FIDELITY DESTINY PORTFOLIOS, 485BPOS, 1996-11-18

FIDELITY DESTINY PORTFOLIOS
485BPOS, 1996-11-18

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 62 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. 62
Fidelity Destiny Portfolios
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617) 570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(X) On November 22, 1996 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) On ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) On ( ) pursuant to paragraph (a)(ii) of Rule 485

If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed post-effective
amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and the notice required by such Rule on or
about November 29, 1996.
FIDELITY DESTINY PORTFOLIOS
CROSS REFERENCE SHEET
Form N-1A Item Number

Part A Prospectus Caption

1 Cover Page

2a Expenses; Breakdown of Expenses

b,c Contents; Who May Want to Invest

3a Financial Highlights

b *

c,d Performance

4a(i) Charter

a(ii) Investment Principles and Risks;
Fundamental Investment Policies and
Restrictions

b Securities and Investment Practices

c Who May Want to Invest; Investment
Principles and Risks; Securities and
Investment Practices; Fundamental
Investment Policies and Restrictions

5a Charter

b(i) Cover Page; Charter; FMR and Its Affiliates

b(ii) Charter; FMR and Its Affiliates; Breakdown
of Expenses

Expenses; Breakdown of Expenses;
b(iii) Management Fee

c,d Cover Page; Charter; FMR and Its Affiliates;
Breakdown of Expenses

e FMR and Its Affiliates; Other Expenses

f Expenses

g Expenses; FMR and Its Affiliates

5A Performance

6a(i) Charter

a(ii) How to Buy Shares; How to Sell Shares;
Investor Services; Transaction Details;
Exchange Restrictions

a(iii) Transaction Details

b FMR and Its Affiliates

c Transaction Details; Exchange Restrictions

d Who May Want to Invest; How to Buy
Shares

e Cover Page; Types of Accounts; How to Buy
Shares; How to Sell Shares; Investor
Services; Exchange Restrictions

f,g Dividends, Capital Gains, and Taxes

h *

7a Cover Page; Charter

b,c How to Buy Shares; Transaction Details

d How to Buy Shares

e Expenses

f Breakdown of Expenses

8 How to Sell Shares; Transaction Details;
Exchange Restrictions

9 *

*Not Applicable

FIDELITY
DESTINY PORTFOLIOS:
DESTINY I AND DESTINY II
Please read this Prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds ' most recent financial report and portfolio listing
or a copy of the Statement of Additional Information (SAI) dated November
22, 1996. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials on the
SEC's Internet Web site (http:/www.sec.gov). The SAI is incorporated herein
by reference (legally forms a part of the prospectus). For a free copy of
either document, call Fidelity Distributors Corporation (FDC) at the
appropriate number listed below, or your investment professional.
FIDELITY DISTRIBUTORS CORPORATION
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC., BROKER/DEALER
SERVICES DIVISION
Nationwide (toll-free) 1-800-433-0734
Overseas (call collect) 1-617-328-5000

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.

LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DES-pro-1196
Each fund seeks capital growth. Although many of the securities in each
fund's portfolio at any given time may be income-producing, income
generally will not be a consideration in the selection of securities.
Shares of each fund may be purchased only through Fidelity Systematic
Investment Plans: Destiny Plans I and Destiny Plans II (the Plans or a
Plan), a unit investment trust. Details of the Plans, including the
Creation and Sales Charges, as well as Custodian Fees, are discussed in the
Prospectus for the Plans. The charges for the first year of a Plan may
amount to as much as 50% of the amounts paid under a Plan. Prospective
investors should read this Prospectus in conjunction with the Plans'
Prospectus.
PROSPECTUS
NOVEMBER 22, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
PROSPECTUS

KEY FACTS WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly operating expenses.

FINANCIAL HIGHLIGHTS A summary of each fund's financial data.

PERFORMANCE How each fund has done over time.

THE FUNDS IN DETAIL CHARTER How each fund is organized.

INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach
to investing.

BREAKDOWN OF EXPENSES How operating costs are calculated
and what they include.

YOUR ACCOUNT HOW TO BUY SHARES

HOW TO SELL SHARES Taking money out and closing your
account.

INVESTOR SERVICES Services to help you manage your account.

SHAREHOLDER AND ACCOUNT DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES

TRANSACTION DETAILS Share price calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

ANNUAL REPORT

DESTINY I

INVESTMENTS A-1 A complete list of the fund's investments with their market
values.

FINANCIAL STATEMENTS A-6 Statements of assets and liabilities, operations, and changes in
net assets.

DESTINY II

INVESTMENTS A-1 A complete list of the fund's investments with their market
0 values.

FINANCIAL STATEMENTS A-1 Statements of assets and liabilities, operations, and changes in
5 net assets.

NOTES A-1 Notes to the financial statements.
9

REPORT OF INDEPENDENT A-2 The auditors' opinion.
ACCOUNTANTS 2

DISTRIBUTIONS A-2
3

</TABLE>

NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK AND FUND
SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK
OR INSURED BY THE FDIC.
KEY FACTS

WHO MAY WANT TO INVEST
Each fund is designed for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns and
who want to be invested in the stock market for its long-term growth
potential. Each fund invests for growth and does not pursue income.
Shares of each fund may be acquired only through the purchase of an
interest in Fidelity Systematic Investment Plans: Destiny Plans I or
Destiny Plans II. The funds are designed for investors who are
seeking accumulation of capital through regular, systematic investing over
a period of 10 years or more. Investments in the funds are based on the
concept of "dollar-cost averaging." This involves consistently buying
uniform dollar amounts of a fund regardless of the price, at regular
intervals. When prices are low, more shares are bought than when prices are
high. Because the value of the securities in each fund fluctuates with
market conditions, if you liquidate your Plan investment when the market
value of your shares is less than their original cost, including the
initial Plan's Creation and Sales Charges, you will incur a loss.
Investments in a systematic investment plan do not eliminate market risk.
While FMR will seek to realize capital growth over the lifetime of a Plan,
the policies FMR follows may not be appropriate if you are unable to
complete your Plan. You should also consider your ability to continue to
invest during periods of varying economic and market conditions.
Receipt by each fund of investments on a systematic basis tends to provide
a more consistent level of fund assets than might be the case for those
funds whose shares are sold directly and may allow each fund to plan for
the gradual accumulation of various individual security positions. One
example of how each fund could employ this concept is through the program
of dollar-cost averaging as described above. Such a program could be
hampered by increased net redemptions or the failure of Plan investors to
purchase shares.
FMR is also the investment adviser to certain other investment companies
not sold through systematic investment plans, which also have objectives of
capital growth. The investment policies employed by each of these funds
vary, as do the sales charges assessed to fund share purchases and the
investment results each has attained.
Each fund is not in itself a balanced investment plan. You should consider
your investment objective and tolerance for risk when making an investment
decision. When you sell your fund shares, they may be worth more or less
than what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you
buy or sell shares of a fund. Neither fund will offer its shares
publicly except through the Plans, which impose separate Creation and Sales
Charges. Creation and Sales Charges vary according to the monthly
investment size and duration of each Plan. Please refer to the Plans'
Prospectus for details.
Destiny I Destiny II

Maximum sales charge on None None
purchases and reinvested
distributions

Maximum deferred sales None None
charge

Redemption fee None None

Exchange fee None None

ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR) that
varies based on its performance. Each fund also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports.
Management fees and other expenses are reflected in each fund's share price
and are not charged directly to individual shareholder accounts. For
accounts maintained within the Plans, separate custodian fees and an annual
service fee are charged directly to Planholders. Please refer to the
section "Breakdown of Expenses," beginning on page and the Plans'
Prospectus for further information.
The following are figures based on historical expenses of each fund, and
are calculated as a percentage of average net assets of each fund.
Destiny Destiny II
I

Management fee .62 % .73 %

12b-1 fee (Distribution Fee) None None

Other expenses .03 % .05 %

Total operating expenses .65 % .78 %

EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment, assuming a 5% annual return and full redemption at the end of
each time period:
1 Year 3 Years 5 Years 10 Years

Destiny I $ 7 $ 21 $ 36 $ 81

Destiny II $ 8 $ 25 $ 43 $ 97

THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
Please refer to page for the funds' past performance. As stated above,
Creation and Sales Charges vary for each Plan. Generally, however, these
charges are structured to decrease as a percentage of the monthly
investment as the Plan progresses. Consequently, the major portion of the
total Creation and Sales Charges incurred during the life of a Plan are
assessed within its first year. For a detailed explanation of applicable
rate structure, please refer to the Plans' Prospectus.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in the funds' Annual Report and have been audited
by Coopers & Lybrand L.L.P. , independent accountants. Their report
on the financial statements and financial highlights is included in the
Annual Report. The financial statements, the financial highlights, and the
report are attached.
The financial highlights tables that follow and each fund's financial
statements are included in the funds' Annual Report and have been audited
by Coopers & Lybrand L.L.P. , independent accountants. Their report
on the financial statements and financial highlights is included in the
Annual Report. The financial statements, the financial highlights, and the
report are incorporated by reference into the funds' SAI, which may be
obtained free of charge from FDC.
DESTINY I

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Selected Per-Share Data and
Ratios

2.Years ended
1996 1995 1994C 1993E 1993F 1992F 1991F 1990F 1989F 1988F 1987F
September 30

3.Net asset value, $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03
$ 12.44 $ 15.93 $ 16.04
beginning of period

4.Income from
Investment Operations

5. Net investment
.45 .41 .30 .04 .26 .31 .33 .46G .30 .24 .28
income

6. Net realized and
2.42 3.54 1.69 .75 3.16 2.55 1.25 1.18 1.81 (.35) 2.47
unrealized gain
(loss)

7. Total from
2.87 3.95 1.99 .79 3.42 2.86 1.58 1.64 2.11 (.11) 2.75
investment operations

8.Less Distributions

9. From net investment
(.43) (.34) (.11) (.14) (.30) (.49) (.10) (.38) (.26) (.39) (.32)
income

10. From net realized
(.81) (2.53) (1.04) (1.01) (2.44) (1.06) (.49) (1.05) (.26) (2.99) (2.54)
gain

11. Total distributions
(1.24) (2.87) (1.15) (1.15) (2.74) (1.55) (.59) (1.43) (.52) (3.38) (2.86)

12.Net asset value,
$ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03 $ 12.44 $ 15.93
end of period

13.Total returnB
16.04% 27.49% 12.30% 4.77% 23.90% 20.18% 11.93% 12.17% 17.90% (1.45) 22.43%
%

14.Net assets, end of
$ 4,565 $ 4,053 $ 3,273 $ 2,973 $ 2,869 $ 2,373 $ 2,023 $ 1,832 $ 1,662 $ 1,440 $ 1,461
period (In millions)

15.Ratio of expenses
.65% .68% .70% .65% .66% .61% .50% .53% .60% .60% .60%
to average net assets

16.Ratio of net
2.40% 2.35% 1.69% 1.11% 1.83% 2.00% 2.45% 3.37% 2.35% 2.10% 2.20%
investment income to
average net assets

17.Portfolio turnover
42% 55% 77% 82% 75% 75% 84% 75% 72% 80% 91%
rate

18.Average
$ .0175
commission rate

</TABLE>

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
19.Selected Per-Share Data and
Ratios

20.Years ended
1996 1995 1994 1993E 1993F 1992F 1991F 1990F 1989F 1988F 1987F
September 30

21.Net asset value,
$ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88 $ 6.08 $ 6.99 $ 5.51
beginning of period

