FIDELITY FIXED INCOME TRUST, N-30D, 1994-12-16

FIDELITY FIXED INCOME TRUST
N-30D, 1994-12-16

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(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

SHORT-INTERMEDIATE
GOVERNMENT
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 past six
months.

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

FINANCIAL STATEMENTS 12 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 16 Notes to the financial statements.

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. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING
CHARGES
AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
The unsettling period that began for bond investors when the Federal
Reserve Board raised short-term interest rates in February has continued
into the fourth quarter of 1994. The Board raised the federal funds rate -
the rate banks charge each other for overnight loans - five times from
February through August, taking it from 3.00% to 4.75%. A sixth increase in
November lifted the rate to 5.50%. The Fed rate hikes were intended to
forestall inflation that could result from an improving U.S. economy, and
they led to negative returns for many bond investments and below-average
returns for many stocks.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
Keeping in mind that the negative effects of rising rates on your bond
investments will only be "paper" losses unless you sell your shares,
staying in your bond fund may be appropriate. The longer your investing
time frame, the more likely it is that you will retain your principal
investment through both up and down markets. For example, a 10-year time
frame, such as saving for a college education, enables you to weather these
ups and downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and money market funds are not
insured by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for 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, 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. If Fidelity
had not reimbursed certain fund expenses, the fund's returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Short-Intermediate Government 1.35% -0.50% 5.13%

Lehman Brothers 1-3 Year Government
1.63% 1.16% n/a
Bond Index

Average Short-Term U.S. Government 0.56% -1.31% n/a
Fund

Consumer Price Index 1.42% 2.61% 5.36%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on 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 currently reflects the
performance of 125 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 OCTOBER 31, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan Short-Intermediate Government -0.50% 2.71%

Lehman Brothers 1-3 Year Government Bond Index 1.16% n/a

Average Short-Term U.S. Government Fund -1.31% n/a

Consumer Price Index 2.61% 2.89%

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
Spartan Short-Int. Gov.(474) 1-3 Year Government I
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
05/31/94 10338.67 10462.87
06/30/94 10346.80 10489.03
07/31/94 10479.57 10583.43
08/31/94 10503.94 10618.36
09/30/94 10454.21 10593.93
10/31/94 10473.13 10618.30

$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 October 31, 1994, the value of your
investment would have grown to $10,473 - a 4.73% increase on your initial
investment. This assumes you still owned the fund on October 31, 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 $10,618 - a 6.18% 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
SIX MONTHS (COMMENCEMEN
ENDED YEAR ENDED T OF OPERATIONS)
OCTOBER 31, 1994 APRIL 30, 1994 TO APRIL 30, 1993

Dividend return 3.27% 6.14% 2.53%

Capital appreciation return -1.92% -5.85% 0.88%

Total return 1.35% 0.29% 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

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.69(cents) 30.95(cents) 61.20(cents)

Annualized dividend rate 7.20% 6.52% 6.37%

30-day annualized yield 6.52% - -

</TABLE>

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 $9.31 over
the past month, $9.41 over the past six months and $9.61 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 5.97% and the dividend
rate and total returns would have been lower.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Curt Hollingsworth, Portfolio Manager of Spartan
Short-Intermediate Government Fund
Q. CURT, HOW DID THE FUND PERFORM?
A. 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. Although it has trailed the Lehman Brothers 1-3 Year
Government Bond Index, the fund has managed to generate a positive return
and has performed better than comparable funds. For the six months ended
October 31, 1994, the fund had a total return of 1.35%, compared to 0.56%
for the average short-term government bond fund, according to Lipper
Analytical Services. For the year ended October 31, the fund's total return
was -0.50%, compared to -1.31% for the Lipper average over the same period.
Q. CAN YOU GIVE A RECAP OF WHAT THE MARKET WAS LIKE?
A. U.S. bond markets took a downward turn during the first nine months of
1994, after more than four years of generally favorable conditions for bond
investing. Strong economic growth and inflation concerns caused yields to
rise and prices to fall on virtually all types of fixed-income investments.
From February through September 1994, the Federal Reserve Board raised the
federal funds rate - the rate banks charge each other for overnight loans -
from 3.00% to 4.75%. The Fed was hoping to head off future inflation that
might be triggered by the improving U.S. economy. The very threat of
inflation led investors to sell bonds, because inflation diminishes the
value
of fixed-income payments.
Q. MANAGING THE FUND DURING THE DOWNWARD TURN IN THE BOND MARKETS MUST HAVE
BEEN A CHALLENGE. WHAT HAS BEEN YOUR STRATEGY?
A. I am using a duration neutral approach to managing the fund. That is,
I am managing the fund so that it will maintain the same approximate
duration as a benchmark made up of a blend of U.S. Treasury notes and
Ginnie Maes issued by the Government National Mortgage Association.
Duration is a way to estimate how sensitive a bond fund's share price is to
changes in comparable interest rates. The longer the average duration of
the fund, the more its share price is likely to move up as comparable
interest rates fall, or down as comparable interest rates rise. For
example, if the fund had a duration of 2.5 years and comparable interest
rates rose 1%, its share price would be likely to fall roughly 2.5%.
Conversely, if comparable interest rates fell 1%, its share price would be
likely to rise about 2.5%. Of course there are other factors that influence
a share's price.
Q. HOW DOES THIS DIFFER FROM WHAT YOU WERE DOING BEFORE?
A. I had been using a strategy called duration averaging to shift the
fund's duration in response to changes in interest rate levels. I've moved
away from the technique because I don't believe it will lead to a return
advantage in the foreseeable future. Instead, I believe success in this
environment will be achieved through sector and security selection.
Therefore, I am focusing on adding value through good sector weighting and
security selection, while maintaining a neutral duration.
Q. YOU'VE DISCUSSED HOW YOU USE DURATION TO MANAGE THE PORTFOLIO. HOW DOES
DURATION DIFFER FROM MATURITY?
A. They're related, but not the same. For most bonds, maturity is the date
when principal will be repaid - usually the stated final maturity date. But
since mortgage securities pay most of their principal before their final
maturity dates, we use weighted average life for them instead. Weighted
average life measures the average time until all principal payments are
expected to be received, which usually is much shorter than the time until
the last principal payment is due. Duration starts with the same
information about principal payments, but also takes interest payments into
account to give a better picture of total interest rate risk. Because it
includes all kinds of cash flows from a bond - interest as well as
principal - duration gives me a better tool to use when managing the fund's
overall exposure to interest rate changes.
Q. YOU CAN CHOOSE BETWEEN U.S.
TREASURY BONDS AND MORTGAGE-BACKED SECURITIES. HOW HAS THE WEIGHTING
CHANGED OVER THE PAST SIX MONTHS?
A. I've gradually reduced the fund's investments in Ginnie Maes and added
to the fund's position in Treasury notes. To decide how much to invest in
each sector, I look at yield spreads - the difference in yield between
mortgage-backed bonds and Treasury bonds with comparable durations. When
the yield spread is wide, I invest more in Ginnie Maes, because that makes
them more attractive. However, the yield spread narrowed during the period,
so I increased the percentage of the fund invested in Treasury notes to
43.3% on October 31, 1994, from 28.4% on April 30, 1994.
Q. WITHIN THE DURATION NEUTRAL FRAMEWORK, WHAT SORT OF STRATEGIES HAVE YOU
PURSUED?
A. During the period, when interest rates were making their most pronounced
climbs, I employed a defensive barbell strategy - heavily weighting two
ends of the maturity spectrum - with most of the portfolio in cash on one
end and securities with longer maturities on the other. Because short rates
rose more than long rate as the Fed tightened monetary policy five times
between the first of the year and the end of the period, this defensive
strategy helped the fund's performance. Toward the end of the period, I
switched to a ladder strategy, spacing the maturities of the bonds evenly
along the maturity spectrum. This is more of a neutral structure.
Q. DOES THIS MEAN YOU THINK THE WORST IS BEHIND US?
A. Not necessarily. It's very difficult to predict the direction of
interest rates. Bond investors react sharply to any mention of inflation.
They keep an eye on statistics such as commodity prices and the
unemployment rate. A rise in commodity prices and a drop in unemployment
can signal economic growth, often a precursor to inflation. I think the Fed
will keep raising rates as long as the economy grows at a reasonable clip
and the threat of inflation remains. On the other hand, short-term yields
have risen significantly already. If the economy moderates at all,
short-term Treasury notes - such as three-year Treasuries yielding more
than 7% at the end of October - may turn out to be relatively attractive.
FUND FACTS
GOAL: high current income
with preservation of capital
START DATE: December 18, 1992
SIZE: as of October 31, 1994,
more than $45 million
MANAGER: Curt Hollingsworth,
since December 1992;
manager, Fidelity Advisor
Government Investment
Portfolio, since 1992, Fidelity
Government Securities Fund,
since 1990, Spartan Limited
Maturity Government, since
1988, Spartan Long-Term
Government Bond Fund,
since 1993, and Fidelity
Short-Intermediate
Government Fund, since
1991; joined Fidelity in 1983
(checkmark)
CURT HOLLINGSWORTH ON
INVESTMENT STRATEGY:
"It's extremely important for
individual investors to try to
come to an understanding
about what their investment
horizon is. If their investment
horizon is only six months to
one year, even being in a
short-term bond fund could be
risky. But if the investment
horizon is longer, short-term
fluctuations of interest rates
may not be as onerous. With
a longer horizon, you'd
choose a longer-term fund,
because you could earn
higher yields and would not be
as concerned about
short-term price fluctuations."
(solid bullet) At the end of the period, the
fund's duration was 2.8 years.
If comparable interest rates
rose 1%, the fund's share
price would be likely to fall
roughly 2.8%. Conversely, if
comparable interest rates fell
1%, its share price would be
likely to rise about 2.8%. Of
course, there are other
factors that influence a fund's
share price.
(solid bullet) During the period, the fund
did not hold any futures,
options or derivative
mortgage securities.

INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF OCTOBER 31, 1994
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Under 7% - 0.3

7 - 7.99% 22.3 22.5

8 - 8.99% 6.6 6.8

9 - 9.99% 37.4 38.7

10 - 10.99% 10.9 12.2

11% and over 0.4 0.4

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 4.2 4.6

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED
FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 2.8 2.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION, IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE.
ASSET ALLOCATION
AS OF OCTOBER 31, 1994 AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 22.3
Row: 1, Col: 2, Value: 43.3
Row: 1, Col: 3, Value: 34.4
Mortgage-backed
securities 52.5%
U.S. government
and government
agency obligations 28.4%
Short-term 19.1%
Row: 1, Col: 1, Value: 19.1
Row: 1, Col: 2, Value: 28.4
Row: 1, Col: 3, Value: 52.5
Mortgage-backed
securities 34.4%
U.S. government
and government
agency obligations 43.3%
Short-term 22.3%

INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

U.S. TREASURY OBLIGATIONS - 43.3%
SHARES VALUE (NOTE 1)
U.S. Treasury Notes
9 1/4%, 1/15/96 11,950,000 $ 12,336,463
7 3/8%, 5/15/96 2,820,000 2,850,851
9 1/4%, 8/15/98 5,600,000 5,950,000
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $21,849,327) 21,137,314
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 34.4%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 34.4%
7 1/2%, 10/15/21 to 6/15/23 8,664,463 8,044,347
8%, 5/15/17 to 8/15/22 2,127,735 2,047,437
8 1/2%, 9/15/21 to 11/15/21 1,199,328 1,184,708
10%, 6/15/13 to 11/15/19 4,713,195 5,051,797
10 1/2%, 11/15/19 262,705 286,183
13%, 9/15/14 168,040 193,347
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES (Cost $18,053,219) 16,807,819
REPURCHASE AGREEMENTS - 22.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 10,901,447 10,900,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $50,802,546) $ 48,845,133
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $50,802,546. Net unrealized depreciation aggregated
$1,957,413 of which $21,091 related to appreciated investment securities
and $1,978,504 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>
OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 48,845,133
agreements of $10,900,000) (cost $50,802,546) -
See accompanying schedule

Cash 917

Interest receivable 636,895

TOTAL ASSETS 49,482,945

LIABILITIES

Payable for investments purchased $ 4,256,033

Payable for fund shares redeemed 80,726

Dividends payable 47,413

Accrued management fee 3,835

TOTAL LIABILITIES 4,388,007

NET ASSETS $ 45,094,938

Net Assets consist of:

Paid in capital $ 49,848,134

Undistributed net investment income 120,073

Accumulated undistributed net realized gain (loss) (2,915,856)
on investments

Net unrealized appreciation (depreciation) on (1,957,413)
investments

NET ASSETS, for 4,845,437 shares outstanding $ 45,094,938

NET ASSET VALUE, offering price and redemption price per $9.31
share ($45,094,938 (divided by) 4,845,437 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 1,834,957
Interest

EXPENSES

Management fee $ 161,183

Non-interested trustees' compensation 147

Total expenses before reductions 161,330

Expense reductions (136,714) 24,616

NET INVESTMENT INCOME 1,810,341

REALIZED AND UNREALIZED GAIN (LOSS) (1,176,711)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on 61,361
investment securities

NET GAIN (LOSS) (1,115,350)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 694,991
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED APRIL 30,
OCTOBER 31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 1,810,341 $ 4,525,900
Net investment income

Net realized gain (loss) (1,176,711) (2,409,978)

Change in net unrealized appreciation (depreciation) 61,361 (1,986,615)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 694,991 129,307
FROM OPERATIONS

Distributions to shareholders: (1,602,839) (3,830,040)
From net investment income

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

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

TOTAL DISTRIBUTIONS (1,602,839) (3,952,298)

Share transactions 12,488,006 74,995,739
Net proceeds from sales of shares

Reinvestment of distributions 1,310,468 2,805,719

Cost of shares redeemed (21,521,252) (75,106,348)

Net increase (decrease) in net assets resulting from (7,722,778) 2,695,110
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (8,630,626) (1,127,881)

NET ASSETS

Beginning of period 53,725,564 54,853,445

End of period (including under (over) distribution of net $ 45,094,938 $ 53,725,564
investment income of $120,073 and $(87,429),
respectively)

OTHER INFORMATION
Shares

Sold 1,328,113 7,484,068

Issued in reinvestment of distributions 139,324 344,283

Redeemed (2,285,829) (7,602,226)

Net increase (decrease) (818,392) 226,125

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS YEAR ENDED DECEMBER 18,
ENDED APRIL 30, 1992
OCTOBER 31, 1994 (COMMENCEMENT
OF
OPERATIONS TO
APRIL 30,

(UNAUDITED) 1994 1993

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.490 $ 10.090 $ 10.000

Income from Investment Operations .350 .616 .257
Net investment income

Net realized and unrealized gain (loss) (.221) (.579) .083D

Total from investment operations .129 .037 .340

Less Distributions (.309) (.617) (.250)
From net investment income

In excess of net investment income - (.010) -

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

Total distributions (.309) (.637) (.250)

Net asset value, end of period $ 9.310 $ 9.490 $ 10.090

TOTAL RETURNB, C 1.38% .29% 3.43%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (in millions) $ 45,095 $ 53,726 $ 54,853

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

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

Ratio of net investment income to average 7.29%A 7.33% 7.28%A
net assets

Portfolio turnover rate 115%A 271% 587%A

</TABLE>

A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN. SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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 October 31, 1994

1. 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 of their purchase date 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 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 and may
affect net investment income per share. 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.
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
2. OPERATING POLICIES - CONTINUED
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 affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $21,034,967 and $25,066,492, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
including the cost of providing shareholder services, 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.
To offset the cost of providing shareholder services, FMR or its affiliates
collect certain transaction fees from the fund's shareholders. For the
period, fees collected from shareholders amounted to $1,518.
5. LITIGATION.
On October 27, 1994 a complaint was filed in the Court of Common Pleas of
Philadelphia County against the trust, FMR, Fidelity Distributors
Corporation, and FMR Corp. The complaint was filed by a shareholder of the
fund and seeks to have the case certified as a class action on behalf of
specified groups of shareholders of the fund. The complaint alleges that,
in violation of a Pennsylvania consumer protection statute and federal
securities laws, the fund's Registration statements contained misleading
statements regarding the dollar-weighted average maturity of the fund's
portfolio. The complaint seeks recision and unspecified monetary damages
and attorney's fees, and such other relief as the Court may grant. The
defendants deny the allegations in the complaint and intend to defend this
action vigorously.
6. EXPENSE REDUCTIONS.
FMR voluntarily agrees to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .10% of average net assets and the
reimbursement reduced expenses by $136,714.
TO CALL FIDELITY

FOR FUND 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.

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge 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
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
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
215 East Erie Street
Chicago, IL
One North Franklin
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
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont 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
8885 Ladue Road
Ladue, 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
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, 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
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 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
Thomas J. Steffanci, 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
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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
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(8 a.m. - 9 p.m.)
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for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

(registered trademark)

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

GOVERNMENT INCOME
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 past six
months.

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

FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 19 Notes to the financial statements.

