FIDELITY
TREND
FUND
SEMIANNUAL REPORT
JUNE 30, 1999
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 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 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 25 Footnotes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
After much speculation about the U.S. Federal Reserve Board's
near-term monetary policy, stock and bond investors breathed a sigh of
relief when the Fed shifted to a neutral position on rates following
its widely anticipated quarter-point increase in short-term rates on
June 30. This switch in bias helped the S&P 500(registered trademark)
and NASDAQ soar to record-closing highs, and sent yields on the
bellwether 30-year Treasury back below 6%.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY TREND 19.35% 6.15% 93.23% 219.19%
S&P 500 (registered trademark) 12.38% 22.76% 241.86% 459.06%
Growth Funds Average 11.65% 18.87% 182.63% 364.07%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Standard & Poor's 500 Index - a market capitalization-weighted
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 Inc. The past six months average represents a peer
group of 1,174 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY TREND 6.15% 14.08% 12.31%
S&P 500 22.76% 27.87% 18.78%
Growth Funds Average 18.87% 22.64% 16.15%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Trend S&P 500
00005 SP001
1989/06/30 10000.00 10000.00
1989/07/31 10641.79 10903.00
1989/08/31 11045.97 11116.70
1989/09/30 11099.27 11071.12
1989/10/31 10470.80 10814.27
1989/11/30 10597.38 11034.88
1989/12/31 10850.81 11299.72
1990/01/31 9913.45 10541.51
1990/02/28 10158.62 10677.49
1990/03/31 10340.81 10960.45
1990/04/30 9838.54 10686.44
1990/05/31 10771.68 11728.36
1990/06/30 10788.91 11648.61
1990/07/31 10574.71 11611.33
1990/08/31 9520.93 10561.67
1990/09/30 8792.15 10047.32
1990/10/31 8420.38 10004.11
1990/11/30 9173.78 10650.38
1990/12/31 9477.13 10947.52
1991/01/31 10071.77 11424.84
1991/02/28 10968.69 12241.71
1991/03/31 11213.98 12537.96
1991/04/30 11327.96 12568.05
1991/05/31 11858.18 13110.99
1991/06/30 11023.20 12510.51
1991/07/31 11786.33 13093.50
1991/08/31 12073.74 13403.81
1991/09/30 11994.45 13179.97
1991/10/31 12120.81 13356.58
1991/11/30 11427.06 12818.31
1991/12/31 12915.11 14284.73
1992/01/31 12995.78 14019.03
1992/02/29 13306.37 14201.28
1992/03/31 12874.09 13924.35
1992/04/30 12798.11 14333.73
1992/05/31 13112.49 14403.97
1992/06/30 12813.83 14189.35
1992/07/31 13534.29 14769.69
1992/08/31 13319.46 14466.91
1992/09/30 13518.58 14637.62
1992/10/31 13840.82 14688.85
1992/11/30 14655.60 15189.74
1992/12/31 15081.27 15376.58
1993/01/31 15443.00 15505.74
1993/02/28 15352.65 15716.62
1993/03/31 15996.99 16048.24
1993/04/30 15408.43 15659.87
1993/05/31 16245.24 16079.56
1993/06/30 16543.70 16126.19
1993/07/31 16499.07 16061.68
1993/08/31 17363.78 16670.42
1993/09/30 17743.13 16542.06
1993/10/31 18066.69 16884.48
1993/11/30 17229.89 16724.08
1993/12/31 17969.08 16926.44
1994/01/31 18683.83 17501.94
1994/02/28 18029.91 17027.63
1994/03/31 16861.98 16285.23
1994/04/30 16956.26 16493.68
1994/05/31 16992.76 16764.18
1994/06/30 16518.29 16353.45
1994/07/31 16962.35 16889.85
1994/08/31 17941.70 17582.33
1994/09/30 17555.44 17151.56
1994/10/31 17634.52 17537.47
1994/11/30 16664.28 16898.76
1994/12/31 16765.71 17149.37
1995/01/31 16624.33 17594.05
1995/02/28 17170.14 18279.69
1995/03/31 17433.19 18819.12
1995/04/30 17683.08 19373.35
1995/05/31 18067.78 20147.70
1995/06/30 18636.61 20615.73
1995/07/31 19544.11 21299.35
1995/08/31 20073.48 21352.81
1995/09/30 20691.63 22253.90
1995/10/31 20168.84 22174.45
1995/11/30 20803.43 23147.91
1995/12/31 20473.40 23593.74
1996/01/31 20886.93 24396.87
1996/02/29 21578.70 24623.03