22.Income from
Investment Operations

23. Net investment
.24 .22 .14 .01 .09 .11 .10 .19G .08 .04 .01
income

24. Net realized and
1.34 1.99 .96 .41 1.61 1.36 .86 .76 .91 (.06) 1.57
unrealized gain
(loss)

25. Total from
1.58 2.21 1.10 .42 1.70 1.47 .96 .95 .99 (.02) 1.58
investment operations

26.Less Distributions

27. From net
(.22) (.17) (.04) (.05) (.12) (.11) (.12) (.12) (.06) (.03) --
investment income

28. From net realized
(.32) (.99) (.43) (.30) (.99) (.96) (.05) (.67) (.13) (.86) (.10)
gain

29. Total distributions
(.54) (1.16) (.47) (.35) (1.11) (1.07) (.17) (.79) (.19) (.89) (.10)

30.Net asset value,
$ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88 $ 6.08 $ 6.99
end of period

31.Total returnB
15.43% 26.98% 12.67% 4.93% 23.28% 20.61% 14.35% 14.42% 16.76% (.23) 29.37%
%

32.Net assets, end of
$ 2,538 $ 2,032 $ 1,437 $ 1,143 $ 1,061 $ 479 $ 326 $ 221 $ 143 $ 78 $ 37
period (In millions)

33.Ratio of expenses
.78% .80% .80% .84% .84% .88% .84% .87% .97% 1.12% 1.50%
to average net assets

34.Ratio of net
2.38% 2.33% 1.56% .69% 1.41% 1.60% 1.70% 3.07% 1.53% 1.07% .39%
investment income to
average net assets

35.Portfolio turnover
37% 52% 72% 80% 81% 113% 129% 112% 128% 148% 183%
rate

36.Average
$ .0182
commission rate

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D 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.
E THREE MONTHS ENDED SEPTEMBER 30, 1993
F YEARS ENDED JUNE 30
G INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDENDS OF $.07 PER
SHARE.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
All total returns quoted below do not include the effect of paying the
separate Creation and Sales Charges and Custodian Fees associated with the
purchase of shares of the funds through the Plans. Total returns would be
lower if Creation and Sales Charges and Custodian Fees were taken into
account. As previously discussed, shares of the funds may be acquired only
through the Plans. Investors should consult the Plans' Prospectus for
complete information regarding Creation and Sales Charges and Custodian
Fees.
Each fund's fiscal year runs from October 1 through September 30. The
tables below show each fund's performance over past fiscal years. The
charts on page present calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal periods ended September 30 , 1996 Past 1 Past 5 Past 10 Life of
year years years fund

Destiny I 16.04% 19.05% 17.62% 18.41%*

Destiny II 15.43% 18.70% 18.75% 21.86%**

</TABLE>

CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Past 10 Life of
September 30 , 1996 year years years fund

Destiny I 16.04% 139.10% 406.58% 8,330.83%*

Destiny II 15.43% 135.69% 457.44% 739.80%**

</TABLE>

* LIFE OF FUND - JULY 10, 1970 (COMMENCEMENT OF OPERATIONS).
** LIFE OF FUND - DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS).
The following tables show Destiny Plans I and Destiny Plans II average
annual total returns calculated for the one, five, ten years and Life of
Plan ended September 30, 1996 for a $50/month, 15 year Plan. Life of Plan
figures are for the periods October 1, 1981 to September 30, 1996 for
Destiny Plans I and Commencement of Operations (December 30, 1985) through
September 30, 1996 for Destiny Plans II. The following Plan-related average
annual total returns include change in share price, reinvestment of
dividends and capital gains, and the effects of the separate Creation and
Sales Charges and Custodian Fees assessed through the Plans. The
illustrations assume an initial $1,000 lump sum investment at the beginning
of each period shown with no subsequent Plan investments. Because the
illustrations assume lump sum investments, they do not reflect what
investors would have earned only had they made regular monthly investments
over the period. Consult the Plans' Prospectus for more complete
information on applicable charges and fees.
AVERAGE ANNUAL TOTAL RETURNS - DESTINY PLANS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Past 10 Life of
September 30 , 1996 year years years plan

Destiny I -44.54% 14.75% 16.08% 19.34%

Destiny II -44.82% 14.42% 17.19% 20.42%

</TABLE>

EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
STANDARD & POOR'S 500 INDEX (S&P 500) is a widely recognized,
unmanaged index of common stocks.
Unlike each fund's returns, the total returns of the comparative index do
not include the effect of any brokerage commissions, transaction fees, or
other costs of investing.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average, which
currently reflects the performance of over 736 mutual funds with similar
objectives. This average, published by Lipper Analytical Services, Inc.,
excludes the effect of sales charges.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
A growth or growth and income fund may quote its adjusted net asset value
including all distributions paid. This value may be averaged over specified
periods and may be used to calculate a fund's moving average.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, please call FDC at
1-800-433-0734.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
YEAR-BY-YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1990 1991 1992 1993 1994 1995

DESTINY I -3.15% 38.92 15.15 26.42 4.43% 36.95
% % % %

Standard & Poor's 500 Index -3.10 30.47 7.62% 10.08 1.32% 37.58
% % % %

Lipper Growth Funds Average -4.72 37.08 7.86% 10.61 -2.17% 30.79
% % % %

Consumer Price Index 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: -3.15
Row: 6, Col: 1, Value: 38.92
Row: 7, Col: 1, Value: 15.15
Row: 8, Col: 1, Value: 26.42
Row: 9, Col: 1, Value: 4.430000000000001
Row: 10, Col: 1, Value: 36.95
(LARGE SOLID BOX) DESTINY I
YEAR-BY-YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar years 1990 1991 1992 1993 1994 1995

DESTINY II -2.52% 41.42 15.48 26.81 4.48% 35.96
% % % %

Standard & Poor's 500 Index -3.10% 30.47 7.62% 10.08 1.32% 37.58
% % %

Lipper Growth Funds Average -4.72% 37.08 7.86% 10.61 -2.17% 30.79
% % %

Consumer Price Index 6.11% 3.06% 2.90% 2.75% 2.67% 2.54%

</TABLE>

Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: -2.52
Row: 6, Col: 1, Value: 41.42
Row: 7, Col: 1, Value: 15.48
Row: 8, Col: 1, Value: 26.81
Row: 9, Col: 1, Value: 4.48
Row: 10, Col: 1, Value: 35.96
(LARGE SOLID BOX) DESTINY II
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Fidelity Destiny Portfolios, an open-end management investment company
originally organized as a Massachusetts corporation on January 7, 1969 and
reorganized as a Massachusetts business trust on June 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent or the Plans' custodian, as applicable, will mail proxy
materials in advance, including a voting card and information about the
proposals to be voted on. The number of votes you are entitled to is based
upon the dollar value of your investment.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which chooses their investments and handles
their business affairs. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) in London, England, and Fidelity Management & Research (Far East)
Inc. (FMR Far East) in Tokyo, Japan, assist FMR with foreign investments.
As of September 30 , 1996, FMR advised funds having approximately
27 million shareholder accounts with a total value of more than
$ 406 billion.
George A. Vanderheiden is vice president and manager of Destiny I and
Destiny II, which he has managed since 1980 and 1985, respectively. Mr.
Vanderheiden also manages several other Fidelity funds. Mr. Vanderheiden is
a managing director of FMR Corp. and leader of the capital appreciation
group. He joined Fidelity in 1971.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services. Fidelity Service
Co. (FSC) performs transfer agent servicing functions for each fund.
FMR Corp. is the ultimate parent company of FMR U.K., and FMR Far East.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
A broker-dealer may use a portion of the commissions paid by a fund to
reduce custodian or transfer agent fees for the fund. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
a fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
Each fund seeks capital growth. Although many of the securities in each
fund's portfolio at any given time may be income-producing, income
generally will not be a consideration in the selection of securities.
Each fund seeks capital growth primarily from equity securities. Each fund
will tend to be fully invested in common stocks and securities convertible
into common stocks, but may also buy other types of securities such as
preferred stocks or bonds. The funds have the flexibility to invest in
large or small, domestic or foreign issuers.
The value of each fund's domestic and foreign investments varies in
response to many factors. Stock values fluctuate in response to the
activities of individual companies and general market and economic
conditions. In the short-term, stock prices can fluctuate dramatically in
response to these factors. The securities of small, less well-known
companies may be more volatile than those of larger companies. Over time,
however, stocks have shown greater growth potential than other types of
securities. FMR may use various investment techniques to hedge a portion of
the funds' risks, but there is no guarantee that these strategies will work
as FMR intends. Also, as a mutual fund, each fund seeks to spread
investment risk by diversifying its holdings among many companies and
industries. When you sell your shares, they may be worth more or less than
what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings and recent investment strategies are detailed in each fund's
financial reports, which are sent to shareholders twice a year. For a free
SAI or financial report, call 1-800-433-0734 or your investment
professional.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not
purchase more than 10% of the outstanding voting securities of a single
issuer.
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, loans, and other direct debt 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.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics and involve greater risk of
default or price changes due to changes in the issuer's creditworthiness,
or they may already be in default. The market prices of these securities
may fluctuate more than higher-quality securities and may decline
significantly in periods of general economic difficulty.
The following tables provide a summary of ratings assigned to debt holdings
(not including money market instruments) in the funds' portfolios. These
figures are dollar-weighted averages of month-end portfolio holdings during
the fiscal year ended 1996, and are presented as a percentage of total
security investments. These percentages are historical and do not
necessarily indicate a fund's current or future debt holdings.
RESTRICTIONS: Each fund currently intends to limit its investment in lower
than Baa-quality debt securities to 10% of its assets.
DESTINY I
FISCAL 1996 DEBT HOLDINGS, BY RATING MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC. CORPORATION
RATING AVERAGE RATING AVERAGE
INVESTMENT GRADE *
Highest quality Aaa 15.7 % AAA 15.7 %
High quality Aa 0.0 % AA 0.0 %
Upper-medium grade A 0.0 % A 0.0 %
Medium grade Baa 0.0 % BBB 0.0 %
LOWER QUALITY *
Moderately speculative Ba 0.0 % BB 0.0 %
Speculative B 0.0 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C C
In default, in arrears -- D 0.0 %
DESTINY II
FISCAL 1996 DEBT HOLDINGS, BY RATING MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC. CORPORATION
RATING AVERAGE RATING AVERAGE
INVESTMENT GRADE*
Highest quality Aaa 16.0 % AAA 16.0 %
High quality Aa 0.0 % AA 0.0 %
Upper-medium grade A 0.0 % A 0.0 %
Medium grade Baa 0.0 % BBB 0.0 %
LOWER QUALITY*
Moderately speculative Ba 0.0 % BB 0.0 %
Speculative B 0.0 % B 0.0 %
Highly speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest quality, no interest C C
In default, in arrears -- D 0.0 %
(AS A % OF INVESTMENTS)
SECURITIES NOT RATED BY MOODY'S OR S&P (dagger) DESTINY I DESTINY II
Investment Grade (double dagger) 0.0% 0.0%

