(2_FIDELITY_LOGOS)FIDELITY
TREND
FUND
SEMIANNUAL REPORT
JUNE 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the fund's
investments over the past six months.
INVESTMENTS 10 A complete list of the fund's investments
with their market values.
FINANCIAL STATEMENTS 19 Statements of assets and liabilities,
operations, and changes in net assets,
as well as financial highlights.
NOTES 23 Notes to the financial statements.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
As the first half of 1998 drew to a close, benign inflation, low
interest rates and moderate economic growth provided a solid
foundation for strong stock and bond performance. Investors seemed to
put concerns about the financial and economic turmoil in Asia aside
for the most part, responding instead to stronger-than-expected
corporate earnings and a sound domestic economy. The bond markets
tended to benefit from the moderate growth in the economy and a
historically low rate of inflation, as well their traditional status
as a refuge from volatility in the equity markets.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Fidelity Trend 15.65% 14.95% 81.76% 265.10%
S&P 500 (registered trademark) 17.71% 30.16% 182.41% 448.92%
Growth Funds Average 15.10% 25.38% 141.15% 360.50%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Standard & Poor's 500 Index - a widely recognized, unmanaged
index of common stocks. To measure how the fund's performance stacked
up against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months
average represents a peer group of 1,012 mutual funds. These
benchmarks reflect reinvestment of dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Fidelity Trend 14.95% 12.69% 13.83%
S&P 500 30.16% 23.08% 18.56%
Growth Funds Average 25.38% 18.91% 16.13%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by
annualizing each fund's total return, then taking an arithmetic
average. This may produce a slightly different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Trend S&P 500
00005 SP001
1988/06/30 10000.00 10000.00
1988/07/31 9869.26 9962.00
1988/08/31 9561.65 9623.29
1988/09/30 9792.36 10033.24
1988/10/31 9846.19 10312.17
1988/11/30 9579.59 10164.70
1988/12/31 10007.38 10342.59
1989/01/31 10793.43 11099.66
1989/02/28 10774.83 10823.28
1989/03/31 11074.13 11075.46
1989/04/30 11740.14 11650.28
1989/05/31 12292.90 12122.12
1989/06/30 12141.90 12053.02
1989/07/31 12921.16 13141.41
1989/08/31 13411.91 13398.98
1989/09/30 13476.62 13344.05
1989/10/31 12713.54 13034.46
1989/11/30 12867.24 13300.37
1989/12/31 13174.95 13619.58
1990/01/31 12036.81 12705.70
1990/02/28 12334.49 12869.61
1990/03/31 12555.71 13210.65
1990/04/30 11945.86 12880.38
1990/05/31 13078.87 14136.22
1990/06/30 13099.79 14040.10
1990/07/31 12839.71 13995.17
1990/08/31 11560.22 12730.00
1990/09/30 10675.35 12110.05
1990/10/31 10223.94 12057.98
1990/11/30 11138.71 12836.92
1990/12/31 11507.04 13195.07
1991/01/31 12229.05 13770.38
1991/02/28 13318.08 14754.96
1991/03/31 13615.91 15112.03
1991/04/30 13754.30 15148.30
1991/05/31 14398.09 15802.71
1991/06/30 13384.27 15078.94
1991/07/31 14310.85 15781.62
1991/08/31 14659.82 16155.65
1991/09/30 14563.55 15885.85
1991/10/31 14716.98 16098.72
1991/11/30 13874.63 15449.94
1991/12/31 15681.40 17217.41
1992/01/31 15779.35 16897.17
1992/02/29 16156.46 17116.83
1992/03/31 15631.59 16783.05
1992/04/30 15539.34 17276.48
1992/05/31 15921.06 17361.13
1992/06/30 15558.43 17102.45
1992/07/31 16433.21 17801.94
1992/08/31 16172.36 17437.00
1992/09/30 16414.12 17642.76
1992/10/31 16805.39 17704.51
1992/11/30 17794.69 18308.23
1992/12/31 18311.53 18533.42
1993/01/31 18750.74 18689.10
1993/02/28 18641.03 18943.27
1993/03/31 19423.39 19342.98
1993/04/30 18708.77 18874.88
1993/05/31 19724.81 19380.72
1993/06/30 20087.20 19436.93
1993/07/31 20033.01 19359.18
1993/08/31 21082.93 20092.89
1993/09/30 21543.53 19938.18
1993/10/31 21936.40 20350.90
1993/11/30 20920.36 20157.56
1993/12/31 21817.88 20401.47
1994/01/31 22685.72 21095.12
1994/02/28 21891.74 20523.44
1994/03/31 20473.65 19628.62
1994/04/30 20588.13 19879.87
1994/05/31 20632.45 20205.90
1994/06/30 20056.35 19710.85
1994/07/31 20595.52 20357.37
1994/08/31 21784.64 21192.02
1994/09/30 21315.64 20672.82
1994/10/31 21411.66 21137.95
1994/11/30 20233.61 20368.11
1994/12/31 20356.77 20670.17