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 OCTOBER 31, 1994 PAST 6 PAST PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

Spartan Government Income 0.43% -4.63% 40.50% 60.52%

Lehman Brothers Government Bond -0.01% -4.47% 44.76% n/a
Index

Average General U.S. Government
Bond Fund -1.00% -5.79% 38.25% n/a

Consumer Price Index 1.42% 2.61% 19.03% 24.07%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on December 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 157 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 (CPI) 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 OCTOBER 31, 1994 PAST PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Government Income -4.63% 7.04% 8.40%

Lehman Brothers Government Bond -4.47% 7.68% n/a
Index

Average General U.S. Government
Bond Fund -5.79% 6.67% n/a

Consumer Price Index 2.61% 3.55% 3.76%

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
Spartan Gov. Income Fund (453) Government Bond In
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
05/31/94 15892.04 16333.81
06/30/94 15850.88 16296.24
07/31/94 16166.61 16596.09
08/31/94 16192.41 16599.41
09/30/94 15955.73 16365.36
10/31/94 15947.78 16353.90

$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 October 31, 1994, the value of your
investment would have grown to $15,948 - a 59.48% increase on your initial
investment. This assumes you still owned the fund on October 31, 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 $16,354 - a 63.54% 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
SIX MONTHS
ENDED
OCTOBER 31, YEARS ENDED APRIL 30,

1994 1994 1993 1992 1991 1990

Dividend return 3.25% 5.09% 6.81% 8.22% 9.19% 9.37%

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

Total return 0.43% -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

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 6 PAST
MONTH MONTHS YEAR

Dividends per share 5.51(cents) 32.59(cents) 61.82(cents)

Annualized dividend rate 6.67% 6.54% 6.05%

30-day annualized yield 7.47% - -

</TABLE>

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 $9.73 over
the past month, $9.89 over the past six months and $10.22 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 Robert Ives,
Portfolio Manager of Spartan
Government Income Fund
Q. HOW DID THE FUND PERFORM, BOB?
A. The fund's absolute performance is no doubt disappointing to many
investors. However, relative to other funds with the same investment
objective, it did well. For the six months ended October 31, 1994, the fund
had a total return of 0.43%. That topped the average U.S. government bond
fund, which returned -1.00% during the same period according to Lipper
Analytical Services. For the 12 months ended October 31, the fund returned
- -4.63%, compared to -5.79% for the average fund.
Q. LET'S TALK FIRST ABOUT THE DETERIORATION OF THE BOND MARKET IN 1994.
WHAT HAPPENED?
A. It began back in February, after the Federal Reserve Board raised
short-term interest rates for the first time in five years. The Fed was
tightening its monetary policy in an effort to curb future inflation that
might occur as a result of strong growth in the U.S. economy. But bond
investors sold heavily at the mere thought that inflation might be around
the corner. Of course, inflation eats away at the value of a bond's
interest income, which is paid at a fixed rate. Despite four more Fed rate
hikes in the months that followed, the economy still showed signs of strong
expansion. That's why bond yields continued to rise - and prices continued
to fall - right through the end of October. The past 12 months have been
one of the worst periods, if not THE worst period, for bonds since the
1920s.
Q. WHAT WAS YOUR STRATEGY, GIVEN THE DIFFICULT INTEREST-RATE ENVIRONMENT?
A. First, I kept the fund overweighted in government-backed mortgage
securities relative to agency or Treasury issues. The fund's benchmark
weighting for mortgage bonds is 30%, but I've kept that number closer to
60% over much of the past several months. The reason is that mortgage
securities have offered the best value in the marketplace. Mortgage bond
prices bottomed out about this time last year, as refinancing fever was
running high. As interest rates have risen, fewer homeowners are
refinancing. That means fewer mortgage bonds have been "prepaid," or had
their principal returned to investors before the bonds' maturity dates. An
environment of fewer prepayments has made mortgage bonds more valuable, as
investors can continue to collect their interest payments. In general,
their prices have fallen less dramatically over the past six months than
those of Treasury bonds with comparable maturities.
Q. ARE YOU STILL AS OPTIMISTIC ABOUT MORTGAGE BONDS GOING FORWARD?
A. No, because these bonds aren't nearly as cheap relative to Treasuries as
they were six months ago. That's why I've reduced the fund's stake in
mortgage-backed securities - from 52% six months ago, to 36% on October 31.
I do, however, want to maintain a healthy investment in mortgage bonds.
Historically, they offer more attractive yields than Treasuries.
Q. WHERE ELSE DID YOU FIND
OPPORTUNITIES?
A. As I did with mortgages, I traded in and out of selected U.S. government
agency bonds that I felt were undervalued. All of this gets back to
extensive research, and the ability to pinpoint bonds that appear
inexpensive relative to comparable Treasuries. A good example is a roughly
5% stake the fund had earlier this year in bonds issued by the U.S. Agency
for International Development, for use in infrastructure projects in
Israel. Once investors realized that these bonds were attractively valued,
their yields fell and prices rose. I later sold part of the fund's stake at
a profit.
Q. DOES THE FUND HAVE ANY INVESTMENTS IN DERIVATIVES?
A. I do make limited investments in derivatives when I feel that they can
add value to the fund. As with any investment, I carefully weigh the risk
against the potential reward. At the end of October, the fund had roughly a
5% investment in complex mortgage securities. One of these investments was
purchased at a deep discount and doesn't pay any interest for most of the
life of the bond, but rather accrues it, much like a zero coupon bond. When
I purchased this security, I sold other Treasury bonds that had similar
durations, meaning they were similarly sensitive to movements in interest
rates. Another portion of the stake in complex mortgage securities is an
"interest only" instrument that I felt was undervalued in the marketplace.
I thought that the market was not recognizing how slow prepayments on this
instrument would be in the future. In addition, the fund had a small
investment in 10-year Treasury futures on October 31. Again, I felt these
instruments were undervalued relative to other Treasury bonds available in
the marketplace.
Q. DO YOU HAVE ANY REGRETS ABOUT
THE PAST SIX MONTHS?
A. I guess my biggest regret is that I didn't better prepare the fund for
the dramatic rise in interest rates we saw in 1994, but I don't think
anyone could have correctly predicted the extent of the damage to the
market. As it turned out, it would have been better to have investments in
extremely short-term cash instruments earning 3%. In addition, I could have
invested more heavily in mortgage bonds, which - as I explained earlier -
outperformed Treasuries during the period. But considering the fund was
already heavily overweighted on the mortgage side, I think we did quite
well.
Q. LET'S DISCUSS THE NEXT SIX MONTHS. WHAT'S YOUR OUTLOOK?
A. I'd like to be able to say things are going to get better, but as was
confirmed in 1994, the direction of interest rates is extremely difficult
to predict. What we do know is that all of the heavy selling has left bonds
much more attractively valued than they were a year ago. At some point, the
Fed's interest rate hikes will have the noticeable effect of slowing the
economy. At that point, inflation fears should ease and bonds will be
poised to recover. It's just not clear yet when we'll turn that corner.
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 October 31,1994,
more than $249 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 MARKET DYNAMICS:
"This past year has really been
a case study in bond market
dynamics. Initially, it appeared
as if bond investors overreacted
to the Fed's raising of
short-term interest rates. The
market was behaving as if
higher inflation was already
upon us, instead of a future
concern. However, as time went
on, it began to look like maybe
the heavy sell-off in the markets
wasn't overdone. Economic
indicators continued to be very
strong, signaling that higher
rates didn't seem to be slowing
economic growth.
"So the question becomes, `Is
the bond market truly oversold,
or are yields properly reflecting
the threat of future inflation?'
We may get the answer in the
next six months. Eventually,
investors' inflation worries will
ease one way or the other, and
they'll be attracted to the
compelling value that now
exists in bonds. It's just tough
to know when that time will
come."
DISTRIBUTIONS
A total of 20.3% of the
dividends during the fiscal year
was derived from interest on
U.S. Government securities
which is generally exempt from
state income tax.
The fund will notify
shareholders in January 1995
of the applicable percentage
for use in preparing 1994
income tax returns.
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF OCTOBER 31, 1994
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Under 6% 0.4 5.0

6 - 6.99% 15.8 21.0

7 - 7.99% 19.6 32.6

8 - 8.99% 19.6 8.3

9 - 9.99% 16.3 11.3

10 - 10.99% 6.9 8.2

11 - 11.99% 1.3 1.2

12 - 12.99% 13.5 2.3

13% and over 0.5 0.3

Zero Coupon Bonds 3.5 0.1

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 10.3 8.7

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 OCTOBER 31, 1994
6 MONTHS AGO

Years 5.3 5.5

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 OCTOBER 31, 1994 AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 2.6
Row: 1, Col: 2, Value: 13.3
Row: 1, Col: 3, Value: 48.2
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 15.9
Mortgage-backed
securities 52.1%**
U.S. government
and government
agency obligations 28.7%
CMO's and other
mortgage related
securities 9.5%
Other 9.7%
Mortgage-backed
securities 35.9%*
U.S. government
and government
agency obligations 48.2%
CMO's and other
mortgage related
securities 13.3%
Other 2.6%
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: 50.0
Row: 1, Col: 5, Value: 2.1
* GNMA SECURITIES - 12.4%
** GNMA SECURITIES - 21.1%
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 48.2%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 37.3%
7 7/8%, 1/15/98 $ 28,670,000 $ 29,207,563
6 1/4%, 2/15/03 8,350,000 7,594,576
12 3/4%, 11/15/10 3,800,000 5,118,106
8 1/8%, 8/15/19 29,955,000 29,955,000
12%, 8/15/23 15,900,000 21,055,098
92,930,343
U.S. GOVERNMENT AGENCY OBLIGATIONS - 10.9%
Federal Home Loan Bank 5.92%, 3/18/99 450,000 423,279
Federal National Mortgage Association:
0%, 3/22/95 8,500,000 8,320,990
0%, 11/30/99 606,000 411,874
6.80%, 1/10/03 4,000,000 3,700,000
Financing Corp.:
9.40%, 2/8/18 1,000,000 1,112,810
9.65%, 11/2/18 2,800,000 3,162,250
Government Trust Certificates Class T-2 (assets of Trust
guaranteed by U.S. Government through Defense
Security Assistance Agency) 9 5/8%, 5/15/02 2,330,000 2,491,644
Government Trust Certificates, Series 1992-A (assets of
Trust guaranteed by U.S. Government through
Export-Import Bank) 7.02%, 9/01/04 890,000 856,903
State of Israel (guaranteed by U.S. government through
Agency for International Development):
4 7/8%, 9/15/98 700,000 635,469
6%, 2/15/99 4,700,000 4,416,531
6 1/8%, 3/15/03 1,200,000 1,055,250
Student Loan Marketing Association 8.14%, 10/15/03 650,000 650,000
27,237,000
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $118,746,000) 120,167,343
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 35.9%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 18.6%
8%, 2/1/17 to 3/1/17 1,646,483 1,584,262
8 1/2%, 7/1/08 to 11/1/19 5,068,940 5,006,517
9%, 8/1/08 to 4/1/20 1,889,981 1,936,973
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORPORATION - CONTINUED
9 1/2%, 6/1/09 to 8/1/24 $ 15,898,908 $ 16,494,494
10%, 7/1/09 to 12/1/20 6,800,082 7,212,650
10 1/2%, 10/1/15 to 12/1/20 9,340,153 9,950,175
11 1/2%, 8/1/19 616,584 675,350
12%, 9/1/03 to 12/1/15 310,236 310,236
12 1/4%, 3/1/11 to 6/1/19 2,210,445 2,474,600
13%, 12/1/97 to 6/1/15 577,422 655,982
13 1/2%, 10/1/11 2,076 2,403
46,303,642
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.9%
6%, 10/1/23 118,667 101,052
6 1/2%, 1/1/24 977 861
7.778%, 7/1/01 5,000,000 4,943,750
8 1/4%, 12/1/01 (b) 1,000,000 1,003,125
11%, 8/1/10 1,195,285 1,310,822
11 1/4%, 5/1/14 563,650 616,560
12%, 2/1/14 to 3/1/17 3,325,043 3,719,892
12 1/2%, 3/1/16 163,671 184,744
13%, 9/1/13 110,944 126,892
13 1/2%, 5/1/11 to 1/1/15 326,228 373,938
12,381,636
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 12.4%
7%, 8/15/23 165,650 148,463
7 1/2%, 3/15/17 to 12/15/23 9,379,308 8,714,200
7 1/2%, 12/15/24 (a)(b) 5,000,000 5,021,900
8%, 9/15/23 to 8/15/24 10,797,755 10,355,535
8 1/2%, 1/15/06 to 7/15/08 288,699 292,040
9%, 1/15/11 to 6/15/17 3,946,659 4,030,015
9 1/2%, 6/15/09 to 11/15/09 1,265,350 1,333,850
10%, 1/15/16 to 4/15/16 7,116 7,651
11%, 4/15/13 to 6/15/13 90,540 100,048
11 1/2%, 4/15/10 to 4/15/13 122,970 137,111
12 1/2%, 12/15/13 to 8/15/15 525,375 598,832
13 1/2%, 7/15/11 101,141 117,830
30,857,475
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED
SECURITIES (Cost $96,404,740) 89,542,753
COLLATERALIZED MORTGAGE OBLIGATIONS - 8.3%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PRIVATE SPONSOR - 0.2%
DLJ Acceptance Trust planned amortization class,
Series 1989 Class 1-F, 11%, 8/1/19 $ 478,139 $ 506,827
U.S. GOVERNMENT AGENCY - 8.1%
Federal Home Loan Mortgage Corporation planned
amortization class, Class 68-G, 9%, 5/15/19 10,000,000 10,137,500
Federal National Mortgage Association planned
amortization class, Series 1993 Class 109-G,
6%, 8/25/05 6,200,000 5,734,031
U.S. Dept. Veterans Affairs Vendee Mortgage Trust
sequential pay Series 1993-3 Class 2-E,
6%, 11/15/16 5,500,000 4,351,875
20,223,406
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $22,320,652) 20,730,233
COMPLEX MORTGAGE SECURITIES - 5.0%
INTEREST ONLY STRIPS -2.4%
Federal National Mortgage Association trust 249,
6 1/2%, 10/25/23 (c) 15,979,347 5,862,423
Z BOND - 2.6%
U.S. Dept. Veterans Affairs Vendee Mortgage Trust
Series 1994-1 Class 2-ZA, 6 1/2%, 7/15/20 9,919,556 6,472,510
TOTAL COMPLEX MORTGAGE SECURITIES
(Cost $14,730,534) 12,334,933
REPURCHASE AGREEMENTS - 2.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 6,516,865 6,516,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $258,717,926) $ 249,291,262
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
74 U.S. Treasury Bond Contracts March 95 $ 7,426,109 $ (30,734)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 3.0%

LEGEND
(a) Security sold on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(b) Security purchased on a delayed delivery basis. Interest rate to be
determined at settlement date (see Note 2 of Notes to Financial
Statements).
(c) Security represents right to receive monthly interest payments on an
underlying pool of mortgages. Principal shown is the par amount of the
mortgage pool.
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $259,125,251. Net unrealized depreciation aggregated
$9,833,989, of which $961,481 related to appreciated investment securities
and $10,795,470 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending April 30, 1995
$5,057,000 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>
OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 249,291,262
agreements of $6,516,000) (cost $258,717,926) -
See accompanying schedule

Commitment to sell securities on a delayed delivery $ (5,021,900)
basis

Receivable for securities sold on a delayed delivery 5,040,625 18,725
basis

Receivable for investments sold, regular delivery 5,753,093

Cash 697

Interest receivable 3,578,322

TOTAL ASSETS 258,642,099

LIABILITIES

Payable for investments purchased 2,861,022
Regular delivery

Delayed delivery 6,039,844

Payable for fund shares redeemed 523,586

Dividends payable 223,002

Accrued management fee 137,170

Payable for daily variations on futures contracts 2,313

TOTAL LIABILITIES 9,786,937

NET ASSETS $ 248,855,162

Net Assets consist of:

Paid in capital $ 273,199,668

Undistributed net investment income 407,048

Accumulated undistributed net realized gain (loss) on (15,312,881)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (9,438,673)
investments

NET ASSETS, for 25,609,727 shares outstanding $ 248,855,162

NET ASSET VALUE, offering price and redemption price per $9.72
share ($248,855,162 (divided by) 25,609,727 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 10,721,974
Interest

EXPENSES

Management fee $ 864,930

Non-interested trustees' compensation 783

TOTAL EXPENSES 865,713

NET INVESTMENT INCOME 9,856,261

REALIZED AND UNREALIZED GAIN (LOSS) (8,907,345)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on:

Investment securities 234,183

Futures contracts (30,734)

Delayed delivery commitments (157,185) 46,264

NET GAIN (LOSS) (8,861,081)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 995,180
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED OCTOBER APRIL 30, 1994
31, 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 9,856,261 $ 26,977,562
Net investment income

Net realized gain (loss) (8,907,345) (6,693,220)

Change in net unrealized appreciation (depreciation) 46,264 (18,819,747)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 995,180 1,464,595
FROM OPERATIONS

Distributions to shareholders: (8,741,083) (21,081,236)
From net investment income

From net realized gain - (3,856,086)

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

TOTAL DISTRIBUTIONS (8,741,083) (31,064,858)

Share transactions 16,257,158 76,411,385
Net proceeds from sales of shares

Reinvestment of distributions 7,328,796 26,884,876

Cost of shares redeemed (53,638,655) (244,767,610)

Net increase (decrease) in net assets resulting from (30,052,701) (141,471,349)
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (37,798,604) (171,071,612)

NET ASSETS

Beginning of period 286,653,766 457,725,378

End of period (including undistributed net investment $ 248,855,162 $ 286,653,766
income of $407,048 and $1,429,535, respectively)

OTHER INFORMATION
Shares

Sold 1,640,468 7,048,083

Issued in reinvestment of distributions 740,947 2,500,119

Redeemed (5,429,828) (22,782,018)

Net increase (decrease) (3,048,413) (13,233,816)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED APRIL 30,
ENDED
OCTOBER 31,
1994

(UNAUDITED) 1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, $ 10.000 $ 10.930 $ 10.900 $ 10.640 $ 10.030 $ 10.050
beginning of period

Income from .292 .624 .784 .846 .870 .936
Investment
Operations
Net investment
income

Net realized and (.246) (.720) .370 .294 .610 .010
unrealized gain
(loss)

Total from investment .046 (.096) 1.154 1.140 1.480 .946

operations

Less Distributions (.326) (.574) (.704) (.840) (.870) (.936)
From net investment
income

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

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

Total distributions (.326) (.834) (1.124) (.880) (.870) (.966)

Net asset value, end of $ 9.720 $ 10.000 $ 10.930 $ 10.900 $ 10.640 $ 10.030
period

TOTAL RETURN A, B 0.45% (1.14) 11.12% 11.05% 15.27% 9.47%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 249 $ 287 $ 458 $ 483 $ 430 $ 283
period (in millions)

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

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

Ratio of net investment 7.35% 6.79% 7.11% 7.77% 8.35% 9.02%
income to average C
net assets

Portfolio turnover rate 323% 354% 170% 59% 96% 68%
C

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C ANNUALIZED
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994 (Unaudited)

7. 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 of their purchase date 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, futures and options
transactions, and losses deferred due to wash sales and excise tax
regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. 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.
8. 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
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
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 affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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 and options contracts, and may also 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, as reflected in the
schedule of investments under the caption "Futures Contracts," 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.
9. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $418,180,286 and $439,809,017, respectively.
The market value of futures contracts opened during the period amounted to
$7,395,375.
10. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
including the cost of providing shareholder services, except the
compensation of
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES - CONTINUED
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.
To offset the cost of providing shareholder services, FMR or its affiliates
collect certain transaction fees from the fund's shareholders. For the
period, fees collected from shareholders amounted to $5,802.
TO WRITE FIDELITY

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AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert Ives, Vice President
Thomas J. Steffanci, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, 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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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
FIDELITY'S TAXABLE BOND FUNDS
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(2_FIDELITY_LOGOS)SPARTAN

HIGH INCOME
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 past six
months.

