FIDELITY CHARLES STREET TRUST, 485BPOS, 1995-11-16

FIDELITY CHARLES STREET TRUST
485BPOS, 1995-11-16

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-73133) UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 54 [X]
and
REGISTRATION STATEMENT (No. 811-3221) UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. [ ]
Fidelity Charles Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(X) on (November 20, 1995) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule on or before November 30, 1995.
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...

2a.................................. Expenses
..

b, Contents; The Funds at a Glance; Who May Want to
c............................... Invest

3a.................................. Financial Highlights
..

*
b...................................

c, d............................. Performance

4a i.............................. Charter

The Funds at a Glance; Investment Principles and
ii............................... Risks

Investment Principles and Risks
b...................................

Who May Want to Invest; Investment Principles and
c................................... Risks

5a.................................. Charter
..

b Cover Page; The Funds at a Glance; Charter; Doing
i.............................. Business with Fidelity

Charter
ii..............................

Expenses; Breakdown of Expenses
iii.............................

c................................ Charter

d................................ Charter; Breakdown of Expenses,

Cover Page; Charter
e....................................

Expenses
f....................................

g i.............................. Charter

*
ii...............................

5A................................. Performance
.

6a Charter
i.................................

How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions

Charter
iii................................

*
b..................................

Transaction Details; Exchange Restrictions
c..................................

*
d..................................

Doing Business with Fidelity; How to Buy Shares;
e.................................. How to Sell Shares; Investor Services

f, Dividends, Capital Gains, and Taxes
g..............................

7 Cover Page; Charter
a..................................

Expenses; How to Buy Shares; Transaction Details
b.................................

*
c..................................

How to Buy Shares
d..................................

*
e..................................

f................................ Breakdown of Expenses

8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions

9................................... *
...

</TABLE>

* Not Applicable
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C>
10, Cover Page
11.............................

12.................................. Description of the Trusts
..

13a - Investment Policies and Limitations
c............................

Portfolio Transactions
d..................................

14a - Trustees and Officers
c............................

15a , *
b.............................

Trustees and Officers
c................................

16a FMR, Portfolio Transactions
i................................

Trustees and Officers
ii..............................

Management Contracts
iii..............................

Management Contracts
b.................................

c, Contracts with FMR Affiliates
d.............................

e........................... *

f........................... Distribution and Service Plan

g........................... *

Description of the Trusts
h.................................

Contracts with FMR Affiliates
i.................................

17a - Portfolio Transactions
c............................

*
d,e..............................

18a................................ Description of the Trusts
..

*
b.................................

19a................................ Additional Purchase and Redemption Information
..

Additional Purchase and Redemption Information;
b................................ Valuation of Portfolio Securities

*
c.................................

20.................................. Distributions and Taxes
..

21a, Contracts with FMR Affiliates
b............................

*
c.................................

22a,b....................... Performance

23.................................. Financial Statements
..

</TABLE>

* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about the funds and their investments, you can obtain a copy
of each fund's most recent financial report and portfolio listing, and a
copy of the funds' Statement of Additional Information (SAI) dated November
20,1995. T he SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy o f any of these documents,
call Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

FIDELITY
SHORT-INTERMEDIA
TE GOVERNMENT
FUND
and
FIDELITY
GOVERNMENT
SECURITIES
FUND
Each fund invests in U.S. government securities. Both funds seek high
current income with preservation of capital, but they pursue different
strategies.
PROSPECTUS
NOVEMBER 20, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS THE FUNDS AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.

PERFORMANCE How each fund has
done over time.

THE FUNDS IN DETAIL CHARTER How each fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUNDS AT A GLANCE
GOAL: High current income with preservation of capital. As with any mutual
fund, there is no assurance that a fund will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager.
SHORT-INTERMEDIATE GOVERNMENT
STRATEGY: Invests mainly in securities fully guaranteed by the U.S.
government while normally maintaining an average maturity of two to five
years.
SIZE: As of September 30, 1995, th e fund had over $140 million in
assets.
GOVERNMENT SECURITIES
STRATEGY: Invests mainly in securities of any maturity issued or guaranteed
by the U.S. government and its agencies, and whose income is free from
state and local income taxes.
SIZE: As of September 30, 1995, the fund had over $ 896 million in
assets.
WHO MAY WANT TO INVEST
Either fund may be appropriate for investors who seek high current income
from a portfolio of U.S. government securities. A fund's level of
risk and potential reward depend on the quality and maturity of its
investments. Short-Intermediate Government Fund is designed for those who
want a fund that invests only in securities that are fully guaranteed by
the U.S. government. Government Securities Fund is a non-diversified fund
de signed for investors who want a fund that invests only in securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities. Because Government Securities Fund can invest in
securities with any maturity, it has the potential for higher yields, but
also carries a higher degree of risk.
The value of the funds' investments and the income they generate will vary
from day to day, and generally reflect interest rates, market conditions,
and other economic and political news. When you sell your shares, they may
be worth more or less than what you paid for them. By themselves, these
funds do not constitute a balanced investment plan.

THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking to
maximize return must assume
greater risk. The funds in this
prospectus are in the INCOME
category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly
in stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets.
SHORT-INTERMEDIATE GOVERNMENT
Management fee .45 %

12b-1 fee None

Other expenses .37 %

Total fund operating expenses .82 %

GOVERNMENT SECURITIES
Management fee .45 %

12b-1 fee None

Other expenses .26 %

Total fund operating expenses .71 %

EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
SHORT-INTERMEDIATE GOVERNMENT
After 1 year $ 8

After 3 years $ 26

After 5 years $ 45

After 10 years $ 10
1

GOVERNMENT SECURITIES
After 1 year $ 7

After 3 years $ 23

After 5 years $ 39

After 10 years $ 88

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Report and have
been audited by Price Waterhouse LLP, and Coopers & Lybrand L.L.P.,
respectively, independent accountants. Their reports on the financial
statements and financial highlights are included in the Annual Reports. The
financial statements and financial highlights are incorporated by reference
into (are legally a part of) the funds' Statement of Additional
Information.
SHORT-INTERMEDIATE GOVERNMENT

1.Selected Per-Share Data and

Ratios

2.Years ended September 30 1995 1994 D 1993 1992 1991 E

3.Net asset value, beginning of $ 9.290 $ 9.960 $ 10.140 $ 10.010 $ 10.000

period

4.Income from Investment .648 .533 .722 .694 .027

Operations

Net investment income

5. Net realized and unrealized .174 (.648) (.209) .096 .010

gain (loss)

6. Total from investment .822 (.115) .513 .790 .037

operations

7.Less Distributions
(.622) (.555) (.623) (.650) (.027)
From net investment income

8. From net realized gain -- -- (.070) (.010) --

9. Total distributions (.622) (.555) (.693) (.660) (.027)

10.Net asset value, end of period $ 9.490 $ 9.290 $ 9.960 $ 10.140 $ 10.010

11.Total return B,C 9.15% (1.18)% 5.26% 8.13% .37%

12.Net assets, end of period (000 140,471 132,466 168,292 172,863 1,339

omitted)

13.Ratio of expenses to average .82% .95% .61%, .28%, .65%

net assets F F A,F

14.Ratio of net investment income 6.67% 6.80% 7.19% 7.91% 5.67%

to average net assets A

15.Portfolio turnover rate 266% 184% 348% 419% --

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E FOR THE PERIOD SEPTEMBER 13, 1991 (COMMENCEMENT OF OPERATIONS) TO
SEPTEMBER 30, 1991.
F FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
GOVERNMENT SECURITIES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16.Selected Per-Share Data and
Ratios

17.Years
ended 1995A 1994A 1993A 1992B 1991C 1990 1989C 1988 1987C 1986C
September 30 ,F C C

18.Net asset
value, $ 9.33 $ 10.8 $ 10.5 $ 10.3 $ 9.64 $ 9.61 $ 9.27 $ 9.52 $ 10.2 $ 9.80
beginning 0 70 00 00 0 0 0 0 80 0
of period

19.Income
from .625 .626 .672 .556 .801 .832 .784 .839 .855 .905
Investment
Operations
Net investment
income

20. Net
realized .564 (1.22 .627 .198 .660 .030 .340 (.250 (.760) .480
and 5) )
unrealized gain
(loss)

21. Total
from 1.189 (.599) 1.299 .754 1.461 .862 1.124 .589 .095 1.385
investment
operations

22.Less
Distributions (.609) (.631) (.679) (.554) (.801) (.832 (.784) (.839 (.855) (.905)
From net ) )
investment income

23. From net -- (.310) (.250) -- -- -- -- -- -- --
realized gain

24. In excess
of net (.020) -- -- -- -- -- -- -- -- --
realized gain

25. Total (.629) (.941) (.929) (.554) (.801) (.832 (.784) (.839 (.855) (.905)
distributions ) )

26.Net asset
value, $ 9.89 $ 9.33 $ 10.8 $ 10.5 $ 10.3 $ 9.64 $ 9.61 $ 9.27 $ 9.52 $ 10.2
end of period 0 0 70 00 00 0 0 0 0 80

27.Total
return D 13.21 (5.81) 13.18 7.65 15.96 9.53 12.62 6.36 1.06 14.62
% % % % % % % % % %

28.Net
assets, end $ 897 $ 614 $ 729 $ 582 $ 522 $ 469 $ 560 $ 568 $ 683 $ 752
of period
(In millions)

29.Ratio of
expenses .71% .69% .69% .70% .70% .66% .73% .79% .87% .84%
to average
net assets

30.Ratio of
net 6.36 6.26 6.40 7.31 8.23 8.84 8.29 8.87 8.68 8.72
investment
income % % % %E % % % % % %
to average
net assets

31.Portfolio
turnover 391% 402% 323% 219% 257% 302% 312% 283% 253% 138%
rate

</TABLE>

A YEAR ENDED SEPTEMBER 30
B NINE MONTHS ENDED SEPTEMBER 30, 1992
C YEAR ENDED DECEMBER 31
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
E ANNUALIZED
F EFFECTIVE OCTOBER 1, 1993 THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Each fund's fiscal year runs from October 1 through September 30. The
tables below show each fund's performance over past fiscal years compared
to two measures: a comparative index (Salomon Brothers 1 to 5 Year Treasury
Index for Short-Intermediate Government and Salomon Brothers
Treasury/Agency Index for Government Securities) and inflation (CPI). The
charts on page compare each fund's calendar- year performance .
SHORT-INTERMEDIATE GOVERNMENT
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995

Average 9.15 5.29
annual % % A
total return

Cumulative 9.15 23.23
total return % % A

Salomon 9.26 n/a
Brothers 1 to %
5 Year
Treasury Index
(average
annual)

Consumer 2.54 2.85
Price Index % % B
(average
annual)

Consumer 2.54 12.15
Price Index % %B
(cumulative)

A FROM SEPTEMBER 13, 1991
B THE CPI RETURNS BEGIN ON THE MONTH END CLOSEST TO THE FUNDS START DATE.
GOVERNMENT SECURITIES
Fiscal periods Pas Past Past
ended t 1 5 10
September 30, yea year year
1995 r s s

Average 13.21 9.71 9.37
annual % %
total return

Cumulative 13.21 58.91 144.82
total return % %

Salomon 13.56 9.56 9.68
Brothers % %
Treasury/Agen
cy Index
(average
annual)

Salomon 13.56 57.88 151.99
Brothers % %
Treasury/Agen
cy Index
(cumulative)

Consumer 2.54 2.91 3.53
Price Index % %
(average
annual)

Consumer 2.54 15.45 41.46
Price Index % %
(cumulative)

EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to sharehol ders .
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. governme nt .
SHORT-INTERMEDIATE GOVERNMENT
Calendar year total returns 1992 1993 1994
Short-Intermediate Government 4.71
% 5.28% -1.38%
Salomon Bros. 1-5 Year Treasury Index
6.75% 6.89% -0.79%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: 4.71
Row: 8, Col: 2, Value: 6.75
Row: 9, Col: 1, Value: 5.28
Row: 9, Col: 2, Value: 6.89
Row: 10, Col: 1, Value: -1.38
Row: 10, Col: 2, Value: -0.79
(large solid box) Short-Intermediat
e

Government
(large hollow box) Salomon Bros.1-5

Year Treasury

GOVERNMENT SECURITIES
Calendar year total returns 1985 1986 1987 1988 1989 1990 1991 1992 1993
1994
Government Securities 17.74% 14.62% 1.06% 6.36% 12.62% 9.53% 15.96% 7.97%
12.3
2% -5.21%
Salomon Bros. Treasury/Agency Index 20.41% 15.51% 2.14% 7.10% 14.24% 8.78%
15.3
3% 7.24% 10.74% -3.40%
Percentage (%)
Row: 1, Col: 1, Value: 17.74
Row: 1, Col: 2, Value: 20.41
Row: 2, Col: 1, Value: 14.62
Row: 2, Col: 2, Value: 15.51
Row: 3, Col: 1, Value: 1.06
Row: 3, Col: 2, Value: 2.14
Row: 4, Col: 1, Value: 6.359999999999999
Row: 4, Col: 2, Value: 7.1
Row: 5, Col: 1, Value: 12.62
Row: 5, Col: 2, Value: 14.24
Row: 6, Col: 1, Value: 9.529999999999999
Row: 6, Col: 2, Value: 8.779999999999999
Row: 7, Col: 1, Value: 15.96
Row: 7, Col: 2, Value: 15.33
Row: 8, Col: 1, Value: 7.970000000000001
Row: 8, Col: 2, Value: 7.24
Row: 9, Col: 1, Value: 12.32
Row: 9, Col: 2, Value: 10.74
Row: 10, Col: 1, Value: -5.21
Row: 10, Col: 2, Value: -3.4
(large solid box) Governmen
t Securities
(large hollow box) Salomon
Bros.
Treasury/A
gency

The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms,
Short-Intermediate Government Fund is currently a diversified fund of
Fidelity Charles Street Trust, an open-end management investment company
organized as a Massachusetts business trust on July 7, 1981. Government
Securities Fund is currently a non-diversified open-end management
investment company organized as a Massachusetts business trust on September
20, 1991. There is a remote possibility that one fund might become liable
for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about t he proposals to be voted on. Shareholders of
Government Securities fund are entitled to one vote for each share they
own; however, for shareholders of Short-Intermediate Government Fund, the
number of votes they are entitled to is based upon the dollar value of
their investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs.
Curtis Hollingsworth is manager and Vice President of Fidelity
Short-Intermediate Government,which he has managed since October 1991. Mr.
Hollingsworth also manages Institutional Short-Intermediate Government,
Spartan Limited Maturity Government, and Spartan Short-Intermediate
Government. Previously, he managed Government securities, Advisor
Government Investment, and Spartan Long-Term Government. Mr. Hollingsworth
joined Fidelity in 1983.
Robert Ives is manager of Government Securities, which he has managed since
February 1995. Mr. Ives also manages Spartan Government Income, Spartan
Long-Term Government, Advisor Government Investment, and Advisor
Annuity Government Investment. Previously he managed Ginnie-Mae, Spartan
Ginnie Mae, and Mortgage Securities. Mr. Ives joined Fidelity in 1991,
after receiving an M.B.A. from the University of Chicago. Previously, Mr.
Ives was a consultant to the Air Force for MITRE Corp. and an engineer at
Bell Labs.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR. Members of the Edward
C. Johnson 3d family are the predominant owners of a class of shares of
common stock representing approximately 49% of the voting power of FMR
Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a
company is presumed where one individual or group of individuals owns more
than 25% of the voting stock of that company; therefore, the Johnson family
may be deemed under the 1940 Act to form a controlling group with respect
to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SHORT-INTERMEDIATE GOVERNMENT FUND seeks as high a level of current income
as is consistent with preservation of capital. FMR normally invests at
least 65% of the fund's total assets in U.S. government securities whose
principal and interest payments are fully guaranteed by the U.S.
government. Although the fund can invest in securities of any
maturity , the fund maintains a dollar-weighted average maturity of two
to five years. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be substantially
shorter than its stated final maturity. As of September 30, 1995, the
fund's dollar weighted average maturity was 2.6 years.
GOVERNMENT SECURITIES FUND seeks as high a level of current income as is
consistent with preservation of principal. FMR normally invests at least
65% of the fund's total assets in securities issued or guaranteed by the
U.S. government or its agencies, or instrumentalities. The fund invests so
that the interest from its security holdings is free from state and local
taxes. Although the fund can invest in securities of any maturity. FMR
seeks to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between five and twelve
years. As of September 30, 1995, the funds dollar weighted average maturity
was 8.7 years.
EACH FUND intends to invest exclusively in U.S. government securities, or
in instruments that are backed by or related to, government securities.
Both funds may also invest in futures contracts and other
derivatives to adjust their investment exposure. Short-Intermediate
Government Fund limits its average maturity to between two and five years
and invests in securities backed by the full faith and credit of the U.S.
government. Government Securities Fund generally invests in a broader
range of government securities and maintains a longer average maturity.
The total return from a bond is a combination of income and price gains or
losses. While income is the most important component of bond returns over
time, the fund's emphasis on income does not mean that the fund invests
only in the highest-yielding bonds available, or that it can avoid risks to
principal. In selecting investments for the fund, FMR considers bond's
income potential together with its potential for price gains or losses. FMR
focuses on assembling a portfolio of income-producing securities that it
believes will provide the best tradeoff between risk and return within the
range of securities that are eligible investments for the fund.
Each fund's yield and share price change daily and are based on changes in
interest rates, market conditions, other economic and political news, and
on the quality and maturity of their investments. In general, bond prices
rise when interest rates fall, and vice versa. This effect is usually more
pronounced for longer-term securities. FMR may use various investment
techniques to hedge a portion of the funds' risks, but there is no
guarantee that these strategies will work as intended. When you sell your
shares of the funds, they may be worth more or less than what you paid for
them. It is important to note that neither the funds nor their yields are
guaranteed by the U.S. government.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
investment-grade money market or short-term debt instruments for temporary,
defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about the funds' investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports which are sent to shareholders twice a year. For a
free SAI or financial report, call 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds .
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, and other
entities. These obligations may carry fixed, variable, or floating interest
rates.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
ASSET-BACKED SECURITIES represent interests in pools of lower-rated debt
securities, or consumer loans. The value of these securities may be
significantly affected by changes in the market's perception of the issuers
and the creditworthiness of the parties involved.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized
mortgage obligations and stripped mortgage-backed securities. Mortgage
securities may be issued by the U.S. government or by private entities. For
example, Ginnie Maes are interests in pools of mortgage loans insured or
guaranteed by a U.S. government agency. Because mortgage securities pay
both interest and principal as their underlying mortgages are paid off,
they are subject to prepayment risk. This is especially true for stripped
securities. Also, the value of a mortgage security may be significantly
affected by changes in interest rates. Some mortgage securities may have a
structure that makes their reaction to interest rates and other factors
difficult to predict, making their value highly volatile.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts, entering into swap agreements, and purchasing
indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
ILLIQUID SECURITIES. Some investments may be determined by FMR, under the
supervision of the Board of Trustees, to be illiquid, which means that they
may be difficult to sell promptly at an acceptable price. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SHORT-INTERMEDIATE GOVERNMENT FUND seeks as high a level of current income
as is consistent with preservation of capital.
GOVERNMENT SECURITIES FUND seeks a high level of current income, consistent
with preservation of principal. The fund invests in securities issued by
the U.S. government or issued by U.S. government agencies or
instrumentalities, and in certain options and futures contracts. The fund
limits its security investments to those U.S. government securities and
interests in U.S. government securities whose interest is exempt from state
and local income tax when held directly by taxpayers.
EACH FUND may borrow for temporary or emergency purposes, but not in an
amount exceeding 33 % of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. Each fund also pays OTHER EXPENSES, which are explained
at right.
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .37%, and it drops as
total assets under management increase.
For September 1995, the group fee rate was .1493%. Each fund's
individual fun d fee rate is .30%. The total management fee rate for
fiscal 1995 was .45% for Short-Intermediate Government and .45% for
Government Securities.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In
fisca l 19 95, Short-Intermediate Government and Government Securities
paid FSC fees equal to 0.3% and 0.2%, re spectively, of average net
assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1995, the portfolio tu rnover rates for Short-Intermediate
Government and Government Securities were 266 % and 391 %,
respe ctively. These rates vary from year to year. High turnover
rates increase transaction costs and may increase taxable capital gains.
FMR considers these effects when evaluating the anticipated benefits of
short-term investing.

FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $ 335 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
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WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. Refer to the product material for details.

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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.

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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

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In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.

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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.

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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS

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Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
except retirement $100,000.
(small solid bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.

Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.

Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.

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Check (check_graphic) All account types (small solid bullet) Minimum check: $500.
except retirement (small solid bullet) All account owners must sign
a signature card to receive a
checkbook.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.

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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.

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FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.

</TABLE>

A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains to shareholders each year. Income dividends are declared
daily and paid monthly. Capital gains are normally distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.

Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of the
date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
Mutual fund dividends from U.S. government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
capital gain distribution from its NAV, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE
of $12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $60.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for that
year. The fee, which is payable to the transfer agent, is designed to
offset in part the relatively higher costs of servicing smaller accounts.
The fee will not be deducted from retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if total
assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver
is determined by aggregating Fidelity mutual fund accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
A FUND OF FIDELITY CHARLES STREET TRUST
FIDELITY GOVERNMENT SECURITIES FUND
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 20, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated November 20, 1995). Please retain this
document for future reference. The funds' financial statements and
financial highlights, included in the Annual Report for the fiscal year
ended September 30, 1995, are incorporated herein by reference. To obtain
an additional copy of the Prospectus or the Annual Reports, please call
Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Portfolio Transactions

Valuation of Portfolio Securities

Performance

Additional Purchase and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts 19

Distribution and Service Plans

Contracts w ith FMR Affiliates

Description of the Trusts

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company (FSC)
FSG/GOV-ptb-1195
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below the
investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government, or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this limit
does not apply to purchases of debt securities or to repurchase
agreements).
(9) The fund may, not withstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental objectives, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 7.5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset -backed securities or investment companies are not considered
"business enterprises."
For the funds' limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page
.
INVESTMENT LIMITATIONS OF FIDELITY GOVERNMENT SECURITIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities;
(2) make short sales of securities; provided, however, that the fund may
purchase or sell futures contracts, and may make initial and variation
margin payments in connection with purchases or sales of futures contracts
or of options on futures contracts;
(3) purchase any securities on margin except for such short-term credits as
are necessary for the clearance of transactions; provided, however, that
the fund may purchase or sell futures contracts, and may make initial and
variation margin payments in connection with purchases or sales of futures
contracts or of options on futures contracts;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of decline in
net assets will be reduced within 3 days to the extent necessary to comply
with the 33 1/3% limitation;
(5) underwrite any issue of securities, except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 (i) in the disposition of restricted securities or (ii) in
connection with the purchase of government securities directly from the
issuer in accordance with the fund's investment objective, policies, and
limitations;
(6) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States or its agencies or instrumentalities, or commitments to acquire such
securities on a "when-issued" basis) if, as a result thereof, more than 25%
of the fund's total assets (taken at current value) would be invested in
the securities of one or more issuers having their principal business
activities in the same industry;
(7) purchase or sell real estate, but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein;
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities);
(9) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limit
does not apply to purchases of debt securities or to repurchase agreements;
(10) purchase securities of other investment companies except in the open
market where no commission except the ordinary broker's commission is paid,
or as a part of a merger or consolidation, and in no event may investments
in such securities exceed 10% of the total assets of the fund. It may not
purchase or retain securities issued by other open-end investment
companies;
(11) purchase warrants, valued at the lower of cost or market, in excess of
5% of the value of the fund's net assets;
(12) invest in oil, gas or other mineral exploration or development
programs;
(13) invest in companies for the purpose of exercising control or
management.
Investment Limitation (4) is construed in conformity with the 1940 Act,
and, accordingly "3 days" means three days, exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(v) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(vi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the purposes of limitation (v), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset -backed securities or investment companies are not considered
"business enterprises."
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
It is Government Securities Fund's position that proprietary strips, such
as CATS and TIGRs, are government securities. However, the fund has been
advised that the Staff of the SEC's Division of Investment Management does
not consider these to be government securities, as defined under the
Investment Company Act of 1940. Accordingly, for purposes of Government
Securities Fund's investment limitation (6), the fund has defined the
following two industry groups: (1) Custodian banks for proprietary strips
that are direct obligations backed by the full faith and credit of the U.S.
government; and (2) Custodian banks for proprietary strips that are
indirect obligations, not backed by the full faith and credit of the U.S.
government. The fund will continue its efforts to secure a favorable
opinion from the SEC Staff that proprietary strips are government
securities. If the fund concludes that, under applicable legal principles,
any of these securities are government securities, it will exclude these
securities from Government Securities Fund's investment limitations (6).
Proprietary strips are considered government securities for the purposes of
Government Securities Fund's investment limitation (i) above.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. Each fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
funds may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. Each fund will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. Each fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Bond Buyer Municipal Bond Index. Futures can
be held until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
1.LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, a fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than
50%(Short-Intermediate Government Fund) and 25% (Government Securities
Fund) of the fund's total assets would be hedged with futures and options
under normal conditions; (b) purchase futures contracts or write put
options if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets; (c) purchase call options if, as a result,
the current value of option premiums for call options purchased by the fund
would exceed 5% of the fund's total assets; or (d) with respect to
Short-Intermediate Government Fund only, write call options on securities
if, as a result, the aggregate value of the securities underlying the calls
would exceed 25% of the fund's net assets. These limitations do not apply
to options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, each fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. Each fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by Short-Intermediate Government Fund to
be illiquid include repurchase agreements not entitling the holder to
payment of principal and interest within seven days, non-government
stripped fixed-rate mortgage-backed securities, and over-the-counter
options. Also, FMR may determine some government-stripped fixed-rate
mortgage-backed securities to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
Investments currently considered by Government Securities Fund to be
illiquid include repurchase agreements not entitling the holder to payment
of principal and interest within seven days and over-the-counter options.
However, with respect to over-the-counter options a fund writes, all or a
portion of the value of the underlying instrument may be illiquid depending
on the assets held to cover the option and the nature and terms of any
agreement the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, or other
financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. A mortgage
indexed security, for example, could be synthesized to replicate the
performance of mortgage securities and the characteristics of direct
ownership.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are indexed,
and may also be influenced by interest rate changes. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, each fund has received permission to lend money
to, and borrow money from, other funds advised by FMR or its affiliates.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice. A
fund will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs. The funds do not
currently intend to participate in the program as a lender.
MORTGAGE-BACKED SECURITIES. Each fund may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security is an obligation of the issuer backed by a mortgage or pool
of mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
funds may invest in them if FMR determines they are consistent with the
funds' investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incre mental amount which is unrelated
to the coupon rate or maturity of the purchased security. To protect the
fund from the risk that the original seller will not fulfill its
obligation, the securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with parties
whose creditworthiness has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. Each fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates, mortgage securities, corporate borrowing rates,
or other factors such as security prices or inflation rates. Swap
agreements can take many different forms and are known by a variety of
names. Each fund is not limited to any particular form of swap agreement if
FMR determines it is consistent with the fund's investment objective and
policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to pay fixed
rates in exchange for floating rates while holding fixed-rate bonds, the
swap would tend to decrease the fund's exposure to long-term interest
rates. Caps and floors have an effect similar to buying or writing options.
Depending on how they are used, swap agreements may increase or decrease
the overall volatility of a fund's investments and its share price and
yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, or other factors that determine the
amounts of payments due to and from a fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when
due. In addition, if the counterparty's creditworthiness declined, the
value of a swap agreement would be likely to decline, potentially resulting
in losses. Each fund expects to be able to eliminate its exposure under
swap agreements either by assignment or other disposition, or by entering
into an offsetting swap agreement with the same party or a similarly
creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest
rates change. In calculating its dividends, a fund takes into account as
income a portion of the difference between a zero coupon bond's purchase
price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government, a government agency, or a
corporation in zero coupon form.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to: the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the pur chasers or sellers of securities. In addition,
such broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the
extent possible consistent with execution considerations) based upon the
quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements , the Board of Trustees
has authorized FBSI to execute portfolio transactions on national
securities exchanges in accordance with approved procedures and applicable
SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable
in relation to the benefits to the funds.
For th e fiscal periods ended September 30, 1995 and 1994, the
portfolio turnover rates were 266 % and 184%, respectively for
Short-Intermediate Government and 391 % and 402%, respectively for
Government Securities. Because a high turnover rate increases transaction
costs and may increase taxable gains, FMR carefully weighs the anticipated
benefits of short-term investing against these consequences. An increased
turnover rate is due to a greater volume of shareholder purchase orders,
short-term interest rate volatility and other special market conditions.
For fiscal 1995, 1994, and 1993, Short-Intermediate
Government and Government Securities paid no brokerage commissions.
During fiscal 1995, the funds paid no fees to brokerage firms that
provided research services.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Each fund's net asset value per share is determined by FSC under procedures
established by the Board of Trustees. Portfolio securities are valued
primarily on the basis of valuations furnished by a pricing service which
uses both dealer-supplied valuations and electronic data processing
techniques that take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data, without exclusive reliance on quoted prices or exchange or
over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Use of the pricing service
has been approved by the Board of Trustees. There are a number of pricing
services available, and the Trustees, or officers acting on behalf of the
Trustees, on the basis of ongoing evaluation of these services, may use
other pricing services or discontinue the use of any pricing service in
whole or in part.
Securities not valued by the pricing service and for which quotations are
readily available are valued at market values determined on the basis of
their latest available bid prices as furnished by recognized dealers in
such securities. Futures contracts and options are valued on the basis of
market quotations, if available. Securities and other assets for which
quotations or pricing service valuations are not readily available are
valued at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing
the fund's interest income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive distributions
during the period, dividing this figure by the fund's net asset value (NAV)
at the end of the period, and annualizing the result (assuming compounding
of income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. In general, interest income
is reduced with respect to bonds trading at a premium over their par value
by subtracting a portion of the premium from income on a daily basis, and
is increased with respect to bonds trading at a discount by adding a
portion of the discount to daily income. Capital gains and losses generally
are excluded from the calculation.
Income calculated for the purposes of calculating a fund's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
Each fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment to equal the fund's tax-free yield. For
funds such as these funds, earning interest free from state (and sometimes
local) taxes in most states, tax-equivalent yields may be calculated by
dividing the fund's yield by the result of one minus a specified tax
rate.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compou nded bas is in ten years.
While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a fund's performance
is not constant over time, but changes from year to year, and that average
annual to tal retu rns represent averaged figures as opposed to the
actual year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following tables show each fund's yields,
tax-equivalent yields, and total returns for periods end e d September
30, 1995.
Average Annual Total Returns Cumulative Total Returns

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Thirty-Day One Life of One Life of
Yield Year Fund* Year Fund*

Short-Intermediate 5.13% 9.15 % 5.29 % 9.15 % 23.23 %
Government

</TABLE>

* From September 13, 1991 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during the period,
the fund's total return would have been lower.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Thirty-Da One Five One Five
y Year Years Ten Year Years Ten
Yield Years Years

Government
Securities 5.67% 13.21 % 9.71 % 9.37 % 13.21 % 58.91 % 144.82 %

</TABLE>

The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500),
the Dow Jones Industrial Average (DJIA), and the cost of living (measured
by the Consumer Price Index, or CPI) over the same period. The CPI
information is as of the month end closest to the initial investment date
for each fund. The S&P 500 and DJIA comparisons are provided to show how
each fund's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater growth
potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than a fixed-income investment such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
SHORT-INTERMEDIATE GOVERNMENT FUND During the period from September 13,
1991 (commencement of operations) to September 30, 1995, a hypoth etical
$1 0,000 investment in Short-Intermediate Government would have grown to
$ 12,323 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and bond prices and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in the fund today.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Short-Intermediate Government Fund INDICES

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1995 $ 9,490 $ 2,751 $ 82 $ 12,323 $ 16,933 $ 17,824 $ 11,215

1994 $ 9,290 $ 1,919 $ 81 $ 11,290 $ 13,050 $ 13,945 $ 10,937

1993 $ 9,960 $ 1,379 $ 86 $ 11,425 $ 12,587 $ 12,555 $ 10,622

1992 $ 10,140 $ 704 $ 10 $ 10,854 $ 11,137 $ 11,220 $ 10,344

1991* $ 10,010 $ 27 $ 0 $ 10,037 $ 10,028 $ 10,046 $ 10,044

</TABLE>

* From September 13, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on September
13, 1991 the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$12,907. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the per iod would have amounted to $ 2,476 for
dividends and $ 80 for capital gains distributions. Tax consequences
of different investments have not been factored into the above figures.
GOVERNMENT SECURITIES FUND During the ten year period ended September 30,
1995, a hypotheti cal $10, 000 investment in Government Securities
would have grown to $ 24,482, assuming all distributions were
reinvested. This was a period of fluctuating interest rates and bond prices
and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in the fund today.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Government Securities Fund INDICES

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1995 $ 10,521 $ 12,799 $ 1,162 $ 24,482 $ 44,281 $ 49,872 $ 14,146

1994 $ 9,926 $ 10,650 $ 1,048 $ 21,624 $ 34,128 $ 39,019 $ 13,795

1993 $ 11,564 $ 10,867 $ 527 $ 22,958 $ 32,915 $ 35,129 $ 13,398

1992 $ 11,170 $ 9,114 $ 0 $ 20,284 $ 29,126 $ 31,393 $ 13,047

1991 $ 10,553 $ 7,253 $ 0 $ 17,806 $ 26,225 $ 28,110 $ 12,669

1990 $ 9,936 $ 5,470 $ 0 $ 15,406 $ 19,992 $ 22,060 $ 12,253

1989 $ 10,085 $ 4,246 $ 0 $ 14,331 $ 22,029 $ 23,308 $ 11,542

1988 $ 10,000 $ 3,082 $ 0 $ 13,082 $ 16,564 $ 17,626 $ 11,062

1987 $ 9,936 $ 1,935 $ 0 $ 11,871 $ 18,900 $ 20,893 $ 10,619

1986 $ 10,809 $ 1,066 $ 0 $ 11,875 $ 13,175 $ 13,802 $ 10,175

</TABLE>

Explanatory Notes: With an initial investment of $10,000 made on September
30, 1985, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their ca sh value at the time they were reinvested), amounted to
$23,866. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $8,227 for dividends
and $617 for capital gains d istributions. Tax consequences of different
investments have not been factored into the above figures.
PERFORMANCE COMPARISONS A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greate r stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include current economic, market, and political
conditions; materials that describe general principles of investing, such
as asset allocation, diversification, risk tolerance, and goal setting;
questionnaires designed to help create a personal financial profile;
worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/all
taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 757 taxable money market funds. The Bond Fund Report
AverageS(trademark)/all taxable, which is reported in the BOND FUND
REPORT(registered trademark), covers over 554 taxable bond funds. When
evaluating comparisons to money market funds, investors should consider the
relevant differences in investment objectives and policies. Specifically,
money market funds invest in short-term, high-quality instruments and seek
to maintain a stable $1.00 share price. Bond funds, however, invest in
longer-term instruments and their share prices change daily in response to
a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations ;
saving for college or other goals; charitabl e givin g; and the
Fidelity credit card. In addition, Fidelity may quote or reprint financial
or business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of September 30, 1995, FMR advi sed over $26.5 billion in tax-free
fund assets, $77 billion in money market fund assets, $226 billion in
equity fund assets, $55 billion in international fund assets, and $22
billion in Spartan fund assets. The funds may reference the growth and
variety of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV)
is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1995:
New Year's Day (observed), President's Day, Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time. In addition,
the fund will not process wire purchases and redemptions on days when the
Federal Reserve Wire System is closed .
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities
and Exchange Commission (SEC). To the extent that portfolio securities
are traded in other markets on days when the NYSE is closed , the fund's
NAV may be affected on days when investors do not have access to the fund
to purchase or redeem shares. In addition, trading in some of the fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service can not deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your distributions at
the then current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fun d's income is primarily derived from
interest, dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation. For Short-Intermediate Government Fund
Mortgage security paydown gains (losses) are generally taxable as ordinary
income and, therefore, increase (decrease) taxable dividend distributions.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
A s o f September 30, 1995, Short-Intermediate Government Fund had
a capital loss carryforward aggregating approximately $7,378,000. This loss
carryforward of which $320,000, $1,404,000, and $5,654,000 will expire on
September 30, 2001, 2002, and 2003 respectively, is available to offset
future capital gains.
As of September 30, 1995, Government Securities F und ha d a
capi tal loss carryforward aggregating approximately $ 17,573,000 .
This loss carryforward, which will expire on September 30,
2003 is available to offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
government securities in each fund's portfolio. Because the income earned
on most U.S. government securities in which each fund invests is exempt
from state and local income taxes, the portion of your dividends from each
fund attributable to these securities will also be free from income taxes.
The exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. government securities whether such securities are
held directly or through a fund.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts and options are included in this 30%
calculation, which may limit a fund's investments in such instruments.
Short-Intermediate Government fund is treated as a separate entity from the
other funds of Fidelity Charles Street Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member,
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 control of a
company is presumed where one individual or group of individuals owns more
than 25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the shareholders'
voting agreement, members of the Johnson family may be deemed, under the
1940 Act, to form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed prior to Government Securities Fund's conversion from a Nebraska
limited partnership to a Massachusetts business trust served the Nebraska
limited partnership in identical capacities. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. The
business address of each Trustee and officer who is an "interested person"
(as defined in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), TX, Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and she previously
served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member of the President's Advisory
Council of The University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc, and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling,
Inc.(1985-1995). In addition, he serves as a Trustee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield and Society for the
Preservation of New England Antiquities, and as an Overseer of the Museum
of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR.(56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
CURTIS HOLLINGSWORTH (38),is manager and Vice President of Fidelity
Short-Intermediate Government, which he has managed since October 1991. Mr.
Hollingsworth also manages Institutional Short-Intermediate Government,
Spartan Limited Maturity Government, Spartan Long-Term Government Bond, and
Spartan Short-Intermediate Government. Previously, he managed Government
Securities and Advisor Government Investment. Mr. Hollingsworth joined
Fidelity in 1983.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
T he following table sets forth information describing the compensation
of each current trustee of each fund for his or her services as trustee for
the fiscal year ended September 30, 1995.
COMPENSATION TABLE
Aggregate Compensation

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams

Short-
Interm $ 0 $ 67 $ 65 $ 82 $ 0 $ 67 $ 68 $ 0 $ 67 $ 67 $ 67 $ 66
ediate
Government

Govern
ment $ 0 $ 338 $ 328 $ 415 $ 0 $ 338 $ 344 $ 0 $ 339 $ 338 $ 338 $ 334
Securities

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Benefits Upon Compensation from
Accrued as Part of Retirement from the the Fund
Fund Expenses from Fund Complex* Complex*
the Fund Complex*

J. Gary Burkhead** $ 0 $ 0 $ 0

Ralph F. Cox 5,200 52,000 125,000

Phyllis Burke Davis 5,200 52,000 122,000

Richard J. Flynn 0 52,000 154,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 123,500