1996/03/31 21566.86 24860.15
1996/04/30 22142.82 25226.59
1996/05/31 22754.28 25877.18
1996/06/30 22178.33 25975.77
1996/07/31 20912.01 24828.16
1996/08/31 21401.18 25351.79
1996/09/30 22687.22 26778.59
1996/10/31 22442.64 27517.14
1996/11/30 23996.93 29597.16
1996/12/31 23950.50 29010.84
1997/01/31 24937.01 30823.44
1997/02/28 23728.60 31065.10
1997/03/31 21882.80 29788.63
1997/04/30 21607.63 31567.01
1997/05/31 24549.89 33488.81
1997/06/30 26158.61 34989.11
1997/07/31 27970.53 37773.19
1997/08/31 27750.39 35657.14
1997/09/30 30040.70 37610.08
1997/10/31 27504.85 36353.90
1997/11/30 26497.29 38036.73
1997/12/31 25999.30 38689.82
1998/01/31 25980.08 39117.73
1998/02/28 28368.12 41938.90
1998/03/31 30410.20 44086.59
1998/04/30 31010.81 44530.10
1998/05/31 29526.10 43764.63
1998/06/30 30069.05 45542.35
1998/07/31 28728.49 45057.32
1998/08/31 20675.48 38542.93
1998/09/30 21963.19 41011.99
1998/10/31 22707.95 44347.91
1998/11/30 24259.93 47035.84
1998/12/31 26744.06 49746.04
1999/01/31 28613.17 51826.42
1999/02/28 27849.19 50215.65
1999/03/31 29170.54 52224.78
1999/04/30 30621.62 54247.45
1999/05/31 30030.61 52966.67
1999/06/30 31918.94 55906.32
IMATRL PRASUN SHR__CHT 19990630 19990714 110528 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Trend Fund on June 30, 1989. As the chart shows,
by June 30, 1999, the value of the investment would have grown to
$31,919 - a 219.19% 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 would have grown to $55,906 - a 459.06% increase.
(checkmark)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.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Signs of continued strength and
emerging inflationary pressures
in the U.S. economy bred investor
uncertainty, which induced stock
markets to give back some of their
gains early, yet bulls won the battle
of wills over their bearish
counterparts as domestic equity
markets surged to a strong finish for
the six-
month period that ended June 30,
1999. The Dow Jones Industrial
Average - an index of 30
blue-chip stocks - locked in a
healthy return of 20.39% for the
period. The technology-laden
NASDAQ returned 22.70%,
while the Standard & Poor's 500
Index posted a return of 12.38%.
The overall market's sudden
rotation to economically sensitive
cyclical and out-of-favor value stocks
marked much of April and May.
This movement away from
large-company growth stocks and
the subsequent broadening of the
market was reflected in the rebound
of the small-cap universe, as
portrayed by the Russell 2000
Index, which handily outpaced the
larger-cap constituents of the S&P
500 by a total of 8.50% in the
second quarter. However,
indications of a moderating economy
and stronger earnings growth late
in the period fueled a rally in
growth stocks and helped them
regain center stage in June.
Generally wary investors warmly
applauded the Federal Reserve
Board's June 30 decision to
abandon its bias toward raising
interest rates and to limit its
pre-emptive strike against inflation
to a single quarter-point hike.
(photograph of Nick Thakore)
An interview with Nick Thakore, Portfolio Manager of Fidelity Trend
Fund
Q. HOW DID THE FUND PERFORM, NICK?
A. Fund performance during the period was strong. For the six months
that ended June 30, 1999, the fund posted a total return of 19.35%,
outpacing the Standard & Poor's 500 Index and the growth funds
average, as tracked by Lipper Inc., which returned 12.38% and 11.65%,
respectively. The fund underperformed early in the 12-month period
that ended June 30, 1999, so its 6.15% return lagged the S&P 500 index
and the growth funds average, which returned 22.76% and 18.87%,
respectively.
Q. CAN YOU HIGHLIGHT THE PRIMARY FACTORS CONTRIBUTING TO THE FUND'S
TURNAROUND?
