FIDELITY UNION STREET TRUST, N-30D, 1996-10-15

FIDELITY UNION STREET TRUST
N-30D, 1996-10-15

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SPARTAN(registered trademark)

(registered trademark)
ARIZONA
MUNICIPAL
FUNDS

ANNUAL REPORT
AUGUST 31, 1996
CONTENTS

CHECK PAGE NUMBERS !!!

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PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING
STRATEGIES

SPARTAN ARIZONA MUNICIPAL INCOME FUND

4 PERFORMANCE

7 FUND TALK: THE MANAGER'S OVERVI
EW

10 INVESTMENT CHANGES

11 INVESTMENTS

15 FINANCIAL STATEMENTS

SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

19 PERFORMANCE

21 FUND TALK: THE MANAGER'S OVERVI
EW

23 INVESTMENT CHANGES

24 INVESTMENTS

27 FINANCIAL STATEMENTS

31 NOTES TO THE FINANCIAL STATEMENTS

34 REPORT OF INDEPENDENT ACCOUNTAN
TS

35 DISTRIBUTIONS

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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,
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.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first eight
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in both the stock and bond markets so far
this year. In 1995, both stock and bond markets posted strong results,
while the year before, stocks posted below-average returns and bonds had
one of the worst years in history.
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. A fund's total
return includes changes in 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 AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Income 4.71% 17.01%

Lehman Brothers Arizona Enhanced 4.73% n/a
Municipal Bond Index

Arizona Municipal Debt Funds Average 5.07% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
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 Enhanced Municipal Bond Index, which is a total return
performance benchmark for Arizona investment-grade municipal bonds with
maturities of at least one year. To measure how the fund's performance
stacked up against its peers, you can compare it to the Arizona municipal
debt funds average which reflects the performance of 35 mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. over the
past 12 months. Both benchmarks will include reinvested dividends and
capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Income 4.71% 8.65%

Lehman Brothers Arizona Enhanced 4.73% n/a
Municipal Bond Index

Arizona Municipal Debt Funds Average 5.07% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Arizona Municipal Income Fund on October 31, 1994,
shortly after the fund started. As the chart shows, by August 31, 1996, the
value of the investment would have grown to $11,909 - a 19.09% increase on
the initial investment. This assumes the fund was still owned on August 31,
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 $11,838 - a 18.38% 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
YEAR ENDED OCTOBER 11, 1994
AUGUST 31, (COMMENCEMENT
OF OPERATIONS) TO

1996 AUGUST 31, 1995

Dividend return 4.92% 5.34%

Capital appreciation
return -0.21% 6.39%

Total return 4.71% 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 on an average size account.
DIVIDENDS AND YIELD

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PERIODS ENDED AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.08(cents) 24.77(cents) 51.41(cents)

Annualized dividend rate 4.54% 4.68% 4.84%

30-day annualized yield 4.57% - -

30-day annualized tax-equivalent yield 7.53% - -

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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 $10.59 over
the past month, $10.49 over the past six months and $10.62 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 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.
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 DID THE FUND PERFORM, JON?
A. For the 12 months ended August 31, 1996, the fund had a total return of
4.71%. The Arizona municipal debt funds average, as tracked by Lipper
Analytical Services, returned 5.07% for the past year. Additionally, the
Lehman Brothers Arizona Enhanced Municipal Bond Index returned 4.73% for
the past year.
Q. WE UNDERSTAND THERE WERE SOME RECENT INVESTMENT POLICY CHANGES.
A. That's correct. As of June 24, 1996, the fund reserves the right to
invest up to 5% of its assets - down from one-third - in
below-investment-grade securities. The fund does not intend to seek out
lower-quality, below-investment-grade bonds. Instead, this change helps the
fund maintain a degree of flexibility under unusual circumstances. Further,
Fidelity now uses two additional agencies to determine the credit quality
of the fund's bonds. Ratings from Duff & Phelps Rating Co. and Fitch
Investors Service, L.P., are being employed, along with those from Moody's
Investors Service and Standard & Poor's that Fidelity had used previously.
Q. HOW HAVE MUNICIPALS FARED OVER THE PAST SIX MONTHS?
A. Nearly all bonds suffered a pullback primarily due to heightened
inflation fears. Several consecutive monthly employment reports indicated
that a surprising number of new jobs were created, which generally led
investors to fret that the economy was growing at a quicker-than-expected
pace. The main worry was that a fast-growing economy would translate into
higher inflation, which could prompt the Federal Reserve Board to raise
interest rates. Higher interest rates, of course, eat away at the value of
bond holdings. Despite this negative backdrop, municipals performed well
compared to Treasuries over the past six months as investors' fears of
radical tax reform - which caused munis to lag Treasuries during 1995 -
dissipated. During the period, there was also a number of bonds maturing
and being called, or paid off early, by their issuer, which strengthened
demand for municipals when this money was reinvested in the muni market.
Q. DURING THE PERIOD, YOU INCREASED THE OVERALL CREDIT QUALITY OF THE FUND.
WHAT PRECIPITATED THAT MOVE?
A. Credit spreads - which measure the difference in yields between bonds of
various credit qualities - narrowed, or lessened. As spreads narrowed, I
was able to sell some lower-rated bonds at attractive levels and replace
them with higher-rated bonds, without sacrificing much additional yield. By
upgrading the fund's holdings, it means that the fund carries less credit
risk - the risk that a borrower will not repay an obligation as promised.
Typically, I would buy the highest-rated insured bonds. But on occasion I
found selected opportunities to add uninsured bonds.
Q. WHICH LOWER-RATED BONDS DID YOU SELL AND WHAT TYPES OF HIGHER-RATED
BONDS DID YOU BUY?
A. I sold bonds issued by the Puerto Rico Electric Power Authority, rated
Baa1 by Moody's. Shareholders may recall that as a territory of the United
States, Puerto Rico can issue bonds free from local, state and federal
income taxes. I added to the fund's existing holdings in bonds issued by
the electric utility Salt River Project, which is rated AA by Moody's and
Aa by Standard & Poor's. In my view, the Salt River Project is a strong
credit and its debt service coverage - which is one indication of how able
an issuer is to pay off its debt - is quite good. Although there are some
deregulation efforts under way in Arizona, I believe that the Salt River
Project's superior competitive position could enable the utility to remain
financially strong.
Q. IN THE LAST SHAREHOLDER REPORT, YOU DISCUSSED HOW YOU HAD EMPHASIZED
INTERMEDIATE-TERM BONDS. DID YOU CONTINUE TO DO THAT OVER THE PAST SIX
MONTHS AS WELL?
A. Yes I did. The yield curve - a graphical representation of the yields
bonds of various maturities pay - flattened during the past six months.
When the yield curve flattened, longer-term bonds didn't reward investors
with as much additional yield over intermediate-term bonds as they did when
the curve was steeper. In my view, many longer-term bonds didn't offer
enough yield for the added risk, and intermediate bonds were more
attractive on a risk/return basis.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. In hindsight, I wish I bought more housing bonds. In rising
interest-rate environments, housing bonds have historically outperformed
other municipal securities.
Q. WHAT'S YOUR OUTLOOK?
A. With the presidential election coming up, there's the potential for tax
reform becoming an issue again. Should this occur, municipals may not be
able to continue their strong performance relative to Treasuries. But from
a technical standpoint, I'm cautiously optimistic. If supply remains at
current levels and demand holds firm, that would most likely be a positive
for the municipal market. But no matter what the direction of the municipal
market, I'll continue to concentrate on identifying securities that I think
have the potential to outperform 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: high current tax-free
income for Arizona residents
START DATE: October 11, 1994
SIZE: as of August 31, 1996,
more than $20 million
MANAGER: Jonathan Short,
since October 1995; manager,
Spartan Florida Municipal
Income, since May 1996;
Fidelity Advisor California
Municipal Income, since
February 1996; Spartan
California Municipal Income,
Spartan California
Intermediate Municipal
Income, Fidelity California
Insured Municipal Income,
Fidelity California Municipal
Income, and Fidelity
Minnesota Municipal Income,
since 1995; joined Fidelity in
1990
(checkmark)
JONATHAN SHORT ON ARIZONA'S
ECONOMY:
"Arizona's economy has
continued to be quite strong
as evidenced by personal
income growth which was
approximately 7.5% over the
past year. While down from
the 10% personal income
growth rate in the prior 12
months, Arizona handily
outpaced the nation as a
whole. What's more, the
state is replacing its reliance on
natural resources and tourism
- - which was the major part
of its economy in the '80s -
with a more diversified
economy that now includes
growing high tech,
manufacturing and
electronics industries.
"Specifically, the state's
semi-conductor industry has
become an important driver of
economic growth. If the
demand for computers slows
or the U.S. economy
weakens, Arizona's economy
should weaken. But even if
either of those events occur,
the state's economic
situation most likely will
continue to outpace the
national average."
SPARTAN ARIZONA MUNICIPAL INCOME FUND

INVESTMENT CHANGES

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 30.1 23.7

Special Tax 18.2 20.4

Escrowed/Prerefunded 11.8 9.7

Electric Revenue 11.6 18.0

Education 8.6 8.8

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 10.4 10.9

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 6.9 7.1

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. BEGINNING
WITH THE REPORTING CYCLE OF JUNE,1996, THE MODEL USED TO CALCULATE
DURATIONS MAY BE SLIGHTLY MODIFIED IN ORDER TO FURTHER REFINE THIS
INFORMATION. THESE CHANGES IN METHODOLOGY MAY PRODUCE ADJUSTMENTS IN
HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Aaa 58.5%
Aa, A 34.0%
Baa 3.0%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 4.5%
Aaa 49.1%
Aa, A 33.7%
Baa 8.4%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 8.8%
Row: 1, Col: 1, Value: 58.5
Row: 1, Col: 2, Value: 34.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 4.5
Row: 1, Col: 1, Value: 49.1
Row: 1, Col: 2, Value: 33.7
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
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 AUGUST 31, 1996
Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 95.5%
MOODY'S RATINGS PRINCIPAL VALUE
UNAUDITED (C) AMOUNT (NOTE 1)
ARIZONA - 94.8%
Arizona Health Facs. Auth. Hosp. Sys. Rev.
Rfdg. (St. Lukes Health Sys.) 7.25% 11/1/14
(Pre-Refunded to 11/1/03 @ 102) (d) Aaa $ 400,000 $ 452,000
Arizona Pwr. Auth. Pwr. Resources Rev. Rfdg.
(Hoover Uprating Proj.) 5.25% 10/1/17
(MBIA Insured) Aaa 100,000 91,625
Arizona State Univ. Research Pk. Dev. Rev.
5% 7/1/21 (MBIA Insured) Aaa 100,000 87,375
Arizona State Univ. Rev.:
Rfdg. 6% 7/1/06 A1 1,000,000 1,057,500
7% 7/1/15 (Pre-Refunded to
7/1/02 @ 101) (d) Aaa 500,000 560,000
Arizona Trans. Board Excise Tax Rev.
(Maricopa Reg'l. Area Road):
Rfdg.:
6% 7/1/03 (AMBAC Insured) Aaa 700,000 742,000
6.50% 7/1/04 (AMBAC Insured) Aaa 100,000 109,250
Series A:
0% 7/1/02 (FGIC Insured) Aaa 300,000 223,500
5.75% 7/1/04 (AMBAC Insured) Aaa 440,000 459,250
5.75% 7/1/05 (AMBAC Insured) Aaa 400,000 416,500
7% 7/1/05 (MBIA Insured)
(Pre-Refunded to 7/1/99 @ 102) (d) Aaa 1,000,000 1,088,750
Arizona Trans. Board Hwy. Rev. Rfdg.
Series A, 6% 7/1/00 Aa 250,000 261,875
Central Wtr. Conservation Dist. Contract Rev.:
Rfdg. (Central Arizona Proj.)
Series A, 5.50% 11/1/10 A1 375,000 374,531
(Spl. Term) 6% 11/1/00 A1 250,000 262,812
Chandler Gen. Oblig.:
6.375% 7/1/03 (MBIA Insured) Aaa 175,000 190,094
6.50% 7/1/10 (MBIA Insured) Aaa 200,000 217,750
6.50% 7/1/11 (MBIA Insured) Aaa 225,000 243,562
Chandler Wtr. & Swr. Rev. Rfdg.
5.90% 7/1/00 (FGIC Insured) Aaa 200,000 208,250
Cochise Union School Dist.# 68 (Sierra Vista )
Series B, 9% 7/1/02 (FGIC Insured) (e) Aaa 200,000 243,000
Glendale Ind. Dev. Auth. Edl. Facs. Rev. Rfdg.
(American Graduate School Int'l.)
6.55% 7/1/06 (Connie Lee Insured) Aaa 150,000 166,500
Maricopa County Cfts. of Prtn.
5.625% 6/1/00 Baa 450,000 454,500
Maricopa County Gen. Oblig. Rev. Rfdg.
6.25% 7/1/00 (FGIC Insured) Aaa 240,000 253,800
Maricopa County School Dist. #1 Rfdg.
(Phoenix Elementary) Second Series,
0% 7/1/05 (MBIA Insured) Aaa 500,000 315,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
UNAUDITED (C) AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Maricopa County School Dist. #3 Rfdg.
(Temple Elementary) 0% 7/1/08
(AMBAC Insured) Aaa $ 500,000 $ 258,750
Maricopa County School Dist. #6
(Washington Elementary) Series A,
5.375% 7/1/13 (AMBAC Insured) Aaa 300,000 290,625
Maricopa County Unified School Dist. #69
(Paradise Valley Proj. of 1994) Series B,
5.25% 7/1/15 (MBIA Insured) Aaa 300,000 282,375
Maricopa County Unified School Dist. #80
(Chandler) 6.60% 7/1/06 (FGIC Insured) Aaa 400,000 440,500
Maricopa County Unified School Dist. #97
(Deer Valley) Series A, 6% 7/1/05
(MBIA Insured) Aaa 200,000 211,500
Mesa Gen. Oblig. 5.70% 7/1/03
(FGIC Insured) Aaa 250,000 260,937
Mohave County Ind. Dev. Auth. Ind. Dev. Rev.
(North Star Steel Co. Proj.) Series B,
5.50% 12/1/20 AA- 250,000 232,500
Peoria Gen. Oblig. (1990 & 1994 Proj.) Series A:
5% 7/1/14 (AMBAC Insured) Aaa 365,000 330,325
5% 7/1/15 (AMBAC Insured) Aaa 390,000 347,587
Phoenix Arizona St. & Hwy. User Rev. Rfdg.
(Jr. Lien) 6.25% 7/1/11 (MBIA Insured) Aaa 250,000 265,000
Phoenix Arpt. Rev. Rfdg. Series D, 6.40% 7/1/12
(MBIA Insured) Aaa 810,000 849,488
Phoenix Civic Impt. Corp. Wtr. Sys. Rev. (Jr. Lien)
5.45% 7/1/19 Aa 500,000 465,625
Phoenix Gen. Oblig. Rfdg. Series A:
7.50% 7/1/08 Aa1 100,000 118,875
5% 7/1/19 Aa1 250,000 222,812
Pima County Swr. Rev. Rfdg. Series A,
5% 7/1/15 (FGIC Insured) Aaa 400,000 363,000
Pima County Unified School Dist. #1 Rfdg. (Tucson)
7.50% 7/1/10 (FGIC Insured) Aaa 250,000 297,188
Pinal County Ind. Dev. Auth. Solid Waste Disp. Rev.
(Browning Ferris Inds. Inc. Proj.) 5% 2/1/06 A2 250,000 239,063
Salt River Proj. Agric. Impt. & Pwr. Dist. Elec.
Sys. Rev. Rfdg:
Series A, 5.75% 1/1/07 Aa 300,000 312,000
Series B, 6.50% 1/1/04 Aa 400,000 435,500
Series B, 5.25% 1/1/19 (MBIA Insured) Aaa 100,000 91,750
Series C, 5% 1/1/13 Aa 150,000 137,438
Series C, 6.25% 1/1/19 Aa 500,000 513,750
Scottsdale Gen. Oblig. Rfdg.:
Series C, 6.375% 7/1/01 Aa1 250,000 268,125
5.50% 7/1/09 Aa1 100,000 100,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
UNAUDITED (C) AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Scottsdale Street & Hwy. User Rev. Rfdg.
5.50% 7/1/07 A1 $ 800,000 $ 815,000
Tempe Unified High School
Dist. #213 Rfdg. & Impt.:
7% 7/1/03 (FGIC Insured) Aaa 400,000 446,500
7% 7/1/08 (FGIC Insured) Aaa 310,000 356,113
Tucson Gen. Oblig. Rfdg. 6.75% 7/1/03
(FGIC Insured) Aaa 200,000 223,250
Tucson Ltd. Tax Rfdg. 7.50% 7/1/01 Aa 300,000 334,875
Tucson Street & Hwy. User Rev. Series A,
6% 7/1/10 (MBIA Insured) Aaa 400,000 421,000
Univ. of Arizona Rev. Rfdg. (Univ. Rev. Sys.)
6.375% 6/1/05 A1 400,000 430,000
Yuma County Hosp. Dist. #001
6.35% 11/15/07 A 265,000 286,863
19,127,988
PUERTO RICO - 0.5%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Rev. 5.50% 7/1/17 Baa1 100,000 94,625
GUAM - 0.2%
Guam Pwr. Auth. Series A, 6.30% 10/1/12 BBB 50,000 50,250
TOTAL MUNICIPAL BONDS
(Cost $19,235,282) 19,272,863
MUNICIPAL NOTES (A) - 4.5%
ARIZONA - 4.5%
Coconino County Poll. Cont. Corp. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.)
Series A, 4.00%, LOC Bank of America
Nat'l. Trust & Savings, VRDN (b) P-1 700,000 700,000
Pinal County Ind. Dev. Poll. Cont. Rev.
(Magna Copper Co. Proj.) 3.75%,
LOC Nat'l. Westminster Bank, VRDN P-1 200,000 200,000
TOTAL MUNICIPAL NOTES
(Cost $900,000) 900,000
TOTAL INVESTMENTS - 100%
(Cost $20,135,282) $ 20,172,863
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
2 Muni Bond Contracts Sep. 1996 $230,581 $ (3,268)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.1%
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 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.
5. Security was pledged to cover margin requirements for futures contracts.
At the period end, the value of securities pledged amounted to $243,000.
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 90.6% AAA, AA, A 89.4%
Baa 2.7% 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 invest- ment in securities, is as follows:
General Obligation 30.1%
Special Tax 18.2
Escrowed/pre-Refunded 11.8
Electric Revenue 11.6
Education 8.6
Water & Sewer 8.3
Transportation 5.8
Others (individually less than 5%) 5.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $20,135,282. Net unrealized appreciation aggregated
$37,581, of which $262,160 related to appreciated investment securities and
$224,579 related to depreciated investment securities.
The fund hereby designates approximately $11,683 as a capital gain dividend
for the purpose of the dividend paid deduction.
At August 31, 1996, the fund was required to defer $12,125 of losses on
futures contracts and options.
SPARTAN ARIZONA MUNICIPAL INCOME FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $20,135,282) - $ 20,172,863
See accompanying schedule

Cash 27,229

Interest receivable 215,684

TOTAL ASSETS 20,415,776

LIABILITIES

Payable for fund shares redeemed $ 4,000

Distributions payable 13,108

Accrued management fee 9,588

Payable for daily variation on futures contracts 875

TOTAL LIABILITIES 27,571

NET ASSETS $ 20,388,205

Net Assets consist of:

Paid in capital $ 20,259,293

Undistributed net interest income 2,053

Accumulated undistributed net realized gain (loss) 92,546
on investments

Net unrealized appreciation (depreciation) on 34,313
investments

NET ASSETS, for 1,948,997 shares outstanding $ 20,388,205

NET ASSET VALUE, offering price and redemption price $10.46
per share ($20,388,205 (divided by) 1,948,997 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 938,349

EXPENSES

Management fee $ 100,646

Non-interested trustees' compensation 72

Total expenses before reductions 100,718

Expense reductions (45,460) 55,258

NET INTEREST INCOME 883,091

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

Investment securities 252,719

Futures contracts (34,114) 218,605

Change in net unrealized appreciation (depreciation) on:

Investment securities (409,311)

Futures contracts (5,960) (415,271)

NET GAIN (LOSS) (196,666)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 686,425
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 11, 1994
AUGUST 31, (COMMENCEMENT
1996 OF OPERATIONS) TO
AUGUST 31, 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 883,091 $ 377,244
Net interest income

Net realized gain (loss) 218,605 114,520

Change in net unrealized appreciation (depreciation) (415,271) 449,584

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 686,425 941,348
FROM OPERATIONS

Distributions to shareholders (883,091) (377,244)
From net interest income

From net realized gain (227,134) -

TOTAL DISTRIBUTIONS (1,110,225) (377,244)

Share transactions 11,241,244 17,301,630
Net proceeds from sales of shares

Reinvestment of distributions 947,480 317,012

Cost of shares redeemed (4,827,267) (4,737,604)

Redemption fees 2,933 2,473

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,364,390 12,883,511
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 6,940,590 13,447,615

NET ASSETS

Beginning of period 13,447,615 -

End of period $ 20,388,205 $ 13,447,615

OTHER INFORMATION
Shares

Sold 1,053,176 1,696,864

Issued in reinvestment of distributions 89,057 30,535

Redeemed (457,132) (463,503)

Net increase (decrease) 685,101 1,263,896

</TABLE>

FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 11, 1994
AUGUST 31, (COMMENCEMENT
OF OPERATIONS) TO

1996 AUGUST 31, 1995

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.640 $ 10.000

Income from Investment Operations .514 .504
Net interest income

Net realized and unrealized gain (loss) (.022) .637

Total from investment operations .492 1.141

Less Distributions (.514) (.504)
From net interest income

From net realized gain (.160) -

Total distributions (.674) (.504)

Redemption fees added to paid in capital .002 .003

Net asset value, end of period $ 10.460 $ 10.640

TOTAL RETURN B 4.72% 11.74%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 20,388 $ 13,448

Ratio of expenses to average net assets .30% C .06% A,
C

Ratio of net interest income to average net assets 4.82% 5.54% A

Portfolio turnover rate 32% 56% A

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 share price over a
given period, reinvestment of its dividends (or income), and the effect of
the fund's $5 account closeout fee on an average size account. 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 returns and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Money Market 3.52% 7.07%

All Tax-Free Money Market Funds Average 3.09% 5.98%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
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 412 all tax-free money market funds with similar
objectives tracked by IBC Financial Data, Inc. during the period covered by
this report. (The periods covered by the IBC Financial Data, Inc. numbers
are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Arizona Municipal Money Market 3.52% 3.68%

All Tax-Free Money Market Funds Average 3.09% 3.21%

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>
8/28/95 11/27/95 2/26/96 6/3/96 9/2/96

Spartan Arizona Municipal 3.71% 3.81% 3.28% 3.42% 3.27%
Money Market

If Fidelity had not reimburse 3.31% 3.51% 2.98% 3.27% 3.12%
d
certain fund expenses

All Tax-Free 3.21% 3.30% 2.87% 3.04% 2.96%
Money Market Funds
Average

Spartan Arizona Municipal 6.14% 6.28% 5.41% 5.64% 5.39%
Money Market - Tax-equivale
nt

If Fidelity had not reimburse 5.48% 5.79% 4.91% 5.39% 5.14%
d
certain fund expenses

</TABLE>

Row: 1, Col: 1, Value: 3.71
Row: 1, Col: 2, Value: 3.21
Row: 2, Col: 1, Value: 3.81
Row: 2, Col: 2, Value: 3.3
Row: 3, Col: 1, Value: 3.28
Row: 3, Col: 2, Value: 2.87
Row: 4, Col: 1, Value: 3.42
Row: 4, Col: 2, Value: 3.04
Row: 5, Col: 1, Value: 3.27
Row: 5, Col: 2, Value: 2.96
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 Financial Data, Inc. 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

NOTE TO SHAREHOLDERS: Deborah Watson became Portfolio Manager of Spartan
Arizona Municipal Money Market on August 1, 1996
Q. DEB, THERE HAVE BEEN SOME SHARP FLUCTUATIONS IN MARKET SENTIMENT OVER
THE PAST 12 MONTHS. CAN YOU SUMMARIZE THEM FOR US?
A. Sure. The investment climate has undergone a dramatic shift during the
course of the fund's fiscal year. In July 1995, just before the period
began, the Federal Reserve took steps to stimulate economic growth by
lowering the rate banks charge each other for overnight loans - known as
the federal funds rate - one-quarter percentage point. That set the mood
for the fall. With the economy growing at a moderate rate and inflationary
pressures mild, most market participants anticipated further rate cuts.
Those expectations were confirmed in December, when the Fed lowered the
federal funds rate another one-quarter percentage point and again in
January 1996, bringing the federal funds rate down to 5.25%. As late as
mid-February, most market participants believed we had not yet reached the
end of the Fed's rate-cutting cycle.
Q. WHAT PROMPTED THE TURNAROUND?
A. A series of factors, really. The first was Fed Chairman Alan Greenspan's
congressional testimony in mid-February, which left the impression that the
economy was already responding
favorably to lower interest rates. That suspicion was confirmed with the
release of the February employment report, which came in several times
higher than most analysts' expectations. From March onward, it became
increasingly apparent that the economy was in no need of further stimulus
from lower interest rates.
Q. HOW DID YOU MANAGE THE FUND IN LIGHT OF CHANGING CONDITIONS?
A. When the period began, the fund had a fairly aggressive average maturity
of around 60 days. Often when interest rates are falling - as they were
then - it makes sense to lock in current rates by extending the fund's
average maturity. By the end of the calendar year, the fund's average
maturity was even longer - almost 75 days. Then as the economy began
showing signs of strength, putting upward pressure on rates, Scott Orr, the
fund's former manager, sought greater flexibility by lowering the fund's
average maturity. He did so by selling longer-term fixed-rate securities
and replacing them with variable rate demand notes, or VRDNs. VRDNs pay
interest at a rate that resets in line with prevailing rates at short-term
intervals. The fund's average maturity fell to 38 days at the end of April
and has remained in that general range ever since. It was 43 days at the
end of August.
Q. HOW DID THE FUND PERFORM?
A. Better than its average competitor. The fund's seven-day yield on August
31, 1996 was 3.26%, compared to 3.72% a year earlier. The latest yield was
the equivalent of a taxable yield of 5.37% for Arizona investors in the
combined 39.33% state and federal tax bracket. The fund's total return for
the year was 3.52%. That beat the average total return of 3.09% during the
same period for the all tax-free money market funds average, according to
IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. When I took over the fund at the beginning of August, most market
participants were preparing for an imminent rate increase. Since then,
economic indicators have been mixed. I still think a rate increase is
possible. However, if it occurs, I don't believe it will be more than
one-half percentage point over the next six months. As seasonal
fluctuations in supply create buying opportunities among longer-term
securities, I may from time to time extend the fund's average maturity.
Overall, however, the markets remain volatile, suggesting the need for a
cautious approach going forward. That probably means I'll aim for an
average maturity of 35 to 45 days.
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 August 31, 1996,
more than $82 million
MANAGER: Deb Watson,
since August 1996; manager,
Fidelity Connecticut
Municipal Money Market,
Spartan Connecticut
Municipal Money Market,
Fidelity Michigan Municipal
Money Market, since August
1996; Spartan Pennsylvania
Municipal Money Market,
since 1989; Fidelity
Municipal Money Market,
Capital Reserves: Municipal
Money Market, 1985-August
1996; Spartan California
Municipal Money Market,
1989-1996; Fidelity
California Municipal Money
Market, 1988-August 1996;
joined Fidelity in 1982
(checkmark)
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

INVESTMENT CHANGES

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

0 - 30 69 62 64

31 - 90 20 10 19

91 - 180 4 21 5

181 - 397 7 7 12

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

Spartan Arizona
Municipal Money Market 43 days 61 days 60 days

All Tax-Free Money
Market Funds Average * 55 days 46 days 53 days

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

Row: 1, Col: 1, Value: 65.0
Row: 1, Col: 2, Value: 23.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 12.0
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
Variable rate
demand notes
(VRDNs) 65%
Commercial
paper 23%
Tender bonds 0%
Municipal
notes 0%
Other 12%
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 17%
Tender bonds 1%
Municipal
notes 8%
Other 20%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

INVESTMENTS AUGUST 31, 1996
Showing Percentage of Total Value of Investment in Securities

MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - 97.6%
Arizona Ed. Loan Mktg. Corp. Series 1991 A, 3.55%,
LOC Dresdner Bank, VRDN (b) $ 200,000 $ 200,000
Arizona Health Facs. Auth. Rev. VRDN:
(Samcor 1986 Loan Pool-Samaritan Health Care):
3.50% (FGIC Insured) (BPA Chemical Bank) 900,000 900,000
3.55%, LOC Bank One, Arizona 1,500,000 1,500,000
(Voluntary Hosp. Federation Pooled Loan Prog.):
Series 1985 A, 3.50% (FGIC Insured)
(Liquidity Facility Citibank) 225,000 225,000
Series 1985 B, 3.50% (FGIC Insured)
(Liquidity Facility Citibank) 200,000 200,000
Arizona Trans. Auth. Rev. Bonds (Maricopa County Reg'l.
Area Road Fund) Series 1995A-95B, 4% 7/1/97
(AMBAC Insured) 1,000,000 1,001,168
Arizona Water Conservation Dist. Bonds:
Series B, 5.80% 11/1/96 500,000 501,735
6.90% 11/1/96 1,000,000 1,005,253
Chandler Ind. Dev. Auth. Multi-Family Hsg. Rev.
(Southpark Apts.) 3.50%, LOC Citibank, VRDN 625,000 625,000
Coconino County Poll. Cont. Corp. Poll. Cont. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.) Series 1994 A, 4%,
LOC Bank of America, VRDN (b) 4,150,000 4,150,000
Coconino Poll. Cont. Rev. (Tucson Elec. Pwr. Co. Proj.) Series A,
3.60%, LOC Canadian Imperial Bank of Commerce,
VRDN (b) 4,000,000 4,000,000
Gila County Ind. Dev. Auth. Rev. (Cobre Valley Hosp.)
Series 1995, 3.50%, LOC Bank One, VRDN 700,000 700,000
Glendale Ind. Dev. Auth. Rev. (Superior Bedding Co. Proj.)
Series 1994, 3.60%,
LOC Harris Bank & Trust Co., VRDN (b) 1,100,000 1,100,000
Glendale School Dist. #205 Participating VRDN,
Series 1996 F, 3.75% (FGIC Insured)
(Liquidity Facility Norwest Bank) (c) 2,600,000 2,600,000
Maricopa County Ind. Dev. Auth. Multi-Family Hsg.
Auth. Rev. VRDN (b):
(Privado Park Apt. Proj.) Series 1994 A, 3.60%,
LOC Bank One 1,300,000 1,300,000
(Shadow Creek Apt. Proj.) Series 1994 C, 3.60%,
LOC Bank One Arizona 500,000 500,000
Maricopa County Poll. Cont. Rev. Bonds
(Southern California Edison Co.):
Series 1985 E, 3.65%, tender 10/29/96 900,000 900,000
Series 1985 F:
3.70%, tender 10/23/96 1,300,000 1,300,000
3.65%, tender 12/2/96 1,000,000 1,000,000
Maricopa County School Impt. Bonds
(Washington Elementary School Dist. #6) Series 1996 A,
7% 7/1/97 (AMBAC Insured) 2,000,000 2,049,238
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Mohave County Ind. Dev. Auth. Ind. Dev. Rev. Bonds
(Citizens Utils.) Series 1993 E (b):
3.65%, tender 10/7/96 $ 1,100,000 $ 1,100,000
3.65%, tender 11/8/96 2,500,000 2,500,000
3.75%, tender 11/13/96 1,000,000 1,000,000
Peoria Dev. Auth. Participating VRDN, Series 1996 B,
3.75% (Liquidity Facility Norwest Bank) (c) 2,750,000 2,750,000
Phoenix Civic Impt. Corp. Arpt. Rev. Series 1995, 3.55%,
LOC Landesbank Hessen-Thuringen, VRDN (b) 3,900,000 3,900,000
Phoenix Gen. Oblig. Series 1995-2, 3.75%,
LOC Morgan Guaranty Trust Co., VRDN 900,000 900,000
Phoenix Ind. Dev. Auth. Ind. Dev. Rev. (Hypercom Proj.)
Series 1996, 3.65% LOC Bank One, Arizona, VRDN (b) 1,000,000 1,000,000
Phoenix Ind. Dev. Board Auth. Multi-Family Hsg. Rev., VRDN:
(Bell Square Apt. Proj.) Series 1995, 3.70%,
LOC General Electric Capital Corp. 2,000,000 2,000,000
(Lynwood Apt. Proj.) Series 1994, 3.50%, LOC FHLB 1,900,000 1,900,000
(Paradise Lakes Apt. Proj.) Series 1995, 3.70%,
LOC General Electric Capital Corp 500,000 500,000
(Venrana Palms Apt.) Series 1994, 3.55%,
LOC First Interstate Bank (b) 5,210,000 5,210,000
Pima County Ind. Dev. Auth., VRDN:
Multi-Family Hsg. Rev. (La Cholla Apt. Proj.)
Series 1996, 3.50%, LOC Texas Commerce Bank 2,000,000 2,000,000
Multi-Family Hsg. Rev. (Quail Ridge Apt.-B) 3.60%,
LOC Bank One (b) 1,400,000 1,400,000
(Tucson Elec. Pwr. Co. Proj.) Series 1990 A, 3.60%,
LOC Bankers Trust Co. (b) 1,700,000 1,700,000
Pima County School Dist. #1 Participating VRDN,
Series 1996 D, 3.75% (FGIC Insured) (Liquidity Facility
Norwest Bank NA, Minnesota) (c) 2,000,000 2,000,000
Pinal County Ind. Dev. Auth. Hosp. Rev.
(Casa Grande Medical Ctr. Proj.) Series 1995, 3.55%,
LOC Chemical Bank, VRDN 4,000,000 4,000,000
Pinal County Ind. Dev. Auth. Ind. Dev. Rev.
(Sunbelt Refining Co. LP Proj.) Series 1988, 3.65%,
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, 3.75%,
LOC Nat'l. Westminster Bank PLC, VRDN 2,000,000 2,000,000
Pinal County School Impt. Bonds (Casa Grande Union
High School Dist. #82 Proj.) Series 1996 B, 6.50% 7/1/97
(AMBAC Insured) 1,125,000 1,148,754
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Salt River Proj. Agricultural Impt. & Pwr. Dist.:
Bonds:
6.75% 1/1/97 $ 500,000 $ 504,925
7.50% 1/1/97 2,000,000 2,064,750
CP:
3.60% 9/17/96 2,000,000 2,000,000
3.70% 10/15/96 2,000,000 2,000,000
3.65% 10/22/96 1,300,000 1,300,000
3.60% 10/24/96 2,000,000 2,000,000
Tempe Gen. Oblig. Bonds 8.20% 7/1/97 235,000 242,952
Yavapi County Ind. Dev. Auth. Ind. Dev. Rev. Bonds
(Citizens Utils.) Series 1993 (b):
3.65%, tender 9/16/96 1,500,000 1,500,000
3.65%, tender 11/14/96 1,100,000 1,100,000
Yuma Ind. Dev. Auth. Ind. Rev., VRDN (b):
(Ardco Inc. Proj.) 3.60%,
LOC Harris Trust & Savings Bank 800,000 800,000
(Buchbinder Proj.) Series 1995, 3.60%,
LOC Harris Trust & Savings Bank 1,225,000 1,225,000
Yuma Muni. Prop. Corp. Subordinate Lien Bonds
Series 1996, 4.25% 7/1/97 (AMBAC Insured) 1,160,000 1,163,120
82,066,895
PUERTO RICO - 2.4%
Puerto Rico Gov't. Dev. Bank 3.60% 10/4/96, CP 2,000,000 2,000,000
TOTAL INVESTMENTS - 100% $ 84,066,895
Total Cost for Income Tax Purposes $ 84,067,076
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
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.
INCOME TAX INFORMATION
At August 31, 1996, the fund had a capital loss carryforward of
approximately $10,700 which will expire on August 31, 2004.
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value - $ 84,066,895
See accompanying schedule

