NET INCREASE $ 12,242,828
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 104,820
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 12,846
CHARGES
WITHHELD
BY FDC
EXCHANGE FEES $ 23,453
WITHHELD BY
FSC
EXPENSE $ 16,390
REDUCTIONS
DIRECTED
BROKERAGE
ARRANGEMENTS
TRANSFER 25
AGENT CREDITS
$ 16,415
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 1,652,631 $ 4,110,757
NET
INVESTMENT
INCOME
NET REALIZED 12,409,488 12,598,841
GAIN (LOSS)
CHANGE IN NET (1,819,291) 21,791,297
UNREALIZED
APPRECIATION
(DEPRECIATION)
NET INCREASE 12,242,828 38,500,895
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (984,947) (3,870,074)
SHAREHOLDERS
FROM NET
INVESTMENT
INCOME
FROM NET (4,614,511) (20,286,738)
REALIZED GAIN
TOTAL (5,599,458) (24,156,812)
DISTRIBUTIONS
SHARE 21,469,535 128,552,346
TRANSACTIONS
NET PROCEEDS
FROM SALES OF
SHARES
REINVESTMENT 5,426,243 23,344,588
OF
DISTRIBUTIONS
COST OF SHARES (67,082,856) (176,372,790)
REDEEMED
REDEMPTION 55,745 208,569
FEES
NET INCREASE (40,131,333) (24,267,287)
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (33,487,963) (9,923,204)
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 256,844,376 266,767,580
PERIOD
END OF PERIOD $ 223,356,413 $ 256,844,376
(INCLUDING
UNDISTRIBUTE
D NET
INVESTMENT
INCOME OF
$1,681,03
1 AND
$1,654,36
0,
RESPECTIVELY)
OTHER
INFORMATION
SHARES
SOLD 463,544 2,986,768
ISSUED IN 128,919 570,027
REINVESTMENT
OF
DISTRIBUTIONS
REDEEMED (1,448,344) (4,168,871)
NET INCREASE (855,881) (612,076)
(DECREASE)
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 45.97 $ 43.03 $ 34.88 $ 36.61 $ 41.49 $ 37.18
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET .32 .73 1.10 1.13 1.33 1.19
INVESTMENT
INCOME D
NET REALIZED 1.99 6.41 7.86 (1.17) (.16) 6.14
AND
UNREALIZED
GAIN (LOSS)
TOTAL FROM 2.31 7.14 8.96 (.04) 1.17 7.33
INVESTMENT
OPERATIONS
LESS
DISTRIBUTIONS
FROM NET (.19) (.70) (.84) (1.05) (1.13) (1.33)
INVESTMENT
INCOME
FROM NET (.89) (3.54) - (.67) (4.94) (1.70)
REALIZED GAIN
TOTAL (1.08) (4.24) (.84) (1.72) (6.07) (3.03)
DISTRIBUTIONS
REDEMPTION FEES .01 .04 .03 .03 .02 .01
ADDED TO PAID
IN CAPITAL
NET ASSET VALUE, $ 47.21 $ 45.97 $ 43.03 $ 34.88 $ 36.61 $ 41.49
END OF PERIOD
TOTAL RETURN B, C 5.33% 18.13% 25.82% .21% 2.53% 20.90%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 223,356 $ 256,844 $ 266,768 $ 237,635 $ 250,522 $ 290,718
OF PERIOD
(000 OMITTED)
RATIO OF 1.34% A 1.47% 1.39% 1.43% 1.36% 1.42% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 1.33% A, E 1.46% E 1.38% E 1.42% E 1.35% E 1.42% A
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET 1.38% A 1.73% 2.76% 3.24% 3.11% 3.71% A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
PORTFOLIO 4% A 31% 65% 24% 61% 34% A
TURNOVER RATE
AVERAGE $ .0394 $ .0287
COMMISSION
RATE F
</TABLE>
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 FMR
OR THE FUND HAS
ENTERED INTO
VARYING
ARRANGEMENTS
WITH THIRD PARTIES
WHO EITHER PAID OR
REDUCED A PORTION
OF THE FUND'S
EXPENSES (SEE
NOTE 8 OF NOTES
TO FINANCIAL
STATEMENTS). F
FOR FISCAL YEARS
BEGINNING ON OR
AFTER SEPTEMBER
1, 1995, A FUND
IS REQUIRED TO
DISCLOSE ITS
AVERAGE
COMMISSION RATE
PER SHARE FOR
SECURITY TRADES ON
WHICH
COMMISSIONS ARE
CHARGED. THIS
AMOUNT MAY VARY
FROM PERIOD TO
PERIOD AND FUND TO
FUND DEPENDING
ON THE MIX OF
TRADES EXECUTED IN
VARIOUS MARKETS
WHERE TRADING
PRACTICES AND
COMMISSION RATE
STRUCTURES MAY
DIFFER.
