RATED MONEY MARKET PORTFOLIO
A FUND OF
FIDELITY COLCHESTER STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Rated Money Market Portfolio:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Rated Money Market Portfolio (Rated Portfolio) will be
held at the principal executive office of Fidelity Colchester Street
Trust (the trust), 82 Devonshire Street, Boston, Massachusetts 02109
on December 16, 1998 at 11:00 a.m. Eastern time. The purpose of the
Meeting is to consider and act upon the following proposal, and to
transact such other business as may properly come before the Meeting
or any adjournments thereof.
(1) To approve an Agreement and Plan of Reorganization between Rated
Portfolio and Domestic Portfolio, another fund of the trust, providing
for the transfer of all of the assets of Rated Portfolio to Domestic
Portfolio in exchange solely for shares of beneficial interest in
Class I, Class II, and Class III of Domestic Portfolio and the
assumption by Domestic Portfolio of Rated Portfolio's liabilities,
followed by the distribution of Domestic Portfolio's shares to
shareholders of the corresponding class of Rated Portfolio in
liquidation of Rated Portfolio.
The Board of Trustees has fixed the close of business on October 19,
1998 as the record date for the determination of the shareholders of
Rated Portfolio entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
October 19, 1998
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC CORP. JOHN SMITH, TREASURER
2) ABC CORP. JOHN SMITH, TREASURER
C/O JOHN SMITH, TREASURER
B. 1) ABC CORP. PROFIT SHARING PLAN ANN B. COLLINS, TRUSTEE
2) ABC TRUST ANN B. COLLINS, TRUSTEE
U/T/D 12/28/78
C. 1) ANTHONY B. CRAFT, CUST. ANTHONY B. CRAFT
F/B/O ANTHONY B. CRAFT, JR.
UGMA
RATED MONEY MARKET PORTFOLIO
A FUND OF
FIDELITY COLCHESTER STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
PROXY STATEMENT AND PROSPECTUS
OCTOBER 19, 1998
This Proxy Statement and Prospectus (Proxy Statement) is being
furnished to shareholders of Rated Money Market Portfolio (Rated
Portfolio), a fund of Fidelity Colchester Street Trust (the trust), in
connection with the solicitation of proxies by the trust's Board of
Trustees for use at the Special Meeting of Shareholders of Rated
Portfolio and at any adjournments thereof (the Meeting). The Meeting
will be held on Wednesday, December 16, 1998 at 11:00 a.m. Eastern
time at 82 Devonshire Street, Boston, Massachusetts 02109, the
principal executive office of the trust.
As more fully described in the Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (the Reorganization).
Pursuant to an Agreement and Plan of Reorganization (the Agreement),
Rated Portfolio would transfer all of its assets to Domestic
Portfoli o , another fund of the trust, in exchange solely for
shares of beneficial interest in Class I, Class II, and Class III of
Domestic Portfolio and the assumption by Domestic Portfolio of Rated
Portfolio's liabilities. Domestic Portfolio shares would then be
distributed to Rated Portfolio shareholders, so that each such
shareholder would receive a number of full and fractional shares of
the corresponding class of Domestic Portfolio equal to the number of
full and fractional shares of the same class of Rated Portfolio held
by such shareholder. As provided in the Agreement, Rated Portfolio
will distribute Class I, Class II, and Class III shares of Domestic
Portfolio to its shareholders of the corresponding class in
liquidation of Rated Portfolio on January 21, 1999, or such other date
as the parties may agree (the Closing Date).
Domestic Portfolio is a money market fund, a fund of Fidelity
Colchester Street Trust, an open-end management investment company
organized as a Massachusetts business trust on November 10, 1991
and converted to a Delaware business trust on May 30, 1993.
Domestic Portfolio's investment objective is to seek a high level of
current income while maintaining a stable $1.00 share price. Domestic
Portfolio seeks to achieve its investment objective by investing only
in the highest quality U.S. dollar-denominated money market securities
of domestic issuers, rated in the highest rating category by at least
two nationally recognized rating services, U.S. Government securities
and repurchase agreements.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROXY
STATEMENT AND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Proxy Statement, which should be retained for future reference,
sets forth concisely the information about the Reorganization and
Domestic Portfolio that a shareholder should know before voting on the
proposed Reorganization. The Statement of Additional Information dated
October 19, 1998 relating to this Proxy Statement has been filed with
the Securities and Exchange Commission (SEC) and is incorporated
herein by reference. This Proxy Statement is accompanied by a combined
Prospectus (dated May 29, 1998 and supplemented on August 1, 1998),
which offers shares of Class I, Class II, or Class III of Domestic
Portfolio and Rated Portfolio. The combined Statement of Additional
Information for Class I, Class II, and Class III of Domestic Portfolio
and Rated Portfolio (dated May 29,1998 and supplemented on August 5,
1998) is available upon request. Each of the combined Class I, Class
II, and Class III Prospectuses and the combined Statement of
Additional Information for Domestic Portfolio and Rated Portfolio,
dated May 29, 1998, and supplemented as previously noted, have been
filed with the SEC and are incorporated herein by reference. Copies of
the Statement of Additional Information may be obtained without charge
by contacting the trust, Domestic Portfolio or Rated Portfolio at
Fidelity Distributors Corporation, 82 Devonshire Street, Boston,
Massachusetts 02109 or by calling 1-800-843-3001.
TABLE OF CONTENTS
Voting Information 1
Synopsis 4
Comparison of Other Policies of The Funds 12
Comparison of Principal Risk Factors 14
The Proposed Transaction 15
Additional Information About Domestic Portfolio 20
Miscellaneous 22
Exhibit 1. Form of Agreement and Plan of Reorganization
of Rated Money Market Portfolio 23
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
RATED MONEY MARKET PORTFOLIO
A FUND OF
FIDELITY COLCHESTER STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
TO BE HELD ON DECEMBER 16, 1998
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of,
the Board of Trustees of Fidelity Colchester Street Trust (the trust)
to be used at the Special Meeting of Shareholders of Rated Money
Market Portfolio (Rated Portfolio or the fund) and at any adjournments
thereof (the Meeting), to be held on Wednesday, December 16, 1998 at
11:00 a.m. at 82 Devonshire Street, Boston, Massachusetts 02109, the
principal executive office of the trust and Fidelity Management &
Research Company (FMR), the fund's investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about October 19,
1998. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. In addition, D.F. King & Co., Inc.
and/or Management Information Services Corp. may be paid on a per-call
basis to solicit shareholders on behalf of the fund at an anticipated
cost of approximately $500. The expenses in connection with preparing
this Proxy Statement and its enclosures and of all solicitations will
be paid by the fund, provided total operating expenses for each class
of Rated Portfolio do not exceed a class's expense cap of 0.20%
(excluding interest, taxes, brokerage commissions, extraordinary
expenses and 12b-1 fees). Expenses exceeding each class's expense cap
will be paid by FMR. The fund will reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which
are not revoked, will be voted at the Meeting. Shares represented by
such proxies will be voted in accordance with the instructions
thereon. If no specification is made on a proxy card, it will be voted
FOR the matter specified on the proxy card. Only proxies that are
voted will be counted toward establishing a quorum. Broker non-votes
are not considered voted for this purpose. Shareholders should note
that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the Meeting will occur
only if a sufficient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the same
effect in determining whether the proposal is approved. Approval of
the Reorganization will be determined by the aggregate vote of all
classes of the fund's shares rather than by each class separately.
Rated Portfolio may also arrange to have votes recorded by telephone.
D.F. King & Co., Inc. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated
cost of approximately $250. The expenses in connection with telephone
voting will be paid by the fund, provided the total operating expenses
do not exceed each class's expense cap of 0.20% ( excluding
interest, taxes, brokerage commissions, extraordinary expenses, and
12b-1 fees ). Expenses exceeding each class's expense cap will be
paid by FMR. If the fund records votes by telephone, it will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies given by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve the proposed item are
not received, or if other matters arise requiring shareholder
attention, the persons named as proxy agents may propose one or more
adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority
of those shares present at the Meeting or represented by proxy. When
voting on a proposed adjournment, the persons named as proxy agents
will vote FOR the proposed adjournment all shares that they are
entitled to vote with respect to each item, unless directed to vote
AGAINST the item, in which case such shares will be voted against the
proposed adjournment with respect to that item. A shareholder vote may
be taken on the item in this Proxy Statement or on any other business
properly presented at the Meeting prior to such adjournment if
sufficient votes have been received and it is otherwise appropriate.
Shares of each class of Rated Portfolio and Domestic Portfolio issued
and outstanding on July 31, 1998 are listed below:
RATED PORTFOLIO:
CLASS I 386,725,803
CLASS II 77,168,044
CLASS III 112,443,540
DOMESTIC PORTFOLIO:
CLASS I 968,616,438
CLASS II 37,270,363
CLASS III 83,433,647
Shareholders of record at the close of business on October 19, 1998,
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
As of July 31, 1998, the Tru stees, Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than 1%
of each fund's total outstanding shares.
As of July 31, 1998, the Trustees, Members of the Advisory Board, and
officers of each fund owned, in the aggregate, less than 1% of each
class's total outstanding shares.
As of July 31, 1998, the following shareholders owned of
record or beneficially 5% or more of the outstanding shares of the
f ollowing classes :
Rated Portfolio - Class I: U.S. Trust Company of NY, New York, NY
(18.57%); Metric Management, Inc., San Francisco, CA (14.17%) ;
Perini Corporation, Framingham, MA (12.03%); Southern Farm Bureau
Life, Jackson, MS (5.43%).
Rated Portfolio - Class II: BankBoston, Boston, MA (100%).
Rated Portfolio - Class III: Chase Bank of Texas, Houston, TX
(43.87%); Fleet National Bank, Providence, RI (24.50%); Michigan
Public Funds Inv. Trust, Farmington Hills, MI (16.74%); The Bank of
New York, New York, NY (6.67%).
Domestic Portfolio - Class I: Chase Bank of Texas, Houston, TX
(8.93%); Intel Corporation, Santa Clara, CA (8.42%); Bank One
Oklahoma, Tulsa, OK (5.41%); Simmons First National Bank, Pine Bluff,
AR (5.31%).
Domestic Portfolio - Class II: Fleet National Bank, Providence, RI
(68.17%); BankBoston, Boston, MA (31.83%).
Domestic Portfolio - Class III: Frost National Bank, San Antonio, TX
(59.00%); Chase Bank of Texas, Houston, TX (14.47%); First Union
National Bank, Charlotte, NC (13.40%); Northwestern Trust Company,
Seattle, WA (10.58%); Reliance Trust Company, Atlanta, GA (8.57%);
Fleet National Bank, Providence, RI (5.44%).
To the knowledge of the trust and each fund, no other shareholder
owned of record or beneficially 5% or more of the outstanding shares
of any class or of either fund on that date. It is not anticipated
that any of the above shareholders will own of record or beneficially
5% or more of the outstanding shares of the combined fund as a result
of the Reorganization. It is anticipated that the following
shareholders will own of record or beneficially 5% or more of the
outstanding classes of the combined fund as a result of the
Reorganization:
Class I: Chase Bank of Texas, Houston, TX (6.38%); U.S. Trust Company
of NY, New York, NY (5.30%).
Class II: BankBoston, Boston, MA (77.79%); Fleet National Bank,
Providence, RI (22.21%).
Class III: Chase Bank of Texas, Houston, TX (31.35%); Frost National
Bank, San Antonio, TX (25.13%); Fleet National Bank, Providence, RI
(14.06%); Michigan Public Funds Inv. Trust, Farmington Hills, MI
(9.61%); First Union National Bank, Charlotte, NC (5.71%).
A shareholder owning of record or beneficially more than 25% of a
fund's or class's outstanding shares may be considered a controlling
person of that fund or class, as applicable. Accordingly, based on the
ownership shown above, BankBoston, N.A. may be considered a
controlling person of Rated Portfolio - Class II; Chase Bank of Texas
may be considered a controlling person of Rated Portfolio - Class III;
Fleet National Bank, N.A. and BankBoston N.A. may be considered
controlling persons of Domestic Portfolio - Class II; Frost National
Bank, N.A. may be considered a controlling person of Domestic
Portfolio - Class III. In addition, it is anticipated that if the
Reorganization of Rated Portfolio is approved by shareholders,
BankBoston, N.A. may be considered a controlling person of the
combined fund - Class II, and Chase Bank of Texas and Frost National
Bank, N.A. may be considered controlling persons of the combined fund
- - Class III. Each such shareholder's vote may have a more significant
effect on matters presented at a shareholder meeting of the applicable
class than votes of other shareholders of the class.
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES"
OF RATED PORTFOLIO. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES"
MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE
VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF
THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE
PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
SYNOPSIS
The following is a summary of certain information contained elsewhere
in this Proxy Statement, in the Agreement, and in the combined
Class I, Class II, and Class III Prospectus es of Rated
Portfolio and Domestic Portfolio, which are incorporated herein by
this reference. Shareholders should read the entire Proxy Statement
and the Prospectus of Domestic Portfolio carefully for more complete
information.
The proposed Reorganization would merge Rated Portfolio into
Domestic Portfolio, a money market fund also managed by FMR. If the
Reorganization is approved, Rated Portfolio will cease to exist and
current shareholders of the fund will become shareholders of the
corresponding class of Domestic Portfolio.
Rated Portfolio and Domestic Portfolio each offers three classes of
shares: Class I, Class II, and Class III. All classes of a fund have a
common investment objective and investment portfolio.
Both Rated Portfolio and Domestic Portfolio seek to earn a high level
of current income while maintaining a stable $1.00 share price by
investing in the high est quality short-term securities.
Both funds are rated in the highest rating category by two nationally
recognized rating services. An investment in a fund is neither insured
nor guaranteed by the U.S. Government and there is no assurance that
either fund will maintain a stable $1.00 share price.
Rated Portfolio and Domestic Portfolio offer the same investor
services, exchange privileges, and methods to purchase and redeem
shares. Regardless of whether the Reorganization is approved, you will
not have to change how you do business with Fidelity or take any other
action to maintain your investment.
The proposed Reorganization is part of an effort by Fidelity to
streamline its institutional money market fund product line so that it
may manage the funds more efficiently. If the Reorganization is
approved, Rated Portfolio shareholders will become shareholders of a
fund with the same rating that has a larger asset base and a broader
shareholder base than Rated Portfolio. A broader shareholder base may
tend to lessen the effect of cash flows in and out of a fund, making
the fund easier to manage. Thus, the larger asset base and shareholder
base of the combined fund could potentially lead to better relative
performance.
INVESTMENT OBJECTIVE AND POLICIES
Both Rated Portfolio and Domestic Portfolio seek a high level of
current income while maintaining a stable $1.00 share price. To
achieve this objective, the funds invest in the hig h est
quality U.S. dollar-denominated money market securities rated in the
highest rating category by at least two nationally recognized rating
services, U.S. Government securities, and repurchase agreements.
T he primary difference between their investment policies is
that, while both funds are limited to U.S. dollar-denominated
securities, Rated Portfolio may purchase securities of both
d o mestic and foreign issuers, while Domestic Portfolio is
limited to securities of domestic issuers. However, Rated Portfolio
currently does not purchase any sec urities of foreign issuers
that mature beyond the Closing Date, as defined below.
EXPENSE STRUCTURES
Rated Portfolio and Domestic Portfolio have substantially identical
expense structures. Each fund pays FMR a monthly management fee at the
annual rate of 0.20% of the fund's average net assets (the management
fee is the same for all cla sses of each fund).
In addition, Class I, Class II, and Class III of both funds have
adopted Distribution and Service Plans (the Plans) pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Class I, Class II,
and Class III Plans of Rated Portfolio are the same as the Plans of
the corresponding class of Domestic Portfolio.
Class I of each fund does not pay a separate distribution fee. Class
II of each fund pays Fidelity Distributors Corp. (FDC), the funds'
distributor, a monthly distribution fee at the annual rate of 0.15% of
Class II's average net assets. Class III of each fund pays FDC a
monthly distribution fee at the annual rate of 0.25% of Class III's
average net assets. In addition, the Plans for each class specifically
recognize 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 each class's shares. Pursuant
to the Plans, FMR may also pay, either directly (for Class I only) or
through FDC (for Class II and Class III), investment professionals and
other third parties that engage in the sale of each class's shares or
provide shareholder support services. If Rated Portfolio shareholders
approve the Reorganization, they will receive Domestic Portfolio
shares of the corresponding cla ss that are distributed under
the same terms as, and pay a distribution fee at the same annual rate
as, their Rated Portfolio shares.
In addition to management fees and distribution fees, both funds, or
each class the reof, as applicable, also pays other operating
expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports. For example,
audit, transfer agency, dividend disbursing, and shareholder servicing
expenses are paid by each class of each fund, while pricing and
bookkeeping expenses are paid by each fund.
In sum, if Rated Portfolio shareholders approve the Reorganization,
they will become shareholders of a larger money market fund with the
same investment objective and similar investment policies to Rated
Portfolio. To the extent that the Reo rganization allows FMR to
manage the fund more effectively and efficiently, better
relative performance may result.
The Board of Trustees believes that the Reorganization would benefit
Rated Portfolio shareholders and recommends that shareholders vote in
favor of the Reorganization.
TOTAL OPERATING EXPENSES AND REIMBURSEMENT ARRANGEMENTS
Currently, FMR voluntarily reimburses Class I, Class II, and Class
III of each fund to the extent that each class's total operating
expenses (excluding interest, taxes, brokerage commissions,
extraordinary expenses, and 12b-1 fees) exceed 0.20% of eac h
class's respective average net assets. FMR may modify or terminate
these reimbursement arrangements at any time, which would cause each
class's total operating expenses to increase.
