FIDELITY
DESTINY
PORTFOLIOS:
DESTINY I
DESTINY II
Semiannual Report
Annual Report
March 31, 1998
September 30, 1995
Printed on recycled paper
6i-53828
FIDELITY
DESTINY
PORTFOLIOS:
DESTINY I
DESTINY II
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
Abigail Johnson, VICE PRESIDENT
George A. Vanderheiden, VICE PRESIDENT
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
Boston, MA
DES-SANN-0598
702317
6i
* INDEPENDENT TRUSTEES
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
FUND TALK 3 The manager's review of the funds' performance,
strategy and outlook.
PERFORMANCE 6 How the funds have done over time.
INVESTMENT CHANGES 8 A summary of major shifts in the funds' investments
over the past six months.
DESTINY I
INVESTMENTS 9 A complete list of the fund's investments
with their market values.
FINANCIAL STATEMENTS 14 Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.
DESTINY II
INVESTMENTS 18 A complete list of the fund's investments
with their market values.
FINANCIAL STATEMENTS 23 Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights.
NOTES 27 Notes to the financial statements.
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS
REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN
THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK OR 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.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
The U.S. stock market showed its resiliency during
the six months that ended March 31, 1998. Despite
economic difficulties in Southeast Asia - and the
resulting concern that U.S. corporate earnings would
slow - the stock market continued to perform well.
The Standard & Poor's 500 Index - a measure of the
U.S. stock market - returned 17.22% during this
time. In late October, after several small Southeast
Asian countries devalued their currencies, a
full-fledged economic crisis enveloped the region.
These troubles caused ripple effects throughout the
world, particularly in the U.S., where the Dow Jones
Industrial Average plummeted 550-plus points in one
trading session. Many U.S. corporations with
business exposure to Southeast Asia announced
earnings disappointments. Investors showed their
concern by embarking on a "flight to quality," seeking
shelter in stocks of companies with minimal
international exposure. Despite this turbulence,
however, the continued strength of the U.S. economy
seemed to buoy the stock market as low interest
rates, low inflation and moderate growth combined to
make for a favorable economic backdrop. After
digesting the events that took place in Southeast
Asia, investors regained their attraction to stocks.
Through the first three months of 1998, cash inflows
into stock mutual funds were very strong and the Dow
itself was approaching the 9000-point barrier.
AN INTERVIEW WITH
GEORGE A. VANDERHEIDEN,
PORTFOLIO MANAGER
OF FIDELITY DESTINY
PORTFOLIOS
Q. HOW DID THE FUNDS PERFORM, GEORGE?
A. For the six-month period that ended March 31, 1998, Destiny I and
II returned 15.35% and 15.44%, respectively. The growth funds average
returned 11.55% in that time, according to Lipper Analytical Services,
while the Standard & Poor's 500 Index returned 17.22%. For the 12
months that ended March 31, 1998, Destiny I and II returned 43.86% and
42.44%, respectively. The growth funds average and S&P 500 returned
42.90% and 48.00%, respectively, over the same time.
Q. WHAT MARKET SECTORS AND INDIVIDUAL STOCKS HELPED THE FUNDS'
PERFORMANCE DURING THE PERIOD?
A. Stocks in the finance, utilities and retail and wholesale sectors
were the biggest contributors to performance relative to the S&P 500.
A favorable interest-rate environment and an increase in home
financing activity fueled the strong performance of positions such as
Fannie Mae, Freddie Mac and Fleet Financial Group. Fannie Mae and
Freddie Mac have a history of consistent earnings growth and dominant
share in their markets - attributes that were particularly appealing
to investors amidst the flight to quality after Asian financial
turmoil roiled U.S. markets beginning last October. The Destiny funds
also benefited from an overweighted position in the retail sector -
relative to the S&P 500 - and good performance from retail stocks.
During the period, several of the funds' retail sector holdings - such
as Home Depot - displayed continued strength as investors favored
stocks that were positioned to perform well in a slow growth, low
inflation environment.
Q. WHAT FACTORS HAVE CONTRIBUTED TO THE RECENT STRONG PERFORMANCE OF
THE STOCK MARKET?
A. The past several months have been a period of seeming
contradictions. Overall corporate earnings decreased, warnings of
future profit shortfalls increased and interest rates inched upwards -
yet the market had its second-best first quarter since 1987. Market
sentiment has turned more favorable since the start of the year and
the first quarter is typically a period of strong retirement
investing, both of which helped fuel the market's rise. However, I
believe the market's recent strong performance was primarily driven by
liquidity - investment dollars that were pulled out of Asia in the
wake of that region's financial debacle that began earlier in the
period were reinvested in U.S. markets. In 1997, foreigners invested
$66 billion in the U.S. stock market. This staggering figure is more
than the foreign investment in each of the prior five years combined.
All of the bullish sentiment in the face of declining corporate
earnings growth suggests to me that the market might be due for a
pause in its steep upward trajectory of the past few years. Therefore,
the funds' stock selection is focused on those companies with modest
earnings expectations that are best positioned to hold their valuation
in an environment of flat-to-declining corporate earnings growth.
Q. DID YOU CHANGE THE FUNDS' ALLOCATION BETWEEN STOCKS AND BONDS?
A. I reduced the funds' allocation to bonds and cash equivalents
slightly during the period. Bonds ended the period at 10% in both
funds, while cash stood at about 3% in Destiny I and around 4% in
Destiny II. However, I continue to view bonds as attractively priced
financial assets. I originally purchased bonds as a hedge against
slowing corporate earnings growth. Although the deceleration in
earnings growth has taken longer than expected, deflation remains a
potential shock to the economy that could disrupt the stock market.
Q. SOUTHEAST ASIAN MARKETS EXPERIENCED HEAVY DECLINES DURING THE
PERIOD. DID YOU MAKE ANY ADJUSTMENTS TO THE FUNDS AS A RESULT?
A. In many ways, the U.S. consumer has been the beneficiary of the
faltering Asian economies. Interest rates, inflation and oil prices
have all declined due to reduced demand from Asia. This has created a
favorable environment for consumer spending because prices for many
consumer goods - as well as home mortgage interest rates - have either
declined or risen only a small amount. This benign environment has
helped spur sales in the retail, apparel and housing industries.
Consequently, I increased positions in retail companies such as Home
Depot, Lowes, Circuit City and Wal-Mart Stores. On the other hand, the
economic weakness in Asia has hurt the earnings and pricing power of
many technology companies, including several of the fund's holdings.
The reduction in earnings at many companies that had a large reliance
on Asia has caused a reduction in capital spending, which in turn has
decreased technology spending plans. Accordingly, orders have not yet
increased to prior levels at many semiconductor and semiconductor
capital equipment manufacturers since they declined as a result of the
Asian financial crisis. Therefore, I reduced the funds' technology
stakes during the period. I also took advantage of indiscriminate
selling in the wake of the sell-off caused by economic problems in
Asia to add a position in Telebras, the largest telephone company in
Brazil. Telebras is essentially the AT&T of Brazil, and had been
pushed down to a bargain-priced low multiple of cash flow.
Q. WHAT IMPLICATIONS DO THE FALTERING SOUTHEAST ASIAN ECONOMIES HAVE
FOR THE U.S. STOCK MARKET AND FOR THE FUNDS?
A. After a disastrous few months at the end of 1997, many Asian
markets rebounded during the first three months of 1998. However, I
believe the short-lived rally in Asia may be coming to an end.
Although the immediate concerns faced by U.S. investors may have
diminished, the ongoing economic problems in Southeast Asia still pose
formidable investment risks. Japan has slipped into another recession
and the situation in Asia - where many of the region's countries still
remained mired in an economic malaise - had worsened. The
deterioration of these Asian economies has resulted in reduced demand
for U.S. capital goods such as industrial machinery and semiconductor
capital equipment. The weakness in Asia also has reduced pricing power
in many industries. On the positive side, this has kept inflation
dormant by slowing worldwide economic growth. However, lower priced
Asian goods are also putting pricing pressure on U.S. manufacturers of
autos, steel, and consumer goods.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
GEORGE VANDERHEIDEN INTRODUCES BETH TERRANA
AS THE NEW MANAGER OF DESTINY II:
"On June 1, 1998, Beth Terrana will become the
manager of the Destiny II Fund. In consultation
with Fidelity's management team, we decided to
make this change to reduce my workload and
allow me to focus on a core group of funds for
the long term. Beth is one of the most talented
and experienced fund managers at Fidelity. In her
12-year tenure managing money, she has
compiled an outstanding performance record.
Beth's investment approach is similar to mine in
that she emphasizes fundamental, bottom-up
research and frequent company contact. Her style
usually results in a higher mix of growth stocks than
I typically own. Her eclectic, company-specific
approach leads her to invest in both growth and
value stocks. Beth has excelled at identifying
companies that are in the midst of change and is
adept at assessing whether or not their evolving
prospects are accurately reflected in their stock
prices. Her preferred investments include
turnarounds or restructurings and undervalued
growth stocks. The former category includes
companies that are undergoing a strategic
restructuring to enhance their growth prospects.
The latter category includes companies whose
growth prospects are misperceived by the market.
I will continue to work closely with Beth and the
Destiny II Fund in my new position as group
leader of the Destiny Funds. I wish to thank all the
Destiny II shareholders for their support over the
past 12 years. I feel confident knowing that the
Destiny II shareholders will be in excellent hands."
