FIDELITY DESTINY PORTFOLIOS, N-30D, 1999-05-24

FIDELITY DESTINY PORTFOLIOS
N-30D, 1999-05-24

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FIDELITY
DESTINY
PORTFOLIOS:
DESTINY I
DESTINY II
Semiannual Report

March 31, 1999

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 P. Johnson, VICE PRESIDENT
George A. Vanderheiden, VICE PRESIDENT (DESTINY I)
Beth Terrana, VICE PRESIDENT (DESTINY II)
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
Matthew N. Karstetter, DEPUTY 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

* INDEPENDENT TRUSTEES

DES-SANN-0599
1.702317.101

(RECYCLE_LOGO)Printed on recycled paper
6i-76041

CONTENTS

SEMIANNUAL REPORT
PERFORMANCE 4 How the funds have done over
time.

FUND TALK 6 The managers' review of the
funds' performance,
strategy and outlook.

INVESTMENT CHANGES 12 A summary of major shifts in
the funds' investments over
the past six months.

DESTINY I

INVESTMENTS 13 A complete list of the fund's
investments with their
market values.

FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

DESTINY II

INVESTMENTS 23 A complete list of the fund's
investments with their
market values.

FINANCIAL STATEMENTS 29 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.

NOTES 33 Notes to the financial
statements.

Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.

Third party marks appearing herein are the property of their
respective owners.

All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.

This report is printed on recycled paper using soy-based inks.

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.

FIDELITY DESTINY PORTFOLIOS: DESTINY I

PERFORMANCE: THE BOTTOM LINE

$10,000 OVER 10 YEARS
Destiny I S&P 500
00006 SP001
1989/03/31 10000.00 10000.00
1989/04/30 10456.30 10519.00
1989/05/31 11098.22 10945.02
1989/06/30 10850.73 10882.63
1989/07/31 11577.73 11865.33
1989/08/31 11891.15 12097.90
1989/09/30 11988.02 12048.29
1989/10/31 11584.39 11768.77
1989/11/30 11640.89 12008.86
1989/12/31 11573.46 12297.07
1990/01/31 10881.11 11471.94
1990/02/28 11111.89 11619.92
1990/03/31 11351.23 11927.85
1990/04/30 10983.68 11629.66
1990/05/31 12197.44 12763.55
1990/06/30 12171.80 12676.75
1990/07/31 11829.89 12636.19
1990/08/31 10618.48 11493.88
1990/09/30 9902.83 10934.13
1990/10/31 9831.26 10887.11
1990/11/30 10672.15 11590.42
1990/12/31 11208.89 11913.79
1991/01/31 12416.55 12433.23
1991/02/28 13275.34 13322.21
1991/03/31 13588.43 13644.60
1991/04/30 13758.40 13677.35
1991/05/31 14581.40 14268.21
1991/06/30 13624.22 13614.73
1991/07/31 14527.73 14249.17
1991/08/31 15020.61 14586.88
1991/09/30 14767.29 14343.28
1991/10/31 14701.62 14535.48
1991/11/30 13800.95 13949.70
1991/12/31 15571.50 15545.54
1992/01/31 15739.79 15256.40
1992/02/29 16313.95 15454.73
1992/03/31 15947.67 15153.36
1992/04/30 16521.83 15598.87
1992/05/31 16660.42 15675.31
1992/06/30 16373.34 15441.74
1992/07/31 17036.59 16073.31
1992/08/31 16584.92 15743.81
1992/09/30 16751.99 15929.59
1992/10/31 16651.75 15985.34
1992/11/30 17453.70 16530.44
1992/12/31 17930.94 16733.76
1993/01/31 18484.66 16874.33
1993/02/28 18543.57 17103.82
1993/03/31 19462.50 17464.71
1993/04/30 19580.31 17042.06
1993/05/31 20134.02 17498.79
1993/06/30 20287.18 17549.54
1993/07/31 20546.36 17479.34
1993/08/31 21254.20 18141.81
1993/09/30 21254.20 18002.11
1993/10/31 22035.79 18374.76
1993/11/30 21897.12 18200.20
1993/12/31 22668.13 18420.42
1994/01/31 24111.01 19046.71
1994/02/28 23746.92 18530.55
1994/03/31 22627.67 17722.62
1994/04/30 23301.92 17949.47
1994/05/31 23477.22 18243.84
1994/06/30 22816.46 17796.86
1994/07/31 23571.61 18380.60
1994/08/31 24636.92 19134.20
1994/09/30 23868.28 18665.42
1994/10/31 24394.19 19085.39
1994/11/30 23558.13 18390.30
1994/12/31 23672.17 18663.03
1995/01/31 23899.01 19146.96
1995/02/28 24709.15 19893.12
1995/03/31 25405.86 20480.16
1995/04/30 26361.82 21083.30
1995/05/31 27593.23 21926.00
1995/06/30 28532.99 22435.34
1995/07/31 29553.76 23179.30
1995/08/31 29813.00 23237.48
1995/09/30 30428.71 24218.10
1995/10/31 30671.75 24131.64
1995/11/30 31546.69 25191.02
1995/12/31 32419.09 25676.20
1996/01/31 33024.57 26550.22
1996/02/29 32903.48 26796.34
1996/03/31 32816.98 27054.39
1996/04/30 33439.76 27453.17
1996/05/31 34166.33 28161.19
1996/06/30 34408.53 28268.48
1996/07/31 33353.26 27019.58
1996/08/31 33630.05 27589.42
1996/09/30 35308.10 29142.15
1996/10/31 36657.45 29945.89
1996/11/30 39442.65 32209.51
1996/12/31 38431.43 31571.43
1997/01/31 40311.75 33544.02
1997/02/28 40676.30 33807.00
1997/03/31 38584.92 32417.87
1997/04/30 40522.80 34353.22
1997/05/31 43132.23 36444.64
1997/06/30 44513.68 38077.36
1997/07/31 47890.58 41107.18
1997/08/31 46163.76 38804.36
1997/09/30 48120.83 40929.67
1997/10/31 47142.29 39562.62
1997/11/30 48849.93 41393.97
1997/12/31 50316.14 42104.71
1998/01/31 50507.70 42570.39
1998/02/28 53764.20 45640.56
1998/03/31 55509.52 47977.82
1998/04/30 55403.10 48460.47
1998/05/31 54934.84 47627.44
1998/06/30 56339.61 49562.06
1998/07/31 56531.16 49034.23
1998/08/31 49188.07 41944.86
1998/09/30 52316.87 44631.85
1998/10/31 56318.32 48262.20
1998/11/30 59915.37 51187.37
1998/12/31 63212.60 54136.79
1999/01/31 63822.44 56400.79
1999/02/28 60867.05 54647.85
1999/03/31 62438.57 56834.31
IMATRL PRASUN SHR__CHT 19990331 19990409 094116 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Destiny I on March 31, 1989. As the chart shows, by March
31, 1999, the value of the investment would have grown to $62,439 - a
524.39% 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 $56,834 - a 468.34% increase.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS

PERIODS ENDED MARCH 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

DESTINY I 19.35% 12.48% 175.94% 524.39%

S&P 500 (registered trademark) 27.34% 18.46% 220.69% 468.34%

Lipper Growth Funds Average 28.23% 13.56% 158.00% 372.71%

</TABLE>

AVERAGE ANNUAL TOTAL RETURNS

PERIODS ENDED MARCH 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

DESTINY I 12.48% 22.51% 20.10%

$50/month 15-Year Plan -46.23% 18.09% 18.53%

S&P 500 18.46% 26.25% 18.98%

Lipper Growth Funds Average 13.56% 20.36% 16.32%

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 market
capitalization-weighted 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
1989/03/31 10000.00 10000.00
1989/04/30 10578.03 10519.00
1989/05/31 11245.40 10945.02
1989/06/30 10846.03 10882.63
1989/07/31 11497.64 11865.33
1989/08/31 11865.02 12097.90
1989/09/30 11931.68 12048.29
1989/10/31 11542.84 11768.77
1989/11/30 11653.94 12008.86
1989/12/31 11751.23 12297.07
1990/01/31 10987.02 11471.94
1990/02/28 11192.77 11619.92
1990/03/31 11469.06 11927.85
1990/04/30 11116.35 11629.66
1990/05/31 12386.12 12763.55
1990/06/30 12409.63 12676.75
1990/07/31 11968.74 12636.19
1990/08/31 10673.76 11493.88
1990/09/30 9877.12 10934.13
1990/10/31 9805.24 10887.11
1990/11/30 10811.52 11590.42
1990/12/31 11454.81 11913.79
1991/01/31 12740.98 12433.23
1991/02/28 13737.32 13322.21
1991/03/31 14172.08 13644.60
1991/04/30 14449.85 13677.35
1991/05/31 15271.07 14268.21
1991/06/30 14190.20 13614.73
1991/07/31 15186.53 14249.17
1991/08/31 15783.27 14586.88
1991/09/30 15513.75 14343.28
1991/10/31 15448.02 14535.48
1991/11/30 14448.83 13949.70
1991/12/31 16199.88 15545.54
1992/01/31 16511.95 15256.40
1992/02/29 17205.44 15454.73
1992/03/31 16678.39 15153.36
1992/04/30 17240.11 15598.87
1992/05/31 17503.64 15675.31
1992/06/30 17115.29 15441.74
1992/07/31 17801.84 16073.31
1992/08/31 17285.36 15743.81
1992/09/30 17338.71 15929.59
1992/10/31 17331.09 15985.34
1992/11/30 18199.93 16530.44
1992/12/31 18708.18 16733.76
1993/01/31 19354.12 16874.33
1993/02/28 19401.97 17103.82
1993/03/31 20215.37 17464.71
1993/04/30 20215.37 17042.06
1993/05/31 20917.12 17498.79
1993/06/30 21100.53 17549.54
1993/07/31 21299.90 17479.34
1993/08/31 22082.09 18141.81
1993/09/30 22140.18 18002.11
1993/10/31 22970.02 18374.76
1993/11/30 22878.74 18200.20
1993/12/31 23723.13 18420.42
1994/01/31 25217.30 19046.71
1994/02/28 24911.47 18530.55
1994/03/31 23696.92 17722.62
1994/04/30 24404.68 17949.47
1994/05/31 24579.44 18243.84
1994/06/30 23854.20 17796.86
1994/07/31 24631.86 18380.60
1994/08/31 25759.04 19134.20
1994/09/30 24946.42 18665.42
1994/10/31 25488.17 19085.39
1994/11/30 24675.55 18390.30
1994/12/31 24785.40 18663.03
1995/01/31 25045.04 19146.96
1995/02/28 25863.89 19893.12
1995/03/31 26562.92 20480.16
1995/04/30 27531.57 21083.30
1995/05/31 28769.84 21926.00
1995/06/30 29738.49 22435.34
1995/07/31 30757.06 23179.30
1995/08/31 31026.69 23237.48
1995/09/30 31675.78 24218.10
1995/10/31 31935.42 24131.64
1995/11/30 32804.21 25191.02
1995/12/31 33698.32 25676.20
1996/01/31 34328.20 26550.22
1996/02/29 34181.23 26796.34
1996/03/31 34065.75 27054.39
1996/04/30 34695.63 27453.17
1996/05/31 35419.98 28161.19
1996/06/30 35650.94 28268.48
1996/07/31 34611.64 27019.58
1996/08/31 34895.09 27589.42
1996/09/30 36564.26 29142.15
1996/10/31 37887.00 29945.89
1996/11/30 40752.93 32209.51
1996/12/31 39716.35 31571.43
1997/01/31 41597.83 33544.02
1997/02/28 42042.54 33807.00
1997/03/31 39921.60 32417.87
1997/04/30 41803.08 34353.22
1997/05/31 44402.95 36444.64
1997/06/30 45737.09 38077.36
1997/07/31 49123.75 41107.18
1997/08/31 47310.69 38804.36
1997/09/30 49260.59 40929.67
1997/10/31 48268.53 39562.62
1997/11/30 50047.39 41393.97
1997/12/31 51488.10 42104.71
1998/01/31 51674.79 42570.39
1998/02/28 55109.82 45640.56
1998/03/31 56864.67 47977.82
1998/04/30 56565.97 48460.47
1998/05/31 55856.57 47627.44
1998/06/30 58955.56 49562.06
1998/07/31 59440.94 49034.23
1998/08/31 50255.97 41944.86
1998/09/30 52533.55 44631.85
1998/10/31 56640.65 48262.20
1998/11/30 60449.05 51187.37
1998/12/31 65962.05 54136.79
1999/01/31 68322.80 56400.79
1999/02/28 66610.10 54647.85
1999/03/31 69480.03 56834.31
IMATRL PRASUN SHR__CHT 19990331 19990409 094229 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Destiny II on March 31, 1989. As the chart shows, by March
31, 1999, the value of the investment would have grown to $69,480 - a
594.80% 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 $56,834 - a 468.34% increase.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS

PERIODS ENDED MARCH 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

Destiny II 32.26% 22.18% 193.20% 594.80%

S&P 500 27.34% 18.46% 220.69% 468.34%

Lipper Growth Funds Average 28.23% 13.56% 158.00% 372.71%

</TABLE>

AVERAGE ANNUAL TOTAL RETURNS

PERIODS ENDED MARCH 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS

Destiny II 22.18% 24.00% 21.39%

$50/month 15-Year Plan -41.60% 19.53% 19.80%

S&P 500 18.46% 26.25% 18.98%

Lipper Growth Funds Average 13.56% 20.36% 16.32%

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 market
capitalization-weighted 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 I

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
On the heels of a dramatic late summer slump,
stocks forged a spirited comeback over the
six-month period that ended March 31, 1999. In a
time where volatility was the rule, the Standard &
Poor's 500 Index posted an impressive 27.34%
return. Similarly, the NASDAQ, seemingly bent on
re-writing the record books, returned 45.57% for
the same period. Amid the tumult in global
economies early in the period, investors fled
stocks, seeking refuge in U.S. Treasuries and
driving their yields to a 30-year low. In the fall, to
inoculate the U.S. economy against the global
contagion, the Federal Reserve Board provided
faltering domestic equity markets with the
stimulus they needed, in the form of three 0.25%
interest-rate cuts. Led by high-flying Internet and
technology issues, and buoyed by strong
consumer spending entering the new year, the S&P
500, Dow Jones Industrial Average and NASDAQ
soared to record highs in January. Investors,
although steadied by the belief that the U.S.
economy was less inflation prone and unlikely to
experience a dramatic downturn, were still not
convinced. This uncertainty fueled the volatility in
the marketplace over the last two months of the
period as many cautious investors chose to take
profits. Others migrated toward the perceived
predictability of large-company stocks, which
helped the Dow pass the 10,000-mark en route to
closing out the period up 25.80%.

(photograph of George A. Vanderheiden)

An interview with
George A. Vanderheiden,
Portfolio Manager of
Fidelity Destiny I Portfolio

Q. HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS, GEORGE?

A. It was a disappointing period overall. Although the fund returned
19.35% for the six months ending March 31, 1999, it underperformed
both its benchmark and its peers. During the period, the Standard &
Poor's 500 Index returned 27.34%, while the growth funds average, as
measured by Lipper Inc., was 28.23%. The fund also underperformed its
benchmark and peer group over the past 12 months. For the one-year
period ending March 31, 1999, the fund's return was 12.48%, while the
S&P 500 and the growth funds average returned 18.46% and 13.56%,
respectively.

Q. WHAT WERE SOME OF THE REASONS WHY IT PROVED TO BE SUCH A
CHALLENGING PERIOD FOR THE FUND?

A. Probably the main cause for the fund's underperformance was that
over the course of the period I tilted the fund toward value stocks.
Stocks with value characteristics can be defined as those that are
misperceived or mispriced by the market, where the company's
fundamentals argue for a higher valuation. This shift is not a new
approach for me. I've used the approach of tilting the fund toward
value when I thought value was attractive relative to growth, just as
I've tilted toward growth at the expense of value. I've used this
approach many times during the 19 years that I've been running the
fund. In this case, however, perhaps my prediction was a bit early.
Over the past six months - particularly since the October low - it
remained a growth-oriented market. Growth was generally the only thing
that worked. Small-cap stocks didn't work. Value didn't work. It was
just a very narrow, one-sided market. To illustrate, 77% of the S&P
500's return in the first quarter of 1999 came from its top 10 stocks.
But I still think that value is the most attractive part of the
market, as I'll discuss in more detail later in this report in the
callout box (SEE PAGE 8).

Q. WHAT ELSE CONTRIBUTED TO THE FUND'S UNDERPERFORMANCE?

A. The fund's underweighting in large-cap technology positions
relative to the S&P 500 was certainly a big factor. Technology drove
the index throughout the period. In fact, nine of the top-10
best-performing stocks in the S&P 500 for 1998 were technology stocks.
But I think technology has seen its peak. During the period, I felt
that tech valuations were already very stretched - meaning that their
values were inflated. And I also believe that the bump we've seen in
capital spending to resolve Y2K issues is going to go away. Once these
Year 2000 issues have been resolved, I think you'll see a flattening
in sales for much of the technology sector.

Q. WHAT WERE SOME OF THE BRIGHT SPOTS FOR THE FUND, GEORGE?

A. Strong stock selection in the retail and utilities sectors
contributed a great deal to the fund's overall return. In the retail
sector, Wal-Mart continued to shine. Its domestic focus and strong
earnings gains made it an attractive holding during downturns and
disruptions in foreign markets. Home Depot was another retail pick
that contributed well to fund performance, for the same reasons as
Wal-Mart. One example of a utility stock that has had a persistent run
of outstanding performance is U.K.-based telecommunications company
Vodafone, which benefited from solid earnings growth. Technology
holding Solectron, a regular in the portfolio for several years, also
performed well. The company is a contract electronic manufacturer -
meaning technology companies outsource their manufacturing to
Solectron. This stock has gone up 10-fold since I first started buying
it in 1992.

Q. THE FUND TYPICALLY OWNS A SIZABLE PERCENTAGE OF FIXED-INCOME
INVESTMENTS. HOW DID THE BOND PORTION OF THE PORTFOLIO FARE OVER THE
PAST SIX MONTHS?

A. Having any sizable stake in bonds over the last six months - as the
fund did - hurt performance relative to the S&P 500. Earlier in the
period, I began to sell bonds when yields dropped below 5% and prices
were at high levels - to the fund's benefit - reducing the portfolio's
bond exposure from about 13% to approximately 8% by the end of the
period. After the aggressive easing of monetary policy by the Federal
Reserve Board in the fall of 1998, equity markets skyrocketed to new
highs. Given the attractive returns of stocks, fixed-income
investments paled in comparison. This caused bond prices to drop and
yields to increase before I could reduce the fund's stake further.
That said, I do think the environment for bonds is once again starting
to look attractive. Japanese selling of U.S. Treasuries has subsided -
in fact, the Japanese are now major buyers - while the supply of
Treasuries is poised to shrink as the U.S. government retires
additional debt. Those are indications of an impending positive
supply/demand balance in the bond market.

Q. WHICH STOCKS TURNED IN A DISAPPOINTING
SIX-MONTH PERFORMANCE?

A. Philip Morris was the largest relative detractor to performance.
Its stock was punished in light of the company's ongoing litigation
battles. However, its operating profits were still tremendous and I
believe its price has bottomed. Fannie Mae and Freddie Mac, which help
provide housing-related financial services for low and moderate income
families, both underperformed expectations. A coalition of big banks
and mortgage companies are lobbying in Washington to limit the fee
income that Fannie Mae and Freddie Mac receive from technology
developments that immediately tell whether an applicant is eligible
for a loan. This process used to take days, but now it can be done in
mere minutes, which has brought the cost down astronomically. This
puts a small bank - with access to this new technology - on the same
playing field as a big bank, and the big banks don't like it. Although
I don't think this coalition will succeed, it has caused nervous
investor sentiment around the stock, but I remain bullish about Fannie
Mae's and Freddie Mac's prospects.

Q. WHAT IS YOUR OUTLOOK FOR THE FUND DURING THE NEXT FEW MONTHS,
GEORGE?

A. As I mentioned earlier, I believe value stocks - such as the
economically sensitive cyclicals - are ready to make a move. The world
economy appears to have improved, the U.S. economy continues to grow,
and we're starting to see pricing power - the ability to raise prices
- - across cyclical industries such as airlines, homebuilders, chemicals
and several others. This environment bodes well for the future of
value, and that's where I'll be focusing my investment strategy in the
immediate future.

