SUPPLEMENT TO FIDELITY SMALL CAP STOCK FUND AND FIDELITY LARGE CAP
STOCK FUND
FUNDS OF FIDELITY COMMONWEALTH TRUST
FIDELITY MID-CAP STOCK FUND
A FUND OF FIDELITY DEVONSHIRE TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 19, 1998
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DESCRIPTION OF THE TRUSTS" SECTION ON PAGE 31.
AUDITOR. PricewaterhouseCoopers LLP, One Post Office Square,
Boston, Massachusetts serves as independent accountant for Fidelity
Mid-Cap Stock Fund. The auditor examines financial statements for the
fund and provides other audit, tax, and related services.
AUDITOR. PricewaterhouseCoopers LLP, One Post Office Square,
Boston, Massachusetts served as independent accountant for Fidelity
Large Cap Stock Fund and Fidelity Small Cap Stock Fund for the most
recent fiscal period. The auditor examined financial statements for
the funds and provided other audit, tax, and related services.
AUDITOR. Effective February 18, 1999, Deloitte & Touche LLP, 125
Summer Street, Boston, Massachusetts serves as independent accountant
for Fidelity Large Cap Stock Fund and Fidelity Small Cap Stock Fund
for the next fiscal period. The auditor examines financial statements
for the funds and provides other audit, tax, and related services.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee 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
</TABLE>
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended April 30 Performance Adjustment Management Fees 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
</TABLE>
* 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 TRUSTS" 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.