FUND FACTS
GOAL: seeks capital growth
START DATE: Destiny I: July 10, 1970; Destiny II:
December 30, 1985
SIZE: as of March 31, 1998, Destiny I: more than
$6.7 billion; Destiny II: more than $4.2 billion
MANAGER: George Vanderheiden, Destiny I since
1980, Destiny II since 1985; joined Fidelity in 1971
(checkmark)
FIDELITY DESTINY PORTFOLIOS: DESTINY I
PERFORMANCE: THE BOTTOM LINE
$10,000 OVER 10 YEARS
Destiny I S&P 500
00006 SP001
1988/03/31 10000.00 10000.00
1988/04/30 10221.24 10111.00
1988/05/31 10265.49 10198.97
1988/06/30 11008.85 10667.10
1988/07/31 10902.65 10626.56
1988/08/31 10435.87 10265.26
1988/09/30 10845.30 10702.56
1988/10/31 10990.87 11000.09
1988/11/30 10736.12 10842.79
1988/12/31 11027.72 11032.54
1989/01/31 11962.12 11840.12
1989/02/28 11693.83 11545.30
1989/03/31 11962.12 11814.31
1989/04/30 12507.95 12427.47
1989/05/31 13275.82 12930.78
1989/06/30 12979.78 12857.08
1989/07/31 13849.41 14018.07
1989/08/31 14224.34 14292.83
1989/09/30 14340.22 14234.22
1989/10/31 13857.38 13903.99
1989/11/30 13924.98 14187.63
1989/12/31 13844.32 14528.14
1990/01/31 13016.11 13553.30
1990/02/28 13292.18 13728.13
1990/03/31 13578.47 14091.93
1990/04/30 13138.81 13739.63
1990/05/31 14590.72 15079.25
1990/06/30 14560.05 14976.71
1990/07/31 14151.06 14928.78
1990/08/31 12701.95 13579.22
1990/09/30 11845.88 12917.91
1990/10/31 11760.27 12862.36
1990/11/30 12766.16 13693.27
1990/12/31 13408.21 14075.32
1991/01/31 14852.83 14689.00
1991/02/28 15880.11 15739.26
1991/03/31 16254.65 16120.15
1991/04/30 16457.96 16158.84
1991/05/31 17442.44 16856.90
1991/06/30 16297.45 16084.86
1991/07/31 17378.24 16834.41
1991/08/31 17967.83 17233.39
1991/09/30 17664.81 16945.59
1991/10/31 17586.25 17172.66
1991/11/30 16508.86 16480.60
1991/12/31 18626.82 18365.98
1992/01/31 18828.12 18024.38
1992/02/29 19514.94 18258.69
1992/03/31 19076.80 17902.65
1992/04/30 19763.61 18428.99
1992/05/31 19929.39 18519.29
1992/06/30 19585.99 18243.35
1992/07/31 20379.37 18989.50
1992/08/31 19839.07 18600.22
1992/09/30 20038.93 18819.70
1992/10/31 19919.02 18885.57
1992/11/30 20878.33 19529.57
1992/12/31 21449.21 19769.78
1993/01/31 22111.57 19935.85
1993/02/28 22182.03 20206.98
1993/03/31 23281.27 20633.34
1993/04/30 23422.20 20134.02
1993/05/31 24084.56 20673.61
1993/06/30 24267.77 20733.56
1993/07/31 24577.81 20650.63
1993/08/31 25424.52 21433.29
1993/09/30 25424.52 21268.25
1993/10/31 26359.47 21708.50
1993/11/30 26193.59 21502.27
1993/12/31 27115.88 21762.45
1994/01/31 28841.88 22502.37
1994/02/28 28406.35 21892.56
1994/03/31 27067.49 20938.04
1994/04/30 27874.03 21206.05
1994/05/31 28083.73 21553.83
1994/06/30 27293.32 21025.76
1994/07/31 28196.65 21715.41
1994/08/31 29470.98 22605.74
1994/09/30 28551.52 22051.90
1994/10/31 29180.62 22548.06
1994/11/30 28180.51 21726.86
1994/12/31 28316.94 22049.07
1995/01/31 28588.28 22620.81
1995/02/28 29557.38 23502.34
1995/03/31 30390.80 24195.89
1995/04/30 31534.33 24908.46
1995/05/31 33007.35 25904.05
1995/06/30 34131.50 26505.80
1995/07/31 35352.56 27384.74
1995/08/31 35662.67 27453.47
1995/09/30 36399.18 28612.01
1995/10/31 36689.91 28509.86
1995/11/30 37736.53 29761.45
1995/12/31 38780.11 30334.65
1996/01/31 39504.39 31367.24
1996/02/29 39359.53 31658.02
1996/03/31 39256.06 31962.88
1996/04/30 40001.04 32434.02
1996/05/31 40870.18 33270.49
1996/06/30 41159.89 33397.25
1996/07/31 39897.57 31921.76
1996/08/31 40228.67 32594.99
1996/09/30 42235.96 34429.44
1996/10/31 43850.08 35379.00
1996/11/30 47181.77 38053.30
1996/12/31 45972.13 37299.46
1997/01/31 48221.39 39629.93
1997/02/28 48657.47 39940.63
1997/03/31 46155.74 38299.47
1997/04/30 48473.86 40585.95
1997/05/31 51595.28 43056.82
1997/06/30 53247.80 44985.77
1997/07/31 57287.29 48565.29
1997/08/31 55221.64 45844.66
1997/09/30 57562.71 48355.57
1997/10/31 56392.17 46740.49
1997/11/30 58434.87 48904.11
1997/12/31 60188.77 49743.80
1998/01/31 60417.91 50293.96
1998/02/28 64313.38 53921.16
1998/03/31 66401.15 56682.47
IMATRL PRASUN SHR__CHT 19980331 19980406 170152 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Destiny I on March 31, 1988. As the chart shows, by March
31, 1998, the value of the investment would have grown to $66,401 - a
564.01% increase on the initial investment. For comparison, look at
how the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $56,682 - a 466.82% increase.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
MARCH 31, 1998 MONTHS YEAR YEARS YEARS
Destiny I 15.35% 43.86% 185.21% 564.01%
S&P 500 (registered trademark) 17.22% 48.00% 174.71% 466.82%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
MARCH 31, 1998 YEAR YEARS YEARS
Destiny I 43.86% 23.32% 20.84%
$50/month 15-Year Plan -31.23% 18.87% 19.26%
The charts above show Destiny I total returns, which include changes
in share price and reinvestment of dividends and capital gains. The
fund's cumulative total returns and average annual total returns do
not include the effects of the separate sales charges and custodian
fees assessed through Fidelity Systematic Investment Plans (the
Plans); the figures provided for a "$50/month 15-year plan" illustrate
the fund's performance adjusted to reflect fees and sales charges
assessed by the Plans. The illustrations assume an initial investment
at the beginning of each period shown. Because the illustrations
assume lump sum investments, they do not reflect what investors would
have earned had they made regular monthly investments over the period.
As shares of the funds may be acquired only through the Plans,
investors should consult the Plans' prospectus for more complete
information on the impact of the separate charges and fees applicable
to each Plan. The rate (%) of deductions decreases proportionately as
Plan sizes increase. Figures for the S&P 500, a widely recognized,
unmanaged index of common stocks, include reinvestment of dividends.
All performance numbers are historical; the fund's share price and
return will vary and you may have a gain or loss when you sell your
shares.
FIDELITY DESTINY PORTFOLIOS: DESTINY II
PERFORMANCE: THE BOTTOM LINE
$10,000 OVER 10 YEARS
Destiny II S&P 500
00306 SP001
1988/03/31 10000.00 10000.00
1988/04/30 10259.66 10111.00
1988/05/31 10157.00 10198.97
1988/06/30 11020.53 10667.10
1988/07/31 10960.14 10626.56
1988/08/31 10573.67 10265.26
1988/09/30 11002.42 10702.56
1988/10/31 11026.57 11000.09
1988/11/30 10682.37 10842.79
1988/12/31 11028.53 11032.54
1989/01/31 11951.21 11840.12
1989/02/28 11714.30 11545.30
1989/03/31 11863.93 11814.31
1989/04/30 12549.70 12427.47
1989/05/31 13341.46 12930.78
1989/06/30 12867.65 12857.08
1989/07/31 13640.71 14018.07
1989/08/31 14076.57 14292.83
1989/09/30 14155.65 14234.22
1989/10/31 13694.34 13903.99
1989/11/30 13826.15 14187.63
1989/12/31 13941.58 14528.14
1990/01/31 13034.92 13553.30
1990/02/28 13279.02 13728.13
1990/03/31 13606.81 14091.93
1990/04/30 13188.35 13739.63
1990/05/31 14694.80 15079.25
1990/06/30 14722.69 14976.71
1990/07/31 14199.62 14928.78
1990/08/31 12663.27 13579.22
1990/09/30 11718.14 12917.91
1990/10/31 11632.87 12862.36
1990/11/30 12826.71 13693.27
1990/12/31 13589.90 14075.32
1991/01/31 15115.81 14689.00
1991/02/28 16297.85 15739.26
1991/03/31 16813.65 16120.15
1991/04/30 17143.19 16158.84
1991/05/31 18117.48 16856.90
1991/06/30 16835.14 16084.86
1991/07/31 18017.19 16834.41
1991/08/31 18725.16 17233.39
1991/09/30 18405.41 16945.59
1991/10/31 18327.42 17172.66
1991/11/30 17141.98 16480.60
1991/12/31 19219.42 18365.98
1992/01/31 19589.66 18024.38
1992/02/29 20412.41 18258.69
1992/03/31 19787.12 17902.65
1992/04/30 20453.55 18428.99
1992/05/31 20766.19 18519.29
1992/06/30 20305.45 18243.35
1992/07/31 21119.97 18989.50
1992/08/31 20507.23 18600.22
1992/09/30 20570.52 18819.70
1992/10/31 20561.48 18885.57
1992/11/30 21592.27 19529.57
1992/12/31 22195.25 19769.78
1993/01/31 22961.58 19935.85
1993/02/28 23018.35 20206.98
1993/03/31 23983.36 20633.34
1993/04/30 23983.36 20134.02
1993/05/31 24815.92 20673.61
1993/06/30 25033.52 20733.56
1993/07/31 25270.04 20650.63
1993/08/31 26198.03 21433.29
1993/09/30 26266.95 21268.25
1993/10/31 27251.47 21708.50
1993/11/30 27143.17 21502.27
1993/12/31 28144.95 21762.45
1994/01/31 29917.62 22502.37
1994/02/28 29554.79 21892.56
1994/03/31 28113.85 20938.04
1994/04/30 28953.54 21206.05
1994/05/31 29160.86 21553.83
1994/06/30 28300.45 21025.76