Donald J. Kirk 5,200 52,000 125,000

Peter S. Lynch** 0 0 0

Gerald C. McDonough 5,200 52,000 125,000

Edward H. Malone 5,200 44,200 128,000

Marvin L. Mann 5,200 52,000 125,000

Thomas R. Williams 5,200 52,000 126,500

</TABLE>

* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments are not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of September 30, 1995, the Trustees and officers of each fund
ow ned, in the aggregate, less than 1 % of each fund's total
outstanding shares. Also, as of that date Homeland Bank, 229 East Park
Avenue, P.O. Box 5300, Waterloo, IA, was known by the fund to own of record
or beneficially approximately 8.5% of Short-Intermediate Government's total
outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, the funds pay all of their expenses, without limitation, that are not
assumed by those parties. Each fund pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the funds will pay for typesetting,
printing and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, Government Securities Fund
has entered into revised transfer agent agreement with FSC pursuant to
which FSC bears the cost of providing these services to existing
shareholders. Pursuant to Fidelity Charles Street Trust's transfer agent
agreement with FSC, FSC bears the cost of providing these services to
existing shareholders. Other expenses paid by the funds include interest,
taxes, brokerage commissions, the funds' proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal and state securities laws. Each fund is
also liable for such nonrecurring expenses as may arise, including costs of
any litigation to which the fund may be a party and any obligation it may
have to indemnify the trusts' officers and Trustees with respect to
litigation.
FMR is Short-Intermediate Government Fund's manager pursuant to a
management contract dated October 1, 1994 that was approved by shareholders
on September 21, 1994. FMR is Government Securities Fund's manager pursuant
to a management contract dated December 31, 1991 that was approved by
Fidelity Government Securities Fund (a limited partnership) on December 31,
1991, as the then sole shareholder of the fund pursuant to an Agreement and
Plan of Reorganization approved by public shareholders of the limited
partnership on November 13, 1991. (The terms of the fund's current contract
with FMR duplicate those of its previous contract.)
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 351 billion of group net
assets - the a pproximate level for September 1995 - was .1493%, which is
the weighted average of the respective fee rates for each level of group
net assets up to $351 billi on.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

0 - $3 billion .3700% $ 0.5 billion .3700%

3 - 6 .3400 25 .2664

6 - 9 .3100 50 .2188

9 - 12 .2800 75 .1986

12 - 15 .2500 100 .1869

15 - 18 .2200 125 .1793

18 - 21 .2000 150 .1736

21 - 24 .1900 175 .1695

24 - 30 .1800 200 .1658

30 - 36 .1750 225 .1629

36 - 42 .1700 250 .1604

42 - 48 .1650 275 .1583

48 - 66 .1600 300 .1565

66 - 84 .1550 325 .1548

84 - 120 .1500 350 .1533

120 - 174 .1450 400 .1507

174 - 228 .1400

228 - 282 .1375

282 - 336 .1350

Over 336 .1325

Prior to October 1, 1994, Short-Intermediate Government Fund's group fee
rate was based on a schedule with breakpoints ending at .1400% for average
group assets in excess of $174 billion. The group fee rate breakpoints
shown above for average group assets in excess of $120 billion and under
$228 billion were voluntarily adopted by FMR on January 1, 1992. The
additional breakpoints shown above for average group assets in excess of
$228 billion were voluntarily adopted by FMR on November 1, 1993. The
fund's current management contract reflects these extensions of the group
fee rate schedule.
Under Government Securities Fund's current management contract with FMR,
the group fee rate is based on a schedule with breakpoints ending at .1500%
for average group assets in excess of $84 billion. The group fee rate
breakpoints shown above for average group assets in excess of $120 billion
and under $228 billion were voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints, pending shareholder
approval of new management contracts reflecting the revised schedule. The
revised group fee rate schedule provides for lower management fee rates as
FMR's assets under management increase. The revised group fee rate schedule
is identical to the above schedule for average group assets under $156
billion. For average group assets in excess of $156 billion, the group fee
rate schedule voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

120 - $156 billion .1450% $ 150 billion .1736%

156 - 192 .1400 175 .1690

192 - 228 .1350 200 .1652

228 - 264 .1300 225 .1618

264 - 300 .1275 250 .1587

300 - 336 .1250 275 .1560

336 - 372 .1225 300 .1536

Over 372 .1200 325 .1514

350 .1494

375 .1476

400 .1459

The individual fund fee rate is .30%. Based on the average group net
assets of the funds advised by FMR for September 1995, the annual
management fee fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate

. 1493 % + .30% = . 4493 %

One-twelfth of this annual management fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
The table below shows the management fees paid to FMR by each fund for the
last three fiscal years:

<TABLE>
<CAPTION>
<S> <C> <C>
Years Ended
Short-Intermediate Government Fund Management Fees as a
September 30 Management Fees % of Average Net Assets

1995 $ 704,636 .45 %

1994 $ 676,355 .46 %

1993 $ 783,194 .47 %

Years Ended
Government Securities Fund Management Fees as a
September 30 Management Fees % of Average Net Assets

1995 $ 3,601,721 .45 %

1994 $ 3,257,871 .46 %

1993 $ 2,881,668 .47 %

</TABLE>

FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and repayment of the
reimbursement by each fund will lower its total returns and yiel d.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table below
identifies the funds in reimbursement; the levels of and periods for such
reimbursement; the amount of management fees incurred under each contract
before reimbursement; and the dollar amount reimbursed by FMR, if any, for
each period.
SHORT-INTERMEDIATE GOVERNMENT FUND
From To Expense Limitation

June 1, 1993 June 30, 1993 .70%

May 1, 1993 May 31, 1993 .65%

February 1, 1993 April 30, 1993 .60%

January 1, 1993 January 31, 1993 .50%

September 1, 1992 December 31, 1992 .40%

Fiscal Year Management Fee Amount of Reimbursement
Before Reimbursement

1995 $ 704,636 $ 0

1994 $ 676,355 $ 0

1993 $ 783,194 $ 486,551

To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
DISTRIBUTION AND SERVICE PLANS
The Truste es have approved Distribution and Service Plans on behalf
of the funds (the Plans) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the Rule). The Rule provides in substance that a
mutual fund may not engage directly or indirectly in financing any activity
that is primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on beha lf of the fund under the Rule.
The Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect payment by
the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR
is deemed to be indirect financing by the funds of the distribution of
their shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
Payments m ade by FMR to third parties during the fiscal year ended
September 30, 1995 amounted to $23,087 for Short-Intermediate Government
Fund, and $82,279 for Government Securities Fund.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a fund other than those made to FMR
under its management contract with the fund. To the extent that each Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of each f und, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
Short-Intermediate Government Fund's Plan was approved by shareholders on
September 16, 1992. Government Securities Fund's Plan was approved by
Fidelity Government Securities Fund (a limited partnership) on December 31,
1991, as the then sole shareholder of the fund pursuant to an Agreement and
Plan of Reorganization approved by public shareholders of the limited
partnership on November 13, 1991.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
FSC is transfer, dividend disbursing, and shareholder servicing agent
for each fund. FSC receives annual account fees and asset-based fees for
each retail account and certain institutional accounts based on account
size. In addition, the fees for retail accounts are subject to increase
based on postal rate changes. With respect to certain other institutional
retirement accounts, FSC r eceives annual account fees and asset based
fees based on fund type. FSC also collects small account fees from certain
accounts with balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional information,
and all other reports, notices, and statements to shareholders, with the
exception of proxy statements.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transfer Agent Fees

1993 1994 1995

Fidelity Short-Intermediate Government Fund $ 417,815 $ 445,354 $ 425,194

Fidelity Government Securities Fund $ 1,030,455 $ 1,275,823 $ 1,589,234

</TABLE>

FSC also performs the calculations necessary to determine each fund's
net asset value per share and dividends, and maintains each fund's
accounting records. The annual fee rates for these pricing and bookkeeping
services are based on each fund's average net assets, specifically, .04%
for the first $500 million of average net assets and .02% for average net
assets in excess of $500 million. The fee is limited to a minimum of
$45,000 and a maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Pricing and Bookkeeping Fees

1993 1994 1995

Fidelity Short-Intermediate Government Fund $ 80,316 $ 66,692 $ 62,672

Fidelity Government Securities Fund $ 230,028 $ 240,654 $ 261,630

</TABLE>

FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans.
For fiscal 1993, 1994, and 1995, the funds did not incur any securities
lending fees.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Short-Intermediate Government Fund is a fund
of Fidelity Charles Street Trust, an open-end management investment
company, organized as a Massachusetts business trust on July 7, 1981.
Currently, there are seven funds of Fidelity Charles Street Trust: Fidelity
Short-Intermediate Government Fund, Fidelity Asset Manager, Fidelity U.S.
Government Reserves, Fidelity Asset Manager: Growth, Fidelity Asset
Manager: Income, Spartan Investment Grade Bond Fund, and Spartan Short-Term
Income Fund. Fidelity Government Securities Fund, an open-end management
investment company, is organized as a Massachusetts business trust as of
September 20, 1991. The fund was originally organized as a limited
partnership in the State of Nebraska on August 25, 1978. On December 31,
1991, the limited partnership transferred all of its assets to the
Massachusetts business trust. The Declarations of Trust permit the Trustees
to create additional funds.
In the event that FMR ceases to be the investment adviser to a trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of each trust, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declarations of trust protect Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; the voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the heading "Shareholder
and Trustee Liability" above. Shareholders representing 10% or more of a
trust or fund may, as set forth in the Declarations of trust, call meetings
of a trust or fund for any purpose related to the trust or fund, as the
case may be, including, in the case of a meeting of an entire trust, the
purpose of voting on removal of one or more Trustees. Each trust or fund
may be terminated upon the sale of its assets to another open-end
management investment company, or upon liquidation and distribution of its
assets, if approved by vote of the holders of a majority of the fund, as
determined by the current value of each shareholder's investment in the
fund. If not so terminated, each trust or fund will continue indefinitely.
Each fund of Fidelity Charles Street Trust may invest all of its assets in
another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of the assets of each fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining
the investment policies of a fund or in deciding which securities are
purchased or sold by a fund. However, a fund may invest in obligations of
the custodian and may purchase securities from or sell securities to the
custodian. The Bank of New York and Chemical Bank, each
headquartered in New York, also may serve as a special purpose custodian of
certain assets in connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions
of those transactions were not influenced by existing or potential
custodial or other fund relationships.
SHORT-INTERMEDIATE GOVERNMENT FUND'S AUDITOR. Price Waterhouse LLP, 160
Federal Street, Boston, Massachusetts serves as the Fidelity Charles Street
trust's independent accountant. The auditor examines financial statements
for the fund and provides other audit, tax, and related services.
GOVERNMENT SECURITIES FUND'S AUDITOR. Coopers & Lybrand L.L.P., One Post
Office Square, Boston, Massachusetts serves as the fund's independent
accountant. The auditor examines financial statements for the fund and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended September 30, 1995 are included in each fund's Annual Report,
which are separate reports supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of years remaining to its maturity,
adding these calculations, and then dividing the total by the value of the
fund's portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to this
rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities and some asset-backed
securities, such as collateralized mortgage obligations, are determined on
a weighted average life basis, which is the average time for principal to
be repaid. For a mortgage security, this average time is calculated by
estimating the timing of principal payments including unscheduled
prepayments, during the life of the mortgage. The weighted average life
of these securities is likely to be substantially shorter than their stated
final maturity.
FIDELITY CHARLES STREET TRUST:
FIDELITY ASSET MANAGER

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Fund at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c .............................. Performance

4 a i............................. Charter

ii........................... The Fund at a Glance; Investment Principles and
Risks

b .............................. Investment Principles and Risks

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Fund at a Glance; Charter; Doing
Business with Fidelity

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. Cover Page; Charter

f .............................. Expenses

g i............................. Charter
.

ii............................ *
..

5A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... Charter

b ............................. Charter

c .............................. Transactions Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Cover Page; Charter

b .............................. Expenses; How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
THE FIDELITY
ASSET
MANAGER
FUNDS
To learn more about the funds and their investments, you can obtain a copy
of each fund's most recent financial report and portfolio listing, or a
copy of the Statement of Additional Information (SAI) dated November 20,
1995. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, call Fidelity
at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED
BY THE SECURITIES AND
EXCHANGE COMMISSION OR
ANY STATE SECURITIES
COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION
PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
FFM-pro-1195
This family of asset allocation funds offers three approaches to
diversifying your investment. Each fund seeks to achieve its individual
goal by investing in different mixes of stocks, bonds, and short-term
instruments of all types.

FIDELITY ASSET MANAGER: INCOME seeks high current income, but also
considers the potential for capital appreciation.
FIDELITY ASSET MANAGER(trademark) seeks high total return with reduced risk
over the long term.
FIDELITY ASSET MANAGER: GROWTH seeks to maximize total return over the long
term.
PROSPECTUS
NOVEMBER 20, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109
CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS THE FUNDS AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly operating
expenses.

FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.

PERFORMANCE How each fund has done over
time.

THE FUNDS IN DETAIL CHARTER How each fund is organized.

INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.

BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different ways to set up
your account, including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an account and
making additional investments.

HOW TO SELL SHARES Taking money out and
closing your account.

INVESTOR SERVICES Services to help you manage
your account.

SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES

TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.

EXCHANGE RESTRICTIONS

</TABLE>

KEY FACTS

THE FUNDS AT A GLANCE
STRATEGY: The funds diversify across stocks, bonds, and short-term
instruments, both here and abroad, to pursue specific goals. Each fund has
a neutral mix which represents the way the fund's investments will
generally be allocated over the long term. This mix will vary over
short-term periods as fund management gradually adjusts the fund's holdings
- - within defined ranges - based on the current outlook for the different
markets.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
WHO MAY WANT TO INVEST
Asset allocation funds are designed for investors who want to diversify
among domestic and foreign stocks, bonds, short-term instruments and other
types of securities, in one fund. If you are looking for a fund that can
invest in a wide range of security types within defined ranges, one of the
Asset Manager funds may be appropriate for you.
Because each fund owns different types of investments, its performance is
affected by a variety of factors. The value of each fund's investments and
the income they generate will vary from day to day, and generally reflect
interest rates, market conditions, and other company, political and
economic news. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations.
Performance also depends on FMR's skill in allocating assets. When you
sell your fund shares, they may be worth more or less than what you paid
for them.
ASSET MANAGER: INCOME
ASSET MANAGER: GROWTH
GOAL: High current income, and capital appreciation when
appropriate.
Neutral Mix
Stocks 20 %
(can range from
0- 35% )
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 30.0
Bonds 30 %
(can range from
20- 45 %)
Short-term 50 %
(can range from
20- 80 %)
With its emphasis on short-term instruments, Asset Manager: Income is the
most conservative fund in the family.
ASSET MANAGER
ASSET MANAGER: GROWTH
GOAL: High total return with reduced risk over the long term.
Neutral Mix
Stocks 40%
(can range from
10-60%)
Row: 1, Col: 1, Value: 20.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 40.0
Bonds 40%
(can range from
20-60%)
Short-term 20%
(can range from
0-70%)
With its more balanced approach, Asset Manager is the middle-of-the-road
member of the family.
ASSET MANAGER: GROWTH
ASSET MANAGER: GROWTH
GOAL: Maximum total return over the long term.
Neutral Mix
Stocks 65%
(can range from
0-100%)
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 65.0
Row: 1, Col: 3, Value: 30.0
Bonds 30%
(can range from
0-100%)
Short-term 5%
(can range from
0-100%)
With its emphasis on stocks, Asset Manager: Growth is the most aggressive
fund in the family.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these
fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2 , 500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, adjusted to
reflect current fees, and are calculated as a percentage of average net
assets. A portion of the brokerage commissions that Asset Manager:
Growth paid was used to reduce fund expenses . Including this
reduction, the total operating expenses presented in the table would have
been 1.02%.
ASSET MANAGER: INCOME
ASSET MANAGER: GROWTH
Management fee .50 %

12b-1 fee None

Other expenses .29 %

Total fund operating expenses .79 %

ASSET MANAGER
ASSET MANAGER: GROWTH
Management fee .72 %

12b-1 fee None

Other expenses .25 %

Total fund operating expenses .97 %

ASSET MANAGER: GROWTH
ASSET MANAGER: GROWTH
Management fee .72 %

12b-1 fee None

Other expenses .31 %

Total fund operating expenses 1.03
%

Asset Manager: $ 8 $ 25 $ 44 $ 98
Income

Asset Manager $ 10 $ 31 $ 54 $ 119

Asset Manager: $ 11 $ 33 $ 57 $ 126
Growth

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FMR has voluntarily agreed to temporarily limit Asset Manager: Income
and Asset Manager: Growth's operating expenses to .85% and 1.20%,
respectively, of their average net assets.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Report and have
been audited by Price Waterhouse LLP, independent accountants. Their
reports on the financial statements and financial highlights are included
in the Annual Reports. The financial statements and financial highlights
are incorporated by reference into (are legally a part of) the funds'
Statement of Additional Information.
FIDELITY ASSET MANAGER: INCOME

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1.Selected Per-Share Data and Ratios

2.Years ended September 30 1995 1994 B 1993 D

3.Net asset value, beginning of period $ 10.69 $ 11.07 $ 10.00

4.Income from Investment Operations

5. Net investment income .56 .45 .46

6. Net realized and unrealized gain (loss) on investments .68 (.29) 1.04

7. Total from investment operations 1.24 .16 1.50

8.Less Distributions

9. From net investment income (.47) (.47) (.43)

10. From net realized gain -- (.04) --

11. In excess of net realized gain -- (.03) --

12. Total distributions (.47) (.54) (.43)

13.Net asset value, end of period $ 11.46 $ 10.69 $ 11.07

14.Total return A 11.99% 1.46% 15.32%

15.Net assets, end of period (000 omitted) $ 566,079 $ 501,349 $ 199,237

16.Ratio of expenses to average net assets .79% .71% .65%
C C

17.Ratio of net investment income to average net assets 5.15% 4.92% 5.19%

18.Portfolio turnover rate 157% 83% 47%

</TABLE>

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C>
19.Selected Per-Share Data and Ratios

20.Years ended September 30
1995 1994E 1993 1992 1991 1990 1989B

21.Net asset value, beginning of period
$ 14.58 $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39 $ 10.00

22.Income from Investment Operations

23. Net investment income
.49 .34 .52 .46 .55 .58 .27

24. Net realized and unrealized gain (loss) on investments
.93 .21F 2.01 .97 2.48 (.71) 1.12

25. Total from investment operations
1.42 .55 2.53 1.43 3.03 (.13) 1.39

26.Less Distributions

27. From net investment income
(.44) (.44) (.87) (.45) (.65) (.38) --

28. From net realized gain
- -- (.45) (.19) (.50) -- (.24) --

29. In excess of net realized gain
(.09) (.05) -- -- -- -- --

30. Total distributions
(.53) (.94) (1.06) (.95) (.65) (.62) --

31.Net asset value, end of period
$ 15.47 $ 14.58 $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39

32.Total returnC,D
10.09 3.60 19.71 11.84 29.78 (1.27) 13.90
% % % % % % %

33.Net assets, end of period (in millions)
$ 11,084 $ 11,792 $ 7,266 $ 2,762 $ 743 $ 346 $ 245

34.Ratio of expenses to average net assets
.97 1.04 1.09 1.17 1.17 1.17 1.58
% % % % % % %A

35.Ratio of net investment income to average net assets
4.27 3.63 4.28 5.58 5.74 5.89 5.88
% % % % % % %A

36.Portfolio turnover rate
137 109 98 134 134 105% 167
% % % % % %A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
37.Selected Per-Share Data and Ratios

38.Years ended September 30 1995 1994G 1993 1992E

39.Net asset value, beginning of period $ 13.91 $ 13.77 $ 11.16 $ 10.00

40.Income from Investment Operations

41. Net investment income .26 .13 .18 .14

42. Net realized and unrealized gain
(loss) on investments 1.07 .61F 2.66 1.02

43. Total from investment operations 1.33 .74 2.84 1.16

44.Less Distributions

45. From net investment income (.18) (.15) --

46. From net realized gain -- (.37) (.08) --

47. In excess of net realized gain (.09) (.05) -- --

48. Total distributions (.36) (.60) (.23) --

49.Net asset value, end of period $ 14.88 $ 13.91 $ 13.77 $ 11.16

50.Total return B,C 9.95% 5.39% 25.83% 11.60%

51.Net assets, end of period (000 omitted) $ 2,850,300 $ 3,070,587 $ 1,243,043 $ 94,416

52.Ratio of expenses to average net assets 1.03%H 1.15% 1.19%D 1.64%
A

53.Ratio of expenses to average net assets
after expense reductions 1.02%H 1.15% 1.19% 1.64%
A

54.Ratio of net investment income to average
net assets 3.16% 2.64% 3.02% 3.50%
A

55.Portfolio turnover rate 119% 104% 97% 693%
A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
September 30, 1995 year years fund

Asset Manager: Income 11.99 % .n/a 9.42 %A

Asset Manager 10.09 % 14.66 % 12.58 %B

Asset Manager: Growth 9.95 % .n/a 13.84 %C

S&P 500 29.75 % 17.24 % .n/a

LB Gov't./Corp. Interm. 11.29% 8.74% .n/a

Consumer Price Index 2.54 % 2.91 % .n/a

</TABLE>

CUMULATIVE TOTAL RETURNS
ASSET MANAGER: GROWTH

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
September 30, 1995 year years fund

Asset Manager: Income 11.99 % .n/a 31.02 %A

Asset Manager 10.09 % 98.18 % 122.86 %B

Asset Manager: Growth 9.95 % .n/a 62.73 %C

S&P 500 29.75 % 121.49 % .n/a

LB Gov't./Corp. Interm. 11.29% 52.01% .n/a

Consumer Price Index 2.54 % 15.45 % .n/a

</TABLE>

A FROM OCTOBER 1, 1992
B FROM DECEMBER 28, 1988
C FROM DECEMBER 30, 1991

EXAMPLE: Mountain charts illustrate the growth of a hypothetical
investment over time. The charts below show the growth in value of a
$10,000 investment made in each fund on its start date through September
30, 1995.
ASSET MANAGER: INCOME
ASSET MANAGER: GROWTH
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
ASSET MANAGER
ASSET MANAGER: GROWTH
Fiscal periods 1988 1992
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10030.0
Row: 3, Col: 1, Value: 10410.0
Row: 4, Col: 1, Value: 10250.0
Row: 5, Col: 1, Value: 10340.0
Row: 6, Col: 1, Value: 10610.0
Row: 7, Col: 1, Value: 10920.0
Row: 8, Col: 1, Value: 11040.0
Row: 9, Col: 1, Value: 11360.0
Row: 10, Col: 1, Value: 11390.0
Row: 11, Col: 1, Value: 11390.0
Row: 12, Col: 1, Value: 11440.0
Row: 13, Col: 1, Value: 11520.0
Row: 14, Col: 1, Value: 11562.28
Row: 15, Col: 1, Value: 11192.37
Row: 16, Col: 1, Value: 11276.92
Row: 17, Col: 1, Value: 11393.17
Row: 18, Col: 1, Value: 11202.94
Row: 19, Col: 1, Value: 11794.79
Row: 20, Col: 1, Value: 11889.91
Row: 21, Col: 1, Value: 11879.34
Row: 22, Col: 1, Value: 11477.72
Row: 23, Col: 1, Value: 11245.21
Row: 24, Col: 1, Value: 11276.92
Row: 25, Col: 1, Value: 11815.93
Row: 26, Col: 1, Value: 12184.23
Row: 27, Col: 1, Value: 12834.35
Row: 28, Col: 1, Value: 13394.81
Row: 29, Col: 1, Value: 13618.99
Row: 30, Col: 1, Value: 13831.96
Row: 31, Col: 1, Value: 14179.44
Row: 32, Col: 1, Value: 13876.79
Row: 33, Col: 1, Value: 14246.69
Row: 34, Col: 1, Value: 14571.76
Row: 35, Col: 1, Value: 14594.17
Row: 36, Col: 1, Value: 14706.26
Row: 37, Col: 1, Value: 14448.46
Row: 38, Col: 1, Value: 15064.82
Row: 39, Col: 1, Value: 15282.45
Row: 40, Col: 1, Value: 15572.63
Row: 41, Col: 1, Value: 15572.63
Row: 42, Col: 1, Value: 15790.26
Row: 43, Col: 1, Value: 15947.43
Row: 44, Col: 1, Value: 15947.43
Row: 45, Col: 1, Value: 16273.88
Row: 46, Col: 1, Value: 16201.33
Row: 47, Col: 1, Value: 16322.24
Row: 48, Col: 1, Value: 16298.06
Row: 49, Col: 1, Value: 16660.78
Row: 50, Col: 1, Value: 16984.94
Row: 51, Col: 1, Value: 17277.13
Row: 52, Col: 1, Value: 17454.98
Row: 53, Col: 1, Value: 18029.64
Row: 54, Col: 1, Value: 18106.58
Row: 55, Col: 1, Value: 18491.28
Row: 56, Col: 1, Value: 18724.08
Row: 57, Col: 1, Value: 19008.76
Row: 58, Col: 1, Value: 19552.24
Row: 59, Col: 1, Value: 19539.98
Row: 60, Col: 1, Value: 20114.3
Row: 61, Col: 1, Value: 20075.14
Row: 62, Col: 1, Value: 20940.46
Row: 63, Col: 1, Value: 21620.35
Row: 64, Col: 1, Value: 20940.46
Row: 65, Col: 1, Value: 19927.45
Row: 66, Col: 1, Value: 19913.73
Row: 67, Col: 1, Value: 20078.31
Row: 68, Col: 1, Value: 19636.47
Row: 69, Col: 1, Value: 20022.86
Row: 70, Col: 1, Value: 20492.03
Row: 71, Col: 1, Value: 20243.05
Row: 72, Col: 1, Value: 20340.24
Row: 73, Col: 1, Value: 20034.79
Row: 74, Col: 1, Value: 19558.09
Row: 75, Col: 1, Value: 19402.53
Row: 76, Col: 1, Value: 19699.51
Row: 77, Col: 1, Value: 20013.12
Row: 78, Col: 1, Value: 20425.91
Row: 79, Col: 1, Value: 20909.87
Row: 80, Col: 1, Value: 21196.75
Row: 81, Col: 1, Value: 21783.96
Row: 82, Col: 1, Value: 21927.18
Row: 83, Col: 1, Value: 22285.82
$
$22,286
ASSET MANAGER: GROWTH
ASSET MANAGER: GROWTH
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10080.0
Row: 3, Col: 1, Value: 10450.0
Row: 4, Col: 1, Value: 10670.0
Row: 5, Col: 1, Value: 10520.0
Row: 6, Col: 1, Value: 10550.0
Row: 7, Col: 1, Value: 10770.0
Row: 8, Col: 1, Value: 10650.0
Row: 9, Col: 1, Value: 11090.0
Row: 10, Col: 1, Value: 10910.0
Row: 11, Col: 1, Value: 11160.0
Row: 12, Col: 1, Value: 11370.0
Row: 13, Col: 1, Value: 11780.0
Row: 14, Col: 1, Value: 12003.17
Row: 15, Col: 1, Value: 12176.54
Row: 16, Col: 1, Value: 12329.51
Row: 17, Col: 1, Value: 12808.82
Row: 18, Col: 1, Value: 12849.61
Row: 19, Col: 1, Value: 13114.76
Row: 20, Col: 1, Value: 13308.53
Row: 21, Col: 1, Value: 13553.28
Row: 22, Col: 1, Value: 14103.98
Row: 23, Col: 1, Value: 14042.79
Row: 24, Col: 1, Value: 14481.31
Row: 25, Col: 1, Value: 14358.93
Row: 26, Col: 1, Value: 15161.86
Row: 27, Col: 1, Value: 15747.05
Row: 28, Col: 1, Value: 15278.9
Row: 29, Col: 1, Value: 14502.18
Row: 30, Col: 1, Value: 14480.9
Row: 31, Col: 1, Value: 14597.94
Row: 32, Col: 1, Value: 14161.71
Row: 33, Col: 1, Value: 14512.82
Row: 34, Col: 1, Value: 15023.54
Row: 35, Col: 1, Value: 14800.1
Row: 36, Col: 1, Value: 14842.66
Row: 37, Col: 1, Value: 14417.06
Row: 38, Col: 1, Value: 14041.71
Row: 39, Col: 1, Value: 13691.76
Row: 40, Col: 1, Value: 13921.41
Row: 41, Col: 1, Value: 14205.75
Row: 42, Col: 1, Value: 14599.44
Row: 43, Col: 1, Value: 14960.32
Row: 44, Col: 1, Value: 15277.47
Row: 45, Col: 1, Value: 15911.75
Row: 46, Col: 1, Value: 15999.24
Row: 47, Col: 1, Value: 16272.63
$
$16,273
YEAR-BY-YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1993 1994

ASSET MANAGER: INCOME 15.39 -1.36
% %

Competitive Funds Average 12.17 -2.92
% %

</TABLE>

Percentage (%)
(large solid box) ASSET MANAGER: INCOME
(large hollow box) Competitive Funds Average
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: 15.39
Row: 9, Col: 2, Value: 12.17
Row: 10, Col: 1, Value: -1.36
Row: 10, Col: 2, Value: -2.92
YEAR-BY-YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1989 1990 1991 1992 1993 1994

ASSET MANAGER 15.28 5.38 % 23.64 12.75 23.29 -6.60
% % % % %

ASSET MANAGER: GROWTH n/a n/a n/a 19.08 26.32 -7.39
% % %

Competitive Funds Average 17.89 -0.70 26.56 7.51 % 11.94 -2.65
% % % % %

</TABLE>

Percentage (%)
(large solid box) ASSET MANAGER
ASSET MANAGER: GROWTH
(large hollow box) Competitive Funds Average
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 1, Col: 3, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 2, Col: 3, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 3, Col: 3, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 4, Col: 3, Value: nil
Row: 5, Col: 1, Value: 15.28
Row: 5, Col: 2, Value: nil
Row: 5, Col: 3, Value: 17.89
Row: 6, Col: 1, Value: 5.38
Row: 6, Col: 2, Value: nil
Row: 6, Col: 3, Value: -0.7000000000000001
Row: 7, Col: 1, Value: 23.64
Row: 7, Col: 2, Value: nil
Row: 7, Col: 3, Value: 26.56
Row: 8, Col: 1, Value: 12.75
Row: 8, Col: 2, Value: 19.08
Row: 8, Col: 3, Value: 7.51
Row: 9, Col: 1, Value: 23.29
Row: 9, Col: 2, Value: 26.32
Row: 9, Col: 3, Value: 11.94
Row: 10, Col: 1, Value: -6.6
Row: 10, Col: 2, Value: -7.39
Row: 10, Col: 3, Value: -2.65
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE S&P 500(registered trademark) is the Standard & Poor's Composite Index
of 500 Stocks, a widely recognized, unmanaged index of common stock prices.
The S&P 500 figures assume reinvestment of all dividends paid by stocks
included in the index. They do not, however, include any allowance for the
brokerage commissions or other fees you would pay if you actually invested
in those stocks.
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
(INTERMEDIATE) is comprised of public obligations by the U.S. Treasury,
U.S. government agencies and quasi-federal corporations and publicly
issued, investment grade dollar-denominated corporate debt. The index
includes issues with maturities of up to ten years.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGES, which assume reinvestment of distributions,
are published by Lipper Analytical Services, Inc. Fidelity Asset Manager:
Income compares its performance to the Lipper Income Funds Average,
Fidelity Asset Manager and Fidelity Asset Manager: Growth compare to the
Lipper Flexible Portfolio Funds Average. These averages currently reflect
the performance of over 21 and 107 mutual funds with similar
objectives, respectively.
Other illustrations of fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL

FIDELITY ASSET MANAGER
Fiscal 1995 Debt Holdings, by Rating MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC.
Rating Average A Rating Averag
e A
INVESTMENT GRADE
Highest quality Aaa 23.2 % AAA 23.6 %
High quality Aa 0.1 % AA 0.4 %
Upper-medium grade A -- A 0.1 %
Medium grade Baa -- BBB 0.3 %
LOWER QUALITY
Moderately speculative Ba 3.6 % BB 3.4 %
Speculative B 5.7 % B 4.3 %
Highly speculative Caa 0.3 % CCC 0.2 %
Poor quality Ca -- CC --
Lowest quality, no interest C C
In default, in arrears -- D --
32.9 % 32.3 %
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR
INDIRECTLY BY MOODY'S OR S&P AMOUNTED TO 3.1 % AND
2. 4 % FOR ASSET MANAGER: INCOME AND ASSET MANAGER
RESPECTIVELY . THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR HAS
DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY
ACCOUNT FOR 1.7% AND 2.0 % OF ASSET MANAGER: INCOME'S AND ASSET
MANAGER'S TOTAL SECURITY INVESTMENTS. REFER TO THE
FUNDS ' STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE
DISCUSSION OF THESE RATINGS.

FIDELITY ASSET MANAGER: GROWTH
Fiscal 1995 Debt Holdings, by Rating MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC.
Rating Average A Rating Averag
eA
INVESTMENT GRADE
Highest quality Aaa 14.6 % AAA 14.9 %
High quality Aa 0.0% AA 0.2 %
Upper-medium grade A 0.0% A 0.0%
Medium grade Baa 0.0% BBB 0.1%
LOWER QUALITY
Moderately speculative Ba 1.5% BB 2.1 %
Speculative B 4.0% B 2.8 %
Highly speculative Caa 0.2% CCC 0.1%
Poor quality Ca 0.0% CC 0.0%
Lowest quality, no interest C C
In default, in arrears -- D 0.0%
20.3 % 20.2 %
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR
INDIRECTLY BY MOODY'S OR S&P AMOUNTED TO 2.6 % . THIS
MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED RATING
SERVICES, AS WELL AS UNRATED SECURITIES. FMR HAS
DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY ACCOUNT FOR
1.9 % OF THE FUND'S TOTAL SECURITY INVESTMENTS. REFER
TO THE FUND'S STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE
DISCUSSION OF THESE RATINGS.

RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's or
rated in the equivalent categories by S&P, or is unrated but judged to be
of equivalent quality by FMR. Asset Manager: Income currently intends to
limit its investments in corporate debt securities (other than convertible
debt securities) to those of Baa-quality and above. The fund currently
intends to limit its investments in lower than Baa-quality convertible debt
securities to 5% of its assets. There is no quality restriction on foreign
government securities. Asset Manager currently intends to limit its
investments in lower than Baa-quality debt securities as stated above, to
less than 35% of its assets; and intends to limit its investments in
lower than Baa-quality debt securities as determined by FMR, to 20% of its
total assets. Asset Manager: Growth currently intends to limit its
investments in lower than Baa-quality debt securities to less than
35% of its assets.
MONEY MARKET INSTRUMENTS are high-quality instruments that present minimal
credit risk. They may include U.S. government obligations, commercial paper
and other short-term corporate obligations, and certificates of deposit,
bankers' acceptances, bank deposits, and other financial institution
obligations. These instruments may carry fixed or variable interest rates.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign
investments, especially those in developing countries, more volatile.
ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be
significantly affected by changes in interest rates, the market's
perception of the issuers, and the creditworthiness of the parties
involved. Some securities may have a structure that makes their reaction to
interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable
price. The sale of some illiquid securities and some other securities
may be subject to legal restrictions . Difficulty in selling securities
may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
PRECIOUS METALS. The prices of gold and other commodities can change
rapidly, and generally do not move in tandem with prices of equity or debt
securities. If a fund invests in commodities, its share price will be
affected by changes in commodity prices.
RESTRICTIONS: Asset Manager: Income and Asset Manager may not invest in
precious metals.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield.
OTHER INSTRUMENTS may include convertible securities, preferred stocks,
securities of closed-end investment companies and real estate-related
investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, a fund may not invest
more than 5% of its total assets in any one issuer. A fund may also not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions,
including Fidelity Brokerage Services, Inc. (FBSI) , an affiliate of
FMR, is a means of earning income. This practice could result in a loss or
a delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
ASSET MANAGER: INCOME seeks a high level of current income by allocating
its assets among stocks, bonds, short-term instruments, and other
investments. ASSET MANAGER seeks high total return with reduced risk over
the long term by allocating its assets among stocks, bonds, and short-term
instruments. ASSET MANAGER: GROWTH seeks to maximize total return over the
long term by allocating its assets among stocks, bonds, short-term
instruments, and other investments.
FOR EACH FUND with respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer and may not own more
than 10% of the outstanding voting securities of a single issuer. The fund
may not invest more than 25% of its total assets in any one industry. The
fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets. Loans, in the aggregate, may not
exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .37% for Asset Manager:
Income and .52% for Asset Manager and Asset Manger: Growth and it drops as
total assets under management increase.
For September 1995, the group fee rate was .1493% for Asset Manager:
Income an d .3112% for Asset Manger and Asset Manager: Growth. The
individual fund fee rate is .35% for Fidelity Asset Manager: Income and
.40% for Fidelity Asset Manager and Fidelity Asset Manage r : Growth.
The total management fee rate for fiscal 1995, was .50% for Fidelity Asset
Manager: Income, .72% for Fidelity Asset Manager and, .72% for
Fidelity Asset Manager: Growth.

UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR receives is
designed to be responsive to changes in
FMR's total assets under management.
Building this variable into the fee calculation
assures shareholders that they will pay a
lower rate as FMR's assets under
management increase.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In
fiscal 1995, Fidelity Asset Manager: Income , Fidelity Asset
Manager , and Fidelity Asset Manager: Growth paid FSC fees equal to .24%,
.24%, and .28%, respectiv ely, of average net assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce the fund's custodian or transfer agent
fees.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1995, the portfolio turnover rates for Fidelity Asset Manager:
Income and Fidelity Asset Manager, and Fidelity Asset Manager: Growth were
1 57%, 137%, and 119% respectively. These rates vary from year to
year. High turnover rates increase transaction costs and may increase
taxable capital gains. FMR considers these effects when evaluating the
anticipated benefits of short-term investing.
YOUR ACCOUNT

FIDELITY FACTS
Fidelity offers the broadest selection of mutual
funds in the world.
(solid bullet) Number of Fidelity mutual funds: over 210
(solid bullet) Assets in Fidelity mutual funds: over $ 335 billion
(solid bullet) Number of shareholder accounts: over
22 mil lion
(solid bullet) Number of investment analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described at right. If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
ASSET MANAGER: GROWTH
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio Advisory
Services or a Fidelity Payroll Deduction Program account in a fund.
Fidelity Asset Manager, the minimums may also vary for a Fidelity Investor
Card account or a Fidelity College Savings Plan account in the fund. Refer
to the appropriate program materials for details.
KEY INFORMATION
ASSET MANAGER: GROWTH

Phone 1#800#544#7777
S
To open an account, exchange from another Fidelity fund account with the
same
registration, including name, address, and taxpayer ID number.
S
To add to an account, exchange from another Fidelity fund account with the
same registration, including name, address, and taxpayer ID number. You can

also use Fidelity Money Line to transfer from your bank account. Call
before
your first use to verify that this service is in place on your account.
Maximum
Money Line $50,000
Mail
S
To open an account, complete and sign the application. Make your check
payable
to the complete name of the fund of your choice. Mail to the address
indicated
on the application.
S
To add to an account, make your check payable to the complete name of the
fund
of your choice. Indicate your fund account number on your check and mail to

the address printed on your account statement.
S
Exchange by mail: call 1#800#544#6666 for instructions.
In Person
S
To open an account, bring your application and check to a Fidelity Investor

Center. Call 1#800#544#9797 for the center nearest you.
S
To add to an account, bring your check to a Fidelity Investor Center. Call
1#800#544#9797 for the center nearest you.
Wire
Not available for retirement accounts.
S
To open an account, call 1#800#544#7777 to set up your account and to
arrange
a wire transaction. Wire within 24 hours to the wire address below. Specify

the complete name of the fund and include your new account number and your
name.
S
To add to an account, wire to the wire address below. Specify the complete
name of the fund and include your account number and your name.
S
Wire address: Bankers Trust Company, Bank Routing #021001033, Account #
00163053.
Automatically
New accounts cannot be opened with these services.
S
Use Fidelity Automatic Account Builder or Direct Deposit to automatically
purchase
more shares. Sign up for these services when opening your account, or call
1#800#544#6666.
S
Use Directed Dividends or Fidelity Automatic Exchange Service to
automatically
send money from one Fidelity fund into another. Call 1#800#544#6666 for
instructions.

TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
(null)(null)
How to Sell Shares
You can arrange to take money out of your fund account at any time by
selling
(redeeming) some or all of your shares. Your shares will be sold at the
next
share price calculated after your order is received and accepted. Share
price
is normally calculated at 4 p.m. Eastern time.
To sell shares in a non#retirement account,
you may use any of the methods described on these two pages.
To sell shares in a Fidelity retirement account,
your request must be made in writing, except for exchanges to other
Fidelity
funds, which can be requested by phone or in writing. Call 1#800#544#6666
for
a retirement distribution form.
If you are selling some but not all of your shares,
leave at least $1,000 worth of shares in the account to keep it open ($500

for retirement accounts).
To sell shares by bank wire or Fidelity Money Line,
you will need to sign up for these services in advance.
Certain requests must include a signature guarantee.
It is designed to protect you and Fidelity from fraud. Your request must
be
made in writing and include a signature guarantee if any of the following
situations
apply:
S
You wish to redeem more than $100,000 worth of shares,
S
Your account registration has changed within the last 30 days,
S
The check is being mailed to a different address than the one on your
account
(record address),
S
The check is being made payable to someone other than the account owner, or
S
The redemption proceeds are being transferred to a Fidelity account with a
different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including
Fidelity Investor Centers), dealer, credit union (if authorized under state

law), securities exchange or association, clearing agency, or savings
association.
A notary public cannot provide a signature guarantee.
Selling Shares in Writing
Write a "letter of instruction" with:
S
Your name,
S
The fund's name,
S
Your fund account number,
S
The dollar amount or number of shares to be redeemed, and
S
Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address.
Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266#0602
Key Information
Phone 1#800#544#7777
All account types except retirement
S
Maximum check request: $100,000.
S
For Money Line transfers to your bank account; minimum: $10; maximum:
$100,000.
All account types
S
You may exchange to other Fidelity funds if both accounts are registered
with
the same name(s), address, and taxpayer ID number.
Mail or in Person
Individual, Joint Tenant, Sole Proprietorship, UGMA, UTMA
S
The letter of instruction must be signed by all persons required to sign
for
transactions, exactly as their names appear on the account.
Retirement account
S
The account owner should complete a retirement distribution form. Call
1#800#544#6666
to request one.
Trust
S
The trustee must sign the letter indicating capacity as trustee. If the
trustee's
name is not in the account registration, provide a copy of the trust
document
certified within the last 60 days.
Business or Organization
S
At least one person authorized by corporate resolution to act on the
account
must sign the letter.
S
Include a corporate resolution with corporate seal or a signature
guarantee.
Executor, Administrator, Conservator, Guardian
S
Call 1#800#544#6666 for instructions.
Wire
All account types except retirement
S
You must sign up for the wire feature before using it. To verify that it is

in place, call 1#800#544#6666. Minimum wire: $5,000.
S
Your wire redemption request must be received by Fidelity before 4 p.m.
Eastern
time for money to be wired on the next business day.
Check
All account types except retirement
S
Minimum check: $500.
S
All account owners must sign a signature card to receive a checkbook.

TDD - Service for the Deaf and Hearing#Impaired: 1#800#544#0118
YOUR ACCOUNT

24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT BALANCES 1-800-544-7544
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
QUOTES 1-800-544-8544
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page
.
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
Regular Investment Plans
Fidelity Automatic Account BuilderSM
To move money from your bank account to a Fidelity fund
Minimum
$100
Frequency
Monthly or quarterly
Setting up or changing
S
For a new account, complete the appropriate section on the fund
application.
S
For existing accounts, call 1#800#544#6666 for an application.
S
To change the amount or frequency of your investment, call 1#800#544#6666
at
least three business days prior to your next scheduled investment date.
Direct Deposit
To send all or a portion of your paycheck or government check to a Fidelity

fundA
Minimum
$100
Frequency
Every pay period
Setting up or changing
S
Check the appropriate box on the fund application, or call 1#800#544#6666
for
an authorization form.
S
Changes require a new authorization form.
Fidelity Automatic Exchange Service
To move money from a Fidelity money market fund to another Fidelity fund
Minimum
$100
Frequency
Monthly, bimonthly, quarterly, or annually
Setting up or changing
S
To establish, call 1#800#544#6666 after both accounts are opened.
S
To change the amount or frequency of your investment, call 1#800#544#6666.
A Because their share prices fluctuate, these funds may not be appropriate
choices for direct deposit of your entire check.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year.
DISTRIBUTION SCHEDULE
ASSET MANAGER: GROWTH
Dividends Capital gains

Asset Manager: Income Monthly December

Asset Manager March, June, December
September,
and December

Asset Manager: Growth December December

DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days.

UNDERSTANDING DISTRIBUTIONS
As a fund shareholder, you are entitled to your
share of the fund's net income and gains on its
investments. The fund passes its earnings
along to its investors as DISTRIBUTIONS.
Each fund earns dividends from stocks and
interest from bond, money market, and other
investments. These are passed along as
DIVIDEND DISTRIBUTIONS. The fund realizes
capital gains whenever it sells securities for a
higher price than it paid for them. These are
passed along as CAPITAL GAIN DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund
and its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The funds' investments with remaining maturities of 60 days or less are
valued on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Other assets are valued primarily on
the basis of market quotations or, if quotations are not readily available
or if the values have been materially affected by events occurring after
the closing of a foreign market, by a method that the Board of Trustees
believes accurately reflects fair value. Foreign securities are valued on
the basis of quotations from the primary market in which they are traded,
and are translated from the local currency into U.S. dollars using current
exchange rates.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY CHARLES STREET TRUST:
FIDELITY ASSET MANAGER FUNDS

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c,d .............................. Performance

4 a i............................. Charter

ii........................... The Funds at a Glance; Investment Principles and
Risks

b .............................. Investment Principles and Risks

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Funds at a Glance; Charter;
Doing Business with Fidelity

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. Cover Page; Charter

f .............................. Expenses

g i............................. Charter

ii............................ *

5A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... Charter

b ............................. Charter

c .............................. Transaction Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Cover Page; Charter

b .............................. Expenses; How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

FIDELITY CHARLES STREET TRUST:
FIDELITY ASSET MANAGER FUNDS

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page

12 ............................ Description of the Trust

13 a - c ............................ Investment Policies and Limitations

d ............................ Portfolio Transactions

14 a - c ............................ Trustees and Officers

15 a, b ............................ *

c ............................ Trustees and Officers

16 a i ............................ FMR, Portfolio Transactions

ii ............................ Trustees and Officers

iii ............................ Management Contracts

b ............................ Management Contracts

c, d ............................ Contracts with FMR Affiliates

e ............................ *

f ............................ Distribution and Service Plans

g ............................ *

h ............................ Description of the Trust

i ............................ Contracts with FMR Affiliates

17 a - c ............................ Portfolio Transactions

d, e ............................ *

18 a ............................ Description of the Trust

b ............................ *

19 a ............................ Additional Purchase and Redemption Information

b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities

c ............................ *

20 ............................ Distributions and Taxes

21 a, b ............................ Contracts with FMR Affiliates

c ............................ *

22 a, b ............................ Performance

23 ............................ Financial Statements

</TABLE>

* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing, or a copy of
the Statement of Additional Information (SAI) dated November
20,1995. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, call Fidelity
at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

FIDELITY
ASSET
MANAGER(trademark)
This asset allocation fund seeks high total return with reduced risk over
the long term through investments in stocks, bonds, and short-term
instruments of all types.
PROSPECTUS
NOVEMBER 20, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109
CONTENTS

KEY FACTS THE FUND AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES The fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.

PERFORMANCE How the fund has
done over time.

THE FUND IN DETAIL CHARTER How the fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
The fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUND AT A GLANCE
GOAL: High total return with reduced risk over the long term. As with any
mutual fund, there is no assurance that the fund will achieve its goal.
STRATEGY: The fund diversifies across stocks, bonds, and short-term
instruments, both here and abroad, to pursue its goal. The fund has a
neutral mix which represents the way the fund's investments will generally
be allocated over the long term. This mix will vary over short-term periods
as fund management gradually adjusts the fund's holdings - within defined
ranges - based on the current outlook for the different markets.
Neutral Mix
Stocks 40%
(can range
from 10-60%)
Row: 1, Col: 1, Value: 20.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 40.0
Bonds 40%
(can range
from
20-60%)
Short-term
20%
(can range
from
0-70%)
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the fund.
SIZE: As of September 30, 1995, the fund had over $ 11 billion in
assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who want to diversify
among domestic and foreign stocks, bonds, short-term instruments and other
types of securities, in one fund. If you are looking for a fund that can
invest in a wide range of security types within defined ranges in pursuit
of high total return with reduced risk, this fund may be appropriate for
you.
Because the fund owns different types of investments, its performance is
affected by a variety of factors. The value of the fund's investments and
the income they generate will vary from day to day, and generally reflect
interest rates, market conditions, and other company, political, and
economic news. Performance also depends on FMR's skill in allocating
assets. When you sell your fund shares, they may be worth more or less than
what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these
fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2 , 500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee to FMR. It also incurs other expenses for services
such as maintaining shareholder records and furnishing shareholder
statements and financial reports. The fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets.
Management fee .72 %

12b-1 fee None

Other expenses .25 %

Total fund operating expenses .97 %

EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
After 1 year $ 10

After 3 years $ 31

After 5 years $ 54

After 10 years $ 11
9

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.

UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of
expenses for portfolio
management, shareholder
statements, tax reporting, and
other services. These costs
are paid from the fund's
assets; their effect is already
factored into any quoted
share price or return.
(checkmark)
FINANCIAL HIGHLIGHTS
The table that follows is included in the fund's Annual Report and has been
audited by Price Waterhouse LLP, independent accountants. Their report on
the financial statements and financial highlights is included in the Annual
Report. The financial statements and financial highlights are incorporated
by reference into (are legally a part of) the fund's Statement of
Additional Information.
SELECTED PER-SHARE DATA

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1.Years ended 1995 1994E 1993 1992 1991 1990 1989B
September 30

2.Net asset $ 14.58 $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39 $ 10.00
value,

beginning of
period

3.Income from
Investment
Operations

4. Net . 49 .34 .52 .46 .55 .58 .27
investment
income

5. Net realized . 93 .21 F 2.01 .97 2.48 (.71) 1.12
and
unrealized gain
(loss)
on investments

6. Total from 1.42 .55 2.53 1.43 3.03 (.13) 1.39
investment
operations

7.Less
Distributions

8. From net (. 44 ) (.44) (.87) (.45) (.65) (.38) --
investment
income

9. From net -- (.45) (.19) (.50) -- (.24) --
realized gain

10. In excess (.09) (.05) -- -- -- -- --
of net realized
gain

11. Total (.53) (.94) (1.06) (.95) (.65) (.62) --
distributions

12.Net asset $ 15.47 $ 14.58 $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39
value,
end of period

13.Total 10.09 3.60 19.71 11.84 29.78 (1.27) 13.90
returnC,D % % % % % % %

14.RATIOS AND SUPPLEMENTAL DATA

15.Net assets, $ 11,084 $ 11,792 $ 7,266 $ 2,762 $ 743 $ 346 $ 245
end of
period (in
millions)

16.Ratio of .97 1.04 1.09 1.17 1.17 1.17 1.58
expenses to % % % % % % %A
average net
assets

17.Ratio of net 4.27 3.63 4.28 5.58 5.74 5.89 5.88
investment % % % % % % %A
income to
average net
assets

18.Portfolio 137 109 98 134 134 105% 167
turnover rate % % % % % %A

</TABLE>

A ANNUALIZED
B FROM DECEMBER 28, 1988 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1989
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
E EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD ENDED DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from October 1 through September 30. The tables
below show the fund's performance over past fiscal years compared to two
measures: investing in a broad selection of stocks (S&P 500), and not
investing at all (inflation, or CPI). To help you compare this fund to
other funds, the chart on page displays calendar-year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods Pas Past Life
ended t 1 5 of
September yea year fund
30, 1995 r s A

Asset Manager 10.09 14.66 12.58
% % %

S&P 500 29.75 17.24 15.20
% % %

Consumer 2.54 2.91 3.62
Price Index % % %

CUMULATIVE TOTAL RETURNS
Fiscal periods Pas Past Life
ended t 1 5 of
September yea year fund
30, 1995 r s A

Asset Manager 10.09 98.18 122.86
% % %

S&P 500 29.75 121.4 160.27
% 9 % %

Consumer 2.54 15.45 27.14
Price Index % % %

A FROM DECEMBER 28, 1988
EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the
fund on December 28, 1988. From that date through September 30, 1995, the
fund's total return was 122.86 %. That $10,000 would have grown to
$ 22,286.00 (the initial investment plus 122.86 % of $10,000).
UNDERSTANDING
PERFORMANCE
As economic conditions
change, different types of
investments do better than
others. Since this asset
allocation fund invests in
domestic and foreign stocks,
bonds, and short-term
instruments, its total return
will reflect the performance of
both domestic and foreign
markets and short and long
term interest rates depending
on the mix of securities it
owns.
(checkmark)
$10,000 OVER LIFE OF FUND
Fiscal periods 19 88 1993
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10030.0
Row: 3, Col: 1, Value: 10410.0
Row: 4, Col: 1, Value: 10250.0
Row: 5, Col: 1, Value: 10340.0
Row: 6, Col: 1, Value: 10610.0
Row: 7, Col: 1, Value: 10920.0
Row: 8, Col: 1, Value: 11040.0
Row: 9, Col: 1, Value: 11360.0
Row: 10, Col: 1, Value: 11390.0
Row: 11, Col: 1, Value: 11390.0
Row: 12, Col: 1, Value: 11440.0
Row: 13, Col: 1, Value: 11520.0
Row: 14, Col: 1, Value: 11562.28
Row: 15, Col: 1, Value: 11192.37
Row: 16, Col: 1, Value: 11276.92
Row: 17, Col: 1, Value: 11393.17
Row: 18, Col: 1, Value: 11202.94
Row: 19, Col: 1, Value: 11794.79
Row: 20, Col: 1, Value: 11889.91
Row: 21, Col: 1, Value: 11879.34
Row: 22, Col: 1, Value: 11477.72
Row: 23, Col: 1, Value: 11245.21
Row: 24, Col: 1, Value: 11276.92
Row: 25, Col: 1, Value: 11815.93
Row: 26, Col: 1, Value: 12184.23
Row: 27, Col: 1, Value: 12834.35
Row: 28, Col: 1, Value: 13394.81
Row: 29, Col: 1, Value: 13618.99
Row: 30, Col: 1, Value: 13831.96
Row: 31, Col: 1, Value: 14179.44
Row: 32, Col: 1, Value: 13876.79
Row: 33, Col: 1, Value: 14246.69
Row: 34, Col: 1, Value: 14571.76
Row: 35, Col: 1, Value: 14594.17
Row: 36, Col: 1, Value: 14706.26
Row: 37, Col: 1, Value: 14448.46
Row: 38, Col: 1, Value: 15064.82
Row: 39, Col: 1, Value: 15282.45
Row: 40, Col: 1, Value: 15572.63
Row: 41, Col: 1, Value: 15572.63
Row: 42, Col: 1, Value: 15790.26
Row: 43, Col: 1, Value: 15947.43
Row: 44, Col: 1, Value: 15947.43
Row: 45, Col: 1, Value: 16273.88
Row: 46, Col: 1, Value: 16201.33
Row: 47, Col: 1, Value: 16322.24
Row: 48, Col: 1, Value: 16298.06
Row: 49, Col: 1, Value: 16660.78
Row: 50, Col: 1, Value: 16984.94
Row: 51, Col: 1, Value: 17277.13
Row: 52, Col: 1, Value: 17454.98
Row: 53, Col: 1, Value: 18029.64
Row: 54, Col: 1, Value: 18106.58
Row: 55, Col: 1, Value: 18491.28
Row: 56, Col: 1, Value: 18724.08
Row: 57, Col: 1, Value: 19008.76
Row: 58, Col: 1, Value: 19552.24
Row: 59, Col: 1, Value: 19539.98
Row: 60, Col: 1, Value: 20114.3
Row: 61, Col: 1, Value: 20075.14
Row: 62, Col: 1, Value: 20940.46
Row: 63, Col: 1, Value: 21620.35
Row: 64, Col: 1, Value: 20940.46
Row: 65, Col: 1, Value: 19927.45
Row: 66, Col: 1, Value: 19913.73
Row: 67, Col: 1, Value: 20078.31
Row: 68, Col: 1, Value: 19636.47
Row: 69, Col: 1, Value: 20022.86
Row: 70, Col: 1, Value: 20492.03
Row: 71, Col: 1, Value: 20243.05
Row: 72, Col: 1, Value: 20340.24
Row: 73, Col: 1, Value: 20034.79
Row: 74, Col: 1, Value: 19558.09
Row: 75, Col: 1, Value: 19402.53
Row: 76, Col: 1, Value: 19699.51
Row: 77, Col: 1, Value: 20013.12
Row: 78, Col: 1, Value: 20425.91
Row: 79, Col: 1, Value: 20909.87
Row: 80, Col: 1, Value: 21196.75
Row: 81, Col: 1, Value: 21783.96
Row: 82, Col: 1, Value: 21927.18
Row: 83, Col: 1, Value: 22285.82
$
$22,286
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1989 1990 1991 1992 1993 1994
Asset Manager 15.28 % 5.38 % 23.64 % 12.75 %
23.29 %
-6.60 %
Competitive funds average 17.89 % -0.70 % 26.56 %
7.51 %
11.94 % -2.65 %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: 15.28
Row: 5, Col: 2, Value: 17.89
Row: 6, Col: 1, Value: 5.38
Row: 6, Col: 2, Value: -0.7000000000000001
Row: 7, Col: 1, Value: 23.64
Row: 7, Col: 2, Value: 26.56
Row: 8, Col: 1, Value: 12.75
Row: 8, Col: 2, Value: 7.51
Row: 9, Col: 1, Value: 23.29
Row: 9, Col: 2, Value: 11.94
Row: 10, Col: 1, Value: -6.6
Row: 10, Col: 2, Value: -2.65
(large solid box) Asset
Manager
(large hollow box) Competitive
funds
average
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE S&P 500(registered trademark) is the Standard & Poor's Composite Index
of 500 Stocks, a widely recognized, unmanaged index of common stock prices.
The S&P 500 figures assume reinvestment of all dividends paid by stocks
included in the index. They do not, however, include any allowance for the
brokerage commissions or other fees you would pay if you actually invested
in those stocks.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Flexible Portfolio Funds
Average, which currently reflects the performance of over 107 mutual
funds with similar objectives. This average, which assumes reinvestment of
distributions, is published by Lipper Analytical Services, Inc.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL

CHARTER
FIDELITY ASSET MANAGER IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. In technical
terms, the fund is currently a diversified fund of Fidelity Charles Street
Trust, an open-end management investment company organized as a
Massachusetts business trust on July 7, 1981.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. Fidelity will
mail proxy materials in advance, including a voting card and information
about the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.), in London, England, and Fidelity Management & Research (Far
East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign
investments.
Robert Beckwitt is manager and Vice President of Asset Manager, which he
has managed since December 1988. Mr. Beckwitt also manages Asset Manager:
Growth and Asset Manager: Income. Previously, he managed VIP II Asset
Manager, Spartan Government Income, and Spartan Long-Term Government Bond.
Mr. Beckwitt joined Fidelity in 1986.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares to carry out the fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND SEEKS HIGH TOTAL RETURN WITH REDUCED RISK over the long term by
allocating its assets among stocks, bonds, short-term and other instruments
of U.S. and foreign issuers. The fund allocates its assets among the
following classes, or types, of investments. The STOCK CLASS includes
equity securities of all types. The BOND CLASS includes all varieties of
fixed-income instruments with maturities of more than three years
(including adjustable-rate preferred stocks). The SHORT-TERM CLASS includes
all types of short-term instruments with remaining maturities of three
years or less. Some types of investments, such as indexed securities, can
fall into more than one asset class. The fund may also make other
investments that do not fall within these classes.
FMR has the ability to allocate the fund's assets within specified ranges.
The fund's NEUTRAL MIX indicates the benchmark for its combination of
investments in each asset class over time. FMR may change the neutral mix
from time to time. The range and approximate neutral mix for each asset
class are shown below.
Range Neutral mix
STOCK CLASS 10 - 60% 40%
BOND CLASS 20 - 60% 40%
SHORT-TERM CLASS 0 - 70% 20%
Asset Manager's approach spreads the fund's assets among all three classes,
moderating both the risk and return potential of stocks, bonds, and
short-term instruments.
Although the fund seeks to reduce its overall risk by diversifying among
different types of investments, the fund aggressively invests in a wide
variety of security types, including stocks and bonds issued in developed
and developing countries and derivative transactions. Since the fund is
subject to the risks of each investment type, the fund and its performance
are affected by many factors.
Stock values fluctuate in response to the activities of individual
companies and general market and economic conditions. The value of bonds
and short-term instruments fluctuates based on changes in interest rates
and in the credit quality of the issuer. The value of some of the fund's
investments may fluctuate based on other factors affecting security values
such as commodity prices and currency values. FMR may use various
investment techniques to hedge a portion of the fund's risks, but there is
no guarantee that these strategies will work as FMR intends. When you sell
your shares, they may be worth more or less than what you paid for them.
In pursuit of the fund's objective, FMR will not try to pinpoint the
precise moment when a major reallocation should be made. Instead, FMR
regularly reviews the fund's allocation and makes changes gradually to
favor investments that it believes will provide the most favorable outlook
for achieving the fund's objective. Under normal circumstances, a single
reallocation will not involve more than 10% of the fund's total assets.
Although FMR uses its expertise and resources in allocating assets, FMR's
decisions may not be advantageous for the fund.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
The fund diversifies across investment types more than most mutual funds.
No one mutual fund, however, can provide an appropriate balanced investment
plan for all investors.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in the
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings and recent investment strategies are described in
the fund's financial reports which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, and warrants. Common stocks,
the most familiar type, represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth
in value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions. Smaller companies
are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets, the fund may not own
more than 10% of the outstanding voting securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics and involve greater risk
of default or price changes due to changes in the issuer's
creditworthiness, or they may already be in default. The market prices of
these securities may fluctuate more than higher-quality securities and may
decline significantly in periods of general economic difficulty.
The table below provides a summary of ratings assigned to debt holdings
(not including money market instruments) in the fund's portfolio. These
figures are dollar-weighted averages of month-end portfolio holdings during
fiscal 1995, and are presented as a percentage of total security
investments. These percentages are historical and do not necessarily
indicate the fund's current or future debt holdings.
FISCAL 1995 DEBT HOLDINGS, BY RATING
MOODY'S STANDARD & POOR'S
INVESTORS SERVICE, INC.
Rating Average A Rating Averag
eA
INVESTMENT GRADE
Highest quality Aaa 23.2 % AAA 23.6 %
High quality Aa 0.1 % AA 0.4 %
Upper-medium grade A -- A 0.1 %
Medium grade Baa -- BBB 0.3 %
LOWER QUALITY
Moderately speculative Ba 3.6 % BB 3.4 %
Speculative B 5.7 % B 4.3 %
Highly speculative Caa 0.3 % CCC 0.2 %
Poor quality Ca -- CC --
Lowest quality, no interest C C
In default, in arrears -- D --
32.9 % 32.3 %
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT. THE DOLLAR-WEIGHTED AVERAGE
OF DEBT SECURITIES NOT RATED DIRECTLY OR INDIRECTLY BY MOODY'S OR S&P
AMOUNTED TO 2.4 %. THIS MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR HAS
DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY ACCOUNT FOR
2.0 %
OF THE FUND'S SECURITY INVESTMENTS. REFER TO THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.

RESTRICTIONS: Purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's
or rated in the equivalent categories by S&P, or is unrated but judged to
be of equivalent quality by FMR. The fund currently intends to limit its
investments in lower than Baa-quality debt securities as stated above, to
l ess than 35% of its assets; and intends to limit its investments in
lower than Baa-quality debt securities as determined by FMR, to 20% of its
total assets.
MONEY MARKET INSTRUMENTS are high-quality instruments that present minimal
credit risk. They may include U.S. government obligations, commercial paper
and other short-term corporate obligations, and certificates of deposit,
bankers' acceptances, bank deposits, and other financial institution
obligations. These instruments may carry fixed or variable interest rates.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign
investments, especially those in developing countries, more volatile.
ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be
significantly affected by changes in interest rates, the market's
perception of the issuers, and the creditworthiness of the parties
involved. Some securities may have a structure that makes their reaction to
interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt
securities, although they may be more volatile and the value of certain
types of stripped securities may move in the same direction as interest
rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for the fund, or there may be a
requirement that the fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable
price. The sale of some illiquid securities and some other
securities may be subject to legal restrictions. Difficulty in selling
securities may result in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which
could affect the fund's yield.
OTHER INSTRUMENTS may include convertible securities, preferred stocks,
securities of closed-end investment companies and real estate-related
investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer. The fund also may not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering the fund's securities. The fund may also lend money to other
funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks high total return with reduced risk over the long term by
allocating its assets among stocks, bonds, and short-term instruments. With
respect to 75% of total assets, the fund may not invest more than 5% of its
total assets in any one issuer and may not own more than 10% of the
outstanding voting securities of a single issuer. The fund may not invest
more than 25% of its total assets in any one industry. The fund may borrow
only for temporary or emergency purposes, but not in an amount exceeding
33% of its total assets. Loans, in the aggregate, may not exceed 33% of the
fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase.
For September 1995, the group fee rate was .3112 %. The individual
fund fee rate is .40%. The total management fee rate for fiscal 1995 was
.72 %.
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's investments that the
sub-adviser manages on a discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing the fund's investments, and handling securities loans. In fiscal
1995, the fund paid FSC fees equal to .24% of its average net
assets.
The fund also pays other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by the fund to reduce the fund's custodian or transfer
agent fees.
The fund has adopted a Distribution and Service Plan. This plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of fund shares. This may include payments to third
parties, such as banks or broker-dealers, that provide shareholder support
services or engage in the sale of the fund's shares. It is important to
note, however, that the fund does not pay FMR any separate fees for this
service.
The fund's portfolio turnover rate for fiscal 1995 was 137% . This
rate varies from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these effects
when evaluating the anticipated benefits of short-term investing.
YOUR ACCOUNT

FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $335 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. The fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for a Fidelity Investor Card account, a Fidelity
College Savings Plan account, or a Fidelity Payroll Deduction Program
account in the fund. Refer to the appropriate program materials for
details.

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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

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<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to "Fidelity
check payable to Asset Manager."
"Fidelity Asset Indicate your fund
Manager." Mail to the account number on
address indicated on your check and mail to
the application. the address printed on
your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity Asset
Bank Routing Manager." and include
#021001033, your account number
Account #00163053. and your name.
Specify "Fidelity Asset
Manager." and include
your new account
number and your
name.

</TABLE>

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<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

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<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

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<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

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A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends are distributed in March,
June, September, and December. Capital gains are distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. The fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When the fund deducts a distribution from its NAV, the reinvestment price
is

the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
The fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates the fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The fund's investments with remaining maturities of 60 days or less are
valued on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Other assets are valued primarily on
the basis of market quotations or, if quotations are not readily available
or if the values have been materially affected by events occurring after
the closing of a foreign market, by a method that the Board of Trustees
believes accurately reflects fair value. Foreign securities are valued on
the basis of quotations from the primary market in which they are traded,
and are translated from the local currency into U.S. dollars using current
exchange rates.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees the fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUND THROUGH A BROKER, who may charge you
a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when the fund is priced on
the following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the fund without reimbursement
from the fund. Qualified recipients are securities dealers who have sold
fund shares or others, including banks and other financial institutions,
under special arrangements in connection with FDC's sales activities. In
some instances, these incentives may be offered only to certain
institutions whose representatives provide services in connection with the
sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY ASSET MANAGER: INCOME
FIDELITY ASSET MANAGER(Trademark)
FIDELITY ASSET MANAGER: GROWTH
FUNDS OF FIDELITY CHARLES STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 20, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated November 20, 1995). Please retain this
document for future reference. The funds' financial statements and
financial highlights, included in each fund's Annual Report for the fiscal
year ended September 30, 1995 are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-888 .
TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Portfolio Transactions

Valuation of Portfolio Securities

Performance

Additional Purchase and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts

Distribution and Service Plans

Contracts with FMR Affiliates

Description of the Trust

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
FFM -ptb- 1195
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF ASSET MANAGER: INCOME
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 10% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF ASSET MANAGER
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U. S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U. S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 10% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF ASSET MANAGER: GROWTH
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U. S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing and selling precious metals, or from purchasing or
selling options and futures contracts or from investing in securities or
other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limit
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (iv)
would exceed 10% of the fund's net assets.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to invest more than 15% of its
total assets in precious metals.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the
funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions invo lving
affiliated financial institutions.
ASSET ALLOCATION. The short-term class includes all types of domestic and
foreign securities and short-term instruments with remaining maturities of
three years or less. FMR will seek to maximize total return with respect to
Asset Manager and Asset Manager: Growth, and will seek to maximize income
with respect to Asset Manager: Income, within this asset class by taking
advantage of yield differentials between different instruments, issuers,
and currencies. Short-term instruments may include corporate debt
securities, such as commercial paper and notes; government securities
issued by U.S. or foreign governments or their agencies or
instrumentalities; bank deposits and other financial institution
obligations; repurchase agreements involving any type of security; and
other similar short-term instruments. These instruments may be denominated
in U.S. dollars or foreign currency.
The bond class includes all varieties of domestic and foreign fixed-income
securities with maturities greater than three years. FMR will seek to
maximize total return within the bond class by adjusting the fund's
investments in securities with different credit qualities, maturities,
and coupon or dividend rates, and by seeking to take advantage of yield
differentials between securities. Securities in this class may include
bonds, notes, adjustable-rate preferred stocks, convertible bonds,
mortgage-related and asset-backed securities, domestic and foreign
government and government agency securities, zero coupon bonds, and other
intermediate and long-term securities. As with the short-term class, these
securities may be denominated in U.S. dollars or foreign currency. Asset
Manager and Asset Manager: Growth may also invest in lower quality,
high-yielding debt securities (commonly referred to as "junk bonds").
Asset Manager currently intends to limit its investments in these
securities, as rated by Moody's and S&P, to less than 35% of its assets and
to 20% of its total assets, if rated by FMR. Asset Manager: Growth
currently intends to limit its investments in these securities to less than
35% of its assets. Asset Manager: Income may invest up to 5% of its
assets in lower-quality convertible bonds.
The stock class includes domestic and foreign equity securities of all
types (other than adjustable rate preferred stocks which are included in
the bond class). FMR seeks to maximize total return within this asset class
by actively allocating assets to industry sectors expected to benefit from
major trends, and to individual stocks that FMR believes to have superior
investment potential. When FMR selects equity securities, it considers both
growth and anticipated dividend income. Securities in the stock class may
include common stocks, fixed-rate preferred stocks (including convertible
preferred stocks), warrants, rights, depositary receipts, securities of
closed-end investment companies, and other equity securities issued by
companies of any size, located anywhere in the world.
In making asset allocation decisions, FMR will evaluate projections of
risk, market conditions, economic conditions, volatility, yields, and
returns. FMR's management will use database systems to help analyze past
situations and trends, research specialists in each of the asset classes to
help in securities selection, portfolio management professionals to
determine asset allocation and to select individual securities, and its own
credit analysis as well as credit analyses provided by rating services.
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in
pools of consumer loans (generally unrelated to mortgage loans) and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend upon payment of the underlying loans by
individuals, although the securities may be supported by letters of credit
or other credit enhancements. The value of asset-backed securities may also
depend on the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing the
credit enhancement.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
funds may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund
assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Because a fund is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the fund's other investments. If a fund remains
substantially fully invested at a time when delayed-delivery purchases are
outstanding, the delayed-delivery purchases may result in a form of
leverage. When delayed-delivery purchases are out standing, the fund will
set aside appropriate liquid assets in a segregated custodial account to
cover its purchase obligations. When a fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
EXPOSURE TO FOREIGN MARKETS. Under normal conditions, Asset Manager
intends to limit its investments in foreign securities to no more than 50%
of total assets. Asset Manager: Income limits its aggregate investments in
securities of foreign issuers to 35% of its total assets under normal
conditions, but does not limit the amount that may be invested in one
country or currency. Asset Manager: Growth does not have a limitation on
the amount of fund assets that may be invested in foreign securities.
Foreign securities, foreign currencies, and securities issued by U.S.
entities with substantial foreign operations may involve significant risks
in addition to the risks inherent in U.S. investments. The value of
securities denominated in foreign currencies and of dividends and interest
paid with respect to such securities will fluctuate based on the relative
strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depository Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depository Receipts (EDRs) and Global Depository
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, Options and Futures Relating to Foreign
Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put
and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's Composite Index of 500
Stocks (S&P 500). Futures can be held until their delivery dates, or can be
closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine
some restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market
securities, and swap agreements to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are
subject to the credit risks associated with the issuer of the security, and
their values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. FMR will use its
judgment in determining whether indexed securities should be treated as
short-term instruments, bonds, stocks, or as a separate asset class for
purposes of the fund's investment allocations, depending on the individual
characteristics of the securities. Indexed securities may be more volatile
than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, each fund has received permission to lend money
to, and borrow money from, other funds advised by FMR or its affiliates.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice. A
fund will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations (1) and
(5) for each fund). For purposes of these limitations, each fund generally
will treat the borrower as the "issuer" of indebtedness held by the fund.
In the case of loan participations where a bank or other lending
institution serves as financial intermediary between each fund and the
borrower, if the participation does not shift to the fund the direct
debtor-creditor relationship with the borrower, SEC interpretations require
the fund, in appropriate circumstances, to treat both the lending bank or
other lending institution and the borrower as "issuers" for these purposes.
Treating a financial intermediary as an issuer of indebtedness may restrict
a fund's ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate
debt securities has been in existence for many years and has weathered
previous economic downturns, the 1980s brought a dramatic increase in the
use of such securities to fund highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of the high-yield bond market, especially during
periods of economic recession. In fact, from 1989 to 1991, the percentage
of lower-quality securities that defaulted rose significantly above prior
levels, although the default rate decreased in 1992 and 1993.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and a fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by a fund. In considering investments
for the fund, FMR will attempt to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
Each fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
MORTGAGE-BACKED SECURITIES. The funds may purchase mortgage-backed
securities issued by government and non-governme nt entities such as
banks, mortgage lenders, or other financial institutions. A mortgage-backed
security is an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
funds may invest in them if FMR determines they are consistent with the
funds' investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund
purchases a security and simultaneously commits to sell that security back
to the original seller at an agreed-upon price. The resale price reflects
the purchase price plus an agreed-upon incremental amount which is
unrelated to the coupon rate or maturity of the purchased security. The
securities purchased by a fund are used to collateralize the repurchase
obligation. As such, they are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not presently
appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES. A fund may enter into short sales with respect to stocks
underlying its convertible security holdings. For example, if FMR
anticipates a decline in the price of the stock underlying a convertible
security a fund holds, it may sell the stock short. If the stock price
subsequently declines, the proceeds of the short sale could be expected to
offset all or a portion of the effect of the stock's decline on the value
of the convertible security. Each fund currently intends to hedge no more
than 15% of its total assets with short sales on equity securities
underlying its convertible security holdings under normal circumstances.
When a fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities) and will be required to
hold them aside while the short sale is outstanding. A fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values , mortgage securities, corporate borrowing rates, or
other factors such as security prices or inflation rates. Swap agreements
can take many different forms and are known by a variety of names. A fund
is not limited to any particular form of swap agreement if FMR determines
it is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its dividends, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government, a government agency, or a
corporation in zero coupon form.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contracts"), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Generally, commissions for investments traded on foreign
exchanges will be higher than for investments traded on U.S. exchanges
and may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic fa ctors and trends, portfolio
strategy, and performance of accounts; effect securities transactions, and
perform functions incidental thereto (such as clearance and settlement).
The selection of such broker-dealers generally is made by FMR (to the
extent possible consistent with execution considerations) in accordance
with a ranking of broker-dealers determined periodically by FMR's
investment staff based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non- affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
The funds' portfolio turnover rates for the fiscal years ended September
30, 1995 and 1994 are illustrated in the table below. Because a high
turnover rate increases transaction costs and may increase taxable gains,
FMR carefully weighs the anticipated benefits of short-term investing
against these consequences. An increased turnover rate is due to a
greater volume of shareholder purchase orders, short-term interest rate
volatility and other special market conditions.
Portfolio Turnover Rates

1995 1994

Asset Manager: Income 157% 83%

Asset Manager 137% 109%

Asset Manager: Growth 119% 104%

The tables below list the total brokerage commissions paid by each
fund, the percentage of brokerage commissions paid to brokerage firms that
provided research services, and the dollar amount of commissions
paid to FBSI for the fiscal periods ended September 30, 1995, 1994, and
1993. The funds pay both commissions and spreads in connection with the
placement of portfolio transactions. FBSI is paid on a commission basis.
The tables also list the the percentage of each fund's aggregate dollar
amount of transactions and the percentage of the total transactions
executed through FBSI during the same periods. The difference between
the percentage of brokerage commissions paid to and the percentage of
the dollar amount of transactions effected through FBSI is a result
of the low commission rates charged by FBSI.
ASSET MANAGER: INCOME

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fiscal Year TOTAL % Paid Commissions % of % of
Ended to Firms Paid Commissions Transactions
September 30 Providing To FBSI Paid Effected
Research to FBSI through FBSI

