SUPPLEMENT TO THE
SPARTAN(registered trademark) ARIZONA
MUNICIPAL FUNDS
PROSPECTUS
DATED OCTOBER 25, 1995
The following information replaces the similar information found in the
"Key Facts" section on page 4.
SPARTAN ARIZONA INCOME
STRATEGY: Invests normally in investment-grade municipal securities
whose interest is free from federal income tax and Arizona personal income
tax.
The following information replaces the similar information found in the
third and fourth paragraphs of the "Investment Principles and Risks"
section beginning on page 13.
SPARTAN ARIZONA MUNICIPAL INCOME seeks high current income that is
free from federal income tax and the Arizona personal income tax by
investing in investment-grade municipal securities under normal conditions.
FMR normally invests at least 65% of the fund's total assets in state
tax-free securities, and normally invests at least 80% of the fund's assets
in municipal securities whose interest is free from federal income tax.
Although the fund can invest in securities of any maturity, FMR seeks to
manage the fund so that it generally reacts to changes in interest rates
similarly to municipal bonds with maturities between eight and 18 years.
The following information replaces the similar information found in the
"Securities and Investment Practices" section under the heading "Debt
Securities" on page 15.
DEBT SECURITIES. Bonds and other debt instruments are used by
issuers to borrow money from investors. The issuer pays the investor a
fixed or variable rate of interest, and must repay the amount borrowed at
maturity. Some debt securities, such as zero coupon bonds, do not pay
current interest, but are purchased at a discount from their face values.
In general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics, and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
RESTRICTIONS: The bond fund normally invests in investment-grade
securities, but reserves the right to invest up to 5% of its assets in
below investment-grade securities (sometimes called "municipal junk
bonds"). A security is considered to be investment-grade if it is rated
investment-grade by Moody's Investors Service, Standard & Poor's, Duff &
Phelps Credit Rating Co., or Fitch Investors Service, L.P., or is unrated
but judged by FMR to be of equivalent quality.
Effective June 1, 1996, the following replaces the similar information
found in the "Expenses" section beginning on page 6:
SPARTAN ARIZONA MONEY MARKET
Management fee (after reimbursement) .35%
12b-1 fee None
Other expenses .00%
Total fund operating expenses .35%
SPARTAN ARIZONA INCOME
Management fee .55%
12b-1 fee None
Other expenses .00%
Total fund operating expenses .55%
SPARTAN ARIZONA MONEY MARKET
Account open Account closed
After 1 year $ 4 $ 9
After 3 years $ 11 $ 16
After 5 years $ 20 $ 25
After 10 years $ 44 $ 49
SPARTAN ARIZONA INCOME
Account open Account closed
After 1 year $ 6 $ 11
After 3 years $ 18 $ 23
After 5 years $ 31 $ 36
After 10 years $ 69 $ 74
FMR has voluntarily agreed to temporarily limit Spartan Arizona Municipal
Money Market Fund's operating expenses to .35% of its average net assets.
If this agreement were not in effect, the management fee, other expenses,
and total operating expenses would be .50%, .00%, and .50%, respectively.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, or extraordinary expenses.
On February 20, 1996, Spartan Arizona Municipal Money Market Portfolio's
name changed to Spartan Arizona Municipal Money Market Fund and Spartan
Arizona Municipal Income Portfolio's name changed to Spartan Arizona
Municipal Income Fund.
SUPPLEMENT TO THE
SPARTAN(registered trademark) MUNICIPAL FUNDS' PROSPECTUS
DATED OCTOBER 25, 1995
On February 20, 1996, Spartan Short-Intermediate Municipal Fund changed its
name to Spartan Short-Intermediate Municipal Income Fund, Spartan
Intermediate Municipal Fund changed its name to Spartan Intermediate
Municipal Income Fund, and Spartan Municipal Income Portfolio changed its
name to Spartan Municipal Income Fund.
Effective February 1, 1996, the following information replaces the similar
information found in the "EXPENSES" section beginning on page 6.
The operating expenses on page 7 are projections based on historical
expenses, and are calculated as a percentage of average net assets. FMR has
voluntarily agreed to temporarily limit the total operating expenses of
Spartan Municipal Money to .40% of average net assets. If this agreement
was not in effect, the management fee, other expenses, and total operating
expenses for Spartan Municipal Money would be .50%, .00%, and .50%,
respectively. Expenses eligible for reimbursement do not include interest,
taxes, brokerage commissions, or extraordinary expenses.
SPARTAN INTERMEDIATE MUNICIPAL
Operating Expenses
Management fee .55%
12b-1 fee None
Other expenses .00
%
Total fund operating expenses .55%
SPARTAN INTERMEDIATE MUNICIPAL
Examples
Account Account
open closed
After 1 year $ 6 $11
After 3 years $18 $23
After 5 years $31 $36
After 10 years $69 $74
The following information replaces the similar information found in
paragraphs four through seven in the "INVESTMENT PRINCIPLES AND RISKS"
section beginning on page 16.