1994/07/31 29223.06 21715.41
1994/08/31 30560.34 22605.74
1994/09/30 29596.26 22051.90
1994/10/31 30238.98 22548.06
1994/11/30 29274.90 21726.86
1994/12/31 29405.22 22049.07
1995/01/31 29713.25 22620.81
1995/02/28 30684.73 23502.34
1995/03/31 31514.05 24195.89
1995/04/30 32663.25 24908.46
1995/05/31 34132.32 25904.05
1995/06/30 35281.52 26505.80
1995/07/31 36489.95 27384.74
1995/08/31 36809.83 27453.47
1995/09/30 37579.91 28612.01
1995/10/31 37887.95 28509.86
1995/11/30 38918.67 29761.45
1995/12/31 39979.45 30334.65
1996/01/31 40726.73 31367.24
1996/02/29 40552.36 31658.02
1996/03/31 40415.36 31962.88
1996/04/30 41162.64 32434.02
1996/05/31 42022.01 33270.49
1996/06/30 42296.01 33397.25
1996/07/31 41063.00 31921.76
1996/08/31 41399.28 32594.99
1996/09/30 43379.57 34429.44
1996/10/31 44948.85 35379.00
1996/11/30 48348.98 38053.30
1996/12/31 47119.19 37299.46
1997/01/31 49351.36 39629.93
1997/02/28 49878.97 39940.63
1997/03/31 47362.70 38299.47
1997/04/30 49594.87 40585.95
1997/05/31 52679.33 43056.82
1997/06/30 54262.15 44985.77
1997/07/31 58280.06 48565.29
1997/08/31 56129.06 45844.66
1997/09/30 58442.40 48355.57
1997/10/31 57265.44 46740.49
1997/11/30 59375.86 48904.11
1997/12/31 61085.11 49743.80
1998/01/31 61306.59 50293.96
1998/02/28 65381.89 53921.16
1998/03/31 67463.83 56682.47
IMATRL PRASUN SHR__CHT 19980331 19980406 170328 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Destiny II on March 31, 1988. As the chart shows, by March
31, 1998, the value of the investment would have grown to $67,464 - a
574.64% increase on the initial investment. For comparison, look at
how the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $56,682 - a 466.82% increase.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 PAST 10
MARCH 31, 1998 MONTHS YEAR YEARS YEARS
Destiny II 15.44% 42.44% 181.29% 574.64%
S&P 500 17.22% 48.00% 174.71% 466.82%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 PAST 10
MARCH 31, 1998 YEAR YEARS YEARS
Destiny II 42.44% 22.98% 21.03%
$50/month 15-Year Plan -31.91% 18.54% 19.45%
The charts above show Destiny II total returns, which include changes
in share price and reinvestment of dividends and capital gains. The
fund's cumulative total returns and average annual total returns do
not include the effects of the separate sales charges and custodian
fees assessed through Fidelity Systematic Investment Plans (the
Plans); the figures provided for a "$50/month 15-year plan" illustrate
the fund's performance adjusted to reflect fees and sales charges
assessed by the Plans. The illustrations assume an initial investment
at the beginning of each period shown. Because the illustrations
assume lump sum investments, they do not reflect what investors would
have earned had they made regular monthly investments over the period.
As shares of the funds may be acquired only through the Plans,
investors should consult the Plans' prospectus for more complete
information on the impact of the separate charges and fees applicable
to each Plan. The rate (%) of deductions decreases proportionately as
Plan sizes increase. Figures for the S&P 500, a widely recognized,
unmanaged index of common stocks, include reinvestment of dividends.
All performance numbers are historical; the fund's share price and
return will vary and you may have a gain or loss when you sell your
shares.
INVESTMENT CHANGES
TOP TEN EQUITY HOLDINGS - DESTINY I
AS OF MARCH 31, 1998 AS OF SEPTEMBER 30, 1997
Fannie Mae Fannie Mae
Philip Morris Companies, Inc. Philip Morris Companies, Inc.
Fleet Financial Group, Inc. Fleet Financial Group, Inc.
Freddie Mac General Motors Corp.
Columbia/HCA Healthcare Corp. Freddie Mac
Wal-Mart Stores, Inc. Columbia/HCA Healthcare Corp.
Vodafone Group PLC sponsored ADR International Business Machines Corp.
Home Depot, Inc. Wal-Mart Stores, Inc.
General Motors Corp. Vodafone Group PLC sponsored ADR
Allstate Corp. Home Depot, Inc.
TOP TEN EQUITY HOLDINGS - DESTINY II
AS OF MARCH 31, 1998 AS OF SEPTEMBER 30, 1997
Fannie Mae Fannie Mae
Philip Morris Companies, Inc. Philip Morris Companies, Inc.
Fleet Financial Group, Inc. Fleet Financial Group, Inc.
Columbia/HCA Healthcare Corp. Columbia/HCA Healthcare Corp.
Freddie Mac General Motors Corp.
Wal-Mart Stores, Inc. Freddie Mac
Tyco International Ltd. International Business Machines Corp.
Vodafone Group PLC sponsored ADR Wal-Mart Stores, Inc.
Lowe's Companies, Inc. Home Depot, Inc.
Home Depot, Inc. Vodafone Group PLC sponsored ADR
TOP FIVE MARKET SECTORS - DESTINY I
<TABLE>
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AS OF MARCH 31, 1998 % OF FUND'S INVESTMENTS AS OF SEPTEMBER 30, 1997 % OF FUND'S INVESTMENTS
Finance 21.4% Finance 20.0%
Technology 10.2% Technology 13.5%
Utilities 9.2% Retail & Wholesale 7.8%
Retail & Wholesale 8.8% Nondurables 6.6%
Health 7.8% Utilities 6.6%
</TABLE>
TOP FIVE MARKET SECTORS - DESTINY II
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AS OF MARCH 31, 1998 % OF FUND'S INVESTMENTS AS OF SEPTEMBER 30, 1997 % OF FUND'S INVESTMENTS
Finance 20.0% Finance 18.2%
Technology 10.1% Technology 13.4%
Retail & Wholesale 9.5% Retail & Wholesale 8.0%
Utilities 9.2% Health 7.1%
Health 8.7% Utilities 6.6%
</TABLE>
FIDELITY DESTINY PORTFOLIOS: DESTINY I
INVESTMENTS MARCH 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 86.6%
VALUE
SHARES (NOTE 1)
AEROSPACE & DEFENSE - 0.3%
AEROSPACE & DEFENSE - 0.0%
Gulfstream Aerospace Corp. (a) 66,600 $ 2,888,775
DEFENSE ELECTRONICS - 0.3%
Raytheon Co.:
Class A 71,316 4,056,098
Class B 249,400 14,558,725
18,614,823
TOTAL AEROSPACE & DEFENSE 21,503,598
BASIC INDUSTRIES - 3.3%
CHEMICALS & PLASTICS - 1.9%
Air Products & Chemicals, Inc. 84,500 7,002,938
Cabot Corp. 20,000 737,500
Dow Chemical Co. 26,400 2,567,400
du Pont (E.I.) de Nemours & Co. 884,200 60,125,600
Raychem Corp. 819,600 34,064,625
Union Carbide Corp. 396,700 19,884,588
124,382,651
PACKAGING & CONTAINERS - 1.0%
Bemis Co., Inc. 44,100 1,990,013
Corning, Inc. 234,600 10,381,050
Owens-Illinois, Inc. (a) 1,277,600 55,256,200
67,627,263
PAPER & FOREST PRODUCTS - 0.4%
Boise Cascade Corp. 144,300 5,203,819
Champion International Corp. 272,000 14,773,000
Georgia-Pacific Corp. 21,100 1,366,225
Willamette Industries, Inc. 102,400 3,846,400
25,189,444
TOTAL BASIC INDUSTRIES 217,199,358
CONSTRUCTION & REAL ESTATE - 1.5%
BUILDING MATERIALS - 0.2%
Armstrong World Industries, Inc. 47,200 4,085,750
Owens-Corning 166,600 5,987,188
Sherwin-Williams Co. 167,300 5,939,150
16,012,088
CONSTRUCTION - 0.8%
Centex Corp. 217,000 8,273,125
D.R. Horton, Inc. 311,180 6,612,575
Fleetwood Enterprises, Inc. 513,507 23,910,170
Kaufman & Broad Home Corp. 470,700 15,327,169
U.S. Home Corp. (a) 34,300 1,571,369
55,694,408
VALUE
SHARES (NOTE 1)
ENGINEERING - 0.5%
Fluor Corp. 581,100 $ 28,909,725
TOTAL CONSTRUCTION & REAL ESTATE 100,616,221
DURABLES - 4.8%
AUTOS, TIRES, & ACCESSORIES - 2.6%
Cummins Engine Co., Inc. 202,200 11,146,275
Discount Auto Parts, Inc. (a) 248,300 6,021,275
General Motors Corp. 1,718,107 115,864,841
Goodyear Tire & Rubber Co. 174,800 13,241,100
Magna International, Inc. Class A 250,700 19,573,936
Superior Industries International, Inc. 258,800 8,588,925
174,436,352
CONSUMER DURABLES - 0.2%
Minnesota Mining & Manufacturing Co. 167,100 15,237,431
CONSUMER ELECTRONICS - 1.3%
Maytag Co. 128,100 6,124,781
Newell Co. 150,800 7,304,375
Philips Electronics NV 628,500 46,155,469
Philips Electronics NV (Bearer) 311,900 22,914,552
Whirlpool Corp. 96,600 6,623,138
89,122,315
HOME FURNISHINGS - 0.0%
HON Industries, Inc. 8,400 308,700
TEXTILES & APPAREL - 0.7%
Burlington Industries, Inc. (a) 315,800 5,546,238
Jones Apparel Group, Inc. (a) 103,200 5,682,450
Liz Claiborne, Inc. 434,200 21,655,725
NIKE, Inc. Class B 151,200 6,690,600
Reebok International Ltd. (a) 8,300 253,150
Warnaco Group, Inc. Class A 56,800 2,229,400
42,057,563
TOTAL DURABLES 321,162,361
ENERGY - 6.6%
ENERGY SERVICES - 0.3%
McDermott International, Inc. 466,400 19,268,150
Schlumberger Ltd. 26,300 1,992,225
Weatherford Enterra, Inc. (a) 1,000 42,438
21,302,813
OIL & GAS - 6.3%
Amerada Hess Corp. 515,500 30,060,094
Amoco Corp. 31,800 2,746,725
Apache Corp. 129,700 4,766,475
Atlantic Richfield Co. 135,000 10,614,375
British Petroleum PLC ADR 826,658 71,144,254
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Burlington Resources, Inc. 1,126,722 $ 54,012,236