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

FINANCIAL STATEMENTS 24 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 28 Notes to the financial statements.

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 OCTOBER 31, 1994 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan High Income 1.88% 4.70% 100.98%

Merrill Lynch High Yield Master Index 2.15% 1.95% n/a

Average High Current Yield Fund - 0.08% - 0.41% n/a

Consumer Price Index 1.42% 2.61% 13.60%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
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 currently reflects
the performance of 99 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 (CPI) 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 OCTOBER 31, 1994 PAST 1 LIFE OF
YEAR FUND

Spartan High Income 4.70% 18.18%

Merrill Lynch High Yield Master Index 1.95% n/a

Average High Current Yield Fund - 0.41% n/a

Consumer Price Index 2.61% 3.11%

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
Spartan High Income Fund (455)High Yield Maste
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 10835.38
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 19599.27 17463.29
05/31/94 19680.10 17489.76
06/30/94 19676.53 17554.18
07/31/94 19699.47 17677.55
08/31/94 19701.68 17800.38
09/30/94 19858.40 17793.59
10/31/94 19965.31 17838.82

$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 October 31, 1994, the value of your investment would have
grown to $19,970 - a 99.70% increase on your initial investment. This
assumes you still own the fund on October 31, 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
$17,839 - a 78.39% 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
SIX MONTHS (COMMENCEMENT
ENDED OF
OCTOBER 31, OPERATIONS DATE)
TO APRIL 30,

1994 1994 1993 1992 1991

Dividend return 4.69% 8.94% 10.88% 14.44% 8.93%

Capital appreciation -2.81% 3.75% 6.07% 15.30% 6.39%
return

Total return 1.88% 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. Capital
appreciation and total returns include the effect of the $5 account
closeout fee.
DIVIDENDS AND YIELD
PERIODS ENDED PAST PAST 6 PAST
MONTH MONTHS YEAR

Dividends per share 7.47(cents) 54.77(cents) 115.92(cents)

Annualized dividend rate 7.69% 9.37% 9.67%

30-day annualized yield 8.17% - -

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 $11.43 over
the past month, $11.60 over the past six months, $11.99 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.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with David Glancy, Portfolio Manager of Spartan High Income
Fund
Q. DAVID, HOW HAS THE FUND PERFORMED?
A. Higher interest rates and falling bond prices took their toll on most
fixed-income funds, including this one. The fund had a total return of
1.88% for the six months ended October 31, 1994. That beat the -0.08%
return of the average high yield fund, according to Lipper Analytical
Services. For the 12 months ended October 31, 1994, the fund returned
4.70%. That also beat the average fund's return of -0.41%, again according
to Lipper.
Q. AFTER HAVING ENJOYED THREE CONSECUTIVE YEARS OF 20% OR MORE RATES OF
ANNUAL RETURN, WHAT CAUSED THE HIGH-YIELD MARKET TO DROP IN 1994?
A. The primary factor was higher interest rates. Beginning in February the
Federal Reserve Board began raising interest rates. It did so by nudging
the Federal funds rate - the rate banks charge each other for overnight
loans - up a quarter point, to 3.25%. Two more quarter-point increases
followed in March and April. By that point, the bond markets had suffered a
significant sell-off. Interest rates kept climbing - and high yield bond
prices kept dropping - through October.
Q. HOW DID HIGH-YIELD BONDS DO COM-PARED TO OTHER FIXED-INCOME INVESTMENTS?
A. By the end of October, the federal fund rate had reached 4.75%. Because
of their high coupons, or interest rates, high-yield bonds were hurt less
than other fixed-income alternatives during the down draft. One factor
specific to the high-yield market was that some high-yield bonds collapsed,
causing investors to worry that other high-yield investments were at risk.
Those worries put additional downward pressure on prices.
Q. DESPITE THE MARKET'S PROBLEMS, YOU BEAT THE AVERAGE FUND BY A FAIRLY
WIDE MARGIN. WHY?
A. Avoiding the precarious situations mentioned above was one reason.
Maintaining a relatively high level of cash and short-term investments was
another. Throughout the past six months, I've kept the fund's cash level at
roughly 10% to 15%.
Q. WHY WAS THE FUND'S CASH POSITION SO HIGH?
A. The rationale was threefold. First, cash was a safe haven from the bond
market's travails. Second, I wanted to ensure that if the fund were to
experience significant redemptions - which it hadn't by the end of October
- - I wouldn't be forced to sell bonds at distressed prices. Finally, I
wanted to position the fund to potentially take advantage of other
investors' selling. If they were forced to sell, because of the markets'
decline, they would probably sell their most liquid, attractive bonds first
- - at relatively cheap prices. And with cash on hand, I have the flexibility
to buy these issues.
Q. ASIDE FROM CASH, WHAT SPECIFIC INVESTMENTS HELPED THE FUND'S RELATIVE
PERFORMANCE?
A. Revlon, which was the fund's largest holding at 8.2% of investments at
the end of October 1994, underwent a turnaround over the past six months
and was one of the fund's strongest performers. Like most cosmetic
companies, Revlon suffered during the recession. However, with the economy
on the mend, the company has done quite well. Six months ago, I pointed out
that Revlon was one of the fund's disappointing holdings. At that point, it
was trading at about 40 cents on the dollar; by the end of the October, it
traded at about 56 cents on the dollar. From here, I think it still may
have a fair amount of upside potential.
Q. WHAT INVESTMENTS WERE DISAPPOINTING DURING THIS PERIOD?
A. El Paso Electric was one laggard over the past six months. The company
was set to be acquired out of bankruptcy by Central and Southwest for 90
cents on the dollar. But as interest rates rose, Central and Southwest
started revising its offer. It is likely that the new deal will call for El
Paso to be acquired for 70 cents on the dollar. At the end of October, the
issue was trading for 50 cents on the dollar and paying a coupon of 9%.
That would make the current total return about 18% if the deal goes through
at 70 cents. In my opinion, that makes the upside attractive and keeps the
downside limited.
Q. IT HAS BEEN A PARTICULARLY TOUGH TIME FOR GAMING AND CASINO COMPANIES.
WHY DO YOU KEEP ADDING TO YOUR HOLDINGS THERE?
A. It's true that the sector is out of favor, but I think investors have
done the equivalent of throwing the baby out with the bath water. In my
opinion, this industry has a bright future as more local and state
governments legalize casino gambling as a way to boost their local
economies. Grand Casinos, which is a large holding in the fund, is
attractive for those reasons and because of its high coupon of 12.5%.
However, it's important to point out that I don't make sector bets. 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.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT OVER THE NEXT SIX MONTHS?
A. For the near term, more of the same. It appears that interest rates
could continue to go higher, which won't do much help to the bond markets.
I caution investors to expect, at best, only the coupon rate on new issues
- - which is about 10% or 11% - as total return in 1995.
Q. SO WHAT WILL YOUR STRATEGY BE
GOING FORWARD?
A. I'll most likely continue to keep a fair amount of cash and short-term
investments on hand. I'll also continue to concentrate on avoiding credit
mistakes first, and then earning an attractive yield compared to
Treasuries.
FUND FACTS
GOAL: high current income by
investing primarily in
high-yielding debt securities with
an emphasis on lower-quality
securities including
income-producing debt
securities, preferred stocks, and
convertible securities
START DATE: August 29, 1990
SIZE: as of October 31, 1994
more than $635 million
MANAGER: David Glancy,
since April 1993; joined
Fidelity in 1990
(checkmark)
DAVID GLANCY'S STRATEGY:
"For now, I'll continue to keep
about 12% of the fund's
investments in cash and
short-term investments. That
allows me to meet
redemptions, without having
to sell bonds I like at
distressed prices. What's
more, having this cash on
hand affords me the flexibility
to invest when I find attractive
investments that other
investors may have sold
under pressure at low prices.
With interest rates rising, it is,
and probably will continue to
be, difficult to find bonds with
the potential for capital
appreciation. As a result, my
first focus will be on not losing
principal. I won't risk principal
by chasing after yield. Risk of
loss is always the first
assessment, followed by
adequacy of return."
(solid bullet) Corporate bonds totaled
69.6% of investments while
cash made up 12.5% of assets
at the end of October 1994.
That compared to six months
ago when corporate bonds
made up 70.0% of investments
and cash totaled 10.3%.
(solid bullet) Preferred and common
stocks were 13.1% of the
fund's investments at the end
of the period.
INVESTMENT CHANGES

TOP FIVE HOLDINGS AS OF OCTOBER 31, 1994
(BY ISSUER, EXCLUDING REPURCHASE % OF FUND'S % OF FUND'S
AGREEMENTS) INVESTMENTS INVESTMENTS
IN THESE HOLDINGS
6 MONTHS AGO

Revlon World Wide Corp. 8.2 1.2

SCI Television, Inc. 4.8 4.9

Bally's Casino Holdings 3.7 2.0

Boyd Gaming Corp. 3.2 3.3

Robin Media Group, Inc. 3.2 1.7

TOP FIVE INDUSTRIES AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO

Media & Leisure 37.2 29.0

Nondurables 11.9 5.2

Finance 6.6 5.8

Retail & Wholesale 4.6 8.9

Construction & Real Estate 3.9 9.3

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1994
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Aaa, Aa, A - -