1995/01/31 20185.10 21206.15
1995/02/28 20847.82 22032.55
1995/03/31 21167.21 22682.73
1995/04/30 21470.62 23350.74
1995/05/31 21937.72 24284.07
1995/06/30 22628.39 24848.19
1995/07/31 23730.27 25672.15
1995/08/31 24373.03 25736.59
1995/09/30 25123.58 26822.67
1995/10/31 24488.80 26726.92
1995/11/30 25259.32 27900.23
1995/12/31 24858.61 28437.59
1996/01/31 25360.71 29405.60
1996/02/29 26200.65 29678.19
1996/03/31 26186.28 29963.99
1996/04/30 26885.60 30405.66
1996/05/31 27628.03 31189.82
1996/06/30 26928.71 31308.66
1996/07/31 25391.16 29925.44
1996/08/31 25985.10 30556.57
1996/09/30 27546.60 32276.29
1996/10/31 27249.63 33166.47
1996/11/30 29136.84 35673.52
1996/12/31 29080.46 34966.83
1997/01/31 30278.28 37151.56
1997/02/28 28811.03 37442.83
1997/03/31 26569.89 35904.30
1997/04/30 26235.77 38047.79
1997/05/31 29808.24 40364.14
1997/06/30 31761.53 42172.45
1997/07/31 33961.55 45528.11
1997/08/31 33694.26 42977.63
1997/09/30 36475.13 45331.51
1997/10/31 33396.12 43817.44
1997/11/30 32172.75 45845.75
1997/12/31 31568.10 46632.92
1998/01/31 31544.77 47148.68
1998/02/28 34444.29 50549.04
1998/03/31 36923.77 53137.66
1998/04/30 37653.03 53672.23
1998/05/31 35850.30 52749.60
1998/06/30 36509.55 54892.29
IMATRL PRASUN SHR__CHT 19980630 19980717 102332 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Trend Fund on June 30, 1988. As the chart shows,
by June 30, 1998, the value of the investment would have grown to
$36,510 - a 265.10% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $54,892 - a 448.92%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
While U.S. equity markets did
not perform as well in the second
quarter as they did in the first, the
Standard & Poor's 500 Index -
a measure of the U.S. stock market
- - still produced a return of 17.71%
for the six-month period that ended
June 30, 1998. Recent volatility in
the U.S. equity markets was triggered
in part by renewed concerns over
corporate profits and continued
problems with Asian economies
and stock markets. In mid-June,
the major U.S. indexes along with
Asian markets continued to sell off,
driven by the fear that problems with
Asian currencies and the Japanese
economy may take longer than
expected to be resolved.
Contributing to the decline were
concerns that Asia's crisis will inhibit
the earnings growth of American
companies. In typical fashion,
however, U.S. stocks rebounded
late in the period amid news that
the economy grew stronger than
expected - 5.4% annually - with
inflation at 1.1%, a 34-year low.
Overall, market sentiment during
the past six-month period was
influenced by the same factors that
have supported U.S. stock prices
over the past year - stable growth
in the U.S. economy, low interest
rates and low inflation.
An interview with Arieh Coll, Portfolio Manager of Fidelity Trend Fund
Q. HOW DID THE FUND PERFORM, ARIEH?
A. For the six months that ended June 30, 1998, the fund returned
15.65%, compared to 15.10% for the growth funds average tracked by
Lipper Analytical Services. For the 12 months that ended June 30,
1998, the fund returned 14.95%, while the growth funds average
returned 25.38%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX
MONTHS?
A. The overall returns of the U.S. stock market during the first half
of 1998 were driven by the 50 largest companies in the Standard &
Poor's 500 Index. The Trend Fund avoided these companies because they
were overvalued. Instead, the fund invested in small- and
mid-capitalization companies, because they were so much cheaper on an
earnings and cash flow basis compared to the biggest blue chips. This
disparity in valuations between large- and small-company stocks is the
largest I have seen since 1991, a year when small-company stocks
appreciated far more than the big-company stocks. I am hoping that
history will repeat itself.
Q. WHAT WERE SOME OF THE STOCKS THAT PERFORMED WELL FOR THE FUND?
A. Several of the fund's largest investments performed quite well over
the six-month period. Forest Laboratories benefited from the
anticipation of its launch of a new anti-depressant drug, Celexa. Two
technology stocks also did well, Citrix and America Online. The latter
rode the wave of investor interest in companies that appear
well-positioned to benefit from the huge growth of the Internet.