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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.

(checkmark)FUND FACTS

GOAL: seeks capital growth

START DATE: July 10, 1970

SIZE: as of March 31, 1999,
more than $7.1 billion

MANAGER: George Vanderheiden, since 1980;
manager, Fidelity Destiny II Fund, 1985-1998;
joined Fidelity in 1971

GEORGE VANDERHEIDEN ON HIS SHIFT
FROM GROWTH TO VALUE STOCKS:

"There are a couple of reasons why I'm making a
transition from growth to value. First, when the
corporate earnings outlook is slipping, growth
tends to outperform value. This is because growth
becomes scarcer, so investors lean toward
companies with consistently strong growth
prospects year after year. When earnings get
better, you can find growth in many more places,
not just a narrow band of growth stocks. That's
when value stocks start to rebound, which I feel
is happening now. The rate of earnings growth
bottomed out in the third quarter of 1998, then
improved in the fourth quarter and in the first
quarter of 1999. We had 122 interest-rate cuts in
75 countries since last October. This massive
reflationary effort - the attempt to jump start
global economies - is the bull case for value and
cyclical stocks.

"Over the past three decades, each time we had
shifts from growth to value, they happened right
when we saw the first quarter of improved
earnings. The other indicator of a trend toward
value is increased pricing power - a company's
ability to price their products higher than inflation.
That also translates to increased earnings.
Currently, cyclical industries are gaining pricing
power. If this pricing sticks, these companies can
surprise on the upside, and that's why I've tilted
the fund to be a more value-oriented portfolio."

FIDELITY DESTINY PORTFOLIOS: DESTINY II

FUND TALK: THE MANAGER'S OVERVIEW

(photograph of Beth Terrana)

An interview with
Beth Terrana, Portfolio
Manager of Fidelity
Destiny II Portfolio

Q. HOW DID THE FUND PERFORM, BETH?

A. The fund performed very well during the period. For the six-months
ending March 31, 1999, Destiny II returned 32.26%. This outperformed
both the Standard & Poor's 500 Index and the growth funds average, as
measured by Lipper Inc., which returned 27.34% and 28.23%,
respectively, during the same period. The fund also outperformed its
benchmark and peer group over the past 12 months. For the one-year
period ending March 31, 1999 the fund returned 22.18%, the S&P 500
returned 18.46% and the growth funds average had a 13.56% return.

Q. WHAT'S YOUR TAKE ON THE MARKET VOLATILITY WE'VE SEEN OVER THE PAST
SIX MONTHS?

A. Before the market correction that began last summer, U.S. stocks
were reflecting a very rosy earnings outlook. However, in the third
quarter of 1998, the market intensified its speculation that the
economic turmoil in emerging countries would further slow the already
softening domestic economy, pushing the U.S. into a recession. As one
company after another reported weakening business conditions the stock
market reacted, often violently. On the positive side, many high
quality companies were unfairly penalized and this created a number of
attractive buying opportunities.

Q. GIVEN THE VOLATILE MARKET OF RECENT MONTHS, HOW WAS THE FUND ABLE
TO DELIVER SUCH STRONG PERFORMANCE?

A. The fund's outstanding performance was driven by focusing on
companies with improving financial returns. Stock prices tend to
follow returns, and improving returns generally lead to higher
price/earnings multiples. In a world of slowing corporate profit
growth, historically high valuations and volatile markets, it is
critical to identify companies with improving financial returns. Even
more important, I was successful at following my strategy of hitting
singles and doubles, rather than trying for home runs - because trying
for home runs also means a lot of strike-outs. Consequently, the fund
had few dismal performers. This strategy of avoiding the losers was
particularly effective over the past three months given the narrow
breadth of the market, where the top 10 performers accounted for 77%
of the S&P 500's return.

Q. WHAT WERE SOME OF THE FACTORS BEHIND THE FUND'S OUTPERFORMANCE OF
BOTH ITS BENCHMARK - THE S&P 500 - AND ITS PEER GROUP DURING THE
PERIOD?

A. Destiny II outdistanced the S&P 500 and Lipper peers because of the
fund's stock selection among large, industry-leading companies. Time
Warner, the top contributor during the period, continued to be
rewarded for its improving financial returns. MCI Worldcom and America
Online, both big contributors to performance, benefited from the
increasing penetration of the Internet as a viable medium through
which people and businesses communicate. Advertising conglomerate
Omnicom performed well; having a strong brand identity is crucial to
many companies' success, and Omnicom can help build brand recognition.
General Electric was also a strong-performing holding. GE has
tremendous product lines with dominant share in most of its markets -
attributes that were particularly appealing to nervous investors
concerned with financial turmoil in emerging countries and the lofty
valuation of U.S. equities.

Q. CHASE MANHATTAN AND AMERICAN EXPRESS WERE NEW ENTRIES INTO THE
FUND'S TOP-10 HOLDINGS. DOES THAT MEAN YOU ARE BULLISH ON THE FINANCE
SECTOR IN GENERAL?

A. Not at this time. I actually reduced the fund's exposure to the
finance sector because I was concerned that revenue growth was slowing
in the industry, and it would prove difficult for some of the newly
merged companies to drive down costs. At the same time, I think the
growth of the Internet may either hurt banks' revenue growth or hurt
their pricing. In my opinion, financial products that are currently
sold in branches will increasingly be sold over the Web. Therefore, I
felt the profit dynamics of the industry were deteriorating.
Typically, I don't make sector bets. The fund's sector weights are
almost always an outgrowth of bottom-up stock selection. Finance was
really the only meaningful industry change I made over the six-month
period.

Q. GIVEN YOUR IMPRESSIONS ABOUT THE FINANCE SECTOR, WHAT WAS YOUR
ATTRACTION TO CHASE MANHATTAN AND AMERICAN EXPRESS?

A. Chase Manhattan is a global financial services firm with markedly
improved financial discipline and is poised to continue to take market
share from smaller, less well-capitalized competitors. Even as the
company's earnings declined during the Asian crisis last summer, Chase
Manhattan continued to have a return on equity above the industry
average. The market continues to underestimate the company's earnings
power and growth rate. American Express is another well-managed
business with a strong franchise and accelerating revenue growth. Over
the past few years, it focused on the profitability of its credit card
business and paid less attention to market share erosion. Now American
Express is refocused on both profitability and card growth. Its travel
businesses also performed well.

Q. WHICH STOCKS DID NOT PERFORM AS YOU HOPED?

A. CVS underperformed the market during the period. After its stock
hit an all-time high last summer, the company stopped beating earnings
estimates and improvements in return on investment stalled. There were
also fears about the impact of the Internet on CVS. Many investors
worried that online drug stores would take market share from
traditional drugstore chains. However, I believe people want to speak
to the pharmacist in person. So I'm not sure the consumer has a good
reason to use the Web to fill a prescription. I continue to believe
that strong pharmacy fundamentals will help CVS sustain double-digit
earnings growth in 1999. Tobacco giant Philip Morris also
underperformed, due almost entirely to its ongoing struggle with
litigation. Disney suffered from slowing sales in Asia, from
weaker-than-expected sales at the box-office, and from concerns with
the opening of competing theme parks in the U.S. and the resulting
impact on Disney's park attendance.

Q. WHAT IS YOUR OUTLOOK FOR THE FUND DURING THE NEXT FEW MONTHS?

A. I believe inflation will remain in check and that the U.S. economy
will continue to be robust. Global attention will remain focused on
the U.S. consumer. High employment levels, high personal income and
low interest rates have made U.S. consumers one of the last strengths
in the global economy, so their performance will heavily impact the
direction of many economies. With improving economic and financial
conditions in Asia, Latin America and many other parts of the world,
we may see a broadening in the market. This could result in a move
away from the narrow group of large-cap growth stocks that have been
so dominant in recent years. Whatever the outcome, I will continue to
choose stocks through fundamental, bottom-up analysis.

(checkmark)FUND FACTS

GOAL: seeks capital growth

START DATE: December 30, 1985

SIZE: as of March 31, 1999,
more than $5.2 billion

MANAGER: Beth Terrana, since 1998; manager,
Fidelity Fund, since 1993; joined Fidelity in 1983

BETH TERRANA ON HOW THE INTERNET
BOOM IS CHANGING COMPANIES' BUSINESS MODELS:

"The market tends to focus on the Internet's
obvious beneficiaries, such as America Online and
Amazon.com. What many investors don't focus on
is how the Internet can and will change the nature
of logistics, distribution, employee training and
customer interaction across multiple industries
and business models. Those companies that can
execute well will benefit from improved
productivity and potentially dramatically decreased
costs. This will allow them to reduce prices and
increase market share in their respective
industries, while simultaneously improving their
profitability and asset utilization. The ability to
reduce prices while maintaining profitability will be
critical because the Internet will make pricing
transparent; businesses and consumers will know
what they can buy things for and what everyone
else is selling them for. Consequently, the Internet
may provide a way to completely reinvent historic
business practices for many companies. Within all
industries, the valuation gap between those
companies using the Internet to improve their
financial returns and increase their market share,
and those that are not, may widen. As a portfolio
manager, I have been successful at identifying
companies in the midst of change and assessing
whether their stock prices accurately reflect
their new business conditions. I feel confident I
can help Destiny II shareholders benefit from
these revolutionary changes."

INVESTMENT CHANGES

TOP TEN EQUITY HOLDINGS - DESTINY I

AS OF MARCH 31, 1999 AS OF SEPTEMBER 30, 1998

Fannie Mae Fannie Mae

Philip Morris Companies, Inc. Philip Morris Companies, Inc.

Freddie Mac Fleet Financial Group, Inc.

Fleet Financial Group, Inc. Freddie Mac

Home Depot, Inc. Wal-Mart Stores, Inc.

MCI WorldCom, Inc. Home Depot, Inc.

Vodafone Group PLC sponsored Vodafone Group PLC sponsored
ADR ADR

General Motors Corp. MCI WorldCom, Inc.

Solectron Corp. Columbia/HCA Healthcare Corp.

Wal-Mart Stores, Inc. Solectron Corp.

