FILE NO. 2-34100
FIDELITY SYSTEMATIC INVESTMENT PLANS
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 65
TO
FORM S-6
For registration under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. EXACT NAME OF TRUST:
FIDELITY SYSTEMATIC INVESTMENT PLANS:
Destiny Plans I and Destiny Plans II
B. NAME OF DEPOSITOR:
FIDELITY DISTRIBUTORS CORPORATION
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
82 Devonshire Street
Boston, Massachusetts 02109
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICES:
Eric D. Roiter
Fidelity Distributors Corporation
82 Devonshire Street
Boston, Massachusetts 02109
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ X] On November19, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on ( ) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on ( ) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 6 5
TO
REGISTRATION STATEMENT FILE NO. 2-34100
PAGE
Facing Sheet 1
Table of Contents 2
Cross-Reference Sheet 3
Prospectus 8
Signature Page 68
Exhibits 69
RECONCILIATION AND TIE OF INFORMATION SHOWN IN
INVESTMENT PLANS PROSPECTUS WITH THAT REQUIRED BY FORM N-8B-2
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
1 (a) Front Cover
(b) Introductory Statement
2 Fidelity Systematic Investment Plans (First Page); The
Custodian; The Sponsor
3 The Custodian; The Sponsor; Back Cover
4 Back Cover
5 General
6 (a) The Custodian; The Sponsor
(b) The Custodian; The Sponsor
7 Not applicable
8 The fiscal year end of the trust is September 30
9 Not applicable
10 (a) How to Start a Destiny Plan
(b) Distributions
(c) Borrowing Against Your Plan Without Termination;
Cancellation and Refund Rights; Terminating the Plan and
Withdrawal of Shares
(d) Borrowing Against Your Plan Without Termination;
Transferring or Assigning Rights in the Plan; Terminating
the Plan and Withdrawal of Shares; Plan Reinstatement
Privilege
(e) Not applicable
(f) Retaining Full Voting Rights in Fund Shares
(g)(1)(2) Substitution of the Underlying Investment
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
(3)(4) The Custodian; The Sponsor
(h)(1)(2) Substitution of the Underlying Investment
(3)(4) The Custodian; The Sponsor
(i) The Sponsor; Custodian Fees
11 Investment Objective
12(a) Investment Objective
(b)-(d) The Custodian; The Sponsor
(e) Not Applicable
13(a)(A)(B) How Fidelity Systematic Investment Plans Can Help
Planholders Meet Their Objectives; A $50 Monthly
Investment Plan; Allocation of Investments and
Deductions; Extended Investment Option; Sponsor and
Custodian Fees; The Custodian; The Sponsor
(C)(D) The Sponsor; Custodian Fees; The Custodian; General
(b) A $50 Monthly Investment Plan
(c) Fidelity Systematic Investment Plans (Page 1)
(d) Rights and Privileges of Planholders; The Custodian; The
Sponsor; Planholders May Qualify for Reduced Fees
(e),(f) Not Applicable
(g) Allocation of Investments and Deductions (10 Year Plans);
Allocation of Investments and Deductions (15 Year Plans);
Financial Statements
14 How to Start a Destiny Plan
15 The Custodian; The Sponsor
16 The Custodian; The Sponsor
17 Rights and Privileges of Planholders
18(a),(b) Distributions; The Custodian; The Sponsor
(c) Not Applicable
(d) Not Applicable
19 The Custodian; The Sponsor
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
20(a-d) The Custodian; The Sponsor; Rights and Privileges of
Planholders; Termination of a Plan
(e),(f) Not Applicable
21 Not Applicable
22 Reference is made to the statements in Exhibit 1.A.(1)
filed herewith under the caption "Indemnification."
23 The Sponsor
24 Not Applicable
25 The Sponsor
26(a) Financial Statements
(b) Not Applicable
27 The Sponsor
28 The Sponsor
29 The Sponsor
30 Not Applicable
31 The Sponsor
32 Not Applicable
33 Not Applicable
34 Not Applicable
35(A)(B) General
(C) Not Applicable
36 Not Applicable
37 Not Applicable
38 Fidelity Systematic Investment Plans (Page 1); General
39 The Sponsor
40 Financial Statements
41(a) The Sponsor
FORM N-8B-2 CAPTION
ITEM NUMBER REFERENCE
(b) (c) Not Applicable
42 The Sponsor
43 Not Applicable
44(a) Financial Statements
(b) Allocation of Investments and Deductions; Total
Allocations and Deductions When Extended Investment
Option of 120 Additional Investments Is Used; A $50
Monthly Investment Plan; Financial Statements
45 Not Applicable
46(a),(b) Fidelity Systematic Investment Plans (Page 1); Allocation
of Investments and Deductions; Total Allocations and
Deductions When Extended Investment Option of 120
Additional Investments Is Used; A $50 Monthly Investment
Plan; Statement of Operations; Statement of Condition
47 Not Applicable
48 The Custodian; The Sponsor
49 Creation and Sales Charges; The Custodian; The Sponsor;
Statement of Operations
50 Notes C&D (pp. 5,6); Notes A&B (pp. 7); Note B (pp. 8);
The Custodian; The Sponsor
51 Not Applicable
52(a) Not Applicable
(b) Not Applicable
(c) Substitution of the Underlying Investment
(d) Not Applicable
53 Taxes
54 Not Applicable
55 Illustration of a Hypothetical $50 ($166.66) Monthly
Destiny I Plan
56-59 Not Applicable
FIDELITY
SYSTEMATIC
INVESTMENT
PLANS:
DESTINY PLANS I
DESTINY PLANS II
PROSPECTUS
NOVEMBER 19 , 199 8
DESTINY
FIDELITY SYSTEMATIC INVESTMENT PLANS:
DESTINY PLANS I AND DESTINY PLANS II
Fidelity Systematic Investment Plans, a plan consisting of two
series, Destiny Plans I and Destiny Plans II (each a Plan and
collectively, the Plans), for the accumulation of shares of Fidelity
Destiny Portfolios, a series fund consisting of Destiny I and Destiny
II (each a Fund and collectively, the Funds), are offered by Fidelity
Distributors Corporation (Distributors or Sponsor), the Sponsor and
Principal Underwriter. Investments in Destiny Plans I purchase shares
of Destiny I and investments in Destiny Plans II purchase shares of
Destiny II. Exchanges between the two Plans are not permitted.
Planholders make a fixed monthly investment for either 10 or 15
years. On 10-year Plans, the Creation and Sales Charges range from
8.24% on $6,000 Plans ($50 a month) to 0.64% on $1,200,000 Plans
($10,000 a month) and from 9.20% to 0.64% of the net amount invested,
respectively. Total deductions range from 11.66% to 0.66% of the net
amount invested, respectively. On 15-year Plans, the Creation and
Sales Charges range from 8.67% on $9,000 Plans ($50 a month) to 0.61%
on $1,800,000 Plans ($10,000 a month) and from 9.73% to 0.61% of the
net amount invested, respectively. Total deductions range from 12.20%
to 0.63% of the net amount invested.
Investments are applied, after authorized deductions, to the purchase
of Fund shares at net asset value (NAV). THESE SHARES ARE A LONG-TERM
INVESTMENT AND ARE NOT SUITABLE FOR INVESTORS SEEKING QUICK PROFITS OR
WHO MIGHT BE UNABLE TO COMPLETE A PLAN. Since a major portion of the
entire Creation and Sales Charges is deducted from the first year's
investment, withdrawal or termination of your investment in the early
years of the Plan will probably result in a loss. For example, on a
$6,000 Plan - $50 a month for 10 years - total charges amount to
10.44% of the investments made if the Plan is completed. However, even
after application of the refund privilege described on page , total
deductions would amount to 17.2% of total investments if this Plan
were terminated any time between 2 months and 18 months. Moreover, if
it were terminated after 18 months, total deductions would amount to
35.11% of total investments; they would amount to 29% if the Plan were
terminated after two years. A detailed description of all deductions
appears on pages , , and .
The value of each Fund's shares is subject to fluctuations in the
values of its underlying securities. A Plan calls for monthly
investments at regular intervals regardless of the price level of the
Fund's shares. Planholders should therefore consider their financial
ability to continue a Plan. A Plan offers no assurance against loss in
a declining market. Terminating the Plan at a time when the value of
the Fund shares the Planholder has acquired is less than their cost
will result in a loss. Preinvestment of all or any part of the first
year's investments on Plans offered herein increases the possible loss
in the event of early termination.
Shares of the Funds are offered to the general public only through
the Plans. Shares of certain other mutual funds managed by the
Funds' adviser, which might be considered to have investment
objectives similar in many respects to those of the Funds, may be
acquired by direct purchase without any sales charges, payment of the
Custodian Fee, or penalties for early termination.
Planholders have the right to a 45-day refund or a limited refund of
their investment for certain periods of time and under the conditions
described in more detail under the heading "Cancellation and Refund
Rights," page .
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND
ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY
THE CURRENT PROSPECTUS FOR FIDELITY DESTINY PORTFOLIOS.
Planholders should read and retain this Prospectus for future
reference.
I.DES - PRO-119 8
[This Page Intentionally Left Blank]
TABLE OF CONTENTS
PAGE
HOW FIDELITY SYSTEMATIC INVESTMENT PLANS CAN HELP
PLANHOLDERS MEET THEIR OBJECTIVES 4
ALLOCATION OF INVESTMENTS AND DEDUCTIONS 5
A $50 MONTHLY INVESTMENT PLAN 8
INVESTMENT OBJECTIVE 9
HOW TO START A DESTINY PLAN 9
TAX- ADVANTAGED RETIREMENT PLANS 9
PLANHOLDERS MAY QUALIFY FOR REDUCED FEES 10
1. Reduced Custodian Fees under an Automatic
Investment Program 10
2. Purchasing Two or More Plans at the Same Time 10
3. Rights of Accumulation 11
RIGHTS AND PRIVILEGES OF PLANHOLDERS 11
1. Distributions 11
2. Federal Income Tax Withholding 11
3. Transferring or Assigning Rights in the Plan 11
4. Retaining Full Voting Rights in Fund Shares 12
5. Making Preinvestments to Complete the Plan
Ahead of Schedule 12
6. Changing the Face Amount of the Plan 12
7 Extended Investment Option 12
8. Partial Liquidation of Your Plan Without
Termination 13
9. Systematic Withdrawal Program 14
10. Cancellation and Refund Rights 14
11. Terminating the Plan and Withdrawal of Shares 15
12. Exchanges 16
1 3 . Plan Reinstatement Privilege 16
SPONSOR AND CUSTODIAN CHARGES 17
1. Creation and Sales Charges 17
2. Custodian Fees 17
3. Incidental Service Fees 17
TAXES 18
SUBSTITUTION OF THE UNDERLYING INVESTMENT 18
TERMINATION OF A PLAN 19
THE CUSTODIAN AND SPONSOR 19
1. The Custodian 19
2. The Sponsor 20
GENERAL 21
FINANCIAL STATEMENTS 25
FIDELITY DESTINY PORTFOLIOS' PROSPECTUS F-1
No salesman, dealer, or other person, is authorized by the Sponsor,
Fidelity Systematic Investment Plans, or Fidelity Destiny Portfolios
to give any information or make any representation other than those
contained in the Plans' Prospectus or the Prospectus of Fidelity
Destiny Portfolios, or in any other printed or written material issued
under the name of the Sponsor, the Plans, or Fidelity Destiny
Portfolios. No person should rely upon any information not contained
in these materials.
HOW FIDELITY SYSTEMATIC INVESTMENT PLANS CAN HELP PLANHOLDERS MEET
THEIR OBJECTIVES
Many people who want to build an investment portfolio find it
difficult to save the money necessary to make periodic stock
purchases. The Destiny Plans are designed to help such people. These
Plans make it possible for Planholders to build equity over a period
of years by investing a modest sum each month in mutual fund shares.
The value of each Fund's shares is subject to fluctuations in the
values of its underlying securities. A Plan calls for monthly
investments at regular intervals regardless of the value of the Fund's
shares. A Plan offers no assurance against loss in a declining market
and does not eliminate the risk inherent in the ownership of any
security. Terminating the Plan at a time when the value of the Fund
shares acquired is less than their cost will result in a loss.
Planholders should therefore consider their financial ability to
continue a Plan.
Another feature of a Plan is the service rendered by the Custodian,
State Street Bank and Trust Company, or its affiliated bookkeeping and
administrative service agent, Boston Financial Data Services, Inc.
(Boston Financial). Acting as the Planholder's agent, the Custodian
assumes the responsibility for the many administrative details
of the Plan. A description of the Custodian's services and charges
appears on page .
Before opening a Plan you should consider the following:
1. Investments made through the Plans will not result in direct
ownership of either Fidelity Destiny Portfolios: Destiny I or Destiny
II shares, but rather will represent an interest in a unit investment
trust, which will have direct ownership of Fidelity Destiny
Portfolios: Destiny I or Destiny II shares. Planholders will have a
beneficial interest in the underlying Portfolios' shares.
2. Unlike most other plans of this type, the primary issuer - Fidelity
Destiny Portfolios - does not sell its shares directly to the public.
Initial investments in the Funds may be made only through the trust
arrangements provided by the Plans.
3. These Plans contain Creation and Sales Charges, sometimes called a
"front-end load", and are referred to on page 7. The effect of a
"front-end load" and Custodian fees is that if a Planholder terminates
the Plan between 2 months and 18 months, the Planholder may lose as
much as 17.2% of the total investments made up to that date and as
much as 35.1% after 18 months. See the tables and accompanying notes
on pages , , and .
4. In addition to the Creation and Sales Charges, Planholders must pay
additional fees to the Custodian. These fees relieve Planholders of
the administrative details associated with the holding of securities.
Some investors could perform these services for themselves if they
were to purchase and hold the securities directly. An investor should
weigh the value of the Custodian services against the cost of the
Custodian Fees before making an investment decision. See page .
5. The dealer firm of record has proprietary rights to all commissions
earned during the duration of your Plan. It is also under no
obligation to transfer your Plan to another dealer firm as long as its
dealer agreement with Fidelity Destiny Plans remains active. If the
dealer firm of record chooses to release your Plan and, therefore,
subsequent commissions to a new dealer firm, it must first complete
and sign an Assignment of Amounts Due form. This form must be returned
to the Custodian, State Street Bank and Trust Company.
ALLOCATION OF INVESTMENTS AND DEDUCTIONS
10-YEAR PLANS
(120 INVESTMENTS)
(ASSUMING THAT ALL INVESTMENTS ARE MADE IN ACCORDANCE WITH THE TERMS
OF THE PLAN)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CREATION
AND
SALES
CHARGES
MONTHLY TOTAL PER PER TOTAL % OF TOTAL
INVESTMENT INVESTMENTS INVESTME INVEST INVESTMENTS
UNIT (FACE AMOUNT) NT 1 MENT
THRU 12 13 THRU
120
$50.00 $6,000.00 $25.00 $1.80 $494.40 $8.24%
75.00 9,000.00 37.50 2.70 741.60 8.24
100.00 12,000.00 50.00 3.60 988.80 8.24
125.00 15,000.00 62.50 4.50 1,236.00 8.24
150.00 18,000.00 75.00 5.40 1,483.20 8.24
166.66 19,999.20 83.33 5.00 1,539.96 7.70
200.00 24,000.00 100.00 4.02 1,634.16 6.81
250.00 30,000.00 125.00 5.00 2,040.00 6.80
300.00 36,000.00 150.00 5.00 2,340.00 6.50
350.00 42,000.00 175.00 4.50 2,586.00 6.16
400.00 48,000.00 200.00 4.00 2,832.00 5.90
500.00 60,000.00 225.00 2.78 3,000.24 5.00
750.00 90,000.00 300.00 2.50 3,870.00 4.30
1,000.00 120,000.00 300.00 5.00 4,140.00 3.45
1,500.00 180,000.00 315.00 6.00 4,428.00 2.46
2,000.00 240,000.00 325.00 7.00 4,656.00 1.94
2,500.00 300,000.00 350.00 8.00 5,064.00 1.69
5,000.00 600,000.00 400.00 11.00 5,988.00 1.00
10,000.00 1,200,000.00 500.00 15.56 7,680.48 0.64
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CUSTO % OF
DIAN TOTAL
FEES CHARGES
PER TOTAL (A) TOTAL NET TO TOTAL TO NET
INVES CHARGES INVESTME INVESTME INVESTMENTS
TMENT (A)(B) NT IN NTS IN FUND
FUND SHARES
SHARES(C
)
$1.10 $132.00 $626.40 $5,373.60 10.44% 11.66%
1.25 150.00 891.60 8,108.40 9.91 11.00
1.50 180.00 1,168.80 10,831.20 9.74 10.79
1.50 180.00 1,416.00 13,584.00 9.44 10.42
1.50 180.00 1,663.20 16,336.80 9.24 10.18
1.50 180.00 1,719.96 18,279.24 8.60 9.41
1.50 180.00 1,814.16 22,185.84 7.56 8.18
1.50 180.00 2,220.00 27,780.00 7.40 7.99
1.50 180.00 2,520.00 33,480.00 7.00 7.53
1.50 180.00 2,766.00 39,234.00 6.59 7.05
1.50 180.00 3,012.00 44,988.00 6.28 6.70
1.50 180.00 3,180.24 56,819.76 5.30 5.60
1.50 180.00 4,050.00 85,950.00 4.50 4.71
1.50 180.00 4,320.00 115,680.00 3.60 3.73
1.50 180.00 4,608.00 175,392.00 2.56 2.63
1.50 180.00 4,836.00 235,164.00 2.02 2.06
1.50 180.00 5,244.00 294,756.00 1.75 1.78
1.50 180.00 6,168.00 593,832.00 1.03 1.04
1.50 180.00 7,860.48 1,192,139.52 0.66 0.66
</TABLE>
NOTES:
(A) Does not include an annual $12 Custodian Fee (for completed or
incomplete inactive Plans only), payable to the Custodian first from
dividends and distributions and then, if necessary, from principal.
Plans established under an Automatic Investment Program will pay a
reduced Custodian Fee of $0.75 per automatic investment. See "Reduced
Custodian Fees under an Automatic Investment Program" on page .