Baa - -

Ba 1.4 3.3

B 35.7 29.5

Caa, Ca, C 7.7 6.7

Nonrated 30.1 37.4

TABLE EXCLUDES SHORT-TERM INVESTMENTS. SECURITIES RATED AS ``BA'' BY
MOODY'S WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING
AGENCIES OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF ACQUISITION
BY FIDELITY.
ASSET ALLOCATION
AS OF OCTOBER 31, 1994 AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 4.8
Row: 1, Col: 2, Value: 12.5
Row: 1, Col: 3, Value: 7.0
Row: 1, Col: 4, Value: 6.6
Row: 1, Col: 5, Value: 69.8
Row: 1, Col: 1, Value: 6.8
Row: 1, Col: 2, Value: 10.3
Row: 1, Col: 3, Value: 4.9
Row: 1, Col: 4, Value: 8.4
Row: 1, Col: 5, Value: 69.59999999999999
Nonconvertible
Bonds 69.1%
Convertible Bonds,
Preferred Stock 6.6%
Common Stock 7.0%
Short-term
investments 12.5%
Other 4.8%
Nonconvertible
Bonds 69.6%
Convertible Bonds,
Preferred Stock 8.4%
Common Stock 4.9%
Short-term
investments 10.3%
Other 6.8%
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 69.6%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONVERTIBLE BONDS - 0.5%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Ampex Corp., Series C, 0%, 6/30/97 - $ 805,000 $ 407,451
MEDIA & LEISURE - 0.4%
LODGING & GAMING - 0.4%
Bally Entertainment Corp. 10%, 12/15/06 Caa 2,840,000 2,272,000
TOTAL CONVERTIBLE BONDS 2,679,451
NONCONVERTIBLE BONDS - 69.1%
AEROSPACE & DEFENSE - 0.2%
Fairchild Corp. 12%, 10/15/01 B3 1,310,000 1,185,550
BASIC INDUSTRIES - 1.9%
CHEMICALS & PLASTICS - 1.9%
American Pacific Corp. 11%, 12/15/02 (f) - 2,300,000 2,300,000
Rexene Corp:
pay-in-kind 10%, 11/15/02 - 857,000 895,565
9%, 11/15/99 - 2,230,000 2,221,638
Trans Resources, Inc. 14 1/2%, 9/1/96 B2 5,400,000 5,616,000
11,033,203
CONSTRUCTION & REAL ESTATE - 3.8%
BUILDING MATERIALS - 0.5%
Adience, Inc. 11%, 6/15/00 - 2,823,003 2,089,022
USG Corp. Series B, 9 1/4%, 9/15/01 B2 710,000 670,950
2,759,972
CONSTRUCTION - 2.6%
Baldwin Co. Series B, 10 3/8%, 8/1/03 B2 4,480,000 3,046,400
Engle Homes, Inc. 11 3/4%, 12/15/00 (f) B2 2,500,000 2,337,500
Forecast Group LP 11 3/8%, 12/15/00 B2 3,000,000 2,250,000
MDC Holdings, Inc. 8 3/4%, 12/15/05 - 1,710,000 1,436,400
U.S. Home Corp. 9 3/4%, 6/15/03 Ba3 7,500,000 6,375,000
15,445,300
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE - 0.7%
Littlefield Co. Series B, 10%, 8/31/94 (e) - $ 4,070,000 $ 4,070,000
TOTAL CONSTRUCTION & REAL ESTATE 22,275,272
DURABLES - 1.2%
TEXTILES & APPAREL - 1.2%
Hat Brands, Inc. 12 5/8%, 9/15/02 - 6,470,000 6,874,375
FINANCE - 4.1%
INSURANCE - 3.8%
American Financial Corp.:
Series B, 12%, 9/3/99 - 2,490,000 2,490,000
12%, 9/3/99 - 4,685,000 4,743,563
American Life Holdings 11 1/4%, 9/15/04 B1 8,400,000 8,400,000
Reliance Group 9 3/4%, 11/15/03 B1 7,000,000 6,265,000
21,898,563
SECURITIES INDUSTRY - 0.3%
ECM Corp. extendible 14%, 6/1/02 (f) - 1,657,427 1,823,169
TOTAL FINANCE 23,721,732
HOLDING COMPANIES - 0.3%
New Street Capital Corp. unit 12%, 2/28/98 (e) - 1,570,000 1,538,600
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
Imo Industries, Inc.:
12 1/4%, 8/15/97 Caa 6,150,000 6,180,750
12%, 11/1/00 Caa 5,640,000 5,745,750
Maritime Group Ltd. 13 1/2%, 2/15/97 (b)(f) - 2,308,378 1,073,396
Rexnord Holdings, Inc. 11 7/8%, 3/1/99 (e) - 650,000 630,500
13,630,396
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 34.5%
BROADCASTING - 14.0%
Citicasters 9 3/4%, 2/15/04 B- $ 15,625,000 $ 15,234,375
Helicon Group LP/Helicon Cap Corp.
9%, 11/1/03 Caa 2,680,000 2,278,000
NWCG Holdings Corp. 0%, 6/15/99 (f) B 9,940,000 5,268,200
PTI Holdings, Inc. 7%, 12/17/02 - 3,120,526 1,919,123
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 19,010,000 18,344,650
SCI Television, Inc. secured 11%, 6/30/05 B3 27,371,118 27,747,471
Scott Cable Communications, Inc.
12 1/4%, 4/15/01 - 900,000 630,000
Univision Network Holdings LP 7%, 12/17/02 - 16,112,365 9,909,104
81,330,923
ENTERTAINMENT - 1.6%
Fair Lanes, Inc. 9 1/2%, 7/15/01 - 11,000,000 9,146,500
LEISURE DURABLES & TOYS - 1.9%
Compact Video, Inc. 12 3/4%, 7/1/96 - 11,250,000 11,193,750
LODGING & GAMING - 15.1%
Aztar Corp. 11%, 10/1/02 B2 7,000,000 6,072,500
Bally Gaming International, Inc.
10 3/8%, 7/15/98 - 7,500,000 6,862,500
Ballys Grand, Inc. 10 3/8%, 12/15/03 B2 5,140,000 4,471,800
Bally's Casino Holdings, Inc. 10 1/2%, 6/15/98 B3 36,000,000 21,600,000
Bally's Park Place Funding, Inc. 9 1/4%, 3/15/04 B1 2,030,000 1,664,600
Boyd Gaming Corp. 10 3/4%, 9/3/03 B2 20,000,000 18,650,000
GNF Corp. Series B, 10 5/8%, 4/1/03 B2 200,000 118,000
Grand Casino Resorts, Inc. gtd. 1st mtg.
12 1/2%, 2/1/00 - 10,470,000 9,920,325
HWCC-Tunica, Inc. 13 1/2%, 9/30/98 (f) - 4,500,000 3,600,000
Resorts International Hotel Financing, Inc.
11 3/8%, 12/15/04 ($1,000 Jr. mtg. notes &
1 Class B New) - 647,000 329,970
Showboat, Inc. 13%, 8/1/09 B2 10,820,000 10,143,750
Trump Taj-Mahal Funding, Inc. 11.35%,
11/15/99 ($1,000 mtg. Tr. bonds, Series A,
with 1 share Class B redeemable and 2 shares
Class A of Taj-Mahal Holding Corp.) Caa 7,500,000 4,437,900
87,871,345
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 1.9%
Flagstar Corp.:
10 3/4%, 9/15/01 B2 $ 6,110,000 $ 5,712,850
10 7/8%, 12/1/02 B2 2,400,000 2,232,000
11 1/4%, 11/1/04 Caa 3,890,000 3,296,775
11,241,625
TOTAL MEDIA & LEISURE 200,784,143
NONDURABLES - 9.7%
FOODS - 1.5%
McAndrews & Forbes Group, Inc.
12 1/4%, 7/1/96 - 8,670,000 8,670,000
HOUSEHOLD PRODUCTS - 8.2%
Revlon World Wide Corp. secured 0%, 3/15/98 B3 86,345,000 47,705,613
TOTAL NONDURABLES 56,375,613
RETAIL & WHOLESALE - 3.5%
APPAREL STORES - 1.3%
Apparel Retailers, Inc. 12 3/4%, 8/15/05 Caa 10,242,000 5,889,150
Lamont's Apparel Corp. 10 1/4%, 11/1/99 (b) - 2,893,000 1,952,775
7,841,925
GENERAL MERCHANDISE STORES - 1.1%
Macy (R.H.) & Co., Inc.
14 1/2%, 10/15/98 (b) Ca 2,310,000 1,593,900
Parisian, Inc. 9 7/8%, 7/15/03 B3 6,070,000 4,886,350
6,480,250
GROCERY STORES - 0.2%
Farm Fresh Holdings Corp.
pay-in-kind 14 1/4%, 10/1/02 (f) - 1,956,957 1,150,945
RETAIL & WHOLESALE, MISCELLANEOUS - 0.9%
Town & Country Corp.:
11 1/2%, 9/15/97 B1 619,000 601,978
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Town & Country Corp. - continued:
13%, 5/31/98 B3 $ 2,935,008 $ 2,744,232
13%, 12/15/98 Ca 2,110,000 1,972,850
5,319,060
TOTAL RETAIL & WHOLESALE 20,792,180
SERVICES - 0.4%
Scotsman Holdings, Inc. pay-in-kind
11%, 3/1/04 - 2,879,315 2,518,680
TECHNOLOGY - 1.7%
COMPUTERS & OFFICE EQUIPMENT - 0.1%
San Jacinto Holdings, Inc.:
8%, 12/31/00 - 960,000 691,200
pay-in-kind 8%, 12/31/00 - 222,244 91,713
782,913
ELECTRONICS - 1.6%
Berg Electronics 11 3/8%, 5/1/03 B3 8,990,000 9,102,375
TOTAL TECHNOLOGY 9,885,288
TRANSPORTATION - 1.8%
AIR TRANSPORTATION - 0.4%
Continental Airlines, Inc. 2nd priority
equipment cert. 11%, 3/15/95 (b) Caa 480,000 48
U.S. Air, Inc. 10%, 7/1/03 B3 4,315,000 2,589,000
2,589,048
RAILROADS - 1.4%
Transtar Holdings LP/Transtar Cap Corp.,
Series B, 0%, 12/15/03 B- 15,582,000 8,102,640
TOTAL TRANSPORTATION 10,691,688
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - 3.7%
CELLULAR - 1.8%
Mobilmedia Communications, Inc.
0%, 12/1/03 (d) B3 $ 18,230,000 $ 10,391,100
ELECTRIC UTILITY - 0.9%
Del Norte Funding Corp (b):
9.05%, 1/2/93 Ca 1,021,000 541,130
secured leasing oblig. 11 1/4%, 1/2/14 Ca 440,000 233,200
El Paso Funding Corp. lease oblig. (b):
9 3/8%, 10/1/96 Ca 440,000 222,200
9 1/5%, 7/2/97 Ca 1,000,000 510,000
10 3/4%, 4/1/13 Ca 7,300,000 3,686,500
5,193,030
GAS - 1.0%
Columbia Gas Systems, Inc. (The) (b):
10 1/4%, 8/1/11 Caa 1,144,000 1,452,880
10 1/2%, 6/1/12 Caa 3,516,000 4,430,160
5,883,040
TOTAL UTILITIES 21,467,170
TOTAL NONCONVERTIBLE BONDS 402,773,890
TOTAL CORPORATE BONDS
(Cost $421,010,870) 405,453,341
COMMON STOCKS - 7.0%
SHARES
BASIC INDUSTRIES - 0.2%
CHEMICALS & PLASTICS - 0.2%
Atlantis Group, Inc. (Trivest/Winston) (e) 39,687 327,418
Rexene Corp. 57,500 1,035,000
1,362,418
PACKAGING & CONTAINERS - 0.0%
Crown Packaging Holdings Ltd. (warrants) (a)(f) 4,576 251,680
TOTAL BASIC INDUSTRIES 1,614,098
COMMON STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.0%
Adience, Inc. 319,287 $ 159,644
REAL ESTATE INVESTMENT TRUSTS - 0.1%
Trizec Corp. Ltd. Class A (warrants) (a) 174,081 337,010
TOTAL CONSTRUCTION & REAL ESTATE 496,654
DURABLES - 0.3%
TEXTILES & APPAREL - 0.3%
Cherokee, Inc. (warrants) (a):
Series A 4,033 403
Series B 4,949 49
Series C 14,847 148
Hat Brands, Inc. (warrants) (a)(e) 29,995 329,947
HM/Hat Brands Trust Class I units (a)(e) 1,500,000 1,500,000
1,830,547
ENERGY - 0.2%
ENERGY SERVICES - 0.2%
Petrolane, Inc. Class B 94,048 1,316,672
FINANCE - 2.2%
INSURANCE - 2.1%
American Premier Underwriters, Inc. 81,800 2,045,000
Vesta Insurance Group Corp. 376,300 9,924,913
11,969,913
SECURITIES INDUSTRY - 0.1%
ECM Corp. LP interest (a)(f) 5,400 540,000
TOTAL FINANCE 12,509,913
COMMON STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
HOLDING COMPANIES - 0.0%
NH Holdings, Inc. (warrants) (a) 393 $ 20
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp.:
Class A (warrants) (a) 98,726 160,430
Class C 432 702
Telex Communications Group (warrants) (a)(e) 1,387 34,675
195,807
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Terex Corp. (rights) (a) 13,020 9,765
Thermadyne Holdings Corp. (a) 1 12
9,777
POLLUTION CONTROL - 0.0%
Envirosource, Inc. (a) 2,700 9,450
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 215,034
MEDIA & LEISURE - 2.2%
BROADCASTING - 1.5%
Chancellor Trust Class I unit (e) 74 1,494,949
Citicasters, Inc. 286,669 6,700,888
8,195,837
LODGING & GAMING - 0.7%
Bally Gaming International, Inc. (warrants) (a) 225,000 1,575,000
Bally's Grand, Inc. 123,978 1,410,250
Bally's Grand, Inc. (warrants) (a) 8,406 34,675
Resorts International, Inc. 164,754 144,160
Sun International Hotels Ltd. 37,073 1,237,311
4,401,396
TOTAL MEDIA & LEISURE 12,597,233
NONDURABLES - 0.5%
BEVERAGES - 0.5%
Heileman G Brewing, Inc. unit (e) 150 3,000,000
FOODS - 0.0%
Chiquita Brands International, Inc. 221 2,735
TOTAL NONDURABLES 3,002,735
COMMON STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
RETAIL & WHOLESALE - 0.3%
APPAREL STORES - 0.1%
Lamonts Apparel, Inc. 562,103 $ 491,840
Lamonts Apparel, Inc. (warrants) (a) 92,674 1
491,841
GENERAL MERCHANDISE STORES - 0.0%
Southland Corp. (warrants) (a) 4,000 13,500
GROCERY STORES - 0.1%
FF Holdings Corp. (e) 455 910
Grand Union Co. (warrants) (a) 1,079 107,900
Grand Union Capital Corp. Class B 2,009 200,900
Purity Supreme, Inc. (warrants) (a)(e) 7,693 154
309,864
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
Finlay Enterprises, Inc. 4,460 66,900
Town & Country Jewelry Manufacturing Corp. Class A 474,439 652,354
719,254
TOTAL RETAIL & WHOLESALE 1,534,459
SERVICES - 0.1%
LEASING & RENTAL - 0.1%
Scotsman Holdings, Inc. 22,309 291,892
TECHNOLOGY - 0.9%
ELECTRONICS - 0.9%
Berg Electronics Holdings Corp. (a)(f) 1,075,080 5,375,400
TRANSPORTATION - 0.0%
AIR TRANSPORTATION - 0.0%
CHC Helicopter Corp. (warrants) (a) 30,960 5,719
COMMON STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
UTILITIES - 0.0%
ELECTRIC UTILITY - 0.0%
Northeast Utilities Associates (warrants) (a) 57,076 $ 67,778
GAS - 0.0%
UGI Corp. (warrants) (a) 37,100 13,913
TOTAL UTILITIES 81,691
TOTAL COMMON STOCKS
(Cost $37,112,210) 40,872,067
PREFERRED STOCKS - 6.1%
CONVERTIBLE PREFERRED STOCKS - 2.9%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.3%
Ampex Corp. 8% 3,394 1,764,880
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.1%
Bally Entertainment Corp., Series D, exch. $4.00 10,373 311,190
NONDURABLES - 1.7%
HOUSEHOLD PRODUCTS - 1.7%
Revlon Group, Inc., Series B, exch.,
pay-in-kind $14.875 99,488 9,749,820
RETAIL & WHOLESALE - 0.8%
GROCERY STORES - 0.8%
Supermarkets General Holdings Corp. exch.,
pay-in-kind $3.52 243,979 4,940,575
TOTAL CONVERTIBLE PREFERRED STOCKS 16,766,465
NONCONVERTIBLE PREFERRED STOCKS - 3.2%
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.1%
Stelco, Inc., Series B, 7.76% 23,803 437,507
PREFERRED STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
UDC Homes, Inc. Prime exch. 908 $ 3,973
ENERGY - 1.4%
OIL & GAS - 1.4%
Gulf Canada Resources Ltd. (a)(e) 53,931 144,940
Gulf Canada Resources Ltd. Series 1, adj. rate (a) 3,024,730 7,939,916
8,084,856
FINANCE - 0.3%
SAVINGS & LOANS - 0.3%
First Nationwide Bank 11 1/2% 19,283 1,971,687
TECHNOLOGY - 1.4%
ELECTRONICS - 1.4%
Berg Electronics Holding Corp. Series E, exch.,
pay-in-kind $3.4687 309,276 8,195,814
TOTAL NONCONVERTIBLE PREFERRED STOCKS 18,693,837
TOTAL PREFERRED STOCKS
(Cost $35,239,530) 35,460,302
COMMERCIAL MORTGAGE SECURITIES - 2.3%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CS First Boston Mortgage Securities Corp.:
commercial Series 1994-CFB1 Class E,
6.4769%, 1/25/28 (f) Ba2 $ 2,376,149 $ 1,847,456
commercial Series 1994-CFB1 Class F,
6.48%, 1/25/28 (f) - 2,766,356 1,794,241
Resolution Trust Corp. commercial Series 1994-C1
Class E, 8%, 6/25/26 BB 4,905,138 3,792,285
LaSalle National Trust NA, Trust No. 118501(e) - 6,044,440 6,044,440
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $13,468,681) 13,478,422
FOREIGN GOVERNMENT OBLIGATIONS - 0.0%
Mexico Value Recovery (rights) (a) 1,000 -
PURCHASED BANK DEBT - 2.5%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
El Paso1 Electric Co.:
secured loan $ 2,640,038 $ 2,508,036
term loan 2,890,000 2,745,500
unsecured loan 5,245,174 2,675,040
Macy (R.H.) & Co., Inc.:
10 Store loan (b) 1,176,708 1,187,004
10 Store Swap Claim (b) 586,864 591,999
LBO Swap Claim (b) 242,038 284,092
LBO Swap Claim 502,865 590,238
Trivest 1992 Special Fund Ltd. loan 13.6 (g) 3,475,681
TOTAL PURCHASED BANK DEBT
(Cost $13,540,903) 14,057,590
REPURCHASE AGREEMENTS - 12.5%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 72,914,680 72,905,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $593,277,194) $ 582,226,722
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
Atlantis Group, Inc.
(Trivest/Winston) 4/6/93 $ 46,451
Chancellor Trust
Class I unit 10/12/94 $ 1,494,949
FF Holdings Corp. 10/2/92 $ 18,200
Gulf Canada
Resources Ltd. 10/15/93 $ 133,814
HM/Hat Brands
Trust Class I
units 2/22/94 $ 1,500,000
Hat Brands, Inc. 9/2/92 to
(warrants) 2/23/94 $ 0
Heileman G.
Brewing, Inc.
unit 1/21/94 $ 3,000,000
ACQUISITION ACQUISITION
SECURITY DATE COST
LaSalle National
Trust NA, Trust
No. 118501 12/29/93 $ 6,044,439
Littlefield Co.
Series B, 10%,
8/31/94 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 Communica-
tions Group
(warrants) 4/15/92 $ 27,740
(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 $27,361,987 or 4.3% of net
assets.
(g) Represents number of units held.
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 1.4% BB 3.5%
B 35.7% B 29.8%
Caa 6.2% CCC 3.8%
Ca, C 1.5% CC, C 0.0%
D 1.6%
The percentage not rated by either S&P or Moody's amounted to 24.5%
including long-term debt categorized as other securities. FMR has
determined that unrated debt securities that are lower quality account for
24.5% of the total value of investment in securities.
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $593,121,909. Net unrealized depreciation aggregated
$10,895,187, of which $21,255,390 related to appreciated investment
securities and $32,150,577 related to depreciated investment securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 582,226,722
agreements of $72,905,000) (cost $593,277,194) -
See accompanying schedule

Cash 2,459,932

Receivable for investments sold 58,135,285

Dividends receivable 302,912

Interest receivable 7,658,927

TOTAL ASSETS 650,783,778

LIABILITIES

Payable for investments purchased $ 11,833,842

Payable for fund shares redeemed 1,633,029

Dividends payable 938,569

Accrued management fee 448,458

TOTAL LIABILITIES 14,853,898

NET ASSETS $ 635,929,880

Net Assets consist of:

Paid in capital $ 647,301,693

Undistributed net investment income 1,713,079

Accumulated undistributed net realized gain (loss) on (2,051,124)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (11,033,768)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 55,428,703 shares outstanding $ 635,929,880

NET ASSET VALUE, offering price and redemption price per $11.47
share ($635,929,880 (divided by) 55,428,703 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 1,814,954
Dividends

Interest 26,672,423

TOTAL INCOME 28,487,377

EXPENSES

Management fee $ 2,611,996

Non-interested trustees' compensation 1,862

TOTAL EXPENSES 2,613,858

NET INVESTMENT INCOME 25,873,519

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (970,039)

Foreign currency transactions 5,305 (964,734)

Change in net unrealized appreciation (depreciation) on:

Investment securities (13,374,236)

Assets and liabilities in foreign currencies 16,704 (13,357,532)

NET GAIN (LOSS) (14,322,266)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 11,551,253
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED OCTOBER APRIL 30,
31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 25,873,519 $ 54,180,591
Net investment income

Net realized gain (loss) (964,734) 45,427,612

Change in net unrealized appreciation (depreciation) (13,357,532) (25,158,437)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,551,253 74,449,766
FROM OPERATIONS

Distributions to shareholders: (30,707,991) (52,719,224)
From net investment income

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

From net realized gain (4,360,064) (40,280,405)

TOTAL DISTRIBUTIONS (35,068,055) (97,190,413)

Share transactions 133,398,057 376,388,246
Net proceeds from sales of shares

Reinvestment of distributions 27,785,443 80,688,781

Cost of shares redeemed (142,824,666) (397,341,830)

Redemption fees 402,829 2,273,295

Net increase (decrease) in net assets resulting from 18,761,663 62,008,492
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (4,755,139) 39,267,845

NET ASSETS

Beginning of period 640,685,019 601,417,174

End of period (including undistributed net investment $ 635,929,880 $ 640,685,019
income of $1,713,079 and $6,547,551, respectively)

OTHER INFORMATION
Shares

Sold 11,445,403 30,409,458

Issued in reinvestment of distributions 2,395,944 6,545,733

Redeemed (12,340,673) (32,248,109)

Net increase (decrease) 1,500,674 4,707,082

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED APRIL 30, AUGUST 29, 1990
ENDED (COMMENCEMEN
OCTOBER 31, T OF OPERATIONS)
TO APRIL 30,

1994 1994 1993 1992 1991

(UNAUDITED)

SELECTED PER-SHARE DATA

Net asset value, $ 11.880 $ 12.220 $ 11.900 $ 10.640 $ 10.000
beginning of period

Income from .457 1.101 1.175 1.292 .811
Investment
Operations
Net investment
income

Net realized and (.246) .357 .672 1.614 .602
unrealized gain
(loss)

Total from .211 1.458 1.847 2.906 1.413
investment
operations

Less Distributions (.548) (.976) (1.183) (1.342) (.796)
From net investment
income

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

From net realized (.080) (.790) (.370) (.320) -
gain on investments

Total distributions (.628) (1.844) (1.553) (1.662) (.796)

Redemption fees .007 .046 .026 .016 .023
added to paid in
capital

Net asset value, end $ 11.470 $ 11.880 $ 12.220 $ 11.900 $ 10.640
of period

TOTAL RETURN B 1.89% 12.70 16.96 29.76 15.33%
% % %

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 635,930 $ 640,685 $ 601,417 $ 370,933 $ 100,840
period (000 omitted)

Ratio of expenses to .80% .75 .70 .70 .70%
average net assets A % % % A

Ratio of net 7.92% 8.07 9.57 11.43 11.98%
investment income A % % % A
to average net
assets

Portfolio turnover rate 143% 213 136 99 72%
A % % % A

</TABLE>

A ANNUALIZED
B 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 October 31, 1994 (Unaudited)

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 exchange quotations are readily
available are valued by a pricing service at their market values as
determined by their most recent bid prices in the principle market (sales
prices if the principle 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 of their purchase date 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 prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective May 1, 1994, the fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment in securities.
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."
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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 Board of 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.
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, partnerships, foreign currency transactions 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 and may
affect net investment income per share disclosed. 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.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. 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 any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
2. OPERATING POLICIES - CONTINUED
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 SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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.
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 $19,116,533 or 3.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $409,028,159 and $447,300,909,
respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser FMR pays all expenses
except the compensation of 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 .80% 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 collect certain transaction fees from the
fund's shareholders which aggregated $13,543.
BROKERAGE COMMISSION.The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $23,248 for the period.
5. 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 $15,349,000. The weighted average
interest rate was 4.96%. Interest earned from the interfund lending program
amounted to $6,338 and is included in interest income on the Statement of
Operations.
INVESTMENT ADVISER
Fidelity Management & Research
Company, Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert A. Lawrence, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, 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
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)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

INVESTMENT GRADE BOND
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 past six
months.

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

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

NOTES 26 Notes to the financial statements.