Chevron Corp. 176,700 14,191,219
Cooper Cameron Corp. (a) 31,700 1,913,888
Elf Aquitaine SA sponsored ADR 107,764 6,977,719
Enron Oil & Gas Co. 43,600 1,000,075
Kerr-McGee Corp. 170,700 11,874,319
Occidental Petroleum Corp. 1,721,400 50,458,538
Royal Dutch Petroleum Co. 1,629,500 92,575,969
Santa Fe Energy Resources, Inc. 267,900 2,946,900
Tosco Corp. 1,034,100 36,452,025
Total SA:
Class B 67,156 8,071,935
sponsored ADR 156,636 9,407,950
USX-Marathon Group 112,800 4,244,100
Unocal Corp. 147,400 5,702,538
Valero Energy Corp. 92,100 3,073,838
422,235,172
TOTAL ENERGY 443,537,985
FINANCE - 21.4%
BANKS - 1.6%
Credit Suisse Group (Reg.) 201,400 40,319,659
NationsBank Corp. 307,400 22,420,988
Providian Financial Corp. 500,100 28,724,494
Wells Fargo & Co. 43,000 14,243,750
105,708,891
CREDIT & OTHER FINANCE - 3.9%
CIT Group, Inc. Class A 127,700 4,166,213
Fleet Financial Group, Inc. 2,820,530 239,921,333
Green Tree Financial Corp. 325,800 9,264,938
Money Store, Inc. (The) 100,400 3,206,525
Transamerica Corp. 16,500 1,922,250
258,481,259
FEDERAL SPONSORED CREDIT - 9.7%
Fannie Mae 7,375,200 466,481,372
Freddie Mac 3,970,400 188,345,850
654,827,222
INSURANCE - 5.8%
AFLAC, Inc. 202,200 12,789,150
Allmerica Financial Corp. 235,200 15,023,400
Allstate Corp. 1,119,490 102,923,112
American International Group, Inc. 655,050 82,495,359
CIGNA Corp. 200,100 41,020,500
VALUE
SHARES (NOTE 1)
General Re Corp. 94,700 $ 20,893,188
Loews Corp. 191,000 19,911,750
MBIA, Inc. 105,700 8,191,750
MGIC Investment Corp. 465,400 30,570,963
Nationwide Financial Services, Inc. Class A 16,500 715,688
PMI Group, Inc. 202,400 16,343,800
Provident Companies, Inc. 25,600 878,400
Reliastar Financial Corp. 119,981 5,526,625
Torchmark Corp. 521,300 23,882,056
Travelers Property Casualty Corp. Class A 154,300 6,789,200
UNUM Corp. 44,000 2,428,250
390,383,191
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 122,850 11,770,566
SECURITIES INDUSTRY - 0.2%
Nomura Securities Co. Ltd. 652,000 7,430,544
United Asset Management Corp. 253,300 6,902,425
Waddell & Reed Financial, Inc. Class A (a) 9,500 247,000
14,579,969
TOTAL FINANCE 1,435,751,098
HEALTH - 7.8%
DRUGS & PHARMACEUTICALS - 3.3%
Astra AB Class A Free shares 1,407,700 28,999,738
American Home Products Corp. 554,100 52,847,288
Amgen, Inc. 652,300 39,708,763
Gilead Sciences, Inc. (a) 12,400 446,400
Merck & Co., Inc. 150,100 19,269,088
Novartis AG (Reg.) 15,900 28,157,663
Schering-Plough Corp. 624,300 50,997,506
Sepracor, Inc. (a) 39,500 1,683,688
222,110,134
MEDICAL EQUIPMENT & SUPPLIES - 0.8%
AmeriSource Health Corp. Class A 15,700 943,963
Allegiance Corp. 23,620 934,466
Bard (C.R.), Inc. 131,000 4,814,250
Baxter International, Inc. 85,100 4,691,138
Biomet, Inc. 409,800 12,294,000
Boston Scientific Corp. (a) 107,800 7,276,500
Johnson & Johnson 60,000 4,398,750
St. Jude Medical, Inc. (a) 488,112 16,321,245
Sofamor/Danek Group, Inc. (a) 44,200 3,768,050
55,442,362
MEDICAL FACILITIES MANAGEMENT - 3.7%
Columbia/HCA Healthcare Corp. 4,928,087 158,930,806
Humana, Inc. (a) 1,114,300 27,648,569
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Tenet Healthcare Corp. (a) 682,800 $ 24,794,175
United HealthCare Corp. 511,900 33,145,525
244,519,075
TOTAL HEALTH 522,071,571
HOLDING COMPANIES - 0.1%
U.S. Industries, Inc. 293,550 8,824,847
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 1.6%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 27,700 1,052,600
Alcatel Alsthom Compagnie Generale
d'Electricite SA 246,600 46,333,239
Emerson Electric Co. 181,500 11,831,531
General Electric Co. 467,800 40,318,513
Grainger (W.W.), Inc. 39,500 4,061,094
Scientific-Atlanta, Inc. 235,800 4,612,838
108,209,815
INDUSTRIAL MACHINERY & EQUIPMENT - 0.7%
Caterpillar, Inc. 316,900 17,449,306
Tyco International Ltd. 355,200 19,402,800
Ultratech Stepper, Inc. (a) 270,900 5,519,588
United States Filter Corp. (a) 174,600 6,132,825
48,504,519
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 156,714,334
MEDIA & LEISURE - 3.3%
BROADCASTING - 0.9%
CBS Corp. 346,400 11,755,950
Comcast Corp.:
Class A 41,700 1,446,469
Class A special 81,700 2,885,031
Cox Communications, Inc. Class A (a) 81,500 3,423,000
Tele-Communications, Inc.: (a)
(TCI Group), Series A 174,621 5,429,622
(TCI Ventures Group), Series A 953,158 16,739,837
Time Warner, Inc. 247,000 17,784,000
59,463,909
ENTERTAINMENT - 0.6%
Cedar Fair LP (depositary unit) 35,600 979,000
Disney (Walt) Co. 26,100 2,786,175
King World Productions, Inc. 156,400 4,574,700
Royal Caribbean Cruises Ltd. 223,600 15,665,975
VALUE
SHARES (NOTE 1)
Viacom, Inc. (a):
Class A 111,100 $ 5,902,188
Class B (non-vtg.) 153,300 8,239,875
38,147,913
LEISURE DURABLES & TOYS - 0.0%
Nintendo Co. Ltd. Ord. 34,400 2,871,637
LODGING & GAMING - 0.8%
Circus Circus Enterprises, Inc. (a) 517,300 10,863,300
Mirage Resorts, Inc. (a) 612,400 14,888,975
Promus Hotel Corp. (a) 206,700 9,869,925
Sun International Hotels Ltd. Ord. (a) 336,900 15,960,638
51,582,838
PUBLISHING - 0.4%
Cognizant Corp. 154,300 8,852,963
US WEST Media Group (a) 466,800 16,221,300
25,074,263
RESTAURANTS - 0.6%
McDonald's Corp. 394,800 23,688,000
Papa John's International, Inc. (a) 108,200 4,152,175
Wendy's International, Inc. 719,300 16,049,381
43,889,556
TOTAL MEDIA & LEISURE 221,030,116
NONDURABLES - 5.2%
BEVERAGES - 0.1%
PepsiCo, Inc. 72,000 3,073,500
TOBACCO - 5.1%
Philip Morris Companies, Inc. 7,804,400 325,345,925
RJR Nabisco Holdings Corp. 403,498 12,634,531
UST, Inc. 145,600 4,695,600
342,676,056
TOTAL NONDURABLES 345,749,556
PRECIOUS METALS - 0.1%
Newmont Mining Corp. 124,206 3,796,046
RETAIL & WHOLESALE - 8.8%
APPAREL STORES - 0.4%
Columbia Sportswear Co. 2,000 42,250
Gap, Inc. 199,200 8,964,000
TJX Companies, Inc. 426,650 19,305,913
28,312,163
GENERAL MERCHANDISE STORES - 3.0%
Federated Department Stores, Inc. (a) 586,173 30,371,089
Penney (J.C.) Co., Inc. 222,400 16,832,900
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Proffitts, Inc. (a) 173,600 $ 6,293,000
Wal-Mart Stores, Inc. 2,945,200 149,652,975
203,149,964
GROCERY STORES - 0.3%
Safeway, Inc. (a) 570,000 21,054,375
RETAIL & WHOLESALE, MISCELLANEOUS - 5.1%
Circuit City Stores, Inc. - Circuit City Group 1,234,400 52,770,600
Corporate Express, Inc. (a) 256,900 2,560,972
Home Depot, Inc. 1,833,650 123,656,772
Lowe's Companies, Inc. 1,371,700 96,276,194
Officemax, Inc. (a) 754,850 13,492,944
Office Depot, Inc. (a) 233,500 7,267,688
Rex Stores Corp. (a) 88,100 1,299,475
Staples, Inc. (a) 495,550 11,490,566
Toys "R" Us, Inc. (a) 383,000 11,513,938
U.S. Office Products Co. (a) 543,850 10,333,150
Viking Office Products, Inc. (a) 309,700 7,200,525
337,862,824
TOTAL RETAIL & WHOLESALE 590,379,326
SERVICES - 1.1%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc. 49,950 3,103,144
LEASING & RENTAL - 0.0%
Republic Industries, Inc. (a) 106,900 2,759,356
PRINTING - 0.0%
Donnelley (R.R.) & Sons Co. 23,200 952,650
SERVICES - 1.0%
AccuStaff, Inc. (a) 421,100 14,527,950
Cendant Corp. (a) 1,144,855 45,364,879
Medpartners, Inc. (a) 333,600 3,419,400
Reuters Group PLC ADR 87,273 5,634,563
68,946,792
TOTAL SERVICES 75,761,942
TECHNOLOGY - 10.2%
COMMUNICATIONS EQUIPMENT - 0.1%
Andrew Corp. (a) 39,300 778,631
3Com Corp. (a) 169,100 6,077,031
6,855,662
COMPUTER SERVICES & SOFTWARE - 2.8%
Automatic Data Processing, Inc. 301,400 20,514,038
Black Box Corp. (a) 59,500 2,194,063
VALUE
SHARES (NOTE 1)
Ceridian Corp. (a) 393,600 $ 21,229,800
CompUSA, Inc. (a) 172,300 4,479,800
E Trade Group, Inc. (a) 221,300 5,518,669
Electronic Data Systems Corp. 616,400 28,277,350
Electronics for Imaging, Inc. (a) 436,200 11,341,200
First Data Corp. 526,400 17,108,000
Microsoft Corp. (a) 398,000 35,621,000
Oracle Corp. (a) 615,050 19,412,516
Policy Management Systems Corp. (a) 316,900 25,451,031
Shared Medical Systems Corp. 3,700 289,988
191,437,455
COMPUTERS & OFFICE EQUIPMENT - 2.3%
Adaptec, Inc. (a) 183,300 3,597,263
Compaq Computer Corp. 1,237,400 32,017,725
Hewlett-Packard Co. 243,500 15,431,813
Ingram Micro, Inc. Class A (a) 76,900 2,854,913
International Business Machines Corp. 310,100 32,211,638
Quantum Corp. (a) 39,700 846,106
SCI Systems, Inc. (a) 1,185,100 42,219,188
Seagate Technology (a) 284,500 7,183,625
Tech Data Corp. (a) 361,700 13,925,450
Western Digital Corp. (a) 108,500 1,905,531
152,193,252