Interest receivable 408,961

TOTAL ASSETS 84,475,856

LIABILITIES

Payable to custodian bank $ 10,793

Payable for investments purchased 1,164,627

Share transactions in process 527,939

Distributions payable 7,336

Accrued management fee 24,033

TOTAL LIABILITIES 1,734,728

NET ASSETS $ 82,741,128

Net Assets consist of:

Paid in capital $ 82,751,864

Accumulated net realized gain (loss) on investments (10,736)

NET ASSETS, for 82,751,864 shares outstanding $ 82,741,128

NET ASSET VALUE, offering price and redemption price $1.00
per share ($82,741,128 (divided by) 82,751,864 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 2,451,656

EXPENSES

Management fee $ 334,209

Non-interested trustees' compensation 256

Total expenses before reductions 334,465

Expense reductions (186,158) 148,307

NET INTEREST INCOME 2,303,349

REALIZED AND UNREALIZED GAIN (LOSS) (10,724)
Net realized gain (loss) on investment securities

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

NET GAIN (LOSS) (10,939)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,292,410

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 11, 1994
AUGUST 31, (COMMENCEMENT
1996 OF OPERATIONS) TO
AUGUST 31, 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 2,303,349 $ 984,652
Net interest income

Net realized gain (loss) (10,724) (12)

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

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,292,410 984,855
FROM OPERATIONS

Distributions to shareholders from net interest income (2,303,349) (984,652)

Share transactions at net asset value of $1.00 per share 118,384,316 104,017,553
Proceeds from sales of shares

Reinvestment of distributions from net interest income 2,241,032 967,585

Cost of shares redeemed (90,439,136) (52,419,486)

NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 30,186,212 52,565,652
RESULTING FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 30,175,273 52,565,855

NET ASSETS

Beginning of period 52,565,855 -

End of period $ 82,741,128 $ 52,565,855

</TABLE>

FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 11, 1994
AUGUST 31, (COMMENCEMENT)
OF OPERATIONS TO

1996 AUGUST 31, 1995

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 1.000 $ 1.000

Income from Investment Operations .035 .034
Net interest income

Less Distributions (.035) (.034)
From net interest income

Net asset value, end of period $ 1.000 $ 1.000

TOTAL RETURN B 3.52% 3.43%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 82,741 $ 52,566

Ratio of expenses to average net assets .22% C .06% A, C

Ratio of net interest income to average net assets 3.44% 3.91% A

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Arizona Municipal Income Fund (the income fund) is a fund of
Fidelity Union Street Trust. Spartan Arizona Municipal Money Market Fund
(the money market fund) 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 income
fund and the money market fund:
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
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
DISTRIBUTIONS TO SHAREHOLDERS -
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, market discount 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). Undistributed net interest income and
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.
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
involve, to varying degrees, risk of loss in excess of the futures
variation margin 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 $12,374,867 and $5,526,109, respectively.
The market value of futures contracts opened and closed during the period
amounted to $4,433,119 and $4,533,559, 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
$285 and $761 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.
(I) INCOME FUND. For the period, this expense limitation ranged from an
annual rate of .10% to .40% of average net assets and the reimbursement
reduced expenses by $44,726. Effective June 1, 1996, the fund's expense
limitation was eliminated.
(II) MONEY MARKET FUND. For the period, this expense limitation ranged from
an annual rate of .10% to .35% of average net assets and the reimbursement
reduced expenses by $184,361.
In addition, FMR has entered into arrangements on behalf of each fund with
each fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of each fund's
expenses. During the period, the income and money market funds' expenses
were reduced by $734 and $1,797, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and Fidelity Union Street
Trust II and the Shareholders of Spartan Arizona Municipal Income Fund and
Spartan Arizona Municipal Money Market Fund:
We have audited the accompanying statements of assets and liabilities of
Fidelity Union Street Trust: Spartan Arizona Municipal Income Fund (income
fund) and Fidelity Union Street Trust II: Spartan Arizona Municipal Money
Market Fund (money market fund), including the schedules of portfolio
investments as of August 31, 1996, the related statements of operations for
the year then ended, the statements of changes in net assets and the
financial highlights for the year then ended, and for the period October
11, 1994 (commencement of operations) to August 31, 1995. These financial
statements and financial highlights are the responsibility of the funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1996, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Arizona Municipal Income Fund and
Fidelity Union Street Trust II: Spartan Arizona Municipal Money Market Fund
as of August 31, 1996, the results of their operations for the year then
ended, the changes in their net assets and the financial highlights for the
year then ended, and for the period October 11, 1994 (commencement of
operations) to August 31, 1995, in conformity with generally accepted
accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, MA
October 4, 1996
DISTRIBUTIONS

The Board of Trustees of Spartan Arizona Municipal Income Fund voted to pay
on October 7, 1996 to shareholders of record at the opening of business on
October 4, 1996 a distribution of $.05 derived from capital gains realized
from sales of portfolio securities.
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)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)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
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
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
(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 - INCOME FUND
Sarah H. Zenoble, Vice President - MONEY MARKET FUND
Deborah F. Watson, Vice President - MONEY MARKET FUND
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
Thomas J. Simpson, Assistant Treasurer - MONEY MARKET FUND
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 *
ADVISORY BOARD
William O. McCoy
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 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

FIDELITY

(registered trademark)
EXPORT
FUND
ANNUAL REPORT
AUGUST 31, 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.

REPORT OF INDEPENDENT 28 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 29

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first eight
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in both the stock and bond markets so far
this year. In 1995, both stock and bond markets posted strong results,
while the year before, stocks posted below-average returns and bonds had
one of the worst years in history.
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 11.15% 58.22%

Export Fund (incl. 3% sales charge) 7.82% 53.47%

S&P 500(registered trademark) 18.73% 48.09%

Growth Funds Average 12.70% n/a

CUMULATIVE TOTAL RETURNS reflect the fund's actual performance over a set
period - in this case, one year, or since the fund started 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 500 Index - a widely
recognized, unmanaged index of common stocks. 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 662 mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. over the
past 12 months. Both benchmarks include reinvested dividends and capital
gains, if any, but do not reflect any sales charges, brokerage commissions,
or other costs of investing.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Export Fund 11.15% 27.12%

Export Fund (incl. 3% sales charge) 7.82% 25.11%

S&P 500 18.73% 22.80%

Growth Funds Average 12.70% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Export Fund on October 4, 1994, when the fund started
and a 3% sales charge was paid. As the chart shows, by August 31, 1996, the
value of the investment would have grown to $15,347 - a 53.47% increase on
the 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 $14,809 - a 48.09% 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

MARKET RECAP
The U.S. stock market rebounded
from a brief mid-summer
downturn, continuing to post
positive gains for the year ended
August 31, 1996. Although
confusion over the direction of
interest rates made for a volatile
market in the summer months, the
Standard & Poor's 500 Index
finished the 12 months with a return
of 18.73% - above its long-term
historical annual average of
about 12%. The stock market spent
much of the past year breaking
price and trading volume records
as strong corporate earnings
reports, large cash inflows into
mutual funds and widespread
optimism propelled equity share
prices higher. In addition, the period
was peppered with several
high-profile merger
announcements, especially in the
media, telecommunications and
technology sectors.
Smaller-company stocks posted
strong gains during the first few
months of 1996, and high-tech
firms involved in the networking
and software fields benefited from
strong earnings. Semiconductor
stocks, however, suffered during the
latter half of the period as a result
of overcapacity. In March,
better-than-expected employment
figures spooked the bond market,
pushing long-term interest rates
over 7%. Because smaller
companies tend to be more
adversely affected by the higher
borrowing costs brought on by
higher rates, their stock prices
trended downward in the spring.
Although larger-company stocks
took the lead from
small-company stocks in the
spring, the broad market posted
more consistent gains in late
summer.
An interview with Arieh Coll, Portfolio Manager of Fidelity Export Fund
Q. HOW DID THE FUND PERFORM, ARIEH?
A. For the year ended August 31, 1996, the fund had a total return of
11.15%. The S&P 500 Index returned 18.73% for this period, and the growth
funds average return - according to Lipper Analytical Services - was
12.70%. The fund underperformed during the first half of the fiscal year,
returning -6.96% compared to 16.43% for the S&P 500. Since then, it has
done well, returning 19.47%, compared with a return of 1.98% for the S&P
500. I urge shareholders to focus on the long term since the fund can
easily underperform over shorter periods of time.
Q. DID YOU MAKE ANY CHANGES TO YOUR STRATEGY DURING THE PERIOD?
A. In the past six months, I concentrated more of the fund's assets in a
limited number of holdings. I studied the average return of the fund's top
stocks over the life of the fund versus the return of the fund
itself. The top holdings turned out to be my best ideas in that they
significantly outperformed the fund as a whole. Therefore, in the first
half of the fund's fiscal year when many of these stocks dropped in price,
I bought more. When their prices recovered dramatically in the second half,
the fund appreciated rapidly.
Q. WHY WILL YOU BUY MORE OF A STOCK WHEN ITS PRICE IS FALLING?
A. I'm a firm believer that, over time, a company's stock price follows its
earnings. If, in my opinion, a company is building the value of its
business and executing a sound business strategy, sooner or later its stock
price will reflect that. I focus on finding undervalued companies. What I
can't control is when an investment might appreciate. Sometimes a stock's
price may decline even though the company is healthy. At such times, I love
to swoop in and buy more stock at lower prices.
Q. WHAT SIZE COMPANY DID YOU EMPHASIZE DURING THE PERIOD?
A. I emphasized smaller companies outside the S&P 500 because they were
cheaper and had better growth prospects. Slow growth among S&P 500
companies is likely to continue as profit margins of companies in the index
have peaked.
Q. IN WHICH INDUSTRIES HAVE YOU FOUND THESE SMALLER COMPANIES?
A. I have uncovered a number of very attractive investments associated with
the gaming industry. Cities and states
throughout the world need to raise additional revenue, but politicians are
afraid to raise taxes. Legalized gaming lets them bring in more tax revenue
without angering their voters. Two such companies that may benefit from
this trend are Sodak Gaming, which exports slot machines to South America,
and Scientific Games, which prints instant lottery tickets being sold in
England. A second big export industry is commercial aerospace. Boeing
predicts that they will double their production of aircraft in the next two
years. Therefore, the fund has invested in a number of suppliers to Boeing.
Q. DURING THE PERIOD, C-COR ELECTRONICS - A CABLE EQUIPMENT MAKER - LOST
VALUE. DOES THIS INDICATE A NEGATIVE TREND IN THE CABLE EQUIPMENT BUSINESS?
A. No. As I stated in earlier reports, I'm optimistic about the cable
equipment business. There are five billion people outside the United
States, but only about 90 million homes have cable TV. Unfortunately,
domestic orders for cable equipment slowed sharply at C-COR. I began
reducing the fund's position in C-COR, but not before its stock lost value
and the fund had to absorb a loss.
Q. IN YOUR OPINION, WHAT SHOULD INVESTORS EXPECT FROM EQUITIES GOING
FORWARD?
A. The stock market has appreciated 44.19% in the past two years and is no
longer undervalued. A significant correction of 10% or greater is more
likely. Nevertheless, such a decline will probably create
an opportune time for me to invest in solid companies whose stock prices
have been unfairly battered.
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 and services
START DATE: October 4, 1994
SIZE: as of August 31, 1996,
more than $267 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 AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

Anchor Gaming 6.0 0.0

Electronics for Imaging, Inc. 5.8 0.5

Sodak Gaming, Inc. 4.5 4.8

Foamex International, Inc. 4.2 0.0

Oregon Metallurgical Corp. 3.2 2.1

Penn National Gaming, Inc. 3.1 1.1

Zebra Technologies Corp. Class 3.0 0.0
A

Telemundo Group, Inc. Class A 2.6 1.6

Scientific Games Holdings Corp. 2.6 0.0

BJ Services Co. 2.2 0.3

TOP FIVE MARKET SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO

Technology 24.3 30.7

Media & Leisure 19.2 8.9

Basic Industries 11.8 10.6

Energy 8.9 1.6

Services 6.3 1.8

ASSET ALLOCATION
AS OF AUGUST 31, 1996 * AS OF FEBRUARY 29, 1996 **
Row: 1, Col: 1, Value: 6.0
Row: 1, Col: 2, Value: 1.9
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 4, Value: 43.0
Row: 1, Col: 1, Value: 2.7
Row: 1, Col: 2, Value: 1.6
Row: 1, Col: 3, Value: 45.3
Row: 1, Col: 4, Value: 50.0
Stocks 93.8%
Bonds 0.1%
Short-term
Investments 6.1%
NON-NORTH AMERICAN
INVESTMENTS 6.5%

Stocks 98.2%
Bonds 0.1%
Short-term
Investments 1.7%
NON-NORTH AMERICAN
INVESTMENTS 7.6%
*
**
NOTE: OF THE FUND'S 93.5% STAKE IN NORTH AMERICAN INVESTMENTS, 1.5% WAS
INVESTED IN CANADA AND 1.0% IN MEXICO ON AUGUST 31, 1996. ON FEBRUARY 29,
1996, 92.4% OF THE FUND'S ASSETS WAS INVESTED IN NORTH AMERICA, WHICH
INCLUDED A 7.5% STAKE IN CANADA AND 1.0% IN MEXICO.
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 93.8%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 3.5%
AEROSPACE & DEFENSE - 3.3%
Alliant Techsystems, Inc. (a) 5,400 $ 278,775
Aviall, Inc. 30,000 255,000
BE Aerospace, Inc. (a) 303,200 5,002,800
C A E Industries Ltd. 88,800 691,189
Rohr Industries, Inc. (a) 42,400 885,100
UNC, Inc. (a) 212,500 1,726,563
8,839,427
SHIP BUILDING & REPAIR - 0.2%
Avondale Industries, Inc. (a) 38,900 612,675
TOTAL AEROSPACE & DEFENSE 9,452,102
BASIC INDUSTRIES - 11.8%
CHEMICALS & PLASTICS - 5.2%
Applied Extrusion Technologies, Inc. (a) 400 3,800
Foamex International, Inc. (a) 716,000 11,142,750
IMC Global, Inc. 64,700 2,782,100
Scotts Co. Class A 1,000 18,750
13,947,400
IRON & STEEL - 2.5%
Hexcel Corp. (a) 241,700 4,259,963
Tubos De Acero De Mexico ADR (a) 220,000 2,420,000
6,679,963
METALS & MINING - 4.1%
IMCO Recycling, Inc. 24,500 388,938
Oregon Metallurgical Corp. (a) 289,100 8,600,725
Titanium Metals Corp. (a) 61,800 1,475,475
Tremont Corp. (a) 9,500 302,813
10,767,951
TOTAL BASIC INDUSTRIES 31,395,314
CONSTRUCTION & REAL ESTATE - 0.2%
BUILDING MATERIALS - 0.0%
Grupo Cementos Chihuahua Class B 5,000 6,401
CONSTRUCTION - 0.0%
American Homestar Corp. (a) 250 5,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE - CONTINUED
ENGINEERING - 0.1%
Stolt Comex Seaway SA (a) 16,000 $ 190,000
REAL ESTATE - 0.0%
Mego Financial Corp. (a) 23,300 131,063
REAL ESTATE INVESTMENT TRUSTS - 0.1%
Starwood Lodging Trust combined certificate (SBI) 7,000 266,000
TOTAL CONSTRUCTION & REAL ESTATE 599,339
DURABLES - 1.3%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Cummins Engine Co., Inc. 12,300 462,788
TRW, Inc. 100 9,250
472,038
CONSUMER DURABLES - 0.9%
Aristocrat Leisure Ltd. 1,003,000 2,518,939
TEXTILES & APPAREL - 0.2%
Timberland Co. Class A (a) 23,600 430,700
TOTAL DURABLES 3,421,677
ENERGY - 8.9%
ENERGY SERVICES - 5.9%
BJ Services Co. (a) 152,327 5,731,303
BJ Services Co. (warrants) (a) 10,000 153,750
Baker Hughes, Inc. 30,000 907,500
Cliffs Drilling Co. (a) 60,000 1,710,000
Energy Ventures, Inc. (a) 45,200 1,485,950
Halliburton Co. 19,800 1,041,975
Pool Energy Services Co. (a) 20,000 232,500
Schlumberger Ltd. 10,000 843,750
Seacor Holdings, Inc. (a) 15,100 687,050
UTI Energy Corp. 5,000 74,375
Weatherford Enterra, Inc. (a) 78,700 2,262,625
Western Atlas, Inc. (a) 8,800 534,600
15,665,378
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - 3.0%
American Exploration Co. (a) 74,400 $ 930,000
Belco Oil & Gas Corp. (a) 48,400 1,331,000
Chesapeake Energy Corp. (a) 10,400 559,000
Comstock Resources, Inc. (a) 39,700 416,850
Denbury Resources, Inc. (a) 1,300 8,266
Flores & Rucks, Inc. (a) 68,700 2,258,513
Forcenergy Gas Exploration, Inc. (a) 19,100 413,038
Newfield Exploration Co. (a) 2,400 107,100
Noble Affiliates, Inc. 23,000 922,875
Pacalta Resources Ltd. (a) 1,000 5,299
Swift Energy Co. (a) 43,000 1,069,625
8,021,566
TOTAL ENERGY 23,686,944
FINANCE - 2.8%
BANKS - 0.0%
Bank of New York Co., Inc. 400 11,150
CLOSED END INVESTMENT COMPANY - 0.6%
India Fund (a) 47,400 373,275
Malaysia Fund, Inc. 8,000 147,000
Morgan Stanley India Investment Fund, Inc. (a) 34,000 310,250
R.O.C. Taiwan Fund (SBI) 9,800 107,800
Taiwan Fund, Inc. 29,600 695,600
1,633,925
CREDIT & OTHER FINANCE - 2.2%
American Express Co. 45,700 1,999,375
Green Tree Financial Corp. 10,000 347,500
Southern Pacific Funding Corp. (a) 94,400 2,430,800
United Companies Financial Corp. 30,000 1,140,000
5,917,675
SAVINGS & LOANS - 0.0%
Security First Network Bank (a) 100 2,725
SECURITIES INDUSTRY - 0.0%
Trimark Financial Corp. 400 8,873
TOTAL FINANCE 7,574,348
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 3.2%
DRUGS & PHARMACEUTICALS - 0.7%
Calypte Biomedical Corp. (a)(c) 195,000 $ 1,950,000
Copley Pharmaceutical, Inc. (a) 100 1,100
Warner-Lambert Co. 200 11,900
1,963,000
MEDICAL EQUIPMENT & SUPPLIES - 0.5%
Nellcor, Inc. (a) 19,500 502,125
St. Jude Medical, Inc. (a) 20,400 731,850
1,233,975
MEDICAL FACILITIES MANAGEMENT - 2.0%
NovaCare, Inc. (a) 140,000 1,260,000
Oxford Health Plans, Inc. (a) 55,000 2,516,250
Tenet Healthcare Corp. (a) 500 10,500
U.S. Diagnostic Labs, Inc. (a) 160,000 1,560,000
5,346,750
TOTAL HEALTH 8,543,725
INDUSTRIAL MACHINERY & EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 1.5%
California Amplifier, Inc. (a) 166,500 2,081,250
Charter Power Systems, Inc. 40,000 930,000
Pinnacle Systems (a) 65,000 975,000
3,986,250
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Exide Corp. 400 10,650
POLLUTION CONTROL - 0.1%
Ogden Corp. 10,000 196,250
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 4,193,150
MEDIA & LEISURE - 19.2%
BROADCASTING - 5.1%
Ackerley Communications, Inc. 18,600 518,475
Central European Media Class C (a) 104,000 2,925,000
Grupo Radio Centro SA de CV sponsored ADR 13,700 107,888
Heartland Wireless Communications, Inc. (a) 36,100 762,613
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Infinity Broadcasting Corp. Class A 46,000 $ 1,259,250
PanAmSat Corp. (a) 35,900 996,225
Telemundo Group, Inc. Class A (a) 256,100 6,914,700
13,484,151
ENTERTAINMENT - 2.6%
Harveys Casino Resorts 11,800 203,550
Scientific Games Holdings Corp. (a) 274,900 6,872,500
7,076,050
LODGING & GAMING - 11.3%
Anchor Gaming (a) 292,300 15,966,888
Aztar Corp. (a) 78,800 866,800
ITT Corp. (a) 7,800 415,350
International Game Technology Corp. 30,000 611,250
Mirage Resorts, Inc. (a) 14,800 344,100
Penn National Gaming, Inc. (a)(c) 351,500 8,172,375
Rio Hotel & Casino, Inc. (a) 104,600 1,817,425
Sun International Hotels Ltd. Ord. (a) 16,500 781,688
Trump Hotels & Casino Resorts, Inc. (a) 1,700 41,013
WMS Industries, Inc. (a) 41,900 968,938
29,985,827
PUBLISHING - 0.2%
Hollinger International, Inc. Class A 40,100 436,088
TOTAL MEDIA & LEISURE 50,982,116
NONDURABLES - 0.4%
BEVERAGES - 0.1%
Pete's Brewing Co. (a) 25,200 226,800
HOUSEHOLD PRODUCTS - 0.3%
Church & Dwight Co., Inc. 1,000 21,125
Premark International, Inc. 50,000 912,500
933,625
TOTAL NONDURABLES 1,160,425
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PRECIOUS METALS - 2.4%
Getchell Gold Corp. (a) 16,317 $ 713,869
Newmont Mining Corp. 10,000 528,750
Stillwater Mining Co. (a)(b) 100,000 2,050,000
TVI Pacific, Inc. (a) 2,545,500 3,106,877
6,399,496
RETAIL & WHOLESALE - 6.1%
APPAREL STORES - 0.7%
Baby Superstore, Inc. 12,500 212,500
Charming Shoppes, Inc. (a) 139,400 932,238
Melville Corp. 10,100 426,725
TJX Companies, Inc. 6,400 204,800
1,776,263
GENERAL MERCHANDISE STORES - 0.1%
MacFrugals Bargains Closeouts, Inc. (a) 1,000 21,125
Michaels Stores, Inc. (a) 100 1,400
Woolworth Corp. (a) 16,200 344,250
366,775
RETAIL & WHOLESALE, MISCELLANEOUS - 5.3%
CML Group, Inc. 16,700 68,888
Lowe's Companies, Inc. 1,000 36,125
Office Depot, Inc. (a) 50,000 793,750
Sodak Gaming, Inc. (a) 230,000 11,960,000
Sunglass Hut International, Inc. (a) 13,700 215,775
Tuesday Morning Corp. (a) 77,500 1,036,563
14,111,101
TOTAL RETAIL & WHOLESALE 16,254,139
SERVICES - 6.3%
ADVERTISING - 0.6%
American List Corp. 31,600 888,750
Lamar Advertising Co. Class A (a) 1,000 28,000
Outdoor Systems, Inc. (a) 4,650 196,463
Universal Outdoor Holdings, Inc. (a) 12,000 366,000
1,479,213
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - CONTINUED
EDUCATIONAL SERVICES - 0.0%
Strayer Education, Inc. (a) 1,000 $ 15,625
LEASING & RENTAL - 0.4%
Mitcham Industries, Inc. (a) 182,500 1,140,625
SERVICES - 5.3%
Coach USA, Inc. (a) 500 11,875
Craig (Jenny), Inc. (a) 400 4,600
Franklin Quest Co. (a) 300 5,475
Lazare Kaplan International, Inc. (a) 215,700 3,559,050
Medaphis Corp. (a) 100,000 1,262,500
Pre-Paid Legal Services, Inc. (a) 49,300 733,338
Precision Response Corp. (a) 3,000 90,000
Telespectrum Worldwide, Inc. (a) 29,300 516,413
Zebra Technologies Corp. Class A (a) 372,600 7,871,175
14,054,426
TOTAL SERVICES 16,689,889
TECHNOLOGY - 24.2%
COMMUNICATIONS EQUIPMENT - 4.4%
Ascend Communications, Inc. (a) 50,000 2,618,750
Cisco Systems, Inc. (a) 46,000 2,426,500
IPC Information Systems, Inc. (a) 64,900 1,087,075
Level One Communications, Inc. (a) 11,600 249,400
Tellabs, Inc. (a) 20,800 1,318,200
Teledata Communications Ltd. 314,000 4,082,000
11,781,925
COMPUTER SERVICES & SOFTWARE - 12.9%
America Online, Inc. (a) 3,700 111,925
American Business Information, Inc. (a) 85,000 1,200,625
Broadway & Seymour, Inc. (a) 21,000 254,625
Brock International, Inc. (a) 217,500 1,305,000
CCC Information Services Group, Inc. 3,000 55,500
CompUSA, Inc. (a) 22,000 882,750
E Trade Group, Inc. 8,000 84,000
Electronics for Imaging, Inc. (a) 245,300 15,515,225
Information Resources, Inc. (a) 10,000 126,250
Lycos, Inc. (a) 16,700 112,725
Metromail Corp. (a) 7,800 136,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Modatech Systems, Inc. (a) 309,800 $ 77,450
Platinum Software Corp. (a) 200,000 1,975,000
Quality Systems, Inc. (a) 60,000 772,500
Saville Systems Ireland PLC sponsored ADR (a) 400 11,350
Scopus Technology, Inc. 60,000 1,095,000
Sema Group PLC 131,300 1,514,480
Softkey International, Inc. (a) 130,200 2,262,225
Software Spectrum, Inc. (a) 150,300 4,133,250
SunGard Data Systems, Inc. (a) 300 12,825
Systems Software Associates, Inc. 70,000 735,000
Vantive Corp. (a) 43,900 1,931,600
34,305,805
COMPUTERS & OFFICE EQUIPMENT - 1.9%
Adaptec, Inc. (a) 29,800 1,486,275
Bay Networks, Inc. (a) 60,000 1,650,000
International Imaging Materials, Inc. (a) 1,100 24,750
Lexmark International Group, Inc. 100,000 1,787,500
Scitex Ltd. Ord. 500 6,750
4,955,275
ELECTRONIC INSTRUMENTS - 0.0%
Gelman Sciences, Inc. (a) 2,900 84,100
ELECTRONICS - 5.0%
Actel Corp. (a) 24,900 398,400
Burr-Brown Corp. (a) 25,000 481,250
Cascade Communications Corp. (a) 18,000 1,226,250
Flextronics International (a) 75,000 1,425,000
Intel Corp. (warrants) (a) 122,700 5,138,063
Linear Technology Corp. 80,000 2,720,000
S-3, Inc. (a) 40,000 590,000
Sierra Semiconductor Corp. 105,300 1,224,113
13,203,076
TOTAL TECHNOLOGY 64,330,181
TRANSPORTATION - 1.0%
AIR TRANSPORTATION - 0.2%
AMR Corp. 7,000 574,000
RAILROADS - 0.1%
Bombardier, Inc. Class B 10,000 141,056
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.7%
Hunt (J.B.) Transport Services, Inc. 104,200 $ 1,888,625
TOTAL TRANSPORTATION 2,603,681
UTILITIES - 0.9%
CELLULAR - 0.1%
Mobile Telecommunications Technologies, Inc. (a) 10,000 138,750
TELEPHONE SERVICES - 0.8%
Telebras sponsored ADR 30,000 2,231,250
TOTAL UTILITIES 2,370,000
TOTAL COMMON STOCKS
(Cost $220,800,935) 249,656,526
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) - $ 400,000 324,000
REPURCHASE AGREEMENTS - 6.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.25%, dated
8/30/96 due 9/3/96 $ 16,162,423 16,153,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $237,251,185) $ 266,133,526
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 $2,374,000 or 0.9% of net
assets.
3. Affiliated company (see Note 7 of Notes to Financial Statements).
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $239,507,768. Net unrealized appre- ciation aggregated
$26,625,758, of which $37,005,531 related to appreciated invest- ment
securities and $10,379,773 related to depreciated investment securities.
The fund hereby designates approximately $8,731,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (including repurchase $ 266,133,526
agreements of $16,153,000) (cost $237,251,185) -
See accompanying schedule

Cash 335

Receivable for investments sold 6,281,976

Receivable for fund shares sold 11,471,537

Dividends receivable 18,839

Interest receivable 7,272

TOTAL ASSETS 283,913,485

LIABILITIES

Payable for investments purchased $ 9,192,684

Payable for fund shares redeemed 7,414,468

Accrued management fee 123,991

Other payables and accrued expenses 123,648

TOTAL LIABILITIES 16,854,791

NET ASSETS $ 267,058,694

Net Assets consist of:

Paid in capital $ 223,324,109

Accumulated undistributed net realized gain (loss) on 14,852,244
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 28,882,341
investments

NET ASSETS, for 17,985,001 shares outstanding $ 267,058,694

NET ASSET VALUE and redemption price per share $14.85
($267,058,694 (divided by) 17,985,001 shares)

Maximum offering price per share (100/97.00 of $14.85) $15.31

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INVESTMENT INCOME $ 1,322,897
Dividends