A. Since taking over the fund last November, the majority of the
fund's largest holdings turned in strong results. Also, as a group,
large constituents of the S&P 500 not owned by the fund underperformed
during the period. Additionally the fund had exposure to both
traditional growth and cyclical stocks, which kept the fund from
missing large advances both of these segments had during the 6-month
period. Finally, while the fund was quite balanced across the 11 S&P
economic sectors, it benefited from large industry bets within these
sectors. For example, the fund was greatly helped by a large
overweight in Biotech stocks and underweight in large pharmaceutical
companies.
Q. DID YOU PURSUE ANY OTHER INVESTMENT STRATEGIES DURING THE PERIOD?
A. Within the technology sector, I focused on communications equipment
companies such as Cisco, versus the computer equipment manufacturers
such as Dell, IBM and Intel. This strategy worked out well as
investors grew concerned about potential Year 2000 (Y2K) problems and
weaker sales that could ensue for computer companies. Another strategy
for the fund was a concentration in faster growth segments of
telecommunications services, such as some long distance companies and
competitive local exchange carriers, rather than the traditionally
slower growing regional bell operating companies.
Q. WHICH HOLDINGS WORKED OUT WELL FOR THE FUND?
A. Williams Companies performed well for the fund. This company is
engaged in two very different businesses, energy services and
telecommunications. The stock benefited from a recovery in energy
prices as well as greater recognition of hidden value from a potential
initial public offering of the telecommunications segment. Other solid
performers were Navistar International and Cincinnati Bell. I felt
Navistar, an auto-parts manufacturer, was undervalued and that its
consensus earnings estimates were too low given improving trends in
both the truck and engine divisions. Shares of Cincinnati Bell rallied
as the company spun-off its troubled billing business from its
profitable telecommunications business.
Q. WHICH STOCKS TURNED OUT TO BE DISAPPOINTMENTS?
A. Philip Morris, Eli Lilly and Compuware were the main detractors.
The negative regulatory environment and persistent litigation costs
punished Philip Morris' stock during the period. Eli Lilly was hurt as
the market rotated out of large-cap pharmaceuticals and investors
became concerned about the growth prospects for its biggest-selling
drug - Prozac. Shares of Compuware suffered as investors worried about
the potential impact of Y2K problems on their business.
Q. WHAT'S YOUR OUTLOOK?
A. I view this as an uncertain time in terms of the direction of
inflation, interest rates and the U.S. economy. As a result, I've kept
the fund reasonably balanced in terms of sector weightings and will
continue to focus on in-depth research and stock picking to find the
best growth stories at the right price in an effort to outperform the
broader market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to 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, 1999,
more than $1.3 billion
MANAGER: Nick Thakore,
since November 1998;
manager, Fidelity Utilities
Fund, Fidelity Advisor Utilities
Growth Fund and Fidelity
Select Utilities Growth
Portfolio, 1997-1998;
Fidelity Select
Telecommunications Portfolio
1996-1998; joined Fidelity
in 1993
NICK THAKORE ON HIS
INVESTMENT STYLE:
"My focus is on finding the best
growth stories but with sensitivity
as to what price is being paid for
the growth. My goal is for the fund
as a whole to have superior
projected earnings growth
relative to the S&P 500 but for the
valuation to be at a discount to the
growth. This means that I am likely
to avoid some aggressive growth
companies for which I view
valuation as too high and include
some slower growth companies
that are attractively valued. In
addition, I view companies'
recent earnings performance
relative to Wall Street's
expectations, our internal
projected earnings expectations
relative to Wall Street and insider
buying as valuable clues in stock
selection.
