FIDELITY
(REGISTERED TRADEMARK)
EXPORT AND MULTINATIONAL
FUND (FORMERLY FIDELITY EXPORT FUND)
ANNUAL REPORT
AUGUST 31, 1997
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 17 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 21 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 26 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 27
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.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The short-term volatility that hit the stock and bond markets in the
spring re-emerged in August, and many equity and fixed-income
securities retreated from their 1997 highs. Still, the Standard &
Poor's 500 Index was up roughly 23% year-to-date through August 31,
more than twice its historical annual average. The bond markets have
posted moderate returns through the first eight months of the year,
primarily influenced by positive news on the inflation front.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories 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, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 LIFE OF
YEAR FUND
FIDELITY EXPORT AND MULTINATIONAL FUND 41.94% 124.58%
FIDELITY EXPORT AND MULTINATIONAL FUND 37.68% 117.85%
(INCL. MAX. 3% SALES CHARGE)
S&P 500(REGISTERED TRADEMARK) 40.65% 108.29%
GROWTH FUNDS AVERAGE 33.51% N/A
CUMULATIVE TOTAL RETURNS reflect the fund's actual performance in
percentage terms over a set period - in this case, one year or since
the fund started on October 4, 1994. For example, if you had 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 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 mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 774 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 LIFE OF
YEAR FUND
FIDELITY EXPORT AND MULTINATIONAL FUND 41.94% 32.03%
FIDELITY EXPORT AND MULTINATIONAL FUND 37.68% 30.65%
(INCL. MAX. 3% SALES CHARGE)
S&P 500 40.65% 28.66%
GROWTH FUNDS AVERAGE 33.51% N/A
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970919 151054 S00000000000001
Export & Multinational Fd S&P 500
00332 SP001
1994/10/04 9700.00 10000.00
1994/10/31 10252.90 10244.46
1994/11/30 9932.80 9871.36
1994/12/31 9942.83 10017.75
1995/01/31 9729.22 10277.51
1995/02/28 10185.58 10678.03
1995/03/31 10418.61 10993.14
1995/04/30 10942.94 11316.88
1995/05/31 11389.59 11769.22
1995/06/30 12583.90 12042.62
1995/07/31 13516.04 12441.95
1995/08/31 13807.33 12473.18
1995/09/30 14302.53 12999.55
1995/10/31 13083.96 12953.14
1995/11/30 13371.84 13521.78
1995/12/31 13146.10 13782.21
1996/01/31 12753.38 14251.36
1996/02/29 13104.76 14383.47
1996/03/31 12846.39 14521.98
1996/04/30 14717.02 14736.04
1996/05/31 15843.54 15116.08
1996/06/30 14799.70 15173.67
1996/07/31 13993.57 14503.30
1996/08/31 15347.46 14809.17
1996/09/30 16887.37 15642.63
1996/10/31 16933.63 16074.06
1996/11/30 18180.93 17289.10
1996/12/31 18226.32 16946.60
1997/01/31 19205.65 18005.42
1997/02/28 18073.98 18146.59
1997/03/31 16898.79 17400.94
1997/04/30 17170.83 18439.78
1997/05/31 19183.88 19562.39
1997/06/30 20533.18 20438.79
1997/07/31 21991.28 22065.10
1997/08/29 21784.53 20829.02
IMATRL PRASUN SHR__CHT 19970831 19970919 151056 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Export and Multinational Fund on October 4, 1994,
when the fund started, and the current maximum 3% sales charge was
paid. As the chart shows, by August 31, 1997, the value of the
investment would have grown to $21,785 - an 117.85% increase on the
initial investment. For comparison, look at how the S&P 500 did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $20,829 - a 108.29%
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
long-term growth and
short-term volatility. 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 - supported
by moderate economic growth
and subdued inflation - turned
in a strong performance for the
12 months that ended August 31,
1997. The Standard & Poor's 500
Index, a broad measure of the U.S.
stock market, returned 40.65%
during the period, well above its
long-term annual average of
approximately 11%. The stock
market spent much of the past 12
months breaking price and trading
volume records. Solid corporate
earnings, large cash inflows into
mutual funds, widespread
optimism and a generally
favorable interest-rate climate
boosted share prices higher,
especially among
large-capitalization,
household-name stocks. Concerns
in the springtime over an
overheating economy, and
earnings shortfall announcements
from several key companies in
August provided the only
considerable hiccups in the
market's rise. When the Federal
Reserve Board raised a key
short-term interest rate in March,
an already richly priced market
sold off sharply. From that point on,
with positive economic news being
the primary catalyst, the market
soared. In July, the Dow Jones
Industrial Average surged past
the 8000 mark for the first time
ever. August, however, was a
different story as inflation fears, a
weakened dollar and sluggish
corporate earnings ate away at
some of the market's prior gains.
