SPARTAN(REGISTERED TRADEMARK)
MUNICIPAL INCOME
FUND
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 51 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 55 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE 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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
The technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. 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). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN (REGISTERED 0.99% -0.95% 27.45% 87.78%
TRADEMARK) MUNICIPAL INCOME
LB 3 Plus Year Municipal Bond 0.98% -1.32% 28.57% n/a
General Municipal Debt Funds 0.29% -3.29% 21.64% 82.96%
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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 Lehman Brothers 3 Plus Year Municipal Bond Index, a market
value-weighted index for investment-grade municipal bonds with
maturities of three years or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
general municipal debt funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Inc. The
past six months average represents a peer group of 279 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 MAY 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MUNICIPAL INCOME -0.95% 4.97% 6.50%
LB 3 Plus Year Municipal Bond -1.32% 5.15% n/a
General Municipal Debt Funds -3.29% 3.99% 6.22%
Average
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Spartan Municipal Income LB Municipal Bond
00037 LB015
1990/05/31 10000.00 10000.00
1990/06/30 10106.80 10087.90
1990/07/31 10263.26 10236.19
1990/08/31 10156.50 10087.56
1990/09/30 10233.12 10093.31
1990/10/31 10369.13 10276.41
1990/11/30 10665.57 10483.06
1990/12/31 10711.45 10528.67
1991/01/31 10850.96 10669.96
1991/02/28 10918.88 10762.79
1991/03/31 10954.01 10766.66
1991/04/30 11103.88 10909.86
1991/05/31 11201.68 11006.85
1991/06/30 11202.27 10995.95
1991/07/31 11365.01 11129.88
1991/08/31 11465.40 11276.46
1991/09/30 11557.04 11423.28
1991/10/31 11665.71 11526.09
1991/11/30 11691.17 11558.25
1991/12/31 11801.52 11806.29
1992/01/31 11922.66 11833.21
1992/02/29 11947.06 11836.99
1992/03/31 11958.77 11841.37
1992/04/30 12073.11 11946.76
1992/05/31 12188.99 12087.38
1992/06/30 12358.00 12290.20
1992/07/31 12675.06 12658.66
1992/08/31 12506.35 12535.24
1992/09/30 12539.93 12617.22
1992/10/31 12331.14 12493.19
1992/11/30 12651.14 12716.95
1992/12/31 12788.13 12846.79
1993/01/31 12967.10 12996.19
1993/02/28 13444.32 13466.27
1993/03/31 13346.93 13323.93
1993/04/30 13473.88 13458.37
1993/05/31 13552.09 13534.00
1993/06/30 13751.51 13759.89
1993/07/31 13756.29 13777.91
1993/08/31 14055.20 14064.77
1993/09/30 14258.47 14224.96
1993/10/31 14273.49 14252.42
1993/11/30 14158.60 14126.86
1993/12/31 14464.69 14425.07
1994/01/31 14623.78 14589.81
1994/02/28 14251.26 14211.93
1994/03/31 13591.87 13633.22
1994/04/30 13662.48 13748.83
1994/05/31 13747.63 13868.03
1994/06/30 13669.83 13783.30
1994/07/31 13927.80 14035.95
1994/08/31 13978.40 14084.51
1994/09/30 13770.73 13877.75
1994/10/31 13483.09 13631.28
1994/11/30 13062.42 13384.83
1994/12/31 13387.18 13679.43
1995/01/31 13843.54 14070.39
1995/02/28 14244.18 14479.55
1995/03/31 14281.50 14645.92
1995/04/30 14288.65 14663.21
1995/05/31 14734.30 15131.11
1995/06/30 14507.54 14999.47
1995/07/31 14612.55 15141.66
1995/08/31 14791.49 15333.66
1995/09/30 14905.62 15430.72
1995/10/31 15119.97 15655.08
1995/11/30 15406.51 15914.80
1995/12/31 15553.10 16067.74
1996/01/31 15681.90 16189.06
1996/02/29 15616.85 16079.78
1996/03/31 15416.80 15874.28
1996/04/30 15354.06 15829.36
1996/05/31 15358.12 15823.02
1996/06/30 15539.79 15995.34
1996/07/31 15686.10 16140.89
1996/08/31 15690.08 16137.02
1996/09/30 15874.18 16362.94
1996/10/31 16061.28 16548.00
1996/11/30 16390.65 16850.83
1996/12/31 16322.14 16780.06
1997/01/31 16338.05 16811.77
1997/02/28 16479.65 16966.10
1997/03/31 16266.17 16739.95
1997/04/30 16400.88 16880.06
1997/05/31 16632.95 17133.94
1997/06/30 16836.72 17316.41
1997/07/31 17315.83 17796.08
1997/08/31 17139.82 17629.33
1997/09/30 17345.72 17838.59
1997/10/31 17444.66 17953.29
1997/11/30 17541.09 18058.86
1997/12/31 17827.96 18322.33
1998/01/31 18027.25 18511.42
1998/02/28 18007.50 18516.97
1998/03/31 18009.65 18533.27
1998/04/30 17909.72 18449.68
1998/05/31 18183.57 18741.74
1998/06/30 18254.46 18815.58
1998/07/31 18298.90 18862.81
1998/08/31 18575.19 19154.24
1998/09/30 18821.58 19392.90
1998/10/31 18807.80 19392.52
1998/11/30 18864.45 19460.58
1998/12/31 18905.04 19509.62
1999/01/31 19127.83 19741.59
1999/02/28 19003.77 19655.32
1999/03/31 19035.63 19682.64
1999/04/30 19078.50 19731.65
1999/05/31 18959.14 19617.41
1999/06/30 18656.15 19334.92
1999/07/31 18732.37 19405.30
1999/08/31 18596.59 19250.05
1999/09/30 18593.94 19257.95
1999/10/31 18411.06 19049.19
1999/11/30 18593.53 19251.87
1999/12/31 18435.67 19108.45
2000/01/31 18332.05 19025.33
2000/02/29 18580.09 19246.02
2000/03/31 19022.15 19666.74
2000/04/30 18898.97 19550.51
2000/05/31 18778.41 19448.84
IMATRL PRASUN SHR__CHT 20000531 20000619 092719 R00000000000123
$10,000 OVER 10 YEARS: Let's say, hypothetically, that $10,000 was
invested in Spartan Municipal Income Fund on May 31, 1990. As the
chart shows, by May 31, 2000, the value of the investment would have
grown to $18,778 - an 87.78% increase on the initial investment. For
comparison, look at how the Lehman Brothers Municipal Bond Index did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $19,449 - a 94.49%
increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the share
price, return and yield of a
fund that invests in bonds 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.
<TABLE>
<CAPTION>
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TOTAL RETURN COMPONENTS
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
2000 1999 1998 1997 1996 1995
Dividend returns 2.60% 4.58% 5.00% 5.32% 5.30% 6.54%
Capital returns -1.61% -6.02% 2.54% 1.70% 1.09% 11.41%
Total returns 0.99% -1.44% 7.54% 7.02% 6.39% 17.95%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains, if
any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED MAY 31, 2000 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 5.34(cents) 31.21(cents) 60.90(cents)
Annualized dividend rate 5.32% 5.22% 5.04%
30-day annualized yield 5.42% - -
30-day annualized 8.47% - -
tax-equivalent yield
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$11.82 over the past one month, $11.93 over the past six months and
$12.08 over the past one year, you can compare the fund's income over
these three periods. The 30-day annualized YIELD is a standard formula
for all bond funds based on the yields of the bonds in the fund,
averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. The tax equivalent yield shows what you would have to earn on a
taxable investment to equal the fund's tax-free yield, if you're in
the 36% federal tax bracket, but does not reflect payment of the
federal alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
The municipal bond market
experienced its share of ups and
downs during the six months that
ended May 31, 2000. The period
began on a down note, as supply
exceeded demand, and muni yields
began to rise in the face of
inflationary fears. In February and
March, however, despite further
interest-rate hikes by the Federal
Reserve Board, municipal bonds
rebounded when their yields
exceeded 6% and retail investors
jumped at the chance to buy munis
at their highest yields in about five
years. Unfortunately, munis took a
turn for the worse in April as
economic indicators suggested an
increase in inflation, which
prompted the Fed to make an
aggressive 0.50% rate hike at its
May Open Market Committee
meeting. But by the end of May, the
forecast for munis was bright. Retail
demand remained strong, issuance
for the first quarter of 2000 compared
to the first quarter of 1999 was down
33%, equity markets were struggling
and, perhaps most importantly, new
figures showed the Fed's series of
rate hikes were indeed beginning to
slow the U.S. economy. For the
overall six-month period, the Lehman
Brothers Municipal Bond Index - an
index of over 35,000
investment-grade, fixed-rate,
tax-exempt bonds - gained 1.02%,
just slightly below the overall
taxable-bond market return of
1.38%, as measured by the Lehman
Brothers Aggregate Bond Index.
(photograph of George Fischer)
An interview with George Fischer, Portfolio Manager of Spartan
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended May 31, 2000, the fund had a
total return of 0.99%. To get a sense of how the fund did relative to
its competitors, the general municipal debt funds average returned
0.29% for the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers 3 Plus Year Municipal Bond Index,
which tracks the types of securities in which the fund invests,
returned 0.98%. For the 12-month period that ended May 31, 2000, the
fund had a total return of -0.95%. In comparison, the general
municipal debt funds average returned -3.29% and the Lehman Brothers
index returned -1.32% for the same 12-month period.
Q. WHAT ACCOUNTED FOR THE FUND'S MODEST POSITIVE TOTAL RETURN DURING
THE PAST SIX MONTHS?
A. Persistent inflation worries and a strong economy prompted the
Federal Reserve Board to raise interest rates to curb potential
inflationary pressures. In response to higher short-term interest
rates, municipal bond yields rose and their prices - which move in the
opposite direction of their yields - generally declined. The fund's
total return was the combination of those price declines plus the
income generated by its holdings. In the case of the fund, bond price
declines were more than offset by the income generated, resulting in a
modestly positive total return for the six-month period.
Q. WHAT HELPED THE FUND PERFORM BETTER THAN ITS PEERS AND ITS
BENCHMARK FOR THE SIX-MONTH PERIOD?
A. The fund's stake in premium coupon bonds - those that pay interest
rates above prevailing rates - was one factor that helped. Premium
coupon bonds generally outpaced discount coupon and par coupon bonds,
which offer interest rates below and at prevailing market rates,
respectively.
Q. IN TERMS OF CREDIT QUALITY, WHAT WAS YOUR APPROACH?
A. I focused on higher-quality investment-grade bonds, those rated A,
Aa or Aaa by Moody's Investors Service. They made up 83.9% of the
fund's investments at the end of the period. The strength of the
economy helped solidify or boost the credit quality of most
investment-grade municipal issuers. That's because the demand for
social services declined and tax collections and other revenues
generally were on the rise. In contrast, lower-rated bonds
increasingly fell out of favor and underperformed their higher-quality
counterparts as a result.
Q. SPEAKING OF CREDIT QUALITY, MORE THAN 60% OF THE FUND'S NET ASSETS
WERE INVESTED IN INSURED BONDS. AREN'T THEY IMMUNE TO PRICE LOSSES?
A. No, and it's important for shareholders to realize that all
municipal bonds - including the insured variety - rise and fall with
interest-rate moves, supply and demand, and other factors. While
municipal bond insurance does not prevent price declines, it does mean
timely bond principal and interest payments are guaranteed by a
municipal bond insurer.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Lower reimbursements from HMOs and the federal government, combined
with increased pressure to cut costs, caused hospital bonds to
languish during much of the past six months. Despite their short-term
struggles, I held onto some bonds issued by select hospitals that were
in good financial shape and were fundamentally sound.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?
A. At the end of the period, it appeared that bond prices were already
factoring in another interest-rate hike or two. This built-in "risk
premium" may provide bonds some cushion against rising interest rates.
Whether the market is correct in its view remains to be seen. As for
the fund, I'll continue to approach the market fairly cautiously in
terms of credit quality. The economy has been good for so long that
it's easy to get lulled into complacency. We'll remain vigilant,
looking for potential problems that could occur if the economy slows.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks a high level of
income free from federal
income tax
FUND NUMBER: 037
TRADING SYMBOL: FHIGX
START DATE: December 1, 1977
SIZE: as of May 31, 2000,
more than $4.0 billion
MANAGER: George Fischer,
since 1998; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
GEORGE FISCHER ON CHOOSING
INVESTMENTS FOR THE FUND:
"When selecting individual bonds
for inclusion in the fund, credit
research is always the starting
point. Using a very rigorous
research process, and with the
help of Fidelity's credit research
team, I look for investment-grade
bonds from issuers that have
exhibited fiscal prudence and are
well-managed. After completing
careful credit research, I then
consider structural characteristics,
such as maturity, call features,
coupon and others. Because so
much of the municipal market is
insured, it's often challenging to
add value through credit research.
So I look for opportunities to take
advantage of pricing anomalies
that creep up due to a fund's
structural characteristics."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STATES AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
New York 15.5 16.2
Texas 9.6 9.8
Massachusetts 9.4 7.9
Illinois 7.4 7.1
Washington 4.9 5.4
TOP FIVE SECTORS AS OF MAY
31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Obligations 22.8 26.8
Electric Utilities 15.6 13.7
Health Care 11.7 10.4
Transportation 10.6 10.9
Water & Sewer 10.5 9.6
AVERAGE YEARS TO MATURITY AS
OF MAY 31, 2000
6 MONTHS AGO
Years 16.1 14.2
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME REMAINING UNTIL
PRINCIPAL PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS,
WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF MAY 31, 2000
6 MONTHS AGO
Years 7.3 7.2
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
QUALITY DIVERSIFICATION
AS OF MAY 31, 2000 AS OF NOVEMBER 30, 1999
Aaa 59.8% Aaa 57.3%
Aa,A 27.1% Aa,A 30.2%
Baa 9.1% Baa 8.8%
Ba and Below 1.1% Ba and Below 1.1%
Not Rated 1.6% Not Rated 1.7%
Short-Term Investments 1.3% Short-Term Investments 0.9%
Row: 1, Col: 1, Value: 59.8 Row: 1, Col: 1, Value: 57.3
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 27.1 Row: 1, Col: 3, Value: 30.2
Row: 1, Col: 4, Value: 9.1 Row: 1, Col: 4, Value: 8.800000000000001
Row: 1, Col: 5, Value: 1.1 Row: 1, Col: 5, Value: 1.1
Row: 1, Col: 6, Value: 1.6 Row: 1, Col: 6, Value: 1.7
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 1.3 Row: 1, Col: 8, Value: 0.9
</TABLE>
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 97.5%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
ALABAMA - 0.3%
Cullman Med. Park South Med. Baa2 $ 4,000 $ 3,513
Clinic Board Rev. Rfdg.
(Cullman Reg'l. Med. Ctr.
Proj.) Series A, 6.5% 2/15/23
Huntsville Gen. Oblig. Rfdg. Aa2 2,200 2,260
Series D, 6% 8/1/08
Mobile Wtr. & Swr. A 5,100 5,283
Commissioners Wtr. & Swr.
Rev. Rfdg. 6.5% 1/1/09
11,056
ALASKA - 1.6%
Alaska Student Ln. Corp.
Student Ln. Rev.:
(State Assisted Proj.) Series Aaa 2,500 2,528
A, 6% 7/1/04 (AMBAC Insured)
(e)
Series A:
5.15% 7/1/05 (AMBAC Insured) Aaa 1,500 1,482
(e)
5.55% 7/1/03 (AMBAC Insured) Aaa 1,300 1,309
(e)
5.65% 7/1/04 (AMBAC Insured) Aaa 1,300 1,312
(e)
5.9% 7/1/03 (AMBAC Insured) Aaa 2,070 2,093
(e)
North Slope Borough (Cap.
Appreciation):
Series A:
0% 6/30/01 (MBIA Insured) Aaa 5,000 4,748
0% 6/30/01 (MBIA Insured) Aaa 1,400 1,328
0% 6/30/03 (MBIA Insured) Aaa 8,500 7,233
Series B:
0% 1/1/03 (MBIA Insured) Aaa 6,000 5,241
0% 6/30/05 (FSA Insured) Aaa 4,500 3,421
Valdez Marine Term. Rev. Rfdg.:
(BP Pipeline, Inc. Proj.) Aa1 28,205 25,022
Series B, 5.5% 10/1/28
(Mobil Oil Co./Alaska Aaa 7,000 6,511
Pipeline Proj.) 5.75%
11/1/28
62,228
ARIZONA - 1.3%
Arizona Health Facilities A2 10,000 9,523
Auth. Hosp. Sys. Rev.
(Phoenix Children's Hosp.
Proj.) Series A, 6.25%
11/15/29
Arizona Student Ln. Aquistion Aaa 2,000 1,930
Auth. Student Ln. Rev. Rfdg.
Sr. Series A1, 5.9% 5/1/24
(e)
Chandler Gen. Oblig. Rfdg.
(Cap. Appreciation):
0% 7/1/05 (FGIC Insured) Aaa 5,700 4,358
0% 7/1/08 (FGIC Insured) Aaa 1,700 1,097
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
ARIZONA - CONTINUED
Maricopa County Cmnty. Aa1 $ 17,000 $ 16,795
College District Series B,
5.25% 7/1/10
Maricopa County Hosp. Rev.
Rfdg. (Sun Health Corp.
Proj.):
5.4% 4/1/05 Baa1 2,935 2,832
5.65% 4/1/06 Baa1 3,625 3,520
Maricopa County Ind. Dev. Baa1 3,345 3,168
Auth. Health Facilities Rev.
Rfdg. (Catholic Health Care
West Proj.) Series A, 4%
7/1/02
Maricopa County Ind. Dev. Aaa 2,000 2,259
Auth. Hosp. Facilities Rev.
Rfdg. (Samaritan Health
Svcs. Proj.) Series A, 7%
12/1/16 (MBIA Insured)
(Escrowed to Maturity) (f)
Maricopa County School Aaa 2,660 2,034
District #1 Rfdg. (Cap.
Appreciation) (Phoenix
Elementary Proj.) Second
Series, 0% 7/1/05 (MBIA
Insured)
Maricopa County Unified Aaa 3,050 2,084
School District #69 Rfdg.
(Cap. Appreciation)
(Paradise Valley Proj.)
Second Series, 0% 7/1/07
(AMBAC Insured)
Pima County Unified School Aaa 2,000 2,207
District #1 Tucson Series
1989 G, 8% 7/1/04 (MBIA
Insured)
51,807
ARKANSAS - 0.4%
Arkansas Dev. Fin. Auth. Rev. A 4,500 4,654
(Cap. Asset Proj.) Series B,
7.1% 3/1/08
Arkansas Gen. Oblig. (Cap.
Appreciation) (College
Savings Prog.):
Series A:
0% 6/1/03 Aa2 1,280 1,094
0% 6/1/04 Aa2 1,110 898
Series C, 0% 6/1/05 Aa2 2,130 1,628
Little Rock Arpt. Passenger Aaa 900 895
Facilities Charge Rev. 5.65%
5/1/16 (AMBAC Insured) (e)
North Little Rock Elec. Rev. Aaa 3,840 4,114
Rfdg. Series A, 6.5% 7/1/10
(MBIA Insured)
Rogers Sales & Use Tax Rev. A1 1,170 1,162
5% 11/1/15
14,445
CALIFORNIA - 3.8%
California Dept. of Wtr. Aa2 4,000 3,495
Resources Central Valley
Proj. Rev. (Wtr. Sys. Proj.)
Series O, 5% 12/1/22
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CALIFORNIA - CONTINUED
California Edl. Facilities
Auth. Rev.:
(Stanford Univ. Proj.) Series Aaa $ 10,525 $ 9,385
N, 5.2% 12/1/27
Rfdg.:
(Stanford Univ. Proj.) Series Aaa 9,000 7,850
O, 5.125% 1/1/31
(Univ. of Southern California Aa2 4,410 3,857
Proj.) Series C, 5.125%
10/1/28
California Gen. Oblig.:
5.25% 10/1/17 Aa3 1,500 1,424
5.75% 12/1/24 Aa3 4,000 3,908
California Hsg. Fin. Agcy.
Rev.:
(Cap. Appreciation) (Home Aa2 187 56
Mtg. Prog.) Series 1983 A,
0% 2/1/15
(Home Mtg. Prog.):
Series B, 5.2% 8/1/26 (MBIA Aaa 2,955 2,944
Insured) (e)
Series G:
5.9% 2/1/09 (MBIA Insured) (e) Aaa 1,000 1,016
5.9% 8/1/09 (MBIA Insured) (e) Aaa 2,000 2,032
Series R, 6.15% 8/1/27 (MBIA Aaa 4,500 4,471
Insured) (e)
Rfdg. (Home Mtg. Prog.) Aaa 1,660 1,652
Series A, 5.3% 8/1/14 (MBIA
Insured)
California Poll. Cont. Fing. Ba1 5,235 5,251
Auth. Resource Recovery Rev.
(Waste Mgmt., Inc. Proj.)
Series A, 7.15% 2/1/11 (e)
California Pub. Works Board
Lease Rev.:
(Dept. of Corrections, A1 1,500 1,410
Susanville State Prison
Proj.) Series D, 5.375%
6/1/18
(Various California State A1 7,500 7,321
Univ. Projs.) Series A,
5.25% 12/1/13
California Statewide Cmnty. Aaa 3,695 3,216
Dev. Corp. Ctfs. of Prtn.
(J. Paul Getty Trust Co.
Proj.) 5% 10/1/23
California Univ. Rev. (Hsg. Aaa 9,775 9,633
Sys. Proj.) Series 1999 AY,
5.875% 11/1/30 (FGIC Insured)
Compton Cmnty. Redev. Agcy. Aaa 4,000 4,313
Rfdg. (Tax
Allocation-Compton Redev.
Proj.) Series A, 6.5% 8/1/13
(FSA Insured)
Foothill/Eastern Trans. Aaa 8,000 6,578
Corridor Agcy. Toll Road
Rev. (Cap. Appreciation) Sr.
Lien Series A, 0% 1/1/08
(Escrowed to Maturity) (b)(f)
Long Beach Hbr. Rev. 5.125% Aa3 5,000 4,486
5/15/18 (e)
Los Angeles Dept. Wtr. & Pwr. Aaa 23,000 23,119
Wtrwks. Rev. 6.1% 10/15/39
(FGIC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CALIFORNIA - CONTINUED
M-S-R Pub. Pwr. Agcy. San Aaa $ 1,685 $ 1,754
Juan Proj. Rev. Series E,
6.5% 7/1/05 (MBIA Insured)
Metro. Wtr. District Southern Aaa 10,000 8,522
California Wtrwks. Rev.
Series A, 5% 7/1/30 (MBIA
Insured)
Modesto Irrigation District Aaa 4,390 5,456
Elec. Rev. Series A, 9.625%
1/1/11 (Escrowed to
Maturity) (f)
Placer County Wtr. Agcy. Rev.
(Middle Fork Proj.) Series A:
3.75% 7/1/12 A+ 7,820 6,793
3.75% 1/1/13 A+ 1,500 1,238
Sacramento Cogeneration Auth. BBB- 700 721
Cogeneration Proj. Rev.
(Procter & Gamble Proj.)
6.375% 7/1/10
Sacramento Pwr. Auth.
Cogeneration Proj. Rev.:
6.5% 7/1/07 BBB- 1,000 1,060
6.5% 7/1/09 BBB- 2,200 2,298
San Francisco City & County
Arpt. Commission Int'l.
Arpt. Rev. Second Series
Issue 10A:
5.5% 5/1/13 (MBIA Insured) (e) Aaa 5,955 5,915
5.55% 5/1/14 (MBIA Insured) Aaa 5,875 5,806
(e)
Santa Rosa Wastewtr. Rev. Aaa 3,900 3,473
Rfdg. (SubReg'l. Wastewtr.
Proj.) Series A, 4.75%
9/1/16 (FGIC Insured)
150,453
COLORADO - 2.9%
Adams County School District Aaa 1,000 1,025
#12 Rfdg. 6.2% 12/15/10
(FGIC Insured)
Arapaho County Cap. Impt.
Trust Fund Hwy. Rev. (Cap.
Appreciation) Series E 470:
0% 8/31/10 (Pre-Refunded to Aaa 15,000 8,058
8/31/05 @ 71.4501) (f)
0% 8/31/15 (Pre-Refunded to Aaa 16,000 5,848
8/31/05 @ 48.6181) (f)
Arapaho County School Aa2 3,500 3,338
District #5 (Cherry Creek
Proj.) 5.5% 12/15/19
Colorado Health Facilities
Auth. Rev. Rfdg. (Rocky
Mountain Adventist Proj.):
6.25% 2/1/04 Ba1 1,700 1,649
6.625% 2/1/13 Ba1 28,100 26,623
6.625% 2/1/22 Ba1 11,600 10,336
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
COLORADO - CONTINUED
Colorado Springs Arpt. Rev.
(Cap. Appreciation) Series C:
0% 1/1/02 (MBIA Insured) Aaa $ 1,550 $ 1,430
0% 1/1/04 (MBIA Insured) Aaa 1,530 1,263
0% 1/1/06 (MBIA Insured) Aaa 250 184
0% 1/1/09 (MBIA Insured) Aaa 1,655 1,023
0% 1/1/10 (MBIA Insured) Aaa 1,500 872
Colorado Univ. Rev. A2 5,725 5,983
(Biomedical Research Bldg.
Proj.) 7% 6/1/09
Denver City & County Arpt.
Rev.:
(Cap. Appreciation):
Series A:
0% 11/15/02 (MBIA Insured) (e) Aaa 4,900 4,311
0% 11/15/05 (MBIA Insured) (e) Aaa 4,480 3,314
Series D:
0% 11/15/03 (MBIA Insured) (e) Aaa 5,000 4,153
0% 11/15/04 (MBIA Insured) (e) Aaa 7,500 5,879
0% 11/15/05 (MBIA Insured) (e) Aaa 3,000 2,220
(Unrefunded Balance Proj.) A2 1,870 1,923
Series B, 7.25% 11/15/23 (e)
Series C:
6.5% 11/15/06 (e) A2 4,075 4,186
6.55% 11/15/02 (e) A2 4,000 4,075
Series D:
7% 11/15/25 (e) A2 6,980 7,006
7.4% 11/15/01 (e) A2 3,000 3,071
El Paso County School Aaa 2,600 1,662
District #20 Rfdg. (Cap.
Appreciation) Series A, 0%
6/15/08 (AMBAC Insured)
Highlands Ranch Metro.
District #2 Rfdg.:
6.5% 6/15/10 (FSA Insured) Aaa 1,000 1,086
6.5% 6/15/12 (FSA Insured) Aaa 1,000 1,092
Jefferson County Ctfs. of Aaa 3,000 3,147
Prtn. Rfdg. 6.65% 12/1/08
(MBIA Insured)
114,757
CONNECTICUT - 0.1%
Connecticut Health & Edl.
Facilities Auth. Rev.:
(New Britain Memorial Hosp. AAA 3,600 3,773
Proj.) Series A, 7.5%
7/1/06 (Pre-Refunded to
7/1/02 @ 102) (f)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONNECTICUT - CONTINUED
Connecticut Health & Edl.
Facilities Auth. Rev.: -
continued
Rfdg. (Quinnipiac College BBB- $ 550 $ 533
Proj.) Series D, 6% 7/1/13
Eastern Connecticut Resources BBB 900 852
Recovery Auth. Solid Waste
Rev. (Wheelabrator Lisbon
Proj.) Series A, 5% 1/1/04
(e)
5,158
DISTRICT OF COLUMBIA - 2.6%
District of Columbia Gen.
Oblig.:
Rfdg.:
Series A:
5.625% 6/1/02 (MBIA Insured) Aaa 760 767
5.875% 6/1/05 (AMBAC Insured) Aaa 1,770 1,814
5.875% 6/1/05 (MBIA Insured) Aaa 1,530 1,568
Series A3:
5.3% 6/1/04 (AMBAC Insured) Aaa 1,605 1,607
5.3% 6/1/04 (AMBAC Insured) Aaa 1,505 1,514
(Escrowed to Maturity) (f)
5.4% 6/1/05 (AMBAC Insured) Aaa 1,510 1,517
5.4% 6/1/05 (AMBAC Insured) Aaa 1,400 1,414
(Escrowed to Maturity) (f)
Series B, 5.25% 6/1/07 (MBIA Aaa 12,000 11,902
Insured)
Series C, 5.25% 12/1/03 (FGIC Aaa 1,965 1,975
Insured) (Escrowed to
Maturity) (f)
Series A:
5% 6/1/06 (MBIA Insured) Aaa 4,855 4,738
5.25% 6/1/27 (MBIA Insured) Aaa 12,000 10,329
Series B, 5% 6/1/06 (MBIA Aaa 4,015 3,918
Insured)
Series E:
5% 6/1/04 (FGIC Insured) Aaa 965 956
5% 6/1/04 (FGIC Insured) Aaa 35 36
(Pre-Refunded to 6/1/03 @
102) (f)
District of Columbia Hosp. - 11,455 11,780
Rev. (Hosp. for Sick
Children Proj.) Series A,
8.875% 1/1/21
District of Columbia Redev.
Land Agcy. Washington D.C.
Sports Arena Spl. Tax Rev.:
5.4% 11/1/00 Baa 1,000 1,001
5.625% 11/1/10 Baa 7,165 7,197
District of Columbia Rev.:
(George Washington Univ. Aaa 9,000 8,695
Proj.) Series A, 5.75%
9/15/20 (MBIA Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
DISTRICT OF COLUMBIA -
CONTINUED
District of Columbia Rev.: -
continued
(Nat'l. Academy of Science Aaa $ 10,000 $ 8,310
Proj.) Series A, 5% 1/1/28
(AMBAC Insured)
Rfdg.:
(American Assoc. of Aaa 9,250 7,919
Advancement in Science
Proj.) 5.125% 1/1/27 (AMBAC
Insured)
(Georgetown Univ. Proj.)
Series A:
5.95% 4/1/14 (MBIA Insured) Aaa 2,000 2,035
6% 4/1/18 (MBIA Insured) Aaa 13,835 13,888
104,880
FLORIDA - 2.2%
Broward County Resource A3 13,610 14,036
Recovery Rev. (SES Broward
Co. LP South Proj.) 7.95%
12/1/08
Dade County Aviation Rev. Aaa 3,750 3,679
(Miami Int'l. Arpt. Proj.)
Series B, 6% 10/1/24 (MBIA
Insured) (e)
Florida Muni. Pwr. Agcy. Rev. Aaa 3,000 2,563
Rfdg. (Stanton II Proj.)
4.5% 10/1/16 (AMBAC Insured)
Jacksonville Elec. Auth. Rev.:
(First Installment Proj.) 6% Aaa 2,130 2,131
7/1/01 (Escrowed to
Maturity) (f)
(Third Installment Proj.) Aaa 3,000 3,208
Series 73, 6.8% 7/1/12
(Escrowed to Maturity) (f)
Rfdg. (Saint Johns River Aa2 4,535 4,350
Proj.) Series 13 Issue 2,
5.375% 10/1/16
Jacksonville Health Baa1 2,000 1,980
Facilities Auth. Ind. Dev.
Rev. Rfdg. (Cypress
Village/Nat'l. Benevolent
Assoc. Proj.) 7% 12/1/22
Jacksonville Port Auth. Rev.
Rfdg.:
5.5% 11/1/06 (MBIA Insured) Aaa 8,630 8,693
(e)
5.75% 11/1/09 (MBIA Insured) Aaa 1,000 1,016
(e)
Miami Beach Health Facilities BBB 6,640 4,864
Auth. Hosp. Rev. (Mount
Sinai Med. Ctr. of Florida
Proj.) 5.375% 11/15/28
Miami-Dade County Edl. Aaa 5,000 4,783
Facilities Auth. Rev. Series
A, 5.75% 4/1/29 (AMBAC
Insured)
Orlando Utils. Commission Aa2 5,465 4,934
Wtr. & Elec. Rev. Series B,
5.25% 10/1/23
Pasco County Solid Waste
Disp. & Resource Recovery
Sys. Rev. Rfdg.:
6% 4/1/08 (AMBAC Insured) (e) Aaa 5,000 5,154
6% 4/1/09 (AMBAC Insured) (e) Aaa 8,090 8,336
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FLORIDA - CONTINUED
Pinellas County Resource Aaa $ 4,010 $ 4,001
Recovery Rev. 5.25% 10/1/05
(MBIA Insured) (e)
Tampa Bay Wtr. Util. Sys. Aaa 6,000 6,016
Rev. 6% 10/1/24 (FGIC
Insured)
Tampa Wtr. & Swr. Rev. 5.5% Aa3 10,000 9,262
10/1/29
89,006
GEORGIA - 1.3%
Atlanta & Fulton County Aaa 6,000 5,543
Resource Auth. (Downtown
Area Pub. Impt. Proj.)
5.375% 12/1/21 (MBIA Insured)
Atlanta Downtown Dev. Auth.
Rev. Rfdg. (Underground
Atlanta Proj.):
6.25% 10/1/12 Aa3 3,750 3,877
6.25% 10/1/16 Aa3 3,000 3,053
Atlanta Wtr. & Swr. Rev.:
Series A, 5.375% 1/1/20 (FGIC Aaa 3,250 3,297
Insured) (Pre-Refunded to
1/1/07 @ 101) (f)
5.25% 1/1/27 (FGIC Insured) Aaa 24,050 24,234
(Pre-Refunded to 1/1/07 @
101) (f)
Fulton County School District Aa2 3,500 3,776
Rfdg. 6.375% 5/1/14
Fulton County Wtr. & Swr. Aaa 140 148
Rev. Rfdg. 6.375% 1/1/14
(FGIC Insured)
Georgia Muni. Elec. Auth.
Pwr. Rev.:
Rfdg. Series Z, 5.5% 1/1/12 A 2,000 1,984
Series B, 6.2% 1/1/10 (AMBAC Aaa 5,000 5,282
Insured)
51,194
HAWAII - 0.6%
Hawaii Arpt. Sys. Rev. Second
Series:
7.5% 7/1/05 (FGIC Insured) (e) Aaa 1,000 1,022
7.5% 7/1/20 (FGIC Insured) (e) Aaa 1,500 1,533
Hawaii Gen. Oblig. Series CN, Aaa 6,300 6,098
5.25% 3/1/12 (FGIC Insured)
Hawaii Hsg. Fin. & Dev. Corp. Aaa 6,560 6,221
Series A, 4.9% 7/1/28 (e)
Honolulu City & County Gen.
Oblig. Rfdg. Series C:
5.125% 7/1/14 (FGIC Insured) Aaa 3,000 2,814
5.125% 7/1/15 (FGIC Insured) Aaa 5,000 4,590
22,278
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
IDAHO - 0.2%
Boise City Urban Renewal Aaa $ 6,950 $ 6,827
Agcy. Lease Rev. 5.9%
8/15/29 (AMBAC Insured)
Idaho Falls Gen. Oblig. Rfdg.:
0% 4/1/06 (FGIC Insured) Aaa 2,000 1,458
0% 4/1/07 (FGIC Insured) Aaa 2,500 1,720
10,005
ILLINOIS - 7.4%
Chicago Board of Ed. (Chicago
School Reform Proj.):
5.75% 12/1/20 (AMBAC Insured) Aaa 3,480 3,374
5.75% 12/1/27 (AMBAC Insured) Aaa 46,500 43,872
Chicago Gen. Oblig.:
(Neighborhoods Alive 21 Aaa 10,000 9,340
Proj.) Series A, 5.75%
1/1/40 (FGIC Insured)
Rfdg. Series A2, 6.25% 1/1/15 Aaa 4,885 5,182
(AMBAC Insured)
Series 1993, 5.25% 1/1/18 Aaa 7,200 6,631
(FGIC Insured)
Chicago Midway Arpt. Rev.:
Series A, 5.5% 1/1/29 (MBIA Aaa 24,775 22,496
Insured)
Series B:
5.25% 1/1/13 (MBIA Insured) Aaa 2,910 2,740
(e)
5.25% 1/1/14 (MBIA Insured) Aaa 3,060 2,856
(e)
6% 1/1/05 (MBIA Insured) (e) Aaa 1,360 1,394
6% 1/1/08 (MBIA Insured) (e) Aaa 2,170 2,228
6% 1/1/10 (MBIA Insured) (e) Aaa 2,435 2,489
6.125% 1/1/11 (MBIA Insured) Aaa 2,580 2,654
(e)
Chicago Motor Fuel Tax Rfdg. Aaa 4,600 4,518
Series A, 5.375% 1/1/14
(AMBAC Insured)
Chicago O'Hare Int'l. Arpt.
Rev.:
(Passenger Facility Charge Aaa 4,500 4,508
Proj.) Series A, 5.6% 1/1/10
(AMBAC Insured)
Rfdg. (Gen. Arpt. Proj.):
Second Lien Series A:
5.5% 1/1/16 (AMBAC Insured) Aaa 10,000 9,486
(e)
6.25% 1/1/09 (AMBAC Insured) Aaa 6,730 7,020
(e)
6.375% 1/1/12 (MBIA Insured) Aaa 4,000 4,186
6.375% 1/1/15 (MBIA Insured) Aaa 14,900 15,368
Chicago Residential Mtg. Rev. Aaa 3,420 1,790
Rfdg. (Cap. Appreciation)
Series B, 0% 10/1/09 (MBIA
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
ILLINOIS - CONTINUED
Chicago Sales Tax Rev. 5.375% Aaa $ 18,000 $ 15,882
1/1/30 (FGIC Insured)
Chicago Wastewtr. Aaa 4,500 4,408
Transmission Rev. Rfdg.
5.375% 1/1/13 (FGIC Insured)
Chicago Wtr. Rev. Rfdg. (Cap. Aaa 1,960 1,827
Appreciation) 0% 11/1/01
(FGIC Insured)
Cook & Will Counties Township Aaa 2,350 1,950
High School District #206
(Cap. Appreciation) Series
A, 0% 12/1/03 (AMBAC
Insured) (Escrowed to
Maturity) (f)
De Kalb Single Family Mtg. Aaa 695 709
Rev. Series A, 7.45%
12/1/09 (e)
Illinois Dedicated Tax Rev. Aaa 695 717
(Civic Ctr. Proj.) Series
A, 7% 12/15/13 (AMBAC
Insured) (Pre-Refunded to
12/15/00 @ 102) (f)
Illinois Dev. Fin. Auth. Aaa 7,000 7,408
Poll. Cont. Rev. Rfdg.
(Commonwealth Edison Co.
Proj.) Series D, 6.75%
3/1/15 (AMBAC Insured)
Illinois Health Facilities
Auth. Rev.:
(Franciscan Proj.) Series A, Aaa 15,200 9,681
0% 9/1/05 (MBIA Insured)
(Pre-Refunded to 9/1/00 @
64.513) (f)
(GlenOaks Med. Ctr. Proj.) Baa 3,105 3,225
Series D, 9.5% 11/15/15
(Escrowed to Maturity) (f)
(Memorial Hosp. Proj.) 7.125% - 4,000 4,227
5/1/10 (Pre-Refunded to
5/1/02 @ 102) (f)
(Methodist Health Svcs. Co. Aaa 7,000 7,266
Proj.) 6.903% 5/18/21 (AMBAC
Insured) (Pre-Refunded to
5/8/01 @ 102) (f)
(Swedish American Hosp. A- 7,000 6,916
Proj.) 6.875% 11/15/30
Rfdg.:
(Lutheran Gen. Health Care
Sys. Proj.) Series C:
6% 4/1/18 A1 3,000 2,879
7% 4/1/14 A1 1,500 1,605
(OSF Health Care Sys. Proj.) A2 7,000 6,698
6% 11/15/13
(Swedish American Hosp. Aaa 3,000 2,886
Proj.) 5.375% 11/15/13
(AMBAC Insured)
6.75% 2/15/15 A1 1,000 1,023
Illinois Reg'l. Trans. Auth.:
Series A, 8% 6/1/17 (AMBAC Aaa 4,500 5,566
Insured)
Series C, 7.75% 6/1/13 (FGIC Aaa 2,045 2,442
Insured)
Series D, 7.75% 6/1/04 (FGIC Aaa 1,115 1,214
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
ILLINOIS - CONTINUED
Lake County Forest
Preservation District (Cap.
Appreciation):
0% 12/1/07 Aa1 $ 10,440 $ 6,891
0% 12/1/08 Aa1 12,505 7,777
Metro. Pier & Exposition
Auth. Dedicated Tax Rev.:
(Cap. Appreciation):
(McCormick Place Expansion Aaa 250 226
Proj.) Series A, 0% 6/15/12
(FGIC Insured) (b)
Series A:
0% 6/15/09 (FGIC Insured) Aaa 14,850 8,930
0% 6/15/09 (FGIC Insured) Aaa 2,325 1,397
(Escrowed to Maturity) (f)
(McCormick Place Expansion
Proj.) Series A:
0% 6/15/10 (FGIC Insured) Aaa 17,000 9,607
5.25% 12/15/10 (AMBAC Insured) Aaa 14,450 14,135
Rfdg. (Cap. Appreciation)
(McCormick Place Expansion
Proj.) Series A:
0% 6/15/08 (MBIA Insured) Aaa 3,820 2,438
0% 6/15/08 (MBIA Insured) Aaa 3,335 2,127
(Escrowed to Maturity) (f)
Northern Illinois Univ. Revs. Aaa 1,000 1,016
(Auxiliary Facilities Sys.
Proj.) 6% 4/1/02 (FGIC
Insured)
295,205
INDIANA - 0.2%
Indiana Bond Bank Rev. (State AAA 2,000 2,146
Revolving Fund Prog.) Series
A, 7% 2/1/05
Indiana Health Facilities Aaa 2,500 2,805
Fing. Auth. Hosp. Rev.
Rfdg. (Columbus Reg'l. Hosp.
Proj.) 7% 8/15/15 (FSA
Insured)
Indianapolis Arpt. Auth. Rev. Aaa 1,000 982
Rfdg. Series A, 5.6% 7/1/15
(FGIC Insured)
Indianapolis Econ. Dev. Rev. Baa2 3,000 3,071
Rfdg. & Impt. (Nat'l.
Benevolent Assoc. Proj.)
7.625% 10/1/22
9,004
IOWA - 0.1%
Iowa Fin. Auth. Hosp.
Facilities Rev.:
6.625% 2/15/12 A1 1,000 1,020
6.75% 2/15/12 A1 1,000 1,028
6.75% 2/15/14 A1 1,000 1,024
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
IOWA - CONTINUED
Iowa Fin. Auth. Hosp.
Facilities Rev.: - continued
6.75% 2/15/15 A1 $ 1,000 $ 1,020
6.75% 2/15/17 A1 1,000 1,011
5,103
KANSAS - 0.5%
Johnson County Unified School
District #512 (Shawnee
Mission Proj.):
8% 10/1/03 Aa1 1,015 1,104
8% 10/1/04 Aa1 1,225 1,360
8% 10/1/05 Aa1 1,250 1,414
Kansas City Util. Sys. Rev.
(Cap. Appreciation):
0% 3/1/09 (AMBAC Insured) Aaa 3,975 2,434
(Escrowed to Maturity) (f)
0% 9/1/10 (AMBAC Insured) Aaa 2,865 1,619
0% 9/1/10 (AMBAC Insured) Aaa 3,825 2,143
(Escrowed to Maturity) (f)
Kansas Dev. Fin. Auth. Health Aa3 4,500 4,414
Facilities Rev. (Sister of
Charity Proj.) Series J,
6.25% 12/1/28
Wichita Hosp. Rev. Series III Aaa 6,000 6,214
A, 6.465% 10/20/17 (MBIA
Insured)
20,702
KENTUCKY - 2.1%
Jefferson County Cap. Projs. A1 5,250 2,756
Corp. Rev. Rfdg. (Cap.
Appreciation) (Lease Prog.)
Series A, 0% 8/15/11
Jefferson County Hosp. Rev.
(Alliant Health Sys. Proj.):
6.367% 10/9/08 (MBIA Insured) Aaa 1,800 1,872
6.367% 10/9/08 (MBIA Insured) Aaa 2,200 2,310
(Pre-Refunded to 10/29/02 @
102) (f)
Kenton County Arpt. Board
Arpt. Rev.:
(Delta Air Lines, Inc. Proj.) Baa3 5,100 5,202
Series A, 7.5% 2/1/20 (e)
Rfdg. (Cincinnati/Northern Aaa 1,480 1,499
Kentucky Int'l. Arpt.
Proj.) 5.65% 3/1/04 (MBIA
Insured) (e)
Louisville & Jefferson Swr. Aaa 60,115 57,296
Sys. Rev. Series A, 5.75%
5/15/33 (FGIC Insured)
Owensboro Elec. Lt. & Pwr.
Rev.:
Rfdg. Series B, 0% 1/1/08 Aaa 600 395
(AMBAC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
KENTUCKY - CONTINUED
Owensboro Elec. Lt. & Pwr.
Rev.: - continued
Series B:
0% 1/1/07 (AMBAC Insured) Aaa $ 10,000 $ 6,997
0% 1/1/09 (AMBAC Insured) Aaa 2,000 1,241
0% 1/1/10 (AMBAC Insured) Aaa 8,440 4,927
84,495
LOUISIANA - 0.4%
Louisiana Offshore Term. Baa1 1,205 1,237
Auth. Deep Wtr. Port Dev.
Series E, 7.6% 9/1/10
(Pre-Refunded to 9/1/00 @
102) (f)
Monroe-West Monroe Pub. Trust AA- 9,000 3,817
Fing. Auth. Mtg. Rev. Rfdg.
(Cap. Appreciation) Series
C, 0% 8/20/14
New Orleans Gen. Oblig. Rfdg.
(Cap. Appreciation):
0% 9/1/08 (AMBAC Insured) Aaa 10,000 6,342
0% 9/1/09 (AMBAC Insured) Aaa 3,000 1,794
0% 9/1/14 (AMBAC Insured) Aaa 5,000 2,169
15,359
MARYLAND - 0.5%
Howard County Mtg. Rev. Aaa 250 259
(Heartlands Elderly Apts.
Proj.) 8.875% 12/1/10 (MBIA
Insured)
Maryland Cmnty. Dev. Aa2 2,425 2,387
Administration Dept. Hsg. &
Cmnty. Dev. Rfdg.
(Residential Proj.) Series
B, 5.05% 9/1/19 (e)
Maryland Health & Higher Edl.
Facilities Auth. Rev.:
(Good Samaritan Hosp. Proj.):
5.75% 7/1/13 (AMBAC Insured) Aaa 995 998
(Escrowed to Maturity) (f)
5.75% 7/1/13 (Escrowed to A1 1,605 1,624
Maturity) (f)
(Univ. of Maryland Med. Sys. Baa1 10,415 10,269
Proj.) 6.75% 7/1/30
Rfdg. (John Hopkins Univ. Aa2 2,500 2,344
Proj.) 5.25% 7/1/17
Prince Georges County Solid Aaa 1,500 1,433
Waste Mgmt. Sys. Rev. Rfdg.