"When growth prospects relative
to their valuation appear
particularly compelling for
economic sectors, such as energy
stocks earlier this year, I will look
to overweight them. However, in
general, the goal is to have the
fund's relative performance
dictated by individual stock
picking rather than
macroeconomic bets."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF JUNE 30,
1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Microsoft Corp. 3.4 3.5
MCI WorldCom, Inc. 3.3 4.2
Tyco International Ltd. 2.9 3.1
Medpartners, Inc. 2.6 0.0
Tricon Global Restaurants, Inc. 2.5 0.5
Williams Companies, Inc. 2.4 0.0
Citigroup, Inc. 2.1 1.9
Lucent Technologies, Inc. 2.0 0.9
Cincinnati Bell, Inc. 1.9 1.4
General Electric Co. 1.8 2.9
TOP FIVE MARKET SECTORS AS OF
JUNE 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 19.9 18.5
FINANCE 13.1 15.4
UTILITIES 12.8 11.6
MEDIA & LEISURE 8.4 7.8
HEALTH 7.8 11.9
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF JUNE 30, 1999 * AS OF DECEMBER 31, 1998 **
Stocks 98.3% Stocks 98.2%
Convertible Securities 0.0% Convertible Securities 1.0%
Short-term Investments 1.7% Short-term Investments 0.8%
* FOREIGN INVESTMENTS 3.8% ** FOREIGN INVESTMENTS 3.4%
Row: 1, Col: 1, Value: 98.3 Row: 1, Col: 1, Value: 98.2
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 1.7 Row: 1, Col: 8, Value: 0.8
</TABLE>
INVESTMENTS JUNE 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 98.3%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.1%
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. Class A 20,800 $ 1,433
BASIC INDUSTRIES - 2.7%
CHEMICALS & PLASTICS - 1.6%
Airgas, Inc. (a) 425,500 5,212
Eastman Chemical Co. 35,500 1,837
Fuller (H.B.) Co. 41,931 2,867
Great Lakes Chemical Corp. 30,800 1,419
Hanna (M.A.) Co. 193,600 3,182
Ivex Packaging Corp. (a) 62,200 1,368
Union Carbide Corp. 52,700 2,569
Wellman, Inc. 204,900 3,266
21,720
METALS & MINING - 0.4%
Inco Ltd. 331,700 5,964
PACKAGING & CONTAINERS - 0.3%
Owens-Illinois, Inc. (a) 42,100 1,376
Tupperware Corp. 81,400 2,076
3,452
PAPER & FOREST PRODUCTS - 0.4%
Pentair, Inc. 120,800 5,527
TOTAL BASIC INDUSTRIES 36,663
CONSTRUCTION & REAL ESTATE -
2.3%
BUILDING MATERIALS - 0.7%
American Standard Companies, 137,700 6,610
Inc. (a)
Florida Rock Industries, Inc. 28,800 1,310
York International Corp. 47,100 2,016
9,936
ENGINEERING - 0.2%
EG & G, Inc. 41,300 1,471
Fluor Corp. 32,900 1,332
2,803
REAL ESTATE - 0.3%
Boardwalk Equities, Inc. (a) 434,900 4,430
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- - 1.1%
Apartment Investment & 100,600 $ 4,301
Management Co. Class A
Equity Office Properties Trust 95,900 2,457
Equity Residential Properties 30,400 1,370
Trust (SBI)
Public Storage, Inc. 48,700 1,364
Simon Property Group, Inc. 47,100 1,195
Starwood Hotels & Resorts 113,200 3,460
Worldwide, Inc.
14,147
TOTAL CONSTRUCTION & REAL 31,316
ESTATE
DURABLES - 6.0%
AUTOS, TIRES, & ACCESSORIES -
3.5%
Federal-Mogul Corp. 361,400 18,793
Ford Motor Co. 62,700 3,539
Navistar International Corp. 488,700 24,435
(a)
46,767
CONSUMER ELECTRONICS - 0.2%
Gemstar International Group 32,000 2,088
Ltd. (a)
HOME FURNISHINGS - 0.0%
Newell Rubbermaid, Inc. 14,200 660
TEXTILES & APPAREL - 2.3%
Jones Apparel Group, Inc. (a) 300,000 10,294
NIKE, Inc. Class B 250,500 15,860
Unifi, Inc. (a) 161,000 3,421
WestPoint Stevens, Inc. Class 44,600 1,330
A
30,905
TOTAL DURABLES 80,420
ENERGY - 6.5%
ENERGY SERVICES - 0.8%
BJ Services Co. (a) 88,800 2,614
Halliburton Co. 67,900 3,072
Precision Drilling Corp. 37,200 712
Class A
Schlumberger Ltd. 59,700 3,802
UTI Energy Corp. (a) 88,400 1,464
11,664
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - 5.7%
Alberta Energy Co. Ltd. 26,700 $ 863
Amerada Hess Corp. 35,000 2,083
Anderson Exploration Ltd. (a) 48,100 636
Apache Corp. 31,800 1,240
Chesapeake Energy Corp. 1,000,000 2,938
Chevron Corp. 27,300 2,599
Denbury Resources, Inc. (a) 196,400 886
Exxon Corp. 54,800 4,226
Kerr-McGee Corp. 123,600 6,203
Mobil Corp. 240,800 23,839
Murphy Oil Corp. 21,300 1,040
Noble Affiliates, Inc. 29,200 823
Occidental Petroleum Corp. 529,900 11,194
Petroleum Geo-Services ASA 40,000 595
sponsored ADR (a)
Range Resources Corp. 239,500 1,467
Ranger Oil Ltd. (a) 174,400 853
Santa Fe Snyder Corp. (a) 120,745 921
Texaco, Inc. 33,300 2,081
Tosco Corp. 109,700 2,845
Union Pacific Resources 78,900 1,287
Group, Inc.
