(2_FIDELITY_LOGOS)FIDELITY
MID-CAP STOCK
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 6 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 9 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 10 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 22 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 26 NOTES TO THE FINANCIAL STATEMENTS.
DISTRIBUTIONS 30
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October, the
Standard & Poor's 500 Index remained up more than 25% year-to-date,
twice its historical annual average. Meanwhile, bond markets -
primarily influenced by a relatively steady flow of positive news on
the inflation front - continued to post moderate returns through the
first 10 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY MID-CAP STOCK 24.23% 25.13% 108.20%
S&P MIDCAP 400 (REGISTERED TRADEMARK) 24.13% 32.67% 92.86%
MID-CAP FUNDS AVERAGE 24.65% 22.80% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on March 29, 1994. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the fund's returns to
the performance of the Standard & Poor's MidCap 400 Index - a widely
recognized, unmanaged index of 400 medium-capitalization stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the mid-cap funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past six months average represents a
peer group of 264 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1997 PAST 1 LIFE OF
YEAR FUND
FIDELITY MID-CAP STOCK 25.13% 22.63%
S&P MIDCAP 400 32.67% 20.04%
MID-CAP FUNDS AVERAGE 22.80% N/A
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19971031 19971111 095940 S00000000000001
Mid-Cap Stock S&P MidCap 400
00337 SP004
1994/03/29 10000.00 10000.00
1994/03/31 9780.00 9631.19
1994/04/30 9840.00 9702.46
1994/05/31 9890.00 9610.29
1994/06/30 9690.00 9279.69
1994/07/31 9930.00 9594.28
1994/08/31 10740.00 10097.02
1994/09/30 10990.00 9908.20
1994/10/31 11180.00 10016.20
1994/11/30 10720.00 9564.47
1994/12/31 10846.15 9652.27
1995/01/31 10927.24 9752.75
1995/02/28 11464.48 10263.99
1995/03/31 11860.51 10442.07
1995/04/30 12195.61 10651.75
1995/05/31 12378.39 10908.78
1995/06/30 12984.78 11352.87
1995/07/31 13715.88 11945.15
1995/08/31 14004.20 12166.02
1995/09/30 14302.82 12460.92
1995/10/31 14014.50 12140.30
1995/11/30 14539.66 12670.47
1995/12/31 14525.66 12638.92
1996/01/31 14977.57 12822.31
1996/02/29 15397.20 13258.14
1996/03/31 15386.44 13416.97
1996/04/30 15956.71 13826.73
1996/05/31 16666.85 14013.66
1996/06/30 16158.58 13803.32
1996/07/31 15221.85 12869.52
1996/08/31 16080.52 13611.71
1996/09/30 17073.01 14205.18
1996/10/31 16638.10 14246.52
1996/11/30 17429.86 15049.02
1996/12/31 17157.68 15065.73
1997/01/31 17731.94 15631.30
1997/02/28 17274.87 15502.81
1997/03/31 16325.58 14841.92
1997/04/30 16759.21 15226.77
1997/05/31 18165.57 16558.20
1997/06/30 19160.83 17023.32
1997/07/31 20672.56 18708.80
1997/08/31 20635.69 18686.16
1997/09/30 21704.96 19760.24
1997/10/31 20820.05 19286.00
IMATRL PRASUN SHR__CHT 19971031 19971111 095942 R00000000000047
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Mid-Cap Stock Fund on March 29, 1994, when the
fund started. As the chart shows, by October 31, 1997, the value of
the investment would have grown to $20,820 - a 108.20% increase on the
initial investment. For comparison, look at how the S&P MidCap 400
Index did over the same period. With dividends and capital gains, if
any, reinvested the same $10,000 investment would have grown to
$19,286 - an 92.86% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn,
the share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Katherine Collins, Portfolio Manager of Fidelity
Mid-Cap Stock Fund
Q. HOW DID THE FUND PERFORM, KATHERINE?
A. Performance improved over the period. During the six months that
ended on October 31, 1997, the fund had a return of 24.23%, compared
to a return of 24.13% for the Standard & Poor's MidCap 400 Index and
24.65% for the mid-cap funds average monitored by Lipper Analytical
Services. For the 12 months that ended on October 31, the fund had a
total return of 25.13%, while the S&P index had a return of 32.67% and
the mid-cap funds average return was 22.80%.
Q. WHAT WERE THE KEY FACTORS THAT CONTRIBUTED TO THE FUND'S
PERFORMANCE?