5.25% 6/15/13 (FSA Insured)
19,314
MASSACHUSETTS - 9.4%
Boston Metro. District Rfdg. Aaa 1,260 1,376
8% 12/1/03 (MBIA Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Bay Trans. Auth.:
(Gen. Trans. Sys. Proj.) Aa2 $ 15,000 $ 13,958
Series A, 5.375% 3/1/19
Rfdg. (Gen. Trans. Sys. Proj.):
Series A:
5.5% 3/1/12 Aa2 5,000 4,989
5.75% 3/1/26 (FGIC Insured) Aa2 17,795 16,989
6.25% 3/1/12 Aa2 2,000 2,128
Series B, 6.2% 3/1/16 Aa2 3,800 3,982
Series B, 5.25% 3/1/26 (FSA Aaa 14,750 13,026
Insured)
Massachusetts Ed. Ln. Auth.
Ed. Ln. Rev. Series B Issue
E:
5.75% 7/1/05 (AMBAC Insured) Aaa 2,230 2,252
(e)
5.85% 7/1/06 (AMBAC Insured) Aaa 2,655 2,689
(e)
5.95% 7/1/07 (AMBAC Insured) Aaa 2,875 2,920
(e)
6.05% 7/1/08 (AMBAC Insured) Aaa 2,970 3,017
(e)
6.15% 7/1/10 (AMBAC Insured) Aaa 1,190 1,207
(e)
6.25% 7/1/11 (AMBAC Insured) Aaa 715 727
(e)
6.3% 7/1/12 (AMBAC Insured) Aaa 725 738
(e)
Massachusetts Edl. Fing. AAA 6,535 5,843
Auth. Ed. Ln. Rev. Rfdg.
Series A Issue E, 4.9%
7/1/13 (AMBAC Insured) (e)
Massachusetts Gen. Oblig.:
(Consolidated Ln. Prog.):
Series A, 7.5% 6/1/04 Aa2 3,270 3,491
Series B, 4.875% 10/1/13 Aa2 2,500 2,302
Rfdg. (Cap. Appreciation) Aaa 5,000 4,475
Series B, 0% 8/1/02 (AMBAC
Insured)
Massachusetts Health & Edl.
Facilities Auth. Rev.:
(Blood Research Institute - 4,525 4,546
Proj.) Series A, 6.5% 2/1/22
(Harvard Univ. Issue Proj.) Aaa 11,500 11,531
Series W, 6% 7/1/35
(MIT Proj.) Series I2, 4.75% Aaa 6,000 4,934
1/1/28
(New England Med. Ctr. Hosp. Aaa 3,800 3,371
Proj.) Series G, 5.375%
7/1/24 (MBIA Insured)
(South Shore Hosp. Proj.) A2 11,930 10,361
Series F, 5.75% 7/1/29
(Univ. of Massachusetts Aaa 10,000 9,721
Proj.) Series A, 5.875%
10/1/29 (FGIC Insured)
Rfdg.:
(Baystate Med. Ctr. Proj.) Aaa 3,000 2,787
Series D, 5% 7/1/12 (FGIC
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Health & Edl.
Facilities Auth. Rev.: -
continued
Rfdg.: - continued
(Fairview Extended Care Aaa $ 4,800 $ 4,711
Proj.) Series B, 4.55%
1/1/21 (MBIA Insured)
(Massachusetts Gen. Hosp. Aaa 2,000 2,118
Proj.) Series F, 6.25%
7/1/12 (AMBAC Insured)
Massachusetts Hsg. Fin. Agcy.
Hsg. Rev. Rfdg. (Rental
Proj.) Series A:
6.6% 7/1/14 (AMBAC Insured) Aaa 2,190 2,247
(e)
6.65% 7/1/19 (AMBAC Insured) Aaa 1,760 1,814
(e)
Massachusetts Ind. Fin. Agcy. AAA 3,730 4,141
Ind. Dev. Rev. (Union
Mission Proj.) 9.55% 9/1/26
(Pre-Refunded to 9/1/00 @
110) (f)
Massachusetts Ind. Fin. Agcy.
Resource Recovery Rev. Rfdg.
(Ogden Haverhill Proj.)
Series 1992 A:
4.6% 12/1/02 BBB 5,430 5,302
4.7% 12/1/03 BBB 1,975 1,905
Massachusetts Ind. Fin. Agcy.
Rev. (Cap. Appreciation)
(Massachusetts Biomedical
Research Corp. Proj.) Series
A2:
0% 8/1/03 A1 29,600 25,011
0% 8/1/04 A1 5,000 3,989
0% 8/1/06 A1 30,800 21,924
0% 8/1/08 A+ 5,000 3,160
0% 8/1/09 - 21,800 12,888
0% 8/1/10 - 2,000 1,108
Massachusetts Muni. Wholesale
Elec. Co. Pwr. Supply Sys.
Rev.:
Rfdg.:
Series A, 5% 7/1/10 (AMBAC Aaa 4,610 4,363
Insured)
Series B, 5% 7/1/12 (MBIA Aaa 2,715 2,504
Insured)
Series C, 6.625% 7/1/06 Baa2 2,220 2,307
Series A, 6.75% 7/1/08 (MBIA Aaa 2,500 2,625
Insured)
Series B, 6.75% 7/1/08 (MBIA Aaa 5,995 6,295
Insured)
Series D, 6% 7/1/06 Baa2 1,300 1,323
Massachusetts Port Auth. Rev. Aa3 15,845 14,950
Series C, 5.75% 7/1/29
Massachusetts Tpk. Auth.
Metro. Hwy. Sys. Rev. Series
A:
5% 1/1/27 (MBIA Insured) Aaa 11,000 9,327
5% 1/1/37 (MBIA Insured) Aaa 15,000 12,426
5.125% 1/1/23 (MBIA Insured) Aaa 8,500 7,395
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Tpk. Auth. Aaa $ 28,330 $ 27,604
Western Tpk. Rev. Series A,
5.55% 1/1/17 (MBIA Insured)
Massachusetts Wtr. Poll. Aa1 90 85
Abatement Trust Wtr. Poll.
Abatement Rev. (MWRA Ln.
Prog.) Series A, 5.25%
8/1/13
Massachusetts Wtr. Resources Aaa 33,000 31,196
Auth. Rev. Rfdg. Series A,
5.75% 8/1/39 (FGIC Insured)
New England Ed. Ln. Marketing A3 18,500 18,630
Corp. Massachusetts Rfdg.
(Student Ln. Prog.) Series
A, 5.7% 7/1/05 (e)
New England Ed. Ln. Marketing
Corp. Massachusetts Student
Ln. Rev. Rfdg.:
Series B, 5.4% 6/1/00 Aa2 2,500 2,500
Series G:
5% 8/1/00 A3 2,500 2,501
5.2% 8/1/02 Aa2 3,455 3,457
373,166
MICHIGAN - 3.5%
Detroit Convention Facilities A 4,000 3,650
Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25%
9/30/12
Detroit Wtr. Supply Sys. Rev.
Sr. Lien Series A:
5.75% 7/1/26 (FGIC Insured) Aaa 14,750 14,135
5.875% 7/1/22 (FGIC Insured) Aaa 16,905 16,505
5.875% 7/1/29 (FGIC Insured) Aaa 10,900 10,597
Lowell Area Schools (Cap. Aaa 19,185 4,953
Appreciation) 0% 5/1/20
(FGIC Insured) (Pre-Refunded
to 5/1/05 @ 33.6439) (f)
Michigan Bldg. Auth. Rev. Aaa 1,100 1,108
Series II, 6.25% 10/1/20
(MBIA Insured)
Michigan Hosp. Fin. Auth. Rev.:
(Mercy Health Svcs. Proj.):
Series Q, 5.375% 8/15/26 Aaa 4,750 4,239
(AMBAC Insured)
Series W, 5.25% 8/15/27 (FSA Aaa 4,000 3,462
Insured)
Series X, 6% 8/15/34 (MBIA Aaa 10,675 10,300
Insured)
Rfdg.:
(Bay Med. Ctr. Proj.) Series A3 960 981
A, 8.25% 7/1/12
(Sisters of Mercy Health Aaa 7,340 7,135
Corp. Proj.) Series P,
5.375% 8/15/14 (MBIA Insured)
Michigan Hsg. Dev. Auth.
Rental Hsg. Rev.:
Rfdg. Series B, 5.7% 4/1/12 AA- 3,750 3,715
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MICHIGAN - CONTINUED
Michigan Hsg. Dev. Auth.
Rental Hsg. Rev.: - continued
Series B, 7.5% 4/1/10 AA- $ 6,000 $ 6,161
Michigan Hsg. Dev. Auth. AA+ 260 266
Single Family Mtg. Rev.
Series A, 7.5% 6/1/15
Michigan Muni. Bond Auth. Rev.:
(State Revolving Fund Prog.) Aa1 26,800 23,689
5.125% 10/1/20
Rfdg. (Local Govt. Ln. Prog.) Aaa 1,465 1,528
Series G, 7% 11/1/02 (AMBAC
Insured)
Michigan Trunk Line (Cap. Aaa 8,010 4,768
Appreciation) Series A, 0%
10/1/09 (AMBAC Insured)
Michigan Univ. Rev. Rfdg. Aa2 7,750 7,746
(Univ. Hosp. Proj.) Series
A, 5.75% 12/1/12
Pinckney Cmnty. Schools Aaa 4,000 3,704
Livingston & Washtenaw
Counties 5.5% 5/1/27 (FGIC
Insured)
Romulus Cmnty. Schools 6% Aaa 7,500 7,460
5/1/29 (FGIC Insured)
Royal Oak Hosp. Fin. Auth.
Rev. Rfdg. (William
Beaumont Hosp. Proj.):
5.5% 1/1/14 Aa3 3,695 3,520
6.25% 1/1/09 Aa3 400 413
Western Townships Util. Auth. Aaa 2,810 2,196
Swr. Disp. Sys. Rfdg. (Cap.
Appreciation) 0% 1/1/05
(FSA Insured)
142,231
MINNESOTA - 1.5%
Centennial Independent School Aaa 2,610 2,439
District #12 Series B,
4.875% 2/1/12 (FGIC Insured)
Minneapolis & Saint Paul Hsg. Aaa 9,700 8,211
& Redev. Auth. Health Care
Sys. Rev. Rfdg. (Healthspan
Corp. Proj.) Series A, 4.75%
11/15/18 (AMBAC Insured)
Minnesota Agric. & Economic A2 12,000 11,501
Dev. Board Rev. Rfdg.
(Health Care Sys. Proj.)
Series A, 6.375% 11/15/29
Minnesota Hsg. Fin. Agcy.
(Single Family Mtg. Prog.):
Series B, 5.8% 7/1/25 (e) Aa2 5,750 5,335
Series I, 6.25% 1/1/15 Aa2 1,820 1,838
Series K, 6.4% 1/1/15 Aa2 2,510 2,558
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MINNESOTA - CONTINUED
Saint Cloud Health Care Rev. Aaa $ 11,000 $ 10,632
Rfdg. (Saint Cloud Hosp.
Group Oblig. Proj.) Series
A, 5.875% 5/1/30 (FSA
Insured)
Saint Cloud Hosp. Facilities Aaa 2,000 1,879
Rev. Rfdg. (Saint Cloud
Hosp. Proj.) Series C, 5.25%
10/1/13 (AMBAC Insured)
Univ. of Minnesota Gen. Aa3 15,000 14,826
Oblig. Rfdg. 4.8% 8/15/03
59,219
MISSISSIPPI - 0.1%
Hinds County Rev. Rfdg. Aaa 4,000 3,998
(Mississippi Methodist Hosp.
& Rehabilitation Proj.) 5.6%
5/1/12 (AMBAC Insured)
Mississippi Home Corp. Single Aaa 346 357
Family Rev. Rfdg. Series
1990 A, 9.25% 3/1/12 (FGIC
Insured)
4,355
MISSOURI - 0.9%
Boone County Ind. Dev. Auth. - 1,900 2,011
(Fairview Extended Care
Proj.) Series A, 10.125%
1/1/11 (Pre-Refunded to
1/1/01 @ 103) (f)
Kirkwood Indl. Dev. Auth. - 1,500 1,586
Health Care Corp. Rev.
(Saint Joseph Hosp. Proj.)
7% 7/1/22 (Pre-Refunded to
7/1/02 @ 102) (f)
Missouri Health & Edl.
Facilities Auth. Edl.
Facilities Rev. (Washington
Univ. Proj.):
Series A, 5% 11/15/37 Aa1 2,000 1,656
Series B, 6% 3/1/30 Aa1 21,300 21,096
Missouri Higher Ed. Ln. Auth. Aa 8,000 8,038
Student Ln. Rev. Sr. Lien
Series A, 5.625% 2/15/01
Missouri Hsg. Dev. Commission AAA 1,415 1,377
Mtg. Rev. Series C, 5.5%
3/1/16 (e)
35,764
MONTANA - 0.2%
Montana Board of Invt.
(Payroll Tax Workers
Compensation Prog.):
Series 1996:
6.875% 6/1/20 (MBIA Insured) Aaa 1,255 1,300
(Escrowed to Maturity) (f)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MONTANA - CONTINUED
Montana Board of Invt.
(Payroll Tax Workers
Compensation Prog.): -
continued
Series 1996: - continued
6.875% 6/1/20 (MBIA Insured) Aaa $ 3,870 $ 4,010
(Escrowed to Maturity) (f)
6.875% 6/1/20 (MBIA Insured) Aaa 2,005 2,077
(Escrowed to Maturity) (f)
7,387
NEBRASKA - 0.1%
Nebraska Pub. Pwr. District Aaa 3,250 3,131
Rev. Series A, 5.25% 1/1/12
(MBIA Insured)
Scotts Bluff County Hosp. A3 1,110 1,152
Auth. #1 Hos p. Rev. 6.45%
12/15/04 (Pre-Refunded to
12/15/02 @ 102) (f)
4,283
NEVADA - 0.3%
Las Vegas Downtown Redev. BBB+ 500 495
Agcy. Tax Increment Rev.
(Fremont Street Proj.) Sub
Lien Series A, 6.1% 6/15/14
Nevada Gen. Oblig. (Cap. Aa2 5,025 4,847
Impt. Proj.) Series B,
5.25% 6/1/11
Washoe County Gen. Oblig.
(Cap. Appreciation) (Reno
Sparks Proj.) Series B:
0% 7/1/12 (FSA Insured) Aaa 4,605 2,245
0% 7/1/13 (FSA Insured) Aaa 4,590 2,084
0% 7/1/14 (FSA Insured) Aaa 3,000 1,270
10,941
NEW JERSEY - 1.8%
Middlesex County Poll. Cont. - 7,750 8,338
Auth. Rev. Rfdg. (Amerada
Hess Corp. Proj.) 7.875%
6/1/22
New Jersey Econ. Dev. Auth. Aaa 3,000 2,631
Wtr. Facilities Rev. (New
Jersey American Wtr. Co.,
Inc. Proj.) Series 1997 B,
5.375% 5/1/32 (FGIC Insured)
(e)
New Jersey Health Care AAA 1,635 1,771
Facilities Fing. Auth. Rev.
(Christ Hosp. Group Issue
Proj.) 7% 7/1/06 (AMBAC
Insured)
New Jersey Tpk. Auth. Tpk. Aaa 1,000 1,078
Rev. Rfdg. Series C, 6.5%
1/1/09 (AMBAC Insured)
New Jersey Trans. Corp.
Series A:
5.25% 9/1/01 (FSA Insured) Aaa 2,000 2,008
5.4% 9/1/02 (FSA Insured) Aaa 3,535 3,554
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW JERSEY - CONTINUED
New Jersey Trans. Trust Fund
Auth.:
(Trans. Sys. Proj.):
Series A, 5.25% 6/15/11 Aa2 $ 15,345 $ 15,061
Series B, 5% 6/15/13 (AMBAC Aaa 26,055 24,475
Insured)
Rfdg. (Trans. Sys. Proj.) Aaa 7,650 7,680
Series A, 5.5% 6/15/11 (MBIA
Insured)
Passaic County Util. Auth. Aaa 3,580 3,457
Solid Waste Disp. Rev.
Rfdg. (Cap. Appreciation) 0%
3/1/01 (MBIA Insured)
Warren County Poll. Cont. Aaa 1,000 992
Fing. Auth. Resource
Recovery Rev. 6.55% 12/1/06
(MBIA Insured)
71,045
NEW MEXICO - 0.8%
Albuquerque Arpt. Rev.:
Rfdg.:
6.5% 7/1/08 (AMBAC Insured) Aaa 1,500 1,592
(e)
6.7% 7/1/18 (AMBAC Insured) Aaa 2,500 2,637
(e)
6.75% 7/1/09 (AMBAC Insured) Aaa 1,150 1,248
(e)
6.75% 7/1/10 (AMBAC Insured) Aaa 1,700 1,847
(e)
6.75% 7/1/12 (AMBAC Insured) Aaa 1,935 2,113
(e)
Series A, 6.6% 7/1/16 (AMBAC Aaa 4,750 4,991
Insured) (e)
Bernalillo County Gross Aa3 7,090 6,321
Receipt Tax Rev. 5.25%
10/1/26
New Mexico Edl. Assistance
Foundation Student Ln. Rev.:
Series B, 5.25% 4/1/05 (AMBAC Aaa 2,855 2,836
Insured) (e)
Series II A, 5% 12/1/02 (e) Aaa 2,240 2,233
Univ. of New Mexico Univ. A1 5,340 5,410
Rev. Rfdg. Series A, 6%
6/1/21
31,228
NEW YORK - 15.5%
Metro. Trans. Auth. Dedicated
Tax Fund Series A:
5% 4/1/29 (FSA Insured) Aaa 16,000 13,566
5.25% 4/1/26 (MBIA Insured) Aaa 12,500 11,081
Metro. Trans. Auth. New York
Commuter Facilities Rev.:
Rfdg.:
(Svc. Contract Proj.) Series Baa1 2,000 1,806
8, 5.25% 7/1/17
Series D, 5.125% 7/1/22 (MBIA Aaa 5,450 4,774
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW YORK - CONTINUED
Metro. Trans. Auth. New York
Commuter Facilities Rev.: -
continued
Series A:
5.625% 7/1/27 (MBIA Insured) Aaa $ 6,525 $ 6,149
6% 7/1/16 (FGIC Insured) Aaa 2,000 2,033
6% 7/1/24 Baa1 2,400 2,349
6.125% 7/1/29 Baa1 25,000 24,816
Series B, 4.75% 7/1/26 (FGIC Aaa 12,130 9,813
Insured)
Series C1, 5.125% 7/1/12 Aaa 7,570 7,229
(FGIC Insured)
Metro. Trans. Auth. New York
Svc. Contract Rev.:
(Commuter Facilities Proj.)
Series O:
5.75% 7/1/08 Baa1 1,000 1,013
5.75% 7/1/13 Baa1 14,250 14,154
(Trans. Facilities Proj.):
Series 7, 5.4% 7/1/06 Baa1 1,000 999
Series O, 5.625% 7/1/05 Baa1 7,595 7,687
Series P, 5.75% 7/1/15 Baa1 9,500 9,319
Rfdg. (Trans. Facilities Baa1 1,000 1,037
Proj.) Series 5, 6.9% 7/1/05
Metro. Trans. Auth. New York
Trans. Facilities Rev.:
Rfdg.:
(Svc. Contract Proj.):
Series 8:
5.25% 7/1/17 Baa1 3,350 3,025
5.375% 7/1/21 (FSA Insured) Aaa 6,400 5,867
Series Q, 5.125% 7/1/13 Aaa 13,000 12,196
(AMBAC Insured)
Series R, 5.4% 7/1/10 Baa1 2,680 2,636
Series C, 4.75% 7/1/16 (FSA Aaa 3,300 2,861
Insured)
Series K, 6.3% 7/1/06 (MBIA Aaa 3,500 3,696
Insured)
Series A, 5.75% 7/1/21 (MBIA Aaa 13,430 13,045
Insured)
Series B, 4.75% 7/1/26 (FGIC Aaa 14,500 11,731
Insured)
Nassau County Gen. Oblig.
Rfdg. (Gen. Impt. Proj.)
Series A:
6.5% 5/1/04 (FGIC Insured) Aaa 2,825 2,951
6.5% 5/1/05 (FGIC Insured) Aaa 4,490 4,732
6.5% 5/1/06 (FGIC Insured) Aaa 4,000 4,244
New York City Gen. Oblig.:
Rfdg.:
Series A, 7% 8/1/04 A3 4,375 4,637
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW YORK - CONTINUED
New York City Gen. Oblig.: -
continued
Rfdg.: - continued
Series B, 5.7% 8/15/02 A3 $ 195 $ 198
(Escrowed to Maturity) (f)
Series D, 8% 2/1/05 A3 2,550 2,817
Series A:
6% 8/1/18 (FSA Insured) Aaa 4,900 4,901
(Escrowed to Maturity) (f)
6.375% 8/1/05 A3 3,410 3,533
7.75% 8/15/07 A3 40 42
7.75% 8/15/07 (Pre-Refunded Aaa 210 220
to 8/15/01 @ 101.5) (f)
Series B:
5.5% 8/15/01 A3 310 312
5.5% 8/15/01 (Escrowed to Aaa 90 91
Maturity) (f)
7.5% 2/1/04 A3 1,500 1,581
Series C:
6.4% 8/1/03 A3 4,120 4,257
6.5% 8/1/07 A3 2,435 2,527
Series D:
6.5% 2/15/05 A3 500 523
6.6% 2/1/03 A3 975 1,006
6.6% 2/1/03 (Escrowed to A3 25 26
Maturity) (f)
Series H Sub Series H1, 5.5% A3 100 101
8/1/01 (Escrowed to
Maturity) (f)
Series H:
6.9% 2/1/01 A3 165 167
6.9% 2/1/01 (Escrowed to Aaa 80 81
Maturity) (f)
Series J, 6% 2/15/04 A3 1,750 1,788
New York City Ind. Dev. Agcy. Aaa 1,885 1,963
Ind. Dev. Rev. (Japan
Airlines Co. Ltd. Proj.)
Series 1991, 6% 11/1/15
(FSA Insured) (e)
New York City Ind. Dev. Agcy. A3 500 508
Spl. Facilities Rev. (Term.
One Group Assoc. Proj.) 6%
1/1/08 (e)
New York City Muni. Wtr. Fin.
Auth. Wtr. & Swr. Sys. Rev.:
Series 1996 B, 5.75% 6/15/26 Aaa 5,970 5,737
(MBIA Insured)
Series A:
5.75% 6/15/31 (FGIC Insured) Aaa 2,625 2,505
7% 6/15/09 (FGIC Insured) Aaa 2,500 2,565
Series B:
5.5% 6/15/27 (MBIA Insured) Aaa 23,685 21,814
5.75% 6/15/26 Aa3 10,000 9,622
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW YORK - CONTINUED
New York City Muni. Wtr. Fin.
Auth. Wtr. & Swr. Sys. Rev.:
- continued
Series B: - continued
5.75% 6/15/26 (AMBAC Insured) Aaa $ 10,000 $ 9,609
5.75% 6/15/29 Aa3 51,500 49,333
5.75% 6/15/29 (MBIA Insured) Aaa 15,950 15,258
5.875% 6/15/26 Aa3 1,325 1,297
New York City Transitional
Fin. Auth. Rev.:
(Future Tax Secured Prog.):
Series A:
5% 8/15/15 Aa3 5,000 4,547
5.125% 11/15/14 Aa3 5,000 4,653
5.25% 11/15/13 Aa3 2,500 2,388
6% 8/15/29 Aa3 10,930 10,915
Series B:
4.75% 11/15/16 Aa3 7,300 6,312
6% 11/15/29 Aa3 7,500 7,490
Series C, 4.75% 5/1/23 Aa3 5,000 4,108
New York City Trust Cultural Aaa 6,500 6,148
Resources Rev. (American
Museum of Natural History
Proj.) 5.65% 4/1/27 (MBIA
Insured)
New York State Dorm. Auth. Aa1 3,025 2,755
Lease Rev. (Court
Facilities-Westchester
County Proj.) 5.25% 8/1/18
New York State Dorm. Auth.
Revs.:
(City Univ. Sys.
Consolidation Proj.):
Series A, 5.75% 7/1/09 Baa1 4,370 4,423
Series D:
7% 7/1/09 Baa1 2,000 2,153
7% 7/1/09 (FGIC Insured) Aaa 3,780 4,112
(City Univ. Sys. Proj.) Aaa 24,650 27,769
Series C, 7.5% 7/1/10 (FGIC
Insured)
(State Univ. Edl. Facilities
Proj.):
Series A:
4.75% 5/15/25 (MBIA Insured) Aaa 5,000 4,065
5.5% 5/15/13 (FGIC Insured) Aaa 24,350 24,296
5.875% 5/15/17 (FGIC Insured) Aaa 6,865 6,978
5.75% 5/15/09 A3 2,465 2,496
5.95% 5/15/29 (FGIC Insured) Aaa 13,250 13,035
(Suffolk County Judicial Baa1 690 770
Facilities Proj.) Series A,
9.5% 4/15/14
Rfdg. (State Univ. Edl. A3 2,000 2,083
Facilities Proj.) Series A,
6.5% 5/15/04
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW YORK - CONTINUED
New York State Envir.
Facilities Corp. Clean Wtr.
& Drinking Wtr. Rev. (State
Wtr. Revolving Funds Prog.)
Series F:
4.875% 6/15/18 Aa1 $ 7,280 $ 6,308
4.875% 6/15/20 Aa1 13,900 11,853
5% 6/15/15 Aa1 7,000 6,367
New York State Envir. Aa1 4,930 4,433
Facilities Corp. Poll.
Cont. Rev. (State Wtr.
Revolving Fund Prog.) Series
D, 5.125% 6/15/19
New York State Local Govt.
Assistance Corp.:
(Cap. Appreciation):
Series A, 0% 4/1/08 A3 2,000 1,285
Series B, 0% 4/1/08 A3 5,000 3,213
Rfdg.:
Series A, 5.375% 4/1/16 A3 11,000 10,375
Series C, 5.5% 4/1/17 A3 21,850 21,352
(Cap. Appreciation) Series C, A3 5,000 2,351
0% 4/1/13
New York State Med. Care Aa2 1,500 1,511
Facilities Fin. Agcy. Rev.
(Mtg. Prog.) Series E, 6.2%
2/15/15
New York State Thruway Auth. BBB 8,500 6,531
Gen. Rev. (Spl. Oblig. Cross
Proj.) Series A, 0% 1/1/05
New York State Thruway Auth.
Svc. Contract Rev.:
(Local Hwy. & Bridge Proj.) AAA 3,640 3,654
5.5% 4/1/10 (MBIA Insured)
Rfdg. (Local Hwy. & Bridge Aaa 10,000 9,894
Proj.) Series B, 5.375%
4/1/11 (MBIA Insured)
New York State Urban Dev.
Corp. Rev. Rfdg.:
(Correctional Cap. Facilities Baa1 6,000 6,139
Proj.) Series A, 6.3% 1/1/03
(State Facilities Proj.) Baa1 2,300 2,310
5.75% 4/1/11
Niagara Falls Gen. Oblig. Aaa 500 596
(Pub. Impt. Proj.) 7.5%
3/1/18 (MBIA Insured)
Triborough Bridge & Tunnel Baa1 9,650 10,555
Auth. Rev. (Convention Ctr.
Proj.) Series E, 7.25%
1/1/10
Triborough Bridge & Tunnel
Auth. Revs.:
(Gen. Purp. Proj.) Series A, Aa3 3,155 2,674
4.75% 1/1/19
Rfdg. (Gen. Purp. Proj.):
Series A:
5.125% 1/1/22 Aa3 5,550 4,871
5.25% 1/1/28 Aa3 13,315 11,706
Series Y, 5.5% 1/1/17 Aa3 16,100 15,737
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NEW YORK - CONTINUED
Triborough Bridge & Tunnel Aaa $ 3,320 $ 3,247
Auth. Spl. Oblig. Rfdg.
Series A, 5.25% 1/1/11 (FGIC
Insured)
622,286
NORTH CAROLINA - 4.4%
Harnett County Ctfs. of Prtn.:
7.5% 12/1/03 (AMBAC Insured) Aaa 2,640 2,838
7.5% 12/1/04 (AMBAC Insured) Aaa 2,865 3,131
North Carolina Eastern Muni.
Pwr. Agcy. Pwr. Sys. Rev.:
Rfdg.:
Series A:
5.2% 1/1/01 Baa1 10,000 9,981
5.5% 1/1/05 (MBIA Insured) Aaa 1,000 1,004
5.75% 1/1/26 Baa3 4,000 3,418
6.1% 1/1/01 Baa3 1,450 1,456
6.25% 1/1/03 Baa3 2,600 2,632
7.875% 1/1/02 Baa3 4,000 4,131
Series B:
5.875% 1/1/21 (MBIA Insured) Aaa 22,725 22,257
6% 1/1/14 Baa3 13,500 12,843
7% 1/1/08 Baa3 9,000 9,496
7.25% 1/1/07 Baa3 7,375 7,868
Series C:
5.125% 1/1/03 Baa1 7,720 7,571
5.25% 1/1/04 Baa1 1,000 982
5.5% 1/1/07 Baa1 5,950 5,789
7% 1/1/07 Baa1 15,715 16,555
Series B, 6% 1/1/05 Baa3 11,500 11,576
Series D:
6.7% 1/1/19 Baa3 3,000 2,987
6.75% 1/1/26 Baa3 7,000 6,907
North Carolina Muni. Pwr.
Agcy. #1 Catawba Elec. Rev.:
Rfdg.:
Series 1992, 7.25% 1/1/07 Baa1 5,200 5,519
Series A:
5.125% 1/1/15 (MBIA Insured) Aaa 6,860 6,326
5.125% 1/1/17 (MBIA Insured) Aaa 31,850 28,726
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NORTH CAROLINA - CONTINUED
North Carolina Muni. Pwr.
Agcy. #1 Catawba Elec. Rev.:
- continued
6.25% 1/1/17 (AMBAC Insured) Aaa $ 2,050 $ 2,077
176,070
NORTH DAKOTA - 0.5%
Mercer County Poll. Cont.
Rev. Rfdg.:
(Antelope Valley Aaa 16,000 18,217
Station/Basin Elec. Pwr.
Coop. Proj.) 7.2% 6/30/13
(AMBAC Insured)
(Montana-Dakota Utils. Co. Aaa 3,750 3,908
Proj.) 6.65% 6/1/22 (FGIC
Insured)
22,125
OHIO - 2.9%
Cincinnati Gen. Oblig. Rfdg. Aa1 11,000 10,906
(Police & Firemen's
Disability Proj.) 6% 12/1/35
Cleveland Wtrwks. Rev. Rfdg. Aaa 10,000 8,582
& Impt. Series I, 5% 1/1/23
(FSA Insured)
Euclid City School District
(Cap. Appreciation):
0% 12/1/02 (AMBAC Insured) Aaa 1,265 1,115
0% 12/1/03 (AMBAC Insured) Aaa 1,265 1,056
Franklin County Hosp. Rev. Baa3 33,000 23,514
(Ohio Doctors Health Corp.
Proj.) Series A, 5.6% 12/1/28
Hilliard School District Aaa 4,725 4,598
5.75% 12/1/24 (FGIC Insured)
Marion County Hosp. Impt. BBB+ 380 378
Rev. Rfdg. (Cmnty. Hosp.
Proj.) 5.6% 5/15/01
Montgomery County Rev.
(Catholic Health Initiatives
Proj.) Series A:
6% 12/1/19 Aa3 10,000 9,719
6% 12/1/26 Aa3 10,000 9,468
Ohio Bldg. Auth.:
(Adult Correctional Proj.) Aaa 4,000 4,068
Series A, 5.95% 10/1/14
(MBIA Insured)
(W. Green Bldg. A Proj.) A2 15,000 13,311
4.75% 4/1/14
Ohio Hsg. Fin. Agcy. Mtg. Rev.:
(Oakleaf-Toledo Apts. Proj.) AA- 1,545 1,676
10.25% 12/20/25
(Residential Proj.):
Series A1, 5.3% 9/1/26 (e) AAA 2,875 2,868
Series B3, 4.95% 9/1/20 (e) Aaa 12,300 12,156
Series C1, 5% 3/1/19 (e) AAA 3,540 3,473
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
OHIO - CONTINUED
Ohio Tpk. Commission Tpk.
Rev. Series A:
5.6% 2/15/12 (MBIA Insured) Aaa $ 1,250 $ 1,258
5.7% 2/15/13 (MBIA Insured) Aaa 2,750 2,774
Ohio Wtr. Dev. Auth. Poll.
Cont. Facilities Rev.:
(Wtr. Cont. Ln. Fund Prog.) Aaa 2,925 3,052
State Match Series, 6.5%
12/1/03 (MBIA Insured)
Rfdg. (Buckeye Pwr., Inc. Aaa 2,620 2,907
Proj.) 7.8% 11/1/14 (AMBAC
Insured)
116,879
OKLAHOMA - 1.0%
Oklahoma Dev. Fin. Auth. Rev. Aa3 15,000 14,798
Rfdg. (Saint John Health
Sys. Proj.) 6% 2/15/29
Oklahoma Industries Auth. Aaa 19,750 18,506
Rev. Rfdg. (Health Sys.
Oblig. Group Proj.) Series
A, 5.75% 8/15/29 (MBIA
Insured)
Sapulpa Muni. Auth. Util. Aaa 8,600 8,282
Rev. Rfdg. 5.75% 4/1/23
(FGIC Insured)
41,586
OREGON - 0.3%
Multonomah County School
District #3 (Park Rose
Proj.):
7% 12/1/03 (FGIC Insured) Aaa 2,000 2,122
7% 12/1/04 (FGIC Insured) Aaa 2,540 2,726
Oregon Health Hsg. Edl. &
Cultural Facilities Auth.
(Lewis & Clark College
Proj.) Series A:
6% 10/1/13 (MBIA Insured) Aaa 1,750 1,795
6.125% 10/1/24 (MBIA Insured) Aaa 1,000 1,005
Port Morrow Poll. Cont. Rev.
Rfdg. (Pacific Northwest
Proj.) Series A:
8% 7/15/06 AA- 385 408
8% 7/15/07 AA- 430 455
8% 7/15/08 AA- 480 508
8% 7/15/09 AA- 540 572
8% 7/15/10 AA- 605 641
8% 7/15/11 AA- 385 406
10,638
PENNSYLVANIA - 3.0%
Allegheny County Arpt. Rev. Aaa 6,500 6,605
Rfdg. (Pittsburgh Int'l.
Arpt. Proj.) Series A2,
5.75% 1/1/07 (MBIA Insured)
(e)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PENNSYLVANIA - CONTINUED
Allegheny County Hosp. Dev. Aaa $ 19,140 $ 16,291
Auth. (Univ. of Pittsburgh
Med. Ctr. Proj.) Series B,
5.125% 7/1/22 (MBIA Insured)
Cambria County Hosp. Dev. A2 1,500 1,566
Auth. Hosp. Rfdg. & Impt.
(Conemaugh Valley Hosp.
Proj.) Series B, 6.375%
7/1/18 (AMBAC Insured)
(Pre-Refunded to 7/1/02 @
102) (f)
Chester County Health & Ed. Aaa 5,000 4,394
Facilities Auth. Health Sys.
Rev. (Jefferson Health Sys.
Proj.) Series B, 5.25%
5/15/22 (AMBAC Insured)
Cumberland County Muni. Auth. Baa3 8,400 7,564
Rev. Rfdg. (Carlisle Hosp.
& Health Proj.) 6.8%
11/15/23
Delaware County Auth. Hosp. Baa2 3,500 2,974
Rev. (Crozer- Chester Med.
Ctr. Proj.) 6% 12/15/20
Delaware County Auth. Rev.
(First Mtg. Riddle Village
Proj.):
8.25% 6/1/22 (Escrowed to Aaa 4,500 5,127
Maturity) (f)
8.75% 6/1/10 (Pre-Refunded to Aaa 2,000 2,177
6/1/02 @ 102) (f)
9.25% 6/1/22 (Pre-Refunded to Aaa 3,075 3,373
6/1/02 @ 102) (f)
Northumberland County Auth. Aaa 11,830 5,489
Commonwealth Lease Rev.
(State Correctional
Facilities Proj.) 0%
10/15/13 (MBIA Insured)
(Escrowed to Maturity) (f)
Pennsylvania Convention Ctr.
Auth. Rev.:
Rfdg. Series A:
6.6% 9/1/09 (MBIA Insured) Aaa 3,000 3,189
6.7% 9/1/14 (MBIA Insured) Aaa 1,500 1,589
6.75% 9/1/19 Baa 4,500 4,557
Series A, 6.7% 9/1/16 Aaa 2,000 2,196
(Escrowed to Maturity) (f)
Pennsylvania Hsg. Fin. Agcy.:
Rfdg.:
(Multi-family Mtg. Prog.) Aa 2,000 2,089
8.1% 7/1/13
(Single Family Mtg. Prog.) Aa2 1,540 1,533
Series 54A, 5.375% 10/1/28
(e)
Series 44C, 6.65% 10/1/21 (e) Aa 10,000 10,155
Philadelphia Hosp. & Higher
Ed. Facilities Auth. Hosp.
Rev. Rfdg. (Pennsylvania
Hosp. Proj.):
5.7% 7/1/01 (Escrowed to Baa3 4,405 4,448
Maturity) (f)
5.95% 7/1/03 (Escrowed to Baa3 4,000 4,097
Maturity) (f)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PENNSYLVANIA - CONTINUED
Philadelphia Muni. Auth. Rev.
Rfdg. Series D:
6% 7/15/03 Baa2 $ 220 $ 221
6.125% 7/15/08 Baa2 4,000 3,970
Philadelphia Wtr. & Swr. Rev.:
(Cap. Appreciation) Series Aaa 3,000 2,254
14, 0% 10/1/05 (MBIA Insured)
5% 6/15/12 (FGIC Insured) Aaa 3,000 2,845
6.75% 8/1/04 (MBIA Insured) Aaa 3,000 3,175
Pittsburgh Wtr. & Swr. Auth.
Wtr. & Swr. Sys. Rev. Rfdg.:
Series A, 4.75% 9/1/16 (FGIC Aaa 15,335 13,268
Insured)
(Cap. Appreciation) Series A, Aaa 3,000 2,135
0% 9/1/06 (FGIC Insured)
(Escrowed to Maturity) (f)
Wyoming Ind. Dev. Auth. Poll. Aa2 4,300 4,259
Cont. Rev. Rfdg. (Procter &
Gamble Paper Co. Proj.)
5.55% 5/1/10
121,540
PUERTO RICO - 0.4%
Puerto Rico Commonwealth Hwy. Baa1 2,200 1,743
& Trans. Auth. Trans. Rev.
Series A, 4.75% 7/1/38
Puerto Rico Elec. Pwr. Auth. Baa1 17,250 14,196
Pwr. Rev. Rfdg. Series EE,
4.75% 7/1/24
15,939
RHODE ISLAND - 0.2%
Rhode Island Depositor Econ. Aaa 2,645 2,655
Protection Corp. Spl. Oblig.
Rfdg. Series A, 5.75% 8/1/12
(MBIA Insured)
Rhode Island Health & Edl. Aaa 6,000 4,969
Bldg. Corp. Rev. (Higher
Ed./Johnson & Wales Proj.)
5% 4/1/29 (MBIA Insured)
7,624
SOUTH CAROLINA - 1.4%
Charleston County Gen. Oblig. Aa3 2,500 2,604
6% 6/1/13 (Pre-Refunded to
6/1/06 @ 100) (f)
Charleston County Health
Facilities Rev. Rfdg. (First
Mtg. Episcopal Proj.):
Series A, 9.75% 4/1/16 - 2,750 2,884
(Pre-Refunded to 4/1/01 @
102) (f)
Series B, 9.75% 4/1/16 - 1,935 2,029
(Pre-Refunded to 4/1/01 @
102) (f)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
SOUTH CAROLINA - CONTINUED
Lexington County Health Svcs. Aaa $ 3,000 $ 3,136
District Hosp. Rev. 7%
10/1/08 (FSA Insured)
(Pre-Refunded to 10/1/01 @
102) (f)
Piedmont Muni. Pwr. Agcy.
Elec. Rev.:
Rfdg. Series B, 5.25% 1/1/11 Aaa 9,125 8,875
(MBIA Insured)
5.5% 1/1/10 (MBIA Insured) Aaa 1,455 1,452
5.6% 1/1/09 (MBIA Insured) Aaa 2,945 2,965
Richland County Hosp. Aaa 1,500 1,682
Facilities Rev. (Cmnty.
Provider Pooled Ln. Prog.)
Series A, 7.125% 7/1/17
(FSA Insured) (Escrowed to
Maturity) (f)
South Carolina Ed. Assistance
Auth. Rev. (Insured Student
Ln. Prog.):
6.4% 9/1/02 (e) - 1,500 1,532
6.625% 9/1/06 (e) AA 10,775 11,245
South Carolina Jobs Econ. Baa1 4,000 3,988
Dev. Auth. Hosp. Facilities
Rev. (Palmetto Health
Alliance Proj.) Series A,
7.375% 12/15/21
South Carolina Pub. Svc.
Auth. Rev. Rfdg. Series A:
5.75% 1/1/10 (MBIA Insured) Aaa 4,705 4,783
6.375% 7/1/21 (AMBAC Insured) Aaa 3,750 3,806
6.5% 1/1/08 (MBIA Insured) Aaa 3,530 3,751
54,732
SOUTH DAKOTA - 0.0%
South Dakota Lease Rev. Rfdg. Aaa 1,000 1,089
Series A, 6.625% 9/1/12
(FSA Insured)
TENNESSEE - 0.9%
Johnson City Elec. Rev. 5.15% Aaa 5,000 4,428
5/1/23 (MBIA Insured)
Knox County Health Edl. &
Hsg. Facilities Board Hosp.
Facilities Rev. Rfdg. (Fort
Sanders Alliance Proj.)
Series C:
5.75% 1/1/14 (MBIA Insured) Aaa 2,000 2,012
7.25% 1/1/10 (MBIA Insured) Aaa 2,660 2,974
Memphis Gen. Oblig. 5.25% Aa2 8,730 8,128
7/1/16
Memphis-Shelby County Arpt.
Auth. Arpt. Rev. Rfdg.:
Series A:
6% 2/15/05 (MBIA Insured) (e) Aaa 1,000 1,025
6.25% 2/15/09 (MBIA Insured) Aaa 1,500 1,566
(e)
6.25% 2/15/10 (MBIA Insured) Aaa 1,000 1,044
(e)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TENNESSEE - CONTINUED
Memphis-Shelby County Arpt.
Auth. Arpt. Rev. Rfdg.: -
continued
Series A: - continued
6.25% 2/15/11 (MBIA Insured) Aaa $ 1,415 $ 1,479
(e)
Series B, 6.5% 2/15/09 (MBIA Aaa 500 531
Insured) (e)
Metro. Govt. Nashville & Aaa 6,455 6,328
Davidson County Sports Auth.
Rev. (Stadium Proj.) 5.875%
7/1/21 (AMBAC Insured)
Metro. Govt. Nashville & Aaa 5,600 6,597
Davidson County Wtr. & Swr.
Sys. Rev. Rfdg. (Cap.
Appreciation) 7.7% 1/1/12
(FGIC Insured)
36,112
TEXAS - 9.6%
Allen Independent School
District Rfdg. (Cap.
Appreciation):
0% 2/15/04 Aaa 2,120 1,740
0% 2/15/05 Aaa 2,120 1,644
Alliance Arpt. Auth. Spl. Baa1 5,860 5,928
Facilities Rev. (American
Airlines, Inc. Proj.) 7.5%
12/1/29 (e)
Arlington Independent School
District Rfdg.:
5% 2/15/11 Aaa 2,720 2,560
5% 2/15/12 Aaa 5,770 5,379
Austin Combined Util. Sys.
Rev.:
Rfdg. (Cap. Appreciation):
Series A:
0% 11/15/01 (MBIA Insured) Aaa 4,000 3,721
0% 11/15/08 (MBIA Insured) Aaa 3,895 2,436
0% 11/15/09 (AMBAC Insured) Aaa 4,000 2,358
0% 5/15/10 (MBIA Insured) Aaa 2,470 1,408
0% 11/15/10 (AMBAC Insured) Aaa 4,900 2,713
Austin Independent School
District:
Rfdg. (Cap. Appreciation) 0% Aaa 6,000 5,367
8/1/02
8.125% 8/1/01 (Escrowed to Aaa 500 518
Maturity) (f)
Birdville Independent School Aaa 8,665 4,715
District Rfdg. (Cap.
Appreciation) 0% 2/15/11
Cedar Hill Independent School Aaa 1,575 933
District Rfdg. (Cap.
Appreciation) 0% 8/15/09
Conroe Independent School
District Rfdg. (Cap.
Appreciation):
Series B:
0% 2/15/07 Aaa 2,360 1,632
0% 2/15/09 Aaa 1,100 676
0% 2/15/08 Aaa 3,000 1,956
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TEXAS - CONTINUED
Conroe Independent School
District Rfdg. (Cap.
Appreciation): - continued
Series B: - continued
0% 2/15/10 Aaa $ 2,805 $ 1,622
0% 2/15/11 Aaa 1,500 816
Corpus Christi Independent
School District Rfdg.:
0% 8/15/02 Aaa 2,165 1,933
(Cap. Appreciation) 0% 8/15/01 Aaa 1,535 1,446
Cypress-Fairbanks Independent
School District Rfdg. (Cap.
Appreciation):
Series A, 0% 2/15/12 Aaa 7,100 3,621
0% 2/1/04 Aaa 4,250 3,495
Dallas Fort Worth Reg'l.
Arpt. Rev. Rfdg.:
(Joint Dallas/Fort Worth Aaa 2,295 2,430
Int'l. Arpt. Proj.) 6.5%
11/1/05 (FGIC Insured)
Series A, 7.375% 11/1/12 Aaa 1,000 1,091
(FGIC Insured)
Dallas Gen. Oblig.:
(Cap. Appreciation) 0% 2/15/03 Aaa 5,115 4,438
Rfdg. (Cap. Appreciation) Aaa 4,900 4,331
4.5% 2/15/14
Dallas Hsg. Corp. Cap. Prog.
Rev. Rfdg. (Section 8
Assorted Projs.):
7.7% 8/1/05 Baa2 1,100 1,113
7.85% 8/1/13 Baa2 1,000 1,015
Dallas Independent School Aaa 10,925 7,350
District Rfdg. (Cap.
Appreciation) 0% 8/15/07
El Paso Arpt. Rev. (El Paso Aaa 1,000 994
Int'l. Arpt. Proj.) 5.125%
8/15/04 (FGIC Insured) (e)
El Paso Independent School
District Rfdg.:
5% 2/15/11 Aaa 2,630 2,476
5% 2/15/12 Aaa 3,000 2,797
El Paso Property Fin. Auth. Aaa 990 1,025
Single Family Mtg. Rev.
Series A, 8.7% 12/1/18 (e)
El Paso Wtr. & Swr. Rev.
Rfdg. (Cap. Appreciation):
0% 3/1/05 (MBIA Insured) Aaa 2,650 2,050
0% 3/1/06 (MBIA Insured) Aaa 3,700 2,705
Fort Bend Independent School Aaa 2,500 2,680
District 7% 2/15/05
Garland Independent School Aaa 5,000 3,913
District Series A, 4% 2/15/17
Grapevine-Colleyville Aaa 2,580 1,840
Independent School District
Rfdg. (Cap. Appreciation) 0%
8/15/06
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TEXAS - CONTINUED
Harris County Gen. Oblig.
