SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-69972)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post-Effective Amendment No. 64 [X]
and
REGISTRATION STATEMENT (No. 811-3114)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 64 [X]
Fidelity Select Portfolios
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
(X) on April 28, 1998 pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed
post-effective amendment.
FIDELITY SELECT PORTFOLIOS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
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1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest
3 a .............................. Financial Highlights
b .............................. *
c,d .............................. Performance; Appendix A
4 a i............................. Charter
ii........................... The Funds at a Glance; Investment Principles and
Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. Cover Page; The Funds at a Glance; Charter; Doing
Business with Fidelity
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Cover Page; Charter
f .............................. Expenses
g i.............................. Charter
ii.............................. *
5A .............................. Performance
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... *
b ............................. Charter
c .............................. Transactions Details; Exchange Restrictions
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
f, g .............................. Dividends, Capital Gains, and Taxes
h .............................. *
7 a .............................. Cover Page; Charter
b .............................. Expenses; How to Buy Shares; Transaction Details
c .............................. Sales Charge Reductions and Waivers
d .............................. How to Buy Shares
e .............................. *
f .............................. *
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
FIDELITY SELECT PORTFOLIOS
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
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10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
14 a - c ............................ Trustees and Officers
15 a, b ............................ *
c ............................ Trustees and Officers
16 a i........................... FMR; Portfolio Transactions
ii.......................... Trustees and Officers
iii......................... Management Contracts
b ............................ Management Contracts
c, d ............................ Contracts with FMR Affiliates
e ............................ *
f ............................ *
g ............................ *
h ............................ Description of the Trust
i ............................ Contracts with FMR Affiliates
17 a - d ............................ Portfolio Transactions
e ............................ *
18 a ............................ Description of the Trust
b ............................ *
19 a ............................ Additional Purchase, Exchange and Redemption
Information
b ............................ Additional Purchase, Exchange and Redemption
Information; Valuation
c ............................ *
20 ............................ Distributions and Taxes
21 a, b ............................ Contracts with FMR Affiliates
c ............................ *
22 a, b ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY
SELECT
PORTFOLIOS(REGISTERED TRADEMARK)
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of each fund's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information (SAI)
dated April 28, 1998. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov). The SAI
is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity at
1-800-544-8888.
INVESTMENTS IN THE MONEY MARKET FUND ARE NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT
THE FUND WILL MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR 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 AMOUNTED
INVESTED.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
SEL-pro-0498
701898
Each stock fund seeks to increase the value of your investment over
the long-term by investing mainly in equity securities of companies
within a particular industry or group of industries. The money market
fund seeks high current income while maintaining a stable $1.00 share
price by investing in high-quality, short-term money market
securities.
Fund Trading
Number Symbol
AIR TRANSPORTATION PORTFOLIO 034 FSAIX
AMERICAN GOLD PORTFOLIO 041 FSAGX
AUTOMOTIVE PORTFOLIO 502 FSAVX
BIOTECHNOLOGY PORTFOLIO 042 FBIOX
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO 068 FSLBX
BUSINESS SERVICES AND OUTSOURCING 353 FBSOX
CHEMICALS PORTFOLIO 069 FSCHX
COMPUTERS PORTFOLIO 007 FDCPX
CONSTRUCTION AND HOUSING PORTFOLIO 511 FSHOX
CONSUMER INDUSTRIES PORTFOLIO 517 FSCPX
CYCLICAL INDUSTRIES PORTFOLIO 515
DEFENSE AND AEROSPACE PORTFOLIO 067 FSDAX
DEVELOPING COMMUNICATIONS PORTFOLIO 518 FSDCX
ELECTRONICS PORTFOLIO 008 FSELX
ENERGY PORTFOLIO 060 FSENX
ENERGY SERVICE PORTFOLIO 043 FSESX
ENVIRONMENTAL SERVICES PORTFOLIO 516 FSLEX
FINANCIAL SERVICES PORTFOLIO 066 FIDSX
FOOD AND AGRICULTURE PORTFOLIO 009 FDFAX
HEALTH CARE PORTFOLIO 063 FSPHX
HOME FINANCE PORTFOLIO 098 FSVLX
INDUSTRIAL EQUIPMENT PORTFOLIO 510 FSCGX
INDUSTRIAL MATERIALS PORTFOLIO 509 FSDPX
INSURANCE PORTFOLIO 045 FSPCX
LEISURE PORTFOLIO 062 FDLSX
MEDICAL DELIVERY PORTFOLIO 505 FSHCX
MEDICA L EQUIPMENT AND SYSTEMS PORTFOLIO 354
MULTIMEDIA PORTFOLIO 503 FBMPX
NATURAL GAS PORTFOLIO 513 FSNGX
NATURAL RESOURCES PORTFOLIO 514
PAPER AND FOREST PRODUCTS PORTFOLIO 506 FSPFX
PRECIOUS METALS AND MINERALS PORTFOLIO 061 FDPMX
REGIONAL BANKS PORTFOLIO 507 FSRBX
RETAILING PORTFOLIO 046 FSRPX
SOFTWARE AND COMPUTER SERVICES PORTFOLIO 028 FSCSX
TECHNOLOGY PORTFOLIO 064 FSPTX
TELECOMMUNICATIONS PORTFOLIO 096 FSTCX
TRANSPORTATION PORTFOLIO 512 FSRFX
UTILITIES GROWTH PORTFOLIO 065 FSUTX
MONEY MARKET PORTFOLIO 085 FSMMKT
PROSPECTUS
APRIL 28, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
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KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's financial data.
PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach
to investing.
BREAKDOWN OF EXPENSES How operating costs are calculated
and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up your account,
including tax-advantaged retirement plans.
HOW TO BUY SHARES Opening an account and making additional
investments.
HOW TO SELL SHARES Taking money out and closing your account.
INVESTOR SERVICES Services to help you manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
APPENDIX A
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KEY FACTS
THE FUNDS AT A GLANCE
STOCK FUNDS' GOAL: Capital appreciation (increase in the value of a
fund's shares). As with any mutual fund, there is no assurance that a
fund will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946
and is now America's largest mutual fund manager. Fidelity Investments
Money Management, Inc. (FIMM), a subsidiary of FMR, chooses
investments for the money market fund. Foreign affiliates of FMR may
help choose investments for some of the stock funds.
AIR TRANSPORTATION
STRATEGY: Invests mainly in equity securities of companies engaged in
the regional, national, and international movement of passengers,
mail, and freight via aircraft.
SIZE: As of February 28, 1998, the fund had over $ 181 million
in assets.
AMERICAN GOLD
STRATEGY: Invests mainly in equity securities of companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals, and may also invest directly in precious metals.
SIZE: As of February 28, 1998, the fund had over $ 219 million
in assets.
AUTOMOTIVE
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture, marketing, or sale of automobiles, trucks, specialty
vehicles, parts, tires, and related services.
SIZE: As of February 28, 1998, the fund had over $ 32 million in
assets.
BIOTECHNOLOGY
STRATEGY: Invests mainly in equity securities of companies engaged in
the research, development, and manufacture of various biotechnological
products, services, and processes.
SIZE: As of February 28, 1998, the fund had over $ 579 million
in assets.
BROKERAGE AND INVESTMENT MANAGEMENT
STRATEGY: Invests mainly in equity securities of companies engaged in
stock brokerage, commodity brokerage, investment banking,
tax-advantaged investment or investment sales, investment management,
or related investment advisory services.
SIZE: As of February 28, 1998, the fund had over $ 676 million
in assets.
BUSINESS SERVICES AND OUTSOURCING PORTFOLIO
STRATEGY: Invests mainly in equity securities of companies that
provide business-related services to companies and other
organizations.
SIZE: As of February 28, 1998, the fund had over $15 million in
assets.
CHEMICALS
STRATEGY: Invests mainly in equity securities of companies engaged in
the research, development, manufacture, or marketing of products or
services related to the chemical process industries.
SIZE: As of February 28, 1998, the fund had over $ 69 million in
assets.
COMPUTERS
STRATEGY: Invests mainly in equity securities of companies engaged in
research, design, development, manufacture, or distribution of
products, processes, or services that relate to currently available or
experimental hardware technology within the computer industry.
SIZE: As of February 28, 1998, the fund had over $ 785 million
in assets.
CONSTRUCTION AND HOUSING
STRATEGY: Invests mainly in equity securities of companies engaged in
the design and construction of residential, commercial, industrial,
and public works facilities, as well as companies engaged in the
manufacture, supply, distribution, or sale of products or services to
these construction industries.
SIZE: As of February 28, 1998, the fund had over $ 57 million in
assets.
CONSUMER INDUSTRIES
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture and distribution of goods to consumers.
SIZE: As of February 28, 1998, the fund had over $ 72 million in
assets.
CYCLICAL INDUSTRIES
STRATEGY: Invests mainly in equity securities of companies engaged in
the research, development, manufacture, distribution, supply, or sale
of materials, equipment, products or services related to cyclical
industries.
SIZE: As of February 28, 1998, the fund had over $ 3 million in
assets.
DEFENSE AND AEROSPACE
STRATEGY: Invests mainly in equity securities of companies engaged in
the research, manufacture, or sale of products or services related to
the defense or aerospace industries.
SIZE: As of February 28, 1998, the fund had over $ 101 million
in assets.
DEVELOPING COMMUNICATIONS
STRATEGY: Invests mainly in equity securities of companies engaged in
the development, manufacture, or sale of emerging communications
services or equipment.
SIZE: As of February 28, 1998, the fund had over $ 238 million
in assets.
ELECTRONICS
STRATEGY: Invests mainly in equity securities of companies engaged in
the design, manufacture, or sale of electronic components, equipment
vendors to electronic component manufacturers, electronic component
distributors, and electronic instruments and electronics systems
vendors.
SIZE: As of February 28, 1998, the fund had over $ 2.6 billion
in assets.
ENERGY
STRATEGY: Invests mainly in equity securities of companies in the
energy field, including the conventional areas of oil, gas,
electricity, and coal, and newer sources of energy such as nuclear,
geothermal, oil shale, and solar power.
SIZE: As of February 28, 1998, the fund had over $ 147 million
in assets.
ENERGY SERVICE
STRATEGY: Invests mainly in equity securities of companies in the
energy service field, including those that provide services and
equipment to the conventional areas of oil, gas, electricity, and
coal, and newer sources of energy such as nuclear, geothermal, oil
shale, and solar power.
SIZE: As of February 28, 1998 ,the fund had over $ 919 million
in assets.
ENVIRONMENTAL SERVICES
STRATEGY: Invests mainly in equity securities of companies engaged in
the research, development, manufacture, or distribution of products,
processes, or services related to waste management or pollution
control.
SIZE: As of February 28, 1998, the fund had over $ 25 million in
assets.
FINANCIAL SERVICES
STRATEGY: Invests mainly in equity securities of companies providing
financial services to consumers and industry.
SIZE: As of February 28, 1998, the fund had over $ 604 million
in assets.
FOOD AND AGRICULTURE
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture, sale, or distribution of food and beverage products,
agricultural products, and products related to the development of new
food technologies.
SIZE: As of February 28, 1998, the fund had over $ 250 million
in assets.
HEALTH CARE
STRATEGY: Invests mainly in equity securities of companies engaged in
the design, manufacture, or sale of products or services used for, or
in connection with, health care or medicine.
SIZE: As of February 28, 1998, the fund had over $ 2.2 billion
in assets.
HOME FINANCE
STRATEGY: Invests mainly in equity securities of companies engaged in
investing in real estate, usually through mortgages and other
consumer-related loans.
SIZE: As of February 28, 1998, the fund had over $ 1.6 billion
in assets.
INDUSTRIAL EQUIPMENT
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture, distribution, or service of products and equipment
for the industrial sector, including integrated producers of capital
equipment, parts suppliers, and subcontractors.
SIZE: As of February 28, 1998, the fund had over $ 50 million in
assets.
INDUSTRIAL MATERIALS
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture, mining, processing, or distribution of raw materials
and intermediate goods used in the industrial sector.
SIZE: As of February 28, 1998, the fund had over $ 22 million in
assets.
INSURANCE
STRATEGY: Invests mainly in equity securities of companies engaged in
underwriting, reinsuring, selling, distributing, or placing of
property and casualty, life, or health insurance.
SIZE: As of February 28, 1998, the fund had over $ 125 million
in assets.
LEISURE
STRATEGY: Invests mainly in equity securities of companies engaged in
the design, production, or distribution of goods or services in the
leisure industries.
SIZE: As of February 28, 1998, the fund had over $ 257 million
in assets.
MEDICAL DELIVERY
STRATEGY: Invests mainly in equity securities of companies engaged in
the ownership or management of hospitals, nursing homes, health
maintenance organizations, and other companies specializing in the
delivery of health care services.
SIZE: As of February 28, 1998, the fund had over $ 155 million
in assets.
MEDICAL EQUIPMENT AND SYSTEMS
STRATEGY: Invests mainly in equity securities of companies engaged
in research, development, manufacture, distribution, supply or sale of
medical equipment and devices and related technologies.
MULTIMEDIA
STRATEGY: Invests mainly in equity securities of companies engaged in
the development, production, sale, and distribution of goods or
services used in the broadcast and media industries.
SIZE: As of February 28, 1998, the fund had over $ 115 million
in assets.
NATURAL GAS
STRATEGY: Invests mainly in equity securities of companies engaged in
the production, transmission, and distribution of natural gas, and
involved in the exploration of potential natural gas sources, as well
as those companies that provide services and equipment to natural gas
producers, refineries, cogeneration facilities, converters, and
distributors.
SIZE: As of February 28, 1998, the fund had over $ 59 million in
assets.
NATURAL RESOURCES
STRATEGY: Invests mainly in equity securities of companies that own or
develop natural resources, or supply goods and services to such
companies, and may also invest directly in precious metals.
SIZE: As of February 28, 1998, the fund had over $ 7 million in
assets.
PAPER AND FOREST PRODUCTS
STRATEGY: Invests mainly in equity securities of companies engaged in
the manufacture, research, sale, or distribution of paper products,
packaging products, building materials, and other products related to
the paper and forest products industry.
SIZE: As of February 28, 1998, the fund had over $ 31 million in
assets.
PRECIOUS METALS AND MINERALS
STRATEGY: Invests mainly in equity securities of companies engaged in
exploration, mining, processing, or dealing in gold, silver, platinum,
diamonds, or other precious metals and minerals, and may also invest
directly in precious metals.
SIZE: As of February 28, 1998, the fund had over $ 165 million
in assets.
REGIONAL BANKS
STRATEGY: Invests mainly in equity securities of companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans.
SIZE: As of February 28, 1998, the fund had over $ 1.3 b illion
in assets.
RETAILING
STRATEGY: Invests mainly in equity securities of companies engaged in
merchandising finished goods and services primarily to individual
consumers.
SIZE: As of February 28, 1998, the fund had over $192 million in
assets.
SOFTWARE AND COMPUTER SERVICES
STRATEGY: Invests mainly in equity securities of companies engaged in
research, design, production, or distribution of products or processes
that relate to software or information-based services.
SIZE: As of February 28, 1998, the fund had over $503 million in
assets.
TECHNOLOGY
STRATEGY: Invests mainly in equity securities of companies which FMR
believes have, or will develop, products, processes, or services that
will provide or will benefit significantly from technological advances
and improvements.
SIZE: As of February 28, 1998, the fund had over $ 691 million
in assets.
TELECOMMUNICATIONS
STRATEGY: Invests mainly in equity securities of companies engaged in
the development, manufacture, or sale of communications services or
communications equipment.
SIZE: As of February 28, 1998, the fund had over $ 643 million
in assets.
TRANSPORTATION
STRATEGY: Invests mainly in equity securities of companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
SIZE: As of February 28, 1998, the fund had over $ 64 million in
assets.
UTILITIES GROWTH
STRATEGY: Invests mainly in equity securities of companies in the
public utilities industry and companies deriving a majority of their
revenues from their public utility operations.
SIZE: As of February 28, 1998, the fund had over $ 401 million
in assets.
MONEY MARKET
GOAL: Income while maintaining a stable $1.00 share price. As with any
mutual fund, there is no assurance the fund will achieve its goal.
STRATEGY: Invests in high-quality, short-term money market securities
of all types.
SIZE: As of February 28, 1998, the fund had over $ 584 million
in assets.
As with any mutual fund, there is no assurance that a fund will
achieve its goal.
WHO MAY WANT TO INVEST
The stock funds may be appropriate for investors who want to pursue
growth aggressively by concentrating their investment on domestic and
foreign securities within a particular industry or group of
industries. The funds are designed for those who are interested in
actively monitoring the progress, and can accept the risks, of
industry-focused investing. Because the funds are so narrowly focused,
changes in a particular industry can have a substantial impact on a
fund's share price. Most of the funds are non-diversified and may
invest a greater portion of their assets in securities of individual
issuers than diversified funds. As a result, changes in the market
value of a single issuer could cause greater fluctuations in share
value than would occur in a more diversified fund.
The value of the stock funds' investments will vary from day to day,
and generally reflect market and industry conditions, interest rates,
and other company, political, or economic news both here and abroad.
In the short-term, stock prices can fluctuate dramatically in response
to these factors. The securities of small, less well-known companies
may be more volatile than those of larger companies. Over time,
however, stocks have shown greater growth potential than other types
of securities. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political
and economic risk, as well as exposure to currency fluctuations. When
you sell your stock fund shares, they may be worth more or less than
what you paid for them.
The money market fund may be appropriate for investors who would like
to earn income at current money market rates while preserving the
value of their investment. The fund is managed to keep its share price
stable at $1.00. The rate of income will vary from day to day,
generally reflecting short-term interest rates.
The money market fund is designed for use in connection with exchanges
between the stock funds. Since the money market fund is sold with a
sales charge, it is not recommended that you invest in the money
market fund unless you intend to use it for that purpose.
By themselves, the funds do not constitute a balanced investment plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy,
sell, or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below
$2,500. Lower sales charges may be available for accounts over
$250,000. See "Transaction Details," page , and "Sales Charge
Reductions and Waivers," page , for an explanation of how and
when these charges apply.
Maximum sales charge on purchases (as a % of offering price) 3.00%
Sales charge on reinvested distributions None
Deferred sales charge on redemptions None
Redemption fee (Trading fee) for the stock funds 0.75%
on shares held 29 days or less (as a % of amount redeemed)
on shares held 30 days or more 0.75%
for redemption amounts of up to $1,000 (as a % of amount redeemed) $7.50
for redemption amounts of $1,000 or more
Exchange fee (stock funds only) $7.50
Annual account maintenance fee (for accounts under $2,500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets.
Each fund pays a management fee to FMR. It also incurs other expenses
for services such as maintaining shareholder records and furnishing
shareholder statements and financial reports. A fund's expenses are
factored into its share price or dividends and are not charged
directly to shareholder accounts (see "Breakdown of Expenses," page
) .
EXAMPLES: Let's say, hypothetically, that each fund's annual return is
5% and that your shareholder transaction expenses and each fund's
annual operating expenses are exactly as just described. For every
$1,000 you invested, below is how much you would pay in total expenses
if you close your account after the number of years indicated and, for
the stock funds, if you leave your account open:
The examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expense s or returns, all of which
may vary.
The following figures are based on estimated or historical expenses of
each fund , adjusted to reflect current fees, of each fund and
are calculated as a percentage of average net assets of each fund.
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Operating expenses Account Account
open closed
AIR TRANSPORTATION Management fee 0 .60% 1 year $45 $53
12b-1 fee None 3 years $77 $84
Other expenses 0 .92% 5 years $110 $118
Total fund operating expenses 1.52% 10 years $206 $213
AMERICAN GOLD Management fee 0 .60% 1 year $44 $52
12b-1 fee None 3 years $74 $82
Other expenses 0 .84% 5 years $106 $114
Total fund operating expenses 1.44% 10 years $197 $205
AUTOMOTIVE Management fee 0 .59% 1 year $45 $52
12b-1 fee None 3 years $76 $83
Other expenses 0 .91% 5 years $109 $117
Total fund operating expenses 1.50% 10 years $204 $211
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BIOTECHNOLOGY Management fee 0 .60% 1 year $44 $51
12b-1 fee None 3 years $72 $80
Other expenses 0 .78% 5 years $103 $111
Total fund operating expenses 1.38% 10 years $19 1 $198
BROKERAGE AND INVESTMENT MANAGEMENT Management fee 0 .60% 1 year $42 $49
12b-1 fee None 3 years $67 $74
Other expenses 0 .60% 5 years $94 $101
Total fund operating expenses 1.20% 10 years $171 $179
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Operating expenses Account Account
open closed
BUSINESS SERVICES AND OUTSOURCING PORTFOLIO* Management fee 0 .60% 1 year $50 $57
12b-1 fee None 3 years $91 $99
Other expenses 1.41%
Total fund operating expenses 2.01%
CHEMICALS Management fee 0 .60% 1 year $45 $52
12b-1 fee None 3 years $76 $83
Other expenses 0 .90% 5 years $109 $117
Total fund operating expenses 1.50% 10 years $204 $211
COMPUTERS Management fee 0 .60% 1 year $43 $51
12b-1 fee None 3 years $71 $78
Other expenses 0 .72% 5 years $100 $108
Total fund operating expenses 1.32% 10 years $184 $192
CONSTRUCTION AND HOUSING Management fee 0 .60% 1 year $50 $57
12b-1 fee None 3 years $91 $99
Other expenses 1.41% 5 years $135 $143
Total fund operating expenses 2.01% 10 years $257 $264
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CONSUMER INDUSTRIES Management fee 0 .61% 1 year $48 $55
12b-1 fee None 3 years $85 $93
Other expenses 1.20% 5 years $125 $133
Total fund operating expenses 1.81% 10 years $236 $244
CYCLICAL INDUSTRIES Management fee 0% 1 year $55 $62
(after reimbursement)
12b-1 fee None 3 years $106 $113
Other expenses 2.50% 5 years $159 $167
(after reimbursement)
Total fund operating expenses 2.50% 10 years $305 $313
(after reimbursement)
DEFENSE AND AEROSPACE Management fee 0 .60% 1 year $45 $52
12b-1 fee None 3 years $75 $83
Other expenses 0 .88% 5 years $108 $116
Total fund operating expenses 1.48% 10 years $202 $209
DEVELOPING COMMUNICATIONS Management fee 0 .60% 1 year $45 $52
12b-1 fee None 3 years $75 $83
Other expenses 0 .87% 5 years $108 $115
Total fund operating expenses 1.47% 10 years $200 $208
</TABLE>
* FIGURES ARE BASED ON ESTIMATED EXPENSES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Operating expenses Account Account
open closed
ELECTRONICS Management fee 0.60% 1 year $41 $49
12b-1 fee None 3 years $65 $73
Other expenses 0.54% 5 years $91 $98
Total fund operating expenses 1.14% 10 years $164 $172
ENERGY Management fee 0.59% 1 year $44 $51
12b-1 fee None 3 years $73 $80
Other expenses 0.81% 5 years $104 $112
Total fund operating expenses 1.40% 10 years $193 $200
ENERGY SERVICE Management fee 0 .59% 1 year $41 $49
12b-1 fee None 3 years $66 $73
Other expenses 0 .57% 5 years $92 $99
Total fund operating expenses 1.16% 10 years $167 $174
ENVIRONMENTAL SERVICES Management fee 0 .60% 1 year $50 $58
12b-1 fee None 3 years $93 $100
Other expenses 1.47% 5 years $138 $146
Total fund operating expenses 2.07% 10 years $2 6 3 $270
FINANCIAL SERVICES Management fee 0 .60% 1 year $42 $50
12b-1 fee None 3 years $68 $76
Other expenses 0 .64% 5 years $96 $104
Total fund operating expenses 1.24% 10 years $175 $183
FOOD AND AGRICULTURE Management fee 0 .60% 1 year $4 3 $51
12b-1 fee None 3 years $72 $79
Other expenses 0 .76% 5 years $102 $110
Total fund operating expenses 1.36% 10 years $189 $196
HEALTH CARE Management fee 0 .60% 1 year $41 $49
12b-1 fee None 3 years $66 $73
Other expenses 0 .56% 5 years $92 $99
Total fund operating expenses 1.16% 10 years $167 $174
HOME FINANCE Management fee 0 .60% 1 year $41 $49
12b-1 fee None 3 years $66 $73
Other expenses 0 .56% 5 years $92 $99
Total fund operating expenses 1.16% 10 years $167 $174
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Operating expenses Account Account
open closed
INDUSTRIAL
EQUIPMENT Management fee 0 .60% 1 year $45 $52
12b-1 fee None 3 years $75 $83
Other expenses 0 .88% 5 years $108 $116
Total fund operating expenses 1.48% 10 years $202 $209
INDUSTRIAL
MATERIALS Management fee 0 .60% 1 year $48 $55
12b-1 fee None 3 years $85 $92
Other expenses 1.20% 5 years $125 $132
Total fund operating expenses 1.80% 10 years $235 $243
INSURANCE Management fee 0 .6 0 % 1 year $43 $51
12b-1 fee None 3 years $72 $79
Other expenses 0 .7 6 % 5 years $102 $110
Total fund operating expenses 1.36% 10 years $189 $196
LEISURE Management fee 0 .60% 1 year $44 $51
12b-1 fee None 3 years $72 $80
Other expenses 0 .77% 5 years $103 $110
Total fund operating expenses 1.37% 10 years $190 $197
MEDICAL
DELIVERY Management fee 0 .60% 1 year $44 $52
12b-1 fee None 3 years $74 $82
Other expenses 0 .84% 5 years $106 $114
Total fund operating expenses 1.44% 10 years $197 $205
MEDICAL
EQUIPMENT
AND
SYSTEMS* Management fee 0.60% 1 year $50 $57
12b-1 fee None 3 years $91 $99
Other expenses 1.41 %
Total fund operating expenses 2.01 %
MULTI
MEDIA Management fee 0.60% 1 year $46 $53
12b-1 fee None 3 years $78 $86
Other expenses 0.98% 5 years $113 $121
Total fund operating expenses 1.58% 10 years $212 $220
NATURAL
GAS Management fee 0.59% 1 year $45 $53
12b-1 fee None 3 years $77 $85
Other expenses 0.96% 5 years $112 $119
Total fund operating expenses 1.55% 10 years $209 $217
NATURAL
RESOURCES Management fee 0% 1 year $55 $62
(after reimbursement)
12b-1 fee None 3 years $106 $113
Other expenses 2.50% 5 years $159 $167
(after reimbursement)
Total fund operating expenses 2.50% 10 years $305 $313
(after reimbursement)
</TABLE>
* FIGURES ARE BASED ON ESTIMATED EXPENSES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Operating expenses Account Account
open closed
PAPER AND FOREST
PRODUCTS Management fee 0 .60% 1 year $ 49 $ 57
12b-1 fee None 3 years $ 89 $ 97
Other expenses 1.34% 5 years $ 132 $ 139
Total fund operating expenses 1.94% 10 years $ 250 $ 257
PRECIOUS METALS
AND MINERALS Management fee 0 .60% 1 year $ 47 $ 54
12b-1 fee None 3 years $ 82 $ 89
Other expenses 1.09% 5 years $ 119 $ 127
Total fund operating expenses 1.69% 10 years $ 224 $ 231
REGIONAL BANKS Management fee 0 .60% 1 year $ 42 $ 49
12b-1 fee None 3 years $ 67 $ 74
Other expenses 0 .59% 5 years $ 93 $ 101
Total fund operating expenses 1.19% 10 years $ 170 $ 177
RETAILING Management fee 0.60% 1 year $44 $51
12b-1 fee None 3 years $72 $80
Other expenses 0.77% 5 years $103 $110
Total fund operating expenses 1.37% 10 years $190 $197
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SOFTWARE AND COMPUTER SERVICES Management fee 0 .60% 1 year $43 $51
12b-1 fee None 3 years $72 $79
Other expenses 0 .76% 5 years $102 $110
Total fund operating expenses 1.36% 10 years $189 $196
TECHNOLOGY Management fee 0 .60% 1 year $43 $51
12b-1 fee None 3 years $71 $78
Other expenses 0 .72% 5 years $100 $108
Total fund operating expenses 1.32% 10 years $184 $192
TELECOMMUNICATIONS Management fee 0 .60% 1 year $44 $51
12b-1 fee None 3 years $73 $81
Other expenses 0 .81% 5 years $105 $112
Total fund operating expenses 1.41% 10 years $194 $202
TRANSPORTATION Management fee 0 .59% 1 year $44 $52
12b-1 fee None 3 years $74 $82
Other expenses 0 .85% 5 years $106 $114
Total fund operating expenses 1.44% 10 years $197 $205
UTILITIES GROWTH Management fee 0 .60% 1 year $43 $50
12b-1 fee None 3 years $69 $77
Other expenses 0 .67% 5 years $98 $105
Total fund operating expenses 1.27% 10 years $179 $186
MONEY MARKET Management fee 0 .21% 1 year $36 $36
12b-1 fee None 3 years $47 $47
Other expenses 0 .35% 5 years $60 $60
Total fund operating expenses 0 .56% 10 years $98 $98
</TABLE>
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total fund operating expenses presented in the preceding tables
would have been:
Air Transportation 1.46 %
American Gold 1 .37%
Automotive 1.46 %
Biotechnology 1.36 %
Brokerage and Investment Management 1.16 %
Chemicals 1.49 %
Computers 1.26 %
Construction and Housing 1.94 %
Consumer Industries 1.77 %
Defense and Aerospace 1.42 %
Developing Communications 1.41 %
Electronics 1.08 %
Energy 1.35 %
Energy Service 1.13 %
Environmental Services 2.06 %
Financial Services 1.22 %
Food and Agriculture 1.35 %
Health Care 1.14 %
Home Finance 1.14 %
Industrial Equipment 1.41 %
Industrial Materials 1.76 %
Insurance 1.34 %
Leisure 1.32 %
Medical Delivery 1.40 %
Multimedia 1.54 %
Natural Gas 1.51 %
Natural Resources 2.48 %
Paper and Forest Products 1.91 %
Precious Metals and Minerals 1.63 %
Regional Banks 1.18 %
Retailing 1.29 %
Software and Computer Services 1.34 %
Technology 1.24 %
Telecommunications 1.38 %
Transportation 1.40 %
Utilities Growth 1.24 %
FMR has voluntarily agreed to reimburse each fund to the extent that
total operating expenses (excluding interest, taxes, brokerage
commissions and extraordinary expenses) exceed 2.50% of its
average net assets. If these agreements were not in effect, the
management fee, other expenses and total operating expenses , as a
percentage of average net assets, would have been 0.59%, 4.14% and
4.73%, respec tively , for Cyclical Industries and 0.60%,
2.81% and 3.41%, respectively, for Natural Resources.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow have been audited by
Price Waterhouse LLP, independent accountants. The funds' financial
highlights, financial statements, and report of the auditor are
included in the funds' Annual Report, and are incorporated by
reference into (are legally part of) the funds' SAI. Contact Fidelity
for a free copy of the Annual Report or the SAI. Business Services and
Outsourcing commenced operations on February 4, 1998. Medical
Equipment and Systems will commence operations on or about April 28,
1998.
AIR TRANSPORTATION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE,
BEGINNING OF PERIOD $ 17.72 $ 21.11 $ 13.93 $ 17.12 $ 13.60 $ 12.64 $ 11.53 $ 11.05 $ 11.77 $ 8.61
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.19) (.22) (.01) (.18) (.18) (.09)G (.13) (.04) -- (.02)
NET REALIZED AND
UNREALIZED GAIN (LOSS) 10.59 (3.12) 7.47 (2.01) 3.78 1.33 1.40 .38 (.16) 3.18
TOTAL FROM INVESTMENT
OPERATIONS 10.40 (3.34) 7.46 (2.19) 3.60 1.24 1.27 .34 (.16) 3.16
LESS DISTRIBUTIONS
FROM NET REALIZED
GAIN (1.43) (.07) (.46) (.92) (.22) (.36) (.25) -- (.57) --
IN EXCESS OF NET REALIZED
GAIN -- (.20) -- (.17) (.05) -- -- -- -- --
TOTAL DISTRIBUTIONS (1.43) (.27) (.46) (1.09) (.27) (.36) (.25) -- (.57) --
REDEMPTION FEES ADDED
TO PAID IN CAPITAL .17 .22 .18 .09 .19 .08 .09 .14 .01 --
NET ASSET VALUE, END
OF PERIOD $ 26.86 $ 17.72 $ 21.11 $ 13.93 $ 17.12 $ 13.60 $ 12.64 $ 11.53 $ 11.05 $ 11.77
TOTAL RETURNF,K 61.10% (15.06)% 54.91% (12.45)% 27.94% 10.69% 11.90% 4.34% (1.54)% 36.70%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 181,185 $ 35,958 $ 75,359 $ 18,633 $ 11,035 $ 11,868 $ 6,971 $ 4,372 $ 4,688 $ 11,614
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.93% 1.89% 1.47% 2.50%E 2.33% 2.48%A,E 2.51%E 2.48%E 2.55%E 2.52%E
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.87%B 1.80%B 1.41%B 2.50% 2.31%B 2.48%A 2.51% 2.48% 2.55% 2.52%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.84)% (1.10)% (.07)% (1.31)% (1.11)% (.90)%A (1.04)% (.34)% (.03)% (.18)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 294% 469% 504% 200% 171% 96%A 261% 106% 143% 115%
AVERAGE COMMISSION
RATEI $ .0270 $ .0409
</TABLE>
AMERICAN GOLD
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 28.21 $ 27.11 $ 18.44 $ 22.66 $ 14.15 $ 11.94 $ 13.08 $ 15.22 $ 14.36 $ 15.82
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.13) (.16) (.06) (.05) (.11) (.05) (.06) (.04) (.06) (.09)
NET REALIZED AND UNREALIZED GAIN
(LOSS) (11.78) 1.60 8.62 (4.25) 8.44 2.16 (1.17) (2.23) .85 (1.37)
TOTAL FROM INVESTMENT
OPERATIONS (11.91) 1.44 8.56 (4.30) 8.33 2.11 (1.23) (2.27) .79 (1.46)
LESS DISTRIBUTIONS
FROM NET REALIZED
GAIN (1.29) (.50) -- -- -- -- -- -- -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .16 .16 .11 .08 .18 .10 .09 .13 .07 --
NET ASSET VALUE, END OF
PERIOD $ 15.17 $ 28.21 $ 27.11 $ 18.44 $ 22.66 $ 14.15 $ 11.94 $ 13.08 $ 15.22 $ 14.36
TOTAL
RETURNF,K (43.15)% 6.10% 47.02% (18.62)% 60.14% 18.51% (8.72)% (14.06)% 5.99% (9.23)%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 219,668 $ 428,103 $ 451,493 $ 278,197 $ 347,406 $ 168,033 $ 130,407 $ 164,137 $ 195,322 $ 175,059
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.55% 1.44% 1.39% 1.41% 1.50% 1.59%A 1.75% 1.75% 1.85% 2.03%
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.48%B 1.42%B 1.39% 1.41% 1.49%B 1.59%A 1.75% 1.75% 1.85% 2.03%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.67)% (.59)% (.27)% (.22)% (.51)% (.44)%A (.47)% (.29)% (.38)% (.61)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 89% 63% 56% 34% 39% 30%A 40% 38% 68% 56%
AVERAGE COMMISSION
RATEI $ .0193 $ .0270
</TABLE>
A ANNUALIZED
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E 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 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.01 PER SHARE.
H FOR THE YEAR ENDED FEBRUARY 29
I 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.
J NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
K THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
AUTOMOTIVE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 25.38 $ 21.85 $ 19.84 $ 25.48 $ 20.69 $ 18.65 $ 12.58 $ 12.17 $ 12.86 $ 11.79
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOME L .05 .13 .03 .08 .05 .13 .06 .25 .23 .15
NET REALIZED AND UNREALIZED GAIN
(LOSS) 5.21 4.28 1.95 (3.46) 6.00 2.26 6.55 .29 (.52) .92
TOTAL FROM INVESTMENT
OPERATIONS 5.26 4.41 1.98 (3.38) 6.05 2.39 6.61 .54 (.29) 1.07
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.08) (.17) -- (.05) (.05) (.06) -- (.18) (.41) --
FROM NET REALIZED
GAIN (3.09) (.75) -- (2.26) (1.26) (.36) (.70) -- -- --
TOTAL DISTRIBUTIONS (3.17) (.92) -- (2.31) (1.31) (.42) (.70) (.18) (.41) --
REDEMPTION FEES ADDED
TO PAID IN CAPITAL .03 .04 .03 .05 .05 .07 .16 .05 .01 --
NET ASSET VALUE, END
OF PERIOD $ 27.50 $ 25.38 $ 21.85 $ 19.84 $ 25.48 $ 20.69 $ 18.65 $ 12.58 $ 12.17 $ 12.86
TOTAL RETURNF,G 22.78% 20.60% 10.13% (12.59)% 30.45% 13.42% 56.27% 4.81% (2.07)% 9.08%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 32,489 $ 86,347 $ 55,753 $ 60,075 $ 228,698 $ 110,360 $ 178,445 $ 974 $ 1,213 $ 1,428
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.60% 1.56% 1.81% 1.82% 1.69% 1.57%A 2.48% 2.25%E 2.42%E 2.63%E
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.56%B 1.52%B 1.80%B 1.80%B 1.68%B 1.57%A 2.48% 2.25% 2.42% 2.63%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME .17% .54% .13% .34% .22% .72%A .36% 2.06% 1.84% 1.22%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 153% 175% 61% 63% 64% 140%A 29% 219% 121% 149%
AVERAGE COMMISSION
RATEK $ .0424 $ .0495
</TABLE>
BIOTECHNOLOGY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 34.24 $ 36.60 $ 25.30 $ 27.61 $ 22.60 $ 27.61 $ 26.78 $ 15.28 $ 11.90 $ 10.31
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)L (.27) (.20) .11 (.06) (.18) (.08) (.11) .05I (.04)H (.04)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 5.20 1.89 11.21 (2.26) 5.15 (1.09) 3.36 11.80 3.60 1.63
TOTAL FROM INVESTMENT
OPERATIONS 4.93 1.69 11.32 (2.32) 4.97 (1.17) 3.25 11.85 3.56 1.59
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- (.03) (.07) -- -- -- -- -- -- --
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- -- (.02) -- -- --
FROM NET REALIZED
GAIN (4.71) (4.06) -- -- -- (3.89) (2.52) (.67) (.24) --
TOTAL
DISTRIBUTIONS (4.71) (4.09) (.07) -- -- (3.89) (2.54) (.67) (.24) --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .06 .04 .05 .01 .04 .05 .12 .32 .06 --
NET ASSET VALUE, END OF
PERIOD $ 34.52 $ 34.24 $ 36.60 $ 25.30 $ 27.61 $ 22.60 $ 27.61 $ 26.78 $ 15.28 $ 11.90
TOTAL
RETURNF,G 16.11% 5.85% 44.97% (8.37)% 22.17% (5.92)% 12.36% 81.43% 30.53% 15.42%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 579,542 $ 674,902 $ 1,096,864 $ 448,197 $ 481,146 $ 507,993 $ 679,877 $ 482,271 $ 70,994 $ 46,946
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.49% 1.57% 1.44%E 1.59% 1.62% 1.50%A 1.50% 1.63% 2.07% 2.21%
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.47%B 1.56%B 1.43%B 1.59% 1.61%B 1.50%A 1.50% 1.63% 2.07% 2.21%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.81)% (.59)% .35% (.27)% (.69)% (.37)%A (.34)% .24% (.31)% (.43)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 162% 41% 67% 77% 51% 79%A 160% 166% 290% 80%
AVERAGE COMMISSION
RATEK $ .0454 $ .0376
</TABLE>
A ANNUALIZED
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E 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 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.05 PER SHARE.
I INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.02 PER SHARE.
J FOR THE YEAR ENDED FEBRUARY 29
K 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.
L NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
BROKERAGE AND INVESTMENT MANAGEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996G 1995 1994 1993E 1992F 1991F 1990F 1989F
NET ASSET VALUE, BEGINNING OF
PERIOD $ 25.76 $ 18.49 $ 15.51 $ 17.75 $ 14.22 $ 11.48 $ 9.28 $ 7.97 $ 8.39 $ 7.14
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)D .16 .08 .09 (.03) (.02) -- .02 .08 .08 .09
NET REALIZED AND UNREALIZED GAIN
(LOSS) 14.46 7.80 4.29 (2.25) 4.95 2.65 1.96 1.15 (.35) 1.25
TOTAL FROM INVESTMENT
OPERATIONS 14.62 7.88 4.38 (2.28) 4.93 2.65 1.98 1.23 (.27) 1.34
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.09) (.06) (.04) -- (.01) -- (.01) (.09) (.16) (.09)
FROM NET REALIZED
GAIN (.61) (.65) (1.09) -- (1.47) -- -- -- -- --
IN EXCESS OF NET REALIZED
GAIN -- -- (.35) -- -- -- -- -- -- --
TOTAL DISTRIBUTIONS (.70) (.71) (1.48) -- (1.48) -- (.01) (.09) (.16) (.09)
REDEMPTION FEES ADDED
TO PAID IN CAPITAL .10 .10 .08 .04 .08 .09 .23 .17 .01 --
NET ASSET VALUE, END
OF PERIOD $ 39.78 $ 25.76 $ 18.49 $ 15.51 $ 17.75 $ 14.22 $ 11.48 $ 9.28 $ 7.97 $ 8.39
TOTAL RETURNB,C 57.56% 44.27% 29.85% (12.62)% 35.87% 23.87% 23.84% 17.90% (3.23)% 18.93%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 676,067 $ 458,787 $ 38,382 $ 27,346 $ 59,810 $ 24,687 $ 17,915 $ 11,285 $ 2,298 $ 4,340
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.33% 1.94% 1.64%I 2.54%I 1.79% 2.21%A 2.17% 2.50%I 2.50%I 2.54%I
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.29%J 1.93%J 1.61%J 2.54% 1.77%J 2.21%A 2.17% 2.50% 2.50% 2.54%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) .49% .37% .50% (.20)% (.14)% .02%A .16% .94% .91% 1.18%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 100% 16% 166% 139% 295% 111%A 254% 62% 142% 185%
AVERAGE COMMISSION
RATEK $ .0460 $ .0392
</TABLE>
BUSINESS SERVICES AND OUTSOURCING
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEAR ENDED FEBRUARY 28 1998H
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)D --
NET REALIZED AND UNREALIZED GAIN (LOSS) .89
TOTAL FROM INVESTMENT OPERATIONS .89
NET ASSET VALUE, END OF PERIOD $ 10.89
TOTAL RETURNB,C 8.90%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 15,915
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,I
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.49)%A
PORTFOLIO TURNOVER RATE 36%A
AVERAGE COMMISSION RATEK $ .0153
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
F FOR THE YEARS ENDED APRIL 30
G FOR THE YEAR ENDED FEBRUARY 29
H FOR THE PERIOD FEBRUARY 4, 1998 (COMMENCEMENT OF OPERATIONS) TO
FEBRUARY 28, 1998
I 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.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
K 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 42.53 $ 39.53 $ 33.91 $ 31.66 $ 28.62 $ 32.81 $ 26.25 $ 22.70 $ 23.77 $ 20.67
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)F (.02) .28 .01 .36 .29 .30 .12 .28 .41 .28
NET REALIZED AND
UNREALIZED GAIN (LOSS) 7.88 5.49 8.89 2.65 5.97 (.84) 7.27 3.94 (.21) 2.82
TOTAL FROM INVESTMENT
OPERATIONS 7.86 5.77 8.90 3.01 6.26 (.54) 7.39 4.22 .20 3.10
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME
(LOSS)F -- (.12) (.08) (.22) (.23) (.31) (.18) (.10) (.16) --
FROM NET REALIZED
GAIN (4.54)N (2.74) (3.22) (.60) (3.05) (3.36) (.71) (.60) (1.13) --
TOTAL DISTRIBUTIONS (4.54) (2.86) (3.30) (.82) (3.28) (3.67) (.89) (.70) (1.29) --
REDEMPTION FEES ADDED
TO PAID IN CAPITAL .05 .09 .02 .06 .06 .02 .06 .03 .02 --
NET ASSET VALUE, END OF
PERIOD $ 45.90 $ 42.53 $ 39.53 $ 33.91 $ 31.66 $ 28.62 $ 32.81 $ 26.25 $ 22.70 $ 23.77
TOTAL RETURNA,B 19.47% 15.06% 27.48% 9.90% 23.63% (1.61)% 29.07% 18.99% .71% 15.00%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 69,349 $ 111,409 $ 89,230 $ 97,511 $ 62,217 $ 28,796 $ 39,566 $ 20,396 $ 21,150 $ 44,914
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.68% 1.83% 1.99% 1.52% 1.93% 1.89%K 2.16% 2.50%D 2.37% 2.24%
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.67%G 1.81%G 1.97%G 1.51%G 1.93% 1.89%K 2.16% 2.50% 2.37% 2.24%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.05)% .67% .04% 1.07% .97% 1.21%K .40% 1.21% 1.65% 1.27%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 31% 207% 87% 106% 81% 214%K 87% 87% 99% 117%
AVERAGE COMMISSION
RATEI $ .0399 $ .0458
</TABLE>
COMPUTERS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 48.25 $ 41.03 $ 30.67 $ 27.02 $ 20.15 $ 17.63 $ 16.60 $ 12.68 $ 11.60 $ 11.86
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)F (.32) (.36) (.23) (.31) (.21)H (.15) (.03)M .42L (.11) (.13)
NET REALIZED AND UNREALIZED
GAIN(LOSS) 6.42 9.94 16.10 3.68 8.66 2.44 1.18 3.21 .98 (.13)
TOTAL FROM INVESTMENT
OPERATIONS 6.10 9.58 15.87 3.37 8.45 2.29 1.15 3.63 .87 (.26)
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- -- -- -- (.12) -- --
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- -- (.27) -- -- --
FROM NET REALIZED
GAIN (10.64) (2.47) (5.61) -- (1.80) -- (.22) -- -- --
IN EXCESS OF NET REALIZED
GAIN (2.75) -- -- -- -- -- -- -- -- --
TOTAL
DISTRIBUTIONS (13.39) (2.47) (5.61) -- (1.80) -- (.49) (.12) -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .12 .11 .10 .28 .22 .23 .37 .41 .21 --
NET ASSET VALUE, END OF
PERIOD $ 41.08 $ 48.25 $ 41.03 $ 30.67 $ 27.02 $ 20.15 $ 17.63 $ 16.60 $ 12.68 $ 11.60
TOTAL RETURNA,B 20.33% 23.97% 52.79% 13.51% 45.06% 14.29% 9.36% 32.11% 9.31% (2.19)%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 785,465 $ 604,286 $ 527,337 $ 215,014 $ 120,435 $ 47,596 $ 32,810 $ 29,455 $ 27,561 $ 15,730
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.40% 1.48% 1.40% 1.71% 1.90% 1.81%K 2.17% 2.26% 2.64%D 2.56%D
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.34%G 1.44%G 1.38%G 1.69%G 1.89%G 1.81%K 2.17% 2.26% 2.64% 2.56%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.67)% (.83)% (.56)% (1.12)% (.91)% (.98)%K (.18)% 2.94% (.94)% (1.18)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 333% 255% 129% 189% 145% 254%K 568% 695% 596% 466%
AVERAGE COMMISSION
RATEI $ .0444 $ .0432
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D 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.
E FOR THE YEARS ENDED APRIL 30
F NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
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.
H INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.07 PER SHARE.
I 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.
J FOR THE YEAR ENDED FEBRUARY 29
K ANNUALIZED
L INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.08 AND $.36 PER SHARE RELATING TO A NONRECURRING
INITIATIVE TO INVEST IN DIVIDEND INCOME PRODUCING SECURITIES WHICH WAS
IN EFFECT FOR A PORTION OF 1991.
M INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.22 PER SHARE RELATING TO A NONRECURRING INITIATIVE TO
INVEST IN DIVIDEND INCOME PRODUCING SECURITIES WHICH WAS IN EFFECT FOR
A PORTION OF 1992.
N THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
CONSTRUCTION AND HOUSING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 22.00 $ 19.56 $ 16.79 $ 19.82 $ 15.74 $ 13.84 $ 11.76 $ 11.66 $ 13.01 $ 11.25
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)L (.25) .06 .07 (.02) .01 .02 (.06) .01 -- .14
NET REALIZED AND
UNREALIZED GAIN (LOSS) 7.67 3.38 3.55 (2.50) 4.26 1.87 2.93 1.45 .34 1.95
TOTAL FROM INVESTMENT
OPERATIONS 7.42 3.44 3.62 (2.52) 4.27 1.89 2.87 1.46 .34 2.09
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.02) (.02) (.07) -- -- -- -- (.16) (.08) (.06)
FROM NET REALIZED GAIN (3.87) (1.03) (.81) (.52) (.22) (.01) (.88) (1.27) (1.62) (.27)
TOTAL DISTRIBUTIONS (3.89) (1.05) (.88) (.52) (.22) (.01) (.88) (1.43) (1.70) (.33)
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .10 .05 .03 .01 .03 .02 .09 .07 .01 --
NET ASSET VALUE, END OF
PERIOD $ 25.63 $ 22.00 $ 19.56 $ 16.79 $ 19.82 $ 15.74 $ 13.84 $ 11.76 $ 11.66 $ 13.01
TOTAL RETURNF, G 40.04% 18.64% 21.77% (12.54)% 27.45% 13.81% 26.96% 13.46% 2.39% 19.01%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 57,484 $ 30,581 $ 42,668 $ 16,863 $ 80,999 $ 31,111 $ 26,687 $ 4,070 $ 1,217 $ 1,335
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 2.50%E 1.41% 1.43% 1.76% 1.67% 2.02%A 2.50% 2.48%E 2.41%E 2.56%E
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 2.43%I 1.35%I 1.40%I 1.74%I 1.66%I 2.02%A 2.50% 2.48% 2.41% 2.56%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (1.10)% .27% .39% (.11)% .03% .20%A (.49)% .08% (.03)% 1.16%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 404% 270% 139% 45% 35% 60%A 183% 137% 185% 225%
AVERAGE COMMISSION RATEK $ .0342 $ .0410
</TABLE>
CONSUMER INDUSTRIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY 28 1998 1997 1996J 1995 1994 1993C 1992D 1991B
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.66 $ 17.84 $ 13.91 $ 15.24 $ 12.97 $ 13.81 $ 11.22 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)L (.22) (.22) .08 (.15) (.20) (.09) (.07) .05H
NET REALIZED AND UNREALIZED GAIN (LOSS) 8.34 2.93 3.97 (.60) 3.84 .20 2.86 1.18
TOTAL FROM INVESTMENT OPERATIONS 8.12 2.71 4.05 (.75) 3.64 .11 2.79 1.23
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- -- (.02) -- -- -- -- (.06)
FROM NET REALIZED GAIN (1.52) -- (.01) (.60) (1.40) (.97) (.22) --
IN EXCESS OF NET REALIZED GAIN -- -- (.20) -- -- -- -- --
TOTAL DISTRIBUTIONS (1.52) -- (.23) (.60) (1.40) (.97) (.22) (.06)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .05 .11 .11 .02 .03 .02 .02 .05
NET ASSET VALUE, END OF PERIOD $ 27.31 $ 20.66 $ 17.84 $ 13.91 $ 15.24 $ 12.97 $ 13.81 $ 11.22
TOTAL RETURNF,G 40.36% 15.81% 30.01% (4.59)% 28.43% .98% 25.27% 12.89%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 72,152 $ 18,392 $ 22,362 $ 20,501 $ 8,374 $ 7,005 $ 7,553 $ 1,877
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.01% 2.49% 1.53%E 2.49%E 2.48%E 2.47%A,E 2.48%E 2.43%A,E
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.97%I 2.44%I 1.48%I 2.49% 2.48% 2.47%A 2.48% 2.43%A
RATIO OF NET INVESTMENT INCOME (LOSS) TO
AVERAGE NET ASSETS (.90)% (1.13)% .46% (1.08)% (1.34)% (.80)%A (.56)% .62%A
PORTFOLIO TURNOVER RATE 199% 340% 601% 190% 169% 215%A 140% 108%A
AVERAGE COMMISSION RATEK $ .0273 $ .0355
</TABLE>
A ANNUALIZED
B FROM JUNE 29, 1990 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1991
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E 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 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.02 PER SHARE.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
J FOR THE YEAR ENDED FEBRUARY 29
K 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.
L NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
CYCLICAL INDUSTRIES
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEAR ENDED FEBRUARY 28 1998G
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)B (.11)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.59
TOTAL FROM INVESTMENT OPERATIONS 2.48
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.46)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .05
NET ASSET VALUE, END OF PERIOD $ 12.07
TOTAL RETURNH,I 25.77%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,965
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.93)%A
PORTFOLIO TURNOVER RATE 140%A
AVERAGE COMMISSION RATEK $ .0220
</TABLE>
DEFENSE AND AEROSPACE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996F 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING
OF PERIOD $ 28.94 $ 26.97 $ 19.64 $ 19.14 $ 15.08 $ 14.37 $ 13.72 $ 11.90 $ 12.42 $ 12.16
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)B (.29) (.11) (.05) (.06) .07 (.02) (.01) .10 .04 (.05)
NET REALIZED AND
UNREALIZED GAIN (LOSS) 11.84 4.18 9.09 .70 4.57 .69 .67 1.72 (.56) .31
TOTAL FROM INVESTMENT
OPERATIONS 11.55 4.07 9.04 .64 4.64 .67 .66 1.82 (.52) .26
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- (.10) -- (.04) (.12) -- --
IN EXCESS OF NET
INVESTMENT INCOME -- -- -- -- -- -- (.02) -- -- --
FROM NET REALIZED GAIN (3.04) (2.17) (1.82) (.27) (.62) -- -- -- -- --
TOTAL DISTRIBUTIONS (3.04) (2.17) (1.82) (.27) (.72) -- (.06) (.12) -- --
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .12 .07 .11 .13 .14 .04 .05 .12 -- --
NET ASSET VALUE, END OF
PERIOD $ 37.57 $ 28.94 $ 26.97 $ 19.64 $ 19.14 $ 15.08 $ 14.37 $ 13.72 $ 11.90 $ 12.42
TOTAL RETURNH,I 42.68% 15.87% 47.40% 4.13% 32.04% 4.94% 5.18% 16.42% (4.19)% 2.14%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 101,805 $ 68,803 $ 26,648 $ 4,985 $ 11,136 $ 1,463 $ 1,280 $ 3,070 $ 1,599 $ 1,759
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.77% 1.84% 1.77%E 2.49%E 2.53%E 2.48%A,E 2.46%E 2.49%E 2.43%E 2.53%E
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.71%J 1.81%J 1.75%J 2.49% 2.53% 2.48%A 2.46% 2.49% 2.43% 2.53%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.85)% (.39)% (.20)% (.32)% .40% (.14)%A (.10)% .78% .34% (.39)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 311% 219% 267% 146% 324% 87%A 32% 162% 96% 62%
AVERAGE COMMISSION RATEK $ .0320 $ .0335
</TABLE>
A ANNUALIZED
B NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E 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 FOR THE YEAR ENDED FEBRUARY 29
G FROM MARCH 3, 1997 (COMMENCEMENT OF OPERATIONS) TO FEBRUARY 28, 1998
H TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
I THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
K 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY 28 1998 1997 1996C 1995 1994 1993D 1992E 1991B
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.68 $ 19.42 $ 20.40 $ 19.65 $ 16.44 $ 13.54 $ 11.95 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)I (.18) (.18) (.17) (.16) (.16) (.07) (.08)J (.10)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 4.95 .42 4.17 2.55 4.82 2.98 2.42 1.86
TOTAL FROM INVESTMENT OPERATIONS 4.77 .24 4.00 2.39 4.66 2.91 2.34 1.76
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (4.35) -- (5.00) (1.67) (1.47) (.03) (.79) --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .04 .02 .02 .03 .02 .02 .04 .19
NET ASSET VALUE, END OF PERIOD $ 20.14 $ 19.68 $ 19.42 $ 20.40 $ 19.65 $ 16.44 $ 13.54 $ 11.95
TOTAL RETURNG,H 28.17% 1.34% 21.84% 13.63% 30.24% 21.66% 21.41% 19.50%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 238,356 $ 220,360 $ 333,185 $ 254,426 $ 222,109 $ 83,383 $ 39,261 $ 7,745
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.61% 1.64% 1.53% 1.58% 1.56% 1.88%A 2.50% 2.50%A,K
RATIO OF EXPENSES TO AVERAGE NET
ASSETS AFTER EXPENSE REDUCTIONS 1.55%F 1.62%F 1.51%F 1.56%F 1.56% 1.88%A 2.50% 2.50%A
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (.82)% (.86)% (.78)% (.83)% (.88)% (.59)%A (.61)% (1.23)%A
PORTFOLIO TURNOVER RATE 383% 202% 249% 266% 280% 77%A 25% 469%A
AVERAGE COMMISSION RATEL $ .0437 $ .0346
</TABLE>
ELECTRONICS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996C 1995 1994 1993D 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 37.95 $ 28.18 $ 19.80 $ 17.67 $ 14.28 $ 11.81 $ 10.75 $ 9.11 $ 7.32 $ 7.86
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)I (.17) (.17) (.08) (.18) (.09) (.05) (.12) (.04) -- (.11)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 7.32 9.80 13.51 2.11 6.09 2.33 1.00 1.53 1.62 (.43)
TOTAL FROM INVESTMENT
OPERATIONS 7.15 9.63 13.43 1.93 6.00 2.28 .88 1.49 1.62 (.54)
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- -- -- -- (.01) -- --
FROM NET REALIZED
GAIN (7.60) -- (5.25) -- (2.75) -- -- -- -- --
IN EXCESS OF NET REALIZED
GAIN (2.60) -- -- -- -- -- -- -- -- --
TOTAL
DISTRIBUTIONS (10.20) -- (5.25) -- (2.75) -- -- (.01) -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .09 .14 .20 .20 .14 .19 .18 .16 .17 --
NET ASSET VALUE, END OF
PERIOD $ 34.99 $ 37.95 $ 28.18 $ 19.80 $ 17.67 $ 14.28 $ 11.81 $ 10.75 $ 9.11 $ 7.32
TOTAL
RETURNG,H 24.15% 34.67% 72.75% 12.05% 46.24% 20.91% 9.86% 18.15% 24.45% (6.87)%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 2,668,750 $ 1,744,017 $ 1,133,362 $ 216,433 $ 110,993 $ 48,027 $ 34,222 $ 18,178 $ 26,141 $ 8,667
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.18% 1.33% 1.25% 1.72% 1.67% 1.69%A 2.16% 2.26% 2.57%K 2.79%K
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.12%F 1.29%F 1.22%F 1.71%F 1.67% 1.69%A 2.16% 2.26% 2.57% 2.79%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.42)% (.54)% (.28)% (.98)% (.52)% (.50)%A (1.07)% (.45)% (.02)% (1.51)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 435% 341% 366% 205% 163% 293%A 299% 268% 378% 697%
AVERAGE COMMISSION
RATEL $ .0442 $ .0421
</TABLE>
A ANNUALIZED
B FROM JUNE 29, 1990 (COMMENCEMENT OF OPERATIONS) TO APRIL 30, 1991
C FOR THE YEAR ENDED FEBRUARY 29
D FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
E FOR THE YEARS ENDED APRIL 30
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.
G TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
H THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
I NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
J INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.06 PER SHARE.
K 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 RATIOS WOULD HAVE BEEN
HIGHER.
L 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 21.31 $ 18.97 $ 16.10 $ 16.73 $ 15.84 $ 14.70 $ 15.43 $ 16.64 $ 14.40 $ 13.15
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J .11 .13 .18 .07 .06 .23 .17 .16 .27 .32
NET REALIZED AND UNREALIZED GAIN
(LOSS) 3.93 3.59 3.13 (.11) 1.35 1.16 (.75) .15 2.23 1.25
TOTAL FROM INVESTMENT
OPERATIONS 4.04 3.72 3.31 (.04) 1.41 1.39 (.58) .31 2.50 1.57
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (LOSS) (.09) (.13) (.11) (.08) (.03) (.27) (.16) (.15) (.07) (.32)
FROM NET REALIZED
GAIN (4.09) (1.31) (.36) (.54) (.57) -- (.02) (1.43) (.22) --
TOTAL
DISTRIBUTIONS (4.18) (1.44) (.47) (.62) (.60) (.27) (.18) (1.58) (.29) (.32)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .03 .06 .03 .03 .08 .02 .03 .06 .03 --
NET ASSET VALUE, END OF
PERIOD $ 21.20 $ 21.31 $ 18.97 $ 16.10 $ 16.73 $ 15.84 $ 14.70 $ 15.43 $ 16.64 $ 14.40
TOTAL RETURNF,G 20.40% 20.35% 20.92% .04% 9.69% 9.81% (3.55)% 2.26% 17.52% 12.37%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 147,023 $ 203,265 $ 119,676 $ 96,023 $ 145,490 $ 179,133 $ 77,334 $ 92,611 $ 83,912 $ 80,225
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.58% 1.57% 1.63% 1.85% 1.67% 1.71%A 1.78% 1.79% 1.94% 1.77%
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.53%B 1.55%B 1.63% 1.85% 1.66%B 1.71%A 1.78% 1.79% 1.94% 1.77%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME .47% .62% 1.04% .42% .37% 1.88%A 1.16% .99% 1.69% 2.48%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 115% 87% 97% 106% 157% 72%A 81% 61% 74% 168%
AVERAGE COMMISSION
RATEK $ .0142 $ .0399
</TABLE>
ENERGY SERVICE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 20.46 $ 16.09 $ 11.97 $ 11.66 $ 11.01 $ 9.43 $ 12.51 $ 12.19 $ 8.99 $ 9.22
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.10) (.01) .08I .02 .03 .01 (.12) -- (.05) (.04)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 9.36 5.05 4.49 .67 .51 1.47 (3.11) .15 3.17 (.19)
TOTAL FROM INVESTMENT
OPERATIONS 9.26 5.04 4.57 .69 .54 1.48 (3.23) .15 3.12 (.23)
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- (.04) (.01) (.05) -- -- (.02) -- --
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- (.01) -- -- -- -- -- --
FROM NET REALIZED
GAIN (1.85) (.79)L (.48) (.35) -- -- -- -- -- --
IN EXCESS OF NET REALIZED
GAIN -- -- -- (.13) -- -- -- -- -- --
TOTAL DISTRIBUTIONS (1.85) (.79) (.52) (.50) (.05) -- -- (.02) -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .15 .12 .07 .12 .16 .10 .15 .19 .08 --
NET ASSET VALUE, END OF
PERIOD $ 28.02 $ 20.46 $ 16.09 $ 11.97 $ 11.66 $ 11.01 $ 9.43 $ 12.51 $ 12.19 $ 8.99
TOTAL RETURNF,G 48.43% 32.26% 39.15% 7.60% 6.36% 16.76% (24.62)% 2.80% 35.60% (2.49)%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 919,002 $ 439,504 $ 273,805 $ 63,794 $ 40,857 $ 85,234 $ 41,322 $ 73,398 $ 61,821 $ 44,003
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.25% 1.47% 1.59% 1.81% 1.66% 1.76%A 2.07% 1.82% 2.29% 2.53%E
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.22%B 1.45%B 1.58%B 1.79%B 1.65%B 1.76%A 2.07% 1.82% 2.29% 2.53%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.35)% (.07)% .60% .19% .23% .13%A (1.13)% (.02)% (.42)% (.45)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 78% 167% 223% 209% 137% 236%A 89% 62% 128% 78%
AVERAGE COMMISSION
RATEK $ .0395 $ .0374
</TABLE>
A ANNUALIZED
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E 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 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H FOR THE YEAR ENDED FEBRUARY 29
I INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.02 PER SHARE.
J NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
K 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.
L THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
ENVIRONMENTAL SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY 28 1998 1997 1996H 1995 1994 1993I 1992G 1991G 1990F
NET ASSET VALUE, BEGINNING OF
PERIOD $ 14.50 $ 12.42 $ 10.27 $ 11.93 $ 11.36 $ 11.39 $ 12.95 $ 11.41 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)D (.13) (.08) (.17) (.14) (.11) (.06) (.09) (.04) .02
NET REALIZED AND UNREALIZED GAIN
(LOSS) 2.07 2.04E 2.95 (1.53) .67 .42 (1.06) 1.55 1.38
TOTAL FROM INVESTMENT
OPERATIONS 1.94 1.96 2.78 (1.67) .56 .36 (1.15) 1.51 1.40
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- -- -- -- -- -- -- -- (.01)
FROM NET REALIZED GAIN -- -- (.65) -- -- (.39) (.42) -- --
IN EXCESS OF NET REALIZED
GAIN -- (.02) -- -- -- -- -- -- --
TOTAL DISTRIBUTIONS -- (.02) (.65) -- -- (.39) (.42) -- (.01)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .02 .14 .02 .01 .01 -- .01 .03 .02
NET ASSET VALUE, END OF PERIOD $ 16.46 $ 14.50 $ 12.42 $ 10.27 $ 11.93 $ 11.36 $ 11.39 $ 12.95 $ 11.41
TOTAL RETURNB,C 13.52% 16.93% 27.49% (13.91)% 5.02% 3.34% (8.67)% 13.50% 14.20%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 25,183 $ 32,525 $ 27,587 $ 31,270 $ 65,956 $ 65,913 $ 65,132 $ 100,263 $ 101,736
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 2.23% 2.18% 2.36% 2.04% 2.07% 1.99%A 2.03% 2.03% 2.25%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE
REDUCTIONS 2.22%J 2.11%J 2.32%J 2.01%J 2.03%J 1.99%A 2.03% 2.03% 2.25%A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET
ASSETS (.84)% (.59)% (1.43)% (1.32)% (1.02)% (.70)%A (.74)% (.30)% .16%A
PORTFOLIO TURNOVER RATE 59% 252% 138% 82% 191% 176%A 130% 122% 72%A
AVERAGE COMMISSION RATEK $ .0313 $ .0348
</TABLE>
FINANCIAL SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993I 1992G 1991G 1990G 1989G
NET ASSET VALUE, BEGINNING OF
PERIOD $ 82.94 $ 65.70 $ 48.23 $ 51.24 $ 53.29 $ 42.42 $ 30.55 $ 28.28 $ 30.64 $ 26.36
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOMED .70 .74 1.03 .76 .29 .33 .54 .58 .66 1.00
NET REALIZED AND UNREALIZED GAIN
(LOSS) 30.65 21.55 17.56 .87 5.02 14.30 11.35 1.67 (2.53) 4.09
TOTAL FROM INVESTMENT
OPERATIONS 31.35 22.29 18.59 1.63 5.31 14.63 11.89 2.25 (1.87) 5.09
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.64) (.63) (.37) (.79) (.20) (.51) (.35) (.52) (.33) (.81)
FROM NET REALIZED
GAIN (10.51) (4.56) (.91) (3.93) (7.32) (3.38) -- -- (.19) --
TOTAL
DISTRIBUTIONS (11.15) (5.19) (1.28) (4.72) (7.52) (3.89) (.35) (.52) (.52) (.81)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .14 .14 .16 .08 .16 .13 .33 .54 .03 --
NET ASSET VALUE, END OF
PERIOD $ 103.28 $ 82.94 $ 65.70 $ 48.23 $ 51.24 $ 53.29 $ 42.42 $ 30.55 $ 28.28 $ 30.64
TOTAL RETURNB,C 41.08% 35.54% 39.05% 4.72% 10.85% 36.46% 40.31% 10.51% (6.20)% 19.68%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 604,908 $ 426,424 $ 270,466 $ 153,089 $ 116,195 $ 214,612 $ 91,700 $ 35,962 $ 21,087 $ 32,647
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.31% 1.45% 1.42% 1.56% 1.64% 1.54%A 1.85% 2.49% 2.22% 1.07%
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.29%J 1.43%J 1.41%J 1.54%J 1.63%J 1.54%A 1.85% 2.49% 2.22% 1.07%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME .78% 1.03% 1.78% 1.52% .53% .86%A 1.49% 2.22% 2.03% 3.53%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 84% 80% 125% 107% 93% 100%A 164% 237% 308% 186%
AVERAGE COMMISSION
RATEK $ .0452 $ .0433
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E 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.
F FOR THE PERIOD JUNE 29, 1989 (COMMENCEMENT OF OPERATIONS) TO APRIL
30, 1990
G FOR THE YEARS ENDED APRIL 30
H FOR THE YEAR ENDED FEBRUARY 29
I FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
K 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 44.53 $ 42.15 $ 32.53 $ 31.49 $ 30.86 $ 29.22 $ 27.87 $ 22.84 $ 20.76 $ 16.05
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOMEF .33 .42 .37 .15 .09 .05 .13 .21 .19 .09
NET REALIZED AND UNREALIZED GAIN
(LOSS) 9.22 4.91 11.61 2.80 3.29 3.26 2.89 5.78 4.07 4.67
TOTAL FROM INVESTMENT
OPERATIONS 9.55 5.33 11.98 2.95 3.38 3.31 3.02 5.99 4.26 4.76
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.37) (.24) (.20) (.08) (.06) (.10) (.11) (.27) (.04) (.05)
FROM NET REALIZED
GAIN (4.95) (2.77) (2.20) (1.85) (2.70) (1.57) (1.59) (.79) (2.17) --
TOTAL
DISTRIBUTIONS (5.32) (3.01) (2.40) (1.93) (2.76) (1.67) (1.70) (1.06) (2.21) (.05)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .05 .06 .04 .02 .01 -- .03 .10 .03 --
NET ASSET VALUE, END OF
PERIOD $ 48.81 $ 44.53 $ 42.15 $ 32.53 $ 31.49 $ 30.86 $ 29.22 $ 27.87 $ 22.84 $ 20.76
TOTAL RETURNA,B 23.58% 13.59% 37.92% 10.14% 11.69% 11.72% 11.11% 27.39% 20.83% 29.70%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 250,567 $ 223,423 $ 301,102 $ 197,130 $ 95,010 $ 108,377 $ 108,922 $ 64,490 $ 25,965 $ 15,536
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.49% 1.52% 1.43% 1.70% 1.65% 1.67%K 1.83% 2.22% 2.53%D 2.50%D
RATIO OF EXPENSES TO
AVERAGE 1.48%G 1.50%G 1.42%G 1.68%G 1.64%G 1.67%K 1.83% 2.22% 2.53% 2.50%
NET ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME .73% 1.01% .99% .49% .29% .21%K .46% .85% .82% .48%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 74% 91% 124% 126% 96% 515%K 63% 124% 267% 248%
AVERAGE COMMISSION
RATEI $ .0333 $ .0326
</TABLE>
HEALTH CARE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 102.45 $ 100.47 $ 76.13 $ 63.31 $ 52.57 $ 70.42 $ 69.99 $ 46.15 $ 39.79 $ 33.59
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)F .33 .52 .95 .75 .15 .13 (.02) .73H .72 .33
NET REALIZED AND UNREALIZED GAIN
(LOSS) 31.94 18.01 28.85 18.38 10.61 (9.34) 9.47 28.70 6.56 6.15
TOTAL FROM INVESTMENT OPERAT
IONS 32.27 18.53 29.80 19.13 10.76 (9.21) 9.45 29.43 7.28 6.48
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.25) (.65) (.59) (.62) (.07) (.16) (.34) (.20) (.13) (.28)
FROM NET REALIZED
GAIN (20.73) (15.95) (4.92) (5.74) -- (8.51) (8.81) (5.67) (.84) --
TOTAL DISTRIBUT
IONS (20.98) (16.60) (5.51) (6.36) (.07) (8.67) (9.15) (5.87) (.97) (.28)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .10 .05 .05 .05 .05 .03 .13 .28 .05 --
NET ASSET VALUE, END OF
PERIOD $ 113.84 $ 102.45 $ 100.47 $ 76.13 $ 63.31 $ 52.57 $ 70.42 $ 69.99 $ 46.15 $ 39.79
TOTAL
RETURNA,B 36.47% 20.41% 39.68% 31.24% 20.57% (14.81)% 13.92% 69.32% 18.55% 19.44%
NET ASSETS, END OF
PERIOD $ 2,224,019 $ 1,372,554 $ 1,525,910 $ 943,141 $ 523,890 $ 536,367 $ 838,814 $ 624,018 $ 217,522 $ 210,700
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.20% 1.33% 1.31% 1.39% 1.59% 1.46%K 1.44% 1.53% 1.74% 1.41%
RATIO OF EXPENSES TO
AVERAGE 1.18%G 1.32%G 1.30%G 1.36%G 1.55%G 1.46%K 1.44% 1.53% 1.74% 1.41%
NET ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) .31% .52% 1.06% 1.08% .26% .24%K (.02)% 1.28% 1.61% .95%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 79% 59% 54% 151% 213% 112%K 154% 159% 126% 114%
AVERAGE COMMISSION
RATEI $ .0490 $ .0466
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D 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.
E FOR THE YEARS ENDED APRIL 30
F NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
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.
H INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.55 PER SHARE.
I 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.
J FOR THE YEAR ENDED FEBRUARY 29
K ANNUALIZED
HOME FINANCE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996F 1995 1994 1993D 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 46.00 $ 33.30 $ 23.92 $ 25.03 $ 22.18 $ 15.38 $ 10.84 $ 8.98 $ 10.88 $ 8.57
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOMEJ .33 .53 .53 .20 .03 .09 .05 .16 .09 .11
NET REALIZED AND UNREALIZED GAIN
(LOSS) 13.10 14.60 9.72 2.34 4.15 6.80 4.40 1.69 (1.47) 2.33
TOTAL FROM INVESTMENT
OPERATIONS 13.43 15.13 10.25 2.54 4.18 6.89 4.45 1.85 (1.38) 2.44
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.29) (.32) (.19) (.12) (.01) (.01) (.14) (.14) (.04) (.13)
FROM NET REALIZED
GAIN (5.84) (2.16) (.73) (3.60) (1.40) (.28) -- -- (.49) --
TOTAL DISTRIBUT
IONS (6.13) (2.48) (.92) (3.72) (1.41) (.29) (.14) (.14) (.53) (.13)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .06 .05 .05 .07 .08 .20 .23 .15 .01 --
NET ASSET VALUE, END OF
PERIOD $ 53.36 $ 46.00 $ 33.30 $ 23.92 $ 25.03 $ 22.18 $ 15.38 $ 10.84 $ 8.98 $ 10.88
TOTAL
RETURNG,H 32.39% 47.50% 43.24% 12.43% 19.61% 46.43% 43.62% 22.88% (13.04)% 28.76%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 1,668,610 $ 1,176,828 $ 617,035 $ 229,924 $ 155,563 $ 337,903 $ 49,405 $ 8,782 $ 5,432 $ 5,557
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.21% 1.38% 1.35% 1.47% 1.58% 1.55%A 2.08% 2.50%I 2.53%I 2.56%I
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.19%C 1.34%C 1.32%C 1.45%C 1.58% 1.55%A 2.08% 2.50% 2.53% 2.56%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME .67% 1.41% 1.80% .80% .11% .61%A .40% 1.78% .83% 1.13%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 54% 78% 81% 124% 95% 61%A 134% 159% 282% 216%
AVERAGE COMMISSION
RATEK $ .0382 $ .0417
</TABLE>
INDUSTRIAL EQUIPMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996F 1995 1994 1993D 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 25.51 $ 25.11 $ 20.04 $ 20.61 $ 15.04 $ 13.89 $ 11.60 $ 12.41 $ 11.05 $ 10.52
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.08) .06 .04 .01 -- .02 (.07) .01 .13B (.07)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 5.73 4.15 7.10 (.44) 5.92 1.09 2.39 (.80) 1.19 .60
TOTAL FROM INVESTMENT
OPERATIONS 5.65 4.21 7.14 (.43) 5.92 1.11 2.32 (.79) 1.32 .53
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.02) (.04) (.05) (.01) (.01) -- -- -- -- --
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- -- (.11) (.09) -- --
FROM NET REALIZED
GAIN (5.26) (3.84) (2.05) (.16) (.40) -- -- -- -- --
TOTAL DISTRIBUTIONS (5.28) (3.88) (2.10) (.17) (.41) -- (.11) (.09) -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .03 .07 .03 .03 .06 .04 .08 .07 .04 --
NET ASSET VALUE, END OF
PERIOD $ 25.91 $ 25.51 $ 25.11 $ 20.04 $ 20.61 $ 15.04 $ 13.89 $ 11.60 $ 12.41 $ 11.05
TOTAL RETURNG,H 25.76% 18.25% 36.86% (1.93)% 40.07% 8.28% 20.91% (5.90)% 12.31% 5.04%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 50,428 $ 102,882 $ 137,520 $ 109,968 $ 206,012 $ 14,601 $ 7,529 $ 1,949 $ 3,240 $ 2,965
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.67% 1.51% 1.54% 1.80% 1.69% 2.49%A,I 2.49%I 2.52%I 2.59%I 2.58%I
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.60%C 1.44%C 1.53%C 1.78%C 1.68%C 2.49%A 2.49% 2.52% 2.59% 2.58%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.32)% .25% .19% .06% .01% .15%A (.57)% .09% 1.06% (.66)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 115% 261% 115% 131% 95% 407%A 167% 43% 132% 164%
AVERAGE COMMISSION
RATEK $ .0386 $ .0401
</TABLE>
A ANNUALIZED
B INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.11 PER SHARE.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
D FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
E FOR THE YEARS ENDED APRIL 30
F FOR THE YEAR ENDED FEBRUARY 29
G TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
H THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
I 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.
J NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
K 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996E 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 27.66 $ 26.07 $ 23.13 $ 21.67 $ 17.44 $ 17.12 $ 12.63 $ 12.43 $ 13.73 $ 13.15
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)I (.11) .06 .12 .17 .15 .12 .04 .15 .17 (.07)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 1.43 3.12 2.92 1.43 4.07 .19 4.32 .37 (1.50) .86
TOTAL FROM INVESTMENT
OPERATIONS 1.32 3.18 3.04 1.60 4.22 .31 4.36 .52 (1.33) .79
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.03) (.06) (.15) (.18) (.06) (.08) -- -- -- (.21)
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- -- (.06) (.34) -- --
FROM NET REALIZED GAIN (4.00) (1.57) -- -- -- -- -- -- -- --
TOTAL DISTRIBUTIONS (4.03) (1.63) (.15) (.18) (.06) (.08) (.06) (.34) -- (.21)
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .05 .04 .05 .04 .07 .09 .19 .02 .03 --
NET ASSET VALUE, END OF
PERIOD $ 25.00 $ 27.66 $ 26.07 $ 23.13 $ 21.67 $ 17.44 $ 17.12 $ 12.63 $ 12.43 $ 13.73
TOTAL RETURNF,G 6.59% 12.69% 13.38% 7.65% 24.66% 2.36% 36.15% 4.25% (9.47)% 6.13%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 22,582 $ 66,462 $ 86,338 $ 183,454 $ 155,721 $ 25,041 $ 22,184 $ 2,689 $ 3,140 $ 8,571
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.98% 1.54% 1.64% 1.56% 2.10% 2.02%A 2.47%H 2.49%H 2.59%H 2.68%H
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.94%B 1.51%B 1.61%B 1.53%B 2.08%B 2.02%A 2.47% 2.49% 2.59% 2.68%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.42)% .23% .49% .77% .75% .86%A .25% 1.30% 1.22% (.54)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 118% 105% 138% 139% 185% 273%A 222% 148% 250% 289%
AVERAGE COMMISSION RATEJ $ .0214 $ .0242
</TABLE>
INSURANCE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996E 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 32.62 $ 26.77 $ 21.31 $ 19.41 $ 21.58 $ 18.03 $ 16.73 $ 13.63 $ 12.65 $ 9.90
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)I .01 .01 .06 .05 -- (.04) .04 .23 .17 .11
NET REALIZED AND UNREALIZED
GAIN (LOSS) 12.93 7.21 6.15 1.78 (.24) 5.12 1.48 2.83 .93 2.73
TOTAL FROM INVESTMENT
OPERATIONS 12.94 7.22 6.21 1.83 (.24) 5.08 1.52 3.06 1.10 2.84
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- (.03) (.07) -- (.01) -- (.26) -- (.15) (.09)
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- (.03) -- -- -- --
FROM NET REALIZED GAIN (3.54) (1.45) (.72) -- (1.96) (1.71) -- -- -- --
TOTAL DISTRIBUTIONS (3.54) (1.48) (.79) -- (1.97) (1.74) (.26) -- (.15) (.09)
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .08 .11 .04 .07 .04 .21 .04 .04 .03 --
NET ASSET VALUE, END OF
PERIOD $ 42.10 $ 32.62 $ 26.77 $ 21.31 $ 19.41 $ 21.58 $ 18.03 $ 16.73 $ 13.63 $ 12.65
TOTAL RETURNF,G 42.81% 28.28% 29.51% 9.79% (1.24)% 31.98% 9.47% 22.74% 8.82% 28.83%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 125,151 $ 42,367 $ 38,994 $ 21,838 $ 18,419 $ 26,367 $ 2,573 $ 2,176 $ 2,240 $ 3,160
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.45% 1.82% 1.77% 2.36% 1.93% 2.49%A,H 2.47%H 2.49%H 2.50%H 2.53%H
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.43%B 1.77%B 1.74%B 2.34%B 1.93% 2.49%A 2.47% 2.49% 2.50% 2.53%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) .02% .05% .26% .25% (.02)% (.26)%A .22% 1.58% 1.15% .98%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 157% 142% 164% 265% 101% 81%A 112% 98% 158% 95%
AVERAGE COMMISSION RATEJ $ .0325 $ .0261
</TABLE>
A ANNUALIZED
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E FOR THE YEAR ENDED FEBRUARY 29
F TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H 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.
I NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
J 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993B 1992C 1991C 1990C 1989C
NET ASSET VALUE, BEGINNING OF
PERIOD $ 47.83 $ 46.17 $ 40.71 $ 45.30 $ 35.77 $ 31.65 $ 26.32 $ 24.90 $ 28.51 $ 22.38
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.25) (.06)L (.21) (.21) (.29) (.11) (.08) .08 .26G .12
NET REALIZED AND UNREALIZED GAIN
(LOSS) 21.10 4.47 10.97 (.48) 12.98 4.21 5.40 1.55 (1.81) 6.41
TOTAL FROM INVESTMENT
OPERATIONS 20.85 4.41 10.76 (.69) 12.69 4.10 5.32 1.63 (1.55) 6.53
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- -- -- -- (.23) (.07) --
FROM NET REALIZED
GAIN (6.46) (2.83) (5.32) (3.93) (3.26) -- -- -- (2.03) (.40)
TOTAL DISTRIBUTIONS (6.46) (2.83) (5.32) (3.93) (3.26) -- -- (.23) (2.10) (.40)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .08 .08 .02 .03 .10 .02 .01 .02 .04 --
NET ASSET VALUE, END OF
PERIOD $ 62.30 $ 47.83 $ 46.17 $ 40.71 $ 45.30 $ 35.77 $ 31.65 $ 26.32 $ 24.90 $ 28.51
TOTAL RETURNE,F 47.29% 10.14% 27.61% (1.07)% 37.14% 13.02% 20.25% 6.78% (6.33)% 29.65%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 257,199 $ 98,133 $ 85,013 $ 69,569 $ 105,833 $ 44,824 $ 40,051 $ 40,727 $ 49,609 $ 91,367
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.44% 1.56% 1.64% 1.64% 1.55% 1.90%A 2.21% 2.27% 1.96% 1.73%
RATIO OF EXPENSES TO AVERAGE
NET 1.39%D 1.54%D 1.63%D 1.62%D 1.53%D 1.90%A 2.21% 2.27% 1.96% 1.73%
ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.46)% (.12)% (.46)% (.52)% (.69)% (.39)%A (.28)% .34% .86% .50%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 209% 127% 141% 103% 170% 109%A 45% 75% 124% 249%
AVERAGE COMMISSION
RATEK $ .0396 $ .0370
</TABLE>
MEDICAL DELIVERY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996H 1995 1994 1993B 1992C 1991C 1990C 1989C
NET ASSET VALUE, BEGINNING OF
PERIOD $ 28.29 $ 29.00 $ 23.18 $ 20.28 $ 14.46 $ 19.64 $ 18.75 $ 11.17 $ 9.85 $ 7.42
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)J (.24) (.23) (.03) .06 (.10) (.13) (.15) (.01) .16 .05
NET REALIZED AND UNREALIZED GAIN
(LOSS) 5.45 2.92 7.72 3.74 5.84 (3.56) 2.16 7.76 1.43 2.38
TOTAL FROM INVESTMENT
OPERATIONS 5.21 2.69 7.69 3.80 5.74 (3.69) 2.01 7.75 1.59 2.43
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- (.06) -- -- -- -- (.05) --
FROM NET REALIZED
GAIN (5.23) (3.45) (1.91) (.89) -- (1.55) (1.24) (.39) (.26) --
TOTAL
DISTRIBUTIONS (5.23) (3.45) (1.91) (.95) -- (1.55) (1.24) (.39) (.31) --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .05 .05 .04 .05 .08 .06 .12 .22 .04 --
NET ASSET VALUE, END OF
PERIOD $ 28.32 $ 28.29 $ 29.00 $ 23.18 $ 20.28 $ 14.46 $ 19.64 $ 18.75 $ 11.17 $ 9.85
TOTAL
RETURNE,F 21.97% 10.50% 34.15% 19.63% 40.25% (19.63)% 11.71% 72.85% 16.35% 32.75%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 155,542 $ 192,385 $ 295,489 $ 299,570 $ 188,553 $ 71,809 $ 129,361 $ 131,622 $ 23,559 $ 20,077
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.57% 1.57% 1.65% 1.48% 1.82% 1.77%A 1.69% 1.94% 2.16% 2.48%I
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.53%D 1.53%D 1.62%D 1.45%D 1.79%D 1.77%A 1.69% 1.94% 2.16% 2.48%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.88)% (.84)% (.13)% .29% (.57)% (.89)%A (.71)% (.07)% 1.43% .59%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 109% 78% 132% 123% 164% 155%A 181% 165% 253% 92%
AVERAGE COMMISSION
RATEK $ .0422 $ .0434
</TABLE>
A ANNUALIZED
B FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
C FOR THE YEARS ENDED APRIL 30
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
E TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
G INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.16 PER SHARE.
