FIDELITY FIXED INCOME TRUST, N-30D, 1997-06-13

FIDELITY FIXED INCOME TRUST
N-30D, 1997-06-13

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(2_FIDELITY_LOGOS)FIDELITY

INVESTMENT GRADE BOND
FUND
ANNUAL REPORT
APRIL 30, 1997
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.

REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 31

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,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
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.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Through the first four months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while 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. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you 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. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income, as reflected in the fund's yield, to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Investment Grade Bond 6.42% 43.20% 124.44%

Lehman Brothers Aggregate Bond Index 7.09% 42.61% 130.18%

Corporate BBB-Rated Bond Funds 7.42% 49.25% 127.61%
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers Aggregate Bond
Index - a market value weighted performance benchmark for investment-grade
fixed-rate debt issues, including government, corporate, asset-backed and
mortgage-backed securities, with maturities of at least one year. To
measure how the fund stacked up against its peers, you can compare it to
the corporate BBB-rated bond funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of 108
mutual funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Investment Grade Bond 6.42% 7.45% 8.42%

Lehman Brothers Aggregate Bond Index 7.09% 7.36% 8.69%

Corporate BBB-Rated Bond Funds Average 7.42% 8.29% 8.53%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking the arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
Investment Grade Bond LB Aggregate Bond
00026 LB001
1987/04/30 10000.00 10000.00
1987/05/31 9921.50 9960.88
1987/06/30 10012.20 10097.97
1987/07/31 10014.00 10090.21
1987/08/31 9957.23 10036.21
1987/09/30 9707.60 9822.50
1987/10/31 9975.59 10172.33
1987/11/30 10095.08 10253.81
1987/12/31 10218.99 10393.48
1988/01/31 10612.95 10758.83
1988/02/29 10777.82 10886.55
1988/03/31 10638.47 10784.38
1988/04/30 10574.69 10726.18
1988/05/31 10496.85 10654.08
1988/06/30 10715.74 10911.12
1988/07/31 10682.60 10853.89
1988/08/31 10696.90 10882.34
1988/09/30 10919.20 11128.71
1988/10/31 11095.97 11338.23
1988/11/30 10996.59 11200.49
1988/12/31 11028.60 11213.10
1989/01/31 11144.04 11374.44
1989/02/28 11123.91 11291.99
1989/03/31 11190.77 11340.81
1989/04/30 11393.60 11578.13
1989/05/31 11633.79 11882.38
1989/06/30 11994.75 12244.17
1989/07/31 12273.04 12504.45
1989/08/31 12081.39 12319.18
1989/09/30 12117.92 12382.23
1989/10/31 12363.03 12687.12
1989/11/30 12450.65 12808.04
1989/12/31 12462.36 12842.32
1990/01/31 12294.07 12689.71
1990/02/28 12325.77 12730.77
1990/03/31 12325.41 12740.15
1990/04/30 12226.84 12623.43
1990/05/31 12559.32 12997.19
1990/06/30 12749.52 13205.73
1990/07/31 12939.35 13388.41
1990/08/31 12766.57 13209.61
1990/09/30 12841.32 13318.89
1990/10/31 12724.44 13487.99
1990/11/30 12998.56 13778.33
1990/12/31 13218.26 13993.02
1991/01/31 13354.60 14165.99
1991/02/28 13564.31 14286.92
1991/03/31 13738.92 14385.20
1991/04/30 13916.09 14541.05
1991/05/31 14014.58 14626.08
1991/06/30 14012.99 14618.64
1991/07/31 14199.21 14821.37
1991/08/31 14553.47 15142.10
1991/09/30 14866.00 15448.93
1991/10/31 15014.14 15620.94
1991/11/30 15160.25 15764.17
1991/12/31 15718.41 16232.34
1992/01/31 15521.62 16011.51
1992/02/29 15645.49 16115.62
1992/03/31 15618.61 16024.77
1992/04/30 15673.34 16140.52
1992/05/31 15996.71 16445.08
1992/06/30 16183.83 16671.41
1992/07/31 16666.55 17011.54
1992/08/31 16816.11 17183.87
1992/09/30 16964.95 17387.57
1992/10/31 16732.48 17157.04
1992/11/30 16747.96 17160.92
1992/12/31 17025.33 17433.80
1993/01/31 17424.23 17768.11
1993/02/28 17861.53 18079.15
1993/03/31 18026.77 18154.48
1993/04/30 18122.35 18280.90
1993/05/31 18218.53 18304.18
1993/06/30 18696.03 18635.91
1993/07/31 18983.99 18741.31
1993/08/31 19509.13 19069.81
1993/09/30 19565.16 19122.18
1993/10/31 19797.41 19193.64
1993/11/30 19630.10 19030.36
1993/12/31 19788.33 19133.50
1994/01/31 20097.68 19391.83
1994/02/28 19442.08 19054.93
1994/03/31 18872.36 18585.15
1994/04/30 18728.86 18436.74
1994/05/31 18761.99 18434.16
1994/06/30 18657.58 18393.42
1994/07/31 18951.35 18758.77
1994/08/31 19009.10 18782.05
1994/09/30 18849.82 18505.61
1994/10/31 18775.34 18489.12
1994/11/30 18832.79 18448.06
1994/12/31 18729.22 18575.45
1995/01/31 18946.61 18943.06
1995/02/28 19210.23 19393.45
1995/03/31 19321.74 19512.43
1995/04/30 19596.00 19784.99
1995/05/31 20294.53 20550.62
1995/06/30 20430.05 20701.28
1995/07/31 20371.20 20655.05
1995/08/31 20572.21 20904.33
1995/09/30 20770.01 21107.70
1995/10/31 21056.71 21382.20
1995/11/30 21342.05 21702.61
1995/12/31 21634.18 22007.18
1996/01/31 21781.71 22153.32
1996/02/29 21390.61 21768.24
1996/03/31 21243.08 21616.93
1996/04/30 21089.55 21495.36
1996/05/31 21057.58 21451.71
1996/06/30 21297.47 21739.79
1996/07/31 21356.60 21799.28
1996/08/31 21323.50 21762.75
1996/09/30 21656.34 22142.00
1996/10/31 22114.96 22632.48
1996/11/30 22510.03 23020.14
1996/12/31 22288.30 22806.10
1997/01/31 22345.96 22875.94
1997/02/28 22393.17 22932.85
1997/03/31 22134.57 22678.72
1997/04/30 22443.92 23018.20
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Investment Grade Bond Fund on April 30, 1987. As the chart shows, by
April 30, 1997, the value of the investment would have grown to $22,444 - a
124.44% increase on the 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
$23,018 - a 130.18% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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,

1997 1996 1995 1994 1993

Dividend return 6.70% 6.77% 6.99% 6.92% 8.56%

Capital appreciation return -0.28% 0.85% -2.36% -3.57% 7.07%

Total return 6.42% 7.62% 4.63% 3.35% 15.63%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains paid
by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.73(cents) 22.53(cents) 46.04(cents)

Annualized dividend rate 6.51% 6.41% 6.52%

30-day annualized yield 6.34% - -

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 $6.97 over
the past one month, $7.09 over the past six months, and $7.06 over the past
one year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
A relatively favorable inflation
backdrop that steadied fears of
higher interest rates helped
spark an April rally that buoyed the
performance of the U.S. taxable
bond market for the 12 months
ended April 30, 1997. The
Lehman Brothers Aggregate Bond
Index - a broad measure of the
U.S. taxable bond market -
returned 7.09% over that period.
For much of the year, bonds
were affected by increasing
expectations of economic growth
and inflation. While responding to
mixed economic statistics, the
bias of the market was toward
higher rates. With interest rates
finishing the period slightly
higher than where they began, the
performance of most bonds
consisted almost entirely of
income returns as opposed to
price gains or losses. In his
February testimony before
Congress, Federal Reserve Board
Chairman Alan Greenspan
indicated that the Fed was
inclined to raise the rate banks
charge each other for overnight
loans - known as the fed funds
target rate - to head off inflation
that might be caused by a tight
labor market. On March 25, the
Fed followed through by raising
the target rate by 0.25% to 5.50%.
However, this move had largely
been priced into the market.
When producer and consumer
price indexes continued to offer a
favorable inflation outlook in April,
a market rally in all debt market
sectors ensued, helping to ease
much of the bond market's
negative price performance
posted earlier in the period.
NOTE TO SHAREHOLDERS: Kevin Grant became Portfolio Manager of Fidelity
Investment Grade Bond Fund on February 3, 1997.
Q. HOW DID THE FUND PERFORM OVER THE PAST YEAR, KEVIN?
A. For the 12 months that ended April 30, 1997, the fund had a total return
of 6.42%. That lagged the 7.42% return of the corporate debt BBB funds
average tracked by Lipper Analytical Services. For the same 12-month
period, the Lehman Brothers Aggregate Bond Index posted a return of 7.09%.
Q. WHY DID THE FUND'S RETURN TRAIL THAT OF THE LIPPER AVERAGE?
A. The fund's duration - or sensitivity to interest rates - is maintained
in line with the duration of the overall market as represented by the
fund's benchmark index. Many of the funds that comprise the Lipper average
tend to maintain longer durations - and, hence, more interest rate
sensitivity - than the fund and the index. Therefore, when interest
rates fell - and bond prices rose - during the last part of 1996, the funds
with longer durations generally performed better than this fund.
Q. WHAT CHANGES HAVE YOU MADE SINCE TAKING OVER THE FUND?
A. First off, I'd like to mention that the former manager, Michael Gray,
and I worked very closely together for some time. As a result, the
transition was quite smooth. I maintained a stake in corporate bonds,
concentrating on those companies that I felt wouldn't be affected by shifts
in the economy. In particular, I've been attracted to bonds issued by
banks. Historically, bank earnings have been quite sensitive to interest
rates. However, over the past several years, banks increased their fees,
making them less sensitive to changes in interest rates and business based
on loans. Bonds issued by energy companies proved to be positive performers
for the fund, helped by an upward spike in energy prices in the winter.
This rise in prices helped increase the companies' cash flow, which they
used to pay down debt. In the corporate area overall, I've focused on
shorter maturities in the two- to four-year range. These bonds offer a
yield advantage over Treasuries, but are short enough in maturity that they
shouldn't markedly underperform Treasuries if the market becomes nervous
about credit risk.
Q. WERE THERE OTHER TYPES OF CORPORATE BONDS THAT INTERESTED YOU?
A. Yes. Bank bonds known as capital securities presented an opportunity
during the period. Because of a change brought about by the Federal Reserve
Board last fall, banks were given the ability to issue these long-term
bonds for which the interest payments are tax-deductible to the banks. A
new market was created, as banks sought to issue as many capital securities
as possible before Congress had the chance to close this tax loophole. A
flood of securities came to market very cheaply, so I added some to the
fund. I also was attracted to put bonds, which are described at length in
my additional comments at the end of this interview.
Q. WHAT ABOUT MORTGAGE-BACKED SECURITIES? WERE THEY ATTRACTIVE?
A. Late last year, the mortgage market started to get very expensive by
historical standards. As a result, the fund's mortgage position was
reduced. Mortgage-backed securities continued to be very rich - or
expensive - through January and February, and I've maintained a smaller
stake in them than the fund had six months ago.
Q. WHAT'S YOUR OUTLOOK?
A. I don't manage the fund based on any prediction about the economy or the
bond market. Rather, I look for bonds and sectors of the bond market that
offer good value relative to the overall bond market. Looking forward, I'll
probably keep a reduced stake in mortgages because the sector is trading at
such rich levels. Corporate bonds have cheapened a bit, making that sector
somewhat attractive. While I won't be forecasting where the economy is
going, I will be keeping an eye on the effect any slowdown in the economy
might have on individual company performance.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: high current income,
by investing mainly in
investment-grade debt
securities
FUND NUMBER: 026
TRADING SYMBOL: FBNDX
START DATE: August 6, 1971
SIZE: as of April 30, 1997,
more than $1.4 billion
MANAGER: Kevin Grant, since
February 1997; also
manager of several Fidelity
and Spartan
investment-grade taxable
bond funds; joined Fidelity in
1993
(checkmark)
KEVIN GRANT ON PUT BONDS:
"Put bonds have proven to be
attractive investments for the
fund. These are corporate
issues that give the investor
the option to redeem the
security at some point prior to
its actual maturity. They are
attractive for their flexibility
and ability to provide positive
performance in a variety of
investing environments. For
example, let's say the fund
holds a position in a 10-year
corporate bond that is
`putable' in five years. If
interest rates are higher in five
years, we'll exercise the put,
redeem the bonds and
reinvest that money at the
higher rate. Conversely, if
rates are lower after five
years, we'll hang onto the
bonds. Then, instead of
having a bond that is
maturing, we'll have a security
offering an above-market rate
that has another five years to
maturity. In a fund like this
that invests in mortgage
securities, put bonds tend to
offset prepayment risk - the
risk that mortgage holders will
pay off their loans before
maturity to take advantage of
lower interest rates."
INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF APRIL 30, 1997
(MOODY'S RATINGS) % % OF FUND'S
O INVESTMENTS
F 6 MONTHS AGO
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S

Aaa 5 71.6
2
.
9

Aa 4 2.4
.
6

A 1 9.4
3
.
2

Baa 1 12.1
6
.
9

Ba 5 1.9
.
7

Not Rated 0 0.0
.
4

TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW 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 APRIL 30, 1997
6 MONTHS AGO

Years 8 8.3
.
4

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 APRIL 30, 1997
6 MONTHS AGO

Years 4 4.7
.
7

Corporate bonds 37.8%
U.S. government
and agency
obligations 48.8%
Foreign
government
obligations 3.1%
Short-term
investments 6.3%
Other 4.0%
Corporate bonds 23.4%
U.S. government
and agency
obligations 67.4%
Foreign
government
obligations 4.0%
Short-term
investments 2.6%
Other 2.6%
Row: 1, Col: 1, Value: 4.0
Row: 1, Col: 2, Value: 6.3
Row: 1, Col: 3, Value: 2.9
Row: 1, Col: 4, Value: 48.8
Row: 1, Col: 5, Value: 38.0
Row: 1, Col: 1, Value: 2.6
Row: 1, Col: 2, Value: 2.6
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 67.40000000000001
Row: 1, Col: 5, Value: 23.4