Rfdg. (Cap. Appreciation)
(Toll Road Proj.) Sub Lien:
0% 8/1/06 Aa1 $ 4,245 $ 3,025
0% 8/1/08 Aa1 8,005 5,068
Harris County Hosp. District Aaa 3,000 3,309
Mtg. Rev. Rfdg. 7.4% 2/15/10
(AMBAC Insured)
Houston Independent School Aaa 6,400 3,385
District Rfdg. Series A, 0%
8/15/11
Houston Wtr. & Swr. Sys. Rev. Aaa 6,735 4,728
Rfdg. Sr. Lien Series C, 0%
12/1/06 (AMBAC Insured)
Humble Independent School Aaa 3,280 2,268
District Rfdg. (Cap.
Appreciation) 0% 2/15/07
Hurst Euless Bedford
Independent School District
Rfdg. (Cap. Appreciation):
0% 8/15/11 Aaa 3,620 1,915
0% 8/15/12 Aaa 5,105 2,530
0% 8/15/13 Aaa 3,610 1,669
Katy Independent School
District:
Rfdg. (Cap. Appreciation):
Series A, 0% 2/15/07 Aaa 2,450 1,694
0% 8/15/11 Aaa 4,170 2,206
Series A, 5% 2/15/10 Aaa 3,355 3,197
Keller Independent School Aaa 4,000 3,465
District Rfdg. Series A,
5.125% 8/15/25
Leander Independent School Aaa 300 342
District 7.5% 8/15/08
Lower Colorado River Auth.
Tax Rev. Rfdg.:
Jr. Lien, 5.25% 1/1/15 Aaa 6,000 5,768
(Escrowed to Maturity) (f)
(Cap. Appreciation) 0% 1/1/09 Aaa 3,000 1,855
(MBIA Insured) (Escrowed to
Maturity) (f)
Lower Neches Valley Auth. Aaa 9,500 9,499
Ind. Dev. Corp. Envir. Rev.
(Mobil Oil Refining Corp.
Proj.) 6.35% 4/1/26 (e)
Lower Neches Valley Auth. Aaa 36,455 36,543
Ind. Dev. Corp. Swr.
Facilities Rev. (Mobil Oil
Refining Corp. Proj.) 6.4%
3/1/30 (e)
Lower Neches Valley Auth. Aaa 3,000 2,653
Indl. Dev. Corp. Rev. Rfdg.
(Mobil Oil Refining Corp.
Proj.) 5.55% 3/1/33 (e)
Mesquite Independent School Aaa 1,385 1,369
District Rfdg. 5.375% 8/15/11
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TEXAS - CONTINUED
Midlothian Independent School
District Rfdg. (Cap.
Appreciation):
0% 2/15/07 Aaa $ 1,935 $ 1,338
0% 2/15/09 Aaa 1,970 1,211
0% 2/15/10 Aaa 1,525 882
Northwest Texas Independent Aaa 3,825 3,232
School District Rfdg. (Cap.
Appreciation) 0% 8/15/03
Port Dev. Corp. Ind. Dev. - 1,000 1,015
Rev. Rfdg. (Cargill, Inc.
Proj.) 7.7% 3/1/07
Round Rock Independent School
District:
Rfdg. (Cap. Appreciation):
0% 2/15/01 Aaa 2,000 1,935
0% 2/15/08 Aaa 9,800 6,390
0% 8/15/09 (MBIA Insured) Aaa 7,430 4,442
0% 8/15/10 (MBIA Insured) Aaa 6,800 3,822
Series A, 7.5% 8/1/03 Aaa 1,300 1,389
4.5% 8/1/17 Aaa 5,575 4,640
Sabine River Auth. Poll. Baa1 1,250 1,285
Cont. Rev. (Texas Utils.
Elec. Co. Proj.) 8.25%
10/1/20 (e)
San Antonio Elec. & Gas Rev.
Rfdg. (Cap. Appreciation):
Series A, 0% 2/1/05 (AMBAC Aaa 5,850 4,545
Insured)
Series B:
0% 2/1/05 (FGIC Insured) Aaa 12,285 9,556
(Escrowed to Maturity) (f)
0% 2/1/06 (FGIC Insured) Aaa 1,295 951
(Escrowed to Maturity) (f)
0% 2/1/07 (FGIC Insured) Aaa 10,000 6,929
(Escrowed to Maturity) (f)
0% 2/1/08 (FGIC Insured) Aaa 6,340 4,138
(Escrowed to Maturity) (f)
0% 2/1/09 (FGIC Insured) Aaa 2,000 1,231
(Escrowed to Maturity) (f)
0% 2/1/10 (FGIC Insured) Aaa 14,000 8,112
(Escrowed to Maturity) (f)
San Antonio Gen. Oblig.:
Rfdg. (Cap. Appreciation) Aaa 1,920 1,372
Series C, 0% 8/1/06 (MBIA
Insured)
Series 2000, 5% 2/1/20 Aa2 5,000 4,328
San Antonio Independent Aaa 23,010 20,123
School District 5.125%
8/15/22
San Antonio Wtr. Rev.:
6.5% 5/15/10 (MBIA Insured) Aaa 1,690 1,757
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TEXAS - CONTINUED
San Antonio Wtr. Rev.: -
continued
6.5% 5/15/10 (MBIA Insured) Aaa $ 440 $ 461
(Escrowed to Maturity) (f)
6.5% 5/15/10 (MBIA Insured) Aaa 500 524
(Pre-Refunded to 5/15/02 @
102) (f)
Spring Branch Independent
School District Rfdg.:
0% 2/1/05 Aaa 5,725 4,438
0% 2/1/06 Aaa 5,710 4,194
Spring Independent School
District:
Rfdg. (Cap. Appreciation) 0% Aaa 3,000 2,748
2/15/02
4.875% 8/15/10 Aaa 4,000 3,796
Texarkana Health Facilities Aaa 1,750 1,794
Dev. Corp. Hosp. Rev.
(Wadley Reg'l. Med. Ctr.
Proj.) 7% 10/1/05 (MBIA
Insured)
Texas A&M Univ. Rev. Rfdg. Aa2 1,610 1,628
(Fing. Sys. Proj.) 5.5%
5/15/02
Texas Gen. Oblig.:
(College Student Ln. Prog.) Aa1 5,350 5,403
5.8% 8/1/05 (e)
(Texas Pub. Fin. Auth. Proj.) Aa1 5,000 4,649
Series A, 5% 10/1/14
(Veterans Land Proj.) 7.4% Aa1 2,500 2,574
12/1/20
Rfdg. (Texas Pub. Fing. Auth. Aa1 7,150 6,991
Proj.) 5.25% 10/1/11
Texas Muni. Pwr. Agcy. Rev.
Rfdg. (Cap. Appreciation):
0% 9/1/04 (AMBAC Insured) Aaa 5,900 4,700
0% 9/1/05 (AMBAC Insured) Aaa 13,000 9,787
Texas Pub. Fin. Auth. Bldg.
Rev. Rfdg. (Cap.
Appreciation):
Series 1990, 0% 2/1/12 (MBIA Aaa 4,400 2,249
Insured)
0% 2/1/09 (MBIA Insured) Aaa 2,000 1,232
Travis County Health
Facilities Dev. Corp. Rev.
(Ascension Health Cr. Prog.)
Series A:
6.25% 11/15/18 (MBIA Insured) Aaa 15,550 15,768
6.25% 11/15/19 (MBIA Insured) Aaa 5,565 5,626
Univ. of Texas Permanent
Univ. Fund:
5% 7/1/10 Aaa 4,000 3,823
5.25% 7/1/11 Aaa 7,080 6,937
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TEXAS - CONTINUED
Univ. of Texas Univ. Rev.
Rfdg. (Fing. Sys. Proj.)
Series A:
6% 8/15/04 Aa1 $ 1,170 $ 1,209
6% 8/15/05 Aa1 1,000 1,037
383,544
UTAH - 2.8%
Intermountain Pwr. Agcy. Pwr.
Supply Rev.:
Rfdg.:
Series A:
6% 7/1/16 (AMBAC Insured) Aaa 15,345 15,518
6.5% 7/1/10 (AMBAC Insured) Aaa 1,635 1,759
Series B:
5.75% 7/1/16 (MBIA Insured) Aaa 30,260 29,939
6% 7/1/16 (MBIA Insured) Aaa 29,500 29,800
Series D, 5% 7/1/21 (MBIA Aaa 12,100 10,497
Insured)
Series G, 10.125% 7/1/12 Aaa 1,660 1,867
(Pre-Refunded to 1/1/03 @
101) (f)
Series B, 6.5% 7/1/05 (MBIA Aaa 2,000 2,112
Insured)
Jordan School District 7.625% Aa3 2,000 2,211
6/15/05
North Salt Lake Muni. Blg Aaa 6,020 6,687
Auth. Lease Rev. 8.625%
12/1/17 (Pre-Refunded to
12/1/02 @ 103) (f)
Salt Lake City Hosp. Rev. AAA 2,975 3,521
(Intermountain Health Care
Hosp., Inc. Proj.) Series A,
8.125% 5/15/15 (Escrowed to
Maturity) (f)
South Salt Lake City Ind. - 3,650 3,802
Rev. (Price Savers Wholesale
Club Proj.) 9% 11/15/13
Utah Board of Regents Student Aaa 5,000 4,716
Ln. Rev. Series H, 4.65%
5/1/06 (e)
Utah Hsg. Fin. Agcy. (Single AAA 75 76
Family Mtg. Prog.) Series G,
9.25% 7/1/19 (e)
112,505
VERMONT - 0.4%
Vermont Edl. & Health Bldg. Aa3 15,000 12,388
Fin. Agcy. Rev. (Middlebury
College Proj.) 5% 11/1/38
Vermont Ind. Dev. Auth. Ind. - 4,350 4,533
Dev. Rev. (Radisson Hotel
Proj.) Series B1, 7.75%
11/15/15
16,921
VIRGINIA - 1.4%
Hampton Museum Rev. Rfdg.:
5.25% 1/1/09 A 3,825 3,720
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
VIRGINIA - CONTINUED
Hampton Museum Rev. Rfdg.: -
continued
5.25% 1/1/14 A $ 4,500 $ 4,154
Henrico County Ind. Dev.
Auth. Pub. Facilities Lease
Rev. (Henrico County Reg'l.
Jail Proj.):
7.5% 8/1/04 (Escrowed to Aa2 2,455 2,673
Maturity) (f)
7.5% 8/1/05 (Escrowed to Aa2 2,590 2,864
Maturity) (f)
Loudoun County Ind. Dev.
Auth. Residential Care
Facilities Rev. (Falcons
Landing Proj.) Series A:
8.75% 11/1/24 (Pre-Refunded AAA 13,955 16,276
to 11/1/04 @ 103) (f)
9.25% 11/1/04 (Escrowed to - 965 1,057
Maturity) (f)
Peninsula Ports Auth. Hosp. Aa 1,500 1,758
Facilities Rev. Rfdg.
(Whittaker Memorial Hosp.
Proj.) 8.7% 8/1/23
Virginia Beach Dev. Auth.
Hosp. Facilities Rev.
(Virginia Beach Gen. Hosp.
Proj.):
5.125% 2/15/18 (AMBAC Insured) Aaa 3,100 2,833
6% 2/15/12 (AMBAC Insured) Aaa 2,150 2,220
6% 2/15/13 (AMBAC Insured) Aaa 1,460 1,519
Virginia Commonwealth Trans.
Board Trans. Rev.:
(U.S. Route 58 Corridor Dev. Aa1 10,000 9,749
Prog.) Series B, 5.75%
5/15/21
Rfdg. (U.S. Route 58 Corridor Aa1 5,000 4,480
Dev. Prog.) Series C, 5.125%
5/15/19
Virginia Hsg. Dev. Auth. Aa1 1,890 1,898
Multi-family Hsg. Rev.
Series I, 5.95% 5/1/09 (e)
55,201
WASHINGTON - 4.9%
Benton County Pub. Util. Aaa 1,740 1,795
District #1 Elec. Rev. Rfdg.
6% 11/1/04 (AMBAC Insured)
Clark County School District
#117 Camas:
5.25% 12/1/11 (FSA Insured) Aaa 3,245 3,162
5.375% 12/1/12 (FSA Insured) Aaa 3,415 3,354
Douglas County Pub. Util. Aa3 2,790 3,311
District #1 Wells
Hydroelectric Rev. Rfdg.
Series A, 8.75% 9/1/18
Port Seattle Gen. Oblig.:
Series B:
5.5% 9/1/09 (FGIC Insured) (e) Aaa 4,010 3,976
5.6% 9/1/10 (FGIC Insured) (e) Aaa 4,230 4,208
5.8% 5/1/09 (e) Aa1 4,000 4,047
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
WASHINGTON - CONTINUED
Port Seattle Passenger Aaa $ 7,930 $ 7,670
Facilities Charge Rev.
Series B, 5% 12/1/06 (AMBAC
Insured) (e)
Washington Gen. Oblig. Series Aa1 1,000 1,038
A, 6.5% 7/1/03
Washington Pub. Pwr. Supply
Sys. Nuclear Proj. #1 Rev.
Rfdg.:
(Bonneville Pwr. Aa1 1,000 1,093
Administration Proj.) Series
B, 7% 7/1/08
Series A, 7% 7/1/08 Aa1 500 546
Series B, 5.125% 7/1/13 Aa1 10,000 9,187
5.75% 7/1/10 (MBIA Insured) Aaa 5,000 5,032
Washington Pub. Pwr. Supply
Sys. Nuclear Proj. #2 Rev.:
Rfdg.:
(Bonneville Pwr. Aaa 6,500 6,410
Administration Proj.)
Series B, 5.625% 7/1/12
(MBIA Insured)
Series A:
0% 7/1/11 (MBIA Insured) Aaa 1,350 708
5.125% 7/1/11 (FSA Insured) Aaa 10,420 9,798
5.9% 7/1/04 Aa1 2,850 2,906
6% 7/1/07 Aa1 2,500 2,571
Series B, 5.5% 7/1/03 Aa1 3,000 3,015
Series C:
0% 7/1/05 Aa1 16,080 12,131
0% 7/1/05 (MBIA Insured) Aaa 11,000 8,299
Series A, 6% 7/1/05 (AMBAC Aaa 2,165 2,219
Insured)
5.4% 7/1/12 Aa1 56,550 54,008
5.55% 7/1/10 (FGIC Insured) Aaa 31,000 30,530
Washington Pub. Pwr. Supply
Sys. Nuclear Proj. #3 Rev.:
Rfdg. Series B:
0% 7/1/06 (MBIA Insured) Aaa 5,000 3,561
7.375% 7/1/04 Aa1 3,750 3,831
Rfdg. (Cap. Appreciation):
Series A, 0% 7/1/12 (MBIA Aaa 4,000 1,964
Insured)
0% 7/1/08 (MBIA Insured) Aaa 3,000 1,895
Washington State Ctfs. of Aaa 5,745 5,455
Prtn (Convention & Trade
Ctr. Proj.) 5% 7/1/10 (MBIA
Insured)
197,720
WEST VIRGINIA - 0.5%
Marshall County Poll. Cont. Aaa 22,650 22,142
Rev. Rfdg. (Ohio Pwr.
Co./Kammer Plant Proj.)
Series B, 5.45% 7/1/14
(MBIA Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
WISCONSIN - 0.1%
Menomonee Falls Wtr. Sys. Aaa $ 3,375 $ 3,377
Mtg. Rev. 5.875% 12/1/16
(FSA Insured)
Wisconsin Hsg. & Econ. Dev. Aa2 1,785 1,770
Auth. Home Ownership Rev.
Rfdg. Series F, 5.2% 9/1/26
(e)
5,147
WYOMING - 0.2%
Natrona County Hosp. Rev. A3 4,500 4,630
(Wyoming Med. Ctr. Proj.)
8.125% 9/15/10 (Pre-Refunded
to 9/15/00 @ 102) (f)
Wyoming Farm Ln. Board Cap. AA- 3,995 2,990
Facs. Rev. 0% 10/1/05
(Escrowed to Maturity) (f)
7,620
TOTAL MUNICIPAL BONDS 3,903,488
(Cost $3,961,946)
CASH EQUIVALENTS - 1.3%
SHARES
Municipal Central Cash Fund, 51,675,093 51,675
4.40% (c)(d) (Cost $51,675)
TOTAL INVESTMENT PORTFOLIO - 3,955,163
98.8%
(Cost $4,013,621)
NET OTHER ASSETS - 1.2% 48,366
NET ASSETS - 100% $ 4,003,529
</TABLE>
LEGEND
(a) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(b) Debt obligation initially issued in zero coupon form which
converts to coupon form at a specified rate and date. The rate shown
is the rate at period end.
(c) Information in this report regarding holdings by state and
security types does not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of its most recent fiscal period end is available upon request.
(d) The rate quoted is the annualized seven-day yield of the fund at
period end.
(e) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(f) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.9% AAA, AA, A 86.2%
Baa 8.5% BBB 6.0%
Ba 1.1% BB 1.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 1.6%.
The distribution of municipal securities by revenue source, as a
percentage of total net assets, is as follows:
General Obligations 22.8%
Electric Utilities 15.6
Health Care 11.7
Transportation 10.6
Water & Sewer 10.5
Education 6.7
Escrowed/Pre-Refunded 6.6
Special Tax 5.5
Others* (individually less 10.0
than 5%)
100.0%
* INCLUDES SHORT-TERM INVESTMENTS AND NET OTHER ASSETS
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $4,013,633,000. Net unrealized depreciation
aggregated $58,470,000, of which $59,636,000 related to appreciated
investment securities and $118,106,000 related to depreciated
investment securities.
At November 30, 1999, the fund had a capital loss carryforward of
approximately $30,652,000 of which $138,000, $533,000, $12,432,000,
$7,601,000 and $9,948,000 will expire on November 30, 2000, 2001,
2002, 2003 and 2005, respectively. All of the loss carryforwards were
acquired in the previous merger and are available to offset future
capital gains of the fund to the extent provided by regulations.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT)
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 3,955,163
value (cost $4,013,621) -
See accompanying schedule
Receivable for investments 6,431
sold
Receivable for fund shares 2,241
sold
Interest receivable 66,962
Other receivables 9
TOTAL ASSETS 4,030,806
LIABILITIES
Payable for investments $ 15,091
purchased
Payable for fund shares 4,842
redeemed
Distributions payable 5,687
Accrued management fee 1,249
Other payables and accrued 408
expenses
TOTAL LIABILITIES 27,277
NET ASSETS $ 4,003,529
Net Assets consist of:
Paid in capital $ 4,104,146
Undistributed net interest 491
income
Accumulated undistributed net (42,650)
realized gain (loss) on
investments
Net unrealized appreciation (58,458)
(depreciation) on investments
NET ASSETS, for 337,268 $ 4,003,529
shares outstanding
NET ASSET VALUE, offering $11.87
price and redemption price
per share ($4,003,529
(divided by) 337,268 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INTEREST INCOME $ 115,874
EXPENSES
Management fee $ 7,620
Transfer agent fees 1,613
Accounting fees and expenses 337
Non-interested trustees' 6
compensation
Custodian fees and expenses 42
Registration fees 29
Audit 36
Legal 11
Miscellaneous 57
Total expenses before 9,751
reductions
Expense reductions (13) 9,738
NET INTEREST INCOME 106,136
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 2,062
Futures contracts 533 2,595
Change in net unrealized (70,949)
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) (68,354)
NET INCREASE (DECREASE) IN $ 37,782
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 106,136 $ 217,365
Net realized gain (loss) 2,595 18,163
Change in net unrealized (70,949) (298,543)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 37,782 (63,015)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (105,306) (217,365)
From net interest income
From net realized gain (2,068) (2,533)
TOTAL DISTRIBUTIONS (107,374) (219,898)
Share transactions Net 349,997 726,957
proceeds from sales of shares
Reinvestment of distributions 73,459 150,248
Cost of shares redeemed (575,777) (1,003,023)
NET INCREASE (DECREASE) IN (152,321) (125,818)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (221,913) (408,731)
IN NET ASSETS
NET ASSETS
Beginning of period 4,225,442 4,634,173
End of period (including $ 4,003,529 $ 4,225,442
undistributed net interest
income of $491 and $0,
respectively)
OTHER INFORMATION
Shares
Sold 29,329 57,712
Issued in reinvestment of 6,156 12,035
distributions
Redeemed (48,271) (80,429)
Net increase (decrease) (12,786) (10,682)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.070 $ 12.850 $ 12.610 $ 12.430 $ 12.300 $ 11.040
period
Income from Investment .313 C .595 .607 .607 .648 D .677
Operations Net interest
income
Net realized and unrealized (.195) (.773) .320 .235 .109 1.260
gain (loss)
Total from investment .118 (.178) .927 .842 .757 1.937
operations
Less Distributions
From net interest income (.312) (.595) (.607) (.632) D (.623) (.677)
From net realized gain (.006) (.007) (.080) (.030) (.004) -
Total distributions (.318) (.602) (.687) (.662) (.627) (.677)
Net asset value, end of $ 11.870 $ 12.070 $ 12.850 $ 12.610 $ 12.430 $ 12.300
period
TOTAL RETURN B .99% (1.44)% 7.54% 7.02% 6.39% 17.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 4,004 $ 4,225 $ 4,634 $ 2,320 $ 1,837 $ 1,801
millions)
Ratio of expenses to average .48% A .49% .53% .55% .56% .57%
net assets after expense
reductions
Ratio of net interest 5.24% A 4.77% 4.75% 4.92% 5.32% 5.69%
income to average net assets
Portfolio turnover rate 30% A 28% 25% 31% 53% 50%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT FROM AN
ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Municipal Income Fund (the fund) is a fund of Fidelity
Municipal Trust (the trust) (formerly a fund of Fidelity Court Street
Trust) and is authorized to issue an unlimited number of shares. The
trust is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company organized as a
Massachusetts business trust. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require 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 are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities for which quotations are not readily available are valued
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.
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."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, 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 futures transactions, market discount, capital loss
carryforwards and losses deferred due to wash sales and futures
transactions. 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 interest income and accumulated undistributed net
realized
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
gain (loss) on investments 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc. (FIMM), an affiliate of Fidelity
Management & Research Company (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
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the fund are recorded as interest income in the accompanying
financial statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place after the
customary settlement period for that security. The price of the
underlying securities is fixed at the time the transaction is
negotiated. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
records with a value at least equal to the amount of the commitment.
Losses may arise due to changes in the value of the underlying
securities, if the counterparty does not perform under the contract,
or if the issuer does not issue the securities due to political,
economic, or other factors.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $604,586,000 and $790,891,000, respectively.
The market value of futures contracts opened and closed during the
period amounted to $22,039,000 and $22,572,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly 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 .0920% to .3700% for the
period. The annual individual fund fee rate is .25%. 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. For the period, the management
fee was equivalent to an annualized rate of .38% of average net
assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FIMM, a wholly
owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. Citibank, N.A.(Citibank) is the
custodian, transfer agent and shareholder servicing agent for the
fund. Citibank has entered into a sub-contract with Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the fund's transfer and shareholder
servicing agent and accounting functions. The fund pays account fees
and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of .08% of average net assets.
5. EXPENSE REDUCTIONS.
Through arrangements with the fund's custodian and transfer agent,
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 $11,000,
respectively, under these arrangements.
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 Automated Service Telephone provides 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.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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 1-800-544-0240 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.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
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10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
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8 Montgomery Street
San Francisco, CA
950 Northgate Drive
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1400 Civic Drive
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6300 Canoga Avenue
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COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
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300 Atlantic Street
Stamford, CT
29 South Main Street
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DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
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4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
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8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
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8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 Old N. Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
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TENNESSEE
6150 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investment Money
Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Boyce I. Greer, Vice President
George A. Fischer, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
HIY-SANN-0700 106589
1.704645.102
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Citibank N.A.
New York NY
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Citibank N.A.
New York NY
FIDELITY'S MUNICIPAL BOND FUNDS
Spartan(registered trademark) Arizona Municipal Income
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Massachusetts Municipal Income
Spartan Michigan Municipal Income
Spartan Minnesota Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Municipal Income
Spartan Ohio Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate
Municipal Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone(FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
MICHIGAN MUNICIPAL INCOME
FUND
AND
FIDELITY (REGISTERED TRADEMARK)
MICHIGAN MUNICIPAL MONEY
MARKET FUND
SEMIANNUAL REPORT
JUNE 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN MICHIGAN MUNICIPAL
INCOME FUND
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 7 The managers' review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
FIDELITY MICHIGAN MUNICIPAL
MONEY MARKET FUND
PERFORMANCE 23 How the fund has done over
time.
FUND TALK 25 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 27 A summary of major shifts in
the fund's investments over
the past six months and one
year.
INVESTMENTS 28 A complete list of the fund's
investments.
FINANCIAL STATEMENTS 34 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 38 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
In stark contrast to the final six months of 1999, most major equity
market indexes posted negative returns for the first half of 2000, due
mainly to a correction in the technology sector during the second
quarter. The majority of bond markets - with the notable exception of
high yield - fared better, as Treasuries and non-Treasuries alike
benefited as a haven from the volatility of stocks and riskier
investment alternatives.
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.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. 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
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
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). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past five year and past 10
year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MI MUNICIPAL INCOME 3.98% 2.76% 29.58% 86.06%
LB Michigan Municipal Bond 4.26% 3.00% 33.36% n/a*
Michigan Municipal Debt Funds 3.89% 1.18% 26.02% 86.55%
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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 Lehman Brothers Michigan Municipal Bond Index - a market
value-weighted index of Michigan investment-grade municipal bonds with
maturities of one year or more. To measure how the fund's performance
stacked up against its peers, you can compare it to the Michigan
municipal debt funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Inc. The past six
months average represents a peer group of 47 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 JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MI MUNICIPAL INCOME 2.76% 5.32% 6.41%
LB Michigan Municipal Bond 3.00% 5.93% n/a*
Michigan Municipal Debt Funds 1.18% 4.73% 6.43%
Average
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
* NOT AVAILABLE
$10,000 OVER 10 YEARS
Spartan MI Muni Income LB Municipal Bond
00081 LB015
1990/06/30 10000.00 10000.00
1990/07/31 10140.36 10147.00
1990/08/31 9986.93 9999.67
1990/09/30 10036.71 10005.37
1990/10/31 10131.80 10186.86
1990/11/30 10330.19 10391.72
1990/12/31 10343.31 10436.92
1991/01/31 10441.59 10576.99
1991/02/28 10519.65 10669.01
1991/03/31 10540.50 10672.85
1991/04/30 10715.51 10814.80
1991/05/31 10764.76 10910.94
1991/06/30 10748.86 10900.14
1991/07/31 10918.44 11032.90
1991/08/31 11049.64 11178.21
1991/09/30 11170.93 11323.75
1991/10/31 11292.50 11425.66
1991/11/30 11334.06 11457.54
1991/12/31 11588.35 11703.42
1992/01/31 11630.31 11730.10
1992/02/29 11649.73 11733.85
1992/03/31 11662.94 11738.20
1992/04/30 11766.31 11842.67
1992/05/31 11893.80 11982.05
1992/06/30 12102.61 12183.11
1992/07/31 12544.48 12548.36
1992/08/31 12367.35 12426.02
1992/09/30 12451.32 12507.28
1992/10/31 12240.92 12384.34
1992/11/30 12540.34 12606.14
1992/12/31 12693.45 12734.85
1993/01/31 12879.49 12882.95
1993/02/28 13397.18 13348.93
1993/03/31 13244.27 13207.83
1993/04/30 13385.66 13341.10
1993/05/31 13474.86 13416.08
1993/06/30 13706.23 13639.99
1993/07/31 13696.12 13657.86
1993/08/31 14020.75 13942.22
1993/09/30 14198.14 14101.02
1993/10/31 14219.72 14128.23
1993/11/30 14126.95 14003.76
1993/12/31 14449.09 14299.38
1994/01/31 14645.34 14462.68
1994/02/28 14222.42 14088.10
1994/03/31 13579.50 13514.43
1994/04/30 13646.95 13629.03
1994/05/31 13716.80 13747.20
1994/06/30 13676.51 13663.20
1994/07/31 13917.53 13913.65
1994/08/31 13952.00 13961.79
1994/09/30 13763.54 13756.83
1994/10/31 13478.09 13512.51
1994/11/30 13053.79 13268.20
1994/12/31 13364.72 13560.23
1995/01/31 13766.77 13947.79
1995/02/28 14163.55 14353.39
1995/03/31 14045.71 14518.31
1995/04/30 14072.91 14535.44
1995/05/31 14526.63 14999.27
1995/06/30 14357.96 14868.77
1995/07/31 14449.66 15009.73
1995/08/31 14645.04 15200.05
1995/09/30 14758.36 15296.27
1995/10/31 14979.11 15518.68
1995/11/30 15265.76 15776.13
1995/12/31 15424.64 15927.74
1996/01/31 15531.91 16047.99
1996/02/29 15406.91 15939.67
1996/03/31 15178.20 15735.96
1996/04/30 15121.82 15691.43
1996/05/31 15107.47 15685.15
1996/06/30 15281.94 15855.96
1996/07/31 15417.22 16000.25
1996/08/31 15387.75 15996.41
1996/09/30 15563.03 16220.36
1996/10/31 15727.32 16403.81
1996/11/30 16015.70 16704.00
1996/12/31 15945.66 16633.85
1997/01/31 15957.26 16665.28
1997/02/28 16117.24 16818.27
1997/03/31 15886.62 16594.08
1997/04/30 16010.14 16732.98
1997/05/31 16236.57 16984.64
1997/06/30 16417.33 17165.53
1997/07/31 16874.92 17641.01
1997/08/31 16695.56 17475.72
1997/09/30 16921.91 17683.15
1997/10/31 17019.75 17796.86
1997/11/30 17130.79 17901.50
1997/12/31 17384.02 18162.68
1998/01/31 17545.39 18350.12
1998/02/28 17549.21 18355.63
1998/03/31 17561.23 18371.78
1998/04/30 17495.12 18288.92
1998/05/31 17734.65 18578.44
1998/06/30 17804.37 18651.64
1998/07/31 17846.04 18698.45
1998/08/31 18118.28 18987.34
1998/09/30 18342.54 19223.93
1998/10/31 18291.19 19223.54
1998/11/30 18361.87 19291.02
1998/12/31 18377.13 19339.63
1999/01/31 18575.34 19569.58
1999/02/28 18451.99 19484.06
1999/03/31 18462.59 19511.14
1999/04/30 18501.72 19559.72
1999/05/31 18384.98 19446.47
1999/06/30 18105.62 19166.44
1999/07/31 18164.35 19236.21
1999/08/31 17998.22 19082.32
1999/09/30 18039.22 19090.14
1999/10/31 17871.63 18883.21
1999/11/30 18044.98 19084.12
1999/12/31 17894.10 18941.95
2000/01/31 17809.39 18859.55
2000/02/29 17983.68 19078.32
2000/03/31 18379.88 19495.37
2000/04/30 18274.82 19380.16
2000/05/31 18139.12 19279.38
2000/06/30 18605.52 19789.90
IMATRL PRASUN SHR__CHT 20000630 20000724 085644 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Michigan Municipal Income Fund on June 30, 1990.
As the chart shows, by June 30, 2000, the value of the investment
would have grown to $18,606 - an 86.06% increase on the initial
investment. For comparison, look at how the Lehman Brothers Municipal
Bond Index - a market value-weighted index of investment-grade
municipal bonds with maturities of one year or more - did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have grown to $19,790 - a 97.90% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return and yield
of a fund that invests in bonds
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31,
2000 1999 1998 1997 1996 1995
Dividend returns 2.69% 4.62% 4.91% 5.27% 5.63% 6.15%
Capital returns 1.29% -7.25% 0.80% 3.75% -2.25% 9.26%
Total returns 3.98% -2.63% 5.71% 9.02% 3.38% 15.41%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains, if
any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED JUNE 30, 2000 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.72(cents) 28.57(cents) 56.56(cents)
Annualized dividend rate 5.24% 5.27% 5.15%
30-day annualized yield 5.12% - -
30-day annualized 8.37% - -
tax-equivalent yield
DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $10.95 over the past one
month, $10.87 over the past six months and $10.98 over the past one
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. The tax-equivalent yield
shows what you would have to earn on a taxable investment to equal the
fund's tax-free yield, if you're in the 38.82% combined effective 2000
federal and state income tax bracket, but does not reflect the payment
of the federal alternative minimum tax, if applicable.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
For the six-month period ending June
30, 2000, the municipal bond
market was one of the
best-performing debt categories in
fixed-income. Early in the period,
against a backdrop of fairly light
new issue supply, demand was driven
by investors seeking to capture muni
yields hovering in the neighborhood
of 6%, their highest level in
approximately five years. Early in
the second quarter, however, munis
took a step back as the Federal
Reserve Board continued its
campaign of pre-emptive
interest-rate hikes to combat
potential inflation. This scenario was
less than ideal for muni bonds, which
tend to be of longer maturity than
most other debt offerings and,
therefore, acutely interest-rate
sensitive. But throughout June, a
bevy of economic data indicated
that the U.S. economy was indeed in
a slowdown, and muni bonds rallied
once again. For the overall six-month
period ending June 30, 2000, the
Lehman Brothers Municipal Bond
Index - an index of over 35,000
investment-grade, fixed-rate,
tax-exempt bonds - gained
4.48%. That return outpaced the
3.99% advance of the overall
taxable-bond market, as measured
by the Lehman Brothers Aggregate
Bond Index. While Treasury and
other government bonds were
among the only sectors to outpace
municipal securities, tax-free munis
still offered competitive, if not
superior, tax-equivalent yields at
every maturity level.
(photograph of Norm Lind)(photograph of George Fischer)
NOTE TO SHAREHOLDERS: The following is an interview with Norm Lind
(left), who managed Spartan Michigan Municipal Income Fund during the
period covered by this report, with additional comments from George
Fischer (right), who became manager of the fund on July 1, 2000.
Q. HOW DID THE FUND PERFORM, NORM?
N.L. For the six-month period that ended June 30, 2000, the fund had a
total return of 3.98%. To get a sense of how the fund did relative to
its competitors, the Michigan municipal debt funds average returned
3.89% for the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Michigan Municipal Bond Index, which
tracks the types of securities in which the fund invests, returned
4.26% for the same six-month period. For the 12-month period that
ended June 30, 2000, the fund returned 2.76%. For the same one-year
period, the Michigan municipal debt funds average returned 1.18% and
the Lehman Brothers index returned 3.00%.
Q. WHAT FACTORS DROVE THE FUND'S PERFORMANCE DURING THE PAST SIX
MONTHS?
N.L. Despite the fact that interest rates continued to rise over the
past six months, municipal bonds perked up a bit and helped the fund
post a positive return. Rising interest rates usually spell trouble
for municipal bonds, much as they did during most of 1999. In the past
six months, however, investors increasingly began to anticipate that
the Federal Reserve Board was at or near the end of its year-long
campaign to thwart inflation by pushing short-term interest rates
higher. Renewed enthusiasm was felt in the municipal market, which
also experienced a diminished supply of bonds. Firmer demand coupled
with decreased supply helped push municipal bond prices somewhat
higher, especially during the final weeks of the period.
Q. WHAT HELPED THE FUND OUTPACE ITS PEERS DURING THE PAST SIX MONTHS?
N.L. Probably the main factor behind the fund's outperformance of its
peers was its relatively large position in premium coupon bonds, which
pay interest rates above prevailing market rates and trade at prices
above face - or par - value. That's because their premium gives them
DE MINIMIS protection. This protects certain premium bond gains from
unfavorable tax treatment that can occur during particular market
environments. As interest rates rose and bond prices fell, more and
more bonds fell outside of DE MINIMIS and investors punished them
accordingly by pushing their prices lower.
Q. WHERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
N.L. Yes, there were. The fund's emphasis on intermediate-term bonds -
those with maturities of between 10 and 20 years - detracted somewhat
from the fund's performance. These bonds didn't fare as well as their
longer-term counterparts due to weaker demand.
Q. HOW DID YOU MANAGE THE FUND'S INTEREST-RATE SENSITIVITY?
N.L. In keeping with Fidelity's approach, I didn't dramatically alter
the fund's interest-rate sensitivity in response to market movements
or my opinion about where interest rates were headed. Instead, I kept
the fund's interest-rate sensitivity - as reflected by its duration -
in line with the intermediate municipal market as a whole, as measured
by the Lehman Brothers Michigan Municipal Bond Index. At the end of
the period, the fund's duration was 6.8 years, which was in line with
the Lehman Brothers index.
Q. WHERE DID YOU FIND ATTRACTIVE VALUES IN TERMS OF SECTORS OVER THE
PAST SIX MONTHS?
N.L. I continued to identify some nice values among issuers that are
less economically sensitive - including those that provide essential
services such as water, sewer and transportation. Given that the
economy could slow in response to higher interest rates, I felt that
these essential services bonds were a prudent way to go. Furthermore,
economically sensitive bonds - such as general obligation bonds, which
are backed by tax collections - typically offered only a small amount
of additional yield over these essential services bonds.
Q. TURNING TO YOU, GEORGE, WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND
THE FUND?
G.F. If the Federal Reserve is near the end of its campaign to cool
the economy and stave off inflationary pressures by raising interest
rates, the bond markets should benefit. If, on the other hand, the Fed
continues to push rates higher, there may be more volatility ahead. As
for the fund, I'll continue to approach the market as Norm did and
manage the fund very similarly. I plan to be fairly cautious in terms
of credit quality, because the economy has been good for so long that
it's easy to get lulled into complacency. We'll remain vigilant,
looking for potential problems that could occur if the economy slows.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: high current income for
Michigan residents by normally
investing in investment-grade
municipal securities whose
interest is free from federal
income tax and Michigan
personal income tax
FUND NUMBER: 081
TRADING SYMBOL: FMHTX
START DATE: November 12,
1985
SIZE: as of June 30, 2000,
more than $428 million
MANAGER: George Fischer,
since July 2000; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
GEORGE FISCHER ON CHOOSING
INVESTMENTS FOR THE FUND:
"When selecting individual bonds
for inclusion in the fund, credit
research is always my starting point.
Using a very rigorous research
process and with the help of
Fidelity's credit research team, I
also look for investment-grade
bonds from issuers that have
exhibited fiscal prudence and are
well-managed. After completing
careful credit research, I then
consider structural characteristics,
such as maturity, call features,
coupons and others. Because so
much of the municipal market is
insured, it's often challenging to add
value through credit research. So I
look for opportunities to take
advantage of pricing anomalies that
creep up due to a fund's structural
characteristics."
(solid bullet) General obligation bonds (GOs)
were the fund's second-largest sector
concentration throughout the past
year, making up 20.8% of the fund's
net assets at the end of the period. A
GO is backed by the full faith and
credit - which includes the taxing
power - of a city, county, state or
other issuer. GOs are repaid through
general revenues - including
individual and corporate taxes -
collected by the issuer.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF JUNE
30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Health Care 24.8 25.1
General Obligations 20.8 18.5
Escrowed/Pre-Refunded 9.7 10.9
Special Tax 9.0 9.2
Electric Utilities 8.2 8.1
AVERAGE YEARS TO MATURITY AS
OF JUNE 30, 2000
6 MONTHS AGO
Years 13.7 13.7
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME REMAINING UNTIL
PRINCIPAL PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS,
WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF JUNE 30, 2000
6 MONTHS AGO
Years 6.8 7.1
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION
(MOODY'S RATINGS)
AS OF JUNE 30, 2000
Aaa 59.7%
Aa, A 34.3%
Baa 4.0%
Not Rated 1.6%
Short-term
Investments 0.4%
Row: 1, Col: 1, Value: 59.7
Row: 1, Col: 2, Value: 34.3
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 5, Value: 0.4
AS OF DECEMBER 31, 1999
Aaa 58.4%
Aa, A 35.2%
Baa 4.6%
Not Rated 1.6%
Short-term
Investments 0.2%
Row: 1, Col: 1, Value: 58.4
Row: 1, Col: 2, Value: 35.2
Row: 1, Col: 3, Value: 4.6
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 5, Value: 0.2
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P(registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN MICHIGAN MUNICIPAL INCOME
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.5%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - 97.8%
Anchor Bay School District:
Rfdg. 4.75% 5/1/26 (FGIC Aaa $ 2,250,000 $ 1,905,660
Insured)
5.5% 5/1/18 (MBIA Insured) Aaa 2,720,000 2,811,854
(Pre-Refunded to 5/1/07 @
100) (e)
Bay City Gen. Oblig. (Cap. Aaa 1,725,000 741,112
Appreciation) (Street Impt.
Proj.) 0% 6/1/15 (AMBAC
Insured)
Brighton Area School District Aaa 10,000,000 4,316,600
Rfdg. (Cap. Appreciation)
Series II, 0% 5/1/15 (AMBAC
Insured)
Caladonia County Schools Aaa 2,095,000 1,803,250
Rfdg. 4.75% 5/1/22 (FGIC
Insured)
Clarkston Cmnty. Schools Aaa 2,600,000 2,703,506
5.55% 5/1/10 (FGIC Insured)
(Pre-Refunded to 5/1/05 @
101) (e)
Clintondale Cmnty. Schools Aa2 2,205,000 2,209,520
Rfdg. 5.5% 5/1/15
Comstock Pub. Schools (Cap. Aaa 1,300,000 1,017,263
Appreciation) 0% 5/1/05 (FSA
Insured)
Davison Cmnty. School Aaa 1,000,000 985,570
District 5.375% 5/1/16 (FGIC
Insured)
Detroit Convention Facilities A 12,700,000 12,045,061
Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25%
9/30/12
Detroit Gen. Oblig. Rfdg.
(Distributable State Aid
Proj.):
5.2% 5/1/07 (AMBAC Insured) Aaa 4,000,000 4,047,360
5.25% 5/1/09 (AMBAC Insured) Aaa 4,500,000 4,551,075
Detroit Local Dev. Fin. Auth. A2 3,000,000 2,780,310
Rfdg. Sr. Series A, 5.375%
5/1/18
Detroit Swr. Disp. Rev.:
Rfdg. Series B, 6.25% 7/1/07 Aaa 1,130,000 1,215,146
(MBIA Insured)
Series A, 5.75% 7/1/26 (FGIC Aaa 10,000,000 9,881,000
Insured)
Detroit Wtr. Supply Sys. Rev.:
Rfdg.:
6.2% 7/1/04 (FGIC Insured) Aaa 3,795,000 3,972,492
6.5% 7/1/15 (FGIC Insured) Aaa 6,000,000 6,645,060
Sr. Lien Series A:
5.75% 7/1/26 (FGIC Insured) Aaa 2,000,000 1,976,200
5.875% 7/1/29 (FGIC Insured) Aaa 3,000,000 2,999,940
Eastern Michigan Univ. Rev. Aaa 1,000,000 1,022,840
Rfdg. 5.9% 6/1/02 (AMBAC
Insured)
Flint Hosp. Bldg. Auth. Rev. Baa1 5,570,000 5,570,000
(Hurley Med. Ctr. Proj.)
6.5% 7/1/20 (Pre-Refunded to
7/1/00 @ 100) (e)
Fowlerville Cmnty. School Aaa 2,500,000 2,117,400
District Rfdg. 4.75% 5/1/26
(FSA Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Greater Detroit Resource
Recovery Auth. Rev. Rfdg.:
Series A, 6.25% 12/13/05 Aaa $ 4,000,000 $ 4,226,360
(AMBAC Insured)
Series B, 6.25% 12/13/05 Aaa 2,000,000 2,113,180
(AMBAC Insured)
Hamilton Cmnty. Schools Aaa 3,500,000 3,108,315
District Rfdg. 5% 5/1/24
(FGIC Insured)
Hastings School District Aaa 485,000 505,855
5.625% 5/1/18 (FGIC Insured)
(Pre-Refunded to 5/1/05 @
101) (e)
Howell Pub. Schools Rfdg. Aaa 1,130,000 670,158
(Cap. Appreciation) 0%
5/1/10 (AMBAC Insured)
Huron Valley School District Aaa 5,830,000 3,261,477
Rfdg. (Cap. Appreciation) 0%
5/1/11 (FGIC Insured)
Imlay City Cmnty. School Aaa 1,375,000 1,019,920
District Rfdg. (Cap.
Appreciation) (School Bldg.
and Site Proj.) 0% 5/1/06
(FGIC Insured)
Kent Hosp. Fin. Auth. Hosp.
Facilities Rev. Rfdg.:
(Butterworth Hosp. Proj.) Aa3 3,685,000 4,164,382
Series A, 7.25% 1/15/13
(Spectrum Health Proj.)
Series A:
5.375% 1/15/10 Aa3 2,200,000 2,164,668
5.375% 1/15/11 Aa3 2,420,000 2,369,156
5.375% 1/15/12 Aa3 2,505,000 2,447,135
Lake Orion Cmnty. School Aaa 3,840,000 3,915,341
District Series A, 5.85%
5/1/16 (FGIC Insured)
Lakeshore Pub. Schools Aaa 1,000,000 1,095,440
(Berrien County Proj.) 6.8%
5/1/06 (MBIA Insured)
Lansing Bldg. Auth. Rev. 0% Aaa 3,000,000 1,567,140
6/1/12 (AMBAC Insured)
Livonia Pub. School District Aaa 7,000,000 7,066,010
5.875% 5/1/25 (FGIC Insured)
Lowell Area Schools (Cap. Aaa 11,375,000 4,360,038
Appreciation) 0% 5/1/15
(FGIC Insured) (Pre-Refunded
to 5/1/05 @ 49.0888) (b)(e)
Manistee Area Pub. Schools:
5.875% 5/1/24 (FGIC Insured) Aaa 1,700,000 1,715,759
5.9% 5/1/29 (FGIC Insured) Aaa 1,250,000 1,261,150
Marquette City Hosp. Fin. Aaa 2,750,000 2,847,350
Auth. Rev. Rfdg. (Marquette
Gen. Hosp. Proj.) Series D,
5.875% 4/1/11 (FSA Insured)
Michigan Bldg. Auth. Rev.:
(Cap. Appreciation) Series I:
0% 10/1/01 (Escrowed to Aaa 1,000,000 941,570
Maturity) (e)
0% 10/1/02 (Escrowed to Aaa 2,000,000 1,789,720
Maturity) (e)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Bldg. Auth. Rev.: -
continued
(Cap. Appreciation) Series I:
- continued
0% 10/1/04 (Escrowed to Aaa $ 6,820,000 $ 5,496,170
Maturity) (e)
Rfdg. Series I, 6.25% 10/1/20 Aa2 1,500,000 1,522,575
Series II, 6.75% 10/1/11 Aa2 1,000,000 1,044,480
Michigan Comprehensive Trans. Aa3 1,275,000 1,319,383
Rev. Rfdg. Series B, 5.75%
5/15/04
Michigan Gen. Oblig. (Cap. Aa1 1,045,000 994,453
Appreciation) (College
Savings Prog.) 0% 8/1/01
Michigan Hosp. Fin. Auth. Rev.:
(Ascension Health Cr. Proj.)