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. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND INCLUDING
CHARGES
AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

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 OCTOBER 31, 1994 PAST 6 PAST PAST 5 PAST 10
MONTHS YEAR YEARS YEARS

Investment Grade Bond 0.25% -5.16% 51.87% 160.14%

Lehman Brothers Aggregate Bond Index 0.28% -3.67% 45.73% 165.69%

Average Corporate BBB-Rated Bond - 0.27% -5.37% 46.73% 155.01%
Fund

Consumer Price Index 1.42% 2.61% 19.03% 41.98%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, 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 79 funds currently 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 (CPI) 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 OCTOBER 31, 1994 PAST PAST 5 PAST 10
YEAR YEARS YEARS

Investment Grade Bond -5.16% 8.72% 10.03%

Lehman Brothers Aggregate Bond Index -3.67% 7.82% 10.26%

Average Corporate BBB-Rated Bond -5.37% 7.86% 9.77%
Fund

Consumer Price Index 2.61% 3.55% 3.57%

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
05/31/85 11188.02 11340.90
06/30/85 11308.62 11461.12
07/31/85 11248.23 11421.00
08/31/85 11471.03 11635.72
09/30/85 11558.38 11705.53
10/31/85 11786.53 11951.35
11/30/85 12115.54 12238.18
12/31/85 12447.59 12612.67
01/31/86 12503.98 12683.30
02/28/86 13051.96 13183.02
03/31/86 13366.32 13591.69
04/30/86 13470.04 13663.73
05/31/86 13161.58 13402.75
06/30/86 13540.17 13753.91
07/31/86 13609.91 13876.31
08/31/86 13864.63 14220.45
09/30/86 13636.29 14079.67
10/31/86 13838.21 14282.41
11/30/86 14037.21 14482.37
12/31/86 14142.71 14535.95
01/31/87 14343.23 14740.91
02/28/87 14445.15 14842.62
03/31/87 14336.65 14775.83
04/30/87 13855.15 14370.97
05/31/87 13746.38 14314.92
06/30/87 13872.06 14512.47
07/31/87 13874.55 14500.86
08/31/87 13795.90 14424.01
09/30/87 13450.02 14116.77
10/31/87 13821.33 14619.33
11/30/87 13986.89 14736.29
12/31/87 14158.56 14936.70
01/31/88 14704.40 15462.47
02/29/88 14932.83 15646.47
03/31/88 14739.76 15499.40
04/30/88 14651.40 15415.70
05/31/88 14543.55 15312.42
06/30/88 14846.83 15681.44
07/31/88 14800.90 15598.33
08/31/88 14820.73 15638.89
09/30/88 15128.72 15993.89
10/31/88 15373.65 16294.58
11/30/88 15235.96 16095.78
12/31/88 15280.30 16113.49
01/31/89 15440.25 16345.52
02/28/89 15412.36 16227.83
03/31/89 15504.99 16297.61
04/30/89 15786.02 16638.23
05/31/89 16118.81 17075.82
06/30/89 16618.91 17596.63
07/31/89 17004.49 17971.44
08/31/89 16738.95 17705.46
09/30/89 16789.57 17795.76
10/31/89 17129.17 18233.54
11/30/89 17250.58 18406.76
12/31/89 17266.79 18456.45
01/31/90 17033.62 18236.82
02/28/90 17077.54 18295.18
03/31/90 17077.04 18307.99
04/30/90 16940.47 18139.55
05/31/90 17401.13 18676.48
06/30/90 17664.65 18977.18
07/31/90 17927.67 19239.06
08/31/90 17688.28 18981.26
09/30/90 17791.85 19138.80
10/31/90 17629.90 19381.86
11/30/90 18009.69 19798.57
12/31/90 18314.09 20107.43
01/31/91 18502.99 20356.76
02/28/91 18793.55 20529.80
03/31/91 19035.47 20671.45
04/30/91 19280.94 20894.70
05/31/91 19417.41 21015.89
06/30/91 19415.20 21005.39
07/31/91 19673.21 21297.36
08/31/91 20164.05 21757.38
09/30/91 20597.06 22199.06
10/31/91 20802.30 22445.47
11/30/91 21004.75 22651.97
12/31/91 21778.08 23324.73
01/31/92 21505.43 23007.51
02/29/92 21677.06 23157.06
03/31/92 21639.81 23027.38
04/30/92 21715.65 23193.18
05/31/92 22163.67 23631.53
06/30/92 22422.93 23957.65
07/31/92 23091.75 24446.38
08/31/92 23298.97 24693.29
09/30/92 23505.19 24987.14
10/31/92 23183.10 24654.81
11/30/92 23204.55 24659.74
12/31/92 23588.85 25051.83
01/31/93 24141.52 25532.83
02/28/93 24747.41 25979.65
03/31/93 24976.35 26088.77
04/30/93 25108.77 26271.39
05/31/93 25242.04 26305.54
06/30/93 25903.61 26781.67
07/31/93 26302.59 26934.33
08/31/93 27030.18 27405.68
09/30/93 27107.82 27479.67
10/31/93 27429.60 27581.35
11/30/93 27197.78 27346.91
12/31/93 27417.01 27494.58
01/31/94 27845.62 27865.76
02/28/94 26937.28 27380.89
03/31/94 26147.93 26704.58
04/30/94 25949.10 26490.95
05/31/94 25995.00 26488.30
06/30/94 25850.34 26430.02
07/31/94 26257.36 26955.98
08/31/94 26337.38 26988.33
09/30/94 26116.70 26591.60
10/31/94 26013.50 26568.67

$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Investment Grade
Bond Fund on October 31, 1984. As the chart shows, by October 31, 1994, the
value of your investment would have grown to $26,014 - a 160.14% 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 $26,569 - a 165.69%
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
SIX MONTHS
ENDED
OCTOBER 31, YEARS ENDED APRIL 30,

1994 1994 1993 1992 1991 1990

Dividend return 3.43% 6.92% 8.56% 9.12% 9.70% 8.96%

Capital appreciation -3.18% -3.57% 7.07% 3.51% 4.12% -1.65%
return

Total return 0.25% 3.35% 15.63% 12.63% 13.82% 7.31%

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 6 PAST
MONTH MONTHS YEAR

Dividends per share 4.23(cents) 24.95(cents) 50.78(cents)

Annualized dividend rate 7.14% 6.96% 6.84%

30-day annualized yield 6.96% - -

</TABLE>

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 $6.98 over
the past month, $7.11 over the past six months and $7.42 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 Michael Gray, Portfolio Manager of Fidelity Investment
Grade Bond Fund
Q. MICHAEL, HOW HAS THE FUND
PERFORMED?
A. The fund showed a positive return for the past six months, slightly
bettering the average BBB-rated corporate bond fund. Its total return was
0.25% for the six months ended October 31, 1994. According to Lipper
Analytical Services, the average BBB-rated corporate bond fund returned
- -0.27% for the same period. For the year ended October 31, the fund
returned -5.16%, compared to -5.37% for the Lipper average.
Q. CAN YOU GIVE US A RECAP OF WHAT THE MARKET ENVIRONMENT HAS BEEN LIKE?
A. Sure. The Federal Reserve Board raised the federal funds rate - the rate
banks charge each other for overnight loans - from 3.00% to 4.75% during
the first 10 months of 1994. Rising interest rates and inflation concerns
caused yields to rise and prices to fall on virtually all types of
fixed-income investments. The Fed was hoping to head off future inflation
that might be triggered by the improving U.S. economy. The very threat of
inflation led investors to heavily sell bonds, because inflation diminishes
the value of fixed-rate income payments. At the end of the period, however,
even interest rate-sensitive sectors such as housing hadn't been impacted
by the increase in rates. Housing starts and home sales remained at pretty
strong levels. The economy continues to grow at more than 3%, a rate the
Fed considers inflationary. So I'm expecting the Fed may raise rates again
before the end of the year.
Q. WHAT KIND OF STRATEGY HAVE YOU ADOPTED TO DEAL WITH SUCH A BEAR MARKET?
A. A pretty defensive one. I've continued to reduce the fund's duration -
its sensitivity to interest rate changes - a move I started in February and
March. I've done this by investing in a combination of cash instruments and
bonds, both corporate and government. I've increased the fund's short-term
cash investments by selling bonds and keeping any new assets in cash.
Corporate issues have been sell candidates because the yield differential
between corporate bonds and Treasury bonds has narrowed. That means that
corporate bonds offer a less attractive yield advantage, given their
potential risk. I've also maintained the fund's government bond investments
because they are easy to trade, and especially easy to sell if new
opportunities arise.
Q. WHERE DO YOU THINK YOU'LL FIND SUCH OPPORTUNITIES?
A. To be honest, with interest rates still on the rise, not many areas are
appealing right now. Some European government obligations are starting to
look attractive because their real yields -the difference between stated
yields and the countries' expected inflation rates - are high, but I'm not
ready to jump in just yet. Interest rates will not rise forever, and when
they begin to turn, I anticipate some attractive opportunities. I'm
building cash because I want to take advantage of those opportunities when
I see an improved environment.
Q. WHAT ABOUT MORTGAGE-RELATED
SECURITIES?
A. The fund has been underweighted in mortgages - holding only 3.7% in them
as of October 31 - for two reasons. First, mortgages are unattractive
because the yield differential between mortgage securities and Treasuries
is very tight. Second, in an environment in which rates are rising, the
duration of mortgage securities tends to lengthen. That's because
prepayments - which occur when mortgages are paid off early - slow down and
extend the average life of the mortgage. In a rising interest rate
environment, the investor wants instruments with short duration. In
addition, esoteric mortgage investments have hurt some other prominent
non-Fidelity mortgage investors. So, the mortgage market has not been
attractive, although at some point it will be again.
Q. WHAT SORT OF SIGNS DO YOU THINK WILL SIGNAL A MARKET TURNAROUND?
A. It's hard to be optimistic when the Fed is still raising interest rates.
When economic indicators show the economy weakening and growth slowing, it
might be easier to conclude the Fed is finished and the market is on its
way back.
Q. THERE HAS BEEN A LOT OF TALK IN THE NEWS ABOUT DERIVATIVES LATELY. DOES
THE FUND USE THESE INVESTMENTS?
A. Yes, the fund invests in Treasury bond futures contracts and options on
these futures. I have used them mainly to shorten the duration of the fund,
acting as a balance against the fund's longer-term bond holdings. And while
they can track the performance of actual bonds because they are tied to the
movement of Treasuries, they are easier and often cheaper to buy and sell.
I also used foreign forward currency contracts during the period, in an
attempt to hedge currency risk on the fund's foreign investments.
Q. LOOKING BACK, WHAT ARE YOUR
REGRETS?
A. I'm pleased the fund generated a positive return in a rising interest
rate environment. My defensive strategy has fared relatively well. One
regret is that I hedged my non-dollar investments earlier in the period as
a way to reduce currency volatility. The fund would have been better off
not doing this, because the dollar weakened and the protective hedging made
the fund miss out on currency gains.
Q. WHAT'S YOUR OUTLOOK GOING
FORWARD?
A. I remain bearish. Although I believe the bulk of interest rate increases

is behind us, it looks as if the Fed could continue to raise interest rates
because it is concerned that inflation could increase as a result of
sustained, strong economic growth. I'm going to remain defensive until I
see signs that the economy is slowing, that inflation is going to remain
under control and that the Fed
is done raising interest rates.

INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1994
(MOODY'S RATINGS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Aaa 34.8 34.8

Aa 3.2 3.1

A 11.3 9.6

Baa 19.3 24.6

Ba 9.1 8.3

B 0.7 0.4

Not rated 4.3 9.5

TABLE EXCLUDES SHORT-TERM INVESTMENTS. SECURITIES RATED AS "BA" BY MOODY'S
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING AGENCIES
OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF ACQUISITION BY
FIDELITY.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 10.7 12.0

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 4.0 4.4

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE.
ASSET ALLOCATION
AS OF OCTOBER 31, 1994* AS OF APRIL 30, 1994**
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 1.5
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 28.5
Row: 1, Col: 6, Value: 35.0
Row: 1, Col: 1, Value: 1.8
Row: 1, Col: 2, Value: 8.300000000000001
Row: 1, Col: 3, Value: 2.4
Row: 1, Col: 4, Value: 20.8
Row: 1, Col: 5, Value: 28.8
Row: 1, Col: 6, Value: 37.9
Corporate bonds 35.5%
U.S. government
and agency
obligations 28.5%
Foreign government
obligations 18.2%
Stocks 1.3%
Short term
investments 15.0%
Other 1.5%
Corporate bonds 38.9%
U.S. government
and agency
obligations 28.8%
Foreign government
obligations 20.8%
Stocks 2.4%
Short term
investments 8.3%
Other 0.8%
* FOREIGN
INVESTMENTS 25.7%
** FOREIGN
INVESTMENTS 29.7%
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 35.5%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
AEROSPACE & DEFENSE - 0.1%
Grumman Corp. 10 3/8%, 1/1/99 Baa3 $ 1,100 $ 1,140
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.3%
Grace (W.R.) & Co. 7.40%, 2/1/00 Baa3 2,500 2,394
PAPER & FOREST PRODUCTS - 0.3%
Boise Cascade Corp. 9 7/8%, 2/15/01 Baa3 2,500 2,597
TOTAL BASIC INDUSTRIES 4,991
CONSTRUCTION & REAL ESTATE - 1.2%
BUILDING MATERIALS - 1.2%
Cemex SA and Tolmex (d):
10%, 11/15/96 - 1,750 1,752
8 7/8%, 6/10/98 Ba2 10,000 9,800
11,552
DURABLES - 1.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
Pep Boys-Manny, Moe & Jack
8 7/8%, 4/15/96 Baa2 4,000 4,069
CONSUMER ELECTRONICS - 1.0%
Black & Decker Corp. 7 1/2%, 4/1/03 Ba1 10,000 9,097
TOTAL DURABLES 13,166
ENERGY - 2.2%
ENERGY SERVICES - 1.0%
McDermott International, Inc.:
10 1/4%, 6/1/95 Baa3 7,000 7,141
9 3/8%, 3/15/02 Baa3 2,500 2,559
9,700
NONCONVERTIBLE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - 1.2%
Oryx Energy Co. 10%, 4/1/01 Ba3 $ 1,000 $ 1,005
Societe Nationale Elf Aquitaine
7 3/4%, 5/1/99 Aa3 5,000 4,965
Texas Eastern Transmission Corp.:
10 3/8%, 11/15/00 Baa2 3,000 3,284
10%, 8/15/01 Baa2 2,350 2,530
11,784
TOTAL ENERGY 21,484
FINANCE - 17.3%
BANKS - 11.0%
Bancomer SA (d):
euro 8%, 7/7/98 Ba2 3,500 3,334
9%, 6/1/00 Ba2 7,500 7,125
Bank of Boston Corp. 6 7/8%, 7/15/03 Baa2 5,000 4,473
Bank of New York, Inc. 7 5/8%, 7/15/02 A3 5,000 4,778
Central Fidelity Banks, Inc.
8.15%, 11/15/02 Baa2 4,000 3,928
Chemical Banking Corp. 8 5/8%, 5/1/02 A3 5,000 5,054
Citicorp:
9%, 4/15/99 A3 2,000 2,061
8%, 2/1/03 A3 3,000 2,908
Continential Bank N.A. (Chicago):
12 1/2%, 4/1/01 A2 5,000 6,011
7 7/8%, 2/1/03 A2 3,000 2,885
Crestar Financial Corp. 8 1/4%, 7/15/02 Baa1 7,500 7,425
First Interstate Bancorp:
10 7/8%, 4/15/01 Baa1 3,500 3,937
9 3/8%, 1/23/02 Baa3 1,500 1,570
9 1/8%, 2/1/04 Baa1 7,000 7,271
First Maryland Bancorp 8 3/8%, 5/15/02 Baa1 3,000 2,976
First National Bank of Boston
8 3/8%, 12/15/02 Baa1 5,000 4,962
First USA Bank 5 3/4%, 1/15/99 Baa3 4,000 3,665
NONCONVERTIBLE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
HSBC Finance Nederland B.V. 7.40%,
4/15/03 (d) A3 $ 5,000 $ 4,641
MBNA American Bank, N.A. 7 1/4%, 9/15/02 A3 5,000 4,657
Mercantile Bancorporation, Inc. 7 5/8%,
10/15/02 Baa1 3,000 2,856
Provident Bank 7 1/8%, 3/15/03 Baa2 2,500 2,282
UJB Financial Corp. 8 5/8%, 12/10/02 Baa3 5,500 5,506
Wells Fargo & Co. 8 3/4%, 5/10/02 A3 5,000 5,088
Zions Bancorporation 8 5/8%, 10/15/02 BBB 5,000 4,978
104,371
CREDIT & OTHER FINANCE - 5.1%
Fleet Mortgage Group 6 1/2%, 9/15/99 A3 250 235
Ford Motor Credit Co. 8 3/8%, 1/15/23 A2 5,000 4,726
General Motors Acceptance Corp.:
7.05%, 4/13/95 Baa1 10,000 10,034
7 3/4%, 2/25/97 Baa1 9,000 9,027
6%, 7/13/98 Baa1 5,000 4,696
Household Finance Corp. 7.80%, 11/1/96 A2 4,000 4,036
Secured Finance, Inc. Kroger gtd. secured
9.05%, 12/15/04 Aaa 4,000 4,132
Tenneco Credit Corp.:
10.05%, 8/17/98 Baa2 3,000 3,141
9 5/8%, 8/15/01 Baa2 8,000 8,487
48,514
INSURANCE - 0.2%
Metropolitan Life Insurance Co. 6.30%,
11/1/03 (d) Aa3 500 429
Nationwide Mutual Insurance Co. 6 1/2%,
2/15/04 (d) Aa3 1,500 1,302
1,731
SAVINGS & LOANS - 1.0%
Ahmanson (H.F.) 7 7/8%, 9/1/04 Baa2 2,000 1,912
Great Western Financial Corp. 8.60%, 2/1/02 Baa2 2,000 2,002
Home Savings of America 10 1/2%, 6/12/97 A3 5,000 5,220
9,134
TOTAL FINANCE 163,750
NONCONVERTIBLE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Caterpillar, Inc. 8%, 2/15/23 A3 $ 500 $ 459
MEDIA & LEISURE - 3.4%
BROADCASTING - 0.7%
Telecommunications, Inc.:
7.13%, 2/2/98 Baa3 4,000 3,888
6.58%, 2/15/05 Baa3 2,500 2,305
6,193
LEISURE DURABLES & TOYS - 0.9%
Brunswick Corp. 8 1/8%, 4/1/97 Baa1 3,500 3,494
Mattel, Inc. 6 7/8%, 8/1/97 Baa1 5,000 4,870
8,364
LODGING & GAMING - 0.4%
First Mexican Acceptance Corp. euro:
8 3/4%, 9/15/96 - 2,200 2,189
10 3/4%, 9/15/96 - 1,500 1,487
3,676
PUBLISHING - 1.4%
News America Holdings, Inc. 8 5/8%, 2/1/03 Ba1 5,000 4,910
Time Warner Entertainment Co. LP 9 5/8%,
5/1/02 Baa3 8,000 8,311
13,221
TOTAL MEDIA & LEISURE 31,454
NONDURABLES - 0.5%
FOODS - 0.1%
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 800 784
TOBACCO - 0.4%
RJR Nabisco, Inc. gtd. 8 3/4%, 4/15/04 Baa3 4,200 3,800
TOTAL NONDURABLES 4,584
PRECIOUS METALS - 0.2%
Teck Corp. 8.70%, 5/1/02 Baa2 1,500 1,484
NONCONVERTIBLE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
RETAIL & WHOLESALE - 0.5%
GROCERY STORES - 0.5%
American Stores Co. 9 1/8%, 4/1/02 Baa3 $ 5,000 $ 5,189
SERVICES - 0.4%
GOVERNMENT SERVICES - 0.4%
Financiera Energetica Nacional 6 5/8%,
12/13/96 (d) - 3,500 3,373
TECHNOLOGY - 0.4%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Comdisco, Inc.:
7 3/4%, 1/29/97 Baa2 2,000 1,996
9 1/4%, 7/6/00 Baa2 2,000 2,107
4,103
TRANSPORTATION - 1.2%
AIR TRANSPORTATION - 0.5%
Qantas Airways Ltd. 6 5/8%, 6/30/98 (d) Baa2 3,000 2,843
United Air Lines, Inc. equipment trust ctfs.,
9.76%, 5/13/06 Baa2 2,000 1,895
4,738
TRUCKING & FREIGHT - 0.7%
Airborne Freight Corp. 8 7/8%, 12/15/02 Baa3 5,500 5,521
Federal Express Corp. 9 7/8%, 4/1/02 Baa2 1,000 1,079
6,600
TOTAL TRANSPORTATION 11,338
UTILITIES - 6.1%
ELECTRIC UTILITY - 5.7%
British Columbia Hydro & Power Authority:
15 1/2%, 7/15/11 Aa1 1,000 1,184
15 1/2%, 11/15/11 Aa1 1,000 1,206
Gulf States Utilities Co. 9.72%, 7/1/98 Baa3 10,500 10,881
NONCONVERTIBLE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Hydro-Quebec:
euro gtd. 9 5/8%, 7/15/22 A1 CAD 6,000 $ 4,249
8.40%, 1/15/22 A1 25,000 23,383
Long Island Lighting Co. 7.30%, 7/15/99 Ba1 5,000 4,588
Systems Energy Resources, Inc. 1st mtg.:
14%, 11/15/94 Baa3 7,500 7,514
10 1/2%, 9/1/96 Baa3 1,000 1,032
54,037
GAS - 0.4%
Transco Energy Co.:
9 1/2%, 12/1/95 Ba3 2,000 2,020
9 3/8%, 8/15/01 Ba3 2,000 1,960
3,980
TOTAL UTILITIES 58,017
TOTAL NONCONVERTIBLE BONDS
(Cost $344,648) 336,084
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 26.0%
U.S. GOVERNMENT AGENCY OBLIGATIONS - 0.8%
Financing Corp.
stripped principal payment:
2/8/18, series 5 Aaa 9,200 1,320
2/8/18, series 11 Aaa 900 129
3/7/19 Aaa 46,000 6,040
7,489
U.S. TREASURY OBLIGATIONS - 25.2%
5 1/8%, 3/31/98 Aaa 32,000 29,975
9 1/4%, 8/15/98 Aaa 5,000 5,313
12 3/4%, 11/15/10 Aaa 6,375 8,586
9 7/8%, 11/15/15 Aaa 12,500 14,717
8 7/8%, 2/15/19 (f) Aaa 19,100 20,604
8 1/8%, 8/15/19 Aaa 94,220 94,220
7 7/8%, 2/15/21 Aaa 15,000 14,604
8 1/8%, 5/15/21 Aaa 20,000 20,025
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - CONTINUED
stripped coupon payment:
8/15/06 Aaa $ 9,715 $ 3,804
2/15/08 Aaa 54,000 18,562
stripped principal payment, 5/15/18 Aaa 65,000 9,617
240,027
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $268,986) 247,516
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 2.5%

FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.1%
12 1/2%, 3/1/13 to 7/1/15 Aaa 737 831
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.4%
8%, 4/15/16 to 6/15/23 Aaa 7,527 7,256
9%, 4/15/16 to 11/15/20 Aaa 12,246 12,484
10%, 11/15/09 to 11/15/19 Aaa 3,113 3,345
23,085
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $23,667) 23,916
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
PRIVATE SPONSOR - 0.0%
Maryland National Bank pass thru
Series 1990-1 Class A, 9 1/2%, 10/25/20
(Cost $445) Aaa 431 431
COMMERCIAL MORTGAGE SECURITIES - 1.2%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CS First Boston Mortgage Securities Corp.
commercial Series 1994-CFB1 Class A-2,
7.90%, 1/25/28 Aaa $ 3,886 $ 3,804
FDIC commercial Series 1994-C1 Class II-A1,
6.30%, 9/25/25 Aaa 888 883
Resolution Trust Corp. commercial Series:
1991-M5 Class A, 9%, 3/25/17 Aa2 2,348 2,371
1994-C1 Class A-4, 7 1/4%, 6/25/26 - 2,947 2,922
Structured Asset Securities Corp. commercial
Series 1993-C1 Class A-1, 6.60%,
10/25/24 AA 1,134 1,085
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $11,177) 11,065
FOREIGN GOVERNMENT OBLIGATIONS (H) - 18.2%
Argentina Republic:
6 1/2%, 3/31/05 (d)(e) - 363 262
BOCON 5.0625%, 4/1/01 (e) B1 5,452 3,884
BOTE 1.85%, 5/31/96 (e) - 17,775 6,983
Brady:
euro 4 1/4%, 3/31/23 (e) B1 5,532 2,565
4 1/4%, 3/31/23 (d)(e) - 29,000 13,449
5.8125%, 3/31/23 (d)(e) - 1,509 1,028
Chaco Province 11 7/8%, 9/10/97(c) - 1,000 1,010
Province of Cordoba 10%, 1/28/95 (c) - 872 857
Canadian Government 10 3/4%, 12/15/95 Aaa CAD 22,000 16,903
French Government OAT:
8 1/2%, 11/25/02 Aaa FRF 17,000 3,363
8 1/2%, 10/25/19 Aaa FRF 13,000 2,450
German Government:
8 5/8%, 2/20/96 Aaa DEM 10,100 6,932
8%, 9/22/97 Aaa DEM 30,000 20,587
Kingdom of Thailand 8 1/4%, 3/15/02 A2 10,000 9,824
Manitoba Province yankee:
6 7/8%, 9/15/02 A1 3,000 2,766
8.80%, 1/15/20 A1 15,000 14,910
Mexico Value Recovery (rights) (g) - 64,691 1
Mexican Government:
Brady:
6 1/4%, 12/31/19 Ba3 19,500 12,285
6 1/4%, 12/31/19 Ba3 7,500 4,725
FOREIGN GOVERNMENT OBLIGATIONS (H) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
Mexican Government - continued
Brady Discount:
0%, 12/31/19 (e) Ba3 $ 1,500 $ 1,275
6.6875%, 12/31/19 (e) Ba3 4,500 3,825
6.7656%, 12/31/19 (e) Ba3 18,500 15,725
Cetes, 11/9/95 - MXN 20,000 5,069
Ontario Province:
7 3/8%, 1/27/03 Aa3 8,000 7,564
6 5/8%, 6/22/04 Aa3 3,000 2,854
15 1/8%, 5/1/11 Aa3 7,000 8,142
Republic of Uruguay 8 1/4%, 6/8/95 (d) Ba1 4,000 4,010
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $181,192) 173,248
COLLATERALIZED NOTES - 0.3%
Ridgefield Investments Ltd. sr. notes 0%, 2/2/95
(collateralized by Mexican govt. securities) (d)
(Cost $3,135) 3,185 2,997
NONCONVERTIBLE PREFERRED STOCKS - 1.3%
SHARES
FINANCE - 0.2%
BANKS - 0.2%
BankAmerica Corp. Series 1, adj. rate 49,200 2,374
UTILITIES - 1.1%
ELECTRIC UTILITY - 1.1%
Cleveland Electric Illuminating Co., Series L adj. rate 7,613 518
Gulf States Utilities Co. $1.75 120,000 2,730
Long Island Lighting Co. $7.95 182,000 4,254
Niagara Mohawk Power Corp., Series A adj. rate 71,005 1,385
Public Service Co. of New Hampshire Co., Series A 80,000 2,010
10,897
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $13,604) 13,271
REPURCHASE AGREEMENTS - 15.0%
MATURITY VALUE (NOTE 1)
AMOUNT (000S)
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 142,804 $ 142,785
PURCHASED OPTIONS - 0.0%
DOLLAR AMOUNTS EXPIRATION DATE/ UNDERLYING FACE
IN THOUSANDS STRIKE PRICE AMOUNT AT VALUE
140 Call Options on March U.S. Treasury
Bond Futures (Cost $367) Feb. 95/96 $ 13,681 203
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $990,006) $ 951,516

FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
1,224 U.S. Treasury Bond Contracts Dec. 94 $ 120,373 $ 4,653
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 12.7%

FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE VALUE GAIN/(LOSS)
CONTRACTS TO SELL
10,384 CAD 1/17/95 $ 7,675 $ 51
173,630 FRF 1/20/95 33,738 (33)
TOTAL CONTRACTS TO SELL
(Receivable amount $41,431) $ 41,413 $ 18
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 4.4%

CURRENCY ABBREVIATIONS
CAD - Canadian dollar
FRF - French franc
DEM - German deutsche mark
MXN - Mexican peso
LEGEND
(h) Principal amount is stated in United States dollars unless otherwise
noted.
(i) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(j) 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 7/8%, 9/10/97 3/9/94 $ 1,027
Province of 1/27/94
Cordoba to
10%, 1/28/95 5/31/94 $ 872

(k) 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 $56,345,000 or 5.9% of net
assets.
(l) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(m) A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $5,394,000.
(n) Non-income producing
(o) Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
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 49.3% AAA, AA, A 46.8%
Baa 19.3% BBB 23.7%
Ba 9.1% BB 3.1%
B 0.7% 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 3.4%.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 74.3%
Canada 8.9
Mexico 7.5
Argentina 3.2
Germany 2.9
France 1.1
Thailand 1.0
Others (individually less than 1%) 1.1
TOTAL 100.0%
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $990,111,000. Net unrealized depreciation aggregated
$38,595,000, of which $8,575,000 related to appreciated investment
securities and $47,170,000 related to depreciated investment securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
(EXCEPT PER-SHARE AMOUNTS) OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 951,516
agreements of $142,785) (cost $990,006) - See
accompanying schedule

Cash 1

Receivable for investments sold 4,392

Unrealized appreciation on foreign currency contracts 51

Dividends receivable 20

Interest receivable 16,404

TOTAL ASSETS 972,384

LIABILITIES

Payable for investments purchased $ 7,665

Unrealized depreciation on foreign currency contracts 33

Payable for fund shares redeemed 1,046

Dividends payable 1,047

Accrued management fee 370

Other payables and accrued expenses 364

TOTAL LIABILITIES 10,525

NET ASSETS $ 961,859

Net Assets consist of:

Paid in capital $ 1,003,326

Distributions in excess of net investment income (1,495)

Accumulated undistributed net realized gain (loss) on (6,220)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (33,752)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 138,330 shares outstanding $ 961,859

NET ASSET VALUE, offering price and redemption price per $6.95
share ($961,859 (divided by) 138,330 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 647
Dividends

Interest (including security lending fees of $5) 37,168

TOTAL INCOME 37,815

EXPENSES

Management fee $ 2,202

Transfer agent fees 1,107

Accounting and security lending fees 146

Non-interested trustees' compensation 3

Custodian fees and expenses 154

Registration fees 40

Audit 27

Legal 2

Miscellaneous 8

TOTAL EXPENSES 3,689

NET INVESTMENT INCOME 34,126

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (302)

Foreign currency transactions (4,885)

Futures contracts 11,722 6,535

Change in net unrealized appreciation (depreciation) on:

Investment securities (33,951)

Futures contracts (5,938)

Assets and liabilities in foreign currencies 1,205 (38,684)

NET GAIN (LOSS) (32,149)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 1,977
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED OCTOBER APRIL 30,
31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 34,126 $ 71,207
Net investment income

Net realized gain (loss) 6,535 16,893

Change in net unrealized appreciation (depreciation) (38,684) (51,151)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,977 36,949
FROM OPERATIONS

Distributions to shareholders: (33,744) (69,241)
From net investment income

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

From net realized gain (15,380) -

TOTAL DISTRIBUTIONS (49,124) (71,026)

Share transactions 351,325 799,522
Net proceeds from sales of shares

Reinvestment of distributions 41,125 57,516

Cost of shares redeemed (326,186) (898,298)

Net increase (decrease) in net assets resulting from 66,264 (41,260)
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 19,117 (75,337)

NET ASSETS

Beginning of period 942,742 1,018,079

End of period (including distributions in excess of net $ 961,859 $ 942,742
investment income of $1,495 and $1,877,
respectively)

OTHER INFORMATION
Shares

Sold 49,423 102,866

Issued in reinvestment of distributions 5,772 7,428

Redeemed (45,947) (115,700)

Net increase (decrease) 9,248 (5,406)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED APRIL 30,
ENDED
OCTOBER 31,
1994

(UNAUDITED) 1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning $ $ $ $ $ $ $ $ $ $ $ $
of period 7.300 7.570 7.070 6.830 6.560 6.670

Income from Investment .253 .522 .570 .591 .592 .597
Operations
Net investment income

Net realized and (.234) (.254) .499 .244 .277 (.110)
unrealized gain (loss)

Total from investment .019 .268 1.069 .835 .869 .487
operations

Less Distributions (.249) (.525) (.569) (.595) (.599) (.597)
From net investment
income

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

From net realized gain (.120) - - - - -
on investments

Total distributions (.369) (.538) (.569) (.595) (.599) (.597)

Net asset value, end of $ 6.950 $ 7.300 $ 7.570 $ 7.070 $ 6.830 $ 6.560
period

TOTAL RETURN B 0.25% 3.35 15.63 12.63 13.82 7.31
% % % % %

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ $ $ $ $ $ $ $ $ $ $ $
(in millions) 962 943 1,018 943 455 359

Ratio of expenses to .76% .74 .68 .70 .67 .70
average net assets A % % % % %

Ratio of net investment 7.04% 6.94 7.74 8.29 8.84 8.76
income to average net A % % % % %
assets

Portfolio turnover rate 25% 61 74 77 101 103
A % % % % %

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994 (Unaudited)

6. 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 of their purchase date 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 prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective May 1, 1994, the fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment in securities.
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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
the fund is informed of the ex-dividend date. Interest income, which
includes accretion of original issue discount, is accrued as earned.
Investment income is recorded net of foreign taxes withheld where recovery
of such taxes is uncertain.
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. Dividends are declared daily and paid
monthly from net investment income. Distributions to shareholders from
realized capital gains on investments, 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, 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 and may
affect net investment income per share disclosed. Distributions in excess
of 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.
7. 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, as reflected in the schedule of
investments under the caption "Forward Foreign Currency Contracts,"
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 any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss)
is recognized on settlement date.
2. OPERATING POLICIES -
CONTINUED
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 affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
FUTURES CONTRACTS AND OPTIONS.
The fund may invest in futures and options contracts, and may also 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, as reflected in the
schedule of investments under the captions ``Purchased Options'' and
"Futures Contracts," 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.
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 $1,867,000 or 0.2% of net assets.
8. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $118,064,000 and $99,186,000, respectively, of which U.S.
government and government agency obligations aggregated $101,130,000 and
$75,861,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $285,601,000 and $331,050,000, respectively.
9. 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 and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1325% to .3700% for the period May 1 ,1994 to July 31,
1994 and .1200% to .3700% for the period August 1, 1994 to October 31,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .30%. For the period, the management
fee was equivalent to an annualized rate of .45% of average net assets.
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 $46,000 for the
period.
TRANSFER AGENT FEES. 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 AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
10. 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.
TO CALL FIDELITY

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* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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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
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A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
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
Leonard M. Rush, 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
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(2_FIDELITY_LOGOS)FIDELITY

SHORT-TERM BOND
PORTFOLIO
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 past six
months.

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

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

NOTES 29 Notes to the financial statements.