Lower Quality (double dagger) 0.0% 0.0%

Total 0.0% 0.0%
* FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING
GOVERNMENT.
(dagger) THE DOLLAR-WEIGHTED AVERAGE PERCENTAGES REFLECTED IN THIS TABLE
MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES.
(double dagger) AS DETERMINED BY FMR
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to pay interest
and repay principal when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments,
especially those in developing countries, more volatile than U.S.
investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with a
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of a fund and may involve a small investment of
cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that the fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: Each fund may not purchase a security if, as a result, more
than 10% of its net assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include real estate-related instruments.
CASH MANAGEMENT . A fund may invest in money market
securities, in a pooled account of repurchase agreements, and in a money
market fund available only to funds and accounts managed by FMR or its
affiliates, whose goal is to seek a high level of current income while
maintaining a stable $1.00 share price. A major change in interest rates or
a default on the money market fund's investments could cause its share
price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any one issuer. A fund may not invest more than 25% of its
total assets in any one industry. These limitations do not apply to U.S.
Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities. A fund may also lend money to other funds advised by
FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Each fund seeks capital growth. Although many of the securities in each
fund's portfolio at any given time may be income-producing, income
generally will not be a consideration in the selection of securities.
With respect to 75% of its total assets, each fund may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any one issuer and may not purchase more than 10% of the outstanding
voting securities of a single issuer. A fund may not invest more than 25%
of its total assets in any one industry. These limitations do not apply to
U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each fund's assets are reflected in that
fund's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on this page .
FMR may, from time to time, agree to reimburse a fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
determined by taking a basic fee and then applying a performance
adjustment. The performance adjustment either increases or decreases the
management fee, depending on how well a fund has performed relative to its
comparative index.
The basic fee rate (calculated monthly) is calculated by adding a group fee
rate to an individual fund fee rate, and multiplying the result by each
fund's average net assets. The group fee rate is based on the average net
assets of all the mutual funds advised by FMR. This rate cannot rise above
0.52%, and it drops as total assets under management increase.
For September 30, 1996, the group fee rate was .3050 %. The
individual fund fee rate is 0.17% for Destiny I and 0.30% for Destiny II.
The basic fee rate for fiscal 1996 was .48 % for Destiny I and
.61 % for Destiny II.
The performance adjustment rate is calculated monthly by comparing each
fund's performance to that of the Standard & Poor's 500 Index over the most
recent 36-month period. The difference is translated into a dollar amount
that is added to or subtracted from the basic fee. The maximum annualized
performance adjustment rate is limited to +/-0.24% of average net assets up
to and including $100,000,000 and +/-0.20% of the average net assets in
excess of $100,000,000.
The total management fee rate for fiscal 1996 was .62% for Destiny I and
.73% for Destiny II.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
For the fiscal year ended 1996, FMR, on behalf of Destiny I and Destiny II,
paid FMR U.K. and FMR Far East fees equal to .01%, of each fund's
average net assets.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FSC performs transfer agency, dividend disbursing, and shareholder
servicing functions for each fund. FSC also calculates the net asset value
per share (NAV) and dividends for each fund, maintains the funds' general
accounting records, and administers each fund's securities lending program.
For the fiscal year ended 1996, Destiny I and Destiny II paid FSC fees
equal to .00 % and .01 %, respectively, of its average net
assets for transfer agency and related services, and Destiny I and Destiny
II paid FSC fees equal to .02 % and .03 %, respectively, of its
average net assets for pricing and bookkeeping services.
Each fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity. A broker-dealer may use a
portion of the commissions paid by a fund to reduce the fund's custodian or
transfer agent fees.
The portfolio turnover rates for Destiny I and Destiny II for the fiscal
year ended September 30, 1996 were 42 % and 37 %, respectively.
These rates vary from year to year.
YOUR ACCOUNT

HOW TO BUY SHARES
Each fund has an agreement with FDC under which each fund issues shares at
NAV to State Street Bank and Trust Company (State Street) as Custodian for
the Plans. EACH FUND WILL NOT OFFER ITS SHARES PUBLICLY EXCEPT THROUGH THE
PLANS. Generally, State Street will hold directly all shares of each fund
unless a Planholder owns fund shares directly after completing or
terminating a Plan. The terms of the offering of the Plans are contained in
the Plans' Prospectus.
EACH FUND'S SHARE PRICE, called NAV, is calculated every business day.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
4:00 p.m. Eastern time.
Share certificates are not available for fund shares.
HOW TO SELL SHARES
THE FOLLOWING DISCUSSION RELATES ONLY TO THOSE INVESTORS WHO HOLD SHARES
OF THE FUNDS DIRECTLY. Planholders should consult their Plans'
Prospectus for a discussion of the requirements for redemption of
shares from a Plan.
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 4:00 p.m. Eastern time.
If you have certificates for your shares, you must submit them to FSC in
order to sell your shares, and you should call FSC for specific
instructions. The funds currently do not issue share certificates.
For more information, see "Systematic Withdrawal Program" on page of the
Destiny Plans' prospectus.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
signed certificates (if applicable), and
(small solid bullet) Any other applicable requirements listed in the
following table.
Mail your letter to the following address:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Unless otherwise instructed, Fidelity will send a check to the record
address.
TYPE OF REGISTRATION* SPECIAL REQUIREMENTS

<TABLE>
<CAPTION>
<S> <C> <C>
PHONE All accounts (small solid bullet) Maximum check request: $100,000.
(small solid bullet) You may exchange to other Fidelity
funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(small solid bullet) Call FSC at 1-800- 225-5270

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
Mail or in Person
(mail_graphic)
(hand_graphic) Individual, Joint Tenants, Sole (small solid bullet) The letter of instruction must be
Proprietorship, Custodial (Uniform signed by all person(s) required to
Gifts/Transfers to Minors Act), sign for the account exactly as it is
General Partners registered, accompanied by
Corporations, Associations signature guarantee(s).
(small solid bullet) The letter of instruction and a
corporate resolution must be signed
by all person(s) required to sign for
Trusts the account, accompanied by
signature guarantee(s).
(small solid bullet) The letter of instruction must be
signed by the Trustee(s),
accompanied by signature
guarantee(s). (If the Trustee's name
is not registered on your account,
also provide a copy of the trust
document, certified within the last
60 days.)

</TABLE>

* IF YOU DO NOT FALL INTO ANY OF THE ABOVE REGISTRATION CATEGORIES (E.G.,
EXECUTORS, ADMINISTRATORS, CONSERVATORS OR GUARDIANS), PLEASE CALL FSC FOR
FURTHER INSTRUCTIONS.
INVESTOR SERVICES
THE FOLLOWING SHAREHOLDER SERVICES ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES OF A
FUND DIRECTLY. Planholders should consult the section titled "Rights and
Privileges of Planholders" on page of their Plan's Prospectus for a
discussion of distribution options and other pertinent data.
For accounts not associated with the Plans, Fidelity provides a variety of
services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that FSC sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses may be mailed, even if you have more than one account in a
fund. Call FDC if you need additional copies of financial reports and
prospectuses.
FSC pays for shareholder services but not for special services, such as
producing and mailing historical account documents. You may be required to
pay a fee for special services.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds, including the Fidelity Advisor Funds, by telephone or in
writing. The shares you exchange will carry credit for any front-end sales
charge you previously paid in connection with their purchase.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see "Exchange
Restrictions," page .
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
THE FOLLOWING SHAREHOLDER AND ACCOUNT POLICIES ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES OF THE
FUNDS DIRECTLY. Planholders should consult the section titled "Rights and
Privileges of Planholders" in their Plans' Prospectus for a
discussion of distribution options and other pertinent information.
You can choose from three distribution options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your Plans' application, you will be assigned this
option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 1/2 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Distribution checks will
be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges - are subject
to capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, the transfer agent will send you a
confirmation statement showing how many shares you sold and at what price.
You will also receive a transaction statement at least quarterly. However,
it is up to you or your tax preparer to determine whether this sale
resulted in a capital gain and, if so, the amount of tax to be paid. BE
SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the information they contain
will be essential in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized
but not yet distributed income or capital gains , you will pay the full
price for the shares and then receive a portion of the price back in the
form of a taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
each fund may adjust its dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. F oreign governments may impose taxes on the
funds and their investments and these taxes generally will reduce the
funds' distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the funds, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. FSC normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. If quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
THE OFFERING PRICE (price to buy one share) is a fund's NAV registered
plus creation and sales charges. Creation and Sales Charges vary according
to your monthly investment amount and the duration of each Plan. Each fund
will only offer its shares publicly through the Plans. Please refer to the
Plans' prospectus for details.
Planholders who have redeemed shares under "Cancellation and Refund Rights"
(discussed in the Plans' Prospectus, page ), may not reinstate at NAV the
proceeds from such a cancellation or refund until all refunded Creation and
Sales Charges included in the cancellation have first been deducted in full
from the amount being replaced. To redeem shares from a Plan, see page 15
of the Plans' Prospectus.
WHEN YOU SIGN YOUR PLANS' APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. The exchange privilege is available only to
those who have completed or terminated a Plan and received shares of the
fund directly. In addition, those who have completed or terminated a Plan
and received shares directly may exchange at NAV into any of the Fidelity
funds, including the Fidelity Advisor Funds. The Fidelity family of funds
includes, among others, common stock funds, tax-exempt and corporate bond
funds and money market funds. Before you make an exchange from either fund
you should note the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC This Prospectus and the related SAI do not
constitute an offer by the funds or by FDC to sell or to buy shares of the
funds to any person to whom it is unlawful to make such offer.
FIDELITY DESTINY PORTFOLIOS
CROSS REFERENCE SHEET
Form N-1A Item Number

Part B Statement of Additional Information

10,11 Cover Page

12 Description of the Trust

13a,b,c Investment Policies and Limitations

d Portfolio Transactions

14a, b, c Trustees and Officers

15a,b *

c Trustees and Officers

16a(i) FMR; Portfolio Transactions

a(ii) Trustees and Officers

a(iii),b Management Contracts

c,d Contracts with FMR Affiliates

e,f,g *

h Description of the Trust

i Contracts with FMR Affiliates

17a,b,c, Portfolio Transactions

d,e *

18a Description of the Trust

b *

19a Additional Purchase, Exchange, and
Redemption Information

b Valuation; Additional Purchase, Exchange,
and Redemption Information

c *

20 Distributions and Taxes

21a,b Contracts with FMR Affiliates

c *

22 Performance

23 Financial Statements

*Not Applicable

FIDELITY DESTINY PORTFOLIOS: DESTINY I AND DESTINY II
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 2 2 , 199 6
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 2 2 , 199 6 ). Please retain this document for future
reference. The funds' financial statements and financial highlights,
included in the Annual Report for the fiscal year ended September 30,
199 6 , are incorporated herein by reference. To obtain an additional
copy of the Prospectus or the Annual Report, please call your investment
professional or Fidelity Distributors Corporation:
NATIONWIDE (TOLL FREE) 1-800-433-0734

OVERSEAS (CALL COLLECT) 1-617-328-5000

TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Portfolio Transactions

Valuation

Performance

Additional Purchase, Exchange, and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts

Contracts with FMR Affiliates

Description of the Trust

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
CUSTODIAN
State Street Bank and Trust Company ( State Street )
I.BD-DESSAI-1196
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation shall be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The funds' fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the 1940
Act)) of the funds. However, except for the fundamental investment
limitations listed below, the investment policies and limitations described
in this SAI are not fundamental and may be changed without shareholder
approval. THE FOLLOWING ARE THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. EACH FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as 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 considered 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) if, as a result, more than 25% of the fund's total
assets would be invested in the 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 (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); 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.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) Each fund does not currently intend to sell securities short, unless it
owns or has the right to obtain such 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.
(ii) Each fund does not currently intend to purchase securities on margin,
except that each 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.
(iii) Each 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)). Neither fund will
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. Neither fund will 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.
(iv) Each 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.
(v) Each fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(iv) would exceed 10% of the fund's net assets.
(vi) Each fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) Each fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger , or (ii) to securities of other open-end
investment companies managed by FMR or a successor or affiliate purchased
pursuant to an exemptive order granted by the SEC.
(viii) Each fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) Each fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of the fund's net assets, may
be warrants that are not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the funds in units or
attached to securities are not subject to these restrictions.
(x) Each fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) Each fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the funds' limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
CLOSED-END INVESTMENT COMPANIES. Each fund may purchase the shares of
closed-end investment companies to facilitate investment in certain
countries. Shares of closed-end investment companies may trade at a premium
or a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Deposit a ry Receipts (ADRs) as well as other "hybrid" forms
of ADRs including European Deposit a ry Receipts (EDRs) and Global
Deposit a ry Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
deposit a ry banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by a
custodian bank or similar financial institution in the issuer's home
country. The deposit a ry bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are an alternative to directly purchasing the underlying
foreign securities in their national markets and currencies. However, ADRs
continue to be subject to many of the risks associated with investing
directly in foreign securities. These risks include foreign exchange risk
as well as the political and economic risks of the underlying issuer's
country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, Options and Futures Relating to Foreign
Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put
and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the SEC with respect to coverage of options
and futures strategies by mutual funds, and if the guidelines so require
will set aside appropriate liquid assets in a segregated custodial account
in the amount prescribed. Securities held in a segregated account cannot be
sold while the futures or option strategy is outstanding, unless they are
replaced with other suitable assets. As a result, there is a possibility
that segregation of a large percentage of a fund's assets could impede
portfolio management or the fund's ability to meet redemption requests or
other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Index (S&P
500) . Futures can be held until their delivery dates, or can be closed
out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SAI, may be changed as regulatory agencies
permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result,
a fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. A fund may
terminate its position in a put option it has purchased by allowing it to
expire or by exercising the option. If the option is allowed to expire, the
fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing
it out in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. Government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will
borrow through the program only when the costs are equal to or lower than
the cost of bank loans. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity
or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part
owner of any collateral, and would bear the costs and liabilities
associated with owning and disposing of the collateral. In addition, it is
conceivable that under emerging legal theories of lender liability,
the fund could be held liable as a co-lender. Direct debt
instruments may also involve a risk of insolvency of the lending bank or
other intermediary. Direct debt instruments that are not in the form of
securities may offer less legal protection to a fund in the event of fraud
or misrepresentation. In the absence of definitive regulatory guidance,
each fund relies on FMR's research in an attempt to avoid situations where
fraud or misrepresentation could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the
borrower, it may have to rely on the agent to apply appropriate credit
remedies against a borrower. If assets held by the agent for the benefit of
a fund were determined to be subject to the claims of the agent's general
creditors, the fund might incur certain costs and delays in realizing
payment on the loan or loan participation and could suffer a loss of
principal or interest.
Direct indebtedness purchased by each fund may include letters of
credit, revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations 1 and 5 ).
For purposes of these limitations, each fund generally will treat the
borrower as the "issuer" of indebtedness held by the fund. In the case of
loan participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the funds, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expense s , in connection with
opening, maintaining, and closing short sales against the box.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the swap
agreement would tend to decrease the fund's exposure to U.S. interest rates
and increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared
to make such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. Each fund expects to be able to
eliminate its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to ,
the size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges and
may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) in accordance with a
ranking of broker-dealers determined periodically by FMR's investment staff
based upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI and Fidelity Brokerage
Services (FBS), subsidiaries of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services. From September 1992 through
December 1994, FBS operated under the name Fidelity Brokerage Services
Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an
unlimited liability company and assumed the name FBS. Prior to September 4,
1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL)
as a wholly owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family own,
directly or indirectly, more than 25% of the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
The funds' portfolio turnover rates for the fiscal periods
ended September 30, 1996 and 199 5 are illustrated in
the following table :
Portfolio Turnover Rates

1996 1995

Destiny I 42 % 55%

Destiny II 37 % 52%

BROKERAGE COMMISSIONS. The table below lists the total brokerage
commissions and the dollar amount of commissions paid to FBSI and FBS/FBSL
for the fiscal periods ended September 30, 1996, 1995, and 1994.
Fiscal Total To FBSI To FBS/FBSL
Period Ended
September 30

Destiny I

1996 $ 606,770 $ 600,318 $ 6,452

1995 $ 3,136,608 $ 922,459 $ 4,551

1994 $ 3,962,343 $ 1,385,392 $ 0

Destiny II

1996 $ 306,880 $ 303,168 $ 3,712

1995 $ 1,501,135 $ 436,918 $ 2,275

1994 $ 1,688,528 $ 617,397 $ 0

The table below lists for fiscal 1996 the percentage of aggregate brokerage
commissions paid to FBSI and FBS/FBSL, and the percentage of the aggregate
dollar amount of transactions for which each fund paid brokerage
commissions to FBSI and FBS/FBSL. The difference in the percentage of the
brokerage commissions paid to and the percentage of the dollar amount of
transactions effected through FBSI is a result of the low commission rates
charged by FBSI. The table also includes the amount of brokerage
commissions paid to brokerage firms that provided research services and the
approximate amount of transactions effected through brokerage firms that
provided research services.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal % of % of % of % of Commissions Transactions
Period Ended Commission Transactions Commissions Transactions Paid To Firms with Brokerage
September 30, 1996 s Effected Paid Effected Providing Firms Providing
Paid to FBSI through To FBS/FBSL through Research Research
FBSI FBS/FBSL Services* Services

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Destiny I 26.1% 36.8% 0.3% 0.2% $ 2,198,338 $ 2,171,009,661

Destiny II 25.8% 36.8% 0.3% 0.2% $ 1,120,194 $ 1,104,934,980

</TABLE>

* The provision of research services was not necessarily a factor in the
placement of all this business with such firms.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
FSC normally determines each fund's net asset value per share (NAV) as of
the close of the NYSE (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of this time for the purpose of
computing each fund's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the United States are valued at last sale price or,
if no sale has occurred, at the closing bid price. Most equity securities
for which the primary market is outside the United States are valued using
the official closing price or the last sale price in the principal market
in which they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid price normally is used.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets. Fixed-income
securities and convertible securities may also be valued on the basis of
information furnished by a pricing service that uses a valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. Use of pricing services has been approved by the
Board of Trustees. A number of pricing services are available, and the
Trustees, on the basis of an evaluation of these services, may use various
pricing services or discontinue the use of any pricing service.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate current value.
Futures contracts and options are valued on the basis of market quotations,
if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Securities and other assets for which there is no readily available market
value are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more accurately
reflect the fair market value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period; however, returns quoted by each fund do not include the
effect of paying the separate Creation and Sales Charges and Custodian Fees
associated with the purchase of shares of the funds through Fidelity
Destiny Systematic Investment Plans. Total returns would be lower if
Creation and Sales Charges and Custodian Fees were taken into account.
Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in a fund over a
stated period, and then calculating the annually compounded percentage rate
that would have produced the same result if the rate of growth or decline
in value had been constant over the period. For example, a cumulative total
return of 100% over ten years would produce an average annual total return
of 7.18%, which is the steady annual rate of return that would equal 100%
growth on a compounded basis in ten years. While average annual total
returns are a convenient means of comparing investment alternatives,
investors should realize that a fund's performance is not constant over
time, but changes from year to year, and that average annual total returns
represent averaged figures as opposed to the actual year-to-year
performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs , adjusted
NAVs , and benchmark indices may be used to exhibit performance. An
adjusted NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted NAVs
are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On September 2 7 , 1996 , the 13-week and 39-week
long-term moving averages were $ 19.70 and $ 19.37 ,
respectively, for Destiny I and $ 11.22 and $ 11.04 ,
respectively, for Destiny II.
HISTORICAL PLAN RESULTS. The following tables show the funds' total returns
for the periods ended September 30, 1996 for a $50/month, 15 year
Plan. The following Plan-related total returns include change in share
price, reinvestment of dividends and capital gains, and the effects of the
separate Creation and Sales Charges and Custodian Fees assessed through the
Plans. Consult the Plans' Prospectus for more complete information on
applicable charges and fees.
DESTINY PLANS I
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Years Ten Years Life of Plan*

$50/month, 15-year Plan: - 44.54% 14.75% 16.08% 19.34%

</TABLE>

DESTINY PLANS II
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Years Ten Years Life of Plan**

$50/month, 15-year Plan: - 44.82% 14.42% 17.19% 20.42%

</TABLE>

* From October 1, 1981.
** From December 30, 1985 (commencement of operations).
The following table s show the income and capital elements of each
fund's cumulative total return. The table compares each fund's return to
the record of the S&P 500, the Dow Jones Industrial Average (DJIA), and the
cost of living as measured by the Consumer Price Index
( CPI) , over the same period. The CPI information is as of the
month end closest to the initial investment date for each fund. The S&P 500
and the DJIA comparisons are provided to show how each fund's total return
compared to the record of a broad unmanaged index of common stock
prices and a narrower set of stocks of major industrial companies,
respectively, over the same period. Each fund has the ability to invest in
securities not included in either index, and its investment portfolio may
or may not be similar in composition to the ind exes . The S&P
500 and DJIA returns are based on the prices of unmanaged groups of
stocks and, unlike each fund' s returns, do not include the
effect of brokerage commissions and other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the 15-year period ended September 30, 1996
for Destiny I and the 10-year period ended September 30, 1996 for Destiny
II, assuming all distributions were reinvested. The figures below reflect
the fluctuating stock prices of the specified periods and should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Destiny I or Destiny II
today. Tax consequences of different investments have not been factored
into the figures below.
During the 15-year period ended September 30, 1996, a hypothetical $10,000
investment in Destiny I would have grown to $159,211.
DESTINY I INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of

Year Initial Reinvested Reinvested

Ended $10,000 Dividend Capital Gain Total

September 30 Investment Distributions Distributions Value S&P DJIA CPI

1982 $ 10,721 $ 472 $ 420 $ 11,613 $ 10,993 $ 11,259 $ 10,504

1983 15,637 1,130 3,451 20,218 15,869 16,236 10,805

1984 13,245 1,547 5,887 20,679 16,618 16,673 11,266

1985 12,981 2,348 7,829 23,158 19,033 19,254 11,620

1986 14,291 3,248 13,890 31,429 25,076 26,574 11,824

1987 17,849 4,753 23,300 45,902 35,971 40,229 12,339

1988 14,327 4,672 21,883 40,882 31,525 33,937 12,854

1989 17,849 6,952 29,255 54,056 41,927 44,879 13,412

1990 13,305 6,209 25,140 44,654 38,050 42,475 14,238

1991 18,918 10,174 37,497 66,589 49,914 54,124 14,721

1992 18,077 11,147 46,314 75,538 55,434 60,446 15,161

1993 20,264 14,055 61,520 95,839 62,646 67,638 15,569

1994 21,274 15,426 70,927 107,627 64,955 75,129 16,030

1995 22,572 19,094 95,543 137,209 84,278 96,026 16,438

1996 24,531 24,251 110,429 159,211 101,413 120,532 16,931

</TABLE>

EXPLANATORY NOTES: With an initial investment of $10,000 in Destiny
I on September 30, 198 1 , the net amount invested in fund shares
was $10,000. The cost of the initial investment ($10,000), together with
the aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were reinvested),
amounted to $ 103,227 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 5,733 for dividends and $ 26,010 for capital gain s
distributions.
During the 10-year period ended September 30, 1996, a hypothetical
$10,000 investment in Destiny II would have grown to $55, 744.
DESTINY II INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of