Interest 816,070

TOTAL INCOME 2,138,967

EXPENSES

Management fee $ 2,106,620

Transfer agent fees 1,005,861

Accounting fees and expenses 207,556

Non-interested trustees' compensation 1,504

Custodian fees and expenses 65,729

Registration fees 83,093

Audit 28,916

Legal 2,190

Interest 41,634

Miscellaneous 1,781

Total expenses before reductions 3,544,884

Expense reductions (77,571) 3,467,313

NET INVESTMENT INCOME (LOSS) (1,328,346)

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

Investment securities (including realized loss of 32,996,816
$2,742,714 on sales of investments in affiliated
issuers)

Foreign currency transactions 12,476 33,009,292

Change in net unrealized appreciation (depreciation) on:

Investment securities (28,431,291)

Assets and liabilities in foreign currencies (428) (28,431,719)

NET GAIN (LOSS) 4,577,573

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,249,227
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 4, 1994
AUGUST 31, (COMMENCEMENT
1996 OF OPERATIONS) TO
AUGUST 31, 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ (1,328,346) $ (410,125)
Net investment income (loss)

Net realized gain (loss) 33,009,292 13,240,066

Change in net unrealized appreciation (depreciation) (28,431,719) 57,314,060

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,249,227 70,144,001
FROM OPERATIONS

Distributions to shareholders from net realized gains (27,054,780) (61,452)

Share transactions 634,169,649 727,157,181
Net proceeds from sales of shares

Reinvestment of distributions 26,820,637 60,632

Cost of shares redeemed (873,552,833) (293,873,568)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (212,562,547) 433,344,245
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (236,368,100) 503,426,794

NET ASSETS

Beginning of period 503,426,794 -

End of period $ 267,058,694 $ 503,426,794

OTHER INFORMATION
Shares

Sold 44,667,554 59,469,006

Issued in reinvestment of distributions 2,020,210 6,125

Redeemed (64,106,331) (24,071,563)

Net increase (decrease) (17,418,567) 35,403,568

</TABLE>

FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 4, 1994
AUGUST 31, (COMMENCEMEN
T OF OPERATIONS)
TO

1996 AUGUST 31, 1995

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

Net asset value, beginning of period $ 14.22 $ 10.00

Income from Investment Operations

Net investment income (loss) (.05) D (.03) D

Net realized and unrealized gain (loss) 1.52 G 4.26

Total from investment operations 1.47 4.23

Less Distributions

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

Net asset value, end of period $ 14.85 $ 14.22

TOTAL RETURN B, C 11.15% 42.34%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 267,059 $ 503,427

Ratio of expenses to average net assets 1.03% 1.22% A

Ratio of expenses to average net assets after expense 1.00% E 1.22% A
reductions

Ratio of net investment income (loss) to average net assets (.39)% (.27)% A

Portfolio turnover rate 313% 245% A

Average commission rate F $ .0326

</TABLE>

A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 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 SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1996

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 fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are 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 foreign
currency transactions, passive foreign investment companies (PFIC), 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 undistributed net realized gain
(loss) on investments and foreign currency transactions may include
temporary book and tax basis differences that will reverse in a subsequent
period. Any taxable income or gain remaining at fiscal year end is
distributed in the following year.
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 mature in
60 days or less from the date of purchase for U.S. Treasury or Federal
Agency obligations.
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,045,972,686 and $1,284,430,403, 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 annual 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 August 31, 1996 FDC received
sales charges of $347,706 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .29%
of average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
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.
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 $462,119 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 $11,070,000 and $4,858,462,
respectively. The weighted average interest rate was 5.9%.
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
$70,785 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
custodian and transfer agent fees were reduced by $3,184 and $3,602,
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 VALUE
AFFILIATE COST COST INCOME
Brock International, Inc. $ 129,375 $ 758,157 $ - $ -
Calypte Biomedical Corp. - 51,250 - 1,950,000
NView Corp. - 95,833 - -
Penn National Gaming, Inc. 2,266,751 1,653,750 - 8,172,375
Printronix, Inc. 143,918 6,790,232 - -
TSX Corp. 1,780,063 6,519,061 - -
TOTALS $ 4,320,107 $ 15,868,283 $ - $10,122,375
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Fidelity Export Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Union Street Trust: Fidelity Export Fund, including the schedule
of portfolio investments, as of August 31, 1996, and the related statement
of operations for the year then ended, the statement of changes in net
assets and financial highlights for the year then ended and for the period
October 4, 1994 (commencement of operations) to August 31, 1995. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Fidelity Export Fund as of August 31, 1996,
the results of its operations for the year then ended, the changes in its
net assets and financial highlights for the year then ended and for the
period October 4, 1994 (commencement of operations) to August 31, 1995, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
DISTRIBUTIONS

The Board of Trustees of Fidelity Export Fund voted to pay on October 7,
1996, to shareholders of record at the opening of business on October 4,
1996, a distribution of $.37 per share derived from capital gains realized
from sales of portfolio securities.
A total of 4% of the dividends distributed during the fiscal year qualifies
for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
TO CALL FIDELITY

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TO WRITE FIDELITY

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 *
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E. Bradley Jones *
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Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
Brooklyn, NY
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(2_FIDELITY_LOGOS)SPARTAN(registered trademark)

GINNIE MAE
FUND
ANNUAL REPORT
AUGUST 31, 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.

REPORT OF INDEPENDENT 20 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 21

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in 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 AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Ginnie Mae 4.66% 38.59% 49.03%

Salomon Brothers GNMA Index 5.28% 42.59% n/a

GNMA Funds Average 3.79% 37.11% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on 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 of 15-
and 30- year fixed-rate securities backed by mortgage pools of the
Government National Mortgage Association (GNMA). 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 52 mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. over the
past 12 months. Both benchmarks include reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Ginnie Mae 4.66% 6.75% 7.27%

Salomon Brothers GNMA Index 5.28% 7.35% n/a

GNMA Funds Average 3.79% 6.51% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Ginnie Mae Fund on December 31, 1990, shortly after the
fund started. As the chart shows, by August 31, 1996, the value of the
investment would have grown to $14,876 - a 48.76% increase on the initial
investment. This assumes the fund was still owned on August 31, 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 $15,490 - a 54.90% 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,

1996 1995 1994 1993 1992

Dividend return 6.58% 7.85% 5.24% 6.51% 8.30%

Capital appreciation return -1.92% 3.42% -5.50% 1.08% 2.55%

Total return 4.66% 11.27% -0.26% 7.59% 10.85%

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 AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.36(cents) 31.96(cents) 64.82(cents)

Annualized dividend rate 6.37% 6.43% 6.50%

30-day annualized yield 6.99% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.90 over
the past month, $9.86 over the past six months and $9.97 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Bonds traded in a narrow range in
the summer months - reflecting
confusion over the direction of
interest rates - contrasting
sharply with early 1996 when bond
markets were rattled by
stronger-than-expected
economic statistics. For the 12
months ended August 31, 1996,
the Lehman Brothers Aggregate
Bond Index returned 4.11%. Even
though in January the Federal
Reserve Board lowered its target for
the federal funds rate - the rate
banks charge each other on
overnight loans - from 5.50% to
5.25%, the move largely was
taken into account by the bond
market. Surprisingly robust
employment reports in March
reversed market sentiment,
causing the yield on the 30-year
Treasury bond to rise to over 7%
- - a level not seen in over a year.
By June, however, soothing
comments from Federal Reserve
Board Chairman Alan Greenspan
helped ease the market's fears of
Fed interest-rate increases, and
the 30-year yield dropped back
below 7%. Although
investment-grade
mortgage-backed securities
participated in the overall
downturn in bond prices, they
have performed well in 1996
relative to other investment-grade
securities, as prepayment fears
eased in the face of a rising
mortgage-rate environment. To
illustrate, the Salomon Brothers
Mortgage Index returned 5.04%
during the period.
An interview with Kevin Grant, Portfolio Manager of Spartan Ginnie Mae Fund
Q. HOW HAS THE FUND PERFORMED, KEVIN?
A. For the 12 months ended August 31, 1996, the fund had a total return of
4.66%. That beat the 3.79% return of the GNMA funds average tracked by
Lipper Analytical Services over the same period. The Salomon Brothers GNMA
Index returned 5.28% over the 12 months.
Q. WHAT HELPED THE FUND PERFORM BETTER THAN THE LIPPER AVERAGE?
A. I believe many competitors had positioned their portfolios to be more
sensitive to interest rate changes than I had. When interest rates rose -
and bond prices fell - in the first part of 1996, their funds were more
adversely affected. I believe other managers had structured their funds
fairly aggressively because market sentiment reflected a belief that the
Federal Reserve Board was going to continue the trend of interest-rate
reductions it had pursued through much of last year. Beginning in February,
however, statistics came out indicating the economy was much stronger than
expected. Market sentiment shifted rapidly, turning to an expectation that
the Fed would increase short-term rates. As a result, interest rates went
up, and those funds that were positioned aggressively to benefit from
interest rate declines suffered. For my part, I have been consistent in
keeping the fund's duration - or interest-rate sensitivity - neutral. That
is, I don't structure the fund in anticipation of interest rate moves.
Instead, I seek to match the interest-rate risk profile of the Ginnie Mae
market by keeping the fund's duration in line with that of the Salomon
Brothers GNMA Index.
Q. HAVE YOU TARGETED ANY PARTICULAR SECURITIES OVER THE PAST SIX MONTHS?
A. I have, and one particular area was 15-year Ginnie Maes selling at deep
discounts. Fifteen-year discount mortgages have very little prepayment
risk, and have about the same price risk as 30-year current-coupon
mortgage-backed securities that have higher prepayment risk. Although I may
be sacrificing some yield by choosing the 15-year over the 30-year
mortgages, I found the 30-year issues to be overvalued. When the
interest-rate environment changes, 15-year discounts should be poised for
better price performance than 30-year mortgages.
Q. KEVIN, WE UNDERSTAND THAT THE FUND WILL UNDERGO SOME POLICY CHANGES . .
.
A. That's right. The fund will limit its investments to mortgage securities
issued by the Government National Mortgage Association (Ginnie Mae), other
U.S. government securities and U.S. government-related securities such as
futures contracts, repurchase agreements for U.S. government securities and
custodial receipts. Previously, the fund could invest up to 35% in non-U.S.
government securities; however, the fund will not be affected by this
change because only Ginnie Maes and other U.S. government and related
securities have been included in the portfolio for some time now.
Q. WHAT'S YOUR OUTLOOK?
A. The past few months have been characterized by relatively low volatility
in the bond markets in general, and that could be a window on what we'll
see over the next six months. New mortgages currently are being offered at
around 8%, but the average coupon in the mortgage market is about 7.5%. As
a result, there is very little prepayment risk, and mortgages are selling
at a discount. There doesn't appear to be any excessive speculation in the
market, and no sectors appear to be abnormally cheap or expensive. An
increase in volatility could create opportunities for value-oriented
investment strategies, but it could be that we've entered a long stretch
characterized by less volatility.
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.

COUPON DISTRIBUTION AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

5 - 5.99% 0.0 0.5

6 - 6.99% 26.8 20.9

7 - 7.99% 25.9 23.7

8 - 8.99% 24.6 29.9

9 - 9.99% 9.6 10.8

10 - 10.99% 3.5 3.0

11% and over 2.1 2.4

COUPON DISTRIBUTION SHOWS THE RANGE OF STATED INTEREST RATES ON THE FUND'S
INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS.
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 6.9 4.9

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 4.6 3.4

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE. EFFECTIVE
JUNE, 1996, THE MODEL USED TO CALCULATE DURATIONS MAY HAVE BEEN SLIGHTLY
MODIFIED IN ORDER TO FURTHER REFINE THIS INFORMATION. THESE CHANGES IN
METHODOLOGY MAY PRODUCE ADJUSTMENTS IN HISTORICAL DURATION FIGURES.
ASSET ALLOCATION
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Row: 1, Col: 1, Value: 7.5
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: 46.5
Mortgage-backed
securities ** 91.2%
Short-term
investments 8.8%
GNMA SECURITIES - 73.2%
Mortgage-backed
securities * 92.5%
Short-term
investments 7.5%
GNMA SECURITIES - 78.9%
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: 45.2
Row: 1, Col: 5, Value: 46.0
*
**
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 92.5%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FEDERAL HOME LOAN MORTGAGE CORP. - 6.1%
6 1/2%, 12/1/23 to 1/1/24 $ 9,176,158 $ 8,542,457
8 1/2%, 10/1/18 to 2/1/19 25,642 26,400
9%, 7/1/08 to 7/1/21 4,735,199 4,934,280
9 3/4%, 12/1/08 to 4/1/13 439,457 466,509
10%, 1/1/09 to 11/1/20 5,914,069 6,400,388
10 1/4%, 8/1/10 to 11/1/16 997,659 1,077,456
10 1/2%, 1/1/16 to 12/1/20 3,642,291 3,988,949
11 1/4%, 9/1/13 166,745 184,430
12%, 5/1/10 to 2/1/17 587,111 666,750
12 1/2%, 11/1/12 to 5/1/15 1,157,087 1,332,581
13%, 11/1/12 to 5/1/14 282,103 329,307
13 1/2%, 1/1/13 to 12/1/14 123,457 146,200
28,095,707
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 7.5%
6 1/2%, 1/1/24 to 2/1/26 34,414,262 31,839,706
11%, 8/1/10 585,099 648,471
12 1/4%, 6/1/15 8,511 9,640
12 1/2%, 11/1/13 to 5/1/21 1,355,428 1,556,496
13 1/4%, 9/1/11 480,416 561,933
34,616,246
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 78.9%
6%, 9/15/08 to 4/15/26 62,049,379 58,660,091
6 1/2%, 11/15/23 to 5/15/26 25,982,544 23,927,511
7%, 1/15/08 to 8/15/26 67,716,420 64,639,480
7 1/2%, 1/15/23 to 11/15/25 55,446,488 54,344,975
8%, 1/15/02 to 6/15/26 71,925,395 72,405,943
8 1/2%, 1/15/17 to 5/15/26 39,250,485 40,568,958
9%, 12/15/04 to 6/15/26 16,388,276 17,128,980
9 1/2%, 3/15/01 to 1/15/23 19,965,624 21,493,602
10 1/2%, 9/15/00 to 10/15/18 4,099,114 4,524,637
11%, 3/15/10 to 2/15/25 937,112 1,046,417
11 1/2%, 7/15/11 to 12/15/15 1,469,783 1,664,217
12%, 12/15/12 to 1/15/15 758,390 874,239
12 1/2%, 9/15/14 49,945 58,406
13%, 9/15/13 to 1/15/15 504,686 596,317
361,933,773
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $423,625,904) 424,645,726
REPURCHASE AGREEMENTS - 7.5%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.25%, dated
8/30/96 due 9/3/96 $ 34,364,034 $34,344,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $457,969,904) $ 458,989,726
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $465,841,566. Net unrealized depreciation aggregated
$6,851,840, of which $2,815,273 related to appreciated investment
securities and $9,667,113 related to depreciated investment securities.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $16,611,000 of which $15,877,000 and $734,000 will expire on
August 31, 2003 and 2004, respectively.

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (including repurchase $ 458,989,726
agreements of $34,344,000) (cost $457,969,904) -
See accompanying schedule

Receivable for investments sold 7,635,883

Interest receivable 2,706,526

TOTAL ASSETS 469,332,135

LIABILITIES

Payable to custodian bank $ 22,088

Payable for investments purchased 33,733,974

Payable for fund shares redeemed 267,077

Distributions payable 517,860

Accrued management fee 241,385

TOTAL LIABILITIES 34,782,384

NET ASSETS $ 434,549,751

Net Assets consist of:

Paid in capital $ 459,681,196

Distributions in excess of net investment income (1,669,986)

Accumulated undistributed net realized gain (loss) (24,481,281)
on investments

Net unrealized appreciation (depreciation) on 1,019,822
investments

NET ASSETS, for 44,443,977 shares outstanding $ 434,549,751

NET ASSET VALUE, offering price and redemption price $9.78
per share ($434,549,751 (divided by) 44,443,977 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INVESTMENT INCOME $ 32,265,284
Interest

EXPENSES

Management fee $ 2,834,108

Non-interested trustees' compensation 1,811

Total expenses before reductions 2,835,919

Expense reductions (112,648) 2,723,271

NET INVESTMENT INCOME 29,542,013

REALIZED AND UNREALIZED GAIN (LOSS) 2,511,311
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (12,599,928)
investment securities

NET GAIN (LOSS) (10,088,617)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 19,453,396
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 29,542,013 $ 27,978,635
Net investment income

Net realized gain (loss) 2,511,311 (3,361,454)

Change in net unrealized appreciation (depreciation) (12,599,928) 15,797,087

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 19,453,396 40,414,268
FROM OPERATIONS

Distributions to shareholders from net investment income (28,367,652) (28,060,611)

Share transactions 118,277,319 101,131,175
Net proceeds from sales of shares

Reinvestment of distributions 21,612,101 20,761,254

Cost of shares redeemed (116,062,214) (115,626,833)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 23,827,206 6,265,596
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 14,912,950 18,619,253

NET ASSETS

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

End of period (including distributions in excess of net $ 434,549,751 $ 419,636,801
investment income of $1,669,986 and $1,194,761,
respectively)

OTHER INFORMATION
Shares

Sold 11,835,639 10,429,984

Issued in reinvestment of distributions 2,168,538 2,153,968

Redeemed (11,645,992) (12,104,724)

Net increase (decrease) 2,358,185 479,228

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED AUGUST 31,

1996 1995 1994 C 1993 1992

SELECTED PER-SHARE DATA

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

Income from Investment .639 .690 .332 .800 .832
Operations
Net investment income

Net realized and unrealized (.181) .347 (.359) (.050) .236
gain (loss)

Total from investment .458 1.037 (.027) .750 1.068
operations

Less Distributions

From net investment income (.648) (.707) (.533) (.640) (.808)

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

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

Total distributions (.648) (.707) (.603) (.880) (.828)

Net asset value, end of period $ 9.780 $ 9.970 $ 9.640 $ 10.270 $ 10.400

TOTAL RETURN A, B 4.67% 11.28% (.25) 7.61% 10.86%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 434,550 $ 419,637 $ 401,018 $ 683,904 $ 837,588
(000 omitted)

Ratio of expenses to average .63% .65% .65% .41% .17%
net assets D D D

Ratio of expenses to average net .62% .65% .65% .41% .17%
assets after expense E
reductions

Ratio of net investment income 6.77% 7.30% 7.36% 7.63% 8.09%
to average net assets

Portfolio turnover rate 115% 229% 285% 241% 168%

</TABLE>

H 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).
I TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
J 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.
K 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).
L FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1996

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.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase for U.S. Treasury or Federal
Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
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. 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 $513,808,531 and $494,413,769 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
$8,819 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.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $24,661
under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Ginnie Mae Fund:
We have audited the accompanying statements of assets and liabilities of
Fidelity Union Street Trust: Spartan Ginnie Mae Fund, including the
schedule of portfolio investments, as of August 31, 1996, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian
and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Ginnie Mae Fund as of August 31,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
DISTRIBUTIONS

A total of .03% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
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)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)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)(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
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 *
ADVISORY BOARD
William O. McCoy
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
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity
Government
Spartan Short-Intermediate
Government
Spartan Short-Term Bond
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)

AGGRESSIVE MUNICIPAL
FUND
ANNUAL REPORT
AUGUST 31, 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 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 25 Notes to the financial statements.

REPORT OF INDEPENDENT 28 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in 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 AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Aggressive Municipal 5.47% 21.03%

Lehman Brothers Municipal Bond Index 5.24% n/a

High Yield Municipal Debt Funds Average 5.43% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year or since the fund started on
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 is a total return performance
benchmark for investment-grade municipal bonds with maturities of at least
one year. 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 43 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc., over the past 12 months. Both
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Aggressive Municipal 5.47% 5.87%

Lehman Brothers Municipal Bond Index 5.24% n/a

High Yield Municipal Debt Funds Average 5.43% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Aggressive Municipal Fund on April 30, 1993, shortly
after the fund started. As the chart shows, by August 31, 1996, the value
of the investment would have grown to $12,090 - a 20.90% increase on the
initial investment. This assumes the fund was still owned on August 31,
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 and
capital gains, if any, reinvested, the same $10,000 would have grown to
$11,990 - a 19.90% 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 29, 1993
(COMMENCEMEN
YEARS ENDED AUGUST 31, T OF OPERATIONS)
1996 1995 1994 TO AUGUST 31,
1993

Dividend return 5.78% 6.54% 5.84% 2.14%

Capital appreciation return -0.31% 1.42% -5.24% 3.49%

Total return 5.47% 7.96% 0.60% 5.63%

Dividends per share 4.62(cents) 28.17(cents) 56.64(cents)

Annualized dividend rate 5.44% 5.64% 5.66%

30-day annualized yield 5.53% - -

30-day annualized tax-equivalent 8.64% - -
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 $10.00 over
the past month, $9.90 over the past six months and $10.01 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

MARKET RECAP
Increased demand for municipal
bonds in the face of continued
low supply allowed municipal
bonds to outperform taxable debt
securities during the 12 months
ended August 31, 1996. While
the bond market in general has
been on a slow slide throughout
much of 1996, municipals have
held their ground better than
most. For the past 12 months, the
Lehman Brothers Municipal Bond
Index - a broad measure of the
municipal bond market - had a
total return of 5.24%. In
comparison, the Lehman
Brothers Aggregate Bond Index
- - a proxy for investment-grade
taxable bonds - had a total
return of 4.11%. Factors that
helped munis outperform
included a lack of supply of new
issues, strong demand for
municipal bonds from insurance
companies and the diminishing
likelihood of significant tax reform
in the near future. Like most
domestic bonds, munis were hurt
by stronger-than-expected signs
of strength in the economy earlier
in 1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the
point that munis ended the period
trading at expensive levels
relative to their taxable
counterparts.
An interview with Tanya Roy, Portfolio Manager of Spartan Aggressive
Municipal Fund
Q. HOW DID THE FUND PERFORM, TANYA?
A. The fund had a total return of 5.47% for the 12-month period ended
August 31, 1996. By comparison, the high-yield municipal debt fund's
average returned 5.43% for the same time period, according to Lipper
Analytical Services. In addition, the Lehman Brothers Municipal Bond Index
returned 5.24% for the past year.
Q. HOW WOULD YOU DESCRIBE THE INVESTING ENVIRONMENT DURING THE PAST SIX
MONTHS?
A. During the period, yields on municipals rose, on average, about 40 to 45
basis points. If you look at the performance of municipals versus
Treasuries for the same time period - which is a popular comparison -
municipals outperformed Treasuries by a healthy margin. There are a couple
of reasons for this. One is that, from a technical standpoint, there was a
relatively moderate supply of municipal bonds coming to market and healthy
demand from insurance companies and retail investors to absorb the new
supply. Another is the absence of concern about tax reform, which had
hindered the performance of municipals for a good part of 1995.
Q. WHY DID HIGH-YIELD MUNICIPALS OUTPERFORM INVESTMENT-GRADE MUNICIPALS
DURING THE PERIOD?
A. New issuance was fairly light, not only for the municipal market as a
whole, but also specifically in the high-yield sector, forcing available
high-yield bonds to be bid up. In addition, a number of sectors that are
well represented in the high-yield universe, such as health care, have
performed well due to improving financial and operational results.
Q. WHERE DID YOU FIND INVESTMENT OPPORTUNITIES DURING THE PAST SIX MONTHS?
A. In the health care industry, hospitals have been good performers, with
spreads remaining tight and the supply very low compared to what it has
been in the past. There's been a lot of consolidation in the hospital
sector, and there continues to be a fair amount of debate in the market
about the prognosis for the health care sector. Interestingly, the
volatility in the market has created opportunity for the fund. For example,
in one situation the fund benefited when the bonds of a hospital it owned
were tendered - or bought back by the issuer - at a favorable price. Health
care remained one of the largest sector holdings in the fund at the end of
the period.
Q. WHICH INVESTMENTS PROVED DISAPPOINTING?
A. The fund's performance was hurt by its interest in the Ford Heights,
Illinois, incinerator project. In March, the governor of Illinois signed a
bill that repealed a tax subsidy supporting three incinerator projects in
the state, including Ford Heights. Ford Heights later entered bankruptcy
proceedings. Though the fund no longer holds the bonds, the position did
hurt the fund's performance.
Q. TANYA, WE UNDERSTAND THERE HAS BEEN A CHANGE TO THE FUND'S INVESTMENT
POLICIES . . .
A. That's right. As of June 24, 1996, the fund changed some of its debt
quality policies. The fund is no longer required to invest 65% of its
holdings in securities equivalent in quality to those rated A or below.
This change allows me more flexibility to invest in higher-quality
securities if I believe the return potential of lower-quality securities is
not commensurate with the risk. The fund was introduced in 1993, but the
Tax Act of 1986 significantly reduced the supply of lower-quality municipal
bonds by preventing or reducing the ability of certain issuers or sectors
of the market to issue tax-exempt bonds. For a while, a substantial supply
of these kinds of bonds was available in the secondary market, but now that
is no longer the case. While the fund will still invest in lower-quality
securities, it is no longer required to do so to such a large extent.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. The performance of the municipal market should continue to be influenced
by light supply. That said, it is difficult to see municipals outperforming
Treasuries much more than they already have so far this year. Although
high-yield issuance has been lighter than I would like, I expect to
continue to invest in attractive high-yield opportunities for shareholders.
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.

TOP FIVE STATES AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STATES
6 MONTHS AGO

New York 10.9 8.7

California 9.9 12.7

Michigan 6.9 9.2

Pennsylvania 6.7 6.2

Texas 4.6 3.1

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO

Industrial Development 23.0 17.8

Electric Revenue 21.1 15.9

General Obligation 18.1 16.6

Health Care 14.3 15.8

Special Tax 6.7 7.7

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 15.0 14.7

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 AUGUST 31, 1996
6 MONTHS AGO