(B) Does not include a service charge, payable first from dividends
and distributions and then, if necessary, from principal, to cover
certain administrative expenses actually incurred. The amount of such
charge will be determined by pro rating each Plan's annual
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year. (If a face
amount change is made, the Planholder is subject to the provisions of
the currently effective prospectus at the time of the face change.)
(C) Dividends and distributions received on each Fund's shares during
the periods shown above have not been included or reflected in any way
in the above figures.
ALLOCATION OF INVESTMENTS AND DEDUCTIONS
15-YEAR PLANS
(180 INVESTMENTS)
(ASSUMING THAT ALL INVESTMENTS ARE MADE IN ACCORDANCE WITH THE TERMS
OF THE PLAN)
CREATION
AND
SALES
CHARGES
MONTHLY TOTAL PER PER TOTAL % OF TOTAL
INVESTMENT INVESTMENTS INVESTME INVEST INVESTMENTS
UNIT (FACE AMOUNT) NT 1 MENT
THRU 12 13 THRU
180
$50.00 $9,000.00 $25.00 $2.86 $780.48 8.67%
75.00 13,500.00 37.50 4.06 1,132.08 8.39
100.00 18,000.00 50.00 5.41 1,508.88 8.38
125.00 22,500.00 62.50 6.76 1,885.68 8.38
150.00 27,000.00 75.00 5.70 1,857.60 6.88
166.66 29,998.80 83.33 6.33 2,063.40 6.88
200.00 36,000.00 100.00 7.43 2,448.24 6.80
250.00 45,000.00 125.00 9.29 3,060.72 6.80
300.00 54,000.00 150.00 5.04 2,646.72 4.90
350.00 63,000.00 175.00 5.31 2,992.08 4.75
400.00 72,000.00 200.00 3.80 3,038.40 4.22
500.00 90,000.00 225.00 5.36 3,600.48 4.00
750.00 135,000.00 300.00 8.70 5,061.60 3.75
1,000.00 180,000.00 300.00 15.54 6,210.72 3.45
1,500.00 270,000.00 315.00 17.52 6,723.36 2.49
2,000.00 360,000.00 325.00 18.57 7,019.76 1.95
2,500.00 450,000.00 350.00 20.26 7,603.68 1.69
5,000.00 900,000.00 400.00 25.00 9,000.00 1.00
10,000.00 1,800,000.00 500.00 29.64 10,979.52 0.61
CUSTO % OF
DIAN TOTAL
FEES CHARG
ES
PER TOTAL(A) TOTAL NET TO TO NET INVESTMENTS
INVES CHARGES INVESTME TOTAL IN FUND
TMENT (A)(B) NT IN INVEST SHARES
FUND MENTS
SHARES(C
)
$1.10 $198.00 $978.48 $8,021.52 10.87% 12.20%
1.25 225.00 1,357.08 12,142.92 10.05 11.18
1.50 270.00 1,778.88 16,221.12 9.88 10.97
1.50 270.00 2,155.68 20,334.32 9.58 10.60
1.50 270.00 2,127.60 24,872.40 7.88 8.55
1.50 270.00 2,333.40 27,665.40 7.78 8.43
1.50 270.00 2,718.24 33,281.76 7.55 8.17
1.50 270.00 3,330.72 41,669.28 7.40 7.99
1.50 270.00 2,916.72 51,083.28 5.40 5.71
1.50 270.00 3,262.08 59,737.92 5.18 5.46
1.50 270.00 3,308.40 68,691.60 4.60 4.82
1.50 270.00 3,870.48 86,129.52 4.30 4.49
1.50 270.00 5,331.60 129,668.40 3.95 4.11
1.50 270.00 6,480.72 173,519.28 3.60 3.73
1.50 270.00 6,993.36 263,006.64 2.59 2.66
1.50 270.00 7,289.76 352,710.24 2.02 2.07
1.50 270.00 7,873.68 442,126.32 1.75 1.78
1.50 270.00 9,270.00 890,730.00 1.03 1.04
1.50 270.00 11,249.52 1,788,750.48 0.62 0.63
NOTES:
(A) Does not include an annual $12 Custodian Fee (for completed or
incomplete inactive Plans only), payable to the Custodian first from
dividends and distributions and then, if necessary, from principal.
Plans established under an Automatic Investment Program will pay a
reduced Custodian Fee of $0.75 per automatic investment. See "Reduced
Custodian Fees under an Automatic Investment Program" on page .
(B) Does not include a service charge, payable first from dividends
and distributions and then, if necessary, from principal, to cover
certain administrative expenses actually incurred. The amount of such
charge will be determined by pro rating each Plan's annual
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year. (If a face
amount change is made the Planholder is subject to the provisions of
the currently effective prospectus at the time of the face change.)
(C) Dividends and distributions received on each Fund's shares during
the periods shown above have not been included or reflected in any way
in the above figures.
TOTAL ALLOCATIONS AND DEDUCTIONS WHEN
EXTENDED INVESTMENT OPTION OF 120 ADDITIONAL INVESTMENTS IS USED
(PLEASE SEE PAGE FOR A DESCRIPTION OF THE EXTENDED INVESTMENT
OPTION.)
(ASSUMING THAT ALL INVESTMENTS ARE MADE IN ACCORDANCE WITH THE TERMS
OF THE EXTENDED INVESTMENT OPTION)
MONTHLY TOTAL CREATION CREATION AND CUSTODIAN FEES
INVESTMENT INVESTMENTS AND SALES SALES CHARGES AS (A)(B)
UNIT (FACE AMOUNT) CHARGES % OF TOTAL
INVESTMENTS
$50.00 $15,000.00 $1,123.68 7.49% $ 330.00
75.00 22,500.00 1,619.28 7.20 375.00
100.00 30,000.00 2,158.08 7.19 450.00
125.00 37,500.00 2,696.88 7.19 450.00
150.00 45,000.00 2,541.60 5.65 450.00
166.66 49,998.00 2,823.00 5.65 450.00
200.00 60,000.00 3,339.84 5.57 450.00
250.00 75,000.00 4,175.52 5.57 450.00
300.00 90,000.00 3,251.52 3.61 450.00
350.00 105,000.00 3,629.28 3.46 450.00
400.00 120,000.00 3,494.40 2.91 450.00
500.00 150,000.00 4,243.68 2.83 450.00
750.00 225,000.00 6,105.60 2.71 450.00
1,000.00 300,000.00 8,075.52 2.69 450.00
1,500.00 450,000.00 8,825.76 1.96 450.00
2,000.00 600,000.00 9,248.16 1.54 450.00
2,500.00 750,000.00 10,034.88 1.34 450.00
5,000.00 1,500,000.00 12,000.00 0.80 450.00
10,000.00 3,000,000.00 14,536.32 0.48 450.00
% OF
TOTAL
CHARGE
S
TOTAL CHARGES (A)(B) NET TO TO NET
INVESTMENT IN TOTAL INVESTMENTS
FUND INVEST IN FUND
SHARES(C) MENTS SHARES
$1,453.68 $13,546.32 9.69% 10.73%
1,994.28 20,505.72 8.86 9.73
2,608.08 27,391.92 8.69 9.52
3,146.88 34,353.12 8.39 9.16
2,991.60 42,008.40 6.65 7.12
3,273.00 46,725.00 6.55 7.00
3,789.84 56,210.16 6.32 6.74
4,625.52 70,374.48 6.17 6.57
3,701.52 86,298.48 4.11 4.29
4,079.28 100,920.72 3.89 4.04
3,944.40 116,055.60 3.29 3.40
4,693.68 145,306.32 3.13 3.23
6,555.60 218,444.40 2.91 3.00
8,525.52 291,474.48 2.84 2.92
9,275.76 440,724.24 2.06 2.10
9,698.16 590,301.84 1.62 1.64
10,484.88 739,515.12 1.40 1.42
12,450.00 1,487,550.00 0.83 0.84
14,986.32 2,985,013.68 0.50 0.50
NOTES:
(A) Does not include an annual $12 Custodian Fee (for completed or
incomplete inactive Plans only), payable to the Custodian first from
dividends and distributions and then, if necessary, from principal.
Plans established under an Automatic Investment Program will pay a
reduced Custodian Fee of $0.75 per automatic investment. See "Reduced
Custodian Fees under an Automatic Investment Program" on page .
(B) Does not include a service charge, payable first from dividends
and distributions and then, if necessary, from principal, to cover
certain administrative expenses actually incurred. The amount of such
a charge will be determined by pro rating each Plan's annual
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 19 98 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year. (If a face
amount change is made the Planholder is subject to the provisions of
the currently effective prospectus at the time of the face change.)
(C) Dividends and distributions received on each Fund's shares during
the periods shown above have not been included or reflected in any way
in the above figures.
A $50 MONTHLY INVESTMENT PLAN
(ASSUMING THAT ALL INVESTMENTS ARE MADE IN ACCORDANCE WITH THE TERMS
OF THE PLAN)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 YEARS AT THE END OF 6
(120 MONTHS (6
INVESTMENT INVESTMENTS)
S)
AMOUNT % OF TOTAL AMOUNT % OF TOTAL
INVESTMENTS INVESTMENTS
10 YEARS (120 INVESTMENTS)
Total Investments $6,000.00 100.00% $ 300.00 100.00%
Deduct:
Creation and Sales Charges 494.40 8.24 150.00 50.00
Custodian Fees 132.00 2.20 6.60 2.20
Total Deductions (A) 626.40 10.44 156.60 52.20
Net Amount Invested under Plans 5,373.60 89.56 143.40 47.80
15 YEARS (180 INVESTMENTS)
Total Investments $9,000.00 100.00% $ 300.00 100.00%
Deduct:
Creation and Sales Charges 780.48 8.67 150.00 50.00
Custodian Fees 198.00 2.20 6.60 2.20
Total Deductions (A) 978.48 10.87 156.60 52.20
Net Amount Invested under Plans 8,021.52 89.13 143.40 47.80
25 YEARS (300 INVESTMENTS)
Total Investments (B) $15,000.00 100.00% $ 300.00 100.00%
Deduct:
Creation and Sales Charges 1,123.68 7.49 150.00 50.00
Custodian Fees 330.00 2.20 6.60 2.20
Total Deductions (A) 1,453.68 9.69 156.60 52.20
Net Amount Invested under Plans 13,546.32 90.31 143.40 47.80
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AT THE END AT THE END OF 2
OF 1 YEAR YEARS (24
(12 INVESTMENTS)
INVESTMENT
S)
AMOUNT % OF TOTAL AMOUNT % OF TOTAL
INVESTMENTS INVESTMENTS
10 YEARS (120 INVESTMENTS)
Total Investments $ 600.00 100.00% $ 1,200.00 100.00%
Deduct:
Creation and Sales Charges 300.00 50.00 321.60 26.80
Custodian Fees 13.20 2.20 26.40 2.20
Total Deductions (A) 313.20 52.20 348.00 29.00
Net Amount Invested under Plans 286.80 47.80 852.00 71.00
15 YEARS (180 INVESTMENTS)
Total Investments $ 600.00 100.00% $ 1,200.00 100.00%
Deduct:
Creation and Sales Charges 300.00 50.00 334.32 27.86
Custodian Fees 13.20 2.20 26.40 2.20
Total Deductions (A) 313.20 52.20 360.72 30.06
Net Amount Invested under Plans 286.80 47.80 839.28 69.94
25 YEARS (300 INVESTMENTS)
Total Investments (B) $ 600.00 100.00% $ 1,200.00 100.00%
Deduct:
Creation and Sales Charges 300.00 50.00 334.32 27.86
Custodian Fees 13.20 2.20 26.40 2.20
Total Deductions (A) 313.20 52.20 360.72 30.06
Net Amount Invested under Plans 286.80 47.80 839.28 69.94
</TABLE>
NOTES:
(A) Does not include a service charge, payable first from dividends
and distributions and then, if necessary, from principal, to cover
certain administrative expenses actually incurred. The amount of such
a charge will be determined by pro rating each Plan's annual
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year. (If a face
amount change is made the Planholder is subject to the provisions of
the currently effective prospectus at the time of the face change.)
(B) The 25-year (300 investments) schedule reflects the charges
applicable to a 15-year Plan which is continued under the Extended
Investment Option. It does not include the reduced Custodian Fee rate
of $0.75 per automatic investment for Plans established under an
Automatic Investment Program as described on page . The Custodian Fee
may be increased as set forth on pages and .
Dividends and distributions received on Fund shares during the
periods shown above have not been included or reflected in any way in
the amounts shown in the table.
After the first 12 investments, the Creation and Sales Charges
deducted from any investment will not exceed 3.73% of the net
investment in Fund shares in the case of a 10-year Plan and 6.07% of
the net investment in Fund shares in the case of a 15-year Plan
(before deduction of Custodian Fee).
The amounts shown are subject to an additional Custodian charge of
$2.50 (plus transfer taxes, if any) if the Plan is terminated prior to
completion of all Plan investments.
INVESTMENT OBJECTIVE
Fidelity Destiny Portfolios, a series fund consisting of two separate
funds - Destiny I and Destiny II (each a Fund and collectively, the
Funds), is an open-end management investment company. Each Fund's
objective is to seek growth of capital (see the accompanying
Prospectus, which begins on page F-1). A mutual fund is an investment
that pools shareholders' money and invests it toward a specified goal.
Each Fund is a diversified fund. Diversification, when successful, can
mean higher returns with decreased volatility.
Each Fund seeks capital growth primarily from equity securities. Each
Fund will tend to be fully invested in common stocks and securities
convertible into common stocks, but may also buy other types of
securities such as preferred stocks and bonds. The Funds have the
flexibility to invest in large or small, domestic or foreign issuers.
The Funds' investments are selected and supervised by Fidelity
Management & Research Company (FMR). Reference is made to the Fidelity
Destiny Portfolios' Prospectus for a description of the Funds'
investment policies and the business experience of FMR.
HOW TO START A DESTINY PLAN
Planholders may choose either a 10- or 15-year Plan and make regular
monthly investments in amounts of $50 or more as shown on pages 11 and
12. To start a Plan, investors should complete a Plan Application and
mail it to the Sponsor, in care of Boston Financial Data Services,
Inc., P.O. Box 8300, Boston, Massachusetts 02266-8300, together with a
check in the amount of the initial monthly investment unit, made
payable to Destiny Plans I or Destiny Plans II. Plans can be funded
automatically through preauthorized check transactions , or for
military employees , a government allotment. Planholders who
elect to fund their accounts under an Automatic Investment Program
will receive a reduced Custodian Fee of $0.75 per automatic
investment, as explained on page . The appropriate forms for automatic
monthly investments should be attached to your Plan Application.
After the Plan Application and initial investment is received in
proper form by the Sponsor, Planholders will receive a
confirmation statement showing the number of whole and fractional Fund
shares purchased for their account. Plan Certificates, issued under
prior prospectuses, are no longer provided. All Plans established
under this Prospectus are governed strictly by the rules, rights,
privileges and benefits described herein. IT IS IMPORTANT, THEREFORE,
THAT YOU RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
A Planholder will then send regular monthly investments, made payable
to Destiny Plans I or Destiny Plans II, directly to Boston Financial.
Investments, after applicable deductions, will be applied toward the
purchase of fund shares at the then current NAV. A Planholder may
terminate a Plan completely or partially at any time as described on
pages , and . All correspondence should be directed to Boston
Financial Data Services, Inc., P.O. Box 8300, Boston, Massachusetts
02266-8300.
TAX- ADVANTAGED RETIREMENT PLANS
A Plan may be purchased by individuals who wish to establish
tax- advantaged retirement plans, including individual
retirement accounts (IRAs) and qualified money purchase pension
and profit sharing plans. Two of the plan s made
available by Fidelity Destiny Portfolios are the Fidelity
Destiny IRA (which includes SEP IRAs , traditional IRAs
and Fidelity Destiny Roth IRAs ). IRA Plans can be established
through contributions, through a rollover or through a
trustee-to-trustee transfer of IRA assets from another
financial institution . Such rollovers or transfers may contain
assets that originated in an employer sponsored retirement
plan or annual IRA contributions.
Detailed information concerning the Fidelity Destiny IRA
and Fidelity Destiny Roth IRA is available from the Sponsor.
This information should be read carefully and consultation with an
attorney or tax adviser may be advisable. The information sets forth
the additional service fees charged for IRAs and describes the federal
income tax consequences of establishing an IRA. Under the Fidelity
Destiny IRA, dividends and distributions will be reinvested
automatically in additional Fund shares. A Destiny tax- advantaged
retirement plan may not be established by changing the
registration of an existing Destiny account. The annual maintenance
fee charged by the Custodian for the Fidelity Destiny IRA
and Fidelity Destiny Roth IRA is $10. This $10 fee will be
deducted from plan shares unless it is paid in advance.
PLANHOLDERS MAY QUALIFY FOR REDUCED FEES
1. REDUCED CUSTODIAN FEES UNDER AN AUTOMATIC INVESTMENT
PROGRAM
The Destiny Plans were created to utilize the investing method of
dollar-cost averaging by investing a fixed amount on a regular monthly
basis. D ollar-cost averaging does not assure a profit or guard
against a loss. If shares are sold when their value is less than their
cost, a loss will occur. To encourage Planholders to make monthly
investments and to eliminate the burden of writing a check every
month, all Plans established or face changed after November 29, 1993
under an Automatic Investment Program, where monthly investments are
automatically debited from the Planholder's bank account or , for
military employees, are made through government allotment, will
receive a reduced Custodian Fee rate of $0.75 per automatic
investment. Investments credited to Automatic Investment Program Plan
accounts that are not made by automatic debit or government
allotment will be charged the customary Custodian fee rate. The
Custodian Fee charged at any one time may not exceed $5.
To initiate this program, Planholders should complete a Preauthorized
Check Transaction Form, attach a voided blank check or, for
military personnel , a government allotment form , and
send it to Boston Financial along with their Plan Application. Boston
Financial will then draft the Planholder's bank account in the amount
of the monthly Plan investment unit. The proceeds of the draft ,
less applicable Creation and Sales Charges, and other applicable
fees and charges , will be invested in the Planholder's account.