MONEY MARKET PORTFOLIO
PERFORMANCE
PERFORMANCE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend 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, 1997 MONTHS YEAR YEARS YEARS
MONEY MARKET 2.60% 5.14% 23.54% 72.20%
MONEY MARKET -0.48% 1.99% 19.83% 67.03%
(INCL. 3% SALES CHARGE)
ALL TAXABLE 2.53% 5.02% 22.98% 70.73%
MONEY MARKET FUNDS AVERAGE
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 10 years. For example, if you had 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 all taxable money market funds average,
which reflects the performance of 867 all taxable money market funds
with similar objectives tracked by IBC Financial Data, Inc. over the
past one year.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
AUGUST 31, 1997 YEAR YEARS YEARS
MONEY MARKET 5.14% 4.32% 5.59%
MONEY MARKET 1.99% 3.68% 5.26%
(INCL. 3% SALES CHARGE)
ALL TAXABLE 5.02% 4.22% 5.49%
MONEY MARKET FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's 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: 5.25
ROW: 1, COL: 2, VALUE: 5.04
ROW: 1, COL: 3, VALUE: 2.67
ROW: 2, COL: 1, VALUE: 5.25
ROW: 2, COL: 2, VALUE: 5.02
ROW: 2, COL: 3, VALUE: 2.66
ROW: 3, COL: 1, VALUE: 4.71
ROW: 3, COL: 2, VALUE: 4.84
ROW: 3, COL: 3, VALUE: 2.63
ROW: 4, COL: 1, VALUE: 4.819999999999999
ROW: 4, COL: 2, VALUE: 4.88
ROW: 4, COL: 3, VALUE: 2.65
ROW: 5, COL: 1, VALUE: 4.87
ROW: 5, COL: 2, VALUE: 4.83
ROW: 5, COL: 3, VALUE: 2.68
6% -
4% -
2% -
0%
MONEY MARKET
ALL TAXABLE
MONEY MARKET
FUNDS AVERAGE
MMDA
9/2/97 6/3/97 2/25/97 12/3/96 9/3/96
MONEY MARKET 5.09% 5.12% 4.71% 4.82% 4.87%
All Taxable
Money Market
Funds Average 5.04% 5.02% 4.84% 4.88% 4.83%
9/3/97 5/28/97 2/26/97 11/27/96 8/28/96
MMDA 2.67% 2.66% 2.63% 2.65% 2.68%
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 all
taxable money market funds average and the bank money market deposit
account average (MMDA). Figures for the all taxable money market funds
average are from IBC Financial Data, Inc. 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 market 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, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX
MONTHS?
A. Just before the beginning of the period, Federal Reserve Board
Chairman Alan Greenspan, in testimony before both houses of Congress,
warned of the risk of inflation picking up if the Fed failed to
respond to an economy that was growing at too rapid a pace. Growth in
real gross domestic product (GDP) - meaning stated growth minus
inflation - in the first quarter was unusually strong at an annual
rate of 4.9%, and marked the first time in three years the real GDP
grew in excess of 3% in back-to-back quarters. Given this momentum in
the economy, the Fed chose to raise the rate banks charge each other
for overnight loans - known as the fed funds rate - by 0.25% to 5.50%
at its March meeting. However, when the early evidence suggested that
growth in the second quarter would slow, the Fed chose not raise rates
in subsequent meetings.
Q. WHAT'S HAPPENED SINCE THEN?
A. Growth in the second quarter came in at a 3.3% annual rate, showing
that the economy continued to grow at an above-trend rate - that is, a
rate that is believed to be above its capacity to expand without
generating inflation. Much of this strength stemmed from export growth
and from inventory investment. While growth in inventories may leave
some with the impression that third- and fourth-quarter growth may
soften, our research indicates that most companies purposely increased
their inventories and have no plans to alter their production levels
going forward. In addition, job and income growth remain strong, and
consumer confidence is at or near record highs. So, all signs point to
a continuation of consumer spending that in turn will continue to
propel the economy. However, there has been little sign of inflation:
The most recent data showed the consumer price index (CPI) up at only
a 2.2% annual rate. Because of the lack of inflation, the Fed has held
off raising interest rates since its March meeting, apparently
abandoning the notion of heading off inflation before it emerges. At
this point, the Fed appears willing to respond with higher interest
rates only if actual evidence of inflation appears.