Years 7.1 7.2

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. EFFECTIVE
JUNE, 1996, THE MODEL USED TO CALCULATE DURATIONS MAY HAVE BEEN SLIGHTLY
MODIFIED IN ORDER TO FURTHER REFINE THIS INFORMATION. THESE CHANGES IN
METHODOLOGY MAY PRODUCE ADJUSTMENTS IN HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
11
Aaa 28.5%
Aa, A 18.6%
Baa 21.2%
Ba or B 10.2%
Non-rated 15.7%
Short-term
investments 5.8%
Aaa 26.8%
Aa, A 20.3%
Baa 18.5%
Ba or B 10.3%
Non-rated 18.3%
Short-term
investments 5.8%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 15.7
Row: 1, Col: 3, Value: 10.2
Row: 1, Col: 4, Value: 21.2
Row: 1, Col: 5, Value: 18.6
Row: 1, Col: 6, Value: 28.5
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
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 15.7% AND 16.5% OF THE FUND'S
INVESTMENTS ON AUGUST 31, 1996 AND FEBRUARY 29, 1996, RESPECTIVELY.
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 94.2%
MOODY'S PRINCIPAL
RATINGS AMOUNT
ALABAMA - 0.6%
Mobile Wtr. & Swr. Commissioners Wtr. & Swr.
Rev. Rfdg. 6.50% 1/1/09 A $ 500,000 $ 533,750
ARIZONA - 1.7%
Arizona Trans. Board Excise Tax Rev. (Maricopa
County Regional Area Road-B Proj.)
6% 7/1/03 (AMBAC Insured) Aaa 500,000 530,000
Navajo County Ind. Dev. Auth. (Stone Container
Corp. Proj.) 7.40% 4/1/26 (c) - 1,000,000 1,015,000
1,545,000
CALIFORNIA - 9.9%
California Pub. Works Board Lease Rev.
(Various California State Univ. Projs.)
Series B, 5.55% 6/6/10 A1 1,000,000 978,750
La Quinta Redev. Agcy. Tax Allocation Rfdg.
(Redev. Proj. Area #1) 7.30% 9/1/12
(MBIA Insured) Aaa 470,000 551,663
Madera County Ctfs. of Prtn. (Valley Children's
Hosp.) 6.25% 3/15/05 (MBIA Insured) Aaa 1,000,000 1,071,250
Riverside County Ctfs. of Prtn. (Air Force Village
West, Inc.) Series A, 8.125% 6/15/12 - 500,000 523,750
Sacramento Cogeneration Auth. Cogeneration
Proj. Rev. (Procter & Gamble Proj.)
6.50% 7/1/14 BBB- 500,000 508,125
Sacramento Pwr. Auth. Cogeneration Proj. Rev.
6.50% 7/1/07 BBB- 1,000,000 1,040,000
Santa Clara County Fin. Auth. Lease Rev.
(VMC Replacement Proj.) Series A,
7.75% 11/15/08 (AMBAC Insured) Aaa 1,000,000 1,208,750
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 1,216,119
South Orange County Pub. Fin. Auth. Spl.
Tax Rev. (Foothill Area) Series C,
8% 8/15/08 (FGIC Insured) Aaa 500,000 613,750
Tri-City Hosp. Dist. Rev. Rfdg. Series B,
5.375% 2/15/07 (MBIA Insured) (d) Aaa 1,000,000 986,250
Upland Ctfs. of Prtn. (San Antonio Commty.
Hosp.) 5.25% 1/1/08 A 500,000 471,875
9,170,282
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
COLORADO - 1.8%
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist):
6.625% 2/1/13 Baa $ 500,000 $ 505,000
6.625% 2/1/22 Baa 500,000 501,875
Colorado Springs Arpt. Rev. (Cap. Appreciation)
Series C, 0% 1/1/06 BBB+ 250,000 140,000
Denver City & County Arpt. Rev. Series A (c):
6.60% 11/15/97 Baa 250,000 255,625
6.90% 11/15/98 Baa 250,000 260,625
1,663,125
CONNECTICUT - 3.0%
Connecticut Health & Ed. Facs. Auth. Rev.:
Rfdg. (Quinnipiac College) Series D,
6% 7/1/13 BBB- 1,000,000 942,500
(New Britain Mem. Hosp.) Series A,
7.75% 7/1/22 BBB- 800,000 839,000
Connecticut Hsg. Fin. Auth. (Hsg. Mtg.
Fin. Prog.) Subseries B-1, 6.50% 5/15/18 Aa 200,000 203,750
Eastern Connecticut Resources Recovery Auth.
Solid Waste Rev. (Wheelabrator Lisbon Proj.)
Series A (c):
5.50% 1/1/14 A- 500,000 455,000
5.50% 1/1/20 A- 400,000 354,500
2,794,750
DISTRICT OF COLUMBIA - 3.2%
District of Columbia Gen. Oblig. Rfdg.:
Series A:
5.625% 6/1/02 Ba 200,000 198,000
5.75% 6/1/03 Ba 180,000 178,425
Series A-3, 5.60% 6/1/07 Ba 300,000 283,500
District of Columbia Redev. Land Agcy.
(Washington Sports Arena):
4.85% 11/1/97 Baa 1,000,000 997,500
5.625% 11/1/10 Baa 1,350,000 1,294,313
2,951,738
FLORIDA - 2.2%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A 1,000,000 1,096,250
Dade County Seaport Rfdg. 6.50% 10/1/08
(MBIA Insured) Aaa 850,000 940,313
2,036,563
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
GEORGIA - 4.2%
Cobb County School Dist. Unltd. Tax:
5% 2/1/97 Aa1 $ 250,000 $ 251,450
6% 2/1/02 Aa1 1,220,000 1,293,200
Georgia Muni. Elec. Pwr. Auth. Pwr. Rev. Rfdg.
Series Z, 5.50% 1/1/12 A 2,000,000 1,940,000
Savannah Econ. Dev. Auth. Ind. Dev. Rev.
(Stone Container Corp. Proj.)
7.40% 4/1/26 (c) - 400,000 405,500
3,890,150
ILLINOIS - 1.9%
Chicago O'Hare Int'l. Arpt. Rev. Rfdg. (2nd Lien)
(Gen. Arpt. Proj.) Series A, 6.375% 1/1/15
(MBIA Insured) Aaa 200,000 206,750
Metropolitan Pier & Expo Auth. Dedicated
Tax Rev. (Cap. Appreciation)
(McCormick Place Expansion Proj.)
Series A, 0% 6/15/09 (FGIC Insured) Aaa 1,000,000 473,750
Metropolitan Pier & Expo Auth. Rev. Rfdg.
(Cap. Appreciation) (McCormick Place
Expansion Proj.) Series A,
0% 6/15/08 (MBIA Insured) Aaa 1,155,000 586,163
Round Lake Beach Tax Increment Rev. Rfdg.
7.50% 12/1/13 - 500,000 508,750
1,775,413
INDIANA - 3.4%
Fishers Econ. Dev. Rev. 1st Mtg. (United Student
Funds, Inc.) 8.375% 9/1/14 - 1,500,000 1,556,250
Greensburg Ind. Econ. Dev. Rev. Rfdg.
(Kroger Co. Proj.) 7.25% 6/1/11 Ba1 1,000,000 1,043,750
Indiana Bond Bank Rev. (State Revolving Fund
Prog.) Series A, 7% 2/1/05 A 500,000 543,750
3,143,750
KENTUCKY - 3.4%
Kenton County Arpt. Board Arpt. Spl. Facs. Rev.
(Delta Airlines Proj.) Series A,
7.125% 2/1/21 (c) Baa3 2,000,000 2,077,500
Winchester Ind. Bldg. Rev. Rfdg. (Kroger Co.)
7.75% 7/1/12 Ba1 1,000,000 1,060,000
3,137,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
LOUISIANA - 1.3%
Hodge Util. Rev. (Stone Container Corp.)
9% 3/1/10 (c) - $ 200,000 $ 215,750
Port New Orleans Ind. Dev. Rev. Rfdg.
(Continental Grain Co. Proj.) 7.50% 7/1/13 BB- 1,000,000 1,030,000
1,245,750
MARYLAND - 1.3%
Baltimore County Poll. Cont. Rev. Rfdg.
(Bethlehem Steel Proj.) Series B, 7.50% 6/1/15 - 500,000 516,875
Maryland Energy Fing. Administration Ltd.
Oblig. Solid Waste Disp. Facs. Recycling
Rev. (Hagerstown Fiber Ltd. Partners 94)
9% 10/15/16 - 300,000 247,875
Maryland Health & Higher Edl. Facs.
Auth. Rev. Rfdg. (Howard County Gen. Hosp.)
5.50% 7/1/25 Baa1 500,000 430,625
1,195,375
MASSACHUSETTS - 3.8%
Massachusetts Health & Edl. Facs. Auth.
1st Mtg. Rev. (Fairview Extended Care)
Series A, 10.25% 1/1/21 - 1,000,000 1,128,750
Massachusetts Ind. Fin. Agcy. Rev:
(Evergreen Ctr., Inc.) 9.25% 11/1/11 - 435,000 465,994
(Massachusetts Biomedical Research)
Series A-1, 7.10% 8/1/99 A1 400,000 417,000
(Reeds Landing Proj.) 8.625% 10/1/23 - 500,000 530,625
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev.:
Series A, 5.45% 7/1/18 (AMBAC Insured) Aaa 500,000 459,375
Series D, 6% 7/1/06 A 500,000 510,000
3,511,744
MICHIGAN - 6.9%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25% 9/30/12 A 1,000,000 912,500
Flint Michigan Hosp. Bldg. Auth. Rev. Series A,
6% 7/1/06 Baa 500,000 476,875
Greater Detroit Resources Recovery Auth. Rev.
6.25% 12/13/06 (AMBAC Insured) Aaa 1,000,000 1,068,750
Michigan Hosp. Fin. Auth. Rev. Rfdg.
(Pontiac Osteopathic Hosp.) 6% 2/1/24 Baa1 500,000 458,125
Michigan Pub. Pwr. Agcy. Rev. Rfdg.
(Belle River Proj.) Series B, 5% 1/1/19 A1 1,000,000 858,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
MICHIGAN - CONTINUED
Michigan Strategic Fund Ltd. Oblig. Rev.
(Great Lakes Pulp & Fiber Proj.)
10.25% 12/1/16 (c) - $ 1,000,000 $ 766,250
Royal Oak Hosp. Fin. Auth. Rev. Rfdg.
(William Beaumont Hosp.) 6.25% 1/1/09 Aa 400,000 422,500
Tawas City Hosp. Fin. Auth. Hosp. Rev.
(Tawas St. Joseph Hosp. Proj.) Series A,
8.50% 3/15/12 - 400,000 412,000
Williamston Commty. School Dist. 6.25% 5/1/09
(MBIA Insured) Aaa 1,000,000 1,060,000
6,435,750
MINNESOTA - 0.6%
Western Minnesota Muni. Pwr. Agcy. Pwr. Supply
Rev. Rfdg. Series A, 6.25% 1/1/06
(AMBAC Insured) (d) Aaa 500,000 536,250
MISSISSIPPI - 1.0%
Claiborne County Poll. Cont. Rev. (Sys. Energy
Resource, Inc.) 6.20% 2/1/26 Ba1 1,000,000 946,250
MISSOURI - 0.6%
Kansas City Ind. Dev. Auth. Rev. (Kingswood
United Methodist Manor Proj.) Series 1993,
9% 11/15/13 - 500,000 537,500
NEBRASKA - 0.6%
Nebraska Pub. Pwr. Dist. Rev. Rfdg. (Elec. Sys.)
Series A, 6% 1/1/06 A1 500,000 518,750
NEVADA - 1.6%
Clark County Ind. Dev. Rev. (Southwest Gas Corp.)
Series A, 6.50% 12/1/33 (c) Baa3 1,000,000 962,500
Las Vegas Downtown Redev. Agcy. Tax Increment
Rev. (Sub. Lien Fremont St. Proj.) Series A,
6.10% 6/15/14 BBB+ 500,000 477,500
1,440,000
NEW JERSEY - 3.1%
Camden County Impt. Auth. Lease Rev.
(Holt Hauling & Warehousing) (c):
9.625% 1/1/11 - 600,000 592,500
9.875% 1/1/21 - 700,000 690,375
New Jersey Econ. Dev. Auth. Econ. Dev. Rev. Rfdg.
(Holt Hauling & Warehouse)
8.60% 12/15/17 (c) - 500,000 509,375
New Jersey Trans. Trust Fund Auth. Rfdg.
(Trans. Sys.) Series A, 6.50% 6/15/05
(AMBAC Insured) Aaa 1,000,000 1,097,500
2,889,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
NEW MEXICO - 2.9%
Albuquerque Arpt. Rev. Rfdg. 6.50% 7/1/08
(AMBAC Insured) (c)(d) Aaa $ 250,000 $ 260,000
Farmington Poll. Cont. Rev. (Pub. Svc. Co.
of New Mexico San Juan Proj.):
Series A:
6% 3/1/08 Ba2 1,790,000 1,738,538
6.50% 9/1/09 Ba2 250,000 250,088
Series X, 5.90% 4/1/07 Ba2 500,000 484,375
2,733,001
NEW YORK - 10.9%
Metropolitan Trans. Auth. Svc. Contract Transit
Facs. Rfdg.:
Series 5, 6.90% 7/1/05 Baa1 1,000,000 1,065,000
Series 7, 5.40% 7/1/06 Baa1 1,000,000 970,000
Nassau County Gen. Impt. Series T,
5.20% 9/1/04 Aaa 1,000,000 1,008,750
New York City Gen. Oblig.:
Series B, 5.60% 8/15/06 Baa1 350,000 336,438
Series D, 6.50% 2/15/05 Baa1 500,000 515,000
5.70% 8/15/02 Baa1 500,000 504,375
New York State Dorm. Auth. Rev. Rfdg.
(State Univ. Edl. Facs.) Series A,
5.50% 5/15/05 Baa1 750,000 741,563
New York State Energy Research & Dev. Auth.
Elec. Facs. Rev. (Long Island Lighting) Series A (c):
7.15% 12/1/20 Ba3 800,000 800,000
6.90% 8/1/22 Ba3 595,000 583,100
New York State Local Gov't. Assistance Corp.:
Rfdg. Series C, 5.50% 4/1/17 A 850,000 810,688
Series B, 7.50% 4/1/20
(Pre-Refunded to 4/1/01@102) (e) Aaa 1,000,000 1,128,750
New York State Tollway Auth. Hwy. & Bridge
Trust Fund Series B, 5.125% 4/1/15
(MBIA Insured) Aaa 1,000,000 923,750
New York State Tollway Auth. Svc. Contract Rev.
(Local Hwy. & Bridge) 5.90% 4/1/07 Baa1 250,000 252,500
New York State Urban Dev. Corp. Rev.
5.25% 1/1/07 Baa1 500,000 475,625
10,115,539
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
NEW YORK & NEW JERSEY - 0.6%
New York & New Jersey Port Auth. Spl. Oblig. Rev.
(Continental Airlines Corp.; Eastern Airlines,
Inc.; U.S. Air, Inc. - LaGuardia Proj.)
9.125% 12/1/15 (c) B2 $ 500,000 $ 557,500
NORTH CAROLINA - 2.6%
North Carolina Eastern Muni. Pwr. Agcy.
Pwr. Sys. Rev. Rfdg. Series C:
5.25% 1/1/04 A 1,000,000 973,750
7% 1/1/07 A 1,000,000 1,086,250
North Carolina Muni. Pwr. Agcy. Rev. Rfdg.
(No 1 Catawba Elec.) 6.25% 1/1/17
(AMBAC Insured) Aaa 300,000 307,500
2,367,500
OHIO - 1.0%
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Rev.
(Wtr. Cont. Loan Fund) Wtr. Quality Series,
5.50% 6/1/15 (MBIA Insured) Aaa 1,000,000 960,000
OREGON - 0.6%
Portland Swr. Sys. Rev. Series A, 6.25% 6/1/15 A1 500,000 516,875
PENNSYLVANIA - 6.7%
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 135,000 152,044
Series B, 7.50% 11/1/15 Ba1 165,000 179,025
Pennsylvania Convention Ctr. Auth. Rev. Rfdg.
Series A, 6.70% 9/1/14 (MBIA Insured) Aaa 1,500,000 1,631,250
Philadelphia Auth. for Ind. Dev. Rev. Rfdg.
(Philadelphia Arpt.) 7.75% 12/1/17 (c) - 805,000 841,225
Philadelphia Hosps. & Higher Ed. Facs. Auth.
Hosp. Rev. Rfdg. 5.95% 7/1/03 Baa1 500,000 500,625
Somerset County Hosp. Auth. Rev. (Health Care
1st Mtg.- GF Somerset Care, Inc.)
8.40% 6/1/09 - 515,000 544,613
Southern Pennsylvania Trans. Auth. Spl. Rev.
6.50% 3/1/05 (FGIC Insured) Aaa 1,000,000 1,093,750
Warren County Ind. Dev. Auth. Specialized
Dev. Rev. Rfdg. (Beverly Enterprises, Inc.)
8.75% 11/1/06 - 125,000 135,313
9%, 11/1/12 - 500,000 546,875
6,232,970
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL
RATINGS AMOUNT
TENNESSEE - 1.7%
Memphis-Shelby County Arpt. Auth. Arpt. Rev.
Rfdg. Series B, 6.50% 2/15/09
(MBIA Insured) (c) Aaa $ 500,000 $ 531,250
Metropolitan Gov't. Nashville & Davidson County
Wtr. & Swr. Rev. Rfdg. 6% 1/1/07
(MBIA Insured) Aaa 1,000,000 1,058,750
1,590,000
TEXAS - 4.3%
Alliance Arpt. Inc. Auth. Spl. Facs. Rev.
(American Airlines, Inc. Proj.)
7.50% 12/1/29 (c) Baa2 2,000,000 2,110,000
El Paso Property Fin. Auth. Single Family Mtg. Rev.
Series A, 8.70% 12/1/18
(GNMA Coll.) (c) Aaa 715,000 765,050
Harris County Cultural Ed. Facs. Fin. Corp.
Rev. Rfdg. (Space Ctr. Houston Proj.):
Series A, 9.25% 8/15/23 - 85,000 80,963
Series B, 0% 8/15/23 (b) - 215,000 54,288
Lower Neches Valley Auth. Ind. Dev. Corp. Swr.
Facs. Rev. (Mobil Oil Refining Corp. Proj.)
6.40% 3/1/30 (c) Aa2 1,000,000 1,011,250
4,021,551
UTAH - 1.0%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.
Series B, 5.75% 7/1/16 (MBIA Insured) (d) Aaa 1,000,000 941,250
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 1,068,180
WASHINGTON - 4.4%
Washington Pub. Pwr. Supply Sys.
(Nuclear Proj. #2) Rev.:
Rfdg. Series A, 0% 7/1/11 (MBIA Insured) Aaa 1,350,000 558,563
5.55% 7/1/10 (FGIC Insured) Aaa 2,700,000 2,602,125
5.40% 7/1/12 Aa 1,000,000 920,000
4,080,688
WYOMING - 0.2%
Sweetwater County Poll. Cont. Rev. Rfdg.
(Idaho Pwr. Co. Proj.) Series A,
6.05% 7/15/26 A3 200,000 196,250
TOTAL MUNICIPAL BONDS
(Cost $87,549,269) 87,280,444
MUNICIPAL NOTES (B) - 5.8%
MOODY'S PRINCIPAL
RATINGS AMOUNT
ALABAMA - 1.3%
Phenix City Ind. Dev. Board Environmental
Impt. Rev. (Mead Coated Board Proj.)
Series 1993-A, 3.75%, LOC Toronto
Dominion Bank, VRDN (c) A-1+ $ 1,200,000 $ 1,200,000
ARIZONA - 0.4%
Coconino County Poll. Cont. Corp. Poll. Cont.
Rev. (Arizona Pub. Svc. Co. Navajo Proj.)
Series 1994-A, 4%, LOC Bank of America
Nat'l. Trust & Savings, VRDN (c) P-1 400,000 400,000
KENTUCKY - 0.6%
Daviess County Solid Waste Disp. Facs. Rev.
(Scott Paper Co.) Series 1993-B, 3.85%,
VRDN (c) P-1 500,000 500,000
LOUISIANA - 1.3%
Calcasieu Parish, Inc. Ind. Dev. Board
Environmental Rev. Rfdg. (Citgo Petroleum Corp.)
4%, LOC Banque Nationale de Paris,
VRDN (c) VMIG 1 1,200,000 1,200,000
SOUTH CAROLINA - 0.4%
South Carolina Jobs Econ. Dev. Auth. Econ.
Dev. Rev. (Wellman, Inc. Proj.) Series 1991,
4.10%, LOC Wachovia Bank, VRDN (c) - 400,000 400,000
TEXAS - 0.3%
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) Series 1996,
4%, VRDN (c) P-1 300,000 300,000
VIRGINIA - 1.5%
King George County Ind. Dev. Auth. Exempt Facs.
Rev. (Birchwood Power Partners) Series 1996-A
4%, LOC Credit Suisse, VRDN (c) A-1+ 1,000,000 1,000,000
Southampton County Ind. Dev. Auth. Facs. Rev.
(Hadson Pwr. #11-Southampton Proj.)
Series 1990-A, 3.70%,
LOC Credit Suisse, VRDN (c) - 400,000 400,000
1,400,000
TOTAL MUNICIPAL NOTES
(Cost $5,400,000) 5,400,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $92,949,269) $ 92,680,444
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 purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
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 44.2% AAA, AA, A 43.5%
Baa 16.9% BBB 17.5%
Ba 8.5% BB 9.8%
B 0.6% B 3.2%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 15.7%. FMR has
determined that unrated debt securities that are lower quality account for
15.7% 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 23.0%
Electric Revenue 21.1
General Obligation 18.1
Health Care 14.3
Special Tax 6.7
Others (individually less than 5%) 16.8
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $92,950,259. Net unrealized depreciation aggregated
$269,815, of which $1,109,239 related to appreciated investment securities
and $1,379,054 related to depreciated investment securities.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $1,845,000 of which $1,047,000 and $798,000 will expire on
August 31, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $92,949,269) - $ 92,680,444
See accompanying schedule

Cash 142,514

Interest receivable 1,419,778

Redemption fees receivable 107

TOTAL ASSETS 94,242,843

LIABILITIES

Payable for investments purchased $ 2,742,572
Delayed delivery

Distributions payable 134,853

Accrued management fee 46,103

TOTAL LIABILITIES 2,923,528

NET ASSETS $ 91,319,315

Net Assets consist of:

Paid in capital $ 93,486,449

Accumulated undistributed net realized gain (loss) (1,898,309)
on investments

Net unrealized appreciation (depreciation) on (268,825)
investments

NET ASSETS, for 9,222,650 shares outstanding $ 91,319,315

NET ASSET VALUE, offering price and redemption price $9.90
per share ($91,319,315 (divided by) 9,222,650 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 5,307,199

EXPENSES

Management fee $ 508,913

Non-interested trustees' compensation 344

Total expenses before reductions 509,257

Expense reductions (1,548) 507,709

NET INTEREST INCOME 4,799,490

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

Investment securities 499,617

Futures contracts (75,461) 424,156

Change in net unrealized appreciation (depreciation) on:

Investment securities (1,155,623)

Futures contracts 66,431 (1,089,192)

NET GAIN (LOSS) (665,036)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 4,134,454
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 4,799,490 $ 3,988,362
Net interest income

Net realized gain (loss) 424,156 (1,540,072)

Change in net unrealized appreciation (depreciation) (1,089,192) 2,464,802

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,134,454 4,913,092
FROM OPERATIONS

Distributions to shareholders from net interest income (4,799,490) (3,988,362)

Share transactions 41,045,501 47,030,882
Net proceeds from sales of shares

Reinvestment of distributions 3,299,472 2,802,507

Cost of shares redeemed (26,961,145) (37,965,544)

Redemption fees 37,488 97,520

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 17,421,316 11,965,365
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 16,756,280 12,890,095

NET ASSETS

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

End of period $ 91,319,315 $ 74,563,035

OTHER INFORMATION
Shares

Sold 4,081,530 4,907,461

Issued in reinvestment of distributions 329,404 291,017

Redeemed (2,699,136) (3,987,462)

Net increase (decrease) 1,711,798 1,211,016

</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED AUGUST 31, APRIL 29, 1993
(COMMENCEMENT
OF OPERATIONS) TO

1996 1995 1994 D AUGUST 31, 1993

SELECTED PER-SHARE DATA

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

Income from Investment Operations .566 .602 .603 .209
Net interest income

Net realized and unrealized (.034) .125 (.564) .346
gain (loss)

Total from investment operations .532 .727 .039 .555

Less Distributions

From net interest income (.566) (.602) (.603) (.209)

From net realized gain - - (.010) -

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

Total distributions (.566) (.602) (.623) (.209)

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

Net asset value, end of period $ 9.900 $ 9.930 $ 9.790 $ 10.350

TOTAL RETURN B, C 5.48% 7.97% 0.61% 5.64%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 91,319 $ 74,563 $ 61,673 $ 17,267
(000 omitted)

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

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

Portfolio turnover rate 45% 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 INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1996

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 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
futures and options.
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
that 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
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 $55,101,602 and $36,262,313, respectively.
The market value of futures contracts opened and closed during the period
amounted to $3,734,765 and $6,014,666, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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
$885 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses). For the period, the reimbursement reduced the expenses by $461.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $1,087
under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Aggressive Municipal Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Union Street Trust: Spartan Aggressive Municipal Fund, including
the schedule of portfolio investments, as of August 31, 1996, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period then
ended and for the period April 29, 1993 (commencement of operations) to
August 31, 1993. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian
and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Aggressive Municipal Fund as of
August 31, 1996, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the
period then ended and for the period April 29, 1993 (commencement of
operations) to August 31, 1993, in conformity with generally accepted
accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
TO CALL FIDELITY

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Service Co.
Boston, MA
and
UMB Bank, n.a.
Kansas City, MO
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 Insured Municipal Income
California Municipal Income
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Income
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 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 Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemption 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)

INTERMEDIATE MUNICIPAL INCOME
FUND
ANNUAL REPORT
AUGUST 31, 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.

REPORT OF INDEPENDENT 27 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in 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 AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Intermediate Municipal Income 4.79% 19.14%

Lehman Brothers 1-17 Year Municipal Bond Index 4.52% n/a

Intermediate Municipal Debt Funds 3.89% n/a
Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year or since the fund started on
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 is a total return
performance benchmark for 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 140 mutual funds with
similar objectives tracked by Lipper Analytical Services over the past 12
months. Both benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Intermediate Municipal Income 4.79% 5.36%

Lehman Brothers 1-17 Year Municipal Bond Index 4.52% n/a

Intermediate Municipal Debt Funds Average 3.89% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Intermediate Municipal Income Fund on April 30, 1993,
shortly after the fund started. As the chart shows, by August 31, 1996, the
value of the investment with dividends reinvested would have grown to
$11,884 - an 18.84% increase on the initial investment. This assumes the
fund was still owned on August 31, 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 and capital gains, if any, reinvested,
the same $10,000 would have grown to $11,990 - a 19.90% 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
(COMMENCEMEN
T OF OPERATIONS)
TO

1996 1995 1994 AUGUST 31, 1993

Dividend return 4.90% 5.26% 4.99% 1.82%

Capital appreciation return -0.11% 2.23% -4.48% 3.39%

Total return 4.79% 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 AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.07(cents) 24.30(cents) 48.59(cents)

Annualized dividend rate 4.72% 4.79% 4.80%

30-day annualized yield 4.64% - -

30-day annualized tax-equivalent yield 7.25% - -

</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 $10.15 over
the past month, $10.06 over the past six months and $10.13 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

MARKET RECAP
Increased demand for municipal
bonds in the face of continued low
supply allowed municipal bonds to
outperform taxable debt securities
during the 12 months ended
August 31, 1996. While the bond
market in general has been on a
slow slide throughout much of
1996, municipals have held their
ground better than most. For the
past 12 months, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 5.24%. In comparison, the
Lehman Brothers Aggregate Bond
Index - a proxy for
investment-grade taxable bonds
- - had a total return of 4.11%.
Factors that helped munis
outperform included a lack of
supply of new issues, strong
demand for municipal bonds from
insurance companies and the
diminishing likelihood of
significant tax reform in the near
future. Like most domestic bonds,
munis were hurt by
stronger-than-expected signs of
strength in the economy earlier in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the point
that munis ended the period
trading at expensive levels
relative to their taxable
counterparts.
An interview with Norm Lind, Portfolio Manager of Spartan Intermediate
Municipal Income Fund
Q. NORM, HOW DID THE FUND PERFORM?
A. It outpaced its peers. For the year ended August 31, 1996, the fund had
a total return of 4.79%. That beat the intermediate municipal debt funds
average, which returned 3.89% for the same period, as tracked by Lipper
Analytical Services. The Lehman Brothers 1-17 Year Municipal Bond Index
returned 4.52% for the same period.
Q. WHAT FACTORS HELPED THE FUND OVER THE PAST SIX MONTHS?
A. The fund's coupon and call structure played an important role.
Throughout the past year or so, I've been a buyer of premium bonds. The
premium - or above-par - price gives the bond DE MINIMIS protection, which
in the municipal market means that the bond is protected from unfavorable
tax treatment that can occur during particular market environments. The
non-callable feature helps the bond perform when rates drop because the
bond cannot be called away prior to maturity by its issuer.
Q. OVER THE PAST SIX MONTHS, YOU UPGRADED THE OVERALL CREDIT QUALITY OF THE
FUND, PRIMARILY BY SELLING SOME LOWER-QUALITY BONDS AND REPLACING THEM WITH
HIGHER-QUALITY BONDS. WHAT PRECIPITATED THAT ACTION?
A. Credit spreads - which measure the difference between yields on
securities of the same maturity but with different credit qualities - were
quite narrow. When spreads are narrow, investors aren't rewarded with much
additional yield for buying lower-quality bonds. Additionally, because
spreads were narrow, I was able to sell some of our lower-quality holdings
at fairly attractive levels. The net result of selling some lower-quality
bonds and replacing them with higher-quality securities was that I was able
to upgrade the overall credit quality of the fund without sacrificing much
yield.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Yes, I'd have to say that the fund's underweighting in California bonds
was one of my biggest disappointments during this period. California bonds
performed well as the state's economy rebounded, Orange County emerged from
bankruptcy and the state's debt received credit upgrades.
Q. WE UNDERSTAND THERE WERE SOME INVESTMENT POLICY CHANGES . . .
A. As of June 24, 1996, the fund changed some of its debt quality policies
as part of the standardization of quality policies for our fixed-income
funds. The restriction limiting the fund's investments in BBB rated bonds -
the lowest tier of investment-grade securities - to 40% has been
eliminated. This change allows the fund increased flexibility to invest in
the lowest tier of investment-grade bonds without significantly increasing
the risk of the fund. Further, Fidelity now uses two additional agencies to
determine the credit quality of the fund's bonds. Ratings from Duff &
Phelps Rating Co. and Fitch Investors Service, L.P., may be used, along
with those from Moody's Investor's Service and Standard & Poor's that had
been used previously.
Q. LOOKING AHEAD, NORM, WHAT DO YOU SEE ON THE HORIZON FOR THE MUNICIPAL
BOND MARKET?
A. I think some cautious optimism is in order right now. The level of
municipal yields, as a percentage of Treasury yields, is at the lower end
of its historical range. That suggests that municipals are at fair to
slightly high levels. Another reason for a bit of caution is that we could
see renewed talk of tax reform as we head into the heat of the campaign
season. Given all of that, I believe that the fund's structure is on target
for providing value over the long term, and I intend to maintain its
emphasis on premium, non-callable bonds.
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 by investing in
higher-grade and upper-grade
securities
START DATE: April 26, 1993
SIZE: as of August 31, 1996,
more than $216 million
MANAGER: Norm Lind, since
1995; manager, Fidelity New
York Insured Municipal
Income Fund, since 1994;
Fidelity Advisor
Short-Intermediate Municipal
Income, Spartan New York
Municipal Income, Spartan
Short-Intermediate Municipal
Income, Spartan New York
Intermediate Municipal
Income, since 1995; Fidelity
New York Municipal
Income, since 1993; joined
Fidelity in 1986
(checkmark)
NORM LIND ON THE FUND'S TEXAS
HOLDINGS:
"At the end of the period,
bonds issued in Texas
accounted for the fund's
largest state concentration. A
large majority of these are
issued by the Permanent
School Fund (PSF), which is
an agency established as a
financing mechanism for the
school districts in Texas. The
bonds issued by this entity are
backed by impressive
collateral. Collateral refers to
the assets pledged to a lender
until a loan is repaid. If the
borrower defaults, PSF will
step into the role of the issuing
school district and pay the
obligation. PSF's collateral
exceeds by many times its
outstanding debt. In our view,
that and other factors makes
the issuer very strong from a
credit perspective."
INVESTMENT CHANGES

TOP FIVE STATES AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Texas 19.2 17.8

California 13.1 11.3

Colorado 10.1 9.3

Alaska 6.1 5.3

New York 5.5 5.2

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

General Obligation 30.0 31.4

Education 16.1 15.3

Transportation 11.0 10.2

Special Tax 9.7 8.1

Electric Revenue 7.7 5.5

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 7.8 7.7

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 AUGUST 31, 1996
6 MONTHS AGO