H FOR THE YEARS ENDED FEBRUARY 29
I 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.
J NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
K 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.
L INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.23 PER SHARE.
MULTIMEDIA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996J 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 24.91 $ 27.18 $ 22.35 $ 23.87 $ 18.26 $ 15.93 $ 12.96 $ 11.65 $ 16.20 $ 12.45
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)K (.17) .35L .02 (.01) (.10) (.07) (.17) (.05) (.02)H (.14)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 10.30 (1.58) 7.00 1.67 6.28 2.61 3.08 1.29 (1.96) 4.64
TOTAL FROM INVESTMENT
OPERATIONS 10.13 (1.23) 7.02 1.66 6.18 2.54 2.91 1.24 (1.98) 4.50
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- (.02) -- -- -- -- -- -- --
FROM NET REALIZED
GAIN (1.52) (1.07) (2.19) (3.21) (.65) (.23) -- -- (2.57) (.75)
TOTAL DISTRIBUTIONS (1.52) (1.07) (2.21) (3.21) (.65) (.23) -- -- (2.57) (.75)
REDEMPTION FEES ADDED
TO PAID IN CAPITAL .06 .03 .02 .03 .08 .02 .06 .07 -- --
NET ASSET VALUE, END
OF PERIOD $ 33.58 $ 24.91 $ 27.18 $ 22.35 $ 23.87 $ 18.26 $ 15.93 $ 12.96 $ 11.65 $ 16.20
TOTAL RETURNF, G 42.42% (4.52)% 31.98% 9.35% 34.86% 16.14% 22.92% 11.24% (15.32)% 38.22%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 115,485 $ 54,171 $ 94,970 $ 38,157 $ 49,177 $ 16,647 $ 8,393 $ 5,177 $ 7,400 $ 45,670
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.75% 1.60% 1.56% 2.05% 1.66% 2.49%A,I 2.49%I 2.53%I 2.51%I 2.66%I
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.71%E 1.56%E 1.54%E 2.03%E 1.63%E 2.49%A 2.49% 2.53% 2.51% 2.66%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.59)% 1.33% .08% (.07)% (.42)% (.52)%A (1.22)% (.43)% (.14)% (1.01)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 219% 99% 223% 107% 340% 70%A 111% 150% 75% 437%
AVERAGE COMMISSION
RATEM $ .0363 $ .0400
</TABLE>
NATURAL GAS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY 28 1998 1997 1996J 1995 1994B
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 11.36 $ 8.98 $ 9.48 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)K (.05) (.06) .05 .03 .02
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.06 1.30N 2.36 (.53) (.46)
TOTAL FROM INVESTMENT OPERATIONS 1.01 1.24 2.41 (.50) (.44)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.01) (.05) (.02) --
FROM NET REALIZED GAIN (.30) (.29) -- -- (.07)
IN EXCESS OF NET REALIZED GAIN (.03) -- -- -- (.06)
TOTAL DISTRIBUTIONS (.33) (.30) (.05) (.02) (.13)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .04 .20 .02 .02 .05
NET ASSET VALUE, END OF PERIOD $ 13.22 $ 12.50 $ 11.36 $ 8.98 $ 9.48
TOTAL RETURNF,G 8.74% 12.45% 27.10% (5.06)% (3.84)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 59,866 $ 81,566 $ 60,228 $ 79,894 $ 63,073
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.82% 1.70% 1.68% 1.70% 1.94%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.78%E 1.66%E 1.67%E 1.66%E 1.93%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.37)% (.46)% .46% .30% .17%A
PORTFOLIO TURNOVER RATE 118% 283% 79% 177% 44%A
AVERAGE COMMISSION RATEM $ .0285 $ .0361
</TABLE>
A ANNUALIZED
B FROM APRIL 21, 1993 (COMMENCEMENT OF OPERATIONS) TO FEBRUARY 28,
1994
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
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.
F TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.05 PER SHARE.
I 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.
J FOR THE YEAR ENDED FEBRUARY 29
K NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
L INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.49 PER SHARE.
M 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.
N 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.
NATURAL RESOURCES
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEAR ENDED FEBRUARY 28 1998E
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)D (.09)
NET REALIZED AND UNREALIZED GAIN .76
TOTAL FROM INVESTMENT OPERATIONS .67
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.26)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .05
NET ASSET VALUE, END OF PERIOD $ 10.46
TOTAL RETURNB,C 7.30%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 7,520
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,I
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.48%A,J
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.86)%A
PORTFOLIO TURNOVER RATE 165%A
AVERAGE COMMISSION RATEK $ .0111
</TABLE>
PAPER AND FOREST PRODUCTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996G 1995 1994 1993H 1992F 1991F 1990F 1989F
NET ASSET VALUE,
BEGINNING OF PERIOD $ 21.63 $ 20.78 $ 21.14 $ 19.61 $ 16.08 $ 15.37 $ 12.64 $ 11.00 $ 12.33 $ 11.71
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOME (LOSS)D (.12) .01 .08 .01 (.01) .06 .13 .19 .11 .01
NET REALIZED AND
UNREALIZED GAIN (LOSS) 3.13 2.08 1.83 2.53 3.38 .65 2.64 1.56 (1.31) .64
TOTAL FROM INVESTMENT
OPERATIONS 3.01 2.09 1.91 2.54 3.37 .71 2.77 1.75 (1.20) .65
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- (.03) (.08) -- (.01) (.09) (.30) (.17) (.15) (.03)
IN EXCESS OF NET
INVESTMENT INCOME (.04) (.07) -- -- -- -- -- -- -- --
FROM NET REALIZED GAIN (2.07) (1.25) (2.27) (1.17) -- -- -- -- -- --
TOTAL DISTRIBUTIONS (2.11) (1.35) (2.35) (1.17) (.01) (.09) (.30) (.17) (.15) (.03)
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .13 .11 .08 .16 .17 .09 .26 .06 .02 --
NET ASSET VALUE, END
OF PERIOD $ 22.66 $ 21.63 $ 20.78 $ 21.14 $ 19.61 $ 16.08 $ 15.37 $ 12.64 $ 11.00 $ 12.33
TOTAL RETURNB,C 15.53% 10.87% 9.18% 14.91% 22.03% 5.25% 24.52% 16.85% (9.68)% 5.57%
NET ASSETS, END OF
PERIOD (000 OMITTED) $ 31,384 $ 19,484 $ 27,270 $ 94,219 $ 66,908 $ 25,098 $ 28,957 $ 12,579 $ 5,289 $ 9,479
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 2.18% 2.19% 1.91% 1.88% 2.08% 2.21%A 2.05% 2.49%I 2.57%I 2.54%I
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 2.15%J 2.16%J 1.90%J 1.87%J 2.07%J 2.21%A 2.05% 2.49% 2.57% 2.54%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.50)% .04% .34% .05% (.08)% .49%A .92% 1.73% .92% .07%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 235% 180% 78% 209% 176% 222%A 421% 171% 221% 154%
AVERAGE COMMISSION RATEK $ .0320 $ .0306
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF OPERATIONS) TO
FEBRUARY 28, 1998
F FOR THE YEARS ENDED APRIL 30
G FOR THE YEAR ENDED FEBRUARY 29
H FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
I 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.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
K 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.
PRECIOUS METALS AND MINERALS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996I 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 19.60 $ 20.96 $ 15.27 $ 16.62 $ 9.86 $ 9.90 $ 10.68 $ 12.23 $ 11.35 $ 13.09
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)F (.04) (.01) .07 .17 .21 .09 .10 .18 .13 .26
NET REALIZED AND UNREALIZED
GAIN (LOSS) (9.42) (1.42) 5.54 (1.42) 6.48 (.05) (.91) (1.71) .84 (1.54)
TOTAL FROM INVESTMENT
OPERATIONS (9.46) (1.43) 5.61 (1.25) 6.69 .04 (.81) (1.53) .97 (1.28)
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- (.04) (.06) (.18) (.19) (.17) (.10) (.15) (.18) (.46)
IN EXCESS OF NET INVESTMENT
INCOME -- (.01) -- (.05) (.02) -- -- -- -- --
TOTAL
DISTRIBUTIONS -- (.05) (.06) (.23) (.21) (.17) (.10) (.15) (.18) (.46)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .14 .12 .14 .13 .28 .09 .13 .13 .09 --
NET ASSET VALUE, END OF
PERIOD $ 10.28 $ 19.60 $ 20.96 $ 15.27 $ 16.62 $ 9.86 $ 9.90 $ 10.68 $ 12.23 $ 11.35
TOTAL
RETURNA,B (47.55)% (6.26)% 37.74% (6.86)% 70.58% 1.51% (6.46)% (11.45)% 9.08% (9.63)%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 165,960 $ 325,586 $ 467,196 $ 364,204 $ 409,212 $ 137,922 $ 130,002 $ 155,367 $ 192,551 $ 180,837
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.82% 1.62% 1.52% 1.46% 1.55% 1.73%J 1.81% 1.79% 1.93% 1.88%
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.76%G 1.61%G 1.52% 1.46% 1.55% 1.73%J 1.81% 1.79% 1.93% 1.88%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.26)% (.05)% .39% .99% 1.38% 1.12%J .92% 1.52% 1.01% 2.18%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 84% 54% 53% 43% 73% 36%J 44% 41% 98% 72%
AVERAGE COMMISSION
RATEH $ .0096 $ .0141
</TABLE>
REGIONAL BANKS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996I 1995 1994 1993C 1992E 1991E 1990E 1989E
NET ASSET VALUE, BEGINNING OF
PERIOD $ 32.82 $ 24.37 $ 18.01 $ 17.99 $ 20.88 $ 16.48 $ 11.40 $ 9.77 $ 11.33 $ 8.94
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOMEF .40 .37 .52 .37 .19 .16 .25 .22 .21 .22
NET REALIZED AND UNREALIZED GAIN
(LOSS) 11.41 9.70 6.78 .87 .93 5.09 5.37 1.41 (1.03) 2.84
TOTAL FROM INVESTMENT
OPERATIONS 11.81 10.07 7.30 1.24 1.12 5.25 5.62 1.63 (.82) 3.06
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.28) (.27) (.25) (.29) (.15) (.11) (.15) (.15) (.11) (.20)
FROM NET REALIZED
GAIN (1.23) (1.40) (.72) (.98) (3.92) (.81) (.53) - (.65) (.47)
TOTAL
DISTRIBUTIONS (1.51) (1.67) (.97) (1.27) (4.07) (.92) (.68) (.15) (.76) (.67)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .06 .05 .03 .05 .06 .07 .14 .15 .02 --
NET ASSET VALUE, END OF
PERIOD $ 43.18 $ 32.82 $ 24.37 $ 18.01 $ 17.99 $ 20.88 $ 16.48 $ 11.40 $ 9.77 $ 11.33
TOTAL RETURNA,B 36.64% 43.33% 40.94% 7.79% 6.46% 33.10% 52.34% 18.73% (7.94)% 35.71%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 1,338,896 $ 837,952 $ 315,178 $ 164,603 $ 97,429 $ 315,520 $ 156,570 $ 24,212 $ 5,410 $ 17,961
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.25% 1.46% 1.41% 1.58% 1.62% 1.49%J 1.77% 2.51%D 2.55%D 2.53%D
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.24%G 1.45%G 1.40%G 1.56%G 1.60%G 1.49%J 1.77% 2.51% 2.55% 2.53%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME 1.07% 1.36% 2.42% 1.99% .88% 1.06%J 1.80% 2.34% 1.74% 2.24%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 25% 43% 103% 106% 74% 63%J 89% 110% 411% 352%
AVERAGE COMMISSION
RATEH $ .0400 $ .0384
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D 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.
E FOR THE YEARS ENDED APRIL 30
F NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
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.
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.
I FOR THE YEAR ENDED FEBRUARY 29
J ANNUALIZED
RETAILING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996B 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 33.25 $ 27.87 $ 23.91 $ 24.91 $ 23.87 $ 22.13 $ 17.42 $ 13.94 $ 14.60 $ 11.57
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)H (.27) (.13) (.14) (.18) (.22) (.08) (.03) (.05) .32I .06
NET REALIZED AND UNREALIZED GAIN
(LOSS) 17.14 5.49 4.07 (.96) 3.85 2.93 5.09 3.43 1.72 3.18
TOTAL FROM INVESTMENT
OPERATIONS 16.87 5.36 3.93 (1.14) 3.63 2.85 5.06 3.38 2.04 3.24
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- -- -- -- -- (.16) (.03)
FROM NET REALIZED GAIN (.51) (.08) -- -- (2.63) (1.17) (.50) (.03) (2.57) (.18)
TOTAL DISTRIBUTIONS (.51) (.08) -- -- (2.63) (1.17) (.50) (.03) (2.73) (.21)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .43 .10 .03 .14 .04 .06 .15 .13 .03 --
NET ASSET VALUE, END OF
PERIOD $ 50.04 $ 33.25 $ 27.87 $ 23.91 $ 24.91 $ 23.87 $ 22.13 $ 17.42 $ 13.94 $ 14.60
TOTAL RETURNF, G 52.61% 19.59% 16.56% (4.01)% 15.61% 13.72% 30.28% 25.26% 15.01% 28.32%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 192,861 $ 59,348 $ 44,051 $ 31,090 $ 52,790 $ 74,878 $ 48,441 $ 18,069 $ 8,451 $ 9,149
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.63% 1.45% 1.94% 2.07% 1.86% 1.77%A 1.87% 2.54%J 2.50%J 2.51%J
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.55%E 1.39%E 1.92%E 1.96%E 1.83%E 1.77%A 1.87% 2.54% 2.50% 2.51%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.67)% (.39)% (.53)% (.74)% (.87)% (.44)%A (.13)% (.34)% 2.13% .48%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 308% 278% 235% 481% 154% 171%A 205% 115% 212% 290%
AVERAGE COMMISSION RATEK $ .0405 $ .0403
</TABLE>
SOFTWARE AND COMPUTER SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996B 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 38.58 $ 36.20 $ 29.07 $ 28.89 $ 27.62 $ 21.63 $ 19.77 $ 15.58 $ 15.75 $ 14.36
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)H (.33) (.25) (.19) (.26) (.34) (.07)L (.28) (.14)M (.20) (.22)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 12.57 5.87 11.85 .67 7.92 5.88 4.37 4.06 .82 1.61
TOTAL FROM INVESTMENT
OPERATIONS 12.24 5.62 11.66 .41 7.58 5.81 4.09 3.92 .62 1.39
LESS DISTRIBUTIONS
FROM NET REALIZED
GAIN (6.61) (3.31) (4.60) (.33) (6.48) -- (2.50) -- (.86) --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .05 .07 .07 .10 .17 .18 .27 .27 .07 --
NET ASSET VALUE, END OF
PERIOD $ 44.26 $ 38.58 $ 36.20 $ 29.07 $ 28.89 $ 27.62 $ 21.63 $ 19.77 $ 15.58 $ 15.75
TOTAL RETURNF,G 35.50% 16.14% 40.17% 1.97% 33.19% 27.69% 25.36% 26.89% 4.64% 9.68%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 503,367 $ 389,699 $ 337,633 $ 236,445 $ 178,034 $ 151,212 $ 89,571 $ 17,290 $ 10,539 $ 14,046
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.44% 1.54% 1.48% 1.52% 1.57% 1.64%A 1.98% 2.50%J 2.56%J 2.63%J
RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.42%E 1.51%E 1.47%E 1.50%E 1.57% 1.64%A 1.98% 2.50% 2.56% 2.63%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME
(LOSS) (.81)% (.66)% (.54)% (1.01)% (1.19)% (.37)%A (1.30)% (.84)% (1.30)% (1.51)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 145% 279% 183% 164% 376% 402%A 348% 326% 284% 434%
AVERAGE COMMISSION
RATEK $ .0366 $ .0427
</TABLE>
A ANNUALIZED
B FOR THE YEAR ENDED FEBRUARY 29
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
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.
F TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.29 PER SHARE.
J 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.
K 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.
L INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A DIVIDEND RECEIVED IN
ARREARS WHICH AMOUNTED TO $.03 PER SHARE.
M INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.02 PER SHARE.
TECHNOLOGY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996I 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 57.70 $ 54.67 $ 42.05 $ 41.83 $ 34.62 $ 32.44 $ 27.06 $ 20.08 $ 18.37 $ 18.22
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)H (.25) (.39) (.28) (.39) (.24)K .13L (.26) .14J (.15) (.12)
NET REALIZED AND UNREALIZED GAIN
(LOSS) 11.29 6.95 20.83 1.95 11.04 4.68 5.56 6.46 1.75 .27
TOTAL FROM INVESTMENT
OPERATIONS 11.04 6.56 20.55 1.56 10.80 4.81 5.30 6.60 1.60 .15
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- (.13) -- -- -- -- --
IN EXCESS OF NET INVESTMENT
INCOME -- -- -- -- -- -- (.16) -- -- --
FROM NET REALIZED
GAIN (12.39) (3.68) (8.05) (1.50) (3.70) (2.75) -- -- -- --
IN EXCESS OF NET REALIZED
GAIN (3.30) -- -- -- -- -- -- -- -- --
TOTAL
DISTRIBUTIONS (15.69) (3.68) (8.05) (1.50) (3.83) (2.75) (.16) -- -- --
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .08 .15 .12 .16 .24 .12 .24 .38 .11 --
NET ASSET VALUE, END OF
PERIOD $ 53.13 $ 57.70 $ 54.67 $ 42.05 $ 41.83 $ 34.62 $ 32.44 $ 27.06 $ 20.08 $ 18.37
TOTAL
RETURNF, G 24.92% 12.64% 50.71% 4.61% 35.62% 16.48% 20.57% 34.76% 9.31% .82%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 691,924 $ 478,444 $ 483,026 $ 229,761 $ 202,475 $ 132,689 $ 105,954 $ 117,055 $ 78,535 $ 105,604
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.38% 1.49% 1.40% 1.57% 1.55% 1.64%A 1.72% 1.83% 2.09% 1.86%
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.30%E 1.44%E 1.39%E 1.56%E 1.54%E 1.64%A 1.72% 1.83% 2.09% 1.86%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.45)% (.72)% (.52)% (.98)% (.65)% .52%A (.84)% .61% (.76)% (.67)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 556% 549% 112% 102% 213% 259%A 353% 442% 327% 397%
AVERAGE COMMISSION
RATEM $ .0436 $ .0191
</TABLE>
TELECOMMUNICATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996I 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING
OF PERIOD $ 41.80 $ 44.87 $ 38.34 $ 37.10 $ 34.19 $ 29.22 $ 24.98 $ 23.19 $ 22.76 $ 16.52
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)H (.25) .12B .51 .29 .25 .29 .36 .31 .46 .30
NET REALIZED AND UNREALIZED
GAIN (LOSS) 18.20 2.92 9.15 2.54 7.00 5.29 4.13 1.86 1.02 6.09
TOTAL FROM INVESTMENT
OPERATIONS 17.95 3.04 9.66 2.83 7.25 5.58 4.49 2.17 1.48 6.39
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- (.16)N (.39) (.33) (.20) (.18) (.28) (.43) (.12) (.12)
FROM NET REALIZED
GAIN (6.44) (5.98)N (2.75) (1.27) (4.18) (.48) -- -- (.98) (.03)
TOTAL
DISTRIBUTIONS (6.44) (6.14) (3.14) (1.60) (4.38) (.66) (.28) (.43) (1.10) (.15)
REDEMPTION FEES ADDED TO PAID IN
CAPITAL .06 .03 .01 .01 .04 .05 .03 .05 .05 --
NET ASSET VALUE, END OF
PERIOD $ 53.37 $ 41.80 $ 44.87 $ 38.34 $ 37.10 $ 34.19 $ 29.22 $ 24.98 $ 23.19 $ 22.76
TOTAL RETURNF,G 46.52% 7.85% 25.79% 7.98% 21.90% 19.49% 18.19% 9.83% 6.21% 38.90%
NET ASSETS, END OF PERIOD (000
OMITTED) $ 643,449 $ 388,535 $ 468,300 $ 369,476 $ 371,025 $ 134,338 $ 78,533 $ 55,162 $ 77,019 $ 116,016
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.51% 1.51% 1.52% 1.56% 1.54% 1.74%A 1.90% 1.97% 1.85% 2.12%
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.48%E 1.47%E 1.52% 1.55%E 1.53%E 1.74%A 1.90% 1.97% 1.85% 2.12%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.53)% .27% 1.17% .77% .64% 1.16%A 1.32% 1.35% 1.83% 1.63%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 157% 175% 89% 107% 241% 115%A 20% 262% 341% 224%
AVERAGE COMMISSION
RATEM $ .0065 $ .0321
</TABLE>
A ANNUALIZED
B INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM ADVO,
INC. WHICH AMOUNTED TO $.07 PER SHARE.
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
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.
F TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
G THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
H NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
I FOR THE YEAR ENDED FEBRUARY 29
J INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.06 PER SHARE AND $.20 PER SHARE RELATING TO A
NONRECURRING INITIATIVE TO INVEST IN DIVIDEND INCOME PRODUCING
SECURITIES WHICH WAS IN EFFECT FOR A PORTION OF 1991.
K INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A DIVIDEND RECEIVED IN
AREAS WHICH AMOUNTED TO $.03 PER SHARE.
L INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A DIVIDEND RECEIVED IN
AREAS WHICH AMOUNTED TO $.10 PER SHARE.
M 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.
N THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
TRANSPORTATION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996G 1995 1994 1993H 1992F 1991F 1990F 1989F
NET ASSET VALUE, BEGINNING
OF PERIOD $ 22.23 $ 21.92 $ 20.53 $ 21.67 $ 18.68 $ 15.49 $ 11.26 $ 12.23 $ 13.59 $ 9.87
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
(LOSS)D (.02) (.13) (.09)E (.17) (.20) (.07) (.05) .06 (.03) (.04)
NET REALIZED AND UNREALIZED
GAIN (LOSS) 8.85 1.06 2.60 1.17 5.07 3.55 4.18 (.57) .96 3.76
TOTAL FROM INVESTMENT
OPERATIONS 8.83 .93 2.51 1.00 4.87 3.48 4.13 (.51) .93 3.72
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME -- -- -- -- -- -- (.04) -- -- --
FROM NET REALIZED GAIN (2.80) (.71) (1.22) (2.19) (1.96) (.36) -- (.50) (2.32) --
TOTAL DISTRIBUTIONS (2.80) (.71) (1.22) (2.19) (1.96) (.36) (.04) (.50) (2.32) --
REDEMPTION FEES ADDED TO
PAID IN CAPITAL .08 .09 .10 .05 .08 .07 .14 .04 .03 --
NET ASSET VALUE, END
OF PERIOD $ 28.34 $ 22.23 $ 21.92 $ 20.53 $ 21.67 $ 18.68 $ 15.49 $ 11.26 $ 12.23 $ 13.59
TOTAL RETURNB,C 41.15% 4.67% 12.95% 5.90% 27.47% 23.14% 38.01% (4.10)% 6.90% 37.69%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 64,282 $ 8,890 $ 11,445 $ 12,704 $ 13,077 $ 10,780 $ 2,998 $ 770 $ 1,630 $ 3,998
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.58% 2.50%I 2.47%I 2.37% 2.40% 2.48%A,I 2.43%I 2.39%I 2.50%I 2.50%I
RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.54%J 2.48%J 2.44%J 2.36%J 2.39%J 2.48%A 2.43% 2.39% 2.50% 2.50%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME (LOSS) (.06)% (.58)% (.43)% (.83)% (.96)% (.53)%A (.34)% .52% (.20)% (.33)%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 210% 148% 175% 178% 115% 116%A 423% 187% 156% 172%
AVERAGE COMMISSION RATEK $ .0337 $ .0313
</TABLE>
UTILITIES GROWTH
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996G 1995 1994 1993H 1992F 1991F 1990F 1989F
NET ASSET VALUE, BEGINNING
OF PERIOD $ 45.97 $ 43.03 $ 34.88 $ 36.61 $ 41.49 $ 37.18 $ 35.57 $ 31.70 $ 28.82 $ 24.67
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT
INCOMED .54 .73 1.10 1.13 1.33 1.19 1.66 1.59 1.27 1.39
NET REALIZED AND UNREALIZED
GAIN (LOSS) 14.83 6.41 7.86 (1.17) (.16) 6.14 2.82 3.41 2.40 4.18
TOTAL FROM INVESTMENT
OPERATIONS 15.37 7.14 8.96 (.04) 1.17 7.33 4.48 5.00 3.67 5.57
LESS DISTRIBUTIONS
FROM NET INVESTMENT
INCOME (.58) (.70) (.84) (1.05) (1.13) (1.33) (1.69) (.60) (.81) (1.42)
FROM NET REALIZED
GAIN (7.30) (3.54) -- (.67) (4.94) (1.70) (1.19) (.58) -- --
TOTAL
DISTRIBUTIONS (7.88) (4.24) (.84) (1.72) (6.07) (3.03) (2.88) (1.18) (.81) (1.42)
REDEMPTION FEES ADDED TO PAID
IN CAPITAL .04 .04 .03 .03 .02 .01 .01 .05 .02 --
NET ASSET VALUE, END
OF PERIOD $ 53.50 $ 45.97 $ 43.03 $ 34.88 $ 36.61 $ 41.49 $ 37.18 $ 35.57 $ 31.70 $ 28.82
TOTAL
RETURNB,C 36.20% 18.13% 25.82% .21% 2.53% 20.90% 13.23% 16.25% 13.00% 23.39%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 401,927 $ 256,844 $ 266,768 $ 237,635 $ 250,522 $ 290,718 $ 206,872 $ 197,409 $ 124,931 $ 84,968
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.33% 1.47% 1.39% 1.43% 1.36% 1.42%A 1.51% 1.65% 1.67% 1.21%
RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.30%J 1.46%J 1.38%J 1.42%J 1.35%J 1.42%A 1.51% 1.65% 1.67% 1.21%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
INCOME 1.11% 1.73% 2.76% 3.24% 3.11% 3.71%A 4.58% 4.75% 3.93% 5.33%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER
RATE 78% 31% 65% 24% 61% 34%A 45% 45% 75% 75%
AVERAGE COMMISSION
RATEK $ .0106 $ .0287
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.05 PER SHARE.
F FOR THE YEARS ENDED APRIL 30
G FOR THE YEARS ENDED FEBRUARY 29
H FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
I 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.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
K 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED FEBRUARY
28 1998 1997 1996B 1995 1994 1993C 1992D 1991D 1990D 1989D
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT
OPERATIONS .051 .049 .054 .042 .026 .026 .048 .073 .081 .078
NET INTEREST INCOME
LESS
DISTRIBUTIONS (.051) (.049) (.054) (.042) (.026) (.026) (.048) (.073) (.081) (.078)
FROM NET INTEREST INCOME
NET ASSET VALUE, END OF
PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURNE 5.26% 5.02% 5.56% 4.28% 2.62% 2.63% 4.93% 7.50% 8.45% 8.07%
NET ASSETS, END OF PERIOD
(000 OMITTED) $ 584,919 $ 848,168 $ 610,821 $ 573,144 $ 518,657 $ 431,133 $ 542,620 $ 608,394 $ 643,272 $ 724,452
RATIO OF EXPENSES TO AVERAGE
NET ASSETS .56% .56% .59% .65% .72% .56%A .64% .73% .83% .76%
RATIO OF NET INTEREST INCOME TO AVERAGE
NET ASSETS 5.13% 4.92% 5.39% 4.19% 2.59% 3.09%A 4.84% 7.20% 8.13% 7.74%
</TABLE>
A ANNUALIZED
B FOR THE YEAR ENDED FEBRUARY 29
C FOR THE TEN MONTHS ENDED FEBRUARY 28, 1993
D FOR THE YEARS ENDED APRIL 30
E TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
PERFORMANCE
Stock fund performance is commonly measured as TOTAL RETURN. Money
market fund performance can be measured as TOTAL RETURN or YIELD. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
Each fund's fiscal year runs from March 1 through February 28. The
tables below show each fund's performance over past fiscal years
compared to different measures, including a comparative index for the
stock funds and a measure of inflation for the money market fund. The
charts in Appendix A, beginning on page , present calendar year
performance for the stock funds.
Performance history will be available for Business Services and
Outsourcing and Medical Equipment and Systems after each fund has been
in operation for six months.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
FISCAL PERIODS
ENDED FEBRUARY 28, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS/
YEARS/LIFE OF LIFE OF FUND
FUND
AIR TRANSPORTATION 61.10% 18.88% 15.59% 61.10% 137.43% 325.88%
AIR TRANSPORTATION (LOAD ADJ.A) 56.20% 18.15% 15.24% 56.20% 130.23% 313.03%
AMERICAN GOLD -43.15% 2.94% 1.36% -43.15% 15.56% 14.43%
AMERICAN GOLD (LOAD ADJ.A) -44.93% 2.30% 1.04% -44.93% 12.03% 10.93%
AUTOMOTIVE 22.78% 13.21% 14.94% 22.78% 85.95% 302.42%
AUTOMOTIVE (LOAD ADJ.A) 19.02% 12.51% 14.59% 19.02% 80.30% 290.28%
BIOTECHNOLOGY 16.11% 14.81% 18.85% 16.11% 99.46% 462.13%
BIOTECHNOLOGY (LOAD ADJ.A) 12.56% 14.10% 18.48% 12.56% 93.40% 445.20%
BROKERAGE AND INVESTMENT MANAGEMENT 57.56% 28.50% 21.86% 57.56% 250.42% 622.27%
BROKERAGE AND INVESTMENT MANAGEMENT
(LOAD ADJ.A) 52.76% 27.72% 21.49% 52.76% 239.84% 600.53%
CHEMICALS 19.47% 18.94% 16.05% 19.47% 138.08% 342.98%
CHEMICALS (LOAD ADJ.A) 15.81% 18.21% 15.69% 15.81% 130.87% 329.62%
COMPUTERS 20.33% 30.28% 21.23% 20.33% 275.27% 585.68%
COMPUTERS (LOAD ADJ.A) 16.64% 29.48% 20.86% 16.64% 263.94% 565.04%
CONSTRUCTION AND HOUSING 40.04% 17.66% 17.04% 40.04% 125.50% 382.21%
CONSTRUCTION AND HOUSING (LOAD ADJ.A) 35.76% 16.94% 16.68% 35.76% 118.66% 367.67%
CONSUMER INDUSTRIES 40.36% 20.96% 18.60%B 40.36% 158.94% 269.75%B
CONSUMER INDUSTRIES (LOAD ADJ.A) 36.07% 20.22% 18.11%B 36.07% 151.10% 258.58%B
CYCLICAL INDUSTRIES N/A N/A N/A N/A N/A 25.77%B
CYCLICAL INDUSTRIES (LOAD ADJ.A) N/A N/A N/A N/A N/A 21.93%B
DEFENSE AND AEROSPACE 42.68% 27.36% 15.36% 42.68% 235.06% 317.57%
DEFENSE AND AEROSPACE (LOAD ADJ.A) 38.33% 26.58% 15.01% 38.33% 224.94% 304.97%
S&P 500 35.01% 21.69% 17.98% 35.01% 166.84% 422.55%
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF EACH FUND'S 3.00% SALES
CHARGE AND EACH STOCK FUND'S $7.50 TRADING FEE.
B LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (JUNE 29,
1990 FOR CONSUMER INDUSTRIES AND DEVELOPING COMMUNICATIONS; JUNE 29,
1989 FOR ENVIRONMENTAL SERVICES; APRIL 21, 1993 FOR NATURAL GAS; AND
MARCH 3, 1997 FOR CYCLICAL INDUSTRIES AND NATURAL RESOURCES) THROUGH
THE FISCAL PERIODS ENDED FEBRUARY 28, 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
FISCAL PERIODS ENDED
FEBRUARY 28, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 PAST 1 YEAR PAST 5 YEARS PAST 10
YEARS/LIFE OF YEARS/LIFE OF
FUND FUND
DEVELOPING COMMUNICATIONS 28.17% 18.55% 20.34%B 28.17% 134.20% 313.39%B
DEVELOPING COMMUNICATIONS
(LOAD ADJ.A) 24.25% 17.83% 19.83%B 24.25% 127.10% 300.91%B
ELECTRONICS 24.15% 36.47% 24.39% 24.15% 373.28% 786.86%
ELECTRONICS (LOAD ADJ.A) 20.35% 35.63% 24.01% 20.35% 359.00% 760.18%
ENERGY 20.40% 13.97% 11.82% 20.40% 92.27% 205.67%
ENERGY (LOAD ADJ.A) 16.71% 13.27% 11.48% 16.71% 86.42% 196.43%
ENERGY SERVICE 48.43% 25.60% 14.98% 48.43% 212.61% 303.70%
ENERGY SERVICE (LOAD ADJ.A) 43.90% 24.83% 14.62% 43.90% 203.16% 291.51%
ENVIRONMENTAL SERVICES 13.52% 8.88% 7.49%B 13.52% 52.98% 87.16%B
ENVIRONMENTAL SERVICES
(LOAD ADJ.A) 10.04% 8.20% 7.11%B 10.04% 48.32% 81.47%B
FINANCIAL SERVICES 41.08% 25.29% 21.62% 41.08% 208.67% 607.94%
FINANCIAL SERVICES
(LOAD ADJ.A) 36.78% 24.52% 21.25% 36.78% 199.34% 586.63%
FOOD AND AGRICULTURE 23.58% 18.95% 19.55% 23.58% 138.16% 496.21%
FOOD AND AGRICULTURE
(LOAD ADJ.A) 19.81% 18.22% 19.18% 19.81% 130.95% 478.25%
HEALTH CARE 36.47% 29.43% 23.29% 36.47% 263.22% 711.23%
HEALTH CARE (LOAD ADJ.A) 32.31% 28.64% 22.91% 32.31% 252.25% 686.82%
HOME FINANCE 32.39% 30.34% 26.82% 32.39% 276.17% 975.96%
HOME FINANCE (LOAD ADJ.A) 28.35% 29.54% 26.43% 28.35% 264.81% 943.60%
INDUSTRIAL EQUIPMENT 25.76% 22.83% 15.55% 25.76% 179.57% 324.46%
INDUSTRIAL EQUIPMENT
(LOAD ADJ.A) 21.91% 22.08% 15.20% 21.91% 171.11% 311.66%
INDUSTRIAL MATERIALS 6.59% 12.82% 10.03% 6.59% 82.77% 160.08%
INDUSTRIAL MATERIALS
(LOAD ADJ.A) 3.32% 12.12% 9.69% 3.32% 77.21% 152.20%
INSURANCE 42.81% 20.80% 20.02% 42.81% 157.24% 520.14%
INSURANCE (LOAD ADJ.A) 38.45% 20.06% 19.65% 38.45% 149.44% 501.46%
LEISURE 47.29% 22.94% 17.80% 47.29% 180.86% 414.78%
LEISURE (LOAD ADJ.A) 42.80% 22.19% 17.44% 42.80% 172.36% 399.26%
MEDICAL DELIVERY 21.97% 24.85% 22.36% 21.97% 203.35% 652.53%
MEDICAL DELIVERY
(LOAD ADJ.A) 18.24% 24.09% 21.99% 18.24% 194.18% 629.88%
MULTIMEDIA 42.42% 21.49% 17.91% 42.42% 164.67% 419.51%
MULTIMEDIA (LOAD ADJ.A) 38.08% 20.75% 17.55% 38.08% 156.66% 403.86%
S&P 500 35.01% 21.69% 17.98% 35.01% 166.84% 422.55%
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF EACH FUND'S 3.00% SALES
CHARGE AND EACH STOCK FUND'S $7.50 TRADING FEE.
B LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (JUNE 29,
1990 FOR CONSUMER INDUSTRIES AND DEVELOPING COMMUNICATIONS; JUNE 29,
1989 FOR ENVIRONMENTAL SERVICES; APRIL 21, 1993 FOR NATURAL GAS; AND
MARCH 3, 1997 FOR CYCLICAL INDUSTRIES AND NATURAL RESOURCES) THROUGH
THE FISCAL PERIODS ENDED FEBRUARY 28, 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
FISCAL PERIODS ENDED
FEBRUARY 28, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 PAST 1 YEAR PAST 5 YEARS PAST 10
YEARS/LIFE OF YEARS/LIFE OF
FUND FUND
NATURAL GAS 8.74% N/A 7.47%B 8.74% N/A 41.90%B
NATURAL GAS (LOAD ADJ.A) 5.40% N/A 6.78%B 5.40% N/A 37.56%B
NATURAL RESOURCES N/A N/A N/A N/A N/A 7.30%B
NATURAL RESOURCES
(LOAD ADJ.A) N/A N/A N/A N/A N/A 4.01%B
PAPER AND FOREST PRODUCTS 15.53% 14.42% 10.86% 15.53% 96.10% 180.35%
PAPER AND FOREST PRODUCTS
(LOAD ADJ.A) 11.99% 13.71% 10.52% 11.99% 90.15% 171.87%
PRECIOUS METALS AND
MINERALS -47.55% 1.48% -0.68% -47.55% 7.60% -6.61%
PRECIOUS METALS AND
MINERALS (LOAD ADJ.A) -49.20% 0.84% -0.99% -49.20% 4.30% -9.49%
REGIONAL BANKS 36.64% 25.93% 25.43% 36.64% 216.75% 863.48%
REGIONAL BANKS (LOAD ADJ.A) 32.47% 25.16% 25.04% 32.47% 207.18% 834.50%
RETAILING 52.61% 18.74% 21.04% 52.61% 136.07% 575.14%
RETAILING (LOAD ADJ.A) 47.96% 18.01% 20.67% 47.96% 128.92% 554.82%
SOFTWARE AND COMPUTER
SERVICES 35.50% 24.54% 21.92% 35.50% 199.63% 625.79%
SOFTWARE AND COMPUTER
SERVICES (LOAD ADJ.A) 31.36% 23.78% 21.55% 31.36% 190.56% 603.94%
TECHNOLOGY 24.92% 24.64% 20.48% 24.92% 200.87% 544.51%
TECHNOLOGY (LOAD ADJ.A) 21.10% 23.88% 20.11% 21.10% 191.76% 525.10%
TELECOMMUNICATIONS 46.52% 21.21% 20.03% 46.52% 161.65% 520.86%
TELECOMMUNICATIONS
(LOAD ADJ.A) 42.06% 20.47% 19.67% 42.06% 153.73% 502.17%
TRANSPORTATION 41.15% 17.64% 18.77% 41.15% 125.27% 458.46%
TRANSPORTATION (LOAD ADJ.A) 36.84% 16.91% 18.41% 36.84% 118.44% 441.64%
UTILITIES GROWTH 36.20% 15.78% 16.22% 36.20% 108.01% 349.64%
UTILITIES GROWTH
(LOAD ADJ.A) 32.04% 15.06% 15.87% 32.04% 101.70% 336.09%
S&P 500 35.01% 21.69% 17.98% 35.01% 166.84% 422.55%
MONEY MARKET 5.26% 4.54% 5.52% 5.26% 24.88% 71.10%
MONEY MARKET (LOAD ADJ.A) 2.10% 3.91% 5.20% 2.10% 21.13% 65.97%
CONSUMER PRICE INDEX 1.44% 2.50% 3.39% 1.44% 13.14% 39.57%
</TABLE>
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF EACH FUND'S 3.00% SALES
CHARGE AND EACH STOCK FUND'S $7.50 TRADING FEE.
B LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (JUNE 29,
1990 FOR CONSUMER INDUSTRIES AND DEVELOPING COMMUNICATIONS; JUNE 29,
1989 FOR ENVIRONMENTAL SERVICES; APRIL 21, 1993 FOR NATURAL GAS; AND
MARCH 3, 1997 FOR CYCLICAL INDUSTRIES AND NATURAL RESOURCES) THROUGH
THE FISCAL PERIODS ENDED FEBRUARY 28, 1998.
If FMR had not reimbursed certain fund expenses during these periods,
total returns would have been lower.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a
widely recognized, unmanaged index of common stocks.
Unlike each fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
Other illustrations of stock fund performance may show moving averages
over specified periods.
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. The money market fund,
Financial Services, Home Finance, and Regional Banks are diversified
funds, and each of the other stock funds is a non-diversified fund of
Fidelity Select Portfolios, an open-end management investment company
organized as a Massachusetts business trust on November 20, 1980.
There is a remote possibility that one fund might become liable for a
misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs and
chooses the stock funds' investments. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.), in London, England, and Fidelity Management &
Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR
with foreign investments for the stock funds (except American Gold).
FIMM, located in Merrimack, New Hampshire has primary responsibility
for providing investment management services for the money market
fund.
Tom Allen is manager of Insurance, which he has managed since February
1997. Mr. Allen joined Fidelity as an analyst in 1995, after receiving
his MBA from Harvard Business School. Previously, he worked as a
summer intern at Massachusetts Financial Services in 1994. Before
that, he was with Price Waterhouse LLP, from 1987 to 1993, finishing
as an audit manager.
Ramin Arani is manager of Retailing, which he has managed since
January 1997. Previously, he was an analyst. Mr. Arani joined Fidelity
as a research associate in 1992, after receiving a bachelor of arts
degree from Tufts University.
Audra Barranco is manager of Chemicals, which she has managed since
June 1997. Ms. Barranco joined Fidelity in 1996 as an analyst, after
receiving her MBA from Columbia Business School. Previously, she
worked as an investment commentary writer and internal wholesaler for
Pioneer Funds Distributor from 1992 to 1995.
Jean-Marc Berteaux is manager of Transportation, which he has managed
since January 1997. Mr. Berteaux joined Fidelity as an analyst in
1994, after receiving his MBA from the European Institute of Business
Administration (INSEAD) in France. Previously, he was an assistant
vice president for the Banque National de Paris in Montreal from 1992
to 1993.
Steve Buller is manager of Environmental Services, which he has
managed since December 1997. He is also an associate manager for
another Fidelity fund. Mr. Buller joined Fidelity in 1992 as an
analyst. From 1995 to 1997, he worked as a fixed-income analyst for
Fidelity International, Limited, in London.
James Catudal is manager of Industrial Materials and Energy Services,
which he has managed since August 1997 and January 1998, respectively.
Mr. Catudal joined Fidelity in 1997 as a research analyst. After
receiving his MBA from the Amos Tuck School at Dartmouth College in
1995, he joined State Street Research & Management as an equity
analyst. Previously, he worked for Textron, McCord Winn Division, from
1987 to 1993.
Douglas Chase is manager of Consumer Industries , which he has
managed since August 1997. He managed Industrial Materials from 1994
to 1997. Mr. Chase joined Fidelity as an equity analyst in 1993 after
receiving his MBA from the University of Michigan. Previously, he was
a consultant for Stanford Resources from 1988 to 1991.
George Domolky is manager of Precious Metals and Minerals and American
Gold, both of which he has managed since February 1997. Previously, he
managed Canada from 1987 to 1996 as well as another Fidelity fund. Mr.
Domolky joined Fidelity in 1981.
Jeff Dorsey is manager of Multimedia and Leisure, which he has managed
since December 1997 and January 1998, respectively. Since joining
Fidelity in 1991, Mr. Dorsey has worked as an analyst, senior analyst,
corporate strategist and manager.
Robert Ewing is manager of Financial Services, which he has managed
since January 1998. He also manages another Fidelity fund. Since
joining Fidelity in 1990, Mr. Ewing has worked as a research
associate, analyst and manager.
Peter Fruzzetti is manager of Brokerage and Investment Management,
which he has managed since February 1997. Previously, he worked as an
analyst. Mr. Fruzzetti joined Fidelity as a research associate in
1993, after receiving a bachelor of science degree in finance from
Boston College.
Albert Grosman is manager of Automotive, which he has managed since
December 1997. Mr. Grosman joined Fidelity in 1996 as an analyst
working part-time. After receiving his MBA from Columbia University in
1997, he joined Fidelity full-time. From 1993 to 1995, Mr. Grosman was
self-employed as an investment manager, managing investment portfolios
on a discretionary basis in Toronto, Canada.
Jamie Harmon is manager of Biotechnology, which he has managed since
June 1997. Since joining Fidelity in 1995, Mr. Harmon has worked as a
research associate, analyst and manager. Previously, he was a junior
analyst with Essex Investment Management Co., Inc. from 1994 to 1995.
Mr. Harmon received a bachelor of arts degree in government from
Harvard University in 1994.
Adam Hetnarski is manager of Technology, which he has managed since
March 1996. He also manages another Fidelity fund. Since joining
Fidelity in 1991, Mr. Hetnarski has worked as an analyst and manager.
And rew Kaplan is manager of Electronics and Developing
Communications , which he has managed since August 1996 and
March 1998, respectively . Mr. Kaplan joined Fidelity as an analyst
in 1995. Previously, he was an analyst with T. Rowe Price in 1994, and
an associate director of consulting for Edward S. Gordon
Company , in New York City , from 1988 through 1993.
Doug Lober is manager of Paper and Forest Products, which he has
managed since October 1997. Mr. Lober joined Fidelity in 1997 as a
senior equity analyst. Previously, he was an analyst and manager at
Fidelity from 1986 until 1989. Mr. Lober received his doctorate in
forestry and environmental studies from Yale University in 1993, and
was an assistant professor at Duke University from 1993 to 1997.
Yolanda McGettigan is manager of Construction and Housing, which she
has managed since December 1997. Ms. McGettigan joined Fidelity as an
analyst in 1997, after receiving her MBA from the Fuqua School of
Business at Duke University. Previously, she was employed as a sales
representative for Robinson-Humphrey from 1994 to 1995 and a trader
for Cantor Fitzgerald from 1992 to 1994.
Kerry Nelson is manager of Medical Equipment and Systems, which she
has managed since inception. Since joining Fidelity in 1995, Ms.
Nelson has worked as a research associate, analyst and manager.
Previously, she was an analyst with Grandview Partners, L.P., in
Boston, from 1991 to 1994.
Scott Offen is manager of Food and Agriculture, which he has managed
since November 1996. Previously, he managed other Fidelity funds.
Since joining Fidelity in 1985, Mr. Offen has worked as an analyst and
manager.
John Porter is manager of Software and Computer Services and Medical
Delivery, which he has managed since June 1997 and January
1998, respectively. Previously, he managed another Fidelity fund. Mr.
Porter joined Fidelity as an analyst in 1995, after receiving his MBA
from the University of Chicago. Before that, he was a product engineer
for Ford Motor Company from 1991 to 1993.
Lawrence Rakers is manager of Energy and Natural Resources which he
has managed since January 1997 and March 1997, respectively. He also
manages another Fidelity fund. Mr. Rakers joined Fidelity as an
analyst in 1993. Previously, he was a project engineer for Loral
Corporation from 1986 to 1993.
Albert Ruback is manager of Cyclical Industries, which he has managed
since inception. He also manages another Fidelity fund. Mr. Ruback
joined Fidelity as an analyst in 1991, after receiving his MBA from
Harvard Business School.
Bill Rubin is manager of Home Finance, which he has managed since
October 1996. Previously, he managed another Fidelity fund. Mr. Rubin
joined Fidelity as an analyst in 1994, after receiving his MBA from
Harvard Business School. He was a corporate financial analyst for VLSI
Technologies from 1990 to 1992.
Peter Saperstone is manager of Air Transportation and Defense and
Aerospace, both of which he has managed since July 1997. Mr.
Saperstone joined Fidelity as an analyst in August 1995. Previously,
he was an equity research analyst at Gabelli & Company, Inc. from 1993
to 1995, and a credit analyst at National Westminster Bank USA from
1991 to 1993.
Christine Schaulat is manager of Regional Banks, which she has managed
since January 1998. Ms. Schaulat joined Fidelity as a research analyst
after receiving her MBA from Harvard University in 1997. Previously,
she was an investment manager for Indosuez Asset Management Asia,
Limited, in Hong Kong, from 1993 to 19 95 .
Beso Sikharulidze is manager of Health Care, which he has managed
since June 1997. He also manages another Fidelity fund. Mr.
Sikharulidze joined Fidelity as an analyst in 1992, after receiving
his MBA from Harvard University.
Michael Tarlowe is manager of Business Services and Outsourcing, which
he has managed since inception. Mr. Tarlowe joined Fidelity as an
analyst in 1994, after receiving a bachelor of business administration
degree from the University of Michigan.
Michael Tempero is manager of Computers, which he has managed since
January 1997. Previously, he managed other Fidelity funds. Mr. Tempero
joined Fidelity as an analyst in 1993, after receiving his MBA from
the University of Chicago. Mr. Tempero also earned a master of science
degree in economics from the London School of Economics in 1992.
Nick Thakore is manager of Telecommunications and Utilities Growth,
which he has managed since July 1996 and August 1997, respectively.
Mr. Thakore joined Fidelity as an analyst in 1993, after earning his
MBA from The Wharton School at the University of Pennsylvania.
Previously, he was a real estate analyst for Prudential Properties
Company from 1989 to 1991.
Victor Thay is manager of Natural Gas, which he has managed since
December 1997. Mr. Thay joined Fidelity as a research associate in
1995, after receiving undergraduate degrees in political science and
business administration from the University of California at Berkeley
in 1995.
Simon Wolf is manager of Industrial Equipment which he has managed
since August 1997. Mr. Wolf joined Fidelity in 1996 as a research
associate. Previously, he worked for Salomon Brothers as an analyst
and high yield research assistant analyst from 1993 to 1996. Mr. Wolf
received a bachelor of science in economics degree from The Wharton
School at the University of Pennsylvania in 1992.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for each fund.
FMR Corp. is the ultimate parent company of FMR, FIMM, FMR U.K., and
FMR Far East. Members of the Edward C. Johnson 3d family are the
predominant owners of a class of shares of common stock representing
approximately 49% of the voting power of FMR Corp. Under the
Investment Company Act of 1940 (the 1940 Act), control of a company is
presumed where one individual or group of individuals owns more than
25% of the voting stock of that company; therefore, the Johnson family
may be deemed under the 1940 Act to form a controlling group with
respect to FMR Corp.
As of February 28, 1998, approximately 31.32% of Select Cyclical
Industries Fund's total outstanding shares were held by FMR.
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out a fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those
of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
Each stock fund seeks capital appreciation by concentrating its
investments in the securities of companies in a particular industry or
group of industries. Under normal conditions, each fund will invest at
least 80% of its assets in securities of companies principally engaged
in the business activities of its named industry or group of
industries. For this purpose American Gold, Natural Resources, and
Precious Metals and Minerals treat investments in precious metals and
instruments whose value is linked to the price of precious metals, as
investments in their named industries. The stock funds will invest
primarily in equity securities, although they may invest in other
types of instruments as well.
An issuer is considered to be principally engaged in a business
activity if at least 50% of its assets, gross income, or net profits
are committed to, or derived from, that activity. For Brokerage and
Investment Management and Financial Services, an issuer that derives
more than 15% of revenues or profits from brokerage or investment
management activities is considered to be principally engaged in the
business activities identified for those funds. It is important to
note that in many cases, the focus of one stock fund differs only
slightly from another, so they may invest in many of the same
securities.
The stock funds may involve significantly greater risks and therefore
may experience greater volatility than a mutual fund that does not
concentrate its investments. Because of their narrow focus, each
fund's performance is closely tied to and affected by, its industry or
group of industries. Companies in an industry are often faced with the
same obstacles, issues, or regulatory burdens, and their securities
may react similarly to and move in unison with these or other market
conditions. This is especially true for funds with a particularly
narrow industry focus. Also because the funds (except Financial
Services, Home Finance, and Regional Banks) are non-diversified, they
are further exposed to increased volatility. Non-diversified funds may
have greater investments in a single issuer than diversified funds, so
the performance of a single issuer can have a substantial impact on a
fund's share price. Finally, the funds' strategies in seeking to
achieve their investment objectives may lead to investments in smaller
companies. Securities of smaller companies, especially those whose
business involves emerging products or concepts, may be more volatile
due to their limited product lines, markets, or financial resources;
or their susceptibility to major setbacks or downturns.
The value of the funds' domestic and foreign investments varies in
response to many factors. Stock values fluctuate in response to the
activities of individual companies and general market and economic
conditions. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political
and economic risk, as well as exposure to currency fluctuations.
FMR may use various investment techniques to hedge a portion of the
funds' risks, but there is no guarantee that these strategies will
work as FMR intends. Of course, when you sell your shares of a fund,
they may be worth more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. When FMR considers it appropriate for defensive purposes,
each stock fund may temporarily invest substantially in
investment-grade debt securities.
AIR TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
the regional, national, and international movement of passengers,
mail, and freight via aircraft. These companies may include, for
example, airlines, air cargo and express delivery operators,
airfreight forwarders, and companies that provide equipment or
services to these companies, such as aviation service firms and
manufacturers of aeronautical equipment.
The profitability of air transportation companies is substantially
influenced by competition within the industry, domestic and foreign
economies and government regulation, and the price of fuel.
Additionally, the industry is still feeling the effects of
deregulation.
AMERICAN GOLD PORTFOLIO invests primarily in companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals. The fund focuses on North, Central, and South American
companies engaged in gold-related activities. In addition to
investments in those companies, the fund's focus include s
investments in gold bullion or coins and securities indexed to the
price of gold as well as, to a lesser degree, other precious metals in
the form of bullion, coins, and securities indexed to the price
of precious metals. The fund may also invest in companies that
manufacture and distribute precious metals and minerals products (such
as jewelry, watches, and metal foils and leaf) and companies that
invest in other companies engaged in gold-related activities.
The price of gold and other precious metal mining securities can face
substantial short-term volatility caused by international monetary and
political developments such as currency devaluations or revaluations,
economic and social conditions within a country, or trade restrictions
between countries. Because much of the world's gold reserves
are located in South Africa, the social and economic conditions there
can affect gold and gold-related companies located elsewhere. The
price of gold bullion or coins is closely tied to broad economic and
political conditions.
For the fund to qualify as a regulated investment company u nder
current federal tax law, gains from selling precious metals may not
exceed 10% of the fund's gross income for its taxable year .
This tax requirement could cause the fund to hold or sell precious
metals or securities when it would not otherwise do so.
AUTOMOTIVE PORTFOLIO invests primarily in companies engaged in the
manufacture, marketing, or sale of automobiles, trucks, specialty
vehicles, parts, tires, and related services. These companies may
include, for example, companies involved with the manufacture and
distribution of vehicles, vehicle parts and tires (either original
equipment or for the aftermarket) and companies involved in the retail
sale of vehicles, parts or tires. In addition, the fund may invest in
companies that provide automotive-related services to manufacturers,
distributors or consumers.
The automotive industry is highly cyclical and companies in the
industry may suffer periodic operating losses. While most of the major
manufacturers are large, financially strong companies, some are
smaller manufacturers that have a non-diversified product line or
customer base.
BIOTECHNOLOGY PORTFOLIO invests primarily in companies engaged in the
research, development, and manufacture of various biotechnological
products, services, and processes. These companies may include, for
example, companies involved with new or experimental technologies such
as genetic engineering, hybridoma and recombinant DNA techniques and
monoclonal antibodies. The fund may also invest in companies that
manufacture and/or distribute biotechnological and biomedical
products, including devices and instruments, and in companies that
provide or benefit significantly from scientific and technological
advances in biotechnology. Some biotechnology companies may provide
processes or services instead of, or in addition to, products.
The description of the biotechnology sector will be interpreted
broadly by FMR, and may include applications and developments in such
areas as human health care (e.g., cancer, infectious disease,
diagnostics and therapeutics); pharmaceuticals (e.g., new drug
development and production); agricultural and veterinary applications
(e.g., improved seed varieties, animal growth hormones); chemicals
(e.g., enzymes, toxic waste treatment); medical/surgical (e.g.,
epidermal growth factor, in vivo imaging/therapeutics); and industry
(e.g., biochips, fermentation, enhanced mineral recovery).
Biotechnology companies are affected by patent considerations, intense
competition, rapid technological change and obsolescence, and
regulatory requirements. In addition, many of these companies may not
yet offer products and may have persistent losses or erratic revenue
patterns.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO invests primarily in
companies engaged in stock brokerage, commodity brokerage, investment
banking, tax-advantaged investment or investment sales, investment
management, or related investment advisory services. The fund does not
invest in securities of FMR or its affiliated companies. Under SEC
regulations the fund may not invest more than 5% of its total assets
in the equity securities of any company that derives more than 15% of
its revenues from brokerage or investment management activities.
Legislation is currently being considered which would reduce the
separation between commercial and investment banking businesses. If
enacted this could significantly impact the industry and the fund.
Changes in regulations, brokerage commission structure, stock and bond
market activity, and the competitive environment, combined with the
operating leverage inherent in companies in these industries, can
produce erratic returns over time.
BUSINESS SERVICES AND OUTSOURCING invests primarily in companies that
provide business-related services to companies and other
organizations. Business-related services may include for example, data
processing, consulting, outsourcing, temporary employment, market
research or database services, printing, advertising, computer
programming, credit reporting, claims collection, mailing and
photocopying. Typically, these services are provided on a contract or
fee basis.
The success of companies that provide business-related services is, in
part, subject to continued demand for such services as companies and
other organizations seek alternative, cost effective means to meet
their economic goals. Competitive pressures, such as technological
developments, fixed-rate pricing, and the ability to attract and
retain skilled employees, also may have a significant impact on the
financial condition of companies in the business services and
outsourcing industry.
CHEMICALS PORTFOLIO invests primarily in companies engaged in the
research, development, manufacture, or marketing of products or
services related to the chemical process industries. These products
may include, for example, synthetic and natural materials, such as
basic and intermediate organic and inorganic chemicals, plastics,
synthetic fibers, fertilizers, industrial gases, flavorings,
fragrances, biological materials, catalysts, carriers, additives, and
process aids. The fund may also invest in companies providing design,
engineering, construction, and consulting services to companies
engaged in chemical processing.
Companies in the chemical processing industries are subject to intense
competition, product obsolescence, and significant governmental
regulation. As regulations are developed and enforced, such companies
may be required to alter or cease production of a product, to pay
fines, or to pay for cleaning up a disposal site. In addition,
chemical companies face unique risks associated with handling
hazardous products.
COMPUTERS PORTFOLIO invests primarily in companies engaged in
research, design, development, manufacture, or distribution of
products, processes, or services that relate to currently available or
experimental hardware technology within the computer industry. The
fund may invest in companies that provide products or services such as
computer and office equipment wholesalers, software retailers, data
processors, robotics, and designers of artificial intelligence.
Competitive pressures and changing domestic and international demand
may have a significant effect on the financial condition of companies
in the computer industry. Companies in the computer industry spend
heavily on research and development and are sensitive to the risk of
product obsolescence.
CONSTRUCTION AND HOUSING PORTFOLIO invests primarily in companies
engaged in the design and construction of residential, commercial,
industrial, and public works facilities, as well as companies engaged
in the manufacture, supply, distribution, or sale of products or
services to these construction industries. Examples of companies
engaged in these activities include companies that produce basic
building materials such as cement, aggregates, gypsum, timber, and
wall and floor coverings; that supply home furnishings; and that
provide engineering or contracting services. The fund also may invest
in companies involved in real estate development and construction
financing such as homebuilders, architectural and design firms, and
property managers, and in companies involved in the home improvement
and maintenance industry, including building material retailers and
distributors, household service firms, and those companies that supply
such companies.
Companies in these industries may be affected by a variety of factors
such as government spending on housing subsidies, public works, and
transportation facilities, as well as changes in interest rates,
consumer confidence and spending, taxation, demographic patterns, the
level of new and existing home sales, and other economic activity.
CONSUMER INDUSTRIES PORTFOLIO invests primarily in companies engaged
in the manufacture and distribution of goods to consumers both
domestically and internationally. These companies may include, for
example, companies that manufacture or sell durable goods such as
homes, cars, boats, major appliances, and personal computers. The fund
also may invest in companies that manufacture, wholesale, or retail
non-durable goods such as food, beverages, tobacco, health care
products, household and personal care products, apparel, and
entertainment products (e.g., books, magazines, TV, cable, movies,
music, gaming, sports). In addition, the fund may invest in companies
that provide consumer products and services such as lodging, child
care, convenience stores, and car rentals.
The success of consumer product manufacturers and retailers is closely
tied to the performance of the overall economy, interest rates,
competition, and consumer confidence. Success depends heavily on
disposable household income and consumer spending. Changes in
demographics and consumer tastes can also affect the demand for, and
success of, consumer products in the marketplace.
CYCLICAL INDUSTRIES PORTFOLIO invests primarily in companies engaged
in the research, development, manufacture, distribution, supply, or
sale of materials, equipment, products or services related to cyclical
industries. These may include the automotive, chemical, construction
and housing, defense and aerospace, environmental services, industrial
equipment and materials, paper and forest products, and transportation
industries.
Many companies in these industries are significantly affected by
general economic trends including employment, economic growth, and
interest rates. Other factors that may affect these industries are
changes in consumer sentiment and spending, commodity prices,
legislation, government regulation and spending, import controls, and
worldwide competition. At times, worldwide production of the materials
used in cyclical industries has exceeded demand as a result of, for
example, over-building or economic downturns. During these times,
commodity price declines and unit volume reductions resulted in poor
investment returns and losses. Furthermore, a company in the cyclical
industries may be subject to liability for environmental damage,
depletion of resources, and mandated expenditures for safety and
pollution control.
DEFENSE AND AEROSPACE PORTFOLIO invests primarily in companies engaged
in the research, manufacture, or sale of products or services related
to the defense or aerospace industries. For example, the fund may
invest in companies that provide the following products or services:
air transport; defense electronics; aircraft or spacecraft production;
missile design; data processing or computer-related services;
communications systems; research; development and manufacture of
military weapons and transportation; general aviation equipment,
missiles, space launch vehicles, and spacecraft; units for guidance,
propulsion, and control of flight vehicles; and equipment components
and airborne and ground-based equipment essential to the testing,
operation, and maintenance of flight vehicles.
The financial condition of companies in the industries and investor
interest in these companies are heavily influenced by government
defense and aerospace spending policies. Defense spending is currently
under pressure from efforts to control the U.S. budget deficit.
DEVELOPING COMMUNICATIONS PORTFOLIO invests primarily in companies
engaged in the development, manufacture, or sale of emerging
communications services or equipment. Emerging communications are
those which derive from new technologies or new applications of
existing technologies. For example, the fund may invest in companies
involved in cellular communications, software development, video
conferencing, or data processing. The fund places less emphasis on
traditional communications companies such as large long distance
carriers.
Products or services provided by this industry may be in the
development stage and can face risks such as failure to obtain
financing or regulatory approval, intense competition, product
incompatibility, consumer preferences, and rapid obsolescence.
ELECTRONICS PORTFOLIO invests primarily in companies engaged in the
design, manufacture, or sale of electronic components (semiconductors,
connectors, printed circuit boards, and other components); equipment
vendors to electronic component manufacturers; electronic component
distributors; and electronic instruments and electronic systems
vendors. This may include companies involved in all aspects of the
electronics business and in new technologies or specialty areas such
as defense electronics, advanced design and manufacturing
technologies, or lasers.
Many of the products offered by companies engaged in the design,
production, or distribution of electronic products are subject to
risks of rapid obsolescence and intense competition.
ENERGY PORTFOLIO invests primarily in companies in the energy field,
including the conventional areas of oil, gas, electricity, and coal,
and newer sources of energy such as nuclear, geothermal, oil shale,
and solar power. For example, the fund may invest in companies that
produce, transmit, market, distribute or measure energy; companies
involved in providing products and services to companies in the energy
field; and companies involved in the exploration of new sources of
energy, conservation, and energy-related pollution control.
Securities of companies in the energy field are subject to changes in
value and dividend yield which depend largely on the price and supply
of energy fuels. Swift price and supply fluctuations may be caused by
events relating to international politics, energy conservation, the
success of exploration projects, and tax and other governmental
regulatory policies.
ENERGY SERVICE PORTFOLIO invests primarily in companies in the energy
service field, including those that provide services and equipment to
the conventional areas of oil, gas, electricity, and coal, and newer
sources of energy such as nuclear, geothermal, oil shale, and solar
power. For example, the fund may invest in companies providing
services such as onshore or offshore drilling; companies involved in
production and well maintenance; companies involved in exploration
engineering, data and technology; companies involved in energy
transport; and companies involved in equipment and plant design or
construction. In addition, the fund may invest in companies that
provide products and services to these companies.
Energy service firms are affected by supply and demand both for their
specific product or service and for energy products in general. The
price of oil and gas, exploration and production spending,
governmental regulation, world events and economic conditions will
likewise affect the performance of these companies.
ENVIRONMENTAL SERVICES PORTFOLIO invests primarily in companies
engaged in the research, development, manufacture, or distribution of
products, processes, or services related to waste management or
pollution control. Such products, processes or services may include
the transportation, treatment and disposal of both hazardous and solid
wastes, including waste-to-energy and recycling; remedial project
efforts, including groundwater and underground storage tank
decontamination, asbestos cleanup and emergency cleanup response; and
the detection, analysis, evaluation, and treatment of both existing
and potential environmental problems including, among others,
contaminated water, air pollution, and acid rain. The fund may also
invest in companies that provide design, engineering, construction,
and consulting services to companies engaged in waste management or
pollution control.
Securities of companies in the environmental services field can be
impacted by legislation, government regulations, and enforcement
policies. As regulations are developed and enforced, companies may be
required to alter or cease production of a product or service. In
addition, hazardous materials may be involved, and companies can face
significant liability risk.
FINANCIAL SERVICES PORTFOLIO invests primarily in companies that
provide financial services to consumers and industry. Examples of
companies in the financial services sector include commercial banks,
savings and loan associations, brokerage companies, insurance
companies, real estate and leasing companies, and companies that span
across these segments. Under SEC regulations, the fund may not invest
more than 5% of its total assets in the equity securities of any
company that derives more than 15% of its revenues from brokerage or
investment management activities.
Financial services companies are subject to extensive governmental
regulation which may limit both the amounts and types of loans and
other financial commitments they can make, and the interest rates and
fees they can charge. Profitability is largely dependent on the
availability and cost of capital funds, and can fluctuate
significantly when interest rates change. Credit losses resulting from
financial difficulties of borrowers can negatively impact the sector.
Insurance companies may be subject to severe price competition.
Legislation is currently being considered which would reduce the
separation between commercial and investment banking businesses. If
enacted this could significantly impact the sector and the fund.
FOOD AND AGRICULTURE PORTFOLIO invests primarily in companies engaged
in the manufacture, sale, or distribution of food and beverage
products, agricultural products, and products related to the
development of new food technologies. For example, the fund may invest
in companies that sell products and services such as meat and poultry
processors, grocery stores, and restaurants; companies that
manufacture and distribute products such as soft drinks, pet foods,
wood products, tobacco, and agricultural machinery; and companies
engaged in the development of new technologies such as improved hybrid
seeds.
The food and agriculture field is impacted by supply and demand, which
may be affected by demographic and product trends, food fads,
marketing campaigns, and environmental factors. In the United States,
the agricultural products industry is subject to regulation by
numerous government agencies.
HEALTH CARE PORTFOLIO invests primarily in companies engaged in the
design, manufacture, or sale of products or services used for or in
connection with health care or medicine. Companies in the health care
sector may include, for example, pharmaceutical companies, companies
involved in research and development, companies involved in the
operation of health care facilities, and other companies involved in
the design, manufacture, or sale of health care-related products or
services.
Many of these companies are subject to government regulation and
approval of their products and services, which could have a
significant effect on their price and availability. Furthermore, the
types of products or services produced or provided by these companies
may quickly become obsolete.
HOME FINANCE PORTFOLIO invests primarily in companies engaged in
investing in real estate, usually through mortgages and other
consumer-related loans. These companies may also offer discount
brokerage services, insurance products, leasing services, and joint
venture financing. For example, the fund may invest in mortgage
banking companies, real estate investment trusts, banks, and other
depository institutions.
The residential real estate finance industry has changed rapidly over
the last decade and is expected to continue to change. Regulatory
changes at federally insured institutions, in response to a high
failure rate, have mandated higher capital ratios and more prudent
underwriting. This reduced capacity has created growth opportunities
for uninsured companies and secondary market products to fill unmet
demand for home finance. Regulatory changes, interest rate movements,
home mortgage demand, and residential delinquency trends will affect
the industry.
INDUSTRIAL EQUIPMENT PORTFOLIO invests primarily in companies engaged
in the manufacture, distribution, or service of products and equipment
for the industrial sector, including integrated producers of capital
equipment (such as general industrial machinery, farm equipment, and
computers), parts suppliers, and subcontractors. For example, the fund
may invest in companies that provide service establishment, railroad,
textile, farming, mining, oilfield, semiconductor, and
telecommunications equipment; companies that manufacture products or
service equipment for trucks, construction, transportation or machine
tools; cable equipment companies; and office automation companies.
The success of equipment manufacturing and distribution companies is
closely tied to overall capital spending levels, which are influenced
by an individual company's profitability and broader factors such as
interest rates and foreign competition. The industrial sector may also
be affected by economic cycles, technical progress, labor relations,
and government regulations.
INDUSTRIAL MATERIALS PORTFOLIO invests primarily in companies engaged
in the manufacture, mining, processing, or distribution of raw
materials and intermediate goods used in the industrial sector. These
materials and goods may include, for example, chemicals, metals,
textiles, and wood products. The fund may also invest in mining,
processing, transportation, and distribution companies, including
equipment suppliers and railroads.
Many companies in the industrial sector are significantly affected by
the level and volatility of commodity prices, the exchange value of
the dollar, import controls, and worldwide competition. At times,
worldwide production of industrial materials has exceeded demand as a
result of over-building or economic downturns, leading to poor
investment returns or losses. Other risks may include liability for
environmental damage, depletion of resources, and mandated
expenditures for safety and pollution control.
INSURANCE PORTFOLIO invests primarily in companies engaged in
underwriting, reinsuring, selling, distributing, or placing of
property and casualty, life, or health insurance. For example, the
fund may invest in companies that provide a specific type of
insurance, such as life or health insurance, those that offer a
variety of insurance products, and those that provide insurance
services such as brokers and claims processors.
Insurance company profits are affected by interest rate levels,
general economic conditions, and price and marketing competition.
Certain types of insurance may be impacted by events or trends such as
natural catastrophes, mortality rates, or recessions. Companies may be
exposed to material risks including a shortage of cash reserves, the
inability to collect from reinsurance carriers, liability for the
coverage of environmental clean-up costs from past years, and as yet
unanticipated liabilities. Also, insurance companies are subject to
extensive governmental regulation, and can be adversely affected by
proposed or potential tax law changes.
LEISURE PORTFOLIO invests primarily in companies engaged in the
design, production, or distribution of goods or services in the
leisure industries. The fund may invest in companies that provide
goods or services such as television and radio broadcast or
manufacture (including cable television); motion pictures and
photography; recordings and musical instruments; publishing, including
newspapers and magazines; sporting goods and camping and recreational
equipment; and sports arenas. Other goods and services may include
toys and games (including video and other electronic games), amusement
and theme parks, travel and travel-related services, hotels and
motels, leisure apparel or footwear, fast food, beverages,
restaurants, tobacco products and gaming casinos.
Securities of companies in the leisure industries may be considered
speculative and generally exhibit greater volatility than the overall
market. Many companies have unpredictable earnings, due in part to
changing consumer tastes and intense competition. The industries have
reacted strongly to technological developments and to the threat of
government regulation.
MEDICAL DELIVERY PORTFOLIO invests primarily in companies engaged in
the ownership or management of hospitals, nursing homes, health
maintenance organizations, and other companies specializing in the
delivery of health care services. For example, the fund may invest in
companies that operate acute care, psychiatric, teaching, or
specialized treatment hospitals, as well as home health care
providers, medical equipment suppliers, and companies that provide
related services.
Federal and state governments provide a substantial percentage of
revenues to health care service providers via Medicare and Medicaid.
These sources are subject to extensive governmental regulation, and
appropriations are a continued source of debate. The administration is
currently examining the health care industry to determine whether
government funds are spent appropriately and to ensure that adequate
health care is available to everyone.
The demand for health care services should increase as the population
ages. However, studies have shown the ability of health care providers
to curtail unnecessary hospital stays and reduce costs. These changes
could alter the health care industry, focusing it more on home care
and placing less emphasis on inpatient revenues as a source of profit.
MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO invests primarily in
companies engaged in research, development, manufacture, distribution,
supply or sale of medical equipment and devices and related
technologies. For example, the fund may invest in companies involved
in the design and manufacture of medical equipment and devices, drug
delivery technologies, hospital equipment and supplies, medical
instrumentation and medical diagnostics.
Companies in this industry may be affected by Patient
considerations, rapid technological change and obsolescence,
government regulation, and government reimbursement for medical
expenses.
MULTIMEDIA PORTFOLIO invests primarily in companies engaged in the
development, production, sale, and distribution of goods or services
used in the broadcast and media industries. The fund may invest in
advertising companies; broadcasting companies; theaters; film studios;
publishing, printing, cable television and video companies and
equipment providers; companies involved in emerging technologies such
as cellular communications; and other companies involved in the
ownership, operation, or development of media products or services.
Some of the companies in the broadcast and media industries are
undergoing significant change because of federal deregulation of cable
and broadcasting. As a result, competitive pressures are intense and
the securities of these companies are subject to increased price
volatility. Federal Communications Commission rules govern the
concentration of investment in AM, FM, or TV stations, limiting
investment alternatives.
NATURAL GAS PORTFOLIO invests primarily in companies engaged in the
production, transmission, and distribution of natural gas, and
involved in the exploration of potential natural gas sources, as well
as those companies that provide services and equipment to natural gas
producers, refineries, cogeneration facilities, converters, and
distributors. These companies may include, for example, companies
participating in gas research, exploration, or refining, companies
working toward technological advances in the natural gas field, and
other companies providing products or services to the field.
The companies in the natural gas field are subject to changes in price
and supply of both conventional and alternative energy sources. Swift
price and supply fluctuations may be caused by events relating to
international politics, energy conservation, the success of energy
source exploration projects, and tax and other regulatory policies of
domestic and foreign governments.
NATURAL RESOURCES PORTFOLIO invests primarily in companies that own or
develop natural resources, or supply goods and services to such
companies. These may include companies involved either directly or
through subsidiaries in exploring, mining, refining, processing,
transporting, fabricating, dealing in, or owning natural resources.
Natural resources include precious metals (e.g., gold, platinum, and
silver), ferrous and nonferrous metals (e.g., iron, aluminum, and
copper), strategic metals (e.g., uranium and titanium), hydrocarbons
(e.g., coal, oil, and natural gases), chemicals, forest products, real
estate, food, textile and tobacco products, and other basic
commodi ties. The fund may also invest in precious metals and
instruments w hose value is linked to the price of precious metals.
Securities of companies in the natural resources sector are subject to
swift price and supply fluctuations that may be caused by events
relating to international political and economic developments, energy
conservation, the success of exploration projects, and tax and other
governmental regulatory policies. Investments in precious metals can
present concerns such as delivery, storage and maintenance, possible
illiquidity and the unavailability of accurate market valuations.
PAPER AND FOREST PRODUCTS PORTFOLIO invests primarily in companies
engaged in the manufacture, research, sale, or distribution of paper
products, packaging products, building materials (such as lumber and
paneling products), and other products related to the paper and forest
products industry. The fund may invest in diversified companies with
operations in the aforementioned areas. For example, the fund may
invest in paper production and office product companies, printers, and
publishers.
The success of these companies depends on the health of the economy,
worldwide production capacity for the industry's products, and
interest rate levels, which may affect product pricing, costs, and
operating margins. These variables also affect the level of industry
and consumer capital spending for paper and forest products.
PRECIOUS METALS AND MINERALS PORTFOLIO invests primarily in companies
engaged in exploration, mining, processing, or dealing in gold,
silver, platinum, diamonds, or other precious metals and minerals. In
addition to investments in those companies, the fund's focus includes
investments in precious metals such as gold, silver, and platinum,
coins, and securities indexed to the price of gold or other precious
metals. The fund may also invest in companies that manufacture and
distribute precious metals and minerals products (such as jewelry,
watches, and metal foils and leaf) and companies that invest in other
companies engaged in gold-related activities.
The price of precious metals is affected by broad economic and
political conditions. For example, the price of gold and other
precious metal mining securities can face substantial short-term
volatility caused by international monetary and political developments
such as currency devaluations or revaluations, economic and social
conditions within a country, or trade restrictions between countries.
Because much of the world's gold reserves are located in South
Africa, the social and economic conditions there can affect gold and
gold-related companies located elsewhere.
For the fund to qualify as a regulated investment company under
current federal tax law, gains from selling precious metals may not
exceed 10% of the fund's gross income for its taxable year. This tax
requirement could cause the fund to hold or sell precious metals or
securities when it would not otherwise do so.
REGIONAL BANKS PORTFOLIO invests primarily in companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans. These companies concentrate their operations in a
specific part of the country and may include, for example, state
chartered banks, savings and loan institutions, and banks that are
members of the Federal Reserve System. The fund may own securities of
U.S. institutions whose deposits are not insured by the federal
government.
Legislation is currently being considered which would reduce the
separation between commercial and investment banking businesses. If
enacted this could significantly impact the industry and the fund.
As the services offered by banks expand, banks are becoming more
exposed to well-established competitors. This exposure has also
increased due to the erosion of historical distinctions between
regional banks and other financial institutions. Increased competition
may result from the broadening of regional and national interstate
banking powers, which has already reduced the number of publicly
traded regional banks. In addition, general economic conditions are
important to regional banks which face exposure to credit losses and
dependence on interest rate activity.
RETAILING PORTFOLIO invests primarily in companies engaged in
merchandising finished goods and services primarily to individual
consumers. These companies may include, for example, drug and
department stores; suppliers of goods and services for homes, home
improvements and yards; food, clothing, jewelry, electronics and
computer retailers; motor vehicle and marine dealers; warehouse
membership clubs; mail order operations; and companies involved in
alternative selling methods.
The success of retailing companies is closely tied to consumer
spending, which is affected by general economic conditions and
consumer confidence levels. The retailing industry is highly
competitive, and a company's success is often tied to its ability to
anticipate changing consumer tastes.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO invests primarily in
companies engaged in research, design, production or distribution of
products or processes that relate to software or information-based
services. These companies may include, for example, companies that
design products such as systems-level software to run the basic
functions of a computer; or applications software for one type of
work; and consulting, communications, and related services.
Competitive pressures may have a significant effect on the financial
condition of companies in the software and computer services
industries. For example, an increasing number of companies and new
product offerings can lead to price cuts and slower selling cycles.
TECHNOLOGY PORTFOLIO invests primarily in companies which FMR believes
have, or will develop, products, processes, or services that will
provide or will benefit significantly from technological advances and
improvements. These companies may include, for example, companies that
develop, produce or distribute products or services in the computer,
semi-conductor, electronics, communications, health care, and
biotechnology sectors.
Competitive pressures may have a significant effect on the
financial condition of companies in the technology sector. For
example, if technology continues to advance at an accelerated rate,
and the number of companies and product offerings continues to expand,
these companies could become increasingly sensitive to short product
cycles and aggressive pricing.
TELECOMMUNICATIONS PORTFOLIO invests primarily in companies engaged in
the development, manufacture, or sale of communications services or
communications equipment. Companies in the telecommunications field
may range from traditional local and long-distance telephone service
or equipment providers to companies involved in new technologies such
as cellular telephone or paging services, fiber-optics, and
semiconductors.
Telephone operating companies are subject to both federal and state
regulations governing rates of return and services that may be
offered. Many companies in the industry fiercely compete for market
share. Although telephone companies usually pay an above-average
dividend, the fund's investment decisions are primarily based on
growth potential and not on income.
TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
Transportation services may include, for example, companies involved
in the movement of freight or people such as airline, railroad, ship,
truck and bus companies; equipment manufacturers (including makers of
trucks, automobiles, planes, containers, railcars or other modes of
transportation and related products); parts suppliers; and companies
involved in leasing, maintenance, and transportation-related services.
Transportation stocks are cyclical and have occasional sharp price
movements which may result from changes in the economy, fuel prices,
labor agreements, and insurance costs. The United States has been
deregulating these industries, but it is uncertain whether this trend
will continue and what its effect will be.
UTILITIES GROWTH PORTFOLIO invests primarily in companies in the
public utilities industry and companies deriving a majority of their
revenues from their public utility operations. These may include, for
example, companies that manufacture, produce, sell, or transmit gas or
electric energy; water supply, waste disposal and sewerage, and
sanitary service companies; and companies involved in telephone,
satellite, and other communication fields.
Public utility stocks have traditionally produced above-average
dividend income, but the fund's investments are based on growth
potential. The fund may not own more than 5% of the outstanding voting
securities of more than one public utility company as defined by the
Public Utility Holding Company Act of 1935. The public utilities
industries may be subject to broad risks resulting from governmental
regulation, financing difficulties, supply and demand of services or
fuel, and special risks associated with natural resource conservation.
MONEY MARKET PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term money market securities. The fund invests
only in high-quality U.S. dollar-denominated money market securities
of domestic and foreign issuers, including U.S. Government securities
and repurchase agreements. The fund may also enter into reverse
repurchase agreements.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and income, and does not seek the
higher yields or capital appreciation that more aggressive investments
may provide. The fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market
conditions.
The fund complies with industry-standard requirements for the quality,
maturity, and diversification of its investments, which are designed
to help maintain a stable $1.00 share price. Of course, there is no
guarantee that the fund will maintain a stable $1.00 share price. The
fund will purchase only high-quality securities that FMR believes
present minimal credit risks and will observe maturity restrictions on
securities it buys. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the fund's investments could cause its share price (and the
value of your investment) to change.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 100% of total assets, each of Financial
Services, Home Finance, and Regional Banks may not purchase more than
10% of the outstanding voting securities of a single issuer. Utilities
Growth may not own more than 5% of the outstanding voting securities
of more than one public utility company as defined by the Public
Utility Holding Company Act of 1935. Each of Brokerage and Investment
Management and Financial Services may not invest more than 5% of its
total assets in the equity securities of any company that derives more
than 15% of its revenues from brokerage or investment management
activities.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
In addition, bond prices are also affected by the credit quality of
the issuer. Investment-grade debt securities are medium- and
high-quality securities. Some, however, may possess speculative
characteristics, and may be more sensitive to economic changes and to
changes in the financial condition of issuers.
RESTRICTIONS: Purchase of a debt security is consistent with a
stock fund's debt quality policy if it is rated at or above the stated
level by Moody's Investors Service or rated in the equivalent
categories by S&P, or is unrated but judged to be of equivalent
quality by FMR. Each stock fund currently intends to limit its
investments in lower than Baa-quality debt securities (sometimes
called "junk bonds") to 5% of its assets.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
and other entities. These securities may carry fixed, variable, or
floating interest rates. Money market securities may be structured or
may employ a trust or similar structure so that they are eligible
investments for money market funds. If the structure does not perform
as intended, adverse tax or investment consequences may result.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments issued or guaranteed by the U.S. Treasury or by an agency
or instrumentality of the U.S. Government. Not all U.S. Government
securities are backed by the full faith and credit of the United
States. For example, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities such as those issued by the Federal Farm Credit
Banks Funding Corporation are supported only by the credit of the
entity that issued them.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to
pay interest and repay principal when due and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in emerging markets, more
volatile and potentially less liquid than U.S. investments.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities and some
other securities may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Under normal conditions, the money market fund intends
to invest at least 25% of its assets in securities of companies in the
financial services industry.