The silver lining in this decline,
though, was the overall
broadening of the market, as
small- and mid-cap stocks
performed well.
An interview with Jason Weiner, Portfolio Manager of Fidelity Export
and Multinational Fund
Q. HOW DID THE FUND PERFORM, JASON?
A. It's been a good year. For the 12 months that ended August 31,
1997, the fund posted a return of 41.94%. This topped the growth funds
average, as measured by Lipper Analytical Services, which returned
33.51% over the same time. The fund also outperformed the Standard &
Poor's 500 Index, which returned 40.65%.
Q. WHAT FACTORS INFLUENCED THE FUND'S STRONG PERFORMANCE?
A. Good stock picking played a key role, as investments in the
technology, transportation, defense and aerospace, and energy services
sectors contributed positively to fund performance. While the
telecommunications story is one of global growth - fueled largely by
the increased demand for voice and data transmission - the other
groups flourished due to positive cyclical trends. In the
transportation sector, shipping volumes and pricing trends remained
strong, particularly in the express package group; the commercial
aerospace industry is in the midst of a multi-year order cycle, which
will benefit jet manufacturers and suppliers.
Q. PART OF YOUR INVESTING PHILOSOPHY IS TO LOOK FOR CAPITAL
MANAGEMENT, MARGIN EXPANSION OR SALES GROWTH STORIES. CAN YOU GIVE AN
EXAMPLE OF EACH AS IT RELATED TO THE FUND'S PERFORMANCE DURING THE
PERIOD?
A. My chief concern will always be earnings growth, but I like to
maintain a balance of different types of stocks. CNF Transportation -
one of the fund's larger positions - is a good capital management
story. CNF has approximately 70 planes that fly strictly overnight for
the company's freight division. The company recently announced that
approximately 15 of those planes will deliver priority mail for the
U.S. Postal Service during the day. To me, that's making great use of
your existing capital. An example of a margin expansion stock would be
Insight Enterprises, a company that markets computers via outbound
telemarketing and catalog sales. Insight's operating margins are at
half the level a mature company in its industry can achieve, so
there's plenty of room to grow. Lastly, Uniphase - a
telecommunications equipment supplier - is a pure sales growth story.
Q. THE FUND'S EXPOSURE TO ENERGY-RELATED STOCKS JUMPED FROM 1.7% SIX
MONTHS AGO TO 11.3%. WHAT WAS THE ATTRACTION?
A. Much of the increase was due to favorable trends within the
industry, specifically in the oil services area. In the past, an
oversupply of drilling rigs and equipment was a drag on this group's
performance. Over the past year or so, however, much of this excess
capacity has been absorbed by exploration and production customers. At
the same time, technological advances have improved the precision of
oil exploration and created more new drilling opportunities,
particularly in the deep waters of the Gulf of Mexico. These
developments resulted in a beneficial climate for the energy services
sector.
Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO PERFORMANCE? WERE
THERE ANY DISAPPOINTMENTS?
A. Airborne Freight and CNF Transportation - two of the fund's more
significant positions - did very well during the period for the
reasons I discussed at the outset regarding the transportation sector.
In terms of disappointments, two themes that didn't work out so well
were "tele-services" companies and cigars. Tele-services companies,
which offer call-center outsourcing to other firms, proved very
disappointing, and the cigar industry suffered amid questions over
whether the cigar-smoking trend could be sustained.
Q. WHAT'S YOUR OUTLOOK?
A. I'll continue to look for opportunities within the sectors that
helped fund performance during the past year, and may look to add some
exposure to both the personal computer and software industries. I'm
also going to try to reduce the amount of turnover within the
portfolio. Lastly, I'd add a word of caution to shareholders regarding
performance: This past year has been productive for the fund, but by
no means should a 41.94% return be considered typical.