SPARTAN SHORT-INTERMEDIATE MUNICIPAL stresses preservation of capital by
investing in investment-grade municipal securities under normal
conditions . Although the fund can invest in securities of any maturity,
the fund, under normal conditions, maintains a dollar-weighted average
maturity of between two and five years. The fund normally invests so that
80% or more of its income is free from federal income tax.
SPARTAN INTERMEDIATE MUNICIPAL invests in investment-grade municipal
securities under normal conditions. Although the fund can invest in
securities of any maturity, the fund maintains a dollar-weighted average
maturity of between three to 10 years under normal conditions. FMR seeks to
manage the fund so that it generally reacts to changes in interest rates
similarly to municipal bonds with maturities between seven and 10 years.
The fund normally invests so that at least 80% of its assets are invested
in municipal securities whose interest is free from federal income tax.
SPARTAN MUNICIPAL INCOME invests in investment-grade municipal
securities under normal conditions. Although the fund can invest in
securities of any maturity, FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to municipal bonds
with maturities between eight and 18 years. The fund normally invests so
that at least 80% of its income is free from federal income tax.
SPARTAN AGGRESSIVE MUNICIPAL invests in municipal securities of any
quality under normal conditions. Since the fund can emphasize lower-quality
securities, FMR's research and analysis are an integral part of choosing
the fund's investments . Although the fund can invest in securities of
any maturity, FMR seeks to manage the fund so that it generally reacts to
changes in interest rates similarly to municipal bonds of comparable
quality with maturities between 12 and 20 years. The fund normally invests
so that at least 80% of its assets are invested in municipal securities
whose interest is free from federal income tax.
The following information replaces the similar information found in the
"SECURITIES AND INVESTMENT PRACTICES" section on page 19.
RESTRICTIONS: Spartan Short-Intermediate Municipal, Spartan Intermediate
Municipal, and Spartan Municipal Income normally invest in investment-grade
securities, but reserve the right to invest up to 5% of their assets in
below investment-grade securities (sometimes called "municipal junk
bonds"). A security is considered to be investment-grade if it is rated
investment grade by Moody's Investors Service, Standard & Poor's, Duff &
Phelps Credit Rating Co., or Fitch Investors Service, L.P., or is unrated
but judged by FMR to be of equivalent quality. Spartan Aggressive Municipal
Fund does not currently intend to invest more than 10% of its total assets
in bonds that are in default.
The following information replaces that found on page 5.
FUND STRATEGY RISK AND YIELD POTENTIAL
THE RISK LEVEL AND YIELD POTENTIAL OF MONEY MARKET AND BOND FUNDS DEPEND ON
THE QUALITY AND MATURITY OF THEIR INVESTMENTS. THE CHART BELOW PRESENTS
EACH FUND'S STRATEGY AND EXPLAINS ITS RISK AND YIELD POTENTIAL RELATIVE TO
THE OTHER FUNDS IN THIS FAMILY.
<TABLE>
<CAPTION>
<S> <C> <C>
Spartan Municipal Invests normally in Because this fund seeks
Money high-quality, short -term to maintain a stable
municipal securities $1.00 share price, it is
with an average the safest and lowest
maturity of 90 days or yielding fund in the
less. family.
(low risk graphic)
Spartan Invests under normal With its emphasis on
Short-Intermediate conditions in short maturities, this is
Municipal i nvestment-grade the most conservative
municipal securities bond fund in the family.
while normally
maintaining an average
maturity of two to five
years.
(low to medium risk graphic)
Spartan Invests under normal With its emphasis on
Intermediate conditions in intermediate maturities,
Municipal investment-grade this is the moderate
municipal securities member of the family.
while normally
maintaining an average
maturity of between
three and 10 years.
(medium risk graphic)
Spartan Municipal Invests under normal With its emphasis on
Income conditions in m unicipal longer-term maturities,
securities of this is the moderately
investment-grade aggressive member of
quality. Although the the family.
fund can invest in
securities of any
maturity, FMR seeks to
manage the fund so that
it generally reacts to
changes in interest rates
similarly to municipal
bonds with maturities
between eight and 18
years.
(low to medium risk graphic)
</TABLE>
FUND STRATEGY RISK AND YIELD POTENTIAL
THE RISK LEVEL AND YIELD POTENTIAL OF MONEY MARKET AND BOND FUNDS DEPEND ON
THE QUALITY AND MATURITY OF THEIR INVESTMENTS. THE CHART BELOW PRESENTS
EACH FUND'S STRATEGY AND EXPLAINS ITS RISK AND YIELD POTENTIAL RELATIVE TO
THE OTHER FUNDS IN THIS FAMILY.
<TABLE>
<CAPTION>
<S> <C> <C>
Spartan Aggressive Allowed to invest in With its ability
to invest in
Municipal lower-quality municipal lower-quality
securities
securities. Although the with longer-term
fund can invest in maturities, this is the
securities of any most aggressive fund in
maturity, FMR seeks to the family.
manage the fund so
that it generally reacts
to changes in interest
rates similarly to
municipal bonds of
comparable quality with
maturities between 12
and 20 years.
(high risk graphic)
</TABLE>