ELECTRONIC INSTRUMENTS - 0.7%
Applied Materials, Inc. (a) 41,400 1,461,938
Cognex Corp. (a) 133,300 2,849,288
KLA-Tencor Corp. (a) 48,400 1,851,300
Lam Research Corp. (a) 551,000 15,496,875
Novellus Systems, Inc. (a) 205,500 8,887,875
Teradyne, Inc. (a) 25,900 1,037,619
Thermo Electron Corp. (a) 288,300 11,640,113
Varian Associates, Inc. 94,800 5,249,550
48,474,558
ELECTRONICS - 4.3%
Altera Corp. (a) 169,200 6,387,300
AMP, Inc. 598,900 26,239,306
Intel Corp. 649,500 50,701,594
International Rectifier Corp. (a) 105,100 1,234,925
Methode Electronics, Inc. Class A 1,325,500 19,799,656
Micrel, Inc. (a) 84,800 3,217,100
Microchip Technology, Inc. (a) 453,800 9,529,800
Micron Technology, Inc. (a) 1,461,500 42,474,844
Molex, Inc. 261,081 7,000,234
Motorola, Inc. 550,200 33,355,875
Solectron Corp. (a) 1,745,900 73,764,275
Thomas & Betts Corp. 187,600 12,006,400
Uniphase Corp. (a) 11,600 487,925
286,199,234
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.0%
Polaroid Corp. 26,700 $ 1,174,800
TOTAL TECHNOLOGY 686,334,961
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.0%
Northwest Airlines Corp. Class A (a) 33,100 2,041,856
RAILROADS - 0.5%
Bombardier, Inc. Class B 307,700 7,596,327
CSX Corp. 396,600 23,597,700
31,194,027
SHIPPING - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 137,600 2,734,800
Stolt-Nielsen SA 58,900 1,178,000
3,912,800
TRUCKING & FREIGHT - 0.0%
Yellow Corp. (a) 167,400 3,201,525
TOTAL TRANSPORTATION 40,350,208
UTILITIES - 9.2%
CELLULAR - 2.9%
AirTouch Communications, Inc. (a) 1,172,400 57,374,325
Century Telephone Enterprises, Inc. 30,700 1,876,538
Vodafone Group PLC sponsored ADR 1,302,880 135,336,660
194,587,523
ELECTRIC UTILITY - 0.5%
American Electric Power Co., Inc. 286,400 14,391,600
Consolidated Edison, Inc. 22,400 1,047,200
Entergy Corp. 277,400 8,252,650
Houston Industries, Inc. 127,400 3,662,750
Niagara Mohawk Power Corp. (a) 142,600 1,853,800
PG&E Corp. 131,126 4,327,158
33,535,158
GAS - 0.0%
Enron Corp. 58,700 2,722,213
TELEPHONE SERVICES - 5.8%
AT&T Corp. 229,800 15,080,625
Ameritech Corp. 514,400 25,430,650
Bell Atlantic Corp. 344,611 35,322,628
BellSouth Corp. 513,100 34,666,319
Deutsche Telekom AG 143,600 3,124,443
EXCEL Communications, Inc. (a) 49,100 1,156,919
LCI International, Inc. (a) 112,200 4,319,700
MCI Communications Corp. 2,013,200 99,653,400
Qwest Communications International, Inc. 102,400 3,980,800
VALUE
SHARES (NOTE 1)
SBC Communications, Inc. 644,200 $ 28,103,225
Sprint Corp. 1,023,500 69,278,156
Telebras sponsored ADR 442,300 57,416,069
WorldCom, Inc. (a) 282,000 12,143,625
389,676,559
TOTAL UTILITIES 620,521,453
TOTAL COMMON STOCKS
(Cost $3,186,343,255) 5,811,304,981
U.S. TREASURY OBLIGATIONS - 10.3%
PRINCIPAL
AMOUNT
8 1/8%, 8/15/19 $ 401,000,000 501,687,090
stripped principal:
0%, 2/15/19 115,000,000 32,737,050
0%, 8/15/19 100,000,000 27,624,000
0%, 8/15/20 392,000,000 101,849,440
0%, 8/15/21 130,000,000 31,801,900
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $583,275,485) 695,699,480
CASH EQUIVALENTS - 3.1%
SHARES
Taxable Central Cash Fund
(Cost $206,600,371) (b) 206,600,371 206,600,371
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,976,219,111) $ 6,713,604,832
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.63%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $3,976,708,027. Net unrealized appreciation
$2,736,896,805, of which $2,790,738,562 related to appreciated
investment securities and $53,841,757 related to depreciated
investment securities.
FIDELITY DESTINY PORTFOLIOS: DESTINY I
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $3,976,219,111) - See accompanying schedule $ 6,713,604,832
Receivable for investments sold 28,725,252
Receivable for fund shares sold 918,525
Dividends receivable 9,090,550
Interest receivable 5,173,464
Other receivables 72,277
TOTAL ASSETS 6,757,584,900
LIABILITIES
Payable for investments purchased $ 39,131,026
Payable for fund shares redeemed 1,393,115
Accrued management fee 1,735,803
Other payables and accrued expenses 329,905
TOTAL LIABILITIES 42,589,849
NET ASSETS $ 6,714,995,051
Net Assets consist of:
Paid in capital $ 3,682,864,658
Undistributed net investment income 30,361,662
Accumulated undistributed net realized gain (loss) on investments and foreign currency
transactions 264,405,175
Net unrealized appreciation (depreciation) on investments and assets and liabilities in
foreign currencies 2,737,363,556
NET ASSETS, for 257,461,913 shares outstanding $ 6,714,995,051
NET ASSET VALUE, offering price and redemption price per share ($6,714,995,051 (divided
by) 257,461,913 shares) $26.08
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 35,259,053
Dividends
Interest 29,511,681
TOTAL INCOME 64,770,734
EXPENSES
Management fee $ 14,333,495
Basic fee
Performance adjustment (4,665,636)
Transfer agent fees 181,799
Accounting fees and expenses 408,807
Non-interested trustees' compensation 20,245
Custodian fees and expenses 97,148
Registration fees 9,797
Audit 37,722
Legal 13,913
Miscellaneous 23,075
Total expenses before reductions 10,460,365
Expense reductions (20,223) 10,440,142
NET INVESTMENT INCOME 54,330,592
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 295,947,430
Foreign currency transactions (8,420) 295,939,010
Change in net unrealized appreciation (depreciation) on:
Investment securities 549,262,323
Assets and liabilities in foreign currencies (19,283) 549,243,040
NET GAIN (LOSS) 845,182,050
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 899,512,642
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1998 SEPTEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 54,330,592 $ 115,717,638
Net investment income
Net realized gain (loss) 295,939,010 475,671,787
Change in net unrealized appreciation (depreciation) 549,243,040 1,031,114,903
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 899,512,642 1,622,504,328
Distributions to shareholders (111,209,794) (100,379,101)
From net investment income
From net realized gain (480,404,897) (385,905,369)
TOTAL DISTRIBUTIONS (591,614,691) (486,284,470)
Share transactions 89,665,582 145,821,046
Net proceeds from sales of shares
Reinvestment of distributions 531,084,014 455,487,338
Cost of shares redeemed (174,394,718) (342,267,830)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 446,354,878 259,040,554
TOTAL INCREASE (DECREASE) IN NET ASSETS 754,252,829 1,395,260,412
NET ASSETS
Beginning of period 5,960,742,222 4,565,481,810
End of period (including undistributed net investment income of $30,361,662 and
$89,779,250, $ 6,714,995,051 $ 5,960,742,222
respectively)
OTHER INFORMATION
Shares
Sold 3,607,193 6,693,954
Issued in reinvestment of distributions 23,221,862 22,797,165
Redeemed (6,999,570) (15,580,927)
Net increase (decrease) 19,829,485 13,910,192
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED SEPTEMBER 30, THREE MONTHS YEAR ENDED
ENDED ENDED JUNE 30,
MARCH 31, 1998 SEPTEMBER 30,
(UNAUDITED) 1997 1996 1995 1994 1993 1993
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54
Income from Investment Operations
Net investment income .22 D .49 D .45 .41 .30 .04 .26
Net realized and unrealized gain (loss) 3.28 6.36 2.42 3.54 1.69 .75 3.16
Total from investment operations 3.50 6.85 2.87 3.95 1.99 .79 3.42
Less Distributions
From net investment income (.47) (.45) (.43) (.34) (.11) (.14) (.30)
From net realized gain (2.03) (1.73) (.81) (2.53) (1.04) (1.01) (2.44)
Total distributions (2.50) (2.18) (1.24) (2.87) (1.15) (1.15) (2.74)
Net asset value, end of period $ 26.08 $ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22
TOTAL RETURN C 15.35% 36.29% B 16.04% 27.49% 12.30% 4.77% 23.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 6,715 $ 5,961 $ 4,565 $ 4,053 $ 3,273 $ 2,973 $ 2,869
Ratio of expenses to average net assets .34% A .39% .65% .68% .70% .65% A .66%
Ratio of expenses to average net assets after .34% A .38% E .65% .68% .70% .65% A .66%
expense reductions
Ratio of net investment income to average 1.77% A 2.20% 2.40% 2.35% 1.69% 1.11% A 1.83%
net assets
Portfolio turnover rate 30% A 32% 42% 55% 77% 82% A 75%
Average commission rate F $ .0467 $ .0478 .0175
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPARATE SALES
CHARGE AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F 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.
