FIDELITY
DESTINY PORTFOLIOS:
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 a fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated November
19, 1997. 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), 82 Devonshire Street, Boston, MA 02109
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
In Alaska or Overseas (call collect) 1-617-328-5000
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
DES-PRO-1197- 01
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.
Destiny I (fund number 006)
Destiny II (fund number 306)
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
DATED DATED NOVEMBER 19, 1997
REVISED JUNE 1, 1998 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE
STREET, BOSTON, MA 02109
CONTENTS
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PROSPECTUS
KEY FACTS 2 WHO MAY WANT TO INVEST
2 EXPENSES Each fund's yearly operating expenses.
4 FINANCIAL HIGHLIGHTS A summary of each fund's financial data.
6 PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL 9 CHARTER How each fund is organized.
9 INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach to
investing.
11 BREAKDOWN OF EXPENSES How operating costs are calculated and
what they include.
YOUR ACCOUNT 12 HOW TO BUY SHARES
12 HOW TO SELL SHARES Taking money out and closing your account.
13 INVESTOR SERVICES Services to help you manage your account.
SHAREHOLDER AND ACCOUNT POLICIES 13 DIVIDENDS, CAPITAL GAINS, AND TAXES
14 TRANSACTION DETAILS Share price calculations and the timing of
purchases and redemptions.
14 EXCHANGE RESTRICTIONS
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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.
The value of each fund's investments varies from day to day, generally
reflecting changes in market conditions and other company, political,
and economic news. In the short-term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks
have shown greater growth potential than other types of securities.
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 Destiny II
I
Sales charge on purchases None None
and reinvested distributions
Deferred sales charge on None None
redemptions
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 figures are based on historical expenses of each fund
and are calculated as a percentage of average net assets of each fund.
A portion of the brokerage commissions that a fund pays is used to
reduce that fund's expenses. In addition, each fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total fund operating expenses presented in the table would have been
0.38% and 0.53% for Destiny I and Destiny II, respectively.
Destiny I Destiny II
Management fee 0.36% 0.50%
12b-1 fee (Distribution Fee) None None
Other expenses 0.03% 0.04%
TOTAL OPERATING EXPENSES 0.39% 0.54%
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in a fund, assuming a 5% annual return
and full redemption at the end of each time period. Total expenses
shown below include any shareholder transaction expenses and a fund's
annual operating expenses.
1 Year 3 Years 5 Years 10 Years
Destiny I $ 4 $ 13 $ 22 $ 49
Destiny II $ 6 $ 17 $ 30 $ 68
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES 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 for Destiny I and Destiny
II have been audited by Coopers & Lybrand L.L.P., independent
accountants. The funds' financial highlights, financial statements,
and report of the auditor are included in the funds' Annual Report,
and are incorporated by reference into (are legally a part of) the
funds' SAI. Contact FDC or your investment professional for a free
copy of the Annual Report or the SAI.
DESTINY I
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Selected Per-Share Data and Ratios
Years ended September
30 1997 1996 1995 1994E 1993H 1993I 1992I 1991I 1990I 1989I 1988I
Net asset value,
beginning $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03 $ 12.44 $ 15.93
of period
Income from Investment
Operations
Net investment
income .49C .45 .41 .30 .04 .26 .31 .33 .46D .30 .24
Net realized and
unrealized 6.36 2.42 3.54 1.69 .75 3.16 2.55 1.25 1.18 1.81 (.35)
gain (loss)
Total from investment 6.85 2.87 3.95 1.99 .79 3.42 2.86 1.58 1.64 2.11 (.11)
operations
Less Distributions
From net investment
income (.45) (.43) (.34) (.11) (.14) (.30) (.49) (.10) (.38) (.26) (.39)
From net realized
gain (1.73) (.81) (2.53) (1.04) (1.01) (2.44) (1.06) (.49) (1.05) (.26) (2.99)
Total distributions (2.18) (1.24) (2.87) (1.15) (1.15) (2.74) (1.55) (.59) (1.43) (.52) (3.38)
Net asset value, end of
period $ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03 $ 12.44
Total returnB 36.29%J 16.04% 27.49% 12.30% 4.77% 23.90% 20.18% 11.93% 12.17% 17.90% (1.45)%
Net assets, end of
period $ 5,961 $ 4,565 $ 4,053 $ 3,273 $ 2,973 $ 2,869 $ 2,373 $ 2,023 $ 1,832 $ 1,662 $ 1,440
(In millions)
Ratio of expenses to .39% .65% .68% .70% .65%A .66% .61% .50% .53% .60% .60%
average net assets
Ratio of expenses to .38%F .65% .68% .70% .65%A .66% .61% .50% .53% .60% .60%
average net assets after
expense reductions
Ratio of net investment 2.20% 2.40% 2.35% 1.69% 1.11%A 1.83% 2.00% 2.45% 3.37% 2.35% 2.10%
income to average net assets
Portfolio turnover rate 32% 42% 55% 77% 82%A 75% 75% 84% 75% 72% 80%
Average commissions
rateG $ .0478 $ .0175
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPARATE SALES
CHARGES AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS OF $.09 PER
SHARE.