Upton Resources, Inc. (a) 31,300 52
USX-Marathon Group 247,000 8,043
76,714
TOTAL ENERGY 88,378
FINANCE - 13.1%
BANKS - 3.2%
Bank of America Corp. 138,870 10,181
Bank of New York Co., Inc. 95,000 3,485
Bank One Corp. 38,200 2,275
Chase Manhattan Corp. 185,300 16,052
Comerica, Inc. 55,000 3,269
Toronto Dominion Bank 23,700 1,082
U.S. Bancorp 53,400 1,816
Wells Fargo & Co. 109,300 4,673
42,833
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 5.9%
American Express Co. 40,000 $ 5,205
Associates First Capital 527,600 23,379
Corp. Class A
Citigroup, Inc. 601,600 28,576
Household International, Inc. 203,200 9,627
Metris Companies, Inc. 99,400 4,051
Providian Financial Corp. 95,400 8,920
79,758
FEDERAL SPONSORED CREDIT - 2.1%
Fannie Mae 144,300 9,867
Freddie Mac 135,500 7,859
SLM Holding Corp. 225,200 10,317
28,043
INSURANCE - 1.7%
Ambac Financial Group, Inc. 24,300 1,388
American International Group, 42,900 5,022
Inc.
MBIA, Inc. 21,600 1,399
UICI (a) 552,600 15,266
23,075
SECURITIES INDUSTRY - 0.2%
Morgan Stanley, Dean Witter & 30,600 3,137
Co.
TOTAL FINANCE 176,846
HEALTH - 7.8%
DRUGS & PHARMACEUTICALS - 6.2%
Allergan, Inc. 32,400 3,596
Biogen, Inc. (a) 94,400 6,071
Bristol-Myers Squibb Co. 45,400 3,198
Forest Laboratories, Inc. (a) 133,000 6,151
Lilly (Eli) & Co. 208,100 14,905
Medimmune, Inc. (a) 47,400 3,211
Merck & Co., Inc. 238,400 17,642
Quintiles Transnational Corp. 69,400 2,915
(a)
Schering-Plough Corp. 67,500 3,578
Teva Pharmaceutical 65,600 3,214
Industries Ltd. ADR
Warner-Lambert Co. 284,600 19,744
84,225
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 1.3%
Cardinal Health, Inc. 83,000 $ 5,322
Johnson & Johnson 127,900 12,534
17,856
MEDICAL FACILITIES MANAGEMENT
- - 0.3%
Express Scripts, Inc. Class A 40,000 2,408
(a)
Lincare Holdings, Inc. (a) 35,800 895
3,303
TOTAL HEALTH 105,384
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.8%
ELECTRICAL EQUIPMENT - 2.2%
ANTEC Corp. (a) 41,900 1,343
California Amplifier, Inc. (a) 520,000 3,380
General Electric Co. 218,900 24,736
29,459
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
AGCO Corp. 335,000 3,790
Tyco International Ltd. 411,000 38,942
42,732
POLLUTION CONTROL - 0.5%
Waste Management, Inc. 119,400 6,418
TOTAL INDUSTRIAL MACHINERY & 78,609
EQUIPMENT
MEDIA & LEISURE - 8.4%
BROADCASTING - 2.3%
EchoStar Communications Corp. 15,700 2,409
Class A (New) (a)
MediaOne Group, Inc. 295,300 21,963
TCI Music, Inc. Class A (a) 38,700 1,369
Time Warner, Inc. 66,604 4,895
30,636
ENTERTAINMENT - 1.8%
King World Productions, Inc. 110,100 3,833
(a)
Mandalay Resort Group (a) 548,000 11,577
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
Park Place Entertainment 232,600 $ 2,253
Corp.
