SUPPLEMENT TO THE FIDELITY SELECT
PORTFOLIOS(registered trademark) APRIL 28, 1998 PROSPECTUS
The following information updates the similar information on the cover
of the prospectus:
TRADING SYMBOL
MEDICAL EQUIPMENT AND SYSTEMS PORTFOLIO FSMEX
MONE Y MARKET PORTFOLIO FSLXX
AMERICAN GOLD PORTFOLIO HAS CHANGED ITS NAME TO "GOLD PORTFOLIO."
References in the prospectus to "American Gold Portfolio" are each
hereby replaced by "Gold Portfolio" and references to "American Gold"
are each hereby replaced by "Gold."
The following information replaces the similar information found under
the heading "The Funds at a Glance" beginning on page P-3:
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 the stock funds.
The following information replaces the similar information found under
the heading "FMR and Its Affiliates" found on page P-38:
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. FIMM, located in
Merrimack, New Hampshire has primary responsibility for providing
investment management services for the money market fund.
Matthew Grech is manager of Electronics, which he has managed since
June 1998. Mr. Grech joined Fidelity as an equity analyst, after
receiving his MBA from the University of Chicago in 1996. Previously,
he was a mutual fund accountant for Franklin/Templeton, in California,
from 1993 to 1994.
Peter Hirsch is manager of Industrial Materials, which he has
managed since September 1998. Mr. Hirsch joined Fidelity in 1995 as a
portfolio analyst. He received his Masters in Public and Private
Management (MPPM) at Yale School of Management in 1994 and began his
career as an associate at CS First Boston in New York.
Andrew Kaplan is manager of Developing Communications and Technology,
which he has managed since April 1998 and July 1998. Previously, he
managed another Fidelity fund. 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.
Rajiv Kaul is manager of Biotechnology, which he has managed since
June 1998. Since joining Fidelity in 1996, Mr. Kaul has worked as a
research associate and equity analyst. He received a bachelor of arts
degree in government from Harvard University in 1995.
Nick Thakore is manager of Telecommunications, which he has managed
since July 1996. He also manages other Fidelity funds. Mr. Thakore
joined Fidelity in 1993 as an analyst, after receiving his MBA from
The Wharton School at the University of Pennsylvania.
Jonathan Zang is manager of Utilities Growth, which he has managed
since July 1998. Mr. Zang joined Fidelity in 1997 as an equity
analyst, after receiving his MBA from the University of Chicago.
Previously, he was an investment officer with Hawaiian Trust Company,
in Honolulu, from 1992 to 1995.
Chris Zepf is manager of Transportation, which he has managed since
September 1998. Mr. Zepf joined Fidelity as an intern while working
toward his MBA, which he received from Dartmouth College in 1998.
Previously, he was an equity research associate at Wasserstein Perella
Securities in New York.
The following information replaces the similar information found under
the heading "Investment Principles and Risks" beginning on page P-40:
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 stock fund (except
Natural Resources, Precious Metals and Minerals, and Gold) 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. Natural Resources 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. 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. For this purpose, Precious Metals and Minerals treats
investments in instruments whose value is linked to the price of
precious metals as investments in precious metals. Normally, at least
80% of Gold's assets will be invested in securities of companies
engaged in gold-related activities, and in gold bullion or coins. For
this purpose, Gold treats investments in instruments whose value is
linked to the price of gold as investments in gold bullion or coins.
The stock funds will invest primarily in equity securities, although
they may invest in other types of instruments as well.
A company is considered to be "principally engaged" in a designated
business activity if (i) at least 50% of its assets, income, sales or
profits are committed to, or derived from, the business activity; or
(ii) a third party has given the company an industry or sector
classification consistent with the designated business 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.
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. In
addition to investments in those companies, the fund's focus includes
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 following information replaces the similar information found under
the heading "Securities and Investment Practices" beginning on page
P-48:
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 75% 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.
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
or to securities of other investment companies.
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 the highest-quality securities of a single issuer for up to
three business days. This limitation does not apply to U.S. Government
securities or to securities of other investment companies.
With the exception of Business Services and Outsourcing, Cyclical
Industries, Gold, Medical Equipment and Systems, Natural Resources,
and Precious Metals and Minerals, each stock fund normally invests at
least 80%, and in no event less than 25%, of its assets in securities
of companies principally engaged in the business activities identified
for that fund. Natural Resources 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. 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. For this purpose, Precious Metals and Minerals treats
investments in instruments whose value is linked to the price of
precious metals as investments in precious metals. Normally, at least
80% of Gold's assets will be invested in securities of companies
engaged in gold-related activities, and in gold bullion or coins. For
this purpose, Gold treats invests in instruments whose value is linked
to the price of gold as investments in gold bullion or coins. Each of
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. At all times, 80%
or more of the money market fund's assets will be invested in money
market instruments.
The following information replaces the similar information found under
the heading "Fundamental Investment Policies and Restrictions"
beginning on page P-50:
1.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 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 or to securities of other investment companies.
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.
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 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 or to
securities of other investment companies.
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 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 or to
securities of other investment companies.
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. 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 Gold and Precious Metals and
Minerals, in certain precious metals. Each stock fund (except Business
Services and Outsourcing, Cyclical Industries, Medical Equipment and
Systems, and Natural Resources) invests at least 25% of its assets in
securities of companies principally engaged in the business activities
identified for that 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.
For each stock fund (except Business Services and Outsourcing,
Cyclical Industries, Medical Equipment and Systems, and Natural
Resources), FMR does not place 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 Equipment 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.
The following information replaces the similar information found under
the heading "Management Fee" in the "Breakdown of Expenses" section on
page P-53:
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East on
behalf of each stock fund. 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.