* FOREIGN
INVESTMENTS 7.6%
** FOREIGN
INVESTMENTS 7.0%
INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 37.8%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.3%
Praxair, Inc., 6.90%, 11/1/06 A3 $ 4,000 $ 3,910
DURABLES - 1.2%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Tennessee Gas Pipeline Co. 7%, 3/15/27 Baa3 3,500 3,449
CONSUMER ELECTRONICS - 0.3%
Black & Decker Corp. 7 1/2%, 4/1/03 Baa3 5,000 5,044
TEXTILES & APPAREL - 0.7%
Levi Strauss & Co. 7%, 11/1/06 (d) Baa2 10,000 9,760
TOTAL DURABLES 18,253
ENERGY - 1.8%
ENERGY SERVICES - 0.8%
Petroliam Nasional BHD yankee (d):
6 7/8%, 7/1/03 A1 5,280 5,207
7 1/8%, 10/18/06 A1 7,000 6,929
12,136
OIL & GAS - 1.0%
Husky Oil Ltd. yankee 6 7/8%, 11/15/03 Baa3 2,680 2,614
Pennzoil Co. 9 5/8%, 11/15/99 Baa3 2,950 3,139
Ras Laffan Liquid Natural Gas Co. Ltd. yankee
7.628%, 9/15/06 (d) A3 3,000 2,990
Texas Eastern Transmission Corp.:
11 3/8%, 11/15/00 Baa1 3,000 3,298
10%, 8/15/01 Baa1 2,350 2,570
14,611
TOTAL ENERGY 26,747
FINANCE - 20.0%
ASSET-BACKED SECURITIES - 1.1%
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa 3,177 3,164
Green Tree Financial Corp. 6.10%, 4/15/27 Aaa 6,404 6,336
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 391 389
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
ASSET-BACKED SECURITIES - CONTINUED
Premier Auto Trust:
8.05%, 4/4/00 Aaa $ 2,990 $ 3,040
6%, 5/6/00 Aaa 3,450 3,438
Standard Credit Card Master Trust I 7.65%,
2/15/00 A2 430 437
16,804
BANKS - 9.3%
ABN Amro Bank NV 6 5/8%,
10/31/01 Aa3 7,000 6,908
Banc One Corp. 6.70%, 3/24/00 Aa3 8,300 8,298
BankBoston Capital Trust II 7 3/4%, 12/15/26 Baa1 7,170 6,756
BanPonce Corp.:
5 3/4%, 3/1/99 A3 2,520 2,473
6.378%, 4/8/99 A3 2,880 2,852
BanPonce Trust I 8.327%, 2/1/27 (d) Baa1 7,910 7,853
Capital One 6.42%, 11/12/99 Baa3 14,000 13,880
Central Fidelity Banks, Inc. 8.15%, 11/15/02 Baa2 4,000 4,161
Citicorp 9%, 4/15/99 A2 2,000 2,085
Corporacion Andina de Fomento yankee
7.10%, 2/1/03 Baa2 3,000 2,956
Crestar Financial Corp. 8 3/4%, 11/15/04 Baa1 4,750 5,118
Export-Import Bank of Korea 6 3/8%, 2/15/06 A1 9,415 8,719
First Maryland Bancorp 8 3/8%, 5/15/02 Baa1 3,000 3,144
First Tennessee National Corp. 6 3/4%,
11/15/05 Baa1 1,650 1,577
First USA Bank 5 3/4%, 1/15/99 Baa3 4,000 3,936
Hartford National Corp. 9.85%, 6/1/99 A3 6,800 7,213
Kansallis-Osake-Pankki 10%, 5/1/02 A3 1,780 1,990
Korea Development Bank yankee:
6 1/2%, 11/15/02 A1 6,000 5,803
6 3/4%, 12/1/05 A1 5,000 4,781
Midland American Capital Corp. gtd. 12 3/4%,
11/15/03 A1 920 1,001
Midland Bank PLC yankee 7 5/8%, 6/15/06 A1 4,500 4,575
NB Capital Trust IV 8 1/4%, 4/15/27 A1 5,000 5,033
Provident Bank 6 3/8%, 1/15/04 Baa2 3,100 2,941
Signet Bank 7.80%, 9/15/06 Baa1 4,000 4,068
Summit Bancorp. 8 5/8%, 12/10/02 BBB- 5,500 5,859
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Union Planters Corp. 6 3/4%, 11/1/05 Baa2 $ 3,000 $ 2,868
Union Planters National Bank 6.81%, 8/20/01 A3 4,000 3,980
Zions Bancorp. 8 5/8%, 10/15/02 Baa1 5,000 5,347
136,175
CREDIT & OTHER FINANCE - 7.0%
AT&T Capital Corp.:
6.02%, 12/1/98 Baa3 8,000 7,935
6.16%, 12/3/99 Baa3 3,000 2,952
Associates Corp. of North America 6 7/8%,
2/15/00 Aa3 15,000 15,073
BCH Cayman Islands Ltd. yankee 7.70%,
7/15/06 A3 1,900 1,917
Chase Capital I 7.67%, 12/1/26 A1 19,150 18,179
Chrysler Financial Corp. 6 3/8%, 1/28/00 A3 7,960 7,898
First Security Capital I 8.41%, 12/15/26 A3 1,900 1,913
Fleet Mortgage Group 6 1/2%, 9/15/99 A2 250 249
Ford Motor Credit Co. 8 3/8%, 1/15/23 A1 2,000 2,035
Ford Motor Credit:
5.73%, 2/23/00 A1 4,000 3,901
6.05%, 12/27/00 A1 5,000 4,873
General Electric Capital Corp. 6.94%,
4/13/09 (c) Aaa 7,250 7,294
General Motors Acceptance Corp.:
7 7/8%, 2/23/98 A3 9,000 9,108
6.65%, 5/24/00 A3 10,350 10,311
KeyCorp Institutional Capital A
7.826%, 12/1/26 A1 4,500 4,316
Secured Finance, Inc. gtd. secured
9.05%, 12/15/04 Aaa 4,000 4,410
Union Acceptance Corp. 7.075%, 7/10/02 Baa2 774 774
103,138
INSURANCE - 1.2%
Executive Risk Capital Trust 8.675%, 2/1/27 (d) Baa3 10,500 10,367
Nationwide Mutual Insurance Co. 6 1/2%,
2/15/04 (d) A1 1,500 1,433
SunAmerica, Inc. 6.20%, 10/31/99 Baa1 5,500 5,430
17,230
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
SAVINGS & LOANS - 1.4%
Ahmanson (H.F.) & Co. 7 7/8%, 9/1/04 Baa2 $ 2,600 $ 2,664
Great West Financial Trust II 8.206%, 2/1/27 Baa2 15,500 15,019
St. Paul Bancorp, Inc. 7 1/8%, 2/15/04 Ba2 2,200 2,145
19,828
TOTAL FINANCE 293,175
HEALTH - 0.5%
MEDICAL FACILITIES MANAGEMENT - 0.5%
Columbia/HCA Healthcare Corp.:
6 1/2%, 3/15/99 A2 4,500 4,500
6 7/8%, 7/15/01 A3 3,000 2,997
7,497
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Caterpillar, Inc. 8%, 2/15/23 A2 500 515
POLLUTION CONTROL - 0.6%
WMX Technologies, Inc. 6 1/4%, 4/1/99 A2 8,100 8,049
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 8,564
MEDIA & LEISURE - 4.4%
BROADCASTING - 2.3%
TCI Communication, Inc. 7 1/4%, 6/15/99 Ba1 19,990 20,070
Tele-Communications, Inc. 7 3/8%, 2/15/00 Ba1 4,250 4,263
Time Warner, Inc.:
7.95%, 2/1/00 Ba1 7,000 7,170
9 1/8%, 1/15/13 Ba1 2,000 2,148
33,651
LEISURE DURABLES & TOYS - 0.3%
Mattel, Inc. 6 7/8%, 8/1/97 A3 5,000 5,014
LODGING & GAMING - 0.6%
Circus Circus Enterprises, Inc. 7%, 11/15/36 Baa2 2,250 2,151
Mirage Resorts, Inc. 7 1/4%, 10/15/06 Baa2 6,000 5,904
8,055
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 1.1%
News America Holdings, Inc.:
gtd. 9 1/8%, 10/15/99 Baa3 $ 4,000 $ 4,211
8 5/8%, 2/1/03 Baa3 3,240 3,426
Time Warner Entertainment Co. LP 9 5/8%,
5/1/02 Baa3 8,000 8,795
16,432
RESTAURANTS - 0.1%
Darden Restaurants, Inc. 6 3/8%, 2/1/06 Baa1 2,070 1,888
TOTAL MEDIA & LEISURE 65,040
NONDURABLES - 1.2%
FOODS - 0.7%
ConAgra, Inc. 7 1/8%, 10/1/26 Baa1 7,685 7,640
Nabisco, Inc. 8%, 1/15/00 Baa2 2,100 2,157
9,797
TOBACCO - 0.5%
Philip Morris Companies, Inc. 6.95%, 6/1/06 A2 7,500 7,475
TOTAL NONDURABLES 17,272
RETAIL & WHOLESALE - 1.6%
GENERAL MERCHANDISE STORES - 0.5%
Dayton Hudson Corp. 6.40%, 2/15/03 Baa1 1,500 1,441
Penney (J.C.), Inc. 6.95%, 4/1/00 A2 5,600 5,621
7,062
GROCERY STORES - 1.1%
American Stores Co.:
7.20%, 6/9/03 Baa3 5,000 4,949
7 1/2%, 5/1/37 Baa2 8,000 8,040
Kroger Co. 8.15%, 7/15/06 Baa3 2,500 2,603
15,592
TOTAL RETAIL & WHOLESALE 22,654
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
TECHNOLOGY - 1.9%
COMPUTERS & OFFICE EQUIPMENT - 1.2%
Comdisco, Inc.:
9 1/4%, 7/6/00 Baa2 $ 2,000 $ 2,133
6 3/8%, 11/30/01 Baa1 16,000 15,544
17,677
ELECTRONICS - 0.7%
Texas Instruments, Inc. 6 7/8%, 7/15/00 A3 10,830 10,858
TOTAL TECHNOLOGY 28,535
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.5%
Delta Air Lines, Inc. 9 7/8%, 5/15/00 Baa3 2,000 2,149
United Air Lines, Inc.:
Series A, 10.67%, 5/1/04 Baa3 3,000 3,468
equipment trust certificates 9.76%, 5/13/06 Baa1 2,000 2,249
7,866
UTILITIES - 3.8%
CELLULAR - 0.8%
360 Degrees Communications Co. 7 1/8%,
3/1/03 Ba1 11,530 11,331
ELECTRIC UTILITY - 0.2%
British Columbia Hydro & Power Authority yankee
12 1/2%, 1/15/14 Aa2 2,620 2,965
GAS - 0.9%
Mitchell Energy & Development Corp.:
8%, 7/15/99 Ba3 5,595 5,710
9 1/4%, 1/15/02 Ba3 3,250 3,447
Transco Energy Co. 9 3/8%, 8/15/01 Baa2 2,000 2,165
Williams Holdings Delaware, Inc. 6 1/4%,
2/1/06 Baa2 2,850 2,653
13,975
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 1.9%
MFS Communications, Inc. (b):
0%, 1/15/04 Ba3 $ 3,520 $ 3,186
0%, 1/15/06 Ba3 12,000 9,060
WorldCom, Inc. 7 3/4%, 4/1/07 Ba1 15,500 15,426
27,672
TOTAL UTILITIES 55,943
TOTAL NONCONVERTIBLE BONDS
(Cost $557,104) 555,456
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 30.4%
U.S. TREASURY OBLIGATIONS - 24.9%
6 5/8%, 6/30/01 Aaa 146,110 146,499
11 7/8%, 11/15/03 Aaa 51,305 65,302
12 3/8%, 5/15/04 Aaa 21,513 28,290
12 3/4%, 11/15/10 (callable) Aaa 12,460 17,171
12%, 8/15/13 (callable) Aaa 1,600 2,230
9%, 11/15/18 Aaa 85,700 104,070
8 1/8%, 8/15/19 Aaa 2,010 2,249
7 1/4%, 2/ 15/23 Aaa 450 454
366,265
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.5%
Federal Home Loan Bank:
7.18%, 4/21/04 Aaa 6,250 6,359
7.36%, 7/1/04 Aaa 6,000 6,173
7.46%, 9/9/04 Aaa 1,500 1,546
7.87%, 10/20/04 Aaa 7,000 7,401
8%, 1/26/05 Aaa 6,570 6,958
7.59%, 3/10/05 Aaa 7,850 8,160
Federal Home Loan Mortgage Corporation
8.115%, 1/31/05 Aaa 2,100 2,241
Financing Corporation stripped principal
0%, 3/7/05 - 10,415 6,066
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank) Series 1994-C,
6.61%, 9/15/99 Aaa $ 416 $ 418
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
0%, 11/15/01 Aaa 1,910 1,420
8%, 11/15/01 Aaa 3,000 3,146
6 1/4%, 8/15/02 Aaa 3,588 3,513
6 5/8%, 8/15/03 Aaa 9,530 9,454
5 5/8%, 9/15/03 Aaa 8,820 8,301
5.89%, 8/15/05 Aaa 6,750 6,299
U.S. Department of Housing and Urban
Development government guaranteed
participation certificates Series 1995-A,
8.24%, 8/1/04 Aaa 2,800 3,003
80,458
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $447,469) 446,723
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 18.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.2%
7%, 5/1/01 to 7/1/01 Aaa 2,914 2,923
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 12.7%
5 1/2%, 2/1/11 to 5/1/12 Aaa 24,593 22,947
6%, 5/1/01 to 5/1/26 Aaa 48,694 46,417
6 1/2%, 5/1/03 to 2/1/26 Aaa 42,807 40,784
7%, 7/1/25 to 5/1/26 Aaa 21,539 20,913
7 1/2%, 1/1/26 to 5/1/27 Aaa 23,154 22,982
8%, 10/1/23 to 5/1/27 Aaa 23,905 24,236
9 1/2%, 1/1/17 to 2/1/25 Aaa 7,966 8,597
12 1/2%, 7/1/11 to 7/1/15 Aaa 457 526
187,402
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.5%
6%, 10/15/08 to 7/15/11 Aaa 37,619 36,028
7 1/2%, 7/15/25 to 5/15/26 Aaa 4,883 4,842
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - CONTINUED
8%, 9/15/24 to 10/15/25 Aaa $ 1,906 $ 1,935
9%, 4/15/16 to 11/15/26 Aaa 30,938 32,603
10%, 11/15/09 to 9/15/25 Aaa 4,493 4,913
80,321
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $271,631) 270,646
COMMERCIAL MORTGAGE SECURITIES - 3.1%
BKB Commercial Mortgage Trust Series 1997-C1
Class A-1, 6 7/8%, 2/25/43 (d) AAA 16,547 16,687
CS First Boston Mortgage Securities Corp.
Series 1995-AEWI Class A-1, 6.665%,
11/25/27 AAA 829 827
Equitable Life Assurance Society of the
United States (The) (d):
sequential pay Series 174
Class A-1, 7.24%, 5/15/06 Aaa 6,000 6,075
Series 174 Class B-1,
7.33%, 5/15/06 Aa2 3,400 3,441
Series 1996-1 Class C-1,
7.52%, 5/15/06 A2 3,500 3,564
Oregon Commercial Mortgage, Inc.
Series 1995-1 Class A, 7.15%, 6/25/23 (d) AAA 1,737 1,737
Resolution Trust Corp. Series 1995-C1
Class A-4A, 6 1/4%, 2/25/27 Aaa 471 470
Structured Asset Securities Corp. sequential pay:
Series 1993-C1 Class A-1A, 6.60%, 10/25/24 AA+ 193 193
Series 1995-C4 Class A-1A, 6.90%, 6/25/26 AAA 1,778 1,775
Series 1996 Class A-2A, 7 3/4%, 2/25/28 AAA 7,136 7,233
Wells Fargo Capital Markets Apartment
Financing Trust 6.56%, 12/29/05 (d) Aaa 4,000 3,910
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $45,559) 45,912
FOREIGN GOVERNMENT OBLIGATIONS (E) - 3.1%
Alberta Province 9 1/4%, 4/1/00 Aa2 6,775 7,233
Export Development Corp. yankee 8 1/8%,
8/10/99 Aa2 2,150 2,221
Irish Republic yankee 7 7/8%, 12/1/01 Aa1 2,000 2,084
FOREIGN GOVERNMENT OBLIGATIONS (E) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
Manitoba Province yankee 6 7/8%, 9/15/02 A1 $ 3,000 $ 2,996
Mexico Value recovery rights discount A - 1 -
Newfoundland Province yankee:
9 7/8%, 6/1/20 Baa1 5,500 6,710
10%, 12/1/20 Baa1 3,000 3,698
8.65%, 10/22/22 Baa1 8,200 8,945
Ontario Province yankee:
7 3/4%, 6/4/02 Aa3 3,000 3,114
15 1/4%, 8/31/12 Aa3 3,000 3,258
Quebec Province yankee 7.22%, 7/22/36 (c) A2 5,000 5,135
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $45,417) 45,394
SUPRANATIONAL OBLIGATIONS - 0.9%
African Development Bank 7 3/4%, 12/15/01
(Cost $12,575) Aa1 12,150 12,571
CASH EQUIVALENTS - 6.3%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.37%, dated
4/30/97 due 5/1/97 $ 92,383 92,369
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,472,124) $ 1,469,071
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
3. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
4. 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 $79,953,000 or 5.5% of net
assets.
5. For foreign government obligations not 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 68.7% AAA, AA, A 66.1%
Baa 16.5% BBB 25.2%
Ba 5.7% BB 0.4%
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 0.4%.
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $1,473,448,000. Net unrealized depreciation aggregated
$4,377,000, of which $11,103,000 related to appreciated investment
securities and $15,480,000 related to depreciated investment securities.
At April 30, 1997, the fund had a capital loss carryforward of
approximately $25,435,000 of which $14,238,000 and $11,197,000 will expire
on April 30, 2004 and 2005, respectively.
The fund intends to elect to defer to its fiscal year ending April 30, 1998
approximately $4,350,000 of losses recognized during the period November 1,
1996 to April 30, 1997.
At April 30, 1998, the fund was required to defer approximately $181,000 of
losses on futures contracts and options.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 1,469,071
agreements of $92,369) (cost $1,472,124) -
See accompanying schedule

Receivable for investments sold 3,609

Interest receivable 25,569

TOTAL ASSETS 1,498,249

LIABILITIES

Payable for investments purchased $ 54,355

Payable for fund shares redeemed 407

Distributions payable 739

Accrued management fee 529

Other payables and accrued expenses 452

TOTAL LIABILITIES 56,482

NET ASSETS $ 1,441,767

Net Assets consist of:

Paid in capital $ 1,480,774

Distributions in excess of net investment income (4,894)

Accumulated undistributed net realized gain (loss) (31,110)
on investments

Net unrealized appreciation (depreciation) on (3,003)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 205,289 shares outstanding $ 1,441,767

NET ASSET VALUE, offering price and redemption price $7.02
per share ($1,441,767 (divided by) 205,289 shares)

</TABLE>

STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 27
Dividends

Interest 103,208

TOTAL INCOME 103,235

EXPENSES

Management fee $ 6,290

Transfer agent fees 3,814

Accounting fees and expenses 397

Non-interested trustees' compensation 20

Custodian fees and expenses 92

Registration fees 88

Audit 61

Legal 13

Miscellaneous 10

Total expenses before reductions 10,785

Expense reductions (106) 10,679

NET INVESTMENT INCOME 92,556

REALIZED AND UNREALIZED GAIN (LOSS) (15,555)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on 11,400
investment securities

NET GAIN (LOSS) (4,155)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 88,401
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 92,556 $ 80,114
Net investment income

Net realized gain (loss) (15,555) 19,264

Change in net unrealized appreciation (depreciation) 11,400 (17,840)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 88,401 81,538
FROM OPERATIONS

Distributions to shareholders (92,525) (79,551)
From net investment income

In excess of net realized gain - (4,766)

TOTAL DISTRIBUTIONS (92,525) (84,317)

Share transactions 607,781 688,158
Net proceeds from sales of shares

Reinvestment of distributions 82,452 72,425

Cost of shares redeemed (601,991) (487,256)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 88,242 273,327
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 84,118 270,548

NET ASSETS

Beginning of period 1,357,649 1,087,101

End of period (including distributions in excess $ 1,441,767 $ 1,357,649
of net investment income of $4,894 and
$4,852, respectively)

OTHER INFORMATION
Shares

Sold 86,172 95,192

Issued in reinvestment of distributions 11,687 10,028

Redeemed (85,325) (67,570)

Net increase (decrease) 12,534 37,650

</TABLE>

FINANCIAL HIGHLIGHTS

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

1997 1996 1995 1994 B 1993

SELECTED PER-SHARE DATA

Net asset value, beginning $ 7.040 $ 7.010 $ 7.300 $ 7.570 $ 7.070
of period

Income from Investment .460 D .484 .464 .522 .570
Operations
Net investment income

Net realized and unrealized (.020) .047 (.147) (.254) .499
gain (loss)

Total from investment .440 .531 .317 .268 1.069
operations

Less Distributions

From net investment income (.460) (.471) (.487) (.525) (.569)

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

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

In excess of net realized - (.030) - - -
gain

Total distributions (.460) (.501) (.607) (.538) (.569)

Net asset value, end of period $ 7.020 $ 7.040 $ 7.010 $ 7.300 $ 7.570

TOTAL RETURN A 6.42% 7.62% 4.63% 3.35% 15.63%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 1,442 $ 1,358 $ 1,087 $ 943 $ 1,018
(in millions)

Ratio of expenses to average .76% .77% .75% .74% .68%
net assets

Ratio of expenses to average .75% .76% .75% .74% .68%
net assets after expense C C
reductions

Ratio of net investment income 6.53% 6.58% 7.00% 6.94% 7.74%
to average net assets

Portfolio turnover rate 120% 134% 90% 61% 74%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Investment Grade Bond Fund (the fund) is a fund of Fidelity
Fixed-Income Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the 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. 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 with remaining maturities of sixty days
or less for which quotations are not readily available are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
the fair market value of the securities received. 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. 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, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, futures and options transactions,
market discount, and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments
may include temporary book and tax basis differences that 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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a delayed delivery 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. With respect to
purchase commitments, the fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,696,200,000 and $1,641,693,000, respectively, of which U.S.
government and government agency obligations aggregated $1,105,697,000 and
$1,363,605,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annual rate of .44% of
average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, is the fund's transfer, dividend disbursing and shareholder servicing
agent. FSC receives account fees and asset-based fees that vary according
to account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .27%
of average net assets.
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.
5. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its custodian and transfer
agent whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of the fund's expenses. During the period, the
fund's custodian and transfer agent fees were reduced by $11,000 and
$95,000, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Fidelity Investment Grade Bond Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Fidelity Investment Grade Bond Fund, including
the schedule of portfolio investments, as of April 30, 1997, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the over
all financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Fidelity Investment Grade Bond Fund as of
April 30, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended , in conformity with generally accepted accounting
principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 6, 1997
DISTRIBUTIONS

A total of 42.58% of the dividends distributed 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 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
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
Fred L. Henning, Jr., Vice President
Kevin Grant, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
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
New Markets Income
Short-Intermediate Government
Short-Term Bond
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Short-Intermediate Government
Spartan Short-Term Bond
Target Timeline(trademark) 1999, 2001 & 2003
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

SHORT-TERM BOND
FUND
ANNUAL REPORT
APRIL 30, 1997
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.

REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 31

Fidelity Short-Term Bond 5.86% 27.89% 92.51%

Lehman Brothers 1-3 Year 6.16% 32.16% 103.20%
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.80% 30.40% 92.09%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers 1-3 Year
Government/Corporate Bond Index - a market value weighted performance
benchmark for government and corporate fixed-rate debt issues with
maturities between one and three years. To measure how the fund's
performance stacked up against its peers, you can compare it to the short
investment grade debt funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 96 mutual funds.
These benchmarks include reinvested dividends and capital gains, if any,
and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Short-Term Bond 5.86% 5.04% 6.77%

Lehman Brothers 1-3 Year 6.16% 5.74% 7.35%
Government/Corporate Bond Index

Short Investment Grade Debt Funds Average 5.80% 5.45% 6.73%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking an arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
Short-Term Bond LB 1-3 Year Govt/Corp
00450 LB013
1987/04/30 10000.00 10000.00
1987/05/31 10011.66 10015.63
1987/06/30 10124.73 10126.03
1987/07/31 10145.10 10181.90
1987/08/31 10177.85 10196.86
1987/09/30 10114.43 10161.94
1987/10/31 10265.51 10363.13
1987/11/30 10330.13 10432.30
1987/12/31 10418.99 10504.79
1988/01/31 10573.16 10663.08
1988/02/29 10683.92 10756.19
1988/03/31 10683.69 10780.13
1988/04/30 10691.15 10794.43
1988/05/31 10666.38 10790.10
1988/06/30 10776.72 10898.18
1988/07/31 10785.71 10905.83
1988/08/31 10804.69 10933.43
1988/09/30 10905.20 11060.12
1988/10/31 11017.51 11171.52
1988/11/30 10979.85 11144.92
1988/12/31 11013.75 11170.52
1989/01/31 11108.71 11260.31
1989/02/28 11128.94 11262.97
1989/03/31 11162.86 11308.53
1989/04/30 11305.05 11492.09
1989/05/31 11476.94 11655.36
1989/06/30 11669.70 11870.51
1989/07/31 11816.01 12047.42
1989/08/31 11786.44 11979.25
1989/09/30 11835.23 12049.75
1989/10/31 12030.75 12237.63
1989/11/30 12112.95 12347.03
1989/12/31 12171.89 12395.92
1990/01/31 12148.38 12408.89
1990/02/28 12203.50 12474.73
1990/03/31 12248.84 12514.30
1990/04/30 12274.83 12545.56
1990/05/31 12480.13 12739.43
1990/06/30 12569.93 12874.10
1990/07/31 12715.70 13030.06
1990/08/31 12696.40 13076.28
1990/09/30 12718.34 13174.38
1990/10/31 12686.74 13310.39
1990/11/30 12753.03 13440.41
1990/12/31 12875.84 13597.70
1991/01/31 12858.04 13720.74
1991/02/28 13005.94 13819.83
1991/03/31 13259.40 13920.26
1991/04/30 13440.26 14056.60
1991/05/31 13577.33 14144.39
1991/06/30 13627.13 14196.93
1991/07/31 13735.65 14321.63
1991/08/31 13966.33 14515.83
1991/09/30 14110.76 14672.12
1991/10/31 14274.25 14830.07
1991/11/30 14421.95 14980.05
1991/12/31 14681.71 15206.50
1992/01/31 14741.97 15190.88
1992/02/29 14869.87 15239.09
1992/03/31 14971.86 15235.77
1992/04/30 15053.28 15375.10
1992/05/31 15198.24 15519.09
1992/06/30 15340.04 15677.71
1992/07/31 15521.77 15861.60
1992/08/31 15657.60 15989.62
1992/09/30 15786.98 16140.93
1992/10/31 15675.28 16043.83
1992/11/30 15660.45 16021.22
1992/12/31 15766.32 16172.52
1993/01/31 16026.24 16345.11
1993/02/28 16205.10 16478.45
1993/03/31 16305.45 16531.99
1993/04/30 16385.55 16635.74
1993/05/31 16413.68 16597.83
1993/06/30 16592.27 16723.53
1993/07/31 16688.31 16761.77
1993/08/31 16871.74 16902.10
1993/09/30 16934.19 16956.64
1993/10/31 17042.35 16996.21
1993/11/30 17076.64 17001.20
1993/12/31 17205.78 17070.03
1994/01/31 17317.87 17178.77
1994/02/28 17167.25 17074.69
1994/03/31 16840.21 16986.90
1994/04/30 16711.00 16922.39
1994/05/31 16803.41 16945.33
1994/06/30 16648.63 16989.89
1994/07/31 16773.93 17144.52
1994/08/31 16842.75 17202.38
1994/09/30 16870.10 17164.14
1994/10/31 16861.65 17203.38
1994/11/30 16887.63 17131.22
1994/12/31 16501.52 17163.81
1995/01/31 16627.50 17399.57
1995/02/28 16802.82 17640.33
1995/03/31 16909.75 17740.42
1995/04/30 17073.04 17901.04
1995/05/31 17377.29 18210.96
1995/06/30 17481.72 18310.06
1995/07/31 17530.66 18383.21
1995/08/31 17641.76 18494.61
1995/09/30 17732.64 18586.06
1995/10/31 17849.12 18740.36
1995/11/30 18003.35 18901.64
1995/12/31 18121.98 19044.96
1996/01/31 18260.94 19207.90
1996/02/29 18209.83 19134.74
1996/03/31 18168.53 19120.78
1996/04/30 18186.32 19140.06
1996/05/31 18224.37 19184.29
1996/06/30 18342.58 19324.62
1996/07/31 18420.67 19399.77
1996/08/31 18478.41 19471.27
1996/09/30 18640.52 19649.51
1996/10/31 18828.91 19871.31
1996/11/30 18971.62 20020.28
1996/12/31 18987.36 20023.61
1997/01/31 19066.76 20120.38
1997/02/28 19115.88 20170.26
1997/03/31 19085.81 20154.63
1997/04/30 19251.43 20319.90
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Short-Term Bond Fund on April 30, 1987. As the chart shows, by
April 30, 1997, the value of the investment would have grown to $19,251 -
an 92.51% increase on the 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 $20,320 - a 103.20% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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,

1997 1996 1995 1994 1993

Dividend return 6.55% A 6.52% A 6.13% A 6.51% 8.00%

Capital appreciation return -0.69% 0.00% -3.96% -4.52% 0.85%

Total return 5.86% 6.52% 2.17% 1.99% 8.85%

Dividends per share A 4.49(cents) 27.37(cents) 55.65(cents)

Annualized dividend rate 6.33% 6.34% 6.40%

30-day annualized yield 6.09% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $8.63 over
the past one month, $8.70 over the past six months, and $8.70 over the past
one 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.

