FIDELITY UNION STREET TRUST, N-30D, 1996-04-11

FIDELITY UNION STREET TRUST
N-30D, 1996-04-11

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FIDELITY

(registered trademark)
EXPORT
FUND
SEMIANNUAL REPORT
FEBRUARY 29, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 9 A summary of the major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 20 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 24 Notes to the financial statements.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
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.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term. You also can help to manage some of the risks of investing
through diversification. A stock fund is already diversified because it
invests in many issues. You can diversify even further by placing some of
your money in several different types of stock funds or in other investment
categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

Export Fund -5.09% 28.66% 35.10%

Export Fund (incl. 3% sales charge) -7.94% 24.80% 31.05%

S&P 500(registered trademark) 15.32% 34.70% 43.83%

Growth Funds Average 9.86% 30.73% n/a

CUMULATIVE TOTAL RETURNS reflect the fund's actual performance over a set
period - in this case, six months, one year, or since the fund began on
October 4, 1994. 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 Standard & Poor's Composite Index
of 500 Stocks - a common proxy for the U.S. stock market. To measure how
the fund's performance stacked up against its peers, you can compare it to
the growth funds average, which reflects the performance of 623 funds with
similar objectives tracked by Lipper Analytical Services over the past six
months. Both benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Export Fund 28.66% 23.82%

Export Fund (incl. 3% sales charge) 24.80% 21.17%

S&P 500(registered trademark) 34.70% 29.46%

Growth Funds Average 30.73% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Export FunS&P 500
10/04/94 9700.00 10000.00
10/31/94 10252.90 10,244.46
11/30/94 9932.80 9,871.36
12/31/94 9942.83 10,017.75
01/31/95 9729.22 10,277.51
02/28/95 10185.58 10,678.03
03/31/95 10418.61 10,993.14
04/30/95 10942.94 11,316.88
05/31/95 11389.59 11,769.22
06/30/95 12583.90 12,042.62
07/31/95 13516.04 12,441.95
08/31/95 13807.33 12,473.18
09/30/95 14302.53 12,999.55
10/31/95 13083.96 12,953.14
11/30/95 13371.84 13,521.78
12/31/95 13146.10 13,782.21
01/31/96 12753.38 14,251.36
02/29/96 13104.76 14,383.47

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Export Fund on October 4, 1994, when the fund started and paid a 3% sales
charge. As the chart shows, by February 29, 1996, the value of your
investment would have grown to $13,105 - a 31.05% increase on your initial
investment. For comparison, look at how the S&P 500 did over the same
period. With dividends reinvested, the same $10,000 investment in the S&P
500 would have grown to $14,383 - a 43.83% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks 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)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Arieh Coll, Portfolio Manager of Fidelity Export Fund
Q. ARIEH, HOW HAS THE FUND PERFORMED?
A. For the six months ended February 29, 1996, the fund had a total return
of -5.09%. That lagged the 9.86% return during the same period for the
growth funds average tracked by Lipper Analytical Services. For the 12
months ended February 29, 1996, the fund had a total return of 28.66%,
while the growth funds average posted a 30.73% return.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF THE AVERAGE FUND OVER THE
PAST SIX MONTHS?
A. There were two reasons. First of all, many stocks that made up the fund
were those of small market capitalization stocks. Unfortunately, during
this period small-cap stocks did not perform as well as large-cap stocks,
such as those that make up the Dow Jones Industrial Average or the Standard
& Poor's Composite Index of 500 Stocks. The second reason was that the fund
held a substantial stake in technology stocks - 30.7% of the fund at the
end of the period - and since September that sector underperformed the
broad market as well. I think both areas - export-driven small-cap and
technology company stocks - should outperform the averages over a longer
period of time, but they didn't over the past six months. So as it turned
out, a lot of the companies that helped the fund perform well earlier in
the year were the same ones that hurt its performance over the past six
months.
Q. LET'S TALK ABOUT THE FUND'S TECHNOLOGY STAKE. EVEN THOUGH YOU'VE CUT
BACK INVESTMENTS THERE BY 11.2% OVER THE PERIOD, IT REMAINS THE FUND'S
LARGEST SECTOR, AT 30.7% OF INVESTMENTS AT THE END OF THE PERIOD.
A. I invest on a bottom-up basis. That is, I choose investments for the
fund stock-by-stock. That's the main reason why the fund's technology
allocation remains substantial - I like the prospects of many of the
companies in the sector. At the same time, I've reduced the fund's
investments in companies with business related to semiconductors and
cellular operators because the supply/demand dynamic became less
attractive. Oversupply forced many vendors to cut prices. In moving away
from these commodity-based types of industries, I've turned more toward
companies with proprietary products that have worldwide appeal. One area
that was particularly attractive to me was the electronic projection
market, including companies such as In-Focus and Proxima. These companies
sell electronic projectors that provide far brighter and more colorful
presentations than conventional overhead projectors. This market has grown
50% in each of the past two years.
Q. HOW HAVE YOU INVESTED IN THE MARKET AND ECONOMIC ENVIRONMENT WE'VE SEEN
OVER THE PERIOD?
A. Looking broadly, the market performed well, led by big company stocks.
Because statistics showed some weakness in the economy, many investors
sought so-called "safe" stocks - consumer nondurables, health care and
traditional big-name growth stocks that show steady earnings growth
regardless of the economic backdrop. I didn't follow the same path, because
I believed these types of stocks to be overvalued. I didn't want to buy a
company that was growing 15% per year, selling at 22 times earnings, when I
was able to find small-cap stocks growing 20% to 50% per year, selling at
15 times earnings. Unfortunately, smaller stocks didn't perform as well
over this short time period, but I believe the market eventually will come
to appreciate their value and help their performance in the future.
Q. DID THE STRENGTHENING DOLLAR OVER THE SECOND HALF OF 1995 GREATLY AFFECT
THE RESULTS OR STOCK PERFORMANCE OF THE COMPANIES IN THE FUND?
A. The increasing relative value of the dollar really wasn't an issue.
That's because I try to find companies that supply superior products, where
customers are less price-sensitive. An example would be Sodak Gaming, the
fund's largest holding at the end of the period. This company distributes
slot machines to casinos around the world. Its slot machines are some of
the most productive machines available - meaning the amount of money played
on the machines each day tends to exceed that of competitive products. Even
if the cost of Sodak's machine rises based on currency movements, a casino
in Switzerland, for example, probably would still buy it because it usually
brings in more money per day than a lower-priced local product.
Q. WHICH INVESTMENTS HELPED THE FUND'S PERFORMANCE OVER THE PAST SIX
MONTHS?
A. Sodak Gaming was one. Another was Oregon Metallurgical, a company that
sells titanium, a strong but light metal used in commercial aircraft such
as the Boeing 747. The commercial aerospace industry appears to be coming
out of a five-year down cycle, driven by demand for new and replacement
aircraft throughout the world. Oregon Metallurgical's backlog of orders
rose more than 60% in the last quarter of 1995. Another strong investment
during the period was Trimark, a Canadian mutual fund company that
benefited from a large influx of investor dollars. Also, IMC Fertilizer, a
fertilizer exporter, performed well as China and India substantially
increased their purchases.
Q. AND WHICH STOCKS DIDN'T TURN OUT AS WELL AS YOU WOULD HAVE LIKED?
A. Exide, a low-cost producer of car batteries, didn't meet earnings
expectations in the December 1995 quarter. In addition, Printronix posted
lower earnings in the fourth quarter as customers appeared to delay
purchases in anticipation of a new printer product. Further, Burr-Brown -
which the fund no longer held at the end of the period - was a victim of
the slowdown in semiconductor demand that I mentioned earlier.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I think the next six months probably will be a tough period for the U.S.
stock market. I find many of the large-cap stocks that have seen the
sharpest price gains to be fairly valued and don't believe the stock prices
deserve to go up dramatically. I believe earnings for the S&P 500 will grow
slowly or not at all in 1996, which could set the stage for a market
correction. Thus, on a risk/reward basis, the market looks less enticing
than it did six months ago. However, I do feel that small market cap export
stocks in the fund are undervalued and hopefully will perform well in the
coming months.
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: to increase the value
of the fund's shares by
investing mainly in the stocks
of North American
companies that are expected
to benefit from exporting
goods or services
START DATE: October 4, 1994
SIZE: as of February 29, 1996,
more than $277 million
MANAGER: Arieh Coll, since
October 1994; manager,
Fidelity Select Brokerage and
Investment Management
Portfolio, 1993-1995; Fidelity
Select Software and
Computer Services Portfolio,
1991-1994; Fidelity Select
Technology Portfolio,
1992-1993; joined Fidelity in
1989
(checkmark)
ARIEH COLL ON HIS INVESTING
PHILOSOPHY:
"I have several personal rules
of investing that I try to
remember each time I buy
and sell a stock. They include:
(solid bullet) DON'T LOSE MONEY. It's as
important, if not more
important, to limit losses as it
is to secure gains. Substantial
losses often prove difficult to
make up.
(solid bullet) INVEST WITHIN MY CIRCLE OF
COMPETENCE. If I don't feel
completely comfortable with
an investment, I stay away.
(solid bullet) STAY FOCUSED. I try to avoid
distractions that interfere
with my research. The reality
is that the more time one
spends doing basic research,
the more great companies
one will likely uncover.
(solid bullet) BE PATIENT. It may seem
obvious to me that a
company's stock is
undervalued, but sometimes it
takes a while for the stock
market to agree and push up
the price.
(solid bullet) INVEST WITH CONVICTION. If I
really like a company, I try to
buy a lot of its stock. Great
investment ideas don't pop up
every day.
INVESTMENT CHANGES

TOP TEN STOCKS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

Sodak Gaming, Inc. 4.8 1.1

Exide Corp. 3.7 2.9

Trimark Financial Corp. 3.2 2.0

TSX Corp. 2.9 4.2

CompUSA, Inc. 2.6 0.2

Central European Media Class C 2.1 0.0

Proxima Corp. 2.1 0.0

Oregon Metallurgical Corp. 2.1 0.7

Seagate Technology 2.0 0.0

Bay Networks, Inc. 1.8 0.0

TOP FIVE MARKET SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO

Technology 30.7 41.9

Basic Industries 10.6 5.6

Media & Leisure 8.9 3.3

Industrial Machinery & Equipment 8.7 13.0

Health 7.9 4.3

ASSET ALLOCATION
AS OF FEBRUARY 29, 1996 * AS OF AUGUST 31, 1995 **
Row: 1, Col: 1, Value: 1.7
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 48.6
Row: 1, Col: 4, Value: 48.6
Row: 1, Col: 1, Value: 4.2
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 47.9
Row: 1, Col: 4, Value: 47.9
Stocks 98.2%
Bonds 0.1%
Short-term
Investments 1.7%
NON-NORTH AMERICAN
INVESTMENTS 7.6%
Stocks 95.8%
Bonds 0.0%
Short-term
Investments 4.2%
NON-NORTH AMERICAN
INVESTMENTS 12.0%
*
**
NOTE: OF THE FUND'S 92.4% STAKE IN NORTH AMERICAN INVESTMENTS, 7.5% WAS
INVESTED IN CANADA AND 1.0% IN MEXICO ON FEBRUARY 29, 1996. ON AUGUST 31,
1995, 88.0% OF THE FUND'S ASSETS WAS INVESTED IN NORTH AMERICA, WHICH
INCLUDED A 9.2% STAKE IN CANADA AND 0.4% IN MEXICO.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 98.2%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 3.8%
AEROSPACE & DEFENSE - 3.7%
BE Aerospace, Inc. (a) 279,200 $ 3,594,689
C A E Industries Ltd. 154,200 1,223,720
Lockheed Martin Corp. 81 6,176
Moog, Inc. Class A 12,400 215,450
Precision Castparts Corp. 41,000 1,609,250
Rohr Industries, Inc. (a) 12,300 221,400
UNC, Inc. (a) 89,100 657,113
Wyman-Gordon Co. (a) 157,000 2,786,750
10,314,548
DEFENSE ELECTRONICS - 0.1%
Flir Systems, Inc. (a) 15,200 190,000
TOTAL AEROSPACE & DEFENSE 10,504,548
BASIC INDUSTRIES - 10.6%
CHEMICALS & PLASTICS - 5.5%
Cytec Industries, Inc. (a) 4,100 315,700
DESC (Desc Sociedad de Fomento Industrial SA de CV)
Class C (a) 358,000 1,373,666
Dow Chemical Co. 1,800 144,450
du Pont (E.I.) de Nemours & Co. 10,000 765,000
Ferro Corp. 5,600 142,800
First Mississippi Corp. 79,500 2,076,938
Great Lakes Chemical Corp. 50 3,575
Hanna (M.A.) Co. 11,900 336,175
IMC Fertilizer Group, Inc. 120,000 4,950,000
Landec Corp. 25,000 325,000
Raychem Corp. 40,900 2,653,388
Union Carbide Corp. 20,000 900,000
Vigoro Corp. 20,000 1,325,000
15,311,692
IRON & STEEL - 0.6%
Hexcel Corp. (a) 132,100 1,651,250
Material Sciences Corp. (a) 100 1,438
1,652,688
METALS & MINING - 4.5%
Aluminum Co. of America 100 5,675
Eldorado Ltd. (a) 120,000 689,605
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
METALS & MINING - CONTINUED
Inco Ltd. 100 $ 3,174
Kaiser Aluminum Corp. (a) 50,000 756,250
Oregon Metallurgical Corp. (a) 330,200 5,737,225
RMI Titanium Co. (a) 36,100 446,738
Stillwater Mining Co. (a) 56,900 1,251,800
Stillwater Mining Co. (a)(b) 100,000 2,200,000
Tremont Corp. (a) 52,900 1,302,663
12,393,130
TOTAL BASIC INDUSTRIES 29,357,510
CONSTRUCTION & REAL ESTATE - 1.5%
BUILDING MATERIALS - 0.0%
Grupo Cementos Chihuahua Class B 5,000 3,982
CONSTRUCTION - 1.5%
American Homestar Corp. (a) 140,250 2,208,938
Beazer Homes USA, Inc. (a) 49,300 936,700
Castle & Cooke, Inc. (a) 33 491
McDermott (J. Ray) SA 40,300 715,325
Ryland Group, Inc. 13,600 207,400
4,068,854
TOTAL CONSTRUCTION & REAL ESTATE 4,072,836
DURABLES - 0.1%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Cummins Engine Co., Inc. 2,400 101,100
TEXTILES & APPAREL - 0.1%
Adidas AG (a)(b) 2,000 127,636
Westpoint Stevens, Inc. Class A 500 9,750
137,386
TOTAL DURABLES 238,486
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 1.6%
ENERGY SERVICES - 1.1%
BJ Services Co. (a) 28,627 $ 790,821
BJ Services Co. (warrants) (a) 10,000 70,000
Transocean Drilling AS (a) 101,800 2,254,214
3,115,035
OIL & GAS - 0.5%
Barrett Resources Corp. (a) 5,100 122,400
Blue Range Resource Co. Class A (a)(b) 28,000 245,193
Swift Energy Co. (a) 89,500 1,040,438
1,408,031
TOTAL ENERGY 4,523,066
FINANCE - 7.5%
CLOSED END INVESTMENT COMPANY - 1.9%
Asia Tigers Fund, Inc. 100,000 1,237,500
India Fund 50,000 493,750
Malaysia Fund, Inc. 8,000 162,000
Mexico Equity & Income Fund 22,900 208,963
Mexico Fund, Inc. (The) 70,000 980,000
Morgan Stanley Asia-Pacific Fund, Inc. 90,000 1,215,000
Morgan Stanley India Investment Fund, Inc. 34,000 357,000
R.O.C. Taiwan Fund (SBI) 9,800 94,325
Taiwan Fund, Inc. 25,000 528,125
5,276,663
CREDIT & OTHER FINANCE - 0.4%
Cityscape Financial Corp. (a) 28,000 784,000
Triad Guaranty, Inc. (a) 12,300 382,838
1,166,838
INSURANCE - 0.0%
CMAC Investments 1,900 104,263
Gainsco, Inc. 700 7,613
111,876
SECURITIES INDUSTRY - 5.2%
A G F Management Ltd. Class B (non. vtg.) 6,900 98,816
CI Fund Management, Inc. 166,700 1,611,833
Lehman Brothers Holdings, Inc. 147,300 3,645,675
Trimark Financial Corp. 271,600 8,918,889
14,275,213
TOTAL FINANCE 20,830,590
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 7.9%
DRUGS & PHARMACEUTICALS - 4.3%
Allergan, Inc. 200 $ 7,450
Astra AB Class A Free shares 90,000 4,122,797
Biogen, Inc. (a) 23,000 1,503,625
Copley Pharmaceutical, Inc. (a) 1,200 22,650
Guilford Pharmaceuticals, Inc. (a) 82,500 2,000,625
ICN Pharmaceuticals, Inc. 12,700 292,100
IVAX Corp. 128,500 3,678,313
Penederm, Inc. (a) 10,000 125,000
Yamanouchi Pharmaceutical Co. Ltd. 5,000 111,623
11,864,183
MEDICAL EQUIPMENT & SUPPLIES - 3.0%
Becton, Dickinson & Co. 100 8,200
Circon Corp. (a) 50,000 656,250
De Rigo Spa sponsored ADR (a) 500 13,875
ICU Medical, Inc. (a) 90,000 1,327,500
Medisense, Inc. (a) 100 3,113
Millipore Corp. 92,400 4,100,250
Pall Corp. 30,000 817,500
Sofamor/Danek Group, Inc. (a) 40,100 1,308,263
U.S. Surgical Corp. 200 5,675
8,240,626
MEDICAL FACILITIES MANAGEMENT - 0.6%
Cohr, Inc. 2,000 28,000
Lincare Holdings, Inc. (a) 50,000 1,565,625
Renal Care Group, Inc. (a) 200 5,500
1,599,125
TOTAL HEALTH 21,703,934
INDUSTRIAL MACHINERY & EQUIPMENT - 8.7%
ELECTRICAL EQUIPMENT - 4.9%
Adflex Solutions 76,600 1,206,450
C-COR Electronics, Inc. (a) 12,940 216,745
Charter Power Systems, Inc. 60,100 1,750,413
Glenayre Technologies, Inc. 50,000 2,206,250
Oak Industries, Inc. (a) 1,800 42,975
Pacific Scientific Co. 100 2,275
TSX Corp. (a) 443,800 8,099,350
13,524,458
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 3.8%
Cascade Corp. 24,500 $ 324,625
Exide Corp. 338,600 10,327,300
MSC Industrial Direct, Inc. (a) 600 16,650
10,668,575
POLLUTION CONTROL - 0.0%
Zurn Industries, Inc. 200 4,325
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 24,197,358
MEDIA & LEISURE - 8.9%
BROADCASTING - 5.2%
Central European Media Class C (a) 257,000 5,750,375
Grupo Radio Centro SA de CV sponsored ADR 13,700 113,025
Grupo Televisa SA de CV sponsored ADR 200 4,900
Heartland Wireless Communications, Inc. (a) 110,700 2,795,175
Home Shopping Network, Inc. 100,000 1,050,000
PanAmSat Corp. 6,200 185,225
Telemundo Group, Inc. Class A (a) 250,500 4,477,688
14,376,388
LODGING & GAMING - 2.9%
Aztar Corp. (a) 37,500 295,313
Grand Casinos, Inc. (a) 30,500 972,188
Mirage Resorts, Inc. (a) 31,100 1,442,263
Penn National Gaming, Inc. (a) 181,500 3,040,125
Showboat, Inc. 91,100 2,186,400
Studio Plus Hotels, Inc. (a) 500 14,125
7,950,414
PUBLISHING - 0.8%
Big Flower Press Holdings, Inc. (a) 15,300 288,788
Playboy Enterprises, Inc. Class B 47,500 510,625
Times Mirror Co. Class A 800 27,200
Western Publishing Group, Inc. (a) 150,000 1,415,625
2,242,238
TOTAL MEDIA & LEISURE 24,569,040
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - 4.9%
FOODS - 0.6%
Chiquita Brands International, Inc. 100,000 $ 1,575,000
Dole Food, Inc. 100 4,025
1,579,025
HOUSEHOLD PRODUCTS - 2.0%
Alberto-Culver Co. Class A 300 9,825
DSG International Ltd. (a) 112,000 1,652,000
First Brands Corp. 4,800 128,400
Paragon Trade Brands, Inc. (a) 20,100 507,525
Rubbermaid, Inc. 113,100 3,180,938
5,478,688
TOBACCO - 2.3%
Philip Morris Companies, Inc. 40,200 3,979,800
RJR Nabisco Holdings Corp. 67,600 2,273,050
6,252,850
TOTAL NONDURABLES 13,310,563
PRECIOUS METALS - 3.7%
Barrick Gold Corp. 100 3,028
Firstmiss Gold, Inc. (a) 90,377 2,440,179
Kinross Gold Corp. (a) 241,300 2,245,102
Placer Dome, Inc. 1,900 53,900
TVI Pacific, Inc. (a) 1,140,700 2,106,010
TVX Gold, Inc. (a) 300,000 2,955,449
War Eagle Mining, Inc. (a) 163,800 334,688
10,138,356
RETAIL & WHOLESALE - 5.6%
APPAREL STORES - 0.2%
TJX Companies, Inc. 21,400 476,150
GROCERY STORES - 0.0%
Provigo, Inc. (a) 9,100 50,635
RETAIL & WHOLESALE, MISCELLANEOUS - 5.4%
BT Office Products International, Inc. (a) 79,600 1,621,850
National Media Corp. (a) 100 1,775
Sodak Gaming, Inc. (a) 489,800 13,224,600
U.S. Office Products Co. (a) 500 15,125
14,863,350
TOTAL RETAIL & WHOLESALE 15,390,135
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 1.8%
Barrett Business Services, Inc. (a) 31,100 $ 497,600
Craig (Jenny), Inc. 100,000 962,500
Franklin Quest Co. (a) 93,600 1,872,000
Lazare Kaplan International, Inc. (a) 206,300 1,753,550
5,085,650
TECHNOLOGY - 30.6%
COMMUNICATIONS EQUIPMENT - 3.1%
Cisco Systems, Inc. (a) 90,000 4,275,000
Digital Systems International, Inc. 200 3,013
IPC Information Systems, Inc. (a) 111,400 2,645,750
Teledata Communications Ltd. 179,000 1,633,375
Westell Technologies, Inc. Class A (a) 300 11,700
8,568,838
COMPUTER SERVICES & SOFTWARE - 9.0%
America Online, Inc. (a) 200 9,825
Arbor Software Corp. (a) 100 4,300
Ascend Communications, Inc. (a) 30,800 1,393,700
BDM International, Inc. (a) 100 4,038
Brock International, Inc. (a)(c) 295,500 2,844,188
Business Objects SA sponsored ADR (a) 10,800 807,300
CSG Systems International, Inc. 1,000 22,000
Ceridian Corp. (a) 46,100 1,982,300
CompUSA, Inc. (a) 180,300 7,212,000
Continuum Co., Inc. (a) 12,800 507,200
Dendrite International Corp. (a) 500 9,125
Desktop Data, Inc. (a) 500 15,250
ECI Telecom Ltd. 20,900 532,950
Electronics for Imaging, Inc. (a) 29,400 1,345,050
GMIS, Inc. (a) 200 2,625
Hogan Systems, Inc. (a) 67,300 824,425
Inference Corp. Class A (a) 100 1,925
Investment Technology Group, Inc. (a) 104,600 1,202,900
Meta Group, Inc. (a) 200 4,850
Modatech Systems, Inc. (a) 309,800 77,450
Paychex, Inc. 150 8,269
Physician Support Systems, Inc. (a) 15,000 266,250
Softkey International, Inc. (a) 207,200 4,995,463
Stratacom, Inc. (a) 20,200 808,000
SunGard Data Systems, Inc. (a) 4,300 147,275
25,028,658
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 12.4%
Bay Networks, Inc. (a) 125,000 $ 5,078,125
Gateway 2000, Inc. (a) 140,500 4,144,750
In-Focus Systems, Inc. (a) 111,300 4,173,750
International Business Machines Corp. 25,000 3,065,625
Metrologic Instruments (a) 10,700 125,725
Pitney Bowes, Inc. 69,200 3,338,900
Printronix, Inc. (a) 166,500 3,121,875
Proxima Corp. (a) 255,000 5,737,500
Seagate Technology (a) 83,400 5,441,850
Trident International, Inc. 6,000 108,000
34,336,100
ELECTRONIC INSTRUMENTS - 0.2%
Gelman Sciences Inc. (a) 25,100 596,125
Wandel & Goltermann Technologies, Inc. (a) 5,400 68,175
664,300
ELECTRONICS - 4.6%
Actel Corp. (a) 70,000 1,172,500
AMP, Inc. 70,000 2,983,750
CIDCO, Inc. (a) 95,000 3,372,500
Cyrix Corp. (a) 40,600 938,875
Harmonic Lightwaves, Inc. (a) 1,000 14,500
Maxim Integrated Products, Inc. (a) 38,300 1,388,375
Opal, Inc. (a) 100 1,225
Sierra Semiconductor Corp. (a) 129,600 2,980,800
Transwitch Corp. (a) 100 1,325
Wyle Laboratories 100 3,275
Zycon Corp. (a) 1,500 18,000
12,875,125
PHOTOGRAPHIC EQUIPMENT - 1.3%
Polaroid Corp. 84,500 3,718,000
TOTAL TECHNOLOGY 85,191,021
TRANSPORTATION - 0.4%
RAILROADS - 0.1%
Bombardier, Inc. Class B 18,500 276,754
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.3%
Airborne Freight Corp. 100 $ 2,788
Arkansas Best Corp. 147,600 922,500
Consolidated Freightways, Inc. 100 2,450
Hunt (J.B.) Transport Services Inc. 100 1,825
929,563
TOTAL TRANSPORTATION 1,206,317
UTILITIES - 0.6%
CELLULAR - 0.0%
AirTouch Communications, Inc. (a) 300 9,300
TELEPHONE SERVICES - 0.6%
Telebras sponsored ADR 30,000 1,575,000
TOTAL UTILITIES 1,584,300
TOTAL COMMON STOCKS
(Cost $246,858,809) 271,903,710
CONVERTIBLE BONDS - 0.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT
TECHNOLOGY - 0.1%
COMPUTER SERVICES & SOFTWARE - 0.1%
Softkey International, Inc. 5 1/2%,
11/1/00 (b) (Cost $297,250) - $ 400,000 335,000
REPURCHASE AGREEMENTS - 1.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.41%, dated
2/29/96 due 3/1/96 4,793,720 4,793,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $251,949,059) $ 277,031,710
LEGEND
1. Non-income producing
2. 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 $2,907,829 or 1.0% of net
assets.
3. Affiliated company (see Note 7 of Notes to Financial Statements).
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 83.9%
Bermuda 2.1
Canada 7.5
Mexico 1.0
Sweden 1.5
Others (individually less than 1%) 4.0
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $252,037,909. Net unrealized appreciation
aggregated $24,993,801, of which $34,600,057 related to appreciated
investment securities and $9,606,256 related to depreciated investment
securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 277,031,710
agreements of $4,793,000) (cost $251,949,059) -
See accompanying schedule

Cash 1,963

Receivable for investments sold 14,081,750

Receivable for fund shares sold 297,659

Dividends receivable 92,275

Interest receivable 7,761

TOTAL ASSETS 291,513,118

LIABILITIES

Payable for investments purchased $ 10,154,171

Payable for fund shares redeemed 3,735,156

Accrued management fee 152,217

Other payables and accrued expenses 126,569

TOTAL LIABILITIES 14,168,113

NET ASSETS $ 277,345,005

Net Assets consist of:

Paid in capital $ 265,213,442

Accumulated net investment (loss) (779,261)

Accumulated undistributed net realized gain (loss) on (12,171,840)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 25,082,664
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 21,874,189 shares outstanding $ 277,345,005

NET ASSET VALUE and redemption price per share $12.68
($277,345,005 (divided by) 21,874,189 shares)

Maximum offering price per share (100/97.00 of $12.68) $13.07

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INVESTMENT INCOME $ 841,009
Dividends

Interest 424,421

TOTAL INCOME 1,265,430

EXPENSES

Management fee $ 1,281,866

Transfer agent fees 557,386

Accounting fees and expenses 124,889

Non-interested trustees' compensation 874

Custodian fees and expenses 37,676

Registration fees 17,573

Audit 12,254

Legal 625

Interest 25,375

Miscellaneous 599

Total expenses before reductions 2,059,117

Expense reductions (14,426) 2,044,691

NET INVESTMENT INCOME (LOSS) (779,261)

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

Investment securities (including realized loss of 4,653,896
$3,452,012 on sales of investments in affiliated
issuers)

Foreign currency transactions 3,309 4,657,205

Change in net unrealized appreciation (depreciation) on:

Investment securities (32,230,981)

Assets and liabilities in foreign currencies (415) (32,231,396)

NET GAIN (LOSS) (27,574,191)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (28,353,452)
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS OCTOBER 4, 1994
ENDED (COMMENCEMENT
FEBRUARY 29,1996 OF
(UNAUDITED) OPERATIONS) TO
AUGUST 31, 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ (779,261) $ (410,125)
Net investment income (loss)

Net realized gain (loss) 4,657,205 13,240,066

Change in net unrealized appreciation (depreciation) (32,231,396) 57,314,060

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (28,353,452) 70,144,001
FROM OPERATIONS

Distributions to shareholders from net realized gains (27,055,121) (61,452)

Share transactions 240,918,699 727,157,181
Net proceeds from sales of shares

Reinvestment of distributions 26,820,979 60,632

Cost of shares redeemed (438,412,894) (293,873,568)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (170,673,216) 433,344,245
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (226,081,789) 503,426,794

NET ASSETS

Beginning of period 503,426,794 -

End of period (including accumulated net investment $ 277,345,005 $ 503,426,794
loss of $779,261 and $0, respectively)

OTHER INFORMATION
Shares

Sold 17,341,783 59,469,006

Issued in reinvestment of distributions 2,020,235 6,125

Redeemed (32,891,397) (24,071,563)

Net increase (decrease) (13,529,379) 35,403,568

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 4, 1994
FEBRUARY 29, 1996 (COMMENCEMENT OF
(UNAUDITED) OPERATIONS) TO
AUGUST 31,1995

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 14.22 $ 10.00

Income from Investment Operations

Net investment income (loss) (.02) C (.03) C

Net realized and unrealized gain (loss) (.68) 4.26

Total from investment operations (.70) 4.23

Less Distributions

From net realized gain (.84) (.01) D

Net asset value, end of period $ 12.68 $ 14.22

TOTAL RETURN B, E (5.09)% 42.34%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 277,345 $ 503,427

Ratio of expenses to average net assets .99% A 1.22% A

Ratio of net investment income (loss) to average (.38)% A (.27)% A
net assets

Portfolio turnover rate 279% A 245% A

Average commission rate F $ .0341 -

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
E TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS.)
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR TRADES ON
WHICH COMMISSIONS ARE CHARGED. THIS RATE GENERALLY DOES NOT REFLECT
MARK-UPS, MARK-DOWNS, OR SPREADS ON SHARES TRADED ON A PRINCIPAL BASIS.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Export Fund (the fund) is a fund of Fidelity Union Street 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 exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing rates of exchange at period end. Purchases and sales of
securities, income receipts, and expense payments are translated into U.S.
dollars at the prevailing exchange rate on the respective dates of the
transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. 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 funds are informed of the
ex-dividend date. Interest income is accrued as earned.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
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 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 net
operating losses and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated net investment loss 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.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. 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 forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
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 that
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. 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 securities, other than short-term securities,
aggregated $551,371,101 and $735,427,870, 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 .2500% to .5200% 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 annualized rate of .61% of average net assets.
SALES LOAD. For the period October 4, 1994 (commencement of operations)
through December 31, 1995, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, voluntarily
waived the sales charge (3.00% of the offering price) on the sales of
shares. For the period, January 1, 1996 through February 29, 1996 FDC
received sales charges of $78,197 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the funds' 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 annualized 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.
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 $272,814 for the period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the period
for which loans were outstanding amounted to $10,447,000 and $4,303,829,
respectively. The weighted average interest rate was 6.1%.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$9,545 under this arrangement.
In addition, the fund has entered into arrangements with its 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
custody and transfer agent fees were reduced by $2,296 and $2,585,
respectively, under these arrangements.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Brock International, Inc. $ - $ 72,500 $ - $ 2,844,188 NView Corp. -
95,833 - -Penn National Gaming, Inc. 826,875 675,792 - - Printronix,
Inc. 143,918 6,790,232 - -TSX Corp. 1,780,063 6,519,061 - -
TOTALS $ 2,750,856 $ 14,153,418 $ - $ 2,844,188
TO CALL FIDELITY

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

(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY

For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
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
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
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
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

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
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export Fund
Fidelity Fifty
Growth Company Fund
Large-Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

SPARTAN(registered trademark)

(registered trademark)
ARIZONA
MUNICIPAL
FUNDS
(FORMERLY SPARTAN ARIZONA MUNICIPAL
PORTFOLIOS)

SEMIANNUAL REPORT
FEBRUARY 29, 1996
CONTENTS

CHECK PAGE NUMBERS !!!

<TABLE>
<CAPTION>
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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

SPARTAN ARIZONA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN ARIZONA MUNICIPAL INCOME PORTFOLIO)

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
and the life of the fund.

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

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

SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN ARIZONA MUNICIPAL MONEY MARKET PORTFOLIO)

PERFORMANCE 19 How the fund has done over time.

FUND TALK 21 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 23 A summary of major shifts in the
fund's investments over the past six
months
and the life of the fund.

INVESTMENTS 24 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 31 Notes to the financial statements.

