SUPPLEMENT TO THE SPARTAN(registered trademark) MUNICIPAL FUNDS' OCTOBER
18, 1996 PROSPECTUS
PROPOSED REORGANIZATION. The Board of Trustees of Spartan Aggressive
Municipal Fund has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Spartan Aggressive Municipal Fund and
Fidelity Aggressive Municipal Fund, a fund of Fidelity Municipal Trust.
The Agreement provides for transfer of substantially all of the assets and
the assumption of all of the liabilities of Spartan Aggressive Municipal
Fund solely in exchange for the number of shares of Fidelity Aggressive
Municipal Fund equal in value to the relative net asset value of the
outstanding shares of Spartan Aggressive Municipal Fund. Following such
exchange, Spartan Aggressive Municipal Fund will distribute the Fidelity
Aggressive Municipal Fund shares to its shareholders pro rata, in
liquidation of Spartan Aggressive Municipal Fund as provided in the
Agreement (the transactions contemplated by the Agreement referred to as
the "Reorganization").
The Reorganization can be consummated only if, among other things, it is
approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Spartan Aggressive Municipal Fund will be
held on July 16, 1997, and approval of the Agreement will be voted on at
that time. In connection with the Meeting, Spartan Aggressive Municipal
Fund will be filing with the Securities and Exchange Commission and
delivering to its shareholders of record a Proxy Statement describing the
Reorganization and a Prospectus for Fidelity Aggressive Municipal Fund.
If the Agreement is approved at the Meeting and certain conditions required
by the Agreement are satisfied, the Reorganization is expected to become
effective on or about July 31, 1997. If shareholder approval of the
Agreement is delayed due to failure to meet a quorum or otherwise, the
Reorganization will become effective, if approved, as soon as practicable
thereafter.
In the event Spartan Aggressive Municipal Fund shareholders fail to approve
the Agreement, Spartan Aggressive Municipal Fund will continue to engage in
business as a registered investment company and the Board of Trustees will
consider other proposals for the reorganization or liquidation of Spartan
Aggressive Municipal Fund.
The following paragraph on the cover page has been removed:
Spartan Aggressive Municipal may invest without limitation in lower-quality
debt securities, sometimes called "municipal junk bonds." Investors should
consider that these securities carry greater risks, such as the risk of
default, than other debt securities. Refer to "Investment Principles and
Risks" on page 17 for further information.
The following information supplements that found in the "Who May Want to
Invest" section beginning on page 3.
Effective January 20, 1997, Spartan Aggressive Municipal was closed to
all new and subsequent purchases except for reinvestment of dividends or
other distributions.
The following information replaces similar information found in the
"Expenses" section on page 6.
SPARTAN AGGRESSIVE MUNICIPAL
Operating Expenses
Management fee .55 %A
12b-1 fee None
Other expenses .00%
Total fund operating expenses .55 %
AEffective March 1, 1997, FMR has voluntarily agreed to
implement a management fee reduction from .60% to .55%.
Examples
Account Account
open closed
After 1 $ $
year
After 3 $ $
years
After 5 $ $
years
After 10 $ $
years
Effective March 17, 1997, the following information replaces similar
information found in the "Investment Principles and Risks" section on page
18.
SPARTAN AGGRESSIVE MUNICIPAL invests primarily in investment grade
municipal securities. The fund may also invest up to 35% of its assets in
below investment-grade securities. 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. As of August 31, 1996, the
fund's dollar-weighted average maturity was approximately 15 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.
Effective March 17, 1997, the following information replaces similar
information found in the "Securities and Investment Practices" section on
page 20.
RESTRICTIONS: Spartan Short-Intermediate Municipal Income, Spartan
Intermediate Municipal Income, 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"). Spartan Aggressive Municipal currently intends to
limit its investments in below investment-grade securities to less than 35%
of its assets and does not currently intend to invest more than 10% of its
total assets in bonds that are in default. A security is considered to be
investment-grade if it is rated investment grade by Moody's Investors
Service, Standard and 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.
The following information replaces similar information found in the
"Breakdown of Expenses" section on page 25.
FMR has voluntarily agreed to limit Spartan Municipal Money's total
operating expenses to an annual rate of .40% of average net assets for the
fiscal year ended 1996. Effective March 1, 1997, FMR has voluntarily agreed
to reduce Spartan Aggressive Municipal's management fee rate from .60% to
.55%. If this reduction were in effect, the total management fee rate would
have been .55%.
The following information replaces similar information found in the "How to
Buy Shares" section on page 28.
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details. Effective January 20,
1997, Spartan Aggressive Municipal was closed to new and subsequent
purchases except for reinvestment of dividends or other distributions.
The following information replaces similar information found in the
"Transaction Details" section found on page 38.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an annual
maximum charge of $24.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will not be
deducted from Fidelity brokerage accounts, retirement accounts (except
non-prototype retirement accounts), accounts using regular investment
plans, or if total assets in Fidelity exceed $30,000. Eligibility for the
$30,000 waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
The following information replaces similar information found in the "Key
Facts" section on page 4.
Spartan Allowed to invest in With its ability to invest in
Agressiv lower-quality municipal lower-quality securities
e securities. Although the fund with longer-term
Municipa can invest in securities of any maturities, this is the
l maturity, FMR seeks to most aggressive fund in
manage the fund so that it the family.
generally reacts to changes in
interest rates similarly to
municipal bonds with
maturities between 8 and 18
years.
(high risk graphic)
(low to medium risk graphic)