Years 6.0 6.2

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. EFFECTIVE
JUNE, 1996, THE MODEL USED TO CALCULATE DURATIONS MAY HAVE BEEN SLIGHTLY
MODIFIED IN ORDER TO FURTHER REFINE THIS INFORMATION. THESE CHANGES IN
METHODOLOGY MAY PRODUCE ADJUSTMENTS IN HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Row: 1, Col: 1, Value: 4.9
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 20.6
Row: 1, Col: 5, Value: 36.0
Row: 1, Col: 6, Value: 37.0
Row: 1, Col: 1, Value: 10.1
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 19.1
Row: 1, Col: 5, Value: 34.5
Row: 1, Col: 6, Value: 33.3
Aaa, Aa, A 73.8%
Baa 20.6%
Caa 0.0%
Non-rated 0.7%
Short-term
investments 4.9%
Aaa, Aa, A 69.3%
Baa 19.1%
Caa 1.0%
Non-rated 0.5%
Short-term
investments 10.1%
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 95.1%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
ALASKA - 6.1%
North Slope Borough (Cap. Appreciation)
Series A:
0% 6/30/01 (MBIA Insured) Aaa $ 12,000,000 $ 9,450,000
0% 6/30/02 (MBIA Insured) Aaa 3,950,000 2,947,688
0% 6/30/03 (MBIA Insured) Aaa 1,500,000 1,057,500
13,455,188
ARIZONA - 4.4%
Arizona Trans. Board Excise Tax Rev.:
(Maricopa County Reg'l Road-A Proj.)
(Cap. Appreciation) Series A,
0% 7/1/02 (FGIC Insured) Aaa 1,700,000 1,266,500
(Maricopa County Reg'l Area-A Proj.):
6% 7/1/03 (AMBAC Insured) Aaa 1,300,000 1,378,000
6.50% 7/1/04 (AMBAC Insured) Aaa 1,100,000 1,201,750
(Maricopa County Reg'l Area-B Proj.):
6.50% 7/1/04 (AMBAC Insured) Aaa 1,220,000 1,332,850
Maricopa County Commty. College Dist.
Series A, 6% 7/1/09 Aa 2,000,000 2,067,500
Phoenix Civic Impt. Corp. Excise Tax Rev. Rfdg.
Arpt. Impts. Series A, 5.85% 7/1/01 (d) Aa 2,420,000 2,519,825
9,766,425
ARKANSAS - 0.6%
Arkansas College Savings:
0% 6/1/02 Aa 705,000 524,344
0% 6/1/03 Aa 1,190,000 835,975
1,360,319
CALIFORNIA - 13.1%
California Edl. Facs. Auth. Rev. (Stanford Univ.)
Series J, 6% 11/1/05 Aaa 2,000,000 2,105,000
California Statewide Commty. Dev. Auth. Rev.
Ctfs. of Prtn. Insured Hosp. Rfdg.
(Triad Healthcare) 5.90% 8/1/01 A 1,115,000 1,121,969
Carson Redev. Agcy. Rfdg. (Redev. Proj. Area 2)
(Tax Allocation):
5.40% 10/1/01 Baa 1,350,000 1,331,438
5.50% 10/1/02 Baa 1,320,000 1,298,550
5.60% 10/1/03 Baa 1,500,000 1,471,875
5.625% 10/1/04 Baa 1,085,000 1,057,875
Central Valley Fin. Auth. Cogeneration Proj. Rev.
(Carson Ice Gen. Proj.):
5.50% 7/1/01 BBB- 1,875,000 1,889,063
5.60% 7/1/02 BBB- 1,800,000 1,813,500
5.80% 7/1/04 BBB- 1,300,000 1,311,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Clovis Unified School Dist. (Cap. Appreciation)
Series B, 0% 8/1/02 (MBIA Insured) Aaa $ 5,700,000 $ 4,246,500
Los Angeles Wastewtr. Sys. 6% 2/1/04
(FGIC Insured) Aaa 3,130,000 3,309,975
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.):
5.70% 9/1/02 Baa 1,170,000 1,156,838
6% 9/1/05 Baa 1,335,000 1,314,975
Sacramento Auth. Cogeneration Proj. Rev.
(Procter & Gamble Proj.) 5.80% 7/1/01 BBB- 1,400,000 1,428,000
Sacramento Pwr. Auth. Cogeneration Proj. Rev.
6.50% 7/1/05 BBB- 2,000,000 2,102,500
Tri-City Hosp. Dist. Rev. 5.50% 2/15/08
(MBIA Insured) (b) Aaa 1,000,000 987,500
University of California Revs. Rfdg. (Hsg. Sys.)
Series A, 8% 11/1/00 (MBIA Insured) Aaa 1,000,000 1,122,500
29,069,433
COLORADO - 10.1%
Adams & Arapahoe County School Dist. No. 28J
5.75% 12/1/07 (FGIC Insured) Aaa 2,330,000 2,431,928
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist) 6.25% 2/1/04 Baa 2,000,000 2,035,000
Denver City & County Arpt. Rev. (d):
Series A:
8.25% 11/15/02 Baa 730,000 817,600
(Cap. Appreciation):
0% 11/15/04 Baa 2,070,000 1,280,813
0% 11/15/05 (MBIA Insured) Aaa 2,250,000 1,350,000
Series C:
5.35% 11/15/96 Baa 1,035,000 1,035,331
6.55% 11/15/16 (MBIA Insured) Aaa 2,660,000 2,902,725
Series D (Cap. Appreciation):
0% 10/15/03 (MBIA Insured) Aaa 5,320,000 3,617,600
0% 11/15/05 (MBIA Insured) Aaa 2,055,000 1,233,000
0% 11/15/06 Baa 4,500,000 2,435,625
Denver Met. Baseball Stadium Rev. Rfdg.
6% 10/1/11 (FGIC Insured) (Pre-Refunded
to 10/1/01 @ 101) (e) Aaa 2,000,000 2,125,000
El Paso County School Dist. #20 6.15%
12/15/08 (MBIA Insured) Aaa 1,000,000 1,070,000
22,334,622
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - 1.1%
Connecticut Health & Edl. Facs. Auth. Rev. Rfdg.
(Quinnipiac College) Series D:
4.90% 7/1/98 BBB- $ 1,450,000 $ 1,437,313
5.625% 7/1/03 BBB- 1,100,000 1,078,000
2,515,313
DISTRICT OF COLUMBIA - 2.6%
District of Columbia Hosp. Rev. Rfdg.
(Medlantic Healthcare Group):
Series A, 5.50% 8/15/06 (MBIA Insured) Aaa 1,100,000 1,100,000
Series B, 6.125% 8/15/99 Baa1 4,520,000 4,616,050
5,716,050
FLORIDA - 2.9%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A 680,000 745,450
Dade County Aviation Rev. Rfdg. Series E,
6% 10/1/09 (AMBAC Insured) Aaa 500,000 529,375
Florida Board Ed. Cap. Outlay Rfdg. (Pub. Ed.)
Series D, 5% 6/1/14 Aa 2,000,000 1,832,500
Hillsborough County Port. Dist. Spl. Rev. Rfdg.
(Tampa Port. Auth.) 6.50% 6/1/02
(FSA Insured) (d) Aaa 2,000,000 2,147,500
Lakeland Elec. & Wtr. Rev. Rfdg. (Jr. Sub. Lien)
6.50% 10/1/06 (FGIC Insured) Aaa 1,000,000 1,107,500
6,362,325
GEORGIA - 0.9%
Georgia Gen. Oblig. 5.50% 8/1/04 Aaa 2,000,000 2,077,500
ILLINOIS - 1.9%
Chicago Gen. Oblig. Rfdg. Series A-2,
5.50% 1/1/04 (AMBAC Insured) Aaa 4,000,000 4,095,000
INDIANA - 2.0%
Indianapolis Resource Recovery Rev. Rfdg.
(Ogden Martin Sys. Inc. Proj.) (b):
6.75% 12/1/04 (AMBAC Insured) Aaa 1,325,000 1,467,438
6.75% 12/1/05 (AMBAC Insured) Aaa 2,675,000 2,969,250
4,436,688
IOWA - 2.0%
Iowa Student Loan Liquidity Corp. Student Loan
Rev. Rfdg. Sr. Series B, 5.75% 12/1/07 (d) Aaa 4,500,000 4,505,625
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
MASSACHUSETTS - 1.0%
Massachusetts Wtr. Resources Auth.
Series A, 7.625% 4/1/14
(Pre-Refunded to 4/1/00 @ 102) (e) Aaa $ 2,000,000 $ 2,230,000
MICHIGAN - 2.1%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25% 9/30/12 A 5,100,000 4,653,750
MINNESOTA - 0.8%
Minneapolis Gen. Oblig. Unltd. Tax
(Cap. Appreciation) Series B:
0% 12/1/03 Aaa 300,000 207,750
0% 12/1/04 Aaa 440,000 287,650
0% 12/1/05 Aaa 495,000 304,425
Minnesota Gen. Oblig. Unltd. Tax
5.60% 10/1/02 Aaa 1,000,000 1,047,500
1,847,325
NEW HAMPSHIRE - 1.8%
New Hampshire Higher Edl. & Health Facs. Auth.
Rev. (Frisbee Mem. Hosp.) 5.70% 10/1/04 Baa 4,145,000 3,968,838
NEW JERSEY - 1.6%
Passaic County Util. Auth. Swr. Dev. Rev.
0% 3/1/02 (MBIA Insured) Aaa 3,380,000 2,585,700
Union County Impt. Auth. Rev. Rfdg. (Correctional
Fac.) (Cap. Appreciation) 0% 6/15/07 Aaa 1,900,000 1,049,750
3,635,450
NEW MEXICO - 4.6%
Albuquerque Arpt. Rev. Rfdg. 6.50% 7/1/07
(AMBAC Insured) (b)(d) Aaa 1,400,000 1,457,750
Farmington Pollution Cont. Rev. 6.10% 1/1/08
(MBIA Insured) Aaa 1,300,000 1,302,093
New Mexico Edl. Assistance Foundation
Student Loan Rev. Sr. Series IV A-1
7.05% 3/1/10 (d) A 5,375,000 5,670,625
Rio Rancho Wtr. & Wastewater Sys. Rev. Series A,
8% 5/15/04 (FSA Insured) Aaa 1,420,000 1,664,950
10,095,418
NEW YORK - 5.5%
Muni. Assistance Corp. for New York City
6% 7/1/05 Aa 3,500,000 3,723,125
New York State Ctfs. of Prtn. 6.70% 9/1/97 Baa1 1,800,000 1,834,020
New York State Dorm. Auth. Rev.
(City Univ. Sys.) Series B, 5.75% 7/1/06 Baa1 1,080,000 1,067,850
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York State Local Gov't. Assistance Corp.
Series B, 7.50% 4/1/20 (Pre-Refunded to
4/1/01 @ 102) (e) Aaa $ 1,000,000 $ 1,128,750
New York State Urban Dev. Corp. Rev. Rfdg.
(Correctional Cap. Facs.) Series A,
6.40% 1/1/04 Baa1 1,785,000 1,867,556
Triborough Bridge & Tunnel Auth. Rev. Rfdg.
(Gen. Purp.) Series Y, 5.50% 1/1/03 Aa 2,500,000 2,575,000
12,196,301
NORTH CAROLINA - 0.2%
North Carolina Eastern Muni Pwr. Agcy. Pwr.
Sys. Rev. Rfdg. Series C, 5.50% 1/1/07 A 500,000 487,500
OHIO - 2.3%
Franklin County Rev. (Online Computer
Library Ctr. Inc. Proj.):
4.80% 4/15/97 - 500,000 500,600
5% 4/15/98 - 560,000 562,800
5.65% 4/15/01 - 340,000 346,375
Ohio Bldg. Auth. Facs. (Admin. Bldg. Fund Proj.)
Series A:
6% 9/1/06 (AMBAC Insured) Aaa 1,585,000 1,688,025
6.30% 10/1/11 A1 2,000,000 2,102,500
5,200,300
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 1,135,000
PENNSYLVANIA - 2.8%
Allegheny County Ind. Dev. Auth. Rev. Rfdg.
(Environmental Impt. USX-Marathon Corp.)
Series B, 5.30% 12/1/96 Baa3 4,010,000 4,012,566
Philadelphia Hosp. & Higher Edl. Facs. Auth.
Hosp. Rev. (Temple Univ. Hosp.) Series A,
5.60% 11/15/98 Baa1 2,100,000 2,123,625
6,136,191
SOUTH CAROLINA - 0.9%
South Carolina Ed. Assistance Auth. Rev. Rfdg.
(Guaranteed Student Loan) (Sub. lien) Series B,
5.70% 9/1/05 (d) A 2,000,000 2,022,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
SOUTH DAKOTA - 2.3%
South Dakota Student Loan Fin. Corp. Student
Loan Rev. Series A, 6.15% 8/1/03 (d) A+ $ 5,000,000 $ 5,081,250
TENNESSEE - 2.1%
Memphis Gen. Oblig. 6% 11/1/06 Aa 2,585,000 2,723,944
Memphis-Shelby County Arpt. Auth.
Arpt. Rev. Rfdg. Series B,
6.50% 2/15/09 (MBIA Insured) (d) Aaa 1,750,000 1,859,375
4,583,319
TEXAS - 15.0%
Alief Independent School Dist. Unltd. Tax:
7% 2/15/03 (PSF Guaranteed) Aaa 1,125,000 1,252,969
7% 2/15/04 (PSF Guaranteed) Aaa 1,125,000 1,262,813
Allen Independent School Dist.
0% 2/15/06 (PSF Guaranteed) Aaa 1,370,000 823,713
Arlington Independent School Dist. Rfdg. & Impt.
Unltd. Tax:
6.50% 2/15/02 (PSF Guaranteed) Aaa 1,000,000 1,080,000
6.50% 2/15/03 (PSF Guaranteed) Aaa 1,500,000 1,629,375
Brazos Higher Ed. Auth. Student Loan Rev. Rfdg.
Series C-1 (d):
5.60% 6/1/03 Aaa 6,750,000 6,893,438
5.70% 6/1/04 Aaa 2,500,000 2,562,500
Brazosport Independent School Dist. Unltd. Tax
(School House):
5.30% 2/15/12 (PSF Guaranteed) Aaa 1,215,000 1,172,475
5.40% 2/15/13 (PSF Guaranteed) Aaa 1,290,000 1,249,688
Cedar Hill Independent School Dist.:
0% 8/15/05 Aaa 2,830,000 1,758,138
0% 8/15/07 Aaa 1,465,000 789,269
Corpus Christi Util. Sys. Rev. 5.20% 7/15/14
(MBIA Insured) Aaa 1,115,000 1,029,981
Dallas Independent School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation) 0% 8/15/07
(PSF Guaranteed) Aaa 500,000 276,250
Keller Independent School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation) Series A, 0% 8/15/12
(PSF Guaranteed) Aaa 1,590,000 630,038
Lower Colorado River Auth. Rev. Rfdg.
(Cap. Appreciation) 0% 1/1/09 (MBIA Insured)
(Escrowed to Maturity) (e) Aaa 615,000 314,419
Midlothian Independent School Dist. Unltd. Tax
Rfdg. (Cap. Appreciation) 0% 2/15/06
(PSF Guaranteed) Aaa 1,905,000 1,152,525
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Northside Independent School Dist. Rfdg.
Unltd. Tax (Cap. Appreciation):
0% 2/15/02 (PSF Guaranteed) Aaa $ 1,000,000 $ 763,750
0% 2/15/03 (PSF Guaranteed) Aaa 1,230,000 888,675
Round Rock Independent School Dist. Unltd. Tax
Series B, 7% 8/1/03 (PSF Guaranteed) Aaa 1,325,000 1,485,656
Socorro Independent School Dist. Rfdg.
Unltd. Tax (Cap. Appreciation) 0% 9/1/04
(PSF Guaranteed) Aaa 3,000,000 1,991,250
Texas A&M Univ. Permanent Univ. Fund
5.40% 7/1/03 Aaa 1,255,000 1,289,513
Texas Muni. Pwr. Agcy. Rev. Rfdg. 9% 9/1/97
(Escrowed to Maturity) (e) A1 500,000 524,145
Texas Pub. Fin. Auth. Bldg. Rev. Series A,
6% 8/1/03 (AMBAC Insured) Aaa 2,000,000 2,110,000
Ysleta Independent School Dist. Rfdg. Unltd. Tax
(Cap. Appreciation) 0% 8/15/11
(PSF Guaranteed) Aaa 1,100,000 464,750
33,395,330
UTAH - 0.4%
Intermountain Pwr. Agcy. Pwr. Supply Rev.
Rfdg. Unltd. Tax Series B, 5.75% 7/1/16
(MBIA Insured) (b) Aaa 1,000,000 941,250
VIRGINIA - 0.6%
Virginia Hsg. Dev. Auth. Multi Family Hsg.
Series I, 5.85% 5/1/08 (d) Aa 1,370,000 1,371,713
WASHINGTON - 2.9%
Port Longview Ind. Dev. Corp. Solid Waste
Disp. Rev. (Weyerhaeuser Co. Proj.)
6.875% 10/1/08 (d) Aa 1,650,000 1,802,625
Washington Gen. Oblig. Series R 96-B,
5.50% 7/1/02 Aa 1,475,000 1,521,095
Washington State Pub. Pwr. Supply Sys.
Rev. Rfdg. (Nuclear #3) Series B:
(Cap. Appreciation) 0% 7/1/07 Aa 4,000,000 2,095,000
0% 7/1/10 Aa 2,250,000 947,813
6,366,533
TOTAL MUNICIPAL BONDS
(Cost $210,461,184) $ 211,042,456
MUNICIPAL NOTES (C)- 4.9%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
LOUISIANA - 0.6%
West Baton Rouge Parish Ind. Dist. #3 Rev.
(Dow Chemical Co.) Series 1993, 4%,
VRDN (d) P-1 $ 1,200,000 $ 1,200,000
TEXAS - 4.2%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util Elec. Co.) Series 1995 C, 4%,
LOC Swiss Bank, VRDN (d) VMIG 1 600,000 600,000
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) (d):
Series 1993 4% VRDN P-1 2,200,000 2,200,000
Series 1996 4% VRDN P-1 2,300,000 2,300,000
Gulf Coast Waste Disp. Auth.
(Citgo Petroleum) 4% VRDN (d) VMIG 1 2,800,000 2,800,000
Texas Gen. Oblig. TRAN Series 1996,
4.75% 8/29/97 MIG 1 1,500,000 1,512,195
9,412,195
WASHINGTON - 0.1%
Washington State Hsg. Fin. Comm. Multi Family
Mtg. Rev. (Canyon Lakes II Proj.) 3.70%
LOC U.S. Bank of Washington VRDN (d) VMIG 1 300,000 300,000
TOTAL MUNICIPAL NOTES
(Cost $10,911,264) $ 10,912,195
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $221,372,448) $ 221,954,651
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 68.0% AAA, AA, A 64.5%
Baa 15.7% BBB 16.3%
Ba 0.0% BB 1.8%
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 both S&P and Moody's amounted to 0.7%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 30.0%
Education 16.1
Transportation 11.0
Special Tax 9.7
Electric Revenue 7.7
Health Care 6.7
Industrial Development 6.4
Others (individually less than 5%) 12.4
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $221,372,448. Net unrealized appre- ciation aggregated
$582,203, of which $2,316,537 related to appreciated invest- ment
securities and $1,734,334 related to depreciated investment securities.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $8,853,000 of which $3,556,000 and $5,297,000 will expire on
August 31, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $221,372,448) - $ 221,954,651
See accompanying schedule

Receivable for investments sold 2,529,875

Interest receivable 2,319,778

TOTAL ASSETS 226,804,304

LIABILITIES

Payable to custodian bank $ 37,914

Payable for investments purchased 2,564,764
Regular delivery

Delayed delivery 7,634,590

Payable for fund shares redeemed 123,533

Distributions payable 220,185

Accrued management fee 102,034

TOTAL LIABILITIES 10,683,020

NET ASSETS $ 216,121,284

Net Assets consist of:

Paid in capital $ 224,459,252

Accumulated undistributed net realized gain (loss) on (8,920,171)
investments

Net unrealized appreciation (depreciation) on 582,203
investments

NET ASSETS, for 21,497,891 shares outstanding $ 216,121,284

NET ASSET VALUE, offering price and redemption price per $10.05
share ($216,121,284 (divided by) 21,497,891 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 11,808,344

EXPENSES

Management fee $ 1,223,445

Non-interested trustees' compensation 924

Total expenses before reductions 1,224,369

Expense reductions (114,660) 1,109,709

NET INTEREST INCOME 10,698,635

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

Investment securities 1,672,248

Futures contracts (6,950) 1,665,298

Change in net unrealized appreciation (depreciation) on (2,231,237)
investment securities

NET GAIN (LOSS) (565,939)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,132,696
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 10,698,635 $ 11,135,487
Net interest income

Net realized gain (loss) 1,665,298 (7,868,059)

Change in net unrealized appreciation (depreciation) (2,231,237) 11,579,094

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,132,696 14,846,522
FROM OPERATIONS

Distributions to shareholders from net interest income (10,698,635) (11,135,487)

Share transactions 120,502,414 180,517,302
Net proceeds from sales of shares

Reinvestment of distributions 8,342,300 8,836,264

Cost of shares redeemed (131,868,903) (229,621,967)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (3,024,189) (40,268,401)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (3,590,128) (36,557,366)

NET ASSETS

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

End of period $ 216,121,284 $ 219,711,412

OTHER INFORMATION
Shares

Sold 11,871,349 18,707,976

Issued in reinvestment of distributions 822,847 909,637

Redeemed (13,034,511) (23,828,782)

Net increase (decrease) (340,315) (4,211,169)

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED AUGUST 31, APRIL 26, 1993
(COMMENCEMEN
T OF OPERATIONS)
TO

1996 1995 1994 D AUGUST 31, 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 .486 .490 .514 .177
Operations
Net interest income

Net realized and unrealized (.010) .220 (.460) .340
gain (loss)

Total from investment .476 .710 .054 .517
operations

Less Distributions

From net interest income (.486) (.490) (.514) (.177)

From net realized gain - - (.010) -

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

Total distributions (.486) (.490) (.554) (.177)

Net asset value, end of period $ 10.050 $ 10.060 $ 9.840 $ 10.340

TOTAL RETURN B, C 4.80% 7.50% .52% 5.22%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 216,121 $ 219,711 $ 256,269 $ 219,400
(000 omitted)

Ratio of expenses to average .50% E .42% E .20% E - E
net assets

Ratio of net interest income to 4.81% 5.04% 5.09% 5.20% A
average net assets

Portfolio turnover rate 64% 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 August 31, 1996

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 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 and
losses deferred due to futures and options.
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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
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.
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 $139,513,691 and $139,553,367, respectively.
The market value of futures contracts opened and closed during the period
amounted to $3,333,085 and $3,326,134, 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
$3,481 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.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $7,768
under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Intermediate Municipal Income Fund (formerly Spartan
Intermediate Municipal Fund):
We have audited the accompanying statements of assets and liabilities of
Fidelity Union Street Trust: Spartan Intermediate Municipal Income Fund
(formerly Spartan Intermediate Municipal Fund), including the schedule of
portfolio investments, as of August 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended and the financial
highlights for each of the three years in the period then ended and for the
period April 26, 1993 (commencement of operations) to August 31, 1993.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian
and
brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Intermediate Municipal Income Fund
(formerly Spartan Intermediate Municipal Fund) as of August 31, 1996, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended
and for the period April 26, 1993 (commencement of operations) to August
31, 1993, in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
TO CALL 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
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Service Co.
Boston, MA
UMB Bank, n.a.
Kansas City, MO
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 Income
California Insured Municipal Income
California Municipal Income
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Income
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 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 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)

MUNICIPAL INCOME
FUND

ANNUAL REPORT
AUGUST 31, 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.

REPORT OF INDEPENDENT 32 The auditors' opinion.
ACCOUNTANTS

To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.

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 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 AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Municipal Income 5.73% 42.07% 61.25%

Lehman Brothers Municipal Bond 5.24% 43.10% n/a
Index

General Municipal Debt Funds Average 4.68% 39.84% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on 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 is a total return performance
benchmark for investment-grade municipal bonds with maturities of at least
one year. 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 228 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc., over the past 12 months. Both
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Municipal Income 5.73% 7.28% 7.95%

Lehman Brothers Municipal Bond 5.24% 7.43% n/a
Index

General Municipal Debt Funds Average 4.68% 6.93% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Municipal Income Fund on June 30, 1990, shortly after
the fund started. As the chart shows, by August 31, 1996, the value of the
investment would have grown to $15,963 - a 59.63% increase on the initial
investment. This assumes the fund was still owned on August 31, 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 and capital
gains, if any, reinvested, the same $10,000 would have grown to $15,996 - a
59.96% 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
YEARS ENDED AUGUST 31,

1996 1995 1994 1993 1992

Dividend return 5.32% 6.26% 5.54% 6.69% 7.15%

Capital appreciation return 0.41% 1.93% -6.96% 6.86% 3.77%

Total return 5.73% 8.19% -1.42% 13.55% 10.92%

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 AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.48(cents) 26.62(cents) 53.46(cents)

Annualized dividend rate 5.10% 5.17% 5.19%

30-day annualized yield 5.02% - -

30-day annualized tax-equivalent yield 7.84% - -

</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 $10.34 over
the past month, $10.22 over the past six months and $10.31 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

MARKET RECAP
Increased demand for municipal
bonds in the face of continued low
supply allowed municipal bonds to
outperform taxable debt securities
during the 12 months ended
August 31, 1996. While the bond
market in general has been on a
slow slide throughout much of
1996, municipals have held their
ground better than most. For the
past 12 months, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 5.24%. In comparison, the
Lehman Brothers Aggregate Bond
Index - a proxy for
investment-grade taxable bonds
- - had a total return of 4.11%.
Factors that helped munis
outperform included a lack of
supply of new issues, strong
demand for municipal bonds from
insurance companies and the
diminishing likelihood of
significant tax reform in the near
future. Like most domestic bonds,
munis were hurt by
stronger-than-expected signs of
strength in the economy earlier in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the point
that munis ended the period
trading at expensive levels
relative to their taxable
counterparts.
An interview with David Murphy, Portfolio Manager of Spartan
Municipal Income Fund
Q. DAVID, HOW HAS THE FUND PERFORMED?
A. It's done quite well. For the one-year period ended August 31, 1996, the
fund compiled a return of 5.73%. This compared favorably to both the
general municipal debt funds average, maintained by Lipper Analytical
Services, which had a return of 4.68% over the same period and the Lehman
Brothers Municipal Bond Index, which posted a one-year return of 5.24%.
Q. WHAT SPECIFIC METHODS OR STRATEGIES PROVED USEFUL IN GUIDING THE FUND TO
ITS STRONG SHOWING?
A. There are a couple of factors I'd like to touch upon. First, as I
mentioned six months ago, we've continued to reduce our
non-investment-grade holdings to the point where those securities now
account for less than 1% of the portfolio. Second, we chose to change our
focus from longer-term issues - those with maturities of 20 years or longer
- - to issues in the 10- to 15-year maturity ranges. The main reason behind
this switch in strategy was that we identified bonds with 10- to 15-year
maturities as providing fairly high yields relative to their longer-term
counterparts. Finally, by not making rash decisions based on short-term
market conditions, I was able to focus on other means of trying to boost
performance.
Q. DID YOU MAKE ANY SECTOR SHIFTS DURING THE PERIOD?
A. Yes, and I think that's another strategy that panned out well. The most
significant change is reflected in the health care sector, where we've gone
from a 10.8% position a year ago to 2.9% at the end of the period. This
reduction was partly due to my emphasis on reducing the fund's
non-investment-grade holdings. Many of the non-investment-grade issues in
the portfolio were hospital or health care facility bonds that weren't
performing as well as I would have liked. The health care sector in general
continued to undergo dramatic changes during the period. Hospitals have had
trouble keeping their expenses in line with revenues, which have been
falling. In terms of state issuance, I increased the fund's positions in
both Texas and California as their respective economies began to improve.
Q. WERE THERE ANY INDIVIDUAL HOLDINGS THAT PLAYED A KEY ROLE IN THE
PORTFOLIO'S PERFORMANCE?
A. We had a couple of instances of "addition by subtraction." By that I
mean the sale of specific holdings resulted in significant contributions. A
good example is the fund's position in a B-rated hospital bond that was
issued by East Texas Health
Facilities for Palestine Memorial Hospital. This security detracted from
performance in the early stages of the period, but the successful tender of
these bonds during the second half of the period turned it into a positive
situation for the fund. We were also able to sell two other positions -
bonds issued by Great Lakes Pulp and Paper and Ford Heights, a
waste-to-energy plant - before negative developments occurred. While these
bonds didn't enhance performance, they would have been major
underperformers if we had held onto them.
Q. WHAT SORTS OF THINGS DO YOU CONSIDER WHEN DETERMINING THE OVERALL
STRUCTURE OF THE PORTFOLIO?
A. I place a lot of emphasis on the price breakdown of the bonds. I prefer
to have a lighter position in what we call "par" bonds - bonds with prices
between $97 and $102 - and a heavier weighting in discount, or premium,
bonds - those with prices below $97 or above $102. There are a couple of
reasons behind this strategy. First, I feel that par bonds are more
susceptible to call risk, where the issuer can redeem an issue before its
maturity. Second, individual investors - who account for much of the demand
for municipal bonds - often prefer the par bonds. As discount bonds move
towards par, this increase in value makes them a good sale for the fund.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I think we'll see a continuation of the strong retail demand we've
recently witnessed. As the market stabilizes, as it
is attempting to do, I think more and more investors may consider bonds as
an investment alternative.
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.

TOP FIVE STATES AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STATES
6 MONTHS AGO

Texas 15.3 11.2

California 14.4 10.9

New York 12.2 12.4

Washington 5.8 5.3

Florida 5.5 6.1

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO

General Obligation 36.8 34.1

Electric Revenue 18.3 11.0

Industrial Development 8.4 8.3

Water & Sewer 7.1 7.8

Education 6.1 4.9

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 13.8 13.3

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 AUGUST 31, 1996
6 MONTHS AGO