</TABLE>

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although the markets were fairly positive during 1995, no one can predict
what lies ahead for investors. The previous year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
SPARTAN ARIZONA MUNICIPAL INCOME FUND

PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total return, dividend,
and yield would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Arizona Municipal Income 5.00% 10.84% 17.34%

Lehman Brothers Arizona Municipal
Bond Index 4.86% 11.32% n/a

Arizona Municipal Debt Funds Average 4.94% 9.81% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on October 11, 1994. 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 Arizona Municipal Bond Index, which includes Arizona
investment-grade municipal bonds. To measure how the fund's performance
stacked up against its peers, you also will be able to compare it to the
Arizona municipal debt funds average which reflects the performance of 32
Arizona municipal bond funds with similar objectives tracked by Lipper
Analytical Services over the past year. Both benchmarks will include
reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Income 10.84% 12.20%

Lehman Brothers Arizona Municipal
Bond Index 11.32% n/a

Arizona Municipal Debt Funds Average 9.81% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Arizona Municipal Income Fund on October 31, 1994, shortly after the fund
started. As the chart shows, by February 29, 1996, the value of your
investment would have grown to $11,942 a 19.42% increase on your initial
investment. This assumes you still own the fund on February 29, 1996 and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond Index, which
reflects the performance of the investment-grade municipal bond market, did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $11,796 a 17.96% 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
OCTOBER 11, 1994
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
FEBRUARY 29, AUGUST 31,

1996 1995

Dividend return 2.55% 5.34%

Capital appreciation
return 2.45% 6.39%

Total return 5.00% 11.73%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.06(cents) 26.64(cents) 55.56(cents)

Annualized dividend rate 4.71% 4.97% 5.23%

30-day annualized yield 4.55% - -

30-day annualized tax-equivalent yield 7.50% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.86 over
the past month, $10.76 over the past six months and $10.63 over the life of
fund, 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. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 39.33% combined effective 1996 federal and state income tax bracket,
but does not reflect the payment of the federal alternative minimum tax, if
applicable. If the adviser had not reimbursed certain portfolio expenses
during the period shown, the yield and tax-equivalent yield would have been
4.25% and 7.01%, respectively.
SPARTAN ARIZONA MUNICIPAL INCOME FUND

FUND TALK: THE MANAGER'S OVERVIEW

An interview with Jonathan Short, Portfolio Manager of Spartan Arizona
Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, JONATHAN?
A. For the six- and 12-month periods ended February 29, 1996, the fund had
total returns of 5.00% and 10.84%, respectively. For the same periods, the
Arizona municipal debt funds average returned 4.94% and 9.81%,
respectively, as tracked by Lipper Analytical Services. Meanwhile, the
Lehman Brothers Arizona Municipal Bond Index returned 4.86% for the
six-month period and 11.32% for the 12-month period ended February 29,
1996.
Q. WHAT WERE SOME OF THE MAJOR DEVELOPMENTS IN THE MUNICIPAL BOND MARKET
OVER THE PAST SIX MONTHS?
A. Throughout the period, falling interest rates sent bond yields lower and
prices higher. During the first half of the period, interest rates drifted
lower as investors became less fearful that the economy was growing fast
enough to stir up inflation. The Federal Reserve made two quarter-point
rate cuts during the period, one in December followed by another in
January, which helped to further cheer bond investors. But in February, the
bond markets experienced a slight pullback as investors worried that some
stronger-than-expected economic indicators would prevent the Fed from
lowering rates any further. However, municipal bonds and Treasuries didn't
always perform in lock step during the period. Municipals lagged Treasuries
in the first months of the period, stifled by some investors' worries about
the flat tax proposal and its effect on the attractiveness of municipal
bonds. But in late January and early February, those fears appeared to
abate, and municipal bonds outperformed Treasury bonds.
Q. WHAT ACCOUNTS FOR THE FUND'S PERFORMANCE?
A. The main factor was its weighting in intermediate-term bonds. The yield
curve (a graphical representation of the yields bonds of various maturities
pay) steepened in the early part, and then again in the latter part of the
period. When the yield curve steepened, intermediate bonds generally
performed better than longer-term bonds. On balance, the fund's weighting
in intermediate bonds was a positive for the fund and helped its
performance relative to its competitors.
Q. SINCE TAKING OVER THE FUND ON OCTOBER 1, 1995, HOW DID YOU CHANGE THE
WAY THE FUND IS DISTRIBUTED AMONG BONDS WITH VARIOUS CREDIT QUALITIES?
A. I upgraded the fund's overall credit quality. Credit quality refers to
the particular rating, as assigned by a municipal bond rating agency, a
bond carries. Bonds rated a Baa, Aa, A and Aaa by Moody's Investors
Service, Inc. are investment-grade quality. Throughout the period, I
reduced the fund's stake in lower rated investment-grade (Baa) bonds and
replaced them with Aaa rated bonds. Credit spreads, which measure the
difference in yields between bonds of various credit ratings, narrowed. By
that I mean there was a smaller difference in the yields offered by lower-
and higher-rated investment-grade bonds. It seemed to be worthwhile to be
invested in higher-quality, investment-grade bonds because the added yield
from lower-quality bonds, in my opinion, did not compensate for the added
credit risk. As spreads narrowed, the lower-rated bonds did well relative
to higher-quality securities, which also was a positive for the fund's
performance.
Q. WHAT WAS THE ATTRACTION TO PRE-REFUNDED BONDS?
A. Their primary attraction was their high credit quality. Prerefunding is
a procedure in which a bond issuer floats a second bond in order to pay off
the first bond at its first call date. The proceeds from the sale of the
second bond are usually invested in Treasury securities. That means that
the bonds assume an Aaa rating, since they are backed by the full faith and
credit of the United States.
Q. WHAT WERE SOME OF YOUR OTHER STRATEGIES SINCE TAKING OVER THE FUND?
A. I've focused on improving the fund's structure. One way I improved
structure was by purchasing more non-callable bonds - or those that can not
be bought back by their issuer. Historically, non-callable bonds have
offered good performance characteristics while offering competitive yields.
Q. THERE WAS A NOTICEABLE INCREASE IN THE FUND'S STAKE IN SPECIAL TAX
BONDS. WHAT ARE THEY AND WHY ARE THEY ATTRACTIVE?
A. A special tax bond is a municipal revenue bond that will be repaid
through excise, sales or other taxes, as opposed to being backed by the
ordinary taxing power of the municipalities issuing them. During the
period, I added bonds issued by the Arizona Transportation Authority, which
are backed by these excise taxes. I believed their excise tax revenue
streams were relatively stable, which in my view, made these bonds
attractive.
Q. AT THE END OF THE PERIOD, ABOUT 6% OF THE FUND'S INVESTMENTS WERE IN
BONDS ISSUED BY GUAM AND PUERTO RICO. WHAT ROLE DO THESE PLAY AND WHY WERE
THEY ATTRACTIVE?
A. As territories of the United States, Guam and Puerto Rico may issue
municipal bonds free from local, state and federal income taxes in all 50
states. I continued to hold many of these territorial bonds because their
tax-exempt status could make demand for them very strong, which could
result in superior returns. However, I sold some of these territorial bonds
during the past six months in order to take advantage of opportunities to
buy Arizona securities.
Q. WHAT'S YOUR OUTLOOK?
A. Interest rates are relatively low right now. Given that falling interest
rates were the primary engine driving the bond markets' performance last
year, it may be difficult for municipals to match last year's gains this
year. So in my view, identifying the right securities within the right
sectors will be a key to out performing the market in 1996.
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 tax-free
income for Arizona residents
START DATE: October 11,
1994
SIZE: as of February 29,
1996, more than $20 million
MANAGER: Jonathan Short,
since October 1, 1995;
manager, Fidelity California
Municipal Income, Fidelity
California Insured Municipal
Income, Spartan California
Municipal Income, Fidelity
Minnesota Municipal Income,
Spartan California
Intermediate Municipal funds,
since October 1995; joined
Fidelity in 1990
(checkmark)
JONATHAN SHORT ON THE ARIZONA
ECONOMY:
"Last year was another strong
year for the Arizona economy
and its growth rate exceeded
the nation as a whole.
Housing sales were positive
and help-wanted ads,
particularly in the Phoenix
area, were up last year. The
main reason for the state's
strength lies in its broadly
diversified economy, which
helps make it less susceptible
to a downturn in the economy.
What's more, some very large
manufacturing concerns have
established plants in the state
which provided a boost to the
manufacturing employment
base. Arizona manufacturing
jobs grew at roughly a 4% rate
in 1995, compared to a 1%
rate for the nation as a whole.
"In determining the risks and
rewards available in the
Arizona municipal bond
market, I use the Lehman
Brothers Arizona Municipal
Bond Index as a proxy for the
overall market. I believe this
index is the best available
benchmark for managing the
fund."

SPARTAN ARIZONA MUNICIPAL INCOME FUND

INVESTMENT CHANGES

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 23.7 34.0

Special Tax 20.4 8.2

Electric Revenue 18.0 23.4

Escrowed/Prerefunded 9.7 2.2

Education 8.8 8.6

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 10.9 12.5

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 FEBRUARY 29, 1996
6 MONTHS AGO

Years 7.1 7.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Aaa 49.1%
Aa, A 33.7%
Baa 8.4%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 8.8%
Aaa 40.6%
Aa, A 39.2%
Baa 16.4%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 3.8%
Row: 1, Col: 1, Value: 48.1
Row: 1, Col: 2, Value: 3.27
Row: 1, Col: 3, Value: 8.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 8.800000000000001
Row: 1, Col: 1, Value: 40.6
Row: 1, Col: 2, Value: 39.2
Row: 1, Col: 3, Value: 16.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 3.8
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN ARIZONA MUNICIPAL INCOME FUND

INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investments

MUNICIPAL BONDS - 91.2%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT
ARIZONA - 85.0%
Arizona Pwr. Auth. Pwr. Resources Rev. Rfdg.
(Hoover Uprating Proj.) 5.25% 10/1/17
(MBIA Insured) Aaa $ 100,000 $ 97,625
Arizona State Univ. Research Pk. Dev. Rev.
5% 7/1/21 (MBIA Insured) Aaa 100,000 94,000
Arizona State Univ. Rev. Rfdg. 6%
7/1/06 A1 1,000,000 1,096,250
Arizona State Univ. Rev. 7% 7/1/15
(Pre-refunded to 7/1/02 @ 101) (d) Aaa 500,000 576,250
Arizona Trans. Board Excise Tax Rev.
(Maricopa County Reg'l Area Road):
Series A, 5.75% 7/1/04
(AMBAC Insured) Aaa 440,000 473,550
Series A, 5.75% 7/1/05
(AMBAC Insured) Aaa 400,000 430,500
7% 7/1/05, (MBIA Insured)
(Pre-Refunded to 7/1/99 @ 102) (d) Aaa 1,000,000 1,113,750
6% 7/1/03 (AMBAC Insured) Aaa 700,000 763,875
Arizona Trans. Board Hwy. Rev. Rfdg.
Series A, 6% 7/1/00 Aa 250,000 267,188
Central Arizona Wtr. Conservation Dist. Contract
Rev. Rfdg. (Central Arizona Proj.)
Series A, 5.50% 11/1/10 A1 375,000 388,125
Chandler Gen. Oblig.:
6.50% 7/1/10 (MBIA Insured) Aaa 200,000 226,500
6.50% 7/1/11 (MBIA Insured) Aaa 225,000 253,406
Chandler Street & Hwy. Rev. 6.375% 7/1/03
(MBIA Insured) Aaa 175,000 195,563
Chandler Wtr. & Swr. Rev. Rfdg. 5.90% 7/1/00
(FGIC Insured) Aaa 200,000 212,500
Cochise Union School Dist. #68 (Sierra Vista)
Series B, 9% 7/1/02 (FGIC Insured) Aaa 200,000 250,750
Glendale Ind. Dev. Auth. Edl. Facs. Rev. Rfdg.
(American Graduate School Int'l.)
6.55% 7/1/06 AAA 150,000 168,188
Maricopa County Cfts. of Prtn. 5.625%
6/1/00 Baa 450,000 461,813
Maricopa County Gen. Oblig. Rev. Rfdg. 6.25%
7/1/00 (FGIC Insured) Aaa 240,000 259,800
Maricopa County School Dist. #1 Rfdg.
(Phoenix Elementary) Second Series,
0% 7/1/05 (MBIA Insured) Aaa 500,000 318,750
Maricopa County School Dist. #3 Rfdg.
(Temple Elementary) 0% 7/1/08
(AMBAC Insured) Aaa 500,000 264,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT
ARIZONA - CONTINUED
Maricopa County Unified School Dist. #69
(Paradise Valley Proj. of 1994) Series B,
5.25% 7/1/15 (MBIA Insured) Aaa $ 300,000 $ 291,750
Maricopa County Unified School Dist. #80
(Chandler) 6.60% 7/1/06 (FGIC Insured) Aaa 400,000 456,500
Mesa Gen. Oblig. Rev. Rfdg. 5.70% 7/1/03
(FGIC Insured) Aaa 250,000 269,375
Mohave County Ind. Dev. Auth. Ind. Dev. Rev.
(North Star Steel Co. Proj.) Series B,
5.50% 12/1/20 AA- 250,000 241,563
Peoria Gen. Oblig. (1990 & 1994 Proj.) Series A:
5% 7/1/14 (AMBAC Insured) Aaa 365,000 346,294
5% 7/1/15 (AMBAC Insured) Aaa 390,000 369,525
Phoenix Arpt. Rev. Rfdg. Series D, 6.40%
7/1/12 (MBIA Insured) Aaa 810,000 864,674
Phoenix Civic Impt. Corp. Wtr. Sys. Rev.
(Jr. Lien) 5.45% 7/1/19 A1 500,000 490,624
Phoenix Gen. Oblig. Rfdg. Series A, 5% 7/1/19 Aa1 250,000 234,687
Phoenix Street & Hwy. User Rev. Rfdg. (Jr. Lien)
6.25% 7/1/11 (MBIA Insured) Aaa 250,000 269,374
Pima County Swr. Rev. Rfdg. Series A, 5%
7/1/15 (FGIC Insured) Aaa 400,000 379,000
Pinal County Ind. Dev. Auth. Solid Waste Disp.
Rev. (Browning Ferris Industries, Inc. Proj.)
5% 2/1/06 A2 250,000 242,812
Salt River Proj. Agric. Impt. & Pwr. Dist. Elec. Sys. Rev.:
Series C, 6.25% 1/1/19 Aa 500,000 526,250
Rfdg. Series A, 5.75% 1/1/07 Aa 300,000 321,750
Rfdg. Series B, 6.50% 1/1/04 Aa 400,000 448,500
Rfdg. Series B, 5.25% 1/1/19 (MBIA Insured) Aaa 100,000 95,500
Rfdg. Series C, 5% 1/1/13 Aa 150,000 142,687
Scottsdale Gen. Oblig. Rfdg.:
Series C, 6.375% 7/1/01 Aa1 250,000 275,313
5.50% 7/1/09 Aa1 100,000 104,500
Scottsdale Street & Hwy. User Rev. Rfdg.
5.50% 7/1/07 A1 800,000 846,000
Tempe Union High School Dist. #213 Rfdg. & Impt.
7% 7/1/08 (FGIC Insured) Aaa 310,000 369,675
Tucson Gen. Oblig. Rfdg.:
7.50% 7/1/01 A1 300,000 344,625
6.75% 7/1/03 (FGIC Insured) Aaa 200,000 230,000
Tucson Street & Hwy. User Rev. Series A, 6%
7/1/10 (MBIA Insured) Aaa 400,000 436,000
Tucson Wtr. Rev. Rfdg. 6.50% 7/1/16 A1 200,000 214,750
Univ. of Arizona Rev. Rfdg. (Univ. Rev. Sys.)
6.375% 6/1/05 A1 400,000 440,500
Yuma County Hosp. Dist. #001, 6.35%
11/15/07 A 265,000 293,488
17,458,474
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT
PUERTO RICO - 5.9%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Rev. 5.50% 7/1/17 Baa1 $ 100,000 $ 95,500
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg.:
Series N, 5% 7/1/12 Baa1 150,000 137,813
Series S, 7% 7/1/07 Baa1 500,000 572,500
Series O, 5% 7/1/12 Baa1 450,000 413,438
1,219,251
GUAM - 0.3%
Guam Pwr. Auth. Series A, 6.30% 10/1/12 BBB 50,000 50,438
TOTAL MUNICIPAL BONDS
(Cost $18,126,206) 18,728,163
MUNICIPAL NOTES - 8.8%
ARIZONA - 8.8%
Coconino County Poll. Cont. Corp. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.)
Series A, 3.60%, LOC Bank of America
Nat'l. Trust & Savings, VRDN (a) (b) P-1 400,000 400,000
Maricopa County Poll. Cont. Rev. (Arizona Pub. Svc. Co.)
Series 1994 E, 3.45%, LOC Bank of America,
VRDN (a) P-1 500,000 ,500,000
Phoenix Civic Impt. Arpt. Impt Rev.
(Var. Sub. Arpt. Impts.) Series 1995, 3.40%,
LOC Landesbank Hessen-Thuringen,
VRDN (a) (b) VMIG 1 100,000 100,000
Pinal County Ind. Dev. Auth. Poll. Cont. Rev.
(Magma Copper Co. Proj.) 3.40%,
LOC National Westminster Bank PLC, VRDN (a) P-1 100,000 100,000
Pinal County Ind. Dev. Auth. Hosp. Rev.
(Casa Grande Med. Ctr. Proj.) 3.30%,
LOC Chemical Bank, VRDN (a) VMIG 1 200,000 200,000
Tempe Excise Tax Rev. Series 1995, 6.20%
1/1/97 MIG 1 400,000 409,500
Yuma Ind. Dev. Auth. Ind. Rev. (Ardco, Inc. Proj.)
3.45%, LOC Harris Trust & Savings Bank,
VRDN (a) (b) A-1+ 100,000 100,000
TOTAL MUNICIPAL NOTES
(Cost $1,800,000) 1,809,500
TOTAL INVESTMENTS - 100%
(Cost $19,926,206) $ 20,537,663

SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
1.The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2.Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3.Standard & Poor's Corporation credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4.Security collateralized by an amount sufficient to pay interest and
principal.
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 80.8% AAA, AA, A 87.3%
Baa 8.2% BBB 2.5%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 0.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 23.7%
Special Tax 20.4%
Electric Revenue 18.0%
Others
(individually less than 10%) 37.9%
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $19,926,206. Net unrealized appreciation aggregated
$611,457, of which $636,834 related to appreciated investment securities
and $25,377 related to depreciated investment securities.
SPARTAN ARIZONA MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (cost $19,926,206) - $ 20,537,663
See accompanying schedule

Cash 13,219

Interest receivable 184,412

TOTAL ASSETS 20,735,294

LIABILITIES

Payable for investments purchased $ 439,993

Distributions payable 12,419

Accrued management fee 3,923

TOTAL LIABILITIES 456,335

NET ASSETS $ 20,278,959

Net Assets consist of:

Paid in capital $ 19,613,033

Accumulated undistributed net realized gain (loss) 54,469
on investments

Net unrealized appreciation (depreciation) 611,457
on investments

NET ASSETS, for 1,889,026 shares outstanding $ 20,278,959

NET ASSET VALUE, offering price and redemption price per $10.74
share ($20,278,959 (divided by) 1,889,026 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INTEREST INCOME $ 420,084

EXPENSES

Management fee $ 45,234

Non-interested trustees' compensation 27

Total expenses before reductions 45,261

Expense reductions (34,678) 10,583

NET INTEREST INCOME 409,501

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

Investment securities 194,872

Futures contracts (27,789) 167,083

Change in net unrealized appreciation (depreciation) on:

Investment securities 164,565

Futures contracts (2,692) 161,873

NET GAIN (LOSS) 328,956

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 738,457
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS OCTOBER 11, 1994
ENDED (COMMENCEMENT
FEBRUARY 29, 1996 OF OPERATIONS) TO
(UNAUDITED) AUGUST 31,
1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 409,501 $ 377,244
Net interest income

Net realized gain (loss) 167,083 114,520

Change in net unrealized appreciation (depreciation) 161,873 449,584

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 738,457 941,348
FROM OPERATIONS

Distributions to shareholders (409,501) (377,244)
From net interest income

From net realized gain (227,134) -

TOTAL DISTRIBUTIONS (636,635) (377,244)

Share transactions 7,583,336 17,301,630
Net proceeds from sales of shares

Reinvestment of distributions 551,426 317,012

Cost of shares redeemed (1,405,380) (4,737,604)

Redemption fees 140 2,473

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 6,729,522 12,883,511
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 6,831,344 13,447,615

NET ASSETS

Beginning of period 13,447,615 -

End of period $ 20,278,959 $ 13,447,615

OTHER INFORMATION
Shares

Sold 704,223 1,696,864

Issued in reinvestment of distributions 51,260 30,535

Redeemed (130,353) (463,503)

Net increase (decrease) 625,130 1,263,896

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS OCTOBER 11, 1994
ENDED (COMMENCEMENT
FEBRUARY 29, 1996 OF OPERATIONS) TO
(UNAUDITED) AUGUST 31,
1995

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.640 $ 10.000

Income from Investment Operations .266 .504
Net interest income

Net realized and unrealized gain (loss) .260 .637

Total from investment operations .526 1.141

Less Distributions (.266) (.504)
From net interest income

From net realized gain (.160) -

Total distributions (.426) (.504)

Redemption fees added to paid in capital .000 .003

Net asset value, end of period $ 10.740 $ 10.640

TOTAL RETURN B 5.01% 11.74%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 20,279 $ 13,448

Ratio of expenses to average net assets .13%A, .06%A,
C C

Ratio of net interest income to average net assets 4.98%A 5.54%A

Portfolio turnover rate 49%A 56%A

</TABLE>

PERFORMANCE: THE BOTTOM LINE

To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had not
reimbursed certain fund expenses during the periods shown, the total return
and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Arizona Municipal Money Market 1.82% 3.86% 5.32%

All Tax-Free Money Market Funds 1.60% 3.36% 4.44%
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on October 11, 1994. 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. To measure how the fund's performance stacked up against its
peers, you can compare it to the all tax-free money market funds average,
which reflects the performance of 393 all tax-free money market funds with
similar objectives tracked by IBC/Donoghue during the period covered by
this report. (The periods covered by the IBC/Donoghue numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Money Market 3.86% 3.80%

All Tax-Free Money Market Funds 3.36% 3.32%
Average

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2/27/95 5/29/95 8/28/95 11/27/95 2/26/96

Spartan Arizona Municipal 4.15% 4.10% 3.71% 3.81% 3.28%
Money Market

If Fidelity had not reimburse 3.65% 3.70% 3.31% 3.51% 2.98%
d
certain fund expenses

All Tax-Free 3.48% 3.61% 3.21% 3.30% 2.87%
Money Market Funds
Average

Spartan Arizona Municipal 6.87% 6.79% 6.14% 6.28% 5.41%
Money Market - Tax-equivale
nt

If Fidelity had not reimburse 6.04% 6.12% 5.48% 5.79% 4.91%
d
certain fund expenses

</TABLE>

Row: 1, Col: 1, Value: 4.149999999999999
Row: 1, Col: 2, Value: 3.48
Row: 2, Col: 1, Value: 4.1
Row: 2, Col: 2, Value: 3.61
Row: 3, Col: 1, Value: 3.71
Row: 3, Col: 2, Value: 3.21
Row: 4, Col: 1, Value: 3.81
Row: 4, Col: 2, Value: 3.3
Row: 5, Col: 1, Value: 3.28
Row: 5, Col: 2, Value: 2.87
Spartan Arizona
Municipal Money
Market
All Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals. You can compare these
yields to the all tax-free money market funds average. Or you can look at
the fund's tax-equivalent yield, which is based on a combined effective
1996 federal and state income tax rate of 39.33%. Figures for the all
tax-free money market funds average are from IBC/Donoghue. A portion of the
fund's income may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.

COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

FUND TALK: THE MANAGER'S OVERVIEW

An interview with Scott Orr,
Portfolio Manager of Spartan
Arizona Municipal Money Fund
Q. SCOTT, WHAT KIND OF INVESTMENT CLIMATE HAVE YOU BEEN OPERATING IN FOR
THE PAST SIX MONTHS?
A. When the period began, the Fed was already in an easing mode. In July,
it had trimmed one-quarter percentage point off the rate banks charge each
other for overnight loans, known as the federal funds rate. By then,
inflation seemed well under control, and some economists were warning of a
possible recession. Then the economy surged ahead unexpectedly during the
third quarter and the Fed retreated to the sidelines, adopting a
wait-and-see attitude. By late fall and early winter, however, it was clear
that the economy was in little danger of overheating anytime soon, and the
Fed resumed cutting rates. Overall, there were two quarter-point rate cuts
during the period: the first in early December and the second on the last
day of January 1996. Until the final weeks of the period, most market
participants believed the Fed was planning at least one more rate cut. But
when Fed Chairman Alan Greenspan, testifying before Congress, seemed to
suggest that the economy was basically sound, the consensus shifted and
rates backed up slightly.
Q. HOW DID YOU POSITION THE FUND DURING THE PERIOD?
A. I tried to take advantage of declining interest rates. When the period
began, the fund's average maturity was 60 days, which I would describe as
fairly aggressive, given the supply constraints in Arizona. In a
declining-rate environment, it usually makes sense to lock in attractive
rates for as long as possible by extending the fund's average maturity.
Throughout the period, I tried to maintain an average maturity of around 60
days by buying longer-term, fixed rate securities - those with maturities
between six months and one year - and de-emphasizing variable rate
securities. If I was disappointed by anything, it was that interest rates
didn't fall faster; if they had, that might have improved the fund's
relative performance. Still, the fund's strategy served it well during the
period, helping it achieve better results than most other municipal funds.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on February 29, 1996, was 3.27%, compared to
3.72% on August 31, 1995. The ending yield was the equivalent of a taxable
yield of 5.39% for investors in the 39.33% combined state and federal tax
bracket. The fund's total return during the six-month period was 1.82%.
That beat the total return of 1.60% for the all tax-free money market funds
average, according to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. During 1995, the economy expanded at an annual rate of just over 2%,
significantly below the Fed's target rate of 2.5% for sustainable,
non-inflationary growth. That's why, despite recent uncertainty in the
market, I still believe the next move by the Fed will most likely be
another rate cut. The timing is unclear - it could come this spring, or it
may not happen until the summer. But as long as the economy continues to
sputter and inflation remains under control, the Fed still has room to
lower rates and try to stimulate growth. When the period ended, the fund's
average maturity was close to 60 days, a level I'll seek to maintain as we
head into spring. The challenge will be to keep the fund's average maturity
long enough to maintain a competitive yield in the face of declining rates
without losing the flexibility to respond to changing conditions.
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 tax-free
income for Arizona residents
while maintaining a stable $1
share price
START DATE: October 11, 1994
SIZE: as of February 29,
1996, more than $68 million
MANAGER: Scott Orr, since
1994; manager, Spartan
Municipal Money Market
Fund, since June 1995; also
manager of various
institutional money market
portfolios; joined Fidelity in
1989
(checkmark)

WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
2/29/96 8/31/95 2/28/95

0 - 30 62 64 68

31 - 90 10 19 23

91 - 180 21 5 5

181 - 397 7 12 4

WEIGHTED AVERAGE MATURITY
2/29/96 8/31/95 2/28/95

Spartan Arizona
Municipal Money Market 61 days 60 days 35 days

All Tax-Free Money
Market Funds Average * 46 days 53 days 39 days

ASSET ALLOCATION
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995

Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 17.0
Row: 1, Col: 3, Value: 1.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 31.0
Row: 1, Col: 3, Value: 1.5
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 14.0
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 17%
Tender bonds 1%
Municipal
notes 8%
Other 20%
Variable rate
demand notes
(VRDNs) 50%
Commercial
paper 31%
Tender bonds 1%
Municipal
notes 4%
Other 14%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investments

MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - 94.7%
Arizona Ed. Loan Mktg. Corp. Series 1991 A, 3.40%,
LOC Dresdner Bank, VRDN (b) $ 200,000 $ 200,000
Arizona Health Facs. Auth. Rev., VRDN:
(Samcor 1986 Loan Pool-Samaritan Health Care):
3.25% (FGIC Insured) VRDN 900,000 900,000
3.60% (FGIC Insured) BPA Chemical Bank 1,500,000 1,500,000
(Voluntary Hosp. Federation Pooled Loan Prog.):
Series1985 A, 3.25% (FGIC Insured) 225,000 225,000
Series1985 B, 3.25% (FGIC Insured) 200,000 200,000
Arizona Trans. Auth. Rev. Bond 7.90% 7/1/96 1,000,000 1,033,496
Arizona Univ. Research Park Dev. Rfdg. Bonds Series 1995,
3.70% 7/1/96 (MBIA Insured) 200,000 200,000
Chandler Ind. Dev. Auth. Multi-Family Hsg. Rev.
(Southpark Apts.) 3.25%, LOC Citibank, VRDN 1,425,000 1,425,000
Cochise County Poll. Cont. Rev. Solid Waste Rev. Bonds
(Arizona Elec. Pwr. Coop.) 3.90%, tender 3/1/96 500,000 500,000
Coconino County Poll. Cont. Corp. Poll. Cont. Rev.
(Arizona Pub. Svc. Co.-Navajo Proj.) Series 1994 A,
3.60%, LOC Bank of America, VRDN (b) 300,000 300,000
Fountain Hills Unified School Dist. TAN
4.60% 7/31/96 1,000,000 1,002,617
Gila County Ind. Dev. Auth. Rev. (Cobre Valley Hosp.)
Series 1995, 3.30%, LOC Bank One, VRDN 700,000 700,000
Gilbert Unified School Dist. #41 TAN :
4.40% 7/31/96 1,500,000 1,504,889
4.55% 7/31/96 1,050,000 1,053,855
Maricopa County Gen. Oblig.:
Rfdg. Bonds Series 1995, 5% 7/1/96 (AMBAC Insured) 800,000 803,241
Participating VRDN, Series PT-182, 3.35%
(Liquidity Facility Bankers Trust Co.) (c) 2,900,000 2,900,000
Maricopa County Ind. Dev. Auth. Multi-Family Hsg. Auth.
Rev., VRDN: (b)
(Privado Park Apt. Proj.) Series 1994 A, 3.40%,
LOC Bank One 1,300,000 1,300,000
(Shadow Creek Apt. Proj.) Series 1994 C, 3.40%,
LOC Bank One 500,000 500,000
Maricopa County Poll. Cont. Rev.:
(Arizona Public Service) VRDN: (b)
Series 1994 B, 3.35% LOC Morgan Guaranty Trust Co. 1,000,000 1,000,000
Series 1994 E, 3.45%, LOC Bank of America 500,000 500,000
(Southern California Edison Co.) Bonds:
Series 1985 D, 3.35%, tender 3/27/96 500,000 500,000
Series 1985 F, 3.40%, tender 3/26/96 1,300,000 1,300,000
Maricopa County School Dist. #4 (Mesa Proj.) Series 1988C,
6.60% 7/1/96 (AMBAC Insured) 425,000 428,884
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Maricopa County Unified School Improvement Board
Dist. #48 Series 91 B, 5.40% 7/1/96 $1,000,000 $1,006,585
Mohave County Ind. Dev. Auth. Ind. Rev. Bonds
(Citizens Utils.) Series 1993 E: (b)
3.35%, tender 5/13/96 1,000,000 1,000,000
3.40%, tender 5/14/96 2,500,000 2,500,000
Phoenix Civic Impt. Corp. Airport Rev. Series 1995, 3.40%,
LOC Landesbank Hessen, VRDN (b) 3,800,000 3,800,000
Phoenix Gen. Oblig. Rfdg. Bonds Series 1992 B, 5.05%
7/1/96 1,000,000 1,004,531
Phoenix Gen. Oblig. Series 1995-2, 3.50% 6/1/20,
LOC Morgan Guaranty Trust Co., VRDN 700,000 700,000
Phoenix Ind. Dev. Board Auth. Multi-Family Hsg. Rev., VRDN:
(Bell Square Apt. Proj.) Series 1995, 3.55%,
LOC General Electric Capital Corp. 2,000,000 2,000,000
(Lynwood Apt. Proj.) Series 1994, 3.30%, LOC Federal
Home Loan Bank 1,900,000 1,900,000
(Paradise Lakes Apt. Proj.) Series 1995, 3.55%,
LOC General Electric Capital Corp. 500,000 500,000
(Ventana Palms Apt.) Series 1994, 3.30%,
LOC First Interstate Bank (b) 5,210,000 5,210,000
Pima County Gen. Oblig. Unified School Dist. #1
(Tucson Proj.) Series 1989 E, 8% 7/1/96 (FGIC Insured) 1,000,000
1,013,319
Pima County Ind. Dev. Auth. Multi-Family Hsg. Rev.
(Quail Ridge Apt.-B) 3.40%, LOC Bank One, VRDN (b) 1,400,000 1,400,000
Pinal County Ind. Dev. Auth. Hosp. Rev. (Medical Ctr. Proj.
1995) 3.30%, LOC Chemical Bank, VRDN 3,800,000 3,800,000
Pinal County Ind. Dev. Auth. Ind. Dev. Rev.
(Sunbelt Refining Co. LP Proj.) Series 1988, 3.40%,
LOC Bankers Trust Co., VRDN (b) 3,400,000 3,400,000
Pinal County Ind. Dev. Poll. Cont. Rev. (Magna Copper Co.
Proj.) Series 1984 A, 3.40%,
LOC Nat'l. Westminster Bank, VRDN 600,000 600,000
Salt River Proj. Agricultural Impt. & Pwr. Dist., CP:
3.65% 3/12/96 398,000 398,000
3.55% 3/19/96 800,000 800,000
3.20% 4/11/96 1,100,000 1,100,000
3.20% 5/13/96 800,000 800,000
Salt River Proj. Agricultural Impt. & Pwr. Dist. Elec. Sys. Rev.:
6.75% 1/1/97 500,000 512,353
7.50% 1/1/97 3,000,000 3,157,120
Tempe Excise Tax Rev. Bonds Series 1995, 6.20% 1/1/97 1,000,000
1,022,798
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Tempe Union High School Dist. #213 TAN 4.45% 7/31/96 $ 2,000,000 $
2,003,607
Tucson Gen. Oblig. Bonds Series 1984 B, 7.80% 7/1/96 1,000,000
1,032,354
Washington Elementary School Dist. #6 Bonds Series 1995 C,
7.80% 7/1/96 (MBIA Insured) 1,000,000 1,013,120
Yavapi County Ind. Dev. Auth. Ind. Dev. Rev. Bonds
(Citizens Utils.) Series 1993, 3.35%, tender 5/16/96 (b) 1,100,000
1,100,000
Yuma Ind. Dev. Auth. Ind. Rev., VRDN: (b)
(Ardco Inc. Proj.) 3.45%, LOC Harris Trust & Savings Bank 900,000
900,000
(Buchbinder Proj.) Series 1995, 3.45%,
LOC Harris Trust & Savings Bank 1,225,000 1,225,000
64,875,769
PUERTO RICO - 5.3%
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg. Bonds
Series W, 4.25% 7/1/96 1,500,000 1,501,674
Puerto Rico Gov't Dev. Bank 3.05% 3/14/96, CP 2,100,000 2,100,000
3,601,674
TOTAL INVESTMENTS - 100% $ 68,477,443
Total Cost for Income Tax Purposes $ 68,478,024
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1.The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2.Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3.Provides evidence of ownership in one or more underlying municipal bonds.

SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value - See accompanying $ 68,477,443
schedule

Cash 55,790

Interest receivable 450,499

TOTAL ASSETS 68,983,732

LIABILITIES

Distributions payable $ 610

Accrued management fee 10,975

TOTAL LIABILITIES 11,585

NET ASSETS $ 68,972,147

Net Assets consist of:

Paid in capital $ 68,971,832

Accumulated net realized gain (loss) on investments 315

NET ASSETS, for 68,971,832 shares outstanding $ 68,972,147

NET ASSET VALUE, offering price and redemption price per $1.00
share ($68,972,147 (divided by) 68,971,832 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INTEREST INCOME $ 1,101,014

EXPENSES

Management fee $ 145,347

Non-interested trustees' compensation 92

Total expenses before reductions 145,439

Expense reductions (101,512) 43,927

NET INTEREST INCOME 1,057,087

REALIZED AND UNREALIZED GAIN (LOSS) 327
Net realized gain (loss) on investment securities

Increase (decrease) in net unrealized gain from (215)
accretion of market discount

NET GAIN (LOSS) 112

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,057,199

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS OCTOBER 11, 1994
ENDED (COMMENCEMENT
FEBRUARY 29, 1996 OF OPERATIONS) TO
(UNAUDITED) AUGUST 31,
1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 1,057,087 $ 984,652
Net interest income

Net realized gain (loss) 327 (12)

Increase (decrease) in net unrealized gain from (215) 215
accretion of market discount

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,057,199 984,855
FROM OPERATIONS

Distributions to shareholders from net interest income (1,057,087) (984,652)

Share transactions at net asset value of $1.00 per share 62,119,340 104,017,553
Proceeds from sales of shares

Reinvestment of distributions from net interest income 1,045,969 967,585

Cost of shares redeemed (46,759,129) (52,419,486)

NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 16,406,180 52,565,652
RESULTING FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 16,406,292 52,565,855

NET ASSETS

Beginning of period 52,565,855 -

End of period $ 68,972,147 $ 52,565,855

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS OCTOBER 11, 1994
ENDED (COMMENCEMENT
FEBRUARY 29, 1996 OF OPERATIONS) TO
(UNAUDITED) AUGUST 31,
1995

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 1.000 $ 1.000

Income from Investment Operations .018 .034
Net interest income

Less Distributions (.018) (.034)
From net interest income

Net asset value, end of period $ 1.000 $ 1.000

TOTAL RETURN B 1.83% 3.43%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 68,972 $ 52,566

Ratio of expenses to average net assets .15%A, .06%A,
C C

Ratio of net interest income to average net assets 3.63%A 3.91%A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSES WOULD HAVE BEEN
HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Arizona Municipal Income Fund (the income fund)(formerly Spartan
Arizona Municipal Income Portfolio) is a fund of Fidelity Union Street
Trust. Spartan Arizona Municipal Money Market Fund (the money market
fund) (formerly Spartan Arizona Municipal Money Market Portfolio) is a fund
of Fidelity Union Street Trust II. Each trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company. Fidelity Union Street Trust and Fidelity
Union Street Trust II (the trusts) are organized as a Massachusetts
business trust and a Delaware business trust, respectively. Each fund is
authorized to issue an unlimited number of shares. 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 funds:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities maturing
within sixty days of their purchase date are valued either at amortized
cost or original cost plus accrued interest, both of which approximate
current value. Securities for which quotations are not readily available
through the pricing service are valued at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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 futures
and options transactions and losses deferred due to wash sales, futures and
options, and excise tax regulations.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The income fund may use futures and options
contracts to manage its exposure to the bond markets and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Futures contracts
and written options involve, to varying degrees, risk of loss in excess of
the futures variation margin or the option value reflected in the Statement
of Assets and Liabilities. The underlying face amount at value of any open
futures contracts at period end, is shown in the schedule of investments
under the caption"Futures Contracts". This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $9,960,097 and $3,801,903, respectively.
The market value of futures contracts opened and closed during the period
amounted to $2,976,579 and $3,304,019, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% and .50% of average net assets
for the income and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the funds' shareholders which amounted to
$100 and $317 for the period for the income and money market funds,
respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets.
INCOME FUND. For the period, this expense limitation ranged from an annual
rate of .10% to .25% of average net assets and the reimbursement reduced
expenses by $34,678.
MONEY MARKET FUND. For the period, this expense limitation ranged from an
annual rate of .10% to .20% of average net assets and the reimbursement
reduced expenses by $100,649.
In addition, FMR agreed to reimburse a portion of the fund's expenses. For
the period, the reimbursement reduced expenses by $863.
TO CALL FIDELITY

Page 38 = BLANK
Do NOT strip-in this type

Page 39 = BLANK
Do NOT strip-in this type
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
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
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

GINNIE MAE
FUND
SEMIANNUAL REPORT
FEBRUARY 29, 1996
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 13 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 17 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

Spartan Ginnie Mae 4.02% 11.20% 45.44% 48.12%

Salomon Brothers GNMA Index 4.40% 11.57% 50.58% n/a

GNMA Funds Average 3.66% 10.54% 44.37% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 27, 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 Salomon Brothers GNMA Index - a market-capitalization
weighted index which includes 15 and 30 year Ginnie Mae Pass-Throughs with
fixed rate coupons. To measure how the fund's performance stacked up
against its peers, you can compare it to the GNMA funds average, which
reflects the performance of 56 GNMA funds with similar objectives tracked
by Lipper Analytical Services over the past six months. Both benchmarks
include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Ginnie Mae 11.20% 7.78% 7.88%

Salomon Brothers GNMA Index 11.57% 8.53% n/a

GNMA Funds Average 10.54% 7.62% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Ginnie Mae Fund on December 31, 1990, shortly after the fund started. As
the chart shows, by February 29, 1996, the value of your investment would
have grown to $14,785 - a 47.85% increase on your initial investment. This
assumes you still owned the fund on February 29, 1996 and therefore does
not include the effect of the $5 account closeout fee on an average sized
account. For comparison, look at how the Salomon Brothers GNMA Index did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $15,360 - a 53.60% 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

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED AUGUST 31, DECEMBER 27,
SIX MONTHS 1990
ENDED (COMMENCEMENT
FEBRUARY 29, OF OPERATIONS) TO
AUGUST 31,

1996 1995 1994 1993 1992 1991

</TABLE>

Dividend return 3.33% 7.85% 5.24% 6.51% 8.30% 5.93%

Capital appreciation 0.69% 3.42% -5.50 1.08% 2.55% 1.60%
return %

Total return 4.02% 11.27% -0.26 7.59% 10.85% 7.53%
%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee on an average sized account.
DIVIDENDS AND YIELD
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.52(cents) 32.86(cents) 66.62(cents)

Annualized dividend rate 6.86% 6.54% 6.69%

30-day annualized yield 6.61% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.13 over
the past month, $10.08 over the past six months and $9.96 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Kevin Grant, Portfolio Manager of Spartan Ginnie Mae Fund
Q. HOW DID THE FUND PERFORM, KEVIN?
A. For the six months ended February 29, 1996, the fund had a total return
of 4.02% as compared to the 3.66% return of the GNMA funds average, as
tracked by Lipper Analytical Services. For the same period, the fund's
benchmark index - the Salomon Brothers GNMA Index - gained 4.40%.
Q. HOW WOULD YOU DESCRIBE THE BOND MARKET OVER THE LAST SIX MONTHS?
A. The bond market over the last six months - and really over the past year
- - represents a classic business cycle. We went from a period of the Federal
Reserve raising short-term interest rates in 1994 to the Fed reversing
course, cutting rates, and starting the rally of 1995. In any business
cycle, the contraction of monetary policy - as we saw in 1994 - takes a
while to be felt in the economy. The slowing of the economy in 1995 was the
reaction to the Fed's tightening in 1994. Of course, bonds respond
favorably to a slowing economy as inflation - which has a corrosive effect
on the returns of fixed-income investments - becomes much less of a threat.
Q. WHILE FALLING INTEREST RATES ARE BENEFICIAL FOR BONDS, THEY PRESENT A
CONCERN FOR MORTGAGE SECURITIES: NAMELY, THE RISK THAT MORTGAGE HOLDERS
WILL PREPAY THEIR DEBT, THUS FORCING MORTGAGE INVESTORS TO REINVEST AT
LOWER RATES. WHAT DID YOU DO TO DEAL WITH PREPAYMENT RISK?
A. Investors in the market are always aware of prepayments and thus they
are built into the prices of existing securities. One way of dealing with
prepayments is to buy "seasoned" mortgages - such as Ginnie Mae 9 1/2s
(9.5% coupon). These securities contain mortgages that have been through
several refinancing periods and the mortgage holders have not shown a
propensity to prepay. As the fixed-income market has discovered this idea
of buying seasoned mortgages, their prices have appreciated - which was to
the benefit of the fund during the period.
Q. WHAT OTHER STRATEGIES DID YOU USE TO HELP GUARD AGAINST PREPAYMENTS?
A. I've swapped 30-year premium mortgage securities - whose coupons are
higher than prevailing interest rates - for 15-year lower-coupon
securities. The strategy had several benefits. First, with coupons more in
line with current rates, homeowners would have less of an incentive to
refinance than they would with the higher-coupon, 30-year securities.
Second, should interest rates unexpectedly rise, the price of the 15-year
securities should fall less than the 30-year ones. Finally, should interest
rates continue to fall, the 15-year ones still would have more price
performance left, while the 30-year securities would have already enjoyed
most of their price appreciation.
Q. WERE THERE ANY DEVELOPMENTS RELATING TO THE FUND'S POSITION IN FANNIE
MAES AND FREDDIE MACS?
A. Mainly, I've tried to take advantage of price inefficiencies in these
areas of the mortgage market. Let me give an example. Historically, Ginnie
Mae 6 1/2s (6.5% coupon) have had similar returns to Fannie Mae 6s (6%
coupon). In an unusual development during the period, however, the Fannie
Maes became very inexpensive relative to the Ginnie Maes. Therefore, I
swapped into the Fannie Maes and, when the market corrected the anomaly in
January, I swapped back into the Ginnie Maes. Thus, the fund enjoyed the
price appreciation from the trade.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. In positioning the fund relative to the Salomon Brothers GNMA Index -
which I believe is an accurate proxy of the area of the mortgage market in
which the fund invests - I found no major disappointments. I would mention,
though, that there is one reality in the mortgage market that goes along
with such a good year. Because interest rates have decreased, the duration
- - or price sensitivity to changes in interest rates - in the mortgage
market is much shorter today than it was six months ago. On one hand,
that's good news in case interest rates rise unexpectedly. On the other
hand, if interest rates continue to fall, there is no way mortgage
investors will be able to attain the same level of price appreciation as
they did in 1995.
Q. WHAT'S YOUR OUTLOOK?
A. Rising wages have historically been the engine that helps drive
inflation. To date, we have seen no real evidence of wage pressures and,
thus, no real signs of inflation. It appears the market has accounted for
continued easing by the Fed. However, as stated above, there is a real
question as to how much price appreciation investors can really expect.
That said, I will continue to watch for market anomalies as they present
themselves and I will seek to take advantage of them to benefit 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: to provide high current
income by investing mainly
in mortgage securities issued
by the Government National
Mortgage Association (Ginnie
Mae)
START DATE: December 27,
1990
SIZE: as of February 29, 1996,
more than $447 million
MANAGER: Kevin Grant, since
February 1995; manager,
Fidelity Mortgage Securities
Fund, since 1993; manager,
Fidelity Ginnie Mae Fund,
since February 1995;
manager, Fidelity Advisor
Intermediate Bond Fund,
since October 1995; manager,
Fidelity Advisor World
Intermediate Fund, since
December 1995; joined Fidelity
in 1993
(checkmark)
KEVIN GRANT ON THE SHAPE OF
THE YIELD CURVE AND WHAT IT
MEANS FOR THE SELECTION OF
MORTGAGE SECURITIES:
"The shape of the yield curve
- - or the graphical
representation of the yields of
various bonds of maturities
from three months to 30 years
- - is important in determining
the potential price
performance of mortgage
securities, such as 15-year
lower coupon mortgages. Let
me put this in the context of
the current environment. What
has happened over the past
year is typical of the bond
market in the sense that
longer-term securities
outperformed shorter-term
ones as interest rates fell. Not
only have prices on long-term
bonds risen more than short
ones, but their yields have
fallen more as well - that is,
the yield curve has flattened.
This flattening exaggerated
the price appreciation of
long-term issues relative to
intermediate ones.
"Going forward, however, if
the Federal Reserve Board
were to continue to ease
short-term interest rates, the
yield curve could steepen.
Therefore, given that prices
have risen and yields have
fallen significantly in
longer-term securities over
the past year, 15-year
mortgages could outperform
longer-term securities
because of their shorter
maturities. In other words,
given current conditions, any
remaining opportunities may
lie in shorter maturities rather
than longer ones."
INVESTMENT CHANGES

COUPON DISTRIBUTION AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

5 - 5.99% 0.5 0.5

6 - 6.99% 20.9 13.3

7 - 7.99% 23.7 27.9

8 - 8.99% 29.9 23.8

9 - 9.99% 10.8 17.3

10 - 10.99% 3.0 3.3

11% and over 2.4 2.0

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 4.9 6.6

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 3.4 3.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
ASSET ALLOCATION
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 8.800000000000001
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 46.0
Row: 1, Col: 5, Value: 45.2
Mortgage-backed
securities ** 88.1%
Short-term
investments 11.9%
GNMA SECURITIES - 72.6%
Mortgage-backed
securities * 91.2%
Short-term
investments 8.8%
GNMA SECURITIES - 73.2%
Row: 1, Col: 1, Value: 11.9
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 44.1
Row: 1, Col: 5, Value: 44.0
*
**

INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investments in Securities

U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 91.2%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORP. - 7.4%
5 1/2%, 6/1/00 to 4/1/01 $ 2,368,785 $ 2,297,721
6 1/2%, 11/1/23 to 9/1/24 9,510,323 9,184,465
8 1/2%, 10/1/18 to 2/1/19 28,724 29,967
9%, 7/1/08 to 7/1/21 5,328,508 5,632,496
9 3/4%, 12/1/08 to 4/1/13 471,144 506,042
10%, 1/1/09 to 11/1/20 7,028,395 7,744,154
10 1/4%, 8/1/10 to 11/1/16 1,139,592 1,252,106
10 1/2%, 1/1/16 to 12/1/20 4,292,365 4,711,580
11 1/4%, 9/1/13 227,610 250,321
12%, 5/1/10 to 2/1/17 661,865 751,310
12 1/2%, 11/1/12 to 5/1/15 1,285,933 1,478,334
13%, 11/1/12 to 11/1/14 318,050 370,172
13 1/2%, 1/1/13 to 12/1/14 147,686 174,058
34,382,726
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 10.6%
6%, 2/1/24 to 2/1/26 13,524,058 12,704,094
6 1/2%, 1/1/24 to 2/1/26 34,973,092 33,737,843
11%, 8/1/10 700,325 782,432
12 1/4%, 12/1/14 to 6/1/15 34,708 39,649
12 1/2%, 11/1/13 to 5/1/21 1,604,009 1,853,097
13 1/4%, 9/1/11 538,173 629,490
49,746,605
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 73.2%
6%, 9/15/08 to 3/15/11 15,144,375 14,746,832
6%, 2/15/11 to 3/15/11 (a) 22,000,000 21,436,360
6 1/2%, 11/15/23 to 5/15/24 6,042,883 5,826,421
7%, 12/15/07 to 1/15/26 52,136,611 51,678,908
7 1/2%, 10/15/22 to 11/15/25 58,619,509 59,359,595
8%, 1/15/02 to 10/15/25 91,484,686 94,588,649
8 1/2%, 2/15/16 to 8/15/24 42,954,687 45,315,323
9%, 1/15/05 to 3/15/26 18,705,470 19,723,518
9 1/2%, 3/15/01 to 1/15/23 22,463,048 24,453,990
10 1/2%, 9/15/00 173,857 184,288
11%, 3/15/10 to 2/15/25 1,023,457 1,152,566
11 1/2%, 10/15/10 to 12/15/15 1,587,587 1,809,840
12%, 12/15/12 to 5/15/15 872,424 1,008,028
12 1/2%, 9/15/14 50,283 59,178
13%, 9/15/13 to 1/15/15 583,767 690,667
342,034,163
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $414,844,132) 426,163,494
REPURCHASE AGREEMENTS - 8.8%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.41%, dated
2/29/96 due 3/1/96 $ 41,161,185 $ 41,155,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $455,999,132) $ 467,318,494
LEGEND
1. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $464,410,147. Net unrealized appreciation
aggregated $2,908,347, of which $6,448,431 related to appreciated
investment securities and $3,540,084 related to depreciated investment
securities.
At August 31, 1995, the fund had a capital loss carryforward of
approximately $15,877,000 all of which will expire on August 31, 2003.
The fund intends to elect to defer to its fiscal year ending August 31,
1996 approximately $2,441,000 of losses recognized during the period
November 1, 1994 to August 31, 1995.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 467,318,494
agreements of $41,155,000) (cost $455,999,132) -
See accompanying schedule

Receivable for investments sold 6,665,990

Interest receivable 2,713,746

TOTAL ASSETS 476,698,230

LIABILITIES

Payable for investments purchased $ 6,272,654
Regular delivery

Delayed delivery 21,925,458

Payable for fund shares redeemed 376,036

Distributions payable 542,746

Accrued management fee 233,785

TOTAL LIABILITIES 29,350,679

NET ASSETS $ 447,347,551

Net Assets consist of:

Paid in capital $ 460,988,317

Distributions in excess of net investment income (691,407)

Accumulated undistributed net realized gain (loss) (24,268,721)
on investments

Net unrealized appreciation (depreciation) on 11,319,362
investments

NET ASSETS, for 44,576,315 shares outstanding $ 447,347,551

NET ASSET VALUE, offering price and redemption price per $10.04
share ($447,347,551 (divided by) 44,576,315 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INVESTMENT INCOME $ 16,073,099
Interest

EXPENSES

Management fee $ 1,411,124

Non-interested trustees' compensation 796

Total expenses before reductions 1,411,920

Expense reductions (87,987) 1,323,933

NET INVESTMENT INCOME 14,749,166

REALIZED AND UNREALIZED GAIN (LOSS) 4,373,457
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (2,300,388)
investment securities

NET GAIN (LOSS) 2,073,069

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 16,822,235
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED FEBRUARY AUGUST 31,
29,1996 1995
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 14,749,166 $ 27,978,635
Net investment income

Net realized gain (loss) 4,373,457 (3,361,454)

Change in net unrealized appreciation (depreciation) (2,300,388) 15,797,087

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 16,822,235 40,414,268
FROM OPERATIONS

Distributions to shareholders from net investment income (14,245,812) (28,060,611)

Share transactions 67,932,728 101,131,175
Net proceeds from sales of shares

Reinvestment of distributions 10,826,020 20,761,254

Cost of shares redeemed (53,624,421) (115,626,833)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,134,327 6,265,596
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 27,710,750 18,619,253

NET ASSETS

Beginning of period 419,636,801 401,017,548

End of period (including distributions in excess $ 447,347,551 $ 419,636,801
of net investment income of $691,407 and
$1,194,761, respectively)

OTHER INFORMATION
Shares

Sold 6,731,722 10,429,984

Issued in reinvestment of distributions 1,073,350 2,153,968

Redeemed (5,314,549) (12,104,724)

Net increase (decrease) 2,490,523 479,228

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED AUGUST 31, DECEMBER 27,
ENDED FEBRUARY 1990
29, 1996 (COMMENCEMENT
OF OPERATIONS) TO

</TABLE>

(UNAUDITED) 1995 1994 D 1993 1992 AUGUST 31,
1991

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

Net asset value, $ 9.970 $ 9.640 $ 10.270 $ 10.400 $ 10.160 $ 10.000
beginning of period

Income from .342 .690 .332 .800 .832 .578
Investment
Operations
Net investment
income

Net realized and .057 .347 (.359) (.050) .236 .154
unrealized
gain (loss)

Total from .399 1.037 (.027) .750 1.068 .732
investment
operations

Less Distributions (.329) (.707) (.533) (.640) (.808) (.572)
From net investment
income

From net - - - (.240) (.020) -
realized gain

In excess of net - - (.070) - - -
realized gain

Total distributions (.329) (.707) (.603) (.880) (.828) (.572)

Net asset value, end $ 10.040 $ 9.970 $ 9.640 $ 10.270 $ 10.400 $ 10.160
of period

TOTAL RETURN B, C 4.03% 11.28% (.25) 7.61% 10.86% 7.53%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 447,348 $ 419,637 $ 401,018 $ 683,904 $ 837,588 $ 422,498
period (000 omitted)

Ratio of expenses to .61% A .65% .65% .41% .17% .25% A
average net assets , E E E , E

Ratio of net 6.79% A 7.30% 7.36% 7.63% 8.09% 8.69% A
investment income
to average net
assets

Portfolio turnover rate 145% A 229% 285% 241% 168% 41% A

</TABLE>

A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D EFFECTIVE SEPTEMBER 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.
E 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 February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Ginnie Mae Fund (the fund) is a fund of Fidelity Union Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which market quotations are not
readily available are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes 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 is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities and losses deferred due to wash sales
and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). 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.
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 that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. 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 when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of long-term U.S. government and government agency
obligations aggregated $315,671,378 and $306,920,534, 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
$4,056 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse a portion of the fund's expenses. For the period,
the reimbursement reduced expenses by $87,987.
TO CALL FIDELITY

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

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

MUNICIPAL INCOME
FUND
(FORMERLY SPARTAN MUNICIPAL INCOME PORTFOLIO)
SEMIANNUAL REPORT
FEBRUARY 29, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

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

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

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

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

NOTES 29 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

Spartan Municipal Income 5.44% 11.52% 49.95% 60.80%

Lehman Brothers Municipal Bond 4.87% 11.05% 50.71% n/a
Index

General Municipal Debt Funds Average 4.99% 9.87% 47.30% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on June 4, 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 Lehman Brothers Municipal Bond Index, which reflects the performance of
the investment-grade municipal bond market. To measure how the fund's
performance stacked up against its peers, you can compare it to the general
municipal debt funds average, which reflects the performance of 238 funds
with similar objectives tracked by Lipper Analytical Services over the past
six months. Both benchmarks include reinvested dividends and capital gains,
if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Municipal Income 11.52% 8.44% 8.62%

Lehman Brothers Municipal Bond 11.05% 8.55% n/a
Index

General Municipal Debt Funds Average 9.87% 8.04% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Municipal Income Fund on June 30, 1990, shortly after the fund started. As
the chart shows, by February 29, 1996, the value of your investment would
have grown to $15,919 - a 59.19% increase on your initial investment. This
assumes you still owned the fund on February 29, 1996, and therefore does
not include the effect of the $5 account closeout fee on an average sized
account. For comparison, look at how the Lehman Brothers Municipal Bond
Index did over the same period. With dividends reinvested, the same $10,000
would have grown to $15,940 - a 59.40% 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED AUGUST 31,
SIX MONTHS
ENDED
FEBRUARY 29,

1996 1995 1994 1993 1992 1991

Dividend return 2.68% 6.26% 5.54% 6.69% 7.15% 7.90%

Capital appreciation return 2.76% 1.93% -6.96% 6.86% 3.77% 4.74%

Total return 5.44% 8.19% -1.42% 13.55% 10.92% 12.64%
</TABLE>
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by
the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee on an average sized account.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.18(cents) 26.84(cents) 55.33(cents)

Annualized dividend rate 4.98% 5.18% 5.41%

30-day annualized yield 4.77% - -

30-day annualized tax-equivalent yield 7.45% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.56 over
the past month, $10.40 over the past six months and $10.23 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 36% federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with David Murphy, Portfolio Manager of Spartan Municipal
Income Fund
Q. DAVID, HOW DID THE FUND PERFORM?
A. Quite well. For the six- and 12-month periods ended February 29, 1996,
the fund had total returns of 5.44% and 11.52%, respectively. For the same
periods, the general municipal debt funds average returned 4.99% and 9.87%,
as tracked by Lipper Analytical Services. The Lehman Brothers Municipal
Bond Index returned 4.87% and 11.05%, for the same six- and 12-month
periods.
Q. WHAT KIND OF PERIOD WAS IT FOR MUNICIPAL BONDS?
A. It was generally a good period for municipal bonds. Interest rates
continued to decline, although not to the same extent that they had fallen
in the previous six months. Inflation remained low and the economy was
growing at a slow but steady pace. In the last month of the period,
municipal bonds outperformed Treasuries. Municipals had lagged Treasuries
during much of 1995, primarily because of fears that the flat tax proposal
could hurt the prices of municipals. Recently, however, investors appear to
be less concerned that the more dramatic proposals - those that have the
potential to hurt municipal bonds the most - will be enacted.
Q. WHAT CONTRIBUTED TO THE FUND'S SUCCESS?
A. One of the primary factors was the fund's growing stake in
investment-grade bonds, which performed better than non-investment grade
bonds during the period. The term "investment-grade" refers to ratings
given by Moody's Investors Service, Inc. and other rating agencies of an
issuer's ability to pay a bond's principal and interest in a timely
fashion. Bonds below the Moody's rating "Baa" are considered speculative,
or non-investment grade. Last fall, I began to reduce the fund's holdings
in securities rated below investment-grade and replace them with
investment-grade securities. In my view, an investor was not rewarded with
enough incremental yield for taking on the additional risk of the
non-investment grade bonds.
Q. DID ANY INDIVIDUAL BONDS HELP PERFORMANCE DURING THE PERIOD?
A. The Space Center Houston - whose tax-exempt bonds are issued under the
authority of the Harris County Cultural and Educational Facilities -
enjoyed a turnaround and the bonds were some of the fund's best performers
during the period. The bonds had gone into technical default last year,
which meant that for a time they were paying interest out of a debt service
reserve fund. In a restructuring move, the issuer offered to exchange its
existing holdings for cash or new securities, a transaction known as a
tender offer. This tender successfully lowered the Center's debt costs,
which in turn led to price appreciation for the new bonds.
Q. THROUGHOUT THE PERIOD, THERE WAS AN INCREASE IN THE FUND'S INVESTMENTS
IN GENERAL OBLIGATION BONDS (GOS). WHAT MADE THEM ATTRACTIVE?
A. GOs are backed by the full faith and credit (which includes the taxing
and further borrowing power) of a municipality or state. GOs in general
have benefited from the improving economy as tax revenues have risen. For
example, I bought bonds issued by the state of California, which is
enjoying an economic turnaround that I believed could soon be reflected in
the state's fiscal health. I focused on buying bonds issued by the state
because that's where the effects of an improving economy will be noticeable
first. State revenues, including income taxes, tend to be more economically
sensitive than local revenues, such as property taxes. The fund's
California bonds performed well during the past six months. I also
increased the fund's stake in New York City bonds, which are attractive
partly because of their relatively high yields. Even though the city is not
really experiencing a strong economic recovery, it has been able to
successfully manage its budget to yield a surplus for many years. In light
of that factor and other fiscal safeguards, I view New York City as a
stable situation.
Q. ON THE OTHER HAND, THE FUND'S INVESTMENTS IN HEALTH CARE BONDS DECLINED
DURING THE PERIOD. WHAT PROMPTED THAT MOVE?
A. I sold some of our health care bonds at attractive prices. In addition,
one of the fund's holdings - HealthOne, a Denver-based hospital - recently
was acquired by the corporate healthcare chain Columbia/HCA. Most of our
HealthOne holdings were bought by Columbia at a substantial gain for the
fund.
Q. WHEN SELECTING INVESTMENTS FOR THE FUND, DID YOU CONCENTRATE ON ANY
PARTICULAR MATURITY RANGE?
A. Yes. I focused on buying bonds with intermediate maturities between five
and 15 years. Longer-maturity bonds are generally more sensitive to
changing interest rates than intermediate-maturity bonds. But in my
opinion, the incremental yield that 20- to 30-year bonds offered during the
period wasn't enough to compensate for their additional interest rate risk.
Q. WHAT'S YOUR OUTLOOK?
A. There are several developments I'll be watching in 1996. One is the
political scene. While tax reform fears seem to have abated at this
juncture, the issue could re-emerge as the presidential campaign continues.
Another is the supply of municipal bonds. I anticipate that new-issue
supply will be more or less equal to last year's new-issue supply, although
the total outstanding amount of municipal bonds available should decline as
issuers redeem bonds or as the bonds mature. That decline in supply could
provide some support for the municipal market this year.
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: to provide high
current income exempt from
federal income taxes
START DATE: June 4, 1990
SIZE: as of February 29,
1996, more than $578 million
MANAGER: David Murphy,
since October 1, 1995;
manager, Fidelity High Yield
Tax-Free Fund, since
October, 1995; Fidelity Limited
Term Municipal Income Fund,
since 1989; Fidelity Advisor
Intermediate Municipal
Income Fund, since March
1995; Spartan Intermediate
Municipal Income and
Spartan New York
Intermediate Municipal Income
funds, 1993 to 1995;
Spartan Short-Intermediate
Municipal Income Fund, 1989
to 1995; joined Fidelity in
1989
(checkmark)
DAVID MURPHY ON HIS
INVESTMENT STYLE:
"I describe myself as a total
return investor. That means I
focus both on income and the
effects of price changes of
bonds in the portfolio. Income
is, of course, extremely
important both as a
component of total return and
for its tax advantages to
municipal bond investors. I
only go after bonds whose
return justifies the risks taken.
My goal is to provide returns
that are higher than the
overall market.
"In determining the risks and
rewards available in the
market, I use the Lehman
Brothers Municipal Bond
Index as a proxy for the
overall market. I believe this
index is the best available
benchmark for managing a
national municipal bond fund."
INVESTMENT CHANGES