Q. GIVEN THIS BACKDROP, WHAT STRATEGY DID YOU PURSUE?
A. The fund started the period with an average maturity in the
mid-60-day range. Progressing through March - when the Fed raised
rates - I brought the maturity back to the low 50-day-range, a more
neutral stance. In late April and early May, yields in the market
started to factor in a more aggressive Fed posture than I expected to
occur. As a result, I purchased more longer-term securities and
extended the average maturity to the low 70s. As each of its meetings
passed without the Fed taking action, it became evident that the Fed
was going to hold pat in spite of strong economic growth, as long as
inflation remained tame. Consequently, longer-term rates fell, with
yields for shorter-term maturities becoming more attractive on a
relative basis. In turn, the fund's maturity crept back down to 49
days by the end of the period, because we weren't being rewarded for
purchasing investments on the longer end of the spectrum.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1997, was 5.12%, compared
to 4.75% six months ago. The fund's total return during the six-month
period was 2.60%, compared to 2.53% for the all taxable money market
funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The Fed has been patient, willing to accept strong economic growth
because trends in the broader inflation indices have been so
favorable. The risk is that the best of the inflation news is behind
us and that some degradation is experienced before the end of the
year. If we continue to experience robust, above-trend economic growth
and low unemployment, combined with any indication of emerging
inflation, the Fed - which maintains a bias toward raising rates -
will be quick to respond. In the meantime, while there is some chance
the Fed will raise rates before the year is out, the most likely
timing is early next year when wage pressures are likely to become
evident.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
START DATE: August 30, 1985
FUND NUMBER: 085
TRADING SYMBOL: FSMMKT
SIZE: as of August 31, 1997, more than
$808 million
MANAGER: John Todd, since 1991; manager,
Fidelity Cash Reserves, since April 1997;
Spartan Money Market Fund, since 1989;
short-term and money market investment for the
Fidelity Asset Manager funds, since 1996;
joined
Fidelity in 1981
(checkmark)
MONEY MARKET PORTFOLIO
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
CERTIFICATES OF DEPOSIT - 44.1%
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
DOMESTIC CERTIFICATES OF DEPOSIT - 0.3%
CHASE MANHATTAN BANK (U.S.A.) DELAWARE
9/9/97 5.57% $ 3,000,000 $ 3,000,000
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 38.0%
BANK OF TOKYO - MITSUBISHI LTD.
9/30/97 5.76 4,000,000 4,000,000
BANQUE NATIONALE DE PARIS
9/22/97 5.56 2,000,000 2,000,000
9/24/97 5.58 5,000,000 5,000,437
10/3/97 5.88 3,000,000 2,999,342
BARCLAYS BANK, PLC
9/22/97 5.55 5,000,000 5,000,000
BAYERISCHE HYPOTHEKEN-UND WESCHEL
9/8/97 5.53 16,000,000 16,000,000
9/23/97 5.85 10,000,000 9,999,888
BAYERISCHE LANDESBANK GIROZENTRALE
7/17/98 5.90 5,000,000 4,998,288
CAISSE NATIONALE DE CREDIT AGRICOLE
9/8/97 5.57 3,000,000 3,000,000
10/20/97 5.60 4,000,000 4,000,000
CANADIAN IMPERIAL BANK OF COMMERCE
9/22/97 5.53 40,000,000 40,000,000
COMMERZBANK, GERMANY
9/23/97 5.85 10,000,000 9,999,888
DEUTSCHE BANK, GERMANY
9/8/97 5.64 1,000,000 1,000,002
9/22/97 5.56 6,000,000 6,000,000
4/14/98 6.25 25,000,000 24,985,306
DRESDNER BANK A.G.
9/8/97 5.53 5,000,000 5,000,000
LANDESBANK HESSEN - THURINGEN
1/27/98 5.80 6,000,000 5,998,768
MIDLAND BANK, PLC
9/5/97 5.57 2,000,000 2,000,020
NATIONAL BANK OF CANADA
9/11/97 5.66 5,000,000 5,000,019
NATIONAL WESTMINSTER BANK, PLC
10/3/97 5.94 20,000,000 19,998,261
RABOBANK NEDERLAND, N.V.
3/20/98 6.00 5,000,000 4,999,214
3/24/98 6.05 5,000,000 4,998,398
ROYAL BANK OF CANADA
1/14/98 5.80 17,000,000 16,999,085
SANWA BANK, LTD.
9/25/97 5.75 4,000,000 4,000,026
10/2/97 5.65 3,000,000 3,000,000
SOCIETE GENERALE, FRANCE
10/20/97 5.56 24,000,000 24,000,000
2/3/98 5.70 7,700,000 7,698,001
SUMITOMO BANK, LTD.