E 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.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
H THREE MONTHS ENDED SEPTEMBER 30, 1993
I YEARS ENDED JUNE 30
J THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
DESTINY II
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NOTE: PER SHARE DATA HAVE BEEN ADJUSTED FOR A 3-FOR-1 SHARE SPLIT PAID JUNE 21, 1996.
Selected Per-Share Data and Ratios
Years ended September
30 1997 1996 1995 1994E 1993H 1993I 1992I 1991I 1990I 1989I 1988I
Net asset value,
beginning $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88 $ 6.08 $ 6.99
of period
Income from Investment
Operations
Net investment
income .27C .24 .22 .14 .01 .09 .11 .10 .19D .08 .04
Net realized and
unrealized 3.52 1.34 1.99 .96 .41 1.61 1.36 .86 .76 .91 (.06)
gain (loss)
Total from
investment 3.79 1.58 2.21 1.10 .42 1.70 1.47 .96 .95 .99 (.02)
operations
Less Distributions
From net investment
income (.25) (.22) (.17) (.04) (.05) (.12) (.11) (.12) (.12) (.06) (.03)
From net realized
gain (.75) (.32) (.99) (.43) (.30) (.99) (.96) (.05) (.67) (.13) (.86)
Total distributions (1.00) (.54) (1.16) (.47) (.35) (1.11) (1.07) (.17) (.79) (.19) (.89)
Net asset value,
end of period $ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88 $ 6.08
Total returnB 34.72%J 15.43% 26.98% 12.67% 4.93% 23.28% 20.61% 14.35% 14.42% 16.76% (.23)%
Net assets, end of
period $ 3,609 $ 2,538 $ 2,032 $ 1,437 $ 1,143 $ 1,061 $ 479 $ 326 $ 221 $ 143 $ 78
(In millions)
Ratio of expenses to .54% .78% .80% .80% .84%A .84% .88% .84% .87% .97% 1.12%
average net assets
Ratio of expenses to
average .53%F .78% .80% .80% .84%A .84% .88% .84% .87% .97% 1.12%
net assets after expense
reductions
Ratio of net investment 2.11% 2.38% 2.33% 1.56% .69%A 1.41% 1.60% 1.70% 3.07% 1.53% 1.07%
income to average net assets
Portfolio turnover rate 35% 37% 52% 72% 80%A 81% 113% 129% 112% 128% 148%
Average commissions
rateG $ .0482 $ .0182
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPARATE SALES
CHARGES AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS OF $.07 PER
SHARE.
E 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.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
H THREE MONTHS ENDED SEPTEMBER 30, 1993
I YEARS ENDED JUNE 30
J THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
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 for each fund
compared to different measures, including a competitive funds average.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods Past 1 Past 5 Past 10 Life of
ended year years years fund
September 30,
1997
Destiny I 36.29% 23.50% 16.80% 19.02%*
Destiny II 34.72% 23.22% 17.21% 22.91%**
CUMULATIVE TOTAL RETURNS
Fiscal periods Past 1 Past 5 Past 10 Life of
ended year years years fund
September 30,
1997
Destiny I 36.29% 187.25% 372.71% 11,390.24%*
Destiny II 34.72% 184.11% 389.22% 1,031.41%**
* FROM JULY 10, 1970 (COMMENCEMENT OF OPERATIONS).
** FROM 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, and fifteen
years or Life of Plan ended September 30, 1997 for a $50/month, 15
year Plan. 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 $600 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
Fiscal periods Past 1 Past 5 Past 10 Past 15
ended year years years years/
September 30, Life of Plan
1997
Destiny Plans I -34.85% 19.04% 15.27% 20.62%A
Destiny Plans II -35.60% 18.78% 15.67% 21.62%B
A FROM OCTOBER 1, 1982 TO SEPTEMBER 30, 1997.
B FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30,
1997.
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.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average for
Destiny I and Destiny II. As of September 30, 1997, the average
reflected the performance of 784 mutual funds with similar investment
objectives. This average, published by Lipper Analytical Services,
Inc., excludes the effect of sales loads.