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 OCTOBER 31, 1994 PAST 6 PAST PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

Short-Term Bond 0.90% (1.06)% 40.15% 71.13%

Lehman Brothers 1-3 Year
Government-Corporate Bond Index 1.66% 1.22% 43.81% n/a

Average Short Investment Grade
Bond Fund 1.13% 0.10% 38.27% n/a

Consumer Price Index 1.42% 2.61% 19.03% 36.28%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund 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 122 funds currently
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 (CPI) 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 OCTOBER 31, 1994 PAST PAST 5 LIFE OF
YEAR YEARS FUND

Short-Term Bond (1.06)% 6.98% 6.83%

Lehman Brothers 1-3 Year
Government-Corporate Bond Index 1.22% 7.54% n/a

Average Short Investment Grade
Bond Fund 0.10% 6.69% n/a

Consumer Price Index 2.61% 3.55% 3.86%

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
Short Term Bond (450) 1-3 Year Governmen
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
05/31/94 17058.03 17533.87
06/30/94 16900.90 17579.46
07/31/94 17028.10 17739.43
08/31/94 17097.96 17799.75
09/30/94 17125.73 17983.08
10/31/94 17117.15 18024.44

$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 October 31, 1994, the value of your investment would
have grown to $17,117 - a 71.17% 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 $18,024 - a 80.24% 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> <C>
SIX MONTHS
ENDED
OCTOBER 31, YEARS ENDED APRIL 30,

1994 1994 1993 1992 1991 1990

Dividend return 3.10% 6.51% 8.00% 9.28% 9.38% 8.69%

Capital appreciation -2.20% -4.52% 0.85% 2.72% 0.11% -0.11%
return

Total return 0.90% 1.99% 8.85% 12.00% 9.49% 8.58%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 6 PAST
MONTH MONTHS 1 YEAR

Dividends per share 4.55(cents) 28.08(cents) 58.09(cents)

Annualized dividend rate 6.01% 6.21% 6.32%

30-day annualized yield 6.41% - -

</TABLE>

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 $8.92 over
the past month, $8.98 over the past six months and $9.20 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 Donald Taylor, Portfolio Manager of Fidelity Short-Term
Bond Portfolio
Q. DON, HOW HAS THE FUND PERFORMED?
A. The fund had a total return of 0.90% for the six months ended October
31, 1994. That was slightly below the total return of 1.13% for the average
short investment grade bond fund tracked by Lipper Analytical Services for
the same period. For the year ended October 31, the fund's total return was
- -1.06%, compared to 0.10% for the Lipper average over the same period.
Q. CAN YOU GIVE US A RECAP OF WHAT THE MARKET ENVIRONMENT HAS BEEN LIKE?
A. Sure. U.S. bond markets took a downward turn during the first nine
months of 1994, after more than a decade of generally favorable conditions
for bond investing. Rising interest rates and inflation concerns caused
yields to rise and prices to fall on virtually all types of fixed-income
investments. From February through September 1994, the Federal Reserve
Board raised the federal funds rate - the rate banks charge each other for
overnight loans - from 3.00% to 4.75%. The Fed was hoping to head off
future inflation that might be triggered by the improving U.S. economy. The
very threat of inflation led investors to sell bonds, because inflation
diminishes the value of fixed-rate income payments. Higher interest rates
in many foreign bond markets followed the rate hikes in the United States.
Although they were especially hard hit during the first half of 1994,
emerging market bonds rebounded somewhat in August.
Q. WHY DID THE FUND UNDERPERFORM
ITS PEERS?
A. The fund's performance was hurt by its exposure to foreign markets. I
divide my foreign investments into two categories: developed markets and
emerging markets. I felt developed economies - especially those in Europe -
were further behind in their economic cycles than the U.S., but growth in
Europe picked up more quickly than I thought. The result of converging
economic cycles led to a decline in bond markets, because growth increased
inflation fears. As far as the emerging markets are concerned, growth in
the U.S. has been beneficial for many of these countries, although
investments in these countries involve greater political and economic risk.
However, temporary positive economic indicators in many emerging market
countries were overwhelmed by other factors. Bond markets in countries like
Argentina were hurt by the influence of the fall in the U.S. market, and
were also penalized for past economic policies.
Q. SO WHAT HAVE YOU DONE IN RESPONSE?
A. I've reduced the fund's exposure to foreign markets. In addition, I've
shortened the fund's average duration - a measure of its sensitivity to
changes in comparable interest rates, measured in years. For example, if
the fund had a duration of two years and comparable interest rates went up
1%, its share price likely would fall roughly 2%. Conversely, if comparable
interest rates fell 1%, its share price probably would rise about 2%. By
shortening the duration, I've made the fund more defensive in an uncertain
interest rate environment. At the same time, it should be remembered that
other factors such as credit and currency risk may influence the
performance of the fund.
Q. WHAT OTHER CHANGES WILL SHAREHOLDERS SEE IN THE PORTFOLIO?
A. I've increased the fund's weighting in Treasury bonds, for two reasons.
First, yield spreads - the difference in yield between Treasury bonds and
corporatebonds with the same maturity but different credit quality - have
narrowed, making the corporate issues less attractive. Second, the
Treasuries are easy to sell, so when new opportunities arise, I can trade
in the Treasuries and use the cash to buy new securities. I've increased
the fund's investments in short-term cash instruments for the same reason.
Q. HAVE THERE BEEN ANY OTHER SPECIFIC INVESTMENT OPPORTUNITIES?
A. I've increased the fund's investments in commercial mortgage-backed
securities. These are pools of mortgages for commercial properties such as
apartment buildings, office buildings and retail space. Most are floating
rate, meaning their coupon rates - the annual interest paid to the investor
- - will float upward if interest rates continue to rise. Real estate is a
relatively new, under-followed area of the public debt market, so, in
relative terms, it can be a better value. Fidelity is adding staff to
follow this new investment area.
Q. DERIVATIVES HAVE BEEN IN THE NEWS A LOT LATELY. DOES THE FUND USE THEM?
A. During the period, the fund had a small position in indexed securities,
which I used to gain exposure to interest rates in foreign bond markets.
These markets can be attractive, but because their currencies could
fluctuate relative to the dollar, I wanted to be in on a hedged basis. As I
described earlier, these markets did not perform as I expected and the
derivatives position reflected this. As I have reduced the exposure to
foreign markets, I've reduced the fund's position in indexed securities.
For some non-dollar bonds, I also use currency forward contracts to help me
reduce the fund's exposure to currency risk - the risk that movements in a
country's currency will negatively affect the fund's investments there.
They do that by tying the value of the fund's overseas investments to the
U.S. dollar.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I'll stay defensive until I see signs that the Federal Reserve Board has
finished, or is close to finishing, raising interest rates. I believe that
another increase is a good possibility because the economy is still strong
and the Fed wants to control inflation. When the market does turn around,
I'll be able to invest in new opportunities with the cash and easy-to-sell
Treasury bonds I have in the portfolio.

INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1994
(MOODY'S RATINGS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Aaa 12.7 8.6

Aa 0.4 5.5

A 15.4 13.2

Baa 22.7 33.1

Ba 5.4 6.4

Not rated 13.2 12.6

TABLE EXCLUDES SHORT-TERM INVESTMENTS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT OCTOBER 31, 1994 ACCOUNT FOR 1.6% OF THE
FUND'S INVESTMENTS.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 2.1 2.9

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 1.2 1.9

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE.
ASSET ALLOCATION
AS OF OCTOBER 31, 1994* AS OF APRIL 30, 1994**
Row: 1, Col: 1, Value: 8.6
Row: 1, Col: 2, Value: 22.1
Row: 1, Col: 3, Value: 10.4
Row: 1, Col: 4, Value: 14.1
Row: 1, Col: 5, Value: 44.8
Row: 1, Col: 1, Value: 13.2
Row: 1, Col: 2, Value: 8.800000000000001
Row: 1, Col: 3, Value: 11.3
Row: 1, Col: 4, Value: 3.3
Row: 1, Col: 5, Value: 56.9
Corporate bonds 44.8%
U.S. government and
agency obligations 14.1%
Foreign government
obligations 10.4%
Short-term
investments 22.1%
Other investments 8.6%

TOTAL FOREIGN
INVESTMENTS 18.1%
Corporate bonds 56.9%
U.S. government and
agency obligations 3.3%
Foreign government
obligations 19.7%
Short-term
investments 8.8%
Other investments 11.3%

