FIDELITY FIXED INCOME TRUST, N-30B-2, 1994-06-23

FIDELITY FIXED INCOME TRUST
N-30B-2, 1994-06-23

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(2_FIDELITY_LOGOS)FIDELITY

INVESTMENT GRADE BOND
FUND
ANNUAL REPORT
APRIL 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market value.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 26 Footnotes to the financial
statements.

REPORT OF INDEPENDENT 31 The auditor's opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
The past few months have been an unsettling time for bond investors. The
bond market declined after the Federal Reserve Board raised short-term
interest rates from February through May. These rate hikes caused bond
yields to rise and bond prices to fall. While nobody knows whether rates
will continue to go up, this may be a good time to review the effect rising
rates have on your bond fund investment, and consider how well your current
bond fund holdings match your original investment goals.
Most investors choose bond funds to generate income and to help diversify
their investment portfolios. Despite the recent market downturn, bond
mutual funds still satisfy these needs. Where investors have felt the
negative effect of rising rates is in the market value of their investment,
which has eroded as bond prices have fallen. It's important to remember,
however, that this loss in principal is only "on paper" until you choose to
sell your shares. That's why your investing time horizon is key.
If your time horizon is short - one year or less - you may want to consider
shifting all or part of your bond fund investment into a money market fund.
If you can't keep your investment in the bond fund until yields start
falling again and bond prices rise, you increase your risk of not recouping
the full value of the shares. A money market fund provides a stable $1
share price and a yield that becomes more attractive as rates go up.
If you don't need your money within the next year, staying in your bond
fund may be the appropriate strategy for you. The longer your investing
time frame, the better your chances of retaining your principal investment
through periods of rising AND falling rates. For example, if you plan to
use your money in one to two years, a short-term bond fund may be the right
choice. If your time frame is two to four years, a fund with an
intermediate length average maturity may be best. If you have a longer-term
goal - say a child's college education that's ten years away - you may be
willing to ride out the bond market's peaks and valleys in exchange for the
higher potential returns of a longer-term fund.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value). You can also look at the fund's
income to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Investment Grade Bond 3.35% 64.38% 184.67%

Lehman Brothers Aggregate Bond Index 0.85% 59.24% 194.80%

Average Corporate BBB-Rated Bond Fund 1.52% 56.77% 179.35%

Consumer Price Index 2.36% 19.74% 42.97%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or ten years. For example, if
you invested $1,000 in a fund that had a 5% return over one year, you would
end up with $1,050. You can compare these figures to the Lehman Brothers
Aggregate Bond Index - a broad measure of the performance of the U.S. bond
market. To measure how the fund stacked up against its peers, you can also
look at the average corporate BBB-rated bond fund, which reflects the
performance of over 74 funds tracked by Lipper Analytical Services. These
benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the consumer price index helps show how
your fund did compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Investment Grade Bond 3.35% 10.45% 11.03%

Lehman Brothers Aggregate Bond Index 0.85% 9.75% 11.42%

Average Corporate BBB-Rated Bond 1.52% 9.36% 10.77%
Fund

Consumer Price Index 2.36% 3.67% 3.64%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
MonthEnd Fidelity InvAggregate Bo
04/30/84 10000.00 10000.00
05/31/84 9646.11 9689.00
06/30/84 9796.39 9813.02
07/31/84 10160.19 10254.61
08/31/84 10318.47 10427.91
09/30/84 10625.59 10675.05
10/31/84 10970.21 11127.67
11/30/84 11180.93 11326.86
12/31/84 11276.21 11492.23
01/31/85 11526.54 11754.25
02/28/85 11344.72 11514.46
03/31/85 11528.85 11749.36
04/30/85 11766.24 11992.57
05/31/85 12273.50 12619.78
06/30/85 12405.79 12753.55
07/31/85 12339.54 12708.92
08/31/85 12583.96 12947.84
09/30/85 12679.79 13025.53
10/31/85 12930.07 13299.07
11/30/85 13291.01 13618.24
12/31/85 13655.27 14034.96
01/31/86 13717.14 14113.56
02/28/86 14318.28 14669.63
03/31/86 14663.14 15124.39
04/30/86 14776.92 15204.55
05/31/86 14438.53 14914.14
06/30/86 14853.86 15304.89
07/31/86 14930.36 15441.11
08/31/86 15209.79 15824.05
09/30/86 14959.30 15667.39
10/31/86 15180.80 15893.00
11/30/86 15399.11 16115.50
12/31/86 15514.84 16175.13
01/31/87 15734.81 16403.20
02/28/87 15846.62 16516.38
03/31/87 15727.59 16442.06
04/30/87 15199.37 15991.54
05/31/87 15080.05 15929.18
06/30/87 15217.92 16149.00
07/31/87 15220.65 16136.08
08/31/87 15134.37 16050.56
09/30/87 14754.93 15708.68
10/31/87 15162.27 16267.91
11/30/87 15343.88 16398.05
12/31/87 15532.21 16621.07
01/31/88 16131.01 17206.13
02/29/88 16381.60 17410.88
03/31/88 16169.80 17247.22
04/30/88 16072.87 17154.09
05/31/88 15954.55 17039.15
06/30/88 16287.25 17449.80
07/31/88 16236.87 17357.31
08/31/88 16258.62 17402.44
09/30/88 16596.49 17797.48
10/31/88 16865.18 18132.07
11/30/88 16714.13 17910.86
12/31/88 16762.77 17930.56
01/31/89 16938.24 18188.76
02/28/89 16907.65 18057.80
03/31/89 17009.27 18135.45
04/30/89 17317.57 18514.48
05/31/89 17682.64 19001.41
06/30/89 18231.27 19580.95
07/31/89 18654.25 19998.03
08/31/89 18362.96 19702.06
09/30/89 18418.49 19802.54
10/31/89 18791.04 20289.68
11/30/89 18924.22 20482.43
12/31/89 18942.01 20537.74
01/31/90 18686.21 20293.34
02/28/90 18734.39 20358.28
03/31/90 18733.85 20372.53
04/30/90 18584.03 20185.10
05/31/90 19089.38 20782.58
06/30/90 19378.46 21117.18
07/31/90 19667.00 21408.59
08/31/90 19404.39 21121.72
09/30/90 19518.00 21297.03
10/31/90 19340.35 21567.50
11/30/90 19756.99 22031.20
12/31/90 20090.93 22374.89
01/31/91 20298.16 22652.34
02/28/91 20616.90 22844.88
03/31/91 20882.29 23002.51
04/30/91 21151.58 23250.94
05/31/91 21301.29 23385.80
06/30/91 21298.86 23374.10
07/31/91 21581.90 23699.00
08/31/91 22120.36 24210.90
09/30/91 22595.39 24702.38
10/31/91 22820.55 24976.58
11/30/91 23042.65 25206.36
12/31/91 23891.01 25954.99
01/31/92 23591.90 25602.00
02/29/92 23780.19 25768.42
03/31/92 23739.33 25624.11
04/30/92 23822.52 25808.61
05/31/92 24314.01 26296.39
06/30/92 24598.42 26659.28
07/31/92 25332.13 27203.13
08/31/92 25559.45 27477.88
09/30/92 25785.69 27804.87
10/31/92 25432.35 27435.06
11/30/92 25455.88 27440.55
12/31/92 25877.46 27876.86
01/31/93 26483.76 28412.09
02/28/93 27148.44 28909.30
03/31/93 27399.59 29030.72
04/30/93 27544.86 29233.94
05/31/93 27691.06 29271.94
06/30/93 28416.82 29801.76
07/31/93 28854.50 29971.63
08/31/93 29652.68 30496.14
09/30/93 29737.85 30578.48
10/31/93 30090.85 30691.62
11/30/93 29836.55 30430.74
12/31/93 30077.04 30595.06
01/31/94 30547.24 31008.10
02/28/94 29550.77 30468.56
03/31/94 28684.84 29715.98
04/30/94 28466.72 29480.00

$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Investment Grade
Bond Fund on April 30, 1984. As the chart shows, by April 30, 1994, the
value of your investment would have grown to $28,467 - a 184.67% increase
on your initial investment. For comparison, look at how the Lehman Brothers
Aggregate Bond Index did over the same period. With dividends reinvested,
the same $10,000 investment would have grown to $29,480 - a 194.80%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

Dividend return 6.92% 8.56% 9.12% 9.70% 8.96%

Capital appreciation return -3.57% 7.07% 3.51% 4.12% -1.65%

Total return 3.35% 15.63% 12.63% 13.82% 7.31%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.37(cents) 25.83(cents) 53.76(cents)

Annualized dividend rate 7.26% 6.74% 6.92%

30-day annualized yield 7.07% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $7.32 over
the past month, $7.73 over the past six months and $7.77 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Generally, falling interest rates
pushed up U.S. bond prices from
May through mid-October 1993,
when the yield on the benchmark
30-year Treasury bond reached a
historic low of 5.79%. Yields then
moved within a narrow range until
early February 1994, when the
Federal Reserve Board raised
the federal funds rate - the rate
banks charge each other for
overnight loans - from 3.00% to
3.25%. That rate hike - and two
more in March and April - ignited
heavy selling in the U.S. bond
market through the end of the
period, as investors feared a
stronger economy might lead to
higher inflation. As yields rose
sharply - the 30-year Treasury
was yielding 7.30% by April 30 -
prices fell. For the 12 months
ended April 30, the Lehman
Brothers long-term Treasury
index had a total return (yield plus
price change) of 1.42%. A
broader measure of the U.S.
bond market, the Lehman
Brothers Aggregate Bond Index,
returned 0.85% during the period.
The negative effects of rising
interest rates on high-yield bonds
were somewhat offset by
improvements in their credit
quality due to the improving
economy. The Salomon Brothers
Composite High Yield Index rose
6.16%. Worldwide, the falling
U.S. bond market helped trigger
corrections - some severe - in
most foreign markets. The J.P.
Morgan Emerging Market Bond
Index dropped more than 18%
from January through April 1994,
but finished up 6.87% for the 12
months ended April 30.
An interview with Michael Gray, Portfolio Manager of Fidelity
Investment Grade Bond Fund
Q. MICHAEL, HOW DID THE FUND PERFORM?
A. On a relative basis, the fund performed quite well. The fund had a
total return of 3.35% for the 12 months ended April 30, 1994. That beat
the 1.52% total return for the average BBB-rated corporate bond fund
tracked by Lipper Analytical Services during the same period. It also
placed the fund in the top 20% of all BBB-rated corporate funds ranked by
Lipper.
Q. WHAT ACCOUNTS FOR THE FUND'S PERFORMANCE OVER THE PAST YEAR?
A. The performance has to be broken into two periods. The first six months
of the year, from April 30, 1993, through the beginning of October, were
much better than the second six months. During the first half of the year
the market rallied very dramatically and the fund was well-positioned to
take advantage of that. The market reached its peak on October 15 when the
30-year Treasury bond's yield bottomed at 5.79%. Since then, we've
basically been in a down market. Interest rates have risen substantially,
with the long bond's yield around 7.35% at the end of April.
Q. WHAT SPECIFIC THINGS DID YOU DO TO ACHIEVE THE GOOD RELATIVE
PERFORMANCE?
A. Two main things. Number one, I think I did a pretty good job of
managing the fund's duration - its sensitivity to interest rate changes -
during this period. I had the duration long, well over six years, going
into October. Interest rates had fallen substantially. With a longer
duration, a fund's share price can appreciate rapidly in a declining
interest rate environment. So this worked well during the first half of the
year. In a rising interest rate environment, a long duration works
oppositely, causing a fund's share price to deteriorate quickly. I started
shortening the duration in October, prior to the first down leg in the
market. This enabled the fund to beat the market in the fourth quarter of
1993. I made a mistake in January. The market sort of gave a head fake. It
looked like it was going to rally, so I lengthened duration to take
advantage of the rise. Then on February 4, the Federal Reserve raised the
federal funds rate - the interest rate on overnight interbank loans - by a
quarter percentage point. That hurt, but I recognized the mistake and
shortened duration dramatically. By the end of March, I had duration
shortened to 4.58 years, which helped in April, as the market continued to
fall.
Q. WHAT ELSE DID YOU DO?
A. I stopped buying corporate bonds during August of last year. They had
become too expensive relative to Treasuries. The fund held very few
mortgage bonds over the period, and they continue to perform poorly. We
made a significant investment in emerging market debt, which worked great
in 1993, but in February and March of 1994 was torpedoed along with all
other bonds.
Q. WHAT WERE THE BIGGEST FACTORS BEHIND THE SELL-OFF IN FIXED-INCOME
MARKETS WORLDWIDE?
A. To begin with, the market was surprised by the first Fed tightening on
February 4. Many expected that the Fed would begin to raise rates sometime
in 1994, given the strengthening economy, but few thought it would be that
soon. Consequently, it sent bonds into a tailspin. Simultaneously, a lot of
highly leveraged investments - that is, made with borrowed money - began to
unwind. Many investors had been playing the steep yield curve - the wide
spread between short- and long-term interest rates. Wall Street dealers,
hedge funds - aggressively managed private partnerships - and other
investors were buying long-term securities and financing their purchases at
much lower short-term rates. This was a great strategy while rates were
declining. But when the Fed began tightening, these investors realized that
rates weren't going to go down anymore. All bets were off and they started
selling. This flooded the market. Keep in mind that foreign investments
involve risks that are in addition to those of U.S. investments.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DO YOU USE THEM IN
THE FUND?
A. The fund has the flexibility to use derivative instruments. Currently,
there are two kinds in the fund. The first is a short position in Treasury
Bond futures contracts. These are owned to hedge the fund's Treasury bonds.
They help reduce the volatility of the fund to changes in interest rates.
The second is currency forward contracts. Again, these are used to hedge
the fund's non-dollar bonds against movements in currency exchange rates.
They allow the fund to have exposure to foreign bond markets without taking
on currency risk for the portion which is hedged.
Q. WHAT IS YOUR OUTLOOK GOING FORWARD?
A. You might call it a "bunker mentality." We're taking shelter until the
market stabilizes. I'm keeping duration short and letting the fund's cash
level build up. I've reduced the fund's exposure to the peso by selling a
lot of the Mexican cetes. This is the first bearish market we've had in a
few years and the challenge is to determine when it's safe to re-enter the
market and resume buying. I can't see getting bullish until the Fed stops
tightening, and I don't think it's done yet.

FUND FACTS
GOAL: seeks to provide a
high rate of income,
consistent with reasonable
risk by investing in a broad
range of fixed-income
securities. In addition, the
fund seeks to protect your
capital. Where appropriate,
the fund will take advantage
of opportunities to realize
capital appreciation.
START DATE: August 6, 1971
SIZE: as of April 30, 1994,
over $942 million
MANAGER: Michael Gray,
since September 1987;
manager, Fidelity Intermediate
Bond and Fidelity Advisor
Limited Term Bond, since
September 1987; Spartan
Investment Grade Bond,
since October 1992; joined
Fidelity in 1982
(checkmark)
MICHAEL GRAY ON MANAGING
BONDS IN A BEARISH MARKET:
"The primary goal in a bearish
environment is to try to
preserve the shareholder's
value as much as possible.
This means shifting from an
offensive strategy of buying
aggressively and lengthening
duration in a rising market to a
defensive posture of
shortening duration, moving
out of the market and
increasing the cash portion of
the portfolio. By shortening
duration, I reduce the risk of
sustained share price
deterioration should rates
continue to rise. I raise cash to
help mitigate losses when
interest rates are rising and
bond prices are falling, and
because a cash reserve allows
me to selectively buy bonds
once prices have fallen."
DISTRIBUTIONS
The Board of Trustees of
Fidelity Investment Grade
Bond Fund voted to pay on
June 6, 1994, to shareholders
of record at the opening of
business on June 3, 1994, a
distribution of $.12 derived
from capital gains realized
from sales of portfolio
securities.
25.7% of the dividends
distributed during the fiscal
year was derived from
interest on U.S. Government
securities generally exempt
from state income tax. The
fund will notify shareholders in
January 1995 of the
applicable percentage for
calendar year 1994 for use in
preparing 1994 income tax
returns.
INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF APRIL 30, 1994
(MOODY'S RATINGS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Aaa 34.8 37.2

Aa 3.1 2.2

A 9.6 8.5

Baa 24.6 25.2

Ba 8.3 6.6

B 0.4 0.8

Not rated 9.5 8.4

TABLE EXCLUDES SHORT-TERM INVESTMENTS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT APRIL 30, 1994, ACCOUNT FOR 4.5% OF THE
FUND'S INVESTMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1994
6 MONTHS AGO

Years 12.0 12.8

AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL ON THE
FUND'S BONDS IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF APRIL 30, 1994
6 MONTHS AGO

Years 4.4 5.2

Row: 1, Col: 1, Value: 9.1
Row: 1, Col: 2, Value: 2.4
Row: 1, Col: 3, Value: 20.8
Row: 1, Col: 4, Value: 28.8
Row: 1, Col: 5, Value: 38.9
Corporate bonds 37.8%
U.S. government
and agency
obligations 31.8%
Foreign government
obligations 21.8%
Stocks 2.8%
Short term and
other investments 5.8%
Corporate bonds 38.9%
U.S. government
and agency
obligations 28.8%
Foreign government
obligations 20.8%
Stocks 2.4%
Short term and
other investments 9.1%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 2.8
Row: 1, Col: 3, Value: 21.8
Row: 1, Col: 4, Value: 31.8
Row: 1, Col: 5, Value: 37.8
* TOTAL FOREIGN
ISSUES 29.7%
** TOTAL FOREIGN
ISSUES 30.5%
INVESTMENTS APRIL 30, 1994