A NON-TAXABLE DIVIDENDS: DIVIDENDS PAID DURING 1997 OF APPROXIMATELY
0.5(CENTS) PER SHARE ARE EXPECTED TO BE A NON-TAXABLE RETURN OF CAPITAL.
DIVIDENDS PAID DURING 1996 AND 1995 OF APPROXIMATELY 5.5(CENTS) PER SHARE
AND 11.8(CENTS) PER SHARE, RESPECTIVELY, WERE A NON-TAXABLE RETURN OF
CAPITAL.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
A relatively favorable inflation
backdrop that steadied fears of
higher interest rates helped
spark an April rally that buoyed the
performance of the U.S. taxable
bond market for the 12 months
ended April 30, 1997. The
Lehman Brothers Aggregate Bond
Index - a broad measure of the
U.S. taxable bond market -
returned 7.09% over that period.
For much of the year, bonds
were affected by increasing
expectations of economic growth
and inflation. While responding to
mixed economic statistics, the
bias of the market was toward
higher rates. With interest rates
finishing the period slightly
higher than where they began, the
performance of most bonds
consisted almost entirely of
income returns as opposed to
price gains or losses. In his
February testimony before
Congress, Federal Reserve Board
Chairman Alan Greenspan
indicated that the Fed was
inclined to raise the rate banks
charge each other for overnight
loans - known as the fed funds
target rate - to head off inflation
that might be caused by a tight
labor market. On March 25, the
Fed followed through by raising
the target rate by 0.25% to 5.50%.
However, this move had largely
been priced into the market.
When producer and consumer
price indexes continued to offer a
favorable inflation outlook in April,
a market rally in all debt market
sectors ensued, helping to ease
much of the bond market's
negative price performance
posted earlier in the period.
NOTE TO SHAREHOLDERS: Andrew Dudley became Portfolio Manager of Fidelity
Short-Term Bond Fund on February 3, 1997.
Q. HOW DID THE FUND PERFORM, ANDY?
A. For the 12 months that ended April 30, 1997, the fund had a return of
5.86%. The Lehman Brothers 1-3 Year Government/Corporate Bond Index had a
return of 6.16% over the same period. The short investment grade debt funds
average, as tracked by Lipper Analytical Services, had a 12-month return of
5.80% as of April 30, 1997.
Q. CAN YOU DISCUSS THE INVESTMENT CLIMATE OVER THE PAST YEAR?
A. The bond market saw several shifts in sentiment during the period, due
mostly to uncertainty about the direction of the economy. In late March,
the Federal Reserve Board raised interest rates by a quarter of a
percentage point. This cooled the bond market down some, but as the period
came to a close, the market was showing signs of rebounding. Fidelity's
approach of de-emphasizing interest rate anticipation strategies is most
effective in this type of changing environment.
Q. WHAT ARE SPREAD SECTORS AND HOW DID THEY CONTRIBUTE TO THE FUND'S
PERFORMANCE?
A. Spread sectors are segments of the fixed-income market that can offer
attractive yield spreads, or yield advantages, over comparable Treasury
securities. The spread sectors I monitor most closely include corporate
bonds, mortgage-backed bonds and asset-backed bonds. Corporates continued
to be the biggest position in the fund and performed well thanks to a
beneficial economic climate of moderate growth and low inflation.
Asset-backed bonds also performed well under these conditions. In the
mortgage area, the fund's emphasis on commercial mortgage-backed securities
and seasoned mortgage pass-throughs both worked out favorably. Commercial
mortgages in particular have gained broader acceptance in the market place.
Q. WHAT SORT OF ALLOCATION STRATEGY DID YOU FOLLOW?
A. Corporate issues - not including asset-backed securities - accounted for
approximately 45% of the fund at the end of the period, while asset-backed
and mortgage securities made up around 18% and 10%, respectively. The
remainder of the fund's investments were mostly in Treasuries and agencies.
The fund's significant position in corporate bonds reflects the fact that
economic fundamentals remained stable despite the potential for Fed-induced
market volatility; I continued to find attractive opportunities amidst the
market's turbulence. Unless we
see a severe economic downturn, this allocation most likely will remain
consistent for the foreseeable future.
Q. AT THE CLOSE OF THE PERIOD, 6.3% OF THE FUND'S INVESTMENTS WERE RATED BA
BY MOODY'S. CAN YOU COMMENT ON THE FUND'S QUALITY DISTRIBUTION?
A. Those securities in the portfolio rated below investment-grade by
Moody's have, at a minimum, a higher BBB investment-grade rating from at
least one of the other three major rating agencies. We would agree with the
higher-rated assessment. In terms of the fund's quality distribution, I
have continued to maintain an overall emphasis on higher quality.
Approximately two-thirds of the securities in the portfolio are rated A or
better.
Q. THE FUND'S FOREIGN INVESTMENTS HAVE RISEN FROM 1% TO 4.8% IN THE LAST
SIX MONTHS. CAN YOU DESCRIBE THE NATURE OF THESE INVESTMENTS?
A. These securities are better known as "yankee" and "Euro" bonds. They are
dollar-denominated, so there is no direct currency risk, but they are
backed by foreign issuers. Typically, these securities offer a yield
advantage versus comparably rated domestic securities. I increased the
exposure to this sector as its relative attractiveness improved. It's
important to remember that foreign investments may entail greater risks
than U.S.-based investments. However, these securities provide a very good
way of diversifying the risk within the fund's corporate bond holdings.
Q. WHAT'S YOUR OUTLOOK?
A. The market may show its vulnerability in the near-term. While these
difficulties could continue, depending largely on how aggressively the Fed
chooses to set monetary policy, I'll continue to scour the spread sectors
for opportunities. I think our research capabilities at Fidelity will allow
us to continue to uncover some good buys.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

QUALITY DIVERSIFICATION AS OF APRIL 30, 1997
(MOODY'S RATINGS) % % OF FUND'S
O INVESTMENTS
F 6 MONTHS AGO
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S

Aaa 4 57.3
4
.
0

Aa 5 2.4
.
3

A 1 16.1
9
.
0

Baa 2 16.9
1
.
5

Ba 6 3.6
.
3

Not Rated 1 1.9
.
3

Years 2.1 2.2

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 APRIL 30, 1997
6 MONTHS AGO

Years 1.7 1.7

Corporate bonds 63.4%
U.S. government
and agency
obligations 21.5%
Mortgage-backed
securities 10.2%
Short-term
investments 2.6%
Other 2.3%
Corporate bonds 50.4%
U.S. government
and agency
obligations 36.5%
Mortgage-backed
securities 10.4%
Short-term
investments 1.8%
Other 0.9%
Row: 1, Col: 1, Value: 2.3
Row: 1, Col: 2, Value: 2.6
Row: 1, Col: 3, Value: 10.2
Row: 1, Col: 4, Value: 21.5
Row: 1, Col: 5, Value: 63.4
Row: 1, Col: 1, Value: 1.1
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 10.4
Row: 1, Col: 4, Value: 36.5
Row: 1, Col: 5, Value: 50.4

* FOREIGN
INVESTMENTS 4.8%
** FOREIGN
INVESTMENTS 1.0%
INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 63.4%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
BASIC INDUSTRIES - 1.0%
CHEMICALS & PLASTICS - 1.0%
Methanex Corp. yankee 8 7/8%, 11/15/01 A2 $ 8,440 $ 8,960
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
General Motors Corp. 9 5/8%, 12/1/00 A3 2,990 3,248
ENERGY - 2.3%
OIL & GAS - 2.3%
Occidental Petroleum Corp.:
5.85%, 11/9/98 Baa3 2,800 2,771
5.90%, 11/9/98 Baa3 2,310 2,287
6.09%, 11/29/99 Baa3 1,570 1,541
Pennzoil Co. 9 5/8%, 11/15/99 Baa3 1,900 2,022
Ras Laffan Liquid Natural Gas Co. Ltd. yankee
7.628%, 9/15/06 (c) A3 4,500 4,487
Tosco Corp. 7%, 7/15/00 Baa2 7,050 7,062
USX Corp.:
8 7/8%, 9/15/97 Baa3 1,000 1,010
6 3/8%, 7/15/98 Baa3 490 489
21,669
FINANCE - 38.6%
ASSET-BACKED SECURITIES - 18.1%
Boatmens Auto Trust 6.35%, 10/15/01 A2 1,375 1,369
CPS Auto Grantor Trust 6.70%, 2/15/02 Aaa 1,777 1,779
Capital Equipment Receivables Trust
6.57%, 3/15/01 Aa3 2,230 2,217
Case Equipment Loan Trust:
6.15%, 9/15/02 Aaa 14,229 14,313
6.45%, 9/15/02 A3 3,000 2,976
5.85%, 2/15/03 A3 1,770 1,722
Caterpillar Financial Asset Trust 6.55%, 5/22/02 A3 1,280 1,276
Chase Manhattan Grantor Trust 5.90%,
11/15/01 Aaa 5,911 5,891
Chevy Chase Auto Receivables Trust 5.80%,
6/15/02 Aaa 3,769 3,747
Discover Card Master Trust I 6.90%, 2/16/00 A2 4,030 4,045
Discover Card Trust 7 1/2%, 6/16/00 A2 1,650 1,665
Fidelity Funding Auto Trust 6.99%, 11/15/02 (c) Aaa 1,960 1,964
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa 6,502 6,476
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
ASSET-BACKED SECURITIES - CONTINUED
General Motors Acceptance Corp. Grantor Trust
1995-A, 7.15%, 3/15/00 Aaa $ 4,558 $ 4,594
Green Tree Financial Corp.:
5 1/2%, 1/31/00 Aaa 849 837
5.80%, 2/15/27 Aaa 7,800 7,746
6.10%, 4/15/27 Aaa 6,427 6,359
6.45%, 5/15/27 Aaa 3,460 3,450
6 1/2%, 6/15/27 Aaa 2,170 2,164
6.65%, 7/15/27 Aaa 4,790 4,808
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 440 439
Norwest Automobile Trust 6.30%, 5/15/03 A2 3,375 3,329
Onyx Acceptance Grantor Trust 6.20%, 6/15/03 Aaa 6,151 6,121
Olympic Automobile Receivables Trust:
6.40%, 9/15/01 Aaa 3,800 3,796
6 1/8%, 11/15/04 Aaa 3,000 3,015
Premier Auto Trust:
4.95%, 2/2/99 A2 134 133
8.05%, 4/4/00 Aaa 13,930 14,163
6%, 5/6/00 Aaa 2,900 2,889
6.35%, 7/6/00 A3 4,610 4,577
Reliance Auto Receivables Corp., Inc. 6.10%,
7/15/02 (c) Aaa 4,139 4,117
SCFC Recreational Vehicle Loan Trust 7 1/4%,
9/15/06 Aaa 385 385
Standard Credit Card Master Trust I:
7.65%, 2/15/00 A2 1,800 1,831
6 3/4%, 6/7/00 Aaa 10,700 10,754
TMS Auto Grantor Trust 5.90%, 9/15/02 Aaa 1,367 1,360
Toyota Auto Receivables Grantor Trust 6.15%,
1/15/99 Baa2 845 842
Union Federal Savings Bank Grantor Trust:
6.975%, 7/10/00 Baa2 610 611
7.275%, 10/10/00 Baa2 629 633
8.20%, 1/10/01 Baa2 615 621
WFS Financial Owner Trust:
6.05%, 6/1/00 Aaa 8,380 8,367
7.05%, 11/20/03 Aaa 7,410 7,397
6.90%, 12/20/03 Aaa 5,020 5,022
Western Financial Grantor Trust:
6.20%, 2/1/02 Aaa 2,132 2,120
5 7/8%, 3/1/02 Aaa 4,833 4,846
166,766
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
BANKS - 9.6%
Banc One Corp. 6.70%, 3/24/00 Aa3 $ 3,700 $ 3,699
BankAmerica Corp. 6%, 7/15/97 A1 1,000 1,001
BanPonce Financial Corp.:
6.34%, 3/29/99 A3 80 79
7.65%, 5/3/00 A3 2,790 2,818
6.88%, 6/16/00 A3 1,450 1,447
BanPonce Corp.:
5 3/4%, 3/1/99 A3 2,190 2,149
6.378%, 4/8/99 A3 2,580 2,555
6.488%, 3/3/00 A3 2,300 2,275
Capital One Bank 6.66%, 8/17/98 Baa3 6,940 6,952
Capital One 6.42%, 11/12/99 Baa3 6,000 5,949
Chase Manhattan Corp.:
6 5/8%, 1/15/98 Aa3 1,000 1,003
8%, 6/15/99 A1 1,000 1,027
Comerica, Inc. 9 3/4%, 5/1/99 A3 1,890 1,998
Corporacion Andina De Fomento yankee
7 3/8%, 7/21/00 Baa2 1,950 1,973
First Chicago Corp. 9 7/8%, 7/1/99 A2 1,000 1,065
First Fidelity Bancorp. 8 1/2%, 4/1/98 A2 2,200 2,239
First Interstate Bancorp 8 5/8%, 4/1/99 A2 1,000 1,036
First USA Bank:
6 1/8%, 10/30/97 Baa3 200 200
8.20%, 2/15/98 Baa3 1,000 1,013
6 1/4%, 10/9/98 Baa2 5,000 4,985
5 3/4%, 1/15/99 Baa3 9,000 8,856
6 1/2%, 12/23/99 Baa3 5,400 5,340
Kansallis-Osake-Pankki
yankee 9 3/4%, 12/15/98 A3 2,220 2,324
Key Bank NA 6%, 10/7/98 Aa3 3,250 3,239
KeyCorp 8.40%, 4/1/99 A2 2,500 2,576
Korea Development Bank yankee
6 1/4%, 5/1/00 A1 7,558 7,443
Mellon Financial Co. 6.30%, 6/1/00 A2 1,000 984
NationsBank Corp. 5 1/8%, 9/15/98 A1 1,000 983
Union Planters National Bank:
6.29%, 8/20/98 A3 5,350 5,337
6.53%, 8/20/99 A3 5,820 5,813
88,358
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 10.3%
AT&T Capital Corp.:
6.02%, 12/4/98 Baa3 $ 7,310 $ 7,250
6.16%, 12/3/99 Baa3 5,690 5,598
Aristar, Inc. 7 1/2%, 7/1/99 Baa1 5,730 5,826
Associates Corp. of North America:
6 1/2%, 9/9/98 Aa3 10,050 10,065
6 3/8%, 8/15/99 Aa3 3,300 3,278
CIT Group Holdings, Inc. 6 1/4%, 9/30/99 Aa3 2,000 1,983
Chrysler Financial Corp.:
6 1/2%, 5/27/97 A3 3,000 3,001
8.42%, 2/1/99 A3 2,500 2,580
6 3/8%, 1/28/00 A3 5,460 5,417
Edison Mission Energy Funding Corp.
6.77%, 9/15/03 (c) Baa1 6,311 6,245
Finova Capital Corp. 6.14%, 11/2/98 Baa1 1,650 1,642
Ford Capital BV yankee 9 3/8%, 1/1/98 A1 150 153
General Motors Acceptance Corp.:
5 3/8%, 3/9/98 A3 12,810 12,716
6.40%, 6/8/98 A3 1,000 1,002
5.45%, 3/1/99 A3 8,070 7,904
6 3/8%, 4/26/99 A3 1,600 1,594
Greyhound Financial Corp.:
6.94%, 1/28/98 Baa2 4,000 4,016
6.95%, 1/28/98 Baa2 2,000 2,008
Household Finance Corp. 7.55%, 3/16/98 A2 560 565
MCN Investment Corp. 5.84%, 2/1/99 Baa2 3,640 3,598
North American Mortgage Co. 5.8%, 11/2/98 Baa2 2,250 2,230
Northwest Financial, Inc. 6%, 8/15/97 Aa3 1,100 1,101
Sears, Roebuck Acceptance Corp.
6.17%, 1/29/99 A2 5,000 4,973
Union Acceptance Corp. 7.075%, 7/10/02 Baa2 856 854
95,599
SAVINGS & LOANS - 0.6%
Golden West Financial Corp.
10 1/4%, 5/15/97 A3 5,350 5,355
TOTAL FINANCE 356,078
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 0.5%
POLLUTION CONTROL - 0.5%
WMX Technologies, Inc. 6 1/4%, 10/15/00 A2 $ 4,435 $ 4,344
MEDIA & LEISURE - 5.1%
BROADCASTING - 3.4%
Tele-Communications, Inc. 7 3/8%, 2/15/00 Ba1 6,500 6,520
Time Warner, Inc.:
7.45%, 2/1/98 Ba1 5,115 5,143
7.95%, 2/1/00 Ba1 19,475 19,949
31,612
LEISURE DURABLES & TOYS - 1.7%
Mattel, Inc. 6 7/8%, 8/1/97 A3 15,150 15,192
TOTAL MEDIA & LEISURE 46,804
NONDURABLES - 3.2%
FOODS - 1.7%
Dole Food, Inc. 6 3/4%, 7/15/00 Baa3 5,010 4,983
Nabisco, Inc. 8%, 1/15/00 Baa2 10,365 10,648
15,631
TOBACCO - 1.5%
Philip Morris Companies, Inc.:
7 3/8%, 2/15/99 A2 1,900 1,922
7 1/8%, 12/1/99 A2 5,100 5,132
7 1/4%, 9/15/01 A2 4,300 4,295
RJR Nabisco, Inc. 8%, 1/15/00 Baa3 2,987 3,023
14,372
TOTAL NONDURABLES 30,003
RETAIL & WHOLESALE - 1.8%
GENERAL MERCHANDISE STORES - 0.8%
Dayton Hudson Corp. 10%, 12/1/00 Baa1 2,380 2,598
Penney (J.C.), Inc. 6.95%, 4/1/00 A2 3,400 3,413
Sears, Roebuck & Co. 5.83%, 7/27/98 A2 1,040 1,034
7,045
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 1.0%
American Stores Co.:
8 1/4%, 4/21/98 Baa3 $ 4,700 $ 4,769
8.44%, 4/24/98 Baa3 4,700 4,779
9,548
TOTAL RETAIL & WHOLESALE 16,593
TECHNOLOGY - 3.4%
COMPUTERS & OFFICE EQUIPMENT - 3.4%
Comdisco, Inc.:
6.70%, 7/01/98 Baa1 3,400 3,415
6.59%, 9/01/98 Baa1 2,740 2,746
6.29%, 10/22/98 Baa1 2,710 2,705
5 3/4%, 1/19/99 Baa2 1,090 1,076
5.76%, 1/19/99 Baa2 4,000 3,949
6.86%, 7/29/99 Baa1 8,210 8,223
6.55%, 2/4/00 Baa1 9,400 9,349
31,463
TRANSPORTATION - 2.0%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 13,100 13,194
9 1/2%, 7/15/98 Baa3 2,280 2,359
Delta Air Lines, Inc. 9 7/8%, 1/1/98 Baa3 3,050 3,121
18,674
UTILITIES - 5.1%
CELLULAR - 0.6%
360 Degrees Communications Co.
7 1/8%, 3/1/03 Ba1 6,140 6,033
ELECTRIC UTILITY - 1.6%
Indiana Michigan Power Co. 6.40%, 3/1/00 Baa1 5,500 5,419
Ohio Edison Co. 8 3/4%, 2/15/98 Baa2 2,820 2,872
United Illuminating Co. 7 3/8%, 1/15/98 Baa3 6,550 6,603
14,894
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
UTILITIES - CONTINUED
GAS - 1.1%
Arkla, Inc. 8 7/8%, 7/15/99 Baa3 $ 2,500 $ 2,612
Florida Gas Transmission Co. 7 3/4%,
11/1/97 (c) Baa2 3,570 3,596
Mitchell Energy & Development Corp.
8%, 7/15/99 Ba3 3,590 3,664
9,872
TELEPHONE SERVICES - 1.8%
MFS Communications, Inc. (b):
0%, 1/15/04 Ba3 3,825 3,462
0%, 1/15/06 Ba3 2,550 1,925
WorldCom, Inc. 7.55%, 4/1/04 Ba1 11,200 11,180
16,567
TOTAL UTILITIES 47,366
TOTAL NONCONVERTIBLE BONDS
(Cost $588,220) 585,202
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 21.5%
U.S. TREASURY OBLIGATIONS - 18.7%
8 7/8%, 11/15/97 Aaa 1,692 1,719
5 7/8%, 4/30/98 Aaa 21,700 21,680
9%, 5/15/98 Aaa 12,930 13,316
9 1/4%, 8/15/98 Aaa 26,500 27,519
8 7/8%, 2/15/99 Aaa 24,350 25,423
8%, 8/15/99 Aaa 23,860 24,684
7 3/4%, 12/31/99 Aaa 44,076 45,508
6 7/8%, 3/31/00 Aaa 11,801 11,937
5 3/4% 10/31/00 Aaa 800 781
172,567
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.8%
Federal National Mortgage Association
4.95%, 9/30/98 Aaa 9,250 9,094
Guaranteed Export Trust Certificates (assets of
Trust guaranteed by U.S. Government
through Export-Import Bank) Series 1994-C,
6.61%, 9/15/99 Aaa 451 454
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Government Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Defense Security Assistance Agency):
Class T-3, 9 5/8%, 5/15/02 Aaa $ 1,370 $ 1,445
Class 1-C, 9 1/4%, 11/15/01 Aaa 4,585 4,833
Israel Export Trust Certificates
(assets of Trust guaranteed by U.S. Government
through Export-Import Bank) Series 1994-1,
6.88%, 1/26/03 Aaa 1,864 1,868
Private Export Funding Corp. secured
6.86%, 4/30/04 Aaa 1,201 1,201
State of Israel (guaranteed by U.S. Government
through Agency for International Development)
7 3/4%, 11/15/99 Aaa 6,955 7,143
26,038
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $201,626) 198,605
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 2.2%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.4%
7%, 5/1/01 to 8/1/01 Aaa 3,387 3,399
12%, 11/1/19 Aaa 425 481
3,880
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.2%
11 1/2% ,11/1/15 Aaa 1,432 1,610
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.6%
11%, 12/15/09 to 8/15/20 Aaa 7,903 8,794
11 1/2%, 4/15/13 to 8/15/13 Aaa 2,510 2,837
12%, 2/15/16 Aaa 2,618 3,011
14,642
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $20,359) 20,132
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.6%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
U.S. GOVERNMENT AGENCY - 0.4%
Federal National Mortgage Association:
planned amortization class Series 155-PC,
5 1/4%, 3/25/13 Aaa $ 963 $ 957
Series 1994-M3 Class A, 7.71%, 4/1/06 Aaa 2,532 2,561
3,518
PRIVATE SPONSOR - 0.2%
GE Capital Mortgage Services, Inc. planned
amortization class Series 1994-2 Class A-4,
6%, 1/25/09 Aaa 2,320 2,267
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $5,808) 5,785
COMMERCIAL MORTGAGE SECURITIES - 7.4%
BKB Commercial Mortgage Trust Series 1997-C1
Class B, 7.218%, 2/25/43 (c)(d) AA 5,426 5,438
Blackrock Capital Funding LLC Series 1996
Class C2, 7.5134%, 11/16/26 (c)(d) AAA 982 992
CBM Funding Corp. sequential pay Series 1996-1:
Class A-1, 7.55%, 7/1/99 AA 435 440
Class A-2, 6.88%, 7/1/02 AA 2,170 2,170
CS First Boston Mortgage Securities Corp.:
floater Series 1994-CFB1 Class A-1,
5.9239%, 1/25/28 (d) Aaa 1,884 1,883
Series 1995-AEWI Class A-1,
6.665%, 11/25/27 AAA 2,098 2,095
Equitable Life Assurance Society of the United States
floater Series 174 Class D-2, 6.7375%,
5/15/03 (d)(c) Baa2 2,300 2,300
Federal Deposit Insurance Corp.:
Series 1994-C1 Class II-A2, 7.85%, 9/25/25 Aaa 3,669 3,709
sequential pay Series 1996-C1 Class 1A,
6 3/4%, 5/25/26 Aaa 7,803 7,772
Kidder Peabody Acceptance Corp. sequential pay
Series 1993-M1 Class A-2, 7.15%, 4/25/25 Aa2 2,400 2,402
Meritor Mortgage Security Corp. Series 1987-1
Class A-3, 9.40%, 6/1/99 Baa 268 268
Nomura Asset Securities Corp. floater
Series 1994-MD-II Class A-6,
6.9525%, 7/4/03 (d) - 2,808 2,834
Oregon Commercial Mortgage, Inc.
Series 1995-1 Class A, 7.15%, 6/25/23 (c) AAA 5,293 5,292
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (A) AMOUNT (000S) (000S)
Resolution Trust Corp.:
floater:
Series 1993-C2 Class A-2,
6.62%, 3/25/25 (d) AAA $ 4,372 $ 4,381
Series 1994-C1 Class A-3,
6.30%, 6/25/26 (d) AAA 4,442 4,447
Series 1995-C1 Class A-4A, 6 1/4%, 2/25/27 Aaa 879 878
Series 1995-C2 Class A-1B, 6 1/4%, 5/25/27 Aaa 3,243 3,228
SC Finance Corp. floater 7.2375%, 8/1/04 (c)(d) - 9,400 9,377
Structured Asset Securities Corp.:
sequential pay:
Series 1993-C1 Class A-1A,
6.60%, 10/25/24 AA+ 683 681
Series 1995-C4 Class A-1A,
6.90%, 6/25/26 AAA 1,907 1,905
Series 1996 Class A-1B, 5.751%, 2/25/28 AAA 468 466
Series 1996 Class A-1C, 5.944%, 2/25/28 AAA 3,607 3,554
Series 1996-C3 Class A,
6 3/4%, 6/25/30 (c) AAA 2,368 2,352
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $69,098) 68,864
FOREIGN GOVERNMENT OBLIGATIONS (E) - 1.2%
Israeli State euro 6 3/8%, 12/19/01 A3 4,500 4,365
Ontario Province yankee 15 1/4%, 8/31/12 Aa3 990 1,075
Slovenian Republic euro 7%, 8/6/01 A3 5,700 5,698
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $11,292) 11,138
CERTIFICATES OF DEPOSIT - 1.1%
Canadian Imperial Bank (New York Branch)
yankee 6.475%, 1/24/00
(Cost $9,813) Aa3 9,800 9,737
CASH EQUIVALENTS - 2.6%
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.37%, dated
4/30/97 due 5/1/97 $ 23,691 $ 23,687
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $929,903) $ 923,150
LEGEND
6. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
7. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
8. 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 $46,160,000 or 5.0% of net
assets.
9. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
10. For foreign government obligations not 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 64.6% AAA, AA, A 61.4%
Baa 21.6% BBB 29.8%
Ba 6.3% BB 2.0%
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 1.3%.
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $930,311,000. Net unrealized depreciation aggregated
$7,161,000, of which $1,381,000 related to appreciated investment
securities and $8,542,000 related to depreciated investment securities.
At April 30, 1997, the fund had a capital loss carryforward of
approximately $165,877,000 of which $7,352,000, $2,771,000, $2,248,000,
$18,091,000, $55,095,000 $74,079,000 and $6,241,000 will expire on April
30, 1998, 1999, 2000, 2002, 2003, 2004 and 2005, respectively. Of the loss
carryforwards expiring in 2000, 2002, 2003, $2,248,000, $13,718,000 and
$15,805,000, respectively, were acquired in the merger and are available to
offset future capital gains of the fund to the extent provided by
regulations (see Note 6 of Notes to Financial Statements).
The fund intends to elect to defer to its fiscal year ending April 30, 1998
approximately $5,631,000 of losses recognized during the period November 1,
1996 to April 30, 1997.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 923,150
agreements of $23,687) (cost $929,903) -
See accompanying schedule