THE PROPOSED REORGANIZATION
Shareholders of Rated Portfolio will be asked at the Meeting to vote
upon and approve the Reorganization and the Agreement, which provide
for the acquisition by Domestic Portfolio of all of the assets of
Rated Portfolio in exchange solely for Class I, Class II, and Class
III shares of Domestic Portfolio and the assumption by Domestic
Portfolio of the liabilities of Rated Portfolio. Rated Portfolio will
then distribute the Class I, Class II, and Class III shares of
Domestic Portfolio to its shareholders, so that each such
shareholder will receive the number of full and fractional shares of
the corresponding class of Domestic Portfolio equal to
the number of full and fractional shares of the same class of
Rated Portfolio held by such shareholder on the Closing Date (defined
below). The exchange of Rated Portfolio's assets for Domestic
Portfolio's shares will occur as of the close of business of the New
York Stock Exchange (NYSE) on January 21, 1999, or such other time and
date as the parties may agree (the Closing Date). Rated Portfolio will
then be liquidated as soon as practicable thereafter.
The funds have received an opinion of counsel that the Reorganization
will not result in any gain or loss for federal income tax purposes
either to Rated Portfolio or Domestic Portfolio, or to the
shareholders of either fund. The rights and privileges of the former
shareholders of Rated Portfolio will be effectively unchanged by the
Reorganization.
COMPARATIVE FEE TABLES
The following tables show for Class I, Class II, and Class III of
each fund (i) the shareholder transaction expenses that Rated
Portfolio and Domestic Portfolio shareholders currently incur, and the
shareholder transaction expenses that shareholders of the combined
fund will incur after giving effect to the Reorganization, (ii) the
current fees and expenses for each class of Rated Portfolio and
Domestic Portfolio for the 12 months ended March 31, 1998 and pro
forma fees and expenses for each class of the combined fund based on
the same time period after giving effect to the Reorganization and
including the effect of FMR's current voluntary expense limitation for
each class, and (iii) the current fees and expenses for each class of
Rated Portfolio and Domestic Portfolio for the 12 months ended March
31, 1998 and pro forma fees and expenses for each class of the
combined fund based on the same time period after giving effect to the
Reorganization and excluding the effect of FMR's current voluntary
expense limitation for each class. FMR has voluntarily agreed to
reimburse Class I, Class II, and Class III of both funds to the extent
that each class's total operating expenses exceed 0.20% (excluding
interest, taxes, brokerage commissions, extraordinary expenses, and
12b-1 fees) of its average net assets. The total operating expenses
shown for Class II and Class III of each fund exceed 0.20% because of
the effect of those class's 12b-1 fees.
SHAREHOLDER TRANSACTION AND ANNUAL FUND OPERATING EXPENSES
Shareholder Transaction Expenses are charges that shareholders may
pay when they buy or sell shares of a fund.
Annual F und O perating E xpenses are paid out of
each fund's or class's assets. Expenses are factored into each class's
share price or dividends and are not charged directly to shareholder
accounts. The following figures are based on each class's historical
expenses, adjusted to reflect current fees, and are calculated as a
percentage of the average net assets of each class. Prior to January
1, 1998, Rated Portfolio operated under an all-inclusive management
contract whereby Rated Portfolio paid FMR a monthly management fee at
an annual rate of 0.42% of its average daily net assets and FMR paid
all of the other expenses of the fund, with certain exceptions.
CLASS I
RATED DOMESTIC COMBINED
PORTFOLIO PORTFOLIO FUND
MAXIMUM NONE NONE NONE
SALES
CHARGE ON
PURCHASES
AND
REINVESTED
DISTRIBUTION
S
MAXIMUM NONE NONE NONE
DEFERRED
SALES
CHARGE
SHORT-TERM NONE NONE NONE
TRADING FEE
EXCHANGE NONE NONE NONE
FEE
RATED DOMESTIC PRO FORMA
PORTFOLIO PORTFOLIO COMBINED
FUND
MANAGEME 0.20% 0.20% 0.20%
NT FEE
12B-1 FEE NONE NONE NONE
(DISTRIBUTIO
N FEE)
OTHER 0.00%* 0.00%* 0.00%*
EXPENSES
(AFTER
REIMBURSE
MENT)
TOTAL 0.20%* 0.20%* 0.20%*
OPERATING
EXPENSES
* FMR has voluntarily agreed to reimburse Class I of each fund to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses, and 12b-1 fees), as a
percentage of its respective average net assets, exceed 0.20%. If
these agreements were not in effect, the management fee, other
expenses and total operating expenses, as a percentage of average net
assets, would have been 0.20%, 0.23%, and 0.43%, respectively, for
Rated Portfolio; 0.20%, 0.07%, and 0.27%, respectively, for Domestic
Portfolio; and 0.20%, 0.06%, and 0.26%, respectively, for the combined
(pro forma) fund. Rated Portfolio's other e xpense s ratio
of 0.23% included herein is estimated due to a change in its
management fee rate effective January 1, 1998.
CLASS II
RATED DOMESTIC COMBINED
PORTFOLIO PORTFOLIO FUND
MAXIMUM NONE NONE NONE
SALES
CHARGE ON
PURCHASES
AND
REINVESTED
DISTRIBUTION
S
MAXIMUM NONE NONE NONE
DEFERRED
SALES
CHARGE
SHORT-TERM NONE NONE NONE
TRADING FEE
EXCHANGE NONE NONE NONE
FEE
RATED DOMESTIC PRO FORMA
PORTFOLIO PORTFOLIO COMBINED
FUND
MANAGEME 0.20% 0.20% 0.20%
NT FEE
12B-1 FEE 0.15% 0.15% 0.15%
(DISTRIBUTIO
N FEE)
OTHER 0.00%* 0.00%* 0.00%*
EXPENSES
(AFTER
REIMBURSE
MENT)
TOTAL 0.35%* 0.35%* 0.35%*
OPERATING
EXPENSES
* FMR has voluntarily agreed to reimburse Class II of each fund to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses, and 12b-1 fees), as a
percentage of its respective average net assets, exceed 0.20%. If
these agreements were not in effect, the management fee, other
expenses and total operating expenses, as a percentage of average net
assets, would have been 0.20%, 0.23%, and 0.58%, respectively, for
Rated Portfolio; 0.20%, 0.08%, and 0.43%, respectively, for Domestic
Portfolio; and 0.20%, 0.06%, and 0.41%, respectively, for the combined
(pro forma) fund. Rated Portfolio's other e xpense s ratio
of 0.23% included herein is estimated due to a change in its
management fee rate effective January 1, 1998.
CLASS III
RATED DOMESTIC COMBINED
PORTFOLIO PORTFOLIO FUND
MAXIMUM NONE NONE NONE
SALES
CHARGE ON
PURCHASES
AND
REINVESTED
DISTRIBUTION
S
MAXIMUM NONE NONE NONE
DEFERRED
SALES
CHARGE
SHORT-TERM NONE NONE NONE
TRADING FEE
EXCHANGE NONE NONE NONE
FEE
RATED DOMESTIC PRO FORMA
PORTFOLIO PORTFOLIO COMBINED
FUND
MANAGEME 0.20% 0.20% 0.20%
NT FEE
12B-1 FEE 0.25% 0.25% 0.25%
(DISTRIBUTIO
N FEE)
OTHER 0.00%* 0.00%* 0.00%*
EXPENSES
(AFTER
REIMBURSE
MENT)
TOTAL 0.45%* 0.45%* 0.45%*
OPERATING
EXPENSES
* FMR has voluntarily agreed to reimburse Class III of each fund to
the extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses, and 12b-1 fees), as a
percentage of its respective average net assets, exceed 0.20%. If
these agreements were not in effect, the management fee, other
expenses and total operating expenses, as a percentage of average net
assets, would have been 0.20%, 0.23%, and 0.68%, respectively, for
Rated Portfolio; 0.20%, 0.06%, and 0.51%, respectively, for Domestic
Portfolio; and 0.20%, 0.06%, and 0.51%, respectively, for the combined
(pro forma) fund. Rated Portfolio's o ther expen ses ratio of
0.23% included herein is estimated due to a change in its management
fee rate effective January 1, 1998.
If the Reorganization is approved, the combined fund will retain the
current expense structure described above, which requires paying a
management fee, other operating expenses, and, for Class II and Class
III, 12b-1 fees.
EXAMPLES OF EFFECT OF FUND EXPENSES (AFTER REIMBURSEMENT)
The following tables illustrate the expenses on a hypothetical $1,000
investment in each class of each fund under the current and pro forma
(combined fund) expenses (after voluntary reimbursement) calculated at
the net rates stated above, assuming a 5% annual return.
CLASS I
RATED PORTFOLIO DOMESTIC PORTFOLIO PRO FORMA
COMBINED FUND
1 YEAR $ 2 $ 2 $ 2
3 YEARS $ 6 $ 6 $ 6
5 YEARS $ 11 $ 11 $ 11
10 YEARS $ 26 $ 26 $ 26
CLASS II
RATED PORTFOLIO DOMESTIC PORTFOLIO PRO FORMA
COMBINED FUND
1 YEAR $ 4 $ 4 $ 4
3 YEARS $ 11 $ 11 $ 11
5 YEARS $ 20 $ 20 $ 20
10 YEARS $ 44 $ 44 $ 44
CLASS III
RATED PORTFOLIO DOMESTIC PORTFOLIO PRO FORMA
COMBINED FUND
1 YEAR $ 5 $ 5 $ 5
3 YEARS $ 14 $ 14 $ 14
5 YEARS $ 25 $ 25 $ 25
10 YEARS $ 57 $ 57 $ 57
These examples assume that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses (after voluntary reimbursement), but
are not meant to suggest actual or expected expenses, which may vary.
The assumed return of 5% is not a prediction of, and does not
represent, actual or expected performance of any fund or class.
FORMS OF ORGANIZATION
Rated Portfolio and Domestic Portfolio are diversified funds of
Fidelity Colchester Street Trust (formerly Fidelity Institutional Cash
Portfolios), an open-end management investment company organ ized as
a Massachusetts business trust on November 10, 1991 and converted to a
Delaware business trust on May 30, 1993. The trust is authorized
to issue an unlimited number of shares of beneficial interest. Because
the funds are series of the same Delaware business trust organized
under the same Trust Instrument, the rights of the security holders of
Rated Portfolio under state law and the governing documents are
expected to remain unchanged after the Reorganization. For more
information regarding shareholder rights, refer to the section of the
funds' Statement of Additional Information called "Description of the
Trust."
INVESTMENT OBJECTIVE AND POLICIES
Both Rated Portfolio and Domestic Portfolio seek a s high
a level of current income as is consistent with the
preservation of principal and liquidity within the limitations
prescribed for each fund. Although the funds seek to maintain a stable
$1.00 share price, investments in the funds are neither insured nor
guaranteed by the U.S. Government, and there can be no assurance that
a fund will maintain a stable $1.00 share price.
As money market mutual funds, both funds must comply with federal
regulations regarding the quality and maturity of their investments.
Money market funds may purchase only high-quality securities with a
remaining maturity of 397 days or less, and must maintain a
dollar-weighted average maturity of 90 days or less. However, both
funds currently maintain a dollar-weighted average maturity of 60 days
or less. As of July 31, 1998, Rated Portfolio's and Domestic
Portfolio's dollar-weighted average maturity was 41 days and 53 days,
respectively.
To achieve their investment objective, the funds invest only in the
highest quality U.S. dollar-denominated money market eligible
securities rated in the highest rating category by at least two
nationally recognized rating services, U.S. Government securities, and
repurchase agreements. In addition, each fund currently concentrates
its investments in the securities of issuers in the financial services
industry.
T he primary difference between the funds' investment policies
is that, while both funds are limited to U.S. dollar-denominated
securities, Rated Portfolio may purchase securities of both domestic
and foreign issuers, and Domestic Portfolio is limited to
purchasing securities of domestic issuers.
In antici pation of the Reorganization, Rated Portfolio has
changed its investment policy regarding foreign securities so that it
no longer purchase s any foreign securities that mature beyond
the Closing Date. In addition, if shareholders approve the
Reorganization, Rated Portfolio intends to dispose of any foreign
securities that mature beyond the Closing Date. FMR anticipates that
on the Closing Date, all of the foreign securities previously held by
Rated Portfolio will have matured or will have been disposed of by
Rated Portfolio. Rated Portfolio's other holdings are eligible
investments for Domestic Portfolio. On October 2, 1998, Rated
Portfolio held no securities of foreign issuers.
The proposed Reorganization may result in transaction costs
associated with portfolio adjustments to Rated Portfolio's holdings,
particularly its disposition of its foreign securities. Rated
Portfolio will bear any such costs incurred prior to the Closing Date.
Any transaction costs or other merger-related expenses which occur
after the Closing Date will be borne by Domestic Portfolio.
The investment objective of each fund is fundamental and may not be
changed without the approval of a vote of at least "a majority of the
outstanding voting securities" of the fund, as that term is defined in
the 1940 Act. There can be no assurance that either fund will achieve
its objective. With the exception of fundamental policies, investment
policies of the funds can be changed without shareholder approval.
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. Rated Portfolio and Domestic Portfolio are
diversified funds. As a matter of fundamental policy, with respect to
75% of each fund's total assets, the fund may not invest more than 5%
of its total assets in the securities of a single issuer, and the fund
may not hold more than 10% of the outstanding voting securities of a
single issuer. These limitations do not apply to U.S. Government
securities.
BORROWING. Each fund may borrow money from banks or from other funds
advised by FMR or an affiliate, or through reverse repurchase
agreements. As a matter of fundamental policy, each fund may borrow
money for temporary or emergency purposes, but not in an amount
exceeding 33-1/3% of its total assets.
LENDING. Each fund does not currently intend to lend assets, other
than securities, to other parties, except by lending money (up to 10%
of the fund's net assets) to other funds or portfolios advised
by FMR or an affiliate . As a matter of fundamental policy, each
fund may not lend more than 33-1/3% of its total assets to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.
CONCENTRATION. As a matter of fundamental policy, each fund may not
invest more than 25% of its total assets in any one industry, except
that each fund will invest more than 25% of its total assets in the
financial services industry. This limitation does not apply to U.S.
Government s ecurities. Financial services companies are subject
to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans,
including loans to foreign borrowers. If a fund invests substantially
in this industry, its performance may be affected by conditions
affecting this industry.
OTHER INVESTMENT POLICIES. Each fund may purchase U.S. Government
securities and enter into repurchase agreements and reverse repurchase
agreements. As stated above, for more information about the risks and
restrictions associated with these policies, see the funds' Class
I, Class II, or Class III Prospectus, and for a more detailed
discussion of the funds' investments, see the funds' combined
Statement of Additional Information, which are incorporated herein
by reference.
OPERATIONS OF DOMESTIC PORTFOLIO FOLLOWING THE REORGANIZATION
FMR does not expect Domestic Portfolio to revise its investment
policies as a result of the Reorganization. In addition, FMR does not
anticipate significant changes to the fund's management or to entities
that provide the fund with services. Specifically, the Trustees and
officers, the investment adviser, distributor, and other service
providers will continue to serve Domestic Portfolio in their current
capacities.
As stated above, if the Reorganization is approved, prior to the
Closing Date , Rated Portfolio intends to sell any foreign
securities in its portfolio that mature beyond the Closing Date,
currently scheduled for January 21, 1999. Transaction costs
associated with portfolio adjustments that occur between shareholder
approval and the Closing Date will be borne by Rated Portfolio.
Transaction costs associated with such adjustments that occur after
the Closing Date will be borne by Domestic Portfolio.
PURCHASES AND REDEMPTIONS
Rated Portfolio and Domestic Portfolio have identical purchase and
redemption policies.
The price to buy one share of Class I, Class II, and Class III of
each fund is the class's net asset value per share (NAV). Shares of
each class are sold without a sales charge. Shares are purchased at
the next NAV calculated after an order is received in proper form. NAV
is normally calculated each business day at 5:00 p.m. Eastern time.
Each fund is managed to maintain a stable $1.00 share price.
Each fund's minimum initial investment amount is $1 million.
Investments in Rated Portfolio and Domestic Portfolio must be made
using the Federal Reserve Wire System. Checks and Automated Clearing
House payments will not be accepted as a means of investment. The
transfer agent must receive all wires in proper form before the close
of the Federal Reserve Wire System on the day of purchase. Refer to
each fund's Prospectus for more information regarding how to buy
shares.
The price to sell one share of each class of each fund is the
applicable class's NAV. Shares are sold at the next NAV calculated
after an order is received in proper form. NAV is normally calculated
each business day at 5:00 p.m. Eastern time.
On October 19, 1998, Rated Portfolio closed to new accounts pending
the shareholder vote on the Reorganization. Rated Portfolio
shareholders on or prior to that date can continue to purchase shares
of the fund and may redeem shares through the Closing Date. If the
Reorganization is approved, the purchase and redemption policies of
the combined fund will be identical to the current policies of the
funds.
EXCHANGES
The exchange privilege currently offered by each fund is the same and
is not expected to change after the Reorganization. Shareholders of
each fund currently may exchange their shares for shares of the
corresponding class of, as applicable, Treasury Only Portfolio,
Government Portfolio, Domestic Portfolio, Rated Portfolio, Money
Market Portfolio, or Tax-Exempt Portfolio. None of these funds
currently imposes an exchange fee and there is no limit on exchanges
out of any of these funds.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Each fund
declares income dividends daily and pays them monthly. On or before
the Closing Date, Rated Portfolio may declare additional dividends or
other distributions in order to distribute substantially all of its
investment company taxable income and net realized capital gain, if
any.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each fund has received an opinion of its counsel, Kirkpatrick &
Lockhart LLP, that the Reorganization will constitute a tax-free
reorganization within the meaning of section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). Accordingly, no
gain or loss will be recognized to the funds or their shareholders as
a result of the Reorganization. Please see the section entitled
"Federal Income Tax Considerations" for more information.
As of March 31, 1998, Rated Portfolio and Domestic Portfolio have
capital loss carryforwards for federal income tax purposes aggregating
approximately $29,000 and $126,000, respectively. Under current
federal income tax law, Domestic Portfolio may be limited to using
only a portion if any, of its capital loss carryforwards or of
the capital loss carryforwards transferred by Rated Portfolio at the
time of the Reorganization ("capital loss carryforwards"). There is no
assurance that Domestic Portfolio will be able to realize sufficient
capital gains to use the capital loss carryforwards before they
expire. The capital loss carryforward attributable to Rated Portfolio
will expire between March 31, 2003 and March 31, 2005. The capital
loss carryforward attributable to Domestic Portfolio will expire
between March 31, 2001 and March 31, 2006.