A. First, the mid-cap market overall started to do better,
particularly around the middle of the six-month period. Next, the fund
had good performance in several sectors and in a number of individual
stocks. Two industries in particular benefited from consolidation
opportunities that allowed them to increase operating efficiences and
profitability following mergers. In the broadcasting industry, several
portfolio holdings did well, including Chancellor Media, formerly
known as Evergreen Media; Clear Channel Communications; and American
Radio Systems. The general health care area also has been helped by
consolidation from mergers and acquisitions. Among the holdings that
benefited from this trend were McKesson, a drug distribution company
that has performed very well following its acquisition of Foxmeyer,
and CVS, which was helped both by its acquisition of Revco and by its
very strong pharmacy business.
Q. WERE THERE ANY OTHER INDUSTRIES THAT DID VERY WELL THAT MAY NOT
HAVE BEEN PART OF THIS CONSOLIDATION TREND?
A. Yes. The energy services industry has done well, benefiting from an
increase in exploration for energy and limited supply of equipment.
Positions in the energy services industry that have been strong
contributors to performance include TransOcean Offshore and Cooper
Cameron.
Q. TECHNOLOGY CONTINUES TO BE AN AREA OF EMPHASIS, AT 15% OF PORTFOLIO
ASSETS. WHAT WAS YOUR STRATEGY IN INVESTING IN TECHNOLOGY COMPANIES?
A. In the technology sector, I try not to count only on unit sales
growth, because this is hard to predict and the stocks can be very
volatile when unit sales change abruptly. Instead, I emphasize two
types of companies. The first is the company that either has a large
service component or has regular recurring revenues. One great
contributor to performance that illustrates this strategy is Keane,
which is involved in helping other companies solve their technical
problems. Keane is helping its customers deal with the "Year 2000
problem" in their computer systems. This problem is complex because
most companies have many old computer systems not prepared to deal
with dates after the year 1999. The other type of company I look for
is the niche company that has good prospects as a result of a
turnaround because of new management or a new product cycle, or
because it has a truly unique product or service that is going to be
in demand, no matter what. One company that illustrates these features
is Synopsys, which is involved in semiconductor design. It has a new
chief financial officer, recently made a strategic acquisition and is
in an area where its services increasingly are in demand as chips
become more complex.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The semiconductor equipment stocks were disappointing. I believe
some of these stocks have strong potential because the production of
computer chips requires different types of equipment as semiconductors
become more complicated. Over the full six-month time frame, these
stocks performed well, but they were hit especially hard towards the
end of this period due to concerns about their Asian exposure. Most of
these companies have significant sales to Asian semiconductor
producers, which could be at risk. I still like this area longer term,
but the rapid decline in these stocks illustrated how sensitive they
may be to any changes in spending by the semiconductor manufacturers.
Another disappointment was Oxford Health, an HMO. The company has been
upgrading its computer systems over the past year, and recently
discovered that it had mis-estimated both costs and revenues during
the difficult transition period. Its stock fell by about two-thirds in
a single day.
Q. THE STOCK MARKET UNDERWENT A SIGNIFICANT CORRECTION IN LATE
OCTOBER, ALTHOUGH IT CAME BACK STRONGLY. HOW DID THIS AFFECT THE FUND?
A. While the fund has a growth orientation, it was not hurt as badly
in the correction as more aggressive growth funds. Additionally, late
October really showed Fidelity's research strength at its best. When
the market dropped over 500 points in one day, all of our analysts
were able to quickly sift through their stocks for unusual
opportunities. In the somewhat inefficient mid-cap sector, research
into companies is not as widespread as among large-cap stocks and good
companies can be undervalued more easily. As a result of Fidelity's
research, I was able to do some opportunistic buying of great
companies whose stocks had been unjustly beaten down.
Q. WHAT IS YOUR OUTLOOK?
A. I am optimistic for several reasons. First, there are thousands of
mid-cap companies, so there is plenty of opportunity. Second, a
volatile market makes Fidelity's research capabilities even more of an
advantage. We are constantly in touch with companies and able to take
advantage of short-term dislocations in the market. Third, this is a
classic bottom-up, stock-picking fund. There is plenty of potential in
the mid-cap market to find innovative, misunderstood, undervalued or
simply overlooked companies whose stocks will outperform.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
KATHERINE COLLINS ON THE
RESURGENCE OF MID-CAP STOCKS:
"In the first half of 1997, the S&P
Mid-Cap 400 Index underperformed
the S&P 500, which is made up of
large-cap stocks, by about 8 percent,
an unusually large amount. This
trend has reversed in the past few
months, with year-to-date
performance of the two indexes
roughly equal through October. Why?