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.
JASON WEINER DISCUSSES
SEVERAL FUND POLICY CHANGES:
"Prior to May 1, 1997, the fund
invested at least 65% of its assets
in `export companies.' These
companies were defined as being
based in North America, with 10%
or more of their annual revenues
coming from sales of exported
goods or services. The definition
also included companies engaged
in export-related businesses, such
as export trading or export
management companies. With the
changes, the fund must now
invest 65% of its total assets in U.S.
companies rather than the broader
category of North American
companies. Multinational
companies - those that derive a
substantial portion of their
revenues or profits from foreign
operations, or have a substantial
portion of their assets abroad -
also became part of the fund's
focus. Prior to these policy
changes, the fund's investment
universe had a heavy small-cap
flavor to it and excluded many
household, multinational names -
such as Coca-Cola or McDonald's -
that had considerable foreign
operations but weren't classified as
`export' companies. The changes to
the fund's policies should result in
a lower small-cap exposure and less
volatility relative to the overall
market. Additionally, the changes
will allow me to invest in companies
with significant foreign operations,
without limiting the fund to a
narrow universe of exporters."
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
mainly in the equity securities
of U.S. companies that are
expected to benefit from
exporting or selling their
goods or services outside
the U.S.
FUND NUMBER: 332
TRADING SYMBOL: FEXPX
START DATE: October 4, 1994
SIZE: as of August 31, 1997,
more than $452 million
MANAGER: Jason Weiner, since
January 1997; manager,
Fidelity Select Computers
Portfolio, 1996-1997;
Fidelity Select Air
Transportation Portfolio,
1994-1996; joined Fidelity in
1991
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
AIRBORNE FREIGHT CORP. 3.5 0.6
SCHERING-PLOUGH CORP. 3.2 0.7
NBTY, INC. 3.2 0.0
COOPER CAMERON CORP. 2.7 0.0
CNF TRANSPORTATION, INC. 2.5 0.0
UNIPHASE CORP. 2.3 0.0
READ-RITE CORP. 2.3 0.0
BE AEROSPACE, INC. 2.3 0.6
NOBLE DRILLING CORP. 2.1 0.0
ALPINE GROUP, INC. 1.9 0.4
TOP FIVE MARKET SECTORS AS OF AUGUST 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 36.2 21.5
ENERGY 11.3 1.7
HEALTH 9.3 11.7
SERVICES 9.1 4.4
TRANSPORTATION 7.1 3.2
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF AUGUST 31, 1997 * AS OF FEBRUARY 28, 1997 **
ROW: 1, COL: 1, VALUE: 2.3
ROW: 1, COL: 2, VALUE: 47.7
ROW: 1, COL: 3, VALUE: 50.0
STOCKS 89.8%
SHORT-TERM
INVESTMENTS 10.2%
FOREIGN
INVESTMENTS 6.6%
STOCKS 97.9%
SHORT-TERM
INVESTMENTS 2.1%
FOREIGN
INVESTMENTS 12.4%
ROW: 1, COL: 1, VALUE: 10.2
ROW: 1, COL: 2, VALUE: 39.8
ROW: 1, COL: 3, VALUE: 50.0
*
**
INVESTMENTS AUGUST 31, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 97.9%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 3.2%
AEROSPACE & DEFENSE - 3.0%
BE Aerospace, Inc. (a) 289,500 $ 10,277,250
Sundstrand Corp. 39,600 2,336,400
Thiokol Corp. 15,700 1,250,113
13,863,763
DEFENSE ELECTRONICS - 0.2%
Remec, Inc. 25,900 864,413
TOTAL AEROSPACE & DEFENSE 14,728,176
BASIC INDUSTRIES - 2.1%
CHEMICALS & PLASTICS - 0.5%
Cytec Industries, Inc. (a) 46,200 2,255,138
IRON & STEEL - 0.7%
Tubos De Acero De Mexico ADR (a) 185,800 3,344,400