Year Initial Reinvested Reinvested

Ended $10,000 Dividend Capital Gain Total

September 30 Investment Distributions Distributions Value S&P DJIA CPI

1987 $ 14,114 $ 0 $ 1,237 $ 15,351 $ 14,345 $ 15,138 $ 10,436

1988 12,327 84 1,727 14,138 12,572 12,770 10,871

1989 14,533 343 3,314 18,190 16,720 16,888 11,343

1990 11,157 610 3,291 15,058 15,174 15,984 12,042

1991 15,968 1,206 6,478 23,652 19,905 20,367 12,450

1992 15,392 1,544 9,498 26,434 22,106 22,746 12,822

1993 18,051 2,217 13,486 33,754 24,983 25,452 13,167

1994 19,317 2,535 16,180 38,032 25,903 28,271 13,557

1995 21,461 3,689 23,141 48,291 33,609 36,135 13,902

1996 23,566 5,182 26,996 55,744 40,442 45,356 14,319

</TABLE>

EXPLANATORY NOTES: With an initial investment of $10,000 in Destiny
II on September 30, 198 6 , the net amount invested in fund
shares was $10,000. The cost of the initial investment ($10,000), together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time they
were reinvested), amounted to $ 31,519 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 2,104 for dividends and $ 11,563 for capital gain
distributions.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Ge nerally , Lipper rank ings
are based on total return, assum e reinvestment of distributions,
but do not take sales charges or redemption fees into consideration,
and are prepared without regard to tax consequences. In addition to
the mutual fund rankings, a fund's performance may be compared to stock,
bond, and money market mutual fund performance indices prepared by Lipper
or other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns available from stock mutual
funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed t o help create a personal
financial profile; worksheets used to project savings needs based on
assumed rates of inflation and hypothetical rates of return; and action
plans offering investment alternatives. Materials may also include
discussions of Fidelity's asset allocation funds and other Fidelity funds,
products , and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns
to those of a benchmark. Measures of benchmark correlation indicate
how valid a comparative benchmark may be. All measures of volatility and
correlation are calculated using averages of historical data.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or
guard against loss in a declining market, the investor's average cost per
share can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price
levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of September 30, 1996 , FMR advised over $ 27 billion in
tax-free fund assets, $ 89 billion in money market fund assets,
$ 284 billion in equity fund assets, $ 57 billion in
international fund assets, and $ 24 billion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION INFORMATION
Each fund is open for business and its NAV is calculated each day the NYSE
is open for trading. The NYSE has designated the following holiday closings
for 199 7 : New Year's Day, Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, a fund's NAV may be affected on days when investors do
not have access to the fund to purchase or redeem shares. In addition,
trading in some of a fund's portfolio securities may not occur on days when
the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of each fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that each fund's income is derived from qualifying dividends.
Because each fund may earn other types of income, such as interest, income
from securities loans, non-qualifying dividends, and short-term capital
gains, the percentage of dividends from the fund that qualifies for the
deduction generally will be less than 100%. Each fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of each fund's dividends
derived from certain U.S. Government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. Short-term capital gains are
distributed as dividend income. Each fund will send each shareholder a
notice in January describing the tax status of dividends and capital gain
distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
As of September 30, 1996 , Destiny I and Destiny II hereby designate
approximately $ 13,703,000 and $ 4,867,000 , respectively, as a
capital gain dividend for the purpose of the dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Destiny Portfolios for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees , Members of the Advisory Board, and executive officers
of the trust are listed below. Except as indicated, each individual has
held the office shown or other offices in the same company for the last
five years. All persons named as Trustees and Members of the Advisory
Board also serve in similar capacities for other funds advised by FMR.
The business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address
of all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons" by
virtue of their affiliation with either the trust or FMR are indicated by
an asterisk (*).
*EDWARD C. JOHNSON 3d (6 6 ), 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 FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (5 5 ), Trustee and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX (6 4 ), Trustee (1991), is a management
consultant (1994). Prior to February 1994, he was President of
Greenhill Petroleum Corporation (petroleum exploration and production).
Until March 1990, Mr. Cox was President and Chief Operating Officer of
Union Pacific Resources Company (exploration and production). He is a
Director of Sanifill Corporation (non-hazardous waste, 1993) , CH2M
Hill Companies (engineering) , Rio Grande, Inc. (oil and gas production),
and Daniel Industries (petroleum measurement equipment manufacturer) .
In addition , he is a member of advisory boards of Texas A&M
University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (6 4 ), Trust ee (1992). Prior to her
retirement in September 1991, Mrs. Davis was the Senior Vice President of
Corporate Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores ) ,
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she is a member of the President's
Advisory Council of The University of Vermont School of Business
Administration.
RICHARD J. FLYNN (7 2 ), Trustee and Chairman of the non-interested
Trustees , is a financial consultant. Prior to September 1986, Mr. Flynn
was Vice Chairman and a Director of the Norton Company (manufacturer of
industrial devices). He is currently a Trustee of College of the Holy Cross
and Old Sturbridge Village, Inc . , and he previously served as a
Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (6 8 ), Trustee . Prior to his retirement in
1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation,
Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical
products), and he previously served as a Director of NACCO Industries, Inc.
(mining and marketing, 1985-1995) and Hyster-Yale Materials Handling,
Inc. (1985-1995). In addition, he serves as a Trustee of First Union
Real Estate Investments, a Trustee and member of the Executive Committee of
the Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (6 3 ), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as C hairman of the Board of Directors of the
National Arts Stabilization F und, Vice Chairman of the Board of
Trustees of the Greenwich Hospital Association, a Member of the
Public Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995) , and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
EDWARD H. MALONE (7 1 ), Trustee. Prior to his retirement in 1985, Mr.
Malone was Chairman, General Electric Investment Corporation and a Vice
President of General Electric Company. He is a Director of Allegheny Power
Systems, Inc. (electric utility), General Re Corporation (reinsurance) and
Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of
t he Naples Philharmonic Center for the Arts and Rensselaer
Polytechnic Institute, and he is a member of the Advisory Boards of Butler
Capital Corporation F unds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (6 3 ), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (6 8 ), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring in
1987, Mr. Williams served as Chairman of the Board of First Wachovia
Corporation (bank holding company), and Chairman and Chief Executive
Officer of The First National Bank of Atlanta and First Atlanta Corporation
(bank holding company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications) and
President of BellSouth Enterprises. He is currently a Director of Liberty
Corporation (holding company), Weeks Corporation of Atlanta (real estate,
1994), and Carolina Power and Light Company (electric utility, 1996).
Previously, he was a Director of First American Corporation (bank holding
company, 1979-1996). In addition, Mr. McCoy serves as a member of the Board
of Visitors for the University of North Carolina at Chapel Hill (1994) and
for the Kenan Flager Business School (University of North Carolina at
Chapel Hill).
WILLIAM J. HAYES (6 2 ), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
GEORGE A. VANDERHEIDEN ( 50 ), is Vice President and manager of
Destiny I and Destiny II, which he has managed since 1980 and 1985,
respectively. Mr. Vanderheiden also manages several other Fidelity funds.
Mr. Vanderheiden is a managing director of FMR Corp. and leader of the
capital appreciation group. He joined Fidelity in 1971.
ARTHUR S. LORING (4 8 ), Secretary, is Senior Vice President (1993)
and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (4 9 ), Treasurer (1995), is Treasurer of the
Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr.
Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he
served in various positions, including Vice President of Proprietary
Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief
Operations Officer of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (5 6 ), Manager of Security Transactions of
Fidelity's equity funds is Vice President of FMR.
JOHN H. COSTELLO ( 50 ), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH ( 50 ), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds,
Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and
Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993) .
The following table sets forth information describing the compensation of
each current Trustee or Member of the Advisory Board of each fund
for his or her services as trustee for the fiscal year ended September 30,
1996 .
COMPENSATION TABLE
Aggregate Compensation

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward H. Marvin Thomas William
Burkhead** Cox Burke J. Johnson Bradley J. Kirk Lynch** McDonoug Malone L. R. O.
*** ***
Davis Flynn 3d** Jones h Mann Williams McCoy
***

Destiny I
$ 0 $ 1,581 $ 1,457 $ 1,891 $ 0 $ 1,474 $ 1,474 $ 0 $ 1,455 $ 1,541 $ 1,541 $ 1,473 $ 585

Destiny II
0 830 762 988 0 771 771 0 762 808 808 771 317

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*

J. Gary Burkhead** $ 0 $ 0 $ 0

Ralph F. Cox 5,200 52,000 12 8 ,000

Phyllis Burke Davis 5,200 52,000 12 5 ,000

Richard J. Flynn 0 52,000 16 0 ,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 128,0 0 0

Donald J. Kirk 5,200 52,000 129,5 0 0

Peter S. Lynch 0 0 0

Gerald C. McDonough 5,200 52,000 128,0 0 0

Edward H. Malone 5,200 44,200 128,0 0 0

Marvin L. Mann 5,200 52,000 128,0 0 0

Thomas R. Williams 5,200 52,000 125,0 0 0

William O. McCoy N/A N/A 0

</TABLE>

* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of the funds are compensated by FMR.
*** For the fiscal year ended September 30, 1996, certain of the
non-interested trustees' aggregate compensation from a fund includes
accrued deferred compensation as follows: Destiny I (Cox, $1,331, Malone,
$1,291, and Mann, $1,291) and Destiny II (Cox, $705, Malone, $684, and
Mann, $683).
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995 , each non-interested Trustee may receive payments from a
Fidelity fund during his or her lifetime based on his or her basic trustee
fees and length of service . The obligation of a fund to make such
payments is n either secured n or funded. A Trustee becomes
eligible to participate in the program at the end of the calendar year in
which he or she reaches age 72, provided that, at the time of retirement,
he or she has served as a Fidelity fund Trustee for at least five
years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H.
Witham, and David L. Yunich, all former non-interested Trustees, receive
retirement benefits under the program.
As of October 31, 1996, the Trustees , Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than
1 % of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
with respect only to those accounts not associated with the Plans, pursuant
to which FSC bears the costs of providing these services to existing
shareholders. Other expenses paid by each fund include interest, taxes,
brokerage commissions, and each fund's proportionate share of insurance
premiums and Investment Company Institute dues. Each fund is also liable
for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated November
1, 1993, which were approved by shareholders on October 20, 1993.
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: a basic fee and a
performance adjustment based on a comparison of each fund's performance to
that of the S&P 500.
COMPUTING THE BASIC FEE. Each fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 420 billion of group net
assets - the approximate level for September 1996 - was .3050 %,
which is the weighted average of the respective fee rates for each level of
group net assets up to $ 420 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Annualized Group Effective Annual
Group Assets Rate Net Assets Fee Rates

$ 0 - 3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3253

36 - 42 .3400 250 .3223

42 - 48 .3350 275 .3198

48 - 66 .3250 300 .3175

66 - 84 .3200 325 .3153

84 - 102 .3150 350 .3133

102 - 138 .3100

138 - 174 .3050

174 - 228 .3000

228 - 282 .2950

282 - 336 .2900

Over 336 .2850

Prior to November 1, 1993, the group fee rate was based on a schedule with
breakpoints ending at .3100% for average group assets in excess of $102
billion. The group fee rate breakpoints shown above for average group
assets in excess of $138 billion and under $228 billion were voluntarily
adopted by FMR on January 1, 1992. The additional breakpoints shown above
for average group assets in excess of $228 billion were voluntarily adopted
by FMR on November 1, 1993. Each fund's current management contract
reflects these extensions of the group fee rate schedule.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoint s for average group
assets in excess of $210 billion and under $390 billion as shown in the
schedule below. The revised group fee rate schedule was identical to the
above schedule for average group assets under $210 billion. For average
group assets in excess of $210 billion, the group fee rate schedule
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Annualized Group Effective Annual
Group Assets Rate Net Assets Fee Rate

$ 138 - 174 billion .3050% $150 billion .3371%

174 - 210 .3000 175 .3325

210 - 246 .2950 200 .3284

246 - 282 .2900 225 .3249

282 - 318 .2850 250 .3219

318 - 354 .2800 275 .3190

354 - 390 .2750 300 .3163

Over 390 .2700 325 .3137

350 .3113

375 .3090

400 .3067

On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion and up to $390 billion with additional breakpoints voluntarily
adopted by FMR for average group assets in excess of $390 billion is as
follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