Anchor Gaming recovered well from what I thought was an undeserved
stock decline last year, helped by its introduction of three new slot
machine games. Best Buy, a retailer, benefited from a restructuring
effort that produced positive results much more quickly than
anticipated. And Credit Suisse, a Swiss financial concern, reaped the
rewards brought on by the restructuring efforts of its new CEO.
Q. WERE THE CHANGES TO THE FUND'S SECTOR WEIGHTINGS A REFLECTION OF A
PARTICULAR STRATEGY?
A. For the most part, no. The fund's sector weightings are a function
of my observations of individual stocks. One exception was my
increased focus on the health sector, specifically health maintenance
organizations (HMOs). These stocks were incredibly cheap because
industry profitability declined over the past three years. Now,
company managements are raising prices at a faster pace than medical
inflation, which should lead to dramatic profit improvement. On top of
that, membership in HMOs is growing quickly. Hence, my investments
during the period in such firms as Pacificare, Wellpoint, United
HealthCare and Humana.
Q. CENDANT WAS A LARGE HOLDING SIX MONTHS AGO. ITS SHARE PRICE FELL
SHARPLY, YET IT REMAINS IN THE FUND. WHY?
A. This stock - the fund's biggest detractor from performance over the
period - fell as the company - one of the world's premier providers of
consumer and business services - uncovered fraudulent accounting
practices in a firm that it had acquired. Cendant management showed
great integrity by reporting this problem immediately. The company was
forced to erase some of its profits and its stock fell dramatically.
In time, however, I believe the stock should recover.
Q. ARIEH, ALMOST 22% OF THE FUND IS INVESTED OVERSEAS. WERE YOU
PLAYING A PARTICULAR THEME THERE?
A. At the end of the period, about 8% of the fund was invested in
international banks and money management firms. The common thread
there was a restructuring theme. European banks are five to 10 years
behind the U.S. in terms of reducing their operating costs,
restructuring their balance sheets and using technology to more
efficiently run their operations. As a result of similar moves, U.S.
banks have improved profits dramatically and the stocks have been
great performers. I'm hoping the same scenario takes place with my
European bank investments. The rest of the foreign stake is the result
of individual stock picking and my strategy of global arbitrage. In
this scenario, I look for opportunities to invest in companies outside
the U.S. that are engaged in the same business as successful U.S.
competitors, but whose stocks are selling at a discount to their U.S.
counterparts. The fund's investment in Credit Suisse during the period
fits this description.
Q. WHAT'S YOUR OUTLOOK?
A. While the largest-capitalization stocks in the market have seen the
best performance, I find them to be overvalued. Instead, I continue to
find more attractive opportunities in the small- and mid-cap universe.
I believe that investor interest eventually will return to the smaller
companies that are less expensive and have better growth prospects. In
the future, shareholders should be rewarded for owning these
undervalued, promising companies.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
ARIEH COLL ON SOME OF HIS
INVESTMENT STYLES, WITH
EXAMPLES FROM THE PERIOD:
GROWTH AT A REASONABLE PRICE:
"This is what it says: companies
that project solid earnings growth,
whose stocks are reasonably
priced. An example would be
Anchor Gaming."
RIDING A MEGATREND: "These are
companies that stand to benefit
from interest in an important
trend. Examples include America
Online, an Internet-related stock,
and JDS Fitel, a manufacturer of
fiber optic components."
NEW PRODUCT CYCLES:
"Companies do well when they
introduce new products that
dramatically increase their sales.
Forest Laboratories is such an
example, as it is about to release a
new anti-depressant drug called
Celexa."
TURNAROUNDS: "These are
companies that have
underperformed, but are
undertaking steps to reverse that
trend and improve their prospects.
Best Buy is a good example in the
fund, as are my investments in the
HMO industry."
FRANCHISE COMPANIES: "As this
name suggests, these are
companies with a product or
service whose franchise would
take hundreds of millions of
dollars to replicate. An example
would be American Express."