COMPARISON OF PRINCIPAL RISK FACTORS
Rated Portfolio and Domestic Portfolio both invest in
high - quality, short-term securities, as required by federal
regulations applicable to all money market funds. Money market
securities include high-quality, short-term instruments issued by the
U.S. G overnment, corporations, financial institutions, and
other entities. Both funds may also invest significantly in the
financial services industry, so their performance may be affected by
conditions affecting that industry. Although they are managed to
maintain a stable $1.00 share price, money market funds are
sensitive to changes in interest rat es and in the credit
quality of issuers and their yields change daily based on interest
rates and other market conditions.
An investment in Domestic Portfolio involves slightly different risks
from an investment in Rated Portfolio. In particular, Domestic
Portfolio invests in U.S. dollar-denominated securities of domestic
issuers only, while Rated Portfolio may purchase U.S.
dollar-denominated securities of domestic and foreign
issuers. However, in anticipation of the Reorganization, Rated
Portfolio no longer purchases any securities of foreign issuers that
mature beyond the Closing Date. In addition, because regulatory
requirements regarding a money market fund's quality and maturity
apply to both foreign and domestic investments, and because both funds
are managed to maintain a $1.00 share price, an investment in Domestic
Portfolio and an investment in Rated Portfolio involve substantially
similar levels of risk.
THE PROPOSED TRANSACTION
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN RATED
PORTFOLIO AND DOMESTIC PORTFOLIO.
THE REORGANIZATION
The terms and conditions under which the proposed transaction may be
consummated are set forth in the Agreement. Significant provisions of
the Agreement are summarized below; however, this summary is qualified
in its entirety by reference to the Agreement, a copy of which is
attached as Exhibit 1 to this Proxy Statement.
The Agreement contemplates (a) Domestic Portfolio acquiring as of the
Closing Date all of the assets of Rated Portfolio in exchange solely
for Class I, Class II, and Class III shares of Domestic Portfolio and
the assumption by Domestic Portfolio of Rated Portfolio's liabilities;
and (b) the distribution of Class I, Class II, and Class III shares of
Domestic Portfolio to the shareholders of the corresponding class of
Rated Portfolio as provided for in the Agreement.
The assets of Rated Portfolio to be acquired by Domestic Portfolio
include all cash, cash equivalents, securities, receivables (including
interest or dividends receivables), claims, choses in action, and
other property owned by Rated Portfolio, and any deferred or prepaid
expenses shown as an asset on the books of Rated Portfolio on the
Closing Date. Domestic Portfolio will assume from Rated Portfolio all
liabilities, debts, obligations, and duties of Rated Portfolio of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in the Agreement; provided, however, that
Rated Portfolio will use its best efforts, to the extent practicable,
to discharge all of its known liabilities prior to the Closing Date,
other than liabilities incurred in the ordinary course of business.
Domestic Portfolio also will deliver to Rated Portfolio the number of
full and fractional shares of Domestic Portfolio equal in number and
class to the shares of Rated Portfolio exchanged therefor. Rated
Portfolio shall then distribute to its shareholders Class I,
Class II, and Class III shares of Domestic Portfolio equal to the
number of full and fractional shares of the corresponding class of
Rated Portfolio held by such shareholders on the Closing Date.
The value of Rated Portfolio's assets to be acquired by Domestic
Portfolio and the amount of its liabilities to be assumed by Domestic
Portfolio will be determined as of the close of business of the NYSE
on the Closing Date, using the valuation procedures set forth in Rated
Portfolio's then-current Prospectus es and Statement of
Additional Information. The net asset value of a share of Domestic
Portfolio will be determined as of the same time using the valuation
procedures set forth in its then-current Prospectus es and
Statement of Additional Information.
As of the Closing Date, Rated Portfolio will distribute to its
shareholders of record the shares of Domestic Portfolio it received,
so that each Rated Portfolio shareholder will receive the number of
full and fractional shares of the corresponding class of Domestic
Portfolio equal to the number of full and fractional shares of the
same class of Rated Portfolio held by such shareholder on the
Closing Date; Rated Portfolio will be liquidated as soon as
practicable thereafter. Such distribution will be accomplished by
opening accounts on the books of Domestic Portfolio in the names of
the Rated Portfolio shareholders and by transferring thereto shares of
Domestic Portfolio. Each Rated Portfolio shareholder's account shall
be credited with the number of full and fractional shares (rounded to
the third decimal place) of Domestic Portfolio due that shareholder.
Domestic Portfolio shall not issue certificates representing its
shares in connection with such exchange.
Accordingly, immediately after the Reorganization, each former Rated
Portfolio shareholder will own shares of the corresponding class of
Domestic Portfolio equal to the number of that shareholder's shares of
Rated Portfolio immediately prior to the Reorganization. The share
price of Domestic Portfolio will be unchanged by the transaction.
Thus, the Reorganization will not result in a dilution of any
shareholder interest.
Any transfer taxes payable upon issuance of shares of Domestic
Portfolio in a name other than that of the registered holder of the
shares on the books of Rated Portfolio as of that time shall be paid
by the person to whom such shares are to be issued as a condition of
such transfer. Any reporting responsibility of Rated Portfolio is and
will continue to be its responsibility up to and including the Closing
Date and such later date on which Rated Portfolio is liquidated.
Rated Portfolio will bear the cost of the Reorganization (subject to
each class's 0.20% expense cap excluding interest, taxes,
brokerage commissions, extraordinary expenses, and 12b-1 fees),
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplementary solicitation. However, there may be some transaction
costs associated with portfolio adjustments to Rated Portfolio and
Domestic Portfolio due to the Reorganization prior to the Closing Date
which will be borne by Rated Portfolio and Domestic Portfolio,
respectively. Any transaction costs associated with portfolio
adjustments to Rated Portfolio and Domestic Portfolio due to the
Reorganization which occur after the Closing Date and any additional
merger-related costs attributable to Domestic Portfolio which occur
after the Closing Date will be borne by Domestic Portfolio. The funds
may recognize a taxable gain or loss on the disposition of securities
pursuant to these portfolio adjustments.
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by
a fund. In addition, the Agreement may be amended in any mutually
agreeable manner, except that no amendment that may have a materially
adverse effect on the shareholders' interests may be made subsequent
to the Meeting.
REASONS FOR THE REORGANIZATION
The Board of Trustees (the Board) of the funds has determined that
the Reorganization is in the best interests of the shareholders of
both funds and that the Reorganization will not result in a dilution
of the interests of shareholders of either fund.
In considering the Reorganization, the Board considered a number of
factors, including the following:
(1) the compatibility of the funds' investment objectives and
policies;
(2) the historical performance of the funds;
(3) the relative expense ratios of the funds;
(4) the costs to be incurred by each fund as a result of the
Reorganization;
(5) the potential tax consequences of the Reorganization;
(6) the relative size of the funds;
(7) the elimination of similar funds;
(8) the impact of changes to the institutional money market product
line on the funds and their shareholders; and
(9) the benefit to FMR and to the shareholders of the funds.
FMR recommended the Reorganization to the Board at a meeting held on
July 16, 1998. In recommending the Reorganization, FMR advised the
Board that the funds generally have compatible investment objectives
and policies and similar investment strategies, except that Rated
Portfolio purchases securities of foreign issuers. FMR also informed
the Board that if the Board approved presenting the Reorganization to
shareholders, Rated Portfolio would not purchase any foreign
securities that mature beyond the Closing Date. In addition, FMR
advised the Board that if shareholders approve the Reorganization,
Rated Portfolio will dispose of its foreign securities that mature
beyond the Closing Date.
The Board considered that shareholders of Rated Portfolio will
receive the number of Class I, Class II, or Class III shares of
Domestic Portfolio equal to the number of their shares of the
corresponding class of Rated Portfolio. In addition, the Board
considered that the funds expected to receive an opinion of counsel
that the Reorganization would not result in any gain or loss for
federal income tax purposes to Rated Portfolio, Domestic Portfolio, or
to the shareholders of either fund, and that the Reorganization would
not result in the dilution of any shareholder's interest in either
fund.
Finally, the Board considered the Reorganization in the context of a
general goal of reducing the number of similar funds managed by FMR.
While reduc ing the number of funds and funds with lower assets
potentially would benefit FMR, it also should benefit shareholders by
increasing operational efficiencies.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Fidelity Colchester Street Trust (the trust) is registered with the
Securities and Exchange Commission as an open-end management
investment company. The trust's Trustees are authorized to issue an
unlimited number of shares of beneficial interest of separate series.
Domestic Portfolio is one of seven funds of the trust. Each share of
each class of Domestic Portfolio represents an equal proportionate
interest with each other share of each class of the fund, and each
such share of each class of Domestic Portfolio is entitled to equal
voting, dividend, liquidation, and redemption rights. Each shareholder
of the fund is entitled to one vote for each dollar value of net asset
value of the class of the fund that shareholder owns. Shares of
Domestic Portfolio 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 of each class of the fund.
Shares will be fully paid and nonassessable, except as set forth in
the fund's Statement of Additional Information under the heading
"Shareholder and Trustee Liability."
The trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office
have been elected by shareholders, at which time the Trustees then in
office will call a shareholder meeting for the election of Trustees.
Under the 1940 Act, shareholders of record of at least two-thirds of
the outstanding shares of an investment company may remove a Trustee
by votes cast in person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any Trustee
when requested in writing to do so by the shareholders of record
holding at least 10% of the trust's outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Rated Portfolio's assets for Domestic Portfolio's
shares and the assumption of the liabilities of Rated Portfolio by
Domestic Portfolio is intended to qualify for federal income tax
purposes as a tax-free reorganization under the Code. With respect to
the Reorganization, the participating funds have received an opinion
from Kirkpatrick & Lockhart LLP, counsel to Rated Portfolio and
Domestic Portfolio, substantially to the effect that:
(i) The acquisition by Domestic Portfolio of all of the assets of
Rated Portfolio solely in exchange for Domestic Portfolio shares and
the assumption by Domestic Portfolio of Rated Portfolio's liabilities,
followed by the distribution by Rated Portfolio of Domestic Portfolio
shares to the shareholders of the corresponding class of Rated
Portfolio pursuant to the liquidation of Rated Portfolio and
constructively in exchange for their Rated Portfolio shares, will
constitute a reorganization within the meaning of section 368(a)(1)(C)
of the Code, and Rated Portfolio and Domestic Portfolio will each be
"a party to a reorganization" within the meaning of section 368(b) of
the Code;
(ii) No gain or loss will be recognized by Rated Portfolio upon the
transfer of all of its assets to Domestic Portfolio in exchange solely
for Domestic Portfolio shares and Domestic Portfolio's assumption of
Rated Portfolio's liabilities, followed by Rated Portfolio's
subsequent distribution of those shares to Rated Portfolio
shareholders in liquidation of Rated Portfolio;
(iii) No gain or loss will be recognized by Domestic Portfolio upon
the receipt of the assets of Rated Portfolio in exchange solely for
Domestic Portfolio shares and its assumption of Rated Portfolio's
liabilities;
(iv) The shareholders of Rated Portfolio will recognize no gain or
loss upon the exchange of their Rated Portfolio shares solely for
Domestic Portfolio shares of the corresponding class;
(v) The basis of Rated Portfolio's assets in the hands of Domestic
Portfolio will be the same as the basis of those assets in the hands
of Rated Portfolio immediately prior to the Reorganization, and the
holding period of those assets in the hands of Domestic Portfolio will
include the holding period of those assets in the hands of Rated
Portfolio;
(vi) The basis of Rated Portfolio shareholders in Domestic Portfolio
shares will be the same as their basis in Rated Portfolio shares to be
surrendered in exchange therefor; and
(vii) The holding period of the Domestic Portfolio shares to be
received by the Rated Portfolio shareholders will include the period
during which the Rated Portfolio shares to be surrendered in exchange
therefor were held, provided such Rated Portfolio shares were held as
capital assets by those shareholders on the date of the
Reorganization.
Shareholders of Rated Portfolio should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Because the foregoing discussion
only relates to the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.
CAPITALIZATION
The following table shows the capitalization of the funds as of March
31, 1998 and on a pro forma combined basis (unaudited) as of that date
giving effect to the Reorganization.
NET NAV SHARES
ASSETS PER SHARE OUTSTANDING
RATED
PORTFOLIO
CLASS I $ 303,826,094 $ 1.00 303,901,525
CLASS II $ 23,321,405 $ 1.00 23,327,195
CLASS III $ 75,380,169 $ 1.00 75,398,884
DOMESTIC
PORTFOLIO
CLASS I $ 1,170,833,137 $ 1.00 1,170,937,082
CLASS II $ 34,455,169 $ 1.00 34,458,227
CLASS III $ 73,297,651 $ 1.00 73,304,158
PRO FORMA
COMBINED
FUND
CLASS I $ 1,474,659,231 $ 1.00 1,474,838,607
CLASS II $ 57,776,574 $ 1.00 57,785,422
CLASS III $ 148,677,820 $ 1.00 148,703,042
CONCLUSION
The Agreement and Plan of Reorganization and the transactions
provided for therein were approved by the Board at a meeting held on
July 16, 1998. The Board of Trustees of Fidelity Colchester Street
Trust determined that the proposed Reorganization is in the best
interests of the shareholders of each fund and that the interests of
existing shareholders of Rated Portfolio and Domestic Portfolio would
not be diluted as a result of the Reorganization. In the event that
the Reorganization is not consummated, Rated Portfolio will continue
to engage in business as a fund of a registered investment company and
the Board of Fidelity Colchester Street Trust may consider other
proposals for the reorganization or liquidation of the fund.
ADDITIONAL INFORMATION ABOUT DOMESTIC PORTFOLIO
A Domestic Portfolio Prospectus dated May 29, 1998 and
supplemented on August 1, 1998, for Class I, Class II, or Class III
shares, as applicable, is enclosed with this Proxy Statement and is
incorporated herein by reference. The Prospectus contains additional
information about the fund including its investment objective and
policies, investment adviser, advisory fees and expenses,
organization, and procedures for purchasing and redeeming shares. The
Prospectus also contains the financial highlights for the applicable
class of Domestic Portfolio for the fiscal year ended March 31, 1998.
The financial highlights for each class of Domestic Portfolio are
shown below:
DOMESTIC PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996 1995 1994 1993 1992 1991 1990D
ENDED MARCH
31
NET ASSET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .055 .053 .057 .049 .031 .034 .054 .078 .035
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.055) (.053) (.057) (.049) (.031) (.034) (.054) (.078) (.035)
NET INTEREST
INCOME
NET ASSET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
VALUE, END OF
PERIOD
TOTAL 5.64% 5.40% 5.85% 4.97% 3.14% 3.50% 5.50% 8.11% 3.52%
RETURNB
NET $ 1,171 $ 920 $ 1,118 $ 772 $ 657 $ 804 $ 559 $ 355 $ 331
ASSETS, END
OF PERIOD
(IN MILLIONS)
RATIO OF .20%C .20%C .20%C .18%C .18%C .18%C .18%C .18%C .06%A,C
EXPENSES TO
AVERAGE
NET ASSETS
RATIO OF 5.50% 5.26% 5.66% 4.94% 3.09% 3.43% 5.24% 7.79% 8.44%A
NET INTEREST
INCOME
TO AVERAGE
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D NOVEMBER 3, 1989 (COMMENCEMENT OF SALE OF CLASS I SHARES) TO MARCH
31, 1990
DOMESTIC PORTFOLIO - CLASS II
SELECTED
PER-SHARE DATA AND
RATIOS
YEARS ENDED 1998 1997 1996A
MARCH 31
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INTEREST .054 .051 .021
INCOME
LESS DISTRIBUTIONS
FROM NET (.054) (.051) (.021)
INTEREST INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURNB 5.49% 5.24% 2.15%
NET ASSETS, END $ 34,455 $ 4,235 $ 2,105
OF PERIOD (000
OMITTED)
RATIO OF .35%C .35%C .35%C,D
EXPENSES TO AVERAGE
NET ASSETS
RATIO OF NET 5.36% 5.10% 5.20%D
INTEREST INCOME TO
AVERAGE NET ASSETS
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO MARCH
31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
DOMESTIC PORTFOLIO - CLASS III
SELECTED
PER-SHARE DATA AND
RATIOS
YEARS ENDED 1998 1997 1996 1995A
MARCH 31
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
NET INTEREST .053 .050 .054 .035
INCOME
LESS DISTRIBUTIONS
FROM NET (.053) (.050) (.054) (.035)
INTEREST INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURNB 5.38% 5.13% 5.56% 3.51%
NET ASSETS, END $ 73,298 $ 121,709 $ 47,396 $ 26,545
OF PERIOD (000
OMITTED)
RATIO OF .45%C .45%C .47%C .50%C,D
EXPENSES TO AVERAGE
NET ASSETS
RATIO OF NET 5.26% 5.02% 5.40% 5.14%D
INTEREST INCOME TO
AVERAGE NET ASSETS
A JULY 19, 1994 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO MARCH
31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance
of Domestic Portfolio shares have been passed upon by Kirkpatrick &
Lockhart LLP, counsel to the trust.
EXPERTS. The audited financial statements for Class I, Class II, and
Class III of Rated Portfolio and Domestic Portfolio, incorporated by
reference into the Statement of Additional Information, have been
examined by PricewaterhouseCoopers LLP, independent accountants, whose
reports thereon are included in the Annual Reports to Shareholders for
the fiscal year ended March 31, 1998. The financial statements audited
by PricewaterhouseCoopers LLP have been incorporated by reference in
reliance on their reports given on their authority as experts in
auditing and accounting.
AVAILABLE INFORMATION. Fidelity Colchester Street Trust is subject to
the informational requirements of the Securities Exchange Act of 1934
and the 1940 Act, and in accordance therewith, file s reports,
proxy material, and other information with the Securities and Exchange
Commission. Such reports, proxy material, and other information can be
inspected and copied at the Public Reference Room maintained by the
Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington D.C. 20549 and 7 World Trade Center, New York, NY 10048.