In the second half of 1996 and the
beginning of 1997, the mid-cap
universe of companies grew their
earnings significantly slower than
large-cap companies. Over the long
term, mid-cap companies
consistently have grown faster than
large companies, so this was an
unusual period.
"In the second quarter of 1997 and
continuing into the third quarter,
this earnings trend reversed, and
the mid-cap universe began growing
faster than large-caps again. Part of
this change may be a reversion to
normal historical patterns, but
another likely factor is international
exposure. Since larger companies
tend to do more business overseas,
the strong dollar and, more recently,
the Asian currency crisis tend to be
more negative for big companies
than small companies.
"Looking forward, despite the
catch-up in performance, the
mid-cap sector remains at relatively
attractive valuation levels. This
provides a solid backdrop for what we
spend most of our time
doing-researching each company
individually to find the best
opportunities within the mid-cap
universe."
FUND FACTS
GOAL: long-term growth of
capital by investing mainly
in equity securities of
companies with
medium-sized market
capitalizations
START DATE: March 29, 1994
FUND NUMBER: 337
TRADING SYMBOL: FMCSX
SIZE: as of October 31, 1997,
more than $1.6 billion
MANAGER: Katherine Collins,
since January 1997; manager
Fidelity Advisor Mid Cap Fund
since January 1997; Fidelity
Select Leisure Portfolio, Fidelity
Select Consumer Industries
Portfolio and Fidelity Advisor
Consumer Industries Portfolio,
1996-January 1997; Fidelity
Select Construction and
Housing Portfolio,
1992-1994; joined Fidelity
in 1990
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF OCTOBER 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
LEGGETT & PLATT, INC. 1.8 1.0
MCKESSON CORP. 1.8 0.7
CVS CORP. 1.3 1.2
USA WASTE SERVICES, INC. 1.2 1.2
OMNICOM GROUP, INC. 1.2 0.9
KEANE, INC. 1.2 1.4
STANLEY WORKS 1.1 0.8
TYCO INTERNATIONAL LTD. 1.1 1.0
CKE RESTAURANTS, INC. 1.0 0.0
PROFFITTS, INC. 1.0 0.3
TOP FIVE MARKET SECTORS AS OF OCTOBER 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 14.8 14.0
RETAIL & WHOLESALE 11.2 9.6
MEDIA & LEISURE 10.4 12.2
HEALTH 9.7 9.4
FINANCE 9.4 9.2
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF OCTOBER 31, 1997 * AS OF APRIL 30, 1997 **
ROW: 1, COL: 1, VALUE: 4.6
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 95.40000000000001
STOCKS 95.4%
SHORT-TERM
INVESTMENTS 4.6%
FOREIGN
INVESTMENTS 1.6%
STOCKS 95.4%
SHORT-TERM
INVESTMENTS 4.6%
FOREIGN
INVESTMENTS 1.6%
ROW: 1, COL: 1, VALUE: 4.6
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 95.40000000000001
*
**
INVESTMENTS OCTOBER 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 95.4%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 3.7%
AEROSPACE & DEFENSE - 1.9%
AAR Corp. 241,500 $ 8,649
BE Aerospace, Inc. (a) 98,100 2,759
Gulfstream Aerospace Corp. (a) 448,400 13,003
Harsco Corp. 189,400 7,860
32,271
DEFENSE ELECTRONICS - 1.4%
Litton Industries, Inc. (a) 170,000 8,628
Northrop Grumman Corp. 131,500 14,366
22,994
SHIP BUILDING & REPAIR - 0.4%
Avondale Industries, Inc. (a) 250,000 6,750
TOTAL AEROSPACE & DEFENSE 62,015
BASIC INDUSTRIES - 5.7%
CHEMICALS & PLASTICS - 1.9%
Cytec Industries, Inc. (a) 171,900 8,380
Goodrich (B.F.) Co. 191,700 8,543
Sealed Air Corp. (a) 163,100 8,410
Spartech Corp. 85,800 1,362
Valspar Corp. 177,400 5,233
31,928
IRON & STEEL - 0.8%
Dofasco Inc. 139,300 2,512
Nucor Corp. 109,200 5,706
Quanex Corp. 52,100 1,439
Steel Dynamics, Inc. 195,800 4,161
13,818
METALS & MINING - 0.3%
Superior Telecom, Inc. (a) 134,800 4,617
PACKAGING & CONTAINERS - 0.9%
