SUPPLEMENT TO FIDELITY EQUITY-INCOME FUND'S MARCH 30, 1998 PROSPECTUS
The following information replaces similar information found in the
"Securities and Investment Practices" section on page 10.
RESTRICTIONS: With respect to 75% of its total assets, the
fund may not invest in more than 10% of the outstanding voting
securities of a single issuer. This limitation does not apply to
securities of other investment companies.
The following information replaces similar information found in the
"Securities and Investment Practices" section on page 13.
RESTRICTIONS: With respect to 75% of its total assets, the
fund may not invest more than 5% in the securities of any one issuer.
This limitation does not apply to U.S. Government securities or to
securities of other investment companies.
The following information replaces similar information found in the
"Fundamental Investment Policies and Restrictions" section on page
13.
With respect to 75% of its total assets, the 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 or to
securities of other investment companies.
The following information supplements the information found in the
"Other Expenses" section on page 15.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees has authorized such payments.
SUPPLEMENT TO THE FIDELITY EQUITY-INCOME FUND
MARCH 30, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 2.
The fund may not:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
(vi) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 21.
The fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
THE FOLLOWING INFORMATION REPLACES ALL OF THE INFORMATION FOUND
UNDER THE HEADING "MANAGEMENT FEE" IN THE "MANAGEMENT CONTRACT"
SECTION BEGINNING ON PAGE 21.
MANAGEMENT FEE. For the services of FMR under the management
contract, the fund pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for Equity-Income.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
0 - $3 BILLION .5200% $ 0.5 BILLION .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
OVER 534 .2500
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $555 billion of group net assets - the approximate level for
January 1998 - was 0.2937%, which is the weighted average of the
respective fee rates for each level of group net assets up to $555
billion.
The fund's individual fund fee rate is 0.20%. Based on the average
group net assets of the funds advised by FMR for January 1998, the
fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE MANAGEMENT FEE RATE
EQUITY-INCOME 0.2937% + 0.20%* = 0.4937%
</TABLE>
* On December 1, 1998 the individual fund fee rate was increased
from 0.18% to 0.20%.
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
For the fiscal years ended January 31 , 1998, 1997, and 1996,
the fund paid FMR management fees of $84,814,000, $56,664,000, and
$39,630,000, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion
of the fund's expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
During the reporting period, FMR voluntarily modified the
breakpoints in the group fee rate schedule on January 1, 1996 to
provide for lower management fee rates as FMR's assets under
management increase.
Expense reimbursements by FMR will increase the fund's total
returns and yield, and repayment of the reimbursement by the fund will
lower its total returns and yield.
THE FOLLOWING SECTION IS TO BE ADDED, FOLLOWING THE "MANAGEMENT
CONTRACT" SECTION, ENDING ON PAGE 22.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on
behalf of the fund (the Plan) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the fund and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to
FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, the Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has authorized such
payments for Fidelity Equity-Income Fund shares.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plan by local
entities with whom shareholders have other relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the fund might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUST" SECTION ON PAGE 24.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of
the type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the
trust. The Declaration of Trust provides that the trust shall not have
any claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. The Declaration
of Trust provides for indemnification out of each fund's property of
any shareholder held personally liable for the obligations of the
fund. The Declaration of Trust also provides that each fund shall,
upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances
in which a fund itself would be unable to meet its obligations. FMR
believes that, in view of the above, the risk of personal liability to
shareholders is remote.
The Declaration of Trust further provides that the Trustees, if
they have exercised reasonable care, will not be liable for any
neglect or wrongdoing, but nothing in the Declaration of Trust
protects Trustees against any liability to which they would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive
or conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a
fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees. The trust or any fund
may be terminated upon the sale of its assets to, or merger with,
another open-end management investment company or series thereof, or
upon liquidation and distribution of its assets. Generally, the merger
of a trust or a fund with another entity or the sale of substantially
all of the assets of a trust or a fund to another entity requires the
vote of a majority of the outstanding shares of a trust or a fund, as
determined by the current value of each shareholder's investment in
the fund or trust. The Trustees may, however, reorganize or terminate
the trust or any fund without prior shareholder approval. If not so
terminated, the trust and its funds will continue indefinitely. Each
fund may invest all of its assets in another investment company.