Copies of such material can also be obtained from the Public Reference
Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington
D.C. 20549, at prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise Fidelity Colchester Street Trust in care of
Fidelity Investments Institutional Operations Company, 82 Devonshire
St., Boston, MA 02109, whether other persons are beneficial owners of
shares for which proxies are being solicited and, if so, the number of
copies of the Proxy Statement you wish to receive in order to supply
copies to the beneficial owners of the respective shares.
1EXHIBIT 1
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of October 19, 1998, by and between Rated Money Market
Portfolio (Rated Portfolio) and Domestic Portfolio, funds of
Fidelity Colchester Street Trust (the trust). The trust is a
duly organized business trust under the laws of the State of Delaware
with its principal place of business at 82 Devonshire Street, Boston,
Massachusetts 02109. Domestic Portfolio and Rated Portfolio may be
referred to herein collectively as the "Funds" or each individually as
the "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
Rated Portfolio to Domestic Portfolio solely in exchange for shares of
beneficial interest of Class I, Class II, and Class III in Domestic
Portfolio (the Domestic Portfolio Shares) and the assumption by
Domestic Portfolio of Rated Portfolio's liabilities; and (b) the
constructive distribution of such shares by Rated Portfolio to its
shareholders of the corresponding class in complete liquidation and
termination of Rated Portfolio in exchange for all of Rated
Portfolio's outstanding shares. Rated Portfolio shall receive shares
of Class I, Class II, and Class III of Domestic
Portfolio on the Closing Date (as defined in Section 6), which shares
Rated Portfolio shall then distribute to its shareholders of the
corresponding class. Shareholders of Class I, Class II, and
Class III of Rated Portfolio will receive shares of the
corresponding class of Domestic Portfolio equal in number to the
shares of Rated Portfolio they are surrendering. The foregoing
transactions are referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF RATED PORTFOLIO.
Rated Portfolio represents and warrants to and agrees with Domestic
Portfolio that:
(a) Rated Portfolio is a series of Colchester Street Trust, a
business trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and has the power to own all
of its properties and assets and to carry out its obligations under
this Agreement. It has all necessary federal, state, and local
authorizations to carry on its business as now being conducted and to
carry out this Agreement;
(b) Colchester Street Trust is an open-end, management investment
company duly registered under the Investment Company Act of 1940, as
amended (the 1940 Act), and such registration is in full force and
effect;
(c) The Prospectuses and Statement of Additional Information of Rated
Portfolio dated May 29, 1998 and as supplemented , previously
furnished to Domestic Portfolio, did not and do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Rated Portfolio, threatened against
Rated Portfolio which assert liability on the part of Rated Portfolio.
Rated Portfolio knows of no facts which might form the basis for the
institution of such proceedings;
(e) Rated Portfolio is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Trust Instrument or By-laws, or, to the knowledge of
Rated Portfolio, of any agreement, indenture, instrument, contract,
lease, or other undertaking to which Rated Portfolio is a party or by
which Rated Portfolio is bound or result in the acceleration of any
obligation or the imposition of any penalty under any agreement,
judgment or decree to which Rated Portfolio is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Rated Portfolio at March 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Domestic Portfolio. Said Statement of Assets and
Liabilities and Schedule of Investments fairly present the Fund's
financial position as of such date and said Statement of Operations,
Statement of Changes in Net Assets, and Financial Highlights fairly
reflect its results of operations, changes in financial position, and
financial highlights for the periods covered thereby in conformity
with generally accepted accounting principles consistently applied;
(g) Rated Portfolio has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its Statement of Assets and Liabilities as of March 31, 1998, and
those incurred in the ordinary course of Rated Portfolio's business as
an investment company since March 31, 1998;
(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Domestic
Portfolio on Form N-14 relating to the shares of Domestic Portfolio
issuable hereunder and the proxy statement of Rated Portfolio included
therein (Proxy Statement), on the effective date of the Registration
Statement and insofar as they relate to Rated Portfolio (i) comply in
all material respects with the provisions of the Securities Act of
1933, as amended (the 1933 Act), the Securities Exchange Act of 1934,
as amended (the 1934 Act), and the 1940 Act, and the rules and
regulations thereunder, and (ii) do not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and at the time of the shareholder meeting referred
to in Section 7 and on the Closing Date, the prospectus es
contained in the Registration Statement of which the Proxy Statement
is a part (the Prospectus es ), as amended or supplemented,
insofar as they relate to Rated Portfolio, do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(i) All material contracts and commitments of Rated Portfolio (other
than this Agreement) will be terminated without liability to Rated
Portfolio prior to the Closing Date (other than those made in
connection with redemptions of shares and the purchase and sale of
portfolio securities made in the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Rated
Portfolio of the transactions contemplated by this Agreement, except
such as have been obtained under the 1933 Act, the 1934 Act, the 1940
Act, and state securities or blue sky laws (which term as used herein
shall include the District of Columbia and Puerto Rico);
(k) Rated Portfolio has filed or will file all federal and state tax
returns which, to the knowledge of Rated Portfolio's officers, are
required to be filed by Rated Portfolio and has paid or will pay all
federal and state taxes shown to be due on said returns or provision
shall have been made for the payment thereof, and, to the best of
Rated Portfolio's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
(l) Rated Portfolio has met the requirements of Subchapter M of the
Code for qualification and treatment as a regulated investment company
for all prior taxable years and intends to meet such requirements for
its current taxable year ending on the Closing Date;
(m) All of the issued and outstanding shares of Rated Portfolio are,
and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of Delaware
law (except as disclosed in the Fund's Statement of Additional
Information), and have been offered for sale and in conformity with
all applicable federal securities laws. All of the issued and
outstanding shares of Rated Portfolio will, at the Closing Date, be
held by the persons and in the amounts set forth in the list of
shareholders submitted to Domestic Portfolio in accordance with this
Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Rated Portfolio will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of Rated Portfolio to be transferred
to Domestic Portfolio pursuant to this Agreement. As of the Closing
Date, subject only to the delivery of Rated Portfolio's portfolio
securities and any such other assets as contemplated by this
Agreement, Domestic Portfolio will acquire Rated Portfolio's portfolio
securities and any such other assets subject to no encumbrances,
liens, or security interests (except for those that may arise in the
ordinary course and are disclosed to Domestic Portfolio) and without
any restrictions upon the transfer thereof; and
(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Rated Portfolio, and this Agreement
constitutes a valid and binding obligation of Rated Portfolio
enforceable in accordance with its terms, subject to shareholder
approval.
2. REPRESENTATIONS AND WARRANTIES OF DOMESTIC PORTFOLIO. Domestic
Portfolio represents and warrants to and agrees with Rated Portfolio
that:
(a) Domestic Portfolio is a series of Colchester Street Trust, a
business trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and has the power to own all
of its properties and assets and to carry out its obligations under
this Agreement. It has all necessary federal, state, and local
authorizations to carry on its business as now being conducted and to
carry out this Agreement;
(b) Colchester Street Trust is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;
(c) The Prospectuses and Statement of Additional Information of
Domestic Portfolio, dated May 29, 1998 and as supplemented ,
previously furnished to Rated Portfolio did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Domestic Portfolio, threatened against
Domestic Portfolio which assert liability on the part of Domestic
Portfolio. Domestic Portfolio knows of no facts which might form the
basis for the institution of such proceedings;
(e) Domestic Portfolio is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Trust Instrument or By-laws, or, to the knowledge of
Domestic Portfolio, of any agreement, indenture, instrument, contract,
lease, or other undertaking to which Domestic Portfolio is a party or
by which Domestic Portfolio is bound or result in the acceleration of
any obligation or the imposition of any penalty under any agreement,
judgment, or decree to which Domestic Portfolio is a party or is
bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Domestic Portfolio at March 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and have been
furnished to Rated Portfolio. Said Statement of Assets and Liabilities
and Schedule of Investments fairly present its financial position as
of such date and said Statement of Operations, Statement of Changes in
Net Assets, and Financial Highlights fairly reflect its results of
operations, changes in financial position, and financial highlights
for the periods covered thereby in conformity with generally accepted
accounting principles consistently applied;
(g) Domestic Portfolio has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its Statement of Assets and Liabilities as of March 31, 1998, and
those incurred in the ordinary course of Domestic Portfolio's business
as an investment company since March 31, 1998;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Domestic
Portfolio of the transactions contemplated by this Agreement, except
such as have been obtained under the 1933 Act, the 1934 Act, the 1940
Act, and state securities or blue sky laws (which term as used herein
shall include the District of Columbia and Puerto Rico);
(i) Domestic Portfolio has filed or will file all federal and state
tax returns which, to the knowledge of Domestic Portfolio's officers,
are required to be filed by Domestic Portfolio and has paid or will
pay all federal and state taxes shown to be due on said returns or
provision shall have been made for the payment thereof, and, to the
best of Domestic Portfolio's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to such
returns;
(j) Domestic Portfolio has met the requirements of Subchapter M of
the Code for qualification and treatment as a regulated investment
company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on March 31, 1999;
(k) As of the Closing Date, the shares of beneficial interest of
Domestic Portfolio to be issued to Rated Portfolio will have been duly
authorized and, when issued and delivered pursuant to this Agreement,
will be legally and validly issued and will be fully paid and
nonassessable (except as disclosed in the Fund's Statement of
Additional Information) by Domestic Portfolio, and no shareholder of
Domestic Portfolio will have any preemptive right of subscription or
purchase in respect thereof;
(l) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Domestic Portfolio, and this Agreement
constitutes a valid and binding obligation of Domestic Portfolio
enforceable in accordance with its terms, subject to approval by the
shareholders of Rated Portfolio;
(m) The Registration Statement and the Proxy Statement, on the
effective date of the Registration Statement and insofar as they
relate to Domestic Portfolio, (i) will comply in all material respects
with the provisions of the 1933 Act, the 1934 Act, and the 1940 Act,
and the rules and regulations thereunder, and (ii) will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholder meeting
referred to in Section 7 and on the Closing Date, the
Prospectuses , as amended or supplemented, insofar as
they relate to Domestic Portfolio, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(n) The issuance of the Domestic Portfolio Shares pursuant to this
Agreement will be in compliance with all applicable federal securities
laws; and
(o) All of the issued and outstanding shares of beneficial interest
of Domestic Portfolio have been offered for sale and sold in
conformity with the federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of Rated
Portfolio and to the other terms and conditions contained herein,
Rated Portfolio agrees to assign, sell, convey, transfer, and deliver
to Domestic Portfolio as of the Closing Date all of the assets of
Rated Portfolio of every kind and nature existing on the Closing Date.
Domestic Portfolio agrees in exchange therefor: (i) to assume all of
Rated Portfolio's liabilities existing on or after the Closing
Date, whether or not determinable on the Closing Date, and (ii) to
issue and deliver to Rated Portfolio the number of full and fractional
Class I, Class II, and Class III shares of Domestic Portfolio equal to
the number of shares of the corresponding class of Rated Portfolio
transferred hereunder, determined as provided for under Section 4.
(b) The assets of Rated Portfolio to be acquired by Domestic
Portfolio shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest or dividends
receivables), claims, choses in action, and other property owned by
Rated Portfolio, and any deferred or prepaid expenses shown as an
asset on the books of Rated Portfolio on the Closing Date. Rated
Portfolio will pay or cause to be paid to Domestic Portfolio any
dividend or interest payments received by it on or after the Closing
Date with respect to the assets transferred to Domestic Portfolio
hereunder, and Domestic Portfolio will retain any dividend or interest
payments received by it after the Valuation Time with respect to the
assets transferred hereunder without regard to the payment date
thereof.
(c) The liabilities of Rated Portfolio to be assumed by Domestic
Portfolio shall include (except as otherwise provided for herein) all
of Rated Portfolio's liabilities, debts, obligations, and duties, of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in this Agreement. Notwithstanding the
foregoing, Rated Portfolio agrees to use its best efforts to discharge
all of its known liabilities prior to the Closing Date, other than
liabilities incurred in the ordinary course of business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, Rated Portfolio will constructively
distribute to its shareholders of record, determined as of the
Valuation Time on the Closing Date, the Domestic Portfolio Shares in
exchange for such shareholders' shares of beneficial interest in the
corresponding class of Rated Portfolio and Rated Portfolio will be
liquidated in accordance with its Trust Instrument. Rated Portfolio
shareholders will receive the number of shares of the
corresponding class of Domestic Portfolio equal to the number of full
and fractional Rated Portfolio shares held by such shareholders
immediately prior to the Closing. Such distribution shall be
accomplished by the Funds' transfer agent opening accounts on Domestic
Portfolio's share transfer books in the names of the Rated Portfolio
shareholders and transferring the Domestic Portfolio Shares thereto.
Each Rated Portfolio shareholder's account shall be credited with the
number of full and fractional (rounded to the third decimal place)
Domestic Portfolio Shares due that shareholder. All outstanding Rated
Portfolio shares, including any represented by certificates, shall
simultaneously be canceled on Rated Portfolio's share transfer
records. Domestic Portfolio shall not issue certificates representing
the Domestic Portfolio Shares in connection with the Reorganization.
(e) Any reporting responsibility of Rated Portfolio is and shall
remain its responsibility up to and including the date on which Rated
Portfolio is terminated.
(f) Any transfer taxes payable upon issuance of the Domestic
Portfolio Shares in a name other than that of the registered holder on
Rated Portfolio's books of the Rated Portfolio shares constructively
exchanged for the Domestic Portfolio Shares shall be paid by the
person to whom such Domestic Portfolio Shares are to be issued, as a
condition of such transfer.
4. VALUATION.
(a) The Valuation Time shall be as of the close of business of the
New York Stock Exchange on the Closing Date (as defined below) (the
Valuation Time).
(b) As of the Closing Date, Domestic Portfolio will deliver to Rated
Portfolio the number of full and fractional Class I, Class II, and
Class III shares of Domestic Portfolio equal to the number of full and
fractional shares of the corresponding class of Rated Portfolio then
outstanding.
(c) The net asset value per share of each class of Domestic Portfolio
to be delivered to Rated Portfolio, the value of the assets of Rated
Portfolio transferred hereunder, and the value of the liabilities of
Rated Portfolio to be assumed hereunder shall in each case be
determined as of the Valuation Time.
(d) The net asset value per share of each class of Domestic Portfolio
shall be computed in the manner set forth in the then-current Domestic
Portfolio Prospectus es and Statement of Additional Information,
and the value of the assets and liabilities of Rated Portfolio shall
be computed in the manner set forth in the then-current Rated
Portfolio Prospectus es and Statement of Additional Information.
(e) All computations pursuant to this Section shall be made by or
under the direction of Fidelity Service Company, Inc., a wholly-owned
subsidiary of FMR Corp., in accordance with its regular practice as
pricing agent for Rated Portfolio and Domestic Portfolio.
5. FEES; EXPENSES.
(a) Rated Portfolio shall be responsible for all expenses, fees and
other charges incurred in connection with the transactions
contemplated by this Agreement, provided that those expenses, together
with the other expenses of each class (subject to certain excluded
expenses), do not exceed each class's 0.20% expense cap, as
applicable. Expenses exceeding each class's 0.20% expense cap, as
applicable, will be paid by FMR (but not including costs incurred in
connection with the purchase or sale of portfolio securities). Any
expenses incurred in connection with the transactions contemplated by
this Agreement which may be attributable to Domestic Portfolio will be
borne by Domestic Portfolio, provided that those expenses,
together with the other expenses of each class (subject to certain
excluded expenses), do not exceed each class's 0.20% expense cap, as
applicable. Expenses exceeding each class's 0.20% expense cap, as
applicable, will be paid by FMR (but not including costs incurred in
connection with the purchase or sale of portfolio securities).
(b) Each of Domestic Portfolio and Rated Portfolio represents that
there is no person who has dealt with it who by reason of such
dealings is entitled to any broker's or finder's or other similar fee
or commission arising out of the transactions contemplated by this
Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trust, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on January 21,
1999, or at some other time, date, and place agreed to by Rated
Portfolio and Domestic Portfolio (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of Rated Portfolio and the net asset
value per share of Domestic Portfolio is impracticable, the Valuation
Time and the Closing Date shall be postponed until the first business
day after the day when such trading shall have been fully resumed and
such reporting shall have been restored, or such other date as the
parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF RATED PORTFOLIO.
(a) Rated Portfolio agrees to call a meeting of its shareholders
after the effective date of the Registration Statement to consider
transferring its assets to Domestic Portfolio as herein provided,
adopting this Agreement, and authorizing the liquidation of Rated
Portfolio.
(b) Rated Portfolio agrees that as soon as reasonably practicable
after distribution of the Domestic Portfolio Shares, Rated Portfolio
shall be terminated as a series of Colchester Street Trust pursuant to
its Trust Instrument, any further actions shall be taken in connection
therewith as required by applicable law, and on and after the Closing
Date Rated Portfolio shall not conduct any business except in
connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF DOMESTIC PORTFOLIO.
Domestic Portfolio is not obligated to meet the conditions set forth
under this Agreement unless Rated Portfolio satisfies the requirements
set forth in this Section 8 on or before the Closing Date.