OTHER INSTRUMENTS may include securities of closed-end investment
companies and real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
RESTRICTIONS: The money market fund does not currently intend to
invest in a money market fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. A fund that is not diversified may be more sensitive to
changes in the market value of a single issuer or industry.
RESTRICTIONS: The stock funds (except Financial Services, Home
Finance, and Regional Banks) are considered non-diversified.
Generally, to meet federal tax requirements at the close of each
quarter, each stock fund does not invest more than 25% of its total
assets in any one issuer and, with respect to 50% of total assets,
does not invest more than 5% of its total assets in any one issuer.
These limitations do not apply to U.S. Government securities or to
securities of other investment companies.
Each of Financial Services, Home Finance, and Regional Banks, with
respect to 75% of its total assets, may not purchase a security if, as
a result, more than 5% would be invested in the securities of any one
issuer. This limitation does not apply to U.S. Government securities.
The money market fund may not invest more than 5% of its total assets
in any one issuer, except that it may invest up to 25% of its total
assets in certain other money market funds and in the highest-quality
securities of a single issuer for up to three business days. This
limitation does not apply to U.S. Government securities .
With the exception of American Gold, Business Services and
Outsourcing, Cyclical Industries, Medical Equipment and Systems,
Natural Resources, and Precious Metals and Minerals, each stock fund
normally invests at least 80%, but always at least 25%, of its assets
in securities of companies principally engaged in the business
activities identified for that fund. Each of Natural Resources and
Precious Metals and Minerals normally invests at least 80% of its
assets in securities of companies principally engaged in the business
activities identified for the fund, precious metals, and instruments
whose value is linked to the price of precious metals. American Gold
normally invests at least 80% of its assets in securities of North,
Central, and South American companies engaged in gold-related
activities, and in gold bullion or coins, and instruments whose value
is linked to the price of gold. Each of American Gold and Precious
Metals and Minerals invests at least 25% of its assets in securities
of companies principally engaged in the business activities identified
for the fund. Each of Business Services and Outsourcing, Cyclical
Industries, and Medical Equipment and Systems normally invests at
least 80% of its assets in securities of companies principally engaged
in the business activities identified for the fund. Each of Business
Services and Outsourcing, Cyclical Industries, Medical Equipment and
Systems, and Natural Resources invests at least 25% of its total
assets in securities of companies principally engaged in the business
activities identified for the fund.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR, or through reverse repurchase agreements. If a stock fund
borrows money, its share price may be subject to greater fluctuation
until the borrowing is paid off. If a fund makes additional
investments while borrowings are outstanding, this may be considered a
form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
The money market fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an
amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
AIR TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
the regional, national and international movement of passengers, mail,
and freight via aircraft.
1.AMERICAN GOLD PORTFOLIO invests primarily in companies engaged in
exploration, mining, processing, or dealing in gold, or, to a lesser
degree, in silver, platinum, diamonds, or other precious metals and
minerals.
AUTOMOTIVE PORTFOLIO invests primarily in companies engaged in the
manufacture, marketing or sale of automobiles, trucks, specialty
vehicles, parts, tires, and related services.
BIOTECHNOLOGY PORTFOLIO invests primarily in companies engaged in the
research, development, and manufacture of various biotechnological
products, services and processes.
2.BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO invests primarily in
companies engaged in stock brokerage, commodity brokerage, investment
banking, tax-advantaged investment or investment sales, investment
management, or related investment advisory services.
BUSINESS SERVICES AND OUTSOURCING invests primarily in companies that
provide business-related services to companies and other
organizations.
CHEMICALS PORTFOLIO invests primarily in companies engaged in the
research, development, manufacture or marketing of products or
services related to the chemical process industries.
COMPUTERS PORTFOLIO invests primarily in companies engaged in
research, design, development, manufacture or distribution of
products, processes or services that relate to currently available or
experimental hardware technology within the computer industry.
CONSTRUCTION AND HOUSING PORTFOLIO invests primarily in companies
engaged in the design and construction of residential, commercial,
industrial and public works facilities, as well as companies engaged
in the manufacture, supply, distribution or sale of products or
services to these construction industries.
CONSUMER INDUSTRIES PORTFOLIO invests primarily in companies engaged
in the manufacture and distribution of goods to consumers both
domestically and internationally.
CYCLICAL INDUSTRIES PORTFOLIO invests primarily in companies engaged
in the research, development, manufacture, distribution, supply, or
sale of materials, equipment, products or services related to cyclical
industries.
DEFENSE AND AEROSPACE PORTFOLIO invests primarily in companies engaged
in the research, manufacture or sale of products or services related
to the defense or aerospace industries.
DEVELOPING COMMUNICATIONS PORTFOLIO invests primarily in companies
engaged in the development, manufacture or sale of emerging
communications services or equipment.
ELECTRONICS PORTFOLIO invests primarily in companies engaged in the
design, manufacture, or sale of electronic components (semiconductors,
connectors, printed circuit boards and other components); equipment
vendors to electronic component manufacturers; electronic component
distributors; and electronic instruments and electronic systems
vendors.
ENERGY PORTFOLIO invests primarily in companies in the energy field,
including the conventional areas of oil, gas, electricity and coal,
and newer sources of energy such as nuclear, geothermal, oil shale and
solar power.
ENERGY SERVICE PORTFOLIO invests primarily in companies in the energy
service field, including those that provide services and equipment to
the conventional areas of oil, gas, electricity and coal, and newer
sources of energy such as nuclear, geothermal, oil shale and solar
power.
ENVIRONMENTAL SERVICES PORTFOLIO invests primarily in companies
engaged in the research, development, manufacture or distribution of
products, processes or services related to waste management or
pollution control.
3.FINANCIAL SERVICES PORTFOLIO invests primarily in companies that
provide financial services to consumers and industry. With respect to
75% of total assets, the fund may not purchase a security if, as a
result, more than 5% would be invested in the securities of any one
issuer; and with respect to 100% of total assets, the fund may not
purchase more than 10% of the outstanding voting securities of a
single issuer. These limitations do not apply to U.S. Government
securities.
FOOD AND AGRICULTURE PORTFOLIO invests primarily in companies engaged
in the manufacture, sale, or distribution of food and beverage
products, agricultural products, and products related to the
development of new food technologies.
HEALTH CARE PORTFOLIO invests primarily in companies engaged in the
design, manufacture, or sale of products or services used for or in
connection with health care or medicine.
HOME FINANCE PORTFOLIO invests primarily in companies engaged in
investing in real estate, usually through mortgages and other
consumer-related loans. With respect to 75% of total assets, the fund
may not purchase a security if, as a result, more than 5% would be
invested in the securities of any one issuer; and with respect to 100%
of total assets, the fund may not purchase more than 10% of the
outstanding voting securities of a single issuer. These limitations
do not apply to U.S. Government securities.
INDUSTRIAL EQUIPMENT PORTFOLIO invests primarily in companies engaged
in the manufacture, distribution or service of products and equipment
for the industrial sector, including integrated producers of capital
equipment (such as general industry machinery, farm equipment, and
computers), parts suppliers and subcontractors.
INDUSTRIAL MATERIALS PORTFOLIO invests primarily in companies engaged
in the manufacture, mining, processing, or distribution of raw
materials and intermediate goods used in the industrial sector.
INSURANCE PORTFOLIO invests primarily in companies engaged in
underwriting, reinsuring, selling, distributing, or placing of
property and casualty, life, or health insurance.
LEISURE PORTFOLIO invests primarily in companies engaged in the
design, production, or distribution of goods or services in the
leisure industries.
MEDICAL DELIVERY PORTFOLIO invests primarily in companies engaged in
the ownership or management of hospitals, nursing homes, health
maintenance organizations, and other companies specializing in the
delivery of health care services.
MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO invests primarily in
companies engaged in research, development, manufacture, distribution,
supply or sale of medical equipment and devices and related
technologies.
MULTIMEDIA PORTFOLIO invests primarily in companies engaged in the
development, production, sale and distribution of goods or services
used in the broadcast and media industries.
NATURAL GAS PORTFOLIO invests primarily in companies engaged in the
production, transmission, and distribution of natural gas, and
involved in the exploration of potential natural gas sources, as well
as those companies that provide services and equipment to natural gas
producers, refineries, cogeneration facilities, converters, and
distributors.
4.NATURAL RESOURCES PORTFOLIO invests primarily in companies that own
or develop natural resources, or supply goods and services to such
companies.
PAPER AND FOREST PRODUCTS PORTFOLIO invests primarily in companies
engaged in the manufacture, research, sale, or distribution of paper
products, packaging products, building materials (such as lumber and
paneling products), and other products related to the paper and forest
products industry.
5.PRECIOUS METALS AND MINERALS PORTFOLIO invests primarily in
companies engaged in exploration, mining, processing or dealing in
gold, silver, platinum, diamonds or other precious metals and
minerals.
REGIONAL BANKS PORTFOLIO invests primarily in companies engaged in
accepting deposits and making commercial and principally non-mortgage
consumer loans. With respect to 75% of total assets, the fund may not
purchase a security if, as a result, more than 5% would be invested in
the securities of any one issuer; and with respect to 100% of total
assets, the fund may not purchase more than 10% of the outstanding
voting securities of a single issuer. These limitations do not
apply to U.S. Government securities.
RETAILING PORTFOLIO invests primarily in companies engaged in
merchandising finished goods and services primarily to individual
consumers.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO invests primarily in
companies engaged in research, design, production or distribution of
products or processes that relate to software or information-based
services.
TECHNOLOGY PORTFOLIO invests primarily in companies which FMR believes
have, or will develop, products, processes or services that will
provide or will benefit significantly from technological advances and
improvements.
TELECOMMUNICATIONS PORTFOLIO invests primarily in companies engaged in
the development, manufacture, or sale of communications services or
communications equipment.
TRANSPORTATION PORTFOLIO invests primarily in companies engaged in
providing transportation services or companies engaged in the design,
manufacture, distribution, or sale of transportation equipment.
UTILITIES GROWTH PORTFOLIO invests primarily in companies in the
public utilities industry and companies deriving a majority of their
revenues from their public utility operations.
MONEY MARKET PORTFOLIO seeks to provide high current income,
consistent with preservation of capital and liquidity, by investing in
a broad range of high quality money market instruments. At all times,
80% or more of the fund's assets will be invested in money market
instruments. The fund will invest more than 25% of its total assets in
the financial services industry. The fund may borrow only for
temporary or emergency purposes, or engage in reverse repurchase
agreements, but not in an amount exceeding 33% of its total assets.
EACH STOCK FUND seeks capital appreciation.
With the exception of Business Services and Outsourcing, Cyclical
Industries, Medical Equipment and Systems, and Natural
Resources, each stock fund seeks to achieve its investment objective
by investing primarily in equity securities, including common stocks
and securities convertible into common stocks, and for American Gold
and Precious Metals and Minerals, in certain precious metals.
Normally, for each stock fund (except American Gold, Business Services
and Outsourcing, Cyclical Industries, Medical Equi pment and
Systems, Natural Resources, and Precious Metals and Minerals) at least
80%, and in no event less than 25%, of its assets will be invested in
securities of companies principally engaged in the business activities
identified for that fund. Normally at least 80% of American Gold's
assets will be invested in securities of North, Central and South
American companies engaged in gold-related activities, and in gold
bullion or coins. Under normal conditions, Precious Metals and
Minerals will invest at least 80% of its assets in (i) securities of
companies principally engaged in exploration, mining, processing, or
dealing in gold, silver, platinum, diamonds, or other precious metals
and minerals, and (ii) precious metals. Each of American Gold and
Precious Metals and Minerals invests at least 25% of its assets in
securities of companies principally engaged in the business activities
identified for the fund. Each of Business Services and Outsourcing,
Cyclical Industries , Medical Equipment and Systems, a nd Natural
Resources invests at least 25% of its total assets in securities of
companies principally engaged in the business activities identified
for the fund.
For the purposes of the policies for each stock fund (except Business
Services and Outsourcing, Cyclical Industries, Medical Equipment
and Systems , and Natural Resources), a company is considered to be
"principally engaged" in a designated business activity if at least
50% of its assets, gross income, or net profits are committed to, or
derived from, that activity. For Brokerage and Investment Management
and Financial Services, an issuer that derives more than 15% of
revenues or profits from brokerage or investment management activities
is considered to be principally engaged in the business activities
identified for those funds. For each stock fund (except Business
Services and Outsourcing, Cyclical Industries, Medical Equipment
and Systems, and Natural Resources), FMR does not pla ce any
emphasis on income when selecting securities, except when it believes
that income may have a favorable effect on a security's market value.
When FMR considers it appropriate for defensive purposes, each stock
fund (except Business Services and Outsourcing, Cyclical Industries,
Medical Equipme nt and Systems, and Natural Resources) may
temporarily invest substantially in investment-grade debt securities.
EACH STOCK FUND may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
Loans, in the aggregate, for each fund, may not exceed 33% of total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its
share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. Each fund also pays OTHER EXPENSES,
which are explained on page .
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
EACH STOCK FUND'S management fee is calculated and paid to FMR every
month. The fee is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying
the result by the respective fund's average net assets throughout
the month.
THE MONEY MARKET FUND'S management fee is calculated and paid to
FMR every month. The fee is calculated by adding a group fee rate to
an individual fund fee rate, dividing by twelve and multiplying the
result by the fund's average net assets throughout the month,
and then adding an income-based fee.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot use above 0.52% for each
stock fund or 0.37% for the money market fund, and it drops as total
assets under management increase.
For February 1998, the group fee rate for the stock funds was
0.2917%, and the group fee rate for the money market fund was 0.1357%.
The individual fund fee rate for each stock fund is 0.30%. The
individual fund fee rate for the money market fund is 0.03%. The
income-based fee for the money market fund is 6% of the fund's gross
income in excess of a 5% yield and cannot rise above 0.24% of the
fund's average net assets.
The total management fee for each fund, as a percentage of each
fund's average net assets for the fiscal year ended February 28, 1998,
is shown in the table on page .
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East on
behalf of each stock fund (except American Gold Portfolio). These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis.
FIMM is the money market fund's sub-adviser and has primary
responsibility for managing its investments. FMR is responsible for
providing other management services. FMR pays FIMM 50% of its
management fee (before expense reimbursements) for FIMM's services.
FMR paid FMR Texas Inc., the predecessor company to FIMM, a fee equal
to 0. 11 % of the money market fund's average net assets for the
fiscal year ended February 1998.
OTHER EXPENSES
While the management fee is a significant component of the funds'
annual operating costs, the funds have other expenses as well.
The funds contract with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valuing each
fund's investments, handling securities loans for the stock funds, and
calculating each fund's share price and dividends.
For the fiscal year ended February 1998, transfer agency and pricing
and bookkeeping fees paid (as a percentage of average net assets) are
shown on page . These amounts are before expense reductions, if
any .
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
For the fiscal year ended February 1998, the portfolio turnover rates
for each fund (except Business Services and Outsourcing, Medical
Equip m ent and Systems, and the money market fund) are shown in
t h e table on page . The annualized portfolio turnover
rate for Business S e rvices and Outsourcing was 36%. The
portfolio turnover rate for Medical Equipment and Systems is
not expected to exceed 200% for its first fiscal period. These
rates vary from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these
effects when evaluating the anticipated benefits of short-term
investing.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
6.Fund Management Fees Transfer Agency and Pricing and Portfolio Turnover Rate
Bookkeeping Fees Paid by Fund
Air Transportation 0.60% 1.10% 294%
American Gold 0.60% 0.89% 89%
Automotive 0.59% 0.91% 153%
Biotechnology 0.60% 0.86% 162%
Brokerage and Investment
Management 0.60% 0.71% 100%
Chemicals 0.60% 1.00% 31%
Computers 0.60% 0.76% 333%
Construction and
Housing 0.60% 1.64% 404%
Consumer Industries 0.61% 1.08% 199%
Cyclical Industries 0.59%A 2.49%A 140%A
Defense and
Aerospace 0.60% 1.02% 311%
Developing
Communications 0.60% 0.97% 383%
Electronics 0.60% 0.55% 435%
Energy 0.59% 0.92% 115%
Energy Service 0.59% 0.60% 78%
Environmental
Services 0.60% 1.42% 59%
Financial Services 0.60% 0.67% 84%
Food and
Agriculture 0.60% 0.85% 74%
Health Care 0.60% 0.56% 79%
Home Finance 0.60% 0.58% 54%
Industrial
Equipment 0.60% 0.96% 115%
Industrial
Materials 0.60% 1.19% 118%
Insurance 0.60% 0.76% 157%
Leisure 0.60% 0.75% 209%
Medical Delivery 0.60% 0.91% 109%
Multimedia 0.60% 1.00% 219%
Natural Gas 0.59% 1.13% 118%
Natural Resources 0.60%A 1.69%A 165%A
Paper and Forest
Products 0.60% 1.30% 235%
Precious Metals
and Minerals 0.60% 1.11% 84%
Regional Banks 0.60% 0.63% 25%
Retailing 0.60% 0.88% 308%
Software and Computer
Services 0.60% 0.81% 145%
Technology 0.60% 0.72% 556%
Telecommunications 0.60% 0.85% 157%
Transportation 0.59% 0.84% 210%
Utilities Growth 0.60% 0.68% 78%
Money Market 0.21% 0.26% n/a
</TABLE>
A ANNUALIZED
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a
leader in providing tax-advantaged retirement plans for individuals
investing on their own or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country and Fidelity's web site .
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over 80 walk-in Investor Centers across the country.
If you would prefer to access information on - line, you can
visit Fidelity's W eb site at www.fidelity.com .
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend
to purchase individual securities as part of your total investment
portfolio, you may consider investing in a fund through a brokerage
account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in a fund. Certain features of
a fund, such as the minimum initial or subsequent investment amounts,
may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, contact your employer, call your retirement
benefits number , visit Fidelity's Web site at www.fidelity.com,
or contact Fidelity directly, as appropriate.
FIDELITY FACTS
Fidelity offers the broadest selection of mutual funds in the world.
(solid bullet) Number of Fidelity mutual funds: over 223
(solid bullet) Assets in Fidelity mutual funds: over $ 568
billion
(solid bullet) Number of shareholder accounts: over 36 million
(solid bullet) Number of investment analysts and portfolio managers:
over 265
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free
growth. Retirement accounts require special applications and typically
have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow
individuals under 70 with compensation to contribute up to $2,000 per
tax year. Married couples can contribute $4,000 per tax year, provided
no more than $2,000 is contributed on behalf of either spouse. (These
limits are aggregated for traditional and Roth IRAs.) Contributions
may be tax-deductible, subject to certain limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can
contribute up to $4,000 per tax year, provided no more than $2,000 is
contributed on behalf of either spouse. (These limits are aggregated
for Traditional and Roth IRAs.) Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals to assets held
in a Traditional IRA or Rollover IRA to convert those assets to a Roth
Conversion IRA. Eligibility is subject to certain income limits.
Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored
retirement plans.
(solid bullet) PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
(KEOGHS) allow self-employed individuals or small business owners to
make tax-deductible contributions for themselves and any eligible
employees.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employment income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of
businesses with 25 or fewer employees to contribute a percentage of
their wages on a tax-deferred basis. These plans must have been
established by their employer prior to January 1, 1997.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of
501(c)(3) tax-exempt institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) 401(K) PROGRAMS allow employees of organizations of all
sizes to contribute a percentage of their wages on a tax-deferred
basis. These accounts need to be established by the trustee of the
plan.
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS) are available
to employees of most state and local governments and their agencies
and to employees of tax-exempt institutions.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS,
OR OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each fund is the fund's offering price
or the fund's net asset value per share (NAV), depending on whether
you pay a sales charge. The money market fund is managed to keep its
NAV stable at $1.00. If you pay a sales charge, your price will be the
fund's offering price. When you buy shares of a fund at the offering
price, Fidelity deducts the appropriate sales charge and invests the
rest in the fund. If you qualify for a sales charge waiver, your price
will be the fund's NAV. See "Sales Charge Reductions and Waivers,"
page , for an explanation of how and when the sales charge and
waivers apply.
Your shares will be purchased at the next offering price or NAV, as
applicable, calculated after your investment is received in proper
form. Each fund's offering price and NAV are normally calculated
hourly, each business day, from 10:00 a.m. to 4:00 p.m. Eastern time.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion,
they would disrupt management of a fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account
application and mail it along with your check. You may also open your
account in person or by wire as described on page . If there is no
application accompanying this prospectus, call 1-800-544-8888, or
visit Fidelity's Web site at www.fidelity.com for an application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-ADVANTAGED RETIREMENT PLAN, such as
an IRA, for the first time, you will need a special application.
Retirement investing also involves its own investment procedures. Call
1-800-544-8888 or visit Fidelity's Web site at www.fidelity.com
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
KEY INFORMATION
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PHONE 1-800-544-7777
(SOLID BULLET) TO OPEN AN ACCOUNT, EXCHANGE FROM
ANOTHER FIDELITY FUND ACCOUNT WITH THE SAME REGISTRATION, INCLUDING NAME,
ADDRESS, AND TAXPAYER ID NUMBER.
(SOLID BULLET) TO ADD TO AN ACCOUNT, EXCHANGE FROM ANOTHER FIDELITY
FUND ACCOUNT WITH THE SAME REGISTRATION, INCLUDING NAME, ADDRESS, AND TAXPAYER
ID NUMBER. YOU CAN ALSO USE
FIDELITY MONEY LINE TO TRANSFER FROM YOUR BANK ACCOUNT. CALL BEFORE YOUR FIRST
USE TO VERIFY THAT THIS SERVICE IS IN PLACE ON YOUR ACCOUNT. MAXIMUM MONEY LINE:
UP TO
$100,000
INTERNET WWW.FIDELITY.COM
(SOLID BULLET) TO OPEN AN ACCOUNT, COMPLETE AND SIGN THE APPLICATION. MAKE
YOUR CHECK PAYABLE TO THE COMPLETE NAME OF THE FUND. MAIL TO THE ADDRESS INDICATED
ON THE APPLICATION.
(SOLID BULLET) T O ADD TO AN ACCOUNT, EXCHANGE FROM ANOTHER FIDELITY FUND
ACCOUNT WITH THE SAME REGISTRATION, INCLUDING NAME, ADDRESS, AND TAXPAYER ID NUMBER.
YOU CAN ALSO USE FIDELITY
MONEY LINE TO TRANSFER FROM YOUR BANK ACCOUNT. VISIT FIDELITY'S WEB SITE BEFORE
YOUR FIRST USE TO VERIFY THAT THIS SERVICE IS IN PLACE ON YOUR ACCOUNT. MAXIMUM MONEY
LINE: UP TO
$100,000.
MAIL
(SOLID BULLET) T O OPEN AN ACCOUNT, COMPLETE AND SIGN THE APPLICATION. MAKE
YOUR CHECK PAYABLE TO FIDELITY SELECT PORTFOLIOS AND SPECIFY THE FUND YOU ARE
INVESTING IN ON THE APPLICATION. MAIL
TO THE ADDRESS INDICATED ON THE APPLICATION.
(SOLID BULLET) TO ADD TO AN ACCOUNT, MAKE YOUR CHECK PAYABLE TO THE COMPLETE
NAME OF THE FUND OF YOUR CHOICE. INDICATE YOUR FUND ACCOUNT NUMBER ON YOUR CHECK AND
MAIL TO THE
ADDRESS PRINTED ON YOUR ACCOUNT STATEMENT.
IN PERSON
(SOLID BULLET) TO OPEN AN ACCOUNT, BRING YOUR APPLICATION AND CHECK TO A
FIDELITY INVESTOR CENTER. CALL 1-800-544-9797 FOR THE CENTER NEAREST YOU.
(SOLID BULLET) TO ADD TO AN ACCOUNT, BRING YOUR CHECK TO A FIDELITY
INVESTOR CENTER. CALL 1-800-544-9797 FOR THE CENTER NEAREST YOU.
(SOLID BULLET) ORDERS WILL BE EXECUTED AT THE NEXT HOURLY PRICE DETERMINED
AFTER YOUR INVESTMENT IS RECEIVED IN PROPER FORM.
WIRE
NOT AVAILABLE FOR RETIREMENT ACCOUNTS.
(SOLID BULLET) TO OPEN AN ACCOUNT, CALL 1-800-544-7777 TO SET UP YOUR
ACCOUNT AND TO ARRANGE A WIRE TRANSACTION. WIRE WITHIN 24 HOURS TO THE WIRE
ADDRESS BELOW. SPECIFY THE
COMPLETE NAME OF THE FUND AND INCLUDE YOUR NEW ACCOUNT NUMBER AND YOUR NAME.
(SOLID BULLET) TO ADD TO AN ACCOUNT, WIRE TO THE WIRE ADDRESS BELOW.
SPECIFY THE COMPLETE NAME OF THE FUND AND INCLUDE YOUR ACCOUNT NUMBER AND YOUR
NAME.
(SOLID BULLET) WIRE ADDRESS: BANKERS TRUST COMPANY,
BANK ROUTING #021001033, ACCOUNT # 00163053.
AUTOMATICALLY
NEW ACCOUNTS CANNOT BE OPENED WITH THESE SERVICES.
(SOLID BULLET) USE FIDELITY AUTOMATIC ACCOUNT BUILDER OR DIRECT DEPOSIT
TO AUTOMATICALLY PURCHASE MORE SHARES. SIGN UP FOR THESE SERVICES WHEN OPENING
YOUR ACCOUNT, VISIT
FIDELITY'S WEB SITE AT WWW.FIDELITY.COM TO OBTAIN THE FORM TO ADD THESE
SERVICES, OR CALL 1-800-544-6666 TO ADD THESE SERVICES . DIRECT DEPOSIT
IS NOT AVAILABLE
FOR SELECT STOCK FUNDS OR FOR RETIREMENT ACCOUNTS.
(SOLID BULLET) USE DIRECTED DIVIDENDS OR FIDELITY AUTOMATIC EXCHANGE
SERVICE TO AUTOMATICALLY SEND MONEY FROM ONE FIDELITY FUND INTO ANOTHER. CALL
1-800-544-6666 FOR
INSTRUCTIONS.
</TABLE>
(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED:
1-800-544-0118
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accounts(double dagger) $500
TO ADD TO AN ACCOUNT $250
For certain Fidelity retirement accounts(double dagger) $250
Through regular investment plans* $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accounts(double dagger) $500
(double dagger)THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA,
ROTH IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. There is no minimum account balance or initial or
subsequent investment minimum for certain retirement accounts funded
through salary deduction, or accounts opened with the proceeds of
distributions from Fidelity retirement accounts. Refer to the program
materials for details.
UNDERSTANDING OFFERING PRICE
LET'S SAY YOU INVEST $2,500 AT AN OFFERING PRICE OF $10. OF THE $10
OFFERING PRICE, 3 .00 % ($ 0 .30) IS THE SALES CHARGE, AND
97% ($9.70) REPRESENTS THE NAV. THE VALUE OF YOUR INITIAL INVESTMENT
WILL BE
$2,425 (250 SHARES WORTH $9.70 EACH), AND YOU WILL HAVE PAID A SALES
CHARGE OF $75.
(CHECKMARK)
$2,500 INVESTMENT
ROW: 1, COL: 1, VALUE: 25.0
ROW: 1, COL: 2, VALUE: 75.0
ROW: 1, COL: 3, VALUE: 75.0
ROW: 1, COL: 4, VALUE: 75.0
ROW: 1, COL: 5, VALUE: 75.0
ROW: 1, COL: 6, VALUE: 75.0
ROW: 1, COL: 7, VALUE: 75.0
ROW: 1, COL: 8, VALUE: 75.0
ROW: 1, COL: 9, VALUE: 75.0
ROW: 1, COL: 10, VALUE: 75.0
ROW: 1, COL: 11, VALUE: 75.0
ROW: 1, COL: 12, VALUE: 75.0
ROW: 1, COL: 13, VALUE: 75.0
ROW: 1, COL: 14, VALUE: 75.0
ROW: 1, COL: 15, VALUE: 75.0
ROW: 1, COL: 16, VALUE: 75.0
ROW: 1, COL: 17, VALUE: 75.0
ROW: 1, COL: 18, VALUE: 75.0
ROW: 1, COL: 19, VALUE: 75.0
ROW: 1, COL: 20, VALUE: 75.0
ROW: 1, COL: 21, VALUE: 75.0
ROW: 1, COL: 22, VALUE: 75.0
ROW: 1, COL: 23, VALUE: 75.0
ROW: 1, COL: 24, VALUE: 75.0
ROW: 1, COL: 25, VALUE: 75.0
ROW: 1, COL: 26, VALUE: 75.0
ROW: 1, COL: 27, VALUE: 75.0
ROW: 1, COL: 28, VALUE: 75.0
ROW: 1, COL: 29, VALUE: 75.0
ROW: 1, COL: 30, VALUE: 75.0
ROW: 1, COL: 31, VALUE: 75.0
ROW: 1, COL: 32, VALUE: 75.0
ROW: 1, COL: 33, VALUE: 75.0
ROW: 1, COL: 34, VALUE: 75.0
3.00% SALES CHARGE = $75
VALUE OF INVESTMENT = $2,425
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of the money market fund is the fund's
NAV. The PRICE TO SELL ONE SHARE of each stock fund is the fund's NAV
minus the applicable trading fee. If you sell shares of a stock fund
after holding them 29 days or less, the fund will deduct a trading fee
equal to 0.75% of the value of those shares. If you sell shares of a
stock fund after holding them 30 days or more, the fund will deduct a
trading fee equal to the lesser of $7.50 or 0.75% of the value of
those shares. In addition, you may pay a $7.50 fee for each exchange
out of a stock fund.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the applicable trading fee. Each
fund's NAV is normally calculated hourly, each business day, from
10:00 a.m. to 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone , in writing , or through Fidelity's
Web site . Call 1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
FEES AND KEY INFORMATION
IF YOU SELL SHARES OF A STOCK FUND AFTER HOLDING THEM 29 DAYS OR LESS,
THE FUND WILL DEDUCT A TRADING FEE EQUAL TO 0.75% OF THE VALUE OF
THOSE SHARES. IF YOU SELL SHARES OF A STOCK FUND AFTER HOLDING THEM 30
DAYS OR MORE, THE FUND WILL DEDUCT A TRADING FEE EQUAL TO THE LESSER
OF $7.50 OR 0.75% OF THE VALUE OF THOSE SHARES . IN ADDITION,
YOU MAY PAY A $7.50 FEE FOR EACH EXCHANGE OUT OF A STOCK FUND.
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PHONE 1-800-544-7777
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
(SOLID BULLET) FOR MONEY LINE TRANSFERS TO YOUR BANK ACCOUNT; MINIMUM: $10; MAXIMUM: U P TO $100,000.
ALL ACCOUNT TYPES
(SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY FUNDS IF BOTH ACCOUNTS ARE REGISTERED WITH THE SAME
NAME(S), ADDRESS, AND TAXPAYER ID NUMBER.
MAIL OR IN PERSON
INDIVIDUAL, JOINT TENANT, SOLE PROPRIETORSHIP, UGMA, UTMA
(SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE SIGNED BY ALL PERSONS REQUIRED TO SIGN
FOR TRANSACTIONS, EXACTLY AS THEIR NAMES APPEAR ON THE ACCOUNT.
RETIREMENT ACCOUNT
(SOLID BULLET) THE ACCOUNT OWNER SHOULD COMPLETE A RETIREMENT DISTRIBUTION FORM. CALL
1-800-544-6666 TO REQUEST ONE.
TRUST
(SOLID BULLET) THE TRUSTEE MUST SIGN THE LETTER INDICATING CAPACITY AS TRUSTEE. IF
THE TRUSTEE'S NAME IS NOT IN THE ACCOUNT REGISTRATION, PROVIDE A COPY OF THE TRUST DOCUMENT
CERTIFIED WITHIN THE LAST 60 DAYS.
BUSINESS OR ORGANIZATION
(SOLID BULLET) AT LEAST ONE PERSON AUTHORIZED BY CORPORATE RESOLUTION TO ACT ON THE
ACCOUNT MUST SIGN THE LETTER.
(SOLID BULLET) INCLUDE A CORPORATE RESOLUTION WITH CORPORATE SEAL OR A SIGNATURE GUARANTEE.
EXECUTOR, ADMINISTRATOR, CONSERVATOR, GUARDIAN
(SOLID BULLET) CALL 1-800-544-6666 FOR INSTRUCTIONS.
WIRE
ALL ACCOUNT TYPES EXCEPT RETIREMENT
(SOLID BULLET) YOU MUST SIGN UP FOR THE WIRE FEATURE BEFORE USING IT. TO VERIFY THAT IT IS
IN PLACE, CALL 1-800-544-6666. MINIMUM WIRE: $5,000.
(SOLID BULLET) YOUR WIRE REDEMPTION REQUEST MUST BE RECEIVED IN PROPER FORM BY FIDELITY
BEFORE 4 :00 P.M. EASTERN TIME FOR MONEY TO BE WIRED ON THE NEXT BUSINESS DAY.
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(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING-IMPAIRED:
1-800-544-0118
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
FIDELITY'S WEB SITE at www.fidelity.com offers product and
servicing information, customer education, planning tools, and the
ability to make certain transactions in your account.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in our electronic
delivery program, call 1-800-544-6666 or visit Fidelity's Web site at
www.fidelity.com for more information.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774
TOUCHTONE XPRESSSM 1-800-544-5555
WEB SITE WWW.FIDELITY.COM
AUTOMATED SERVICE
(CHECKMARK)
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone , in writing, or through
Fidelity's Web site . The shares you exchange will carry credit for
any sales charge you previously paid in connection with their
purchase. You may pay a $7.50 fee for each exchange out of the stock
funds, unless you place your transaction through Fidelity's automated
exchange services. This fee would apply in addition to the trading fee
which you pay every time you sell your stock fund shares.
For exchanges made by mail or phone, orders are executed:
(small solid bullet) Between Select funds or from a Fidelity money
market fund generally at the next hourly price calculated after your
order is received in proper form.
(small solid bullet) From another Fidelity stock or bond fund,
generally at the 4:00 p.m. price calculated after your order is
received in proper form.
Note that exchanges between Select funds are unlimited, but exchanges
out of the Select funds to other Fidelity funds are limited to four
per calendar year. Exchanges may have tax consequences for you. For
details on policies and restrictions governing exchanges, including
circumstances under which a shareholder's exchange privilege may be
suspended or revoked, see "Exchange Restrictions," page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account. Because of the funds' sales charge, you may not want to
set up a systematic withdrawal plan during a period when you are
buying shares on a regular basis.
FIDELITY MONEY LINE(registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 or visit Fidelity's Web
site at www.fidelity.com for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE
SECTION ON THE FUND APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666
OR VISIT FIDELITY'S WEB SITE AT WWW.FIDELITY.COM FOR AN
APPLICATION.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR
INVESTMENT, CALL 1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO
YOUR NEXT SCHEDULED INVESTMENT DATE.
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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 EVERY PAY PERIOD (SMALL SOLID BULLET) NOT AVAILABLE FOR SELECT STOCK FUNDS OR RETIREMENT ACCOUNTS.
(SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
1-800-544-6666 OR VISIT FIDELITY'S WEB SITE AT
WWW.FIDELITY.COM FOR AN AUTHORIZATION FORM.
(SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.
</TABLE>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) Check the appropriate box on the fund application, or
call 1-800-544-6666 for an authorization form.
bimonthly, (small solid bullet) To change the amount or frequency of your investment, call 1-800-544-6666.
quarterly, or
annually
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each stock fund distributes substantially all of its net income and
capital gains to shareholders each year. Normally, dividends and
capital gains are distributed in April and December. Income dividends
for the money market fund are declared daily and paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. The stock funds
offer four options, and the money market fund offers three options.
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. (stock funds only) Your capital gain
distributions will be automatically reinvested, but you will be sent a
check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to the funds' 3.00% sales charge. If you
direct distributions to a fund with a 3.00% sales charge, you will not
pay a sales charge on those purchases.
For the stock funds, distributions will be reinvested, or deducted
from the share price, at 10:00 a.m. on the ex-dividend date.
Shareholders of record at 4:00 p.m. on the business day before the
ex-dividend will be entitled to receive the distribution. For the
money market fund, dividends will be reinvested at 4:00 p.m. on the
last day of the month. Cash distribution checks will be mailed within
seven days.
When a fund deducts a distribution from its NAV, the reinvestment
price is the fund's NAV at the close of business that day. Cash
distribution checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your stock fund redemptions - including
exchanges to other Fidelity funds - are subject to capital gains tax.
A capital gain or loss is the difference between the cost of your
shares and the price you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates each fund's NAV and offering
price hourly, from 10:00 a.m. to 4:00 p.m. Eastern time each business
day of the NYSE.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
Each stock fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Foreign securities are valued on
the basis of quotations from the primary market in which they are
traded, and are translated from the local currency into U.S. dollars
using current exchange rates. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
The money market fund's assets are valued on the basis of amortized
cost. This method minimizes the effect of changes in a security's
market value and helps the money market fund to maintain a stable
$1.00 share price.
THE OFFERING PRICE of each fund is its NAV divided by the difference
between one and the applicable sales charge percentage. The maximum
sales charge is 3.00% of the offering price.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next offering price or NAV, as applicable, calculated after
your investment is received in proper form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
its transfer agent has incurred.
(small solid bullet) If you do not specify a particular stock fund,
your investment will be made in the money market fund until FSC
receives instructions in proper form from you.
(small solid bullet) For the market fund, shares begin to earn
dividends on the first business day following the day of purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
FBSI ESTABLISHED A program permitting customers with Fidelity
brokerage accounts to sell short shares of certain Select stock funds.
FMR reserves the right to suspend the short selling program at any
time in the future.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements
with FDC may enter confirmed purchase orders on behalf of customers by
phone, with payment to follow no later than the time when a fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form,
minus the applicable trading fee for the stock funds. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) For the money market fund, shares earn dividends
through the date of redemption; however, shares redeemed on a Friday
or prior to a holiday will continue to earn dividends until the next
business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) Each fund may hold payment on redemptions until
it is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
A TRADING FEE of $7.50 or 0.75%, depending on how long you held your
shares, will be deducted from the redemption amount when you sell your
stock fund shares. For stock fund shares held 29 days or less, the
trading fee is equal to 0.75% of the redemption amount. For stock fund
shares held 30 days or more, the trading fee is equal to the lesser of
$7.50 or 0.75% of the redemption amount. The trading fee is paid to
the fund rather than Fidelity, and is designed to offset the brokerage
commissions, market impact, and other costs associated with
fluctuations in fund asset levels and cash flow caused by shareholder
trading.
The trading fee will be charged on exchanges out of a stock fund, in
addition to the exchange fee which you pay for each exchange out of a
stock fund unless you place your transaction through Fidelity's
automated exchange services. If you bought shares on different days,
the shares you held longest will be redeemed first for purposes of
determining the fund's trading fee. The trading fee does not apply to
shares that were acquired through reinvestment of distributions.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500 (including any
amount paid as a sales charge), subject to an annual maximum charge of
$24.00 per shareholder. It is expected that accounts will be valued on
the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part
the relatively higher costs of servicing smaller accounts. This fee
will not be deducted from Fidelity brokerage accounts, retirement
accounts (except non-prototype retirement accounts), accounts using
regular investment plans, or if total assets with Fidelity exceed
$30,000. Eligibility for the $30,000 waiver is determined by
aggregating Fidelity accounts maintained by FSC or FBSI which are
registered under the same social security number or which list the
same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV, minus
the applicable trading fee for the stock funds, on the day your
account is closed.
THE SELECT CASH RESERVES ACCOUNT no longer accepts new investments. If
you have an investment in this account, you may leave it there, redeem
your investment, or exchange your shares for shares of a Select fund
or another Fidelity fund. The 1.00% deferred sales charge will apply
to shares in the Select Cash Reserves Account redeemed or exchanged to
another Fidelity fund, since these shares were available for purchase
only when the 1.00% deferred sales charge was still in effect. If you
redeem by check from Select Cash Reserves, and the amount of the check
is greater than the value of your account, your check will be returned
to you and you may be subject to extra charges.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from each fund's 3.00% sales charge and may
pay a portion of them to securities dealers who have sold the fund's
shares, or to others, including banks and other financial institutions
(qualified recipients), under special arrangements in connection with
FDC's sales activities. The sales charge paid to qualified recipients
is 1.50% of the fund's offering price.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point difference between that fund's sales
charge and any sales charge you have previously paid in connection
with the shares you are exchanging. For example, if you had already
paid a sales charge of 2.00% on your shares and you exchange them into
a fund with a 3.00% sales charge, you would pay an additional 1.00%
sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Although there is no limit on the number of
exchanges you may make between the Select funds, the funds reserve the
right to enact limitations in the future. Because excessive trading
can hurt fund performance and shareholders, each fund reserves the
right to temporarily or permanently terminate the exchange privilege
of any investor who makes more than four exchanges out of the Select
funds to other Fidelity funds per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the
four exchange limit.
(small solid bullet) Each fund reserves the right to reject exchange
purchases in excess of 1.00% of its net assets or $1 million,
whichever is less. For purposes of this policy, accounts under common
ownership or control will be aggregated.
(small solid bullet) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
(small solid bullet) For cash management purposes, up to three
business days may pass before exchange proceeds are paid from one
Select fund to another, or to another Fidelity equity fund. Exchange
proceeds are recorded in your shareholder account when the transaction
occurs. Therefore, when you exchange from a stock fund to the money
market fund, you will earn money market dividends immediately. When
you exchange from the money market fund to a stock fund, you will not
earn money market dividends during the three business-day period. This
policy could increase the volatility of the money market fund's yield.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify the
exchange privilege in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up t o 3.00%
o f the amount exchanged. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. Each stock fund's sales charge may be reduced if you
invest directly with Fidelity or through prototype or prototype-like
retirement plans sponsored by FMR or FMR Corp. The amount you invest,
plus the value of your account, must fall within the ranges shown
below. Purchases made with assistance or intervention from a financial
intermediary are not eligible for sales charge reductions. Call
Fidelity to see if your purchase qualifies.
<TABLE>
<CAPTION>
<S> <C> <C>
Sales Charge
Ranges As a % of As an approximate % of net amount invested
Offering Price
$0 - 249,999 3.00% 3.09%
$250,000 - 499,999 2.00% 2.04%
$500,000 - 999,999 1.00% 1.01%
$1,000,000 or more none none
</TABLE>
The sales charge for the stock funds and the money market fund will
also be reduced by the percentage of any sales charge you previously
paid on investments in other Fidelity funds or by the percentage of
any sales charge you would have paid if the reductions in the table
above had not existed. These sales charge credits only apply to
purchases made in one of the ways listed below, and only if you
continuously owned Fidelity fund shares, maintained a Fidelity
brokerage core account, or participated in The CORPORATEplan for
Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a Fidelity brokerage core
account, including any free credit balance, core money market fund, or
margin availability, to the extent such proceeds were derived from
redemption proceeds from another Fidelity fund.
3. As a participant in The CORPORATEplan for Retirement Program when
shares are purchased through plan-qualified loan repayments, and for
exchanges into and out of the Managed Income Portfolio.
WAIVERS. A fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more
than 200 eligible employees or a minimum of $3 million in plan assets
invested in Fidelity mutual funds.
2. To shares in a Fidelity account purchased with the proceeds of a
distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan
that both qualified for waiver (1) above and had at least some of its
assets invested in Fidelity-managed products. (Distributions
transferred to an IRA account must be transferred within 60 days from
the date of the distribution. All other distributions must be
transferred directly into a Fidelity account).
3. If you are a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more.
4. If you purchase shares for a charitable remainder trust or life
income pool established for the benefit of a charitable organization
(as defined for purposes of Section 501(c)(3) of the Internal Revenue
Code).
5. If you are an investor participating in the Fidelity Trust
Portfolios program.
6. To shares purchased by a mutual fund or a qualified state
tuition program for whi ch FMR or an affiliate serves as investment
manager.
7. To shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services.
8. If you are a current or former trustee or officer of a Fidelity
fund or a current or retired officer, director, or regular employee of
FMR Corp. or Fidelity International Limited or their direct or
indirect subsidiaries (a Fidelity trustee or employee), the spouse of
a Fidelity trustee or employee, a Fidelity trustee or employee acting
as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity trustee or
employee.
9. If you are a bank trust officer, registered representative, or
other employee of a qualified recipient, as defined on page 12 .
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), and (5) is contained in the
Statement of Additional Information. A representative of your plan or
organization should call Fidelity for more information.
APPENDIX A
AIR TRANSPORTATION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
AIR TRANSPORTATION 29.07% 26.33% -18.18% 37.06% 6.57% 30.89% -21.74% 59.54% 1.25% 31.14%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 29.07
ROW: 2, COL: 1, VALUE: 26.33
ROW: 3, COL: 1, VALUE: -18.18
ROW: 4, COL: 1, VALUE: 37.06
ROW: 5, COL: 1, VALUE: 6.57
ROW: 6, COL: 1, VALUE: 30.89
ROW: 7, COL: 1, VALUE: -21.74
ROW: 8, COL: 1, VALUE: 59.54
ROW: 9, COL: 1, VALUE: 1.25
ROW: 10, COL: 1, VALUE: 31.14
(LARGE SOLID BOX) AIR TRANSPORTATION
AMERICAN GOLD
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
AMERICAN GOLD -12.45% 22.04% -17.20% -6.14% -3.09% 78.68% -15.46% 11.20% 19.92% -39.39%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -12.45
ROW: 2, COL: 1, VALUE: 22.04
ROW: 3, COL: 1, VALUE: -17.2
ROW: 4, COL: 1, VALUE: -6.14
ROW: 5, COL: 1, VALUE: -3.09
ROW: 6, COL: 1, VALUE: 78.67999999999999
ROW: 7, COL: 1, VALUE: -15.46
ROW: 8, COL: 1, VALUE: 11.2
ROW: 9, COL: 1, VALUE: 19.92
ROW: 10, COL: 1, VALUE: -39.39
(LARGE SOLID BOX) AMERICAN GOLD
AUTOMOTIVE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
AUTOMOTIVE 20.06% 4.10% -6.72% 37.33% 41.61% 35.38% -12.75% 13.43% 16.07% 16.78%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 20.06
ROW: 2, COL: 1, VALUE: 4.1
ROW: 3, COL: 1, VALUE: -6.72
ROW: 4, COL: 1, VALUE: 37.33
ROW: 5, COL: 1, VALUE: 41.61
ROW: 6, COL: 1, VALUE: 35.38
ROW: 7, COL: 1, VALUE: -12.75
ROW: 8, COL: 1, VALUE: 13.43
ROW: 9, COL: 1, VALUE: 16.07
ROW: 10, COL: 1, VALUE: 16.78
(LARGE SOLID BOX) AUTOMOTIVE
BIOTECHNOLOGY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
BIOTECHNOLOGY 4.12% 43.93% 44.35% 99.05% -10.34% 0.70% -18.18% 49.10% 5.61% 15.27%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 4.119999999999999
ROW: 2, COL: 1, VALUE: 43.93
ROW: 3, COL: 1, VALUE: 44.34999999999999
ROW: 4, COL: 1, VALUE: 99.05
ROW: 5, COL: 1, VALUE: -10.34
ROW: 6, COL: 1, VALUE: 0.7000000000000001
ROW: 7, COL: 1, VALUE: -18.18
ROW: 8, COL: 1, VALUE: 49.1
ROW: 9, COL: 1, VALUE: 5.609999999999999
ROW: 10, COL: 1, VALUE: 15.27
(LARGE SOLID BOX) BIOTECHNOLOGY
BROKERAGE AND INVESTMENT MANAGEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
BROKERAGE AND INVESTMENT MANAGEMENT 18.55% 14.06% -16.18% 82.26% 5.12% 49.33% -17.27% 23.59% 39.66% 62.32%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 18.55
ROW: 2, COL: 1, VALUE: 14.06
ROW: 3, COL: 1, VALUE: -16.18
ROW: 4, COL: 1, VALUE: 82.26000000000001
ROW: 5, COL: 1, VALUE: 5.119999999999999
ROW: 6, COL: 1, VALUE: 49.33
ROW: 7, COL: 1, VALUE: -17.27
ROW: 8, COL: 1, VALUE: 23.59
ROW: 9, COL: 1, VALUE: 39.66
ROW: 10, COL: 1, VALUE: 62.32
(LARGE SOLID BOX) BROKERAGE AND INVESTMENT
MANAGEMENT
CHEMICALS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
CHEMICALS 20.96% 17.31% -4.13% 38.66% 8.90% 12.76% 14.78% 21.45% 21.52% 16.48%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 20.96
ROW: 2, COL: 1, VALUE: 17.31
ROW: 3, COL: 1, VALUE: -4.13
ROW: 4, COL: 1, VALUE: 38.66
ROW: 5, COL: 1, VALUE: 8.9
ROW: 6, COL: 1, VALUE: 12.76
ROW: 7, COL: 1, VALUE: 14.78
ROW: 8, COL: 1, VALUE: 21.45
ROW: 9, COL: 1, VALUE: 21.52
ROW: 10, COL: 1, VALUE: 16.48
(LARGE SOLID BOX) CHEMICALS
COMPUTERS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
COMPUTERS -5.05% 6.84% 18.41% 30.75% 21.96% 28.87% 20.45% 51.83% 31.62% 0.10%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -5.05
ROW: 2, COL: 1, VALUE: 6.84
ROW: 3, COL: 1, VALUE: 18.41
ROW: 4, COL: 1, VALUE: 30.75
ROW: 5, COL: 1, VALUE: 21.96
ROW: 6, COL: 1, VALUE: 28.87
ROW: 7, COL: 1, VALUE: 20.45
ROW: 8, COL: 1, VALUE: 51.83
ROW: 9, COL: 1, VALUE: 31.62
ROW: 10, COL: 1, VALUE: 0.1
(LARGE SOLID BOX) COMPUTERS
CONSTRUCTION AND HOUSING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
CONSTRUCTION AND HOUSING 29.19% 16.60% -9.64% 41.31% 18.71% 33.61% -15.94% 28.78% 13.21% 29.83%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 29.19
ROW: 2, COL: 1, VALUE: 16.6
ROW: 3, COL: 1, VALUE: -9.639999999999999
ROW: 4, COL: 1, VALUE: 41.31
ROW: 5, COL: 1, VALUE: 18.71
ROW: 6, COL: 1, VALUE: 33.61
ROW: 7, COL: 1, VALUE: -15.94
ROW: 8, COL: 1, VALUE: 28.78
ROW: 9, COL: 1, VALUE: 13.21
ROW: 10, COL: 1, VALUE: 29.83
(LARGE SOLID BOX) CONSTRUCTION AND HOUSING
CONSUMER INDUSTRIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1991 1992 1993 1994 1995 1996 1997
CONSUMER INDUSTRIES 38.53% 8.56% 24.67% -7.07% 28.30% 13.15% 38.06%
S&P 500 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 38.53
ROW: 5, COL: 1, VALUE: 8.560000000000001
ROW: 6, COL: 1, VALUE: 24.67
ROW: 7, COL: 1, VALUE: -7.07
ROW: 8, COL: 1, VALUE: 28.3
ROW: 9, COL: 1, VALUE: 13.15
ROW: 10, COL: 1, VALUE: 38.06
(LARGE SOLID BOX) CONSUMER INDUSTRIES
DEFENSE AND AEROSPACE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
DEFENSE AND AEROSPACE 4.32% 8.81% -4.58% 26.93% 0.00% 28.86% 1.76% 47.36% 25.03% 23.57%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 4.319999999999999
ROW: 2, COL: 1, VALUE: 8.810000000000001
ROW: 3, COL: 1, VALUE: -4.58
ROW: 4, COL: 1, VALUE: 26.93
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 28.86
ROW: 7, COL: 1, VALUE: 1.76
ROW: 8, COL: 1, VALUE: 47.36
ROW: 9, COL: 1, VALUE: 25.03
ROW: 10, COL: 1, VALUE: 23.57
(LARGE SOLID BOX) DEFENSE AND AEROSPACE
DEVELOPING COMMUNICATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1991 1992 1993 1994 1995 1996 1997
DEVELOPING COMMUNICATIONS 61.39% 17.21% 31.77% 15.14% 17.37% 14.55% 6.04%
S&P 500 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 61.39
ROW: 5, COL: 1, VALUE: 17.21
ROW: 6, COL: 1, VALUE: 31.77
ROW: 7, COL: 1, VALUE: 15.14
ROW: 8, COL: 1, VALUE: 17.37
ROW: 9, COL: 1, VALUE: 14.55
ROW: 10, COL: 1, VALUE: 6.04
(LARGE SOLID BOX) DEVELOPING COMMUNICATIONS
ELECTRONICS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
ELECTRONICS -8.47% 15.67% 5.81% 35.29% 27.44% 32.08% 17.17% 68.97% 41.72% 13.72%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -8.470000000000001
ROW: 2, COL: 1, VALUE: 15.67
ROW: 3, COL: 1, VALUE: 5.81
ROW: 4, COL: 1, VALUE: 35.29000000000001
ROW: 5, COL: 1, VALUE: 27.44
ROW: 6, COL: 1, VALUE: 32.08
ROW: 7, COL: 1, VALUE: 17.17
ROW: 8, COL: 1, VALUE: 68.97
ROW: 9, COL: 1, VALUE: 41.72000000000001
ROW: 10, COL: 1, VALUE: 13.72
(LARGE SOLID BOX) ELECTRONICS
ENERGY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
ENERGY 15.94% 42.83% -4.49% 0.04% -2.39% 19.15% 0.41% 21.38% 32.47% 10.28%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 15.94
ROW: 2, COL: 1, VALUE: 42.83
ROW: 3, COL: 1, VALUE: -4.49
ROW: 4, COL: 1, VALUE: 0.04000000000000001
ROW: 5, COL: 1, VALUE: -2.39
ROW: 6, COL: 1, VALUE: 19.15
ROW: 7, COL: 1, VALUE: 0.41
ROW: 8, COL: 1, VALUE: 21.38
ROW: 9, COL: 1, VALUE: 32.47
ROW: 10, COL: 1, VALUE: 10.28
(LARGE SOLID BOX) ENERGY
ENERGY SERVICE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
ENERGY SERVICE -0.40% 59.44% 1.75% -23.48% 3.43% 20.96% 0.57% 40.87% 49.08% 51.87%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -0.4
ROW: 2, COL: 1, VALUE: 59.44
ROW: 3, COL: 1, VALUE: 1.75
ROW: 4, COL: 1, VALUE: -23.48
ROW: 5, COL: 1, VALUE: 3.43
ROW: 6, COL: 1, VALUE: 20.96
ROW: 7, COL: 1, VALUE: 0.5700000000000001
ROW: 8, COL: 1, VALUE: 40.87
ROW: 9, COL: 1, VALUE: 49.08
ROW: 10, COL: 1, VALUE: 51.87
(LARGE SOLID BOX) ENERGY SERVICE
ENVIRONMENTAL SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1990 1991 1992 1993 1994 1995 1996 1997
ENVIRONMENTAL SERVICES -2.48% 7.66% -1.37% -0.62% -9.55% 26.13% 15.61% 17.87%
S&P 500 -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: -2.48
ROW: 4, COL: 1, VALUE: 7.659999999999999
ROW: 5, COL: 1, VALUE: -1.37
ROW: 6, COL: 1, VALUE: -0.6200000000000001
ROW: 7, COL: 1, VALUE: -9.550000000000001
ROW: 8, COL: 1, VALUE: 26.13
ROW: 9, COL: 1, VALUE: 15.61
ROW: 10, COL: 1, VALUE: 17.87
(LARGE SOLID BOX) ENVIRONMENTAL SERVICES
FINANCIAL SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
FINANCIAL SERVICES 12.01% 19.34% -24.33% 61.63% 42.82% 17.55% -3.65% 47.34% 32.12% 41.98%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 12.01
ROW: 2, COL: 1, VALUE: 19.34
ROW: 3, COL: 1, VALUE: -24.33
ROW: 4, COL: 1, VALUE: 61.63
ROW: 5, COL: 1, VALUE: 42.82
ROW: 6, COL: 1, VALUE: 17.55
ROW: 7, COL: 1, VALUE: -3.65
ROW: 8, COL: 1, VALUE: 47.34
ROW: 9, COL: 1, VALUE: 32.12000000000001
ROW: 10, COL: 1, VALUE: 41.98
(LARGE SOLID BOX) FINANCIAL SERVICES
FOOD AND AGRICULTURE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
FOOD AND AGRICULTURE 26.77% 38.87% 9.33% 34.09% 6.03% 8.82% 6.09% 36.64% 13.35% 30.34%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 26.77
ROW: 2, COL: 1, VALUE: 38.87
ROW: 3, COL: 1, VALUE: 9.33
ROW: 4, COL: 1, VALUE: 34.09
ROW: 5, COL: 1, VALUE: 6.03
ROW: 6, COL: 1, VALUE: 8.82
ROW: 7, COL: 1, VALUE: 6.09
ROW: 8, COL: 1, VALUE: 36.64
ROW: 9, COL: 1, VALUE: 13.35
ROW: 10, COL: 1, VALUE: 30.34
(LARGE SOLID BOX) FOOD AND AGRICULTURE
HEALTH CARE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
HEALTH CARE 8.83% 42.49% 24.32% 83.69% -17.43% 2.42% 21.46% 45.86% 15.46% 31.15%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 8.83
ROW: 2, COL: 1, VALUE: 42.49
ROW: 3, COL: 1, VALUE: 24.32
ROW: 4, COL: 1, VALUE: 83.69
ROW: 5, COL: 1, VALUE: -17.43
ROW: 6, COL: 1, VALUE: 2.42
ROW: 7, COL: 1, VALUE: 21.46
ROW: 8, COL: 1, VALUE: 45.86
ROW: 9, COL: 1, VALUE: 15.46
ROW: 10, COL: 1, VALUE: 31.15
(LARGE SOLID BOX) HEALTH CARE
HOME FINANCE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
HOME FINANCE 18.50% 9.33% -15.08% 64.61% 57.85% 27.29% 2.68% 53.49% 36.88% 45.75%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 18.5
ROW: 2, COL: 1, VALUE: 9.33
ROW: 3, COL: 1, VALUE: -15.08
ROW: 4, COL: 1, VALUE: 64.61
ROW: 5, COL: 1, VALUE: 57.84999999999999
ROW: 6, COL: 1, VALUE: 27.29
ROW: 7, COL: 1, VALUE: 2.68
ROW: 8, COL: 1, VALUE: 53.49
ROW: 9, COL: 1, VALUE: 36.88
ROW: 10, COL: 1, VALUE: 45.75
(LARGE SOLID BOX) HOME FINANCE
INDUSTRIAL EQUIPMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
INDUSTRIAL EQUIPMENT 4.89% 17.95% -15.51% 26.84% 11.34% 43.33% 3.13% 27.81% 26.71% 18.55%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 4.89
ROW: 2, COL: 1, VALUE: 17.95
ROW: 3, COL: 1, VALUE: -15.51
ROW: 4, COL: 1, VALUE: 26.84
ROW: 5, COL: 1, VALUE: 11.34
ROW: 6, COL: 1, VALUE: 43.33
ROW: 7, COL: 1, VALUE: 3.13
ROW: 8, COL: 1, VALUE: 27.81
ROW: 9, COL: 1, VALUE: 26.71
ROW: 10, COL: 1, VALUE: 18.55
(LARGE SOLID BOX) INDUSTRIAL EQUIPMENT
INDUSTRIAL MATERIALS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
INDUSTRIAL MATERIALS 10.84% 4.45% -17.17% 35.81% 12.37% 21.38% 8.19% 15.39% 14.01% 1.75%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 10.84
ROW: 2, COL: 1, VALUE: 4.45
ROW: 3, COL: 1, VALUE: -17.17
ROW: 4, COL: 1, VALUE: 35.81
ROW: 5, COL: 1, VALUE: 12.37
ROW: 6, COL: 1, VALUE: 21.38
ROW: 7, COL: 1, VALUE: 8.19
ROW: 8, COL: 1, VALUE: 15.39
ROW: 9, COL: 1, VALUE: 14.01
ROW: 10, COL: 1, VALUE: 1.75
(LARGE SOLID BOX) INDUSTRIAL MATERIALS
INSURANCE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
INSURANCE 17.40% 37.83% -9.81% 36.68% 22.50% 8.18% -0.35% 34.81% 23.71% 42.47%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 17.4
ROW: 2, COL: 1, VALUE: 37.83
ROW: 3, COL: 1, VALUE: -9.810000000000001
ROW: 4, COL: 1, VALUE: 36.68
ROW: 5, COL: 1, VALUE: 22.5
ROW: 6, COL: 1, VALUE: 8.18
ROW: 7, COL: 1, VALUE: -0.35
ROW: 8, COL: 1, VALUE: 34.81
ROW: 9, COL: 1, VALUE: 23.71
ROW: 10, COL: 1, VALUE: 42.47
(LARGE SOLID BOX) INSURANCE
LEISURE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
LEISURE 26.01% 31.21% -22.29% 32.94% 16.23% 39.55% -6.84% 26.96% 13.41% 41.29%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 26.01
ROW: 2, COL: 1, VALUE: 31.21
ROW: 3, COL: 1, VALUE: -22.29
ROW: 4, COL: 1, VALUE: 32.94
ROW: 5, COL: 1, VALUE: 16.23
ROW: 6, COL: 1, VALUE: 39.55
ROW: 7, COL: 1, VALUE: -6.84
ROW: 8, COL: 1, VALUE: 26.96
ROW: 9, COL: 1, VALUE: 13.41
ROW: 10, COL: 1, VALUE: 41.29000000000001
(LARGE SOLID BOX) LEISURE
MEDICAL DELIVERY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
MEDICAL DELIVERY 15.78% 58.02% 16.26% 77.83% -13.19% 5.52% 19.84% 32.18% 11.00% 20.14%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 15.78
ROW: 2, COL: 1, VALUE: 58.02
ROW: 3, COL: 1, VALUE: 16.26
ROW: 4, COL: 1, VALUE: 77.83
ROW: 5, COL: 1, VALUE: -13.19
ROW: 6, COL: 1, VALUE: 5.52
ROW: 7, COL: 1, VALUE: 19.84
ROW: 8, COL: 1, VALUE: 32.18
ROW: 9, COL: 1, VALUE: 11.0
ROW: 10, COL: 1, VALUE: 20.14
(LARGE SOLID BOX) MEDICAL DELIVERY
MULTIMEDIA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
MULTIMEDIA 26.85% 32.54% -26.21% 37.85% 21.50% 38.02% 4.00% 33.67% 1.07% 30.93%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 26.85
ROW: 2, COL: 1, VALUE: 32.54
ROW: 3, COL: 1, VALUE: -26.21
ROW: 4, COL: 1, VALUE: 37.84999999999999
ROW: 5, COL: 1, VALUE: 21.5
ROW: 6, COL: 1, VALUE: 38.02
ROW: 7, COL: 1, VALUE: 4.0
ROW: 8, COL: 1, VALUE: 33.67
ROW: 9, COL: 1, VALUE: 1.07
ROW: 10, COL: 1, VALUE: 30.93
(LARGE SOLID BOX) MULTIMEDIA
NATURAL GAS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1994 1995 1996 1997
NATURAL GAS -6.84% 30.38% 34.32% -8.06%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: -6.84
ROW: 8, COL: 1, VALUE: 30.38
ROW: 9, COL: 1, VALUE: 34.32
ROW: 10, COL: 1, VALUE: -8.060000000000001
(LARGE SOLID BOX) NATURAL GAS
PAPER AND FOREST PRODUCTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
PAPER AND FOREST PRODUCTS 6.77% 4.08% -15.11% 34.77% 12.05% 18.55% 14.14% 21.91% 7.07% 9.35%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 6.770000000000001
ROW: 2, COL: 1, VALUE: 4.08
ROW: 3, COL: 1, VALUE: -15.11
ROW: 4, COL: 1, VALUE: 34.77
ROW: 5, COL: 1, VALUE: 12.05
ROW: 6, COL: 1, VALUE: 18.55
ROW: 7, COL: 1, VALUE: 14.14
ROW: 8, COL: 1, VALUE: 21.91
ROW: 9, COL: 1, VALUE: 7.07
ROW: 10, COL: 1, VALUE: 9.350000000000001
(LARGE SOLID BOX) PAPER AND FOREST PRODUCTS
PRECIOUS METALS AND MINERALS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
PRECIOUS METALS AND MINERALS -23.86% 32.16% -21.07% 1.54% -21.87% 111.62% -1.14% -3.34% 5.42% -44.89%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -23.86
ROW: 2, COL: 1, VALUE: 32.16
ROW: 3, COL: 1, VALUE: -21.07
ROW: 4, COL: 1, VALUE: 1.54
ROW: 5, COL: 1, VALUE: -21.87
ROW: 6, COL: 1, VALUE: 111.62
ROW: 7, COL: 1, VALUE: -1.14
ROW: 8, COL: 1, VALUE: -3.34
ROW: 9, COL: 1, VALUE: 5.42
ROW: 10, COL: 1, VALUE: -44.89
(LARGE SOLID BOX) PRECIOUS METALS AND MINERALS
REGIONAL BANKS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
REGIONAL BANKS 25.71% 26.65% -20.67% 65.79% 48.52% 11.17% 0.22% 46.77% 35.89% 45.56%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 25.71
ROW: 2, COL: 1, VALUE: 26.65
ROW: 3, COL: 1, VALUE: -20.67
ROW: 4, COL: 1, VALUE: 65.79000000000001
ROW: 5, COL: 1, VALUE: 48.52
ROW: 6, COL: 1, VALUE: 11.17
ROW: 7, COL: 1, VALUE: 0.22
ROW: 8, COL: 1, VALUE: 46.77
ROW: 9, COL: 1, VALUE: 35.89
ROW: 10, COL: 1, VALUE: 45.56
(LARGE SOLID BOX) REGIONAL BANKS
RETAILING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
RETAILING 38.71% 29.53% -5.03% 68.13% 22.08% 13.03% -5.01% 11.98% 20.86% 41.73%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 38.71
ROW: 2, COL: 1, VALUE: 29.53
ROW: 3, COL: 1, VALUE: -5.03
ROW: 4, COL: 1, VALUE: 68.13
ROW: 5, COL: 1, VALUE: 22.08
ROW: 6, COL: 1, VALUE: 13.03
ROW: 7, COL: 1, VALUE: -5.01
ROW: 8, COL: 1, VALUE: 11.98
ROW: 9, COL: 1, VALUE: 20.86
ROW: 10, COL: 1, VALUE: 41.73
(LARGE SOLID BOX) RETAILING
SOFTWARE AND COMPUTER SERVICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
SOFTWARE AND COMPUTER SERVICES 9.05% 12.05% 0.86% 45.84% 35.54% 32.73% 0.39% 46.26% 21.77% 15.01%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 9.050000000000001
ROW: 2, COL: 1, VALUE: 12.05
ROW: 3, COL: 1, VALUE: 0.8600000000000001
ROW: 4, COL: 1, VALUE: 45.84
ROW: 5, COL: 1, VALUE: 35.54
ROW: 6, COL: 1, VALUE: 32.73
ROW: 7, COL: 1, VALUE: 0.3900000000000001
ROW: 8, COL: 1, VALUE: 46.26000000000001
ROW: 9, COL: 1, VALUE: 21.77
ROW: 10, COL: 1, VALUE: 15.01
(LARGE SOLID BOX) SOFTWARE AND COMPUTER
SERVICES
TECHNOLOGY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
TECHNOLOGY -2.70% 16.99% 10.50% 58.97% 8.72% 28.65% 11.13% 43.81% 15.82% 10.33%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -2.7
ROW: 2, COL: 1, VALUE: 16.99
ROW: 3, COL: 1, VALUE: 10.5
ROW: 4, COL: 1, VALUE: 58.97
ROW: 5, COL: 1, VALUE: 8.719999999999999
ROW: 6, COL: 1, VALUE: 28.65
ROW: 7, COL: 1, VALUE: 11.13
ROW: 8, COL: 1, VALUE: 43.81
ROW: 9, COL: 1, VALUE: 15.82
ROW: 10, COL: 1, VALUE: 10.33
(LARGE SOLID BOX) TECHNOLOGY
TELECOMMUNICATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
TELECOMMUNICATIONS 27.76% 50.88% -16.40% 30.85% 15.32% 29.72% 4.32% 29.66% 5.40% 25.83%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 27.76
ROW: 2, COL: 1, VALUE: 50.88
ROW: 3, COL: 1, VALUE: -16.4
ROW: 4, COL: 1, VALUE: 30.85
ROW: 5, COL: 1, VALUE: 15.32
ROW: 6, COL: 1, VALUE: 29.72
ROW: 7, COL: 1, VALUE: 4.319999999999999
ROW: 8, COL: 1, VALUE: 29.66
ROW: 9, COL: 1, VALUE: 5.4
ROW: 10, COL: 1, VALUE: 25.83
(LARGE SOLID BOX) TELECOMMUNICATIONS
TRANSPORTATION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
TRANSPORTATION 38.45% 28.49% -21.59% 54.14% 23.79% 29.32% 3.87% 15.17% 9.50% 32.13%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 38.45
ROW: 2, COL: 1, VALUE: 28.49
ROW: 3, COL: 1, VALUE: -21.59
ROW: 4, COL: 1, VALUE: 54.14
ROW: 5, COL: 1, VALUE: 23.79
ROW: 6, COL: 1, VALUE: 29.32
ROW: 7, COL: 1, VALUE: 3.87
ROW: 8, COL: 1, VALUE: 15.17
ROW: 9, COL: 1, VALUE: 9.5
ROW: 10, COL: 1, VALUE: 32.13
(LARGE SOLID BOX) TRANSPORTATION
UTILITIES GROWTH
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
UTILITIES GROWTH 16.46% 39.02% 0.55% 21.03% 10.59% 12.54% -7.41% 34.39% 11.37% 30.31%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: 16.46
Row: 2, Col: 1, Value: 39.02
Row: 3, Col: 1, Value: 0.55
Row: 4, Col: 1, Value: 21.03
Row: 5, Col: 1, Value: 10.59
Row: 6, Col: 1, Value: 12.54
Row: 7, Col: 1, Value: -7.41
Row: 8, Col: 1, Value: 34.39
Row: 9, Col: 1, Value: 11.37
Row: 10, Col: 1, Value: 30.31
(LARGE SOLID BOX) UTILITIES GROWTH
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY SELECT PORTFOLIOS(registered trademark)
STATEMENT OF ADDITIONAL INFORMATION
APRIL 28, 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus
(dated April 28, 1998). Please retain this document for future
reference. The funds' Annual R eport is a separate document
supplied with this SAI. To obtain a free additional copy of the
Prospectus or an Annual Report, please call Fidelity at
1-800-544-8888.
TABLE OF CONTENTS PAGE
INVESTMENT POLICIES AND LIMITATIONS 2
PORTFOLIO TRANSACTIONS 15
VALUATION 24
PERFORMANCE 24
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION 65
DISTRIBUTIONS AND TAXES 66
FMR 68
TRUSTEES AND OFFICERS 68
MANAGEMENT CONTRACTS 73
CONTRACTS WITH FMR AFFILIATES 86
DESCRIPTION OF THE TRUST 93
FINANCIAL STATEMENTS 94
APPENDIX 95
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)(stock funds)
Fidelity Management & Research (Far East) Inc. (FMR Far East)(stock
funds)
Fidelity Investments Money Management, Inc. (FIMM) (money market fund)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
SEL-ptb-0498
1.702309
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act) ) of the fund. However, except for the fundamental
investment limitations listed below, the investment policies and
limitations described in this SAI are not fundamental and may be
changed without shareholder approval.
INVESTMENT LIMITATIONS OF EACH STOCK FUND (EXCEPT BUSINESS SERVICES
AND OUTSOURCING PORTFOLIO, CYCLICAL INDUSTRIES PORTFOLIO, MEDICAL
EQUIPMENT AND SYSTEMS PORTFOLIO, AND NATURAL RESOURCES PORTFOLIO)
THE FOLLOWING ARE THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. A FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that a fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to
exceed this amount will be reduced within three days ( not including
Sundays and holidays) to the extent necessary to comply with the 33%
limitation;
(3) underwrite securities issued by others, except to the extent that
a fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase or sell the securities of any issuer, if, as a result of
such purchase or sale, less than 25% of the assets of the fund would
be invested in the securities of issuers principally engaged in the
business activities having the specific characteristics denoted by the
fund;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent a fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent a fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities). This limitation does not apply to Precious
Metals and Minerals Portfolio or to American Gold Portfolio (see
below); or
(7) lend any security or make any other loan if, as a result, more
than 33% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies, and limitations as
the fund.
ADDITIONAL FUNDAMENTAL INVESTMENT LIMITATIONS OF CERTAIN OF THE STOCK
FUNDS.
AMERICAN GOLD PORTFOLIO AND PRECIOUS METALS AND MINERALS PORTFOLIO MAY
NOT:
(1) purchase any precious metal if, as a result, more than 50% of its
total assets would be invested in precious metals; or
(2) purchase or sell physical commodities, provided that the fund may
purchase and sell precious metals, and further provided that the fund
may sell physical commodities acquired as a result of ownership of
securities. The fund may not purchase or sell options, options on
futures contracts, or futures contracts on physical commodities other
than precious metals.
FINANCIAL SERVICES PORTFOLIO, REGIONAL BANKS PORTFOLIO, AND HOME
FINANCE PORTFOLIO MAY NOT:
(1) with respect to 75% of total assets, purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) if, as a
result, more than 5% of its total assets would be invested in the
securities of that issuer;
(2) purchase the securities of any issuer (except securities issued or
guaranteed by the United States government or its agencies or
instrumentalities) if, as a result, more than 10% of the outstanding
voting securities of that issuer would be owned by the fund.
THE FOLLOWING ARE NON-FUNDAMENTAL LIMITATIONS FOR EACH STOCK
FUND (EXCEPT BUSINESS SERVICES AND OUTSOURCING PORTFOLIO, CYCLICAL
INDUSTRIES PORTFOLIO, MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO,
AND NATURAL RESOURCES PORTFOLIO) , WHICH MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) For each fund, in order to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as
amended, the fund currently intends to comply with certain
diversification limits imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that a fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund does not currently intend to hedge more than 40% of its
total assets with short sales against the box under normal conditions.
(v) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2) for all stock funds). Each fund will not borrow from
other funds advised by FMR or its affiliates if total outstanding
borrowings immediately after such borrowing would exceed 15% of the
fund's total assets.
(vi) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except (a) by lending money (up to 5% of
a fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser, or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(viii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objectives,
policies, and limitations as the funds.
For purposes of limitation (i), Subchapter M generally requires a fund
to invest no more than 25% of its total assets in securities of any
one issuer and to invest at least 50% of its total assets so that no
more than 5% of the fund's total assets are invested in securities of
any one issuer. However, Subchapter M allows unlimited investments in
cash, cash items, government securities (as defined in Subchapter M)
and securities of other investment companies. These tax requirements
are generally applied at the end of each quarter of the fund's taxable
year.
With respect to limitation (vi), if through a change in values, net
assets, or other circumstances, a fund were in a position where more
than 10% of its assets was invested in illiquid securities, it would
consider appropriate steps to protect liquidity.
For the funds ' limitations on futures and options
transactions, see the section entitled "Limitations Futures and
O ptions Transactions" on page .
INVESTMENT LIMITATIONS OF BUSINESS SERVICES AND OUTSOURCING
PORTFOLIO, CYCLICAL INDUSTRIES PORTFOLIO, MEDICAL EQUIPMENT AND
SYSTEMS PORTFOLIO, AND NATURAL RESOURCES PORTFOLIO
THE FOLLOWING ARE THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. A FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33% of its total assets (including the amount borrowed)
less liabilities (other than borrowings). Any borrowings that come to
exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33%
limitation;
(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer if, as a result, less than
25% of the fund's total assets would be invested in the securities of
issuers principally engaged in the business activities having the
specific characteristics denoted by the fund;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities). This limitation does not apply to Natural
Resources Portfolio (see below); or
(7) lend any security or make any other loan if, as a result, more
than 33% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
NATURAL RESOURCES PORTFOLIO MAY NOT:
(1) purchase or sell physical commodities other than precious metals,
provided that the fund may sell physical commodities acquired as a
result of ownership of securities or other instruments. This
limitation shall not prevent the fund from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities.
THE FOLLOWING ARE NON-FUNDAMENTAL LIMITS FOR BUSINESS SERVICES
AND OUTSOURCING PORTFOLIO, CYCLICAL INDUSTRIES PORTFOLIO, MEDICAL
EQUIPMENT AND SYSTEMS PORTFOLIO, AND NATURAL RESOURCES
PORTFOLIO , WHICH MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) For each fund, in order to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as
amended, the fund currently intends to comply with certain
diversification limits imposed by Subchapter M.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund does not currently intend to hedge more than 40% of its
total assets with short sales against the box under normal conditions.
(v) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)). The fund will not borrow from other funds advised by
FMR or its affiliates if total outstanding borrowings immediately
after such borrowing would exceed 15% of the fund's total assets.
(vi) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment company or portfolio
for which Fidelity Management & Research Company or an affiliate
serves as investment adviser, or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in
connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(viii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires a fund
to invest no more than 25% of its total assets in securities of any
one issuer and to invest at least 50% of its total assets so that no
more than 5% of a fund's total assets are invested in securities of
any one issuer. However, Subchapter M allows unlimited investments in
cash, cash items, government securities (as defined in Subchapter M)
and securities of other investment companies. These tax requirements
are generally applied at the end of each quarter of a fund's taxable
year.
With respect to the limitation (vi), if through a change in values,
net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets was invested in illiquid securities,
it would consider appropriate steps to protect liquidity.
For the funds' limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
INVESTMENT LIMITATIONS OF SELECT MONEY MARKET PORTFOLIO (MONEY MARKET
FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer.
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33% of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
the fund will invest more than 25% of its total assets in the
financial services industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more
than 33% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements; or
(9) invest in companies for the purpose of exercising control or
management.
(10) In addition the fund may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies,
and limitations as the fund.
THE FOLLOWING ARE THE FUND'S NON-FUNDAMENTAL LIMITATIONS WHICH MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other
than a security issued or guaranteed by the U.S. Government or any of
its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of a single
issuer; provided that the fund may invest up to 25% of its total
assets in the first tier securities of a single issuer for up to three
business days. (This limit does not apply to investments of up to 25%
of total assets in securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the SEC).
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party. The fund will not borrow from
other funds advised by FMR or its affiliates if total outstanding
borrowings immediately after such borrowing would exceed 15% of the
fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to purchase physical
commodities or purchase or sell futures contracts based on physical
commodities.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This
limitation does not apply to purchases of debt securities or to
repurchase agreements.)
(viii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the money market fund's policies on quality and maturity, see the
section entitled "Quality and Maturity" on page .
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO AND FINANCIAL SERVICES
PORTFOLIO. Rule 12d3-1 under the 1940 Act allows investment portfolios
such as these funds to invest in companies engaged in
securities-related activities subject to certain conditions. Purchases
of securities of a company that derived 15% or less of gross revenues
during its most recent fiscal year from securities-related activities
(i.e., broker/dealer, underwriting, or investment advisory activities)
are subject only to the same percentage limitations as would apply to
any other security the funds may purchase. Each fund may purchase
securities of an issuer that derived more than 15% of its gross
revenues in its most recent fiscal year from securities-related
activities, subject to the following conditions:
a. the purchase cannot cause more than 5% of the fund's total assets
to be invested in securities of that issuer;
b. for an equity security, the purchase cannot result in the fund
owning more than 5% of the issuer's outstanding securities in that
class;
c. for a debt security, the purchase cannot result in the fund's
owning more than 10% of the outstanding principal amount of the
issuer's debt securities.
In applying the gross revenue test, an issuer's own securities-related
activities must be combined with its ratable share of
securities-related revenues from enterprises in which it owns a 20% or
greater voting or equity interest. All of the above percentage
limitations, as well as the issuer's gross revenue test, are
applicable at the time of purchase. With respect to warrants, rights,
and convertible securities, a determination of compliance with the
above limitations shall be made as though such warrant, right, or
conversion privilege had been exercised. A fund will not be required
to divest its holdings of a particular issuer when circumstances
subsequent to the purchase cause one of the above conditions not to be
met. Each fund is not permitted to acquire any security issued by FMR,
FDC, or any affiliated company of these companies that is a
securities-related business. The purchase of a general partnership
interest in a securities-related business is prohibited.
MULTIMEDIA PORTFOLIO. The Federal Communications Commission (FCC) has
certain rules which limit ownership of corporate broadcast licensees
in an effort to assure that no one person or entity (including mutual
funds) exercises an unacceptable degree of influence or control over
broadcast facilities.
AMERICAN GOLD PORTFOLIO AND PRECIOUS METALS AND MINERALS PORTFOLIO.
American Gold Portfolio and Precious Metals and Minerals Portfolio
each has the authority to invest a portion of its assets in precious
metals, such as gold, platinum, palladium, and silver. No more than
50% of either fund's total assets may be invested in precious metals,
including gold bullion or coins.
FMR does not currently intend that either fund will hold gold coins,
but the Trustees reserve the right of the funds to do so in the
future. Transactions in gold coins will be entered into only with
prior approval by the Trustees, prior notice to current shareholders,
and provided that disclosure regarding the nature of such investments
is set forth in a subsequent prospectus that is part of the
registration statement declared effective by the Securities and
Exchange Commission (SEC). In addition, the ability of the funds to
hold gold coins may be restricted by the securities laws and/or
regulations of states where the funds' shares are qualified for sale.
The funds may also consider investments in securities indexed to the
price of gold or other precious metals as an alternative to direct
investments in precious metals.
Precious Metals and Minerals Portfolio's gold-related investments will
often contain securities of companies located in the Republic of South
Africa, which is a principal producer of gold. Unsettled political and
social conditions in South Africa and its neighboring countries, may
from time to time pose certain risks to Precious Metals and Minerals
Portfolio's investments in South African issuers. These events could
also have an impact on American Gold Portfolio through their influence
on the price of gold and related mining securities worldwide.
FUND DESCRIPTIONS
THE STOCK FUNDS INVEST PRIMARILY WITHIN THE INVESTMENT AREAS DESCRIBED
BELOW.
AIR TRANSPORTATION PORTFOLIO: COMPANIES ENGAGED IN THE REGIONAL,
NATIONAL AND INTERNATIONAL MOVEMENT OF PASSENGERS, MAIL, AND FREIGHT
VIA AIRCRAFT. These companies include the major airlines, commuter
airlines, air cargo and express delivery operators, air freight
forwarders, aviation service firms, and manufacturers of aeronautical
equipment.
Airline deregulation has substantially diminished the government's
role in the air transport industry while promoting an increased level
of competition. However, regulations and policies of various domestic
and foreign governments can still affect the profitability of
individual carriers as well as the entire industry. In addition to
regulations and competition, the air transport industry is also very
sensitive to fuel price levels and the state of foreign and domestic
economies.
AMERICAN GOLD PORTFOLIO: COMPANIES ENGAGED IN EXPLORATION, MINING,
PROCESSING, OR DEALING IN GOLD, OR, TO A LESSER DEGREE, IN SILVER,
PLATINUM, DIAMONDS, OR OTHER PRECIOUS METALS AND MINERALS. FMR also
may invest in companies that manufacture and distribute precious
metals and minerals products (such as jewelry, watches, and metal
foils and leaf) and companies that invest in other companies engaged
in gold and other precious metal and mineral-related activities.
Normally at least 80% of the fund's assets will be invested in
securities of North, Central and South American companies engaged in
gold-related activities, and in gold bullion or coins. The fund
also may invest in securities whose redemption value is indexed to the
price of gold or other precious metals. Because the value of these
securities is directly linked to the price of gold or other precious
metals, they involve risks and pricing characteristics similar to
direct investments in precious metals. FMR currently intends to treat
such securities as investments in precious metals for the purposes of
the fund's fundamental investment limitations, including the fund's
80% policy.
The prices of gold and other precious metal mining securities have
been subject to substantial fluctuations over short periods of time
and may be affected by unpredictable international monetary and
political developments such as currency devaluations or revaluations,
economic and social conditions within a country, trade imbalances, or
trade or currency restrictions between countries. Because much
of the world's gold reserves are located in South Africa, the social
upheaval and related economic difficulties there may, from time to
time, influence the price of gold and the share values of precious
metals mining companies located elsewhere. Investors should understand
the special considerations and risks related to such an investment
emphasis, and, accordingly, the potential effect on the fund's value.
In addition to its investments in securities, the fund may invest a
portion of its assets in gold or other precious metals in the form of
bullion, coins, or securities indexed to the price of precious metals.