1995 $ 290,388 92.16% $ 56,656 19.51% 34.46%

1994 $ 151,340 65.22% $ 48,385 20.85% 32.10%

1993* $ 77,361 69% $ 17,247 22% 41%

</TABLE>

* From October 1, 1992 (commencement of operations).
ASSET MANAGER

1995 $ 14,131,961 85.29% $ 2,245,397 15.89% 32.24%

1994 $ 8,744,778 64.70% $ 2,265,882 16.77% 30.18%

1993 $ 8,953,533 76.20% $ 1,218,609 13.60% 27.40%

</TABLE>

ASSET MANAGER: GROWTH

1995 $ 5,726,110 92.68% $ 686,080 11.98% 28.24%

1994 $ 3,279,125 69.09% $ 602,161 12.69% 24.26%

1993 $ 2,023,460 84.09% $ 138,000 6.80% 17.68%

</TABLE>

During fiscal 1995, Asset Manager: Income paid $ 267,609 in
commissions to brokerage firms that provided research services involving
approximately $ 167,921,390 of transactions; during fiscal
199 5 , Asset Manager paid $ 12,052,535 in commissions to
brokerage firms that provided research services involving approximately
$ 5,955,780,000 of transactions ; during fiscal 1995, Asset
Manager: Growth paid $5,309,960 in commissions to brokerage firms that
provided research services involving approximately $2,396,104,749 of
transactions . The provision of research services was not necessarily a
factor in the placement of all this business with such firms.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the U.S. are valued at last sale price or, if no sale
has occurred, at the closing bid price. Most equity securities for which
the primary market is outside the U.S. are valued using the official
closing price or the last sale price in the principal market where they are
traded. If the last sale price (on the local exchange) is unavailable, the
last evaluated quote or last bid price is normally used. Short-term
securities are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. Convertible
securities and fixed-income securities are valued primarily by a pricing
service that uses a vendor security valuation matrix which incorporates
both dealer-supplied valuations and electronic data processing techniques.
This two-fold approach is believed to more accurately reflect fair value
because it takes into account appropriate factors such as institutional
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data,
without exclusive reliance upon quoted, exchange, or over-the counter
prices. Use of pricing services has been approved by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by a fund are
determined as of such time for the purpose of computing the fund's net
asset value. Foreign security prices are furnished by independent brokers
or quotation services which express the value of securities in their local
currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local currency into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of net
asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be valued
as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing the fund's
interest and dividend income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive distributions
during the period, dividing this figure by the fund's net asset value (NAV)
at the end of the period, and annualizing the result (assuming compounding
of income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. Dividends from equity
investments are treated as if they were accrued on a daily basis, solely
for the purposes of yield calculations. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income. For a fund's investments denominated in
foreign currencies, income and expenses are calculated first in their
respective currencies, and are then converted to U.S. dollars, either when
they are actually converted or at the end of the 30-day or one month
period, whichever is earlier. Capital gains and losses generally are
excluded from the calculation as are gains and losses from currency
exchange rate fluctuations.
Income calculated for the purposes of calculating a fund's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
In calculating each fund's yield, the funds may from time to time use a
security's coupon rate instead of its yield to maturity in order to reflect
the risk premium on that security. This practice will have the effect of
reducing a fund's yield.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On September 29, 1995, the 13-week and 39-week long-term moving
averages were $ 11.28 and $ 10.82 , respectively, for Fidelity
Asset Manager: Income, $ 15.22 and $ 14.41 , respectively, for
Fidelity Asset Manager, and $ 14.64 and $ 13.64 , respectively
for Fidelity Asset Manager: Growth.
HISTORICAL FUND RESULTS. The following table shows the funds' total returns
for periods ended September 30, 1995.
Average Annual Total Returns Cumulative Total Returns

One Five Life of One Five Life of

Year Years Fund Year Years Fund

Asset Manager: Income 11.99 % n/a 9.42 %* 11.99 % n/a 31.02 %*+

Asset Manager 10.09 % 14.66 % 12.58 %** 10.09 % 98.18 % 122.86 %**

Asset Manager: Growth 9.95 % n/a 13.84 %*** 9.95 % n/a 62.73 %***+

</TABLE>

* From October 1, 1992 (commencement of operations).
** From December 28, 1988 (commencement of operations).
*** From December 30, 1991 (commencement of operations).
+ If FMR had not reimbursed certain fund expenses during these
periods, Asset Manager: Income's and Asset Manager: Growth's total returns
would have lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the Standard and Poor's Composite Index of 500 Stocks (S&P
500(registered trademark)), the Dow Jones Industrial Average (DJIA), and
the cost of living (measured by the Consumer Price Index, or CPI) over the
same period. The CPI information is as of the month end closest to the
initial investment date for each fund. The S&P 500 and the DJIA comparisons
are provided to show how each fund's total return compared to the record of
a broad average of common stock prices and a narrower set of stocks of
major industrial companies, respectively, over the same period. Each fund
has the ability to invest in securities not included in either index, and
its investment portfolio may or may not be similar in composition to the
indices. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions and other costs of investing.
During the period from October 1, 1992 (commencement of operations) to
September 30, 199 5 , a hypothetical $10,000 investment in Fidelity
Asset Manager: Income would have grown to $ 13,102 assuming all
distributions were reinvested. This was a period of fluctuating interest
rates, bond prices, and stock prices and the figures that follow should not
be considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY ASSET MANAGER: INCOME INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA CPI**
September 30 Initial Reinvested Reinvested Value
$10,000 Income Capital Gain
Investment Distributions Distributions

1995 $ 11,460 $ 1,553 $ 87 $ 13,102 $ 15,203 $ 15,886 $ 10,842

1994 10,690 $ 928 $ 82 $ 11,700 $11,717 $12,429 10,573

1993* 11,070 $ 462 $ 0 $ 11,532 $11,301 $11,190 10,269

</TABLE>

* From October 1, 1992 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on October 1,
1992, the net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$ 11,536 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $ 1,360 for
dividends and $ 80 for capital gains distributions. Tax consequences
of different investments have not been factored into the above figures.
During the period from December 28, 1988 (commencement of operations) to
September 30, 1995, a hypothetical $10,000 investment in Fidelity Asset
Manager would have grown to $ 22,286 assuming all distributions were
reinvested. This was a period of fluctuating interest rates, bond prices,
and stock prices and the figures that follow should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
FIDELITY ASSET MANAGER INDICES

1995 $ 15,470 $ 4,653 $ 2,163 $ 22,286 $ 26,027 $ 27,404 $ 12,714

1994 $ 14,580 $ 3,870 $ 1,793 $ 20,243 $ 20,059 $ 21,441 12,398

1993 $ 14,970 $ 3,286 $ 1,284 $ 19,540 $ 19,347 $ 19,303 12,041

1992 $ 13,500 $ 1,898 $ 924 $ 16,322 $ 17,119 $ 17,250 11,726

1991 $ 13,020 $ 1,287 $ 287 $ 14,594 $ 15,415 $ 15,446 11,386

1990 $ 10,640 $ 371 $ 234 $ 11,245 $ 11,751 $ 12,122 11,012

1989* $ 11,390 $ 0 $ 0 $ 11,390 $ 12,948 $ 12,808 10,373

</TABLE>

* From December 28, 1988 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on
December 28, 1988, the net amount invested in fund shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$15,674. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $3,220 for dividends
and $1,530 for capital gains distributions. Tax consequences of different
investments have not been factored into the above figures.
During the period from December 30, 1991 (commencement of operations) to
September 30, 1995, a hypothetical $10,000 investment in Fidelity Asset
Manager : Growth would have grown to $ 16,273 assuming all
distributions were reinvested. This was a period of fluctuating interest
rates, bond prices, and stock prices and the figures that follow should not
be considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
FIDELITY ASSET MANAGER: GROWTH INDICES

1995 $ 14,880 $ 524 $ 869 $ 16,273 $ 15,989 $ 17,132 $ 11,109

1994 13,910 $ 272 $ 618 $ 14,800 $ 12,323 $ 13,404 10,834

1993 13,770 $ 178 $ 95 $ 14,043 $ 11,885 $ 12,067 10,522

1992* 11,160 $ 0 $ 0 $ 11,160 $ 10,517 $ 10,784 10,247

</TABLE>

* From December 30, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on December
30, 1991, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$ 11,225 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $ 430 for
dividends and $ 760 for capital gains distributions. Tax consequences
of different investments have not been factored into the above figures.
PERFORMANCE COMPARISONS. The Asset Allocation Composite Index is a
hypothetical representation of the performance of the combination of Asset
Manager's three asset classes according to their respective weighting in
the fund's neutral mix (20% - short-term instruments; 40% - bonds; and 40%
- - stocks). The Aggressive Asset Allocation Composite Index is a
hypothetical representation of the performance of the combination of Asset
Manager: Growth's three asset classes according to their respective
weighting in the fund's neutral mix (5% - short-term instruments; 30% -
bonds; and 65% - stocks). The Conservative Asset Allocation Composite Index
is a hypothetical representation of the performance of the combination of
Asset Manager: Income's three asset classes according to their respective
weighting in the fund's neutral mix (50% - short-term instruments; 30% -
bonds; and 20% stocks). The following indices are used to calculate the
three asset allocation composite indices: the Solomon Brothers 3-Month
T-Bill Total Rate of Return Index, representing the average of T-Bill rates
for each of the prior three months, adjusted to a bond equivalent yield
basis (short-term instruments); the Lehman Brothers Treasury Bond Index, a
widely utilized benchmark of bond market performance that includes
virtually all long-term public obligations of the U.S. Treasury (bonds);
and the S&P 500, which represents common stocks (stocks).
Each fund has the ability to invest in securities that are not included in
any of the indices, and each fund's actual investment portfolio may not
reflect the composition or the weighting of the indices used. The S&P 500
and the asset allocation composite indices include reinvestment of income
or dividends and are based on the prices of unmanaged groups of stocks or
U.S. Treasury obligations. Unlike the funds' returns, the indices do not
include the effect of paying brokerage commissions, spreads, or other costs
of investing. Historical results are used for illustrative purposes only
and do not reflect the past or future performance of the funds.
The following table represents the comparative calendar year-to-year
performance of the funds' asset classes:
SHORT-TERM INSTRUMENTS BONDS STOCKS

1994 4.24% -3.38% 1.32%

1993 3.09 10.68 10.08

1992 3.61 7.21 7.62

1991 5.75 15.29 30.47

1990 7.90 8.54 -3.10

1989 8.64 14.38 31.69

1988 6.76 6.99 16.61

1987 5.91 2.00 5.10

1986 6.23 15.61 18.56

1985 7.82 20.91 31.57

From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All
Taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 757 taxable money market funds. The Bond Fund Report
AverageS(trademark)/All Taxable, which is reported in the BOND FUND
REPORT(registered trademark), covers over 554 taxable bond funds.
When evaluating comparisons to money market funds, investors should
consider the relevant differences in investment objectives and policies.
Specifically, money market funds invest in short-term, high-quality
instruments and seek to maintain a stable $1.00 share price. The fund,
however, invests in longer-term instruments and its share price changes
daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar-cost averaging; saving for college or other
goals; charitable giving; and the Fidelity credit card. In addition,
Fidelity may reference, discuss, quote, or reprint financial or business
publications and periodicals which reference or discuss model portfolios or
allocations, current economic and political conditions, fund management,
portfolio composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services and
products. For example, Fidelity may update its management discussion and
analysis of the fund by discussing Fidelity's insight on factors affecting
the fund and its performance or by reprinting third party commentary
providing similar information. Fidelity may also reprint, and use as
advertising and sales literature, articles from Fidelity Focus, an
quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of September 30, 1995, FMR advised over $ 26.5 billion in tax-free
fund assets, $ 77 billion in money market fund assets, $ 226
billion in equity fund assets, $ 55 billion in international fund
assets, and $22 billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
The fund may be advertised as an investment choice under the Fidelity
College Savings Plan or the Fidelity Investor Card mutual fund option.
Advertising may contain illustrations of projected future college costs
based on assumed rates of inflation and examples of hypothetical
performance. Advertising for the Fidelity College Savings Plan mutual fund
option may be used in conjunction with advertising for the Fidelity College
Savings Plan brokerage option, a product offered through Fidelity Brokerage
Services, Inc. The Fidelity Investor Card is a product offered through
Fidelity Trust Company.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1995: New Year's
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
NYSE may modify its holiday schedule at any time. In addition, the funds
will not process wire purchases and redemptions on days when the Federal
Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service can not deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of each fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that each fund's income is derived from qualifying dividends.
Because each fund may earn other types of income, such as interest, income
from securities loans, non-qualifying dividends, and short-term capital
gains, the percentage of dividends from the fund that qualifies for the
deduction generally will be less than 100%. Each fund will notify corporate
shareholders annually of the percen tage of fund dividends that
qualifies for the dividends-received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation. Gains (losses) attributable to foreign
currency fluctuations are generally taxable as ordinary income, and
therefore will increase (decrease) dividend distributions.
Short-term capital gains are distributed as dividend income. Each fund
will send each shareholder a notice in January describing the tax status of
dividends and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
As of September 30, 1995, Asset Manager: Growth hereby designate s
approximately $ 1,725,000 as a capital gain dividend for the purpose
of the dividend-paid deduction.
As of September 30, 1995, Asset Manager: Income had a capital loss
carryforward aggregating approximately $1,436,000. This loss
carryforward, will expire on September 30 , 2003, and is available to
offset future capital gains.
As of September 30, 1995, Asset Manager had a capital loss carryforward
aggregating approximately $29,154,000. This loss carryforward will
expire on September 30 , 2003 and is available to offset
future capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because a fund does not currently anticipate that securities of
foreign issuers will constitute more than 50% of its total assets at the
end of its fiscal year, shareholders should not expect to claim a foreign
tax credit or deduction on their federal income tax returns with respect to
foreign taxes.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Charles Street Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. The
business address of each Trustee and officer who is an "interested person"
(as defined in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (* ).
*EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and previously served as
a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (66), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM J. HAYES (61), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
ROBERT BECKWITT (38), is manager and Vice President of Fidelity Asset
Manager: Income, Fidelity Asset Manager, and Fidelity Asset Man a ger:
Growth and is an employee of FMR. Previously, he managed Spartan Government
Income and Spartan Long-Term Government Bond. Mr. Beckwitt jointed Fidelity
in 1986.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995)
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended September 30, 1995.
COMPENSATION TABLE
Aggregate Compensation

Asset $ 0 $ 226 $ 218 $ 278 $ 0 $ 226 $ 229 $ 0 $ 226 $ 226 $ 226 $ 223
Manager:
Income

Asset 0 5,038 4,845 6,208 0 5,038 5,099 0 5,032 5,038 5,038 4,985
Manager

Asset 0 1,291 1,241 1,592 0 1,291 1,307 0 1,290 1,291 1,292 1,278
Manager:
Growth

</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*

J. Gary Burkhead** $ 0 $ 0 $ 0

Ralph F. Cox 5,200 52,000 125,000

Phyllis Burke Davis 5,200 52,000 122,000

Richard J. Flynn 0 52,000 154,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 123,500

Donald J. Kirk 5,200 52,000 125,000

Peter S. Lynch** 0 0 0

Gerald C. McDonough 5,200 52,000 125,000

Edward H. Malone 5,200 44,200 128,000

Marvin L. Mann 5,200 52,000 125,000

Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the "Plan"). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee. The amount paid to the Trustee under the Plan
will be determined based upon the performance of such investments. Deferral
of Trustees' fees in accordance with the Plan will have a negligible effect
on the fund's assets, liabilities, and net income per share, and will not
obligate the fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. The fund may invest in
such designated securities without shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On September 30, the Trustees and officers of each fund owned, in the
aggregate, less than 1 % of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although each
fund's current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on behalf of
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated October
1, 1994, which were approved by shareholders on September 21, 1994.
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts.
The group fee rate for Asset Manager and Asset Manager: Growth is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 351 billion of group net
assets - the approximate level for September 1995 - was .3112 %,
which is the weighted average of the respective fee rates for each level of
group net assets up to $ 351 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

0 - $3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3253

36 - 42 .3400 250 .3223

42 - 48 .3350 275 .3198

48 - 66 .3250 300 .3175

66 - 84 .3200 325 .3153

84 - 102 .3150 350 .3133

102 - 138 .3100

138 - 174 .3050

174 - 228 .3000

228 - 282 .2950

282 - 336 .2900

Over 336 .2850

Prior to October 1, 1994, the group fee rate was based on a schedule with
breakpoints ending at .3100% for average group assets in excess of $102
billion. The group fee rate breakpoints shown above for average group
assets in excess of $138 billion and under $228 billion were voluntarily
adopted by FMR on January 1, 1992. The additional breakpoints shown above
for average group assets in excess of $228 billion were voluntarily adopted
by FMR on November 1, 1993. The funds' current management contracts dated
October 1, 1994 which were approved by shareholders of the funds on
September 21, 1994, reflect these extensions of the group fee rate
schedule.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints. The revised group fee
rate schedule provides for lower management fee rates as FMR's assets under
management increase. The fund's current management contract reflects the
group fee rate schedule above for average group assets under $210 billion,
the group fee rate schedule voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

138 - $174 billion .3050% $ 150 billion .3371%

174 - 210 .3000 175 .3325

210 - 246 .2950 200 .3284

246 - 282 .2900 225 .3249

282 - 318 .2850 250 .3219

318 - 354 .2800 275 .3190

354 - 390 .2750 300 .3163

Over 390 .2700 325 .3137

350 .3113

375 .3090

400 .3067

The group fee rate for Asset Manager: Income is calculated on a cumulative
basis pursuant to the graduated schedule shown on the left of the chart
below. On the right, the effective annual fee rate schedule shows the
result of cumulatively applying the annualized rates at varying asset
levels. For example, the effective annual fee rate at $ 351 billion
of group net assets - the approximate level for September 1995 - was
.1493 %, which is the weighted average of the respective fee rates
for each level of group net assets up to $ 351 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

0 - $3 billion .3700% $ 0.5 billion .3700%

3 - 6 .3400 25 .2664

6 - 9 .3100 50 .2188

9 - 12 .2800 75 .1986

12 - 15 .2500 100 .1869

15 - 18 .2200 125 .1793

18 - 21 .2000 150 .1736

21 - 24 .1900 175 .1695

24 - 30 .1800 200 .1658

30 - 36 .1750 225 .1629

36 - 42 .1700 250 .1604

42 - 48 .1650 275 .1583

48 - 66 .1600 300 .1565

66 - 84 .1550 325 .1548

84 - 120 .1500 350 .1533

120 - 174 .1450 400 .1507

174 - 228 .1400

228 - 282 .1375

282 - 336 .1350

Over 336 .1325

Prior to October 1, 1994, the group fee rate was based on a schedule with
breakpoints ending at .1400% for average group assets in excess of $174
billion. The group fee rate breakpoints shown above for average group
assets in excess of $120 billion and under $228 billion were voluntarily
adopted by FMR on November 1, 1993 and approved by shareholders of the fund
on September 21, 1994. The fund's current management contract dated October
1, 1994, reflects this extension of the group fee rate schedule.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints. The revised group fee
rate schedule is identical to the above schedule for average group asset
under $156 billion. For average group assets in excess of $156 billion, the
group fee rate schedule voluntarily adopted is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate

120 - $156 billion .1450% $ 150 billion .1736%

156 - 192 .1400 175 .1690

192 - 228 .1350 200 .1652

228 - 264 .1300 225 .1618

264 - 300 .1275 250 .1587

300 - 336 .1250 275 .1560

336 - 372 .1225 300 .1536

Over 372 .1200 325 .1514

350 .1494

375 .1476

400 .1459

The individual fund fee rate for Asset Manager: Income is .35%. The
individual fund fee rate for both Asset Manager and Asset Manager: Growth
is .40%. Based on the average group net assets of the funds advised by FMR
for September 1995, the annual management fee rates would be calculated as
follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Individual Fund Management
Group Fee Rate Fee Rate Fee Rate

Asset Manager: Income . 1493 % + .35% = . 4993 %

Asset Manager . 3112 % + .40% = . 7112 %

Asset Manager: Growth . 3112 % + .40% = . 7112 %

</TABLE>

One-twelfth of this annual rate is applied to each fund's net assets
averaged for the most recent month, giving a dollar amount, which is the
fee for that month.
During the fiscal years ended September 30, 1995, 1994, and 1993, FMR
received $ 2,611,365 , $ 2,035,344 , and $ 348,635 ,
respectively, for its services as investment adviser of Asset Manager:
Income. These fees were equivalent to .50 %, . 51 %, and
. 44 %, respectively, of the average net assets of the fund for each
of these years. After reimbursement, these fees were equivalent to .22%
and .00% of the fund's average net assets for September 30, 1994 and 1993,
respectively.
During the fiscal years ended September 30, 1995, 1994, and 1992, FMR
received $ 79,977,190 , $ 74,497,081 , and $34,058,617,
respectively, for its services as investment adviser of Asset Manager.
These fees were equivalent to .72% of the average net assets of the
fund for each of these years.
During the fiscal years ended September 30, 1995, 1994, and 1993, FMR
received fees of $20,425,159, $1 7,630,796 , and $4,107,172 ,
respectively, for its services as investment adviser to Asset Manager:
Growth. The fees were equivalent to .72 %, . 72 %, and
.73%, respectively, of the average net assets of the fund for each of
these periods . After reimbursement, the fee for 1993 was equivalent to
.63% of the fund's average net assets.
To comply with the California Code of Regulations, FMR will reimburse a
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating a fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
SUB-ADVISERS. On behalf of Asset Manager, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East dated October 1, 1994. On behalf
of Asset Manager: Income and Asset Manager: Growth, FMR has entered into
amended sub-advisory agreements with FMR U.K. and FMR Far East dated
October 1, 1994. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from the
sub-advisers. On behalf of the funds, FMR may also grant the sub-advisers
investment management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the funds
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of
FMR U.K. and FMR Far East. For providing non-discretionary investment
advice and research services, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
On behalf of the funds, for providing discretionary investment management
and executing portfolio transactions, FMR pays FMR U.K. and FMR Far East a
fee equal to 50% of its monthly management fee rate with respect to each
fund's average net assets managed by the sub-adviser on a discretionary
basis.
For providing investment advice and research services, on behalf of Asset
Manager Income:, the fees paid to the sub-advisers for fiscal 1995, 1994,
and 1993 were as follows:
ASSET MANAGER: INCOME
Fiscal year FMR U.K. FMR Far East

1995 $ 21,531 $ 22,067

1994 $ 12,251 $ 17,342

1993 $ 4,908 $ 7,883

For providing investment advice and research service on behalf of Asset
Manager the fees paid to the sub-advisers for fiscal 1995, 1993, and 1992
were as follows:
ASSET MANAGER
Fiscal year FMR U.K. FMR Far East

1995 $ 881,661 $ 875,602

1994 $ n/a $ n/a

1993 $ n/a $ n/a

For providing investment advice and research service on behalf of Asset
Manager: Growth the fees paid to the sub-advisers for fiscal 1995, 1993,
and 1992 were as follows:
ASSET MANAGER: GROWTH
Fiscal year FMR U.K. FMR Far East

1995 $ 390,042 $ 379,745

1994 $ 167,841 $ 221,242

1993 $ 74,400 $ 115,805

No fees were paid to any of the sub-advisers on behalf of any of the
fund's for providing investment management and executing portfolio
transactions on a discretionary basis.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect payment by
the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
The Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a fund other than those made to FMR
under its management contract with the fund. To the extent that each Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
The Plans were approved by FMR as the then sole shareholder on July 16,
1992 for Asset Manager: Income; by shareholders of Asset Man a ger on
September 13, 1989; and by shareholders of Asset Manager: Growth on
September 16, 1992.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
FSC is transfer, dividend disbursing, and shareholder servicing agent
for each fund. FSC receives annual account fees and asset-based fees for
each retail account and certain institutional accounts based on account
size. In addition, the fees for retail accounts are subject to increase
based on postal rate changes. With respect to certain institutional
retirement accounts, FSC receives asset-based fees only. With respect to
certain other institutional retirement accounts, FSC receives annual
account fees and asset-based fees based on fund type. The asset-based fees
are subject to adjustment if the year-to-date total return of the Standard
& Poor's Composite Index of 500 Stocks is greater than positive or negative
15%. FSC also collects small account fees from certain accounts with
balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's net
asset value per share and dividends, and maintains each fund's accounting
records. The annual fee rates for these pricing and bookkeeping services
are based on each fund's average net assets, specifically, .06% for Asset
Manager and Asset Manager: Growth and .04% for Asset Manger: Income for the
first $500 million of average net assets and .03% for Asset Man a ger
and Asset Manager: Growth and .02% for Asset Manager: Income for average
net assets in excess of $500 million. The fee is limited to a minimum of
$45,000 and a maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
Pricing and Bookkeeping Fees

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993

Fidelity Asset Manager: Income $ 204,869 $ 160,419 $ 50,625

Fidelity Asset Manager $ 831,965 $ 801,869 $ 777,349

Fidelity Asset Manager: Growth $ 767,815 $ 719,002 $ 287,896

</TABLE>

FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. Securities lending fees for Asset Manager for
fiscal 1995, 1994, and 1993 were $ 45,855 , $ 46,490 , and
$25,830. No securities lending fees were paid by Asset Manager: Income
or Asset Manager: Growth during fiscal 1995, 1994 or 1993 .
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Asset Manager: Income, Fidelity Asset
Manager, and Fidelity Asset Manager: Growth are funds of Fidelity Charles
Street Trust, an open-end management investment company organized as a
Massachusetts business trust on July 7, 1981. Currently there are seven
funds in the trust: Fidelity Asset Manager, Fidelity Asset Manager: Growth,
Fidelity Asset Manager: Income, Fidelity Short-Intermediate Government Fund
(formerly Fidelity Limited Maturity Government Fund), Spartan Investment
Grade Bond Fund, Spartan Short-Term Bond Fund, and Fidelity U.S. Government
Reserves. The Declaration of Trust permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to a trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of each trust, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declarations of Trust protect Trustees
against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; the voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the heading "Shareholder
and Trustee Liability" above. Shareholders representing 10% or more of a
trust or fund may, as set forth in the Declarations of trust, call meetings
of a trust or fund for any purpose related to the trust or fund, as the
case may be, including, in the case of a meeting of an entire trust, the
purpose of voting on removal of one or more Trustees. Each trust or fund
may be terminated upon the sale of its assets to another open-end
management investment company, or upon liquidation and distribution of its
assets, if approved by vote of the holders of a majority of the trust or
the fund, as determined by the current value of each shareholder's
investment in the fund or trust. If not so terminated, each trust or fund
will continue indefinitely. Each fund of Fidelity Charles Street Trust may
invest all of its assets in another investment company.
CUSTODIAN. The Chase Manhattan Bank, N.A., 1211 Avenue of Americas, New
York, New York, 10036, is custodian of the assets of the funds. The
custodian is responsible for the safekeeping of each fund's assets and the
appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of the fund or in
deciding which securities are purchased or sold by the fund. Each fund may,
however, invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as the trust's independent accountant. The auditor examines
financial statements for the funds and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
Each fund's Annual Report for the fiscal year ended September 30, 1995
is a separate report supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to may be modified by the addition of a plus or minus
to show relative standing within the major rating categories.
FIDELITY CHARLES STREET TRUST:
FIDELITY ASSET MANAGER: INCOME

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Fund at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c .............................. Performance

4 a i............................. Charter

ii........................... The Fund at a Glance; Investment Principles and
Risks

b .............................. Investment Principles and Risks

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Fund at a Glance; Charter; Doing
Business with Fidelity

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. Cover Page; Charter

f .............................. Expenses

g i............................. Charter
.

ii............................ *
..

5A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... Charter

b ............................. Charter

c .............................. Transactions Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Cover Page; Charter

b .............................. Expenses; How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing, or a copy of
the Statement of Additional Information (SAI) dated November 20,
1995. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, call Fidelity
at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
AMI-pro-1195
This asset allocation fund seeks high current income through investments in
stocks, bonds, and short-term instruments of all types. The fund also
considers the potential for capital appreciation.
FIDELITY
ASSET
MANAGER:
INCOME
PROSPECTUS
NOVEMBER 20, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS THE FUND AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES The fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.

PERFORMANCE How the fund has
done over time.

THE FUND IN DETAIL CHARTER How the fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
The fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUND AT A GLANCE
GOAL: High current income, and capital appreciation when appropriate. As
with any mutual fund, there is no assurance that the fund will achieve its
goal.
STRATEGY: The fund diversifies across stocks, bonds, and short-term
instruments, both here and abroad, to pursue its goal. The fund has a
neutral mix which represents the way the fund's investments will generally
be allocated over the long term. This mix will vary over short-term periods
as fund management gradually adjusts the fund's holdings - within defined
ranges - based on the current outlook for the different markets.
Neutral Mix
Stocks 20%
(can range
from
(0-35%)
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 30.0
Bonds 30%
(can range
from
20-45%)
Short-term
50%
(can range
from
20-80%)
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the fund.
SIZE: As of September 30, 1995, the fund had over $ 566 million in
assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who want to diversify
among domestic and foreign stocks, bonds, short-term instruments, and other
types of securities, in one fund. If you are looking for a fund that can
invest in a wide range of security types within defined ranges in pursuit
of current income, this fund may be appropriate for you.
Because the fund owns different types of investments, its performance is
affected by a variety of factors. The value of the fund's investments and
the income they generate will vary from day to day, and generally reflect
interest rates, market conditions, and other company, political, and
economic news. Performance also depends on FMR's skill in allocating
assets. When you sell your fund shares, they may be worth more or less than
what you paid for them.

EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these
fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee to FMR. It also incurs other expenses for services
such as maintaining shareholder records and furnishing shareholder
statements and financial reports. The fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets.
Management fee .50 %

12b-1 fee None

Other expenses .29 %

Total fund operating expenses .79 %

After 3 years $ 25

After 5 years $ 44

After 10 years $ 98

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of
expenses for portfolio
management, shareholder
statements, tax reporting, and
other services. These costs
are paid from the fund's
assets; their effect is already
factored into any quoted
share price or return.
(checkmark)
FMR has voluntarily agreed to temporarily limit the fund's operating
expenses to .85% of it's average net assets.

FINANCIAL HIGHLIGHTS
The table that follows is included in the fund's Annual Report and has been
audited by Price Waterhouse LLP, independent accountants. Their report on
the financial statements and financial highlights is included in the Annual
Report. The financial statements and financial highlights are incorporated
by reference into (are legally a part of) the fund's Statement of
Additional Information.
SELECTED PER-SHARE DATA

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1.Years ended September 30 1995 1994 B 1993D

2.Net asset value, beginning of period $ 10.69 $ 11.07 $ 10.00

3.Income from Investment Operations

4. Net investment income .56 .45 .46

5. Net realized and unrealized gain (loss) on .68 (.29) 1.04
investments

6. Total from investment operations 1.24 .16 1.50

7.Less Distributions

8. From net investment income (.47) (.47) (.43)

9. From net realized gain -- (.04) --

10. In excess of net realized gain -- (.03) --

11. Total distributions (.47) (.54) (.43)

12.Net asset value, end of period $ 11.46 $ 10.69 $ 11.07

13.Total return A 11.99% 1.46% 15.32%

14.RATIOS AND SUPPLEMENTAL DATA

15.Net assets, end of period (000 omitted) $ 566,079 $ 501,349 $ 199,237

16.Ratio of expenses to average net assets .79% .71% .65%
C C

17.Ratio of net investment income to average net 5.15% 4.92% 5.19%
assets

18.Portfolio turnover rate 157% 83% 47%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL PRESENTATION OF INCOME, CAPITAL
GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
D FROM OCTOBER 1, 1992 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30,
1993
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from October 1 through September 30 .
The tables below show the fund's performance history compared to an index
and a measure of inflation. To help you compare this fund to other funds,
the chart on page displays calendar-year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995 A

Asset 11.99 9.42
Manager: % %
Income

LB Govt./ 11.29 5.80
Corp. % %
Intermediate

Consumer 2.54 2.73
Price
% %
Index

CUMULATIVE TOTAL RETURNS
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995 A

Asset 11.99 31.02
Manager: % %
Income

LB Govt./ 11.29 18.44
Corp. % %
Intermediate

Consumer 2.54 8.42
Price
% %
Index

A FROM OCTOBER 1, 1992
UNDERSTANDING
PERFORMANCE
As economic conditions
change, different types of
investments do better than
others. While Asset Manager:
Income usually invests in
stocks, bonds, and short-term
instruments, its emphasis is in
s hort-term instruments . The
fund's performance tends to be
related to changes in
short-term interest rates , but
will also reflect the
performance of the other
investments in its mix during
the time period.
(checkmark)
EXAMPLE : Let's say, hypothetically, that an investor put
$10,000 in the fund on October 1, 1992 . From that date through
September 30 , 1995, the fund's total return was 31.02%. That $10,000
would have grown to $13,102 (the ini tial investment plus 31.02 %
of $10,000).
$10,000 OVER LIFE OF FUND
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields
are calculated according to a standard that is required for all stock and
bond funds. Because this differs from other accounting methods, the quoted
yield may not equal the income actually paid to shareholders.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1993 1994
Asset Manager: Income 15.39% -1.3
6%
Competitive funds average 12.17
% -2.92%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: 15.39
Row: 9, Col: 2, Value: 12.17
Row: 10, Col: 1, Value: -1.36
Row: 10, Col: 2, Value: -2.92
(large solid box) Asset
Manager:
Income
(large hollow box) Competitive

funds
average
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX (INTERMEDIATE) is
comprised of public obligations of the U.S. Treasury, U.S. government
agencies and quasi-federal corporations, and publicly-issued, investment
grade dollar-denominated corporate debt. The index includes issues with
maturities of up to ten years.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Income Funds Average,
which currently reflects the performance of over 21 mutual funds
with similar objectives. This average, which assumes reinvestment of
distributions, is published by Lipper Analytical Services, Inc.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE .
THE FUND IN DETAIL

CHARTER
FIDELITY ASSET MANAGER: INCOME IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. In technical
terms, the fund is currently a diversified fund of Fidelity Charles Street
Trust, an open-end management investment company organized as a
Massachusetts business trust on July 7, 1981.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. Fidelity will
mail proxy materials in advance, including a voting card and information
about the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.), in London, England, and Fidelity Management & Research (Far
East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign
investments.
Robert Beckwitt is manager and Vice President of Asset Manager: Income,
which he has managed since October 1992. Mr. Beckwitt also manages Asset
Manager and Asset Manager: Growth. Previously, he managed VIP II Asset
Manager, Spartan Government Income, and Spartan Long-Term Government Bond.
Mr. Beckwitt joined Fidelity in 1986.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR, FMR Far East, and FMR
U.K. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares to carry out the fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND SEEKS A HIGH LEVEL OF CURRENT INCOME by allocating its assets
among stocks, bonds, short-term and other instruments of U.S. and foreign
issuers. The fund also considers the potential for capital appreciation.
The fund allocates its assets among the following classes, or types, of
investments. The STOCK CLASS includes equity securities of all types. The
BOND CLASS includes all varieties of fixed-income instruments with
maturities of more than three years (including adjustable-rate preferred
stocks). The SHORT-TERM CLASS includes all types of short-term instruments
with remaining maturities of three years or less. Some types of
investments, such as indexed securities, can fall into more than one asset
class. The fund may also make other investments that do not fall within
these classes.
FMR has the ability to allocate the fund's assets within specified ranges.
The fund's NEUTRAL MIX represents the benchmark for its combination
of investments in each asset class over time. FMR may change the neutral
mix from time to time. The range and approximate neutral mix for each asset
class are shown below.
Range Neutral mix
STOCK CLASS 0-35% 20%
BOND CLASS 20-45% 30%
SHORT-TERM CLASS 20-80% 50%
Asset Manager: Income's approach focuses on short-term instruments and
bonds for current income. However, its ability to invest a portion of its
assets in stocks offers the opportunity for capital appreciation, and
potentially more volatility, than other income-oriented funds.
Although the fund seeks to reduce its overall risk by diversifying among
different types of investments, the fund aggressively invests in a wide
variety of security types, including stocks and bonds issued in developed
and developing countries and derivative transactions. Since the fund is
subject to the risks of each investment type, the fund and its performance
are affected by many factors.
Stock values fluctuate in response to the activities of individual
companies and general market and economic conditions. The value of bonds
and short-term instruments fluctuates based on changes in interest rates
and in the credit quality of the issuer. The value of some of the fund's
investments may fluctuate based on other factors affecting security values
such as commodity prices and currency values. FMR may use various
investment techniques to hedge a portion of the fund's risks, but there is
no guarantee that these strategies will work as FMR intends. When you sell
your shares, they may be worth more or less than what you paid for them.
In pursuit of the fund's objective, FMR will not try to pinpoint the
precise moment when a major reallocation should be made. Instead FMR
regularly reviews the fund's allocations and makes changes gradually to
favor investments that it believes will provide the most favorable outlook
for achieving the fund's objective. Under normal circumstances, a single
reallocation will not involve more than 10% of the fund's total assets.
Although FMR uses its expertise and resources in allocating assets, FMR's
decisions may not be advantageous to the fund.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
The fund diversifies across investment types more than most mutual funds.
No one mutual fund, however, can provide an appropriate balanced investment
plan for all investors.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this
section. A complete listing of the fund's limitations and more detailed
information about the fund's investments are contained in the fund's SAI.
Policies and limitations are considered at the time of purchase; the sale
of instruments is not required in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings and recent investment strategies are described in
the fund's financial reports which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks and warrants. Common stocks,
the most familiar type, represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth
in value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions. Smaller companies
are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets, the fund may not own
more than 10% of the outstanding voting securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
Lower-quality foreign government securities are often considered to
have speculative characteristics and involve greater risk of
default or price changes, or they may already be in default. These risks
are in addition to the general risks associated with foreign securities.
The table below provides a summary of ratings assigned to debt holdings
(not including money market instruments) in the fund's portfolio. These
figures are dollar-weighted averages of month-end portfolio holdings
during fiscal 1995, and are presented as a percentage of total security
investments. These percentages are historical and do not necessarily
indicate the fund's current or future debt holdings.
FISCAL 1995 DEBT HOLDINGS, BY RATING
MOODY'S
INVESTORS SERVICE, INC. STANDARD & POOR'S
Rating Average A Rating Averag
e A
INVESTMENT GRADE

Highest quality Aaa 36.0% AAA 36.2%

High quality Aa 0.6% AA 0.8%

Upper-medium grade A 6.2% A 4.4%

Medium grade Baa 7.4% BBB 8.9%
LOWER QUALITY

Moderately speculative Ba 2.1% BB 1.7%

Speculative B 0.1% B 0.1%

Highly speculative Caa 0.1% CCC 0.1%

Poor quality Ca -- CC --

Lowest quality, no interest C C

In default, in arrears -- D --

52.5% 52.2%
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT. THE DOLLAR-WEIGHTED AVERAGE
OF DEBT SECURITIES NOT RATED DIRECTLY OR INDIRECTLY BY MOODY'S OR S&P
AMOUNTED TO 3.1 %. THIS MAY INCLUDE SECURITIES RATED BY OTHER
NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR HAS
DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY ACCOUNT FOR
1.7 %
OF THE FUND'S SECURITY INVESTMENTS. REFER TO THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.