TOP FIVE STATES AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

New York 12.4 9.7

Texas 11.2 4.1

California 10.9 6.2

Florida 6.1 3.6

Washington 5.3 8.8

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

General Obligation 34.1 22.8

Electric Revenue 11.0 18.6

Industrial Development 8.3 9.2

Water and Sewer 7.8 6.6

Special Tax 7.2 4.1

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 13.3 14.6

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 7.6 7.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 6.4
Row: 1, Col: 2, Value: 3.4
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 15.6
Row: 1, Col: 5, Value: 74.59999999999999
Row: 1, Col: 1, Value: 5.3
Row: 1, Col: 2, Value: 10.7
Row: 1, Col: 3, Value: 1.8
Row: 1, Col: 4, Value: 17.0
Row: 1, Col: 5, Value: 65.2
Aaa, Aa, A 74.6%
Baa 15.6%
Ba, B 0.0%
Non-rated 3.4%
Short-term
investments 6.4%
Aaa, Aa, A 66.2%
Baa 17.0%
Ba, B 0.8%
Non-rated 10.7%
Short-term
investments 5.3%
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNTED FOR 1.9% AND 9.3% OF THE FUND'S
INVESTMENTS ON FEBRUARY 29, 1996, AND AUGUST 31, 1995, RESPECTIVELY.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 93.6%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
ALABAMA - 0.6%
Alabama State Gen. Oblig. Rfdg. 6% 3/1/00 Aaa $ 3,420,000 $ 3,638,025
ALASKA - 1.1%
Alaska Student Loan Corp. Student Loan Rev.
Series A (c):
7.30% 7/1/00, (AMBAC Insured) Aaa 1,100,000 1,192,125
5.90% 7/1/03, (AMBAC Insured) Aaa 1,070,000 1,099,425
North Slope Borough Gen. Oblig.
(Cap. Appreciation):
Series A, 0% 6/30/99, (MBIA Insured) Aaa 3,500,000 3,031,875
Series B, 0% 6/30/05,
(Cap. Guaranty Insured) Aaa 2,500,000 1,578,125
6,901,550
ARIZONA - 2.6%
Arizona State Univ. Rev. Rfdg. Sys. 6% 7/1/07 A1 1,250,000 1,370,313
Chandler:
7.375% 7/1/09, (FGIC Insured) Aaa 1,000,000 1,220,000
4.375% 7/1/12, (FGIC Insured) Aaa 1,000,000 871,250
Maricopa County Series C, 8.90% 7/1/99 A 3,950,000 4,522,750
Pima County Unified School Dist. Tucson Proj.
of 1989 Series G, 8% 7/1/04, (MBIA Insured) Aaa 2,000,000 2,465,000
Tucson Ltd. Tax Rfdg. 7.50% 7/1/01 A1 2,525,000 2,900,594
Tucson Wtr. Rev. Series D:
9.75% 7/1/07 A1 500,000 701,875
9.75% 7/1/08 A1 500,000 712,500
9.75% 7/1/09 A1 750,000 1,081,875
15,846,157
ARKANSAS - 0.3%
Arkansas State College Savings (Cap. Appreciation)
Series A:
0% 6/1/03 Aa 1,280,000 897,600
0% 6/1/04 Aa 1,110,000 733,988
1,631,588
CALIFORNIA - 10.9%
California Gen. Oblig.:
6.50% 3/1/02, (AMBAC Insured) Aaa 2,525,000 2,790,125
6.75% 5/1/03 A1 1,000,000 1,130,000
6.60% 2/1/10 A1 5,205,000 5,927,194
5.25% 10/1/16 A1 3,200,000 3,064,000
5.25% 10/1/17 A1 3,500,000 3,325,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series 1983 A, 0% 2/1/15 Aa $ 187,000 $ 29,116
Series A, 5.30% 8/1/14, (MBIA Insured) (b) Aaa 1,000,000 985,000
California Pub. Wks. Board Lease Rev.:
(California University Proj.) Series A,
5.50% 6/1/14 A1 5,500,000 5,390,000
(Secretary of State) Series A, 6% 5/1/13 A1 3,500,000 3,552,500
(Various California State Univ. Projs.) Series B:
5.55% 6/6/10 A1 1,500,000 1,526,250
6% 10/1/14 A 1,000,000 1,016,250
California Rural Home Mtg. Fin. Auth. Lease
Rev. Series A, 4.45% 8/1/01, (MBIA Insured) Aaa 1,000,000 993,750
Contra Costa Trans. Auth. Sales Tax Rev.
Series A, 6% 3/1/07, (FGIC Insured) (b) Aaa 3,500,000 3,819,375
East Bay Mun. Util. Dist. Wtr. Sys. Rev. Rfdg.
6.10% 6/1/07 A1 1,250,000 1,346,875
Industry Urban Ind. Dev. Agcy. Rev. (Civic
Recreational Proj. #1-B) 7.375% 5/1/15 - 1,140,000 1,194,150
Long Beach Harbor Rev. (c):
9% 5/15/02, (MBIA Insured) Aaa 1,275,000 1,568,250
8.50% 5/15/03, (MBIA Insured) Aaa 1,235,000 1,512,875
Sacramento Pwr. Auth. (Cogeneration Proj.)
5.875% 7/1/15 BBB- 1,600,000 1,550,000
San Francisco City & County Swr. Rev. Rfdg.
5.90% 10/1/08, (AMBAC Insured) Aaa 5,000,000 5,306,250
San Joaquin County Ctfs. of Prtn. (Cap. Facs. Proj.)
4.90% 11/15/08, (MBIA Insured) Aaa 4,000,000 3,920,000
South Orange County Pub. Fing. Auth. Spl. Tax
Rev. (Foothill Area) Series C,
7.50% 8/15/07, (FGIC Insured) Aaa 2,500,000 3,037,500
University of California Rev. Rfdg. (Multiple
Purp. Projs.) Series C, 5.125% 9/1/13,
(AMBAC Insured) Aaa 1,800,000 1,723,500
West & Central Basin Fin. Auth. Series C (e):
5.20% 8/1/07, (AMBAC Insured) Aaa 5,800,000 5,901,500
5.25% 8/1/08, (AMBAC Insured) Aaa 6,100,000 6,183,875
66,793,335
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
COLORADO - 2.9%
Adams County Single Family Mtg. Rev. Rfdg.
Series A-2, 8.70% 6/1/12, (FSA Insured) Aaa $ 100,000 $ 109,125
Colorado Health Facs. Auth. Rev. (Rocky
Mountain Adventist) 6.625% 2/1/13 Baa 7,500,000 7,687,500
Denver City & County Arpt. Rev. (c):
Series A:
6.60% 11/15/97 Baa 1,000,000 1,028,750
6.90% 11/15/98 Baa 1,000,000 1,048,750
(Cap. Appreciation):
0% 11/15/02, (MBIA Insured) Aaa 4,900,000 3,534,125
0% 11/15/05, (MBIA Insured) Aaa 3,000,000 1,826,250
Series D, 7% 11/15/25 Baa 2,500,000 2,768,750
18,003,250
CONNECTICUT - 1.4%
Connecticut Gen. Oblig. Series A, 7% 3/15/03 Aa 3,000,000 3,438,750
Connecticut Health & Ed. Facs. Auth. Rev.
(St. Raphael Hosp.) 5.30% 7/1/10,
(AMBAC Insured) Aaa 2,990,000 3,016,163
Connecticut Spl. Tax Oblig. Rev. Rfdg.
(Trans. Infrastructure) Series A,
5.25% 9/1/07, (MBIA Insured) Aaa 1,750,000 1,813,438
8,268,351
DISTRICT OF COLUMBIA - 1.8%
District of Columbia Hosp. Rev. (Hosp. for
Sick Children) Series A, 8.875% 1/1/21 - 3,395,000 3,662,356
District of Columbia Redev. Land Agcy. Spl.
Tax Rev. (Washington D.C. Sports Arena):
4.50% 11/1/96 Baa 1,700,000 1,700,459
5.40% 11/1/00 Baa 1,000,000 1,002,500
5.625% 11/1/10 Baa 1,250,000 1,217,188
Metropolitan Washington Arpt. Auth. Gen. Arpt.
Rev. Series A, 7.25% 10/1/10,
(FGIC Insured) (c) Aaa 3,000,000 3,333,750
10,916,253
FLORIDA - 5.5%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.) 7.95% 12/1/08 A 3,335,000 3,706,019
Florida Board of Ed. Cap. Outlay (Pub. Ed.)
Series C, 5.40% 6/1/10, (MBIA Insured) Aaa 2,300,000 2,317,250
Florida Muni. Pwr. Agcy. Rev. Rfdg.
(Stanton II Proj.) 4.50% 10/1/16,
(AMBAC Insured) Aaa 3,000,000 2,628,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Port Auth. Rev. (b)(c):
5.75% 11/1/09, (MBIA Insured) Aaa $ 1,000,000 $ 1,022,500
5.625% 11/1/12, (MBIA Insured) Aaa 2,155,000 2,114,594
5.625% 11/1/18, (MBIA Insured) Aaa 3,000,000 2,906,250
Lakeland Elec. & Wtr. Rev. Rfdg. Jr. Sub. Lien (b):
6.50% 10/1/04, (FGIC Insured) Aaa 13,755,000 15,250,856
6.50% 10/1/06, (FGIC Insured) Aaa 1,000,000 1,111,250
6.50% 10/1/09, (FGIC Insured) Aaa 2,500,000 2,768,750
33,826,219
GEORGIA - 3.4%
Fulton County School Dist. Rfdg. 6.375% 5/1/14 Aa 2,000,000 2,230,000
Fulton Wtr. & Swr. 6.25% 1/1/08, (FGIC Insured) Aaa 2,100,000 2,336,250
Georgia Gen. Oblig.:
Series B, 7.20% 3/1/06 Aaa 5,000,000 6,018,750
Series C, 7.70% 4/1/96 Aaa 1,500,000 1,505,460
Series D, 6.50% 8/1/02 Aaa 2,000,000 2,242,500
Series E, 6.75% 12/1/01 Aaa 3,585,000 4,046,569
Georgia Residential Fin. Auth. Home
Ownership Mtg. (Cap. Appreciation)
Series 1984 B, 0% 12/1/15 Aa 22,505,000 2,646,138
21,025,667
HAWAII - 0.3%
Hawaii Arpts. Sys. Rev. 2nd Series,
7.50% 7/1/20, (FGIC Insured) (c) Aaa 1,500,000 1,674,375
IDAHO - 0.6%
Idaho Falls Elec. Rfdg. 0% 4/1/07, (FGIC Insured) Aaa 2,500,000
1,459,375
Idaho Hsg. Agcy. Single Family Mtg.
Series 1991 B, 7.50% 7/1/24 (c) AA 2,240,000 2,340,800
3,800,175
ILLINOIS - 3.9%
Chicago Gen. Oblig. Rfdg. Series B,
5.125% 1/1/15, (AMBAC Insured) Aaa 2,250,000 2,171,250
Chicago O'Hare Int'l. Arpt.:
Rev. Rfdg.:
2nd Lien (Gen. Arpt. Projs.) Series A,
6.375% 1/1/15, (MBIA Insured) Aaa 1,500,000 1,586,250
Sr. Lien Series A, 5% 1/1/12 A1 4,500,000 4,314,375
Spl. Facs. Rev. (United Airlines, Inc.)
8.25% 5/1/99 (c) Baa3 3,650,000 3,964,813
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
ILLINOIS - CONTINUED
Chicago Park Dist. Rfdg. (b):
5.50% 1/1/99, (FGIC Insured) Aaa $ 1,000,000 $ 1,036,250
5.50% 1/1/00, (FGIC Insured) Aaa 500,000 520,625
6.25% 1/1/09, (FGIC Insured) Aaa 750,000 818,438
Chicago Residential Mtg. Rev. Rfdg. (Cap.
Appreciation) Series B, 0% 10/1/09,
(MBIA Insured) Aaa 8,530,000 3,348,025
Chicago Single Family Mtg. Rev. (Cap.
Appreciation) Series A, 0% 12/1/16,
(FGIC Insured) Aaa 13,450,000 1,832,563
DeKalb Single Family Mtg. Rev. 7.45% 12/1/09,
(GNMA Coll.) (c) Aaa 1,780,000 1,889,025
Metropolitan Pier & Exposition Auth. Dedicated
Tax Rev. 0% 6/15/00, (AMBAC Insured) Aaa 2,700,000 2,224,125
23,705,739
INDIANA - 0.2%
Indianapolis Resource Recovery Rev. Rfdg.
(Ogden Martin Sys. Inc. Proj.) 6.75% 12/1/06,
(AMBAC Insured) (b) Aaa 1,000,000 1,121,250
IOWA - 0.1%
Iowa Fin. Auth. Rev. (Iowa State Revolving Fund)
4.95% 5/1/07 A 750,000 757,500
KANSAS - 0.9%
Johnson County Unified School Dist. #512
(Shawnee Mission):
8% 10/1/03 Aa1 1,015,000 1,247,181
8% 10/1/04 Aa1 1,225,000 1,526,656
8% 10/1/05 Aa1 1,250,000 1,575,000
Reno County Mtg. Rev. Rfdg. (Single Family)
Series B, 8.70% 9/1/11 Aa 810,000 872,775
5,221,612
KENTUCKY - 1.1%
Kentucky Tpk. Auth. Toll Rd. Rev.
Series A, 8.50% 7/1/96
(Pre-Refunded to 7/1/96 @ 102) (d) Aaa 5,000,000 5,183,550
Owensboro Elec. Lt. & Pwr. Rev. Series B,
0% 1/1/10, (AMBAC Insured) Aaa 4,000,000 1,870,000
7,053,550
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
LOUISIANA - 1.4%
Louisiana Gen. Oblig. Series A,
6.75% 5/15/04, (MBIA Insured) Aaa $ 7,865,000 $ 8,995,594
MARYLAND - 1.6%
Baltimore Pub. Impt. 7.25% 10/15/05,
(FGIC Insured) Aaa 3,100,000 3,704,500
Maryland Health & Higher Ed. Facs. Auth. Rev.
Rfdg. (Doctors Commty. Hosp.):
5.75% 7/1/13 Baa 2,000,000 1,847,500
5.50% 7/1/24 Baa 1,500,000 1,291,875
Montgomery County (Construction & Pub. Impt.)
Series B, 6.80% 11/1/06
(Pre-Refunded to 11/1/99 @ 102) (d) Aaa 2,660,000 2,945,950
9,789,825
MASSACHUSETTS - 5.3%
Massachusetts Bay Trans. Auth. Rfdg. (Gen.
Trans. Sys.) Series A, 5.50% 3/1/12 A1 5,000,000 5,056,250
Massachusetts Edl. Loan Auth. (Edl. Loan Rev.)
Issue E, Series B (c):
5.75% 7/1/05, (AMBAC Insured) Aaa 3,090,000 3,229,050
5.85% 7/1/06, (AMBAC Insured) Aaa 3,680,000 3,859,400
5.95% 7/1/09, (AMBAC Insured) Aaa 3,980,000 4,174,025
Massachusetts Gen. Oblig.:
Rfdg. Series A, 6.25% 7/1/03 A1 1,600,000 1,760,000
Consolidated Loan Series A, 6% 6/1/11 A1 1,400,000 1,442,000
Massachusetts Ind. Fin. Agcy. Rev. (Reeds Landing
Proj.) 8.625% 10/1/23 - 1,445,000 1,524,475
Massachusetts Wtr. Poll. Abatement Trust Rev.
(Massachusetts Wtr. Resource Auth. Loan Prog.)
Series A, 5.45% 2/1/13 Aa 5,825,000 5,781,313
New England Edl. Loan Marketing Corp. Rev.
Rfdg. (Student Loan):
Series A, 5.70% 7/1/05 (c) A1 4,375,000 4,457,031
Series B, 5.40% 6/1/00 A1 1,000,000 1,031,250
32,314,794
MICHIGAN - 0.2%
Michigan Hosp. Fin. Auth. Rev. Rfdg. (Pontiac
Osteopathic Hosp.) Series A, 6% 2/1/14 Baa1 1,500,000 1,381,875
MINNESOTA - 0.4%
Minneapolis Rfdg. (Sports Arena Proj.) (Cap.
Appreciation) Series B, 0% 12/1/03 Aaa 1,175,000 815,156
Northern Minnesota Muni. Pwr. Agcy. Elec.
Sys. Rev. Rfdg. Series A, 7.25% 1/1/16 A 1,700,000 1,814,750
2,629,906
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
MISSISSIPPI - 0.3%
Mississippi Hosp. Equip. & Facs. Auth. Rev.
(Rush Med. Foundation Proj.) Series A,
8.75% 1/1/16 Baa $ 1,500,000 $ 1,650,000
MISSOURI - 0.4%
Missouri Reg'l. Convention & Sports Complex
Auth. Rfdg. (Convention & Sports Proj.)
Series A, 5.50% 8/15/13 A1 2,000,000 1,935,000
St. Louis Regional Convention & Sports
Complex Auth. Series C, 7.75% 8/15/01 - 770,000 814,275
2,749,275
MONTANA - 1.6%
Montana Board of Investment Payroll Tax
(Workers Compensation):
6.875% 6/1/20, (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 2,005,000 2,273,169
6.875% 6/1/20, (MBIA Insured) Aaa 5,125,000 5,611,875
Montana Coal Severance Tax Rfdg.
(Broadwater Pwr. Proj.) Series A,
6.875% 12/1/11 (c) A1 2,000,000 2,122,500
10,007,544
NEBRASKA - 0.9%
Omaha Pub. Pwr. Dist. Elec. Rev. Series C,
5.50% 2/1/14 Aa 5,650,000 5,699,438
NEW JERSEY - 1.1%
Camden County Impt. Auth. Lease Rev.
(Dockside Refrigerated Holt)
8.40% 4/1/24 (c) - 3,000,000 3,063,750
New Jersey State Trans. Trust Fund Auth. Rfdg.
Series B, 6.50% 6/15/10, (MBIA Insured) Aaa 3,000,000 3,401,250
6,465,000
NEW MEXICO - 1.0%
Albuquerque Arpt. Rev. Series A, 6.60% 7/1/16,
(AMBAC Insured) (c) Aaa 2,375,000 2,565,000
Hobbs Single Family Mtg. Rev. Rfdg. 8.75% 7/1/11 A 1,605,000 1,733,400
New Mexico Edl. Assistance Foundation Student
Loan Rev. Series B, 5.25% 4/1/05,
(AMBAC Insured) (c) Aaa 1,600,000 1,598,000
5,896,400
NEW YORK - 12.4%
Metropolitan Trans. Auth Svc. Contract
Rfdg. (Trans. Facs.) Series O, 5.75% 7/1/08 Baa1 3,840,000 3,892,800
New York City Gen. Oblig.:
Series A, 7.75% 8/15/07 Baa1 4,000,000 4,525,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York City Gen. Oblig.: - continued
Series B:
5.70% 8/15/02 Baa1 $ 2,000,000 $ 2,035,000
7.50% 2/1/04 Baa1 1,500,000 1,657,500
Series E, 5.40% 2/15/03 Baa1 2,285,000 2,273,575
Series G:
5.40% 2/1/01 Baa1 3,000,000 3,015,000
5.60% 2/1/02 Baa1 1,875,000 1,896,094
7.50% 2/1/03 Baa1 5,000,000 5,550,000
New York City Ind. Dev. Agcy. Spl. Facs. Rev.
(Terminal One Group Assoc. Proj.) (c):
6% 1/1/19 A 5,000,000 5,012,500
6.125% 1/1/24 A 1,000,000 1,007,500
New York City Muni. Wtr. Fin. Auth. Wtr. & Swr.
Sys. Rev., Series C, 6.50% 6/15/21,
(AMBAC Insured) Aaa 2,460,000 2,555,325
New York State Dorm. Auth. Rev.:
Rfdg. (State Univ. Edl. Facs.) Series A:
5.50% 5/15/09 Baa1 4,000,000 3,940,000
5.50% 5/15/13 Baa1 13,100,000 12,657,875
5.875% 5/15/17 Baa1 5,890,000 5,897,363
(Suffolk County Judicial Facs.) Series A,
9.50% 4/15/14 Baa1 7,000,000 8,157,170
New York State Local Gov't. Assistance Corp. Rfdg.:
Series B, 6% 4/1/18 A 1,500,000 1,535,625
Series C, 5.50% 4/1/17 A 5,000,000 4,912,500
Series E, 5.25% 4/1/16 A 4,075,000 3,886,531
Triborough Bridge & Tunnel Auth. Rev.
(Gen. Purp.) Series X, 6% 1/1/14 Aa 1,575,000 1,624,219
76,031,577
NORTH CAROLINA - 1.1%
North Carolina Eastern Muni. Pwr. Agcy. Pwr.
Sys. Rev. Rfdg. Series C, 7% 1/1/07 A 2,000,000 2,212,500
North Carolina Muni. Pwr. Agcy. #1 Catawba
Elec. Rev. 5.25% 1/1/09, (MBIA Insured) Aaa 4,655,000 4,719,006
6,931,506
NORTH DAKOTA - 1.2%
Mercer County Poll. Cont. Rev. Rfdg.
(Basin Electric Pwr.):
(Antelope Valley Station Proj.)
7.20% 6/30/13, (AMBAC Insured) Aaa 5,000,000 6,050,000
2nd Series, 6.05% 1/1/19,
(AMBAC Insured) Aaa 1,000,000 1,031,250
7,081,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
OHIO - 2.4%
Bedford Hosp. Impt. Rev. Rfdg. (Bedford
Commty. Hosp.) Series 1990, 8.50% 5/15/09,
(Escrowed to Maturity) (d) - $ 1,020,000 $ 1,173,000
Euclid City School Dist. (Cap. Appreciation):
0% 12/1/02, (AMBAC Insured) Aaa 1,265,000 934,519
0% 12/1/03, (AMBAC Insured) Aaa 1,265,000 885,500
Ohio Hsg. Fin. Agcy. Mtg. Rev. (Oakleaf-Toledo
Apts. Proj.) 10.25% 12/20/25, (GNMA Coll.) Aaa 1,585,000 1,826,713
Ohio State Bldg. Auth.:
(Adult Correctional Facs.) Series A,
5.95% 10/1/14, (MBIA Insured) Aaa 4,000,000 4,140,000
(Workers Compensation Bldg. A)
4.75% 4/1/14 A 5,000,000 4,587,500
Ohio Wtr. Dev. Auth. Rev. Rfdg. (Impt. Pure
Wtr.) 5.75% 6/1/06, (MBIA Insured) Aaa 1,000,000 1,053,750
14,600,982
OREGON - 1.5%
Port Morrow Poll. Ctr. Rev. (Pacific Northwest)
Series A, 8% 7/15/11 AA- 3,420,000 3,950,100
Portland Series B:
7% 6/1/00 Aaa 1,385,000 1,540,813
7% 6/1/01 Aaa 1,480,000 1,674,250
Portland Swr. Sys. Rev. Series A, 6.25% 6/1/15 A1 1,875,000 1,999,219
9,164,382
PENNSYLVANIA - 3.5%
Clarion County Hosp. Auth. Hosp. Rev.
(Clarion Hosp. Proj.) 8.50% 7/1/21 BBB- 2,500,000 2,750,000
Pennsylvania Intergovernmental Coop Spl.
Tax Rev. Rfdg. Series A, 5% 6/15/13 A 3,000,000 2,808,750
Philadelphia Hosp. & Higher Ed. Facs. Auth.
Hosp. Rev. (Temple Univ. Hosp.) Series A,
6.50% 11/15/08 Baa1 2,000,000 2,102,500
Philadelphia Wtr. & Wastewtr. Rev. 5.65%
6/15/12, (FGIC Insured) Aaa 12,000,000 12,060,000
Somerset County Pennsylvania Hosp. Auth. Rev.
(Health Care 1st Mtg.) 8.50% 6/1/24 - 2,000,000 2,060,000
21,781,250
TENNESSEE - 0.4%
Tennessee Gen. Oblig. Series B, 6.10% 6/1/00 Aaa 2,025,000 2,169,281
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
TEXAS - 9.1%
Austin Arpt. Sys. Rev. Series A,
6.20% 11/15/15, (MBIA Insured) (c) Aaa $ 3,400,000 $ 3,531,750
Austin Indpt. School Dist. Rfdg. (Cap.
Appreciation) 0% 8/1/02, (PSF Guaranteed) Aaa 2,100,000 1,559,250
Austin Util. Sys. Rev. Rfdg. (Cap. Appreciation):
Series A, 0% 11/15/08, (MBIA Insured) Aaa 3,895,000 1,991,319
0% 11/15/09, (AMBAC Insured) Aaa 4,000,000 1,915,000
Corpus Christi Indpt. School Dist. Rfdg.
(Cap. Appreciation):
0% 8/15/01, (PSF Guaranteed) Aaa 1,535,000 1,201,138
0% 8/15/02, (PSF Guaranteed) Aaa 2,165,000 1,607,513
Cypress-Fairbanks Indpt. School Dist. Unltd.
Tax Rfdg. (Cap. Appreciation)
0% 2/1/04, (PSF Guaranteed) Aaa 1,250,000 854,688
Dallas-Fort Worth Int'l. Arpt. Facs. Impt.
Corp. Rev. (AMR Corp. Guaranteed)
7.50% 11/1/25 (c) Baa2 7,000,000 7,463,750
Dallas-Fort Worth Reg. Arpt. Rev. Rfdg.
Series A, 5.75% 11/1/02, (MBIA Insured) Aaa 1,750,000 1,874,688
Dallas Indpt. School Dist. Rfdg.
0% 8/15/07, (PSF Guaranteed) Aaa 1,000,000 556,250
East Texas Health Facs. Dev. Corp. Hosp. Rev.
(Palestine) 7.80% 8/15/18 - 3,000,000 2,647,500
El Paso Prop. Fin. Auth. Single Family Mtg. Rev.
Series A, 8.70% 12/1/18, (GNMA Coll.) (c) Aaa 1,275,000 1,375,406
Grapevine-Colleyville Indpt. School Dist. Rfdg.
(Cap. Appreciation) 0% 8/15/06 Aaa 2,580,000 1,525,425
Harris County Cultural & Edl. Facs. Fin. Corp. Rev.
Rfdg. (Space Ctr. Houston Proj.):
Series A, 9.25% 8/15/23 - 940,000 928,250
Series B, 0% 8/15/23 - 2,375,000 644,219
Houston Indpt. School Dist. Rfdg.
(Cap. Appreciation) Series A, 0% 8/15/11,
(PSF Guaranteed) Aaa 6,400,000 2,768,000
Lower Colorado River Auth. Rev. Rfdg. (Cap.
Appreciation) 0% 1/1/09, (MBIA Insured) Aaa 1,000,000 520,000
Lower Neches Valley Ind. Dev. Rev. (Mobil Oil
Refining Corp. Proj.) 6.40% 3/1/30 (c) Aa2 8,785,000 9,125,419
Midlothian Indpt. School Dist. Rfdg.
(Cap. Appreciation):
0% 2/15/07, (PSF Guaranteed) Aaa 1,935,000 1,110,206
0% 2/15/08, (PSF Guaranteed) Aaa 1,520,000 818,900
0% 2/15/10, (PSF Guaranteed) Aaa 1,525,000 726,281
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
San Antonio Elec. & Gas Rev. Rfdg. Series B,
0% 2/1/09, (FGIC Insured) Aaa $ 2,000,000 $ 1,000,000
Spring Branch Indpt. School Dist. Rfdg.
(Cap. Appreciation) 0% 2/1/05,
(PSF Guaranteed) (b) Aaa 5,725,000 3,706,938
Spring Indpt. School Dist. 4.875% 8/15/10,
(PSF Guaranteed) Aaa 2,500,000 2,393,750
Texas A&M Univ. Permanent Univ. Fund
5.50% 7/1/04 (b) Aaa 1,275,000 1,332,375
Univ. of Texas Univ. Rev. Rfdg. (Fing. Sys.)
Series A:
6% 8/15/04 Aa1 1,170,000 1,285,538
6% 8/15/05 Aa1 1,000,000 1,100,000
Winters Wtrwks. & Swr. Sys. Rev. Rfdg.
8.50% 8/1/17, (Pre-Refunded to
8/1/03 @ 100) (d) - 500,000 619,375
56,182,928
UTAH - 3.2%
Intermountain Pwr. Agcy. Pwr. Supply Sys. Rev.
Rfdg. Series B, 5.55% 7/1/11 Aa 10,000,000 9,987,500
Intermountain Pwr. Agcy. Pwr. Supply Sys. Rev.
Rfdg. Series B (b):
6.50% 7/1/04, (MBIA Insured) Aaa 2,000,000 2,235,000
6.50% 7/1/05, (MBIA Insured) Aaa 4,000,000 4,475,000
6.50% 7/1/10, (MBIA Insured) Aaa 1,500,000 1,687,500
Utah Hsg. Fin. Agcy.:
(Residential Mtg.) (Cap. Appreciation)
Series 1983 A, 0% 7/1/16 A+ 4,035,042 509,424
(Single Family Mtg.) Series G, 9.25% 7/1/19,
(FHA Guaranteed) (c) Aaa 810,000 875,813
19,770,237
VERMONT - 0.7%
Vermont Hsg. Fin. Agcy. Single Family Series 2,
7.30% 5/1/25 (c) A1 1,500,000 1,556,250
Vermont Ind. Dev. Auth. Ind. Dev. Rev.
(Radisson Hotel) Series B-1, 7.75% 11/15/15 - 2,350,000 2,582,063
4,138,313
VIRGINIA - 1.0%
Richmond Rfdg. Series B, 5.50% 1/15/05,
(FGIC Insured) Aaa 1,600,000 1,688,000
Virginia Hsg. Dev. Auth. Residential Mtg.
(Single Family Mtg.) (Cap. Appreciation)
Series 1983 B, 0% 9/1/14 Aaa 2,430,000 364,500
Virginia State Pub. Facs. Gen. Oblig. 6% 6/1/03 Aaa 4,000,000 4,390,000
6,442,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
WASHINGTON - 5.3%
Douglas County Pub. Util. Dist. #1 Wells
Hydroelec. Rev. Rfdg. (Pacific Pwr. & Lt. Co.)
8.75% 9/1/18 A $ 1,395,000 $ 1,780,369
Washington Gen. Oblig. Series 96 A,
6.75% 7/1/02 Aa 3,560,000 4,018,350
Washington Motor Vehicle Fuel Tax Gen. Oblig.
Series B, 6.50% 9/1/03 Aa 5,000,000 5,631,250
Washington Pub. Pwr. Supply Sys. Rev.
Nuclear Proj. #2:
Rfdg. Series C, 0% 7/1/05, (MBIA Insured) Aaa 11,000,000 6,875,000
5.40% 7/1/12 Aa 10,000,000 9,650,000
Nuclear Proj. #3 5.40% 7/1/12 Aa 5,000,000 4,750,000
32,704,969
TOTAL MUNICIPAL BONDS
(Cost $559,567,396) 574,763,422
MUNICIPAL NOTES (E) - 6.4%
ALABAMA - 0.2%
Phenix City Ind. Dev. Board Envir. Impt. (Mead
Coated Board Proj.) 3.55%, LOC Toronto
Dominion Bank, VRDN (c) A-1+ 1,300,000 1,300,000
ARIZONA - 0.3%
Coconino County Poll. Cont. Corp. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.) Series A,
3.60%, LOC Bank of America Nat'l. Trust &
Savings, VRDN P-1 2,200,000 2,200,000
COLORADO - 0.7%
Colorado Gen. Oblig. TRAN 4.50%, 6/27/96 SP-1+ 4,300,000 4,314,953
DELAWARE - 0.2%
Delaware Econ. Dev. Auth. (Delmarva Pwr. &
Light Proj.) Series 1994, 3.60%, VRDN (c) VMIG 1 1,000,000 1,000,000
FLORIDA - 0.6%
Sunshine St. Gov't. Fin. Comm. Rev. Series B,
LOC Union Bank of Switzerland
3.70% 4/4/96 CP A-1+ 4,000,000 4,001,800
KENTUCKY - 0.6%
Daviess County Solid Wst. Disp. Facs. Rev.
(Scott Paper Co.) Series 1993-B, 3.60%,
LOC ABN AMRO Bank, VRDN (c) VMIG 1 3,600,000 3,600,000
MUNICIPAL NOTES (E) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
LOUISIANA - 0.2%
Plaquemines Parish Environmental Rev.
(BP Expl. & Oil, Inc. Proj.) Series 1994,
3.60%, VRDN (c) P-1 $ 1,400,000 $ 1,400,000
MISSOURI - 0.7%
Missouri Higher Ed. Loan Auth. Student Loan Rev.
Series B, 3.20%, LOC Nat'l Westminster
Bank, VRDN (c) VMIG 1 4,000,000 4,000,000
SOUTH CAROLINA - 0.4%
South Carolina Jobs Econ. Dev. Auth. (Wellman,
Inc. Proj.) Series 1992, 3.50%, LOC
Wachovia Bank & Trust NA, VRDN (c) - 2,200,000 2,200,000
TEXAS - 2.1%
Brazos River Auth. Poll. Cont. Rev. Rfdg. (Texas
Utils. Elec. Co. Proj.) (c):
Series 1995-A, 3.55%, LOC Morgan
Guaranty Trust Co., VRDN VMIG 1 1,500,000 1,500,000
Series 1995-C, 3.55%, LOC Swiss Bank,
VRDN VMIG 1 3,800,000 3,800,000
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) Series 1993,
3.60%, VRDN (c) P-1 600,000 600,000
Gulf Coast Waste Disp. Auth. Poll. Cont. Rev.
(AMOCO Oil Co. Proj.) 3.55%, VRDN (c) A-1+ 300,000 300,000
Harris County Ind. Dev. Corp. Poll. Cont. Rev.
(Exxon Proj.) Series 1987, 3.55%, VRDN (c) A-1+ 1,900,000 1,900,000
Texas Gen. Oblig. TRAN Series 1995 A, 4.75%
8/30/96 MIG 1 1,000,000 1,007,310
Texas Pub. Fin. Auth. Series 1993-A,
3.60% 4/4/96 CP P-1 4,000,000 4,001,440
13,108,750
WEST VIRGINIA - 0.4%
West Virginia Pub. Energy Auth. Rev.
(Morgantown Energy Assoc. Proj. A) 3.40%,
LOC Swiss Bank, VRDN (c) A-1+ 2,500,000 2,500,250
TOTAL MUNICIPAL NOTES
(Cost $39,625,764) 39,625,753
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $599,193,160) $ 614,389,175
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
3. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
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 72.9% AAA, AA, A 73.0%
Baa 14.9% BBB 11.5%
Ba 0.0% BB 1.9%
B 0.0% B 0.2%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 3.4%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 34.1%
Electric Revenue 11.0
Industrial Development 8.3
Water and Sewer 7.8
Special Tax 7.2
Transportation 7.0
Other 5.7
Health Care 5.1
Others (individually less than 5%) 13.8
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $599,193,160. Net unrealized appreciation
aggregated $15,196,015, of which $18,259,095 related to appreciated
investment securities and $3,063,080 related to depreciated investment
securities.
At August 31, 1995, the fund had a capital loss carryforward of
approximately $2,188,000 which will expire on August 31, 2003.
The fund intends to elect to defer to its fiscal year ending August 31,
1996 approximately $21,291,000 of losses recognized during the period
November 1, 1994 to August 31, 1995.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (cost $599,193,160) - $ 614,389,175
See accompanying schedule

Receivable for investments sold 5,468,035

Interest receivable 7,413,292

TOTAL ASSETS 627,270,502

LIABILITIES

Payable to custodian bank $ 42,064

Payable for investments purchased 2,585,700
Regular delivery

Delayed delivery 45,321,360

Payable for fund shares redeemed 231,071

Distributions payable 611,060

Accrued management fee 253,751

TOTAL LIABILITIES 49,045,006

NET ASSETS $ 578,225,496

Net Assets consist of:

Paid in capital $ 583,190,175

Accumulated undistributed net realized gain (loss) on (20,160,694)
investments

Net unrealized appreciation (depreciation) on 15,196,015
investments

NET ASSETS, for 55,266,970 shares outstanding $ 578,225,496

NET ASSET VALUE, offering price and redemption price per $10.46
share ($578,225,496 (divided by) 55,266,970 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INTEREST INCOME $ 16,460,004

EXPENSES

Management fee $ 1,582,806

Non-interested Trustees' compensation 1,072

Total expenses before reductions 1,583,878

Expense reductions (59,880) 1,523,998

NET INTEREST INCOME 14,936,006

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

Investment securities 3,700,086

Futures contracts 190,018 3,890,104

Change in net unrealized appreciation (depreciation) on:

Investment securities 11,997,230

Futures contracts (108,178) 11,889,052

NET GAIN (LOSS) 15,779,156

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 30,715,162
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED FEBRUARY AUGUST 31,
29,1996 1995
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 14,936,006 $ 35,085,345
Net interest income

Net realized gain (loss) 3,890,104 (23,234,406)

Change in net unrealized appreciation (depreciation) 11,889,052 27,681,497

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 30,715,162 39,532,436
FROM OPERATIONS

Distributions to shareholders (14,936,006) (35,181,331)
From net interest income

From net realized gain (112,137) (5,213,637)

TOTAL DISTRIBUTIONS (15,048,143) (40,394,968)

Share transactions 29,322,815 82,506,178
Net proceeds from sales of shares

Reinvestment of distributions 11,070,201 29,999,336

Cost of shares redeemed (51,899,606) (217,831,944)

Redemption fees 8,949 69,284

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (11,497,641) (105,257,146)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 4,169,378 (106,119,678)

NET ASSETS

Beginning of period 574,056,118 680,175,796

End of period $ 578,225,496 $ 574,056,118

OTHER INFORMATION
Shares

Sold 2,812,912 8,465,664

Issued in reinvestment of distributions 1,062,370 3,070,143

Redeemed (4,983,660) (22,701,405)

Net increase (decrease) (1,108,378) (11,165,598)

</TABLE>

FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED AUGUST 31,
ENDED FEBRUARY
29, 1996

(UNAUDITED) 1995 1994 D 1993 1992 1991

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

Net asset value, $ 10.180 $ 10.070 $ 11.370 $ 10.710 $ 10.360 $ 9.890
beginning of period

Income from .268 .587 .611 .663 .704 .739
Investment
Operations
Net interest income

Net realized .282 .189 (.752) .727 .387 .463
and unrealized
gain (loss)

Total from .550 .776 (.141) 1.390 1.091 1.202
investment
operations

Less Distributions (.268) (.587) (.611) (.663) (.704) (.739)
From net interest
income

From net (.002) (.080) (.550) (.070) (.040) -
realized gain

Total distributions (.270) (.667) (1.161) (.733) (.744) (.739)

Redemption fees - .001 .002 .003 .003 .007
added to paid in
capital

Net asset value, end $ 10.460 $ 10.180 $ 10.070 $ 11.370 $ 10.710 $ 10.360
of period

TOTAL RETURN B, C 5.45% 8.20% (1.42) 13.55% 10.93% 12.65%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 578,225 $ 574,056 $ 680,176 $ 912,710 $ 870,664 $ 550,930
period (000 omitted)

Ratio of expenses to .53% A, .55% .55% .47% .36% .23%
average net assets E E E E

Ratio of net interest 5.19% A 5.99% 5.76% 6.09% 6.68% 7.24%
income to average
net assets

Portfolio turnover rate 69% A 69% 48% 50% 62% 78%

</TABLE>

A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D EFFECTIVE SEPTEMBER 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 INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E 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 February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Municipal Income Fund (the fund) (formerly Spartan Municipal Income
Portfolio) is a fund of Fidelity Union Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which quotations are not readily
available through the pricing service are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes 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."
INTEREST INCOME. Interest income, which includes amortization of premium
and 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 interest 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 futures
and options transactions and market discount.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to .50% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $195,279,201 and $196,313,261, respectively.
The market value of futures contracts opened and closed during the period
amounted to $35,329,423 and $43,908,629, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% of the fund's average net
assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
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
$3,010 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse a portion of the fund's expenses. For the period,
the reimbursement reduced expenses by $59,880.
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
David Murphy, 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 *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
and
UMB Bank, n.a.
Kansas City, MO
(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S TAX-FREE BOND FUNDS
Aggressive Municipal
California Insured Municipal Income
California Municipal Income
High Yield Tax-Free
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Bond
New York Insured Municipal Income
New York Municipal Income
Ohio Municipal Income
Spartan Aggressive Municipal
(registered trademark)
Spartan Arizona Municipal Income
Spartan California Intermediate Municipal
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Intermediate Municipal
Spartan New York Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate Municipal
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

AGGRESSIVE MUNICIPAL
FUND
SEMIANNUAL REPORT
FEBRUARY 29, 1996
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 20 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 24 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Aggressive Municipal 5.42% 11.36% 20.97%

Lehman Brothers Municipal Bond Index 4.87% 11.05% n/a

High Yield Municipal Debt Funds Average 5.15% 10.18% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on April 29, 1993. 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 Municipal Bond Index, which reflects the performance of the
investment-grade municipal bond markets. To measure how the fund's
performance stacked up against its peers, you can compare it to the high
yield municipal debt funds average which reflects the performance of 44
funds with similar objectives tracked by Lipper Analytical Services over
the past six months. Both benchmarks include reinvested dividends and
capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Aggressive Municipal 11.36% 6.93%

Lehman Brothers Municipal Bond Index 11.05% n/a

High Yield Municipal Debt Funds Average 10.18% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Aggressive Municipal Fund on April 30, 1993, shortly after the fund
started. As the chart shows, by February 29, 1996, the value of your
investment with dividends reinvested would have grown to $12,084 - a 20.84%
increase on your initial investment. This assumes you still owned the fund
on February 29, 1996 and therefore does not include the effect of the $5
account closeout fee on an average sized account. For comparison, look at
how the Lehman Brothers Municipal Bond Index did over the same period. With
dividends reinvested, the same $10,000 would have grown to $11,947 - a
19.47% 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
SIX MONTHS APRIL 29, 1993
ENDED (COMMENCEMEN
FEBRUARY 29, YEARS ENDED AUGUST 31, T OF OPERATIONS)
1996 1995 1994 TO AUGUST 31,
1993

Dividend returns 2.91% 6.54% 5.84% 2.14%

Capital appreciation returns 2.51% 1.42% -5.24% 3.49%

Total returns 5.42% 7.96% 0.60% 5.63%

Dividends per share 4.43(cents) 28.47(cents) 58.42(cents)