The price s of gold and other precious metals are
affected by broad economic and political conditions, but are
less subject to local and company-specific factors than securities of
individual companies. As a result, precious metals may be more or less
volatile in price than securities of companies engaged in precious
metals-related businesses. FMR intends to purchase only those forms of
precious metals that are readily marketable and that can be stored in
accordance with custody regulations applicable to mutual funds. The
fund may incur higher custody and transaction costs for precious
metals than for securities. Also, precious metals investments do
not pay income.
For the fund to qualify as a registered investment company
under current federal tax law , gains from selling precious metals
may not exceed 10% of the fund's gross income for its taxable
year . This tax requirement could cause the fund to hold or sell
precious metals or securities when it would not otherwise do
so.
AUTOMOTIVE PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE, MARKETING
OR SALE OF AUTOMOBILES, TRUCKS, SPECIALTY VEHICLES, PARTS, TIRES, AND
RELATED SERVICES. These companies may include, for example, companies
involved with the manufacture and distribution of vehicles, vehicle
parts and tires (either original equipment or for the aftermarket) and
companies involved in the retail sale of vehicles, parts or tires. In
addition, the fund may invest in companies that provide
automotive-related services to manufacturers, distributors or
consumers.
The automotive industry is highly cyclical and companies involved in
this business may suffer periodic operating losses. While most of the
major manufacturers are large, financially strong companies, many
others are small and may be non-diversified in both product line and
customer base.
BIOTECHNOLOGY PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
DEVELOPMENT, AND MANUFACTURE OF VARIOUS BIOTECHNOLOGICAL PRODUCTS,
SERVICES AND PROCESSES. These include companies involved with new or
experimental technologies such as genetic engineering, hybridoma and
recombinant DNA techniques and monoclonal antibodies. The fund may
also invest in companies that manufacture and/or distribute
biotechnological and biomedical products, including devices and
instruments, and in companies that provide or benefit significantly
from scientific and technological advances in biotechnology. Some
biotechnology companies may provide processes or services instead of,
or in addition to, products.
The description of the biotechnology sector will be interpreted
broadly by FMR, and may include applications and developments in such
areas as human health care (e.g., cancer, infectious disease,
diagnostics and therapeutics); pharmaceuticals (e.g., new drug
development and production); agricultural and veterinary applications
(e.g., improved seed varieties, animal growth hormones); chemicals
(e.g., enzymes, toxic waste treatment); medical/surgical (e.g.,
epidermal growth factor, in vivo imaging/therapeutics); and industry
(e.g., biochips, fermentation, enhanced mineral recovery).
Many of these companies may have losses and may not offer products
until the end of the decade. These companies may have persistent
losses during a new product's transition from development to
production, and revenue patterns may be erratic. In addition,
biotechnology companies are affected by patent considerations, intense
competition, rapid technological change and obsolescence, and
regulatory requirements of the U.S. Food and Drug Administration, the
Environmental Protection Agency (EPA), state and local governments,
and foreign regulatory authorities. Many of these companies are
relatively small and their stock is thinly traded.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO: COMPANIES ENGAGED IN
STOCK BROKERAGE, COMMODITY BROKERAGE, INVESTMENT BANKING,
TAX-ADVANTAGED INVESTMENT OR INVESTMENT SALES, INVESTMENT MANAGEMENT,
OR RELATED INVESTMENT ADVISORY SERVICES. The fund may invest in
diversified companies with operations in the aforementioned areas, in
addition to firms principally engaged in brokerage activities or
investment management. The fund will not invest in securities of FMR
or its affiliated companies.
Changes in regulations, the brokerage commission structure, and the
competitive environment, combined with the operating leverage inherent
in companies in these industries, can produce erratic revenues and
earnings over time. The performance of companies in this industry can
be closely tied to the stock market and can suffer during market
declines. Revenues often depend on overall market activity. SEC
regulations provide that the fund may not invest more than 5% of its
total assets in the securities of any one company that derives more
than 15% of its revenues from brokerage or investment management
activities. These companies as well as those deriving more than 15% of
profits from brokerage and investment management activities will be
considered to be "principally engaged" in this fund's specific
business activity.
BUSINESS SERVICES AND OUTSOURCING PORTFOLIO: COMPANIES THAT PROVIDE
BUSINESS-RELATED SERVICES TO COMPANIES AND OTHER ORGANIZATIONS.
Business-related services may include for example, data processing,
consulting, outsourcing, temporary employment, market research or
database services, printing, advertising, computer programming, credit
reporting, claims collection, mailing and photocopying. Typically,
these services are provided on a contract or fee basis.
The success of companies that provide business-related services is, in
part, subject to continued demand for such services as companies and
other organizations seek alternative, cost effective means to meet
their economic goals. Competitive pressures, such as technological
developments, fixed-rate pricing, and the ability to attract and
retain skilled employees, also may have a significant impact on the
financial condition of companies in the business services and
outsourcing industry.
CHEMICALS PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH, DEVELOPMENT,
MANUFACTURE OR MARKETING OF PRODUCTS OR SERVICES RELATED TO THE
CHEMICAL PROCESS INDUSTRIES. Such products may include synthetic and
natural materials, such as basic and intermediate organic and
inorganic chemicals, plastics, synthetic fibers, fertilizers,
industrial gases, flavorings, fragrances, biological materials,
catalysts, carriers, additives, and process aids. The fund may also
invest in companies providing design, engineering, construction, and
consulting services to companies engaged in chemical processing.
Companies in the chemical processing field are subject to regulation
by various federal and state authorities, including the EPA and its
state agency counterparts. As regulations are developed and enforced,
such companies may be required to alter or cease production of a
product, to pay fines or to pay for cleaning up a disposal site, or to
agree to restrictions on their operations. In addition, some of the
materials and processes used by these companies involve hazardous
components. There are risks associated with their production, handling
and disposal. These risks are in addition to the more common risks of
intense competition and product obsolescence.
COMPUTERS PORTFOLIO: COMPANIES ENGAGED IN RESEARCH, DESIGN,
DEVELOPMENT, MANUFACTURE OR DISTRIBUTION OF PRODUCTS, PROCESSES OR
SERVICES THAT RELATE TO CURRENTLY AVAILABLE OR EXPERIMENTAL HARDWARE
TECHNOLOGY WITHIN THE COMPUTER INDUSTRY. The fund may invest in
companies that provide the following products or services: mainframes,
minicomputers, microcomputers, peripherals, data or information
processing, office or factory automation, robotics, artificial
intelligence, computer aided design, medical technology, engineering
and manufacturing, data communications and software.
Competitive pressures may have a significant effect on the financial
conditions of companies in the computer industry. For example, as
product cycles shorten and manufacturing capacity increases, these
companies could become increasingly subject to aggressive pricing,
which hampers profitability. Fluctuating domestic and international
demand also affect profitability.
CONSTRUCTION AND HOUSING PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN
AND CONSTRUCTION OF RESIDENTIAL, COMMERCIAL, INDUSTRIAL AND PUBLIC
WORKS FACILITIES, AS WELL AS COMPANIES ENGAGED IN THE MANUFACTURE,
SUPPLY, DISTRIBUTION OR SALE OF PRODUCTS OR SERVICES TO THESE
CONSTRUCTION INDUSTRIES. Examples of companies engaged in these
activities include companies that provide engineering and contracting
services, companies that supply home furnishings, and companies that
produce basic building materials such as cement, aggregates, gypsum,
timber, and wall and floor coverings.
The fund also may invest in the securities of companies involved in
real estate development and construction financing such as
homebuilders, architectural and design firms, and property managers.
Additionally, the fund may invest in companies involved in the home
improvement and maintenance industry, including building material
retailers and distributors, household service firms, and those
companies that supply such companies.
The companies in which the fund may invest are subject to, among other
factors, changes in government spending on public works and
transportation facilities such as highways and airports, as well as
changes in interest rates and levels of economic activity,
government-sponsored housing subsidy programs, rate of housing
turnover, taxation, demographic patterns, consumer spending, consumer
confidence, and new and existing home sales.
CONSUMER INDUSTRIES PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE
AND DISTRIBUTION OF GOODS TO CONSUMERS BOTH DOMESTICALLY AND
INTERNATIONALLY. The fund may invest in companies that manufacture or
sell durable products such as homes, cars, boats, furniture, major
appliances, and personal computers.
The fund also may invest in companies that manufacture, wholesale, or
retail non-durable goods such as food, beverages, tobacco, health care
products, household and personal care products, apparel, and
entertainment products (e.g., books, magazines, TV, cable, movies,
music, gaming, sports). In addition, the fund may invest in consumer
products and services such as lodging, child care, convenience stores,
and car rentals.
The success of durable goods manufacturers and retailers is closely
tied to the performance of the overall economy, interest rates, and
consumer confidence. These segments are very competitive; success
depends heavily on household disposable income and consumer spending.
Consumer product and retailing concepts tend to rise and fall with
changes in demographics and consumer tastes.
CYCLICAL INDUSTRIES PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
DEVELOPMENT, MANUFACTURE, DISTRIBUTION, SUPPLY, OR SALE OF MATERIALS,
EQUIPMENT, PRODUCTS OR SERVICES RELATED TO CYCLICAL INDUSTRIES. These
may include the automotive, chemical, construction and housing,
defense and aerospace, environmental services, industrial equipment
and materials, paper and forest products, and transportation
industries.
Many companies in these industries are significantly affected by
general economic trends including employment, economic growth, and
interest rates. Other factors that may affect these industries are
changes in consumer sentiment and spending, commodity prices,
legislation, government regulation and spending, import controls, and
worldwide competition. At times, worldwide production of the materials
used in cyclical industries has exceeded demand as a result of, for
example, over-building or economic downturns. During these times,
commodity price declines and unit volume reductions resulted in poor
investment returns and losses. Furthermore, a company in the cyclical
industries may be subject to liability for environmental damage,
depletion of resources, and mandated expenditures for safety and
pollution control.
DEFENSE AND AEROSPACE PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
MANUFACTURE OR SALE OF PRODUCTS OR SERVICES RELATED TO THE DEFENSE OR
AEROSPACE INDUSTRIES. The fund may invest in companies that provide
the following products or services: air transport; defense
electronics; aircraft or spacecraft production; missile design; data
processing or computer-related services; communications systems;
research; development and manufacture of military weapons and
transportation; general aviation equipment, missiles, space launch
vehicles, and spacecraft; units for guidance, propulsion, and control
of flight vehicles; and equipment components and airborne and
ground-based equipment essential to the testing, operation, and
maintenance of flight vehicles.
Companies involved in the defense and aerospace industries rely to a
large extent on U.S. (and other) government demand for their products
and services. The financial condition of such companies and investor
interest in the stocks of these companies are heavily influenced by
federal defense and aerospace spending policies. For example, defense
spending is currently under pressure from efforts to control the U.S.
budget deficit.
DEVELOPING COMMUNICATIONS PORTFOLIO: COMPANIES ENGAGED IN THE
DEVELOPMENT, MANUFACTURE OR SALE OF EMERGING COMMUNICATIONS SERVICES
OR EQUIPMENT. The fund may invest in companies developing or offering
services or products based on communications technologies such as
cellular, paging, personal communications networks, special mobile
radio, facsimile, fiber optic transmission, voice mail, video
conferencing, microwave, satellite, local and wide area networking,
and other transmission electronics. For purposes of characterizing the
fund's investments, communications services or equipment may be deemed
to be "emerging" if they derive from new technologies or new
applications of existing technologies. The fund will focus on
companies whose business is based on these emerging technologies, with
less emphasis on traditional telephone utilities and large long
distance carriers. The fund will attempt to exploit growth
opportunities presented by new technologies and applications in the
communications field. Many of these opportunities may be in the
development stage and, as such, can pose large risks as well as
potential rewards. Such risks might include failure to obtain (or
delays in obtaining) adequate financing or necessary regulatory
approvals, intense competition, product incompatibility, consumer
preferences and rapid obsolescence. Securities of small companies that
base their business on emerging technologies may be volatile due to
limited product lines, markets, or financial resources.
ELECTRONICS PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, MANUFACTURE,
OR SALE OF ELECTRONIC COMPONENTS (SEMICONDUCTORS, CONNECTORS, PRINTED
CIRCUIT BOARDS AND OTHER COMPONENTS); EQUIPMENT VENDORS TO ELECTRONIC
COMPONENT MANUFACTURERS; ELECTRONIC COMPONENT DISTRIBUTORS; AND
ELECTRONIC INSTRUMENTS AND ELECTRONIC SYSTEMS VENDORS. In addition,
the fund may invest in companies in the fields of defense electronics,
medical electronics, consumer electronics, advanced manufacturing
technologies (computer-aided design and computer-aided manufacturing
[CAD/CAM], computer-aided engineering, and robotics), lasers and
electro-optics, and other new electronic technologies. Many of the
products offered by companies engaged in the design, production or
distribution of electronic products are subject to risks of rapid
obsolescence and intense competition.
ENERGY PORTFOLIO: COMPANIES IN THE ENERGY FIELD, INCLUDING THE
CONVENTIONAL AREAS OF OIL, GAS, ELECTRICITY AND COAL, AND NEWER
SOURCES OF ENERGY SUCH AS NUCLEAR, GEOTHERMAL, OIL SHALE AND SOLAR
POWER. The business activities of companies in which the fund may
invest include: production, generation, transmission, refining,
marketing, control, distribution or measurement of energy or energy
fuels such as petrochemicals; providing component parts or services to
companies engaged in the above activities; energy research or
experimentation; and environmental activities related to the solution
of energy problems, such as energy conservation and pollution control.
Companies participating in new activities resulting from technological
advances or research discoveries in the energy field will also be
considered for this fund.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
conservation, the success of exploration projects, and tax and other
regulatory policies of various governments.
ENERGY SERVICE PORTFOLIO: COMPANIES IN THE ENERGY SERVICE FIELD,
INCLUDING THOSE THAT PROVIDE SERVICES AND EQUIPMENT TO THE
CONVENTIONAL AREAS OF OIL, GAS, ELECTRICITY AND COAL, AND NEWER
SOURCES OF ENERGY SUCH AS NUCLEAR, GEOTHERMAL, OIL SHALE AND SOLAR
POWER. The fund may invest in companies involved in providing services
and equipment for drilling processes such as offshore and onshore
drilling, drill bits, drilling rig equipment, drilling string
equipment, drilling fluids, tool joints and wireline logging. Many
energy service companies are engaged in production and well
maintenance, providing such products and services as packers,
perforating equipment, pressure pumping, downhole equipment, valves,
pumps, compression equipment, and well completion equipment and
service. Certain companies supply energy providers with exploration
technology such as seismic data, geological and geophysical services,
and interpretation of this data. The fund may also invest in companies
with a variety of products or services including pipeline
construction, oil tool rental, underwater well services, helicopter
services, geothermal plant design or construction, electric and
nuclear plant design or construction, energy-related capital
equipment, mining related equipment or services, and high technology
companies serving the above industries.
Energy service firms are affected by supply, demand and other normal
competitive factors for their specific products or services. They are
also affected by other unpredictable factors such as supply and demand
for oil and gas, prices of oil and gas, exploration and production
spending, governmental regulation, world events and economic
conditions.
ENVIRONMENTAL SERVICES PORTFOLIO: COMPANIES ENGAGED IN THE RESEARCH,
DEVELOPMENT, MANUFACTURE OR DISTRIBUTION OF PRODUCTS, PROCESSES OR
SERVICES RELATED TO WASTE MANAGEMENT OR POLLUTION CONTROL. Such
products, processes or services may include the transportation,
treatment and disposal of both hazardous and solid wastes, including
waste-to-energy and recycling; remedial project efforts, including
groundwater and underground storage tank decontamination, asbestos
cleanup and emergency cleanup response; and the detection, analysis,
evaluation, and treatment of both existing and potential environmental
problems including, among others, contaminated water, air pollution,
and acid rain. The fund may also invest in companies that provide
design, engineering, construction, and consulting services to
companies engaged in waste management or pollution control.
The environmental services field has generally been positively
influenced by legislation resulting in stricter government regulations
and enforcement policies for both commercial and governmental
generators of waste materials, as well as specific expenditures
designated for remedial cleanup efforts. Companies in the
environmental services field are also affected by regulation by
various federal and state authorities, including the federal EPA and
its state agency counterparts. As regulations are developed and
enforced, such companies may be required to alter or cease production
of a product or service or to agree to restrictions on their
operations. In addition, since the materials handled and processes
involved include hazardous components, there is significant liability
risk. There are also risks of intense competition within the
environmental services field.
FINANCIAL SERVICES PORTFOLIO: COMPANIES PROVIDING FINANCIAL SERVICES
TO CONSUMERS AND INDUSTRY. Companies in the financial services sector
include: commercial banks and savings and loan associations, consumer
and industrial finance companies, securities brokerage companies, real
estate-related companies, leasing companies, and a variety of firms in
all segments of the insurance industry such as multi-line, property
and casualty, and life insurance.
The financial services sector is currently undergoing relatively rapid
change as existing distinctions between financial service segments
become less clear. For instance, recent business combinations have
included insurance, finance, and securities brokerage under single
ownership. Some primarily retail corporations have expanded into
securities and insurance industries. Moreover, the federal laws
generally separating commercial and investment banking are currently
being studied by Congress.
Banks, savings and loan associations, and finance companies are
subject to extensive governmental regulation which may limit both the
amounts and types of loans and other financial commitments they can
make and the interest rates and fees they can charge. The
profitability of these groups is largely dependent on the availability
and cost of capital funds, and can fluctuate significantly when
interest rates change. In addition, general economic conditions are
important to the operations of these concerns, with exposure to credit
losses resulting from possible financial difficulties of borrowers
potentially having an adverse effect. Insurance companies are likewise
subject to substantial governmental regulation, predominantly at the
state level, and may be subject to severe price competition.
Securities and Exchange Commission (SEC) regulations provide that the
fund may not invest more than 5% of its total assets in the securities
of any one company that derives more than 15% of its revenues from
brokerage or investment management activities. These companies as well
as those deriving more than 15% of profits from brokerage and
investment management activities are considered to be "principally
engaged" in the business activities of the financial services sector.
FOOD AND AGRICULTURE PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
SALE OR DISTRIBUTION OF FOOD AND BEVERAGE PRODUCTS, AGRICULTURAL
PRODUCTS, AND PRODUCTS RELATED TO THE DEVELOPMENT OF NEW FOOD
TECHNOLOGIES. The goods and services provided or manufactured by
companies in which the fund may invest include: packaged food products
such as cereals, pet foods and frozen foods; meat and poultry
processing; the production of hybrid seeds; the wholesale and retail
distribution and warehousing of food and food-related products,
including restaurants; and the manufacture and distribution of health
food and dietary products, fertilizer and agricultural machinery, wood
products, tobacco, and tobacco leaf. In addition, the fund may invest
in food technology companies engaged in and pioneering the development
of new technologies to provide improved hybrid seeds, new and safer
food storage, and new enzyme technologies.
The success of food and food-related products is closely tied to
supply and demand, which may be strongly affected by demographic and
product trends, stimulated by food fads, marketing campaigns, and
environmental factors. In the United States, the agricultural products
industry is subject to regulation by numerous federal and municipal
government agencies.
HEALTH CARE PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, MANUFACTURE,
OR SALE OF PRODUCTS OR SERVICES USED FOR OR IN CONNECTION WITH HEALTH
CARE OR MEDICINE. Companies in the health care sector include
pharmaceutical companies; firms that design, manufacture, sell, or
supply medical, dental, and optical products, hardware or services;
companies involved in biotechnology, medical diagnostic, and
biochemical research and development, as well as companies involved in
the operation of health care facilities. Many of these companies are
subject to government regulation of their products and services, a
factor which could have a significant and possibly unfavorable effect
on the price and availability of such products or services.
Furthermore, the types of products or services produced or provided by
these companies may become obsolete quickly.
HOME FINANCE PORTFOLIO: COMPANIES ENGAGED IN INVESTING IN REAL ESTATE,
USUALLY THROUGH MORTGAGES AND OTHER CONSUMER-RELATED LOANS. These
companies may also offer discount brokerage services, insurance
products, leasing services, and joint venture financing. The fund may
invest in mortgage banking companies, government-sponsored
enterprises, real estate investment trusts, consumer finance
companies, and similar entities, as well as savings and loan
associations, savings banks, building and loan associations,
cooperative banks, commercial banks, and similar depository
institutions. The fund may invest in U.S. depository institutions
whose customer deposits are insured by the Savings Association
Insurance Fund (SAIF) or the Bank Insurance Fund (BIF).
The residential real estate finance industry has changed rapidly over
the last decade. Regulatory changes at federally insured institutions,
in response to a high failure rate, have mandated higher capital
ratios and more prudent underwriting. This reduced capacity has
created growth opportunities for uninsured companies and secondary
market products to fill unmet demand for home finance. Continued
change in the origination, packaging, selling, holding, and insuring
of home finance products is expected going forward.
The fund will be influenced by potential regulatory changes, interest
rate movements, the level of home mortgage demand, and residential
delinquency trends.
INDUSTRIAL EQUIPMENT PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
DISTRIBUTION OR SERVICE OF PRODUCTS AND EQUIPMENT FOR THE INDUSTRIAL
SECTOR, INCLUDING INTEGRATED PRODUCERS OF CAPITAL EQUIPMENT (SUCH AS
GENERAL INDUSTRY MACHINERY, FARM EQUIPMENT, AND COMPUTERS), PARTS
SUPPLIERS AND SUBCONTRACTORS. The fund may invest in companies that
manufacture products or service equipment for the food, clothing or
sporting goods industries; companies that provide service
establishment, railroad, textile, farming, mining, oilfield,
semiconductor, and telecommunications equipment; companies that
manufacture products or service equipment for trucks, construction,
transportation or machine tools; cable equipment companies; and office
automation companies.
The success of equipment manufacturing and distribution companies is
closely tied to overall capital spending levels. Capital spending is
influenced by the individual company's profitability and broader
factors such as interest rates and foreign competition, which are
partly determined by currency exchange rates. Equipment manufacturing
concerns may also be affected by economic cycles, technical
obsolescence, labor relations difficulties and government regulations
pertaining to products, production facilities, or production
processes.
INDUSTRIAL MATERIALS PORTFOLIO: COMPANIES ENGAGED IN THE MANUFACTURE,
MINING, PROCESSING, OR DISTRIBUTION OF RAW MATERIALS AND INTERMEDIATE
GOODS USED IN THE INDUSTRIAL SECTOR. The products handled by the
companies in which the fund may invest include chemicals, timber,
paper, copper, iron ore, nickel, steel, aluminum, textiles, cement,
and gypsum. The fund may also invest in the securities of mining,
processing, transportation, and distribution companies, including
equipment suppliers and railroads.
Many companies in the industrial sector are significantly affected by
the level and volatility of commodity prices, the exchange value of
the dollar, import controls, and worldwide competition. At times,
worldwide production of these materials has exceeded demand as a
result of over-building or economic downturns. During these times,
commodity price declines, and unit volume reductions have led to poor
investment returns and losses. Other risks include liability for
environmental damage, depletion of resources, and mandated
expenditures for safety and pollution control.
INSURANCE PORTFOLIO: COMPANIES ENGAGED IN UNDERWRITING, REINSURING,
SELLING, DISTRIBUTING, OR PLACING OF PROPERTY AND CASUALTY, LIFE, OR
HEALTH INSURANCE. The fund may invest in multi-line companies that
provide property and casualty coverage, as well as life and health
insurance. The fund may invest in insurance brokers, reciprocals, and
claims processors. The fund may also invest in diversified financial
companies with subsidiaries (including insurance brokers, reciprocals
and claims processors) engaged in underwriting, reinsuring, selling,
distributing or placing insurance with independent third parties.
Insurance company profits are affected by interest rate levels,
general economic conditions, and price and marketing competition.
Property and casualty insurance profits may also be affected by
weather catastrophes and other disasters. Life and health insurance
profits may be affected by mortality and morbidity rates. Individual
companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales,
tax obligations, and profitability.
LEISURE PORTFOLIO: COMPANIES ENGAGED IN THE DESIGN, PRODUCTION, OR
DISTRIBUTION OF GOODS OR SERVICES IN THE LEISURE INDUSTRIES. The goods
or services provided by companies in which the fund may invest
include: television and radio broadcast or manufacture (including
cable television); motion pictures and photography; recordings and
musical instruments; publishing, including newspapers and magazines;
sporting goods and camping and recreational equipment; and sports
arenas. Other goods and services may include toys and games (including
video and other electronic games), amusement and theme parks, travel
and travel-related services, hotels and motels, leisure apparel or
footwear, fast food, beverages, restaurants, tobacco products, and
gaming casinos.
Securities of companies in the leisure industries may be considered
speculative. Companies engaged in entertainment, gaming, broadcasting,
cable television and cellular communications, for example, have
unpredictable earnings, due in part to changing consumer tastes and
intense competition. Securities of companies in the leisure industries
generally exhibit greater volatility than the overall market. The
market has been known to react strongly to technological developments
and to the specter of government regulation in the leisure industries.
MEDICAL DELIVERY PORTFOLIO: COMPANIES ENGAGED IN THE OWNERSHIP OR
MANAGEMENT OF HOSPITALS, NURSING HOMES, HEALTH MAINTENANCE
ORGANIZATIONS, AND OTHER COMPANIES SPECIALIZING IN THE DELIVERY OF
HEALTH CARE SERVICES. The fund may invest in companies that operate
acute care, psychiatric, teaching, or specialized treatment hospitals;
firms that provide outpatient surgical, outpatient rehabilitation, or
other specialized care, home health care, drug and alcohol abuse
treatment, and dental care; firms operating comprehensive health
maintenance organizations and nursing homes for the elderly and
disabled; and firms that provide related laboratory services.
Federal and state governments provide a substantial percentage of
revenues to health care service providers via Medicare and Medicaid.
The future growth of this source of funds is subject to great
uncertainty. Additionally, the complexion of the private payment
system is changing. For example, insurance companies are beginning to
offer long-term health care insurance for nursing home patients to
supplement or replace government benefits. Also, membership in health
maintenance organizations or prepaid health plans is displacing
individual payments for each service rendered by a hospital or
physician.
The demand for health care services will tend to increase as the
population ages. However, review of patients' need for hospitalization
by Medicare and health maintenance organizations has demonstrated the
ability of health care providers to curtail unnecessary hospital stays
and reduce costs.
MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO: COMPANIES ENGAGED IN
RESEARCH, DEVELOPMENT, MANUFACTURE, DISTRIBUTION, SUPPLY OR SALE OF
MEDICAL EQUIPMENT AND DEVICES AND RELATED TECHNOLOGIES. For example,
the fund may invest in companies involved in the design and
manufacture of medical equipment and devices, drug delivery
technologies, hospital equipment and supplies, medical instrumentation
and medical diagnostics.
Companies in this industry may be affected by patent
considerations, rapid technological change and obsolescence,
government regulation, and government reimbursement for medical
expenses.
MULTIMEDIA PORTFOLIO: COMPANIES ENGAGED IN THE DEVELOPMENT,
PRODUCTION, SALE AND DISTRIBUTION OF GOODS OR SERVICES USED IN THE
BROADCAST AND MEDIA INDUSTRIES. Business activities of companies in
which the fund may invest include: ownership, operation, or broadcast
of free or pay television, radio or cable stations; publication and
sale of newspapers, magazines, books or video products; and
distribution of data-based information. The fund may also invest in
companies involved in the development, syndication and transmission of
the following products: television and movie programming, pay-per-view
television, advertising, cellular communications, and emerging
technology for the broadcast and media industries.
Some of the companies in the broadcast and media industries are
undergoing significant change because of federal deregulation of cable
and broadcasting. As a result, competitive pressures are intense and
the stocks are subject to increased price volatility. FCC rules
govern the concentration of investment in AM, FM, or TV stations,
limiting investment alternatives.
NATURAL GAS PORTFOLIO: COMPANIES ENGAGED IN THE PRODUCTION,
TRANSMISSION, AND DISTRIBUTION OF NATURAL GAS, AND INVOLVED IN THE
EXPLORATION OF POTENTIAL NATURAL GAS SOURCES, AS WELL AS THOSE
COMPANIES THAT PROVIDE SERVICES AND EQUIPMENT TO NATURAL GAS
PRODUCERS, REFINERIES, COGENERATION FACILITIES, CONVERTERS, AND
DISTRIBUTORS. The business activities of companies in which the fund
may invest include: production, transmission, distribution, marketing,
control, or measurement of natural gas; exploration of potential
natural gas sources; providing component parts or services to
companies engaged in the above activities; natural gas research or
experimentation; and environmental activities related to the solution
of energy problems, such as energy conservation or pollution control
through the use of natural gas. The fund may also invest in companies
participating in new activities working toward technological advances
in the natural gas industry.
The companies in the natural gas industry are subject to, among other
factors, changes in price and supply of both conventional and
alternative energy sources. Swift price and supply fluctuations may be
caused by events relating to international politics, energy
conservation, the success of energy source exploration projects, and
tax and other regulatory policies of domestic and foreign governments.
NATURAL RESOURCES PORTFOLIO: COMPANIES THAT OWN OR DEVELOP NATURAL
RESOURCES, OR SUPPLY GOODS AND SERVICES TO SUCH COMPANIES. Natural
resources include precious metals (e.g., gold, platinum, and silver),
ferrous and nonferrous metals (e.g., iron, aluminum, and copper),
strategic metals (e.g., uranium and titanium), hydrocarbons (e.g.,
coal, oil, and natural gases), chemicals, forest products, real
estate, food, textile and tobacco products, and other basic
commodities. Exploring, mining, refining, processing, transporting,
and fabricating are examples of activities of companies in the natural
resources sector.
Precious metals, at times, have been subject to substantial price
fluctuations over short periods of time and may be affected by
unpredictable international monetary and political policies such as
currency devaluations or revaluations, economic and social conditions
within a country, trade imbalances, or trade or currency restrictions
between countries. The fund may also consider instruments and
securities indexed to the price of gold or other precious metals as an
alternative to direct investments in precious metals.
As a practical matter, investments in physical commodities can present
concerns such as delivery, storage and maintenance, possible
illiquidity and the unavailability of accurate market valuations. FMR,
in addressing these concerns, currently intends to purchase only
readily marketable precious metals and to deliver and store them with
a qualified U.S. bank. Investments in bullion earn no investment
income and may involve higher custody and transaction costs than
investments in securities.
For the fund to qualify as a regulated investment company under
current federal tax law, gains from selling precious metals may not
exceed 10% of the fund's gross income for its taxable year. This tax
requirement could cause the fund to hold or sell precious metals or
securities when it would not otherwise do so.
PAPER AND FOREST PRODUCTS PORTFOLIO: COMPANIES ENGAGED IN THE
MANUFACTURE, RESEARCH, SALE, OR DISTRIBUTION OF PAPER PRODUCTS,
PACKAGING PRODUCTS, BUILDING MATERIALS (SUCH AS LUMBER AND PANELING
PRODUCTS), AND OTHER PRODUCTS RELATED TO THE PAPER AND FOREST PRODUCTS
INDUSTRY. The fund may invest in diversified companies with operations
in the aforementioned areas.
The success of these companies depends on, among other things, the
health of the economy, worldwide production capacity and prevailing
interest rate levels, which, in turn, may affect product pricing,
costs and operating margins. These variables also affect the level of
industry and consumer capital spending for paper and forest products.
PRECIOUS METALS AND MINERALS PORTFOLIO: COMPANIES ENGAGED IN
EXPLORATION, MINING, PROCESSING OR DEALING IN GOLD, SILVER, PLATINUM,
DIAMONDS OR OTHER PRECIOUS METALS AND MINERALS. The fund may also
invest in companies that manufacture and distribute precious metals
and minerals products (such as jewelry, watches, and metal foils and
leaf) and companies that invest in other companies engaged in gold and
other precious metal and mineral-related activities. Under normal
conditions, the fund will invest at least 80% of its assets in (i)
securities of companies principally engaged in exploration, mining,
processing, or dealing in gold, silver, platinum, diamonds, or other
precious metals and minerals, and (ii) precious metals. The fund also
may invest in securities whose redemption value is indexed to the
price of gold or other precious metals. Because the value of these
securities is directly linked to the price of gold or other precious
metals, they involve risks and pricing characteristics similar to
direct investments in precious metals. FMR currently intends to treat
such securities as investments in precious metals for the purposes of
the fund's fundamental investment limitations, including the fund's
80% policy.
The value of the fund's investments may be affected by changes in the
price of gold and other precious metals. Gold has been subject to
substantial price fluctuations over short periods of time and may be
affected by unpredictable international monetary and political
developments such as currency devaluations or revaluations; economic
and social conditions within a country; trade imbalances; or trade or
currency restrictions between countries. Because much of the
world's known gold reserves are located in South Africa, the social
upheaval and related economic difficulties there may, from time to
time, influence the price of gold and the share values of precious
metals mining companies located elsewhere. Because companies involved
in exploring, mining, processing, or dealing in precious metals or
minerals are frequently located outside of the United States, all or a
significant portion of this fund may be invested in securities of
foreign issuers. Investors should understand the special
considerations and risks related to such an investment emphasis, and
accordingly, the potential effect on the fund's value.
In addition to its investments in securities, the fund may invest a
portion of its assets in precious metals, such as gold, silver,
platinum, and palladium. The prices of precious metals are affected by
broad economic and political conditions, but are less subject to local
and company-specific factors than securities of individual companies.
As a result, precious metals may be more or less volatile in price
than securities of companies engaged in precious metals-related
businesses. The fund may purchase precious metals in any form,
including bullion and coins ; however, FMR intends to purchase
only those forms of precious metals that are readily marketable and
that can be stored in accordance with custody regulations applicable
to mutual funds. The fund may incur higher custody and transaction
costs for precious metals than for securities. Also, precious metals
investments do not pay income.
For the fund to qualify as a regulated investment company
under current federal tax law , gains from selling precious metals
may not exceed 10% of the fund's gross income for its taxable
year . This tax requirement could cause the fund to hold or sell
precious metals or securities when it would not otherwise do so.
REGIONAL BANKS PORTFOLIO: COMPANIES ENGAGED IN ACCEPTING DEPOSITS AND
MAKING COMMERCIAL AND PRINCIPALLY NON-MORTGAGE CONSUMER LOANS. In
addition, these companies may offer the following services: merchant
banking, consumer and commercial finance, discount brokerage, leasing
and insurance. These companies concentrate their operations within a
specific part of the country rather than operating predominantly on a
national or international scale. The fund may invest in securities of
foreign institutions, although the majority of publicly-traded
regional banks currently are organized in the United States.
The fund may invest in U.S. institutions whose customer deposits may
or may not be insured by the federal government. Such U.S.
institutions may include, but are not limited to, state chartered
banks, savings and loan institutions, and banks that are members of
the Federal Reserve System.
Federal laws generally separating commercial and investment banking,
as well as laws governing the capitalization and regulation of the
savings and loan industry, are currently being reexamined by Congress.
The services offered by banks may expand if legislation broadening
bank powers is enacted. While providing diversification, expanded
powers could expose banks to well-established competitors,
particularly as the historical distinctions between regional banks and
other financial institutions erode. Increased competition may also
result from the broadening of regional and national interstate banking
powers, which has already reduced the number of publicly traded
regional banks. In addition, general economic conditions are important
to regional banking concerns, with exposure to credit losses resulting
from possible financial difficulties of borrowers potentially having
an adverse effect.
RETAILING PORTFOLIO: COMPANIES ENGAGED IN MERCHANDISING FINISHED GOODS
AND SERVICES PRIMARILY TO INDIVIDUAL CONSUMERS. Companies in which the
fund may invest include: general merchandise retailers, department
stores, food retailers, drug stores, and any specialty retailers
selling a single category of merchandise such as apparel, toys,
consumer electronics, or home improvement products. The fund may also
invest in companies engaged in selling goods and services through
alternative means such as direct telephone marketing, mail order,
membership warehouse clubs, computer, or video based electronic
systems.
The success of retailing companies is closely tied to consumer
spending which, in turn, is affected by general economic conditions
and consumer confidence levels. The retailing industry is highly
competitive; success is often tied to a company's ability to
anticipate changing consumer tastes.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO: COMPANIES ENGAGED IN
RESEARCH, DESIGN, PRODUCTION OR DISTRIBUTION OF PRODUCTS OR PROCESSES
THAT RELATE TO SOFTWARE OR INFORMATION-BASED SERVICES. The fund may
invest in companies that provide systems level software (designed to
run the basic functions of a computer) or applications software
(designed for one type of work) directed at either horizontal (general
use) or vertical (certain industries or groups) markets, time-sharing
services, information-based services, computer consulting or
facilities management services, communications software, and data
communications services.
Competitive pressures may have a significant effect on the financial
condition of companies in the software and computer services
industries. For example, the increasing number of companies and
product offerings in the vertical and horizontal markets may lead to
aggressive pricing and slower selling cycles.
TECHNOLOGY PORTFOLIO: COMPANIES WHICH FMR BELIEVES HAVE, OR WILL
DEVELOP, PRODUCTS, PROCESSES OR SERVICES THAT WILL PROVIDE OR WILL
BENEFIT SIGNIFICANTLY FROM TECHNOLOGICAL ADVANCES AND IMPROVEMENTS.
These may include, for example, companies that develop, produce, or
distribute products or services in the computer, semi-conductor,
electronics, communications, health care, and biotechnology sectors.
Competitive pressures may have a significant effect on the financial
condition of companies in the technology sector. For example, if
technology continues to advance at an accelerated rate, and the number
of companies and product offerings continue to expand, these companies
could become increasingly sensitive to short product cycles and
aggressive pricing.
TELECOMMUNICATIONS PORTFOLIO: COMPANIES ENGAGED IN THE DEVELOPMENT,
MANUFACTURE, OR SALE OF COMMUNICATIONS SERVICES OR COMMUNICATIONS
EQUIPMENT. Companies in the telecommunications field offer a variety
of services and products, including local and long-distance telephone
service; cellular, paging, local and wide area product networks;
satellite, microwave and cable television; and equipment used to
provide these products and services. Long-distance telephone companies
may also have interests in new technologies, such as fiber optics and
data transmission.
Telephone operating companies are subject to both federal and state
regulation affecting permitted rates of return and the kinds of
services that may be offered. Telephone companies usually pay an
above-average dividend. However, the fund's investment decisions are
based primarily upon capital appreciation potential rather than income
considerations. Certain types of companies in which the fund may
invest are engaged in fierce competition for a share of the market for
their products. In recent years, these companies have been providing
goods or services such as private and local area networks, or engaged
in the sale of telephone set equipment.
TRANSPORTATION PORTFOLIO: COMPANIES ENGAGED IN PROVIDING
TRANSPORTATION SERVICES OR COMPANIES ENGAGED IN THE DESIGN,
MANUFACTURE, DISTRIBUTION, OR SALE OF TRANSPORTATION EQUIPMENT.
Transportation services may include, for example, companies involved
in the movement of freight or people such as airline, railroad, ship,
truck, and bus companies. Other service companies include those that
provide automobile, truck, container, rail car, and plane leasing and
maintenance. Equipment manufacturers include makers of trucks, autos,
planes, containers, rail cars, or any other mode of transportation and
their related products. In addition, the fund may invest in companies
that sell fuel-saving devices to the transportation industries and
those that sell insurance and software developed primarily for
transportation companies.
Risk factors that affect transportation stocks include the state of
the economy, fuel prices, labor agreements, and insurance costs.
Transportation stocks are cyclical and have occasional sharp price
movements. The U.S. trend has been to deregulate these industries,
which could have a favorable long-term effect, but future government
decisions may adversely affect these companies.
UTILITIES GROWTH PORTFOLIO: COMPANIES IN THE PUBLIC UTILITIES INDUSTRY
AND COMPANIES DERIVING A MAJORITY OF THEIR REVENUES FROM THEIR PUBLIC
UTILITY OPERATIONS. The fund may invest in companies engaged in the
manufacture, production, generation, transmission and sale of gas and
electric energy; water supply, waste disposal and sewerage and
sanitary service companies; and companies engaged in the
communications field, including telephone, telegraph, satellite,
microwave and the provision of other communication facilities for the
public benefit (not including companies involved in public
broadcasting). Public utility stocks have traditionally produced
above-average dividend income, but the fund's investments are made
based on capital appreciation potential. The fund may not own more
than 5% of the outstanding voting securities of more than one public
utility company as defined by the Public Utility Holding Company Act
of 1935. This policy is non-fundamental and may be changed by the
Board of Trustees.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the SEC, the Board of Trustees has established and periodically
reviews procedures applicable to transactions involving affiliated
financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of mortgages,
loans, receivables or other assets. Payment of interest and repayment
of principal may be largely dependent upon the cash flows generated by
the assets backing the securities and, in certain cases, supported by
letters of credit, surety bonds, or other credit enhancements.
Asset-backed security values may also be affected by the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities providing the credit
enhancement. In addition, these securities may be subject to
prepayment risk.
CLOSED-END INVESTMENT COMPANIES are investment companies that issue a
fixed number of shares which trade on a stock exchange or
over-the-counter. Closed-end investment companies are professionally
managed and may invest in any type of security. Shares of closed-end
investment companies may trade at a premium or a discount to their net
asset value. A fund may purchase shares of closed-end investment
companies to facilitate investment in certain foreign countries.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
delayed-delivery or when-issued basis. These transactions involve a
commitment to purchase or sell specific securities at a predetermined
price or yield, with payment and delivery taking place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the purchaser
assumes the rights and risks of ownership, including the risks of
price and yield fluctuations and the risk that the security will not
be issued as anticipated. Because payment for the securities is not
required until the delivery date, these risks are in addition to the
risks associated with a fund's other investments. If a fund remains
substantially fully invested at a time when delayed-delivery purchases
are outstanding, the delayed-delivery purchases may result in a form
of leverage. When delayed-delivery purchases are outstanding, a fund
will set aside appropriate liquid assets in a segregated custodial
account to cover the purchase obligations. When a fund has sold a
security on a delayed-delivery basis, the fund does not participate in
further gains or losses with respect to the security. If the other
party to a delayed-delivery transaction fails to deliver or pay for
the securities, a fund could miss a favorable price or yield
opportunity or suffer a loss.
A fund may renegotiate a delayed delivery transaction and may sell the
underlying securities before delivery, which may result in capital
gains or losses for the fund.
DOMESTIC AND FOREIGN INVESTMENTS (MONEY MARKET FUND ONLY) include U.S.
dollar-denominated time deposits, certificates of deposit, and
bankers' acceptances of U.S. banks and their branches located outside
of the United States, U.S. branches and agencies of foreign banks, and
foreign branches of foreign banks. Domestic and foreign investments
may also include U.S. dollar-denominated securities issued or
guaranteed by other U.S. or foreign issuers, including U.S. and
foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and
U.S. and foreign financial institutions, including savings and loan
institutions, insurance companies, mortgage bankers, and real estate
investment trusts, as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and by
governmental regulation. Payment of interest and repayment of
principal on these obligations may also be affected by governmental
action in the country of domicile of the branch (generally referred to
as sovereign risk). In addition, evidence of ownership of portfolio
securities may be held outside of the United States and a fund may be
subject to the risks associated with the holding of such property
overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be
general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
federal and state regulation, as well as by governmental action in the
country in which the foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic
developments, withholding taxes, seizures of foreign deposits,
currency controls, interest limitations, or other governmental
restrictions that might affect repayment of principal or payment of
interest, or the ability to honor a credit commitment. Additionally,
there may be less public information available about foreign entities.
Foreign issuers may be subject to less governmental regulation and
supervision than U.S. issuers. Foreign issuers also generally are not
bound by uniform accounting, auditing, and financial reporting
requirements comparable to those applicable to U.S. issuers.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. There is no assurance that
FMR will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in foreign
currencies and of dividends and interest paid with respect to such
securities will fluctuate based on the relative strength of the U.S.
dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign sub custodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
government supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, any be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A stock fund may conduct foreign
currency transactions on a spot (i.e., cash) or forward basis (i.e.,
by entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange. A fund may use currency
forward contracts for any purpose consistent with its investment
objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set
aside appropriate liquid assets in a segregated custodial account to
cover currency forward contracts. As required by SEC guidelines, a
fund will segregate assets to cover currency forward contracts, if
any, whose purpose is essentially speculative. A fund will not
segregate assets to cover forward contracts entered into for hedging
purposes, including settlement hedges, position hedges, and proxy
hedges.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures
Margin Payments, Limitations on Futures and Options Transactions,
Liquidity of Options and Futures Contracts, Options and Futures
Relating to Foreign Currencies, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will
comply with guidelines established by the SEC with respect to coverage
of options and futures strategies by mutual funds and, if the
guidelines so require, will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held
in a segregated account cannot be sold while the futures or option
strategy is outstanding, unless they are replaced with other suitable
assets. As a result, there is a possibility that segregation of a
large percentage of a fund's assets could impede portfolio management
or the fund's ability to meet redemption requests or other current
obligations.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Standard & Poor's 500 Index (S&P 500). Futures can be held
until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each stock fund has
filed a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each stock fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
The above limitations on the stock funds' investments in futures
contracts and options, and the funds' policies regarding futures
contracts and options discussed elsewhere in this SAI, may be changed
as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set
aside assets to cover its position. When writing an option on a
futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business at approximately the prices at
which they are valued. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency of trades
and quotations, (2) the number of dealers and prospective purchasers
in the marketplace, (3) dealer undertakings to make a market, (4) the
nature of the security (including any demand or tender features), and
(5) the nature of the marketplace for trades (including the ability to
assign or offset the fund's rights and obligations relating to the
investment).
Investments currently considered by FMR to be illiquid include
repurchase agreements not entitling the holder to repayment of
principal and payment of interest within seven days, over-the-counter
options, and non-government stripped fixed-rate mortgage-backed
securities. Also, FMR may determine some restricted securities, time
deposits, government-stripped fixed-rate mortgage-backed securities,
loans and other direct debt instruments, emerging market securities,
and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value
of the underlying instrument may be illiquid depending on the assets
held to cover the option and the nature and terms of any agreement the
fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced
at fair value as determined in good faith by a committee appointed by
the Board of Trustees. For the money market fund, illiquid investments
are valued by this method for purposes of monitoring amortized cost
valuation.
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, precious
metals or other commodities, or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits
whose value at maturity or coupon rate is determined by reference to a
specific instrument or statistic.
Gold-indexed securities typically provide for a maturity value that
depends on the price of gold, resulting in a security whose price
tends to rise and fall together with gold prices. Currency-indexed
securities typically are short-term to intermediate-term debt
securities whose maturity values or interest rates are determined by
reference to the values of one or more specified foreign currencies,
and may offer higher yields than U.S. dollar-denominated securities.
Currency-indexed securities may be positively or negatively indexed;
that is, their maturity value may increase when the specified currency
value increases, resulting in a security that performs similarly to a
foreign-denominated instrument, or their maturity value may decline
when foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency.
Currency-indexed securities may also have prices that depend on the
values of a number of different foreign currencies relative to each
other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
American Gold Portfolio, Natural Resources Portfolio, and Precious
Metals and Minerals Portfolio may consider purchasing securities
indexed to the price of precious metals as an alternative to direct
investment in precious metals. The funds will only buy precious
metals-indexed securities when FMR is satisfied with the
creditworthiness of the issuers liable for payment. The securities
generally will earn a nominal rate of interest while held by the
funds, and may have maturities of one year or more. In addition, the
securities may be subject to being put by a fund to the issuer, with
payment to be received on no more than seven days' notice. The put
feature would ensure the liquidity of the notes in the absence of an
active secondary market.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation. In addition, loan participations
involve a risk of insolvency of the lending bank or other financial
intermediary. Direct debt instruments may also include standby
financing commitments that obligate the purchaser to supply additional
cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic
downturns, the 1980s brought a dramatic increase in the use of such
securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication
of the future performance of the high-yield bond market, especially
during periods of economic recession.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. If market
quotations are not available, lower-quality debt securities will be
valued in accordance with procedures established by the Board of
Trustees, including the use of outside pricing services. Judgment
plays a greater role in valuing high-yield debt securities than is the
case for securities for which more external sources for quotations and
last-sale information are available. Adverse publicity and changing
investor perceptions may affect the liquidity of lower-quality debt
securities and the ability of outside pricing services to value
lower-quality debt securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type. FMR will attempt to identify those
issuers of high-yielding securities whose financial condition is
adequate to meet future obligations, has improved, or is expected to
improve in the future. FMR's analysis focuses on relative values based
on such factors as interest or dividend coverage, asset coverage,
earnings prospects, and the experience and managerial strength of the
issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial
assets. For example, put features can be used to modify the maturity
of a security or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as
intended, adverse tax or investment consequences may result. Neither
the Internal Revenue Service (IRS) nor any other regulatory authority
has ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by the fund.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be issued in anticipation of future revenues and may be
backed by the full taxing power of a municipality, the revenues from a
specific project, or the credit of a private organization. The value
of some or all municipal securities may be affected by uncertainties
in the municipal market related to legislation or litigation involving
the taxation of municipal securities or the rights of municipal
securities holders. A municipal security may be owned directly or
through a participation interest.
PUT FEATURES entitle the holder to sell a security back to the issuer
or a third party at any time or at specified intervals. They are
subject to the risk that the put provider is unable to honor the put
feature (purchase the security). Put providers often support their
ability to buy securities on demand by obtaining letters of credit or
other guarantees from other entities. Demand features, standby
commitments, and tender options are types of put features.
QUALITY AND MATURITY (MONEY MARKET FUND ONLY). Pursuant to procedures
adopted by the Board of Trustees, the funds may purchase only
high-quality securities that FMR believes present minimal credit
risks. To be considered high-quality, a security must be rated in
accordance with applicable rules in one of the two highest categories
for short-term securities by at least two nationally recognized rating
services (or by one, if only one rating service has rated the
security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second
tier" securities. First tier securities are those deemed to be in the
highest rating category (e.g., Standard & Poor's A-1), and second tier
securities are those deemed to be in the second highest rating
category (e.g., Standard & Poor's A-2). Split-rated securities may be
determined to be either first tier or second tier based on applicable
regulations.
The fund may not invest more than 5% of its total assets in second
tier securities. In addition, the taxable fund may not invest more
than 1% of its total assets or $1 million (whichever is greater) in
the second tier securities of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a
dollar-weighted average maturity of 90 days or less. When determining
the maturity of a security, the fund may look to an interest rate
reset or demand feature.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is
unrelated to the coupon rate or maturity of the purchased security. As
protection against the risk that the original seller will not fulfill
its obligation, the securities are held in a separate account at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
the funds will engage in repurchase agreement transactions with
parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part
of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security. However, in
general, the money market fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse repurchase
agreement is outstanding, a fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under
the agreement. The funds will enter into reverse repurchase agreements
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR. Such transactions may increase fluctuations in
the market value of fund assets and may be viewed as a form of
leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity
Brokerage Services, Inc. (FBSI). FBSI is a member of the New York
Stock Exchange and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there
may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR to be of good
standing. Furthermore, they will only be made if, in FMR's judgment,
the consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a
fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of
cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, the
fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any dividends, interest, or
other distributions on the securities loaned and to any increase in
market value; (5) the fund may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able
to vote proxies on the securities loaned, either by terminating the
loan or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when
it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Such short sales are known as
short sales "against the box." If a fund enters into a short sale
against the box, it will be required to set aside securities
equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and will
be required to hold such securities while the short sale is
outstanding.
Short sales against the box could be used to protect the net asset
value per share of a money market fund in anticipation of increased
interest rates, without sacrificing the current yield of the
securities sold short. A money market fund will incur transaction
costs in connection with opening and closing short sales against the
box. A stock fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short
sales against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are
created by separating the income and principal components of a U.S.
Government security and selling them separately. STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are
created when the coupon payments and the principal payment are
stripped from an outstanding U.S. Treasury security by a Federal
Reserve Bank.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and the principal payment, which the
dealer then sells.
Because the SEC does not consider privately stripped government
securities to be U.S. Government securities for purposes of Rule 2a-7,
a fund must evaluate them as it would non-government securities
pursuant to regulatory guidelines applicable to money market funds.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price and yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If a fund enters into a swap agreement on a net basis, it
will segregate assets with a daily value at least equal to the excess,
if any, of the fund's accrued obligations under the swap agreement
over the accrued amount the fund is entitled to receive under the
agreement. If a fund enters into a swap agreement on other than a net
basis, it will segregate assets with a value equal to the full amount
of the fund's accrued obligations under the agreement.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for
which it or its affiliates act as investment adviser. In selecting
broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including,
but not limited to: the size and type of the transaction; the nature
and character of the markets for the security to be purchased or sold;
the execution efficiency, settlement capability, and financial
condition of the broker-dealer firm; the broker-dealer's execution
services rendered on a continuing basis; the reasonableness of any
commissions; and , if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitles "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with th e policies
described above.
Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S.
exchanges and may not be subject to negotiation.
Each fund may execute portfolio transactions with
broker-dealers who provide research and execution services to the fund
or other accounts over which FMR or its affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or
sellers of securities. In addition, such broker-dealers may furnish
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; and effect securities transactions and perform
functions incidental thereto (such as clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations ) in accordance with a ranking of
broker -dealers determined periodically by FMR's investment
staff based upon the quality of research and execution services
provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a
security and its price and, to a lesser extent, on the overall quality
of execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering
investment management services to th at fund or its other
clients, and conversely, such research provided by broker-dealers who
have executed transaction orders on behalf of other FMR clients may be
useful to FMR in carrying out its obligations to a fund. The
receipt of such research has not reduced FMR's normal independent
research activities; however, it enables FMR to avoid the additional
expenses that could be incurred if FMR tried to develop comparable
information through its own efforts.
Fixed-income securities are generally purchased from an issuer
or underwriter acting as princip al for the securities, on a net
basis with no brokerage commission paid. However, the dealer is
compensated by a difference between the security's original
purchase price and the selling price, the so-called "bid-asked
spread." Securities may also be purchased from
underwriters at price s that include underwriting fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions
that are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher
commissions, FMR must determine in good faith that such commissions
are reasonable in relation to the value of the brokerage and research
services provided by such executing broker-dealers, viewed in terms of
a particular transaction or FMR's overall responsibilities to
th at fund or its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value
on the brokerage and research services provided, or to determine what
portion of the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the funds or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services Japan LLC (FBSJ), indirect subsidiaries of FMR Corp.,
if the commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers
(including affiliates of FMR) who have entered into
arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by a fund toward the
reduction of th at fund's expenses . The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
The Trustees of each fund periodically review FMR's
performance of its responsibilities in connection with the placement
of portfolio transactions on behalf of the fund and review the
commissions paid by the fund over representative periods of
time to determine if they are reasonable in relation to the benefits
to the fund.
For the fiscal periods ended February 28, 1998 and 1997 the portfolio
turnover rates for the stock funds (except Business Services and
Outsourcing, Cyclical Industries and National Resources for 1997
and Medical Equipment and Systems for 1997 and 1998) are
presented in the table below. The stock funds' annual portfolio
turnover rates may be substantially greater than those of other equity
investment companies. The significantly higher or lower portfolio
turnover rates from year to year are primarily the result of
fluctuations in asset levels and FMR's assessment of changing economic
conditions throughout each year for various industries. High turnover
may also be the result of short-term shareholder trading activity
which increases brokerage and operating costs. This shareholder
activity may also result in required purchases or sales of portfolio
securities at disadvantageous times. Business Services and
Outsourcing's and Medical Equipment and System's annualized
turnover rates for its first full fiscal period are not
expected to exceed 200%.
TURNOVER RATES FISCAL 1998 FISCAL 1997
AIR TRANSPORTATION 294 % 469 %
AMERICAN GOLD 89 % 63 %
AUTOMOTIVE 153 % 175 %
BIOTECHNOLOGY 162 % 41 %
BROKERAGE AND INVESTMENT MANAGEMENT 100 % 16 %
BUSINESS SERVICES AND OUTSOURCING 36%A N/A
CHEMICALS 31 % 207 %
COMPUTERS 333 % 255 %
CONSTRUCTION AND HOUSING 404 % 270 %
CONSUMER INDUSTRIES 199 % 340 %
CYCLICAL INDUSTRIES 140 % A N/A
DEFENSE AND AEROSPACE 311 % 219 %
DEVELOPING COMMUNICATIONS 383 % 202 %
ELECTRONICS 435 % 341 %
ENERGY 115 % 87 %
ENERGY SERVICE 78 % 167 %
ENVIRONMENTAL SERVICES 59 % 252 %
FINANCIAL SERVICES 84 % 80 %
FOOD AND AGRICULTURE 74 % 91 %
HEALTH CARE 79 % 59 %
HOME FINANCE 54 % 78 %
INDUSTRIAL EQUIPMENT 115 % 261 %
INDUSTRIAL MATERIALS 118% 105%
INSURANCE 157% 142%
LEISURE 209% 127%
MEDICAL DELIVERY 109% 78%
MULTIMEDIA 219 % 99 %
NATURAL GAS 118 % 283 %
NATURAL RESOURCES 165 % A N/A
PAPER AND FOREST PRODUCTS 235 % 180 %
PRECIOUS METALS AND MINERALS 84 % 54 %
REGIONAL BANKS 25 % 43 %
RETAILING 308 % 278 %
SOFTWARE AND COMPUTER SERVICES 145 % 279 %
TURNOVER RATES FISCAL 1998 FISCAL 1997
TECHNOLOGY 556 % 549 %
TELECOMMUNICATIONS 157 % 175 %
TRANSPORTATION 210 % 148 %
UTILITIES GROWTH 78 % 31 %
A Annualized
The following tables show the brokerage commissions paid by the funds.
Significant changes in brokerage commissions paid by a fund from year
to year may result from changing asset levels throughout the year. A
fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.
Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund and the total amount of
brokerage commissions paid by each fund to NFSC and FBS for the past
three fiscal years. The second table shows the approximate percentage
of aggregate brokerage commissions paid by a fund to NFSC and FBS for
transactions involving the approximate percentage of the aggregate
dollar amount of transactions for which the fund paid brokerage
commissions for the fiscal year ended 1998. NFSC and FBS are paid on a
commission basis. The second table also shows the dollar amount of
brokerage commissions paid to firms that provided research services
and the approximate dollar amount of the transactions involved for the
fiscal year ended 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL PERIOD ENDED FEBRUARY 28 /29 TOTAL TO NFSC TO FBS
AIR TRANSPORTATION
1998 $ 377,945 $ 70,756 $ 0
1997 $ 588,326 $ 110,395 $ 609
1996 $ 686,690 $ 108,868 $ 12,126
AMERICAN GOLD
1998 $ 1,178,299 $ 91,784 $ 0
1997 $ 898,281 $ 82,611 $ 0
1996 $ 890,082 $ 341,569 $ 0
AUTOMOTIVE
1998 $ 220,182 $ 36,417 $ 0
1997 $ 422,985 $ 66,744 $ 23,371
1996 $ 101,868 $ 13,306 $ 9,408
BIOTECHNOLOGY
1998 $ 843,401 $ 114,067 $ 15,773
1997 $ 466,616 $ 62,674 $ 1,784
1996 $ 514,556 $ 141,230 $ 22,319
BROKERAGE AND INVESTMENT MANAGEMENT
1998 $ 735,065 $ 86,544 $ 11,262
1997 $ 318,063 $ 61,662 $ 0
1996 $ 152,008 $ 18,355 $ 0
BUSINESS SERVICES AND OUTSOURCING
1998 * $ 3,710 $ 45 $ 0
CHEMICALS
1998 $ 101,154 $ 12,782 $ 17,404
1997 $ 442,545 $ 71,711 $ 31,240
1996 $ 148,858 $ 69,929 $ 452
COMPUTERS
1998 $ 1,763,117 $ 240,381 $ 0
1997 $ 1,247,598 $ 198,215 $ 0
1996 $ 666,974 $ 88,690 $ 0
CONSTRUCTION AND HOUSING
1998 $ 218,917 $ 46,802 $ 0
1997 $ 348,359 $ 63,646 $ 0
1996 $ 145,931 $ 27,836 $ 0
CONSUMER INDUSTRIES
1998 $ 76,547 $ 15,031 $ 0
1997 $ 121,479 $ 29,979 $ 0
1996 $ 227,375 $ 91,856 $ 0
CYCLICAL INDUSTRIES
1998** $ 5,529 $ 470 $ 0
</TABLE>
* Business Services and Outsourcing commenced operations on
February 4, 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL PERIOD ENDED FEBRUARY 28 /29 TOTAL TO NFSC TO FBS
DEFENSE AND AEROSPACE
1998 $ 321,753 $ 60,895 $ 0
1997 $ 170,650 $ 24,182 $ 0
1996 $ 84,977 $ 36,879 $ 0
DEVELOPING COMMUNICATIONS
1998 $ 699,196 $ 100,909 $ 3,085
1997 $ 657,790 $ 92,344 $ 24,230
1996 $ 842,041 $ 190,186 $ 10,041
ELECTRONICS
1998 $ 8,057,183 $ 1,038,942 $ 0
1997 $ 2,768,382 $ 595,711 $ 0
1996 $ 2,508,628 $ 395,989 $ 0
</TABLE>
ENERGY
1998 $ 481,212 $ 56,921 $ 0
1997 $ 275,437 $ 53,327 $ 0
1996 $ 212,221 $ 60,047 $ 0
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ENERGY SERVICE
1998 $ 1,428,931 $ 208,445 $ 0
1997 $ 971,677 $ 263,380 $ 1,026
1996 $ 708,875 $ 376,373 $ 0
ENVIRONMENTAL SERVICES
1998 $ 53,033 $ 4,927 $ 0
1997 $ 240,792 $ 42,243 $ 0
1996 $ 128,959 $ 36,310 $ 0
FINANCIAL SERVICES
1998 $ 467,674 $ 58,925 $ 0
1997 $ 330,933 $ 77,580 $ 0
1996 $ 286,790 $ 115,231 $ 0
FOOD AND AGRICULTURE
1998 $ 271,283 $ 44,060 $ 0
1997 $ 439,321 $ 97,562 $ 0
1996 $ 367,085 $ 213,864 $ 0
HEALTH CARE
1998 $ 1,780,678 $ 202,696 $ 39,030
1997 $ 1,330,539 $ 208,545 $ 19,436
1996 $ 946,588 $ 226,621 $ 63,489
HOME FINANCE
1998 $ 999,285 $ 222,404 $ 11,072
1997 $ 824,781 $ 201,617 $ 0
1996 $ 584,457 $ 139,402 $ 0
INDUSTRIAL EQUIPMENT
1998 $ 186,022 $ 28,906 $ 0
1997 $ 372,936 $ 78,288 $ 1,152
1996 $ 178,940 $ 65,425 $ 0
INDUSTRIAL MATERIALS
1998 $ 138,995 $ 19,267 $ 0
1997 $ 281,500 $ 37,253 $ 0
1996 $ 628,984 $ 112,184 $ 4,705
INSURANCE
1998 $ 249,991 $ 41,261 $ 4,571
1997 $ 51,916 $ 12,029 $ 0
1996 $ 52,255 $ 28,422 $ 0
</TABLE>
** Cyclical Industries commenced operations on March 3, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL PERIOD ENDED FEBRUARY 28 /29 TOTAL TO NFSC TO FBS
LEISURE
1998 $ 444,121 $ 113,958 $ 0
1997 $ 234,434 $ 56,198 $ 0
1996 $ 241,001 $ 61,874 $ 0
</TABLE>
MEDICAL DELIVERY
1998 $ 294,080 $ 54,751 $ 0
1997 $ 409,668 $ 62,985 $ 0
1996 $ 430,449 $ 101,216 $ 0
MULTIMEDIA
1998 $ 213,979 $ 40,201 $ 0
1997 $ 181,181 $ 19,584 $ 0
1996 $ 429,967 $ 76,336 $ 0
NATURAL GAS
1998 $ 246,019 $ 38,095 $ 0
1997 $ 591,400 $ 75,903 $ 904
1996 $ 175,038 $ 87,403 $ 0
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NATURAL RESOURCES
1998*** $ 23,485 $ 1,465 $ 0
PAPER AND FOREST PRODUCTS
1998 $ 118,872 $ 11,543 $ 0
1997 $ 104,451 $ 22,646 $ 1,146
1996 $ 175,147 $ 40,660 $ 1,839
PRECIOUS METALS AND MINERALS
1998 $ 736,052 $ 34,762 $ 0
1997 $ 655,032 $ 43,075 $ 0
1996 $ 668,532 $ 179,259 $ 0
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REGIONAL BANKS
1998 $ 372,550 $ 70,122 $ 0
1997 $ 385,163 $ 86,165 $ 0
1996 $ 346,066 $ 101,949 $ 0
RETAILING
1998 $ 721,512 $ 132,299 $ 0
1997 $ 1,026,572 $ 250,241 $ 0
1996 $ 144,844 $ 55,131 $ 0
SOFTWARE AND COMPUTER SERVICES
1998 $ 444,769 $ 71,604 $ 0
1997 $ 559,248 $ 86,634 $ 0
1996 $ 317,440 $ 42,554 $ 0
TECHNOLOGY
1998 $ 2,228,245 $ 349,497 $ 0
1997 $ 1,737,289 $ 339,229 $ 574
1996 $ 407,855 $ 55,981 $ 586
TELECOMMUNICATIONS
1998 $ 1,091,330 $ 81,847 $ 0
1997 $ 1,288,951 $ 103,768 $ 58,688
1996 $ 476,696 $ 113,105 $ 1,744
TRANSPORTATION
1998 $ 144,625 $ 18,070 $ 0
1997 $ 23,737 $ 4,001 $ 44
1996 $ 34,585 $ 7,224 $ 127
UTILITIES GROWTH
1998 $ 317,455 $ 29,653 $ 1,975
1997 $ 167,248 $ 23,690 $ 2,643
1996 $ 334,639 $ 100,887 $ 6,273
</TABLE>
*** Natural Resources commenced operations on March 3, 1997.
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
FISCAL
PERIOD ENDED
FEBRUARY 28, 1998
% OF % OF % OF % OF $ AMOUNT OF $ AMOUNT OF
AGGREGATE AGGREGATE AGGREGATE AGGREGATE COMMISSIONS BROKERAGE
COMMISSIONS COMMISSIONS DOLLAR DOLLAR PAID TO FIRMS TRANSACTIONS
PAID PAID AMOUNT OF AMOUNT OF THAT PROVIDED INVOLVED*
TO NFSC TO FBS TRANSACTIONS TRANSACTIONS RESEARCH
EFFECTED EFFECTED SERVICES *
THROUGH THROUGH
NFSC FBS
AIR TRANSPORTATION
19%(DAGGER) 0 % 25 % 0 % $ 346,898 $ 304,720,538
AMERICAN GOLD
8%(DAGGER) 0 % 14 % 0 % $ 1,169,591 $ 467,823,833
AUTOMOTIVE
17%(DAGGER) 0 % 25 % 0 % $ 203,500 $ 160,924,125
BIOTECHNOLOGY
14%(DAGGER) 2 % A 21 % 1 % $ 816,866 $ 693,427,995
BROKERAGE AND INVESTMENT
12%(DAGGER) 2 % A 21 % 1 % $ 720,411 $ 762,188,589
MANAGEMENT
BUSINESS SERVICES AND
1 % 0 % 1 % 0 % $ 1,063 $ 958,597
OUTSOURCING
CHEMICALS
13%(DAGGER) 17 % A 20 % 10 % $ 94,756 $ 73,896,226
COMPUTERS
14%(DAGGER) 0 % 21 % 0 % $ 1,738,078 $ 1,685,227,073
CONSTRUCTION AND HOUSING
21%(DAGGER) 0 % 25 % 0 % $ 200,175 $ 138,935,564
CONSUMER INDUSTRIES
20 % 0 % 19 % 0 % $ 58,289 $ 56,729,040
CYCLICAL INDUSTRIES
8 % 0 % 8 % 0 % $ 3,622 $ 3,452,406
DEFENSE AND AEROSPACE
19%(DAGGER) 0 % 23 % 0 % $ 308,647 $ 243,750,676
DEVELOPING COMMUNICATIONS
14%(DAGGER) 0 % 22 % 0 % $ 688,572 $ 637,309,629
ELECTRONICS
13%(DAGGER) 0 % 18 % 0 % $ 7,864,976 $ 7,482,280,530
ENERGY
12%(DAGGER) 0 % 19 % 0 % $ 448,819 $ 342,239,397
ENERGY SERVICE
15%(DAGGER) 0 % 22 % 0 % $ 1,356,634 $ 1,293,209,395
ENVIRONMENTAL SERVICES
9%(DAGGER) 0 % 12 % 0 % $ 45,591 $ 22,718,281
FINANCIAL SERVICES
13%(DAGGER) 0 % 17 % 0 % $ 457,059 $ 612,443,218
FOOD AND AGRICULTURE
16%(DAGGER) 0 % 20 % 0 % $ 241,455 $ 230,599,700
HEALTH CARE
11%(DAGGER) 2 % A 21 % 1 % $ 1,747,538 $ 1,902,925,918
HOME FINANCE
22%(DAGGER) 1 % 32 % 1 % $ 972,071 $ 845,696,497
INDUSTRIAL E QUIPMENT
16%(DAGGER) 0 % 21 % 0 % $ 170,625 $ 114,891,400
INDUSTRIAL MATERIALS
14%(DAGGER) 0 % 25 % 0 % $ 130,732 $ 78,654,571
INSURANCE
17%(DAGGER) 2 % A 26 % 0 % $ 232,329 $ 270,735,045
LEISURE
26%(DAGGER) 0 % 35 % 0 % $ 426,683 $ 369,654,208
MEDICAL DELIVERY
19%(DAGGER) 0 % 25 % 0 % $ 281,713 $ 221,061,361
MULTIMEDIA
19%(DAGGER) 0 % 22 % 0 % $ 196,384 $ 162,436,969
NATURAL GAS
15%(DAGGER) 0 % 23 % 0 % $ 231,994 $ 155,846,249
NATURAL RESOURCES
6%(DAGGER) 0 % 9 % 0 % $ 19,284 $ 11,869,955
PAPER AND FOREST PRODUCTS
10%(DAGGER) 0 % 16 % 0 % $ 99,857 $ 65,004,866
PRECIOUS METALS AND MINERALS
5%(DAGGER) 0 % 9 % 0 % $ 723,594 $ 279,584,462
REGIONAL BANKS
19%(DAGGER) 0 % 26 % 0 % $ 361,346 $ 545,005,513
RETAILING
18%(DAGGER) 0 % 26 % 0 % $ 682,531 $ 634,373,031
SOFTWARE AND COMPUTER SERVICES
16%(DAGGER) 0 % 19 % 0 % $ 423,811 $ 466,683,442
TECHNOLOGY
16%(DAGGER) 0 % 22 % 0 % $ 2,157,586 $ 2,241,458,825
TELECOMMUNICATIONS
8%(DAGGER) 0 % 13 % 0 % $ 1,013,427 $ 764,786,405
TRANSPORTATION
13%(DAGGER) 0 % 17 % 0 % $ 126,130 $ 120,411,403
UTILITIES GROWTH
9%(DAGGER) 1 % A 13 % 0 % $ 309,392 $ 292,243,978
</TABLE>
* The provisions of research services was not necessarily a factor
in the placement of all this business with such firms.
(dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar mount of transactions effected through NFSC is a result of the
low commission rates charged by NFSC.
A Broker-dealer affiliates of FMR have used a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer
agent fees.
The Trustees of each fund have approved procedures in conformity
with Rule 10F-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for such underwritings where and FMR
affiliate participates as a principal underwriter, certain
restrictions may apply that could, among other things, limit the
amount of securities that the funds could purchase in the
underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from
those of other funds managed by FMR or accounts managed by FMR
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or accounts. Simultaneous
transactions are inevitable when several funds and accounts are
managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one
fund or account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
FSC normally determines each stock fund's net asset value per share
(NAV) hourly during business hours observed by the New York Stock
Exchange (NYSE). Currently, the NYSE is open from 9:30 a.m. to 4:00
p.m. Eastern time, Monday through Friday. The Board of Trustees has
approved the following "valuation times" for the determination of each
stock fund's NAV: 10:00 a.m., 11:00 a.m., 12:00 noon, 1:00 p.m., 2:00
p.m., 3:00 p.m., and 4:00 p.m. FSC normally determines the money
market fund's NAV as of the close of the NYSE (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as
of these times for the purpose of computing each fund's NAV.
STOCK FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade. Most
equity securities for which the primary market is the United States
are valued at last sale price or, if no sale has occurred, at the
closing bid price. Most equity securities for which the primary market
is outside the United States are valued using the official closing
price or the last sale price in the principal market in which they are
traded. If the last sale price (on the local exchange) is unavailable,
the last evaluated quote or last bid price normally is used.
Securities of other open-end investment companies are valued at their
respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currencies into U.S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV. If an extraordinary event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then
that security will be valued as determined in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. In addition, securities and other assets for which
there is no readily available market value may be valued in good faith
by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities
owned by a fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
MONEY MARKET FUND. Portfolio securities and other assets are valued on
the basis of amortized cost. This technique involves initially valuing
an instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than its current market value. The
amortized cost value of an instrument may be higher or lower than the
price the fund would receive if it sold the instrument.
Securities of other open-end investment companies are valued at their
respective NAVs.
During periods of declining interest rates, the fund's yield based on
amortized cost valuation may be higher than would result if the fund
used market valuations to determine its NAV. The converse would apply
during periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use
of the term "money market fund" are permitted pursuant to Rule 2a-7
under the 1940 Act. The fund must adhere to certain conditions under
Rule 2a-7, as summarized in the section entitled "Quality and
Maturity" on page 15 .
The Board of Trustees oversees FMR's adherence to the provisions of
Rule 2a-7 and has established procedures designed to stabilize the
fund's NAV at $1.00. At such intervals as they deem appropriate, the
Trustees consider the extent to which NAV calculated by using market
valuations would deviate from $1.00 per share. If the Trustees believe
that a deviation from the fund's amortized cost per share may result
in material dilution or other unfair results to shareholders, the
Trustees have agreed to take such corrective action, if any, as they
deem appropriate to eliminate or reduce, to the extent reasonably
practicable, the dilution or unfair results. Such corrective action
could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind;
establishing NAV by using available market quotations; and such other
measures as the Trustees may deem appropriate.
PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. The share price of a
stock fund , the yield of a money market fund, and total
return fluctuate in response to market conditions and other
factors , and the value of a stock fund's shares when redeemed may
be more or less than their original cost.
YIELD CALCULATIONS (MONEY MARKET FUND) . To compute the
yield for a money market fund for a period, the net change in
value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one
original share and dividends declared on both the original share and
any additional shares. The net change is then divided by the value of
the account at the beginning of the period to obtain a base period
return. This base period return is annualized to obtain a current
annualized yield. A money market fund may calculate an
effective yield by compounding the base period return over a one-year
period. In addition to the current yield, the fund may quote yields in
advertising based on any historical seven-day period. Yields for the
fund are calculated on the same basis as other money market funds, as
required by applicable regulations.
Yield information may be useful in reviewing a fund's performance and
in providing a basis for comparison with other investment
alternatives. However, the fund's yield fluctuates, unlike
investments that pay a fixed interest rate over a stated period of
time. When comparing investment alternatives, investors should also
note the quality and maturity of the portfolio securities of
respective investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
the fund's yield will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest rates the
fund's yield will tend to be somewhat lower. Also, when interest rates
are falling, the inflow of net new money to the fund from the
continuous sale of its shares will likely be invested in instruments
producing lower yields than the balance of the fund's holdings,
thereby reducing the fund's current yield. In periods of rising
interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect
all aspects of a fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in a
fund's NAV over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a
hypothetical historical investment in a fund over a stated period, and
then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in
value had been constant over the period. For example, a cumulative
total return of 100% over ten years would produce an average annual
total return of 7.18%, which is the steady annual rate of return that
would equal 100% growth on a compounded basis in ten years. Average
annual total returns covering periods of less than one year are
calculated by determining a fund's total return for the period,
extending that return for a full year (assuming that return remains
constant over the year), and quoting the result as an annual return.
While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a fund's
performance is not constant over time, but changes from year to year,
and that average annual total returns represent averaged figures as
opposed to the actual year-to-year performance of a fund.
In addition to average annual total returns, a fund may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions
to total return. Total returns may be quoted on a before-tax or
after-tax basis and may be quoted with or without taking each fund's
3.00% maximum sales charge into account, and may or may not include
the effect of a stock fund's trading fee. Excluding a fund's sales
charge or trading fee from a total return calculation produces a
higher total return figure. Total returns, yields, and other
performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to
exhibit performance. An adjusted NAV includes any distributions paid
by a fund and reflects all elements of its return. Unless otherwise
indicated, a fund's adjusted NAVs are not adjusted for sales charges,
if any.
MOVING AVERAGES. A stock fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average.
As of February 27, 1998, the 13-week and 39-week short-term
moving averages are shown below:
FUND NAME 13-WEEK SHORT-TERM 39-WEEK SHORT-TERM
MOVING AVERAGE MOVING AVERAGE
AIR TRANSPORTATION $ 24.59 $ 22.47
AMERICAN GOLD $ 14.51 $ 18.12
AUTOMOTIVE $ 25.62 $ 25.46
BIOTECHNOLOGY $ 32.82 $ 31.73
BROKERAGE AND INVESTMENT MANAGEMENT $ 36.35 $ 33.44
CHEMICALS $ 43.53 $ 43.76
COMPUTERS $ 36.77 $ 40.18
CONSTRUCTION AND HOUSING $ 23.42 $ 22.46
CONSUMER INDUSTRIES $ 25.62 $ 23.76
CYCLICAL INDUSTRIES $ 11.22 $ 11.25
DEFENSE AND AEROSPACE $ 33.83 $ 33.46
DEVELOPING COMMUNICATIONS $ 18.48 $ 19.11
ELECTRONICS $ 31.79 $ 34.79
ENERGY $ 20.39 $ 21.13
ENERGY SERVICE $ 27.78 $ 29.05
ENVIRONMENTAL SERVICES $ 15.86 $ 15.94
FINANCIAL SERVICES $ 96.21 $ 89.39
FOOD AND AGRICULTURE $ 47.39 $ 44.95
HEALTH CARE $ 105.33 $ 99.88
HOME FINANCE $ 50.65 $ 48.32
INDUSTRIAL EQUIPMENT $ 23.87 $ 24.49
INDUSTRIAL MATERIALS $ 23.62 $ 24.38
INSURANCE $ 39.18 $ 36.98
LEISURE $ 57.77 $ 52.83
MEDICAL DELIVERY $ 25.91 $ 25.72
MULTIMEDIA $ 31.49 $ 29.39
NATURAL GAS $ 12.78 $ 13.40
NATURAL RESOURCES $ 10.08 $ 10.71
PAPER AND FOREST PRODUCTS $ 21.55 $ 22.40
PRECIOUS METALS AND MINERALS $ 9.75 $ 12.22
REGIONAL BANKS $ 40.75 $ 38.01
RETAILING $ 46.11 $ 42.74
SOFTWARE AND COMPUTER SERVICES $ 39.61 $ 39.48
TECHNOLOGY $ 47.27 $ 50.26
TELECOMMUNICATIONS $ 47.84 $ 44.67
TRANSPORTATION $ 27.09 $ 26.24
UTILITIES GROWTH $ 50.03 $ 45.88
CALCULATING HISTORICAL FUND RESULTS . The following table
shows performance for each fund calculated including certain fund
expenses. The money market fund's total return figures include the
effect of the fund's 3.00% sales charge. For each stock fund, total
returns include the effect of the fund's 3.00% sales charge and
trading fee, but do not include the effect of the fund's exchange
fee.
HISTORICAL FUND RESULTS. The following table shows the money
market fund's 7-day yield and each fund's total returns for periods
ended February 28, 1998.
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C>
SEVEN-DAY ONE FIVE TEN ONE FIVE TEN
YIELD YEAR YEARS YEARS/LIFE YEAR YEARS YEARS/LIFE
OF FUND OF FUND
AIR TRANSPORTATION
56.20% 18.15% 15.24% 56.20% 130.23% 313.03%
AMERICAN GOLD
-44.93% 2.30% 1.04% -44.93% 12.03% 10.93%
AUTOMOTIVE
19.02% 12.51% 14.59% 19.02% 80.30% 290.28%
BIOTECHNOLOGY
12.56% 14.10% 18.48% 12.56% 93.40% 445.20%
BROKERAGE AND INVESTMENT
52.76% 27.72% 21.49% 52.76% 239.84% 600.53%
MANAGEMENT
CHEMICALS
15.81% 18.21% 15.69% 15.81% 130.87% 329.62%
COMPUTERS
16.64% 29.48% 20.86% 16.64% 263.94% 565.04%
CONSTRUCTION AND HOUSING
35.76% 16.94% 16.68% 35.76% 118.66% 367.67%
CONSUMER INDUSTRIES
36.07% 20.22% 18.11%* 36.07% 151.10% 258.58%*
CYCLICAL INDUSTRIES
N/A N/A N/A N/A N/A 21.93%*
DEFENSE AND AEROSPACE
38.33% 26.58% 15.01% 38.33% 224.94% 304.97%
DEVELOPING
24.25% 17.83% 19.83%* 24.25% 127.10% 300.91%*
COMMUNICATIONS
ELECTRONICS
20.35% 35.63% 24.01% 20.35% 359.00% 760.18%
ENERGY
16.71% 13.27% 11.48% 16.71% 86.42% 196.43%
ENERGY SERVICE
43.90% 24.83% 14.62% 43.90% 203.16% 291.51%
ENVIRONMENTAL SERVICES
10.04% 8.20% 7.11%* 10.04% 48.32% 81.47%*
FINANCIAL SERVICES
36.78% 24.52% 21.25% 36.78% 199.34% 586.63%
FOOD AND AGRICULTURE
19.81% 18.22% 19.18% 19.81% 130.95% 478.25%
HEALTH CARE
32.31% 28.64% 22.91% 32.31% 252.25% 686.82%
HOME FINANCE
28.35% 29.54% 26.43% 28.35% 264.81% 943.60%
INDUSTRIAL EQUIPMENT
21.91% 22.08% 15.20% 21.91% 171.11% 311.66%
INDUSTRIAL MATERIALS
3.32% 12.12% 9.69% 3.32% 77.21% 152.20%
INSURANCE
38.45% 20.06% 19.65% 38.45% 149.44% 501.46%
LEISURE
42.80% 22.19% 17.44% 42.80% 172.36% 399.26%
MEDICAL DELIVERY
18.24% 24.09% 21.99% 18.24% 194.18% 629.88%
MULTIMEDIA
38.08% 20.75% 17.55% 38.08% 156.66% 403.86%
NATURAL GAS
5.40% N/A 6.78%* 5.40% N/A 37.56%*
NATURAL RESOURCES
N/A N/A N/A N/A N/A 4.01%*
PAPER AND FOREST PRODUCTS
11.99% 13.71% 10.52% 11.99% 90.15% 171.87%
PRECIOUS METALS AND
-49.20% 0.84% -0.99% -49.20% 4.30% -9.49%
MINERALS
REGIONAL BANKS
32.47% 25.16% 25.04% 32.47% 207.18% 834.50%
RETAILING
47.96% 18.01% 20.67% 47.96% 128.92% 554.82%
SOFTWARE AND COMPUTER
31.36% 23.78% 21.55% 31.36% 190.56% 603.94%
SERVICES
TECHNOLOGY
21.10% 23.88% 20.11% 21.10% 191.76% 525.10%
TELECOMMUNICATIONS
42.06% 20.47% 19.67% 42.06% 153.73% 502.17%
TRANSPORTATION
36.84% 16.91% 18.41% 36.84% 118.44% 441.64%
UTILITIES GROWTH
32.04% 15.06% 15.87% 32.04% 101.70% 336.09%
MONEY MARKET
5.26% 2.10% 3.91% 5.20% 2.10% 21.13% 65.97%
</TABLE>
* F rom commencement of operations (June 29, 1990 for Consumer
Industries and Developing Communications; June 29, 1989 for
Environmental Services; April 21, 1993 for Natural Gas; and March 3,
1997 for Cyclical Industries and Natural Resources) .
NOTE: If FMR had not reimbursed certain fund expenses during
certain of these periods, the total returns for Air Transportation,
Automotive, Biotechnology, Brokerage and Investment Management,
Chemicals, Computers, Construction and Housing, Consumers Industries,
Cyclical Industries, Defense and Aerospace, Developing Communications,
Electronics, Energy Service, Food and Agriculture, Home Finance,
Industrial Equipment, Industrial Materials, Insurance, Medical
Delivery, Multimedia, Natural Resources, Paper and Forest Products,
Regional Banks, Retailing, Software and Computer Services,
Telecommunications, and Transportation would have been lower.