Showing Percentage of Total Value of Investments

NONCONVERTIBLE BONDS - 38.9%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
AEROSPACE & DEFENSE - 0.1%
Grumman Corp. 10 3/8%, 1/1/99 Baa3 $ 1,100 $ 1,171
BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.3%
Grace (W.R.) & Co. 7.4%, 2/1/00 Baa3 2,500 2,465
CONSTRUCTION & REAL ESTATE - 1.3%
BUILDING MATERIALS - 1.3%
Cemex SA and Tolmex:
10%, 11/15/96 (d) - 1,750 1,776
8 7/8%, 6/10/98 (d) Ba2 10,000 9,775
11,551
DURABLES - 1.5%
AUTOS, TIRES, & ACCESSORIES - 0.5%
Pep Boys - Manny, Moe & Jack
8 7/8%, 4/15/96 Baa2 4,000 4,178
CONSUMER ELECTRONICS - 1.0%
Black & Decker Corp. 7 1/2%, 4/1/03 Ba1 10,000 9,477
TOTAL DURABLES 13,655
ENERGY - 1.8%
ENERGY SERVICES - 1.1%
McDermott International, Inc.:
10 1/4%, 6/1/95 Baa3 7,000 7,254
9 3/8%, 3/15/02 Baa3 2,500 2,599
9,853
OIL & GAS - 0.7%
Oryx Energy Co. 10%, 4/1/01 Ba2 1,000 1,041
Societe Nationale Elf Aquitaine 7 3/4%, 5/1/99 Aa3 5,000 5,125
6,166
TOTAL ENERGY 16,019
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
FINANCE - 18.7%
BANKS - 12.1%
Bancomer SA:
euro 8%, 7/7/98 (d) Ba2 $ 3,500 $ 3,308
9%, 6/1/00 (d) - 7,500 7,181
Bank of Boston Corp. 6 7/8%, 7/15/03 Baa2 5,000 4,680
Bank of New York, Inc. 7 5/8%, 7/15/02 Baa1 5,000 4,963
Central Fidelity Banks, Inc. 8.15%, 11/15/02 Baa2 4,000 4,087
Chemical Banking Corp. 8 5/8%, 5/1/02 A3 5,000 5,252
Citicorp:
9%, 4/15/99 A3 2,000 2,126
8%, 2/1/03 A3 3,000 3,028
Continental Bank N.A. (Chicago):
12 1/2%, 4/1/01 Baa3 7,000 8,738
7 7/8%, 2/1/03 Baa3 3,000 2,990
Crestar Financial Corp. 8 1/4%, 7/15/02 Baa2 7,500 7,677
First Interstate Bancorp:
10 7/8%, 4/15/01 Baa1 3,500 4,083
9 3/8%, 1/23/02 Baa3 1,500 1,641
9 1/8%, 2/1/04 Baa1 7,000 7,577
First Maryland Bancorp 8 3/8%, 5/15/02 Baa1 3,000 3,105
First National Bank of Boston 8 3/8%, 12/15/02 Baa1 5,000 5,147
First USA Bank 5 3/4%, 1/15/99 Baa3 4,000 3,743
HSBC Finance Nederland BV 7.40%,
4/15/03 (d) A3 5,000 4,850
MBNA American Bank, N.A. 7 1/4%, 9/15/02 A3 5,000 4,850
Mercantile Bancorporation, Inc. 7 5/8%,
10/15/02 Baa1 3,000 2,960
Provident Bank 7 1/8%, 3/15/03 Baa2 2,500 2,375
UJB Financial Corp. 8 5/8%, 12/10/02 Baa3 5,500 5,763
Wells Fargo & Co. 8 3/4%, 5/10/02 Baa1 5,000 5,289
Zions Bancorporation 8 5/8%, 10/15/02 BBB- 5,000 5,181
110,594
CREDIT & OTHER FINANCE - 5.8%
Financiera Energetica Nacional 6 5/8%,
12/13/96 (d) - 3,500 3,343
Fleet Mortgage Group 6 1/2%, 9/15/99 A3 250 240
Ford Motor Credit Co. 7 1/2%, 1/15/03 A2 5,000 4,922
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
General Motors Acceptance Corp.:
7.05%, 4/13/95 Baa1 $ 10,000 $ 10,130
7 3/4%, 2/25/97 Baa1 9,000 9,210
6%, 7/13/98 Baa1 5,000 4,776
Household Finance Corp. 7.8%, 11/1/96 A2 4,000 4,115
Secured Finance, Inc. Kroger gtd. secured 9.05%,
12/15/04 Aaa 4,000 4,318
Tenneco Credit Corp.:
10.05%, 8/17/98 Baa2 3,000 3,242
9 5/8%, 8/15/01 Baa2 8,000 8,816
53,112
SAVINGS & LOANS - 0.8%
Great Western Financial Corp. 8.6%, 2/1/02 Baa2 2,000 2,084
Home Savings of America 10 1/2%, 6/12/97 Baa1 5,000 5,367
7,451
TOTAL FINANCE 171,157
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Caterpillar Inc., 8%, 2/15/23 A3 500 494
MEDIA & LEISURE - 4.1%
BROADCASTING - 0.7%
Tele-communications, Inc.:
7.13%, 2/2/98 Baa3 4,000 3,972
6.58%, 2/15/05 Baa3 2,500 2,400
6,372
LEISURE DURABLES & TOYS - 1.0%
Brunswick Corp. 8 1/8%, 4/1/97 Baa2 3,500 3,568
Mattel, Inc. 6 7/8%, 8/1/97 Baa2 5,000 4,961
8,529
LODGING & GAMING - 0.4%
First Mexican Acceptance Corp. euro:
8 3/4%, 9/15/96 - 2,400 2,402
10 3/4%, 9/15/96 - 1,500 1,510
3,912
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 2.0%
News America Holdings, Inc. 8 5/8%, 2/1/03 Ba1 $ 10,000 $ 10,073
Time Warner Entertainment Co. LP 9 5/8%,
5/1/02 Baa3 8,000 8,540
18,613
TOTAL MEDIA & LEISURE 37,426
NONDURABLES - 0.6%
TOBACCO - 0.6%
RJR Nabisco, Inc. gtd. 8 3/4%, 4/15/04 Baa3 6,000 5,311
PRECIOUS METALS - 0.2%
Teck Corp. 8.70% 5/1/02 Baa2 1,500 1,545
RETAIL & WHOLESALE - 0.6%
GROCERY STORES - 0.6%
American Stores Co. 9 1/8%, 4/1/02 Baa3 5,000 5,369
TECHNOLOGY - 0.4%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Comdisco, Inc.:
7 3/4%, 1/29/97 Baa2 2,000 2,038
9 1/4%, 7/6/00 Baa2 2,000 2,140
4,178
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.5%
Qantas Airways Ltd. 6 5/8%, 6/30/98 (d) Baa2 3,000 2,900
United Air Lines, Inc. equipment trust ctfs.,
9.76%, 5/13/06 Baa2 2,000 2,007
4,907
TRUCKING & FREIGHT - 0.8%
Airborne Freight Corp. 8 7/8%, 12/15/02 Baa3 5,500 5,778
Federal Express Corp. 9 7/8%, 4/1/02 Baa3 1,000 1,117
6,895
TOTAL TRANSPORTATION 11,802
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
UTILITIES - 8.0%
ELECTRIC UTILITY - 7.5%
British Columbia Hydro & Power Authority:
15 1/2%, 7/15/11 Aa1 $ 1,000 $ 1,239
15 1/2%, 11/15/11 Aa1 1,000 1,264
Gulf States Utilities Co. 9.72%, 7/1/98 Baa3 10,500 11,201
Hydro-Quebec:
euro gtd. 9 5/8%, 7/15/22 Aa3 CAD 6,000 4,409
8.4%, 1/15/22 A1 25,000 25,008
Long Island Lighting Co.:
10 1/4%, 6/15/94 Baa3 10,800 10,859
7.3%, 7/15/99 Baa3 5,000 4,808
Middle South Energy, Inc. 1st mtg. 11%, 5/1/00 Baa3 1,049 1,050
Systems Energy Resources, Inc. 1st mtg.:
14%, 11/15/94 Baa3 7,500 7,805
10 1/2%, 9/1/96 Baa3 1,000 1,070
68,713
GAS - 0.5%
Transco Energy Co.:
9 1/2%, 12/1/95 Ba3 2,000 2,055
9 3/8%, 8/15/01 Ba3 2,000 2,005
4,060
TOTAL UTILITIES 72,773
TOTAL NONCONVERTIBLE BONDS
(Cost $353,428) 354,916
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 25.6%
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.2%
Financing Corp.:
9.80%, 4/6/18 Aaa 6,500 7,963
stripped principal payment:
2/8/18 Aaa 10,100 1,608
5/11/18 Aaa 65,140 10,181
19,752
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
U.S. TREASURY OBLIGATIONS - 23.4%
6 3/8%, 8/15/02 Aaa $ 5,000 $ 4,805
9 7/8%, 11/15/15 Aaa 12,500 15,686
8 7/8%, 2/15/19 Aaa 19,100 22,075
8 1/8%, 8/15/19 Aaa 87,250 93,575
7 7/8%, 2/15/21 Aaa 25,000 26,145
8 1/8%, 5/15/21 Aaa 20,000 21,516
stripped coupon payment:
8/15/06 Aaa 9,715 3,919
2/15/08 Aaa 54,000 19,318
stripped principal payment:
2/15/19 Aaa 24,575 3,808
2/15/20 Aaa 21,500 3,105
213,952
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $237,420) 233,704
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 3.2%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.1%
12 1/2%, 7/1/11 to 7/1/15 Aaa 838 951
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 3.1%
8%, 4/15/16 to 6/15/17 Aaa 7,853 7,822
9%, 5/15/16 to 1/15/22 Aaa 13,992 14,563
9 1/2%, 3/15/21 to 10/15/21 Aaa 1,940 2,045
10%, 11/15/09 to 8/15/19 Aaa 3,811 4,108
28,538
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE-
BACKED SECURITIES (Cost $28,867) 29,489
FOREIGN GOVERNMENT OBLIGATIONS - 20.8%
Argentina Republic:
5%, 3/31/05 (d)(e) - 363 265
BOCON 3 1/4%, 4/1/01 B 5,350 3,743
BOTE 1.885%, 5/31/96 (e) - 17,775 8,896
Brady:
4.3125%, 3/31/23 (d)(e) - 1,509 1,064
4 1/4%, 3/31/23 (d)(e) - 34,532 18,259
FOREIGN GOVERNMENT OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
Argentina Republic - continued
Chaco Province 11.875%, 9/10/97 (c) - $ 1,000 $ 993
Province of Cordoba, 10%, 1/28/95 - 2,250 2,208
Canadian Government 10 3/4%, 12/15/95 Aaa CAD 22,000 16,777
French Government OAT:
8 1/2%, 11/25/02 Aaa FRF 17,000 3,347
8 1/2%, 10/25/19 Aaa FRF 13,000 2,563
German Government:
8 5/8%, 2/20/96 Aaa DEM 10,100 6,422
8%, 9/22/97 Aaa DEM 30,000 19,273
Kingdom of Thailand 8 1/4%, 3/15/02 A2 10,000 10,215
Manitoba Province:
yankee 8.8%, 1/15/20 A+ 15,000 15,965
6 7/8%, 9/15/02 A1 3,000 2,854
Mexican Government:
Adjustabonos 4.8%, 9/1/94 AA- MXN 6,000 2,406
Brady:
6 1/4%, 12/31/19 Ba3 19,500 12,504
6 1/4%, 12/31/19 Ba3 7,500 4,809
Brady Discount:
5.4375%, 12/31/19 (e) Ba3 18,500 15,448
5.1875%, 12/31/19 (e) Ba3 4,500 3,758
4.3125%, 12/31/19 (e) Ba3 1,500 1,253
Cetes:
8/11/94 to 11/9/95 - MXN 48,421 13,134
Ontario Province:
7 3/8%, 1/27/03 Aa2 8,000 7,850
15 1/8%, 5/1/11 Aa2 7,000 8,453
Quebec Province 9 1/8%, 3/1/00 A1 3,000 3,254
Republic of Uruguay 8 1/4%, 6/8/95 (d) - 4,000 4,040
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $193,966) 189,753
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.1%

MBNA Trust 9 1/2%, 10/25/20 Aaa 565 565
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $584) 565
COMMON STOCKS - 0.4%
SHARES VALUE (NOTE 1)
FINANCE - 0.4%
BANKS - 0.4%
Banco Bilbao Vizcaya International Gibraltar Ltd.
sponsored ADR 150,000 $ 3,994
TOTAL COMMON STOCKS
(Cost $3,785) 3,994
PREFERRED STOCKS - 2.0%
FINANCE - 0.5%
BANKS - 0.5%
Chase Manhattan Corp., Series F adj. rate 22,800 1,151
Continental Bank Corp., Series 1 49,200 2,467
Summit Bancorporation adj. rate (f) 40,000 860
4,478
UTILITIES - 1.5%
ELECTRIC UTILITY - 1.4%
Cleveland Electric Illuminating Co.,
Series L adj. rate 12,193 1,073
Gulf States Utilities Co. $1.75 120,000 2,910
Long Island Lighting Co. $7.95 200,000 5,000
Niagara Mohawk Power Corp., Series A
adj. rate 71,005 1,686
Public Service Co. of New Hampshire, Series A 80,000 2,060
12,729
GAS - 0.1%
ENSERCH Corp., Series E adj. rate 8,400 835
TOTAL UTILITIES 13,564
TOTAL PREFERRED STOCKS
(Cost $16,600) 18,042
OTHER SECURITIES - 0.7%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A) (000S) (000S)
COLLATERALIZED NOTES - 0.7%
Ridgefield Investments Ltd. sr. notes 0%,
2/2/95 (collateralized by Mexican
govt. securities) (d) $ 3,185 $ 2,679
Wilton Investments Ltd. sr. notes
(collateralized by Mexican govt. and
U.S. govt. securities) Series C, 0%, 6/3/94 (c) 3,570 3,552
TOTAL OTHER SECURITIES
(Cost $6,583) 6,231
COMMERCIAL PAPER - 0.1%
Grupo Embotellador de Mexico SA de CV
5/10/94 (d) 1,000 999
TOTAL COMMERCIAL PAPER
(Cost $999) 999
REPURCHASE AGREEMENTS - 8.2%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56%
dated 4/29/94 due 5/2/94 $ 75,110 75,088
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $917,320) $ 912,781
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
(000S) (000S)
SELL
1,530 U.S. Treasury Bond Contracts June 94 $ 153,000 $ 10,591
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 16.8%
FOREIGN FORWARD CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
20,768 CAD 7/5/94 $ 14,969 $ 20
180,412 FRF 7/20/94 31,776 (1,140)
TOTAL CONTRACTS TO SELL
(Receivable amount $45,625) $ 46,745 $ (1,120)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.1%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
FRF - French franc
DEM - German Deutsche mark
MXN - Mexican peso
LEGEND
(a) Principal amount is stated in United States dollars unless otherwise
noted.
(b) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(c) Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION
ACQUISITION COST
SECURITY DATE (000S)
Chaco Province
11.875%, 9/10/97 3/10/94 $ 1,027
Wilton Investments Ltd. sr.
notes (collateralized by
Mexican govt. and U.S.
govt. securities) Series
C, 0%, 6/3/94 3/3/93 $ 3,553
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $60,439,000 or 6.4% of net
assets.
(e) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(f) Non-income producing.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 47.5% AAA, AA, A 47.4%
Baa 24.6% BBB 25.7%
Ba 8.3% BB 4.2%
B 0.4% B 0.4%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 5.5%. FMR
has determined that unrated debt securities that are lower quality account
for 4.5% of the total value of investment in securities.
Distribution of investments by country, as a percentage of total value of
investment in securities, is as follows:
United States 70.3%
Canada 9.7
Mexico 9.5
Argentina 3.9
Germany 2.8
France 1.2
Thailand 1.1
Others (individually less than 1%) 1.5
TOTAL 100.0%
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $917,425,000. Net unrealized depreciation aggregated
$4,644,000, of which $24,343,000 related to appreciated investment
securities and $28,987,000 related to depreciated investment securities.
The fund hereby designates $7,908,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNT IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 912,781
agreements of $75,088) (cost $917,320) (Notes 1 and
2) - See accompanying schedule

Short foreign currency contracts (Note 2) $ (46,745)
Contracts held, at value

Receivable for contracts held 45,625 (1,120)

Receivable for investments sold 15,662

Receivable for fund shares sold 306

Dividends receivable 28

Interest receivable 16,493

Receivable for daily variation on futures contracts 383

TOTAL ASSETS 944,533

LIABILITIES

Dividends payable 1,051

Accrued management fee 360

Other payables and accrued expenses 380

TOTAL LIABILITIES 1,791

NET ASSETS $ 942,742

Net Assets consist of (Note 1):

Paid in capital $ 929,154

Distributions in excess of net investment income (1,877)

Accumulated undistributed net realized gain (loss) on 10,533
investments

Net unrealized appreciation (depreciation) on:

Investment securities (4,539)

Foreign currency contracts (1,120)

Futures contracts 10,591

NET ASSETS, for 129,082 shares outstanding $ 942,742

NET ASSET VALUE, offering price and redemption price per $7.30
share ($942,742 (divided by) 129,082 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1994

INVESTMENT INCOME $ 2,168
Dividends

Interest (including security lending fees of $23) (Note 6) 76,669

TOTAL INCOME 78,837

EXPENSES

Management fee (Note 4) $ 4,232

Transfer agent fees (Note 4) 2,477

Accounting and security lending fees (Note 4) 309

Non-interested trustees' compensation 7

Custodian fees and expenses 387

Registration fees 40

Audit 59

Legal 16

Interest (Notes 5 and 7) 11

Miscellaneous 92

TOTAL EXPENSES 7,630

NET INVESTMENT INCOME 71,207

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1, 2 AND 3)
Net realized gain (loss) on:

Investment securities 11,877

Foreign currency contracts 350

Futures contracts 4,666 16,893

Change in net unrealized appreciation (depreciation) on:

Investment securities (62,347)

Foreign currency contracts 605

Futures contracts 10,591 (51,151)

NET GAIN (LOSS) (34,258)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 36,949
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED APRIL 30,

1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 71,207 $ 81,250
Net investment income

Net realized gain (loss) on investments 16,893 13,165

Change in net unrealized appreciation (depreciation) (51,151) 54,381
on
investments

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 36,949 148,796
FROM OPERATIONS

Distributions to shareholders (69,241) (81,130)
From net investment income

In excess of net investment income (1,785) -

TOTAL DISTRIBUTIONS (71,026) (81,130)

Share transactions 799,522 863,239
Net proceeds from sales of shares

Reinvestment of distributions 57,516 69,257

Cost of shares redeemed (898,298) (925,165)

Net increase (decrease) in net assets resulting from (41,260) 7,331
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (75,337) 74,997

NET ASSETS

Beginning of period 1,018,079 943,082

End of period (including distributions in excess of net $ 942,742 $ 1,018,079
investment income of $1,877 and $1,263,
respectively)

OTHER INFORMATION
Shares

Sold 102,866 117,042

Issued in reinvestment of distributions 7,428 9,386

Redeemed (115,700) (125,267)

Net increase (decrease) (5,406) 1,161

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 7.570 $ 7.070 $ 6.830 $ 6.560 $ 6.670
period

Income from Investment .522 .570 .591 .592 .597
Operations
Net investment income

Net realized and unrealized (.254) .499 .244 .277 (.110)
gain (loss) on investments

Total from investment .268 1.069 .835 .869 .487
operations

Less Distributions (.525) (.569) (.595) (.599) (.597)
From net investment income

In excess of net investment (.013) - - - -
income

Total distributions (.538) (.569) (.595) (.599) (.597)

Net asset value, end of period $ 7.300 $ 7.570 $ 7.070 $ 6.830 $ 6.560

TOTAL RETURN 3.35% 15.63% 12.63% 13.82% 7.31%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 943 $ 1,018 $ 943 $ 455 $ 360
(in millions)

Ratio of expenses to average .74% .68% .70% .67% .70%
net assets

Ratio of net investment income 6.94% 7.74% 8.29% 8.84% 8.76%
to average net assets

Portfolio turnover rate 61% 74% 77% 101% 103%

</TABLE>

NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Investment Grade Bond Fund (the fund) is a fund of Fidelity Fixed
Income Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities (including restricted securities) for which market quotations
are not readily available are valued at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practicable to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
interest discount, is accrued as earned. Dividend and interest income is
recorded net of foreign taxes where recovery of such taxes is not assured.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
mortgage-backed securities, futures and options transactions, foreign
currency transactions, market discount, and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
a decrease in paid in capital of $5,568,000, a decrease in distributions in
excess of net investment income of $1,476,000 and a decrease in accumulated
net realized loss on investments of $4,092,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract. Purchases and sales of forward foreign
currency contracts having the same settlement date and broker are offset
and presented net on the Statement of Assets and Liabilities. Gain (loss)
on the
OPERATING POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
purchase or sale of forward foreign currency contracts having the same
settlement date and broker is recognized on the date of offset, otherwise
gain (loss) is recognized on settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
write options. These investments involve to varying degrees, elements of
market risk and risks in excess of the amount recognized in the Statement
of Assets and Liabilities. The face or contract amounts reflect the extent
of the involvement the fund has in the particular classes of instruments.
Risks may be caused by an imperfect correlation between movements in the
price of the instruments and the price of the underlying securities and
interest rates. Risks also may arise if there is an illiquid secondary
market for the instruments, or due to the inability of counterparties to
perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may participate
in an interfund lending program. This program provides an alternative
credit facility allowing the fund to borrow from, or lend money to, other
participating funds.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $4,545,000 or 0.5% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $576,365,000 and $628,926,000, respectively, of which U.S.
government and government agency obligations aggregated $464,029,000 and
$491,716,000, respectively.
The market value of futures contracts opened and closed amounted to
$207,433,000 and $202,685,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.14% to .37% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .20%.
For the period, the management fee was equivalent to an annual rate of .41%
of average net assets.
On October 20, 1993, shareholders approved an increase in the individual
fund fee rate to .30% effective November 1, 1993. The Board of Trustees
approved a new group fee rate schedule with rates ranging from .1325% to
.3700%. Effective November 1, 1993, FMR has voluntarily agreed to implement
this new group fee rate schedule as it results in the same or a lower
management fee.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that no
payments were made to third parties under the Plan.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $17,304,000 and $12,595,000,
respectively. The weighted average interest rate was 3.66%. Interest
expense includes $9,000 paid under the interfund lending program. At period
end, there were no interfund loans outstanding.
6. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, there were no
loans outstanding.
7. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $13,686,000 and $7,609,000,
respectively. The weighted average interest rate was 3.83%. Interest
expense includes $2,000 paid under the bank borrowing program. At period
end, there were no bank borrowings outstanding.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed Income Trust and the Shareholders of
Fidelity Investment Grade Bond Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Fidelity Investment Grade Bond Fund, including
the schedule of portfolio investments, as of April 30, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed Income Trust: Fidelity Investment Grade Bond Fund as of
April 30, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND
Boston, Massachusetts
June 3, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Michael Gray, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
Ginnie Mae
Global Bond
Government Securities
Intermediate Bond
Investment Grade Bond
Mortgage Securities
New Markets Income
Short-Intermediate Government
Short-Term Bond
Short-Term World Income
Spartan(Registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity
Government
Spartan Long-Term Government Bond
Spartan Short-Intermediate
Government
Spartan Short-Term Income
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

SHORT-TERM BOND
PORTFOLIO
ANNUAL REPORT
APRIL 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market value.

FINANCIAL STATEMENTS 30 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 34 Footnotes to the financial
statements.

REPORT OF INDEPENDENT 38 The auditor's opinion.
ACCOUNTANTS

Short-Term Bond 1.99% 47.82% 69.60%

Lehman Brothers 1-3 Year
Government-Corporate Bond Index 1.72% 47.29% n/a

Average Short Investment Grade
Bond Fund 1.62% 51.44% n/a

Consumer Price Index 2.36% 19.74% 34.37%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
began on September 15, 1986. For example, if you invested $1,000 in a fund
that had a 5% return, you would end up with $1,050. You can compare these
figures to the Lehman Brothers 1-3 Year Government-Corporate Bond Index - a
broad measure of the performance of short-term government and corporate
bonds. To measure how the fund stacked up against its peers, you can also
look at the average short investment grade bond fund, which reflects the
performance of 108 funds tracked by Lipper Analytical Services. These
benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the consumer price index helps show how
your fund did compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Short-Term Bond 1.99% 8.13% 7.17%

Lehman Brothers 1-3 Year
Government-Corporate Bond Index 1.72% 8.05% n/a

Average Short Investment Grade Bond
Fund 1.62% 8.64% n/a

Consumer Price Index 2.36% 3.67% 3.93%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
09/30/86 10000.00 10000.00
10/31/86 10072.04 10089.00
11/30/86 10141.28 10150.54
12/31/86 10172.93 10174.90
01/31/87 10217.55 10247.15
02/28/87 10276.97 10293.26
03/31/87 10278.77 10315.90
04/30/87 10151.53 10243.69
05/31/87 10163.36 10260.08
06/30/87 10278.15 10372.94
07/31/87 10298.83 10429.99
08/31/87 10332.08 10445.64
09/30/87 10267.70 10410.12
10/31/87 10421.06 10616.24
11/30/87 10486.66 10687.37
12/31/87 10576.87 10761.12
01/31/88 10733.38 10923.61
02/29/88 10845.81 11018.64
03/31/88 10845.58 11042.89
04/30/88 10853.15 11057.24
05/31/88 10828.01 11052.82
06/30/88 10940.01 11163.35
07/31/88 10949.14 11171.16
08/31/88 10968.40 11199.09
09/30/88 11070.45 11329.00
10/31/88 11184.45 11443.42
11/30/88 11146.22 11415.96
12/31/88 11180.64 11442.21
01/31/89 11277.04 11533.75
02/28/89 11297.58 11536.06
03/31/89 11332.02 11582.20
04/30/89 11476.36 11769.83
05/31/89 11650.86 11936.97
06/30/89 11846.54 12157.80
07/31/89 11995.07 12338.95
08/31/89 11965.05 12268.62
09/30/89 12014.59 12341.00
10/31/89 12213.08 12533.52
11/30/89 12296.52 12646.32
12/31/89 12356.35 12696.91
01/31/90 12332.48 12709.61
02/28/90 12388.43 12776.97
03/31/90 12434.46 12817.85
04/30/90 12460.85 12849.90
05/31/90 12669.25 13049.07
06/30/90 12760.41 13187.39
07/31/90 12908.39 13346.96
08/31/90 12888.79 13395.01
09/30/90 12911.06 13495.47
10/31/90 12878.98 13634.47
11/30/90 12946.28 13768.09
12/31/90 13070.95 13929.18
01/31/91 13052.87 14055.93
02/28/91 13203.01 14157.14
03/31/91 13460.32 14259.07
04/30/91 13643.91 14398.81
05/31/91 13783.06 14488.08
06/30/91 13833.62 14541.69
07/31/91 13943.78 14669.65
08/31/91 14177.96 14869.16
09/30/91 14324.58 15029.75
10/31/91 14490.56 15192.07
11/30/91 14640.49 15345.51
12/31/91 14904.19 15577.23
01/31/92 14965.37 15561.65
02/29/92 15095.20 15611.45
03/31/92 15198.74 15608.32
04/30/92 15281.39 15750.36
05/31/92 15428.54 15898.41
06/30/92 15572.49 16060.58
07/31/92 15756.97 16248.49
08/31/92 15894.86 16380.10
09/30/92 16026.20 16535.71
10/31/92 15912.81 16436.49
11/30/92 15897.75 16413.48
12/31/92 16005.23 16567.77
01/31/93 16269.08 16745.05
02/28/93 16450.66 16882.35
03/31/93 16552.53 16936.38
04/30/93 16633.84 17043.08
05/31/93 16662.39 17003.88
06/30/93 16843.69 17133.11
07/31/93 16941.17 17172.51
08/31/93 17127.38 17316.76
09/30/93 17190.78 17372.18
10/31/93 17300.59 17412.13
11/30/93 17335.40 17417.36
12/31/93 17466.50 17488.77
01/31/94 17580.29 17600.70
02/28/94 17427.38 17493.33
03/31/94 17095.38 17402.37
04/30/94 16964.22 17336.24