TOP TEN EQUITY HOLDINGS - DESTINY II

AS OF MARCH 31, 1999 AS OF SEPTEMBER 30, 1998

Time Warner, Inc. Time Warner, Inc.

General Electric Co. General Electric Co.

Microsoft Corp. Fannie Mae

MCI WorldCom, Inc. Microsoft Corp.

Fannie Mae Merck & Co., Inc.

Chase Manhattan Corp. Tyco International Ltd.

American Express Co. Freddie Mac

AT&T Corp. MCI WorldCom, Inc.

Merck & Co., Inc. Wal-Mart Stores, Inc.

Omnicom Group, Inc. CVS Corp.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOP FIVE MARKET SECTORS - DESTINY I

AS OF MARCH 31, 1999 % OF FUND'S INVESTMENTS AS OF SEPTEMBER 30, 1998 % OF FUND'S INVESTMENTS

Finance 21.0% Finance 20.3%

Technology 11.6% Technology 10.6%

Health 10.2% Utilities 9.5%

Retail & Wholesale 9.0% Retail & Wholesale 8.4%

Utilities 8.0% Health 8.4%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOP FIVE MARKET SECTORS - DESTINY II

AS OF MARCH 31, 1999 % OF FUND'S INVESTMENTS AS OF SEPTEMBER 30, 1998 % OF FUND'S INVESTMENTS

Technology 15.6% Finance 17.1%

Finance 13.6% Technology 14.4%

Media & Leisure 12.6% Health 12.0%

Health 10.7% Retail & Wholesale 10.2%

Utilities 10.3% Media & Leisure 9.8%

</TABLE>

FIDELITY DESTINY PORTFOLIOS: DESTINY I

INVESTMENTS MARCH 31, 1999 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 88.2%

SHARES VALUE (NOTE 1)

AEROSPACE & DEFENSE - 0.3%

Boeing Co. 656,100 $ 22,389,413

BASIC INDUSTRIES - 1.5%

CHEMICALS & PLASTICS - 0.7%

Cabot Corp. 461,500 9,806,875

E.I. du Pont de Nemours and 553,800 32,155,013
Co.

Praxair, Inc. 95,800 3,454,788

Raychem Corp. 236,700 5,340,544

50,757,220

IRON & STEEL - 0.1%

Aeroquip-Vickers, Inc. 55,900 3,203,769

PACKAGING & CONTAINERS - 0.7%

Owens-Illinois, Inc. (a) 2,098,300 52,457,500

PAPER & FOREST PRODUCTS - 0.0%

Willamette Industries, Inc. 77,700 2,933,175

TOTAL BASIC INDUSTRIES 109,351,664

CONSTRUCTION & REAL ESTATE -
1.8%

BUILDING MATERIALS - 0.8%

Armstrong World Industries, 117,100 5,291,456
Inc.

Newell Rubbermaid, Inc. 686,625 32,614,688

Owens-Corning 554,700 17,646,394

Sherwin-Williams Co. 130,500 3,670,313

59,222,851

CONSTRUCTION - 0.9%

Centex Corp. 526,600 17,575,275

D.R. Horton, Inc. 504,580 8,451,715

Fleetwood Enterprises, Inc. 365,307 10,456,913

Kaufman & Broad Home Corp. 643,800 14,525,738

Lennar Corp. 496,950 11,119,256

62,128,897

ENGINEERING - 0.1%

Fluor Corp. 213,600 5,767,200

TOTAL CONSTRUCTION & REAL 127,118,948
ESTATE

SHARES VALUE (NOTE 1)

DURABLES - 5.2%

AUTOS, TIRES, & ACCESSORIES -
4.1%

AutoZone, Inc. (a) 306,400 $ 9,306,900

Cummins Engine Co., Inc. 483,400 17,190,913

Dana Corp. 513,300 19,505,400

Delphi Automotive Systems 163,700 2,905,675
Corp. (a)

Discount Auto Parts, Inc. (a) 335,500 7,213,250

Eaton Corp. 190,800 13,642,200

General Motors Corp. 1,694,107 147,175,546

Goodyear Tire & Rubber Co. 274,900 13,693,456

Lear Corp. (a) 484,300 20,673,556

Magna International, Inc. 408,800 23,573,673
Class A

Republic Industries, Inc. (a) 1,724,900 21,345,638

296,226,207

CONSUMER DURABLES - 0.1%

Minnesota Mining & 70,000 4,952,500
Manufacturing Co.

CONSUMER ELECTRONICS - 0.1%

Gemstar International Group 20,000 1,505,000
Ltd. (a)

U.S. Industries, Inc. 97,450 1,601,834

Whirlpool Corp. 95,800 5,209,125

8,315,959

TEXTILES & APPAREL - 0.9%

Burlington Industries, Inc. 1,416,200 9,382,325
(a)

Jones Apparel Group, Inc. (a) 315,000 8,800,313

Liz Claiborne, Inc. 723,400 23,600,925

NIKE, Inc. Class B 54,100 3,120,894

Polo Ralph Lauren Corp. 102,200 2,031,225
Class A (a)

Shaw Industries, Inc. (a) 39,700 734,450

Warnaco Group, Inc. Class A 729,700 18,014,469

65,684,601

TOTAL DURABLES 375,179,267

ENERGY - 6.6%

ENERGY SERVICES - 0.9%

Baker Hughes, Inc. 153,700 3,736,831

Halliburton Co. 688,200 26,495,700

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

ENERGY - CONTINUED

ENERGY SERVICES - CONTINUED

McDermott International, Inc. 574,100 $ 14,531,906

Schlumberger Ltd. 287,500 17,303,906

62,068,343

OIL & GAS - 5.7%

Amerada Hess Corp. 928,100 46,695,031

Apache Corp. 176,600 4,602,638

BP Amoco PLC sponsored ADR 1,046,540 105,635,131

Chevron Corp. 176,700 15,626,906

Cooper Cameron Corp. (a) 315,300 10,680,788

Elf Aquitaine SA sponsored ADR 107,764 7,253,864

Exxon Corp. 873,000 61,601,063

Occidental Petroleum Corp. 1,864,000 33,552,000

Royal Dutch Petroleum Co. 1,044,600 54,319,200
(NY Registry Gilder 1.25)

Tosco Corp. 1,798,900 44,635,206

Total SA:

Class B 67,156 8,193,035

sponsored ADR 135,636 8,273,796

Union Pacific Resources 195,000 2,315,625
Group, Inc.

USX-Marathon Group 159,800 4,394,500

407,778,783

TOTAL ENERGY 469,847,126

FINANCE - 21.0%

BANKS - 3.1%

Bank of Tokyo-Mitsubishi Ltd. 1,691,000 23,220,126

Bank of Tokyo-Mitsubishi Ltd. 117,700 1,655,156
ADR

Bank One Corp. 941,290 51,829,781

BankAmerica Corp. 1,568,100 110,747,063

BankBoston Corp. 299,500 12,972,094

Wells Fargo & Co. 647,800 22,713,488

223,137,708

SHARES VALUE (NOTE 1)

CREDIT & OTHER FINANCE - 3.4%

Associates First Capital 144,200 $ 6,489,000
Corp. Class A

Fleet Financial Group, Inc. 5,926,060 222,968,008

Household International, Inc. 225,500 10,288,438

239,745,446

FEDERAL SPONSORED CREDIT - 9.3%

Fannie Mae 6,081,900 421,171,575

Freddie Mac 4,234,400 241,890,100

663,061,675

INSURANCE - 4.2%

Allmerica Financial Corp. 249,900 13,760,119

Allstate Corp. 548,980 20,346,571

American International Group, 894,175 107,859,859
Inc.

CIGNA Corp. 798,800 66,949,425

Loews Corp. 159,400 11,895,225

MGIC Investment Corp. 1,906,200 66,836,138

PMI Group, Inc. 34,700 1,609,213

Torchmark Corp. 172,600 5,458,475

Travelers Property Casualty 233,100 8,333,325
Corp. Class A

303,048,350

SAVINGS & LOANS - 0.7%

Golden State Bancorp, Inc. 460,000 10,235,000

Golden West Financial Corp. 56,850 5,429,175

Washington Mutual, Inc. 863,400 35,291,475

50,955,650

SECURITIES INDUSTRY - 0.3%

Kokusai Securities Co. Ltd. 86,000 962,390

Nomura Securities Co. Ltd. 2,284,000 23,829,701

24,792,091

TOTAL FINANCE 1,504,740,920

HEALTH - 10.2%

DRUGS & PHARMACEUTICALS - 5.0%

American Home Products Corp. 1,147,600 74,880,900

Amgen, Inc. (a) 1,376,500 103,065,438

Astra AB Class A 1,087,200 24,937,645

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

HEALTH - CONTINUED

DRUGS & PHARMACEUTICALS -
CONTINUED

Lilly (Eli) & Co. 235,700 $ 20,005,038

Merck & Co., Inc. 862,400 69,153,700

Schering-Plough Corp. 1,157,700 64,035,281

356,078,002

MEDICAL EQUIPMENT & SUPPLIES
- - 2.7%

AmeriSource Health Corp. 754,600 25,797,888
Class A (a)

Baxter International, Inc. 199,000 13,134,000

Biomet, Inc. 206,400 8,655,900

Boston Scientific Corp. (a) 227,200 9,215,800

Cardinal Health, Inc. 445,100 29,376,600

Johnson & Johnson 1,093,700 102,466,019

St. Jude Medical, Inc. (a) 194,012 4,729,043

U.S. Surgical Corp. rights 3 0
6/30/00 (a)

193,375,250

MEDICAL FACILITIES MANAGEMENT
- - 2.5%

Columbia/HCA Healthcare Corp. 5,405,187 102,360,729

Humana, Inc. (a) 1,111,100 19,166,475

Tenet Healthcare Corp. (a) 1,626,000 30,792,375

United HealthCare Corp. 544,100 28,633,263

180,952,842

TOTAL HEALTH 730,406,094

INDUSTRIAL MACHINERY &
EQUIPMENT - 3.6%

ELECTRICAL EQUIPMENT - 2.6%

Alcatel Alsthom Compagnie 52,400 5,976,877
Generale d'Electricite SA
(RFD)