10/9/97 5.75 1,000,000 1,000,000
SWISS BANK CORP.
12/30/97 6.04 15,000,000 15,000,000
1/20/98 5.70 10,000,000 10,000,000
8/19/98 5.91 5,000,000 4,998,155
8/28/98 5.97 5,000,000 4,997,636
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
WESTDEUTSCHE LANDESBANK
9/16/97 5.53% $ 15,000,000 $ 15,000,000
12/22/97 5.62 2,000,000 2,000,000
295,670,734
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 5.8%
ABBEY NATIONAL, TREASURY SERVICES
9/24/97 5.65 3,000,000 3,000,000
ABN-AMRO BANK
1/14/98 5.70 3,000,000 3,000,100
BANK OF NOVA SCOTIA
9/9/97 5.58 3,000,000 3,000,000
BANQUE BRUXELLES LAMBERT S.A.
10/21/97 5.60 1,000,000 1,000,027
BANQUE NATIONALE DE PARIS
1/7/98 5.72 10,000,000 9,999,276
BARCLAYS BANK, PLC
10/3/97 5.55 8,000,000 8,000,000
BAYERISCHE VEREINSBANK A.G.
9/17/97 5.65 1,000,000 999,994
9/30/97 5.66 5,000,000 5,000,040
1/26/98 5.70 2,000,000 1,999,939
NATIONAL WESTMINSTER BANK, PLC
10/1/97 5.54 4,000,000 3,999,937
RABOBANK NEDERLAND, N.V.
3/9/98 5.96 5,000,000 4,998,766
44,998,079
TOTAL CERTIFICATES OF DEPOSIT 343,668,813
COMMERCIAL PAPER - 35.8%
AC AQUISITION HOLDING CO.
9/9/97 5.58 2,000,000 1,997,542
9/10/97 5.60 1,000,000 998,615
AMERICAN EXPRESS CREDIT CORP.
9/8/97 5.57 10,000,000 9,989,267
ASSET SECURITIZATION COOP. CORP.
9/9/97 5.54 2,000,000 1,997,556
ASSOCIATES CORP. OF NORTH AMERICA
9/17/97 5.65 2,000,000 1,995,049
BANK OF NOVA SCOTIA
9/18/97 5.64 1,000,000 997,374
BELLATLANTIC FINANCIAL SERVICES
9/18/97 5.53 8,000,000 7,979,222
9/25/97 5.53 32,000,000 31,882,667
CIESCO, L.P.
9/3/97 5.57 2,000,000 1,999,387
9/8/97 5.57 2,000,000 1,997,854
CIT GROUP HOLDINGS, INC.
10/2/97 5.54 3,000,000 2,985,792
CREGEM NORTH AMERICA, INC.
9/11/97 5.66 2,000,000 1,996,900
9/18/97 5.65 1,000,000 997,370
9/23/97 5.66 1,000,000 996,590
9/24/97 5.66 1,000,000 996,435
EIGER CAPITAL CORP.
9/4/97 5.56 2,000,000 1,999,078
9/9/97 5.55 4,000,000 3,995,093
COMMERCIAL PAPER - CONTINUED
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
ENTERPRISE FUNDING CORP.
9/5/97 5.60% $ 2,000,000 $ 1,998,767
FINA OIL AND CHEMICAL COMPANY
9/17/97 5.57 1,000,000 997,538
FORD MOTOR CREDIT CORP.
10/17/97 5.57 1,700,000 1,688,053
GENERAL ELECTRIC CAPITAL CORP.
9/22/97 5.54 5,000,000 4,983,958
9/22/97 5.80 7,000,000 6,976,970
9/23/97 5.80 10,000,000 9,965,533
GENERAL ELECTRIC CAPITAL SERVICES, INC.
9/23/97 5.80 10,000,000 9,965,533
GENERAL MOTORS ACCEPTANCE CORP.
9/10/97 5.61 4,000,000 3,994,400
9/15/97 5.55 3,000,000 2,993,549
9/22/97 5.56 1,000,000 996,780
10/14/97 6.00 10,000,000 9,930,484
10/16/97 6.01 2,000,000 1,985,438
10/20/97 6.03 5,000,000 4,960,222
10/29/97 6.02 2,000,000 1,981,166
11/3/97 6.02 3,000,000 2,969,366
GTE CORP.
9/5/97 5.58 2,500,000 2,498,458
9/16/97 5.58 1,000,000 997,688
HOUSEHOLD FINANCE CORP.
9/17/97 5.53 25,000,000 24,938,889
MERRILL LYNCH & CO., INC.
9/23/97 5.54 3,000,000 2,989,898
MORGAN STANLEY DEAN WITTER DISCOVER, INC.