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Short-Term
Bond Portfolio on September 30, 1986, shortly after the fund started. As
the chart shows, by April 30, 1994, the value of your investment would have
grown to $16,964 - a 69.64% increase on your initial investment. For
comparison, look at how the Lehman Brothers 1-3 Year Government-Corporate
Bond Index did over the same period. With dividends reinvested, the same
$10,000 investment would have grown to $17,336 - a 73.36% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

Dividend return 6.51% 8.00% 9.28% 9.38% 8.69%

Capital appreciation return -4.52% .85% 2.72% .11% -.11%

Total return 1.99% 8.85% 12.00% 9.49% 8.58%

</TABLE>

Dividends per share 4.94(cents) 30.01(cents) 62.57(cents)

Annualized dividend rate 6.61% 6.42% 6.60%

30-day annualized yield 6.43% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.09 over
the past month, $9.43 over the past six months and $9.48 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Don Taylor, Portfolio Manager of Fidelity Short-Term
Bond Portfolio
Q. DON, HOW DID THE FUND PERFORM?
A. On a relative basis, adequately. The fund had a total return of 1.99%
for the 12 months ended April 30, 1994. That beat the 1.62% total return
for the average short investment grade bond fund tracked by Lipper
Analytical Services during the same period.
Q. WHAT ACCOUNTS FOR THE FUND'S ABOVE-AVERAGE PERFORMANCE OVER THE PAST
YEAR?
A. In 1993, U.S. interest rates were at all-time lows. The falling rate
environment caused a strong and sustained market rally that carried through
the first half of the fund's year. This was particularly beneficial for our
BBB/Baa-rated corporate bonds - medium to lower investment grade - which at
that time made up over one-third of the fund. Their prices rose more
rapidly than higher-rated corporates or Treasuries. By late summer, I
expected the economy to accelerate quite a bit. It appeared that there
would be enough growth to cause investors to fear a move by the Federal
Reserve to raise interest rates. In that type of environment, I felt that
the strong performance we were enjoying in the U.S. bond market would not
continue. My options were to either step back from the market and begin to
raise the cash level in the fund, or to take advantage of attractive
opportunities that existed in foreign markets. I chose the latter and
increased the fund's investments in Europe and Latin America.
Q. WHAT MADE THE EUROPEAN AND LATIN AMERICAN MARKETS SO ATTRACTIVE?
A. In Europe, the combination of weak economic growth, falling inflation
rates and declining short-term interest rates created a very dynamic
environment for fixed-income securities. As for Latin America, countries
such as Mexico and Argentina had instituted pro-growth economic policies
which could help bring inflation under control. A greater opening of the
Mexican economy via NAFTA was also very bullish, although we need to
remember that foreign investments are sometimes riskier than U.S.
investments.
Q. HOW DID YOUR SHIFT IN STRATEGY WORK OUT?
A. Really well until February and March when a worldwide sell-off hit the
bond markets. And the sell-off occurred despite economic fundamentals that
are generally favorable for bonds. Moreover, fourth quarter U.S. growth
advanced strongly. That resulted in rising interest rates here at home,
which exacerbated the global sell-off. All of the markets we invested in
took a beating.
Q. WHAT TRIGGERED THE SELL-OFF IN BOND MARKETS WORLDWIDE?
A. I think the primary triggering event was the breakdown in U.S.-Japan
trade negotiations in mid-February. This drove up the value of the yen by
about 10%. A lot of highly leveraged hedge funds - aggressively managed
private partnerships - had taken short positions in the yen - betting that
its value would fall. When the yen's value shot up so quickly, they were
forced to sell their investments in other markets to cover their losses in
the yen. Many of the investments that the hedge funds liquidated were in
the same European and Latin American markets that I had entered.
Q. IN RETROSPECT, WHAT WOULD YOU HAVE DONE DIFFERENTLY?
A. I would have more thoroughly investigated the global implications of
leverage in the fixed-income markets. In many of the global markets, there
was heavy borrowing to finance investments. I don't think I fully
appreciated how much leverage and speculation there was, and how the
downward pressure from rapid de-leveraging could permeate so quickly.
Q. HOW DO YOU FEEL ABOUT THE GLOBAL MARKETS NOW, AFTER THE SELL-OFF?
A. Now that the hedge funds and most of the speculators are out, the
markets will be free to go the way they naturally should under the existing
economic conditions. The story is still very good for our positions in
Argentina and Mexico and I expect further cuts in short-term interest rates
in our core European markets, France and Denmark, which will be bullish.
Q. ARE YOU FINDING OPPORTUNITIES IN THE U.S. MARKET?
A. Given the rise in yields, short- to intermediate-term Treasuries are
good values. However, the market is not going to stabilize until it's
convinced that the Fed has stopped raising rates.
Q. THERE HAS BEEN A GREAT DEAL OF TALK LATELY ABOUT DERIVATIVES. WHAT ARE
THEY AND DO YOU USE THEM IN THE FUND?
A. Derivatives, in one form or another, have been around for years.
Basically, they are financial arrangements - contracts between two parties
- - - - - - whose market value derives from something else, typically a security or
market index. In my fund I currently use two types of derivatives. One is
currency forwards I use to hedge the currency risk in some non-dollar bond
market positions the fund holds. These reduce the effects of currency
fluctuations on buying and selling prices. The other is indexed securities
I use to gain exposure to interest rates in foreign bond markets. These
markets are attractive, but because their currencies could weaken relative
to the dollar, I want to be in on a hedged basis. With indexed securities -
whose performance is linked to foreign interest rates - I can effectively
target this exposure while minimizing currency risk.
Q. WHAT IS YOUR GAME PLAN GOING FORWARD?
A. The best way I can characterize it is that I will stick to my
convictions regarding the potential for good fundamental value in Latin
America and Europe. I think investors are beginning to realize that these
securities are attractive at current prices. However, I also think it's
important to be flexible. The sentiment toward bond markets worldwide is
now predominantly bearish. If an investor holds a view that's different
from this prevailing sentiment, as I do, then you're really bucking the
trend. The challenge is to recognize this, but to also maintain your
objectivity.

FUND FACTS
GOAL: high current income
consistent with preservation of
capital by investing primarily in
a broad range of investment
grade, fixed-income securities
START DATE: September 15,
1986
SIZE: as of April 30, 1994,
over $1.9 billion
MANAGER: Donald Taylor,
since September 1989;
manager, Spartan
Short-Term Income, since
October 1992; VIP II:
Investment Grade Bond,
since May 1991; Fidelity
Advisor Short Fixed-Income,
since September 1989;
joined Fidelity in 1986
(checkmark)
DON TAYLOR ON THE FUND'S
INVESTMENT STRATEGY:
"My strategy is to look
throughout the domestic and
foreign fixed-income markets
to find investment alternatives
that represent good value. My
goal is to generate high returns
and yields that will beat money
market funds, while keeping
volatility low. Recently, the fund
has experienced share price
fluctuations that were caused
by extraordinarily turbulent
market conditions. With the
sharp sell-off in global markets,
and improved valuations in the
United States, many attractive
fixed-income securities are
now available. But with the
need to limit the fund's volatility,
and the ongoing tightening of
domestic monetary policy, our
approach in the near term will
be cautious."
(bullet) As of April 30, 40% of the
fund's portfolio was invested
in foreign securities, with
another 55.3% in obligations
of domestic issuers. Treasury
and governmental entities
made up 4.7% of the fund.
(bullet) The fund's average
duration was relatively short
at 1.9 years, meaning it was
less sensitive to changes in
interest rates.
DISTRIBUTIONS
1.0% of the dividends
distributed during the fiscal
year was derived from
interest on U.S. Government
securities generally exempt
from state income tax.
INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF APRIL 30, 1994
(MOODY'S RATINGS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Aaa 8.6 10.1

Aa 5.5 3.4

A 13.2 11.2

Baa 33.1 37.4

Ba 6.4 3.3

B - 0.4

Not rated 12.6 8.2

TABLE EXCLUDES SHORT-TERM INVESTMENTS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT APRIL 30, 1994, ACCOUNT FOR 1.9% OF THE
FUND'S INVESTMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1994
6 MONTHS AGO

Years 2.9 2.4

AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL ON THE
FUND'S BONDS IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF APRIL 30, 1994
6 MONTHS AGO

Years 1.9 1.7

Row: 1, Col: 1, Value: 19.6
Row: 1, Col: 2, Value: 19.7
Row: 1, Col: 3, Value: 3.3
Row: 1, Col: 4, Value: 57.4
Corporate bonds 57.4%
U.S. government
and agency
obligations 3.3%
Foreign government
obligations 19.7%
Short-term and
other investments 19.6%
Corporate bonds 58.2%
U.S. government
and agency
obligations 5.3%
Foreign government
obligations 13.1%
Short-term and
other investments 23.4%
Row: 1, Col: 1, Value: 23.4
Row: 1, Col: 2, Value: 13.4
Row: 1, Col: 3, Value: 5.3
Row: 1, Col: 4, Value: 58.2
* TOTAL FOREIGN
INVESTMENTS 40.0%
** TOTAL FOREIGN
INVESTMENTS 29.5%
INVESTMENTS APRIL 30, 1994