PACKAGING & CONTAINERS - 0.5%
Owens-Illinois, Inc. (a) 65,000 2,262,813
PAPER & FOREST PRODUCTS - 0.4%
Mail-Well, Inc. (a) 59,050 1,649,709
TOTAL BASIC INDUSTRIES 9,512,060
CONSTRUCTION & REAL ESTATE - 0.9%
BUILDING MATERIALS - 0.9%
Coltec Industries, Inc. (a) 117,600 2,631,300
USG Corp. (a) 39,200 1,680,700
4,312,000
DURABLES - 1.9%
CONSUMER ELECTRONICS - 0.8%
Philips Electronics NV 50,000 3,581,250
TEXTILES & APPAREL - 1.1%
Timberland Co. Class A (a) 74,000 4,888,625
TOTAL DURABLES 8,469,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 11.3%
ENERGY SERVICES - 7.3%
Cliffs Drilling Co. (a) 85,000 $ 4,053,438
Noble Drilling Corp. (a) 335,100 9,529,406
Reading & Bates Corp. (a) 95,000 3,449,688
Transocean Offshore, Inc. 69,300 6,587,831
Varco International, Inc. (a) 118,800 4,722,300
Weatherford Enterra, Inc. (a) 100,000 4,606,250
32,948,913
OIL & GAS - 4.0%
Cooper Cameron Corp. (a) 185,000 12,001,875
EVI, Inc. (a) 46,200 2,428,388
Ocean Energy, Inc. (a) 55,400 3,562,913
17,993,176
TOTAL ENERGY 50,942,089
FINANCE - 3.2%
BANKS - 2.6%
BankAmerica Corp. 50,000 3,290,625
Citicorp 65,000 8,295,625
11,586,250
INSURANCE - 0.6%
American International Group, Inc. 22,500 2,123,438
CapMAC Holdings, Inc. 22,900 635,475
2,758,913
TOTAL FINANCE 14,345,163
HEALTH - 9.3%
DRUGS & PHARMACEUTICALS - 7.6%
American Home Products Corp. 51,700 3,722,400
Matritech, Inc. (a) 210,200 1,287,475
NBTY, Inc. (a) 655,200 14,578,200
Schering-Plough Corp. 306,500 14,712,000
34,300,075
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - 1.7%
Biomet, Inc. 100,000 $ 2,075,000
Cardiovascular Dynamics, Inc. (a) 30,400 235,600
Cooper Companies, Inc. (a) 150,500 4,966,500
Sybron International Corp. (a) 10,600 423,338
7,700,438
TOTAL HEALTH 42,000,513
INDUSTRIAL MACHINERY & EQUIPMENT - 4.4%
ELECTRICAL EQUIPMENT - 2.5%
Alcatel Alsthom Compagnie Generale d'Electricite SA 36,700 4,486,420
Allen Telecom, Inc. 64,400 1,537,550
Mas Technology Ltd. 128,500 2,762,750
Spectrain Corp. (a) 55,200 2,428,800
11,215,520
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
ASM Lithography Holding NV (a) 88,000 7,480,000
Gasonics International Corp. (a) 76,100 1,350,775
8,830,775
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 20,046,295
MEDIA & LEISURE - 4.0%
ENTERTAINMENT - 0.5%
King World Productions, Inc. 51,200 2,035,200
LEISURE DURABLES & TOYS - 0.5%
Coleman, Inc. (a) 146,500 2,316,531
LODGING & GAMING - 2.3%
Anchor Gaming (a) 10,000 800,000
Sun International Hotels Ltd. Ord. 76,000 2,555,500
WMS Industries, Inc. 288,600 7,124,813
10,480,313
PUBLISHING - 0.7%
Cognizant Corp. 74,600 3,133,200
TOTAL MEDIA & LEISURE 17,965,244
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - 0.9%
TOBACCO - 0.9%
Consolidated Cigar Holdings, Inc. Class A (a) 52,600 $ 1,742,375
General Cigar Holdings, Inc. Class A 107,100 2,316,038
4,058,413
RETAIL & WHOLESALE - 1.7%
APPLIANCE STORES - 0.9%
Grupo Elektra SA 280,000 3,904,061
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Cole National Corp. Class A (a) 85,000 3,787,813
TOTAL RETAIL & WHOLESALE 7,691,874
SERVICES - 9.1%
ADVERTISING - 0.7%
Omnicom Group, Inc. 46,200 3,130,050
LEASING & RENTAL - 3.6%
Budget Group, Inc. Class A (a) 49,900 1,465,813
Danka Business Systems PLC sponsored ADR 166,200 7,769,850
Hertz Corp. Class A 204,000 7,050,750
16,286,413