The Planholder may terminate this program at any time by written
notice to Boston Financial at least five business days prior to the
date of the next scheduled draft. The Planholder may begin or change
this program at any time by written notice to Boston Financial at
least 15 days prior to the date of the request.
Although it has no current intention of doing so, the Sponsor
reserves the right to reimpose the regular Custodian Fee rate on Plans
that are established or that complete a Face Change under an Automatic
Investment Program.
2. PURCHASING TWO OR MORE PLANS AT THE SAME TIME
The face amounts of two or more Plans purchased at one time by "any
person" may be combined, provided the combined monthly investment is
at least $150 on 15-year Plans and $200 on 10-year Plans, to take
advantage of the lower Creation and Sales Charges available on larger
sized investments. However, 10-year and 15-year Plans may not be
combined in order to take advantage of this privilege.
The term "any person" includes an individual, his or her spouse and
children under the age of 21, or a trustee or other fiduciary of a
single trust estate or single fiduciary account - including a pension,
profit-sharing or other employee benefit trust created pursuant to a
plan qualified under Section 401 of the Internal Revenue Code - even
though more than one beneficiary is involved. The term "any person"
shall not include a group of individuals whose funds are combined,
directly or indirectly, for the purchase of redeemable securities of a
registered investment company whether jointly or through a trustee,
agent, custodian or other representative for such a group of
individuals.
To qualify for the lower Creation and Sales Charges, all of the
applications for the Plans involved must be submitted at the same
time, with a letter from the Planholder or his investment professional
requesting that the face amounts of such Plans be combined for the
purpose of determining the applicable Creation and Sales Charges as
shown on pages 11 and 12. In the event investments under one or more
of such Plans are discontinued, the remaining Creation and Sales
Charges will be changed to reflect the charges applicable to that Plan
that remains in effect.
3. RIGHTS OF ACCUMULATION
The face amount of Plans which have been completed (and not redeemed)
or on which the investments are current may be aggregated in
ascertaining the Creation and Sales Charges applicable to a new
purchase of a Plan by "any person," as defined above. A current Plan
is defined as a Plan where there are at least as many investments
recorded as there are months elapsed since establishment. To qualify
for the reduced Creation and Sales Charges available on large
purchases, the combined monthly investment must be at least $150 on
15-year Plans and $200 on 10-year Plans. Qualified retirement plans
shall be considered current for this purpose at all times. Further,
individual IRA Plans at the $166.66 per month investment unit may be
combined with other newly purchased plans or plan size increases that
may qualify for lower sales charges on future investments. This
privilege is optional and can only be exercised with the purchase of a
new Plan or a Plan size increase on another existing Plan. The Sponsor
must be notified in writing, if the Planholder wishes to exercise this
privilege. However, 10-year and 15-year Plans may not be combined in
order to take advantage of this privilege.
RIGHTS AND PRIVILEGES OF PLANHOLDERS
1. DISTRIBUTIONS
Unless otherwise directed, all dividends and other distributions,
after applicable deductions, are automatically used to purchase
additional Fund shares at NAV as of the record date for the
distribution. No sales charge is made on any such reinvestment.
If a Planholder wishes to receive the dividends and other
distributions in cash - rather than additional shares - the Planholder
must instruct Boston Financial in writing. Such instructions must be
received at least seven days prior to the record date of a dividend or
distribution. A Planholder may change these instructions at any time.
A charge of $2.50 is assessed for each change. However, distributions
on Individual Retirement Accounts will be automatically reinvested
unless the Planholder is age 59 1/2 or older.
Dividends and other distributions are made on a per-share basis.
After every distribution, the value of a share drops by the amount of
the distribution. If an investment is made shortly before the
ex-dividend date of the dividend or distribution, the Planholder will
pay the full price for the shares (buying a dividend). Dividends and
distributions, if declared, normally are paid by each Fund annually
and are reportable by Planholders for income tax purposes (see "Taxes"
on page ).
2. FEDERAL INCOME TAX WITHHOLDING
As an additional service, Boston Financial can withhold 28% of any
dividend or other distribution paid by the Funds and send that amount
to the Internal Revenue Service (IRS) as a credit against the
Planholder's tax liability, if any. The amount withheld may or may not
be equal to the additional taxes the Planholder may owe, due to the
dividend or distribution. If the Planholder elects to authorize this
withholding, the number of Fund shares purchased with the remainder of
the dividend or distribution will be less than would have otherwise
been the case.
This service is available only to Plans that reinvest their dividends
and other distributions but is not available for tax- advantaged
retirement plans, including IRAs. This option can be initiated by
completing the Tax Withholding Form and submitting that to Boston
Financial at least 30 days in advance. Once initiated, this will
remain in effect until Boston Financial is notified in writing to
terminate the withholding.
3. TRANSFERRING OR ASSIGNING RIGHTS IN THE PLAN
To secure a loan, Planholders (excluding Planholders of Destiny IRAs,
UTMA Plans, and UGMA Plans) may assign their right, title and interest
in the entire Plan to a bank or other lending institution. Partial
assignment is not permitted. The bank or other lending institution
will not be entitled to exercise the right of partial withdrawal or
partial redemption. In addition, a Planholder may:
1. transfer the Planholder's right, title, and interest to another
person whose only right shall be the privilege of complete withdrawal
from the Plan; or
2. transfer the Planholder's right, title, and interest to another
person, trustee, or custodian acceptable to the Sponsor, who has made
application to the Sponsor for a similar Plan. Additional
documentation may be required.
Boston Financial will provide Planholders with the appropriate
assignment forms. A charge of $2.50 is made for each transaction plus
transfer taxes, if any.
4. RETAINING FULL VOTING RIGHTS IN FUND SHARES
The Planholder will receive a notice at least 15 days before any
matter is submitted for a vote of the shareholders of Fidelity Destiny
Portfolios: Destiny I and Destiny II. The Custodian will vote the
shares held in the Planholder's account in accordance with the
instructions. In the absence of such instructions, the Custodian will
vote these shares in the same proportion as it votes the shares for
which it has received instructions from other Planholders.
A Planholder wishing to attend any meetings at which shares may be
voted may request Boston Financial to furnish a proxy or otherwise
make arrangements for exercising voting rights.
5. MAKING PREINVESTMENTS TO COMPLETE THE PLAN AHEAD OF
SCHEDULE
A Plan may be completed ahead of schedule by making investments in
advance of their due date , but not more than 24 investments ,
including any regular monthly investments, may be made in any single
calendar year. In addition, a Planholder may make an additional
prepayment in a single lump sum equal in amount to no more than 24
investments. This prepayment option may be exercised only once, either
initially, or at any time during the life of the Plan. Investments
may be accrued and paid in a lump sum. The se preinvestment
provision s may be waived ONLY to make a Plan that is in arrears
current, as defined on page 15, for a transfer of assets from a
tax- advantaged retirement plan to a Destiny
tax- advantaged retirement plan or in the event of the death of
the Planholder, to allow the Plan to be completed at one time by the
estate or beneficiary. There is no reduction in the Creation and Sales
Charges for advance investments. However, on multiple investments, the
Custodian's Fee cannot exceed $5. This is described more fully under
the heading "Custodian Fees" on page .
6. CHANGING THE FACE AMOUNT OF THE PLAN
A Planholder may increase the face amount of a Plan at any time. The
new Plan must be one of the denominations listed on pages 11 and 12.
For the period of six months following establishment of a new Plan, a
Planholder may decrease the amount of his Plan by as much as 50%. For
the period of six months following a face change increase, a
Planholder may decrease the amount of his Plan back to its previous
Plan size. Request for changes in the face amount of a Plan should be
sent to Boston Financial along with a completed Plan Application for
the new face amount. If Planholders wish to take advantage of the
$0.75 reduced Custodian Fee as described on pages 15 and , the
appropriate forms should be attached. An increase or decrease in a
Plan amount does not create new cancellation and refund rights.
However, the new Plan will be subject to the fees and deductions
applicable to Plans of the same plan size opened at the time of the
face change, as described in the then-effective prospectus. The
Creation and Sales Charges already paid on the existing Plan will be
recomputed and applied as a credit to the Creation and Sales Charges
due on the new Plan at the time that it is established. Any additional
Creation and Sales Charges due on the new Plan will be obtained from a
liquidation of Fund shares. A charge of $2.50 will be made for any
change in Plan size.
7. EXTENDED INVESTMENT OPTION
Under a 15-year Plan, a Planholder may continue making monthly
investments after completing all scheduled investments, thereby
automatically activating the Extended Investment Option. (10-year
Plans cannot be extended unless they are face changed to 15-year
Plans, thereby enabling the Planholder to benefit from the Extended
Investment Option.) Investments under this option are subject to the
same deductions (with the exception of the Custodian Fee) as applied
to the Planholder's last scheduled investment. The Custodian reserves
the right to increase the Custodian Fee applicable to this period to
the rate then being charged for new Plans of the same plan
size . In no case, however, will this new rate be more than 75%
higher than the Custodian Fees detailed in this Prospectus.
If, under this option, the Planholder fails to make regularly
scheduled investments for six consecutive months, after being credited
for any advance investments made under the option, the Plan may be
terminated by the Sponsor or the Custodian.
When the Extended Investment Option expires either through failure to
make required monthly investments or upon written notice of
termination to Boston Financial or for any other reason, the Custodian
has the right to increase the fee to the rate currently being charged
for new Plans of the same denomination. In no case, however, will this
new rate be more than 75% higher than the current annual rate of the
Custodian Fees.
All Extended Investment Options will terminate after the completion
of the 300th investment made under the Plan.
8. PARTIAL LIQUIDATION OF YOUR PLAN WITHOUT TERMINATION
While a redemption of all of the Plan shares normally will terminate
the Plan, a Planholder may sell (redeem) less than all of the shares
without terminating the Plan. If the Planholder has owned the Plan for
at least 45 days, the Planholder may direct the Custodian, as agent,
to sell up to 90% of the value of the Planholder's shares, expressed
in dollars, and to pay the proceeds to the Planholder. Any partial
sale of shares and cash withdrawal must involve at least $100 and may
be exercised as often as desired.
If the cash withdrawal is over $100,000, or if the proceeds are to be
sent to an address other than the address of record, a signature
guarantee will be required. A signature guarantee is a widely accepted
way to protect you and Fidelity by guaranteeing the signature on your
request; it may not be provided by a notary public. Signature
guarantees will be accepted from banks, brokers, dealers, municipal
securities dealers, municipal securities brokers, government
securities dealers, government securities brokers, credit unions (if
authorized under state law), national securities exchanges, registered
securities associations, clearing agencies and savings associations.
All documents must be in proper order before any withdrawals or
liquidations can be executed. The redemption price will be at the next
determined NAV. The request should be sent to BOSTON FINANCIAL
DATA SERVICES, INC., P.O. BOX 8300, BOSTON, MASSACHUSETTS 02266-8300.
If you prefer, you may also withdraw an amount not in excess of
$100,000 from your Plan, subject to the conditions applicable to
withdrawals (please see above), by calling 1-800-225-5270. The
telephone redemption privilege is not available to Planholders of
Destiny tax -advantaged retirement plans. If you change your
address, the telephone redemption privilege is not allowed within 30
days of that change. To redeem shares within 30 days of a change of
address, Planholders must send a signature guaranteed letter of
instruction to Boston Financial.
Redemption requests must be made by 4:00 p.m. Eastern time.
Planholders will receive proceeds by check made payable as the account
is registered and mailed to the address of record.
Ordinarily, Planholders will be sent the proceeds as a result of
liquidating shares within seven calendar days from the time Boston
Financial is notified. However, Boston Financial will not mail
redemption proceeds until checks received for the shares purchased
have cleared (which may take up to 7 calendar days).
Following the sale of Destiny Plan shares, a Planholder may -
although there is no obligation to do so - repurchase Destiny Plan
shares in an amount not to exceed the dollar amount of the original
sale. This Replacement Privilege extends for an unlimited amount of
time, provided a "waiting period" of 90 days passes between the sale
and subsequent repurchase of those Destiny Plan shares. For
Planholders of the Destiny IRA, the waiting period is 45 days. For
example, if shares of a Destiny IRA were withdrawn, the Planholder
could reinvest in the Destiny Plans a dollar amount equal to the
amount of the original withdrawal at any future time, provided 45 days
had elapsed. In the event assets are distributed directly to the
Planholder from a Destiny IRA, the Planholder will be responsible for
the income taxes on the distribution and, if under age 59 1/2, an
early distribution penalty, if those assets are not reinvested into
another IRA within 60 days of receipt of the distribution. The
privilege to replace those Destiny Plan shares at any time in the
future would, however, still apply, and the replacement need not be
made in one transaction. Regardless of the Plan type, all replacements
must be at least 25% of the amount withdrawn or $2,000, whichever is
less and are reinstated at the next determined NAV. All withdrawal
requests must be made in writing and signed by the Planholder(s). The
Custodian or Boston Financial may require additional documentation.
The partial liquidation and restoration privilege is intended to
facilitate the temporary use for emergency purposes of funds invested
in a Plan. The Sponsor reserves the right to limit the number of
transactions in which a partial withdrawal can be replaced. The
Sponsor further reserves the right to impose such additional
restrictions as, in its judgment, are necessary to conform with the
requirements of Rule 2830 of the Rules of the Association of the
National Association of Securities Dealers, Inc. (NASD).
Cash replacements will be applied to the purchase of Fund shares at
the next determined NAV. No partial withdrawal or liquidation shall
affect the total number of monthly Plan investments to be made or the
unpaid balance of monthly Plan investments.
A charge of $2.50 will be made for each partial withdrawal,
redemption or restoration, and the Planholder will be liable for any
transfer taxes that may be incurred. Replacements of partial
withdrawals should be identified clearly as such, in order to
distinguish them from additional investments. A capital gain or loss
for federal tax purposes may be realized by the Planholder upon a cash
withdrawal.
9. SYSTEMATIC WITHDRAWAL PROGRAM
When all regularly scheduled investments are completed, a Planholder
may elect to establish a Systematic Withdrawal Program. An IRA does
not have to be completed if a Planholder is 59 1/2 years old or wishes
to start a Systematic Withdrawal Plan based on life expectancy. Under
this program, the Custodian, as the Planholder's agent, withdraws
sufficient shares from the Plan account to provide regular cash
withdrawals of $50 or more each month or quarter, as elected. Except
for the $50 minimum, there is no limitation on the size of the
Planholder's withdrawals. The $50 amount is, however, only a minimum
established for administrative convenience and should not be
considered a recommendation for all Planholders. A Planholder has the
right to change the dollar amount of the withdrawal or discontinue the
Systematic Withdrawal Program at any time. Systematic withdrawals
occur on the first day of the month, quarter, or selected period.
The Plan will remain in full force and effect with all rights and
privileges until all shares have been withdrawn from the account.
While the Systematic Withdrawal Program is in force, the Planholder
may not elect to receive dividends and distributions in cash.
Planholders should realize that withdrawals in excess of dividends and
distributions will be made from principal and eventually may exhaust
the Plan account. For this reason, these withdrawals cannot be
considered as income on the Planholder's investment. Also, a capital
gain or loss for federal tax purposes may be realized by the
Planholder upon each withdrawal payment. If a Planholder purchases two
or more Plans, it is ordinarily disadvantageous to participate in the
Systematic Withdrawal Program on a completed Plan while still making
regular investments on the uncompleted Plan.
A charge of $1 per check will be made for each withdrawal under a
Systematic Withdrawal Program. This charge is collected by redeeming
the necessary fractional shares. For any withdrawal made 10 years
after the issuance of a Plan, the charge may then be increased to the
amount specified in the then current Prospectus. However, this charge
may not exceed $1.75.
While the Sponsor does not contemplate doing so, it reserves the
right to discontinue offering the Systematic Withdrawal Program at any
time after 90-days notification to all Planholders who have not
elected to participate in the program. Those who are already
participating will be allowed to continue.
10. CANCELLATION AND REFUND RIGHTS
Planholders have certain rights of cancellation. Within 60 days after
the initial investment in a new Plan, the Sponsor will send the
Planholder notice regarding cancellation rights. If a Planholder
elects to cancel his Plan within 45 days of the mailing date of that
notice, a cash refund will be received which is equal to the sum of
(1) the total net asset value of the Fund shares credited to the Plan
account on the date that the cancellation request is received by
Boston Financial, and (2) an amount equal to the difference between
the total investments made under the Plan and the net amount invested
in Fund shares (including all Custodian Fees paid to date).
In addition, Planholders may provide to Boston Financial written
instructions to cancel their Plan at any time within an 18-month
period of Plan establishment and receive from Boston Financial a cash
payment equal to the sum of (1) the total net asset value of the Fund
shares credited to the Plan account upon receipt of those
instructions, and (2) an amount by which the Creation and Sales
Charges deducted from the Planholder's total investments exceed 15% of
the investments made up to the date of redemption. Custodian Fees,
which may amount to 2.2% of the total investments, are not subject to
refund.
In order to receive the above refunds, the Planholder's request
should be sent in writing to Boston Financial Data Services, Inc.,
P.O. Box 8300, Boston, Massachusetts 02266-8300. For your protection,
if the Planholder's cancellation request involves over $100,000, or if
the proceeds are to be sent to an address other than the address of
record, you must send a letter of instruction signed by all registered
owners with signature(s) guaranteed to Boston Financial.
A Planholder who has redeemed shares under this Cancellation and
Refund Rights may not reinstate the proceeds at NAV from such a
cancellation or refund, except as mentioned under the "Plan
Reinstatement Privilege" discussed below. Under the so-called "wash
sale rule," federal tax laws presently do not permit the recognition
of a loss when an individual sells and re-acquires the same securities
within a 30-day time period. Gains, however, are recognized at the
time of redemption.
The Sponsor will send the Planholder a written notice of the 18-month
right of cancellation if either of the following occurs: (a) during
the first 15 months after the date of issuance of Plan establishment,
the Planholder has missed three investments or more; or (b) if
following the first 15 months after the date of Plan establishment
(but prior to 18 months after such date), the Planholder has missed
one investment or more. In the event the Sponsor has previously sent a
notice in connection with event (a) above, a second notice will not be
sent even if additional investments are missed. These notices will
inform Planholders of their Plan cancellation rights as described on
page 17, and also will include the value of the account and the amount
the Planholder would be entitled to receive upon cancellation, as of
the date of the notice.