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 56.9%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
CONVERTIBLE BONDS - 0.1%
RETAIL & WHOLESALE - 0.1%
DRUG STORES - 0.1%
Rite Aid Corp. liquid yield option notes
0%, 7/24/06 Baa1 $ 5,000 $ 2,209
NONCONVERTIBLE BONDS - 56.8%
AEROSPACE & DEFENSE - 0.9%
Grumman Corp. 10 3/8%, 1/1/99 Baa3 5,100 5,427
Lockheed Corp. 4 7/8%, 2/15/96 Baa1 12,415 12,125
17,552
BASIC INDUSTRIES - 1.2%
CHEMICALS & PLASTICS - 0.7%
Desc (Soc De Fomento Indust) euro 11%,
12/15/97 - 6,830 6,992
Grace (W.R.) & Co. 7.4%, 2/1/00 Baa3 7,000 6,902
13,894
IRON & STEEL - 0.2%
Grupa Simec 8 7/8%, 12/15/98 (d) - 5,000 4,744
PAPER & FOREST PRODUCTS - 0.3%
Chesapeake Corp. 11 3/4%, 8/1/95 Baa3 4,600 4,865
TOTAL BASIC INDUSTRIES 23,503
CONSTRUCTION & REAL ESTATE - 1.1%
BUILDING MATERIALS - 0.6%
Sunbelt (Cemex) Enterprises 8 1/2%, 5/4/95 (g) - 12,000 11,940
CONSTRUCTION - 0.5%
Empresas ICA Sociedad Controladora:
euro 9 3/4%, 2/11/98 - 5,475 5,482
9 3/4%, 2/11/98 (d) - 3,400 3,404
8,886
TOTAL CONSTRUCTION & REAL ESTATE 20,826
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
Chrysler Corp. 13%, 3/1/97 Baa2 $ 1,015 $ 1,073
Ford Motor Co. (Canada) Ltd. euro
9 1/4%, 9/1/94 A2 1,100 1,114
Grupo Dina (Consorcio) euro 10 1/2%,
11/18/97 - 6,000 5,940
Grupo Imsa SA de CV 8 3/4%, 7/7/98 (d) - 750 714
8,841
ENERGY - 0.9%
ENERGY SERVICES - 0.9%
McDermott International, Inc.:
10 1/4%, 6/1/95 Baa3 15,600 16,166
9 3/8%, 3/15/02 Baa3 1,000 1,040
17,206
FINANCE - 32.4%
ASSET-BACKED SECURITIES - 2.0%
Advanta Trust 7.38%, 11/15/96 (d) Aaa 2,456 2,444
Concord Leasing, Inc. (d):
6.66%, 1/15/98 AAA 2,346 2,313
5.04%, 7/15/98 AAA 4,483 4,315
5.31%, 1/20/99 AAA 3,783 3,683
Discover Card Trust, 6 1/8%, 5/15/98 A2 2,000 1,990
Midlantic Grantor Trust 5.15%, 9/15/97 Baa2 3,411 3,366
SCFC Recreational Vehicle Loan Trust
7 1/4%, 9/15/06 Aaa 983 985
Standard Credit Card Master Trust:
7 7/8%, 7/7/95 Aaa 500 503
8 1/4%, 9/7/95 A2 4,400 4,449
5 7/8%, 7/7/96 Aaa 13,000 13,017
37,065
BANKS - 16.3%
Bancomer SA:
euro:
8%, 7/7/98 (d) Ba2 27,475 25,964
8%, 7/7/98 - 9,100 8,599
9%, 6/1/00 (d) - 5,750 5,506
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Bank of Boston Corp.:
9 1/2%, 8/15/97 Baa2 $ 2,315 $ 2,490
euro 3.8%, 8/28/98 (e) Baa2 16,350 16,043
10.3%, 9/1/00 Baa2 1,250 1,317
Baybanks, Inc. 4.0625%, 9/30/97 (e) Baa2 8,500 8,394
Chase Manhattan Corp. euro 5%, 5/31/00 (e) Baa2 4,700 4,636
Chemical Bank Corp. euro 0%, 2/16/97 Baa1 1,000 827
Citicorp:
5.7%, 2/12/96 A2 9,000 8,953
euro (e):
5%, 7/10/97 Baa3 1,000 992
5%, 1/30/98 A3 3,500 3,474
5%, 10/25/05 Baa2 3,450 3,321
Citicorp Person to Person euro
5 1/4%, 1/30/97 (e) A3 8,230 8,168
Citizens & Southern Corp. 5 1/4%,
12/19/97 (e) A3 9,650 9,645
Continental Bank Corp.:
11.09%, 10/18/94 Baa3 3,650 3,748
9 3/4%, 3/15/95 Baa3 10,525 10,877
9 7/8%, 6/15/96 Baa3 4,600 4,923
4 1/2%, 5/18/00 (e) Baa3 2,000 1,997
Corestates Capital Corp. 6.24%, 2/13/95 A1 1,400 1,412
Corporacion Andina De Fomento
7 1/4%, 4/30/98 (d) - 4,800 4,620
Crestar Financial Corp. 8 1/4%, 7/15/02 Baa1 2,000 2,047
Czech National Bank Prague euro
7%, 4/6/96 Baa3 4,050 4,050
First Bank Systems, Inc. euro
5 1/4%, 11/29/96 (e) A3 8,850 8,850
First Bank Systems, Inc. 9.89%, 3/6/96 A3 650 690
First Fidelity Bancorporation 9 3/4%, 5/25/95 A3 6,075 6,321
First Interstate Bancorp:
8 7/8%, 3/1/95 A3 4,700 4,771
10 1/2%, 3/1/96 A3 3,815 4,094
10 7/8%, 4/15/01 Baa1 2,840 3,313
Fleet Financial Group, Inc. 5 5/8%, 7/1/95 A3 9,250 9,247
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Fleet/Norstar Financial Group, Inc.:
11 3/4%, 11/15/94 A3 $ 1,370 $ 1,415
7.65%, 3/1/97 Baa3 5,000 5,129
Kansallis-Osaki-Pankki euro:
8 1/2%, 5/31/95 A3 2,500 2,550
10%, 3/7/96 A3 9,800 10,326
Keycorp.:
8.55%, 5/30/95 A2 1,300 1,339
8.96%, 5/30/96 A2 2,000 2,098
MBNA American Bank, N.A. 7 1/4%, 9/15/02 A3 350 340
Manufacturers Hanover Trust euro
5 1/4%, 7/15/97 (e) Baa2 15,500 15,423
Marine Midland Bank:
euro (e):
5 1/4%, 9/27/96 Baa1 17,750 17,639
4 1/2%, 3/29/99 Baa1 5,000 4,965
8 5/8%, 3/1/97 Baa1 19,567 20,408
Mellon Financial Co.:
9.34%, 12/15/94 A3 1,900 1,947
6 1/8%, 11/15/95 A3 3,750 3,765
6 1/2%, 12/1/97 A3 1,000 987
Mercantile Bancorporation, Inc. 7 5/8%,
10/15/02 Baa1 4,038 3,985
Merchants National Corp. 8.20%, 10/25/94 A1 2,000 2,029
Meridian Bancorp, Inc. 5 1/4%,12/1/96 (e) Baa1 7,450 7,441
Midland International Financial Services BV
euro 5%, 3/6/99 (e) - 4,000 4,000
Midlantic Corp. 9 1/4%, 9/1/99 Baa3 500 530
Moore Financial Group, Inc. 5 1/4%,
11/18/97 (e) Baa1 6,300 6,190
National City Corp. 5 1/4%, 1/31/97 (e) A2 4,100 4,069
Norstar Bancorp, Inc. 9 3/8%, 6/1/94 A3 1,900 1,906
Security Pacific Corp. 10.05%, 5/1/95 A2 3,500 3,658
Shawmut Corp. 8 7/8%, 4/1/96 Baa1 4,325 4,520
TrustCorp, Inc. 11 1/8%, 9/1/95 A1 710 755
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
United Virginia Bankshares, Inc. 8 5/8%,
4/15/98 Baa1 $ 660 $ 691
Wells Fargo and Co. euro 5 1/4%,
4/28/00 (e) Baa2 2,000 1,975
309,369
CREDIT & OTHER FINANCE - 12.8%
Aristar, Inc.:
8.55%, 6/1/95 Baa1 2,590 2,665
7 3/8%, 2/15/97 Baa1 2,000 2,029
Associates Corp. of North America:
12 3/4%, 8/15/94 A2 400 409
12 1/2%, 9/15/94 A1 4,375 4,493
Beneficial Corp. 9 3/8%, 6/2/95 A2 4,400 4,573
CIT Group Holdings, Inc. index amortizing
note 5.02%, 4/6/98 A1 15,350 15,273
Caterpillar Financial Services Corp. 7.14%,
4/10/95 A3 2,950 2,993
Chrysler Financial Corp.:
9%, 10/15/94 Baa2 2,303 2,342
6%, 4/15/96 Baa2 15,000 14,923
6.47%, 5/27/97 Baa3 3,000 2,973
Financiera Energetica Nacional
6 5/8%, 12/13/96 (d) - 7,120 6,800
Ford Motor Credit Co.:
euro 9 5/8%, 2/27/96 A2 3,100 3,271
8%, 8/1/94 A2 1,850 1,864
9 1/8%, 8/15/94 A2 4,005 4,053
9 1/4%, 11/15/94 A2 1,950 1,993
5.7%, 12/12/94 A2 1,000 1,005
9%, 6/28/96 A2 950 1,000
General Motors Acceptance Corp.:
6.4%, 5/2/94 Baa1 1,500 1,500
8.70%, 10/17/94 Baa1 1,000 1,016
8.60%, 12/8/94 Baa1 2,725 2,778
8.95%, 12/19/94 Baa1 2,000 2,045
6 1/2%, 1/17/95 Baa1 1,300 1,310
5.55%, 2/16/95 Baa1 16,900 16,911
7.40%, 4/3/95 Baa1 6,800 6,908
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
General Motors Acceptance Corp. - continued
8.60%, 4/5/95 Baa1 $ 1,700 $ 1,745
9.40%, 5/18/95 Baa1 3,350 3,472
Greyhound Financial Corp.:
6.42%, 5/13/94 Baa2 9,600 9,600
5.2%, 8/24/94 Baa2 12,325 12,325
6.94%, 1/28/98 Baa2 4,000 3,976
6.95%, 1/28/98 Baa2 2,000 1,990
Household Finance Corp.:
6 7/8%, 11/15/94 A2 9,350 9,442
9 1/4%, 2/15/95 A2 16,000 16,472
Industrial Finance Corp. Thailand
7 1/4%, 12/2/96 - THB 60,000 2,341
Margaretten Financial Corp. 6 3/4%, 6/15/00 Baa3 6,000 5,670
McDonnell Douglas Finance Corp.:
9 1/2%, 5/20/94 Baa3 1,000 1,002
8.93%, 12/6/94 Ba2 5,100 5,215
Nafin Finance Trust II
6.35625%, 3/31/99 (d) (e) - 11,487 11,343
Tenneco Credit Corp.:
9%, 7/15/95 Baa2 900 930
10 1/8%, 12/1/97 Baa2 2,500 2,726
10.05%, 8/17/98 Baa2 6,850 7,403
Third Mexican Acceptance Corp. coll. gtd. by
NAFIN 7.37%, 3/15/98 (d) - 3,000 2,880
Third Mexican Acceptance Corp. coll. notes gtd.
by Grupo Sidek SA and Grupo Situr SA
10 1/2%, 3/15/98 (d) - 5,500 5,472
U.S. West Financial Services, Inc.
4.89%, 12/11/97 (e) A2 7,400 7,219
Westinghouse Credit Corp.:
8.01%, 5/18/94 Ba1 1,800 1,802
9.31%, 6/1/94 Ba1 1,200 1,205
8.17%, 6/13/94 Ba1 2,000 2,007
9.15%, 6/21/94 Ba1 1,150 1,156
8.73%, 8/8/94 Ba1 1,000 1,020
8.8%, 10/28/94 Ba1 1,200 1,217
8.65%, 11/1/94 Ba1 1,000 1,015
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Westinghouse Credit Corp. - continued
8.63%, 12/20/94 Ba1 $ 1,000 $ 1,019
8.79%, 5/22/96 Ba1 12,000 12,405
8.84%, 10/21/96 Ba1 600 621
9.06%, 6/3/98 Ba1 1,000 1,040
8.93%, 6/22/99 Ba1 2,000 2,050
242,907
INSURANCE - 0.3%
ITT Hartford Group, Inc. 7 1/4%, 12/1/96 A1 5,700 5,774
SAVINGS & LOANS - 1.0%
Ahmanson (H.F.) & Co. 9 7/8%, 11/15/99 Baa3 650 719
Golden West Financial Corp. 10 1/4%, 5/15/97 A3 5,350 5,836
Great Western Bank F.S.B. 9 1/2%, 8/22/94 Baa1 800 811
Home Savings of America 10 1/2%, 6/12/97 Baa1 6,850 7,353
World Savings & Loan 5 1/4%, 2/15/96 A1 5,000 4,950
19,669
TOTAL FINANCE 614,784
HEALTH - 0.3%
MEDICAL EQUIPMENT & SUPPLIES - 0.3%
Cardinal Distribution, Inc. 8%, 3/1/97 Baa1 5,000 5,134
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
ELECTRICAL EQUIPMENT - 0.2%
Westinghouse Electric Corp.:
7 3/4%, 4/15/96 Ba1 2,000 2,028
6 7/8%, 9/1/03 Ba1 2,200 1,961
3,989
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
Tenneco Corp. gtd.:
euro 10 3/4%, 6/15/95 Baa2 3,510 3,685
11%, 11/15/95 Baa2 3,400 3,621
7,306
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 11,295
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 5.1%
BROADCASTING - 2.0%
Tele-Communications, Inc.:
7.13%, 2/02/98 Baa3 $ 6,000 $ 5,959
7 3/8%, 2/15/00 Baa3 5,000 4,823
Time Warner, Inc.:
9 1/2%, 11/1/94 Ba1 1,150 1,171
6.05%, 7/1/95 (d) Ba1 26,000 25,964
37,917
LEISURE DURABLES & TOYS - 1.4%
Brunswick Corp. 8 1/8%, 4/1/97 Baa2 11,525 11,748
Mattel, Inc. 6 7/8%, 8/1/97 Baa2 15,150 15,034
26,782
PUBLISHING - 1.7%
News American Holdings, Inc. gtd. 9 1/8%,
10/15/99 Ba1 23,155 24,130
Time Warner Entertainment Co. LP
9 5/8%, 5/1/02 Baa3 7,825 8,353
32,483
TOTAL MEDIA & LEISURE 97,182
NONDURABLES - 2.5%
BEVERAGES - 0.3%
Fomento Economico Mexicano SA de CV euro
9 1/2%, 7/22/97 - 4,170 4,154
Grupo Embotellador de Mexico SA de CV
10 3/4%, 11/19/97 (d) Ba2 2,000 2,060
6,214
TOBACCO - 2.2%
Empresas La Moderna SA
10 1/4%, 11/12/97 (d) - 4,200 4,326
Philip Morris Companies, Inc.:
9.15%, 9/19/94 A2 500 508
9.4%, 10/1/95 A2 7,150 7,471
8 7/8%, 7/1/96 A2 1,990 2,078
RJR Nabisco, Inc. 9 1/4%, 5/1/95 Baa3 26,000 26,501
40,884
TOTAL NONDURABLES 47,098
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 1.6%
GENERAL MERCHANDISE STORES - 0.6%
Controladora Comercial Mexicana SA de CV
euro 8 3/4%, 4/21/98 - $ 2,800 $ 2,695
Dayton Hudson Corp. 8.94%, 6/30/94 A3 900 906
El Puerto de Liverpool SA de CV
7 1/4%, 10/19/96 (d) - 5,200 4,953
K mart Corp. 12 1/8%, 3/1/95 A3 800 841
Sears Canada, Inc. 11%, 5/18/99 - CAD 1,180 905
10,300
GROCERY STORES - 1.0%
American Stores Co.:
8.21%, 4/16/97 Baa3 1,000 1,035
8 1/4%, 4/21/98 Baa3 4,700 4,864
8.44%, 4/24/98 Baa3 4,700 4,894
Supervalu, Inc. 5 7/8%, 11/15/95 A3 8,900 8,882
19,675
TOTAL RETAIL & WHOLESALE 29,975
SERVICES - 0.4%
ADVERTISING - 0.1%
Valassis Inserts 9 3/8%, 3/15/99 Ba2 1,600 1,658
LEASING & RENTAL - 0.3%
Hertz Corp. 8%, 4/1/95 Baa1 3,910 3,989
Ryder System, Inc. 9 3/8%, 1/15/98 Baa1 1,000 1,025
5,014
TOTAL SERVICES 6,672
TECHNOLOGY - 1.8%
COMPUTERS & OFFICE EQUIPMENT - 1.1%
Comdisco, Inc.:
6 1/2%, 6/15/94 Baa2 6,500 6,511
9.66%, 6/20/94 Baa2 3,000 3,018
8.95%, 5/15/95 Baa2 2,500 2,574
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Comdisco, Inc. - continued
9 3/4%, 1/15/97 Baa2 $ 3,900 $ 4,159
7 3/4%, 1/29/97 Baa2 4,000 4,076
20,338
ELECTRONICS - 0.4%
Grupo Condumex SA de CV (d):
6 1/4%, 7/27/96 - 760 714
7 3/8%, 7/27/98 - 2,600 2,369
Toshiba Corp. euro 10 3/8%, 12/5/95 A1 3,900 4,124
7,207
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 9 1/8%, 3/1/98 A3 5,350 5,492
TOTAL TECHNOLOGY 33,037
TRANSPORTATION - 1.7%
AIR TRANSPORTATION - 0.9%
AMR Corp.:
9.76%, 1/11/96 Baa3 900 938
7 3/4%, 12/1/97 Baa3 6,100 6,078
9 1/2%, 7/15/98 Baa3 1,280 1,337
American Airlines, Inc. secured equipment ctf.
14 3/8%, 1/6/05 Baa1 5,650 6,252
Qantas Airways Ltd. 6 5/8%, 6/30/98 (d) Baa2 3,500 3,384
17,989
SHIPPING - 0.1%
Transportation Maritama Mexico euro
8 3/8%, 10/28/97 (c) - 1,560 1,501
TRUCKING & FREIGHT - 0.7%
Consolidated Freightways, Inc.:
8.83%, 12/15/94 Baa3 3,700 3,774
9 1/8%, 8/15/99 Baa3 1,255 1,298
Federal Express Corp.:
9 3/4%, 5/15/96 Baa3 4,600 4,878
9.96%, 5/18/98 Baa3 2,800 3,052
13,002
TOTAL TRANSPORTATION 32,492
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - 5.9%
ELECTRIC UTILITY - 4.3%
Commonwealth Edison Co.:
8.2%, 6/1/94 Baa1 $ 14,000 $ 14,035
8.98%, 8/1/94 Baa1 2,000 2,019
Gulf States Utilities Co. 9.72%, 7/1/98 Baa3 7,500 8,001
Long Island Lighting Co.:
10 1/4%, 6/15/94 Baa3 18,650 18,753
11 3/4%, 11/15/94 Baa3 10,300 10,638
8 3/4%, 5/1/96 Baa2 5,300 5,548
7.3%, 7/15/99 Baa3 5,000 4,808
Middle South Energy, Inc. 1st mtg. 11%, 5/1/00 Baa3 1,997 1,999
Public Service Co. of New Hampshire 1st mtg.
8 7/8%, 5/15/96 Baa3 6,550 6,786
Systems Energy Resources, Inc. 1st mtg. 14%,
11/15/94 Baa3 3,800 3,954
United Illuminating Co. 7 3/8%, 1/15/98 Baa3 6,550 6,513
83,054
GAS - 1.6%
Houston Natural Gas Corp. 12 1/8%, 4/15/95 Baa2 2,400 2,533
Panhandle Eastern Pipe Line Co. 9 7/8%,
10/15/96 Baa2 21,500 22,106
Southwest Gas Co. 9 3/4%, 6/15/02 Ba1 4,650 4,944
29,583
TOTAL UTILITIES 112,637
TOTAL NONCONVERTIBLE BONDS 1,078,234
TOTAL CORPORATE BONDS
(Cost $1,100,339) 1,080,443
U.S. TREASURY OBLIGATIONS - 1.1%
9 1/4%, 8/15/98
(Cost $20,420) Aaa 18,400 20,243
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 1.1%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.2%
9 1/2%, 1/1/06 Aaa $ 4,343 $ 4,532
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.3%
9%, 4/1/01 to 10/1/06 Aaa 4,873 5,082
12%, 3/1/17 Aaa 761 857
5,939
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.6%
7%, 9/15/22 to 4/15/24 Aaa 6,060 5,686
7 1/2%, 10/15/22 to 12/15/23 Aaa 4,537 4,395
8%, 3/15/17 Aaa 131 131
10,212
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $21,371) 20,683
U.S. GOVERNMENT AGENCY - COLLATERALIZED MORTGAGE OBLIGATIONS - 1.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.8%
9.3%, 4/15/19 Aaa 14,122 15,366
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.3%
7%, 6/25/19 Aaa 2,500 2,488
7 1/2%, 2/25/21 Aaa 2,500 2,517
5,005
TOTAL U.S. GOVERNMENT AGENCY -
COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $20,587) 20,371
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
MBNA Trust 9 1/2%, 10/25/20
(Cost $511) Aaa 494 494
FOREIGN GOVERNMENT OBLIGATIONS - 19.7%
Argentina Republic BOCON:
3.24%, 4/1/01 - ARP 35,477 21,450
3.24%, 9/1/02 - ARP 71,649 35,567
3.24%, 4/1/07 - ARP 12,341 5,238
FOREIGN GOVERNMENT OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
Canadian Province of Quebec 8.35%, 4/4/95 Aa3 $ 2,800 $ 2,877
Danish Government Bullet:
8%, 5/15/03 Aa1 DKK 140,725 22,882
7%, 12/15/04 Aa1 DKK 187,450 28,507
French Government OAT:
8 1/2%, 11/25/02 Aaa FRF 6,900 1,358
8 1/2%, 4/25/03 Aaa FRF 233,314 45,916
6 3/4%, 10/25/03 Aaa FRF 25,000 4,411
5 1/2%, 4/25/04 Aaa FRF 12,000 1,930
Indonesia treasury bills:
0%, 5/13/94 - IDR 4,500,000 2,078
0%, 5/19/94 - IDR 16,350,000 7,538
0%, 1/13/95 - IDR 7,000,000 2,996
Italian Government 11%, 6/1/03 - ITL 14,960,000 10,081
Korea Development Bank:
8.67%, 3/15/95 A1 4,075 4,185
8.68%, 3/15/95 A1 2,800 2,876
7%, 7/15/99 A1 7,000 6,827
Malaysia Government treasury bills:
0%, 5/13/94 - MYR 4,000 1,494
0%, 6/24/94 - MYR 10,050 3,732
Mexican Government:
Adjustabono (h):
6.70%, 5/4/94 AA- MXN 23,286 9,770
5.1%, 7/11/96 AA- MXN 12,052 4,659
Cetes:
0%, 10/6/94 to 3/16/95 - MXN 135,521 38,253
0%, 9/7/95 - MXN 5,173 1,302
0%, 10/11/95 - MXN 83,470 20,751
0%, 11/9/95 - MXN 10,200 2,510
0%, 12/7/95 - MXN 59,133 14,408
0%, 1/11/96 - MXN 14,605 3,516
0%, 2/29/96 Baa1 MXN 52,200 12,358
New Zealand Government 8%, 4/15/04 Aa3 NZD 46,890 28,437
Swedish Government 10 3/4%, 1/23/97 Aa2 SEK 65,800 9,176
United Kingdom 12%, 11/20/98 Aaa GBP 9,530 16,785
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $408,280) 373,868
SUPRANATIONAL OBLIGATIONS - 0.5%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
International Bank for Reconstruction &
Development 4 1/2%, 3/20/03
(Cost $9,560) Aaa JPY 980,000 $ 9,934
MUNICIPAL BONDS - 1.4%
Louisiana Pub. Facs. Auth. Rev. 9.95%, 6/1/96 Baa1 15,000 15,982
Philadelphia Electric Co. 1st & ref. mortgage
8 3/4%, 11/1/94 Baa1 2,715 2,762
Shreveport Louisiana Water & Sewer Rev.
taxable refunding, 0%, 12/1/96 Aaa 3,500 2,931
Virginia State Public School Authority
4 1/4%, 1/1/98 Aa 4,000 3,925
TOTAL MUNICIPAL BONDS
(Cost $26,049) 25,600
OTHER SECURITIES - 8.0%
COLLATERALIZED NOTES - 5.1%
Ridgefield Investments Ltd. sr. notes 0%, 2/2/95
(collateralized by Mexican govt. securities) (d) 34,495 29,011
Wilton Investments Ltd. sr. notes (collateralized
by Mexican gov't. and U.S. gov't. securities)
Series C, 0%, 6/3/94 (g) 68,960 68,626
97,637
INDEXED SECURITIES - 2.9%
AIG Matched Funding Corp. note 11.018%,
9/16/94 (coupon inversely indexed to HELIBOR
and principal indexed to value of 3-year Finnish
securities, both multiplied by 4) (f) 300 260
Bankers Trust Company note:
14.4375% 7/15/94 (indexed to CSK denom.
CEZ a.s. bond 16 1/2%, 6/25/98) 1,250 1,288
9.53034%, 8/23/94 (coupon inversely indexed
to CAD Banker's Acceptance rate and principal
indexed to value of 3-year Canadian securities,
both multiplied by 4) (f) 2,800 2,436
5.6832%, 2/23/95 (coupon inversely indexed
to GBP LIBOR and principal indexed to value
of 2-year United Kingdom securities, both
multiplied by 4) (f) 3,600 3,059
OTHER SECURITIES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A) (000S) (000S)
INDEXED SECURITIES - CONTINUED
Bankers Trust Company note - continued
0.325%, 3/27/95 (coupon inversely indexed
to PIBOR and principal indexed to value of
1-year French securities, both multiplied
by 5.5) (f) $ 4,900 $ 4,758
Bayerische Landesbank cert. of dep. 6.705%,
2/16/95 (coupon inversely indexed to HELIBOR
and principal indexed to value of 2-year Finnish
securities, both multiplied by 3) (f) 6,850 5,459
Citibank Nassau (f):
0%, 12/29/94 (coupon inversely indexed to
CAD Banker's Acceptance rate and principal
indexed to value of 1-year Canadian securities,
both multiplied by 6) 2,300 1,788
5.98%, 2/16/95 (coupon inversely indexed to
GBP LIBOR and principal indexed to value of
2-year United Kingdom securities, both
mulitiplied by 4) 5,000 4,132
6.11%, 2/24/95 (coupon inversely indexed to
GBP LIBOR and principal indexed to value to
2-year United Kingdom securities, both
mulitiplied by 4) 1,200 994
0%, 3/3/95 (coupon inversely indexed to
ITL LIBOR and principal indexed to value of
2-year Italian securities, both
mulitiplied by 4) 4,970 4,624
0%, 3/21/95 (coupon inversely indexed to
PIBOR and principal indexed to value of
1-year French securities, both multiplied
by 5.5) 4,900 4,795
Disney Corp. note 0%, 9/30/94 (coupon
inversely indexed to STIBOR and principal
indexed to value of 2-year Swedish securities,
both multiplied by 5) (f) 6,000 5,103
First Interstate Bancorp floating rate note 4.2%,
2/26/96 (inversely indexed to JPY) (e) 12,900 5,160
Instituto Bancario San Paolo di Torino cert. of dep.
5.99%, 5/23/94 (indexed to spot minus 12-month
oil futures prices) 9,500 8,905
OTHER SECURITIES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A) (000S) (000S)
INDEXED SECURITIES - CONTINUED
Merck & Co., Inc. note 3.78%, 1/25/95 (inversely
indexed to 2-year SEK swap rate, multiplied
by 10) $ 2,100 $ 1,953
54,714
TOTAL OTHER SECURITIES
(Cost $165,076) 152,351
CERTIFICATES OF DEPOSIT - 3.3%
Bangkok Bank Ltd. 8 1/2%, 10/3/94 THB 260,000 10,359
Bank Bumiputra BHD 5 3/4%, 7/5/94 MYR 20,000 7,488
First USA Bank 4.3%, 2/3/95 9,000 8,910
First Bank System 13.2%, 5/2/94 2,000 2,002
Siam Commerce Bank Co. Ltd.:
7 3/8%, 11/7/94 THB 40,000 1,590
6 3/4%, 11/29/94 THB 430,000 16,823
Thai Military Bank Ltd.:
6 7/8%, 6/15/95 THB 270,000 10,588
8.52%, 9/20/96 THB 30,000 1,201
8%, 10/28/96 THB 100,000 3,960
TOTAL CERTIFICATES OF DEPOSIT
(Cost $63,586) 62,921
COMMERCIAL PAPER - 3.8%
Bancomer:
0%, 12/21/95 MXN 11,552 2,756
0%, 12/28/95 MXN 31,058 7,390
Bangkok Bank Ltd. 0%, 7/4/94 THB 15,844 621
Bank Negara Malaysia:
0%, 9/7/94 MYR 45,700 16,703
0%, 5/11/94 MYR 9,960 3,711
0%, 5/25/94 MYR 10,000 3,716
0%, 6/22/94 MYR 40,700 15,117
0%, 6/24/94 MYR 6,540 2,429
Citibank Thailand 0%, 6/28/94 THB 50,000 1,963
Grupo Embotellador de Mexico SA de CV
promissory note 0%, 5/10/94 (d) 2,675 2,671
Grupo Simek 0%, 6/15/94 5,000 4,938
COMMERCIAL PAPER - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A) (000S) (000S)
Nacional Financiera SNC:
0%, 5/19/94 MXN 8,371 $ 2,536
0%, 7/23/96 MXN 4,054 896
Public Bank BHD 0%, 7/13/94 MYR 16,000 5,975
Thai Airways International, Ltd. 0%, 8/1/94 THB 13,128 512
TOTAL COMMERCIAL PAPER
(Cost $73,196) 71,934
REPURCHASE AGREEMENTS - 3.1%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 59,678 59,660
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,968,635) $ 1,898,502
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
9,568 CAD 5/9/94 $ 6,916 $ (136)
(Payable amount $7,052)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.4%
CONTRACTS TO SELL
1,425,775 BEF 5/24/94 41,752 (1,341)
10,791 CAD 5/9/94 7,800 320
184,434 DKK 5/11/94 28,439 (1,313)
7,969 DEM 5/31/94 to 8/1/94 4,808 (187)
374,701 FRF 7/27/94 65,983 (1,324)
10,461,994 ITL 5/24/94 6,579 (417)
2,092,655 JPY 5/20/94 to 8/1/94 20,688 (419)
73,010 SEK 5/25/94 9,560 (427)
TOTAL CONTRACTS TO SELL
(Receivable amount $180,501) $ 185,609 $ (5,108)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 9.8%
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
DKK - Danish krone
FRF - French franc
DEM - German Deutsche mark
IDR - Indonesian rupiah
ITL - Italian lira
JPY - Japanese yen
MYR - Malaysian ringgit
MXN - Mexican peso
NZD - New Zealand dollar
SEK - Swedish krona
THB - Thai baht
LEGEND
(g) Principal amount is stated in United States dollars unless otherwise
noted.
(h) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(i) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(j) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $159,654,000 or 8.1% of net
assets.
(k) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(l) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
(m) Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Sunbelt (Cemex)
Enterprises 8 1/2%,
5/4/95 12/8/93 $ 9,540,000
Wilton Investments Ltd.
sr. notes Series C,
0%, 6/3/94 3/3/93 $ 64,194,000
(n) Principal amount shown is original face amount and does not reflect the
inflation adjustments.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 27.3% AAA, AA, A 28.0%
Baa 33.1% BBB 32.8%
Ba 6.4% BB 3.1%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 11.3% including long-term debt
categorized as other securities. FMR has determined that unrated debt
securities that are lower quality account for 1.4% of the total value of
investment in securities.
Distribution of investments by country, as a percentage of total value of
investment in securities, is as follows:
United States 60.0%
Mexico 15.0
United Kingdom 3.6
Argentina 3.3
Malaysia 3.2
France 2.8
Denmark 2.7
Thailand 2.6
New Zealand 1.5
Supranational 0.5
Others (individually less than 1%) 4.8
TOTAL 100.0%
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,968,648,000. Net unrealized depreciation aggregated
$70,146,000, of which $10,393,000 related to appreciated investment
securities and $80,539,000 related to depreciated investment securities.
At April 30, 1994, the fund had a capital loss carryforward of
approximately $22,261,000 of which $4,373,000, $873,000, $6,892,000,
$7,352,000 and $2,771,000 will expire on April 30, 1996, 1997, 1998, 1999
and 2002 respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 1,898,502
agreements of $59,660) (cost $1,968,635) (Notes 1
and 2) - See accompanying schedule

Long foreign currency contracts held, at value (cost 6,916
$7,052) (Note 2)

Short foreign currency contracts (Note 2) $ (185,609)
Contracts held, at value

Receivable for contracts held 180,501 (5,108)

Cash 4,428

Receivable for investments sold 69,156

Interest receivable 15,299

TOTAL ASSETS 1,989,193

LIABILITIES

Payable for foreign currency contracts held (Note 2) 7,052

Payable for investments purchased 11,883

Net payable for closed foreign currency contracts 32

Payable for fund shares redeemed 4,680

Dividends payable 1,497

Accrued management fee 795

Other payables and accrued expenses 1,062

TOTAL LIABILITIES 27,001

NET ASSETS $ 1,962,192

Net Assets consist of (Note 1):

Paid in capital $ 2,073,632

Distributions in excess of net investment income (8,733)

Accumulated undistributed net realized gain (loss) on (27,330)
investments

Net unrealized appreciation (depreciation) on:

Investment securities (70,133)

Foreign currency contracts (5,244)

NET ASSETS, for 216,204 shares outstanding $ 1,962,192

NET ASSET VALUE, offering price and redemption price per $9.08
share ($1,962,192 (divided by) 216,204 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1994

INVESTMENT INCOME $ 167,373
Interest (Note 5)

EXPENSES

Management fee (Note 4) $ 10,325

Transfer agent fees (Note 4) 5,803

Accounting fees and expenses (Note 4) 555

Non-interested trustees' compensation 14

Custodian fees and expenses 824

Registration fees 114

Audit 72

Legal 33

Miscellaneous 110

TOTAL EXPENSES 17,850

NET INVESTMENT INCOME 149,523

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1 AND 3)
Net realized gain (loss) on:

Investment securities (12,186)

Foreign currency contracts (2,460) (14,646)

Change in net unrealized appreciation (depreciation) on:

Investment securities (95,513)