FIDELITY DESTINY PORTFOLIOS: DESTINY II
INVESTMENTS MARCH 31, 1998 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 85.7%
VALUE
SHARES (NOTE 1)
AEROSPACE & DEFENSE - 0.5%
AEROSPACE & DEFENSE - 0.0%
Gulfstream Aerospace Corp. (a) 37,200 $ 1,613,550
DEFENSE ELECTRONICS - 0.5%
Raytheon Co.:
Class A 72,648 4,131,855
Class B 273,500 15,965,563
20,097,418
TOTAL AEROSPACE & DEFENSE 21,710,968
BASIC INDUSTRIES - 2.9%
CHEMICALS & PLASTICS - 1.7%
Air Products & Chemicals, Inc. 45,500 3,770,813
Dow Chemical Co. 16,000 1,556,000
du Pont (E.I.) de Nemours & Co. 519,900 35,353,200
Raychem Corp. 474,200 19,708,938
Union Carbide Corp. 215,400 10,796,925
71,185,876
PACKAGING & CONTAINERS - 0.9%
Bemis Co., Inc. 26,700 1,204,838
Corning, Inc. 142,400 6,301,200
Owens-Illinois, Inc. (a) 691,200 29,894,400
37,400,438
PAPER & FOREST PRODUCTS - 0.3%
Boise Cascade Corp. 68,700 2,477,494
Champion International Corp. 132,600 7,201,838
Georgia Pacific Corp. 20,000 1,295,000
Georgia Pacific Corp. (Timber Group) 20,000 513,750
Willamette Industries, Inc. 88,000 3,305,500
14,793,582
TOTAL BASIC INDUSTRIES 123,379,896
CONSTRUCTION & REAL ESTATE - 1.4%
CONSTRUCTION - 0.9%
Centex Corp. 117,400 4,475,875
D.R. Horton, Inc. 373,436 7,935,515
Fleetwood Enterprises, Inc. 360,841 16,801,659
Kaufman & Broad Home Corp. 283,600 9,234,725
U.S. Home Corp. (a) 18,300 838,369
39,286,143
ENGINEERING - 0.5%
Fluor Corp. 427,200 21,253,200
TOTAL CONSTRUCTION & REAL ESTATE 60,539,343
VALUE
SHARES (NOTE 1)
DURABLES - 4.3%
AUTOS, TIRES, & ACCESSORIES - 2.4%
Cummins Engine Co., Inc. 107,300 $ 5,914,913
Discount Auto Parts, Inc. (a) 181,900 4,411,075
General Motors Corp. 1,028,921 69,387,860
Goodyear Tire & Rubber Co. 68,700 5,204,025
Magna International, Inc. Class A 143,000 11,165,029
Superior Industries International, Inc. 131,300 4,357,519
100,440,421
CONSUMER DURABLES - 0.3%
Minnesota Mining & Manufacturing Co. 153,700 14,015,519
CONSUMER ELECTRONICS - 0.9%
Newell Co. 82,100 3,976,719
Philips Electronics NV 261,800 19,225,938
Philips Electronics NV (Bearer) 210,700 15,479,628
38,682,285
HOME FURNISHINGS - 0.0%
HON Industries, Inc. 5,200 191,100
TEXTILES & APPAREL - 0.7%
Burlington Industries, Inc. (a) 150,300 2,639,644
Jones Apparel Group, Inc. (a) 64,500 3,551,531
Liz Claiborne, Inc. 373,100 18,608,363
NIKE, Inc. Class B 109,300 4,836,525
Reebok International Ltd. (a) 5,900 179,950
Warnaco Group, Inc. Class A 35,500 1,393,375
31,209,388
TOTAL DURABLES 184,538,713
ENERGY - 5.3%
ENERGY SERVICES - 0.3%
McDermott International, Inc. 279,400 11,542,713
Schlumberger Ltd. 16,600 1,257,450
12,800,163
OIL & GAS - 5.0%
Amerada Hess Corp. 150,800 8,793,525
Amoco Corp. 19,800 1,710,225
Apache Corp. 16,100 591,675
Atlantic Richfield Co. 73,100 5,747,488
British Petroleum PLC ADR 323,623 27,851,804
Burlington Resources, Inc. 617,905 29,620,821
Chevron Corp. 47,800 3,838,938
Cooper Cameron Corp. (a) 7,300 440,738
Elf Aquitaine SA sponsored ADR 57,344 3,713,024
Enron Oil & Gas Co. 25,200 578,025
Kerr-McGee Corp. 52,600 3,658,988
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Occidental Petroleum Corp. 1,135,900 $ 33,296,069
Royal Dutch Petroleum Co. 955,400 54,278,663
Santa Fe Energy Resources, Inc. 129,800 1,427,800
Tosco Corp. 648,100 22,845,525
Total SA:
Class B 37,456 4,502,090
sponsored ADR 84,904 5,099,547
USX-Marathon Group 8,100 304,763
Valero Energy Corp. 76,600 2,556,525
210,856,233
TOTAL ENERGY 223,656,396
FINANCE - 20.0%
BANKS - 1.8%
Credit Suisse Group (Reg.) 120,200 24,063,669
NationsBank Corp. 180,500 13,165,219
Providian Financial Corp. 353,800 20,321,388
Wells Fargo & Co. 56,400 18,682,500
76,232,776
CREDIT & OTHER FINANCE - 3.4%
CIT Group, Inc. Class A 78,100 2,548,013
Fleet Financial Group, Inc. 1,555,716 132,333,092
Green Tree Financial Corp. 164,900 4,689,344
Money Store, Inc. (The) 61,700 1,970,544
Transamerica Corp. 10,300 1,199,950
142,740,943
FEDERAL SPONSORED CREDIT - 8.9%
Fannie Mae 4,282,500 270,868,095
Freddie Mac 2,254,100 106,928,869
377,796,964
INSURANCE - 5.5%
AFLAC, Inc. 121,150 7,662,738
Allmerica Financial Corp. 120,200 7,677,775
Allstate Corp. 603,545 55,488,418
American International Group, Inc. 376,925 47,468,992
CIGNA Corp. 143,500 29,417,500
General Re Corp. 50,800 11,207,750
Loews Corp. 126,600 13,198,050
MBIA, Inc. 43,900 3,402,250
MGIC Investment Corp. 274,500 18,031,219
Nationwide Financial Services, Inc. Class A 9,700 420,738
PMI Group, Inc. 191,900 15,495,925
Provident Companies, Inc. 24,700 847,519
VALUE
SHARES (NOTE 1)
Reliastar Financial Corp. 72,549 $ 3,341,788
Torchmark Corp. 300,300 13,757,494
Travelers Property Casualty Corp. Class A 91,200 4,012,800
UNUM Corp. 25,600 1,412,800
232,843,756
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 97,200 9,312,975
SECURITIES INDUSTRY - 0.2%
Nomura Securities Co. Ltd. 408,000 4,649,788
United Asset Management Corp. 104,500 2,847,625
Waddell & Reed Financial, Inc. Class A (a) 6,000 156,000
7,653,413
TOTAL FINANCE 846,580,827
HEALTH - 8.7%
DRUGS & PHARMACEUTICALS - 3.0%
American Home Products Corp. 394,300 37,606,363
Amgen, Inc. 116,100 7,067,588
Astra AB Class A Free shares 954,000 19,653,157
Gilead Sciences, Inc. (a) 7,500 270,000
Merck & Co., Inc. 90,400 11,605,100
Novartis AG (Reg.) 11,306 20,022,047
Schering-Plough Corp. 371,900 30,379,581
Sepracor, Inc. (a) 24,100 1,027,263
127,631,099
MEDICAL EQUIPMENT & SUPPLIES - 1.1%
Allegiance Corp. 22,500 890,156
Bard (C.R.), Inc. 77,500 2,848,125
Baxter International, Inc. 67,000 3,693,375
Biomet, Inc. 221,700 6,651,000
Boston Scientific Corp. (a) 250,200 16,888,500
Johnson & Johnson 34,900 2,558,606
St. Jude Medical, Inc. (a) 305,207 10,205,359
Sofamor/Danek Group, Inc. (a) 27,200 2,318,800
46,053,921
MEDICAL FACILITIES MANAGEMENT - 4.6%
Columbia/HCA Healthcare Corp. 3,798,060 122,487,435
Humana, Inc. (a) 994,700 24,680,994
Tenet Healthcare Corp. (a) 570,100 20,701,756
United HealthCare Corp. 439,800 28,477,050
196,347,235
TOTAL HEALTH 370,032,255
HOLDING COMPANIES - 0.1%
U.S. Industries, Inc. 150,550 4,525,909
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 3.8%
ELECTRICAL EQUIPMENT - 1.4%
Alcatel Alsthom Compagnie Generale
d'Electricite SA sponsored ADR 16,200 $ 615,600
Alcatel Alsthom Compagnie Generale
d'Electricite SA 144,900 27,225,005
Emerson Electric Co. 76,600 4,993,363
General Electric Co. 260,600 22,460,463
Grainger (W.W.), Inc. 23,700 2,436,656
Scientific-Atlanta, Inc. 124,600 2,437,488
60,168,575
INDUSTRIAL MACHINERY & EQUIPMENT - 2.4%
Caterpillar, Inc. 211,900 11,667,744
Tyco International Ltd. 1,559,600 85,193,150
Ultratech Stepper, Inc. (a) 248,000 5,053,000
101,913,894
POLLUTION CONTROL - 0.0%
Browning-Ferris Industries, Inc. 8,830 288,079
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 162,370,548
MEDIA & LEISURE - 3.1%
BROADCASTING - 0.9%
CBS Corp. 190,200 6,454,913
Comcast Corp.:
Class A 25,300 877,594 Class A special 49,600 1,751,500
Cox Communications, Inc. Class A (a) 48,500 2,037,000
Tele-Communications, Inc. (a):
(TCI Group), Series A 103,771 3,226,630
(TCI Ventures Group), Series A 575,858 10,113,506
Telemundo Group, Inc. Class A (a) 68,000 2,847,500
Time Warner, Inc. 150,100 10,807,200
38,115,843
ENTERTAINMENT - 0.5%
Cedar Fair LP (depositary unit) 18,600 511,500
Disney (Walt) Co. 16,100 1,718,675