Corning, Inc. 162,600 7,337
Owens-Illinois, Inc. (a) 223,700 7,718
15,055
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 1.8%
Alliance Forest Products, Inc. (a) 16,700 $ 347
Fort James Corp. 402,637 15,980
Ivex Packaging Corp. 155,000 3,273
Pentair, Inc. 235,100 9,081
Tembec, Inc. Class A (a) 109,300 722
29,403
TOTAL BASIC INDUSTRIES 94,821
CONSTRUCTION & REAL ESTATE - 2.5%
BUILDING MATERIALS - 1.1%
Centex Construction Products, Inc. 106,200 3,292
Elcor Corp. 158,300 5,788
Hexcel Corp. (a) 131,800 3,534
Lafarge Corp. 123,900 3,763
Medusa Corp. 63,900 2,700
19,077
CONSTRUCTION - 0.9%
Continental Homes Holding Corp. 79,000 2,380
D.R. Horton, Inc. 225,400 3,381
Lennar Corp. 62,300 2,535
Toll Brothers, Inc. (a) 141,200 3,124
Walter Industries, Inc. (a) 181,500 3,630
15,050
REAL ESTATE - 0.2%
Pacific Greystone Corp. (a) 205,181 3,796
REAL ESTATE INVESTMENT TRUSTS - 0.3%
Brandywine Realty Trust 81,300 1,905
SL Green Realty Corp. 96,700 2,424
4,329
TOTAL CONSTRUCTION & REAL ESTATE 42,252
DURABLES - 6.2%
AUTOS, TIRES, & ACCESSORIES - 0.3%
Casey's General Stores, Inc. 236,000 5,694
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER DURABLES - 0.5%
Samsonite Corp. (a) 196,800 $ 9,127
CONSUMER ELECTRONICS - 0.4%
Black & Decker Corp. 161,300 6,139
HOME FURNISHINGS - 3.3%
Bassett Furniture Industries, Inc. 9,700 272
Ethan Allen Interiors, Inc. 198,300 7,027
Furniture Brands International, Inc. (a) 189,300 3,171
Haverty Furniture Companies, Inc. 111,800 1,453
Knoll, Inc. 261,100 7,246
Leggett & Platt, Inc. 714,300 29,821
Miller (Herman), Inc. 131,600 6,432
Stanley Furniture Co, Inc. (a) 30,100 745
56,167
TEXTILES & APPAREL - 1.7%
Kellwood Co. 52,800 1,825
Liz Claiborne, Inc. 125,700 6,371
Mohawk Industries, Inc. (a) 324,300 9,972
Pacific Sunwear of California, Inc. (a) 209,200 5,779
Reebok International Ltd. 102,500 3,780
27,727
TOTAL DURABLES 104,854
ENERGY - 7.0%
ENERGY SERVICES - 2.9%
Dresser Industries, Inc. 150,400 6,336
Falcon Drilling, Inc. (a) 230,200 8,374
Noble Drilling Corp. (a) 155,700 5,537
Reading & Bates Corp. (a) 229,300 9,717
Transocean Offshore, Inc. 274,894 14,844
Weatherford Enterra, Inc. (a) 74,700 3,814
48,622
OIL & GAS - 4.1%
Cabot Oil & Gas Corp. Class A 145,300 3,487
Coastal Corp. (The) 79,500 4,780
Cooper Cameron Corp. (a) 148,800 10,750
EVI, Inc. (a) 96,900 6,220
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Nuevo Energy Corp. (a) 226,000 $ 9,365
Ocean Energy, Inc. (a) 158,400 9,781
Pioneer Natural Resources Co. 153,485 6,149
Renaissance Energy Ltd. (a) 147,700 3,429
Tosco Corp. 223,900 7,389
Valero Energy Corp. 268,500 8,089
69,439
TOTAL ENERGY 118,061
FINANCE - 9.4%
BANKS - 1.9%
Comerica, Inc. 162,800 12,872
National Bank of Canada 135,400 1,927
NationsBank Corp. 71,800 4,299
North Fork Bancorp., Inc. 48,000 1,413
U.S. Bancorp 110,456 11,232
31,743
CREDIT & OTHER FINANCE - 2.1%
Associates First Capital Corp. 169,800 10,803
Green Tree Financial Corp. 186,300 7,848
Household International, Inc. 73,500 8,324
Money Store, Inc. 301,000 8,541
35,516
INSURANCE - 4.9%
Allmerica Financial Corp. 223,000 10,453
AMBAC, Inc. 314,100 13,271
American Bankers Insurance Group, Inc. 277,600 10,375
CapMAC Holdings, Inc. 193,500 5,805
MBIA, Inc. 146,800 8,771
Progressive Corp. 46,100 4,806
Protective Life Corp. 167,000 8,830
Reliastar Financial Corp. 144,800 5,412
SunAmerica, Inc. 186,200 6,692
UNUM Corp. 160,540 7,826
Vesta Insurance Group Corp. 3,300 190
82,431
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - 0.5%
Washington Mutual, Inc. 96,510 $ 6,605
Webster Financial Corp. Waterbury, Conn. 12,100 746
7,351
TOTAL FINANCE 157,041
HEALTH - 9.7%