Annualized dividend rate 5.43% 5.64% 5.85%

30-day annualized yield 5.43% - -

30-day annualized tax-equivalent 8.48% - -
yield

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.27 over
the past month, $10.13 over the past six months and $9.99 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all 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. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 36% tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Tanya Roy, Portfolio Manager of Spartan Aggressive
Municipal Fund
Q. HOW DID THE FUND PERFORM, TANYA?
A. The past six months have been a fairly strong period for the municipal
bond market and the fund's performance has reflected that. For the six- and
12-month periods ended February 29, 1996, the fund had total returns of
5.42% and 11.36%, respectively. Those returns outpaced the high yield
municipal debt funds average which returned 5.15% and 10.18%, respectively,
for the same six- and 12-month periods. Meanwhile, the Lehman Brothers
Municipal Bond Index returned 4.87% and 11.05% over the same six- and
12-month periods, respectively.
Q. WHAT FACTORS DROVE THE MUNICIPAL BOND MARKET'S PERFORMANCE?
A. Mainly falling interest rates. During the first half of the period,
interest rates drifted lower as investors became less fearful that the
economy was growing fast enough to stir up inflation. The Federal Reserve
made two quarter-point rate cuts during the period, one in December
followed by another in January, which helped to further cheer bond
investors. But in February, the bond markets experienced a slight pullback
as investors worried that some stronger-than-expected economic indicators
would prevent the Fed from lowering rates any further. However, municipal
bonds and Treasuries didn't always perform in tandem during the period.
Municipals lagged Treasuries in the first months of the period, stifled by
investors' worries about the flat tax proposal and its effect on the
attractiveness of municipal bonds. But in late January and early February,
those fears appeared to abate, and municipals outperformed Treasury bonds.
Q. TURNING TO THE FUND, WHAT ACCOUNTED FOR ITS FAVORABLE RESULTS?
A. Several individual situations helped the fund outpace its competitors.
As a sector, industrial development bonds, which are municipal revenue
bonds issued to help finance private sector concerns, did well during the
period. Many of our holdings in this sector were among the fund's best
performers, including airport bonds which are supported by the fees paid by
airlines. Delta Airlines bonds which were issued for the expansion of Delta
Airlines' facility at the Cincinnati/Northern Kentucky airport by Kenton
County, Kentucky had especially strong price performance during the period.
Delta enjoyed improving financial results due to increased passenger
traffic, higher fares and a more competitive cost structure.
Q. WHAT OTHER INDIVIDUAL HOLDINGS HELPED THE FUND?
A. Bonds issued by the Pennsylvania Convention Center appreciated when the
fund had them insured. Essentially, the insurance means that the bonds went
from carrying a credit rating of Baa, as rated by Moody's Investors
Service, Inc., to Aaa, reflecting the backing of the insurance guarantee.
Additionally, the bonds of HealthOne, a Denver hospital, enjoyed strong
gains when it announced a merger. The issuer subsequently offered to
exchange existing bonds for cash or new securities, a transaction known as
a tender offer.
Q. WHAT CHANGES HAVE YOU MADE SINCE TAKING OVER THE FUND IN OCTOBER?
A. In the fall, the yield curve (a graphical representation of the yields
on bonds with various maturities) was relatively flat. When the yield curve
is flat, there is very little difference between yields on short and long
maturity bonds. I targeted bonds with maturities in the 15-year range,
because in my view, those bonds offered the best risk/reward profile.
Q. NOT ONLY WERE YIELD SPREADS NARROW, BUT SO WERE CREDIT SPREADS. CAN YOU
EXPLAIN WHAT THAT MEANS AND HOW YOU REACTED TO THAT DEVELOPMENT?
A. The credit spread refers to the difference in yields between bonds of
various credit ratings. When credit spreads are narrow, as they have been
recently, there is very little difference in yield between bonds carrying
the lowest investment-grade rating of Baa and those with the highest credit
rating of Aaa. In response, I selectively sold some of the fund's Baa-rated
bonds, and replaced them with Aaa-rated securities for a minimal sacrifice
in yield.
Q. WHAT TYPES OF BAA-RATED BONDS DID YOU SELL?
A. I modestly reduced the fund's exposure to Baa-rated hospital holdings.
The reasons for that were two-fold. First, in doing so I was able to lock
in the price appreciation these securities had realized. Second, I was able
to appropriately manage the portfolio's overall exposure to the hospital
sector. This sector continues to experience volatility and our research
efforts are focused on holding only those hospitals which we expect to do
well in a more competitive, cost-driven environment.
Q. WHAT'S YOUR VIEW OF THE MUNICIPAL MARKET OVER THE NEXT SIX MONTHS?
A. Falling interest rates have been driving both the Treasury and municipal
bond markets' strong performance over the past year. From a total return
standpoint, it may be difficult for the municipal market to repeat the
performance it enjoyed in 1995, considering the relatively low current
level of interest rates. If that is the case, the total return on municipal
bonds will likely be derived more from income and less from capital
appreciation.
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: to provide a high
current income exempt from
federal taxes
START DATE: April 29, 1993
SIZE: as of February 29,
1996, more than $89 million
MANAGER: Tanya Roy, as of
October 1, 1995; manager,
Fidelity Aggressive Municipal
Fund, since October 1995;
Fidelity Advisor High Income
Municipal Fund, since
August 1995; Fidelity
Municipal Bond Fund, March
1995 to October 1995; joined
Fidelity in 1989
(checkmark)
TANYA ROY ON SUPPLY AND
DEMAND IN THE MUNICIPAL
MARKET:
"Supply and demand forces play
an influential role in the
municipal market. Supply
comes in two forms: new bond
sales, which add new debt to
the market, and refinancings
(also called refundings), in
which issuers typically replace
existing bonds with
lower-cost debt. The outlook
for refunding volume is highly
sensitive to interest rate
levels and, therefore, is difficult
to predict. The modest growth
in new debt sales we've seen
so far in 1996 reflects several
trends: tighter fiscal
management by municipal
governments; industry
consolidation, particularly
among hospitals and electric
utitilities; and heightened
sensitivity by taxpayers to
government costs. The
continuation of these trends
could mean a relatively small
increase in new issuance for
the remainder of the year,
although we could see brief
periods of concentrated
supply.
"Demand is derived from
individuals, mutual funds,
insurance companies, banks
and other sources, and ebbs
and flows depending on
circumstances. For example,
individual investor demand
generally diminishes when
interest rates are low, or when
other investments, such as
stocks, provide competitive
returns. Higher interest rates
or a correction in the stock
market could bring higher
demand for municipals.
However, the ongoing
discussion of tax reform -
which has caused some
investors to worry that
municipals could lose their
tax-free advantage - could
be an offsetting factor."

INVESTMENT CHANGES

TOP FIVE STATES AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

California 12.7 10.9

Michigan 9.2 11.4

New York 8.7 6.6

Pennsylvania 6.2 8.5

Massachusetts 6.0 1.7

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Industrial Development 17.8 18.5

General Obligations 16.6 7.5

Electric Revenue 15.9 12.7

Health Care 15.8 22.4

Special Tax 7.7 9.0

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 14.7 16.5

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL THE PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 7.2 6.8

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 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.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
11
Aaa 26.8%
Aa, A 20.3%
Baa 18.5%
Ba or B 10.3%
Non-rated 18.3%
Short-term
investments 5.8%
Aaa 20.0%
Aa, A 16.4%
Baa 21.9%
Ba or B 12.7%
Non-rated 22.1%
Short-term
investments 6.9%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 18.3
Row: 1, Col: 3, Value: 10.3
Row: 1, Col: 4, Value: 18.5
Row: 1, Col: 5, Value: 20.3
Row: 1, Col: 6, Value: 26.8
Row: 1, Col: 1, Value: 6.9
Row: 1, Col: 2, Value: 22.1
Row: 1, Col: 3, Value: 12.7
Row: 1, Col: 4, Value: 21.9
Row: 1, Col: 5, Value: 16.4
Row: 1, Col: 6, Value: 20.0
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNTED FOR 16.5% AND 20.0% OF THE FUND'S
INVESTMENTS ON FEBRUARY 29, 1996 AND AUGUST 31, 1995, RESPECTIVELY.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 94.2%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
ALABAMA - 0.6%
Mobile Wtr. & Swr. Commissioners Wtr. & Swr.
Rev. Rfdg. 6.50% 1/1/09 A $ 500,000 $ 543,125
ARIZONA - 0.6%
Arizona Trans. Board Excise Tax Rev. (Maricopa
County Regional Area Road-B Proj.) 6%
7/1/03, (AMBAC Insured) Aaa 500,000 545,625
ARKANSAS - 0.6%
Fayetteville Pub. Facs. Board. Rev. Rfdg.
(Butterfield Trail Village Proj.) Series A,
8.25% 9/1/00 - 530,000 539,540
CALIFORNIA - 11.7%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09,
(MBIA Insured) Aaa 770,000 789,250
California Pub. Works Board Lease Rev.
(Various California State Univ. Projs.)
Series B, 5.55% 6/6/10 A1 1,000,000 1,017,500
Foothill/Eastern Trans. Toll Rd. Rev. Sr. Lien
Series A, 6% 1/1/16 BBB- 1,250,000 1,229,688
La Quinta Redev. Agcy. Tax Allocation Rfdg.
(Redev. Proj. Area #1) 7.30% 9/1/12,
(MBIA Insured) Aaa 470,000 566,350
Madera County Ctfs. Prtn. (Valley Children's
Hospital) 6.25% 3/15/05, (MBIA Insured) Aaa 1,000,000 1,103,750
Riverside County Ctfs. of Prtn. (Air Force Village
West, Inc.) Series A, 8.125% 6/15/12 - 500,000 520,000
Sacramento Cogeneration Auth. Cogeneration
Proj. Rev. (Procter & Gamble Proj.)
6.50% 7/1/14 BBB- 500,000 513,750
Sacramento Pwr. Auth. Cogeneration
Proj. Rev. 6.50% 7/1/07 BBB- 1,000,000 1,055,000
Santa Clara County Fin. Auth. Lease Rev.
(VMC Replacement Proj.) Series A,
7.75% 11/15/08, (AMBAC Insured) Aaa 1,000,000 1,255,000
Santa Margarita/Dana Point Auth. Rev.
(Impt. Dists. 1-2-2A & 8) Series A,
7.25% 8/1/10, (MBIA Insured) Aaa 1,045,000 1,259,225
South Orange County Pub. Fin. Auth. Spl.
Tax Rev. (Foothill Area) Series C,
8% 8/15/08, (FGIC Insured) Aaa 500,000 631,875
Upland Ctfs. of Prtn. (San Antonio Commty.
Hosp.) 5.25% 1/1/08 A 500,000 479,375
10,420,763
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
COLORADO - 1.9%
Colorado Health Facs. Auth. Rev. (Rocky
Mountain Adventist) 6.625% 2/1/13 Baa $ 1,000,000 $ 1,025,000
Colorado Springs Arpt. Rev. (Cap. Appreciation)
Series C, 0% 1/1/06 BBB+ 250,000 140,625
Denver City & County Arpt. Rev. Series A (c):
6.60% 11/15/97 Baa 250,000 257,188
6.90% 11/15/98 Baa 250,000 262,188
1,685,001
CONNECTICUT - 2.2%
Connecticut Health & Ed. Facs. Auth. Rev. Rfdg.
(Quinnipiac College) Series D, 6% 7/1/13 BBB- 1,000,000 957,500
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin.
Prog.) Subseries B-1, 6.50% 5/15/18 Aa 200,000 205,000
Eastern Connecticut Resources Recovery Auth.
Solid Waste Rev. (Wheelabrator Lisbon Proj.)
Series A (c):
5.50% 1/1/14 A 500,000 458,750
5.50% 1/1/20 A 400,000 358,500
1,979,750
DISTRICT OF COLUMBIA - 2.6%
District of Columbia Redev. Land Agcy.
(Washington Sports Arena):
4.85% 11/01/97 Baa 1,000,000 1,002,500
5.625% 11/1/10 Baa 1,350,000 1,314,563
2,317,063
FLORIDA - 2.4%
Dade County Seaport Rfdg. 6.50% 10/1/08,
(MBIA Insured) Aaa 850,000 963,688
Martin County Ind. Dev. Auth. Rev. Rfdg.
(Indiantown Cogeneration L.P. Proj.)
8.05% 12/15/25 (c) Baa3 1,000,000 1,150,000
2,113,688
GEORGIA - 4.0%
Cobb County School Dist. Unltd. Tax
5% 2/1/97 Aa1 250,000 253,695
6% 2/1/02 Aa1 1,220,000 1,326,750
Georgia Muni. Elec. Pwr. Auth. Pwr. Rev. Rfdg.
Series Z, 5.50% 1/1/12 A 2,000,000 1,955,000
3,535,445
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
ILLINOIS - 2.1%
Chicago O'Hare Int'l. Arpt. Rev. Rfdg. (2nd Lien)
(Gen. Arpt. Proj.) Series A, 6.375% 1/1/15,
(MBIA Insured) Aaa $ 200,000 $ 211,500
Illinois Dev. Fin. Auth. Solid Wst. Disp. Rev.
(Ford Heights Waste Tire Proj.)
7.875% 4/1/11 (c) - 1,100,000 1,040,875
Metropolitan Pier & Expo Auth. Rfdg. (Cap.
Appreciation) (McCormick Place Expansion
Proj.) 0% 6/15/08, (MBIA Insured) Aaa 1,155,000 602,044
1,854,419
INDIANA - 4.2%
Fishers Econ. Dev. Rev. (1st Mtg. United Student
Funds, Inc.) 8.375% 9/1/14 - 1,500,000 1,575,000
Greensburg Ind. Econ. Dev. Rev. Rfdg.
(Kroger Co. Proj.) 7.25% 6/1/11 Ba2 1,000,000 1,077,500
Indiana Bond Bank Rev. (State Revolving Fund
Program) Series A, 7% 2/1/05 A 500,000 563,125
Indianapolis Arpt. Auth. Spl. Facs. Rev.
(United Airlines, Inc. Proj.) Series A,
6.50% 11/15/31 (c) Baa2 500,000 503,750
3,719,375
KENTUCKY - 5.5%
Kenton County Arpt. Board Arpt. Spl. Facs.
Rev. (Delta Airlines Proj.) Series A (c):
7.125% 2/1/21 Ba1 500,000 523,750
6.125% 2/1/22 Ba1 1,420,000 1,361,425
Kentucky Property & Bldg. Commission
5.50% 11/1/06 A 1,000,000 1,043,750
Owensboro Hosp. Rev. (Childrens Psychiatric
Hosp. Western Proj.) 13% 11/1/10 - 895,000 909,544
Winchester Ind. Bldg. Rev. Rfdg. (Kroger Co.)
7.75% 7/1/12 Ba2 1,000,000 1,090,000
4,928,469
LOUISIANA - 1.2%
Port New Orleans Ind. Dev. Rev. Rfdg.
(Continental Grain Co. Proj.) 7.50% 7/1/13 BB- 1,000,000 1,057,500
MARYLAND - 2.1%
Baltimore County Poll. Cont. Rev. Rfdg.
(Bethlehem Steel Proj.) Series B, 7.50% 6/1/15 - 500,000 524,375
Maryland Energy Fing. Administration Ltd.
Oblig. Solid Waste Disp. Facs. Recycling
Rev. (Hagerstown Fiber Ltd. Partners 94)
9% 10/15/16 - 300,000 307,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
MARYLAND - CONTINUED
Northeast Maryland Waste Disp. Auth. Solid
Waste Rev. (Montgomery County Resources
Recovery Proj.) Series A, 6.30% 7/1/16 (c) A $ 1,000,000 $ 1,033,750
1,865,625
MASSACHUSETTS - 6.0%
Massachusetts Gen. Oblig. 5.50% 7/1/15,
(AMBAC Insured) Aaa 2,200,000 2,200,000
Massachusetts Health & Edl. Facs. Auth. 1st Mtg.
Rev. (Fairview Extended Care) Series A,
10.25% 1/1/21 - 1,000,000 1,142,500
Massachusetts Ind. Fin. Agcy. Rev.:
(Massachusetts Biomedical Research)
Series A-1, 7.10% 8/1/99 A1 500,000 531,875
(Reeds Landing Proj.) 8.625% 10/1/23 - 500,000 527,500
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev.:
Series A, 5.45% 7/1/18, (AMBAC Insured) Aaa 500,000 478,125 Series D,
6% 7/1/06 A 500,000 530,000
5,410,000
MICHIGAN - 9.2%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25% 9/30/12 A 1,500,000 1,417,500
Flint Michigan Hosp. Bldg. Auth. Rev. Series A,
6% 7/1/06 Baa 500,000 486,875
Greater Detroit Resources Recovery Auth. Rev.
Series G, 9.25% 12/13/08 BBB- 1,000,000 1,032,500
Michigan Hosp. Fin. Auth. Rev. Rfdg.:
(Detroit-Macomb Hosp. Corp.) Series A:
7.30% 6/1/01 BB+ 750,000 751,875
7.40% 6/1/13 BB+ 500,000 495,000
(Pontiac Osteopathic Hosp.) 6% 2/1/24 Baa1 1,000,000 893,750
(Port Huron Hosp.) Series A, 7.625% 7/1/15 Aaa 1,000,000 1,033,930
Michigan Strategic Fund Ltd. Oblig. Rev.
(Great Lakes Pulp & Fiber Proj.)
10.25% 12/1/16 (c) - 1,000,000 1,025,000
Williamston Commty. School Dist. 6.25% 5/1/09,
(MBIA Insured) Aaa 1,000,000 1,100,000
8,236,430
MISSOURI - 0.6%
Kansas City Ind. Dev. Auth. Rev. (Kingswood
United Methodist Manor Proj.) Series 1993,
9% 11/15/13 - 500,000 541,875
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
NEVADA - 0.6%
Las Vegas Downtown Redev. Agcy. Tax Increment
Rev. (Sub. Lien Fremont St. Proj.) Series A,
6.10% 6/15/14 BBB+ $ 500,000 $ 496,250
NEW JERSEY - 3.9%
Camden County Impt. Auth. Lease Rev. (Dockside
Refrigerated - Holt Hauling & Warehousing):
9.625%, 1/1/11 - 500,000 510,625
9.875% 1/1/21 - 600,000 598,500
8.40% 4/1/24 - 700,000 698,250
New Jersey Econ. Dev. Rev. Rfdg.
(Holt Hauling & Warehousing)
8.60% 12/15/17 (c) - 500,000 518,125
New Jersey Trans. Trust Fund Auth.
Trans. Sys. Series A, 6.50% 6/15/05,
(AMBAC Insured) (Escrowed to Maturity) (d) Aaa 1,000,000 1,133,750
3,459,250
NEW MEXICO - 3.3%
Albuquerque Arpt. Rev. Rfdg. 6.50% 7/1/08,
(AMBAC Insured) (c)(e) Aaa 250,000 267,500
Albuquerque Retirement Facs. Rev. Rfdg.
(La Vida Liena Proj.) Series A, 8.85% 2/1/23 - 200,000 213,250
Farmington Poll. Cont. Rev. Rfdg. (Pub. Svc. Co.
of New Mexico San Juan Proj.):
Series A:
6% 3/1/08 Ba2 1,790,000 1,760,913 6.50% 9/1/09 Ba2 250,000
250,265 Series X, 5.90% 4/1/07 Ba2 500,000 490,000
2,981,928
NEW YORK - 8.7%
Metropolitan Trans. Auth. Svc. Contract Transit
Facs. Rev. Rfdg. Series 5, 6.90% 7/1/05 Baa1 1,000,000 1,081,250
New York City Gen. Oblig.:
5.70% 8/15/02 Baa1 500,000 506,945
Series B, 5.60% 8/15/06 Baa1 350,000 343,431
Series D, 6.50% 2/15/05 Baa1 500,000 527,500
New York City Ind. Dev. Agcy. Spl. Facs. Rev.
(Terminal One Group Assoc. Proj.)
6% 1/1/19 (c) A 1,000,000 1,002,500
New York State Dorm. Auth. Rev. Rfdg.
(State Univ. Edl. Facs.) Series A,
5.50% 5/15/05 Baa1 750,000 754,688
New York State Local Gov't. Assistance Corp.:
Rfdg. Series C, 5.50% 4/1/17 A 850,000 835,125
Series B, 6% 4/1/18 A 500,000 511,875
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York State Tollway Auth. Hwy. & Bridge
Series B:
5% 4/1/96 A $ 500,000 $ 500,340
5.125% 4/1/15, (MBIA Insured) Aaa 1,000,000 955,000
New York State Tollway Auth. Svc. Contract Rev.
(Local Hwy. & Bridge) 5.90% 4/1/07 Baa1 250,000 258,438
New York State Urban Dev. Corp. Rev.
5.25% 1/1/07 Baa1 500,000 480,000
7,757,092
NORTH CAROLINA - 2.3%
North Carolina Eastern Muni. Pwr. Agcy.
Pwr. Sys. Rev. Rfdg. Series C:
5.25% 1/1/04 A 1,000,000 992,500
7% 1/1/07 A 1,000,000 1,106,250
2,098,750
OHIO - 2.1%
Ohio Solid Waste Rev. (Republic Engineered
Steels Proj.) 8.25% 10/1/14 (c) - 1,000,000 945,000
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Rev.
(Wtr. Cont. Loan Fund) Wtr. Quality Series,
5.50% 6/1/15, (MBIA Insured) Aaa 1,000,000 981,250
1,926,250
OREGON - 0.6%
Portland Swr. Sys. Rev. Series A, 6.25% 6/1/15 A1 500,000 533,125
PENNSYLVANIA - 6.2%
Delaware County Auth. 1st Mtg. Rev.
(Riddle Village Proj.) 7% 6/1/00 - 600,000 608,250
Montgomery County Higher Ed. & Health Auth.
Hosp. Rev. (United Hosp. Proj.):
Series A, 8.375% 11/1/03 Ba1 135,000 145,800
Series B, 7.50% 11/1/15 Ba1 165,000 167,681
Pennsylvania Convention Ctr. Auth. Rev. Rfdg.
Series A, 6.70% 9/1/14, (MBIA Insured) Aaa 1,500,000 1,661,250
Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev.
(Graduate Health Sys. Proj.) Series A,
6.25% 7/1/13 Baa1 250,000 241,563
Philadelphia Ind. Dev. Auth. Dev. Rev.
(Long Term Care, Maplewood) 8% 1/1/24 - 500,000 525,000
Somerset County Hosp. Auth. Rev. (Health Care
1st. Mtg.-GF Somerset Care, Inc.)
8.40% 6/1/09 - 415,000 429,006
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Southern Pennsylvania Trans. Auth. Spl. Rev.
6.50% 3/1/05, (FGIC Insured) Aaa $ 1,000,000 $ 1,115,000
Warren County Ind. Dev. Auth. Specialized
Dev. Rev. Rfdg. (Beverly Enterprises, Inc.):
8.75% 11/1/06 - 125,000 136,563
9% 11/1/12 - 500,000 551,875
5,581,988
TENNESSEE - 0.6%
Memphis-Shelby County Arpt. Auth. Arpt.
Rev. Rfdg. Series B, 6.50% 2/15/09,
(MBIA Insured) (c) Aaa 500,000 547,500
TEXAS - 1.9%
East Texas Health Facs. Dev. Corp. Hosp. Rev.
(Memorial Hosp. Foundation Palestine, Inc.)
7.80% 8/15/18 - 850,000 750,125
El Paso Property Fin. Auth. Single Family Mtg.
Rev. Series A, 8.70% 12/1/18,
(GNMA Coll.) (c) Aaa 765,000 825,244
Harris County Cultural & Ed. Facs. Fin. Corp.
Rev. Rfdg. (Space Ctr. Houston Proj.):
Series A, 9.25% 8/15/23 - 85,000 83,938
Series B, 0% 8/15/23 (b) - 215,000 58,319
1,717,626
UTAH - 0.6%
Intermountain Pwr. Agcy. Pwr. Supply Sys. Rev.
Rfdg. Series B, 6% 7/1/16, (MBIA Insured) (e) Aaa 500,000 502,500
VIRGINIA - 1.2%
Loudoun County Ind. Dev. Auth. Residential
Care Facs. Rev. (Falcons Landing Proj.)
Series A, 8.75% 11/1/24 - 1,055,000 1,085,331
WASHINGTON - 4.7%
Washington Pub. Pwr. Supply Sys.
(Nuclear Proj. #2) Rev.:
Rfdg. Series A, 0% 7/1/11, (MBIA Insured) Aaa 1,350,000 575,438
5.55% 7/1/10, (FGIC Insured) Aaa 2,700,000 2,706,750
5.40% 7/1/12 Aa 1,000,000 965,000
4,247,188
TOTAL MUNICIPAL BONDS
(Cost $82,034,905) 84,228,471
MUNICIPAL NOTES (B) - 5.8%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
CALIFORNIA - 1.0%
Irvine California Ranch Wtr. Dist. Consolidated
Rfdg. (Impt. Dist. 103,105,109 Local Bank
of America) Series 93A, 3.55%, VRDN VMIG 1 $ 900,000 $ 900,000
DELAWARE - 0.5%
Delaware Econ. Dev. Auth. (Delmarva Pwr. &
Light Proj.) Series 1994, 3.60%, VRDN (c) VMIG 1 400,000 400,000
KENTUCKY - 0.5%
Daviess County Solid Wst. Disp. Facs. Rev.
(Scott Paper Co.) Series 93-B, 3.60%,
LOC ABN AMRO Bank, VRDN VMIG 1 400,000 400,000
LOUISIANA - 0.5%
Plaquemines Parish Environmental Rev.
(BP Exploration & Oil, Inc. Proj.) Series 1994,
3.60%, VRDN (c) P-1 500,000 500,000
SOUTH CAROLINA - 1.2%
Orangeburg County Solid Waste Disp. Fac. Rev.
(South Carolina Elec. & Gas Co. Local
Nationsbank) 3.55%, VRDN (c) VMIG 1 1,100,000 1,100,000
TEXAS - 1.2%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util. Elec. Co.) Series 1995 C,
3.55%, LOC Swiss Bank, VRDN (c) VMIG 1 400,000 400,000
Gulf Coast Waste Disp. Auth. (Amoco Oil
Co. Proj.) 3.55%, VRDN (c) VMIG 1 400,000 400,000
Harris County Ind. Dev. Corp. Poll. Cont. Rev.
(Exxon Proj.) Series 1987, 3.55%, VRDN (c) A-1+ 300,000 300,000
1,100,000
VIRGINIA - 0.9%
Southampton County Ind. Dev. Auth. Facs.
Rev. (Hadson Pwr. #11-Southampton Proj.)
Series 1990-A, 3.50%, LOC Credit Suisse,
VRDN (c) - 800,000 800,000
TOTAL MUNICIPAL NOTES
(Cost $5,200,000) 5,200,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $87,234,905) $ 89,428,471
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
3. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 43.5% AAA, AA, A 41.0%
Baa 12.4% BBB 18.9%
Ba 7.7% BB 8.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 18.3% FMR has
determined that unrated debt securities that are lower quality account for
16.5% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Industrial Development 17.8%
General Obligations 16.6
Electric Revenue 15.9
Health Care 15.8
Special Tax 7.7
Transportation 7.2
Resources Recovery 6.3
Others (individually less than 5%) 12.7
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $87,234,905. Net unrealized appreciation aggregated
$2,193,566, of which $2,777,903 related to appreciated investment
securities and $584,337 related to depreciated investment securities.
At August 31, 1995, the fund had a capital loss carryforward of
approximately $1,047,000 which will expire on August 31, 2003.
The fund intends to elect to defer to its fiscal year ending August 31,1996
approximately $1,229,000 of losses recognized during the period November 1,
1994 to August 31, 1995.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (cost $87,234,905) - $ 89,428,471
See accompanying schedule

Cash 277,182

Receivable for investments sold 139,196

Interest receivable 1,334,319

TOTAL ASSETS 91,179,168

LIABILITIES

Payable for investments purchased $ 651,578
Regular delivery

Delayed delivery 730,593

Distributions payable 113,684

Accrued management fee 42,041

TOTAL LIABILITIES 1,537,896

NET ASSETS $ 89,641,272

Net Assets consist of:

Paid in capital $ 89,187,260

Accumulated undistributed net realized gain (loss) (1,739,554)
on investments

Net unrealized appreciation (depreciation) on 2,193,566
investments

NET ASSETS, for 8,803,395 shares outstanding $ 89,641,272

NET ASSET VALUE, offering price and redemption price per $10.18
share ($89,641,272 (divided by) 8,803,395 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INTEREST INCOME $ 2,514,318

EXPENSES

Management fee $ 241,211

Non-interested trustees' compensation 142

Total expenses before reductions 241,353

Expense reductions (461) 240,892

NET INTEREST INCOME 2,273,426

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

Investment securities 627,593

Futures contracts (93,851) 533,742

Change in net unrealized appreciation (depreciation) on:

Investment securities 1,306,768

Futures contracts 66,431 1,373,199

NET GAIN (LOSS) 1,906,941

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 4,180,367
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED FEBRUARY AUGUST 31,
29, 1996 1995
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 2,273,426 $ 3,988,362
Net interest income

Net realized gain (loss) 533,742 (1,540,072)

Change in net unrealized appreciation (depreciation) 1,373,199 2,464,802

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,180,367 4,913,092
FROM OPERATIONS

Distributions to shareholders from net interest income (2,273,426) (3,988,362)

Share transactions 23,622,364 47,030,882
Net proceeds from sales of shares

Reinvestment of distributions 1,581,246 2,802,507

Cost of shares redeemed (12,051,005) (37,965,544)

Redemption fees 18,691 97,520

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 13,171,296 11,965,365
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 15,078,237 12,890,095

NET ASSETS

Beginning of period 74,563,035 61,672,940

End of period $ 89,641,272 $ 74,563,035

OTHER INFORMATION
Shares

Sold 2,328,877 4,907,461

Issued in reinvestment of distributions 155,720 291,017

Redeemed (1,192,054) (3,987,462)

Net increase (decrease) 1,292,543 1,211,016

</TABLE>

FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED AUGUST APRIL 29, 1993
ENDED FEBRUARY 31, (COMMENCEMENT
29, 1996 OF
OPERATIONS) TO
AUGUST 31,

(UNAUDITED) 1995 1994 D 1993

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

Net asset value, beginning of period $ 9.930 $ 9.790 $ 10.350 $ 10.000

Income from Investment Operations .285 .602 .603 .209
Net interest income

Net realized and unrealized .248 .125 (.564) .346
gain (loss)

Total from investment operations .533 .727 .039 .555

Less Distributions (.285) (.602) (.603) (.209)
From net interest income

From net realized gain - - (.010) -

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

Total distributions (.285) (.602) (.623) (.209)

Redemption fees added to paid .002 .015 .024 .004
in capital

Net asset value, end of period $ 10.180 $ 9.930 $ 9.790 $ 10.350

TOTAL RETURN B, C 5.43% 7.97% .61% 5.64%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 89,641 $ 74,563 $ 61,673 $ 17,267
(000 omitted)

Ratio of expenses to average .60% A .60% .60% .60% A
net assets

Ratio of net interest income to 5.65% A 6.24% 6.03% 6.24% A
average net assets

Portfolio turnover rate 34% A 51% 64% 53% A

</TABLE>

A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D EFFECTIVE SEPTEMBER 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Aggressive Municipal Fund (the fund) is a fund of Fidelity Union
Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which market quotations are not
readily available are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent
that it distributes 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."
INTEREST INCOME. Interest income, which includes amortization of premium
and 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 interest 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 futures
and options transactions, and losses deferred due to futures and options
and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). 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 gain
remaining at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to 1% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the
market value of the underlying securities or if the counterparty does not
perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $25,641,046 and $13,014,090, respectively.
The market value of futures contracts opened and closed during the period
amounted to $2,278,569 and $4,569,113, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .60% 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
$430 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse a portion of the fund's expenses. For the period,
the reimbursement reduced expenses by $461.
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(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

INTERMEDIATE MUNICIPAL INCOME
FUND
(FORMERLY SPARTAN INTERMEDIATE MUNICIPAL FUND)
SEMIANNUAL REPORT
FEBRUARY 29, 1996
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 20 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 24 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Intermediate Municipal Income 4.23% 9.94% 18.50%

Lehman Brothers 1-17 Year Municipal 4.08% 10.48% n/a
Bond Index

Intermediate Municipal Debt Funds 3.72% 8.97% n/a
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case six months, one year or since the fund
started on April 26, 1993. 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 1-17 Year Municipal Bond Index, which includes
investment-grade municipal bonds with maturities between one and 17 years.
To measure how the fund's performance stacked up against its peers, you can
compare it to the intermediate municipal debt funds average, which reflects
the performance of 134 funds with similar objectives tracked by Lipper
Analytical Services over the past six months. Both benchmarks include
reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Intermediate Municipal Income 9.94% 6.14%

Lehman Brothers 1-17 Year Municipal
Bond Index 10.48% n/a

Intermediate Municipal Debt Funds Average 8.97% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Intermediate Municipal Income Fund on April 30, 1993, shortly after the
fund started. As the chart shows, by February 29, 1996, the value of your
investment with dividends reinvested would have grown to $11,821 - an
18.21% increase on your initial investment. This assumes you still owned
the fund on February 29, 1996, and therefore does not include the effect of
the $5 account closeout fee on an average sized account. For comparison,
look at how the Lehman Brothers Municipal Bond Index, which reflects the
performance of the investment-grade municipal bond market, did over the
same period. With dividends reinvested, the same $10,000 would have grown
to $11,947 - a 19.47% 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 AUGUST 31, APRIL 26, 1993
SIX MONTHS (COMMENCEM
ENDED ENT OF
FEBRUARY 29, OPERATIONS) TO
AUGUST 31,

1996 1995 1994 1993

Dividend returns 2.45% 5.26% 4.99% 1.82%

Capital appreciation returns 1.78% 2.23% -4.48% 3.39%

Total returns 4.23% 7.49% 0.51% 5.21%

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

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.74(cents) 24.30(cents) 48.28(cents)