(a) That Rated Portfolio furnishes to Domestic Portfolio a statement,
dated as of the Closing Date, signed by an officer of Colchester
Street Trust, certifying that as of the Valuation Time and the Closing
Date all representations and warranties of Rated Portfolio made in
this Agreement are true and correct in all material respects and that
Rated Portfolio has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
such dates;
(b) That Rated Portfolio furnishes Domestic Portfolio with copies of
the resolutions, certified by an officer of Colchester Street Trust,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of Rated Portfolio;
(c) That, on or prior to the Closing Date, Rated Portfolio will
declare one or more dividends or distributions which, together with
all previous such dividends or distributions attributable to its
current taxable year, shall have the effect of distributing to the
shareholders of Rated Portfolio substantially all of Rated Portfolio's
investment company taxable income and all of its net realized capital
gain, if any, as of the Closing Date;
(d) That Rated Portfolio shall deliver to Domestic Portfolio at the
Closing a Statement of its Assets and Liabilities, together with a
list of its portfolio securities showing each such security's adjusted
tax basis and holding period by lot, with values determined as
provided in Section 4 of this Agreement, all as of the Valuation Time,
certified on Rated Portfolio's behalf by its Treasurer or Assistant
Treasurer;
(e) That Rated Portfolio's custodian shall deliver to Domestic
Portfolio a certificate identifying the assets of Rated Portfolio held
by such custodian as of the Valuation Time on the Closing Date and
stating that as of the Valuation Time: (i) the assets held by the
custodian will be transferred to Domestic Portfolio; (ii) Rated
Portfolio's assets have been duly endorsed in proper form for transfer
in such condition as to constitute good delivery thereof; and (iii) to
the best of the custodian's knowledge, all necessary taxes in
conjunction with the delivery of the assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made;
(f) That Rated Portfolio's transfer agent shall deliver to Domestic
Portfolio at the Closing a certificate setting forth the number of
shares of Rated Portfolio outstanding as of the Valuation Time and the
name and address of each holder of record of any such shares and the
number of shares held of record by each such shareholder;
(g) That Rated Portfolio calls a meeting of its shareholders to be
held after the effective date of the Registration Statement, to
consider transferring its assets to Domestic Portfolio as herein
provided, adopting this Agreement, and authorizing the liquidation and
termination of Rated Portfolio;
(h) That Rated Portfolio delivers to Domestic Portfolio a certificate
of an officer of Colchester Street Trust, dated as of the Closing
Date, that there has been no material adverse change in Rated
Portfolio's financial position since March 31, 1998, other than
changes in the market value of its portfolio securities, or changes
due to net redemptions of its shares, dividends paid, or losses from
operations; and
(i) That all of the issued and outstanding shares of beneficial
interest of Rated Portfolio shall have been offered for sale and sold
in conformity with all applicable state securities laws and, to the
extent that any audit of the records of Rated Portfolio or its
transfer agent by Domestic Portfolio or its agents shall have revealed
otherwise, Rated Portfolio shall have taken all actions that in the
opinion of Domestic Portfolio are necessary to remedy any prior
failure on the part of Rated Portfolio to have offered for sale and
sold such shares in conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF RATED PORTFOLIO.
Rated Portfolio is not obligated to meet the conditions set forth
under this Agreement unless Domestic Portfolio satisfies the
requirements set forth in this Section 9 on or before the Closing
Date.
(a) That Domestic Portfolio shall have executed and delivered to
Rated Portfolio an Assumption of Liabilities, certified by an officer
of Colchester Street Trust, dated as of the Closing Date pursuant to
which Domestic Portfolio will assume all of the liabilities of Rated
Portfolio existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Domestic Portfolio furnishes to Rated Portfolio a statement,
dated as of the Closing Date, signed by an officer of Colchester
Street Trust, certifying that as of the Valuation Time and the Closing
Date all representations and warranties of Domestic Portfolio made in
this Agreement are true and correct in all material respects, and
Domestic Portfolio has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to such dates; and
(c) That Rated Portfolio shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to Rated Portfolio and Domestic
Portfolio, to the effect that the Domestic Portfolio Shares are duly
authorized and upon delivery to Rated Portfolio as provided in this
Agreement will be validly issued and will be fully paid and
nonassessable by Domestic Portfolio (except as disclosed in Domestic
Portfolio's Statement of Additional Information) and no shareholder of
Domestic Portfolio has any preemptive right of subscription or
purchase in respect thereof.
10. CONDITIONS TO OBLIGATIONS OF DOMESTIC PORTFOLIO AND RATED
PORTFOLIO.
Neither Rated Portfolio nor Domestic Portfolio is obligated to meet
the conditions set forth under this Agreement unless both Rated
Portfolio and Domestic Portfolio satisfy the requirements set forth in
this Section 10 on or before the Closing Date.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of
the holders of the outstanding shares of beneficial interest of Rated
Portfolio;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, which term as used herein shall include
the District of Columbia and Puerto Rico, and including "no action"
positions of such federal or state authorities) deemed necessary by
Domestic Portfolio or Rated Portfolio to permit consummation, in all
material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order,
or permit would not involve a risk of a material adverse effect on the
assets or properties of Domestic Portfolio or Rated Portfolio,
provided that either party hereto may for itself waive any of such
conditions;
(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be satisfactory in form and substance to it
and its counsel, Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under
the 1933 Act, and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of Domestic Portfolio and
Rated Portfolio, threatened by the Commission; and
(f) That Domestic Portfolio and Rated Portfolio shall have received
an opinion of Kirkpatrick & Lockhart LLP satisfactory to Domestic
Portfolio and Rated Portfolio that for federal income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Rated Portfolio and Domestic Portfolio
will each be parties to the Reorganization under section 368(b) of the
Code;
(ii) No gain or loss will be recognized by Rated Portfolio upon the
transfer of all of its assets to Domestic Portfolio in exchange solely
for the Domestic Portfolio Shares and Domestic Portfolio's
assumption of Rated Portfolio's liabilities followed by the
distribution of those Domestic Portfolio Shares to the shareholders of
the corresponding class of Rated Portfolio in liquidation of Rated
Portfolio;
(iii) No gain or loss will be recognized by Domestic Portfolio on
the receipt of Rated Portfolio's assets in exchange solely for the
Domestic Portfolio Shares and the assumption of Rated Portfolio's
liabilities;
(iv) The basis of Rated Portfolio's assets in the hands of Domestic
Portfolio will be the same as the basis of such assets in Rated
Portfolio's hands immediately prior to the Reorganization;
(v) Domestic Portfolio's holding period in the assets to be received
from Rated Portfolio will include Rated Portfolio's holding period in
such assets;
(vi) A Rated Portfolio shareholder will recognize no gain or loss on
the exchange of his or her shares of beneficial interest in Rated
Portfolio for the Domestic Portfolio Shares of the corresponding class
in the Reorganization;
(vii) A Rated Portfolio shareholder's basis in the Domestic
Portfolio Shares to be received by him or her will be the same as his
or her basis in the Rated Portfolio shares of the corresponding
class exchanged therefor;
(viii) A Rated Portfolio shareholder's holding period for his or her
Domestic Portfolio Shares will include the holding period of Rated
Portfolio shares exchanged therefor , provided that those Rated
Portfolio shares were held as capital assets on the date of the
Reorganization.
Notwithstanding anything herein to the contrary, neither Rated
Portfolio nor Domestic Portfolio may waive the conditions set forth in
this subsection 10(f).
11. COVENANTS OF DOMESTIC PORTFOLIO AND RATED PORTFOLIO.
(a) Domestic Portfolio and Rated Portfolio each covenants to operate
its respective business in the ordinary course between the date hereof
and the Closing Date, it being understood that such ordinary course of
business will include the payment of customary dividends and
distributions;
(b) Rated Portfolio covenants that it is not acquiring the Domestic
Portfolio Shares for the purpose of making any distribution other than
in accordance with the terms of this Agreement;
(c) Rated Portfolio covenants that it will assist Domestic Portfolio
in obtaining such information as Domestic Portfolio reasonably
requests concerning the beneficial ownership of Rated Portfolio's
shares; and
(d) Rated Portfolio covenants that its liquidation and termination
will be effected in the manner provided in its Trust Instrument in
accordance with applicable law and after the Closing Date, Rated
Portfolio will not conduct any business except in connection with its
liquidation and termination.
12. TERMINATION; WAIVER.
Domestic Portfolio and Rated Portfolio may terminate this Agreement
by mutual agreement. In addition, either Domestic Portfolio or Rated
Portfolio may at its option terminate this Agreement at or prior to
the Closing Date because:
(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of Rated Portfolio or Domestic Portfolio, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the State of Delaware.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Domestic Portfolio or
Rated Portfolio; provided, however, that following the shareholder
meeting called by Rated Portfolio pursuant to Section 7 of this
Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Domestic Portfolio Shares to
be distributed to Rated Portfolio shareholders under this
Agreement to the detriment of such shareholders without their further
approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. TRUST INSTRUMENT.
A copy of the Fund s' Trust Instrument, as restated and
amended, is on file with the Secretary of State of the State of
Delaware, and notice is hereby given that this instrument is executed
on behalf of the Trustees of each Fund as trustees and not
individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers,
or shareholders individually but are binding only upon the assets and
property of such Fund. Each Fund agrees that its obligations hereunder
apply only to such Fund and not to its shareholders individually or to
the Trustees of such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other parties. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.
[SIGNATURE LINES OMITTED]]
RMM-pxs-1098 CUSIP#316191204/FUND#052
1.707792.100 CUSIP#316191808/FUND#619
CUSIP#316191881/FUND#652
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY COLCHESTER STREET TRUST: RATED MONEY MARKET PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY COLCHESTER STREET TRUST: RATED MONEY MARKET PORTFOLIO
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on December 16, 1998 at 11:00 a.m.
Eastern time and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposal described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in
a fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip #316191204/fund# 052
cusip #316191808/fund# 619
cusip #316191881/fund# 652
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
Please detach at perforation before mailing.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW.
- ---------------------------------------------------------------------
_____________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. TO APPROVE AN AGREEMENT AND PLAN OF FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
REORGANIZATION BETWEEN RATED MONEY MARKET
PORTFOLIO AND DOMESTIC PORTFOLIO, ANOTHER FUND
OF THE TRUST, PROVIDING FOR THE TRANSFER OF ALL OF THE
ASSETS OF RATED MONEY MARKET PORTFOLIO TO
DOMESTIC PORTFOLIO IN EXCHANGE SOLELY FOR SHARES
OF BENEFICIAL INTEREST IN CLASS I, CLASS II, AND
CLASS III OF DOMESTIC PORTFOLIO AND THE
ASSUMPTION BY DOMESTIC PORTFOLIO OF RATED
MONEY MARKET PORTFOLIO'S LIABILITIES, FOLLOWED
BY THE DISTRIBUTION OF CLASS I, CLASS II, AND CLASS
III SHARES OF DOMESTIC PORTFOLIO TO SHAREHOLDERS
OF THE CORRESPONDING CLASS OF RATED MONEY
MARKET PORTFOLIO IN LIQUIDATION OF RATED MONEY
MARKET PORTFOLIO.
</TABLE>
RMM-PXC-1098 cusip #316191204/fund# 052
cusip #316191808/fund# 619 cusip #316191881/fund# 652
I M P O R T A N T
PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
(PHOTO_OF_EDWARD_C_JOHNSON_3D)
Dear Fidelity Institutional Money Market Funds Shareholder:
On December 16, 1998, a special shareholder meeting of the Fidelity
Institutional Money Market Funds: Rated Money Market Portfolio will be
held.
The matter to be discussed is important, and directly affects your
investment. As a shareholder, you are entitled to one vote for each
dollar of net asset value you own. YOU MAY THINK YOUR VOTE IS
INSIGNIFICANT, BUT EVERY VOTE IS EXTREMELY IMPORTANT. We must continue
sending requests to vote until a majority of the shares are voted at
the meeting. Additional mailings are expensive, and these costs are
charged directly to the fund.
The enclosed Proxy Statement details the proposal under consideration.
A summary of the issue can be found on the first page of the Proxy
Statement. In addition, we have attached a Q&A to assist you in
understanding the proposal. After you have read the material, please
cast your vote promptly by signing and returning the enclosed proxy
card. It is important that you sign your proxy card exactly as your
name appears in the registration of the proxy card. A postage-paid
envelope has been provided. Your time will be well spent, and you will
help save the cost of additional mailings.
This proposal has been carefully considered by the fund's Board of
Trustees, which is responsible for protecting your interests as a
shareholder. THE BOARD OF TRUSTEES BELIEVES THIS PROPOSAL IS FAIR AND
REASONABLE, AND RECOMMENDS THAT YOU APPROVE IT. If you have any
questions about this proposal, please do not hesitate to contact
Fidelity Client Services at 800-843-3001.
Remember, this is your opportunity to voice your opinion on matters
affecting your fund. YOUR PARTICIPATION IS EXTREMELY IMPORTANT NO
MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
Thank you. We appreciate your prompt attention.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you
understand the Proposal On Which You
Are Being Asked To Vote.
PLEASE READ THE FULL TEXT OF THIS PROXY STATEMENT. BELOW
IS A BRIEF OVERVIEW OF THE MATTER TO BE VOTED UPON.
YOUR VOTE IS IMPORTANT. IF YOU HAVE ANY QUESTIONS
REGARDING THE PROPOSAL, PLEASE CALL CLIENT SERVICES AT
800-843-3001. WE APPRECIATE YOU PLACING YOUR TRUST IN THE
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS AND LOOK
FORWARD TO HELPING YOU ACHIEVE YOUR FINANCIAL GOALS.
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
You are being asked to vote on the following proposal:
To approve an Agreement and Plan of Reorganization which
will result in the merger of Fidelity Rated Money Market
Portfolio into Fidelity Domestic Portfolio.
WHY IS FIDELITY RATED MONEY MARKET PORTFOLIO PROPOSING TO MERGE WITH
FIDELITY DOMESTIC PORTFOLIO?
The merger of Fidelity Rated Money Market Portfolio into
Fidelity Domestic Portfolio, which is also a money market
fund managed by Fidelity Management & Research Company
(FMR), will help FMR manage your money more efficiently
because the combined portfolio will have a substantially
larger asset base and a broader shareholder base. In
addition, the investment policies and operating
procedures for both portfolios are substantially the
same.
HOW WILL THE MERGER AFFECT THE VALUE OF MY INVESTMENT?
The merger will not affect the value of your investment.
If the Agreement and Plan of Reorganization is approved,
your Class I, Class II, and Class III shares of Fidelity
Rated Money Market Portfolio will be exchanged for the
same number of shares of the corresponding class of
Fidelity Domestic Portfolio.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSAL?
Yes. The Board of Trustees of each fund has unanimously
approved the proposal, and recommends that you vote to
approve it.
HOW DO I VOTE MY SHARES?
You can vote your shares by attending the Special Meeting
of Shareholders at 11:00 a.m. on December 16, 1998 OR by
completing and signing the enclosed proxy card and
mailing it in the enclosed postage paid envelope. If you
need assistance, or have any questions regarding the
proposal or how to vote your shares, please call
Fidelity Client Services at 1-800-843-3001.
(Fidelity_Logo)(registered trademark)
RMM-pxl-1098
1.707793.100
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 each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated May
29, 1998. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web Site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact Fidelity
Client Services 82 Devonshire Street, Boston, MA 02109 at
1-800-843-3001, or your investment professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
IMMI-PRO-0598
702218
FIDELITY
INSTITUTIONAL
MONEY MARKET
FUNDS
TREASURY ONLY
PORTFOLIO
CLASS I
(FUND NUMBER 680)
TREASURY PORTFOLIO
CLASS I
(FUND NUMBER 695)
GOVERNMENT
PORTFOLIO
CLASS I
(FUND NUMBER 057)
DOMESTIC PORTFOLIO
CLASS I
(FUND NUMBER 690)
RATED MONEY
MARKET PORTFOLIO
CLASS I
(FUND NUMBER 052)
MONEY MARKET
PORTFOLIO
CLASS I
(FUND NUMBER 059)
TAX-EXEMPT
PORTFOLIO
CLASS I
(FUND NUMBER 056)
PROSPECTUS
MAY 29, 1998
(FIDELITY_LOGO_GRAPHIC)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS 28 WHO MAY WANT TO INVEST
29 EXPENSES CLASS I'S YEARLY OPERATING
EXPENSES.
31 FINANCIAL HIGHLIGHTS A SUMMARY OF
EACH FUND'S FINANCIAL DATA.
42 PERFORMANCE
THE FUNDS IN DETAIL 42 CHARTER HOW EACH FUND IS ORGANIZED.
42 INVESTMENT PRINCIPLES AND RISKS EACH
FUND'S OVERALL APPROACH TO INVESTING.
44 BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND WHAT
THEY INCLUDE.
YOUR ACCOUNT 46 HOW TO BUY SHARES OPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.
46 HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.
47 INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.
SHAREHOLDER AND ACCOUNT 47 DIVIDENDS, CAPITAL GAINS,
POLICIES AND TAXES
48 TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF PURCHASES
AND REDEMPTIONS.
49 EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient
and economical way to invest in a professionally managed portfolio of
money market instruments.
Each fund is designed for investors who would like to earn current
income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only Portfolio, Treasury Portfolio, and Government Portfolio
offers an added measure of safety with its focus on U.S. Government or
Treasury securities.
These funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a
portion of your investments.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
Class I shares do not have a sales charge and do not pay a
distribution fee. Class II shares do not have a sales charge, but do
pay a 0.15% distribution fee. Class III shares do not have a sales
charge, but do pay a 0.25% distribution fee. Because Class I shares
have no sales charge and do not pay a distribution fee, Class I shares
are expected to have a higher total return than Class II and Class III
shares. You may obtain more information about Class II and Class III
shares, which are not offered through this prospectus, from your
investment professional, or by calling Fidelity Client Services at
1-800-843-3001. Contact your investment professional to discuss which
class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Class I shares of a fund.
SALES CHARGE ON PURCHASES AND NONE
REINVESTED DISTRIBUTIONS
DEFERRED SALES CHARGE ON REDEMPTIONS NONE
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR). In addition, each fund is responsible for certain other
expenses.
Class I's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following figures are based on historical expenses , adjusted to
reflect current fees, of Class I of each fund and are calculated
as a percentage of average net assets of Class I of each fund.
TREASURY ONLY PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
TREASURY PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
GOVERNMENT PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
DOMESTIC PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
RATED MONEY MARKET PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
MONEY MARKET PORTFOLIO
MANAGEMENT FEE 0.18%A
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.18%A
TAX-EXEMPT PORTFOLIO
MANAGEMENT FEE 0.20%
12B-1 FEE (DISTRIBUTION FEE) NONE
OTHER EXPENSES 0.00%A
TOTAL OPERATING EXPENSES 0.20%A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Class I shares of a fund, assuming
a 5% annual return and full redemption at the end of each time period.
Total expenses shown below include any shareholder transaction
expenses and Class I's annual operating expenses.