DRUGS & PHARMACEUTICALS - 1.4%
Bristol-Myers Squibb Co. 63,100 5,537
Cytyc Corp. (a) 166,200 3,947
Forest Laboratories, Inc. 99,600 4,607
Integrated Process Equipment Corp. (a) 158,000 3,506
Twinlab Corp. 304,000 5,775
23,372
MEDICAL EQUIPMENT & SUPPLIES - 5.7%
Becton, Dickinson & Co. 180,100 8,296
Boston Scientific Corp. (a) 149,800 6,816
Cardinal Health, Inc. 166,900 12,392
Cooper Companies, Inc. (a) 206,200 7,385
Guidant Corp. 145,900 8,389
InControl, Inc. (a) 269,900 2,092
McKesson Corp. 275,600 29,575
Medtronic, Inc. 268,200 11,667
Sybron International Corp. (a) 250,900 10,067
96,679
MEDICAL FACILITIES MANAGEMENT - 2.6%
Columbia/HCA Healthcare Corp. (a) 150,600 4,254
Covance, Inc. 225,200 3,983
HEALTHSOUTH Corp. (a) 484,000 12,372
Health Management Associates, Inc. Class A (a) 515,850 12,574
Humana, Inc. (a) 112,600 2,365
Oxford Health Plans, Inc. (a) 162,500 4,195
Wellpoint Health Networks, Inc. (a) 74,900 3,427
43,170
TOTAL HEALTH 163,221
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 5.2%
ELECTRICAL EQUIPMENT - 0.9%
General Electric Co. 77,600 $ 5,010
Leitch Technology Corp. (a) 129,700 3,969
Westinghouse Electric Corp. 219,900 5,814
14,793
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
Kaydon Corp. 283,000 8,596
Stanley Works 432,900 18,290
Tyco International Ltd. 474,160 17,900
44,786
POLLUTION CONTROL - 1.7%
Thermo Instrument Systems, Inc. (a) 263,750 7,609
USA Waste Services, Inc. (a) 562,492 20,812
28,421
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 88,000
MEDIA & LEISURE - 10.4%
BROADCASTING - 3.2%
American Radio Systems Corp. Class A 334,000 16,282
Chancellor Media Corp. (a) 191,709 10,520
Clear Channel Communications, Inc. (a) 83,600 5,518
HSN, Inc. (a) 262,000 10,480
Westwood One, Inc. (a) 379,400 11,643
54,443
ENTERTAINMENT - 0.9%
Cinar Films, Inc. Class B (sub-vtg.)(a) 142,900 5,499
Disney (Walt) Co. 43,300 3,561
Premier Parks, Inc. (a) 162,400 6,497
15,557
LEISURE DURABLES & TOYS - 1.2%
Harley-Davidson, Inc. 381,600 10,590
Mattel, Inc. 238,000 9,252
19,842
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 1.3%
Bristol Hotel Co. (a) 118,450 $ 3,050
Doubletree Corp. (a) 324,200 13,494
Mirage Resorts, Inc. (a) 177,100 4,428
WMS Industries, Inc. 29,800 725
21,697
PUBLISHING - 1.0%
Cognizant Corp. 122,400 4,797
Tribune Co. 200,300 11,041
15,838
RESTAURANTS - 2.8%
CKE Restaurants, Inc. 430,950 17,210
NPC International, Inc. (a) 34,100 482
Rainforest Cafe, Inc. (a) 147,000 5,016
Star Buffet, Inc. 66,500 952
Starbucks Corp. (a) 343,000 11,319
Tricon Global Restaurants, Inc. (a) 222,400 6,742
Wendy's International, Inc. 266,000 5,586
47,307
TOTAL MEDIA & LEISURE 174,684
NONDURABLES - 3.8%
AGRICULTURE - 0.1%
Fresh Del Monte Produce, Inc. 88,500 1,427
FOODS - 1.6%
American Italian Pasta Co. Series A 1,100 23
Hudson Foods, Inc. Class A 132,000 2,475
Interstate Bakeries Corp. 158,600 10,130
Pilgrims Pride Corp. 127,900 1,679
Suiza Foods Corp. (a) 119,800 6,035
Tyson Foods, Inc. 348,800 6,584
26,926
HOUSEHOLD PRODUCTS - 2.1%
Alberto-Culver Co. Class A 471,100 12,219
Avon Products, Inc. 80,300 5,260
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Brady (W.H.) Co. Class A 280,800 $ 8,986
Church & Dwight Co., Inc. 334,800 9,646
36,111
TOTAL NONDURABLES 64,464
PRECIOUS METALS - 0.5%
PRECIOUS METALS - 0.5%
Getchell Gold Corp. (a) 209,600 7,546
RETAIL & WHOLESALE - 11.2%
APPAREL STORES - 3.0%
Claire's Stores, Inc. 225,800 4,996
Kenneth Cole Productions, Inc. Class A (a) 151,700 2,086
Payless ShoeSource, Inc. (a) 161,500 9,004
Ross Stores, Inc. 330,800 12,363
Stage Stores, Inc. (a) 308,700 11,267
TJX Companies, Inc. 363,600 10,772