SERVICES - 4.8%
AccuStaff, Inc. (a) 291,700 7,748,281
Block (H&R), Inc. 60,000 2,355,000
Hagler Bailly, Inc. 144,300 3,120,488
On Assignment, Inc. (a) 6,600 297,825
Sitel Corp. (a) 285,000 3,028,125
Telespectrum Worldwide, Inc. (a) 525,000 2,395,313
Zebra Technologies Corp. Class A (a) 94,000 2,761,250
21,706,282
TOTAL SERVICES 41,122,745
TECHNOLOGY - 36.2%
COMMUNICATIONS EQUIPMENT - 7.9%
ADC Telecommunications, Inc. 20,000 742,500
Aspect Telecommunications Corp. (a) 200,100 4,402,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Boston Technology, Inc. (a) 189,400 $ 5,575,463
Dialogic Corp. (a) 210,900 8,436,000
Ericsson (L.M.) Telephone Co. Class B ADR 115,000 4,794,063
Network General Corp. (a) 165,900 2,758,088
Nice Systems sponsored ADR (a) 73,400 2,931,413
Nokia Corp. AB sponsored ADR 78,500 6,083,750
Perceptron, Inc. (a) 2,500 65,625
35,789,102
COMPUTER SERVICES & SOFTWARE - 9.5%
Barra, Inc. (a) 173,500 6,050,813
Cadence Design Systems, Inc. (a) 75,000 3,567,188
Ceridian Corp. (a) 95,000 3,283,438
Computer Learning Centers, Inc. 53,700 2,577,600
EIS International, Inc. (a) 206,300 2,037,213
Electronics for Imaging, Inc. (a) 85,000 4,547,500
Manugistics Group, Inc. 22,600 957,675
Meta Group, Inc. (a)(c) 377,200 7,874,050
Microsoft Corp. (a) 30,000 3,965,625
Midway Games, Inc. (a) 79,800 1,685,775
Siebel Systems, Inc. (a) 80,800 2,918,900
Symantec Corp. (a) 140,200 3,373,563
42,839,340
COMPUTERS & OFFICE EQUIPMENT - 7.8%
Comdisco, Inc. 50,400 1,370,250
Comverse Technology, Inc. (a) 60,000 2,756,250
Eltron International, Inc. (a) 130,900 4,237,888
Insight Enterprises, Inc. (a) 179,800 7,776,350
Pitney Bowes, Inc. 14,500 1,107,438
Read-Rite Corp. (a) 367,600 10,545,525
Sequent Computer Systems, Inc. (a) 125,500 3,537,531
Sun Microsystems, Inc. 35,000 1,680,000
Tech Data Corp. (a) 62,700 2,441,381
35,452,613
ELECTRONIC INSTRUMENTS - 1.4%
Applied Materials, Inc. (a) 25,000 2,359,375
JDS Fitel, Inc. (a) 50,000 1,909,566
Sawtek, Inc. (a) 16,800 661,500
Teradyne, Inc. (a) 24,900 1,386,619
6,317,060
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 9.6%
Actel Corp. (a) 260,000 $ 5,281,250
Alpine Group, Inc. (a) 613,300 8,662,863
Altera Corp. 30,000 1,597,500
Brightpoint, Inc. 100,000 3,750,000
Etec Systems, Inc. (a) 79,800 5,346,600
Esterline Technologies Corp. (a) 179,300 6,656,513
Linear Technology Corp. 25,000 1,639,063
Uniphase Corp. (a) 154,700 10,558,275
43,492,064
TOTAL TECHNOLOGY 163,890,179
TRANSPORTATION - 7.1%
AIR TRANSPORTATION - 0.8%
KLM Royal Dutch Airlines NV (NY Reg.) 110,000 3,602,500
TRUCKING & FREIGHT - 6.3%
Air Express International Corp. 43,400 1,318,275
Airborne Freight Corp. 321,800 15,848,650
CNF Transportation, Inc. 316,800 11,444,400
28,611,325
TOTAL TRANSPORTATION 32,213,825
UTILITIES - 2.6%
ELECTRIC UTILITY - 0.8%
AES Corp. 100,000 3,700,000
TELEPHONE SERVICES - 1.8%
Telebras sponsored ADR 30,000 3,540,000
WorldCom, Inc. (a) 149,700 4,481,630
8,021,630
TOTAL UTILITIES 11,721,630
TOTAL COMMON STOCKS
(Cost $389,472,355) 443,020,081
CASH EQUIVALENTS - 2.1%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b)
(Cost $9,668,230) 9,668,230 $ 9,668,230
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $399,140,585) $ 452,688,311
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. Affiliated company (see Note 8 of Notes to Financial Statements).