Foreign currency contracts (479) (95,992)

NET GAIN (LOSS) (110,638)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 38,885
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED APRIL 30,

1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 149,523 $ 125,625
Net investment income

Net realized gain (loss) on investments (14,646) (6,191)

Change in net unrealized appreciation (depreciation) (95,992) 11,236
on
investments

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 38,885 130,670
FROM OPERATIONS

Distributions to shareholders

From net investment income (138,857) (125,365)

In excess of net investment income (8,052) -

TOTAL DISTRIBUTIONS (146,909) (125,365)

Share transactions 2,498,928 2,481,775
Net proceeds from sales of shares

Reinvestment of distributions 124,898 106,299

Cost of shares redeemed (2,543,350) (1,587,320)

Net increase (decrease) in net assets resulting from 80,476 1,000,754
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (27,548) 1,006,059

NET ASSETS

Beginning of period 1,989,740 983,681

End of period (including distributions in excess of net $ 1,962,192 $ 1,989,740
investment income of $(8,733) and $(3,021),
respectively)

OTHER INFORMATION
Shares

Sold 263,357 261,365

Issued in reinvestment of distributions 13,198 11,208

Redeemed (269,588) (167,604)

Net increase (decrease) 6,967 104,969

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 9.510 $ 9.430 $ 9.180 $ 9.170 $ 9.180
period

Income from Investment .588 .744 .810 .792 .778
Operations
Net investment income

Net realized and unrealized (.392) .063 .251 .040 (.010)
gain (loss) on investments

Total from investment .196 .807 1.061 .832 .768
operations

Less Distributions (.592) (.727) (.811) (.822) (.778)
From net investment income

In excess of net investment (.034) - - - -
income

Total distributions (.626) (.727) (.811) (.822) (.778)

Net asset value, end of period $ 9.080 $ 9.510 $ 9.430 $ 9.180 $ 9.170

TOTAL RETURN 1.99% 8.85% 12.00% 9.49% 8.58%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 1,962 $ 1,990 $ 984 $ 235 $ 197
(in millions)

Ratio of expenses to average .80% .77% .86% .83% .83%
net assets

Ratio of net investment income 6.70% 7.68% 8.23% 8.65% 8.28%
to average net assets

Portfolio turnover rate 73% 63% 87% 164% 148%

</TABLE>

NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994

8. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Short-Term Bond Portfolio (the fund) is a fund of Fidelity
Fixed-Income Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities (including restricted securities) for which market quotations
are not readily available are valued at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practicable to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
generally accepted accounting principles. These differences are primarily
due to differing treatments for paydown gains/losses on certain securities,
foreign currency transactions, market discount and losses deferred due to
wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
an increase in paid in capital of $158,000, a decrease in distributions in
excess of net investment income of $2,476,000 and an increase in
accumulated net realized loss on investments of $2,634,000.
9. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase.
OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
The fund's investment adviser, Fidelity Management & Research Company
(FMR), is responsible for determining that the value of these underlying
securities remains at least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
fund to borrow from, or lend money to, other participating funds.
INDEXED SECURITIES. The fund may invest in indexed securities whose value
is linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other reference instruments.
Indexed securities may be more volatile than the reference instrument
itself, but any loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $80,566,000 or 4.1% of net assets.
10. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,314,563,000 and $1,306,715,000, respectively, of which U.S.
government and government agency obligations aggregated $249,667,000 and
$269,359,000, respectively.
11. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is based on the monthly average net assets of all the mutual
funds advised by FMR and, prior to October 20, 1993, was based on the
weighted average of a series of rates ranging from .15% to .37%. On October
20, 1993, the shareholders of the fund approved a revised group fee rate
schedule with rates ranging from .14% to .37%, which had been
FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
voluntarily implemented by FMR on January 1, 1992. The annual individual
fund fee rate is .30%. For the period, the management fee was equivalent to
an annual rate of .46% of average net assets.
Effective November 1, 1993, FMR has voluntarily agreed to implement a new
group fee rate schedule approved by the Board of Trustees with rates
ranging from .1325% to .3700%, as it results in the same or a lower
management fee.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $217,000 for the
period.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
12. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $25,209,000 and $ 16,244,000,
respectively. The weighted average interest rate was 3.4%. Interest earned
from the interfund lending program amounted to $14,000 and is included in
interest income on the Statement of Operations.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Fidelity Short-Term Bond Portfolio:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Fidelity Short-Term Bond Portfolio, including
the schedule of portfolio investments, as of April 30, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Fidelity Short-Term Bond Portfolio as of
April 30, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND
Boston, Massachusetts
June 3, 1994
TO CALL FIDELITY

FOR FUND INFORMATION AND QUOTES
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you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
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FOR A FREE
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INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
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Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
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(2_FIDELITY_LOGOS)SPARTAN(Registered trademark)

SHORT-INTERMEDIATE
GOVERNMENT
FUND
ANNUAL REPORT
APRIL 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 11 A summary of major shifts in the
fund's investments over the last six
months.

INVESTMENTS 12 A complete list of the fund's
investments with their market value.

FINANCIAL STATEMENTS 13 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 17 Footnotes to the financial
statements.

REPORT OF INDEPENDENT 20 The auditor's opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of a $5 account closeout fee. You
can also look at the fund's income.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan Short-Intermediate Government 0.27% 3.71%

Lehman Brothers 1-3 Year Government Bond 1.64% n/a
Index

Average Short-Term U.S. Government Fund 0.59% n/a

Consumer Price Index 2.36% 3.88%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
December 18, 1992. For example, if you invested $1,000 in a fund that had a
5% return over the past year, you would end up with $1,050. You can compare
these figures to the Lehman Brothers 1-3 Year Government Bond Index - a
broad measure of the performance of short-term government bonds. To measure
how the fund stacked up against its peers, you can also look at the average
short-term U.S. government fund, which reflects the performance of 108
funds tracked by Lipper Analytical Services. These benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation. (The CPI returns begin on the month end closest to
the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan Short-Intermediate Government 0.27% 2.70%

Lehman Brothers 1-3 Year Government Bond Index 1.64% n/a

Average Short-Term U.S. Government Fund 0.59% n/a

Consumer Price Index 2.36% 2.90%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
MonthEnd Spartan Shor1-3 Year Gov
12/31/92 10000.00 10000.00
01/31/93 10120.92 10105.00
02/28/93 10208.15 10185.84
03/31/93 10247.69 10217.42
04/30/93 10301.42 10279.74
05/31/93 10297.87 10255.07
06/30/93 10377.83 10331.98
07/31/93 10413.10 10354.71
08/31/93 10480.38 10440.66
09/30/93 10496.10 10474.07
10/31/93 10523.27 10497.11
11/30/93 10502.90 10499.21
12/31/93 10568.05 10541.21
01/31/94 10658.96 10606.56
02/28/94 10563.57 10541.86
03/31/94 10376.93 10488.10
04/30/94 10330.96 10448.24

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Short-Intermediate Government Fund on December 31, 1992, shortly after the
fund started. As the chart shows, by April 30, 1994, the value of your
investment would have grown to $10,331 - a 3.31% increase on your initial
investment. This assumes you still own the fund on April 30, 1994 and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers 1-3 Year Government Bond Index
did over the same period. With dividends reinvested, the same $10,000
investment would have grown to $10,448 - a 4.48% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
DECEMBER 18,
1992
(COMMENCEMEN
YEAR ENDED T OF OPERATIONS)
APRIL 30, 1994 TO APRIL 30, 1993

Dividend return 6.14% 2.53%

Capital appreciation return -5.87% 0.88%

Total return 0.27% 3.41%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation returns and total returns include the
effect of the $5 account closeout fee on an average sized account.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.76(cents) 30.25(cents) 62.68(cents)

Annualized dividend rate 6.08% 6.22% 6.31%

30-day annualized yield 5.09% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.52 over
the past month, $9.81 over the past six months and $9.92 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. If the adviser had not reimbursed certain fund expenses
during the periods shown, the yield would have been 4.16% and the dividend
rate and total returns would have been lower.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Generally, falling interest rates
pushed up U.S. bond prices from
May through mid-October 1993,
when the yield on the benchmark
30-year Treasury bond reached a
historic low of 5.79%. Yields then
moved within a narrow range until
early February 1994, when the
Federal Reserve Board raised
the federal funds rate - the rate
banks charge each other for
overnight loans - from 3.00% to
3.25%. That rate hike - and two
more in March and April - ignited
heavy selling in the U.S. bond
market through the end of the
period, as investors feared a
stronger economy might lead to
higher inflation. As yields rose
sharply - the 30-year Treasury
was yielding 7.30% by April 30 -
prices fell. For the 12 months
ended April 30, the Lehman
Brothers long-term Treasury
index had a total return (yield plus
price change) of 1.42%. A
broader measure of the U.S.
bond market, the Lehman
Brothers Aggregate Bond Index,
returned 0.85% during the period.
The negative effects of rising
interest rates on high-yield bonds
were somewhat offset by
improvements in their credit
quality due to the improving
economy. The Salomon Brothers
Composite High Yield Index rose
6.16%. Worldwide, the falling
U.S. bond market helped trigger
corrections - some severe - in
most foreign markets. The J.P.
Morgan Emerging Market Bond
Index dropped more than 18%
from January through April 1994,
but finished up 6.87% for the 12
months ended April 30.
An interview with Curt Hollingsworth, Portfolio Manager of Spartan
Short-Intermediate Government Fund
Q. CURT, HOW DID THE FUND PERFORM?
A. Not as well as I would have liked. The best way to measure the fund's
performance is by its total return. This reflects interest payments, plus
capital gains - which occur when the fund profits from selling bonds that
have grown in value - and changes in share price. For the year ended April
30, 1994, the fund had a total return of 0.27%. According to Lipper
Analytical Services, the average short-term U.S. government bond fund had a
return of 0.59%.
Q. IT SOUNDS LIKE THE BOND MARKET WASN'T VERY STRONG OVER THE PAST YEAR.
WHAT HAPPENED?
A. The last six months were tough for the bond market. Bond prices fell
during those months for several reasons. First, the economy started growing
more quickly and commodity prices began rising. This situation was bad news
for bond investors because the improving economy increased concerns about
inflation - which eats away at a bond's fixed interest payment. Another
reason bond prices dropped was that the Federal Reserve Board raised
short-term interest rates in February, March and April of 1994. In
response, yields on intermediate and long-term Treasuries also rose. During
the past six months of the period, the yield on the five-year Treasury note
increased from 4.8% to 6.6%. Keep in mind that bond yields and prices move
in opposite directions. So the rise in yields meant the prices of bonds
fell.
Q. WHY DID THE DOWNTURN HURT THE FUND MORE THAN ITS COMPETITORS?
A. The fund's share price fell more than that of similar funds during the
past year because it had a longer duration than most of those funds.
Duration is a way to measure how sensitive a bond is to changes in interest
rates. It looks at a bond's maturity, or how much time remains until the
issuer is scheduled to pay off the principal, as well as the frequency and
amount of interest payments. The longer the average duration of the fund,
the more its share price will move up as rates fall, or down as rates rise.
For example, if the fund had a duration of 2.5 years and interest rates
rose 1%, its share price would fall roughly 2.5%. Conversely, if interest
rates fell 1%, its share price would rise about 2.5%. While having a longer
duration than similar funds over the past six months resulted in lower
performance, I believe that keeping the fund's duration fairly long could
pay off if interest rates turn around and the market improves.
Q. AS YOU JUST NOTED, THE FED HAS HIKED INTEREST RATES OVER THE LAST FEW
MONTHS. HAS THE GENERAL RISE IN INTEREST RATES AFFECTED MORTGAGE
PREPAYMENTS?
A. Yes. As of the end of the period, there was less prepayment activity -
fewer homeowners were refinancing their existing mortgages at lower
interest rates. The general rule is that as interest rates go up,
prepayment rates go down. That's because higher interest rates make
refinancing a house less attractive.
Q. DID YOU CHANGE THE FUND'S STRATEGY IN LIGHT OF WHAT WAS HAPPENING IN THE
BOND MARKET?
A. No, the fund's overall strategy remains the same. The fund is still
using duration averaging - a disciplined approach to managing the fund's
duration. Using this strategy, I lengthen the average maturity and duration
of the fund after interest rates rise, causing the fund to become more
aggressively positioned after bond prices fall. Conversely, I invest in
bonds with shorter maturities after interest rates fall, causing the fund
to become more defensively positioned after bond prices rise. This
strategy, which is contrary to that of many other bond funds, hopefully
will help the fund outperform most of its competitors over the long haul.
That said, I have made some changes to the way the fund uses duration
averaging.
Q. HOW DID YOU CHANGE DURATION
AVERAGING?
A. I'm now using a more disciplined approach in which I compare bond yields
available today with average bond yields over the past 40 years. This new
approach looks at both nominal yields and real yields. Nominal yields are
the yields to maturity you see quoted in the newspaper. Real yields are
simply these yields minus the inflation rate. For example, at the end of
the period on April 30, 1994, five-year Treasury notes yielded 6.6%, and
consumer prices rose 2.4% over the previous 12 months. This gave us a real
yield of 4.2%.
Q. HOW DO THESE YIELDS COMPARE WITH YIELDS OVER THE PAST 40 YEARS?
A. The average nominal yield was 6.0%, and 58% of the time it was lower
than today's yield of 6.6%. The average real yield was 2.4%, and 78% of the
time real yields were lower than today's real yield of 4.2%. So, when
compared to historical averages, today's nominal yields are modestly
attractive, and today's real yields are very attractive. As a result, the
fund's duration is now 2.7 years, longer than its neutral duration of 2.5
years, but shorter than its target maximum duration of three years.
Q. IT'S SOMEWHAT CONFUSING TO THINK ABOUT HIGH YIELDS AS BEING ATTRACTIVE
FOR THE FUND BECAUSE RISING BOND YIELDS MEAN FALLING BOND PRICES.
A. I think the best way to understand the concept of yield is to remember
that the fund buys bonds with long maturities after yields have risen and
sells them after yields have fallen. When bond yields are relatively high,
as they are today, they make great buys. Shareholders also should remember
that most of the average total return for bonds over the long term comes
from income, or interest payments, not from capital gains. When yields are
high, bonds produce more income, which can compensate shareholders for
falling bond prices.
Q. LET'S SWITCH DIRECTION A BIT AND TALK ABOUT DERIVATIVES . . .
A. While the fund has the authority to use futures contracts or other
derivatives, I haven't used them much in the past because I've been able to
implement my strategies without them. However, I might use them in the
future, either for hedging or arbitrage purposes.
Q. THINKING BACK OVER THE PAST SIX MONTHS, WOULD YOU CHANGE SOME OF YOUR
INVESTMENT DECISIONS?
A. Yes. I would have made the average duration of the fund shorter when
interest rates reached their low point of the year on October 15, 1993.
That way the fund would have been able to respond better to the rise in
interest rates after that date.
Q. HOW DOES THE FUND LOOK GOING FORWARD?
A. Forecasting interest rates is extraordinarily difficult. However, I'm
feeling fairly optimistic because I think that inflation will remain under
control. Over the long haul, inflation is the single most important
variable affecting bond market performance.

FUND FACTS
GOAL: high current income
with preservation of capital
START DATE: December 18,
1992
SIZE: as of April 30, 1994,
more than $53 million
MANAGER: Curt Hollingsworth,
since December 1992; also
manages Fidelity Advisor
Government Investment,
Fidelity Government
Securities, Spartan Limited
Maturity Government,
Spartan Long-Term
Government Bond, and
Short-
Intermediate Government
Funds
(checkmark)
CURT HOLLINGSWORTH ON THE
CURRENT BOND MARKET:
"Bond prices fell considerably
over the six months ended
April 30, 1994. Because
yields had risen and prices
had fallen, the end of the
period was an ideal time to
buy bonds, not to sell them.
As a general rule, this fund
invests for the long term and
its strategy is not dramatically
affected by the ups and
downs of the bond market."
(bullet) On April 30, 1994, the fund
held 52.5% in Ginnie Maes,
28.4% in U.S. Treasuries, and
19.1% in cash and short term
investments. Over the past six
months, the fund shifted more
of its assets to cash to protect
the fund's share price from the
rising interest rate
environment.
DISTRIBUTIONS
55.3% of the dividends
distributed during the fiscal
year was derived from
interest on U.S. Government
securities generally exempt
from state income tax. The
fund will notify shareholders in
January 1995 of the
applicable percentage for
calendar year 1994 for use in
preparing 1994 income tax
returns.
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF APRIL 30, 1994
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Under 6% 0.0 2.3

6 - 6.99% 0.3 0.3

7 - 7.99% 22.5 22.5

8 - 8.99% 6.8 48.5

9 - 9.99% 38.7 21.9

10 - 10.99% 12.2 3.5

11 and over 0.4 0.7

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1994
6 MONTHS AGO

Years 4.6 4.8

AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL ON THE
FUND'S BONDS IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF APRIL 30, 1994
6 MONTHS AGO

Years 2.7 2.3

DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, A BOND WITH A FIVE-YEAR DURATION WILL
LOSE ABOUT 2.7% OF ITS VALUE.
ASSET ALLOCATION
AS OF APRIL 30, 1994 AS OF OCTOBER 31, 1993
Row: 1, Col: 1, Value: 19.1
Row: 1, Col: 2, Value: 28.4
Row: 1, Col: 3, Value: 52.5
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 56.7
Row: 1, Col: 3, Value: 43.0
Mortgage-backed
securities 52.5%
U.S. government
and government
agency obligations 28.4%
Short-term and
other investments 19.1%

Mortgage-backed
securities 43.0%
U.S. government
and government
agency obligations 56.7%
Short-term and
other investments 0.3%

INVESTMENTS APRIL 30, 1994

Showing Percentage of Total Value of Investments

U.S. TREASURY OBLIGATIONS - 28.4%
SHARES VALUE (NOTE 1)
9 1/4%, 1/15/96 to 8/15/98
(Cost $15,640,311) $ 14,250,000 $ 15,122,370
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 52.5%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 52.5%
6 1/2%, 11/15/23 201,163 182,053
7%, 9/15/15 to 8/15/23 3,587,408 3,366,536
7 1/2%, 6/15/15 to 4/15/23 8,861,186 8,584,280
8%, 6/15/17 to 8/15/22 2,369,428 2,359,064
8 1/2%, 2/15/17 to 7/15/17 1,248,885 1,277,178
9%, 7/15/15 to 10/15/22 3,650,069 3,789,189
9 1/2%, 8/15/21 to 10/15/21 1,602,796 1,689,444
10%, 6/15/13 to 4/15/21 5,745,549 6,186,093
10 1/2%, 11/15/19 283,633 315,096
13%, 9/15/14 186,942 220,705
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES (Cost $29,470,471) 27,969,638
REPURCHASE AGREEMENTS - 19.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 10,160,013 10,157,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $55,267,782) $ 53,249,008
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $55,317,938. Net unrealized depreciation aggregated
$2,068,930, of which $4,383 related to appreciated investment securities
and $2,073,313 related to depreciated investment securities.
At April 30, 1994, the fund had a capital loss carryforward of
approximately $168,000 all of which will expire on April 30, 2002.
The fund has elected to defer to its fiscal year ending April 30, 1995
$1,519,000 of losses recognized during the period November 1, 1993 to April
30, 1994.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 53,249,008
agreements of $10,157,000) (cost $55,267,782)
(Notes 1 and 2) - See accompanying schedule

Cash 170

Interest receivable 564,406

TOTAL ASSETS 53,813,584

LIABILITIES

Payable for fund shares redeemed $ 47,289

Dividends payable 36,141

Accrued management fee 4,590

TOTAL LIABILITIES 88,020

NET ASSETS $ 53,725,564

Net Assets consist of (Note 1):

Paid in capital $ 57,570,912

Distributions in excess of net investment income (87,429)

Accumulated undistributed net realized gain (loss) on (1,739,145)
investments

Net unrealized appreciation (depreciation) on investment (2,018,774)
securities

NET ASSETS, for 5,663,829 shares outstanding $ 53,725,564

NET ASSET VALUE, offering price and redemption price per $9.49
share ($53,725,564 (divided by) 5,663,829 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1994

INVESTMENT INCOME $ 4,585,781
Interest

EXPENSES

Management fee (Note 4) $ 400,737

Non-interested trustees' compensation 25

Interest (Note 5) 466

Total expenses before reductions 401,228

Expense reductions (Note 6) (341,347) 59,881

NET INVESTMENT INCOME 4,525,900

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,409,978)
(NOTES 1 AND 3)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (1,986,615)
investment securities

NET GAIN (LOSS) (4,396,593)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 129,307
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 18,
APRIL 30, 1994 1992
(COMMENCEMENT
OF
OPERATIONS) TO
APRIL 30, 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 4,525,900 $ 628,222
Net investment income

Net realized gain (loss) on investments (2,409,978) (21,639)

Change in net unrealized appreciation (depreciation) (1,986,615) (32,159)
on
investments

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 129,307 574,424
FROM OPERATIONS

Distributions to shareholders (3,830,040) (592,663)
From net investment income

In excess of net investment income (64,564) -

In excess of net realized gain (57,694) -

TOTAL DISTRIBUTIONS (3,952,298) (592,663)

Share transactions 74,995,739 63,540,502
Net proceeds from sales of shares

Reinvestment of distributions 2,805,719 547,657

Cost of shares redeemed (75,106,348) (9,216,475)

Net increase (decrease) in net assets resulting from 2,695,110 54,871,684
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (1,127,881) 54,853,445

NET ASSETS

Beginning of period 54,853,445 -

End of period (including under (over) distribution of net $ 53,725,564 $ 54,853,445
investment income of $(87,429) and $35,559,
respectively)

OTHER INFORMATION
Shares

Sold 7,484,068 6,296,291

Issued in reinvestment of distributions 344,283 54,263

Redeemed (7,602,226) (912,850)

Net increase (decrease) 226,125 5,437,704

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 18,
APRIL 30, 1992
(COMMENCEMENT
OF
OPERATIONS) TO
APRIL 30,

1994 1993

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.090 $ 10.000

Income from Investment Operations .616 .257
Net investment income

Net realized and unrealized gain (loss) on (.579) .083(diamond)
investments

Total from investment operations .037 .340

Less Distributions (.617) (.250)
From net investment income

In excess of net investment income (.010) -

In excess of net realized gain on investments (.010) -

Total distributions (.637) (.250)

Net asset value, end of period $ 9.490 $ 10.090

TOTAL RETURN (dagger) (double dagger) .29% 3.43%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 53,726 $ 54,853

Ratio of expenses to average net assets ** .10% .02%*

Ratio of expenses to average net assets before expense .65% .65%*
reductions **

Ratio of net investment income to average net assets 7.33% 7.28%*

Portfolio turnover rate 271% 587%*

</TABLE>

* ANNUALIZED
** SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS.
(dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(double dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(diamond) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND
WITH THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD ENDED DUE TO THE
TIMING OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994

13. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Short-Intermediate Government Fund (the fund) is a fund of Fidelity
Fixed-Income Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which market quotations are not readily available are valued
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
paydown gains/losses on certain securities. The fund also utilized earnings
and profits distributed to shareholders on redemption of shares as a part
of the dividend paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure,
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a result, the fund
changed the classification of distributions to shareholders to better
disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
a decrease in paid in capital of $193, a decrease in undistributed net
investment income of $58,231 and a decrease in accumulated net realized
loss on investments of $58,424.
14. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The fund
may receive compensation for interest forgone in a delayed delivery
transaction. The fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the purchase
commitment.
15. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $155,442,752 and $157,506,555, respectively.
16. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .65% of the fund's average net
assets.
FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
Effective June 1, 1993, FMR voluntarily agreed to temporarily limit the
fund's total expenses (excluding interest, taxes, brokerage commissions,
and extraordinary expenses) to an annual rate of .10% of the fund's average
net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $3,548.
17. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $2,584,000 and $2,305,000,
respectively. The weighted average interest rate was 3.65%.
18. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During the
period, this expense limitation ranged from .05% to .10% of average net
assets and the reimbursement reduced expenses by $341,347.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Spartan Short-Intermediate Government Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan Short-Intermediate Government Fund,
including the schedule of portfolio investments, as of April 30, 1994, and
the related statement of operations for the year then ended, the statement
of changes in net assets and the financial highlights for the year then
ended and for the period December 18, 1992 (commencement of operations) to
April 30, 1993. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan Short-Intermediate Government Fund
as of April 30, 1994, the results of its operations for the year then
ended, the changes in its net assets and the financial highlights for the
year then ended and for the period December 18, 1992 (commencement of
operations) to April 30, 1993, in conformity with generally accepted
accounting principles.
/s/COOPERS & LYBRAND
Coopers & Lybrand
Boston, Massachusetts
June 3, 1994
TO CALL FIDELITY

FOR PORTFOLIO INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you to set up your Personal Identification Number (PIN). The PIN assures
that only you have automated telephone access to your account information.
Please have your Customer Number (T-account #) handy when you call --
you'll need it to establish your PIN. If you would ever like to change your
PIN, just choose the "Change your Personal Identification Number" option
when you call. If you forget your PIN, please call a Fidelity
representative at 1-800-544-6666 for assistance.