Cash 45

Receivable for investments sold 6,358

Interest receivable 12,616

Other receivables 10

TOTAL ASSETS 942,179

LIABILITIES

Payable for investments purchased $ 17,686

Payable for fund shares redeemed 1,513

Distributions payable 493

Accrued management fee 339

Other payables and accrued expenses 258

TOTAL LIABILITIES 20,289

NET ASSETS $ 921,890

Net Assets consist of:

Paid in capital $ 1,105,353

Distributions in excess of net investment income (4,781)

Accumulated undistributed net realized gain (loss) on (171,929)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (6,753)
investments

NET ASSETS, for 106,491 shares outstanding $ 921,890

NET ASSET VALUE, offering price and redemption price per $8.66
share ($921,890 (divided by) 106,491 shares)

</TABLE>

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 70,130
Interest

EXPENSES

Management fee $ 4,374

Transfer agent fees 2,108

Accounting fees and expenses 309

Non-interested trustees' compensation 26

Custodian fees and expenses 39

Registration fees 43

Audit 50

Legal 2

Total expenses before reductions 6,951

Expense reductions (31) 6,920

NET INVESTMENT INCOME 63,210

REALIZED AND UNREALIZED GAIN (LOSS) (10,878)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) 3,881
on investment securities

NET GAIN (LOSS) (6,997)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 56,213
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 63,210 $ 77,817
Net investment income

Net realized gain (loss) (10,878) 6,122

Change in net unrealized appreciation (depreciation) 3,881 (4,599)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 56,213 79,340
FROM OPERATIONS

Distributions to shareholders (62,498) (69,491)
From net investment income

Return of capital (Note 1) (536) (7,635)

TOTAL DISTRIBUTIONS (63,034) (77,126)

Share transactions 305,603 352,679
Net proceeds from sales of shares

Net asset value of shares issued in exchange for 86,310 -
the net assets of Fidelity Short-Term World Bond
Fund (Note 6)

Reinvestment of distributions 56,510 68,318

Cost of shares redeemed (568,209) (678,234)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (119,786) (257,237)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (126,607) (255,023)

NET ASSETS

Beginning of period 1,048,497 1,303,520

End of period (including distributions in excess $ 921,890 $ 1,048,497
of net investment income of $4,781 and
$6,111, respectively)

OTHER INFORMATION
Shares

Sold 35,124 39,939

Issued in exchange for the shares of Fidelity 9,875 -
Short-Term
World Bond Fund (Note 6)

Issued in reinvestment of distributions 6,498 7,738

Redeemed (65,293) (76,899)

Net increase (decrease) (13,796) (29,222)

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED APRIL 30,

1997 1996 1995 1994 D 1993

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning $ 8.720 $ 8.720 $ 9.080 $ 9.510 $ 9.430
of period

Income from Investment .558 B .579 .344 .588 .744
Operations
Net investment income

Net realized and unrealized (.061) (.020) C (.156) (.392) .063
gain (loss)

Total from investment operations .497 .559 .188 .196 .807

Less Distributions

From net investment income (.552) (.504) (.430) (.592) (.727)

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

Return of capital (Note 1) (.005) (.055) (.118) - -

Total distributions (.557) (.559) (.548) (.626) (.727)

Net asset value, end of period $ 8.660 $ 8.720 $ 8.720 $ 9.080 $ 9.510

TOTAL RETURN A 5.86% 6.52% 2.17% 1.99% 8.85%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 922 $ 1,048 $ 1,304 $ 1,962 $ 1,990
(in millions)

Ratio of expenses to average .70% .69% .69% .80% .77%
net assets

Ratio of expenses to average net .70% .68% .69% .80% .77%
assets after expense reductions E

Ratio of net investment income to 6.41% 6.37% 6.37% 6.70% 7.68%
average net assets

Portfolio turnover rate 104% 151% 113% 73% 63%
F

</TABLE>

E THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
F NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
H EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
J THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN THE
MERGER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

6. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Short-Term 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 financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the 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. 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 with remaining maturities of sixty days
or less for which quotations are not readily available are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, 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.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
For the periods ended April 30, 1997 and April 30, 1996, the fund's
distributions exceeded the aggregate amount of taxable income and net
realized gains resulting in a return of capital. (The tax treatment of
distributions for the 1997 calendar year will be reported to shareholders
prior to February 1, 1998.
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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
8. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,005,653,000 and $1,203,215,000, respectively, of which U.S.
government and government agency obligations aggregated $632,363,000 and
$880,717,000, 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 .1100% to .3700% for the period. In the event
that these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted in
the same or a lower management fee. The annual individual fund fee rate is
.30%. For the period, the management fee was equivalent to an annual rate
of .44% of average net assets.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, is the fund's transfer, dividend disbursing and shareholder servicing
agent. FSC receives account fees and asset-based fees that vary according
to account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .21%
of average net assets.
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.
10. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its transfer agent whereby
credits realized as a result of uninvested cash balances were used to
reduce a portion of the fund's expenses. During the period, the fund's
transfer agent fees were reduced by $31,000, under this arrangement.
11. MERGER INFORMATION.
On October 31, 1996, the fund acquired all of the assets and assumed all of
the liabilities of Fidelity Short-Term World Bond Fund. The acquisition,
which was approved by the shareholders of Fidelity Short-Term World Bond
Fund on October 11, 1996, was accomplished by an exchange of 9,875,000
shares of the fund for the 9,626,000 shares then outstanding (each valued
at $8.97) of Fidelity Short-Term World Bond Fund. Based on the opinion of
fund counsel, the reorganization qualifies as a tax-free reorganization for
federal income tax purposes with no gain or loss recognized to the funds or
their shareholders. Fidelity Short-Term World Bond Fund's net assets,
including $190,000 of unrealized depreciation, were combined with the fund
for total net assets after the acquisition of $1,009,513,000.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Fidelity Short-Term Bond Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Fidelity Short-Term Bond Fund, including the
schedule of portfolio investments, as of April 30, 1997, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Fidelity Short-Term Bond Fund as of April
30, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 6, 1997
DISTRIBUTIONS

A total of 35.10% of the dividends distributed 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 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
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
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
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
New Markets Income
Short-Intermediate Government
Short-Term Bond
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Short-Intermediate Government
Spartan Short-Term Bond
Target Timeline 1999, 2001 & 2003
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE

(registered trademark)

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

GOVERNMENT INCOME
FUND
ANNUAL REPORT
APRIL 30, 1997
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 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 20 Notes to the financial statements.

REPORT OF INDEPENDENT 23 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 24

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value), and the effect of the $5
account closeout fee on an average-sized account. You can also look at the
fund's income, as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, the total returns and
dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Government Income 6.25% 35.41% 97.02%

Salomon Brothers Treasury/Agency Index 6.60% 41.91% n/a

General U.S. Government Funds Average 5.79% 35.54% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years and 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, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Salomon Brothers Treasury/Agency Index - a market-capitalization weighted
index of U.S. Treasury and U.S. government agency securities with
fixed-rate coupons and weighted average lives of at least one year. To
measure how the fund's performance stacked up against its peers, you can
compare it to the general U.S. government funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past one year average represents a peer group
of 175 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Government Income 6.25% 6.25% 8.44%

Salomon Brothers Treasury/Agency Index 6.60% 7.25% n/a

General U.S. Government Funds Average 5.79% 6.24% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking an arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER LIFE OF FUND
Spartan Govern Salomon Treasury/Agency
00453 SB022
1988/12/31 10000.00 10000.00
1989/01/31 10175.40 10134.27
1989/02/28 10097.78 10056.19
1989/03/31 10104.09 10115.66
1989/04/30 10313.82 10305.03
1989/05/31 10606.35 10567.01
1989/06/30 10945.29 10924.95
1989/07/31 11196.70 11152.26
1989/08/31 10999.20 10963.62
1989/09/30 11064.30 11013.97
1989/10/31 11349.30 11300.03
1989/11/30 11477.32 11406.57
1989/12/31 11522.54 11423.72
1990/01/31 11374.73 11266.46
1990/02/28 11423.41 11275.95
1990/03/31 11432.64 11287.26
1990/04/30 11290.09 11192.03
1990/05/31 11644.08 11492.68
1990/06/30 11829.42 11675.85
1990/07/31 12017.08 11830.92
1990/08/31 11838.33 11659.79
1990/09/30 11934.42 11782.76
1990/10/31 12100.99 11976.14
1990/11/30 12373.83 12233.01
1990/12/31 12578.78 12426.75
1991/01/31 12724.51 12558.47
1991/02/28 12819.09 12611.74
1991/03/31 12879.73 12680.70
1991/04/30 13014.49 12831.76
1991/05/31 13078.93 12876.64
1991/06/30 13080.97 12868.25
1991/07/31 13251.79 13030.61
1991/08/31 13535.40 13320.68
1991/09/30 13808.89 13608.93
1991/10/31 13957.32 13714.01
1991/11/30 14056.63 13856.68
1991/12/31 14478.81 14332.10
1992/01/31 14300.45 14110.26
1992/02/29 14396.79 14166.82
1992/03/31 14350.80 14081.44
1992/04/30 14452.94 14182.14
1992/05/31 14693.76 14428.80
1992/06/30 14881.82 14638.60
1992/07/31 15120.94 15001.64
1992/08/31 15198.57 15155.62
1992/09/30 15326.07 15365.05
1992/10/31 15148.13 15142.12
1992/11/30 15271.79 15114.39
1992/12/31 15509.70 15369.80
1993/01/31 15678.96 15714.60
1993/02/28 15894.57 16021.09
1993/03/31 15936.89 16064.14
1993/04/30 16060.25 16202.07
1993/05/31 16126.36 16177.62
1993/06/30 16393.88 16540.66
1993/07/31 16488.97 16642.46
1993/08/31 16710.04 17012.44
1993/09/30 16688.57 17087.61
1993/10/31 16720.09 17132.85
1993/11/30 16522.81 16944.58
1993/12/31 16648.09 17020.10
1994/01/31 16896.96 17253.99
1994/02/28 16548.56 16894.95
1994/03/31 16104.37 16501.62
1994/04/30 15876.77 16374.65
1994/05/31 15892.09 16358.96
1994/06/30 15850.93 16325.39
1994/07/31 16166.65 16610.36
1994/08/31 16192.46 16614.73
1994/09/30 15955.78 16381.95
1994/10/31 15947.83 16365.53
1994/11/30 15923.85 16329.40
1994/12/31 16051.03 16441.78
1995/01/31 16365.74 16763.97
1995/02/28 16727.41 17115.34
1995/03/31 16810.12 17217.13
1995/04/30 17039.33 17438.98
1995/05/31 17682.39 18154.12
1995/06/30 17826.75 18291.68
1995/07/31 17766.76 18228.19
1995/08/31 17969.09 18436.53
1995/09/30 18151.91 18602.91
1995/10/31 18441.89 18892.98
1995/11/30 18694.17 19198.74
1995/12/31 18967.41 19464.74
1996/01/31 19066.72 19588.06
1996/02/29 18698.76 19197.29
1996/03/31 18551.13 19028.35
1996/04/30 18420.29 18879.12
1996/05/31 18400.33 18874.74
1996/06/30 18612.90 19112.64
1996/07/31 18662.12 19155.33
1996/08/31 18615.75 19115.55
1996/09/30 18922.61 19433.36
1996/10/31 19328.85 19874.12
1996/11/30 19659.33 20205.42
1996/12/31 19462.38 20001.46
1997/01/31 19473.93 20034.66
1997/02/28 19494.31 20046.70
1997/03/31 19311.92 19851.50
1997/04/30 19567.52 20125.88
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Government Income Fund on December 31, 1988, shortly
after the fund started. As the chart shows, by April 30, 1997, the value of
the investment would have grown to $19,568 - a 95.68% increase on the
initial investment and includes the effect of the $5 account closeout fee.
For comparison, look at how the Salomon Brothers Treasury/Agency Index did
over the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $20,126 - a 101.26%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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,

1997 1996 1995 1994 1993

Dividend return 6.75% 6.69% 7.82% 5.09% 6.81%

Capital appreciation return -0.50% 1.41% -0.51% -6.24% 4.30%

Total return 6.25% 8.10% 7.31% -1.15% 11.11%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains paid
by the fund are reinvested. Capital appreciation and total returns include
the effect of the $5 account closeout fee on an average-sized account.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.44(cents) 32.77(cents) 66.50(cents)