SUPPLEMENT TO THE FIDELITY SMALL CAP STOCK FUND
FIDELITY MID-CAP STOCK FUND
FIDELITY LARGE CAP STOCK FUND
JUNE 19, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 24.
Each fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
THE FOLLOWING INFORMATION REPLACES ALL OF THE INFORMATION FOUND
UNDER THE HEADING "MANAGEMENT FEES" IN THE "MANAGEMENT CONTRACTS"
SECTION BEGINNING ON PAGE 25.
MANAGEMENT FEES. For the services of FMR under the
management contract, each fund pays FMR a monthly management fee which
has two components: a basic fee, which is the sum of a group fee rate
and an individual fund fee rate, and a performance adjustment based on
a comparison of each fund's performance to that of the Russell 2000
(Small Cap Stock), the S&P MidCap 400 (Mid-Cap Stock) or the S&P 500
(Large Cap Stock).
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for the funds.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
0 - $3 BILLION .5200% $ 0.5 BILLION .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
OVER 534 .2500
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $626 billion of group net assets - the approximate level for
April 1998 - was 0.2888%, which is the weighted average of the
respective fee rates for each level of group net assets up to $626
billion.
Small Cap Stock's, Mid-Cap Stock's and Large Cap Stock's individual
fund fee rates are 0.45%, 0.30%, and 0.30%, respectively. Based on the
average group net assets of the funds advised by FMR for April 1998,
each fund's annual basic fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE BASIC FEE RATE
SMALL CAP STOCK 0.2888% + 0.45% = 0.7388%
MID-CAP STOCK 0.2888% + 0.30% = 0.5888%
LARGE CAP STOCK 0.2888% + 0.30% = 0.5888%
</TABLE>
One-twelfth of this annual basic fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each
of Small Cap Stock, Mid-Cap Stock and Large Cap Stock is subject to
upward or downward adjustment, depending upon whether, and to what
extent, the fund's investment performance for the performance period
exceeds, or is exceeded by, the record of the Russell 2000, the S&P
MidCap 400 and the S&P 500, respectively, (the Index) over the same
period. The performance period for Small Cap Stock and Large Cap Stock
commenced on April 1, 1998 and July 1, 1995, respectively. Starting
with the twelfth month, the performance adjustment takes effect. Each
month subsequent to the twelfth month, a new month is added to the
performance period until the performance period includes 36 months.
Thereafter, the performance period consists of the most recent month
plus the previous 35 months.
Each percentage point of difference, calculated to the nearest
0.01% (for Small Cap Stock and Mid-Cap Stock) and 1.00% (for Large Cap
Stock) (up to a maximum difference of (plus/minus)10.00) is multiplied
by a performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each fund's average net
assets for the entire performance period, giving a dollar amount which
will be added to (or subtracted from) the basic fee.
The maximum annualized adjustment rate is (plus/minus)0.20% of a
fund's average net assets over the performance period.
A fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's shares at the NAV as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on a fund's
performance compared to the investment record of the applicable Index,
the controlling factor is not whether the fund's performance is up or
down per se, but whether it is up or down more or less than the record
of the Index. Moreover, the comparative investment performance of each
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of
time.
The following table shows the amount of management fees paid by
each fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by each fund.
FUND FISCAL YEARS ENDED PERFORMANCE MANAGEMENT FEES
APRIL 30 ADJUSTMENT PAID TO FMR
SMALL CAP STOCK 1998** N/A $ 380,263
MID-CAP STOCK 1998 $ 23,736 $ 9,412,300*
1997 $ 1,538,949 $ 10,757,959*
1996 $ 725,221 $ 7,129,455*
LARGE CAP STOCK 1998 $ (188,609) $ 606,874*
1997 $ (73,325) $ 533,745*
1996*** N/A $ 334,620
* Including the amount of the performance adjustment.