Series A:
5.75% 11/15/18 (MBIA Insured) Aaa 5,000,000 4,904,450
6% 11/15/19 (MBIA Insured) Aaa 17,000,000 17,029,232
(Daughters of Charity Health Aa2 1,000,000 1,049,390
Sys. Proj.) 7% 11/1/21
(Pre-Refunded to 11/1/01 @
102) (e)
(Mercy Health Svcs. Proj.):
Series Q:
5.375% 8/15/26 (AMBAC Insured) Aaa 2,000,000 1,845,900
6% 8/15/08 (AMBAC Insured) Aaa 1,130,000 1,184,771
6% 8/15/10 (AMBAC Insured) Aaa 1,265,000 1,322,267
Series R:
5.25% 8/15/10 (AMBAC Insured) Aaa 2,195,000 2,188,722
5.375% 8/15/16 (AMBAC Insured) Aaa 2,500,000 2,411,825
(Presbyterian Villages Proj.):
6.4% 1/1/15 - 1,000,000 923,720
6.5% 1/1/25 - 1,225,000 1,088,008
(Saint John Hosp. & Med. Ctr.
Proj.) Series A:
6% 5/15/08 (AMBAC Insured) Aaa 1,615,000 1,720,928
6% 5/15/09 (AMBAC Insured) Aaa 1,710,000 1,829,786
Rfdg.:
(Bay Med. Ctr. Proj.) Series A3 2,880,000 2,937,600
A, 8.25% 7/1/12
(Crittenton Hosp. Proj.) A1 6,520,000 6,011,701
Series A, 5.25% 3/1/14
(Daughters of Charity Health Aa2 2,750,000 2,777,885
Sys. Proj.) 5.5% 11/1/05
(Escrowed to Maturity) (e)
(Detroit Med. Ctr. Oblig. Baa3 6,000,000 5,224,080
Group Proj.) Series A, 6.5%
8/15/18
(Genesys Reg'l. Med. Proj.) Baa2 1,000,000 1,002,290
Series A, 5.3% 10/1/11
(Escrowed to Maturity) (e)
(McLaren Oblig. Group Proj.) A1 9,250,000 8,586,313
Series A, 5.375% 10/15/13
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Hosp. Fin. Auth.
Rev.: - continued
Rfdg.: - continued
(Mercy Health Svcs. Proj.) Aa3 $ 1,250,000 $ 1,285,375
Series T, 6% 8/15/06
(Pontiac Osteopathic Hosp. Baa2 3,000,000 2,495,220
Proj.) Series A, 6% 2/1/24
(Sisters of Mercy Health Aaa 9,950,000 9,893,186
Corp. Proj.) Series P,
5.375% 8/15/14 (MBIA Insured)
Michigan Hsg. Dev. Auth.
Rental Hsg. Rev. Series B:
5.8% 4/1/19 AA- 4,650,000 4,564,905
7.55% 4/1/23 AA- 4,750,000 4,880,768
Michigan Hsg. Dev. Auth.
Single Family Mtg. Rev.:
Series A:
5.15% 12/1/26 (AMBAC Insured) Aaa 1,810,000 1,805,674
(d)
6.8% 12/1/16 AA+ 1,975,000 2,006,817
Series C:
5.95% 12/1/14 AA+ 2,500,000 2,514,400
6% 12/1/16 AA+ 2,500,000 2,520,325
Michigan Job Dev. Auth. Poll. A3 8,825,000 8,818,117
Cont. Rev. (Gen. Motors
Corp. Proj.) 5.55% 4/1/09
Michigan Muni. Bond Auth. Rev.:
(Cap. Appreciation) (Local Aaa 2,000,000 976,100
Govt. Ln. Prog.) Series CA,
0% 6/15/13 (FSA Insured)
(Local Govt. Ln. Prog.) 7.5% Aaa 65,000 66,297
11/1/09 (AMBAC Insured)
Rfdg. (Local Govt. Ln. Prog.) Aaa 6,000,000 5,767,500
Series A, 4.75% 12/1/09
(FGIC Insured)
Rfdg. (Cap. Appreciation)
(Local Govt. Ln. Prog.)
Series A:
0% 12/1/04 (FGIC Insured) Aaa 2,000,000 1,602,520
0% 12/1/05 (FGIC Insured) Aaa 1,855,000 1,409,318
0% 12/1/06 (FGIC Insured) Aaa 5,000,000 3,599,850
0% 12/1/07 (FGIC Insured) Aaa 5,340,000 3,637,180
Michigan Pub. Pwr. Agcy. Rev. A1 10,000,000 9,419,500
Rfdg. (Belle River Proj.)
Series A, 5.25% 1/1/18
Michigan South Central Pwr.
Agcy. Supply Sys. Rev. Rfdg.:
5% 11/1/09 (AMBAC Insured) Aaa 1,675,000 1,672,404
5.9% 11/1/06 (MBIA Insured) Aaa 4,510,000 4,741,543
Michigan Strategic Fund Ltd.
Oblig. Rev. Rfdg.:
(Detroit Edison Co. Proj.):
Series A, 5.55% 9/1/29 (MBIA Aaa 1,000,000 935,740
Insured) (d)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Ltd.
Oblig. Rev. Rfdg.: - continued
(Detroit Edison Co. Proj.): -
continued
Series AA, 6.4% 9/1/25 (MBIA Aaa $ 5,000,000 $ 5,181,700
Insured)
Series BB:
6.5% 2/15/16 (FGIC Insured) Aaa 1,250,000 1,295,138
7% 7/15/08 (MBIA Insured) Aaa 2,000,000 2,252,320
7% 5/1/21 (AMBAC Insured) Aaa 8,500,000 9,814,015
(Envir. Research Institute
Proj.):
6.25% 8/15/06 (Pre-Refunded - 2,660,000 2,764,166
to 8/15/02 @ 101) (e)
6.375% 8/15/12 (Pre-Refunded - 1,770,000 1,843,703
to 8/15/02 @ 101) (e)
(Ford Motor Co. Proj.) Series A1 8,250,000 9,016,013
A, 7.1% 2/1/06
Michigan Trunk Line:
Rfdg. Series A, 5.5% 11/1/16 Aa3 7,000,000 7,050,820
Series A:
5.5% 10/1/21 Aa3 9,750,000 9,712,658
5.75% 10/1/04 Aa3 3,395,000 3,523,331
Michigan Underground Storage Aaa 5,000,000 5,263,750
Tank Fin. Assurance Auth.
Rev. Rfdg. Series I, 6%
5/1/06 (AMBAC Insured)
Michigan Univ. Rev. Rfdg.:
(Univ. Hosp. Proj.) Series A, Aa2 9,000,000 9,060,390
5.75% 12/1/12
Series A, 6.25% 8/15/15 Aa2 3,145,000 3,271,366
(Pre-Refunded to 8/15/02 @
101) (e)
Mona Shores School District Aaa 2,220,000 2,504,537
School Bldg. & Site 6.75%
5/1/10 (FGIC Insured)
Northern Michigan Univ. Revs Aaa 5,500,000 5,064,455
Rfdg. 5.125% 12/1/20 (MBIA
Insured)
Okemos Pub. School District
Rfdg. (Cap. Appreciation):
0% 5/1/12 (MBIA Insured) Aaa 2,500,000 1,311,900
0% 5/1/13 (MBIA Insured) Aaa 1,700,000 835,329
Pinckney Cmnty. Schools
Livingston & Washtenaw
Counties:
5.5% 5/1/10 (FGIC Insured) Aaa 2,175,000 2,225,460
5.5% 5/1/11 (FGIC Insured) Aaa 2,350,000 2,396,389
5.5% 5/1/14 (FGIC Insured) Aaa 3,075,000 3,102,214
Plymouth-Canton Cmnty. School Aaa 2,000,000 1,681,840
District Rfdg. 4.625% 5/1/23
(FGIC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Port Huron Area School Aa2 $ 1,975,000 $ 1,312,506
District (Cap. Appreciation)
(School Bldg. Site Proj.) 0%
5/1/08 (Liquidity Facility
Michigan School Bond Ln.
Fund)
Romulus Cmnty. Schools (Cap. Aaa 3,610,000 2,677,754
Appreciation) Series I, 0%
5/1/06 (FSA Insured)
Royal Oak City School Aaa 3,000,000 2,347,530
District (Cap. Appreciation)
(School Bldg. & Site Proj.)
0% 5/1/05 (AMBAC Insured)
Royal Oak Hosp. Fin. Auth.
Rev.:
(Cap. Appreciation) (William Aa3 5,910,000 4,401,532
Beaumont Hosp. Proj.)
Series K, 0% 11/15/05
Rfdg. (William Beaumont Hosp. Aa3 4,000,000 3,886,040
Proj.) 5.5% 1/1/14
Saint Clair Shores Econ. Dev. A2 1,600,000 1,632,000
Corp. Rev. (Bon Secours
Health Sys. Proj.) Series B,
7.5% 9/1/15
Standish Sterling Cmnty. Aaa 8,900,000 8,003,592
Schools 5.15% 5/1/28 (FGIC
Insured)
Walled Lake Consolidated Aaa 3,550,000 3,602,114
School District Rfdg. 5.3%
5/1/09 (MBIA Insured)
Wayne Charter County Arpt.
Rev.:
(Detroit Metro. Arpt. Proj.) Aaa 1,500,000 1,565,340
Series B, 6.875% 12/1/11
(MBIA Insured) (d)
(Detroit Metro. Wayne County
Proj.) Series A:
5% 12/1/28 (MBIA Insured) (d) Aaa 8,400,000 7,191,492
5.25% 12/1/12 (MBIA Insured) Aaa 2,500,000 2,452,075
(d)
Rfdg. (Detroit Metro. Wayne Aaa 2,000,000 1,991,680
County Proj.) Sub Lien
Series C, 5.25% 12/1/13
(MBIA Insured)
Wayne County Bldg. Auth. A3 2,250,000 2,407,095
Series A, 8% 3/1/17
(Pre-Refunded to 3/1/02 @
102) (e)
West Ottawa Pub. School
District:
(Cap. Appreciation) (School Aaa 4,110,000 3,078,226
Bldg. & Site Proj.) 0%
5/1/06 (MBIA Insured)
(Pre-Refunded to 5/1/05 @
95.9187) (e)
Rfdg. 5.25% 5/1/10 (FGIC Aaa 2,875,000 2,900,703
Insured)
Western Michigan Univ. Rev. Aaa 2,365,000 2,149,525
Rfdg. 5.125% 11/15/22 (FGIC
Insured)
419,727,709
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - 0.7%
Puerto Rico Commonwealth Baa $ 2,800,000 $ 2,850,204
Urban Renewal & Hsg. Corp.
Rfdg. 7.875% 10/1/04
TOTAL MUNICIPAL BONDS 422,577,913
(Cost $419,254,569)
MUNICIPAL NOTES - 0.4%
MICHIGAN - 0.4%
Midland County Econ. Dev. 1,800,000 1,800,000
Rev. (Dow Chemical Co.
Proj.) Series 1993 A, 4.6%,
VRDN (c)(d) (Cost $1,800,000)
TOTAL INVESTMENT PORTFOLIO - 424,377,913
98.9%
(Cost $421,054,569)
NET OTHER ASSETS - 1.1% 4,596,986
NET ASSETS - 100% $ 428,974,899
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/LOSS
PURCHASED
40 U.S. Treasury Bond Contracts Sept. 2000 $ 3,893,750 $ (8,678)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS - 0.9%
</TABLE>
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(b) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $153,320.
(c) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 87.3% AAA, AA, A 91.0%
Baa 4.0% BBB 2.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 1.6%.
The distribution of municipal securities by revenue source, as a
percentage of total net assets, is as follows:
Health Care 24.8%
General Obligations 20.8
Escrowed/Pre-Refunded 9.7
Special Tax 9.0
Electric Utilities 8.2
Water & Sewer 6.3
Industrial Development 5.3
Others* (individually less 15.9
than 5%)
100.0%
* Includes short-term Investments and net other assets.
INCOME TAX INFORMATION
At June 30, 2000, the aggregate cost of investment securities for
income tax purposes was $421,054,569. Net unrealized appreciation
aggregated $3,323,344, of which $11,066,793 related to appreciated
investment securities and $7,743,449 related to depreciated investment
securities.
At December 31, 1999, the fund had a capital loss carryforward of
approximately $14,483,000 of which $12,527,000 and $1,956,000 will
expire on December 31, 2006 and 2007, respectively.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 424,377,913
value (cost $421,054,569) -
See accompanying schedule
Receivable for fund shares 775,613
sold
Interest receivable 5,578,145
TOTAL ASSETS 430,731,671
LIABILITIES
Payable to custodian bank $ 742,832
Payable for fund shares 271,028
redeemed
Distributions payable 586,158
Accrued management fee 132,901
Payable for daily variation 6,250
on futures contracts
Other payables and accrued 17,603
expenses
TOTAL LIABILITIES 1,756,772
NET ASSETS $ 428,974,899
Net Assets consist of:
Paid in capital $ 442,492,850
Distributions in excess of (4,880)
net interest income
Accumulated undistributed net (16,827,737)
realized gain (loss) on
investments
Net unrealized appreciation 3,314,666
(depreciation) on investments
NET ASSETS, for 38,957,428 $ 428,974,899
shares outstanding
NET ASSET VALUE, offering $11.01
price and redemption price
per share ($428,974,899
(divided by) 38,957,428
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
INTEREST INCOME $ 12,127,484
EXPENSES
Management fee $ 793,690
Transfer agent fees 178,594
Accounting fees and expenses 65,080
Non-interested trustees' 741
compensation
Custodian fees and expenses 4,630
Registration fees 21,701
Audit 14,688
Legal 5,893
Miscellaneous 136
Total expenses before 1,085,153
reductions
Expense reductions (66,056) 1,019,097
NET INTEREST INCOME 11,108,387
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (406,668)
Futures contracts 226,060 (180,608)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 5,492,563
Futures contracts (8,678) 5,483,885
NET GAIN (LOSS) 5,303,277
NET INCREASE (DECREASE) IN $ 16,411,664
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions
Custodian credits $ 4,504
Transfer agent credits 61,552
$ 66,056
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 11,108,387 $ 22,606,531
Net realized gain (loss) (180,608) (2,164,760)
Change in net unrealized 5,483,885 (32,707,350)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 16,411,664 (12,265,579)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (11,096,410) (22,606,531)
From net interest income
Share transactions Net 43,431,841 78,784,741
proceeds from sales of shares
Reinvestment of distributions 7,599,547 16,300,743
Cost of shares redeemed (52,501,510) (115,019,055)
NET INCREASE (DECREASE) IN (1,470,122) (19,933,571)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 3,845,132 (54,805,681)
IN NET ASSETS
NET ASSETS
Beginning of period 425,129,767 479,935,448
End of period (including $ 428,974,899 $ 425,129,767
distributions in excess of
net interest income of
$4,880 and $0, respectively)
OTHER INFORMATION
Shares
Sold 4,000,709 6,900,335
Issued in reinvestment of 698,173 1,441,001
distributions
Redeemed (4,839,879) (10,181,801)
Net increase (decrease) (140,997) (1,840,465)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.870 $ 11.720 $ 11.630 $ 11.300 $ 11.560
period
Income from Investment .286 G .551 .557 .571 .630 E
Operations Net interest
income
Net realized and unrealized .140 (.850) .093 .420 (.258)
gain (loss)
Total from investment .426 (.299) .650 .991 .372
operations
Less Distributions
From net interest income (.286) (.551) (.557) (.571) (.630)
In excess of net interest - - (.003) - (.002)
income
In excess of net realized - - - (.090) -
gain
Total distributions (.286) (.551) (.560) (.661) (.632)
Net asset value, end of $ 11.010 $ 10.870 $ 11.720 $ 11.630 $ 11.300
period
TOTAL RETURN B, C 3.98% (2.63)% 5.71% 9.02% 3.38%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 428,975 $ 425,130 $ 479,935 $ 457,932 $ 455,729
(000 omitted)
Ratio of expenses to average .52% A .52% .55% D .56% D .59%
net assets
Ratio of expenses to average .49% A, F .52% .55% .56% .59%
net assets after expense
reductions
Ratio of net interest income 5.29% A 4.86% 4.77% 5.08% 5.52%
to average net assets
Portfolio turnover rate 14% A 19% 24% 16% 29%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.580
period
Income from Investment .611
Operations Net interest
income
Net realized and unrealized .980
gain (loss)
Total from investment 1.591
operations
Less Distributions
From net interest income (.611)
In excess of net interest -
income
In excess of net realized -
gain
Total distributions (.611)
Net asset value, end of $ 11.560
period
TOTAL RETURN B, C 15.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 491,874
(000 omitted)
Ratio of expenses to average .59%
net assets
Ratio of expenses to average .59%
net assets after expense
reductions
Ratio of net interest income 5.49%
to average net assets
Portfolio turnover rate 29%
</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.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E NET INTEREST INCOME PER SHARE REFLECTS A PAYMENT OF APPROXIMATELY
$0.049 RECEIVED FROM AN ISSUER THAT WAS IN BANKRUPTCY.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
PERFORMANCE: THE BOTTOM LINE
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the past 10 year total return would have been
lower.
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CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY MI MUNICIPAL MONEY 1.75% 3.27% 16.41% 36.49%
MARKET
All Tax-Free Money Market 1.67% 3.13% 16.12% 35.20%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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. To measure how the fund's performance stacked up
against its peers, you can compare it to the all tax-free money market
funds average, which reflects the performance of tax-free money market
funds with similar objectives tracked by iMoneyNet, Inc. The past six
months average represents a peer group of 472 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY MI MUNICIPAL MONEY 3.27% 3.09% 3.16%
MARKET
All Tax-Free Money Market 3.13% 3.03% 3.06%
Funds Average
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.
YIELDS
7/3/00 4/3/00 1/03/00 9/27/99 6/28/99
Fidelity Michigan Municipal 4.10% 3.34% 4.24% 3.16% 2.90%
Money Market Fund
All Tax-Free Money Market 3.85% 3.11% 3.98% 3.02% 2.93%
Funds Average
Fidelity Michigan Municipal 6.70% 5.45% 6.94% 5.16% 4.74%
Money Market Fund
Tax-Equivalent
Portion of fund's income 0.00% 3.64% 2.50% 2.51% 1.04%
subject to state taxes
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the all
tax-free money market funds average as tracked by iMoneyNet, Inc. or
you can look at the fund's tax-equivalent yield, which is based on a
combined effective 2000 federal and state income tax rate of 38.82%.
The fund's yields mentioned above reflect that a portion of the fund's
income was subject to state taxes. A portion of the fund's income may
be subject to the federal alternative minimum tax.
(checkmark)COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in mind
that the U.S. government
neither insures nor guarantees
a money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Diane McLaughlin)
An interview with Diane McLaughlin, Portfolio Manager of Fidelity
Michigan Municipal Money Market Fund
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE FIRST HALF OF
2000, DIANE?
A. For most of the period, indications of robust economic growth
raised fears that inflation was on the horizon. For example, growth in
gross domestic product in the first quarter of 2000 continued at the
same vibrant pace seen in 1999. Economic activity was sustained by the
wealth effect caused by gains in the equity market, which resulted in
high consumer confidence and sustained consumer spending. Business
spending was also strong. Other data underscored the momentum of the
U.S. economy. In April, the unemployment rate fell to 3.9%, the lowest
level in 30 years. Foreign economies demonstrated strength and
increased demand for U.S. exports. This backdrop encouraged the
Federal Reserve Board to continue to raise short-term interest rates
in order to slow growth and head off inflation. The Fed raised the
rate banks charge each other for overnight loans - known as the fed
funds target rate - three times. The first two hikes each increased
the target rate by 0.25 percentage points in February and March. In
May, the Fed became more aggressive, raising short-term rates by 0.50
percentage points, bringing it to 6.50%. This move came shortly after
the employment cost index - a broad measure of the costs incurred by
businesses for wages and benefits - rose at a higher-than-expected
annual rate of 5.6% in the first quarter, up from 3.4% in 1999. In
addition, the housing market continued to be strong in spite of rising
mortgage rates. In June, however, the Fed kept rates unchanged after
seeing some indications that the economy was slowing. While price
inflation had surfaced at the consumer level - fueled by increases in
energy costs, consumer prices increased at an annual rate of 4.2%
during the first six months of the year, up from 2.8% from the prior
12 months - most price gains had been offset by productivity
improvements. Even though the Fed held off in June, it indicated it
was more likely to raise rates than lower them in the future.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. The fund maintained a shorter average maturity than its competitors
because longer-term, fixed-rate notes did not incorporate our
expectations for higher rates. Instead, the fund was overweighted in
variable-rate demand notes (VRDNs), whose yields are reset at regular
intervals. This strategy helped the fund take advantage of increasing
yields as the Fed continued to raise rates. The fund's large stake in
VRDNs particularly boosted performance in April. As is typical, in
April investors redeemed shares of money market funds to pay taxes.
Fund managers, in turn, sold VRDNs to meet redemptions. Dealers of
VRDNs were therefore forced to raise yields - in some cases as high as
levels seen in taxable markets - to attract buyers. The fund was
positioned to take advantage of these increases in yield. Toward the
end of the period, we adjusted the fund's average maturity to be
closer to neutral, as it became less certain that we would see higher
rates going forward.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 2000, was 4.05%, compared to
4.05% six months ago. The latest yield was the equivalent of a 6.62%
taxable yield for Michigan investors in the 38.82% combined federal
and state income tax bracket. Through June 30, 2000, the fund's
six-month total return was 1.75%, compared to 1.67% for the all
tax-free money market funds average, according to iMoneyNet, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. Market prices currently reflect that the Fed might raise short-term
rates by another 0.25 percentage points by the end of the year. Market
observers and the Fed will be watching economic indicators for any
sign of increased inflationary pressures or actual higher prices.
Although the Fed refrained from raising rates in June, it may increase
rates again in August if we do see more indications of inflation. I
believe the Fed may have reached the end of this latest rate-hike
program, after having raised short-term rates by a total of 1.75
percentage points since June 1999. It appears that these rate
increases are helping to slow the economy. However, the risk still
remains that the Fed might feel it necessary to raise rates again. I
plan to maintain a relatively neutral position, but will continue to
look for opportunities driven by supply and demand.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: high current tax-free
income while maintaining
a stable $1 share price by
investing in high-quality,
short-term municipal money
market securities
FUND NUMBER: 420
TRADING SYMBOL: FMIXX
START DATE: January 12,
1990
SIZE: as of June 30, 2000,
more than $429 million
MANAGER: Diane McLaughlin,
since 1997; manager,
various Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1992
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
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MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 6/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6/30/99
12/31/99
0 - 30 86.0 83.2 73.9
31 - 90 5.5 2.3 20.2
91 - 180 1.8 7.1 0.0
181 - 397 6.7 7.4 5.9
WEIGHTED AVERAGE MATURITY
6/30/00 12/31/99 6/30/99
Fidelity Michigan Municipal 33 DAYS 37 Days 38 Days
Money Market Fund
All Tax-Free Money Market 40 DAYS 47 Days 44 Days
Funds Average*
</TABLE>
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ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JUNE 30, 2000 AS OF DECEMBER 31, 1999
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 82.0% (VRDNs) 68.4%
Commercial Paper (including Commercial Paper (including
CP Mode) 7.6% CP Mode) 15.2%
Tender Bonds 0.4% Tender Bonds 1.8%
Municipal Notes 8.0% Municipal Notes 10.6%
Other Investments and Net Other Investments and Net
Other Assets 2.0% Other Assets 4.0%
Row: 1, Col: 1, Value: 82.0 Row: 1, Col: 1, Value: 68.40000000000001
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: nil
Row: 1, Col: 3, Value: 7.6 Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: nil Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.4 Row: 1, Col: 5, Value: 1.8
Row: 1, Col: 6, Value: nil Row: 1, Col: 6, Value: nil
Row: 1, Col: 7, Value: 8.0 Row: 1, Col: 7, Value: 10.6
Row: 1, Col: 8, Value: 2.0 Row: 1, Col: 8, Value: 4.0
</TABLE>
* SOURCE: IMONEYNET, INC.(registered trademark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
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MUNICIPAL SECURITIES - 101.8%
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - 101.8%
Chelsea Econ. Dev. Corp. Ltd. $ 3,760,000 $ 3,760,000
Oblig. Rev. (Silver Maples
of Chelsea Proj.) Series
1996, 4.8%, LOC Comerica
Bank, Detroit, VRDN (b)
Chippewa Valley Schools 3,410,000 3,410,000
Participating VRDN Series
MSDW 00 253, 4.9% (Liquidity
Facility Morgan Stanley Dean
Witter & Co.) (b)(e)
Clarkston Cmnty. Schools RAN 3,000,000 3,001,834
(Michigan State Aid Proj.)
4.65% 8/21/00
Clinton Econ. Dev. Corp. Rev. 3,700,000 3,700,000
(Clinton Area Care Ctr.
Proj.) 4.87%, LOC Northern
Trust Co., Chicago, VRDN (b)
Detroit Economic Dev. Corp.
Rev. (Waterfront
Reclaimation & Casino Dev.
Proj.):
Series 1999 A, 4.75%, LOC 7,530,000 7,530,000
Bank of America NA, VRDN (b)
Series 1999 B, 4.75%, LOC 4,530,000 4,530,000
Bank of America NA, VRDN (b)
Series 1999 C, 4.8%, 2,775,000 2,775,000
(Greektown Casino) LOC
Lasalle Bank NA, VRDN (b)
Detroit Swr. Disp. Rev.:
Participating VRDN:
Series BS 99 81, 4.9% 4,000,000 4,000,000
(Liquidity Facility Bear
Stearns Companies, Inc.)
(b)(e)
Series FRRI A75, 4.95% 9,400,000 9,400,000
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (b)(e)
Series Merlots 00 I, 4.89% 4,300,000 4,300,000
(Liquidity Facility First
Union Nat'l. Bank, North
Carolina) (b)(e)
Series 1998 B, 4.95% (MBIA 8,550,000 8,550,000
Insured) (BPA Morgan
Guaranty Trust Co., NY),
VRDN (b)
Detroit Wtr. Supply Sys. Rev.
Participating VRDN:
Series Merlots 00 D, 4.89% 4,500,000 4,500,000
(Liquidity Facility First
Union Nat'l. Bank, North
Carolina) (b)(e)
Series SG 64, 4.85% 3,500,000 3,500,000
(Liquidity Facility Societe
Generale) (b)(e)
Series SGB 6, 4.87% 7,570,000 7,570,000
(Liquidity Facility Societe
Generale) (b)(e)
Detroit Wtr. Sys. Rev.
Participating VRDN:
Series 992201, 4.87% 4,000,000 4,000,000
(Liquidity Facility Citibank
NA, New York) (b)(e)
Series 992202, 4.87% 8,200,000 8,200,000
(Liquidity Facility Citibank
NA, New York) (b)(e)
Genesee County Economic Dev. 2,600,000 2,600,000
Corp. (Creative Foam Corp.
Proj.) Series 1994, 4.95%,
LOC Bank One NA, Michigan,
VRDN (b)(c)
Georgetown Charter Township 1,000,000 1,000,000
Ind. Dev. Rev. (J&F Steel
Corp. Proj.) Series 1989,
4.85%, LOC Societe Generale,
VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Jackson Pub. Schools RAN:
Series 1999 B, 4% 7/6/00, LOC $ 4,750,000 $ 4,750,283
Comerica Bank, Detroit
Series A, 4.4% 8/23/00, LOC 3,000,000 3,001,279
Comerica Bank, Detroit
Series B, 5% 7/3/01, LOC 3,750,000 3,764,325
Comerica Bank, Detroit
Kent County Michigan Arpt. 6,245,000 6,245,000
Facilities Rev.
Participating VRDN Series
MSDW 98 118, 4.87%
(Liquidity Facility Morgan
Stanley Dean Witter & Co.)
(b)(e)
Macomb County Cmnty. College 3,900,000 3,909,300
District Bonds 5% 5/1/01
Michigan Gen. Oblig. 12,990,000 12,990,000
Participating VRDN Series
Putters 125, 4.82%
(Liquidity Facility J.P.
Morgan & Co., Inc.) (b)(e)
Michigan Higher Ed. Student
Ln. Auth. Rev. Rfdg.:
Series XII B, 4.8% (AMBAC 1,360,000 1,360,000
Insured) (BPA Kredietbank ),
VRDN (b)(c)
Series XII F, 4.8% (AMBAC 5,200,000 5,200,000
Insured) (BPA Kredietbank ),
VRDN (b)(c)
Michigan Hosp. Fin. Auth. Rev.:
Bonds (Henry Ford Health Sys. 3,000,000 3,060,000
Proj.) Series A, 7% 7/1/10
(Pre-Refunded to 7/1/00 @
102) (d)
Participating VRDN Series 3,700,000 3,700,000
1997 X, 4.89% (Liquidity
Facility First Union Nat'l.
Bank, North Carolina) (b)(e)
(Health Care Equip. Ln. 4,300,000 4,300,000
Prog.) Series B, 4.72%, LOC
Michigan Nat'l. Bank,
Detroit, VRDN (b)
(Hosp. Equip. Ln. Prog.) 20,000,000 20,000,000
Series A, 4.9%, LOC Nat'l.
City Bank Michigan,
Illinois, VRDN (b)
(United Memorial Hosp. Assoc. 4,000,000 4,000,000
Proj.) Series 1999, 4.87%,
LOC Huntington Nat'l. Bank,
Columbus, VRDN (b)(c)
Michigan Hsg. Dev. Auth.
Multi-family Hsg. Rev.:
Bonds Series 1988 A, 4.6% 3,550,000 3,550,000
tender 8/21/00, LOC
Landesbank Hessen-Thuringen,
CP mode (c)
(Canton Club East Apts. 4,000,000 4,000,000
Proj.) Series 1998 A, 4.85%,
LOC Key Bank Nat'l. Assoc.,
VRDN (b)(c)
(Lexington Place Aprts. 7,520,000 7,520,000
Proj.) Series 1999 A, 4.85%,
LOC Bank of America NA,
VRDN (b)(c)
Michigan Hsg. Dev. Auth.
Rental Hsg. Rev.:
Participating VRDN Series PT 4,710,000 4,710,000
38, 4.9% (Liquidity Facility
Commerzbank AG) (b)(c)(e)
Series 1997 B, 4.85%, LOC 1,350,000 1,350,000
Landesbank Hessen-Thuringen,
VRDN (b)
Michigan Hsg. Dev. Auth.
Single Family Mtg. Rev.:
Bonds Series 1999 B, 3.95%, 1,545,000 1,545,000
tender 12/1/00 (c)
Participating VRDN:
Series PA 635R, 4.9% 5,080,000 5,080,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (b)(c)(e)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Hsg. Dev. Auth.
Single Family Mtg. Rev.: -
continued
Participating VRDN: - continued
Series PT 58, 4.9% (Liquidity $ 5,375,000 $ 5,375,000
Facility Merrill Lynch &
Co., Inc.) (b)(c)(e)
Series 1999 B2, 4.9% (MBIA 4,400,000 4,400,000
Insured), VRDN (b)(c)
Series 2000 A, 4.8% (MBIA 4,400,000 4,400,000
Insured), VRDN (b)
Michigan Muni. Bond Auth. Rev.:
Bonds (Revolving Fund Proj.) 3,145,000 3,154,958
Series A, 5.4% 10/1/00
(Escrowed to Maturity) (d)
BAN:
Series 2000 B1, 5% 7/2/01 (a) 8,345,000 8,396,822
Series 2000 B2, 5% 7/2/01, 6,645,000 6,686,265
LOC Morgan Guaranty Trust
Co., NY (a)
RAN Series B1, 4.25% 8/25/00 4,100,000 4,103,861
Michigan Strategic Fund Ind.
Dev. Rev.:
(Althaus Family Investors II 2,300,000 2,300,000
Proj.) Series 1997, 4.97%,
LOC Huntington Nat'l. Bank,
Columbus, VRDN (b)
(C-Tec, Inc. Proj.) 4.9%, LOC 1,500,000 1,500,000
Suntrust Bank, VRDN (b)(c)
Michigan Strategic Fund Ltd.
Oblig. Rev.:
Participating VRDN Series PT 2,495,000 2,495,000
244, 4.85% (Liquidity
Facility BNP Paribas Sa)
(b)(e)
(B&C Leasing Proj.) 4.9%, LOC 1,350,000 1,350,000
Bank of America NA, VRDN (b)
(B&G Realty Co. Proj.) 4.9%, 2,000,000 2,000,000
LOC Bank One, Wisconsin,
VRDN (b)(c)
(BC&C Proj.) 4.95%, LOC 1,680,000 1,680,000
Comerica Bank, Detroit, VRDN
(b)(c)
(Bico Michigan, Inc. Proj.) 4,000,000 4,000,000
Series 1999, 4.95%, LOC
Bank One NA, VRDN (b)(c)
(Bosal Ind. Proj.) Series 7,500,000 7,500,000
1998, 4.85%, LOC Bank of New
York NA, VRDN (b)(c)
(Conti Properties LLC Proj.) 3,580,000 3,580,000
Series 1997, 4.95%, LOC
Comerica Bank, Detroit, VRDN
(b)(c)
(Cyberplast Inds. Ltd. Proj.) 3,675,000 3,675,000
4.85%, LOC Bank One NA,
Michigan, VRDN (b)(c)
(Doss Ind. Dev. Co. Proj.) 3,300,000 3,300,000
4.95%, LOC Bank One NA,
Michigan, VRDN (b)(c)
(Dow Chemical Co. Proj.) 500,000 500,000
Series 1999, 4.75%, VRDN
(b)(c)
(Envir. Quality Co. Proj.) 1,545,000 1,545,000
Series 1995, 4.85%, LOC
Comerica Bank, Detroit, VRDN
(b)(c)
(Fintex LLC Proj.) Series 4,400,000 4,400,000
2000, 4.95%, LOC Comerica
Bank, Detroit, VRDN (b)(c)
(Future Fence Co. Proj.) 3,500,000 3,500,000
4.95%, LOC Comerica Bank,
Detroit, VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Ltd.
Oblig. Rev.: - continued
(Grandview Plaza Riverview $ 3,025,000 $ 3,025,000
Assoc. One LP Proj.) 4.95%,
LOC Nat'l. City Bank, VRDN
(b)(c)
(Hi-Tech Mold & Engineering 500,000 500,000
Proj.) 4.95%, LOC Bank One
Na, Michigan, VRDN (b)(c)
(John H. Decker & Sons Proj.) 2,350,000 2,350,000
Series 1998, 4.8%, LOC
Michigan Nat'l. Bank,
Detroit, VRDN (b)(c)
(Majestic Ind., Inc. Proj.) 3,145,000 3,145,000
4.95%, LOC Comerica Bank,
Detroit, VRDN (b)(c)
(Mans Proj.) Series 1998, 3,115,000 3,115,000
4.95%, LOC Comerica Bank,
Detroit, VRDN (b)(c)
(Muskegen Cast Products 3,500,000 3,500,000
Proj.) 4.97%, LOC Huntington
Nat'l. Bank, Columbus, VRDN
(b)(c)
(Nat'l. Rubber Michigan, Inc. 2,400,000 2,400,000
Proj.) Series 1995, 4.8%, L
OC Nat'l. Bank of Canada,
VRDN (b)(c)
(Numaco LLC Proj.) 4.95%, LOC 5,000,000 5,000,000
Comerica Bank, Detroit, VRDN
(b)(c)
(PBL Enterprises, Inc. Proj.) 3,250,000 3,250,000
Series 1997, 4.95%, LOC
Comerica Bank, Detroit, VRDN
(b)(c)
(Rochester Gear, Inc. Proj.) 3,950,000 3,950,000
Series 1995, 4.8%, LOC
Comerica Bank, Detroit, VRDN
(b)(c)
(TEI Investments LLC Proj.) 900,000 900,000
Series 1997, 4.95%, LOC
Comerica Bank, Detroit, VRDN
(b)(c)
(The Monarch Press, Inc. 2,500,000 2,500,000
Proj.) Series 2000, 4.95%,
LOC Comerica Bank, Detroit,
VRDN (b)(c)
(The Spiratex Co. Proj.) 2,000,000 2,000,000
Series 1994, 4.95%, LOC
Bank One NA, Michigan, VRDN
(b)(c)
(Trilan LLC Proj.) 4.95%, LOC 4,000,000 4,000,000
Bank One NA, Michigan, VRDN
(b)(c)
(Ultimate Hydroforming, Inc. 200,000 200,000
Proj.) 4.95%, LOC Bank One
NA, Michigan, VRDN (b)(c)
(Unified-Boring Co., Inc. 1,300,000 1,300,000
Proj.) Series 1992, 4.95%,
LOC Bank One NA, Michigan,
VRDN (b)(c)
(Vent-Rite Valve Corp. Proj.) 1,680,000 1,680,000
4.95%, LOC Fleet Nat'l.
Bank, VRDN (b)(c)
(Wayland Enterprises Proj.) 3,000,000 3,000,000
Series 1999, 4.95%, LOC
Bank One NA, Michigan, VRDN
(b)(c)
(Windcrest Properties LLC 5,300,000 5,300,000
Proj.) 4.8%, LOC Bank One
NA, Michigan, VRDN (b)(c)
Series 1999, 4.95%, LOC 2,560,000 2,560,000
Michigan Nat'l. Bank,
Detroit, VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Poll.
Cont. Rev.:
Bonds (Dow Chemical Co.
Proj.) Series 1988:
4.2% tender 9/8/00, CP mode $ 10,450,000 $ 10,450,000
(c)
4.4% tender 10/16/00, CP mode 3,250,000 3,250,000
(c)
4.5% tender 7/13/00, CP mode 6,450,000 6,450,000
(c)
(Gen. Motors Corp. Proj.) 13,430,000 13,430,000
Series 1988 A, 4.75%, VRDN
(b)
Rfdg. (Consumers Pwr. Co. 2,200,000 2,200,000
Proj.) Series 1988 A, 4.6%
(AMBAC Insured), LOC Union
Bank of Switzerland, VRDN (b)
Michigan Strategic Fund Solid
Waste Disp. Rev.:
(Grayling Gen. Station Proj.) 6,800,000 6,800,000
Series 1990, 4.85%, LOC
Barclays Bank PLC, VRDN
(b)(c)
(Great Lakes Recovery Proj.) 2,100,000 2,100,000
4.8%, LOC Bank One NA,
Michigan, VRDN (b)(c)
Midland County Econ. Dev. 1,300,000 1,300,000
Rev. (Dow Chemical Co.
Proj.) Series 1993 A, 4.6%,
VRDN (b)(c)
Royal Oak Hosp. Fin. Auth. 6,385,000 6,592,657
Rev. Bonds (William Beaumont
Hosp. Proj.) Series D, 6.75%
1/1/20 (Pre-Refunded to
1/1/01 @ 102) (d)
Sterling Heights Econ. Dev. 4,500,000 4,500,000
Corp. Ltd. Oblig. Rev.
(Cherrywood Ctr. Assoc.
Proj.) 4.85%, LOC Comerica
Bank, Detroit, VRDN (b)(c)
Univ. of Michigan Regents
Series B:
4.4% 7/12/00, CP 4,800,000 4,800,000
4.55% 7/3/00, CP 4,400,000 4,400,000
Wayne Charter County Arpt.
Rev.:
Participating VRDN:
Series MSDW 98 108, 4.92% 4,500,000 4,500,000
(Liquidity Facility Morgan
Stanley Dean Witter & Co.)
(b)(c)(e)
Series SG 122, 4.85% 8,100,000 8,100,000
(Liquidity Facility Societe
Generale) (b)(e)
Rfdg. Series 1996 A, 4.9%, 15,310,000 15,310,000
LOC Bayerische Landesbank
Girozentrale, VRDN (b)(c)
Wayne-Westland Cmnty. Schools
Participating VRDN:
Series MSDW 98 56, 4.87% 11,135,000 11,135,000
(Liquidity Facility Morgan
Stanley Dean Witter & Co.)
(b)(e)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
MICHIGAN - CONTINUED
Wayne-Westland Cmnty. Schools
Participating VRDN: -
continued
Series MSDW 98 67, 4.87% $ 3,100,000 $ 3,100,000
(Liquidity Facility Morgan
Stanley Dean Witter & Co.)
(b)(e)
Zeeland Hosp. Fin. Auth. Rev. 5,000,000 5,000,000
Rfdg. (Zeeland Cmnty. Hosp.
Proj.) Series 1999, 4.87%,
LOC Huntington Nat'l. Bank,
Columbus, VRDN (b)
TOTAL INVESTMENT PORTFOLIO - 437,296,584
101.8%
NET OTHER ASSETS - (1.8)% (7,525,340)
NET ASSETS - 100% $ 429,771,244
Total Cost for Income Tax Purposes $ 437,296,584
</TABLE>
SECURITY TYPE ABBREVIATIONS
BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
RAN - REVENUE ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Security purchased on a delayed delivery or when-issued basis.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Security collateralized by an amount sufficient to pay interest
and principal.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 437,296,584
value - See accompanying
schedule
Cash 13,430
Receivable for investments 4,201,113
sold Regular delivery
Delayed delivery 4,250,000
Receivable for fund shares 3,338,224
sold
Interest receivable 3,626,271
Prepaid expenses 8,545
TOTAL ASSETS 452,734,167
LIABILITIES
Payable for investments $ 3,764,325
purchased Regular delivery
Delayed delivery 15,083,088
Payable for fund shares 3,871,740
redeemed
Distributions payable 30,466
Accrued management fee 137,727
Other payables and accrued 75,577
expenses
TOTAL LIABILITIES 22,962,923
NET ASSETS $ 429,771,244
Net Assets consist of:
Paid in capital $ 429,821,445
Accumulated net realized gain (50,201)
(loss) on investments
NET ASSETS, for 429,804,160 $ 429,771,244
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($429,771,244
(divided by) 429,804,160
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
INTEREST INCOME $ 8,858,176
EXPENSES
Management fee $ 825,903
Transfer agent fees 323,318
Accounting fees and expenses 41,642
Non-interested trustees' 710
compensation
Custodian fees and expenses 5,770
Registration fees 30,970
Audit 10,680
Legal 5,930
Miscellaneous 8,611
Total expenses before 1,253,534
reductions
Expense reductions (546) 1,252,988
NET INTEREST INCOME 7,605,188
NET REALIZED GAIN (LOSS) ON (25,278)
INVESTMENTS
NET INCREASE IN NET ASSETS $ 7,579,910
RESULTING FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Custodian credits $ 546
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 7,605,188 $ 11,008,136
Net realized gain (loss) (25,278) 105,550
NET INCREASE (DECREASE) IN 7,579,910 11,113,686
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (7,605,188) (11,008,136)
from net interest income
Share transactions at net 766,404,300 1,226,615,907
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 7,391,353 10,660,639
distributions from net
interest income
Cost of shares redeemed (788,678,345) (1,150,056,582)
NET INCREASE (DECREASE) IN (14,882,692) 87,219,964
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (14,907,970) 87,325,514
IN NET ASSETS
NET ASSETS
Beginning of period 444,679,214 357,353,700
End of period $ 429,771,244 $ 444,679,214
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .017 .028 .030 .031 .030
Operations Net interest
income
Less Distributions
From net interest income (.017) (.028) (.030) (.031) (.030)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 1.75% 2.82% 3.00% 3.18% 3.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 429,771 $ 444,679 $ 357,354 $ 287,940 $ 260,592
(000 omitted)
Ratio of expenses to average .57% A .58% .60% .61% .62%
net assets
Ratio of expenses to average .57% A .58% .59% D .61% .61% D
net assets after expense
reductions
Ratio of net interest income 3.48% A 2.80% 2.97% 3.14% 2.96%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .033
Operations Net interest
income
Less Distributions
From net interest income (.033)
Net asset value, end of period $ 1.000
TOTAL RETURN B, C 3.38%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 231,259
(000 omitted)
Ratio of expenses to average .63%
net assets
Ratio of expenses to average .63%
net assets after expense
reductions
Ratio of net interest income 3.32%
to average net assets
</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.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Michigan Municipal Income Fund (the income fund) is a fund of
Fidelity Municipal Trust. Fidelity Michigan Municipal Money Market
Fund (the money market fund) is a fund of Fidelity Municipal Trust II.
Each trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company.
Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts)
are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. Each fund may be affected by
economic and political developments in the state of Michigan. The
following summarizes the significant accounting policies of the income
fund and the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued 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.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned. For the money market fund, accretion of discount represents
unrealized gain until realized at the time of a security disposition
or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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
futures transactions, capital loss carryforwards and losses deferred
due to futures and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net interest income and accumulated
undistributed net realized gain (loss) on investments 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc. (FIMM), an affiliate of Fidelity
Management & Research Company (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
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the funds are recorded as interest income in the
accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS AND WHEN ISSUED SECURITIES. Each fund
may purchase or sell securities on a delayed delivery or when issued
basis. Payment and delivery may take place after the customary
settlement period for that security. The price of the underlying
securities and the date when the securities will be delivered and paid
for are fixed at the time the transaction is negotiated.The values of
the securities purchased on a delayed delivery basis are identified as
such in each applicable fund's schedule of investments. Each fund may
receive compensation for interest forgone in the purchase of a delayed
delivery security. With respect to purchase commitments, each fund
identifies securities as segregated in its records with a value at
least equal to the amount of the commitment. Losses may arise due to
changes in the value of the underlying securities or if the
counterparty does not perform under the contract, or if the issuer
does not issue the securities due to political, economic, or other
factors.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS. The income fund may use futures contracts to manage
its exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Futures contracts involve, to varying degrees, risk of loss in excess
of the futures variation margin reflected in the Statement of Assets
and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of
investments under the caption "Futures Contracts." This amount
reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the
underlying instruments or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $28,311,512 and $32,740,101, respectively.
The market value of futures contracts opened and closed during the
period amounted to $15,125,648 and $11,449,280, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus
a fixed individual fund fee rate applied to the average net assets of
each fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .0920% to .3700% for the
period. The annual individual fund fee rate is .25%. 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. For the period, the management
fees were equivalent to annualized rates of .38% of average net assets
for the income and money market funds.
SUB-ADVISER FEE. As each fund's investment sub-adviser, FIMM, a wholly
owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES. Citibank, N.A.(Citibank) is the
custodian, transfer agent and shareholder servicing agent for the
funds. Citibank has entered into a sub-contract with Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the funds' transfer and shareholder
servicing agent and accounting functions. The funds pay account fees
and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of 0.09% and 0.15% of average net assets for the
income fund and the money market fund, respectively.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market fund, along with other money market funds
advised by FMR or its affiliates, has entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company. FIDFUNDS provides limited coverage for
certain loss events including issuer default as to payment of
principal or interest and bankruptcy or insolvency of a credit
enhancement provider. The insurance does not cover losses resulting
from changes in interest rates, ratings downgrades or other market
conditions. The money market fund may be subject to a special
assessment of up to approximately 2.5 times the fund's annual gross
premium if covered losses exceed certain levels. During the period,
the money market fund paid premiums of $17,090 for the calendar year
2000 to FIDFUNDS, which are being amortized over one year.
5. EXPENSE REDUCTIONS.
Through arrangements with the funds' custodian and transfer agent,
credits realized as a result of uninvested cash balances were used to
reduce a portion of each applicable fund's expenses. For the period,
the reductions under these arrangements are shown under the caption
"Other Information" on each applicable fund's Statement of Operations.
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 Automated Service Telephone provides 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.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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 1-800-544-0240 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.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
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COLORADO
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CONNECTICUT
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DELAWARE
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FLORIDA
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GEORGIA
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ILLINOIS
One North Franklin Street
Chicago, IL
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INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
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One W. Pennsylvania Ave.