RESTRICTIONS: Purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's
or rated in the equivalent categories by S&P, or is unrated but judged to
be of equivalent quality by FMR. The fund currently intends to limit its
investment in corporate debt securities (other than convertible debt
securities) to those of Baa-quality and above. The fund currently intends
to limit its investments in lower than Baa-quality convertible debt
securities to 5% of its assets. There is no quality restriction on foreign
government securities.
MONEY MARKET INSTRUMENTS are high-quality instruments that present minimal
credit risk. They may include U.S. Government obligations, commercial paper
and other short-term corporate obligations, and certificates of deposit,
bankers' acceptances, bank deposits, and other financial institution
obligations. These instruments may carry fixed or variable interest rates.
EXPOSURE TO FOREIGN MARKETS. For eign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments,
especially those in developing countries, more volatile.
ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be
significantly affected by changes in interest rates, the market's
perception of the issuers, and the creditworthiness of the parties
involved. Some securities may have a structure that makes their reaction to
interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for the fund, or there may be a
requirement that the fund supply additional cash to a borrower on demand.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of the fund's assets.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may
be subject to legal restrictions. Difficulty in selling securities may
result in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include convertible securities, preferred stocks,
securities of closed-end investment companies and real estate-related
investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer. The fund also may not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering the fund's securities. The fund may also lend money to other
funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks a high level of current income by allocating its assets
among stocks, bonds, short-term instruments and other investments. With
respect to 75% of total assets, the fund may not invest more than 5% of its
total assets in any one issuer and may not own more than 10% of the
outstanding voting securities of a single issuer. The fund may not invest
more than 25% of its total assets in any one industry. The fund may borrow
only for temporary or emergency purposes, but not in an amount exceeding
33% of its total assets. Loans, in the aggregate, may not exceed 33% of the
fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above . 37 %, and it drops
as total assets under management increase.
For September 1995, the group fee rate was .1493% . The individual
fund fee rate is .35%. The total management fee rate for fiscal 1995
was .50% .
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's investments that the
sub-adviser manages on a discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing the fund's investments, and handling securities loans. In fiscal
199 5 , the fund paid FSC fees equal to .24% of its average net
assets.
The fund also pays other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by the fund to reduce the fund's custodian or transfer
agent fees.
The fund has adopted a Distribution and Service Plan. This plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of fund shares. This may include payments to third
parties, such as banks or broker-dealers, that provide shareholder support
services or engage in the sale of the fund's shares. It is important to
note, however, that the fund does not pay FMR any separate fees for this
service.
The fund's portfolio turnover rate for fiscal 1995 was 157% . This
rate varies from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these effects
when evaluating the anticipated benefits of short-term investing.
YOUR ACCOUNT

DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in the fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $3 35 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. The fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
$ MINIMUM INVESTMENTS
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services or a Fidelity Payroll Deduction Program account in
the fund. Refer to the program materials for details.

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to "Fidelity
check payable to Asset Manager:
"Fidelity Asset Income." Indicate your
Manager: Income." Mail fund account number
to the address on your check and mail
indicated on the to the address printed
application. on your account
statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity Asset
Bank Routing Manager: Income." and
#021001033, include your account
Account #00163053. number and your
Specify "Fidelity Asset name.
Manager: Income." and
include your new
account number and
your name.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

</TABLE>

A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends are distributed monthly.
Capital gains are distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. The fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When the fund deducts a distribution from its NAV, the reinvestment price
is the fund's NAV at the close of business that day. Cash distribution
checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
The fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates the fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The fund's investments with remaining maturities of 60 days or less are
valued on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Other assets are valued primarily on
the basis of market quotations or, if quotations are not readily available
or if the values have been materially affected by events occurring after
the closing of a foreign market, by a method that the Board of Trustees
believes accurately reflects fair value. Foreign securities are valued on
the basis of quotations from the primary market in which they are traded,
and are translated from the local currency into U.S. dollars using current
exchange rates.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees the fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUND THROUGH A BROKER, who may charge you
a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when the fund is priced on
the following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may , at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the fund without
reimbursement from the fund. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY CHARLES STREET TRUST:
FIDELITY ASSET MANAGER: GROWTH

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Fund at a Glance; Who May Want
to Invest

3 a .............................. Financial Highlights

b .............................. *

c .............................. Performance

4 a i............................. Charter

ii........................... The Fund at a Glance; Investment Principles and
Risks

b .............................. Investment Principles and Risks

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Fund at a Glance; Charter; Doing
Business with Fidelity

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. Cover Page; Charter

f .............................. Expenses

g i............................. Charter
.

ii............................ *
..

5A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... Charter

b ............................. Charter

c .............................. Transactions Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

7 a .............................. Cover Page; Charter

b .............................. Expenses; How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable

FIDELITY
ASSET
MANAGER:
GROWTH
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing, or a copy of
the Statement of Additional Information (SAI) dated November 20,
1995. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, call Fidelity
at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
AMG-pro-1195
This asset allocation fund seeks to maximize total return over the long
term through investments in stocks, bonds, and short-term instruments of
all types.
PROSPECTUS
NOVEMBER 20, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS THE FUND AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES The fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.

PERFORMANCE How the fund has
done over time.

THE FUND IN DETAIL CHARTER How the fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
The fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUND AT A GLANCE
GOAL: Maximum total return over the long term. As with any mutual fund,
there is no assurance that the fund will achieve its goal.
STRATEGY: The fund diversifies across stocks, bonds, and short-term
instruments, both here and abroad, to pursue its goal. The fund has a
neutral mix which represents the way the fund's investments will generally
be allocated over the long term. This mix will vary over short-term periods
as fund management gradually adjusts the fund's holdings - within defined
ranges - based on the current outlook for the different markets.
Neutral Mix
Stocks 65%
(can range
from
0-100%)
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 65.0
Row: 1, Col: 3, Value: 30.0
Bonds 30%
(can range
from
0-100%)
Short-Term
5%
(can range
from
0-100%)
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the fund.
SIZE: As of September 30, 1995, the fund had over $ 2.8 billion in
assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who want to diversify among
domestic and foreign stocks, bonds, short-term instruments and other types
of securities in one fund. If you are looking for a fund that can
invest in a wide range of security types within defined ranges in pursuit
of total return, this fund may be appropriate for you.
Because the fund owns different types of investments, its performance is
affected by a variety of factors. The value of the fund's investments and
the income they generate will vary from day to day, and generally reflect
interest rates, market conditions, and other company, political, and
economic news. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations .
Performance also depends on FMR's skill in allocating assets. When you sell
your fund shares, they may be worth more or less than what you paid for
them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page 25 for more information about these
fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee to FMR. It also incurs other expenses for services
such as maintaining shareholder records and furnishing shareholder
statements and financial reports. The fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets . A portion of the
brokerage commissions that the fund paid was used to reduce fund expenses.
Including this reduction, the total operating expenses presented in the
table would have been 1.02%.
Management fee .72 %

12b-1 fee None

Other expenses .31 %

Total fund operating expenses 1.03
%

After 3 years $ 33

After 5 years $ 57

After 10 years $ 12
6

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
19.Years ended September 30 1995 1994 G 1993 1992 E

20.Net asset value, beginning of $ 13.91 $ 13.77 $ 11.16 $ 10.00
period

21.Income from Investment
Operations

22. Net investment income . 26 .13 .18 .14

23. Net realized and unrealized 1.07 .61 F 2.66 1.02
gain
(loss) on investments

24. Total from investment 1.33 .74 2.84 1.16
operations

25.Less Distributions

26. From net investment income (. 27 ) (.18) (.15) --

27. From net realized gain -- (.37) (.08) --

28. In excess of net realized gain (.09) (.05) -- --

29. Total distributions (.36) (.60) (.23) --

30.Net asset value, end of period $ 14.88 $ 13.91 $ 13.77 $ 11.16

31.Total return B,C 9.95% 5.39% 25.83% 11.60
%

32.RATIOS AND SUPPLEMENTAL DATA

33.Net assets, end of period (000 $ 2,850, 300 $ 3,07 0 ,587 $ 1,243,043 $ 94,416
omitted)

34.Ratio of expenses to average net 1.03%H 1.15% 1.19%D 1.64
assets %A

35.Ratio of expenses to average net 1.02% H 1.15% 1.19% 1.64
assets
% A
after expense reductions

36.Ratio of net investment income 3.16% 2.64% 3.02% 3.50
to average net assets % A

37.Portfolio turnover rate 11 9 % 104% 97% 693
% A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E DECEMBER 30, 1991 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1992
F THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD ENDED DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
G EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
H FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from October 1 through September 30. The tables
below show the fund's performance over past fiscal years compared to two
measures: investing in a broad selection of stocks (S&P 500), and not
investing at all (inflation, or CPI). To help you compare this fund to
other funds, the chart on page displays calendar-year performance.
$ AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995 A

Asset 9.95 13.84
Manager: % %
Growth

S&P 500 29.75 13.31
% %

Consumer 2.54 2.85
Price % %
Index

$ CUMULATIVE TOTAL RETURNS
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995 A

Asset 9.95 62.73
Manager: % %
Growth

S&P 500 29.75 59.89
% %

Consumer 2.54 11.09
Price % %
Index

A FROM DECEMBER 30, 1991
UNDERSTANDING
PERFORMANCE
As economic conditions
change, different types of
investments do better than
others. While Asset Manager:
Growth usually invests in
stocks, bonds, and short-term
instruments, its emphasis is in
stocks. The fund's
performance tends to be
related to that of the overall
performance of both domestic
and foreign markets, but will
also reflect the performance of
the other investments in its mix
during the time period.
(checkmark)
EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the
fund on December 30, 1991. From that date through September 30, 1995, the
fund's total return was 62.73 %. That $10,000 would have grown to
$ 16,273 (the initial investment plus 62.73 % of $10,000).
$ $10,000 OVER LIFE OF FUND
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 10080.0
Row: 3, Col: 1, Value: 10450.0
Row: 4, Col: 1, Value: 10670.0
Row: 5, Col: 1, Value: 10520.0
Row: 6, Col: 1, Value: 10550.0
Row: 7, Col: 1, Value: 10770.0
Row: 8, Col: 1, Value: 10650.0
Row: 9, Col: 1, Value: 11090.0
Row: 10, Col: 1, Value: 10910.0
Row: 11, Col: 1, Value: 11160.0
Row: 12, Col: 1, Value: 11370.0
Row: 13, Col: 1, Value: 11780.0
Row: 14, Col: 1, Value: 12003.17
Row: 15, Col: 1, Value: 12176.54
Row: 16, Col: 1, Value: 12329.51
Row: 17, Col: 1, Value: 12808.82
Row: 18, Col: 1, Value: 12849.61
Row: 19, Col: 1, Value: 13114.76
Row: 20, Col: 1, Value: 13308.53
Row: 21, Col: 1, Value: 13553.28
Row: 22, Col: 1, Value: 14103.98
Row: 23, Col: 1, Value: 14042.79
Row: 24, Col: 1, Value: 14481.31
Row: 25, Col: 1, Value: 14358.93
Row: 26, Col: 1, Value: 15161.86
Row: 27, Col: 1, Value: 15747.05
Row: 28, Col: 1, Value: 15278.9
Row: 29, Col: 1, Value: 14502.18
Row: 30, Col: 1, Value: 14480.9
Row: 31, Col: 1, Value: 14597.94
Row: 32, Col: 1, Value: 14161.71
Row: 33, Col: 1, Value: 14512.82
Row: 34, Col: 1, Value: 15023.54
Row: 35, Col: 1, Value: 14800.1
Row: 36, Col: 1, Value: 14842.66
Row: 37, Col: 1, Value: 14417.06
Row: 38, Col: 1, Value: 14041.71
Row: 39, Col: 1, Value: 13691.76
Row: 40, Col: 1, Value: 13921.41
Row: 41, Col: 1, Value: 14205.75
Row: 42, Col: 1, Value: 14599.44
Row: 43, Col: 1, Value: 14960.32
Row: 44, Col: 1, Value: 15277.47
Row: 45, Col: 1, Value: 15911.75
Row: 46, Col: 1, Value: 15999.24
Row: 47, Col: 1, Value: 16272.63
$
$16,273
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE S&P 500(registered trademark) is the Standard & Poor's Composite Index
of 500 Stocks, a widely recognized, unmanaged index of common stock prices.
The S&P 500 figures assume reinvestment of all dividends paid by stocks
included in the index. They do not, however, include any allowance for the
brokerage commissions or other fees you would pay if you actually invested
in those stocks.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1992 1993 1994
Asset Manager: Growth 19.08% 26.32% -7.
39%
Competitive funds average 7.51% 11.94
% -2.65%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: 19.08
Row: 8, Col: 2, Value: 7.51
Row: 9, Col: 1, Value: 26.32
Row: 9, Col: 2, Value: 11.94
Row: 10, Col: 1, Value: -7.39
Row: 10, Col: 2, Value: -2.65
(large solid box) Asset
Manager:
Growth
(large hollow box) Competitive
funds
average
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Flexible Portfolio Funds
Average, which currently reflects the performance of over 107 mutual
funds with similar objectives. This average, which assumes reinvestment of
distributions, is published by Lipper Analytical Services, Inc.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL

CHARTER
FIDELITY ASSET MANAGER: GROWTH IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. In technical
terms, the fund is currently a diversified fund of Fidelity Charles Street
Trust, an open-end management investment company organized as a
Massachusetts business trust on July 7, 1981.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. Fidelity will
mail proxy materials in advance, including a voting card and information
about the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.), in London, England, and Fidelity Management & Research (Far
East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign
investments.
Robert Beckwitt is manager and Vice President of Asset Manager: Growth,
which he has managed since December 1991. Mr. Beckwitt also manages Asset
Manager and Asset Manager: Income. Previously, he managed VIP II Asset
Manager, Spartan Government Income, and Spartan Long-Term Government Bond.
Mr. Beckwitt joined Fidelity in 1986.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the fund.
FMR Corp. is the parent company of FMR, FMR Far East, and FMR U.K.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares to carry out the fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND SEEKS TO MAXIMIZE TOTAL RETURN over the long term by allocating
its assets among stocks, bonds, short-term and other instruments of U.S.
and foreign issuers.
The fund allocates its assets among the following classes, or types, of
investments. The STOCK CLASS includes equity securities of all types. The
BOND CLASS includes all varieties of fixed-income instruments with
maturities of more than three years (including adjustable-rate preferred
stocks). The SHORT-TERM CLASS includes all types of short-term instruments
with remaining maturities of three years or less. Some types of
investments, such as indexed securities, can fall into more than one asset
class. The fund may also make other investments that do not fall within
these classes.
FMR has the ability to allocate the fund's assets within specified ranges.
The fund's NEUTRAL MIX represents the benchmark for its combination of
investments in each asset class over time. FMR may change the neutral mix
from time to time. The range and approximate neutral mix for each asset
class are shown below.
Range Neutral Mix
STOCK CLASS 0 - 100% 65%
BOND CLASS 0 - 100% 30%
SHORT-TERM CLASS 0 - 100% 5%
Asset Manager: Growth's aggressive approach focuses on stocks for high
potential returns. However, because the fund can invest in bonds and
short-term instruments, its return may not be as high as a fund that
invests only in stocks.
Although the fund seeks to reduce its overall risk by diversifying among
different types of investments, the fund aggressively invests in a wide
variety of security types, including stocks and bonds issued in developed
and developing countries and derivative transactions. Since the fund is
subject to the risks of each investment type, the fund and its performance
are affected by many factors.
Stock values fluctuate in response to the activities of individual
companies and general market and economic conditions. The value of bonds
and short-term instruments fluctuates based on changes in interest rates
and in the credit quality of the issuer. The value of some of the fund's
investments may fluctuate based on other factors affecting security values
such as commodity prices and currency values. FMR may use various
investment techniques to hedge a portion of the fund's risks, but
there is no guarantee that these strategies will work as FMR intends. When
you sell your shares, they may be worth more or less than what you paid for
them.
In pursuit of the fund's objective, FMR will not try to pinpoint the
precise moment when a major reallocation should be made. Instead, FMR
regularly reviews the fund's allocations and makes changes gradually to
favor investments that it believes will provide the most favorable outlook
for achieving the fund's objective. Under normal circumstances, a single
reallocation will not involve more than 20% of the fund's total assets.
Although FMR uses its expertise and resources in allocating assets, FMR's
decisions may not be advantageous to the fund.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
preferred stocks and investment-grade debt instruments for temporary,
defensive purposes.
The fund diversifies across investment types more than most mutual funds.
No one mutual fund, however, can provide an appropriate balanced investment
plan for all investors.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of the fund's limitations and more detailed information
about the fund's investments are contained in the fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings and recent investment strategies are described in
the fund's financial reports which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks and warrants. Common stocks,
the most familiar type, represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth
in value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions. Smaller companies
are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets, the fund may not own
more than 10% of the outstanding voting securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "junk bonds") are
considered to have speculative characteristics and involve greater
risk of default or price changes due to changes in the issuer's
creditworthiness, or they may already be in default. The market prices of
these securities may fluctuate more than higher-quality securities and may
decline significantly in periods of general economic difficulty.
The table below provides a summary of ratings assigned to debt holdings
(not including money market instruments) in the fund's portfolio. These
figures are dollar-weighted averages of month-end portfolio holdings during
fiscal 1995, and are presented as a percentage of total security
investments. These percentages are historical and do not necessarily
indicate the fund's current or future debt holdings.
FISCAL 1995 DEBT HOLDINGS, BY RATING
MOODY'S
INVESTORS SERVICE, INC. STANDARD & POOR'S
Rating Average A Rating Averag
eA
INVESTMENT GRADE

Highest quality Aaa 14.6% AAA 14.9%

High quality Aa 0.0% AA 0.2%

Upper-medium grade A 0.0% A 0.0%

Medium grade Baa 0.0% BBB 0.1%
LOWER QUALITY

Moderately speculative Ba 1.5% BB 2.1%

Speculative B 4.0% B 2.8%

Highly speculative Caa 0.2% CCC 0.1%

Poor quality Ca 0.0% CC 0.0%

Lowest quality, no interest C C

In default, in arrears -- D 0.0%

20.3% 20.2%
A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT. THE DOLLAR-WEIGHTED AVERAGE
OF DEBT SECURITIES NOT RATED DIRECTLY OR INDIRECTLY BY MOODY'S OR S&P
AMOUNTED TO 2.6%. THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY
RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. FMR HAS
DETERMINED THAT UNRATED SECURITIES THAT ARE LOWER QUALITY ACCOUNT FOR 1.9%
OF THE FUND'S SECURITY INVESTMENTS. REFER TO THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.

RESTRICTIONS: Purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's
or rated in the equivalent categories by S&P, or is unrated but judged to
be of equivalent quality by FMR. The fund currently intends to limit its
investments in lower than Baa-quality debt securities to less than
35% of its assets.
MONEY MARKET INSTRUMENTS are high-quality instruments that present minimal
credit risk. They may include U.S. Government obligations, commercial paper
and other short-term corporate obligations, and certificates of deposit,
bankers' acceptances, bank deposits, and other financial institution
obligations. These instruments may carry fixed or variable interest rates.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments,
especially those in developing countries, more volatile.
ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be
significantly affected by changes in interest rates, the market's
perception of the issuers, and the creditworthiness of the parties
involved. Some securities may have a structure that makes their reaction to
interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, purchasing
indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for the fund, or there may be a
requirement that the fund supply additional cash to a borrower on demand.
PRECIOUS METALS. The prices of gold and other commodities can change
rapidly, and generally do not move in tandem with prices of equity or debt
securities. If the fund invests in commodities, its share price will be
affected by changes in commodity prices.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of the fund's assets.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include convertible securities, preferred stocks,
securities of closed-end investment companies and real estate-related
investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer. The fund also may not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering the fund's securities. The fund may also lend money to other
funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks to maximize total return over the long term by allocating
its assets among stocks, bonds, short-term instruments, and other
investments. With respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer and may not own more
than 10% of the outstanding voting securities of a single issuer. The fund
may not invest more than 25% of its total assets in any one industry. The
fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets. Loans, in the aggregate, may not
exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .52%, and it drops as
total assets under management increase.
For September 19 95 , the group fee rate was .3112 %. The
individual fund fee rate is .40%. The total management fee rate for fiscal
1995 was .72 %.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's investments that the
sub-adviser manages on a discretionary basis.
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
(checkmark)
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing the fund's investments, and handling securities loans. In fiscal
19 95 , the fund paid FSC fees equal to .28 % of its average net
assets.
The fund also pays other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by the fund to reduce the fund's custodian or transfer
agent fees.
The fund has adopted a Distribution and Service Plan. This plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of fund shares. This may include payments to third
parties, such as banks or broker-dealers, that provide shareholder support
services or engage in the sale of the fund's shares. It is important to
note, however, that the fund does not pay FMR any separate fees for this
service.
The fund's portfolio turnover rate for fiscal 1995 was 119 %. This
rate varies from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these effects
when evaluating the anticipated benefits of short-term investing.
YOUR ACCOUNT

FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds in
the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $ 335 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. The fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
$ MINIMUM INVESTMENTS
Fiscal periods 1992 1993 1994
1995
Row: 1, Col: 1, Value: 10000.0
Row: 2, Col: 1, Value: 9890.0
Row: 3, Col: 1, Value: 10020.3
Row: 4, Col: 1, Value: 10222.02
Row: 5, Col: 1, Value: 10485.16
Row: 6, Col: 1, Value: 10657.39
Row: 7, Col: 1, Value: 10891.49
Row: 8, Col: 1, Value: 10973.54
Row: 9, Col: 1, Value: 11035.05
Row: 10, Col: 1, Value: 11158.52
Row: 11, Col: 1, Value: 11251.64
Row: 12, Col: 1, Value: 11500.56
Row: 13, Col: 1, Value: 11531.81
Row: 14, Col: 1, Value: 11688.44
Row: 15, Col: 1, Value: 11615.38
Row: 16, Col: 1, Value: 11794.96
Row: 17, Col: 1, Value: 11997.58
Row: 18, Col: 1, Value: 11783.98
Row: 19, Col: 1, Value: 11558.83
Row: 20, Col: 1, Value: 11569.5
Row: 21, Col: 1, Value: 11602.06
Row: 22, Col: 1, Value: 11536.9
Row: 23, Col: 1, Value: 11689.09
Row: 24, Col: 1, Value: 11809.1
Row: 25, Col: 1, Value: 11699.69
Row: 26, Col: 1, Value: 11732.89
Row: 27, Col: 1, Value: 11644.89
Row: 28, Col: 1, Value: 11634.28
Row: 29, Col: 1, Value: 11701.27
Row: 30, Col: 1, Value: 11913.79
Row: 31, Col: 1, Value: 12037.44
Row: 32, Col: 1, Value: 12194.96
Row: 33, Col: 1, Value: 12488.19
Row: 34, Col: 1, Value: 12612.6
Row: 35, Col: 1, Value: 12816.64
Row: 36, Col: 1, Value: 12930.56
Row: 37, Col: 1, Value: 13101.93
$
$13,102
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services or a Fidelity Payroll Deduction Program account in
the fund. Refer to the program materials for details.

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to "Fidelity
check payable to Asset Manager:
"Fidelity Asset Growth." Indicate your
Manager: Growth." Mail fund account number
to the address on your check and mail
indicated on to the address printed
the application. on your account
statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity Asset
Bank Routing Manager: Growth" and
#021001033, include your account
Account #00163053. number and your
Specify "Fidelity Asset name.
Manager: Growth" and
include your new
account number and
your name.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

</TABLE>

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

</TABLE>

A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. The fund offers four
options:
5. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
6. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
7. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
8. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When the fund deducts a distribution from its NAV, the reinvestment price
is the fund's NAV at the close of business that day. Cash distribution
checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
The fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates the fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The fund's investments with remaining maturities of 60 days or less are
valued on the basis of amortized cost. This method minimizes the effect of
changes in a security's market value. Other assets are valued primarily on
the basis of market quotations or, if quotations are not readily available
or if the values have been materially affected by events occurring after
the closing of a foreign market, by a method that the Board of Trustees
believes accurately reflects fair value. Foreign securities are valued on
the basis of quotations from the primary market in which they are traded,
and are translated from the local currency into U.S. dollars using current
exchange rates.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees the fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUND THROUGH A BROKER, who may charge you
a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when the fund is priced on
the following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the fund without reimbursement
from the fund. Qualified recipients are securities dealers who have sold
fund shares or others, including banks and other financial institutions,
under special arrangements in connection with FDC's sales activities. In
some instances, these incentives may be offered only to certain
institutions whose representatives provide services in connection with the
sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY CHARLES STREET TRUST:
SPARTAN SHORT-TERM INCOME FUND AND
SPARTAN INVESTMENT GRADE BOND FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER

PROSPECTUS PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C>
1................................................. Cover Page
...

2a................................................ Expenses
..

b,c.............................................. Contents; The Funds at a Glance; Who May Want to Invest

3a............................................... Financial Highlights

b............................................... *

c,d............................................... Performance
..

4a(i) Charter
..............................................

The Funds at a Glance; Investment Principles and Risks;
(ii)..............................................

Investment Principles and Risks
b.................................................
.

Who May Want to Invest; Investment Principles and Risks;
c.................................................
.

5a Charter
.................................................

Cover Page; The Funds at a Glance; Charter; Doing Business
b(i).............................................. with Fidelity

b(ii) Charter
............................................

Expenses; Breakdown of Expenses
b(iii)...........................................
.

c,.............................................. Charter

Charter; Breakdown of Expenses
d.................................................
.

Cover Page, Charter
e.................................................
.

Expenses
f..................................................
.

Charter
g(i)..............................................

*
g(ii).............................................

5A............................................... Performance

6a(i)............................................ Charter
...

a(ii) How to Buy Shares; How to Sell Shares; Transaction Details;
............................................ Exchange Restrictions

Charter
a(iii)...........................................

Charter
b.................................................

Transaction Details; Exchange Restrictions
c................................................

*
d.................................................

Doing Business with Fidelity; How to Buy Shares; How to Sell
e................................................. Shares; Investor Services

Dividends, Capital Gains, and Taxes
f,g...............................................

7a................................................ Cover Page; Charter
..

Expenses; How to Buy Shares; Transaction Details
b.................................................
.

*
c.................................................
.

How to Buy Shares
d.................................................
.

*
e.................................................
.

Breakdown of Expenses
f..................................................
.

8................................................. How to Sell Shares, Investor Services; Transaction Details;
.. Exchange Restrictions

9................................................. *
..

</TABLE>

* Not Applicable
Part B Statement of Additional Information Section

<TABLE>
<CAPTION>
<S> <C>
10, Cover Page
11........................................

12............................................. Description of the Trust
.

13a-c....................................... Investment Policies and Limitations

Portfolio Transactions
d............................................

14a, Trustees and Officers
b........................................

*
c.............................................

15a, Trustees and Officers
b.........................................

Trustees and Officers
c.............................................

16a(i)....................................... FMR, Portfolio Transactions
..

Trustees and Officers
a(ii)........................................

a(iii), Management Contracts
b...................................

Contracts with FMR Affiliates
c,d..........................................

e.......................................... *

Distribution and Service Plans
f............................................

*
g.............................................

Description of the Trust
h.............................................

Contracts with FMR Affiliates
i.............................................

17a........................................... Portfolio Transactions
.

Portfolio Transactions
b............................................

Portfolio Transactions
c............................................

*
d,e.........................................

18a........................................... Description of the Trust
..

*
b.............................................

19a........................................... Additional Purchase and Redemption Information
..

Valuation of Portfolio Securities; Additional Purchase and
b............................................ Redemption Information

*
c.............................................

20............................................. Distributions and Taxes
..

21a(i),(ii),(iii), Contracts with FMR Affiliates
b........................

c.................................. *

22a........................................... *
..

Performance
b.............................................

23............................................. Financial Statements
..

</TABLE>

* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about e ach fund and its investments, you can obtain a
cop y of the funds' most recent financial reports and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated
November 20, 1995. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document, call
Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.

SPARTAN(REGISTERED TRADEMARK)
SHORT-TERM
INCOME
FUND
and
SPARTAN(REGISTERED TRADEMARK)
INVESTMENT
GRADE BOND
FUND
Each fund invests mainly in investment-grade debt securities. Spartan
Short-Term Income seeks high current income with preservation of capital.
Spartan Investment Grade Bond seeks high current income from securities
with longer maturities.
PROSPECTUS
NOVEMBER 20, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS THE FUNDS AT A GLANCE

WHO MAY WANT TO INVEST

EXPENSES Each fund's yearly
operating expenses.

FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.

PERFORMANCE How each fund has
done over time.

THE FUNDS IN DETAIL CHARTER How each fund is
organized.

INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.

BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.

HOW TO BUY SHARES Opening an
account and making additional
investments.

HOW TO SELL SHARES Taking money
out and closing your account.

INVESTOR SERVICES Services to
help you manage your account.

SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.

EXCHANGE RESTRICTIONS

KEY FACTS

THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Foreign affiliates of FMR may help
choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
SPARTAN SHORT-TERM INCOME
GOAL: High current income with preservation of capital.
STRATEGY: Invests in investment-grade debt securities while normally
maintaining an average maturity of three years or less.
SIZE: As of September 30, 1995, the fund had over $ 521
million in assets.
SPARTAN INVESTMENT GRADE BOND
GOAL: High current income.
STRATEGY: Invests mainly in investment-grade debt securities, with a focus
on medium and long-term bonds.
SIZE: As of September 30, 1995, t he fund had over $ 147
million in assets.
WHO MAY WANT TO INVEST
Either fund may be appropriate for investors who seek high current income
with a focus on in vestment-gra de debt securities. A fund's level of
risk and potential rewar d, depe nd on the quality and maturity of its
investments. Spartan Short-Term Income is designed to offer greater share
price stability by investing in shorter-term securities. Spartan Investment
Grade Bond, because it can invest in securities with any maturity,
has the potential for higher yields, but also carries more risk.
The value of t he fu nds' investments and the income they generate
will vary from day to day, and generally re flec t interest rates,
market conditions, and other economic and political news. When you sell
your shares, they may be worth more or less than what you paid for them. By
themselves, t he f unds do not constitute a balanced investment plan.
The Spartan family of funds is designed for cost-conscious investors
looking for higher yields through lower costs. The Spartan
Approach(registered trademark) requires investors to make high minimum
investments and, in some cases, to pay for individual transactions.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking to
maximize return must assume
greater risk. The funds in this
prospectus are in the INCOME
category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these
fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange and wire transaction fees $5.00
Checkwriting fee, per check written $2.00
Account closeout fee $5.00
Annual account maintenance fee
(for accounts u nder $2500) $12.00
THESE FEES ARE WAIVED if your account balance at the time of the
transaction is $50,000 or more.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. Expenses are factored into each fund's
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses and are
calculated as a percentage of average net assets.
SPARTAN SHORT-TERM INCOME
Management fee .65 %

12b-1 fee None

Other expenses None

Total fund operating expenses .65 %

SPARTAN INVESTMENT GRADE BOND
Management fee .65 %

12b-1 fee None

Other expenses None

Total fund operating expenses .65 %

EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses after
the number of years indicated, first assuming that you leave your account
open, and then assuming that you close your account at the end of the
period:
SPARTAN SHORT-TERM INCOME
Account Account
open closed

After 1 year $ 7 $ 12

After 3 years $ 21 $ 26

After 5 years $ 36 $ 41

After 10 years $ 81 $ 86

SPARTAN INVESTMENT GRADE BOND
Account Account
open closed

After 1 year $ 7 $ 21

After 3 years $ 21 $ 26

After 5 years $ 36 $ 41

After 10 years $ 81 $ 86

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Report and have
been audited by Price Waterhouse LLP, independent accountants. Their
reports on the financial statements and financial highlights are included
in the Annual Reports. The financial statements and financial highlights
are incorporated by reference into (are legally a part of) the funds'
Statement of Additional Information.
SPARTAN SHORT-TERM INCOME

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1.Selected Per-Share Data and Ratios

2.Years ended September 30 1995 1994C 1993E

3.Net asset value, beginning of period $ 9.330 $ 9.990 $ 10.000

4.Income from Investment Operations
.584 .574 .747
Net investment income

5. Net realized and unrealized gain (loss) (.199) (.604) (.009)

6. Total from investment operations .385 (.030) .738

7.Less Distributions
(.443) (.477) (.747)
From net investment income

8. In excess of net investment income -- (.033) (.001)

9. In excess of net realized gain -- (.010) --

10. Return of capital (.142) (.110) --

11. Total distributions (.585) (.630) (.748)

12.Net asset value, end of period $ 9.130 $ 9.330 $ 9.990

13.Total returnB 4.35% (.32) 7.69%
%A A

14.Net assets, end of period (000 omitted) $ 521,714 $ 798,453 $ 1,471,19
5

15.Ratio of expenses to average net assets .65% .54% .20%
D D

16.Ratio of net investment income to average net 6.45% 6.42% 7.32%
assets

17.Portfolio turnover rate 159% 97% 112%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
E OCTOBER 1, 1992 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1993
SPARTAN INVESTMENT GRADE BOND

<TABLE>
<CAPTION>
<S> <C> <C> <C>
18.Selected Per-Share Data and Ratios

19.Years ended September 30 1995 1994B 1993C

20.Net asset value, beginning of period $ 9.510 $ 10.940 $ 10.000

21.Income from Investment Operations
.693 .668 .799
Net investment income

22. Net realized and unrealized gain (loss) .673 (1.384) .940

23. Total from investment operations 1.366 (.716) 1.739

24.Less Distributions
(.686) (.704) (.798)
From net investment income

25. In excess of net investment income -- -- (.001)

26. In excess of net realized gain (.020) (.010) --

27. Total distributions (.706) (.714) (.799)

28.Net asset value, end of period $ 10.170 $ 9.510 $ 10.940

29.Total returnA 14.94% (6.75) 18.17%
%

30.Net assets, end of period (000 omitted) $ 147,620 $ 106,207 $ 128,860

31.Ratio of expenses to average net assets .65% .65% .65%

32.Ratio of net investment income to average net 6.92% 6.90% 7.58%
assets

33.Portfolio turnover rate 147% 44% 55%

</TABLE>

A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
B EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2,"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF
INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C OCTOBER 1, 1992 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1993
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes or any transaction fees you may have paid. The figures
would be lower if fees were taken into account.
Each fund's fiscal year runs from October 1 through September 30. The
tables below show each fund's performance over past fiscal years compared
to two measures: a comparati ve index (Lehman Brothers 1 to 3 Year
Government/ Corporate Bond Index for Spartan Short-Term Income and Lehman
Brothers Aggregate Bond Index for Spartan Investment Grade Bond) and
inflation (Consumer Price Index). The charts on page compare each fund's
calendar-year performance with that of their respective index and do not
reflect the effect of the $5 account closeout fee.
SPARTAN SHORT-TERM INCOME
Fiscal period Past Life
ended 1 of
September 30, Year fund
1995 A

Average 4.35 3.85
annual % %
total return

Cumulative 4.35 12.01
total return % %

Lehman 8.29 4.81
Brothers 1 to 3 % %
Year
Government/
Corporate
Bond Index
(average
annual)

Lehman 8.29 15.15
Brothers 1 to 3 % %
Year
Government/
Corporate
Bond Index
(cumulative)

Consumer 2.54 2.73
Price
% %
Index (average
annual)

Consumer 2.54 8.42
Price % %
Index
(cumulative)

SPARTAN INVESTMENT GRADE BOND
Fiscal period Past Life
ended 1 of
September 30, Year fund
1995 A

Average 14.94 8.20
annual % %
total return

Cumulative 14.94 26.66
total return % %

Lehman 14.06 6.68
Brothers % %
Aggregate
Bond Index
(average
annual)

Lehman 14.06 21.39
Brothers % %
Aggregate
Bond Index
(cumulative)

Consumer 2.54 2.73
Price
% %
Index (average
annual)

Consumer 2.54 8.42
Price % %
Index
(cumulative)

A FROM OCTOBER 1, 1992
UNDERSTANDING
PERFORMANCE
Because these funds invest in
fixed-income securities, their
performance is related to
changes in interest rates.
Funds that hold short-term
bonds are usually less affected
by changes in interest rates
than long-term bond funds. For
that reason, long-term bond
funds typically offer higher
yields and carry more risk than
short-term bond funds.
(checkmark)
EXPLANATION OF TERMS
SPARTAN SHORT-TERM INCOME
Calendar year total returns 1993 1994
Spartan Short-Term Income 9.01
% -4.62%
Lehman Bros. 1-3 Yr. Govt./Corp. Bond Index
5.55% 0.55%
Percentage (%)
(large solid box) Spartan
Short-
Term Income
(large hollow box) Lehman
Bros.
1-3 Yr.
Govt./
Corp. Bond
Index
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: 9.01
Row: 9, Col: 2, Value: 5.55
Row: 10, Col: 1, Value: -4.619999999999999
Row: 10, Col: 2, Value: 0.55

SPARTAN INVESTMENT GRADE BOND
Calendar year total returns 1993 1994
Spartan Investment Grade Bond 15.76
% -5.17%
Lehman Bros. Aggregate Bond Index
9.75% -2.92%
Percentage (%)
(large solid box) Spartan
Investment
Grade Bond
(large hollow box) Lehman
Bros.
Aggregate
Bond
Index
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: 15.76
Row: 9, Col: 2, Value: 9.75
Row: 10, Col: 1, Value: -5.17
Row: 10, Col: 2, Value: -2.92

TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, each fund is
currently a diversified fund of Fidelity Charles Street Trust, an open-end
management investment company organized as a M assachusetts b usiness
trust on July 7, 1981.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, and Fidelity Management & Research (Far East)
Inc. (FMR Far East), in Tokyo, Japan, may assist FMR with foreign
investments.
Charles Morrison is manager of Spartan Short-Term Income, which he has
managed since February 1995. He also manages Short-Term Bond and Advisor
Short Fixed-Income. He joined Fidelity in 1987.
Michael Gray is manager and Vice President of Spartan Investment Grade
Bond, which he has managed since October 1992. Mr. Gray also manages
Advisor Limited Term Bond, Investment Grade Bond, and Intermediate Bond.
Mr. Gray joined Fidelity in 1982.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SPARTAN SHORT-TERM INCOME seeks as high a level of current income as is
consistent with preservation of capital. FMR normally invests at least 65%
of the fund's total assets in debt securities. Although the fund can
invest in securities of any maturity, the fund maintains a
dollar-weighted average maturity of three years or less under normal
conditions . In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the
average time for its principal to be paid may be used. This can be
substantially shorter than its stated final maturity. As of September
30, 1995, the fund's dollar-weighted average maturity was 2.3 years.
SPARTAN INVESTMENT GRADE BOND seeks a high level of current income by
investing in investment-grade debt securities. FMR normally invests at
least 65% of the fund's total assets in investment-grade debt securities.
Although the fund can invest in securities of any maturity, FMR seeks to
manage the fund so that it generally reacts to changes in interest rates
similarly to bonds with maturities between five and ten years. As of
September 30, 1995, the fund's dollar-weighted average maturity was 8.1
years.
EACH FUND focuses on U.S. dollar-denominated investment-grade debt
securities. Both funds may also invest in futures contracts and other
derivatives to adjust their investment exposure. Spartan Short-Term Income
invests exclusively in investment-grade securities and limits its average
maturity to less than three years. Spartan Investment Grade Bond invests in
a broader range of debt securities and has no stated maturity
policy.
The total return from a bond is a combination of income and price gains
or losses. While income is the most important component of bond returns
over time, a fund's emphasis on income does not mean that the fund invests
only in the highest-yielding bonds available, or that it can avoid risks to
principal. In selecting investments for a fund, FMR considers a bond's
income potential together with its potential for price gains or losses. FMR
focuses on assembling a portfolio of income-producing securities that it
believes will provide the best tradeoff between risk and return within the
range of securities that are eligible investments for a fund.
Each fund's yield and share price change daily and are based on changes in
interest rates, market conditions, other economic and political news, and
on the quality and maturity of t heir investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. Lower-quality
securities offer higher yields, but also carry more risk . FMR may use
various investment techniques to hedge a portion of the funds'
risks, but there is no guarantee that these strategies will work as
intended. When you sell your shares of the funds, they may be worth more or
less than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
investment-grade money market instruments and Spartan Investment Grade
Bond may invest in short-term debt instruments for temporary, defensive
purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions l isted supplement tho se discussed
ea rlier in this section. A complete listing of each fund's limitations
and more detailed information about the funds' investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
u nless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its
go al. Current holdings and recent investment strategies are described
in each fund's financial reports which are sent to shareholders twice a
year. For a free SAI or financial report, call 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
Lower-quality foreign government securities are considered to
have speculative characteristics and involve greater risk of
default or price changes, or they may already be in default. These risks
are in addition to the general risks associated with foreign securities.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's or
rated in the equivalent categories by any other nationally recognized
rating service, or is unrated but judged to be of equivalent quality by
FMR. Spartan Short-Term Income currently intends to limit its investments
in debt securities to those of Baa-quality or above. Spartan Investment
Grade Bond currently intends to limit its investments in corporate debt
securities to those of Baa-quality or above and currently has no quality
restriction on foreign government securities.
MONEY MARKET SECURITIES a re high-quality, short-term obligations
issued by the U.S. Government, corporations, financial institutions, and
other entities. These obligations may carry fixed, variable, or fl oating
interest rates.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
FOREIGN SECURITIES may involve additional risks and considerations.
These include risks relating to political or economic conditions in foreign
countries, withholding or other taxes, operational risks, increased
regulatory burdens, and the potentially less stringent investor protection
and disclosure standards of foreign markets. Additionally, governmental
issuers of foreign securities may be unwilling to repay principal and
interest when due, and may require that the conditions for payment be
renegotiated. All of these factors can make foreign investments, especially
those in developing countries, more volatile.
ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be
significantly affected by changes in interest rates, the market's
perception of the issuers, and the creditworthiness of the parties
involved. Some securities may have a structure that makes their reaction to
interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.
STRIPPED SECURITIES are the separate income or principal components of a
debt s ecurit y. Their risks are similar to those of other debt
securities, although they may be more volatile and the v alu e of
certain types of stripped securities may move in the same direction
as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, commodity prices, or other factors that affect security
values. These techniques may involve derivative transactions such as buying
and selling options and futures contracts, entering into swap
agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for a fund, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities and some other securities may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield.
OTHER INSTRUMENTS may include convertible bonds.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, a fund may not invest
more than 5% of its total assets in any one issuer. A fund may also not
invest more than 25% of its total assets in any one industry. These
limitations do not apply to U.S. government securities.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering a fund's securities. A fund may also lend money to other funds
advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SPARTAN SHORT-TERM INCOME FUND seeks a high level of current income.
SPARTAN INVESTMENT GRADE BOND FUND seeks a high level of current income.
EACH FUND, with respect to 75% of total assets, may not invest more than 5%
of its total assets in any one issuer. Each fund may not invest more than
25% of its total assets in any one industry. A fund may borrow only for
temporary or emergency purposes, but not in an amount exceeding 33% of its
total assets. Loans, in the aggregate, will be limited to 33 % of each
fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn may pay fees to affiliates who provide
assistance with these services.
FMR may, from time to time, agree to reimburse the funds for management
fees above a specified limit. FMR retains the ability to be repaid by a
fund if expenses fall below the specified limit prior to the end of the
fiscal year. Reimbursement arrangements, which may be terminated at any
time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a management fee at the annual rate of .65% of the fund's average net
assets.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers may provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory agreements,
FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis.
FSC performs many transaction and accounting functions for the funds. These
services include processing shareholder transactions and calculating each
fund's share price. FMR, and not the funds, pays for these services.
To offset shareholder service costs, FMR or its affiliates also collect the
funds' $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and the $2.00 checkwriting charge. For fiscal
1995, these fees amounted to $ 23,850, $4,345, $692, and $0,
respectively, for Spartan Short-Term Income and $ 6,260, $1,155,
$220, and $0 , respectively, for Spartan Investment Grade Bond.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1 99 5, the portfolio turnover rates for Spartan
Short-Term Income and Spartan Investment Grade Bond were
159 % and 147 %, respectively. These rates vary from year to
year. High turnover rates increase transaction costs and may increase
taxable capital gains. FMR considers these effects when evaluating the
anticipated benefits of short-term investing.
YOUR ACCOUNT

FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds in
the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $ 335 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $10,000
For Fidelity retirement accounts $10,000
TO ADD TO AN ACCOUNT $1,000
For Fidelity retirement accounts $1,000
Through automatic investment plans $500
MINIMUM BALANCE $5,000
For Fidelity retirement accounts $5,000
The minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the product materials for details.