(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
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1
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2
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3
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Portfolios(registered trademark).
4
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Identification Number (PIN).
5
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representative.
6
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Just make a selection from this record-
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PRESS
For balances on funds you own.
1
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(purchases, redemptions, and
dividends).
2
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3
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representative.
4
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
1800 Avenue of the Stars
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
2101 Hurley Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road, South
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
9 South LaSalle Street
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
107 Exchange Street
Portland, ME
MARYLAND
5 West Baltimore Street
Baltimore, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
44 Front Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
1 North Broadway
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
175 East Houston Street
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1800 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI

INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
Ginnie Mae
Global Bond
Government Securities
Intermediate Bond
Investment Grade Bond
Mortgage Securities
New Markets Income
Short-Intermediate Government
Short-Term Bond
Short-Term World Income
Spartan Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity
Government
Spartan Long-Term Government Bond
Spartan Short-Intermediate
Government
Spartan Short-Term Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

(2_FIDELITY_LOGOS)SPARTAN(Registered trademark)

GOVERNMENT INCOME
FUND
ANNUAL REPORT
APRIL 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market value.

FINANCIAL STATEMENTS 14 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 18 Footnotes to the financial
statements.

REPORT OF INDEPENDENT 21 The auditor's opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 closeout fee. You can
also look at the fund's income.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Government Income -1.15% 53.92% 59.81%

Lehman Brothers Government Bond 1.10% 58.39% n/a
Index

Average General U.S. Government
Bond Fund -0.02% 51.05% n/a

Consumer Price Index 2.36% 19.74% 22.32%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on December 20, 1988. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, you would end up with $1,050. You
can compare these figures to the Lehman Brothers Government Bond Index - a
broad measure of the performance of U.S. government bonds. To measure how
the fund stacked up against its peers, you can compare it to the average
general U.S. government bond fund, which reflects the performance of 149
funds tracked by Lipper Analytical Services. This benchmark includes
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation. (The CPI returns begin on the month end closest to
the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Government Income -1.15% 9.01% 9.13%

Lehman Brothers Government Bond 1.10% 9.63% n/a
Index

Average General U.S. Government
Bond Fund -0.02% 8.58% n/a

Consumer Price Index 2.36% 3.67% 3.85%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
MonthEnd Spartan GoveGovernment B
12/31/88 10000.00 10000.00
01/31/89 10175.40 10127.00
02/28/89 10097.77 10044.97
03/31/89 10104.09 10106.25
04/30/89 10313.81 10322.52
05/31/89 10606.34 10566.13
06/30/89 10945.27 10919.04
07/31/89 11196.69 11149.43
08/31/89 10999.20 10962.12
09/30/89 11064.30 11009.26
10/31/89 11349.29 11294.40
11/30/89 11477.31 11403.95
12/31/89 11522.54 11423.34
01/31/90 11374.73 11262.27
02/28/90 11423.41 11284.80
03/31/90 11432.64 11282.54
04/30/90 11290.09 11183.25
05/31/90 11644.07 11495.26
06/30/90 11829.42 11676.89
07/31/90 12017.07 11826.35
08/31/90 11838.33 11661.97
09/30/90 11934.42 11773.92
10/31/90 12100.99 11965.84
11/30/90 12373.82 12231.48
12/31/90 12578.79 12421.07
01/31/91 12724.51 12553.97
02/28/91 12819.09 12625.53
03/31/91 12879.74 12689.92
04/30/91 13014.50 12829.51
05/31/91 13078.93 12879.54
06/30/91 13080.97 12861.51
07/31/91 13251.78 13014.57
08/31/91 13535.40 13316.50
09/30/91 13808.89 13596.15
10/31/91 13957.31 13715.80
11/30/91 14056.63 13852.95
12/31/91 14478.80 14325.34
01/31/92 14300.44 14101.86
02/29/92 14396.78 14156.86
03/31/92 14350.80 14074.75
04/30/92 14452.94 14163.42
05/31/92 14693.76 14425.45
06/30/92 14881.81 14631.73
07/31/92 15120.92 15000.45
08/31/92 15198.56 15139.95
09/30/92 15326.05 15353.43
10/31/92 15148.12 15132.34
11/30/92 15271.77 15106.61
12/31/92 15509.68 15360.40
01/31/93 15678.93 15687.58
02/28/93 15894.54 16001.33
03/31/93 15936.86 16054.14
04/30/93 16060.21 16177.75
05/31/93 16126.32 16159.96
06/30/93 16393.84 16518.71
07/31/93 16488.93 16619.47
08/31/93 16709.99 16990.09
09/30/93 16688.52 17054.65
10/31/93 16720.05 17119.46
11/30/93 16522.77 16931.14
12/31/93 16648.04 16997.17
01/31/94 16896.90 17230.04
02/28/94 16548.51 16864.76
03/31/94 16104.32 16485.30
04/30/94 15876.72 16355.07

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Government Income Fund on December 31, 1988, shortly after the fund
started. As the chart shows, by April 30, 1994, the value of your
investment would have grown to $15,877 - a 58.77% increase on your initial
investment. This assumes you still own the fund on April 30, 1994, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Government Bond Index did over
the same period. With dividends reinvested, the same $10,000 investment
would have grown to $16,355 - a 63.55% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

Dividend return 5.09% 6.81% 8.22% 9.19% 9.37%

Capital appreciation return -6.24% 4.30% 2.82% 6.07% 0.08%

Total return -1.15% 11.11% 11.04% 15.26% 9.45%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee on an average sized account.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.60(cents) 29.23(cents) 57.35(cents)

Annualized dividend rate 5.57% 5.59% 5.33%

30-day annualized yield 5.94% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.04 over
the past month, $10.55 over the past six months and $10.76 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Generally, falling interest rates
pushed up U.S. bond prices from
May through mid-October 1993,
when the yield on the benchmark
30-year Treasury bond reached a
historic low of 5.79%. Yields then
moved within a narrow range until
early February 1994, when the
Federal Reserve Board raised
the federal funds rate - the rate
banks charge each other for
overnight loans - from 3.00% to
3.25%. That rate hike - and two
more in March and April - ignited
heavy selling in the U.S. bond
market through the end of the
period, as investors feared a
stronger economy might lead to
higher inflation. As yields rose
sharply - the 30-year Treasury
was yielding 7.30% by April 30 -
prices fell. For the 12 months
ended April 30, the Lehman
Brothers long-term Treasury
index had a total return (yield plus
price change) of 1.42%. A
broader measure of the U.S.
bond market, the Lehman
Brothers Aggregate Bond Index,
returned 0.85% during the period.
The negative effects of rising
interest rates on high-yield bonds
were somewhat offset by
improvements in their credit
quality due to the improving
economy. The Salomon Brothers
Composite High Yield Index rose
6.16%. Worldwide, the falling
U.S. bond market helped trigger
corrections - some severe - in
most foreign markets. The J.P.
Morgan Emerging Market Bond
Index dropped more than 18%
from January through April 1994,
but finished up 6.87% for the 12
months ended April 30.
An interview with Robert Ives,
Portfolio Manager of Spartan
Government Income Fund
Q. BOB, HOW DID THE FUND DO?
A. It's been a difficult past few months for both the bond market and the
fund. The fund had a total return of -1.15% for the 12 months ended April
30, 1994. The average general U.S. government bond fund returned -0.02%,
according to Lipper Analytical Services.
Q. BOND INVESTORS WERE HIT HARD BY THE MARKET'S DOWNTURN OVER THE PAST FEW
MONTHS. WHAT HAPPENED?
A. After a bond market rally that lasted nearly three years, interest rates
rose sharply from February through April of this year, which sent bond
prices falling. On February 4, the strengthening economy and threat of
future inflation led the Federal Reserve Board to raise short-term interest
rates for the first time in five years, a move that sent fear through the
bond market. Bond investors hate any mention of inflation because inflation
erodes the value of a bond's interest payments, which are paid at a fixed
rate. Two more Fed rate hikes followed in March and April. But by then, the
sell-off was going strong.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF MOST OF ITS PEERS?
A. Two reasons. First, in hindsight, the fund's duration was never quite
where it should have been during the 12 months. Duration is a measure of
the fund's sensitivity to changes in interest rates. From April through
August of last year, the fund had a shorter duration than most of its
peers. That meant the fund's share price didn't rise as quickly when
interest rates fell. Shortly after I took over the fund on October 1, I
began lengthening the duration. Back then, I didn't see any threat of
inflation and felt long-term interest rates would remain stable for a
while. Even after the Fed acted in February, there still were no strong
signs of worsening inflation. Even so, long-term rates rose just as quickly
as short-term rates. Because the fund's duration was longer than most of
its peers, it suffered more when rates went up.
Q. AND SECOND?
A. I kept at least a 50% stake in mortgage-backed securities over the past
six months, which was probably a bit too high. By their nature, mortgage
bonds tend to underperform comparable Treasury bonds when interest rates
make quick, dramatic moves in either direction. That's what happened when
rates spiked upward from February through March. But while this hurt the
fund's performance in the short term, mortgage bonds historically offer
more attractive yields than comparable Treasuries, and may outperform them
over longer periods of time.
Q. YET, THE FUND'S INVESTMENT IN ALL MORTGAGE BONDS HAS DECREASED SLIGHTLY
OVER THE PAST SIX MONTHS, FROM 61.8% ON OCTOBER 31 TO 61.6% ON APRIL 30.
A. That's true. Near the end of the period, I sold a large amount of
mortgage bonds with coupons - stated interest rates - of 11% or higher.
When rates rose, these bonds helped the fund's performance because their
prices didn't fall as fast as comparable Treasuries. By April, the rest of
the market more fully recognized their value, and I sold much of the fund's
stake.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives - financial contracts
whose value "derives" from, or is tied to, another security or market index
- - - - - - because they offer some flexibility. Although I don't use them much, the
fund has invested in derivative mortgage securities, which have more
complex principal and interest payment rules than ordinary mortgage
securities. I selectively invest in them when they offer better value than
other types of mortgage securities. At the end of April, the fund had about
a 2.6% stake in these instruments.
Q. LET'S TALK ABOUT THE NEXT SIX MONTHS. IS THERE REASON FOR OPTIMISM?
A. I think there's a good chance the bond market could remain choppy until
it's clear that the Fed is ready to stop raising short-term interest rates.
That decision will be dictated, in part, by economic growth. If higher
rates start to slow the economy, the Fed may suspend its rate increases,
which could stabilize the bond market. However, if the economic growth
continues unchecked, rates could continue to rise, which doesn't bode well
for bond investors. The good news is, to put it simply, rates are higher
now than they were. And by the end of April, bond prices already reflected
the impact of further Fed rate hikes, which could help limit the potential
for further market downturns going forward. Unfortunately, we've already
paid a hefty price for that level of comfort.
FUND FACTS
GOAL: to provide high current
income by investing primarily
in U.S. government and
government agency
securities
START DATE: December 20,
1988
SIZE: as of April 30, 1994,
more than $286 million
MANAGER: Robert Ives, since
October 1993; manager
Fidelity Ginnie Mae and
Spartan Ginnie Mae Funds
since February 1993; Fidelity
Mortgage Securities
Portfolio, February
1993-July 1993; institutional
mortgage-backed funds,
since May 1991
(checkmark)
BOB IVES ON BOND MARKET
TEMPERAMENT AT THE END OF
APRIL:
"Though interest rates had
already risen quite a bit by the
end of April, investors were still
very skittish. The bond market
downturn happened so rapidly
that it scared many investors.
By the end of April, they were
still selling at the sight of
anything that could indicate
higher inflation was on the way.
"Early in the market downturn,
it appeared investors were
overreacting to the Fed's hikes
in short-term interest rates.
There was still no tangible
threat of inflation, yet investors
were selling bonds like inflation
was right around the corner.
Lately, though, new data has
shown the economy is indeed
growing at a strong rate, which
can increase the likelihood of
inflation. The good news is that
because they had gotten
ahead of themselves, bond
prices generally already
reflected this rise in economic
growth."
DISTRIBUTIONS
20% of the dividends
distributed during the fiscal
year was derived from
interest on U.S. Government
securities generally exempt
from state income tax.
The fund will notify
shareholders in January 1995
of the applicable percentage
for calendar year 1994 for use
in preparing 1994 income tax
returns.
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF APRIL 30, 1994
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Under 6% 5.0 4.6

6 - 6.99% 21.0 5.0

7 - 7.99% 32.6 9.8

8 - 8.99% 8.3 35.2

9 - 9.99% 11.3 12.7

10 - 10.99% 8.2 12.7

11 - 11.99% 1.2 4.9

12 - 12.99% 2.3 5.8

Over 13% 0.3 1.8

Zero Coupon Bonds 0.1 5.9

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1994
6 MONTHS AGO

Years 8.7 13.4

AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL ON THE
FUND'S BONDS IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF APRIL 30, 1994
6 MONTHS AGO

Years 5.5 5.3

DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, A BOND WITH A FIVE-YEAR DURATION WILL
LOSE ABOUT 5% OF ITS VALUE.
ASSET ALLOCATION
AS OF APRIL 30, 1994 AS OF OCTOBER 31, 1993
Row: 1, Col: 1, Value: 9.699999999999999
Row: 1, Col: 2, Value: 9.5
Row: 1, Col: 3, Value: 28.7
Row: 1, Col: 4, Value: 42.8
Row: 1, Col: 5, Value: 52.1
Mortgage-backed
securities 50.2%
U.S. government
and government
agency
obligations 36.6%
Collateralized
mortgage obligations
(CMOs) 11.6%
Other 1.6%
Mortgage-backed
securities 52.1%
U.S. government
and government
agency
obligations 28.7%
Collateralized
mortgage obligations
(CMOs) 9.5%
Other 9.7%
Row: 1, Col: 1, Value: 1.6
Row: 1, Col: 2, Value: 11.6
Row: 1, Col: 3, Value: 36.6
Row: 1, Col: 4, Value: 50.2
Row: 1, Col: 5, Value: 50.2
*
**
* GNMA SECURITIES 21.1%
** GNMA SECURITIES 24.6%
INVESTMENTS APRIL 30, 1994

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 28.7%
SHARES VALUE (NOTE 1)
U.S. TREASURY OBLIGATIONS - 13.6%
4 3/4%, 2/15/97 $ 15,700,000 $ 15,165,258
6 3/8%, 8/15/02 20,000,000 19,218,800
8 1/8%, 8/15/19 6,265,000 6,719,212
41,103,270
U.S. GOVERNMENT AGENCY OBLIGATIONS - 15.1%
Agency for International Development (guaranteed by U.S.
government):
6%, 2/15/99 2,700,000 2,608,497
6.60%, 2/15/08 2,000,000 1,884,280
6.80%, 2/15/12 17,000,000 15,497,370
Federal National Mortgage Association 0%, 11/30/99 606,000 406,141
Financing Corp.:
10.70%, 10/6/17 2,645,000 3,493,053
9.40%, 2/8/18 1,000,000 1,169,060
9.80%, 4/6/18 3,000,000 3,675,000
10.35%, 8/3/18 5,000,000 6,431,250
9.65%, 11/2/18 2,800,000 3,389,750
8.60%, 9/26/19 400,000 438,750
Government Trust Certificates (guaranteed by the Defense
Security Assistance Agency) 9 5/8%, 5/15/02 1,855,000 2,040,500
United States Department of Veterans Affairs
6%, 11/15/16 5,500,000 4,739,453
45,773,104
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $87,953,983) 86,876,374
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 52.1%

FEDERAL HOME LOAN MORTGAGE CORPORATION - 8.9%
8%, 2/1/17 to 3/1/17 1,822,150 1,822,715
8 1/2%, 5/1/16 to 11/1/19 3,663,553 3,729,943
9%, 4/1/20 1,383,954 1,439,410
9 1/2%, 8/1/13 to 11/1/19 2,573,178 2,712,535
10%, 7/1/09 to 8/1/21 6,798,643 7,257,420
10 1/2%, 10/1/15 to 12/1/20 6,640,138 7,233,573
11 1/2%, 8/1/19 737,826 819,445
12%, 9/1/03 to 12/1/15 324,156 366,887
12 1/4%, 3/1/11 to 11/1/15 837,999 946,992
12 1/2%, 2/1/14 303,078 351,570
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
SHARES VALUE (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORPORATION - CONTINUED
13%, 12/1/97 to 6/1/15 $ 154,512 $ 180,788
13 1/2%, 10/1/11 2,093 2,452
26,863,730
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 22.1%
6%, 10/1/23 119,544 105,609
6 1/2%, 4/1/09 to 4/1/24 12,928,984 12,132,472
7%, 11/1/23 to 3/1/24 30,144,787 28,474,827
7%, 5/1/24 (a) 19,400,000 18,320,778
10%, 7/1/04 393,260 416,856
11%, 8/1/10 1,443,981 1,609,130
11 1/4%, 5/1/14 703,345 782,029
12%, 2/1/14 to 3/1/17 3,844,691 4,334,891
13%, 9/1/13 128,830 147,994
13 1/2%, 5/1/11 to 1/1/15 401,413 462,131
66,786,717
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 21.1%
7%, 5/15/23 to 2/15/24 33,348,446 31,295,194
7 1/2%, 3/15/23 to 11/15/23 13,113,967 12,704,167
8%, 9/15/23 12,053,177 11,992,911
8 1/2%, 1/15/06 to 7/15/08 311,326 318,676
9%, 1/15/11 to 9/15/17 4,440,722 4,634,516
9 1/2%, 8/15/09 to 7/15/20 1,777,112 1,875,212
10%, 1/15/16 to 4/15/16 8,246 8,891
11%, 12/15/09 to 6/15/13 120,042 136,679
11 1/2%, 4/15/10 to 4/15/13 195,551 225,375
12%, 4/15/14 20,128 23,450
12 1/2%, 12/15/13 to 8/15/15 656,119 774,226
63,989,297
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $161,881,843) 157,639,744
U.S. GOVERNMENT AGENCY - COLLATERALIZED MORTGAGE OBLIGATIONS - 9.5%
SHARES VALUE (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.4%
9%, 5/15/19 to 4/15/20 $ 13,000,000 $ 13,324,360
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.6%
7.5195%, 8/25/99 60,732 57,696
8.5769%, 8/25/99 INFL (b) 11,349,000 7,830,810
7,888,506
UNITED STATES DEPARTMENT OF VETERANS AFFAIRS - 2.5%
6 1/2%, 7/15/20 9,500,000 7,415,937
TOTAL U.S. GOVERNMENT AGENCY -
COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $32,969,942) 28,628,803
REPURCHASE AGREEMENTS - 9.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56%
dated 4/29/94 due 5/2/94 $ 29,450,734 29,442,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $312,247,768) $ 302,586,921
LEGEND
(o) Security sold on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(p) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. The price may be considerably more volatile than the price of a
comparable fixed rate security.
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $312,018,518. Net unrealized depreciation aggregated
$9,431,597, of which $1,454,160 related to appreciated investment
securities and $10,885,757 related to depreciated investment securities.
The fund intends to elect to defer to its fiscal year ending April 30, 1995
$5,271,000 of losses recognized during the period November 1, 1993 to April
30, 1994.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 302,586,921
agreements of $29,442,000) (cost $312,247,768)
(Notes 1 and 2) - See accompanying schedule

Commitment to sell securities on a delayed delivery $ (18,320,778)
basis

Receivable for securities sold on a delayed delivery 18,496,688 175,910
basis (Note 2)

Receivable for investments sold, regular delivery 43,497,629

Cash 798,782

Interest receivable 2,539,722

TOTAL ASSETS 349,598,964

LIABILITIES

Payable for investments purchased 62,590,380

Dividends payable 195,874

Accrued management fee 158,944

TOTAL LIABILITIES 62,945,198

NET ASSETS $ 286,653,766

Net Assets consist of (Note 1):