** From March 12, 1998 (commencement of operations).
*** From June 22, 1995 (commencement of operations).
FMR may, from time to time, voluntarily reimburse all or a portion
of a fund's operating expenses (exclusive of interest, taxes,
brokerage commissions and extraordinary expenses) which is subject to
revision or termination. FMR retains the ability to be repaid for
these expense reimbursements in the amount that expenses fall below
the limit prior to the end of the fiscal year.
During the reporting period, FMR voluntarily modified the
breakpoints in the group fee rate schedule on January 1, 1996 to
provide for lower management fee rates as FMR's assets under
management increase.
Expense reimbursements by FMR will increase a fund's total returns,
and repayment of the reimbursement by a fund will lower its total
returns.
FMR voluntarily agreed to reimburse Small Cap Stock if and to the
extent that its aggregate operating expenses, including management
fees, were in excess of an annual rate of 1.50% of its average net
assets. For the fiscal period ended April 30, 1998, management fees
incurred under the fund's contract prior to reimbursement amounted to
$380,263, and management fees reimbursed by FMR amounted to
$197,166.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUST" SECTION ON PAGE 30.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity
of the type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the
trust. Fidelity Devonshire Trust provides that the trust shall not
have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation,
or instrument entered into or executed by the trust or its Trustees
shall include a provision limiting the obligations created thereby to
the trust or to one or more funds and its or their assets. Fidelity
Commonwealth Trust provides that the trust shall not have any claim
against shareholders except for the payment of the purchase price of
shares and requires that each agreement, obligation, or instrument
entered into or executed by the trust or its Trustees shall include a
provision limiting the obligations created thereby to the trust and
its assets. Each Declaration of Trust provides for indemnification out
of each fund's property of any shareholder held personally liable for
the obligations of the fund. Each Declaration of Trust also provides
that its funds shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the fund and
satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which a fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if
they have exercised reasonable care, will not be liable for any
neglect or wrongdoing, but nothing in the Declaration of Trust
protects Trustees against any liability to which they would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive
or conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of a trust or fund may, as set
forth in the Declaration of Trust, call meetings of a trust or fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of an entire trust, the purpose of
voting on removal of one or more Trustees. Fidelity Commonwealth Trust
or Fidelity Small Cap Stock Fund or Fidelity Large Cap Stock Fund may
be terminated upon the sale of their assets to another open-end
management investment company, or upon liquidation and distribution of
its assets, if approved by vote of the holders of a majority of the
trust or the fund, as determined by the current value of each
shareholder's investment in the funds or trust. Fidelity Devonshire or
Fidelity Mid-Cap Stock Fund may be terminated upon the sale of its
assets to, or merger with, another open-end management investment
company or series thereof, or upon liquidation and distribution of
their assets. Generally, the merger of a trust or a fund with another
entity or the sale of substantially all of the assets of a trust or a
fund to another entity requires the vote of a majority of the
outstanding shares of a trust or a fund, as determined by the current
value of each shareholder's investment in the fund or trust. The
Trustees of Fidelity Devonshire Trust may, however, reorganize or
terminate the trust or any fund without prior shareholder approval. If
not so terminated, each trust and fund will continue indefinitely.
Each fund may invest all of its assets in another investment company.
SUPPLEMENT TO THE FIDELITY REAL ESTATE INVESTMENT PORTFOLIO
MARCH 30, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
The fund may not:
(7) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business).
(8) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
(vii) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company managed by Fidelity Management & Research Company or an
affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
THE FOLLOWING INFORMATION FOUND IN THE "INVESTMENT POLICIES AND
LIMITATIONS" SECTION ON PAGE 2 HAS BEEN ELIMINATED.