1 3 5 10
YEAR YEARS YEARS YEARS
TREASURY ONLY $ 2 $ 6 $ 11 $ 26
TREASURY $ 2 $ 6 $ 11 $ 26
GOVERNMENT $ 2 $ 6 $ 11 $ 26
DOMESTIC $ 2 $ 6 $ 11 $ 26
RATED MONEY $ 2 $ 6 $ 11 $ 2 6
MARKET
MONEY $ 2 $ 6 $ 1 0 $ 23
MARKET
TAX-EXEMPT $ 2 $ 6 $ 11 $ 26
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class I of each fund to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses and 12b-1 fees), as a
percentage of its respective average net assets, exceed 0.20% (0.18%
for Money Market Portfolio ). If these agreements were not in
effect, the management fee, other expenses and total operating
expenses, as a percentage of average net assets, would have been the
following amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
OTHER EXPENSES TOTAL OPERATING
MANAGEMENT FEE EXPENSES
CLASS I CLASS I CLASS I
TREASURY ONLY 0.20 % 0.09 % 0.29 %
PORTFOLIO
TREASURY PORTFOLIO 0.20 % 0.05 % 0.25 %
GOVERNMENT 0.20 % 0.05 % 0.25 %
PORTFOLIO
DOMESTIC PORTFOLIO 0.20 % 0.06 % 0.26 %
RATED MONEY 0.20 % 0.23 % B 0.43 %
MARKET PORTFOLIO
MONEY MARKET 0.20 % 0.05 % 0.25 %
PORTFOLIO
TAX-EXEMPT PORTFOLIO 0.20 % 0.06 % 0.26 %
</TABLE>
B BASED ON ESTIMATED EXPENSES DUE TO CHANGE IN MANAGEMENT FEE RATE
EFFECTIVE JANUARY 1, 1998.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Treasury Portfolio,
Government Portfolio, Domestic Portfolio and Money Market Portfolio
have been audited by Price Waterhouse LLP, independent accountants.
The financial highlights tables that follow for Treasury Only
Portfolio, Rated Money Market Portfolio and Tax-Exempt Portfolio have
been audited by Coopers & Lybrand L.L.P., independent accountants. The
funds' financial highlights, financial statements, and reports of the
auditors are included in the funds' Annual Report, and are
incorporated by reference into (are legally a part of) the funds' SAI.
Contact Fidelity Client Services (Client Services) for a free copy of
the Annual Report or the SAI.
TREASURY ONLY PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED
PER-SHARE
DATA AND
RATIOS
YEARS 1998 1997 1996 1995A 1994B 1993B 1992B 1991C
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .052 .050 .054 .033 .032 .031 .045 .055
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.052) (.050) (.054) (.033) (.032) (.031) (.045) (.055)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.33% 5.17% 5.56% 3.38% 3.27% 3.10% 4.64% 5.63%
RETURND
NET $ 943 $ 1,157 $ 1,361 $ 1,266 $ 1,049 $ 1,048 $ 1,198 $ 706
ASSETS, END
OF PERIOD
(IN MILLIONS)
RATIO OF .20%E .20%E .20%E .20%E,F .20%E .20%E .20%E .03%E,F
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 5.20% 5.05% 5.41% 5.02%F 3.22% 3.05% 4.43% 6.34%F
NET INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A AUGUST 1, 1994 TO MARCH 31, 1995
B YEAR ENDED JULY 31
C OCTOBER 3, 1990 (COMMENCEMENT OF SALE OF CLASS I SHARES) TO JULY 31,
1991
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F ANNUALIZED
TREASURY PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED
PER-SHARE
DATA AND
RATIOS
YEARS 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .054 .052 .056 .047 .030 .034 .053 .076 .088 .078
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.054) (.052) (.056) (.047) (.030) (.034) (.053) (.076) (.088) (.078)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.55% 5.30% 5.79% 4.78% 3.06% 3.46% 5.41% 7.87% 9.13% 8.11%
RETURNA
NET $ 4,498 $ 5,598 $ 7,134 $ 4,688 $ 4,552 $ 5,590 $ 5,477 $ 3,282 $ 1,481 $ 658
ASSETS, END
OF PERIOD (IN
MILLIONS)
RATIO OF .20%B .20%B .20%B .18%B .18%B .18%B .18%B .18%B .19%B .20%B
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 5.41% 5.17% 5.61% 4.71% 3.01% 3.38% 5.12% 7.50% 8.63% 7.92%
NET INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
GOVERNMENT PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .055 .052 .057 .048 .031 .035 .054 .077 .088 .079
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.055) (.052) (.057) (.048) (.031) (.035) (.054) (.077) (.088) (.079)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.60% 5.37% 5.84% 4.86% 3.13% 3.56% 5.55% 7.94% 9.15% 8.19%
RETURNA
NET $ 3,528 $ 2,811 $ 3,064 $ 3,321 $ 3,765 $ 5,686 $ 4,604 $ 3,614 $ 2,816 $ 1,918
ASSETS, END
OF PERIOD (IN
MILLIONS)
RATIO OF .20%B .20%B .20%B .18%B .18%B .18%B .18%B .18%B .20%B .20%B
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 5.47% 5.25% 5.69% 4.77% 3.07% 3.50% 5.33% 7.62% 8.74% 7.90%
NET INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
DOMESTIC PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996 1995 1994 1993 1992 1991 1990D
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .055 .053 .057 .049 .031 .034 .054 .078 .035
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.055) (.053) (.057) (.049) (.031) (.034) (.054) (.078) (.035)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.64% 5.40% 5.85% 4.97% 3.14% 3.50% 5.50% 8.11% 3.52%
RETURNB
NET $ 1,171 $ 920 $ 1,118 $ 772 $ 657 $ 804 $ 559 $ 355 $ 331
ASSETS, END
OF PERIOD
(IN MILLIONS)
RATIO OF .20%C .20%C .20%C .18%C .18%C .18%C .18%C .18%C .06%A,C
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 5.50% 5.26% 5.66% 4.94% 3.09% 3.43% 5.24% 7.79% 8.44%A
NET INTEREST
INCOME
TO AVERAGE
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D NOVEMBER 3, 1989 (COMMENCEMENT OF SALE OF CLASS I SHARES) TO MARCH
31, 1990
RATED MONEY MARKET PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996D 1995E 1994E 1993E 1992F 1991G 1990G 1989G 1988G
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .055 .053 .032 .054 .033 .029 .034 .063 .080 .089 .070
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.055) (.053) (.032) (.054) (.033) (.029) (.034) (.063) (.080) (.089) (.070)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.64% 5.39% 3.21% 5.53% 3.34% 2.93% 3.44% 6.44% 8.27% 9.26% 7.27%
RETURNB
NET $ 304 $ 313 $ 224 $ 301 $ 399 $ 611 $ 766 $ 852 $ 945 $ 1,274 $ 1,036
ASSETS, END
OF PERIOD (IN
MILLIONS)
RATIO OF .20%C .20%C .27%A,C .42% .42% .42% .42%A .42% .42% .42% .42%
EXPENSES TO
AVERAGE NET
ASSETS
RATIO OF 5.49% 5.26% 5.46%A 5.33% 3.24% 2.89% 4.04%A 6.38% 8.01% 8.91% 7.00%
NET INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D SEPTEMBER 1, 1995 TO MARCH 31, 1996
E YEAR ENDED AUGUST 31
F NOVEMBER 1, 1991 TO AUGUST 31, 1992
G YEAR ENDED OCTOBER 31
MONEY MARKET PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .055 .053 .057 .049 .032 .035 .055 .078 .089 .080
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.055) (.053) (.057) (.049) (.032) (.035) (.055) (.078) (.089) (.080)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 5.68% 5.43% 5.90% 4.99% 3.20% 3.58% 5.59% 8.13% 9.25% 8.35%
RETURNA
NET $ 9,384 $ 8,714 $ 6,466 $ 5,130 $ 3,200 $ 4,333 $ 3,990 $ 4,707 $ 4,128 $ 2,627
ASSETS, END
OF PERIOD
(IN MILLIONS)
RATIO .18%B .18%B .18%B .18%B .18%B .18%B .18%B .18%B .20%B .20%B
OF EXPENSES
TO
AVERAGE NET
ASSETS
RATIO 5.54% 5.31% 5.73% 5.00% 3.15% 3.50% 5.42% 7.80% 8.82% 8.11%
OF NET
INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
TAX-EXEMPT PORTFOLIO - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA AND RATIOS
YEARS 1998 1997 1996 1995D 1994E 1993E 1992E 1991E 1990E 1989E
ENDED MARCH
31
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
BEGINNING OF
PERIOD
INCOME
FROM
INVESTMENT
OPERATIONS
NET .035 .033 .036 .027 .024 .026 .040 .053 .058 .058
INTEREST
INCOME
LESS
DISTRIBUTIONS
FROM (.035) (.033) (.036) (.027) (.024) (.026) (.040) (.053) (.058) (.058)
NET INTEREST
INCOME
NET $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
ASSET VALUE,
END OF PERIOD
TOTAL 3.60% 3.40% 3.70% 2.74% 2.44% 2.66% 4.02% 5.40% 6.00% 5.97%
RETURNB
NET $ 2,136 $ 2,022 $ 1,807 $ 1,877 $ 2,391 $ 2,239 $ 2,557 $ 2,117 $ 1,985 $ 2,007
ASSETS, END
OF PERIOD (IN
MILLIONS)
RATIO .20%C .20%C .19%C .18%A,C .18%C .18%C .18%C .18%C .20%C .20%C
OF EXPENSES
TO AVERAGE
NET ASSETS
RATIO 3.54% 3.34% 3.64% 3.20%A 2.41% 2.62% 3.90% 5.28% 5.82% 5.80%
OF NET
INTEREST
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D JUNE 1, 1994 TO MARCH 31, 1995
E YEAR ENDED MAY 31
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment 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. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Colchester Street Trust, an open-end management
investment company organized as a Delaware business trust on June 20,
1991.
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 periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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. The transfer agent 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.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which handles their business affairs.
Fidelity Investments Money Management, Inc.(FIMM), located in
Merrimack, New Hampshire, has primary responsibility for providing
investment management services.
As of March 31, 1998, FMR advised funds having approximately 36
million shareholder accounts with a total value of more than
$ 589 billion.
Fidelity investment personnel may invest in securities for their own
accounts 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 Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for Class I of Treasury
Only Portfolio, Treasury Portfolio, Government Portfolio, Domestic
Portfolio, Rated Money Market Portfolio, and Money Market Portfolio
(the Taxable Funds). UMB Bank, n.a. (UMB) is the transfer agent for
Tax-Exempt Portfolio, and is located at 1010 Grand Avenue, Kansas
City, Missouri. UMB employs FIIOC to perform transfer agent servicing
functions for Class I of Tax-Exempt Portfolio.
FMR Corp. is the ultimate parent company of FMR and FIMM. 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.
As of March 31, 1998, approximately 27.41% of Treasury Portfolio's
total outstanding shares were held by The Bank of New York.
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
TREASURY ONLY PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Treasury securities. The fund does not enter into repurchase
agreements or reverse repurchase agreements. The fund will invest in
those securities whose interest is specifically exempt from state and
local income taxes under federal law; such interest is not exempt from
federal income tax.
TREASURY PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Treasury securities and repurchase agreements for these securities.
The fund does not enter into reverse repurchase agreements.
GOVERNMENT PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Government securities and repurchase agreements for these securities.
The fund also may enter into reverse repurchase agreements.
DOMESTIC PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic issuers, including U.S. Government securities and repurchase
agreements. Securities are "highest-quality" if rated in the highest
rating category by at least two nationally recognized rating services,
or by one if only one rating service has rated a security, or, if
unrated, determined to be of equivalent quality by FMR. The fund also
may enter into reverse repurchase agreements.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level of
current income while maintaining a stable $1.00 share price by
investing in high-quality, short-term securities. The fund invests
only in U.S. dollar-denominated money market securities of domestic
and foreign issuers rated in the highest rating category by at least
two nationally recognized rating services, U.S. Government securities,
and repurchase agreements. The fund also may enter into reverse
repurchase agreements.
MONEY MARKET PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic and foreign issuers, including U.S. Government securities and
repurchase agreements. Securities are "highest-quality" if rated in
the highest rating category by at least two nationally recognized
rating services, or by one if only one rating service has rated a
security, or, if unrated, determined to be of equivalent quality by
FMR. The fund also may enter into reverse repurchase agreements.
TAX-EXEMPT PORTFOLIO seeks to earn a high level of
current income that is free from federal income tax
while maintaining a stable $1.00 share price by investing in
high-quality, short-term municipal securities of all types, including
securities structured so that they are eligible investments for the
fund. The fund invests in municipal money market securities rated in
the highest category by at least one nationally recognized rating
service and in one of the two highest categories by another rating
service if rated by more than one, or, if unrated, determined to be of
equivalent quality to the highest rating category by FMR. FMR normally
invests the fund's assets so that at least 80% of the fund's income
distributions is free from federal income tax. The fund does not
currently intend to purchase municipal securities whose interest is
subject to the federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. The fund also reserves the right to hold a substantial
amount of uninvested cash or to invest more than normally permitted in
federally taxable obligations for temporary, defensive purposes.
Each fund earns income at current money market rates. They stress
preservation of capital, liquidity, and income (tax-free income in the
case of Tax-Exempt Portfolio) and do not seek the higher yields or
capital appreciation that more aggressive investments may provide.
Each fund's yield will vary from day to day, and generally reflects
current short-term interest rates and other market conditions.
It is important to note that neither the funds' share prices nor
their yields are insured or guaranteed by the U.S. Government.
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 each fund's 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
the fund achieve its goal. Fund holdings are detailed in each
fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
municipalities, local and state governments, and other entities. These
securities may carry fixed, variable, or floating interest rates.
Money market securities may be structured to be or may
employ a trust or other form so that they are eligible
investments for money market funds. If a structure fails to
function as intended, adverse tax or investment consequences may
result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments 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, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the
entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Likewise, securities for which
foreign entities provide credit or liquidity support may involve
different risks than those supported by domestic entities. Extensive
public information about the foreign entity may not be available, and
unfavorable political, economic, or governmental developments in the
foreign country involved could affect the repayment of principal or
payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
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.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
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 FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Each of Domestic Portfolio, Rated Money Market Portfolio
and Money Market Portfolio will invest more than 25% of its total
assets in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Tax-Exempt Portfolio will not invest in a money market
fund. Tax-Exempt Portfolio does not currently intend to invest in
repurchase agreements. Treasury Only Portfolio, Treasury Portfolio,
Government Portfolio, Domestic Portfolio, Rated Money Market
Portfolio, and Money Market Portfolio do not currently intend to
invest in a money market fund.
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
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: Each of Domestic Portfolio, Rated Money Market Portfolio
and Money Market Portfolio may not invest more than 5% of their total
assets in any one issuer, except that each fund may invest up to 25%
of its total assets in the highest quality securities of a single
issuer for up to three business days. These limitations do not apply
to U.S. Government securities or to securities of other
investment companies.
With respect to 75% of its total assets, Tax-Exempt Portfolio may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer. This
limitation does not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Portfolio may invest more than 25% of its total assets in
tax-free securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates , or through reverse repurchase
agreements, and may make additional investments while borrowings are
outstanding.
RESTRICTIONS: Each of Government Portfolio, Domestic Portfolio, Rated
Money Market Portfolio, and Money Market Portfolio may borrow only for
temporary or emergency purposes, or engage in reverse repurchase
agreements, but not in an amount exceeding 331/3% of its total assets.
Each of Treasury Only Portfolio, Treasury Portfolio, and Tax-Exempt
Portfolio may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
LENDING . A fund may lend money to other funds advised by FMR
or its affiliates .
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets. Treasury Only Portfolio, Treasury Portfolio,
Government Portfolio, and Tax-Exempt Portfolio do not lend money to
other funds advised by FMR.
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.
Treasury Only Portfolio seeks as high a level of current income as is
consistent with the security of principal and liquidity, and to
maintain a constant net asset value per share (NAV) of $1.00.
Each of Treasury Portfolio, Government Portfolio, Domestic Portfolio,
Rated Money Market Portfolio, and Money Market Portfolio seeks to
obtain as high a level of current income as is consistent with the
preservation of principal and liquidity within the limitations
prescribed for the fund.
Tax-Exempt Portfolio seeks to obtain as high a level of interest
income exempt from federal income tax as is consistent with a
portfolio of high-quality, short-term municipal obligations selected
on the basis of liquidity and stability of principal. The fund, under
normal conditions, will invest so that at least 80% of its income
distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Portfolio may not
purchase a security if, as a result, more than 5% of its total assets
would be invested in the securities of any one issuer. This limitation
does not apply to U.S. Government securities or to securities of other
investment companies.
Each of Domestic Portfolio, Rated Money Market Portfolio and Money
Market Portfolio will invest more than 25% of its total assets in
obligations of companies in the financial services industry.
Each of Government Portfolio, Domestic Portfolio, Rated Money
Market Portfolio, and Money Market Portfolio may borrow only for
temporary or emergency purposes, or engage in reverse repurchase
agreements, but not in an amount exceeding 331/3% of its total assets.
Tax-Exempt Portfolio may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total
assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in
that class's 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 an affiliate 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. Each
fund pays a fee at an annual rate of 0.20% of its average net assets.
Prior to May 31, 1997 and January 1, 1998, Treasury Only Portfolio
and Rated Money Market Portfolio, respectively, each paid FMR a
management fee at an annual rate of 0.42% of its average net assets
and FMR paid all of the other expenses of each fund with limited
exceptions.
FIMM is the funds' sub-adviser and has primary responsibility for
managing their investments. FMR is responsible for providing other
management services. FMR pays FIMM 50% of its management fee (before
expense reimbursements) for FIMM's services. FMR paid FIMM and
FMR Texas Inc., the predecessor company to FIMM, annualized fees
equal to 0.12% and 0.10%, respectively of Treasury Only
Portfolio's, 0.10% and 0.10%, respectively of Treasury
Portfolio's, 0.10% and 0.10%, respectively of Government
Portfolio's, 0.10% and 0.10%, respectively of Domestic
Portfolio's, 0.20% and 0.10%, respectively of Rated Money
Market Portfolio's, 0.10% and 0.10%, respectively of Money
Market Portfolio's, and 0.10% and 0.10%, respectively of
Tax-Exempt Portfolio's average net assets for the fiscal year ended
March 31, 1998.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class I of the Taxable Funds. Fidelity Service
Company, Inc. (FSC) calculates the net asset value per share (NAV) and
dividends for Class I of the Taxable Funds and maintains the general
accounting records for each Taxable Fund.