Paid in capital $ 303,252,369

Undistributed net investment income 1,429,535

Accumulated undistributed net realized gain (loss) on (8,543,201)
investments

Net unrealized appreciation (depreciation) on:

Investment securities (9,660,847)

Delayed delivery 175,910

NET ASSETS, for 28,658,140 shares outstanding $ 286,653,766

NET ASSET VALUE, offering price and redemption price per $10.00
share ($286,653,766 (divided by) 28,658,140 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1994

INVESTMENT INCOME $ 29,558,048
Interest

EXPENSES

Management fee (Note 4) $ 2,577,718

Non-interested trustees' compensation 2,768

TOTAL EXPENSES 2,580,486

NET INVESTMENT INCOME 26,977,562

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1, 2 AND 3)
Net realized gain (loss) on:

Investment securities (6,621,773)

Futures contracts (71,447) (6,693,220)

Change in net unrealized appreciation (depreciation) on:

Investment securities (19,007,245)

Futures contracts 11,817

Delayed delivery commitments 175,681 (18,819,747)

NET GAIN (LOSS) (25,512,967)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 1,464,595
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED APRIL 30,

1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 26,977,562 $ 34,916,818
Net investment income

Net realized gain (loss) on investments (6,693,220) 17,400,134

Change in net unrealized appreciation (depreciation) (18,819,747) (1,458,641)
on
investments

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,464,595 50,858,311
FROM OPERATIONS

Distributions to shareholders: (21,081,236) (31,550,880)
From net investment income

From net realized gain (3,856,086) (18,668,668)

In excess of net realized gain (6,127,536) -

TOTAL DISTRIBUTIONS (31,064,858) (50,219,548)

Share transactions 76,411,385 214,494,539
Net proceeds from sales of shares

Reinvestment of distributions 26,884,876 45,438,596

Cost of shares redeemed (244,767,610) (285,683,487)

Net increase (decrease) in net assets resulting from (141,471,349) (25,750,352)
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (171,071,612) (25,111,589)

NET ASSETS

Beginning of period 457,725,378 482,836,967

End of period (including undistributed net investment $ 286,653,766 $ 457,725,378
income of $1,429,535 and $3,614,110, respectively)

OTHER INFORMATION
Shares

Sold 7,048,083 19,567,964

Issued in reinvestment of distributions 2,500,119 4,175,048

Redeemed (22,782,018) (26,128,849)

Net increase (decrease) (13,233,816) (2,385,837)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 10.930 $ 10.900 $ 10.640 $ 10.030 $ 10.050
period

Income from Investment .624 .784 .846 .870 .936
Operations
Net investment income

Net realized and unrealized (.720) .370 .294 .610 .010
gain (loss) on investments

Total from investment (.096) 1.154 1.140 1.480 .946
operations

Less Distributions (.574) (.704) (.840) (.870) (.936)
From net investment income

From net realized gain on (.100) (.420) (.040) - (.030)
investments

In excess of net realized (.160) - - - -
gain
on investments

Total distributions (.834) (1.124) (.880) (.870) (.966)

Net asset value, end of period $ 10.000 $ 10.930 $ 10.900 $ 10.640 $ 10.030

TOTAL RETURN(dagger)(double dagger) (1.14) 11.12 11.05 15.27 9.47
% % % % %

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 286,654 $ 457,725 $ 482,837 $ 430,443 $ 282,555
(000 omitted)

Ratio of expenses to average .65% .65 .65 .53 .16
net assets % % % %

Ratio of expenses to average .65% .65 .65 .65 .65
net assets before expense % % % %
reductions

Ratio of net investment income 6.79% 7.11 7.77 8.35 9.02
to average net assets % % % %

Portfolio turnover rate 354% 170 59 96 68
% % % %

</TABLE>

(dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(double dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994

19. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Government Income Fund (the fund) is a fund of Fidelity
Fixed-Income Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which market quotations are not readily available are valued
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
paydown gains/losses on certain securities and futures and options
transactions. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
an increase in paid in capital of $1,301,851, a decrease in undistributed
net investment income of $3,630,380 and an increase in accumulated net
realized gain on investments of $2,328,529.
20. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The fund
may receive compensation for interest forgone in a delayed delivery
transaction. The fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the purchase
commitment.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
write options. These investments in-
volve, to varying degrees, elements of market risk and risks in excess of
the amount recognized in the Statement of Assets and Liabilities. The face
or con-
tract amounts reflect the extent of the involvement the fund has in the
particular classes of instruments. Risks may be caused by an imperfect
correlation between movements in the price of the instruments and the price
of the underlying securities and interest rates. Risks also may arise if
there is an illiquid
OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
secondary market for the instruments, or due to the inability of
counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
21. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $1,374,936,315 and $1,574,601,610, respectively.
The market value of futures contracts closed amounted to $4,500,000.
22. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays all expenses
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.65% of each fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $28,139.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-
Income Trust and the Shareholders of Spartan Government Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan Government Income Fund, including the
schedule of portfolio investments, as of April 30, 1994, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included con- firmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement

presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan Government Income Fund as of April
30, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
/s/COOPERS & LYBRAND
Coopers & Lybrand
Boston, Massachusetts
June 3, 1994
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Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
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Richard J. Flynn*
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E. Bradley Jones*
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Thomas R. Williams*
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The Bank of New York
New York, NY
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(2_FIDELITY_LOGOS)SPARTAN

HIGH INCOME
FUND
ANNUAL REPORT
APRIL 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market value.

FINANCIAL STATEMENTS 25 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 29 Footnotes to the financial
statements.

REPORT OF INDEPENDENT 32 The auditor's opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan High Income 12.69% 97.25%

Merrill Lynch High Yield Master Index 7.66% n/a

Average High Current Yield Fund 8.16% n/a

Consumer Price Index 2.36% 12.01%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year or since the fund began on
August 29, 1990. For example, if you invested $1,000 in a fund that had a
5% return you would end up with $1,050. You can compare the fund's returns
to those of the Merrill Lynch High Yield Master Index - a broad measure of
the high yield bond market. You can also compare these figures to the
average high current yield fund, which reflects the performance of over 95
funds tracked by Lipper Analytical Services. These benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan High Income 12.69% 20.31%

Merrill Lynch High Yield Master Index 7.66% n/a

Average High Current Yield Fund 8.16% n/a

Consumer Price Index 2.36% 3.14%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
08/31/90 10000.00 10000.00
09/30/90 9666.58 9565.08
10/31/90 9488.97 9321.68
11/30/90 9712.91 9400.64
12/31/90 9879.66 9536.10
01/31/91 10039.05 9670.90
02/28/91 10651.21 10388.71
03/31/91 11174.31 10835.32
04/30/91 11458.94 11221.24
05/31/91 11606.17 11276.04
06/30/91 11899.81 11502.87
07/31/91 12288.56 11778.49
08/31/91 12387.49 12026.05
09/30/91 12558.12 12179.23
10/31/91 13022.90 12541.14
11/30/91 13174.26 12686.00
12/31/91 13272.68 12833.38
01/31/92 13875.84 13282.07
02/29/92 14386.68 13611.94
03/31/92 14757.51 13801.86
04/30/92 14868.94 13902.32
05/31/92 15045.73 14124.07
06/30/92 15268.46 14299.56
07/31/92 15561.56 14589.28
08/31/92 15833.91 14782.43
09/30/92 16003.58 14950.86
10/31/92 15772.91 14762.03
11/30/92 15906.16 14971.10
12/31/92 16126.52 15163.87
01/31/93 16524.61 15537.26
02/28/93 16871.10 15831.36
03/31/93 17288.89 16105.83
04/30/93 17390.22 16221.43
05/31/93 17600.84 16439.79
06/30/93 18208.26 16748.66
07/31/93 18446.38 16928.68
08/31/93 18600.85 17090.06
09/30/93 18663.16 17174.39
10/31/93 19072.16 17497.91
11/30/93 19362.08 17593.61
12/31/93 19652.41 17769.53
01/31/94 20316.94 18130.24
02/28/94 20313.38 18072.38
03/31/94 19820.43 17615.87
04/30/94 19726.64 17463.29

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan High
Income Fund on August 31, 1990, shortly after the fund started. As the
chart shows, by April 30, 1994, the value of your investment would have
grown to $19,599 - a 95.99% increase on your initial investment. This
assumes you still own the fund on April 30, 1994, and therefore does not
include the effect of the $5 account closeout fee. For comparison, look at
how the Merrill Lynch High Yield Master Index did over the same period.
With dividends reinvested, the same $10,000 investment would have grown to
$17,463 - a 74.63% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED APRIL 30, AUGUST 29, 1990
(COMMENCEMENT
OF
OPERATIONS DATE)
TO APRIL 30,

1994 1993 1992 1991

Dividend return 8.94% 10.88% 14.44% 8.93%

Capital appreciation return 3.75% 6.07% 15.30% 6.39%

Total return 12.69% 16.95% 29.74% 15.32%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price based on the gains it has from selling bonds that have
grown in value, and changes in the value of the bonds the fund still holds.
Both returns assume the dividends or gains are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 6.52(cents) 61.15(cents) 105.38(cents)

Annualized dividend rate 6.66% 9.96% 8.48%

30-day annualized yield 8.01% n/a n/a

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.91 over
the past month, $12.38 over the past six months, $12.43 over the past year,
you can compare the fund's income over these three periods. The 30-day
annualized YIELD is a standard formula for all bond funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
PRESIDENT'S MESSAGE

MARKET RECAP
A sharp correction from
February through April 1994
dampened returns for high-yield
bond investors during the 12
months ended April 30, 1994.
However, during that period,
high-yield issues easily
outpaced the rest of the bond
market. The Salomon Brothers
Composite High Yield Index had
a total return of 6.16% for the 12
months, compared to a 0.85%
total return for the Lehman
Brothers Aggregate Bond Index
- - - - - - a broader measure of bond
market performance. From May
through December 1993,
generally falling interest rates
and a strengthening U.S.
economy helped create a
favorable investing environment
for high-yield bonds. As the
economy gained momentum,
many companies were able to
cut costs and refinance
shorter-term debt. That helped
boost the credit ratings of their
high-yield bonds, which led to
higher prices in the marketplace.
However, in February 1994, the
Federal Reserve Board -
concerned that the improving
economy might trigger higher
inflation - raised short-term
interest rates for the first time in
five years. That rate hike - and
two more in March and April -
ignited heavy selling in all
sectors of the bond market.
Despite the positive effects of
the economic recovery, the
Salomon Brothers High Yield
index fell 5.81% during the three
months ended April 30.
Interview with David Glancy, Portfolio Manager of Spartan High Income
Q. DAVID, HOW HAS THE FUND PERFORMED?
A. The fund had a total return of 12.69% for the year ended April 30, 1994.
That beat the 8.16% total return of the average high yield fund, according
to Lipper Analytical Services.
Q. WHAT HELPED THE FUND DO BETTER THAN THE AVERAGE?
A. Since taking over the fund a year ago, I have reduced the number of
positions and increased the average size of those positions. The fund had
roughly 100 different securities at the end of the period, compared to
about 160 a year earlier. I've built positions in names that I really like
and have also invested in some special situations that did well despite the
recent weak bond market. After enjoying fairly strong gains in 1993, the
high yield bond market - like other fixed income markets - was hurt by
rising interest rates in 1994. When interest rates rose and the junk bond
market fell, the fund did better than the average because we owned
securities that were event-driven, not market-driven. That strategy worked
in our favor despite the overall market decline. One example was R.H. Macy
bank debt, which rose when Federated Stores bid for the company. Another
example was Trizec, a Canadian real estate company. The company is making
progress on a restructuring effort and is doing better than many people
thought it would.
Q. WHAT OTHER FACTORS HELPED
PERFORMANCE?
A. With about 90% of the market trading above par value in January,
avoiding credit mistakes was more important than looking for capital gains.
Interest rate and credit risk were high coming into 1994. So I concentrated
positions in strong credits with adequate yield premiums to treasuries.
Having said that, not all the fund's investments were winners. Revlon
continued to be disappointing. Like most cosmetics companies, Revlon has
suffered from a tough economic market for its products and the company's
bonds have not performed as I had hoped.
Q. WHAT'S THE ATTRACTION TO TWO OF THE FUND'S LARGEST HOLDINGS - U.S. HOME
AND SCI TELEVISION?
A. U.S. Home is a national home-building company which has benefitted from
a rise in home construction. I bought the company's bonds as it was
preparing to emerge from bankruptcy, and it has done pretty well since
then. The reorganization plan essentially gave bondholders new bonds, cash
and common stock in the "new" U.S. home. SCI is a television company that
went into bankruptcy. Investor Ronald Perleman bought it and issued bonds
that were attractively structured. The bonds were secured - which is very
rare - by the stock of the television station subsidiaries. They also
provided protection from the company adding additional debt, which would
dilute the value of the existing debt. SCI bonds currently provide an 11%
rate of return, which I think is very attractive right now.
Q. RECENTLY THERE HAS BEEN SOME CONCERN ABOUT GAMING AND CASINO COMPANIES.
WHAT'S YOUR OUTLOOK FOR THIS INDUSTRY?
A. I'm still optimistic, despite some recent investor concern. What's
causing that concern is that the state of Missouri recently ruled against
allowing games of chance - like slot machines - in the state. Fortunately,
the fund didn't have any stake in casinos that were very dependent on
Missouri's gaming business. Despite the temporary setback, I'm optimistic
that the industry has a bright future as more local and state governments
legalize casino gambling as a way to boost their local economies. For these
reasons, I continued to maintain investments in companies such as Bally
Casinos and Boyd Gaming.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. When we started 1994, the high yield market had just come off three
straight years of 20% or more rates of return. Looking ahead, I would
caution investors to expect at best only the coupon rate on new issues -
which is about 10% in most cases. No matter which way the markets go, I'll
continue to concentrate on avoiding credit mistakes first and then earning
an attractive yield compared to yields on treasuries.

FUND FACTS
GOAL: high current income
by investing primarily in
high-yielding securities
including income-producing
debt securities, preferred
stocks, convertible
securities, and zero coupon
bonds
START DATE: August 29, 1990
SIZE: as of April 30, 1994,
over $640 million
MANAGER: David Glancy,
since April 1993; joined
Fidelity in 1990
(checkmark)
DAVID GLANCY'S INVESTMENT
PHILOSOPHY:
"I don't make sector bets, I
invest in companies. I judge
each company on its
individual merits, looking for
those with established
business franchises in
industries with reasonable
prospects. I focus on
companies with strong cash
flow, high returns on invested
capital, and a commitment to
de-lever, or reduce debt. Risk
of loss is always the first
assessment, followed by
adequacy of return."
(bullet) Corporate bonds totaled
70% of investment at the end
of April (see page 11). Among
the major corporate bond
holdings were Boyd Gaming
and U.S. Home.
(bullet) Preferred and common
stocks were 12.9% of the
fund's investments on April
30, 1994. Bank debt made up
6.3% of the fund's
investments at the end of the
period, with R.H. Macy and
Trizec accounting for the
majority of that stake.
DISTRIBUTIONS
The Board of Trustees of
Spartan High income Fund
voted to pay on June 6, 1994,
to shareholders of record at
the opening of business on
June 3, 1994, a distribution of
$.08 derived from capital
gains realized from sales of
portfolio securities.
INVESTMENT CHANGES

TOP FIVE HOLDINGS AS OF APRIL 30, 1994
(BY ISSUER, EXCLUDING REPURCHASE % OF FUND'S % OF FUND'S
AGREEMENTS) INVESTMENTS INVESTMENTS
IN THESE HOLDINGS
6 MONTHS AGO

SCI Television, Inc. 4.9 3.7

GACC Holding Co. 4.0 1.2

U.S. Home Corp. 3.6 5.4

Boyd Gaming Corp. 3.6 3.0

Bally's Grand, Inc. 3.6 1.6

TOP FIVE INDUSTRIES AS OF APRIL 30, 1994
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE INDUSTRIES
6 MONTHS AGO

Media 29.0 27.3

Energy 9.3 7.1

Construction & Real Estate 9.3 10.6

Retail & Wholesale 8.9 8.6

Finance 5.8 5.1

QUALITY DIVERSIFICATION AS OF APRIL 30, 1994
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Aaa, Aa, A - -

Baa - -

Ba 3.3 8.1

B 29.5 35.1

Caa, Ca, C 6.7 5.0

Nonrated 37.4 34.7

UNRATED DEBT SECURITIES THAT ARE EQUIVALENT TO BA AND BELOW AT APRIL 30,
1994, ACCOUNT FOR 31.6% OF THE FUND'S INVESTMENTS
ASSET ALLOCATION
AS OF APRIL 30, 1994 AS OF OCTOBER 31, 1993

Nonconvertible
Bonds 69.6%
Convertible Bonds,
Preferred Stock 8.4%
Common Stock 4.9%
Short-term and
other investments 17.1%
Nonconvertible
Bonds 72.0%
Convertible Bonds,
Preferred Stock 7.7%
Common Stock 3.4%
Short-term and
other investments 16.9%
Row: 1, Col: 1, Value: 17.1
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 8.4
Row: 1, Col: 4, Value: 69.59999999999999
Row: 1, Col: 1, Value: 16.9
Row: 1, Col: 2, Value: 3.4
Row: 1, Col: 3, Value: 7.7
Row: 1, Col: 4, Value: 72.0
INVESTMENTS APRIL 30, 1994