(vi) The fund does not currently intend to purchase or sell real
estate (except that the fund may purchase and sell mortgage-related
securities and securities of companies that deal in real estate or
interests therein and may liquidate real estate acquired as a result
of default on a mortgage) but this shall not prevent the fund from
investing in marketable securities issued by companies such as real
estate investment trusts which deal in real estate or interests
therein and participation interests in pools of real estate mortgage
loans.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 21.
The fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
THE FOLLOWING INFORMATION REPLACES ALL OF THE INFORMATION FOUND
UNDER THE HEADING "MANAGEMENT FEE" IN THE "MANAGEMENT CONTRACT"
SECTION BEGINNING ON PAGE 21.
MANAGEMENT FEE. For the services of FMR under the management
contract, the fund pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for Real Estate Investment
Portfolio.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
0 - $3 BILLION .5200% $ 0.5 BILLION .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
OVER 534 .2500
T he group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $555 billion of group net assets - the approximate level for
January 1998 - was 0.2937%, which is the weighted average of the
respective fee rates for each level of group net assets up to $555
billion.
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for January 1998, the
fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE MANAGEMENT FEE RATE
REAL ESTATE INVESTMENT 0.2937% + 0.30% = 0.5937%
</TABLE>
One-twelfth of this annual management fee rate is appl ied to
the fund's net assets averaged for the most recent month, giving a
dollar amount, which is the fee for that month.
For the fiscal years ended January 31 , 1998, 1997, and 1996,
the fund paid FMR management fees of $13,537,000, $6,154,000, and
$3,428,000, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion
of the fund's expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
During the reporting period, FMR voluntarily modified the
breakpoints in the group fee rate schedule on January 1, 1996 to
provide for lower management fee rates as FMR's assets under
management increase.
Expense reimbursements by FMR will increase the fund's total
returns and yield, and repayment of the reimbursement by the fund will
lower its total returns and yield.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUST" SECTION ON PAGE 25.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of
the type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the
trust. The Declaration of Trust provides that the trust shall not have
any claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. The Declaration
of Trust provides for indemnification out of each fund's property of
any shareholder held personally liable for the obligations of the
fund. The Declaration of Trust also provides that each fund shall,
upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances
in which a fund itself would be unable to meet its obligations. FMR
believes that, in view of the above, the risk of personal liability to
shareholders is remote.
The Declaration of Trust further provides that the Trustees, if
they have exercised reasonable care, will not be liable for any
neglect or wrongdoing, but nothing in the Declaration of Trust
protects Trustees against any liability to which they would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive
or conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a
fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees. The trust or any fund
may be terminated upon the sale of its assets to, or merger with,
another open-end management investment company or series thereof, or
upon liquidation and distribution of its assets. Generally, the merger
of a trust or a fund with another entity or the sale of substantially
all of the assets of a trust or a fund to another entity requires the
vote of a majority of the outstanding shares of a trust or a fund, as
determined by the current value of each shareholder's investment in
the fund or trust. The Trustees may, however, reorganize or terminate
the trust or any fund without prior shareholder approval. If not so
terminated, the trust and its funds will continue indefinitely. Each
fund may invest all of its assets in another investment company.
SUPPLEMENT TO THE FIDELITY UTILITIES FUND MARCH 30, 1998 PROSPECTUS
The following information replaces similar information found in the
"Performance" section on pages 7 and 8.