11. TERMINATING THE PLAN AND WITHDRAWAL OF SHARES
After an initial period of 60 days, a Planholder may terminate his
Plan by sending written instructions to Boston Financial. In this way,
a Planholder avoids paying the commission that a security dealer can
charge for terminating a Plan. A charge of $2.50 is made for
terminating a Plan on which investments have not been completed.
In terminating the Plan, the Planholder may: (1) request the
Custodian of the Plan to deliver to Fidelity Service Company, Inc.
(Service), the transfer agent of the Funds, the Fund shares
accumulated in the Plan for at least 60 days, properly registered in
the Planholder's name; (2) direct the Custodian, as agent, to withdraw
the shares and redeem them and to send the proceeds to the Planholder;
or (3) reinvest the proceeds in any of the Fidelity Advisor Funds by
requesting the Custodian of the Plan to deliver to Boston Financial,
as agent for the Fidelity Advisor Funds, the proceeds of the Plan for
investment at NAV into a similarly registered account. (A Fidelity
Advisor Funds application is required.) For your protection, if the
cash withdrawal is over $100,000, or if the proceeds are to be sent to
an address other than the address of record listed on the account, you
must send a letter of instruction signed by all registered owners with
signature(s) guaranteed to Boston Financial. All documents must be in
proper order before any withdrawals or liquidations can be executed.
The redemption price will be the NAV next determined after such
documents have been received. Requests should be sent to BOSTON
FINANCIAL DATA SERVICES, INC., P.O. BOX 8300, BOSTON, MASSACHUSETTS
02266-8300.
Shares held by investors as a result of this action may be exchanged
for shares of certain other funds for which FMR is the investment
adviser as more fully described in the attached Fidelity Destiny
Portfolios' Prospectus under the caption "Exchange Restrictions" on
page of the Destiny Portfolios prospectus. When held in conjunction
with the Plan, shares of Destiny I may not be exchanged for shares of
Destiny II, nor may shares of Destiny II be exchanged for shares of
Destiny I.
The right of redemption of shares of Destiny I and Destiny II may be
suspended at times when the New York Stock Exchange is closed or in
the event certain other emergencies have been determined to exist by
the Securities and Exchange Commission. As long as the right of
redemption of shares of each Fund is suspended, no shares may be
redeemed, and, therefore no cash withdrawal may be made.
12. EXCHANGES
Shares of completed or terminated Plans may be converted into
shares of the related fund. Thereafter, fund shares may be exchanged
at NAV for shares of any of the Fidelity funds, including the Fidelity
Advisor Funds, subject to minimum initial investment requirements. For
more information, see "Exchange Restrictions" on page of the Destiny
Portfolio Prospectus.
1 3 . PLAN REINSTATEMENT PRIVILEGE
A Planholder who has terminated his Plan may reinstate his Plan,
which allows for the reinvestment of an amount equal to or at least
10% of the gross proceeds received upon termination of the former Plan
without any sales charge under identical registration in the original
Plan including re-registration from one retirement account to another.
Reinstatement is at the NAV of the Fund into which reinvestment is
made, next determined following timely receipt by Boston Financial of
a reinstatement order and investment. Reinstatement must be made
within 9 0 days following the date of termination of the Plan. A
reinstating Planholder will realize a gain or loss for federal tax
purposes as a result of a termination of the Plan; however, the
Planholder may not recognize a loss for federal tax purposes to the
extent the Planholder reinvests the proceeds within 30 days in a
Destiny Plan pursuant to the Plan Reinstatement Privilege.
The Plan Reinstatement Privilege is available once during the life of
the Plan, unless reinstatement is requested from one retirement
account to another. The Plan Reinstatement Privilege does not preclude
the partial withdrawal without the Plan termination privilege
described on page 16. A Planholder who has redeemed his shares under
the Cancellation and Refund Rights described on page 17, may not
reinstate the proceeds at NAV from such a cancellation or refund until
all refunded Sales and Creation charges included in the cancellation
have first been deducted in full from the amount being replaced.
A reinstatement into the Plan will not affect the total number of
monthly investments to be made or the unpaid balance of the monthly
Plan investments under the Plan.
In addition, the Sponsor may, from time to time, extend the Plan
Reinstatement Privilege beyond the 9 0-day period on the
following terms:
1. The Planholder must establish the new Plan with an investment equal
to or at least 10% of the gross proceeds received upon termination of
the former Plan.
2. The number of the next investment due on the new Plan will be the
number of the next investment due on the former Plan at the time it
was terminated.
The ability to establish such new Plans generally will not be
available, except during such limited time periods as may be specified
by the Sponsor from time to time.
SPONSOR AND CUSTODIAN CHARGES
1. CREATION AND SALES CHARGES
The Sponsor receives Creation and Sales Charges to compensate it for
creating the Plan and for selling expenses and commissions paid to
broker-dealer firms. This charge is deducted from each investment. For
example, on a $50 a month Plan, $25 is deducted from each of the first
12 investments. After the first 12 investments, the charge drops to
$1.80 on each subsequent investment in the case of a 10-year Plan and
$2.86 in the case of a 15-year Plan. The rate (percent) of deductions
decreases proportionately as Plan sizes increase. See pages 11 and 12.
2. CUSTODIAN FEES
On minimum sized Plans - 10 or 15 years - the Custodian Fee is $1.10
per investment. Charges on larger Plans are proportionately less,
relative to their monthly investment, than Custodian Fees charged on
smaller Plans. Accounts established under an Automatic Investment
Program after November 29, 1993 will receive a reduced Custodian Fee
of $0.75 (see page 15). The Custodian Fee charged per account at any
one time may not - regardless of the number of investments made -
exceed $5 per investment. Thus, if the Planholder submits multiple
investments into one account, such that the aggregate amount would
result in a Custodian Fee of more than $5, the fee will instead be
deducted at the maximum rate of $5.
In addition to this fee, the Custodian deducts an annual service
charge from dividends and distributions, and if necessary, from
principal, as reimbursement for administrative costs. The amount of
such charge will be determined by prorating the Plan's annual
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. Subsequent to January 1, 1986, this charge is
subject to increases by the Sponsor, in the aggregate not to exceed
increases in the Consumer Price Index. For Plans established prior to
January 1, 1986 and after October 30, 1982, this service charge cannot
exceed $10 per year. For Plans established prior to October 31, 1982,
this charge cannot exceed $2 per year.
After the completion of the Plan or, if a Planholder has made
investments in advance of the time period specified in the Plan, the
Custodian's annual fee, after completion of the specified time period,
is of 1% of the face amount of the Plan or $12, whichever is less. As
an investor, the Planholder may, of course, terminate the Plan and
receive shares of the Fund and thus avoid the Custodian Fees; however,
the Planholder then will no longer be eligible for the privilege of
partial withdrawal and reinstatement at NAV. The Custodian also
deducts a $12 inactive account fee for Plans on which no
investment has been made for a 12-month period , after giving
credit for advance investments (inactive account fee). This fee is
deducted from dividends and distributions or, if these are not
sufficient, the Custodian has the right to obtain the amount needed to
pay its fee by selling shares.
3. INCIDENTAL SERVICE FEES
The Custodian deducts the fees described below and such other charges
as may be provided for in the Agreement or in the Plans. The Custodian
has certain rights to charge the accounts of the Planholders on a pro
rata basis or to retain shares on a pro rata basis in order to pay
fees, taxes or expenses in connection with the Plans or to set up
reserves; therefore, to such extent it has a lien upon the shares of
the Planholder.
The Custodian causes periodic audits to be taken of the records
maintained by it relating to the Plans, unless such audits are
arranged for by the Sponsor, and prepares certain other reports
required by law.
The Custodian has delegated certain administrative functions to
Boston Financial, an affiliate of the Custodian. Under the delegation
arrangement, the Custodian pays to Boston Financial a portion or all
of the Custodian Fees and other charges based on the functions which
it performs. Boston Financial mails to each Planholder a receipt for
each investment, a statement of the number of shares held in the Plan,
notices (including distribution notices and tax statements), reports
to shareholders, prospectuses and proxy material.
The Custodian makes charges for certain special services not covered
by the regular Custodian charge. These include a charge of $1 for each
withdrawal under the Systematic Withdrawal Program; a charge of $3 per
account per year for the preparation of a complete transcript and a
charge of $12 for each year on which no investment has been made for a
12-month period (inactive account fee). A charge of $2.50 will be made
for each of the following: any check or preauthorized check which is
not honored by the bank on which it is drawn; changing instructions as
to whether dividends and distributions are to be received in cash or
reinvested in Fund shares; changing a Plan denomination; a partial
withdrawal, liquidation or restoration of shares or money; a transfer
or assignment of title; a complete withdrawal or termination of a Plan
prior to completion; and the issuance of any Plan denomination in
exchange for a different Plan denomination. EXCEPT FOR THE $12
INACTIVE ACCOUNT FEE (TO INCLUDE COMPLETED PLANS), THE $2.50 PLAN
TERMINATION FEE, AND THE ANNUAL $10 DESTINY IRA MAINTENANCE FEE, THE
INCIDENTAL FEES DESCRIBED ABOVE WILL BE PAID BY THE SPONSOR
VOLUNTARILY. Although it has no current intention of doing so, the
Sponsor reserves the right to reimpose these fees at some future date.
TAXES
For tax purposes, Planholders are treated as directly owning the Fund
shares. As more fully described in the Fidelity Destiny Portfolios'
Prospectus, dividends and distributions paid to Planholders, or
reinvested for them, are taxable to them individually. An appropriate
notice regarding taxable distributions will be sent to Planholders.
Planholders may elect to instruct Boston Financial to withhold 28% of
dividends or distributions and have that amount sent directly to the
IRS. See page 16 for program details.
If Planholders itemize their deductions, they may be able to deduct
Custodian Fees that have been charged against the Plans to the extent
such fees along with the Planholder's other miscellaneous itemized
deductions exceed 2% of the Planholder's adjusted gross income (2%
floor). The cost basis of shares acquired by each Planholder is the
amount paid for those shares, including the Creation and Sales Charges
and the cost of reinvested distributions but not including the
Custodian Fees. In addition, Planholders with IRAs who itemize their
deductions may claim as a miscellaneous itemized deduction (subject to
the 2% floor discussed above), Administrative or Trustee fees incurred
in connection with the IRA if such fees are separately billed or paid.
Any taxes payable with respect to any of the profits realized on
sales or transfers by the Custodian or Sponsor of each Fund's shares
or other property credited to an investor's account in accordance with
the provisions of his Plan and any taxes levied or assessed with
respect to the Funds' shares or the income therefrom shall be borne by
the Planholder individually, and not by the Custodian or Sponsor.
For a more complete and detailed discussion on taxes, see page
of Fidelity Destiny Portfolios' Prospectus.
SUBSTITUTION OF THE UNDERLYING INVESTMENT
The Sponsor may substitute the shares of another investment medium as
the underlying investment if it deems such action to be in the best
interest of the Planholders. Such substituted shares shall be
generally comparable in character and quality to the present Fund
shares, and shall be registered with the SEC under the Securities Act
of 1933. Before any substitution can be effected, the Sponsor must:
(A) obtain an order from the SEC approving such substitution;
(B) give written notice of the proposed substitution to the Custodian;
(C) give written notice of the proposed substitution to each
Planholder; giving a reasonable description of the new Fund shares,
with the advice that, unless the Plan is surrendered within 30 days of
the date of the mailing of such notice, the Planholder will be
considered to have consented to the substitution and to have agreed to
bear the pro rata share of expenses and taxes in connection with it;
and
(D) provide the Custodian with a signed certificate stating that such
notice has been given to the Planholder.
If the certificate is not surrendered within 30 days from the date of
this notice, the Custodian shall purchase the new shares for your
account with any dividends or distributions which may be reinvested
for your account. If the new shares are also to be substituted for the
shares already held, the Sponsor must arrange to have the Custodian
furnished, without payment of a sales charge or fees of any kind, with
new shares having an aggregate value equal to the value of the shares
for which they are to be exchanged.
If Fund shares are not available for purchase for a period of 120
days or longer, and the Sponsor fails to substitute other shares, the
Custodian may, but is not required to, either select another
underlying investment or terminate the Plan. If the Custodian selects
a substitute investment, it shall first obtain an order from the SEC
approving such substitution as specified above and then shall notify
the Planholder, and if, within 30 days after mailing such notice, the
Planholder gives his written approval of the substitution and agrees
to bear the pro rata share of actual expenses, including tax liability
sustained by the Custodian, the Custodian may thereafter purchase such
substituted shares. The Planholder's failure to give such written
approval within the 30-day period shall give the Custodian the
authority to terminate the Plan.
TERMINATION OF A PLAN
Although a Plan may call for regular investments over a 10- or
15-year period, neither the Sponsor nor the Custodian can terminate
your Plan until 300 investments have been made unless the Plan has
been in default for more than six consecutive months or unless shares
of the Fund are not obtainable and a substitution is not made. The
year of default will not start until the Planholder has been given
full credit for the amount of any preinvestments made. Under current
policies, ONE INVESTMENT IS REQUIRED DURING EACH 6-MONTH PERIOD OF THE
CALENDAR YEAR TO PREVENT THE PLAN FROM BEING IN DEFAULT.
After 300 investments, or if other events justify termination, the
Sponsor or the Custodian has the right to terminate a Plan 60 days
after mailing the Planholder written notice. Such notice will request
that the Planholder elect to have the Plan either distributed in cash
or in Fund shares (together with the cash value of any fractional
shares) after deduction for all authorized charges, fees and expenses.
On termination, the Custodian, acting as the Planholder's agent, may
surrender for liquidation all of the Fund shares credited to the Plan,
or sufficient shares to pay all authorized deductions and leave no
fractional shares. The shares and/or cash, after paying all authorized
deductions, will be held by the Custodian for delivery to the
Planholder.
No interest will be paid by the Custodian on any cash balances. If
the Planholder does not respond within 60 days after the notice of
termination, the Custodian, at its discretion, may at any time
thereafter fully discharge its obligations by mailing the check for
the liquidated value of the shares to the Planholder. The Planholder
will then have no further rights under the Plan except that if the
check is returned to the Custodian undelivered, the Custodian will
continue to hold these assets for the benefit of the Planholder,
subject only to escheat laws and without obligation to pay interest or
to reinvest the same.
THE CUSTODIAN AND SPONSOR
1. THE CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, is the Custodian for the Plans under a Custodian
Agreement (the Agreement) with the Sponsor and maintains custody of
the Plans.
Investments under the Plans are sent to Boston Financial who, after
making authorized deductions, applies the money to the purchase of
Fund shares. Investments in Destiny Plans I purchase shares of Destiny
I; investments in Destiny Plans II purchase shares of Destiny II. The
Custodian holds these shares in its custody, receiving dividends and
distributions that, at the Planholder's option, may be remitted either
to the Planholder or reinvested in additional Fund shares.
The Custodian has assumed only those obligations specifically imposed
on it under its Agreement with the Sponsor. These obligations do not
include the duties of investment ordinarily imposed upon a trustee.
The Custodian has no responsibility for the choice of the underlying
investment, for the investment policies and practices of the manager
of the Fund or for the acts or omissions of the Sponsor.
The Agreement cannot be amended to affect the rights and privileges
of any investor without written consent of the Planholder, nor may the
Custodian resign unless a successor has been designated and has
accepted the Custodianship. Such successor must be a bank or trust
company having capital, surplus and undivided profits totaling at
least $2,000,000. The Custodian may be changed without notice to, or
approval of, Planholders. The Custodian may terminate its obligation
to accept new Plans for custodianship if the Sponsor fails to perform
certain activities it is required to perform under the Agreement or if
the Custodian terminates after the third year of the life of the
Agreement on 90 days' notice, or after the expiration of any further
two-year period on 30 days' notice.
2. THE SPONSOR
Fidelity Distributors Corporation (Distributors or Sponsor ),
82 Devonshire Street, Boston, Massachusetts 02109, is a Massachusetts
corporation organized on July 18, 1960. It is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of
the NASD. The Sponsor's Directors and Executive Officers are listed
below.
Edward C. Johnson 3d, Director, is Chairman, Chief Executive Officer
and a Director of FMR Corp., a Director and Chairman of the Board and
of the Executive Committee of FMR ; Chairman and a Director of
Fidelity Investments Money Management, Inc. (1988 - present) ,
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc. He is Trustee and President of Fidelity's
mutual funds. Abigail Johnson, Vice President of certain Fidelity
equity funds, is Mr. Johnson's daughter.
James C. Curvey, Director (1997 - present ), is President of
FMR Corp (1998 - present).
Martha B. Willis , President and Director
(1997 - present ).
Kevin J. Kelly, Vice President, is President of Fidelity
Investments Institutional Services Company, Inc.
(1997 - present).
Eric D. Roiter , Vice President and Clerk (1998 - present) ,
is Vice President, General Counsel and Clerk of FMR
(1998 - present).
Caron Ketchum, Treasurer and Controller (1995 -
present) .
Gary Greenstein, Assistant Treasurer (1995 - present ).
Jay Freedman, Assistant Clerk (1996 - present ) .
Linda Capps Holland, Compliance Officer (1995 - present ).
During the twelve months ended September 30, 199 8 , officers of
the Sponsor received no compensation from the Sponsor for their
services to the Sponsor. All officers and employees of the Sponsor are
currently covered by a broker's blanket bond in the amount of
$220,000,000.
Plans may be purchased and investments made thereunder at NAV by any
of the following: Trustees of the Funds, directors, officers and
full-time employees of FMR Corp. (or its direct or indirect
subsidiaries) or by employee benefit plans covering employees of FMR
Corp. or its affiliates, provided such purchases are made for
investment purposes and that the shares will not be resold except to
the Custodian or to the Funds.
The Sponsor is an affiliate of FMR, which is a wholly owned
subsidiary of FMR Corp. The Sponsor is principal underwriter for other
Fidelity funds whose shares are offered for sale to the public and is
sponsor for other unit investment trusts for accumulation of shares of
certain other Fidelity funds. FMR is adviser to the funds in the
Fidelity family of funds.