Years 7.5 7.6

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. EFFECTIVE
JUNE, 1996, THE MODEL USED TO CALCULATE DURATIONS MAY HAVE BEEN SLIGHTLY
MODIFIED IN ORDER TO FURTHER REFINE THIS INFORMATION. THESE CHANGES IN
METHODOLOGY MAY PRODUCE ADJUSTMENTS IN HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 18.0
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 35.0
Row: 1, Col: 1, Value: 6.4
Row: 1, Col: 2, Value: 3.4
Row: 1, Col: 3, Value: 15.6
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 34.6
Aaa, Aa, A 75.7%
Baa 17.8%
Non-rated 1.9%
Short-term
investments 4.6%
Aaa, Aa, A 74.6%
Baa 15.6%
Non-rated 3.4%
Short-term
investments 6.4%
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 0.9% AND 1.9% OF THE FUND'S
INVESTMENTS ON AUGUST 31, 1996, AND FEBRUARY 29, 1996, RESPECTIVELY.
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 95.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
ALASKA - 1.3%
Alaska Student Loan Corp. Student Loan Rev.
Series A (c):
7.30% 7/1/00 (AMBAC Insured) Aaa $ 1,100,000 $ 1,175,625
5.90% 7/1/03 (AMBAC Insured) Aaa 1,070,000 1,088,725
North Slope Borough Gen. Oblig.
(Cap. Appreciation):
Series A, 0% 6/30/99 (MBIA Insured) Aaa 3,500,000 3,066,875
Series B, 0% 6/30/05
(Cap. Guaranty Insured) Aaa 2,500,000 1,581,250
6,912,475
ARIZONA - 2.8%
Arizona State Univ. Rev. Rfdg. Sys.
6% 7/1/07 (f) A1 1,250,000 1,318,750
Chandler:
7.375% 7/1/09 (FGIC Insured) Aaa 1,000,000 1,173,750
4.375% 7/1/12 (FGIC Insured) Aaa 1,000,000 850,000
Maricopa County Series C, 8.90% 7/1/99 A 3,950,000 4,394,375
Pima County Unified School Dist. Tucson Proj.
of 1989 Series G, 8% 7/1/04 (MBIA Insured) Aaa 2,000,000 2,385,000
Tucson Ltd. Tax Rfdg. 7.50% 7/1/01 Aa 2,525,000 2,818,531
Tucson Wtr. Rev. Series D:
9.75% 7/1/07 A1 500,000 678,750
9.75% 7/1/08 A1 500,000 686,875
9.75% 7/1/09 A1 750,000 1,042,500
15,348,531
ARKANSAS - 0.3%
Arkansas State College Savings
(Cap. Appreciation) Series A:
0% 6/1/03 Aa 1,280,000 899,200
0% 6/1/04 Aa 1,110,000 733,976
1,633,176
CALIFORNIA - 13.4%
California Gen. Oblig.:
6.50% 3/1/02 (AMBAC Insured) Aaa 2,525,000 2,736,469
6.75% 5/1/03 A1 1,000,000 1,100,000
6.60% 2/1/10 A1 5,205,000 5,712,488
5.25% 10/1/13 A1 3,000,000 2,805,000
5.25% 10/1/16 A1 3,200,000 2,956,000
5.25% 10/1/17 A1 3,500,000 3,228,750
6.25% 10/1/19 A1 2,260,000 2,449,275
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series 1983 A, 0% 2/1/15 Aa 187,000 30,438
Series A, 5.30% 8/1/14 (MBIA Insured) Aaa 1,000,000 980,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Wks. Board Lease Rev.:
(California State Univ. Proj.) Series A,
5.50% 6/1/14 A1 $ 5,500,000 $ 5,225,000
(Secretary of State) Series A, 6% 5/1/13 A1 3,500,000 3,456,250
(Various California State Univ. Projs.):
Series A, 6% 10/1/14 A 1,000,000 993,750
Series B, 5.55% 6/6/10 A1 1,500,000 1,468,125
California Rural Home Mtg. Fin. Auth. Lease Rev.
Series A, 4.45% 8/1/01 (MBIA Insured) Aaa 1,000,000 983,750
Central Valley Fing. Auth. Cogeneration Proj. Rev.
(Carson Ice Gen. Proj.) 6.20% 7/1/20 BBB- 4,075,000 3,978,219
Contra Costa Trans. Auth. Sales Tax Rev. Series A,
6% 3/1/07 (FGIC Insured) Aaa 3,500,000 3,710,000
East Bay Mun. Util. Dist. Wtr. Sys. Rev. Rfdg.
6.10% 6/1/07 A1 1,250,000 1,318,750
Encintas Unified School Dist. (Cap. Appreciation)
0% 8/1/05 (MBIA Insured) Aaa 1,500,000 937,500
Industry Urban Ind. Dev. Agcy. Rev. (Civic
Recreational Proj.#1-B) 7.375% 5/1/15 - 1,140,000 1,178,224
Long Beach Hbr. Rev. (c):
9% 5/15/02 (MBIA Insured) Aaa 1,275,000 1,525,219
8.50% 5/15/03 (MBIA Insured) Aaa 1,235,000 1,471,194
San Francisco City & County Swr. Rev. Rfdg.
5.90% 10/1/08 (AMBAC Insured) Aaa 5,000,000 5,143,750
San Joaquin County Ctfs. of Prtn. (Cap. Facs.
Proj.) 4.90% 11/15/08 (MBIA Insured) Aaa 4,000,000 3,825,000
South Orange County Pub. Fing. Auth. Spl. Tax
Rev. (Foothill Area) Series C, 7.50% 8/15/07
(FGIC Insured) Aaa 2,500,000 2,953,125
University of California Rev. Rfdg. (Multiple
Purp. Projs.) Series C, 5.125% 9/1/13
(AMBAC Insured) Aaa 1,800,000 1,653,750
West & Central Basin Fin. Auth. Series C:
5.20% 8/1/07 (AMBAC Insured) Aaa 5,800,000 5,727,500
5.25% 8/1/08 (AMBAC Insured) Aaa 6,100,000 5,993,250
73,540,776
COLORADO - 3.0%
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist) 6.625% 2/1/13 Baa 6,500,000 6,565,000
Denver City & County Arpt. Rev.:
(Cap. Appreciation) (c):
0% 11/15/02 (MBIA Insured) Aaa 4,900,000 3,528,000
0% 11/15/05 (MBIA Insured) Aaa 3,000,000 1,800,000
Series A (c):
6.60% 11/15/97 Baa 1,000,000 1,022,500
6.90% 11/15/98 Baa 1,000,000 1,042,500
Series D, 7% 11/15/25 Baa 2,500,000 2,543,750
16,501,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - 1.1%
Connecticut Gen. Oblig. Series A, 7% 3/15/03 Aa $ 3,000,000 $ 3,345,000
Connecticut Health & Ed. Facs. Auth. Rev.
(St. Raphael Hosp.) 5.30% 7/1/10
(AMBAC Insured) Aaa 2,990,000 2,900,300
6,245,300
DISTRICT OF COLUMBIA - 2.0%
District of Columbia Hosp. Rev. (Hosp. for
Sick Children) Series A, 8.875% 1/1/21 - 3,395,000 3,598,700
District of Columbia Redev. Land Agcy. Spl.
Tax Rev. (Washington D.C. Sports Arena):
4.50% 11/1/96 Baa 1,700,000 1,699,099
5.40% 11/1/00 Baa 1,000,000 992,500
5.625% 11/1/10 Baa 1,250,000 1,198,438
Metropolitan Washington Arpt. Auth. Gen. Arpt.
Rev. Series A, 7.25% 10/1/10
(FGIC Insured) (c) Aaa 3,000,000 3,281,250
10,769,987
FLORIDA - 5.1%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A 4,335,000 4,752,244
Florida Muni. Pwr. Agcy. Rev. Rfdg. (Stanton II
Proj.) 4.50% 10/1/16 (AMBAC Insured) Aaa 3,000,000 2,505,000
Jacksonville Elec. Auth. Rev. 6% 7/1/01
(Escrowed to Maturity) (d) Aaa 845,000 866,125
Jacksonville Port Auth. Rev. 5.75% 11/1/09
(MBIA Insured) (c) Aaa 1,000,000 996,250
Lakeland Elec. & Wtr. Rev. Rfdg. Jr. Sub. Lien:
6.50% 10/1/04 (FGIC Insured) Aaa 13,755,000 15,182,081
6.50% 10/1/06 (FGIC Insured) Aaa 1,000,000 1,107,500
6.50% 10/1/09 (FGIC Insured) Aaa 2,500,000 2,753,125
28,162,325
GEORGIA - 1.2%
Fulton County School Dist. Rfdg. 6.375% 5/1/14 Aa 2,000,000 2,165,000
Fulton County Wtr. & Swr. Rev.
6.25% 1/1/08 (FGIC Insured) Aaa 2,100,000 2,254,875
Georgia Residential Fin. Auth. Home Ownership
Mtg. Series 1984 B, 0% 12/1/15 Aa 17,645,000 2,161,513
6,581,388
HAWAII - 0.3%
Hawaii Arpts. Sys. Rev. 2nd Series,
7.50% 7/1/20 (FGIC Insured) (c) Aaa 1,500,000 1,646,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
IDAHO - 0.6%
Idaho Falls Elec. Rfdg. 0% 4/1/07
(FGIC Insured) Aaa $ 2,500,000 $ 1,428,125
Idaho Hsg. Agcy. Single Family Mtg.
Series 1991 B, 7.50% 7/1/24 (c) AA 2,100,000 2,176,125
3,604,250
ILLINOIS - 3.6%
Chicago Gen. Oblig. Rfdg. Series B,
5.125% 1/1/15 (AMBAC Insured) Aaa 2,250,000 2,058,750
Chicago O'Hare Int'l. Arpt.:
Spl. Facs. Rev.:
(United Airlines, Inc.) 8.25% 5/1/99 (c) Baa3 2,845,000 3,033,481
Rfdg. Sr. Lien Series A, 5% 1/1/12 A1 4,500,000 4,134,375
Rfdg. (2nd Lien) Series A, 6.375%
1/1/15 (MBIA Insured) Aaa 1,500,000 1,550,625
Chicago Park Dist. Rfdg. 6.25% 1/1/09,
(FGIC Insured) Aaa 750,000 789,375
Chicago Residential Mtg. Rev. Rfdg.
(Cap. Appreciation) Series B, 0% 10/1/09,
(MBIA Insured) Aaa 7,470,000 2,997,338
DeKalb Single Family Mtg. Rev. Series A,
7.45% 12/1/09 (GNMA Coll.) (c) Aaa 1,695,000 1,777,631
Metropolitan Pier & Exposition Auth. Dedicated
Tax Rev.:
(McCormick Place Expansion Proj.)
Series A, 0% 6/15/09 (FGIC Insured) Aaa 2,175,000 1,030,406
0% 6/15/00 (AMBAC Insured) Aaa 2,700,000 2,237,625
19,609,606
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 1,110,000
KANSAS - 0.9%
Johnson County Unified School Dist. #512
(Shawnee Mission):
8% 10/1/03 Aa1 1,015,000 1,202,775
8% 10/1/04 Aa1 1,225,000 1,470,000
8% 10/1/05 Aa1 1,250,000 1,514,063
Reno County Mtg. Rev. Rfdg. (Single Family)
Series B, 8.70% 9/1/11 Aa 710,000 758,813
4,945,651
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
KENTUCKY - 1.0%
Kenton County Arpt. Board Arpt. Rev.
(Spl. Facs Delta Proj. A) 7.125% 2/1/21 (c) Baa3 $ 3,500,000 $ 3,635,625
Owensboro Elec. Lt. & Pwr. Rev. Series B,
0% 1/1/10 (AMBAC Insured) Aaa 4,000,000 1,845,000
5,480,625
LOUISIANA - 1.6%
Louisiana Gen. Oblig. Series A,
6.75% 5/15/04 (MBIA Insured) Aaa 7,865,000 8,671,163
MARYLAND - 1.0%
Baltimore Rfdg. Consolidated Pub. Impt.
7.25% 10/15/05 (FGIC Insured) Aaa 3,100,000 3,572,750
Montgomery County Consolidated Pub. Impt.
Series B, 6.80% 11/1/06 (Pre-Refunded to
11/1/99 @ 102) (d) Aaa 1,660,000 1,801,100
5,373,850
MASSACHUSETTS - 4.5%
Massachusetts Bay Trans. Auth. Rfdg. (Gen.
Trans. Sys.) Series A, 5.50% 3/1/12 A1 5,000,000 4,918,750
Massachusetts Edl. Loan Auth. (Edl. Loan Rev.)
Issue E, Series B (c):
5.75% 7/1/05 (AMBAC Insured) Aaa 3,090,000 3,186,563
5.85% 7/1/06 (AMBAC Insured) Aaa 3,680,000 3,804,200
5.95% 7/1/09 (AMBAC Insured) Aaa 3,980,000 4,114,325
Massachusetts Gen. Oblig. Consolidated Loan
Series A, 6% 6/1/11 A1 1,400,000 1,435,000
Massachusetts Gen. Oblig. Rfdg. Series A,
6.25% 7/1/03 A1 1,600,000 1,724,000
New England Ed. Loan Marketing Corp. Rev.
Rfdg. (Student Loan):
Series A, 5.70% 7/1/05 (c) A1 4,375,000 4,385,938
Series B, 5.40% 6/1/00 A1 1,000,000 1,012,500
24,581,276
MINNESOTA - 0.8%
Minneapolis Rfdg. (Sports Arena Proj.)
(Cap. Appreciation) 0% 12/1/03 Aaa 1,175,000 813,688
Northern Minnesota Muni. Pwr. Agcy. Elec. Sys.
Rev. Rfdg. Series A, 7.25% 1/1/16 A 1,700,000 1,797,750
Western Muni. Pwr. Agcy. Pwr. Supply Rev. Rfdg.
Series A, 5.50% 1/1/12 (AMBAC Insured) (b) Aaa 1,750,000 1,704,063
4,315,501
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (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 $ 1,616,250
MONTANA - 1.8%
Montana Board of Investment Payroll Tax:
(Workers Compensation):
6.875% 6/1/20 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 2,005,000 2,223,044
6.875% 6/1/20 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 1,255,000 1,361,675
6.875% 6/1/20 (MBIA Insured) Aaa 3,870,000 4,184,438
Montana Coal Severance Tax Rfdg.
(Broadwater Pwr. Proj.) Series A,
6.875% 12/1/11 (c) A1 2,000,000 2,072,500
9,841,657
NEBRASKA - 1.0%
Omaha Pub. Pwr. Dist. Elec. Rev. Series C,
5.50% 2/1/14 Aa 5,650,000 5,480,500
NEVADA - 0.2%
Clark County Ind. Dev. Rev. (Southwest Gas
Corp.) Series A, 6.50% 12/1/33 (c) Baa3 1,000,000 962,500
NEW JERSEY - 0.8%
New Jersey Health Care Facs. Fing. Auth.
Rev. (Atlantic City Med. Ctr.) Series B,
8.375% 8/1/20 (FHA Guaranteed)
(Pre-Refunded to 2/1/98 @ 102) (d) Aaa 1,250,000 1,328,125
New Jersey Trans. Trust Fund Auth. (Trans. Sys.)
Series B, 6.50% 6/15/10 (MBIA Insured) Aaa 3,000,000 3,300,000
4,628,125
NEW MEXICO - 1.0%
Albuquerque Arpt. Rev. Series A, 6.60% 7/1/16
(AMBAC Insured) (c) Aaa 2,375,000 2,520,469
Hobbs Single Family Mtg. Rev. Rfdg. 8.75% 7/1/11 A 1,485,000 1,590,806
New Mexico Edl. Assistance Foundation Student
Loan Rev. Series B, 5.25% 4/1/05
(AMBAC Insured) (c) Aaa 1,455,000 1,436,813
5,548,088
NEW YORK - 12.2%
Metropolitan Trans. Auth. Commuter Facs.
Rev. Series A, 6% 7/1/16 (FGIC Insured) Aaa 2,000,000 2,020,000
Metropolitan Trans. Auth. Svc. Contract
(Trans. Facs.) Series O, 5.75% 7/1/08 Baa1 3,840,000 3,782,400
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York City Gen. Oblig.:
Rfdg. Series B, 5.70% 8/15/02 Baa1 $ 2,000,000 $ 2,017,500
Rfdg. Series E, 5.40% 2/15/03 Baa1 2,285,000 2,245,013
Series A, 7.75% 8/15/07 Baa1 4,000,000 4,440,000
Series B, 7.50% 2/1/04 Baa1 1,500,000 1,623,750
Series G, 5.40% 2/1/01 Baa1 3,000,000 3,015,000
Series G, 5.60% 2/1/02 Baa1 1,875,000 1,882,031
7.50% 2/1/03 Baa1 5,000,000 5,462,500
New York State Dorm. Auth. Rev. Rfdg.:
(State Univ. Edl. Facs.) Series A:
5.50% 5/15/09 Baa1 4,000,000 3,860,000
5.50% 5/15/13 Baa1 13,100,000 12,330,375
5.875% 5/15/17 Baa1 3,565,000 3,458,050
(Suffolk County Judicial Facs.) Series A,
9.50% 4/15/14 Baa1 7,000,000 8,140,300
New York State Local Gov't. Assistance Corp.:
Rfdg. Series C, 5.50% 4/1/17 A 5,000,000 4,768,750
Rfdg. Series E, 5.25% 4/1/16 A 4,075,000 3,794,844
Series B, 6% 4/1/18 A 1,500,000 1,507,500
Triborough Bridge & Tunnel Auth. Rev.
(Convention Ctr. Proj.) Series E, 7.25% 1/1/10 Baa1 2,325,000 2,589,469
66,937,482
NORTH CAROLINA - 1.2%
North Carolina Eastern Muni. Pwr. Agcy. Pwr.
Sys. Rev. Rfdg. Series C, 7% 1/1/07 A 2,000,000 2,172,500
North Carolina Muni. Pwr. Agcy. #1 Catawba
Elec. Rev. 5.25% 1/1/09 (MBIA Insured) Aaa 4,655,000 4,556,081
6,728,581
NORTH DAKOTA - 1.0%
Mercer County Poll. Cont. Rev. Rfdg. (Basin
Electric Pwr.) (Antelope Valley Station Proj.)
7.20% 6/30/13 (AMBAC Insured) Aaa 5,000,000 5,775,000
OHIO - 2.6%
Bedford Hosp. Impt. Rev. Rfdg. (Bedford Commty.
Hosp.) Series 1990, 8.50% 5/15/09,
(Escrowed to Maturity) (d) - 980,000 1,093,925
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 1,265,000 883,919
Ohio Hsg. Fin. Agcy. Mtg. Rev. (Oakleaf-Toledo
Apts. Proj.) 10.25% 12/20/25 (GNMA Coll.) AAA 1,580,000 1,801,200
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio State Bldg. Auth.:
(Adult Correctional Facs.) Series A,
5.95% 10/1/14 (MBIA Insured) Aaa $ 4,000,000 $ 4,035,000
(Workers Compensation Bldg. A)
4.75% 4/1/14 A 5,000,000 4,331,250
Ohio Wtr. Dev. Auth. Rev. Rfdg. (Impt. Pure Wtr.
5.75% 6/1/06 (MBIA Insured) Aaa 1,000,000 1,042,500
14,122,313
OREGON - 1.6%
Port Morrow Poll. Ctr. Rev. (Pacific Northwest)
Series A, 8% 7/15/11 AA- 3,295,000 3,727,469
Portland Series B:
7% 6/1/00 Aaa 1,385,000 1,502,725
7% 6/1/01 Aaa 1,480,000 1,629,850
Portland Swr. Sys. Rev. Series A, 6.25% 6/1/15 A1 1,875,000 1,938,281
8,798,325
PENNSYLVANIA - 2.8%
Philadelphia Hosp. & Higher Ed. Facs. Auth.
Hosp. Rev. Rfdg. 5.70% 7/1/01 Baa1 1,000,000 1,001,250
Philadelphia Wtr. & Wastewtr. Rev.
5.65% 6/15/12 (FGIC Insured) Aaa 12,000,000 11,640,000
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys. Rev.
Rfdg. Series A, 0% 9/1/04 (FGIC Insured)
(Escrowed to Maturity) (d) Aaa 3,900,000 2,574,000
15,215,250
SOUTH CAROLINA - 0.4%
South Carolina Ed. Assistance Auth. Rev.
6.625% 9/1/06 (c) AA 2,000,000 2,087,500
TEXAS - 13.6%
Alliance Arpt. Auth. Spl. Facs. Rev. (c):
(American Airlines, Inc. Proj.) 7.50% 12/1/29 Baa2 3,000,000 3,165,000
(Federal Express Corp.) 6.375% 4/1/21 Baa2 3,000,000 2,902,500
Austin Independent School Dist. Rfdg. (Cap.
Appreciation) 0% 8/1/02 (PSF Guaranteed) Aaa 2,100,000 1,569,750
Austin Util. Sys. Rev. Rfdg. (Cap. Appreciation):
Series A:
0% 11/15/01 (MBIA Insured) Aaa 1,000,000 771,250
0% 11/15/08 (MBIA Insured) Aaa 3,895,000 1,952,369
0% 11/15/09 (AMBAC Insured) Aaa 4,000,000 1,870,000
Clear Creek Independent School Dist. Rfdg.
(Cap. Appreciation) Series A,
0% 2/1/11 (PSF Guaranteed) Aaa 4,000,000 1,745,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Corpus Christi Independent School Dist. Rfdg.
(Cap. Appreciation):
0% 8/15/01 (PSF Guaranteed) Aaa $ 1,535,000 $ 1,208,813
0% 8/15/02 (PSF Guaranteed) Aaa 2,165,000 1,615,631
Cypress-Fairbanks Independent 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.) 7.50% 11/1/25 (c) Baa2 7,000,000 7,402,500
Dallas-Fort Worth Reg. Arpt. Rev. Rfdg. Series A,
5.75% 11/1/02 (MBIA Insured) Aaa 1,750,000 1,822,188
Dallas Gen. Oblig. 4.50% 2/15/14 Aa1 2,400,000 2,049,000
Dallas Independent School Dist. Rfdg.
(Cap. Appreciation) 0% 8/15/07
(PSF Guaranteed) Aaa 1,000,000 552,500
El Paso Prop. Fin. Auth. Single Family Mtg. Rev.
Series A, 8.70% 12/1/18 (GNMA Coll.) (c) Aaa 1,190,000 1,273,300
Grapevine-Colleyville Independent School Dist.
Rfdg. (Cap. Appreciation) 0% 8/15/06
(PSF Guaranteed) Aaa 2,580,000 1,518,975
Harris County Cultural & Ed. Facs. Fin. Corp.
Rev. Rfdg. (Space Ctr. Houston Proj.):
Series A, 9.25% 8/15/23 - 940,000 895,350
Series B, 0% 8/15/23 - 2,375,000 599,688
Houston Independent School Dist. Rfdg. Series A,
0% 8/15/11 (PSF Guaranteed) Aaa 6,400,000 2,704,000
Katy Independent School Dist. Rfdg.:
Ltd. Tax Series A, 0% 2/15/07
(PSF Guaranteed) Aaa 2,450,000 1,390,375
0% 8/15/11 (PSF Guaranteed) Aaa 4,170,000 1,761,825
Lower Colorado River Auth. Rev. Rfdg. (Cap.
Appreciation) 0% 1/1/09 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 1,000,000 511,250
Lower Neches Valley Auth. Ind. Dev. Corp.
Swr. Facs. Rev. (Mobil Oil Refining Corp. Proj.)
6.40% 3/1/30 (c) Aa2 13,815,000 13,970,419
Midlothian Independent School Dist. Rfdg.
(Cap. Appreciation):
0% 2/15/07 (PSF Guaranteed) Aaa 1,935,000 1,098,113
0% 2/15/08 (PSF Guaranteed) Aaa 1,520,000 809,400
0% 2/15/10 (PSF Guaranteed) Aaa 1,525,000 707,219
Round Rock Independent School Dist. Rfdg. &
School Bldg. (Cap. Appreciation)
0% 8/15/10 (MBIA Insured) Aaa 5,000,000 2,256,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
San Antonio Elec. & Gas Rev. Rfdg.:
(Cap. Appreciation):
Series A, 0% 2/1/05 (AMBAC Insured) Aaa $ 2,000,000 $ 1,272,500
Series B, 0% 2/1/09 (FGIC Insured) Aaa 2,000,000 980,000
5.75% 2/1/11 Aa1 3,240,000 3,248,100
Spring Branch Independent School Dist. Rfdg.
0% 2/1/05 (PSF Guaranteed) Aaa 5,725,000 3,692,625
Spring Independent School Dist. Unltd. Tax
4.875% 8/15/10 (PSF Guaranteed) Aaa 2,500,000 2,328,125
Texas A&M Univ. Permanent Univ. Fund
5.50% 7/1/04 Aaa 1,275,000 1,314,844
Univ. of Texas Univ. Revs. Rfdg. (Fing. Sys.)
Series A:
6% 8/15/04 Aa1 1,170,000 1,235,813
6% 8/15/05 Aa1 1,000,000 1,055,000
Winters Wtrwks. & Swr. Sys. Rev. Rfdg. 8.50%
8/1/17 (Pre-Refunded to 8/1/03 @ 100) (d) - 500,000 598,750
74,703,110
UTAH - 2.5%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.
Series A:
6.50% 7/1/11 (AMBAC Insured) (b) Aaa 1,000,000 1,052,500
6% 7/1/16 (AMBAC Insured) (b) Aaa 5,000,000 4,900,000
6% 7/1/21 (AMBAC Insured) (b) Aaa 5,000,000 4,862,500
Series D, 5% 7/1/21 Aa 2,500,000 2,168,750
Utah Hsg. Fin. Agcy.:
(Residential Mtg.) (Cap. Appreciation)
Series 1983 A, 0% 7/1/16 A+ 2,190,042 284,705
(Single Family Mtg.) Series G, 9.25% 7/1/19
(FHA Guaranteed) (c) AA 670,000 693,450
13,961,905
VERMONT - 0.7%
Vermont Hsg. Fin. Agcy. Single Family Series 2,
7.30% 5/1/25 (c) A1 1,500,000 1,543,125
Vermont Ind. Dev. Auth. Ind. Dev. Rev.
(Radisson Hotel) Series B-1, 7.75% 11/15/15 - 2,350,000 2,529,188
4,072,313
VIRGINIA - 1.0%
Fairfax County Econ. Dev. Auth. Resource
Recovery Rev. (Ogden Martin Sys. Proj.)
Series A, 7.75% 2/1/11 (c) A1 3,500,000 3,771,250
Upper Occoquan Swr. Auth. Rev. 4.75% 7/1/29
(MBIA Insured) Aaa 2,000,000 1,665,000
Virginia Hsg. Dev. Auth. Residential Mtg.
(Single Family Mtg.) (Cap. Appreciation)
Series 1983 B, 0% 9/1/14 Aa 2,430,000 376,650
5,812,900
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
WASHINGTON - 5.8%
Douglas County Pub. Util. Dist. #1 Wells
Hydroelec. Rev. Rfdg. (Pacific Pwr. & Lt. Co.)
8.75% 9/1/18 A $ 1,395,000 $ 1,726,313
Washington Gen. Oblig. Series 1996-A,
6.75% 7/1/02 Aa 3,560,000 3,893,750
Washington Motor Vehicle Fuel Tax Gen. Oblig.
Series B, 6.50% 9/1/03 Aa 5,000,000 5,450,000
Washington Pub. Pwr. Supply Sys. Rev.
Nuclear Proj. #2:
Rfdg. Series C, 0% 7/1/05 (MBIA Insured) Aaa 11,000,000 6,792,500
5.40% 7/1/12 Aa 10,000,000 9,200,000
Washington Pub. Pwr. Supply Sys. Rev.
Nuclear Proj. #3 5.40% 7/1/12 Aa 5,000,000 4,550,000
31,612,563
WYOMING - 0.2%
Sweetwater County Poll. Cont. Rev. Rfdg. (Idaho
Pwr. Co. Proj.) Series A, 6.05% 7/15/26 A3 1,000,000 981,250
TOTAL MUNICIPAL BONDS
(Cost $522,877,843) 523,919,492
MUNICIPAL NOTES (E) - 4.6%
ARIZONA - 0.6%
Coconino County Poll. Cont. Corp. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.)
Series A, 4%, LOC Bank of America Nat'l.
Trust & Savings, VRDN (c) P-1 200,000 200,000
Pima County Ind. Dev. Auth. Rev. (Tucson Elec.
Pwr. Co. Proj.) 3.60%, LOC Bankers
Trust Co., VRDN (c) VMIG 1 300,000 300,000
Yavapi County Ind. Dev. Auth. Ind. Dev. Rev.
(Citizens Util. Co.) Series 1993, 3.65%,
VRDN (c) A-1+ 2,600,000 2,600,000
3,100,000
CALIFORNIA - 1.0%
California Gen. Oblig. RAN 4.50% 6/30/97 MIG 1 1,500,000 1,508,340
Kern County Gen. Oblig. TRAN 4.50% 10/2/97 - 2,000,000 2,010,060
Los Angeles Unified School Dist. Tax & Rev.
Series B, TRAN 4.50% 9/30/97 MIG 1 2,000,000 2,008,940
5,527,340
MUNICIPAL NOTES (E) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - 0.4%
Florida Hsg. Fin. Agency Multi-Family Hsg.
Rev. Rfdg. (Brandon-Oxford) Series 90C,
3.80%, VRDN A-1 $ 2,200,000 $ 2,200,000
LOUISIANA - 0.1%
Plaquemines Parish Envir. Rev. (c):
(BP Expl. & Oil, Inc. Proj.) Series 1994,
4%, VRDN P-1 200,000 200,000
Rfdg. Series 1997, 4%, VRDN P-1 300,000 300,000
500,000
MISSOURI - 0.7%
Missouri Higher Ed. Loan Auth. Student Loan
Rev. Series B, 3.55%, LOC Nat'l.
Westminster Bank, VRDN (c) VMIG 1 4,000,000 4,000,000
NORTH CAROLINA - 0.1%
Halifax County Ind. Facs. Poll. Cont. Facs.
Auth. (Westmoreland Hadson Proj.)
(Roanoke Valley Proj.) Series 1991,
4.05%, LOC Cr. Suisse, VRDN (c) - 300,000 300,000
PENNSYLVANIA - 0.0%
Nothumberland County Ind. Dev. Auth. Rev.
(Foster Wheeler Carmel Proj.) Series 87A,
3.65%, LOC Union Bank of Switzerland,
VRDN (c) VMIG 1 285,000 285,000
SOUTH CAROLINA - 0.0%
South Carolina Jobs-Econ. Dev. Auth. Econ.
Dev. Rev. (Wellman, Inc. Proj.) Series 1991,
4.10%, LOC Wachovia Bank &
Trust N.A., VRDN (c) - 100,000 100,000
TEXAS - 1.7%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util Elec. Co.) (c):
Series 1995 C, 4%, LOC Swiss Bank, VRDN VMIG 1 400,000 400,000
Series 1996-A, 3.95% (AMBAC Insured)
BPA Bank of New York, VRDN VMIG 1 160,000 160,000
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) Series 1993, 4%,
VRDN (c) P-1 200,000 200,000
Gulf Coast Waste Disp. Auth. Poll. Cont. Rev.
(Amoco Oil Co. Proj.) (c):
Series 1993, 3.95%, VRDN VMIG 1 1,900,000 1,900,000
3.95%, VRDN VMIG 1 500,000 500,000
MUNICIPAL NOTES (E) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
TEXAS - CONTINUED
North Texas Higher Ed. Auth. Inc. Student Loan
Rev. Rfdg. Series A, 3.55%, LOC
Student Loan Marketing Assoc., VRDN (c) VMIG 1 $ 700,000 $ 700,000
Port Corpus Christi Ind. Dev. Corp. Swr. & Solid
Waste Disp. Rev. (Citgo Petroleum Proj.)
4%, LOC Banque Nationale
de Paris, VRDN (c) VMIG 1 1,300,000 1,300,000
Texas Gen. Oblig. TRAN Series 1996,
4.75% 8/29/97 MIG 1 2,300,000 2,318,699
Trinity River Auth. Poll. Cont. Rev. Coll. (Texas
Utils. Elec. Co. Proj.) Series 96-A, 3.95%
(AMBAC Insured) BPA Bank of New York N.A.,
VRDN (c) VMIG 1 1,800,000 1,800,000
9,278,699
TOTAL MUNICIPAL NOTES
(Cost $25,290,275) 25,291,039
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $548,168,118) $ 549,210,531
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
10 U.S. Treasury Bond Contracts Sept. 96 $ 1,073,125 $ (46,653)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.2%
SECURITY TYPE ABBREVIATIONS
RAN - Revenue Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
6. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
7. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
8. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
9. Security collateralized by an amount sufficient to pay interest and
principal.
10. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
11. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $159,708.
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 73.8% AAA, AA, A 73.8%
Baa 17.0% BBB 12.5%
Ba 0.0% BB 3.1%
B 0.0% B 0.7%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 1.9%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 36.8%
Electric Revenue 18.3
Industrial Development 8.4
Water & Sewer 7.1
Education 6.1
Special Tax 5.8
Transportation 5.6
Others (individually less than 5%) 11.9
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $548,209,703. Net unrealized appreciation aggregated
$1,000,828, of which $8,702,195 related to appreciated investment
securities and $7,701,367 related to depreciated investment securities.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $19,439,000 of which $2,188,000, and $17,251,000 will expire
on August 31, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $548,168,118) - $ 549,210,531
See accompanying schedule

Cash 3,993

Interest receivable 6,909,861

TOTAL ASSETS 556,124,385

LIABILITIES

Payable for investments purchased $ 13,722,026
Delayed delivery

Payable for fund shares redeemed 515,064

Distributions payable 640,509

Accrued management fee 255,503

Payable for daily variation on futures contracts 8,125

TOTAL LIABILITIES 15,141,227

NET ASSETS $ 540,983,158

Net Assets consist of:

Paid in capital $ 559,670,542

Accumulated undistributed net realized gain (loss) on (19,683,144)
investments

Net unrealized appreciation (depreciation) on 995,760
investments

NET ASSETS, for 52,955,902 shares outstanding $ 540,983,158

NET ASSET VALUE, offering price and redemption price $10.22
per share ($540,983,158 (divided by) 52,955,902 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 32,279,931

EXPENSES

Management fee $ 3,102,894

Non-interested Trustees' compensation 2,369

Total expenses before reductions 3,105,263

Expense reductions (81,389) 3,023,874

NET INTEREST INCOME 29,256,057

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

Investment securities 4,140,324

Futures contracts 232,339 4,372,663

Change in net unrealized appreciation (depreciation) on:

Investment securities (2,156,372)

Futures contracts (154,831) (2,311,203)

NET GAIN (LOSS) 2,061,460

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 31,317,517
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 29,256,057 $ 35,085,345
Net interest income

Net realized gain (loss) 4,372,663 (23,234,406)

Change in net unrealized appreciation (depreciation) (2,311,203) 27,681,497

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 31,317,517 39,532,436
FROM OPERATIONS

Distributions to shareholders (29,368,194) (35,181,331)
From net interest income

From net realized gain - (5,213,637)

TOTAL DISTRIBUTIONS (29,368,194) (40,394,968)

Share transactions 56,085,174 82,506,178
Net proceeds from sales of shares

Reinvestment of distributions 21,458,201 29,999,336

Cost of shares redeemed (112,605,741) (217,831,944)

Redemption fees 40,083 69,284

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (35,022,283) (105,257,146)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (33,072,960) (106,119,678)

NET ASSETS

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

End of period $ 540,983,158 $ 574,056,118

OTHER INFORMATION
Shares

Sold 5,425,396 8,465,664

Issued in reinvestment of distributions 2,078,975 3,070,143

Redeemed (10,923,817) (22,701,405)

Net increase (decrease) (3,419,446) (11,165,598)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED AUGUST 31,

1996 1995 1994 C 1993 1992

SELECTED PER-SHARE
DATA

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

Income from Investment .537 .587 .611 .663 .704
Operations
Net interest income

Net realized and .039 .189 (.752) .727 .387
unrealized gain
(loss)

Total from investment .576 .776 (.141) 1.390 1.091
operations

Less Distributions

From net interest (.537) E (.587) (.611) (.663) (.704)
income

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

Total distributions (.537) (.667) (1.161) (.733) (.744)

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

Net asset value, end $ 10.220 $ 10.180 $ 10.070 $ 11.370 $ 10.710
of period

TOTAL RETURN A, B 5.74% 8.20 (1.42) 13.55% 10.93%
% %

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 540,983 $ 574,056 $ 680,176 $ 912,710 $ 870,664

(000 omitted)

Ratio of expenses to .54% D .55 .55% .47% .36%
average net assets % D D

Ratio of net interest 5.18% 5.99 5.76% 6.09% 6.68%
income to average %
net assets

Portfolio turnover rate 49% 69 48% 50% 62%
%

</TABLE>

F 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).
G TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
H 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.
I 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).
J THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1996

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 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
transactions, market discount, capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect 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 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. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin 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.
Purchases and sales of securities, other than short-term securities,
aggregated $275,084,242 and $314,211,933, respectively.
The market value of futures contracts opened and closed during the period
amounted to $43,717,135 and $51,218,884, 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
$6,045 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses). For the period, the reimbursement reduced the expenses by
$59,880.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $21,509
under these arrangements.
6. PROPOSED REORGANIZATION.
The Board of Trustees of the Spartan Municipal Income Fund has approved an
Agreement and Plan of Reorganization and Liquidation ("Agreement") between
the Fund and Spartan Bond Strategist ("Reorganization"). The Agreement
provides for the transfer of substantially all of the assets and the
assumption of substantially all of the liabilities of Spartan Bond
Strategist in exchange solely for the number of shares of the Fund having
the same aggregate net asset value as the outstanding shares of Spartan
Bond Strategist at the close of business on the day that the Reorganization
is effective. The Reorganization can be consummated only if, among other
things, it is approved by the vote of a majority (as defined by the
Investment Company Act of 1940) of outstanding voting securities of Spartan
Bond Strategist. A Special Meeting of Shareholders (Meeting) of Spartan
Bond Strategist will be held on December 18, 1996 to vote on the Agreement.
A detailed description of the proposed transaction and voting information
will be sent to shareholders of the fund in October 1996. If the Agreement
is approved at the Meeting, the Reorganization is expected to become
effective on or about December 30, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Municipal Income Fund (formerly Spartan Municipal Income
Portfolio):
We have audited the accompanying statement of assets and liabilities of
Fidelity Union Street Trust: Spartan Municipal Income Fund (formerly
Spartan Municipal Income Portfolio), including the schedule of portfolio
investments, as of August 31, 1996, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended and the financial highlights for
each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Municipal Income Fund (formerly
Spartan Municipal Income Portfolio) as of August 31, 1996, the results of
its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
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
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 *
ADVISORY BOARD
William O. McCoy
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
Insured Municipal Income
Limited Term Municipal Income
Massachusetts Municipal Income
Michigan Municipal Income
Minnesota Municipal Income
Municipal Income
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 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

ANNUAL REPORT
AUGUST 31, 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.

REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in 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 AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Short-Intermediate Municipal Income 3.74% 29.52% 61.18%

Lehman Brothers 1-5 Year Municipal 3.90% n/a n/a
Bond Index

Short-Intermediate Municipal Debt 3.33% 30.93% n/a
Funds Average

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on December 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-intermediate municipal debt funds average,
which reflects the performance of 25 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past 12 months. Both
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Spartan Short-Intermediate Municipal 3.74% 5.31% 5.05%
Income

Lehman Brothers 1-5 Year Municipal 3.90% n/a n/a
Bond Index

Short-Intermediate Municipal Debt 3.33% 5.54% n/a
Funds 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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960831 19960920 135040 S00000000000001
SPARTAN Short-Int. LB Muni Bond
00404 SP001
1986/12/31 10000.00 10000.00
1987/01/31 10054.18 10301.10
1987/02/28 10117.67 10351.78
1987/03/31 10080.92 10242.05
1987/04/30 9812.58 9728.11
1987/05/31 9797.32 9679.85
1987/06/30 9956.02 9964.06
1987/07/31 10032.43 10065.69
1987/08/31 10016.89 10088.34
1987/09/30 9828.70 9716.38
1987/10/31 9745.54 9750.78
1987/11/30 9964.63 10005.37
1987/12/31 10026.48 10150.55
1988/01/31 10214.93 10512.11
1988/02/29 10245.98 10623.22
1988/03/31 10180.98 10499.99
1988/04/30 10232.39 10579.79
1988/05/31 10264.91 10549.22
1988/06/30 10288.74 10703.55
1988/07/31 10334.15 10773.34
1988/08/31 10328.97 10782.82
1988/09/30 10402.50 10977.99
1988/10/31 10466.28 11171.20
1988/11/30 10452.77 11068.87
1988/12/31 10517.06 11182.11
1989/01/31 10579.26 11413.35
1989/02/28 10541.78 11283.13
1989/03/31 10524.01 11256.16
1989/04/30 10585.62 11523.38
1989/05/31 10703.40 11762.72
1989/06/30 10787.87 11922.46
1989/07/31 10895.37 12084.72
1989/08/31 10922.27 11966.42
1989/09/30 10939.93 11930.76
1989/10/31 11024.75 12076.67
1989/11/30 11100.65 12288.01
1989/12/31 11179.77 12388.53
1990/01/31 11185.46 12329.93
1990/02/28 11275.65 12439.66
1990/03/31 11319.96 12443.40
1990/04/30 11301.88 12353.31
1990/05/31 11405.65 12622.98
1990/06/30 11462.04 12733.94
1990/07/31 11553.81 12921.12
1990/08/31 11572.98 12733.51
1990/09/30 11641.85 12740.77
1990/10/31 11728.44 12971.88
1990/11/30 11837.30 13232.75
1990/12/31 11897.05 13290.31
1991/01/31 12006.70 13468.67
1991/02/28 12080.42 13585.85
1991/03/31 12128.98 13590.74
1991/04/30 12243.38 13771.49
1991/05/31 12317.11 13893.92
1991/06/30 12351.10 13880.17
1991/07/31 12435.84 14049.23
1991/08/31 12534.72 14234.26
1991/09/30 12633.99 14419.59
1991/10/31 12717.78 14549.36
1991/11/30 12774.12 14589.95
1991/12/31 12950.15 14903.05
1992/01/31 13005.03 14937.03
1992/02/29 13057.07 14941.81
1992/03/31 13063.47 14947.34
1992/04/30 13148.54 15080.37
1992/05/31 13221.13 15257.87
1992/06/30 13330.35 15513.90
1992/07/31 13535.00 15979.00
1992/08/31 13480.28 15823.21
1992/09/30 13547.52 15926.69
1992/10/31 13546.27 15770.13
1992/11/30 13668.04 16052.58
1992/12/31 13750.95 16216.47
1993/01/31 13889.27 16405.07
1993/02/28 14133.72 16998.44
1993/03/31 14090.28 16818.77
1993/04/30 14157.47 16988.47
1993/05/31 14212.36 17083.94
1993/06/30 14307.62 17369.08
1993/07/31 14319.07 17391.83
1993/08/31 14473.15 17753.93
1993/09/30 14568.99 17956.14
1993/10/31 14595.28 17990.80
1993/11/30 14575.46 17832.30
1993/12/31 14730.26 18208.74
1994/01/31 14828.44 18416.68
1994/02/28 14674.56 17939.69
1994/03/31 14422.22 17209.19
1994/04/30 14476.68 17355.12
1994/05/31 14562.83 17505.59
1994/06/30 14586.33 17398.63
1994/07/31 14715.86 17717.55
1994/08/31 14770.41 17778.85
1994/09/30 14732.85 17517.86
1994/10/31 14681.26 17206.74
1994/11/30 14599.71 16895.64
1994/12/31 14717.74 17267.52
1995/01/31 14881.03 17761.02
1995/02/28 15053.88 18277.51
1995/03/31 15154.82 18487.52
1995/04/30 15209.30 18509.34
1995/05/31 15388.97 19099.97
1995/06/30 15412.09 18933.80
1995/07/31 15499.08 19113.29
1995/08/31 15649.11 19355.65
1995/09/30 15703.71 19478.17
1995/10/31 15791.10 19761.38
1995/11/30 15892.24 20089.22
1995/12/31 15964.36 20282.28
1996/01/31 16068.37 20435.41
1996/02/29 16072.92 20297.47
1996/03/31 16016.54 20038.07
1996/04/30 16023.44 19981.36
1996/05/31 16048.52 19973.37
1996/06/30 16119.84 20190.88
1996/07/31 16210.43 20374.62
1996/08/31 16235.99 20369.73
IMATRL PRASUN SHR__CHT 19960831 19960920 135045 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Short-Intermediate Municipal Income Fund on December
31, 1986, shortly after the fund started. As the chart shows, by August 31,
1996, the value of the investment would have grown to $16,236 - a 62.36%
increase on the initial investment. This assumes the fund was still owned
on August 31, 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 and capital gains, if any, reinvested, the same
$10,000 would have grown to $20,370 - a 103.70% 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,

1996 1995 1994 1993 1992

Dividend return 4.25% 4.53% 4.43% 4.82% 5.47%

Capital appreciation return -0.51% 1.41% -2.38% 2.53% 2.06%

Total return 3.74% 5.94% 2.05% 7.35% 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 AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.57(cents) 21.02(cents) 41.84(cents)

Annualized dividend rate 4.21% 4.19% 4.19%

30-day annualized yield 4.03% - -

30-day annualized tax-equivalent 6.30% - -
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 $9.98 over
the past month, $9.95 over the past six months and $9.98 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

MARKET RECAP
Increased demand for municipal
bonds in the face of continued low
supply allowed municipal bonds to
outperform taxable debt securities
during the 12 months ended
August 31, 1996. While the bond
market in general has been on a
slow slide throughout much of
1996, municipals have held their
ground better than most. For the
past 12 months, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 5.24%. In comparison, the
Lehman Brothers Aggregate Bond
Index - a proxy for
investment-grade taxable bonds
- - had a total return of 4.11%.
Factors that helped munis
outperform included a lack of
supply of new issues, strong
demand for municipal bonds from
insurance companies and the
diminishing likelihood of
significant tax reform in the near
future. Like most domestic bonds,
munis were hurt by
stronger-than-expected signs of
strength in the economy earlier in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the point
that munis ended the period
trading at expensive levels
relative to their taxable
counterparts.
An interview with Norm Lind, Portfolio Manager of Spartan
Short-Intermediate Municipal Income Fund
Q. NORM, HOW DID THE FUND PERFORM?
A. It outpaced its peers. For the year ended August 31, 1996, the fund had
a total return of 3.74%. That beat the short-intermediate municipal debt
funds average which returned 3.33% for the same period, as tracked by
Lipper Analytical Services. The Lehman Brothers 1-5 Year Municipal Bond
Index returned 3.90% for the same period.
Q. WHAT FACTORS HELPED THE FUND OVER THE PAST SIX MONTHS?
A. The fund's coupon and call structure played an important role.
Throughout the past year or so, I've been a buyer of premium bonds. The
premium - or above-par - price gives the bond DE MINIMIS protection, which
in the municipal market means that the bonds are protected from unfavorable
tax treatment that can occur during particular market environments. While
that structure hurt the fund somewhat when interest rates fell, the
structure overall has been a benefit for performance.
Q. DID YOU CHANGE THE WAY YOU ALLOCATED THE FUND'S INVESTMENT AMONG
SECURITIES WITH VARIOUS MATURITIES?
A. During the spring, I sold bonds in the shorter part of the fund's
maturity range, those in the one- to three-year range, and bought somewhat
longer-term bonds, in the four- to six-year range. The reason for that was
the fund's holdings in very short-term securities had performed well and
were at levels that, in my view, prohibited much additional appreciation.
By purchasing slightly longer-term bonds, I was able to pick up what I
believed to be a fairly significant amount of additional yield, without
incurring much additional interest rate risk, or the possibility that a
security will decline in value as a result of a rise in interest rates.
Q. DID YOU STICK WITH THAT STRATEGY THROUGHOUT THE SUMMER?
A. I shifted the strategy in the summer. The yield curve - a graphical
representation of the yields bonds of various maturities pay - flattened
during the summer. When the yield curve flattened, the four- to six-year
bonds didn't reward investors with as much additional yield over
shorter-term bonds as they did in the spring. As a result, I sold the four-
to six-year maturity bonds after they had performed well, and replaced them
with shorter-term securities.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Yes, I'd have to say that the fund's underweighting in California bonds
was one of my biggest disappointments during this period. California bonds
performed well as the state's economy rebounded, Orange County emerged from
bankruptcy and the state's debt received credit upgrades.
Q. NORM, WE UNDERSTAND THERE WERE SOME INVESTMENT POLICY CHANGES . . .
A. The fund will change some of its debt quality policies as part of the
standardization of quality policies for our fixed-income funds. Effective
June 24, 1996, the restriction limiting the fund's investments in BBB-rated
bonds - the lowest tier of investment-grade securities - has been
eliminated. This change allows the fund increased flexibility to invest in
the lowest tier of investment-grade bonds without significantly increasing
the risk of the fund. In addition, the fund reserves the right to invest up
to 5% of its holdings in below-investment-grade securities. This change
gives the fund additional flexibility under unusual circumstances. Further,
FMR now uses four agencies to determine the credit quality of the fund's
bonds. Moody's Investor's Service, Standard & Poor's, Duff & Phelps Rating
Co. and Fitch Investors Service, L.P. are used. In addition to the four
rating agencies, the fund relies on FMR's quality determinations when
purchasing securities.
Q. WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
A. I think some cautious optimism is in order right now. The level of
municipal yields, as a percentage of Treasury yields, is at the lower end
of its historical range. That suggests that municipals are at fair to
slightly high levels. Another reason for a bit of caution is that we could
see renewed talk of tax reform as we head into the heat of the campaign
season. Given all of that, I believe that the fund's structure is on target
for providing value over the long term, and I intend to maintain its
emphasis on premium, non-callable bonds.
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.

TOP FIVE STATES AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

New York 14.8 8.5

Massachusetts 12.1 10.7

Texas 8.7 10.0

California 6.0 9.0

Florida 5.4 5.0

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Escrowed/Pre-Refunded 23.6 19.9

Education 22.4 23.0

General Obligation 20.3 26.0

Electric Revenue 12.2 6.3

Special Tax 4.9 3.3

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 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 AUGUST 31, 1996
6 MONTHS AGO

Years 2.9 3.1

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. EFFECTIVE
JUNE, 1996, THE MODEL USED TO CALCULATE DURATIONS MAY HAVE BEEN SLIGHTLY
MODIFIED IN ORDER TO FURTHER REFINE THIS INFORMATION. THESE CHANGES IN
METHODOLOGY MAY PRODUCE ADJUSTMENTS IN HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Aaa, Aa, A 92.2%
Baa 0.8%
Non-rated 0.0%
Short-term
investments 7.0%
Aaa, Aa, A 91.2%
Baa 1.0%
Non-rated 1.6%
Short-term
investments 6.2%
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 1.6
Row: 1, Col: 4, Value: 43.0
Row: 1, Col: 5, Value: 48.0
Row: 1, Col: 1, Value: 6.2
Row: 1, Col: 2, Value: 2.6
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 45.0
Row: 1, Col: 5, Value: 46.0
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS AUGUST 31, 1996

Showing Percentage of Total Value of Investment in Securities

MUNICIPAL BONDS - 93.0%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
ALASKA - 1.5%
Alaska Student Loan Corp. Student Loan Rev. (b):
7.20% 7/1/99 (AMBAC Insured) $ 2,975 $ 3,142
5.55% 7/1/03 (AMBAC Insured) 1,000 1,006
North Slope Borough:
Series A, 0% 6/30/99 (MBIA Insured) 1,500 1,314
Series B, 0% 1/1/99 (MBIA Insured) 7,000 6,275
11,737
ARIZONA - 1.9%
Arizona Univ. Rev. (Board of Regents) Series B,
6.90% 6/1/16 (Pre-Refunded to 6/1/00 @ 102) (c) 1,000 1,094
Maricopa County Series C, 8.90% 7/1/99 4,000 4,450
Maricopa County School Dist. (Cap. Appreciation):
#4 Rfdg. (Mesa Unified)
0% 7/1/98 (FGIC Insured) 2,600 2,395
#28 Rfdg. (Kyrene Elementary)
0% 7/1/98 (FGIC Insured) 3,340 3,077
Phoenix Civic Impt. Corp. Excise Tax Rev. Rfdg.
(Arpt. Impts.) Series A (b):
5.60% 7/1/99 3,240 3,321
5.85% 7/1/01 1,000 1,041
15,378
ARKANSAS - 1.2%
Arkansas Student Loan Auth. Rev. Sr. Series A-1 (b):
6.05% 6/1/02 4,700 4,912
6.05% 12/1/02 4,455 4,672
9,584
CALIFORNIA - 4.0%
California Higher Ed. Loan Auth. Rev. Rfdg. (Student Loan)
Series E-2, 5.70% 12/1/98 (b) 4,000 4,060
California Rural Home Mtg. Fin. Auth. Lease Rev. Series A,
4.45% 8/1/01 (MBIA Insured) 3,500 3,443
Clovis Unified School Dist. Spl. Tax (Cap Appreciation)
Series B, 0% 8/1/00 (MBIA Insured) 5,725 4,745
Contra Costa School Fing. Auth. Rev. (Vista Unified
School Dist.) (Cap. Appreciation) 0% 9/1/00 (FSA Insured)
(Escrowed to Maturity) (c) 1,325 1,100
Los Angeles Dept. of Wtr. & Pwr. Rev. (Electric Plant)
Second Issue:
9% 10/15/00 1,300 1,508
9% 10/15/01 2,000 2,375
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Rosemead Redev. Agcy. (Sub. Lien Tax Allocation Proj.
Area 1) (c):
0% 10/1/96 (Escrowed to Maturity) $ 2,235 $ 2,229
0% 10/1/97 (Escrowed to Maturity) 1,875 1,796
0% 10/1/98 (Escrowed to Maturity) 1,000 916
0% 10/1/99 (Escrowed to Maturity) 2,205 1,924
San Bernardino County Ctfs. of Prtn. (Med. Ctr. Fing. Proj.)
4.75% 8/1/00 4,000 3,940
Santa Ana Commty Redev. Agcy. Tax Allocation (Santa Ana
Redev. PJ Area) Series B, 6.50% 12/15/14 1,225 1,305
Univ. of California Rev. Rfdg. (Multiple Purp. Projs.) Series C,
10% 9/1/99 (AMBAC Insured) 2,605 2,982
32,323
COLORADO - 0.3%
Aurora Ctfs. of Prtn. Rfdg. 4.75% 12/1/96 500 501
Pueblo Wtr. Rfdg. Series 1984 B, 9.50% 11/1/98
(MBIA Insured) 2,015 2,176
2,677
CONNECTICUT - 1.5%
Connecticut Gen. Oblig. Series C, 7% 9/15/02
(Pre-Refunded to 9/15/00 @ 102) (c) 2,235 2,456
Connecticut Resources Recovery Auth. Rev. (Bridgeport
Resco Co. LP Proj.) Series B, 8.20% 1/1/97 1,490 1,504
Connecticut Spl. Assessment Unemployment Compensation
Advanced Fund Rev. Rfdg. 5.50% 5/15/00 (AMBAC Insured) 8,000 8,230
12,190
DELAWARE - 0.5%
Delaware Trans. Auth. Trans. Sys. Rev. 7.50% 7/1/02
(MBIA Insured) 3,500 3,697
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 1,105
FLORIDA - 5.4%
Dade County School Dist. 6.875% 8/1/00 (MBIA Insured) 5,910 6,368
Florida Dept. of Trans. Gen. Oblig. 6.50% 7/1/02 1,975 2,150
Florida Div. Bldg. Finance Dept. General Services Rev.
(Dept. Natural Resources-Preservation 2000) Series A,
5.75% 7/1/99 (MBIA Insured) 7,250 7,495
Hillsborough County Aviation Auth. Rev. (Tampa Int'l Airport)
Series B, 7.10% 10/1/09 (AMBAC Insured)
(Pre-Refunded to 10/1/99 @ 102) (c) 2,000 2,185
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
FLORIDA - CONTINUED
Jacksonville Elec. Auth. Rev.:
7.10% 10/1/99 $ 1,500 $ 1,567
5.20% 7/1/01 (Escrowed to Maturity) (c) 2,145 2,156
Lakeland Elec. & Wtr. Rev. Rfdg. (Jr. Sub. Lien):
6.25% 10/1/00 (FGIC Insured) 9,175 9,703
6.25% 10/1/01 (FGIC Insured) 9,255 9,891
Sarasota Wtr. & Swr. Util. Rev. Rfdg.:
5.25% 10/1/98 (FGIC Insured) 500 510
6.25% 10/1/01 (FGIC Insured) 1,210 1,293
43,318
GEORGIA - 1.5%
Atlanta Arpt. Facs. Rev. Rfdg. 5% 1/1/01 (AMBAC Insured) 1,500 1,513
Fulton County Unltd. Tax 6.50% 1/1/01 1,000 1,022
Georgia Gen. Oblig.:
Series B, 6.25% 4/1/00 4,500 4,753
Series C, 6.25% 8/1/99 1,620 1,703
Series F, 6.50% 12/1/01 2,800 3,045
12,036
HAWAII - 0.6%
Hawaii Arpts. Sys. Rev. 2nd Series, 7.40% 7/1/02
(FGIC Insured) (b) 1,000 1,101
Hawaii Gen. Oblig. Unltd. Tax Series BS, 7.25% 9/1/08
(Pre-Refunded to 9/1/00 @ 101) (c) 3,000 3,315
4,416
ILLINOIS - 0.1%
Rock Island County Ctfs. of Prtn. 10% 12/1/96 (FGIC Insured) 840 851
INDIANA - 3.6%
Indianapolis Arpt. Auth. Rev. Rfdg. Series A, 5% 7/1/98
(FGIC Insured) 1,250 1,263
Indianapolis Local Pub. Impt. Series D, 0% 2/1/18
(Pre-Refunded to 2/1/98 @ 19.12) (c) 59,000 10,620
Indianapolis Resource Recovery Rev. Rfdg.
(Ogdenmartin Sys. Inc. Proj.) (a):
6% 12/1/00 (AMBAC Insured) 3,315 3,472
6.50% 12/1/01 (AMBAC Insured) 5,785 6,219
6% 12/1/02 (AMBAC Insured) 6,780 7,339
28,913
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
KENTUCKY - 2.7%
Kentucky Property & Bldgs. Commission 6% 11/1/00 $ 8,000 $ 8,350
Owensboro Elec. Lt. & Pwr. Rev. Rfdg. Series B:
0% 1/1/97 (AMBAC Insured) 3,025 2,983
0% 7/1/97 (AMBAC Insured) 1,000 965
0% 1/1/98 (AMBAC Insured) 2,000 1,883
0% 1/1/99 (AMBAC Insured) 3,300 2,958
0% 1/1/01 (AMBAC Insured) 5,450 4,394
21,533
LOUISIANA - 4.0%
Louisiana Gen. Oblig. 6% 8/1/01 (FGIC Insured) 4,500 4,726
Louisiana Pub. Facs. Auth. Rev.:
(Browning-Ferris Ind., Inc.) 3.85% 11/1/96 (b) 5,000 4,994
(Student Loan) Sr. Series A-1:
5.90% 3/1/99 2,140 2,180
6.20% 3/1/01 2,290 2,387
(Supplemental Student Loan):
Series B, 8.125% 12/1/99 (AMBAC Insured) 8,035 8,628
Series C, 8.125% 12/1/99 (AMBAC Insured) 3,815 4,096
Louisiana Recovery Dist. Sales Tax Rev. Series 1988, 4.25%
7/11/98 (MBIA Insured) BPA Swiss Bank 5,000 5,000
32,011
MAINE - 0.0%
Maine Edl. Loan Auth. Edl. Loan Rev. (Supplemental Ed.
Loan Prog.) Series A-1, 5.60% 12/1/96 (b) 255 255
MARYLAND - 1.7%
Maryland Gen. Oblig.:
5.30% 10/15/99 2,000 2,056
1st. Series 6.60% 3/1/00 2,000 2,135
Montgomery County Consolidated Pub. Impt. Series A:
5.50% 10/1/99 5,000 5,156
7% 4/1/07 (Pre-Refunded to 4/1/00 @ 102) (c) 2,000 2,190
Prince Georges County 6.20% 3/15/99 (MBIA Insured) 1,985 2,069
13,606
MASSACHUSETTS - 12.1%
Massachusetts Bay Trans. Auth. Series B, 7.60% 3/1/01 3,500 3,881
Massachusetts Gen. Oblig.:
(Cap. Appreciation) Series A, 0% 6/1/97 1,930 1,870
Consolidated Loan Series B, 9.25% 7/1/00 4,500 5,198
Consolidated Loan Series C, 6.90% 6/1/97
(AMBAC Insured) 1,000 1,022
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig.: - continued
Consolidated Loan Series C, 6.75% 8/1/06
(Pre-Refunded to 8/1/01 @ 102) (c) $ 1,000 $ 1,104
Massachusetts Ind. Fin. Agcy. Rev.:
Rfdg. (Morton Hosp. & Med. Ctr.) Series A, 8.75% 7/1/11
(Pre-Refunded to 7/1/99 @ 102) (c) 3,835 4,252
(Cap. Appreciation) (Massachusetts Biomedical Research)
Series A-1, 0% 8/1/00 4,510 3,693
(Massachusetts Biomedical Research) Series A-1,
7.10% 8/1/99 3,650 3,805
Massachusetts Tpk. Auth. (Guaranteed Bond Anticipation Notes)
Series A, 5% 6/1/99 14,025 14,218
Massachusetts Wtr. Reservoir Auth. Series A,
7.125% 4/1/00 1,500 1,614
Massachusetts Wtr. Resources Auth. Series A (c):
7.625% 4/1/14 (Pre-Refunded to 4/1/00 @ 102) 6,000 6,690
7% 4/1/18 (Pre-Refunded to 4/1/00 @ 102) 10,985 12,029
New England Ed. Loan Marketing Corp. Rfdg.
(Massachusetts Student Loan):
Sr. Issue D:
6% 9/1/99 7,000 7,236
6.20% 9/1/00 1,100 1,150
Series B, 5.40% 6/1/00 8,500 8,606
Series E, 5% 7/1/99 20,400 20,476
96,844
MICHIGAN - 0.8%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall Expansion Proj.):
4.75% 9/30/00 5,220 5,174
4.80% 9/30/01 1,000 988
6,162
MINNESOTA - 1.1%
Minneapolis Gen. Oblig. Unltd. Tax (Cap. Appreciation) Series B:
0% 12/1/02 1,300 949
0% 12/1/03 500 346
Minneapolis Unltd. Tax (Cap. Appreciation) (Sports Arena Proj.)
Series B:
0% 12/1/04 1,500 981
0% 12/1/05 1,500 923
Minnesota Gen. Oblig. 6.80% 8/1/02
(Pre-Refunded to 8/1/00 @ 100) (c) 2,500 2,694
Minnesota Gen. Oblig. Unltd. Tax 5.60% 10/1/02 1,500 1,571
Northern Muni Pwr. Agcy. Elec. Sys. Rev. Rfdg. Series A,
7.10% 1/1/98 1,300 1,343
8,807
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
MONTANA - 3.1%
Montana Higher Ed. Student Loan Assistance Corp.:
Student Loan Rev. (b):
Series B:
6.20% 12/1/97 $ 3,960 $ 4,029
6.40% 6/1/98 3,560 3,645
6.40% 12/1/98 4,095 4,218
6.60% 12/1/99 480 500
Sr. Series A, 4.75% 12/1/98 500 502
Sr. Series B:
4.70% 12/1/98 5,250 5,270
4.90% 12/1/99 7,000 7,043
25,207
NEBRASKA - 0.4%
Nebraska Pub. Pwr. Dist. Rev. 5.40% 7/1/01 3,085 3,154
NEW JERSEY - 1.5%
New Jersey Gen. Oblig. Rfdg.:
Series B, 6.25% 1/15/01 1,500 1,594
Unltd. Tax Series E, 5.50% 7/15/01 2,500 2,591
New Jersey Health Care Facs. Fing. Auth. Rev.
(Atlantic City Med. Ctr.) Series C:
5.80% 7/1/97 4,005 4,042
6.45% 7/1/02 3,500 3,648
11,875
NEW MEXICO - 2.4%
Albuquerque Arpt. Rev. Rfdg. 7.35% 7/1/01 (AMBAC Insured) 1,015 1,054
Albuquerque New Mexico Arpt. Rev. Rfdg. (a):
6.25% 7/1/98 (AMBAC Insured) 510 520
6.25% 7/1/99 (AMBAC Insured) 540 553
6.25% 7/1/00 (AMBAC Insured) 660 677
6.25% 7/1/01 (AMBAC Insured) 980 1,009
New Mexico Edl. Assistance Foundation Student Loan Rev. (b):
Sr. Series IV-A1:
6.40% 3/1/03 5,375 5,738
6.50% 3/1/04 3,370 3,627
Series A:
6.25% 4/1/98 (AMBAC Insured) 3,810 3,910
6.55% 4/1/00 (AMBAC Insured) 2,155 2,236
19,324
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
NEW YORK - 14.8%
Metro Transportation Auth. Svc. Contract (c):
Series 3, (Commuter Facs) 7.50% 7/1/16
(Pre-Refunded to 7/1/00 @ 102) $ 2,750 $ 3,070
Series 4:
(Commuter Facs.) 8% 7/1/08
(Pre-Refunded to 7/1/00 @ 101.50) 2,790 3,146
(Transit Facs.) 8% 7/1/08
(Pre-Refunded to 7/1/00 @ 101.50) 2,050 2,311
New York City Muni. Assistance Corp. 5.50% 7/1/00 1,000 1,033
New York State Dorm. Auth. Rev.:
(City Univ. Sys.) Series F, 7.875% 7/1/17
(Pre-Refunded to 7/1/00 @ 102) (c) 4,650 5,255
(City Univ. Sys. Consolidated) Series A,
7.625% 7/1/20 (Pre-Refunded to 7/1/00 @ 102) (c) 9,100 10,203
Lease Rev. Rfdg. (State University of New York)
5% 7/1/99 (AMBAC Insured) 8,885 8,985
(State Univ. Edl. Facs.) Series A, 7.70% 5/15/12
(Pre-Refunded to 5/15/00 @ 102) (c) 10,000 11,200
New York State Gen. Oblig. Crossover Rfdg.:
7.80% 11/15/98 12,820 13,749
7.80% 11/15/99 3,780 4,134
New York State Local Gov't. Assistance Corp.:
Series B:
7.50% 4/1/20 (Escrowed to Maturity) (c) 20,000 22,575
7% 4/1/21 5,150 5,626
Series D, 7% 4/1/18 (Pre-Refunded to 4/1/02 @ 102) (c) 10,700 11,998
New York State Med. Care Facs. Fin. Agcy. Rev.
(Mental Health Svc. Facs.) Series C, 7.30% 2/15/21
(Pre-Refunded to 8/15/01 @ 102) (c) 1,785 2,015
New York State Urban Dev. Corp. Rev. (c):
(Attica Proj.) 7.50% 4/1/20
(Pre-Refunded to 4/1/01 @ 102) 8,000 9,030
(Correctional Cap. Facs.), Series 1, 7.75% 1/1/14
(Pre-Refunded to 1/1/01 @ 102) 4,000 4,450
118,780
NEW YORK & NEW JERSEY - 0.4%
New York & New Jersey Port Auth. Series SS,
4.90% 9/1/97 (b) 3,000 3,000
NORTH CAROLINA - 1.2%
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys.
Rev. Rfdg. Series A, 7.875% 1/1/02 8,000 8,850
North Carolina Muni. Pwr. Agcy. Rev. Rfdg. (Proj. #1
Catawba Elec.) 5.75% 1/1/02 1,000 1,021
9,871
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
NORTH DAKOTA - 0.5%
North Dakota Hsg. Fin. Agcy. Rev. (Fing. Prog. Home Mtg.
Fing. Proj.) Series C, 3.85% 4/3/97 (FGIC Insured) (b) $ 1,300 $ 1,300
North Dakota Student Loan Rev. Rfdg. Series A, 5.70% 7/1/97 2,315 2,338
3,638
OHIO - 2.8%
Cleveland Arpt. Sys. Rev. Series B, 6.90% 1/1/99
(MBIA Insured) 2,080 2,187
Cleveland Wtrwks. Rev. Rfdg. & Impt. (1st. Mtg.)
6% 1/1/01 (MBIA Insured) 4,000 4,200
Cuyahoga County Hosp. Rev. Rfdg. & Impt.
6.50% 1/15/99 (MBIA Insured) 2,065 2,163
Franklin County Ltd. Tax (Courthouse) 6.375% 12/1/17
(Pre-Refunded to 12/1/01 @ 102) (c) 3,800 4,147
Franklin County Hosp. Rev. Rfdg. & Impt. (Riverside
United Hosp.) Series B, 7.60% 5/15/20 6,550 7,328
Ohio State Gen. Oblig. (Infrastructure Impt.) 3.85% 8/1/98 2,615 2,598
22,623
OKLAHOMA - 0.2%
Oklahoma Student Loan Auth. Rev. Rfdg. (Student Loan)
Series A, 5.35% 9/1/96 (b) 1,930 1,930
PENNSYLVANIA - 1.6%
Erie County School Dist. (Cap. Appreciation) (c):
0% 12/1/96 (Escrowed to Maturity) 1,125 1,115
0% 6/1/97 (Escrowed to Maturity) 1,435 1,394
0% 12/1/97 (Escrowed to Maturity) 1,405 1,338
0% 6/1/98 (Escrowed to Maturity) 905 845
0% 12/1/98 (Escrowed to Maturity) 1,770 1,617
Pennsylvania Gen. Oblig. 6.50% 10/15/01 (FSA Insured) 1000 1,017
Pennsylvania Higher Ed. (Presbyterian Med. Ctr. Proj.)
5.125% 1/1/01 4,000 4,040
Pittsburgh Gen. Oblig. Rfdg. Series B,
6.75% 3/1/97 (FGIC Insured) 1,700 1,723
13,089
PUERTO RICO - 0.3%
Puerto Rico Elec. Pwr. Auth. Pwr. Resources Auth. Rev.
7.125% 7/1/14 (Escrowed to Maturity) (c) 2,500 2,719
RHODE ISLAND - 1.8%
Rhode Island Student Loan Auth. Student Loan Rev. Rfdg.
Series A, 6% 12/1/97 14,000 14,175
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
SOUTH CAROLINA - 3.6%
South Carolina Ed. Assistance Auth. Rev. (b):
Rfdg. (Guaranteed Student Loan) Sub. Lien B, 5% 9/1/99 $ 7,045 $ 7,115
(Insured Student Loan):
6.50% 9/1/98 5,000 5,213
6.90% 9/1/98 2,950 3,075
6.60% 9/1/99 2,845 3,001
6.30% 9/1/01 1,400 1,454
South Carolina Pub. Svc. Auth. Rfdg.:
(Santee Cooper) Series B, 6.50% 7/1/26 3,145 3,432
Series A:
6% 1/1/97 (MBIA Insured) 3,500 3,522
6.25% 1/1/01 (AMBAC Insured) 2,005 2,116
28,928
SOUTH DAKOTA - 0.5%
South Dakota Student Loan Fin. Corp. Student Loan Rev.
Series A, 5.70% 8/1/99 (b) 3,575 3,602
TENNESSEE - 0.3%
Tennessee Gen. Oblig. Series B, 6.10% 6/1/00 2,025 2,126
TEXAS - 6.2%
Alamo Commty. Dist. Rfdg.:
0% 2/15/99 (AMBAC Insured) 2,530 2,258
0% 2/15/00 (AMBAC Insured) 3,350 2,843
Alief Independent School Dist. Rfdg. 0% 2/15/02
(PSF Guaranteed) 1,000 769
Arlington Independent School Dist. School Bldg. Rfdg.
(Cap. Appreciation) 0% 8/15/97 (MBIA Insured) 1,250 1,201
Austin Util. Sys. Rev. Rfdg.:
(Prior Lien) Series B, 7% 11/15/98 (FGIC Insured) 3,175 3,346
Series A, 0% 11/15/98 (MBIA Insured) 3,000 2,715
Austin Wtr. Swr. & Elec. Rev. Rfdg.:
11% 11/15/96 (Escrowed to Maturity) (c) 130 132
Sub. Lien 11% 11/15/96 (Escrowed to Maturity) (c) 510 517
Sub. Lien 11% 11/15/96 3,175 3,195
Beaumont Gen. Oblig. Rfdg. 7.10% 3/1/98 (FGIC Insured) 1,000 1,015
Brazos Higher Ed. Auth. Student Loan Rev. Rfdg. Series C-1,
5.15% 6/1/99 (b) 9,875 9,961
Colorado River Wtr. Resources Auth. Rev. 8.50% 1/1/01 2,200 2,503
Conroe Independent School Dist. Rfdg. 0% 2/1/00
(MBIA Insured) (Escrowed to Maturity) (c) 1,190 985
Corpus Christi Independent School Dist. 0% 8/15/01
(PSF Guaranteed) 1,600 1,260
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
TEXAS - CONTINUED
Dallas County Gen. Oblig. 7% 8/15/01 $ 1,750 $ 1,923
Harris County Toll Road Sub. Lien. Rev. Unltd. Tax Rfdg.
(Cap. Appreciation) 0% 8/1/01 3,490 2,748
San Antonio Elec. & Gas Rev. 6.40% 2/1/98 3,000 3,037
Texas Gen. Oblig. Superconducting (Cap Appreciation)
Series C, 0% 4/1/02 (FGIC Insured) 2,750 2,090
Texas Pub. Fin. Auth. Rfdg. Series A, 0% 10/1/01
(AMBAC Insured) 9,000 7,042
49,540
UTAH - 4.5%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.:
Series B:
0% 7/1/01 (AMBAC Insured) 5,000 3,919
5.50% 7/1/01 (MBIA Insured) 13,825 14,240
0% 7/1/15 (AMBAC Insured)
(Pre-Refunded to 7/1/00 @ 101) (c) 7,500 6,300
Series C:
6% 7/1/01 (MBIA Insured) 2,000 2,098
Provo City Energy Sys. Rev. Series A, 7.625% 11/1/12
(FGIC Insured) (Pre-Refunded to 11/1/99 @ 100) (c) 5,000 5,450
Salt Lake Wtr. & Swr. Rev. Rfdg. 6% 2/1/01 (AMBAC Insured) 1,650 1,722
Utah Associated Muni. Pwr. Sys. Rev. Rfdg. (Cap. Appreciation)
(Hunter Proj.) 0% 7/1/98 (AMBAC Insured) 2,765 2,553
36,282
VERMONT - 0.3%
Vermont Student Assistance Corp. Edl. Loan Rev. Rfdg. Fing.
Prog. Series A, 6.35% 6/15/99 (AMBAC Insured) 2,500 2,597
VIRGINIA - 0.2%
Richmond Pub. Impt. Series A, 6.50% 1/15/06
(Pre-Refunded to 1/15/01 @ 102) (c) 1,500 1,629
WASHINGTON - 1.8%
Washington Gen. Oblig.:
Series 96-A, 6.75% 7/1/01 3,780 4,097
Series R 96-B, 5.50% 7/1/02 1,000 1,031
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 2,929
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #1 Rev. Rfdg.:
Series A:
7.25% 7/1/99 2,760 2,922
6.50% 7/1/02 1,000 1,061
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
WASHINGTON - CONTINUED
Washington Pub. Pwr. Supply Sys. Nuclear Proj #2 Rev. Rfdg.
Series A, 6.50% 7/1/02 $ 2,220 $ 2,356
14,396
TOTAL MUNICIPAL BONDS
(Cost $743,010) 745,928
MUNICIPAL NOTES - 7.0%
CALIFORNIA - 2.0%
Fresno County Unltd. Tax TRAN 4.75% 9/29/97 5,500 5,539
Los Angeles Unified School Dist. TRAN
Series B, 4.50% 9/30/97 10,000 10,045
15,584
DELAWARE - 0.0%
Delaware Economic Dev. Auth. Rev. Board (Delmarva Pwr. &
Light Co. Proj.) (b)(d):
Series 87, 3.80%, VRDN 200 200
Series 88, 3.80%, VRDN 100 100
300
ILLINOIS - 1.3%
Illinois Dev. Fin. Auth. Rev. Residential Rental (F.C. Harris
Pavilion Proj.) Series 150% (FNMA Insured), VRDN (b)(d) 7,810 7,810
Illinois Health Fac. Auth. (Gottleib Health Resources, Inc.) 4%,
LOC Harris Trust & Savings Bank of Chicago, VRDN (d) 2,500 2,500
Southwestern Illinios Dev. Auth. Solid Waste Disp. Rev.
(Shell Oil Co. Wood River Proj.) Series 1992, 3.95%
VRDN (b)(d) 400 400
10,710
LOUISIANA - 0.5%
Calcasieu Parish, Inc. Ind. Dev. Board Envir. Rev. Rfdg.
(Citgo Petroleum Corp.) 4%, LOC Banque Nat'l. De Paris,
VRDN (b)(d) 1,600 1,600
St. Charles Parish Poll. Cont. Resources Recovery
(Shell Oil Co. Norco Proj.) Series 1991, 3.95%, VRDN (b)(d) 900 900
West Baton Rouge Parish Ind. Dist. #3 Rev. (Dow Chemical Co.)
Series 1993, 4%, VRDN (b)(d) 1,200 1,200
3,700
MICHIGAN - 0.2%
Michigan Strategic Fund Rev. (Dow Chemical Co. Proj.)
Series 1992 3.95% VRDN (b)(d) 1,600 1,600
MUNICIPAL NOTES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
TEXAS - 2.5%
Brazos River Auth. Poll. Cont. Rev. Rfdg. (Util. Co. Proj.)
Series 1996-A, 3.95% (AMBAC Insured)
BPA Bank of New York, VRDN (b)(d) $ 800 $ 800
Brazos River Hbr. Navigation Dist. of Brazoria County Rev.
(Dow Chemical Proj.) (b)(d):
Series1992 A, 4%, VRDN 2,500 2,500
Series 1993, 4%, VRDN 5,100 5,100
Series 1996, 4%, VRDN 4,300 4,300
Gulf Coast Ind. Dev. Auth. Solid Waste Disposal Rev.
(Citgo Petroleum) 4%, LOC Wachovia Bank, VRDN (b)(d) 2,900 2,900
Texas Gen. Oblig. TRAN Series 1996, 4.75% 8/29/97 3,900 3,932
Trinity River Auth. Poll. Cont. Rev. Coll. (Texas Utils. Elec. Co. Proj.)
Series 96-A, 3.95% BPA Bank of New York (AMBAC Insured)
VRDN (b)(d) 400 400
19,932
VERMONT - 0.1%
Vermont Ind. Dev. Auth. Ind. Dev. Rev. Resources Recovery
(Ryegate Proj.) Series 1990, 3.55%, LOC ABN-AMRO Bank
VRDN (b)(d) 1,000 1,000
VIRGINIA - 0.4%
Hopewell Ind. Dev. Auth. Rev. (Hadson Pwr. 13-Hopewell Proj.)
Series 1990 A, 4.10%, LOC Cr. Suisse Bank, VRDN (b)(d) 1,000 1,000
Virginia Hsg. Dev. Auth. Commonwealth Mtg. (b):
Series 1996-B, 3.70% 10/24/96 MT 1,000 1,000
Series 1996-B, 3.75% 12/5/96 MT 1,000 1,000
3,000
TOTAL MUNICIPAL NOTES
(Cost $55,829) 55,826
TOTAL INVESTMENTS - 100%
(Cost $798,839) $ 801,754
SECURITY TYPE ABBREVIATIONS
TRAN - Tax and Revenue Anticipation
Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Security collateralized by an amount sufficient to pay interest and
principal.
4. 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 83.8% AAA, AA, A 72.6%
Baa 0.8% BBB 5.6%
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:
Escrowed/Prerefunded 23.6%
Education 22.4
General Obligation 20.3
Electric Revenue 12.2
Others (individually less than 5%) 21.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $798,882,000,. Net unrealized appreciation aggregated
$2,872,000, of which $6,124,000 related to appreciated investment
securities and $3,252,000 related to depreciated investment securities.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $6,706,000 of which $5,803,000 and $903,000 will expire on
August 31, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
(EXCEPT PER-SHARE AMOUNT) AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $798,839) - $ 801,754
See accompanying schedule