The following tables show the income and capital elements of each
fund's cumulative total return. The tables compare each fund's return
to the record of the S&P 500, the Dow Jones Industrial Average (DJIA),
and the cost of living, as measured by the Consumer Price Index (CPI),
over the same period. The CPI information is as of the month-end
closest to the initial investment date for each fund. The S&P 500 and
DJIA comparisons are provided to show how each fund's total return
compared to the record of a broad unmanaged index of common stocks and
a narrower set of stocks of major industrial companies, respectively,
over the same period. Because the money market fund invests in
fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater growth
potential than the money market fund, but generally experience greater
price volatility, which means greater potential for loss. In addition,
common stocks generally provide lower income than a fixed-income
investment such as the money market fund. Each stock fund has the
ability to invest in securities not included in either index, and its
investment portfolio may or may not be similar in composition to the
indexes. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike the each fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the 10-year period ended
February 28, 1998 or life of fund, as applicable, assuming all
distributions were reinvested. Total returns are based on past
results and are not an indication of future performance. Tax
consequences of different investments (with the exception of foreign
tax withholdings) have not been factored into the figures below.
AIR TRANSPORTATION PORTFOLIO: During the 10-year period ended February
28, 1998, a hypothetical $10,000 investment in Air Transportation
Portfolio would have grown to $ 41,310 , including the effect of
the fund's 3.00% sales charge.
AIR TRANSPORTATION PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 31,203 $ 0 $ 10,107 $ 41,310 $ 52,255 $ 55,126 $ 13,957
2/28/97 20,585 0 5,057 25,642 38,706 43,612 13,759
2/29/96 24,523 0 5,665 30,188 30,680 34,062 13,353
2/28/95 16,182 0 3,305 19,487 22,776 24,329 13,009
2/28/94 19,888 0 2,372 22,260 21,216 22,621 12,647
2/28/93 15,799 0 1,600 17,399 19,583 19,350 12,336
2/29/92 16,449 0 1,160 17,609 17,695 18,210 11,948
2/28/91 13,789 0 673 14,462 15,253 15,558 11,621
2/28/90 12,662 0 618 13,280 13,304 13,649 11,034
2/28/89 12,523 0 0 12,523 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Air
Transportation Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 16,296 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 0 for dividends and $ 5,460 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
AMERICAN GOLD PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in American Gold Portfolio
would have grown to $ 11,100 , including the effect of the fund's
3.00% sales charge.
AMERICAN GOLD PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 10,298 $ 0 $ 802 $ 11,100 $ 52,255 $ 55,126 $ 13,957
2/28/97 19,149 0 375 19,524 38,706 43,612 13,759
2/29/96 18,402 0 0 18,402 30,680 34,062 13,353
2/28/95 12,517 0 0 12,517 22,776 24,329 13,009
2/28/94 15,382 0 0 15,382 21,216 22,621 12,647
2/28/93 9,605 0 0 9,605 19,583 19,350 12,336
2/29/92 9,164 0 0 9,164 17,695 18,210 11,948
2/28/91 9,238 0 0 9,238 15,253 15,558 11,621
2/28/90 12,055 0 0 12,055 13,304 13,649 11,034
2/28/89 10,616 0 0 10,616 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in American
Gold Portfolio on March 1, 1988, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 11,232 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 1,215 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
AUTOMOTIVE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Automotive Portfolio would
have grown to $ 39,035 , including the effect of the fund's 3.00%
sales charge.
AUTOMOTIVE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 24,676 $ 1,800 $ 12,559 $ 39,035 $ 52,255 $ 55,126 $ 13,957
2/28/97 22,774 1,554 7,464 31,792 38,706 43,612 13,759
2/29/96 19,606 1,151 5,605 26,362 30,680 34,062 13,353
2/28/95 17,803 1,045 5,089 23,937 22,776 24,329 13,009
2/28/94 22,864 1,266 3,254 27,384 21,216 22,621 12,647
2/28/93 18,565 980 1,447 20,992 19,583 19,350 12,336
2/29/92 15,398 758 874 17,030 17,695 18,210 11,948
2/28/91 11,073 545 0 11,618 15,253 15,558 11,621
2/28/90 10,561 368 0 10,929 13,304 13,649 11,034
2/28/89 10,840 0 0 10,840 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Automotive
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 20,661 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 897 for dividends and $ 7,555 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
BIOTECHNOLOGY PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Biotechnology Portfolio
would have grown to $ 54,527 , including the effect of the fund's
3.00% sales charge.
BIOTECHNOLOGY PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 31,679 $ 151 $ 22,697 $ 54,527 $ 52,255 $ 55,126 $ 13,957
2/28/97 31,422 150 15,390 46,962 38,706 43,612 13,759
2/29/96 33,588 121 10,658 44,367 30,680 34,062 13,353
2/28/95 23,218 18 7,367 30,603 22,776 24,329 13,009
2/28/94 25,337 21 8,040 33,398 21,216 22,621 12,647
2/28/93 20,740 16 6,581 27,337 19,583 19,350 12,336
2/29/92 30,238 24 4,416 34,678 17,695 18,210 11,948
2/28/91 23,291 0 1,220 24,511 15,253 15,558 11,621
2/28/90 13,289 0 220 13,509 13,304 13,649 11,034
2/28/89 9,838 0 0 9,838 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Biotechnology Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 29,306 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 110 for dividends and $ 14,766 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO: During the 10-year
period ended February 28, 1998, a hypothetical $10,000 investment in
Brokerage and Investment Management Portfolio would have grown to
$ 70,060, including the effect of the fund's 3.00% sales charge.
BROKERAGE AND INVESTMENT MANAGEMENT PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 53,518 $ 2,966 $ 13,576 $ 70,060 $ 52,255 $ 55,126 $ 13,957
2/28/97 34,656 1,803 8,007 44,466 38,706 43,612 13,759
2/29/96 24,876 1,204 4,742 30,822 30,680 34,062 13,353
2/28/95 20,866 955 1,916 23,737 22,776 24,329 13,009
2/28/94 23,880 1,092 2,193 27,165 21,216 22,621 12,647
2/28/93 19,131 862 0 19,993 19,583 19,350 12,336
2/29/92 17,207 775 0 17,982 17,695 18,210 11,948
2/28/91 11,166 492 0 11,658 15,253 15,558 11,621
2/28/90 11,193 347 0 11,540 13,304 13,649 11,034
2/28/89 11,166 135 0 11,301 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Brokerage
and Investment Management Portfolio on March 1, 1988, assuming the
3.00% sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 17,279 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 740 for
dividends and $ 5,610 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
CHEMICALS PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Chemicals Portfolio would
have grown to $ 42,969 , including the effect of the fund's 3.00%
sales charge.
CHEMICALS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 22,903 $ 1,363 $ 18,703 $ 42,969 $ 52,255 $ 55,126 $ 13,957
2/28/97 21,221 1,255 13,492 35,968 38,706 43,612 13,759
2/29/96 19,724 1,075 10,460 31,259 30,680 34,062 13,353
2/28/95 16,920 865 6,736 24,521 22,776 24,329 13,009
2/28/94 15,797 652 5,864 22,313 21,216 22,621 12,647
2/28/93 14,281 440 3,327 18,048 19,583 19,350 12,336
2/29/92 15,912 290 1,628 17,830 17,695 18,210 11,948
2/28/91 12,893 144 954 13,991 15,253 15,558 11,621
2/28/90 11,262 76 538 11,876 13,304 13,649 11,034
2/28/89 11,406 0 0 11,406 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Chemicals
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 24,837 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 704 for dividends and $9,949 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
COMPUTERS PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Computers Portfolio would
have grown to $ 66,511 , including the effect of the fund's 3.00%
sales charge.
COMPUTERS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 34,771 $ 893 $ 30,847 $ 66,511 $ 52,255 $ 55,126 $ 13,957
2/28/97 40,840 1,049 13,387 55,276 38,706 43,612 13,759
2/29/96 34,729 892 8,967 44,588 30,680 34,062 13,353
2/28/95 25,960 667 2,555 29,182 22,776 24,329 13,009
2/28/94 22,870 588 2,251 25,709 21,216 22,621 12,647
2/28/93 17,055 439 230 17,724 19,583 19,350 12,336
2/29/92 16,742 430 226 17,398 17,695 18,210 11,948
2/28/91 13,924 127 0 14,051 15,253 15,558 11,621
2/28/90 10,293 0 0 10,293 13,304 13,649 11,034
2/28/89 9,268 0 0 9,268 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Computers
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 36,577 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 330 for dividends and $ 19,882 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
CONSTRUCTION AND HOUSING PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Construction
and Housing Portfolio would have grown to $ 46,775 , including
the effect of the fund's 3.00% sales charge.
CONSTRUCTION AND HOUSING PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 23,655 $ 873 $ 22,247 $ 46,775 $ 52,255 $ 55,126 $ 13,957
2/28/97 20,304 714 12,384 33,402 38,706 43,612 13,759
2/29/96 18,053 606 9,495 28,154 30,680 34,062 13,353
2/28/95 15,496 438 7,186 23,120 22,776 24,329 13,009
2/28/94 18,292 517 7,627 26,436 21,216 22,621 12,647
2/28/93 14,527 410 5,805 20,742 19,583 19,350 12,336
2/29/92 12,607 356 5,025 17,988 17,695 18,210 11,948
2/28/91 10,429 295 3,070 13,794 15,253 15,558 11,621
2/28/90 10,494 123 1,720 12,337 13,304 13,649 11,034
2/28/89 11,269 60 268 11,597 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Construction and Housing Portfolio on March 1, 1988, assuming the
3.00% sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $24,543. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $378 for dividends and $9,691 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
CONSUMER INDUSTRIES PORTFOLIO: During the period from June 29, 1990
(commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Consumer Industries Portfolio would have grown
to $ 35,866 , including the effect of the fund's 3.00% sales
charge.
CONSUMER INDUSTRIES PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 26,491 $ 200 $ 9,175 $ 35,866 $ 36,003 $ 36,385 $ 12,463
2/28/97 20,040 152 5,361 25,553 26,669 28,785 12,286
2/29/96 17,305 130 4,630 22,065 21,138 22,483 11,925
2/28/95 13,493 82 3,397 16,972 15,693 16,058 11,617
2/28/94 14,783 90 2,916 17,789 14,618 14,931 11,293
2/28/93 12,581 77 1,193 13,851 13,492 12,772 11,016
2/29/92 13,512 83 241 13,836 12,191 12,019 10,670
2/28/91* 10,505 65 0 10,570 10,509 10,269 10,377
</TABLE>
* From June 29, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Consumer
Industries Portfolio on June 29, 1990, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 15,615 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 78 for dividends and $ 4,772 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
CYCLICAL INDUSTRIES PORTFOLIO: During the period from March 3, 1997
(commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Consumer Industries Portfolio would have grown
to $12, 200 , including the effect of the fund's 3.00% sales
charge.
CYCLICAL INDUSTRIES PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 11,708 $ 0 $ 492 $ 12,200 $ 13,422 $ 12,563 $ 10,144
</TABLE>
* From March 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Consumer
Industries Portfolio on March 3, 1997, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $10,44 6 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 0 for dividends and $4 4 6 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
DEFENSE AND AEROSPACE PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Defense and
Aerospace Portfolio would have grown to $40, 504 , including the
effect of the fund's 3.00% sales charge.
DEFENSE AND AEROSPACE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 29,701 $ 585 $ 10,218 $ 40,504 $ 52,255 $ 55,126 $ 13,957
2/28/97 22,878 451 5,059 28,388 38,706 43,612 13,759
2/29/96 21,321 420 2,759 24,500 30,680 34,062 13,353
2/28/95 15,526 307 789 16,622 22,776 24,329 13,009
2/28/94 15,131 298 533 15,962 21,216 22,621 12,647
2/28/93 11,921 168 0 12,089 19,583 19,350 12,336
2/29/92 11,803 165 0 11,968 17,695 18,210 11,948
2/28/91 10,238 99 0 10,337 15,253 15,558 11,621
2/28/90 9,241 0 0 9,241 13,304 13,649 11,034
2/28/89 9,289 0 0 9,289 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Defense
and Aerospace Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amo unt invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $17,51 2 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $22 1 for
dividends and $6,26 1 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
DEVELOPING COMMUNICATIONS PORTFOLIO: During the period from June 29,
1990 (commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Developing Communications Portfolio would have
grown to $ 40,099 , including the effect of the fund's 3.00%
sales charge.
DEVELOPING COMMUNICATIONS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 19,536 $ 0 $ 20,563 $ 40,099 $ 36,003 $ 36,385 $ 12,463
2/28/97 19,089 0 12,195 31,284 26,669 28,785 12,286
2/29/96 18,837 0 12,034 30,871 21,138 22,483 11,925
2/28/95 19,788 0 5,549 25,337 15,693 16,058 11,617
2/28/94 19,061 0 3,238 22,299 14,618 14,931 11,293
2/28/93 15,947 0 1,174 17,121 13,492 12,772 11,016
2/29/92 13,997 0 1,002 14,999 12,191 12,019 10,670
2/28/91* 10,777 0 0 10,777 10,509 10,269 10,377
</TABLE>
* From June 29, 1990 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Developing
Communications Portfolio on June 29, 1990, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 27,762 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 12,911 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
ELECTRONICS PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Electronics Portfolio would
have grown to $ 86,025 , including the effect of the fund's 3.00%
sales charge.
ELECTRONICS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 44,483 $ 55 $ 41,487 $ 86,025 $ 52,255 $ 55,126 $ 13,957
2/28/97 48,246 59 20,988 69,293 38,706 43,612 13,759
2/29/96 35,825 44 15,585 51,454 30,680 34,062 13,353
2/28/95 25,172 31 4,583 29,786 22,776 24,329 13,009
2/28/94 22,464 28 4,090 26,582 21,216 22,621 12,647
2/28/93 18,154 23 0 18,177 19,583 19,350 12,336
2/29/92 16,616 20 0 16,636 17,695 18,210 11,948
2/28/91 12,904 16 0 12,920 15,253 15,558 11,621
2/28/90 10,997 0 0 10,997 13,304 13,649 11,034
2/28/89 8,696 0 0 8,696 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Electronics Portfolio on March 1, 198 8 , assuming the 3.00%
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 41,305 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 13 for
dividends and $ 23,138 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
ENERGY PORTFOLIO: During the 10-year period ended February 28, 1998, a
hypothetical $10,000 investment in Energy Portfolio would have grown
to $ 29,650 , including the effect of the fund's 3.00% sales
charge.
ENERGY PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 17,383 $ 1,886 $ 10,381 $ 29,650 $ 52,255 $ 55,126 $ 13,957
2/28/97 17,473 1,786 5,368 24,627 38,706 43,612 13,759
2/29/96 15,554 1,460 3,449 20,463 30,680 34,062 13,353
2/28/95 13,201 1,135 2,586 16,922 22,776 24,329 13,009
2/28/94 13,718 1,060 2,137 16,915 21,216 22,621 12,647
2/28/93 12,988 975 1,458 15,421 19,583 19,350 12,336
2/29/92 11,619 614 1,305 13,538 17,695 18,210 11,948
2/28/91 12,685 509 1,405 14,599 15,253 15,558 11,621
2/28/90 14,111 429 187 14,727 13,304 13,649 11,034
2/28/89 10,799 282 0 11,081 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Energy
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 20,623 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 1,181 for dividends and $ 6,978 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
ENERGY SERVICE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Energy Service Portfolio
would have grown to $ 39,159 , including the effect of the fund's
3.00% sales charge.
ENERGY SERVICE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 31,826 $ 361 $ 6,972 $ 39,159 $ 52,255 $ 55,126 $ 13,957
2/28/97 23,239 263 2,880 26,382 38,706 43,612 13,759
2/29/96 18,276 197 1,475 19,948 30,680 34,062 13,353
2/28/95 13,596 108 632 14,336 22,776 24,329 13,009
2/28/94 13,244 79 0 13,323 21,216 22,621 12,647
2/28/93 12,506 20 0 12,526 19,583 19,350 12,336
2/29/92 10,654 18 0 10,672 17,695 18,210 11,948
2/28/91 15,334 25 0 15,359 15,253 15,558 11,621
2/28/90 13,948 0 0 13,948 13,304 13,649 11,034
2/28/89 9,166 0 0 9,166 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Energy
Service Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 14,701 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 159 for dividends and $ 4,078 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
ENVIRONMENTAL SERVICES PORTFOLIO: During the period from June 29, 1989
(commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Environmental Services Portfolio would have
grown to $ 18,154 , including the effect of the fund's 3.00%
sales charge.
ENVIRONMENTAL SERVICES PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 15,966 $ 14 $ 2,174 $ 18,154 $ 41,719 $ 44,268 $ 13,046
2/28/97 14,065 12 1,915 15,992 30,902 35,022 12,861
2/29/96 12,047 11 1,619 13,677 24,494 27,353 12,482
2/28/95 9,962 9 757 10,728 18,184 19,537 12,160
2/28/94 11,572 10 880 12,462 16,938 18,166 11,821
2/28/93 11,019 10 838 11,867 15,634 15,539 11,531
2/29/92 12,649 11 486 13,146 14,127 14,623 11,168
2/28/91 12,600 11 0 12,611 12,178 12,493 10,862
2/28/90* 10,554 9 0 10,563 10,622 10,960 10,314
</TABLE>
* From June 29, 1989 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in
Environmental Services Portfolio on June 29, 1989, assuming the 3.00%
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,512 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 10 for
dividends and $ 1,436 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
FINANCIAL SERVICES PORTFOLIO: During the 10-year period ended February
28, 1998, a hypothetical $10,000 investment in Financial Services
Portfolio would have grown to $ 68,670 , including the effect of
the fund's 3.00% sales charge.
FINANCIAL SERVICES PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 36,697 $ 5,396 $ 26,577 $ 68,670 $ 52,255 $ 55,126 $ 13,957
2/28/97 29,470 3,965 15,238 48,673 38,706 43,612 13,759
2/29/96 23,344 2,817 9,750 35,911 30,680 34,062 13,353
2/28/95 17,137 1,913 6,776 25,826 22,776 24,329 13,009
2/28/94 18,206 1,683 4,773 24,662 21,216 22,621 12,647
2/28/93 18,935 1,657 1,655 22,247 19,583 19,350 12,336
2/29/92 14,848 1,119 93 16,060 17,695 18,210 11,948
2/28/91 10,034 643 63 10,740 15,253 15,558 11,621
2/28/90 10,581 425 66 11,072 13,304 13,649 11,034
2/28/89 9,963 295 0 10,258 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Financial
Services Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 28,120 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 1,759 for dividends and $ 11,015 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
FOOD AND AGRICULTURE PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Food and
Agriculture Portfolio would have grown to $ 57,832 , including
the effect of the fund's 3.00% sales charge.
FOOD AND AGRICULTURE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 29,796 $ 1,953 $ 26,083 $ 57,832 $ 52,255 $ 55,126 $ 13,957
2/28/97 27,183 1,373 18,240 46,796 38,706 43,612 13,759
2/29/96 25,730 1,052 14,415 41,197 30,680 34,062 13,353
2/28/95 19,858 653 9,358 29,869 22,776 24,329 13,009
2/28/94 19,223 559 7,339 27,121 21,216 22,621 12,647
2/28/93 18,838 481 4,963 24,282 19,583 19,350 12,336
2/29/92 18,454 395 3,637 22,486 17,695 18,210 11,948
2/28/91 16,470 279 2,187 18,936 15,253 15,558 11,621
2/28/90 13,418 60 1,299 14,777 13,304 13,649 11,034
2/28/89 11,611 32 0 11,643 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Food and
Agriculture Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 29,509 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 940 for dividends and $ 12,557 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
HEALTH CARE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Health Care Portfolio would
have grown to $ 78,689 , including the effect of the fund's 3.00%
sales charge.
HEALTH CARE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 31,559 $ 2,137 $ 44,993 $ 78,689 $ 52,255 $ 55,126 $ 13,957
2/28/97 28,401 1,767 27,492 57,660 38,706 43,612 13,759
2/29/96 27,853 1,397 18,635 47,885 30,680 34,062 13,353
2/28/95 21,105 844 12,332 34,281 22,776 24,329 13,009
2/28/94 17,551 463 8,107 26,121 21,216 22,621 12,647
2/28/93 14,574 359 6,732 21,665 19,583 19,350 12,336
2/29/92 22,039 465 6,207 28,711 17,695 18,210 11,948
2/28/91 18,130 278 2,452 20,860 15,253 15,558 11,621
2/28/90 12,303 139 237 12,679 13,304 13,649 11,034
2/28/89 9,936 82 0 10,018 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Health
Care Portfolio on March 1, 1988, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 43,995 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 912 for dividends and $ 19,730 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
HOME FINANCE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Home Finance Portfolio
would have grown to $ 104,368 , including the effect of the
fund's 3.00% sales charge.
HOME FINANCE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 59,699 $ 5,395 $ 39,274 $ 104,368 $ 52,255 $ 55,126 $ 13,957
2/28/97 51,465 4,118 23,249 78,832 38,706 43,612 13,759
2/29/96 37,256 2,516 13,674 53,446 30,680 34,062 13,353
2/28/95 26,762 1,584 8,967 37,313 22,776 24,329 13,009
2/28/94 28,004 1,458 3,724 33,186 21,216 22,621 12,647
2/28/93 24,815 1,280 1,650 27,745 19,583 19,350 12,336
2/29/92 17,140 874 859 18,873 17,695 18,210 11,948
2/28/91 11,210 422 562 12,194 15,253 15,558 11,621
2/28/90 10,271 189 515 10,975 13,304 13,649 11,034
2/28/89 11,524 164 0 11,688 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Home
Finance Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 34,707 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 1,555 for dividends and $ 16,223 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
INDUSTRIAL EQUIPMENT PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Industrial
Equipment Portfolio would have grown to $ 41,173 including the
effect of the fund's 3.00% sales charge.
INDUSTRIAL EQUIPMENT PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 24,958 $ 565 $ 15,650 $ 41,173 $ 52,255 $ 55,126 $ 13,957
2/28/97 24,573 527 7,641 32,741 38,706 43,612 13,759
2/29/96 24,187 472 3,029 27,688 30,680 34,062 13,353
2/28/95 19,304 332 595 20,231 22,776 24,329 13,009
2/28/94 19,853 342 434 20,629 21,216 22,621 12,647
2/28/93 14,487 240 0 14,727 19,583 19,350 12,336
2/29/92 13,784 228 0 14,012 17,695 18,210 11,948
2/28/91 11,386 76 0 11,462 15,253 15,558 11,621
2/28/90 11,376 0 0 11,376 13,304 13,649 11,034
2/28/89 9,787 0 0 9,787 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Industrial
Equipment Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 24,433 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 308 for dividends and $11,289 for capital gain
distributions. The figures in the table do not include the effect of a
stock fund's trading fee or exchange fee.
INDUSTRIAL MATERIALS PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Industrial
Materials Portfolio would have grown to $ 25,227 , including the
effect of the fund's 3.00% sales charge.
INDUSTRIAL MATERIALS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 18,798 $ 1,415 $ 5,014 $ 25,227 $ 52,255 $ 55,126 $ 13,957
2/28/97 20,799 1,535 1,333 23,667 38,706 43,612 13,759
2/29/96 19,603 1,399 0 21,002 30,680 34,062 13,353
2/28/95 17,392 1,131 0 18,523 22,776 24,329 13,009
2/28/94 16,294 913 0 17,207 21,216 22,621 12,647
2/28/93 13,114 689 0 13,803 19,583 19,350 12,336
2/29/92 12,452 592 0 13,044 17,695 18,210 11,948
2/28/91 9,354 401 0 9,755 15,253 15,558 11,621
2/28/90 9,790 162 0 9,952 13,304 13,649 11,034
2/28/89 10,121 167 0 10,288 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Industrial
Materials Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 15,763 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 880 for dividends and $ 4,188 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
INSURANCE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Insurance Portfolio would
have grown to $ 60,154 , including the effect of the fund's 3.00%
sales charge.
INSURANCE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 39,997 $ 1,681 $ 18,476 $ 60,154 $ 52,255 $ 55,126 $ 13,957
2/28/97 30,991 1,302 9,829 42,122 38,706 43,612 13,759
2/29/96 25,433 1,032 6,372 32,837 30,680 34,062 13,353
2/28/95 20,246 744 4,364 25,354 22,776 24,329 13,009
2/28/94 18,440 679 3,975 23,094 21,216 22,621 12,647
2/28/93 20,502 743 2,140 23,385 19,583 19,350 12,336
2/29/92 17,832 613 0 18,445 17,695 18,210 11,948
2/28/91 14,992 274 0 15,266 15,253 15,558 11,621
2/28/90 13,481 247 0 13,728 13,304 13,649 11,034
2/28/89 11,372 94 0 11,466 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Insurance
on March 1, 1988, assuming the 3.00% sales charge had been in effect,
the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 21,833 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 608 for dividends and $ 8,911 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
LEISURE PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Leisure Portfolio would
have grown to $ 49,934 , including the effect of the fund's 3.00%
sales charge.
LEISURE PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 28,081 $ 382 $ 21,471 $ 49,934 $ 52,255 $ 55,126 $ 13,957
2/28/97 21,559 293 12,050 33,902 38,706 43,612 13,759
2/29/96 20,811 282 9,688 30,781 30,680 34,062 13,353
2/28/95 18,350 249 5,522 24,121 22,776 24,329 13,009
2/28/94 20,419 277 3,686 24,382 21,216 22,621 12,647
2/28/93 16,123 219 1,437 17,779 19,583 19,350 12,336
2/29/92 14,401 196 1,283 15,880 17,695 18,210 11,948
2/28/91 11,638 158 1,037 12,833 15,253 15,558 11,621
2/28/90 11,589 28 1,033 12,650 13,304 13,649 11,034
2/28/89 11,616 0 206 11,822 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Leisure
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 24,854 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 135 for dividends and $ 10,922 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
MEDICAL DELIVERY PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Medical
Delivery Portfolio would have grown to $ 72,995 , including the
effect of the fund's 3.00% sales charge.
MEDICAL DELIVERY PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 38,313 $ 330 $ 34,352 $ 72,995 $ 52,255 $ 55,126 $ 13,957
2/28/97 38,272 331 21,242 59,845 38,706 43,612 13,759
2/29/96 39,233 338 14,587 54,158 30,680 34,062 13,353
2/28/95 31,359 271 8,742 40,372 22,776 24,329 13,009
2/28/94 27,436 121 6,191 33,748 21,216 22,621 12,647
2/28/93 19,562 87 4,414 24,063 19,583 19,350 12,336
2/29/92 29,628 130 3,625 33,383 17,695 18,210 11,948
2/28/91 22,769 100 1,187 24,056 15,253 15,558 11,621
2/28/90 14,300 63 309 14,672 13,304 13,649 11,034
2/28/89 11,824 0 0 11,824 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Medical
Delivery Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 38,290 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 162 for dividends and $ 20,171 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
MONEY MARKET PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Money Market Portfolio
would have grown to $ 16,597 , including the effect of the fund's
3.00% sales charge.
MONEY MARKET PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 9,700 $ 6,897 $ 0 $ 16,597 $ 52,255 $ 55,126 $ 13,957
2/28/97 9,700 6,068 0 15,768 38,706 43,612 13,759
2/29/96 9,700 5,314 0 15,014 30,680 34,062 13,353
2/28/95 9,700 4,523 0 14,223 22,776 24,329 13,009
2/28/94 9,700 3,939 0 13,639 21,216 22,621 12,647
2/28/93 9,700 3,590 0 13,290 19,583 19,350 12,336
2/29/92 9,700 3,168 0 12,868 17,695 18,210 11,948
2/28/91 9,700 2,519 0 12,219 15,253 15,558 11,621
2/28/90 9,700 1,638 0 11,338 13,304 13,649 11,034
2/28/89 9,700 724 0 10,424 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Money
Market Portfolio on March 1, 1988, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 16,897 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 5,223 for dividends. The fund did not distribute any capital
gains during the period.
MULTIMEDIA PORTFOLIO: During the 10-year period ended February 28,
1998, a hypothetical $10,000 investment in Multimedia Portfolio would
have grown to $ 50,393 , including the effect of the fund's 3.00%
sales charge.
MULTIMEDIA PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 27,627 $ 33 $ 22,733 $ 50,393 $ 52,255 $ 55,126 $ 13,957
2/28/97 20,494 25 14,864 35,383 38,706 43,612 13,759
2/29/96 22,362 27 14,669 37,058 30,680 34,062 13,353
2/28/95 18,388 0 9,691 28,079 22,776 24,329 13,009
2/28/94 19,639 0 6,039 25,678 21,216 22,621 12,647
2/28/93 15,023 0 4,017 19,040 19,583 19,350 12,336
2/29/92 13,246 0 3,323 16,569 17,695 18,210 11,948
2/28/91 10,038 0 2,518 12,556 15,253 15,558 11,621
2/28/90 10,161 0 2,549 12,710 13,304 13,649 11,034
2/28/89 11,929 0 743 12,672 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Multimedia
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 23,798 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 16 for dividends and $ 10,029 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
NATURAL GAS PORTFOLIO: During the period from April 21, 1993
(commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Natural Gas Portfolio would have grown to
$13,764, including the effect of the fund's 3.00% sales charge.
NATURAL GAS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 12,823 $ 103 $ 838 $ 13,764 $ 26,583 $ 27,804 $ 11,243
2/28/97 12,125 97 436 12,658 19,691 21,997 11,083
2/29/96 11,019 78 159 11,256 15,608 17,180 10,757
2/28/95 8,711 20 125 8,856 11,587 12,271 10,479
2/28/94* 9,196 0 132 9,328 10,793 11,410 10,188
</TABLE>
* From April 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Natural
Gas Portfolio on April 21, 1993, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 10,828 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 78 for dividends and $ 728 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
NATURAL RESOURCES PORTFOLIO: During the period from March 3, 1997
(commencement of operations) to February 28, 1998, a hypothetical
$10,000 investment in Natural Gas Portfolio would have grown to
$10,408, including the effect of the fund's 3.00% sales charge.
NATURAL RESOURCES PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING**
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/9 8 $ 10,146 $ 0 $ 262 $ 10,408 $ 13,422 $ 12,563 $ 10,144
</TABLE>
* From March 3, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Natural
Gas Portfolio on March 3, 1997, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 10,252 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 0 for dividends and $ 252 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
PAPER AND FOREST PRODUCTS PORTFOLIO: During the 10-year period ended
February 28, 1998, a hypothetical $10,000 investment in Paper and
Forest Products Portfolio would have grown to $ 27,194 ,
including the effect of the fund's 3.00% sales charge.
PAPER AND FOREST PRODUCTS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 18,378 $ 1,419 $ 7,397 $ 27,194 $ 52,255 $ 55,126 $ 13,957
2/28/97 17,543 1,307 4,688 23,538 38,706 43,612 13,759
2/29/96 16,853 1,151 3,226 21,230 30,680 34,062 13,353
2/28/95 17,145 1,097 1,203 19,445 22,776 24,329 13,009
2/28/94 15,904 1,018 0 16,922 21,216 22,621 12,647
2/28/93 13,041 826 0 13,867 19,583 19,350 12,336
2/29/92 12,190 694 0 12,884 17,695 18,210 11,948
2/28/91 9,578 309 0 9,887 15,253 15,558 11,621
2/28/90 9,278 140 0 9,418 13,304 13,649 11,034
2/28/89 9,643 25 0 9,668 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Paper and
Forest Products Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 17,570 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 787 for dividends and $ 5,483 for capital
gain distributions. The figures in the table do not include the
effect of a stock fund's trading fee or exchange fee.
PRECIOUS METALS AND MINERALS PORTFOLIO: During the 10-year period
ended February 28, 1998 , a hypothetical $10,000 investment in
Precious Metals and Minerals Portfolio would have grown to
$ 9,059 , including the effect of the fund's 3.00% sales charge.
PRECIOUS METALS AND MINERALS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 7,977 $ 1,082 $ 0 $ 9,059 $ 52,255 $ 55,126 $ 13,957
2/28/97 15,210 2,061 0 17,271 38,706 43,612 13,759
2/29/96 16,265 2,160 0 18,425 30,680 34,062 13,353
2/28/95 11,850 1,526 0 13,376 22,776 24,329 13,009
2/28/94 12,897 1,464 0 14,361 21,216 22,621 12,647
2/28/93 7,651 768 0 8,419 19,583 19,350 12,336
2/29/92 8,497 676 0 9,173 17,695 18,210 11,948
2/28/91 8,474 591 0 9,065 15,253 15,558 11,621
2/28/90 11,058 609 0 11,667 13,304 13,649 11,034
2/28/89 9,227 390 0 9,617 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Precious
Metals and Minerals Portfolio on March 1, 1988, assuming the 3.00%
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 11,326 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 1,249 for
dividends and $ 0 for capital gain distributions. The figures
in the table do not include the effect of a stock fund's trading fee
or exchange fee.
REGIONAL BANKS PORTFOLIO: During the 10-year period ended February 28,
1998 , a hypothetical $10,000 investment in Regional Banks
Portfolio would have grown to $ 93,458 , including the effect of
the fund's 3.00% sales charge.
REGIONAL BANKS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 47,381 $ 7,567 $ 38,510 $ 93,458 $ 52,255 $ 55,126 $ 13,957
2/28/97 36,013 5,263 27,120 68,396 38,706 43,612 13,759
2/29/96 26,741 3,415 17,564 47,720 30,680 34,062 13,353
2/28/95 19,762 2,160 11,936 33,858 22,776 24,329 13,009
2/28/94 19,740 1,656 10,016 31,412 21,216 22,621 12,647
2/28/93 22,911 1,671 4,923 29,505 19,583 19,350 12,336
2/29/92 17,326 1,135 2,779 21,240 17,695 18,210 11,948
2/28/91 11,094 573 1,238 12,905 15,253 15,558 11,621
2/28/90 11,653 369 1,300 13,322 13,304 13,649 11,034
2/28/89 11,192 237 556 11,985 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Regional
Banks Portfolio on March 1, 1988, assuming the 3.00% sales charge had
been in effect, the net amount invested in fund shares was $9,700. The
cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested)
amounted to $ 30,285 . If distributions had not been reinvested,
the amount of distributions earned from the fund over time would have
been smaller, and cash payments for the period would have amounted to
$ 2,118 for dividends and $ 11,785 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
RETAILING PORTFOLIO: During the 10-year period ended February 28,
1998 , a hypothetical $10,000 investment in Retailing Portfolio
would have grown to $ 65,489 , including the effect of the fund's
3.00% sales charge.
RETAILING PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 43,808 $ 648 $ 21,033 $ 65,489 $ 52,25 $ 55,126 $ 13,957
2/28/97 29,109 430 13,374 42,913 38,706 43,612 13,759
2/29/96 24,399 361 11,123 35,883 30,680 34,062 13,353
2/28/95 20,932 309 9,543 30,784 22,776 24,329 13,009
2/28/94 21,807 323 9,942 32,072 21,216 22,621 12,647
2/28/93 20,897 309 6,535 27,741 19,583 19,350 12,336
2/29/92 20,608 305 5,036 25,949 17,695 18,210 11,948
2/28/91 13,622 202 2,901 16,725 15,253 15,558 11,621
2/28/90 11,442 169 2,404 14,015 13,304 13,649 11,034
2/28/89 11,547 28 167 11,742 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Retailing
Portfolio on March 1, 1988, assuming the 3.00% sales charge had been
in effect, the net amount invested in fund shares was $9,700. The cost
of the initial investment ($10,000) together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $ 18,426 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 166 for dividends and $ 6,715 for capital gain
distributions. The figures in the table do not include the effect
of a stock fund's trading fee or exchange fee.
SOFTWARE AND COMPUTER SERVICES PORTFOLIO: During the 10-year period
ended February 28, 1998, a hypothetical $10,000 investment in Software
and Computer Services would have grown to $70,402, including the
effect of the fund's 3.00% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SOFTWARE AND COMPUTER SERVICES PORTFOLIO INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 31,066 $ 0 $ 39,336 $ 70,402 $ 52,255 $ 55,126 $ 13,957
2/28/97 27,078 0 24,877 51,955 38,706 43,612 13,759
2/29/96 25,408 0 19,325 44,733 30,680 34,062 13,353
2/28/95 20,404 0 11,509 31,913 22,776 24,329 13,009
2/28/94 20,277 0 11,018 31,295 21,216 22,621 12,647
2/28/93 19,385 0 4,111 23,496 19,583 19,350 12,336
2/29/92 16,361 0 3,469 19,830 17,695 18,210 11,948
2/28/91 13,230 0 765 13,995 15,253 15,558 11,621
2/28/90 10,549 0 610 11,159 13,304 13,649 11,034
2/28/89 10,332 0 0 10,332 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Software and Computer Services Portfolio on March 1, 1988, assuming
the 3.00% sales charge had been in effect, the net amount invested in
fund shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $37,293. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $17,329 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
TECHNOLOGY PORTFOLIO: During the 10-year period ended February 28,
199 8, a hypothetical $10,000 investment in Technology Portfolio
would have grown to $ 62,518 , including the effect of the fund's
3.00% sales charge.
TECHNOLOGY PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 29,051 $ 302 $ 33,165 $ 62,518 $ 52,255 $ 55,126 $ 13,957
2/28/97 31,550 327 18,168 50,045 38,706 43,612 13,759
2/29/96 29,893 310 14,225 44,428 30,680 34,062 13,353
2/28/95 22,992 239 6,248 29,479 22,776 24,329 13,009
2/28/94 22,872 237 5,071 28,180 21,216 22,621 12,647
2/28/93 18,930 108 1,741 20,779 19,583 19,350 12,336
2/29/92 19,553 113 0 19,666 17,695 18,210 11,948
2/28/91 14,408 0 0 14,408 15,253 15,558 11,621
2/28/90 10,985 0 0 10,985 13,304 13,649 11,034
2/28/89 9,541 0 0 9,541 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Technology Portfolio on March 1, 1988, assuming the 3.00% sales charge
had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $38,470. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $159 for dividends and $19,340 for capital gain
distributions. The figures in the table do not include the effect of a
stock fund's trading fee or exchange fee.
TELECOMMUNICATIONS PORTFOLIO: During the 10-year period ended February
28, 1998, a hypothetical $10,000 investment in Telecommunications
Portfolio would have grown to $ 60,224 , including the effect of
the fund's 3.00% sales charge.
TELECOMMUNICATIONS PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 32,498 $ 3,101 $ 24,625 $ 60,224 $ 52,255 $ 55,126 $ 13,957
2/28/97 25,453 2,428 13,221 41,102 38,706 43,612 13,759
2/29/96 27,322 2,339 8,449 38,110 30,680 34,062 13,353
2/28/95 23,346 1,725 5,225 30,296 22,776 24,329 13,009
2/28/94 22,591 1,256 4,210 28,057 21,216 22,621 12,647
2/28/93 20,819 1,027 1,171 23,017 19,583 19,350 12,336
2/29/92 17,774 763 706 19,243 17,695 18,210 11,948
2/28/91 14,486 460 576 15,522 15,253 15,558 11,621
2/28/90 14,663 164 583 15,410 13,304 13,649 11,034
2/28/89 12,379 82 20 12,481 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Telecommunications Portfolio on March 1, 1988, assuming the 3.00%
sales charge had been in effect, the net amount invested in fund
shares was $9,700. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $ 30,305 . If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $ 1,534 for
dividends and $ 13,274 for capital gain distributions. The
figures in the table do not include the effect of a stock fund's
trading fee or exchange fee.
TRANSPORTATION PORTFOLIO: During the 10-year period ended February
28, 1998, a hypothetical $10,000 investment in Transportation
Portfolio would have grown to $54,171, including the effect of the
fund's 3.00% sales charge.
TRANSPORTATION PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 28,785 $ 116 $ 25,270 $ 54,171 $ 52,255 $ 55,126 $ 13,957
2/28/97 22,579 91 15,709 38,379 38,706 43,612 13,759
2/29/96 22,264 90 14,312 36,666 30,680 34,062 13,353
2/28/95 20,852 85 11,525 32,462 22,776 24,329 13,009
2/28/94 22,010 89 8,554 30,653 21,216 22,621 12,647
2/28/93 18,973 77 4,997 24,047 19,583 19,350 12,336
2/29/92 15,713 64 3,727 19,504 17,695 18,210 11,948
2/28/91 11,457 0 2,718 14,175 15,253 15,558 11,621
2/28/90 12,533 0 2,355 14,888 13,304 13,649 11,034
2/28/89 12,960 0 0 12,960 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Transportation Portfolio on March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $27,259. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $41 for dividends and $12,249 for capital gain
distributions. The figures in the table do not include the effect of a
stock fund's trading fee or exchange fee.
UTILITIES GROWTH PORTFOLIO: During the 10-year period ended February
28, 1998, a hypothetical $10,000 investment in Utilities Growth
Portfolio would have grown to $ 43,616 , including the effect of
the fund's 3.00% sales charge.
UTILITIES GROWTH PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED VALUE OF VALUE OF VALUE OF TOTAL S&P 500 DJIA COST OF
INITIAL REINVESTED REINVESTED VALUE LIVING
$10,000 DIVIDEND CAPITAL GAIN
INVESTMENT DISTRIBUTIONS DISTRIBUTIONS
2/28/98 $ 20,496 $ 7,740 $ 15,380 $ 43,616 $ 52,255 $ 55,126 $ 13,957
2/28/97 17,611 6,240 8,172 32,023 38,706 43,612 13,759
2/29/96 16,485 5,361 5,261 27,107 30,680 34,062 13,353
2/28/95 13,362 3,919 4,264 21,545 22,776 24,329 13,009
2/28/94 14,025 3,420 4,054 21,499 21,216 22,621 12,647
2/28/93 15,895 3,250 1,823 20,968 19,583 19,350 12,336
2/29/92 14,010 2,240 809 17,059 17,695 18,210 11,948
2/28/91 13,535 1,420 259 15,214 15,253 15,558 11,621
2/28/90 12,742 1,083 0 13,825 13,304 13,649 11,034
2/28/89 10,324 581 0 10,905 11,189 11,300 10,483
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in
Utilities Growth Portfolio March 1, 1988, assuming the 3.00% sales
charge had been in effect, the net amount invested in fund shares was
$9,700. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $27,063. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $3,888 for dividends and $7,631 for capital gain
distributions. The figures in the table do not include the effect of a
stock fund's trading fee or exchange fee.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. Lipper may also rank
funds based on yield. In addition to the mutual fund rankings, a
fund's performance may be compared to stock, bond, and money market
mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in
its advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest.
The total return of a benchmark index reflects reinvestment of all
dividends and capital gains paid by securities included in the index.
Unlike a fund's returns, however, the index returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
Each stock fund may compare its performance to that of the Standard &
Poor's 500 Index, a widely recognized, unmanaged index of common
stocks.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates total returns in
the same method as the funds. The funds may also compare performance
to that of other compilations or indices that may be developed and
made available in the future.
The money market fund may compare its performance or the performance
of securities in which it may invest to averages published by IBC
Financial Data, Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. IBC's MONEY FUND REPORT
AVERAGES(trademark)/ALL TAXABLE, which is reported in IBC's MONEY FUND
REPORT(trademark), covers over 885 taxable money market funds.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A stock fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or
total returns to those of a benchmark. Measures of benchmark
correlation indicate how valid a comparative benchmark may be. All
measures of volatility and correlation are calculated using averages
of historical data.
MOMENTUM INDICATORS indicate price movements over specific periods of
time for each stock fund . Each point on the momentum indicator
represents a fund's percentage change in price movements over
that period.
A stock fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In
such a program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of February 28, 1998, FMR advised over $ 31 billion in
tax-free fund assets, $ 102 billion in money market fund assets,
$ 428 billion in equity fund assets, $ 75 billion in
international fund assets, and $ 28 billion in Spartan fund
assets. The funds may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.
In addition to performance rankings, the money market fund may compare
its total expense ratio to the average total expense ratio of similar
funds tracked by Lipper. The fund's total expense ratio is a
significant factor in comparing bond and money market investments
because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive each fund's front-end sales charge on shares acquired through
reinvestment of dividends and capital gain distributions or in
connection with a fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive each fund's
front-end sales charge in certain instances due to sales
efficiencies and competitive considerations. The sales charge
will not apply:
1. to shares purchased in connection with an employee benefit plan
(including the Fidelity-sponsored 403(b) and corporate IRA programs
but otherwise as defined in the Employee Retirement Income Security
Act) maintained by a U.S. employer and having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary
group of corporations (within the meaning of Section 1563(a)(1) of the
Internal Revenue Code, with "50%" substituted for "80%") any member of
which maintains an employee benefit plan having more than 200 eligible
employees, or a minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee benefit plan
maintained by a non-U.S. employer having 200 or more eligible
employees, or a minimum of $3,000,000 in assets invested in Fidelity
mutual funds, the assets of which are held in a bona fide trust for
the exclusive benefit of employees participating therein;
2. to shares purchased by an insurance company separate account used
to fund annuity contracts purchased by employee benefit plans
(including 403(b) programs, but otherwise as defined in the Employee
Retirement Income Security Act), which, in the aggregate, have either
more than 200 eligible employees or a minimum of $3,000,000 in assets
invested in Fidelity funds;
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan provided that: (i) at the time of the distribution, the employer,
or an affiliate (as described in exemption 1 above) of such employer,
maintained at least one employee benefit plan that qualified for
exemption 1 and that had at least some portion of its assets invested
in one or more mutual funds advised by FMR, or in one or more accounts
or pools advised by Fidelity Management Trust Company; and (ii) either
(a) the distribution is transferred from the plan to a Fidelity IRA
account within 60 days from the date of the distribution or (b) the
distribution is transferred directly from the plan into another
Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the Trust Portfolios funds and
must, during the initial six-month period, reach and maintain an
aggregate balance of at least $500,000 in all accounts and subaccounts
purchased through the Trust Portfolios program);
7. to shares purchased by a mutual fund or a qualified state
tuition program for which FMR or an affiliate serves as investment
manager;
8. to shares purchased through Portfolio Advisory Services or Fidelity
Charitable Advisory Services;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited or their
direct or indirect subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a
Fidelity Trustee or employee; or
10. to shares purchased by a bank trust officer, registered
representative, or other employee of a qualified recipient. Qualified
recipients are securities dealers or other entities, including banks
and other financial institutions, who have sold the fund's shares
under special arrangements in connection with FDC's sales activities.
The stock funds' sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction for
some purchases made directly with Fidelity as noted in the prospectus,
in connection with investments in other Fidelity funds. This includes
reductions for investments in the following prototype or
prototype-like retirement plans sponsored by FMR or FMR Corp.: The
Fidelity Traditional IRA, The Fidelity Roth IRA, The Fidelity Roth
Conversion IRA, The Fidelity Rollover IRA, The Fidelity SEP-IRA and
SARSEP, The Fidelity SIMPLE IRA, The Fidelity Retirement Plan,
Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity
403(b) Program, The Fidelity Investments 401(a) Prototype Plan for
Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit
Sharing and Money Purchase Plan).
On October 12, 1990, the funds changed their sales charge policy from
a 2 .00 % sales charge upon purchase and a 1 .00 % deferred
sales charge upon redemption, to a 3 .00 % sales charge upon
purchase. If you purchased your shares prior to that date, when you
redeem those shares a trading fee will be deducted and a deferred
sales charge of 1 .00 % of this net redemption amount will be
deducted. The deferred sales charge does not apply to exchanges
between Select funds.
Each fund is open for business and its net asset value per share (NAV)
is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for
1998: New Year's Day, Martin Luther King's Birthday, Presidents' Day,
Good Friday, Memorial Day, Independence Day (observed), Labor Day,
Thanksgiving Day, and Christmas Day. Although FMR expects the same
holiday schedule to be observed in the future, the NYSE may modify its
holiday schedule at any time. In addition, on days when the Federal
Reserve Wire System is closed , federal funds wires cannot be
sent.
FSC normally determines each fund's NAV hourly, from 10:00 a.m. to
4:00 p.m., and the final determination of each fund's NAV will
coincide with the close of the NYSE (normally 4:00 p.m. Eastern time).
However, NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the SEC. To the extent that portfolio
securities are traded in other markets on days when the NYSE is
closed, a fund's NAV may be affected on days when investors do not
have access to the fund to purchase or redeem shares. In addition,
trading in some of a fund's portfolio securities may not occur on days
when the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing each fund's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to
give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60-day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the
time of an exchange, or (ii) the fund suspends the redemption of the
shares to be exchanged as permitted under the 1940 Act or the rules
and regulations thereunder, or the fund to be acquired suspends the
sale of its shares because it is unable to invest amounts effectively
in accordance with its investment objective and policies.
In the Prospectus, each fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse
exchange purchases by any person or group if, in FMR's judgment, the
fund would be unable to invest effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your
distributions at the then-current NAV. All subsequent distributions
will then be reinvested until you provide Fidelity with alternate
instructions.
DIVIDENDS. A portion of each stock fund's income may qualify for the
dividends-received deduction available to corporate shareholders to
the extent that the fund's income is derived from qualifying
dividends. Because each fund may earn other types of income, such as
interest, income from securities loans, non-qualifying dividends, and
short-term capital gains, the percentage of dividends from the fund
that qualifies for the deduction generally will be less than 100%.
Each fund will notify corporate shareholders annually of the
percentage of fund dividends that qualifies for the dividends-received
deduction. A portion of each fund's dividends derived from certain
U.S. Government securities may be exempt from state and local
taxation. Gains (losses) attributable to foreign currency fluctuations
are generally taxable as ordinary income, and therefore will increase
(decrease) dividend distributions. If a fund's distributions
exceed its net investment company taxable income during a taxable
year, all or a portion of the distributions made in the same taxable
year would be recharacterized as a return of capital to shareholders,
thereby reducing each shareholder's cost basis in the fund. Short-term
capital gains are distributed as dividend income. Each fund will send
each shareholder a notice in January describing the tax status of
dividends and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each
fund on the sale of securities and distributed to shareholders are
federally taxable as long-term capital gains, regardless of the length
of time shareholders have held their shares. If a shareholder receives
a capital gain distribution on shares of a fund, and such shares are
held six months or less and are sold at a loss, the portion of the
loss equal to the amount of the capital gain distribution will be
considered a long-term loss for tax purposes. Short-term capital gains
distributed by each fund are taxable to shareholders as dividends, not
as capital gains. The money market fund may distribute any net
realized short-term capital gains once a year or more often as
necessary, to maintain its NAV at $1.00. The money market fund
does not anticipate distributing long-term capital gains.
As of February 28, 1998, the following funds hereby designate a
capital gain dividend for the purpose of the dividend-paid deduction:
CAPITAL GAIN DIVIDEND
FUND DOLLAR AMOUNT
AUTOMOTIVE $ 5,569,000
BIOTECHNOLOGY $ 96,641,000
BROKERAGE AND INVESTMENT MANAGEMENT $ 7,149,000
CHEMICALS $ 8,702,000
COMPUTERS $ 24,534,000
CONSTRUCTION AND HOUSING $ 1,565,000
CONSUMER INDUSTRIES $ 209,000
DEFENSE AND AEROSPACE $ 962,000
DEVELOPING COMMUNICATIONS $ 7,828,000
ELECTRONICS $ 5,061,000
ENERGY $ 31,281,000
ENERGY SERVICE $ 68,493,000
FINANCIAL SERVICES $ 43,282,000
FOOD AND AGRICULTURE $ 23,192,000
HEALTH CARE $ 258,954,000
HOME FINANCE $ 125,545,000
INDUSTRIAL EQUIPMENT $ 3,438,000
INDUSTRIAL MATERIALS $ 1,320,000
INSURANCE $ 4,638,000
LEISURE $ 9,146,000
MEDICAL DELIVERY $ 28,321,000
MULTIMEDIA $ 4,042,000
NATURAL GAS $ 2,028,000
PAPER AND FOREST PRODUCTS $ 1,652,000
REGIONAL BANKS $ 35,016,000
RETAILING $ 2,429,000
SOFTWARE AND COMPUTER SERVICES $ 11,924,000
TECHNOLOGY $ 10,489,000
TELECOMMUNICATIONS $ 38,258,000
TRANSPORTATION $ 575,000
UTILITIES GROWTH $ 40,954,000
As of February 28, 1998, Precious Metals and Minerals Portfolio had
a capital loss carryforward of approximately $57,071,000, of which
$1,376,000 and $ 55,695,000 will expire on February 28, 2000 and 2006,
respectively.
As of February 28, 1998, Environmental Services Portfolio had a
capital loss carryforward of approximately $155,000, all of which will
expire on February 28, 2005.
As of February 28, 1998, American Gold Portfolio had a capital loss
carryforward of approximately $35,849,000, all of which will expire on
February 28, 2006.
As of February 28, 1998, Money Market Portfolio has a capital loss
carryforward of approximately $5,400, all of which will expire on
February 28, 2006.
To the extent that capital loss carryforwards are used to offset
any future capital gains, it is unlikely that the gains so offset will
be distributed to shareholders since any such distributions may be
taxable to shareholders as ordinary income.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains with respect to
foreign securities. Because each fund does not currently anticipate
that securities of foreign issuers will constitute more than 50% of
its total assets at the end of its fiscal year, shareholders should
not expect to claim a foreign tax credit or deduction on their federal
income tax returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company
and avoid being subject to federal income or excise taxes at the fund
level, each fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar
year as well as on a fiscal year basis, and intends to comply with
other tax rules applicable to regulated investment companies.
Each fund is treated as a separate entity from the other funds, if
any, of its trust for tax purposes.
If a fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the
Internal Revenue Code, it may be subject to U.S. federal income tax on
a portion of any excess distribution or gain from the disposition of
such shares. I nterest charges may also be imposed on a fund
with respect to deferred taxes arising from such distributions or
gains. Generally, a fund will elect to mark-to-market any PFIC shares.
U nrealized gains will be recognized as income for tax purposes
and must be distributed to shareholders as dividends.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. Except as indicated, each individual has
held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who
are "interested persons" by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (67), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (64), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Trustee. Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (54), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Lucas Varity PLC
(automotive components and diesel engines), Charles Shark Draper
L aboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition , he is a member of the National Executive
Board of the Boy Scouts of America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association, a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (64), Trustee (1993) , is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
BOYCE I. GREER (42), is Vice President of Money Market Funds (1997),
Group Leader of the Money Market Group (1997), Senior Vice President
of FMR (1997), and Vice President of FIMM (1998). Mr. Greer served as
the Leader of the Fixed-Income Group for Fidelity Management Trust
Company (1993-1995) and was Vice President and Group Leader of
Municipal Fixed-Income Investments (1996-1997).
FRED L. HENNING, JR. (58), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
JOHN J. TODD (49), is Vice President of Select Money Market
Portfolio (1996), and other funds advised by FMR. Prior to his current
responsibilities, Mr. Todd has managed a variety of Fidelity
funds.
RICHARD A. SILVER (50), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
THOMAS D. MAHER (53), Assistant Vice President, is Assistant Vice
President of Fidelity's Municipal Bond Funds (1996) and of Fidelity's
Money Market Funds .
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THOMAS J. SIMPSON (39), Assistant Treasurer, is Assistant Treasurer of
Fidelity's M unicipal B ond F unds (1996) and of
Fidelity's M oney M arket F unds (1996) and an
employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice
President and Fund Controller of Liberty Investment Services
(1987-1995).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended February 28, 1998 or
calendar year ended December 31, 1997, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGGREGATE
COMPENSATION
FROM A FUNDA
J. Gary Ralph Phyllis Robert Edward E. Donald Peter William Gerald Marvin Robert Thomas
Burkhead F. Burke M. C. Bradley J. S. O. McCoy C. L. C. R.
** Cox Davis Gates Johnson Jones Kirk Lynch** **** McDonough Mann Pozen** Williams
*** 3d**
Air Transportation B
$ 0 $ 22 $ 22 $ 23 $ 0 $ 22 $ 22 $ 0 $ 23 $ 28 $ 22 $ 0 $ 22
American Gold B
$ 0 $ 119 $ 117 $ 122 $ 0 $ 118 $ 118 $ 0 $ 123 $ 147 $ 118 $ 0 $ 119
Automotive B
$ 0 $ 28 $ 27 $ 28 $ 0 $ 27 $ 27 $ 0 $ 28 $ 34 $ 27 $ 0 $ 28
Biotechnology B
$ 0 $ 239 $ 235 $ 243 $ 0 $ 237 $ 237 $ 0 $ 245 $ 296 $ 236 $ 0 $ 239
Brokerage and
$ 0 $ 158 $ 156 $ 160 $ 0 $ 157 $ 157 $ 0 $ 161 $ 196 $ 155 $ 0 $ 158
Investment
Management B
Business Services
$ 0 $ 5 $ 5 $ 4 $ 0 $ 5 $ 5 $ 0 $ 5 $ 6 $ 5 $ 0 $ 5
and Outsourcing B,+
Chemicals B
$ 0 $ 36 $ 35 $ 36 $ 0 $ 35 $ 35 $ 0 $ 37 $ 44 $ 35 $ 0 $ 36
Computers B
$ 0 $ 266 $ 261 $ 270 $ 0 $ 263 $ 263 $ 0 $ 272 $ 329 $ 262 $ 0 $ 266
Construction and
$ 0 $ 10 $ 10 $ 11 $ 0 $ 10 $ 10 $ 0 $ 11 $ 13 $ 10 $ 0 $ 10
Housing B
Consumer
$ 0 $ 9 $ 9 $ 9 $ 0 $ 9 $ 9 $ 0 $ 9 $ 11 $ 9 $ 0 $ 9
Industries B
Cyclical
$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Industries B
Defense and
$ 0 $ 25 $ 25 $ 26 $ 0 $ 25 $ 25 $ 0 $ 26 $ 31 $ 25 $ 0 $ 25
Aerospace B
Developing
$ 0 $ 97 $ 96 $ 99 $ 0 $ 96 $ 96 $ 0 $ 99 $ 120 $ 96 $ 0 $ 97
Communications B
Electronics B
$ 0 $ 934 $ 922 $ 949 $ 0 $ 928 $ 928 $ 0 $ 956 $ 1,159 $ 922 $ 0 $ 934
Energy B
$ 0 $ 81 $ 80 $ 83 $ 0 $ 81 $ 81 $ 0 $ 84 $ 101 $ 80 $ 0 $ 81
Energy Service B
$ 0 $ 368 $ 365 $ 373 $ 0 $ 367 $ 367 $ 0 $ 375 $ 459 $ 362 $ 0 $ 368
Environmental
$ 0 $ 12 $ 10 $ 10 $ 0 $ 10 $ 10 $ 0 $ 11 $ 13 $ 11 $ 0 $ 12
Services B
Financial Services B
$ 0 $ 184 $ 182 $ 187 $ 0 $ 183 $ 183 $ 0 $ 189 $ 228 $ 182 $ 0 $ 184
Food and
$ 0 $ 99 $ 98 $ 101 $ 0 $ 98 $ 98 $ 0 $ 101 $ 123 $ 97 $ 0 $ 99
Agriculture B
Health Cares B, C,D
$ 0 $ 617 $ 609 $ 629 $ 0 $ 613 $ 613 $ 0 $ 633 $ 765 $ 608 $ 0 $ 617
Home Finance B
$ 0 $ 518 $ 512 $ 527 $ 0 $ 515 $ 515 $ 0 $ 530 $ 643 $ 510 $ 0 $ 518
Industrial
$ 0 $ 27 $ 26 $ 27 $ 0 $ 27 $ 27 $ 0 $ 28 $ 33 $ 27 $ 0 $ 27
Equipment B
Industrial
$ 0 $ 14 $ 14 $ 15 $ 0 $ 14 $ 14 $ 0 $ 15 $ 18 14 $ 0 $ 14
Materials B
Insurance B
$ 0 $ 41 $ 40 $ 41 $ 0 $ 41 $ 41 $ 0 $ 41 $ 51 40 $ 0 $ 41
Leisure B
$ 0 $ 53 $ 52 $ 53 $ 0 $ 52 $ 52 $ 0 $ 54 $ 65 $ 51 $ 0 $ 53
Medical Delivery B
$ 0 $ 66 $ 65 $ 67 $ 0 $ 66 $ 66 $ 0 $ 68 $ 82 $ 65 $ 0 $ 66
Medical Equipment
$ 0 $ 5 $ 5 $ 4 $ 0 $ 5 $ 5 $ 0 $ 5 $ 6 $ 5 $ 0 $ 5
and SystemsB,+
Multimedia B
$ 0 $ 22 $ 22 $ 23 $ 0 $ 22 $ 22 $ 0 $ 23 $ 27 $ 22 $ 0 $ 22
Natural Gas B
$ 0 $ 35 $ 34 $ 35 $ 0 $ 34 $ 34 $ 0 $ 36 $ 43 $ 34 $ 0 $ 35
Natural Resources B
$ 0 $ 1 $ 1 $ 1 $ 0 $ 1 $ 1 $ 0 $ 1 $ 1 $ 1 $ 0 $ 1
Paper and Forest
$ 0 $ 9 $ 9 $ 9 $ 0 $ 9 $ 9 $ 0 $ 9 $ 11 $ 9 $ 0 $ 9
Products B
Precious Metals
$ 0 $ 84 $ 82 $ 85 $ 0 $ 83 $ 83 $ 0 $ 86 $ 103 $ 83 $ 0 $ 84
and Minerals B
Regional Banks B
$ 0 $ 398 $ 393 $ 405 $ 0 $ 396 $ 396 $ 0 $ 407 $ 493 $ 391 $ 0 $ 398
Retailing B
$ 0 $ 58 $ 57 $ 59 $ 0 $ 58 $ 58 $ 0 $ 59 $ 72 $ 56 $ 0 $ 58
Software and
$ 0 $ 174 $ 172 $ 177 $ 0 $ 173 $ 173 $ 0 $ 179 $ 216 $ 172 $ 0 $ 174
Computer Services B
Technology B
$ 0 $ 219 $ 216 $ 223 $ 0 $ 218 $ 218 $ 0 $ 225 $ 272 $ 217 $ 0 $ 219
Telecommunications
$ 0 $ 162 $ 159 $ 164 $ 0 $ 160 $ 160 $ 0 $ 165 $ 200 $ 159 $ 0 $ 162
B
Transportation B
$ 0 $ 21 $ 21 $ 21 $ 0 $ 21 $ 21 $ 0 $ 22 $ 26 $ 21 $ 0 $ 21
Utilities Growth B
$ 0 $ 106 $ 105 $ 108 $ 0 $ 106 $ 106 $ 0 $ 109 $ 132 $ 105 $ 0 $ 106
Money Market B
$ 0 $ 336 $ 331 $ 342 $ 0 $ 333 $ 333 $ 0 $ 345 $ 418 331 $ 0 $ 336
TOTAL
$ 0 $ 214,500 $ 210,000 $ 176,000 $ 0 $211,500 $ 211,500 $ 0 $ 214,500 $ 264,500 $214,500 $ 0 $214,500
COMPENSATION
FROM THE FUND
COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
** Mr. Gates was appointed to the Board of Trustees effective March
1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees effective
January 1, 1997.
+ Estimated
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000 ; Phyllis Burke Davis , $75,000 ; Robert M.
Gates $62,500 ; E. Bradley Jones, $75,000 ; Donald J.
Kirk, $75,000 ; William O. McCoy, $75,000 ; Gerald C.
McDonough, $87,500 ; Marvin L. Mann, $75,000 ; and Thomas
R. Williams, $75,000. Certain of the non-interested Trustees elected
voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $292; Phyllis Burke Davis, $292;
Robert M. Gates, $296; E. Bradley Jones, $292; Donald J. Kirk, $292;
William O. McCoy, $296; Gerald C. Mc Donough, $340 ; Marvin
L. Mann, $292 ; and Thomas R. Williams, $2 92 .
D Certain of the non-interested Trustees' aggregate compensation from
a fund includes accrued voluntary deferred compensation as follows:
Cox, $244, Healthcare; McCoy, $41, Healthcare; Mann, $244, Healthcare;
and Williams, $244, Healthc are.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of February 28, 1998, approximately 7.32% of Select Business
Services & Outsourcing's total outstanding shares was held by an FMR
affiliate, approximately 14.51% of Select Natural Resources's total
outstanding shares was held by an FMR affiliate, and approximately
31.32% of Select Cyclical Industries's total outstanding shares was
held by an FMR affiliate. As of the public offering of shares of
Select Medical Equipment and Systems, 100% of the fund's total
outstanding shares was held by an FMR affiliate. FMR Corp. is the
ultimate parent company of FMR and this FMR affiliate. By virtue of
his ownership interest in FMR Corp., as described in the "FMR" section
on page 69, Mr. Edward C. Johnson 3d, President and Trustee of the
fund, may be deemed to be a beneficial owner of these shares. As of
the above date, with the exception of Mr. Johnson 3d's deemed
ownership of Select Business Services & Outsourcing, Select Medical
Equipment and Systems, Select Natural Resources, and Select Cyclical
Industries's shares, the Trustees, Members of the Advisory Board, and
officers of the funds owned, in the aggregate, less than 1% of each
fund's total outstanding shares.
As of February 28, 1998, the following owned of record or
beneficially 5% or more of a fund's outstanding shares:
Fidelity Select Computer: National Financial Services
Corporation, Boston, MA (14.88%).
Fidelity Select Food & Agriculture: National Financial Services
Corporation, Boston, MA (19.87%).
Fidelity Select Air Transportation: National Financial Services
Corporation, Boston, MA (35.41%); First Trust Corporation, Denver, CO
(13.07%).
Fidelity Select Energy: National Financial Services
Corporation, Boston, MA (19.14%).
Fidelity Select Precious Metals: National Financial Services
Corporation, Boston, MA (16.15%).
Fidelity Select Technology: National Financial Services
Corporation, Boston, MA (21.73%).
Fidelity Select Utilities Growth: National Financial Services
Corporation, Boston, MA (13.39%).
Fidelity Select Financial Services: National Financial Services
Corporation, Boston, MA (20.47%).
Fidelity Select Brokerage & Investment Mgmt.: National
Financial Services Corporation, Boston, MA (16.13%).
Fidelity Select Chemical: National Financial Services
Corporation, Boston, MA (22.34%).
Fidelity Select Money Market: National Financial Services
Corporation, Boston, MA (5.94%).
Fidelity Select Telecommunications: National Financial Services
Corporation, Boston, MA (22.68%).
Fidelity Select American Gold: National Financial Services
Corporation, Boston, MA (16.16%).
Fidelity Select Energy Services: National Financial Services
Corporation, Boston, MA (5.29%).
Fidelity Select Retailing: National Financial Services
Corporation, Boston, MA (26.99%); First Trust Corporation, Denver, CO
(9.60%).
Fidelity Select Business Services & Outsourcing: National
Financial Services Corporation, Boston, MA (46.18%); FMR Capital,
Boston, MA (7.32%); Newell V. Risdall, Rapid City, SD (10.96%).
Fidelity Select Automotive: National Financial Services
Corporation, Boston, MA (20.72%); First Trust Corporation, Denver, CO
(7.18%).
Fidelity Select Insurance: National Financial Services
Corporation, Boston, MA (33.47%).
Fidelity Select Defense & Aerospace: National Financial
Services Corporation, Boston, MA (39.56%).
Fidelity Select Leisure: National Financial Services
Corporation, Boston, MA (29.85%).
Fidelity Select Software & Computers: National Financial
Services Corporation, Boston, MA (26.43%).
Fidelity Select Multimedia: National Financial Services
Corporation, Boston, MA (36.71%).
Fidelity Select Medical Delivery: National Financial Services
Corporation, Boston, MA (24.79%).
Fidelity Select Paper & Forest Products: National Financial
Services Corporation, Boston, MA (68.67%).
Fidelity Select Industrial Materials: National Financial
Services Corporation, Boston, MA (23.47%); Charles Schwab & Co., San
Francisco, CA (6.05%).
Fidelity Select Industrial Equipment: National Financial
Services Corporation, Boston, MA (28.20%).
Fidelity Select Construction & Housing: National Financial
Services Corporation, Boston, MA (34.64%); First Trust Corporation,
Denver, CO (5.73%).
Fidelity Select Transportation: National Financial Services
Corporation, Boston, MA (38.67%).
Fidelity Select Natural Gas: National Financial Services
Corporation, Boston, MA (22.80%).
Fidelity Select Natural Resources: National Financial Services
Corporation, Boston, MA (49.54%); FMR Capital, Boston, MA (14.51%).
Fidelity Select Cyclical Industries: National Financial
Services Corporation, Boston, MA (56.53%); FMR Capital, Boston, MA
(31.32%).
Fidelity Select Environmental Services: National Financial
Services Corporation, Boston, MA (19.15%).
Fidelity Select Consumer Industries: National Financial
Services Corporation, Boston, MA (39.05%).
Fidelity Select Developing Communications: National Financial
Services Corporation, Boston, MA (27.38%).
A shareholder owning of record or beneficially 25% or more of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.
MANAGEMENT CONTRACTS
FMR is manager of the stock funds (except Business Services and
Outsourcing, Cyclical Industries, Medical Equipment and Systems
and Natural Resources) and the money market fund pursuant to
management contracts dated March 1, 1994, which were approved by
shareholders on February 16, 1994. FMR is manager of Cyclical
Industries and Natural Resources pursuant to management contracts
dated January 16, 1997, which were approved by FMR, then sole
shareholder, on February 14, 1997. FMR is manager of Business Services
and Outsourcing and Medical Equipment and Systems pursuant to
management contracts dated December 18, 1997, which were approved by
FMR, as the then sole shareholder, on January 21, 1998 for Business
Services and Outsourcing and April 24, 1998 for Medical
Equipment and Systems.
MANAGEMENT SERVICES. Each fund employs FMR to furnish
investment advisory and other services. Under the terms of its
management contract with each fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all
necessary office facilities and personnel for servicing the fund's
investments, compensates all officers of each fund and all Trustees
who are "interested persons" of the trust or of FMR, and all personnel
of each fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee
payable to FMR and the fees payable to the transfer, dividend
disbursing, and shareholder servicing agent, pricing and bookkeeping
agent, and securities lending agent, as applicable, each fund pays all
of its expenses that are not assumed by those parties. Each fund pays
for the typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor
and non-interested Trustees. Each fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by each fund include interest, taxes, brokerage commissions, the
fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under
federal securities laws and making necessary filings under state
securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, the money market fund pays FMR a monthly management fee
which has three components: a group fee rate, an individual fund fee
rate (0.03%), and an income-based component of 6% of the fund's gross
income in excess of a 5% yield. The maximum income-based component is
0.24% of the fund's average net assets.
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for the money market fund.
MONEY MARKET FUND
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Prior to March 1, 1994, the group fee rate was based on a schedule
with breakpoints ending at 0.1500% for average group assets in excess
of $84 billion. The group fee rate breakpoints shown above for average
group assets in excess of $120 billion and under $228 billion were
voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228
billion were voluntarily adopted by FMR on November 1, 1993. The
fund's current management contract reflects these extensions of the
group fee rate schedule.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group
assets in excess of $156 billion and under $372 billion as shown in
the schedule below. The revised group fee rate schedule is identical
to the above schedule for average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the
revised schedule for average group assets in excess of $372 billion,
pending shareholder approval of a new management contract reflecting
the revised schedule and additional breakpoints. The revised group fee
rate schedule and its extensions provide for lower management fee
rates as FMR's assets under management increase. For average group
assets in excess of $156 billion, the revised group fee rate schedule
with additional breakpoints voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
120 - $156 billion .1450% $ 150 billion .1736%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $583 billion of group net assets - the approximate level for
February 1998 - was 0.1357%, which is the weighted average of the
respective fee rates for each level of group net assets up to $583
billion.
The money market fund's individual fund fee rate is 0.03%.
One-twelfth of the sum of the group fee rate and the individual
fund fee rate is applied to the money market fund's average net assets
for the current month, giving a dollar amount which is the fee for
that month.
If the money market fund's monthly gross yield is 5% or less, the
total management fee is the sum of the group fee and the individual
fund fee. If the money market fund's monthly gross yield is greater
than 5%, the management fee that FMR receives includes an income-based
component. The income-based component equals 6% of that portion of the
fund's gross income that represents a gross yield of more than 5% per
year. The maximum income-based component is 0.24% (annualized) of
average net assets, at a fund gross yield of 9% or more. Gross income
for this purpose, includes interest accrued and/or discount earned
(including both original issue discount and market discount) on
portfolio obligations, less amortization of premium. Realized and
unrealized gains and losses, if any, are not included in gross
income.
For the services of FMR under the management contract, each stock
fund pays FMR a monthly management fee which has two components: a
group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for the stock funds (except Business
Services and Outsourcing, Cyclical Industries, Medical Equipment
and Systems, and Natural Resources).
STOCK FUNDS
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Prior to March 1, 1994, the group fee rate was based on a schedule
with breakpoints ending at 0.3100% for average group assets in excess
of $102 billion. The group fee rate breakpoints shown above for
average group assets in excess of $138 billion and under $228 billion
were voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228
billion were voluntarily adopted by FMR on November 1, 1993. Each
fund's current management contract reflects these extensions of the
group fee rate schedule.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group
assets in excess of $210 billion and under $390 billion as shown in
the schedule below. The revised group fee rate schedule was identical
to the above schedule for average group assets under $210 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the
revised schedule for average group assets in excess of $390 billion,
pending shareholder approval of a new management contract reflecting
the revised schedule and additional breakpoints. The revised group fee
rate schedule and its extensions provide for lower management fee
rates as FMR's assets under management increase. For average group
assets in excess of $210 billion, the revised group fee rate schedule
with additional breakpoints voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
$138 - $174 billion .3050% $150 billion .3371%
174 - 210 .3000 175 .3325
210 - 246 .2950 200 .3284
246 - 282 .2900 225 .3249
282 - 318 .2850 250 .3219
318 - 354 .2800 275 .3190
354 - 390 .2750 300 .3163
390 - 426 .2700 325 .3137
426 - 462 .2650 350 .3113
462 - 498 .2600 375 .3090
498 - 534 .2550 400 .3067
Over 534 .2500 425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
The group fee rate schedule for Business Services and Outsourcing,
Cyclical Industries, Medical Equipment and Systems, and Natural
Resources is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual Fee
Assets Rate Assets Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 583 billion of group net assets - the approximate
level for February 1998 - was 0.2917 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 583 billion.
The stock funds ' individual fund fee rate is 0.30 %.
Based on the average group net assets of the funds advised by FMR for
February 1998, each stock fund's annual management fee rate would be
calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
0. 2917% + 0.30% = 0.5917 %
One-twelfth of this annual management fee rate is applied to each
stock fund's net assets averaged for the most recent month, giving a
dollar amount, which is the fee for that month.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years.
Fund Fiscal Years Ended Management Fees
February 28/29 Paid to FMR
Air Transportation 1998 $ 378,349
1997 $ 539,940
1996 $ 425,938
American Gold 1998 $ 1,664,398
1997 $ 2,501,556
1996 $ 2,155,590
Automotive 1998 $ 369,375
1997 $ 726,743
1996 $ 363,327
Biotechnology 1998 $ 3,442,469
1997 $ 4,324,960
1996 $ 3,676,822A
Brokerage and Investment Management 1998 $ 2,493,991
1997 $ 448,938
1996 $ 204,478A
Business Services and Outsourcing 1998 * $ 2,948
Chemicals 1998 $ 496,851
1997 $ 745,680
1996 $ 481,260
Computers 1998 $ 3,921,116
1997 $ 3,309,228
1996 $ 2,922,505
Construction and Housing 1998 $ 155,730
1997 $ 408,988
1996 $ 258,650
Consumer Industries 1998 $ 161,119
1997 $ 154,434
1996 $ 219,534A
Cyclical Industries 1998 ** $ 21,141
Defense and Aerospace 1998 $ 381,060
1997 $ 268,010
1996 $ 131,560A
Developing Communications 1998 $ 1,420,790
1997 $ 1,856,888
1996 $ 2,034,963
Electronics 1998 $ 14,146,742
199 7 $ 7,859,173
1996 $ 5,626,255
Energy 1998 $ 1,137,325
1997 $ 1,066,783
1996 $ 691,768
Energy Service 1998 $ 5,735,646
1997 $ 2,790,650
1996 $ 983,400
Fund Fiscal Years Ended Management Fees
February 28/29 Paid to FMR
Environmental Services 1998 $ 165,498
1997 $ 252,081
1996 $ 195,326
Financial Services 1998 $ 2,799,557
1997 $ 1,661,452
1996 $ 1,203,738
Food and Agriculture 1998 $ 1,473,308
1997 $ 1,682,437
1996 $ 1,286,233
Health Care 1998 $ 9,512,189
1997 $ 7,661,331
1996 $ 6,868,340
Home Finance 1998 $ 7,971,664
1997 $ 4,201,147
1996 $ 2,401,434
Industrial Equipment 1998 $ 358,194
1997 $ 560,442
1996 $ 623,645
Industrial Materials 1998 $ 178,398
1997 $ 590,927
1996 $ 777,296
Insurance 1998 $ 657,447
1997 $ 204,881
1996 $ 129,061
Leisure 1998 $ 853,326
1997 $ 643,761
1996 $ 486,216
Medical Delivery 1998 $ 949,169
1997 $ 1,307,251
1996 $ 1,208,374
Money Market 1998 $ 1,715,272
1997 $ 1,584,080
1996 $ 1,558,005
Multimedia 1998 $ 355,794
1997 $ 513,562
1996 $ 587,354
Natural Gas 1998 $ 489,011
1997 $ 679,330
1996 $ 431,858
Natural Resources 1998 ** $ 38,241
Paper and Forest Products 1998 $ 144,890
1997 $ 194,763
1996 $ 355,643
Precious Metals and Minerals 1998 $ 1,160,570
1997 $ 2,005,219
1996 $ 2,345,736
Regional Banks 1998 $ 6,188,500
1997 $ 2,534,699
1996 $ 1,410,233
Fund Fiscal Years Ended Management Fees
February 28/29 Paid to FMR
Retailing 1998 $ 911,425
1997 $ 1,338,783
1996 $ 226,958
Software and Computer Services 1998 $ 2,593,824
1997 $ 2,546,782
1996 $ 1,899,182
Technology 1998 $ 3,293,787
1997 $ 2,800,144
1996 $ 2,349,322
Telecommunications 1998 $ 2,473,329
1997 $ 2,878,937
1996 $ 2,590,151
Transportation 1998 $ 341,054
1997 $ 50,368
1996 $ 51,516A
Utilities Growth 1998 $ 1,639,699
1997 $ 1,440,039
1996 $ 1,615,924
A During the period, FMR issued a one time credit reducing
management fees. The amount of the credit issued to the respective
funds was: Biotechnology $503,762; Brokerage and Investment Management
$79,974; Consumer Industries $22,835 Defense and Aerospace $24,455;
and Transportation $7,559.
* Business Services and Outsourcing commenced operations of
February 4, 1998.
** Cyclical Industries and Natural Resources commenced operations
on March 3, 1997.
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase a fund's total returns and
yield, and repayment of the reimbursement by a fund will lower its
total returns and yield.
During the past three fiscal periods, FMR voluntarily agreed, subject
to revision or termination, to reimburse certain of the funds if and
to the extent that the fund's aggregate operating expenses, including
management fees, were in excess of an annual rate of its average net
assets. The tables below show the periods of reimbursement and levels
of expense limitations for the applicable funds; the dollar amount of
management fees incurred under each fund's contract before
reimbursement; and the dollar amount of management fees reimbursed by
FMR under the expense reimbursement for each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Name of Fund Periods of Aggregate Fiscal Years Management Fee Amount of
Expense Limitation Operating Ended Before Management Fee
From To Expense February 28/29 Reimbursement Reimbursement
Limitation
Construction and March 1, February 28, 2.50% 1998 $ 155,730 $ 9,992
Housing 1997 1998
Cyclical March 1, February 28, 2.50% 1998 $ 21,14 1 $ 21,141
Industries 1997 1998
Natural March 1, February 28, 2.50% 1998 $ 38,241 $ 38,241
Resources 1997 1998
Business Service February 4, February 28, 2.50% 1998 $ 2,948 $ 2,948
and Outsourcing 1998 1998
Transportation March 1, February 28, 2.50% 1997 $ 75,979 $ 25,611
1996 1997
March 1, February 29, 2.50% 1996 $ 66,606 $ 15,090
1995 1996
</TABLE>
SUB-ADVISER. On behalf of the money market fund, FMR has entered into
a sub-advisory agreement with FIMM pursuant to which FIMM has primary
responsibility for providing portfolio investment management services
to the fund.
Under the terms of the sub-advisory agreement, FMR pays FIMM fees
equal to 50% of the management fee payable to FMR under its management
contract with the money market fund. The fees paid to FIMM are not
reduced by any voluntary or mandatory expense reimbursements that may
be in effect from time to time.
On behalf of the money market fund, for the fiscal years ended
February 28, 1998, February 28, 1997, and February 29, 1996, FMR paid
FMR Texas Inc. (FMR Texas), the predecessor company to FIMM, fees of
$857,636, $792,040 and $779,003, respectively.
On behalf of the stock funds (except American Gold Portfolio), FMR has
entered into sub-advisory agreements with FMR U.K. and FMR Far East.
Pursuant to the sub-advisory agreements, FMR may receive investment
advice and research services outside the United States from the
sub-advisers.
On behalf of the stock funds (except American Gold Portfolio), FMR may
also grant the sub-advisers investment management authority as well as
the authority to buy and sell securities if FMR believes it would be
beneficial to the funds.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays
the fees of FMR U.K. and FMR Far East. For providing non-discretionary
investment advice and research services, FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with providing investment
advice and research services.
On behalf of each stock fund (except American Gold Portfolio) for
providing discretionary investment management and executing portfolio
transactions, FMR pays FMR U.K. and FMR Far East a fee equal to
50 % of its monthly management fee rate with respect to each
fund's (except American Gold Portfolio) average net assets managed by
the sub-adviser on a discretionary basis.
For providing investment advice and research services, fees paid to
the sub-advisers by FMR on behalf of the f un d s for the
past three fiscal years are shown in the table below.
FEES PAID BY FMR TO FOREIGN SUB-ADVISERS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND FEES PAID BY FMR TO FMR U.K. FEES PAID BY FMR TO FMR FAR EAST
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1998 1997 1996 1998 1997 1996
Air Transportation $ 3,327 $ 1,385 $ 7,281 $ 3,202 $ 1,429 $ 7,977
Automotive 4,434 16,190 2,829 4,325 14,746 3,065
Biotechnology 11,836 57,555 43,136 10,833 55,421 45,732
Brokerage and Investment Management 13,584 1,593 1,737 13,185 1,549 1,873
Business Services and Outsourcing 6* -- -- 5 * -- --
Chemicals 5,873 11,460 4,067 5,590 11,730 4,360
Computers 15,517 14,494 44,800 15,486 14,124 48,650
Construction and Housing 6 463 0 5 439 0
Consumer Industries 474 190 477 455 189 521
Cyclical Industries 40 ** -- -- 40 ** -- --
Defense and Aerospace 1,692 928 323 1,755 853 367
Developing Communications 19,094 16,341 31,635 18,708 15,580 35,287
Electronics 147,596 26,600 50,403 143,650 22,356 59,693
Energy 25,414 27,154 14,746 24,716 25,283 15,810
Energy Service 51,145 26,346 8,516 49,720 25,339 9,360
Environmental Services 2,414 1,352 1,469 2,242 1,317 1,640
Financial Services 439 0 0 424 0 0
Food and Agriculture 5,707 1,856 2,915 5,521 1,799 3,087
Health Care 96,459 140,931 62,044 95,116 132,786 66,180
Home Finance 14,065 13,987 0 13,533 12,464 0
Industrial Equipment 736 1,764 787 746 1,518 907
Industrial Materials 1,579 12,985 10,004 1,540 12,586 11,002
Insurance 770 153 34 746 146 40
Leisure 1,740 2,080 5,700 1,685 1,990 6,340
Medical Delivery 216 741 0 187 642 0
Multimedia 711 3,001 6,935 694 2,963 7,504
Natural Gas 182 786 1,012 154 660 1,005
Natural Resources 559 ** -- -- 554 ** -- --
Paper and Forest Products 809 1,218 2,270 772 1,118 2,457
Precious Metals and Minerals 42,196 104,793 118,405 40,224 101,856 126,271
Regional Banks 6,772 2,772 0 6,544 2,458 0
Retailing 0 1,846 585 0 1,805 632
Software and Computer Services 14,371 16,414 5,397 13,791 15,288 6,305
Technology 23,941 16,385 36,101 25,181 14,600 39,503
Telecommunications 37,699 24,984 53,688 36,443 25,546 57,717
Transportation 571 563 289 575 539 310
Utilities Growth 3,855 3,110 4,286 3,672 3,012 4,379
</TABLE>
* Business Services and Outsourcing commenced operations of
February 4, 1998.
** Cyclical Industries and Natural Resources commenced operations
on March 3, 1997.
For discretionary investment management and execution of portfolio
transactions, no fees were paid to the sub-advisers by FMR on
behalf of the funds for the past three fiscal years.