Showing Percentage of Total Value of Investments

CORPORATE BONDS - 70.0%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
CONVERTIBLE BONDS - 0.4%
MEDIA & LEISURE - 0.4%
LODGING & GAMING - 0.4%
Bally Manufacturing Corp. 10%, 12/15/06 Caa $ 2,840,000 $ 2,705,100
NONCONVERTIBLE BONDS - 69.6%
AEROSPACE & DEFENSE - 0.2%
Fairchild Corp. 12%, 10/15/01 B3 1,560,000 1,505,400
BASIC INDUSTRIES - 2.4%
CHEMICALS & PLASTICS - 1.6%
American Pacific Corp. 11%, 12/15/02 (f) - 2,300,000 2,300,000
Rexene Corp.:
pay-in-kind 10%, 11/15/02 - 820,000 700,419
9%, 11/15/99 - 1,240,000 1,187,300
Trans Resources, Inc. 14 1/2%, 9/1/96 B2 5,400,000 5,859,000
10,046,719
PAPER & FOREST PRODUCTS - 0.8%
Crown Packaging Ltd. 10 3/4%, 11/1/00 B3 5,000,000 4,950,000
TOTAL BASIC INDUSTRIES 14,996,719
CONSTRUCTION & REAL ESTATE - 9.2%
BUILDING MATERIALS - 1.0%
Adience, Inc. 11%, 6/15/00 - 2,823,003 2,230,167
USG Corp.:
9 1/4%, 9/15/01 B2 2,070,000 1,984,612
10 1/4%, 12/15/02 B2 1,867,000 1,867,000
6,081,779
CONSTRUCTION - 5.4%
Engle Homes, Inc., 11 3/4%, 12/15/00 (f) B2 3,000,000 2,940,000
Forecast Group LP 11 3/8, 12/15/00 B3 4,000,000 3,740,000
MDC Holdings Inc.:
11 1/8%, 12/15/03 - 2,000,000 1,920,000
8 3/4%, 12/15/05 - 2,400,000 2,388,000
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
U.S. Home Corp.:
mortgage:
7 3/4%, 7/1/96 - $ 982,346 $ 926,322
7 3/4%, 7/1/97 - 4,997,741 4,713,719
9 3/4%, 6/15/03 Ba3 17,500,000 16,625,000
33,253,041
REAL ESTATE - 2.8%
Baldwin Co. 10 3/8%, 8/1/03 B- 4,480,000 4,032,000
Littlefield Co. 10%, 8/31/94 (e):
Series A - 4,380,000 4,380,000
Series B - 4,070,000 4,070,000
Trizec, Ltd. 0%, 6/1/13 (b)(e) - 10,000,000 4,850,000
17,332,000
TOTAL CONSTRUCTION & REAL ESTATE 56,666,820
DURABLES - 1.3%
TEXTILES & APPAREL - 1.3%
Forstmann & Co., Inc. 14 3/4%, 4/15/99 (g) Caa 1,090,000 1,231,700
Hat Brands, Inc.:
12 5/8%, 9/15/02 (e) - 3,000,000 3,225,000
12 5/8%, 9/15/02 - 3,470,000 3,730,250
8,186,950
ENERGY - 7.6%
ENERGY SERVICES - 4.9%
Falcon Drilling, Inc. 9 3/4%, 1/15/01 (f) B2 12,295,000 11,557,300
TransTexas Gas Corp. 10 1/2%, 9/1/00 B1 18,810,000 18,715,950
30,273,250
INDEPENDENT POWER - 1.2%
Consolidated Hydro 12%, 7/15/03 (d) - 12,425,000 7,206,500
OIL & GAS - 1.5%
Mesa Capital Corp. 12 3/4%, 6/30/98 (d) B3 6,270,000 5,533,275
Triton Energy Corp, 0%, 11/1/97 B1 5,560,000 3,780,800
9,314,075
TOTAL ENERGY 46,793,825
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - 3.1%
CREDIT & OTHER FINANCE - 1.1%
GPA Delaware, Inc.:
8 3/4%, 12/15/98 Caa $ 530,000 $ 434,600
8 5/8%, 1/15/99 - 2,300,000 1,750,507
8 1/2%, 3/3/99 - 3,900,000 3,184,233
New Street Capital Corp. unit 12%, 2/28/98 (e) - 1,570,000 1,570,000
6,939,340
INSURANCE - 1.7%
Chartwell Reinsurance Corp. 10 1/4%, 3/1/04 Ba3 3,130,000 2,957,850
Reliance Group 9 3/4%, 11/15/03 B1 8,000,000 7,320,000
10,277,850
SECURITIES INDUSTRY - 0.3%
ECM Corp. extendible 14%, 6/1/02 (f) - 1,790,591 2,008,148
TOTAL FINANCE 19,225,338
INDUSTRIAL MACHINERY & EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 1.0%
Ampex, Inc.:
20%, 4/29/99 - 588,000 588,000
unit 14%, 1/15/98 (d)(e) - 4,010,000 2,486,200
Telex Communications Group:
14 1/2%, 6/1/99 - 930,000 978,825
15/16%, 9/30/99 - 2,400,000 2,400,000
6,453,025
INDUSTRIAL MACHINERY & EQUIPMENT - 2.1%
IMO Industries, Inc.:
12 1/4%, 8/15/97 Caa 5,290,000 5,263,550
12%, 11/1/00 Caa 3,560,000 3,577,800
Maritime Group Ltd. 13 1/2%, 2/15/97 (f) - 2,160,000 2,102,263
Rexnord Holdings, Inc. 11 7/8%, 3/1/99 (e) - 650,000 659,750
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 - 187,290 191,036
10 3/4%, 11/1/03 - 259,694 264,888
Welbilt Corp. 12 1/4%, 11/1/99 Ba3 880,000 959,200
13,018,487
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 19,471,512
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 26.7%
BROADCASTING - 8.9%
Helicon Group L.P./Helicon Cap Corp. 11%,
11/1/03 (g) Caa $ 3,000,000 $ 2,655,000
PTI Holdings, Inc. 7%, 12/17/02 - 2,360,151 1,427,891
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 10,450,000 10,371,625
SCI Television, Inc. secured 11%, 6/30/05 - 31,211,118 30,586,896
SPI Holding, Inc. pay-in-kind 11 1/2%, 12/01/02 B- 3,280,000 2,952,000
Scott Cable Communications, Inc. 12 1/4%,
4/15/01 - 900,000 796,500
Univision Network Holdings LP 7%, 12/17/02 - 10,752,740 6,505,408
55,295,320
ENTERTAINMENT - 0.3%
Live Entertainment, Inc. 10%, 9/1/98 - 2,420,600 2,105,923
LODGING & GAMING - 11.8%
Bally's Casino Holdings, 10 1/2%, 6/15/98 (f) B3 20,410,000 12,654,200
Bally's Gaming International, Inc. 10 3/8%,
7/15/98 - 7,500,000 7,500,000
Bally's Grand, Inc. 10 3/8%, 12/15/03 (f) B2 22,000,000 20,790,000
Boyd Gaming Corp. 10 3/4%, 9/3/03 - 20,000,000 20,500,000
Host Marriott Corp.10 1/2%, 5/1/06 B1 1,500,000 1,470,000
Host Marriott Hospitality, Inc. 10 5/8%, 2/1/00 B1 2,500,000 2,462,500
Lady Luck Gaming Finance Corp. 10 1/2%,
3/1/01 (f) B1 2,470,000 2,297,100
Resorts International, Inc. secured pay-in-kind (b):
15%, 4/15/96 Ca 3,209,800 1,957,978
6%, 4/15/96 Ca 5,769,100 3,519,151
73,150,929
PUBLISHING - 4.0%
GACC Holding Co. 9 3/4%, 3/1/04 (e) - 25,000,000 24,625,000
RESTAURANTS - 1.7%
Family Restaurants, Inc. 9.75%, 2/1/02 B1 5,000,000 4,575,000
Flagstar Corp.:
10 3/4%, 9/15/01 B1 5,000,000 4,900,000
11 1/4%, 11/1/04 B2 830,000 805,100
10,280,100
TOTAL MEDIA & LEISURE 165,457,272
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
NONDURABLES - 2.6%
FOODS - 0.9%
Doskocil Cos., Inc. 9 3/4%, 7/15/00 B2 $ 5,860,000 $ 5,391,200
HOUSEHOLD PRODUCTS - 1.7%
Revlon Consumer Products Corp. 9 3/8%,
4/1/01 B2 3,000,000 2,587,500
Revlon World Wide secured 0%, 3/15/98 B3 17,220,000 7,662,900
10,250,400
TOTAL NONDURABLES 15,641,600
RETAIL & WHOLESALE - 7.6%
APPAREL STORES - 2.3%
Apparel Retailers, Inc. 12 3/4%, 8/15/05 Caa 16,482,000 9,559,560
Lamont's Apparel Corp. 10 1/4%, 11/1/99 - 2,893,000 2,719,420
Specialty Retailers, Inc., 11%, 8/15/03 B3 2,190,000 2,102,400
14,381,380
DRUG STORES - 2.2%
Thrifty Payless Holdings, Inc.:
11 3/4%, 4/15/03 B2 5,610,000 5,722,200
12 1/4%, 4/15/04 B3 8,000,000 8,160,000
13,882,200
GENERAL MERCHANDISE STORES - 1.3%
Hills Stores Co. 10 1/4%, 9/30/03 - 2,685,000 2,658,150
Parisian, Inc. 9 7/8%, 7/15/03 B3 6,070,000 5,463,000
8,121,150
GROCERY STORES - 1.8%
Farm Fresh Holdings Corp.:
12 1/4%, 10/1/00 B2 7,640,000 7,487,200
14 1/4%, 10/1/02 (f) - 3,496,956 3,423,240
10,910,440
TOTAL RETAIL & WHOLESALE 47,295,170
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
SERVICES - 1.4%
LEASING & RENTAL - 0.1%
GPA Group 8.28%, 2/13/97 (f) - $ 900,000 $ 746,487
SERVICES - 1.3%
Scotsman Holdings, Inc. unit 0%, 3/1/04 (f) - 2,730,000 2,648,100
Town & Country Corp.:
11 1/2%, 9/15/97 B 955,000 926,350
13%, 5/31/98 CCC+ 2,755,875 2,686,979
13%, 12/15/98 Ca 2,110,000 2,057,250
8,318,679
TOTAL SERVICES 9,065,166
TECHNOLOGY - 1.7%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
San Jacinto Holdings, Inc.:
8%, 12/31/00 - 960,000 835,200
pay-in-kind 8%, 12/31/00 - 213,704 169,587
1,004,787
ELECTRONICS - 1.5%
Berg Electronics 11 3/8%, 5/1/03 B3 8,990,000 9,259,700
TOTAL TECHNOLOGY 10,264,487
TRANSPORTATION - 0.4%
AIR TRANSPORTATION - 0.4%
Continental Airlines, Inc. 2nd priority
equipment certificate 11%, 3/15/95 (b) Caa 480,000 14,400
NWA Inc., 8 5/8%, 8/1/96 Caa 1,780,000 1,659,850
US Air, Inc. 9 5/8%, 9/1/94 B1 730,000 635,100
2,309,350
UTILITIES - 2.3%
CELLULAR - 2.3%
Horizon Cellular Telephone 11 3/8%, 10/1/00 (d) Caa 10,200,000 6,834,000
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (B) AMOUNT (A) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Mobilemedia Communications, Inc. 15%,
12/1/03 (d) B3 $ 13,000,000 $ 7,410,000
14,244,000
TOTAL NONCONVERTIBLE BONDS 431,123,609
TOTAL CORPORATE BONDS
(Cost $442,254,932) 433,828,709
COMMON STOCKS - 4.9%
SHARES
BASIC INDUSTRIES - 0.1%
CHEMICALS & PLASTICS - 0.1%
Atlantis Group, Inc. (Trivest/ Winston) (a)(e) 39,687 406,792
PAPER & FOREST PRODUCTS - 0.0%
Crown Packaging Holdings Ltd. (warrants) (a)(f) 4,576 160,160
TOTAL BASIC INDUSTRIES 566,952
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Adience, Inc. (a) 319,287 399,109
CONSTRUCTION - 0.0%
U.S. Home Corp. (a) 34 710
TOTAL CONSTRUCTION & REAL ESTATE 399,819
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.1%
Lear Seating Corp. (a) 29,370 569,044
TEXTILES & APPAREL - 0.3%
Cherokee, Inc. (warrants) (a) 23,829 4,179
Hat Brands, Inc. (a):
(warrants) (e) 29,995 344,945
Unit Trust 1,500,000 1,500,000
1,849,124
TOTAL DURABLES 2,418,168
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 0.5%
ENERGY SERVICES - 0.2%
Petrolane, Inc. 118,148 $ 1,299,628
OIL & GAS - 0.3%
Mesa, Inc. (a) 21,560 132,055
Occidental Petroleum Corp. 100,000 1,775,000
1,907,055
TOTAL ENERGY 3,206,683
FINANCE - 0.3%
INSURANCE - 0.2%
American Premier Underwriters, Inc. 21,000 561,750
Vesta Insurance Group Corp. 20,000 455,000
1,016,750
SECURITIES INDUSTRY - 0.1%
ECM Corp. LP interest (a)(f) 5,400 540,000
TOTAL FINANCE 1,556,750
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Specialty Equipment Companies, Inc. (a) 69,959 524,693
Telex Communications Group (warrants) (a)(e) 7,097 34,681
559,374
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Terex Corp. (rights) (a) 13,020 16,275
Thermadyne Holdings Corp. (a) 4,613 59,969
76,244
POLLUTION CONTROL - 0.0%
Envirosource, Inc. (a) 2,700 8,438
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 644,056
MEDIA & LEISURE - 1.8%
BROADCASTING - 1.0%
Great American Communication (a) 391,411 6,458,282
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.8%
Bally Gaming International, Inc. (warrants) (a) 225,000 $ 1,800,000
Bally's Grand, Inc. (a) 123,978 1,363,758
Bally's Grand, Inc. (warrants) (a) 8,406 33,624
Boyd Gaming Corp. (a) 110,400 1,697,400
4,894,782
TOTAL MEDIA & LEISURE 11,353,064
NONDURABLES - 0.7%
BEVERAGES - 0.5%
Heileman G Brewing, Inc. unit (a)(e) 150 3,000,000
FOODS - 0.0%
Chiquita Brands International, Inc. 184 2,530
TOBACCO - 0.2%
Philip Morris Companies, Inc. 25,000 1,362,500
TOTAL NONDURABLES 4,365,030
RETAIL & WHOLESALE - 0.5%
APPAREL STORES - 0.2%
Lamont's Apparel, Inc. (a) 562,103 983,680
GENERAL MERCHANDISE STORES - 0.0%
Hills Stores Co. (a) 1,276 25,999
Southland Corp. (warrants) (a) 4,000 11,000
36,999
GROCERY STORES - 0.3%
FF Holdings Corp. (a)(f) 455 910
Grand Union Capital Corp. Class B (a) 2,009 1,286,765
Grand Union Co. (warrants) (a) 1,079 701,890
Purity Supreme, Inc. (warrants) (a)(e) 7,693 154
1,989,719
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Finlay Enterprises, Inc. 4,460 62,440
TOTAL RETAIL & WHOLESALE 3,072,838
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 0.3%
Town & Country Jewelry Manufacturing Corp. (a) 583,839 $ 1,532,577
TECHNOLOGY - 0.1%
ELECTRONICS - 0.1%
Berg Electronics Holdings Corp. (a)(f) 475,080 712,620
TRANSPORTATION - 0.0%
AIR TRANSPORTATION - 0.0%
CHC Helicopter Corp. (warrants) (a) 30,960 134,346
Continental Airlines, Inc. Class A (a) 868 15,733
150,079
UTILITIES - 0.0%
ELECTRIC UTILITY - 0.0%
Northeast Utilities Associates (warrants) (a) 57,076 110,585
GAS - 0.0%
UGI Corp. (warrants) (a) 37,100 37,100
TOTAL UTILITIES 147,685
TOTAL COMMON STOCKS
(Cost $26,176,651) 30,126,321
PREFERRED STOCKS - 8.0%
CONVERTIBLE PREFERRED STOCKS - 2.8%
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.1%
Bally Manufacturing Corp., Series D, exch. $4.00 10,373 388,988
NONDURABLES - 1.9%
FOODS - 0.7%
Chiquita Brands International, Inc.:
$2.875 89,800 4,130,800
cumulative 8,300 120,350
4,251,150
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 1.2%
Pantry Pride, Inc. pay-in-kind $14.875 73,110 $ 7,384,110
TOTAL NONDURABLES 11,635,260
RETAIL & WHOLESALE - 0.8%
GROCERY STORES - 0.8%
Supermarkets General Holdings Corp. exch.
pay-in-kind $3.52 198,979 5,073,965
TOTAL CONVERTIBLE PREFERRED STOCKS 17,098,213
NONCONVERTIBLE PREFERRED STOCKS - 5.2%
BASIC INDUSTRIES - 0.5%
IRON & STEEL - 0.1%
Stelco, Inc., Series B, 7.76% 23,803 395,942
PAPER & FOREST PRODUCTS - 0.4%
Stone Savannah River Pulp & Paper Corp.
Series A, exch. $15.375 35,063 2,419,347
TOTAL BASIC INDUSTRIES 2,815,289
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
UDC Homes, Inc. Prime exch. (a) 1,222 12,526
ENERGY - 1.2%
OIL & GAS - 1.2%
Gulf Canada Resources Ltd. Series 1,
adj. rate (a) 2,804,130 7,185,583
Gulf Canada Resources Ltd. (a)(e) 53,931 141,569
7,327,152
FINANCE - 2.4%
BANKS - 1.1%
Riggs National Corp. 272,512 6,880,928
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
FINANCE - CONTINUED
SAVINGS & LOANS - 1.3%
California Federal Bank $10.625 (a) 80,000 $ 8,040,000
TOTAL FINANCE 14,920,928
TECHNOLOGY - 1.2%
ELECTRONICS - 1.2%
Berg Electronics Holding Corp. exch. pay-in-kind
$3.4687 289,587 7,239,675
TOTAL NONCONVERTIBLE PREFERRED STOCKS 32,315,570
TOTAL PREFERRED STOCKS
(Cost $50,271,865) 49,413,783
OTHER SECURITIES - 6.8%
PURCHASED BANK DEBT - 6.8%
El Paso Electric Co. secured loan 10,775,212 9,670,879
Macy (R.H.) & Co., Inc.:
49 Store Loan 5,480,000 5,379,100
LBO Swap Claim 242,038 240,828
10 Store Loan 1,716,583 1,707,999
10 Store Swap Claim 586,864 583,930
Working Capital Loan 6,633,147 6,442,482
Trivest 1992 Special Fund Ltd. (e) 13.6(h) 3,475,681
Trizec Corp. Ltd. (Westpac) term loan 6/3/95 (b) 10,000,000 8,750,000
USG Sale/Leaseback loan mortgage note 6,100,000 6,100,000
TOTAL OTHER SECURITIES
(Cost $34,692,500) 42,350,899
REPURCHASE AGREEMENTS - 10.3%
MATURITY VALUE (NOTE 1)
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/95 $ 63,762,911 $ 63,744,000
TOTAL INVESTMENTS - 100.0%
(Cost $617,139,948) $ 619,463,712
LEGEND
(a) Non-income producing
(b) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(c) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(d) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(e) Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Ampex, Inc. unit
14%, 1/15/98 7/22/92 $ 2,681,086
Atlantis Group, Inc.
(Trivest/ Winston) 4/6/93 $ 46,451
GACC Holding Co.
9 3/4%,
3/1/04 2/3/94 $ 24,418,750
Gulf Canada
Resources Ltd 10/15/93 $ 133,814
Hat Brands, Inc.
(warrants) 9/2/92 -
ACQUISITION ACQUISITION
SECURITY DATE COST
Hat Brands, Inc.
12 5/8%,
9/15/02 2/22/94 $ 3,000,000
Heileman G
Brewing, Inc. unit 1/21/94 $ 3,000,000
Littlefield Co.
10%, 8/31/94
Series A 2/28/94 $ 4,380,000
Littlefield Co.
10%, 8/31/94
Series B 2/28/94 $ 4,070,000
New Street Capital
Corp. unit 12%,
2/28/98 2/25/94 $ 1,570,000
Purity Supreme,
Inc. (warrants) 7/29/92 $ 77
Rexnord Holdings,
Inc. 11 7/8%,
3/1/99 10/15/92 $ 585,000
Telex Communications
Group (warrants) 4/15/92 $ 27,740
Trivest 1992
Special Fund Ltd. 7/30/92 $ 3,431,506
Trizec, Ltd. 0%,
6/1/13 10/14/93 $ 1,125,000
(f) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $64,880,528 or 10.1% of net
assets.
(g) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(h) Represents number of units held.
(i) Affiliated company (see Note 6 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 0.0% AAA, AA, A 0.0%
Baa 0.0% BBB 0.0%
Ba 3.3% BB 5.9%
B 29.5% B 27.8%
Caa 5.5% CCC 3.5%
Ca, C 1.2% CC, C 0.0%
D 0.9%
The percentage not rated by either S&P or Moody's amounted to 35.8%
including long-term debt categorized as other securities. FMR has
determined that unrated debt securities that are lower quality account for
35.8% of the total value of investment in securities
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $617,396,195. Net unrealized appreciation aggregated
$2,067,517, of which $22,650,974 related to appreciated investment
securities and $20,583,457 related to depreciated investment securities.
The fund hereby designates $4,374,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 619,463,712
agreements of $63,744,000) (cost $617,139,948)
(Notes 1 and 2) - See accompanying schedule

Cash 930,190

Receivable for investments sold 26,316,953

Dividends receivable 469,222

Interest receivable 8,611,671

Redemption fees receivable 2,393

TOTAL ASSETS 655,794,141

LIABILITIES

Payable for investments purchased $ 13,930,388

Dividends payable 735,734

Accrued management fee 443,000

TOTAL LIABILITIES 15,109,122

NET ASSETS $ 640,685,019

Net Assets consist of (Note 1):

Paid in capital $ 624,165,632

Undistributed net investment income 6,547,551

Accumulated undistributed net realized gain (loss) on 7,648,072
investments

Net unrealized appreciation (depreciation) on investment 2,323,764
securities

NET ASSETS, for 53,928,029 shares outstanding $ 640,685,019

NET ASSET VALUE, offering price and redemption price per $11.88
share ($640,685,019 (divided by) 53,928,029 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1994

INVESTMENT INCOME $ 5,643,490
Dividends

Interest 53,596,875

TOTAL INCOME 59,240,365

EXPENSES

Management fee (Note 4) $ 5,054,378

Non-interested trustees' compensation 309

Interest (Note 8) 5,087

TOTAL EXPENSES 5,059,774

NET INVESTMENT INCOME 54,180,591

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 45,427,612
(NOTES 1 AND 3)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (25,158,437)
investment securities

NET GAIN (LOSS) 20,269,175

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 74,449,766
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED APRIL 30,

1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 54,180,591 $ 45,047,600
Net investment income

Net realized gain (loss) on investments 45,427,612 23,700,762

Change in net unrealized appreciation (depreciation) (25,158,437) 3,794,948
on
investments

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 74,449,766 72,543,310
FROM
OPERATIONS

Distributions to shareholders (52,719,224) (46,092,646)
From net investment income

In excess of net investment income (4,190,784) -

From net realized gain (40,280,405) (12,768,054)

TOTAL DISTRIBUTIONS (97,190,413) (58,860,700)

Share transactions 376,388,246 410,126,182
Net proceeds from sales of shares

Reinvestment of distributions 80,688,781 49,300,975

Cost of shares redeemed (397,341,830) (243,634,815)

Redemption fees (Note 1) 2,273,295 1,008,940

Net increase (decrease) in net assets resulting from 62,008,492 216,801,282
share
transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 39,267,845 230,483,892

NET ASSETS

Beginning of period 601,417,174 370,933,282

End of period (including under (over) distribution of net $ 640,685,019 $ 601,417,174
investment income of $6,547,551 and $(2,126,326),
respectively)

OTHER INFORMATION
Shares

Sold 30,409,458 34,317,770

Issued in reinvestment of distributions 6,545,733 4,146,822

Redeemed (32,248,109) (20,413,918)

Net increase (decrease) 4,707,082 18,050,674

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEARS ENDED APRIL 30, AUGUST 29, 1990
(COMMENCEMENT
OF
OPERATIONS) TO
APRIL 30,

1994 1993 1992 1991

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 12.220 $ 11.900 $ 10.640 $ 10.000
period

Income from Investment 1.101 1.175 1.292 .811
Operations
Net investment income

Net realized and unrealized .357 .672 1.614 .602

gain (loss) on
investments

Total from investment 1.458 1.847 2.906 1.413
operations

Less Distributions (.976) (1.183) (1.342) (.796)
From net investment
income

In excess of net investment (.078) - - -

income

From net realized gain on (.790) (.370) (.320) -
investments

Total distributions (1.844) (1.553) (1.662) (.796)

Redemption fees added to .046 .026 .016 .023
paid in capital

Net asset value, end of $ 11.880 $ 12.220 $ 11.900 $ 10.640
period

TOTAL RETURN (dagger) 12.70% 16.96% 29.76% 15.33%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 640,685 $ 601,417 $ 370,933 $ 100,840
(000 omitted)

Ratio of expenses to average .75% .70% .70% .70%*
net assets

Ratio of net investment 8.07% 9.57% 11.43% 11.98%*
income to average net
assets

Portfolio turnover rate 213% 136% 99% 72%*

</TABLE>

* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994

1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan High Income Fund (the fund) is a fund of Fidelity Fixed-Income
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued by a pricing service at their market values as determined by
their most recent bid prices in the principal market (sales prices if the
principal market is an exchange) in which such securities are normally
traded. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities
maturing within sixty days are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practicable to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned and dividend income is recorded on the
ex-dividend date. The fund may place a debt obligation on non-accrual
status and reduce related interest income by ceasing current accruals and
writing off interest receivables when the collection of all or a portion of
interest has become doubtful based on consistently applied procedures,
under the general supervision of the Trustees of the fund. A debt
obligation is removed from non-accrual status when the issuer resumes
interest payments or when collectibility of interest is reasonably assured.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
market discount. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
REDEMPTION FEES. Shares held in the fund less than 270 days are subject to
a redemption fee equal to 1% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
an increase in paid in capital of $330,242, a decrease in undistributed net
investment income of $5,790,028 and a decrease in accumulated net realized
gain on investments of $6,120,270.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may participate
in an interfund lending program. This program provides an alternative
credit facility allowing the fund to borrow from, or lend money to, other
participating funds.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-
consuming negotiations and expense, and prompt sale at an acceptable price
may be difficult. At the end of the period, restricted securities
(excluding 144A issues) amounted to $53,269,772 or 8.3% of net assets.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,533,442,576 and $1,332,258,987, respectively, There were no
purchases and sales of U.S. government and government agency obligations.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .70% of the fund's average net
assets.
On October 20, 1993, shareholders approved a new management contract that
raises the monthly fee received by FMR from .70% to .80%. This change was
effective on November 1, 1993.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $35,775.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $15,357,000 and $7,849,667,
respectively. The weighted average interest rate was 3.84%.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-
Income Trust and the Shareholders of Spartan High Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan High Income Fund, including the
schedule of portfolio investments, as of April 30, 1994, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended
and for the period April 29, 1990 (commencement of operations) to April 30,
1991. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan High Income Fund as of April 30,
1994, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended
and for the period April 29, 1990 (commencement of operations) to April 30,
1991, in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND
Coopers & Lybrand
Boston, Massachusetts
June 7, 1994
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please call 1-800-544-9797.
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