GENERAL
The terms of the Plans are set out in a Custodian Agreement which is
governed by the laws of t he Commonwealth of Massachusetts. The
Plans are considered to be a unit investment trust under the
Investment Company Act of 1940, and are so registered with the SEC.
Such registration does not imply supervision of management or
investment practices or policies by the SEC.
The organization, management and investment policies of Fidelity
Destiny Portfolios are fully described in the Funds' Prospectus
beginning on page F-1. Generally, shares of the Funds are purchased at
NAV within two business days of the date the Custodian receives Plan
investments. Dividends and distributions received on Fund shares will
be reinvested by the Custodian, after making authorized deductions, in
additional shares of the Fund at the then current NAV unless otherwise
directed by the Sponsor or unless the Planholder directs Boston
Financial to remit them to the Planholder in cash.
Commissions and Servicing Charges ranging from 40% to 93% of the
total Creation and Sales Charges will be paid to authorized investment
broker-dealer firms and mutual fund dealers that are members of the
NASD and have executed a Destiny Dealer Agreement with the Sponsor.
From time to time the Sponsor may increase the commissions paid to
broker-dealer firms to 100%. Also, the Sponsor will, at its expense,
provide promotional incentives such as sales contests and luxury trips
to investment professionals who support the sale and service of the
Destiny Plans without reimbursement from the Fidelity Destiny
Portfolios . In some instances, these incentives may be offered
only to certain investment professionals whose representatives provide
services in connection with the sale or expected sale of significant
amounts of Destiny Plans. These broker-dealer firms are
independent contractors. Nothing herein or in other literature and
confirmations issued by the Sponsor, the Custodian or Boston Financial
including the words "representative" or "commission," shall constitute
any broker-dealer, a partner, employee or agent of the Sponsor, the
Custodian or Boston Financial. Neither the Sponsor, the Custodian nor
Boston Financial shall be liable for any acts or obligations of any
such dealer or investment broker.
Fidelity Systematic Investment Plans are currently offered for sale
in all states. Ohio salesmen must be registered under the Ohio Bond
Debenture Act.
ILLUSTRATION OF A HYPOTHETICAL $50 MONTHLY
DESTINY PLANS I
IN TERMS OF AN ASSUMED INITIAL INVESTMENT OF $50 AND SUBSEQUENT
INVESTMENTS OF $50 PER MONTH
WITH INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS REINVESTED IN
ADDITIONAL SHARES
The table below covers the period from October 198 3 to
September 199 8 , with all investments made at the end of each
month.
This period was one of widely fluctuating common stock prices. The
results shown should not be considered a representation of the
dividend income or capital gain or loss in the Plans today. Such Plans
cannot assure a profit or protect against depreciation in declining
markets.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DEDUCTIONS(A
)
INVESTM FISCAL CUMULATIVE ANNUAL SALES ANNUAL TOTAL ANNUAL
ENT NO. YEAR INVESTMENTS CHARGES CUSTODIAN SHARES DIVIDEND
ENDED FEES(B) INCOME
REINVESTED
1-12 Sept-84 $600.00 $300.00 $13.20 27.366 $5.81
13-24 Sept-85 1,200.00 34.32 13.20 83.298 30.16
25-36 Sept-86 1,800.00 34.32 13.20 150.575 37.16
37-48 Sept-87 2,400.00 34.32 13.20 219.696 49.31
49-60 Sept-88 3,000.00 34.32 13.20 294.318 60.84
61-72 Sept-89 3,600.00 34.32 13.20 355.596 92.49
73-84 Sept-90 4,200.00 34.32 13.20 437.848 124.33
85-96 Sept-91 4,800.00 34.32 13.20 499.458 155.33
97-108 Sept-92 5,400.00 34.32 13.20 631.546 169.81
109-120 Sept-93 6,000.00 34.32 13.20 751.075 186.81
121-132 Sept-94 6,600.00 34.32 13.20 835.533 83.20
133-144 Sept-95 7,200.00 34.32 13.20 1038.008 285.84
145-156 Sept-96 7,800.00 34.32 13.20 1137.143 448.41
157-168 Sept-97 8,400.00 34.32 13.20 1286.623 513.60
169-180 Sept-98 9,000.00 34.32 13.20 1449.719 606.44
$9,000.00 $780.48 $198.00 $2,849.54
CUMULATIVE
TOTAL VALUE
OF SHARES
INVESTM FISCAL YEAR ANNUAL FROM FROM FROM CAPITAL TOTAL VALUE
ENT NO. ENDED CAPITAL GAIN INVESTMENT DIVIDENDS GAINS OF PLAN(C)
DISTRIBUTION
S REINVESTED
1-12 Sept-84 $29.24 $262.48 $6.48 $32.61 $301.57
13-24 Sept-85 74.75 760.23 35.42 103.97 899.62
25-36 Sept-86 294.92 1,315.61 74.94 399.79 1,790.34
37-48 Sept-87 421.88 2,210.16 141.66 910.67 3,262.49
49-60 Sept-88 211.03 2,354.54 181.08 972.65 3,508.27
61-72 Sept-89 182.13 3,550.10 329.44 1,401.07 5,280.61
73-84 Sept-90 403.95 3,109.53 350.09 1,387.35 4,846.97
85-96 Sept-91 202.40 5,029.67 654.71 2,177.10 7,861.48
97-108 Sept-92 1,274.50 5,327.10 799.52 3,371.83 9,498.45
109-120 Sept-93 1,162.83 6,543.76 1,097.45 5,021.92 12,663.13
121-132 Sept-94 786.61 7,431.60 1,241.38 6,115.95 14,788.93
133-144 Sept-95 2,127.00 8,505.43 1,694.10 9,294.26 19,493.79
145-156 Sept-96 844.67 9,826.41 2,340.70 11,041.98 23,209.09
157-168 Sept-97 1,974.51 12,700.52 3,520.97 16,047.01 32,268.50
169-180 Sept-98 2,619.32 12,989.27 4,102.56 18,542.26 35,634.09
$12,609.74 TOT $35,634.09
AL
</TABLE>
NOTES:
(A) Under the terms of this Plan, out of the initial investment of
$50, $25 is deducted as a sales charge from the initial investment and
from each of the next 11 investments for an annual charge of $300.
Additional deductions are $1.10 for Custodian Fees from each
investment for an annual charge of $13.20. Deductions from the first
12 investments therefore total $313.20 or 52.20% of the first 12
monthly investments. If all of the 15 years' investments are made,
total sales charges and Custodian Fees amount to 10.87% of the total
agreed investments.
(B) Exclusive of a s ervice c harge, payable first against
dividends and distributions and then, if necessary, against principal,
to cover certain administrative expenses actually incurred. The amount
of such charge will be determined annually by pro rating each Plan's
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year.
(C) Total is determined by Destiny I's fiscal year-end NAV.
No adjustments have been made for any income taxes payable by
investors on capital gain distributions and dividends reinvested.
ILLUSTRATION OF A HYPOTHETICAL $166.66 MONTHLY
DESTINY PLANS I
IN TERMS OF AN ASSUMED INITIAL INVESTMENT OF $166.66 AND SUBSEQUENT
INVESTMENTS OF $166.66 PER
MONTH WITH INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS REINVESTED
IN ADDITIONAL SHARES
The table below covers the period from October 198 3 to
September 199 8 , with all investments made at the end of each
month.
This period was one of widely fluctuating common stock prices. The
results shown should not be considered a representation of the
dividend income or capital gain or loss in the Plans today. Such Plans
cannot assure a profit or protect against depreciation in declining
markets.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DEDUCTION
S(A)
INVESTMEN FISCAL CUMULATIV ANNUAL ANNUAL TOTAL ANNUAL
T NO. YEAR E SALES CUSTODIAN SHARES DIVIDEND
ENDED INVESTMEN CHARGES FEES(B) INCOME
TS REINVESTE
D
1-12 Sept-84 $1,999.92 $999.96 $18.00 93.696 $19.90
13-24 Sept-85 3,999.84 75.96 18.00 286.551 103.73
25-36 Sept-86 5,999.76 75.96 18.00 518.456 127.92
37-48 Sept-87 7,999.68 75.96 18.00 756.744 169.84
49-60 Sept-88 9,999.60 75.96 18.00 1014.047 209.60
61-72 Sept-89 11,999.52 75.96 18.00 1225.367 318.69
73-84 Sept-90 13,999.44 75.96 18.00 1508.970 428.44
85-96 Sept-91 15,999.36 75.96 18.00 1721.442 535.36
97-108 Sept-92 17,999.28 75.96 18.00 2176.821 585.31
109-120 Sept-93 19,999.20 75.96 18.00 2588.926 643.92
121-132 Sept-94 21,999.12 75.96 18.00 2880.139 286.79
133-144 Sept-95 23,999.04 75.96 18.00 3578.179 985.32
145-156 Sept-96 25,998.96 75.96 18.00 3919.991 1,545.73
157-168 Sept-97 27,998.88 75.96 18.00 4435.347 1,770.50
169-180 Sept-98 29,998.80 75.96 18.00 4997.642 2,090.58
$29,998.80 $2,063.40 $270.00 $9,821.63
CUMULATIV
E TOTAL
VALUE OF
SHARES
INVESTMEN FISCAL ANNUAL FROM FROM FROM CAPITAL TOTAL VALUE OF PLAN(C)
T NO. YEAR CAPITAL INVESTMEN DIVIDENDS GAINS
ENDED GAIN T
DISTRIBUTI
ONS
REINVESTE
D
1-12 Sept-84 $100.10 $898.68 $22.20 $111.65 $1,032.53
13-24 Sept-85 257.06 2,615.98 121.69 357.08 3,094.75
25-36 Sept-86 1,015.37 4,531.28 257.73 1,375.44 6,164.45
37-48 Sept-87 1,453.09 7,615.46 487.49 3,134.69 11,237.64
49-60 Sept-88 726.97 8,115.37 623.39 3,348.68 12,087.44
61-72 Sept-89 627.59 12,238.05 1,134.42 4,824.22 18,196.69
73-84 Sept-90 1,392.09 10,720.50 1,205.81 4,777.99 16,704.30
85-96 Sept-91 697.59 17,341.77 2,255.35 7,498.38 27,095.50
97-108 Sept-92 4,392.87 18,368.26 2,754.57 11,616.56 32,739.39
109-120 Sept-93 4,008.14 22,564.41 3,781.32 17,303.57 43,649.30
121-132 Sept-94 2,711.44 25,626.79 4,277.36 21,074.31 50,978.46
133-144 Sept-95 7,331.97 29,330.64 5,837.81 32,029.75 67,198.20
145-156 Sept-96 2,911.73 33,886.80 8,066.58 38,053.65 80,007.03
157-168 Sept-97 6,806.60 43,799.07 12,134.72 55,304.71 111,238.50
169-180 Sept-98 9,029.54 44,795.51 14,139.70 63,906.83 122,842.04
$43,462.15 TOTAL $122,842.04
</TABLE>
NOTES:
(A) Under the terms of this Plan, out of the initial investment of
$166.66, $83.33 is deducted as a sales charge from the initial
investment and from each of the next 11 investments for an annual
charge of $999.96. Additional deductions are $1.50 for Custodian Fees
from each investment for an annual charge of $18. Deductions from the
first 12 investments therefore total $1,017.96 or 50.90% of the first
12 monthly investments. If all of the 15 years' investments are made,
total sales charges and Custodian Fees amount to 7.78% of the total
agreed investments.
(B) Exclusive of a s ervice c harge, payable first against
dividends and distributions and then, if necessary, against principal,
to cover certain administrative expenses actually incurred. The amount
of such charge will be determined annually by pro rating each Plan's
administrative costs over the total number of Plan accounts. For the
fiscal year ended September 30, 199 8 , the charge was
$ 6.72 for Destiny Plans I and $ 6.43 for Destiny Plans II
per Plan account. In addition, subsequent to January 1, 1986, this
charge is subject to increases by the Sponsor, in the aggregate not to
exceed increases in the Consumer Price Index. For Plans established
prior to January 1, 1986 and after October 30, 1982, this service
charge cannot exceed $10 per year. For Plans established prior to
October 31, 1982, this charge cannot exceed $2 per year.
(C) Total is determined by Destiny I's fiscal year-end NAV.
No adjustments have been made for any income taxes payable by
investors on capital gain distributions and dividends reinvested.
APPENDIX: GLOSSARY OF TERMS
COMPLETED PLAN: A Destiny Plan is considered completed once the Face
Amount of the Plan has been invested.
CONTRACTUAL PLAN: A type of capital accumulation plan in which the
investor makes a firm commitment to invest a specific amount of money
in a fund during a specified time period.
CURRENT PLAN: A plan in which there are at least as many investments
recorded as there are months elapsed since establishment of the plan.
DOLLAR-COST AVERAGING: A system of buying fixed dollar amounts of
securities at regular intervals, regardless of the price of the
shares. This method may result in an average cost that is lower than
the average price at which the securities were purchased because an
investment of a fixed dollar amount would buy more shares when the
share price is low and fewer shares when the share price is high.
FACE AMOUNT: The total dollar amount of investments needed to complete
a particular plan. For example, a $300 per month, 15 - year plan
would have a face amount of $54,000.
FACE CHANGE: Increasing or decreasing the amount of investments needed
to complete a particular plan is known as a Face Change. (See page 16
of the Plans' Prospectus for instructions on completing a Face
Change).
MUTUAL FUND: An investment company that pools capital from
shareholders and invests in stocks, bonds, options, or other
securities. They offer investors the advantages of diversification and
professional management.
RIGHTS OF ACCUMULATION: The right to apply reduced Creation and Sales
Charges based on the face amount of the Plan. (See pages 11 and 12 for
a schedule of creation and sales charges.)
SYSTEMATIC INVESTMENT PLAN: An investment program in which an investor
invests a specified amount of money in a fund at regular intervals. A
contractual plan is a special type of systematic investment plan (see
Contractual Plan above).
UNIT INVESTMENT TRUST (UIT): An investment company that has its own
portfolio of securities in which it invests. It sells interests in
this portfolio in the form of redeemable securities. Unit investment
trusts are organized under a trust indenture, not a corporate charter.
FIDELITY SYSTEMATIC INVESTMENT PLANS: DESTINY PLANS I
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 1998
ASSETS:
Securities of investment company: 241,669,303
shares of Destiny I held for investors, valued at
net asset value of $24.58 per share (Note 1)
(average cost $3,851,390,103) $ 5,940,231,473
Cash 222,414
Receivable for Destiny I shares sold 190,478
Total assets 5,940,644,365
LIABILITIES:
Payable for Destiny I shares purchased $ 331,469
Payable to custodian, sponsor and
broker/dealer (Note 4) 1,058,184
Total liabilities 1,389,653
NET ASSETS (Note 2) $ 5,939,254,712
Statements of Operations
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1998 1997 1996
INVESTMENT INCOME:
Distributions received
on shares of Destiny
I from:
Net investment
income $ 106,844,269 $ 96,561,988 $ 89,281,971
EXPENSES (Note 4):
Custodian Fees 415,994 394,357 367,960
Administrative
expenses 571,646 601,473 585,608
Net expenses 987,640 995,830 953,568
Net investment
income 105,856,629 95,566,158 88,328,403
REALIZED AND
UNREALIZED GAIN
ON INVESTMENTS:
Complete and partial
liquidations, including
Destiny I shares
delivered to investors
at market value:
Proceeds received 391,959,152 311,271,265 239,729,317
Cost of Destiny I
shares (243,294,998) (211,499,168) (176,894,004)
Net realized gain
on Plan
liquidations 148,664,154 99,772,097 62,835,313
Net (decrease)/
increase in
unrealized
appreciation (210,974,989) 993,262,758 300,213,194
Net realized and
unrealized gain/(loss)
on Plan shares (62,310,835) 1,093,034,855 363,048,507
Distributions received
on shares of Destiny
I from net realized
gains
on investments 461,476,309 371,227,198 168,182,318
Net increase in net
assets resulting
from operations $ 505,022,103 $ 1,559,828,211 $ 619,559,228
DESTINY PLANS I - FINANCIAL STATEMENTS - CONTINUED
Statements of Changes in Net Assets Invested in Shares of Destiny
I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
September 30, 1998 September 30, 1997 September 30, 1996
Amount Shares Amount Shares Amount Shares
Net assets at beginning of period
$5,726,389,970 228,364,289 $4,391,840,146 215,228,493 $3,908,031,571 208,146,062
Additions during period: From investor payments
164,550,079 119,944,885 123,968,130
Less: creation and sales charges (Note 4)
(5,911,794) (4,415,669) (4,613,942)
Custodian Fees and insurance premiums (Note 4)
(816,861) (832,079) (879,688)
Balance invested in Destiny I shares
157,821,424 6,409,698 114,697,137 5,401,996 118,474,500 6,323,547
Net investment income and net realized gains on investments
567,332,938 466,793,356 256,510,721
Less: Cash distributions to investors
(58,019,633) (28,704,259) (14,495,836)
Balance reinvested in Destiny I shares
509,313,305 22,269,509 438,089,097 21,927,033 242,014,885 13,211,616
Net realized gain on Plan liquidations
148,664,154 99,772,097 62,835,313
Net increase/(decrease) in unrealized appreciation
(210,974,989) 993,262,758 300,213,194
Total
6,331,213,864 257,043,496 6,037,661,235 242,557,522 4,631,569,463 227,681,225
Deductions during period: Redemptions and cancellations of Destiny I shares
(391,959,152) (15,374,193)(311,271,265) (14,193,233)(239,729,317) (12,452,732)
Net assets at end of period
$5,939,254,712 241,669,303 $5,726,389,970 228,364,289 $4,391,840,146 215,228,493
</TABLE>
FIDELITY SYSTEMATIC INVESTMENT PLANS: DESTINY PLANS II
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 1998
ASSETS:
Securities of investment company: 274,615,300
shares of Destiny II held for investors, valued
at net asset value of $14.07 per share (Note 1)
(average cost $2,768,491,216) $ 3,863,837,271
Cash 3,035,690
Receivable for Destiny II shares sold 3,087
Total assets 3,866,876,048
LIABILITIES:
Payable for Destiny II shares purchased $ 2,692,311
Payable to custodian, sponsor and
broker/dealer (Note 4) 2,161,133
Total liabilities 4,853,444
NET ASSETS (Note 2) $ 3,862,022,604
Statements of Operations
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1998 1997 1996
INVESTMENT INCOME:
Distributions received
on shares of Destiny
II from:
Net investment
income $ 61,646,651 $ 161,931,472 $ 42,663,716
EXPENSES (Note 4):
Custodian Fees 526,319 446,865 367,638
Administrative
expenses 1,359,835 1,219,410 1,204,257
Net expenses 1,886,154 1,666,275 1,571,895
Net investment
income 59,760,497 160,265,197 41,091,821
REALIZED AND
UNREALIZED
GAIN ON INVESTMENTS:
Complete and partial
liquidations, including
Destiny II shares
delivered
to investors at
market value:
Proceeds received 357,872,401 150,705,546 115,283,136
Cost of Destiny II
shares (236,739,289) (106,291,151) (82,011,653)
Net realized gain on
Plan liquidations 121,133,112 44,414,395 33,271,483
Net (decrease)/increase
in unrealized
appreciation (188,590,035) 625,457,740 185,902,326
Net realized and
unrealized gain/(loss)
on Plan shares (67,456,923) 669,872,135 219,173,809
Distributions received
on shares of Destiny
II from
net realized gains
on investments 239,189,005 53,977,157 59,856,556
Net increase in net
assets resulting
from operations $ 231,492,579 $ 884,114,489 $ 320,122,186
DESTINY PLANS II - FINANCIAL STATEMENTS - CONTINUED
Statements of Changes in Net Assets Invested in Shares of Destiny
II
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
September 30, 1998 September 30, 1997 September 30, 1996
Amount Shares Amount Shares Amount Shares
Net assets at beginning of period
$ 3,505,991,367 243,583,375 $2,465,355,584 212,482,392 $1,978,480,817 187,243,794
Additions during period: From investor payments
516,456,857 338,228,567 311,357,075
Less: creation and sales charges (Note 4)
(27,033,563) (27,036,368) (26,843,231)
Custodian Fees (Note 4)
(2,160,566) (2,062,876) (1,961,326)
Balance invested in
Destiny II shares
487,262,728 32,903,678 309,129,323 24,641,643 282,552,518 26,251,535
Net investment income and
net realized gains on investments
298,949,502 214,242,354 100,948,377
Less: Cash
distributions
to investors
(4,851,669) (1,902,483) (516,801)
Balance reinvested in
Destiny II shares
294,097,833 22,061,716 212,339,871 18,308,982 100,431,576 9,616,656
Net realized gain
on Plan liquidations
121,133,112 44,414,395 33,271,483
Net increase/(decrease) in
unrealized appreciation
(188,590,035) 625,457,740 185,902,326
Total
4,219,895,005 298,548,769 3,656,696,913 255,433,017 2,580,638,720 223,111,985
Deductions during period: Redemptions and cancellations of Destiny II shares
(357,872,401) (23,933,469) (150,705,546) (11,849,642) (115,283,136) (10,629,593)
Net assets at end of period
$ 3,862,022,604 274,615,300 $3,505,991,367 243,583,375 $2,465,355,584 212,482,392
Shares have been adjusted for a 3 - for - 1 split (see note 3).