CONTRACTS WITH FMR AFFILIATES
Each fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC performs
transfer agency, dividend disbursing, and shareholder services for
each fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in a fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus account s , fund type. The a ccount fees are
subject to increase based on postage rate changes.
For the stock funds, the asset-based fees are subject to adjustment if
the year-to-date total return of the S&P 500 exceeds a positive or
negative 15%.
FSC collects a $7.50 exchange fee for each exchange from a stock
fund, including cash exchange from a stock fund to another Fidelity
fund. FSC also collects small account fees from certain accounts
with balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in each Fidelity Freedom Fund,
a fund of funds managed by an FMR affiliate, according to the
percentage of the Freedom Fund's assets that is invested in a fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers the stock fund's securities
lending program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets through out the
month. The annual fee rates for pricing and bookkeeping services are
0.0175% for the money market fund and 0.1000% for each stock fund of
the first $500 million of average net assets and 0.0075% for the money
market fund and 0.0500% for each stock fund of average net assets in
excess of $500 million. The fee, not including reimbursement for
out-of-pocket expenses, is limited to a minimum of $40,000 for the
money market fund and a minimum of $60,000 for each stock fund, and a
maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
PRICING AND BOOKKEEPING FEES
FISCAL 1998 FISCAL 1997 FISCAL 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Air Transportation $ 73,865 $ 92,138 $ 73,290
American Gold 280,044 416,410 351,847
Automotive 65,849 120,805 60,082
Biotechnology 538,574 612,580 527,898
Brokerage and Investment Management 404,906 88,697 47,818
Business Services and Outsourcing 5,000* N/A N/A
Chemicals 83,611 123,784 78,925
Computers 578,646 520,629 454,150
Construction and Housing 60,209 76,325 49,539
Consumer Industries 61,506 60,450 59,535
Cyclical Industries 59,755** N/A N/A
Defense and Aerospace 68,287 61,443 47,698
Developing Communications 239,077 308,377 333,332
Electronics 802,315 799,758 651,136
Energy 191,416 177,681 112,800
Energy Service 680,412 445,567 160,802
Environmental Services 60,348 64,394 47,732
Financial Services 465,691 276,349 196,984
Food and Agriculture 246,634 279,388 210,607
Health Care 800,697 805,100 738,412
Home Finance 791,859 596,198 382,635
Industrial Equipment 65,050 93,288 102,205
Industrial Materials 60,356 98,357 127,391
Insurance 114,165 60,415 47,689
Leisure 143,851 107,125 79,740
Medical Delivery 161,193 215,825 197,086
Money Market 111,447 108,892 99,064
Multimedia 68,383 85,280 96,559
Natural Gas 82,484 113,435 70,811
Natural Resources 59,758** N/A N/A
Paper and Forest Products 60,338 60,429 62,846
Precious Metals and Minerals 195,123 333,124 383,741
Regional Banks 749,121 408,850 231,139
Retailing 153,141 222,542 47,630
Software and Computer Services 436,026 419,686 307,359
Technology 524,451 466,774 378,688
Telecommunications 410,851 479,593 418,462
Transportation 64,993 60,368 47,681
Utilities Growth 274,740 239,403 264,628
</TABLE>
* Business Services and Outsourcing commenced operations on
February 4, 1998.
** Cyclical Industries and Natural Resources commenced operations
on March 3, 1997.
For administering each stocks fund's securities lending program,
FSC receives fees based on the number and duration of individual
securities loans.
For the fiscal years ended February 1998, 1997, and 1996, no
securities lending fees were incurred by those fund's not listed
below.
Securities lending fees paid by the following funds to FSC for the
past three fiscal years are shown in the table below.
SECURITIES LENDING FEES
FISCAL 1998 FISCAL 1997 FISCAL 1996
American Gold $ 1,2 5 5 $ 3,065 $ 3,985
Biotechnology 8,740 9,415 10,900
Chemicals 4,265 770 180
Computers 1 1,975 6,265 11,060
Construction and Housing 298 445 0
Electronics 31,045 13,690 12,190
Energy 575 2,320 1,115
Energy Service 2,025 1,290 380
Financial Services 775 0 305
Food and Agriculture 5,870 0 0
Health Care 7,995 7,915 12,373
Industrial Materials 0 0 2,065
Medical Delivery 1,275 8,900 3,795
Paper and Forest Products 0 0 375
Regional Banks 2,730 3,860 0
Precious Metals and Minerals 965 710 325
Retailing 2,570 4,965 2,010
Software and Computer Services 18,840 5,940 5,525
Technology 20,865 16,005 11,840
Telecommunications 10,585 10,530 11,295
Transportation 3,1 55 0 0
Utilities Growth 2,5 30 780 120
Each fund has a distribution agreement with FDC, an affiliate of
FMR organized as a Massachusetts corporation organized on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities
Dealers, Inc. The distribution agreements call for FDC to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of each fund, which are continuously offered.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
For fiscal 1997 and 1996, FDC collected, in the aggregate $550,208
and $560,711, respectively, of deferred sales charges from the total
value of shares redeemed by shareholders in all funds and from the
Select Cash Reserves Account. On October 12, 1990, the funds' 2.00%
sales charge was increased to 3.00% and the 1.00% deferred sales
charge was eliminated. For fiscal 1997 and 1996, FDC collected in the
aggregate, $51,023,883 and $71,957,898, respectively, of front-end
sales charges. The following table shows the sales charge revenue
retained by FDC for fiscal 1997 and 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended Sales Charge Revenue Deferred Revenue
Air Transportation Feb. 28, 1997 668,390 1,386
Feb. 29, 1996 880,267 1,398
American Gold Feb. 28, 1997 1,162,696 43,678
Feb. 29, 1996 1,434,655 40,619
Automotive Feb. 28, 1997 466,135 2,159
Feb. 29, 1996 381,296 3,109
Biotechnology Feb. 28, 1997 1,854,442 41,551
Feb. 29, 1996 3,591,690 28,707
Brokerage and Investment Management Feb. 28, 1997 903,649 1,311
Feb. 29, 1996 222,268 5,017
Chemicals Feb. 28, 1997 579,393 6,478
Feb. 29, 1996 529,419 23,318
Computers Feb. 28, 1997 2,540,952 5,155
Feb. 29, 1996 7,703,101 10,256
Construction and Housing Feb. 28, 1997 174,919 1,261
Feb. 29, 1996 309,250 1,448
Consumer Industries Feb. 28, 1997 169,639 682
Feb. 29, 1996 372,748 1,264
Defense and Aerospace Feb. 28, 1997 292,571 1,408
Feb. 29, 1996 256,417 4,056
Developing Communications Feb. 28, 1997 733,692 7,987
Feb. 29, 1996 2,513,224 4,453
Electronics Feb. 28, 1997 9,021,074 9,923
Feb. 29, 1996 15,086,139 18,130
Energy Feb. 28, 1997 1,029,850 14,667
Feb. 29, 1996 555,520 29,054
Energy Service Feb. 28, 1997 4,165,989 10,974
Feb. 29, 1996 1,453,689 6,886
Environmental Services Feb. 28, 1997 177,009 9,944
Feb. 29, 1996 80,412 12,652
Financial Services Feb. 28, 1997 1,400,884 8,487
Feb. 29, 1996 1,419,292 10,479
Food and Agriculture Feb. 28, 1997 1,095,115 7,683
Feb. 29, 1996 1,756,887 2,759
Health Care Feb. 28, 1997 2,553,184 69,909
Feb. 29, 1996 5,991,249 54,291
Home Finance Feb. 28, 1997 5,869,188 4,653
Feb. 29, 1996 4,216,342 1,985
Industrial Equipment Feb. 28, 1997 252,021 2,660
Feb. 29, 1996 541,013 7,928
Industrial Materials Feb. 28, 1997 866,268 4,072
Feb. 29, 1996 596,846 12,636
Insurance Feb. 28, 1997 248,750 1,364
Feb. 29, 1996 300,141 6,193
Leisure Feb. 28, 1997 282,104 14,717
Feb. 29, 1996 451,945 17,764
Medical Delivery Feb. 28, 1997 567,463 6,016
Feb. 29, 1996 1,501,132 6,879
Money Market Feb. 28, 1997 2,788,424 97,630
Feb. 29, 1996 4,472,949 76,760
Multimedia Feb. 28, 1997 338,283 4,261
Feb. 29, 1996 923,712 3,278
Fiscal Year Ended Sales Charge Revenue Deferred Revenue
Natural Gas Feb. 28, 1997 682,901 2,332
Feb. 29, 1996 268,316 7,860
Paper and Forest Products Feb. 28, 1997 126,407 2,892
Feb. 29, 1996 526,735 3,068
Precious Metals and Minerals Feb. 28, 1997 669,762 45,427
Feb. 29, 1996 1,543,064 52,879
Regional Banks Feb. 28, 1997 3,497,512 3,702
Feb. 29, 1996 2,107,787 3,130
Retailing Feb. 28, 1997 838,536 4,812
Feb. 29, 1996 266,970 5,475
Software and Computer Services Feb. 28, 1997 1,921,006 5,034
Feb. 29, 1996 3,293,250 6,803
Technology Feb. 28, 1997 1,543,709 36,252
Feb. 29, 1996 3,609,138 41,004
Telecommunications Feb. 28, 1997 1,182,016 30,536
Feb. 29, 1996 2,050,876 25,598
Transportation Feb. 28, 1997 101,332 682
Feb. 29, 1996 157,256 2,170
Utilities Growth Feb. 28, 1997 238,618 38,523
Feb. 29, 1996 682,903 21,405
</TABLE>
Sales charge revenues collected and retained by FDC for the fiscal
year 1998 are shown in the table below.
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
Sales Charge Revenue Deferred Revenue
Fiscal Year Amount Amount Amount Amount
Ended Paid to Retained by Paid to Retained by
FDC FDC FDC FDC
Air Transportation
Feb. 28, 1998 299,325 290,774 946 946
American Gold
Feb. 28, 1998 916,845 902,000 27,084 27,084
Automotive
Feb. 28, 1998 70,085 69,822 597 597
Biotechnology
Feb. 28, 1998 1,105,374 1,099,427 31,256 31,256
Brokerage and Investment Management
Feb. 28, 1998 4,327,828 4,314,336 2,431 2,431
Business Services and Outsourcing
Feb. 28, 1998* 61,937 61,787 0 0
Chemicals
Feb. 28, 1998 84,712 84,544 7,955 7,955
Computers
Feb. 28, 1998 3,518,068 3,494,034 6,144 6,144
Construction and Housing
Feb. 28, 1998 257,572 257,391 240 240
Consumer Industries
Feb. 28, 1998 84,756 79,995 805 805
Cyclical Industries
Feb. 28, 1998** 36,552 36,552 0 0
Defense and Aerospace
Feb. 28, 1998 312,026 309,320 1,329 1,329
Developing Communications
Feb. 28, 1998 479,806 477,848 6,980 6,980
Electronics
Feb. 28, 1998 20,665,782 20,595,342 10,101 10,101
Energy
Feb. 28, 1998 600,122 592,780 14,514 14,514
Energy Service
Feb. 28, 1998 10,530,278 10,501,244 11,289 11,289
Environmental Services
Feb. 28, 1998 42,162 42,118 6,428 6,428
Financial Services
Feb. 28, 1998 2,098,142 2,087,581 8,343 8,343
Food and Agriculture
Feb. 28, 1998 682,877 665,203 5,255 5,255
Health Care
Feb. 28, 1998 4,316,495 4,275,358 56,845 56,845
Home Finance
Feb. 28, 1998 9,770,117 9,751,663 5,349 5,349
Industrial Equipment
Feb. 28, 1998 60,451 60,217 2,151 2,151
Industrial Materials
Feb. 28, 1998 21,426 20,666 2,207 2,207
Insurance
Feb. 28, 1998 686,986 664,282 786 786
Leisure
Feb. 28, 1998 457,999 448,102 13,069 13,069
Medical Delivery
Feb. 28, 1998 212,167 208,986 6,095 6,095
Money Market
Feb. 28, 1998 2,402,715 2,223,313 95,881 95,881
Multimedia
Feb. 28, 1998 304,729 289,533 739 739
Sales Charge Revenue Deferred Revenue
Fiscal Year Amount Amount Amount Amount
Ended Paid to Retained by Paid to Retained by
FDC FDC FDC FDC
Natural Gas
Feb. 28, 1998 288,000 286,855 2,018 2,018
Natural Resources
Feb. 28, 1998** 81,304 81,304 26 26
Paper and Forest Products
Feb. 28, 1998 82,389 81,018 2,161 2,161
Precious Metals and Minerals
Feb. 28, 1998 590,860 588,609 30,793 30,793
Regional Banks
Feb. 28, 1998 7,288,315 7,262,004 4,790 4,790
Retailing
Feb. 28, 1998 622,003 618,590 2,757 2,757
Software and Computer Services
Feb. 28, 1998 1,272,908 1,258,051 5,910 5,910
Technology
Feb. 28, 1998 2,082,341 2,072,865 22,926 22,926
Telecommunications
Feb. 28, 1998 1,091,356 1,084,052 16,675 16,675
Transportation
Feb. 28, 1998 168,254 167,042 925 925
Utilities Growth
Feb. 28, 1998 629,220 601,884 22,382 22,382
</TABLE>
* Business Services and Outsourcing commenced operations on
February 4, 1998.
** Cyclical Industries and Natural Resources commenced operations
on March 3, 1997.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Select Portfolios is an open-end
management investment company organized as a Massachusetts business
trust on November 20, 1980. Subsequent to the reorganization of
certain funds of the trust on October 26, 1990, Automation and
Machinery Portfolio, Life Insurance Portfolio, and Restaurant Industry
Portfolio no longer exist. Also due to the reorganization, Capital
Goods Portfolio was renamed "Industrial Technology Portfolio," and
Property and Casualty Insurance Portfolio was renamed "Insurance
Portfolio." Subsequent to an additional reorganization on February 25,
1994, Electric Utilities Portfolio no longer exists.
On July 18, 1996, Consumer Products Portfolio was renamed "Consumer
Industries."
On August 3, 1994 Utilities Portfolio was renamed "Utilities Growth
Portfolio."
On April 30, 1994, Broadcast and Media Portfolio was renamed
"Multimedia Portfolio."
On February 17, 1993, Savings and Loan Portfolio was renamed "Home
Finance Portfolio."
On June 29, 1992, Industrial Technology Portfolio was renamed
"Industrial Equipment Portfolio."
On June 14, 1990, Housing Portfolio was renamed "Construction and
Housing Portfolio."
On July 10, 1987, Health Care Delivery Portfolio was renamed "Medical
Delivery Portfolio."
On July 29, 1985, Leisure and Entertainment Portfolio was renamed
"Leisure Portfolio."
Currently there are forty funds of the trust: Air Transportation
Portfolio, American Gold Portfolio, Automotive Portfolio,
Biotechnology Portfolio, Brokerage and Investment Management
Portfolio, Business Services and Outsourcing Portfolio, Chemicals
Portfolio, Computers Portfolio, Construction and Housing Portfolio,
Consumer Industries Portfolio, Cyclical Industries Portfolio, Defense
and Aerospace Portfolio, Developing Communications Portfolio,
Electronics Portfolio, Energy Portfolio, Energy Service Portfolio,
Environmental Services Portfolio, Financial Services Portfolio, Food
and Agriculture Portfolio, Health Care Portfolio, Home Finance
Portfolio, Industrial Equipment Portfolio, Industrial Materials
Portfolio, Insurance Portfolio, Leisure Portfolio, Medical Delivery
Portfolio, Medical Equipment and Systems Portfolio, Multimedia
Portfolio, Natural Gas Portfolio, Natural Resources Portfolio, Paper
and Forest Products Portfolio, Precious Metals and Minerals Portfolio,
Regional Banks Portfolio, Retailing Portfolio, Software and Computer
Services Portfolio, Technology Portfolio, Telecommunications
Portfolio, Transportation Portfolio, Utilities Growth Portfolio, Money
Market Portfolio. The Declaration of Trust permits the Trustees to
create additional funds.
In the event that FMR ceases to be the investment adviser to the trust
or a fund, the right of the trust or fund to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one
fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to
such fund, and constitute the underlying assets of such fund. The
underlying assets of each fund are segregated on the books of account,
and are to be charged with the liabilities with respect to such fund
and with a share of the general expenses of the trust. Expenses with
respect to the trust are to be allocated in proportion to the asset
value of the respective funds, except where allocations of direct
expense can otherwise be fairly made. The officers of the trust,
subject to the general supervision of the Board of Trustees, have the
power to determine which expenses are allocable to a given fund, or
which are general or allocable to all of the funds. In the event of
the dissolution or liquidation of the trust, shareholders of each fund
are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be
held personally liable for the obligations of the trust. The
Declaration of Trust provides that the trust shall not have any claim
against shareholders except for the payment of the purchase price of
shares and requires that each agreement, obligation, or instrument
entered into or executed by the trust or the Trustees shall include a
provision limiting the obligations created thereby to the trust and
its assets. The Declaration of Trust provides for indemnification out
of each fund's property of any shareholder held personally liable for
the obligations of the fund. The Declaration of Trust also provides
that each fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the fund and
satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which a fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they
have exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value
of net asset value you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a
fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees. The trust or any fund
may be terminated upon the sale of its assets to another open-end
management investment company, or upon liquidation and distribution of
its assets, if approved by vote of the holders of a majority of the
trust or the fund, as determined by the current value of each
shareholder's investment in the fund or trust. If not so terminated,
the trust and the funds will continue indefinitely. Each fund may
invest all of its assets in another investment company.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of the stock funds. The Bank
of New York, 110 Washington Street, New York, New York is custodian of
the assets of the money market fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest
in obligations of the custodian and may purchase securities from or
sell securities to the custodian. The Bank of New York and The Chase
Manhattan Bank, each headquartered in New York, also may serve as
special purpose custodians of certain assets in connection with
repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. The Boston branch of the stock funds' custodian leases
its office space from an affiliate of FMR at a lease payment which,
when entered into, was consistent with prevailing market rates.
Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Price Waterhouse LLP, 160 Federal Street, Boston,
Massachusetts serves as the trust's independent accountant. The
auditor examines financial statements for the funds and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended February 28, 1998, and report of the auditor, are
included in the funds' Annual Report, which is a separate report
supplied with this SAI. The funds' financial statements, including the
financial highlights, and report of the auditor are incorporated
herein by reference. For a free additional copy of the funds' Annual
Report, contact Fidelity at 1-800-544-8888, 82 Devonshire Street,
Boston, MA 02109.
APPENDIX
The descriptions that follow are examples of eligible ratings for
the funds. A fund may, however, consider the ratings for other types
of investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a
superior ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a
strong ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be
assigned a Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign
(+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody applies numerical
modifiers of 1, 2, or 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks
on the lower end of its generic rating category.
AAA - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.
BAA - Bonds that are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
BA - Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect
to principal or interest.
CA - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA to CCC may be modified by the addition of a plus sign (+) or minus
sign (-) to show relative standing within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights for each fund,
except Medical Equipment and Systems Portfolio, included in the Annual
Report for the Fidelity Select Portfolios for the fiscal year ended
February 28, 1998 are included in the funds' Prospectus, are
incorporated by reference into the funds' Statement of Additional
Information and were filed on April 23, 1998 pursuant to Rule 30d-1
under the Investment Company Act of 1940 and are incorporated herein
by reference.
(b) Exhibits.
(1)(a) Amended and Restated Declaration of Trust, dated April 14,
1994, is incorporated herein by reference to Exhibit 1(a) of
Post-Effective Amendment No. 48.
(2) Bylaws of the Trust, as amended, are incorporated herein by
reference to Exhibit 2(a) of Fidelity Union Street Trust's (File no.
2-50318) Post-Effective Amendment No. 87.
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contracts, dated March 1, 1994, between the
Registrant's Air Transportation, American Gold, Automotive,
Biotechnology, Brokerage and Investment Management, Chemicals,
Computers, Construction and Housing (formerly Housing), Consumer
Industries (formerly Consumer Products), Defense and Aerospace,
Developing Communications, Electronics, Energy, Energy Service,
Environmental Services, Financial Services, Food and Agriculture,
Health Care, Home Finance (formerly Savings and Loan), Industrial
Equipment (formerly Industrial Technology), Industrial Materials,
Insurance (formerly Property and Casualty Insurance), Leisure, Medical
Delivery, Multimedia (formerly Broadcast and Media), Natural Gas,
Paper and Forest Products, Precious Metals and Minerals, Regional
Banks, Retailing, Software and Computer Services, Technology,
Telecommunications, Transportation, Utilities Growth (formerly
Utilities), and Money Market Portfolios and Fidelity Management &
Research Company, are incorporated herein by reference to Exhibit Nos.
5(a)(1-36) of Post-Effective Amendment No. 48.
(b) Sub-Advisory Agreements, dated March 1, 1994, between
Fidelity Management & Research Company and Fidelity Management &
Research (U.K.) Inc. and between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc.,
respectively, with respect to the Registrant's Air Transportation,
Automotive, Biotechnology, Brokerage and Investment Management,
Chemicals, Computers, Construction and Housing (formerly Housing),
Consumer Industries (formerly Consumer Products), Defense and
Aerospace, Developing Communications, Electronics, Energy, Energy
Service, Environmental Services, Financial Services, Food and
Agriculture, Health Care, Home Finance (formerly Savings and Loan),
Industrial Equipment (formerly Industrial Technology), Industrial
Materials, Insurance (formerly Property and Casualty Insurance),
Leisure, Medical Delivery, Multimedia (formerly Broadcast and Media),
Natural Gas, Paper and Forest Products, Precious Metals and Minerals,
Regional Banks, Retailing, Software and Computer Services, Technology,
Telecommunications, Transportation, and Utilities Growth (formerly
Utilities) Portfolios, are incorporated herein by reference to Exhibit
Nos. 5(b)(1-34) of Post-Effective Amendment No. 48.
(c) Sub-Advisory Agreement, dated January 1, 1990, between
Fidelity Management & Research Company and FMR Texas Inc. (currently
known as Fidelity Investments Money Management, Inc.) with respect to
the Money Market Portfolio, is incorporated herein by reference to
Exhibit 5(c) of Post-Effective Amendment No. 51.
(d) Management Contract, dated January 16, 1997, between
Cyclical Industries Portfolio and Fidelity Management & Research
Company, is incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment 58.
(e) Management Contract, dated January 16, 1997, between Natural
Resources Portfolio and Fidelity Management & Research Company, is
incorporated herein by reference to Exhibit 5(e) of Post-Effective
Amendment 58.
(f) Sub-Advisory Agreement, dated January 16, 1997, between
Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research Company on behalf of Cyclical Industries Portfolio, is
incorporated herein by reference to Exhibit 5(f) of Post-Effective
Amendment 59.
(g) Sub-Advisory Agreement, dated January 16, 1997, between
Fidelity Management & Research (Far East) Inc. and Fidelity Management
& Research Company on behalf of Cyclical Industries Portfolio, is
incorporated herein by reference to Exhibit 5(g) of Post-Effective
Amendment 59.
(h) Sub-Advisory Agreement, dated January 16, 1997, between
Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research Company on behalf of Natural Resources Portfolio, is
incorporated herein by reference to Exhibit 5(h) of Post-Effective
Amendment 59.
(i) Sub-Advisory Agreement, dated January 16, 1997, between
Fidelity Management & Research (Far East) Inc. and Fidelity Management
& Research Company on behalf of Natural Resources Portfolio, is
incorporated herein by reference to Exhibit 5(i) of Post-Effective
Amendment 59.
(j) Management Contract, dated December 18, 1997, between
Business Services and Outsourcing Portfolio and Fidelity Management &
Research Company, is incorporated herein by reference to Exhibit 5(j)
of Post-Effective Amendment No. 62.
(k) Management Contract, between Medical Equipment and Systems
Portfolio and Fidelity Management & Research Company, is filed herein
as Exhibit 5(k).
(l) Sub-Advisory Agreement, dated December 18, 1997, between
Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research Company on behalf of Business Services and Outsourcing
Portfolio, is incorporated herein by reference to Exhibit 5(l) of
Post-Effective Amendment No. 62.
(m) Sub-Advisory Agreement, between December 18, 1997, Fidelity
Management & Research (Far East) Inc. and Fidelity Management &
Research Company on behalf of Business Services and Outsourcing
Portfolio, is incorporated herein by reference to Exhibit 5(m) of
Post-Effective Amendment No. 62.
(n) Form of Sub-Advisory Agreement, between Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research Company on
behalf of Medical Equipment and Systems Portfolio, is filed herein as
Exhibit 5(n).
(o) Form of Sub-Advisory Agreement, between Fidelity Management
& Research (Far East) Inc. and Fidelity Management & Research Company
on behalf of Medical Equipment and Systems Portfolio, is filed herein
as Exhibit 5(o).
(6)(a) General Distribution Agreements, dated April 1, 1987, between
the Registrant's Air Transportation, American Gold, Automotive,
Biotechnology, Brokerage and Investment Management, Chemicals,
Computers, Construction and Housing (formerly Housing), Defense and
Aerospace, Electronics, Energy, Energy Service, Financial Services,
Food and Agriculture, Health Care, Home Finance (formerly Savings and
Loan), Industrial Materials, Insurance (formerly Property and Casualty
Insurance), Leisure, Medical Delivery, Money Market, Multimedia
(formerly Broadcast and Media), Paper and Forest Products, Precious
Metals and Minerals, Regional Banks, Retailing, Software and Computer
Services, Technology, Telecommunications, Transportation, and
Utilities Growth (formerly Utilities) Portfolios and Fidelity
Distributors Corporation, are incorporated herein by reference to
Exhibit Nos. 6(a)(1-31) of Post-Effective Amendment No. 51.
(b) Amendment to General Distribution Agreements, dated January
1, 1988, between the Registrant's Air Transportation, American Gold,
Automotive, Biotechnology, Brokerage and Investment Management,
Chemicals, Computers, Construction and Housing (formerly Housing),
Defense and Aerospace, Electronics, Energy, Energy Service, Financial
Services, Food and Agriculture, Health Care, Home Finance (formerly
Savings and Loan), Industrial Materials, Industrial Equipment
(formerly Capital Goods), Insurance (formerly Property and Casualty
Insurance), Leisure, Medical Delivery, Money Market, Multimedia
(formerly Broadcast and Media), Paper and Forest Products, Precious
Metals and Minerals, Regional Banks, Retailing, Software and Computer
Services, Technology, Telecommunications, Transportation, and
Utilities Growth (formerly Utilities) Portfolios and Fidelity
Distributors Corporation, is incorporated herein by reference to
Exhibit 6(b) of Post-Effective Amendment No. 51.
(c) General Distribution Agreement, dated June 29, 1989, between
the Registrant's Environmental Services Portfolio and Fidelity
Distributors Corporation, is incorporated herein by reference to
Exhibit 6(c) of Post-Effective Amendment No. 51.
(d) General Distribution Agreement, dated June 14, 1990, between
the Registrant's Consumer Industries (formerly Consumer Products)
Portfolio and Fidelity Distributors Corporation, is incorporated
herein by reference to Exhibit 6(d) of Post-Effective Amendment No.
51.
(e) General Distribution Agreement, dated June 14, 1990 between
the Registrant's Developing Communications Portfolio and Fidelity
Distributors Corporation, is incorporated herein by reference to
Exhibit 6(e) of Post-Effective Amendment No. 51.
(f) General Distribution Agreement, dated April 15, 1993, between
the Registrant's Natural Gas Portfolio and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(f) of
Post-Effective Amendment No. 46.
(g) Amendment, dated May 10, 1994, to the General Distribution
Agreement, dated April 15, 1993, between the Registrant's Natural Gas
Portfolio and Fidelity Distributors Corporation, is incorporated
herein by reference to Exhibit 6(g) of Post-Effective Amendment No.
50.
(h) General Distribution Agreement, dated April 1, 1987, between
the Registrant's Industrial Equipment (formerly Capital Goods)
Portfolio and Fidelity Distributors Corporation, is incorporated
herein by reference to Exhibit 6(h) of Post-Effective Amendment No.
54.
(i) General Distribution Agreement, dated January 16, 1997,
between Cyclical Industries Portfolio and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(i) of
Post-Effective Amendment 59.
(j) General Distribution Agreement, dated January 16, 1997,
between Natural Resources Portfolio and Fidelity Distributors
Corporation, is incorporated herein by reference to Exhibit 6(j) of
Post-Effective Amendment 59.
(k) Amendments, dated March 14, 1996 and July 15, 1996, to the
General Distribution Agreement between Fidelity Select Portfolios on
behalf of each Fidelity Select Portfolio except Fidelity Select
Natural Gas Portfolio, Fidelity Select Cyclical Industries Portfolio,
Fidelity Select Natural Resources Portfolio, Fidelity Select Business
Services and Outsourcing Portfolio, and Fidelity Select Medical
Equipment and Systems Portfolio and Fidelity Distributors Corporation
are incorporated herein by reference to Exhibit 6(k) of Post-Effective
Amendment No. 57.
(l) Amendments, dated March 14, 1996 and July 15, 1996, to the
General Distribution Agreement between Fidelity Select Portfolios on
behalf of Fidelity Select Natural Gas Portfolio and Fidelity
Distributors Corporation are incorporated herein by reference to
Exhibit 6(l) of Post-Effective Amendment No. 57.
(m) General Distribution Agreement, dated December 18, 1997,
between Business Services and Outsourcing Portfolio and Fidelity
Distributors Corporation, is incorporated herein by reference to
Exhibit 6(m) of Post-Effective Amendment No. 62.
(n) General Distribution Agreement, between Medical Equipment and
Systems Portfolio and Fidelity Distributors Corporation, is filed
herein as Exhibit 6(n).
(o) Form of Bank Agency Agreement (most recently revised January,
1997), is filed herein as Exhibit 6(o).
(p) Form of Selling Dealer Agreement for Bank-Related
Transactions (most recently revised January, 1997), is filed herein as
Exhibit 6(p).
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Post-Effective Amendment No.
54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
(8)(a) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity Select
Portfolios on behalf of the equity portfolios with the exception of
Business Services and Outsourcing and Medical Equipment and Systems
Portfolios is incorporated herein by reference to Exhibit 8(a) of
Fidelity Commonwealth Trust's Post-Effective Amendment No. 56 (File
No. 2-52322).
(b) Appendix A, dated October 16, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers Harriman &
Company and Fidelity Select Portfolios on behalf of the equity
portfolios with the exception of Business Services and Outsourcing and
Medical Equipment and Systems Portfolios is incorporated herein by
reference to Exhibit 8(b) of Fidelity Contrafund's Post-Effective
Amendment No. 50 (File No. 2-25235).
(c) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers Harriman &
Company and Fidelity Select Portfolios on behalf of the equity
portfolios with the exception of Business Services and Outsourcing and
Medical Equipment and Systems Portfolios is incorporated herein by
reference to Exhibit 8(c) of Fidelity Contrafund's Post-Effective
Amendment No. 50 (File No. 2-25235).
(d) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Select Portfolios on behalf
of Select Money Market Portfolio is incorporated herein by reference
to Exhibit 8(a) of Fidelity Hereford Street Trust's Post-Effective
Amendment No. 4 (File No. 33-52577).
(e) Appendix A, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and
Fidelity Select Portfolios on behalf of Select Money Market Portfolio
is incorporated herein by reference to Exhibit 8(e) of Fidelity
Charles Street Trust's Post-Effective Amendment No. 62 (File No.
2-73133).
(f) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and
Fidelity Select Portfolios on behalf of Select Money Market Portfolio
is incorporated herein by reference to Exhibit 8(f) of Fidelity
Charles Street Trust's Post-Effective Amendment No. 62 (File No.
2-73133).
(g) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and Fidelity Select Portfolios on
behalf of all of the portfolios with the exception of Cyclical
Industries, Natural Resources, Business Services and Outsourcing, and
Medical Equipment and Systems Portfolios, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Select Portfolios on behalf
of all of the portfolios with the exception of Cyclical Industries,
Natural Resources, Business Services and Outsourcing, and Medical
Equipment and Systems Portfolios, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(i) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and Fidelity Select Portfolios on
behalf of all of the portfolios with the exception of Cyclical
Industries, Natural Resources, Business Services and Outsourcing, and
Medical Equipment and Systems Portfolios, dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Fidelity Select Portfolios on behalf of all
of the portfolios with the exception of Cyclical Industries, Natural
Resources, Business Services and Outsourcing, and Medical Equipment
and Systems Portfolios, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(k) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Select Portfolios on behalf of all of the
portfolios with the exception of Cyclical Industries, Natural
Resources, Business Services and Outsourcing, and Medical Equipment
and Systems Portfolios, dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash Portfolios'
(File No. 2-74808) Post-Effective Amendment No. 31.
(l) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Select Portfolios on behalf
of all of the portfolios with the exception of Cyclical Industries
Portfolio, Natural Resources Portfolio, Business Services and
Outsourcing Portfolio, and Medical Equipment and Systems Portfolio,
dated July 14, 1995, is incorporated herein by reference to Exhibit
8(i) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(m) Forms of Fidelity Group Repo Custodian Agreement and
Schedule 1 among The Bank of New York, J. P. Morgan Securities, Inc.,
and Fidelity Select Portfolios on behalf of Cyclical Industries
Portfolio, Natural Resources Portfolio, Business Services and
Outsourcing Portfolio, and Medical Equipment and Systems Portfolio are
filed herein as Exhibit 8(m).
(n) Forms of Fidelity Group Repo Custodian Agreement and Schedule
1 among Chemical Bank, Greenwich Capital Markets, Inc., and Fidelity
Select Portfolios on behalf of Cyclical Industries Portfolio, Natural
Resources Portfolios, Business Services and Outsourcing Portfolio, and
Medical Equipment and Systems Portfolio are filed herein as Exhibit
8(n).
(o) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between The Bank
of New York and Fidelity Select Portfolios on behalf of Cyclical
Industries Portfolio, Natural Resources Portfolio, Business Services
and Outsourcing Portfolio, and Medical Equipment and Systems Portfolio
are filed herein as Exhibit 8(o).
(p) Forms of Custodian Agreement and Appendix B and C, between
Brown Brothers Harriman & Company and Fidelity Select Portfolios on
behalf of Business Services and Outsourcing Portfolio and Medical
Equipment and Systems Portfolio is filed herein as Exhibit 8(p).
(9) Not applicable.
(10) Not applicable.
(11)(a) Consent of Price Waterhouse LLP is filed herein as Exhibit
11(a).
(b) Consent of Price Waterhouse LLP is filed herein as Exhibit
11(b).
(12) Not applicable.
(13) Not applicable.
(14)(a) Fidelity Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(a) of Fidelity Union Street Trust's
(File No. 2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect,
is incorporated herein by reference to Exhibit 14(d) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual
Retirement Account Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to Exhibit
14(h) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(i) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as
currently in effect, is incorporated herein by reference to Exhibit
14(e) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined
Contribution Retirement Plan and Trust Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(k) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan,
as currently in effect, is incorporated herein by reference to Exhibit
14(l) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension
Plan, as currently in effect, is incorporated herein by reference to
Exhibit 14(m) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No.
57.
(j) Plymouth Investments Defined Contribution Retirement Plan
and Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Commonwealth Trust's (File No.
2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and
Trust Basic Plan Document and Adoption Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(d) of
Fidelity Securities Fund's (File No. 2-93601) Post-Effective Amendment
No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(o) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit
Sharing/401(k) Basic Plan Document, Standardized Adoption Agreement,
and Non-Standardized Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for
Tax-Exempt Employers Basic Plan Document, Standardized Profit Sharing
Plan Adoption Agreement, Non-Standardized Discretionary Contribution
Plan No. 002 Adoption Agreement, and Non-Standardized Discretionary
Contribution Plan No. 003 Adoption Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(g) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document
and Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(p) of Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(c) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile
Form, and Plan Document, as currently in effect, is incorporated
herein by reference to Exhibit 14(q) of Fidelity Aberdeen Street
Trust's (File No. 33-43529) Post-Effective Amendment No. 19.
(15) Not applicable.
(16)(a) Schedules for the computation of performance calculations and
yield calculations for Select Natural Gas Portfolio and Select Money
Market Portfolio on behalf of the trust were incorporated herein by
reference to Exhibit 16(a) of Post-Effective Amendment No. 51.
(b) A schedule for the computation of a moving average for
Select Insurance Portfolio on behalf of the equity portfolios in the
trust was incorporated herein by reference to Exhibit 16(b) of
Post-Effective Amendment No. 51.
(17) Financial Data Schedules for each fund, except Medical Equipment
and Systems Portfolio, are filed herein as Exhibit 27.
(18) Not applicable.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of the Registrant is substantially the same as
the boards of other funds advised by FMR, each of which has Fidelity
Management & Research Company as its investment adviser. In addition,
the officers of these funds are substantially identical. Nonetheless,
the Registrant takes the position that it is not under common control
with these other funds since the power residing in the respective
boards and officers arises as the result of an official position with
the respective funds.
Item 26. Number of Holders of Securities February 28, 1998
Title of Class: Shares of Beneficial Interest
Title of Class Number of Record Holders
Air Transportation Portfolio 8,255
American Gold Portfolio 24,621
Automotive Portfolio 3,364
Biotechnology Portfolio 51,288
Brokerage and Investment Management Portfolio 42,614
Business Services and Outsourcing Portfolio 1,104
Chemicals Portfolio 6,280
Computers Portfolio 60,594
Construction and Housing Portfolio 3,956
Consumer Industries Portfolio 5,221
Cyclical Industries Portfolio 402
Defense and Aerospace Portfolio 6,219
Developing Communications Portfolio 24,203
Electronics Portfolio 181,953
Energy Portfolio 14,036
Energy Service Portfolio 66,591
Environmental Services Portfolio 4,094
Financial Services Portfolio 36,696
Food and Agriculture Portfolio 20,043
Health Care Portfolio 115,714
Home Finance Portfolio 100,029
Industrial Equipment Portfolio 3,708
Industrial Materials Portfolio 2,354
Insurance Portfolio 8,829
Leisure Portfolio 17,326
Medical Delivery Portfolio 13,478
Medical Equipment and Systems Portfolio 0
Money Market Portfolio 28,524
Multimedia Portfolio 9,776
Natural Gas Portfolio 6,376
Natural Resources Portfolio 883
Paper and Forest Products Portfolio 2,490
Precious Metals and Minerals Portfolio 23,995
Regional Banks Portfolio 82,604
Retailing Portfolio 12,001
Software and Computer Services Portfolio 39,672
Technology Portfolio 48,409
Telecommunications Portfolio 44,497
Transportation Portfolio 5,225
Utilities Growth Portfolio 22,699
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Registrant shall indemnify any present or past Trustee or
officer to the fullest extent permitted by law against liability and
all expenses reasonably incurred by him in connection with any claim,
action, suit, or proceeding in which he is involved by virtue of his
service as a Trustee, an officer, or both. Additionally, amounts paid
or incurred in settlement of such matters are covered by this
indemnification. Indemnification will not be provided in certain
circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
willful misfeasance, bad faith, gross negligence, and reckless
disregard of the obligations and duties under the Distribution
Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to
indemnify and hold Service harmless against any losses, claims,
damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names the
Service and/or the Registrant as a party and is not based on and does
not result from Service's willful misfeasance, bad faith or negligence
or reckless disregard of duties, and arises out of or in connection
with Service's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by Service's willful misfeasance, bad faith or
negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from Service's acting upon any
instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of Service's acting in reliance upon advice reasonably believed
by Service to have been given by counsel for the Registrant, or as a
result of Service's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board and Director of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman
of the Board and Director of FMR Corp., FIMM, FMR
U.K., and FMR FAR EAST; Chairman of the Executive
Committee of FMR; Director of Fidelity Investments
Japan Limited; President and Trustee of funds advised
by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FIMM, FMR U.K., and FMR FAR EAST;
Previously, General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
John H. Carlson Vice President of FMR and of funds advised by FMR.
Dwight D. Churchill Senior Vice President of FMR and Vice President of
Bond Funds advised by FMR; Vice President of FIMM.
Brian Clancy Vice President of FMR and Treasurer of FMR, FIMM,
FMR U.K., and FMR FAR EAST.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR, FIMM, FMR U.K., FMR
FAR EAST; Treasurer of FMR Corp.
William Danoff Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Walter C. Donovan Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and of funds advised by FMR.
William R. Ebsworth Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
U.K., and FMR FAR EAST; Secretary of FIMM.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR and Vice President of
Money Market Funds advised by FMR.
Bart A. Grenier Vice President of High-Income Funds advised by
FMR;Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
Richard Hazelwood Vice President of FMR.
Fred L. Henning Jr. Senior Vice President of FMR and Vice President of
Fixed-Income funds advised by FMR.
Bruce T. Herring Vice President of FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.;
Associate Director and Senior Vice President of Equity
funds advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
U.K.
Robert A. Lawrence Senior Vice President of FMR and Vice President of
Fidelity Real Estate High Income and Fidelity Real
Estate High income II funds advised by FMR; Associate
Director and Senior Vice President of Equity funds
advised by FMR; Previously, Vice President of High
Income funds advised by FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Charles A. Mangum Vice President of FMR and of a fund advised by FMR.
Kevin McCarey Vice President of FMR and of a fund advised by FMR.
Diane M. McLaughlin Vice President of FMR.
Neal P. Miller Vice President of FMR.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Scott A. Orr Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kevin A. Richardson Vice President of FMR.
Eric D. Roiter Senior Vice President and General Counsel of FMR and
Secretary of funds advised by FMR.
Mark S. Rzepczynski Vice President of FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Richard A. Silver Vice President of FMR.
Carol A. Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Previously, Senior Vice President and Director of
Operations and Compliance of FMR U.K.
Thomas M. Sprague Vice President of FMR and of funds advised by FMR.
Robert E. Stansky Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Scott D. Stewart Vice President of FMR.
Cynthia L. Strauss Vice President of FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.
Steven S. Wymer Vice President of FMR and of a fund advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
<TABLE>
<CAPTION>
<S> <C>
FMR, FMR Corp., FIMM, and FMR FAR EAST;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Executive Committee of FMR;
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FIMM, FMR U.K., and FMR FAR EAST;
Previously, General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
Brian Clancy Treasurer of FMR U.K., FMR FAR EAST, FMR, and
FIMM and Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR U.K., FMR, FMR FAR
EAST, and FIMM; Treasurer of FMR Corp.
Francis V. Knox Compliance Officer of FMR U.K.; Previously, Vice
President of FMR.
Jay Freedman Clerk of FMR U.K., FMR FAR EAST, and FMR Corp.;
Assistant Clerk of FMR; Secretary of FIMM.
Sarah H. Zenoble Senior Vice President and Director of Operations
andCompliance.
(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC. (FMR FAR
EAST)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
FAR EAST, FMR, FMR Corp., FIMM, and FMR
U.K.; Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of
FMR Corp.; Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR FAR EAST; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.
Robert H. Auld Senior Vice President of FMR FAR EAST.
Brian Clancy Treasurer of FMR FAR EAST, FMR U.K., FMR,
and FIMM and Vice President of FMR.
Jay Freedman Clerk of FMR FAR EAST, FMR U.K., and FMR
Corp.; Assistant Clerk of FMR; Secretary of
FIMM.
Stephen G. Manning Assistant Treasurer of FMR FAR EAST, FMR,
FMR U.K., and FIMM; Treasurer of FMR Corp.
Billy Wilder Vice President of FMR FAR EAST; President
and Representative Director of Fidelity
Investments Japan Limited.
(4) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
FIMM provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FIMM,
FMR, FMR Corp., FMR FAR EAST, and FMR
U.K.; Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of
FMR Corp.; Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR FAR EAST; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.
Robert H. Auld Vice President of FIMM.
Dwight D. Churchill Vice President of FIMM; Senior Vice President
of FMR and Vice President of Bond Funds
advised by FMR.
Brian Clancy Treasurer of FIMM, FMR FAR EAST, FMR
U.K., and FMR and Vice President of FMR.
Robert K. Duby Vice President of FIMM and of funds advised by
FMR.
Jay Freedman Secretary of FIMM; Clerk of FMR U.K., FMR
FAR EAST, and FMR Corp.; Assistant Clerk of
FMR.
Robert Litterst Vice President of FIMM and of funds advised by
FMR.
Thomas D. Maher Vice President of FIMM and Assistant Vice
President of Money Market funds advised by
FMR.
Stephen G. Manning Assistant Treasurer of FIMM, FMR U.K., FMR
FAR EAST, and FMR; Treasurer of FMR Corp.
Scott A. Orr Vice President of FIMM and of funds advised by
FMR.
Burnell R. Stehman Vice President of FIMM and of funds advised by
FMR.
John J. Todd Vice President of FIMM and of funds advised by
FMR.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
most funds advised by FMR.
(b)
<TABLE>
<S> <C> <C>
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
James Curvey Director None
Martha B. Willis President None
Eric D. Roiter Senior Vice President Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
</TABLE>
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the
funds' respective custodians, The Bank of New York, 110 Washington
Street, New York, N.Y. and Brown Brothers Harriman & Co., 40 Water
Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant undertakes for Natural Gas Portfolio, Cyclical
Industries Portfolio, Natural Resources Portfolio, Business Services
and Outsourcing Portfolio, and Medical Equipment and Systems
Portfolio: 1) to call a meeting of shareholders for the purpose of
voting upon the questions of removal of a trustee or trustees, when
requested to do so by record holders of not less than 10% of its
outstanding shares; and 2) to assist in communications with other
shareholders pursuant to Section 16(c)(1) and (2), whenever
shareholders meeting the qualifications set forth in Section 16(c)
seek the opportunity to communicate with other shareholders with a
view toward requesting a meeting.
(b) The Registrant, on behalf of Fidelity Select Portfolios, provided
the information required for the stock funds by Item 5A is contained
in the annual report, undertakes to furnish to each person to whom a
prospectus has been delivered, upon their request and without charge,
a copy of the Registrant's latest annual report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for the effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Post-Effective Amendment No. 64 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 22nd day of April 1998.
Fidelity Select Portfolios
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee April 22, 1998
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer April 22, 1998
Richard A. Silver
/s/Robert C. Pozen Trustee April 22, 1998
Robert C. Pozen
/s/Ralph F. Cox * Trustee April 22, 1998
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee April 22, 1998
Phyllis Burke Davis
/s/Robert M. Gates ** Trustee April 22, 1998
Robert M. Gates
/s/E. Bradley Jones * Trustee April 22, 1998
E. Bradley Jones
/s/Donald J. Kirk * Trustee April 22, 1998
Donald J. Kirk
/s/Peter S. Lynch * Trustee April 22, 1998
Peter S. Lynch
/s/Marvin L. Mann * Trustee April 22, 1998
Marvin L. Mann
/s/William O. McCoy * Trustee April 22, 1998
William O. McCoy
/s/Gerald C. McDonough * Trustee April 22, 1998
Gerald C. McDonough
/s/Thomas R. Williams * Trustee April 22, 1998
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
</TABLE>
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
Exhibit 5(k)
MANAGEMENT CONTRACT
between
FIDELITY SELECT PORTFOLIOS:
MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 18th day of December, 1997, by and between
Fidelity Select Portfolios, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Fund"), on behalf of Medical Equipment and Systems
Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") as set forth in its entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act
as investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts
to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee
Rate shall be determined on a cumulative basis pursuant to the
following schedule:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over - 534 .2500
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July
31, 1998 and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY SELECT PORTFOLIOS
on behalf of Medical Equipment and Systems Portfolio
By /s/Robert C. Pozen
Robert C. Pozen
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/Robert C. Pozen
Robert C. Pozen
President
Exhibit 5(n)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY SELECT PORTFOLIOS ON BEHALF OF MEDICAL EQUIPMENT AND SYSTEMS
PORTFOLIO
AGREEMENT made this _th day of __, 199_, by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Management & Research
(U.K.) Inc. (hereinafter called the "Sub-Advisor"); and Fidelity
Select Portfolios, a Massachusetts business trust which may issue one
or more series of shares of beneficial interest (hereinafter called
the "Trust") on behalf of Medical Equipment and Systems Portfolio
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located in such
countries, and providing investment advisory services in connection
therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the
extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on
the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 110% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers or reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1998 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of Section
15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth
in the Declaration of Trust or other organizational document of the
Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED.]
Exhibit 5(o)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY SELECT PORTFOLIOS ON BEHALF OF MEDICAL EQUIPMENT AND SYSTEMS
PORTFOLIO
AGREEMENT made this _th day of __, 199_, by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Management & Research
(Far East) Inc. (hereinafter called the "Sub-Advisor"); and Fidelity
Select Portfolios, a Massachusetts business trust which may issue one
or more series of shares of beneficial interest (hereinafter called
the "Trust") on behalf of Medical Equipment and Systems Portfolio
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, and securities of issuers located in such
countries, and providing investment advisory services in connection
therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker-dealers as the Sub-Advisor may
select. The Sub-Advisor may also be authorized, but only to the
extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including
but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction
of the Advisor and the Trust's Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor
shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with brokers or dealers
selected by the Sub-Advisor, which may include brokers or dealers
affiliated with the Advisor or Sub-Advisor. The Sub-Advisor shall use
its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which
are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines
in good faith that such amount of commission is reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by the Portfolio to determine if the
commissions paid over representative periods of time were reasonable
in relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on
the following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory
Fee shall be equal to 105% of the Sub-Advisor's costs incurred in
connection with rendering the services referred to in subparagraph (a)
of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the
Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub-Advisor shall not be
subject to liability to the Advisor, the Trust or to any shareholder
of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, 1998 and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of Section
15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth
in the Declaration of Trust or other organizational document of the
Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
Exhibit 6(n)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY SELECT PORTFOLIOS
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of December, 1997, between Fidelity
Select Portfolios, a Massachusetts business trust having its principal
place of business in Boston, Massachusetts and which may issue one or
more series of beneficial interest ("Issuer"), with respect to shares
of Medical Equipment and Systems Portfolio, a series of the Issuer,
and Fidelity Distributors Corporation, a Massachusetts corporation
having its principal place of business in Boston, Massachusetts
("Distributors").
In consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to
sell shares on behalf of the Issuer during the term of this Agreement
and subject to the registration requirements of the Securities Act of
1933, as amended ("1933 Act"), and of the laws governing the sale of
securities in the various states ("Blue Sky Laws") under the following
terms and conditions: Distributors (i) shall have the right to sell,
as agent on behalf of the Issuer, shares authorized for issue and
registered under the 1933 Act, and (ii) may sell shares under offers
of exchange, if available, between and among the funds advised by
Fidelity Management & Research Company ("FMR") or any of its
affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors
shall be nonexclusive in that the Issuer reserves the right to sell
its shares to investors on applications received and accepted by the
Issuer. Further, the Issuer reserves the right to issue shares in
connection with the merger or consolidation, or acquisition by the
Issuer through purchase or otherwise, with any other investment
company, trust, or personal holding company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its
treasury in the event that in the discretion of the Issuer treasury
shares shall be sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all
shares sold to investors by Distributors or the Issuer will be sold at
the public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in
the manner described in the Issuer's current Prospectus and/or
Statement of Additional Information, plus a sales charge (if any)
described in the Issuer's current Prospectus and/or Statement of
Additional Information. The Issuer shall in all cases receive the net
asset value per share on all sales. If a sales charge is in effect,
Distributors shall have the right subject to such rules or regulations
of the Securities and Exchange Commission as may then be in effect
pursuant to Section 22 of the Investment Company Act of 1940 to pay a
portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in
effect, the Issuer shall collect the fee on behalf of Distributors
and, unless otherwise agreed upon by the Issuer and Distributors,
Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net
asset value is suspended and until such suspension is terminated, no
further orders for shares shall be processed by Distributors except
such unconditional orders as may have been placed with Distributors
before it had knowledge of the suspension. In addition, the Issuer
reserves the right to suspend sales and Distributors' authority to
process orders for shares on behalf of the Issuer if, in the judgment
of the Issuer, it is in the best interests of the Issuer to do so.
Suspension will continue for such period as may be determined by the
Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the Issuer. This shall not prevent Distributors from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. This does not obligate
Distributors to register as a broker or dealer under the Blue Sky Laws
of any jurisdiction in which it is not now registered or to maintain
its registration in any jurisdiction in which it is now registered.
If a sales charge is in effect, Distributors shall have the right to
enter into sales agreements with dealers of its choice for the sale of
shares of the Issuer to the public at the public offering price only
and fix in such agreements the portion of the sales charge which may
be retained by dealers, provided that the Issuer shall approve the
form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently
effective Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other
than those contained in the appropriate registration statements or
Prospectuses and Statements of Additional Information filed with the
Securities and Exchange Commission under the 1933 Act (as these
registration statements, Prospectuses and Statements of Additional
Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on
behalf of the Issuer for Distributors' use. This shall not be
construed to prevent Distributors from preparing and distributing
sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be
bought or sold by or through Distributors, and Distributors may
participate directly or indirectly in brokerage commissions or
"spreads" for transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all
action necessary to register shares under the 1933 Act (subject to the
necessary approval of its shareholders) so that there will be
available for sale the number of shares Distributors may reasonably be
expected to sell. The Issuer shall make available to Distributors
such number of copies of its currently effective Prospectus and
Statement of Additional Information as Distributors may reasonably
request. The Issuer shall furnish to Distributors copies of all
information, financial statements and other papers which Distributors
may reasonably request for use in connection with the distribution of
shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in
connection with the preparation, setting in type and filing of any
registration statement, Prospectus and Statement of Additional
Information under the 1933 Act and amendments for the issue of its
shares, (b) in connection with the registration and qualification of
shares for sale in the various states in which the Board of Trustees
of the Issuer shall determine it advisable to qualify such shares for
sale (including registering the Issuer as a broker or dealer or any
officer of the Issuer as agent or salesman in any state), (c) of
preparing, setting in type, printing and mailing any report or other
communication to shareholders of the Issuer in their capacity as such,
and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
It is recognized by the Issuer that FMR may make payment to
Distributors with respect to any expenses incurred in the distribution
of shares of the Issuer, such payments payable from the past profits
or other resources of FMR including management fees paid to it by the
Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person,
if any, who controls Distributors within the meaning of Section 15 of
the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading under the 1933 Act, or any other statute or the common law.
However, the Issuer does not agree to indemnify Distributors or hold
it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Issuer by or on behalf of Distributors. In no case (i) is the
indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against
any liability to the Issuer or its security holders to which
Distributors or such person would otherwise be subject by reason of
wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Issuer to
be liable under its indemnity agreement contained in this paragraph
with respect to any claim made against Distributors or any person
indemnified unless Distributors or person, as the case may be, shall
have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person
shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve
the Issuer from any liability which it may have to Distributors or any
person against whom such action is brought otherwise than on account
of its indemnity agreement contained in this paragraph. The Issuer
shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to
enforce any claims, but if the Issuer elects to assume the defense,
the defense shall be conducted by counsel chosen by it and
satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or
directors or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel
retained by them. If the Issuer does not elect to assume the defense
of any suit, it will reimburse Distributors, officers or directors or
controlling person or persons, defendant or defendants in the suit,
for the reasonable fees and expenses of any counsel retained by them.
The Issuer agrees to notify Distributors promptly of the commencement
of any litigation or proceedings against it or any of its officers or
trustees in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and
hold harmless the Issuer and each of its Board members and officers
and each person, if any, who controls the Issuer within the meaning of
Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or expense and
reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the 1933 Act or
any other statute or common law, alleging any wrongful act of
Distributors or any of its employees or alleging that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Issuer (as from time to time amended) included an untrue statement of
a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in
favor of the Issuer or any person indemnified to be deemed to protect
the Issuer or any person against any liability to which the Issuer or
such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is Distributors to be liable
under its indemnity agreement contained in this paragraph with respect
to any claim made against the Issuer or any person indemnified unless
the Issuer or person, as the case may be, shall have notified
Distributors in writing of the claim within a reasonable time after
the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any
such person (or after the Issuer or such person shall have received
notice of service on any designated agent). However, failure to
notify Distributors of any claim shall not relieve Distributors from
any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to
Distributors, it shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit
brought to enforce the claim, but if Distributors elects to assume the
defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Issuer, to its officers and Board and to any
controlling person or persons, defendant or defendants in the suit.
In the event that Distributors elects to assume the defense of any
suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect
to assume the defense of any suit, it will reimburse the Issuer,
officers and Board or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. Distributors agrees to notify the Issuer
promptly of the commencement of any litigation or proceedings against
it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force
until March 31, 1998 and thereafter from year to year, provided
continuance is approved annually by the vote of a majority of the
Board members of the Issuer, and by the vote of those Board members of
the Issuer who are not "interested persons" of the Issuer and, if a
plan under Rule 12b-1 under the Investment Company Act of 1940 is in
effect, by the vote of those Board members of the Issuer who are not
"interested persons" of the Issuer and who are not parties to the
Distribution and Service Plan or this Agreement and have no financial
interest in the operation of the Distribution and Service Plan or in
any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval.
This Agreement shall automatically terminate in the event of its
assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in
the Investment Company Act of 1940 as now in effect or as hereafter
amended. In addition to termination by failure to approve continuance
or by assignment, this Agreement may at any time be terminated by
either party upon not less than sixty days' prior written notice to
the other party.
13. Notice - Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Issuer, at 82 Devonshire Street,
Boston, Massachusetts, and if to Distributors, at 82 Devonshire
Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice
of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Issuer
and agrees that the obligations assumed by the Issuer under this
contract shall be limited in all cases to the Issuer and its assets.
Distributors shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. Distributors
understands that the rights and obligations of each series of shares
of the Issuer under the Issuer's Declaration of Trust or other
organizational document are separate and distinct from those of any
and all other series.
15. This agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its
name and behalf, and its seal affixed, by one of its officers duly
authorized, and Distributors has executed this instrument in its name
and behalf by one of its officers duly authorized, as of the day and
year first above written.
FIDELITY SELECT PORTFOLIOS
By /s/Robert C. Pozen
Robert C. Pozen
President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Martha B. Willis
Martha B. Willis
President
Exhibit 6(o)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to
your customers shares of the mutual funds, or the separate series or
classes of the mutual funds, listed on Schedules A and B attached to
this Agreement (the "Portfolios"). We may periodically change the
list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and act as agent for the
Portfolios. You (____________________________________) are a division
or affiliate of a bank (____________________________________) and
desire to make Portfolio shares available to your customers on the
following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for
your customers; in no transaction are you authorized to act as agent
for us or for any Portfolio; (ii) you will initiate transactions only
upon your customers' orders; (iii) we will execute transactions only
upon receiving instructions from you acting as agent for your
customers; and (iv) each transaction will be for your customer's
account and not for your own account. Each transaction will be
without recourse to you, provided that you act in accordance with the
terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to make Portfolio shares available to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You will not withhold placing customers'
orders so as to profit yourself as a result of such withholding (for
example, by a change in a Portfolio's net asset value from that used
in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your
customers only in states where you may legally make such Portfolio's
shares available. You will not make available shares of any Portfolio
unless such shares are registered under the applicable state and
federal laws and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent
with respect to sales of Portfolio shares will be as provided in the
Prospectus or in the applicable schedule of agency fees issued by us
and in effect at the time of the sale. Upon written notice to you, we
or any Portfolio may change or discontinue any schedule of agency
fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of agency fees, distribution payments, or service
payments, or the termination of a Plan, any agency fees, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any agency fee, distribution
payment, or service payment, you will remit such overpayment.
(d) If, within seven (7) business days after our confirmation of
the original purchase order for shares of a Portfolio, such shares are
redeemed by the issuing Portfolio or tendered for redemption by the
customer, you agree (i) to refund promptly to us the full amount of
any agency fee, distribution payment, or service payment paid to you
on such shares, and (ii) if not yet paid to you, to forfeit the right
to receive any agency fee, distribution payment, or service payment
payable to you on such shares. We will notify you of any such
redemption within ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to
this Agreement represents to the other party that it is either (i) a
registered broker/dealer under the 1934 Act, or (ii) a "bank" as
defined in Section 3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents
that it is qualified to act as a broker/dealer in the states where it
transacts business, and it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees
to maintain its broker/dealer registration and qualifications and its
NASD membership in good standing throughout the term of this
Agreement. It agrees to abide by all of the NASD's rules and
regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will
terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized
to engage in the transactions to be performed under this Agreement,
and you agree to comply with all applicable federal and state laws,
including the rules and regulations of all applicable federal and
state bank regulatory agencies and authorities. This Agreement will
terminate automatically without notice in the event that you cease to
be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In ordering Portfolio shares from us under this Agreement, you will
rely only on the representations contained in the Prospectus. Upon
your request, we will furnish you with a reasonable number of copies
of the Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with making Portfolio shares available to your customers
without obtaining our prior written approval. You may not distribute
or make available to investors any information that we furnish you
marked "FOR DEALER USE ONLY" or that otherwise indicates that it is
confidential or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is file against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend making Portfolio shares available
to your customers in the event of any such filing or violation, or in
the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934
Act.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **
Exhibit 6(p)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute
shares of the mutual funds, or the separate series or classes of the
mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios
by giving you written notice of the change. We are the Portfolios'
principal underwriter and, as agent for the Portfolios, we offer to
sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a
broker/dealer under the Securities Exchange Act of 1934 (the "1934
Act") and have executed a written agreement with a bank or bank
affiliate to provide brokerage services to that bank, bank affiliate
and/or their customers. As used in this Agreement, the term "Bank"
means a bank as defined in Section 3(a)(6) of the 1934 Act, or an
affiliate of such a bank, with which you have entered into a written
agreement to provide brokerage services; and the term "Bank Client"
means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in
the Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with
the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the 1934 Act. If we do not receive your payment on or
before such settlement date, we may, without notice, cancel the sale,
or, at our option, sell the shares that you ordered back to the
issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to
make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply
only with respect to (i) shares of the "Fidelity Funds" (as designated
on Schedule A attached to this Agreement) purchased or maintained for
the account of Bank Clients, and (ii) shares of the "Fidelity Advisor
Funds" (as designated on Schedule B attached to this Agreement).
Anything to the contrary notwithstanding, neither we nor any Portfolio
will provide to you, nor may you retain, concessions on your sales of
shares of, or distribution payments or service payments with respect
to assets of, the Fidelity Funds attributable to you or any of your
clients, other than Bank Clients. When you place an order in shares
of the Fidelity Funds with us, you will identify the Bank on behalf of
whose Clients you are placing the order; and you will identify as a
non-Bank Client Order, any order in shares of the Fidelity Funds
placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either
party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 11.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **
Exhibit 8(m)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of ______, among THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), J.P. MORGAN SECURITIES INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 (collectively, the
"Funds" and each a "Fund") hereto, acting on behalf of itself or (i)
in the case of the Funds listed on Schedule A-1 or A-2 hereto which
are portfolios or series, acting through the series company listed on
Schedule A-1 or A-2 hereto, (ii) in the case of the accounts listed on
Schedule A-3 hereto, acting through Fidelity Management & Research
Company, and (iii) in the case of the commingled or individual
accounts listed on Schedule A-4 hereto, acting through Fidelity
Management Trust Company (collectively, the "Funds" and each, a
"Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase
agreement dated as of ___________, (the "Master Agreement") with
Seller pursuant to which from time to time one or more of the Funds,
as buyers, and Seller, as seller, may enter into repurchase
transactions effected through one or more joint trading accounts
(collectively, the "Joint Trading Account") established and
administered by one or more custodians of the Funds identified on
Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from
Eligible Securities (as hereinafter defined) held by Repo Custodian,
subject to an agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities
account (the "Seller Account") for Seller for the purpose of, among
other things, effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the
custodian for the Funds in connection with the repurchase transactions
effected hereunder, and that the Repo Custodian hold cash, Cash
Collateral (as hereinafter defined) and Securities for the Funds for
the purpose of effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller
Custodian, Repo Custodian, and the Federal Reserve Banks where the
Custodian and the Repo Custodian are located, are each open for
business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S.
Dollars, credited by Repo Custodian to a Transaction Account pursuant
to Paragraphs 3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(d) "Eligible Securities" shall mean those securities which are
identified as permissible securities for a particular Transaction
Category.
(e) "FICASH I Transaction" and "FICASH III Transaction " shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day
next following the Sale Date and for which securities issued by the
government of the United States of America that are direct obligations
of the government of the United States of America shall constitute
Eligible Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United
States of America that are direct obligations of the government of the
United States of America, or (y) securities issued by or guaranteed as
to principal and interest by the government of the United States of
America, or by its agencies and/or instrumentalities, including, but
not limited to, the Federal Home Loan Bank, Federal Home Loan Mortgage
Corp., Government National Mortgage Association, Federal National
Mortgage Association, Federal Farm Credit Bank, Federal Intermediate
Credit Bank, Banks for Cooperatives, and Federal Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date and for which securities
issued by the government of the United States of America that are
direct obligations of the government of the United States of America
shall constitute Eligible Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is a date fixed by agreement between Seller
and the Participating Funds which is not the Banking Day next
following the Sale Date and for which one or more of the following two
categories of securities, as specified by the Funds, shall constitute
Eligible Securities: (x) securities issued by the government of the
United States of America that are direct obligations of the government
of the United States of America, or (y) securities issued by or
guaranteed as to principal and interest by the government of the
United States of America, or by its agencies and/or instrumentalities,
including, but not limited to, the Federal Home Loan Bank, Federal
Home Loan Mortgage Corp., Government National Mortgage Association,
Federal National Mortgage Association, Federal Farm Credit Bank,
Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction
shall be 102% or such other percentage as is agreed to by Seller and
the Participating Funds (except that in no event shall the Margin
Percentage be less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of
the Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the
preamble of this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph
3(c) of this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section
4(g) of this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to
a particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to
by Seller and the Participating Funds for a repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph
7 of this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble
of this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to
repurchase Securities and Cash Collateral, if any, from the
Participating Funds and the Participating Funds are to resell the
Securities and Cash Collateral, if any, including any date determined
by application of the provisions of Paragraphs 7 and 15 of the Master
Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the
Sale Price, plus an incremental amount determined by applying the
Pricing Rate to the Sale Price, calculated on the basis of a 360-day
year and the number of actual days elapsed from (and including) the
Sale Date to (but excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and
Cash Collateral, if any, are to be sold to the Participating Funds by
Seller pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the
Participating Funds and Seller at which the Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by
Seller.
(y) "Securities" shall mean all Eligible Securities delivered by
Seller or to be delivered by Seller to the Participating Funds
pursuant to a particular repurchase transaction and not yet
repurchased hereunder, together with all rights related thereto and
all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph
3(c) of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to
this Agreement.
(bb) "Seller Account" shall have the meaning set forth in the
preamble of this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of
repurchase transaction effected hereunder, as determined with
reference to the term of the transaction and the categories of
Securities that constitute Eligible Securities therefor, which term
shall include FICASH I Transactions, FICASH II Transactions, FICASH
III Transactions, FITERM I Transactions, FITERM II Transactions,
FITERM III Transactions, and such other transaction categories as may
from time to time be designated by the Funds by notice to Seller,
Custodian and Repo Custodian.
2. Appointment of Repo Custodian. Upon the terms and conditions set
forth in this Agreement, Repo Custodian is hereby appointed by the
Funds to act as the custodian for the Participating Funds to hold
cash, Cash Collateral and Securities for the purpose of effecting
repurchase transactions for the Participating Funds through the Joint
Trading Account pursuant to the Master Agreement. Repo Custodian
hereby acknowledges the terms of the Master Agreement between the
Funds and Seller (attached as an Exhibit hereto), as amended from time
to time, and agrees to abide by the provisions thereof to the extent
such provisions relate to the responsibilities and operations of Repo
Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more
Transaction Accounts for the purpose of effecting repurchase
transactions hereunder for the Funds, in each case pursuant to the
Master Agreement. From time to time the Funds may cause Custodian, on
behalf of the Funds, to deposit Securities and cash with Repo
Custodian in the designated Transaction Account, in each case in
accordance with Paragraph 3 of the Master Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash
Collateral received for the Participating Funds segregated at all
times from those of any other person, firm or corporation in its
possession and shall identify all such Securities, cash and Cash
Collateral as subject to this Agreement and the Master Agreement.
Segregation may be accomplished by physical segregation with respect
to certificated securities held by the Repo Custodian and, in
addition, by appropriate identification on the books and records of
Repo Custodian in the case of all other Securities, cash and Cash
Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating
Funds, and shall be subject at all times to the proper instructions of
the Participating Funds, or the Custodian on behalf of the
Participating Funds, with respect to the holding, transfer or
disposition of such Securities and Cash Collateral. Repo Custodian
shall include in its records for each Transaction Account all
instructions received by it which evidence an interest of the
Participating Funds in the Securities and Cash Collateral and shall
hold physically segregated any written agreement, receipt or other
writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash
Collateral to the Participating Funds or to "credit" a Transaction
Account under this or any other paragraph of this Agreement shall be
made in immediately available funds. If Repo Custodian is required to
"deliver" or "transfer" Securities to the Participating Funds under
this or any other paragraph of this Agreement, Repo Custodian shall
take, or cause to be taken, the following actions to perfect the
Participating Funds' interest in such Securities as an outright
purchaser: (i) in the case of certificated securities and instruments
held by Seller, by physical delivery of the share certificates or
other instruments representing the Securities and by physical
segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities
are being held for the Participating Funds (such securities and
instruments to be delivered in form suitable for transfer or
accompanied by duly executed instruments of transfer or assignment in
blank and accompanied by such other documentation as the Participating
Funds may request), (ii) in the case of Securities held in a customer
only account in a clearing agency or federal book-entry system
authorized for use by the Funds and meeting the requirements of Rule
17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act") (such authorized agency or system being referred to herein as a
"Securities System"), by appropriate entry on the books and records of
Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a
customer only account in the Securities System and by appropriate
entry on the books and records of Repo Custodian identifying such
Securities as belonging to the Participating Funds; provided, further,
that Repo Custodian shall confirm to the Participating Funds the
identity of the Securities transferred or delivered. Acceptance of a
"due bill", "trust receipt" or similar receipt or notification of
segregation issued by a third party with respect to Securities held by
such third party shall not constitute good delivery of Securities to
Repo Custodian for purposes of this Agreement or the Master Agreement
and shall expressly violate the terms of this Agreement and the Master
Agreement. The Funds shall identify by notice to Repo Custodian and
Seller those agencies or systems which have been approved by the Funds
for use under this Agreement and the Master Agreement. The Funds
hereby notify Repo Custodian and Seller that the following agencies
and systems have been approved by the Funds for use under this
Agreement and the Master Agreement, until such time as Repo Custodian
and Seller shall have been notified by the Funds to the contrary: (i)
Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the
Transaction Account and effect the transfer of Securities to or from
the Participating Funds upon proper instructions received from the
Participating Funds, or the Custodian on behalf of the Participating
Funds, and shall make all credits and debits to the Seller Account and
effect the transfer of Securities to or from the Seller upon proper
instructions received from Seller. In the event that Repo Custodian
receives conflicting proper instructions from Seller and the
Participating Funds, or the Custodian on behalf of the Participating
Funds, Repo Custodian shall follow the Participating Funds' or the
Custodian's proper instructions. The Participating Funds shall give
Repo Custodian only such instructions as shall be permitted by the
Master Agreement. Notwithstanding the preceding sentence, the
Participating Funds, or the Custodian on behalf of the Participating
Funds, may from time to time instruct Repo Custodian to transfer cash
from the Transaction Account to Custodian.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree
to enter into a repurchase transaction, Seller and the Participating
Funds, or the Custodian on behalf of the Participating Funds, will
give Repo Custodian proper instructions by telephone or otherwise on
the Sale Date, specifying the Transaction Category, Repurchase Date,
Sale Price, Repurchase Price or the applicable Pricing Rate and the
Margin Percentage for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase
Date is the Banking Day next following the Sale Date (x) the
Participating Funds may increase or decrease the Sale Price for any
such repurchase transaction by no more than 10% of the initial Sale
Price by causing to be delivered further proper instructions by
telephone or otherwise to Repo Custodian prior to the close of
business on the Sale Date and (y) Seller and the Participating Funds
may by mutual consent agree to increase or decrease the Sale Price by
more than 10% of the initial Sale Price by causing to be provided
further proper instructions to Repo Custodian by the close of business
on the Sale Date. In any event, Repo Custodian shall not be
responsible for determining whether any such increase or decrease of
the Sale Price exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on
the Sale Date the aggregate Market Value of all Securities held by
Repo Custodian for Seller and cash in the Seller Account equals or
exceeds the Margin Percentage of the Sale Price. Seller shall give
Repo Custodian proper instructions specifying with respect to each of
the Securities which is to be the subject of a repurchase transaction
(a) the name of the issuer and the title of the Securities, and (b)
the Market Value of such Securities. Such instructions shall
constitute Seller's instructions to Repo Custodian to transfer the
Securities to the Participating Funds and/or Cash Collateral from the
Seller Account to the Transaction Account.
(d) Prior to the close of business on the Sale Date, the
Participating Funds shall transfer to, or maintain on deposit with,
Repo Custodian in the Transaction Account immediately available funds
in an amount equal to the Sale Price with respect to a particular
repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian
shall transfer Securities from Seller to the Participating Funds
and/or cash held in the Seller Account to the Transaction Account and
shall transfer to the Seller Account immediately available funds from
the Transaction Account in accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred by Seller to the Participating Funds are Eligible
Securities. Any securities which are not Eligible Securities for a
particular repurchase transaction hereunder shall not be included in
the calculations set forth below and shall not be transferred to the
Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the
aggregate Market Value of Securities and cash, if any, applicable to
the repurchase transaction is less than the Margin Percentage of the
Sale Price and Seller shall transfer, by the close of business on the
Sale Date, to Repo Custodian additional Securities and/or cash in the
amount of such deficiency. If Seller does not, by the close of
business on the Sale Date, transfer additional Securities and/or cash,
the Market Value of which equals or exceeds such deficiency, Repo
Custodian may, at its option, without notice to Seller, advance the
amount of such deficiency to Seller in order to effectuate the
repurchase transaction. It is expressly agreed that Repo Custodian is
not obligated to make an advance to Seller to enable it to complete
any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo
Custodian shall cause the Securities applicable to the repurchase
transaction received from Seller to be transferred to the
Participating Funds and shall cause any cash received from Seller to
be transferred to the Transaction Account, against transfer of the
Sale Price from the Transaction Account to the Seller Account, such
transfers of Securities and/or cash and funds to occur simultaneously
on a delivery versus payment basis.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the
Transaction Account is less than the agreed upon Sale Price in
connection with the repurchase transaction immediately prior to
effectuating such repurchase transaction, or if the aggregate Market
Value of the Securities and cash, if any, applicable to such
repurchase transaction is less than the Sale Price multiplied by the
Margin Percentage immediately prior to effectuating such repurchase
transaction, Repo Custodian shall effect the repurchase transaction to
the best of its ability by transferring Securities from Seller to the
Participating Funds and/or cash from the Seller Account to the
Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction
Account multiplied by the Margin Percentage and (y) the aggregate
Market Value of the Securities available for transfer from Seller to
the Participating Funds and cash, if any, in the Seller Account,
against the transfer of immediately available funds from the
Transaction Account to the Seller Account in an amount equal to the
aggregate Market Value of the Securities and/or cash to be transferred
divided by the Margin Percentage; provided, however, that in either
such event Repo Custodian shall have the right not to transfer to the
Participating Funds such Securities and not to transfer such cash, if
any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian
determines, in its sole discretion, will not be the subject of a
repurchase transaction. The actions of Repo Custodian pursuant to
this subparagraph (e)(v) shall not affect the obligations and
liabilities of the parties to each other pursuant to the Master
Agreement with regard to such repurchase transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the
Master Agreement), Repo Custodian shall perform such substitution in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred to the Participating Funds are Eligible Securities. Any
securities which are not eligible for repurchase transactions
hereunder shall not be included in the calculations set forth below
and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Eligible Securities and/or Cash Collateral to be transferred.
Repo Custodian shall not make any substitution if, at the time of
substitution, the aggregate Market Value of all Securities and any
Cash Collateral applicable to such repurchase transaction immediately
after such substitution would be less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were the
date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted
against the delivery by Repo Custodian of substitute Eligible
Securities to the Participating Funds and/or the crediting of the
Transaction Account with Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute
Eligible Securities, and has failed to deliver Eligible Securities
against such Cash Collateral not later than the close of business on
such Banking Day in accordance with the terms of the Master Agreement,
Repo Custodian shall promptly, but in no event later than 10:00 a.m.
the following Banking Day, notify the Participating Funds and Seller
of such failure.
(g) With respect to each repurchase transaction, at 10:00 a.m. New
York time, or at such other time as specified in proper instructions
of the Participating Funds (or the Custodian on behalf of the
Participating Funds) on the Repurchase Date, Repo Custodian shall
debit the Seller Account and credit the Transaction Account in the
amount of the Repurchase Price and shall transfer Securities from the
Participating Funds to the Seller and Cash Collateral, if any, from
the Transaction Account to the Seller Account in accordance with the
following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller
Account and credit the Transaction Account in the amount of the
Repurchase Price and shall transfer all Securities applicable to such
repurchase transaction from the Participating Funds to the Seller and
debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(ii) If the amount of available funds in the Seller Account is less
than the Repurchase Price, then Repo Custodian shall notify the Seller
of the amount of the deficiency and Seller shall promptly cause such
amount to be transferred to the Seller Account. If Seller fails to
cause the transfer of the entire amount of the deficiency to the
Seller Account, then Repo Custodian may, at its option and without
notice to Seller, advance to Seller the amount of such remaining
deficiency. It is expressly agreed that Repo Custodian is not
obligated to make any advance to Seller. If, following such transfer
and/or advance, the amount of available funds in the Seller Account
equals or exceeds the Repurchase Price then Repo Custodian shall debit
the Seller Account and credit the Transaction Account in the amount of
the Repurchase Price and shall transfer from the Participating Funds
to the Seller all Securities applicable to such repurchase transaction
and debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(iii) If the Seller fails to cause the transfer of the entire amount
of the deficiency, as required by (ii) above, and Repo Custodian fails
to advance to Seller an amount sufficient to eliminate the entire
deficiency, then Repo Custodian shall debit the Seller Account in the
amount of all immediately available funds designated by Seller as
applicable to the repurchase transaction and credit the Transaction
Account in such amount (such amount being referred to as the "Partial
Payment") and shall transfer Securities from the Participating Funds
to the Seller such that the aggregate Market Value of all remaining
Securities and Cash Collateral in the Transaction Account with respect
to such repurchase transaction shall at least equal the difference
between Margin Percentage of the Repurchase Price and the Partial
Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums
paid by or on behalf of the issuer in respect of the Securities and
collected by Repo Custodian, except as otherwise provided in Paragraph
8 of the Master Agreement.
6. Daily Statement. On each Banking Day on which any Participating
Funds have an outstanding repurchase transaction, Repo Custodian shall
deliver by facsimile to Custodian and to the Participating Funds a
statement identifying the Securities held by Repo Custodian with
respect to such repurchase transaction and the cash and Cash
Collateral, if any, held by Repo Custodian in the Transaction Account,
including a statement of the then current Market Value of such
Securities and the amounts, if any, credited to the Transaction
Account as of the close of trading on the previous Banking Day. Repo
Custodian shall also deliver to Custodian and the Participating Funds
such additional statements as the Participating Funds may reasonably
request.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and
the amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the
Seller Account against the receipt from Seller of the Securities and
Cash Collateral, if any, and (ii) on each Banking Day on which such
repurchase transaction is outstanding. If on any Banking Day the
aggregate Market Value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day) for such transaction, Repo Custodian shall
promptly, but in any case no later than 10:00 a.m. the following
Banking Day, notify Seller. If on any Banking Day the aggregate
market value of the Securities and Cash Collateral with respect to any
repurchase transaction is less than the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) for such transaction, and Seller fails to deliver
additional Eligible Securities applicable to such repurchase
transaction or an additional amount of Cash Collateral by the close of
business on such Banking Day such that the aggregate market value of
the Securities and Cash Collateral at least equals the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day), Repo Custodian shall promptly, but in any
event no later than 10:00 a.m. the following Banking Day, notify the
Participating Funds of such failure. For purposes of determining
Seller's margin maintenance requirements on the Sale Date for
repurchase transactions in which the Repurchase Date is the Banking
Day immediately following the Sale Date, such aggregate market value
shall equal at least the Margin Percentage of the Sale Price.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing
services ("Pricing Services") set forth on Schedule B. It is
understood and agreed that Repo Custodian shall use the prices made
available by the Pricing Services on the Banking Day of such
determination unless Seller and the Participating Funds mutually agree
that some other prices shall be used and so notify Repo Custodian by
proper instructions of the sum of the prices of all such Securities
priced in such different manner. In the event that Repo Custodian is
unable to obtain a valuation of any Securities from the Pricing
Services, Repo Custodian shall request a bid quotation from a broker's
broker or a broker dealer, set forth in Schedule B, other than Seller.
In the event Repo Custodian is unable to obtain a bid quotation for
any Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities
and any Cash Collateral equals at least the Margin Percentage of the
Repurchase Price and (ii) shall redeliver such Securities to Seller if
the Market Value of all other Securities and any Cash Collateral with
respect to such repurchase transaction equals at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day). The Repo Custodian may rely on prices
quoted by Pricing Services, broker's brokers or broker dealers, except
Seller, as set forth in Schedule B.
(c) (i) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction, Repo Custodian shall
deliver to the Participating Funds an amount of additional Eligible
Securities applicable to such repurchase transaction and/or debit the
Seller Account and credit the Transaction Account with an additional
amount of Cash Collateral, such that the aggregate Market Value of all
Securities and any Cash Collateral with respect to such repurchase
transaction shall equal at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) applicable to such repurchase transaction; except that,
for purposes of determining Seller's margin maintenance requirements
on the Sale Date for repurchase transactions in which the Repurchase
Date is the Banking Day immediately following the Sale Date, such
aggregate market value shall equal at least the Margin Percentage of
the Sale Price.
(ii) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction exceeds the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction, Repo Custodian shall return
to the Seller all or a portion of such Securities or Cash Collateral,
if any; provided that the Market Value of the remaining Securities and
any Cash Collateral with respect to the repurchase transaction shall
be at least equal to the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction. At any time and from time
to time with respect to any repurchase transaction, if authorized by
the Participating Funds, or the Custodian on behalf of the
Participating Funds, the Repo Custodian shall debit the Transaction
Account by an amount of Cash Collateral and credit the Seller Account
by the same amount of Cash Collateral against simultaneous delivery
from Seller to the Participating Funds of Eligible Securities
applicable to such repurchase transaction with a Market Value at least
equal to the amount of Cash Collateral credited and debited.
8. Authorized Persons. Schedule C hereto sets forth those persons
who are authorized to act for Repo Custodian, Custodian, Seller and
the Funds, respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested
telex, facsimile, a written request, direction, instruction or
certification signed or initialed by or on behalf of the party giving
the instructions by one or more authorized persons (as provided in
Paragraph 8); provided, however, that no instructions directing the
delivery of Securities or the payment of funds to any individual who
is an authorized signatory of Custodian or Repo Custodian shall be
signed by that individual. Telephonic, other oral or
electro-mechanical or electronic instructions (including the code
which may be assigned by Repo Custodian to Custodian from time to
time) given by one of the above authorized persons shall also be
considered proper instructions if the party receiving such
instructions reasonably believes them to have been given by an
authorized person with respect to the transaction involved. Oral
instructions will be confirmed by tested telex, facsimile or in
writing in the manner set forth above. The Funds authorize Repo
Custodian to tape record any and all telephonic or other oral
instructions given to Repo Custodian. Proper instructions may relate
to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to exercise reasonable care and
diligence in carrying out the provisions of this Agreement and the
Master Agreement and shall be liable to each of the Funds and Seller
for any expenses or damages to the Funds or Seller for breach of Repo
Custodian's standard of care in this Agreement, as further provided in
this Paragraph. Repo Custodian assumes responsibility for loss to any
property held by it pursuant to the provisions of this Agreement which
is occasioned by the negligence of, or conversion, misappropriation or
theft by, Repo Custodian's officers, employees and agents. Repo
Custodian, at its option, may insure itself against loss from any
cause but shall be under no obligation to obtain insurance directly
for the benefit of the Funds. So long as and to the extent that Repo
Custodian exercises reasonable care and diligence and acts without
negligence, misfeasance or misconduct, Repo Custodian shall not be
liable to Seller or the Funds for (i) any action taken or omitted in
good faith in reliance upon proper instructions, (ii) any action taken
or omitted in good faith upon any notice, request, certificate or
other instrument reasonably believed by it to be genuine and to be
signed by the proper party or parties, (iii) any delay or failure to
act as may be required under this Agreement or under the Master
Agreement when such delay or failure is due to any act of God or war,
(iv) the actions or omissions of a Securities System, (v) the title,
validity or genuineness of any security received, delivered or held by
it pursuant to this Agreement or the Master Agreement, (vi) the
legality of the purchase or sale of any Securities by or to the
Participating Funds or Seller or the propriety of the amount for which
the same are purchased or sold (except to the extent of Repo
Custodian's obligations hereunder to determine whether securities are
Eligible Securities and to calculate the Market Value of Securities
and any Cash Collateral), (vii) the due authority of any person listed
on Schedule C to act on behalf of Custodian, Seller or the Funds, as
the case may be, with respect to this Agreement or (viii) the errors
of the Pricing Services, broker's brokers or broker dealers set forth
in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any
money to be used in a repurchase transaction, whether or not such
money is represented by any check, draft, or other instrument for the
payment of money, until the Eligible Securities have been delivered in
accordance with Paragraph 3 or until Repo Custodian actually receives
and collects such money on behalf of Seller or the Funds directly or
by the final crediting of the Seller Account or a Transaction Account
through the Securities System, except that this Paragraph 10(b) shall
not be deemed to limit the liability of Repo Custodian to Seller or
the Funds if the non-delivery of such Eligible Securities or the
failure to receive and collect such money results from the breach by
Repo Custodian of its obligations under this Agreement or the Master
Agreement.