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MASSACHUSETTS
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
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Boston, MA
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MICHIGAN
280 Old N. Woodward Ave.
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29155 Northwestern Hwy.
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MINNESOTA
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MISSOURI
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Kansas City, MO
8885 Ladue Road
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NEW JERSEY
150 Essex Street
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56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
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999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
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4611 Sharon Road
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TENNESSEE
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TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
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Houston, TX
400 East Las Colinas Blvd.
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14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
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WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
Fidelity Investment Money
Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President,
Boyce I. Greer, Vice President,
Norman U. Lind, Vice President, INCOME FUND
Diane M. McLaughlin, Vice President, MONEY MARKET FUND
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
MIR-SANN-0800 08780
1.705626.102
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
Marie L. Knowles
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Citibank, N.A.
New York, NY
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Citibank, N.A.
New York, NY
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
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www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
MINNESOTA MUNICIPAL INCOME
FUND
SEMIANNUAL REPORT
JUNE 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 18 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 22 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE 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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
In stark contrast to the final six months of 1999, most major equity
market indexes posted negative returns for the first half of 2000, due
mainly to a correction in the technology sector during the second
quarter. The majority of bond markets - with the notable exception of
high yield - fared better, as Treasuries and non-Treasuries alike
benefited as a haven from the volatility of stocks and riskier
investment alternatives.
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.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. 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). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past five year and past 10
year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MN MUNICIPAL INCOME 3.83% 2.67% 28.33% 81.27%
LB Minnesota Enhanced 4.14% 2.99% 31.34% n/a*
Municipal Bond
Minnesota Municipal Debt 3.60% 0.53% 24.69% 80.82%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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 Lehman Brothers Minnesota Enhanced Municipal Bond Index - a
market value-weighted index of Minnesota investment-grade municipal
bonds with maturities of one year or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Minnesota municipal debt funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Inc. The
past six months average represents a peer group of 52 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MN MUNICIPAL INCOME 2.67% 5.11% 6.13%
LB Minnesota Enhanced 2.99% 5.60% n/a*
Municipal Bond
Minnesota Municipal Debt 0.53% 4.51% 6.10%
Funds Average
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. (Lipper calculates average annual total
returns by annualizing each fund's total return, then taking the
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
* NOT AVAILABLE
$10,000 OVER 10 YEARS
Spartan MN Muni Income LB Municipal Bond
00082 LB015
1990/06/30 10000.00 10000.00
1990/07/31 10171.12 10147.00
1990/08/31 10005.13 9999.67
1990/09/30 10091.63 10005.37
1990/10/31 10216.53 10186.86
1990/11/30 10440.46 10391.72
1990/12/31 10488.33 10436.92
1991/01/31 10576.71 10576.99
1991/02/28 10645.92 10669.01
1991/03/31 10664.01 10672.85
1991/04/30 10792.96 10814.80
1991/05/31 10901.27 10910.94
1991/06/30 10857.66 10900.14
1991/07/31 10998.71 11032.90
1991/08/31 11109.11 11178.21
1991/09/30 11189.02 11323.75
1991/10/31 11227.31 11425.66
1991/11/30 11203.14 11457.54
1991/12/31 11379.69 11703.42
1992/01/31 11429.44 11730.10
1992/02/29 11477.18 11733.85
1992/03/31 11495.40 11738.20
1992/04/30 11576.66 11842.67
1992/05/31 11703.83 11982.05
1992/06/30 11861.73 12183.11
1992/07/31 12153.57 12548.36
1992/08/31 12029.16 12426.02
1992/09/30 12057.63 12507.28
1992/10/31 11832.45 12384.34
1992/11/30 12106.08 12606.14
1992/12/31 12247.62 12734.85
1993/01/31 12434.41 12882.95
1993/02/28 12818.23 13348.93
1993/03/31 12698.61 13207.83
1993/04/30 12817.68 13341.10
1993/05/31 12904.98 13416.08
1993/06/30 13116.07 13639.99
1993/07/31 13132.58 13657.86
1993/08/31 13407.30 13942.22
1993/09/30 13599.06 14101.02
1993/10/31 13616.34 14128.23
1993/11/30 13502.07 14003.76
1993/12/31 13769.02 14299.38
1994/01/31 13928.88 14462.68
1994/02/28 13564.94 14088.10
1994/03/31 12976.09 13514.43
1994/04/30 13050.87 13629.03
1994/05/31 13140.99 13747.20
1994/06/30 13093.69 13663.20
1994/07/31 13333.58 13913.65
1994/08/31 13362.93 13961.79
1994/09/30 13189.77 13756.83
1994/10/31 12903.82 13512.51
1994/11/30 12617.51 13268.20
1994/12/31 12941.58 13560.23
1995/01/31 13318.39 13947.79
1995/02/28 13700.80 14353.39
1995/03/31 13847.31 14518.31
1995/04/30 13860.64 14535.44
1995/05/31 14241.96 14999.27
1995/06/30 14125.43 14868.77
1995/07/31 14180.84 15009.73
1995/08/31 14341.57 15200.05
1995/09/30 14447.67 15296.27
1995/10/31 14649.05 15518.68
1995/11/30 14874.92 15776.13
1995/12/31 15011.96 15927.74
1996/01/31 15106.31 16047.99
1996/02/29 15032.62 15939.67
1996/03/31 14839.91 15735.96
1996/04/30 14780.49 15691.43
1996/05/31 14777.64 15685.15
1996/06/30 14910.55 15855.96
1996/07/31 15045.02 16000.25
1996/08/31 15025.80 15996.41
1996/09/30 15187.49 16220.36
1996/10/31 15379.48 16403.81
1996/11/30 15654.87 16704.00
1996/12/31 15579.20 16633.85
1997/01/31 15603.06 16665.28
1997/02/28 15735.21 16818.27
1997/03/31 15545.06 16594.08
1997/04/30 15655.25 16732.98
1997/05/31 15868.82 16984.64
1997/06/30 16051.51 17165.53
1997/07/31 16485.27 17641.01
1997/08/31 16333.53 17475.72
1997/09/30 16517.58 17683.15
1997/10/31 16615.56 17796.86
1997/11/30 16726.26 17901.50
1997/12/31 16957.79 18162.68
1998/01/31 17099.79 18350.12
1998/02/28 17086.18 18355.63
1998/03/31 17109.61 18371.78
1998/04/30 17040.30 18288.92
1998/05/31 17276.61 18578.44
1998/06/30 17328.37 18651.64
1998/07/31 17351.66 18698.45
1998/08/31 17621.84 18987.34
1998/09/30 17813.46 19223.93
1998/10/31 17804.49 19223.54
1998/11/30 17855.30 19291.02
1998/12/31 17892.81 19339.63
1999/01/31 18070.84 19569.58
1999/02/28 17972.99 19484.06
1999/03/31 17978.49 19511.14
1999/04/30 18029.28 19559.72
1999/05/31 17924.13 19446.47
1999/06/30 17655.62 19166.44
1999/07/31 17725.25 19236.21
1999/08/31 17586.17 19082.32
1999/09/30 17589.94 19090.14
1999/10/31 17433.09 18883.21
1999/11/30 17582.51 19084.12
1999/12/31 17457.33 18941.95
2000/01/31 17365.08 18859.55
2000/02/29 17531.75 19078.32
2000/03/31 17886.47 19495.37
2000/04/30 17809.06 19380.16
2000/05/31 17701.38 19279.38
2000/06/30 18126.75 19790.00
IMATRL PRASUN SHR__CHT 20000630 20000719 142519 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Minnesota Municipal Income Fund on June 30, 1990.
As the chart shows, by June 30, 2000, the value of the investment
would have grown to $18,127 - an 81.27% increase on the initial
investment. For comparison, look at how the Lehman Brothers Municipal
Bond Index - a market value-weighted index of investment-grade
municipal bonds with maturities of one year or more - did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have grown to $19,790 - a 97.90% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond prices,
for example, generally move in
the opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31,
2000 1999 1998 1997 1996 1995
Dividend returns 2.51% 4.41% 4.80% 5.29% 5.22% 6.40%
Capital returns 1.32% -6.84% 0.71% 3.56% -1.44% 9.60%
Total returns 3.83% -2.43% 5.51% 8.85% 3.78% 16.00%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains, if
any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED JUNE 30, 2000 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.38(cents) 26.18(cents) 51.97(cents)
Annualized dividend rate 4.97% 4.94% 4.84%
30-day annualized yield 4.99% - -
30-day annualized 8.47% - -
tax-equivalent yield
DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $10.72 over the past one
month, $10.63 over the past six months and $10.73 over the past one
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. The tax-equivalent yield
shows what you would have to earn on a taxable investment to equal the
fund's tax-free yield, if you're in the 41.12% combined effective 2000
federal and state income tax bracket, but does not reflect the payment
of the alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
For the six-month period ending June
30, 2000, the municipal bond
market was one of the
best-performing debt categories in
fixed-income. Early in the period,
against a backdrop of fairly light
new issue supply, demand was driven
by investors seeking to capture muni
yields hovering in the neighborhood
of 6%, their highest level in
approximately five years. Early in
the second quarter, however, munis
took a step back as the Federal
Reserve Board continued its
campaign of pre-emptive
interest-rate hikes to combat
potential inflation. This scenario was
less than ideal for muni bonds, which
tend to be of longer maturity than
most other debt offerings and,
therefore, acutely interest-rate
sensitive. But throughout June, a
bevy of economic data indicated
that the U.S. economy was indeed in
a slowdown, and muni bonds rallied
once again. For the overall six-month
period ending June 30, 2000, the
Lehman Brothers Municipal Bond
Index - an index of over 35,000
investment-grade, fixed-rate,
tax-exempt bonds - gained
4.48%. That return outpaced the
3.99% advance of the overall
taxable-bond market, as measured
by the Lehman Brothers Aggregate
Bond Index. While Treasury and
other government bonds were
among the only sectors to outpace
municipal securities, tax-free munis
still offered competitive, if not
superior, tax-equivalent yields at
every maturity level.
(photograph of Christine Thompson)
An interview with Christine Thompson, Portfolio Manager of Spartan
Minnesota Municipal Income Fund
Q. HOW DID THE FUND PERFORM, CHRISTINE?
A. For the six-month period that ended June 30, 2000, the fund had a
total return of 3.83%. To get a sense of how the fund did relative to
its competitors, the Minnesota municipal debt funds average returned
3.60% for the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Minnesota Enhanced Municipal Bond
Index, which tracks the types of securities in which the fund invests,
returned 4.14%. For the 12-month period that ended June 30, 2000, the
fund had a total return of 2.67%. In comparison, the Minnesota
municipal debt funds average returned 0.53%, and the Lehman Brothers
index returned 2.99% for the same 12-month period.
Q. WHAT WERE SOME OF THE MAIN FORCES BEHIND THE FUND'S PERFORMANCE
OVER THE PAST SIX MONTHS?
A. In contrast to 1999, long-maturity municipal prices firmed in the
first six months of this year even as short-term interest rates
continued to rise. Toward the end of the period, investors began to
anticipate that the Federal Reserve Board's year-long campaign to
stave off inflation by raising interest rates was nearing a close.
Whether or not that actually proves to be the case will be driven by
the performance of the economy. Furthermore, demand for municipals
strengthened as bargain-hunting investors turned to them for their
attractive prices and relatively high tax-adjusted yields. In
addition, the supply of new issue municipals diminished. As a result,
municipal bond prices actually edged up a bit during the past six
months. The fund's total return was the result of better municipal
bond prices plus the income generated by its holdings.
Q. WHAT FACTORS HELPED THE FUND OUTPACE ITS PEERS DURING THE SIX-MONTH
PERIOD?
A. A key factor behind the fund's outperformance was its focus on
premium coupon bonds, which pay interest rates above face - or par -
value. One appealing aspect of premiums was that they were somewhat
insulated from unfavorable tax treatment that negatively affected the
prices of lower coupon bonds, or "discounts," as rates rose.
Q. HOW DID YOU MANAGE THE FUND'S INTEREST-RATE SENSITIVITY?
A. I managed the fund's duration - a measure of its interest-rate
sensitivity - to be in line with the municipal market as a whole, as
reflected by the Lehman Brothers Minnesota Enhanced Municipal Bond
Index. That means I didn't lengthen or shorten duration based on where
I thought interest rates would be at some point down the road.
Instead, I positioned the fund to emphasize the best value
opportunities based on their performance potential under a variety of
possible interest-rate scenarios. Given the volatility that interest
rates and the municipal bond market experienced over the past six
months, positioning the fund with neither too much nor too little
interest-rate sensitivity helped because it didn't overwhelm other
strategies I pursued.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. There weren't any specific disappointments in terms of individual
holdings or specific sectors of the municipal market. Although health
care bonds suffered in other regions of the country, Minnesota's
comparatively high-quality health care sector performed reasonably
well. I'd say that the only real disappointment was that the lack of
municipal bond issuance in Minnesota occasionally curtailed my ability
to find new opportunities for the fund. That said, I was able to add
some essential services bonds - such as water, sewer and
transportation bonds - which tend to be less sensitive to the
economy's ebbs and flows.
Q. IN TERMS OF CREDIT QUALITY, WHAT CHOICES DID YOU MAKE?
A. As of June 30, 2000, about half of the fund's investments were in
Aaa-rated bonds. The fund's focus on these higher-quality bonds
reflected the fact that I generally didn't feel that lower-quality
bonds offered enough incentive by way of additional yield for owning
them.
Q. WHAT FACTORS WILL SHAPE THE OUTLOOK FOR MUNICIPAL BONDS OVER THE
NEXT SIX MONTHS OR SO?
A. The primary factor, as always, will be the direction of interest
rates. Supply and demand also will play a role. The supply of
municipals has continued to decline in response to rising interest
rates. Many issuers now find it too expensive to issue new or
refinance old debt. As municipal bond yields rose above 6%, we saw
renewed buying from individual investors. In general, municipals were
cheap relative to Treasury securities, although they were more or less
fairly valued compared to other types of taxable bonds. To the extent
that supply remains low and demand stays firm, municipal bonds could
benefit.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: high level of current
income exempt from federal
and Minnesota personal
income taxes for Minnesota
residents by normally
investing in
investment-grade municipal
debt securities
FUND NUMBER: 082
TRADING SYMBOL: FIMIX
START DATE: November 21,
1985
SIZE: as of June 30, 2000,
more than $277 million
MANAGER: Christine
Thompson, since 1998;
manager, various Fidelity and
Spartan municipal income
funds; joined Fidelity in 1985
CHRISTINE THOMPSON ON THE
STRENGTH OF MINNESOTA'S
ECONOMY:
"In economic terms, Minnesota
continued to do well during the
first six months of the new
millennium. Although its economic
growth lagged the nation as a
whole, it continued to be one of
the Midwest's fastest-growing
economies. As evidence of
Minnesota's ongoing economic
strength, the state's
unemployment rate dropped to a
near record low and was well
below the national average. The
service and retail sectors posted
significant job growth, although the
construction industry was the
fastest-growing sector. And,
unlike most of the rest of the
nation, Minnesota's health sector
remained vibrant."
(solid bullet) At the end of the period, the
fund had 2.6% of net assets in bonds
issued by Puerto Rico. As a territory
of the United States, Puerto Rico
can issue bonds that are free from
taxes in all 50 states. When the
supply of Minnesota municipals is
limited or their prices look
expensive, the manager
occasionally invests in Puerto
Rico bonds.
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF JUNE
30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Obligations 26.1 28.9
Health Care 18.6 16.3
Education 13.6 13.1
Electric Utilities 13.6 17.3
Transportation 5.7 3.7
AVERAGE YEARS TO MATURITY AS
OF JUNE 30, 2000
6 MONTHS AGO
Years 13.7 12.6
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME REMAINING UNTIL
PRINCIPAL PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS,
WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF JUNE 30, 2000
6 MONTHS AGO
Years 6.2 6.5
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION
(MOODY'S RATINGS)
AS OF JUNE 30, 2000
Aaa 47.0%
Aa, A 47.7%
Baa 5.3%
Short-term
Investments 0.0%
Row: 1, Col: 1, Value: 47.0
Row: 1, Col: 2, Value: 38.5
Row: 1, Col: 3, Value: 47.7
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 5.3
Row: 1, Col: 6, Value: 0.0
AS OF DECEMBER 31, 1999
Aaa 51.3%
Aa, A 44.3%
Baa 4.3%
Short-term
Investments 0.1%
Row: 1, Col: 1, Value: 51.3
Row: 1, Col: 2, Value: 39.4
Row: 1, Col: 3, Value: 44.3
Row: 1, Col: 4, Value: 0.6000000000000001
Row: 1, Col: 5, Value: 4.3
Row: 1, Col: 6, Value: 0.1
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P(registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 97.3%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MINNESOTA - 94.7%
Albany Independent School Aa1 $ 1,000,000 $ 1,027,680
District #745 (School
District Cr. Enhance Prog.)
Series A, 6% 2/1/16
Anoka-Hennepin Independent Aa1 3,950,000 3,967,973
School District #11 Series
A, 5.75% 2/1/20
Chanhassen Gen. Oblig. Impt.
(Cap. Appreciation) Series D:
0% 2/1/03 (AMBAC Insured) Aaa 1,730,000 1,526,898
0% 2/1/04 (AMBAC Insured) Aaa 1,700,000 1,426,249
Cloquet Poll. Cont. Rev. BBB+ 4,345,000 3,940,307
Rfdg. (Potlach Corp. Proj.)
5.9% 10/1/26
Dakota County Hsg. & Redev. AAA 100,000 100,781
Auth. Interest For South
Saint Paul Rev. Rfdg.
(Single Family-GNMA Prog.)
Series A, 8.1% 9/1/12
Golden Valley Gen. Oblig. A- 2,500,000 2,148,725
Rev. (Covenant Retirement
Cmnty. Proj.) Series A, 5.5%
12/1/29
Hastings Independent School Aa1 5,000,000 4,487,100
District #200 Series A, 5%
2/1/22
Hennepin County Lease Rev. AA 5,000,000 5,147,500
Ctfs. of Prtn. Series A,
6.8% 5/15/17 (Pre-Refunded
to 11/15/01 @ 100) (c)
Lakeville Independent School
District #194 Rfdg. (Cap.
Appreciation):
0% 2/1/04 Aa1 3,040,000 2,550,469
0% 2/1/05 Aa1 2,810,000 2,236,844
Maple Grove Gen. Oblig. Impt. Aa2 1,120,000 1,063,630
Series A, 5.2% 2/1/17
Minneapolis & Saint Paul Hsg.
& Redev. Auth. Health Care
Sys. Rev.:
(Health One Oblig. Group Aaa 2,750,000 2,811,710
Proj.) Series A, 7.4%
8/15/11 (MBIA Insured)
(Pre-Refunded to 8/15/00 @
102) (c)
Rfdg. (Healthspan Corp. Aaa 4,500,000 3,941,505
Proj.) Series A, 4.75%
11/15/18 (AMBAC Insured)
Minneapolis Cmnty. Dev. Agcy.
Tax Increment Rev. (Cap.
Appreciation):
0% 9/1/07 (MBIA Insured) Aaa 2,860,000 1,987,185
0% 9/1/08 (MBIA Insured) Aaa 4,600,000 3,028,364
Minneapolis Gen. Oblig.:
(Cap. Appreciation) Series B:
0% 12/1/02 Aaa 790,000 704,577
0% 12/1/03 Aaa 1,000,000 847,560
0% 12/1/06 Aaa 2,355,000 1,706,150
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MINNESOTA - CONTINUED
Minneapolis Gen. Oblig.: -
continued
Rfdg.:
(Sports Arena Proj.):
5.125% 10/1/20 Aaa $ 2,565,000 $ 2,365,520
6% 4/1/06 Aaa 1,055,000 1,115,874
6% 10/1/06 Aaa 1,000,000 1,062,120
Series B, 5.1% 9/1/08 Aaa 2,000,000 2,013,580
6.15% 10/1/05 Aaa 2,000,000 2,083,860
6.25% 4/1/07 Aaa 2,000,000 2,085,100
Minneapolis Health Care
Facilities Rev. (Children's
Hosp. & Clinics Proj.)
Series A:
4.5% 8/15/01 (FSA Insured) Aaa 1,275,000 1,274,261
4.5% 8/15/02 (FSA Insured) Aaa 1,360,000 1,353,200
Minneapolis Hosp. Rev. Rfdg. Aaa 3,000,000 3,117,210
(Fairview Hosp. & Health
Care Proj.) Series A, 6.5%
1/1/11 (MBIA Insured)
Minneapolis Saint Paul Hsg. AAA 1,425,000 1,468,363
Fin. Board Rev. (Single
Family Mtg. Phase IX Proj.)
7.25% 8/1/21 (b)
Minneapolis Saint Paul Metro. Aaa 2,840,000 2,831,906
Arpts. Commission Rfdg.
Series 13, 5.25% 1/1/11 (b)
Minneapolis Saint Paul Metro.
Arpts. Commission Rev.:
Series 1999 A, 5.125% 1/1/31 Aaa 3,375,000 3,033,416
(FGIC Insured)
Series A, 5% 1/1/19 (AMBAC Aaa 4,000,000 3,643,080
Insured)
Series B:
5.25% 1/1/11 (AMBAC Insured) Aaa 3,475,000 3,459,536
(b)
5.5% 1/1/04 (FGIC Insured) (b) AAA 2,875,000 2,926,865
5.625% 1/1/13 (FGIC Insured) Aaa 1,000,000 1,013,380
(b)
Minneapolis Spl. School
District #1 Ctfs. of Prtn.:
Series A, 5.8% 2/1/10 (MBIA Aaa 2,000,000 2,079,280
Insured)
Series B, 5% 2/1/13 Aa1 2,575,000 2,494,557
5.75% 2/1/20 Aa1 4,210,000 4,225,030
Minnesota Agric. & Economic A2 3,000,000 2,978,370
Dev. Board Rev. Rfdg.
(Health Care Sys. Proj.)
Series A, 6.375% 11/15/29
Minnesota Gen. Oblig.:
(Duluth Arpt. Proj.) Series Aaa 1,000,000 1,035,510
B, 6.25% 8/1/14 (b)
Rfdg.:
4.875% 8/1/01 Aaa 2,250,000 2,262,150
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MINNESOTA - CONTINUED
Minnesota Gen. Oblig.: -
continued
Rfdg.: - continued
5.3% 8/1/10 Aaa $ 1,450,000 $ 1,460,542
4.875% 8/1/07 Aaa 1,000,000 999,010
5.2% 5/1/07 Aaa 3,750,000 3,812,813
5.8% 8/1/03 Aaa 1,000,000 1,031,930
Minnesota Higher Ed.
Facilities Auth. Rev.:
(Carleton College Proj.):
Series 3L 1, 5.75% 11/1/12 Aa2 2,000,000 2,036,880
Series 4N:
5% 11/1/18 Aa2 2,000,000 1,839,440
5.25% 11/1/04 Aa2 870,000 886,339
5.25% 11/1/05 Aa2 945,000 959,959
(Hamline Univ. Proj.) Series Baa1 600,000 597,822
5B, 5.95% 10/1/19
(MacAlester College Proj.)
Series 4C:
5.2% 3/1/08 Aa3 1,070,000 1,075,168
5.5% 3/1/12 Aa3 815,000 823,908
(Saint Thomas Univ. Proj.):
Series 3C, 6.25% 9/1/16 A2 2,310,000 2,328,388
Series 4M, 5.35% 4/1/17 A2 1,000,000 956,030
Rfdg.:
(Hamline Univ. Proj.) Series Baa1 2,000,000 2,023,180
4I, 6% 10/1/12
(MacAlester College Proj.) Aa3 2,175,000 2,231,920
Series 3J, 6.4% 3/1/22
(Pre-Refunded to 3/1/02 @
100) (c)
(Saint Johns Univ. Proj.) A3 3,500,000 3,263,680
Series 4L, 5.4% 10/1/22
(Saint Thomas Univ. Proj.):
Series 3R 1, 5.6% 10/1/15 A2 1,000,000 999,550
Series 3R 2:
5.45% 9/1/07 A2 650,000 656,695
5.6% 9/1/14 A2 4,275,000 4,286,372
Minnesota Hsg. Fin. Agcy.:
(Single Family Mtg. Prog.):
Series A, 6.95% 7/1/16 Aa1 560,000 578,838
Series B, 5.8% 7/1/25 (b) Aa1 7,000,000 6,697,600
Series E, 6.85% 1/1/24 (b) Aa1 955,000 975,265
Series H, 6.5% 1/1/26 (b) Aa1 1,615,000 1,632,184
Series A:
6.95% 2/1/14 Aa1 1,000,000 1,026,790
6.95% 8/1/17 Aa1 1,000,000 1,034,780
7.05% 8/1/27 Aa1 1,250,000 1,290,725
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MINNESOTA - CONTINUED
Minnesota Pub. Facilities
Auth. Wtr. Poll. Cont. Rev.:
Rfdg. Series A:
5% 3/1/06 Aaa $ 1,000,000 $ 1,007,010
5% 3/1/16 Aaa 1,000,000 944,650
6% 3/1/07 Aaa 2,500,000 2,652,675
Series A, 6.1% 3/1/02 Aaa 1,855,000 1,898,964
Northern Muni. Pwr. Agcy.
Elec. Sys. Rev. Rfdg.:
Series B:
4.75% 1/1/20 (AMBAC Insured) Aaa 3,500,000 3,032,120
5.5% 1/1/18 (AMBAC Insured) Aaa 4,500,000 4,371,300
5.25% 1/1/13 (FSA Insured) Aaa 1,500,000 1,492,680
5.375% 1/1/14 (FSA Insured) Aaa 8,500,000 8,452,995
Northfield College Facilities
Rev. Rfdg. (Saint Olaf
College Proj.):
6.3% 10/1/12 A3 1,455,000 1,513,229
6.4% 10/1/21 A3 1,690,000 1,722,127
Rochester Health Care
Facilities Rev.:
(Mayo Foundation Proj.):
Series A:
5.375% 11/15/18 AA+ 2,250,000 2,107,710
5.5% 11/15/27 AA+ 5,750,000 5,365,670
Series H, 6.026% 11/15/15 AA+ 13,000,000 13,219,304
Rfdg. (Mayo Foundation/Mayo
Med. Ctr. Proj.) Series I:
5.875% 11/15/08 AA+ 1,000,000 1,033,800
5.9% 11/15/09 AA+ 1,000,000 1,031,550
Saint Cloud Gen. Oblig. Rfdg. Aaa 2,165,000 2,097,539
Series B, 5% 8/1/13 (FGIC
Insured)
Saint Cloud Health Care Rev. Aaa 4,000,000 3,996,280
Rfdg. (Saint Cloud Hosp.
Group Oblig. Proj.) Series
A, 5.875% 5/1/30 (FSA
Insured)
Saint Cloud Hosp. Facilities
Rev. Rfdg. (Saint Cloud
Hosp. Proj.):
Series A, 5.5% 7/1/05 (AMBAC Aaa 995,000 1,020,761
Insured)
Series B, 5% 7/1/20 (AMBAC Aaa 1,000,000 898,250
Insured)
Saint Cloud Independent Aaa 1,000,000 1,024,960
School District #742 Rfdg.
Series A, 6.1% 2/1/10 (FGIC
Insured)
Saint Louis Park Health Care
Facilities Rev.:
Rfdg. (Healthsystem Obligated Aaa 2,750,000 2,496,368
Proj.) Series A, 5.2% 7/1/23
(AMBAC Insured)
Series B, 5.1% 7/1/13 (AMBAC Aaa 3,600,000 3,516,192
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
MINNESOTA - CONTINUED
Saint Louis Park Ind. School Aa1 $ 3,765,000 $ 3,780,324
District #283 5.75% 2/1/20
Saint Paul Gen. Oblig. (Block Aa2 2,000,000 1,687,260
39 Proj.) 4.75% 2/1/25
Saint Paul Hsg. & Redev. BBB+ 2,600,000 2,021,630
Auth. Health Care Facilities
Rev. (Regions Hosp. Proj.)
5.3% 5/15/28
Saint Paul Independent School
District #625:
(School District Cr. Enhance
Prog.):
Series A, 4.75% 2/1/16 Aa1 1,000,000 914,080
Series B, 5.8% 2/1/12 Aa1 1,200,000 1,230,828
Series C:
6.125% 2/1/03 Aa3 1,225,000 1,266,136
6.125% 2/1/04 Aa3 1,300,000 1,357,564
6.125% 2/1/05 Aa3 1,350,000 1,421,996
Saint Paul Port Auth. Energy Aaa 2,500,000 2,481,250
Park Tax Increment Rev.
Rfdg. 5% 2/1/08 (FSA Insured)
Seaway Port Auth. Duluth Ind. A1 2,750,000 2,878,205
Dev. Dock & Wharf Rev. Rfdg.
(Cargill, Inc. Proj.) Series
B, 6.8% 5/1/12 (d)
Southern Minnesota Muni. Pwr. A2 6,500,000 6,271,395
Agcy. Pwr. Supply Sys. Rev.
Rfdg. Series A, 5% 1/1/12
Stillwater Independent School Aa1 2,110,000 2,002,474
District #834 Rfdg. 5% 2/1/15
Univ. of Minnesota Gen. Aa3 12,200,000 12,169,012
Oblig. Rfdg. 4.8% 8/15/03
West Saint Paul Independent
School District #197 (Cap.
Appreciation):
0% 2/1/02 (MBIA Insured) Aaa 1,550,000 1,438,369
0% 2/1/03 (MBIA Insured) Aaa 1,180,000 1,041,468
Western Minnesota Muni. Pwr.
Agcy. Pwr. Supply Rev.:
Rfdg. Series A:
5.375% 1/1/08 (AMBAC Insured) Aaa 3,900,000 3,997,734
5.4% 1/1/09 (AMBAC Insured) Aaa 4,325,000 4,429,189
6.25% 1/1/04 (AMBAC Insured) Aaa 2,600,000 2,723,084
6.25% 1/1/05 (AMBAC Insured) Aaa 3,000,000 3,172,410
Series A 6.375% 1/1/16 Aaa 1,810,000 1,943,904
(Escrowed to Maturity) (c)
263,203,629
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - 2.6%
Puerto Rico Commonwealth Gen. Baa1 $ 1,000,000 $ 1,029,790
Oblig. Rfdg. Series A, 6%
7/1/14
Puerto Rico Commonwealth Hwy. Baa1 2,680,000 2,567,413
& Trans. Auth. Hwy. Rev.
Series Y, 5.5% 7/1/36
Puerto Rico Commonwealth Hwy.
& Trans. Auth. Trans. Rev.:
Series A, 4.75% 7/1/38 (MBIA Aaa 1,945,000 1,640,938
Insured)
Series B, 6% 7/1/31 Baa1 2,000,000 2,031,260
7,269,401
TOTAL INVESTMENT PORTFOLIO - 270,473,030
97.3%
(Cost $270,697,878)
NET OTHER ASSETS - 2.7% 7,509,548
NET ASSETS - 100% $ 277,982,578
</TABLE>
LEGEND
(a) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Security collateralized by an amount sufficient to pay interest
and principal.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Seaway Port Auth. Duluth Ind. 5/20/92 $ 2,750,000
Dev. Dock & Wharf Rev. Rfdg.
(Cargill, Inc. Proj.) Series
B, 6.8% 5/1/12
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 82.0% AAA, AA, A 78.5%
Baa 3.0% BBB 2.2%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The distribution of municipal securities by revenue source, as a
percentage of total net assets, is as follows:
General Obligations 26.1%
Health Care 18.6
Education 13.6
Electric Utilities 13.6
Transportation 5.7
Housing 5.4
Others* (individually less 17.0
than 5%)
100.0%
* INCLUDES SHORT-TERM INVESTMENTS
AND NET OTHER ASSETS.
INCOME TAX INFORMATION
At June 30, 2000, the aggregate cost of investment securities for
income tax purposes was $270,697,878. Net unrealized depreciation
aggregated $224,848, of which $5,416,115 related to appreciated
investment securities and $5,640,963 related to depreciated investment
securities.
At December 31, 1999, the fund had a capital loss carryforward of
approximately $2,562,000 all of which will expire on December 31,
2003.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 270,473,030
value (cost $270,697,878) -
See accompanying schedule
Cash 3,429,562
Receivable for fund shares 72,359
sold
Interest receivable 4,656,318
Other receivables 41,911
TOTAL ASSETS 278,673,180
LIABILITIES
Payable for fund shares $ 279,265
redeemed
Distributions payable 285,836
Accrued management fee 86,108
Other payables and accrued 39,393
expenses
TOTAL LIABILITIES 690,602
NET ASSETS $ 277,982,578
Net Assets consist of:
Paid in capital $ 281,954,565
Undistributed net interest 84,907
income
Accumulated undistributed net (3,832,046)
realized gain (loss) on
investments
Net unrealized appreciation (224,848)
(depreciation) on
investments
NET ASSETS, for 25,804,846 $ 277,982,578
shares outstanding
NET ASSET VALUE, offering $10.77
price and redemption price
per share ($277,982,578
(divided by) 25,804,846
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
$ 7,525,047
INTEREST INCOME
EXPENSES
Management fee $ 519,511
Transfer agent fees 118,211
Accounting fees and expenses 44,201
Non-interested trustees' 479
compensation
Custodian fees and expenses 3,055
Registration fees 25,272
Audit 10,879
Legal 8,014
Miscellaneous 110
Total expenses before 729,732
reductions
Expense reductions (57,491) 672,241
NET INTEREST INCOME 6,852,806
REALIZED AND UNREALIZED GAIN (537,182)
(LOSS)
Net realized gain (loss) on
investment securities
Change in net unrealized 4,077,965
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 3,540,783
NET INCREASE (DECREASE) IN $ 10,393,589
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 6,852,806 $ 14,236,223
Net realized gain (loss) (537,182) 125,847
Change in net unrealized 4,077,965 (22,008,436)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 10,393,589 (7,646,366)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (6,767,157) (14,236,223)
from net interest income
Share transactions Net 18,243,549 62,235,219
proceeds from sales of shares
Reinvestment of 5,052,752 10,605,135
distributions from net
interest income
Cost of shares redeemed (33,968,829) (77,965,144)
NET INCREASE (DECREASE) IN (10,672,528) (5,124,790)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (7,046,096) (27,007,379)
IN NET ASSETS
NET ASSETS
Beginning of period 285,028,674 312,036,053
End of period (including $ 277,982,578 $ 285,028,674
undistributed net interest
income of $84,907 and $0
respectively)
OTHER INFORMATION
Shares
Sold 1,715,682 5,579,462
Issued in reinvestment of 474,631 960,629
distributions
Redeemed (3,197,676) (7,066,801)
Net increase (decrease) (1,007,363) (526,710)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.630 $ 11.410 $ 11.330 $ 10.940 $ 11.100
period
Income from Invest- ment .264 F .511 .531 .551 .562
Operations Net interest
income
Net realized and unrealized .138 (.780) .080 .390 (.160)
gain (loss)
Total from investment .402 (.269) .611 .941 .402
operations
Less Distributions
From net interest income (.262) (.511) (.531) (.551) (.562)
In excess of net realized gain - - - - -
Total distributions (.262) (.511) (.531) (.551) (.562)
Net asset value, end of period $ 10.770 $ 10.630 $ 11.410 $ 11.330 $ 10.940
TOTAL RETURN B, C 3.83% (2.43)% 5.51% 8.85% 3.78%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 277,983 $ 285,029 $ 312,036 $ 296,607 $ 294,432
(000 omitted)
Ratio of expenses to average .53% A .53% .55% D .56% D .60%
net assets
Ratio of expenses to average .49% A, E .51% E .55% .56% .60%
net assets after expense
reductions
Ratio of net interest income 4.98% A 4.62% 4.68% 5.00% 5.15%
to average net assets
Portfolio turnover rate 15% A 21% 17% 18% 17%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.130
period
Income from Invest- ment .613
Operations Net interest
income
Net realized and unrealized .972
gain (loss)
Total from investment 1.585
operations
Less Distributions
From net interest income (.613)
In excess of net realized gain (.002)
Total distributions (.615)
Net asset value, end of period $ 11.100
TOTAL RETURN B, C 16.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 315,167
(000 omitted)
Ratio of expenses to average .57%
net assets
Ratio of expenses to average .57%
net assets after expense
reductions
Ratio of net interest income 5.69%
to average net assets
Portfolio turnover rate 49%
</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.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
F NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Minnesota Municipal Income Fund (the fund) is a fund of
Fidelity Municipal 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, as an open-end management
investment company organized as a Massachusetts business trust. The
fund may be affected by economic and political developments in the
state of Minnesota. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
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 are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities (including restricted securities) for which quotations are
not readily available are valued 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.
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."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, 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 futures, capital loss carryforwards, and losses
deferred due to futures and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Undistributed net interest income
and accumulated undistributed net realized gain (loss) on investments
may include temporary
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
book and tax basis differences which will reverse in a subsequent
period. Any taxable 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.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, restricted securities (excluding 144A
issues) amounted to $2,878,205 or 1.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $20,684,341 and $35,514,037, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a monthly 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 .0920% to .3700% for the period. The annual individual
fund fee rate is .25%. 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. For the period, the management fee was equivalent to
an annualized rate of .38% of average net assets.
SUB-ADVISER FEE. FMR, on behalf of the fund, has entered into a
sub-advisory agreement with Fidelity Investments Money Management,
Inc. (FIMM), a wholly owned subsidiary of FMR. For its services, FIMM
receives a fee from FMR of 50% of the management fee payable to FMR.
The fee is paid prior to any voluntary expense reimbursements which
may be in effect.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES. Citibank, N.A.(Citibank) is the
custodian, transfer agent and shareholder servicing agent for the
fund. Citibank has entered into a sub-contract with Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the fund's transfer and shareholder
servicing agent and accounting functions. The fund pays account fees
and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of .09% of average net assets.
5. EXPENSE REDUCTIONS.
Through arrangements with the fund's custodian and transfer agent,
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, transfer agent fees and accounting fees were reduced by
$1,428, $49,629 and $6,434, respectively, under these arrangements.
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 Automated Service Telephone provides 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.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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 1-800-544-0240 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.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
8 Montgomery Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 Old N. Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
Providence, RI
TENNESSEE
6150 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments Money
Management Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Christine J. Thompson, Vice President
Boyce I. Greer, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
Marie L. Knowles
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
MNF-SANN-0800 108535
1.705575.102
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Citibank, N.A.
New York, NY
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Citibank, N.A.
New York, NY
FIDELITY'S MUNICIPAL BOND FUNDS
Spartan(registered trademark) Arizona Municipal Income
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Massachusetts Municipal Income
Spartan Michigan Municipal Income
Spartan Minnesota Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Municipal Income
Spartan Ohio Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate
Municipal Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
OHIO MUNICIPAL INCOME
FUND
AND
FIDELITY(REGISTERED TRADEMARK)
OHIO MUNICIPAL MONEY MARKET
FUND
SEMIANNUAL REPORT
JUNE 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN OHIO MUNICIPAL INCOME
FUND
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
FIDELITY OHIO MUNICIPAL MONEY
MARKET FUND
PERFORMANCE 25 How the fund has done over
time.
FUND TALK 27 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 29 A summary of major shifts in
the fund's investments over
the past six months and one
year.
INVESTMENTS 30 A complete list of the fund's
investments.
FINANCIAL STATEMENTS 38 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 42 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
In stark contrast to the final six months of 1999, most major equity
market indexes posted negative returns for the first half of 2000, due
mainly to a correction in the technology sector during the second
quarter. The majority of bond markets - with the notable exception of
high yield - fared better, as Treasuries and non-Treasuries alike
benefited as a haven from the volatility of stocks and riskier
investment alternatives.
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.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. 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
SPARTAN OHIO MUNICIPAL INCOME FUND
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). You can also look at the fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain fund expenses, the past five year, and past 10 year
total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN OH MUNICIPAL INCOME 4.42% 2.96% 29.46% 91.42%
LB Ohio 4 Plus Year Enhanced 4.31% 2.86% 31.84% n/a*
Municipal Bond
Ohio Municipal Debt Funds 3.69% 1.04% 26.00% 86.12%
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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 Lehman Brothers Ohio 4 Plus Year Enhanced Municipal Bond Index
- a market value-weighted index of Ohio investment-grade municipal
bonds with maturities of four years or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Ohio municipal debt funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 53 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 JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN OH MUNICIPAL INCOME 2.96% 5.30% 6.71%
LB Ohio 4 Plus Year Enhanced 2.86% 5.68% n/a*
Municipal Bond
Ohio Municipal Debt Funds 1.04% 4.73% 6.40%
Average
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 the
arithmetic average. This may produce a different figure than that
obtained by averaging cumulative total returns and annualizing the
result.)
* NOT AVAILABLE
$10,000 OVER 10 YEARS
Spartan OH Muni Income LB Municipal Bond
00088 LB015
1990/06/30 10000.00 10000.00
1990/07/31 10150.33 10147.00
1990/08/31 9990.68 9999.67
1990/09/30 10067.00 10005.37
1990/10/31 10210.55 10186.86
1990/11/30 10450.35 10391.72
1990/12/31 10500.39 10436.92
1991/01/31 10616.82 10576.99
1991/02/28 10683.73 10669.01
1991/03/31 10703.31 10672.85
1991/04/30 10870.28 10814.80
1991/05/31 10959.24 10910.94
1991/06/30 10919.80 10900.14
1991/07/31 11070.20 11032.90
1991/08/31 11180.91 11178.21
1991/09/30 11313.19 11323.75
1991/10/31 11415.10 11425.66
1991/11/30 11434.95 11457.54
1991/12/31 11702.26 11703.42
1992/01/31 11723.07 11730.10
1992/02/29 11730.65 11733.85
1992/03/31 11722.00 11738.20
1992/04/30 11816.32 11842.67
1992/05/31 11976.32 11982.05
1992/06/30 12187.58 12183.11
1992/07/31 12539.54 12548.36
1992/08/31 12399.64 12426.02
1992/09/30 12473.29 12507.28
1992/10/31 12246.28 12384.34
1992/11/30 12572.60 12606.14
1992/12/31 12716.08 12734.85
1993/01/31 12882.22 12882.95
1993/02/28 13341.12 13348.93
1993/03/31 13185.28 13207.83
1993/04/30 13306.25 13341.10
1993/05/31 13373.24 13416.08
1993/06/30 13595.67 13639.99
1993/07/31 13615.84 13657.86
1993/08/31 13932.79 13942.22
1993/09/30 14099.48 14101.02
1993/10/31 14108.75 14128.23
1993/11/30 13988.77 14003.76
1993/12/31 14313.06 14299.38
1994/01/31 14487.03 14462.68
1994/02/28 14102.44 14088.10
1994/03/31 13505.74 13514.43
1994/04/30 13608.71 13629.03
1994/05/31 13701.13 13747.20
1994/06/30 13680.21 13663.20
1994/07/31 13896.46 13913.65
1994/08/31 13940.53 13961.79
1994/09/30 13770.71 13756.83
1994/10/31 13502.85 13512.51
1994/11/30 13206.30 13268.20
1994/12/31 13519.16 13560.23
1995/01/31 13924.83 13947.79
1995/02/28 14311.37 14353.39
1995/03/31 14459.32 14518.31
1995/04/30 14489.32 14535.44
1995/05/31 14915.14 14999.27
1995/06/30 14786.03 14868.77
1995/07/31 14867.65 15009.73
1995/08/31 15041.41 15200.05
1995/09/30 15160.02 15296.27
1995/10/31 15361.75 15518.68
1995/11/30 15600.87 15776.13
1995/12/31 15735.41 15927.74
1996/01/31 15855.33 16047.99
1996/02/29 15751.43 15939.67
1996/03/31 15527.93 15735.96
1996/04/30 15467.29 15691.43
1996/05/31 15449.48 15685.15
1996/06/30 15609.05 15855.96
1996/07/31 15743.85 16000.25
1996/08/31 15741.30 15996.41
1996/09/30 15989.46 16220.36
1996/10/31 16183.67 16403.81
1996/11/30 16489.19 16704.00
1996/12/31 16400.88 16633.85
1997/01/31 16440.24 16665.28
1997/02/28 16573.82 16818.27
1997/03/31 16338.64 16594.08
1997/04/30 16449.68 16732.98
1997/05/31 16679.63 16984.64
1997/06/30 16864.08 17165.53
1997/07/31 17332.16 17641.01
1997/08/31 17150.20 17475.72
1997/09/30 17351.93 17683.15
1997/10/31 17465.97 17796.86
1997/11/30 17548.37 17901.50
1997/12/31 17833.74 18162.68
1998/01/31 18010.07 18350.12
1998/02/28 17974.10 18355.63
1998/03/31 17983.24 18371.78
1998/04/30 17882.40 18288.92
1998/05/31 18154.38 18578.44
1998/06/30 18192.49 18651.64
1998/07/31 18232.74 18698.45
1998/08/31 18538.04 18987.34
1998/09/30 18795.75 19223.93
1998/10/31 18756.61 19223.54
1998/11/30 18825.87 19291.02
1998/12/31 18866.17 19339.63
1999/01/31 19115.73 19569.58
1999/02/28 18988.14 19484.06
1999/03/31 19013.55 19511.14
1999/04/30 19036.23 19559.72
1999/05/31 18914.66 19446.47
1999/06/30 18592.90 19166.44
1999/07/31 18667.61 19236.21
1999/08/31 18494.76 19082.32
1999/09/30 18517.95 19090.14
1999/10/31 18311.29 18883.21
1999/11/30 18468.73 19084.12
1999/12/31 18332.30 18941.95
2000/01/31 18240.73 18859.55
2000/02/29 18449.07 19078.32
2000/03/31 18886.40 19495.37
2000/04/30 18758.48 19380.16
2000/05/31 18650.16 19279.38
2000/06/30 19142.36 19789.90
IMATRL PRASUN SHR__CHT 20000630 20000714 084603 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Ohio Municipal Income Fund on June 30, 1990. As
the chart shows, by June 30, 2000, the value of the investment would
have grown to $19,142 - a 91.42% increase on the initial investment.
For comparison, look at how the Lehman Brothers Municipal Bond Index -
a market value-weighted index of investment-grade municipal bonds with
maturities of one year or more - did over the same period. With
dividends reinvested, the same $10,000 would have grown to $19,790 - a
97.90% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond
prices, for example,
generally move in the
opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31,
2000 1999 1998 1997 1996 1995
Dividend returns 2.58% 4.48% 4.69% 5.08% 4.98% 6.22%
Capital returns 1.84% -7.31% 1.10% 3.66% -0.75% 10.17%
Total returns 4.42% -2.83% 5.79% 8.74% 4.23% 16.39%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains if
any, paid by the fund, are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED JUNE 30, 2000 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.56(cents) 27.32(cents) 54.39(cents)
Annualized dividend rate 5.04% 5.03% 4.95%
30-day annualized yield 5.01% - -
30-day annualized 8.46% - -
tax-equivalent yield
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$11.00 over the past one month, $10.89 over the past six months and
$10.99 over the past one year, you can compare the fund's income over
these three periods. The 30-day annualized YIELD is a standard formula
for all bond funds based on the yields of the bonds in the fund,
averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. The tax-equivalent yield shows what you would have to earn on a
taxable investment to equal the fund's tax-free yield, if you're in
the 40.80% combined effective 2000 federal and state tax bracket and
reflects that a portion of the fund's income was subject to state
taxes, but does not reflect payment of the federal alternative minimum
tax, if applicable.