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
mainly in equity securities of
companies likely to benefit
from economic, financial, or
market trends
FUND NUMBER: 005
TRADING SYMBOL: FTRNX
START DATE: June 16, 1958
SIZE: as of June 30, 1998,
more than $1.5 billion
MANAGER: Arieh Coll, since
1997; manager, Fidelity Export
and Multinational Fund, 1994-
1997; several Fidelity Select
Portfolios, 1991-1995;
joined Fidelity in 1989
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JUNE 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
Anchor Gaming 5.9 4.5
FIRSTPLUS Financial Group, Inc. 4.8 1.7
America Online, Inc. 4.6 0.0
Credit Suisse Group (Reg.) 3.7 3.1
Citrix Systems, Inc. 3.5 1.9
ESC Medical Systems Ltd. 3.5 0.1
Beneficial Corp. 3.0 0.0
Best Buy Co., Inc. 2.4 1.3
Forest Laboratories, Inc. 2.4 1.3
Philip Morris Companies, Inc. 2.2 1.7
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE MARKET SECTORS AS OF JUNE 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 23.5 14.6
FINANCE 21.6 13.9
HEALTH 17.9 9.8
MEDIA & LEISURE 8.6 13.5
UTILITIES 7.4 9.9
</TABLE>
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JUNE 30, 1998 * AS OF DECEMBER 31, 1997 **
ROW: 1, COL: 1, VALUE: 0.0
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 0.0
ROW: 1, COL: 4, VALUE: 0.0
ROW: 1, COL: 5, VALUE: 0.0
ROW: 1, COL: 6, VALUE: 0.0
ROW: 1, COL: 1, VALUE: 96.2
ROW: 1, COL: 2, VALUE: 1.5
ROW: 1, COL: 3, VALUE: 2.3
STOCKS 98.2%
CONVERTIBLE
SECURITIES 0.5%
SHORT-TERM
INVESTMENTS 1.3%
FOREIGN
INVESTMENTS 21.8%
STOCKS AND
EQUITY FUTURES 97.3%
CONVERTIBLE
SECURITIES 0.0%
SHORT-TERM
INVESTMENTS 2.7%
FOREIGN
INVESTMENTS 17.4%
ROW: 1, COL: 1, VALUE: 97.3
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 2.7
*
**
INVESTMENTS JUNE 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF VALUE OF INVESTMENT IN SECURITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 97.8%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 0.0%
CHEMICALS & PLASTICS - 0.0%
Great Lakes Chemical Corp. 1,200 $ 47
Ivex Packaging Corp. 18,900 439
486
CONSTRUCTION & REAL ESTATE - 1.4%
BUILDING MATERIALS - 0.0%
Owens-Corning 400 16
REAL ESTATE - 0.6%
Boardwalk Equities, Inc. (a) 772,700 8,950
Boardwalk Equities, Inc. (a)(d) 80,700 935
9,885
REAL ESTATE INVESTMENT TRUSTS - 0.8%
Amresco Capital Trust, Inc. 15,200 197
Imperial Credit Commercial Mortgage Investment Corp. 677,500 8,850
Resource Asset Investment Trust 150,000 2,391
11,438
TOTAL CONSTRUCTION & REAL ESTATE 21,339
DURABLES - 1.9%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Car Group PLC (The) 2,900 4
TEXTILES & APPAREL - 1.9%
Fruit of the Loom, Inc. Class A (a) 361,100 11,984
House of Fraser PLC Class L 181,100 526
NIKE, Inc. Class B 500 24
Timberland Co. Class A (a) 225,200 16,200
28,734
TOTAL DURABLES 28,738
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
Newpark Resources, Inc. (a) 110,000 1,224
FINANCE - 21.6%
BANKS - 7.4%
BANACCI SA de CV Class B (a) 5,197,000 10,139
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Bank Sarasin & Compagnie Class B (Reg.) 4,726 $ 8,269
BHF Bank AG 10,000 387
BHI Corp. (non-vtg.) 42,100 1,663
Credit Suisse Group (Reg.) 257,700 57,210
Istituto Bancario San Paolo 500 7
Julius Baer Holding AG 4,000 12,485
National Bank of Canada 288,000 5,641
Societe Generale France Class A 83,200 17,251
113,052
CREDIT & OTHER FINANCE - 10.8%
Aames Financial Corp. 33,500 461
American Express Co. 143,000 16,302
Beneficial Corp. 299,800 45,926
ContiFinancial Corp. (a) 24,200 560
FIRSTPLUS Financial Group, Inc. (a)(c) 2,058,200 74,095
IMC Mortgage Co. (a) 230,300 2,433
Long Beach Financial Corp. (a)(c) 1,249,300 13,742
Perpetual PLC 185,000 12,403
165,922
FEDERAL SPONSORED CREDIT - 1.7%
SLM Holding Corp. 537,600 26,342