For the fiscal year ended March 31, 1998, transfer agency and pricing
and bookkeeping fees paid (as a percentage of average net assets)
for the Taxable Funds amounted to the following.
TRANSFER AGENCY PRICING AND
FEES PAID BY BOOKKEEPING
CLASS I FEES PAID BY
FUND
TREASURY ONLY PORTFOLIO 0.04 % * 0.01 %*
TREASURY PORTFOLIO 0.03 % 0.01 %
GOVERNMENT PORTFOLIO 0.03 % 0.01 %
DOMESTIC PORTFOLIO 0.04 % 0.01 %
RATED MONEY MARKET PORTFOLIO 0.03 % * 0.02 %*
MONEY MARKET PORTFOLIO 0.02 % 0.01 %
* ANNUALIZED
UMB is the transfer and service agent for Tax-Exempt Portfolio. UMB
has entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for
Class I of Tax-Exempt Portfolio. UMB has also entered into a
sub-agreement with FSC. FSC calculates the NAV and dividends for Class
I of Tax-Exempt Portfolio and maintains the general accounting records
for Tax-Exempt Portfolio. Under the terms of the sub-agreements, FIIOC
and FSC receive all related fees paid to UMB by Class I of Tax-Exempt
Portfolio.
For the fiscal year ended March 31, 1998, transfer agency and pricing
and bookkeeping fees paid (as a percentage of average net assets)
for Tax-Exempt Portfolio amounted to the following.
TRANSFER AGENCY PRICING AND
FEES PAID BY BOOKKEEPING
CLASS I FEES PAID BY
FUND
TAX-EXEMPT PORTFOLIO 0.03 % 0.01 %
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Class I of 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 Class I
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 funds' Class I
shares. Currently, the Board of Trustees of each fund has authorized
such payments.
YOUR ACCOUNT
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Class I is the class's NAV. Each fund is
managed to keep its NAV stable at $1.00. Class I shares are sold
without a sales charge.
Your shares will be purchased at the next NAV calculated after your
order is received in proper form. Class I's NAV is normally calculated
each business day at the time indicated in the table below.
FUND NAV CALCULATION TIMES
(EASTERN TIME)
TREASURY ONLY PORTFOLIO 2:00 P.M.
TREASURY PORTFOLIO 5:00 P.M.
GOVERNMENT PORTFOLIO 5:00 P.M.
DOMESTIC PORTFOLIO 5:00 P.M.
RATED MONEY MARKET PORTFOLIO 5:00 P.M.
MONEY MARKET PORTFOLIO 3:00 P.M.
TAX-EXEMPT PORTFOLIO 12:00 NOON
Each fund 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 the management of a fund.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the clos e of
business on the day you place your order.
Share certificates are not available for Class I shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be
forwarded to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class
of any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks and Automated Clearing House payments will not be
accepted as a means of investment.
For wiring information and instructions, you should call the
investment professional through which you trade or if you trade
directly through Fidelity, call Fidelity Client Services at
1-800-843-3001. There is no fee imposed by the funds for wire
purchases. However, if you buy shares through an investment
professional, the investment professional may impose a fee for wire
purchases.
All wires must be received in proper form by the transfer agent at the
applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on the day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large
purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000*
MINIMUM BALANCE $1,000,000
*THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR
AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS
GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR
MORE INFORMATION REGARDING THIS WAIVER.
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.
THE PRICE TO SELL ONE SHARE of Class I is the class's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. Class I's NAV is normally calculated
eac h business day at the times indicated in the table on page
.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of
busines s on the day you place your order.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$1,000,000 worth of shares in the account to keep it open.
You must designate on your account application the U.S. commercial
bank account(s) into which you wish the redemption proceeds to be
deposited. Fidelity Client Services will then notify you that this
feature has been activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should
send a letter of instruction, including a signature guarantee, to
Fidelity Client Services at the address shown on page 47 .
You should be able to obtain a signature guarantee from a bank,
broker, 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.
There is no fee imposed by the funds for wiring of redemption
proceeds. However, if you sell shares through an investment
professional, the investment professional may impose a fee for wire
redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System
to your bank account of record. If your redemption request is received
in proper form by the transfer agent before the NAV is calculated,
redemption proceeds will normally be wired on that day.
A fund reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
You are advised to place your trades as early in the day as possible,
and to provide advance notice to Fidelity Client Services for large
redemptions.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include
the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity Client Services at 1-800-843-3001 if you need
additional copies of financial reports, prospectuses or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for institutions that wish to open multiple
accounts (a master account and sub-accounts). You may be required to
enter into a separate agreement with FIIOC. Charges for these
services, if any, will be determined based on the level of services to
be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Income dividends
are declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and
are normally distributed on the first business day of the following
month. However , dividends relating to Class I shares redeemed
if you close your account during the month may be
distributed on the day your account is closed . Each fund
reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. Class I offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
same class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital
gain distributions, if any.
Dividends will be reinvested at each fund's Class I NAV on the last
day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the
funds could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt Portfolio
earns is distributed to shareholders as income dividends. Interest
that is federally tax-free remains tax-free when it is distributed.
Distributions from the Taxable Funds, however, 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 from these funds
could also be taxed by the country in which you reside.
For federal tax purposes, income and short-term capital gains from
each Taxable Fund are distributed as dividends and taxed as ordinary
income; capital gain distributions, if any, are taxed as
long-term capital gains.
However, for shareholders of Tax-Exempt Portfolio, gain on the sale of
tax-free bonds results in taxable distributions. Short-term capital
gains and a portion of the gain on bonds purchased at a discount are
distributed as dividends and taxed as ordinary income; capital gain
distributions, if any, are taxed as long-term capital gains.
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.
For the fiscal year ended March 31, 1998, 100 % of Treasury Only
Portfolio's , 25.20 % of Treasury Portfolio's and 18.44 %
of Government Portfolio's income distributions were derived from
interest on U.S. Government securities which is generally exempt from
state income tax.
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.
Every January, Fidelity will send you and the IRS a statement showing
the tax characterization of distributions paid to you in the previous
year.
A portion of Tax-Exempt Portfolio's dividends may be free from state
or local taxes. Income from investments in your state are often
tax-free to you. Each year, the transfer agent will send you a
breakdown of Tax-Exempt Portfolio's income from each state to help you
calculate your taxes.
During the fiscal year ended March 31, 1998, 100 % of Tax-Exempt
Portfolio's income dividends was free from federal income tax
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
EACH FUND IS OPEN FOR BUSINESS each day that the Federal
Reserve Bank of Kansas City (Kansas City Fed) (for Tax-Exempt
Portfolio ) or the Federal Reserve Bank of New York (New York Fed)
(for the Taxable Funds), the NYSE and the principal bond markets (as
recommended by the Bond Market Association) are open. The
following holiday closings have been scheduled for 1998: New Year's
Day, Martin Luther King's Birthday, Presidents' Day , Good
Friday, Memorial Day, Independence Day (observed) , Labor Day,
Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
Although FMR expects the same holiday schedule to be observed in the
future, at any time the Kansas City Fed, the New York Fed or the
NYSE may modify its holiday schedule or the Bond Market Association
may modify its recommendation.
To the extent that portfolio securities are traded in other markets on
days when the Kansas City Fed or the New York Fed, the NYSE or the
principal bond markets are closed, each class's NAV may be affected on
days when investors do not have access to the fund to purchase or
redeem shares. Certain Fidelity funds may follow different holiday
closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class I of
each fund is computed by adding Class I's pro rata share of the value
of the fund's investments, cash, and other assets, subtracting Class
I's pro rata share of the value of the fund's liabilities, subtracting
the liabilities allocated to Class I, and dividing the result by the
number of Class I shares of that fund that are outstanding. Each fund
values its portfolio securities on the basis of amortized cost. This
method minimizes the effect of changes in a security's market value
and helps each fund maintain a stable $1.00 share price.
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 OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. 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 Client Services for instructions.
Additional documentation may be required from corporations,
associations, and certain fiduciaries.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY , you are
urged to initiate all trades as early in the day as possible and to
notify Fidelity Client Services in advance of large transactions.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received in proper
form. Note the following:
(small solid bullet) All of your purchases must be made by federal
funds wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received in proper form by
the close of the Federal Reserve Wire System on the day of
purchase , you could be liable for any losses or fees a fund or the
transfer agent has incurred or for interest and penalties.
(small solid bullet) Shares begin to earn dividends on the day of
purchase provided (i) you contact Fidelity Client Services and place
your order between 8:30 a.m. and the following times on page
and (ii) the fund's designated wire bank receives the wire in
proper form before the close of the Federal Reserve Wire System on
that day.
(small solid bullet) On any day the principal bond markets close
early, as recommended by the Bond Market Association, or the Kansas
City Fed (for Tax-Exempt Portfolio) or the New York Fed (for the
Taxable Funds) close early, a class may advance the time on that day
by which purchase orders must be placed so that shares earn dividends
on the day of purchase.
FUND DIVIDEND TIMES
(EASTERN TIME)
TREASURY ONLY PORTFOLIO 2:00 P.M.
TREASURY PORTFOLIO 5:00 P.M.
GOVERNMENT PORTFOLIO 5:00 P.M.
DOMESTIC PORTFOLIO 5:00 P.M.
RATED MONEY MARKET PORTFOLIO 5:00 P.M.
MONEY MARKET PORTFOLIO 3:00 P.M.
TAX-EXEMPT PORTFOLIO 12:00 NOON
The income declared for Treasury Portfolio, Government Portfolio,
Domestic Portfolio and Rated Money Market Portfolio is based on
estimates of net investment income for the fund. Actual income may
differ from estimates, and differences, if any, will be included in
the calculation of subsequent dividends.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form.
Note the following:
(small solid bullet) Shares earn dividends through the day prior to
the day of redemption. On any day that the principal bond markets
close early (as recommended by the Bond Market Association) or the
Kansas City Fed (for Tax-Exempt Portfolio) or the New York Fed (for
the Taxable Funds) close early, a class may set a time after
which shares earn dividends through the day of redemption.
Under such circumstances, shares redeemed on a Friday or prior to a
holiday continue to earn dividends until the next business day.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends and holidays),
when trading on the NYSE is restricted, or as permitted by the
SEC.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 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.
THE TRANSFER AGENT 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 Class I shares
of any fund offered through this prospectus at no charge for Class I
shares of any other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 .
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name, account number, the number of shares to be redeemed,
and the name of the fund and class to be purchased. Written requests
for exchange should be mailed to Fidelity Client Services at the
address on page 47 .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES , Class I shares will
be redeemed at the next determined NAV after your order is received in
proper form. Shares of the fund to be acquired will be purchased at
its next determined NAV after redemption proceeds are made available.
You should note that, under certain circumstances, a fund may take up
to seven days to make redemption proceeds available for the exchange
purchase of shares of another fund. In addition, please note the
following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into
must be available 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 or class ,
read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund.
(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.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
(Recycled Logo) This prospectus is printed on recycled paper using
soy-based inks.
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 each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio
listing , or a copy of the Statement of Additional Information
(SAI) dated May 29, 1998 . The SAI has been filed with the
Securities and Exchange Commission (SEC) and is available along with
other related materials on the SEC's Internet Web Site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of either
document, contact Fidelity Client Services 82 Devonshire Street,
Boston, MA 02109 at 1-800-843-3001, or your investment professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
IMMII-PRO-0598
702221
FIDELITY
INSTITUTIONAL
MONEY MARKET
FUNDS
TREASURY ONLY
PORTFOLIO
CLASS II
(FUND NUMBER 542)
TREASURY PORTFOLIO
CLASS II
(FUND NUMBER 600)
GOVERNMENT
PORTFOLIO
CLASS II
(FUND NUMBER 604)
DOMESTIC PORTFOLIO
CLASS II
(FUND NUMBER 692)
RATED MONEY
MARKET PORTFOLIO
CLASS II
(FUND NUMBER 619)
MONEY MARKET
PORTFOLIO
CLASS II
(FUND NUMBER 541)
TAX-EXEMPT PORTFOLIO
CLASS II
(FUND NUMBER 544)
PROSPECTUS
MAY 29, 1998
(FIDELITY_LOGO_GRAPHIC)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS 2 WHO MAY WANT TO INVEST
2 EXPENSES Class II's yearly operating
expenses.
6 FINANCIAL HIGHLIGHTS A summary of
each fund's financial data.
13 PERFORMANCE
THE FUNDS IN DETAIL 13 CHARTER How each fund is organized.
13 INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
16 BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.
YOUR ACCOUNT 17 HOW TO BUY SHARES Opening an
account and making additional
investments.
18 HOW TO SELL SHARES Taking money out
and closing your account.
18 INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND ACCOUNT 18 DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES
19 TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.
20 EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient
and economical way to invest in a professionally managed portfolio of
money market instruments.
Each fund is designed for investors who would like to earn current
income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only Portfolio , Treasury Portfolio and
Government Portfolio offers an added measure of safety with its
focus on U.S. Government or Treasury securities.
These funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a
portion of your investments.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
Class I shares do not have a sales charge and do not pay a
distribution fee. Class II shares do not have a sales charge, but do
pay a 0.15% distribution fee. Class III shares do not have a sales
charge, but do pay a 0.25% distribution fee. Because Class I shares
have no sales charge and do not pay a distribution fee, Class I shares
are expected to have a higher total return than Class II and Class III
shares. You may obtain more information about Class I and Class III
shares, which are not offered through this prospectus, from your
investment professional, or by calling Fidelity Client Services at
1-800-843-3001. Contact your investment professional to discuss which
class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Class II shares of a fund.
Sales charge on purchases and None
reinvested distributions
Deferred sales charge on redemptions None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR). In addition, each fund is responsible for certain other
expenses.
12b-1 fees are paid by Class II of each fund to the distributor for
services and expenses in connection with the distribution of Class II
shares of each fund.
Class II's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following figures are based on historical expenses ,
adjusted to reflect current fees, of Class II of each fund and
are calculated as a percentage of average net assets of Class II of
each fund .
TREASURY ONLY PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00% A
Total operating expenses 0.35%A
TREASURY PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00%A
Total operating expenses 0.35%A
GOVERNMENT PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00%A
Total operating expenses 0.35%A
DOMESTIC PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00%A
Total operating expenses 0.35%A
RATED MONEY MARKET PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00% A
Total operating expenses 0.35%A
MONEY MARKET PORTFOLIO
Management fee 0.18%A
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00%A
Total operating expenses 0.33%A
TAX-EXEMPT PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.15%
Other expenses 0.00%A
Total operating expenses 0.35%A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Class II shares of a fund, assuming
a 5% annual return and full redemption at the end of each time period.
Total expenses shown below include any shareholder transaction
expenses and Class II's annual operating expenses.
1 3 5 10
Year Years Years Years
Treasury Only $ 4 $ 11 $ 20 $ 44
Treasury $ 4 $ 11 $ 20 $ 44
Government $ 4 $ 11 $ 20 $ 44
Domestic $ 4 $ 11 $ 20 $ 44
Rated Money Market $ 4 $ 11 $ 20 $ 44
Money Market $ 3 $ 11 $ 19 $ 42
Tax-Exempt $ 4 $ 11 $ 20 $ 44
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT
TO SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY
VARY .
FMR has voluntarily agreed to reimburse Class II of each fund to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses and 12b-1 fees) , as
a percentage of its respective average net assets, exceed 0.20% (0.18%
for Money Market Portfoli o ) . If these agreements were
not in effect, the management fee, other expenses and total operating
expenses, as a percentage of average net assets, would have been the
following amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management Fee Other Expenses Total Operating
Class II Class II Expenses
Class II
Treasury Only Portfolio 0.20% 0.11 % 0.46 %
Treasury Portfolio 0.20% 0.07 % 0.42 %
Government Portfolio 0.20% 0.12 % 0.47 %
Domestic Portfolio 0.20 % 0.21 % 0.56 %
Rated Money Market Portfolio 0.20 % 0.23%B 0.58 %
Money Market Portfolio 0.20 % 0.10 % 0.45 %
Tax-Exempt Portfolio 0.20 % 0.18 % 0.53 %
</TABLE>
B BASED ON ESTIMATED EXPENSES DUE TO CHANGE IN MANAGEMENT FEE RATE
EFFECTIVE JANUARY 1, 1998.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Treasury Portfolio,
Government Portfolio, Domestic Portfolio and Money Market Portfolio
have been audited by Price Waterhouse LLP, independent accountants.
The financial highlights tables that follow for Treasury Only
Portfolio, Rated Money Market Portfolio and Tax-Exempt
Portfolio have been audited by Coopers & Lybrand L.L.P.,
independent accountants. The funds' financial highlights, financial
statements, and reports of the auditors are included in the funds'
Annual Report, and are incorporated by reference into (are legally a
part of) the funds' SAI. Contact Fidelity Client Services (Client
Services) for a free copy of the Annual Report or the SAI.