Emerson Electric Co. 817,300 43,265,819

General Electric Co. 467,800 51,750,375

Grainger (W.W.), Inc. 268,800 11,575,200

Koninklijke (Royal) Philips 311,900 25,356,651
Electronics NV

Koninklijke (Royal) Philips 589,100 48,563,931
Electronics NV ADR

186,488,853

SHARES VALUE (NOTE 1)

INDUSTRIAL MACHINERY &
EQUIPMENT - 0.9%

Caterpillar, Inc. 173,900 $ 7,988,531

Deere & Co. 75,300 2,908,463

Illinois Tool Works, Inc. 96,200 5,952,375

Tyco International Ltd. 392,100 28,133,175

Ultratech Stepper, Inc. (a) 291,900 4,123,088

United States Filter Corp. (a) 496,700 15,211,438

64,317,070

POLLUTION CONTROL - 0.1%

Waste Management, Inc. 141,400 6,274,625

TOTAL INDUSTRIAL MACHINERY & 257,080,548
EQUIPMENT

MEDIA & LEISURE - 2.5%

BROADCASTING - 0.6%

Cox Communications, Inc. 81,500 6,163,438
Class A (a)

Infinity Broadcasting Corp. 26,300 677,225
Class A (a)

MediaOne Group, Inc. 591,600 37,566,600

44,407,263

ENTERTAINMENT - 0.2%

Cedar Fair LP (depository 35,600 894,450
unit)

Disney (Walt) Co. 144,400 4,494,450

Fox Entertainment Group, Inc. 479,500 13,006,438
(a)

King World Productions, Inc. 19,000 580,688
(a)

18,976,026

LODGING & GAMING - 0.8%

Gtech Holdings Corp. (a) 36,300 884,813

Mirage Resorts, Inc. (a) 779,700 16,568,625

Promus Hotel Corp. (a) 772,500 28,099,688

Sun International Hotels Ltd. 336,900 11,075,588
(a)

56,628,714

PUBLISHING - 0.1%

Reader's Digest Association, 152,100 4,781,644
Inc. Class A (non-vtg.)

Ziff-Davis, Inc. (a) 4,400 83,600

4,865,244

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

MEDIA & LEISURE - CONTINUED

RESTAURANTS - 0.8%

McDonald's Corp. 457,000 $ 20,707,813

Papa John's International, 108,200 4,774,325
Inc. (a)

Tricon Global Restaurants, 23,600 1,657,900
Inc. (a)

Wendy's International, Inc. 1,048,600 29,819,563

56,959,601

TOTAL MEDIA & LEISURE 181,836,848

NONDURABLES - 4.2%

BEVERAGES - 0.1%

PepsiCo, Inc. 168,300 6,595,256

TOBACCO - 4.1%

Philip Morris Companies, Inc. 8,316,300 292,629,806

TOTAL NONDURABLES 299,225,062

RETAIL & WHOLESALE - 9.0%

APPAREL STORES - 0.7%

Gap, Inc. 244,200 16,437,713

Ross Stores, Inc. 139,700 6,120,606

TJX Companies, Inc. 907,900 30,868,600

53,426,919

GENERAL MERCHANDISE STORES -
2.8%

Federated Department Stores, 879,873 35,304,904
Inc. (a)

Saks, Inc. (a) 895,554 23,284,404

Wal-Mart Stores, Inc. 1,529,600 141,010,000

199,599,308

GROCERY STORES - 0.4%

Safeway, Inc. (a) 537,300 27,570,206

RETAIL & WHOLESALE,
MISCELLANEOUS - 5.1%

Circuit City Stores, Inc. - 670,000 51,338,750
Circuit City Group

Home Depot, Inc. 2,669,500 166,176,375

Lowe's Companies, Inc. 1,757,200 106,310,600

Office Depot, Inc. (a) 713,900 26,280,444

SHARES VALUE (NOTE 1)

Officemax, Inc. (a) 539,850 $ 4,656,206

Staples, Inc. (a) 411,075 13,514,091

368,276,466

TOTAL RETAIL & WHOLESALE 648,872,899

SERVICES - 0.5%

ADVERTISING - 0.3%

Interpublic Group of 89,250 6,950,344
Companies, Inc.

Omnicom Group, Inc. 59,000 4,716,313

Young & Rubicam, Inc. (a) 162,700 6,630,025

18,296,682

SERVICES - 0.2%

Service Corp. International 1,018,400 14,512,200

TOTAL SERVICES 32,808,882

TECHNOLOGY - 11.6%

COMPUTER SERVICES & SOFTWARE
- - 3.5%

Autobytel.com, Inc. (a) 3,300 138,188

Automatic Data Processing, 578,000 23,914,750
Inc.

Autoweb.com, Inc. (a) 2,500 89,063

Black Box Corp. (a) 167,200 5,183,200

BMC Software, Inc. 544,500 20,180,531

Cadence Design Systems, Inc. 76,900 1,980,175
(a)

Ceridian Corp. (a) 178,400 6,522,750

Compuware Corp. (a) 1,100,000 26,262,500

Critical Path, Inc. (a) 1,700 130,900

DST Systems, Inc. (a) 46,600 2,798,913

Electronics for Imaging, Inc. 283,200 11,044,800
(a)

First Data Corp. 604,200 25,829,550

IMS Health, Inc. 308,600 10,222,375

Microsoft Corp. (a) 969,000 86,846,625

OneMain.com, Inc. (a) 6,400 232,000

Oracle Corp. (a) 454,325 11,982,822

Policy Management Systems 663,800 20,328,875
Corp. (a)

Priceline.com, Inc. (a) 3,000 248,625

253,936,642

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

TECHNOLOGY - CONTINUED

COMPUTERS & OFFICE EQUIPMENT
- - 1.9%

Compaq Computer Corp. 886,800 $ 28,100,475

Hewlett-Packard Co. 46,100 3,126,156

Ingram Micro, Inc. Class A (a) 98,600 2,249,313

International Business 250,700 44,436,575
Machines Corp.

SCI Systems, Inc. (a) 1,333,800 39,513,825

Tech Data Corp. (a) 862,400 19,781,300

137,207,644

ELECTRONIC INSTRUMENTS - 1.0%

Applied Materials, Inc. (a) 337,400 20,813,363

Cognex Corp. (a) 122,800 2,908,825

KLA-Tencor Corp. (a) 159,200 7,731,150

LAM Research Corp. (a) 620,000 17,980,000

Novellus Systems, Inc. (a) 98,800 5,446,350

Thermo Electron Corp. (a) 849,900 11,526,769

Varian Associates, Inc. 35,700 1,383,375

67,789,832

ELECTRONICS - 5.2%

Altera Corp. (a) 127,900 7,610,050

AMP, Inc. 255,309 13,706,902

Analog Devices, Inc. (a) 97,400 2,897,650

Conexant Systems, Inc. (a) 96,900 2,682,919

Etec Systems, Inc. (a) 97,800 2,878,988

Flextronics International (a) 34,400 1,754,400

Intel Corp. 259,600 30,924,850

International Rectifier Corp. 253,600 1,775,200
(a)

Methode Electronics, Inc. 1,304,200 14,509,225
Class A

Micrel, Inc. (a) 83,500 4,180,219

Microchip Technology, Inc. (a) 455,100 15,757,838

Micron Technology, Inc. (a) 1,257,000 60,650,250

Molex, Inc. Class A 477,981 12,367,758

Motorola, Inc. 498,000 36,478,500

Solectron Corp. (a) 2,965,100 143,992,669

Speedfam International, Inc. 36,600 439,200
(a)

SHARES VALUE (NOTE 1)

Thomas & Betts Corp. 448,300 $ 16,839,269

Vishay Intertechnology, Inc. 51,925 756,158

370,202,045

TOTAL TECHNOLOGY 829,136,163

TRANSPORTATION - 2.2%

AIR TRANSPORTATION - 1.7%

Alaska Air Group, Inc. (a) 103,600 4,921,000

AMR Corp. (a) 1,034,900 60,606,331

Continental Airlines, Inc. 78,000 2,964,000
Class B (a)

Delta Air Lines, Inc. 569,800 39,601,100

Northwest Airlines Corp. 95,900 2,667,219
Class A (a)

UAL Corp. (a) 122,100 9,493,275

US Airways Group, Inc. (a) 61,000 2,977,563

123,230,488

RAILROADS - 0.3%

Burlington Northern Santa Fe 405,100 13,317,663
Corp.

CSX Corp. 305,600 11,899,300

25,216,963

TRUCKING & FREIGHT - 0.2%

Airborne Freight Corp. 392,400 12,213,450

TOTAL TRANSPORTATION 160,660,901

UTILITIES - 8.0%

CELLULAR - 2.2%

AirTouch Communications, Inc. 50,400 4,869,900
(a)

Vodafone Group PLC sponsored 827,480 155,359,370
ADR

160,229,270

ELECTRIC UTILITY - 0.2%

Duke Energy Corp. 72,200 3,943,925

Niagara Mohawk Holdings, Inc. 98,700 1,326,281
(a)

PG&E Corp. 210,326 6,533,251

11,803,457

GAS - 0.1%

Enron Corp. 95,500 6,135,875

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

UTILITIES - CONTINUED

TELEPHONE SERVICES - 5.5%

Ameritech Corp. 175,200 $ 10,139,700

AT&T Corp. 485,719 38,766,448

AT&T Corp. (Liberty Media 854,546 44,970,483
Group) Class A (a)

Bell Atlantic Corp. 641,822 33,174,175

BellSouth Corp. 616,500 24,698,531

MCI WorldCom, Inc. (a) 1,787,478 158,303,520

SBC Communications, Inc. 732,100 34,500,213

Sprint Corp. (FON Group) 487,400 47,826,125

392,379,195

TOTAL UTILITIES 570,547,797

TOTAL COMMON STOCKS 6,319,202,532
(Cost $3,755,572,892)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -
8.0%

MOODY'S RATINGS PRINCIPAL AMOUNT

8.125% 8/15/19 Aaa $ 401,000,000 504,947,198

stripped principal:

0% 8/15/20 Aaa 175,000,000 48,492,500

0% 8/15/21 Aaa 65,000,000 17,054,050

TOTAL U.S. TREASURY OBLIGATIONS 570,493,748
(Cost $480,407,521)

CASH EQUIVALENTS - 3.8%

Taxable Central Cash Fund (b) 274,029,331 274,029,331
(Cost $274,029,331)

TOTAL INVESTMENT IN $ 7,163,725,611
SECURITIES - 100%
(Cost $4,510,009,744)
</TABLE>

LEGEND

(a) Non-income producing

(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.86%. 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, 1999, the aggregate cost of investment securities for
income tax purposes was $4,512,395,805. Net unrealized appreciation
aggregated $2,651,329,806, of which $2,927,366,211 related to
appreciated investment securities and $276,036,405 related to
depreciated investment securities.