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 CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
Each 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 the
appropriate number listed on the front cover, or your investment
professional.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
YEAR-BY-YEAR TOTAL RETURNS
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Calendar years 1990 1991 1992 1993 1994 1995 1996
DESTINY I -3.15% 38.92% 15.15% 26.42% 4.43% 36.95% 18.55%
Standard & Poor's 500 Index -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Lipper Growth Funds Average -4.72% 37.08% 7.86% 10.61% -2.17% 30.79% 19.24%
Consumer Price Index 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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: -3.15
ROW: 5, COL: 1, VALUE: 38.92
ROW: 6, COL: 1, VALUE: 15.15
ROW: 7, COL: 1, VALUE: 26.42
ROW: 8, COL: 1, VALUE: 4.43
ROW: 9, COL: 1, VALUE: 36.95
ROW: 10, COL: 1, VALUE: 18.55
(LARGE SOLID BOX) DESTINY I
YEAR-BY-YEAR TOTAL RETURNS
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Calendar years 1990 1991 1992 1993 1994 1995 1996
DESTINY II -2.52% 41.42% 15.48% 26.81% 4.48% 35.96% 17.86%
Standard & Poor's 500 Index -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Lipper Growth Funds Average -4.72% 37.08% 7.86% 10.61% -2.17% 30.79% 19.24%
Consumer Price Index 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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: -2.52
Row: 5, Col: 1, Value: 41.42
Row: 6, Col: 1, Value: 15.48
Row: 7, Col: 1, Value: 26.81
Row: 8, Col: 1, Value: 4.48
Row: 9, Col: 1, Value: 35.96
Row: 10, Col: 1, Value: 17.86
(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 periodically 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
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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, 1997, FMR advised funds having approximately 33
million shareholder accounts with a total value of more than $521
billion.
George A. Vanderheiden is Vice President and manager of Destiny I,
which he has managed since 1980. Previously, he was Vice President and
manager of Destiny II between 1985 and 1998. He also manages other
Fidelity funds. Mr. Vanderheiden is a member of the Board of Directors
for FMR Corp. He joined Fidelity in 1971.
Charles Mangum will provide assistance in managing Destiny I from
time to time. He also manages another Fidelity fund. Since joining
Fidelity in 1990, Mr. Mangum has worked as an analyst and manager.
Beth Terrana is Vice President and manager of Destiny II, which she
has managed since June 1998. She also manages other Fidelity funds.
Since joining Fidelity in 1983, Ms. Terrana has worked as an analyst,
portfolio assistant, and manager.
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 Company, Inc. (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.
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 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
the appropriate number listed on the front cover, 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 generally pays the investor
a fixed, variable, or floating 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 sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
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 or regional
economic difficulty.
The tables on the following pages 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 September
1997, 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.
DESTINY I
FISCAL YEAR ENDED SEPTEMBER 1997 MOODY'S
DEBT HOLDINGS, BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
RATING AVERAGE RATING AVERAGE
OF TOTAL OF TOTAL
INVESTMENTS INVESTMENTS
INVESTMENT GRADE
HIGHEST QUALITY AAA 14.2% AAA 14.2%
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 0.0% C 0.0%
IN DEFAULT, IN ARREARS -- D 0.0%
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P
AMOUNTED TO 0.00% OF THE FUND'S INVESTMENTS. THIS PERCENTAGE MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATIONS, AS WELL
AS UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO
0.00% OF THE FUND'S INVESTMENTS.
DESTINY II
FISCAL YEAR ENDED SEPTEMBER 1997 MOODY'S
DEBT HOLDINGS, BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
RATING AVERAGE RATING AVERAGE
OF TOTAL OF TOTAL
INVESTMENTS INVESTMENTS
INVESTMENT GRADE
HIGHEST QUALITY AAA 14.4% AAA 14.4%
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 0.0% C 0.0%
IN DEFAULT, IN ARREARS -- D 0.0%
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P AMOUNTED
TO 0.00% OF THE FUND'S INVESTMENTS. THIS PERCENTAGE MAY INCLUDE
SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATIONS, AS WELL AS UNRATED
SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO 0.00% OF THE
FUND'S INVESTMENTS.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's
debt quality policy if it is rated at or above the stated level by
Moody's Investors Service (Moody's) or rated in the equivalent
categories by Standard & Poor's (S&P), or is unrated but judged to be
of equivalent quality by FMR. Each fund currently intends to limit its
investment in lower than Baa-quality debt securities to 10% of its
assets.
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 debt 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: A fund may not purchase a security if, as a result, more
than 10% of its 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
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 issuer. This limitation does not
apply to U.S. Government securities.
A fund may not invest more than 25% of its total assets in any one
industry. This limitation does 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 issuer and may not purchase more than 10% of the
outstanding voting securities of a single issuer. These limitations do
not apply to U.S. Government securities.