(c) Repo Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by
it are such as properly may be held by the Participating Funds;
provided that notwithstanding anything to the contrary herein, Repo
Custodian shall be obligated to act in accordance with the guidelines
and proper instructions of the Participating Funds, or the Custodian
on behalf of the Participating Funds, with respect to the types of
Eligible Securities and the issuers of such Eligible Securities that
may be used in specific repurchase transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the
Custodian if Securities held by Repo Custodian are in default or if
payment on any Securities has been refused after due demand and
presentation and Repo Custodian shall take action to effect collection
of any such amounts upon the proper instructions of the Participating
Funds, or the Custodian on behalf of the Participating Funds, and
assurances satisfactory to it that it will be reimbursed for its costs
and expenses in connection with any such action.
(e) Repo Custodian shall have no duties, other than such duties as
are necessary to effectuate repurchase transactions in accordance with
this Agreement and the Master Agreement within the standard of care
set forth in Paragraph 10(a) above and in a commercially reasonable
manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly
authorized to execute and deliver this Agreement and to perform its
obligations hereunder and has taken all necessary action to authorize
such execution, delivery and performance, (ii) the execution, delivery
and performance of this Agreement do not and will not violate any
ordinance, declaration of trust, partnership agreement, articles of
incorporation, charter, rule or statute applicable to it or any
agreement by which it is bound or by which any of its assets are
affected, (iii) the person executing this Agreement on its behalf is
duly and properly authorized to do so, (iv) it has (and will maintain)
a copy of this Agreement and evidence of its authorization in its
official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President
or higher.
(b) Repo Custodian further represents and warrants that (i) it has
not pledged, encumbered, hypothecated, transferred, disposed of, or
otherwise granted, any third party an interest in any Securities, (ii)
it does not have any security interest, lien or right of setoff in the
Securities, and (iii) it has not been notified by any third party, in
its capacity as Repo Custodian, custodian bank or clearing bank, of
the existence of any lien, claim, charge or encumbrance with respect
to any Securities that are the subject of such repurchase transaction.
Repo Custodian agrees that (i) it will not pledge, encumber,
hypothecate, transfer, dispose of, or otherwise grant, any third party
an interest in any Securities, (ii) it will not acquire any security
interest, lien or right of setoff in the Securities, and (iii) it will
promptly notify the Fund Agent, if, during the term of any outstanding
repurchase transaction, it is notified by any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim,
charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent
that Repo Custodian is in the exercise of reasonable care and
diligence and acts without negligence, misfeasance or misconduct,
Seller will indemnify Repo Custodian and hold it harmless against any
and all losses, claims, damages, liabilities or actions to which it
may become subject, and reimburse it for any expenses (including
attorneys' fees and expenses) incurred by it in connection therewith,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon or in any way related to this Agreement, the
Master Agreement or those arrangements. Without limiting the
generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in
misfeasance or misconduct.
(b) So long as and to the extent that Repo Custodian is in the
exercise of reasonable care and diligence and acts without negligence,
misconduct or misfeasance, the Participating Funds will indemnify Repo
Custodian and hold it harmless against any and all losses, claims,
damages, liabilities or actions to which it may become subject, and
reimburse it for any expenses (including attorneys' fees and expenses)
incurred by it in connection therewith, insofar as such losses,
claims, damages, liabilities or actions result from the negligence,
misconduct or misfeasance of the Participating Funds under this
Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional
rights and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement
shall be binding unless in writing and executed by the parties hereto.
Schedule A, listing the Funds, may be amended from time to time to add
or delete Funds by the Funds (i) delivering an executed copy of an
addendum to Schedule A to Seller and Repo Custodian, and (ii)
amending Schedule A to the Master Agreement in accordance with the
provisions therein. The amendment of Schedule A as provided above
shall constitute appointment of Repo Custodian as a custodian for such
Fund. Schedule B may be amended from time to time by an instrument in
writing, or counterpart thereof, executed by Repo Custodian, Seller
and the Funds. Schedule C may be amended from time to time to change
an authorized person of: (i) the Funds, by written notice to Repo
Custodian and Seller by Ms. Sarah Zenoble or the Treasurer of the
Funds (or such persons who may be authorized from time to time in
writing by Ms. Zenoble or the President or Treasurer of Fidelity
Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any
Vice President of Repo Custodian; and (iv) Custodian, by written
notice to Repo Custodian by any Vice President of Custodian. Schedule
D may be amended from time to time by any party hereto by delivery of
written notice to the other parties hereto. Repo Custodian shall
receive notice of any amendment to the Master Agreement at the address
set forth in Schedule D hereto; and, if such amendment would have a
material adverse effect on the rights of, or would materially increase
the obligations of Repo Custodian under this Agreement, any such
amendment shall also require the consent of Repo Custodian. Any such
amendment shall be deemed not to be material if Repo Custodian fails
to object in writing within 21 days after receipt of notice thereof.
No amendment to this Agreement shall affect the rights or obligations
of any Fund with respect to any outstanding repurchase transaction
entered into under this Agreement and the Master Agreement prior to
such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict
between this Agreement and the Master Agreement, the Master Agreement
shall control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Banking Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations
under this Agreement or the Master Agreement with respect to any
actions or omissions of any party hereto prior to termination. In the
event of termination, Repo Custodian will deliver any Securities, Cash
Collateral or cash held by it or any agent to Custodian or to such
successor custodian or custodian or subcustodian as the Participating
Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation
for the services to be rendered hereunder, based upon rates which
shall be agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian
and the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and
except as otherwise provided herein or as the parties to the Agreement
shall from time to time otherwise agree, all instructions, notices,
reports and other communications contemplated by this Agreement shall
be given to the party entitled to receive such notice at the telephone
number and address listed on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions
hereof shall not be affected thereby and shall remain in full force
and effect.
19. Binding Nature. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their successors and
assignees; provided that, no party hereto may assign this Agreement or
any of the rights or obligations hereunder without the prior written
consent of the other parties.
20. Headings. Section headings are for reference purposes only and
shall not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Seller is hereby expressly put on
notice that the Declarations of Trust or the Certificates and
Agreements of Limited Partnership, as the case may be, of each
Participating Fund contain a limitation of liability provision
pursuant to which the obligations assumed by such Participating Fund
hereunder shall be limited in all cases to such Participating Fund and
its assets or, in the case of a series Fund, to the assets of that
series only, and neither Seller nor its respective agents or assigns
shall seek satisfaction of any such obligation from the officers,
employees, agents, directors, trustees, shareholders or partners of
any such Participating Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations
set forth in this Agreement with respect to each repurchase
transaction shall accrue only to the Participating Funds in accordance
with their respective interests therein. No other Fund shall receive
any rights or have any liabilities arising from any action or inaction
of any Participating Fund under this Agreement with respect to such
repurchase transaction.
25. General Provisions. This Agreement supersedes any other
custodian agreement by and among Seller, the Funds, and Repo Custodian
concerning repurchase transactions effected through the Joint Trading
Account. It is understood and agreed that time is of the essence with
respect to the performance of each party's respective obligations
hereunder.
26. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) In the case of transactions in which one of the parties is a
broker or dealer registered with the SEC under Section 15 of the
Exchange Act, the Securities Investor Protection Corporation has taken
the position that the provisions of the Securities Investor Protection
Act of 1970 (the "SIPA") do not protect the other party with respect
to any transaction hereunder; and
(b) In the case of transactions in which one of the parties is a
government securities broker or a government securities dealer
registered with the SEC under Section 15C of the Exchange Act, SIPA
will not provide protection to the other party with respect to any
transaction hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day of the date of determination
or the last quote available. The pricing services, Brokers' Brokers
and Broker Dealers may be changed from time to time by agreement of
all the parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Ken Rindos
Kurt Woetzel
Custodian
Ken Rindos
Kurt Woetzel
Seller
Joseph P. Blauvelt
Michael B. Boyer
Robert E. Curry
Patrick Doyle
Frank Forgione
Edward J. Frederick
Christopher Juliano
Joseph Marrone
Thomas T. McGee
John S. Mehrtens
John A. Michielini
Allen Smith, II
The Funds
Barron, Leland C. Harlow, Katharyn M. Stehman, Burnell R.
Carbone, John M. Henning, Frederick L. Jr. Todd, Deborah
Curtis, Fritz Huyck, Timothy Todd, John J.
Duby, Robert K. Jamen, Jon Torres, Joseph E.
Egan, Dorothy T. Litterst, Robert Williams, Richard
Glocke, David Silver, Samuel Zenoble, Sarah
SCHEDULE D
NOTICES
If to Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (212) 635-7947
Attention: Sherman Yu, Esq.
With a copy to the Fund Agent
If to Repo Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, New York 10286
Telephone: (212) 635-4809
Attention: Ms. Kristin Smith
If to Seller: J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Telephone: (212) 483-2323
Attention: Middle Office Traders Support
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277282.c1
Exhibit 8(m)
FORM OF
SCHEDULE 1
The following lists the additional counterparties to the Repo
Custodian Agreement for Joint Trading Account between The Bank of New
York and the Fidelity Funds:
BZW Government Securities, Inc.
CS First Boston Corp.
Daiwa Securities America, Inc.
Deutsche Bank Securities Corp.
Donaldson, Lufkin & Jenerette Securities Corp.
Fuji Securities, Inc.
Goldman Sachs & Co
Morgan Stanley & Co., Inc.
NationsBanc Capital Markets
Nikko Securities Co. International, Inc.
Nomura Securities International, Inc.
Prudential Securities, Inc.
Salomon Brothers, Inc.
Sanwa BJK Securities Co., LP
SBC Capital Markets, Inc.
Smith Barney, Inc.
Exhibit 8(n)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of ________, among CHEMICAL BANK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), GREENWICH CAPITAL MARKETS, INC. ("Seller") and each of
the entities listed on Schedule A-1, A-2, A-3 and A-4 hereto acting on
behalf of itself or (i) in the case of a series company, on behalf of
one or more of its portfolios or series listed on Schedule A-1 or A-2
hereto, (ii) in the case of the accounts listed on Schedule A-3
hereto, acting through Fidelity Management & Research Company, and
(iii) in the case of the commingled or individual accounts listed on
Schedule A-4 hereto, acting through Fidelity Management Trust Company
(collectively, the "Funds" and each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase
agreement dated as of _____________, (the "Master Agreement") with
Seller pursuant to which from time to time one or more of the Funds,
as buyers, and Seller, as seller, may enter into repurchase
transactions effected through one or more joint trading accounts
(collectively, the "Joint Trading Account") established and
administered by one or more custodians of the Funds identified on
Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from
Eligible Securities (as hereinafter defined) held by Repo Custodian ,
subject to an agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities
account (the "Seller Account") for Seller for the purpose of, among
other things, effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the
custodian for each of the Funds in connection with the repurchase
transactions effected hereunder, and that the Repo Custodian hold
cash, Cash Collateral (as hereinafter defined) and Securities for each
of the Funds for the purpose of effecting repurchase transactions
hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller
Custodian, Repo Custodian, and the Federal Reserve Banks where the
Custodian and the Repo Custodian are located, are each open for
business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S.
Dollars, credited by Repo Custodian to a Transaction Account pursuant
to Paragraphs 3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(d) "Eligible Securities" shall mean those securities which are
identified as permissible securities for a particular Transaction
Category.
(e) "FICASH I Transaction" and "FICASH III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day
next following the Sale Date and for which securities issued by the
government of the United States of America that are direct obligations
of the government of the United States of America shall constitute
Eligible Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United
States of America that are direct obligations of the government of the
United States of America, or (y) securities issued by or guaranteed as
to principal and interest by the government of the United States of
America, or by its agencies and/or instrumentalities, including, but
not limited to, the Federal Home Loan Bank, Federal Home Loan Mortgage
Corp., Government National Mortgage Association, Federal National
Mortgage Association, Federal Farm Credit Bank, Federal Intermediate
Credit Bank, Banks for Cooperatives, and Federal Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date, or if applicable, the date
fixed upon exercise of an Unconditional Resale Right (as hereinafter
defined) by the Participating Funds and for which securities issued by
the government of the United States of America that are direct
obligations of the government of the United States of America shall
constitute Eligible Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is a date fixed by agreement between Seller
and the Participating Funds which is not the Banking Day next
following the Sale Date, or, if applicable, the date fixed upon
exercise of an Unconditional Resale Right (as hereinafter defined) by
the Participating Funds and for which one or more of the following two
categories of securities, as specified by the Funds, shall constitute
Eligible Securities: (x) securities issued by the government of the
United States of America that are direct obligations of the government
of the United States of America, or (y) securities issued by or
guaranteed as to principal and interest by the government of the
United States of America, or by its agencies and/or instrumentalities,
including, but not limited to, the Federal Home Loan Bank, Federal
Home Loan Mortgage Corp., Government National Mortgage Association,
Federal National Mortgage Association, Federal Farm Credit Bank,
Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction
shall be 102% or such other percentage as is agreed to by Seller and
the Participating Funds (except that in no event shall the Margin
Percentage be less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of
the Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the
preamble of this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph
3(c) of this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section
4(g) of this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to
a particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to
by Seller and the Participating Funds for a particular repurchase
transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph
7 of this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble
of this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to
repurchase Securities and Cash Collateral, if any, from the
Participating Funds and the Participating Funds are to resell the
Securities and Cash Collateral, if any, including any date determined
by application of the provisions of Paragraphs 7(a) and 15 of the
Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the
Sale Price, plus an incremental amount determined by applying the
Pricing Rate to the Sale Price, calculated on the basis of a 360-day
year and the number of actual days elapsed from (and including) the
Sale Date to (but excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and
Cash Collateral, if any, are to be sold to the Participating Funds by
Seller pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the
Participating Funds and Seller at which the Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by
Seller.
(y) "Securities" shall mean all Eligible Securities delivered by
Seller or to be delivered by Seller to the Participating Funds
pursuant to a particular repurchase transaction and not yet
repurchased hereunder, together with all rights related thereto and
all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph
3(c) of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to
this Agreement.
(bb) "Seller Account" shall have the meaning set forth in the
preamble of this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of
repurchase transaction effected hereunder, as determined with
reference to the term of the transaction and the categories of
Securities that constitute Eligible Securities therefor, which term
shall include FICASH I Transactions, FICASH II Transactions, FICASH
III Transactions, FITERM I Transactions, FITERM II Transactions,
FITERM III Transactions, and such other transaction categories as may
from time to time be designated by the Funds by notice to Seller,
Custodian and Repo Custodian.
(ee) "Unconditional Resale Right" shall have the meaning set forth
in Paragraph 7(b) of the Master Agreement.
(ff) "Valuation Day" shall mean any day on which Repo Custodian is
open for business.
2. Appointment of Repo Custodian. Upon the terms and conditions set
forth in this Agreement, Repo Custodian is hereby appointed by the
Funds to act as the custodian for the Participating Funds to hold
cash, Cash Collateral and Securities for the purpose of effecting
repurchase transactions for the Participating Funds through the Joint
Trading Account pursuant to the Master Agreement. Repo Custodian
hereby acknowledges the terms of the Master Agreement between the
Funds and Seller (attached as an Exhibit hereto), as amended from time
to time, and agrees to abide by the provisions thereof to the extent
such provisions relate to the responsibilities and operations of Repo
Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more
Transaction Accounts for the purpose of effecting repurchase
transactions hereunder for the Funds, in each case pursuant to the
Master Agreement. From time to time the Funds may cause Custodian, on
behalf of the Funds, to deposit Securities and cash with Repo
Custodian in the designated Transaction Account, in each case in
accordance with Paragraph 3 of the Master Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash
Collateral received for the Participating Funds segregated at all
times from those of any other person, firm or corporation in its
possession and shall identify all such Securities, cash and Cash
Collateral as subject to this Agreement and the Master Agreement.
Segregation may be accomplished by physical segregation with respect
to certificated securities held by the Repo Custodian and, in
addition, by appropriate identification on the books and records of
Repo Custodian in the case of all other Securities, cash and Cash
Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating
Funds, and shall be subject at all times to the proper instructions of
the Participating Funds, or the Custodian on behalf of the
Participating Funds, with respect to the holding, transfer or
disposition of such Securities and Cash Collateral. Repo Custodian
shall include in its records for each Transaction Account all
instructions received by it which evidence an interest of the
Participating Funds in the Securities and Cash Collateral and shall
hold physically segregated any written agreement, receipt or other
writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash
Collateral to the Participating Funds or to "credit" a Transaction
Account under this or any other paragraph of this Agreement shall be
made in immediately available funds. If Repo Custodian is required to
"deliver" or "transfer" Securities to the Participating Funds under
this or any other paragraph of this Agreement, Repo Custodian shall
take, or cause to be taken, the following actions to perfect the
Participating Funds' interest in such Securities as an outright
purchaser: (i) in the case of certificated securities and instruments
held by Seller, by physical delivery of the share certificates or
other instruments representing the Securities and by physical
segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities
are being held for the Participating Funds (such securities and
instruments to be delivered in form suitable for transfer or
accompanied by duly executed instruments of transfer or assignment in
blank and accompanied by such other documentation as the Participating
Funds may request), (ii) in the case of Securities held in a customer
only account in a clearing agency or federal book-entry system
authorized for use by the Funds and meeting the requirements of Rule
17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act") (such authorized agency or system being referred to herein as a
"Securities System"), by appropriate entry on the books and records of
Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a
customer only account in the Securities System and by appropriate
entry on the books and records of Repo Custodian identifying such
Securities as belonging to the Participating Funds; provided, further,
that Repo Custodian shall confirm to the Participating Funds the
identity of the Securities transferred or delivered. Acceptance of a
"due bill", "trust receipt" or similar receipt or notification of
segregation issued by a third party with respect to Securities held by
such third party shall not constitute good delivery of Securities to
Repo Custodian for purposes of this Agreement or the Master Agreement
and shall expressly violate the terms of this Agreement and the Master
Agreement. The Funds shall identify by notice to Repo Custodian and
Seller those agencies or systems which have been approved by the Funds
for use under this Agreement and the Master Agreement. The Funds
hereby notify Repo Custodian and Seller that the following agencies
and systems have been approved by the Funds for use under this
Agreement and the Master Agreement, until such time as Repo Custodian
and Seller shall have been notified by the Funds to the contrary: (i)
Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the
Transaction Account and effect the transfer of Securities to or from
the Participating Funds upon proper instructions received from the
Participating Funds, or the Custodian on behalf of the Participating
Funds, and shall make all credits and debits to the Seller Account and
effect the transfer of Securities to or from the Seller upon proper
instructions received from Seller. In the event that Repo Custodian
receives conflicting proper instructions from Seller and the
Participating Funds, or the Custodian on behalf of the Participating
Funds, Repo Custodian shall follow the Participating Funds' or the
Custodian's proper instructions. The Participating Funds shall give
Repo Custodian only such instructions as shall be permitted by the
Master Agreement. Notwithstanding the preceding sentence, the
Participating Funds, or the Custodian on behalf of the Participating
Funds, may from time to time instruct Repo Custodian to transfer cash
from the Transaction Account to Custodian so long as such transfer is
not in contravention of the Master Agreement.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree
to enter into a repurchase transaction, Seller and the Participating
Funds, or the Custodian on behalf of the Participating Funds, will
give Repo Custodian proper instructions by telephone or otherwise by
5:00 p.m. New York time on the Sale Date, specifying the Transaction
Category, Repurchase Date, Sale Price, Repurchase Price or the
applicable Pricing Rate and the Margin Percentage for each such
repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase
Date is the Banking Day next following the Sale Date (x) the
Participating Funds may increase or decrease the Sale Price for any
such repurchase transaction by no more than 10% of the initial Sale
Price by causing to be delivered further proper instructions by
telephone or otherwise to Repo Custodian by 5:15 p.m. New York time
(or at such later time as may be agreed upon by the parties) on the
Sale Date and (y) Seller and the Participating Funds may by mutual
consent agree to increase or decrease the Sale Price by more than 10%
of the initial Sale Price by causing to be provided further proper
instructions to Repo Custodian by the close of business on the Sale
Date. In any event, Repo Custodian shall not be responsible for
determining whether any such increase or decrease of the Sale Price
exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on
the Sale Date the aggregate Market Value of all Securities held by
Repo Custodian for Seller and cash in the Seller Account equals or
exceeds the Margin Percentage of the Sale Price. Seller shall give
Repo Custodian proper instructions specifying with respect to each of
the Securities which is to be the subject of a repurchase transaction
(a) the name of the issuer and the title of the Securities, and (b)
the Market Value of such Securities. Such instructions shall
constitute Seller's instructions to Repo Custodian to transfer the
Securities to the Participating Funds and/or Cash Collateral from the
Seller Account to the Transaction Account.
(d) By 5:00 p.m. New York Time on the Sale Date, the Participating
Funds shall transfer to, or maintain on deposit with, Repo Custodian
in the Transaction Account immediately available funds in an amount
equal to the Sale Price with respect to a particular repurchase
transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian
shall transfer Securities from Seller to the Participating Funds
and/or cash held in the Seller Account to the Transaction Account and
shall transfer to the Seller Account immediately available funds from
the Transaction Account in accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred by Seller to the Participating Funds are Eligible
Securities. Any securities which are not Eligible Securities for a
particular repurchase transaction hereunder shall not be included in
the calculations set forth below and shall not be transferred to the
Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the
aggregate Market Value of Securities and cash, if any, applicable to
the repurchase transaction is less than the Margin Percentage of the
Sale Price and Seller shall transfer, by the close of business on the
Sale Date, to Repo Custodian additional Securities and/or cash in the
amount of such deficiency. If Seller does not, by the close of
business on the Sale Date, transfer additional Securities and/or cash,
the Market Value of which equals or exceeds such deficiency, Repo
Custodian may, at its option, without notice to Seller, advance the
amount of such deficiency to Seller in order to effectuate the
repurchase transaction. It is expressly agreed that Repo Custodian is
not obligated to make an advance to Seller to enable it to complete
any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo
Custodian shall cause the Securities applicable to the repurchase
transaction received from Seller to be transferred to the
Participating Funds and shall cause any cash received from Seller to
be transferred to the Transaction Account, against transfer of the
Sale Price from the Transaction Account to the Seller Account, such
transfers of Securities and/or cash and funds to be deemed to occur
simultaneously.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the
Transaction Account is less than the agreed upon Sale Price in
connection with the repurchase transaction immediately prior to
effectuating such repurchase transaction, or if the aggregate Market
Value of the Securities and cash, if any, applicable to such
repurchase transaction is less than the Sale Price multiplied by the
Margin Percentage immediately prior to effectuating such repurchase
transaction, Repo Custodian shall effect the repurchase transaction to
the best of its ability by transferring Securities from Seller to the
Participating Funds and/or cash from the Seller Account to the
Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction
Account multiplied by the Margin Percentage and (y) the aggregate
Market Value of the Securities available for transfer from Seller to
the Participating Funds and cash, if any, in the Seller Account,
against the transfer of immediately available funds from the
Transaction Account to the Seller Account in an amount equal to the
aggregate Market Value of the Securities and/or cash to be transferred
divided by the Margin Percentage; provided, however, that in either
such event Repo Custodian shall have the right not to transfer to the
Participating Funds such Securities and not to transfer such cash, if
any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian
determines, in its sole discretion, will not be the subject of a
repurchase transaction. The actions of Repo Custodian pursuant to
this subparagraph (e)(v) shall not affect the obligations and
liabilities of the parties to each other pursuant to the Master
Agreement with regard to such repurchase transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the
Master Agreement), Repo Custodian shall perform such substitution in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred to the Participating Funds are Eligible Securities. Any
securities which are not eligible for repurchase transactions
hereunder shall not be included in the calculations set forth below
and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Eligible Securities and/or Cash Collateral to be transferred.
Repo Custodian shall not make any substitution if, at the time of
substitution, the aggregate Market Value of all Securities and any
Cash Collateral applicable to such repurchase transaction immediately
after such substitution would be less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were the
date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted
against the delivery by Repo Custodian of substitute Eligible
Securities to the Participating Funds and/or the crediting of the
Transaction Account with Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute
Eligible Securities, and has failed to deliver Eligible Securities
against such Cash Collateral not later than the close of business on
such Banking Day in accordance with the terms of the Master Agreement,
Repo Custodian shall promptly, but in no event later than 10:00 a.m.
the following Banking Day, notify the Participating Funds and Seller
of such failure.
(g) With respect to each repurchase transaction, at 9:00 a.m. New
York time, or at such other time as specified in proper instructions
of the Participating Funds (or the Custodian on behalf of the
Participating Funds) on the Repurchase Date, Repo Custodian shall
debit the Seller Account and credit the Transaction Account in the
amount of the Repurchase Price and shall transfer Securities from the
Participating Funds to the Seller and Cash Collateral, if any, from
the Transaction Account to the Seller Account in accordance with the
following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller
Account and credit the Transaction Account in the amount of the
Repurchase Price and shall transfer all Securities applicable to such
repurchase transaction from the Participating Funds to the Seller and
debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(ii) If the amount of available funds in the Seller Account is less
than the Repurchase Price, then Repo Custodian shall notify the Seller
of the amount of the deficiency and Seller shall promptly cause such
amount to be transferred to the Seller Account. If Seller fails to
cause the transfer of the entire amount of the deficiency to the
Seller Account, then Repo Custodian may, at its option and without
notice to Seller, advance to Seller the amount of such remaining
deficiency. It is expressly agreed that Repo Custodian is not
obligated to make any advance to Seller. If, following such transfer
and/or advance, the amount of available funds in the Seller Account
equals or exceeds the Repurchase Price then Repo Custodian shall debit
the Seller Account and credit the Transaction Account in the amount of
the Repurchase Price and shall transfer from the Participating Funds
to the Seller all Securities applicable to such repurchase transaction
and debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(iii) If the Seller fails to cause the transfer of the entire amount
of the deficiency, as required by (ii) above, and Repo Custodian fails
to advance to Seller an amount sufficient to eliminate the entire
deficiency, then Repo Custodian shall debit the Seller Account in the
amount of all immediately available funds designated by Seller as
applicable to the repurchase transaction and credit the Transaction
Account in such amount (such amount being referred to as the "Partial
Payment") and shall transfer Securities from the Participating Funds
to the Seller such that the aggregate Market Value of all remaining
Securities and Cash Collateral in the Transaction Account with respect
to such repurchase transaction shall at least equal the difference
between Margin Percentage of the Repurchase Price and the Partial
Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums
paid by or on behalf of the issuer in respect of the Securities and
collected by Repo Custodian, except as otherwise provided in Paragraph
8 of the Master Agreement.
6. Daily Statement. On each Banking Day on which any Participating
Funds have an outstanding repurchase transaction, Repo Custodian shall
deliver by facsimile, or other electronic means acceptable to the
Participating Funds, the Custodian and the Repo Custodian, to
Custodian and to the Participating Funds a statement identifying the
Securities held by Repo Custodian with respect to such repurchase
transaction and the cash and Cash Collateral, if any, held by Repo
Custodian in the Transaction Account, including a statement of the
then current Market Value of such Securities and the amounts, if any,
credited to the Transaction Account as of the close of trading on the
previous Banking Day. Repo Custodian shall also deliver to Custodian
and the Participating Funds such additional statements as the Repo
Custodian and the Participating Funds may agree upon from time to
time.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and
the amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the
Seller Account against the receipt from Seller of the Securities and
Cash Collateral, if any, and (ii) on each Valuation Day on which such
repurchase transaction is outstanding. If on any Valuation Day the
aggregate Market Value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day) for such transaction, Repo Custodian
shall promptly, but in any case no later than 10:00 a.m. the following
Valuation Day, notify Seller. If on any Valuation Day the aggregate
market value of the Securities and Cash Collateral with respect to any
repurchase transaction is less than the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) for such transaction, and Seller fails to deliver
additional Eligible Securities applicable to such repurchase
transaction or an additional amount of Cash Collateral by the close of
business on such Valuation Day such that the aggregate market value of
the Securities and Cash Collateral at least equals the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day), Repo Custodian shall promptly, but in
any event no later than 10:00 a.m. the following Valuation Day, notify
the Participating Funds of such failure.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing
services ("Pricing Services") set forth on Schedule B. It is
understood and agreed that Repo Custodian shall use the prices made
available by the Pricing Services at the close of business of the
preceding Valuation Day. In the event that Repo Custodian is unable
to obtain a valuation of any Securities from the Pricing Services,
Repo Custodian shall request a bid quotation from a broker's broker or
a broker dealer, set forth in Schedule B, other than Seller. In the
event Repo Custodian is unable to obtain a bid quotation for any
Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities
and any Cash Collateral equals at least the Margin Percentage of the
Repurchase Price and (ii) shall redeliver such Securities to Seller if
the Market Value of all other Securities and any Cash Collateral with
respect to such repurchase transaction equals at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day). The Repo Custodian may rely on prices
quoted by Pricing Services, broker's brokers or broker dealers, except
Seller, as set forth in Schedule B.
(c) (i) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction, Repo Custodian shall
deliver to the Participating Funds an amount of additional Eligible
Securities applicable to such repurchase transaction and/or debit the
Seller Account and credit the Transaction Account with an additional
amount of Cash Collateral, such that the aggregate Market Value of all
Securities and any Cash Collateral with respect to such repurchase
transaction shall equal at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) applicable to such repurchase transaction.
(ii) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction exceeds the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction, Repo Custodian shall return
to the Seller all or a portion of such Securities or Cash Collateral,
if any; provided that the Market Value of the remaining Securities and
any Cash Collateral with respect to the repurchase transaction shall
be at least equal to the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction. At any time and from time
to time with respect to any repurchase transaction, if authorized by
the Participating Funds, or the Custodian on behalf of the
Participating Funds, the Repo Custodian shall debit the Transaction
Account by an amount of Cash Collateral and credit the Seller Account
by the same amount of Cash Collateral against simultaneous delivery
from Seller to the Participating Funds of Eligible Securities
applicable to such repurchase transaction with a Market Value at least
equal to the amount of Cash Collateral credited and debited.
8. Authorized Persons. Schedule C hereto sets forth those persons
who are authorized to act for Repo Custodian, Custodian, Seller and
the Funds, respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested
telex, facsimile, a written request, direction, instruction or
certification signed or initialed by or on behalf of the party giving
the instructions by one or more authorized persons (as provided in
Paragraph 8); provided, however, that no instructions directing the
delivery of Securities or the payment of funds to any individual who
is an authorized signatory of Custodian or Repo Custodian shall be
signed by that individual. Telephonic, other oral or
electro-mechanical or electronic instructions (including the code
which may be assigned by Repo Custodian to Custodian from time to
time) given by one of the above authorized persons shall also be
considered proper instructions if the party receiving such
instructions reasonably believes them to have been given by an
authorized person with respect to the transaction involved. Oral
instructions will be confirmed by tested telex, facsimile or in
writing in the manner set forth above. The Funds and Seller authorize
Repo Custodian to tape record any and all telephonic or other oral
instructions given to Repo Custodian. Proper instructions may relate
to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to use reasonable care and
diligence in carrying out the provisions of this Agreement and the
Master Agreement and shall be liable to the Funds and/or Seller only
for direct damages resulting from the negligence or willful misconduct
of the Repo Custodian or its officers, employees or agents. The
parties hereby agree that Repo Custodian shall not be liable for
consequential, special or indirect damages, even if Repo Custodians
has been advised as to the possibility thereof. So long as and to the
extent that Repo Custodian exercises reasonable care and diligence and
acts without negligence, misfeasance or misconduct, Repo Custodian
shall not be liable to Seller or the Funds for (i) any action taken or
omitted in good faith in reliance upon proper instructions, (ii) any
action taken or omitted in good faith upon any notice, request,
certificate or other instrument reasonably believed by it to be
genuine and to be signed by the proper party or parties, (iii) any
delay or failure to act as may be required under this Agreement or
under the Master Agreement when such delay or failure is due to any
act of God or war, (iv) the actions or omissions of a Securities
System, (v) the title, validity or genuineness of any security
received, delivered or held by it pursuant to this Agreement or the
Master Agreement, (vi) the legality of the purchase or sale of any
Securities by or to the Participating Funds or Seller or the propriety
of the amount for which the same are purchased or sold (except to the
extent of Repo Custodian's obligations hereunder to determine whether
securities are Eligible Securities and to calculate the Market Value
of Securities and any Cash Collateral), (vii) the due authority of any
person listed on Schedule C to act on behalf of Custodian, Seller or
the Funds, as the case may be, with respect to this Agreement or
(viii) the errors of the Pricing Services, broker's brokers or broker
dealers set forth in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any
money to be used in a repurchase transaction, whether or not such
money is represented by any check, draft, or other instrument for the
payment of money, until the Eligible Securities have been delivered in
accordance with Paragraph 3 or until Repo Custodian actually receives
and collects such money on behalf of Seller or the Funds directly or
by the final crediting of the Seller Account or a Transaction Account
through the Securities System, except that this Paragraph 10(b) shall
not be deemed to limit the liability of Repo Custodian to Seller or
the Funds if the non-delivery of such Eligible Securities or the
failure to receive and collect such money results from the breach by
Repo Custodian of its obligations under this Agreement or the Master
Agreement.
(c) Repo Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by
it are such as properly may be held by the Participating Funds;
provided that notwithstanding anything to the contrary herein, Repo
Custodian shall be obligated to act in accordance with the guidelines
and proper instructions of the Participating Funds, or the Custodian
on behalf of the Participating Funds, with respect to the types of
Eligible Securities and the issuers of such Eligible Securities that
may be used in specific repurchase transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the
Custodian if Securities held by Repo Custodian are in default or if
payment on any Securities has been refused after due demand and
presentation and Repo Custodian shall take action to effect collection
of any such amounts upon the proper instructions of the Participating
Funds, or the Custodian on behalf of the Participating Funds, and
assurances satisfactory to it that it will be reimbursed for its costs
and expenses in connection with any such action.
(e) Repo Custodian shall have no duties, other than such duties as
are necessary to effectuate repurchase transactions in accordance with
this Agreement and the Master Agreement within the standard of care
set forth in Paragraph 10(a) above and in a commercially reasonable
manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly
authorized to execute and deliver this Agreement and to perform its
obligations hereunder and has taken all necessary action to authorize
such execution, delivery and performance, (ii) the execution, delivery
and performance of this Agreement do not and will not violate any
ordinance, declaration of trust, partnership agreement, articles of
incorporation, charter, rule or statute applicable to it or any
agreement by which it is bound or by which any of its assets are
affected, (iii) the person executing this Agreement on its behalf is
duly and properly authorized to do so, (iv) it has (and will maintain)
a copy of this Agreement and evidence of its authorization in its
official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President
or higher.
(b) Repo Custodian further represents and warrants that (i) it has
not pledged, encumbered, hypothecated, transferred, disposed of, or
otherwise granted, any third party an interest in any Securities, (ii)
it does not have any security interest, lien or right of setoff in the
Securities, and (iii) it has not received notification from any third
party, in its capacity as Repo Custodian, custodian bank or clearing
bank, of any lien, claim, charge or encumbrance with respect to any
Securities that are the subject of such repurchase transaction. Repo
Custodian agrees that (i) it will not pledge, encumber, hypothecate,
transfer, dispose of, or otherwise grant, any third party an interest
in any Securities, (ii) it will not acquire any security interest,
lien or right of setoff in the Securities, and (iii) it will promptly
notify the Fund Agent, if, during the term of any outstanding
repurchase transaction, it is notified by any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim,
charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent
that Repo Custodian is in the exercise of reasonable care and
diligence and acts without negligence, misfeasance or misconduct,
Seller will indemnify Repo Custodian and hold it harmless against any
and all losses, claims, damages, liabilities or actions to which it
may become subject, and reimburse it for any expenses (including
attorneys' fees and expenses) incurred by it in connection therewith,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon or in any way related to this Agreement, the
Master Agreement or any transactions contemplated hereby or thereby or
effected hereunder or thereunder. Without limiting the generality of
the foregoing indemnification, Repo Custodian shall be indemnified by
Seller for all costs and expenses, including attorneys' fees, for its
successful defense against claims that Repo Custodian breached its
standard of care and was negligent or engaged in misfeasance or
misconduct.
(b) So long as and to the extent that Repo Custodian is in the
exercise of reasonable care and diligence and acts without negligence,
misconduct or misfeasance, the Participating Funds will indemnify Repo
Custodian and hold it harmless against any and all losses, claims,
damages, liabilities or actions to which it may become subject, and
reimburse it for any expenses (including attorneys' fees and expenses)
incurred by it in connection therewith, insofar as such losses,
claims, damages, liabilities or actions result from the negligence,
misconduct or misfeasance of the Participating Funds under this
Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional
rights and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement
shall be binding unless in writing and executed by the parties hereto.
Schedule A, listing the Funds, may be amended from time to time to add
or delete Funds by the Funds (i) delivering an executed copy of an
addendum to Schedule A to Seller and Repo Custodian, and (ii)
amending Schedule A to the Master Agreement in accordance with the
provisions therein. The amendment of Schedule A as provided above
shall constitute appointment of Repo Custodian as a custodian for such
Fund. Schedule B may be amended from time to time by an instrument in
writing, or counterpart thereof, executed by Repo Custodian, Seller
and the Funds. Schedule C may be amended from time to time to change
an authorized person of: (i) the Funds, by written notice to Repo
Custodian and Seller by Ms. Sarah Zenoble or the Treasurer of the
Funds (or such persons who may be authorized from time to time in
writing by Ms. Zenoble or the President or Treasurer of Fidelity
Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any
Vice President of Repo Custodian; and (iv) Custodian, by written
notice to Repo Custodian by any Vice President of Custodian. Schedule
D may be amended from time to time by any party hereto by delivery of
written notice to the other parties hereto. Repo Custodian shall
receive notice of any amendment to the Master Agreement at the address
set forth in Schedule D hereto; and, if such amendment would have a
material adverse effect on the rights of, or would materially increase
the obligations of Repo Custodian under this Agreement, any such
amendment shall also require the consent of Repo Custodian. Any such
amendment shall be deemed not to be material if Repo Custodian fails
to object in writing within 21 days after receipt of notice thereof.
No amendment to this Agreement shall affect the rights or obligations
of any Fund with respect to any outstanding repurchase transaction
entered into under this Agreement and the Master Agreement prior to
such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict
between this Agreement and the Master Agreement, the Master Agreement
shall control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Valuation Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations
under this Agreement or the Master Agreement with respect to any
actions or omissions of any party hereto prior to termination. In the
event of termination, Repo Custodian will deliver any Securities, Cash
Collateral or cash held by it or any agent to Custodian or to such
successor custodian or custodian or subcustodian as the Participating
Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation
for the services to be rendered hereunder, based upon rates which
shall be agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian
and the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and
except as otherwise provided herein or as the parties to the Agreement
shall from time to time otherwise agree, all instructions, notices,
reports and other communications contemplated by this Agreement shall
be given to the party entitled to receive such notice at the telephone
number and address listed on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions
hereof shall not be affected thereby and shall remain in full force
and effect.
19. Binding Nature. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their successors and
assignees; provided that, no party hereto may assign this Agreement or
any of the rights or obligations hereunder without the prior written
consent of the other parties.
20. Headings. Section headings are for reference purposes only and
shall not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Repo Custodian and Seller are hereby
expressly put on notice of the limitation of liability set forth in
the Declarations of Trust and in the Certificates and Agreements of
Limited Partnership of the Funds and agree that the obligations
assumed by any Fund hereunder shall be limited in all cases to a Fund
and its assets or, in the case of a series Fund, to the assets of that
series only, and neither Seller, Repo Custodian nor their respective
agents or assigns shall seek satisfaction of any such obligation from
the officers, agents, employees, directors, trustees, shareholders or
partners of any such Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations
set forth in this Agreement with respect to each repurchase
transaction shall accrue only to the Participating Funds in accordance
with their respective interests therein. No other Fund shall receive
any rights or have any liabilities arising from any action or inaction
of any Participating Fund under this Agreement with respect to such
repurchase transaction.
25. General Provisions. This Agreement supersedes any other
custodian agreement by and among Seller, the Funds, and Repo Custodian
concerning repurchase transactions effected through the Joint Trading
Account. It is understood and agreed that time is of the essence with
respect to the performance of each party's respective obligations
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day immediately preceding the date
of determination or the last quote available. The pricing services,
Brokers' Brokers and Broker Dealers may be changed from time to time
by agreement of all the parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Anthony Isola
Raymond Stancil
William Mosca
Leonardo Nichols
Alan Mann
Allen B. Clark
Custodian
Ken Rindos
Kurt Woetzel
Seller
Gary F. Holloway
Konrad R. Kruger
Stephen M. Peet
Raymond E. Humiston
P. Michael Florio
Ben Carpenter
Blake S. Drexler
Derick B. Burgher
Lyn Kratovil
The Funds
Leland Barron
Wickliffe Curtis
Dorothy Egan
David Glocke
Katharyn Harlow
Timothy Huyck
Jon Jamen
Robert Litterst
Sam Silver
Burnell Stehman
Jeffrey St. Peters
Deborah Todd
John Todd
Joseph Torres
Richard Williams
SCHEDULE D
NOTICES
If to Custodian: Morgan Guaranty Trust Co. of New York
15 Broad Street, 16th Floor
New York, New York 10015
Telephone: (212) 483-4150
Attention: Ms. Kimberly Smith
or
The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (312) 635-4808
Attention: Claire Meskovic
With a copy to the Fund Agent
If to Repo Custodian: Chemical Bank
4 New York Plaza
21st Floor
New York, NY 10004-2477
Telephone: (212) 623-6446
Attention: Anthony Isola
If to Seller: Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-7909
Attention: Peter Sanchez
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277262.c1
Exhibit 8(n)
FORM OF
SCHEDULE 1
The following lists the additional counterparties to the Repo
Custodian Agreement for Joint Trading Account between Chemical Bank
and the Fidelity Funds:
Chase Securities, Inc.
CS First Boston Corp.
Dresdner Securities (U.S.A.), Inc.
HSBC Securities, Inc.
Lehman Government Securities, Inc.
Merrill Lynch Government Securities, Inc.
Paine Webber, Inc.
Salomon Brothers, Inc.
UBS Securities, Inc.
Exhibit 8(o)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
Between
THE BANK OF NEW YORK
and
FIDELITY FUNDS
Dated as of: _________
Exhibit 8(o)
TABLE OF CONTENTS
Page
ARTICLE I - APPOINTMENT OF CUSTODIAN 2
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN 2
Section 2.01. Establishment of Accounts 2
Section 2.02. Receipt of Funds 2
Section 2.03. Repurchase Transactions 2
Section 2.04. Other Transfers 4
Section 2.05. Custodian's Books and Records 5
Section 2.06. Reports by Independent Certified Public Accountants 5
Section 2.07. Securities System 6
Section 2.08. Collections 6
Section 2.09. Notices, Consents, Etc. 6
Section 2.10. Notice of Custodian's Inability to Perform 7
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS 7
Section 3.01. Proper Instructions; Special Instruction 7
Section 3.02. Authorized Persons 8
Section 3.03. Investment Limitations 8
Section 3.04. Persons Having Access to Assets of the Funds 8
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special
Instructions 9
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION 9
Section 4.02. Liability of Custodian for Actions of Securities Systems
9
Section 4.03. Indemnification 9
Section 4.04. Funds, Right to Proceed 10
ARTICLE V - COMPENSATION 11
Section 5.01. Compensation 11
Section 5.02. Waiver of Right of Set-Off 11
ARTICLE VI - TERMINATION 11
Section 6.01. Events of Termination 11
Section 6.02. Successor Custodian; Payment of Compensation 11
ARTICLE VII - MISCELLANEOUS 12
Section 7.01. Representative Capacity and Binding Obligation 12
Section 7.02. Entire Agreement 12
Section 7.03. Amendments 12
Section 7.04. Interpretation 12
Section 7.05. Captions 13
Section 7.06. Governing Law 13
Section 7.07. Notice and Confirmations 13
Section 7.08. Assignment 14
Section 7.09. Counterparts 14
Section 7.10. Confidentiality; Survival of Obligations 14
Exhibit 8(o)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
AGREEMENT dated as of ___________ by and between The Bank of New York
(hereinafter referred to as the "Custodian") and each of the entities
listed on Schedules A-1, A-2, A-3 and A-4 hereto, acting on behalf of
itself or, (i) in the case of a series company, on behalf of one or
more of its portfolios or series listed on Schedule A-1 or A-2 hereto,
(ii) in the case of the accounts listed on Schedule A-3 hereto, acting
through Fidelity Management & Research Company, and (iii) in the case
of the commingled or individual accounts listed on Schedule A-4
hereto, acting through Fidelity Management Trust Company
(collectively, the "Funds" and each, a "Fund").
W I T N E S S E T H
WHEREAS, each of the Funds desire to appoint the Custodian as its
custodian for the purpose of establishing and administering one or
more joint trading accounts or subaccounts thereof (individually, an
"Account" and collectively, the "Accounts") and holding cash and
securities for the Funds in connection with repurchase transactions
effected through the Accounts; and
WHEREAS, one or more of the Funds may, from time to time, enter into
one or more written repurchase agreements pursuant to which one or
more of the Funds agrees to purchase and resell, and the sellers named
in such agreements agree to sell and repurchase through the Accounts,
certain securities (collectively, the "Securities") (such repurchase
agreements being hereinafter referred to, collectively, as the
"Repurchase Agreements"); and
WHEREAS, each of the custodians identified in ScheduleB hereto (each,
a "Fund Custodian") serves as the primary custodian for one or more of
the Funds; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from one or more Fund Custodians to the
Custodian or transfer cash or Securities from the Custodian to one or
more Fund Custodians, or in the case of Funds in which Custodian is
also Fund Custodian, such Fund may arrange for transfer of cash or
Securities between an Account and an account maintained by Custodian
in its capacity as Fund Custodian for such Fund, in each event in
connection with Repurchase Agreement transactions; and
WHEREAS, from time to time, such Funds may arrange to transfer cash
or securities from the Custodian to the seller in such Repurchase
Agreement transactions, or in the case in which Custodian is also the
clearing bank for such seller, such Funds may arrange for transfer of
cash or securities between an Account and an account maintained by
Custodian for such seller in its capacity as clearing bank, in each
event in connection with two-party Repurchase Agreement transactions;
and
WHEREAS, each of the custodians identified in Schedule C hereto
(each, a "Repo Custodian") serves as a third-party custodian of the
Funds for purposes of effecting third-party Repurchase Agreement
transactions; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from the Custodian to one or more Repo
Custodians or transfer cash or Securities from one or more Repo
Custodians to the Custodian, or in the case in which Custodian is also
Repo Custodian, such Funds may arrange for transfer of cash or
securities between an Account and an account maintained for such Funds
in its capacity as Repo Custodian, in each event in connection with
third-party Repurchase Agreement transactions;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I - APPOINTMENT OF CUSTODIAN
Each of the Funds hereby employs and appoints the Custodian as its
custodian, subject to the terms and provisions of this Agreement.
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties, and only such powers and duties, as are set forth in this
Agreement.
Section 2.01. Establishment of Accounts. The Custodian shall
establish one or more Accounts as segregated joint trading accounts
for the Funds through which the Funds shall, from time to time, effect
Repurchase Agreement transactions.
Section 2.02. Receipt of Funds. The Custodian shall, from time to
time, receive funds for or on behalf of the Funds and shall hold such
funds in safekeeping. Upon receipt of Proper Instructions, the
Custodian shall credit funds so received to one or more Accounts
designated in such Proper Instructions. Promptly after receipt of
such funds from the Fund Custodian or a Repo Custodian or promptly
following the transfer to an Account from any account maintained by
Custodian in its capacity as Fund Custodian, or as Repo Custodian, the
Custodian shall provide written confirmation of such receipt to the
Fund Custodian or Repo Custodian, when and as applicable, and of such
receipt or transfer to the Fund Agent designated in Section 7.07(b)
hereof (the "Fund Agent"). The Custodian shall designate on its books
and records the funds allocable to each Account and the identity of
each Fund participating in such Account.
Section 2.03. Repurchase Transactions. The Funds may, from time to
time, enter into Repurchase Agreement transactions. In connection
with each such Repurchase Agreement transaction, unless otherwise
specifically directed by Special Instructions, the Custodian shall
take the following actions:
(a) Purchase of Securities. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive Securities and any cash
denominated in U.S. Dollars which is serving as collateral ("Cash
Collateral"), provided that payment therefor shall be made by the
Custodian only against prior or simultaneous receipt of the Securities
and any Cash Collateral in the manner prescribed in subsection 2.03(b)
below. Except as provided in Section2.04 hereof, in no event shall
the Custodian deliver funds from an Account for the purchase of
Securities and any Cash Collateral prior to receipt of the Securities
and any Cash Collateral by the Custodian or a Securities System (as
hereinafter defined). The Custodian is not under any obligation to
make credit available to the Funds to complete transactions hereunder.
Promptly after the transfer of funds and receipt of Securities and any
Cash Collateral, the Custodian shall provide a confirmation to the
Fund Agent, setting forth (i) the Securities and any Cash Collateral
which the Custodian has received pursuant to the Repurchase Agreement
transaction, (ii) the amount of funds transferred from the applicable
Account, and (iii) any security or transaction identification numbers
reasonably requested by the Fund Agent.
(b) Receipt and Holding of Securities. In connection with each
Repurchase Agreement transaction, the Custodian shall receive and hold
the Securities as follows: (i) in the case of certificated securities,
by physical receipt of the certificates or other instruments
representing such Securities and by physical segregation of such
certificates or instruments from other assets of the Custodian in a
manner indicating that such Securities belong to specified Funds; and
(ii) in the case of Securities held in book-entry form by a Securities
System (as hereinafter defined), by appropriate transfer and
registration of such Securities to a customer only account of the
Custodian on the book-entry records of the Securities System, and by
appropriate entry on the books and records of the Custodian
identifying such Securities as belonging to specified Funds.
(c) Sale of Securities. Upon receipt of Proper Instructions, the
Custodian shall make delivery of Securities and any Cash Collateral
held in or credited to an Account against prior or simultaneous
payment for such Securities in immediately available funds in the form
of: (i) cash, bank credit, or bank wire transfer received by the
Custodian; or (ii) credit to the customer only account of the
Custodian with a Securities System. Notwithstanding the foregoing,
the Custodian shall make delivery of Securities held in physical form
in accordance with "street delivery custom" to a broker or its
clearing agent, against delivery to the Custodian of a receipt for
such Securities; provided that the Custodian shall have taken all
actions possible to ensure prompt collection of the payment for, or
the return of such Securities by the broker or its clearing agent.
Promptly after the transfer of Securities and any Cash Collateral and
the receipt of funds, the Custodian shall provide a confirmation to
the Fund Agent, setting forth the amount of funds received by the
Custodian or a Securities System for credit to the applicable Account.
(d) Additional Functions. Upon receipt of Proper Instructions, the
Custodian shall take all such other actions as specified in such
Proper Instructions and as shall be reasonable or necessary with
respect to Repurchase Agreement transactions and the Securities and
funds transferred and received pursuant to such transactions,
including, without limitation, all such actions as shall be prescribed
in the event of a default under a Repurchase Agreement.
(e) Nondiscretionary Functions. The Custodian shall attend to all
non-discretionary details in connection with the purchase, sale,
transfer or other dealings with Securities or other assets of the
Funds held by the Custodian.
(f) In the event that the Custodian is directed by Proper
Instructions to make any payment or transfer of funds on behalf of a
Fund for which there would be, at the close of business on the date of
such payment or transfer, insufficient funds held by the Custodian on
behalf of such Fund, the Custodian may, in its discretion, provide an
overdraft ("Overdraft") to the Fund, in an amount sufficient to allow
the completion of such payment or transfer. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the Fund and the Custodian; and (b) shall accrue
interest form the date of the Overdraft to the date of payment in full
by the Fund at a rate agreed upon in writing, from time to time, by
the Custodian and the Fund. The Custodian and the Funds acknowledge
that the purpose of such Overdrafts is to temporarily finance the
purchase or sale of securities for prompt delivery in accordance with
the terms hereof, or to meet emergency expenses not reasonably
foreseeable by a particular Fund. The Funds hereby agree that the
Custodian shall have a continuing lien and security interest in and to
all Securities whose purchase is financed by Custodian and which are
in Custodian's possession or in the possession or control of any third
party acting on Custodian's behalf and the proceeds thereof. In this
regard, Custodian shall be entitled to all the rights and remedies of
a pledgee under common law and a secured party under the New York
Uniform Commercial Code and any other applicable laws or regulations
as then in effect.
Section 2.04. Other Transfers.
(a) In addition to transfers of funds and Securities referred to in
Section 2.03, the Custodian shall transfer funds and Securities held
in an Account: (a) upon receipt of Proper Instructions, to (i)any
Fund Custodian, or (ii)any other account maintained for any Fund by
the Custodian in its capacity as a Fund Custodian, (iii)any Repo
Custodian or (iv) any other account maintained for any Fund by the
Custodian in its capacity as a Repo Custodian; or (b) upon receipt of
Special Instructions, and subject to Section 3.04 hereof, to any other
person or entity designated in such Special Instructions.
(b) Determination of Fund Custodian Daily Net Amount. On each
banking day, based upon daily transaction information provided to the
Custodian by the Funds, Custodian shall determine: (i) the amount of
cash due to be transferred on such day by each Fund Custodian to the
Custodian in connection with all Repurchase Agreement transactions in
which the date fixed for the repurchase and resale of Securities is
the banking day next following the date on which the sale and purchase
of such Securities takes place (each, an "Overnight Repo Transaction")
to be effected through the Accounts in such day; and (ii) the amount
of cash due to be transferred on such day by Custodian to such Fund
Custodian in connection with all outstanding Overnight Repo
Transactions previously effected through the Accounts (the difference
between (i) and (ii) with respect to each Fund Custodian being
referred to as the "Fund Custodian Daily Net Amount"). On each
banking day, Custodian shall notify each Fund Custodian of the
foregoing determination and, unless otherwise directed in accordance
with Proper Instructions, Custodian shall (i) instruct such Fund
Custodian to transfer cash to the Custodian equal to the Fund
Custodian Daily Net Amount (if the Fund Custodian Daily Net Amount is
positive) or (ii) transfer to such Fund Custodian cash equal to the
Fund Custodian Daily Net Amount (if the Fund Custodian Daily Net
Amount is negative).
(c) Determination of Repo Custodian Daily Net Amount. On each
banking day, based upon daily transaction information provided to the
Custodian by the Funds and each Repo Custodian, Custodian shall
determine: (i) the amount of cash due to be transferred on such day
by each Repo Custodian on behalf of the Funds to all counterparties in
connection with all third-party Overnight Repo Transactions to be
effected through the Accounts on such day; and (ii) the amount of cash
due to be transferred on such day by each Repo Custodian on behalf of
all counterparties to the Funds in connection with all outstanding
third-party Overnight Repo Transactions previously effected through
the Accounts (the difference between (i) and (ii) with respect to each
Repo Custodian being referred to as the "Repo Custodian Daily Net
Amount"). On each banking day, Custodian shall notify the Funds of
the foregoing determinations and, unless otherwise directed in
accordance with Proper Instructions, Custodian shall (i) transfer to
each Repo Custodian cash equal to the Repo Custodian Daily Net Amount
(if the Repo Custodian Daily Net Amount is positive) or (ii) instruct
each Repo Custodian to transfer to the Custodian cash equal to the
Repo Custodian Daily Net Amount (if the Repo Custodian Daily Net
Amount is negative).
Section 2.05. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by the Funds in the
preparation of reports to shareholders of the Funds and others, audits
of accounts, and other ministerial matters of like nature. The
Custodian shall maintain complete and accurate records with respect to
cash and Securities held for the benefit of the Funds as required by
the rules and regulations of the Securities and Exchange Commission
applicable to investment companies registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"),
including: (a) journals or other records of original entry containing
a detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification
numbers, if any), and all receipts and disbursements of cash; (b)
ledgers or other records reflecting Securities in transfer, and
Securities in physical possession; and (c) cancelled checks and bank
records related thereto. The Custodian shall keep such other books
and records of the Funds relating to repurchase transactions effected
through the Accounts as the Funds shall reasonably request. Such
books and records maintained by the Custodian shall reflect at all
times the identity of each Fund participating in each Account and the
aggregate amount of the Securities and any Cash Collateral held by the
Custodian on behalf of the Funds in such Account pursuant to this
Agreement. All such books and records maintained by the Custodian
shall be maintained in a form acceptable to the Funds and in
compliance with the rules and regulations of the Securities and
Exchange Commission, including, but not limited to, books and records
required to be maintained by Section 31(a) of the Investment Company
Act and the rules from time to time adopted thereunder. All books and
records maintained by the Custodian relating to the Accounts shall at
all times be the property of the Funds and shall be available during
normal business hours for inspection and use by the Funds and their
agents, including, without limitation, their independent certified
public accountants. Notwithstanding the preceding sentence, the Funds
shall not take any actions or cause Custodian to take any actions
which would cause, either directly or indirectly, the Custodian to
violate any applicable laws, regulations, rules or orders.
Section 2.06. Reports by Independent Certified Public Accountants.
At the request of the Funds, the Custodian shall deliver to the Funds
such annual reports and other interim reports prepared by the
independent certified public accountants of the Custodian with respect
to the services provided by the Custodian under this Agreement,
including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding
Securities, including Securities deposited and/or maintained in a
Securities System. Such reports, which shall be of sufficient scope
and in sufficient detail as may reasonably be required by the Funds
and as may reasonably by obtained by the Custodian, shall provide
reasonable assurance to the Funds that the procedures employed by the
independent certified public accountants are reasonably designed to
detect any material inadequacies with respect to the matters discussed
in the report, shall state in detail the material inadequacies
disclosed by such examination, and, if no such inadequacies exist,
shall so state.
Section 2.07. Securities System. As used herein the term "Securities
System" shall mean each of the following: (a) the Depository Trust
Company; (b) the Participants Trust Company; (c) any book-entry system
as provided in (i) Subpart0 of Treasury Circular No. 300, 31CFR
306.115, (ii) SubpartB of Treasury Circular Public Debt Series No.
27-76, 31CFR 350.2, or (iii) the book-entry regulations of federal
agencies substantially in the form of 31CFR 306.115; or (d) any
domestic clearing agency registered with the Securities and Exchange
Commission under Section17A of the Securities Exchange Act of 1934, as
amended (or as may otherwise be authorized by the Securities and
Exchange Commission to serve in the capacity of depository or clearing
agent for the securities or other assets of investment companies)
which acts as a securities depository and the use of which has been
approved in Special Instructions. Use of a Securities System by the
Custodian shall be in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions:
(A) The Custodian may deposit and/or maintain Securities held
hereunder in a Securities System, provided that such Securities are
represented in an account of the Custodian in the Securities System
which account shall not contain any assets of the Custodian other than
assets held as a fiduciary, custodian, or otherwise for customers.
(B) The Custodian shall, if requested by the Funds, provide the Funds
with all reports obtained by the Custodian with respect to the
Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities
System.
(C) Upon receipt of Special Instructions, the Custodian shall
terminate the use hereunder of any Securities System (except for the
federal book-entry system) as promptly as practicable and shall take
all actions reasonably practicable to safeguard the Securities and
other assets of the Funds maintained with such Securities System.
Section 2.08. Collections. The Custodian shall (a) collect, receive
and deposit in the applicable Account all income and other payments
with respect to Securities held by the Custodian hereunder; (b)
endorse and deliver any instruments required to effect such
collection; and (c) execute ownership and other certificates and
affidavits for all federal, state and foreign tax purposes in
connection with receipt of income or other payments with respect to
Securities, or in connection with the transfer of Securities.
Section 2.09. Notices, Consents, Etc. The Custodian shall deliver to
the Funds, in the most expeditious manner practicable, all notices,
consents or announcements affecting or relating to Securities held by
the Custodian on behalf of the Funds that are received by the
Custodian, and, upon receipt of Proper Instructions, the Custodian
shall execute and deliver such consents or other authorizations as may
be required.
Section 2.10. Notice of Custodian's Inability to Perform. The
Custodian shall promptly notify the Funds in writing by facsimile
transmission or such other manner as the Funds may designate, if, for
any reason: (a) the Custodian determines that it is unable to perform
any of its duties or obligations hereunder or its duties or
obligations with respect to any repurchase transaction; or (b) the
Custodian reasonably foresees that it will be unable to perform any
such duties or obligations.
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS
Section 3.01. Proper Instructions; Special Instruction.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a written (including,
without limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by one or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or
other oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between electromechanical or
electronic devices or systems (including, without limitation,
computers) by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered
Proper Instructions only if the Custodian reasonably believes such
communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Funds by tested telex or in
writing in the manner set forth in clause(i) above, but the lack of
such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Each of the Funds and the
Custodian is hereby authorized to record any and all telephonic or
other oral instructions communicated to the Custodian. Proper
Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing
instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or
confirmed in writing by, in the case of the entities listed in
Schedules A-1 or A-2 hereto, the Treasurer or any Assistant Treasurer
of the Funds or any other person designated in writing by the
Treasurer of the Funds, and in the case of each of the entities listed
on Schedules A-3 or A-4, by the officer who is a signatory to this
Agreement on behalf of such entity or any other person designated in
writing by such officer or an officer of such entity of higher
authority, which countersignature or written confirmation shall be (i)
included on the same instrument containing the Proper Instructions or
on a separate instrument relating thereto, and (ii) delivered by hand,
by facsimile transmission, or in such other manner as the parties
hereto may agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, telecopy or telex number
agreed upon from time to time by the Custodian and the Funds.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the
Funds shall deliver to the Custodian, duly certified as appropriate by
the Treasurer or any Assistant Treasurer of the Funds or by a
Secretary or Assistant Secretary of the Funds, and in the case of each
of the entities listed on Schedules A-3 or A-4, by the officer who is
a signatory to this Agreement on behalf of such entity or any other
person designated in writing by such officer or an officer of higher
authority, a certificate setting forth (a) the names, signatures and
scope of authority of all persons authorized to give Proper
Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of the Funds (collectively, the
"Authorized Persons," and individually, an "Authorized Person"), and
(b) the names and signatures of those persons authorized to issue
Special Instructions. Such certificate may be accepted and relied
upon by the Custodian as conclusive evidence of the facts set forth
therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary.
Upon delivery of a certificate which deletes the name of a person
previously authorized to give Proper Instructions or to issue Special
Instructions, such person shall no longer be considered an Authorized
Person or authorized to issue Special Instructions, as applicable.
Section 3.03. Investment Limitations. In performing its duties
hereunder the Custodian may assume, unless and until it receives
special Instructions to the contrary (a "Contrary Notice"), that
Proper Instructions received by it are not in conflict with or in any
way contrary to any investment or other limitation applicable to any
of the Funds. The Custodian shall in no event be liable to the Funds
and shall be indemnified by the Funds for any loss, damage or expense
to the Custodian arising out of any violation of any investment or
other limitation to which any Fund is subject, except to the extent
that such loss, damage or expense: (i) relates to a violation of any
investment or other limitation of a Fund occurring after receipt by
the Custodian of a Contrary Notice; or (ii) arises from a breach of
this Agreement by the Custodian.
Section 3.04. Persons Having Access to Assets of the Funds. No
Authorized Person, Trustee, officer, employee or agent of the Funds
(other than the Custodian) shall have physical access to the assets of
the Funds held by the Custodian, or shall be authorized or permitted
to withdraw any such assets for delivery to an account of such person,
nor shall the Custodian deliver any such assets to any such person;
provided, however, that nothing in this Section 3.04 shall prohibit:
(a) any Authorized Person from giving Proper Instructions, or the
persons described in Section 3.01(b) from issuing Special
Instructions, so long as such action does not result in delivery of or
access to assets of the Funds prohibited by this Section 3.04; or (b)
the Funds' independent certified public accountants from examining or
reviewing the assets of the Funds held by the Custodian.
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special Instructions. Subject to the provisions of Section 4.01
hereof, the Custodian shall not be responsible for the title, validity
or genuineness of any property, or evidence of title thereof, received
by it or delivered by it pursuant to this Agreement.
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION
Section 4.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
reasonable care and diligence in carrying out all of its duties and
obligations under this Agreement, and shall be liable to the Funds for
all loss, damage and expense incurred or suffered by the Funds,
resulting from the failure of the Custodian to exercise such
reasonable care and diligence or from any other breach by the
Custodian of the terms of this Agreement.
(b) Acts of God, Etc. In no event shall the Custodian incur
liability hereunder if the Custodian is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which
this Agreement provides shall be performed or omitted to be performed
by reason of: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state
thereof, or of any foreign country, or political subdivision thereof
or of any court of competent jurisdiction; or (ii) any act of God or
war; unless, in each case, such delay or nonperformance is caused by
(A) the negligence, misfeasance or misconduct of the Custodian, or (B)
a malfunction or failure of equipment maintained or operated by the
Custodian other than a malfunction or failure caused by events beyond
the Custodian's control and which could not reasonably be anticipated
and/or prevented by the Custodian.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Funds, the
Custodian shall use all commercially reasonable efforts and shall take
all reasonable steps under the circumstances to mitigate the effects
of such event and to avoid continuing harm to the Funds.
Section 4.02. Liability of Custodian for Actions of Securities
Systems. Notwithstanding the provisions of Section4.01 to the
contrary, the Custodian shall not be liable to the Funds for any loss,
damage or expense resulting from the use by the Custodian of a
Securities System, unless such loss, damage or expense is caused by,
or results from, negligence, misfeasance or misconduct of the
Custodian. In the case of loss, damage or expense resulting from use
of a Securities System by the Custodian, the Custodian shall take all
reasonable steps to enforce such rights as it may have against the
Securities System to protect the interest of the Funds.
Section 4.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set
forth in this Agreement, the Funds severally agree to indemnify and
hold harmless the Custodian from all claims and liabilities (including
reasonable attorneys' fees) incurred or assessed against the Custodian
for actions taken in reliance upon Proper Instructions or Special
Instructions; provided, however, that such indemnity shall not apply
to claims and liabilities occasioned by or resulting from the
negligence, misfeasance or misconduct of the Custodian, or any other
breach of this Agreement by the Custodian. In addition, the Funds
severally agree to indemnify the Custodian against any liability
incurred by the Custodian by reason of taxes assessed to the
Custodian, or other costs, liability or expenses incurred by the
Custodian, resulting directly or indirectly solely from the fact that
securities and other property of the Funds is registered in the name
of the Custodian; provided, however, in no event shall such
indemnification be applicable to income, franchise or similar taxes
which may be imposed or applied against the Custodian or charges
imposed by a Federal Reserve Bank with respect to intra-day overdrafts
unless separately agreed to by the Funds.
(b) Extent of Liability. Notwithstanding anything to the contrary
contained herein, with respect to the indemnification obligations of
the Funds provided in this Section4.03, each Fund shall be: (i)
severally, and not jointly and severally, liable with each of the
other Funds; and (ii) liable only for its pro rata share of such
liabilities, determined with reference to such Fund's proportionate
interest in the aggregate of assets held by the Custodian in the
Account with respect to which such liability relates at the time such
liability was incurred, as reflected on the books and records of the
Funds.
(c) Notice of Litigation, Right to Prosecute, Etc. The Custodian
shall promptly notify the Funds in writing of the commencement of any
litigation or proceeding brought against the Custodian in respect of
which indemnity may be sought against the Funds pursuant to this
Section4.03. The Funds shall be entitled to participate in any such
litigation or proceeding and, after written notice from the Funds to
the Custodian, the Funds may assume the defense of such litigation or
proceeding with counsel of their choice at their own expense. The
Custodian shall not consent to the entry of any judgment or enter into
any settlement in any such litigation or proceeding without providing
the Funds with adequate notice of any such settlement or judgment, and
without the Funds' prior written consent. The Custodian shall submit
written evidence to the Funds with respect to any cost or expense for
which it seeks indemnification in such form and detail as the Funds
may reasonably request.
Section 4.04. Funds, Right to Proceed. Notwithstanding anything to
the contrary contained herein, the Funds shall have, at their election
upon reasonable notice to the Custodian, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Custodian's rights against any Securities System or other person for
loss, damage or expense caused the Custodian or the Funds by such
Securities System or other person, and shall be entitled to enforce
the rights of the Custodian with respect to.any claim against such
Securities System or other person which the Custodian may have as a
consequence of any such loss, damage or expense if and to the extent
that the Custodian or any Fund has not been made whole for any such
loss, damage or expense.
ARTICLE V - COMPENSATION
Section 5.01. Compensation. The Custodian shall be compensated for
its services hereunder in an amount, and at such times, as may be
agreed upon, from time to time, by the Custodian and the Funds. Each
Fund shall be severally, and not jointly, liable with the other Funds
only for its pro rata share of such compensation, determined with
reference to such Fund's proportionate interest in each Repurchase
Agreement transaction to which such compensation relates.
Section 5.02. Waiver of Right of Set-Off. The Custodian hereby
waives and relinquishes all contractual and common law rights of
set-off to which it may now or hereafter be or become entitled with
respect to any obligations of the Funds to the Custodian arising under
this Agreement.
ARTICLE VI - TERMINATION
Section 6.01. Events of Termination. This Agreement shall continue
in full force and effect until the first to occur of: (a) termination
by the Custodian or the Funds by an instrument in writing delivered to
the other party, such termination to take effect not sooner than
ninety (90) days after the date of such delivery; or (b) termination
by the Funds by written notice delivered to the Custodian, based upon
the Funds' determination that there is a reasonable basis to conclude
that the Custodian is insolvent or that the financial condition of the
Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodians receipt of such
notice or at such later time as the Funds shall designate; provided,
however, that this Agreement may be terminated as to one or more Funds
(but less than all Funds) by delivery of an amended Schedule A-1, A-2,
A-3 or A-4 pursuant to Section7.03 hereof. The execution and delivery
of an amended Schedule A-1, A-2, A-3 or A-4 which deletes one or more
Funds shall constitute a termination of this Agreement only with
respect to such deleted Fund(s).
Section 6.02. Successor Custodian; Payment of Compensation. Each of
the Funds may identify a successor custodian to which the cash,
Securities and other assets of such Fund shall, upon termination of
this Agreement, be delivered; provided that in the case of the
termination of this Agreement with respect to any of the Funds, such
Fund or Funds shall direct the Custodian to transfer the assets of
such Fund or Funds held by the Custodian pursuant to Proper
Instructions. The Custodian agrees to cooperate with the Funds in the
execution of documents and performance or all other actions necessary
or desirable in order to substitute the successor custodian for the
Custodian under this Agreement. In the event of termination, each
Fund shall make payment of such Fund's applicable share of unpaid
compensation within a reasonable time following termination and
delivery of a statement to the Funds setting forth such fees. The
termination of this Agreement with respect to any of the Funds shall
be governed by the provisions of this ArticleVI as to notice, payments
and delivery of securities and other assets, and shall not affect the
obligations of the parties hereunder with respect to the other Funds
set forth in Schedule A-1, A-2, A-3 or A-4 as amended from time to
time.
ARTICLE VII - MISCELLANEOUS
Section 7.01. Representative Capacity and Binding Obligation. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENTS OF EACH
FUND IS ON FILE WITH THE SECRETARY OF THE STATE OF EACH FUND'S
FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT
EXECUTED ON BEHALF OF THE TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE
OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE
SHAREHOLDERS, TRUSTEES, DIRECTORS, PARTNERS, OFFICERS, EMPLOYEES OR
AGENTS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS
AND PROPERTY OF THE FUNDS, AND IN THE CASE OF SERIES COMPANIES, SUCH
FUNDS' RESPECTIVE PORTFOLIOS OR SERIES.
THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, DIRECTOR, PARTNER,
OFFICER, EMPLOYEE OR AGENT OF ANY FUND MAY BE HELD PERSONALLY LIABLE
OR RESPONSIBLE FOR ANY OBLIGATIONS OF THE FUNDS ARISING OUT OF THIS
AGREEMENT. WITH RESPECT TO OBLIGATIONS OF EACH FUND ARISING OUT OF
THIS AGREEMENT, THE CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION
OF ANY CLAIM SOLELY TO THE ASSETS AND PROPERTY OF THE FUND TO WHICH
SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAD SEPARATELY CONTRACTED
WITH THE CUSTODIAN BY SEPARATE WRITTEN INSTRUMENT."
Section 7.02. Entire Agreement. This Agreement constitutes the
entire understanding and agreement of the parties hereto with respect
to the subject matter hereof.
Section 7.03. Amendments. No provision of this Agreement may be
amended except by a statement in writing signed by the party against
which enforcement of the amendment is sought; provided, however,
Schedule A-1, A-2, A-3 or A-4 listing the Funds which are parties
hereto, Schedule B listing the Fund Custodians and Schedule C listing
the Repo Custodians may be amended from time to time to add or delete
one or more Funds, Fund Custodians or Repo Custodians, as the case may
be, by the Funds' delivery of an amended Schedule A-1, A-2, A-3 or
A-4, Schedule B or Schedule C to the Custodian. The deletion of one
or more Funds from Schedule A-1, A-2, A-3 or A-4 shall have the effect
of terminating this Agreement as to such Fund(s), but shall not affect
this Agreement with respect to any other Fund.
Section 7.04. Interpretation. In connection with the operation of
this Agreement, the Custodian, and the Funds may agree in writing from
time to time on such provisions interpretative of or in addition to
the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this
Agreement.
Section 7.05. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon
the interpretation of the terms of the Agreement or the obligations of
the parties hereto.
Section 7.06. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 7.07. Notice and Confirmations.
(a) Except as provided in Section 7.07(b) below and except in the
case of Proper Instructions or Special Instructions, notices and other
writings contemplated by this Agreement shall be delivered by hand or
by facsimile transmission (provided that in the case of delivery by
facsimile transmission, notice shall also be mailed postage prepaid)
to the parties at the following addresses:
(i) If to the Funds:
FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah Todd or
Mr. Samuel Silver
(ii) If to the Custodian:
The Bank of New York
One Wall Street
Fourth Floor
New York, NY 10286
Attn: Claire Meskovic
Telephone: (212) 635-4808
Telefax: (212) 635-4828
(b) The Custodian may provide the confirmations required by Sections
2.02 and 2.03 of this Agreement by making the information available in
the form of a communication directly between electromechanical or
electrical devices or systems (including, without limitation,
computers) (or in such other manner as the parties hereto may agree in
writing) to the following Fund Agent:
Fidelity Accounting and Custody
Domestic Securities Operations
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 506-4071
Attention: Mr. Mark Mufler
The address and telephone number of the Funds, the Fund Agent and the
Custodian and the identity of the Fund Agent specified in this Section
7.07 may be changed by written notice of the Funds to Custodian or
Custodian to the Funds, as the case may be. All written notices which
are required or provided to be given hereunder shall be effective upon
actual receipt by the entity to which such notice is given.
Section 7.08. Assignment. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided that, no party hereto may assign this
Agreement or any of its rights or obligations hereunder without the
prior written consent of each of the other parties.
Section 7.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
This Agreement shall become effective when one or more counterparts
have been signed and delivered by each of the parties.
Section 7.10. Confidentiality; Survival of Obligations. The parties
hereto agree that they shall each shall treat confidentially the terms
and conditions of this Agreement and all information provided by each
party to the others regarding its business and operations. All
confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided
or thereafter becomes publicly available other than through a breach
of this Agreement, or that is required to be disclosed by any bank
examiner of the Custodian, any auditor of the parties hereto or by
judicial or administrative process or otherwise by applicable law or
regulation. The provisions of this Section 7.10 and Sections3.03,
4.01, 4.02, 4.03, 4.04, 4.05, 7.01 and 7.06 shall survive any
termination of this Agreement, provided that in the event of
termination the Custodian agrees that it shall transfer and return
Securities and other assets held by the Custodian for the benefit of
the Funds as the Funds direct pursuant to Proper Instructions.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above
written.
[Signature Lines Omitted]
SCHEDULES A-1, A-2, A-3 AND A-4
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN
THE BANK OF NEW YORK AND FIDELITY FUNDS DATED AS OF __________
The following is a list of the Funds to which this Agreement applies:
SCHEDULE B
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of the Fund Custodians of the Funds:
The Bank of New York
Morgan Guaranty Trust Company
Brown Brothers Harriman & Co.
First Union National Bank Charlotte
Chase Manhattan Bank, N.A.
State Street Bank and Trust Company
SCHEDULE C
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of Repo Custodians of the Funds:
The Bank of New York
Chemical Bank
Morgan Guaranty Trust Company
Exhibit 8(o)
Form of
FIRST AMENDMENT TO
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN
THE BANK OF NEW YORK
AND
FIDELITY FUNDS
FIRST AMENDMENT TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN
THE BANK OF NEW YORK AND FIDELITY FUNDS, dated as of _______, by and
between THE BANK OF NEW YORK ("Custodian") and each of the entities
listed on SchedulesA-1, A-2, A-3 and A-4 hereto on behalf of itself
or, (i) in the case of a series company, on behalf of one or more of
its portfolios or series listed on SchedulesA-1 or A-2 hereto, (ii) in
the case of the accounts listed on Schedule A-3 hereto, acting through
Fidelity Management & Research Company, and (iii)in the case of the
commingled or individual accounts listed on Schedule A-4 hereto,
acting through Fidelity Management Trust Company (collectively, the
"Funds" and each, a "Fund").
WITNESSETH
WHEREAS, Custodian and certain of the Funds have entered into that
certain Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Funds, dated as of ______ (the "Agreement"),
pursuant to which the Funds have appointed the Custodian as its
custodian for the purpose of establishing and administering one or
more joint trading accounts or subaccounts thereof (individually, an
"Account" and collectively, the "Accounts") and holding cash and
securities for the Funds in connection with repurchase transactions
effected through the Accounts; and
WHEREAS, Seller and the Funds desire to amend the Agreement as set
forth below.
NOW, THEREFORE, in consideration of the premises and mutual promises
and covenants contained herein, the parties hereto agree as follows.
Unless otherwise defined herein or the context otherwise requires,
terms used in this Amendment, including the preamble and recitals,
have the meanings provided in the Agreement.
The Agreement is hereby amended by deleting Paragraph2.03(f) in its
entirety and substituting the following in lieu thereof:
Exhibit 8(o)
"(f) Overdraft. In the event that the Custodian is directed by
Proper Instructions to make any payment or transfer of funds on behalf
of a Fund for which there would be, at the close of business on the
date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Fund, the Custodian may, in its
discretion, provide an overdraft ("Overdraft") to the Fund (such Fund
being referred to herein as an "Overdraft Fund"), in an amount
sufficient to allow the completion of such payment or transfer. Any
Overdraft provided hereunder: (a) shall be payable on the next
Business Day, unless otherwise agreed by the Overdraft Fund and the
Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the Overdraft Fund at a
rate agreed upon in writing, from time to time, by the Custodian and
the Overdraft Fund. The Custodian and the Funds acknowledge that the
purpose of such Overdrafts is to temporarily finance the purchase or
sale of securities for prompt delivery in accordance with the terms
hereof. The Custodian hereby agrees to notify each Overdraft Fund by
3:00 p.m., New York time, of the amount of any Overdraft. Provided
that Custodian has given the notice required by this subparagraph (f),
the Funds hereby agree that, as security for the Overdraft of an
Overdraft Fund, the Custodian shall have a continuing lien and
security interest in and to all interest of such Overdraft Fund in
Securities whose purchase is financed by Custodian and which are in
Custodian's possession or in the possession or control of any third
party acting on Custodian's behalf and the proceeds thereof. In this
regard, Custodian shall be entitled to all the rights and remedies of
a pledgee under common law and a secured party under the New York
Uniform Commercial Code and any other applicable laws or regulations
as then in effect."
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed and delivered under seal by their duly authorized officers.
BANK OF NEW YORK
By: /s/
Name: Kurt D. Woetzel
Title: Senior Vice President
FIDELITY INVESTMENT COMPANIES LISTED
ON SCHEDULE A-1 HERETO AND ACCOUNTS
LISTED ON SCHEDULE A-3 HERETO
Dated:
By: /s/
Name: Kenneth A. Rathgeber
Title: Treasurer of the Fidelity Investment Companies
listed on ScheduleA-1 and Vice President of
Fidelity Management& Research Company
FIDELITY INVESTMENT COMPANIES LISTED
ON SCHEDULE A-2 HERETO
Dated:
By: /s/
Name: David J. Saul
Title: Director of the Fidelity International (Bermuda)
Funds Limited, on behalf of the Funds listed on
Schedule A-2
ACCOUNTS LISTED ON SCHEDULE A-4 HERETO
By: FIDELITY MANAGEMENT TRUST COMPANY
Dated:
By: /s/
Name: John P. O'Reilly, Jr.
Title: Executive Vice President
Exhibit 8(p)
Form of
CUSTODIAN AGREEMENT
Between
Each of the Investment Companies
Listed on Appendix "A" Attached Hereto
and
Brown Brothers Harriman & Company
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 1
2.03 Security Purchases 2
2.04 Exchanges of Securities 2
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 3
2.08 Stock Dividends, Rights, Etc. 3
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 4
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 5
2.14 Securities Loans 5
2.15 Collections 6
2.16 Dividends, Distributions and Redemptions 6
2.17 Proceeds from Shares Sold 6
2.18 Proxies, Notices, Etc. 6
2.19 Bills and Other Disbursements 7
2.20 Nondiscretionary Functions 7
2.21 Bank Accounts 7
2.22 Deposit of Fund Assets in Securities Systems 7
2.23 Other Transfers 8
2.24 Establishment of Segregated Account 9
2.25 Custodian's Books and Records . 9
2.26 Opinion of Fund's Independent Certified Public
Accountants 9
2.27 Reports of Independent Certified Public Accountants 10
2.28 Overdraft Facility 10
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 10
3.01 Proper Instructions and Special Instructions 10
3.02 Authorized Persons 11
3.03 Persons Having Access to Assets of the Portfolios 11
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 11
i
IV. SUBCUSTODIANS 11
4.01 Domestic Subcustodians 12
4.02 Foreign Subcustodians and Interim Subcustodians 12
4.03 Special Subcustodians 13
4.04 Termination of a Subcustodian 13
4.05 Certification Regarding Foreign Subcustodians 13
V. STANDARD OF CARE; INDEMNIFICATION 14
5.01 Standard of Care 14
5.02 Liability of Custodian for Actions of Other Persons 15
5.03 Indemnification 15
5.04 Investment Limitations 16
5.05 Fund's Right to Proceed 16
VI. COMPENSATION 17
VII. TERMINATION 17
7.01 Termination of Agreement as to One or More Funds 17
7.02 Termination as to One or More Portfolios 18
VIII. DEFINED TERMS 18
IX. MISCELLANEOUS 19
9.01 Execution of Documents, Etc 19
9.02 Representative Capacity; Nonrecourse Obligations 19
9.03 Several Obligations of the Funds and the Portfolios 19
9.04 Representations and Warranties 19
9.05 Entire Agreement 20
9.06 Waivers and Amendments 20
9.07 Interpretation 20
9.08 Captions 20
9.09 Governing Law 20
9.10 Notices 21
IX. MISCELLANEOUS 21
9.11 Assignment 21
9.12 Counterparts 21
9.13 Confidentiality; Survival of Obligations 21
ii
APPENDICES
Appendix "A" - List of Funds and Portfolios
Appendix "B" - List of Additional Custodians,
Special Subcustodians and Foreign Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
iii
EXHIBIT 8(P)
FORM OF
CUSTODIAN AGREEMENT
AGREEMENT made as of the 1st day of September, 1994 between each of
the Investment Companies Listed on Appendix "A" hereto, as the same
may be amended from time to time (each a "Fund" and collectively the
"Funds") and Brown Brothers Harriman & Company (the "Custodian").
