SUPPLEMENT TO THE SPARTAN(registered trademark) SHORT-TERM BOND FUND
AND
SPARTAN(registered trademark) INVESTMENT GRADE BOND FUND
NOVEMBER 28, 1997
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 2.
(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 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 3.
(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 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 22.
MANAGEMENT FEES. For the services of FMR under each management
contract, Spartan Short-Term Bond and Spartan Investment Grade Bond
each pays FMR a monthly management fee at the annual rate of 0.65% and
0.60%, respectively, of its average net assets throughout the month.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DISTRIBUTION AND SERVICE PLANS" SECTION ON PAGE 23.
Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, the Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has authorized such
payments for each fund shares.
SUPPLEMENT TO THE SPARTAN(registered trademark) SHORT-TERM BOND FUND
AND
SPARTAN(registered trademark) INVESTMENT GRADE BOND FUND NOVEMBER 28,
1997 PROSPECTUS
FMR anticipates presenting a proposal to the Board of Trustees of
Spartan Short-Term Bond Fund requesting their approval to present
shareholders of the fund a proposal to merge the fund into Fidelity
Short-Term Bond Fund.
As a result, effective the close of business on June 26, 1998, the
fund's shares will no longer be available to new accounts.
Shareholders of the fund on that date may continue to purchase shares
in accounts existing on that date. Investors who did not own shares of
the fund on June 26, 1998, generally will not be allowed to purchase
shares of the fund except that new accounts may be established: 1) by
participants in most group employer retirement plans (and their
successor plans) in which the fund had been established as an
investment option by June 26, 1998, and 2) for accounts managed on a
discretionary basis by certain registered investment advisors that
have discretionary assets of at least $1 billion invested in mutual
funds and have included the fund in their discretionary account
program since June 26, 1998. These restrictions generally will apply
to investments made directly with Fidelity and investments made
through intermediaries. Investors may be required to demonstrate
eligibility to purchase shares of the fund before an investment is
accepted.
WITH RESPECT TO SPARTAN INVESTMENT GRADE BOND, the minimum investments
have been changed to the following:
MINIMUM INVESTMENTS
SPARTAN SHORT-TERM BOND
TO OPEN AN ACCOUNT $25,000
For certain Fidelity retirement accountsA $25,000
TO ADD TO AN ACCOUNT $1,000
For certain Fidelity retirement accountsA $25,000
Through regular investment plansB $500
MINIMUM BALANCE $10,000
For certain Fidelity retirement accountsA $10,000
A FIDELITY TRADITIONAL IRA, ROTH IRA, ROTH CONVERSION IRA, ROLLOVER
IRA, SEP-IRA, AND KEOGH ACCOUNTS.
B FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE 26.
References to the minimums throughout the prospectus are changed to
the above minimums with respect to Spartan Investment Grade Bond.
WITH RESPECT TO SPARTAN SHORT-TERM BOND AND SPARTAN INVESTMENT GRADE
BOND, the following fees for individual transactions have been
eliminated: the $5.00 exchange fee, the $5.00 wire fee, the $2.00
checkwriting fee, and the $5.00 account closeout fee. References to
these fees throughout the prospectus are no longer in effect.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN
"EXPENSES" BEGINNING ON PAGE 5.
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of a fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500.
See "Transaction Details," page 29, for an explanation of how and when
these charges apply.
SALES CHARGE ON PURCHASES NONE
AND REINVESTED DISTRIBUTIONS
DEFERRED SALES CHARGE ON REDEMPTIONS NONE
ANNUAL ACCOUNT MAINTENANCE FEE $12.00
(FOR ACCOUNTS UNDER $2,500)
EXAMPLES: Let's say, hypothetically, that each fund's annual return is
5% and that your shareholder transaction expenses and each fund's
annual 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:
SPARTAN SHORT-TERM BOND
SPARTAN SHORT-TERM BOND
1 YEAR $ 4
3 YEARS $ 12
5 YEARS $ 21
10 YEARS $ 48
SPARTAN INVESTMENT GRADE BOND
SPARTAN SHORT-TERM BOND
1 YEAR $ 4
3 YEARS $ 12
5 YEARS $ 21
10 YEARS $ 48
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN
"EXPENSES" ON PAGE 6.
Effective March 1, 1997, FMR has voluntarily agreed to reimburse each
fund to the extent that total operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) exceed 0.38%
of its average net assets through December 31, 1998. If these
agreements were not in effect, the management fee, other expenses and
total operating expenses, as a percentage of average net assets, of
each fund would have been 0.65%, 0.00% and 0.65%, respectively.
Effective January 1, 1999, FMR has voluntarily agreed to reimburse
Spartan Investment Grade Bond to the extent that total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceed 0.50% of its average net assets. If
this agreement were not in effect, the management fee, other expenses
and total operating expenses, as a percentage of average net assets,
of the fund are expected to be 0.60%, 0.00% and 0.60%, respectively.
THE FOLLOWING INFORMATION SUPPLEMENTS THAT FOUND UNDER THE "INVESTMENT
PRINCIPLES AND RISKS" SECTION BEGINNING ON PAGE 13 .
In managing bond funds, FMR selects a benchmark index which is
representative of the portion of the bond market in which a fund
invests. FMR uses this benchmark index as a guide in structuring the
fund and selecting its investments. The benchmark index for Spartan
Short-Term Bond is the Lehman Brothers 1-3 Year Government/Corporate
Bond Index, a market value weighted benchmark of investment-grade
fixed-rate debt issues with maturities between one and three years.
The benchmark index for Spartan Investment Grade is the Lehman
Brothers Aggregate Bond Index, a market value weighted benchmark of
investment-grade fixed-rate debt issues with maturities of at least
one year. FMR manages each fund to have similar overall interest rate
risk to its respective Index.
THE FOLLOWING INFORMATION REPLACES THE FIRST TWO PARAGRAPHS FOUND
UNDER "MANAGEMENT FEE" IN "BREAKDOWN OF EXPENSES" ON PAGE 19.
Each fund's management fee is calculated and paid to FMR every month.
FMR pays all of the other expenses of each fund with limited
exceptions. Spartan Short-Term Bond's annual management fee rate is
0.65% of its average net assets. Spartan Investment Grade Bond's
annual management fee rate is 0.60% of its average net assets.
On June 27, 1998, FMR reduced the management fee rate for Spartan
Investment Grade Bond from 0.65% to 0.60%.
Effective March 1, 1997, FMR has voluntarily agreed to limit each
fund's total operating expenses to an annual rate of 0.38% of average
net assets. This agreement will continue until December 31, 1998.
Effective January 1, 1999, FMR has voluntarily agreed to limit Spartan
Investment Grade Bond's total operating expenses to an annual rate of
0.50% of average net assets.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"BREAKDOWN OF EXPENSES" SECTION ON PAGE 19.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees has authorized such payments.