AVERAGE ANNUAL TOTAL RETURNS
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
UTILITIES 29.16% 15.91% 14.38%
S&P UTILITIES INDEX 18.73% 12.62% 13.17%
RUSSELL 3000 36.25% 15.14% 15.05%
UTILITIES INDEX
LIPPER UTILITY FUNDS 22.52% 12.65% 12.94%
AVERAGE
CUMULATIVE TOTAL RETURNS
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10
JANUARY 31, 1998 YEAR YEARS YEARS
UTILITIES 29.16% 109.19% 283.12%
S&P UTILITIES INDEX 18.73% 81.14% 244.45%
RUSSELL 3000 36.25% 102.40% 306.32%
UTILITIES INDEX
LIPPER UTILITY FUNDS 22.52% 82.18% 240.33%
AVERAGE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
UTILITIES 14.77% 25.92% 1.85% 21.18% 10.90% 15.61% -5.29% 30.62% 11.44% 31.60%
S&P Utilities Index 18.11% 46.82% -2.64% 14.48% 8.11% 14.33% -7.84% 41.87% 2.93% 24.49%
Russell 3000
Utilities Index 20.54% 45.74% -8.28% 21.22% 12.20% 14.35% -8.12% 37.28% 2.70% 36.61%
Lipper Utility
Funds Average 15.28% 28.77% -1.37% 21.67% 9.07% 13.13% -8.99% 27.34% 9.87% 26.01%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
The following information supplements the information found in the
"Performance" section on page 8.
RUSSELL 3000 UTILITIES INDEX is comprised of over 200 utility
stocks that are included in the Russell 3000 Index.
The following information replaces similar information found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 10:
Peter Saperstone is manager of Utilities, which he has managed since
October 1998. He also manages other Fidelity funds. Mr. Saperstone
joined Fidelity in 1995 and has worked as an analyst and manager.
The following information replaces similar information found in the
"Investment Principles and Risks" section on page 11.
UTILITIES seeks high total return through a combination of
current income and capital appreciation. FMR normally invests at least
65% of the fund's total assets in all types of securities of utility
companies. FMR expects to focus on equity securities but may invest in
all types of securities in pursuit of its objective.
Utility companies may include companies that provide electricity,
natural gas, water, public communications services, or sanitary
services to the public. Although these companies traditionally pay
above average dividends, the fund intends to focus on those companies
whose securities have the potential to increase in value. The fund's
performance is closely tied to conditions affecting the utility
industry. The industry is sensitive to factors such as interest rates,
government regulations, the price and availability of fuel,
environmental protection or energy conservation regulations, the level
of demand for services, and the risks associated with constructing and
operating nuclear power facilities. These factors may change rapidly.
FMR emphasizes quality in selecting the fund's utility investments,
and looks for companies that have proven dividend records and sound
financial structures. The fund may also buy foreign securities of
non-utility companies.
The following information replaces similar information found in the
"Securities and Investment Practices" section on page 12.
RESTRICTIONS: With respect to 75% of its total assets, the
fund may not invest in more than 10% of the outstanding voting
securities of a single issuer. This limitation does not apply to
securities of other investment companies.
The fund may not invest in more than 5% of the outstanding voting
securities of more than one utility company.
The following information replaces similar information found in the
"Securities and Investment Practices" section on page 14.
RESTRICTIONS: With respect to 75%of its total assets, the
fund may not invest more than 5% in the securities of any one issuer.
This limitation does not apply to U.S. Government securities or to
securities of other investment companies.
The fund may not invest more than 25% of its total assets in any
one industry (other than utility companies). This limitation does not
apply to U.S. Government securities.
The following information replaces similar information found in the
"Fundamental Investment Policies and Restrictions" section on page
15.
With respect to 75% of its total assets, the 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 or to
securities of other investment companies.
The fund may not invest more than 25% of its total assets in any
one industry, except that the fund will invest more than 25% of total
assets in the securities of utility companies. This limitation does
not apply to U.S. Government securities.
T he following information replaces similar information found in the
"Breakdown of Expenses" section on page 16.
MANAGEMENT FEE
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives is
designed to be responsive to
changes in FMR's total assets
under management. Building
this variable into the fee
calculation assures
shareholders that they will pay
a lower rate as FMR's assets
under management increase.
Another variable, the
performance adjustment,
rewards FMR when the fund
outperforms the specified
securities index (an
established index of stock
market performance) and
reduces FMR's fee when the
fund underperforms these
indexes.
(checkmark)
The management fee is calculated and paid to FMR every month. The
amount of 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 the fund has performed relative to a specified securities
index.