A fund may not invest more than 25% of its total assets in any one
industry. This limitation does 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 page .
FMR may, from time to time, agree to reimburse each 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 1997, the group fee rate was 0.2950%. The individual
fund fee rate is 0.17% for Destiny I and 0.30% for Destiny II.
The basic fee rate for the fiscal year ended September 1997 was
0.4650% for Destiny I and 0.5950% for Destiny II.
The performance adjustment rate is calculated monthly by comparing
each fund's performance to that of the S&P 500 over the performance
period.
The performance period is 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 +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 over the performance
period.
The total management fee rates for Destiny I and Destiny II for the
fiscal year ended September 1997 were 0.36% and 0.50%, respectively.
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 September 1997, FMR, on behalf of Destiny I
and Destiny II, paid FMR U.K. and FMR Far East fees equal to 0.01% and
0.01%, respectively, 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 September 1997,
Destiny I and Destiny II paid FSC fees equal to 0.00% and 0.01%,
respectively, of its average net assets for transfer agency and
related services, and Destiny I and Destiny II paid FSC fees equal to
0.02% and 0.03%, respectively, of its average net assets for pricing
and bookkeeping services.These amounts are before expense reductions,
if any.
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 that fund's custodian or transfer agent fees.
The portfolio turnover rates for Destiny I and Destiny II for the
fiscal year ended September 1997 were 32% and 35%, respectively. These
rates vary from year to year.
YOUR ACCOUNT
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE, of each fund is the fund's net asset value
per share (NAV).
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 Plans' offering terms,
including the Plans' Creation and Sales Charges, are reflected in the
Prospectus of Fidelity Systematic Investment Plans: Destiny Plans I
and Destiny Plans II.
Shares will be purchased at the next NAV calculated after an order is
received and accepted. Each fund's NAV is normally calculated each
business day 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 SHAREHOLDERS WHO HAVE
COMPLETED OR TERMINATED A PLAN AND HOLD SHARES OF A FUND DIRECTLY.
Planholders should consult the section entitled "Cancellation and
Refund Rights" of their Plan's 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.
THE PRICE TO SELL ONE SHARE of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received and accepted. Each fund's NAV is normally calculated each
business day 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 the appropriate
number listed on the front cover for specific instructions. The funds
currently do not issue share certificates.
For more information, see "Systematic Withdrawal Program" 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 770002
Cincinnati, OH 45277-0086
Unless otherwise instructed, Fidelity will send a check to the record
address.
<TABLE>
<CAPTION>
<S> <C> <C>
TYPE OF REGISTRATION* SPECIAL REQUIREMENTS
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 the appropriate number listed on
the front cover.
Mail or in Person
(mail_graphic)
(hand_graphic) Individual, Joint Tenants, Sole (small solid bullet) The letter of instruction must be signed
Proprietorship, Custodial (Uniform by all person(s) required to sign for the
Gifts/Transfers to Minors Act), General account exactly as it is registered,
Partners accompanied by signature guarantee(s).
Corporations, Associations (small solid bullet) The letter of instruction and a corporate
resolution must be signed by all
person(s) required to sign for the
account, accompanied by signature
Trusts 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 THE APPROPRIATE NUMBER LISTED ON THE FRONT COVER 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 entitled
"Rights and Privileges of Planholders" in their Plan's Prospectus for
a discussion of distribution options and other pertinent information.
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 Fidelity 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 at the appropriate number listed on the front cover,
or your investment professional 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 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 the
purchase of Plan shares.
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 DISTRIBUTION OPTIONS 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 entitled
"Rights and Privileges of Planholders" in their Plan's 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 Plan's 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 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
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing
the tax characterization of 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, Fidelity 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. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, 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. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. 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. In addition, 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 may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
Planholders who have redeemed shares under "Cancellation and Refund
Rights" (discussed in the Plans' Prospectus), 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, refer to the section entitled "Rights and Privileges of
Planholders" in your Plan's Prospectus, or contact your investment
professional.
WHEN YOU SIGN YOUR PLAN'S 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 OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call the appropriate number listed on the front
cover for instructions. Additional documentation may be required from
corporations, associations, and certain fiduciaries.
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.
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
THE EXCHANGE PRIVILEGE IS AVAILABLE ONLY TO THOSE SHAREHOLDERS WHO
HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES OF A FUND
DIRECTLY. As a shareholder, you have the privilege of exchanging
shares of a fund for shares of other Fidelity funds, including the
Fidelity Advisor Funds. However, 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) If you exchange into a fund with a sales charge,
you pay the difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales
charge, you would pay an additional 1% sales charge.
(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 a 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) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(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
fees of up to 1.00% on purchases, administrative fees of up to $7.50,
and trading 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.
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