Annualized dividend rate 4.57% 4.78% 4.80%

30-day annualized yield 4.30% - -

30-day annualized tax-equivalent yield 6.72% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.31 over
the past month, $10.20 over the past six months and $10.06 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 36% federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Norman Lind, Portfolio Manager of Spartan Intermediate
Municipal Income Fund
Q. NORM, HOW DID THE FUND PERFORM?
A. For the six-month and 12-month periods ended February 29, 1996, the fund
had total returns of 4.23% and 9.94%, respectively. Those returns beat the
intermediate municipal debt funds average which returned 3.72% and 8.97%,
respectively, for the same periods, as tracked by Lipper Analytical
Services. The Lehman Brothers 1-17 Year Municipal Bond Index returned 4.08%
and 10.48%, respectively.
Q. MUNICIPAL BONDS PERFORMED FAIRLY WELL DURING THE PERIOD. WHAT WERE SOME
OF THE FACTORS DRIVING THAT PERFORMANCE?
A. Interest rates continued to decline throughout the period, which helped
all bonds. However, Treasuries outpaced municipals during the first half of
the period primarily because of investors' fears that various flat tax
proposals, if enacted, might hurt the tax-exempt status of municipals. But
in February, those fears seemed to abate somewhat and municipals
outperformed Treasuries.
Q. WHAT HELPED THE FUND COME OUT AHEAD OF ITS COMPETITORS?
A. In positioning the fund, I think about the Lehman Brothers 1-17 Year
Municipal Bond Index. For the first half of 1995 the fund was overweighted
- - meaning it had a higher concentration than the index - in bonds with
eight- to 11-year maturity dates. As the yield curve (a graphical
representation of yields that bonds of various maturities pay) steepened in
September and October, the fund's concentration in intermediate bonds
helped the fund's investments. Let me explain. There is a noticeable
difference between short-term and longer-term yields when the yield curve
is steep. As the yield curve steepened the yields for bonds with maturities
up to 12 years fell more quickly, and their prices rose more than
longer-term bond prices.
Q. IN LATE 1995, THE YIELD CURVE BEGAN TO FLATTEN. WHAT WAS YOUR RESPONSE?
A. As the yield curve flattened, there was less difference between
short-term and long-term rates. So in response to that flattening, I bought
more bonds in the shortest part of the yield curve.
Q. WERE THERE SPECIFIC BONDS THAT HELPED THE FUND'S PERFORMANCE?
A. Denver Airport bonds did quite well during the period. While the airport
had some well-publicized problems in 1994 and 1995, by the end of last year
things had turned around and the airport became financially successful. As
a result, the airport bonds qualified for becoming insured, a development
that helped the bonds appreciate.
Q. YOU SAW OPPORTUNITIES IN CALIFORNIA DURING THE PERIOD . . .
A. I did and I added a number of bonds issued by the state which performed
well. California is experiencing an economic turnaround. With economic
improvements, investors anticipated that tax revenues to the state would
increase and that helped these bonds appreciate.
Q. PREVIOUSLY, THE FUND HAD A LARGE POSITION IN TAX-EXEMPT STUDENT LOAN
BONDS. WHY HAVE YOU PARED THAT BACK RECENTLY?
A. Let me first explain how tax-exempt student loan bonds work. These
high-quality bonds often trade at yields higher than many other municipal
bonds because of their perceived prepayment risk. Investors fear the loans
backing these bonds will be paid off early and, therefore, force them to
reinvest at lower interest rates. As a result of their low prices, these
bonds had solid appreciation for most of the year, and were some of the
fund's best performers during the period. Many began to reach par (face)
value, where their upside potential is more limited. As they reached par,
I've been selling them because at that point, I believed the risks
outweighed any remaining rewards.
Q. WHAT SITUATIONS DIDN'T WORK OUT AS WELL AS YOU HAD HOPED?
A. Bonds issued by the Detroit, Michigan Convention Authority lagged the
market during the period and their performance was disappointing. Some
politicians suggested that the revenues dedicated to back these bonds be
used for other sources, including a new stadium.
Q. WHERE HAVE YOU FOUND OPPORTUNITIES RECENTLY?
A. I've recently bought some "forward" bonds. Municipal bond issuers, like
homeowners, like to refinance their debt during times when interest rates
are low. But on some occasions, an issuer is prohibited by law from
pre-refunding, or refinancing, its issues at a specific point in time. So
rather than using more traditional pre-refunding methods, they issue
forward bonds. Typically, when an investor buys a bond, it will settle -
meaning the trade is completed - within days of the purchase. But a forward
bond won't settle for several weeks to several months from the purchase
date. For investors, the advantage of these bonds is that issuers must
price them at very attractive yields, often higher than those of similar
bonds with comparable maturities, credit ratings and other factors. With
the help of Fidelity's research staff, I targeted bonds where projections
about their future value, given a set of variables, made them attractive.
Q. WHAT FACTORS DO YOU THINK WILL AFFECT THE MUNICIPAL BOND MARKET'S
PERFORMANCE OVER THE NEXT SIX MONTHS?
A. Obviously, interest rates will most likely be the primary factor that
will determine the performance of the municipal bond market. But there are
two other sets of developments I'll be watching. First, there are
developments in the political arena. While flat tax fears have abated
somewhat in recent months, they could re-emerge as the presidential
campaign continues. Second, the supply of municipal bonds - which I expect
to be slightly lower in 1996 than it was the previous year - might provide
some support for the market.
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: to provide high
current income exempt
from federal taxes
START DATE: April 26, 1993
SIZE: as of February 29,
1996, more than $235 million
MANAGER: Norm Lind, since
October 1, 1995; manager,
Fidelity New York Insured
Municipal Income Fund,
since 1994; Fidelity New
York Municipal Income Fund,
since 1993; Fidelity Advisor
Short-Intermediate Municipal
Income, Spartan New York
Municipal Income, Spartan
Short-Intermediate Municipal
Income, and Spartan New
York Intermediate Municipal
Income funds, since 1995;
joined Fidelity in 1986
(checkmark)
NORM LIND ON THE
ATTRACTIVENESS OF PREMIUM
COUPON BONDS:
"Premium coupon bonds are
bonds whose yields are
higher than newly issued
bonds. While they have a
number of attractive
investment characteristics in
various markets, I have
recently purchased them for
what is known as de minimus
protection. Let me explain.
Because of a change in the tax
code in 1993, gains on
municipal bonds may be
taxed as ordinary income -
rather than the 28% capital
gains rate - if they
depreciate beyond a
certain limit known as the "de
minimus price." Because they
carry higher prices, premium
coupon bonds are less likely
to depreciate below de
minimus, and as such, are
less likely to be taxed at
ordinary income. The higher
coupon of a premium bond
not only protects the bond
from falling below the de
minimus price level, but also
has proven historically to
lower volatility in a market
correction."
INVESTMENT CHANGES

TOP FIVE STATES AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Texas 17.8 13.1

California 11.3 9.3

Colorado 9.3 7.8

Alaska 5.3 5.6

New York 5.2 8.2

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

General Obligation 31.4 21.2

Education 15.3 18.2

Transportation 10.2 8.7

Special Tax 8.1 10.7

Industrial Development 6.8 6.3

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 7.7 8.4

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 FEBRUARY 29, 1996
6 MONTHS AGO

Years 6.2 5.9

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 10.1
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 19.1
Row: 1, Col: 5, Value: 30.0
Row: 1, Col: 6, Value: 37.3
Row: 1, Col: 1, Value: 9.0
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 2.5
Row: 1, Col: 4, Value: 26.2
Row: 1, Col: 5, Value: 32.0
Row: 1, Col: 6, Value: 30.0
Aaa, Aa, A 69.3%
Baa 19.1%
Caa 1.0%
Non-rated 0.5%
Short-term
investments 10.1%
Aaa, Aa, A 63.0%
Baa 26.2%
Caa 1.1%
Non-rated 0.6%
Short-term
investments 9.1%
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 89.9%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
ALASKA - 5.3%
North Slope Borough (Cap. Appreciation)
Series A:
0% 6/30/01 (MBIA Insured) Aaa $ 12,000,000 $ 9,420,000
0% 6/30/02 (MBIA Insured) Aaa 3,950,000 2,942,750
0% 6/30/03 (MBIA Insured) Aaa 1,500,000 1,059,375
13,422,125
ARIZONA - 3.5%
Arizona Trans. Board Excise Tax Rev.
(Maricopa County Regional Area
Road-B Proj.):
6% 7/1/03 (AMBAC Insured) Aaa 1,300,000 1,418,625
6.50% 7/1/04 (AMBAC Insured) Aaa 2,320,000 2,615,800
Maricopa County Commty. College Dist.
Series A, 6% 7/1/09 Aa 2,000,000 2,127,500
Phoenix Civic Impt. Corp. Excise Tax Rev. Rfdg.
Arpt. Impts. Series A, 5.85% 7/1/01 (d) Aa 2,420,000 2,583,350
8,745,275
ARKANSAS - 0.5%
Arkansas College Savings:
0% 6/1/02 Aa 705,000 528,750
0% 6/1/03 Aa 1,190,000 846,388
1,375,138
CALIFORNIA - 11.3%
California Edl. Facs. Auth. Rev. (Stanford Univ.)
Series J, 6% 11/1/05 Aaa 2,000,000 2,147,500
California Statewide Commty. Dev. Auth. Rev. Ctfs.
of Prtn. Insured Hosp. Rfdg. (Triad Healthcare)
5.90% 8/1/01 A 1,115,000 1,134,513
Carson Redev. Agcy. Rfdg. (Redev. Proj. Area 2)
(Tax Allocation):
5.40% 10/1/01 Baa 1,350,000 1,350,000
5.50% 10/1/02 Baa 1,320,000 1,321,650
5.60% 10/1/03 Baa 1,500,000 1,501,875
5.625% 10/1/04 Baa 1,085,000 1,080,931
Central Valley Fin. Auth. Cogeneration Proj. Rev.
(Carson Ice Gen. Proj.):
5.50% 7/1/01 BBB- 3,275,000 3,320,031
5.60% 7/1/02 BBB- 1,800,000 1,829,250
5.80% 7/1/04 BBB- 1,300,000 1,327,625
Clovis Unified School Dist. (Cap. Appreciation)
Series B, 0% 8/1/02 (MBIA Insured) Aaa 5,700,000 4,253,625
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Wastewtr. Sys. 6% 2/1/04
(FGIC Insured) Aaa $ 3,130,000 $ 3,423,438
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.):
5.70% 9/1/02 Caa 1,170,000 1,168,538
6% 9/1/05 Caa 1,335,000 1,328,325
Sacramento Pwr. Auth. Cogeneration Proj. Rev.
6.50% 7/1/05 BBB- 2,000,000 2,132,500
University of California Revs. Rfdg. (Hsg. Sys.)
Series A, 8% 11/1/00 (MBIA Insured) Aaa 1,000,000 1,155,000
28,474,801
COLORADO - 8.1%
Adams & Arapahoe County School Dist. No. 28J
5.75% 12/1/07 (FGIC Insured) Aaa 2,330,000 2,519,313
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist) 6.25% 2/1/04 Baa 2,000,000 2,065,000
Denver City & County Arpt. Rev. (d):
Series A:
8.25% 11/15/02 Baa 730,000 838,588
(Cap. Appreciation):
0% 11/15/04 Baa 2,070,000 1,283,400
0% 11/15/05 (MBIA Insured) Aaa 2,250,000 1,369,688
Series C:
5.35% 11/15/96 Baa 1,035,000 1,039,388
6.55% 11/15/03 Aaa 2,660,000 2,916,025
Series D (Cap. Appreciation):
0% 11/15/03 Baa 5,320,000 3,497,900
0% 11/15/05 (MBIA Insured) Aaa 2,055,000 1,250,981
0% 11/15/06 Baa 4,500,000 2,463,750
El Paso County School Dist. #20
6.15% 12/15/08 (MBIA Insured) Aaa 1,000,000 1,102,500
20,346,533
CONNECTICUT - 1.3%
Connecticut Health & Edl. Facs. Auth. Rev. Rfdg.
(Quinnipiac College) Series D:
4.90% 7/1/98 BBB- 2,250,000 2,244,375
5.625% 7/1/03 BBB- 1,100,000 1,104,125
3,348,500
DISTRICT OF COLUMBIA - 2.3%
District of Columbia Hosp. Rev. Rfdg.
(Medlantic Healthcare Group):
Series A, 5.50% 8/15/06 (MBIA Insured) Aaa 1,100,000 1,144,000
Series B, 6.125% 8/15/99 Baa1 4,520,000 4,627,350
5,771,350
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - 2.6%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A $ 680,000 $ 755,650
Dade County Aviation Rev. Rfdg. Series E,
6% 10/1/09 (AMBAC Insured) Aaa 500,000 543,750
Florida Board Ed. Cap. Outlay Rfdg. (Pub. Ed.)
Series D, 5% 6/1/14 Aa 2,000,000 1,885,000
Hillsborough County Port. Dist. Spl. Rev. Rfdg.
(Tampa Port. Auth.) 6.50% 6/1/02
(FSA Insured) (d) Aaa 2,000,000 2,197,500
Lakeland Elec. & Wtr. Rev. Rfdg. (Jr. Sub. Lien)
6.50% 10/1/06 (FGIC Insured) (b) Aaa 1,000,000 1,111,250
6,493,150
ILLINOIS - 1.7%
Chicago Gen. Oblig. Rfdg. Series A-2,
5.50% 1/1/04 (AMBAC Insured) (b) Aaa 4,000,000 4,190,000
INDIANA - 1.8%
Indianapolis Resource Recovery Rev. Rfdg.
(Ogden Martin Sys. Inc. Proj.):
6.75% 12/1/04 (AMBAC Insured) (b) Aaa 1,325,000 1,482,344
6.75% 12/1/05 (AMBAC Insured) (b) Aaa 2,675,000 2,999,344
4,481,688
IOWA - 2.1%
Iowa Fin. Auth. Rev. (Iowa Revolving Fund)
5.05% 5/1/08 A 700,000 706,125
Iowa Student Loan Liquidity Corp. Student Loan
Rev. Rfdg. Sr. Series B, 5.75% 12/1/07 (d) Aaa 4,500,000 4,556,250
5,262,375
KENTUCKY - 0.9%
Kentucky Tpk. Auth. Economic Dev. Rd. Rev. Rfdg.
(Revitalization Proj.) 6.50% 7/1/07
(AMBAC Insured) Aaa 2,000,000 2,275,000
MARYLAND - 2.1%
Maryland State & Local Facs. Loan 3rd Series
Unltd. Tax Series JJ, 5.50% 10/15/04 Aaa 1,750,000 1,870,313
Northeast Maryland Waste Disp. Auth.
Solid Waste Rev. (Montgomery County
Resource Recovery Proj.) Series A,
5.80% 7/1/04 (d) A 3,375,000 3,569,063
5,439,376
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
MASSACHUSETTS - 2.2%
Massachusetts Ind. Fin. Agcy. Museum Rev. Rfdg.
(Museum of Fine Arts) 5.375% 1/1/07
(MBIA Insured) Aaa $ 1,120,000 $ 1,169,000
Massachusetts Tpk. Auth. Series A, 5% 6/1/99 A1 2,125,000 2,196,273
Massachusetts Wtr. Resources Auth. Series A,
7.625% 4/1/14 (Pre-Refunded to
4/1/00 @ 102) (e) Aaa 2,000,000 2,287,500
5,652,773
MICHIGAN - 3.5%
Detroit Convention Facs. Rev. Rfdg. (Cobo
Hall Expansion Proj.) 5.125% 9/30/05 A 5,830,000 5,830,000
Rankin County School Dist. Unltd. Tax:
7.75% 2/1/02 (MBIA Insured) Aaa 1,280,000 1,505,600
7.75% 2/1/03 (MBIA Insured) Aaa 1,370,000 1,638,863
8,974,463
MINNESOTA - 0.3%
Minneapolis Gen. Oblig. Unltd. Tax
(Cap. Appreciation) Series B:
0% 12/1/03 Aaa 300,000 208,125
0% 12/1/04 Aaa 440,000 288,750
0% 12/1/05 Aaa 495,000 306,281
803,156
NEW HAMPSHIRE - 1.6%
New Hampshire Higher Edl. & Health Facs. Auth.
Rev. (Frisbee Mem. Hosp.) 5.70% 10/1/04 Baa 4,145,000 4,041,375
NEW JERSEY - 0.4%
Union County Impt. Auth. Rev. Rfdg. (Correctional
Fac.) (Cap. Appreciation) 0% 6/15/07 Aaa 1,900,000 1,066,375
NEW MEXICO - 3.6%
Albuquerque Arpt. Rev. Rfdg. 6.50% 7/1/07
(AMBAC Insured) (b) Aaa 1,400,000 1,498,000
New Mexico Edl. Assistance Foundation
Student Loan Rev. Sr. Series IV A-1,
7.05% 3/1/10 (d) Aaa 5,375,000 5,751,250
Rio Rancho Wtr. & Wastewtr. Sys. Rev. Series A,
8% 5/15/04 (FSA Insured) Aaa 1,420,000 1,728,850
8,978,100
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
NEW YORK - 5.2%
New York State Ctfs. of Prtn. 6.70% 9/1/97 Baa1 $ 1,800,000 $ 1,863,000
New York State Dorm. Auth. Rev.
(City Univ. Sys.) Series B, 5.75% 7/1/06 Baa1 1,080,000 1,108,350
New York State Energy Research & Dev.
Auth. Poll. Cont. Rev. Rfdg. (New York
State Elec. & Gas Corp.) Series E,
5.90% 12/1/06 (MBIA Insured) Aaa 4,000,000 4,375,000
New York State Local Gov't. Assistance Corp.
Series B, 7.50% 4/1/20
(Escrowed to Maturity) (e) Aaa 1,000,000 1,158,270
New York State Urban Dev. Corp. Rev. Rfdg.
(Correctional Cap. Facs.) Series A,
6.40% 1/1/04 Baa1 1,785,000 1,907,711
Triborough Bridge & Tunnel Auth. Rev. Rfdg.
(Gen. Purp.) Series Y, 5.50% 1/1/03 Aa 2,500,000 2,631,250
13,043,581
OHIO - 2.2%
Cuyahoga County Rfdg. Series B
5% 10/1/07 (MBIA Insured) Aaa 1,900,000 1,916,625
Franklin County Rev. (Online Computer Library
Ctr. Inc. Proj.):
4.80% 4/15/97 - 500,000 503,125
5% 4/15/98 - 560,000 568,400
5.65% 4/15/01 - 340,000 354,025
Ohio Bldg. Auth. Facs. (Admin. Bldg. Fund Proj.)
Series A, 6.30% 10/1/11 A1 2,000,000 2,147,500
Ohio Econ. Dev. Commission Rev. (Globe Industries
Proj.) Series 1, 7.75% 6/1/96 (d) A- 80,000 80,511
5,570,186
OKLAHOMA - 0.5%
Tulsa Arpt. Impt. Trust Gen. Rev. (Tulsa Intl. Arpt.)
7.70% 6/1/13 (MBIA Insured)
(Pre-Refunded to 6/1/02 @ 100) (d)(e) Aaa 1,000,000 1,168,750
PENNSYLVANIA - 2.4%
Allegheny County Ind. Dev. Auth. Rev. Rfdg.
(Environmental Impt. USX-Marathon Corp.)
Series B, 5.30% 12/1/96 Baa3 4,010,000 4,028,165
Philadelphia Hosp. & Higher Edl. Facs. Auth.
Hosp. Rev. (Temple Univ. Hosp.) Series A,
5.60% 11/15/97 Baa1 2,100,000 2,131,500
6,159,665
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
SOUTH CAROLINA - 1.7%
South Carolina Ed. Assistance Auth. Rev. Rfdg.
(Guaranteed Student Loan) (Sub. lien)
Series B, 5.70% 9/1/05 (d) A $ 2,000,000 $ 2,047,500
South Carolina Pub. Svc. Auth. Rev. Rfdg.
Series A, 6.25% 1/1/05 (MBIA Insured) (b) Aaa 2,000,000 2,187,500
4,235,000
SOUTH DAKOTA - 2.0%
South Dakota Student Loan Fin. Corp. Student
Loan Rev. Series A, 6.15% 8/1/03 A+ 5,000,000 5,056,250
TENNESSEE - 0.8%
Memphis-Shelby County Arpt. Auth. Arpt. Rev.
Rfdg. Series B, 6.50% 2/15/09 (MBIA Insured) Aaa 1,750,000 1,916,250
TEXAS - 14.4%
Alief Independent School Dist. Unltd. Tax:
7% 2/15/03 (PSF Guaranteed) Aaa 1,125,000 1,286,719
7% 2/15/04 (PSF Guaranteed) Aaa 1,125,000 1,297,969
7% 2/15/05 (PSF Guaranteed) Aaa 1,125,000 1,307,813
Arlington Independent School Dist. Rfdg. &
Impt. Unltd. Tax:
6.50% 2/15/02 (PSF Guaranteed) Aaa 1,000,000 1,103,750
6.50% 2/15/03 (PSF Guaranteed) Aaa 1,500,000 1,668,750
6.50% 2/15/05 (PSF Guaranteed) Aaa 1,500,000 1,687,500
Brazos Higher Ed. Auth. Student Loan Rev.
Rfdg. Series C-1 (d):
5.60% 6/1/03 Aaa 6,750,000 6,927,188
5.70% 6/1/04 Aaa 2,500,000 2,565,625
Brazosport Independent School Dist. Unltd. Tax
(School House):
5.30% 2/15/12 (PSF Guaranteed) Aaa 1,215,000 1,192,219
5.40% 2/15/13 (PSF Guaranteed) Aaa 1,290,000 1,272,263
Central Texas Higher Ed. Auth. Student Loan
Rev. Rfdg. Sr. Series A, 5.10% 12/1/03 (d) Aaa 3,000,000 2,981,250
Corpus Christi Util. Sys. Rev. 5.20% 7/15/14
(MBIA Insured) Aaa 1,115,000 1,067,613
Dallas Independent School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation) 0% 8/15/07
(PSF Guaranteed) Aaa 500,000 278,125
Keller Independent School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation) Series A, 0% 8/15/12
(PSF Guaranteed) Aaa 1,590,000 634,013
Lower Colorado River Auth. Rev. Rfdg. (Cap.
Appreciation) 0% 1/1/09 (MBIA Insured)
(Escrowed to Maturity) (e) Aaa 615,000 319,800
Midlothian Independent School Dist. Unltd. Tax
Rfdg. (Cap. Appreciation) 0% 2/15/06
(PSF Guaranteed) Aaa 1,905,000 1,159,669
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Northside Independent School Dist. Rfdg.
Untld. Tax (Cap. Appreciation):
0% 2/15/02 (PSF Guaranteed) Aaa $ 1,000,000 $ 761,250
0% 2/15/03 (PSF Guaranteed) Aaa 1,230,000 888,675
Round Rock Independent School Dist. Unltd. Tax:
6.50% 8/1/04 (PSF Guaranteed) Aaa 1,025,000 1,153,125
6.50% 8/1/05 (PSF Guaranteed) Aaa 1,075,000 1,213,406
6.50% 8/1/06 (PSF Guaranteed) Aaa 1,150,000 1,300,938
Socorro Independent School Dist. Rfdg. Unltd.
Tax (Cap. Appreciation) 0% 9/1/04
(PSF Guaranteed) Aaa 3,000,000 2,002,500
Texas A&M Univ. Permanent Univ. Fund
5.40% 7/1/03 (b) Aaa 1,255,000 1,305,200
Texas Muni. Pwr. Agcy. Rev. Rfdg. 9% 9/1/97
(Escrowed to Maturity) (e) A1 500,000 538,125
Ysleta Independent School Dist. Rfdg.
Unltd. Tax (Cap. Appreciation) 0% 8/15/11
(PSF Guaranteed) Aaa 1,100,000 475,750
36,389,235
UTAH - 0.9%
Intermountain Pwr. Agcy. Pwr. Supply Sys. Rev.
Rfdg. Unltd. Tax Series B, 6.25% 7/1/03
(MBIA Insured) (b) Aaa 2,000,000 2,195,000
VIRGINIA - 1.0%
Fairfax County Econ. Dev. Auth. Resource Recovery
Rev. (Ogden Martin Sys. Proj.) Series A,
7.75% 2/1/11 (d) A1 2,295,000 2,513,025
WASHINGTON - 3.7%
Port Longview Ind. Dev. Corp. Solid Waste
Disp. Rev. (Weyerhaeuser Co. Proj.)
6.875% 10/1/08 (d) A2 1,650,000 1,831,500
Washington Gen. Oblig.:
Series C, 6.50% 7/1/03 Aa 1,000,000 1,123,750
Series 96-A, 6.75% 7/1/04 Aa 1,555,000 1,786,306
Series R 96-B, 5.50% 7/1/02 Aa 1,475,000 1,563,500
Washington State Pub. Pwr. Supply Sys.
Rev. Rfdg. (Nuclear #3) Series B:
(Cap. Appreciation) 0% 7/1/07 Aa 4,000,000 2,115,000
0% 7/1/10 Aa 2,250,000 964,688
9,384,744
TOTAL MUNICIPAL BONDS
(Cost $221,634,184) 226,773,239
MUNICIPAL NOTES (C) - 10.1%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
COLORADO - 1.2%
Colorado Gen Oblig. TRAN 4.50% 6/27/96 SP-1+ $ 3,000,000 $ 3,010,440
DELAWARE - 0.6%
Delaware Econ. Dev. Auth. Rev. Board
(Delmarva Pwr. & Light Proj.):
Series 87, 3.60% VRDN (d) VMIG 1 400,000 400,000
Series 1994, 3.60% VRDN (d) VMIG 1 1,000,000 1,000,000
1,400,000
MARYLAND - 0.3%
Baltimore County Econ. Dev. Rev. Rfdg.
(Blue Circle, Inc. Proj.) Series 1992, 3.35%,
LOC Den Danske Bank Group, VRDN VMIG 1 700,000 700,000
TEXAS - 3.4%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util Elec. Co.) Series 1995 C, 3.55%,
LOC Swiss Bank, VRDN (d) VMIG 1 2,700,000 2,700,000
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) Series 1993, 3.60%,
VRDN (d) P-1 1,200,000 1,200,000
Gulf Coast Waste Disp. Auth. (Amoco Oil Co.
Proj.) 3.55%, VRDN (d) VMIG 1 700,000 700,000
Texas Gen. Oblig. TRAN Series 1995 A,
4.75% 8/30/96 MIG 1 4,000,000 4,029,240
8,629,240
VIRGINIA - 1.3%
Richmond Ind. Dev. Auth. Rev. (Cogentrix
Richmond, Inc. Proj.):
Series 1990 A, 3.55%, LOC
Banque Paribas VRDN (d) - 3,000,000 3,000,000
Series 1991 B, 3.55%, LOC
Banque Paribas VRDN (d) - 300,000 300,000
3,300,000
WEST VIRGINIA - 2.9%
Marion County Commission Solid Waste Disp.
(Grant Town Cogeneration Proj.) Series 1990-D,
3.40%, LOC Nat'l. Westminster Bank, VRDN (d) VMIG 1 2,000,000 2,000,000
West Virginia Pub. Energy Auth. Rev. Bonds
(Morgantown Energy Assoc.) 3.40% tender
3/20/96, LOC Swiss Bank (d) A-1+ 5,400,000 5,400,594
7,400,594
WISCONSIN - 0.4%
Wisconsin Gen. Oblig. TRAN Series 1995
4.50% 6/17/96 MIG 1 1,000,000 1,003,380
TOTAL MUNICIPAL NOTES
(Cost $25,423,825) $ 25,443,654
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $247,058,009) $ 252,216,893
SECURITY TYPE ABBREVIATIONS
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
3. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
4. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
5. Security collateralized by an amount sufficient to pay interest and
principal.
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 63.4% AAA, AA, A 57.9%
Baa 14.3% BBB 16.0%
Ba 0.0% BB 1.6%
B 0.0% B 0.0%
Caa 1.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 0.5%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 31.4%
Education 15.3
Transportation 10.2
Special Tax 8.1
Industrial Development 6.8
Health Care 5.6
Electric Revenue 5.5
Resources Recovery 5.3
Others (individually less than 5%) 11.8
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $247,058,009. Net unrealized appre- ciation
aggregated $5,158,884, of which $5,701,292 related to appreciated invest-
ment securities and $542,408 related to depreciated investment securities.
At August 31, 1995, the fund had a capital loss carryforward of
approximately $3,556,000 which will expire on August 31, 2003.
The fund intends to elect to defer to its fiscal year ending August 31,
1996 approximately $6,839,000 of losses recognized during the period
November 1, 1994 to August 31, 1995.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

ASSETS

Investment in securities, at value (cost $247,058,009) - $ 252,216,893
See accompanying schedule

Cash 230

Receivable for investments sold 4,747,442

Interest receivable 2,521,965

TOTAL ASSETS 259,486,530

LIABILITIES

Payable for investments purchased $ 6,629,033
Regular delivery

Delayed delivery 16,295,512

Payable for fund shares redeemed 674,400

Distributions payable 309,949

Accrued management fee 102,547

TOTAL LIABILITIES 24,011,441

NET ASSETS $ 235,475,089

Net Assets consist of:

Paid in capital $ 239,467,650

Accumulated undistributed net realized gain (loss) on (9,151,445)
investments

Net unrealized appreciation (depreciation) on 5,158,884
investments

NET ASSETS, for 22,998,628 shares outstanding $ 235,475,089

NET ASSET VALUE, offering price and redemption price per $10.24
share ($235,475,089 (divided by) 22,998,628 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

INTEREST INCOME $ 5,982,034

EXPENSES

Management fee $ 613,565

Non-interested trustees' compensation 193

Total expenses before reductions 613,758

Expense reductions (106,892) 506,866

NET INTEREST INCOME 5,475,168

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

Investment securities 1,438,347

Futures contracts (4,738) 1,433,609

Change in net unrealized appreciation (depreciation) on 2,345,444
investment securities

NET GAIN (LOSS) 3,779,053

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 9,254,221
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED FEBRUARY AUGUST 31,
29,1996 1995
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 5,475,168 $ 11,135,487
Net interest income

Net realized gain (loss) 1,433,609 (7,868,059)

Change in net unrealized appreciation (depreciation) 2,345,444 11,579,094

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 9,254,221 14,846,522
FROM OPERATIONS

Distributions to shareholders from net interest income (5,475,168) (11,135,487)

Share transactions 83,254,086 180,517,302
Net proceeds from sales of shares

Reinvestment of distributions 4,210,797 8,836,264

Cost of shares redeemed (75,480,259) (229,621,967)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,984,624 (40,268,401)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 15,763,677 (36,557,366)

NET ASSETS

Beginning of period 219,711,412 256,268,778

End of period $ 235,475,089 $ 219,711,412

OTHER INFORMATION
Shares

Sold 8,163,096 18,707,976

Issued in reinvestment of distributions 411,955 909,637

Redeemed (7,414,629) (23,828,782)

Net increase (decrease) 1,160,422 (4,211,169)

</TABLE>

FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED AUGUST 31, APRIL 26, 1993
FEBRUARY 29, 1996 (COMMENCEM
ENT OF
OPERATIONS) TO
AUGUST 31,

(UNAUDITED) 1995 1994 D 1993

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

Net asset value, $ 10.060 $ 9.840 $ 10.340 $ 10.000
beginning of period

Income from Investment .243 .490 .514 .177
Operations
Net interest income

Net realized and unrealized .180 .220 (.460) .340
gain (loss)

Total from investment .423 .710 .054 .517
operations

Less Distributions (.243) (.490) (.514) (.177)
From net interest income

From net realized gain - - (.010) -

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

Total distributions (.243) (.490) (.554) (.177)

Net asset value, end of period $ 10.240 $ 10.060 $ 9.840 $ 10.340

TOTAL RETURN B, C 4.23% 7.50% .52% 5.22%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 235,475 $ 219,711 $ 256,269 $ 219,400
(000 omitted)

Ratio of expenses to average .45% A, .42% .20% - E
net assets E E E

Ratio of net interest income to 4.91% A 5.04% 5.09% 5.20%
average net assets A

Portfolio turnover rate 73% A 44% 69% 95%
A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 TO FINANCIAL STATEMENTS).
D EFFECTIVE SEPTEMBER 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.
E FMR VOLUNTARILY 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 February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Intermediate Municipal Income Fund (formerly Spartan Intermediate
Municipal Fund)(the fund) is a fund of Fidelity Union Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which quotations are not readily
available through the pricing service are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is
not subject to income taxes to the extent that it distributes 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."
INTEREST INCOME. Interest income, which includes amortization of premium
and 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 interest 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 futures
and options transactions, capital loss carryforwards and losses deferred
due to futures and options and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTION TO SHAREHOLDERS - CONTINUED
in a subsequent period. Any taxable 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.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and
buying calls tend to increase the fund's exposure to the underlying
instrument. Selling futures, buying puts, and writing calls tend to
decrease the fund's exposure to the underlying instrument, or hedge other
fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $92,735,902 and $80,622,187, respectively.
The market value of futures contracts opened and closed during the period
amounted to $2,266,431 and $2,261,693, 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.
4. FEES AND OTHER TRANSACTIONS WITHAFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
FMR receives a fee that is computed daily at an annual rate of .55% 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
$1,764 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During the
period, this expense limitation ranged from .45% to .55% of average net
assets and the reimbursement reduced expenses by $106,892. Effective
February 1, 1996, the fund's expense limitation was eliminated.
TO CALL FIDELITY

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* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Norman Lind, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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UMB Bank, n.a.
Kansas City, MO
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(registered trademark)
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FIDELITY'S TAX-FREE BOND FUNDS
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THE FIDELITY TELEPHONE CONNECTION
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SPARTAN

(registered trademark)
(registered trademark)
MARYLAND
MUNICIPAL INCOME
FUND
SEMIANNUAL REPORT
FEBRUARY 29, 1996
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
and one year.