UNDERSTANDING THE
SPARTAN APPROACH(registered trademark)
Fidelity's Spartan Approach is
based on the principle that
lower fund expenses can
increase returns. The Spartan
funds keep expenses low in
two ways. First, higher
investment minimums reduce
the effect of a fund's fixed
costs, many of which are paid
on a per-account basis.
Second, unlike most mutual
funds that include transaction
costs as part of overall fund
expenses, Spartan
shareholders pay directly for
the transactions they make.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

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Wire (wire_graphic) (small solid bullet) There may be a $5.00 (small solid bullet) There may be a $5.00
fee for each wire fee for each wire
purchase. purchase.
(small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $5,000
worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS

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IF YOUR ACCOUNT BALANCE IS LESS THAN $50,000, THERE ARE FEES FOR INDIVIDUAL REDEMPTION
TRANSACTIONS: $2.00 FOR EACH CHECK YOU WRITE AND $5.00 FOR EACH EXCHANGE, BANK WIRE,
AND ACCOUNT CLOSEOUT.

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Check (check_graphic) All account types (small solid bullet) Minimum check: $1,000.
except retirement (small solid bullet) All account owners must sign
a signature card to receive a
checkbook.

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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118

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To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. There may be a $5.00 fee for
each exchange out of the funds, unless you place your transaction on
Fidelity's automated exchange services.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.

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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.

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FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.

</TABLE>

A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains to shareholders each year. Income dividends are declared
daily and paid monthly. Capital gains are normally distributed in June and
December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.

Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of the
date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
capital gain distribution from its NAV, you will pay the full price
for the shares and then receive a portion of the price back in the form of
a taxable distribution.
EFFECT OF FOREIGN TAXES. F oreign governments may impose taxes on a fund
and its investments and these taxes generally will reduce the fund's
distributio ns.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. If quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
THE FEES FOR INDIVIDUAL TRANSACTIONS are waived if your account balance at
the time of the transaction is $50,000 or more. Otherwise, you should note
the following:
(small solid bullet) The $2.00 checkwriting charge will be deducted from
your account.
(small solid bullet) The $5.00 exchange fee will be deducted from the
amount of your exchange.
(small solid bullet) The $5.00 wire fee will be deducted from the amount of
your wire.
(small solid bullet) The $5.00 account closeout fee does not apply to
exchanges or wires, but it will apply to checkwriting.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE
of $12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $60.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for that
year. The fee, which is payable to the transfer agent, is designed to
offset in part the relatively higher costs of servicing smaller accounts.
The fee will not be deducted from retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if total
assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver
is determined by aggregating Fidelity mutual fund accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $5,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed and the $5.00 account closeout fee will be charged.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.

This prospectus is printed on recycled paper using soy-based inks.
SPARTAN(registered trademark) SHORT-TERM INCOME FUND
SPARTAN(registered trademark) INVESTMENT GRADE BOND FUND
FUNDS OF FIDELITY CHARLES STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 20, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (d ated November 20, 1995). Please
retain this document for future reference. The funds' financial statements
and financial highlights, included in the Annual Report for the fiscal year
ended September 30, 1995, are incorpora ted herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations

Portfolio Transactions

Valuation of Portfolio Securities

Performance

Additional Purchase and Redemption Information

Distributions and Taxes

FMR

Trustees and Officers

Management Contracts

Distribution and Service Plans

C ontracts with FMR Affiliate s

Description of the Trust

Financial Statements

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corp. (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
SST/SIG-ptb-1195
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The f und's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations lis ted
belo w, the investment policies and limitations described in this
Statement of Additional Information are not fundamental and may be changed
without shareholder approval.
INVESTMENT LIMITATIONS OF SPARTAN SHORT-TERM INCOME FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(v i ) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vi i ) The fund does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b) purchase
or retain securities issued by other open-end investment companies.
Limitations (a) and (b) do not apply to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
INVESTMENT LIMITATIONS OF SPARTAN INVESTMENT GRADE BOND FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale, or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(v i ) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vi i ) The fund does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b) purchase
or retain securities issued by other open-end investment companies.
Limitations (a) and (b) do not apply to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the funds' limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
funds may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
E XPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar .
Foreign investment s involve a risk of local political, economic, or
social instability, military action or unrest, or adverse diplomatic
developments, and may be affected by actions of foreign governments adverse
to the interests of U.S. investors. Such actions may include the
possibility of expropriation or nationalization of assets, confiscatory
taxation, restrictions on U.S. investment or on the ability to repatriate
assets or convert currency into U.S. dollars, or other government
intervention. There is no assurance that FMR will be able to anticipate
these potential events or counter their effect s. These risks are
magnified for investments in developing countries, which may have
relatively unstable governments, economies based on only a few industries,
and securities markets that trade a small number of securities.
Econo mies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Forei gn
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
Amer ican Depository Receipts (ADRs) as well as other "hybrid" forms of
ADRs including European Depository Receipts (EDRs) and Global Depository
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's cou ntry.
FOREIGN CURRENCY TRANSACTIONS. The funds may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The funds will convert currency on a spot basis from time to time,
and investors should be aware of the costs of currency conversion. Although
foreign exchange dealers generally do not charge a fee for conversion, they
do realize a profit based on the difference between the prices at which
they are buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the fund at one rate, while offering a lesser
rate of exchange should the fund desire to resell that currency to the
dealer. Forward contracts are generally traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
Each fund may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the
principal currency management strategies involving forward contracts that
could be used by each fund. The funds may also use swap agreements, indexed
securities, and options and futures contracts relating to foreign
currencies for the same purposes.
When a fund agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security.
By entering into a forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transaction, the fund will be able to protect itself
against an adverse change in foreign currency values between the date the
security is purchased or sold and the date on which payment is made or
received. This technique is sometimes referred to as a "settlement hedge"
or "transaction hedge." The funds may also enter into forward contracts to
purchase or sell a foreign currency in anticipation of future purchases or
sales of securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
The funds may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling - for example, by entering into a forward contract to sell
Deutschemarks or European Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple hedge into U.S. dollars.
Proxy hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the hedged securities are
denominated.
Each fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. For example, if a fund held investments denominated in
Deutschemarks, the fund could enter into forward contracts to sell
Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to the
currency that is sold, and increase exposure to the currency that is
purchased, much as if the fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the funds will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The funds will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change a fund's investment exposure to changes in
currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that currency in
exchange for dollars, the fund would be unable to participate in the
currency's appreciation. If FMR hedges currency exposure through proxy
hedges, a fund could realize currency losses from the hedge and the
security position at the same time if the two currencies do not move in
tandem. Similarly, if FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the fund will realize a loss.
There is no assurance that FMR's use of currency management strategies will
be advantageous to the funds or that it will hedge at an appropriate time.
FUNDS' RIGHT S AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against a fund and the risk of actual liability if a fund is involved in
litigation. No guarantee can be made, however, that litigation against a
fund will not be undertaken or liabilities i ncurred.
FUTURES AND OPTIONS . The following sections pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, Options and Futures Relating to Foreign
Currencies, OTC Options, Purchasing Put and Call Options, an d Writing
Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. Th e funds will
comply with guidelines established by the Securities and Exchange
Commission with respect to coverage of options and futures strategies by
mutual funds, and if the guidelines so require will set aside appropriate
liq uid assets in a segregated custodial account in the amount
prescribed. Securities held in a segregated account cannot be sold while
the futures or option strategy is outstanding, unless they are replaced
with other suitable assets. As a result, there is a possibility that
segregation of a large percentage of a fund's assets could impede portfolio
management or the fund's ability to meet redemption requests or other
current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fun d's cu rrent or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which in volves a risk that the options or futures position
will not track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Bond Buyer Municipal Bond Index. Futures can
be held until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund intends to file
a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
fu tures markets, before engaging in any purchases or sales of futures
contracts or options on f utures contracts. The funds intend to comply
with Rule 4.5 under the Commodity Exchange Act, which limits the extent to
which the funds can commit assets to initial margin deposits and
option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
In vestments currently considered by a fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities, and over-the-counter options. Also, FMR may
determine some restricted securities, government-stripped fixed-rate
mortgage-backed securities, loans and other direct debt instruments,
emerging market securities, and swap agreements to be illiquid. However,
with respect to over-the-counter options a fund writes, all or a portion of
the value of the underlying instrument may be illiquid depending on the
assets held to cover the option and the nature and terms of any
agreement the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to,
and borrow money from, other funds advised by FMR or its affiliates.
Interfun d loans and borrowings normally extend overnight, but can have
a maximum duration of seven days. Loans may be called on one day's notice.
A fund will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to each fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If a fund does not receive scheduled interest or
principal payments on such indebtedness, the fund's share price and yield
could be adversely affected. Loans that are fully secured offer a fund more
protections than an unsecured loan in the event of non-payment of scheduled
interest or principal. However, there is no assurance that the liquidation
of collateral from a secured loan would satisfy the borrower's obligation,
or that the collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may
never pay off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of developing countries also involves a
risk that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal when
due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to a fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, each fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, each fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of a fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by each fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
Each fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see limitations 1 and 5).
For purposes of these limitations, each fund generally will treat the
borrower as the "issuer" of indebtedness held by the fund. In the case of
loan participations where a bank or other lending institution serves as
financial intermediary between each fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict a fund's
ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. (Spartan Investment Grade Bond only) The
fund may purchase lower-quality debt securities (those rated below Baa by
Moody's Investors Service, Inc. or BBB by Standard and Poor's Corporation,
and unrated securities judged by FMR to be of equivalent quality) that have
poor protection with respect to the payment of interest and repayment of
principal. These securities are often considered to be speculative and
involve greater risk of loss or price changes due to changes in the
issuer's capacity to pay. The market prices of lower-quality debt
securities may fluctuate more than those of higher-quality debt securities
and may decline significantly in periods of general economic difficulty,
which may follow periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund
highly leveraged corporate acquisitions and restructurings. Past experience
may not provide an accurate indication of the future performance of the
high-yield bond market, especially during periods of economic recession. In
fact, from 1989 to 1991, the percentage of lower-quality securities that
defaulted rose significantly above prior levels, although the default rate
decreased in 1992 and 1993.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and the fund's ability to sell these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by the fund. In considering
investments for the fund, FMR will attempt to identify those issuers of
high-yielding securities whose financial condition is adequate to meet
future obligations, has improved, or is expected to improve in the future.
FMR's analysis focuses on relative values based on such factors as interest
or dividend coverage, asset coverage, earnings prospects, and the
experience and managerial strength of the issuer.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the best interest of the fund's shareholders.
MORTGAGE-BACKED SECURITIES. The funds may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security is an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
funds may invest in them if FMR determines they are consistent with the
funds' investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may sho rten the effective maturities of
these securities and may lower their total returns.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. The securities
purchased by a fund are used to collateralize the repurchase obligation. As
such, they are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as wel l as delays and costs to a fund in connection with
bankruptcy proceedings), it is each fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values , mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment management authority to the
sub-advisers (see the section entitled "Management Contracts"), the
sub-advisers are authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions. General ly, commissions for
investments traded on foreign exchanges will be higher than for investments
traded on U.S. exchanges and may n ot be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securitie s. In additi on,
such broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transaction s, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the
extent possible consistent with execution considerations) based upon the
quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
p rovided by and place agency transactions with Fidelity Brokerage
Services, Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries
of FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting co mmon stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal periods ended September 30, 1995 and 1994, the portfolio
turnover rates were 159 % and 97%, respectively for Spartan
Short-Term Income and 147 % and 44%, respectively for Spartan
Investment Grade Bond. Because a high turnover rate increases transaction
costs and may increase taxable gains, FMR carefully weighs the anticipated
benefits of short-term investing against these consequences.
For fiscal 1995, 1994, and 1993, Spartan Short-Term Income and
Spartan Investment Grade Bond paid no brokerage commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Each fund's net asset value per share is determined by Fidelity Service Co.
(FSC) under procedures established by the Board of Trustees. Portfolio
securities are valued primarily on the basis of valuations furnished by a
pricing service which uses both dealer-supplied valuations and electronic
data processing techniques that take into account appropriate factors such
as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics, and
other market data, without exclusive reliance on quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect
more accurately the fair value of such securities. Use of the pricing
service has been approved by the Board of Trustees. There are a number of
pricing services available, and the Trustees, or officers acting on behalf
of the Trustees, on the basis of ongoing evaluation of these services, may
use other pricing services or discontinue the use of any pricing service in
whole or in part.
Securities not valued by the pricing service and for which quotations are
readily available are valued at market values determined on the basis of
their latest available bid prices as furnished by recognized dealers in
such securities. Futures contracts and options are valued on the basis of
market quotations, if available. Securities and other assets for which
quotations or pricing service valuations are not readily available are
valued at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing the fund's
interest income for a given 30-day or one-month period, net of expenses, by
the average number of shares entitled to receive distributions during the
period, dividing this figure by the fund's net asset value (NAV) at the end
of the period, and annualizing the result (assuming compounding of income)
in order to arrive at an annual percentage rate. Income is calculated for
purposes of yield quotations in accordance with standardized methods
applicable to all stock and bond funds. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income. For a fund's investments denominated in
foreign currencies, income and expenses are calculated first in their
respective currencies, and are then converted to U.S. dollars, either when
they are actually converted or at the end of the 30-day or one month
period, whichever is earlier. Capital gains and losses generally are
excluded from the calculation as are gains and losses from currency
exchange rate fluctuations.
Income calculated for the purposes of calculating a fund's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration, and may omit or include the effect of the $5.00 account
closeout fee.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following tables show each fund's yields and
total returns for periods ended September 30, 1995. Total return figures
include the effect of the $5.00 account closeout fee based on an average
size account.
Average Annual Total Returns Cumulative Total Returns

Thirty-Day One One

Yield Year Life of Year Life of

Fund* Fund*

Spartan Short-Term Income 5.73 % 4.33 % 3.8 5% 4.33 % 12.00 %

</TABLE>

Average Annual Total Returns Cumulative Total Returns

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Thirty-Day One One
Yield Year Life of Year Life of
Fund* Fund*

Spartan Investment
Grade Bond 5.98 % 14.93 % 8.19 % 14.93 % 26.64 %

</TABLE>

* From October 1, 1992 (commencement of operations).
The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500),
the Dow Jones Industrial Average (DJIA), and the cost of living (measured
by the Consumer Price Index, or CPI) over the same period. The CPI
information is as of the month end closest to the initial investment date
for each fund. The S&P 500 and DJIA comparisons are provided to show how
each fund's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater growth
potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than a fixed-income investment such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
Durin g the period from October 1, 1992 (commencement of operations)
to September 30, 1995, a hypothetical $10,000 investment in Spartan
Short-Term Income would have grown to $ 11,201 , assuming all
distributions were reinvested. This was a period of fluctuating interest
rates and bond prices and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
SPARTAN SHORT-TERM INCOME FUND INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
September 30 $10,000 Dividend Capital Gain
Investment Distributions Distributions

1995 $ 9,130 $ 2,061 $ 10 $

11,201 $ 15,203 $ 15,886 $ 10,842

1994 $ 9,330 $ 1,395 $ 10 $ 10,735 $ 11,717 $ 12,429 $ 10,573

1993* $ 9,990 $ 779 $ 0 $ 10,769 $ 11,301 $ 11,190 $ 10,269

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SPARTAN INVESTMENT GRADE BOND FUND INDICES

</TABLE>

1995 $ 10,170 $ 2,448 $

48 $ 12,666 $ 15,203 $ 15,886 $ 10,842

1994 $ 9,510 $ 1,499 $ 10 $ 11,019 $ 11,717 $ 12,4 29 $ 10,573

1993* $ 10,940 $ 877 $ 0 $ 11,817 $ 11,301 $ 11,190 $ 10,269

</TABLE>

* From October 1, 1992 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on October 1,
1992, the net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$ 12,471 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $ 2,179 for
dividends and $ 40 for capital gains distributions. Tax consequences
of different investments have not been factored into the above figures. The
figures in the table do not reflect the effect of the fund's $5.00 account
closeout fee.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI ), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/ All
Taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 751 taxable money market funds. The Bond Fund Report
AverageS(trademark)/ All Taxable, which is reported in the BOND FUND
REPORT(registered trademark), covers over 554 taxable bond funds.
When evaluating comparisons to money market funds, investors should
consider the relevant differences in investment objectives and policies.
Specifically, money market funds invest in short-term, high-quality
instruments and seek to maintain a stable $1.00 share price. Bond funds,
however, invests in longer-term instruments and its share price changes
daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portf olios o r allocations;
saving for college or other goals; charitable giving; and the Fidelity
credit card. In addition, Fidelity may quote or reprint financial or
business publications and p eriodicals a s they relate to current
economic and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of September 30, 1995, FMR advised over $ 26.5 billion in tax-free
fund assets, $ 77 billion in money market fund assets, $ 226
billion in equity fund assets, $ 55 billion in international fund
assets, and $ 22 billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1995: N ew
Year's Day (observed), Presidents' Day, Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its hol iday schedule at any time. In
addition, the funds will not process wire purchases and redemptions on days
when the Federal Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your distributions at
the then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS . Because each fund's income is primarily derived from
interest, dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation. Gains (losses) attributable to foreign
currency fluctuations are generally taxable as ordinary income, and
therefore will increase (decrease) dividend distributions. As a
consequence, FMR may adjust a fund's income distributions to reflect the
effect of currency fluctuations. However, if foreign currency losses exceed
a fund's net investment income during a taxable year, all or a portion of
the distributions made in the same taxable year would be recharacterized as
a return of capital to shareholders, thereby reducing each shareholder's
cost basis in his or her fund. Each fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
As of September 30, 1995, Spartan Short-Term Income Fund had a capital loss
carryfo rward agg regating approximately $ 39,973,000 . This loss
carryforward, which will expire on September 30, 2003 , is available
to offset future capital gains. Also, as of September 30, 1995, Spartan
Investment Grade Bond Fund had a capital loss carryforward aggregating
approximately $ 105,000 . This loss carryforward , which will
expire on September 30, 2003, is available to offset future capital
gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign se curitie s. Foreign
governments may also impose taxes on other payments or gains with respect
to foreign securities. Because a fund does not currently anticipate that
securities of foreign issuers will constitute more than 50% of its total
assets at the end of its fiscal year, shareholders should not expect to
claim a foreign tax credit or deduction on their federal income tax returns
with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Charles Street Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp. , its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family members,
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act) control
of a company is presumed where one individual or group of individuals owns
more than 25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the shareholders'
voting agreement, members of the Johnson family may be deemed, under the
1940 Act, to form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most sec urities require pre-clearance, and
participation in initial public offerings is prohibited. In addition,
restrictions on the timing of personal investing i n relatio n to
trades by Fidelity funds and on short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. The
business address of each Trustee and officer who is an "interested person"
(as defined in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. Th e
business address of all the other Trustees is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are
"intereste d persons" by virtue of their affiliation with either the
trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), Truste e an d President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman and a
Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Truste e and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX (63), Trustee (1991), is a co ns ultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (63), T ruste e (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and previously served as
a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FL YNN ( 71), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Tr ustee (1990). Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He
is a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Ind ustries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Tru stee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J . KIRK (62), Tr ustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital As sociation, and as a Member of the Public
Oversight Board of the American Institute of Certified Public Accountants'
SEC Practice Section (1 995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director
of FMR (1992). Prior to May 31, 1990, he was a Director of FMR and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering
and construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUG H (6 6), Trustee, is Chairman of G.M. Management
Group (strategic advisory services). Prior to his retirement in July 1988,
he was Chairman and Chief Executive Officer of Leaseway Transportation
Corp. (physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), Tru stee. Prior to his retirement in 1985, Mr.
Malone was Chairman, General Electric Investment Corporation and a Vice
President of General Electric Company. He is a Director of Allegheny Power
Systems, Inc. (electric utility), General Re Corporation (reinsurance) and
Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of
Corporate Property Investors, the EPS Foundation at Trinity College, the
Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN ( 62), Tru stee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (67), Truste e, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring in
1987, Mr. Williams served as Chairman of the Board of First Wachovia
Corporation (bank holding company), and Chairman and Chief Executive
Officer of The First National Bank of Atlanta and First Atlanta Corporation
(bank holding company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNIN G, JR. (56), Vice President, is Vice President of
Fidelity's money market (1994) and fixed-income (1995) funds and Senior
Vice President of FMR Texas Inc.
MICHAEL GRAY (38), is manager and Vice President of Spartan Investment
Grade Bond, which he has managed since October 1992. Mr. Gray also
manages Advisor Limited Term Bond, Investment Grade Bond, and Intermediate
Bond. Mr. Gray joined Fidelity in 1982.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993)
and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (19 95), is Treasurer of the
Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr.
Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he
served in various positions, including Vice President of Proprietary
Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief
Operations Officer of Goldman Sachs (Asia) LLC (1994-1995)
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. R USH (49), Assista nt Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds,
Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation
of each current trustee of each fund for his or her services as trustee for
the fiscal year ended September 30, 1995.
COMPENSATION TABLE
Aggregate Compensation

Spartan $ 0 $ 290 $ 278 $ 357 $ 0 $ 290 $ 294 $ 0 $ 289 $ 290 $ 290 $ 287
Short-Term
Income

Spartan 0 57 55 69 0 57 57 0 57 57 57 56
Investment
Grade Bond

J. Gary Burkhead** $ 0 $ 0 $ 0

Ralph F. Cox 5,200 52,000 125,000

Phyllis Burke Davis 5,200 52,000 122,000

Richard J. Flynn 0 52,000 154,500

Edward C. Johnson 3d** 0 0 0

E. Bradley Jones 5,200 49,400 123,500

Donald J. Kirk 5,200 52,000 125,000

Peter S. Lynch** 0 0 0

Gerald C. McDonough 5,200 52,000 125,000

Edward H. Malone 5,200 44,200 128,000

Marvin L. Mann 5,200 52,000 125,000

Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the "Plan"). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee. The amount paid to the Trustee under the Plan
will be determined based upon the performance of such investments. Deferral
of Trustees' fees in accordance with the Plan will have a negligible effect
on a fund's assets, liabilities, and net income per share, and will not
obligate a fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. Each fund may invest such
designated securities without shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments are not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
On September 30, 1995 the Trustees and officers of each fund owned, in the
aggregate, less than 1% of each fund's total outstanding shares.

MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
FMR is responsible for the payment of all expenses of each fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, expenses for the typesetting, printing, and mailing proxy
materials to shareholders; legal expenses, and the fees of the custodian,
auditor and non-interested Trustees; costs of typesetting, printing, and
mailing prospectuses and statements of additional information, notices and
reports to shareholders; each fund's proportionate share of insurance
premiums and Investment Company Institute dues. FMR also provides for
transfer agent and dividend disbursing services and portfolio and general
accounting record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the trust or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which a fund
may be a party, and any obligation it may have to indemnify the officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated September
17, 1992 which were approved by FMR, then sole shareholder ,
on September 23, 1992. The management fee paid to FMR is reduced by an
amount equal to the fees and expenses of the non-interested Trustees.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of .65% of average net assets throughout
the month. Fees received by FMR for the last three fiscal years are shown
in the table below.

<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Ended Management Fees Paid to FMR

Spartan Short-Term Income Fund 1995 $ 3,876,612

1994 $ 7,978,380

1993 $ 3,552,694

Spartan Investment Grade Bond Fund 1995 $ 893,041

1994 $ 746,805

1993 $ 383,476

</TABLE>

FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FM R retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the r eimbursement by each fund will lower its total returns and
yield .
Du ring the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table on
page identifies the funds in reimbursement; the levels of and periods for
such reimbursement; the amount of management fees incurred under each
contract before reimbursement; and t he dollar amount reimbursed by FMR,
if any, for each period.
SPARTAN SHORT-TERM INCOME FUND
From To Expense Limitation

March 1, 1994 May 31, 1994 .60%

February 1, 1994 February 28, 1994 .55%

January 1, 1994 January 31, 1994 .50%

September 1, 1993 December 31, 1993 .40%

August 1, 1993 August 31, 1993 .30%

July 1, 1993 July 31, 1993 .20%

June 1, 1993 June 30, 1993 .15%

April 1, 1993 May 31, 1993 .05%

October 1, 1992 March 31, 1993 .00%

Management Fee Amount of

Fiscal Year Before Reimbursement Reimbursement

1995 $ 3,876,612 $ 0

1994 $ 7,978,380 $ 1,366,440

1993 $ 3,552,694 $ 2,450,328

If FMR had not temporarily reimbursed Spartan Short-Term Income's expenses
during the periods shown above, total operating expenses would have been
.65% of the fund's net assets.
SPARTAN INVESTMENT GRADE BOND FUND
Amount of

Fiscal Year Management Fee Reimbursement

1995 $ 893,041 $ 0

1994 $ 746,805 $ 0

1993 $ 383,476 $ 0

To defray shareholder service costs, FMR or its affiliates also collect
each fund's $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for
wire purchases and redemptions, and $2.00 checkwriting charge. Shareholder
transaction fees and charges collected by FMR are indicated in the table
below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Account
September 30, Exchange Fees Closeout Fees Wire Fees

Spartan Short-Term

Income Fund 1995 $23,850 $4,345 $ 692

1994 $89,740 $5,533 $2,045

1993 $23,105 $ 740 $1,350

Account
September 30, Exchange Fees Closeout Fees Wire Fees

Spartan Investment

Grade Bond Fund 1995 $6,260 $1,155 $220

1994 $ 8,590 $1,129 $265

1993 $4,465 $ 230 $180

</TABLE>

SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR U.K.
and FMR Far East. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from the
sub-advisers. FMR may also grant the sub-advisers investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
Currently, FMR U.K. and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of
FMR U.K. and FMR Far East. For providing non-discretionary investment
advice and research services, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.
For providing discretionary investment management and executing portfolio
transactions, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
monthly management fee rate with respect to each fund's average net assets
managed by the sub-adviser on a discretionary basis.
For the fiscal years ended September 30 1995, 1994, and 1993, no
fees were paid by FMR to FMR U.K. or FMR Far East on behalf of the funds.
DISTRIBUTION AND SERVICE PLANS
The T rustees have approved Distribution and Service Plans on behalf of
the funds (the Plans) pursuant to Rule 12b-1 under the Investment
Com pany Act of 1940 (the Rule). The Rule provides in substance that a
mutual fund may not engage directly or indirectly in financing any activity
that is primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect payment by
the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR
is deemed to be indirect financing by the funds of the distribution of
th eir shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
The Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a fund other than those made to FMR
under its management contract with the fund. To the extent that each Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
The Plans were approved by FMR as the then sole shareholder each fund on
September 23, 1992.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. I n addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein, and banks and financial in stitutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
FSC performs transfer agency, dividend disbursing, and shareholder
servicing functions for the funds. The costs of these services are borne by
FMR pursuant to its management contract with each fund. Under this
arrangement, FSC receives annual account fees and asset-based fees for each
retail account and certain institutional accounts based on account size. In
addition, the fees for retail accounts are subject to increase based on
postal rate changes. With respect to certain institutional retirement
accounts, FSC receives asset-based fees only. With respect to certain other
institutional retirement accounts, FSC receives annual account fees and
asset-based fees based on fund type. FSC also collects small account fees
from certain accounts with balances of less than $2,500. FSC also
calculates each fund's net asset value per share and dividends, maintains
each fund's general accounting records, and administers each fund's
securities lending program. Under this arrangement, FSC receives a fee
based on each fund's average net assets. The costs of these services are
also borne by FMR pursuant to its manag ement contract with each fund.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities and Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The distribution agreement
calls for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered at net asset value. Promotional and administrative
expenses in connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Spartan Short-Term Income Fund and Spartan Investment
Grade Bond Fund are funds of Fidelity Charles Street Trust, an open-end
management investment company organized as a Massachusetts business trust
on July 7, 1981. Currently, there are seven funds of the trust: Fidelity
Asset Manager, Fidelity Asset Manager: Growth, Fidelity Asset Manager:
Income, Fidelity Short-Intermediate Government Fund, Fidelity U.S.
Government Reserves, Spartan Short-Term Income Fund, and Spartan Investment
Grade Bond Fund. The Declaration of Trust permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; the voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the heading "Shareholder
and Trustee Liability" above. Shareholders representing 10% or more of the
trust or a fund may, as set forth in the Declaration of Trust, call
meetings of the trust or a fund for any purpose related to the trust or
fund, as the case may be, including, in the case of a meeting of the entire
trust, the purpose of voting on removal of one or more Trustees. The trust
or any fund may be terminated upon the sale of its assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the trust or the fund, as determined by the current value of
each shareholder's investment in the fund or trust. If not so terminated,
the trust and the funds will continue indefinitely. Each fund may invest
all of its assets in another investment company.
CUSTODIAN. Bank of New York, 110 Washington Street, New York, New York, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of a fund's assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian . Chemical Bank, headquartered in New York, also may serve
as a special purpose custodian of certain assets in connection with pooled
repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
serves as the trust's independent accountant. The auditor examines
financial statements for the funds and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended September 30, 1995 are included in the fund's Annual Report,
which is a separate report supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days remaining to its maturity, adding
these calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a stated
final maturity basis, although there are some exceptions to this rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities and some asset-backed
securities, such as collateralized mortgage obligations, are determined on
a weighted average life basis, which is the average time for principal to
be repaid. For a mortgage security, this average time is calculated by
estimating the timing of principal payments, including unscheduled
prepayments, during the life of the mortgage. The weighted average life of
these securities is likely to be substantially shorter than their stated
final maturity.
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. Th e
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) The Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity Asset Manager for the fiscal year ended
September 30, 1995, are incorporated herein by reference into the fund's
Statement of Additional Information and were filed on November 13, 1995 for
Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(2) The Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity Asset Manager: Growth for the fiscal year ended
September 30, 1995, are incorporated herein by reference into the fund's
Statement of Additional Information and were filed on November 13, 1995 for
Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(3) The Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity Asset Manager: Income for the fiscal year ended
September 30, 1995, are incorporated herein by reference into the fund's
Statement of Additional Information and were filed on November 13, 1995 for
Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(4) The Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity Short-Intermediate Government Fund for the
fiscal year ended September 30, 1995, are incorporated herein by reference
into the fund's Statement of Additional Information and were filed on
November 13, 1995 for Fidelity Charles Street Trust (File No. 811-3221)
pursuant to Rule 30d-1under the Investment Company Act of 1940 and are
incorporated herein by reference.
(a)(5) The Financial Statements and Financial Highlights, included in the
Annual Report, for Spartan Short-Term Income Fund for the fiscal year ended
September 30, 1995, are incorporated herein by reference into the fund's
Statement of Additional Information and were filed on November 13, 1995 for
Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(6) The Financial Statements and Financial Highlights, included in the
Annual Report, for Spartan Investment Grade Bond Fund for the fiscal year
ended September 30, 1995, are incorporated herein by reference into the
fund's Statement of Additional Information and were filed on November 13,
1995 for Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(a)(7) The Financial Statements and Financial Highlights, included in the
Annual Report, for Fidelity Government Securities Fund for the fiscal year
ended September 30, 1995, are incorporated herein by reference into the
fund's Statement of Additional Information and were filed on November 13,
1995 for the fund (File No. 811-2869) pursuant to Rule 30d-1under the
Investment Company Act of 1940 and are incorporated herein by reference.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust, dated November 17, 1994,
is filed herein as Exhibit 1.
(2) By-Laws of the Trust, as amended, are incorporated herein by
reference to Exhibit 2(a) to Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract between Fidelity Short-Intermediate
Government Fund (formerly Fidelity Limited Maturity Government Fund) and
Fidelity Management & Research Company, dated October 1, 1994, is
incorporated herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 52.
(b) Management Contract between Fidelity U.S. Government Reserves
and Fidelity Management & Research Company, dated October 1, 1994, is
incorporated herein by reference to Exhibit 5(b) to Post-Effective
Amendment No. 51.
(c) Management Contract between Fidelity Asset Manager and
Fidelity Management & Research Company, dated October 1, 1994, is
incorporated herein by reference to Exhibit 5(c) to Post-Effective
Amendment No. 52.
(d) Management Contract between Fidelity Asset Manager: Growth
and Fidelity Management & Research Company, dated October 1, 1994, is
incorporated herein by reference to Exhibit 5(d) to Post-Effective
Amendment No. 52.
(e) Management Contract between Fidelity Asset Manager: Income
and Fidelity Management & Research Company, dated October 1, 1994, is
incorporated herein by reference to Exhibit 5(e) to Post-Effective
Amendment No. 52.
(f) Management Contract between Spartan Investment Grade Bond Fund
and Fidelity Management & Research Company, dated September 17, 1992, is
incorporated herein by reference to Exhibit 5(f) to Post-Effective
Amendment No. 46.
(g) Management Contract between Spartan Short-Term Income Fund
(formerly Spartan Short-Term Bond Fund) and Fidelity Management & Research
Company, dated September 17, 1992, is incorporated herein by reference to
Exhibit 5(g) to Post-Effective Amendment No. 46.
(h) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Fidelity Asset Manager, dated October 1, 1994, is incorporated herein by
reference to Exhibit 5(i) to Post-Effective Amendment No. 52.
(i) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., on behalf of
Fidelity Asset Manager, dated October 1, 1994, is incorporated herein by
reference to Exhibit 5(j) to Post-Effective Amendment No. 52.
(j) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Fidelity Asset Manager: Growth, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(k) to Post-Effective Amendment No. 52.
(k) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., on behalf of
Fidelity Asset Manager: Growth, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(l) to Post-Effective Amendment No. 52.
(l) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Fidelity Asset Manager: Income, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(m) to Post-Effective Amendment No. 52.
(m) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., on behalf of
Fidelity Asset Manager: Income, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(n) to Post-Effective Amendment No. 52.
(n) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Spartan Investment Grade Bond Fund, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(o) to Post-Effective Amendment No. 52.
(o) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., on behalf of
Spartan Investment Grade Bond Fund, dated October 1, 1994, is incorporated
herein by reference to Exhibit 5(p) to Post-Effective Amendment No. 52.
(p) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Spartan Short-Term Income Fund (formerly Spartan Short-Term Bond Fund),
dated October 1, 1994, is incorporated herein by reference to Exhibit 5(q)
to Post-Effective Amendment No. 52.
(q) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc., on behalf of
Spartan Short-Term Income Fund (formerly Spartan Short-Term Bond Fund),
dated October 1, 1994, is incorporated herein by reference to Exhibit 5(r)
to Post-Effective Amendment No. 52.
(6)(a) General Distribution Agreement between Fidelity Asset Manager and
Fidelity Distributors Corporation, dated December 28, 1988, is incorporated
herein by reference to Exhibit 6(b) to Post-Effective Amendment No. 51.
(b) General Distribution Agreement between Fidelity Asset Manager:
Growth and Fidelity Distributors Corporation, dated September 21, 1990, is
incorporated herein by reference to Exhibit 6(d) to Post-Effective
Amendment No. 52.
(c) General Distribution Agreement between Fidelity
Short-Intermediate Government Fund (formerly Fidelity Limited Maturity
Government Fund) and Fidelity Distributors Corporation, dated September 5,
1991, is incorporated herein by reference to Exhibit 6(e) to Post-Effective
Amendment No. 52.
(d) General Distribution Agreement between Fidelity Asset Manager:
Income and Fidelity Distributors Corporation, dated July 16, 1992, is
incorporated herein by reference to Exhibit 6(f) to Post-Effective
Amendment No. 52.
(e) General Distribution Agreement between Spartan
Investment-Grade Bond Fund and Fidelity Distributors Corporation, dated
September 17, 1992, is incorporated herein by reference to Exhibit 6(g) to
Post-Effective Amendment No. 46.
(f) General Distribution Agreement between Spartan Short-Term
Income Fund (formerly Spartan Short-Term Bond Fund) and Fidelity
Distributors Corporation, dated September 17, 1992, is incorporated herein
by reference to Exhibit 6(h) to Post-Effective Amendment No. 46.
(g) Amendment to General Distribution Agreement between Fidelity
Short-Intermediate Government Fund (formerly Fidelity Limited Maturity
Government Fund), Spartan Investment Grade Bond Fund, and Spartan
Short-Term Income Fund (formerly Spartan Short-Term Bond Fund) and Fidelity
Distributors Corporation, dated May 10, 1994, is incorporated herein by
reference to Exhibit 6(i) to Post-Effective Amendment No. 52.
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners is incorporated herein by reference to Exhibit 7 to
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.
(7)(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of ___________, 1995 is filed
herein as Exhibit 7(b).
(8)(a) Custodian Agreement, Appendix A, and Appendix C, dated August 1,
1994, between The Chase Manhattan Bank, N.A. and Fidelity Charles Street
Trust on behalf of Fidelity Asset Manager, Fidelity Asset Manager: Income,
and Fidelity Asset Manager: Growth is incorporated herein by reference to
Exhibit 8(a) to Fidelity Investment Trust's Post-Effective Amendment No. 59
(File No. 2-90649).
(b) Appendix B, dated September 14, 1995, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan Bank, N.A. and
Fidelity Charles Street Trust on behalf of Fidelity Asset Manager, Fidelity
Asset Manager: Income, and Fidelity Asset Manager: Growth is filed herein
as Exhibit 8(b).
(c) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Charles Street Trust on behalf of
Fidelity Short-Intermediate Government Fund, Spartan Short-Term Income
Fund, and Spartan Investment Grade Bond Fund is incorporated herein by
reference to Exhibit 8(a) to Fidelity Hereford Street Trust's
Post-Effective Amendment No. 4 (File No. 33-52577).
(d) Appendix A, dated September 14, 1995, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and
Fidelity Charles Street Trust on behalf of Fidelity Short-Intermediate
Government Fund, Spartan Short-Term Income Fund, and Spartan Investment
Grade Bond Fund is filed herein as Exhibit 8(d).
(e) Appendix B, dated September 14, 1995, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and
Fidelity Charles Street Trust on behalf of Fidelity Short-Intermediate
Government Fund, Spartan Short-Term Income Fund, and Spartan Investment
Grade Bond Fund is filed herein as Exhibit 8(e).
(9) Not applicable.
(10) Not applicable.
(11)(a) Consent of Price Waterhouse LLP is filed herein as Exhibit 11(a).
(b) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
11(b).
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) to Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) to Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) to Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATE plan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATE plan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) to Fidelity Commonwealth Trust's (File
No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) to Fidelity Commonwealth Trust's (File No. 2-52322) Post
Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) to Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) to Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) to Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) to Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) to Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
to Fidelity Securities Fund's (File No. 2-93601) Post Effective Amendment
No. 33.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Asset Manager is incorporated herein by reference to Exhibit 15(b) to
Post-Effective Amendment No. 52.
(b) Distribution and Service Plan pursuant to Rule l2b-l for Fidelity
Asset Manager: Growth is incorporated herein by reference to Exhibit 15(c)
to Post-Effective Amendment No. 52.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Short-Intermediate Government Fund (formerly Fidelity Limited Maturity
Government Fund) is incorporated herein by reference to Exhibit 15(d) to
Post-Effective Amendment No. 52.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Asset Manager: Income is incorporated herein by reference to Exhibit 15(e)
to Post-Effective Amendment No. 52.
(e) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Investment Grade Bond Fund is incorporated herein by reference to Exhibit
15(f) to Post-Effective Amendment No. 52.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Short-Term Income Fund (formerly Spartan Short-Term Bond Fund) is
incorporated herein by reference to Exhibit 15(g) to Post-Effective
Amendment No. 52.
(16) (a) A schedule for computation of 30-day yields and total return is
filed herein as Exhibit 16(a).
(b) A schedule for computation of moving averages for Fidelity Asset
Manager is incorporated herein by reference to Exhibit 16(b) to
Post-Effective Amendment No. 48.
(17) Financial Data Schedules are filed herein as Exhibit 27.
(18) Not applicable.
Item 25. Persons Controlled by or under Common Control with Registrant
The Registrant's Board of Trustees is the same as the boards of other
funds managed by Fidelity Management & Research Company. In addition, the
officers of these funds are substantially identical. Nonetheless,
Registrant takes the position that it is not under common control with
these other funds since the power residing in the respective boards and
officers arises as the result of an official position with the respective
funds.
Item 26. Number of Holders of Securities: September 30, 1995