174 - $210 billion .3000% $ 150 billion .3371%

210 - 246 .2950 175 .3325

246 - 282 .2900 200 .3284

282 - 318 .2850 225 .3249

318 - 354 .2800 250 .3219

354 - 390 .2750 275 .3190

390 - 426 .2700 300 .3163

426 - 462 .2650 325 .3137

462 - 498 .2600 350 .3113

498 - 534 .2550 375 .3090

Over 534 .2500 400 .3067

425 .3046

450 .3024

475 .3003

500 .2982

525 .2962

550 .2942

</TABLE>

The individual fund fee rates for Destiny I and Destiny II are 0 .17%
and 0 .30%, respectively. Based on the average group net assets of
the funds advised by FMR for September 1996 , the annual basic fee
rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate

Destiny I . 3050 % + 0.17% = . 4750 %

Destiny II . 3050 % + 0.30% = . 6050 %

</TABLE>

* On October 20, 1993, shareholders of Destiny I approved an increase for
the individual fund fee rate from 0.12% to 0.17% effective November 1,
1993.
One-twelfth of this annual basic fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or
downward adjustment, depending upon whether, and to what extent, each
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the S&P 500 (the Index) over the same period.
The performance period consists of the most recent month plus the previous
35 months. Each percentage point of difference, calculated to the nearest
1.0% (up to a maximum difference of +/-10.00) is multiplied by a
performance adjustment rate of 0.02%. The maximum adjustment rate is
limited to +/-0.24% of the average net assets up to and including
$100,000,000 and +/-0.20% of the average net assets in excess of
$100,000,000. This performance comparison is made at the end of each month.
One-twelfth (1/12) of this rate is then applied to each fund's average net
assets for the entire performance period, giving a dollar amount which will
be added to (or subtracted from) the basic fee.
Each fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested
in fund shares at the NAV as of the record date for payment. The
record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on each fund's performance
compared to the investment record of the Index, the controlling factor is
not whether each fund's performance is up or down per se, but whether it is
up or down more or less than the record of the Index. Moreover, the
comparative investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative performance
over a longer or shorter period of time.
The table below shows the management fees paid to FMR (including the amount
of the performance adjustment); the dollar amount of negative or positive
performance adjustments; and the net management fee as a percentage of
the funds ' average net assets for the periods ending
September 30, 1996, 1995, and 1994.
Management Fee Management Fee

Including Performance as a % of

Performance Adjustment Adjustment Average Net Assets

Destiny I

1996 $ 26,878,078 $ 6,251,818 0 . 62 %

1995 $ 23,124,169 $ 5,930,876 0 .65%

1994 $ 20,816,212 $ 5,165,391 0 .65%

Destiny II

1996 $ 16,685,378 $ 2,752,964 0 . 73 %

1995 $ 12,533,380 $ 2,182,118 0 .75%

1994 $ 9,701,148 $ 1,447,673 0 .73%

FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and repayment of the
reimbursement by each fund will lower its total returns.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2% of the first $30 million, 2% of the next $70
million, and 1% of average net assets in excess of $100 million. When
calculating each fund's expenses for purposes of this regulation, each fund
may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On behalf of Destiny I and Destiny II, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive investment advice and research
services outside the United States from the sub-advisers.
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of
FMR U.K. and FMR Far East. For providing non-discretionary investment
advice and research services, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
For providing investment advice and research services on behalf of Destiny
I and Destiny II, the fees paid to the sub-advisers for fiscal 1996,
1995, and 1994 were as follows:
Destiny I

Fiscal Year FMR U.K. FMR Far East

1996 $ 223,448 $ 224,531

1995 $ 106,534 $ 104,413

1994 $ 80,505 $ 107,706

Destiny II

Fiscal Year FMR U.K. FMR Far East

199 6 $ 116,504 $ 117,029

1995 $ 49,145 $ 48,587

1994 $ 31,206 $ 41,006

CONTRACTS WITH FMR AFFILIATES
FSC, an affiliate of FMR, is transfer, dividend disbursing, and
shareholder servicing agent for each fund. FSC receives an annual account
fee and an asset-based fee each based on account size and fund type for
each retail account and certain institutional accounts. With respect to
certain institutional retirement accounts, FSC receives an annual account
fee and an asset-based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes. The
asset-based fees are subject to adjustment if the year-to-date total return
of the S&P 500 exceeds a positive or negative 15%. FSC also collects small
account fees from certain accounts with balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's NAV
and dividends , and maintains each fund's accounting records. The
annual fee rates for these pricing and bookkeeping services are based on
each fund's average net assets, specifically . 0 600 % for the
first $500 million of average net assets and . 03 00 % of
average net assets in excess of $500 million. The fee is limited to a
minimum of $ 60 ,000 and a maximum of $ 80 0,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal periods.
Pricing and Bookkeeping Fees

1996 1995 1994

Destiny I $ 798,587 $ 761,640 $ 761,590

Destiny II $ 793,367 $ 657,465 $ 551,751

FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. For fiscal 1996, 1995, and 1994, there were no
securities lending fees incurred by the funds.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Destiny I and Destiny II are funds of Fidelity Destiny
Portfolios, an open-end management investment company originally organized
as a Massachusetts corporation on January 7, 1969. On June 20, 1984, the
trust was reorganized as a Massachusetts business trust, at which time its
name was changed to Fidelity Destiny Fund. On December 20, 1985, the
trust's name was changed to Fidelity Destiny Portfolios to reflect the
creation of a second series - the original series was named Destiny I and
the second series was named Destiny II. Currently, Destiny I and Destiny II
are the only funds of the trust. The Declaration of Trust permits the
Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
NAV y ou own. The shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in the Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the
trust or a fund may, as set forth in the Declaration of Trust, call
meetings of the trust or a fund for any purpose related to the trust or
f und, as the case may be, including, in the case of a meeting of the
entire trust, the purpose of voting on removal of one or more Trustees. The
trust or any fund may be terminated upon the sale of its assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the trust or the fund, as determined by the current value of
each shareholder's investment in the fund or trust. If not so terminated,
the trust and the funds will continue indefinitely.
CUSTODIAN. State Street Bank and Trust Company, 1776 Heritage Drive,
North Quincy, Massachusetts, is custodian of the assets of the
fund s . 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 Bank of
New York and The Chase Manhattan Bank, each headquartered in New
York, also may serve as special purpose custodian s of certain assets
in connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date includ e mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as the trust's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements , financial highlights for the
fiscal year ended September 30, 1996, and the report of the auditors
thereon are included in the fund' s Annual Report, which is a
separate report supplied with this SAI. Each fund's financial
statements , financial highlights and the report of the auditors
thereon are incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE 'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION O F STANDARD & POOR'S C ORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights, included in the Annual
Report for Destiny I and Destiny II for the fiscal year ended September 30,
1996 are attached to the portfolio's prospectus, are incorporated by
reference into the funds' Statement of Additional Information, and were
filed on November 15, 1996 for the Fidelity Destiny Portfolios (No.
811-1796) pursuant to Rule 30d-1 under the Investment Company Act of 1940
and are incorporated herein by reference.
(b) Exhibits:
1.(a) Declaration of Trust of Registrant, dated June 20, 1984, was
electronically filed and is incorporated herein by reference to Exhibit
1(a) to Post-Effective Amendment No. 59.
(b) Supplement to Declaration of Trust, dated January 14, 1985, was
electronically filed and is incorporated herein by reference to Exhibit
1(b) to Post-Effective Amendment No. 59.
(c) Supplement to Declaration of Trust, dated January 8, 1986, was
electronically filed and is incorporated herein by reference to Exhibit
1(c) to Post-Effective Amendment No. 59.
(d) Supplement to Declaration of Trust, dated January 9, 1987, was
electronically filed and is incorporated herein by reference to Exhibit
1(d) to Post-Effective Amendment No. 59.
(e) Supplement to Declaration of Trust, dated December 30, 1988, was
electronically filed and is incorporated herein by reference to Exhibit
1(e) to Post-Effective Amendment No. 59.
(f) Supplement to Declaration of Trust, dated January 31, 1994, was
electronically filed and is incorporated herein by reference to Exhibit
1(f) to Post-Effective Amendment No. 59.
2. Bylaws of Registrant were electronically filed and are incorporated
herein by reference to Exhibit 2(a) to Post-Effective Amendment No. 59.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract between Registrant, on behalf of Destiny I and
Fidelity Management & Research Company dated November 1, 1993 was
electronically filed and is incorporated herein by reference to Exhibit
5(a) of Post-Effective No. 57.
(b) Management Contract between Registrant, on behalf of Destiny II and
Fidelity Management & Research Company dated November 1, 1993 was
electronically filed and is incorporated herein by reference to Exhibit
5(b) of Post-Effective No. 57.
(c) Sub-Advisory Agreement between Destiny I and FMR U.K. and Fidelity
Management & Research Company dated November 1, 1993 and is incorporated
herein by reference to Exhibit 5(c) of Post-Effective Amendment No. 60.
(d) Sub-Advisory Agreement between Destiny I and FMR Far East and Fidelity
Management & Research Company dated November 1, 1993 was electronically
filed and is incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 57.
(e) Sub-Advisory Agreement between Destiny II and FMR U.K. and Fidelity
Management & Research Company dated November 1, 1993 was electronically
filed and is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 57.
(f) Sub-Advisory Agreement between Destiny II and FMR Far East and Fidelity
Management & Research Company dated November 1, 1993 was electronically
filed and is incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment No. 57.
6. (a) Franchise Agreement dated August 2, 1984, between Registrant, on
behalf of Destiny I, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference to Exhibit
6(a) of Post-Effective Amendment No. 59.
(b) Franchise Agreement dated December 30, 1985, between Registrant, on
behalf of Destiny II, and Fidelity Distributors Corporation, was
electronically filed and is incorporated herein by reference to Exhibit
6(b) of Post-Effective Amendment No. 59.
7. Retirement Plan for Non- Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, was electronically filed and
is incorporated herein by reference to Exhibit 7 of Union Street Trust's
Post-Effective Amendment No. 87.
8. (a) Custodian Agreement, Appendix A and Appendix C, dated February 1,
1996, between State Street Bank and Trust Company and the Registrant is
incorporated herein by reference to Exhibit 8(b) of Fidelity Institutional
Trust's Post-Effective Amendment No. 22 (File No. 33-15983).
(b) Appendix B, dated May 16, 1996 to the Custodian Agreement, dated
February 1, 1996, between State Street Bank and Trust Company and the
Registrant is filed herein as Exhibit 8(b).
(c) Fidelity Group Repo Custodian Agreement among The Bank of New York,
J.P. Morgan Securities, Inc., and the Registrant, dated February 12, 1996,
is incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(d) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Bank of New York and the Registrant, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post Effective Amendment No. 31.
(e) Fidelity Group Repo Custodian Agreement among The Chase Manhattan
Bank, Greenwich Capital Markets, Inc., and the Registrant, dated November
13, 1995, is incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(f) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Chase Manhattan Bank and the Registrant, dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(g) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(g) Joint Trading Account Custody Agreement between The Bank of New
York and the Registrant, dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(h) First Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and the Registrant, dated July 14, 1995, is
incorporated herein by reference to Exhibit 8(i) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
9. Not applicable.
10. Not applicable.
11. Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11.
12. Not applicable.
13. Not applicable.
14.(a) Fidelity Individual Retirement Account, as currently in effect, was
electronically filed and is incorporated herein by reference as Exhibit
14(a) to Union Street Trust's Post-Effective Amendment No. 87.
(b) Forms of Pension Plan and Trust Agreement and Profit-Sharing Plan and
Trust Agreement, as amended and as currently in effect, was electronically
filed and is incorporated herein by reference as Exhibit 14(b) to Union
Street Trust's Post-Effective Amendment No. 87.
(c) Form of Destiny Individual Retirement Account Plan was electronically
filed and is incorporated herein by reference as Exhibit 14(c) to
Post-Effective Amendment No. 58.
(d) Portfolio Advisory Services Individual Retirement Account, as currently
in effect, was electronically filed and is incorporated herein by reference
as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment No. 87.
(e) National Financial Services Corporation Individual Retirement Account,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(h) to Union Street Trust's Post-Effective
Amendment No. 87.
(f) National Financial Services Defined Contribution Plan, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(g) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(h) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) of Commonwealth Trust's Post-Effective Amendment No. 57.
15. Not applicable.
16(a) Schedules and data points for total return for Destiny I and Destiny
II are incorporated herein by reference to Exhibit 16(a) of Post-Effective
Amendment No. 60.
16(b) Schedules and data points for moving averages for Destiny I and
Destiny II are incorporated herein by reference to Exhibit 16(b) of
Post-Effective Amendment No. 60.
17. Financial Data Schedules for Destiny I and Destiny II are filed herein
as Exhibit 17.
Item 25. Persons Controlled by or under Common Control with Registrant

The Board of Trustees of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, Registrant takes the position
that it is not under common control with these other funds since the power
residing in the respective boards and officers arises as the result of an
official position with the respective funds.