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

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

NOTES 19 Notes to the financial statements.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT 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.
PRESIDENT'S MESSAGE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value), and the effect of the $5 account
closeout fee on an average size account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns, dividends, and yields
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Spartan Maryland Municipal Income Fund 4.89% 11.03% 17.83%

Lehman Brothers Maryland 4 Plus Year
Municipal Bond Index 4.53% 11.79% n/a

Maryland Municipal Debt Funds Average 4.73% 9.68% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 22, 1993. 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 Maryland 4 Plus Year Municipal Bond Index, which includes
Maryland investment-grade municipal bonds with maturities of four years or
greater. To measure how the fund's performance stacked up against its
peers, you can compare it to the Maryland municipal debt funds average,
which reflects the performance of 32 Maryland municipal bond funds with
similar objectives tracked by Lipper Analytical Services over the past six
months. Both benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Maryland Municipal Income Fund 11.03% 5.91%

Lehman Brothers Maryland 4 Plus Year
Municipal Bond Index 11.79% n/a

Maryland Municipal Debt Funds Average 9.68% n/a

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Maryland Municipal Income Fund on April 30, 1993, shortly after the fund
started. As the chart shows, by February 29, 1996, the value of your
investment would have grown to $11,794 - a 17.94% increase on your initial
investment. This assumes you still own the fund on February 29, 1996 and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond Index, which
reflects the performance of the investment-grade municipal bond market, did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $11,947 - a 19.47% 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
APRIL 22, 1993
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
FEBRUARY 29, YEARS ENDED AUGUST 31, AUGUST 31,

1996 1995 1994 1993

Dividend return 2.57% 5.99% 5.22% 1.99%

Capital appreciation
return 2.32% 2.06% -6.70% 3.48%

Total return 4.89% 8.05% -1.48% 5.47%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.83(cents) 24.97(cents) 51.18(cents)

Annualized dividend rate 4.74% 4.99% 5.18%

30-day annualized yield 4.58% - -

30-day annualized tax-equivalent yield 7.78% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.17 over
the past month, $10.03 over the past six months and $9.87 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 41.12% combined effective 1996 federal and state income tax bracket
but does not reflect payment of the federal alternative minimum tax, if
applicable. If the adviser had not reimbursed certain portfolio expenses
during the period shown, the yield and tax-equivalent yield would have been
4.43% and 7.52%, respectively.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Steven Harvey, Portfolio Manager of Spartan Maryland
Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, STEVE?
A. For the six- and 12-month periods ended February 29, 1996, the fund had
total returns of 4.89% and 11.03%, respectively. Those returns beat the
Maryland municipal debt funds average, which returned 4.73% and 9.68% for
the same periods, as tracked by Lipper Analytical Services. The Lehman
Brothers Maryland 4 Plus Year Municipal Bond Index returned 4.53% and
11.79%.
Q. HOW WOULD YOU CHARACTERIZE THE INVESTMENT ENVIRONMENT FOR MUNICIPALS
OVER THE PAST SIX MONTHS?
A. In a word, mixed. By the fourth quarter of 1995, municipal bonds had
reached relatively cheap levels compared to Treasuries, primarily because
investors were worried that various federal tax reform proposals might
negatively impact munis' tax-exempt status. But in the fourth quarter, muni
prices firmed, driven by strengthening demand as fears about tax reform
abated somewhat. What's more, the municipal bond market benefited from
stronger demand from insurance companies and other institutional investors.
At the same time, the supply of newly issued bonds slowed. Rising demand
and lower supply proved to be a positive for municipal bond prices. The
municipal bond market's performance was quite strong through the end of
January. But in February, conflicting signals about the economy's strength,
the start of the Republican presidential primaries and the ongoing gridlock
surrounding the federal budget debate caused both municipals and Treasuries
to experience a pullback. The lack of convincing data on the economy,
combined with political uncertainties, led to a downturn in the bond
markets during February.
Q. WHAT WERE SOME OF THE FACTORS THAT HELPED THE FUND'S PERFORMANCE?
A. The fund had a relatively large weighting in intermediate maturity
bonds, or those with maturities between five and 15 years. At the outset of
the period, the yield curve (a graphical representation of the yields
offered by bonds with various maturities) was flat, especially when you
looked at it from a historical perspective. In other words, bonds with long
maturities didn't really offer much of an incentive in the form of
additional income to compensate for their increased sensitivity to changes
in interest rates. Intermediate bonds did quite well during much of the
period and helped the fund's performance. Another important factor in the
fund's better-than-average performance was that it had roughly a third of
its investments in non-callable bonds, which can't be redeemed by their
issuers prior to maturity. As the municipal bond market rallied,
non-callables did quite well.
Q. WERE THERE OTHER FACTORS WHICH HELPED PERFORMANCE?
A. The fund's relatively high exposure to local general obligation bonds
(GOs) was another plus. GOs are backed by the full faith and credit (which
includes the taxing and future borrowing power) of a municipality. There
was healthy investor demand for local general obligation bonds issued by
Maryland municipalities. After the volatility we saw in the municipal bond
market in 1994, it appeared that investors were favoring high-quality,
easy-to-understand issues such as GOs. Maryland has a wealth of very
high-quality bonds, including those issued by Baltimore, Montgomery and
Howard counties.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Greater Southeast Health Care, a health care system with hospitals in
both Maryland and the District of Columbia, was disappointing. The
District's ongoing financial problems began to take their toll on the
system's bottom line. As a result, I sold these bonds late in the period.
Q. THE FUND HAS A SIGNIFICANT STAKE IN HOUSING BONDS. WHAT MAKES THEM
ATTRACTIVE?
A. Because there is a possibility that the loans backing these bonds will
be paid off prior to their maturity, they carry what's known as "prepayment
risk." To compensate for that risk, housing bonds tend to offer higher
levels of income compared to bonds with similar maturities, credit ratings
and other factors. In my view, that higher level of yield over comparable
bonds makes them attractive. With the help of Fidelity's research staff, I
focus on housing bonds that we believe will prepay at a slower rate than
the market is assuming. In those cases, we're often able to find
high-yielding housing bonds at attractive prices.
Q. NORTHEAST MARYLAND SOLID WASTE BONDS MADE UP 7.0% OF THE FUND'S
INVESTMENTS AT THE END OF THE PERIOD. WHAT'S THE ATTRACTION TO THESE BONDS?
A. These bonds are resource recovery bonds issued to provide funding for
the management and conversion of waste. Northeast Maryland Solid Waste is
a large municipal bond issuer and its securities account for about 4.4% of
the Lehman Brothers Maryland 4 Plus Year Municipal Bond Index. In our view,
these bonds offered good value because Northeast Maryland Solid Waste is
a project that provides services at competitive prices as well as a
comprehensive waste management plan. Those factors have become particularly
important recently. Over the past couple of years there has been some
investor skepticism about resource recovery bonds because of a pending
challenge before the U.S. Supreme Court. At issue was a locality's ability
to dictate where its waste will be disposed. The Court recently decided
that a locality can choose where to dispose its waste. That, in effect, has
brought on a more competitive climate in which resource recovery plants
must operate.
Q. WHAT'S YOUR GAME PLAN FROM HERE?
A. Investors should not assume the bond markets will be able to maintain
the torrid pace they set in 1995. Rather, I believe that identifying the
right securities within the right sectors will be the key to performance in
1996. So I'll continue to leverage Fidelity's research capabilities in
order to pursue these opportunities.
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 tax-free
income for Maryland residents
START DATE: April 22, 1993
SIZE: as of February 29,
1996, more than $46 million
MANAGER: Steven Harvey,
since April 1993; manager,
Fidelity Ohio Municipal
Income Fund, since 1994;
manager, Spartan
Pennsylvania Municipal
Income Fund, since 1993;
Fidelity Massachusetts
Municipal Income Fund, since
August, 1995; joined Fidelity
in 1986
(checkmark)

STEVEN HARVEY'S OUTLOOK
FOR MARYLAND'S ECONOMY
AND FISCAL HEALTH:
"From an economic
standpoint, the state of
Maryland is in good shape.
It's unlikely that the state will
enjoy the boom times it
experienced in the 1980s,
which were driven by
government employment, and
the construction and banking
sectors. I don't expect those
sectors to grow much in the
near future. The state still
faces the potential long-term
problems stemming from its
cutbacks in its government
employment base. But these
job losses are being
somewhat offset by increases
in the technology sector and
with job gains at smaller
health care systems.
"While some localities may
feel some strain in the form of
added costs resulting from
the exceedingly harsh winter,
the fact that the state and
many localities have strong
balance sheets provides
some comfort. If the snow
removal budgets go through
the roof, most municipalities
will have some resources to
draw on."
INVESTMENT CHANGES

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 49.4 36.0

Housing 14.0 12.3

Health Care 9.8 13.2

Resources Recovery 7.0 7.3

Industrial Development 5.4 1.6

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO

Years 13.0 13.8

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 FEBRUARY 29, 1996
6 MONTHS AGO

Years 7.3 7.8

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.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Aaa 48.4%
Aa, A 38.1%
Baa 8.1%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 5.4%
Aaa 50.4%
Aa, A 34.4%
Baa 10.8%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 4.4%
Row: 1, Col: 1, Value: 48.4
Row: 1, Col: 2, Value: 38.1
Row: 1, Col: 3, Value: 8.1
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 5.4
Row: 1, Col: 1, Value: 50.4
Row: 1, Col: 2, Value: 34.4
Row: 1, Col: 3, Value: 10.8
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 4.4
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investments

MUNICIPAL BONDS - 94.6%
MOODY'S RATINGS (C) PRINCIPAL VALUE AMOUNT (NOTE 1)
MARYLAND - 83.1%
Anne Arundel County Consolidated
Wtr. & Swr. 7% 8/1/04 Aa $ 550,000 $ 640,063
Baltimore County Consolidated Pub. Impt.
5.70% 7/1/02 Aaa 1,000,000 1,072,500
Baltimore County Metropolitan Dist. 6.125%
7/1/07 Aaa 850,000 922,250
Baltimore County Mtg. Rev. Rfdg. (Northbrooke
Apts Proj.) Series A, 6.35% 1/20/21
(GNMA Insured) AAA 1,000,000 1,018,750
Baltimore Consolidated Pub. Impt.:
Rfdg. Series A, 0% 10/15/06 (FGIC Insured) Aaa 2,000,000 1,145,000
Rfdg. Series D, 6% 10/15/04
(AMBAC Insured) Aaa 500,000 549,375
Series A, 7% 10/15/09 (MBIA Insured) Aaa 500,000 595,625
Series B, 7.05% 10/15/07 (MBIA Insured) Aaa 1,000,000 1,193,750
Baltimore Port. Facs. Rev. (Consolidated
Coal Sales) 6.50% 12/1/10 Aa2 2,000,000 2,177,500
Frederick County Pub. Facs. 5.60% 7/1/11 Aa 750,000 768,750
Howard County Metropolitan Dist. Rfdg.
Series B, 6% 8/15/03 Aa1 1,000,000 1,098,750
Maryland Commty. Dev. Admin. Dept. Hsg. &
Commty. Dev. Rev. (Single Family Prog.)
7th Series, 7.25% 4/1/19 (b) Aa 500,000 531,250
Maryland Gen. Oblig. 1st Series A-M,
6.50% 7/1/00 Aaa 2,000,000 2,185,000
Maryland Gen. Oblig. (State & Local Facs. Loan):
1st Series 5.50% 2/1/06 Aaa 1,620,000 1,703,025
2nd Series, 5% 10/15/05 Aaa 2,000,000 2,057,500
Maryland Health & Higher Ed. Facs. Auth. Rev.:
Rfdg. (Howard County Gen. Hosp.)
5.50% 7/1/13 Baa1 2,000,000 1,842,500
Rfdg. (John Hopkins Health Sys.)
Series 1988, 7.50% 7/1/20 Aa1 1,000,000 1,083,750
(Frederick Mem. Hosp.) 5.20% 7/1/08
(FGIC Insured) Aaa 1,500,000 1,516,875
(Good Samaritan Hosp.) 5.75% 7/1/13 A 385,000 383,075
(Univ. of Maryland Med. Sys.) Series A,
6.50% 7/1/21 (FGIC Insured)
(Pre-Refunded to 7/1/01 @100) (d) Aaa 1,000,000 1,103,750
Maryland Trans. Auth. Trans. Facs. Rev.:
6.80% 7/1/16 Aaa 650,000 739,375
5.80% 7/1/06 A1 500,000 526,875
Maryland Wtr. Quality Fing. Revolving Loan
Fund Rev. Series B, 7.25% 9/1/12
(Pre-Refunded to 9/1/00 @102) (d) Aa 1,000,000 1,140,000
Montgomery County Consolidated Pub. Impt.
Series A, 5.625% 10/1/06 Aaa 1,500,000 1,621,875
Montgomery County Hsg. Rev. 6% 7/1/20 Aa 1,000,000 1,001,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE AMOUNT (NOTE 1)
MARYLAND - CONTINUED
Montgomery County Hsg. Opportunitys Commty.
Single Family Mtg. Rev. Series A, 6.60%
7/1/14 Aa $ 1,000,000 $ 1,028,750
Montgomery County Rev. Auth. Lease Rev. Rfdg.
(Olney Indoor Swim Ctr.) Project C, 5.25%
10/1/12 AA- 1,000,000 987,500
Northeast Waste Disp. Auth. Solid Waste Rev.
(Montgomery County Resource Recovery Proj.)
Series A (b):
5.90% 7/1/05 A 600,000 639,750
6% 7/1/07 A 500,000 531,875
6.30% 7/1/16 A 2,000,000 2,067,500
Prince George's County Hsg. Auth. Mtg. Rev.
(Riverview Terrace) Series A, 6.70%
6/20/20 AAA 1,000,000 1,050,000
Prince George's County Hsg. Auth. Single Family
Rev. Series A, 6.50% 12/1/15 (b) AAA 465,000 480,113
Univ. of Maryland Sys. Auxiliary Facs. & Tuition
Rev. Series A, 6% 4/1/00 Aa 1,000,000 1,063,750
Washington Suburban San. Dist.:
Rfdg. 2nd Series, 8% 1/1/02 Aa1 1,000,000 1,191,250
2nd Series, 6.75% 6/1/01 Aa1 590,000 656,375
Worcester County Sanitation Dist. Rfdg. Series J,
6% 8/15/02 Aa 100,000 108,250
38,423,526
PUERTO RICO - 4.1%
Puerto Rico 5.40% 7/1/25 Baa1 2,000,000 1,890,000
MULTIPLE STATE - 7.4%
Washington Metro Area Trans. Auth. Gross Rev.
Rfdg.:
6% 7/1/09 (FGIC Insured) Aaa 600,000 650,250
6% 7/1/10 (FGIC Insured) Aaa 2,570,000 2,769,174
3,419,424
TOTAL MUNICIPAL BONDS
(Cost $42,615,318) 43,732,950
MUNICIPAL NOTES (A)- 5.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE AMOUNT (NOTE 1)
MARYLAND - 3.3%
Baltimore County Econ. Dev. Rev. Rfdg.
(Blue Circle, Inc. Proj.) Series 1992, 3.35%,
LOC Den Danske Bank Group,
VRDN VMIG 1 $ 300,000 $ 300,000
Maryland Comm. Dev. Administration Dept. of
Hsg. & Commty. Dev. Participating VRDN,
Series PT-36, 3.30% (b) (e) VMIG 1 980,000 980,000
Maryland Health & Higher Edl. Facs. Auth. Rev.
(Kaiser Permanente Health Sys.)
Series A, 3.25%, VRDN VMIG 1 800,000 800,000
Montgomery County Multi-Family Hsg. Rev.
(Falkland Apts.) Series 1985 B,
3.40%, VRDN A-1+ 400,000 400,000
TOTAL MUNICIPAL NOTES
(Cost $2,480,000) 2,480,000
TOTAL INVESTMENTS - 100%
(Cost $45,095,318) $ 46,212,950

SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(c) Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
(d) Security collateralized by an amount sufficient to pay interest and
principal.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
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 78.9% AAA, AA, A 77.9%
Baa 8.1% BBB 4.0%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 0.0%
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 49.4%
Housing 14.0
Others
(individually less than 10%) 36.6
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $45,095,318. Net unrealized appreciation aggregated
$1,117,632, of which $1,269,230 related to appreciated investment
securities and $151,598 related to depreciated investment securities.
The fund elects to defer to its fiscal year ending August 31, 1996,
$1,257,458 of losses recognized during the period November 1, 1994 to
August 31, 1995.
At August 31, 1995, the fund had a capital loss carryforward of
approximately $424,313 which will expire on August 31, 2003.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996 (UNAUDITED)

1.ASSETS 2. 3.

4.Investment in securities, at value (cost $45,095,318) - 5. $ 46,212,950
See accompanying schedule

6.Interest receivable 7. 562,956

8. 9.TOTAL ASSETS 10. 46,775,906

11.LIABILITIES 12. 13.

14.Payable to custodian bank $ 20,820 15.

16.Distributions payable 46,795 17.

18.Accrued management fee 14,867 19.

20. 21.TOTAL LIABILITIES 22. 82,482

23.24.NET ASSETS 25. $ 46,693,424

26.Net Assets consist of: 27. 28.

29.Paid in capital 30. $ 47,468,093

31.Accumulated undistributed net realized gain (loss) 32. (1,892,301)
on investments

33.Net unrealized appreciation (depreciation) 34. 1,117,632
on investments

35.36.NET ASSETS, for 4,638,801 shares outstanding 37. $ 46,693,424

38.39.NET ASSET VALUE, offering price and redemption 40. $10.07
price per share ($46,693,424 (divided by) 4,638,801 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

41.42.INTEREST INCOME 43. $ 1,197,912

44.EXPENSES 45. 46.

47.Management fee $ 124,484 48.

49.Non-interested trustees' compensation 83 50.

51. Total expenses before reductions 124,567 52.

53. Expense reductions (64,114) 60,453

54.55.NET INTEREST INCOME 56. 1,137,459

57.REALIZED AND UNREALIZED GAIN (LOSS) 59. 60.
58.Net realized gain (loss) on:

61. Investment securities (209,008) 62.

63. Futures contracts 5,887 (203,121)

64.Change in net unrealized appreciation (depreciation) 65. 66.
on:

67. Investment securities 1,209,003 68.

69. Futures contracts (7,409) 1,201,594

70.71.NET GAIN (LOSS) 72. 998,473

73.74.NET INCREASE (DECREASE) IN NET ASSETS 75. $ 2,135,932
RESULTING FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 1996 AUGUST 31,
(UNAUDITED) 1995

76.INCREASE (DECREASE) IN NET ASSETS

77.Operations $ 1,137,459 $ 2,294,083
Net interest income

78. Net realized gain (loss) (203,121) (1,623,650)

79. Change in net unrealized appreciation (depreciation) 1,201,594 2,356,483

80. 81.NET INCREASE (DECREASE) IN NET ASSETS 2,135,932 3,026,916
RESULTING FROM OPERATIONS

82.Distributions to shareholders from net interest (1,137,459) (2,294,083)
income

83.Share transactions 4,938,733 11,716,389
Net proceeds from sales of shares

84. Reinvestment of distributions 855,255 1,737,058

85. Cost of shares redeemed (3,589,921) (12,168,591)

86. Redemption fees 2,257 6,959

87.88. 2,206,324 1,291,815
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS

89. 90.TOTAL INCREASE (DECREASE) IN NET ASSETS 3,204,797 2,024,648

91.NET ASSETS 92. 93.

94. Beginning of period 43,488,627 41,463,979

95. End of period $ 46,693,424 $ 43,488,627

96.OTHER INFORMATION 98. 99.
97.Shares

100. Sold 492,636 1,239,543

101. Issued in reinvestment of distributions 85,097 183,665

102. Redeemed (357,547) (1,306,266)

103. Net increase (decrease) 220,186 116,942

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED AUGUST 31, APRIL 22, 1993
ENDED (COMMENCEMEN
FEBRUARY 29, 1996 T
OF OPERATIONS) TO
AUGUST 31,

(UNAUDITED) 1995 1994D 1993

104.SELECTED PER-SHARE
DATA

105.Net asset value, $ 9.840 $ 9.640 $ 10.350 $ 10.000
beginning of period

106.Income from Investment .250 .541 .543 .194
Operations
Net interest income

107. Net realized and .230 .198 (.697) .348
unrealized gain (loss)

108. Total from investment .480 .739 (.154) .542
operations

109.Less Distributions (.250) (.541) (.543) (.194)
From net interest income

110. In excess of net realized - - (.020) -

gain

111. Total distributions (.250) (.541) (.563) (.194)

112.Redemption fees added .000 .002 .007 .002
to paid in capital

113.Net asset value, $ 10.070 $ 9.840 $ 9.640 $ 10.350
end of period

114.TOTAL RETURN B 4.91% 8.07% (1.46)% 5.49%

115.RATIOS AND
SUPPLEMENTAL DATA

116.Net assets, end of period $ 46,693 $ 43,489 $ 41,464 $ 28,941
(000 omitted)

117.Ratio of expenses to .27%A .15% .03% 0.0%
average ,C C C C
net assets

118.Ratio of net interest 5.03%A 5.71% 5.45% 5.46%
income to average net A
assets

119.Portfolio turnover rate 46%A 72% 64% 29%
A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C 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).
D EFFECTIVE SEPTEMBER 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 INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Maryland Municipal Income Fund (the fund) is a fund of Fidelity
Union Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which quotations are not readily
available through the pricing service are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes 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."
INTEREST INCOME. Interest income, which includes amortization of premium
and 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 interest 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 futures
and options transactions, market discount, capital loss carryforwards,
expiring capital loss carryforwards, losses deferred due to wash sales and
futures and options and excise tax regulations.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to .50% 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.
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.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Losses may arise
due to changes in the market value of the underlying securities or if the
counterparty does not perform under the contract.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $12,455,830 and $9,760,478, respectively.
The market value of futures contracts opened and closed during the period
amounted to $1,210,716 and $2,336,694, 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
.55% 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
$370 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During the
period, this expense limitation ranged from .25% to .40% of average net
assets and the reimbursement reduced expenses by $64,114.
TO CALL FIDELITY

INVESTMENT ADVISER
(registered trademark)
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*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S TAX-FREE BOND FUNDS
Aggressive Municipal
California Municipal Income
California Insured Municipal Income
High Yield Tax-Free
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Bond
New York Municipal Income
New York Insured Municipal Income
Ohio Municipal Income
SpartanAggressive Municipal
(registered trademark)
Spartan Arizona Municipal Income
Spartan California Intermediate Municipal
Income
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Intermediate Municipal
Income
Spartan New York Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate Municipal
Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

SHORT-INTERMEDIATE
MUNICIPAL INCOME
FUND
(FORMERLY SPARTAN SHORT-INTERMEDIATE
MUNICIPAL FUND)
SEMIANNUAL REPORT
FEBRUARY 29, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

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

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

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

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

NOTES 28 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses, the past five years and life of fund figures would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

Spartan Short-Intermediate Municipal 2.70% 6.76% 33.04% 59.57%

Lehman Brothers 1-5 Year Municipal 2.65% 7.73% n/a n/a
Bond Index

Short Municipal Debt Funds Average 2.67% 6.79% 34.54% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on December 24, 1986. 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 1-5 Year Municipal Bond Index, which
includes investment-grade municipal bonds with maturities between one and
five years. To measure how the fund's performance stacked up against its
peers, you can compare it to the short municipal debt funds average, which
reflects the performance of 25 municipal bond funds with similar objectives
tracked by Lipper Analytical Services over the past six months. Both
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Short-Intermediate Municipal 6.76% 5.88% 5.22%

Lehman Brothers 1-5 Year Municipal 7.73% n/a n/a
Bond Index

Short Municipal Debt Funds Average 6.79% 6.11% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened
if the fund had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
Spartan Short-ILB Municipal Bon
12/31/86 10000.00 10000.00
01/31/87 10054.18 10301.10
02/28/87 10117.67 10351.78
03/31/87 10080.92 10242.05
04/30/87 9812.58 9728.11
05/31/87 9797.32 9679.85
06/30/87 9956.02 9964.06
07/31/87 10032.43 10065.69
08/31/87 10016.89 10088.34
09/30/87 9828.70 9716.38
10/31/87 9745.54 9750.78
11/30/87 9964.63 10005.37
12/31/87 10026.48 10150.55
01/31/88 10214.93 10512.11
02/29/88 10245.98 10623.22
03/31/88 10180.98 10499.46
04/30/88 10232.39 10579.26
05/31/88 10264.91 10548.68
06/30/88 10288.74 10703.01
07/31/88 10334.15 10772.79
08/31/88 10328.97 10782.27
09/30/88 10402.50 10977.43
10/31/88 10466.28 11171.18
11/30/88 10452.77 11068.86
12/31/88 10517.06 11182.09
01/31/89 10579.26 11413.34
02/28/89 10541.78 11283.11
03/31/89 10524.01 11256.14
04/30/89 10585.62 11523.36
05/31/89 10703.40 11762.71
06/30/89 10787.87 11922.44
07/31/89 10895.37 12084.71
08/31/89 10922.27 11966.40
09/30/89 10939.93 11930.74
10/31/89 11024.75 12076.65
11/30/89 11100.65 12287.99
12/31/89 11179.77 12388.51
01/31/90 11185.46 12329.91
02/28/90 11275.65 12440.26
03/31/90 11319.96 12444.00
04/30/90 11301.88 12353.90
05/31/90 11405.65 12623.59
06/30/90 11462.04 12734.55
07/31/90 11553.81 12922.38
08/31/90 11572.98 12734.75
09/30/90 11641.85 12742.01
10/31/90 11728.44 12973.15
11/30/90 11837.30 13234.04
12/31/90 11897.05 13291.61
01/31/91 12006.70 13469.98
02/28/91 12080.42 13587.17
03/31/91 12128.98 13592.06
04/30/91 12243.38 13773.51
05/31/91 12317.11 13895.96
06/30/91 12351.10 13882.20
07/31/91 12435.84 14051.29
08/31/91 12534.72 14236.34
09/30/91 12633.99 14421.70
10/31/91 12717.78 14551.50
11/30/91 12774.12 14592.10
12/31/91 12950.15 14905.24
01/31/92 13005.03 14939.23
02/29/92 13057.07 14944.01
03/31/92 13063.47 14949.54
04/30/92 13148.54 15082.59
05/31/92 13221.13 15260.11
06/30/92 13330.35 15516.17
07/31/92 13535.00 15981.35
08/31/92 13480.28 15825.53
09/30/92 13547.52 15929.03
10/31/92 13546.27 15772.45
11/30/92 13668.04 16054.93
12/31/92 13750.95 16218.85
01/31/93 13889.27 16407.48
02/28/93 14133.72 17000.94
03/31/93 14090.28 16821.24
04/30/93 14157.47 16990.96
05/31/93 14212.36 17086.45
06/30/93 14307.62 17371.62
07/31/93 14319.07 17394.38
08/31/93 14473.15 17756.53
09/30/93 14568.99 17958.78
10/31/93 14595.28 17993.44
11/30/93 14575.46 17834.92
12/31/93 14730.26 18211.41
01/31/94 14828.44 18419.39
02/28/94 14674.56 17942.32
03/31/94 14422.22 17211.71
04/30/94 14476.68 17357.67
05/31/94 14562.83 17508.16
06/30/94 14586.33 17401.18
07/31/94 14715.86 17720.15
08/31/94 14770.41 17781.46
09/30/94 14732.85 17520.43
10/31/94 14681.26 17209.26
11/30/94 14599.71 16898.12
12/31/94 14717.74 17270.05
01/31/95 14881.03 17763.63
02/28/95 15053.88 18280.19
03/31/95 15154.82 18490.23
04/30/95 15209.30 18512.05
05/31/95 15388.97 19102.77
06/30/95 15412.09 18935.62
07/31/95 15499.08 19115.13
08/31/95 15649.11 19357.51
09/30/95 15703.71 19480.04
10/31/95 15791.10 19763.28
11/30/95 15892.24 20091.16
12/31/95 15964.36 20284.23
01/31/96 16068.37 20437.38
02/29/96 16072.92 20299.43

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Short-Intermediate Municipal Income Fund on December 31, 1986, shortly
after the fund started. As the chart shows, by February 29, 1996, the value
of your investment would have grown to $16,073 - a 60.73% increase on your
initial investment. This assumes you still owned the fund on February 29,
1996, and therefore does not include the effect of the $5 account closeout
fee on an average sized account. For comparison, look at how the Lehman
Brothers Municipal Bond Index, which reflects the performance of the
investment-grade municipal bond market, did over the same period. With
dividends reinvested, the same $10,000 would have grown to $20,299 - a
102.99% 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
SIX MONTHS YEARS ENDED AUGUST 31,
ENDED
FEBRUARY 29,

1996 1995 1994 1993 1992 1991

Dividend return 2.11% 4.53% 4.43% 4.82% 5.47% 6.30%

Capital appreciation return 0.59% 1.41% -2.38 2.53% 2.06% 2.00%
%

Total return 2.70% 5.94% 2.05% 7.35% 7.53% 8.30%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee
on an average sized account.
DIVIDENDS AND YIELD
PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.29(cents) 20.82(cents) 42.24(cents)

Annualized dividend rate 4.11% 4.17% 4.24%

30-day annualized yield 3.65% - -

30-day annualized tax-equivalent 5.70% - -
yield

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.08 over
the past month, $10.02 over the past six months and $9.96 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 36% federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Norman Lind, Portfolio Manager of Spartan
Short-Intermediate Municipal Income Fund
Q. NORM, HOW DID THE FUND PERFORM?
A. For the six- and 12-month periods ended February 29, 1996, the fund had
total returns of 2.70% and 6.76%, respectively. In comparison, the short
municipal debt funds average returned 2.67% and 6.79% for the same periods,
as tracked by Lipper Analytical Services. The Lehman Brothers 1-5 Year
Municipal Bond Index returned 2.65% and 7.73% for the same periods.
Q. MUNICIPAL BONDS PERFORMED FAIRLY WELL DURING THE PERIOD. WHAT WERE SOME
OF THE FACTORS DRIVING THAT PERFORMANCE?
A. Interest rates continued to decline throughout the period, which helped
all bonds. However, Treasuries outpaced municipals during the first half of
the period, primarily because of investors' fears that various flat tax
proposals, if enacted, might impact the tax-exempt status of municipals.
But in February, those fears seemed to abate somewhat and municipals
outperformed Treasuries.
Q. HAVE YOU MADE ANY SIGNIFICANT CHANGES SINCE BECOMING THE FUND'S MANAGER
IN OCTOBER?
A. When I became the fund's portfolio manager, its holdings were
concentrated in bonds with five- to seven-year maturity dates, as well as
in maturities of one year or less. To take advantage of price
inefficiencies within the fund's required maturity range, I've been
spreading its assets among
the remaining two-, three- and four-year maturities. Recently, the fund's
trustees voted to allow the fund to maintain an average maturity of between
two and five years. Previously, the fund's average maturity was maintained
at between two and four years.
Q. PREVIOUSLY, THE FUND HAD A LARGE POSITION IN TAX-EXEMPT STUDENT LOAN
BONDS. WHY HAVE YOU PARED THAT POSITION BACK RECENTLY?
A. Let me first explain how tax-exempt student loan bonds work. These
high-quality bonds often trade at yields higher than many other municipal
bonds because of their perceived prepayment risk. Investors fear the loans
backing these bonds will be paid off early and, therefore, force them to
reinvest at lower interest rates. As a result of their low prices, these
bonds had solid appreciation for most of the year and were some of the
fund's best performers during the period. Many began to reach par (face)
value, where their upside potential may be more limited. As they've reached
par, I've been selling them because, at that point, the risks outweighed
any remaining rewards.
Q. OVER THE PAST SIX MONTHS, THERE HAS BEEN SOME SHIFTING AMONG BONDS WITH
VARIOUS CREDIT QUALITIES. COULD YOU FILL US IN ON THE REASONS BEHIND THESE
MOVES?
A. Early last fall, the previous manager began upgrading the quality - or
the credit rating of the average bond - of the portfolio. I think that
strategy made sense and where I've found opportunities to do so, I've done
the same. When making investment decisions, I look at what I am being paid
in yield compared to the risks of the investment. Because the municipal
bond market did so well last year, the spread - or the difference in yield
between lower-rated investment-grade bonds and higher-rated bonds - has
been very narrow. Therefore, I feel I am not being paid enough to take on
lower-quality bonds and, on the other hand, I'm not sacrificing very much
to get higher-quality issues.
Q. WHAT ARE PREMIUM-COUPON BONDS AND WHY HAS IT BEEN A GOOD OPPORTUNITY TO
BUY THEM?
A. Premium coupon bonds have coupon rates (interest rates on a debt
security the issuer promises to pay until maturity) that are higher than
newly issued bonds. While they have a number of attractive investment
characteristics in various markets, I have recently purchased them for what
is known as de minimis protection. Let me explain. Because of a change in
the federal tax code in 1993, gains on municipal bonds may be taxed as
ordinary income - rather than the 28% capital gains rate - if they
depreciate beyond a certain limit. The higher coupon of a premium bond not
only protects the bond from falling below the de minimus price level, but
also has been proven historically to lower volatility in a market
correction.
Q. WHERE HAVE YOU FOUND OPPORTUNITIES RECENTLY?
A. I've recently bought some "forward" bonds. Municipal bond issuers, like
homeowners, prefer to refinance their debt during times when interest rates
are low. But on some occasions, an issuer is prohibited by law from
pre-refunding, or refinancing, its issues at a specific point in time. So
rather than using more traditional pre-refunding methods, they issue
forward bonds. Typically, when an investor buys a bond, it will settle -
meaning the trade is completed - within days of the purchase. But a forward
bond will settle several weeks to several months from the purchase date.
For investors, the advantage is that issuers must price these bonds with
very attractive yields above that of similar newly issued bonds with
comparable maturities, credit ratings and other factors. With the help of
Fidelity's research staff, I targeted bonds where projections about their
future value made them attractive.
Q. WHAT FACTORS DO YOU THINK WILL IMPACT THE MUNICIPAL BOND MARKET'S
PERFORMANCE OVER THE NEXT SIX MONTHS?
A. Obviously, interest rates will most likely be the primary factor that
will determine the performance of the municipal bond market. But there are
two other sets of developments I'll be watching. The first are those
developing in the political arena. While flat tax fears abated somewhat in
recent months, they could re-emerge as the presidential election continues.
Second, the supply of municipal bonds - which I expect to be slightly lower
in 1996 than it was the previous year - might provide some support for the
market.
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: provide high current
income exempt from federal
taxes
START DATE: December 24,
1986
SIZE: as of February 29, 1996,
more than $886 million
MANAGER: Norm Lind, since
October 1, 1995; manager,
Fidelity New York Insured
Municipal Income Fund,
since 1994; Fidelity New
York Municipal Income Fund,
since 1993; Fidelity Advisor
Short-Intermediate Municipal
Income, Spartan New York
Municipal Income, Spartan
Intermediate Municipal
Income, and Spartan New
York Intermediate Municipal
Income funds, since 1995;
joined Fidelity in 1986
(checkmark)
NORM LIND ON HIS
INVESTMENT STRATEGY:
"Because this fund
specializes in municipal
bonds with short and
intermediate maturities, its
state and sector allocation is
a secondary concern. Rather,
I believe I add more value by
trying to take advantage of
price inefficiencies along the
shorter end of the yield curve
- - which is the graphical
representation of the yields of
various bond maturities.
Therefore, I look for bonds
that are undervalued relative
to those of other maturities or
that have investment
characteristics that make
them well suited for a
particular bond market
environment.
"In determining the risks and
rewards available in the
market, I use the Lehman
Brothers 1-5 Year Municipal
Bond Index as a proxy for the
overall market. I believe this
index is the best available
benchmark for managing a
national short-intermediate
municipal bond fund."
INVESTMENT CHANGES

TOP FIVE STATES AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Massachusetts 10.7 14.9

Texas 10.0 10.3

California 9.0 7.4

New York 8.5 4.3

Florida 5.0 3.8

TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

General Obligation 26.0 23.1

Education 23.0 29.9

Escrowed/Pre-Refunded 19.9 13.8

Electric Revenue 6.3 10.8

Transportation 4.7 6.4

AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
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 FEBRUARY 29, 1996
6 MONTHS AGO