50,488
DRUG STORES - 1.6%
Arbor Drugs, Inc. 214,400 5,735
CVS Corp. 344,597 21,128
26,863
GENERAL MERCHANDISE STORES - 3.8%
Consolidated Stores Corp. (a) 391,300 15,603
Dollar Tree Stores (a) 357,150 14,465
Hudson's Bay Co. Ord. 212,700 4,870
Michaels Stores, Inc. (a) 247,700 7,446
Proffitts, Inc. (a) 568,500 16,310
Shopko Stores, Inc. (a) 179,600 4,501
63,195
GROCERY STORES - 1.7%
Hannaford Brothers Co. 208,700 7,891
JP Foodservice, Inc. (a) 235,100 7,509
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - CONTINUED
Rykoff-Sexton, Inc. 105,300 $ 2,264
Safeway, Inc. (a) 199,000 11,567
29,231
RETAIL & WHOLESALE, MISCELLANEOUS - 1.1%
Borders Group, Inc. (a) 120,200 3,118
Brylane, Inc. 138,400 6,012
Zale Corp. (a) 346,400 8,746
17,876
TOTAL RETAIL & WHOLESALE 187,653
SERVICES - 3.8%
ADVERTISING - 1.2%
Omnicom Group, Inc. 281,200 19,860
LEASING & RENTAL - 0.3%
Avis Rent A Car, Inc. (a) 70,400 1,932
Ryder Systems, Inc. 92,200 3,227
5,159
PRINTING - 0.5%
Donnelley (R.R.) & Sons Co. 249,000 8,123
SERVICES - 1.8%
AccuStaff, Inc. (a) 278,800 7,963
Computer Horizons Corp. (a) 174,000 5,285
Gartner Group, Inc. Class A (a) 223,500 6,314
Hagler Bailly, Inc. 114,900 2,327
Personnel Group of America, Inc. (a) 68,700 2,383
Service Corp. International 115,900 3,528
Snyder Communications, Inc. (a) 103,300 3,047
30,847
TOTAL SERVICES 63,989
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 14.8%
COMMUNICATIONS EQUIPMENT - 1.2%
Andrew Corp. (a) 65,300 $ 1,514
Aspect Telecommunications Corp. (a) 226,900 5,446
Dialogic Corp. (a) 162,900 6,720
Pairgain Technologies, Inc. (a) 207,000 5,847
19,527
COMPUTER SERVICES & SOFTWARE - 8.3%
Affiliated Computer Services, Inc. Class A (a) 201,900 5,073
America Online, Inc. (a) 86,300 6,645
BMC Software, Inc. (a) 115,100 6,949
Citrix Systems, Inc. (a) 110,800 8,137
CompUSA, Inc. (a) 215,000 7,041
Computer Learning Centers, Inc. (a) 145,200 6,570
Compuware Corp. (a) 199,000 13,159
Data Dimensions, Inc. (a) 239,400 6,464
E Trade Group, Inc. (a) 117,100 3,615
Equifax, Inc. 158,000 4,908
HBO & Co. 167,000 7,265
Keane, Inc. (a) 665,900 19,728
Pegasus Systems, Inc. 241,800 3,748
Sabre Group Holdings, Inc. Class A (a) 174,600 4,627
Siebel Systems, Inc. (a) 114,700 4,631
SunGard Data Systems, Inc. (a) 221,600 5,235
Symantec Corp. (a) 466,800 10,211
Synopsys, Inc. (a) 399,100 15,515
139,521
COMPUTERS & OFFICE EQUIPMENT - 1.6%
Digital Equipment Corp. (a) 98,200 4,916
EMC Corp. (a) 102,500 5,740
Eltron International, Inc. (a) 141,200 4,112
Quantum Corp. (a) 235,800 7,457
Symbol Technologies, Inc. 134,650 5,352
27,577
ELECTRONIC INSTRUMENTS - 2.9%
KLA-Tencor Corp. (a) 97,400 4,280
Lam Research Corp. (a) 286,497 10,349
Newport Corp. 64,600 1,050
Novellus Systems, Inc. (a) 148,800 6,622
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - CONTINUED
Perkin-Elmer Corp. 138,600 $ 8,663
Thermo Electron Corp. (a) 174,600 6,515
Waters Corp. (a) 270,700 11,910
49,389
ELECTRONICS - 0.8%
Flextronics International (a) 96,200 3,656
International Rectifier Corp. (a) 4,900 67
Linear Technology Corp. 146,100 9,186
12,909
TOTAL TECHNOLOGY 248,923
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.1%
Mesaba Holdings, Inc. (a) 91,000 1,877
RAILROADS - 0.4%
Wisconsin Central Transportation Corp. (a) 177,800 5,534
TRUCKING & FREIGHT - 0.0%
C.H. Robinson Worldwide, Inc. 2,900 64
TOTAL TRANSPORTATION 7,475
UTILITIES - 1.0%
ELECTRIC UTILITY - 0.5%
AES Corp. (a) 230,400 9,130
TELEPHONE SERVICES - 0.5%
Cincinnati Bell, Inc. 190,300 5,138
WorldCom, Inc. (a) 83,900 2,821
7,959
TOTAL UTILITIES 17,089
TOTAL COMMON STOCKS
(Cost $1,445,638) 1,602,088