Annualized dividend rate 6.64% 6.52% 6.58%

30-day annualized yield 6.36% - -

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 $9.97 over
the past one month, $10.14 over the past six months, and $10.10 over the
past one 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 Fidelity had not reimbursed certain fund expenses the
yield would have been 6.31%.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
A relatively favorable inflation
backdrop that steadied fears of
higher interest rates helped
spark an April rally that buoyed the
performance of the U.S. taxable
bond market for the 12 months
ended April 30, 1997. The
Lehman Brothers Aggregate Bond
Index - a broad measure of the
U.S. taxable bond market -
returned 7.09% over that period.
For much of the year, bonds
were affected by increasing
expectations of economic growth
and inflation. While responding to
mixed economic statistics, the
bias of the market was toward
higher rates. With interest rates
finishing the period slightly
higher than where they began, the
performance of most bonds
consisted almost entirely of
income returns as opposed to
price gains or losses. In his
February testimony before
Congress, Federal Reserve Board
Chairman Alan Greenspan
indicated that the Fed was
inclined to raise the rate banks
charge each other for overnight
loans - known as the fed funds
target rate - to head off inflation
that might be caused by a tight
labor market. On March 25, the
Fed followed through by raising
the target rate by 0.25% to 5.50%.
However, this move had largely
been priced into the market.
When producer and consumer
price indexes continued to offer a
favorable inflation outlook in April,
a market rally in all debt market
sectors ensued, helping to ease
much of the bond market's
negative price performance
posted earlier in the period.
NOTE TO SHAREHOLDERS: Curt Hollingsworth became Portfolio Manager of
Spartan Government Income Fund on February 3, 1997.
Q. HOW DID THE FUND PERFORM, CURT?
A. For the 12-month period ending April 30, 1997, the fund had a total
return of 6.25%. To get a sense of how the fund stacked up against peers,
the general U.S. government funds average had a 12-month return of 5.79%,
as tracked by Lipper Analytical Services. Additionally, the Salomon
Brothers Treasury/Agency Index returned 6.60% over the same time frame.
Q. FOR THE FIRST TIME SINCE 1995, THE FEDERAL RESERVE BOARD RAISED
SHORT-TERM INTEREST RATES IN LATE MARCH OF THIS YEAR. DID YOU ALTER YOUR
STRATEGY IN RESPONSE TO RISING INTEREST RATES?
A. No, I didn't. The fund's duration - or interest rate sensitivity -
remained neutral; that is, the fund wasn't structured in anticipation of
interest rate moves. Instead, it was structured to match the interest rate
sensitivity of the market for 1-30 year government securities, as reflected
by the fund's index. I have found, regardless of conventional wisdom, that
it's impossible to predict the direction of interest rates with any great
consistency over a long period of time. That's why I don't try to "time the
market" by structuring the portfolio based on my view about the future
direction of interest rates. Instead, I work to add value by managing the
fund's sector weights and by focusing on individual security selection.
Q. WHAT WAS THE FUND'S STRATEGY?
A. The fund was underweighted significantly in lower-yielding Treasuries
and overweighted in higher-yielding agencies and mortgage-related
securities relative to the index. The index is composed of 90% U.S.
Treasuries, 10% federal agencies and no mortgage-backed securities. At the
end of the period, Treasury securities accounted for 39.9% of the fund's
investments, federal agency securities were 34.4% and mortgage-related
securities were 21.7%.
Q. WHICH AGENCY SECURITIES WERE ATTRACTIVE?
A. We focused on agency bonds that are non-callable - meaning the issuer
does not have the option of redeeming the bond prior to maturity. Thus, the
fund won't be faced with having to invest cash if a bond is called in what
may be an unfavorable interest rate environment. We also emphasized
higher-quality agency securities, those directly or indirectly backed by
the full faith and credit of the U.S. government. These high-quality
securities offered higher yields than comparable Treasuries and, as such,
helped the fund's performance.
Q. LET'S TURN TO MORTGAGE-BACKED SECURITIES. WHAT CHOICES DID YOU MAKE
THERE?
A. I focused on mortgage securities with coupons, or the interest rates the
borrower promises to pay, that were either much higher or lower than
current interest rates. Here's why: Mortgage-backed securities are subject
to prepayment risk - or the risk that they will be paid off before maturity
as mortgage holders refinance their debt. Both rising and falling interest
rates typically set off changes in prepayment patterns, that can
dramatically affect the prices of mortgage-backed securities. The bonds
most vulnerable to prepayment activity are those that have coupons close to
current market rates. I am very careful to select mortgage securities that
I believe will allow the fund to closely track the benchmark.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. It's difficult to pinpoint any individual holdings as being detriments
to the fund's performance. However, the fact that yield spreads - which
measure the difference in yields between bonds of various credit quality -
compressed made it difficult to find attractive additions for the fund.
Yield spreads are near historically tight levels and, as a result, it was a
frustrating period for finding higher-yield opportunities.
Q. WHAT'S YOUR OUTLOOK?
A. Looking ahead, investors will likely continue to scrutinize every new
piece of economic data, looking for clues as to whether the Fed will move
to change interest rates at its next meeting in July. In the meantime,
contradictory economic data may mean more volatility for the fixed income
markets. But regardless of the direction of interest rates, I'll try to buy
bonds whose prices are lower than I believe they should be, and sell those
that have exceeded their fair value. In addition, I will look for
opportunities that may pop up due to price inefficiencies with the idea of
exploiting the anomalies for the benefit of the fund.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: high current income
by investing mainly in
securities of any maturity
issued or guaranteed by the
U.S. government and its
agencies
FUND NUMBER: 453
TRADING SYMBOL: SPGVX
START DATE: December 20, 1988
SIZE: as of April 30, 1997,
more than $257 million
MANAGER: Curt
Hollingsworth, since February
1997; manager, various
Fidelity and Spartan
government funds; joined
Fidelity in 1983
(checkmark)
CURT HOLLINGSWORTH ON SECURITY
SELECTION:
"While few investors welcome
volatility, it often creates
opportunities. As manager of a
government securities
mutual fund, my job is to buy
bonds that I think are cheap
and have the potential to rise in
value and to sell those
securities that I think have
reached their full value relative
to other bonds in the
marketplace. A moderate
amount of volatility can make
that task easier. Absent
volatility over much of 1996,
bonds were priced quite
efficiently. By that, I mean that
there were fewer opportunities
to find securities that I felt
were significantly underpriced
relative to their fair value. But
even a moderate amount of
volatility can create price
inefficiencies. While the
headlines may suggest
otherwise, I would not
necessarily characterize the
past six months as a very
volatile period for
fixed-income securities. Bond
yields and prices remained in
a relatively narrow range,
even though interest rates
reversed course."
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

Zero 6.3 0.2
Coupon
bonds

Under 5% - 0.4

5 - 5.3 5.2
5.99%

6 - 6.99% 23.9 26.9

7 - 7.99% 12.5 12.7

8 - 8.99% 22.2 26.1

9 - 9.99% 17.0 19.7

10 - 1.1 1.2
10.99%

11 - 0.5 0.6
11.99%

12 - 4.9 5.9
12.99%

13% and 2.3 0.3
over

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING
SHORT-TERM INVESTMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1997
6 MONTHS AGO

Years 8.5 8.8

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 APRIL 30, 1997
6 MONTHS AGO

Years 4.8 4.8

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 AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30,1997 AS OF OCTOBER 31, 1996
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 34.4
Row: 1, Col: 4, Value: 39.9
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 21.7
Mortgage-backed
securities 19.8%
U.S. Treasury
obligations 50.5%
U.S. government
agency obligations 28.9%
Short-term
investments 0.8%

Mortgage-backed
securities 21.7%
U.S. Treasury
obligations 39.9%
U.S. government
agency obligations 34.4%
Short-term
investments 4.0%

Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 28.0
Row: 1, Col: 4, Value: 51.0
Row: 1, Col: 5, Value: 19.0
INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 74.3%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 39.9%
8 3/4%, 10/15/97 $ 7,250,000 $ 7,347,440
7 3/8%, 11/15/97 7,200,000 7,257,384
7 7/8%, 4/15/98 9,910,000 10,081,839
8 7/8%, 11/15/98 925,000 961,131
8%, 8/15/99 5,880,000 6,083,036
13 3/8%, 8/15/02 4,200,000 5,255,922
12%, 8/15/13 (callable) 8,000,000 11,147,520
9%, 11/15/18 20,590,000 25,003,878
8 7/8%, 2/15/19 3,000,000 3,603,270
8 1/8%, 8/15/19 24,850,000 27,804,914
104,546,334
U.S. GOVERNMENT AGENCY OBLIGATIONS - 34.4%
Federal Agricultural Mortgage Corporation
7.01%, 2/10/05 700,000 701,204
Federal Home Loan Bank:
6.37%, 6/30/03 310,000 302,734
7.36%, 7/1/04 870,000 895,013
7.38%, 8/5/04 1,360,000 1,396,543
7.46%, 9/9/04 770,000 793,824
8.09%, 12/28/04 260,000 277,592
7.59%, 3/10/05 260,000 270,278
Federal Home Loan Mortgage Corporation
8%, 1/26/05 290,000 307,127
Government Loan Trusts (guaranteed by
U.S. Government through Agency for International
Development) 8 1/2%, 4/1/06 1,965,000 2,103,709
Government Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Defense Security Assistance Agency):
Class 1-C, 9 1/4%, 11/15/01 1,767,661 1,863,115
Class 2-E, 9.40%, 5/15/02 988,328 1,043,664
Class T-3, 9 5/8%, 5/15/02 2,692,724 2,841,470
Guaranteed Export Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank):
Series 1993-C, 5.20%, 10/15/04 201,333 190,889
Series 1993-D, 5.23%, 5/15/05 358,085 338,782
Series 1994-A, 7.12%, 4/15/06 1,934,096 1,951,019
Series 1994-C, 6.61%, 9/15/99 87,496 88,061
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Guaranteed Trade Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1994-B,
7 1/2%, 1/26/06 $ 274,874 $ 281,340
Israel Export Trust Certificates (assets of Trust guaranteed
by U.S. Government through Export-Import Bank)
Series 1994-1, 6.88%, 1/26/03 381,176 382,095
Knoxville Tennessee U.S. Government Guaranteed Notes,
Series 1990-A, 9.20%, 8/1/02 1,000,000 1,101,800
Overseas Private Investment Corp. U.S. Government
guaranteed participation certificate (callable):
Series 1994-195, 6.08%, 8/15/04 2,050,000 1,989,402
Series 1996-A1, 6.726%, 9/15/10 2,000,000 1,955,980
Private Export Funding Corp. secured:
5.65%, 3/15/03 962,571 936,630
6.86%, 4/30/04 10,877,000 10,883,744
Resolution Funding Corp. 8 7/8%, 7/15/20 1,000,000 1,188,120
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
6 1/8%, 8/15/99 13,000,000 12,909,260
7 1/8%, 8/15/99 1,016,000 1,029,744
6.05%, 8/15/00 3,900,000 3,834,558
0%, 11/15/00 6,479,000 5,138,560
8%, 11/15/01 6,190,000 6,490,710
0%, 11/15/01 15,200,000 11,298,464
6 1/4%, 8/15/02 1,487,000 1,455,731
6 1/8%, 3/15/03 1,230,000 1,186,114
6 5/8%, 8/15/03 2,010,000 1,993,960
7 5/8%, 8/15/04 400,000 412,018
5.89%, 8/15/05 7,295,000 6,807,227
U.S. Department of Housing and Urban Development
government guaranteed participation certificates
Series 1996-A, 6.98%, 8/1/05 2,335,000 2,330,540
U.S. Trade Trust Certificates (assets of Trust guaranteed by
U.S. Government through Export-Import Bank)
6.69%, 1/15/09 (a) 1,370,000 1,347,888
90,318,909
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $193,758,195) 194,865,243
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 11.8%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FEDERAL HOME LOAN CORPORATION - 2.5%
6 1/2%, 5/1/08 $ 869,072 $ 851,360
7 1/2%, 6/1/07 565,346 572,854
9%, 5/1/17 to 4/1/20 1,102,948 1,170,642
10%, 7/1/09 to 8/1/21 2,658,746 2,902,288
12 1/2%, 6/1/19 640,864 735,661
13%, 6/1/15 218,424 255,157
6,487,962
FEDERAL HOME LOAN MORTGAGE CORPORATION - 6.4%
6.775%, 11/1/03 5,183,883 5,169,303
9%, 8/1/08 to 11/1/16 641,719 676,061
9 1/2%, 6/1/09 to 8/1/24 9,348,968 10,066,292
10 1/2%, 10/1/15 to 1/1/16 65,483 71,746
12%, 9/1/03 to 12/1/15 153,558 171,836
12 1/4%, 3/1/11 to 7/1/14 446,393 500,396
12 1/2%, 2/1/14 151,065 174,574
13%, 12/1/97 to 10/1/14 63,110 73,033
13 1/2%, 10/1/11 1,131 1,337
16,904,578
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.5%
6.345%, 3/1/99 1,756,250 1,741,432
6 1/2%, 2/1/10 to 1/1/24 812,500 804,830
7%, 11/1/06 388,377 388,684
8 1/4%, 12/1/10 1,959,402 2,055,589
11%, 8/1/10 688,078 760,608
11 1/4%, 5/1/14 258,730 286,125
12 1/2%, 3/1/16 98,324 113,656
13%, 9/1/13 65,953 77,147
13 1/2%, 5/1/11 to 1/1/15 228,153 269,405
6,497,476
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.4%
9 1/2%, 6/15/09 to 11/15/09 754,499 810,532
10%, 1/15/16 3,949 4,320
11%, 4/15/13 to 6/15/13 38,507 42,825
11 1/2%, 4/15/10 to 4/15/11 72,837 82,119
13 1/2%, 7/15/11 61,561 72,976
1,012,772
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $30,392,522) 30,902,788
COLLATERALIZED MORTGAGE OBLIGATIONS - 9.9%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY - 9.9%
Federal Home Loan Mortgage Corporation:
planned amortization class:
Series 1511 Class D, 6%, 10/15/04 $ 3,970,000 $ 3,941,466
Series 1515 Class D, 6%, 9/15/05 4,000,000 3,951,250
Series 1727 Class D, 6 1/2%, 8/15/14 2,790,000 2,794,359
sequential pay Series 1353 Class A, 5 1/2%, 11/15/04 100,004 98,785
Federal National Mortgage Association:
planned amortization class:
Series 1993-134 Class GA, 6 1/2%, 2/25/07 2,870,000 2,819,887
Series 1994-51 Class PD, 5 3/4%, 2/25/15 5,660,000 5,603,400
sequential pay Series 1996-M5 Class A1,
7.141%, 6/25/08 3,762,747 3,783,619
Series 1994-M3 Class A, 7.71%, 4/1/06 2,887,043 2,919,522
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $25,489,532) 25,912,288
CASH EQUIVALENTS - 4.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.37%, dated
4/30/97 due 5/1/97 $ 10,571,577 10,570,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $260,210,249) $ 262,250,319
LEGEND
1. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,347,888 or 0.5% of net
assets.
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $260,210,249. Net unrealized appreciation aggregated
$2,040,070, of which $3,779,934 related to appreciated investment
securities and $1,739,864 related to depreciated investment securities.
At April 30, 1997, the fund had a capital loss carryforward of
approximately $16,817,000 of which $1,059,000, $13,235,000, $1,392,000 and
$1,131,000 will expire on April 30, 2002, 2003, 2004, and 2005,
respectively. All of the loss carryforward expiring in 2002, was acquired
in the merger and is available to offset future capital gains of the fund
to the extent provided by regulations (see Note 6 of Notes to Financial
Statements).
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 262,250,319
agreements of $10,570,000) (cost $260,210,249) -
See accompanying schedule

Cash 131,066

Interest receivable 3,579,982

TOTAL ASSETS 265,961,367

LIABILITIES

Payable for investments purchased $ 7,079,435

Payable for fund shares redeemed 780,505

Distributions payable 195,039

Accrued management fee 116,155

Other payables and accrued expenses 6,379

TOTAL LIABILITIES 8,177,513

NET ASSETS $ 257,783,854

Net Assets consist of:

Paid in capital $ 274,462,088

Distributions in excess of net investment income (866,823)

Accumulated undistributed net realized gain (loss) (17,851,481)
on investments

Net unrealized appreciation (depreciation) on 2,040,070
investments

NET ASSETS, for 25,664,770 shares outstanding $ 257,783,854

NET ASSET VALUE, offering price and redemption price per $10.04
share ($257,783,854 (divided by) 25,664,770 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 19,955,964
Interest

EXPENSES

Management fee $ 1,789,386

Non-interested trustees' compensation 7,345

Total expenses before reductions 1,796,731

Expense reductions (150,177) 1,646,554

NET INVESTMENT INCOME 18,309,410

REALIZED AND UNREALIZED GAIN (LOSS) (1,903,762)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on 1,035,178
investment securities

NET GAIN (LOSS) (868,584)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 17,440,826
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 18,309,410 $ 15,966,855
Net investment income

Net realized gain (loss) (1,903,762) 3,833,392

Change in net unrealized appreciation (depreciation) 1,035,178 (590,018)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 17,440,826 19,210,229
FROM OPERATIONS

Distributions to shareholders from net investment income (18,091,538) (15,643,020)

Share transactions 65,372,173 50,371,073
Net proceeds from sales of shares

Net asset value of shares issued in exchange for the net 65,555,014 -
assets of Spartan Long-Term Government Bond Fund
(Note 6)

Reinvestment of distributions 15,410,853 13,094,710

Cost of shares redeemed (121,500,247) (73,335,315)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 24,837,793 (9,869,532)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 24,187,081 (6,302,323)

NET ASSETS

Beginning of period 233,596,773 239,899,096

End of period (including distributions in excess of $ 257,783,854 $ 233,596,773
net investment income of $866,823 and
$1,074,981, respectively)

OTHER INFORMATION
Shares

Sold 6,470,482 4,847,455

Issued in exchange for the shares of Spartan 6,542,417 -
Long-Term
Government Bond Fund (Note 6)

Issued in reinvestment of distributions 1,524,936 1,265,525

Redeemed (12,024,871) (7,081,871)

Net increase (decrease) 2,512,964 (968,891)

</TABLE>

FINANCIAL HIGHLIGHTS

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

1997 1996 1995 1994 E 1993

SELECTED PER-SHARE DATA

Net asset value, beginning $ 10.090 $ 9.950 $ 10.000 $ 10.930 $ 10.900
of period

Income from Investment .672 C .672 .640 .624 .784
Operations
Net investment income

Net realized and unrealized (.057) .132 .055 (.720) .370
gain (loss)

Total from investment .615 .804 .695 (.096) 1.154
operations

Less Distributions

From net investment income (.665) (.664) (.700) (.574) (.704)

In excess of net - - (.045) - -
investment income

From net realized gain - - - (.100) (.420)

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

Total distributions (.665) (.664) (.745) (.834) (1.124)

Net asset value, end of period $ 10.040 $ 10.090 $ 9.950 $ 10.000 $ 10.930

TOTAL RETURN A, B 6.26% 8.10% 7.32% (1.14) 11.12%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 257,784 $ 233,597 $ 239,899 $ 286,654 $ 457,725
(000 omitted)

Ratio of expenses to average .60% .65% .65% .65% .65%
net assets G

Ratio of expenses to average net .60% .62% .65% .65% .65%
assets after expense F F
reductions

Ratio of net investment income to 6.65% 6.55% 7.34% 6.79% 7.11%
average net assets

Portfolio turnover rate 135% 114% 303% 354% 170%
D

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN THE
MERGER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
E EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
G FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

1. 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 financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the 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. 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 with remaining maturities of sixty days
or less for which quotations are not readily available are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
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 substantially all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, market discount, capital loss
carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments may include temporary
book and tax basis differences that will reverse in a subsequent period.
Any taxable income or gain remaining at fiscal year end is distributed in
the following year.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $362,194,586 and $398,851,930, respectively, of which U.S.
government and government agency obligations aggregated $362,194,586 and
$398,546,452, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.65% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$7,495 for the period.
5. EXPENSE REDUCTIONS.
Effective June 1, 1996, FMR voluntarily agreed to reimburse the fund's
operating expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of
5. EXPENSE REDUCTIONS -
CONTINUED
.60% of average net assets. For the period, the reimbursement reduced the
expenses by $147,798.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby credits realized as a
result of uninvested cash balances were used to reduce a portion of the
fund's expenses. During the period, the fund's expenses were reduced by
$2,379 under this these arrangements.
6. MERGER INFORMATION.
On May 31, 1996, the fund acquired all of the assets and assumed all of the
liabilities of Spartan Long-Term Government Bond Fund. The acquisition,
which was approved by the shareholders of Spartan Long-Term Government Bond
Fund on May 7, 1996, was accomplished by an exchange of 6,542,416.558
shares of the fund for the 5,911,859.511 shares then outstanding (each
valued at $11.09) of Spartan Long-Term Government Bond Fund. Based on the
opinion of fund counsel, the reorganization qualified as a tax-free
reorganization for federal income tax purposes with no gain or loss
recognized to the funds or their shareholders. Spartan Long-Term Government
Bond Fund's net assets, including $63,758 of unrealized depreciation, were
combined with the fund for total net assets after the acquisition of
$291,948,662.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Spartan Government Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan Government Income Fund, including the
schedule of portfolio investments, as of April 30, 1997, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan Government Income Fund as of April
30, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 6, 1997
DISTRIBUTIONS

A total of 56.11% of the dividends distributed 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 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
MANAGING YOUR INVESTMENTS

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
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
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, 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
1502 N. Westshore Blvd.
Tampa, 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
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, 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
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

TO WRITE FIDELITY

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
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
New Markets Income
Short-Intermediate Government
Short-Term Bond
Spartan(Registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Short-Intermediate Government
Spartan Short-Term Bond
Target Timeline 1999, 2001 & 2003
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)SPARTAN

HIGH INCOME
FUND
ANNUAL REPORT
APRIL 30, 1997
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 29 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 33 Notes to the financial statements.

REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 38

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value), and the effect of the $5
account closeout fee on an average-sized account. You can also look at the
fund's income, as reflected in the fund's yield, as part of its
performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan High Income 10.57% 87.88% 181.17%

Merrill Lynch High Yield Master Index 11.82% 71.94% 138.49%

High Current Yield Funds Average 11.26% 65.89% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on August 29, 1990. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Merrill Lynch High Yield Master Index - a market capitalization weighted
index of all domestic and yankee high-yield bonds. Issues included in the
index have maturities of at least one year and have a credit rating lower
than BBB-/Baa3, but are not in default. To measure how the fund's
performance stacked up against its peers, you can compare it to the high
current yield funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 158 mutual funds. These
benchmarks include reinvested dividends and capital gains.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan High Income 10.57% 13.44% 16.75%

Merrill Lynch High Yield Master Index 11.82% 11.45% 13.90%

High Current Yield Funds Average 11.26% 10.63% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking an arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER LIFE OF FUND
Spartan High Income ML High Yield Master
00455 ML002
1990/08/29 10000.00 10000.00
1990/08/31 10064.99 9977.19
1990/09/30 9729.40 9543.27
1990/10/31 9550.63 9300.42
1990/11/30 9776.03 9379.20
1990/12/31 9943.86 9514.35
1991/01/31 10104.29 9648.85
1991/02/28 10720.43 10365.01
1991/03/31 11246.93 10810.67
1991/04/30 11533.41 11195.65
1991/05/31 11681.60 11250.32
1991/06/30 11977.15 11476.64
1991/07/31 12368.43 11751.63
1991/08/31 12468.01 11998.63
1991/09/30 12639.75 12151.45
1991/10/31 13107.55 12512.54
1991/11/30 13259.88 12657.07
1991/12/31 13358.94 12804.11
1992/01/31 13966.03 13251.78
1992/02/29 14480.19 13580.89
1992/03/31 14853.43 13770.39
1992/04/30 14965.58 13870.61
1992/05/31 15143.52 14091.86
1992/06/30 15367.69 14266.95
1992/07/31 15662.69 14556.01
1992/08/31 15936.82 14748.72
1992/09/30 16107.59 14916.77
1992/10/31 15875.43 14728.37
1992/11/30 16009.54 14936.95
1992/12/31 16231.34 15129.28
1993/01/31 16632.02 15501.83
1993/02/28 16980.76 15795.25
1993/03/31 17401.26 16069.10
1993/04/30 17503.26 16184.44
1993/05/31 17715.25 16402.30
1993/06/30 18326.62 16710.46
1993/07/31 18566.28 16890.08
1993/08/31 18721.76 17051.09
1993/09/30 18784.48 17135.22
1993/10/31 19196.15 17458.00
1993/11/30 19487.94 17553.48
1993/12/31 19780.16 17729.01
1994/01/31 20449.02 18117.54
1994/02/28 20445.44 17987.24
1994/03/31 19949.27 17401.09
1994/04/30 19726.67 17197.75
1994/05/31 19808.03 17136.47
1994/06/30 19804.44 17199.55
1994/07/31 19827.53 17320.45
1994/08/31 19829.75 17440.76
1994/09/30 19987.50 17434.16
1994/10/31 20100.14 17478.46
1994/11/30 20036.21 17329.78
1994/12/31 20414.43 17522.55
1995/01/31 20555.12 17770.15
1995/02/28 21041.83 18324.59
1995/03/31 21364.77 18579.61
1995/04/30 21911.37 19014.63
1995/05/31 22334.87 19608.69
1995/06/30 22626.41 19758.46
1995/07/31 23061.97 19984.34
1995/08/31 23348.25 20105.63
1995/09/30 23554.89 20335.66
1995/10/31 23902.63 20479.81
1995/11/30 23793.51 20679.72
1995/12/31 24197.51 21011.67
1996/01/31 24967.11 21343.51
1996/02/29 25192.88 21375.65
1996/03/31 25179.73 21317.59
1996/04/30 25429.54 21327.25
1996/05/31 25723.43 21481.06
1996/06/30 25702.18 21610.10
1996/07/31 25657.68 21756.81
1996/08/31 26078.96 21981.49
1996/09/30 26811.27 22453.12
1996/10/31 26972.74 22699.19
1996/11/30 27347.86 23158.10
1996/12/31 27624.63 23336.30
1997/01/31 27967.02 23515.64
1997/02/28 28531.85 23845.52
1997/03/31 27892.60 23580.68
1997/04/30 28118.21 23849.06
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan High Income Fund on August 29, 1990, when the fund
started. As the chart shows, by April 30, 1997, the value of your
investment would have grown to $28,113 - a 181.13% increase on your initial
investment and includes 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 $23,849 - a 138.49% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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,

1997 1996 1995 1994 1993

Dividend return 8.76% 10.66% 9.46% 8.94% 10.88%

Capital appreciation return 1.81% 5.39% 1.61% 3.75% 6.07%

Total return 10.57% 16.05% 11.07% 12.69% 16.95%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains paid
by the fund are reinvested. Capital appreciation and total returns include
the effect of the $5 account closeout fee on an average-sized account.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 7.07(cents) 52.49(cents) 103.33(cents)

Annualized dividend rate 6.93% 8.41% 8.30%

30-day annualized yield 7.38% - -

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 $12.42 over
the past one month, $12.59 over the past six months, and $12.45 over the
past one 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

MARKET RECAP
A healthy economy and a
continued positive supply and
demand backdrop helped propel
the high-yield market to strong
returns over the 12 months that
ended April 30, 1997. During that
period, the Merrill Lynch High
Yield Master Index posted a total
return of 11.82%. By comparison,
the Lehman Brothers Aggregate
Bond Index - a broad measure of
the performance of the U.S.
taxable bond market - had a total
return of 7.09%. The Standard &
Poor's 500 Index - a measure of
the performance of the U.S. stock
market - returned 25.13%. The
U.S. economy continued to
grow at a steady pace and
corporate earnings remained
strong. As a result, the default
rate continued at levels well below
historical norms, as fewer
companies failed to make timely
payments of interest and principal
on their high-yield debt. While new
issuance reached record levels
this year, demand was strong
enough to absorb the supply, as
investors continued to pour
money into high-yield funds due to
their attractive yields and
risk-adjusted returns for the past
five years. Except for some short
periods of uncertainty, the
interest rate environment also was
relatively favorable. In addition,
concerns that stocks were
becoming overvalued helped
develop the concept of high-yield
bonds as a defensive alternative
to equities.
An interview with Tom Soviero, Portfolio Manager of Spartan High Income
Fund
Q. HOW DID THE FUND PERFORM, TOM?
A. For the 12 months ending April 30, 1997, the fund had a total return of
10.57%. For the same period, the high current yield funds average returned
11.26%, as tracked by Lipper Analytical Services. The Merrill Lynch High
Yield Master Index returned 11.82% for the same 12-month period.
Q. HIGH-YIELD BONDS PERFORMED WELL IN THE FIRST HALF OF THE PERIOD. HOW DID
THEY DO OVER THE MOST RECENT SIX MONTHS?
A. It was a fairly strong period for the high-yield market. One positive
was that default rates - a measure of how many high-yield companies are
unable or unwilling to pay back their debt - continued at levels well below
historical norms. Second, many companies that have issued high-yield bonds
continued to benefit from a healthy domestic economy. Third, the high-yield
market saw a healthy amount of interest from individual and institutional
investors. Finally, except for the month of March, the past six months were
characterized by a relatively benign interest rate environment and an
exceptionally strong stock market, both of which helped the high-yield bond
market.
Q. WHAT ACCOUNTS FOR THE FUND'S PERFORMANCE?
A. Several of the fund's large holdings - including Revlon, Millicom,
Allied Waste and Time Warner - performed well and helped the fund's
performance. Revlon saw its zero coupon bonds get defeased - meaning their
risk was greatly reduced because they were backed by Treasury bonds - as
part of a large recapitalization plan. Millicom, an international cellular
company, benefited from continued strong subscriber growth and a recent
announcement that it would sell and spin-off certain assets. Allied Waste's
common stock rose significantly in the past six months as investors became
aware of the company's successful operating and marketing strategies in the
solid waste industry. Finally, Time Warner's preferred stock rose due to
strong operating results from its vast media operations.
Q. WHY DID THE FUND LAG ITS PEERS?
A. Stratosphere, Saks Holdings and Marvel didn't perform well, which was
the primary reason why the fund modestly lagged its peers. The decline in
the price of Stratosphere's bonds was a result of negative trends in its
gaming operations. While plenty of people were visiting the company's much
publicized "Tower" in Las Vegas, it turns out that they were not spending
much money on gambling. As a result, cash flow from the property was
disappointing. Marvel suffered from precipitous declines in its trading
card and comic book operations. I sold both Stratosphere and Marvel at a
loss. Additionally, convertible bonds in Saks Holdings, parent of Saks
Fifth Avenue department stores, proved to be more volatile then expected
due to weakness in the stock in the first quarter of 1997.
Q. WHERE DID YOU FIND ATTRACTIVE OPPORTUNITIES OVER THE PAST SIX MONTHS?
A. I bought bonds issued by McCaw International, a young mobile
telecommunications company owned by Nextel Communications, because I
believed that the company could benefit from continued strong demand for
wireless phone service in developing countries. I also added to the funds
stake in Cablevision Systems preferred stock, which I liked because the
company is expected to embark on a debt reduction program after its
recently announced acquisition of the 50% stake in Madison Square Garden
the company had not owned already. I also added to the fund's stake in the
supermarket and broadcasting industries. In the broadcasting industry, the
largest holdings at the end of the period were Time Warner and Cablevision
Systems, while in the supermarket sector, Pathmark, a supermarket chain in
the Northeast that is undergoing a turnaround driven by new management, is
a large holding.
Q. WHAT'S AHEAD FOR THE FUND?
A. The difference in yield, or what's known as the "spread," between
high-yield bonds and Treasury securities is at historically tight levels.
This has made it a bit more challenging to find value. However, thanks to
recent growth, the high-yield market has approached $400 billion in size,
which helps in my pursuit to find attractive investment opportunities. I
plan to look for stable, high-quality companies within the high-yield
market that want to either reduce debt or ramp up cash flow over the
intermediate-term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current income
by investing mainly in
high-yielding debt securities
with an emphasis on
lower-quality securities
FUND NUMBER: 455
TRADING SYMBOL: SPHIX
START DATE: August 29, 1990
SIZE: as of April 30, 1997,
more than $1.8 billion
MANAGER: Tom Soviero,
since January 1996; also
manages institutional funds;
joined Fidelity in 1986
(checkmark)
TOM SOVIERO ON HIS CRITERIA FOR
CHOOSING INVESTMENTS FOR THE
FUND:
"My investment decisions are
based on fundamental credit
research using Fidelity's
in-house resources. Some of
the factors that I consider
when selecting investments
for the fund include: the
quality of management,
management's goals, track
record and strategy for paying
down debt; the competitive
position of the company within
its industry; pricing and
volume trends; the level and
trend of capital expenditures;
and the outlook for a
company's cash flow. It is
cash flow that enables a
company to service its debt
obligations. Based on my
assessment of these
fundamental factors, I try to
identify opportunities that I
think are attractively priced
and have the potential to rise
in value."
INVESTMENT CHANGES

TOP FIVE HOLDINGS AS OF APRIL 30, 1997
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE HOLDINGS
6 MONTHS AGO

Time Warner, Inc. 3.2 2.0

Cablevision Systems Corp. 3.1 2.9

US Air, Inc. 3.0 3.4

Pathmark Stores, Inc. 2.9 2.5

K-III Communications Corp. 2.0 1.3

TOP FIVE MARKET SECTORS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Media & Leisure 29.7 24.7

Retail & Wholesale 10.9 7.2

Utilities 10.0 10.0

Basic Industries 8.3 6.0

Finance 6.1 6.0

QUALITY DIVERSIFICATION AS OF APRIL 30, 1997
(MOODY'S RATINGS) % % OF FUND'S
O INVESTMENTS
F 6 MONTHS AGO
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S

Aaa, Aa, A 0 0.0
.
0

Baa 0 0.1
.
5

Ba 1 11.0
1
.
6

B 4 51.8
2
.
3

Caa, Ca, C 1 6.6
0
.
2

Not Rated 4 2.9
.
9

TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT APRIL 30, 1997 AND OCTOBER 31, 1996 ACCOUNT
FOR 4.9% AND 2.9%, RESPECTIVELY, OF THE FUND'S INVESTMENTS.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1997 * AS OF OCTOBER 31 1996 **

Nonconvertible
bonds 65.1%
Convertible bonds,
preferred stock 21.1%
Common stocks 8.1%
Short-term
Investments 4.9%
Other 0.8%
Nonconvertible
bonds 68.3%
Convertible bonds,
preferred stock 14.8%
Common stocks 7.2%
Short-term
Investments 9.3%
Other 0.4%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 8.1
Row: 1, Col: 4, Value: 21.1
Row: 1, Col: 5, Value: 63.0
Row: 1, Col: 1, Value: 1.4
Row: 1, Col: 2, Value: 9.300000000000001
Row: 1, Col: 3, Value: 7.2
Row: 1, Col: 4, Value: 14.8
Row: 1, Col: 5, Value: 67.3