Viacom, Inc. Class B 164,200 7,225
(non-vtg.) (a)
24,888
LEISURE DURABLES & TOYS - 0.7%
Champion Enterprises, Inc. (a) 107,700 2,006
Hasbro, Inc. 242,600 6,778
8,784
LODGING & GAMING - 0.1%
Harrah's Entertainment, Inc. 86,300 1,899
(a)
PUBLISHING - 0.5%
Gannet, Inc. 34,500 2,462
Knight-Ridder, Inc. 72,000 3,956
6,418
RESTAURANTS - 3.0%
McDonald's Corp. 165,300 6,829
Tricon Global Restaurants, 620,400 33,579
Inc. (a)
40,408
TOTAL MEDIA & LEISURE 113,033
NONDURABLES - 3.9%
BEVERAGES - 0.7%
Anheuser-Busch Companies, 37,600 2,667
Inc.
Canandaigua Wine, Inc. Class 125,600 6,586
A (a)
9,253
FOODS - 0.8%
American Italian Pasta Co. 110,500 3,356
Class A (a)
Corn Products International, 119,300 3,631
Inc.
Nabisco Holdings Corp. Class A 98,100 4,243
11,230
HOUSEHOLD PRODUCTS - 1.6%
Procter & Gamble Co. 234,100 20,893
TOBACCO - 0.8%
Philip Morris Companies, Inc. 270,200 10,859
TOTAL NONDURABLES 52,235
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - 0.9%
Newmont Mining Corp. 333,600 $ 6,630
Placer Dome, Inc. 462,300 5,405
12,035
RETAIL & WHOLESALE - 3.8%
APPAREL STORES - 1.0%
Abercrombie & Fitch Co. Class 124,800 5,990
A (a)
Limited, Inc. (The) 100,400 4,556
Venator Group, Inc. (a) 243,100 2,537
13,083
DRUG STORES - 0.2%
CVS Corp. 60,800 3,086
GENERAL MERCHANDISE STORES -
0.9%
Federated Department Stores, 73,500 3,891
Inc. (a)
Saks, Inc. (a) 104,900 3,029
Wal-Mart Stores, Inc. 117,800 5,684
12,604
GROCERY STORES - 1.3%
Fleming Companies, Inc. 334,700 3,891
Kroger Co. (a) 467,600 13,064
16,955
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.4%
Lowe's Companies, Inc. 104,500 5,924
TOTAL RETAIL & WHOLESALE 51,652
SERVICES - 3.6%
ADVERTISING - 0.5%
DoubleClick, Inc. (a) 58,500 5,367
Getty Images, Inc. (a) 56,200 1,061
6,428
LEASING & RENTAL - 0.1%
United Rentals, Inc. (a) 48,700 1,437
PRINTING - 0.2%
Donnelley (R.R.) & Sons Co. 70,000 2,594
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - 2.8%
International Telecom Data 172,000 $ 2,752
Systems, Inc. (a)
Medpartners, Inc. (a) 4,646,600 35,140
37,892
TOTAL SERVICES 48,351
TECHNOLOGY - 19.9%
COMMUNICATIONS EQUIPMENT - 4.6%
Aspect Telecommunications 242,000 2,360
Corp. (a)
Cisco Systems, Inc. (a) 294,400 18,970
Lucent Technologies, Inc. 391,810 26,423
Nokia AB sponsored ADR 154,200 14,119
61,872
COMPUTER SERVICES & SOFTWARE
- - 9.0%
ACTV, Inc. (a) 139,000 1,929
Affiliated Computer Services, 107,200 5,427
Inc. Class A (a)
America Online, Inc. 32,500 3,591
Ariba, Inc. 2,900 282
Ask Jeeves, Inc. 200 3
At Home Corp. Series A (a) 119,200 6,429
Bell & Howell Co. (a) 109,500 4,140
BMC Software, Inc. 27,000 1,458
Clarent Corp. 900 14
Computer Associates 26,200 1,441
International, Inc.
Compuware Corp. (a) 47,200 1,502
DST Systems, Inc. (a) 108,216 6,804
eBay, Inc. 26,400 3,996
Electronic Data Systems Corp. 94,800 5,362
Electronics for Imaging, Inc. 53,400 2,743
(a)
Inktomi Corp. 22,200 2,898
International Business 63,200 8,169
Machines Corp.