W I T N E S S E T H
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate
portfolio of cash, securities and other assets (all such existing and
additional series now or hereafter listed on Appendix "A" being
hereinafter referred to individually, as a "Portfolio," and
collectively, as the "Portfolios"); and
WHEREAS, each Fund desires to appoint the Custodian as custodian on
behalf of each of its Portfolios in accordance with the provisions of
the Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations thereunder, under the terms and conditions
set forth in this Agreement, and the Custodian has agreed so to act as
custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and
appoints the Custodian as a custodian, subject to the terms and
provisions of this Agreement. Each Fund shall deliver to the
Custodian, or shall cause to be delivered to the Custodian, cash,
securities and other assets owned by each of its Portfolios from time
to time during the term of this Agreement and shall specify to which
of its Portfolios such cash, securities and other assets are to be
specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties set forth in this Article II. Pursuant to and in accordance
with Article IV hereof, the Custodian may appoint one or more
Subcustodians (as hereinafter defined) to exercise the powers and
perform the duties of the Custodian set forth in this Article II and
references to the Custodian in this Article II shall include any
Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all
cash, securities and other assets of each Fund's Portfolios delivered
to the Custodian and, on behalf of such Portfolios, the Custodian
shall, from time to time, accept delivery of cash, securities and
other assets for safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of each Fund's
Portfolios either: (i) by physical possession of the share
certificates or other instruments representing such securities in
registered or bearer form; or (ii) in book-entry form by a Securities
System (as hereinafter defined) in accordance with the provisions of
Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of
each Portfolio in the name of the Custodian, the Portfolio or a
nominee of either of them, unless specifically directed by Proper
Instructions to hold such registered securities in so-called street
name; provided that, in any event, all such securities and other
assets shall be held in an account of the Custodian containing only
assets of a Portfolio, or only assets held by the Custodian as a
fiduciary or custodian for customers; and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or
other customer for which such securities and other assets are held in
such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper
Instructions (as hereinafter defined), the Custodian shall pay for and
receive securities purchased for the account of a Portfolio, provided
that payment shall be made by the Custodian only upon receipt of the
securities: (a) by the Custodian; (b) by a clearing corporation of a
national securities exchange of which the Custodian is a member; or
(c) by a Securities System. Notwithstanding the foregoing, upon
receipt of Proper Instructions: (i) in the case of a repurchase
agreement, the Custodian may release funds to a Securities System
prior to the receipt of advice from the Securities System that the
securities underlying such repurchase agreement have been transferred
by book-entry into the Account (as hereinafter defined) maintained
with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the
Securities System may make payment of such funds to the other party to
the repurchase agreement only upon transfer by book-entry of the
securities underlying the repurchase agreement into the Account; (ii)
in the case of time deposits, call account deposits, currency
deposits, and other deposits, foreign exchange transactions, futures
contracts or options, pursuant to Sections 2.09, 2.10, 2.12 and 2.13
hereof, the Custodian may make payment therefor before receipt of an
advice or confirmation evidencing said deposit or entry into such
transaction; (iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make payment therefor and receive delivery of such
securities in accordance with local custom and practice generally
accepted by Institutional Clients (as hereinafter defined) in the
country in which the settlement occurs, but in all events subject to
the standard of care set forth in Article V hereof; and (iv) in the
case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by
Institutional Clients with respect to such securities, the receipt of
such securities and the payment therefor take place in different
countries, the Custodian may receive delivery of such securities and
make payment therefor in accordance with standard industry custom and
practice for such securities generally accepted by Institutional
Clients, but in all events subject to the standard of care set forth
in Article V hereof. For purposes of this Agreement, an
"Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or
sells securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for
the account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par
value, conversion or other event relating to the securities or the
issuer of such securities, and shall deposit any such securities in
accordance with the terms of any reorganization or protective plan.
The Custodian shall, without receiving Proper Instructions: surrender
securities in temporary form for definitive securities; surrender
securities for transfer into the name of the Custodian, a Portfolio or
a nominee of either of them, as permitted by Section 2.02(b); and
surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal
amount of indebtedness, provided that the securities to be issued will
be delivered to the Custodian or a nominee of the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper
Instructions, the Custodian shall make delivery of securities which
have been sold for the account of a Portfolio, but only against
payment therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b) credit to the
account of the Custodian with a clearing corporation of a national
securities exchange of which the Custodian is a member; or (c) credit
to the Account of the Custodian with a Securities System, in
accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of
securities, the settlement of which occurs outside of the United
States of America, such securities shall be delivered and paid for in
accordance with local custom and practice generally accepted by
Institutional Clients in the country in which the settlement occurs,
but in all events subject to the standard of care set forth in Article
V hereof; (ii) in the case of the sale of securities in which, in
accordance with standard industry custom and practice generally
accepted by Institutional Clients with respect to such securities, the
delivery of such securities and receipt of payment therefor take place
in different countries, the Custodian may deliver such securities and
receive payment therefor in accordance with standard industry custom
and practice for such securities generally accepted by Institutional
Clients, but in all events subject to the standard of care set forth
in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing
agent, against delivery to the Custodian of a receipt for such
securities, provided that the Custodian shall have taken reasonable
steps to ensure prompt collection of the payment for, or the return
of, such securities by the broker or its clearing agent, and provided
further that the Custodian shall not be responsible for the selection
of or the failure or inability to perform of such broker or its
clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper
Instructions, the Custodian shall surrender securities to the
depositary used for such securities by an issuer of American
Depositary Receipts or International Depositary Receipts (hereinafter
referred to, collectively, as "ADRs"), against a written receipt
therefor adequately describing such securities and written evidence
satisfactory to the Custodian that the depositary has acknowledged
receipt of instructions to issue ADRs with respect to such securities
in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time
to time designate. Upon receipt of Proper Instructions, the Custodian
shall surrender ADRs to the issuer thereof, against a written receipt
therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to
deliver the securities underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of
Proper Instructions, the Custodian shall: (a) deliver warrants, puts,
calls, rights or similar securities to the issuer or trustee thereof,
or to the agent of such issuer or trustee, for the purpose of exercise
or sale, provided that the new securities, cash or other assets, if
any, acquired as a result of such actions are to be delivered to the
Custodian; and (b) deposit securities upon invitations for tenders
thereof, provided that the consideration for such securities is to be
paid or delivered to the Custodian, or the tendered securities are to
be returned to the Custodian. Notwithstanding any provision of this
Agreement to the contrary, the Custodian shall take all necessary
action, unless otherwise directed to the contrary in Proper
Instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall promptly notify each applicable Fund of such
action in writing by facsimile transmission or in such other manner as
such Fund and the Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall
receive and collect all stock dividends, rights and other items of
like nature and, upon receipt of Proper Instructions, take action with
respect to the same as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, a Fund on behalf of
any applicable Portfolio relating to compliance with the rules of the
Options Clearing Corporation or of any registered national securities
exchange or similar organization(s), the Custodian shall: (a) receive
and retain confirmations or other documents, if any, evidencing the
purchase or writing of an option on a security or securities index by
the applicable Portfolio; (b) deposit and maintain in a segregated
account, securities (either physically or by book-entry in a
Securities System), cash or other assets; and (c) pay, release and/or
transfer such securities, cash or other assets in accordance with
notices or other communications evidencing the expiration, termination
or exercise of such options furnished by the Options Clearing
Corporation, the securities or options exchange on which such options
are traded, or such other organization as may be responsible for
handling such option transactions. Each Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for
the sufficiency of assets held in any segregated account established
in compliance with applicable margin maintenance requirements and the
performance of other terms of any option contract.
Section 2.10. Futures Contracts. Upon receipt of Proper
Instructions, or pursuant to the provisions of any futures margin
procedural agreement among a Fund, on behalf of any applicable
Portfolio, the Custodian and any futures commission merchant (a
"Procedural Agreement"), the Custodian shall: (a) receive and retain
confirmations, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the applicable
Portfolio; (b) deposit and maintain in a segregated account, cash,
securities and other assets designated as initial, maintenance or
variation "margin" deposits intended to secure the applicable
Portfolio's performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written by the
Portfolio, in accordance with the provisions of any Procedural
Agreement designed to comply with the rules of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or
transfer assets into such margin accounts only in accordance with any
such Procedural Agreements. Each Fund, on behalf of its applicable
Portfolios, and such futures commission merchant shall be responsible
for the sufficiency of assets held in the segregated account in
compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by
the applicable Fund on behalf of such Portfolio and the Custodian, as
collateral for borrowings effected by such Portfolio, provided that
such borrowed money is payable by the lender (a) to or upon the
Custodian's order, as Custodian for such Portfolio, and (b)
concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to
purchase interest bearing fixed term and call deposits (hereinafter
referred to collectively, as "Interest Bearing Deposits") for the
account of a Portfolio, the Custodian shall purchase such Interest
Bearing Deposits in the name of the Portfolio with such banks or trust
companies (including the Custodian, any Subcustodian or any subsidiary
or affiliate of the Custodian) (hereinafter referred to as "Banking
Institutions") and in such amounts as the applicable Fund may direct
pursuant to Proper Instructions. Such Interest Bearing Deposits may
be denominated in U.S. Dollars or other currencies, as the applicable
Fund on behalf of its Portfolio may determine and direct pursuant to
Proper Instructions. The Custodian shall include in its records with
respect to the assets of each Portfolio appropriate notation as to the
amount and currency of each such Interest Bearing Bank Deposit, the
accepting Banking Institution and all other appropriate details, and
shall retain such forms of advice or receipt evidencing such account,
if any, as may be forwarded to the Custodian by the Banking
Institution. The responsibilities of the Custodian to each Fund for
Interest Bearing Deposits accepted on the Custodian's books in the
United States on behalf of the Fund's Portfolios shall be that of a
U.S. bank for a similar deposit. With respect to Interest Bearing
Deposits other than those accepted on the Custodian's books, (a) the
Custodian shall be responsible for the collection of income as set
forth in Section 2.15 and the transmission of cash and instructions to
and from such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or, so long as the
Custodian acts in accordance with Proper Instructions, for the failure
of such Banking Institution to pay upon demand. Upon receipt of
Proper Instructions, the Custodian shall take such reasonable actions
as the applicable Fund deems necessary or appropriate to cause each
such Interest Bearing Deposit Account to be insured to the maximum
extent possible by all applicable deposit insurers including, without
limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other Than as Principal. Upon
receipt of Proper Instructions, the Custodian shall settle foreign
exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a
Portfolio with such currency brokers or Banking Institutions as the
applicable Fund may determine and direct pursuant to Proper
Instructions. The Custodian shall be responsible for the transmission
of cash and instructions to and from the currency broker or Banking
Institution with which the contract or option is made, the safekeeping
of all certificates and other documents and agreements evidencing or
relating to such foreign exchange transactions and the maintenance of
proper records as set forth in Section 2.25. The Custodian shall have
no duty with respect to the selection of the currency brokers or
Banking Institutions with which a Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions
to comply with the terms of any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall
not be obligated to enter into foreign exchange transactions as
principal. However, if the Custodian has made available to a Fund its
services as a principal in foreign exchange transactions, upon receipt
of Proper Instructions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a
Portfolio of such Fund with the Custodian as principal. The Custodian
shall be responsible for the selection of the currency brokers or
Banking Institutions and the failure of such currency brokers or
Banking Institutions to comply with the terms of any contract or
option.
(c) Payments. Notwithstanding anything to the contrary contained
herein, upon receipt of Proper Instructions the Custodian may, in
connection with a foreign exchange contract, make free outgoing
payments of cash in the form of U.S. Dollars or foreign currency prior
to receipt of confirmation of such foreign exchange contract or
confirmation that the countervalue currency completing such contract
has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper
Instructions, the Custodian shall, in connection with loans of
securities by a Portfolio, deliver securities of such Portfolio to the
borrower thereof prior to receipt of the collateral, if any, for such
borrowing; provided that, in cases of loans of securities secured by
cash collateral, the Custodian's instructions to the Securities System
shall require that the Securities System deliver the securities of the
Portfolio to the borrower thereof only upon receipt of the collateral
for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to each Fund
with respect to portfolio securities and other assets of each of such
Fund's Portfolios; (b) promptly credit to the account of each
applicable Portfolio all income and other payments relating to
portfolio securities and other assets held by the Custodian hereunder
upon Custodian's receipt of such income or payments or as otherwise
agreed in writing by the Custodian and the applicable Fund; (c)
promptly endorse and deliver any instruments required to effect such
collections; (d) promptly execute ownership and other certificates and
affidavits for all federal, state and foreign tax purposes in
connection with receipt of income, capital gains or other payments
with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or
transfer of such securities or other assets; and (e) promptly file any
certificates or other affidavits for the refund or reclaim of foreign
taxes paid, and promptly notify each applicable Fund of any changes to
law, interpretative rulings or procedures regarding such reclaims, and
otherwise use all available measures customarily used to minimize the
imposition of foreign taxes at source, and promptly inform each
applicable Fund of alternative means of minimizing such taxes of which
the Custodian shall become aware (or with the exercise of reasonable
care should have become aware); provided, however, that with respect
to portfolio securities registered in so-called street name, the
Custodian shall use its best efforts to collect amounts due and
payable to each Fund with respect to its Portfolios. The Custodian
shall promptly notify each applicable Fund in writing by facsimile
transmission or in such other manner as each such Fund and the
Custodian may agree in writing if any amount payable with respect to
portfolio securities or other assets of the Portfolios of such Fund(s)
is not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect
to portfolio securities or other assets that are in default.
Section 2.16. Dividends, Distributions and Redemptions. The
Custodian shall promptly release funds or securities: (a) upon
receipt of Proper Instructions, to one or more Distribution Accounts
designated by the applicable Fund or Funds in such Proper
Instructions; or (b) upon receipt of Special Instructions, as
otherwise directed by the applicable Fund or Funds, for the purpose of
the payment of dividends or other distributions to shareholders of
each applicable Portfolio, and payment to shareholders who have
requested repurchase or redemption of their shares of the Portfolio(s)
(collectively, the "Shares"). For purposes of this Agreement, a
"Distribution Account" shall mean an account established at a Banking
Institution designated by the applicable Fund on behalf of one or more
of its Portfolios in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall
receive funds representing cash payments received for Shares issued or
sold from time to time by the Funds, and shall promptly credit such
funds to the account(s) of the applicable Portfolio(s). The Custodian
shall promptly notify each applicable Fund of Custodian's receipt of
cash in payment for Shares issued by such Fund by facsimile
transmission or in such other manner as the Fund and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian
shall: (a) deliver all federal funds received by the Custodian in
payment for Shares in payment for such investments as may be set forth
in such Proper Instructions and at a time agreed upon between the
Custodian and the applicable Fund; and (b) make federal funds
available to the applicable Fund as of specified times agreed upon
from time to time by the applicable Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to
the accounts of each applicable Portfolio.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to
each applicable Fund, in the most expeditious manner practicable, all
forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to securities owned by one or more
of the applicable Fund's Portfolios that are received by the
Custodian, any Subcustodian, or any nominee of either of them, and,
upon receipt of Proper Instructions, the Custodian shall execute and
deliver, or cause such Subcustodian or nominee to execute and deliver,
such proxies or other authorizations as may be required. Except as
directed pursuant to Proper Instructions, neither the Custodian nor
any Subcustodian or nominee shall vote upon any such securities, or
execute any proxy to vote thereon, or give any consent or take any
other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.20. Nondiscretionary Functions. The Custodian shall
attend to all nondiscretionary details in connection with the sale,
exchange, substitution, purchase, transfer or other dealings with
securities or other assets of each Portfolio held by the Custodian,
except as otherwise directed from time to time pursuant to Proper
Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian
shall open and operate a bank account or accounts (hereinafter
referred to collectively, as "Bank Accounts") on the books of the
Custodian or any Subcustodian provided that such account(s) shall be
in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or
order of the Custodian; provided however, that such Bank Accounts in
countries other than the United States may be held in an account of
the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or
other customer for which such securities and other assets are held in
such account and the respective interests therein. Such Bank Accounts
may be denominated in either U.S. Dollars or other currencies. The
responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States shall be that
of a U.S. bank for a similar deposit. The responsibilities of the
Custodian to each applicable Fund for deposits accepted on any
Subcustodian's books shall be governed by the provisions of Section
5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open
and operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution
other than the Custodian or any Subcustodian, provided that such
account(s) shall be in the name of the Custodian or a nominee of the
Custodian, for the account of a Portfolio, and shall be subject only
to the draft or order of the Custodian; provided however, that such
Bank Accounts may be held in an account of the Custodian containing
only assets held by the Custodian as a fiduciary or custodian for
customers, and provided further, that the records of the Custodian
shall indicate at all times the Portfolio or other customer for which
such securities and other assets are held in such account and the
respective interests therein. Such Bank Accounts may be denominated
in either U.S. Dollars or other currencies. Subject to the provisions
of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such
Banking Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the
Custodian shall take such reasonable actions as the applicable Fund
deems necessary or appropriate to cause each deposit account
established by the Custodian pursuant to this Section 2.21 to be
insured to the maximum extent possible by all applicable deposit
insurers including, without limitation, the Federal Deposit Insurance
Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by a
Portfolio in: (a) The Depository Trust Company; (b) the Participants
Trust Company; (c) any book-entry system as provided in (i) Subpart O
of Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of
Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii)
the book-entry regulations of federal agencies substantially in the
form of 31 CFR 306.115; or (d) any other domestic clearing agency
registered with the Securities and Exchange Commission ("SEC") under
Section 17A of the Securities Exchange Act of 1934 (or as may
otherwise be authorized by the Securities and Exchange Commission to
serve in the capacity of depository or clearing agent for the
securities or other assets of investment companies) which acts as a
securities depository and the use of which each applicable Fund has
previously approved by Special Instructions (as hereinafter defined)
(each of the foregoing being referred to in this Agreement as a
"Securities System"). Use of a Securities System shall be in
accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held
hereunder in a Securities System, provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which Account shall not contain any assets of the
Custodian other than assets held as a fiduciary, custodian, or
otherwise for customers and shall be so designated on the books and
records of the Securities System.
(B) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such
Account and shall not be entitled to a lien against the assets in such
Account for extensions of credit to the Custodian other than for
payment of the purchase price of such assets.
(C) Each Fund hereby designates the Custodian as the party in whose
name any securities deposited by the Custodian in the Account are to
be registered.
(D) The books and records of the Custodian shall at all times
identify those securities belonging to each Portfolio which are
maintained in a Securities System.
(E) The Custodian shall pay for securities purchased for the account
of a Portfolio only upon (w) receipt of advice from the Securities
System that such securities have been transferred to the Account of
the Custodian, and (x) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of such
Portfolio. The Custodian shall transfer securities sold for the
account of a Portfolio only upon (y) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Account of the Custodian, and (z) the making of an
entry on the records of the Custodian to reflect such transfer and
payment for the account of such Portfolio. Copies of all advices from
the Securities System relating to transfers of securities for the
account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall
deliver to each applicable Fund on the next succeeding business day
daily transaction reports which shall include each day's transactions
in the Securities System for the account of each applicable Portfolio.
Such transaction reports shall be delivered to each applicable Fund or
any agent designated by such Fund pursuant to Proper Instructions, by
computer or in such other manner as such Fund and the Custodian may
agree in writing.
(F) The Custodian shall, if requested by a Fund pursuant to Proper
Instructions, provide such Fund with all reports obtained by the
Custodian or any Subcustodian with respect to a Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
(G) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System (except the federal
book-entry system) on behalf of any Portfolio as promptly as
practicable and shall take all actions reasonably practicable to
safeguard the securities of any Portfolio maintained with such
Securities System.
Section 2.23. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer
to or receive from a third party that has been appointed to serve as
an additional custodian of one or more Portfolios (an "Additional
Custodian") securities, cash and other assets of such Portfolio(s) in
accordance with such Proper Instructions. Each Additional Custodian
shall be identified as such on Appendix B, as the same may be amended
from time to time in accordance with the provisions of Section
9.06(c).
(b) Upon receipt of Special Instructions, the Custodian shall make
such other dispositions of securities, funds or other property of a
Portfolio in a manner or for purposes other than as expressly set
forth in this Agreement, provided that the Special Instructions
relating to such disposition shall include a statement of the purpose
for which the delivery is to be made, the amount of funds and/or
securities to be delivered, and the name of the person or persons to
whom delivery is to be made, and shall otherwise comply with the
provisions of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a
Portfolio, into which account or accounts may be transferred cash
and/or securities or other assets of such Portfolio, including
securities maintained by the Custodian in a Securities System pursuant
to Section 2.22 hereof, said account or accounts to be maintained:
(a) for the purposes set forth in Sections 2.09, 2.10 and 2.11 hereof;
(b) for the purposes of compliance by the Portfolio with the
procedures required by Investment Company Act Release No. 10666, or
any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies;
or (c) for such other purposes as set forth, from time to time, in
Special Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by a Fund in the
preparation of reports to such Fund's shareholders and others, audits
of accounts, and other ministerial matters of like nature. The
Custodian shall maintain complete and accurate records with respect to
securities and other assets held for the accounts of each Portfolio as
required by the rules and regulations of the SEC applicable to
investment companies registered under the 1940 Act, including: (a)
journals or other records of original entry containing a detailed and
itemized daily record of all receipts and deliveries of securities
(including certificate and transaction identification numbers, if
any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in
physical possession, (iii) securities borrowed, loaned or
collateralizing obligations of each Portfolio, (iv) monies borrowed
and monies loaned (together with a record of the collateral therefor
and substitutions of such collateral), (v) dividends and interest
received, (vi) the amount of tax withheld by any person in respect of
any collection made by the Custodian or any Subcustodian, and (vii)
the amount of reclaims or refunds for foreign taxes paid; and (c)
cancelled checks and bank records related thereto. The Custodian
shall keep such other books and records of each Fund as such Fund
shall reasonably request. All such books and records maintained by
the Custodian shall be maintained in a form acceptable to the
applicable Fund and in compliance with the rules and regulations of
the SEC, including, but not limited to, books and records required to
be maintained by Section 31(a) of the 1940 Act and the rules and
regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall
at all times be the property of each applicable Fund and shall be
available during normal business hours for inspection and use by such
Fund and its agents, including, without limitation, its independent
certified public accountants. Notwithstanding the preceding sentence,
no Fund shall take any actions or cause the Custodian to take any
actions which would cause, either directly or indirectly, the
Custodian to violate any applicable laws, regulations or orders.
Section 2.26. Opinion of Fund's Independent Certified Public
Accountants. The Custodian shall take all reasonable action as a Fund
may request to obtain from year to year favorable opinions from such
Fund's independent certified public accountants with respect to the
Custodian's activities hereunder in connection with the preparation of
the Fund's Form N-1A and the Fund's Form N-SAR or other periodic
reports to the SEC and with respect to any other requirements of the
SEC.
Section 2.27. Reports by Independent Certified Public Accountants.
At the request of a Fund, the Custodian shall deliver to such Fund a
written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the
Custodian under this Agreement, including, without limitation, the
Custodian's accounting system, internal accounting control and
procedures for safeguarding cash, securities and other assets,
including cash, securities and other assets deposited and/or
maintained in a Securities System or with a Subcustodian. Such report
shall be of sufficient scope and in sufficient detail as may
reasonably be required by any Fund and as may reasonably be obtained
by the Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian
is directed by Proper Instructions to make any payment or transfer of
funds on behalf of a Portfolio for which there would be, at the close
of business on the date of such payment or transfer, insufficient
funds held by the Custodian on behalf of such Portfolio, the Custodian
may, in its discretion, provide an overdraft (an "Overdraft") to the
applicable Fund on behalf of such Portfolio, in an amount sufficient
to allow the completion of such payment. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the applicable Fund and the Custodian; and (b)
shall accrue interest from the date of the Overdraft to the date of
payment in full by the applicable Fund on behalf of the applicable
Portfolio at a rate agreed upon in writing, from time to time, by the
Custodian and the applicable Fund. The Custodian and each Fund
acknowledge that the purpose of such Overdrafts is to temporarily
finance the purchase or sale of securities for prompt delivery in
accordance with the terms hereof, or to meet emergency expenses not
reasonably foreseeable by such Fund. The Custodian shall promptly
notify each applicable Fund in writing (an "Overdraft Notice") of any
Overdraft by facsimile transmission or in such other manner as such
Fund and the Custodian may agree in writing. At the request of the
Custodian, each applicable Fund, on behalf of one or more of its
Portfolios, shall pledge, assign and grant to the Custodian a security
interest in certain specified securities of the applicable Portfolio,
as security for Overdrafts provided to such Portfolio, under the terms
and conditions set forth in Appendix "C" attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a written (including,
without limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by or on behalf of
the applicable Fund by one or more Authorized Persons (as hereinafter
defined); (ii) a telephonic or other oral communication by one or more
Authorized Persons; or (iii) a communication effected directly between
an electro-mechanical or electronic device or system (including,
without limitation, computers) by or on behalf of the applicable Fund
by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered
Proper Instructions only if the Custodian reasonably believes such
communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the applicable Fund by tested
telex or in writing in the manner set forth in clause (i) above, but
the lack of such confirmation shall in no way affect any action taken
by the Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Each Fund and the Custodian
are hereby authorized to record any and all telephonic or other oral
instructions communicated to the Custodian. Proper Instructions may
relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or
confirmed in writing by the Treasurer or any Assistant Treasurer of
the applicable Fund or any other person designated by the Treasurer of
such Fund in writing, which countersignature or confirmation shall be
(i) included on the same instrument containing the Proper Instructions
or on a separate instrument relating thereto, and (ii) delivered by
hand, by facsimile transmission, or in such other manner as the
applicable Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, telecopy or telex number
agreed upon from time to time by the Custodian and the applicable
Fund.
Section 3.02. Authorized Persons. Concurrently with the execution
of this Agreement and from time to time thereafter, as appropriate,
each Fund shall deliver to the Custodian, duly certified as
appropriate by a Treasurer or Assistant Treasurer of such Fund, a
certificate setting forth: (a) the names, titles, signatures and
scope of authority of all persons authorized to give Proper
Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of such Fund (collectively, the
"Authorized Persons" and individually, an "Authorized Person"); and
(b) the names, titles and signatures of those persons authorized to
issue Special Instructions. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect
until delivery to the Custodian of a similar certificate to the
contrary. Upon delivery of a certificate which deletes the name(s) of
a person previously authorized by a Fund to give Proper Instructions
or to issue Special Instructions, such persons shall no longer be
considered an Authorized Person or authorized to issue Special
Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement,
no Authorized Person, Trustee, officer, employee or agent of any Fund
shall have physical access to the assets of any Portfolio of that Fund
held by the Custodian nor shall the Custodian deliver any assets of a
Portfolio for delivery to an account of such person; provided,
however, that nothing in this Section 3.03 shall prohibit (a) any
Authorized Person from giving Proper Instructions, or any person
authorized to issue Special Instructions from issuing Special
Instructions, so long as such action does not result in delivery of or
access to assets of any Portfolio prohibited by this Section 3.03; or
(b) each Fund's independent certified public accountants from
examining or reviewing the assets of the Portfolios of the Fund held
by the Custodian. Each Fund shall deliver to the Custodian a written
certificate identifying such Authorized Persons, Trustees, officers,
employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian
acts in accordance with (a) Proper Instructions or Special
Instructions, as the case may be, and (b) the terms of this Agreement,
the Custodian shall not be responsible for the title, validity or
genuineness of any property, or evidence of title thereof, received by
it or delivered by it pursuant to this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic
Subcustodians, Foreign Subcustodians, Interim Subcustodians and
Special Subcustodians to act on behalf of a Portfolio. (For purposes
of this Agreement, all duly appointed Domestic Subcustodians, Foreign
Subcustodians, Interim Subcustodians, and Special Subcustodians are
hereinafter referred to collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any
time and from time to time, appoint any bank as defined in Section
2(a)(5) of the 1940 Act meeting the requirements of a custodian under
Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of one or more Portfolios as a
subcustodian for purposes of holding cash, securities and other assets
of such Portfolios and performing other functions of the Custodian
within the United States (a "Domestic Subcustodian"); provided, that,
the Custodian shall notify each applicable Fund in writing of the
identity and qualifications of any proposed Domestic Subcustodian at
least thirty (30) days prior to appointment of such Domestic
Subcustodian, and such Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of
the appointment of such Domestic Subcustodian. If, following notice
by the Custodian to each applicable Fund regarding appointment of a
Domestic Subcustodian and the expiration of thirty (30) days after the
date of such notice, such Fund shall have failed to notify the
Custodian of its disapproval thereof, the Custodian may, in its
discretion, appoint such proposed Domestic Subcustodian as its
subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from
time to time, appoint: (i) any bank, trust company or other entity
meeting the requirements of an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations thereunder
or by order of the Securities and Exchange Commission exempted
therefrom, or (ii) any bank as defined in Section 2(a)(5) of the 1940
Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder to act on behalf of
one or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian in countries other than the United States
of America (a "Foreign Subcustodian"); provided, that, prior to the
appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees
or other governing body or entity of each applicable Fund on behalf of
its applicable Portfolio(s) (which approval may be withheld in the
sole discretion of such Board of Trustees or other governing body or
entity) with respect to (i) the identity and qualifications of any
proposed Foreign Subcustodian, (ii) the country or countries in which,
and the securities depositories or clearing agencies, if any, through
which, any proposed Foreign Subcustodian is authorized to hold
securities and other assets of the applicable Portfolio(s), and (iii)
the form and terms of the subcustodian agreement to be entered into
between such proposed Foreign Subcustodian and the Custodian. Each
such duly approved Foreign Subcustodian and the countries where and
the securities depositories and clearing agencies through which they
may hold securities and other assets of the applicable Portfolios
shall be listed on Appendix "B" attached hereto, as it may be amended,
from time to time, in accordance with the provisions of Section
9.05(c) hereof. Each Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment by one of
its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be
sufficient time for the Custodian to effect the appropriate
arrangements with a proposed foreign subcustodian, including obtaining
approval as provided in this Section 4.02(a). The Custodian shall not
amend any subcustodian agreement entered into with a Foreign
Subcustodian, or agree to change or permit any changes thereunder, or
waive any rights under such agreement, which materially affect a
Fund's rights or the Foreign Subcustodian's obligations or duties to
a Fund under such agreement, except upon prior approval pursuant to
Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the
event that a Portfolio shall invest in a security or other asset to be
held in a country in which no Foreign Subcustodian is authorized to
act, the Custodian shall promptly notify the applicable Fund in
writing by facsimile transmission or in such other manner as such Fund
and Custodian shall agree in writing of the unavailability of an
approved Foreign Subcustodian in such country; and the Custodian
shall, upon receipt of Special Instructions, appoint any Person
designated by the applicable Fund in such Special Instructions to hold
such security or other asset. (Any Person appointed as a subcustodian
pursuant to this Section 4.02(b) is hereinafter referred to as an
"Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more
Portfolios, appoint one or more banks, trust companies or other
entities designated in such Special Instructions to act as a
subcustodian for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities through
the use of a common custodian or subcustodian; (ii) establishing a
joint trading account for the applicable Portfolio(s) and other
registered open-end management investment companies for which Fidelity
Management & Research Company serves as investment adviser, through
which such Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to
certain variable rate demand note securities; and (iv) effecting any
other transactions designated by each applicable Fund in Special
Instructions. (Each such designated subcustodian is hereinafter
referred to as a "Special Subcustodian.") Each such duly appointed
Special Subcustodian shall be listed on Appendix "B" attached hereto,
as it may be amended from time to time in accordance with the
provisions of Section 9.05(c) hereof. In connection with the
appointment of any Special Subcustodian, the Custodian shall enter
into a subcustodian agreement with the Special Subcustodian in form
and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940
Act and the rules and regulations thereunder and the terms and
provisions of this Agreement. The Custodian shall not amend any
subcustodian agreement entered into with a Special Subcustodian, or
agree to change or permit any changes thereunder, or waive any rights
under such agreement, except upon prior approval pursuant to Special
Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall
(i) cause each Domestic Subcustodian and Foreign Subcustodian to, and
(ii) use its best efforts to cause each Interim Subcustodian and
Special Subcustodian to, perform all of its obligations in accordance
with the terms and conditions of the subcustodian agreement between
the Custodian and such Subcustodian. In the event that the Custodian
is unable to cause such Subcustodian to fully perform its obligations
thereunder, the Custodian shall forthwith, upon the receipt of Special
Instructions, terminate such Subcustodian with respect to each
applicable Fund and, if necessary or desirable, appoint a replacement
Subcustodian in accordance with the provisions of Section 4.01 or
Section 4.02, as the case may be. In addition to the foregoing, the
Custodian (A) may, at any time in its discretion, upon written
notification to each applicable Fund, terminate any Domestic
Subcustodian, Foreign Subcustodian or Interim Subcustodian, and (B)
shall, upon receipt of Special Instructions, terminate any
Subcustodian with respect to each applicable Fund, in accordance with
the termination provisions under the applicable subcustodian
agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of a Fund, the Custodian shall deliver to such Fund a
certificate stating: (i) the identity of each Foreign Subcustodian
then acting on behalf of the Custodian for such Fund and its
Portfolios; (ii) the countries in which and the securities
depositories and clearing agents through which each such Foreign
Subcustodian is then holding cash, securities and other assets of any
Portfolio of such Fund; and (iii) such other information as may be
requested by such Fund to ensure compliance with Rule 17(f)-5 under
the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
reasonable care and diligence in carrying out all of its duties and
obligations under this Agreement, and shall be liable to each Fund for
all loss, damage and expense suffered or incurred by such Fund or its
Portfolios resulting from the failure of the Custodian to exercise
such reasonable care and diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any
Subcustodian or Securities System, or any subcustodian, securities
depository or securities system utilized by any such Subcustodian, or
any nominee of the Custodian or any Subcustodian (individually, a
"Person") is prevented, forbidden or delayed from performing, or omits
to perform, any act or thing which this Agreement provides shall be
performed or omitted to be performed, by reason of: (i) any provision
of any present or future law or regulation or order of the United
States of America, or any state thereof, or of any foreign country, or
political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar
circumstance beyond the control of the Custodian, unless, in each
case, such delay or nonperformance is caused by (A) the negligence,
misfeasance or misconduct of the applicable Person, or (B) a
malfunction or failure of equipment operated or utilized by the
applicable Person other than a malfunction or failure beyond such
Person's control and which could not reasonably be anticipated and/or
prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Fund or
Portfolio, (i) the Custodian shall, (ii) the Custodian shall cause any
applicable Domestic Subcustodian or Foreign Subcustodian to, and (iii)
the Custodian shall use its best efforts to cause any applicable
Interim Subcustodian or Special Subcustodian to, use all commercially
reasonable efforts and take all reasonable steps under the
circumstances to mitigate the effects of such event and to avoid
continuing harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive
and act upon advice of counsel on all matters. The Custodian shall be
without liability for any action reasonably taken or omitted in good
faith pursuant to the advice of (i) counsel for the applicable Fund or
Funds, or (ii) at the expense of the Custodian, such other counsel as
the applicable Fund(s) and the Custodian may agree upon; provided,
however, with respect to the performance of any action or omission of
any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in Section 5.01(a).
(e) Expenses of the Funds. In addition to the liability of the
Custodian under this Article V, the Custodian shall be liable to each
applicable Fund for all reasonable costs and expenses incurred by such
Fund in connection with any claim by such Fund against the Custodian
arising from the obligations of the Custodian hereunder, including,
without limitation, all reasonable attorneys' fees and expenses
incurred by such Fund in asserting any such claim, and all expenses
incurred by such Fund in connection with any investigations, lawsuits
or proceedings relating to such claim; provided, that such Fund has
recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no
liability in respect of any loss, damage or expense suffered by a
Fund, insofar as such loss, damage or expense arises from the
performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for such Fund
by entities other than the Custodian prior to the Custodian's
appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian
shall be liable for the actions or omissions of any Domestic
Subcustodian or any Foreign Subcustodian to the same extent as if such
action or omission were performed by the Custodian itself. In the
event of any loss, damage or expense suffered or incurred by a Fund
caused by or resulting from the actions or omissions of any Domestic
Subcustodian or Foreign Subcustodian for which the Custodian would
otherwise be liable, the Custodian shall promptly reimburse such Fund
in the amount of any such loss, damage or expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section
5.01 to the contrary, the Custodian shall not be liable to a Fund for
any loss, damage or expense suffered or incurred by such Fund or any
of its Portfolios resulting from the actions or omissions of an
Interim Subcustodian unless such loss, damage or expense is caused by,
or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, in the event of any such loss, damage or
expense, the Custodian shall take all reasonable steps to enforce such
rights as it may have against such Interim Subcustodian to protect the
interests of the Funds and the Portfolios.
(c) Special Subcustodians and Additional Custodians. Notwithstanding
the provisions of Section 5.01 to the contrary and except as otherwise
provided in any subcustodian agreement to which the Custodian, a Fund
and any Special Subcustodian or Additional Custodian are parties, the
Custodian shall not be liable to a Fund for any loss, damage or
expense suffered or incurred by such Fund or any of its Portfolios
resulting from the actions or omissions of a Special Subcustodian or
Additional Subcustodian, unless such loss, damage or expense is caused
by, or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, that in the event of any such loss,
damage or expense, the Custodian shall take all reasonable steps to
enforce such rights as it may have against any Special Subcustodian or
Additional Custodian to protect the interests of the Funds and the
Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section
5.01 to the contrary, the Custodian shall not be liable to a Fund for
any loss, damage or expense suffered or incurred by such Fund or any
of its Portfolios resulting from the use by the Custodian of a
Securities System, unless such loss, damage or expense is caused by,
or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, that in the event of any such loss,
damage or expense, the Custodian shall take all reasonable steps to
enforce such rights as it may have against the Securities System to
protect the interests of the Funds and the Portfolios.
(e) Reimbursement of Expenses. Each Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of
its obligations under this Section 5.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting
from the negligence, misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set
forth in this Agreement, each Fund severally and not jointly agrees to
indemnify and hold harmless the Custodian and its nominees from all
loss, damage and expense (including reasonable attorneys' fees)
suffered or incurred by the Custodian or its nominee caused by or
arising from actions taken by the Custodian on behalf of such Fund in
the performance of its duties and obligations under this Agreement;
provided, however, that such indemnity shall not apply to loss, damage
and expense occasioned by or resulting from the negligence,
misfeasance or misconduct of the Custodian or its nominee. In
addition, each Fund agrees severally and not jointly to indemnify any
Person against any liability incurred by reason of taxes assessed to
such Person, or other loss, damage or expenses incurred by such
Person, resulting from the fact that securities and other property of
such Fund's Portfolios are registered in the name of such Person;
provided, however, that in no event shall such indemnification be
applicable to income, franchise or similar taxes which may be imposed
or assessed against any Person.
(b) Notice of Litigation, Right to Prosecute, Etc. No Fund shall be
liable for indemnification under this Section 5.03 unless a Person
shall have promptly notified such Fund in writing of the commencement
of any litigation or proceeding brought against such Person in respect
of which indemnity may be sought under this Section 5.03. With
respect to claims in such litigation or proceedings for which
indemnity by a Fund may be sought and subject to applicable law and
the ruling of any court of competent jurisdiction, such Fund shall be
entitled to participate in any such litigation or proceeding and,
after written notice from such Fund to any Person, such Fund may
assume the defense of such litigation or proceeding with counsel of
its choice at its own expense in respect of that portion of the
litigation for which such Fund may be subject to an indemnification
obligation; provided, however, a Person shall be entitled to
participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if such Fund has not
acknowledged in writing its obligation to indemnify the Person with
respect to such litigation or proceeding. If such Fund is not
permitted to participate or control such litigation or proceeding
under applicable law or by a ruling of a court of competent
jurisdiction, such Person shall reasonably prosecute such litigation
or proceeding. A Person shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or
proceeding without providing each applicable Fund with adequate notice
of any such settlement or judgment, and without each such Fund's prior
written consent. All Persons shall submit written evidence to each
applicable Fund with respect to any cost or expense for which they are
seeking indemnification in such form and detail as such Fund may
reasonably request.
Section 5.04. Investment Limitations. If the Custodian has
otherwise complied with the terms and conditions of this Agreement in
performing its duties generally, and more particularly in connection
with the purchase, sale or exchange of securities made by or for a
Portfolio, the Custodian shall not be liable to the applicable Fund
and such Fund agrees to indemnify the Custodian and its nominees, for
any loss, damage or expense suffered or incurred by the Custodian and
its nominees arising out of any violation of any investment or other
limitation to which such Fund is subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to
the contrary contained herein, each Fund shall have, at its election
upon reasonable notice to the Custodian, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Custodian's rights against any Subcustodian, Securities System, or
other Person for loss, damage or expense caused such Fund by such
Subcustodian, Securities System, or other Person, and shall be
entitled to enforce the rights of the Custodian with respect to any
claim against such Subcustodian, Securities System or other Person,
which the Custodian may have as a consequence of any such loss, damage
or expense, if and to the extent that such Fund has not been made
whole for any such loss or damage. If the Custodian makes such Fund
whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon such Fund's election to
enforce any rights of the Custodian under this Section 5.05, such Fund
shall reasonably prosecute all actions and proceedings directly
relating to the rights of the Custodian in respect of the loss, damage
or expense incurred by such Fund; provided that, so long as such Fund
has acknowledged in writing its obligation to indemnify the Custodian
under Section 5.03 hereof with respect to such claim, such Fund shall
retain the right to settle, compromise and/or terminate any action or
proceeding in respect of the loss, damage or expense incurred by such
Fund without the Custodian's consent and provided further, that if
such Fund has not made an acknowledgement of its obligation to
indemnify, such Fund shall not settle, compromise or terminate any
such action or proceeding without the written consent of the
Custodian, which consent shall not be unreasonably withheld or
delayed. The Custodian agrees to cooperate with each Fund and take
all actions reasonably requested by such Fund in connection with such
Fund's enforcement of any rights of the Custodian. Each Fund agrees
to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of such Fund in connection with
the fulfillment of its obligations under this Section 5.05; provided,
however, that such reimbursement shall not apply to expenses
occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in
writing, from time to time, by the Custodian and such Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds.
With respect to each Fund, this Agreement shall continue in full force
and effect until the first to occur of: (a) termination by the
Custodian by an instrument in writing delivered or mailed to such
Fund, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; (b) termination by such Fund by an
instrument in writing delivered or mailed to the Custodian, such
termination to take effect not sooner than thirty (30) days after the
date of such delivery; or (c) termination by such Fund by written
notice delivered to the Custodian, based upon such Fund's
determination that there is a reasonable basis to conclude that the
Custodian is insolvent or that the financial condition of the
Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such
notice or at such later time as such Fund shall designate. In the
event of termination pursuant to this Section 7.01 by any Fund (a
"Terminating Fund"), each Terminating Fund shall make payment of all
accrued fees and unreimbursed expenses with respect to such
Terminating Fund within a reasonable time following termination and
delivery of a statement to the Terminating Fund setting forth such
fees and expenses. Each Terminating Fund shall identify in any notice
of termination a successor custodian or custodians to which the cash,
securities and other assets of its Portfolios shall, upon termination
of this Agreement with respect to such Terminating Fund, be delivered.
In the event that no written notice designating a successor custodian
shall have been delivered to the Custodian on or before the date when
termination of this Agreement as to a Terminating Fund shall become
effective, the Custodian may deliver to a bank or trust company doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities
and other assets of such Terminating Fund's Portfolios held by the
Custodian and all instruments held by the Custodian relative thereto
and all other property of the Terminating Fund's Portfolios held by
the Custodian under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian with respect to such
Terminating Fund under this Agreement. In the event that securities
and other assets of such Terminating Fund's Portfolios remain in the
possession of the Custodian after the date of termination hereof with
respect to such Terminating Fund owing to failure of the Terminating
Fund to appoint a successor custodian, the Custodian shall be entitled
to compensation for its services in accordance with the fee schedule
most recently in effect, for such period as the Custodian retains
possession of such securities and other assets, and the provisions of
this Agreement relating to the duties and obligations of the Custodian
and the Terminating Fund shall remain in full force and effect. In
the event of the appointment of a successor custodian, it is agreed
that the cash, securities and other property owned by a Terminating
Fund and held by the Custodian, any Subcustodian or nominee shall be
delivered to the successor custodian; and the Custodian agrees to
cooperate with such Terminating Fund in the execution of documents and
performance of other actions necessary or desirable in order to
substitute the successor custodian for the Custodian under this
Agreement.
Section 7.02. Termination as to One or More Portfolios. This
Agreement may be terminated as to one or more of a Fund's Portfolios
(but less than all of its Portfolios) by delivery of an amended
Appendix "A" deleting such Portfolios pursuant to Section 9.05(b)
hereof, in which case termination as to such deleted Portfolios shall
take effect thirty (30) days after the date of such delivery. The
execution and delivery of an amended Appendix "A" which deletes one or
more Portfolios shall constitute a termination of this Agreement only
with respect to such deleted Portfolio(s), shall be governed by the
preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other
assets of the Portfolio(s) so deleted, and shall not affect the
obligations of the Custodian and any Fund hereunder with respect to
the other Portfolios set forth in Appendix "A," as amended from time
to time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Terminating Fund 7.01
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in
connection with the performance by the Custodian or any Subcustodian
of their respective obligations to such Fund under this Agreement or
any applicable subcustodian agreement with respect to such Fund,
provided that the exercise by the Custodian or any Subcustodian of any
such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper
Instructions, all such documents, instruments or agreements as may be
reasonable and necessary or desirable in order to effectuate any of
the transactions contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A
COPY OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF
EACH FUND IS ON FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S
FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT
EXECUTED ON BEHALF OF THE TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE
OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE
TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY,
BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF EACH FUND'S
RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER,
TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD PERSONALLY LIABLE
OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING OUT OF THIS
AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios.
WITH RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS
PORTFOLIOS ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE OBLIGATIONS ARISING UNDER SECTIONS 2.28, 5.03, 5.05
and ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK FOR PAYMENT OR
SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND PROPERTY OF
THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAD
SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of Each Fund. Each Fund hereby
severally and not jointly represents and warrants that each of the
following shall be true, correct and complete with respect to each
Fund at all times during the term of this Agreement: (i) the Fund is
duly organized under the laws of its jurisdiction of organization and
is registered as an open-end management investment company under the
1940 Act; and (ii) the execution, delivery and performance by the Fund
of this Agreement are (w) within its power, (x) have been duly
authorized by all necessary action, and (y) will not (A) contribute to
or result in a breach of or default under or conflict with any
existing law, order, regulation or ruling of any governmental or
regulatory agency or authority, or (B) violate any provision of the
Fund's corporate charter, Declaration of Trust or other organizational
document, or bylaws, or any amendment thereof or any provision of its
most recent Prospectus or Statement of Additional Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to each Fund that each of the following
shall be true, correct and complete at all times during the term of
this Agreement: (i) the Custodian is duly organized under the laws of
its jurisdiction of organization and qualifies to act as a custodian
to open-end management investment companies under the provisions of
the 1940 Act; and (ii) the execution, delivery and performance by the
Custodian of this Agreement are (w) within its power, (x) have been
duly authorized by all necessary action, and (y) will not (A)
contribute to or result in a breach of or default under or conflict
with any existing law, order, regulation or ruling of any governmental
or regulatory agency or authority, or (B) violate any provision of the
Custodian's corporate charter, or other organizational document, or
bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the
entire understanding and agreement of the Fund, on the one hand, and
the Custodian, on the other, with respect to the subject matter hereof
and accordingly, supersedes as of the effective date of this Agreement
any custodian agreement heretofore in effect between each Fund and the
Custodian.
Section 9.06. Waivers and Amendments. No provision of this
Agreement may be waived, amended or terminated except by a statement
in writing signed by the party against which enforcement of such
waiver, amendment or termination is sought; provided, however: (a)
Appendix "A" listing the Portfolios of each Fund for which the
Custodian serves as custodian may be amended from time to time to add
one or more Portfolios for one or more Funds, by each applicable
Fund's execution and delivery to the Custodian of an amended Appendix
"A", and the execution of such amended Appendix by the Custodian, in
which case such amendment shall take effect immediately upon execution
by the Custodian; (b) Appendix "A" may be amended from time to time to
delete one or more Portfolios (but less than all of the Portfolios) of
one or more of the Funds, by each applicable Fund's execution and
delivery to the Custodian of an amended Appendix "A", in which case
such amendment shall take effect thirty (30) days after such delivery,
unless otherwise agreed by the Custodian and each applicable Fund in
writing; (c) Appendix "B" listing Foreign Subcustodians, Special
Subcustodians and Additional Custodians approved by any Fund may be
amended from time to time to add or delete one or more Foreign
Subcustodians, Special Subcustodians or Additional Custodians for a
Fund or Funds by each applicable Fund's execution and delivery to the
Custodian of an amended Appendix "B", in which case such amendment
shall take effect immediately upon execution by the Custodian; and (d)
Appendix "C" setting forth the procedures relating to the Custodian's
security interest with respect to each Fund may be amended only by an
instrument in writing executed by each applicable Fund and the
Custodian.
Section 9.07. Interpretation. In connection with the operation of
this Agreement, the Custodian and any Fund may agree in writing from
time to time on such provisions interpretative of or in addition to
the provisions of this Agreement with respect to such Fund as may in
their joint opinion be consistent with the general tenor of this
Agreement. No interpretative or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment
of this Agreement or affect any other Fund.
Section 9.08. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon
the interpretation of the terms of the Agreement or the obligations of
the parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities
pursuant to an agreement with a Foreign Subcustodian that is governed
by the laws of the State of New York, the provisions of this Agreement
shall be construed in accordance with and governed by the laws of the
State of New York, provided that in all other instances this Agreement
shall be construed in accordance with and governed by the laws of the
Commonwealth of Massachusetts, in each case without giving effect to
principles of conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission
(provided that in the case of delivery by facsimile transmission,
notice shall also be mailed postage prepaid to the parties at the
following addresses:
(a) If to any Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer of the Fidelity Funds
Telephone: (617) 563-7000
Telefax: (617) 476-4195
(b) If to the Custodian:
Brown Brothers Harriman & Company
40 Water Street
Boston, Massachusetts 02109
Attn: W. Casey Gildea, Assistant Manager
Telephone: (617) 772-1330
Telefax: (617) 772-2263
or to such other address as a Fund or the Custodian may have
designated in writing to the other.
Section 9.11. Assignment. This Agreement shall be binding on and
shall inure to the benefit of each Fund severally and the Custodian
and their respective successors and assigns, provided that, subject to
the provisions of Section 7.01 hereof, neither the Custodian nor any
Fund may assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other party.
Section 9.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
With respect to each Fund, this Agreement shall become effective when
one or more counterparts have been signed and delivered by such Fund
and the Custodian.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each
party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided
or thereafter becomes publicly available other than through a breach
of this Agreement, or that is required to be disclosed by any bank
examiner of the Custodian or any Subcustodian, any auditor of the
parties hereto, by judicial or administrative process or otherwise by
applicable law or regulation. The provisions of this Section 9.13 and
Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04, Section
7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above
written.
Each of the Investment Companies Listed on Brown Brothers Harriman &
Company
Appendix "A" Attached Hereto, on Behalf
of each of Their Respective Portfolios
[Signature Lines Omitted]
Exhibit 8(p)
Form of
Appendix "B"
To
Custodian Agreement
Between
Brown Brothers Harriman & Co. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of September 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
Bank of New York FICASH
FITERM
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A.;
(Citibank, N.A., New York Agt. 7/16/81 Central de Registracion y
New York Agreement Amendment 8/31/90) Liquidacion de Instrumentos
de Endeudamiento Publico (CRYL)
First National Bank of Boston, Buenos Aires
(First Nat. Bank of Boston Agreement 1/15/88
Omnibus Amendment 2/22/94)
Australia National Australia Bank Ltd., Melbourne Austraclear
Limited;
(National Australia Bank Agt. 5/1/85 Reserve Bank Information and
Agreement Amendment 2/13/92 Transfer System (RITS)
Omnibus Amendment 11/22/93)
Austria Creditanstalt-Bankverein, Vienna Oesterreichische
Kontrollbank
(Creditanstalt Bankverein Agreement 12/18/89 Aktiengesellschaft
(OEKB)
Omnibus Amendment 1/17/94)
Bahrain British Bank of the Middle East, Manama None
Bangladesh Standard Chartered Bank, Dhaka None
(Standard Chartered Bank Agreement 2/18/92)
Belgium Banque Bruxelles Lambert, Brussels Caisse
Interprofessionnelle de Depot
(Banque Bruxelles Lambert Agreement 11/15/90 et Virements de Titres
(CIK)
Omnibus Amendment 3/1/94)
Banque Nationale de Belgique (BNB)
Bostwana Barclays Bank of Bostwana Ltd., Gaborone None
(Barclays Bank Agreement 10/5/94)
Brazil First National Bank of Boston, Sao Paulo Sao Paulo Stock
Exchange
(First National Bank of Boston Agreement 1/5/88 (BOVESPA), Sistema
Especial de
Omnibus Amendment 2/22/94) Liquidacao e Custodia (SELIC);
Rio de Janeiro Exchange (BVRJ)
Canada Canadian Imperial Bank of Commerce, Toronto Canadian
Depository for Securities,
(Canadian Imperial Bank of Commerce Ltd., (CDS)
Agreement 9/9/88
Omnibus Amendment 12/1/93)
Royal Bank of Canada, Toronto Bank of Canada
Proposed Agreement
Chile Citibank, N.A., Santiago None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
China-Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing (Standard Chartered Bank Agreement 2/18/92) &
Registration Corporation (SSCCRC)
China-Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration (Standard Chartered Bank Agreement 2/18/92) Corp.
Ltd., (SSRC)
Colombia Cititrust Colombia , S.A., Sociedad Fiduciaria, Bogota None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank N.A. Subsidiary Amendment 10/19/95
Citibank N.A./Cititrust Colombia Agreement 12/2/91)
Czech Republic Ceskoslovenska Obchodni Banka, S.A., Prague Stredisko
Cennych Papiru (SCP)
(Ceskoslovenska Obchodni Banka Agreement 2/28/94)
Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen - VP Center
(Den Danske Bank Agreement 1/1/89
Omnibus Amendment 12/1/93)
Ecuador Citibank, N.A., Quito None
(Citibank, N.A. New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Quito Side Letter 7/3/95)
Egypt Citibank, N.A., Cairo Misr for Clearing, Settlement
(Citibank, N.A. New York Agreement 7/16/81 and Depository
New York Agreement Amendment 8/31/90)
Finland Merita Bank Ltd., Helsinki Central Share Register of
Finland Cooperative (CSR)
Helsinki Money Market Center, Ltd.
(HMMC)
Finnish Central Securities
Depository Ltd.
France Banque Paribas, Paris SICOVAM
Agreement 4/2/93) Banque de France
Germany Dresdner Bank AG, Frankfurt Deutscher Kassenverein AG (DKV)
(Dresdner Bank Agreement 10/6/95)
Ghana Barclays Bank of Ghana Ltd., Accra None
(Barclays Bank Agreement 10/5/94)
Greece Citibank, N.A., Athens Apothetirion Titlon A.E.
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Hong Kong The Hongkong & Shanghai Banking Hong Kong Securities
Clearing Co. Corp., Ltd., Hong Kong Ltd. (HKSCC);
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91 Central Clearing and
Omnibus Supplement 12/29/93) Settlement System (CCASS)
Hungary Citibank Budapest, Rt. Central Depository and Clearing
(Citibank N.A., New York Agreement 7/16/81 House (Budapest) Ltd.,
New York Agreement Amendment 8/31/90 (KELER Ltd.)
Citibank N.A. Subsidiary Amendment 10/19/95
Citibank N.A./Citibank Budapest Agmt. 1/24/92
(amended 6/23/92 and 9/29/92))
India Citibank, N.A., Mumbai National Securities Depository Limted
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Mumbai Amendment 11/17/93)
Standard Chartered Bank, Mumbai
(Standard Chartered Bank Agreement 2/18/92
SCB, Mumbai Annexure and Side Letter 7/18/94)
Indonesia Citibank, N.A., Jakarta None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)
(Allied Irish Banks Agreement 1/10/89
Omnibus Amendment 4/8/94) CREST
Israel Bank Hapoalim, B.M. Tel-Aviv Stock Exchange
(Bank Hapoalim Agreement 8/27/92) (TASE) Clearinghouse Ltd.
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.
(Banca Commerciale Italiana Agreement 5/8/89
Agreement Amendment 10/8/93 Banca D'Italia
Omnibus Amendment 12/14/93)
Japan Sumitomo Trust & Banking Co., Tokyo Japan Securities Depository
Center
(Sumitomo Trust & Banking Agreement 7/17/92 (JASDEC)
Omnibus Amendment 1/13/94); Bank of Japan
Jordan Arab Bank, plc, Amman None
(Arab Bank Agreement 4/5/95
Kenya Barclays Bank of Kenya Ltd., Nairobi None
(Barclays Bank Agreement 10/5/94)
Lebanon British Bank of the Middle East, Beirut Midclear
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository
Sdn. (Hongkong & Shanghai Banking Corp. Agt. 4/19/91 Bhd. (MCD)
Omnibus Supplement 12/29/93
Malaysia Subsidiary Supplement 5/23/94) Bank Negara Malaysia
Mauritius Hongkong & Shanghai Banking Corp., Ltd., Central Depository
& Settlement Co., Port Louis Ltd.
Mexico Citibank Mexico, S.A., Mexico City Institucion para el
Deposito de
(Citibank N.A., New York Agreement 7/16/81 Valores- S.D. INDEVAL,
S.A. de New York Agreement Amendment 8/31/90 C.V.
Citibank, Mexico, S.A. Amendment 2/7/95)
Banco de Mexico
Morocco Banque Marocaine du Commerce Exterieur, None
Casablanca
(BMCE Agreement 7/6/94)
Namibia Standard Bank Namibia Ltd., Windhoek None
Netherlands ABN-AMRO, Bank N. V., Amsterdam Nederlands Centraal
Instituut voor Giraal Effektenverkeer BV (NECIGEF)/KAS
Associatie N.V. (ABN-AMRO Agreement 12/19/88) (KAS)
De Nederlandsche Bank (DNB)New New Zealand National Australia Bank
Ltd., Melbourne Reserve Bank of New Zealand
(RBNZ)
(National Australia Bank Agreement 5/1/85
Agreement Amendment 2/13/92 New Zealand Securities
Omnibus Amendment 11/22/93 Depository Limited (NZCDS)
New Zealand Addendum 3/7/89)
Norway Den norske Bank ASA, Oslo Verdipapirsentralen (VPS)
(Den norske Bank Agreement 11/16/94)
Oman British Bank of the Middle East, Muscat Muscat Securities Market
Pakistan Standard Chartered Bank, Karachi None
(Standard Chartered Bank Agreement 2/18/92)
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Philippines Citibank, N.A., Manila The Philippines Central
Depository, (Citibank N.A., New York Agreement 7/16/81 Inc.
New York Agreement Amendment 8/31/90)
Poland Citibank Poland, S.A. National Depository of Securities
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90 National Bank of Poland
Citibank Subsidiary Amendment 10/19/95
Citibank, N.A./Citibank Poland S.A. Agt. 11/6/92)
Bank Polska Kasa Opieki S.A., Warsaw
Portugal Banco Espirito Santo e Comercial Central de Valores
Mobiliaros
de Lisboa, S.A., Lisbon (Interbolsa)
(BESCL Agreement 4/26/89
Omnibus Amendment 2/23/94)
Singapore Hongkong & Shanghai Banking Central Depository Pte Ltd.
(CDP)
Corp., Ltd., Singapore
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Slovak Republic Ceskoslovenska Obchodna Banka, S.A., Bratislava
Stredisko Cennych Papeirov (SCP)
(Ceskoslovenska Obchodna Banka Agmt. 10/12/94)
National Bank of Slovakia
South Africa First National Bank of Southern Africa Ltd., The Central
Depository (Pty) Ltd. Johannesburg (CD)
(First National Bank of Southern Africa Agmt. 8/7/91)
South Korea Citibank, N.A., Seoul Korean Securities Depository (KSD)
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Seoul Agreement Supplement 10/28/94)
Spain Banco Santander S.A., Madrid Servicio de Compensacion y
(Banco Santander Agreement 12/14/88) Liquidacion de Valores (SCLV)
Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Corp. Ltd., Central Depository
System (Pvt) Colombo Limited (CDS)
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Swaziland Barclays Bank of Swaziland Ltd., Mbabne None
(Barclays Bank Agreement 10/5/94)
Sweden Skandinaviska Enskilda Banken, Stockholm Vardepappercentralen
VPC AB
(Skandinaviska Enskilda Banken Agreement 2/20/89
Omnibus Amendment 12/3/93)
Switzerland Swiss Bank Corporation, Basel Schweizerische Effekten -
Giro A.G.
(Swiss Bank Corporation Agreement 3/1/94) (SEGA)
Taiwan Standard Chartered Bank, Taipei Taiwan Securities Central
Depository (Standard Chartered Bank Agmt. 2/18/92) Co. Ltd. (TSCD)
Thailand Hongkong & Shanghai Banking Corp. Ltd., Thailand Securities
Depository
Bangkok Company (TSD)
(Hongkong & Shanghai Banking Corp. Agmt. 4/19/91
Omnibus Amendment 12/29/93)
Transnational Cedel Bank Societe
Anonyme, Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Citibank, N.A., Istanbul Takas ve Saklama Bankasi A.S. (TvS)
(Citibank N.A., New York Agmt. 7/16/81
New York Agmt. Amendment 8/31/90) Central Bank of Turkey (CBT)
United Kingdom Lloyds Bank PLC, London Central Gilts Office (CGO);
CREST;
Central Money Markets Office
(CMO)
Uruguay First National Bank of Boston, Montevideo None
Venezuela Citibank, N.A., Caracas None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Zambia Stanbic Bank Zambia Ltd., Lusaka Lusaka Central Depository
Zimbabwe Stanbic Bank Zimbabwe Ltd., Harare None
Each of the Investment Companies Listed on Appendix "A" to the
Custodian Agreement,
on Behalf of Each of Their Respective Portfolios
[Signature Lines Omitted]
Exhibit 8(p)
Form of
Appendix "C" to the
Custodian Agreement
Between
Each of the Investment Companies
Listed on Appendix "A" Thereto
And
BROWN BROTHERS HARRIMAN & COMPANY
Dated as of _______
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian
Agreement) of any Portfolio, the applicable Fund, on behalf of such
Portfolio, shall pledge, assign and grant to the Custodian a security
interest in Collateral (as hereinafter defined), under the terms,
circumstances and conditions set forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the
following terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio,
securities held by the Custodian on behalf of the Portfolio having a
fair market value (as determined in accordance with the procedures set
forth in the prospectus for the Portfolio) equal to the aggregate of
all Overdraft Obligations of such Portfolio: (i) identified in any
Pledge Certificate executed on behalf of such Portfolio; or (ii)
designated by the Custodian for such Portfolio pursuant to Section 3
of this Appendix C. Such securities shall consist of marketable
securities held by the Custodian on behalf of such Portfolio or, if no
such marketable securities are held by the Custodian on behalf of such
Portfolio, such other securities designated by the applicable Fund in
the applicable Pledge Certificate or by the Custodian pursuant to
Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any
Portfolio, the amount of any outstanding Overdraft(s) provided by the
Custodian to such Portfolio together with all accrued interest
thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly
authorized officer of the applicable Fund and delivered by such Fund
to the Custodian by facsimile transmission or in such other manner as
the applicable Fund and the Custodian may agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the
form attached to this Appendix "C" as Schedule 2 executed by a duly
authorized officer of the Custodian and delivered by the Custodian to
the applicable Fund by facsimile transmission or in such other manner
as such Fund and the Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the applicable Fund
and the Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business
on the first Business Day following the Business Day on which the
applicable Fund receives Written Notice requesting security for such
Overdraft Obligation and stating the amount of such Overdraft
Obligation, the applicable Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a first priority security
interest, by delivering to the Custodian, a Pledge Certificate
executed by such Fund on behalf of such Portfolio describing the
applicable Collateral. Such Written Notice may, in the discretion of
the Custodian, be included within or accompany the Overdraft Notice
relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the
applicable Fund shall fail: (a) to pay, on behalf of the applicable
Portfolio, the Overdraft Obligation described in such Written Notice;
(b) to deliver to the Custodian a Pledge Certificate pursuant to
Section 2; or (c) to identify substitute securities pursuant to
Section 6 upon the sale or maturity of any securities identified as
Collateral, the Custodian may, by Written Notice to the applicable
Fund specify Collateral which shall secure the applicable Overdraft
Obligation. Such Fund, on behalf of any applicable Portfolio, hereby
pledges, assigns and grants to the Custodian a first priority security
interest in any and all Collateral specified in such Written Notice;
provided that such pledge, assignment and grant of security shall be
deemed to be effective only upon receipt by the applicable Fund of
such Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify a Fund by Written Notice that the fair market
value of the Collateral securing any Overdraft Obligation of one of
such Fund's Portfolios is less than the amount of such Overdraft
Obligation, such Fund, on behalf of the applicable Portfolio, shall
deliver to the Custodian, within one (1) Business Day following the
Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If such Fund shall fail
to deliver such additional Pledge Certificate, the Custodian may
specify Collateral which shall secure the unsecured amount of the
applicable Overdraft Obligation in accordance with Section 3 of this
Appendix C.
Section 5. Release of Collateral. Upon payment by a Fund, on behalf
of one of its Portfolios, of any Overdraft Obligation secured by the
pledge of Collateral, the Custodian shall promptly deliver to such
Fund a Release Certificate pursuant to which the Custodian shall
release Collateral from the lien under the applicable Pledge
Certificate or Written Notice pursuant to Section 3 having a fair
market value equal to the amount paid by such Fund on account of such
Overdraft Obligation. In addition, if at any time a Fund shall notify
the Custodian by Written Notice that such Fund desires that specified
Collateral be released and: (a) that the fair market value of the
Collateral securing any Overdraft Obligation shall exceed the amount
of such Overdraft Obligation; or (b) that the Fund has delivered a
Pledge Certificate substituting Collateral for such Overdraft
Obligation, the Custodian shall deliver to such Fund, within one (1)
Business Day following the Custodian's receipt of such Written Notice,
a Release Certificate relating to the Collateral specified in such
Written Notice.
Section 6. Substitution of Collateral. A Fund may substitute
securities for any securities identified as Collateral by delivery to
the Custodian of a Pledge Certificate executed by such Fund on behalf
of the applicable Portfolio, indicating the securities pledged as
Collateral.
Section 7. Security for Individual Portfolios' Overdraft
Obligations. The pledge of Collateral by a Fund on behalf of any of
its individual Portfolios shall secure only the Overdraft Obligations
of such Portfolio. In no event shall the pledge of Collateral by one
of a Fund's Portfolios be deemed or considered to be security for the
Overdraft Obligations of any other Portfolio of such Fund or of any
other Fund.
Section 8. Custodian's Remedies. Upon (a) a Fund's failure to pay
any Overdraft Obligation of an applicable Portfolio within thirty (30)
days after receipt by such Fund of a Written Notice demanding security
therefore, and (b) one (1) Business Day's prior Written Notice to such
Fund, the Custodian may elect to enforce its security interest in the
Collateral securing such Overdraft Obligation, by taking title to (at
the then prevailing fair market value), or selling in a commercially
reasonable manner, so much of the Collateral as shall be required to
pay such Overdraft Obligation in full. Notwithstanding the provisions
of any applicable law, including, without limitation, the Uniform
Commercial Code, the remedy set forth in the preceding sentence shall
be the only right or remedy to which the Custodian is entitled with
respect to the pledge and security interest granted pursuant to any
Pledge Certificate or Section 3. Without limiting the foregoing, the
Custodian hereby waives and relinquishes all contractual and common
law rights of set off to which it may now or hereafter be or become
entitled with respect to any obligations of any Fund to the Custodian
arising under this Appendix "C" to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to
be executed in its name and behalf on the day and year first above
written.
Each of the Investment Companies Listed on BROWN BROTHERS HARRIMAN &
Schedule "A" to the Custodian Agreement, on COMPANY
Behalf of Each of Their Respective Portfolios
[Signature lines omitted]
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian
Agreement dated as of [ ] (the "Agreement"), between [
] (the "Fund") and [ ] (the "Custodian"). Capitalized terms
used herein without definition shall have the respective meanings
ascribed to them in the Agreement. Pursuant to [Section 2 or Section
4] of Appendix "C" attached to the Agreement, the Fund, on behalf of [
] (the "Portfolio"), hereby pledges, assigns and grants to the
Custodian a first priority security interest in the securities listed
on Exhibit "A" attached to this Pledge Certificate (collectively, the
"Pledged Securities"). Upon delivery of this Pledge Certificate, the
Pledged Securities shall constitute Collateral, and shall secure all
Overdraft Obligations of the Portfolio described in that certain
Written Notice dated , 19 , delivered by the Custodian to
the Fund. The pledge, assignment and grant of security in the Pledged
Securities hereunder shall be subject in all respect to the terms and
conditions of the Agreement, including, without limitation, Sections 7
and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of
19 .
[FUND], on Behalf of [Portfolio]
By: ___________________
Name: ___________________
Title: ___________________
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian
Agreement dated as of [ ] (the "Agreement"), between [
] (the "Fund") and [ ] (the "Custodian"). Capitalized terms
used herein without definition shall have the respective meanings
ascribed to them in the Agreement. Pursuant to Section 5 of Appendix
"C" attached to the Agreement, the Custodian hereby releases the
securities listed on Exhibit "A" attached to this Release Certificate
from the lien under the [Pledge Certificate dated ___________, 19 or
the Written Notice delivered pursuant to Section 3 of Appendix "C"
dated _________, 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate
to be executed in its name and on its behalf this day of 19 .
BROWN BROTHERS HARRIMAN & COMPANY
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
Exhibit 11(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the
Prospectus and Statement of
Additional Information in Post-Effective Amendment No. 64 to the
Registration Statement on Form N-1A of Fidelity Select Portfolios, of
our report dated April 13, 1998, on the financial statements and
financial highlights included in the February 28, 1998 Annual Report
to
Shareholders of Fidelity Select Portfolios.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the
Statement of Additional Information.
/s/Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
April 24, 1998
Exhibit 11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our Firm under the heading
"Auditor" in the Statement of Additional Information of Fidelity
Select Portfolios: Medical Equipment and Systems Portfolio which is
included in Post-Effective Amendment No. 64 to the Registration
Statement on Form N-1A.
/s/Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
April 24, 1998
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Fidelity Select Portfolios
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<NAME> Select-Computer
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<INVESTMENTS-AT-VALUE> 832,617
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<TOTAL-ASSETS> 840,999
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<TOTAL-LIABILITIES> 55,534
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<PAID-IN-CAPITAL-COMMON> 727,677
<SHARES-COMMON-STOCK> 19,119
<SHARES-COMMON-PRIOR> 12,524
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<ACCUMULATED-NET-GAINS> (38,789)
<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 697
<INTEREST-INCOME> 3,748
<OTHER-INCOME> 0
<EXPENSES-NET> 8,821
<NET-INVESTMENT-INCOME> (4,376)
<REALIZED-GAINS-CURRENT> 89,255
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<NET-CHANGE-FROM-OPS> 107,125
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<PER-SHARE-NAV-BEGIN> 48.250
<PER-SHARE-NII> (.320)
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 12
<NAME> Select-Electronics
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<INVESTMENTS-AT-VALUE> 2,633,473
<RECEIVABLES> 146,134
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<PAID-IN-CAPITAL-COMMON> 2,565,018
<SHARES-COMMON-STOCK> 76,270
<SHARES-COMMON-PRIOR> 45,957
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (155,399)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 259,131
<NET-ASSETS> 2,668,750
<DIVIDEND-INCOME> 2,695
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<OTHER-INCOME> 0
<EXPENSES-NET> 26,568
<NET-INVESTMENT-INCOME> (10,090)
<REALIZED-GAINS-CURRENT> 286,757
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<INTEREST-EXPENSE> 3
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<AVERAGE-NET-ASSETS> 2,374,587
<PER-SHARE-NAV-BEGIN> 37.950
<PER-SHARE-NII> (.170)
<PER-SHARE-GAIN-APPREC> 7.320
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<PER-SHARE-DISTRIBUTIONS> 10.200
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 34.990
<EXPENSE-RATIO> 118
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 13
<NAME> Select-Food and Agriculture
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 223,904
<INVESTMENTS-AT-VALUE> 262,300
<RECEIVABLES> 3,920
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 266,220
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<OTHER-ITEMS-LIABILITIES> 10,599
<TOTAL-LIABILITIES> 15,653
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 192,819
<SHARES-COMMON-STOCK> 5,133
<SHARES-COMMON-PRIOR> 5,017
<ACCUMULATED-NII-CURRENT> 368
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18,984
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38,396
<NET-ASSETS> 250,567
<DIVIDEND-INCOME> 4,381
<INTEREST-INCOME> 1,063
<OTHER-INCOME> 0
<EXPENSES-NET> 3,649
<NET-INVESTMENT-INCOME> 1,795
<REALIZED-GAINS-CURRENT> 33,787
<APPREC-INCREASE-CURRENT> 14,340
<NET-CHANGE-FROM-OPS> 49,922
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<DISTRIBUTIONS-OF-INCOME> 2,133
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<NUMBER-OF-SHARES-SOLD> 4,610
<NUMBER-OF-SHARES-REDEEMED> 5,169
<SHARES-REINVESTED> 675
<NET-CHANGE-IN-ASSETS> 27,144
<ACCUMULATED-NII-PRIOR> 1,615
<ACCUMULATED-GAINS-PRIOR> 30,116
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,473
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<GROSS-EXPENSE> 3,677
<AVERAGE-NET-ASSETS> 246,984
<PER-SHARE-NAV-BEGIN> 44.530
<PER-SHARE-NII> .330
<PER-SHARE-GAIN-APPREC> 9.220
<PER-SHARE-DIVIDEND> .370
<PER-SHARE-DISTRIBUTIONS> 4.950
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<PER-SHARE-NAV-END> 48.810
<EXPENSE-RATIO> 149
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 14
<NAME> Select-Software and Computers
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 398,573
<INVESTMENTS-AT-VALUE> 510,702
<RECEIVABLES> 4,089
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 514,791
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<OTHER-ITEMS-LIABILITIES> 5,342
<TOTAL-LIABILITIES> 11,424
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 383,218
<SHARES-COMMON-STOCK> 11,373
<SHARES-COMMON-PRIOR> 10,100
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,019
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 112,130
<NET-ASSETS> 503,367
<DIVIDEND-INCOME> 314
<INTEREST-INCOME> 2,361
<OTHER-INCOME> 0
<EXPENSES-NET> 6,193
<NET-INVESTMENT-INCOME> (3,518)
<REALIZED-GAINS-CURRENT> 56,333
<APPREC-INCREASE-CURRENT> 76,776
<NET-CHANGE-FROM-OPS> 129,591
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 67,011
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,972
<NUMBER-OF-SHARES-REDEEMED> 7,437
<SHARES-REINVESTED> 1,737
<NET-CHANGE-IN-ASSETS> 113,668
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 35,456
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,594
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,258
<AVERAGE-NET-ASSETS> 434,939
<PER-SHARE-NAV-BEGIN> 38.580
<PER-SHARE-NII> (.330)
<PER-SHARE-GAIN-APPREC> 12.570
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<PER-SHARE-DISTRIBUTIONS> 6.610
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 44.260
<EXPENSE-RATIO> 144
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 15
<NAME> Select-Telecommunication
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 612,427
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<TOTAL-ASSETS> 722,977
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<TOTAL-LIABILITIES> 79,528
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 503,574
<SHARES-COMMON-STOCK> 12,057
<SHARES-COMMON-PRIOR> 9,296
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 38,929
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 100,946
<NET-ASSETS> 643,449
<DIVIDEND-INCOME> 2,101
<INTEREST-INCOME> 1,808
<OTHER-INCOME> 0
<EXPENSES-NET> 6,117
<NET-INVESTMENT-INCOME> (2,208)
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<NET-CHANGE-FROM-OPS> 163,192
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<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,067
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<SHARES-REINVESTED> 1,267
<NET-CHANGE-IN-ASSETS> 254,914
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<ACCUMULATED-GAINS-PRIOR> 16,538
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<GROSS-ADVISORY-FEES> 2,473
<INTEREST-EXPENSE> 5
<GROSS-EXPENSE> 6,239
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<PER-SHARE-NAV-BEGIN> 41.800
<PER-SHARE-NII> (.250)
<PER-SHARE-GAIN-APPREC> 18.200
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 6.440
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<PER-SHARE-NAV-END> 53.370
<EXPENSE-RATIO> 151
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 16
<NAME> Select-Money Market
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 631,702
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 676,185
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<TOTAL-LIABILITIES> 91,266
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 584,925
<SHARES-COMMON-STOCK> 584,907
<SHARES-COMMON-PRIOR> 848,150
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 584,919
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46,435
<OTHER-INCOME> 0
<EXPENSES-NET> 4,593
<NET-INVESTMENT-INCOME> 41,842
<REALIZED-GAINS-CURRENT> (6)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 41,836
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<DISTRIBUTIONS-OF-INCOME> 41,842
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<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,445,370
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<SHARES-REINVESTED> 38,682
<NET-CHANGE-IN-ASSETS> (263,249)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 13
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,715
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,597
<AVERAGE-NET-ASSETS> 816,300
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .051
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<PER-SHARE-DIVIDEND> .051
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 17
<NAME> Select-Air Transportation
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 168,268
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<RECEIVABLES> 2,539
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<PAYABLE-FOR-SECURITIES> 1,644
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<TOTAL-LIABILITIES> 5,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 161,980
<SHARES-COMMON-STOCK> 6,745
<SHARES-COMMON-PRIOR> 2,029
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,118
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,087
<NET-ASSETS> 181,185
<DIVIDEND-INCOME> 346
<INTEREST-INCOME> 295
<OTHER-INCOME> 0
<EXPENSES-NET> 1,170
<NET-INVESTMENT-INCOME> (529)
<REALIZED-GAINS-CURRENT> 13,099
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<SHARES-REINVESTED> 154
<NET-CHANGE-IN-ASSETS> 145,228
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<ACCUMULATED-GAINS-PRIOR> (4,907)
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<GROSS-EXPENSE> 1,209
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<PER-SHARE-NAV-BEGIN> 17.720
<PER-SHARE-NII> (.190)
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<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 18
<NAME> Select-American Gold
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<PAID-IN-CAPITAL-COMMON> 304,961
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<SHARES-COMMON-PRIOR> 15,178
<ACCUMULATED-NII-CURRENT> (2,671)
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<ACCUMULATED-NET-GAINS> (45,235)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,387)
<NET-ASSETS> 219,668
<DIVIDEND-INCOME> 1,628
<INTEREST-INCOME> 628
<OTHER-INCOME> 0
<EXPENSES-NET> 4,135
<NET-INVESTMENT-INCOME> (1,879)
<REALIZED-GAINS-CURRENT> (42,332)
<APPREC-INCREASE-CURRENT> (126,678)
<NET-CHANGE-FROM-OPS> (170,889)
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<DISTRIBUTIONS-OF-GAINS> 17,386
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<NUMBER-OF-SHARES-SOLD> 26,656
<NUMBER-OF-SHARES-REDEEMED> 28,112
<SHARES-REINVESTED> 755
<NET-CHANGE-IN-ASSETS> (208,435)
<ACCUMULATED-NII-PRIOR> (3,491)
<ACCUMULATED-GAINS-PRIOR> 17,274
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<GROSS-ADVISORY-FEES> 1,664
<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 4,346
<AVERAGE-NET-ASSETS> 279,513
<PER-SHARE-NAV-BEGIN> 28.210
<PER-SHARE-NII> (.130)
<PER-SHARE-GAIN-APPREC> (11.780)
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<PER-SHARE-DISTRIBUTIONS> 1.290
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<PER-SHARE-NAV-END> 15.170
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<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 19
<NAME> Select-Biotechnology
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 480,071
<SHARES-COMMON-STOCK> 16,786
<SHARES-COMMON-PRIOR> 19,712
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 66,886
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,585
<NET-ASSETS> 579,542
<DIVIDEND-INCOME> 1,211
<INTEREST-INCOME> 2,650
<OTHER-INCOME> 0
<EXPENSES-NET> 8,510
<NET-INVESTMENT-INCOME> (4,649)
<REALIZED-GAINS-CURRENT> 136,618
<APPREC-INCREASE-CURRENT> (59,882)
<NET-CHANGE-FROM-OPS> 72,087
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<DISTRIBUTIONS-OF-GAINS> 74,817
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,542
<NUMBER-OF-SHARES-REDEEMED> 15,773
<SHARES-REINVESTED> 2,305
<NET-CHANGE-IN-ASSETS> (95,360)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 46,923
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,442
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,608
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<PER-SHARE-NAV-BEGIN> 34.240
<PER-SHARE-NII> (.270)
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<PER-SHARE-DISTRIBUTIONS> 4.710
<RETURNS-OF-CAPITAL> 0
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 20
<NAME> Select Energy Services
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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[ARTICLE] 6
[CIK] 0000320351
[NAME] Fidelity Select Portfolios
[SERIES]
[NUMBER] 22
[NAME] Select-Insurance
[MULTIPLIER] 1,000
<TABLE>
<S>
<C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] FEB-28-1998
[PERIOD-END] FEB-28-1998
[INVESTMENTS-AT-COST] 107,099
[INVESTMENTS-AT-VALUE] 126,968
[RECEIVABLES] 1,267
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 128,235
[PAYABLE-FOR-SECURITIES] 2,511
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 573
[TOTAL-LIABILITIES] 3,084
[SENIOR-EQUITY] 0
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[SHARES-COMMON-STOCK] 2,973
[SHARES-COMMON-PRIOR] 1,299
[ACCUMULATED-NII-CURRENT] 27
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 18,043
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 19,870
[NET-ASSETS] 125,151
[DIVIDEND-INCOME] 1,168
[INTEREST-INCOME] 439
[OTHER-INCOME] 0
[EXPENSES-NET] 1,582
[NET-INVESTMENT-INCOME] 25
[REALIZED-GAINS-CURRENT] 23,085
[APPREC-INCREASE-CURRENT] 14,487
[NET-CHANGE-FROM-OPS] 37,597
[EQUALIZATION] 0
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[DISTRIBUTIONS-OF-GAINS] 6,676
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 6,761
[NUMBER-OF-SHARES-REDEEMED] 5,273
[SHARES-REINVESTED] 186
[NET-CHANGE-IN-ASSETS] 82,784
[ACCUMULATED-NII-PRIOR] 6
[ACCUMULATED-GAINS-PRIOR] 4,125
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 657
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,605
[AVERAGE-NET-ASSETS] 110,448
[PER-SHARE-NAV-BEGIN] 32.620
[PER-SHARE-NII] .010
[PER-SHARE-GAIN-APPREC] 12.930
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 3.540
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 42.100
[EXPENSE-RATIO] 145
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 23
<NAME> Select-Retailing
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> FEB-28-1998
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<NET-INVESTMENT-INCOME> (1,019)
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<PER-SHARE-NII> (.270)
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 24
<NAME> Select-Home Finance
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<PER-SHARE-NII> .330
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 26
<NAME> Select-Automotive
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<OVERDISTRIBUTION-GAINS> 0
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<APPREC-INCREASE-CURRENT> (2,221)
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<NET-CHANGE-IN-ASSETS> (53,858)
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<GROSS-EXPENSE> 995
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<PER-SHARE-NII> .050
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 27
<NAME> Select-Multimedia
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
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<GROSS-EXPENSE> 1,031
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<PER-SHARE-NII> (.170)
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 28
<NAME> Select-Industrial Equipment
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> FEB-28-1998
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 30
<NAME> Select-Medical Delivery
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 31
<NAME> Select-Construction and Housing
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> YEAR
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<NAME> Fidelity Select Portfolios
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<NAME> Select-Industrial Materials
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<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 33
<NAME> Select-Paper and Forest Products
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 34
<NAME> Select-Regional Banks
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<C>
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<TABLE> <S> <C>
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 36
<NAME> Select-Transportation
<MULTIPLIER> 1,000
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<C>
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<TABLE> <S> <C>
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 37
<NAME> Select-Environmental
<MULTIPLIER> 1,000
<S>
<C>
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<PERIOD-END> FEB-28-1998
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 38
<NAME> Select-Consumer Products
<MULTIPLIER> 1,000
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<C>
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 39
<NAME> Select-Developing Communication
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<C>
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 40
<NAME> Select-Natural Gas
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<C>
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<TABLE> <S> <C>
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<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 41
<NAME> Select-Cyclical Industries
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<C>
<PERIOD-TYPE> YEAR
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<GROSS-EXPENSE> 184
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<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> (.110)
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320351
<NAME> Fidelity Select Portfolios
<SERIES>
<NUMBER> 42
<NAME> Select-Natural Resources
<MULTIPLIER> 1,000
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