CASH EQUIVALENTS - 4.6%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (b) (Cost $77,499) 77,499,156 $ 77,499
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,523,137) $ 1,679,587
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.64%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At October 31, 1997, the aggregate cost of investment securities for
income tax purposes was $1,523,699,000. Net unrealized appreciation
aggregated $155,888,000, of which $209,555,000 related to appreciated
investment securities and $53,667,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) OCTOBER 31, 1997 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $1,523,137) - $ 1,679,587
SEE ACCOMPANYING SCHEDULE
CASH 162
RECEIVABLE FOR INVESTMENTS SOLD 27,178
RECEIVABLE FOR FUND SHARES SOLD 11,561
DIVIDENDS RECEIVABLE 386
INTEREST RECEIVABLE 372
OTHER RECEIVABLES 67
TOTAL ASSETS 1,719,313
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 37,569
PAYABLE FOR FUND SHARES REDEEMED 6,066
ACCRUED MANAGEMENT FEE 799
OTHER PAYABLES AND ACCRUED EXPENSES 480
TOTAL LIABILITIES 44,914
NET ASSETS $ 1,674,399
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,377,836
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME (148)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 140,262
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 156,449
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 98,856 SHARES OUTSTANDING $ 1,674,399
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $16.94
PER SHARE ($1,674,399 (DIVIDED BY) 98,856 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED OCTOBER 31, 1997 (UNAUDITED)
INVESTMENT INCOME $ 3,523
DIVIDENDS
INTEREST 1,649
TOTAL INCOME 5,172
EXPENSES
MANAGEMENT FEE $ 4,060
BASIC FEE
PERFORMANCE ADJUSTMENT 565
TRANSFER AGENT FEES 1,745
ACCOUNTING FEES AND EXPENSES 280
NON-INTERESTED TRUSTEES' COMPENSATION 2
CUSTODIAN FEES AND EXPENSES 28
REGISTRATION FEES 165
AUDIT 23
LEGAL 3
MISCELLANEOUS 6
TOTAL EXPENSES BEFORE REDUCTIONS 6,877
EXPENSE REDUCTIONS (243) 6,634
NET INVESTMENT INCOME (LOSS) (1,462)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 142,579
FOREIGN CURRENCY TRANSACTIONS 2 142,581
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 108,188
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (1) 108,187
NET GAIN (LOSS) 250,768
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 249,306
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1997 APRIL 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ (1,462) $ 2,558
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 142,581 191,856
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 108,187 (102,264)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 249,306 92,150
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (750) (3,338)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (54,077) (137,083)
TOTAL DISTRIBUTIONS (54,827) (140,421)
SHARE TRANSACTIONS 1,171,496 1,492,515
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 53,236 137,693
COST OF SHARES REDEEMED (846,207) (1,941,066)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 378,525 (310,858)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 573,004 (359,129)
NET ASSETS
BEGINNING OF PERIOD 1,101,395 1,460,524
END OF PERIOD (INCLUDING UNDER (OVER) DISTRIBUTION OF NET $ 1,674,399 $ 1,101,395
INVESTMENT INCOME OF $(148) AND $2,799, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 69,815 101,183
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 3,551 9,326
REDEEMED (51,523) (132,008)
NET INCREASE (DECREASE) 21,843 (21,499)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED APRIL 30, THREE MONTH MARCH 29, 1994