MANAGEMENT = BASIC +/- PERFORMANCE
FEE FEE ADJUSTMENT
The following information replaces similar information found in the
"Breakdown of Expenses" section on page 16.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by
comparing the fund's performance over the most recent 36-month period
to a specified securities index.
Prior to December 1, 1998, the fund compared its performance to the
Standard & Poor's Utilities Index. Effective December 1, 1998,
following the approval of its shareholders, the fund changed its
comparative securities index to the Russell 3000 Utilities Index and
began to prospectively compare its performance to that index. Because
performance adjustments are based on a rolling 36 month measurement
period, the change to the new index will not be fully implemented
until the expiration of a corresponding 36 month transition period.
During the transition period, the fund's performance will be compared
to a blended index return that reflects the performance of the new
index for the portion of the 36 month performance measurement period
subsequent to November 30, 1998 and the performance of the old index
for the remainder of the period. At the conclusion of the transition
period, the performance of the Standard & Poor's Utilities Index will
be eliminated from the performance adjustment calculation, and the
calculation will include only the performance of the Russell 3000
Utilities Index.
The difference is translated into a dollar amount that is added to
or subtracted from the basic fee. The maximum annualized performance
adjustment rate is (plus/minus)0.15% of the fund's average net assets
over the performance period.
The total management fee for the fiscal year ended January 31, 1998
was 0.60% of the fund's average net assets.
SUPPLEMENT TO THE FIDELITY UTILITIES FUND
MARCH 30, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 2.
The fund may not:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer.
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry except that the
fund will invest more than 25% of its total assets in securities of
utility companies.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
(vii) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company managed by Fidelity Management & Research Company or an
affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER
THE HEADING "PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION ON
PAGE 14.
Utilities may also compare its performance to the Russell 3000
Utilities Index, an index comprised of over 200 utility stocks that
are included in the Russell 3000 Index. Industries included in the
index include telecommunications, cable television and radio,
electrical, gas distributors, and water.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 20.
The fund has entered into a management contract with FMR, pursuant
to which FMR furnishes investment advisory and other services.
THE FOLLOWING INFORMATION REPLACES ALL OF THE INFORMATION FOUND
UNDER THE HEADING "MANAGEMENT FEE" IN THE "MANAGEMENT CONTRACT"
SECTION BEGINNING ON PAGE 20.
MANAGEMENT FEE. For the services of FMR under the management
contract, the fund pays FMR a monthly management fee which has two
components: a basic fee, which is the sum of a group fee rate and an
individual fund fee rate, and a performance adjustment based on a
comparison of the fund's performance to a specified securities index.
The group fee rate is based on the monthly average net assets of
all of the registered investment companies with which FMR has
management contracts.
The following is the fee schedule for Utilities Fund.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
0 - $3 BILLION .5200% $ 0.5 BILLION .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
OVER 534 .2500
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $555 billion of group net assets - the approximate level for
January 1998 - was 0.2937%, which is the weighted average of the
respective fee rates for each level of group net assets up to $555
billion.
The fund's individual fund fee rate is 0.20%. Based on the average
group net assets of the funds advised by FMR for January 1998, the
fund's annual basic fee rate would be calculated as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE BASIC FEE RATE
UTILITIES 0.2937% + 0.20% = 0.4937%
</TABLE>
One-twelfth of this annual basic fee rate is applied to the fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. As a general matter, the
basic fee for Fidelity Utilities Fund is subject to upward or downward
adjustment, depending upon whether, and to what extent, the fund's
investment performance for the performance period exceeds, or is
exceeded by, the record of a specified securities index over the same
period. The performance period consists of the most recent month plus
the previous 35 months.
On November 18, 1998, shareholders approved an amendment to the
fund's management contract that changed the comparative securities
index used to calculate the performance adjustment from the Standard &
Poor's Utilities Index (Prior Index) to the Russell 3000 Utilities
Index (Current Index). The amendment became effective on December 1,
1998. Under the terms of the amended contract, the Current Index is
being implemented on a prospective basis. Because performance
adjustments are based on a rolling 36 month measurement period, the
Current Index will not be fully implemented until the expiration of a
transition period that commenced with the amendment's effectiveness.