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 87.6%
Netherlands 3.2
United Kingdom 1.7
Mexico 1.6
Finland 1.3
Sweden 1.1
France 1.0
Others (individually less than 1%) 2.5
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $399,828,373. Net unrealized appreciation
aggregated $52,859,938, of which $62,496,305 related to appreciated
investment securities and $9,636,367 related to depreciated investment
securities.
The fund hereby designates approximately $12,200,000 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, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $399,140,585) - $ 452,688,311
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 14,581,591
RECEIVABLE FOR FUND SHARES SOLD 926,236
DIVIDENDS RECEIVABLE 132,506
INTEREST RECEIVABLE 78,687
REDEMPTION FEES RECEIVABLE 220
OTHER RECEIVABLES 156,468
TOTAL ASSETS 468,564,019
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 13,831,952
PAYABLE FOR FUND SHARES REDEEMED 1,751,463
ACCRUED MANAGEMENT FEE 225,673
OTHER PAYABLES AND ACCRUED EXPENSES 118,939
TOTAL LIABILITIES 15,928,027
NET ASSETS $ 452,635,992
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 311,763,912
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 87,325,202
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 53,546,878
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 22,605,946 SHARES OUTSTANDING $ 452,635,992
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $20.02
($452,635,992 (DIVIDED BY) 22,605,946 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $20.02) $20.64
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 31, 1997
INVESTMENT INCOME $ 1,562,699
DIVIDENDS
INTEREST 1,713,135
TOTAL INCOME 3,275,834
EXPENSES
MANAGEMENT FEE $ 2,496,985
TRANSFER AGENT FEES 1,167,515
ACCOUNTING FEES AND EXPENSES 250,176
NON-INTERESTED TRUSTEES' COMPENSATION 2,575
CUSTODIAN FEES AND EXPENSES 40,254
REGISTRATION FEES 61,957
AUDIT 33,741
LEGAL 6,991
INTEREST 12,877
MISCELLANEOUS 3,091
TOTAL EXPENSES BEFORE REDUCTIONS 4,076,162
EXPENSE REDUCTIONS (274,091) 3,802,071
NET INVESTMENT INCOME (LOSS) (526,237)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF 102,062,461
$6,295,477 ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS (3,233) 102,059,228
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 24,665,385
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (848) 24,664,537
NET GAIN (LOSS) 126,723,765
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 126,197,528
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ (526,237) $ (1,328,346)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 102,059,228 33,009,292
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 24,664,537 (28,431,719)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 126,197,528 3,249,227
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS (20,329,494) (27,054,780)
SHARE TRANSACTIONS 727,939,550 634,169,649
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 20,039,185 26,820,637
COST OF SHARES REDEEMED (668,382,473) (873,552,833)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 79,596,262 (212,562,547)
FROM SHARE TRANSACTIONS
REDEMPTION FEES 113,002 -
TOTAL INCREASE (DECREASE) IN NET ASSETS 185,577,298 (236,368,100)
NET ASSETS
BEGINNING OF PERIOD 267,058,694 503,426,794
END OF PERIOD $ 452,635,992 $ 267,058,694
OTHER INFORMATION
SHARES
SOLD 43,339,446 44,667,554
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 1,216,684 2,020,210
REDEEMED (39,935,185) (64,106,331)
NET INCREASE (DECREASE) 4,620,945 (17,418,567)
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED AUGUST 31,
1997 1996 1995 E
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.85 $ 14.22 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) D (.02) (.05) (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) 6.05 1.52 4.26
TOTAL FROM INVESTMENT OPERATIONS 6.03 1.47 4.23
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.86) (.84) (.01)
REDEMPTION FEES ADDED TO PAID IN CAPITAL - - -
NET ASSET VALUE, END OF PERIOD $ 20.02 $ 14.85 $ 14.22
TOTAL RETURN B, C 41.94% 11.15% 42.34%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 452,636 $ 267,059 $ 503,427
RATIO OF EXPENSES TO AVERAGE NET ASSETS .98% 1.03% 1.22% A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .91% F 1.00% F 1.22% A
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE (.13)% (.39)% (.27)% A
NET ASSETS
PORTFOLIO TURNOVER RATE 429% 313% 245% A
AVERAGE COMMISSION RATE G $ .0404 $ .0326
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 7 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 (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD OCTOBER 4, 1994 (COMMENCEMENT OF SALE OF SHARES) TO
AUGUST 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Export and Multinational Fund (the fund) (formerly Fidelity
Export 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 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 with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
date. Non-cash dividends included in dividend income, if any, are
recorded at the fair market value of the securities received. Interest
income is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are 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, 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.