Microsoft Corp. (a) 516,100 46,544
NCR Corp. (a) 52,800 2,577
Novell, Inc. (a) 51,500 1,365
PeopleSoft, Inc. 41,000 707
Sabre Group Holdings, Inc. 70,800 4,868
Class A (a)
Siebel Systems, Inc. (a) 12,300 816
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Unisys Corp. (a) 155,100 $ 6,039
Visual Networks, Inc. (a) 63,600 2,035
121,139
COMPUTERS & OFFICE EQUIPMENT
- - 2.6%
Adaptec, Inc. (a) 210,300 7,426
Comverse Technology, Inc. (a) 153,700 11,604
EMC Corp. (a) 50,500 2,778
Gateway, Inc. (a) 63,500 3,747
Hewlett-Packard Co. 95,300 9,578
35,133
ELECTRONIC INSTRUMENTS - 0.2%
JDS Fitel, Inc. (a) 40,000 3,377
ELECTRONICS - 3.5%
Celestica, Inc. (sub-vtg.) 63,000 2,744
Intel Corp. 197,600 11,757
Motorola, Inc. 148,100 14,032
National Semiconductor Corp. 548,100 13,874
(a)
Texas Instruments, Inc. 30,400 4,408
46,815
TOTAL TECHNOLOGY 268,336
TRANSPORTATION - 0.7%
AIR TRANSPORTATION - 0.0%
AMR Corp. (a) 9,300 635
RAILROADS - 0.3%
Burlington Northern Santa Fe 124,200 3,850
Corp.
TRUCKING & FREIGHT - 0.4%
American Freightways Corp. (a) 136,300 2,666
USFreightways Corp. 63,100 2,922
5,588
TOTAL TRANSPORTATION 10,073
UTILITIES - 12.8%
CELLULAR - 2.1%
ALLTEL Corp. 168,700 12,062
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Associated Group, Inc. Class 149,600 $ 9,743
A (a)
Vodafone AirTouch PLC 37,500 7,388
sponsored ADR
29,193
ELECTRIC UTILITY - 1.2%
Calpine Corp. (a) 137,800 7,441
Illinova Corp. 79,700 2,172
IPALCO Enterprises, Inc. 98,100 2,078
PG&E Corp. 135,500 4,404
16,095
GAS - 2.6%
Dynegy, Inc. 16,300 332
Ocean Energy, Inc. (a) 198,800 1,913
Williams Companies, Inc. 766,300 32,616
34,861
TELEPHONE SERVICES - 6.9%
Ameritech Corp. 101,000 7,424
CenturyTel, Inc. 66,200 2,631
Cincinnati Bell, Inc. 1,029,400 25,671
IXC Communications, Inc. (a) 53,100 2,087
MCI WorldCom, Inc. (a) 515,900 44,400
McLeodUSA, Inc. Class A (a) 45,000 2,475
TALK.com, Inc. (a) 753,100 8,472
93,160
TOTAL UTILITIES 173,309
TOTAL COMMON STOCKS 1,328,073
(Cost $1,092,069)
CONVERTIBLE PREFERRED STOCKS
- - 0.0%
SERVICES - 0.0%
Medpartners, Inc. $1.44 TAPS 52,100 560
(Cost $471)
CASH EQUIVALENTS - 1.7%
SHARES VALUE (NOTE 1) (000S)
Taxable Central Cash Fund (b) 23,123,020 $ 23,123
(Cost $23,123)
TOTAL INVESTMENT IN $ 1,351,756
SECURITIES - 100%
(Cost $1,115,663)
</TABLE>
SECURITY TYPE ABBREVIATIONS
TAPS - Threshold Appreciation Price
Securities
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.84%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At June 30, 1999, the aggregate cost of investment securities for
income tax purposes was $1,126,165,000. Net unrealized appreciation
aggregated $225,591,000, of which $248,329,000 related to appreciated
investment securities and $22,738,000 related to depreciated
investment securities.