TOTAL FOREIGN
INVESTMENTS 40.0%
*
**

INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 44.8%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
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 $ 2,281
NONCONVERTIBLE BONDS - 44.7%
AEROSPACE & DEFENSE - 1.0%
Grumman Corp. 10 3/8%, 1/1/99 Baa3 5,100 5,285
Lockheed Corp. 4 7/8%, 2/15/96 Baa1 12,415 12,110
17,395
BASIC INDUSTRIES - 1.0%
CHEMICALS & PLASTICS - 0.4%
Desc (Soc De Fomento Indust.) euro 11%,
12/15/97 - 6,830 6,975
IRON & STEEL - 0.3%
Grupo Simec 8 7/8%, 12/15/98 (d) - 5,000 4,550
PAPER & FOREST PRODUCTS - 0.3%
Chesapeake Corp. 11 3/4%, 8/1/95 Baa3 4,600 4,761
TOTAL BASIC INDUSTRIES 16,286
CONSTRUCTION & REAL ESTATE - 0.4%
CONSTRUCTION - 0.4%
Empresas ICA Sociedad Controladora
SA de CV euro:
9 3/4%, 2/11/98 (d) Ba3 3,400 3,383
9 3/4%, 2/11/98 - 3,505 3,487
6,870
DURABLES - 0.5%
AUTOS, TIRES, & ACCESSORIES - 0.5%
Chrysler Corp. 13%, 3/1/97 A3 1,015 1,036
Grupo Dina (Consorcio) euro 10 1/2%,
11/18/97 - 6,000 5,895
Grupo Imsa SA de CV euro 8 3/4%, 7/7/98 (d) - 750 717
7,648
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - 1.0%
ENERGY SERVICES - 1.0%
McDermott International, Inc.
10 1/4%, 6/1/95 Baa3 $ 16,850 $ 17,190
FINANCE - 26.2%
ASSET-BACKED SECURITIES - 2.3%
Caterpillar Financial Asset Trust 6.65%,
6/25/00 A2 4,710 4,640
Concord Leasing, Inc. (d):
6.66%, 1/15/98 AAA 1,592 1,576
5.04%, 7/15/98 AAA 3,280 3,186
5.31%, 1/20/99 AAA 2,706 2,652
Discover Card Master Trust I 6.9%, 2/16/00 A2 4,000 3,930
Discover Card Trust 6 1/8%, 5/15/98 A2 2,000 1,961
Midlantic Grantor Trust, Series 1992-1,
Class B, 5.15%, 9/15/97 A1 2,174 2,160
SCFC Recreational Vehicle Loan Trust
7 1/4%, 9/15/06 Aaa 825 821
Standard Credit Card Master Trust,
5 7/8%, 7/7/96 Aaa 13,000 12,951
United Federal Savings Bank Grantor Trust:
1994-B (B) 6.975%, 7/10/00 Baa2 2,106 2,061
7.275%, 11/10/00 Baa2 2,204 2,167
38,105
BANKS - 13.8%
Bancomer SA:
euro 8%, 7/7/98 Ba2 6,500 6,191
9% 6/1/00 (d) Ba2 5,750 5,463
Bank of Boston Corp.:
9 1/2%, 8/15/97 Baa2 2,315 2,426
5.05%, 8/26/98 Baa2 16,350 16,135
10.30%, 9/1/00 Baa2 1,250 1,285
Baybanks, Inc. 3.39%, 9/30/97 (e) Baa2 8,500 8,426
Chase Manhattan Corp. euro 5.0625%, 5/31/00 Baa1 4,700 4,618
Chemical Bank Corp. euro 0%, 2/16/97 Baa1 1,000 840
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Citicorp:
euro:
5 1/4%, 7/10/97 (e) A3 $ 1,000 $ 993
5%, 1/30/98 (e) A3 3,500 3,474
5.10%, 10/25/05 A2 3,450 3,329
5.70%, 2/12/96 A2 9,000 8,883
Citicorp Person to Person, Inc. 5.8125%,
1/30/97 (e) A3 8,230 8,189
Continental Bank Corp.:
9 3/4%, 3/15/95 A2 10,525 10,647
9 7/8%, 6/15/96 A2 4,600 4,792
4 1/2%, 5/18/00 (e) A2 2,000 1,990
Corestates Capital Corp. 6.24%, 2/13/95 A1 1,400 1,402
Corporacion Andina De Fomento yankee bonds
7 1/4%, 4/30/98 (d) Baa3 1,800 1,692
First Bank Systems, Inc.:
euro 5 1/2%, 11/29/96 (e) A3 8,850 8,844
9.89%, 3/6/96 A3 650 673
First Fidelity Bancorporation 9 3/4%, 5/25/95 A3 6,075 6,183
First Interstate Bancorp:
8 8/7%, 3/1/95 A3 4,700 4,741
10 1/2%, 3/1/96 A3 3,815 3,981
Fleet Financial Group, Inc. 5 5/8%, 7/1/95 A2 9,250 9,204
Fleet/Norstar Financial Group, Inc.:
11 3/4%, 11/15/94 A2 1,370 1,372
7.65%, 3/1/97 A2 5,000 5,020
Keycorp.:
8.55%, 5/30/95 A2 1,300 1,316
8.96%, 5/30/96 A2 2,000 2,054
Manufacturers Hanover Trust euro
5.8125%, 7/15/97 (e) A3 15,500 15,461
Marine Midland Bank:
euro:
5 1/4%, 9/27/96 (e) Baa1 17,750 17,683
5%, 3/29/99 (e) Baa1 5,000 4,965
8 5/8%, 3/1/97 Baa1 19,567 19,935
Mellon Financial Co.:
9.34%, 12/15/94 A3 1,900 1,900
6 1/8%, 11/15/95 A2 3,750 3,732
6 1/2%, 12/1/97 A2 1,000 971
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Meridian Bancorp, Inc.
5 1/4%,12/1/96 (e) Baa1 $ 7,450 $ 7,471
Midland International Financial Services BV
euro 5%, 3/6/99 - 4,000 3,930
Moore Financial Group, Inc. 5 1/4%,
11/18/97 (e) Baa1 6,300 6,275
National City Corp. 5 1/4%, 1/31/97 (e) A2 4,100 4,079
Security Pacific Corp. 10.05%, 5/1/95 A2 3,500 3,567
Shawmut Corp. 8 7/8%, 4/1/96 Baa1 4,325 4,406
TrustCorp, Inc. 11 1/8%, 9/1/95 A1 710 736
United Virginia Bankshares, Inc.
8 5/8%, 4/15/98 Baa1 660 673
Wells Fargo and Company euro
5 1/4%, 4/28/00 (e) A3 2,000 1,968
231,915
CREDIT & OTHER FINANCE - 8.5%
Aristar, Inc.:
8.55%, 6/1/95 Baa1 2,590 2,620
7 3/8%, 2/15/97 Baa1 2,000 1,992
Beneficial Corp. 9 3/8%, 6/2/95 A2 4,400 4,474
Caterpillar Financial Services Corp.
7.14%, 4/10/95 A3 2,950 2,963
Chrysler Financial Corp.:
6%, 4/15/96 A3 15,000 14,808
6 1/2%, 5/27/97 Baa3 3,000 2,926
Ford Motor Credit Co.:
euro 9 5/8%, 2/27/96 A2 3,100 3,177
9 1/4%, 11/15/94 A2 1,950 1,952
5.70%, 12/12/94 A2 1,000 1,005
9%, 6/28/96 A2 950 978
General Motors Acceptance Corp.:
8.60%, 12/8/94 Baa1 2,725 2,732
8.95%, 12/19/94 Baa1 2,000 2,008
6 1/2%, 1/17/95 Baa1 1,300 1,301
5.55%, 2/16/95 Baa1 16,900 16,873
7.40%, 4/3/95 Baa1 6,800 6,831
8.60%, 4/5/95 Baa1 1,700 1,716
9.40%, 5/18/95 Baa1 3,350 3,403
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Greyhound Financial Corp.:
6.94%, 1/28/98 Baa2 $ 4,000 $ 3,891
6.95%, 1/28/98 Baa2 2,000 1,946
Household Finance Corp.:
6 7/8%, 11/15/94 A2 9,350 9,353
9 1/4%, 2/15/95 A2 16,000 16,146
McDonnell Douglas Finance Corp. 8.93%,
12/6/94 Ba2 5,100 5,145
Tenneco Credit Corp. 9%, 7/15/95 Baa2 900 914
Third Mexican Acceptance Corp. coll. notes
gtd. by:
Grupo Sidek SA and Grupo Situr SA
10 1/2%, 3/15/98 (d) - 5,500 5,177
NAFIN 7.37%, 3/15/98 (d) - 3,000 2,790
U.S. West Financial Services, Inc.
4.89%, 12/11/97 (e) A2 7,400 7,174
Westinghouse Credit Corp.:
8.65%, 11/10/94 Ba1 1,000 1,000
8.63%, 12/20/94 Ba1 1,000 1,003
8.79%, 5/22/96 Ba1 12,000 12,180
8.84%, 10/21/96 Ba1 600 608
9.06%, 6/3/98 Ba1 1,000 1,013
8.93%, 6/22/99 Ba1 2,000 2,018
142,117
INSURANCE - 0.3%
ITT Hartford Group, Inc. 7 1/4%, 12/1/96 A1 5,700 5,667
SAVINGS & LOANS - 1.3%
Ahmanson (H.F.) & Co. 9 7/8%, 11/15/99 Baa2 650 689
Golden West Financial Corp. 10 1/4%,
5/15/97 A3 5,350 5,658
Great Western Financial Corp. 6 .375%, 7/1/00 Baa2 3,925 3,587
Home Savings of America 10 1/2%, 6/12/97 A3 6,850 7,151
World Savings & Loan 5 1/4%, 2/15/96 A1 5,000 4,922
22,007
TOTAL FINANCE 439,811
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
HEALTH - 0.3%
MEDICAL EQUIPMENT & SUPPLIES - 0.3%
Cardinal Distribution Inc. 8%, 3/01/97 Baa1 $ 5,000 $ 5,025
INDUSTRIAL MACHINERY & EQUIPMENT - 0.5%
ELECTRICAL EQUIPMENT - 0.1%
Westinghouse Electric Corp. 7 3/4%, 4/15/96 Ba1 2,000 2,005
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
Tenneco Corp. gtd.:
euro 10 3/4%, 6/15/95 Baa2 3,510 3,595
11%, 11/15/95 Baa2 3,400 3,532
7,127
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 9,132
MEDIA & LEISURE - 3.5%
BROADCASTING - 1.9%
Telecommunications, Inc. 7.13%, 2/02/98 Baa3 6,000 5,833
Time Warner, Inc.:
9 1/2%, 11/1/94 Ba1 1,150 1,150
6.05%, 7/1/95 (d) Ba1 26,000 25,843
32,826
LEISURE DURABLES & TOYS - 1.6%
Brunswick Corp. 8 1/8%, 4/1/97 Baa1 11,525 11,505
Mattel, Inc. 6 7/8%, 8/1/97 Baa1 15,150 14,756
26,261
TOTAL MEDIA & LEISURE 59,087
NONDURABLES - 2.4%
FOODS - 0.1%
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 2,390 2,342
TOBACCO - 2.3%
Empresas La Moderna SA
10 1/4%, 11/12/97 (d) - 2,000 2,010
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
NONDURABLES - CONTINUED
TOBACCO - CONTINUED
Philip Morris Companies, Inc.:
9.40%, 10/1/95 A2 $ 7,150 $ 7,311
8 7/8%, 7/1/96 A2 1,990 2,041
RJR Nabisco, Inc. 9 1/4%, 5/1/95 Baa3 26,000 26,273
37,635
TOTAL NONDURABLES 39,977
RETAIL & WHOLESALE - 1.3%
GENERAL MERCHANDISE STORES - 0.1%
K mart Corp. 12 1/8%, 3/1/95 A3 800 814
Sears Canada, Inc. 11%, 5/18/99 - CAD 1,180 915
1,729
GROCERY STORES - 1.2%
American Stores Co.:
8.21%, 4/16/97 Baa3 1,000 1,011
8 1/4%, 4/21/98 Baa3 4,700 4,738
8.44%, 4/24/98 Baa3 4,700 4,765
Supervalu, Inc. 5 7/8%, 11/15/95 A3 8,900 8,838
19,352
TOTAL RETAIL & WHOLESALE 21,081
SERVICES - 0.4%
ADVERTISING - 0.1%
Valassis Inserts 9 3/8%, 3/15/99 Ba2 1,600 1,611
LEASING & RENTAL - 0.3%
Hertz Corp. 8%, 4/1/95 A3 3,910 3,935
Ryder System, Inc. 9 3/8%, 1/15/98 A3 1,000 1,006
4,941
TOTAL SERVICES 6,552
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.8%
COMPUTERS & OFFICE EQUIPMENT - 0.6%
Comdisco, Inc.:
8.95%, 5/15/95 Baa2 $ 2,500 $ 2,531
9 3/4%, 1/15/97 Baa2 3,900 4,065
7 3/4%, 1/29/97 Baa2 4,000 3,993
10,589
ELECTRONICS - 0.2%
Grupo Condumex SA de CV (d):
6 1/4%, 7/27/96 - 760 730
7 3/8%, 7/27/98 - 2,600 2,434
3,164
TOTAL TECHNOLOGY 13,753
TRANSPORTATION - 1.4%
AIR TRANSPORTATION - 0.8%
AMR Corp.:
9.76%, 1/11/96 Baa3 900 919
7 3/4%, 12/1/97 Baa3 6,100 5,975
9 1/2%, 7/15/98 Baa3 1,280 1,309
American Airlines, Inc. secured equipment
certificates 14 3/8%, 1/6/05 Baa1 5,650 6,044
14,247
TRUCKING & FREIGHT - 0.6%
Consolidated Freightways, Inc.:
8.83%, 12/15/94 Baa3 3,700 3,700
9 1/8%, 8/15/99 Baa3 1,255 1,269
Federal Express Corp. 9 3/4%, 5/15/96 Baa2 4,600 4,765
9,734
TOTAL TRANSPORTATION 23,981
UTILITIES - 4.0%
ELECTRIC UTILITY - 2.7%
Gulf States Utilities Co. 9.72%, 7/1/98 Baa3 7,500 7,772
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Long Island Lighting Co.:
11 3/4%, 11/15/94 Ba1 $ 10,300 $ 10,313
8 3/4%, 5/1/96 Baa3 5,300 5,398
7.30%, 7/15/99 Ba1 5,000 4,588
Philadelphia Electric Co. 1st & ref. mtg. 8 3/4%,
1/1/94 BBB+ 2,715 2,715
Public Service Co. of New Hampshire 1st mtg.
8 7/8%, 5/15/96 Baa3 6,550 6,673
Systems Energy Resources, Inc. 1st mtg. 14%,
11/15/94 Baa3 3,800 3,807
United Illuminating Co. 7 3/8%, 1/15/98 Baa3 6,550 6,365
47,631
GAS - 1.3%
Florida Gas 7 3/4%, 11/1/97 Baa2 3,570 3,570
Houston Natural Gas Corp. 12 1/8%, 4/15/95 Baa2 2,400 2,456
Panhandle Eastern Pipe Line Co. 9 7/8%,
10/15/96 Baa2 10,706 10,987
Southwest Gas Co. 9 3/4%, 6/15/02 Ba1 4,650 4,857
21,870
TOTAL UTILITIES 69,501
TOTAL NONCONVERTIBLE BONDS 753,289
TOTAL CORPORATE BONDS
(Cost $775,982) 755,570
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 12.7%
U.S. TREASURY OBLIGATIONS - 5.9%
5 1/8%, 3/31/98 Aaa 25,000 23,418
9 1/4%, 8/15/98 Aaa 54,130 57,513
6 1/4%, 2/15/03 Aaa 19,890 18,091
TOTAL U.S. TREASURY OBLIGATIONS 99,022
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.8%
State of Israel (guaranteed by U.S. Government
through Agency for International Development)
4 7/8%, 9/15/98 Aaa $ 2,400 $ 2,179
Federal National Mortgage Association
0%, 4/6/95 - 115,950 113,159
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 115,338
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $216,319) 214,360
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 0.5%
Federal Home Loan Mortgage Corporation
9 1/2%, 1/15/06 Aaa 3,562 3,690
Federal National Mortgage Association 12%,
3/1/17 Aaa 641 717
Government National Mortgage Association:
7 1/2%, 8/15/22 to 12/15/23 Aaa 4334 4,024
8%, 3/15/17 Aaa 122 118
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $9,086) 8,549
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.9%
U.S. GOVERNMENT AGENCY - 0.9%
Federal Home Loan Mortgage Corp.
Z Bond Series 1 Class 1-Z,
9.30%, 4/15/19 Aaa 14,791 14,928
PRIVATE SPONSOR - 0.0%
Maryland National Bank pass thru Series
1990-1 Class A, 9 1/2%, 10/25/50 Aaa 377 377
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $16,311) 15,305
COMMERCIAL MORTGAGE SECURITIES - 3.4%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CS First Boston Mortgage Securities Corp.
commercial floater Series 1994-CFB1
Class A-1, 5 1/2%, 1/25/28 (e) Aaa $ 5,409 $ 5,396
FDIC commercial Series 1994-C1:
Class II-A1, 6.30%, 9/25/25 Aaa 710 706
Class II-A2. 7.85%, 9/25/25 Aaa 4,600 4,531
Lennar Central Partner LP commercial floater
Series 1994-1 Class B, 5.8125%,
9/15/01 (d)(e) - 9,235 9,226
Nomura Asset Securities Corp. commercial floater
Series 1994-MD-II Class A-6, 5.765%,
7/4/03 (e) - 3,598 3,602
Resolution Trust Corp. commercial floater (e):
Series 1992-C3 Class A-2, 5.225%, 8/25/23 Aa2 2,761 2,763
Series 1993-C2 Class A-2, 5.6825% 3/25/25 AAA 4,542 4,569
Series 1994-C1 Class A-3, 5.6125%, 6/25/26 AAA 7,088 7,059
Series 1994-C1 Class A-4 7 1/4%, 6/25/26 AAA 5,702 5,654
S C Finance Corp. commercial floater
6.05%, 8/1/04 (d) (e) - 9,400 9,341
Structured Asset Securities Corp. commercial
Series 1993-C1 Class A-1, 6.60%, 10/25/24 AAA 4,002 3,831
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $56,959) 56,678
FOREIGN GOVERNMENT OBLIGATIONS - 10.4%
Argentina Republic BOCON:
3 1/4%, 4/1/01 - ARP 35,973 18,886
3 1/4%, 9/1/02 - ARP 65,312 27,563
French Government OAT:
8 1/2%, 4/25/03 Aaa FRF 72,814 14,370
6 3/4%, 10/25/03 Aaa FRF 25,000 4,401
Italian Government 8 1/2%, 4/1/99 (c) - ITL 16,945 9,880
Mexican Government:
Ajustabonos 5.10%, 7/11/96 (b) A- MXN 12,052 4,764
Cetes:
0%, 10/11/95 A- MXN 83,470 21,365
0%, 12/7/95 A- MXN 59,133 14,846
0%, 1/11/96 A- MXN 14,605 3,624
0%, 2/29/96 A- MXN 52,200 12,746
Government of New Zealand 8%, 4/15/04 Aaa NZD 59,605 34,363
United Kingdom Treasury 9 3/4%, 1/19/98 Aaa GBP 5,300 8,959
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $211,201) 175,767
INDEXED SECURITIES - 1.2%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
INTEREST INDEXED - 0.9%
CIT Group Holdings Inc. medium term note
5.02%, 4/6/98 (indexed amortizing note
to 3-month LIBOR rate) - $ 15,350 $ 15,276
OTHER - 0.3%
First Interstate Bancorp floating rate note 5.5125%,
2/26/96 (inversely indexed to JPY) (e) - 12,900 4,257
TOTAL INDEXED SECURITIES
(Cost $23,316) 19,533
COLLATERALIZED NOTES - 1.9%
Ridgefield Investments Ltd. sr. notes 0%, 2/2/95
(collateralized by Mexican govt.
securities) (d) (Cost $33,955) 34,495 32,463
CERTIFICATES OF DEPOSIT - 0.5%
First USA Bank 4.3%, 2/3/95 Baa2 9,000 8,961
(Cost $9,007)
COMMERCIAL PAPER - 0.7%
Bancomer:
0%, 12/21/95 MXN 11,552 2,866
0%, 12/28/95 MXN 31,058 7,686
Nacional Financiera SNC 0%, 7/23/96 MXN 4,054 936
TOTAL COMMERCIAL PAPER
(Cost $13,193) 11,488
MUNICIPAL SECURITIES - 1.4%
Louisiana Pub. Facs. Auth. Rev. 9.95%, 6/1/96 A3 16,735 17,384
Shreveport Louisiana Water & Sewer Revenue,
taxable refunding 0%, 12/1/96 Aaa 3,500 3,014
Virginia State Public School Authority,
4 1/4%, 1/1/98 Aa 4,000 3,845
TOTAL MUNICIPAL SECURITIES
(Cost $25,124) 24,243
REPURCHASE AGREEMENTS - 21.6%
MATURITY VALUE (NOTE 1)
AMOUNT (000S)
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 4.78% dated
10/31/94 due 11/1/94 $ 363,947 $ 363,899
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,754,352) $ 1,686,816
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
106,627 BEF 11/25/94 $ 3,450 $ (10)
1,622 DKK 11/14/94 276 -
314,207 JPY 11/1/94 3,270 (155)
TOTAL CONTRACTS TO BUY
(Payable amount $7,161) $ 6,996 (165)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.4%
CONTRACTS TO SELL
806,231 BEF 11/25/94 $ 26,092 (586)
1,622 DKK 11/14/94 275 (17)
74,714 FRF 1/27/95 14,518 132
2,546,944 ITL 11/25/94 1,654 (39)
628,414 JPY 11/1/94 to 2/1/95 6,538 (88)
TOTAL CONTRACTS TO SELL
(Receivable amount $48,479) $ 49,077 (598)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.9%
$ (763)
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
DKK - Danish krone
FRF - French franc
IDR - Indonesian rupiah
ITL - Italian lira
JPY - Japanese yen
MXN - Mexican peso
NZD - New Zealand dollar
LEGEND
(a) Principal amount is stated in United States dollars unless otherwise
noted.
(b) Principal amount shown is original face amount and does not reflect the
inflation adjustments.
(c) Principal amount in millions.
(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 $113,233,000 or 6.6% of net
assets.
(e) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(f) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
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 28.5% AAA, AA, A 26.9%
Baa 22.7% BBB 25.1%
Ba 5.4% BB 2.3%
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 6.8% including long-term debt categorized
as other securities. FMR has determined that unrated debt securities that
are lower quality account for 1.6% of the total value of investment in
securities.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.9%
Mexico 9.7
Argentina 3.4
New Zealand 2.3
France 1.1
Others (individually less than 1%) 1.6
TOTAL 100.0%
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $1,754,352,000. Net unrealized depreciation aggregated
$67,536,000, of which $3,894,000 related to appreciated investment
securities and $71,430,000 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) OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 1,686,816
agreements of $363,899) (cost $1,754,352) - See
accompanying schedule

Cash 153

Receivable for investments sold 25,524

Unrealized appreciation on foreign currency contracts 135

Interest receivable 19,907

TOTAL ASSETS 1,732,535

LIABILITIES

Payable for investments purchased $ 5,079

Unrealized depreciation on foreign currency contracts 898

Payable for fund shares redeemed 6,502

Dividends payable 1,241

Accrued management fee 668

Other payables and accrued expenses 773

TOTAL LIABILITIES 15,161

NET ASSETS $ 1,717,374

Net Assets consist of:

Paid in capital $ 1,869,751

Distributions in excess of net investment income (8,167)

Accumulated undistributed net realized gain (loss) on (76,580)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (67,630)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 193,401 shares outstanding $ 1,717,374

NET ASSET VALUE, offering price and redemption price per $8.88
share ($1,717,374 (divided by) 193,401 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 65,358
Interest

EXPENSES

Management fee $ 4,232

Transfer agent fees 2,058

Accounting fees and expenses 234

Non-interested trustees' compensation 7

Custodian fees and expenses 453

Registration fees 34

Audit 40

Legal 4

Miscellaneous 12

TOTAL EXPENSES 7,074

NET INVESTMENT INCOME 58,284

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (34,456)

Foreign currency transactions (14,794) (49,250)

Change in net unrealized appreciation (depreciation) on:

Investment securities 2,597

Assets and liabilities in foreign currencies 5,150 7,747

NET GAIN (LOSS) (41,503)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 16,781
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED APRIL 30,
OCTOBER 31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 58,284 $ 149,523
Net investment income

Net realized gain (loss) (49,250) (14,646)

Change in net unrealized appreciation (depreciation) 7,747 (95,992)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 16,781 38,885
FROM OPERATIONS

Distributions to shareholders: (57,718) (138,857)
From net investment income

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

TOTAL DISTRIBUTIONS (57,718) (146,909)

Share transactions 543,647 2,498,928
Net proceeds from sales of shares

Reinvestment of distributions 49,294 124,898

Cost of shares redeemed (796,822) (2,543,350)

Net increase (decrease) in net assets resulting from (203,881) 80,476
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (244,818) (27,548)

NET ASSETS

Beginning of period 1,962,192 1,989,740

End of period (including distributions in excess of net $ 1,717,374 $ 1,962,192
investment income of $(8,167) and $(8,733),
respectively)

OTHER INFORMATION
Shares

Sold 60,381 263,357

Issued in reinvestment of distributions 5,499 13,198

Redeemed (88,683) (269,588)

Net increase (decrease) (22,803) 6,967

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED APRIL 30,
ENDED
OCTOBER 31, 1994

(UNAUDITED) 1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

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

Income from .279 .588 .744 .810 .792 .778
Investment
Operations
Net investment
income

Net realized and (.198) (.392) .063 .251 .040 (.010)
unrealized gain
(loss)

Total from .081 .196 .807 1.061 .832 .768
investment
operations

Less Distributions (.281) (.592) (.727) (.811) (.822) (.778)
From net
investment
income

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

Total distributions (.281) (.626) (.727) (.811) (.822) (.778)

Net asset value, end $ 8.880 $ 9.080 $ 9.510 $ 9.430 $ 9.180 $ 9.170
of period

TOTAL RETURN B .90% 1.99 8.85 12.00 9.49 8.58
% % % % %

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 1,717 $ 1,962 $ 1,990 $ 984 $ 235 $ 197
period (in millions)

Ratio of expenses to .76% A .80 .77 .86 .83 .83
average net % % % % %
assets

Ratio of net 6.26% A 6.70 7.68 8.23 8.65 8.28
investment income % % % % %
to average net
assets

Portfolio turnover 56% A 73 63 87 164 148
rate % % % % %

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994 (Unaudited)

1. 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 of their purchase date 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.
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 prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Effective November 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, currency
gains and losses realized between the trade and settlement dates on
securities transactions, and the difference between the amount of net
investment income accrued and the U.S. dollar amount actually received.
Further, as permitted under the SOP, the effects of changes in foreign
currency exchange rates on investments in securities are not segregated in
the Statement of Operations from the effects of changes in market prices of
those securities, but are included with the net realized and unrealized
gain or loss on investment in securities.
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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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 generally accepted accounting
principles. These differences are primarily due to differing treatments for
paydown gains/losses on certain securities, foreign currency transactions,
market discount, capital loss carryforwards and losses deferred due to wash
sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Distributions in excess of 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.
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, as reflected in the schedule of
investments under the caption "Forward Foreign Currency Contracts,"
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 any realized gain (loss) 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.
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
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.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The repurchase agreements were dated October 31,
1994 and due November 1, 1994. The maturity values of the joint trading
account investments were $363,947,000 at 4.78%. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING
DOLLAR AMOUNTS IN THOUSANDS
Number of dealers or banks 26
Maximum amount with one dealer or bank 10.3%
Aggregate principal amount of agreements $18,074,295
Aggregate maturity amount of agreements $18,076,694
Aggregate market value of collateral $18,470,938
Coupon rates of collateral 3.0% to 15 3/4%
Maturity dates of collateral 11/3/94 to 11/15/94
4. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $385,009,000 and $754,040,000, respectively, of which U.S.
government and government agency obligations aggregated $303,693,000 and
$240,385,000, respectively.
5. 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
5. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES - CONTINUED
and is based on the monthly average net assets of all the mutual funds
advised by FMR. The rates ranged from .1325% to .3700% for the period May
1, 1994 to July 31, 1994 and .1200% to .3700% for the period August 1, 1994
to October 31, 1994. In the event that these rates were lower than the
contractual rates in effect during those periods, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. The annual individual fund fee rate is .30%. For the
period, the management fee was equivalent to an annualized rate of .45% of
average net assets
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 $80,000 for the
period.
TRANSFER AGENT FEES. 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 FEES. 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.
TO CALL FIDELITY

TO WRITE FIDELITY

If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Donald Taylor, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, 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
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Investment Grade Bond
Mortgage Securities
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Spartan Government Income
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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)

(registered trademark)