SUPPLEMENT TO THE SPARTAN(registered trademark) ARIZONA MUNICIPAL
FUNDS
OCTOBER 20, 1998 PROSPECTUS
The following information replaces the seventh paragraph found
under the heading "FMR and Its Affiliates" in the "Charter" section
beginning on page 13.
Citibank, N.A. is each fund's transfer agent, and is located at 111
Wall Street, New York, New York. Citibank, N.A. employs Fidelity
Service Company, Inc. (FSC) to perform transfer agent servicing
functions for each fund.
The following information replaces the fifth and sixth paragraphs
found under the heading "Management Fee" in the "Breakdown of
Expenses" section beginning on page 20.
Citibank, N.A. is the transfer and service agent for the funds.
Citibank, N.A. has entered into sub-agreements with FSC under which
FSC performs transfer agency, dividend disbursing, shareholder
servicing, and accounting functions for the funds. These services
include processing shareholder transactions, valuing each fund's
investments, and calculating each fund's share price and dividends.
FMR, not the funds, pays for these services.
Under the terms of the sub-agreements, FSC receives all related
fees paid to Citibank, N.A. on behalf of each fund.
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 INCOME FUND
AN D
SPARTAN ARIZONA MUNICIPAL MONEY MARKET FUND
OCTOBER 20, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND ON THE
COVER PAGE.
TRANSFER AGENT
Citibank, N.A.
and Fidelity Service Company, Inc. (FSC)
THE FOLLOWING INFORMATION REPLACES THE FIRST, FOURTH, AND SIXTH
PARAGRAPHS IN THE "CONTRACTS WITH FMR AFFILIATES" SECTION ON PAGE
31.
Each fund has entered into a transfer agent agreement with
Citibank, N.A. Under the terms of the agreements, Citibank, N.A.
provides transfer agency, dividend disbursing, and shareholder
services for each fund. Citibank, N.A. in turn has entered into
sub-transfer agent agreements with FSC, an affiliate of FMR. Under the
terms of the sub-agreements, FSC performs all processing activities
associated with providing these services for each fund and receives
all related transfer agency fees paid to Citibank, N.A.
In addition, Citibank, N.A. receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in a qualified
state tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's assets
that is invested in a fund.
Each fund has also entered into a service agent agreement with
Citibank, N.A. Under the terms of the agreements, Citibank, N.A.
provides pricing and bookkeeping services for each fund. Citibank,
N.A. in turn has entered into sub-service agent agreements with FSC.
Under the terms of the sub-agreements, FSC performs all processing
activities associated with providing these services, including
calculating the NAV and dividends for each fund and maintaining each
fund's portfolio and general accounting records, and receives all
related pricing and bookkeeping fees paid to Citibank, N.A.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUSTS" SECTION BEGINNING ON PAGE 32.
CUSTODIAN. Citibank, N.A., 111 Wall Street, New York, New York, is
custodian of the assets of the funds. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest
in obligations of the custodian and may purchase securities from or
sell securities to the custodian.
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION FOR SPARTAN ARIZONA
MUNICIPAL MONEY MARKET FUND BEGINNING ON PAGE 2.
For purposes of normally investing at least 65% of the fund's total
assets in state municipal securities, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
THE FOLLOWING NON-FUNDAMENTAL LIMITATION REPLACES SPARTAN ARIZONA
MUNICIPAL INCOME FUND'S NON-FUNDAMENTAL INVESTMENT LIMITATION (IV) IN
THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE
3.
(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 (2)).
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION FOR SPARTAN ARIZONA
MUNICIPAL INCOME FUND BEGINNING ON PAGE 3.
For purposes of normally investing at least 65% of the fund's total
assets in state municipal securities, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
THE FOLLOWING INFORMATION REPLACES AND SUPPLEMENTS SIMILAR
INFORMATION FOUND IN THE"TRUSTEES AND OFFICERS" SECTION BEGINNING ON
PAGE 26.
EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Union Street Trust II, is Mr.
Johnson's daughter.
ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Union Street Trust II (1999), is Vice President of certain Equity
Funds (1997), and is a Director of FMR Corp. (1994). Before assuming
her current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Total Compensation from the
Advisory Board Spartan Arizona Municipal Spartan Arizona Municipal Fund Complex*,A
Money MarketB IncomeB
Edward C. Johnson 3d** $ 0 $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox $ 32 $ 8 $ 214,500
Phyllis Burke Davis $ 32 $ 8 $ 210,000
Robert M. Gates $ 33 $ 8 $ 176,000
E. Bradley Jones $ 33 $ 8 $ 211,500
Donald J. Kirk $ 33 $ 8 $ 211,500
Peter S. Lynch** $ 0 $ 0 $ 0
William O. McCoy $ 33 $ 8 $ 214,500
Gerald C. McDonough $ 40 $ 9 $ 264,500
Marvin L. Mann $ 32 $ 8 $ 214,500
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ 33 $ 8 $ 214,500
</TABLE>
* Information is for the calendar year ended December 31, 1997 for
230 funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead
are compensated by FMR.
A Compensation figures include cash, amounts required to be
deferred, and may include amounts deferred at the election of
Trustees. For the calendar year ended December 31, 1997, the Trustees
accrued required deferred compensation from the funds as follows:
Ralph F. Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates,
$62,500; E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William
O. McCoy, $75,000; Gerald C. McDonough, $87,500; Marvin L. Mann,
$75,000; and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $53,699; Marvin L. Mann,
$53,699; and Thomas R. Williams, $62,462.
B Compensation figures include cash.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOR SPARTAN
ARIZONA MUNICIPAL MONEY MARKET FUND FOUND IN THE "INVESTMENT
POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2:
The following are 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)).
(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.
With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's policies on quality and maturity, see the section
entitled "Quality and Maturity" on page 9.
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.