Receivable for investments sold 4,800

Interest receivable 10,611

TOTAL ASSETS 817,165

LIABILITIES

Payable to custodian bank $ 12

Payable for investments purchased 5,000
Regular delivery

Delayed delivery 19,237

Payable for fund shares redeemed 1,236

Distributions payable 413

Accrued management fee 371

TOTAL LIABILITIES 26,269

NET ASSETS $ 790,896

Net Assets consist of:

Paid in capital $ 795,274

Accumulated undistributed net realized gain (loss) on (7,293)
investments

Net unrealized appreciation (depreciation) on 2,915
investments

NET ASSETS, for 79,646 shares outstanding $ 790,896

NET ASSET VALUE, offering price and redemption price $9.93
per share ($790,896 (divided by) 79,646 shares)

STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 40,661

EXPENSES

Management fee $ 4,739

Non-interested trustees' compensation 4

Total expenses before reductions 4,743

Expense reductions (80) 4,663

NET INTEREST INCOME 35,998

REALIZED AND UNREALIZED GAIN (LOSS) 4,480
Net realized gain (loss) on investment securities

Change in net unrealized appreciation (depreciation) on (8,617)
investment securities

NET GAIN (LOSS) (4,137)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 31,861
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 35,998 $ 41,879
Net interest income

Net realized gain (loss) 4,480 (6,557)

Change in net unrealized appreciation (depreciation) (8,617) 15,567

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 31,861 50,889
FROM OPERATIONS

Distributions to shareholders from net interest income (35,998) (41,879)

Share transactions 245,045 358,751
Net proceeds from sales of shares

Reinvestment of distributions 30,960 36,316

Cost of shares redeemed (389,809) (577,976)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (113,804) (182,909)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (117,941) (173,899)

NET ASSETS

Beginning of period 908,837 1,082,736

End of period $ 790,896 $ 908,837

OTHER INFORMATION
Shares

Sold 24,534 36,591

Issued in reinvestment of distributions 3,101 3,705

Redeemed (39,055) (59,215)

Net increase (decrease) (11,420) (18,919)

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS YEARS ENDED AUGUST 31, EIGHT MONTHS YEARS ENDED DECEMBER 31,
ENDED AUGUST 31,

1996 1995 1994 D 1993 1992 1991

SELECTED PER-SHARE DATA

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

Income from Investment
Operations .418 .429 .443 .303 .490 .559
Net interest income

Net realized and unrealized
gain (loss) (.050) .140 (.240) .210 .100 .260

Total from investment
operations .368 .569 .203 .513 .590 .819

Less Distributions

From net interest income (.418) (.429) (.443) (.303) (.490) (.559)

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

Total distributions (.418) (.429) (.453) (.303) (.490) (.559)

Net asset value, end of period $ 9.930 $ 9.980 $ 9.840 $ 10.090 $ 9.880 $ 9.780

TOTAL RETURN B, C 3.75% 5.95% 2.05% 5.25% 6.18% 8.85%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period
(in millions) $ 791 $ 909 $ 1,083 $ 967 $ 659 $ 244

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

Ratio of net interest income
to average 4.17% 4.38% 4.45% 4.55% A 4.95% 5.68%
net assets

Portfolio turnover rate 78% 51% 44% 56% A 28% 59%

</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 August 31, 1996

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 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 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 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 $673,844,000 and $824,141,000, 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
$12,000 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse a portion of the fund's expenses. For the period,
the reimbursement reduced the expenses by $56,000.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $24,000
under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Short-Intermediate Municipal Income Fund (formerly Spartan
Short-Intermediate Municipal Fund):
We have audited the accompanying statement of assets and liabilities of
Fidelity Union Street Trust: Spartan Short-Intermediate Municipal Income
Fund (formerly Spartan Short-Intermediate Municipal Fund), including the
schedule of portfolio investments, as of August 31, 1996, and the related
statement of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended,
the eight month period ended August 31, 1993, and for each of the two years
in the period ended December 31, 1992. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1996 by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Short-Intermediate Municipal Income
Fund (formerly Spartan Short-Intermediate Municipal Fund) as of August 31,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended,
the eight month period ended August 31, 1993, and for each of the two years
in the period ended December 31, 1992, in conformity with generally
accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 4, 1996
TO CALL FIDELITY

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AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
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 *
ADVISORY BOARD
William O. McCoy
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
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Minnesota Municipal Income
Municipal Income
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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 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 Income
THE FIDELITY TELEPHONE CONNECTION
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SPARTAN

(registered trademark)
(registered trademark)
MARYLAND
MUNICIPAL INCOME
FUND
ANNUAL REPORT
AUGUST 31, 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 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 19 Notes to the financial statements.

REPORT OF INDEPENDENT 22 The auditor's opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
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.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

Spartan Maryland Municipal Income Fund 5.11% 18.07%

Lehman Brothers Maryland 4 Plus Year 4.56% n/a
Municipal Bond Index

Maryland Municipal Debt Funds Average 4.69% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
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 is a total return
performance benchmark for Maryland investment-grade municipal bonds with
maturities of at least four years. 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 mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. over the
past 12 months. Both benchmarks include reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1996 PAST 1 LIFE OF
YEAR FUND

Spartan Maryland Municipal Income Fund 5.11% 5.06%

Lehman Brothers Maryland 4 Plus Year 4.56% n/a
Municipal Bond Index

Maryland Municipal Debt Funds Average 4.69% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Maryland Municipal Income Fund on April 30, 1993,
shortly after the fund started. As the chart shows, by August 31, 1996, the
value of the investment would have grown to $11,818 - an 18.18% increase on
the initial investment. This assumes the fund was still owned on August 31,
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 $11,990 - a 19.90% 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 22, 1993
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31,

1996 1995 1994 1993

Dividend return 5.02% 5.99% 5.22% 1.99%

Capital appreciation return 0.09% 2.06% -6.70% 3.48%

Total return 5.11% 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 on an average size account.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 3.96(cents) 23.82(cents) 48.79(cents)

Annualized dividend rate 4.68% 4.80% 4.91%

30-day annualized yield 4.70% - -

30-day annualized tax-equivalent yield 7.98% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.97 over
the past month, $9.85 over the past six months and $9.94 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.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Increased demand for municipal
bonds in the face of continued low
supply allowed municipal bonds to
outperform taxable debt securities
during the 12 months ended
August 31, 1996. While the bond
market in general has been on a
slow slide throughout much of
1996, municipals have held their
ground better than most. For the
past 12 months, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return
of 5.24%. In comparison, the
Lehman Brothers Aggregate Bond
Index - a proxy for
investment-grade taxable bonds
- - had a total return of 4.11%.
Factors that helped munis
outperform included a lack of
supply of new issues, strong
demand for municipal bonds from
insurance companies and the
diminishing likelihood of
significant tax reform in the near
future. Like most domestic bonds,
munis were hurt by
stronger-than-expected signs of
strength in the economy earlier in
1996. Nevertheless, the market
conditions that supported the
muni market prevailed to the point
that munis ended the period
trading at expensive levels
relative to their taxable
counterparts.
An interview with Steven Harvey, Portfolio Manager of Spartan Maryland
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, STEVE?
A. Quite well. For the one-year period ended August 31, 1996, the fund
compiled a total return of 5.11%. For comparison, the Maryland municipal
debt funds average, as monitored by Lipper Analytical Services, posted a
return of 4.69% for the period, while the Lehman Brothers Maryland 4 Plus
Year Municipal Bond Index produced a return of 4.56%.
Q. FIXED-INCOME MARKETS AS A WHOLE WERE SKITTISH DURING THE PERIOD. WHAT
FACTORS CONTRIBUTED TO THE UNCERTAINTY IN THE MUNICIPAL MARKET?
A. I think potential tax reform issues played a big role. At the beginning
of the period, there was much talk, particularly in the political arena,
about the possibility of implementing a flat tax. This brought the
tax-exempt status of municipals into question, and I think investors were
hesitant to make long-term commitments to the municipal market. As spring
and summer approached, a few things happened to right the ship. Flat tax
discussion faded, record redemptions and maturities in the market made for
stronger demand, and investors who had been favoring other asset classes
made the switch to municipals.
Q. WHICH INDIVIDUAL HOLDINGS HAD AN IMPACT ON THE FUND DURING THE PERIOD?
A. Two hospital-related holdings - Howard County General Hospital and
Greater Southeast Health System - affected the fund on opposite ends of the
spectrum. On the positive side, the bonds issued by Howard County General
Hospital are Baa1-rated, and the hospital itself is a major health care
provider in Howard county, one of the fastest-growing economic regions in
Maryland. Greater Southeast Health System, on the other hand, detracted
from performance. Greater Southeast has its primary location in the
District of Columbia area, and when financial problems plagued D.C., the
hospital felt the ramifications, particularly in terms of receiving
Medicaid payments. Aside from individual positions, I was also able to take
advantage of opportunities in "insured" bonds.
Q. COULD YOU EXPLAIN THE CONCEPT OF INSURED BONDS AND THE ROLE THEY PLAYED
IN THE PORTFOLIO?
A. Sure. When a bond carries insurance, it doesn't mean that the value of
the bond is guaranteed. The value can change - and it surely will. Rather,
insurance refers to the fact that a municipal bond insurer has issued a
policy that states if the original issuer of the bond becomes unable to pay
principal and interest on the bond, the insurer will step in and make good
on those payments. Insured bonds have become quite popular in recent years,
so popular in fact that today nearly half of all new municipal bond
issuance carries this feature. I'll buy insured bonds if I like the
structure of the bond and if our credit research on the bond insurer checks
out. Insured bonds have generally had a positive impact on the fund.
Q. WE UNDERSTAND THERE WERE SOME INVESTMENT POLICY CHANGES . . .
A. Yes. As of June 24, 1996, the fund reserves the right to invest up to 5%
of its assets - down from 35% - in below-investment-grade securities. The
fund does not intend to seek out the lower-quality, below-investment-grade
bonds. Instead, this change helps the fund maintain a degree of flexibility
under unusual circumstances. Further, the fund now uses two additional
agencies to determine the credit quality of its bonds. Ratings from Duff &
Phelps Rating Co. and Fitch Investors Service, L.P., may be used, along
with those from Moody's and Standard & Poor's that the fund had been using
previously.
Q. MARYLAND HAS HISTORICALLY BEEN A HIGH-QUALITY STATE IN WHICH TO INVEST.
WHAT DO YOU LOOK FOR WHEN SIFTING THROUGH THE STATE'S BOND SUPPLY?
A. In managing this fund, one of the challenges is finding opportunities in
lower-quality, investment-grade issues. However, because the state is
teeming with higher quality issues, this can be a tough chore. Maryland's
AAA rating, which it has held every year since the Great Depression, is a
source of pride for the state. In fact, there have been instances where the
high rating has had a degree of influence on governmental decision-making.
I wouldn't want to be governor of the state if that rating should ever
slip.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. One thing that will continue to be a factor for municipal bond returns
will be that bond insurance will remain a dominant feature of new issuance.
As more and more bonds are issued with insurance, this will make the
selection of uninsured bonds much narrower. I also think credit spreads -
yields of higher-quality bonds relative to lower-quality issues - will
tighten as investors look harder to find good, stable, investment-grade
securities.
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.

TOP FIVE SECTORS AS OF AUGUST 31, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO

General Obligation 41.5 49.4

Health Care 13.7 9.8

Housing 9.0 14.0

Transportation 7.2 1.6

Industrial Development 6.9 5.4

AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 12.5 13.0

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1996
6 MONTHS AGO

Years 7.3 7.3

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. BEGINNING
WITH THE REPORTING CYCLE OF JUNE,1996, THE MODEL USED TO CALCULATE
DURATIONS MAY BE SLIGHTLY MODIFIED IN ORDER TO FURTHER REFINE THIS
INFORMATION. THESE CHANGES IN METHODOLOGY MAY PRODUCE ADJUSTMENTS IN
HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1996 AS OF FEBRUARY 29, 1996
Aaa 58.8%
Aa, A 30.7%
Baa 4.4%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 6.1%
Aaa 48.4%
Aa, A 38.1%
Baa 8.1%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 5.4%
Row: 1, Col: 1, Value: 58.8
Row: 1, Col: 2, Value: 30.7
Row: 1, Col: 3, Value: 4.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 6.1
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
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS AUGUST 31, 1996
Showing Percentage of Total Value of Investments

MUNICIPAL BONDS - 93.9%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
MARYLAND - 91.5%
Anne Arundel County 7% 8/1/04 Aa $ 550,000 $ 618,062
Baltimore Consolidated Pub. Impt.:
Rfdg. Series A, 0% 10/15/06 (FGIC Insured) Aaa 2,000,000 1,150,000
Rfdg. Series D, 6% 10/15/04 (AMBAC Insured) Aaa 500,000 531,875
Series A, 7% 10/15/09 (MBIA Insured) Aaa 500,000 570,625
Series B, 7.05% 10/15/07 (MBIA Insured) Aaa 1,000,000 1,147,500
Baltimore County Consolidated Pub. Impt.
5.70% 7/1/02 Aaa 1,000,000 1,048,750
Baltimore County Metropolitan Dist.:
Series 63, 6.125% 7/1/07 Aaa 850,000 899,937
Series 65, 6% 6/1/05 Aaa 1,400,000 1,492,750
Baltimore County. Mtg. Rev. Rfdg.
(Northbrooke Apts. Proj.) Series A,
6.35% 1/20/21 (GNMA Insured) Aaa 1,000,000 1,007,500
Baltimore Port. Facs. Rev. (Cons. Coal Sales Co.)
6.50% 12/1/10 Aa2 2,000,000 2,135,000
Baltimore Rev. Rfdg. (Wtr. Proj.) Series A,
5.50% 7/1/26 (FGIC Insured) Aaa 1,100,000 1,043,625
Calvert County Gen. Oblig. 5.20% 1/1/04 Aa 1,200,000 1,210,500
Frederick County Pub. Facs. 5.60% 7/1/11 Aa 750,000 746,250
Howard County Metropolitan Dist. Rfdg. Series B,
6% 8/15/03 Aaa 1,000,000 1,065,000
Maryland Commty. Dev. Admin. Dept. of Hsg. &
Commty. Dev. Rev. (Single Family Prog.)
7th Series, 7.25% 4/1/19 (b) Aa 500,000 525,625
Maryland Gen. Oblig. (Maryland State & Local
Facs. Loan) 1st Series:
5.30% 3/15/05 Aaa 2,000,000 2,052,500
5.50% 2/1/06 Aaa 1,620,000 1,666,575
4.50% 2/15/08 Aaa 1,000,000 926,250
Maryland Health & Higher Edl. Facs. Auth. Rev. Rfdg.:
(Good Samaritan Hosp.):
5.70% 7/1/09 A1 1,000,000 1,001,250
5.75% 7/1/13 A1 385,000 381,150
(Greater Baltimore Med. Ctr.) 5% 7/1/19
(FGIC Insured) Aaa 3,000,000 2,643,750
(Howard County Gen. Hosp.)
5.50% 7/1/13 Baa1 1,000,000 905,000
(Johns Hopkins Univ.) Series 1988,
7.50% 7/1/20 Aa1 1,000,000 1,063,750
Maryland Ind. Dev. Fing. Auth. Rev. Rfdg.
(Holy Cross Health Sys. Corp.)
5.70% 12/1/10 Aa 1,000,000 1,003,750
Maryland Trans. Auth. Trans. Facs. Rev.:
Rfdg. 5.50% 7/1/03 A1 725,000 748,563
Rfdg. 5.80% 7/1/06 A1 500,000 521,250
6.80% 7/1/16 (Escrowed to maturity) (d) Aaa 975,000 1,057,875
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
MARYLAND - CONTINUED
Montgomery County Consolidated Pub. Impt.:
Rfdg. Series A, 5.40% 7/1/02 Aaa $ 1,000,000 $ 1,031,250
Series A, 5.625% 10/1/06 Aaa 1,500,000 1,567,500
Montgomery County Hsg. Opportunities Commission
Single Family Mtg. Series A, 6.60% 7/1/14 Aa 1,000,000 1,022,500
Northeast Waste Disp. Auth. Solid Waste Rev.
(Montgomery County Resource Recovery Proj.)
Series A (b):
5.90% 7/1/05 A 600,000 606,750
6% 7/1/07 A 500,000 503,125
6.30% 7/1/16 (MBIA Insured) Aaa 1,000,000 1,033,750
Prince Georges County Hsg. Auth. Rev.:
Rfdg. (Riverview Terrace) 6.70% 6/20/20 Aaa 1,000,000 1,042,500
Single Family Rev. Series A, 6.50% 12/1/15 (b) Aaa 465,000 477,206
Washington Metropolitan Area Trans. Auth. Rev. Rfdg.:
6% 7/1/09 (FGIC Insured) Aaa 600,000 624,750
6% 7/1/10 (FGIC Insured) (f) Aaa 2,570,000 2,669,588
Washington Suburban Sanitation Dist. 2nd Series:
Rfdg. 8% 1/1/02 Aa1 1,000,000 1,152,500
6.75% 6/1/01 Aa1 590,000 639,413
Worcester County Sanitation Dist. Rfdg.
Series J, 6% 8/15/02 Aa 100,000 105,500
41,640,994
PUERTO RICO - 2.4%
Puerto Rico Aqueduct & Swr. Auth. Rev.
Series A, 7.90% 7/1/07
(Pre-Refunded to 7/1/98 @ 102) (d) Baa1 1,000,000 1,086,250
TOTAL MUNICIPAL BONDS
(Cost $42,764,909) 42,727,244
MUNICIPAL NOTES (A) - 6.1.%
MARYLAND - 6.1%
Baltimore County Econ. Dev. Rev. Rfdg.
(Blue Circle, Inc. Proj.) Series 1992,
3.45%, LOC Den Danske Bank, VRDN VMIG 1 700,000 700,000
Baltimore Econ. Dev. Rev. (Rock-Tenn
Converting Co.) Series 87, 3.65%
LOC SunTrust Bank, VRDN (b) - 300,000 300,000
Maryland Commty. Dev. Admin. Dept.
of Hsg. & Commty. Dev. Participating VRDN,
Series PT-36, 3.70% (Liquidity Facility Banque
Nationale de Paris) (b) (e) Aa 980,000 980,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
MARYLAND - CONTINUED
Maryland Health & Higher Edl. Facs. Auth. Rev. Rfdg.
(Kaiser Permanente Health Sys.) Series A,
3.40%, VRDN VMIG 1 $ 300,000 $ 300,000
Montgomery County Hsg. Opportunities Commission
Single Family Mtg. Participating VRDN,
Series PA-40, 3.60%
(Liquidity Facility Merrill Lynch & Co., Inc.) (e) Aa 500,000 500,000
TOTAL MUNICIPAL NOTES
(Cost $2,780,000) 2,780,000
TOTAL INVESTMENTS - 100%
(Cost $45,544,909) $ 45,507,244
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
6 Treasury Bond Contracts Sep. 1996 $ 643,875 $ (25,742)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.4%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
6. The coupon rate shown on floating or adjustable rate securities
represents the
rate at period end.
7. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
8. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
9. Security collateralized by an amount sufficient to pay interest and
principal.
10. Provides evidence of ownership in one or more underlying municipal
bonds.
11. Security was pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$2,669,588.
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 84.0% AAA, AA, A 85.8%
Baa 4.4% BBB 2.0%
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 41.5%
Health Care 13.7
Housing 9.0
Transportation 7.2
Industrial Development 6.9
Others (individually less than 5%) 21.7
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1996, the aggregate cost of investment securities for income
tax purposes was $45,544,909. Net unrealized depreciation aggregated
$37,665, of which $357,778 related to appreciated investment securities and
$395,443 related to depreciated investment securities.
The fund intends to elect to defer to its fiscal year ending August 31,
1997 approximately $15,880 of losses recognized during the period November
1, 1995 to August 31, 1996.
At August 31, 1996, the fund had a capital loss carryforward of
approximately $1,785,000 of which $424,300 and $1,360,700 will expire on
August 31, 2003 and 2004, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1996

ASSETS

Investment in securities, at value (cost $45,544,909) - $ 45,507,244
See accompanying schedule

Interest receivable 526,336

TOTAL ASSETS 46,033,580

LIABILITIES

Payable to custodian bank $ 43,781

Payable for investments purchased 502,964

Payable for fund shares redeemed 61,076

Distributions payable 40,024

Accrued management fee 21,413

Payable for daily variation on futures contracts 4,875

TOTAL LIABILITIES 674,133

NET ASSETS $ 45,359,447

Net Assets consist of:

Paid in capital $ 47,197,993

Accumulated undistributed net realized gain (loss) on (1,775,139)
investments

Net unrealized appreciation (depreciation) (63,407)
on investments

NET ASSETS, for 4,607,161 shares outstanding $ 45,359,447

NET ASSET VALUE, offering price and redemption price per $9.85
share ($45,359,447 (divided by) 4,607,161 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1996

INTEREST INCOME $ 2,427,087

EXPENSES

Management fee $ 251,668

Non-interested trustees' compensation 190

Total expenses before reductions 251,858

Expense reductions (71,259) 180,599

NET INTEREST INCOME 2,246,488

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

Investment securities (88,838)

Futures contracts 23,206 (65,632)

Change in net unrealized appreciation (depreciation) on:

Investment securities 53,706

Futures contracts (33,151) 20,555

NET GAIN (LOSS) (45,077)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 2,201,411
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 2,246,488 $ 2,294,083
Net interest income

Net realized gain (loss) (65,632) (1,623,650)

Change in net unrealized appreciation (depreciation) 20,555 2,356,483

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,201,411 3,026,916
FROM OPERATIONS

Distributions to shareholders from net interest income (2,246,488) (2,294,083)

Share transactions 8,560,569 11,716,389
Net proceeds from sales of shares

Reinvestment of distributions 1,705,334 1,737,058

Cost of shares redeemed (8,353,136) (12,168,591)

Redemption fees 3,130 6,959

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,915,897 1,291,815
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 1,870,820 2,024,648

NET ASSETS

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

End of period $ 45,359,447 $ 43,488,627

OTHER INFORMATION
Shares

Sold 859,582 1,239,543

Issued in reinvestment of distributions 171,384 183,665

Redeemed (842,420) (1,306,266)

Net increase (decrease) 188,546 116,942

</TABLE>

FINANCIAL HIGHLIGHTS
YEARS ENDED AUGUST 31, APRIL 22, 1993
(COMMENCEME
NT OF
OPERATIONS)

1996 1995 1994 D AUGUST 31,
1993

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

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

Income from Investment Operations .488 .541 .543 .194
Net interest income

Net realized and unrealized .009 F .198 (.697) .348
gain (loss)

Total from investment operations .497 .739 (.154) .542

Less Distributions (.488) (.541) (.543) (.194)
From net interest income

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

Total distributions (.488) (.541) (.563) (.194)

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

Net asset value, end of period $ 9.850 $ 9.840 $ 9.640 $ 10.350

TOTAL RETURN B 5.12% 8.07% (1.46)% 5.49%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 45,359 $ 43,489 $ 41,464 $ 28,941
(000 omitted)

Ratio of expenses to average .40% C .15% C .03% C .00% C
net assets

Ratio of expenses to average net .39% E .15% .03% .00%
assets after expense reductions

Ratio of net interest income to 4.91% 5.71% 5.45% 5.46% A
average net assets

Portfolio turnover rate 74% 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. 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.
E FMR HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER
PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF NOTES
TO FINANCIAL STATEMENTS).
F THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1996

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 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 the 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. 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.
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
gains/losses on certain futures and options transactions, capital loss
carryforwards 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
realized and unrealized gain (loss). 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 .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 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. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin 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.
Purchases and sales of securities, other than short-term securities,
aggregated $35,240,052 and $31,961,230, respectively.
The market value of futures contracts opened and closed during the period
amounted to $6,418,704 and $6,892,384, 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
$705 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 the fund's
average net assets, and the reimbursement reduced expenses by $68,241.
Effective April 1, 1996, the fund's expense limitation was eliminated.
In addition, FMR has entered into arrangements on behalf of the fund with
the fund's custodian and transfer agent whereby certain interest earned on
uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's expenses were reduced by $3,018
under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Union Street Trust and the Shareholders of
Spartan Maryland Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Union Street Trust: Spartan Maryland Municipal Income Fund,
including the schedule of portfolio investments, as of August 31, 1996, the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period then
ended and for the period April 22, 1993 (commencement of operations) to
August 31, 1993. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1996, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Union Street Trust: Spartan Maryland Municipal Income Fund as
of August 31, 1996, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended and the financial highlights for each of the three years in the
period then ended and for the period April 22, 1993 (commencement of
operations) to August 31, 1993, in conformity with generally accepted
accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, MA
October 1, 1996
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