SAVINGS & LOANS - 1.3%
Ahmanson (H.F.) & Co. 50,000 3,550
Bank United Corp. Class A 1,000 48
Dime Bancorp, Inc. 138,400 4,143
Golden State Bancorp, Inc. 100 3
Golden State Bancorp, Inc. warrants 1/1/01 (a) 100 1
Washington Mutual, Inc. 284,850 12,373
20,118
SECURITIES INDUSTRY - 0.4%
Mackenzie Financial Corp. 150,000 2,115
Waddell & Reed Financial, Inc. Class A 172,000 4,117
6,232
TOTAL FINANCE 331,666
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 17.9%
DRUGS & PHARMACEUTICALS - 4.8%
Astra AB Class A Free shares 1,000 $ 20
Barr Laboratories, Inc. (a) 230,800 9,174
Epix Medical, Inc. (a) 1,000 10
Forest Laboratories, Inc. (a) 1,020,200 36,472
Heska Corp. 1,000 11
ICN Pharmaceuticals, Inc. 604,700 27,627
73,314
MEDICAL EQUIPMENT & SUPPLIES - 4.0%
Arterial Vascular Engineering, Inc. (a) 70,000 2,503
Cyberonics, Inc. (a) 200,000 2,125
ESC Medical Systems Ltd. (a)(c) 1,585,900 53,524
Heartport, Inc. (a) 1,000 7
Sybron International, Inc. (a) 109,800 2,772
60,931
MEDICAL FACILITIES MANAGEMENT - 9.1%
Foundation Health Systems, Inc. Class A (a) 459,900 12,130
Humana, Inc. (a) 300,000 9,356
Pacificare Health Systems, Inc.:
Class A (a) 168,400 14,230
Class B (a) 371,100 32,796
Trigon Healthcare, Inc. (a) 534,500 19,342
United HealthCare Corp. 298,700 18,967
Wellpoint Health Network, Inc. (a) 443,700 32,834
139,655
TOTAL HEALTH 273,900
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 1.2%
Alcatel Alsthom Compagnie Generale d'Electricite SA 25,000 5,076
Echostar Communications Corp. Class A (a) 438,400 10,549
Vicor Corp. (a) 185,200 2,570
18,195
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
THK Co. Ltd. 100 1
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 1.1%
Eastern Environmental Services, Inc. (a) 150,000 $ 5,100
USA Waste Services, Inc. (a) 254,800 12,581
17,681
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 35,877
MEDIA & LEISURE - 8.6%
BROADCASTING - 0.8%
Grupo Televisa SA de CV sponsored ADR (a) 1,000 38
Metromedia Fiber Network, Inc. Class A 100 5
PanAmSat Corp. (a) 160,900 9,151
Radiomutuel, Inc. Class A (a) 263,700 3,063
Univision Communications, Inc. Class A (a) 100 4
12,261
ENTERTAINMENT - 1.1%
Cinar Films, Inc. Class B (sub-vtg.) (a) 14,400 274
King World Productions, Inc. (a) 1,000 26
NCL Holdings AS (a) 216,100 1,069
Premier Parks, Inc. (a) 236,400 15,750
17,119
LODGING & GAMING - 6.3%
Anchor Gaming (a)(c) 1,162,890 90,263
Penn National Gaming, Inc. (a)(c) 832,600 6,297
ResortQuest International, Inc. 7,700 126
96,686
PUBLISHING - 0.4%
Cognizant Corp. 95,800 6,035
TOTAL MEDIA & LEISURE 132,101
NONDURABLES - 4.1%
BEVERAGES - 0.0%
Aquapenn Spring Water Co., Inc. 36,500 315
FOODS - 0.5%
Raisio Group PLC 389,240 7,012
Wrigley (Wm.) Jr. Co. 700 69
7,081
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.7%
Alliance Gaming Corp. (a) 215,000 $ 860
First Brands Corp. 14,000 359
Revlon, Inc. Class A (a) 195,800 10,059
11,278
TOBACCO - 2.9%
Consolidated Cigar Holdings, Inc. Class A (a) 185,700 2,275
General Cigar Holdings, Inc.:
Class A (a) 385,400 3,806
Class B (a) 425,885 4,206
Philip Morris Companies, Inc. 850,000 33,469
43,756
TOTAL NONDURABLES 62,430
PRECIOUS METALS - 0.2%
Getchell Gold Corp. (a) 148,200 2,223
RETAIL & WHOLESALE - 3.6%
GENERAL MERCHANDISE STORES - 0.4%
Hudson's Bay Co. 291,600 6,695
GROCERY STORES - 0.1%
Meyer (Fred), Inc. (a) 16,000 680
RETAIL & WHOLESALE, MISCELLANEOUS - 3.1%
Barnes & Noble, Inc. 50,000 1,872
Best Buy Co., Inc. (a) 1,019,200 36,819
PETsMART, Inc. (a) 484,200 4,842
Sodak Gaming, Inc. (a) 100,000 625
Staples, Inc. (a) 100,000 2,894
USA Floral Products, Inc. 32,100 506
47,558
TOTAL RETAIL & WHOLESALE 54,933
SERVICES - 5.2%
ADVERTISING - 0.2%
Outdoor Systems, Inc. (a) 89,025 2,493