OCTOBER 31, 1997 PERIOD ENDED (COMMENCEMENT
APRIL 30, OF OPERATIONS) TO
JANUARY 31,
(UNAUDITED) 1997 1996 1995 1995
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 14.30 $ 14.83 $ 12.01 $ 10.78 $ 10.00
OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT (.03) D .03 D .11 G .02 -
INCOME (LOSS)
NET REALIZED AND 3.40 .73 3.49 1.23 .92
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT 3.37 .76 3.60 1.25 .92
OPERATIONS
LESS DISTRIBUTIONS (.01) (.03) (.06) - -
FROM NET INVESTMENT
INCOME
FROM NET REALIZED GAIN (.72) (1.26) (.72) (.02) (.14)
TOTAL DISTRIBUTIONS (.73) (1.29) (.78) (.02) (.14)
NET ASSET VALUE, $ 16.94 $ 14.30 $ 14.83 $ 12.01 $ 10.78
END OF PERIOD
TOTAL RETURN B, C 24.23% 5.03% 30.84% 11.61% 9.27%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 1,674 $ 1,101 $ 1,461 $ 459 $ 138
(IN MILLIONS)
RATIO OF EXPENSES TO .98% A 1.00% 1.02% 1.27% A 1.63% A
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .95% A, E .96% E 1.00% E 1.22% A, E 1.61% A,
AVERAGE NET ASSETS AFTER E
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT (.21)% A .17% 1.01% .95% A (.03)% A
INCOME (LOSS) TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 171% A 155% 179% 163% A 190% A
AVERAGE COMMISSION RATE F $ .0416 $ .0411
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
G INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.04 PER SHARE.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Mid-Cap Stock Fund (the fund) is a fund of Fidelity
Devonshire Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received. The effects of changes in
foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for non-taxable dividends, and losses deferred due to wash
sales . The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade. The cost of the foreign currency contracts is
included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account,
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
at a bank custodian. The securities are marked-to-market daily and
maintained at a value at least equal to the principal amount of the
repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of
the underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, Inc., an affiliate of FMR. The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in U.S. Treasury securities and repurchase agreements for
these securities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
received by the fund are recorded as interest income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,469,375,000 and $1,161,580,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annualized rate of .66% of average
net assets after the performance adjustment.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
statements. For the period, the transfer agent fees were equivalent to
an annualized rate of .25% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $252,067 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $232,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $2,000 and $9,000, respectively, under these arrangements.
DISTRIBUTIONS
The Board of Trustees of Fidelity Mid-Cap Stock Fund voted to pay on
December 8, 1997, to shareholders of record at the opening of business
on December 5, 1997, a distribution of $1.05 per share derived from
capital gains realized from sales of portfolio securities.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
Fidelity Management & Research
(U.K.) Inc., London, England
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail Johnson, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
TechnoQuantGrowth Fund
SM
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