9/23/97 5.58 (a) 5,000,000 5,000,000
10/27/97 5.57 2,000,000 1,982,858
NATIONWIDE BUILDING SOCIETY
10/10/97 5.62 1,000,000 993,998
NORFOLK SOUTHERN CORP.
9/15/97 5.70 1,000,000 997,791
9/18/97 5.73 1,000,000 997,308
10/2/97 5.75 2,000,000 1,990,149
PREFERRED RECEIVABLES FUNDING CORP.
9/15/97 5.53 10,000,000 9,978,572
9/18/97 5.54 6,100,000 6,084,128
9/18/97 5.56 1,000,000 997,393
10/2/97 5.55 10,200,000 10,151,604
SEARS ROEBUCK ACCEPTANCE CORP.
9/17/97 5.56 1,000,000 997,547
TEXTRON, INC.
9/12/97 5.70 1,000,000 998,267
9/18/97 5.71 1,000,000 997,308
9/18/97 5.73 1,000,000 997,318
TRANSAMERICA FINANCIAL CORP.
9/22/97 5.53 10,000,000 9,967,917
TRIPLE A ONE FUNDING CORP.
9/8/97 5.55 2,000,000 1,997,853
9/11/97 5.68 1,000,000 998,444
9/12/97 5.55 11,000,000 10,981,413
9/16/97 5.54 2,000,000 1,995,400
UBS FINANCE, INC.
9/2/97 5.63 34,520,000 34,514,601
UNIFUNDING, INC.
9/10/97 5.68 1,000,000 998,600
TOTAL COMMERCIAL PAPER 278,232,950
FEDERAL AGENCIES - 0.6%
ANNUALIZED YIELD
DUE AT TIME OF PRINCIPAL VALUE
DATE PURCHASE AMOUNT (NOTE 1)
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A)
9/13/97 5.71% $ 5,000,000 $ 4,998,120
BANK NOTES - 1.5%
KEY BANK NATIONAL ASSOCIATION (A)
9/24/97 5.58 4,000,000 3,997,915
MORGAN GUARANTY TRUST CO., NY (A)
9/2/97 5.77 5,000,000 4,998,556
PNC BANK (A)
9/11/97 5.59 3,000,000 2,999,478
TOTAL BANK NOTES 11,995,949
MASTER NOTES (A) - 2.2%
J.P. MORGAN SECURITIES
9/2/97 5.75 17,000,000 17,000,000
MEDIUM-TERM NOTES (A) - 2.3%
BANK ONE, COLUMBUS, N.A.
9/2/97 5.73 6,000,000 5,996,784
GENERAL MOTORS ACCEPTANCE CORP.
11/1/97 5.71 5,000,000 5,000,000
NORWEST CORP.
10/22/97 5.77 4,000,000 4,000,000
PNC BANK
9/27/97 5.59 3,000,000 2,998,715
TOTAL MEDIUM-TERM NOTES 17,995,499
SHORT-TERM NOTES (A) - 2.3%
SMM TRUST (1996-P) (B)
9/16/97 5.66 5,000,000 5,000,000
SMM TRUST (1997-V) (B)
9/26/97 5.63 7,000,000 7,000,000
SMM TRUST (1997-W) (B)
9/16/97 5.64 6,000,000 6,000,000
TOTAL SHORT-TERM NOTES 18,000,000
TIME DEPOSITS - 11.1%
BANK OF TOKYO - MITSUBISHI LTD.
9/2/97 5.63 1,000,000 1,000,000
9/8/97 5.63 2,000,000 2,000,000
9/22/97 5.61 2,000,000 2,000,000
10/2/97 5.66 3,000,000 3,000,000
DEN DANSKE BANK A/S
9/2/97 5.63 35,000,000 35,000,000
FIRST NATIONAL BANK OF CHICAGO
9/2/97 5.63 35,000,000 35,000,000
SUMITOMO BANK, LTD.
9/3/97 5.69 1,000,000 1,000,000
9/9/97 5.66 3,000,000 3,000,000
9/19/97 5.65 2,000,000 2,000,000
9/25/97 5.63 2,000,000 2,000,000
TOTAL TIME DEPOSITS 86,000,000
REPURCHASE AGREEMENTS - 0.1%
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account
(U.S. Treasury Obligations)
dated 8/29/97 due 9/2/97
At 5.58% $ 631,391 $ 631,000
TOTAL INVESTMENTS - 100% $ 778,522,331
TOTAL COST FOR INCOME TAX PURPOSES - $778,522,331
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 $18,000,000 or
2.3% of net assets.
MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31,
1997
ASSETS
INVESTMENT IN $ 778,522,331
SECURITIES, AT
VALUE
(INCLUDING
REPURCHASE
AGREEMENTS OF
$631,000) -
SEE
ACCOMPANYIN
G SCHEDULE
CASH 42,017,070
INTEREST 5,978,810
RECEIVABLE
TOTAL ASSETS 826,518,211
LIABILITIES
PAYABLE FOR $ 18,007,311
INVESTMENTS
PURCHASED
DISTRIBUTIONS 30,709
PAYABLE
ACCRUED 132,411
MANAGEMENT
FEE
OTHER PAYABLES 291,760
AND
ACCRUED
EXPENSES
TOTAL LIABILITIES 18,462,191
NET ASSETS $ 808,056,020
NET ASSETS
CONSIST OF:
PAID IN CAPITAL $ 808,048,742
ACCUMULATED 7,278
NET REALIZED
GAIN (LOSS) ON
INVESTMENTS
NET ASSETS, FOR $ 808,056,020
808,043,484
SHARES
OUTSTANDING
NET ASSET $1.00
VALUE AND
REDEMPTION
PRICE PER
SHARE
($808,056,0
20 (DIVIDED BY)
808,043,484
SHARES)
MAXIMUM $1.03
OFFERING PRICE
PER SHARE
(100/97.00
OF $1.00)
STATEMENT OF OPERATIONS
SIX MONTHS
ENDED AUGUST
31, 1997
INTEREST INCOME $ 23,888,436
EXPENSES
MANAGEMENT $ 885,196
FEE
TRANSFER AGENT 993,116
FEES
ACCOUNTING FEES 56,696
AND EXPENSES
NON-INTERESTED 3,047
TRUSTEES'
COMPENSATION
CUSTODIAN FEES 14,048
AND EXPENSES
REGISTRATION FEES 299,436
AUDIT 15,927
LEGAL 2,171
MISCELLANEOUS 7,365
TOTAL EXPENSES 2,277,002
BEFORE
REDUCTIONS
EXPENSE (1,117) 2,275,885
REDUCTIONS
NET INTEREST 21,612,551
INCOME
NET REALIZED (5,591)
GAIN (LOSS)
ON
INVESTMENTS
NET INCREASE IN $ 21,606,960
NET ASSETS
RESULTING FROM
OPERATIONS
OTHER $ 1,165,228
INFORMATION
SALES CHARGES
PAID TO FDC
DEFERRED SALES $ 54,557
CHARGES
WITHHELD
BY FDC
EXPENSE $ 47
REDUCTIONS
CUSTODIAN
CREDITS
TRANSFER 1,070
AGENT CREDITS
$ 1,117
STATEMENT OF CHANGES IN NET ASSETS
INCREASE SIX MONTHS ENDED YEAR ENDED
(DECREASE) IN AUGUST 31, 1997 FEBRUARY 28,
NET ASSETS (UNAUDITED) 1997
OPERATIONS $ 21,612,551 $ 38,377,980
NET INTEREST
INCOME
NET REALIZED (5,591) 9,751
GAIN (LOSS)
NET INCREASE 21,606,960 38,387,731
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS
DISTRIBUTIONS TO (21,612,551) (38,377,980)
SHAREHOLDERS
FROM NET
INTEREST
INCOME
SHARE 3,710,441,632 7,030,225,686
TRANSACTIONS AT
NET ASSET
VALUE OF
$1.00 PER
SHARE
PROCEEDS FROM
SALES OF
SHARES
REINVESTMENT 20,023,609 35,577,810
OF
DISTRIBUTIONS
FROM NET
INTEREST
INCOME
COST OF SHARES (3,770,571,514) (6,828,466,797)
REDEEMED
NET INCREASE (40,106,273) 237,336,699
(DECREASE)
IN NET
ASSETS
RESULTING
FROM SHARE
TRANSACTIONS
TOTAL (40,111,864) 237,346,450
INCREASE
(DECREASE) IN
NET ASSETS
NET ASSETS
BEGINNING OF 848,167,884 610,821,434
PERIOD
END OF PERIOD $ 808,056,020 $ 848,167,884
<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 YEAR ENDED YEAR ENDED YEARS ENDED TEN MONTHS ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
SELECTED (UNAUDITED) 1997 1996 1995 1994 1993
PER-SHARE
DATA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF
PERIOD
INCOME FROM .026 .049 .054 .042 .026 .026
INVESTMENT
OPERATIONS
NET INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM NET (.026) (.049) (.054) (.042) (.026) (.026)
INTEREST
INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B 2.60% 5.02% 5.56% 4.28% 2.62% 2.63%
RATIOS AND
SUPPLEMENTAL
DATA
NET ASSETS, END $ 808,056 $ 848,168 $ 610,821 $ 573,144 $ 518,657 $ 431,133
OF PERIOD
(000 OMITTED)
RATIO OF .54% A .56% .58% .65% .72% .56% A
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF NET 5.10% A 4.92% 5.39% 4.19% 2.59% 3.09% A
INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A ANNUALIZED
B TOTAL
RETURNS DO
NOT INCLUDE
THE ONE
TIME SALES
CHARGE AND
FOR PERIODS
OF LESS THAN
ONE YEAR
ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 1997 (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-seven 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
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the 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 under consistently applied procedures under
the general supervision of the Board of Trustees. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value. 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 the funds 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. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
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, 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 (except for
Cyclical Industries Portfolio and Natural Resources Portfolio) is not
subject to U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year.