FIDELITY DESTINY PORTFOLIOS: DESTINY I

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999 (UNAUDITED)

ASSETS

Investment in securities, at $ 7,163,725,611
value (cost $4,510,009,744)
- - See accompanying schedule

Receivable for investments 29,052,832
sold

Receivable for fund shares 929,603
sold

Dividends receivable 11,738,793

Interest receivable 5,037,028

Other receivables 531,223

TOTAL ASSETS 7,211,015,090

LIABILITIES

Payable for investments $ 24,214,033
purchased

Payable for fund shares 2,571,187
redeemed

Accrued management fee 1,762,515

Other payables and accrued 102,795
expenses

TOTAL LIABILITIES 28,650,530

NET ASSETS $ 7,182,364,560

Net Assets consist of:

Paid in capital $ 4,006,227,506

Undistributed net investment 29,286,992
income

Accumulated undistributed net 493,128,087
realized gain (loss) on
investments and foreign
currency transactions

Net unrealized appreciation 2,653,721,975
(depreciation) on
investments and assets and
liabilities in foreign
currencies

NET ASSETS, for 269,838,319 $ 7,182,364,560
shares outstanding

NET ASSET VALUE, offering $26.62
price and redemption price
per share ($7,182,364,560
(divided by) 269,838,319
shares)

STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31,
1999 (UNAUDITED)

INVESTMENT INCOME $ 37,207,590
Dividends

Interest 25,825,372

TOTAL INCOME 63,032,962

EXPENSES

Management fee Basic fee $ 15,975,638

Performance adjustment (5,604,329)

Transfer agent fees 247,846

Accounting fees and expenses 449,652

Non-interested trustees' 19,838
compensation

Custodian fees and expenses 89,651

Registration fees 18,516

Audit 20,118

Legal 19,302

Miscellaneous 18,412

Total expenses before 11,254,644
reductions

Expense reductions (372,016) 10,882,628

NET INVESTMENT INCOME 52,150,334

REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:

Investment securities 568,379,826

Foreign currency transactions 44,118 568,423,944

Change in net unrealized
appreciation (depreciation)
on:

Investment securities 571,776,087

Assets and liabilities in (25,558) 571,750,529
foreign currencies

NET GAIN (LOSS) 1,140,174,473

NET INCREASE (DECREASE) IN $ 1,192,324,807
NET ASSETS RESULTING FROM
OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MARCH 31, YEAR ENDED SEPTEMBER 30, 1998
1999 (UNAUDITED)

INCREASE (DECREASE) IN NET
ASSETS

Operations Net investment $ 52,150,334 $ 109,475,765
income

Net realized gain (loss) 568,423,944 517,543,833

Change in net unrealized 571,750,529 (106,149,070)
appreciation (depreciation)

NET INCREASE (DECREASE) IN 1,192,324,807 520,870,528
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (105,472,897) (111,209,839)
From net investment income

From net realized gain (544,915,685) (480,404,897)

TOTAL DISTRIBUTIONS (650,388,582) (591,614,736)

Share transactions Net 155,485,173 194,919,194
proceeds from sales of shares

Reinvestment of distributions 575,606,765 531,084,059

Cost of shares redeemed (296,722,098) (409,942,772)

NET INCREASE (DECREASE) IN 434,369,840 316,060,481
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) 976,306,065 245,316,273
IN NET ASSETS

NET ASSETS

Beginning of period 6,206,058,495 5,960,742,222

End of period (including $ 7,182,364,560 $ 6,206,058,495
undistributed net investment
income of $29,286,992 and
$85,475,956, respectively)

OTHER INFORMATION
Shares

Sold 5,863,583 7,674,934

Issued in reinvestment of 22,670,607 23,221,864
distributions

Redeemed (11,148,827) (16,076,270)

Net increase (decrease) 17,385,363 14,820,528

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED MARCH 31, 1999 YEARS ENDED SEPTEMBER 30,

(UNAUDITED) 1998 1997 1996 1995 1994

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 24.58 $ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86
period

Income from Investment
Operations

Net investment income .20 D .44 D .49 D .45 .41 .30

Net realized and unrealized 4.43 1.56 6.36 2.42 3.54 1.69
gain (loss)

Total from investment 4.63 2.00 6.85 2.87 3.95 1.99
operations

Less Distributions

From net investment income (.42) (.47) (.45) (.43) (.34) (.11)

From net realized gain (2.17) (2.03) (1.73) (.81) (2.53) (1.04)

Total distributions (2.59) (2.50) (2.18) (1.24) (2.87) (1.15)

Net asset value, end of period $ 26.62 $ 24.58 $ 25.08 $ 20.41 $ 18.78 $ 17.70

TOTAL RETURN B, C 19.35% 8.72% 36.29% 16.04% 27.49% 12.30%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (in $ 7,182 $ 6,206 $ 5,961 $ 4,565 $ 4,053 $ 3,273
millions)

Ratio of expenses to average .32% A .33% .39% .65% .68% .70%
net assets

Ratio of expenses to average .31% A, E .33% .38% E .65% .68% .70%
net assets after expense
reductions

Ratio of net investment 1.50% A 1.71% 2.20% 2.40% 2.35% 1.69%
income to average net assets

Portfolio turnover rate 43% A 27% 32% 42% 55% 77%

</TABLE>

A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS 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.

FIDELITY DESTINY PORTFOLIOS: DESTINY II

INVESTMENTS MARCH 31, 1999 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 95.6%

SHARES VALUE (NOTE 1)

AEROSPACE & DEFENSE - 0.9%

AEROSPACE & DEFENSE - 0.7%

Gulfstream Aerospace Corp. (a) 102,100 $ 4,428,588

Textron, Inc. 435,100 33,665,863

38,094,451

SHIP BUILDING & REPAIR - 0.2%

General Dynamics Corp. 150,100 9,643,925

TOTAL AEROSPACE & DEFENSE 47,738,376

BASIC INDUSTRIES - 0.7%

CHEMICALS & PLASTICS - 0.2%

E.I. du Pont de Nemours and 47,400 2,752,163
Co.

Praxair, Inc. 274,100 9,884,731

12,636,894

METALS & MINING - 0.2%

Alcoa, Inc. 217,800 8,970,638

PACKAGING & CONTAINERS - 0.3%

Corning, Inc. 236,100 14,166,000

TOTAL BASIC INDUSTRIES 35,773,532

CONSTRUCTION & REAL ESTATE -
1.7%

BUILDING MATERIALS - 1.4%

Masco Corp. 1,511,500 42,699,875

Newell Rubbermaid, Inc. 602,268 28,607,730

71,307,605

REAL ESTATE INVESTMENT TRUSTS
- - 0.3%

Duke Realty Investments, Inc. 368,900 7,931,350

Equity Residential Properties 224,100 9,244,125
Trust (SBI)

17,175,475

TOTAL CONSTRUCTION & REAL 88,483,080
ESTATE

SHARES VALUE (NOTE 1)

DURABLES - 1.9%

AUTOS, TIRES, & ACCESSORIES -
1.2%

Danaher Corp. 278,700 $ 14,562,075

Ford Motor Co. 460,600 26,139,050

General Motors Corp. 276,000 23,977,500

64,678,625

CONSUMER DURABLES - 0.2%

Minnesota Mining & 138,400 9,791,800
Manufacturing Co.

CONSUMER ELECTRONICS - 0.4%

Black & Decker Corp. 274,200 15,200,963

Maytag Corp. 106,600 6,435,975

21,636,938

HOME FURNISHINGS - 0.1%

Leggett & Platt, Inc. 197,200 3,944,000

TOTAL DURABLES 100,051,363

ENERGY - 4.6%

ENERGY SERVICES - 1.2%

Halliburton Co. 865,400 33,317,900

Schlumberger Ltd. 471,900 28,402,481

61,720,381

OIL & GAS - 3.4%

BP Amoco PLC sponsored ADR 418,006 42,192,481

Chevron Corp. 218,100 19,288,219

Exxon Corp. 724,600 51,129,588

Mobil Corp. 312,400 27,491,200

Royal Dutch Petroleum Co. (NY 414,800 21,569,600
Registry Gilder 1.25)

Texaco, Inc. 208,400 11,826,700

USX-Marathon Group 321,700 8,846,750

182,344,538

TOTAL ENERGY 244,064,919

FINANCE - 13.2%

BANKS - 4.3%

Bank of New York Co., Inc. 1,049,640 37,721,438

Bank One Corp. 567,000 31,220,438

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

FINANCE - CONTINUED

BANKS - CONTINUED

BankBoston Corp. 357,400 $ 15,479,888

Chase Manhattan Corp. 1,231,500 100,136,344

U.S. Bancorp 927,400 31,589,563

Wells Fargo & Co. 385,500 13,516,594

229,664,265

CREDIT & OTHER FINANCE - 3.9%

American Express Co. 851,300 100,027,750

Associates First Capital 679,600 30,582,000
Corp. Class A

Citigroup, Inc. 1,208,300 77,180,163

207,789,913

FEDERAL SPONSORED CREDIT - 3.5%

Fannie Mae 1,514,100 104,851,425

Freddie Mac 1,354,100 77,352,963

182,204,388

INSURANCE - 1.4%

AFLAC, Inc. 30,100 1,638,569

Allmerica Financial Corp. 134,600 7,411,413

American International Group, 473,337 57,096,276
Inc.

Hartford Financial Services 49,100 2,789,494
Group, Inc.