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES: The Plans are a unit investment
trust registered under the Investment Company Act of 1940, as amended,
with the Securities and Exchange Commission, investing only in shares
of Fidelity Destiny Portfolios: Destiny I and Destiny II (the
"Funds"). Destiny Plans I is for the accumulation of shares of
Fidelity Destiny Portfolios: Destiny I; Destiny Plans II is for the
accumulation of shares of Fidelity Destiny Portfolios: Destiny II.
The financial statements have been prepared in conformity with
generally accepted accounting principles for unit investment trusts
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 Plans:
SECURITY VALUATION. The investments in shares of Fidelity Destiny
Portfolios: Destiny I and Destiny II are valued at each of the Fund's
respective bid market price which is equal to the net asset value per
share of each Fund at period end.
FEDERAL INCOME TAXES. No provisions are made for federal income
taxes. All income dividends and capital gain distributions received by
investors are treated as if received directly from the underlying
Fund. A Planholder will not realize any gain or loss upon withdrawal
from the Plans when transferring to an account for direct ownership of
the underlying Fund shares. Any liquidation by a Planholder of a Fund
will be treated as if the underlying Fund shares were sold.
TRANSACTION DATES. Share transactions are recorded on the trade
date. Dividend income and capital gain distributions are recorded on
the ex-dividend date.
COST METHOD. The investment in shares of each Fund at cost is based
on average cost, which represents the amount available for investment
(including reinvested distributions of net investment income and
realized gains) in such shares after deduction of sales charges,
custodian fees, and insurance fees, if applicable.
RECLASSIFICATIONS. To conform to the 1998 presentation, net
realized gains on investments have been reclassified from investment
income to realized and unrealized gain on investments. This
reclassification had no effect on net increase in net assets resulting
from operations or distributions for any period.
2. PLAN ASSETS
Destiny Plans I assets consisted of the following at September 30,
1998:
Systematic
Systematic Investment
Investment Plans with Total of
Plans Insurance All Plans
Payments
received
from investors
on outstanding
Plans $ 1,495,713,703 $ 923,564 $ 1,496,637,267
Deduct:
Sponsor fees 75,003,857 48,953 75,052,810
Custodian Fees 10,915,815 9,882 10,925,697
Insurance
premiums 0 27,500 27,500
Total
deductions 85,919,672 86,335 86,006,007
Net payments
invested in
shares of
Destiny I 1,409,794,031 837,229 1,410,631,260
Add:
Distributions from
investment income
reinvested 391,449,488 990,364 392,439,852
Distributions
from realized
gains reinvested 2,043,478,817 4,840,174 2,048,318,991
Unrealized
appreciation in
Destiny I shares
held at September
30, 1998 2,084,927,677 3,913,693 2,088,841,370
Deduct:
Fees payable (976,742) (19) (976,761)
Net assets $ 5,928,673,271 $ 10,581,441 $ 5,939,254,712
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. PLAN ASSETS - CONTINUED
Destiny Plans II assets consisted of the following at September
30, 1998:
Systematic
Investment
Plans
Payments received from investors on
outstanding Plans $ 2,131,977,046
Deduct:
Sponsor fees 195,056,353
Custodian Fees 14,838,053
Total deductions 209,894,406
Net payments invested in shares of Destiny II 1,922,082,640
Add:
Distributions from investment income
reinvested 146,403,007
Distributions from realized gains reinvested 700,005,569
Unrealized appreciation in Destiny II
shares held at
September 30, 1998 1,095,346,055
Deduct:
Fees payable (1,814,667)
Net assets $ 3,862,022,604
3. CAPITAL SHARES: On January 18, 1997, the Trustees of Destiny II
approved a three-for-one stock split of the capital shares of Destiny
II for shareholders of record as of June 21, 1997. A total of
139,172,552 capital shares of Destiny II were issued to Destiny Plans
II in connection with the split. Share amounts in the accompanying
financial statements have been restated to reflect the aforementioned
split.
4. EXPENSES AND DEDUCTIONS: For information regarding Creation and
Sales Charges, Custodian Fees, and Administrative expenses see page 19
of this Prospectus.
Fidelity Distributors Corporation, a wholly owned subsidiary of FMR
Corp. and sponsor of Fidelity Systematic Investment Plans, received
approximately $1,152,000, $1,427,000, and $812,000 as its portion of
the Creation and Sales Charges on sales of Plans I during the years
ended September 30, 1998, 1997, and 1996, respectively and $2,126,000,
$2,908,000, and $3,285,000 on sales of Plans II during the years ended
September 30, 1998, 1997, and 1996, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Directors of Fidelity Distributors Corporation and Investors
under Fidelity Systematic Investment Plans: Destiny Plans I and
Destiny Plans II:
In our opinion, the accompanying statements of assets and
liabilities and the related statements of operations and of changes in
net assets invested in shares of Fidelity Systematic Investment Plans:
Destiny Plans I and Destiny Plans II (the "Plans") present fairly, in
all material respects, the financial position of the Plans at
September 30, 1998, the results of their operations for each of the
three years in the period then ended and the changes in their net
assets for each of the three years in the period then ended, in
conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 12, 1998
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
STATEMENT OF FINANCIAL CONDITION
as of December 31, 1997
(in thousands except for share amounts)
ASSETS
Cash $ 128
Receivables:
Brokers, dealers, and customers 34,447
Other 20,678
Investments, at market (cost $17,805) 17,963
Property and equipment, net 6,018
Other assets 62,707
Total Assets $ 141,941
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to mutual funds $ 34,412
Other liabilities 439
Total Liabilities 34,851
Stockholder's equity:
Preferred stock, 5% noncumulative, $100 par value;
authorized 5,000 shares;
issued and outstanding 4,750 shares 475
Common stock, $1 par value; authorized 1,000,000
shares;
issued and outstanding 1,061 shares 1
Additional paid-in capital 13,494
Retained earnings 130,171
144,141
Less: Receivable from parent company (37,051)
Total Stockholder's Equity 107,090
Total Liabilities and Stockholder's Equity $ 141,941
The accompanying notes are an integral part of this financial
statement.
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION
A. PRINCIPAL BUSINESS ACTIVITIES:
Fidelity Distributors Corporation ("FDC" or the "Company") is a
registered broker/dealer under the Securities Exchange Act of 1934.
The Company is the principal underwriter and distributor of mutual
funds under agreements with funds managed by an affiliate, Fidelity
Management & Research Company and is the sponsor of Fidelity Destiny
Plans. A division of Fidelity Distributors Corporation provides mutual
fund transfer agent services and other processing functions on behalf
of affiliated companies.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
USE OF ESTIMATES
The preparation of the statement of financial condition in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of December 31, 1997. Actual
results could differ from the estimates included in the statement of
financial condition.
INCOME TAXES
The Company is included in the consolidated federal and certain
state income tax returns filed by FMR Corp.
The Company's deferred tax asset at December 31, 1997 approximated
$3,561,000. The principal sources of temporary differences relate to
deferred compensation, pension expense, and depreciation.
INVESTMENTS
Investments, comprised of shares held in Fidelity mutual funds, are
stated at market value.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated
depreciation and amortization. Depreciation is computed over the
estimated useful lives of the related assets, which vary from three to
five years, using primarily the straight line method. Leasehold
improvements are amortized over the lesser of their economic useful
life or the term of the lease. Maintenance and repairs are charged to
operations when incurred. Renewals and betterments of a nature
considered to materially extend the useful lives of the assets are
capitalized. Internally developed software is expensed as incurred.
Any gain or loss on the sale or retirement of property and equipment
is included in net income.
OTHER ASSETS
Other assets includes deferred charges in the amount of $58,681,000
net of amortization of $20,106,000. These deferred charges represent
dealer concessions paid to dealers of funds that are subject to
contingent deferred sales charges. The charges are amortized over the
term of the contingent deferred sales charge.
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION (continued)
C. TRANSACTIONS WITH AFFILIATED COMPANIES:
FDC is party to several arrangements with affiliated companies.
Under these arrangements, FDC charged these affiliates for shareholder
services, marketing and distribution expenses and other administrative
services and was charged for commission expenses, promotional
expenses, equipment processing services, and occupancy expenses. In
addition, certain direct and indirect expenses incurred in connection
with the underwriting and distribution of Fidelity mutual fund shares
are borne by affiliated companies.
FDC participates in FMR Corp.'s noncontributory defined benefit
pension plan covering all of its eligible employees. There are no
statistics available for the actuarial data of this separate company.
There are no unfunded vested benefits relating to employees of
FDC.
FDC also participates in FMR Corp.'s defined contribution profit
sharing and retirement plans covering substantially all employees.
Annual contributions to the plans are based on either stated
percentages of eligible employee compensation or employee
contributions.
All intercompany transactions are charged or credited through an
intercompany account with FMR Corp. and may not be the same as those
which would otherwise exist or result from agreements and transactions
among unrelated parties. The Company receives credit for the
collection of its receivables and is charged for the settlement of its
liabilities through its intercompany account with FMR Corp. Under an
agreement with FMR Corp., the Company offsets liabilities to
affiliated companies which will ultimately be settled by FMR Corp. on
behalf of the Company against its receivable from FMR Corp.
D. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following (in
thousands):
Equipment $ 27,041
Leasehold improvements 54
Furniture and fixtures 1,438
28,533
Less: Accumulated depreciation and
amortization 22,515
$ 6,018
FIDELITY DISTRIBUTORS CORPORATION
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO STATEMENT OF FINANCIAL CONDITION (continued)
E. NET CAPITAL REQUIREMENT:
FDC is subject to the Securities and Exchange Commission's Uniform
Net Capital Rule (Rule 15c3-1), which requires the maintenance of
minimum net capital and requires that the ratio of aggregate
indebtedness to net capital, both as defined, shall not exceed 15 to
1. At December 31, 1997, FDC had net capital of $16,996,000 which was
$16,967,000 in excess of its required net capital of $29,000.
Additionally, the ratio of aggregate indebtedness to net capital at
December 31, 1997 was 0.03 to 1.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of Fidelity Distributors
Corporation
(A Wholly-Owned Subsidiary of FMR Corp.):
We have audited the accompanying statement of financial condition
of Fidelity Distributors Corporation as of December 31, 1997. This
financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of Fidelity
Distributors Corporation as of December 31, 1997 in conformity with
generally accepted accounting principles.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 28, 1998
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated November
19, 1998 . The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov). The SAI
is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity
Distributors Corporation (FDC), 82 Devonshire Street, Boston, MA 02109
at the appropriate number listed below or your investment
professional.
FIDELITY DISTRIBUTORS CORPORATION
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC.,
BROKER/DEALER SERVICES DIVISION
Nationwide (toll-free) 1-800-433-0734
In Alaska or Overseas (call collect) 1-617-328-5000
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION.
SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
DES-PRO-1198
FIDELITY
DESTINY PORTFOLIOS:
Destiny I (fund number 006)
Destiny II (fund number 306)
Each fund seeks capital growth. Although many of the securities in
each fund's portfolio at any given time may be income-producing,
income generally will not be a consideration in the selection of
securities.
Shares of each fund may be purchased only through Fidelity Systematic
Investment Plans: Destiny Plans I and Destiny Plans II (the Plans or a
Plan), a unit investment trust. Details of the Plans, including the
Creation and Sales Charges, as well as Custodian Fees, are discussed
in the Prospectus for the Plans. The charges for the first year of a
Plan may amount to as much as 50% of the amounts paid under a Plan.
Prospective investors should read this Prospectus in conjunction with
the Plans' Prospectus.
PROSPECTUS
NOVEMBER 19, 1998
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
PROSPECTUS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS 36 WHO MAY WANT TO INVEST
36 EXPENSES EACH FUND'S YEARLY OPERATING EXPENSES.
38 FINANCIAL HIGHLIGHTS A SUMMARY OF EACH FUND'S
FINANCIAL DATA.
42 PERFORMANCE HOW EACH FUND HAS DONE OVER TIME.
THE FUNDS IN DETAIL 45 CHARTER HOW EACH FUND IS ORGANIZED.
45 INVESTMENT PRINCIPLES AND RISKS EACH FUND'S OVERALL
APPROACH TO INVESTING.
47 BREAKDOWN OF EXPENSES HOW OPERATING COSTS ARE
CALCULATED AND WHAT THEY INCLUDE.
YOUR ACCOUNT 48 HOW TO BUY SHARES
48 HOW TO SELL SHARES TAKING MONEY OUT AND CLOSING YOUR
ACCOUNT.
50 INVESTOR SERVICES SERVICES TO HELP YOU MANAGE YOUR
ACCOUNT.
SHAREHOLDER AND ACCOUNT POLICIES 50 DIVIDENDS, CAPITAL GAINS, AND TAXES
50 TRANSACTION DETAILS SHARE PRICE CALCULATIONS AND THE
TIMING OF PURCHASES AND REDEMPTIONS.
51 EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund is designed for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns
and who want to be invested in the stock market for its long-term
growth potential. Each fund invests for growth and does not pursue
income.
Shares of each fund may be acquired only through the purchase of an
interest in Fidelity Systematic Investment Plans: Destiny Plans I or
Destiny Plans II. The funds are designed for you if you are
seeking accumulation of capital through regular, systematic investing
over a period of 10 years or more. Investments in the funds are based
on the concept of "dollar-cost averaging." This involves consistently
buying uniform dollar amounts of a security regardless of the
price, at regular intervals. When prices are low, more shares are
bought than when prices are high. Because the value of the securities
in each fund fluctuates with market conditions, if you liquidate your
Plan investment when the market value of your shares is less than
their original cost, including the initial Plan's Creation and Sales
Charges, you will incur a loss. Investments in a systematic investment
plan do not eliminate market risk. While FMR will seek to realize
capital growth over the lifetime of a Plan, the policies FMR follows
may not be appropriate if you are unable to complete your Plan. You
should also consider your ability to continue to invest during periods
of varying economic and market conditions.
Receipt by each fund of investments on a systematic basis tends to
provide a more consistent level of fund assets than might be the case
for those funds whose shares are sold directly and may allow each fund
to plan for the gradual accumulation of various individual security
positions. One example of how each fund could employ this concept is
through the program of dollar-cost averaging as described above. Such
a program could be hampered by increased net redemptions or the
failure of Plan investors to purchase shares.
FMR is also the investment adviser to certain other investment
companies not sold through systematic investment plans, which also
have objectives of capital growth. The investment policies employed by
each of these funds vary, as do the sales charges assessed to fund
share purchases and the investment results each has attained.
The value of each fund's investments varies from day to day, generally
reflecting changes in market conditions and other company, political,
and economic news. In the short term, stock prices can fluctuate
dramatically in response to these factors. Over time, however, stocks
have shown greater growth potential than other types of securities.