During this transition period, the fund's performance will be compared
to a 36 month blended index return that reflects the performance of
the Current Index for the portion of the 36 month performance
measurement period occurring on and after December 1, 1998 and the
performance of the Prior Index for the remainder of the measurement
period. For example, the performance adjustment for December 1998
would be calculated by comparing the fund's performance to a blended
index return using the Prior Index's performance for the first 35
months of the measurement period and the Current Index's performance
for the 36th month of the measurement period. For the following 35
months, an additional month of the Current Index's performance and one
less month of the Prior Index's performance would be used in the
calculation. At the conclusion of the transition period, the
performance of the Prior Index would be eliminated from the
performance adjustment calculation, and the calculation would include
only the performance of the Current Index.
Each percentage point of difference, calculated to the nearest
0.01% (up to a maximum difference of (plus/minus)7.50) is multiplied
by a performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to the fund's average net
assets for the entire performance period, giving a dollar amount which
will be added to (or subtracted from) the basic fee.
The maximum annualized adjustment rate is (plus/minus)0.15% of the
fund's average net assets over the performance period.
The fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund's shares at the NAV as of the record date for
payment. The records of the Prior and Current Indexes are based on
change in value and each is adjusted for any cash distributions from
the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on the fund's
performance compared to the blended investment records of the Prior
and Current Indexes, the controlling factor is not whether the fund's
performance is up or down per se, but whether it is up or down more or
less than the blended records of the Indexes. Moreover, the
comparative investment performance of the fund is based solely on the
relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
For the fiscal years ended January 31 , 1998, 1997, and 1996,
the fund paid FMR management fees of $8,063,000, $7,137,000, and
$6,439,000, respectively. The amount of these management fees include
both the basic fee and the amount of the performance adjustment, if
any. For the fiscal years ended January 31 , 1998 and 1997, the
upward performance adjustments amounted to $1,432,000 and $502,000,
respectively. For the fiscal year ended January 31 , 1996, the
downward performance adjustment amounted to $333,000.
FMR may, from time to time, voluntarily reimburse all or a portion
of the fund's expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
During the reporting period, FMR voluntarily modified the
breakpoints in the group fee rate schedule on January 1, 1996 to
provide for lower management fee rates as FMR's assets under
management increase.
Expense reimbursements by FMR will increase the fund's total
returns and yield, and repayment of the reimbursement by the fund will
lower its total returns and yield.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUST" SECTION ON PAGE 25.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of
the type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the
trust. The Declaration of Trust provides that the trust shall not have
any claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. The Declaration
of Trust provides for indemnification out of each fund's property of
any shareholder held personally liable for the obligations of the
fund. The Declaration of Trust also provides that each fund shall,
upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances
in which a fund itself would be unable to meet its obligations. FMR
believes that, in view of the above, the risk of personal liability to
shareholders is remote.
The Declaration of Trust further provides that the Trustees, if
they have exercised reasonable care, will not be liable for any
neglect or wrongdoing, but nothing in the Declaration of Trust
protects Trustees against any liability to which they would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar value of net asset value you own. The shares have no preemptive
or conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a
fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees. The trust or any fund
may be terminated upon the sale of its assets to, or merger with,
another open-end management investment company or series thereof, or
upon liquidation and distribution of its assets. Generally, the merger
of a trust or a fund with another entity or the sale of substantially
all of the assets of a trust or a fund to another entity requires the
vote of a majority of the outstanding shares of a trust or a fund, as
determined by the current value of each shareholder's investment in
the fund or trust. The Trustees may, however, reorganize or terminate
the trust or any fund without prior shareholder approval. If not so
terminated, the trust and its funds will continue indefinitely. Each
fund may invest all of its assets in another investment company.