MBIA, Inc. 54,800 3,178,400

72,114,152

SECURITIES INDUSTRY - 0.1%

E Trade Group, Inc. (a) 109,800 6,402,713

TOTAL FINANCE 698,175,431

HEALTH - 10.6%

DRUGS & PHARMACEUTICALS - 6.8%

Allergan, Inc. 44,700 3,928,013

American Home Products Corp. 623,300 40,670,325

Amgen, Inc. (a) 470,200 35,206,225

Biogen, Inc. (a) 157,700 18,027,081

Bristol-Myers Squibb Co. 1,012,300 65,103,544

Elan Corp. PLC sponsored ADR 65,400 4,561,650
(a)

Lilly (Eli) & Co. 426,700 36,216,163

SHARES VALUE (NOTE 1)

Merck & Co., Inc. 1,117,500 $ 89,609,531

Schering-Plough Corp. 1,054,200 58,310,438

Warner-Lambert Co. 146,800 9,716,325

361,349,295

MEDICAL EQUIPMENT & SUPPLIES
- - 3.8%

Abbott Laboratories 166,800 7,808,325

Baxter International, Inc. 46,800 3,088,800

Becton, Dickinson & Co. 446,400 17,102,700

Boston Scientific Corp. (a) 558,100 22,637,931

Cardinal Health, Inc. 775,454 51,179,964

Guidant Corp. 472,600 28,592,300

Johnson & Johnson 594,900 55,734,694

Medtronic, Inc. 176,000 12,628,000

Stryker Corp. 31,900 1,608,956

U.S. Surgical Corp. rights 1 0
6/30/00 (a)

200,381,670

TOTAL HEALTH 561,730,965

INDUSTRIAL MACHINERY &
EQUIPMENT - 6.1%

ELECTRICAL EQUIPMENT - 3.9%

Emerson Electric Co. 155,100 8,210,606

General Electric Co. 1,787,900 197,786,438

Honeywell, Inc. 29,900 2,266,794

208,263,838

INDUSTRIAL MACHINERY &
EQUIPMENT - 2.2%

Deere & Co. 77,000 2,974,125

Dover Corp. 211,700 6,959,638

Illinois Tool Works, Inc. 375,600 23,240,250

Ingersoll-Rand Co. 344,800 17,110,700

Stanley Works 205,100 5,255,688

Tyco International Ltd. 846,300 60,722,025

116,262,426

TOTAL INDUSTRIAL MACHINERY & 324,526,264
EQUIPMENT

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

MEDIA & LEISURE - 12.6%

BROADCASTING - 6.8%

CBS Corp. 894,700 $ 36,626,781

Clear Channel Communications, 354,700 23,787,069
Inc. (a)

Comcast Corp. Class A 747,300 47,033,194
(special)

Cox Communications, Inc. 48,500 3,667,813
Class A (a)

Time Warner, Inc. 3,340,803 237,405,790

USA Networks, Inc. (a) 370,900 13,282,856

361,803,503

ENTERTAINMENT - 2.3%

Carnival Corp. 117,000 5,681,813

Disney (Walt) Co. 901,600 28,062,300

Fox Entertainment Group, Inc. 1,042,800 28,285,950
(a)

News Corp. Ltd. sponsored ADR 89,500 2,461,250
(ltd. vtg.)

Viacom, Inc.:

Class A (a) 66,400 5,531,950

Class B (non-vtg.) (a) 621,700 52,183,944

122,207,207

PUBLISHING - 1.6%

Harcourt General, Inc. 361,000 15,996,813

McGraw-Hill Companies, Inc. 1,134,600 61,835,700

Meredith Corp. 222,600 6,997,988

Reader's Digest Association, 43,200 1,358,100
Inc. Class A (non-vtg.)

86,188,601

RESTAURANTS - 1.9%

Marriott International, Inc. 56,500 1,899,813
Class A

McDonald's Corp. 1,358,300 61,547,969

Tricon Global Restaurants, 526,700 37,000,675
Inc. (a)

100,448,457

TOTAL MEDIA & LEISURE 670,647,768

NONDURABLES - 4.5%

BEVERAGES - 0.3%

Coca-Cola Co. (The) 306,400 18,805,300

FOODS - 0.6%

Dean Foods Co. 252,300 8,988,188

SHARES VALUE (NOTE 1)

Heinz (H.J.) Co. 191,700 $ 9,081,788

Keebler Foods Co. (a) 229,100 8,362,150

Nabisco Holdings Corp. Class A 76,300 3,171,219

29,603,345

HOUSEHOLD PRODUCTS - 2.6%

Avon Products, Inc. 960,000 45,180,000

Clorox Co. 301,133 35,289,023

Colgate-Palmolive Co. 217,400 20,000,800

Procter & Gamble Co. 292,600 28,656,513

Unilever NV (NY shares) 135,800 9,022,213

138,148,549

TOBACCO - 1.0%

Philip Morris Companies, Inc. 1,523,800 53,618,713

TOTAL NONDURABLES 240,175,907

RETAIL & WHOLESALE - 9.4%

APPAREL STORES - 1.0%

TJX Companies, Inc. 1,594,300 54,206,200

DRUG STORES - 1.3%

CVS Corp. 1,374,900 65,307,750

GENERAL MERCHANDISE STORES -
4.6%

Costco Companies, Inc. (a) 455,100 41,670,094

Dayton Hudson Corp. 1,074,300 71,575,238

Nordstrom, Inc. 638,500 26,098,688

Saks, Inc. (a) 922,200 23,977,200

Wal-Mart Stores, Inc. 888,900 81,945,469

245,266,689

GROCERY STORES - 1.0%

Kroger Co. (a) 452,400 27,087,450

Safeway, Inc. (a) 480,900 24,676,181

51,763,631

RETAIL & WHOLESALE,
MISCELLANEOUS - 1.5%

Home Depot, Inc. 956,400 59,535,900

Lowe's Companies, Inc. 327,600 19,819,800

79,355,700

TOTAL RETAIL & WHOLESALE 495,899,970

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

SERVICES - 3.0%

ADVERTISING - 2.3%

Interpublic Group of 489,800 $ 38,143,175
Companies, Inc.

Omnicom Group, Inc. 1,058,500 84,613,844

Outdoor Systems, Inc. (a) 7,700 231,000

Young & Rubicam, Inc. (a) 36,600 1,491,450

124,479,469

EDUCATIONAL SERVICES - 0.1%

Apollo Group, Inc. Class A (a) 88,100 2,631,988

PRINTING - 0.2%

Donnelley (R.R.) & Sons Co. 289,300 9,311,844

SERVICES - 0.4%

Ecolab, Inc. 507,750 18,025,125

ServiceMaster Co. 228,150 4,634,297

22,659,422

TOTAL SERVICES 159,082,723

TECHNOLOGY - 15.6%

COMMUNICATIONS EQUIPMENT - 2.4%

Ascend Communications, Inc. 273,000 22,846,688
(a)

Cisco Systems, Inc. (a) 371,400 40,691,512

Lucent Technologies, Inc. 276,100 29,749,775

OY Nokia AB sponsored ADR 230,900 35,962,675

129,250,650

COMPUTER SERVICES & SOFTWARE
- - 7.0%

Amazon.com, Inc. (a) 109,400 18,837,313

America Online, Inc. 472,300 68,955,800

At Home Corp. Series A (a) 75,100 11,828,250

Automatic Data Processing, 134,500 5,564,938
Inc.

BMC Software, Inc. 221,300 8,201,931

Compuware Corp. (a) 385,800 9,210,975

IMS Health, Inc. 569,400 18,861,375

Intuit, Inc. (a) 283,100 28,805,425

Microsoft Corp. (a) 1,662,800 149,028,450

Oracle Corp. (a) 554,662 14,629,210

Parametric Technology Corp. 146,400 2,891,400
(a)

SHARES VALUE (NOTE 1)

Unisys Corp. (a) 945,745 $ 26,185,315

Vignette Corp. (a) 800 60,200

Yahoo!, Inc. (a) 62,800 10,573,950

373,634,532

COMPUTERS & OFFICE EQUIPMENT
- - 3.5%

Compaq Computer Corp. 381,500 12,088,781

International Business 297,100 52,660,975
Machines Corp.

Pitney Bowes, Inc. 216,000 13,770,000

SCI Systems, Inc. (a) 773,100 22,903,088

Sun Microsystems, Inc. (a) 147,900 18,478,256

Xerox Corp. 1,183,400 63,163,975

183,065,075

ELECTRONIC INSTRUMENTS - 0.2%

Applied Materials, Inc. (a) 148,300 9,148,256

ELECTRONICS - 2.5%

Analog Devices, Inc. (a) 343,200 10,210,200

Intel Corp. 250,300 29,816,988

Micron Technology, Inc. (a) 199,500 9,625,875

Motorola, Inc. 307,400 22,517,050

Solectron Corp. (a) 426,192 20,696,949

Texas Instruments, Inc. 405,600 40,255,800

133,122,862

TOTAL TECHNOLOGY 828,221,375

TRANSPORTATION - 0.5%

RAILROADS - 0.5%

Burlington Northern Santa Fe 276,200 9,080,075
Corp.