King World Productions, Inc. 77,200 2,258,100
Royal Caribbean Cruises Ltd. 118,100 8,274,381
Viacom, Inc. (a):
Class A 66,400 3,527,500
Class B (non-vtg.) 92,100 4,950,375
21,240,531
LEISURE DURABLES & TOYS - 0.0%
Nintendo Co. Ltd. Ord. 22,700 1,894,947
VALUE
SHARES (NOTE 1)
LODGING & GAMING - 0.6%
Circus Circus Enterprises, Inc. (a) 267,300 $ 5,613,300
Mirage Resorts, Inc. (a) 375,300 9,124,481
Sun International Hotels Ltd. Ord. (a) 223,700 10,597,788
25,335,569
PUBLISHING - 0.4%
Cognizant Corp. 91,800 5,267,025
US WEST Media Group (a) 283,300 9,844,675
15,111,700
RESTAURANTS - 0.7%
McDonald's Corp. 268,500 16,110,000
Papa John's International, Inc. (a) 30,400 1,166,600
Wendy's International, Inc. 504,000 11,245,500
28,522,100
TOTAL MEDIA & LEISURE 130,220,690
NONDURABLES - 5.0%
BEVERAGES - 0.0%
PepsiCo, Inc. 43,400 1,852,638
TOBACCO - 5.0%
Philip Morris Companies, Inc. 4,695,800 195,756,163
RJR Nabisco Holdings Corp. 408,254 12,783,453
Standard Commercial Corp. 51,005 812,892
UST, Inc. 89,400 2,883,150
212,235,658
TOTAL NONDURABLES 214,088,296
PRECIOUS METALS - 0.1%
Newmont Mining Corp. 84,348 2,577,886
RETAIL & WHOLESALE - 9.5%
APPAREL STORES - 0.4%
Columbia Sportswear Co. 1,300 27,463
Gap, Inc. 117,900 5,305,500
TJX Companies, Inc. 266,800 12,072,700
17,405,663
DRUG STORES - 0.0%
CVS Corp. 23,700 1,789,350
GENERAL MERCHANDISE STORES - 3.1%
Consolidated Stores Corp. 295,000 12,666,563
Federated Department Stores, Inc. (a) 346,400 17,947,850
Penney (J.C.) Co., Inc. 139,400 10,550,838
Proffitts, Inc. (a) 163,800 5,937,750
Wal-Mart Stores, Inc. 1,679,800 85,354,838
132,457,839
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.6%
Food Lion, Inc. Class B 120,000 $ 1,316,250
Safeway, Inc. (a) 590,600 21,815,288
23,131,538
RETAIL & WHOLESALE, MISCELLANEOUS - 5.4%
Circuit City Stores, Inc. - Circuit City Group 669,100 28,604,025
Corporate Express, Inc. (a) 150,800 1,503,288
Home Depot, Inc. 1,115,350 75,216,416
Lowe's Companies, Inc. 1,126,000 79,031,125
Officemax, Inc. (a) 558,700 9,986,763
Office Depot, Inc. (a) 132,700 4,130,288
Rex Stores Corp. (a) 37,600 554,600
Staples, Inc. (a) 327,150 7,585,791
Toys "R" Us, Inc. (a) 256,600 7,714,038
U.S. Office Products Co. (a) 452,200 8,591,800
Viking Office Products, Inc. (a) 180,200 4,189,650
227,107,784
TOTAL RETAIL & WHOLESALE 401,892,174
SERVICES - 1.2%
ADVERTISING - 0.0%
Interpublic Group of Companies, Inc. 26,100 1,621,463
LEASING & RENTAL - 0.0%
Republic Industries, Inc. (a) 67,000 1,729,438
PRINTING - 0.0%
Donnelley (R.R.) & Sons Co. 13,900 570,769
SERVICES - 1.2%
AccuStaff, Inc. (a) 300,000 10,350,000
Cendant Corp. (a) 826,633 32,755,333
Medpartners, Inc. (a) 8,000 82,000
Reuters Group PLC ADR 52,866 3,413,161
46,600,494
TOTAL SERVICES 50,522,164
TECHNOLOGY - 10.1%
COMMUNICATIONS EQUIPMENT - 0.1%
Andrew Corp. (a) 41,300 818,256
3Com Corp. (a) 135,400 4,865,938
5,684,194
COMPUTER SERVICES & SOFTWARE - 2.6%
Automatic Data Processing, Inc. 162,100 11,032,931
Black Box Corp. (a) 127,800 4,712,625
Ceridian Corp. (a) 232,600 12,545,863
CompUSA, Inc. (a) 100,200 2,605,200
VALUE
SHARES (NOTE 1)
E Trade Group, Inc. (a) 97,800 $ 2,438,888
Electronic Data Systems Corp. 439,500 20,162,063
Electronics for Imaging, Inc. (a) 268,000 6,968,000
First Data Corp. 278,100 9,038,250
Microsoft Corp. (a) 215,000 19,242,500
Oracle Corp. (a) 270,975 8,552,648
Policy Management Systems Corp. (a) 169,800 13,637,063
Shared Medical Systems Corp. 2,300 180,263
111,116,294
COMPUTERS & OFFICE EQUIPMENT - 2.4%
Adaptec, Inc. (a) 96,000 1,884,000
Compaq Computer Corp. 789,000 20,415,375
Hewlett-Packard Co. 160,700 10,184,363
Ingram Micro, Inc. Class A (a) 26,900 998,663
International Business Machines Corp. 204,900 21,283,988
Quantum Corp. (a) 24,100 513,631
SCI Systems, Inc. (a) 788,500 28,090,313
Seagate Technology (a) 177,000 4,469,250
Tech Data Corp. (a) 269,000 10,356,500
Western Digital Corp. (a) 65,500 1,150,344
99,346,427
ELECTRONIC INSTRUMENTS - 0.9%
Applied Materials, Inc. (a) 25,900 914,594
Cognex Corp. (a) 77,500 1,656,563
KLA-Tencor Corp. (a) 30,100 1,151,325
Lam Research Corp. (a) 315,500 8,873,438
Novellus Systems, Inc. (a) 123,300 5,332,725
Teradyne, Inc. (a) 16,100 645,006
Thermo Electron Corp. (a) 325,200 13,129,950
Varian Associates, Inc. 111,700 6,185,388
37,888,989
ELECTRONICS - 4.1%
Altera Corp. (a) 42,700 1,611,925
AMP, Inc. 377,200 16,526,075
Intel Corp. 419,500 32,747,219
International Rectifier Corp. (a) 165,000 1,938,750
Methode Electronics, Inc. Class A 128,350 1,917,228
Micrel, Inc. (a) 338,100 12,826,669
Microchip Technology, Inc. (a) 8,000 168,000
Micron Technology, Inc. (a) 899,500 26,141,719
Molex, Inc. 200,071 5,364,404
Motorola, Inc. 82,300 4,989,438
Solectron Corp. (a) 1,185,496 50,087,206
Thomas & Betts Corp. 280,500 17,952,000
Uniphase Corp. (a) 7,100 298,644
172,569,277
COMMON STOCKS - CONTINUED
VALUE
SHARES (NOTE 1)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.0%
Polaroid Corp. 43,300 $ 1,905,200
TOTAL TECHNOLOGY 428,510,381
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.0%
Northwest Airlines Corp. Class A (a) 19,100 1,178,231
RAILROADS - 0.4%
Bombardier, Inc. Class B 112,000 2,764,994
CSX Corp. 213,700 12,715,150
15,480,144
SHIPPING - 0.1%
Stolt-Nielsen SA Class B sponsored ADR 74,800 1,486,650
Stolt-Nielsen SA 53,900 1,078,000
2,564,650
TRUCKING & FREIGHT - 0.0%
Yellow Corp. (a) 103,700 1,983,263
TOTAL TRANSPORTATION 21,206,288
UTILITIES - 9.2%
CELLULAR - 2.8%
AirTouch Communications, Inc. (a) 769,900 37,676,981
Century Telephone Enterprises, Inc. 21,100 1,289,738
Vodafone Group PLC sponsored ADR 774,100 80,409,638
119,376,357
ELECTRIC UTILITY - 0.6%
American Electric Power Co., Inc. 223,800 11,245,950
Consolidated Edison, Inc. 13,900 649,825
Entergy Corp. 162,700 4,840,325
Houston Industries, Inc. 78,200 2,248,250
Niagara Mohawk Power Corp. (a) 85,500 1,111,500
PG&E Corp. 91,942 3,034,086
23,129,936
GAS - 0.0%
Enron Corp. 40,500 1,878,188
TELEPHONE SERVICES - 5.8%
AT&T Corp. 132,300 8,682,188
Ameritech Corp. 274,200 13,555,763
Bell Atlantic Corp. 187,193 19,187,283
BellSouth Corp. 270,900 18,302,681
Deutsche Telekom AG 80,500 1,751,515
MCI Communications Corp. 1,351,000 66,874,500
SBC Communications, Inc. 430,200 18,767,475
VALUE
SHARES (NOTE 1)
Sprint Corp. 674,500 $ 45,655,219
Telebras sponsored ADR 319,700 41,501,056
WorldCom, Inc. (a) 269,100 11,588,119
245,865,799
TOTAL UTILITIES 390,250,280
TOTAL COMMON STOCKS
(Cost $2,147,429,376) 3,636,603,014
U.S. TREASURY OBLIGATIONS - 10.3%
PRINCIPAL
AMOUNT
6 1/4%, 8/15/23 $ 5,000,000 5,153,900
8 1/8%, 8/15/19 248,000,000 310,270,320
stripped principal:
0%, 2/15/19 120,000,000 34,160,400
0%, 8/15/19 70,000,000 19,336,800
0%, 8/15/20 207,000,000 53,782,740
0%, 8/15/21 60,000,000 14,677,800
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $374,142,284) 437,381,960
CASH EQUIVALENTS - 4.0%
SHARES
Taxable Central Cash Fund
(Cost $167,420,505) (b) 167,420,505 167,420,505
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,688,992,165) $ 4,241,405,479
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.63%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $2,689,484,777. Net unrealized appreciation
$1,551,920,702 of which $1,588,360,326 related to appreciated
investment securities and $36,439,624 related to depreciated
investment securities.
