SUPPLEMENT TO THE
SPARTAN(registered trademark) MUNICIPAL FUNDS'
PROSPECTUS
DATED OCTOBER 25, 1995
On February 20, 1996, Spartan Short-Intermediate Municipal Fund changed its
name to Spartan Short-Intermediate Municipal Income Fund, Spartan
Intermediate Municipal Fund changed its name to Spartan Intermediate
Municipal Income Fund, and Spartan Municipal Income Portfolio changed its
name to Spartan Municipal Income Fund.
Effective February 1, 1996, the following information replaces the similar
information found in the EXPENSES section beginning on page 6:
The operating expenses on page 7 are projections based on historical
expenses, and are calculated as a percentage of average net assets. FMR has
voluntarily agreed to temporarily limit the total operating expenses of
Spartan Municipal Money to .40% of average net assets. If this agreement
was not in effect, the management fee, other expenses, and total operating
expenses for Spartan Municipal Money would be .50%, .00%, and .50%,
respectively. Expenses eligible for reimbursement do not include interest,
taxes, brokerage commissions, or extraordinary expenses.
SPARTAN INTERMEDIATE MUNICIPAL
Operating Expenses
Management fee .55%
12b-1 fee None
Other expenses .00
%
Total fund operating expenses .55%
SPARTAN INTERMEDIATE MUNICIPAL
Examples
Account Account
open closed
After 1 year $ 6 $11
After 3 years $18 $23
After 5 years $31 $36
After 10 years $69 $74
The following information replaces the similar information found in the
INVESTMENT PRINCIPLES AND RISKS section beginning on page 16:
SPARTAN SHORT-INTERMEDIATE MUNICIPAL stresses preservation of
capital by investing in securities judged by FMR to be of equivalent
quality to those rated A or better by a nationally recognized rating
service. Although the fund can invest in securities of any maturity, the
fund, under normal conditions, maintains a dollar-weighted average maturity
of between two and five years. The fund normally invests so that 80% or
more of its income is free from federal income tax.
SPARTAN INTERMEDIATE MUNICIPAL focuses on securities rated A or above by
Moody's or S&P or, if unrated, judged by FMR to be of equivalent quality.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar-weighted average maturity of between three to 10 years
under normal conditions. FMR seeks to manage the fund so that it generally
reacts to changes in interest rates similarly to municipal bonds with
maturities between seven and 10 years. The fund normally invests so that at
least 80% of its assets are invested in municipal securities whose interest
is free from federal income tax.
SPARTAN MUNICIPAL INCOME invests primarily in municipal bonds judged by FMR
to be of investment-grade quality. Although the fund can invest in
securities of any maturity, FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to municipal bonds
with maturities between eight and 18 years. The fund normally invests so
that at least 80% of its income is free from federal income tax.
SPARTAN AGGRESSIVE MUNICIPAL invests at least 65% of its total assets in
securities rated A or lower by Moody's or S&P or, if unrated, judged by FMR
to be of equivalent quality. Although the fund can invest in securities of
any maturity, FMR seeks to manage the fund so that it generally reacts to
changes in interest rates similarly to municipal bonds of comparable
quality with maturities betwee n 12 and 20 ye ars. The fund normally
invests so that at least 80% of its assets are invested in municipal
securities whose interest is free from federal income tax.
The following information replaces that found on page 5:
SMU-96-3 (PAGE 2 OF 4) March 18, 1996
FUND STRATEGY RISK AND YIELD POTENTIAL
THE RISK LEVEL AND YIELD POTENTIAL OF MONEY MARKET AND BOND FUNDS DEPEND ON
THE QUALITY AND MATURITY OF THEIR INVESTMENTS. THE CHART BELOW PRESENTS
EACH FUND'S STRATEGY AND EXPLAINS ITS RISK AND YIELD POTENTIAL RELATIVE TO
THE OTHER FUNDS IN THIS FAMILY.
Spartan Municipal Invests primarily in Because this fund seeks
Money high-quality, short-term to maintain a stable
municipal securities $1.00 share price, it is
with an average the safest and lowest
maturity of 90 days or yielding fund in the
less. family.
(low risk graphic)
Spartan Invests primarily in With its emphasis on
Short-Intermediate investment-grade short maturities, this is
Municipal municipal securities the most conservative
while normally bond fund in the family.
maintaining an average
maturity of two to five
years.
(low to medium risk graphic)
Spartan Invests primarily in With its emphasis on
Intermediate investment-grade intermediate maturities,
Municipal municipal securities this is the moderate
while normally member of the family.
maintaining an average
maturity of between
three and 10 years.
(medium risk graphic)
Spartan Municipal Invests primarily in With its emphasis on
Income municipal securities of longer-term maturities,
investment-grade this is the moderately
quality. Although the aggressive member of
fund can invest in the family.
securities of any
maturity, FMR seeks to
manage the fund so
that it generally reacts
to changes in interest
rates similarly to
municipal bonds with
maturities between
eight and 18 years.
(low to medium risk graphic)
SMU-96-3 (PAGE 3 OF 4) March 18, 1996
FUND STRATEGY RISK AND YIELD POTENTIAL
THE RISK LEVEL AND YIELD POTENTIAL OF MONEY MARKET AND BOND FUNDS DEPEND ON
THE QUALITY AND MATURITY OF THEIR INVESTMENTS. THE CHART BELOW PRESENTS
EACH FUND'S STRATEGY AND EXPLAINS ITS RISK AND YIELD POTENTIAL RELATIVE TO
THE OTHER FUNDS IN THIS FAMILY.
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Spartan Aggressive Invests primarily in With its emphasis on
Municipal medium- and medium- and
lower-quality municipal lower-quality securities
securities. Although the with longer-term
fund can invest in maturities, this is the
securities of any most aggressive fund in
maturity, FMR seeks to the family.
manage the fund so
that it generally reacts
to changes in interest
rates similarly to
municipal bonds of
comparable quality with
maturities between 12
and 20 years.
(high risk graphic)
SMU-96-3 (PAGE 4 OF 4) March 18, 1996
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