Each fund is not in itself a balanced investment plan. You should
consider your investment objective and tolerance for risk when making
an investment decision. When you sell your fund shares, they may be
worth more or less than what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of a fund. Neither fund will offer its shares publicly
except through the Destiny Plans, which impose separate
Creation and Sales Charges. Creation and Sales Charges vary according
to the monthly investment size and duration of each Plan. Please refer
to the Plans' Prospectus for details.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DESTINY I DESTINY II
SALES CHARGE ON PURCHASES AND REINVESTED DISTRIBUTIONS NONE NONE
DEFERRED SALES CHARGE ON REDEMPTIONS NONE NONE
</TABLE>
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR) that varies based on its performance. Each fund also incurs
other expenses for services such as maintaining shareholder records
and furnishing shareholder statements and financial reports.
Management fees and other expenses are reflected in each fund's share
price and are not charged directly to individual shareholder accounts.
For accounts maintained within the Plans, separate custodian fees and
an annual service fee are charged directly to Planholders Please refer
to the section "Breakdown of Expenses," beginning on page and the
Plans' Prospectus for further information.
The following figures are based on historical expenses of each fund
and are calculated as a percentage of average net assets of each fund.
DESTINY I DESTINY II
MANAGEMENT FEE 0.31% 0.45%
12B-1 FEE (DISTRIBUTION FEE) NONE NONE
OTHER EXPENSES 0.02% 0.03%
TOTAL OPERATING EXPENSES 0 .33% 0 .48%
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in a fund, assuming a 5% annual return
and full redemption at the end of each time period. Total expenses
shown below include any shareholder transaction expenses and a fund's
annual operating expenses.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
DESTINY I $ 3 $ 11 $ 19 $ 42
DESTINY II $ 5 $ 15 $ 27 $ 60
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
Please refer to page for the funds' past performance. As stated
above, Creation and Sales Charges vary for each Plan. Generally,
however, these charges are structured to decrease as a percentage of
the monthly investment as the Plan progresses. Consequently, the major
portion of the total Creation and Sales Charges incurred during the
life of a Plan are assessed within its first year. For a detailed
explanation of applicable rate structure, please refer to the Plans'
Prospectus.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Destiny I and
Destiny II have been audited by PricewaterhouseCoopers LLP,
independent accountants. The funds' financial highlights, financial
statements, and report of the auditor are included in the funds'
Annual Report, and are incorporated by reference into (are legally a
part of) the funds' SAI. Contact FDC or your investment professional
for a free copy of the Annual Report or the SAI.
DESTINY I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED SEPTEMBER 30
1998 1997 1996 1995 1994 1993F 1993G 1992G 1991G 1990G 1989G
NET ASSET VALUE,
$ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03 $ 12.44
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME
.44C .49C .45 .41 .30 .04 .26 .31 .33 .46 D .30
NET REALIZED AND
1.56 6.36 2.42 3.54 1.69 .75 3.16 2.55 1.25 1.18 1.81
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT
2.00 6.85 2.87 3.95 1.99 .79 3.42 2.86 1.58 1.64 2.11
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT
(.47) (.45) (.43) (.34) (.11) (.14) (.30) (.49) (.10) (.38) (.26)
INCOME
FROM NET REALIZED GAIN
(2.03) (1.73) (.81) (2.53) (1.04) (1.01) (2.44) (1.06) (.49) (1.05) (.26)
TOTAL DISTRIBUTIONS
(2.50) (2.18) (1.24) (2.87) (1.15) (1.15) (2.74) (1.55) (.59) (1.43) (.52)
NET ASSET VALUE,
$ 24.58 $ 25.08 $ 20.41 $ 18.78 $ 17.70 $ 16.86 $ 17.22 $ 16.54 $ 15.23 $ 14.24 $ 14.03
END OF PERIOD
TOTAL RETURNB
8.72% 36.29%H 16.04% 27.49% 12.30% 4.77% 23.90% 20.18% 11.93% 12.17% 17.90%
NET ASSETS, END OF PERIOD
$ 6,206 $ 5,961 $ 4,565 $ 4,053 $ 3,273 $ 2,973 $ 2,869 $ 2,373 $ 2,023 $ 1,832 $ 1,662
( IN MILLIONS )
RATIO OF EXPENSES TO
.33% .39% .65% .68% .70% .65%A .66% .61% .50% .53% .60%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO
.33% .38% E .65% .68% .70% .65%A .66% .61% .50% .53% .60%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
1.71% 2.20% 2.40% 2.35% 1.69% 1.11%A 1.83% 2.00% 2.45% 3.37% 2.35%
INCOME TO AVERAGE NET
ASSETS
PORTFOLIO TURNOVER RATE
27% 32% 42% 55% 77% 82%A 75% 75% 84% 75% 72%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPERATE
SALES CHARGE AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS OF
$.09 PER SHARE.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
F THREE MONTHS ENDED SEPTEMBER 30, 1993
G YEARS ENDED JUNE 30
H THE TOTAL RETUR N WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN.
DESTINY II
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED SEPTEMBER 30
1998 1997 1996I 1995I 1994I 1993F,I 1993G,I 1992G,I 1991G,I 1990G,I 1989G,I
NET ASSET VALUE,
$ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88 $ 6.08
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME
.18 C .27 C .24 .22 .14 .01 .09 .11 .10 .19 D .08
NET REALIZED AND
.71 3.52 1.34 1.99 .96 .41 1.61 1.36 .86 .76 .91
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT
.89 3.79 1.58 2.21 1.10 .42 1.70 1.47 .96 .95 .99
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT
(.25) (.25) (.22) (.17) (.04) (.05) (.12) (.11) (.12) (.12) (.06)
INCOME
FROM NET REALIZED GAIN
(.97) (.75) (.32) (.99) (.43) (.30) (.99) (.96) (.05) (.67) (.13)
TOTAL DISTRIBUTIONS
(1.22) (1.00) (.54) (1.16) (.47) (.35) (1.11) (1.07) (.17) (.79) (.19)
NET ASSET VALUE,
$ 14.07 $ 14.40 $ 11.61 $ 10.57 $ 9.52 $ 8.89 $ 8.82 $ 8.23 $ 7.83 $ 7.04 $ 6.88
END OF PERIOD
TOTAL RETURN B
6.64% 34.72% H 15.43% 26.98% 12.67% 4.93% 23.28% 20.61% 14.35% 14.42% 16.76%
NET ASSETS, END OF PERIOD
$ 3,969 $ 3,609 $ 2,538 $ 2,032 $ 1,437 $ 1,143 $ 1,061 $ 479 $ 326 $ 221 $ 143
( IN MILLIONS )
RATIO OF EXPENSES TO
.48% .54% .78% .80% .80% .84% A .84% .88% .84% .87% .97%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO
.48% .53% E .78% .80% .80% .84% A .84% .88% .84% .87% .97%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT
1.23% 2.11% 2.38% 2.33% 1.56% .69% A 1.41% 1.60% 1.70% 3.07% 1.53%
INCOME TO AVERAGE NET
ASSETS
PORTFOLIO TURNOVER RATE
106% 35% 37% 52% 72% 80% A 81% 113% 129% 112% 128%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE EFFECTS OF THE SEPERATE
SALES CHARGE AND CUSTODIAN FEES ASSESSED THROUGH FIDELITY SYSTEMATIC
INVESTMENT PLANS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE REFLECTS SPECIAL DIVIDENDS OF
$.07 PER SHARE.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH
THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
F THREE MONTHS ENDED SEPTEMBER 30, 1993
G YEARS ENDED JUNE 30
H THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIOD SHOWN.
I PER SHARE DATA HAVE BEEN ADJUSTED FOR A 3 FOR 1 SHARE SPLIT PAID
JUNE 21, 1996.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
All total returns quoted below do not include the effect of paying the
separate Creation and Sales Charges and Custodian Fees associated with
the purchase of shares of the funds through the Plans. Total returns
would be lower if Creation and Sales Charges and Custodian Fees were
taken into account. As previously discussed, shares of the funds may
be acquired only through the Plans. Investors should consult the
Plans' Prospectus for complete information regarding Creation and
Sales Charges and Custodian Fees.
Each fund's fiscal year runs from October 1 through September 30. The
tables below show each fund's performance over past fiscal years. The
charts on page present calendar year performance for each fund
compared to different measures, including a competitive funds average.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10 LIFE OF
SEPTEMBER 30, 1998 YEAR YEARS YEARS FUND
DESTINY I 8.72% 19.74% 19.16% 18.64%*
DESTINY II 6.64% 18.86% 18.94% 21.55%**
</TABLE>
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10 LIFE OF
SEPTEMBER 30, 1998 YEAR YEARS YEARS FUND
DESTINY I 8.72% 146.15% 477.04% 12,392.16%*
DESTINY II 6.64% 137.28% 466.47% 1,106.59%**
</TABLE>
* FROM JULY 10, 1970 (COMMENCEMENT OF OPERATIONS).
** FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS).
The following tables show Destiny Plans I and Destiny Plans II average
annual total returns calculated for the one, five, ten, and fifteen
years or Life of Plan ended September 30, 1998 for a $50/month, 15
year Plan. Past 15 years or Life of Plan figures are for the
periods October 1, 1983 to September 30, 1998 for Destiny Plans I and
Commencement of Operations (December 30, 1985) through September 30,
1998 for Destiny Plans II. The following Plan-related average annual
total returns include change in share price, reinvestment of dividends
and capital gains, and the effects of the separate Creation and Sales
Charges and Custodian Fees assessed through the Plans. The
illustrations assume an initial $600 lump sum investment at the
beginning of each period shown with no subsequent Plan investments.
Because the illustrations assume lump sum investments, they do not
reflect what investors would have earned only had they made regular
monthly investments over the period. Consult the Plans' Prospectus for
more complete information on applicable charges and fees.
AVERAGE ANNUAL TOTAL RETURNS - DESTINY PLANS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10 PAST 15 YEARS/
SEPTEMBER 30, 1998 YEAR YEARS YEARS LIFE OF PLAN
DESTINY PLANS I -48.03% 15.42% 17.60% 16.90% A
DESTINY PLANS II -49.02% 14.58% 17.38% 20.40% B
</TABLE>
A FROM OCTOBER 1, 1983 TO SEPTEMBER 30, 1998.
B FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30,
1998.
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CALENDAR YEARS 1990 1991 1992 1993 1994 1995 1996 1997
DESTINY I -3.15% 38.92% 15.15% 26.42% 4.43% 36.95% 18.55% 30.92%
STANDARD & POOR'S 500 INDEX -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
LIPPER GROWTH FUNDS AVERAGE -4.72% 37.08% 7.86% 10.61% -2.17% 30.79% 19.24% 25.30%
CONSUMER PRICE INDEX 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: -3.15
ROW: 4, COL: 1, VALUE: 38.92
ROW: 5, COL: 1, VALUE: 15.15
ROW: 6, COL: 1, VALUE: 26.42
ROW: 7, COL: 1, VALUE: 4.43
ROW: 8, COL: 1, VALUE: 36.95
ROW: 9, COL: 1, VALUE: 18.55
ROW: 10, COL: 1, VALUE: 30.92
(LARGE SOLID BOX) DESTINY I
YEAR-BY-YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CALENDAR YEARS 1990 1991 1992 1993 1994 1995 1996 1997
DESTINY II -2.52% 41.42% 15.48% 26.81% 4.48% 35.96% 17.86% 29.64%
STANDARD & POOR'S 500 INDEX -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
LIPPER GROWTH FUNDS AVERAGE -4.72% 37.08% 7.86% 10.61% -2.17% 30.79% 19.24% 25.30%
CONSUMER PRICE INDEX 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: -2.52
ROW: 4, COL: 1, VALUE: 41.42
ROW: 5, COL: 1, VALUE: 15.48
ROW: 6, COL: 1, VALUE: 26.81
ROW: 7, COL: 1, VALUE: 4.48
ROW: 8, COL: 1, VALUE: 35.96
ROW: 9, COL: 1, VALUE: 17.86
ROW: 10, COL: 1, VALUE: 29.64
(LARGE SOLID BOX) DESTINY II
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average for
Destiny I and Destiny II. As of September 30, 1998, the average
reflected the performance of 934 mutual funds with similar
investment objectives. This average, published by Lipper Analytical
Services, Inc., excludes the effect of sales loads.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a
widely recognized, unmanaged index of common stocks.
Unlike each fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, please call the
appropriate number listed on the front cover, or your investment
professional.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Fidelity Destiny Portfolios, an open-end
management investment company originally organized as a Massachusetts
corporation on January 7, 1969 and reorganized as a Massachusetts
business trust on June 20, 1984.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. The transfer agent or the Plans'
custodian, as applicable, will mail proxy materials in advance,
including a voting card and information about the proposals to be
voted on. The number of votes you are entitled to is based upon the
dollar value of your investment.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which chooses the funds' investments and
handles their business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for each fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for each fund.
As of September 30, 1998, FMR advised funds having approximately 38
million shareholder accounts with a total value of more than
$ 572 billion.
George A. Vanderheiden is Vice President and manager of Destiny I,
which he has managed since 1980. He also manages several other
Fidelity Funds. Mr. Vanderheiden is a member of the Board of Directors
for FMR Corp. Mr. Vanderheiden joined Fidelity in 1971.
Beth Terrana is Vice President and manager of Destiny II, which she
has managed since June 1998. She also manages other Fidelity funds.
Since joining Fidelity in 1983, Ms. Terrana has worked as an analyst,
portfolio assistant and manager.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for each fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K. and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant
owners of a class of shares of common stock representing approximately
49% of the voting power of FMR Corp. Under the Investment Company Act
of 1940 (the 1940 Act), control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company; therefore, the Johnson family may be deemed
under the 1940 Act to form a controlling group with respect to FMR
Corp.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of the Destiny Portfolios, provided that the funds receive brokerage
services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND seeks capital growth. Although many of the securities in
each fund's portfolio at any given time may be income-producing,
income generally will not be a consideration in the selection of
securities.
Each fund seeks capital growth primarily from equity securities. Each
fund will tend to be fully invested in common stocks and securities
convertible into common stocks, but may also buy other types of
securities such as preferred stocks or bonds. The funds have the
flexibility to invest in large or small, domestic or foreign issuers.
The value of the funds' investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.
FMR may use various investment techniques to hedge a portion of a
fund's risks, but there is no guarantee that these strategies will
work as FMR intends. As a mutual fund, each fund seeks to spread
investment risk by diversifying its holdings among many companies and
industries. When you sell your shares of a fund, they may be worth
more or less than what you paid for them.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help the fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
the appropriate number listed on the front cover, or your investment
professional.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, each fund may
not invest in more than 10% of the outstanding voting securities of a
single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes
due to changes in the issuer's creditworthiness, or they may already
be in default. The market prices of these securities may fluctuate
more than higher-quality securities and may decline significantly in
periods of general or regional economic difficulty.
The following tables provide a summary of ratings assigned to debt
holdings (not including money market instruments) in the funds'
portfolios. These figures are dollar-weighted averages of month-end
portfolio holdings during the fiscal year ended September 1998, and
are presented as a percentage of total security investments. These
percentages are historical and do not necessarily indicate a fund's
current or future debt holdings.
DESTINY II
FISCAL YEAR
ENDED
SEPTEMBER
199 8
DEBT
HOLDINGS, MOODY'S
BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
AVERAGE AVERAGE
RATING OF TOTAL INVESTMENTS RATING OF TOTAL INVESTMENTS
INVESTMENT
GRADE
Highest
quality Aaa 6.2 % AAA 6.2 %
High
quality Aa 0.0 % AA 0.0 %
Upper-medium
grade A 0.0 % A 0.0 %
Medium
grade Baa 0.0 % BBB 0.0 %
LOWER
QUALITY
Moderately
speculative Ba 0.0 % BB 0.0 %
Speculative B 0.1 % B 0.0 %
Highly
speculative Caa 0.0 % CCC 0.0 %
Poor
quality Ca 0.0 % CC 0.0 %
Lowest
quality, no
interest C 0.0 % C 0.0 %
In default,
in arrears -- D 0.0 %
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P
AMOUNTED TO 0.0 % OF THE FUND'S INVESTMENTS. THIS PERCENTAGE MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATIONS, AS WELL AS
UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO
0.0 % OF THE FUND'S INVESTMENTS.
DESTINY I
FISCAL YEAR
ENDED
SEPTEMBER
199 8
DEBT
HOLDINGS, MOODY'S
BY RATING INVESTORS SERVICE STANDARD & POOR'S
(AS A % OF INVESTMENTS) (AS A % OF INVESTMENTS)
AVERAGE AVERAGE
RATING OF TOTAL INVESTMENTS RATING OF TOTAL INVESTMENTS
INVESTMENT
GRADE
Highest
quality Aaa 11.8 % AAA 11.8 %
High
quality Aa 0.0 % AA 0.0 %
Upper-medium
grade A 0.0 % A 0.0 %
Medium grade Baa 0.0 % BBB 0.0 %
LOWER QUALITY
Moderately
speculative Ba 0.0 % BB 0.0 %
Speculative B 0.0 % B 0.0 %
Highly
speculative Caa 0.0 % CCC 0.0 %
Poor quality Ca 0.0 % CC 0.0 %
Lowest
quality, no
interest C 0.0 % C 0.0 %
In default,
in arrears -- D 0.0 %
REFER TO THE FUND'S SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY. SECURITIES NOT
RATED BY MOODY'S OR S&P
AMOUNTED TO 0.0 % OF THE FUND'S INVESTMENTS. THIS PERCENTAGE MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATIONS, AS WELL AS
UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO
0.0 % OF THE FUND'S INVESTMENTS.
RESTRICTIONS: Purchase of a debt security is consistent with each
fund's debt quality policy if it is rated at or above the stated level
by Moody's Investors Service (Moody's), Standard & Poor's (S&P), or is
unrated but judged to be of equivalent quality by FMR. Each fund
currently intends to limit its investments in lower than Baa-quality
debt securities (sometimes called "junk bonds") to 10% of its assets.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to
pay interest and repay principal when due and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in emerging markets, more
volatile and potentially less liquid than U.S. investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities
short.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other
borrower. They have additional risks beyond conventional debt
securities because they may entail less legal protection for a fund,
or there may be a requirement that the fund supply additional cash to
a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not invest more than 10% of its assets in
illiquid securities.