* FOREIGN
INVESTMENTS 12.1%
** FOREIGN
INVESTMENTS 7.1%
INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 68.7%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CONVERTIBLE BONDS - 3.6%
AEROSPACE & DEFENSE - 0.0%
Rohr Industries, Inc. 7%, 10/1/12 B2 $ 690 $ 618
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Huntingdon International Holdings PLC euro
7 1/2%, 9/25/06 - 2,600 2,171
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.2%
IVAX Corp. 6 1/2%, 11/15/01 (f) - 4,890 3,888
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
International Cabletel, Inc.:
7%, 6/15/08 Caa 3,500 2,948
7%, 6/15/08 (f) Caa 2,890 2,457
5,405
RETAIL & WHOLESALE - 2.4%
APPAREL STORES - 1.1%
Saks Holdings, Inc. 5 1/2%, 9/15/06 B2 26,900 21,552
GENERAL MERCHANDISE STORES - 0.4%
Michaels Stores, Inc. 6 3/4%, 1/15/03 (i) B1 7,650 6,579
RETAIL & WHOLESALE, MISCELLANEOUS - 0.9%
Corporate Express, Inc. 4 1/2%, 7/1/00 B3 5,570 4,748
Sunglass Hut International, Inc. 5 1/4%,
6/15/03 (f) B2 14,680 11,230
15,978
TOTAL RETAIL & WHOLESALE 44,109
SERVICES - 0.6%
Protection One Alarm Monitoring, Inc.
6 3/4%, 9/15/03 Caa 8,410 7,821
Veterinary Centers of America, Inc.
5 1/4%, 5/1/06 - 6,490 4,219
12,040
TOTAL CONVERTIBLE BONDS 68,231
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - 65.1%
AEROSPACE & DEFENSE - 1.7%
AEROSPACE & DEFENSE - 0.8%
Alliant Techsystems, Inc. 11 3/4%, 3/1/03 B2 $ 1,810 $ 1,968
Rohr, Inc. 11 5/8%, 5/15/03 Ba3 11,680 12,848
14,816
DEFENSE ELECTRONICS - 0.2%
Tracor, Inc. 8 1/2%, 3/1/07 (f) B1 3,900 3,842
SHIP BUILDING & REPAIR - 0.7%
Newport News Shipbuilding, Inc.:
8 5/8%, 12/1/06 Ba2 4,240 4,251
9 1/4%, 12/1/06 B1 8,360 8,548
12,799
TOTAL AEROSPACE & DEFENSE 31,457
BASIC INDUSTRIES - 7.9%
CHEMICALS & PLASTICS - 2.5%
Acetex Corp. yankee 9 3/4%, 10/1/03 B1 4,350 4,307
American Pacific Corp. 11%, 2/21/02 - 1,725 1,639
Foamex LP/Foamex Capital Corp.
11 7/8%, 10/1/04 B3 2,130 2,284
Ivex Holdings Corp. 0%, 3/15/05 (d) Caa 16,770 13,081
Sterling Chemicals Holdings, Inc.:
11 3/4%, 8/15/06 B3 15,780 16,648
11 1/4%, 4/1/07 (f) B3 9,260 9,537
47,496
IRON & STEEL - 0.8%
Altos Hornos de Mexico SA 11 7/8%,
4/30/04 (f) - 10,000 10,125
Gulf States Steel, Inc. 13 1/2%, 4/15/03 B1 4,040 3,798
13,923
PACKAGING & CONTAINERS - 0.1%
Gaylord Container Corp. 11 1/2%, 5/15/01 B3 1,300 1,359
PAPER & FOREST PRODUCTS - 4.5%
Container Corp. of America gtd.:
9 3/4%, 4/1/03 B1 7,380 7,629
11 1/4%, 5/1/04 B1 8,180 8,753
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Doman Industries Ltd. yankee
8 3/4%, 3/15/04 Ba3 $ 3,280 $ 3,034
Repap Wisconsin, Inc. 9 7/8%, 5/1/06 Caa 3,630 3,449
Repap New Brusnwick, Inc. yankee:
9 7/8%, 7/15/00 B2 5,640 5,598
10 5/8%, 4/15/05 Caa 31,730 29,906
SD Warren Co. 12%, 12/15/04 B1 16,290 17,916
Stone Container Corp. 11 7/8%, 8/1/16 B2 9,040 9,221
85,506
TOTAL BASIC INDUSTRIES 148,284
CONSTRUCTION & REAL ESTATE - 0.8%
CONSTRUCTION - 0.3%
Greystone Homes, Inc. 10 3/4%, 3/1/04 Ba3 4,560 4,703
REAL ESTATE - 0.5%
Museum Towers LLC 15%, 11/7/01 (e) - 10,000 10,000
TOTAL construction & real estate 14,703
DURABLES - 2.1%
AUTOS, TIRES, & ACCESSORIES - 1.0%
Aftermarket Technology Corp. 12%, 8/1/04 B3 725 796
Delco Remy International, Inc.
10 5/8%, 8/1/06 (f) B2 6,840 7,148
Federal Mogul Corp. 8.80%, 4/15/07 Ba2 9,440 9,499
Safelite Glass Corp. 9 7/8%, 12/15/06 (f) B3 750 761
18,204
HOME FURNISHINGS - 0.8%
Interlake Corp. 12 1/8%, 3/1/02 B3 14,470 15,193
TEXTILES & APPAREL - 0.3%
Hat Brands, Inc. (b):
Series B, 12 5/8%, 9/15/02 - 3,470 1,909
Series D, 12 5/8%, 9/15/02 - 3,000 1,650
Pillowtex Corp. 10%, 11/15/06 (f) B2 1,970 2,034
Synthetic Industries, Inc. 9 1/4%, 2/15/07 (f) B2 1,030 1,035
6,628
TOTAL DURABLES 40,025
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - 3.8%
ENERGY SERVICES - 1.3%
Dawson Production Services, Inc.
9 3/8%, 2/1/07 B1 $ 1,110 $ 1,091
Falcon Drilling, Inc.:
9 3/4%, 1/15/01 Ba3 10,220 10,450
8 7/8%, 3/15/03 B1 3,000 2,954
12 1/2% 3/15/05 B3 8,900 9,746
24,241
OIL & GAS - 2.5%
Clark R&M Holdings, Inc. 0%, 2/15/00 B2 17,430 12,724
Flores & Rucks, Inc. 9 3/4%, 10/1/06 B3 6,700 6,935
Forcenergy, Inc.:
9 1/2%, 11/1/06 B2 7,190 7,260
8 1/2%, 2/15/07 (f) B2 8,980 8,531
HS Resources, Inc.:
9 7/8%, 12/1/03 B2 1,300 1,307
9 1/4%, 11/15/06 (f) B2 3,650 3,550
Mesa Operating Co. 0%, 7/1/06 (d) B2 9,080 6,538
46,845
TOTAL ENERGY 71,086
FINANCE - 3.0%
ASSET-BACKED SECURITIES - 0.9%
Airplanes Pass Through Trust
10 7/8%, 3/15/19 Ba2 15,040 16,657
BANKS - 0.3%
ML Capital Trust I 9 7/8%, 3/1/27 (f) - 5,000 4,888
CREDIT & OTHER FINANCE - 0.2%
HMC Acquisition Properties, Inc. 9%, 12/15/07 Ba3 4,550 4,510
INSURANCE - 0.1%
Reliance Financial Services 10.36%, 12/1/00 BBB 1,225 1,220
SAVINGS & LOANS - 1.5%
Bank UTD Corp. 8 7/8%, 5/1/07 Ba3 8,710 8,688
First Nationwide Holdings, Inc.
12 1/4%, 5/15/01 Ba2 17,310 19,084
27,772
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.0%
ECM Corp. extendible 14%, 6/1/02 (f) - $ 519 $ 571
TOTAL FINANCE 55,618
HEALTH - 1.4%
MEDICAL FACILITIES MANAGEMENT - 1.4%
Beverly Enterprises, Inc. 9%, 2/15/06 B1 13,150 13,051
Quest Diagnostics, Inc. 10 3/4%, 12/15/06 B2 1,310 1,379
Unilab Corp. 11%, 4/1/06 Caa 14,245 10,969
25,399
HOLDING COMPANIES - 0.2%
Gray Communications System, Inc.
10 5/8%, 10/1/06 B3 4,360 4,556
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
ELECTRICAL EQUIPMENT - 0.1%
L-3 Communications Corp. 10 3/8%,
5/1/07 (f) B2 2,090 2,153
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
Goss Graphic System, Inc. 12%, 10/15/06 B2 5,670 6,024
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 8,177
MEDIA & LEISURE - 16.3%
BROADCASTING - 10.7%
Adelphia Communcations Corp. 9 7/8%,
3/1/07 (f) - 21,170 20,006
Bell Cablemedia PLC yankee 0%,
9/15/05 (d) B2 5,380 4,425
Comcast UK Cable Partners Ltd. 0%, 11/15/07 B2 12,110 8,416
Diamond Cable Communications PLC yankee (d):
0%, 9/30/04 B3 6,630 5,453
0%, 12/15/05 B3 35,875 24,799
0%, 2/15/07 (f) - 5,200 3,094
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Granite Broadcasting Corp.:
10 3/8%, 5/15/05 B3 $ 8,850 $ 8,916
9 3/8%, 12/1/05 B3 2,650 2,524
International Cabletel, Inc. 0%, 2/1/06 (d) B3 34,230 22,335
Innova S De R.L. 12 7/8%, 4/1/07 (f) B- 17,260 17,001
Paxson Communications Corp.
11 5/8%, 10/1/02 B3 20,420 21,441
Rogers Cablesystems yankee 10%, 3/15/05 Ba3 5,100 5,317
SCI Television, Inc. secured 11%, 6/30/05 Ba1 30,246 31,947
Telemundo Group, Inc. 7%, 2/15/06 (i) B1 13,485 12,592
Telewest PLC:
0%, 10/1/07 (d) B1 15,300 10,347
yankee 9 5/8%, 10/1/06 B1 2,590 2,552
Videotron Holdings PLC yankee 0%,
8/15/05 (d) B3 1,340 1,085
202,250
ENTERTAINMENT - 0.7%
All American Communications, Inc.
10 7/8%, 10/15/01 B3 2,260 2,271
Alliance Gaming Corp. 12 7/8%, 6/30/03 B2 3,570 3,856
Cinemark USA, Inc. 9 5/8%, 8/1/08 B2 7,060 6,989
13,116
LODGING & GAMING - 3.4%
Courtyard by Marriott II LP/Courtyard II
Finance Co., Series B, 10 3/4%, 2/1/08 B- 460 481
Griffin Gaming & Entertainment, Inc. secured
8.21%, 6/30/00 (g) B3 11,473 10,992
HMH Properties, Inc. 9 1/2%, 5/15/05 Ba3 5,860 5,985
Harrah's Jazz Co. 14 1/4%, 11/15/01 (b) Caa 16,960 7,293
KSL Recreation Group, Inc. 10 1/4%,
5/1/07 (f) B3 2,100 2,121
Prime Hospitality Corp. 9 3/4%, 4/1/07 (f) B1 13,290 13,622
Red Roof Inns, Inc. 9 5/8%, 12/15/03 B2 8,040 8,221
Sun International Hotels Ltd. 9%, 3/15/07 (f) Ba3 10,780 10,672
Wyndham Hotel Corp. 10 1/2%, 5/15/06 B2 3,460 3,736
63,123
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
PUBLISHING - 0.9%
Hollinger International Publishing, Inc.:
9 1/4%, 2/1/06 B1 $ 860 $ 849
9 1/4%, 3/15/07 B1 440 435
K-III Communications Corp.:
10 1/4%, 6/1/04 Ba3 5,030 5,269
8 1/2%, 2/1/06 Ba3 3,650 3,582
News America Holdings, Inc.
7.70%, 10/30/25 Baa 8,300 7,613
17,748
RESTAURANTS - 0.6%
Host Marriott Travel Plazas, Inc.
9 1/2%, 5/15/05 B1 11,010 11,230
TOTAL MEDIA & LEISURE 307,467
NONDURABLES - 0.2%
FOODS - 0.2%
Del Monte Corp. 12 1/4%, 4/15/07 (f) Caa 3,940 4,058
RETAIL & WHOLESALE - 8.1%
APPAREL STORES - 0.0%
Lamonts Apparel, Inc. 10 1/4%, 11/1/99
pay-in-kind (b)(f) - 3,081 123
GENERAL MERCHANDISE STORES - 2.0%
K mart Corp.:
12 1/2%, 3/1/05 Ba3 7,830 9,269
7.95%, 2/1/23 Ba3 8,910 7,529
Parisian, Inc. 9 7/8%, 7/15/03 B1 20,687 21,359
38,157
GROCERY STORES - 6.1%
Fage Dairy Industries SA yankee
9%, 2/1/07 (callable) (f) B1 3,880 3,570
Pathmark Stores, Inc.:
12 5/8%, 6/15/02 Caa 5,000 5,063
9 5/8%, 5/1/03 B3 17,760 16,517
0%, 11/1/03 (d) Caa 54,666 33,620
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - CONTINUED
Penn Traffic Co.:
10 1/4%, 2/15/02 B3 $ 18,230 $ 15,587
8 5/8%, 12/15/03 B3 6,855 5,553
10 3/8%, 10/1/04 B3 9,422 7,962
11 1/2%, 4/15/06 B3 6,550 5,696
Pueblo Xtra International, Inc.:
9 1/2%, 8/1/03 B3 10,630 9,846
9 1/2%, 8/1/03 (f) B3 1,810 1,665
Star Markets, Inc. 13%, 11/1/04 B3 8,920 9,857
114,936
TOTAL RETAIL & WHOLESALE 153,216
SERVICES - 1.9%
PRINTING - 0.8%
Sullivan Graphics, Inc. 12 3/4%, 8/1/05 Caa 15,620 15,854
SERVICES - 1.1%
Borg Warner Security Corp. 9 1/8%, 5/1/03 B3 11,750 11,633
Orion Network System, Inc. 0%,
1/15/07 unit (d) B2 17,090 8,758
20,391
TOTAL SERVICES 36,245
TECHNOLOGY - 5.9%
COMMUNICATIONS EQUIPMENT - 2.8%
Echostar Satellite Broadcasting Corp. 0%,
3/15/04 (d) Caa 24,250 17,218
Echostar Communications Corp. 0%, 6/1/04 (d) B2 37,808 31,002
Hyperion Telecommunications, Inc., Series B,
0%, 4/15/03 (d) - 8,000 4,060
52,280
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 0.5%
Anacomp, Inc. 10 7/8%, 4/1/04 (f) Caa $ 4,800 $ 4,704
Interact Systems, Inc. 0%, 8/1/03 (d) - 11,220 5,610
10,314
COMPUTERS & OFFICE EQUIPMENT - 1.7%
Bell & Howell Co. 0%, 3/1/05 (d) B3 7,810 6,170
Unisys Corp.:
10 5/8%, 10/1/99 B1 3,950 4,088
12%, 4/15/03 B1 10,800 11,394
11 3/4%, 10/15/04 B1 9,920 10,441
32,093
ELECTRONICS - 0.9%
Advanced Micro Devices, Inc. 11%, 8/1/03 Ba1 7,440 8,128
Fairchild Semiconductor Corp.:
10 1/8%, 3/15/07 (f) B2 3,980 4,030
11.74%, 3/15/08 pay-in-kind (e) - 5,090 4,451
16,609
TOTAL TECHNOLOGY 111,296
TRANSPORTATION - 3.5%
AIR TRANSPORTATION - 3.5%
Continental Airlines, Inc. 10.22%, 7/1/00 B2 9,454 9,454
US Air Inc.:
pass through trust 8 5/8%, 9/1/98 B1 6,445 6,509
10.35%, 1/1/98 B1 489 493
9 5/8%, 2/1/01 B3 18,510 18,695
10%, 7/1/03 B3 20,430 20,636
pass through trust 9 5/8%, 9/1/03 B1 5,090 5,217
pass through trust 10 3/8%, 3/1/13 B1 4,810 5,038
66,042
UTILITIES - 7.9%
CELLULAR - 5.4%
Clearnet Communications, Inc. yankee
0%, 12/15/05 (d) B3 29,450 17,965
Esat Holdings Ltd. 0%, 2/1/07 unit (d)(f) Caa 7,830 4,385
McCaw International Ltd. unit 0%,
4/15/07 (d)(f) CCC 60,220 29,433
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Millicom International Cellular SA
0%, 6/1/06 (d) B3 $ 37,530 $ 26,271
Mobile Telecommunications Technologies Corp.
13 1/2%, 12/15/02 B3 1,290 1,267
Rogers Communications, Inc.
10 7/8%, 4/15/04 B2 19,480 20,259
USA Mobile Communications, Inc. II
9 1/2%, 2/1/04 B2 3,120 2,620
102,200
ELECTRIC UTILITY - 1.2%
El Paso Electric Co. 1st Mtg. 9.40%, 5/1/11 Ba3 7,710 8,211
Niagara Mohawk Power Corp. 8 3/4%, 4/1/22 Ba3 13,170 13,034
21,245
TELEPHONE SERVICES - 1.3%
MFS Communications, Inc. 0%,
1/15/06 (d) Ba3 19,710 14,881
Mcleod, Inc. 0%, 3/1/07 (d)(f) B3 17,310 9,867
24,748
TOTAL UTILITIES 148,193
TOTAL NONCONVERTIBLE BONDS 1,225,822
TOTAL CORPORATE BONDS
(Cost $1,283,093) 1,294,053
COMMERCIAL MORTGAGE SECURITIES - 0.8%
Lehman Structured Securities Corp. Series 1996-1
Class E-2, 7.995%, 6/25/26 BB 2,360 2,294
Structured Asset Securities Corp.:
Series 1996-CFL Class G,
7 3/4%, 2/25/28 (f) - 12,040 10,155
Series 1996-C3 Class E,
8.458%, 6/25/30 (f)(g) - 3,600 3,368
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $15,065) 15,817
COMMON STOCKS - 8.1%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.7%
AEROSPACE & DEFENSE - 0.5%
BE Aerospace, Inc. (a) 200,000 $ 4,925
Rohr Industries, Inc. (a) 307,500 4,805
9,730
DEFENSE ELECTRONICS - 0.2%
Tracor, Inc. (a) 205,000 4,459
TOTAL AEROSPACE & DEFENSE 14,189
BASIC INDUSTRIES - 0.4%
CHEMICALS & PLASTICS - 0.1%
American Azide (warrants) (a)(e) 276 -
American Pacific Corp. (warrants) (a)(e) 164,285 41
Atlantis Group, Inc. (Trivest/Winston) (a)(e) 39,687 357
Trivest 1992 Special Fund Ltd. 13.6(h) 1,429
1,827
PACKAGING & CONTAINERS - 0.3%
Crown Packaging Holdings Ltd. (warrants) (a) 4,576 1
Gaylord Container Corp. Class A (a) 1,000,000 5,562
5,563
TOTAL BASIC INDUSTRIES 7,390
DURABLES - 0.7%
AUTOS, TIRES, & ACCESSORIES - 0.6%
Freuhauf Trailer Corp. (warrants) (a)(e) 1,125,000 11
Lear Corp. (a) 319,100 11,408
11,419
HOME FURNISHINGS - 0.0%
Polyvision Corp. (a) 37,283 10
TEXTILES & APPAREL - 0.1%
Hat Brands, Inc. (a)(e):
(warrants) 29,995 97
Class I unit 1.5(h) 930
1,027
TOTAL DURABLES 12,456
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 0.6%
OIL & GAS - 0.6%
Forcenergy Gas Exploration, Inc. (a) 241,400 $ 7,483
Gulf Canada Resources Ltd. (a) 143,000 1,192
Mesa, Inc. (a) 638,000 3,270
11,945
FINANCE - 1.4%
INSURANCE - 1.4%
American Financial Group, Inc. 715,500 24,953
SECURITIES INDUSTRY - 0.0%
ECM Corp. LP (f) 5,400 540
TOTAL FINANCE 25,493
HOLDING COMPANIES - 0.0%
SDW Holdings Corp., Series B (warrants) (a) 15,189 258
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
POLLUTION CONTROL - 0.9%
Allied Waste Industries, Inc. (a) 1,499,300 16,680
MEDIA & LEISURE - 0.9%
BROADCASTING - 0.4%
Chancellor Trust Class I Unit (e) 74 3,810
Paxson Communications Corp. (a) 301,000 3,010
6,820
LODGING & GAMING - 0.2%
Bally Gaming International, Inc. (warrants) (a) 225,000 309
Showboat, Inc. 180,300 3,674
3,983
PUBLISHING - 0.3%
K-III Communications Corp. (a) 500,000 5,625
TOTAL MEDIA & LEISURE 16,428
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 0.3%
BEVERAGES - 0.0%
Stroh Brewery Co. (warrants) (a) 9,400 $ 34
TOBACCO - 0.3%
UST, Inc. 200,000 5,225
TOTAL NONDURABLES 5,259
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Lamonts Apparel, Inc. (a):
(New) 562,103 53
(warrants) 92,674 -
53
TECHNOLOGY - 0.1%
COMMUNICATIONS EQUIPMENT - 0.0%
Hyperion Telecommunications, Inc.
(warrants) (a)(f) 8,000 240
COMPUTER SERVICES & SOFTWARE - 0.0%
Interact Systems, Inc. (warrants) (a)(f) 11,220 2
ELECTRONIC INSTRUMENTS - 0.1%
Berg Electronics Corp. (a)(f) 69,321 2,080
TOTAL TECHNOLOGY 2,322
TRANSPORTATION - 0.0%
AIR TRANSPORTATION - 0.0%
CHC Helicopter Corp. (warrants) (a) 30,960 -
UTILITIES - 2.1%
CELLULAR - 0.2%
Clearnet Communications, Inc. (a):
Class A (non-vtg.) 438,100 3,386
(warrants) 24,750 25
3,411
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.3%
El Paso Electric Co. (a) 890,613 $ 5,621
TELEPHONE SERVICES - 1.6%
Nextlink Communications, Inc. unit (f) 463,804 21,799
Sprint Corp. 200,000 8,775
30,574
TOTAL UTILITIES 39,606
TOTAL COMMON STOCKS
(Cost $146,408) 152,079
PREFERRED STOCKS - 17.5%
CONVERTIBLE PREFERRED STOCKS - 1.8%
ENERGY - 0.1%
OIL & GAS - 0.1%
Mesa, Inc. Series A, pay-in-kind 8% 369,249 2,354
MEDIA & LEISURE - 1.4%
BROADCASTING - 0.5%
SFX Broadcasting, Inc.:
$3.25 (f) 100,000 4,500
6 1/2% 100,000 4,500
9,000
LODGING & GAMING - 0.9%
Host Marriott Financial Trust $3.375 (f) 282,900 16,055
TOTAL MEDIA & LEISURE 25,055
NONDURABLES - 0.3%
FOODS - 0.3%
Chiquita Brands International, Inc.,
Series B, $3.75 100,900 5,903
TOTAL CONVERTIBLE PREFERRED STOCKS 33,312
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 15.7%
CONSTRUCTION & REAL ESTATE - 0.3%
REAL ESTATE INVESTMENT TRUSTS - 0.3%
Walden Residential Properties, Inc. 9.20% 227,300 $ 5,711
ENERGY - 0.6%
OIL & GAS - 0.6%
Gulf Canada Resources Ltd., Series 1, adj. rate 4,125,831 11,810
FINANCE - 1.6%
INSURANCE - 0.5%
American Annuity Group Capital Trust II 10,430 10,378
SAVINGS & LOANS - 1.1%
California Federal Bank FSB:
9 1/8% 666,190 16,571
11 1/2% 33,100 3,732
20,303
TOTAL FINANCE 30,681
HEALTH - 1.0%
MEDICAL FACILITIES MANAGEMENT - 1.0%
Fresenius Medical Care Capital Trust 9% 18,900 19,136
HOLDING COMPANIES - 0.3%
SDW Holdings Corp. 15% (f) 151,890 5,316
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Ampex Corp. 8% (e) 2,723 2,117
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
MEDIA & LEISURE - 10.8%
BROADCASTING - 9.5%
American Radio System pay-in-kind
11 3/8% (f) 62,530 $ 6,175
Cablevision Systems Corp.:
depositary shares 311,974 28,624
Series H, $11.75 pay-in-kind 310,970 29,464
Chancellor Radio Broadcasting Co. 12%
pay-in-kind (f) 13,800 1,359
Granite Broadcasting Corp. 12 3/4%
pay-in-kind (f) 22,020 20,038
PanAmSat Corp. 12 3/4% pay-in-kind 19,919 23,704
Paxson Communications Corp. $125 (a) 10,394 10,082
Time Warner, Inc., Series M, 10 1/4% pay-in-kind 55,884 60,355
179,801
PUBLISHING - 1.3%
K-III Communications Corp.:
Series B, $11.625 pay-in-kind 100,541 10,934
Series D, $200 130,270 12,766
23,700
TOTAL MEDIA & LEISURE 203,501
NONDURABLES - 0.6%
HOUSEHOLD PRODUCTS - 0.6%
Revlon Group, Inc., Series B, 14 7/8% 113,039 11,305
RETAIL & WHOLESALE - 0.4%
GROCERY STORES - 0.4%
Supermarkets General Holdings Corp.
pay-in-kind $3.52 (a) 324,488 6,693
TOTAL NONCONVERTIBLE PREFERRED STOCKS 296,270
TOTAL PREFERRED STOCKS
(Cost $324,255) 329,582
CASH EQUIVALENTS - 4.9%
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account dated 4/30/97 due 5/1/97
at 5.37% $ 89,829 $ 89,816
at 5.42% 2,951 2,951
TOTAL CASH EQUIVALENTS
(Cost $92,767) 92,767
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,861,588) $ 1,884,298
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
5. 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 (000S)
Atlantis Group, Inc.
(Trivest/Winston) 4/6/93 $ 46
American Azide
(warrants) 2/5/92 $ 0
American Pacific Corp.
(warrants) 2/5/92 $ 41
Ampex Corp. 8% 2/16/95 $ 1,430
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
Chancellor Trust
Class 1 unit 10/12/94 $ 1,495
Fairchild Semiconductor
Corp. 11.74%,
3/15/08
pay-in-kind 4/3/97 $ 4,452
Freuhauf Trailer 5/16/95 to
Corp. (warrants) 5/18/95 $ 1,335
Hat Brands, Inc. 9/2/92 to
(warrants) 2/23/94 $ 0
Hat Brands, Inc.
Class 1 unit 2/22/94 $ 1,500
Museum Towers LLC
15%, 11/7/01 11/7/96 $ 10,000
6. 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 $291,728,000 or 15.4% of net
assets.
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. Represents number of units held.
9. Debt obligation initially issued at one coupon which converts to a
highter coupon at a specified date.
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 0.4% BBB 1.3%
Ba 11.5% BB 8.6%
B 41.4% B 42.7%
Caa 8.6% CCC 5.5%
Ca, C 0.0% CC, C 1.8%
D 0.4%
The percentage not rated by both S&P and Moody's amounted to 4.9%. FMR has
determined that unrated debt securities that are lower quality account for
4.9% 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 87.9%
Canada 5.5
United Kingdom 2.9
Luxembourg 1.4
Mexico 1.4
Others (individually less than 1%) 0.9
TOTAL 100.0%
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $1,862,957,000 Net unrealized appreciation aggregated
$21,341,000 of which $80,512,000 related to appreciated investment
securities and $59,171,000 related to depreciated investment securities.
The fund hereby designates approximately $417,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
(EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 1,884,298
agreements of $92,767) (cost $1,861,588) - See
accompanying schedule

Cash 764

Receivable for investments sold 16,635

Dividends receivable 1,335

Interest receivable 21,689

Redemption fees receivable 5

TOTAL ASSETS 1,924,726

LIABILITIES

Payable for investments purchased $ 31,551

Distributions payable 1,898

Accrued management fee 1,250

Other payables and accrued expenses 7

TOTAL LIABILITIES 34,706

NET ASSETS $ 1,890,020

Net Assets consist of:

Paid in capital $ 1,832,869

Undistributed net investment income 14,583

Accumulated undistributed net realized gain (loss) on 19,858
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 22,710
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 151,401 shares outstanding $ 1,890,020

NET ASSET VALUE, offering price and redemption price $12.48
per share ($1,890,020 (divided by) 151,401 shares)

</TABLE>

STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 19,705
Dividends

Interest 132,378

TOTAL INCOME 152,083

EXPENSES

Management fee $ 13,079

Non-interested trustees' compensation 8

Total expenses before reductions 13,087

Expense reductions (60) 13,027

NET INVESTMENT INCOME 139,056

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

Investment securities 27,430

Foreign currency transactions (2) 27,428

Change in net unrealized appreciation (depreciation) on:

Investment securities (7,314)

Assets and liabilities in foreign currencies (5) (7,319)

NET GAIN (LOSS) 20,109

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 159,165
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 139,056 $ 92,265
Net investment income

Net realized gain (loss) 27,428 43,949

Change in net unrealized appreciation (depreciation) (7,319) 13,732

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 159,165 149,946
FROM OPERATIONS

Distributions to shareholders (134,959) (99,260)
From net investment income

From net realized gain (28,078) (6,747)

In excess of net realized gain - (2,523)

TOTAL DISTRIBUTIONS (163,037) (108,530)

Share transactions 859,540 685,155
Net proceeds from sales of shares

Reinvestment of distributions 134,509 87,469

Cost of shares redeemed (456,389) (269,013)

Redemption fees 920 688

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 538,580 504,299
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 534,708 545,715

NET ASSETS

Beginning of period 1,355,312 809,597

End of period (including undistributed net investment $ 1,890,020 $ 1,355,312
income of $14,583 and $7,737, respectively)

OTHER INFORMATION
Shares

Sold 68,819 55,579

Issued in reinvestment of distributions 10,830 7,132

Redeemed (36,614) (21,882)

Net increase (decrease) 43,035 40,829

</TABLE>

FINANCIAL HIGHLIGHTS

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

1997 1996 1995 1994 C 1993

SELECTED PER-SHARE DATA

Net asset value, beginning $ 12.510 $ 11.990 $ 11.880 $ 12.220 $ 11.900
of period