SPARTAN OHIO MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
For the six-month period ending June
30, 2000, the municipal bond
market was one of the
best-performing debt categories in
fixed-income. Early in the period,
against a backdrop of fairly light
new issue supply, demand was driven
by investors seeking to capture muni
yields hovering in the neighborhood
of 6%, their highest level in
approximately five years. Early in
the second quarter, however, munis
took a step back as the Federal
Reserve Board continued its
campaign of pre-emptive
interest-rate hikes to combat
potential inflation. This scenario was
less than ideal for muni bonds, which
tend to be of longer maturity than
most other debt offerings and,
therefore, acutely interest-rate
sensitive. But throughout June, a
bevy of economic data indicated
that the U.S. economy was indeed in
a slowdown, and muni bonds rallied
once again. For the overall six-month
period ending June 30, 2000, the
Lehman Brothers Municipal Bond
Index - an index of over 35,000
investment-grade, fixed-rate,
tax-exempt bonds - gained
4.48%. That return outpaced the
3.99% advance of the overall
taxable-bond market, as measured
by the Lehman Brothers Aggregate
Bond Index. While Treasury and
other government bonds were
among the only sectors to outpace
municipal securities, tax-free munis
still offered competitive, if not
superior, tax-equivalent yields at
every maturity level.
(photograph of George Fischer)
An interview with George Fischer, Portfolio Manager of Spartan Ohio
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended June 30, 2000, the fund had a
total return of 4.42%. To get a sense of how the fund did relative to
its competitors, the Ohio municipal debt funds average returned 3.69%
for the same six-month period, according to Lipper Inc. Additionally,
the Lehman Brothers Ohio 4 Plus Year Enhanced Municipal Bond Index,
which tracks the types of securities in which the fund invests,
returned 4.31%. For the 12-month period that ended June 30, 2000, the
fund had a total return of 2.96%. In comparison, the Ohio municipal
debt funds average returned 1.04% and the Lehman Brothers index
returned 2.86% for the same 12-month period.
Q. CAN YOU GIVE US SOME PERSPECTIVE ABOUT THE FACTORS THAT AFFECTED
FUND PERFORMANCE DURING THE PAST SIX MONTHS?
A. Despite the fact that the Federal Reserve Board continued to raise
interest rates in an effort to cool the economy and the stock market,
municipal bond prices ended the period higher than they began it.
That's primarily due to the fact that, at the end of the period, there
was a growing belief among investors that the Fed's interest-rate
increases might be nearing an end. That, coupled with municipals'
attractive prices and yields, helped them to rally in June. Against
that backdrop, the fund's total return was the combination of those
recent price gains plus the income generated by its holdings.
Q. WHAT HELPED THE FUND PERFORM BETTER THAN ITS PEERS AND THE LEHMAN
BROTHERS INDEX FOR THE SIX-MONTH PERIOD?
A. The fund's stake in premium coupon bonds - those that pay interest
rates above prevailing rates - was the main factor that helped the
fund outpace its benchmark and peers. Premium coupon bonds generally
outperformed discount coupon and par coupon bonds, which offer
interest rates below and at prevailing market rates, respectively.
Q. IN TERMS OF CREDIT QUALITY, WHAT WAS YOUR APPROACH?
A. I focused on higher-quality investment-grade bonds, those rated A,
Aa or Aaa. They made up 88.1% of the fund's investments at the end of
the period. Those ratings are a current assessment of the
creditworthiness of an issuer with respect to a specific bond
offering. Aaa-rated bonds, which are the highest rated, are judged to
have an extremely strong ability to pay interest and repay principal.
At the other end of the investment-grade spectrum, Baa-rated bonds,
which are the lowest of the bonds deemed investment grade, are judged
to have an adequate capacity to pay interest and principal. Bonds
rated below Baa are regarded as speculative because they face large
uncertainties or major risk exposure under adverse conditions.
Q. SPEAKING OF CREDIT QUALITY, MORE THAN HALF OF THE FUND'S NET ASSETS
WERE INVESTED IN INSURED BONDS. AREN'T THEY IMMUNE TO PRICE LOSSES?
A. No, and it's important for shareholders to realize that all
municipal bonds - including the insured variety - rise and fall with
interest-rate moves, supply and demand, and other factors. While
municipal bond insurance does not prevent price declines, it does mean
timely bond principal and interest payments are guaranteed by a
municipal bond insurer.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Hospital bonds have been a tough sector. Lower reimbursements from
third-party payors such as HMOs and the federal government caused many
hospital budgets to show losses, which in turn caused hospital bonds
to languish during much of the past six months. Despite their
short-term struggles, I held onto some bonds issued by selected
hospitals that were in good financial shape and were fundamentally
sound.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?
A. If the Federal Reserve is near the end of its campaign to cool the
economy and stave off inflationary pressures by raising interest
rates, the bond markets should benefit. If, on the other hand, the Fed
continues to push rates higher, there may be more volatility ahead. As
for the fund, I'll continue to approach the market fairly cautiously
in terms of credit quality. The economy has been good for so long that
it's easy to get lulled into complacency. We'll remain vigilant,
looking for potential problems that could occur if the economy slows.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: high current tax-free
income for Ohio residents by
normally investing in
investment-grade municipal
securities whose interest is
free from federal income tax
and Ohio personal income
tax
FUND NUMBER: 088
TRADING SYMBOL: FOHFX
START DATE: November 15,
1985
SIZE: as of June 30, 2000,
more than $351 million
MANAGER: George Fischer,
since 1997; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
GEORGE FISCHER ON THE
OHIO ECONOMY:
"During the past six months,
Ohio's economy continued to
expand at a moderate pace.
Meanwhile, the state's
unemployment rate dropped to its
lowest level in nearly 30 years. One
of the biggest contributors to Ohio's
expansion is its service sectors -
particularly financial services -
and trade industries. And, after
two years of declines,
manufacturing payrolls have
stabilized, thanks to strong
domestic and foreign demand.
Exports of goods - such as
plastics, chemicals, steel and
fabricated metal products -
accounted for roughly 8% of the
state's output and grew in response
to strengthening economies
overseas. Even though the national
economy appears to be slowing in
response to higher interest rates,
I'm optimistic about Ohio's
economy. It is more diversified
than ever, including more services
and tech, while retaining a
considerable manufacturing
base."
(solid bullet) At the end of the period, the
fund had 3.5% of net assets in bonds
issued by Puerto Rico. As a territory
of the United States, Puerto Rico
can issue bonds that are free from
taxes in all 50 states. When the
supply of Ohio municipals is limited
or their prices look expensive, the
manager occasionally invests in
Puerto Rico bonds.
SPARTAN OHIO MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF JUNE
30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Obligations 38.3 32.4
Electric Utilities 10.9 9.0
Water & Sewer 10.0 12.2
Escrowed/Pre-Refunded 8.5 12.5
Education 8.0 8.6
AVERAGE YEARS TO MATURITY AS
OF JUNE 30, 2000
6 MONTHS AGO
Years 15.2 13.3
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME REMAINING UNTIL
PRINCIPAL PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS,
WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF JUNE 30, 2000
6 MONTHS AGO
Years 7.3 7.3
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES.
IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A FIVE-YEAR DURATION IS
LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS ALSO CAN INFLUENCE
A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY, A BOND FUND'S
ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION
(MOODY'S RATINGS)
AS OF JUNE 30, 2000
Aaa 59.4%
Aa, A 28.7%
Baa 8.1%
Ba and Below 0.2%
Not Rated 2.2%
Short-term
Investments 1.4%
Row: 1, Col: 1, Value: 59.4
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 28.7
Row: 1, Col: 4, Value: 8.1
Row: 1, Col: 5, Value: 0.2
Row: 1, Col: 6, Value: 2.2
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 1.4
AS OF DECEMBER 31, 1999
Aaa 64.1%
Aa, A 26.1%
Baa 6.1%
Ba and Below 0.3%
Not Rated 2.6%
Short-term
Investments 0.8%
Row: 1, Col: 1, Value: 64.09999999999999
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 26.1
Row: 1, Col: 4, Value: 6.1
Row: 1, Col: 5, Value: 0.3
Row: 1, Col: 6, Value: 2.6
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P (registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN OHIO MUNICIPAL INCOME FUND
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 96.7%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - 93.2%
Adams County Valley Local
School District:
(Adams & Highland County Aaa $ 1,000,000 $ 1,085,820
Proj.) 6.65% 12/1/05 (MBIA
Insured)
6.65% 12/1/03 (MBIA Insured) Aaa 1,000,000 1,059,960
6.65% 12/1/04 (MBIA Insured) Aaa 1,000,000 1,073,380
Akron Gen. Oblig. (Parking A1 160,000 179,214
Facilities Proj.) 8.75%
11/1/03
Akron Wtrwks. Rev. Rfdg. Aaa 2,000,000 1,930,920
(Mtg. Impt. Proj.) 4.875%
3/1/12 (MBIA Insured)
Akron-Summit County Pub. Aaa 5,000,000 4,736,000
Library Series A, 5% 12/1/15
(FGIC Insured)
Alliance Wtrwks. Rev. (Cap. Aaa 765,000 550,609
Appreciation) 0% 10/15/06
(FGIC Insured) (Escrowed to
Maturity) (d)
Avon Lake City School Aaa 5,305,000 5,112,057
District 5.5% 12/1/26 (FGIC
Insured)
Buckeye Local School District
Rfdg. (Cap. Appreciation)
(Jefferson County Proj.):
0% 12/1/06 (AMBAC Insured) Aaa 375,000 271,170
0% 12/1/07 (AMBAC Insured) Aaa 760,000 520,273
Buckeye Valley Local School Aaa 2,500,000 2,906,950
District Delaware County
Series A, 6.85% 12/1/15
(MBIA Insured)
Butler County Sales Tax 5% Aaa 2,000,000 1,821,240
12/15/19 (AMBAC Insured)
Cincinnati Gen. Oblig. Rfdg. Aa1 5,000,000 5,059,000
(Police & Firemen's
Disability Proj.) 6% 12/1/35
Cincinnati Student Ln. Fdg.
Corp. Student Ln. Rev.:
Rfdg. Series A, 7.25% 2/1/08 A 4,000,000 4,041,720
(c)
Series A, 5.5% 12/1/01 (c) A1 2,020,000 2,022,303
Cleveland Arpt. Sys. Rev.
Series A:
5.5% 1/1/08 (FSA Insured) (c) Aaa 1,500,000 1,526,655
6% 1/1/10 (FGIC Insured) (c) Aaa 2,620,000 2,713,115
Cleveland Gen. Oblig. Rfdg.:
5.375% 9/1/11 (AMBAC Insured) Aaa 1,960,000 1,991,693
5.5% 9/1/16 (AMBAC Insured) Aaa 2,000,000 1,997,340
Cleveland Pub. Pwr. Sys. Rev.:
(Cap. Appreciation) (First
Mtg. Prog.) Series A:
0% 11/15/08 (MBIA Insured) Aaa 5,480,000 3,561,233
0% 11/15/10 (MBIA Insured) Aaa 2,685,000 1,558,428
0% 11/15/11 (MBIA Insured) Aaa 2,685,000 1,470,655
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Cleveland Pub. Pwr. Sys.
Rev.: - continued
Rfdg. (First Mtg. Prog.) Sub
Series 1:
5% 11/15/20 (MBIA Insured) Aaa $ 1,145,000 $ 1,041,240
5.125% 11/15/18 (MBIA Insured) Aaa 2,000,000 1,882,700
5.25% 11/15/14 (MBIA Insured) Aaa 1,000,000 984,810
Cleveland Wtrwks. Rev.:
(First Mtg. Prog.) Series F Aaa 125,000 128,534
92A, 6.25% 1/1/15 (AMBAC
Insured)
Rfdg. (First Mtg. Prog.) Aaa 1,000,000 1,037,870
Series F 92B, 6.25% 1/1/05
(AMBAC Insured)
Rfdg. & Impt.:
(First Mtg. Prog.) Series H:
5.75% 1/1/16 (MBIA Insured) Aaa 45,000 45,654
5.75% 1/1/16 (MBIA Insured) Aaa 2,455,000 2,596,825
(Pre-Refunded to 1/1/06 @
102) (d)
Series I:
5% 1/1/23 (FSA Insured) Aaa 9,520,000 8,504,026
5% 1/1/28 (FSA Insured) Aaa 2,100,000 1,847,139
Columbus Gen. Oblig.:
(Various Purp. Proj.) Series Aaa 1,000,000 1,059,850
1, 6% 5/15/10 (Pre-Refunded
to 5/15/04 @ 102) (d)
Rfdg. Series D, 5.25% 9/15/11 Aaa 2,000,000 2,009,060
Series 1, 5.25% 9/15/11 Aaa 2,000,000 2,009,060
Cuyahoga County Gen. Oblig.
Rfdg. (Cap. Appreciation)
Series A:
0% 10/1/08 (MBIA Insured) Aaa 4,000,000 2,615,840
0% 10/1/09 (MBIA Insured) Aaa 4,200,000 2,599,506
0% 10/1/11 (MBIA Insured) Aaa 2,400,000 1,323,096
0% 10/1/12 (MBIA Insured) Aaa 1,505,000 778,506
0% 10/1/13 (MBIA Insured) Aaa 1,500,000 726,780
Cuyahoga County Hosp. Rev. Aaa 2,000,000 1,892,160
(Univ. Hosp. Health Sys.,
Inc. Proj.) 5.4% 1/15/19
(AMBAC Insured)
Delaware City School District:
(Cap. Appreciation) 0% Aaa 1,000,000 613,610
12/1/09 (FGIC Insured)
5.5% 12/1/08 (FGIC Insured) Aaa 1,400,000 1,439,214
Delaware County Gen. Oblig.:
4.75% 12/1/24 (MBIA Insured) Aaa 4,000,000 3,411,960
6% 12/1/25 Aa2 1,000,000 1,015,310
6.25% 12/1/20 Aa2 1,250,000 1,304,363
Dublin City School District Aaa 1,930,000 1,551,102
Rfdg. (Cap. Appreciation) 0%
12/1/04 (AMBAC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Fairfield City School District:
7.1% 12/1/07 (FGIC Insured) Aaa $ 1,120,000 $ 1,256,696
7.45% 12/1/14 (FGIC Insured) Aaa 1,000,000 1,215,640
Franklin County Convention Aaa 2,000,000 1,763,240
Facilities Auth. Tax & Lease
Rev. 5% 12/1/27 (MBIA
Insured)
Franklin County Gen. Oblig.:
Rfdg. 5.375% 12/1/20 Aaa 2,000,000 1,921,900
5.5% 12/1/15 Aaa 1,225,000 1,231,542
5.5% 12/1/16 Aaa 1,290,000 1,288,310
Franklin County Gen. Oblig.
Rev. (Online Computer
Library Ctr., Inc. Proj.):
6% 4/15/13 - 3,500,000 3,529,540
7.2% 7/15/06 (Pre-Refunded to - 1,000,000 1,026,940
7/15/01 @ 100) (d)
Franklin County Hosp. Rev.:
(Ohio Doctors Health Corp. Baa3 5,000,000 3,601,400
Proj.) Series A, 5.6% 12/1/28
Rfdg. (Holy Cross Health Sys. Aa3 1,000,000 980,320
Corp. Proj.) 5.875% 6/1/21
Gallia County Hosp. Aaa 3,000,000 2,913,150
Facilities Rev. (Holzer Med.
Ctr. Proj.) 5.125% 10/1/13
(AMBAC Insured)
Gateway Economic Dev. Corp. - 3,000,000 2,964,750
Greater Cleveland Stadium
Rev. Series 1990, 6.5%
9/15/14 (c)
Greater Cleveland Reg'l. Aaa 1,800,000 1,890,576
Trans. Auth. 5.65% 12/1/16
(FGIC Insured) (Pre-Refunded
to 12/1/06 @ 101) (d)
Greene County Gen. Oblig. Aaa 2,305,000 2,272,062
Rev. Rfdg. (Fairview
Extended Proj.) Series B,
4.5% 1/1/11 (MBIA Insured)
Greene County Swr. Sys. Rev. Aaa 775,000 475,548
(Cap. Appreciation) 0%
12/1/09 (AMBAC Insured)
Greene County Wtr. Sys. Rev. Aaa 2,500,000 2,589,400
Series A, 6% 12/1/16 (FGIC
Insured)
Hamilton County Gen. Oblig.:
5.25% 12/1/15 Aa2 1,795,000 1,768,434
5.25% 12/1/16 Aa2 1,900,000 1,838,649
5.25% 12/1/17 Aa2 2,005,000 1,933,642
Hamilton County Health Care
Sys. Rev. (Sisters of
Charity Health Care Proj.)
Series A:
6.25% 5/15/08 (AMBAC Insured) Aaa 4,220,000 4,426,231
(Pre-Refunded to 5/15/03 @
101) (d)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Hamilton County Health Care
Sys. Rev. (Sisters of
Charity Health Care Proj.)
Series A: - continued
6.25% 5/15/14 (AMBAC Insured) Aaa $ 1,000,000 $ 1,048,870
(Pre-Refunded to 5/15/03 @
101) (d)
Hamilton County Health Sys. Baa2 5,000,000 5,297,050
Rev. Rfdg. (Providence
Hosp./Franciscan Sisters
Poor Health Sys. Proj.)
6.875% 7/1/15 (Pre-Refunded
to 7/1/02 @ 102) (d)
Hamilton County Swr. Sys. Aaa 5,000,000 4,986,800
Rev. (Metro. Swr. District
Proj.) Series A, 5.75%
12/1/25 (MBIA Insured)
Hamilton Elec. Sys. Mtg. Rev.
Rfdg. Series A:
6% 10/15/09 (FGIC Insured) Aaa 2,920,000 3,029,500
6% 10/15/12 (FGIC Insured) Aaa 2,000,000 2,060,260
Hilliard School District:
(Cap. Appreciation) 0% Aaa 3,720,000 2,032,794
12/1/11 (FGIC Insured)
Series A, 6% 12/1/05 (FGIC Aaa 1,415,000 1,493,122
Insured)
5.75% 12/1/28 (FGIC Insured) Aaa 3,005,000 3,001,063
Kings Local School District AA- 6,800,000 6,945,520
6.1% 12/1/25
Lakewood Gen. Oblig. Series A:
6.6% 12/1/08 Aa3 1,525,000 1,670,104
6.6% 12/1/11 Aa3 1,630,000 1,813,391
Lakota Local School District
Rfdg. (Cap. Appreciation):
0% 12/1/00 Aa3 625,000 613,875
0% 12/1/01 A1 590,000 553,385
0% 12/1/02 A1 555,000 494,638
0% 12/1/03 A1 260,000 220,147
0% 12/1/04 Aa3 730,000 586,686
0% 12/1/05 Aa3 690,000 526,160
0% 12/1/06 Aa3 650,000 470,028
0% 12/1/07 Aa3 610,000 417,588
Lima Swr. Sys. Rev. Rfdg. & Aaa 2,500,000 2,611,200
Impt. 6.3% 12/1/12 (AMBAC
Insured)
Lowellville San. Swr. Sys. BB- 800,000 807,384
Rev. (Browning-Ferris
Industries, Inc. Proj.)
7.25% 6/1/06 (c)
Lucas County Hosp. Rev. Rfdg.
(Promedia Health Care Oblig.
Group Proj.):
5.375% 11/15/23 (AMBAC Aaa 5,000,000 4,686,900
Insured)
5.625% 11/15/12 (AMBAC Aaa 2,000,000 2,033,480
Insured)
5.625% 11/15/13 (AMBAC Aaa 1,200,000 1,217,040
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Marion County Hosp. Impt.
Rev. Rfdg. (Cmnty. Hosp.
Proj.):
5.7% 5/15/02 BBB+ $ 1,500,000 $ 1,484,310
5.8% 5/15/03 BBB+ 1,825,000 1,796,640
6.1% 5/15/06 BBB+ 1,000,000 966,840
Medina City School District Aaa 11,460,000 10,617,456
5.25% 12/1/28 (FGIC Insured)
Mentor Exempted Village
School District Rfdg. (Cap.
Appreciation):
0% 12/1/00 (MBIA Insured) Aaa 755,000 741,561
0% 12/1/01 (MBIA Insured) Aaa 795,000 745,662
0% 12/1/03 (MBIA Insured) Aaa 840,000 711,245
Middleburg Heights Hosp. Rev. A2 2,000,000 2,095,020
(Southwest Gen. Hosp. Proj.)
7.2% 8/15/19 (Pre-Refunded
to 8/15/01 @ 102) (d)
Montgomery County Rev. Aa3 2,000,000 1,990,320
(Catholic Health Initiatives
Proj.) Series A, 6% 12/1/19
Montgomery County Solid Waste Aaa 1,940,000 2,039,988
Rev. Rfdg. 6% 11/1/05 (MBIA
Insured)
Newark Gen. Oblig. (Cap. Aaa 455,000 311,479
Appreciation) (Wtr. Sys.
Impt. Proj.) 0% 12/1/07
(AMBAC Insured)
North Canton School District Aaa 2,000,000 2,122,020
Impt. 5.9% 12/1/14 (AMBAC
Insured) (Pre-Refunded to
12/1/04 @ 102) (d)
Northeast Ohio Reg'l. Swr. Aaa 1,000,000 1,054,290
District Wastewtr. Rev.
Rfdg. 6.25% 11/15/04 (AMBAC
Insured)
Ohio Air Quality Dev. Auth.
Rev.:
(Columbus & Southern Pwr. Co. Aaa 3,000,000 3,092,730
Proj.) Series A, 6.375%
12/1/20 (FGIC Insured)
Rfdg.:
(Dayton Pwr. & Lt. Co. Proj.) A3 4,000,000 3,871,680
6.1% 9/1/30
(Ohio Edison Co. Proj.) Baa3 5,000,000 4,917,950
Series A, 4.25%, tender
6/1/01
Ohio Bldg. Auth.:
(Administration Bldg. Fund Aa2 1,000,000 983,250
Prog.) Series A, 4.875%
10/1/10
(Ohio Ctr. for the Arts Aa2 1,300,000 1,342,185
Proj.) Series A, 5.45%
10/1/07
(State Correctional Aa2 1,000,000 957,090
Facilities Proj.) Series A,
5.25% 10/1/17
Rfdg. (State Correctional Aa2 1,125,000 1,165,388
Facilities Proj.) Series A,
5.7% 10/1/04
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Ohio Bldg. Auth.: - continued
Series A, (W. Green Bldg. A2 $ 4,620,000 $ 4,291,287
Proj.) 4.75% 4/1/14
Ohio Cap. Corp. for Hsg. AAA 1,000,000 1,024,660
Multi-family Rev. Rfdg.
Series A, 7.5% 1/1/24
Ohio Higher Edl. Facilities
Rev.:
(Case Western Reserve Univ.
Proj.):
Series B, 6.5% 10/1/20 Aa2 2,250,000 2,475,810
Series C, 5.125% 10/1/17 Aa2 2,985,000 2,816,079
6% 10/1/22 Aa2 650,000 662,974
Rfdg. (Case Western Reserve
Univ. Proj.):
6% 10/1/14 Aa2 1,500,000 1,606,680
6.125% 10/1/15 Aa2 2,000,000 2,155,240
6.25% 10/1/16 Aa2 2,500,000 2,713,125
Series II, 5.9% 12/1/06 Aaa 1,000,000 1,032,860
(AMBAC Insured)
Ohio Higher Edl. Facility Rev.:
(Denison Univ. Proj.) 5.3% A1 3,775,000 3,553,898
11/1/21
Rfdg. (Oberling College AA 3,000,000 2,607,210
Proj.) 5% 10/1/29
Ohio Hsg. Fin. Agcy. Mtg.
Rev. (Residential Proj.):
Series A1, 5.3% 9/1/26 (c) AAA 1,210,000 1,212,372
Series B2, 5.375% 9/1/19 (c) AAA 3,150,000 3,149,654
Series C, 4.9% 9/1/26 (c) AAA 1,315,000 1,302,889
Ohio Hwy. Gen. Oblig.:
(College Savings Prog.):
0% 8/1/09 Aa1 2,290,000 1,429,647
0% 8/1/10 Aa1 2,000,000 1,178,560
0% 8/1/14 Aa1 1,375,000 631,318
6.15% 8/1/10 (Pre-Refunded to Aa1 3,530,000 3,797,539
8/1/05 @ 102) (d)
6.65% 8/1/05 Aa1 3,000,000 3,246,030
(Infrastructure Impt. Proj.):
6.5% 9/1/01 Aa1 1,000,000 1,022,600
6.65% 9/1/09 Aa1 1,000,000 1,087,530
Ohio Poll. Cont. Rev. Aa2 3,100,000 3,456,717
(Standard Oil Co.- BP
Petrolium Proj.) 6.75%
12/1/15
Ohio Pub. Facilities
Commission Rev.:
(Higher Ed. Facilities Proj.) Aaa 2,000,000 2,069,020
Series II A, 6.3% 5/1/03
(AMBAC Insured)
(Pre-Refunded to 5/1/01 @
102) (d)
(Mental Health Cap. Aaa 2,600,000 2,565,654
Facilities Proj.) Series II
B, 5.125% 6/1/11 (FSA
Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Ohio Tpk. Commission Tpk. Rev.:
Rfdg. Series A, 5.5% 2/15/21 Aaa $ 5,000,000 $ 4,932,750
(FGIC Insured)
Series A:
5.6% 2/15/12 (MBIA Insured) Aaa 2,840,000 2,903,332
5.7% 2/15/13 (MBIA Insured) Aaa 2,660,000 2,724,106
6% 2/15/06 (FSA Insured) Aaa 1,000,000 1,051,560
Ohio Univ. Gen. Receipts Aa2 3,300,000 3,281,817
Series A, 5.8% 12/1/29
Ohio Wtr. Dev. Auth. Poll.
Cont. Rev. (Wtr. Cont. Ln.
Fund Prog.):
State Match Series, 6.5% Aaa 2,735,000 2,942,313
12/1/05 (MBIA Insured)
Wtr. Quality Series, 5.125% Aaa 4,000,000 3,739,520
6/1/19 (MBIA Insured)
Ohio Wtr. Dev. Auth. Rev.:
(Pure Wtr. Proj.) Series I, Aaa 1,685,000 1,748,979
6% 12/1/16 (AMBAC Insured)
(Escrowed to Maturity) (d)
Rfdg. & Impt. (Pure Wtr. Aaa 2,500,000 2,462,600
Proj.) 5.5% 12/1/18 (AMBAC
Insured)
Ohio Wtr. Dev. Auth. Solid A1 6,350,000 6,420,866
Waste Disp. Rev. (North Star
BHP Steel/Cargill Proj.)
6.3% 9/1/20 (c)
Ottawa County San. Swr. Sys. Aaa 1,445,000 1,053,737
Rev. Rfdg. (Cap.
Appreciation) (Danbury
Proj.) 0% 10/1/06 (AMBAC
Insured)
Pickerington Local School Aaa 1,000,000 1,058,130
District Construction &
Impt. 5.8% 12/1/09 (FGIC
Insured)
Plain Local School District Aaa 2,500,000 2,545,125
Rfdg. 6% 12/1/25 (FGIC
Insured)
Portage County Hosp. Rev. Aaa 1,080,000 1,135,555
(Robinson Memorial Hosp.
Proj.) 6.5% 11/15/03 (MBIA
Insured)
Scioto County Marine Term. Baa1 3,000,000 2,724,600
Facilities Rev. Rfdg.
(Norfolk Southern Corp.
Proj.) 5.3% 8/15/13
Southwestern City School Aaa 1,000,000 1,047,340
District Franklin & Pickway
County Rfdg. Series A, 6.2%
12/1/06 (AMBAC Insured)
Springboro Cmnty. City School Aaa 915,000 661,655
District Rfdg. (Cap.
Appreciation) 0% 12/1/06
(AMBAC Insured)
Summit County Gen. Oblig. 6% Aaa 1,500,000 1,540,455
12/1/21 (FGIC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Toledo Gen. Oblig.:
5.5% 12/1/08 (FGIC Insured) Aaa $ 1,000,000 $ 1,036,130
5.5% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,035,840
6.1% 12/1/14 (AMBAC Insured) Aaa 1,750,000 1,820,963
7.625% 12/1/04 (AMBAC Insured) Aaa 1,000,000 1,109,600
Warren County Gen. Oblig.:
Swr. Impt. (P&G Co./Lower Aa2 1,455,000 1,453,094
Miami Proj.) 5.5% 12/1/16
6.1% 12/1/12 Aa2 500,000 528,850
6.65% 12/1/11 Aa2 500,000 551,015
Westlake City School District Aa3 1,060,000 1,128,084
Series A, 6.15% 12/1/05
Wyoming City School District Aaa 1,680,000 1,494,041
Series B, 5% 12/1/23 (FGIC
Insured)
327,341,419
PUERTO RICO - 3.5%
Puerto Rico Commonwealth Hwy. Aaa 1,000,000 980,290
& Trans. Auth. Hwy. Rev.
Series Y, 5.5% 7/1/36 (FSA
Insured)
Puerto Rico Commonwealth Hwy. Baa1 3,250,000 2,715,993
& Trans. Auth. Trans. Rev.
Series A, 4.75% 7/1/38
Puerto Rico Commonwealth Aaa 2,810,000 2,536,587
Infrastructure Fing. Auth.
Spl. Tax Rev. Series A, 5%
7/1/28 (AMBAC Insured)
Puerto Rico Elec. Pwr. Auth.
Pwr. Rev.:
Rfdg. Series EE, 4.75% 7/1/24 Baa1 5,000,000 4,289,350
Series DD, 5% 7/1/28 (MBIA Aaa 2,000,000 1,805,400
Insured)
12,327,620
TOTAL MUNICIPAL BONDS 339,669,039
(Cost $339,972,720)
</TABLE>
MUNICIPAL NOTES - 1.4%
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - 1.4%
Ohio Air Quality Dev. Auth.
Rev.:
(Cincinnati Gas & Elec. Co. $ 1,600,000 $ 1,600,000
Proj.) Series 1985 B, 4.75%,
LOC Morgan Guaranty Trust
Co., NY, VRDN (b)
Rfdg.:
(Cincinnati Gas & Elec. Co. 1,400,000 1,400,000
Proj.) Series A, 4.5%, LOC
ABN-AMRO Bank NV, VRDN (b)
(Toledo Edison Co. Proj.) 2,000,000 2,000,000
Series 2000 A, 4.55%, LOC
Barclays Bank PLC, VRDN (b)
TOTAL MUNICIPAL NOTES 5,000,000
(Cost $5,000,000)
TOTAL INVESTMENT PORTFOLIO - 344,669,039
98.1%
(Cost $344,972,720)
NET OTHER ASSETS - 1.9% 6,756,231
NET ASSETS - 100% $ 351,425,270
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.4% AAA, AA, A 77.7%
Baa 6.8% BBB 5.9%
Ba 0.0% BB 1.7%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 2.2%.
The distribution of municipal securities by revenue source, as a
percentage of total net assets, is as follows:
General Obligations 38.3%
Electric Utilities 10.9
Water & Sewer 10.0
Escrowed/Pre-Refunded 8.5
Education 8.0
Health Care 7.5
Transportation 5.3
Others* (individually less 11.5
than 5%)
100.0%
* Includes short-term investments
and net other assets.
INCOME TAX INFORMATION
At June 30, 2000, the aggregate cost of investment securities for
income tax purposes was $344,972,720. Net unrealized depreciation
aggregated $303,681, of which $6,813,802 related to appreciated
investment securities and $7,117,483 related to depreciated investment
securities.
SPARTAN OHIO MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 344,669,039
value (cost $344,972,720) -
See accompanying schedule
Receivable for investments 4,244,707
sold
Receivable for fund shares 119,730
sold
Interest receivable 3,787,309
TOTAL ASSETS 352,820,785
LIABILITIES
Payable to custodian bank $ 560,218
Payable for fund shares 294,930
redeemed
Distributions payable 420,524
Accrued management fee 109,198
Other payables and accrued 10,645
expenses
TOTAL LIABILITIES 1,395,515
NET ASSETS $ 351,425,270
Net Assets consist of:
Paid in capital $ 353,341,505
Undistributed net interest 29,557
income
Accumulated undistributed net (1,642,111)
realized gain (loss) on
investments
Net unrealized appreciation (303,681)
(depreciation) on investments
NET ASSETS, for 31,781,627 $ 351,425,270
shares outstanding
NET ASSET VALUE, offering $11.06
price and redemption price
per share ($351,425,270
(divided by) 31,781,627
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
INTEREST INCOME $ 9,603,142
EXPENSES
Management fee $ 653,889
Transfer agent fees 146,381
Accounting fees and expenses 57,113
Non-interested trustees' 615
compensation
Custodian fees and expenses 3,987
Registration fees 19,105
Audit 14,946
Legal 3,963
Miscellaneous 241
Total expenses before 900,240
reductions
Expense reductions (56,515) 843,725
NET INTEREST INCOME 8,759,417
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (1,177,507)
Futures contracts (39,065) (1,216,572)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 7,529,784
Futures contracts 54,065 7,583,849
NET GAIN (LOSS) 6,367,277
NET INCREASE (DECREASE) IN $ 15,126,694
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions: Custodian $ 1,867
credits
Transfer agent credits 51,230
Accounting credits 3,418
$ 56,515
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 8,759,417 $ 18,117,795
Net realized gain (loss) (1,216,572) 383,528
Change in net unrealized 7,583,849 (29,483,123)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 15,126,694 (10,981,800)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,737,994) (18,117,795)
From net interest income
From net realized gain - (383,528)
In excess of net realized - (392,840)
gain
TOTAL DISTRIBUTIONS (8,737,994) (18,894,163)
Share transactions Net 24,632,173 69,846,503
proceeds from sales of shares
Reinvestment of distributions 5,996,214 13,297,374
Cost of shares redeemed (38,565,102) (96,460,366)
NET INCREASE (DECREASE) IN (7,936,715) (13,316,489)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (1,548,015) (43,192,452)
IN NET ASSETS
NET ASSETS
Beginning of period 352,973,285 396,165,737
End of period (including $ 351,425,270 $ 352,973,285
undistributed net interest
income of $29,557 and $0,
respectively)
OTHER INFORMATION
Shares
Sold 2,265,427 6,106,427
Issued in reinvestment of 549,672 1,172,502
distributions
Redeemed (3,544,266) (8,525,683)
Net increase (decrease) (729,167) (1,246,754)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.860 $ 11.740 $ 11.720 $ 11.430 $ 11.590
period
Income from Investment .274 F .536 .538 .554 .560
Operations Net interest
income
Net realized and unrealized .199 (.857) .125 .413 (.090)
gain (loss)
Total from investment .473 (.321) .663 .967 .470
operations
Less Distributions
From net interest income (.273) (.536) (.538) (.554) (.560)
From net realized gain - (.011) (.105) (.105) (.070)
In excess of net realized gain - (.012) - (.018) -
Total distributions (.273) (.559) (.643) (.677) (.630)
Net asset value, end of $ 11.060 $ 10.860 $ 11.740 $ 11.720 $ 11.430
period
TOTAL RETURN B, C 4.42% (2.83)% 5.79% 8.74% 4.23%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 351,425 $ 352,973 $ 396,166 $ 388,907 $ 381,626
(000 omitted)
Ratio of expenses to average .52% A .52% .55% D .56% D .59%
net assets
Ratio of expenses to average .49% A, E .51% E .55% .56% .59%
net assets after expense
reductions
Ratio of net interest income 5.06% A 4.71% 4.58% 4.83% 4.93%
to average net assets
Portfolio turnover rate 30% A 14% 19% 15% 43%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.520
period
Income from Investment .618
Operations Net interest
income
Net realized and unrealized 1.070
gain (loss)
Total from investment 1.688
operations
Less Distributions
From net interest income (.618)
From net realized gain -
In excess of net realized gain -
Total distributions (.618)
Net asset value, end of $ 11.590
period
TOTAL RETURN B, C 16.39%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 404,443
(000 omitted)
Ratio of expenses to average .58%
net assets
Ratio of expenses to average .58%
net assets after expense
reductions
Ratio of net interest income 5.52%
to average net assets
Portfolio turnover rate 48%
</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.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
F NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. 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). Yield measures the income paid
by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had
not reimbursed certain fund expenses, the past 10 year total returns
would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY OH MUNICIPAL MONEY 1.75% 3.28% 16.85% 37.52%
MARKET
Ohio Tax-Free Money Market 1.68% 3.14% 16.42% 36.07%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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. To measure how the fund's performance stacked up
against its peers, you can compare it to the Ohio tax-free money
market funds average, which reflects the performance of Ohio tax-free
money market funds with similar objectives tracked by iMoneyNet, Inc.
The past six months average represents a peer group of 13 mutual
funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY OH MUNICIPAL MONEY 3.28% 3.16% 3.24%
MARKET
Ohio Tax-Free Money Market 3.14% 3.08% 3.13%
Funds Average
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.
YIELDS
7/3/00 4/3/00 1/3/00 9/27/99 6/28/99
Fidelity Ohio Municipal 3.97% 3.43% 4.16% 3.09% 2.95%
Money Market Fund
Ohio Tax-Free Money Market 3.83% 3.17% 4.04% 3.01% 2.90%
Funds Average
Ohio Municipal Money Market 6.71% 5.81% 7.03% 5.22% 4.98%
Tax-equivalent
Portion of fund's income 0.00% 0.54% 0.00% 0.00% 0.96%
subject to state taxes
Ohio Municipal
Money Market
Fund
Ohio Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 3.97
Row: 1, Col: 2, Value: 3.83
Row: 2, Col: 1, Value: 3.43
Row: 2, Col: 2, Value: 3.17
Row: 3, Col: 1, Value: 4.159999999999999
Row: 3, Col: 2, Value: 4.04
Row: 4, Col: 1, Value: 3.09
Row: 4, Col: 2, Value: 3.01
Row: 5, Col: 1, Value: 2.95
Row: 5, Col: 2, Value: 2.9
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the Ohio
tax-free money market funds average as tracked by iMoneyNet, Inc. or
you can look at the fund's tax-equivalent yield, which is based on a
combined effective 2000 federal and state income tax rate of 40.80%.
The fund's yields mentioned above reflect that a portion of the fund's
income was subject to states taxes. A portion of the fund's income may
be subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
(checkmark)COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in
mind that the U.S. government
neither insures nor guarantees
a money market fund. And
there is no assurance that a
money fund will maintain a $1
share price.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Norm Lind)
NOTE TO SHAREHOLDERS: Norm Lind became Portfolio Manager of Fidelity
Ohio Municipal Money Market Fund on July 1, 2000.
Q. NORM, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE SIX
MONTHS THAT ENDED JUNE 30, 2000?
A. In the first half of 2000, the backdrop seemed ripe for the
build-up of inflationary pressures. Economic growth was robust,
unemployment reached historic lows and consumer spending was strong.
To dampen growth and keep inflation at bay, the Federal Reserve Board
continued its program of short-term interest-rate hikes. As the period
progressed, market participants tried to gauge the pace of the Fed's
tightening monetary policy approach. Through most of the second
quarter of 2000, inflation remained subdued despite strong growth. As
a result the Fed followed a deliberate approach, raising the rate
banks charge each other for overnight loans - known as the fed funds
target rate - by increments of 0.25 percentage points in February and
March. In April and May, though, there was a general recognition of
inflationary pressures and the employment cost index - a broad measure
of the costs incurred by businesses for wages and benefits - posted a
higher-than-expected gain. In response, the Fed became more aggressive
at its May meeting, raising the fed funds target rate by 0.50
percentage points, to 6.50%. At its June meeting, the Fed chose to
keep rates unchanged, after seeing some signs of an economic slowdown.
Nevertheless, the Fed also indicated it was more likely to raise, not
lower, rates in the future.
Q. HOW WAS THE FUND MANAGED DURING THIS PERIOD?
A. For most of the first six months of 2000, the fund held a
significant weighting in variable-rate demand notes (VRDNs). Yields on
these instruments are reset at regular intervals, usually daily or
weekly. This approach helped the fund capture higher market yields as
the Fed continued to raise short-term rates. Holding a large
percentage in VRDNs also helped boost the fund's performance in April
and early May, due to a unique circumstance. With the run-up in the
equity market in 1999, many investors earned more capital gains than
usual and needed to pay higher tax bills. As a result, investors
redeemed shares of money market funds to pay their taxes. Fund
managers, in turn, sold VRDNs to meet redemptions. Dealers of VRDNs
were therefore forced to raise yields - in some cases as high as
levels seen in taxable markets - to attract buyers, and the fund took
advantage of these buying opportunities to add yield. In June, this
strategy shifted somewhat as Ohio issuers came to market with one-year
fixed-rate notes. Supply was high, forcing issuers to offer higher
yields to attract buyers. The fund took advantage of this situation by
investing in longer-term notes that incorporated my predecessor's
expectations for interest rates in the future.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 2000, was 3.93%, compared to
3.99% six months ago. The more recent seven-day yield was the
equivalent of a 6.66% taxable rate of return for Ohio investors in the
40.80% combined state and federal income tax bracket. The fund's
yields reflect that a portion of the fund's income was subject to
state taxes. Through June 30, 2000, the fund's six-month total return
was 1.75%, compared to 1.68% for the Ohio tax-free money market funds
average, according to iMoneyNet, Inc.
Q. WHAT IS YOUR OUTLOOK, NORM?
A. Toward the end of the period, market rates reflected the sentiment
that perhaps the Fed has completed its latest round of interest-rate
hikes. While I don't believe we'll see as many rate hikes as I
expected at the beginning of 2000, I do believe there is a strong
chance we will see further rate hikes this year, perhaps in August or
October. That's because I don't believe the Fed has slowed economic
growth significantly. As a result, I remain somewhat cautious, and
will look for opportunities in investments that compensate the fund
for the possibility of further Fed rate hikes. We will continue to
watch emerging data carefully, especially those regarding employment
and inflation. If any signs emerge that economic growth continues to
be robust, I believe the Fed will err on the side of being more
aggressive, raising rates again in order to slow growth and stifle
inflationary pressures.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: high current tax-free
income while maintaining a
stable $1 share price by
investing in high-quality,
short-term municipal money
market securities whose
interest is free from federal
income tax and Ohio
individual income tax
FUND NUMBER: 419
TRADING SYMBOL: FOMXX
START DATE: August 29, 1989
SIZE: as of June 30, 2000,
more than $464 million
MANAGER: Norm Lind, since
July 2000; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in 1986
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 6/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6/30/99
12/31/99
0 - 30 66.8 67.9 68.4
31 - 90 8.7 2.8 9.6
91 - 180 12.3 10.2 9.3
181 - 397 12.2 19.1 12.7
WEIGHTED AVERAGE MATURITY
6/30/00 12/31/99 6/30/99
Fidelity Ohio Municipal Money 62 DAYS 72 Days 61 Days
Market Fund
Ohio Tax-Free Money Market 50 DAYS 61 Days 48 Days
Funds Average **
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JUNE 30, 2000 AS OF DECEMBER 31, 1999
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 62.3% (VRDNs) 59.8%
Commercial Paper (including Commercial Paper (including
CP Mode) 1.0% CP Mode) 3.7%
Tender Bonds 6.0% Tender Bonds 7.2%
Municipal Notes 31.0% Municipal Notes 22.7%
Other Investments and Net Other Investments and Net
Other Assets* (0.3)% Other Assets 6.6%
Row: 1, Col: 1, Value: 62.3 Row: 1, Col: 1, Value: 59.8
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 1.0 Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 6.0 Row: 1, Col: 5, Value: 7.2
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 31.0 Row: 1, Col: 7, Value: 22.7
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 6.6
</TABLE>
* OTHER INVESTMENTS AND NET OTHER ASSETS ARE NOT INCLUDED IN THE PIE
CHART.
**SOURCE: IMONEYNET, INC.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
MUNICIPAL SECURITIES - 101.3%
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - 101.3%
American Muni. Pwr. BAN $ 3,800,000 $ 3,800,000
(Cleveland Pub. Pwr. Proj.)
3.9% 9/1/00
Ashland Gen. Oblig. BAN:
(Muni. Court & Jail 4,000,000 4,000,316
Facilities Proj.) 3.8%
7/13/00
4.75% 7/12/01 (a) 4,100,000 4,109,758
Ashtabula County Ind. Dev.
Rev.:
(Plasticolors, Inc. Proj.) 2,220,000 2,220,000
Series 1996 A, 4.95%,
(Cotswold Ltd.) LOC Key Bank
Nat'l. Assoc., VRDN (b)(c)
(Zehro Plastics, Inc. Proj.) 5,000,000 5,000,000
Series 1999, 4.8%, LOC Bank
One NA, Michigan, VRDN (b)(c)
Bedford Heights Indl. Dev. 850,000 850,000
Rev. (Olympic Steel Proj.)
Series 1989, 4.9%, LOC
Nat'l. City Bank, VRDN (b)(c)
Blue Ash Gen. Oblig. BAN 5,500,000 5,502,346
4.41% 11/2/00
Bowling Green Gen. Oblig. BAN 3,000,000 3,004,912
4.6% 3/29/01
Butler County Gen. Oblig. BAN 3,000,000 3,001,044
3.85% 8/3/00
Butler County Joint 4,500,000 4,500,000
Vocational School District
BAN 4.3% 3/1/01
Cambridge Hosp. Facilities 7,100,000 7,100,000
Rev. Bonds (Southeastern
Reg'l. Med. Ctr. Proj.)
4.55%, tender 7/3/00
Canfield Local School 4,400,000 4,406,175
District BAN 4.5% 9/28/00
Clark County Multi-family 7,085,000 7,085,000
Rev. (Masonic Home Proj.)
Series 1999, 4.87% (AMBAC
Insured), VRDN (b)
Clermont County Ind. Dev. Rev.:
(American Micro Products 4,200,000 4,200,000
Proj.) 5%, LOC Firstar Bank
NA, VRDN (b)(c)
(Mane-Seafla, Inc. Proj.) 4,650,000 4,650,000
4.95%, LOC Bank One NA, VRDN
(b)(c)
Cuyahoga County Health Care 7,505,000 7,505,000
Facilities Rev. (Althenheim
Proj.) 4.87%, (West Side
Deutscher Fra Verein) LOC
Firstar Bank NA, VRDN (b)
Cuyahoga County Hosp. Rev. 4,900,000 4,900,000
(Cleveland Clinic Foundation
Proj.) Series 1997 D, 4.55%
(Liquidity Facility Bank of
America NA), VRDN (b)
Cuyahoga County Ind. Dev. Rev.:
(Marine Mechanical Corp. 5,000,000 5,000,000
Proj.) 4.95%, LOC Nat'l.
City Bank, VRDN (b)(c)
(Progressive Plastics, Inc. 2,040,000 2,040,000
Proj.) 4.95%, LOC Bank One
NA, VRDN (b)(c)
(The Great Lakes Brewing Co. 5,245,000 5,245,000
Proj.) Series 1997, 4.97%,
LOC Huntington Nat'l. Bank,
Columbus, VRDN (b)(c)
Delaware County Health Care 4,170,000 4,170,000
Facilities (Willow Brook
Christian Cmnty. Proj.)