Accumulated undistributed net realized gain (loss) on investments and
foreign
currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
REDEMPTION FEES. Shares purchased on or after February 1, 1997 and
held in the fund less than 90 days are subject to a redemption fee
equal to .75% 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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade. The cost of the foreign currency contracts is
included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements for
U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, an affiliate of FMR. The Cash Fund is
an open-end money market fund available only to investment companies
and other accounts managed by FMR and its affiliates. The Cash Fund
seeks preservation of capital, liquidity, and current income by
investing in U.S. Treasury securities and repurchase agreements for
these securities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
received by the fund are recorded as interest income in the
accompanying financial statements.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by
the SEC, the fund, along with other registered investment companies
having management contracts with FMR, may participate in an interfund
lending program. This program provides an alternative credit facility
allowing the fund to borrow from, or lend money to, other
participating funds.
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.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,679,279,362 and $1,612,967,652, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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. The annual
individual fund fee rate is .30%. 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. For the period, the management fee was
equivalent to an annual rate of .60% of average net assets.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),
an affiliate of FMR and the general distributor of the fund, received
sales charges of $879,002 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .28% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
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 $299,602 for the
period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The maximum loan and the average daily loan balances during the period
for which loans were outstanding amounted to $15,966,000 and $
10,572,000, respectively. The weighted average interest rate was 5.4%.
Interest expense includes $6,375 paid under the interfund lending
program.
6. 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
6. BANK BORROWINGS - CONTINUED
to $11,215,000 and $4,503,667, respectively. The weighted average
interest rate was 5.80%. Interest expense includes $6,502 paid under
the bank borrowing program.
7. 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 $251,853 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $11,737 and $10,501, respectively, under these
arrangements.
8. 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
Calypte Biomedical Corp. $ - $ - $ - $ -
Meta Group, Inc. - - - 7,874,050
Penn National Gaming, Inc. 6,837,373 3,119,648 - -
TOTALS $ 6,837,373 $ 3,119,648 $ - $ 7,874,050
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Union Street Trust and the Shareholders of
Fidelity Export and Multinational Fund (formerly Fidelity Export
Fund):
We have audited the accompanying statement of assets and liabilities
of Fidelity Union Street Trust: Fidelity Export and Multinational Fund
(formerly Fidelity Export Fund), including the schedule of portfolio
investments, as of August 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the
financial highlights for each of the two years in the period 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, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Union Street Trust: Fidelity Export and
Multinational Fund as of August 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial
highlights for each of the two years in the period 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 6, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Export and Multinational Fund voted
to pay on October 6, 1997, to shareholders of record at the opening of
business on October 3, 1997, a distribution of $2.32 per share derived
from capital gains realized from sales of portfolio securities.
A total of 3.98% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1998 of the applicable
percentage for use in preparing 1997 income tax returns.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree 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 Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
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
Robert C. Pozen, Senior Vice President
William J. Hayes, Vice President
Abigail Johnson, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
TechnoQuant(trademark) Growth Fund
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
* INDEPENDENT TRUSTEES