Title of Class: Shares of Beneficial Interest
Name of Series Number of Recordholders

Fidelity Asset Manager: Income 86,484

Fidelity Asset Manager 1,144,482

Fidelity Asset Manager: Growth 370,606

Fidelity Short-Intermediate Government Fund 15,732

Spartan Investment Grade Bond Fund 4,507

Spartan Short-Term Income Fund 14,314

Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.

J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.

Peter S. Lynch Vice Chairman and Director of FMR.

Robert Beckwitt Vice President of FMR and of funds advised by FMR.

David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.

Stephan Campbell Vice President of FMR (1993).

Dwight Churchill Vice President of FMR (1993).

William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.

Scott DeSano Vice President of FMR (1993).

Penelope Dobkin Vice President of FMR and of a fund advised by FMR.

Larry Domash Vice President of FMR (1993).

George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.

Robert K. Duby Vice President of FMR.

Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.

Kathryn L. Eklund Vice President of FMR.

Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.

Daniel R. Frank Vice President of FMR and of funds advised by FMR.

Michael S. Gray Vice President of FMR and of funds advised by FMR.

Lawrence Greenberg Vice President of FMR (1993).

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

William J. Hayes Senior Vice President of FMR; Equity Division Leader.

Robert Haber Vice President of FMR and of funds advised by FMR.

Richard Haberman Senior Vice President of FMR (1993).

Daniel Harmetz Vice President of FMR and of a fund advised by FMR.

Ellen S. Heller Vice President of FMR.

</TABLE>

John Hickling Vice President of FMR (1993) and of funds advised by
FMR.

Robert F. Hill Vice President of FMR; Director of Technical Research.

Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).

David B. Jones Vice President of FMR (1993).

Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.

Frank Knox Vice President of FMR (1993).

Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.

Alan Leifer Vice President of FMR and of a fund advised by FMR.

Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Malcolm W. MacNaught III Vice President of FMR (1993).

Robert H. Morrison Vice President of FMR; Director of Equity Trading.

David Murphy Vice President of FMR and of funds advised by FMR.

Andrew Offit Vice President of FMR (1993).

Judy Pagliuca Vice President of FMR (1993).

Jacques Perold Vice President of FMR.

Anne Punzak Vice President of FMR and of funds advised by FMR.

Lee Sandwen Vice President of FMR (1993).

Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.

Thomas T. Soviero Vice President of FMR (1993).

Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.

Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.

Thomas Sweeney Vice President of FMR (1993).

Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.

Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.

Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.

Robert Tucket Vice President of FMR (1993).

George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.

Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.

Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.

Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.

</TABLE>

(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management & Research
(Far East) Inc.; President and Trustee of funds advised by FMR.

J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.

Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director of
Worldwide Research of FMR.

Rick Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K. (1993).

Stephen P. Jonas Treasurer of FMR U.K. (1993), Fidelity Management &
Research (Far East) Inc. (1993), and FMR Texas Inc. (1993);
Treasurer and Vice President of FMR (1993).

David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management & Research
(Far East) Inc.; Secretary of FMR Texas Inc.

</TABLE>

(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The directors
and officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.

<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.

J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management &
Research (U.K.) Inc.; Senior Vice President and Trustee
of funds advised by FMR.

Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research (U.K.)
Inc.; Director of Worldwide Research of FMR.

William R. Ebsworth Vice President of FMR Far East.

Bill Wilder Vice President of FMR Far East (1993).

Stephen P. Jonas Treasurer of FMR Far East (1993), Fidelity Management
& Research (U.K.) Inc. (1993), and FMR Texas Inc.
(1993); Treasurer and Vice President of FMR (1993).

David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management &
Research (U.K.) Inc.; Secretary of FMR Texas Inc.

</TABLE>

Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

Nita B. Kincaid Director None

W. Humphrey Bogart Director None

Kurt A. Lange President and Treasurer None

William L. Adair Senior Vice President None

Thomas W. Littauer Senior Vice President None

Arthur S. Loring Vice President and Clerk Secretary

* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or each fund's respective
custodian: The Bank of New York, 110 Washington Street, New York, N.Y. and
The Chase Manhattan Bank, 1211 Avenue of the Americas, New York, N.Y.
Item 31. Management Services
Not applicable.
(a) The Registrant undertakes for Fidelity Asset Manager: Income: 1) to
call a meeting of shareholders for the purpose of voting upon the question
of removal of a trustee or trustees, when requested to do so by record
holders of not less than 10% of its outstanding shares; and 2) to assist in
communications with other shareholders pursuant to Section 16(c)(1) and
(2), whenever shareholders meeting the qualifications set forth in Section
16(c) seek the opportunity to communicate with other shareholders with a
view toward requesting a meeting.
(b) The Registrant undertakes for Spartan Investment Grade Bond Fund and
Spartan Short-Term Income Fund: 1) to call a meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or
trustees, when requested to do so by record holders of not less than 10% of
its outstanding shares; and 2) to assist in communications with other
shareholders pursuant to Section 16(c)(1) and (2), whenever shareholders
meeting the qualifications set forth in Section 16(c) seek the opportunity
to communicate with other shareholders with a view toward requesting a
meeting.
(c) The Registrant on behalf of Fidelity Asset Manager, Fidelity Asset
Manager: Growth, Fidelity Asset Manager: Income, Fidelity
Short-Intermediate Government Fund, Spartan Investment Grade Bond Fund and
Spartan Short-Term Income Fund undertakes, provided the information
required by Item 5A is contained in the annual report, to furnish each
person to whom a prospectus has been delivered, upon their request and
without charge, a copy of the Registrant's latest annual report to
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 54 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 16th day
of November 1995.
FIDELITY CHARLES STREET TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)

<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee November 16, 1995

Edward C. Johnson 3d (Principal Executive Officer)

</TABLE>

/s/Kenneth A. Rathgeber Treasurer November 16, 1995

Kenneth A. Rathgeber

/s/J. Gary Burkhead Trustee November 16, 1995

J. Gary Burkhead

/s/Ralph F. Cox * Trustee November 16, 1995

Ralph F. Cox

/s/Phyllis Burke Davis * Trustee November 16, 1995

Phyllis Burke Davis

/s/Richard J. Flynn * Trustee November 16, 1995

Richard J. Flynn

/s/E. Bradley Jones * Trustee November 16, 1995

E. Bradley Jones

/s/Donald J. Kirk * Trustee November 16, 1995

Donald J. Kirk

/s/Peter S. Lynch * Trustee November 16, 1995

Peter S. Lynch

/s/Edward H. Malone * Trustee November 16, 1995

Edward H. Malone

/s/Marvin L. Mann_____* Trustee November 16, 1995

Marvin L. Mann

/s/Gerald C. McDonough* Trustee November 16, 1995

Gerald C. McDonough

/s/Thomas R. Williams * Trustee November 16, 1995

Thomas R. Williams

(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk

Edward C. Johnson 3d Donald J. Kirk

/s/J. Gary Burkhead /s/Peter S. Lynch

J. Gary Burkhead Peter S. Lynch

/s/Ralph F. Cox /s/Marvin L. Mann

Ralph F. Cox Marvin L. Mann

/s/Phyllis Burke Davis /s/Edward H. Malone

Phyllis Burke Davis Edward H. Malone

/s/Richard J. Flynn /s/Gerald C. McDonough

Richard J. Flynn Gerald C. McDonough

/s/E. Bradley Jones /s/Thomas R. Williams

E. Bradley Jones Thomas R. Williams

POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:

<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund

</TABLE>

plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as President and Board Member (collectively, the "Funds"), hereby
severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994

Edward C. Johnson 3d

Exhibit 1
AMENDED AND RESTATED DECLARATION OF TRUST
DATED NOVEMBER 17, 1994
AMENDED AND RESTATED DECLARATION OF TRUST, made November 17, 1994 by each
of the Trustees whose signature is affixed hereto (the "Trustees")
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration to incorporate
amendments duly adopted; and
WHEREAS, this Trust was initially made on July 7, 1981 by Edward C.
Johnson 3d and Caleb Loring in order to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in Trust
under this Amended and Restated Declaration of Trust as herein set forth
below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Charles Street Trust."
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the context
or specifically provided:
(a) The Terms "Affiliated Person," "Assignment," "Commission," "Interested
Person," "Majority Shareholder Vote" (the 67% or 50% requirement of the
third sentence of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings given them
in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to Fidelity Charles Street Trust and reference to
the Trust, when applicable to one or more Series of the Trust, shall refer
to any such Series;
(c) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the
time being in office as such trustee or trustees;
(f) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest of the Trust or each Series shall be
divided from time to time, including such class or classes of Shares as the
Trustees may from time to time create and establish and including fractions
of Shares as well as whole Shares consistent with the requirements of
Federal and/or other securities laws;
(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time; and
(h) "Series" refers to series of Shares of the Trust established in
accordance with the provisions of Article III.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of
managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into such
transferable Shares of one or more separate and distinct Series or classes
as the Trustees shall from time to time create and establish. The number of
Shares is unlimited and each Share shall be without par value and shall be
fully paid and nonassessable. The Trustees shall have full power and
authority, in their sole discretion and without obtaining any prior
authorization or vote of the Shareholders or of any Series or class of
Shareholders of the Trust, to create and establish (and to change in any
manner) Shares or any Series or classes of thereof with such preferences,
voting powers, rights and privileges as the Trustees may from time to time
determine, to divide or combine the Shares or any Series or classes thereof
into a greater or lesser number, to classify or reclassify any issued
Shares into one or more Series or classes of Shares, to abolish any one or
more Series or classes of Shares, and to take such other action with
respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES
Section 2. The establishment of any Series shall be effective upon the
adoption of a resolution by a majority of the then Trustees setting forth
such establishment and designation and the relative rights and preferences
of the Shares of such Series. At any time that there are no Shares
outstanding of any particular Series previously established and designated,
the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of the
Trust. The Trustees may make such rules as they consider appropriate for
the transfer of Shares and similar matters. The record books of the Trust
shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the
appropriate Series is authorized to invest, valued as provided in Article
X, Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding and the amount received by the
Trustees on account of the contribution shall be treated as an asset of the
Trust. Subsequent investments in the Trust shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge
upon investments in the Trust and (b) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for the issue or sale
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in
such manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders
of all Series for all purposes, and shall be referred to as assets
belonging to that Series. The assets belonging to a particular Series shall
be so recorded upon the books of the Trust, and shall be held by the
Trustees in Trust for the benefit of the holders of Shares of that Series.
The assets belonging to each particular Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees between or among any one or more of the Series in such manner as
the Trustees in their sole discretion deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Any creditor of any Series may look only to the
assets of that Series to satisfy such creditor's debt.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust
or the Trustees.
LIMITATION OF PERSONAL LIABILITY
Section 7. The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust shall include a
recitation limiting the obligation represented thereby to the Trust and its
assets (but the omission of such a recitation shall not operate to bind any
Shareholder).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility.
ELECTION: Initial Trustees
Section 2. On a date fixed by the Trustees, the Shareholders shall elect
not less than three Trustees. A Trustee shall not be required to be a
Shareholder of the Trust. The initial Trustees shall be Edward C. Johnson
3d, Caleb Loring, Jr., and Frank Nesvet, and such other individuals as the
Board of Trustees shall appoint pursuant to Section 4 of the Article IV.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a) that
any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument, signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has become incapacitated by illness or injury
may be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may be
removed at any Special Meeting of the Trust by a vote of two-thirds of the
outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or by
recording in the records of the Trust, whereupon the appointment shall take
effect. An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this
trust, the trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power of appointment is subject to
the provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his power for
a period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more than
twelve (12), serving hereunder at any time shall be determined by the
Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy,
absence or incapacity, shall be conclusive, provided, however, that no
vacancy shall remain unfilled for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets of
the Trust shall at all times be considered as vested in the Trustees. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof, but
each Shareholder shall have a proportionate undivided beneficial interest
in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees shall
have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in the Declaration of
Trust or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by
any present or future law or custom in regard to investments by Trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ a bank or trust company as custodian of any assets of the
Trust subject to any conditions set forth in this Declaration of Trust or
in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or both.
(f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any officers
of the Trust and to any agent, custodian or underwriter.
(i) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XII, Section 4(b) hereof.
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in its
own name or in the name of a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual practice of
Massachusetts trust companies or investment companies.
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III.
(n) To allocate assets, liabilities and expenses of the Trust to a
particular Series or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by a particular
Series shall be payable solely out of the assets belonging to that Series
as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited
to, claims for taxes.
(q) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided for.
(r) To borrow money and to pledge, mortgage or hypothecate the assets of
the Trust, subject to applicable requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving notice
to such Shareholder.
(t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be issued
and sold Shares to and buy such Shares from any such person or any firm or
company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone
consent provided a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken
only at a meeting of the Trustees. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the Trustees
or by any two other Trustees. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the meeting to
each Trustee by telephone or telegram sent to his home or business address
at least twenty-four hours in advance of the meeting or by written notice
mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who attends
the meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to
any one of their number their authority to approve particular matters or
take particular actions on behalf of the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets belonging
to the appropriate Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not Interested
Persons of the Trust, interest expense, taxes, fees and commissions of
every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares including expenses attributable
to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and State
laws and regulations, charges of custodians, transfer agents, and
registrars, expenses of preparing and setting up in type prospectuses and
Statements of Additional Information, expenses of printing and distributing
prospectuses sent to existing Shareholders, auditing and legal expenses,
reports to Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expense, association membership dues and
for such non-recurring items as may arise, including litigation to which
the Trust is a party, and for all losses and liabilities by them incurred
in administering the Trust, and for the payment of such expenses,
disbursements, losses and liabilities the Trustees shall have a lien on the
assets belonging to the appropriate Series prior to any rights or interests
of the Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL, UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees may in
their discretion from time to time enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof
whereby the other party(ies) to such contract(s) shall undertake to furnish
the Trustees such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any, and
all upon such terms and conditions, as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize the investment adviser(s) (subject to such general
or specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities and other
investment instruments of the Trust on behalf of the Trustees or may
authorize any officer, agent, or Trustee to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser (and all
without further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by all of the Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to Shareholder approval, authorize the investment
adviser to employ one or more sub-advisers from time to time to perform
such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser
and sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time enter
into a contract(s) providing for the sale of the Shares, whereby the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case,
the contract shall be on such terms and conditions as may be prescribed in
the Bylaws, if any, and such further terms and conditions as the Trustees
may in their discretion determine not inconsistent with the provisions of
this Article VII, or of the Bylaws, if any; and such contract may also
provide for the repurchase or sale of Shares by such other party as
principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time enter
into a transfer agency and Shareholder service contract whereby the other
party shall undertake to furnish the Trustees with transfer agency and
Shareholder services. The contract shall be on such terms and conditions as
the Trustees may in their discretion determine not inconsistent with the
provisions of this Declaration of Trust or of the Bylaws, if any. Such
services may be provided by one or more entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2 and 3
of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more
of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, and no
such contract shall be invalidated or rendered voidable by reason of the
existence of any relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable
for any profit realized directly or indirectly therefrom, provided that the
contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article VII or the Bylaws, if any. The same
person (including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections 1, 2
and 3 above or Article IX, and any individual may be financially interested
or otherwise affiliated with persons who are parties to any or all of the
contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2 of this
Article VII shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act (including any amendments thereof or other
applicable Act of Congress hereafter enacted) with respect to its
continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal thereof, and no amendment to any
contract, entered into pursuant to Section 1 shall be effective unless
assented to by a Majority Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote (i) for the election
of Trustees as provided in Article IV, Section 2, (ii) for the removal of
Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
Section 1 and 5, (iv) with respect to the amendment of this Declaration of
Trust as provided in Article XII, Section 7, (v) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or not
a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a particular Series
shall not be entitled to bring any derivative or class action on behalf of
any other Series of the Trust, and (vi) with respect to such additional
matters relating to the Trust as may be required or authorized by law, by
this Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all shares shall be voted
by individual Series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more Series, then only the Shareholders of such Series shall be
entitled to vote thereon. A shareholder of each series shall be entitled to
one vote for each dollar of net asset value (number of shares owned times
net asset value per share) of such series, on any matter on which such
shareholder is entitled to vote and each fractional dollar amount shall be
entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this
Declaration of Trust or any Bylaws of the Trust to be taken by
Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other
place as the Trustees may designate. Special meetings of the Shareholders
of any Series may be called by the Trustees and shall be called by the
Trustees upon the written request of Shareholders owning at least one-tenth
of the outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the
1940 Act, as the same may be amended from time to time, seek the
opportunity of furnishing materials to the other Shareholders with a view
to obtaining signatures on such a request for a meeting, the Trustees shall
comply with the provisions of said Section 16(c) with respect to providing
such Shareholders access to the list of the Shareholders of record of the
Trust or the mailing of such materials to such Shareholders of record.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of
Trust permits or requires that holders of any Series shall vote as a Series
then a majority of the aggregate number of Shares of that Series entitled
to vote shall be necessary to constitute a quorum for the transaction of
business by that Series. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws, if any, a majority of
the Shares voted in person or by proxy shall decide any questions and a
plurality shall elect a Trustee provided that where any provision of law or
of this Declaration of Trust permits or requires that the holders of any
Series shall vote as a Series, then a majority of the Shares of that Series
voted on the matter shall decide that matter insofar as that Series is
concerned.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank or trust company
having capital, surplus and undivided profits of at least two million
dollars ($2,000,000), or such other amount or such other entity as shall be
allowed by the Commission or by the 1940 Act, as custodian with authority
as its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust and
the custodian, if such procedures have been authorized in writing by the
Trust;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical and
accounting services; and
(2) to compute, if authorized to do so by the Trustees, the Net Asset Value
of any Series in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by
it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank or trust
company organized under the laws of the United States or one of the states
thereof and having capital, surplus and undivided profits of at least two
million dollars ($2,000,000) or such other person as may be permitted by
the Commission, or otherwise in accordance with the 1940 Act as from time
to time amended.
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit all
or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by the Commission, or otherwise in accordance with the
1940 Act as from time to time amended, pursuant to which system all
securities of any particular class or series of any issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided
that all such deposits shall be subject to withdrawal only upon the order
of the Trust.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have power, to the fullest extent permitted by the
laws of Massachusetts, at any time to declare and cause to be paid
dividends on Shares of a particular Series, from the assets belonging to
that Series, which dividends, at the election of the Trustees, may be paid
daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, and may be
payable in Shares of that Series at the election of each Shareholder of
that Series.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute pro rata among the
Shareholders of a particular Series as of the record date of that Series
fixed as provided in Section 3 hereof a "stock dividend."
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular Series
desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of that Series a written request
or such other form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in accordance
with this Section 2; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter
of the Series shall purchase his said Shares, but only at the Net Asset
Value thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series and payment for such Shares shall
be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value per Share
shall be determined separately for each Series of Shares and shall be
determined on such days and at such times as the Trustees may determine.
Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees, provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act and
the rules, regulations and interpretations thereof promulgated or issued by
the Commission or insofar as permitted by any Order of the Commission
applicable to the Series. The Trustees may delegate any of its powers and
duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the value per Share last
determined to be determined again in similar manner and may fix the time
when such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no
right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share existing after the
termination of the suspension.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of
the Trust, the Trustees shall not be responsible for or liable in any event
for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained herein shall protect
any Trustee against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
INDEMNIFICATION
Section 2.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as "Covered Person") shall be indemnified by the
appropriate Series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes involved as
a party or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office or (B) not to
have acted in good faith in the reasonable belief that his action was in
the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither interested
persons of the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
be such Trustee or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Trustees and officers, and other persons may be entitled by contract
or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 2 may be paid by the applicable Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the applicable Series if it is ultimately determined
that he is not entitled to indemnification under this Section 2; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither interested persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 2.
SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder of any Series of
the Trust shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the applicable
Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to
bind personally either the Trust's officers or any Shareholder. All persons
extending credit to, contracting with or having any claim against the Trust
or the Trustees shall look only to the assets of the appropriate Series for
payment under such credit, contract or claim; and neither the Shareholders
nor the Trustees, nor any of their agents, whether past, present or future,
shall be personally liable therefor. Nothing in this Declaration of Trust
shall protect a Trustee against any liability to which the Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to the
provisions of Section 1 of this Article XII and to Article XI, the Trustees
shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust, and subject to the
provisions of Section 1 of this Article XII and to Article XI, shall be
under no liability for any act or omission in accordance with such advice
or for failing to follow such advice. The Trustees shall not be required to
give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the Trust
for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends or
the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote at,
any such meeting, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 4.
(b) Subject to a Majority Shareholder Vote of each Series affected by the
matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may
(i) sell and convey the assets of the Trust or any affected Series to
another trust, partnership, association or corporation organized under the
laws of any state which is a diversified open-end management investment
company as defined in the 1940 Act, for adequate consideration which may
include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any affected Series,
and which may include shares of beneficial interest or stock of such trust,
partnership, association or corporation; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making provision for the payment of all such liabilities in either
(i) or (ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably among the
holders of the Shares of the Trust or any affected Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and interest
of all parties shall be cancelled and discharged.
FILING OF COPIES, REFERENCES, AND HEADINGS
Section 5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Secretary of the Commonwealth of Massachusetts and
the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer or Trustee of the Trust as to whether
or not any such supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same
effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this instrument or of any
such supplemental declaration of trust. In this instrument or in any such
supplemental declaration of trust, references to this instrument, and all
expressions like "herein," "hereof" and "hereunder," shall be deemed to
refer to this instrument as amended or affected by any such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The trust set forth in this instrument is made in the
Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
trust.
AMENDMENTS
Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable
law or this Declaration of Trust in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a declaration of
trust supplemental hereto, which thereafter shall form a part hereof,
except that an amendment which shall affect the Shareholders of one or more
Series but not the Shareholders of all outstanding Series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each Series affected and no vote of Shareholders of a
Series not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require authorization by
Shareholder vote. Copies of the supplemental declaration of trust shall be
filed as specified in Section 5 of this Article XII.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified date as
set forth in the Bylaws, if any, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
USE OF THE WORD "FIDELITY"
Section 9. Fidelity Management & Research Company ("FMR") has consented
to the use by any Series of the Trust of the identifying word "Fidelity" in
the name of any Series of the Trust at some future date. Such consent is
conditioned upon the employment of FMR as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of the
name of the Trust insofar as such name contains the identifying word
"Fidelity". FMR may from time to time use the identifying word "Fidelity"
in other connections and for other purposes, including, without limitation,
in the names of other investment companies, corporations or businesses
which it may manage, advise, sponsor or own or in which it may have a
financial interest. FMR may require the Trust or any Series thereof to
cease using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR or a
subsidiary or affiliate thereof as investment adviser.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 17th day of November, 1994.

/s/Edward C. Johnson 3d /s/Donald S. Kirk

Edward C. Johnson 3d Donald J. Kirk

/s/J. Gary Burkhead /s/Peter S. Lynch

J. Gary Burkhead Peter S. Lynch

/s/Ralph F. Cox /s/Gerald C. McDonough

Ralph F. Cox Gerald C. McDonough

/s/Phyllis Burke Davis /s/Edward H. Malone

Phyllis Burke Davis Edward H. Malone

/s/Richard J. Flynn /s/Marvin L. Mann

Richard J. Flynn Marvin L. Mann

/s/E. Bradley Jones /s/Thomas R. Williams

E. Bradley Jones Thomas R. Williams

THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
SECRETARY OF THE COMMONWEALTH
STATE HOUSE - BOSTON, MA
CERTIFICATE OF FIDELITY CHARLES STREET TRUST
We, J. Gary Burkhead, Senior Vice President and Arthur S. Loring,
Secretary of
FIDELITY CHARLES STREET TRUST
82 Devonshire Street
Boston, MA 02109
do certify that, in accordance with ARTICLE XII, SECTION 7 of the Fidelity
Charles Street Trust Declaration of Trust, the Trustees of said Trust, on
March 17, 1994 and the shareholders of said Trust on September 21, 1994
amended such Declaration of Trust and the Trustees further have restated
such Declaration of Trust, incorporating all amendments to the Declaration
of Trust duly adopted by the Trustees and Shareholders prior to the date of
such restatement.
The attached Amendment and Restatement is hereby filed in accordance with
Chapter 182, Section 2 of the General Laws.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 17th day of November, 1994.

/s/J. Gary Burkhead /s/Arthur S. Loring

J. Gary Burkhead Arthur S. Loring

Senior Vice President Secretary

_____________________________ _____________________________

J. Gary Burkhead Arthur S. Loring

Senior Vice President Secretary

Exhibit 8(b)
Appendix "B"
To
Custodian Agreement
Between
The Chase Manhattan Bank, N.A. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of September 14, 1995

The following is a list of Additional Custodians, Special Subcustodians and
Foreign Subcustodians under the Custodian Agreement dated as of August 1,
1994 (the "Custodian Agreement"):
A. Additional Custodians:
CUSTODIAN PURPOSE
None
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Chase Manhattan Bank, N.A., Buenos Aires Caja de Valores, S.A.

Australia The Chase Manhattan Bank Australia Ltd., Austraclear Limited
Sydney RITS
Austria Creditanstalt-Bankverein, Osterreichsche Kontrollbank
Vienna Aktiengesellschaft (OEKB)
Bangladesh Standard Chartered Bank, Dhaka None

Belgium Generale Bank, Caisse Interprofessionnelle
Brussels de Depot et de Virement de Titres (CIK)
Bostawana Barclays Bank of Bostawana Ltd., None
Gaborone
Brazil Banco Chase Manhattan, S.A. Sao Paolo Stock Exchange
Sao Paolo (BOVESPA); Sistema Especial de Liquidacao e
Custodia (SELIC)
Canada Canada Trust Company, Toronto Canadian Depository for
Securities Ltd. (CDS)
Royal Bank of Canada
Chile Chase Manhattan Bank, N.A., Santiago None

China-Shanghai Hongkong & Shanghai Banking Shanghai Securities Central
Corp., Ltd. Clearing & Registration Corp. (SSCCRC)
China-Shenzhen Hongkong & Shanghai Banking Shenzhen Securities
Corp., Ltd. Registrations Corp., Ltd. (SSRC)
Colombia Cititrust Colombia S.A., Sociedad Fiduciaria, None
Bogota
Czeck Republic Ceskoslovenska Obchodni Banka, A.S., Prague Securities
Center (SCP)

Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen-VP Center
Egypt National Bank of Egypt, Cairo None

Finland Kansallis - Osake-Pankki, Pankkitarkastus Virasto
Helsinki ("Securities Association")

France Banque Paribas, Paris SICOVAM

Germany Chase Bank A.G., Frankfurt Deutscher Kassenverein AG (DKV)
Ghana Barclays Bank of Ghana Ltd., Accra None

Greece Barclays Bank Plc, Athens Apothetirio Titlon, A.E.

Hong Kong Chase Manhattan Bank, N.A., Hong Kong Securities
Hong Kong Clearing Co., (HKSCC)

Hungary Citibank Budapest Rt. Central Depository & Clearing House
(Budapest) Ltd. (KELLER Ltd.)
India Hongkong & Shanghai Banking Corp. Ltd., None
Bombay
Indonesia Hongkong & Shanghai Banking Corp. Ltd., None
Jakarta
Ireland Bank of Ireland, Dublin None
Israel Bank Leumi Le-Israel, B. M., Tel Aviv Tel Aviv Stock Exchange
(TASE) Clearinghouse Ltd.

Italy Chase Manhattan Bank, N.A., Milan Monte Titoli S.p.A.

Japan Chase Manhattan Bank, N.A., Tokyo None

Jordan Arab Bank, PLC, Amman None
Malaysia The Chase Manhattan Bank Malaysian Central Depository
(M) Berhad Sdn. Bhd. (MCD)
Mauritius Hongkong & Shanghai Banking Corp. Ltd., None
Port Louis
Mexico Chase Manhattan Bank, Mexico, S.A. Institucion para el Deposito
de
Institucion de Banca Multiple Valores-S.D. INDEVAL, S.A.
de C.V.
Morocco Banque Commerciale du Maroc, None
Casablanca
Netherlands ABN-AMRO, Bank N.V., Nedelands Centraal Instituut
Amsterdam voor Giraal Effectenverkeer BV (NECIGEF)/KAS
Associatie, N.V.
New Zealand National Nominees Ltd., Auckland None

Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)

Pakistan Citibank, N. A., Karachi None

Deutsche Bank AG, Karachi

Peru Citibank, N.A., Lima None

Philippines Hongkong & Shanghai Banking None
Corp., Ltd., Manila
Poland Bank Handlowy W. Warszawie, S.A., Warsaw National Depository of
Securities
Portugal Banco Espirito Santo E Commercial Central de Valores
Mobiliaros
de Lisboa, S.A., Lisbon (Interbolsa)
Singapore Chase Manhattan Bank, N.A., Singapore Central Depository Pte
Ltd. (CDP)
Slovak Republic Ceskoslovenska Obchodni, Banka, A.S. Stredisko Cennyah
Papierov (SCP)
South Africa Standard Bank of South Africa, Ltd., None
Johannesburg
South Korea Hongkong & Shanghai Banking Corp., Ltd., Korean Securities
Depository
Seoul (KSD)
Spain Banque Bruxelles Lambert, Servicio de Compensacion y
Madrid Liquidacion de Valores (SCLV)
Chase Manhattan Bank, N.A., Madrid

Sri Lanka Hongkong & Shanghai Banking Corp., Ltd., Central Depository
System
Colombo (Pvt) Limited (CDS)
Sweden Skandinaviska Enskilda Banken, Stokholm Vardepappercentralen VPC
AB

Switzerland Union Bank of Switzerland, Schweizerische Effekten-
Zurich Giro A.G. (SEGA)
Taiwan Chase Manhattan Bank, N.A., Taiwan Securities Central
Taipei Depository Co., Ltd. (TSCD)
Thailand Chase Manhattan Bank, N.A., Bangkok Share Depository Center
(SDC)
Transnational CEDEL, S.A. Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Chase Manhattan Bank, N.A., Istanbul Takas ve Saklama A.S. (TvS)

United Kingdom Chase Manhattan Bank, N.A., London None

First National Bank of Chicago, London

Uruguay The First National Bank of Boston, Montevideo None

Venezuela Citibank, N.A., Caracas None

Zimbabwe Barclays Bank of Zimbabwe Ltd., Harare None

Each of the Investment Companies Listed on Appendix "A" to the
Custodian Agreement,
on Behalf of Each of Their Respective Portfolios
By:/s/ Kenneth A. Rathgeber
Name: Kenneth A. Rathgeber
Title: Treasurer

Exhibit 8(d)
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
The Bank of New York and each of the following Investment Companies
Dated as of September 14, 1995
The following is a list of the Funds and their respective Portfolios for
which the Custodian shall serve under a Custodian Agreement dated as of
December 1, 1994:
FUND Portfolio Effective as of:
Fidelity Advisor Annuity Fund Fidelity Advisor Annuity Government
Investment Fund December 1, 1994
Fidelity Advisor Annuity High Yield Fund December 1, 1994
Fidelity Advisor Annuity Money Market Fund September 14, 1995
Fidelity Advisor Series II Fidelity Advisor Government Investment Fund
December 1, 1994
Fidelity Advisor High Yield Fund December 1, 1994
Fidelity Advisor Short Fixed-Income Fund December 1, 1994
Fidelity Advisor IV Fidelity Advisor Limited Term Bond Fund December 1,
1994
Fidelity Institutional Short-Intermediate Government Portfolio December 1,
1994
Fidelity Real Estate High Income Fund December 1, 1994
Fidelity Advisor Series VIII Fidelity Advisor Strategic Income Fund
December 1, 1994
Fidelity Charles Street Trust Fidelity Short-Intermediate Government Fund
December 1, 1994
Spartan Short-Term Income Fund December 1, 1994
Spartan Investment-Grade Bond Fund December 1, 1994
Fidelity Commonwealth Trust Fidelity Intermediate Bond Fund December 1,
1994
Daily Money Fund Capital Reserves: Money Market Portfolio September 14,
1995
Capital Reserves: U.S. Government Portfolio September 14, 1995
Treasury only (f/k/a Fidelity U.S.
Treasury Income Portfolio) September 14, 1995
Money Market Portfolio September 14, 1995
U. S. Treasury Portfolio September 14, 1995
Fidelity Devonshire Trust Spartan Long-Term Government Bond Fund December
1, 1994
Spartan Adjustable Rate Government Fund December 1, 1994
Fidelity Fixed-Income Trust Fidelity Short-Term Bond Portfolio December 1,
1994
Fidelity Investment Grade Bond Fund December 1, 1994
Spartan Government Income Fund December 1, 1994
Spartan High Income Fund December 1, 1994
Spartan Short-Intermediate Government Fund December 1, 1994
Fidelity Government Securities Fund Fidelity Government Securities Fund
December 1, 1994
Fidelity Hereford Street Trust Spartan Money Market Fund December 1, 1994
Spartan U.S. Government Money Market Fund September 14, 1995
Spartan U.S. Treasury Money Market Fund September 14, 1995
Fidelity Income Fund Fidelity Ginnie Mae Portfolio December 1, 1994
Fidelity Mortgage Securities Portfolio December 1, 1994
Spartan Limited Maturity Government Fund December 1, 1994
Fidelity Institutional Cash Portfolios Domestic (f/k/a Domestic Money
Market Portfolio) September 14, 1995
Money Market (f/k/a Money Market Portfolio) September 14, 1995
Government (f/k/a U.S. Government Portfolio) September 14, 1995
Treasury II (f/k/a U.S. Treasury Portfolio II) September 14, 1995
Fidelity Institutional Investors Trust SLAM: Government Money Market
Portfolio September 14, 1995
Fidelity Institutional Trust Fidelity U.S. Bond Index Portfolio December 1,
1994
Fidelity Money Market Trust Domestic Money Market Portfolio September 14,
1995
Retirement Government Money Market Portfolio September 14, 1995
Retirement Money Market Portfolio September 14, 1995
Fidelity Phillips Street Trust Fidelity Cash Reserves December 1, 1994
Fidelity U.S. Government Reserves September 14, 1995
Fidelity School Street Trust Spartan Bond Strategist December 1, 1994
Fidelity Select Portfolios Money Market Portfolio December 1, 1994
Fidelity Summer Street Trust Fidelity Capital & Income Fund December 1,
1994
Fidelity Union Street Trust Spartan Ginnie Mae Fund December 1, 1994
Fidelity Union Street Trust II Fidelity Daily Income Trust December 1,
1994
Spartan World Money Market Fund December 1, 1994
Variable Insurance Products Fund High Income Portfolio December 1, 1994
Variable Insurance Products Fund II Investment Grade Bond Portfolio
December 1, 1994
Variable Insurance Products Fund Money Market Portfolio September 14,
1995
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies The Bank of New York
listed on this Appendix "A", on behalf
of each of their respective Portfolios
By: /s/Kenneth A. Rathgeber By: /s/Stephen F. Grunston
Name: Kenneth A. Rathgeber Name: Stephen F. Grunston
Title: Treasurer Title: Vice President

Exhibit 8(e)
Appendix "B"
To
Custodian Agreement
Between
The Bank of new York and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of September 14, 1995
The following is a list of Additional Custodians, Special Subcustodians
and Foreign Subcustodians under the Custodian Agreement dated as of
December 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
None
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
Chemical Bank, N.A. Third Party Repurchase Agreements*
* Chemical Bank, N.A. will act as Special Subcustodian with respect to
third party repurchase agreements for the
following Portfolios only;
FUND PORTFOLIO
Fidelity Institutional Cash Portfolios U.S. Treasury Portfolio II
Fidelity Hereford Street Trust Spartan Money Market Fund
Fidelity Select Portfolios Money Market Portfolio
Fidelity Union Street Trust II Fidelity Daily Income Trust
Spartan World Money Market Fund
Fidelity Phillips Street Trust Fidelity Cash Reserves
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina First National Bank of Boston, Buenos Aires Caja de Valores,
S.A.