At December 31, 1998, the fund had a capital loss carryforward of
approximately $97,693,000 which will expire on December 31, 2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) JUNE 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 1,351,756
value (cost $1,115,663) -
See accompanying schedule
Receivable for investments 41,016
sold
Receivable for fund shares 3,638
sold
Dividends receivable 1,077
Interest receivable 54
Other receivables 2,890
TOTAL ASSETS 1,400,431
LIABILITIES
Payable to custodian bank $ 800
Payable for investments 58,622
purchased
Payable for fund shares 5,041
redeemed
Accrued management fee 386
Other payables and accrued 97
expenses
TOTAL LIABILITIES 64,946
NET ASSETS $ 1,335,485
Net Assets consist of:
Paid in capital $ 1,029,859
Undistributed net investment 1,791
income
Accumulated undistributed net 67,757
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 236,078
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 20,105 shares $ 1,335,485
outstanding
NET ASSET VALUE, offering $66.43
price and redemption price
per share ($1,335,485
(divided by) 20,105 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
INVESTMENT INCOME $ 4,762
Dividends
Interest 224
TOTAL INCOME 4,986
EXPENSES
Management fee Basic fee $ 3,601
Performance adjustment (1,357)
Transfer agent fees 959
Accounting fees and expenses 211
Non-interested trustees' 6
compensation
Custodian fees and expenses 47
Registration fees 35
Audit 20
Legal 8
Interest 36
Miscellaneous 16
Total expenses before 3,582
reductions
Expense reductions (386) 3,196
NET INVESTMENT INCOME 1,790
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 174,733
Foreign currency transactions (69) 174,664
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 42,318
Assets and liabilities in (36) 42,282
foreign currencies
NET GAIN (LOSS) 216,946
NET INCREASE (DECREASE) IN $ 218,736
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1998
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 1,790 $ 1,313
income
Net realized gain (loss) 174,664 (49,738)
Change in net unrealized 42,282 89,719
appreciation (depreciation)
NET INCREASE (DECREASE) IN 218,736 41,294
NET ASSETS RESULTING FROM
OPERATIONS
Share transactions Net 241,647 794,088
proceeds from sales of shares
Cost of shares redeemed (320,352) (1,069,994)
NET INCREASE (DECREASE) IN (78,705) (275,906)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 140,031 (234,612)
IN NET ASSETS
NET ASSETS
Beginning of period 1,195,454 1,430,066
End of period (including $ 1,335,485 $ 1,195,454
undistributed net investment
income of $1,791 and $1,003,
respectively)
OTHER INFORMATION
Shares
Sold 3,959 13,653
Redeemed (5,333) (18,604)
Net increase (decrease) (1,374) (4,951)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED JUNE 30, 1998 1997 1996 1995 1994
1999 (UNAUDITED)
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 55.66 $ 54.11 $ 56.81 $ 52.48 $ 50.99 $ 59.08
period
Income from Investment
Operations
Net investment income .09 C .05 C .08 C .62 D .46 .20
Net realized and unrealized 10.68 1.50 4.46 8.18 10.71 (4.24)
gain (loss)
Total from investment 10.77 1.55 4.54 8.80 11.17 (4.04)
operations
Less Distributions
From net investment income - - (.05) (.45) (.47) (.21)
From net - - (7.19) (4.02) (9.21) (3.84)
realized gain
Total distributions - - (7.24) (4.47) (9.68) (4.05)
Net asset value, end of period $ 66.43 $ 55.66 $ 54.11 $ 56.81 $ 52.48 $ 50.99
TOTAL RETURN B 19.35% 2.86% 8.55% 16.98% 22.11% (6.70)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,335 $ 1,195 $ 1,430 $ 1,332 $ 1,268 $ 1,193
millions)
Ratio of expenses to average .59% A .62% .65% .66% .85% 1.04%
net assets
Ratio of expenses to average .53% A, E .54% E .59% E .64% E .82% E 1.04%
net assets after expense
reductions
Ratio of net invest- ment .29% A .10% .13% 1.77% .82% .39%
income to average net assets
Portfolio turnover rate 253% A 348% 334% 142% 186% 29%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.28 PER SHARE.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Trend Fund (the fund) is registered under the Investment
Company Act of 1940, as amended, 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 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
and settlement date 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 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. 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, capital loss carryforwards, and
losses deferred due to wash sales and excise tax regulations. 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.
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
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
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., 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.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,539,724,000 and $1,610,004,000, 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 .37% 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
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 $201,000 for the
period.
5. 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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
loans were outstanding amounted to $8,590,000. The weighted average
interest rate was 5.06%.
6. 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 $370,000 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 $7,000 and $9,000, respectively, under these arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 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 VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
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
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 P. Johnson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy 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
TRE-SANN-0899 82086
1.705631.101
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S GROWTH FUNDS
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund(registered trademark)
Contrafund(registered trademark) II
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity FiftySM
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium Fund (registered trademark)
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
Tax Managed Stock Fund
TechnoQuant (registered trademark) Growth Fund
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)
Fidelity Automated
Service Telephone 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