Cyclical Industries Portfolio and Natural Resources Portfolio intend
to qualify as regulated investment companies under Subchapter M of the
Internal Revenue Code. By so qualifying, each fund will not be subject
to income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME:
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. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
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. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Cyclical Industries and Natural Resources, and shares of Cyclical
Industries and Natural Resources for distribution under federal and
state securities law. These expenses are borne by the funds 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 litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), partnerships, non-taxable
dividends, net operating losses, capital loss carryforwards, expiring
capital loss carryforwards and losses deferred due to wash sales and
excise tax regulations.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Certain 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.
Undistributed net investment income (loss), distributions in excess of
net investment income, and accumulated undistributed net realized gain
(loss) on investments and foreign currency transactions may include
temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
REDEMPTION FEES. Shares 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 equal to the lesser of $7.50 or .75% of the
net asset value of shares redeemed. The fees, which are retained by
the fund, are accounted for as an addition to paid in capital.
Shareholders are also subject to an additional $7.50 fee for shares
exchanged into another Fidelity fund (see Note 4).
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. Certain funds use foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade. The cost of the foreign currency contracts is
included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the 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 for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the funds may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, an affiliate of FMR. The Cash Fund is
an open-end money market fund available only to investment companies
and other accounts managed by FMR and its affiliates. The Cash Fund
seeks preservation of capital, liquidity, and current income by
investing in U.S. Treasury securities and repurchase agreements for
these securities, and may be utilized by the funds as an additional
cash management option. Dividends from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
received by the funds are recorded as interest income.
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.
RESTRICTED SECURITIES. Certain 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. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments.
3. 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 applicable fund's schedule of
investments.
4. 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
.2500% to .5200% for the period. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is
.30%. For the period, the management fee was equivalent to an
annualized rate that ranged from .59% to .60% of average net assets
for the equity funds.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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 .1100% to
.3700% for the period. In the event that these rates were lower than
the contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. The annual individual fund fee rate is .03%. The
income-based fee is added only when the fund's gross 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% of average net assets. For
the period, the management fee was equivalent to an annualized rate of
.21% of the fund's 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.
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., Inc. (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 each fund's
accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
EXCHANGE FEES. FSC receives the proceeds of $7.50 to cover
administrative costs associated with exchanges out of an equity fund
to any other Fidelity Select fund or 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. Certain funds placed a portion of their
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.
5. INTERFUND LENDING PROGRAM.
Each fund is permitted to participate in the interfund lending
program. Information regarding each fund's participation in the
program is included under the caption "Other Information" at the end
of each applicable fund's schedule of investments.
6. SECURITY LENDING.
Certain equity funds loaned securities to certain brokers who paid the
fund negotiated lenders' fees. These fees are included in interest
income. Each applicable 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" at the end of
each applicable fund's schedule of investments.
7. BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. Each fund has
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. Information regarding each applicable
fund's participation in the program is included under the caption
"Other Information" at the end of each applicable fund's schedule of
investments.
8. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of 2.50% of average net assets. FMR
retains the ability to be repaid by the fund for these expense
reductions in the amount that expenses fall below the limit prior to
the end of the fiscal year. For the period, the reimbursement reduced
expenses by $24,295 for Construction and Housing Portfolio, $58,361
for Cyclical Industries Portfolio and $62,729 for Natural Resources
Portfolio.
FMR has directed certain portfolio trades to brokers who paid a
portion of certain equity fund's expenses. In addition, certain funds
have entered into arrangements with their custodian and transfer agent
whereby interest earned on uninvested cash
8. EXPENSE REDUCTIONS - CONTINUED
balances was used to offset a portion of each applicable fund's
expenses. For the period, the reductions under these arrangements are
shown under the caption "Other Information" on each applicable fund's
Statement of Operations.