Australia Australia and New Zealand Banking Austraclear Limited
Group Ltd. (ANZ), Melbourne
The Reserve Bank Information and
Transfer System (RITS)
Austria GiroCredit Bank AG der Osterreichische Kontrollbank
Osterreichischen Sparkassen (GiroCredit) Aktiengesellschaft (OEKB)
Belgium Banque Bruxelles Lambert Caisse Interprofessionnelle de Depot
et de Virement de Titres (CIK)
Brazil First National Bank of Boston, Sao Paulo Stock Exchange
Sao Paulo (BOVESPA), Sistema Especial de
Liquidacao e Custodia (SELIC)
Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A (CLC)
Canada Royal Bank of Canada Canadian Depository for Securities,
Ltd. (CDS)
Chile Banco de Chile None
First National Bank of Boston, Santiago
China- Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing
& Registration Corp. (SSCCRC)
China- Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration
Corp. Ltd. (SSRC)
Colombia Cititrust Colombia S.A., Sociedad Fiduciaria, None
Bogota
Czech Republic Ceskoslovenska Obchodnibanka, Securities Center (SCP)
A.S., Prague Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen-VP Center
Finland Union Bank of Finland Ltd., Helsinki None

France Banque Paribas, Paris SICOVAM
Germany Dresdner Bank AG Deutscher Kassenverein AG (DKV)
Greece Alpha Credit Bank, A.E. None
Hong Kong The Hongkong & Shanghai Banking Hong Kong Securities Clearing
Co.,
Corp. Ltd., Hong Kong Ltd. (HKSCC); Central Clearing &
Settlement System (CCASS)

Hungary Citibank Budapest Rt. Central Depository & Clearing House
(Budapest) Ltd. (KELLER Ltd.)
India Hongkong & Shanghai Banking Corp. Ltd., None
Bombay
Indonesia Hongkong & Shanghai Banking Corp. Ltd., None
Jakarta
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)

Israel Israel Discount Bank Tel-Aviv Stock Exchange
(TASE) Clearinghouse Ltd.
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.

Citibank, N.A., Milan
Japan Yasuda Trust & Banking Co. Ltd. Japan Securities Depository
Center
(JASDEC)
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository Sdn.
Bhd. (MCD)
Mexico Banco Nacional de Mexico S.A., Mexico, D.F. Institucion para el
Deposito de Valores- S.D. INDEVAL, S.A. de C.V.
Netherlands MeesPierson N.V. Nederlands Centraal Instituut voor
Giraal Effectenverkeer BV (NECIGEF)/KAS Associatie, N.V.
(KAS)
New Zealand Australia and New Zealand Banking Austraclear Limited (RBNA)
through
Group Ltd. (ANZ) the Reserve Bank of New Zealand
Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)

Pakistan Standard Chartered Bank, Karachi None

Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Hongkong & Shanghai Banking Corp. Ltd., None
Manila

Poland Bank Handlowy W. Warszawie, S.A. National Depository of
Securities
Warsaw

Portugal Banco Comercial Portugues, S.A. Central de Valores Mobiliaros
(Interbolsa)
Singapore United Overseas Bank Central Depository Pte Ltd. (CDP)

South Africa Standard Bank of South Africa Ltd., None
Johannesburg
South Korea Bank of Seoul Korean Securities Depository (KSD)
Spain Banco Bilbao Vizcaya Servicio de Compensacio'n y
Liquidacio'n de Valores (SCLV)
Sri Lanka Standard Chartered Bank, Colombo Central Depository System,
(Pvt) Limited (CDS)
Sweden Skandinaviska Enskilda Banken, Stokholm Vardepappercentralen VPC
AB
Switzerland Union Bank of Switzerland, Zurich Schweizerische Effecten-
Giro A. G. (SEGA)
Taiwan Hongkong and Shanghai Banking Corp., Ltd., Taiwan Securities
Central Depository
Taipei Co., Ltd., (TSCD)
Thailand The Siam Commercial Bank Public Company Ltd. Share Depository
Center (SDC)
Transnational CEDEL S.A., Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium.
Turkey Citibank, N.A., Istanbul Takas ve Saklama A.S., (TvS)
United Kingdom The Bank of New York, London None

Uruguay The First National Bank of Boston, Montevideo None

Venezuela Citibank, N.A., Caracas None
Each of the Investment Companies Listed
on Appendix "A" to the Custodian Agreement,
on Behalf of each of Their Respective Portfolios
By: /s/ Kenneth A. Rathgeber
Name: Kenneth A.Rathgeber
Title:Treasurer

Exhibit 11(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 54 to the Registration Statement on Form N-1A of Fidelity
Charles Street Trust: Fidelity Asset Manager, Fidelity Asset Manager:
Growth, Fidelity Asset Manager: Income, Fidelity Short-Intermediate
Government Fund, Fidelity Short-Intermediate Government Fund, Spartan
Short-Term Income Fund, and Spartan Investment Grade Bond Fund, of our
reports dated November 1, 1995 for Fidelity Short-Intermediate Government
Fund, dated November 3, 1995 for Spartan Short-Term Income Fund and Spartan
Investment Grade Bond Fund, and dated November 7, 1995 for Fidelity Asset
Manager, Fidelity Asset Manager: Growth, and Fidelity Asset Manager: Income
on the financial statements and financial highlights included in the
September 30, 1995 Annual Reports to Shareholders of Fidelity Asset
Manager, Fidelity Asset Manager: Growth, Fidelity Asset Manager: Income,
Fidelity Short-Intermediate Government Fund, Fidelity Short-Intermediate
Government Fund, Spartan Short-Term Income Fund, and Spartan Investment
Grade Bond Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the Statements
of Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
November 14, 1995

Exhibit 11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 44 to the Registration Statement on Form N-1A of Fidelity
Government Securities Fund, of our report dated November 1, 1995 on the
financial statements and financial highlights included in the September 30,
1995 Annual Report to Shareholders of Fidelity Government Securities Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 14, 1995 COOPERS & LYBRAND L.L.P.

Exhibit 16(a)
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
Included in this exhibit is a chart showing the data used to calculate the
30-Day Yield as of the fund's fiscal year end.
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2(--------------------------------------------------) + 1)6
- - 1
(30-Day Average Shares Outstanding)(Prior Day Price)
The TAX EQUIVALENT YIELD is calculated by the formula as follows:
Tax Equivalent Yield = (yield) / (1-[tax rate])
[where the tax rate is expressed in decimal notation (i.e. 28% = 0.28)]
For any municipal portfolio that invests a portion of its assets in
obligations subject to state taxes, the tax equivalent yield is adjusted to
reflect these investments.
[Insert the name of the fund for which the required data schedules have
been provided.]
[Schedule of YIELD data provided by Fund Accounting. Schedule of TOTAL
RETURN data is supplied by Fund Performance. Both need to be filed with
this exhibit. Make sure each schedule of data is properly identified as
yield or total return.]

<TABLE>
<CAPTION>
<S> <C>
1 FIDELITY FUNDS 1 328-1 ASSET MANAGER:INCOME SC26041 Page 1

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 12:20

From 19950902 To 19951002

INCOME W/

SHARES GROSS WRITE BREAKAGE &

DATE OUTSTANDING INCOME EXPENSES NET INCOME ADJUSTMENTS OFF BREAKAGE WRITE OFF

________________________________________________________________________________________________________________________

2 48,840,248.045 74,556.98 18,964.22 55,592.76 0.00 0.00 23.64- 55,605.40

3 48,840,248.045 74,556.98 18,964.22 55,592.76 0.00 0.00 11.08- 55,569.12

4 48,840,248.045 74,556.98 18,964.22 55,592.76 0.00 0.00 1.48 55,581.68

5 48,939,339.560 71,408.90 37,933.71- 109,342.61 0.00 0.00 13.61 109,344.09

6 49,098,814.597 78,951.44 19,059.56 59,891.88 0.00 0.00 4.94 59,905.49

7 49,159,790.022 74,425.17 19,070.29 55,354.88 0.00 0.00 5.90 55,359.82

8 49,121,999.972 73,599.01 19,084.85 54,514.16 0.00 0.00 5.36- 54,520.06

9 49,121,999.972 73,599.01 0.00 73,599.01 0.00 0.00 8.89 73,593.65

10 49,121,999.972 73,599.01 0.00 73,599.01 0.00 0.00 23.14 73,607.90

11 49,099,453.662 75,981.37 240.62- 76,221.99 19,328.74- 0.00 10.12 56,916.39

12 49,011,726.977 75,037.34 19,099.72 55,937.62 19,328.74- 0.00 23.65- 55,947.74

13 49,069,925.356 75,005.19 27,779.68 47,225.51 19,328.74- 0.00 3.41- 47,201.86

14 49,076,163.625 75,106.56 19,108.83 55,997.73 19,328.74- 0.00 1.58- 55,994.32

15 49,043,811.835 75,144.19 19,144.30 55,999.89 19,328.74- 0.00 9.72- 55,998.31

16 49,043,811.835 75,144.19 0.00 75,144.19 19,328.74- 0.00 0.65- 75,134.47

17 49,043,811.835 75,144.19 0.00 75,144.19 19,328.74- 0.00 8.42 75,143.54

18 49,078,973.960 74,948.39 19,148.72 55,799.67 19,328.74- 0.00 5.30 55,808.09

19 48,955,227.610 71,692.48 19,142.78 52,549.70 19,328.74- 0.00 22.91- 52,555.00

20 48,978,350.373 75,040.87 19,120.87 55,920.00 19,328.74- 0.00 12.79 55,897.09

21 48,988,357.906 75,187.78 19,159.95 56,027.83 19,328.74- 0.00 2.06- 56,040.62

22 48,985,079.267 75,175.47 19,142.12 56,033.35 19,328.74- 0.00 7.64- 56,031.29

23 48,985,079.267 75,175.47 0.00 75,175.47 19,328.74- 0.00 24.27- 75,167.83

24 48,985,079.267 75,175.47 0.00 75,175.47 19,328.74- 0.00 8.09 75,151.20

25 49,008,598.438 74,805.34 19,103.84 55,701.50 19,328.74- 0.00 13.19- 55,709.59

26 49,046,008.343 76,264.02 19,098.92 57,165.10 19,328.74- 0.00 13.31 57,151.91

27 49,412,443.040 74,468.40 19,105.03 55,363.37 19,328.74- 0.00 14.67- 55,376.68

28 49,260,221.274 75,998.63 19,179.60 56,819.03 19,328.74- 0.00 7.32 56,804.36

29 49,270,505.410 140,000.59 19,179.39 120,821.20 19,328.74- 0.00 17.24 120,828.52

30 49,270,505.410 140,000.59 0.00 140,000.59 19,328.74- 0.00 8.95- 140,017.83

1 49,270,505.410 140,000.59 0.00 140,000.59 19,328.74- 0.00 14.13 139,991.64

2 49,397,717.057 113,189.67- 18,123.37 131,313.04 19,328.74- 0.00 0.22 131,298.91-

_________

0.00

1 FIDELITY FUNDS 1 328-1 ASSET MANAGER:INCOME SC26041 Page 2

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 12:20

From 19950902 To 19951002

MTD DAILY DIST DIVIDEND -------- SHARES OUTSTANDING -------- DAILY

DATE MIL RATE MIL RATE YIELD PAID | 30-DAY TOTAL 30-DAY AVERAGE | YTM INCOME

_______________________________________________________________________________________________________________________

2 0.001139000 0.002277000 3.65 55,629.04 1,464,353,746.120 48,811,791.537 83,242.88

3 0.001138000 0.003415000 3.65 55,580.20 1,464,297,913.888 48,809,930.463 83,242.88

4 0.001138000 0.004553000 3.65 55,580.20 1,464,242,081.656 48,808,069.389 83,242.88

5 0.002234000 0.006787000 7.17 109,330.48 1,464,285,340.939 48,809,511.365 83,242.88

6 0.001220000 0.008007000 3.90 59,900.55 1,464,385,421.276 48,812,847.376 83,771.76

7 0.001126000 0.009133000 3.61 55,353.92 1,464,554,433.280 48,818,481.109 83,908.32

8 0.001110000 0.010243000 3.56 54,525.42 1,464,742,159.092 48,824,738.636 84,145.27

9 0.001498000 0.011741000 4.80 73,584.76 1,464,961,696.642 48,832,056.555 84,027.45

10 0.001498000 0.013239000 4.80 73,584.76 1,465,197,022.897 48,839,900.763 84,027.45

11 0.001159000 0.014398000 3.71 56,906.27 1,465,409,802.842 48,846,993.428 84,027.45

12 0.001142000 0.015540000 3.65 55,971.39 1,465,534,856.102 48,851,161.870 83,867.27

13 0.000962000 0.016502000 3.07 47,205.27 1,465,728,038.631 48,857,601.288 83,515.94

14 0.001141000 0.017643000 3.64 55,995.90 1,466,007,719.292 48,866,923.976 83,767.00

15 0.001142000 0.018785000 3.64 56,008.03 1,466,274,942.627 48,875,831.421 83,313.87

16 0.001532000 0.020317000 4.88 75,135.12 1,466,584,068.950 48,886,135.632 83,473.90

17 0.001532000 0.021849000 4.88 75,135.12 1,466,864,436.105 48,895,481.204 83,473.90

18 0.001137000 0.022986000 3.62 55,802.79 1,467,179,965.385 48,905,998.846 83,473.90

19 0.001074000 0.024060000 3.43 52,577.91 1,467,371,748.315 48,912,391.611 83,691.98

20 0.001141000 0.025201000 3.64 55,884.30 1,467,592,708.118 48,919,756.937 83,080.17

21 0.001144000 0.026345000 3.64 56,042.68 1,467,848,944.753 48,928,298.158 83,163.49

22 0.001144000 0.027489000 3.64 56,038.93 1,468,123,111.113 48,937,437.037 83,725.37

23 0.001535000 0.029024000 4.91 75,192.10 1,468,401,210.970 48,946,707.032 83,705.29

24 0.001534000 0.030558000 4.90 75,143.11 1,468,699,544.330 48,956,651.478 83,705.29

25 0.001137000 0.031695000 3.63 55,722.78 1,469,021,396.861 48,967,379.895 83,705.29

26 0.001165000 0.032860000 3.73 57,138.60 1,469,380,659.297 48,979,355.310 83,915.62

27 0.001121000 0.033981000 3.59 55,391.35 1,470,085,408.787 49,002,846.960 83,872.38

28 0.001153000 0.035134000 3.69 56,797.04 1,470,575,391.300 49,019,179.710 85,501.73

29 0.002452000 0.037586000 7.83 120,811.28 1,471,091,799.874 49,036,393.329 85,429.89

30 0.002842000 0.040428000 9.05 140,026.78 1,471,538,070.965 49,051,269.032 85,846.70

1 0.002841000 0.002841000 9.05 139,977.51 1,471,968,328.330 49,065,610.944 85,846.70

2 -0.002658000 0.000183000 8.47- 131,299.13- 1,472,525,797.342 49,084,193.245 85,846.70

_______________

1,936,674.46

1 FIDELITY FUNDS 1 328-1 ASSET MANAGER:INCOME SC26041 Page 3

REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 12:20

From 19950902 To 19951002

DAILY

YTM NET DAILY YTM PAYDOWN ADJ TO 30-DAY YTM 30-DAY 30-DAY 30-DAY DAILY SEC PRIOR

DATE INCOME ADJ NET INCOME GAIN/LOSS INCOME NET INCOME MIL RATE YIELD YIELD DAY NAV

________________________________________________________________________________________________________________________

2 0.00 64,278.66 77.66- 0.00 2,129,533.04 0.043625000 4.64 4.22 11.38

3 0.00 64,278.66 77.66- 0.00 2,123,046.21 0.043495000 4.63 4.22 11.38

4 0.00 64,278.66 77.66- 0.00 2,103,861.93 0.043103000 4.59 4.22 11.38

5 0.00 121,176.59 77.66- 0.00 2,141,575.59 0.043877000 4.67 7.95 11.38

6 0.00 64,712.20 77.66- 0.00 2,135,655.38 0.043755000 4.65 4.22 11.41

7 0.00 64,838.03 55.98- 0.00 2,130,695.14 0.043650000 4.64 4.23 11.39

8 0.00 65,060.42 58.07- 0.00 2,125,435.03 0.043538000 4.63 4.24 11.39

9 0.00 84,027.45 58.14- 0.00 2,139,206.83 0.043814000 4.66 5.47 11.40

10 0.00 84,027.45 58.14- 0.00 2,157,767.93 0.044188000 4.70 5.47 11.40

11 0.00 64,939.33 58.14- 0.00 2,139,841.15 0.043813000 4.66 4.23 11.40

12 0.00 64,767.55 58.14- 0.00 2,121,742.58 0.043437000 4.61 4.21 11.42

13 0.00 55,736.26 58.14- 0.00 2,111,980.71 0.043233000 4.58 3.62 11.44

14 0.00 64,658.17 58.13- 0.00 2,111,095.63 0.043209000 4.58 4.20 11.43

15 0.00 64,169.57 58.13- 0.00 2,109,486.88 0.043168000 4.56 4.16 11.46

16 0.00 83,473.90 51.30 0.00 2,126,992.60 0.043518000 4.60 5.43 11.45

17 0.00 83,473.90 51.30 0.00 2,145,919.48 0.043896000 4.64 5.43 11.45

18 0.00 64,325.18 51.30 0.00 2,126,791.06 0.043497000 4.60 4.18 11.45

19 0.00 64,549.20 51.30 0.00 2,107,886.65 0.043101000 4.56 4.20 11.44

20 0.00 63,959.30 55.26 0.00 2,105,779.29 0.043052000 4.55 4.17 11.45

21 0.00 64,003.54 55.26 0.00 2,112,167.56 0.043176000 4.56 4.16 11.48

22 0.00 64,583.25 55.28 0.00 2,110,581.25 0.043136000 4.56 4.20 11.46

23 0.00 83,705.29 55.01 0.00 2,127,977.34 0.043484000 4.61 5.47 11.42

24 0.00 83,705.29 55.01 0.00 2,145,410.86 0.043832000 4.65 5.47 11.42

25 0.00 64,601.45 55.01 0.00 2,126,556.03 0.043438000 4.61 4.22 11.42

26 0.00 64,816.70 55.01 0.00 2,107,916.45 0.043047000 4.57 4.23 11.41

27 0.00 64,767.35 56.10 0.00 2,106,632.77 0.043011000 4.57 4.23 11.41

28 0.00 66,322.13 60.44 0.00 2,106,093.71 0.042979000 4.57 4.30 11.40

29 0.00 66,250.50 61.93 0.00 2,105,520.31 0.042953000 4.55 4.30 11.43

30 0.00 85,846.70 61.93 0.00 2,124,646.14 0.043328000 4.58 5.55 11.46

1 0.00 85,846.70 61.93 0.00 2,145,163.48 0.043733000 4.62 5.55 11.46

2 0.00 67,723.33 61.93 0.00 2,148,747.73 0.043793000 4.63 4.38 11.46

avg: 11.42

Asset Manager Growth

Cum

MonthEnd Shares

30-Dec-91 10000.00

31-Dec-91 10080.00

31-Jan-92 10450.00

29-Feb-92 10670.00

31-Mar-92 10520.00

30-Apr-92 10550.00

31-May-92 10770.00

30-Jun-92 10650.00

31-Jul-92 11090.00

31-Aug-92 10910.00

30-Sep-92 11160.00

31-Oct-92 11370.00

30-Nov-92 11780.00

31-Dec-92 12003.17

31-Jan-93 12176.54

28-Feb-93 12329.51

31-Mar-93 12808.82

30-Apr-93 12849.61

31-May-93 13114.76

30-Jun-93 13308.53

31-Jul-93 13553.28

31-Aug-93 14103.98

30-Sep-93 14042.79

31-Oct-93 14481.31

30-Nov-93 14358.93

31-Dec-93 15161.86

31-Jan-94 15747.05

28-Feb-94 15278.90

31-Mar-94 14502.18

30-Apr-94 14480.90

31-May-94 14597.94

30-Jun-94 14161.71

31-Jul-94 14512.82

31-Aug-94 15023.54

30-Sep-94 14800.10

31-Oct-94 14842.66

30-Nov-94 14417.06

31-Dec-94 14041.71

31-Jan-95 13691.76

28-Feb-95 13921.41

31-Mar-95 14205.75

30-Apr-95 14599.44

31-May-95 14960.32

30-Jun-95 15277.47

31-Jul-95 15911.75

31-Aug-95 15999.24

30-Sep-95 16272.63

Name: Fidelity Asset Manager (3A. Pay Date E. Original SharesI. CG Short M. Cap Gain Shares Q. Cap Gains
rec'd in Cash

Notes: B. X-Date F. Total Value J. NAV N. Cap Gain Value R. Cost of
reinvest'd
Distributions

Load: C. Reinvest NAV G. Dividends K. Div Shares O. Total Value

Redempt D. Monthend H. CG Long L. Dividend VaP. Divs rec'd in Cash

FiscYea30-Sep

A B C D E F G H I J K L M N O P Q R

1.00 28-Dec-88 1000.000 10000.00 10.00 10000

1.00 Dec-88 1000.000 10030.00 10.03 0 0 0 0 10030 0 0 0

1.00 Jan-89 1000.000 10410.00 10.41 0 0 0 0 10410 0 0 0

1.00 Feb-89 1000.000 10250.00 10.25 0 0 0 0 10250 0 0 0

1.00 Mar-89 1000.000 10340.00 10.34 0 0 0 0 10340 0 0 0

1.00 Apr-89 1000.000 10610.00 10.61 0 0 0 0 10610 0 0 0

1.00 May-89 1000.000 10920.00 10.92 0 0 0 0 10920 0 0 0

1.00 Jun-89 1000.000 11040.00 11.04 0 0 0 0 11040 0 0 0

1.00 Jul-89 1000.000 11360.00 11.36 0 0 0 0 11360 0 0 0

1.00 Aug-89 1000.000 11390.00 11.39 0 0 0 0 11390 0 0 0

1.00 Sep-89 1000.000 11390.00 11.39 0 0 0 0 11390 0 0 0

1.00 Oct-89 1000.000 11440.00 11.44 0 0 0 0 11440 0 0 0

1.00 Nov-89 1000.000 11520.00 11.52 0 0 0 0 11520 0 0 0

27-Dec 13-Dec 10.90 Dec-89 1000.000 10940.00 0.38 0.05 0.19 10.94 35 381 22 241 11562 380 240 620

1.00 Jan-90 1000.000 10590.00 10.59 35 369 22 233 11192 380 240 620

1.00 Feb-90 1000.000 10670.00 10.67 35 372 22 235 11277 380 240 620

1.00 Mar-90 1000.000 10780.00 10.78 35 376 22 237 11393 380 240 620

1.00 Apr-90 1000.000 10600.00 10.60 35 370 22 233 11203 380 240 620

1.00 May-90 1000.000 11160.00 11.16 35 389 22 246 11795 380 240 620

1.00 Jun-90 1000.000 11250.00 11.25 35 392 22 248 11890 380 240 620

1.00 Jul-90 1000.000 11240.00 11.24 35 392 22 247 11879 380 240 620

1.00 Aug-90 1000.000 10860.00 10.86 35 379 22 239 11478 380 240 620

1.00 Sep-90 1000.000 10640.00 10.64 35 371 22 234 11245 380 240 620

1.00 Oct-90 1000.000 10670.00 10.67 35 372 22 235 11277 380 240 620

1.00 Nov-90 1000.000 11180.00 11.18 35 390 22 246 11816 380 240 620

14-Dec 14-Dec 10.73 Dec-90 1000.000 10870.00 0.65 10.87 99 1075 22 239 12184 1030 240 1307

1.00 Jan-91 1000.000 11450.00 11.45 99 1132 22 252 12834 1030 240 1307

1.00 Feb-91 1000.000 11950.00 11.95 99 1182 22 263 13395 1030 240 1307

1.00 Mar-91 1000.000 12150.00 12.15 99 1201 22 268 13619 1030 240 1307

1.00 Apr-91 1000.000 12340.00 12.34 99 1220 22 272 13832 1030 240 1307

1.00 May-91 1000.000 12650.00 12.65 99 1251 22 279 14179 1030 240 1307

1.00 Jun-91 1000.000 12380.00 12.38 99 1224 22 273 13877 1030 240 1307

1.00 Jul-91 1000.000 12710.00 12.71 99 1257 22 280 14247 1030 240 1307

1.00 Aug-91 1000.000 13000.00 13.00 99 1286 22 286 14572 1030 240 1307

1.00 Sep-91 1000.000 13020.00 13.02 99 1287 22 287 14594 1030 240 1307

1.00 Oct-91 1000.000 13120.00 13.12 99 1297 22 289 14706 1030 240 1307

1.00 Nov-91 1000.000 12890.00 12.89 99 1275 22 284 14448 1030 240 1307

23-Dec 20-Dec 12.08 Dec-91 1000.000 12460.00 0.45 0.12 0.38 12.46 141 1752 68 852 15065 1480 740 2372

1.00 Jan-92 1000.000 12640.00 12.64 141 1778 68 865 15282 1480 740 2372

1.00 Feb-92 1000.000 12880.00 12.88 141 1811 68 881 15573 1480 740 2372

1.00 Mar-92 1000.000 12880.00 12.88 141 1811 68 881 15573 1480 740 2372

1.00 Apr-92 1000.000 13060.00 13.06 141 1837 68 893 15790 1480 740 2372

1.00 May-92 1000.000 13190.00 13.19 141 1855 68 902 15947 1480 740 2372

1.00 Jun-92 1000.000 13190.00 13.19 141 1855 68 902 15947 1480 740 2372

1.00 Jul-92 1000.000 13460.00 13.46 141 1893 68 921 16274 1480 740 2372

1.00 Aug-92 1000.000 13400.00 13.40 141 1885 68 917 16201 1480 740 2372

1.00 Sep-92 1000.000 13500.00 13.50 141 1899 68 924 16322 1480 740 2372

1.00 Oct-92 1000.000 13480.00 13.48 141 1896 68 922 16298 1480 740 2372

1.00 Nov-92 1000.000 13780.00 13.78 141 1938 68 943 16661 1480 740 2372

14-Dec 11-Dec 13.21 Dec-92 1000.000 13370.00 0.48 0.06 0.13 13.37 185 2468 86 1147 16985 1960 930 3182

1.00 Jan-93 1000.000 13600.00 13.60 185 2510 86 1167 17277 1960 930 3182

1.00 Feb-93 1000.000 13740.00 13.74 185 2536 86 1179 17455 1960 930 3182

15-Mar 12-Mar 13.81 Mar-93 1000.000 14060.00 0.13 14.06 197 2763 86 1206 18030 2090 930 3347

1.00 Apr-93 1000.000 14120.00 14.12 197 2775 86 1212 18107 2090 930 3347

1.00 May-93 1000.000 14420.00 14.42 197 2834 86 1237 18491 2090 930 3347

07-Jun 04-Jun 14.30 Jun-93 1000.000 14470.00 0.13 14.47 208 3013 86 1242 18724 2220 930 3514

1.00 Jul-93 1000.000 14690.00 14.69 208 3058 86 1260 19009 2220 930 3514

1.00 Aug-93 1000.000 15110.00 15.11 208 3146 86 1296 19552 2220 930 3514

13-Sep 10-Sep 14.91 Sep-93 1000.000 14970.00 0.13 14.97 219 3286 86 1284 19540 2350 930 3682

1.00 Oct-93 1000.000 15410.00 15.41 219 3382 86 1322 20114 2350 930 3682

1.00 Nov-93 1000.000 15380.00 15.38 219 3375 86 1320 20075 2350 930 3682

13-Dec 10-Dec 15.09 Dec-93 1000.000 15400.00 0.20 0.10 0.33 15.40 237 3646 123 1894 20940 2550 1360 4504

1.00 Jan-94 1000.000 15900.00 15.90 237 3765 123 1956 21620 2550 1360 4504

1.00 Feb-94 1000.000 15400.00 15.40 237 3646 123 1894 20940 2550 1360 4504

14-Mar 11-Mar 15.11 Mar-94 1000.000 14530.00 0.13 14.53 248 3610 123 1787 19927 2680 1360 4681

1.00 Apr-94 1000.000 14520.00 14.52 248 3608 123 1786 19914 2680 1360 4681

1.00 May-94 1000.000 14640.00 14.64 248 3638 123 1801 20078 2680 1360 4681

13-Jun 10-Jun 14.58 Jun-94 1000.000 14230.00 0.09 14.23 257 3656 123 1750 19636 2770 1360 4804

1.00 Jul-94 1000.000 14510.00 14.51 257 3728 123 1785 20023 2770 1360 4804

1.00 Aug-94 1000.000 14850.00 14.85 257 3816 123 1827 20492 2770 1360 4804

12-Sep 09-Sep 14.65 Sep-94 1000.000 14580.00 0.09 14.58 265 3870 123 1793 20243 2860 1360 4929

1.00 Oct-94 1000.000 14650.00 14.65 265 3888 123 1802 20340 2860 1360 4929

1.00 Nov-94 1000.000 14430.00 14.43 265 3830 123 1775 20035 2860 1360 4929

12-Dec 09-Dec 14.01 Dec-94 1000.000 13830.00 0.09 0.17 13.83 274 3794 140 1934 19558 2950 1530 5290

1.00 Jan-95 1000.000 13720.00 13.72 274 3764 140 1919 19403 2950 1530 5290

1.00 Feb-95 1000.000 13930.00 13.93 274 3821 140 1948 19700 2950 1530 5290

13-Mar 10-Mar 13.79 Mar-95 1000.000 14060.00 0.09 14.06 284 3987 140 1966 20013 3040 1530 5417

1.00 Apr-95 1000.000 14350.00 14.35 284 4069 140 2007 20426 3040 1530 5417

1.00 May-95 1000.000 14690.00 14.69 284 4166 140 2054 20910 3040 1530 5417

12-Jun 09-Jun 14.55 Jun-95 1000.000 14800.00 0.09 14.80 292 4327 140 2070 21197 3130 1530 5545

1.00 Jul-95 1000.000 15210.00 15.21 292 4447 140 2127 21784 3130 1530 5545

1.00 Aug-95 1000.000 15310.00 15.31 292 4476 140 2141 21927 3130 1530 5545

11-Sep 08-Sep 15.40 Sep-95 1000.000 15470.00 0.09 15.47 301 4652 140 2163 22286 3220 1530 5674

</TABLE>

<ARTICLE> 6
<CIK> 0000354046
<NAME> Fidelity Charles Street Trust
<SERIES>
<NUMBER> 21
<NAME> Fidelity Asset Manager
<MULTIPLIER> 1,000

<S>
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<PERIOD-TYPE> year

<FISCAL-YEAR-END> sep-30-1995

<PERIOD-END> sep-30-1995

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<INVESTMENTS-AT-VALUE> 11,077,455

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<ASSETS-OTHER> 105,048

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<TOTAL-ASSETS> 11,313,925

<PAYABLE-FOR-SECURITIES> 85,596

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 144,668

<TOTAL-LIABILITIES> 230,264

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 10,189,455

<SHARES-COMMON-STOCK> 716,385

<SHARES-COMMON-PRIOR> 808,964

<ACCUMULATED-NII-CURRENT> 15,484

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (141,021)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 1,019,743

<NET-ASSETS> 11,083,661

<DIVIDEND-INCOME> 102,362

<INTEREST-INCOME> 482,455

<OTHER-INCOME> 0

<EXPENSES-NET> 107,881

<NET-INVESTMENT-INCOME> 476,936

<REALIZED-GAINS-CURRENT> (232,873)

<APPREC-INCREASE-CURRENT> 806,047

<NET-CHANGE-FROM-OPS> 1,050,110

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 333,377

<DISTRIBUTIONS-OF-GAINS> 72,865

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 212,281

<NUMBER-OF-SHARES-REDEEMED> 332,700

<SHARES-REINVESTED> 27,840

<NET-CHANGE-IN-ASSETS> (708,731)

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> 93,664

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<INTEREST-EXPENSE> 1

<GROSS-EXPENSE> 108,355

<AVERAGE-NET-ASSETS> 11,167,721

<PER-SHARE-NAV-BEGIN> 14.580

<PER-SHARE-NII> .490

<PER-SHARE-GAIN-APPREC> .930

<PER-SHARE-DIVIDEND> .440

<PER-SHARE-DISTRIBUTIONS> .090

<RETURNS-OF-CAPITAL> 0

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<EXPENSE-RATIO> 97

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

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<CIK> 0000354046
<NAME> Fidelity Charles Street Trust
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<NAME> Fidelity Asset Manager: Growth
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<PERIOD-TYPE> year

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<PERIOD-END> sep-30-1995

<INVESTMENTS-AT-COST> 2,603,472

<INVESTMENTS-AT-VALUE> 2,858,407

<RECEIVABLES> 41,715

<ASSETS-OTHER> 1,324

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 2,901,446

<PAYABLE-FOR-SECURITIES> 41,721

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 9,425

<TOTAL-LIABILITIES> 51,146

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 2,604,888

<SHARES-COMMON-STOCK> 191,507

<SHARES-COMMON-PRIOR> 220,753

<ACCUMULATED-NII-CURRENT> 22,089

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (31,861)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 255,184

<NET-ASSETS> 2,850,300

<DIVIDEND-INCOME> 31,146

<INTEREST-INCOME> 88,106

<OTHER-INCOME> 0

<EXPENSES-NET> 29,074

<NET-INVESTMENT-INCOME> 90,178

<REALIZED-GAINS-CURRENT> (57,574)

<APPREC-INCREASE-CURRENT> 223,067

<NET-CHANGE-FROM-OPS> 255,671

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 59,879

<DISTRIBUTIONS-OF-GAINS> 18,902

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 62,951

<NUMBER-OF-SHARES-REDEEMED> 98,213

<SHARES-REINVESTED> 6,016

<NET-CHANGE-IN-ASSETS> (220,287)

<ACCUMULATED-NII-PRIOR> 27,680

<ACCUMULATED-GAINS-PRIOR> 23,771

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 20,425

<INTEREST-EXPENSE> 3

<GROSS-EXPENSE> 29,248

<AVERAGE-NET-ASSETS> 2,851,492

<PER-SHARE-NAV-BEGIN> 13.910

<PER-SHARE-NII> .260

<PER-SHARE-GAIN-APPREC> 1.070

<PER-SHARE-DIVIDEND> .270

<PER-SHARE-DISTRIBUTIONS> .090

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 14.880

<EXPENSE-RATIO> 102

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000354046
<NAME> Fidelity Charles Street Trust
<SERIES>
<NUMBER> 41
<NAME> Fidelity Short-Intermediate Government Fund
<MULTIPLIER> 1,000

<S>
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<PERIOD-TYPE> year

<FISCAL-YEAR-END> sep-30-1995

<PERIOD-END> sep-30-1995

<INVESTMENTS-AT-COST> 137,824

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<PAYABLE-FOR-SECURITIES> 2,509

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<OTHER-ITEMS-LIABILITIES> 315

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<PAID-IN-CAPITAL-COMMON> 149,141

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<SHARES-COMMON-PRIOR> 14,252

<ACCUMULATED-NII-CURRENT> 0

<OVERDISTRIBUTION-NII> 282

<ACCUMULATED-NET-GAINS> (9,886)

<OVERDISTRIBUTION-GAINS> 0

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<DIVIDEND-INCOME> 0

<INTEREST-INCOME> 11,640

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<EXPENSES-NET> 1,276

<NET-INVESTMENT-INCOME> 10,364

<REALIZED-GAINS-CURRENT> (2,280)

<APPREC-INCREASE-CURRENT> 6,155

<NET-CHANGE-FROM-OPS> 14,239

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 10,292

<DISTRIBUTIONS-OF-GAINS> 0

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 14,890

<NUMBER-OF-SHARES-REDEEMED> 15,166

<SHARES-REINVESTED> 834

<NET-CHANGE-IN-ASSETS> 8,005

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> (7,309)

<OVERDISTRIB-NII-PRIOR> 649

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 705

<INTEREST-EXPENSE> 3

<GROSS-EXPENSE> 1,276

<AVERAGE-NET-ASSETS> 155,494

<PER-SHARE-NAV-BEGIN> 9.290

<PER-SHARE-NII> .648

<PER-SHARE-GAIN-APPREC> .173

<PER-SHARE-DIVIDEND> .622

<PER-SHARE-DISTRIBUTIONS> 0

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 9.490

<EXPENSE-RATIO> 82

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000354046
<NAME> Fidelity Charles Street Trust
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<MULTIPLIER> 1,000

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<PERIOD-TYPE> year

<FISCAL-YEAR-END> sep-30-1995

<PERIOD-END> sep-30-1995

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<ASSETS-OTHER> 289

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<OTHER-ITEMS-LIABILITIES> 1,943

<TOTAL-LIABILITIES> 5,677

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 537,189

<SHARES-COMMON-STOCK> 49,398

<SHARES-COMMON-PRIOR> 46,912

<ACCUMULATED-NII-CURRENT> 5,464

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (1,703)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 25,129

<NET-ASSETS> 566,079

<DIVIDEND-INCOME> 2,591

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