Series 1999, 4.87%, LOC
Huntington Nat'l. Bank,
Columbus, VRDN (b)
Elyria Gen. Oblig. BAN 4.35% 3,000,000 3,003,363
12/19/00
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Erie County Gen. Oblig. BAN $ 1,900,000 $ 1,903,694
4.875% 10/26/00
Erie County Ind. Dev. Rev. 5,000,000 5,000,000
Rfdg. (US Tsubaki Proj.)
Series 99, 4.82%, LOC
Lasalle Bank NA, VRDN (b)(c)
Erie County Multi-family Hsg. 10,600,000 10,600,000
Rev. (Providence Residential
Comnty. Corp. Proj.) Series
1999 A, 4.87%, LOC Bank One
NA, VRDN (b)
Fairborn City School District
BAN:
Series 2000, 4.45% 9/14/00 3,300,000 3,302,303
4.4% 9/14/00 3,300,000 3,302,619
Fairborn Gen. Oblig. BAN 1,500,000 1,500,180
(Wtr. Meters Acquisition
Proj.) 3.87% 9/7/00
Fairfield County Gen. Oblig.
BAN:
(Various Util. Impt. Proj.) 2,950,000 2,951,028
4% 7/25/00
4.87% 7/11/01 (a) 4,600,000 4,616,284
Franklin County Health Care 4,900,000 4,900,000
Facilities Rev. (Nat'l.
Church Residences Proj.)
Series B, 4.87%, LOC Fifth
Third Bank, Cincinnati, VRDN
(b)
Franklin County Ind. Dev. Rev.:
(Berwick Steel Co. Proj.) 4,600,000 4,600,000
5.8%, (Nissho Iwia American
Corp.) LOC Sanwa Bank Ltd.,
VRDN (b)
(Inland Products, Inc. Proj.) 600,000 600,000
4.95%, LOC PNC Bank NA, VRDN
(b)(c)
Franklin County Multi-family
Rev.:
Bonds (BlackLick Station 2,500,000 2,500,000
Aprts. Proj.) Series 1999,
4.05%, tender 10/1/00, LOC
Fifth Third Bank, Cincinnati
(c)
(Colonial Courts Proj.) 2,500,000 2,500,000
4.95%, LOC Fed. Home Ln.
Bank, Indianapolis, VRDN
(b)(c)
Franklin Multi-family Rev. 4,600,000 4,600,000
Bonds (260 East Naghten
Street Proj.) 3.85%, tender
8/1/00, LOC Fifth Third
Bank, Cincinnati (c)
Geauga County Gen. Oblig. BAN 1,800,000 1,802,955
4.5% 3/8/01
Greene County Gen. Oblig. BAN 2,672,600 2,676,212
Series 1999 F, 4.25% 11/21/00
Grove City Gen. Oblig. BAN 3,350,000 3,354,301
Series 1999, 4.25% 11/10/00
Hamilton County Ind. Dev. 1,440,000 1,440,000
Rev. (Metro Containers, Inc.
Proj.) 4.95%, LOC Bank One
NA, VRDN (b)(c)
Hamilton Gen. Oblig. BAN:
(Real Estate Acquisition 2,890,000 2,890,000
Proj.) 4.3% 1/19/01
4.25% 10/20/00 2,672,000 2,675,275
Highland Heights Gen. Oblig. 1,430,000 1,434,323
BAN 4.75% 3/14/01
Hilliard Gen. Oblig. BAN:
3.85% 7/21/00 1,600,000 1,600,295
4.75% 1/25/01 3,100,000 3,109,300
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Hilliard Gen. Oblig. BAN: -
continued
Holmes County Ind. Dev. Rev. $ 800,000 $ 800,000
(Poultry Processing, Inc.
Proj.) Series 1990, 4.85%,
LOC RaboBank Nederland Coop.
Central, VRDN (b)(c)
Kettering Indl. Dev. Rev. 4,500,000 4,500,000
(Millat Industries Corp.
Proj.) 4.95%, LOC Nat'l.
City Bank, VRDN (b)(c)
Lake County Ind. Dev. Rev.:
(American Bus. Co. Proj.) 1,235,000 1,235,000
4.97%, LOC Huntington Nat'l.
Bank, Columbus, VRDN (b)(c)
(Norshar Co. Proj.) 4.95%, 3,355,000 3,355,000
LOC Bank One NA, VRDN (b)(c)
Lakewood Gen. Oblig. BAN 2,000,000 2,003,631
4.75% 12/1/00
Lebanon Gen. Oblig. BAN 4.95% 2,000,000 2,000,000
5/24/01
Logan County Gen. Oblig. BAN 4,000,000 4,003,601
4.25% 11/15/00
Lucas County Gen. Oblig. BAN 3,715,000 3,720,817
4.56% 4/12/01
Lucas County Multi-family Rev.:
(Beacon Place/Cubbon Proj.) 3,205,000 3,205,000
5.02%, (National Foundation
Retirement & Hsg.
Preservation) LOC Firstar
Bank NA, VRDN (b)
(Lakewoods Proj.) 4.95%, 4,000,000 4,000,000
(Mv-97 Ltd. Partnership) LOC
Key Bank Nat'l. Assoc., VRDN
(b)(c)
Lyndhurst Gen. Oblig. BAN 1,000,000 1,002,190
4.625% 3/15/01
Marion County Gen. Oblig. BAN:
4.25% 11/16/00 4,055,000 4,059,411
4.5% 11/16/00 2,000,000 2,002,192
Medina County Ind. Dev. Rev.:
(Firedex, Inc. Proj.) Series 1,050,000 1,050,000
1997, 4.95%, LOC Key Bank
Nat'l. Assoc., VRDN (b)(c)
(Rembond Proj.) Series 1996, 2,705,000 2,705,000
4.95%, LOC Firstar Bank NA,
VRDN (b)(c)
Medina Wtr. Sys. Impt. BAN 4,100,000 4,109,758
4.75% 7/12/01 (a)
Mentor Gen. Oblig. BAN 4% 4,025,000 4,026,029
7/20/00
Middletown Ind. Dev. Rev. 1,200,000 1,200,000
(Pilot Chemical Proj.)
4.95%, LOC Bank One NA,
VRDN (b)(c)
Montgomery County Health Care 2,870,000 2,870,000
Rev. (Eastway Corp. &
Property Resource Proj.)
Series 1997, 4.97%, LOC
Huntington Nat'l. Bank,
Columbus, VRDN (b)(c)
Montgomery County
Multi-family Hsg. Dev. Rev.:
(Pedcor Investments-Lyons 4,421,000 4,421,000
Gate Proj.) 4.85%, LOC Fed.
Home Ln. Bank, Cincinnati,
VRDN (b)(c)
(Timber Creek Village Apts. 3,700,000 3,700,000
Proj.) Series 1998, 5.02%,
LOC Key Bank Nat'l. Assoc.,
VRDN (b)(c)
North Baltimore Local School 1,475,000 1,481,618
District BAN 5.1% 4/12/01
Oakwood Gen. Oblig. BAN 4.75% 2,800,000 2,807,208
3/22/01
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Ohio Air Quality Dev. Auth.
Rev. Bonds:
(Cleveland Elec. Co. Proj.) $ 4,700,000 $ 4,700,000
Series 1988 B, 4.45% tender
7/18/00 (FGIC Insured)
(Liquidity Facility
FGIC-SPI), CP mode
(Ohio Edison Co. Proj.) 8,000,000 8,000,000
Series 1988 C, 3.75%, tender
9/1/00, LOC Barclays Bank
PLC (c)
Ohio Hsg. Fin. Agcy. Mtg.
Rev. Participating VRDN:
Series 1999 A, 4.9% 4,600,000 4,600,000
(Liquidity Facility Caisse
des Depots et Consignations)
(b)(c)(d)
Series 1999 Q, 4.92% 14,770,000 14,770,005
(Liquidity Facility Bank of
America NA) (b)(d)
Series 2000 F, 4.9% 4,800,000 4,800,000
(Liquidity Facility Bank of
America NA) (b)(c)(d)
Series BA 98 B, 4.92% 14,695,000 14,695,000
(Liquidity Facility Bank of
America NA) (b)(c)(d)
Series Merlots 00 AA, 4.94% 6,000,000 6,000,000
(Liquidity Facility First
Union Nat'l. Bank, North
Carolina) (b)(c)(d)
Series PA 93, 4.92% 859,000 859,000
(Liquidity Facility Merrill
Lynch & Co., Inc.)
(b)(c)(d)(e)
Series PT 122, 4.9% 3,040,000 3,040,000
(Liquidity Facility Banco
Santander SA) (b)(c)(d)
Series PT 228, 4.9% 6,400,000 6,400,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (b)(c)(d)
Series PT 241, 4.9% 6,370,000 6,370,000
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (b)(c)(d)
Series PT 282, 4.9% 4,500,000 4,500,000
(Liquidity Facility
Landesbank Hessen-Thuringen)
(b)(c)(d)
Ohio Hsg. Fin. Agcy.
Multi-family Hsg. Rev.:
(Pedcor Invt. Willowlake
Apts. Proj.):
Series A, 4.9%, LOC Bank One 3,200,000 3,200,000
NA, VRDN (b)(c)
Series B, 5%, LOC Fed. Home 500,000 500,000
Ln. Bank, Indianapolis, VRDN
(b)(c)
Series C, 5%, LOC Fed. Home 625,000 625,000
Ln. Bank, Indianapolis, VRDN
(b)(c)
Series D, 5%, LOC Fed. Home 625,000 625,000
Ln. Bank, Indianapolis, VRDN
(b)(c)
(Pine Crossing Apts. Proj.) 2,065,000 2,065,000
6.45% (Govt. Nat'l. Mortgage
Assoc. Guaranteed), LOC
Sumitomo Bank Ltd., VRDN
(b)(c)
Ohio Hsg. Fin. Agcy. Single 3,900,000 3,900,000
Family Mtg. Participating
VRDN Series 14, 5.05%
(Liquidity Facility Bank of
New York NA) (b)(c)(d)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev.:
(Carpenter/Clapp & Haney Tool $ 155,000 $ 155,000
Co. Proj.) Series 1987 P,
4.85%, LOC Bank One NA, VRDN
(b)(c)
(Dramex Int'l., Inc. Proj.):
Series 1988 I, 4.85%, LOC 750,000 750,000
Bank One NA, VRDN (b)(c)
Series 1988 II, 4.85%, LOC 200,000 200,000
PNC Bank NA, VRDN (b)(c)
(K&S Realty Proj.) Series 185,000 185,000
1989 I, 4.85%, LOC Nat'l.
City Bank, VRDN (b)(c)
(K&S Realty/Starr 180,000 180,000
Fabricating, Inc. Proj.)
Series 1989 III, 4.85%, LOC
Nat'l. City Bank, VRDN (b)(c)
(Kaufmans Bakery Co. Proj.) 300,000 300,000
Series 1987 K, 4.85%, LOC
Bank One NA, VRDN (b)(c)
(Midwest Acoust-A-Fiber, Inc. 265,000 265,000
Proj.) Series 1989 I, 4.85%,
LOC Nat'l. City Bank, VRDN
(b)(c)
(Morrow Macke Realty Proj.) 320,000 320,000
Series 1988 C, 4.85%, LOC
Bank One NA, VRDN (b)(c)
(Plasticos Co. Proj.) Series 320,000 320,000
1989 III A, 4.85%, LOC
Nat'l. City Bank, VRDN (b)(c)
(Southwest Fin. Svcs. Proj.) 50,000 50,000
Series 1986 J, 4.85%, LOC
Nat'l. City Bank, VRDN (b)(c)
(Standby Screw & Machine 455,000 455,000
Proj.) Series 1991 IA,
4.85%, LOC Nat'l. City Bank,
VRDN (b)(c)
(Walker-Williams Lumber Co. 650,000 650,000
Proj.) Series 1989 III A,
4.85%, LOC Nat'l. City Bank,
VRDN (b)(c)
Ohio Pub. Facilities
Commission Rev. Bonds
(Higher Ed. Cap. Facilities
Proj.):
Series II A, 4.25% 12/1/00 3,000,000 3,002,400
(AMBAC Insured)
Series II B, 4.625% 12/1/00 2,005,000 2,008,995
Ohio Solid Waste Rev. (BP
Exploration & Oil, Inc.
Proj.):
Series 1998, 4.7%, VRDN (b)(c) 1,500,000 1,500,000
Series 1999, 4.7% (BP Amoco 2,200,000 2,200,000
PLC Guaranteed), VRDN (b)(c)
Ohio Univ. Gen. Receipts
Athens BAN:
4.75% 1/25/01 5,000,000 5,014,987
4.75% 3/29/01 1,800,000 1,805,119
Ohio Wtr. Dev. Auth. Poll.
Cont. Rev.:
Bonds (Ohio Edison Co. Proj.) 6,200,000 6,200,000
Series 1988 B, 3.75%, tender
9/1/00, LOC Barclays Bank
PLC (c)
(Philip Morris Co., Inc. 12,000,000 12,000,000
Proj.) 4.9%, VRDN (b)
Rfdg.:
Series 1999 A, 4.85% (AMBAC 4,500,000 4,500,000
Insured), VRDN (b)(c)
Series 1999 B, 4.8% (AMBAC 4,500,000 4,500,000
Insured), VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Ohio Wtr. Dev. Auth. Solid $ 3,900,000 $ 3,900,000
Waste Disp. Rev. (American
Steel & Wire Corp. Proj.)
4.9%, LOC Bank of America
NA, VRDN (b)(c)
Perrysburg Gen. Oblig. BAN:
4.45% 11/16/00 2,755,000 2,759,992
4.7% 11/16/00 5,045,000 5,053,841
Port Auth. for Columbiana 4,820,000 4,820,000
County (Polar Minerals, Inc.
Proj.) 4.95%, LOC Nat'l.
City Bank, VRDN (b)(c)
Portage County Gen. Oblig. BAN:
(Nursing Home Impt. Proj.) 4,500,000 4,508,447
4.4% 11/30/00
4.4% 11/30/00 1,129,000 1,131,119
Portage County Ind. Dev. Rev. 4,835,000 4,835,000
(Mantaline Corp. Proj.)
4.95%, LOC Nat'l. City Bank,
VRDN (b)(c)
Richland County Ind. Dev. Rev.:
(Carton Svc., Inc. Proj.) 770,000 770,000
Series 1996, 4.95%, LOC
Nat'l. City Bank, VRDN (b)(c)
(Sabin Robbins Paper Co. 2,500,000 2,500,000
Proj.) Series 1997, 5%, LOC
Fifth Third Bank,
Cincinnati, VRDN (b)(c)
Solon Indl. Dev. Rev. (Custom 4,000,000 4,000,000
Graphic, Inc. Proj.) Series
1999, 4.95%, LOC Bank One
NA, VRDN (b)(c)
Solon School District BAN 3,500,000 3,506,501
5.1% 1/18/01
Southwestern City School 1,000,000 1,002,028
District Franklin & Pickway
County BAN 5.125% 12/8/00
Springdale Gen. Oblig. BAN 3,000,000 3,001,637
4.05% 9/22/00
Stark County Ind. Dev. Rev.:
(H-P Products, Inc. Proj.) 3,105,000 3,105,000
4.95%, LOC Key Bank Nat'l.
Assoc., VRDN (b)(c)
(Kidd Dev. Proj.) 4.95%, LOC 3,625,000 3,625,000
Bank One NA, VRDN (b)(c)
(Liquid Cont. Corp. Proj.) 255,000 255,000
Series 1987, 4.95%, LOC Bank
One NA, VRDN (b)(c)
Summit County Indl. Dev. Rev.:
(Commercial Alloys Corp. 3,865,000 3,865,000
Proj.) 4.95%, (GC Brown
Family LP) LOC Firstar Bank
NA, VRDN (b)(c)
(Hampshire Properties Proj.) 835,000 835,000
4.95%, LOC Key Bank Nat'l.
Assoc., VRDN (b)(c)
(Kaiser Dev. Proj.) 4.95%, 775,000 775,000
LOC Bank One NA, VRDN (b)(c)
(Keltec, Inc. Proj.) Series 265,000 265,000
1987, 4.95%, (Kaiser Sr.
Edward & Delores) LOC Bank
One NA, VRDN (b)(c)
(Mannix Co. Proj.) Series 1,460,000 1,460,000
1987, 4.95%, LOC Bank One
NA, VRDN (b)(c)
(Sigma Properties Proj.) 2,650,000 2,650,000
Series 2000 B, 4.95%, LOC
Nat'l. City Bank, VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
OHIO - CONTINUED
Summit County Indl. Dev.
Rev.: - continued
(Summit Plastic Co. Proj.) $ 2,370,000 $ 2,370,000
4.95%, LOC Nat'l. City Bank,
VRDN (b)(c)
(Triumph Hldgs. Proj.) 4.95%, 1,700,000 1,700,000
LOC Nat'l. City Bank, LOC
Nat'l. City Bank, Cleveland,
VRDN (b)(c)
Sylvania Gen. Oblig. BAN 4.5% 1,745,000 1,747,693
2/22/01
Teays Valley Local School 3,500,000 3,505,724
District BAN 5% 11/14/00
Toledo-Lucas County Port 3,395,000 3,395,000
Auth. Rev. (P&G Industries
Proj.) 4.95%, LOC Nat'l.
City Bank, VRDN (b)(c)
Trumbull Co. Health Care 5,000,000 5,000,000
Facilities Rev. (Shepard of
the Valley Retire Howland
Proj.) Series 98, 4.85%, LOC
Nat'l. City Bank, VRDN (b)
Trumbull County Ind. Dev. 1,300,000 1,300,000
Rev. (McDonald Steel Corp.
Proj.) Series 1990, 4.95%,
LOC PNC Bank NA, VRDN (b)(c)
Twinsburg Ind. Dev. Rev. 3,800,000 3,800,000
(United Stationers Supply
Co. Proj.) 4.75%, LOC PNC
Bank NA, VRDN (b)(c)
Union County Gen. Oblig. BAN 2,100,000 2,104,959
5.21% 6/14/01
Union Township Gen. Oblig. 2,500,000 2,509,466
BAN 4.86% 4/10/01
Univ. of Cincinnati BAN 5.25% 1,000,000 1,001,664
10/5/00
Van Wert County Ind. Dev. 1,785,000 1,785,000
Rev. (Toledo Molding & Die,
Inc. Proj.) Series 1994,
4.95%, LOC Bank One NA, VRDN
(b)(c)
Wadsworth Central School 2,250,000 2,250,921
District BAN 4.76% 7/25/00
Wood County Ind. Dev. Rev.:
(Dowa THT America, Inc. 3,800,000 3,800,000
Proj.) Series 1999, 4.85%,
LOC Comerica Bank, Detroit,
VRDN (b)(c)
(TL Industries & AMPP, Inc. 890,000 890,000
Proj.) 4.95%, LOC Nat'l.
City Bank, VRDN (b)(c)
Zanesville-Muskingum Port 4,700,000 4,700,000
Auth. Indl. Dev. Rev.
(Almana II LLC Proj.) Series
2000, 4.97%, LOC Bank One
NA, VRDN (b)(c)
TOTAL INVESTMENT PORTFOLIO - 470,103,636
101.3%
NET OTHER ASSETS - (1.3)% (6,026,296)
NET ASSETS - 100% $ 464,077,340
Total Cost for Income Tax Purposes $ 470,103,636
SECURITY TYPE ABBREVIATIONS
BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Security purchased on a delayed delivery or when-issued basis.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Provides evidence of ownership in one or more underlying municipal
bonds.
(e) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE COST
Ohio Hsg. Fin. Agcy. Mtg. 2/24/00 $ 859,000
Rev. Participating VRDN
Series PA 93, 4.92%
(Liquidity Facility Merrill
Lynch & Co., Inc.)
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding Rule 144A issues) amounted to
$859,000 and 0.2% of net assets.
INCOME TAX INFORMATION
At December 31, 1999, the fund had a capital loss carryforward of
approximately $77,000 of which $1,000, $50,000, $6,000 and $20,000
will expire on December 31, 2003, 2004, 2005 and 2007, respectively.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 470,103,636
value - See accompanying
schedule
Cash 7,056,535
Receivable for fund shares 6,990,987
sold
Interest receivable 4,874,054
Prepaid expenses 9,222
TOTAL ASSETS 489,034,434
LIABILITIES
Payable for investments $ 7,100,000
purchased Regular delivery
Delayed delivery 12,835,800
Payable for fund shares 4,765,835
redeemed
Distributions payable 33,011
Accrued management fee 146,648
Other payables and accrued 75,800
expenses
TOTAL LIABILITIES 24,957,094
NET ASSETS $ 464,077,340
Net Assets consist of:
Paid in capital $ 464,162,311
Accumulated net realized gain (84,971)
(loss) on investments
NET ASSETS, for 464,162,398 $ 464,077,340
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($464,077,340
(divided by) 464,162,398
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
INTEREST INCOME $ 9,660,891
EXPENSES
Management fee $ 905,375
Transfer agent fees 321,352
Accounting fees and expenses 46,399
Non-interested trustees' 791
compensation
Custodian fees and expenses 8,315
Registration fees 27,762
Audit 10,642
Legal 5,054
Miscellaneous 9,295
Total expenses before 1,334,985
reductions
Expense reductions (6,072) 1,328,913
NET INTEREST INCOME 8,331,978
NET REALIZED GAIN (LOSS) ON (8,300)
INVESTMENT SECURITIES
NET INCREASE (DECREASE) IN $ 8,323,678
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions: Custodian $ 1,615
credits
Transfer agent credits 4,457
$ 6,072
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 8,331,978 $ 12,346,856
Net realized gain (loss) (8,300) (20,084)
Increase (decrease) in net - (1,113)
unrealized gain from
accretion of market discount
NET INCREASE (DECREASE) IN 8,323,678 12,325,659
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,331,978) (12,346,856)
from net interest income
Share transactions at net 759,373,686 1,212,520,087
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 8,023,560 11,964,134
distributions from net
interest income
Cost of shares redeemed (793,282,402) (1,135,228,819)
NET INCREASE (DECREASE) IN (25,885,156) 89,255,402
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (25,893,456) 89,234,205
IN NET ASSETS
NET ASSETS
Beginning of period 489,970,796 400,736,591
End of period $ 464,077,340 $ 489,970,796
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .017 .028 .030 .032 .030
Operations Net interest
income
Less Distributions
From net interest income (.017) (.028) (.030) (.032) (.030)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 1.75% 2.86% 3.09% 3.29% 3.08%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 464,077 $ 489,971 $ 400,737 $ 364,472 $ 327,593
(000 omitted)
Ratio of expenses to average .56% A .57% .58% .59% .60%
net assets
Ratio of expenses to average .55% A, D .56% D .57% D .59% .59% D
net assets after expense
reductions
Ratio of net interest income 3.48% A 2.83% 3.05% 3.24% 3.03%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .034
Operations Net interest
income
Less Distributions
From net interest income (.034)
Net asset value, end of $ 1.000
period
TOTAL RETURN B, C 3.48%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 296,220
(000 omitted)
Ratio of expenses to average .61%
net assets
Ratio of expenses to average .61%
net assets after expense
reductions
Ratio of net interest income 3.42%
to average net assets
</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.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Ohio Municipal Income Fund (the income fund) is a fund of
Fidelity Municipal Trust. Fidelity Ohio Municipal Money Money Market
Fund (the money market fund) is a fund of Fidelity Municipal Trust II.
Each trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company.
Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts)
are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. Each fund may be affected by
economic and political developments in the state of Ohio. The
following summarizes the significant accounting policies of the income
fund and the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued 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.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned. For the money market fund, accretion of discount represents
unrealized gain until realized at the time of a security disposition
or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 futures transactions, market discount and losses
deferred due to futures transactions and excise tax regulations. The
income 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 interest income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc. (FIMM), an affiliate of Fidelity
Management & Research Company (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
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the funds are recorded as interest income in the
accompanying financial statements.
WHEN-ISSUED SECURITIES. Each fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place after the
customary settlement period for that security. The price of the
underlying securities is fixed at the time the transaction is
negotiated. The values of the securities purchased on a when-issued or
forward commitment basis are identified as such in each applicable
fund's schedule of investments. Each fund may receive compensation for
interest forgone in the purchase of a when-issued security. With
respect to purchase commitments, each
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
fund identifies securities as segregated in its records with a value
at least equal to the amount of the commitment. Losses may arise due
to changes in the value of the underlying securities, if the
counterparty does not perform under the contract, or if the issuer
does not issue the securities due to political, economic, or other
factors.
FUTURES CONTRACTS. The income fund may use futures contracts to manage
its exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
RESTRICTED SECURITIES. Certain funds are permitted to invest in
securities that are subject to legal or contractual restrictions on
resale. These securities generally may be resold in transactions
exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may
be difficult. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $50,453,957 and $64,870,892, respectively.
The market value of futures contracts opened and closed during the
period amounted to $0 and $3,898,687, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
each fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .0920% to .3700% for the
period. The annual individual fund fee rate is 0.25%. 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. For the period,
the management fees were equivalent to annualized rates of 0.38% of
average net assets for the income and money market funds.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE. As each fund's investment sub-adviser, FIMM, a wholly
owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. Citibank, N.A.(Citibank) is the
custodian, transfer agent and shareholder servicing agent for the
funds. Citibank has entered into a sub-contract with Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the funds' transfer and shareholder
servicing agent and accounting functions. The funds pay account fees
and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of 0.08% and 0.13% of average net assets for the
income fund and the money market fund, respectively.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market fund, along with other money market funds
advised by FMR or its affiliates, has entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company. FIDFUNDS provides limited coverage for
certain loss events including issuer default as to payment of
principal or interest and bankruptcy or insolvency of a credit
enhancement provider. The insurance does not cover losses resulting
from changes in interest rates, ratings downgrades or other market
conditions. The fund may be subject to a special assessment of up to
approximately 2.5 times the fund's annual gross premium if covered
losses exceed certain levels. During the period, the money market fund
paid premiums of $18,444 for the calendar year 2000 to FIDFUNDS, which
are being amortized over one year.
5. EXPENSE REDUCTIONS.
Through arrangements with the funds' custodian and transfer agent,
credits realized as a result of uninvested cash balances were used to
reduce a portion of each applicable fund's expenses. For the period,
the reductions under these arrangements are shown under the caption
"Other Information" on each applicable fund's Statement of Operations.
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 Automated Service Telephone provides 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.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative
.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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 1-800-544-0240 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.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments Money
Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President -INCOME FUND
George A. Fischer, Vice President -INCOME FUND
Boyce I. Greer, Vice President -MONEY MARKET FUND
Scott A. Orr, Vice President - MONEY MARKET FUND
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
OFF-SANN-0800 108535
1.705575.102
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
Marie L. Knowles
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Citibank, N.A.
New York, NY
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Citibank, N.A.
New York, NY
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINES FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
PENNSYLVANIA
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
JUNE 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN PENNSYLVANIA
MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 7 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 17 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
SPARTAN PENNSYLVANIA
MUNICIPAL MONEY MARKET FUND
PERFORMANCE 21 How the fund has done over
time.
FUND TALK 23 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 25 A summary of major shifts in
the fund's investments over
the past six months and one
year.
INVESTMENTS 26 A complete list of the fund's
investments.
FINANCIAL STATEMENTS 32 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 36 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-6666
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
In stark contrast to the final six months of 1999, most major equity
market indexes posted negative returns for the first half of 2000, due
mainly to a correction in the technology sector during the second
quarter. The majority of bond markets - with the notable exception of
high yield - fared better, as Treasuries and non-Treasuries alike
benefited as a haven from the volatility of stocks and riskier
investment alternatives.
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.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. 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
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
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). You can also look at the fund's income, as
measured by the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past 10 year total returns
would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN PA MUNICIPAL INCOME 3.99% 2.99% 29.69% 96.95%
LB Pennsylvania Municipal Bond 4.33% 2.84% 31.52% n/a*
Pennsylvania Municipal Debt 3.77% 0.23% 25.64% 85.77%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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 Lehman Brothers Pennsylvania Municipal Bond Index - a market
value-weighted index of Pennsylvania investment-grade municipal bonds
with maturities of one year or more. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Pennsylvania municipal debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 61 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 JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN PA MUNICIPAL INCOME 2.99% 5.34% 7.01%
LB Pennsylvania Municipal Bond 2.84% 5.63% n/a*
Pennsylvania Municipal Debt 0.23% 4.66% 6.38%
Funds Average
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 the
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
* NOT AVAILABLE
$10,000 OVER 10 YEARS
Spartan PA Muni Income LB Municipal Bond
00402 LB015
1990/06/30 10000.00 10000.00
1990/07/31 10130.59 10147.00
1990/08/31 9983.85 9999.67
1990/09/30 10034.30 10005.37
1990/10/31 10179.12 10186.86
1990/11/30 10397.54 10391.72
1990/12/31 10482.88 10436.92
1991/01/31 10619.24 10576.99
1991/02/28 10680.54 10669.01
1991/03/31 10703.94 10672.85
1991/04/30 10872.02 10814.80
1991/05/31 11001.68 10910.94
1991/06/30 10946.97 10900.14
1991/07/31 11110.37 11032.90
1991/08/31 11262.93 11178.21
1991/09/30 11393.86 11323.75
1991/10/31 11492.29 11425.66
1991/11/30 11523.19 11457.54
1991/12/31 11792.50 11703.42
1992/01/31 11824.31 11730.10
1992/02/29 11830.68 11733.85
1992/03/31 11829.80 11738.20
1992/04/30 11953.83 11842.67
1992/05/31 12103.06 11982.05
1992/06/30 12298.25 12183.11
1992/07/31 12685.15 12548.36
1992/08/31 12552.96 12426.02
1992/09/30 12620.16 12507.28
1992/10/31 12426.19 12384.34
1992/11/30 12722.37 12606.14
1992/12/31 12867.25 12734.85
1993/01/31 13036.77 12882.95
1993/02/28 13547.93 13348.93
1993/03/31 13393.56 13207.83
1993/04/30 13523.99 13341.10
1993/05/31 13606.71 13416.08
1993/06/30 13837.09 13639.99
1993/07/31 13820.14 13657.86
1993/08/31 14166.96 13942.22
1993/09/30 14375.23 14101.02
1993/10/31 14382.44 14128.23
1993/11/30 14259.60 14003.76
1993/12/31 14563.18 14299.38
1994/01/31 14752.99 14462.68
1994/02/28 14394.77 14088.10
1994/03/31 13761.39 13514.43
1994/04/30 13833.03 13629.03
1994/05/31 13988.75 13747.20
1994/06/30 13965.69 13663.20
1994/07/31 14190.82 13913.65
1994/08/31 14239.34 13961.79
1994/09/30 14037.42 13756.83
1994/10/31 13795.86 13512.51
1994/11/30 13467.72 13268.20
1994/12/31 13829.82 13560.23
1995/01/31 14253.50 13947.79
1995/02/28 14684.71 14353.39
1995/03/31 14892.23 14518.31
1995/04/30 14936.48 14535.44
1995/05/31 15335.52 14999.27
1995/06/30 15185.56 14868.77
1995/07/31 15318.53 15009.73
1995/08/31 15480.51 15200.05
1995/09/30 15654.65 15296.27
1995/10/31 15846.17 15518.68
1995/11/30 16095.04 15776.13
1995/12/31 16241.20 15927.74
1996/01/31 16401.36 16047.99
1996/02/29 16282.10 15939.67
1996/03/31 16058.37 15735.96
1996/04/30 15985.49 15691.43
1996/05/31 15960.88 15685.15
1996/06/30 16120.04 15855.96
1996/07/31 16266.19 16000.25
1996/08/31 16272.34 15996.41
1996/09/30 16465.24 16220.36
1996/10/31 16644.58 16403.81
1996/11/30 16950.22 16704.00
1996/12/31 16893.45 16633.85
1997/01/31 16915.93 16665.28
1997/02/28 17059.96 16818.27
1997/03/31 16837.17 16594.08
1997/04/30 16953.96 16732.98
1997/05/31 17171.45 16984.64
1997/06/30 17337.60 17165.53
1997/07/31 17819.50 17641.01
1997/08/31 17640.52 17475.72
1997/09/30 17841.27 17683.15
1997/10/31 17928.18 17796.86
1997/11/30 18013.09 17901.50
1997/12/31 18302.17 18162.68
1998/01/31 18490.99 18350.12
1998/02/28 18472.51 18355.63
1998/03/31 18456.40 18371.78
1998/04/30 18370.47 18288.92
1998/05/31 18630.70 18578.44
1998/06/30 18751.11 18651.64
1998/07/31 18752.84 18698.45
1998/08/31 19049.79 18987.34
1998/09/30 19311.05 19223.93
1998/10/31 19294.90 19223.54
1998/11/30 19329.41 19291.02
1998/12/31 19357.36 19339.63
1999/01/31 19626.80 19569.58
1999/02/28 19486.82 19484.06
1999/03/31 19506.94 19511.14
1999/04/30 19559.61 19559.72
1999/05/31 19416.67 19446.47
1999/06/30 19123.42 19166.44
1999/07/31 19216.02 19236.21
1999/08/31 19052.20 19082.32
1999/09/30 19052.24 19090.14
1999/10/31 18870.32 18883.21
1999/11/30 19074.40 19084.12
1999/12/31 18939.83 18941.95
2000/01/31 18886.45 18859.55
2000/02/29 19054.17 19078.32
2000/03/31 19418.46 19495.37
2000/04/30 19323.69 19380.16
2000/05/31 19251.50 19279.38
2000/06/30 19694.76 19789.90
IMATRL PRASUN SHR__CHT 20000630 20000724 091907 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Pennsylvania Municipal Income Fund on June 30,
1990. As the chart shows, by June 30, 2000, the value of the
investment would have grown to $19,695 - a 96.95% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - a market value-weighted index of
investment-grade municipal bonds with maturities of one year or more -
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $19,790 - a 97.90%
increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally
move in the opposite
direction of interest rates. In
turn, the share price, return
and yield of a fund that
invests in bonds 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31,
2000 1999 1998 1997 1996 1995
Dividend returns 2.50% 4.37% 4.55% 4.99% 5.01% 6.52%
Capital returns 1.49% -6.53% 1.22% 3.35% -0.99% 10.92%
Total returns 3.99% -2.16% 5.77% 8.34% 4.02% 17.44%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains, if
any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED JUNE 30, 2000 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.07(cents) 24.56(cents) 49.04(cents)
Annualized dividend rate 4.88% 4.89% 4.82%
30-day annualized yield 4.93% - -
30-day annualized 7.93% - -
tax-equivalent yield
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$10.15 over the past one month, $10.08 over the past six months and
$10.18 over the past one year, you can compare the fund's income over
these three periods. The 30-day annualized YIELD is a standard formula
for all bond funds based on the yields of the bonds in the fund,
averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. The tax-equivalent yield shows what you would have to earn on a
taxable investment to equal the fund's tax-free yield, if you're in
the 37.79% combined effective 2000 federal and state tax bracket, but
does not reflect the payment of the federal alternative minimum tax,
if applicable.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
For the six-month period ending June
30, 2000, the municipal bond
market was one of the
best-performing debt categories in
fixed-income. Early in the period,
against a backdrop of fairly light
new issue supply, demand was
driven by investors seeking to capture
muni yields hovering in the
neighborhood of 6%, their highest
level in approximately five years.
Early in the second quarter, however,
munis took a step back as the
Federal Reserve Board continued its
campaign of pre-emptive
interest-rate hikes to combat
potential inflation. This scenario was
less than ideal for muni bonds, which
tend to be of longer maturity than
most other debt offerings and,
therefore, acutely interest-rate
sensitive. But throughout June, a
bevy of economic data indicated
that the U.S. economy was indeed in
a slowdown, and muni bonds rallied
once again. For the overall six-month
period ending June 30, 2000, the
Lehman Brothers Municipal Bond
Index - an index of over 35,000
investment-grade, fixed-rate,
tax-exempt bonds - gained
4.48%. That return outpaced the
3.99% advance of the overall
taxable-bond market, as measured
by the Lehman Brothers Aggregate
Bond Index. While Treasury and
other government bonds were
among the only sectors to outpace
municipal securities, tax-free munis
still offered competitive, if not
superior, tax-equivalent yields at
every maturity level.
(photograph of Christine Thompson)
An interview with Christine Thompson, Portfolio Manager of Spartan
Pennsylvania Municipal Income Fund
Q. HOW DID THE FUND PERFORM, CHRISTINE?
A. For the six-month period that ended June 30, 2000, the fund had a
total return of 3.99%. To get a sense of how the fund did relative to
its competitors, the Pennsylvania municipal debt funds average
returned 3.77% for the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Pennsylvania Municipal Bond Index,
which tracks the types of securities in which the fund invests,
returned 4.33%. For the 12-month period that ended June 30, 2000, the
fund had a total return of 2.99%. In comparison, the Pennsylvania
municipal debt funds average returned 0.23% and the Lehman Brothers
index returned 2.84% for the same 12-month period.
Q. WHAT WERE SOME OF THE MAIN FORCES BEHIND THE FUND'S PERFORMANCE
DURING THE PAST SIX MONTHS?
A. In contrast to 1999, long-maturity municipal bond prices firmed in
the first six months of this year even as short-term interest rates
continued to rise. Toward the end of the period, investors began to
anticipate that the Federal Reserve's year-long campaign to stave off
inflation by raising interest rates was nearing a close. Whether or
not that actually proves to be the case will be determined by the
performance of the economy. Furthermore, demand for municipals
strengthened as bargain-hunting investors turned to them for their
attractive prices and relatively high yields. In addition, the supply
of new issue municipals diminished. As a result, municipal bond prices
actually edged up a bit during the past six months. The fund's total
return was the result of better municipal bond prices plus the income
generated by its holdings.
Q. WHAT FACTORS HELPED THE FUND OUTPACE ITS PEERS DURING THE SIX-MONTH
PERIOD?
A. A key factor behind the fund's outperformance was its focus on
premium coupon bonds, which pay interest rates above face - or par -
value. One appealing aspect of premiums was that they were somewhat
insulated from unfavorable tax treatment that negatively affected the
prices of lower coupon bonds, or "discounts," as rates rose.
Q. HOW DID YOU MANAGE THE FUND'S INTEREST RATE SENSITIVITY?
A. I managed the fund's duration - a measure of its interest-rate
sensitivity - to be in line with the municipal market as a whole, as
reflected by the Lehman Brothers Pennsylvania Municipal Bond Index.
That means I didn't lengthen or shorten duration based on where I
thought interest rates would be at some point down the road. Instead,
I positioned the fund to emphasize the best value opportunities based
on their performance potential under a variety of possible
interest-rate scenarios. Given the volatility that interest rates and
the municipal bond market experienced over the past six months,
positioning the fund with neither too much nor too little
interest-rate sensitivity helped because it didn't overwhelm other
strategies I pursued.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Pennsylvania health care bonds remained weak, like most health care
bonds across the national municipal market. Investors continued to
question the sector's long-term profitability in light of increased
competitive pressures and cutbacks in managed care and Medicare
payments. Fortunately, the fund had a much smaller stake in health
care bonds than many of its peers.
Q. IN TERMS OF CREDIT QUALITY, WHAT CHOICES DID YOU MAKE?
A. As of June 30, 2000, more than half of the fund's investments were
in insured bonds. The fund's focus on these higher-quality bonds
reflected the fact that I generally didn't feel that lower-quality
bonds offered enough incentive by way of additional yield for owning
them.
Q. WHAT FACTORS WILL SHAPE THE OUTLOOK FOR MUNICIPAL BONDS OVER THE
NEXT SIX MONTHS OR SO?
A. The primary factor, as always, will be the direction of interest
rates. Supply and demand also will play a role. The supply of
municipals has continued to decline in response to rising interest
rates. Many issuers now find it too expensive to issue new debt or
refinance old debt. As municipal bond yields rose above 6%, we saw
renewed buying from individual investors. In general, municipals were
cheap relative to Treasury securities, although they were more or less
fairly valued compared to other types of taxable bonds. To the extent
that supply remains low and demand stays firm, municipal bonds could
benefit.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to provide high current
income exempt from federal
income and Pennsylvania
personal income tax
FUND NUMBER: 402
TRADING SYMBOL: FPXTX
START DATE: August 6, 1986
SIZE: as of June 30, 2000,
more than $233 million
MANAGER: Christine
Thompson, since 1998;
manager, various Fidelity and
Spartan municipal income
funds; joined Fidelity in
1985
CHRISTINE THOMPSON ON THE
STRENGTH OF PENNSYLVANIA'S
ECONOMY:
"Although Pennsylvania's
economy remained strong during
the past six months, it showed
some signs of slowing mainly in
response to rising interest rates.
Employment in the service sector,
which has been one of the primary
forces behind the state's
expansion, is growing only half as
fast as last year. Permits to build
new homes have slowed as
mortgage rates moved higher. On a
much brighter note, the state's
manufacturing industry appears
to be stabilizing after shedding
jobs during the past two years
because of the slowdown in Asian
economies. The recent
strengthening of that region, coupled
with strong demand in the U.S., has
helped the state's manufacturing
sector during the past six months."
(solid bullet) At the end of the period, the fund
had 1.8% of net assets in bonds
issued by Puerto Rico. As a territory
of the United States, Puerto Rico
can issue bonds that are free from
taxes in all 50 states. When the
supply of Pennsylvania municipals
is limited or their prices look
expensive, the manager
occasionally invests in Puerto Rico
bonds.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF JUNE
30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Obligations 23.5 29.1
Health Care 14.7 11.4
Education 14.4 8.4
Transportation 11.5 10.9
Water & Sewer 11.5 12.1
AVERAGE YEARS TO MATURITY AS
OF JUNE 30, 2000
6 MONTHS AGO
Years 13.4 12.4
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME REMAINING UNTIL
PRINCIPAL PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS,
WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF JUNE 30, 2000
6 MONTHS AGO
Years 6.5 6.6
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION
(MOODY'S RATINGS)
AS OF JUNE 30, 2000
Aaa 65.6%
Aa, A 23.1%
Baa 10.4%
Not Rated 0.9%
Short-term
Investments 0.0%
Row: 1, Col: 1, Value: 65.59999999999999
Row: 1, Col: 2, Value: 23.1
Row: 1, Col: 3, Value: 10.4
Row: 1, Col: 4, Value: 0.9
Row: 1, Col: 5, Value: 0.0
AS OF DECEMBER 31, 1999
Aaa 66.9%
Aa, A 21.6%
Baa 10.3%
Not Rated 1.0%
Short-term
Investments 0.2%
Row: 1, Col: 1, Value: 66.90000000000001
Row: 1, Col: 2, Value: 21.6
Row: 1, Col: 3, Value: 10.3
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.2
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P(registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 97.8%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - 96.0%
Allegheny County Arpt. Rev.
Rfdg. (Pittsburgh Int'l.
Arpt. Proj.):
Series A:
5.75% 1/1/12 (MBIA Insured) Aaa $ 4,000,000 $ 4,110,200
(b)
5.75% 1/1/14 (MBIA Insured) Aaa 3,000,000 3,061,230
(b)
Series A1:
5.75% 1/1/07 (MBIA Insured) Aaa 1,500,000 1,550,550
(b)
5.75% 1/1/08 (MBIA Insured) Aaa 1,000,000 1,034,370
(b)
5.75% 1/1/11 (MBIA Insured) Aaa 2,000,000 2,059,440
(b)
Allegheny County Higher Ed. Aaa 400,000 440,776
Bldg. Auth. Univ. Rev.
(Duquesne Univ. Proj.) 6.5%
3/1/10 (AMBAC Insured)
Allegheny County Hosp. Dev.
Auth. Rfdg.
(Health Ctr.-UPMC Health Sys.
Proj.) Series A:
4.625% 8/1/13 (MBIA Insured) Aaa 3,885,000 3,477,813
4.625% 8/1/14 (MBIA Insured) Aaa 4,060,000 3,589,324
5.55% 4/1/12 (MBIA Insured) Aaa 2,845,000 2,856,807
Allegheny County Ind. Dev. - 2,075,000 2,140,487
Auth. Rev. (YMCA Pittsburgh
Proj.) Series 1990, 8.75%
3/1/10
Allegheny County Port Auth. Aaa 2,000,000 2,038,920
Spl. Rev. 6.125% 3/1/29
(MBIA Insured)
Allegheny County Residential Aaa 730,000 747,586
Fin. Auth. Mtg. Rev. (Single
Family-GNMA Mtg. Prog.)
Series M, 7.95% 6/1/23 (b)
Allegheny County San. Auth. Aaa 2,260,000 1,161,391
Swr. Rev. 0% 12/1/12 (FGIC
Insured) (Escrowed to
Maturity) (c)
Butler Area School District Aaa 5,650,000 1,927,893
(Cap. Appreciation) 0%
11/15/19 (FGIC Insured)
(Pre-Refunded to 11/15/07 @
50.177) (c)
Chester County Health & Ed.
Facilities Auth. Health Sys.
Rev. (Jefferson Health Sys.
Proj.) Series B:
5% 5/15/08 (AMBAC Insured) Aaa 600,000 594,600
5.25% 5/15/22 (AMBAC Insured) Aaa 3,000,000 2,754,780
5.375% 5/15/27 A1 450,000 381,245
Delaware County Auth. College Aa3 3,620,000 3,681,612
Rev. (Haverford College
Proj.) 6% 11/15/30
Delaware County Auth. Hosp.
Rev. (Crozer- Chester Med.
Ctr. Proj.):
6% 12/15/09 Baa2 1,500,000 1,409,460
6% 12/15/20 Baa2 2,700,000 2,313,225
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Delaware County Auth. Univ. Aaa $ 4,710,000 $ 4,106,790
Rev. (Villanova Univ. Proj.)
Series A, 5% 12/1/28 (MBIA
Insured)
Delaware County Gen. Oblig. Aa3 2,200,000 2,221,934
Rfdg. 5.3% 11/15/01
Delaware County Ind. Dev. Aaa 2,500,000 2,513,400
Auth. Rev. (Philadelphia
Suburban Wtr. Co. Proj.) 6%
6/1/29 (FGIC Insured) (b)
Geisinger Auth. Health Sys. Aaa 2,365,000 2,198,906
Rev. (Geisinger Health Sys.
Proj.) Series 1998 A, 5%
8/15/15 (AMBAC Insured)
Harrisburg Auth. Rev. (Pooled Aaa 445,000 447,590
Bond Prog.) Series I,
5.625% 4/1/15 (MBIA Insured)
Keystone Oaks School District Aaa 5,900,000 6,120,365
Series C, 5.829% 9/1/16
(AMBAC Insured)
(Pre-Refunded to 9/4/02 @
102) (c)
Lehigh County Gen. Purp. Aaa 1,000,000 904,600
Auth. (Lehigh Valley Health
Network Proj.) Series A, 5%
7/1/18 (MBIA Insured)
Meadville Gen. Oblig. Rfdg. Aaa 3,210,000 3,317,631
Series B, 6% 10/1/05 (AMBAC
Insured) (Escrowed to
Maturity) (c)
Montgomery County Higher Ed.
& Health Auth. Rev. Rfdg.
(Health Care-Holy Redeemer
Health Proj.) Series A:
5.5% 10/1/05 (AMBAC Insured) Aaa 2,240,000 2,293,222
5.5% 10/1/08 (AMBAC Insured) Aaa 1,000,000 1,023,940
Northampton County Gen. Aa3 4,575,000 4,194,772
Oblig. 5.125% 8/15/19
Northumberland County Auth. Aaa 1,000,000 575,510
Commonwealth Lease Rev.
(Cap. Appreciation) (State
Correctional Facilities
Proj.) 0% 10/15/10 (MBIA
Insured) (Escrowed to
Maturity) (c)
Pennsbury School District Aaa 1,605,000 1,685,539
Rfdg. 6% 8/15/05 (FGIC
Insured)
Pennsylvania Convention Ctr.
Auth. Rev. Rfdg. Series A:
6.6% 9/1/09 (MBIA Insured) Aaa 9,150,000 9,819,048
6.7% 9/1/14 (MBIA Insured) Aaa 3,965,000 4,234,144
6.75% 9/1/19 (MBIA Insured) Aaa 2,670,000 2,831,455
Pennsylvania Gen. Oblig.:
(Cap. Appreciation) Second Aaa 1,770,000 1,233,513
Series, 0% 7/1/07 (AMBAC
Insured)
First Series, 6.125% 9/15/03 Aa3 5,000,000 5,181,850
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Higher Edl.
Facilities Auth. College &
Univ. Rev. Rfdg.:
(RIDC Reg'l. Growth-Carnegie AA- $ 1,000,000 $ 1,050,590
Mellon Univ.) 6% 11/1/05
(Univ. of Pennsylvania Proj.):
Series A:
5.9% 9/1/15 A1 1,200,000 1,223,460
6.5% 9/1/02 A1 2,750,000 2,852,878
6.5% 9/1/04 A1 2,650,000 2,818,381
7% 9/1/01 A1 2,000,000 2,055,180
Series B:
6.5% 9/1/02 A1 1,950,000 2,022,950
6.5% 9/1/04 A1 2,100,000 2,233,434
7% 9/1/05 A1 2,000,000 2,196,080
Pennsylvania Higher Edl.
Facilities Auth. Rev.:
(Drexel Univ. Proj.) 6% 5/1/24 A- 1,000,000 998,650
(Drexel Univ. Proj.) 6% 5/1/29 A- 3,470,000 3,465,316
(Lafayette College Proj.) 6% Aa3 2,500,000 2,535,525
5/1/30
(UPMC Health Sys. Proj.) Aaa 2,000,000 1,706,820
Series A, 5% 8/1/29 (FSA
Insured)
Pennsylvania Hsg. Fin. Agcy.:
(Single Family Mtg. Prog.):
Series 51, 5.65% 4/1/20 (b) Aa2 1,615,000 1,609,897
Series 52B, 5.55% 10/1/12 (b) Aa 1,455,000 1,460,529
Series 53A, 5.4% 10/1/27 (b) Aa 1,945,000 1,938,873
Rfdg. (Single Family Mtg. Aa2 1,560,000 1,561,607
Prog.) Series 54A, 5.375%
10/1/28 (b)
6.1% 10/1/13 (b) Aa 5,000,000 5,060,600
Pennsylvania Ind. Dev. Auth. Aaa 1,000,000 1,104,880
Rev. 7% 1/1/07 (AMBAC
Insured)
Pennsylvania
Intergovernmental Coop.
Auth. Spl. Tax Rev. Rfdg.
(Philadelphia Fdg. Prog.):
5% 6/15/01 (FGIC Insured) Aaa 1,000,000 1,006,370
5.25% 6/15/17 (FGIC Insured) Aaa 2,000,000 1,900,060
Pennsylvania Tpk. Commission Aaa 3,000,000 3,102,330
Tpk. Rev. Series L, 6.25%
6/1/11 (AMBAC Insured)
Philadelphia Arpt. Rev. Rfdg.
(Philadelphia Arpt. Sys.
Proj.) Series A:
5.375% 6/15/11 (FGIC Insured) Aaa 3,770,000 3,769,472
(b)
6% 6/15/08 (FGIC Insured) (b) Aaa 3,000,000 3,156,630
Philadelphia Gas Works Rev.
Rfdg. Series 14A:
6.375% 7/1/26 Baa2 4,000,000 4,019,480
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Philadelphia Gas Works Rev.
Rfdg. Series 14A: - continued
6.375% 7/1/26 (Pre-Refunded Baa2 $ 1,905,000 $ 2,021,700
to 7/1/03 @ 102) (c)
Philadelphia Hosp. & Higher
Ed. Facilities Auth. Health
Sys. Rev. (Jefferson Health
Sys. Proj.) Series A:
5% 5/15/09 A1 1,000,000 943,670
5.5% 5/15/08 A1 1,000,000 993,020
Philadelphia Hosp. & Higher
Ed. Facilities Auth. Hosp.
Rev. Rfdg. (Philadelphia
Hosp. Proj.):
6.05% 7/1/04 (Escrowed to Baa3 2,500,000 2,611,225
Maturity) (c)
6.15% 7/1/05 (Escrowed to Baa3 2,100,000 2,219,616
Maturity) (c)
6.25% 7/1/06 (Escrowed to Baa3 2,600,000 2,778,802
Maturity) (c)
Philadelphia Ind. Dev. Arpt. Aaa 3,000,000 2,776,290
Rev. (Philadelphia Arpt.
Sys. Proj.) Series A, 5%
7/1/15 (FGIC Insured) (b)
Philadelphia Muni. Auth. Rev. Aaa 1,000,000 564,450
(Cap. Appreciation) (Muni.
Svcs. Bldg. Lease Prog.) 0%
3/15/11 (FSA Insured)
Philadelphia School District:
Series A, 4.5% 4/1/23 (MBIA Aaa 3,000,000 2,457,690
Insured)
Series B, 5.375% 4/1/27 Aaa 4,000,000 3,744,480
(AMBAC Insured)
Series C, 5.75% 3/1/29 (MBIA Aaa 4,000,000 3,966,880
Insured)
Philadelphia Wtr. & Swr. Rev.:
(Cap. Appreciation) Series Aaa 5,300,000 3,452,049
14, 0% 10/1/08 (MBIA Insured)
Rfdg.:
5.5% 6/15/15 (FSA Insured) Aaa 1,805,000 1,804,224
5.75% 6/15/13 (MBIA Insured) Aaa 2,650,000 2,688,637
6.75% 8/1/04 (MBIA Insured) Aaa 2,085,000 2,230,179
Pittsburgh Gen. Oblig. 5.5% Aaa 1,065,000 1,078,664
9/1/12 (AMBAC Insured)
Pittsburgh School District
(Cap. Appreciation) Series C:
0% 8/1/07 (AMBAC Insured) Aaa 2,610,000 1,811,131
0% 8/1/08 (AMBAC Insured) Aaa 2,000,000 1,313,980
Pittsburgh Wtr. & Swr. Auth.
Wtr. & Swr. Sys. Rev.:
Rfdg. Series A:
4.75% 9/1/16 (FGIC Insured) Aaa 3,000,000 2,712,450
6.5% 9/1/13 (FGIC Insured) Aaa 10,000,000 11,122,898
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Pittsburgh Wtr. & Swr. Auth.
Wtr. & Swr. Sys. Rev.: -
continued
Rfdg. (Cap. Appreciation) Aaa $ 3,300,000 $ 2,670,756
Series A, 0% 9/1/04 (FGIC
Insured) (Escrowed to
Maturity) (c)
Scranton-Lackawanna Health & Aaa 3,375,000 3,406,928
Welfare Auth. Rev. Rfdg.
(Cmnty. Med. Ctr. Proj.)
5.5% 7/1/12 (MBIA Insured)
Seneca Valley School District Aaa 2,000,000 1,896,540
Rfdg. Series A, 5% 7/1/14
(FGIC Insured)
Southeastern Pennsylvania
Trans. Auth. Spl. Rev.
Series A:
5.25% 3/1/18 (FGIC Insured) Aaa 1,000,000 945,380
6.5% 3/1/04 (FGIC Insured) Aaa 85,000 89,899
(Escrowed to Maturity) (c)
Swarthmore Boro Auth. College Aaa 2,000,000 1,768,020
Rev. Rfdg. 5% 9/15/28
Westmoreland County Indl. BBB 2,700,000 2,349,891
Dev. Auth. Rev. (Nat'l.
Waste & Energy Corp./Valley
Landfill Expansion Proj.)
5.1%, tender 5/1/09, LOC
Fleet Bank NA (b)
Wilkens Area Ind. Dev. Auth. Aaa 1,500,000 1,480,785
Rev. Rfdg. (Fairview
Extended Care Proj.) Series
B, 4.55% 1/1/21 (MBIA
Insured)
York County Solid Waste & Aaa 5,000,000 5,087,550
Refuse Auth. Solid Waste
Sys. Rev. Rfdg. 5.25%
12/1/05 (FGIC Insured)
224,073,694
PUERTO RICO - 1.8%
Puerto Rico Commonwealth Hwy.
& Trans. Auth. Hwy. Rev.
Series Y:
5% 7/1/36 Baa1 3,100,000 2,731,596
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Hwy.
& Trans. Auth. Hwy. Rev.
Series Y: - continued
5.5% 7/1/36 Baa1 $ 400,000 $ 383,196
Puerto Rico Commonwealth Baa 1,000,000 1,017,930
Urban Renewal & Hsg. Corp.
Rfdg. 7.875% 10/1/04
4,132,722
TOTAL INVESTMENT PORTFOLIO - 228,206,416
97.8%
(Cost $228,294,880)
NET OTHER ASSETS - 2.2% 5,200,660
NET ASSETS - 100% $ 233,407,076
</TABLE>
LEGEND
(a) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 86.2% AAA, AA, A 85.1%
Baa 9.4% BBB 9.1%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.9%.
The distribution of municipal securities by revenue source, as a
percentage of total net assets, is as follows:
General Obligations 23.5%
Health Care 14.7
Education 14.4
Transportation 11.5
Water & Sewer 11.5
Escrowed/Pre-Refunded 10.7
Housing 5.3
Others* (individually less 8.4
than 5%)
100.0%
* Includes net other assets.
INCOME TAX INFORMATION
At June 30, 2000, the aggregate cost of investment securities for
income tax purposes was $228,294,880. Net unrealized depreciation
aggregated $88,464, of which $3,926,034 related to appreciated
investment securities and $4,014,498 related to depreciated investment
securities.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 228,206,416
value (cost $228,294,880) -
See accompanying schedule
Cash 4,377,730
Receivable for fund shares 1,601
sold
Interest receivable 3,642,067
TOTAL ASSETS 236,227,814
LIABILITIES
Payable for investments $ 2,232,623
purchased
Payable for fund shares 249,661
redeemed
Distributions payable 254,291
Accrued management fee 71,375
Other payables and accrued 12,788
expenses
TOTAL LIABILITIES 2,820,738
NET ASSETS $ 233,407,076
Net Assets consist of:
Paid in capital $ 234,891,533
Distributions in excess of (7,004)
net investment income
Accumulated undistributed net (1,388,989)
realized gain (loss) on
investments
Net unrealized appreciation (88,464)
(depreciation) on investments
NET ASSETS, for 22,861,836 $ 233,407,076
shares outstanding
NET ASSET VALUE, offering $10.21
price and redemption price
per share ($233,407,076
(divided by) 22,861,836
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
$ 6,299,421
INTEREST INCOME
EXPENSES
Management fee $ 440,040
Transfer agent fees 91,451
Accounting fees and expenses 37,449
Non-interested trustees' 412
compensation
Custodian fees and expenses 2,623
Registration fees 25,077
Audit 14,744
Legal 3,663
Miscellaneous 103
Total expenses before 615,562
reductions
Expense reductions (56,288) 559,274
NET INTEREST INCOME 5,740,147
REALIZED AND UNREALIZED GAIN (388,723)
(LOSS)
Net realized gain (loss) on
investment securities
Change in net unrealized 3,726,459
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 3,337,736
NET INCREASE (DECREASE) IN $ 9,077,883
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 5,740,147 $ 11,997,268
Net realized gain (loss) (388,723) 1,027,615
Change in net unrealized 3,726,459 (18,631,173)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 9,077,883 (5,606,290)
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (5,754,094) (11,997,268)
From net interest income
From net realized gain - (1,027,615)
In excess of net realized - (479,531)
gain
TOTAL DISTRIBUTIONS (5,754,094) (13,504,414)
Share transactions Net 11,116,236 29,309,371
proceeds from sales of shares
Reinvestment of distributions 4,135,964 9,949,965
Cost of shares redeemed (27,175,582) (47,648,462)
NET INCREASE (DECREASE) IN (11,923,382) (8,389,126)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 5,885 16,954
TOTAL INCREASE (DECREASE) (8,593,708) (27,482,876)
IN NET ASSETS
NET ASSETS
Beginning of period 242,000,784 269,483,660
End of period (including $ 233,407,076 $ 242,000,784
distributions in excess of
net investment income of
$7,004 and $0, respectively)
OTHER INFORMATION
Shares
Sold 1,104,670 2,776,170
Issued in reinvestment of 409,896 951,358
distributions
Redeemed (2,696,841) (4,562,770)
Net increase (decrease) (1,182,275) (835,242)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.060 $ 10.830 $ 10.810 $ 10.490 $ 10.670
period
Income from Investment .244 E .482 .483 .501 .520
Operations Net interest
income
Net realized and unrealized .152 (.709) .126 .350 (.109)
gain (loss)
Total from investment .396 (.227) .609 .851 .411
operations
Less Distributions
From net interest income (.246) (.482) (.483) (.501) (.520)
From net realized gain - (.042) (.107) (.030) (.071)
In excess of net realized - (.020) - - -
gain
Total distributions (.246) (.544) (.590) (.531) (.591)
Redemption fees added to paid .000 .001 .001 .000 .000
in capital
Net asset value, end of $ 10.210 $ 10.060 $ 10.830 $ 10.810 $ 10.490
period
TOTAL RETURN B, C 3.99% (2.16)% 5.77% 8.34% 4.02%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 233,407 $ 242,001 $ 269,484 $ 264,693 $ 270,977
(000 omitted)
Ratio of expenses to average .53% A .51% .55% .55% .55%
net assets
Ratio of expenses to average .48% A, D .51% .55% .55% .53% D
net assets after expense
reductions
Ratio of net interest income 4.90% A 4.58% 4.45% 4.74% 4.98%
to average net assets
Portfolio turnover rate 22% A 28% 25% 26% 53%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 9.620
period
Income from Investment .590
Operations Net interest
income
Net realized and unrealized 1.049
gain (loss)
Total from investment 1.639
operations
Less Distributions
From net interest income (.590)
From net realized gain -
In excess of net realized -
gain
Total distributions (.590)
Redemption fees added to paid .001
in capital
Net asset value, end of $ 10.670
period
TOTAL RETURN B, C 17.44%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 288,425
(000 omitted)
Ratio of expenses to average .55%
net assets
Ratio of expenses to average .55%
net assets after expense
reductions
Ratio of net interest income 5.73%
to average net assets
Portfolio turnover rate 49%
</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.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
E NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either
total return or yield. Total return reflects the change in the value
of an investment, assuming reinvestment of the fund's dividend income,
but does not include the $5 account closeout fee on an average-sized
account. Yield measures the income paid by a fund. Since a money
market fund tries to maintain a $1 share price, yield is an important
measure of performance. If Fidelity had not reimbursed certain fund
expenses, the past 10 year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN PA MUNICIPAL MONEY 1.80% 3.36% 17.30% 38.76%
MARKET
Pennsylvania Tax-Free Money 1.67% 3.11% 16.31% 39.25%
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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. To measure how the fund's performance stacked up
against its peers, you can compare it to the Pennsylvania tax-free
money market funds average, which reflects the performance of tax-free
money market funds with similar objectives tracked by iMoneyNet, Inc.
The past six months average represents a peer group of 13 mutual
funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN PA MUNICIPAL MONEY 3.36% 3.24% 3.33%
MARKET
Pennsylvania Tax-Free Money 3.11% 3.06% 3.36%
Market Funds Average
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.
YIELDS
7/3/00 4/3/00 1/3/00 9/27/99 6/28/99
Spartan PA Muni Money Market 4.18% 3.40% 4.37% 3.20% 3.07%
Pennsylvania Tax-Free Money 3.83% 3.09% 4.02% 2.98% 2.90%
Market Funds Average
Spartan Pennsylvania 6.72% 5.46% 7.02% 5.15% 4.93%
Municipal Money Market -
Tax-equivalent
Portion of fund's income 0.00% 3.00% 0.90% 7.69% 0.25%
subject to state taxes
Spartan Pennsylvania
Municipal Money
Market
Pennsylvania Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 4.18
Row: 1, Col: 2, Value: 3.83
Row: 2, Col: 1, Value: 3.4
Row: 2, Col: 2, Value: 3.09
Row: 3, Col: 1, Value: 4.37
Row: 3, Col: 2, Value: 4.02
Row: 4, Col: 1, Value: 3.2
Row: 4, Col: 2, Value: 2.98
Row: 5, Col: 1, Value: 3.07
Row: 5, Col: 2, Value: 2.9
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the
Pennsylvania tax-free money market funds average as tracked by
iMoneyNet, Inc. or you can look at the fund's tax-equivalent yield,
which is based on a combined effective 2000 federal and state income
tax rate of 37.79%. The fund's yields mentioned above reflect that a
portion of the fund's income was subject to state taxes. A portion of
the fund's income may be subject to the federal alternative minimum
tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
(checkmark)COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in
mind that the U.S. government
neither insures nor guarantees
a money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Diane McLaughlin)
An interview with Diane McLaughlin, Portfolio Manager of Spartan
Pennsylvania Municipal Money Market Fund
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE FIRST HALF OF
2000, DIANE?
A. For most of the period, indications of robust economic growth
raised fears that inflation was on the horizon. For example, growth in
gross domestic product in the first quarter of 2000 continued at the
same vibrant pace seen in 1999. Economic activity was sustained by the
wealth effect caused by gains in the equity market, which resulted in
high consumer confidence and sustained consumer spending. Business
spending was also strong. Other data underscored the momentum of the
U.S. economy. In April, the unemployment rate fell to 3.9%, the lowest
level in 30 years. Foreign economies demonstrated strength and
increased demand for U.S. exports. This backdrop encouraged the
Federal Reserve Board to continue to raise short-term interest rates
in order to slow growth and head off inflation. The Fed raised the
rate banks charge each other for overnight loans - known as the fed
funds target rate - three times. The first two hikes each increased
the target rate by 0.25 percentage points in February and March. In
May, the Fed became more aggressive, raising short-term rates by 0.50
percentage points, bringing it to 6.50%. This move came shortly after
the employment cost index - a broad measure of the costs incurred by
businesses for wage and benefits - rose at a higher-than-expected
annual rate of 5.6% in the first quarter, up from 3.4% in 1999. In
addition, the housing market continued to be strong in spite of rising
mortgage rates. In June, however, the Fed kept rates unchanged after
seeing some indications that the economy was slowing. While price
inflation had surfaced at the consumer level - fueled by increases in
energy costs, consumer prices increased at an annual rate of 4.2%
during the first six months of the year, up from 2.8% from the prior
12 months - most price gains had been offset by productivity
improvements. Even though the Fed held off in June, it indicated it
was more likely to raise rates, not lower them, in the future.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. For most of the period, the fund maintained a shorter average
maturity than its competitors. I focused the fund on very short-term
variable rate demand notes (VRDNs), whose yields are reset at regular
intervals. This strategy helped the fund take advantage of increasing
yields as the Fed continued to raise rates. The fund's large stake in
VRDNs particularly boosted performance in April. As is typical, in
April, investors redeemed shares of money market funds to pay taxes.
Fund managers, in turn, sold VRDNs to meet redemptions. Dealers of
VRDNs were therefore forced to raise yields - in some cases as high as
levels seen in taxable markets - to attract buyers. The fund was
positioned to take advantage of these increases in yield. This
strategy shifted in June, when many Pennsylvania school districts came
to market at the same time with new issues of longer-term, fixed-rate
notes. The increase in supply pushed yields higher, and the fund was
able to find many attractive investments. These long-term purchases
should outperform shorter-term alternatives even if the Fed is more
aggressive than anticipated.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 2000, was 4.11%, compared to
4.13% six months ago. The latest yield was the equivalent of a 6.61%
taxable yield for Pennsylvania investors in the 37.79% combined
federal and state income tax bracket. The fund's yields reflect that a
portion of the fund's income was subject to state taxes. Through June
30, 2000, the fund's six-month total return was 1.80%, compared to
1.67% for the Pennsylvania tax-free money market funds average,
according to iMoneyNet, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. Market prices currently reflect that the Fed might raise short-term
rates by another 0.25 percentage points by the end of the year. Market
observers and the Fed will be watching economic indicators for any
sign of increased inflationary pressures or actual higher prices.
Although the Fed refrained from raising rates in June, it may increase
rates again in August if we do see more indications of inflation. I
believe the Fed may have reached the end of this latest rate-hike
program, after having raised short-term rates by a total of 1.75
percentage points since June 1999. It appears that these rate
increases are helping to slow the economy. However, the risk still
remains that the Fed might feel it necessary to raise rates again.
I'll continue to look for opportunities driven by supply and demand.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to seek high current
income exempt from federal
and Pennsylvania
state income tax
FUND NUMBER: 401
TRADING SYMBOL: FPTXX
START DATE: August 6, 1986
SIZE: as of June 30, 2000,
more than $195 million
MANAGER: Diane McLaughlin,
since 1997; manager,
various Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1992
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 6/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 6/30/99
12/31/99
0 - 30 78.5 85.2 74.1
31 - 90 4.4 3.3 13.3
91 - 180 1.7 2.5 4.9
181 - 397 15.4 9.0 7.7
WEIGHTED AVERAGE MATURITY
6/30/00 12/31/99 6/30/99
Spartan Pennsylvania 59 DAYS 32 Days 46 Days
Municipal Money Market Fund
Pennsylvania Tax-Free Money 34 DAYS 45 Days 35 Days
Market Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JUNE 30, 2000 AS OF DECEMBER 31, 1999
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 77.0% (VRDNs) 67.2%
Commercial Paper (including Commercial Paper (including
CP Mode) 8.8% CP Mode) 19.0%
Tender Bonds 6.8% Tender Bonds 2.0%
Municipal Notes 8.1% Municipal Notes 8.5%
Other Investments and Net Other Investments and Net
Other Assets** (0.7)% Other Assets 3.3%
Row: 1, Col: 1, Value: 77.0 Row: 1, Col: 1, Value: 67.2
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 8.800000000000001 Row: 1, Col: 3, Value: 19.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 6.85 Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 8.1 Row: 1, Col: 7, Value: 8.5
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 3.3
</TABLE>
* SOURCE: IMONEYNET, INC.(registered trademark)
** OTHER INVESTMENTS AND NET OTHER ASSETS ARE NOT INCLUDED IN THE PIE
CHART.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 105.8%
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - 105.8%
Allegheny County Arpt. Rev. $ 2,000,000 $ 2,000,000
Participating VRDN Series PA
567, 4.85% (Liquidity
Facility Merrill Lynch &
Co., Inc.) (b)(c)(d)
Allegheny County Hosp. Dev.
Auth. Bonds (South Hills
Health Sys. Proj.):
Series 1998 B, 4.3%, tender 2,000,000 2,000,000
4/1/01, LOC PNC Bank NA
Series 2000 A, 5.5%, tender 2,000,000 2,013,639
6/1/01, LOC PNC Bank NA
Allegheny County Ind. Dev.
Auth. Rev.:
(American Bridge Co. Proj.) 2,650,000 2,650,000
Series 1999 A, 4.95%, LOC
Nat'l. City Bank, VRDN (b)(c)
(Doren, Inc. Proj.) Series 2,300,000 2,300,000
1997 C, 4.95%, LOC Nat'l.
City Bank, PA, VRDN (b)(c)
(R.I. Lampus Co. Proj.) 2,560,000 2,560,000
Series 1997 A, 4.95%, LOC
Nat'l. City Bank, PA, VRDN
(b)(c)
(Union Elec. Steel Co. Proj.) 3,120,000 3,120,000
Series 1996 A, 4.95%, L OC
PNC Bank NA, VRDN (b)(c)
Rfdg.:
(Longwood at Oakmont, Inc. 2,200,000 2,200,000
Proj.) Series 1997 A, 4.6%,
LOC Dresdner Bank AG, VRDN
(b)
(North Versailles Shopping 2,790,000 2,790,000
Ctr. Proj.) Series 1992,
4.85%, LOC Bank One NA, VRDN
(b)
Baldwin & Whitehall School 2,000,000 2,000,920
District TRAN 4.98% 6/29/01
(a)
Beaver County Ind. Dev. Auth. 7,100,000 7,100,000
Poll. Cont. Rev.
Participating VRDN Series
953503, 4.87% (Liquidity
Facility Citibank NA, New
York) (b)(d)
Berks County Ind. Dev. Auth. 2,000,000 2,000,000
Ind. Dev. Rev. Bonds
(Citizens Communications Co.
Proj.) Series 1996, 4.65%
tender 8/1/00, CP mode (c)
Berks County Ind. Dev. Auth.
Rev.:
(Construction Fasteners 765,000 765,000
Proj.) Series 1996 B, 5%,
LOC First Union Nat'l. Bank,
North Carolina, VRDN (b)(c)
(Giorgi Mushroom Co. Proj.) 1,000,000 1,000,000
Series 2000 A, 4.85%, LOC
First Union Nat'l. Bank,
North Carolina, VRDN (b)(c)
(Grafika Commercial Printing, 1,285,000 1,285,000
Inc. Proj.) Series 1995,
4.9%, LOC First Union Nat'l.
Bank, North Carolina, VRDN
(b)(c)
(RAM Industries, Inc. Proj.) 3,060,000 3,060,000
Series 1996, 4.9%, LOC First
Union Nat'l. Bank, North
Carolina, VRDN (b)(c)
(The Bachman Co. Proj.) 2,075,000 2,075,000
Series 1994, 4.95%, LOC
First Union Nat'l. Bank,
North Carolina, VRDN (b)(c)
Boyertown Area School 1,125,000 1,130,276
District TRAN 5.3% 6/29/01
(a)
Bucks County Ind. Dev. Auth.
Rev.:
(Associates Proj.) Series 1,225,000 1,225,000
1993, 4.95%, LOC First Union
Nat'l. Bank, North Carolina,
VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Bucks County Ind. Dev. Auth.
Rev.: - continued
(Double H Plastics, Inc. $ 1,950,000 $ 1,950,000
Proj.) Series 1993, 4.95%,
LOC First Union Nat'l. Bank,
North Carolina, VRDN (b)(c)
Butler County Ind. Dev. Auth. 1,500,000 1,500,000
Rev. (Armco, Inc. Proj.)
Series 1996 A, 4.95%, LOC
Chase Manhattan Bank, VRDN
(b)(c)
Carbon County Ind. Dev. Auth.
Resource Recovery Rev. Bonds
(Panther Creek Partners
Proj.):
Series 1990 B, 5% tender 10,200,000 10,200,000
7/13/00, LOC Nat'l.
Westminster Bank PLC, CP
mode (c)
Series 1991 A, 5% tender 2,000,000 2,000,000
7/13/00, LOC Nat'l.
Westminster Bank PLC, CP
mode (c)
Coatesville Area School 2,000,000 2,000,740
District TRAN 4.64% 6/29/01
(a)
Cumberland County Ind. Dev. 1,800,000 1,800,000
Auth. Rev. (Lane
Enterprises, Inc. Proj.)
Series 1994, 4.9%, LOC First
Union Nat'l. Bank, North
Carolina, VRDN (b)(c)
Dallastown Area School 2,500,000 2,500,000
District York County Series
2000, 4.85% (FGIC Insured),
VRDN (b)
Delaware County Ind. Dev. 2,000,000 2,000,000
Auth. Poll. Cont. Rev. (BP
Oil, Inc. Proj.) Series
1985, 4.5% (British
Petroleum Co. PLC
Guaranteed), VRDN (b)
Downingtown Area School 2,500,000 2,507,025
District TRAN 5.1% 6/29/01
(a)
Erie County Ind. Dev. Auth. 1,000,000 1,000,000
Rev. (Carlisle Corp. Proj.)
Series 1993, 4.9%, LOC
Suntrust Bank, VRDN (b)(c)
Erie High Ed. Bldg. Auth. 3,000,000 3,000,000
Univ. Rev. Bonds (Gannon
Univ. Proj.) Series 1998 F,
4.2%, tender 1/15/01, LOC
PNC Bank NA
Lancaster Higher Ed. Auth. 1,430,000 1,430,000
College Rev. (Franklin &
Marshall College Proj.)
4.87% (BPA Chase Manhattan
Bank), VRDN (b)
Lawrence County Ind. Dev. 2,400,000 2,400,000
Auth. Ind. Dev. Rev.
(Atlantic States Materials
Proj.) Series 1999, 4.9%,
LOC Wachovia Bank NA, VRDN
(b)(c)
Lehigh County Gen. Purp. 2,000,000 2,000,000
Auth. (Lehigh Valley Hosp.
Proj.) Series A, 4.5% (AMBAC
Insured) (BPA Chase
Manhattan Bank), VRDN (b)
Lehigh County Indl. Dev.
Auth. Poll. Cont. Rev.
(Allegheny Elec. Coop., Inc.
Proj.):
Series 1984 A, 4.4%, LOC 500,000 500,000
RaboBank Nederland Coop.
Central, VRDN (b)
Series 1984 B, 4.4%, LOC 900,000 900,000
RaboBank Nederland Coop.
Central, VRDN (b)
Montgomery County Ind. Dev.
Auth. Rev.:
(H.P. Cadwallader, Inc. 705,000 705,000
Proj.) Series 1995, 5%, (K&R
Leasing Co.) LOC First Union
Nat'l. Bank, North Carolina,
VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Montgomery County Ind. Dev.
Auth. Rev.: - continued
(RJI LP Proj.) Series 1992, $ 950,000 $ 950,000
4.9%, (ABJ Associates) LOC
First Union Nat'l. Bank,
North Carolina, VRDN (b)(c)
New Garden Gen. Auth. Muni. 4,500,000 4,500,000
Rev. (Muni. Pooled Fing.
Prog.) Series 1999, 4.85%
(AMBAC Insured), VRDN (b)
North Pennsylvania Wtr. Auth. 5,700,000 5,700,000
Wtr. Rev. Participating VRDN
Series SGA 30, 4.9%
(Liquidity Facility Societe
Generale) (b)(d)
Northampton County Ind. Dev.
Auth. Rev.:
Bonds (Citizens 1,100,000 1,100,000
Communications Co. Proj.)
4.4% tender 8/1/00, CP mode
(c)
(Bedford Park Proj.) Series 1,595,000 1,595,000
1996 A, 4.75%, (Heller
Seasonings & Ingrdt, Inc.)
LOC Harris Trust & Savings
Bank, Chicago, VRDN (b)(c)
(Binney & Smith, Inc. Proj.) 2,350,000 2,350,000
Series 1997 A, 4.9%, LOC
Bank One NA, Chicago, VRDN
(b)(c)
(Victoria Vogue Proj.) 4.95%, 1,730,000 1,730,000
LOC PNC Bank NA, VRDN (b)(c)
Northampton Ind. Dev. Auth. 2,000,000 2,000,000
Rev. (Ultra-Poly Corp.,
Portland Ind. Park Proj.)
4.95%, LOC PNC Bank NA, VRDN
(b)(c)
Northeastern Hosp. & Ed. 2,000,000 2,000,000
Auth. Health Care Rev.
(Wyoming Valley Health Care
Proj.) Series 1994 A, 5.1%
(AMBAC Insured), VRDN (b)
Northumberland County Ind. 5,990,000 5,990,000
Dev. Auth. Rev. (Foster
Wheeler Mount Carmel, Inc.
Proj.) Series 1987 B, 4.9%,
LOC UBS AG, VRDN (b)(c)
Pennsylvania Convention Ctr. 10,000,000 10,000,000
Auth. Rev. Participating
VRDN Series PT 1224, 4.79%
(Liquidity Facility Merrill
Lynch & Co., Inc.) (b)(d)
Pennsylvania Econ. Dev. Fing. 2,000,000 2,000,000
Auth. Exempt Facilities Rev.
Bonds (Approved Solid Waste
Proj.) Series 1999, 4.1%
12/15/00 (Bayerische
Landesbank Girozentrale
Guaranteed) (c)
Pennsylvania Econ. Dev. Fing.
Auth. Ind. Dev. Rev.:
(Dodge-Regupol, Inc. Proj.) 1,100,000 1,100,000
Series D4, 4.95%, LOC PNC
Bank NA, VRDN (b)(c)
(Esschem, Inc. Proj.) Series 1,625,000 1,625,000
1991 D10, 4.95%, LOC PNC
Bank NA, VRDN (b)(c)
(McDowell Manufacturing Co. 1,000,000 1,000,000
Proj.) Series 1996 F4,
4.95%, LOC PNC Bank NA, VRDN
(b)(c)
(Pappafava Proj. ) Series 125,000 125,000
1989 D7, 4.95%, LOC PNC
Bank NA, VRDN (b)(c)
(Port Erie Plastics Proj.) 300,000 300,000
Series 1989 D9, 4.95%, LOC
PNC Bank NA, VRDN (b)(c)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Econ. Dev. Fing.
Auth. Ind. Dev. Rev.: -
continued
(Respironics, Inc. Proj.) $ 500,000 $ 500,000
Series 1989 F, 4.95%, LOC
PNC Bank NA, VRDN (b)(c)
(Sun Star, Inc. Proj.) Series 600,000 600,000
1994 A5, 4.95%, LOC PNC Bank
NA, VRDN (b)(c)
Series 1996 A1, 4.95%, (NY 475,000 475,000
Associates) LOC PNC Bank
NA, VRDN (b)(c)
Series 1996 A2, 4.95%, 1,500,000 1,500,000
(Benzels Bretzel Bakery,
Inc.) LOC PNC Bank NA, VRDN
(b)(c)
Series 1996 A3, 4.95%, 700,000 700,000
(Champion Road Machinery
Ltd.) LOC PNC Bank NA, VRDN
(b)(c)
Series 1996 A7, 4.95%, 625,000 625,000
(Harding (Gary C)) LOC PNC
Bank NA, VRDN (b)(c)
Series 1996 A8, 4.95%, 300,000 300,000
(Limco, Inc.) LOC PNC Bank
NA, VRDN (b)(c)
Pennsylvania Econ. Dev. Fing.
Auth. Rev.:
(ASK Foods, Inc. Proj.) 235,000 235,000
Series A1, 4.95%, LOC PNC
Bank NA, VRDN (b)(c)
(Suntory Wtr. Group, Inc. 4,900,000 4,900,000
Proj.) Series 1992 D, 4.9%,
LOC Wachovia Bank NA, VRDN
(b)(c)
Pennsylvania Gen. Oblig. 4,995,000 4,995,000
Participating VRDN Series
MSDW 00 309, 4.87%
(Liquidity Facility Morgan
Stanley Dean Witter & Co.)
(b)(d)
Pennsylvania Higher Ed.
Assistance Agcy. Student Ln.
Rev.:
Series 1988 A, 4.75%, LOC 2,200,000 2,200,000
Student Ln. Marketing
Assoc., VRDN (b)(c)
Series 1988 B, 4.75%, LOC 3,900,000 3,900,000
Student Ln. Marketing
Assoc., VRDN (b)(c)
Series 1988 C, 4.75%, LOC 5,000,000 5,000,000
Student Ln. Marketing
Assoc., VRDN (b)(c)
Series 1988 E, 4.75%, LOC 2,700,000 2,700,000
Student Ln. Marketing
Assoc., VRDN (b)(c)
Series 1997 A, 5.1%, LOC 5,000,000 5,000,000
Student Ln. Marketing
Assoc., VRDN (b)(c)
Series 2000 A, 5.1% (AMBAC 2,000,000 2,000,000
Insured), VRDN (b)(c)
Pennsylvania Higher Edl.
Facilities Auth. Rev.:
Bonds:
(Bucknell Univ. Proj.) Series 2,300,000 2,300,000
1997 A1, 4.25%, tender
4/1/01, LOC PNC Bank NA
(Dickinson College Proj.) 1,200,000 1,200,000
Series 1997 A3, 4.25%,
tender 4/1/01, LOC PNC Bank
NA
(Waynesburg College Proj.) 3,000,000 3,000,000
Series 1997, 4.25%, tender
4/1/01, LOC PNC Bank NA
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Higher Edl.
Facilities Auth. Rev.: -
continued
(Carnegie-Mellon Univ. Proj.):
Series B, 4.5% (BPA Morgan $ 2,800,000 $ 2,800,000
Guaranty Trust Co., NY)
(BPA UBS AG), VRDN (b)
Series C, 4.5% (BPA Morgan 1,000,000 1,000,000
Guaranty Trust Co., NY)
(BPA UBS AG), VRDN (b)
RAN (Lafayette College Proj.) 1,595,000 1,598,959
4.5% 11/29/00
Perkiomen Valley School 2,125,000 2,132,969
District TRAN 5.3% 6/29/01
(a)
Philadelphia Arpt. Rev. 2,000,000 2,000,000
Participating VRDN Series SG
118, 4.85% (Liquidity
Facility Societe Generale)
(b)(c)(d)
Philadelphia Hosp. & Higher 7,700,000 7,700,000
Ed. Facilities Auth. Hosp.
Rev. (Children's Hosp.
Proj.) Series 1996 A, 4.5%
(BPA Morgan Guaranty Trust
Co., NY), VRDN (b)
Philadelphia Ind. Dev. Rev. 2,100,000 2,100,000
(30th Street Station Proj.)
4.3% (MBIA Insured), VRDN
(b)(c)
Philadelphia Redev. Auth. 700,000 700,000
Rev. (Southwork Plaza Proj.)
Series 1997 A, 4.85%, LOC
PNC Bank NA, VRDN (b)(c)
Philadelphia Wtr. & Swr. Rev.:
Bonds Series 1997 A, 5% 2,000,000 2,000,703
8/1/00 (AMBAC Insured)
Participating VRDN Series 1,230,000 1,230,000
1997 Q, 4.85% (Liquidity
Facility Caisse des Depots
et Consignations) (b)(d)
Pittsburgh Urban Redev. Auth. 2,000,000 2,000,000
Mtg. Rev. Bonds Series 1999
E, 3.65% 8/15/00 (c)
Red Lion Area School District 2,500,000 2,509,375
TRAN 5.3% 6/29/01 (a)
Schuylkill County Indl. Dev. 2,500,000 2,500,000
Auth. Resource Recovery Rev.
Rfdg. (Northeastern Pwr.
Co. Proj.) Series 1997 B,
4.65%, LOC Dexia Cr. Local
de France, VRDN (b)(c)
Schuylkill County Indl. Dev. 750,000 750,000
Auth. Rev. (Metal Sales
Manufacturing Corp.) Series
1995, 4.95%, LOC Firstar
Bank NA, VRDN (b)(c)
Univ. Pittsburgh of the 4,000,000 4,018,772
Commonwealth Sys. of Higher
Ed. Bonds (Panthers Proj.)
Series 2000, 5.2% 5/23/01
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PENNSYLVANIA - CONTINUED
Upper Darby School District $ 2,000,000 $ 2,003,940
TRAN 5% 6/29/01 (a)
Venango Ind. Dev. Auth. 2,000,000 2,000,000
Resource Recovery Rev. Bonds
(Scrubgrass Proj.) Series
1990 A, 4.45% tender
8/10/00, LOC Nat'l.
Westminster Bank PLC, CP
mode (c)
TOTAL INVESTMENT PORTFOLIO - 206,907,318
105.8%
NET OTHER ASSETS - (5.8)% (11,362,767)
NET ASSETS - 100% $ 195,544,551
Total Cost for Income Tax Purposes $ 206,907,318
</TABLE>
SECURITY TYPE ABBREVIATIONS
CP - COMMERCIAL PAPER
RAN - REVENUE ANTICIPATION NOTE
TRAN - TAX AND REVENUE
ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Security purchased on a delayed delivery or when-issued basis.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1999, the fund had a capital loss carryforward of
approximately $54,000 of which $17,000, $10,000 and $27,000 will
expire on December 31, 2002, 2003 and 2004, respectively.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 206,907,318
value - See accompanying
schedule
Receivable for investments 2,000,000
sold
Receivable for fund shares 116,700
sold
Interest receivable 1,248,736
TOTAL ASSETS 210,272,754
LIABILITIES
Payable to custodian bank $ 14,087
Payable for investments 14,285,245
purchased on delayed delivery
Payable for fund shares 320,739
redeemed
Distributions payable 25,121
Accrued management fee 80,552
Other payables and accrued 2,459
expenses
TOTAL LIABILITIES 14,728,203
NET ASSETS $ 195,544,551
Net Assets consist of:
Paid in capital $ 195,596,894
Accumulated net realized gain (52,343)
(loss) on investments
NET ASSETS, for 195,594,747 $ 195,544,551
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($195,544,551
(divided by) 195,594,747
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
2000 (UNAUDITED)
INTEREST INCOME $ 4,065,325
EXPENSES
Management fee $ 497,570
Non-interested trustees' 335
compensation
Total expenses before 497,905
reductions
Expense reductions (2,176) 495,729
NET INTEREST INCOME 3,569,596
REALIZED AND UNREALIZED GAIN 1,174
(LOSS) Net realized gain
(loss) on investment
securities
NET INCREASE IN NET ASSETS $ 3,570,770
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 3,569,596 $ 5,703,712
Net realized gain (loss) 1,174 500
NET INCREASE (DECREASE) IN 3,570,770 5,704,212
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (3,569,596) (5,703,712)
from net interest income
Share transactions at net 72,256,476 133,662,294
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 3,397,203 5,407,005
distributions from net
interest income
Cost of shares redeemed (81,401,407) (154,265,283)
NET INCREASE (DECREASE) IN (5,747,728) (15,195,984)
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (5,746,554) (15,195,484)
IN NET ASSETS
NET ASSETS
Beginning of period 201,291,105 216,486,589
End of period $ 195,544,551 $ 201,291,105
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .018 .029 .031 .033 .032
Operations Net interest
income
Less Distributions
From net interest income (.018) (.029) (.031) (.033) (.032)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 1.80% 2.91% 3.15% 3.36% 3.21%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 195,545 $ 201,291 $ 216,487 $ 229,469 $ 242,386
(000 omitted)
Ratio of expenses to average .50% A .50% .50% .50% .50%
net assets
Ratio of expenses to average .50% A .50% .50% .50% .48% D
net assets after expense
reductions
Ratio of net interest income 3.58% A 2.87% 3.10% 3.31% 3.17%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .035
Operations Net interest
income
Less Distributions
From net interest income (.035)
Net asset value, end of $ 1.000
period
TOTAL RETURN B, C 3.56%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 241,643
(000 omitted)
Ratio of expenses to average .50%
net assets
Ratio of expenses to average .50%
net assets after expense
reductions
Ratio of net interest income 3.50%
to average net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Pennsylvania Municipal Income Fund (the income fund) is a fund
of Fidelity Municipal Trust. Spartan Pennsylvania Municipal Money
Market (the money market fund) is a fund of Fidelity Municipal Trust
II. Each trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment
company. Fidelity Municipal Trust and Fidelity Municipal Trust II (the
trusts) are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an
unlimited number of shares. The financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. Each fund may be affected by
economic and political developments in the state of Pennsylvania. The
following summarizes the significant accounting policies of the income
fund and the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued 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.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned. For the money market fund, accretion of discount represents
unrealized gain until realized at the time of a security disposition
or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 futures transactions, market discount, and losses
deferred due to futures transactions and excise tax regulations. The
income 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 and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Distributions in excess of net
investment income and accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
gain remaining at fiscal year end is distributed in the following
year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading fee equal to
.50% of the proceeds of the redeemed shares. The fee, which is
retained by the fund, is accounted for as an addition to paid in
capital.
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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc. (FIMM), an affiliate of Fidelity
Management & Research Company (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
high-quality, short-term municipal securities of various states and
municipalities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
earned by the funds are recorded as interest income in the
accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place after the customary settlement period for that security. The
price of the underlying securities and the date when the securities
will be delivered and paid for are fixed at the time the transaction
is negotiated. The market values of the securities purchased on a
delayed delivery basis are identified as such in each applicable
fund's schedule of investments.
2. OPERATING POLICIES - CONTINUED
DELAYED DELIVERY TRANSACTIONS - CONTINUED
Each fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. With respect to purchase
commitments, each fund identifies securities as segregated in its
records with a value at least equal to the amount of the commitment.
Losses may arise due to changes in the market value of the underlying
securities or if the counterparty does not perform under the contract.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $25,103,181 and $38,610,448, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE.
INCOME FUND. As the fund's investment adviser, FMR receives a monthly
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 .0920% to .3700% for the period.
The annual individual fund fee rate is .25%. 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. For the period, the management
fee was equivalent to an annualized rate of .38% of average net
assets.
MONEY MARKET FUND. As the fund's investment adviser, FMR receives a
fee that is computed daily at an annual rate of .50% of the fund's
average net assets. FMR pays all other expenses, except the
compensation of the non-interested Trustees and certain exceptions
such as interest, taxes, brokerage commissions and extraordinary
expenses. The management fee paid to FMR by the fund is reduced by an
amount equal to the fees and expenses paid by the fund to the
non-interested Trustees.
FMR also bears the cost of providing shareholder services to the money
market fund. To offset the cost of providing these services, FMR or
its affiliates collected certain transaction fees from shareholders
which amounted to $1,951 for the period.
SUB-ADVISER FEE. As each funds' investment sub-adviser, FIMM, a wholly
owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. Citibank, N.A.(Citibank) is the
custodian, transfer agent and shareholder servicing agent for the
income fund. Citibank has entered into a sub-contract with Fidelity
Service Company, Inc. (FSC), an affiliate of FMR, under which FSC
performs the activities associated with the fund's
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES - CONTINUED
transfer and shareholder servicing agent and accounting functions. The
income fund pays account fees and asset-based fees that vary according
to account size and type of account. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy
statements. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
For the period, the income fund's transfer agent fees were equivalent
to an annualized rate of .08% of average net assets.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market fund, along with other money market funds
advised by FMR or its affiliates, has entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company. FIDFUNDS provides limited coverage for
certain loss events including issuer default as to payment of
principal or interest and bankruptcy or insolvency of a credit
enhancement provider. The insurance does not cover losses resulting
from changes in interest rates, ratings downgrades or other market
conditions. The money market fund may be subject to a special
assessment of up to approximately 2.5 times the fund's annual gross
premium if covered losses exceed certain levels. During the period,
FMR has borne the cost of the money market fund's premium payable to
FIDFUNDS.
5. EXPENSE REDUCTIONS.
Through arrangements with the funds' custodian and transfer agent,
credits realized as a result of uninvested cash balances were used to
reduce a portion of the funds' expenses. During the period, the income
fund's custodian, transfer agent and accounting fees were reduced by
$2,145, $48,897 and $5,246, respectively, and the money market fund's
expenses were reduced by $2,176 under these arrangements.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
Fidelity Investments Money
Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Boyce I. Greer, Vice President
Christine J. Thompson, Vice President -INCOME FUND
Diane M. McLaughlin, Vice President - MONEY MARKET FUND
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
PFR-SANN-0800 108926
1.705577.102
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
Marie L. Knowles
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Citibank, N.A.
New York, NY
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Citibank, N.A.
New York, NY
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