FIDELITY DESTINY PORTFOLIOS: DESTINY II
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $2,688,992,165) - See accompanying schedule $ 4,241,405,479
Receivable for investments sold 5,380,303
Receivable for fund shares sold 811,957
Dividends receivable 5,492,823
Interest receivable 3,440,260
Other receivables 18,664
TOTAL ASSETS 4,256,549,486
LIABILITIES
Payable for investments purchased $ 16,380,106
Payable for fund shares redeemed 2,445,018
Accrued management fee 1,600,448
Other payables and accrued expenses 291,262
TOTAL LIABILITIES 20,716,834
NET ASSETS $ 4,235,832,652
Net Assets consist of:
Paid in capital $ 2,566,926,921
Undistributed net investment income 17,015,862
Accumulated undistributed net realized gain (loss) on investments and foreign currency
transactions 99,489,030
Net unrealized appreciation (depreciation) on investments and assets and liabilities in
foreign currencies 1,552,400,839
NET ASSETS, for 278,124,457 shares outstanding $ 4,235,832,652
NET ASSET VALUE, offering price and redemption price per share ($4,235,832,652 (divided by)
278,124,457 shares) $15.23
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 20,684,899
Dividends
Interest 19,480,631
TOTAL INCOME 40,165,530
EXPENSES
Management fee $ 11,365,076
Basic fee
Performance adjustment (2,589,972)
Transfer agent fees 108,144
Accounting fees and expenses 405,348
Non-interested trustees' compensation 9,819
Custodian fees and expenses 65,462
Registration fees 11,156
Audit 37,284
Legal 8,435
Miscellaneous 13,546
Total expenses before reductions 9,434,298
Expense reductions (17,181) 9,417,117
NET INVESTMENT INCOME 30,748,413
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 119,546,547
Foreign currency transactions (8,844) 119,537,703
Change in net unrealized appreciation (depreciation) on:
Investment securities 413,572,999
Assets and liabilities in foreign currencies (10,810) 413,562,189
NET GAIN (LOSS) 533,099,892
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 563,848,305
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1998 SEPTEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 30,748,413 $ 64,917,247
Net investment income
Net realized gain (loss) 119,537,703 238,687,694
Change in net unrealized appreciation (depreciation) 413,562,189 606,544,012
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 563,848,305 910,148,953
Distributions to shareholders (63,384,219) (55,499,110)
From net investment income
From net realized gain (245,892,803) (166,474,990)
TOTAL DISTRIBUTIONS (309,277,022) (221,974,100)
Share transactions 212,510,286 326,984,358
Net proceeds from sales of shares
Reinvestment of distributions 302,744,632 218,448,216
Cost of shares redeemed (143,137,970) (162,870,326)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 372,116,948 382,562,248
TOTAL INCREASE (DECREASE) IN NET ASSETS 626,688,231 1,070,737,101
NET ASSETS
Beginning of period 3,609,144,421 2,538,407,320
End of period (including undistributed net investment income of $17,015,862 and
$50,768,400, respectively) $ 4,235,832,652 $ 3,609,144,421
OTHER INFORMATION
Shares
Sold 14,680,600 25,964,294
Issued in reinvestment of distributions 22,694,502 18,831,746
Redeemed (9,846,787) (12,796,917)
Net increase (decrease) 27,528,315 31,999,123
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
(PER-SHARE DATA HAVE BEEN ADJUSTED
FOR A 3-FOR-1 SHARE SPLIT PAID
JUNE 21, 1996.)
SIX MONTHS YEARS ENDED SEPTEMBER 30, THREE MONTHS YEAR ENDED
ENDED ENDED JUNE 30,
MARCH 31, 1998 SEPTEMBER 30,
(UNAUDITED) 1997 1996 1995 1994 1993 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23
Income from Investment Operations
Net investment income .12 D .27 D .24 .22 .14 .01 .09
Net realized and unrealized gain (loss) 1.93 3.52 1.34 1.99 .96 .41 1.61
Total from investment operations 2.05 3.79 1.58 2.21 1.10 .42 1.70
Less Distributions
From net investment income (.25) (.25) (.22) (.17) (.04) (.05) (.12)
From net realized gain (.97) (.75) (.32) (.99) (.43) (.30) (.99)
Total distributions (1.22) (1.00) (.54) (1.16) (.47) (.35) (1.11)
Net asset value, end of period $ 15.23 $ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82
TOTAL RETURN C 15.44% 34.72% B 15.43% 26.98% 12.67% 4.93% 23.28%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 4,236 $ 3,609 $ 2,538 $ 2,032 $ 1,437 $ 1,143 $ 1,061
Ratio of expenses to average net assets .50% A .54% .78% .80% .80% .84% A .84%
Ratio of expenses to average net assets after .50% A .53% E .78% .80% .80% .84% A .84%
expense reductions
Ratio of net investment income to average 1.62% A 2.11% 2.38% 2.33% 1.56% .69% A 1.41%
net assets
Portfolio turnover rate 27% A 35% 37% 52% 72% 80% A 81%
Average commission rate F $ .0462 $ .0482 .0182
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPARATE SALES
CHARGE AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F 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.
NOTES TO FINANCIAL STATEMENTS
for the period ended March 31, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Destiny I and Destiny II (the funds) are funds of Fidelity Destiny
Portfolios (the trust). The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business
trust. Each fund is authorized to issue an unlimited number of shares.
Shares of each fund are offered publicly through Fidelity Systematic
Investment Plans: Destiny Plans I and Destiny Plans II (the Plans), a
unit investment trust with two series. The financial statements have
been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the funds:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the funds are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchase
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the funds
are informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
market discount, partnerships and losses deferred due to wash sales.
The funds also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. Certain funds generally use foreign
currency contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the funds may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc.,
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the funds are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Destiny I: Purchases and sales of securities, other than short-term
securities, aggregated $891,955,089 and $953,251,884, respectively, of
which U.S. government and government agency obligations aggregated $0
and $50,212,500, respectively.
Destiny II: Purchases and sales of securities, other than short-term
securities, aggregated $611,235,502 and $493,258,382, respectively, of
which U.S. government and government agency obligations aggregated
$9,227,258 and $25,106,250, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of each fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rates are .17%
and .30% for Destiny I and Destiny II, respectively. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. The basic fee is subject to a
performance adjustment (up to a maximum of (plus/minus).24% of the
fund's average net assets over the performance period) based on each
fund's investment performance as compared to the appropriate index
over a specified period of time. For the period, the management fees
were equivalent to annualized rates of .31% and .46%, respectively of
average net assets after the performance adjustment for the Destiny I
and Destiny II funds, respectively.
Fidelity Distributors Corporation, an affiliate of FMR and sponsor of
the Plans, received $1,763,320 and $1,165,773 as its portion of the
Creation and Sales Charges on sales of Destiny Plans I and Destiny
Plans II, respectively, for the period.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the funds' transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .01%, and .01% of the average net
assets of Destiny I and Destiny II, respectively.
ACCOUNTING FEES. FSC maintains each fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. Each fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms for Destiny I and Destiny
II were $209,014 and $139,794, respectively for the period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of each fund's expenses. For the period, each fund's expenses
were reduced by $13,476 and $8,637 under this arrangement for Destiny
I and Destiny II, respectively.
In addition, each fund has entered into arrangements with its
custodian and transfer agent whereby credits realized on uninvested
cash balances were used to offset a portion of each fund's expenses.
During the period, the custodian and transfer agent fees were reduced
by $1,360 and $5,387 for Destiny I and $798 and $7,746, for Destiny II
under these arrangements, respectively.