Years 3.1 3.0

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.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Aaa, Aa, A 91.2%
Baa 1.0%
Non-rated 1.6%
Short-term
investments 6.2%
Aaa, Aa, A 90.7%
Baa 1.6%
Non-rated 1.1%
Short-term
investments 6.6%
Row: 1, Col: 1, Value: 6.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 2.6
Row: 1, Col: 4, Value: 45.6
Row: 1, Col: 5, Value: 44.0
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 2.6
Row: 1, Col: 4, Value: 44.0
Row: 1, Col: 5, Value: 44.6
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 93.8%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
ALASKA - 1.3%
Alaska Student Loan Corp.
Student Loan Rev. (b):
6.90% 7/1/96, (AMBAC Insured) $ 1,400 $ 1,413
7.20% 7/1/99, (AMBAC Insured) 2,975 3,187
North Slope Borough:
Series A, 0% 6/30/99, (MBIA Insured) 1,500 1,299
Series B, 0% 1/1/99, (MBIA Insured) 7,000 6,195
12,094
ARIZONA - 2.3%
Arizona Trans. Board Excise Tax Rev. (Maricopa County
Reg'l. Area) 7.40% 7/1/98 3,750 3,980
Maricopa County Series C, 8.90% 7/1/99 4,000 4,580
Maricopa County School Dist. #4 Rfdg. (Mesa Unified)
(Cap. Appreciation) 0% 7/1/98, (FGIC Insured) 2,600 2,366
Maricopa County School Dist. #28 (Kyrene Elementary)
(Cap. Appreciation) Rfdg. 0% 7/1/98, (FGIC Insured) 3,340 3,039
Phoenix Civic Impt. Corp. Excise Tax Rev. Rfdg.
(Arpt. Impts.) Series A (b):
5.60% 7/1/99 3,240 3,377
5.75% 7/1/00 3,320 3,503
5.85% 7/1/01 1,000 1,068
21,913
ARKANSAS - 1.0%
Arkansas Student Loan Auth. Rev. Sr. Series A-1 (b):
6.05% 6/1/02 4,700 4,970
6.05% 12/1/02 4,455 4,733
9,703
CALIFORNIA - 7.4%
California Dept. of Wtr. Res. Rev. (Century Valley Proj.)
Series I (c):
6.60% 12/1/19, (Pre-Refunded to 6/1/00 @ 101.5) 2,350 2,600
6.95% 12/1/25, (Pre-Refunded to 6/1/00 @ 101.5) 1,615 1,809
California Higher Ed. Loan Auth. Rev. Rfdg. (Student Loan)
Series E-2, 5.70% 12/1/98 (b) 4,000 4,090
California Rural Home Mtg. Fin. Auth. Lease Rev.
Series A, 4.45% 8/1/01 3,500 3,475
Clovis Unified School Dist. Spl. Tax (Cap. Appreciation)
Series B, 0% 8/1/00, (MBIA Insured) 5,725 4,716
East Bay Muni. Util. Dist. Wtr. Sys. Rev. 6% 6/1/98,
(FGIC Insured) 1,500 1,568
La Mirada Redev. Agcy.
6.80% 8/15/21, (Pre-Refunded to 8/15/00 @ 102) (c) 3,950 4,439
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Los Angeles Dept. of Wtr. & Pwr. Rev. (Elec. Plant)
Second Issue:
9% 10/15/00 $ 1,300 $ 1,560
9% 10/15/01 2,000 2,463
Los Angeles Wastewtr. Sys. Rev. Series B, 9% 6/1/96,
(AMBAC Insured) 2,305 2,334
Northern California Pwr. Agcy. Pub. Pwr. Rev. Rfdg.
(Hydro Elec. Proj. #1) Series A (c):
7.75% 7/1/99, (Pre-Refunded to 7/1/96 @ 102) 1,585 1,640
7.80% 7/1/00, (Pre-Refunded to 7/1/96 @ 102) 1,990 2,060
7.80% 7/1/01, (Pre-Refunded to 7/1/96 @ 102) 1,455 1,506
7.875% 7/1/06, (Pre-Refunded to 7/1/96 @ 102) 3,495 3,618
(Geothermal Proj. #3-B) 5.50% 7/1/01,
(AMBAC Insured) (a) 3,000 3,150
Rosemead Redev. Agcy. (Sub. Lien Tax Allocation Proj. Area 1) (c):
0% 10/1/96, (Escrowed to Maturity) 2,235 2,192
0% 10/1/97, (Escrowed to Maturity) 1,875 1,770
0% 10/1/98, (Escrowed to Maturity) 1,000 906
0% 10/1/99, (Escrowed to Maturity) 2,205 1,905
Sacramento Muni. Util. Dist. Elec. Rev. Rfdg.
Series V, 7.75% 8/15/03 5,150 5,723
San Bernardino County Ctfs. of Prtn. (Med. Ctr. Fing. Proj.)
4.75% 8/1/00 4,000 3,940
San Diego County Reg'l. Trans. Commission Series A,
5% 4/1/98, (FGIC Insured) 2,000 2,048
Signal Hill Redev. Agcy. Tax 7.40% 10/1/15,
(Pre-Refunded to 10/1/00 @ 100) (c) 6,800 7,710
Univ. of California Rev. Rfdg. (Multiple Purp. Projs.) Series C,
10% 9/1/99, (AMBAC Insured) 2,605 3,090
70,312
COLORADO - 0.6%
Aurora Ctfs. of Prtn. Rfdg. 4.75% 12/1/96 500 504
Colorado Ctfs. of Prtn. (Rfdg. & Acquisition Projs.)
4.75% 11/1/97, (AMBAC Insured) 2,750 2,791
Pueblo Wtr. Rfdg. Series 1984 B, 9.50% 11/1/98,
(MBIA Insured) 2,250 2,492
5,787
CONNECTICUT - 1.1%
Connecticut Gen. Oblig.:
Rfdg. Economic Recov. Notes 5% 12/15/98 6,000 6,180
Series C, 7% 9/15/02 2,235 2,506
Connecticut Resources Recovery Auth. Rev. (Bridgeport
Resco Co. LP Proj.) Series B, 8.20% 1/1/97 1,490 1,529
10,215
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
DELAWARE - 0.4%
Delaware Trans. Auth. Trans. Sys. Rev. 7.50% 7/1/02,
(MBIA Insured) $ 3,500 $ 3,763
DISTRICT OF COLUMBIA - 0.1%
District of Columbia Gen. Oblig. Series A, 7.50% 6/1/10,
(AMBAC Insured) (Pre-Refunded to 6/1/00 @ 102) (c) 1,000 1,134
FLORIDA - 5.0%
Florida Board of Ed. Administration Pub. Ed. (Cap. Outlay)
Series B, 5.625% 6/1/96 4,000 4,022
Florida Ctfs. of Prtn. (Consolidated Equip. Prog.)
5.90% 5/15/96 5,865 5,890
Florida Division Bldg. Fin. Dept. Gen. Svcs. Rev.
(Dept. Natural Resources-Preservation 2000)
Series A, 5.75% 7/1/99, (MBIA Insured) 7,250 7,640
Florida Muni. Pwr. Agcy. Rev. (c):
6.50% 10/1/20 (Stanton II Proj.), (AMBAC Insured)
(Pre-Refunded to 10/1/02 @ 102) 1,500 1,704
6.25% 10/1/21, (AMBAC Insured)
(Pre-Refunded to 10/1/02 @ 102) 1,000 1,123
Hillsborough County Aviation Auth. Rev. (Tampa Int'l. Arpt.)
Series B, 7.10% 10/1/09, (AMBAC Insured)
(Pre-Refunded to 10/1/99 @102) (c) 2,000 2,235
Jacksonville Elec. Auth. Rev. 7.10% 10/1/99 1,500 1,592
Lakeland Elec. & Wtr. Rev. Rfdg. (Jr. Sub. Lien) (a):
6.25% 10/1/00, (FGIC Insured) 9,175 9,852
6.25% 10/1/01, (FGIC Insured) 9,255 9,995
Sarasota Wtr. & Swr. Util. Rev. Rfdg. (a):
5.25% 10/1/98, (FGIC Insured) 500 514
5.25% 10/1/99, (FGIC Insured) 1,090 1,125
6.25% 10/1/01, (FGIC Insured) 1,210 1,310
47,002
GEORGIA - 1.0%
Fulton County Unltd. Tax 6.50% 1/1/01 1,000 1,023
Georgia Gen. Oblig. Series B, 7.20% 3/1/01 2,000 2,263
Gwinnett County School Dist. Series A, 5.10% 2/1/99 2,410 2,479
Gwinnett County Wtr. & Swr. Ctfs. of Prtn. 7.75% 8/1/96 3,850 3,914
9,679
HAWAII - 0.1%
Hawaii Arpts. Sys. Rev. 2nd Series, 7.40% 7/1/02,
(FGIC Insured) (b) 1,000 1,138
ILLINOIS - 1.6%
Chicago Park Dist. Rfdg. (a):
5.50% 1/1/99, (FGIC Insured) 500 518
5.50% 1/1/00, (FGIC Insured) 500 521
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
ILLINOIS - CONTINUED
Illinois Scholarship Commission Student Loan Rev. Series I,
0.02% 3/1/96 (b) $ 8,725 $ 8,725
Metropolitan Pier & Exposition Auth. Dedicated Tax Rev.
(McCormick Place Expansion Proj.) Series A,
0% 6/15/96, (AMBAC Insured) 4,055 4,016
Rock Island County Ctfs. of Prtn.
10% 12/1/96, (FGIC Insured) 840 878
14,658
INDIANA - 2.9%
Indianapolis Local Pub. Impt. Series D, 0% 2/1/18,
(Pre-Refunded to 2/1/98 @ 19.12) (c) 59,000 10,399
Indianapolis Resource Recovery Rev. (a):
6% 12/1/00, (AMBAC Insured) 3,315 3,501
6.50% 12/1/01, (AMBAC Insured) 5,785 6,298
6% 12/1/02, (AMBAC Insured) 6,780 7,433
27,631
KANSAS - 0.6%
Johnson County Unified School Dist. #233 Rfdg. & Impt.
8% 9/1/99, (AMBAC Insured) 3,050 3,439
Wichita Gen. Oblig. Sales Tax Unltd. Tax 4.50% 6/1/98 1,750 1,763
5,202
KENTUCKY - 4.6%
Kentucky Infrastructure Auth. 7.85% 9/1/18,
(AMBAC Insured) (Pre-Refunded to 9/1/98 @102) (c) 3,000 3,338
Kentucky Property & Bldgs. Commission 6% 11/1/00 9,000 9,608
Kentucky Tpk. Auth. Economic Dev. Rev. Rfdg.
(Revitalization Proj.) 5% 7/1/01, (AMBAC Insured) 10,000 10,261
Louisville & Jefferson County Reg'l. Arpt. Auth. Arpt. Sys. Rev.
Series C, 4.75% 7/1/00, (MBIA Insured) (b) 5,980 6,025
Owensboro Elec. Lt. & Pwr. Rev. Rfdg. Series B:
0% 7/1/96, (AMBAC Insured) 1,400 1,382
0% 1/1/97, (AMBAC Insured) 3,025 2,923
0% 7/1/97, (AMBAC Insured) 1,000 946
0% 1/1/98, (AMBAC Insured) 2,000 1,848
0% 1/1/99, (AMBAC Insured) 3,300 2,900
0% 1/1/01, (AMBAC Insured) 5,450 4,367
43,598
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
LOUISIANA - 2.7%
Louisiana Pub. Facs. Auth. Rev.:
(Browning-Ferris Ind., Inc.) 3.85% 11/1/96 (b) $ 5,000 $ 4,988
(Student Loan) Sr. Series A-1:
5.90% 3/1/99 2,140 2,199
6.20% 3/1/01 2,000 2,110
(Supplemental Student Loan):
Series B, 8.125% 12/1/99, (AMBAC Insured) 8,035 8,758
Series C, 8.125% 12/1/99, (AMBAC Insured) 3,815 4,158
Louisiana Gen. Oblig. Rfdg. Series A, 6.40% 8/1/96 3,000 3,034
Ouachita Parish Hosp. Svc. Dist. #1 Rev.
(Glenwood Reg'l. Medical Ctr.) 6.70% 7/1/96 475 478
25,725
MAINE - 0.2%
Maine Edl. Loan Auth. Edl. Loan Rev. (Supplemental Ed.
Loan Prog.) Series A-1, 5.60% 12/1/96 (b) 255 257
Maine Edl. Loan Marketing Corp. Student Loan Rev. Rfdg.
Series A-1, 4.95% 5/1/96 (b) 1,200 1,201
1,458
MARYLAND - 1.7%
Maryland Gen. Oblig.:
5.30% 10/15/99 3,500 3,648
4.50% 10/15/01 2,565 2,597
Montgomery County Consolidated Pub. Impt. Series A:
5.50% 10/1/99 5,000 5,269
7% 4/1/07, (Pre-Refunded to 4/1/00 @ 102) (c) 2,000 2,243
Prince Georges County 6.20% 3/15/99, (MBIA Insured) 1,985 2,112
15,869
MASSACHUSETTS - 10.7%
Massachusetts Gen. Oblig.:
(Cap. Appreciation) Series A, 0% 6/1/97 1,930 1,838
Consolidated Loan Series B, 9.25% 7/1/00 4,500 5,338
Consolidated Loan Series C, 6.75% 8/1/06,
(Pre-Refunded to 8/1/01 @102) (c) 1,000 1,133
Massachusetts Ind. Fin. Agcy. Rev.:
(Massachusetts Biomedical Research) Series A-1:
7.10% 8/1/99 4,580 4,872
(Cap. Appreciation) 0% 8/1/00 4,510 3,693Rfdg. (Morton Hosp. & Medical
Ctr.) Series A,
8.75% 7/1/11, (Pre-Refunded to 7/1/99 @ 102) (c) 3,960 4,514
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Tpk. Auth. (Guaranteed Bond Anticipation
Notes) Series A, 5% 6/1/99 $ 11,010 $ 11,379
Massachusetts Wtr. Resevoir Auth.:
Series A:
7% 4/1/00, (Pre-Refunded to 4/1/00 @ 102) (c) 10,485 11,756
7.125% 4/1/00 1,500 1,646
7.375% 4/1/04, (Pre-Refunded to 4/1/00 @102)(c) 2,000 2,270
7.625% 4/1/14, (Pre-Refunded to 4/1/00 @ 102) (c) 2,000 2,288
New England Ed. Loan Marketing Corp. Rfdg.
(Massachusetts Student Loan):
Sr. Issue D, 6% 9/1/99 7,000 7,376
Series B, 5.40% 6/1/00 10,500 10,828
Series E, 5% 7/1/99 25,400 25,718
Series G, 5% 8/1/00 6,350 6,453
101,102
MICHIGAN - 0.7%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall Expansion Proj.):
4.75% 9/30/00 5,220 5,233
4.80% 9/30/01 1,855 1,855
7,088
MINNESOTA - 0.9%
Minneapolis Gen. Oblig. Unltd. Tax (Cap. Appreciation) Series B:
0% 12/1/02 1,300 952
0% 12/1/03 500 347
0% 12/01/04 1,500 984
0% 12/01/05 1,500 928
Minnesota Gen. Oblig. 6.80% 8/1/02,
(Pre-Refunded to 8/1/00 @100) (c) 4,000 4,415
Northern Muni. Pwr. Agcy. Elec. Sys. Rev. Rfdg.
Series A, 7.10% 1/1/98 1,300 1,365
8,991
MONTANA - 3.0%
Montana Higher Ed. Student Assistance Corp.
Student Loan Rev. (b):
Sr. Series A, 4.75% 12/1/98 1,000 1,010
Sr. Series B:
4.70% 12/1/98 7,225 7,288
4.90% 12/1/99 7,420 7,522
Series B:
6.20% 12/1/97 4,110 4,223
6.40% 6/1/98 3,700 3,825
6.40% 12/1/98 4,250 4,420
28,288
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
MULTIPLE STATES - 0.1%
New England Ed. Loan Marketing Corp. Rev. Rfdg.
(Massachusetts Student Loan) Sr. Issue D, 6% 9/1/99 $ 1,100 $ 1,176
NEBRASKA - 0.3%
Nebraska Pub. Pwr. Dist. Rev. 5.40% 7/1/01 3,085 3,224
NEW HAMPSHIRE - 1.5%
New Hampshire Higher Edl. & Health Facs. Auth. Rev.
(Frisbie Memorial Hosp.) 9.50% 10/1/08, (Pre-Refunded to
10/1/97 @ 103) (c) 13,000 14,430
NEW JERSEY - 2.5%
New Jersey Gen. Oblig. Rfdg. Series B, 6.25% 1/15/01 2,000 2,173
New Jersey Health Care Facs. Fing. Auth. Rev. (Atlantic City
Medical Ctr.) Series C:
5.60% 7/1/96 3,300 3,316
5.80% 7/1/97 4,000 4,080
6.45% 7/1/02 3,500 3,714
New Jersey Trans. Trust Fund Auth. Sys. Series A,
6% 6/15/02, (AMBAC Insured) 10,000 10,863
24,146
NEW MEXICO - 2.1%
Albuquerque New Mexico Arpt. Rev. Rfdg. (a):
6.25% 7/1/98, (AMBAC Insured) 510 525
6.25% 7/1/99, (AMBAC Insured) 540 560
6.25% 7/1/00, (AMBAC Insured) 660 688
6.25% 7/1/01, (AMBAC Insured) 980 1,027
New Mexico Edl. Assistance Foundation Student Loan Rev. (b):
Sr. Series IV-A1:
6.40% 3/1/03 5,375 5,818
6.50% 3/1/04 3,370 3,682Series A:
6.25 4/1/98, (AMBAC Insured) 4,435 4,601
6.55% 4/1/00, (AMBAC Insured) 2,505 2,624
19,525
NEW YORK - 8.1%
Babylon Ind. Dev. Agcy. Resources Recovery Rev.
(Odgen Martin Sys. Babylon, Inc. Co.) Series B,
8.50% 1/1/19, (Pre-Refunded to 7/1/98 @103) (c) 2,875 3,249
Battery Park New York City Auth. Rev. Series 1990,
6.50% 5/1/20, (Pre-Refunded to 5/1/99 @ 100) (c) 5,000 5,381
Metro Transportation Auth. Svc. Contract Series 4 (c):
(Commuter Facs.) 8% 7/1/08,
(Pre-Refunded to 7/1/00 @ 101.5) 2,790 3,247
(Transit Facs.) 8% 7/1/08,
(Pre-Refunded to 7/1/00 @ 101.5) 2,050 2,386
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
NEW YORK - CONTINUED
New York State Dorm. Auth. Lease Rev.:
(City Univ. Sys. Consolidated) (c):
Series A, 7.625% 7/1/20,
(Pre-Refunded to 7/1/00 @ 102) $ 7,100 $ 8,201
Series F, 7.875% 7/1/17,
(Pre-Refunded to 7/1/00 @ 102) 4,650 5,417
(State University of New York)
5% 7/1/99, (AMBAC Insured) 8,885 9,163
New York State Gen. Oblig. Crossover Rfdg.:
7.80% 11/15/98 12,820 14,084 7.80% 11/15/99 3,780 4,215
New York State Medical Care Fac. (c):
8.875% 8/15/07, (Pre-Refunded to 8/15/97 @ 102) 13,750 15,056
7.30% 2/15/21, (Pre-Refunded to 8/15/01 @ 102) 1,785 2,080
New York State Urban Dev. Corp. Rev. (Correctional)
Cap. Facs., Series 1, 7.75% 1/1/14 4,000 4,580
77,059
NEW YORK & NEW JERSEY - 0.3%
New York & New Jersey Port Auth. Series SS,
4.90% 9/1/97 (b) 3,000 3,000
NORTH CAROLINA - 1.6%
North Carolina Eastern Muni. Pwr. Agcy.
Pwr. Sys. Rev. Rfdg. Series A:
4.375% 1/1/99, (AMBAC Insured) 2,465 2,477
7.875% 1/1/02 8,000 9,050
North Carolina Muni Pwr. Agcy. #1 Rev. Rfdg. (Catawba Elec.):
5.75% 1/1/02 1,000 1,034
7.875% 1/1/19 2,000 2,183
14,744
NORTH DAKOTA - 0.2%
North Dakota Student Loan Rev. Rfdg. Series A,
5.70% 7/1/97 2,315 2,358
OHIO - 3.3%
Cincinnati City School Dist. Tax Anticipation Notes:
5.40% 6/1/96 4,000 4,018
5.35% 6/15/96 1,700 1,708
Cleveland Arpt. Sys. Rev. Series B, 6.90% 1/1/99,
(MBIA Insured) 2,080 2,220
Franklin County Ltd. Tax (Courthouse) 6.375% 12/1/17,
(Pre-Refunded to 12/1/01 @102) (c) 3,800 4,256
Franklin County Hosp. Rev. Rfdg. & Impt.
(Riverside United Hosp.) Series B, 7.60% 5/15/20 6,550 7,524
Franklin County Rev. (OCLC Online Computer Library Ctr.)
Series 1993, 4.70% 4/15/96 270 270
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
OHIO - CONTINUED
Ohio Dev. Commty. (Globe Ind. Proj.) Series 1,
7.75% 6/1/96 (b) $ 360 $ 362
Ohio State Gen. Oblig. (Infrastructure) 3.85% 8/1/98 2,600 2,618
Ohio State Pub. Facs. Commission 4.50% 12/1/98,
(MBIA Insured) 2,100 2,126
Student Loan Funding Corp. Student Loan Rev. Series A,
5.50% 12/1/01 (b) 5,960 6,035
31,137
OKLAHOMA - 0.2%
Oklahoma Student Loan Auth. Rev. Rfdg. (Student Loan)
Series A, 5.35% 9/1/96 (b) 1,930 1,933
PENNSYLVANIA - 1.0%
Erie County School Dist. (Cap. Appreciation) (c):
0% 6/1/96, (Escrowed to Maturity) 785 779
0% 12/1/96, (Escrowed to Maturity) 1,125 1,096
0% 6/1/97, (Escrowed to Maturity) 1,435 1,374
0% 12/1/97, (Escrowed to Maturity) 1,405 1,321
0% 6/1/98, (Escrowed to Maturity) 905 836
0% 12/1/98, (Escrowed to Maturity) 1,770 1,602
Pennsylvania Gen. Oblig. 6.50% 10/15/01, (FSA Insured) 1,000 1,030
Pittsburgh Series B, 6.75% 3/1/97, (FGIC Insured) 1,700 1,749
9,787
PUERTO RICO - 0.3%
Puerto Rico Elec. Pwr. Auth. Pwr. Resources Auth. Rev.
7.125% 7/1/14, (Escrowed to Maturity) (c) 2,500 2,784
RHODE ISLAND - 1.5%
Rhode Island Student Loan Auth. Student Loan Rev. Rfdg.
Series A, 6% 12/1/97 14,000 14,298
SOUTH CAROLINA - 3.4%
South Carolina Cap. Impt. Series A, 6.35% 3/1/01 3,200 3,504
South Carolina Ed. Assistance Auth. Rev. (b):
Rfdg. (Guaranteed Student Loan) Sub Lien B, 5% 9/1/99 7,045 7,168
(Insured Student Loan):
6.50% 9/1/98 5,000 5,288
6.90% 9/1/98 2,950 3,116
6.60% 9/1/99 2,845 3,041
South Carolina Pub. Svc. Auth. Rev. Rfdg. Series A:
6% 1/1/97, (MBIA Insured) (a) 3,500 3,558
6% 1/1/98, (MBIA Insured) (a) 4,000 4,130
6.25% 1/1/01, (AMBAC Insured) 2,005 2,160
31,965
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
SOUTH DAKOTA - 0.4%
South Dakota Student Loan Fin. Corp. Student Loan Rev.
Series A, 5.70% 8/1/99 (b) $ 3,575 $ 3,660
TENNESSEE - 1.9%
Tennessee Gen. Oblig.:
Series A:
5% 5/1/98 3,560 3,645
5% 5/1/99 4,235 4,356
Rfdg. Series B, 5% 5/1/98 9,975 10,212
18,213
TEXAS - 7.3%
Alamo Commty. Dist. Rfdg.:
0% 2/15/99, (AMBAC Insured) 2,530 2,236
0% 2/15/00, (AMBAC Insured) 3,350 2,822
Alief Independent School Dist. Rfdg. 0% 2/15/02,
(PSF Guaranteed) 1,000 770
Arlington Independent School Dist. School Bldg.
Rfdg. (Cap. Appreciation) 0% 8/15/97, (MBIA Insured) 1,250 1,181
Austin Util. Sys. Rev. Rfdg.:
(Prior Lien) Series B, 7% 11/15/98, (FGIC Insured) 3,175 3,415
Series A, 0% 11/15/98, (MBIA Insured) 3,000 2,681
Austin Wtr. Swr. & Elec. Rev. Rfdg.:
11% 11/15/96, (Escrowed to Maturity) (c) 1,040 1,094
11% 11/15/96 5,245 5,384
Brazos Higher Ed. Auth. Student Loan Rev. Rfdg.
Series C-1 (b):
4.95% 6/1/98 8,700 8,852
5.15% 6/1/99 9,875 10,110
Colorado River Wtr. Resources Auth. Rev. 8.50% 1/1/01 2,200 2,580
Corpus Christi Independent School Dist. 0% 8/15/01 1,600 1,252
Dallas County Road Gen. Oblig. 7% 8/15/01 1,750 1,978
Dallas Independent School Dist. Rfdg. (Cap. Appreciation)
0% 8/15/96, (PSF Guaranteed) 5,000 4,921
Fort Bend Independent School Dist. Rfdg.
4.375% 2/15/98, (PSF Guaranteed) 1,810 1,824
Harris County Toll Road Sub. Lien. Rev. Unltd. Tax Rfdg.
(Cap Appreciation) 0% 8/1/01 3,490 2,740
San Antonio Elec. & Gas Rev. 6.40% 2/1/98 3,000 3,059
San Antonio Wtr. Rev. 0% 5/1/09, (AMBAC Insured)
(Pre-Refunded to 5/1/00 @ 53.658) (c) 6,415 2,871
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
TEXAS - CONTINUED
Texas Gen. Oblig. Superconducting (Cap Appreciation)
Series C, 0% 4/1/02, (FGIC Insured) $ 2,750 $ 2,083
Texas Higher Ed. Coordinating Board College Student
Loan Rev. (Sr. Lien) 6.60% 4/1/96 (b) 815 816
Texas Pub. Fin. Auth. Rfdg. Series A, 0% 10/1/01,
(AMBAC Insured) 9,000 7,009
69,678
UTAH - 3.1%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.:
Series 1, 0% 7/1/15, (AMBAC Insured)
(Pre-Refunded to 7/1/00 @ 101) (c) 7,500 6,262Series B:
0% 7/1/01, (AMBAC Insured) 5,000 3,894
5.50% 7/1/01, (MBIA Insured) (a) 13,825 14,482
Series C, 6% 7/1/01, (MBIA Insured) (a) 2,000 2,143
Utah Associated Muni. Pwr. Sys. Rev. Rfdg. (Cap. Appreciation)
(Hunter Proj.) 0% 7/1/98, (AMBAC Insured) 2,765 2,523
29,304
VERMONT - 0.6%
Vermont Student Assistance Corp. Edl. Loan Rev. Rfdg. Fing.
Prog. Series A:
6.25% 6/15/98, (AMBAC Insured) 3,250 3,360
6.35% 6/15/99, (AMBAC Insured) 2,500 2,612
5,972
VIRGINIA - 1.2%
Chesapeake Gen. Oblig. 5.70% 5/1/01 2,900 3,089
Fairfax County Pub. Impt. Series A, 5% 6/1/98 3,400 3,485
Virginia Ed. Loan Auth. (Guaranteed Student Loan)
5.05% 9/1/99, (Escrowed to Maturity) (c) 1,975 2,042
Virginia Pub. Bldg. Auth. Rev. Rfdg. 5.60% 3/1/98,
(Escrowed to Maturity) (c) 2,250 2,332
10,948
WASHINGTON - 2.2%
Washington Gen. Oblig.:
Unltd. Tax Series R-93-B, 4.125% 10/1/97 3,750 3,778
Series 96-A, 6.75% 7/1/01 3,780 4,215
Washington Health Care Facs. Auth. Rev.:
Rfdg. (Group Health Coop. Puget Sound Seattle) Series
1988 A, 7.40% 12/1/98, (MBIA Insured) 2,750 2,994
(Pooled Cap. Facs. & Equip.) 7.30% 4/1/96, (MBIA Insured) 580 581
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
WASHINGTON - CONTINUED
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #1 Rev. Rfdg.:
Series A:
7.25% 7/1/99 $ 2,760 $ 2,977
6.50% 7/1/02 1,000 1,086
Series B, 5% 7/1/01 2,500 2,516
Washington Pub. Pwr. Supply Sys. Nuclear Proj #2 Rev. Rfdg.
Series A, 6.50% 7/1/02 2,220 2,403
20,550
WISCONSIN - 0.8%
Wisconsin Gen. Oblig. Series A, 5.50% 5/1/99 6,970 7,275
TOTAL MUNICIPAL BONDS
(Cost $876,818) 889,516
MUNICIPAL NOTES - 6.2%
CALIFORNIA - 1.6%
California School Cash Reserve Program
(Authority Pool Bonds)
TRAN Series 1995 A, 4.75% 7/3/96,
LOC Industrial Bank of Japan Ltd., (MBIA Insured) 7,000 7,022
Ventura County TRAN 4.50% 7/2/96 8,000 8,027
15,049
COLORADO - 1.1%
Colorado Gen Oblig. TRAN 4.50% 6/27/96 11,000 11,038
ILLINOIS - 0.2%
Illinois Dev. Fin. Auth. Multi-Family Hsg. Rev. Rfdg.
(Garden Glen Apts.) Series 93, 3.60%, VRDN (d) 1,800 1,800
NEW YORK - 0.4%
New York State Energy & Research Dev. Auth. Poll. Cont. Rev.
(Niagra Mohawk Pwr.) Series 1987 A, 3.85%,
LOC Toronto-Dominion Bank, Canada, VRDN (d) 3,500 3,500
TEXAS - 2.7%
Gulf Coast Ind. Dev. Auth. Solid Waste Disposal Rev.
(Citgo Petroleum) 3.60%, VRDN (d) 2,500 2,500
Harris County Ind. Dev. Corp. Poll. Cont. Rev. (Exxon Proj.)
Series 1987, 3.55%, VRDN (b)(d) 1,200 1,200
Texas Gen. Oblig. TRAN Series 1995 A, 4.75% 8/30/96 21,500 21,657
25,357
MUNICIPAL NOTES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
WEST VIRGINIA - 0.2%
West Virginia Pub. Energy Auth. Rev. Bonds
(Morgantown Energy Assoc.) 3.40%,
tender 3/20/96, LOC Swiss Bank (b) $ 2,000 $ 2,000
TOTAL MUNICIPAL NOTES
(Cost $58,642) 58,744
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $935,460) $ 948,260
SECURITY TYPE ABBREVIATIONS
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(f) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(g) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(h) Security collateralized by an amount sufficient to pay interest and
principal.
(i) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
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 83.0% AAA, AA, A 74.7%
Baa 1.0% BBB 2.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 1.5%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 26.0%
Education 23.0
Escrowed/Pre-Refunded 19.9
Electric Revenue 6.3
Others (individually less than 5%) 24.8
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $935,460,000. Net unrealized appre- ciation
aggregated $12,800,000, of which $13,771,000 related to appreciated
investment securities and $971,000 related to depreciated investment
securities.
At August 31,1995, the fund had a capital loss carryforward of
approximately $5,803,000 all of which will expire on August 31,2003.
The fund intends to elect to defer to its fiscal year ending August 31,1996
approximately $4,912,000 of losses recognized during the period November 1,
1994 to August 31, 1995.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
(EXCEPT PER-SHARE AMOUNTS) FEBRUARY 29, 1996 (UNAUDITED)

6.ASSETS 7. 8.

9.Investment in securities, at value (cost $935,460) - 10. $ 948,260
See accompanying schedule

11.Receivable for investments sold 12. 3,282

13.Interest receivable 14. 11,659

15. 16.TOTAL ASSETS 17. 963,201

18.LIABILITIES 19. 20.

21.Payable to custodian bank $ 139 22.

23.Payable for investments purchased 6,850 24.
Regular delivery

25. Delayed delivery 68,859 26.

27.Payable for fund shares redeemed 201 28.

29.Distributions payable 595 30.

31.Accrued management fee 386 32.

33. 34.TOTAL LIABILITIES 35. 77,030

36.37.NET ASSETS 38. $ 886,171

39.Net Assets consist of: 40. 41.

42.Paid in capital 43. $ 880,762

44.Accumulated undistributed net realized gain (loss) on 45. (7,391)
investments

46.Net unrealized appreciation (depreciation) on 47. 12,800
investments

48.49.NET ASSETS, for 88,246 shares outstanding 50. $ 886,171

51.52.NET ASSET VALUE, offering price and redemption 53. $10.04
price per share ($886,171 (divided by) 88,246 shares)

STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)

54.55.INTEREST INCOME 56. $ 21,298

57.EXPENSES 58. 59.

60.Management fee $ 2,471 61.

62.Non-interested trustees' compensation 2 63.

64. Total expenses before reductions 2,473 65.

66. Expense reductions (56) 2,417

67.68.NET INTEREST INCOME 69. 18,881

70.REALIZED AND UNREALIZED GAIN (LOSS) 72. 4,376
71.Net realized gain (loss) on investment securities

73.Change in net unrealized appreciation (depreciation) 74. 1,268
on investment securities

75.76.NET GAIN (LOSS) 77. 5,644

78.79.NET INCREASE (DECREASE) IN NET ASSETS 80. $ 24,525
RESULTING
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED FEBRUARY AUGUST 31,
29,1996 1995
(UNAUDITED)

81.INCREASE (DECREASE) IN NET ASSETS

82.Operations $ 18,881 $ 41,879
Net interest income

83. Net realized gain (loss) 4,376 (6,557)

84. Change in net unrealized appreciation (depreciation) 1,268 15,567

85. 86.NET INCREASE (DECREASE) IN NET ASSETS 24,525 50,889
RESULTING
FROM OPERATIONS

87.Distributions to shareholders from net interest (18,881) (41,879)
income

88.Share transactions 136,417 358,751
Net proceeds from sales of shares

89. Reinvestment of distributions 16,189 36,316

90. Cost of shares redeemed (180,916) (577,976)

91.92. (28,310) (182,909)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS

93. 94.TOTAL INCREASE (DECREASE) IN NET ASSETS (22,666) (173,899)

95.NET ASSETS 96. 97.

98. Beginning of period 908,837 1,082,736

99. End of period $ 886,171 $ 908,837

100.OTHER INFORMATION 102. 103.
101.Shares

104. Sold 13,610 36,591

105. Issued in reinvestment of distributions 1,615 3,705

106. Redeemed (18,045) (59,215)

107. Net increase (decrease) (2,820) (18,919)

</TABLE>

108. FINANCIAL HIGHLIGHTS SIX MONTHS YEARS ENDED AUGUST 31, EIGHT YEARS ENDED DECEMBER 31,

ENDED FEBRUARY MONTHS

29, 1996 ENDED

AUGUST 31,

109. (UNAUDITED) 1995 1994 D 1993 1992 1991 1990

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
110.SELECTED PER-SHARE DATA 111. 112. 113. 114. 115. 116.

117.Net asset value, beginning of period $ 9.980 $ 9.840 $ 10.090 $ 9.880 $ 9.780 $ 9.520 $ 9.490

118.Income from Investment Operations .208 .429 .443 .303 .490 .559 .562
Net interest income

119. Net realized and unrealized gain (loss) .060 .140 (.240) .210 .100 .260 .030

120. Total from investment operations .268 .569 .203 .513 .590 .819 .592

121.Less Distributions (.208) (.429) (.443) (.303) (.490) (.559) (.562)
From net interest income

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

123. Total distributions (.208) (.429) (.453) (.303) (.490) (.559) (.562)

124.Net asset value, end of period $ 10.040 $ 9.980 $ 9.840 $ 10.090 $ 9.880 $ 9.780 $ 9.520

125.TOTAL RETURN B, C 2.71% 5.95% 2.05% 5.25% 6.18% 8.85% 6.42%

126.RATIOS AND SUPPLEMENTAL DATA

127.Net assets, end of period (in millions) $ 886 $ 909 $ 1,083 $ 967 $ 659 $ 244 $ 59

128.Ratio of expenses to average net assets .54% A, .55% .47% .55% A .55% .55% .60%
E E E E

129.Ratio of net interest income to average net 4.20% A 4.38% 4.45% 4.55% A 4.95% 5.68% 5.90%
assets

130.Portfolio turnover rate 94% A 51% 44% 56% A 28% 59% 75%

</TABLE>

A ANNUALIZED
B 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).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D EFFECTIVE SEPTEMBER 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.
E 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 February 29, 1996 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Short-Intermediate Municipal Income Fund (the fund) (formerly
Spartan Short-Intermediate Municipal Fund) is a fund of Fidelity Union
Street 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. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which market quotations are not
readily available are valued at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes 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."
INTEREST INCOME. Interest income, which includes amortization of premium
and 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 interest 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 futures
and options transactions, market discount and losses deferred due to wash
sales, futures and options and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable 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.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $425,823,000 and $434,136,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% 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
$7,000 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse a portion of the fund's expenses. For the period,
the reimbursement reduced expenses by $56,000.
TO CALL FIDELITY

If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)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
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
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
Norman Lind, 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 *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
FIDELITY'S TAX-FREE BOND FUNDS
Aggressive Municipal
California Municipal Income
California Insured Municipal Income
High Yield Tax-Free
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Bond
New York Municipal Income
New York Insured Municipal Income
Ohio Municipal Income
Spartan Aggressive Municipal
(registered trademark)
Spartan Arizona Municipal Income
Spartan California Intermediate Municipal
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Intermediate Municipal
Spartan New York Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate Municipal
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE