SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-15063)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 101 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. ____
Fidelity Trend Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
_____________________________________________________________
(Address of Principal Executive Offices)
Registrant's Telephone Number (617)
570-7000_______________________________________________________
Arthur S. Loring, Secretary
82 Devonshire Street,
Boston, Massachusetts
02109______________________________________________________________________
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) Immediately upon filing pursuant to paragraph (b) of Rule 485
(x) On February 19, 1994 pursuant to paragraph (b) of Rule 485
( ) 60 days after filing pursuant to paragraph (a) of Rule 485
( ) On ( ) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule on or before February 28, 1994.
FIDELITY TREND FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c, Performance
d................................
4a Charter
(i)..............................
The Funds at a Glance; Investment Principles;
(ii)............................. Securities & Investment Practices
b................................... Securities & Investment Practices
..
Who May Want to Invest; Investment Principles;
c.................................... Securities & Investment Practices
5a.................................. Charter
..
Doing Business with Fidelity; Charter
b(i).............................
Charter
(ii)............................
(iii)........................ Expenses; Breakdown of Expenses
c, Charter; FMR and Its Affiliates; Breakdown of
d................................ Expenses, Cover Page
FMR and Its Affiliates
e....................................
Expenses
f....................................
g(i)................................ FMR and its Affiliates
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
*
iii...............................
*
b...................................
.
Exchange Restrictions
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
How to Buy Shares; Transaction Details
b...................................
.
*
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f, ................................ Breakdown of Expenses
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY TREND FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. *
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a, *
b..............................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii.............................
Management Contracts
b.................................
c, Contracts with Companies Affiliated with FMR
d.............................
*
e................................
Distribution & Service Plans
f...............................
g.............................. *
Description of the Trusts
h.................................
Contracts with Companies Affiliated with FMR
i.................................
17a............................. Portfolio Transactions
B............................ *
c............................ Portfolio Transactions
*
d,e..............................
18a................................ Description of the Trusts
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b..............................
*
c.................................
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
A Statement of Additional Information dated February 19, 1994 has been
filed with the Securities and Exchange Commission, and is incorporated
herein by reference (is legally considered a part of this prospectus). The
Statement of Additional Information is available free upon request by
calling Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or endorsed or
guaranteed by, any bank, savings association, insured depositary
institution, or government agency, nor are they federally insured or
otherwise protected by the FDIC, the Federal Reserve Board, or any other
agency. Investments in the funds involve investment risk, including
possible loss of principal. The value of the investment and its return will
fluctuate and are not guaranteed. When sold, the value of the investment
may be higher or lower than the amount originally invested.
Trend Fund and Value Fund are growth funds. They seek to increase the
value
of your investment over the long term. Trend Fund chooses investments based
on company, industry, and market trends. Value Fund chooses investments
based on the value of a company's assets or stock price.
FIDELITY
TREND
FUND
and
FIDELITY
VALUE
FUND
PROSPECTUS
FEBRUARY 19, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
TRE/VAL-pro-294
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES AND PERFORMANCE EXPENSES Each fund's yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
DIVIDENDS, CAPITAL GAINS, AND
TAXES
SHAREHOLDER AND TRANSACTION DETAILS Share price
ACCOUNT POLICIES calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
INVESTMENT PRINCIPLES Each
fund's overall approach to
investing.
SECURITIES AND INVESTMENT
PRACTICES
<r>KEY FACTS</r>
THE FUNDS AT A GLANCE
GOAL: Capital appreciation (increase in the value of a fund's shares). As
with any mutual fund, there is no assurance that a fund will achieve its
goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager.
TREND FUND
STRATEGY: Invests in securities of com panies likely to benefit from
current economic, financial, or market trends.
SIZE: As of December 31, 1993, the fund had over $ 1.3 billion in
assets.
VALUE FUND
STRATEGY: Invests mainly in equity securities of companies that own
valuable assets or that FMR believes are undervalued in the marketplace.
SIZE: As of December 31, 1993, the fund had over $1.7 billion in assets.
WHO MAY WANT TO INVEST
The funds may be appropriate for investors who are willing to ride out
stock market fluctuations in pursuit of potentially high long-term returns.
Trend Fund is designed for those who are looking for an investment approach
that combines fundamental research with an analysis of market and
other trends. Value Fund is designed for those who are looking for an
investment approach that focuses on undervalued or asset-rich companies.
Both of these strategies can lead to investments in smaller, less
well-known companies. The stocks of small companies often involve more risk
than those of larger companies. The funds do not pursue income, and are not
by themselves a balanced investment plan.
Over time, stocks have shown greater growth potential than other types of
securities. In the short term, however, stock prices can fluctuate
dramatically in response to company, market, or economic news. When you
sell your fund shares, they may be worth more or less than what you paid
for them.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the GROWTH category.
(bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(bullet) INCOME Seeks income by
investing in bonds.
(bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(arrow) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES AND PERFORMANCE
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Maximum sales charge on purchases and
reinvested dividends None
Deferred sales charge on redemptions None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee that varies based on its performance. It also
incurs other expenses for services such as maintaining shareholder records
and furnishing shareholder statements and fund reports. A fund's expenses
are factored into its share price or dividends and are not charged directly
to shareholder accounts (see page ).
The following are projections based on historical expenses and are
calculated as a percentage of average net assets. A portion of the
brokerage commissions that the funds paid were used to reduce fund
expenses. Without this reduction, the total fund operating expenses would
have been .93% for Trend Fund and 1.12% for Value Fund.
TREND FUND
Management fee . 65 %
12b-1 fee None
Other expenses .27 %
Total fund operating expenses . 92 %
VALUE FUND
Management fee .72 %
12b-1 fee None
Other expenses .39%
Total fund operating expenses 1.11 %
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
TREND FUND
After 1 year $ 9
After 3 years $ 29
After 5 years $ 51
After 10 years $ 113
VALUE FUND
After 1 year $ 11
After 3 years $ 35
After 5 years $ 61
After 10 years $ 135
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of expenses
for portfolio management,
shareholder statements, tax
reporting, and other services.
These costs are paid from the
fund's assets; their effect is
already factored into any
quoted share price or return.
(checkmark)
FINANCIAL HIGHLIGHTS
The tables that follow have been audited by Coopers & Lybrand,
independent accountants. Their unqualified reports are included in each
fund's Annual Report. Each fund's Annual Report is incorporated by
reference into (is legally a part of) the Statement of Additional
Information.
TREND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Years Ended 1984 1985 1986 1987 1988 1989 1990 1991 1992 C 1993
December 31
2.Selected Per-Share
Data and Ratios
3.Net asset value, $ 38.5 $ 36.8 $ 45.0 $ 39.8 $ 31.4 $ 37.4 $ 44.2 $ 38.2 $ 49.6 $ 54.2
beginning of period 6 6 2 3 0 3 2 5 3 0
4.Income from
Investment
Operations
5. Net investment 1.04 .98 .96 .67 .73 .85 .61 .66 .58 B .17
income
6. Net realized (1.91) 9.22 5.10 (2.46) 6.88 10.79 (6.20) 12.99 7.66 10.04
and unrealized
gain (loss) on
investments
7. Total from (.87) 10.20 6.06 (1.79) 7.61 11.64 (5.59) 13.65 8.24 10.21
investment
operations
8.Less
Distributions
9. From net (.83) (.79) (.61) (.44) (.52) (.63) (.24) (.48) (.44) (.26)
investment
income
10. In excess of -- -- -- -- -- -- -- -- -- (.01)
net
investment
income
11. From net -- (1.25) (10.6 (6.20) (1.06) (4.22) (.14) (1.79) (3.23) (5.06)
realized gain 4)
12. Total (.83) (2.04) (11.25 (6.64) (1.58) (4.85) (.38) (2.27) (3.67) (5.33)
distributions )
13.Net asset $ 36.8 $ 45.0 $ 39.8 $ 31.4 $ 37.4 $ 44.2 $ 38.2 $ 49.6 $ 54.2 $ 59.0
value, end of 6 2 3 0 3 2 5 3 0 8
period
14.Total return (2.18) 28.26 13.53 (4.16) 24.33 31.65 (12.66 36.28 16.77 19.15
% % % % % % )% % % % D
15.Net assets, $ 602 $ 713 $ 669 $ 599 $ 702 $ 889 $ 702 $ 892 $ 1,11 $ 1,39
end of period (in 5 3
millions)
16.Ratio of .56% .52% .52% .49% .47% .58% .61% .53% .56% .92%
expenses to A
average net assets
17.Ratio of .56% .52% .52% .49% .47% .58% .61% .53% .56% .93%
expenses to A
average net assets
before expense
reductions
18.Ratio of net 2.90 2.40 2.00 1.49 2.01 1.76 1.51% 1.43 1.14 .43%
investment income % % % % % % % %
to average net
assets
19.Portfolio 57% 62% 71% 128% 49% 67% 48% 57% 47% 50%
turnover rate
</TABLE>
A FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A
PORTION OF THE FUND'S EXPENSES.
B INVESTMENT INCOME AND EXPENSES PER SHARE HAVE BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING.
C AS OF JANUARY 1, 1992, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
D THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
VALUE
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20.Selected Per-Share
Data and Ratios
21.Year Ended
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
October 31
D
22.Net asset value,
$ 23.0 $ 18.5 $ 20.2 $ 26.4 $ 21.0 $ 27.1 $ 31.1 $ 23.6 $ 30.1 $ 33.4
beginning of period
4 3 9 9 1 8 6 1 9 1
23.Income from
Investment
Operations
24. Net investment
.94 H .69 .59 .26 A 1.08 G .39 B 1.25 C .81 .64 A .55 A,
income
E
25. Net realized
(1.55) 1.56 6.03 (3.23) 5.09 4.07 (5.65) 6.94 3.43 9.20
and unrealized
gain (loss) on
investments
26. Total from
(.61) 2.25 6.62 (2.97) 6.17 4.46 (4.40) 7.75 4.07 9.75
investment
operations
27.Less
Distributions
28. From net
(.27) (.49) (.42) (.15) -- (.48) (.30) (1.17 (.85) (.23)
investment income
)
29. From net
(3.63) -- -- (2.36) -- -- (2.85) -- -- (.15)
realized gain
30. Total
(3.90) (.49) (.42) (2.51) -- (.48) (3.15) (1.17 (.85) (.38)
distributions
)
31.Net asset value,
$ 18.5 $ 20.2 $ 26.4 $ 21.0 $ 27.1 $ 31.1 $ 23.6 $ 30.1 $ 33.4 $ 42.7
end of period
3 9 9 1 8 6 1 9 1 8
32.Total return
(3.93) 12.54 33.11 (12.25 29.37 16.76 (16.00 34.09 14.09 29.46
% % % )% % % )% % % % I
33.Net assets, end
$ 114 $ 101 $ 143 $ 92 $ 135 $ 139 $ 92 $ 124 $ 331 $ 1,62
of
3
period (in millions)
34.Ratio of
1.26 1.13 1.07 1.07% 1.11 1.13 1.06% .98% 1.00 1.11
expenses to
% % % % % B % % F
average net assets
35.Ratio of
1.26 1.13 1.07 1.07% 1.11 1.19 1.06% .98% 1.00 1.12
expenses to average
% % % % % % % F
net assets before
expense reductions
36.Ratio of net
4.84 3.43 2.20 1.02% 4.74 1.45 4.55% 2.93 2.01 1.43
investment income
% % % % G % C % % %
to average net
assets
37.Portfolio turnover
389% 246% 281% 442% 480% 386% 165% 137% 81% 117%
rate
</TABLE>
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
B INCLUDES $.03 PER SHARE OF INTEREST EXPENSE FOR THE YEAR ENDED OCTOBER
31, 1989. ALSO INCLUDES REDUCTION OF $.02 PER SHARE FROM FIDELITY SERVICE
CO. FOR ADJUSTMENTS TO PRIOR PERIODS' FEES.
C INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.74 PER SHARE.
D AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND RECEIVED FROM
AN IMPERIAL CHEMICAL INDUSTRIES PLC ADR WHICH AMOUNTED TO $.11 PER
SHARE.
F FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A
PORTION OF THE FUND'S EXPENSES.
G INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND THAT AMOUNTED
TO $.75 PER SHARE.
H EXPENSES HAVE BEEN LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN
ACCORDANCE WITH VARIOUS STATE EXPENSE LIMITATION REGULATIONS.
I THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Trend Fund's fiscal year runs from January 1 through December 31. Value
Fund's fiscal year runs from November 1 through October 31. The tables
below show each fund's performance over past fiscal years compared to two
measures: investing in a broad selection of stocks (S&P 500(Registered
trademark)), and not investing at all (inflation, or CPI). To help you
compare these funds to other funds, the chart on page 9 displays
calendar-year performance.
TREND FUND
Fiscal periods ended Past 1 Past 5 Past 10
December 31, 199 3 year years years
Average annual
total return 19.15% 16.87% 13.98%
Cumulative
total return 19.15% 118.02% 270.03%
S&P 500(Registered trademark) 10.08% 97.26%
302.35%
Consumer Price
Index 2.75% 21.00% 43.93%
VALUE FUND
Fiscal periods ended Past 1 Past 5 Past 10
October 31, 199 3 year years years
Average annual
total return 29.46% 14.20% 12.24%
Cumulative
total return 29.46% 94.24% 217.33%
S&P 500(Registered trademark) 14.94% 97.35%
307.69%
Consumer Price
Index 2.75% 21.21% 44.26%
UNDERSTANDING
PERFORMANCE
Because these funds invest
in stocks, their performance
is related to that of the overall
stock market. Historically,
stock market performance
has been characterized by
volatility in the short run and
growth in the long run. You
can see these two
characteristics reflected in the
fund's performance; the
year-by-year total returns on
page 9 show that short-term
returns can vary widely, while
the returns at left show
long-term growth.
(checkmark)
EXAMPLE: Mountain charts illustrate the growth of a hypothetical investment
over time. The charts below show the growth in value of a $10,000
investment made in each fund on its fiscal year end in 1983 through
its current fiscal year end.
TREND FUND
Fiscal years 1983 1988 1993
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9577.280000000001
Row: 3, Col: 1, Value: 8915.969999999999
Row: 4, Col: 1, Value: 9162.34
Row: 5, Col: 1, Value: 9157.15
Row: 6, Col: 1, Value: 8664.42
Row: 7, Col: 1, Value: 8926.349999999999
Row: 8, Col: 1, Value: 8679.98
Row: 9, Col: 1, Value: 9834.02
Row: 10, Col: 1, Value: 9613.59
Row: 11, Col: 1, Value: 9623.959999999999
Row: 12, Col: 1, Value: 9499.48
Row: 13, Col: 1, Value: 9782.309999999999
Row: 14, Col: 1, Value: 10849.5
Row: 15, Col: 1, Value: 10827.59
Row: 16, Col: 1, Value: 10589.35
Row: 17, Col: 1, Value: 10348.38
Row: 18, Col: 1, Value: 10967.25
Row: 19, Col: 1, Value: 11309.55
Row: 20, Col: 1, Value: 11493.02
Row: 21, Col: 1, Value: 11309.55
Row: 22, Col: 1, Value: 10816.64
Row: 23, Col: 1, Value: 11180.85
Row: 24, Col: 1, Value: 12087.25
Row: 25, Col: 1, Value: 12546.4
Row: 26, Col: 1, Value: 13000.66
Row: 27, Col: 1, Value: 14219.52
Row: 28, Col: 1, Value: 15070.54
Row: 29, Col: 1, Value: 14718.19
Row: 30, Col: 1, Value: 15321.37
Row: 31, Col: 1, Value: 15354.22
Row: 32, Col: 1, Value: 14100.08
Row: 33, Col: 1, Value: 14861.52
Row: 34, Col: 1, Value: 13693.98
Row: 35, Col: 1, Value: 14335.98
Row: 36, Col: 1, Value: 14622.64
Row: 37, Col: 1, Value: 14243.69
Row: 38, Col: 1, Value: 15953.07
Row: 39, Col: 1, Value: 16964.26
Row: 40, Col: 1, Value: 17197.25
Row: 41, Col: 1, Value: 16927.86
Row: 42, Col: 1, Value: 16745.84
Row: 43, Col: 1, Value: 17408.39
Row: 44, Col: 1, Value: 18500.51
Row: 45, Col: 1, Value: 19075.7
Row: 46, Col: 1, Value: 18602.44
Row: 47, Col: 1, Value: 13101.8
Row: 48, Col: 1, Value: 12362.8
Row: 49, Col: 1, Value: 13651.4
Row: 50, Col: 1, Value: 14333.97
Row: 51, Col: 1, Value: 15490.43
Row: 52, Col: 1, Value: 15681.72
Row: 53, Col: 1, Value: 16155.61
Row: 54, Col: 1, Value: 15807.8
Row: 55, Col: 1, Value: 16959.91
Row: 56, Col: 1, Value: 16738.18
Row: 57, Col: 1, Value: 16216.47
Row: 58, Col: 1, Value: 16607.76
Row: 59, Col: 1, Value: 16699.05
Row: 60, Col: 1, Value: 16246.91
Row: 61, Col: 1, Value: 16972.45
Row: 62, Col: 1, Value: 18305.57
Row: 63, Col: 1, Value: 18274.03
Row: 64, Col: 1, Value: 18781.64
Row: 65, Col: 1, Value: 19911.19
Row: 66, Col: 1, Value: 20848.67
Row: 67, Col: 1, Value: 20592.58
Row: 68, Col: 1, Value: 21914.2
Row: 69, Col: 1, Value: 22746.5
Row: 70, Col: 1, Value: 22856.25
Row: 71, Col: 1, Value: 21562.07
Row: 72, Col: 1, Value: 21822.74
Row: 73, Col: 1, Value: 22344.63
Row: 74, Col: 1, Value: 20414.36
Row: 75, Col: 1, Value: 20919.23
Row: 76, Col: 1, Value: 21294.42
Row: 77, Col: 1, Value: 20260.12
Row: 78, Col: 1, Value: 22181.69
Row: 79, Col: 1, Value: 22217.18
Row: 80, Col: 1, Value: 21776.08
Row: 81, Col: 1, Value: 19606.08
Row: 82, Col: 1, Value: 18105.33
Row: 83, Col: 1, Value: 17339.74
Row: 84, Col: 1, Value: 18891.19
Row: 85, Col: 1, Value: 19515.88
Row: 86, Col: 1, Value: 20740.4
Row: 87, Col: 1, Value: 22587.4
Row: 88, Col: 1, Value: 23092.51
Row: 89, Col: 1, Value: 23327.21
Row: 90, Col: 1, Value: 24419.08
Row: 91, Col: 1, Value: 22699.64
Row: 92, Col: 1, Value: 24271.12
Row: 93, Col: 1, Value: 24862.97
Row: 94, Col: 1, Value: 24699.7
Row: 95, Col: 1, Value: 24959.91
Row: 96, Col: 1, Value: 23531.3
Row: 97, Col: 1, Value: 26595.58
Row: 98, Col: 1, Value: 26761.7
Row: 99, Col: 1, Value: 27401.26
Row: 100, Col: 1, Value: 26511.08
Row: 101, Col: 1, Value: 26354.62
Row: 102, Col: 1, Value: 27002.03
Row: 103, Col: 1, Value: 26386.99
Row: 104, Col: 1, Value: 27870.62
Row: 105, Col: 1, Value: 27428.23
Row: 106, Col: 1, Value: 27838.25
Row: 107, Col: 1, Value: 28501.84
Row: 108, Col: 1, Value: 30179.69
Row: 109, Col: 1, Value: 31056.27
Row: 110, Col: 1, Value: 31801.17
Row: 111, Col: 1, Value: 31615.09
Row: 112, Col: 1, Value: 32941.95
Row: 113, Col: 1, Value: 31729.97
Row: 114, Col: 1, Value: 33453.17
Row: 115, Col: 1, Value: 34067.78
Row: 116, Col: 1, Value: 33975.88
Row: 117, Col: 1, Value: 35756.52
Row: 118, Col: 1, Value: 36537.71
Row: 119, Col: 1, Value: 37204.02
Row: 120, Col: 1, Value: 35480.81
Row: 121, Col: 1, Value: 37002.99
$
$37,003
VALUE FUND
Fiscal years 1983 1988 1993
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10520.84
Row: 3, Col: 1, Value: 10591.97
Row: 4, Col: 1, Value: 10275.72
Row: 5, Col: 1, Value: 9295.84
Row: 6, Col: 1, Value: 9404.720000000001
Row: 7, Col: 1, Value: 9228.449999999999
Row: 8, Col: 1, Value: 8538.9
Row: 9, Col: 1, Value: 8901.82
Row: 10, Col: 1, Value: 8637.41
Row: 11, Col: 1, Value: 9492.859999999999
Row: 12, Col: 1, Value: 9580.99
Row: 13, Col: 1, Value: 9606.92
Row: 14, Col: 1, Value: 9477.299999999999
Row: 15, Col: 1, Value: 9682.25
Row: 16, Col: 1, Value: 10620.1
Row: 17, Col: 1, Value: 10625.43
Row: 18, Col: 1, Value: 10582.8
Row: 19, Col: 1, Value: 10497.54
Row: 20, Col: 1, Value: 10859.89
Row: 21, Col: 1, Value: 10913.18
Row: 22, Col: 1, Value: 10998.44
Row: 23, Col: 1, Value: 10827.92
Row: 24, Col: 1, Value: 10444.25
Row: 25, Col: 1, Value: 10811.93
Row: 26, Col: 1, Value: 11328.82
Row: 27, Col: 1, Value: 11821.77
Row: 28, Col: 1, Value: 12234.67
Row: 29, Col: 1, Value: 13000.69
Row: 30, Col: 1, Value: 13918.83
Row: 31, Col: 1, Value: 13706.95
Row: 32, Col: 1, Value: 14092.68
Row: 33, Col: 1, Value: 14315.43
Row: 34, Col: 1, Value: 13739.55
Row: 35, Col: 1, Value: 14456.68
Row: 36, Col: 1, Value: 13766.72
Row: 37, Col: 1, Value: 14391.49
Row: 38, Col: 1, Value: 14223.07
Row: 39, Col: 1, Value: 13563.8
Row: 40, Col: 1, Value: 14497.78
Row: 41, Col: 1, Value: 15092.84
Row: 42, Col: 1, Value: 15189.01
Row: 43, Col: 1, Value: 14942.58
Row: 44, Col: 1, Value: 15309.23
Row: 45, Col: 1, Value: 15820.14
Row: 46, Col: 1, Value: 17106.42
Row: 47, Col: 1, Value: 16793.87
Row: 48, Col: 1, Value: 16878.02
Row: 49, Col: 1, Value: 12628.46
Row: 50, Col: 1, Value: 11678.77
Row: 51, Col: 1, Value: 12400.05
Row: 52, Col: 1, Value: 12868.89
Row: 53, Col: 1, Value: 14059.0
Row: 54, Col: 1, Value: 13968.84
Row: 55, Col: 1, Value: 13932.78
Row: 56, Col: 1, Value: 13902.73
Row: 57, Col: 1, Value: 14491.77
Row: 58, Col: 1, Value: 14551.88
Row: 59, Col: 1, Value: 14389.59
Row: 60, Col: 1, Value: 15435.45
Row: 61, Col: 1, Value: 16337.06
Row: 62, Col: 1, Value: 15651.84
Row: 63, Col: 1, Value: 16001.89
Row: 64, Col: 1, Value: 16632.41
Row: 65, Col: 1, Value: 16252.87
Row: 66, Col: 1, Value: 16944.62
Row: 67, Col: 1, Value: 17875.1
Row: 68, Col: 1, Value: 18450.53
Row: 69, Col: 1, Value: 18983.11
Row: 70, Col: 1, Value: 20752.26
Row: 71, Col: 1, Value: 20831.84
Row: 72, Col: 1, Value: 20440.06
Row: 73, Col: 1, Value: 19074.94
Row: 74, Col: 1, Value: 19540.18
Row: 75, Col: 1, Value: 19673.51
Row: 76, Col: 1, Value: 17895.5
Row: 77, Col: 1, Value: 17997.29
Row: 78, Col: 1, Value: 18397.69
Row: 79, Col: 1, Value: 18241.6
Row: 80, Col: 1, Value: 19422.42
Row: 81, Col: 1, Value: 18832.01
Row: 82, Col: 1, Value: 18655.57
Row: 83, Col: 1, Value: 17020.07
Row: 84, Col: 1, Value: 16388.94
Row: 85, Col: 1, Value: 16022.48
Row: 86, Col: 1, Value: 16748.61
Row: 87, Col: 1, Value: 17150.98
Row: 88, Col: 1, Value: 18061.91
Row: 89, Col: 1, Value: 19150.74
Row: 90, Col: 1, Value: 19527.92
Row: 91, Col: 1, Value: 19784.12
Row: 92, Col: 1, Value: 20887.19
Row: 93, Col: 1, Value: 19919.34
Row: 94, Col: 1, Value: 20894.31
Row: 95, Col: 1, Value: 21399.59
Row: 96, Col: 1, Value: 21235.9
Row: 97, Col: 1, Value: 21484.99
Row: 98, Col: 1, Value: 20260.93
Row: 99, Col: 1, Value: 21643.8
Row: 100, Col: 1, Value: 22538.9
Row: 101, Col: 1, Value: 23419.32
Row: 102, Col: 1, Value: 23221.23
Row: 103, Col: 1, Value: 23874.21
Row: 104, Col: 1, Value: 24116.32
Row: 105, Col: 1, Value: 23800.84
Row: 106, Col: 1, Value: 24556.54
Row: 107, Col: 1, Value: 23984.26
Row: 108, Col: 1, Value: 24409.8
Row: 109, Col: 1, Value: 24512.52
Row: 110, Col: 1, Value: 25591.04
Row: 111, Col: 1, Value: 26221.53
Row: 112, Col: 1, Value: 26941.05
Row: 113, Col: 1, Value: 27081.99
Row: 114, Col: 1, Value: 28409.75
Row: 115, Col: 1, Value: 28565.52
Row: 116, Col: 1, Value: 29158.94
Row: 117, Col: 1, Value: 29158.94
Row: 118, Col: 1, Value: 29782.03
Row: 119, Col: 1, Value: 30820.5
Row: 120, Col: 1, Value: 30805.67
Row: 121, Col: 1, Value: 31732.88
$
$31,733
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
S&P 500(Registered trademark) is the Standard & Poor's 500
Composite Stock Price Index, a widely recognized, unmanaged index of common
stock prices. The S&P 500 figures assume reinvestment of all dividends
paid by stocks included in the index. They do not, however, include any
allowance for the brokerage commissions or other fees you would pay if you
actually invested in those stocks.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGES, which assume reinvestment of distributions,
are published by Lipper Analytical Services, Inc. Trend Fund
compares its performance to the Lipper Growth Funds Average , and
Value Fund compares to the Lipper Capital Appreciation Funds
Average . These averages currently reflect the performance of over
440 and 150 mutual funds with similar objectives, respectively.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
FIDELITY TREND FUND
Calendar year total returns 1984 1985 1986 1987 1988 1989 1990 1991 1992
1993
Fidelity Trend Fund -2.18% 28.26% 13.53% -4.16% 24.33% 31.65% -12.66% 36.28
% 16.77% 19.15%
Competitive funds average -2.03% 28.49% 14.20% 2.59% 14.33% 26.77% -4.72%
37.0
8% 7.86% 10.61%
Percentage (%)
Row: 1, Col: 1, Value: -2.18
Row: 1, Col: 2, Value: -2.03
Row: 2, Col: 1, Value: 28.26
Row: 2, Col: 2, Value: 28.49
Row: 3, Col: 1, Value: 13.53
Row: 3, Col: 2, Value: 14.2
Row: 4, Col: 1, Value: -4.159999999999999
Row: 4, Col: 2, Value: 2.59
Row: 5, Col: 1, Value: 24.33
Row: 5, Col: 2, Value: 14.33
Row: 6, Col: 1, Value: 31.65
Row: 6, Col: 2, Value: 26.77
Row: 7, Col: 1, Value: -12.66
Row: 7, Col: 2, Value: -4.72
Row: 8, Col: 1, Value: 36.28
Row: 8, Col: 2, Value: 37.08
Row: 9, Col: 1, Value: 16.77
Row: 9, Col: 2, Value: 7.859999999999999
Row: 10, Col: 1, Value: 19.15
Row: 10, Col: 2, Value: 10.61
Fidelity
Trend Fund
Competitive
funds
average
FIDELITY VALUE FUND
Calendar year total returns 1984 1985 1986 1987 1988 1989 1990 1991 1992
1993
Fidelity Value Fund -8.59% 22.10% 14.74% -8.58% 29.05% 22.95% -12.82% 26.20
% 21.15% 22.94%
Competitive funds average -7.03% 27.33% 14.51% 1.13% 13.84% 26.70% -7.76%
40.3
5% 8.28% 15.16%
Percentage (%)
Row: 1, Col: 1, Value: -8.59
Row: 1, Col: 2, Value: -7.03
Row: 2, Col: 1, Value: 22.1
Row: 2, Col: 2, Value: 27.33
Row: 3, Col: 1, Value: 14.74
Row: 3, Col: 2, Value: 14.51
Row: 4, Col: 1, Value: -8.58
Row: 4, Col: 2, Value: 1.13
Row: 5, Col: 1, Value: 29.05
Row: 5, Col: 2, Value: 13.84
Row: 6, Col: 1, Value: 22.95
Row: 6, Col: 2, Value: 26.7
Row: 7, Col: 1, Value: -12.8
Row: 7, Col: 2, Value: -7.76
Row: 8, Col: 1, Value: 26.2
Row: 8, Col: 2, Value: 40.34999999999999
Row: 9, Col: 1, Value: 21.15
Row: 9, Col: 2, Value: 8.279999999999999
Row: 10, Col: 1, Value: 22.44
Row: 10, Col: 2, Value: 15.16
Fidelity
Value Fund
Competitive
funds
average
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 75 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(bullet) Number of Fidelity mutual
funds: over 200
(bullet) Assets in Fidelity mutual
funds: over $ 225 billion
(bullet) Number of shareholder
accounts: over 15 million
(bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENAN T
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age
and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(Registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business
days to ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (bullet) Exchange from another (bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (bullet) Complete and sign the (bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund .
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your chec k and m ail to
indicated on the the address printed on
application. your account statement.
(bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (bullet) Bring your application (bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (bullet) Call 1-800-544-7777 to (bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Automatically (automatic_graphic) (bullet) Not available. (bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is being mailed to a different address than the one on
your account (record address),
(bullet) The check is being made payable to someone other than the account
owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name,
(bullet) The fund's name,
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (bullet) Maximum check request:
except retirement $100,000.
(bullet) For Money Line transfers to
All account types your bank account; minimum:
$ 10 ; maximum: $100,000.
(bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affects your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Financial reports (every six months)
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For complete policies and
restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up monthly or quarterly redemptions
from your account.
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in February (Trend Fund only) and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days, or longer for a December
ex-dividend date.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(bullet) For existing accounts, call
1-800-544-6666 for an application.
(bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
</TABLE>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(bullet) Changes require a new authorization
form.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
SHAREHOLDER AND ACCOUNT POLICIES
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's net asset value as of the
close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding up the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they are of
a size that would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) Each fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees a fund or its transfer agent has
incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
Fidelity Distributors Corporation (FDC) may enter confirmed purchase orders
on behalf of customers by phone, with payment to follow no later than the
time when a fund is priced on the following business day. If payment is not
received by that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) Each fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed when the
NYSE is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.
TO SELL CERTIFICATE SHARES, call 1-800-544-6666 for instructions. The funds
no longer issue certificate shares.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Because excessive trading can hurt fund performance and
shareholders, each fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
(bullet) Each fund reserves the right to refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to invest
the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if a fund receives or
anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical t erms, Trend
Fund is currently a diversified, open-end management investment company
organized as a Massachusetts business trust on December 31, 1984. Value
Fund is currently a diversified fund of Fidelity Capital Trust, an
open-end management investment company organized as a Massachusetts
business trust on May 31, 1978. There is a remote possibility that one fund
might become liable for a misstatement in the prospectus about the other
fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East)
assist FMR with foreign investments.
Alan Leifer is manager and vice president of Trend Fund, which he has
managed since June 1987. Previously, Mr. Leifer managed Contrafund and
Select Industrial Materials, and was an assistant on Equity-Income. He
joined Fidelity in 1979.
Jeffrey Ubben is manager and vice president of Value Fund, which he has
managed since December 1992. Previously, he managed Utilities
Income, Qualified Dividend, and Select Defense and Aerospace, Utilities,
and Electric Utilities. He was also a research analyst for the aerospace
and defense, textiles and apparel, toy and business service industries. He
joined Fidelity in 1987.
FDC distributes and markets Fidelity's funds and services. Fidelity Service
Co. (FSC) performs transfer agent servicing functions for the funds.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trusts), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
A broker-dealer may use a portion of the commissions paid by a fund to
reduce the fund's custodian or transfer agent fees. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
a fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The amount of
the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE
ADJUSTMENT. The performance adjustment either increases or decreases the
management fee, depending on how well a fund has performed relative to the
S&P 500.
Manage = Ba +/- Performa
ment sic nce
fee fee adjustme
nt
THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate
to an individual fund fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on the average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management increase.
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives
is designed to be responsive
to changes both in the size of
the fund and in FMR's total
assets under management.
Building these two variables
into the fee calculation
assures shareholders that
they will pay a lower rate as
FMR's assets under
management increase.
A third variable, the
performance adjustment,
rewards FMR when the fund
outperforms the S&P
500 (an established index of
stock market performance)
and reduces FMR's fee when
the fund underperforms this
index.
(checkmark)
For October 1993 and December 1993, the group fee rate was .3254 %
and .3243 %, respectively. The individual
fund fee rate is .30% for Trend Fund an d .35% for Value Fund.
The basic fee rate at each fund's fiscal year end was .6243 % for
Trend Fund and .6754 % for Value Fund.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing each
fund's performance to that of the S&P 500 over the most recent
36-month period. The difference is translated into a dollar amount that is
added to or subtracted from the basic fee. The maximum annualized
performance adjustment rate is ".20%.
The total management fee for fiscal 1993 was .65% for Trend Fund and .72%
for Value Fund.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on companies
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In fiscal
1993, Trend Fund and Value Fund paid FSC fees equal to .25 %
and .35 %, respectively, of average net assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1993, the portfolio turnover rates for Trend Fund and Value
Fund were 50% and 117 %, respectively. These rates vary from year
to year.
INVESTMENT PRINCIPLES
TREND FUND SEEKS CAPITAL APPRECIATION by investing in securities of
well-known and established companies as well as smaller, less well-known
companies, which tend to carry more risk.
When choosing the fund's investments, FMR examines the momentum of
earnings and price trends of companies, industries, and the market. FMR
also analyzes the fundamental values of companies and industries. Depending
on FMR's analysis, the fund may purchase any type of domestic or foreign
security in any amount. For example, the fund may be heavily invested in
"cyclical" industries, such as capital goods companies, or in "defensive"
industries, such as utilities and food companies. This flexibility allows
the fund to respond to changes in a company's earnings and assets.
VALUE FUND SEEKS CAPITAL APPRECIATION by investing in securities of
companies that possess valuable assets, or that FMR believes are
undervalued in the marketplace. The fund invests primarily in stocks and
convertible securities, but it may invest in other types of instruments as
well.
Valuable assets may include equipment, natural resources, or real estate.
Many intangible assets such as franchises, trademarks, and transportation
routes can also add to a domestic or foreign company's value. When
determining whether a company is undervalued, FMR considers assets,
earnings, growth potential, and other factors. A company may be undervalued
in relation to the market in general or in its potential for growth of
earnings and book value. A company may also be undervalued if it has the
potential for sharply improved earnings or if it recently changed
management or control.
FMR normally invests the fund's assets according to its investment
strategy. When FMR considers it appropriate for defensive purposes
however, it may temporarily invest substantially in investment-grade debt
securities and in obligations of banks and of the U.S. government.
EACH FUND WILL SPREAD INVESTMENT RISK by limiting its holdings in any one
company or industry. FMR may use various investment techniques to
hedge a fund's risks, but there is no guarantee that these strategies will
work as FMR intends. When you sell your shares, they may be worth more or
less than what you paid for them.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the funds may invest, and strategies FMR may employ in
pursuit of the funds' investment objectives. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. As a shareholder, you will receive financial
reports every six months detailing fund holdings and describing recent
investment activities.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. This ownership interest
often gives a fund the right to vote on measures affecting the company's
organization and operations. Although common stocks have a history of
long-term growth in value, their prices tend to fluctuate in the short
term, particularly those of smaller companies.
RESTRICTIONS: A fund may not own more than 10% of the outstanding voting
securities of a single issuer. For Trend Fund, this restriction applies to
75% of its total assets.
TREND FUND
Fiscal 1993 Debt Holdings, by Rating MOODY'S STANDARD &
POOR'S
INVESTORS SERVICE, INC. CORPORATION
Rating Average A Rating Averag
eA
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa 0.0 % AA 0.0 %
Upper-medium grade A A
Medium grade Baa 0.0 % BBB 0.2 %
LOWER QUALITY
Moderately speculative Ba 0.7 % BB 0.5 %
Speculative B 0.4 % B 0.5 %
Highly speculative Caa 0.0% CCC 0.0 %
Poor quality Ca 0.0% CC 0.0 %
Lowest quality, no interest C C
In default, in arrears -- 0.0% D 0.0 %
1.1 % 1.2 %
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities ( sometimes called "junk bonds") are
often considered to be speculative and involve greater risk of default or
price changes due to changes in the issuer's creditworthiness. The market
prices of these securities may fluctuate more than higher-quality
securities and may decline significantly in periods of general economic
difficulty.
The tables below and on page 28 provide a summary of ratings assigned to
debt holdings (not including money market instruments) in each fund's
portfolio. These figures are dollar-weighted averages of month-end
portfolio holdings during fiscal 1993, and are presented as a percentage of
total investments. These percentages are historical and do not necessarily
indicate a fund's current or future debt holdings.
RESTRICTIONS: A fund does not currently intend to invest more than
35% of its assets in lower-quality debt securities (those rated below Baa
by Moody's or BBB by S&P, and unrated securities judged by FMR to be of
equivalent quality).
VALUE FUND
Fiscal 1993 Debt Holdings, by Rating MOODY'S STANDARD &
POOR'S
INVESTORS SERVICE, INC. CORPORATION
Rating Average A Rating Averag
eA
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa 0.0% AA 0.0%
Upper-medium grade A A
Medium grade Baa 0.0% BBB 0.0%
LOWER QUALITY
Moderately speculative Ba 0.4% BB 0.4%
Speculative B 0.3% B 0.3%
Highly speculative Caa 0% CCC 0.0%
Poor quality Ca 0% CC 0.0%
Lowest quality, no interest C C
In default, in arrears -- D 0.0%
0.7% 0.7%
A THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED BY MOODY'S OR
S&P AMOUNTED TO 0.1% AND 0.3 % FOR TREND FUND AND VALUE FUND,
RESPECTIVELY. THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. UNRATED
SECURITIES ARE NOT NECESSARILY LOWER-QUALITY SECURITIES. REFER TO THE
FUNDS'
STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF
THESE RATINGS.
FOREIGN SECURITIES and foreign currencies may involve additional risks.
These include currency fluctuations, risks relating to political or
economic conditions in the foreign country, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
In addition to the political and economic factors that can affect
foreign securities, a governmental issuer may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. These factors could make foreign investments,
especially those in developing countries, more volatile.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities may be subject to legal restrictions.
Difficulty in selling securities may result in a loss or may be costly to a
fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: A fund may not invest more than 5% of its total assets in any
one issuer. For Trend Fund, this restriction only applies to 75% of its
total assets. A fund also may not invest more than 25% of its total assets
in any one industry. These limitations do not apply to U.S. government
securities.
BORROWING. A fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering a fund's securities. A fund
may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
TREND FUND seeks growth of capital by investing in securities of well-known
and established companies as well as smaller, less well-known companies.
FMR seeks to take advantage of trends in security values reflecting changes
in general and particular economic and financial conditions. Purchases and
sales of securities for the fund are based on FMR's study of momentum in
trends of individual company, industry, and general market security prices
and earnings, and on a fundamental analysis of the particular
company and its industry. Securities may be purchased for the short
term when FMR believes doing so will benefit shareholders and is consistent
with sound investment procedure. There is no restriction as to the type of
security that may be purchased, and the fund may invest substantially in
cyclical or defensive industries. With respect to 75% of total assets, the
fund may not invest more than 5% of its total assets in any one issuer and
may not own more than 10% of the outstanding voting securities of a single
issuer.
VALUE FUND seeks capital appreciation by investing in securities of
companies that possess valuable fixed assets, or that FMR believes are
undervalued in the marketplace in relation to factors such as the issuing
company's assets, earnings, or growth potential. Such companies will
generally have one or more of the following attributes: (1) valuable fixed
assets; (2) valuable consumer or commercial franchises or potentially
valuable transportation routes; (3) selling at low market valuations of
assets relative to the securities market in general, or companies that may
currently be earning a very low return on assets but which have the
potential to earn higher returns if conditions in the industry improve; (4)
are undervalued in relation to their potential for growth in earnings,
dividends, and book value; or (5) have recently changed management or
control and have the potential for a "turnaround" in earnings. The fund
expects to invest primarily in stocks and convertible securities, but it
may also invest in debt obligations consistent with its objective. FMR can
also make substantial temporary investments in investment-grade debt
securities and in obligations of banks and of the U.S. government for
defensive purposes when it believes market conditions warrant. The fund
may not invest more than 5% of its total assets in any one issuer and may
not own more than 10% of the outstanding voting securities of a single
issuer.
EACH FUND may not invest more than 25% of its total assets in any one
industry. Each fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets. Loans, in the
aggregate, may not exceed 33% of a fund's total assets.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY VALUE FUND
A FUND OF FIDELITY CAPITAL TRUST
AND
FIDELITY TREND FUND
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 19, 1994
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated February 19, 1994). Please retain this
document for future reference. The Annual Report for Value Fund for the
fiscal year ended October 31, 1993 and the Annual Report for Trend Fund for
the fiscal year ended December 31, 1993 are incorporated herein by
reference. To obtain an additional copy of the Prospectus or an Annual
Report, please call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Distribution and Service Plans
Contracts with Companies Affiliated with FMR
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
TRE/VAL-ptb-294
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940) of the fund.
INVESTMENT LIMITATIONS OF TREND FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the fund and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page 8.
INVESTMENT LIMITATIONS OF VALUE FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the security of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof; (a) more than 5% of the fund's
total assets (taken at current value) would be invested in the securities
of such issuer or (b) the fund would own more than 10% of the outstanding
voting securities of such issuer;
(2) issue senior securities;
(3) make short sales of securities (unless it owns, or by virtue of its
ownership of other securities has the right to obtain securities equivalent
in kind and amount to the securities sold); provided, however, that the
fund may purchase or sell futures contracts;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions; provided, however, that
the fund may make initial and variation margin payments in connection with
purchases or sales of futures contracts or of options on futures contracts;
(5) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amounted
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of a decline in
net assets will be reduced with three days (exclusive of Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(6) underwrite any issue of securities, except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(7) purchase the security of any issuer (other than obligations issued or
guaranteed by the government of the United States, it agencies or
instrumentalities) if, as a result thereof, more than 25% of the fund's
total assets (taken at current value), would be invested in the securities
of one or more issuers having their principal business activities in the
same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interest in pools of real estate mortgage loans;
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities);
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties except (i) through
the purchase of a portion of an issue of debt securities in accordance with
its investment objective, policies, and limitations or (ii) by engaging in
repurchase agreements with respect to portfolio securities;
(11) purchase securities of other investment companies except in the open
market where no commission except the ordinary broker's commission is paid,
or as a part of a merger or consolidation, and in no event may investments
in such securities exceed 10% of the total assets of the fund;
(12) purchase the security of any issuer (other than obligations issued or
guaranteed by the government of the United States, its agencies or
instrumentalities) if, as a result thereof, more than 5% of the fund's
total assets (taken at current value) would be invested in the securities
of companies which, including predecessors, have a record of less than
three years' continuous operation; or
(13) invest in oil, gas, or other mineral exploration or development
programs.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (5)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(v) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(vi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page 8.
INVESTMENT POLICIES SHARED BY THE FUNDS
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (SEC), the funds may engage in
transactions with banks that are, or may be considered to be, "affiliated
persons" of the funds under the Investment Company Act of 1940. Such
transactions may be entered into only pursuant to procedures established
and periodically reviewed by each fund's Board of Trustees. These
transactions may include repurchase agreements with custodian banks;
purchases, as principal, of short-term obligations of, and repurchase
agreements with, the 50 largest U.S. banks (measured by deposits);
transactions in municipal securities; and transactions in U.S. government
securities with affiliated banks that are primary dealers in these
securities.
FUND'S RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that each fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against the funds and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Boards of Trustees, FMR determines
the liquidity of each fund's investments and, through reports from FMR, the
Boards monitor investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment). Investments currently considered
by the funds to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days,
over-the-counter options, and non-government stripped fixed-rate
mortgage-backed securities. Also, FMR may determine some restricted
securities, government-stripped fixed-rate mortgage-backed securities,
loans and other direct debt instruments, and swap agreements to be
illiquid. However, with respect to over-the-counter options a fund writes,
all or a portion of the value of the underlying instrument may be illiquid
depending on the assets held to cover the option and the nature and terms
of any agreement the fund may have to close out the option before
expiration. In the absence of market quotations, illiquid investments are
priced at fair value as determined in good faith by a committee appointed
by each fund's Board of Trustees. If through a change in values, net
assets, or other circumstances, a fund were in a position where more than
10% of its net assets were invested in illiquid securities, it would seek
to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, the fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest
or principal payments on such indebtedness, a fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral can be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries will also involve
a risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, a fund could become part owner of any
collateral, and would bear the costs and liabilities associated with owning
and disposing of the collateral. In addition, it is conceivable that under
emerging legal theories of lender liability, a fund could be held liable as
a co-lender. Direct debt instruments may also involve a risk of insolvency
of the lending bank or other intermediary. Direct debt instruments that are
not in the form of securities may offer less legal protection to a fund in
the event of fraud or misrepresentation. In the absence of definitive
regulatory guidance, the funds rely on FMR's research in an attempt to
avoid situations where fraud or misrepresentation could adversely affect
the funds.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, a fund has direct recourse against the borrower, it may
have to rely on the agent to apply appropriate credit remedies against a
borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by a fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring a fund to increase its investment in a
borrower at a time when it would not otherwise have done so even if the
borrower's condition makes it unlikely that the amount will ever be
repaid . Each fund will set aside appropriate liquid assets in a
segregated custodial account to cover its potential obligations under
standby financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and (5)
for Trend Fund and limitations (1) and (7) for Value Fund). For purposes of
these limitations, a fund generally will treat the borrower as the
"issuer" of indebtedness held by the fund. In the case of loan
participations where a bank or other lending institution serves as
financial intermediary between a fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes.
Treating a financial intermediary as an issuer of indebtedness may restrict
a fund's ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
INTERFUND BORROWING PROGRAM. The fund has received permission from the SEC
to lend money to and borrow from other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally will extend overnight,
but can have a maximum duration of seven days. Loans may be called on one
day's notice. The fund will lend through the program only when the returns
are higher than those available at the same time from other short-term
instruments (such as repurchase agreements), and will borrow through the
program only when the costs are equal to or lower than the cost of bank
loans. The fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
Each fund may engage in a repurchase agreement with respect to any security
in which it is authorized to invest. While it does not presently appear
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities,
as well as delays and costs to the fund in connection with bankruptcy
proceedings), it is each fund's current policy to limit repurchase
agreement transactions to those parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, a fund will maintain appropriate liquid assets in a segregated
custodial account to cover its obligation under the agreement. Each fund
will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of a fund's assets and may be
viewed as a form of leverage.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many different
forms and are known by a variety of names. A fund is not limited to any
particular form of swap agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if a fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than the underlying instruments.
SECURITIES LENDING. Each fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of securities
denominated in or indexed to foreign currencies, and of dividends and
interest from such securities, can change significantly when foreign
currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity
than U.S. markets, and prices on some foreign markets can be highly
volatile. Many foreign countries lack uniform accounting and disclosure
standards comparable to those applicable to U.S. companies, and it may be
more difficult to obtain reliable information regarding an issuer's
financial condition and operations. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions, and
custodial costs, are generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be difficult
to enforce legal rights in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
Each fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad, they may be less liquid
than foreign securities of the same class that are not subject to such
restrictions.
American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs) are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
FOREIGN CURRENCY TRANSACTIONS. Each fund may hold foreign currency deposits
from time to time, and may convert dollars and foreign currencies in the
foreign exchange markets. Currency conversion involves dealer spreads and
other costs, although commissions usually are not charged. Currencies may
be exchanged on a spot (i.e., cash) basis, or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. Forward contracts generally are traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts to manage currency risks and
to facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the fund.
In connection with purchases and sales of securities denominated in foreign
currencies, a fund may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the funds' foreign investments. A fund
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.
A fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, each fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. Each fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change a fund's investment exposure to changes in currency
exchange rates, and could result in losses to the fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged a fund by selling that currency in exchange for
dollars, the fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, a fund
could realize currency losses from the hedge and the security position at
the same time if the two currencies do not move in tandem. Similarly, if
FMR increases a fund's exposure to a foreign currency, and that currency's
value declines, the fund will realize a loss. There is no assurance that
FMR's use of forward currency contracts will be advantageous to a fund or
that it will hedge at an appropriate time. The policies described in this
section are non-fundamental policies of the funds.
LOWER-RATED DEBT SECURITIES. While the market for high-yield corporate debt
securities has been in existence for many years and has weathered previous
economic downturns, the 1980s brought a dramatic increase in the use of
such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession. In fact, from 1989 to 1991, the percentage
of lower-rated debt securities that defaulted rose significantly above
prior levels, although the default rate decreased in 1992.
The market for lower-rated debt securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not
available, lower-rated debt securities will be valued in accordance with
procedures established by each fund's Board of Trustees, including the use
of outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-rated debt
securities and the funds' ability to dispose of these securities.
Since the risk of default is higher for lower-rated debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type held by the funds. In considering investments for
the funds, FMR will attempt to identify those issuers of high-yielding debt
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the fund's shareholders.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The funds will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales against the box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Section 4.5 of the
regulations under the Commodity Exchange Act, which limits the extent to
which the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, a fund's total obligations upon settlement or exercise of purchased
futures contracts and written put options would exceed 25% of its total
assets; or (c) purchase call options if, as a result, the current value of
option premiums for call options purchased by the fund would exceed 5% of
the fund's total assets. These limitations do not apply to options attached
to or acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500). Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures contract
the fund will be required to make margin payments to an FCM as described
above for futures contracts. A fund may seek to terminate its position in a
put option it writes before exercise by closing out the option in the
secondary market at its current price. If the secondary market is not
liquid for a put option the fund has written, however, the fund must
continue to be prepared to pay the strike price while the option is
outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the SEC with respect to coverage of options
and futures strategies by mutual funds, and if the guidelines so require
will set aside appropriate liquid assets in a segregated custodial account
in the amount prescribed. Securities held in a segregated account cannot be
sold while the futures or option strategy is outstanding, unless they are
replaced with other suitable assets. As a result, there is a possibility
that segregation of a large percentage of a fund's assets could impede
portfolio management or a fund's ability to meet redemption requests or
other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the funds by FMR pursuant to authority contained in their
management contracts. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Commissions for foreign investments traded on foreign exchanges
generally will be higher than for U.S. investments and may not be subject
to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of research
and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
funds to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
funds and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to September 4, 1992, FBSL operated under the name
Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of
Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of
FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have
entered into arrangements with FMR under which the broker-dealer allocates
a portion of the commissions paid by the fund toward payment of the fund's
expenses, such as transfer agent fees of FSC or custodian fees. The
transaction quality must, however, be comparable to those of other
qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except in accordance with
SEC regulations. Pursuant to such regulations, each fund's Board of
Trustees has approved a written agreement that permits FBSI to effect
portfolio transactions on national securities exchanges and to retain
compensation in connection with such transactions.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the fund and review the commissions paid by the fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
TREND FUND. For the fiscal years ended December 31, 1993 and 1992, the
fund's annual portfolio turnover rates were 50 % and 47%,
respectively.
For fiscal 1993, 1992, and 1991, the fund paid brokerage commissions of
$ 1,207,000 , $1,106,883, and $1,113,699, respectively. During fiscal
1993, approximately $ 698,000 or 57.8 % of these commissions
were paid to brokerage firms that provided research services, although the
provision of such services was not necessarily a factor in the placement of
all of this business with such firms. The fund pays both commissions and
spreads in connection with the placement of portfolio transactions; FBSI is
paid on a commission basis. During fiscal 1993, 1992, and 1991, the fund
paid brokerage commissions of $ 447,000 , $207,842, and $307,021,
respectively, to FBSI. During fiscal 1993, this amounted to approximately
37 % of the aggregate brokerage commissions paid by the fund for
transactions involving approximately 51.8 % of the aggregate dollar
amount of transactions in which the fund paid brokerage commissions. The
difference in the percentage of brokerage commissions paid to and the
percentage of the dollar amount of transactions effected through FBSI is a
result of the low commission rates charged by FBSI. During fiscal 1993,
1992, and 1991, the fund paid no brokerage commissions to FBSL or its
predecessor.
VALUE FUND. For the fiscal years ended October 31, 1993 and 1992, the
fund's annual portfolio turnover rates were 117 % and 81%,
respectively.
For fiscal 1993, 1992, and 1991, the fund paid brokerage commissions of
$ 3,819,000 , $551,137, and $360,699, respectively. During fiscal
1993, approximately $ 2,422,000 or 63.4 % of these commissions
were paid to brokerage firms that provided research services, although the
provision of such services was not necessarily a factor in the placement of
all of this business with such firms. The fund pays both commissions and
spreads in connection with the placement of portfolio transactions; FBSI is
paid on a commission basis. During fiscal 1993, 1992, and 1991, the fund
paid brokerage commissions of $ 1,148,000 , $136,602, and $103,907,
respectively, to FBSI. During fiscal 1993, this amounted to approximately
30 % of the aggregate brokerage commissions paid by the fund for
transactions involving approximately 39.8 % of the aggregate dollar
amount of transactions in which the fund paid brokerage commissions. The
difference in the percentage of brokerage commissions paid to and the
percentage of the dollar amount of transactions effected through FBSI is a
result of the low commission rates charged by FBSI. For fiscal 1992, the
fund paid $309, to FBSL for brokerage commissions. During fiscal 1993
and 1991 the fund paid no brokerage commissions to FBSL or its
predecessor.
From time to time each fund's Trustees will review whether the recapture
for the benefit of the fund of some portion of the brokerage commissions or
similar fees paid by the fund on portfolio transactions is legally
permissible and advisable. The funds seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine, in the exercise of their business
judgment, whether it would be advisable for the funds to seek such
recapture.
Although the Trustees and officers of the funds are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of a security as far as the funds are
concerned. In other cases, however, the ability of the funds to participate
in volume transactions will produce better executions and prices for the
funds. It is the current opinion of each fund's Trustees that the
desirability of retaining FMR as investment adviser to the funds outweighs
any disadvantages that may be said to exist from exposure to simultaneous
transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Equity securities for which the
primary market is the U.S. are valued at last sale price or, if no sale has
occurred, at the closing bid price. Equity securities for which the primary
market is outside the U.S. are valued using the official closing price or
the last sale price in the principal market where they are traded. If the
last sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price is normally used. Short-term securities are valued
either at amortized cost or at original cost plus accrued interest, both of
which approximate current value. Fixed-income securities are valued
primarily by a pricing service that uses a vendor security valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. This twofold approach is believed to more accurately
reflect fair value because it takes into account appropriate factors such
as institutional trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data, without exclusive reliance upon quoted, exchange, or over-the
counter prices. Use of pricing services has been approved by the Board of
Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the funds if, in the opinion of a committee
appointed by the Boards of Trustees, some other method (e.g.,
closing over-the-counter bid prices in the case of debt instruments traded
on an exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by the fund s are
determined as of such time for the purpose of computing e ach fund's
net asset value. Foreign security prices are furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currency into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
net asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be valued
as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The funds may quote their performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price and total
returns fluctuate in response to market conditions and other factors, and
the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's returns, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's net asset
value per share (NAV) over the period. Average annual returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then calculating
the annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. For example, a cumulative return of 100% over ten years would
produce an average annual return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a compounded basis in ten years.
While average annual returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance of a fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. An example of this type of
illustration is given on page 12 and 13 for each fund. Total returns and
other performance information may be quoted numerically or in a table,
graph, or similar illustration. The funds may quote total returns on a
before-tax or after-tax basis.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the fund
and reflects all elements of its return. Unless otherwise indicated, the
fund's adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On December 31, 1993, the 13-week and 39-week long-term moving
averages for Trend Fund were $ 58.26 and $ 55.46 ,
respectively . On October 29, 1993, the 13-week and 39-week long-term
moving averages for Value Fund were $ 38.39 and $ 36.48 ,
respectively.
HISTORICAL FUND RESULTS. The following tables show the income and capital
elements of each fund's cumulative total return over a ten-year period. The
tables compare each fund's return to the record of the Standard &
Poor's 500 Composite Stock Price Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living (measured by the Consumer
Price Index or CPI) over the same period. The S&P 500 and DJIA
comparisons are provided to show how each fund's total return compared to
the record of a broad average of common stock prices and a narrower set of
stocks of major industrial companies, respectively, over the same period.
The funds have the ability to invest in securities not included in the
indices, and their investment portfolios may or may not be similar in
composition to the indices. The S&P 500 and DJIA are based on the
prices of unmanaged groups of stocks and, unlike the funds' returns, their
returns do not include the effect of paying brokerage commissions and other
costs of investing.
TREND FUND. During the period from December 31, 1983 through December 31,
1993, a hypothetical $10,000 investment in Trend Fund would have grown to
$ 37,003 , assuming all distributions were reinvested. This was a
period of widely fluctuating stock prices and should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
INDICES
Value of Value of
Year Value of Reinvested Reinvested Cost
Ended $10,000 Dividend Capital Gain Total S&P of
December 31 Investment Distributions Distributions Value 500 DJIA Living
1993 $15,322 $2,970 $18,711 $37,003 $40,235 $42,918 $14,393
1992 14,056 2,579 14,421 31,056 36,551 36,670 14,008
1991 12,871 2,142 11,583 26,596 33,955 34,176 13,613
1990 9,920 1,443 8,153 19,516 26,023 27,486 13,208
1989 11,468 1,526 9,350 22,345 26,860 27,634 12,448
1988 9,707 1,039 6,226 16,972 20,397 20,973 11,895
1987 8,143 679 4,830 13,651 17,492 18,092 11,392
1986 10,329 648 3,266 14,244 16,617 17,160 10,908
1985 11,675 491 380 12,546 14,002 13,508 10,790
1984 9,559 223 0 9,782 10,627 10,114 10,395
EXPLANATORY NOTES: With an initial investment of $10,000 made on December
31, 1983, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$ 25,765 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have come to $ 1,362 for income
dividends and $ 8,711 for capital gain distributions. Tax
consequences of different investments have not been factored into the above
figures.
VALUE FUND. During the period from October 31, 1983 through October 31,
1993, a hypothetical $10,000 investment in Value Fund would have grown to
$ 31,733 , assuming all distributions were reinvested. This was a
period of widely fluctuating stock prices and should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
INDICES
Value of Value of
Year Value of Reinvested Reinvested Cost
Ended $10,000 Dividend Capital Gain Total S&P of
October 31 Investment Distributions Distributions Value 500 DJIA Living
1993 $18,568 $4,781 $8,384 $ 31,733 $ 40,769 $43,348 $14,426
1992 14,501 3,570 6,441 24,513 35,467 36,906 14,040
1991 13,103 2,561 5,821 21,485 32,250 34,092 13,604
1990 10,247 1,223 4,552 16,023 24,156 26,209 13,218
1989 13,524 1,417 4,134 19,075 26,112 27,310 12,436
1988 11,797 935 3,606 16,337 20,658 21,379 11,901
1987 9,119 722 2,787 12,628 17,994 19,136 11,416
1986 11,497 813 2,082 14,392 16,910 17,487 10,921
1985 8,806 411 1,594 10,812 12,695 12,341 10,762
1984 8,043 108 1,456 9,607 10,637 10,346 10,426
EXPLANATORY NOTES: With an initial investment of $10,000 made on October
31, 1983, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$17,452 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have come to $ 1,892 for income
dividends and $ 3,902 for capital gain distributions. Tax
consequences of different investments have not been factored into the above
figures.
A fund's performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings prepared
by Lipper Analytical Services, Inc. (Lipper), an independent service
located in Summit, New Jersey which monitors the performance of mutual
funds. Lipper generally ranks funds on the basis of total return, assuming
reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. In addition to the mutual fund rankings, a fund's performance
may be compared to mutual fund performance indices prepared by Lipper.
From time to time, a fund's performance also may be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. For
example, Fidelity's FundMatchSM Program includes a workbook describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and other Fidelity funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar-cost averaging ; saving for college;
charitable giving; and the Fidelity credit card. In addition, Fidelity may
quote financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron (registered trademark)
number, and CUSIP number, and discuss or quote its current portfolio
manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns compared to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should consider
their ability to continue purchasing shares during periods of low
price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of , or exemption from , income
taxes, which may produce superior after-tax returns over time. For example,
a $1,000 investment earning a taxable return of 10% annually would have an
after-tax value of $1,949 after ten years, assuming tax was deducted from
the return each year at a 31% rate. An equivalent tax-deferred investment
would have an after-tax value of $2,100 after ten years, assuming tax was
deducted at a 31% rate from the tax-deferred earnings at the end of the
ten-year period.
As of December 31, 1993, FMR managed over $ 130 billion in equity
fund assets as defined and tracked by Lipper. This figure represents the
largest amount of equity fund assets under management by a mutual fund
investment advisor in the United States, making FMR America's leading
equity (stock) fund manager.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1994:
Washington's Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day , Labor Day, Thanksgiving Day, and Christmas Day
(observed). Although FMR expects the same holiday schedule, with the
addition of New Year's Day, to be observed in the future, the NYSE may
modify its holiday schedule at any time.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, a fund's NAV may be affected on days when investors do
not have access to the fund to purchase or redeem shares.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of each fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that the fund's income is derived from qualifying dividends. Because
each fund may earn other types of income, such as interest income from
securities loans, non-qualifying dividends, and short-term capital gains,
the percentage of dividends from a fund that qualifies for the deduction
will generally be less than 100%. Each fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of each fund's dividends
derived from certain U.S. government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income and therefore will
increase (decrease) dividend distributions. Each fund will send each
shareholder a notice in January describing the tax status of dividends and
capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the funds on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by a
fund are taxable to shareholders as dividends, not as capital gains.
Distributions from short-term capital gains do not qualify for the
dividends-received deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the funds do not
currently anticipate that securities of foreign issuers will constitute
more than 50% of each fund's total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund has qualified and intends to continue to
qualify each year as a "regulated investment company" for tax purposes so
that it will not be liable for federal tax at the fund level on income and
capital gains distributed to shareholders. In order to qualify as a
regulated investment company and avoid being subject to federal income or
excise taxes, each fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar year
as well as on a fiscal year basis. The funds intend to comply with other
tax rules applicable to regulated investment companies, including a
requirement that capital gains from the sale of securities held less than
three months constitute less than 30% of each fund's gross income for each
fiscal year. Gains from some forward currency contracts, futures contracts,
and options are included in this 30% calculation, which may limit a fund's
investments in such instruments. Value Fund is treated as a separate entity
from the other funds of Fidelity Capital Trust for tax purposes.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the funds and their shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on distributions received from the funds. Investors should
consult their tax advisers to determine whether the funds are suitable to
their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned
subsidiaries of FMR formed in 1986, supply investment research, and may
supply portfolio management services, to FMR in connection with certain
funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR Far East
research and visit thousands of domestic and foreign companies each year.
FMR Texas Inc., a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trusts are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the
Investment Company Act of 1940) by virtue of their affiliation with either
a trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee
(1992). Prior to her retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a Director
of the New York City Chapter of the National Multiple Sclerosis Society,
and is a member of the Advisory Council of the International Executive
Service Corps. and the President's Advisory Council of The University of
Vermont School of Business Administration .
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc. (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he serves
as a Trustee of First Union Real Estate Investments; Chairman of the Board
of Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1 - North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association .
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction, 1988). In addition, he serves as a Trustee
of Boston College, Massachusetts Eye & Ear Infirmary, Historic
Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston.
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992) and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee.
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). He is also
a Trustee of Rensselaer Polytechnic Institute and of Corporate Property
Investors and a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (Trend Fund only), 55 Railroad Avenue, Greenwich, CT,
Trustee (1993) is Chairman of the Board, President, and Chief Executive
Officer of Lexmark International, Inc. (office machines, 1991). Prior to
1991, he held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of various
IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna
Company (chemicals, 1993) and Infomart (marketing services, 1991), a
Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of
the Tri-State United Way (1993) and is a member of the University of
Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta,
GA, Trustee, is President of The Wales Group, Inc. (management and
financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank holding
company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Vice President and General Counsel of FMR,
Vice President-Legal of FMR Corp., and Clerk of FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
ALAN J. LEIFER is Vice President of Trend Fund (1987), and is a Vice
President of FMR.
JEFFREY UBBEN is Vice President of Value Fund (1993), and is an employee of
FMR.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the funds based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of December 31, 1993, the Trustees and officers of the funds owned, in
the aggregate, less than 1 % of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
The funds employ FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of each fund's Board of Trustees,
directs the investments of each fund in accordance with its investment
objective, policies, and limitations. FMR also provides the funds with all
necessary office facilities and personnel for servicing the funds'
investments, and compensates all officers of the trusts, all Trustees who
are "interested persons" of the trusts or FMR, and all personnel of the
trusts or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of each
fund's Board of Trustees, provide the management and administrative
services necessary for the operation of the funds. These services include
providing facilities for maintaining each fund's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters, and other persons dealing with the funds; preparing all
general shareholder communications and conducting shareholder relations;
maintaining the funds' records and the registration of the funds' shares
under federal and state law; developing management and shareholder services
for the funds; and furnishing reports, evaluations, and analyses on a
variety of subjects to each fund's Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. The funds pay for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, each trust has entered into
a revised transfer agent agreement with FSC, pursuant to which FSC bears
the cost of providing these services to existing shareholders. Other
expenses paid by the funds include interest, taxes, brokerage commissions,
each fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under federal
and state securities laws. Each fund is also liable for such nonrecurring
expenses as may arise, including costs of any litigation to which the fund
may be a party and any obligation it may have to indemnify the trusts'
officers and Trustees with respect to litigation.
FMR is the manager of Trend Fund and Value Fund pursuant to management
contracts dated August 1, 1993 and December 29, 1989, respectively, which
were approved by shareholders on July 14, 1993 and October 18, 1989,
respectively. For the services of FMR under the contracts, each fund pays
FMR a monthly management fee composed of the sum of two elements: a basic
fee and a performance adjustment based on a comparison of the fund's
performance to that of the Standard & Poor's 500 Composite Stock Price
Index (S&P 500).
COMPUTING THE BASIC FEE. Each fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate. The group fee
rate is based on the monthly average net assets of all of the registered
investment companies with which FMR has management contracts and is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown on the left. On the right, the effective fee rate
schedule shows the results of cummulatively applying the annualized rates
at varying asset levels. For example the effective annual group fee
rate at $ 232 billion of group net assets - their approximate level
for December 1993 - was . 3243 %, which is the weighted average of the
respective fee rates for each level of group net assets up to $232
billion .
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$ 0 - 3 billion .520% $ 0.5 billion .5200%
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
</TABLE>
* The rates shown for average group assets in excess of $174 billion were
adopted by FMR on a voluntary basis on November 1, 1993 pending shareholder
approval of a new management contract reflecting the extended schedule. The
extended schedule provides for lower management fees as total assets under
management increase.
The individual fund fee rate is .30% (Trend) and .35% (Value). Based on the
average net assets of funds advised by FMR for December 1993 and October
1993, respectively, the annual basic fee rate would be calculated as
follows:
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
Trend Fund . 3243 % + .30% = . 6243 %
Value Fund . 3254 % + .35% = . 6754 %
One-twelfth (1/12) of this annual basic fee rate is then applied to each
fund's average net assets for the current month, giving a dollar amount
which is the fee for that month.
The schedule shown above (minus the breakpoints added November 1, 1993) was
voluntarily adopted by FMR on January 1, 1992 until shareholders could meet
to approve the amended management contract. Prior to January 1, 1992, the
funds' group fee rate was based on a schedule with breakpoints ending at
.310% for average group assets in excess of $102 billion. FMR had
voluntarily adopted the shorter schedule on August 1, 1988. With the
exception of changing the group fee rate schedule and Trend Fund's revision
to its individual fund fee rate (previously .12%) , the terms of the
current contract are identical to those of the prior contract
dated March 1, 1990 and approved by shareholders on November 15,
1989 .
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or
downward adjustment, depending upon whether, and to what extent, a fund's
investment performance for the performance period exceeds, or is exceeded
by, the record of the S&P 500 over the same period. The performance
period consists of the most recent month plus the previous 35 months. Each
percentage point of difference (up to a maximum difference of + 10) is
multiplied by a performance adjustment rate of .02%. Thus, the maximum
annualized adjustment rate is + .20%. This performance comparison is made
at the end of each month. One-twelfth of this rate is then applied to a
fund's average net assets for the entire performance period, giving a
dollar amount which will be added to (or subtracted from) the basic fee.
Each fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the S&P 500 is based on change in value and is adjusted for
any cash distributions from the companies whose securities compose the
S&P 500.
Because the adjustment to the basic fee is based on a fund's performance
compared to the investment record of the S&P 500, the controlling
factor is not whether a fund's performance is up or down per se, but
whether it is up or down more or less than the record of the S&P 500.
Moreover, the comparative investment performance of each fund is based
solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
During the funds' last three fiscal years, FMR received the payments
shown in the following table for its services as investment adviser to the
funds. These fees include both the basic fee and the performance
adjustment. If FMR had not voluntarily adopted the extended group fee rate
schedules, these fees would have been higher.
Management Fee Management Fee
Fiscal Including as a % of Performance
Years Performance Average Adjustment
Ended Adjustment Net Assets to Basic Fee*
Trend Fund December 31, 1993 $ 8,474,000 .65%
$1,627,000
December 31, 1992 2,987,279 .32% (1,199,234)
December 31, 199 2,452,345 .30% (1,322,415)
Value Fund October 31, 1993 $7,889,000 .72% $ 450,000
October 31, 1992 1,386,283 .57% (264,322)
October 31, 1991 549,752 .50% (229,533)
* Parentheses indicate a downward performance adjustment.
To comply with the California Code of Regulations, FMR will reimburse a
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2 % of average net assets in excess of $100 million.
When calculating a fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
SUB-ADVISERS. On December 1, 1989 (Trend Fund) and December 29, 1989 (Value
Fund), FMR entered into sub-advisory agreements with FMR U.K. and FMR Far
East pursuant to which FMR U.K. and FMR Far East supply FMR with investment
research and recommendations concerning foreign securities for the benefit
of the funds. The sub-advisory agreements provide that FMR will pay fees to
FMR U.K. and FMR Far East equal to 110% and 105%, respectively, of FMR
U.K.'s and FMR Far East's costs incurred in connection with each agreement,
said costs to be determined in relation to the assets of the fund that
benefit from the services of the sub-advisers.
The fees paid to FMR U.K. and FMR Far East under the sub-advisory
agreements for fiscal 1993, 1992, and 1991, are indicated in the table
below.
FI SCAL 1993 FISCAL 1992 FISCAL 1991
FMR U.K. FMR Far East FMR U.K. FMR Far East FMR U.K. FMR Far East
Trend Fund $16,565 $31,990 $17,468 $22,742 $18,300 $18,200
Value Fund $34,444 $56,143 $3,664 $4,895 $6,000 $6,000
DISTRIBUTION AND SERVICE PLANS
Each fund has adopted a distribution and service plan (the plans) under
Rule 12b-1 under the Investment Company Act of 1940 (the Rule). The Rule
provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of the fund except pursuant to a plan adopted by the
fund under the Rule. Each fund's Board of Trustees has adopted the plan to
allow the fund and FMR to incur certain expenses that might be considered
to constitute indirect payment by the fund of distribution expenses. Under
the plans, if the payment of management fees by a fund to FMR should be
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the plan.
The plans specifically recognize that FMR, either directly or through FDC
may use its management fee revenue, past profits, or other resources,
without limitation, to pay promotional and administrative expenses in
connection with the offer and sale of shares of the funds. In addition, the
plans provide that FMR may use its resources, including its management fee
revenues, to make payments to third parties that provide assistance in
selling fund shares, or to third parties, including banks, that render
shareholder support services.
Each fund's plan has been approved by the Trustees. As required by the
Rule, the Trustees carefully considered all pertinent factors relating to
the implementation of the plans prior to their approval, and have
determined that there is a reasonable likelihood that the Plans will
benefit the funds and their shareholders. In particular, the Trustees noted
that the Plans do not authorize payments by the funds other than those made
to FMR under its management contracts with the funds. To the extent that
the plans give FMR and FDC greater flexibility in connection with the
distribution of shares of the funds, additional sales of the funds' shares
may result. Additionally, certain shareholder support services may be
provided more effectively under the plans by local entities with whom
shareholders have other relationships. The Trustees have not authorized any
third party payments on behalf of the funds.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. The funds may execute portfolio
transactions with and purchase securities issued by depository institutions
that receive payments under the Plans. No preference will be shown in the
selection of investments for the instruments of such depository
institutions. In addition, state securities laws on this issue may differ
from the interpretations of federal law expressed herein, and banks and
other financial institutions may be required to register as dealers
pursuant to state law.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent for
the funds. Under each trust's contract with FSC, each fund pays an annual
fee of $25.50 per basic retail account with a balance of $5,000 or more,
$15.00 per basic retail account with a balance of less than $5,000, and a
supplemental activity charge of $5.61 for monetary transactions. These fees
and charges are subject to annual cost escalation based on postal rates
changes and changes in wage and price levels as measured by the National
Consumer Price Index for Urban Areas. With respect to certain institutional
client master accounts, each fund pays FSC a per-account fee of $95.00 and
monetary transaction charges of $20.00 or 17.50, depending on the nature of
services provided. With respect to certain broker-dealer master accounts,
the funds pay FSC a per-account fee of $30.00 and a charge of $6.00 for
monetary transactions. Fees for certain institutional retirement plan
accounts are based on the net assets of all such accounts in a fund.
Under the contracts, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, with the exception of proxy statements.
The table below shows the portion of transfer agent fees, including
out-of-pocket expenses, paid to FSC during each fund's last three fiscal
years.
TRANSFER AGENT FEES*
1993 1992 1991
Trend Fund $ 2,630,000 $1,447,549 $1,324,236
Value Fund $ 3,204,000 $711,816 $305,161
The table below shows the transfer agent fees the fund would have paid if a
portion of the fund's brokerage commissions had not resulted in payment of
certain of these fees during each fund's last three fiscal years.
TRANSFER AGENT FEES*
1993 1992 1991
Trend Fund $ 2,685,000 $1,447,549 $1,324,236
Value Fund $ 3,327,000 $711,816 $305,161
Each trust's contract with FSC also provides that FSC will perform the
calculations necessary to determine each fund's net asset value per share
and dividends, and maintain the fund's accounting records. Prior to July 1,
1991, the annual fee for these pricing and bookkeeping services was based
on two schedules, one pertaining to each fund's average net assets, and one
pertaining to the type and number of transactions the fund made. The fee
rates in effect as of July 1, 1991 are based on each fund's average net
assets, specifically, .06% for the first $500 million of average net assets
and .03% for average net assets in excess of $500 million. The fee is
limited to a minimum of $45,000 and a maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years.
PRICING AND BOOKKEEPING FEES*
1993 1992 1991
Trend Fund $ 543,000 $430,334 $264,062
Value Fund $ 479,000 $146,260 $91,622
* Trend Fund's fiscal year end is December 31. Value Fund's fiscal year end
is October 31.
FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. For the fiscal year ended December 31, 1993,
1992, and 1991, Trend Fund paid no securities lending fees. Value Fund did
not pay securities lending fees for the fiscal years ended October 31,
1993, 1992, and 1991.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Trend Fund is an open-end management
investment company originally organized as a Massachusetts corporation on
December 18, 1957. On December 31, 1984, the fund was reorganized as a
Massachusetts business trust, at which time its name was changed from
Fidelity Trend Fund, Inc. to Fidelity Trend Fund. Fidelity Capital Fund,
Inc., an investment company also advised by FMR, was merged with Fidelity
Trend Fund on December 31, 1979.
Fidelity Value Fund is a fund of Fidelity Capital Trust an open-end
management investment company organized as a Massachusetts business trust
on May 31, 1978. On September 21, 1978, the trust's name was changed from
Devon Equity Fund to Fidelity Asset Investment Trust. On December 30, 1983,
the trust's name was changed to Fidelity Discoverer Fund. On August 1,
1986, the trust's name was changed to Fidelity Value Fund, and on November
1, 1986, the trust's name was changed to Fidelity Capital Trust. Currently,
there are four funds of the trust: Fidelity Capital Appreciation Fund,
Fidelity Disciplined Equity Fund, Fidelity Stock Selector, and Fidelity
Value Fund.
The Declarations of Trust permits the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of each trust, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declarations of Trust protects a Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of a trust or fund may, as set
forth in the Declarations of Trust, call meetings of a trust or fund for
any purpose related to the trust or fund, as the case may be, including, in
the case of a meeting of the entire trust, the purpose of voting on removal
of one or more Trustees. Each trust or fund may be terminated upon the sale
of its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by vote of the
holders of a majority of the outstanding shares of the trust or the fund.
If not so terminated, each trust or fund will continue indefinitely.
CUSTODIANS. Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New
York, New York, is custodian of the assets of Trend Fund. Brown Brothers
Harriman & Co., 40 Water Street, Boston, Massachusetts, is custodian of
the assets of Value Fund. The custodians are responsible for the
safekeeping of each respective fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodians take no part in
determining the investment policies of the funds or in deciding which
securities are purchased or sold by the funds. The funds may, however,
invest in obligations of the custodians and may purchase securities from or
sell securities to the custodians.
FMR, its officers and directors, its affiliated companies, and the trusts'
Trustees may from time to time have transactions with various banks,
including banks serving as custodian for certain of the funds advised by
FMR. The Boston branch of Value Fund's custodian leases its office space
from an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred to
date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand , One Post Office Square, Boston,
Massachusetts serves as each trust's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's Annual Report for its 1993 fiscal year are separate reports
supplied with this Statement of Additional Information and are incorporated
herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
CA - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
C - Bonds rated C are the lowest-rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC-debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating will
also be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial Statements for Fidelity Trend Fund for the fiscal year
ended December 31, 1993 are incorporated by reference into the Statement of
Additional Information and are filed herein as Exhibit 24(a)(1).
(a) (2) Financial Statements for Fidelity Value Fund for the fiscal year
ended October 31, 1993 are incorporated by reference into the Statement of
Additional Information and are filed herein as Exhibit 24(a)(2).
(b) Exhibits
(1) (a) Declaration of Trust, dated September 18, 1984, is incorporated
herein by reference to Exhibit 24b-1 to Post-Effective Amendment No. 72.
(b) Supplement to the Declaration of Trust, dated January 13, 1985, is
incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 81.
(c) Supplement to the Declaration of Trust, dated October 23, 1986, is
incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 81.
(d) Supplement to the Declaration of Trust, dated December 11, 1989, is
incorporated herein by reference to Exhibit 1(d) to Post-Effective
Amendment No. 88.
(2) (a) By-laws of the Trust are incorporated herein by reference to
Exhibit 2 to Post-Effective Amendment No. 72.
(b) Supplement to the Bylaws of the Trust is incorporated herein by
reference to Exhibit 2(b) to Post-Effective Amendment No. 89.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between Fidelity Trend Fund and Fidelity
Management & Research Company, dated August 1, 1993, is incorporated
herein by reference to Exhibit 5(a) to Post-Effective Amendment No. 99.
(b) Sub-advisory Agreement for Fidelity Trend Fund between Fidelity
Management & Research (U.K.) Inc. and Fidelity Management &
Research Company, dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(c) to Post-Effective Amendment No. 89.
(c) Sub-advisory Agreement for Fidelity Trend Fund between Fidelity
Management & Research (Far East) Inc. and Fidelity Management &
Research Company, dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(d) to Post-Effective Amendment No. 89.
(6) (a) General Distribution Agreement between the Fidelity Trend Fund and
Fidelity Distributors Corporation, dated April 1, 1987, is incorporated
herein by reference to Exhibit 6 to Post-Effective Amendment No. 83.
(b) Amendment to the General Distribution Agreement between Fidelity
Trend Fund and Fidelity Distributors Corporation, dated January 1, 1988, is
incorporated herein by reference to Exhibit (6)(a) to Post-Effective
Amendment No. 86.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Post-Effective Amendment No. 94.
(8) (a) Custodian Agreement, dated July 18, 1991, between Fidelity Trend
Fund and Chase Manhattan Bank, N.A., is incorporated by reference to
Exhibit 8(a) to Post Effective Amendment No. 94.
(9) (a) Amended Master Service Agreement between Fidelity Trend Fund, FMR
Corp., and Fidelity Service Co., dated June 1, 1989, is incorporated herein
by reference to Exhibit 9(b) to Post-Effective Amendment No. 88.
(b) Schedules A (transfer, dividend disbursing and shareholders'
service); B (pricing and bookkeeping); and C (securities lending
transactions) to the Amended Master Service Agreement for Fidelity Trend
Fund, dated June 1, 1989, are incorporated herein by reference to Exhibit
9(c) to Post-Effective Amendment No. 88.
(10) Not applicable.
(11) Consent of Coopers & Lybrand is filed herein as Exhibit 11.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement as currently in effect are incorporated herein by
reference to Exhibit 14(a) to Post-Effective Amendment No. 91.
(b) Fidelity 403(b)(7) Custodial Account Agreement as currently in effect
is incorporated herein by reference to Exhibit 14(b) to Post-Effective
Amendment No. 91.
(c) Fidelity Defined Contribution Retirement Plan and Trust Agreement as
currently in effect are incorporated herein by reference to Exhibit 14(c)
to Post-Effective Amendment No. 91.
(d) Fidelity Defined Benefit Pension Plan and Trust as currently in
effect are incorporated herein by reference to Exhibit 14(d) to
Post-Effective Amendment No. 91.
(e) Fidelity 401(a) Prototype Plan for Tax-Exempt Employers as currently in
effect is incorporated herein by reference to Exhibit 14(e) to
Post-Effective Amendment No. 91.
(f) Fidelity Master Plan for Savings and Investments as currently in effect
is incorporated herein by reference to Exhibit 14(f) to Post-Effective
Amendment No. 91.
(g) Fidelity Group Individual Retirement Account Custodial Agreement and
Disclosure Statement as currently in effect are incorporated herein by
reference to Exhibit 14(g) to Post-Effective Amendment No. 91.
(15) Distribution and Service Plan between Fidelity Trend Fund and
Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 15 to Post-Effective Amendment No. 80.
(16) (a) A schedule for computation of performance quotations for Fidelity
Trend Fund is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No 86.
(b) An additional schedule for computation of performance quotations for
Fidelity Trend Fund is incorporated herein by reference to Exhibit 16(b) to
Post-Effective Amendment No. 97.
(c) Backup for the computation of the long-term moving averages for
Fidelity Trend Fund is incorporated herein by reference to Exhibit 16(c) to
Post-Effective Amendment No. 99.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management and
Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities December 31, 1993
Title of Class: Shares of Beneficial Interest
Number of Record Holders
Fidelity Trend Fund 98,089
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds advised
by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director
of Worldwide Research of FMR.
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management
& Research (Far East) Inc.; Treasurer of FMR Texas Inc.,
Senior Vice President and Chief Financial Officer of the Fidelity
funds.
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management &
Research (Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management
& Research (U.K.) Inc.; Senior Vice President and
Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research
(U.K.) Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
FMR Texas Inc.; Senior Vice President and Chief
Financial Officer of the Fidelity funds.
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management
& Research (U.K.) Inc.; Secretary of FMR Texas
Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire St., Boston, MA, 02109, or the fund's custodian:
The Chase Manhattan Bank, 1211 Avenue of the Americas, New York, NY.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant on behalf of Fidelity Trend Fund undertakes, provided the
information required by Item 5A is contained in the annual report, to
furnish each person to whom a prospectus has been delivered, upon their
request and without charge, a copy of the Registrant's latest annual
report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 101 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Massachusetts, on the 14th day of February 1994.
FIDELITY TREND FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee February 14, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer February 14, 1994
Gary L. French
/s/J. Gary Burkhead Trustee February 14, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee February 14, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee February 14, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee February 14, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee February 14, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee February 14, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee February 14, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee February 14, 1994
Edward H. Malone
/s/Marvin L. Mann_____* Trustee February 14, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee February 14, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee February 14, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment cmpanies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment cmpanies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d. October 20, 1993
Edward C. Johnson 3d
(2_FIDELITY_LOGOS)FIDELITY
TREND
FUND
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 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 last six
months.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 23 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 27 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 31 The auditor's opinion.
ACCOUNTANTS
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. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
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. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Trend 19.15% 118.02% 270.03%
S&P 500(Registered trademark) 10.08% 97.26% 302.35%
Average Growth Fund 10.61% 99.76% 234.70%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you had invested $1,000 in a fund that had a 5% return over the past year,
you would have $1,050. You can compare these figures to the performance of
the Standard & Poor's 500 Composite Stock Price Index - a common proxy
for the U.S. stock market. You can also compare them to the average growth
fund, which reflects the performance of 488 growth funds tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Trend 19.15% 16.87% 13.98%
S&P 500(Registered trademark) 10.08% 14.55% 14.94%
Average Growth Fund 10.61% 14.51% 12.38%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Trend (005) S&P 500
12/31/83 10000.00 10000.00
01/31/84 9577.28 9944.00
02/29/84 8915.97 9593.97
03/31/84 9162.34 9759.95
04/30/84 9157.15 9852.67
05/31/84 8664.42 9306.83
06/30/84 8926.35 9508.79
07/31/84 8679.98 9390.88
08/31/84 9834.02 10428.57
09/30/84 9613.59 10430.66
10/31/84 9623.96 10471.34
11/30/84 9499.48 10354.06
12/31/84 9782.31 10627.40
01/31/85 10849.50 11455.28
02/28/85 10827.59 11596.18
03/31/85 10589.35 11604.30
04/30/85 10348.38 11593.85
05/31/85 10967.25 12263.98
06/30/85 11309.55 12456.52
07/31/85 11493.02 12437.84
08/31/85 11309.55 12332.11
09/30/85 10816.64 11946.12
10/31/85 11180.85 12498.03
11/30/85 12087.25 13355.39
12/31/85 12546.40 14001.80
01/31/86 13000.66 14080.21
02/28/86 14219.52 15133.40
03/31/86 15070.54 15977.85
04/30/86 14718.19 15797.30
05/31/86 15321.37 16637.72
06/30/86 15354.22 16918.89
07/31/86 14100.08 15973.13
08/31/86 14861.52 17158.33
09/30/86 13693.98 15739.34
10/31/86 14335.98 16647.50
11/30/86 14622.64 17052.03
12/31/86 14243.69 16617.21
01/31/87 15953.07 18855.54
02/28/87 16964.26 19600.34
03/31/87 17197.25 20166.79
04/30/87 16927.86 19987.30
05/31/87 16745.84 20161.19
06/30/87 17408.39 21179.33
07/31/87 18500.51 22253.12
08/31/87 19075.70 23083.17
09/30/87 18602.44 22577.65
10/31/87 13101.80 17714.42
11/30/87 12362.80 16254.75
12/31/87 13651.40 17491.74
01/31/88 14333.97 18228.14
02/29/88 15490.43 19077.57
03/31/88 15681.72 18488.08
04/30/88 16155.61 18693.29
05/31/88 15807.80 18855.92
06/30/88 16959.91 19721.41
07/31/88 16738.18 19646.47
08/31/88 16216.47 18978.49
09/30/88 16607.76 19786.97
10/31/88 16699.05 20337.05
11/30/88 16246.91 20046.23
12/31/88 16972.45 20397.04
01/31/89 18305.57 21890.10
02/28/89 18274.03 21345.04
03/31/89 18781.64 21842.38
04/30/89 19911.19 22976.00
05/31/89 20848.67 23906.53
06/30/89 20592.58 23770.26
07/31/89 21914.20 25916.71
08/31/89 22746.50 26424.68
09/30/89 22856.25 26316.34
10/31/89 21562.07 25705.80
11/30/89 21822.74 26230.20
12/31/89 22344.63 26859.73
01/31/90 20414.36 25057.44
02/28/90 20919.23 25380.68
03/31/90 21294.42 26053.27
04/30/90 20260.12 25401.94
05/31/90 22181.69 27878.62
06/30/90 22217.18 27689.05
07/31/90 21776.08 27600.44
08/31/90 19606.08 25105.36
09/30/90 18105.33 23882.73
10/31/90 17339.74 23780.04
11/30/90 18891.19 25316.23
12/31/90 19515.88 26022.55
01/31/91 20740.40 27157.13
02/28/91 22587.40 29098.87
03/31/91 23092.51 29803.06
04/30/91 23327.21 29874.59
05/31/91 24419.08 31165.17
06/30/91 22699.64 29737.81
07/31/91 24271.12 31123.59
08/31/91 24862.97 31861.22
09/30/91 24699.70 31329.13
10/31/91 24959.91 31748.94
11/30/91 23531.30 30469.46
12/31/91 26595.58 33955.17
01/31/92 26761.70 33323.60
02/29/92 27401.26 33756.81
03/31/92 26511.08 33098.55
04/30/92 26354.62 34071.65
05/31/92 27002.03 34238.60
06/30/92 26386.99 33728.44
07/31/92 27870.62 35107.94
08/31/92 27428.23 34388.23
09/30/92 27838.25 34794.01
10/31/92 28501.84 34915.79
11/30/92 30179.69 36106.41
12/31/92 31056.27 36550.52
01/31/93 31801.17 36857.55
02/28/93 31615.09 37358.81
03/31/93 32941.95 38147.08
04/30/93 31729.97 37223.92
05/31/93 33453.17 38221.52
06/30/93 34067.78 38332.36
07/31/93 33975.88 38179.04
08/31/93 35756.52 39626.02
09/30/93 36537.71 39320.90
10/31/93 37204.02 40134.84
11/30/93 35480.81 39753.56
12/31/93 37002.99 40234.58
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Trend
Fund on December 31, 1983. As the chart shows, by December 31, 1993, the
value of your investment would have grown to $37,003 - a 270.03% increase
on your initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends reinvested, the same $10,000
investment would have grown to $40,235 - a 302.35% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Low inflation, falling interest rates
and a gradually improving
economy boosted U.S. stocks
during the 12 months ended
December 31, 1993. The
Standard & Poor's 500 stock
index rose 10.08%, in line with
the market's long-term average
annual return. Some tobacco,
drug and brand-name consumer
products stocks began to pick up
by year end, but had weak
returns for the year, overall.
Those losses were offset by
impressive gains in other sectors,
including technology, although
semiconductors gave back part
of their gains in the fall. Other
market leaders were finance,
notably securities brokers;
economically-sensitive sectors
like autos and steel;
entertainment; heavy machinery;
and precious metals.
Communications stocks soared
as traditional telephone utilities,
cellular companies, and
entertainment firms scrambled to
form strategic alliances. The
NASDAQ Composite Index -
which tracks over-the-counter
stocks - rose 14.75% for the
year, but was outpaced by
the Dow Jones Industrial Average
- - an index of 30 blue-chip stocks
- - which rose 17.04%. In
mid-November, the Dow closed
above 3700 for the first time and
finished the year at 3754. Most
international markets easily
outpaced U.S. returns. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index rose
32.56%, while the Morgan
Stanley Emerging Markets Index
was up 73.21% for the year.
An interview with Alan Leifer, Portfolio Manager of Fidelity
Trend Fund
Q. ALAN, HOW DID THE FUND PERFORM?
A. I'm very pleased with 1993's results. Total return was 19.15% for the 12
months ended December 31, 1993. That beat the 10.61% return for the average
growth fund tracked by Lipper Analytical Services.
Q. WHERE DID YOU FIND THE BIG GAINERS?
A. The biggest winners were in the technology group. Stocks in this sector
had strong returns during the first six months of '93. I took some profits
in the second half of the year, and reduced the fund's technology
investment from 5.6% on June 30 to 4.2% on December 31. Semiconductor
companies like Texas Instruments, Micron Technology and Applied Materials
did well. Two factors worked in our favor. First, Japanese firms stopped
gaining market share; and second, demand picked up due to increased sales
of cellular phones and personal computers. Defense technology companies
like Loral - which manufactures military electronic systems - also had
strong returns. And finally, technology network equipment stocks did well.
These included International Game, a leading maker of slot machines, and
Sensormatics, which produces security equipment like those plastic tags you
see in clothing stores. General Instruments also helped the fund. The
company manufactures cable TV and communications equipment that will help
build the so-called information superhighway.
Q. WE HEAR A LOT ABOUT THE INFORMATION SUPERHIGHWAY BRINGING TOGETHER
COMPUTER, TELEPHONE AND TELEVISION TECHNOLOGIES TO PROVIDE US WITH
INTERACTIVE SERVICES WE CAN USE AT HOME. ARE THERE OTHER INVESTMENTS YOU'RE
MAKING IN THIS AREA?
A. Yes, because I see it as an investment theme for the '90s, and a
business trend for the next decade. Many of the fund's technology
investments are companies that are already hard at work building the
highway. Some of the fund's newer investments are in companies that I would
call suppliers of the "off-ramps" and "signs;" firms whose products and
services surround the merging of these technologies, which hasn't actually
happened yet. As always, I look for companies that the fund can hold for a
while. In the cable television area, for example, Tele-Communications,
Inc., Viacom and QVC have already helped the fund. I've also seen good
results from certain telephone-related stocks, including Telephone &
Data Systems and Cellular Communications.
Q. ANY OTHER INVESTMENT THEMES FOR THE `90S THAT ARE ALREADY PRODUCING
RESULTS?
A. Housing, for one. In the 1980s, skyrocketing home prices and high
interest rates kept many would-be buyers out of the market. All of that has
changed. With more moderate prices and lower rates, buying a home is 40%
more affordable today than it was even three or four years ago. About 64%
of Americans now own homes; I see that number increasing to 70% in the next
decade. The stocks of home builders like Toll Brothers (up 34.3% for the
six months ended December 31), Centex (up 23.1%), and Lennar (up 14.2%) all
helped the fund. Also, companies that provide building materials, like
Lafarge (a cement supplier), had a strong year. The fund's two largest
investments at the end of the year - Federal National Mortgage Association
and Golden West - both finance home purchases. Golden West was a
disappointment in '93, mainly because of the recession in California, its
home base. But the company is a strong competitor which is building assets.
Plus, California's economy is showing signs of life. So I'm not about to
jump ship.
Q. CONSUMER NON-DURABLES HAD A LACKLUSTER YEAR ON WALL STREET. HOW HEAVILY
WAS THE FUND INVESTED IN THIS AREA?
A. I use a broad definition of consumer non-durables. Under this category,
I include lodging and gaming, entertainment, services, and transportation,
as well as the traditional non-durables: beverages, household products and
tobacco. Using this breakdown, the fund had a 12.8% stake in consumer
non-durables on December 31.
Q. WHERE DID YOU FIND OPPORTUNITIES?
A. Most of the fund's consumer non-durable investments were in two areas:
travel and gaming. Americans crawled out of their cocoons last year and
began to take more vacations. That helped companies like Hospitality
Franchise Systems, which operates lower-cost hotel chains like Day's Inn,
Ramada and Super 8. The fund also benefited from owning stocks like
Carnival Cruise Lines - the number one cruise company in the United States
- - and Southwest Airlines, a real up-and-comer in the airline industry. It's
true, however, many traditional big-name consumer non-durable stocks
suffered in 1993. Consumers showed they were no longer going to pay full
price for name-brand goods. They actively sought out generic and
off-brands, especially on items like cigarettes. Philip Morris was the most
obvious example. The stock was disappointing early in the year until I
eventually sold all of the fund's shares.
Q. WHAT ABOUT THE FUND'S 11.3% STAKE IN HEALTH CARE?
A. Again, a similar story. Mediocre performance by the sector, but shining
stars within if you looked hard enough. Despite uncertainty over
health-care reform, many companies continued to grow their earnings and
helped the fund. U.S. Healthcare is an East Coast-based health maintenance
organization, or HMO, that grabbed a bigger share of the market in '93.
Despite a volatile year, the stock ended 1993 with a big gain. The fund
didn't completely escape the retreat from health-care stocks, however.
Synergen's stock fell 68% in one day in late February last year, after the
company announced disappointing results of its drug Antril for sepsis, a
blood infection. But when an industry makes up 16-17% of the U.S. economy,
as health care does, many companies can prosper while others falter.
Q. HOW DO YOU FEEL ABOUT INVESTING OVERSEAS, WHERE SO MANY MARKETS HAD A
STRONG YEAR?
A. The fund had a 12.6% foreign stake on December 31, of which about 5% was
in Canadian companies. Many international stocks did enjoy a strong year,
but many were also extremely volatile. I'm conservative about buying
foreign stocks. I believe that if you're looking for stocks that will go up
ten-fold in five or so years, as this fund is, you can't beat the United
States. There are ways to make money investing in emerging markets and in
countries whose currencies fluctuate, but usually not by investing in
companies that build new businesses that grow very quickly. The United
States is one of the few countries in the world that truly fosters an
entrepreneurial spirit; that allows an upstart company to become an
industry leader. Those are the kinds of companies I like to invest in and I
find them most often here.
Q. WHAT'S YOUR OUTLOOK FOR '94?
A. I expect we'll see greater highs and lows in the stock market this year.
If so, that will be quite different from 1993, when stocks in the Standard
& Poor's 500 index were on a pretty even keel, and set a record for low
volatility. Overall, I'm encouraged by what I see for the next six months.
Stock prices are high, but so are the earnings of many mid-sized companies
in which the fund invests. I'm never sure what the market will do, but I do
see opportunities for the fund's companies to grow their earnings in '94.
This fund has a low turnover rate compared to many others. That's because I
buy companies that I think the fund can hang onto for five years. With a
long-term approach, I think the fund can weather downturns in the market
that might happen in the meantime.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
stocks with growth potential
START DATE: June 16, 1958
SIZE: as of December 31,
1993, over $1.3 billion
MANAGER: Alan Leifer, since
1987; manager, Fidelity
Contrafund, 1984-1987;
Fidelity Select Industrial
Materials, 1986-1988
(checkmark)
ALAN LEIFER ON CHOOSING STOCKS:
"When looking at a company
that's trading for $30 per
share, most investors say,
`Can this stock get to $40 and
how quickly can it get there?' I
ask, `Is this the kind of
company that could get to
$140, and can it get there in
the next five years?' I use a
long-term, five-year horizon
and pick my companies very
carefully. In the investment
game there are sprinters and
there are marathoners. The
Trend fund is filled with
marathoners. These
companies really love what
they're doing in good times
and bad, and put everything
they have into performing for
the long haul."
(bullet) The percentage of the
fund's investments in cyclical
stocks - those that tend to
move up and down in tandem
with the economy -
increased over the last six
months, from 19.7% on June
30 to 24.1% on December 31.
(bullet) Over the next six months,
there may be investment
opportunities in companies
that do business in California
and Europe; both areas
appear to be emerging from
economic recessions, and
some of these companies are
seeing improving business
prospects.
(bullet) At 16.1%, finance was the
fund's largest sector
investment on December 31.
Investments were divided
among federally sponsored
credit associations 5.7%,
banks 3.6%, savings &
loans 3.4%, insurance
companies 1.6%, securities
companies 1.2%, and credit
and other institutions 0.6%.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Federal National Mortgage
Association 5.3 4.4
Telephone & Data Systems, 3.6 3.3
Inc.
Golden West Financial Corp. 3.4 3.7
Centex Corp. 2.4 2.2
U.S. Healthcare, Inc. 2.2 1.8
Cellular Communications, Inc.
Class P 1.8 1.6
Reynolds Metals Co. 1.7 1.6
Schering-Plough Corp. 1.6 1.5
TJX Companies, Inc. 1.6 1.9
Rogers Communications, Inc. 1.6 0.8
Class B
TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Finance 16.3 16.7
Health 11.3 11.4
Utilities 11.0 10.4
Energy 10.2 10.0
Media & Leisure 9.1 8.5
ASSET ALLOCATION
AS OF DECEMBER 31, 1993* AS OF JUNE 30, 1993**
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 38.5
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Row: 1, Col: 1, Value: 9.0
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 29.5
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Stocks 98.5%
Bonds 1.0%
Short-term
Investments 0.5%
Stocks 89.5%
Bonds 1.5%
Short-term
Investments 9.0%
* FOREIGN
INVESTMENTS 12.6%
** FOREIGN
INVESTMENTS 9.8%
INVESTMENTS DECEMBER 31, 1993
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 98.5%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.9%
DEFENSE ELECTRONICS - 0.9%
Loral Corp. 339,800 $ 12,827 54385910
BASIC INDUSTRIES - 5.2%
CHEMICALS & PLASTICS - 0.0%
NOVA Corp. of Alberta Class A 80,000 568 66977110
IRON & STEEL - 0.7%
Nucor Corp. 189,700 10,054 67034610
METALS & MINING - 3.5%
Aluminum Co. of America 98,000 6,799 02224910
Broken Hill Proprietary Co. Ltd. (The) 593,000 7,087 05599810
Noranda, Inc. 566,200 11,084 65542210
Reynolds Metals Co. 534,200 24,239 76176310
49,209
PACKAGING & CONTAINERS - 0.2%
Owens-Illinois, Inc. (a) 248,100 3,070 69076840
PAPER & FOREST PRODUCTS - 0.8%
Bowater, Inc. 140,800 3,239 10218310
Federal Paper Board Co., Inc. 300 6 31369310
Louisiana-Pacific Corp. 96,100 3,964 54634710
Repola OY 206,200 3,205 75999A92
10,414
TOTAL BASIC INDUSTRIES 73,315
CONGLOMERATES - 1.7%
Brierley Investments Ltd. 9,598,643 7,401 10901410
Canadian Pacific Ltd. Ord. 432,700 7,079 13644030
PEC Israel Economic Corp. (a) 283,900 8,872 70509810
Triton Group Ltd. (a) 1,835 3 89675710
Triton Group Ltd. (warrants) (a) 2,875 1 89675711
23,356
CONSTRUCTION & REAL ESTATE - 6.8%
BUILDING MATERIALS - 0.7%
Lafarge Corp. 445,200 10,184 50586210
CONSTRUCTION - 5.9%
Centex Corp. 785,300 32,983 15231210
Engle Homes, Inc. 68,700 996 29289610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
Kaufman & Broad Home Corp. 322,100 $ 7,650 48616810
Lennar Corp. 550,900 18,799 52605710
Oakwood Homes Corp. 163,100 4,404 67409810
Toll Brothers, Inc. (a) 644,100 11,030 88947810
Webb (Del E.) Corp. 373,200 5,971 94742310
81,833
REAL ESTATE - 0.2%
Hovnanian Enterprises, Inc. (a):
Class A 105,350 1,593 44248720
Class B 114,250 1,714 44248730
Koll Real Estate Group, Inc. (a) 170,000 74 50043410
Major Realty Corp. (a) 40,000 68 56084010
3,449
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Crown American Realty Trust (SBI) 36,000 540 22818610
Equity Residential Properties Trust (SBI) 4,800 153 29476L10
693
TOTAL CONSTRUCTION & REAL ESTATE 96,159
DURABLES - 3.6%
AUTOS, TIRES, & ACCESSORIES - 1.7%
Chrysler Corp. 301,700 16,065 17119610
Dana Corp. 67,300 4,030 23581110
Discount Auto Parts, Inc. (a) 103,300 2,841 25464210
Grupo Dina (Consorcio G) ADR 30,700 856 21030610
23,792
CONSUMER ELECTRONICS - 0.7%
Whirlpool Corp. 144,200 9,589 96332010
TEXTILES & APPAREL - 1.2%
Fruit of the Loom, Inc. (a) 290,800 7,015 35941610
NIKE, Inc. 59,600 2,764 65410610
Reebok International Ltd. 48,100 1,443 75811010
Unifi, Inc. 201,200 5,407 90467710
Westpoint Stevens, Inc. (a) 1,800 34 96123810
16,663
TOTAL DURABLES 50,044
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 9.8%
COAL - 0.1%
Pittston Co. Minerals Group 37,600 $ 897 72570120
ENERGY SERVICES - 4.2%
Global Marine, Inc. (a) 3,657,000 15,085 37935240
Lone Star Technologies, Inc. (a) 122,500 965 54231210
Oceaneering International, Inc. (a) 746,000 10,164 67523210
Offshore Logistics, Inc. (a) 272,600 3,748 67625510
Production Operators Corp. 92,900 2,497 74308010
Rowan Companies, Inc. (a) 1,482,600 13,343 77938210
Schlumberger Ltd. 195,900 11,583 80685710
Varco International, Inc. (a) 269,200 1,615 92212610
59,000
OIL & GAS - 5.5%
Amerada Hess Corp. 379,700 17,134 02355110
Apache Corp. 488,600 11,421 03741110
Cabot Oil & Gas Corp. Class A 405,500 8,566 12709710
Louisiana Land & Exploration Co. 97,000 3,892 54626810
Maxus Energy Corp. (a) 542,100 2,982 57773010
Mesa, Inc. (a) 465,800 2,620 59091110
Noble Affiliates, Inc. 213,000 5,645 65489410
North Canadian Oils Ltd. 115,300 1,134 65813610
Parker & Parsley Petroleum Co. 29,300 725 70101810
Renaissance Energy Ltd. (a) 658,400 14,072 75966610
Santa Fe Energy Resources, Inc. 482,538 4,343 80201210
Union Texas Petroleum Holdings, Inc. 244,600 4,984 90864010
77,518
TOTAL ENERGY 137,415
FINANCE - 16.1%
BANKS - 3.6%
Citicorp (a) 302,400 11,113 17303410
Deutsche Bank AG 13,300 6,783 25152592
Fleet Financial Group, Inc. 541,224 18,062 33891510
Northern Trust Corp. 193,100 7,652 66585910
State Street Boston Corp. 165,000 6,188 85747310
49,798
CREDIT & OTHER FINANCE - 0.6%
MBNA Corp. 258,900 8,641 55262L10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
FEDERAL SPONSORED CREDIT - 5.7%
Federal National Mortgage Association 942,437 $ 73,981 31358610
Student Loan Marketing Association 132,300 5,937 86387150
79,918
INSURANCE - 1.6%
Chubb Corp. (The) 72,300 5,630 17123210
Exel Ltd. 67,200 2,982 30161610
First Central Financial Corp. (d) 376,500 2,118 31890810
Loews Corp. 121,400 11,290 54042410
22,020
SAVINGS & LOANS - 3.4%
Golden West Financial Corp. 1,206,200 47,042 38131710
SECURITIES INDUSTRY - 1.2%
Salomon, Inc. 211,500 10,073 79549B10
United Asset Management Corp. 173,300 7,084 90942010
17,157
TOTAL FINANCE 224,576
HEALTH - 11.3%
DRUGS & PHARMACEUTICALS - 5.3%
ALZA Corp. Class A 548,300 15,352 02261510
Chiron Corp. (a) 84,400 7,090 17004010
Elan PLC (a):
ADR 123,700 5,242 28413120
(1 Advanced Therapeutic Systems Common & 1 ADR
warrant) 16,587 535 28413140
Glaxo Holdings PLC sponsored ADR 132,200 2,760 37732730
Pfizer, Inc. 97,000 6,693 71708110
Schering-Plough Corp. 336,100 23,023 80660510
Schering-Plough Corp. (equity unit) (a)(e) 3,800 91 80660540
Teva Pharmaceutical Industries Ltd. ADR 328,200 9,887 88162420
Therapeutic Discovery Corp. (1 share Class A and 1 share
ALZA Corp. warrant) (a) 44,830 246 88337620
Warner-Lambert Co. 50,000 3,375 93448810
74,294
MEDICAL EQUIPMENT & SUPPLIES - 1.4%
Owens & Minor, Inc. 136,200 3,133 69073010
Pall Corp. 208,500 3,831 69642930
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
SciMed Life Systems, Inc. (a) 305,100 $ 11,975 80861410
Tokos Medical Corp. (a) 130,000 682 88910010
19,621
MEDICAL FACILITIES MANAGEMENT - 4.6%
Columbia Healthcare Corp. 74,477 2,476 19767910
Community Psychiatric Centers 211,600 2,962 20401510
HCA - Hospital Corporation of America (a) 100,000 3,413 40412010
HEALTHSOUTH Rehabilitation Corp. (a) 366,450 9,253 42192410
Healthwise America, Inc. (a) 15,160 375 42221L10
Medical Care America, Inc. (a) 358,420 8,199 58450C10
Surgical Care Affiliates, Inc. 151,600 2,350 86881810
U.S. Healthcare, Inc. 543,300 31,308 91191010
Vivra, Inc. (a) 177,900 4,114 92855M10
64,450
TOTAL HEALTH 158,365
INDUSTRIAL MACHINERY & EQUIPMENT - 4.8%
ELECTRICAL EQUIPMENT - 3.0%
BBC Brown Boveri & Cie (Bearer) 15,075 10,982 05599099
Duracell International, Inc. 326,900 11,728 26633L10
Itel Corp. (a) 336,200 9,414 46564210
Lifeline Systems, Inc. (a)(d) 280,800 1,334 53219210
Sensormatic Electronics Corp. 237,000 8,265 81726510
41,723
INDUSTRIAL MACHINERY & EQUIPMENT - 1.5%
Deere & Co. 156,300 11,566 24419910
Joy Technologies, Inc. Class A (a) 96,100 1,153 48120610
Singer Company 132,900 4,967 82930F10
Stewart & Stevenson Services, Inc. 57,200 2,932 86034210
20,618
POLLUTION CONTROL - 0.3%
Attwoods PLC:
ADR 281,744 2,817 04987020
Ord. 636,000 1,287 04987010
TETRA Technologies, Inc. (a) 50,300 358 88162F10
4,462
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 66,803
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 9.1%
BROADCASTING - 2.7%
Home Shopping Network, Inc. 49,250 $ 733 43735110
International Cablecasting Technologies, Inc. (a) 384,200 1,249 45921L10
International Cabletel, Inc. (a) 107,589 2,528 45921610
Jones Intercable, Inc. Class A 319,100 5,624 48020620
Silver King Communications, Inc. (a) 17,750 177 82774010
Tele-Communications, Inc. Class A (a) 463,500 14,021 87924010
Television Broadcast Limited Ord. 766,000 3,172 87953110
Valuevision International, Inc. (a) 148,800 2,288 92047K10
Viacom, Inc. (non-vtg.) (a) 170,800 7,665 92552430
37,457
ENTERTAINMENT - 1.1%
Carnival Cruise Lines, Inc. 228,200 10,811 14365810
Cedar Fair LP 112,900 3,966 15018510
14,777
LODGING & GAMING - 4.8%
Autotote Corp. Class A (a) 248,800 5,474 05332310
Caesars World, Inc. (a) 122,800 6,554 12769510
Delta Queen Steamboat Co. 96,100 1,670 24779L10
Four Seasons Hotels, Inc. 377,400 3,712 35100E10
Hospitality Franchise Systems, Inc. (a) 310,600 16,501 44091210
La Quinta Motor Inns, Inc. 204,150 7,196 50419510
Mirage Resorts, Inc. (a) 341,250 8,147 60462E10
President Riverboat Casinos, Inc. (a) 232,700 5,119 74084810
Promus Companies, Inc. (a) 286,800 13,121 74342A10
67,494
PUBLISHING - 0.2%
Scholastic Corp. (a) 77,900 3,388 80706610
RESTAURANTS - 0.3%
Au Bon Pain, Inc. (a) 138,100 3,142 05010310
Buffets, Inc. (a) 48,000 1,236 11988210
4,378
TOTAL MEDIA & LEISURE 127,494
NONDURABLES - 1.7%
BEVERAGES - 0.5%
COTT Corp. 40,000 984 22163N10
Guinness PLC Ord. 910,000 6,411 40203310
7,395
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.6%
Colgate-Palmolive Co. 137,400 $ 8,570 19416210
TOBACCO - 0.6%
Universal Corp. 292,100 7,485 91345610
TOTAL NONDURABLES 23,450
PRECIOUS METALS - 0.1%
Sunshine Mining Co. (a) 340,000 893 86783310
RETAIL & WHOLESALE - 7.1%
APPAREL STORES - 3.0%
Catherines Stores Corp. (a) 120,000 2,100 14916F10
Filene's Basement Corp. (a) 303,300 3,298 31686610
Limited, Inc. (The) 242,300 4,149 53271610
Petrie Stores Corp. 337,600 9,833 71643410
TJX Companies, Inc. 762,500 22,208 87254010
41,588
GENERAL MERCHANDISE STORES - 1.6%
Carter Hawley Hale Stores, Inc. (a) 319,100 3,031 14622730
Mac Frugals Bargains C/O, Inc. (a) 227,100 4,457 55415210
Meyer (Fred), Inc. (a) 96,100 3,460 59309810
Sears, Roebuck & Co. 38,400 2,026 81238710
Wal-Mart Stores, Inc. 384,500 9,612 93114210
22,586
GROCERY STORES - 0.8%
Food Lion, Inc. Class A 604,800 3,931 34477520
Stop & Shop Companies, Inc. (a) 378,600 7,667 86209910
11,598
RETAIL & WHOLESALE, MISCELLANEOUS - 1.7%
CML Group, Inc. 240,550 5,683 12582010
Fingerhut Companies, Inc. 65,600 1,845 31786710
International Semi-Tech Microelectronics, Inc. (a) 96,100 545 46031K50
Lowe's Companies, Inc. 140,500 8,325 54866110
Sun Television & Appliances, Inc. 165,500 3,517 86688110
Waban, Inc. (a) 302,600 4,123 92939410
24,038
TOTAL RETAIL & WHOLESALE 99,810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 1.9%
LEASING & RENTAL - 1.0%
Agency Rent-A-Car, Inc. (a) 415,400 $ 5,452 00845010
Blockbuster Entertainment Corp. 261,500 8,009 09367610
13,461
PRINTING - 0.1%
Bowne & Co., Inc. 77,800 1,692 10304310
SERVICES - 0.8%
Block (H&R), Inc. 188,300 7,673 09367110
National Education Corp. (a) 230,000 1,438 63577110
Supercuts, Inc. (a) 186,000 2,767 86805710
11,878
TOTAL SERVICES 27,031
TECHNOLOGY - 4.2%
COMMUNICATIONS EQUIPMENT - 0.2%
Cisco Systems, Inc. (a) 38,500 2,488 17275R10
COMPUTER SERVICES & SOFTWARE - 1.6%
Cheyenne Software, Inc. (a) 35,000 967 16688810
ECI Telecom Ltd. 282,600 7,242 26825810
Electronics For Imaging, Inc. (a) 66,500 1,097 28608210
Intuit (a) 19,200 818 46120210
Microsoft Corp. (a) 128,850 10,389 59491810
Software Toolworks, Inc. (a) 230,600 2,335 83404420
22,848
COMPUTERS & OFFICE EQUIPMENT - 0.0%
XYVision, Inc. (a) 165,750 52 98418010
ELECTRONIC INSTRUMENTS - 0.6%
Kulicke & Soffa Industries, Inc. (a) 186,600 2,612 50124210
Teradyne, Inc. (a) 197,900 5,492 88077010
8,104
ELECTRONICS - 1.8%
Anthem Electronics, Inc. (a) 344,400 9,944 03673210
Solectron Corp. (a) 196,400 5,573 83418210
Texas Instruments, Inc. 142,500 9,049 88250810
24,566
TOTAL TECHNOLOGY 58,058
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 3.3%
AIR TRANSPORTATION - 1.5%
AMR Corp. (a) 98,000 $ 6,566 00176510
Southwest Airlines Co. 369,100 13,841 84474110
20,407
RAILROADS - 0.8%
Conrail, Inc. 112,600 7,530 20836810
Kansas City Southern Industries, Inc. 69,600 3,585 48517010
11,115
SHIPPING - 1.0%
Bergesen Group:
Class A 34,400 669 08399010
Class B 322,500 6,271 08399011
Overseas Shipholding Group, Inc. 325,700 7,695 69036810
14,635
TOTAL TRANSPORTATION 46,157
UTILITIES - 10.9%
CELLULAR - 4.7%
Cellular, Inc. (a) 201,800 3,532 15116310
Cellular Communications, Inc. Class P (a) 521,933 25,199 15091793
Cellular Communications International, Inc. (a) 35,789 787 15091810
Cellular Communications Puerto Rico, Inc. (a) 72,735 1,637 15091910
Pactel Corp. (a) 20,100 500 69525210
Rogers Communications, Inc. Class B (a) 1,315,968 21,779 77510920
Securicor Group A 690,000 8,805 81399110
United States Cellular Corp. (a) 110,400 3,864 91168410
66,103
ELECTRIC UTILITY - 2.2%
Central & South West Corp. 100,000 3,025 15235710
Entergy Corp. 455,500 16,384 29364F10
NIPSCO Industries, Inc. 325,000 10,684 62914010
30,093
TELEPHONE SERVICES - 3.7%
Bell Atlantic Corp. 388 23 07785310
Telebras PN (Pfd. Reg.) 55,500,000 1,892 95499792
Telephone & Data Systems, Inc. 957,753 49,923 87943310
51,838
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
WATER - 0.3%
Welsh Water PLC Ord. 350,000 $ 3,619 94999395
TOTAL UTILITIES 151,653
TOTAL COMMON STOCKS
(Cost $1,053,457) 1,377,406
CORPORATE BONDS - 1.0%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (000S)
CONVERTIBLE BONDS - 0.4%
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
Leucadia National Corp. 5 1/4%, 2/1/03 Ba2 $ 2,230 2,230 527288AG
HEALTH - 0.0%
DRUGS & PHARMACEUTICALS - 0.0%
Chiron Corp. 1.90%, 11/17/00 (e) Ba3 1,150 989 170040AB
RETAIL & WHOLESALE - 0.1%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
CML Group, Inc. 5 1/2%, 1/15/03 (e) - 1,000 1,145 125820AB
UTILITIES - 0.1%
CELLULAR - 0.1%
Rogers Communications, Inc. liquid yield option
notes 0%, 5/20/13 Ba3 2,590 1,030 775109AD
TOTAL CONVERTIBLE BONDS 5,394
NONCONVERTIBLE BONDS - 0.6%
ENERGY - 0.4%
ENERGY SERVICES - 0.4%
Global Marine, Inc. 12 3/4%, 12/15/99 B1 5,000 5,550 379352AG
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 0.2%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.2%
International Semi-Tech Microelectronics, Inc.
secured 0%, 8/15/03 (c) Ba2 $ 4,000 $ 2,080 46031KAA
TECHNOLOGY - 0.0%
COMPUTERS & OFFICE EQUIPMENT - 0.0%
XYVision, Inc. 15%, 6/30/95 (b) - 773 580 983995AB
TOTAL NONCONVERTIBLE BONDS 8,210
TOTAL CORPORATE BONDS
(Cost $13,043) 13,604
REPURCHASE AGREEMENTS - 0.5%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.23%
dated 12/31/93 due 1/3/94 $ 6,891 6,889
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,073,389) $ 1,397,899
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
4. Affiliated company (see Note 5 of Notes to Financial Statements).
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,225,000 or 0.2% of net
assets.
OTHER INFORMATION
Distribution of investments by country, as a percentage of total value of
investment in securities, is as follows:
United States 87.4%
Canada 4.6
United Kingdom 1.8
Israel 1.2
Others (individually less than 1%) 5.0
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1993, the aggregate cost of investment securities for
income tax purposes was $1,074,291,000. Net unrealized appreciation
aggregated $323,608,000, of which $384,805,000 related to appreciated
investment securities and $61,197,000 related to depreciated investment
securities.
The fund hereby designates $43,055,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXEPT PER-SHARE AMOUNTS) DECEMBER 31, 1993
ASSETS 43. 44.
45.Investment in securities, at value (including 46. $ 1,397,899
repurchase agreements of $6,889) (cost $1,073,389)
(Notes 1 and 2) - See accompanying schedule
47.Cash 48. 1
49.Receivable for investments sold 50. 6,657
51.Receivable for fund shares sold 52. 7,414
53.Dividends receivable 54. 1,494
55.Interest receivable 56. 161
57.Other receivables 58. 784
59. TOTAL ASSETS 60. 1,414,410
LIABILITIES 61. 62.
63.Payable for fund shares redeemed $ 9,913 64.
65.Dividends payable 10,048 66.
67.Accrued management fee 882 68.
69.Other payables and accrued expenses 371 70.
71. TOTAL LIABILITIES 72. 21,214
73.NET ASSETS 74. $ 1,393,196
75.Net Assets consist of (Note 1): 76. 77.
78.Paid in capital 79. $ 1,026,922
80.Undistributed net investment income 81. 215
82.Accumulated undistributed net realized gain (loss) on 83. 41,549
investments
84.Net unrealized appreciation (depreciation) on 85. 324,510
investment securities
86.NET ASSETS, for 23,580 shares outstanding 87. $ 1,393,196
88.NET ASSET VALUE, offering price and redemption price 89. $59.08
per share ($1,393,196 (divided by) 23,580 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME 91. $ 13,880
90.Dividends (including $38 received from affiliated
issuers) (Note 5)
92.Interest 93. 3,624
94. TOTAL INCOME 95. 17,504
EXPENSES 96. 97.
98.Management fee (Note 4) $ 6,847 99.
Basic fee
100. Performance adjustment 1,627 101.
102.Transfer agent fees (Note 4) 2,685 103.
104.Accounting fees and expenses (Note 4) 543 105.
106.Non-interested trustees' compensation 8 107.
108.Custodian fees and expenses 98 109.
110.Registration fees 70 111.
112.Audit 31 113.
114.Legal 25 115.
116.Interest (Note 6) 2 117.
118.Miscellaneous 104 119.
120. Total expenses before reductions 12,040 121.
122. Expense reductions (Note 7) (55) 11,985
123.NET INVESTMENT INCOME 124. 5,519
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 126. 149,580
(NOTES 1 AND 3)
125.Net realized gain (loss) on investment securities
(including realized gain (loss) of $4 on sales of
investment in affiliated issuers)
127.Change in net unrealized appreciation 128. 67,567
(depreciation) on investment securities
129.NET GAIN (LOSS) 130. 217,147
131.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 132. $ 222,666
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1993 1992
INCREASE (DECREASE) IN NET ASSETS
133.Operations $ 5,519 $ 10,486
Net investment income
134. Net realized gain (loss) on investments 149,580 78,040
135. Change in net unrealized appreciation 67,567 61,878
(depreciation) on
investments
136. 222,666 150,404
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM
OPERATIONS
137.Distributions to shareholders (5,588) (8,360)
From net investment income
138. In excess of net investment income (294) -
139. From net realized gain (110,237) (60,966)
140. (116,119) (69,326)
TOTAL DISTRIBUTIONS
141.Share transactions 934,377 650,645
Net proceeds from sales of shares
142. Reinvestment of distributions from: 5,260 7,425
Net investment income
143. 100,537 55,284
Net realized gain
144. Cost of shares redeemed (868,788) (570,793)
145. 171,386 142,561
Net increase (decrease) in net assets resulting from
share
transactions
146. 277,933 223,639
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS 147. 148.
149. Beginning of period 1,115,263 891,624
150. $ 1,393,196 $ 1,115,263
End of period (including undistributed net investment
income of $215 and $64,408, respectively)
OTHER INFORMATION 152. 153.
151.Shares
154. Sold 16,037 12,596
155. Issued in reinvestment of distributions from: 92 138
Net investment income
156. 1,751 1,038
Net realized gain
157. Redeemed (14,878) (11,158)
158. Net increase (decrease) 3,002 2,614
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
159. YEARS ENDED DECEMBER 31,
160. 1993 1992(DAGGER) 1991 1990 1989
161.SELECTED PER-SHARE
DATA
162.Net asset value, $ 54.20 $ 49.63 $ 38.25 $ 44.22 $ 37.43
beginning of period
163.Income from Investment
Operations
164. Net investment income .17 .58** .66 .61 .85
165. Net realized and 10.04 7.66 12.99 (6.20) 10.79
unrealized
gain (loss) on
investments
166. Total from investment 10.21 8.24 13.65 (5.59) 11.64
operations
167.Less Distributions
168. From net investment (.26) (.44) (.48) (.24) (.63)
income
169. In excess of net (.01) - - - -
investment
income
170. From net realized gain (5.06) (3.23) (1.79) (.14) (4.22)
171. Total distributions (5.33) (3.67) (2.27) (.38) (4.85)
172.Net asset value, end of $ 59.08 $ 54.20 $ 49.63 $ 38.25 $ 44.22
period
173.TOTAL RETURN 19.15%(double dagger) 16.77% 36.28% (12.66)% 31.65%
174.RATIOS AND
SUPPLEMENTAL DATA
175.Net assets, end of $ 1,393 $ 1,115 $ 892 $ 702 $ 889
period
(in millions)
176.Ratio of expenses to .92%* .56% .53% .61% .58%
average net assets
177.Ratio of expenses to .93%* .56% .53% .61% .58%
average net assets before
expense reductions
178.Ratio of net investment .43% 1.14% 1.43% 1.51% 1.76%
income to average net
assets
179.Portfolio turnover rate 50% 47% 57% 48% 67%
</TABLE>
* SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
** INVESTMENT INCOME AND EXPENSES PER SHARE HAVE BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING.
(dagger) AS OF JANUARY 1, 1992, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
(double dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Trend Fund (the fund) is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust and is
authorized to issue an unlimited number of shares. The following summarizes
the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities, other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
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 all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes where recovery of such taxes is not assured.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
partnerships, non-taxable dividends and losses deferred due to wash sales.
The fund also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to paid in
capital.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of December 31, 1992 have been reclassified to
reflect an increase in paid in capital of $148,404,000, a decrease in
undistributed net investment income of $62,225,000 and a decrease in
accumulated net realized gain on investments of $86,178,000.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $691,730,000 and $616,549,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. Effective August 1, 1993, the individual fund
fee rate was raised to .30%. The basic fee is subject to a performance
adjustment (up to a maximum of + or - .20%) based on the fund's investment
performance as compared to the appropriate index over a specified period of
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
time. For the period, the management fee was equivalent to an annual rate
of .65% of average net assets after the performance adjustment.
On July 14,1993, the shareholders of the fund approved a new management
contract which took effect on August 1, 1993. The new management contract
increases the individual fund fee rate from .12% to .30% and revises the
group fee rate schedule.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $447,000 for the period.
5. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. TRANSACTIONS WITH COMPANIES WHICH ARE OR
WERE AFFILIATES ARE AS FOLLOWS:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
First Central Financial Corp. $ - $ 39 $ 38 $ 2,118
Lifeline Systems, Inc. (a) - - - 1,334
TOTALS $ - $ 39 $ 38 $ 3,452
(a) Non-income producing
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market .
6. BANK BORROWINGS -
CONTINUED
value in excess of 220% of the total bank borrowings The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $7,711,000. The weighted average
interest rate was 3.50%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$55,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Fidelity Trend Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Trend Fund, including the schedule of portfolio investments, as of
December 31, 1993, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Trend Fund as of December 31, 1993, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
February 4, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Alan J. Leifer, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty Fund
Growth Company Fund
Low-Priced Stock Fund
Magellan(Registered trademark) Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)FIDELITY
TREND
FUND
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
cautions.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 31 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 35 The auditor's opinion.
ACCOUNTANTS
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. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
As 1993 draws to a close and the stock market continues to climb, many of
you may be wondering if this is the top and what you should do. Making a
sound decision requires some perspective on the market and an understanding
of its risks.
Those of us who invested in the stock market during the '80s benefited from
a period of unusually good performance. During that time, the Standard
& Poor's 500 index - a common proxy for the U.S. stock market -
returned 18% on average each year. This was far above the market's average
annual return since 1926 of 10%. Although the S&P 500 was up 7.62% for
1992, that was less than half of what we saw in the '80s and below the
market's long-term average. We believe this could be an example of the more
modest returns we might see in the '90s.
It's impossible to predict where the market will go from here. What we do
know is that historically the market has on average had a decline of 10% or
more every two years. We haven't seen a 10% drop in the market since
October 1990. Furthermore, stocks today are not cheap. Current valuations -
yardsticks like high price-to-earnings ratios and low dividend yields - are
at extremes. Low interest rates and the record amount of money that has
poured into stock funds in 1993 have helped push the market higher. As real
estate investments have become less attractive, many people have instead
put money in stocks, also helping to fuel the market's rise.
When there is this much uncertainty about what's next, a long-term,
disciplined approach to the stock market seems to make the most sense. A
good definition of long term is a minimum of five years. If you leave your
money invested that long, you should be able to ride out the market's
declines. A regular investment plan - investing a certain amount of money
each month or quarter - should also help you avoid buying exclusively at
the peak of the market. While this strategy can't protect you from a loss
in a declining market, and won't guarantee a profit, it should over time
help lower the average cost of your purchase. The key is that you follow
your plan during both market ups and downs.
No matter what happens in the market, we believe you can benefit from
practicing these investment principles. If we can help, please call us at
1-800-544-8888.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
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. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Value 29.46% 94.24% 217.33%
S&P 500(Registered trademark) 14.94% 97.35% 307.69%
Average Capital Appreciation Fund 23.53% 107.74% 227.26%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - one, five, or ten years. You can compare these figures
to the performance of the Standard & Poor's 500 Composite Stock Price
Index - a common proxy for the U.S. stock market. You can also compare them
to the average growth fund, which reflects the performance of over 300
capital appreciation funds tracked by Lipper Analytical Services. Both
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Value 29.46% 14.20% 12.24%
S&P 500(Registered trademark) 14.94% 14.56% 15.09%
Average Capital Appreciation Fund 23.53% 15.14% 11.79%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Value (039) S&P 500
10/31/83 10000.00 10000.00
11/30/83 10520.84 10211.00
12/31/83 10591.97 10157.90
01/31/84 10275.72 10101.02
02/29/84 9295.84 9745.46
03/31/84 9404.72 9914.06
04/30/84 9228.45 10008.24
05/31/84 8538.90 9453.79
06/30/84 8901.82 9658.93
07/31/84 8637.41 9539.16
08/31/84 9492.86 10593.24
09/30/84 9580.99 10595.36
10/31/84 9606.92 10636.68
11/30/84 9477.30 10517.55
12/31/84 9682.25 10795.21
01/31/85 10620.10 11636.16
02/28/85 10625.43 11779.28
03/31/85 10582.80 11787.53
04/30/85 10497.54 11776.92
05/31/85 10859.89 12457.63
06/30/85 10913.18 12653.21
07/31/85 10998.44 12634.23
08/31/85 10827.92 12526.84
09/30/85 10444.25 12134.75
10/31/85 10811.93 12695.38
11/30/85 11328.82 13566.28
12/31/85 11821.77 14222.89
01/31/86 12234.67 14302.54
02/28/86 13000.69 15372.37
03/31/86 13918.83 16230.14
04/30/86 13706.95 16046.74
05/31/86 14092.68 16900.43
06/30/86 14315.43 17186.05
07/31/86 13739.55 16225.35
08/31/86 14456.68 17429.27
09/30/86 13766.72 15987.87
10/31/86 14391.49 16910.37
11/30/86 14223.07 17321.29
12/31/86 13563.80 16879.60
01/31/87 14497.78 19153.28
02/28/87 15092.84 19909.83
03/31/87 15189.01 20485.23
04/30/87 14942.58 20302.91
05/31/87 15309.23 20479.54
06/30/87 15820.14 21513.76
07/31/87 17106.42 22604.51
08/31/87 16793.87 23447.66
09/30/87 16878.02 22934.15
10/31/87 12628.46 17994.14
11/30/87 11678.77 16511.42
12/31/87 12400.05 17767.94
01/31/88 12868.89 18515.97
02/29/88 14059.00 19378.81
03/31/88 13968.84 18780.01
04/30/88 13932.78 18988.47
05/31/88 13902.73 19153.66
06/30/88 14491.77 20032.82
07/31/88 14551.88 19956.69
08/31/88 14389.59 19278.17
09/30/88 15435.45 20099.42
10/31/88 16337.06 20658.18
11/30/88 15651.84 20362.77
12/31/88 16001.89 20719.12
01/31/89 16632.41 22235.76
02/28/89 16252.87 21682.08
03/31/89 16944.62 22187.28
04/30/89 17875.10 23338.80
05/31/89 18450.53 24284.02
06/30/89 18983.11 24145.60
07/31/89 20752.26 26325.95
08/31/89 20831.84 26841.94
09/30/89 20440.06 26731.88
10/31/89 19074.94 26111.70
11/30/89 19540.18 26644.38
12/31/89 19673.51 27283.85
01/31/90 17895.50 25453.10
02/28/90 17997.29 25781.45
03/31/90 18397.69 26464.66
04/30/90 18241.60 25803.04
05/31/90 19422.42 28318.84
06/30/90 18832.01 28126.27
07/31/90 18655.57 28036.26
08/31/90 17020.07 25501.78
09/30/90 16388.94 24259.85
10/31/90 16022.48 24155.53
11/30/90 16748.61 25715.98
12/31/90 17150.98 26433.45
01/31/91 18061.91 27585.95
02/28/91 19150.74 29558.35
03/31/91 19527.92 30273.66
04/30/91 19784.12 30346.32
05/31/91 20887.19 31657.28
06/30/91 19919.34 30207.37
07/31/91 20894.31 31615.04
08/31/91 21399.59 32364.31
09/30/91 21235.90 31823.83
10/31/91 21484.99 32250.27
11/30/91 20260.93 30950.58
12/31/91 21643.80 34491.33
01/31/92 22538.90 33849.79
02/29/92 23419.32 34289.84
03/31/92 23221.23 33621.19
04/30/92 23874.21 34609.65
05/31/92 24116.32 34779.24
06/30/92 23800.84 34261.03
07/31/92 24556.54 35662.30
08/31/92 23984.26 34931.23
09/30/92 24409.80 35343.41
10/31/92 24512.52 35467.12
11/30/92 25591.04 36676.54
12/31/92 26221.53 37127.67
01/31/93 26941.05 37439.54
02/28/93 27081.99 37948.72
03/31/93 28409.75 38749.43
04/30/93 28565.52 37811.70
05/31/93 29158.94 38825.05
06/30/93 29158.94 38937.64
07/31/93 29782.03 38781.89
08/31/93 30820.50 40251.73
09/30/93 30805.67 39941.79
10/31/93 31732.88 40768.58
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Value
Fund on October 31, 1983. As the chart shows, by October 31, 1993, the
value of your investment would have grown to $31,733 - a 217.33% increase
on your initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends reinvested, the same $10,000
investment would have grown to $40,769 - a 307.69% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
By historical standards, stocks
performed well during the 12
months ended October 31, 1993.
The Standard & Poor's 500
index - a broad measure of the
market's overall performance -
rose 14.94%, due in part to low
inflation, declining interest rates
and a gradually improving
economy. That compared
favorably with the market's
long-term average annual return
of about 10%. Continued poor
performance by the so-called
nondurables - tobacco, drugs
and brand-name consumer
products stocks - was offset by
impressive results in other
sectors. Consumer durables -
including autos and housing -
performed well. Though
sputtering a bit late in the year,
technology stocks returned
nearly 17% as a group. Also,
financial stocks produced
impressive returns. In general,
small stocks outpaced large
stocks. The NASDAQ Composite
Index, which tracks over-the-
counter stocks and includes
many technology companies,
rose 28.77%; while the Dow
Jones Industrial Average, an
index of 30 blue-chip stocks, rose
17.46%. Two widely watched
benchmarks broke records
during the period. The yield on
the 30-year Treasury cracked 6%
in early September, and was
yielding 5.97% by October 31.
Meanwhile, the Dow broke
through the 3600 mark on August
18, and finished the period at
3681.
An interview with Jeffrey Ubben, Portfolio Manager of Fidelity
Value Fund
Q. JEFF, HOW HAS THE FUND DONE?
A. It's been a good year. The fund had a total return of 29.46% for the 12
months ended October 31. That beat the 23.53% total return of the average
capital appreciation fund, according to Lipper Analytical Services.
Q. WHAT HELPED YOU BEAT THE
AVERAGE?
A. Over the past year, I've relied heavily on cyclical stocks - stocks that
are more sensitive to changes in the economy. Although the economy hasn't
taken off, it is showing signs of life, which is helping cyclicals. For
example, airlines are filling more seats. I had 3% of the fund in airlines
which, as a sector, gained 10.8% in October alone. I've also been holding
companies that produce industrial equipment, like Caterpillar and Deere.
Caterpillar's stock is up 32% since the end of April and Deere has gained
28%. Looking to the future, I've been buying stocks known as "deep
cyclicals," which produce the raw materials - such as aluminum, steel and
wood products - for various manufacturers of finished products. A stronger
economy should lead to more auto manufacturing and new building
construction, increasing the demand for these products.
Q. HAVE YOU PLACED BETS ON ANY PARTICULAR SECTORS OF THE MARKET?
A. I increased the fund's stake in energy stocks to about 13%, and they
performed respectably well. British Petroleum, now the fund's largest
holding, is a play on worldwide growth. I see increased demand for oil
coupled with a tightening supply. Over the past year, moving out of or
staying away from certain sectors has also helped the fund. I've lessened
the fund's investment in financial stocks, though it's still the fund's
third largest sector behind basic industries and energy. I thought the high
prices of many bank stocks had come to reflect favorable business
conditions that were unsustainable. Also, I've stayed away from consumer
non-durable stocks like Philip Morris. Aggressive product pricing by some
of these companies in the 1980's caused a backlash in the 90's as consumers
resisted premium brands for products like cigarettes, and instead leaned
toward generic brands.
Q. ANY REGRETS OVER THE LAST SIX MONTHS?
A. Yes. I missed most of the run-up on auto stocks. I had about 2% of the
fund in auto companies and I should have had more. U.S. automakers gained
pricing power - the ability to raise prices - when their Japanese
counterparts had to raise their prices to reflect a strong currency and
higher capital costs. The peak earnings of the U.S. auto companies exceeded
my expectations, and their stocks had more momentum than I thought they
would.
Q. SIX MONTHS AGO SEAGRAM'S LTD. WAS THE FUND'S LARGEST HOLDING. NOW IT
DOESN'T EVEN SHOW UP IN THE TOP 20. WHAT HAPPENED?
A. This year Seagram's bought 7% of Time Warner's stock. Before this deal,
Seagram's had regularly bought back shareholders' stock and I felt the
interests of their shareholders were a top priority. But when the company
bought Time Warner instead of repurchasing stock, I lost faith. Plus, I
felt the company's fundamentals - or potential for earnings growth -
weren't improving.
Q. SO MANY PEOPLE SAY THE STOCK MARKET IS OVERPRICED. YOUR GOAL IN THIS
FUND IS TO FIND VALUE STOCKS - STOCKS THAT ARE CHEAP RELATIVE TO THE
COMPANY'S EARNINGS. WHERE DO YOU FIND VALUE UNDER THESE CONDITIONS?
A. Since so many U.S. stocks are expensive, lately I've gone overseas. I've
increased the fund's foreign stake from about 13% in late April to about
22% in late October. I've concentrated on finding attractive companies in
which to invest, rather than focusing on geographical areas. Just the other
day, I bought stock in three Finnish paper companies. Lower wood costs and
a devalued currency gave the companies good business prospects, and their
stocks were selling at just a little more than book value - or the sum of
their assets. I'm being very careful, though. As more and more investors
look overseas, the bargains are going away.
Q. WHAT'S YOUR OUTLOOK FOR '94?
A. I think interest rates are heading back up. If I'm right, the stock
market may slow down because I feel the gains this year have been driven by
falling interest rates. As the economy strengthens, I see the money
shifting away from Wall Street and towards Main Street. Banks can make more
loans to finance the growing inventories of stronger companies. That money
must come out of the bank's financial assets - primarily investments in the
bond market. Taking money out of the financial markets could weaken them.
That's why I'm positioning the fund in a somewhat defensive manner. I have
about 11% of the fund's investments in cash and other equivalents and 3% in
bonds. I would caution investors to keep in mind that it's important to
have a long-term strategy with any type of stock investment.
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
in companies that own
valuable assets or are
undervalued in the
marketplace
START DATE: December 1, 1978
SIZE: as of October 31, 1993,
over $1.6 billion
MANAGER: Jeffrey Ubben,
since December 1992;
previously managed Select
Defense and Aerospace,
Select Electric Utilities, Select
Utilities, Utilities Income, and
Qualified Dividend
(checkmark)
JEFFREY UBBEN ON THE GLOBAL
ECONOMY:
"I'm a contrarian. Unlike many
people, I think interest rates
and inflation are going up
worldwide. The seeds of
higher inflation are slowly
taking root. Europe and the
U.S. are having trouble
creating jobs and the
politicians will not tolerate
that. They are laying the
groundwork for inflation by
increasing the money supply in
their respec- tive economies.
The U.S. economy is already
responding to the growing
monetary base. Pretty soon,
you'll see Europe and Japan
follow suit, and inflation should
result. That's why I'm based in
cyclicals. I want to invest
heavily in stocks that do well
when the worldwide economy
does well."
(bullet) The fund's stake in energy
investments grew from 10.3%
six months ago to 13.2% on
October 31, making energy
the fund's second largest
industry concentration.
(bullet) About 22% of the fund's
investments are overseas,
primarily in Japan, Canada,
the United Kingdom and
Scandinavia.
DISTRIBUTIONS
The Board of Trustees of
Fidelity Value Fund voted to
pay on December 6, 1993, to
shareholders of record at the
opening of business on
December 3, 1993, a
distribution of $2.80 derived
from capital gains realized
from sales of portfolio
securities and a dividend of
$.34 from net investment
income.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
British Petroleum PLC ADR 2.1 1.4
Canadian Pacific Ltd. Ord. 1.7 1.1
HCA - Hospital Corporation of
America Class A 1.6 1.2
Litton Industries, Inc. 1.6 0.8
Columbia Healthcare Corp. 1.1 0.0
Georgia-Pacific Corp. 1.0 0.2
Polaroid Corp. 1.0 0.9
Meredith Corp. 1.0 0.2
UAL Corp. 0.9 0.7
Airgas, Inc. 0.9 0.6
TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Basic Industries 14.6 11.2
Energy 13.2 10.3
Finance 9.8 13.6
Retail & Wholesale 5.7 5.1
Durables 5.5 6.8
ASSET ALLOCATION
AS OF OCTOBER 31, 1993* AS OF APRIL 30, 1993**
Row: 1, Col: 1, Value: 2.6
Row: 1, Col: 2, Value: 11.5
Row: 1, Col: 3, Value: 25.9
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Row: 1, Col: 1, Value: 1.1
Row: 1, Col: 2, Value: 14.5
Row: 1, Col: 3, Value: 24.4
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Stocks 85.9%
Bonds 2.6%
Short-term and
other investments 11.5%
Stocks 84.4%
Bonds 1.1%
Short-term and
other investments 14.5%
* FOREIGN
INVESTMENTS 21.5%
** FOREIGN
INVESTMENTS 13.1%
INVESTMENTS OCTOBER 31, 1993
Showing Percentage of Total Value of Investments
COMMON STOCKS - 83.8%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.9%
AEROSPACE & DEFENSE - 0.5%
Flightsafety International, Inc. 125,000 $ 4,250 33942310
Thiokol Corp. 150,000 3,956 88410310
8,206
DEFENSE ELECTRONICS - 0.4%
Loral Corp. 136,600 4,337 54385910
Nichols Research Corp. (b) 140,400 1,790 65381810
6,127
TOTAL AEROSPACE & DEFENSE 14,333
BASIC INDUSTRIES - 14.4%
CHEMICALS & PLASTICS - 5.1%
Airgas, Inc. 343,000 14,149 00936310
Akzo NV Ord. 22,500 2,131 01019910
Ferro Corp. 243,300 7,725 31540510
GEON 110,400 2,429 37246W10
Georgia Gulf Corp. (b) 378,300 7,140 37320020
Grace (W.R.) & Co. 231,700 8,747 38388310
Hanna (M.A.) Co. 38,000 1,216 41052210
IMC Fertilizer Group, Inc. 104,000 3,783 44966910
Imperial Chemical Industries:
PLC ADR 126,800 5,452 45270450
Ord. 200,000 2,121 45270440
Lubrizol Corp. 121,800 4,233 54927110
OM Group, Inc. (b) 300,000 5,100 67087210
Potash Corp. of Saskatchewan 368,800 7,122 73755L10
Sealed Air Corp. (b) 39,900 1,192 81211510
Vigoro Corp. 360,200 9,365 92675410
81,905
IRON & STEEL - 3.3%
Allegheny Ludlum Industries, Inc. 602,500 12,426 01690010
Bethlehem Steel Corp.:
ADR 177,600 3,352 11101530
Ord. 4,950,800 9,480 11101510
PLC (b) 201,300 3,372 08750910
Compania Siderurgica Nacional 100,000,000 1,954 24499523
Inland Steel Industries, Inc. (b) 142,900 4,823 45747210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
LTV Corp. (b) 154,100 $ 2,369 50192110
USX-U.S. Steel Group 264,900 9,934 90337T10
Wheeling Pittsburgh Corp. (b) 321,900 5,714 96314210
53,424
METALS & MINING - 2.8%
AMAX, Inc. 112,700 2,522 02312710
Alcan Aluminium Ltd. 574,204 11,741 01371610
Aluminum Co. of America 122,000 8,296 02224910
Cameco, Inc. 39,000 738 13321L10
Cyprus Minerals Co. 70,900 1,737 23281P10
De Beers Consolidated Mines Ltd. ADR 267,400 5,314 24025330
Minorco S.A. ADR 275,100 4,986 60434020
Noranda, Inc. 60,000 1,017 65542210
Reynolds Metals Co. 201,100 8,496 76176310
Wolverine Tube, Inc. (b) 44,000 765 97809310
45,612
PACKAGING & CONTAINERS - 0.5%
Owens-Illinois, Inc. (b) 638,400 6,384 69076840
Shorewood Packaging Corp. (b) 165,000 1,733 82522910
8,117
PAPER & FOREST PRODUCTS - 2.7%
Champion International Corp. 116,100 3,410 15852510
Chesapeake Corp. 93,600 2,059 16515910
Consolidated Papers, Inc. 70,000 2,975 20975910
Georgia-Pacific Corp. 251,000 16,127 37329810
International Paper Co. 75,000 4,444 46014610
Metsa Serla 'B' 40,000 1,668 59299992
Mo Och Domsjoe 'B' 70,000 2,098 61399792
Noranda Forest, Inc. 150,000 1,264 65542L10
Repola 493,400 7,286 75999A92
Temple-Inland, Inc. 58,100 2,469 87986810
43,800
TOTAL BASIC INDUSTRIES 232,858
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONGLOMERATES - 4.7%
Brierley Investments Ltd. 2,300,000 $ 1,631 10901410
Canadian Pacific Ltd. Ord. 1,573,600 26,665 13644030
Christies International PLC 210,000 625 17099892
Hanson Trust PLC sponsored ADR 565,300 11,377 41135230
Litton Industries, Inc. (b) 381,100 25,295 53802110
Penn Central Corp. 120,000 4,065 70727110
Sequa Corp. Class A 35,000 1,177 81732010
Teledyne, Inc. 182,600 4,907 87933510
75,742
CONSTRUCTION & REAL ESTATE - 2.7%
BUILDING MATERIALS - 1.4%
Armstrong World Industries, Inc. 174,400 8,066 04247610
BPB Industries PLC 498,100 1,963 05562299
Florida Rock Industries, Inc. 37,400 1,099 34114010
Lafarge Corp. 405,200 8,357 50586210
Medusa Corp. 75,450 2,075 58507230
Southdown, Inc. (b) 15,400 375 84129710
USG Corp. 8,400 185 90329340
22,120
CONSTRUCTION - 0.7%
Pulte Corp. 171,600 6,585 74586710
Redman Industries (b) 77,000 1,270 75764210
Southern Energy Homes, Inc. 30,000 615 84281410
U.S. Home Corp. (b) 123,700 3,402 91192010
11,872
REAL ESTATE - 0.2%
Castle & Cooke Homes, Inc. (b) 278,900 3,591 14842610
REAL ESTATE INVESTMENT TRUSTS - 0.4%
Carr Realty Corp. 70,300 1,634 14441K10
LTC Properties, Inc. 65,100 879 50217510
Manufactured Home Community 100,000 4,450 56468210
6,963
TOTAL CONSTRUCTION & REAL ESTATE 44,546
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 5.1%
AUTOS, TIRES, & ACCESSORIES - 2.2%
Ford Motor Co. 85,500 $ 5,290 34537010
Grupo Dina (Consorcio G) ADR 56,000 1,176 21030610
Johnson Controls, Inc. 160,400 8,782 47836610
TRW, Inc. 116,900 7,876 87264910
Titan Wheel International, Inc. 213,300 4,906 88832810
Toyota Motor Corporation 450,000 7,794 89399999
35,824
CONSUMER ELECTRONICS - 1.5%
Harman International Industries, Inc. (b) 14,900 318 41308610
Matsushita Electric Industrial Co. Ltd. 700,000 9,480 57687910
Sony Corp. 195,000 8,838 83569999
Whirlpool Corp. 90,500 5,781 96332010
24,417
HOME FURNISHINGS - 0.5%
Bassett Furniture Industries, Inc. 29,000 877 07020310
Loewenstein Furniture Group, Inc. (b) 23,000 265 54042210
Miller (Herman), Inc. 136,800 4,172 60054410
Rhodes, Inc. (b) 150,000 2,063 76235P10
7,377
TEXTILES & APPAREL - 0.9%
Burlington Industries Equity, Inc. (b) 163,600 2,413 12169010
DWG Corp. 66,400 2,050 23335110
Guilford Mills, Inc. 17,900 358 40179410
Interface, Inc. Class A 12,600 175 45866510
Unifi, Inc. 345,000 8,668 90467710
13,664
TOTAL DURABLES 81,282
ENERGY - 12.6%
COAL - 0.9%
Addington Resources, Inc. (b) 77,500 1,414 00651610
Ashland Coal, Inc. 58,100 1,627 04390610
MAPCO, Inc. 23,700 1,410 56509710
Pittston Co. Minerals Group (c) 442,600 10,180 72570120
14,631
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - 3.4%
BJ Services Co. (b) 20,500 $ 464 05548210
Baker Hughes, Inc. 175,200 3,942 05722410
Chiles Offshore Corp. (b) 96,000 624 16888710
Enterra Corp. (b) 126,400 2,970 29380510
Global Marine, Inc. (b) 820,000 4,100 37935240
Halliburton Co. 331,300 10,560 40621610
Helmerich & Payne, Inc. 94,500 2,835 42345210
Marine Drilling Cos., Inc. (b) 210,000 1,575 56824020
Noble Drilling Corp. (b) 55,400 547 65504210
Offshore Logistics, Inc. (b) 161,400 2,663 67625510
Rowan Companies, Inc. (b) 186,000 1,767 77938210
Schlumberger Ltd. 170,000 10,774 80685710
Tidewater, Inc. 342,800 7,799 88642310
Tuboscope Vetco Corp. (b) 254,500 2,068 89860010
Western Co. of North America (b) 118,000 1,740 95804340
54,428
OIL & GAS - 8.3%
Amerada Hess Corp. 179,300 9,503 02355110
Anderson Exploration Ltd. 5,000 118 03390110
Apache Corp. 108,000 2,875 03741110
Bridge Oil Ltd. 2,704,000 1,441 10805399
British Petroleum PLC:
ADR 541,200 33,690 11088940
Ord. 1,768 9 11088910
Cabot Oil & Gas Corp. Class A 133,266 3,198 12709710
Canadian Natural Resources Ltd. (b) 59,500 901 13638510
Chauvco Resources Ltd. Class A 297,700 4,002 16260010
Elan Energy, Inc. (b) 135,000 1,278 28390410
Getty Petroleum Corp. 48,300 628 37429010
Horsham Corp. 150,000 2,002 44090710
Kerr-McGee Corp. 79,500 4,005 49238610
London & Scottish Marine Oil Ltd. Ord. 50,800 109 54179710
Louisiana Land & Exploration Co. 94,500 4,276 54626810
Mark Resources, Inc. 50,000 388 57042E10
Morrison Petroleums Ltd. 297,900 2,369 61847310
Murphy Oil Corp. 264,800 11,916 62671710
Occidental Petroleum Corp. 397,300 7,350 67459910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Oryx Energy Co. 52,100 $ 1,244 68763F10
Petroleum Heat & Power, Inc. Class A 362,700 3,446 71660030
Poco Petroleums Ltd. (b) 100,000 691 73036110
Renaissance Energy Ltd. (b) 332,900 8,131 75966610
Repsol SA sponsored ADR 284,000 8,414 76026T20
Tarragon Oil & Gas Ltd. 50,000 672 87629E20
Total Petroleum (North America) Ltd. (b) 104,300 1,214 89150810
Total SA sponsored ADR (b) 357,473 9,965 89151E10
Unocal Corp. 238,000 6,962 91528910
YPF Sociedad Anonima sponsored ADR representing
Class D shares 100,900 2,762 98424510
133,559
TOTAL ENERGY 202,618
FINANCE - 9.8%
BANKS - 2.2%
ABN-AMRO Holdings NV 243 9 00399192
Bank of Boston Corp. 376,330 8,844 06071610
Bank of New York Co., Inc. 194,368 10,350 06405710
Barclays PLC Ord. 5,797 49 06738E10
C.S. Holdings (Bearer) 1,650 3,779 17599792
C.S. Holdings (Bearer) (warrants) (b) 1,900 143 15099426
Citicorp (b) 252,700 9,160 17303410
First Interstate Bancorp 22,400 1,302 32054810
Peoples Heritage Financial Group, Inc. (b) 79,300 912 71114710
34,548
CLOSED END INVESTMENT COMPANY - 0.1%
Free State Consolidated Gold Mines Ltd. ADR 128,700 1,786 35614220
CREDIT & OTHER FINANCE - 0.8%
Argentaria Corp. Bancaria de Esp 45,000 2,017 21991392
Beneficial Corp. 74,100 5,687 08172110
GFC Financial Corp. 164,900 5,132 36160910
12,836
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
FEDERAL SPONSORED CREDIT - 0.9%
Federal Home Loan Mortgage Corporation 241,800 $ 12,392 31340030
Student Loan Marketing Association (b) 50,000 2,231 86387150
14,623
INSURANCE - 2.3%
ACE Ltd. 226,200 7,352 00499G92
Capital Holding Corp. 42,200 1,746 14018610
Exel Ltd. (b) 102,300 4,616 30161610
Fremont General Corp. 67,850 1,790 35728810
Heath (CE) International Holdings 969,002 1,162 42299992
Loews Corp. 130,800 12,246 54042410
Penncorp Financial Group, Inc. 154,500 3,225 70809410
Progressive Corp. (Ohio) 43,900 2,008 74331510
St. Paul Companies, Inc. (The) 21,500 2,016 79286010
36,161
SAVINGS & LOANS - 2.2%
Ahmanson (H.F.) & Co. 433,200 7,852 00867710
California Federal Bank Class A (b) 48,400 611 13020930
CenFed Financial Corp. 45,000 765 15131U10
Charter One Financial Corp. 262,000 8,842 16090310
Crossland Federal Savings Bank, Brooklyn, NY 125,000 3,500 22764B10
FirstFed Michigan Corp. 172,350 3,878 33761R10
Golden West Financial Corp. 135,000 5,754 38131710
Loyola Capital Corp. 94,900 1,578 54908910
Standard Federal Bank 92,400 2,795 85338910
35,575
SECURITIES INDUSTRY - 1.3%
Daiwa Securities 381,000 4,879 23499010
Kokusai Securities 3,000 48 50299092
Nikko Securities 190,000 2,083 65399010
Nomura Securities Co. Ltd. 552,000 10,120 65536130
Paine Webber Group, Inc. 137,000 4,024 69562910
21,154
TOTAL FINANCE 156,683
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 4.1%
DRUGS & PHARMACEUTICALS - 0.8%
Lilly (Eli) & Co. 104,100 $ 5,635 53245710
Upjohn Co. 243,200 7,934 91530210
13,569
MEDICAL EQUIPMENT & SUPPLIES - 0.3%
Kendall International, Inc. (b) 50,000 2,200 48875110
Spacelabs Medical, Inc. 130,100 3,090 84624710
5,290
MEDICAL FACILITIES MANAGEMENT - 3.0%
Columbia Healthcare Corp. 615,687 17,701 19767910
HCA - Hospital Corporation of America Class A (b) 893,900 25,588
40412010
Health Management Associates, Inc. Class A 62,600 2,332 42193310
National Medical Enterprises, Inc. 162,500 1,828 63688610
47,449
TOTAL HEALTH 66,308
INDUSTRIAL MACHINERY & EQUIPMENT - 4.9%
ELECTRICAL EQUIPMENT - 2.3%
Itel Corp. (b) 267,000 7,609 46564210
Kuhlman Corp. 9,500 159 50120610
LSI Lighting Systems, Inc. (c) 245,000 2,328 50216C10
Murata Manufacturing Co. 142,000 4,984 62699110
Philips Electronics 201,400 4,159 71833799
Philips NV (NY shs.) (b) 365,700 7,634 71833750
Westinghouse Electric Corp. 640,000 9,280 96040210
36,153
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
Caterpillar, Inc. 89,800 8,217 14912310
Deere & Co. 84,800 6,551 24419910
Enerflex SYS, Ltd. 100,000 1,183 29265B10
Indresco, Inc. (b) 279,900 3,534 45590510
Joy Technologies, Inc. Class A (b) 77,400 851 48120610
Manitowoc Co., Inc. 23,300 757 56357110
Mitsubishi Heavy Industry 1,150,000 7,151 60699310
Parker-Hannifin Corp. 200,200 6,857 70109410
Tenneco, Inc. 120,000 6,120 88037010
41,221
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 77,374
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 5.2%
BROADCASTING - 1.4%
BET Holdings, Inc. Class A (b) 53,400 $ 968 08658510
Capital Cities/ABC, Inc. 13,000 7,925 13985910
Heritage Media Corp. Class A (b) 176,800 3,028 42724120
Home Shopping Network, Inc. 184,600 2,377 43735110
Multimedia, Inc. (b) 208,100 8,142 62545K10
22,440
LEISURE DURABLES & TOYS - 0.3%
Coachmen Industries, Inc. 78,400 1,137 18987310
Huffy Corp. 48,200 946 44435610
Tyco Toys, Inc. 200,000 2,250 90212810
4,333
LODGING & GAMING - 0.7%
Caesars World, Inc. (b) 42,453 1,889 12769510
Marriott International, Inc. 355,200 9,324 57190010
11,213
PUBLISHING - 2.5%
Dow Jones & Co., Inc. 243,600 8,678 26056110
MaClean Hunter Ltd. 486,000 4,417 55474980
Meredith Corp. 388,200 15,576 58943310
New York Times Co. (The) Class A 151,100 3,570 65011110
Times Mirror Co., Series A 213,100 7,032 88736010
39,273
RESTAURANTS - 0.3%
Sizzler International, Inc. 257,800 2,610 83013910
VICORP Restaurants, Inc. (b) 120,000 2,490 92581710
5,100
TOTAL MEDIA & LEISURE 82,359
NONDURABLES - 3.5%
AGRICULTURE - 0.3%
Delta & Pine Land Co. (b) 93,300 1,504 24735710
Pioneer Hi-Bred International, Inc. 89,000 3,160 72368610
4,664
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
BEVERAGES - 0.9%
Coors (Adolph) Co. Class B 181,500 $ 3,789 21701610
Dr. Pepper/Seven-Up Companies, Inc. (b) 123,000 2,568 25613130
Seagram Co. Ltd. 265,300 7,635 81185010
13,992
FOODS - 1.1%
ConAgra, Inc. 125,100 3,378 20588710
Dole Food, Inc. 289,300 8,028 25660510
Hormel (George A) & Co. 264,300 5,980 44045210
17,386
HOUSEHOLD PRODUCTS - 1.2%
Avon Products, Inc. 186,900 9,438 05430310
Orkla AS:
Class A Free shares 97,700 3,690 39299193
Class B (non-vtg.) 44,750 1,653 39299192
Premark International, Inc. 45,700 3,496 74045910
Stanhome, Inc. 56,300 1,562 85442510
19,839
TOTAL NONDURABLES 55,881
PRECIOUS METALS - 0.8%
American Barrick Resources Corp. 260,000 7,039 02451E10
Homestake Mining Co. 320,000 6,160 43761410
13,199
RETAIL & WHOLESALE - 5.4%
APPAREL STORES - 0.6%
Charming Shoppes, Inc. 330,000 4,661 16113310
Edison Brothers Stores, Inc. 10,600 345 28087510
Limited, Inc. (The) 250,000 5,344 53271610
10,350
DRUG STORES - 0.1%
Drug Emporium, Inc. (b) 175,300 964 26217510
GENERAL MERCHANDISE STORES - 2.3%
Carter Hawley Hale Stores, Inc. (b) 284,900 3,989 14622730
Casey's General Stores, Inc. 62,300 1,324 14752810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Dayton Hudson Corp. 160,900 $ 11,182 23975310
Dillard Department Stores, Inc. Class A 100,000 3,675 25406310
Hudsons Bay Co. Ord. 119,100 3,326 44420410
Penney (J.C.) Co., Inc. 110,000 5,720 70816010
Sears, Roebuck & Co. 120,400 6,908 81238710
36,124
GROCERY STORES - 1.4%
Bruno's, Inc. 457,200 4,915 11688110
Food Lion, Inc. Class A 452,400 2,828 34477520
Giant Food, Inc. Class A 221,200 5,336 37447810
Great Atlantic & Pacific Tea Co., Inc. 109,100 2,891 39006410
Safeway, Inc. (b) 35,400 770 78651420
Stop & Shop Companies, Inc. (b) 330,200 6,480 86209910
23,220
RETAIL & WHOLESALE, MISC - 1.0%
Fabri-Centers of America, Inc. (b) 58,600 916 30284610
International Semi-Tech Microelectronics, Inc. 65,000 929 46031K30
International Semi-Tech Microelectronics, Inc. (receipts) 140,000 914
46031K50
Pinault Printemps SA 11,100 1,580 72199393
Sotheby's Holdings, Inc. Class A 522,300 6,659 83589810
Toys "R" Us, Inc. (b) 120,000 4,815 89233510
15,813
TOTAL RETAIL & WHOLESALE 86,471
SERVICES - 0.9%
ADVERTISING - 0.0%
WPP Group PLC (b) 483,300 705 92930910
PRINTING - 0.0%
Ennis Business Forms, Inc. 30,200 385 29338910
SERVICES - 0.9%
ADT Ltd. (b) 339,800 3,058 00091530
CPI Corp. 231,200 4,046 12590210
Chemed Corp. 87,600 2,748 16359610
Craig (Jenny), Inc. 290,700 4,288 22420610
Oroamerica, Inc. (b) 71,000 870 68702710
15,010
TOTAL SERVICES 16,100
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 4.4%
COMPUTER SERVICES & SOFTWARE - 0.9%
Anacomp, Inc. (b) 200,000 $ 650 03237510
Gerber Scientific, Inc. 139,700 1,956 37373010
Information Resources, Inc. (b) 122,700 4,571 45690510
Policy Management Systems Corp. (b) 163,300 4,572 73110810
Software Publishing Corp. 98,500 616 83403210
12,365
COMPUTERS & OFFICE EQUIPMENT - 1.2%
BIC Corp. 130,100 3,757 08873410
Concurrent Computer Corp. (b) 469,000 1,348 20671020
Cross (A.T.) Co. 174,600 2,444 22747810
Diebold, Inc. 10,500 626 25365110
Digital Equipment Corp. (b) 82,600 2,943 25384910
Stratus Computer, Inc. (b) 189,100 5,531 86315510
Tandem Computers, Inc. 220,300 2,423 87537010
19,072
ELECTRONIC INSTRUMENTS - 0.3%
Varian Associates, Inc. 104,000 5,174 92220410
ELECTRONICS - 1.0%
AMP, Inc. 162,000 10,105 03189710
Hitachi, Ltd. 441,000 3,498 43357810
Molex, Inc. 60,000 1,965 60855420
15,568
PHOTOGRAPHIC EQUIPMENT - 1.0%
Polaroid Corp. 438,200 16,049 73109510
TOTAL TECHNOLOGY 68,228
TRANSPORTATION - 3.3%
AIR TRANSPORTATION - 1.5%
AMR Corp. (b) 140,000 9,817 00176510
UAL Corp. (b) 95,900 14,577 90254910
24,394
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
RAILROADS - 1.7%
Chicago & North Western Holdings Corp. (b) 83,400 $ 2,022 16715510
Illinois Central Corp., Series A 276,900 9,242 45184110
Santa Fe Pacific Corp. 228,700 4,317 80218310
Union Pacific Corp. 177,800 11,246 90781810
26,827
SHIPPING - 0.1%
Wah Kwong Shipping Holdings Ltd. 498,000 1,031 93056692
TOTAL TRANSPORTATION 52,252
UTILITIES - 1.1%
GAS - 0.5%
Coastal Corp. (The) 177,000 4,845 19044110
Eastex Energy, Inc. 162,500 813 27723910
Tejas Power Corp. (b) 230,000 2,358 87907910
8,016
TELEPHONE SERVICES - 0.6%
Peoples Telephone Co., Inc. 355,800 4,625 71257410
Sprint Corporation 48,600 1,750 85206110
Telecom Argentina Stet France 600,000 2,689 90899992
9,064
TOTAL UTILITIES 17,080
TOTAL COMMON STOCKS
(Cost $1,204,925) 1,343,314
CONVERTIBLE PREFERRED STOCKS - 2.1%
CONSTRUCTION & REAL ESTATE - 0.3%
BUILDING MATERIALS - 0.2%
Southdown, Inc., Series B, $3.75 exchangeable 47,650 2,942 84129730
CONSTRUCTION - 0.1%
U.S. Home Corp. (b) 60,000 1,650 91192020
TOTAL CONSTRUCTION & REAL ESTATE 4,592
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
Ford Motor Co. (Del.), Series A, $4.20 60,000 $ 6,285 34537020
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
Chiles Offshore $1.50 (b) 70,000 1,864 16888720
FINANCE - 0.0%
SAVINGS & LOANS - 0.0%
Ahmanson (H.F.) & Co. 4,000 197 00867770
PRECIOUS METALS - 0.0%
Newmont Mining Corp. depository representing
1/2 share $1.375 (d) 10,000 638 65163930
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 1.2%
AMR Corp. $3.00 (b)(d) 176,000 9,504 00176588
UAL, Inc. (cumulative) 6 1/4% (d) 81,300 9,837 90254930
19,341
TRUCKING & FREIGHT - 0.1%
TNT Ltd. 8% 937,000 968 93599293
TOTAL TRANSPORTATION 20,309
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $30,326) 33,885
CORPORATE BONDS - 2.6%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (A) (000S)
CONVERTIBLE BONDS - 1.3%
CONGLOMERATES - 0.3%
Brierley Investments Ltd. 9%, 6/30/98 - NZD 2,709 1,802 1090149A
Kinnevik 3B 10 1/2%, 7/21/97 - SEK 10,342 2,353 496990AA
4,155
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
ENERGY - 0.2%
INDEPENDENT POWER - 0.2%
California Energy, Inc. 5%, 7/31/00 (d) Ba3 $ 3,000 $ 3,129 130190AB
SERVICES - 0.3%
ADT Ltd. eurobonds 6%, 10/3/02 - 500 668 001999AD
Manpower, Inc. 6 1/4%, 10/1/02 (d) Ba3 3,710 4,062 56418HAA
4,730
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.5%
Alaska Air Group, Inc. liquid yield
option notes 0%, 4/18/06 Ba3 10,000 3,763 011659AC
Delta Air Lines, Inc. 3.23%, 6/15/03 Ba3 4,500 3,870 247361YA
7,633
TOTAL CONVERTIBLE BONDS 19,647
NONCONVERTIBLE BONDS - 1.3%
BASIC INDUSTRIES - 0.1%
CHEMICALS & PLASTICS - 0.1%
IMC Fertilizer Group, Inc. 9 1/4%, 10/1/00 B3 2,500 2,504 449669AH
CONGLOMERATES - 0.2%
Sequa Corp. 10 1/2%, 5/1/98 B3 2,550 2,640 817320AC
ENERGY - 0.3%
OIL & GAS - 0.3%
Mesa Capital Corp. secured
12 3/4%, 6/30/98 (e) - 5,000 4,225 590910AF
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Joy Technologies, Inc. 10 1/4%, 9/1/03 B1 1,525 1,586 481206AD
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.1%
Host Marriott Corp.:
9.125%, 12/1/00 B1 1,000 998 441080AD
9.875%, 5/1/01 B1 300 302 441080AE
10 1/2%, 5/1/06 B1 750 768 441080AH
2,068
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - 0.3%
RETAIL & WHOLESALE, MISC - 0.3%
International Semi-Tech Microelectronics, Inc.
secured 0%, 8/15/03 Ba2 $ 8,000 $ 4,180 46031KAA
SERVICES - 0.2%
ADT Operations, Inc. guaranteed notes
9 1/4%, 8/1/03 B2 4,000 4,140 000945AB
TOTAL NONCONVERTIBLE BONDS 21,343
TOTAL CORPORATE BONDS
(Cost $46,130) 40,990
FOREIGN GOVERNMENT OBLIGATIONS - 1.1%
Mexican Government Cetes 0%,
1/6/94 to 1/20/94
(Cost $17,213) - MXN 55,120 17,147 597998TC
OTHER SECURITIES - 0.4%
INDEXED SECURITIES - 0.4%
Salomon Brothers, Inc. 5%, 11/1/96 (indexed to the
value of Microsoft Corporation common stock)
(Cost $5,991) 75,000 (f) 6,000 79549B43
COMMERCIAL PAPER - 0.9%
Banco Nacional de Mexico SA 0%, 11/5/93 - MXN 15,600 4,971 0596179V
Bancomer 0%, 11/10/93 - MXN 31,467 10,003 05999KBA
TOTAL COMMERCIAL PAPER
(Cost $14,815) 14,974
REPURCHASE AGREEMENTS - 9.1%
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
Investments in repurchase agreements,
(U.S. Treasury obligations), in a
joint trading account at 2.96%
dated 10/29/93 due 11/1/93 $ 146,710 $ 146,674
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,466,074) $ 1,602,984
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
3,269,990 JPY 11/15/93 to 12/3/93 $ 30,138 $ (138)(Receivable amount
$30,000)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.9%
CURRENCY TYPE ABBREVIATIONS
JPY - Japanese yen
MXN - Mexican peso
NZD - New Zealand dollar
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Affiliated company (see Note 6 of Notes to Financial Statements).
4. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $27,170,000 or 1.7% of net
assets.
5. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
6. Represents number of shares held.
OTHER INFORMATION
Distribution of investments by country, as a percentage of total value of
investments, is as follows:
United States 78.5%
Canada 6.2
United Kingdom 4.5
Japan 3.6
Mexico 2.1
Others (individually less than 1%) 5.1
TOTAL 100.0%
INCOME TAX INFORMATION
At October 31, 1993, the aggregate cost of investment securities for income
tax purposes was $1,466,162,000. Net unrealized appreciation aggregated
$136,822,000, of which $165,151,000 related to appreciated investment
securities and $28,329,000 related to depreciated investment securities.
The fund hereby designates $22,859,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS DOLLAR AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) OCTOBER
31, 1993
ASSETS 7. 8.
9.Investment in securities, at value (including 10. $ 1,602,984
repurchase agreements of $146,674) (cost
$1,466,074) (Notes 1 and 2) - See accompanying
schedule
11.Short foreign currency contracts (Note 2) $ (30,138) 12.
Contracts held, at value
13. Receivable for contracts held 30,000 (138)
14.Receivable for investments sold 15. 41,404
16.Receivable for fund shares sold 17. 14,441
18.Dividends receivable 19. 1,832
20.Interest receivable 21. 428
22.Other receivables 23. 40
24. TOTAL ASSETS 25. 1,660,991
LIABILITIES 26. 27.
28.Payable to custodian bank 499 29.
30.Payable for investments purchased 30,214 31.
32.Payable for fund shares redeemed 5,860 33.
34.Accrued management fee 966 35.
36.Other payables and accrued expenses 739 37.
38. TOTAL LIABILITIES 39. 38,278
40.NET ASSETS 41. $ 1,622,713
42.Net Assets consist of: 43. 44.
45.Paid in capital 46. $ 1,294,327
47.Undistributed net investment income 48. 32,362
49.Accumulated undistributed net realized gain (loss) on 50. 159,252
investments
51.Net unrealized appreciation (depreciation) on: 52. 53.
54. Investment securities 55. 136,910
56. Foreign currency contracts 57. (138)
58.NET ASSETS, for 37,934 shares outstanding 59. $ 1,622,713
60.NET ASSET VALUE and redemption price per share 61. $42.78
($1,622,713 (divided by) 37,934 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS DOLLAR AMOUNTS IN THOUSANDS YEAR ENDED OCTOBER 31, 1993
INVESTMENT INCOME 62. 63.
64.Special dividend from Imperial Chemical Industries $ 3,021
PLC ADR
65.Dividends (including $12 received from affiliated 66. 17,275
issues) (Note 6)
67.Interest (Note 5) 68. 7,620
69. TOTAL INCOME 70. 27,916
EXPENSES 71. 72.
73.Management fee (Note 4) $ 7,439 74.
Basic fee
75. Performance adjustment 450 76.
77.Transfer agent fees (Note 4) 3,327 78.
79.Accounting fees and expenses (Note 4) 479 80.
81.Non-interested trustees' compensation 7 82.
83.Custodian fees and expenses 138 84.
85.Registration fees 424 86.
87.Audit 33 88.
89.Legal 8 90.
91.Miscellaneous 10 92.
93. TOTAL EXPENSES BEFORE REDUCTIONS 12,315 12,192
94. EXPENSE REDUCTIONS (NOTE 7) (123)
95.NET INVESTMENT INCOME 96. 15,724
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 98. 99.
(NOTES 1 AND 3)
97.Net realized gain (loss) on:
100. Investment securities 125,660 101.
102. Foreign currency contracts (988) 124,672
103.Change in net unrealized appreciation 104. 105.
(depreciation) on:
106. Investment securities 121,575 107.
108. Foreign currency contracts (138) 121,437
109.NET GAIN (LOSS) 110. 246,109
111.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 112. $ 261,833
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS DOLLAR AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1993 1992
INCREASE (DECREASE) IN NET ASSETS
113.Operations $ 15,724 $ 4,862
Net investment income
114. Net realized gain (loss) on investments 124,672 17,902
115. Change in net unrealized appreciation 121,437 3,024
(depreciation) on
investments
116. NET INCREASE (DECREASE) IN NET ASSETS RESULTING 261,833 25,788
FROM
OPERATIONS
117.Distributions to shareholders from: (3,015) (3,369)
Net investment income
118. Net realized gain (1,966) -
119.Share transactions 1,662,252 479,490
Net proceeds from sales of shares
120. Reinvestment of distributions from: 2,857 3,202
Net investment income
121. 1,927 -
Net realized gain
122. Cost of shares redeemed (631,993) (298,265)
123. Net increase (decrease) in net assets resulting 1,035,043 184,427
from
share transactions
124. 1,291,895 206,846
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS 125. 126.
127. Beginning of period 330,818 123,972
128. End of period (including undistributed net $ 1,622,713 $ 330,818
investment
income of $32,362 and $19,653, respectively)
OTHER INFORMATION 130. 131.
129.Shares
132. Sold 44,284 14,941
133. Issued in reinvestment of distributions from: 83 117
Net investment income
134. 56 -
Net realized gain
135. Redeemed (16,391) (9,262)
136. Net increase (decrease) 28,032 5,796
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
137.
YEARS ENDED OCTOBER 31,
138.
1993 1992(diamond) 1991 1990 1989
139.SELECTED
PER-SHARE DATA
140.Net asset value,
$ 33.41 $ 30.19 $ 23.61 $ 31.16 $ 27.18
beginning of period
141.Income from
Investment
Operations
142. Net investment
.55*# .64* .81 1.25(dagger)(dagger) .39(dagger)
income
143. Net realized and
9.20 3.43 6.94 (5.65) 4.07
unrealized gain (loss)
on investments
144. Total from
9.75 4.07 7.75 (4.40) 4.46
investment
operations
145.Less Distributions
146. From net
(.23) (.85) (1.17) (.30) (.48)
investment income
147. From net
(.15) - - (2.85) -
realized gain
148. Total
(.38) (.85) (1.17) (3.15) (.48)
distributions
149.Net asset value,
$ 42.78 $ 33.41 $ 30.19 $ 23.61 $ 31.16
end of period
150.TOTAL RETURN
29.46% 14.09 34.09 (16.00)% 16.76%
% %
151.RATIOS AND SUPPLEMENTAL DATA
152.Net assets, end
$ 1,622,713 $ 330,818 $ 123,973 $ 92,236 $ 138,870
of period
(000 omitted)
153.Ratio of expenses
1.11% 1.00 .98 1.06% 1.13%(dagger)
to average net
assets**
154.Ratio of expenses
1.12% 1.00 .98 1.06% 1.19%
to average net
assets before
expense reductions**
155.Ratio of net
1.43% 2.01 2.93 4.55%(dagger)(dagger) 1.45%
investment income to
average net assets
156.Portfolio turnover
117% 81 137 165% 386%
rate
% %
</TABLE>
* NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(dagger) INCLUDES $.03 PER SHARE OF INTEREST EXPENSE FOR THE YEAR ENDED
OCTOBER 31, 1989. ALSO INCLUDES REDUCTION OF $.02 PER SHARE FROM FIDELITY
SERVICE CO. FOR ADJUSTMENTS TO PRIOR PERIODS' FEES.
(dagger)(dagger) INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.74 PER SHARE.
(diamond) AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
# INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND RECEIVED FROM
IMPERIAL CHEMICAL INDUSTRIES PLC ADR WHICH AMOUNTED TO $.11 PER SHARE.
** SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Value Fund (the fund) is a fund of Fidelity Capital Trust (the
trust) and is authorized to issue an unlimited number of shares. The trust
is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
are valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities, other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
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 all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Dividend and interest income is
recorded net of foreign taxes where recovery of such taxes is not assured.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
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.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker are
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
fund to borrow from, or lend money to, other participating funds.
2. OPERATING POLICIES -
CONTINUED
INDEXED SECURITIES. The fund may invest in indexed securities whose value
is linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other reference instruments.
Indexed securities may be more volatile than the reference instrument
itself, but any loss is limited to the amount of the original investment.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $2,047,679,000 and $1,122,831,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.31% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .35%.
The basic fee is subject to a performance adjustment (up to a maximum of +
or - .20%) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .72% of average net
assets after the performance adjustment.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. FMR has voluntarily agreed to implement this
new group fee rate schedule as it results in the same or a lower management
fee.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,148,000 for the period.
5. INTERFUND LENDING
PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $22,629,000 and $14,360,000,
respectively.
5. INTERFUND LENDING
PROGRAM - CONTINUED
The weighted average interest rate was 3.63%. Interest earned from the
interfund lending program amounted to $4,000 and is included in interest
income on the Statement of Operations.
6. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
DOLLAR AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
LSI Lighting Systems, Inc. $ - $ - $ 12 $ 2,328
Pittston Co. Minerals Group - - - 10,180
TOTALS $ - $ - $ 12 $ 12,508
7. REDUCTION OF EXPENSES.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$123,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Capital Trust and the Shareholders of Fidelity
Value Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Capital Trust: Fidelity Value Fund, including the schedule of
portfolio investments, as of October 31, 1993, and the related statement
of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments and cash held by the custodian as of October 31, 1993, and
confirmation by correspondence with brokers as to securities purchased but
not received at that date or other auditing procedures where confirmations
from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Capital Trust: Fidelity Value Fund as of October 31, 1993, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
December 3, 1993
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* 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. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO WRITE FIDELITY
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. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 2269
Boston, MA 02107-2269
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30280
Salt Lake City, UT 84130-0280
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Growth Company Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
New Millennium(double dagger) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the Statement of
Additional Information in Post-Effective Amendment No. 101 to the
Registration Statement No. 2-15063 on Form N-1A (the "Registration
Statement") of Fidelity Trend Fund of our report dated February 4, 1994,
relating to the financial statements and financial highlights which is
incorporated by reference in said Statement of Additional Information.
We also consent to the incorporation by reference in this Post-Effective
Amendment of our report dated December 3, 1993 accompanying the financial
statements and financial highlights of Fidelity Capital Trust: Fidelity
Value Fund (File No. 2-61760).
We further consent to the references to our Firm in the Prospectus and
Statement of Additional Information under the headings "Financial
Highlights" and "Auditor".
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
February 14, 1994