LEASING & RENTAL - 0.9%
Avis Rent A Car, Inc. 70,000 1,733
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
LEASING & RENTAL - CONTINUED
Budget Group, Inc. Class A (a) 50,000 $ 1,597
Hollywood Entertainment Corp. (a) 771,300 10,461
13,791
SERVICES - 4.1%
APAC Teleservices, Inc. (a) 959,800 5,609
Cendant Corp. (a) 1,393,915 29,098
CGI Group, Inc. Class A (sub-vtg.) (a) 109,200 2,336
Hagler Bailly, Inc. 34,900 903
Lazare Kaplan International, Inc. (a) 67,300 711
Medpartners, Inc. (a) 1,820,900 14,567
Professional Detailing, Inc. 400 10
Telespectrum Worldwide, Inc. (a) 1,153,600 10,094
63,328
TOTAL SERVICES 79,612
TECHNOLOGY - 23.5%
COMMUNICATIONS EQUIPMENT - 0.0%
Advanced Fibre Communications, Inc. (a) 600 24
Davox Corp. (a) 2,400 53
77
COMPUTER SERVICES & SOFTWARE - 19.5%
Affiliated Computer Services, Inc. Class A (a) 121,400 4,674
America Online, Inc. (a) 664,000 70,384
Avant Corp. (a) 522,100 12,922
Ceridian Corp. (a) 294,900 17,325
Check Point Software Technologies Ltd. (a) 503,700 16,496
Citrix Systems, Inc. (a) 789,200 53,962
Com21, Inc. 700 15
CompUSA, Inc. (a) 100,000 1,806
Computer Learning Centers, Inc. (a)(c) 1,304,400 32,447
E Trade Group, Inc. (a) 150,000 3,441
ECI Telecom Ltd. 646,300 24,479
Ecsoft Group PLC sponsored ADR (a) 500 16
Electronics for Imaging, Inc. (a) 1,547,500 32,691
Lycos, Inc. (a) 50,000 3,769
Midway Games, Inc. 300,000 4,688
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Rational Software Corp. (a) 1,000 $ 15
Saville System PLC sponsored ADR (a) 50,000 2,506
Siebel Systems, Inc. (a) 421,269 13,586
Yahoo, Inc. (a) 25,000 3,938
299,160
COMPUTERS & OFFICE EQUIPMENT - 1.8%
Celestica, Inc. (sub-vtg.) 55,000 1,002
Digital Lightwave, Inc. (a) 100 0
Fore Systems, Inc. (a) 150,000 3,975
Unisys Corp. (a) 804,000 22,713
27,690
ELECTRONIC INSTRUMENTS - 1.5%
JDS Fitel, Inc. (a) 1,400,400 23,376
Novellus Systems, Inc. (a) 200 7
23,383
ELECTRONICS - 0.7%
American Xtal Technology, Inc. 23,400 336
PMC-Sierra, Inc. (a) 200 9
SDL, Inc. (a) 1,000 24
Speedfam International, Inc. (a) 300 6
World Access, Inc. (a) 317,600 9,528
9,903
TOTAL TECHNOLOGY 360,213
TRANSPORTATION - 0.4%
AIR TRANSPORTATION - 0.4%
Virgin Express Holdings PLC sponsored ADR (a)(c) 452,400 5,853
UTILITIES - 7.0%
CELLULAR - 1.3%
Centennial Cellular Corp. Class A (a) 246,600 9,201
Rogers Communications, Inc. Class B (non-vtg.) (a) 950,000 8,479
SkyTel Communications, Inc. 112,800 2,640
20,320
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.0%
CalEnergy, Inc. (a) 10,000 $ 301
Niagara Mohawk Power Corp. (a) 100 1
302
TELEPHONE SERVICES - 5.7%
Comsat Corp. Series 1 10,700 303
ESAT Telecom Group PLC sponsored ADR 150,000 5,700
Excel Communications, Inc. (a) 1,441,067 33,054
Exodus Communications, Inc. (a) 20,500 917
STAR Telecommunications, Inc. 54,900 1,228
Tel-Save Holdings, Inc. (a) 679,900 10,029
Telecomunicacoes Brasileiras SA sponsored ADR 206,000 22,493
U.S. LEC Corp. Class A 30,700 641
Worldcom, Inc. (a) 250,900 12,153
86,518
TOTAL UTILITIES 107,140
TOTAL COMMON STOCKS 1,497,735
(Cost $1,241,069)
</TABLE>
PREFERRED STOCKS - 0.9%
CONVERTIBLE PREFERRED STOCKS - 0.5%
SERVICES - 0.5%
Medpartners, Inc. $1.442 700,000 7,394
NONCONVERTIBLE PREFERRED STOCKS - 0.4%
UTILITIES - 0.4%
TELEPHONE SERVICES - 0.4%
Telecom Italia Mobile (TIM) SA 2,030,000 6,760
TOTAL PREFERRED STOCKS 14,154
(Cost $13,052)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 1.3%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (b) 20,127,466 $ 20,127
TOTAL INVESTMENT IN SECURITIES - 100% $ 1,532,016
(Cost $1,274,248)
</TABLE>
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 5.61%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Affiliated company (see Note 8 of Notes to Financial Statements).