Income from Investment 1.054 B 1.099 1.076 1.101 1.175
Operations
Net investment income

Net realized and unrealized .192 .723 .139 .357 .672
gain (loss)

Total from investment 1.246 1.822 1.215 1.458 1.847
operations

Less Distributions

From net investment income (1.033) (1.190) (.927) (.976) (1.183)

In excess of net - - (.109) (.078) -
investment income

From net realized gain (.250) (.087) (.080) (.790) (.370)

In excess of net realized gain - (.033) - - -

Total distributions (1.283) (1.310) (1.116) (1.844) (1.553)

Redemption fees added to .007 .008 .011 .046 .026
paid in capital

Net asset value, end of period $ 12.480 $ 12.510 $ 11.990 $ 11.880 $ 12.220

TOTAL RETURN A 10.57% 16.06% 11.07% 12.70% 16.96%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 1,890 $ 1,355 $ 810 $ 641 $ 601
(in millions)

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

Ratio of expenses to average .80% .79% .80% .75% .70%
net assets after expense D
reductions

Ratio of net investment income 8.51% 8.85% 8.41% 8.07% 9.57%
to average net assets

Portfolio turnover rate 102% 170% 172% 213% 136%

Average commission rate E $ .0392

</TABLE>

H TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
I NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
J EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
K FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
L FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

7. 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 financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued by a pricing service at their market values as determined by
their most recent bid prices in the principal market (sales prices if the
principal market is an exchange) in which such securities are normally
traded. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
securities where the ex-dividend date may have passed, are recorded as soon
as the fund is informed of the ex-dividend date. Non-cash dividends
included in dividend income, if any, are recorded at the fair market value
of the securities received. Interest income, 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. 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.
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, which may result in distribution
reclassifications, are primarily due to differing treatments for market
discount, partnerships and losses deferred due to wash sales and paydowns.
The fund also utilized earnings and profits distributed to shareholders on
redemption of shares as part of the dividends paid deduction for income tax
purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
REDEMPTION FEES. Shares 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.
8. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
currency contracts is determined using contractual currency exchange rates
established at the time of each trade. The cost of the foreign currency
contracts is included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $21,814,000 or
1.2% of net assets.
9. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $2,011,526,000 and $1,530,926,000, respectively, of which U.S.
government and government agency obligations aggregated $0 and $29,156,000,
respectively.
10. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.80% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$23,000 for the period.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. 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 $19,000 for the period.
11. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $60,000 under these
arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Spartan High Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan High Income Fund, including the
schedule of portfolio investments, as of April 30, 1997, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan High Income Fund as of April 30,
1997, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 10, 1997
DISTRIBUTIONS

The Board of Trustees of Spartan High Income Fund voted to pay on June 9,
1997, to shareholders of record at the opening of business on June 6, 1997,
a distribution of $.13 per share derived from capital gains realized from
sales of portfolio securities.
A total of .05% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 8% of the dividends distributed during the fiscal year qualifies
for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
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SM
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1-800-544-5555
PRESS
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1
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4
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5
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0
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WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
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research and analysis tools . . . all on your desktop. Call Fidelity at
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* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
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
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
The Bank of New York
New York, NY
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Spartan Investment Grade Bond
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Spartan Short-Term Bond
Target Timeline 1999, 2001 & 2003
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(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

SHORT-INTERMEDIATE
GOVERNMENT
FUND
ANNUAL REPORT
APRIL 30, 1997
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 14 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 18 Notes to the financial statements.

REPORT OF INDEPENDENT 20 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 21

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value), and the effect of the $5
account closeout fee on an average-sized account. You can also look at the
fund's income, as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 LIFE OF
YEAR FUND

Spartan Short-Intermediate Government 5.56% 24.80%

Salomon Brothers Treasury/Agency 1-5 Year 6.18% n/a
Index

Short-Intermediate U.S. Government Funds 5.61% n/a
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year or since the fund started on
December 18, 1992. For example, if you invested $1,000 in a fund that had a
5% return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to the performance of the Salomon
Brothers Treasury/Agency 1-5 Year Index - a market capitalization weighted
index of U.S. Treasury and U.S. government agency securities with
fixed-rate coupons and weighted average lives between one and five years.
To measure how the fund's performance stacked up against its peers, you can
compare it to the short-intermediate U.S. government funds average, which
reflects the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents a
peer group of 97 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 LIFE OF
YEAR FUND

Spartan Short-Intermediate Government 5.56% 5.20%

Salomon Brothers Treasury/Agency 1-5 Year Index 6.18% n/a

Short-Intermediate U.S. Government Funds Average 5.61% n/a

1997 1996 1995 1994 APRIL 30, 1993

Dividend return 6.94% 7.35% 7.12% 6.14% 2.53%

Capital appreciation return -1.38% -0.44% -0.54% -5.87% 0.88%

Total return 5.56% 6.91% 6.58% 0.27% 3.41%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains paid
by the fund are reinvested. Capital appreciation returns and total returns
include the effect of the $5 account closeout fee on an average-sized
account.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.88(cents) 31.02(cents) 63.91(cents)

Annualized dividend rate 6.43% 6.69% 6.84%

30-day annualized yield 6.11% - -

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 $9.24 over
the past one month, $9.35 over the past six months, and $9.35 over the past
one year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
A relatively favorable inflation
backdrop that steadied fears of
higher interest rates helped
spark an April rally that buoyed the
performance of the U.S. taxable
bond market for the 12 months
ended April 30, 1997. The
Lehman Brothers Aggregate
Bond Index - a broad measure
of the U.S. taxable bond market
- - returned 7.09% over that
period. For much of the year,
bonds were affected by
increasing expectations of
economic growth and inflation.
While responding to mixed
economic statistics, the bias of
the market was toward higher
rates. With interest rates
finishing the period slightly higher
than where they began, the
performance of most bonds
consisted almost entirely of
income returns as opposed to
price gains or losses. In his
February testimony before
Congress, Federal Reserve
Board Chairman Alan Greenspan
indicated that the Fed was
inclined to raise the rate banks
charge each other for overnight
loans - known as the fed funds
target rate - to head off inflation
that might be caused by a tight
labor market. On March 25, the
Fed followed through by raising
the target rate by 0.25% to
5.50%. However, this move had
largely been priced into the
market. When producer and
consumer price indexes
continued to offer a favorable
inflation outlook in April, a market
rally in all debt market sectors
ensued, helping to ease much of
the bond market's negative price
performance posted earlier in the
period.
An interview with Curt Hollingsworth, Portfolio Manager of Spartan
Short-Intermediate Government Fund
Q. HOW DID THE FUND PERFORM, CURT?
A. For the 12-month period ending April 30, 1997, the fund had a total
return of 5.56%. To compare the fund's performance with that of its
competition, the short-intermediate U.S. government funds average had a
total return of 5.61%, according to Lipper Analytical Services. To gauge
how the fund did relative to the short-intermediate government securities
market, the Salomon Brothers Treasury/Agency 1-5 Year Index had a 12-month
total return 6.18%.
Q. THERE WAS A PRONOUNCED SHIFT IN THE BOND MARKETS DURING THE PAST SIX
MONTHS. CAN YOU DESCRIBE THE SHIFT AND TALK ABOUT SOME OF THE REASONS
BEHIND IT?
A. Sure. The period got off to a good start, characterized by slow, but
steady economic growth, low inflation and stable interest rates. Interest
rates actually fell in October and November as investors were encouraged by
the fact that inflation appeared to be quite low and the Federal Reserve
Board made no attempt to nudge short-term interest rates higher. But in
December, bond prices - which move in the opposite direction of interest
rates - dropped due to fears that stronger-than-expected economic growth
could incite a new bout of inflation and potentially force the Fed to raise
rates. Throughout most of January and February, bonds remained in a narrow
trading range absent convincing evidence about the future direction of the
economy, inflation and interest rates. Then in March, the Fed boosted its
target rate for Federal funds - or overnight loans between banks - a
quarter percentage point to 5.50% in an effort to stave off any future
inflation. That move sent bond yields higher and bond prices lower for a
brief period. There was no change in Fed policy in April, and the bond
market rebounded somewhat as yields fell slightly.
Q. DID YOU ALTER YOUR STRATEGY IN RESPONSE TO RISING INTEREST RATES?
A. No, I didn't. The fund's duration - or interest rate sensitivity -
remained neutral; that is, the fund wasn't structured in anticipation of
interest rate moves. Instead, it was structured to match the interest rate
sensitivity of the market for 1-5 year government securities, as reflected
by the fund's index. I believe that it's impossible to predict the
direction of interest rates with any great consistency over a long period
of time. That's why I don't try to "time the market" by structuring the
portfolio based on someone's view about the future direction of interest
rates. Instead, I tried to add value by managing the fund's sector weights
and by focusing on individual security selection.
Q. HOW DID YOU DIVIDE THE FUND'S HOLDINGS AMONG ITS VARIOUS SECTORS?
A. U.S. agency securities were the largest sector concentration at the end
of the period. Within the agency sector, I invested in bonds issued by
agencies such as the Federal National Mortgage Association and the Agency
for International Development notes issued by the State of Israel and
backed by the full faith and credit of the U.S. government.
Q. WHAT CHOICES DID YOU MAKE IN THE MORTGAGE SECTOR?
A. I focused on mortgage securities with coupons - or the interest rates
the borrower promises to pay - that were either much higher or lower than
current interest rates. Here's why: Mortgage-backed securities are subject
to prepayment risk - or the risk that they will be paid off before maturity
as mortgage holders refinance their debt. Both rising and falling interest
rates typically set off changes in prepayment patterns that can
dramatically affect the prices of mortgage-backed securities. The bonds
most vulnerable to prepayment activity are those that have coupons close to
current market rates. I am very careful to select mortgage securities that
I believe will allow the fund to closely track the benchmark.
Q. WHAT'S IN STORE FOR THE COMING MONTHS?
A. Looking ahead, investors will likely continue to scrutinize every new
piece of economic data, looking for clues as to whether the Fed will move
to change interest rates at its next meeting in July. In the meantime,
contradictory economic data may mean more volatility for the fixed-income
markets. But regardless of the direction of interest rates, I'll focus on
choosing bonds whose prices are lower than I believe they should be, and
sell those that have exceeded their fair value relative to other bonds in
the marketplace. In addition, I will look for opportunities that may pop up
due to price inefficiencies with the idea of exploiting the anomalies for
the benefit of the fund.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: high current income
with preservation of capital
FUND NUMBER: 474
TRADING SYMBOL: SPSIX
START DATE: December 18,
1992
SIZE: as of April 30, 1997,
more than $68 million
MANAGER: Curt
Hollingsworth, since 1992;
manager, various Fidelity
and Spartan Government
funds; joined Fidelity in 1983
(checkmark)
CURT HOLLINGSWORTH ON
MANAGING IN A VOLATILE
ENVIRONMENT:
"While few investors welcome
volatility, it often creates
opportunities. As manager of
a government securities
mutual fund, my job is to buy
bonds that I think are cheap
and have the potential to rise
in value and to sell those
securities that I think have
reached their full value relative
to other bonds in the
marketplace. A moderate
amount of volatility can make
that task easier. Absent
volatility over much of 1996,
bonds were priced quite
efficiently. By that, I mean that
there were fewer
opportunities to find
securities that I felt were
significantly underpriced
relative to their fair value. But
even a moderate amount of
volatility can create price
inefficiencies. While the
headlines may suggest
otherwise, I would not
necessarily characterize the
past six months as a very
volatile period for
fixed-income securities. Bond
yields and prices remained in
a relatively narrow range,
even though interest rates
reversed course."
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

Zero 9.1 -
Coupon
Bonds

Less than 4.7 1.8
5%

5 - 9.6 17.1
5.99%

6 - 4.4 3.8
6.99%

7 - 17.8 17.8
7.99%

8 - 12.3 20.2
8.99%

9 - 21.6 20.8
9.99%

10 - 8.2 8.7
10.99%

11% and 7.3 7.5
over

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING SHORT-TERM INVESTMENTS.
AVERAGE YEARS TO MATURITY AS OF APRIL 30, 1997
6 MONTHS AGO

Years 3.3 3.3

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 APRIL 30, 1997
6 MONTHS AGO

Years 2.3 2.4

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 AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30,1997 AS OF OCTOBER 31, 1996
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 47.0
Row: 1, Col: 3, Value: 22.7
Row: 1, Col: 4, Value: 25.3
Mortgage-backed
securities 25.7%
U.S. Treasury
obligations 36.3%
U.S. government
agency obligations 35.7%
Short-term
investments 2.3%

Mortgage-backed
securities 25.3%
U.S. Treasury
obligations 22.7%
U.S. government
agency obligations 47.0%
Short-term
investments 5.0%

Row: 1, Col: 1, Value: 2.3
Row: 1, Col: 2, Value: 35.7
Row: 1, Col: 3, Value: 36.3
Row: 1, Col: 4, Value: 25.7
INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 69.7%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 22.7%
9 1/4%, 8/15/98 $ 10,400,000 $ 10,799,776
8 7/8%, 11/15/98 1,405,000 1,459,879
8%, 8/15/99 1,900,000 1,965,607
7 7/8%, 8/15/01 1,510,000 1,583,854
15,809,116
U.S. GOVERNMENT AGENCY OBLIGATIONS - 47.0%
Federal National Mortgage Association 4.95%, 9/30/98 2,500,000 2,457,800
Financing Corp. stripped principal 0%, 6/6/02 6,200,000 4,415,764
Government Trust Certificates (assets of Trust guaranteed by
U.S. Government through Defense
Security Assistance Agency):
Class 1-C, 9 1/4%, 11/15/01 3,022,041 3,185,231
Class 2-E, 9.40%, 5/15/02 988,328 1,043,664
Guaranteed Export Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank):
Series 1994-F, 8.187%, 12/15/04 1,487,009 1,547,464
Series 1994-A, 7.12%, 4/15/06 460,891 464,924
Guaranteed Trade Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1993-A,
4.86%, 4/1/98 800,000 795,704
Overseas Private Investment Corp. U.S. Government
guaranteed participation certificate
Series 1994-1995, 6.08%, 8/15/04 730,000 708,421
State of Israel (guaranteed by U.S. Government through
Agency for International Development):
7 1/8%, 8/15/99 9,739,000 9,870,749
7 3/4%, 11/15/99 514,000 527,893
0%, 11/15/00 2,440,000 1,935,188
8%, 11/15/01 3,406,000 3,571,463
5 5/8%, 9/15/03 1,714,000 1,613,131
U.S. Department of Housing and Urban Development
government guaranteed participation certificates
Series 1996-A:
6.24%, 8/1/98 500,000 499,535
6.59%, 8/1/00 140,000 139,685
32,776,616
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $49,031,191) 48,585,732
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 20.8%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.3%
5 1/2%, 1/1/03 to 5/1/03 $ 3,875,950 $ 3,676,496
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.2%
11 1/2%, 8/1/14 119,997 134,481
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 15.3%
10%, 2/15/10 to 7/15/20 2,690,034 2,936,428
10 1/2%, 1/15/21 to 2/15/25 2,428,120 2,685,861
10 3/4%, 3/15/10 82,759 91,664
11%, 1/15/10 to 1/15/21 1,536,494 1,717,048
11 1/2%, 3/15/10 to 4/15/20 2,572,222 2,904,037
12%, 1/15/14 to 2/15/16 265,366 305,203
13%, 9/15/14 51,272 59,730
10,699,971
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $14,536,214) 14,510,948
COLLATERALIZED MORTGAGE OBLIGATIONS - 4.5%
U.S. GOVERNMENT AGENCY - 4.5%
Federal Home Loan Mortgage Corporation
planned amortization class:
Series 1511 Class D, 6%, 10/15/04 1,000,000 992,813
Series 1727 Class D, 6 1/2%, 8/15/14 710,000 711,109
Federal National Mortgage Association planned amortization
class Series 1994-51 Class PD, 5 3/4%, 2/25/15 1,450,000 1,435,500
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $3,132,935) 3,139,422
CASH EQUIVALENTS - 5.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.37%, dated
4/30/97 due 5/1/97 $ 3,514,524 3,514,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $70,214,340) $ 69,750,102
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $70,216,754. Net unrealized depreciation aggregated
$466,652, of which $389,304 related to appreciated investment securities
and $855,956 related to depreciated investment securities.
At April 30, 1997, the fund had a capital loss carryforward of
approximately $3,757,000 of which $168,000, $2,326,000, $582,000 and
$681,000 will expire on April 30, 2002, 2003, 2004 and 2005, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 69,750,102
agreements of $3,514,000) (cost $70,214,340) -
See accompanying schedule

Cash 309,294

Interest receivable 970,347

TOTAL ASSETS 71,029,743

LIABILITIES

Payable for investments purchased $ 1,997,843

Distributions payable 46,074

Accrued management fee 37,287

TOTAL LIABILITIES 2,081,204

NET ASSETS $ 68,948,539

Net Assets consist of:

Paid in capital $ 73,612,871

Accumulated net investment (loss) (40,196)

Accumulated undistributed net realized gain (loss) (4,159,898)
on investments

Net unrealized appreciation (depreciation) on (464,238)
investments

NET ASSETS, for 7,436,199 shares outstanding $ 68,948,539

NET ASSET VALUE, offering price and redemption price per $9.27
share ($68,948,539 (divided by) 7,436,199 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 5,609,425
Interest

EXPENSES

Management fee $ 473,885

Non-interested trustees' compensation 434

TOTAL EXPENSES 474,319

NET INVESTMENT INCOME 5,135,106

REALIZED AND UNREALIZED GAIN (LOSS) (1,283,157)
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on 134,590
investment securities

NET GAIN (LOSS) (1,148,567)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,986,539
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 5,135,106 $ 6,582,065
Net investment income

Net realized gain (loss) (1,283,157) 604,585

Change in net unrealized appreciation (depreciation) 134,590 (694,289)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,986,539 6,492,361
FROM OPERATIONS

Distributions to shareholders from net investment income (4,989,807) (6,559,063)

Share transactions 25,853,459 61,555,036
Net proceeds from sales of shares

Reinvestment of distributions 4,242,939 5,559,504

Cost of shares redeemed (38,422,781) (82,657,587)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (8,326,383) (15,543,047)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (9,329,651) (15,609,749)

NET ASSETS

Beginning of period 78,278,190 93,887,939

End of period (including accumulated net investment $ 68,948,539 $ 78,278,190
(loss) income of $(40,196) and $35,147,
respectively)

OTHER INFORMATION
Shares

Sold 2,762,315 6,427,366

Issued in reinvestment of distributions 453,855 581,016

Redeemed (4,108,063) (8,627,361)

Net increase (decrease) (891,893) (1,618,979)

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED APRIL 30, DECEMBER 18,
1992
(COMMENCEMENT
OF OPERATIONS) TO
APRIL 30,

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 E 1993

SELECTED PER-SHARE DATA

Net asset value, beginning $ 9.400 $ 9.440 $ 9.490 $ 10.090 $ 10.000
of period

Income from Investment .658 D .688 .665 .616 .257
Operations
Net investment income

Net realized and unrealized (.149) (.045) (.065) (.579) .083
gain (loss)

Total from investment .509 .643 .600 .037 .340
operations

Less Distributions

From net investment income (.639) (.683) (.650) (.617) (.250)

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

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

Total distributions (.639) (.683) (.650) (.637) (.250)

Net asset value, end $ 9.270 $ 9.400 $ 9.440 $ 9.490 $ 10.090
of period

TOTAL RETURN B, C 5.57% 6.92% 6.60% .29% 3.43%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 68,949 $ 78,278 $ 93,888 $ 53,726 $ 54,853
(000 omitted)

Ratio of expenses to average .65% .45% .10% .10% .02% A,
net assets F F F F

Ratio of net investment income 7.04% 7.16% 7.35% 7.33% 7.28% A
to average net assets

Portfolio turnover rate 104% 161% 282% 271% 587% A

</TABLE>

A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

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 financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the 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. 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 with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
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 substantially
all of its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income Tax
Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, market discount, capital loss
carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net realized
gain (loss) on investments may include temporary book and tax basis
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $73,818,937 and $84,696,633, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.65% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$2,660 for the period.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Fixed-Income Trust and the Shareholders of
Spartan Short-Intermediate Government Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Fixed-Income Trust: Spartan Short-Intermediate Government Fund,
including the schedule of portfolio investments, as of April 30, 1997, and
the related statement of operations for the year then ended, the statement
of changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the four years in the period then
ended and for the period December 18, 1992 (commencement of operations) to
April 30, 1993. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Fixed-Income Trust: Spartan Short-Intermediate Government Fund
as of April 30, 1997, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years
in the period then ended and for the period December 18, 1992 (commencement
of operations) to April 30, 1993, in conformity with generally accepted
accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 6, 1997
DISTRIBUTIONS

A total of 47.54% of the dividends distributed 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 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
MANAGING YOUR INVESTMENTS

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)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(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
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
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
Fred L. Henning, Jr., Vice President
Curtis Hollingsworth, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
Ginnie Mae
Global Bond
Government Securities
Intermediate Bond
Investment Grade Bond
New Markets Income
Short-Intermediate Government
Short-Term Bond
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Short-Intermediate Government
Spartan Short-Term Bond
Target Timeline1999, 2001 & 2003
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE

(registered trademark)