Item 26. Number of Holders of Securities
October 31, 1996

Title of Class Number of Record Holders

Shares of Beneficial Interest
Destiny I 97,992

Destiny II 195,081

Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the reasonable
and fair means for determining whether indemnification shall be provided to
any past or present Trustee or officer. It states that the Registrant
shall indemnify any present or past Trustee or officer to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him in connection with any claim, action, suit or proceeding in
which he is involved by virtue of his service as a trustee, an officer, or
both. Additionally, amounts paid or incurred in settlement of such matters
are covered by this indemnification. Indemnification will not be provided
in certain circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.

J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.

Peter S. Lynch Vice Chairman of the Board and Director of FMR.

Marta Amieva Vice President of FMR.

Dwight D. Churchill Vice President of FMR.

John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.

William Danoff Vice President of FMR and of a fund advised by FMR.

Scott E. DeSano Vice President of FMR.

Craig P. Dinsell Vice President of FMR.

Penelope Dobkin Vice President of FMR and of a fund advised by FMR.

George C. Domolky Vice President of FMR.

Larry A. Domash Vice President of FMR.

Bettina Doulton Vice President of FMR and of funds advised by FMR.

Margaret L. Eagle Vice President of FMR and a fund advised by FMR.

Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Gregory Fraser Vice President of FMR and of a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.

Robert Gervis Vice President of FMR.

David L. Glancy Vice President of FMR and of a fund advised by FMR.

Kevin E. Grant Vice President of FMR and of funds advised by FMR.

Michael S. Gray Vice President of FMR and of funds advised by FMR.

Lawrence Greenberg Vice President of FMR and of funds advised by FMR.

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

Boyce I. Greer Vice President of FMR.

Bart Grenier Vice President of FMR.

Robert Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.

William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.

Richard Hazlewood Vice President of FMR and of a fund advised by FMR.

Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.

John R. Hickling Vice President of FMR and of a fund advised by FMR.

Robert F. Hill Vice President of FMR; Director of Technical
Research.

Curt Hollingsworth Vice President of FMR and of funds advised by FMR.

Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.

Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.

David B. Jones Vice President of FMR.

Steven Kaye Vice President of FMR and of a fund advised by FMR.

Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.

David P. Kurrasch Vice President of FMR.

Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.

Alan Leifer Vice President of FMR.

Harris Leviton Vice President of FMR and of a fund advised by FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.

Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.

Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.

Robert H. Morrison Vice President of FMR; Director of Equity Trading.

David L. Murphy Vice President of FMR and of funds advised by FMR.

Andrew S. Offit Vice President of FMR and of a fund advised by FMR.

Jacques Perold Vice President of FMR.

Brian S. Posner Vice President of FMR and of a fund advised by FMR.

Anne Punzak Vice President of FMR.

Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.

Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.

Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.

Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.

Thomas Sweeney Vice President of FMR and of a fund advised by FMR.

Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of a fund advised by FMR.

George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.

</TABLE>

(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
Pembroke Hall, 42 Crow Lane, Pembroke, Bermuda
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FMR Texas Inc., and FMR (Far
East) Inc.; Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of FMR
Corp.; Chairman of the Board and Representative
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.

J. Gary Burkhead President and Director of FMR U.K., FMR, FMR (Far
East) Inc., and FMR Texas Inc.; Managing Director of
FMR Corp.; Senior Vice President and Trustee of
funds advised by FMR.

Richard Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K.; Vice President of FMR.

Stephen P. Jonas Treasurer of FMR U.K., FMR, FMR (Far East) Inc.,
and FMR Texas Inc.; Vice President of FMR.

John D. Crumrine Assistant Treasurer of FMR U.K., FMR, FMR (Far
East) Inc., and FMR Texas Inc.; Vice President and
Treasurer of FMR Corp.

Francis V. Knox Compliance Officer of FMR U.K.; Vice President of
FMR.

Jay Freedman Clerk of FMR U.K., FMR (Far East) Inc., and FMR
Corp.; Assistant Clerk of FMR; Secretary of FMR
Texas Inc.

(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC (FMR FAR EAST)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The directors
and officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR Far
East, FMR, FMR Corp., FMR Texas Inc., and
FMR (U.K.) Inc.; Chairman of the Executive
Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of
the Board and Representative Director of
Fidelity Investments Japan Limited; President
and Trustee of funds advised by FMR.

J. Gary Burkhead President and Director of FMR Far East, FMR
Texas Inc., FMR, and FMR (U.K.) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.

William R. Ebsworth Vice President of FMR Far East; Director of
FIIA.

Bill Wilder Vice President of FMR Far East; President and
Representative Director of Fidelity Investments
Japan Limited.

Stephen P. Jonas Treasurer of FMR Far East, FMR, FMR (U.K.)
Inc., and FMR Texas Inc.; Vice President of
FMR.

John D. Crumrine Assistant Treasurer of FMR Far East, FMR,
FMR (U.K.) Inc., and FMR Texas Inc.; Vice
President and Treasurer of FMR Corp.

Jay Freedman Clerk of FMR Far East, FMR (U.K.) Inc., and
FMR Corp.; Assistant Clerk of FMR; Secretary
of FMR Texas Inc.

Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

Michael Mlinac Director None

Mark Peterson Director None

Neal Litvack President None

Arthur S. Loring Vice President and Clerk Secretary

Caron Ketchum Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Holland Compliance Officer None

* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' custodian: State
Street Bank and Trust Company, 1776 Heritage Drive, North Quincy, MA.
Item 31. Management Services
Not applicable
Item 32. Undertakings
The Registrant on behalf of Destiny I and Destiny II undertakes to deliver
to each person who has received the prospectus or annual or semiannual
financial report for a fund in an electronic format, upon his or her
request and without charge, a paper copy of the prospectus or annual or
semiannual report for the fund.
The Registrant on behalf of Destiny I and Destiny II undertakes, provided
the information required by Item 5A is contained in the annual report,
undertakes to furnish each person to whom a prospectus has been delivered,
upon their request and without charge, a copy of the Registrant's latest
annual report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 62 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and state of Massachusetts, on the 18th day of
November 1996.
FIDELITY DESTINY PORTFOLIOS
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)

<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee November 18, 1996

Edward C. Johnson 3d (Principal Executive Officer)

/s/Kenneth A. Rathgeber *** Treasurer November 18, 1996

Kenneth A. Rathgeber

/s/J. Gary Burkhead Trustee November 18, 1996

J. Gary Burkhead

/s/Ralph F. Cox * Trustee November 18, 1996

Ralph F. Cox

/s/Phyllis Burke Davis ** Trustee November 18, 1996

Phyllis Burke Davis

/s/Richard J. Flynn * Trustee November 18, 1996

Richard J. Flynn

/s/E. Bradley Jones ** Trustee November 18, 1996

E. Bradley Jones

/s/Donald J. Kirk * Trustee November 18, 1996

Donald J. Kirk

/s/Edward H. Malone * Trustee November 18, 1996

Edward H. Malone

/s/Marvin L. Mann * Trustee November 18, 1996

Marvin L. Mann

/s/Gerald C. McDonough * Trustee November 18, 1996

Gerald C. McDonough

/s/Thomas R. Williams * Trustee November 18, 1996

Thomas R. Williams

</TABLE>

(dagger) Signatures affixed by J.Gary Burkhead pursuant to a power of
attorney dated October 17, 1996 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 17, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
*** Signature affixed by John H. Costello pursuant to a power of attorney
dated October 17, 1996 and filed herewith.

POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner, as
the case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series V Fidelity Municipal Trust
Fidelity Advisor Series VI Fidelity New York Municipal Trust
Fidelity Advisor Series VII Fidelity Puritan Trust
Fidelity Advisor Series VIII Fidelity School Street Trust
Fidelity Boston Street Trust Fidelity Securities Fund
Fidelity California Municipal Trust Fidelity Select Portfolios
Fidelity Capital Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Charles Street Trust Fidelity Summer Street Trust
Fidelity Commonwealth Trust Fidelity Trend Fund
Fidelity Congress Street Fund Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Corporate Trust Fund, L.P.
Fidelity Court Street Trust Fidelity Union Street Trust
Fidelity Covington Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Destiny Portfolios Variable Insurance Products Fund
Fidelity Deutsche Mark Performance Variable Insurance Products Fund II
Portfolio, L.P.
Fidelity Devonshire Trust
Fidelity Exchange Fund
Fidelity Financial Trust
Fidelity Fixed-Income Trust
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deems
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorney-in-fact or his substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 17, 1996

Edward C. Johnson 3d

POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individuals serve as Treasurer and principal financial and
accounting officer (collectively, the "Funds"), hereby severally constitute
and appoint John H. Costello and John E. Ferris each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them to sign for me and in my name in the
appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber October 17, 1996

Kenneth A. Rathgeber

POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment company:
Fidelity Destiny Portfolios

plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk

Edward C. Johnson 3d Donald J. Kirk

/s/J. Gary Burkhead

J. Gary Burkhead /s/Marvin L. Mann

Marvin L. Mann

/s/Ralph F. Cox /s/Edward H. Malone

Ralph F. Cox Edward H. Malone

/s/Gerald C. McDonough

/s/Phyllis Burke Davis Gerald C. McDonough

Phyllis Burke Davis

/s/Thomas R. Williams

Thomas R. Williams

/s/Richard J. Flynn

Richard J. Flynn

/s/E. Bradley Jones

E. Bradley Jones

POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment company:
Fidelity Destiny Portfolios

plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individuals serve as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby severally constitute and appoint Arthur
J. Brown, Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas
M. Leahey, Richard M. Phillips and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this seventeenth day of October, 1996.
/s/Edward C. Johnson 3d /s/Donald J. Kirk

Edward C. Johnson 3d Donald J. Kirk

/s/J. Gary Burkhead /s/Gerald C. McDonough

J. Gary Burkhead Gerald C. McDonough

/s/Ralph F. Cox /s/Edward H. Malone

Ralph F. Cox Edward H. Malone

___________________ /s/Marvin L. Mann

Phyllis Burke Davis Marvin L. Mann

/s/Richard J. Flynn /s/Thomas R. Williams

Richard J. Flynn Thomas R. Williams

____________________

E. Bradley Jones

EXHIBIT 8 (B)

APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
State Street Bank and Trust Company and Each of the Investment Companies
Listed on Appendix A
Dated as of May 16, 1996
The following is a list of Additional Custodians, Special Subcustodians
and Foreign Subcustodians under the Custodian Agreement dated as of
February 1, 1996 (the "Custodian Agreement"):
A. Additional Custodians:
Custodian Purpose
Bank of New York Ficash
Fiterm
B. Special Subcustodians:
Subcustodian Purpose
Bank of New York Ficash
C. Foreign Subcustodians:
Country Subcustodian Depository
Argentina Citibank, N.A., Buenos Aires Caja de Valores S.A.
Australia Westpac Banking Corporation, Austraclear Limited
Sydney
Reserve Bank Information and Transfer System (RITS)
Austria GiroCredit Bank Oesterreichische Kontrollbank
Aktiengesellschaft der Sparkassen, AG (Wertpapiersammelbank
Vienna Division)
Bangladesh Standard Chartered Bank, Dhaka None
Belgium Generale Bank, Brussels Caisse Interprofessionnelle de
Depots et de Virements de Titres S.A. (CIK)
Banque Nationale de Belgique
Bostwana Barclays Bank of Bostwana None
Limited, Gaborone
Brazil Citibank, N.A., Sao Paulo Bolsa de Valores de Sao Paulo
(Bovespa)
Banco Central do Brasil, Systema Especial de Liquidacao
e Custodia (SELIC)
Canada Canada Trustco Mortgage The Canadian Depository for
Company, Toronto Securities Limited (CDS)
Chile Citibank, N.A., Santiago None
People's Republic of China The Hongkong and Shanghai Shanghai Securities
Central
Banking Corporation Limited, Clearing and Registration
Shanghai & Shenzhen branches Corporation (SSCRC)
Shenzhen Securities Registrars Co.,
Ltd.(SSRC).
Colombia Cititrust Colombia S.A. None
Sociedad Fiduciaria, Bogota
Czech Republic Ceskoslovenska Obchodni Stredisko cennych papiru (SCP)
Banka, A.S., Prague
Czech National Bank (CNB)
Denmark Den Danske Bank, Copenhagen Vaerdipapericentralen- The Danish
Securities Center (VP)
Ecuador Citibank, N.A., Quito None
Egypt National Bank of Egypt, Cairo None
Finland Merita Bank Limited, Helsinki The Central Share Register of
Finland (CSR)
France Banque Paribas, Paris Societe Interprofessionnelle pour la
Compensation des Valeurs Mobilieres (SICOVAM)
Banque de France (Saturne System)
Germany Dresdner Bank AG, Frankfurt The Deutscher Kasseverein AG

Ghana Barclays Bank of Ghana Limited, None
Accra
Greece National Bank of Greece, S.A., The Central Securities Depository
Athens (Apothtirion Tilton A.E.)
Hong Kong Standard Chartered Bank, The Central Clearing and Settlement
Hong Kong System (CCASS)
Hungary Citibank Budapest Rt., The Central Depository and Clearing
Budapest House (Budapest) Ltd. (KELER Ltd.)
India Deutsche Bank AG, Bombay None
HongKong & Shanghai Banking
Corporation, Ltd., Bombay
Indonesia Standard Chartered Bank None
Jakarta
Ireland Bank of Ireland, Dublin The Gilt Settlement office (GSO)
Israel Bank Hapoalim B.M., Tel Aviv The Clearing House of Tel Aviv
Stock Exchange
Italy Morgan Guaranty Trust Monte Titoli S.p.A.
Company, Milan
Banca d'Italia
Japan The Sumitomo Trust & Banking Japan Securities Depository Center
Co., Ltd., Tokyo (JASDEC)
Bank of Japan (Net System)
Jordan The British Bank of the Middle None
East, Amman
Kenya Barclays Bank of Kenya Limited, None
Nairobi
Malaysia Standard Chartered Bank Malaysia Central Depository Sdn.
Malaysia Berhad, Kuala Lampur bhd. (MCD)
Mauritius The Hongkong and Shanghai None
Banking Corporation Limited,
Port Louis
Mexico Citibank Mexico, S.A. S.D. INDEVAL, S.A. de C.V.
Mexico City (Instituto para el Deposito de Valores)
Banco de Mexico
Morocco Banque Commerciale du Maroc, None
Casablanca
Netherlands Meespierson N.V., Amesterdam Nederlands Centraal Instituut
voor
Giraal Effectenverkeer B.V. (NECIGEF)
New Zealand ANZ Banking Group (New The Reserve Bank of New Zealand,
Zealand) Limited, Wellington Austraclear NZ
Norway Christiania Bank og Kreditkasse, Verdipapirsentralen- The
Norwegian
Oslo Registry of Securities (VPS)
Pakistan Deutsche Bank AG, Karachi None
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Standard Chartered Bank None
Manila
Poland Citibank Poland S.A., Warsaw The National Depository of
Securities .
Portugal Banco Commercial Portugues, Central de Valores Mobiliarios
Lisbon (Central)
Singapore The Development Bank of The Central Depository (Pte)
Singapore Ltd., Singapore Limited (CDP)
Slovak Republic Ceskoslovenska Obchodna Stredisko cennych papierov (SCP)
Banka A.S., Bratislava
National Bank of Slovakia (NBS)
South Africa Standard Bank of South Africa None
Limited, Johannesburg
South Korea SEOULBANK, Seoul Korea Securities Depositories (KSD)
Spain Banco Santander, S.A., Servicio de Compensacion y Madrid
Liquidacion de Valores (SCLV)
Banco de Espana (Anotaciones en Cuenta)
Sri Lanka The Hongkong and Shanghai Central Depository System (Pvt)
Banking Corporation, Colombo Limited
Swaziland Barclays Bank of Swaziland None
limited, Mbabane
Sweden Skandinaviska Enskilda Banken Vardepapperscentralen VPC AB-
Stokholm The Swedish Central Securities
Depository
Switzerland Union Bank of Switzerland, Schweizerische Effekten-Giro AG
Zurich (SEGA)
Taiwan - R.O.C. Central Trust of China, The Taiwan Securities Central
Taipei Depository Company, Ltd. (TSCD)
Thailand Standard Chartered Bank, Thailand Securities Depository
Bangkok Company Limited (TSD)
Transnational Cedel Bank Societe anonyme, Luxembourg
The Euroclear System, Belgium
Turkey Citibank, N.A., Istanbul Istanbul Stock Exchange Settlement
and Custody Co., Inc. (I.M.K.B.
Takas ve Saklama A.S.)
United Kingdom State Street Bank and Trust The Central Gilts Office (CGO)
Company, London
The Central Moneymarkets Office State Street London Limited,
(CMO)
London
Uruguay Citibank, N.A., Montevideo None
Venezuela Citibank, N.A., Caracas None
Zambia Barclays Bank of Zambia None
Limited, Lusaka
Zimbabwe Barclays Bank of Zimbabwe None
Limited, Harare
Each of the Investment Companies Listed on
Appendix A to the Custodian Agreement, on
Behalf of Each of Their Respective Portfolios
By:/s/Kenneth A. Rathgeber
Name: Kenneth A. Rathgeber
Title: Treasurer

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 62
to the Registration Statement on Form N-1A of Fidelity Destiny Portfolios:
Destiny I and Destiny II of our report dated November 12, 1996 on the
financial statements and financial highlights included in the September 30,
1996 Annual Report to Shareholders of Fidelity Destiny Portfolios: Destiny
I and Destiny II.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 18, 1996

TO BE USED IN A POST-EFFECTIVE AMENDMENT WHERE THERE ARE TWO OR MORE
PROSPECTUSES COVERING FUNDS IN THE SAME TRUST (E.G., DEVONSHIRE TRUST).

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectuses
and Statements of Additional Information in Post-Effective Amendment No. [
] to the Registration Statement on Form N-1A of [TRUST NAME: FUND NAMES] of
our reports dated [DATE OF OPINION] on the financial statements and
financial highlights included in the [FISCAL YEAR END] Annual Reports to
Shareholders of [FUND NAMES].
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the Statements
of Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
[DATE HANDING OFF 485(b) FOR FILING]

<ARTICLE> 6
<CIK> 0000035331
<NAME> Fidelity Destiny Portfolios
<SERIES>
<NUMBER> 11
<NAME> Fidelity Destiny I
<MULTIPLIER> 1,000

<S>
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<PERIOD-TYPE> year

<FISCAL-YEAR-END> sep-30-1996

<PERIOD-END> sep-30-1996

<INVESTMENTS-AT-COST> 3,396,742

<INVESTMENTS-AT-VALUE> 4,553,787

<RECEIVABLES> 17,360

<ASSETS-OTHER> 1

<OTHER-ITEMS-ASSETS> 0

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<OTHER-ITEMS-LIABILITIES> 4,294

<TOTAL-LIABILITIES> 5,666

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<PAID-IN-CAPITAL-COMMON> 2,949,697

<SHARES-COMMON-STOCK> 223,722

<SHARES-COMMON-PRIOR> 215,781

<ACCUMULATED-NII-CURRENT> 75,122

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> 383,657

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 1,157,006

<NET-ASSETS> 4,565,482

<DIVIDEND-INCOME> 74,832

<INTEREST-INCOME> 56,953

<OTHER-INCOME> 0

<EXPENSES-NET> 28,036

<NET-INVESTMENT-INCOME> 103,749

<REALIZED-GAINS-CURRENT> 423,289

<APPREC-INCREASE-CURRENT> 112,028

<NET-CHANGE-FROM-OPS> 639,066

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 92,599

<DISTRIBUTIONS-OF-GAINS> 174,423

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 7,328

<NUMBER-OF-SHARES-REDEEMED> 13,090

<SHARES-REINVESTED> 13,703

<NET-CHANGE-IN-ASSETS> 512,092

<ACCUMULATED-NII-PRIOR> 67,129

<ACCUMULATED-GAINS-PRIOR> 137,499

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<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 28,216

<AVERAGE-NET-ASSETS> 4,319,111

<PER-SHARE-NAV-BEGIN> 18.780

<PER-SHARE-NII> .450

<PER-SHARE-GAIN-APPREC> 2.420

<PER-SHARE-DIVIDEND> .430

<PER-SHARE-DISTRIBUTIONS> .810

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 20.410

<EXPENSE-RATIO> 65

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000035331
<NAME> Fidelity Destiny Portfolios
<SERIES>
<NUMBER> 21
<NAME> Fidelity Destiny II
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> year

<FISCAL-YEAR-END> sep-30-1996

<PERIOD-END> sep-30-1996

<INVESTMENTS-AT-COST> 2,000,082

<INVESTMENTS-AT-VALUE> 2,532,380

<RECEIVABLES> 9,559

<ASSETS-OTHER> 1

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 2,541,940

<PAYABLE-FOR-SECURITIES> 1,155

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 2,378

<TOTAL-LIABILITIES> 3,533

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 1,801,880

<SHARES-COMMON-STOCK> 218,597

<SHARES-COMMON-PRIOR> 192,153

<ACCUMULATED-NII-CURRENT> 41,534

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> 162,698

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 532,295

<NET-ASSETS> 2,538,407

<DIVIDEND-INCOME> 38,611

<INTEREST-INCOME> 33,723

<OTHER-INCOME> 0

<EXPENSES-NET> 17,807

<NET-INVESTMENT-INCOME> 54,527

<REALIZED-GAINS-CURRENT> 177,718

<APPREC-INCREASE-CURRENT> 95,101

<NET-CHANGE-FROM-OPS> 327,346

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<DISTRIBUTIONS-OF-INCOME> 43,813

<DISTRIBUTIONS-OF-GAINS> 61,463

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 26,674

<NUMBER-OF-SHARES-REDEEMED> 10,110

<SHARES-REINVESTED> 9,880

<NET-CHANGE-IN-ASSETS> 506,645

<ACCUMULATED-NII-PRIOR> 32,077

<ACCUMULATED-GAINS-PRIOR> 47,316

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 16,685

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 17,907

<AVERAGE-NET-ASSETS> 2,293,144

<PER-SHARE-NAV-BEGIN> 10.570

<PER-SHARE-NII> .240

<PER-SHARE-GAIN-APPREC> 1.340

<PER-SHARE-DIVIDEND> .220

<PER-SHARE-DISTRIBUTIONS> .320

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 11.610

<EXPENSE-RATIO> 78

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0