(d) 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 $935,000 or 0.1% of net assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investments in securities, is as follows:
% OF FUND'S INVESTMENTS
United States of America 78.2%
Israel 6.2
Switzerland 5.1
Canada 4.1
Brazil 1.5
France 1.5
United Kingdom 1.2
Other (individually less than 1%) 2.2
TOTAL 100.0%
INCOME TAX INFORMATION
At June 30, 1998, the aggregate cost of investment securities for
income tax purposes was $1,282,962,000. Net unrealized appreciation
aggregated $249,054,000, of which $323,064,000 related to appreciated
investment securities and $74,010,000 related to depreciated
investment securities.
The fund intends to elect to defer its fiscal year ending December 31,
1998 approximately $34,776,000 of losses recognized during the period
November 1, 1997 to December 31, 1997.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) JUNE 30, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $1,274,248) - $ 1,532,016
SEE ACCOMPANYING SCHEDULE
CASH 1,209
FOREIGN CURRENCY HELD AT VALUE (COST $725) 726
RECEIVABLE FOR INVESTMENTS SOLD 15,862
RECEIVABLE FOR FUND SHARES SOLD 1,854
DIVIDENDS RECEIVABLE 1,052
INTEREST RECEIVABLE 86
OTHER RECEIVABLES 465
TOTAL ASSETS 1,553,270
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 13,661
PAYABLE FOR FUND SHARES REDEEMED 10,046
ACCRUED MANAGEMENT FEE 507
OTHER PAYABLES AND ACCRUED EXPENSES 302
TOTAL LIABILITIES 24,516
NET ASSETS $ 1,528,754
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,262,032
UNDISTRIBUTED NET INVESTMENT INCOME 99
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 8,871
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 257,752
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 24,430 SHARES OUTSTANDING $ 1,528,754
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $62.58
PER SHARE ($1,528,754 (DIVIDED BY) 24,430 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 3,994
DIVIDENDS
INTEREST 504
TOTAL INCOME 4,498
EXPENSES
MANAGEMENT FEE $ 4,515
BASIC FEE
PERFORMANCE ADJUSTMENT (1,358)
TRANSFER AGENT FEES 1,197
ACCOUNTING FEES AND EXPENSES 307
NON-INTERESTED TRUSTEES' COMPENSATION 3
CUSTODIAN FEES AND EXPENSES 101
REGISTRATION FEES 40
AUDIT 26
LEGAL 5
INTEREST 32
MISCELLANEOUS 3
TOTAL EXPENSES BEFORE REDUCTIONS 4,871
EXPENSE REDUCTIONS (454) 4,417
NET INVESTMENT INCOME 81
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF $5,908 65,216
ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS (105)
FUTURES CONTRACTS 730 65,841
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 154,536
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (11)
FUTURES CONTRACTS (850) 153,675
NET GAIN (LOSS) 219,516
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 219,597
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 81 $ 1,842
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 65,841 216,761
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 153,675 (106,075)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 219,597 112,528
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS - (1,184)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN - (170,047)
TOTAL DISTRIBUTIONS - (171,231)
SHARE TRANSACTIONS 522,762 1,295,070
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS - 151,806
COST OF SHARES REDEEMED (643,671) (1,289,760)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (120,909) 157,116
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 98,688 98,413
NET ASSETS
BEGINNING OF PERIOD 1,430,066 1,331,653
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 1,528,754 $ 1,430,066
INCOME OF $99 AND $508, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 8,603 20,963
ISSUED IN REINVESTMENT OF DISTRIBUTIONS - 2,918
REDEEMED (10,603) (20,892)
NET INCREASE (DECREASE) (2,000) 2,989
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED DECEMBER 31,
JUNE 30, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 54.11 $ 56.81 $ 52.48 $ 50.99 $ 59.08 $ 54.20
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME .00 D .08 D .62 E .46 .20 .17
NET REALIZED AND 8.47 4.46 8.18 10.71 (4.24) 10.04
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT 8.47 4.54 8.80 11.17 (4.04) 10.21
OPERATIONS
LESS DISTRIBUTIONS - (.05) (.45) (.47) (.21) (.26)
FROM NET INVESTMENT
INCOME
IN EXCESS OF NET - - - - - (.01)
INVESTMENT INCOME
FROM NET REALIZED GAIN - (7.19) (4.02) (9.21) (3.84) (5.06)
TOTAL DISTRIBUTIONS - (7.24) (4.47) (9.68) (4.05) (5.33)
NET ASSET VALUE, END $ 62.58 $ 54.11 $ 56.81 $ 52.48 $ 50.99 $ 59.08
OF PERIOD
TOTAL RETURN B, C 15.65% 8.55% 16.98% 22.11% (6.70)% 19.15%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 1,529 $ 1,430 $ 1,332 $ 1,268 $ 1,193 $ 1,393
(IN MILLIONS)
RATIO OF EXPENSES TO .65% A .65% .66% .85% 1.04% .93%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .59% A, F .59% F .64% F .82% F 1.04% .92% F
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT .01% A .13% 1.77% .82% .39% .43%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 215% A 334% 142% 186% 29% 50%
AVERAGE COMMISSION $ .0435 $ .0384 $ .0384
RATE G
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 7 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.28 PER SHARE.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1998 (Unaudited)
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
financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make
certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities 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 with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
the fair market value of the securities received. Interest income is
accrued as earned. Investment income is recorded net of foreign taxes
withheld where recovery of such taxes is uncertain.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Under the Plan, deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds, including shares of the fund.
Deferred amounts remain in the fund until distributed in accordance
with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, futures transactions, foreign
currency transactions, partnerships, and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc.,
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
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.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. Buying futures tends to increase the
fund's exposure to the underlying instrument, while selling futures
tends to decrease the fund's exposure to the underlying instrument or
hedge other fund investments. Losses may arise from changes in the
value of the underlying instruments or if the counterparties do not
perform under the contracts' terms. Gains (losses) are realized upon
the expiration or closing of the futures contracts. Futures contracts
are valued at the settlement price established each day by the board
of trade or exchange on which they are traded.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,579,305,000 and $1,657,221,000, respectively.
The market value of futures contracts opened and closed during the
period amounted to $0 and $43,977,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annualized rate of .42% of average
net assets after the performance adjustment.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .16% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $185,000 for the
period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The maximum loan and the average daily loan balances during the period
for which loans were outstanding amounted to $15,711,000 and
$15,047,000, respectively. The weighted average interest rate was
5.55%. Interest expense includes $14,000 paid under the interfund
lending program.
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
6. BANK BORROWINGS - CONTINUED
arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a
market 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 period for which loans were outstanding amounted
to $12,616,000 and $5,430,000, respectively.
The weighted average interest rate was 5.87%. Interest expense
includes $18,000 paid under the bank borrowing program.
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 $421,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $6,000 and $27,000, respectively, under these arrangements.
8. 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 during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Anchor Gaming $ 7,939 $ 6,625 $ - $ 90,263
Business Objects SA sponsored ADR 1,285 3,913 - -
Computer Learning Centers, Inc. 5,568 - - 32,447
ESC Medical Systems Ltd. 7,708 - - 53,524
FIRSTPLUS Financial Group, Inc. 6,115 - - 74,095
General Cigar Holdings, Inc. Class A - 2,937 - -
Long Beach Financial Corp. - - - 13,742
Penn National Gaming, Inc. - 12,203 - 6,297
Telespectrum Worldwide, Inc. - 12,188 - -
Timberland Co. Class A - 620 - -
Virgin Express Holdings PLC
sponsored ADR 3,838 - - 5,853
Zag Industries Ltd. - 3,141 - -
TOTALS $ 32,453 $ 41,627 $ - $ 276,221
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 and we'll send you an America Online CD or disk with up
to 50 free hours of Web access.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
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10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
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1760 Challenge Way
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7676 Hazard Center Drive
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455 Market Street
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950 Northgate Drive
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1400 Civic Drive
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6300 Canoga Avenue
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COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
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265 Church Street
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300 Atlantic Street
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29 South Main Street
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DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
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90 Alhambra Plaza
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4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
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8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
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8065 Beneva Road
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1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail Johnson, Vice President
Arieh Coll, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Contrafund II
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuant Growth Fund
SM
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
