SUPPLEMENT TO THE SPARTAN(registered trademark) GINNIE MAE FUND
OCTOBER 20, 1998 PROSPECTUS
The following information replaces the first paragraph in the "Who May
Want to Invest" section on page 3.
PROPOSED REORGANIZATION. The Board of Trustees of Spartan Ginnie Mae
Fund has unanimously approved an Agreement and Plan of Reorganization
("Agreement") between Spartan Ginnie Mae Fund and Fidelity Ginnie Mae
Fund.
The Agreement provides for the transfer of all of the assets and the
assumption of all of the liabilities of Spartan Ginnie Mae Fund solely
in exchange for the number of shares of Fidelity Ginnie Mae Fund equal
in value to the relative net asset value of the outstanding shares of
Spartan Ginnie Mae Fund. Following such exchange, Spartan Ginnie Mae
Fund will distribute the Fidelity Ginnie Mae Fund shares to its
shareholders pro rata, in liquidation of Spartan Ginnie Mae 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 Ginnie Mae Fund will be held on May 19,
1999, and approval of the Agreement will be voted on at that time. In
connection with the Meeting, Spartan Ginnie Mae 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 Ginnie Mae 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 May 27, 1999. 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 Ginnie Mae Fund shareholders fail to approve the
Agreement, Spartan Ginnie Mae 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 Ginnie Mae Fund.
Th e following information replaces similar information found in the
"Expenses" section on page 5.
The following figures are based on historical expenses of the fund and
are calculated as a percentage of average net assets of the fund.
Management fee 0.65 %
12b-1 fee None
Other expenses 0.00 %
Total fund operating expenses 0.65 %
EXAMPLES: Let's say, hypothetically, that the fund's annual return is
5% and that your shareholder transaction expenses and the fund's
annual operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses
if you close your account after the number of years indicated.
1 year $ 7
3 years $ 21
5 years $ 36
10 years $ 81
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
Th e following information replaces similar information found in the
"Charter" section on page 9.
Thomas Silvia is Vice President and manager of Spartan Ginnie Mae,
which he has managed since December 1998. He also manages other
Fidelity funds. Mr. Silvia joined Fidelity as a senior mortgage trader
in 1993. Previously, he was a quantitative analyst with Donaldson,
Lufkin & Jenrette in New York from 1990 to 1993.
SUPPLEMENT TO THE SPARTAN(registered trademark) ARIZONA MUNICIPAL
MONEY FUNDS
OCTOBER 20, 1998 PROSPECTUS
The following information supplements similar information found in the
"Investment Principles and Risks" section on page 14:
FIDELITY'S APPROACH TO MONEY MARKET FUNDS. Money market funds earn
income at current money market rates. In managing money market funds,
FMR stresses preservation of capital, liquidity, and income. The money
market fund will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities it buys. While the fund will be charged
premiums by a mutual insurance company for coverage of specified types
of losses related to default or bankruptcy on certain securities, the
fund may incur losses regardless of the insurance.
SUPPLEMENT TO THE SPARTAN(registered trademark) ARIZONA MUNICIPAL
MONEY MARKET FUND AND
SPARTAN ARIZONA MUNICIPAL INCOME FUND
OCTOBER 20, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2:
The following are the the fund's fundamental investment limitations
set forth in their entirety. The fund may not:
(1) purchase the securities of any issuer, if, as a result, the fund
would not comply with any applicable diversification requirements for
a money market fund under the Investment Company Act of 1940 and the
rules thereunder, as such may be amended from time to time;
(2) issue senior securities, except in connection with the
insurance program established by the fund pursuant to an exemptive
order issued by the Securities and Exchange Commission or as
otherwise permitted under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments; or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) With respect to 75% of its total assets, the fund does not
currently intend to purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities, or securities of other money market
funds) if, as a result, more than 5% of the fund's total assets would
be invested in the securities of that issuer.
(ii) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)). The fund will not purchase any security while
borrowings representing more than 5% of its total assets are
outstanding. The fund will not borrow from other funds advised by FMR
or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(v) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitations (1), (5) and (i), FMR identifies the
issuer of a security depending on its terms and conditions. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an
issuing political subdivision are separated from those of other
political entities; and whether a governmental body is guaranteeing
the security.
For purposes of limitation (i), certain securities subject to
guarantees (including insurance, letters of credit and demand
features) are not considered securities of their issuer, but are
subject to separate diversification requirements, in accordance with
industry standard requirements for money market funds.
For the fund's policies on quality and maturity, see the section
entitled "Quality and Maturity" on page 5.
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2:
MONEY MARKET INSURANCE. The money market fund participates
in a mutual insurance company solely with other funds advised by FMR
or its affiliates. This company provides insurance coverage for losses
on certain money market instruments held by a participating fund
(eligible instruments), including losses from nonpayment of principal
or interest or a bankruptcy or insolvency of the issuer or credit
support provider, if any. The insurance does not cover losses
resulting from changes in interest rates or other market developments.
The money market fund is charged an annual premium for the insurance
coverage and may be subject to a special assessment of up to
approximately two and one-half times the fund's annual gross premium
if covered losses exceed certain levels. A participating fund may
recover no more than $100 million annually, including all other claims
of insured funds, and may only recover if the amount of the loss
exceeds 0.30% of its eligible instruments. The money market fund may
incur losses regardless of the insurance.