OTHER INSTRUMENTS may include real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each fund may
not invest more than 5% in the securities of any one issuer. This
limitation does not apply to U.S. Government securities.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
DESTINY I AND DESTINY II seek capital growth. Although many of
the securities in each fund's portfolio at any given time may be
income-producing, income generally will not be a consideration in the
selection of securities.
With respect to 75% of total assets, each fund may not invest more
than 5% in the securities of any one issuer and may not invest in more
than 10% of the outstanding voting securities of a single issuer.
These limitations do not apply to U.S. Government securities.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of each fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, each fund pays fees related to its daily
operations. Expenses paid out of each fund's assets are reflected in
its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs.
FMR in turn pays fees to affiliates who provide assistance with these
services. Each fund also pays OTHER EXPENSES, which are explained on
page .
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee
is determined by calculating a BASIC FEE and then applying a
PERFORMANCE ADJUSTMENT. The performance adjustment either increases or
decreases the management fee, depending on how well a fund has
performed relative to the S&P 500.
MANAGEMENT FEE = BASIC FEE +/- PERFORMANCE ADJUSTMENT
THE BASIC FEE is calculated by adding a group fee rate to an
individual fund fee rate, dividing by twelve, and multiplying the
result by a fund's average net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For September 1998, the group fee rate was 0.2911 % for Destiny
I and Destiny II. The individual fund fee rate is 0.17% for Destiny I
and 0.30% for Destiny II.
The basic fee for Destiny I and Destiny II for the fiscal year ended
September 30, 1998, was 0.46 % and 0.59 %, respectively,
of the fund's average net assets.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing
each fund's performance to that of the S&P 500 over the performance
period.
The performance period is the most recent 36-month period.
The performance adjustment rate is divided by twelve and multiplied by
the fund's average net assets throughout the month, and the resulting
dollar amount is then added to or subtracted from the basic fee. The
maximum annualized performance adjustment rate is +0.24% of the fund's
average net assets up to and including $100,000,000 and +0.20% of the
fund's average net assets in excess of $100,000,000 over the
performance period.
The total management fee for the fiscal year ended September 30, 1998
was 0.31 % of the fund's average net assets for Destiny I and
0.45 % of the fund's average net assets for Destiny II.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FSC performs transfer agency, dividend disbursing, and shareholder
servicing functions for each fund. FSC also calculates the net asset
value per share (NAV) and dividends for each fund, maintains the
funds' general accounting records, and administers each fund's
securities lending program. For the fiscal year ended September 1998,
Destiny I and Destiny II paid fees equal to 0.01 % and
0.01 %, respectively, of each fund's average net assets
for transfer agency and related services, and Destiny I and Destiny II
paid fees equal to 0.01 % and 0.02 %, respectively, of
each fund's average net assets for pricing and bookkeeping
services. These amounts are before expense reductions, if any.
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
For the fiscal year ended September 1998, the portfolio turnover rates
for Destiny I and Destiny II were 27 % and 106 %,
respectively. These rates vary from year to year. High turnover rates
increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of
short-term investing.
YOUR ACCOUNT
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each fund is the fund's NAV.
Each fund has an agreement with FDC under which each fund issues
shares at NAV to State Street Bank and Trust Company (State Street) as
Custodian for the Plans. EACH FUND WILL NOT OFFER ITS SHARES PUBLICLY
EXCEPT THROUGH THE PLANS. Generally, State Street will hold directly
all shares of each fund unless a Planholder owns fund shares
directly after completing or terminating a Plan. The terms
of the offering of the Plans are contained in the
Prospectus of Fidelity Systematic Investment Plans: Destiny Plans I
and Destiny Plans II.
Your shares will be purchased at the next NAV calculated after
your order is received in proper form . Each fund's NAV is
normally calculated each business day at 4:00 p.m. Eastern time.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
Share certificates are not available for fund shares.
If you are investing through a tax-advantaged retirement plan, such
as an IRA, for the first time, you will need a special application.
Contact your investment professional for more information and a
retirement account application.
HOW TO SELL SHARES
TH E FOLLOWING DISCUSSION RELATES ONLY TO THOSE SHAREHOLDERS WHO
HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES OF A FUND
DIRECTLY. PLANHOLDERS SHOULD CONSULT THE SECTION ENTITLED
"CANCELLATION AND REFUND RIGHTS" OF THEIR PLAN'S PROSPECTUS FOR A
DISCUSSION OF THE REQUIREMENTS FOR REDEMPTION OF SHARES FROM A
PLAN .
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
If you have certificates for your shares, you must submit them to FSC
in order to sell your shares, and you should call the appropriate
number listed on the front cover for specific instructions. The funds
currently do not issue share certificates.
For more information, see "Systematic Withdrawal Program" on page 14
of the Destiny Plans' prospectus.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, signed certificates (if applicable), and
(small solid bullet) Any other applicable requirements listed in the
following table.
Mail your letter to the following address:
Fidelity Investments
P. O. Box 770002
Cincinnati, OH 45277-0086
Unless otherwise instructed, Fidelity will send a check to the record
address.
<TABLE>
<CAPTION>
<S> <C> <C>
TYPE OF REGISTRATION* SPECIAL REQUIREMENTS
PHONE ALL ACCOUNTS (SMALL SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
(SMALL SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY
FUNDS IF BOTH ACCOUNTS ARE REGISTERED
WITH THE SAME NAME(S), ADDRESS, AND
TAXPAYER ID NUMBER.
(SMALL SOLID BULLET) CALL FSC AT THE APPROPRIATE NUMBER
LISTED ON THE FRONT COVER.
MAIL OR IN PERSON
(MAIL_GRAPHIC)
(HAND_GRAPHIC) INDIVIDUAL, JOINT TENANTS, SOLE (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE
PROPRIETORSHIP, CUSTODIAL (UNIFORM SIGNED BY ALL PERSON(S) REQUIRED TO
GIFTS/TRANSFERS TO MINORS ACT), GENERAL SIGN FOR THE ACCOUNT EXACTLY AS IT IS
PARTNERS REGISTERED, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
CORPORATIONS, ASSOCIATIONS (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION AND A
CORPORATE RESOLUTION MUST BE SIGNED
BY ALL PERSON(S) REQUIRED TO SIGN FOR
THE ACCOUNT, ACCOMPANIED BY
SIGNATURE GUARANTEE(S).
TRUSTS (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE
SIGNED BY THE TRUSTEE(S), ACCOMPANIED
BY SIGNATURE GUARANTEE(S). (IF THE
TRUSTEE'S NAME IS NOT REGISTERED ON
YOUR ACCOUNT, ALSO PROVIDE A COPY OF
THE TRUST DOCUMENT, CERTIFIED WITHIN
THE LAST 60 DAYS.)
</TABLE>
* IF YOU DO NOT FALL INTO ANY OF THE ABOVE REGISTRATION CATEGORIES
(E.G., EXECUTORS, ADMINISTRATORS, CONSERVATORS OR GUARDIANS), PLEASE
CALL THE APPROPRIATE NUMBER LISTED ON THE FRONT COVER FOR FURTHER
INSTRUCTIONS.
INVESTOR SERVICES
THE FOLLOWING SHAREHOLDER SERVICES ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES
OF A FUND DIRECTLY. Planholders should consult the sections titled
"Rights and Privileges of Planholders" on page 11 in their Plan's
Prospectus for a discussion of distribution options and other
pertinent data.
For accounts not associated with the Plans, Fidelity provides a
variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses may be mailed, even if you have more than one account in
a fund. Call FDC at the appropriate number listed on the front cover,
or your investment professional if you need additional copies of
financial reports and prospectuses.
FSC pays for shareholder services but not for special services, such
as producing and mailing historical account documents. You may be
required to pay a fee for special services.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange
will carry credit for any front-end sales charge you previously paid
in connection with the purchase of Plan shares.
Note that exchanges out of a fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see "Exchange Restrictions," page .
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Normally, dividends and
capital gains are distributed in December.
DISTRIBUTION OPTIONS
THE FOLLOWING DISTRIBUTION OPTIONS ARE APPLICABLE ONLY TO THOSE
SHAREHOLDERS WHO HAVE COMPLETED OR TERMINATED A PLAN AND HOLD SHARES
OF THE FUNDS DIRECTLY. Planholders should consult the section titled
"Rights and Privileges of Planholders" on page 11 of the Plans'
Prospectus for a discussion of distribution options and other
pertinent information.
You can choose from three distribution options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund, but you
will be sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
When a fund deducts a distribution from its NAV, the reinvestment
price is the fund's NAV at the close of business that day.
Distribution checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing
the tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges - are
subject to capital gains tax. A capital gain or loss is the difference
between the cost of your shares and the price you receive when you
sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price.
You will also receive a transaction statement at least quarterly.
However, it is up to you or your tax preparer to determine whether
this sale resulted in a capital gain and, if so, the amount of tax to
be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount
of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable
income in any year, which is sometimes the result of currency-related
losses, all or a portion of the fund's dividends may be treated as a
return of capital to shareholders for tax purposes. To minimize the
risk of a return of capital, each fund may adjust its dividends to
take currency fluctuations into account, which may cause the dividends
to vary. Any return of capital will reduce the cost basis of your
shares, which will result in a higher reported capital gain or a lower
reported capital loss when you sell your shares. The statement you
receive in January will specify if any distributions included a return
of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates each fund's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Foreign securities are valued on
the basis of quotations from the primary market in which they are
traded, and are translated from the local currency into U.S. dollars
using current exchange rates. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
Planholders who have redeemed shares under "Cancellation and Refund
Rights" (discussed in the Plans' Prospectus), may not reinstate at NAV
the proceeds from such a cancellation or refund until all refunded
Creation and Sales Charges included in the cancellation have first
been deducted in full from the amount being replaced. To redeem shares
from a Plan, refer to the section entitled "Rights and Privileges of
Planholders" in your Plan's Prospectus, or contact your investment
professional.
WHEN YOU SIGN YOUR PLAN'S APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity at the appropriate number listed
on the front cover for instructions. Additional documentation may be
required from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
EXCHANGE RESTRICTIONS
The exchange privilege is available only to those shareholders who
have completed or terminated a Plan and hold shares of a fund
directly. As a shareholder, you have the privilege of exchanging
shares of a fund for shares of other Fidelity funds; including the
Fidelity Advisor Funds. However, you should role the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales
charge, you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor who makes more than four exchanges out of a fund per calendar
year. Accounts under common ownership or control, including accounts
with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify these
exchange privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
Fidelity, Fidelity Investments & (Pyramid) Design, and Fidelity
Investments are registered trademarks of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
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SPONSOR
FIDELITY DISTRIBUTORS CORPORATION
82 Devonshire Street
Boston, Massachusetts 02109
FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES COMPANY, INC.
BROKER/DEALER SERVICES DIVISION
82 Devonshire Street
Boston, MA 02109
FOR INVESTMENT PROFESSIONALS OR POTENTIAL
INVESTORS SEEKING AN INVESTMENT PROFESSIONAL
RECOMMENDATION CALL:
NATIONWIDE: 1-800-433-0734
IN ALASKA OR OVERSEAS (CALL COLLECT): 617-328-5000
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
Boston, Massachusetts
TRANSFER AND SHAREHOLDERS'
SERVICING AGENT
BOSTON FINANCIAL DATA SERVICES, INC.
P.O. Box 8300
Boston, Massachusetts 02266-8300
FOR ACTIVE PLANS CALL:
Nationwide: 1-800-225-5270
FIDELITY SERVICE COMPANY, INC.
P.O. Box 770002
Cincinnati, OH 45277-0002
Nationwide: 1-800-433-0734
AUDITORS
P RICEWATERHOUSECOOPERS L.L.P.
Boston, Massachusetts
I .DES-PRO-1198
1.476237.101
(RECYCLED LOGO GRAPHIC)Printed on recycled paper
EXHIBITS
A. (1) Custodian Agreement, as amended and restated, dated
September 16, 1994, between Fidelity Distributors
Corporation and State Street Bank and Trust Company is
incorporated herein by reference to Exhibit 1.A.(1) of
Post-Effective Amendment No. 62.
(2) None.
(3) (a) Not applicable.
(b) Plan Dealer Agreement is incorporated herein by reference
to Exhibit 1.A.(3)(b) of Post-Effective Amendment No. 62.
(c) Dealer Commission and Service Fee Schedule is incorporated
herein by reference to Exhibit 1.A.(3)(c) of Post-Effective
Amendment No. 62.
(4) None.
(5) (a) Not applicable.
(b) Not applicable.
(6) Articles of Incorporation and By-laws of Fidelity
Distributors Corporation are incorporated herein by
reference to Exhibit 1.A.(6) of Post-Effective Amendment
No. 50.
(7) The Consolidated Financial Statements of Seaboard Surety
Company, for the fiscal year ended December 31, 1997, are
electronically filed herein as Exhibit 1.A(7).
DIDNT
WE
CHANGE
THIS(8) Franchise Agreement dated August 2, 1984 between Fidelity
Distributors Corporation and Fidelity Destiny Portfolios,
on behalf of Destiny I, is incorporated herein by reference
to Exhibit 1.A.(8)(a) of Post-Effective Amendment No. 62.
Franchise Agreement dated December 30, 1985 between
Fidelity Distributors Corporation and Fidelity Destiny
Portfolios, on behalf of Destiny II, is incorporated herein
by reference to Exhibit 1.A.(8)(b) of Post-Effective
Amendment No. 62.
(9) None.
(10) Not applicable.
B. (1) Not applicable.
(2) Audited Financial Statements, for the fiscal year ended
September 30, 1998, are filed herein as part of the
Prospectus.
C. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for the effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Post-Effective Amendment No. 65 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on this 19th day of November 1998.
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Martha Willis
Martha Willis, President and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/Martha Willis President and Director November 19, 1998
Martha Willis
/s/Edward C. Johnson 3d Director November 19, 1998
Edward C. Johnson 3d
/s/James C. Curvey Director November 19, 1998
James C. Curvey
/s/Caron Ketchum Treasurer November 19, 1998
Caron Ketchum
FEDERAL INSURANCE COMPANY
STATEMENT OF ASSETS, LIABILITIES AND SURPLUS TO POLICYHOLDERS
Statutory Basis
DECEMBER 31, 1997
(in thousands of dollars)
ASSETS
Cash $ 5,310
United States Treasury Bonds 275,772
United States Government and Federal
Agency Guaranteed Bonds 156,325
State and Municipal Bonds 5,196,439
Other Bonds 1,515,907
Stocks 465,563
Short Term Investments 714,066
Other Invested Assets 264,077
TOTAL INVESTMENTS 8,593,459
Investments in Affiliates:
Pacific Indemnity Company 530,492
Vigilant Insurance Company 309,687
Great Northern Insurance Company 134,688
Chubb Insurance Company of Europe 98,982
CC Canada Holdings Ltd. 98,776
Other Affiliates 92,953
Net Premiums Receivable 582,526
Other Assets 383,694
TOTAL ADMITTED ASSETS $ 10,825,257
LIABILITIES
AND
SURPLUS TO POLICYHOLDERS
Outstanding Losses and Loss Expenses $ 6,065,735
Unearned Premiums 1,683,472
Provision for Reinsurance 45,454
Other Liabilities 475,480
TOTAL LIABILITIES 8,270,141
Capital Stock 13,987
Paid-In Surplus 378,890
Unassigned Funds 1,972,505
Unrealized Appreciation of Investments 189,734
SURPLUS TO POLICYHOLDERS 2,555,116
TOTAL LIABILITIES AND SURPLUS
TO POLICYHOLDERS $ 10,825,257
Investments are valued in accordance with requirements of the National
Association of Insurance Commissioners.
Investments valued at $22,374 are deposited with government
authorities as required by law.
State, County & City of New York, -
___________________________________________________________________ of
the Federal Insurance Company
being duly sworn, deposes and says that the foregoing Statement of
Assets, Liabilities and Surplus to Policyholders of said Federal
Insurance Company on December 31, 1997 is true and correct and is a
true abstract of the Annual Statement of said Company as filed with
the Secretary of the Treasury of the United States for the 12 months
ending December 31, 1997.
Subscribed and sworn to before me
this _____________ day of ____________________ , 1998.
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of Fidelity Distributors
Corporation:
We hereby consent to the inclusion in this Post-Effective Amendment
No. 65 to Registration Statement No. 2-34100 on Form S-6 of our report
dated January 28, 1998, on our audit of the statement of financial
condition of Fidelity Distributors Corporation as of December 31,
1997.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 19, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Directors of Fidelity Distributors Corporation and Investors
under Fidelity Systematic Investment Plans: Destiny Plans I and
Destiny Plans II:
We hereby consent to the inclusion in this Post-Effective Amendment
No. 65 to Registration Statement No. 2-34100 on Form S-6 of our report
dated November 12, 1998, on our audit of the financial statements of
Fidelity Systematic Investment Plans: Destiny Plans I and Destiny
Plans II.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 19, 1998
KIRKPATRICK & LOCKHART
1800 MASSACHUSETTS AVENUE, NW
2ND FLOOR
WASHINGTON, D.C. 20036-1800
November 19, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Michael Shaffer
Room 10125, Mail Stop 10-6
Re: Fidelity Systematic Investment Plans:
Destiny Plans I and Destiny Plans II (the funds)
File Nos. 2-34100
Post-Effective Amendment No. 65
Dear Mr. Shaffer:
We serve as special counsel to the above-referenced funds with
respect to certain matters which arise from time to time under the
federal securities laws. In that capacity, we have reviewed a draft
of the amendment to the funds' Registration Statement on Form S-6
which accompanies this letter ("Amendment"). The Amendment was
prepared and finalized by Fidelity Management & Research Company
("FMR"), the funds' investment adviser, which has represented to us
that no significant changes have been made between the version
reviewed by us and the version being filed electronically. The
Amendment is being filed for the purpose of bringing the financial
statements and other information up to date, and in conjunction
therewith, making certain other changes in the disclosures contained
in the funds' most recent post-effective amendment. Pursuant to
paragraph (b)(4) of Rule 485, we represent that, to the best of our
knowledge based upon our review of the draft Amendment, the Amendment
does not contain disclosures which would render it ineligible to
become effective pursuant to Rule 485(b).
Sincerely,
/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