9. BENEFICIAL INTEREST.
At the end of the period FMR Capital, an affiliate of FMR, was record
owner of 5% or more of the outstanding shares, and certain
unaffiliated shareholders were record owners of 10% or more of the
total outstanding shares of the following funds:
BENEFICIAL INTEREST
NUMBER OF
FMR CAPITAL UNAFFILIATED % OF UNAFFILIATED
FUND % OF OWNERSHIP SHAREHOLDERS OWNERSHIP
Construction and Housing - 1 12.5%
Cyclical Industries 26.7% - -
Natural Resources 15.2% - -
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which a fund has ownership of at
least 5% of the voting securities. Information regarding affiliated
companies is shown under the caption "Other Information" following
each applicable fund's schedule of investments.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
FMR Texas Inc., Irving, TX, MONEY MARKET FUND
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
William J. Hayes, VICE PRESIDENT
Fred L. Henning Jr., VICE PRESIDENT, MONEY MARKET FUND
Boyce I. Greer, VICE PRESIDENT, MONEY MARKET FUND
Arthur S. Loring, SECRETARY
Richard A. Silver, 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
Thomas J. Simpson, ASSISTANT TREASURER, MONEY MARKET FUND
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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 Industries
Food and Agriculture
Leisure
Multimedia
Retailing
CYCLICALS SECTOR
Air Transportation
Automotive
Chemicals
Cyclical Industries * *
Construction and Housing
Defense and Aerospace
Environmental Services
Industrial Equipment
Industrial Materials
Paper and Forest Products
Transportation
FINANCIAL SERVICES SECTOR
Brokerage and Investment Management
Financial Services
Home Finance
Insurance
Regional Banks
HEALTH CARE SECTOR
Biotechnology
Health Care
Medical Delivery
NATURAL RESOURCES SECTOR
American Gold
Energy
Energy Service
Natural Resources * *
Precious Metals and Minerals
TECHNOLOGY SECTOR
Computers
Developing Communications
Electronics
Software and Computer Services
Technology
UTILITIES SECTOR
Natural Gas
Telecommunications
Utilities Growth
Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
* * FUND LAUNCHED 3/3/97
BULK RATE
U.S. POSTAGE
PAID
FIDELITY
INVESTMENTS
(REGISTERED TRADEMARK)
P.O. BOX 193
BOSTON, MA 02101
SUPPLEMENT TO THE FIDELITY SELECT
PORTFOLIOS(registered trademark) AUGUST 31, 1997 SEMIANNUAL REPORT
The following information replaces the similar information found on
pages 185 and 216 of the Performance and Investment Summary section in
the enclosed report.
DEVELOPING COMMUNICATIONS PORTFOLIO (PAGE 185)
TOP INDUSTRIES AS OF AUGUST 31, 1997
% OF FUND'S INVESTMENTS
ROW: 1, COL: 1, VALUE: 40.1
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 4.5
ROW: 1, COL: 4, VALUE: 7.0
ROW: 1, COL: 5, VALUE: 18.9
ROW: 1, COL: 6, VALUE: 25.1
SEMICONDUCTORS 25.1%
TELEPHONE EQUIPMENT 18.9%
MINI & MICRO COMPUTERS 7.0%
ELECTRICAL MACHINERY 4.5%
CELLULAR & COMMUNICATION
SERVICES 4.4%
ALL OTHERS 40.1%
*
* INCLUDES SHORT-TERM INVESTMENTS
TELECOMMUNICATIONS PORTFOLIO (PAGE 216)
TOP INDUSTRIES AS OF AUGUST 31, 1997
% OF FUND'S INVESTMENTS
ROW: 1, COL: 1, VALUE: 17.7
ROW: 1, COL: 2, VALUE: 4.4
ROW: 1, COL: 3, VALUE: 5.8
ROW: 1, COL: 4, VALUE: 7.3
ROW: 1, COL: 5, VALUE: 8.1
ROW: 1, COL: 6, VALUE: 56.7
ROW: 1, COL: 1, VALUE: 16.5
ROW: 1, COL: 2, VALUE: 3.4
ROW: 1, COL: 3, VALUE: 3.8
ROW: 1, COL: 4, VALUE: 6.2
ROW: 1, COL: 5, VALUE: 9.300000000000001
ROW: 1, COL: 6, VALUE: 60.8
TELEPHONE SERVICES 56.7%
TELEPHONE EQUIPMENT 8.1%
ELECTRICAL MACHINERY 7.3%
COMMUNICATIONS SERVICES 5.8%
SEMICONDUCTORS 4.4%
ALL OTHERS 17.7%
*
* INCLUDES SHORT-TERM INVESTMENTS