CSX Corp. 161,200 6,276,725

Union Pacific Corp. 202,200 10,805,063

26,161,863

UTILITIES - 10.3%

CELLULAR - 1.6%

AirTouch Communications, Inc. 204,700 19,779,138
(a)

ALLTEL Corp. 319,700 19,941,288

Vodafone Group PLC sponsored 251,900 47,294,225
ADR

87,014,651

COMMON STOCKS - CONTINUED

SHARES VALUE (NOTE 1)

UTILITIES - CONTINUED

ELECTRIC UTILITY - 1.7%

Duke Energy Corp. 442,600 $ 24,177,025

Entergy Corp. 370,600 10,191,500

Illinova Corp. 240,600 5,097,713

IPALCO Enterprises, Inc. 470,200 10,315,013

PECO Energy Co. 280,800 12,987,000

PG&E Corp. 475,142 14,759,098

Unicom Corp. 401,800 14,690,813

92,218,162

TELEPHONE SERVICES - 7.0%

AT&T Corp. 1,170,179 93,394,911

AT&T Corp. (Liberty Media 429,446 22,599,596
Group) Class A (a)

Bell Atlantic Corp. 74,400 3,845,550

BellSouth Corp. 165,100 6,614,319

MCI WorldCom, Inc. (a) 1,660,103 147,022,872

Qwest Communications 279,400 20,142,994
International, Inc. (a)

SBC Communications, Inc. 1,603,800 75,579,075

369,199,317

TOTAL UTILITIES 548,432,130

TOTAL COMMON STOCKS 5,069,165,666
(Cost $3,498,535,224)

CONVERTIBLE PREFERRED STOCKS
- - 0.1%

FINANCE - 0.1%

CREDIT & OTHER FINANCE - 0.1%

Federal-Mogul Financing Trust 168,000 9,156,000
$3.50 (c) (Cost $12,584,940)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.4%

MOODY'S RATINGS PRINCIPAL AMOUNT VALUE (NOTE 1)

FINANCE - 0.3%

CREDIT & OTHER FINANCE - 0.3%

Elan Finance Corp. Ltd. 0% Baa3 $ 27,600,000 $ 15,939,000
12/14/18 liquid yield option
notes (c)

HEALTH - 0.1%

MEDICAL FACILITIES MANAGEMENT
- - 0.1%

Total Renal Care Holdings, B1 5,900,000 4,454,500
Inc. 7% 5/15/09 (c)

TOTAL CONVERTIBLE BONDS 20,393,500
(Cost $20,522,301)

U.S. TREASURY OBLIGATIONS -
1.2%

6.75% 8/15/26 Aaa 33,825,000 37,762,568

7% 7/15/06 Aaa 22,525,000 24,643,702

TOTAL U.S. TREASURY OBLIGATIONS 62,406,270
(Cost $67,698,445)

CASH EQUIVALENTS - 2.7%

Taxable Central Cash Fund (b) 142,096,085 142,096,085
(Cost $142,096,085)

TOTAL INVESTMENT IN $ 5,303,217,521
SECURITIES - 100%
(Cost $3,741,436,995)
</TABLE>

LEGEND

(a) Non-income producing

(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $29,549,500 or 0.6% of net assets.

INCOME TAX INFORMATION

At March 31, 1999, the aggregate cost of investment securities for
income tax purposes was $3,747,228,090. Net unrealized appreciation
aggregated $1,555,989,431, of which $1,651,437,491 related to
appreciated investment securities and $95,448,060 related to
depreciated investment securities.

FIDELITY DESTINY PORTFOLIOS: DESTINY II

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999 (UNAUDITED)

ASSETS

Investment in securities, at $ 5,303,217,521
value (cost $3,741,436,995)
- - See accompanying schedule

Receivable for investments 20,624,205
sold

Receivable for fund shares 1,615,234
sold

Dividends receivable 5,498,190

Interest receivable 1,439,183

Other receivables 224,970

TOTAL ASSETS 5,332,619,303

LIABILITIES

Payable for investments $ 43,010,569
purchased

Payable for fund shares 1,946,242
redeemed

Accrued management fee 2,197,581

Other payables and accrued 26,963
expenses

TOTAL LIABILITIES 47,181,355

NET ASSETS $ 5,285,437,948

Net Assets consist of:

Paid in capital $ 3,598,200,595

Undistributed net investment 19,411,772
income

Accumulated undistributed net 106,046,600
realized gain (loss) on
investments and foreign
currency transactions

Net unrealized appreciation 1,561,778,981
(depreciation) on
investments and assets and
liabilities in foreign
currencies

NET ASSETS, for 352,185,181 $ 5,285,437,948
shares outstanding

NET ASSET VALUE, offering $15.01
price and redemption price
per share ($5,285,437,948
(divided by) 352,185,181
shares)

STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31,
1999 (UNAUDITED)

INVESTMENT INCOME $ 24,412,453
Dividends

Interest 5,978,018

TOTAL INCOME 30,390,471

EXPENSES

Management fee Basic fee $ 13,940,409

Performance adjustment (3,091,695)

Transfer agent fees 119,501

Accounting fees and expenses 432,916

Non-interested trustees' 11,202
compensation

Custodian fees and expenses 45,506

Registration fees 9,456

Audit 17,786

Legal 8,065

Miscellaneous 11,867

Total expenses before 11,505,013
reductions

Expense reductions (510,045) 10,994,968

NET INVESTMENT INCOME 19,395,503

REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:

Investment securities 119,293,438

Foreign currency transactions 15,527 119,308,965

Change in net unrealized
appreciation (depreciation)
on:

Investment securities 1,146,717,371

Assets and liabilities in (48,355) 1,146,669,016
foreign currencies

NET GAIN (LOSS) 1,265,977,981

NET INCREASE (DECREASE) IN $ 1,285,373,484
NET ASSETS RESULTING FROM
OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MARCH 31, YEAR ENDED SEPTEMBER 30, 1998
1999 (UNAUDITED)

INCREASE (DECREASE) IN NET
ASSETS

Operations Net investment $ 19,395,503 $ 49,870,755
income

Net realized gain (loss) 119,308,965 911,976,206

Change in net unrealized 1,146,669,016 (723,728,685)
appreciation (depreciation)

NET INCREASE (DECREASE) IN 1,285,373,484 238,118,276
NET ASSETS RESULTING FROM
OPERATIONS

Distributions to shareholders (34,128,925) (63,384,584)
From net investment income

From net realized gain (864,394,671) (245,892,803)

TOTAL DISTRIBUTIONS (898,523,596) (309,277,387)

Share transactions Net 376,164,145 501,235,130
proceeds from sales of shares

Reinvestment of distributions 875,226,224 302,744,998

Cost of shares redeemed (322,211,420) (372,556,327)

NET INCREASE (DECREASE) IN 929,178,949 431,423,801
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) 1,316,028,837 360,264,690
IN NET ASSETS

NET ASSETS

Beginning of period 3,969,409,111 3,609,144,421

End of period (including $ 5,285,437,948 $ 3,969,409,111
undistributed net investment
income of $19,411,772 and
$36,167,783, respectively)

OTHER INFORMATION
Shares

Sold 25,826,072 33,666,459

Issued in reinvestment of 66,405,632 22,694,528
distributions

Redeemed (22,114,041) (24,889,611)

Net increase (decrease) 70,117,663 31,471,376

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED MARCH 31, 1999 YEARS ENDED SEPTEMBER 30,

(UNAUDITED) 1998 1997 1996 F 1995 F 1994 F

SELECTED PER-SHARE DATA

Net asset value, beginning of $ 14.07 $ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89
period

Income from Investment
Operations

Net investment income .06 D .18 D .27 D .24 .22 .14

Net realized and unrealized 4.04 .71 3.52 1.34 1.99 .96
gain (loss)

Total from investment 4.10 .89 3.79 1.58 2.21 1.10
operations

Less Distributions

From net investment income (.12) (.25) (.25) (.22) (.17) (.04)

From net realized gain (3.04) (.97) (.75) (.32) (.99) (.43)

Total distributions (3.16) (1.22) (1.00) (.54) (1.16) (.47)

Net asset value, end of period $ 15.01 $ 14.07 $ 14.40 $ 11.61 $ 10.57 $ 9.52

TOTAL RETURN B, C 32.26% 6.64% 34.72% 15.43% 26.98% 12.67%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (in $ 5,285 $ 3,969 $ 3,609 $ 2,538 $ 2,032 $ 1,437
millions)

Ratio of expenses to average .49% A .48% .54% .78% .80% .80%
net assets

Ratio of expenses to average .47% A, E .48% .53% E .78% .80% .80%
net assets after expense
reductions

Ratio of net investment .82% A 1.23% 2.11% 2.38% 2.33% 1.56%
income to average net assets

Portfolio turnover rate 67% A 106% 35% 37% 52% 72%

</TABLE>

NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 1999 (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, as an open-end management investment
company organized as a Massachusetts business trust. Each fund is
authorized to issue an unlimited number of shares. In January, 1999,
the Board of Trustees approved the creation of an additional class of
shares for each of Destiny I and Destiny II, Class N shares. Offering
of the new class commenced on April 30, 1999. Class N shares are
subject to an annual distribution and service fee of 0.25% of the
class' average net assets. Class N shares will also pay FSC a transfer
agent fee that may not exceed an annual rate of 0.63% of the class'
average net assets. Shares of each new class will be offered publicly
through Fidelity Systematic Investment Plans: Destiny Plans I: New
Class and Destiny Plans II: New Class. Shares of the Original Class,
renamed Class O, will continue to be 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. Purchases
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
and settlement date 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, which includes accretion of
original issue discount, 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
among the funds in the trust.

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan
non-interested Trustees must defer receipt of a portion of, and may
elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.

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,
passive foreign investment companies (PFIC), 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.

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 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., 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 $1,420,895,768 and $1,543,749,029,
respectively, of which U.S. government and government agency
obligations aggregated $0 and $152,315,313, respectively.

3. PURCHASE AND SALES OF INVESTMENTS - CONTINUED

Destiny II: Purchases and sales of securities, other than short-term
securities, aggregated $1,762,113,353 and $1,521,715,982,
respectively, of which U.S. government and government agency
obligations aggregated $67,698,445 and $0, 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 rate is .17% and
.30% for the Destiny I and Destiny II funds, 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 each fund's average net assets up to and including
$100,000,000 and (plus/minus).20% of each fund's average net assets in
excess of $100,000,000 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 .30% 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 $536,261 and $1,683,619 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 $328,229 and $199,760, respectively for the period.

5. EXPENSE REDUCTIONS.

FMR directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, each fund's expenses were reduced
by $361,720 and $488,999 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 as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the fund's custodian and transfer agent
fees were reduced by $389 and $9,907 for Destiny I and $9,213 and
$11,833, for Destiny II under these arrangements, respectively.

6. CHANGE IN INDEPENDENT AUDITOR.

Based on the recommendation of the Audit Committee of the funds, the
Board of Trustees has determined not to retain PricewaterhouseCoopers
LLP as the funds' independent auditor and voted to appoint Deloitte &
Touche LLP for the fiscal year ended September 30, 1999. During the
two most recent fiscal years, Pricewaterhouse Coopers LLP's audit
reports contained no adverse opinion or disclaimer of opinion; nor
were their reports qualified as to uncertainty, audit scope, or
accounting principles. Further, there were no disagreements between
the funds and Pricewaterhouse Coopers LLP on accounting principles,
financial statement disclosure or audit scope, which if not resolved
to the satisfaction of Pricewaterhouse Coopers LLP would have caused
them to make reference to the disagreement in their report.