TREASURY ONLY PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net asset $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
Income
from
Investment
Operations
Net .051 .049 .020
interest
income
Less
Distributions
From (.051) (.049) (.020)
net interest
income
Net asset $ 1.000 $ 1.000 $ 1.000
value, end of
period
Total 5.18% 5.01% 2.04%
returnB
Net $ 36,847 $ 56,502 $ 102
assets, end
of period
(000
omitted)
Ratio of .35%C .35%C .35%C,E
expenses to
average net
assets
Ratio of .35% .34%D .35%E
expenses to
average net
assets after
expense
reductions
Ratio of 5.05% 4.94% 5.03%E
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
E ANNUALIZED
TREASURY PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .053 .050 .021
interest
income
Less
Distributions
From (.053) (.050) (.021)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.40% 5.14% 2.14%
returnB
Net $ 410,383 $ 89,801 $ 40,470
assets, end
of period
(000
omitted)
Ratio of .35%C .35%C .35%C,D
expenses to
average net
assets
Ratio of 5.25% 5.01% 5.18%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
GOVERNMENT PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .053 .051 .021
interest
income
Less
Distributions
From (.053) (.051) (.021)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.45% 5.22% 2.16%
returnB
Net $ 151,951 $ 108,636 $ 102
assets, end
of period
(000
omitted)
Ratio of .35%C .35%C .35%C,D
expenses to
average net
assets
Ratio of 5.32% 5.10% 5.33%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
DOMESTIC PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .054 .051 .021
interest
income
Less
Distributions
From (.054) (.051) (.021)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.49% 5.24% 2.15%
returnB
Net $ 34,455 $ 4,235 $ 2,105
assets, end
of period
(000
omitted)
Ratio of .35%C .35%C .35%C,D
expenses to
average net
assets
Ratio of 5.36% 5.10% 5.20%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
RATED MONEY MARKET PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .053 .051 .021
interest
income
Less
Distributions
From (.053) (.051) (.021)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.48% 5.23% 2.15%
returnB
Net $ 23,321 $ 14,166 $ 4,709
assets, end
of period
(000
omitted)
Ratio of .35%C .35%C .35%C,D
expenses to
average net
assets
Ratio of 5.37% 5.14% 5.06%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
MONEY MARKET PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .054 .051 .022
interest
income
Less
Distributions
From (.054) (.051) (.022)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.52% 5.27% 2.17%
returnB
Net $ 85,990 $ 167,583 $ 64,200
assets, end
of period
(000
omitted)
Ratio of .33%C .33%C .33%C,D
expenses to
average net
assets
Ratio of 5.39% 5.16% 5.29%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
TAX-EXEMPT PORTFOLIO - CLASS II
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net asset $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
Income
from
Investment
Operations
Net .034 .032 .013
interest
income
Less
Distributions
From (.034) (.032) (.013)
net interest
income
Net asset $ 1.000 $ 1.000 $ 1.000
value, end of
period
Total 3.44% 3.25% 1.34%
returnB
Net $ 30,829 $ 60,247 $ 968
assets, end of
period (000
omitted)
Ratio of .35%C .35%C .35%C,D
expenses to
average net
assets
Ratio of 3.41% 3.21% 3.17%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS II SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment 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. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Colchester Street Trust , an open-end
management investment company organized as a Delaware business trust
on June 20, 1991.
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 periodically throughout the year to oversee
the funds' activities, review contractual arrangements with companies
that provide services to the funds, and review the funds' performance.
The trustees serve as trustees for other Fidelity funds. The
majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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. The transfer agent 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.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which handles their business affairs.
Fidelity Investments Money Management, Inc. (FIMM), located in
Merrimack, New Hampshire, has primary responsibility for providing
investment management services.
As of March 31, 1998, FMR advised funds having approximately
36 million shareholder accounts with a total value of more than
$589 billion.
Fidelity investment personnel may invest in securities for their own
accounts 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 Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for Class II of Treasury
Only Portfolio, Treasury Portfolio , Government
Portfolio , Domestic Portfolio , Rated Money Market
Portfolio, and Money Market Portfolio (the Taxable
Funds ). UMB Bank, n.a. (UMB) is the transfer agent for
Tax-Exempt Portfolio , and is located at 1010 Grand Avenue,
Kansas City, Missouri. UMB employs FIIOC to perform transfer agent
servicing functions for Class II of Tax-Exempt Portfolio.
FMR Corp. is the ultimate parent company of FMR and FIMM .
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.
As of March 31, 1998, approximately 27.41% of Treasury Portfolio's
total outstanding shares were held by The Bank of New York .
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
TREASURY ONLY PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Treasury securities. The fund does not enter into repurchase
agreements or reverse repurchase agreements. The fund will invest in
those securities whose interest is specifically exempt from state and
local income taxes under federal law; such interest is not exempt from
federal income tax.
TREASURY PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Treasury securities and repurchase agreements for these securities.
The fund does not enter into reverse repurchase agreements.
GOVERNMENT PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities . The fund invests only in U.S.
Government securities and repurchase agreements for these securities.
The fund also may enter into reverse repurchase agreements.
DOMESTIC PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic issuers, including U.S. Government securities and repurchase
agreements. Securities are "highest-quality" if rated in the highest
rating category by at least two nationally recognized rating services,
or by one if only one rating service has rated a security, or, if
unrated, determined to be of equivalent quality by FMR. The fund also
may enter into reverse repurchase agreements.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level of
current income while maintaining a stable $1.00 share price
by investing in high-quality, short-term securities. The fund
invests only in U.S. dollar-denominated money market securities of
domestic and foreign issuers rated in the highest rating category by
at least two nationally recognized rating services, U.S. Government
securities, and repurchase agreements. The fund also may enter into
reverse repurchase agreements.
MONEY MARKET PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic and foreign issuers, including U.S. Government securities and
repurchase agreements. Securities are "highest-quality" if rated in
the highest rating category by at least two nationally recognized
rating services, or by one if only one rating service has rated a
security, or, if unrated, determined to be of equivalent quality by
FMR. The fund also may enter into reverse repurchase agreements.
TAX-EXEMPT PORTFOLIO seeks to earn a high level of current
income that is free from federal income tax while maintaining a stable
$1.00 share price by investing in high-quality, short-term municipal
securities of all types, including securities structured so that they
are eligible investments for the fund. The fund invests in
municipal money market securities rated in the highest category by at
least one nationally recognized rating service and in one of the two
highest categories by another rating service if rated by more than
one, or, if unrated, determined to be of equivalent quality to the
highest rating category by FMR and may invest in securities
structured so that they are eligible investments for the fund. FMR
n ormally invests the fund's assets so that at least 80% of the
fund's income distributions is free f rom federal income
tax. The fund does not currently intend to purchase municipal
securities whose interest is subject to the federal alternative
minimum tax.
FMR normally invests the fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. The fund also reserves the right to hold a substantial
amount of uninvested cash or to invest more than normally permitted in
federally taxable obligations for temporary, defensive purposes.
Each fund earns income at current money market rates. They stress
preservation of capital, liquidity, and income (tax-free income in the
case of Tax-Exempt Portfolio) and do not seek the higher yields or
capital appreciation that more aggressive investments may provide.
Each fund's yield will vary from day to day, and generally reflects
current short-term interest rates and other market conditions.
It is important to note that neither the funds' share prices nor
their yields are insured or guaranteed by the U.S. Government.
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 each fund's 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
the fund achieve its goal. Fund holdings are detailed in each
fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
municipalities, local and state governments, and other entities. These
securities may carry fixed, variable, or floating interest rates.
Money market securities may be structured to be or may
employ a trust or other form so that they are eligible
investments for money market funds. If a structure fails to
function as intended, adverse tax or investment consequences may
result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments 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, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the
entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing,
transportation, and utilities, the municipal markets can be affected
by conditions in those sectors. In addition, all municipal securities
may be affected by uncertainties regarding their tax status,
legislative changes, or rights of municipal securities holders. A
municipal security may be owned directly or through a participation
interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Likewise, securities for which
foreign entities provide credit or liquidity support may involve
different risks than those supported by domestic entities. Extensive
public information about the foreign entity may not be available, and
unfavorable political, economic, or governmental developments in the
foreign country involved could affect the repayment of principal or
payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
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.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
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 FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Each of Domestic Portfolio, Rated Money Market
Portfolio and Money Market Portfolio will invest more than
25% of its total assets in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Tax-Exempt Portfolio will not invest in a money
market fund. Tax-Exempt Portfolio does not currently intend to
invest in repurchase agreements. Treasury Only Portfolio,
Treasury Portfolio , Government Portfolio, D omestic
Portfolio , Rated Money Market Portfolio, and Money
Market Portfolio do not currently intend to invest in a money
market fund.
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
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: Each of Domestic Portfolio , Rated Money Market
Portfoli o and Money Market Portfolio may not invest more
than 5% of their total assets in any one issuer, except that each fund
may invest up to 25% of its total assets in the highest quality
securities of a single issuer for up to three business days. These
limitations do not apply to U.S. Government securities or to
securities of other investment companies.
With respect to 75% of its total assets, Tax-Exempt Portfolio
may not purchase a security if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer. This
limitation does not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Portfolio may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates , or through reverse repurchase
agreements, and may make additional investments while borrowings are
outstanding.
RESTRICTIONS: Each of Government Portfolio , Domestic
Portfolio , Rated Money Market Portfolio , and Money
Market Portfolio may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an
amount exceeding 331/3% of its total assets. Each of Treasury Only
Portfolio, Treasury Portfolio and Tax-Exempt
Portfolio may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
LENDING A fund may lend money to other funds advised by FMR or its
affiliates .
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets. Treasury Only Portfolio , Treasury
Portfolio , Government Portfolio , and Tax-Exempt
Portfolio do not lend money to other funds advised by FMR.
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.
Treasury Only Portfolio seeks as high a level of current income
as is consistent with the security of principal and liquidity, and to
maintain a constant net asset value per share (NAV) of $1.00.
Each of Treasury Portfolio, Government Portfolio ,
Domestic Portfolio, Rated Money Market Portfolio , and
Money Market Portfolio seeks to obtain as high a level of
current income as is consistent with the preservation of principal and
liquidity within the limitations prescribed for the fund.
Tax-Exempt Portfolio seeks to obtain as high a level of
interest income exempt from federal income tax as is consistent with a
portfolio of high-quality, short-term municipal obligations selected
on the basis of liquidity and stability of principal. The fund, under
normal conditions, will invest so that at least 80% of its income
distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Portfolio
may not purchase a security if, as a result, more than 5% of its
total assets would be invested in the securities of any one issuer.
This limitation does not apply to U.S. Government securities or to
securities of other investment companies.
Each of Domestic Portfolio , Rated Money Market Portfolio
and Money Market Portfolio will invest more than 25% of its
total assets in obligations of companies in the financial services
industry.
Each of Government Portfolio , Domestic Portfolio , Rated
Money Market Portfolio and Money Market Portfolio may
borrow only for temporary or emergency purposes, or engage in reverse
repurchase agreements, but not in an amount exceeding 331/3% of its
total assets. Tax-Exempt Portfolio may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in
that class's 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 an affiliate 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. Each
fund pays a fee at an annual rate of 0.20% of its average net
assets.
Prior to May 31, 1997 and January 1, 1998, Treasury Only Portfolio
and Rated Money Market Portfolio, respectively, each paid FMR a
management fee at an annual rate of 0.42% of its average net assets
and FMR paid all of the other expenses of each fund with limited
exceptions.
FIMM is the funds' sub-adviser and has primary responsibility for
managing their investments. FMR is responsible for providing other
management services. FMR pays FIMM 50% of its management fee (before
expense reimbursements) for FIMM's services. FMR paid FIMM and FMR
Texas Inc., the predecessor company to FIMM, annualized fees equal to
0.12% and 0.10%, respectively of Treasury Only Portfolio's, 0.10% and
0.10%, respectively of Treasury Portfolio's, 0.10% and 0.10%,
respectively of Government Portfolio's, 0.10% and 0.10%, respectively
of Domestic Portfolio's, 0.20% and 0.10%, respectively of Rated Money
Market Portfolio's, 0.10% and 0.10%, respectively of Money Market
Portfolio's, and 0.10% and 0.10%, respectively o f Tax-Exempt
Portfolio's average net assets for the fiscal year ended March 31,
1998.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class II of the Taxable Funds . Fidelity
Service Company, Inc. (FSC) calculates the net asset value per share
(NAV) and dividends for Class II of the Taxable Funds and
maintains the general accounting records for each Taxable Fund.
For the fiscal year ended March 31, 1998, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) for the Taxable Funds amounted to the following.
<TABLE>
<CAPTION>
<S> <C> <C>
Transfer Pricing and
Agency Bookkeeping
Fees Paid Fees Paid by
by Class II Fund
Treasury Only Portfolio 0.03 % * 0.01 % *
Treasury Portfolio 0.03 % 0.01 %
Government Portfolio 0.03 % 0.00 %
Domestic Portfolio 0.05 % 0.01 %
Rated Money Market Portfolio 0.00 % * 0.02 % *
Money Market Portfolio 0.02 % 0.01 %
</TABLE>
* ANNUALIZED
UMB is the transfer and service agent for Tax-Exempt Portfolio. UMB
has entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for
Class II of Tax-Exempt Portfolio. UMB has also entered into a
sub-agreement with FSC. FSC calculates the NAV and dividends for Class
II of Tax-Exempt Portfolio and maintains the general accounting
records for Tax-Exempt Portfolio. Under the terms of the
sub-agreements, FIIOC and FSC receive all related fees paid to UMB by
Class II of Tax-Exempt Portfolio.
For the fiscal year ended March 31, 1998, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) for Tax-Exempt Portfolio amounted to the following.
Transfer Agency Pricing and
Fees Paid by Bookkeeping
Class II Fees Paid by
Fund
Tax-Exempt Portfolio 0.03 % 0.01 %
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Class II of each fund has adopted a DISTRIBUTION AND SERVICE PLAN.
Under the plans, Class II of each fund is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class II shares. Class II of
each fund currently pays FDC a monthly distribution fee at an annual
rate of 0.15% of its average net assets throughout the month.
The Class II plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Class II shares, including payments made to investment
professionals that provide shareholder support services or engage in
the sale of Class II shares. Currently, the Board of Trustees of each
fund has authorized such payments.
YOUR ACCOUNT
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Class II is the class's NAV. Each fund
is managed to keep its NAV stable at $1.00. Class II shares are sold
without a sales charge.
Your shares will be purchased at the next NAV calculated after your
order is received in proper form . Class II's NAV is normally
calculated each business day at the time indicated in the table below.
Fund NAV Calculation
Times
(Eastern Time)
Treasury Only Portfolio 2:00 p.m.
Treasury Portfolio 5:00 p.m.
Government Portfolio 5:00 p.m.
Domestic Portfolio 5:00 p.m.
Rated Money Market Portfolio 5:00 p.m.
Money Market Portfolio 3:00 p.m.
Tax-Exempt Portfolio 12:00 noon
Each fund 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 the management of a fund.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business
on the day you place your order.
Share certificates are not available for Class II shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be
forwarded to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class
of any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks and Automated Clearing House payments will not be
accepted as a means of investment.
For wiring information and instructions, you should call the
investment professional through which you trade or if you trade
directly through Fidelity, call Fidelity Client Services at
1-800-843-3001. There is no fee imposed by the funds for wire
purchases. However, if you buy shares through an investment
professional, the investment professional may impose a fee for wire
purchases.
All wires must be received in proper form by the transfer agent
at the applicable fund's designated wire bank before the close of the
Federal Reserve Wire System on the day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large
purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000*
MINIMUM BALANCE $1,000,000
* THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF
YOUR AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET
FUNDS IS GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT
SERVICES FOR MORE INFORMATION REGARDING THIS WAIVER.
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.
THE PRICE TO SELL ONE SHARE of Class II is the class's
NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form . Class II's NAV is normally
calculated each business day at the times indicated in the
table on page .
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of
business on the day you place your order.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at
least $1,000,000 worth of shares in the account to keep it open.
You must designate on your account application the U.S. commercial
bank account(s) into which you wish the redemption proceeds to be
deposited. Fidelity Client Services will then notify you that this
feature has been activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should
send a letter of instruction, including a signature guarantee, to
Fidelity Client Services at the address shown on page 17 .
You should be able to obtain a signature guarantee from a bank,
broker, 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.
There is no fee imposed by the funds for wiring of redemption
proceeds. However, if you sell shares through an investment
professional, the investment professional may impose a fee for wire
redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System
to your bank account of record. If your redemption request is
received in proper form by the transfer agent before the NAV is
calculated, redemption proceeds will normally be wired on that day.
A fund reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
You are advised to place your trades as early in the day as possible,
and to provide advance notice to Fidelity Client Services for
large redemptions.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include
the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity Client Services at 1-800-843-3001 if you need
additional copies of financial reports, prospectuses or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for institutions that wish to open multiple
accounts (a master account and sub-accounts). You may be required to
enter into a separate agreement with FIIOC. Charges for these
services, if any, will be determined based on the level of services to
be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Income dividends
are declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and
are normally distributed on the first business day of the following
month. However, dividends relating to Class II shares redeemed if
you close yo ur account during the month may be distributed on
the day your a ccount is closed. Each fund reserves the right to
limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. Class II offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
same class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital
gain distributions, if any.
Dividends will be reinvested at each fund's Class II NAV on the last
day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the
funds could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt
Portfolio earns is distributed to shareholders as income
dividends. Interest that is federally tax-free remains tax-free when
it is distributed. Distributions from the Taxable Funds, however, 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
from these funds could also be taxed by the country in which you
reside.
For federal tax purposes, income and short-term capital gains
from each Taxable Fund are distributed as dividends and taxed as
ordinary income ; capital gain distributions, if any, are taxed
as long-term capital gains.
However, for shareholders of Tax-Exempt Portfolio , gain on the
sale of tax-free bonds results in taxable distributions. Short-term
capital gains and a portion of the gain on bonds purchased at a
discount are distributed as dividends and taxed as ordinary income;
capital gain distributions, if any, are taxed as long-term capital
gains.
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.
For the fiscal year ended March 31, 1998, 100% of Treasury Only
Portfolio's, 25.20% of Treasury Portfolio's and 18.44% of Government
Portfolio's, income distributions were derived from interest on
U.S. Government securities which is generally exempt from state income
tax.
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.
Every January, Fidelity will send you and the IRS a statement
showing the tax characterization of distributions paid to you
in the previous year.
A portion of Tax-Exempt Portfolio's dividends may be free from
state or local taxes. Income from investments in your state are often
tax-free to you. Each year, the transfer agent will send you a
breakdown of Tax-Exempt Portfolio's income from each state to
help you calculate your taxes.
During the fiscal year ended March 31, 1998, 100% of Tax-Exempt
Portfolio's income dividends was free from federal income tax
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
EACH FUND IS OPEN FOR BUSINESS each day that the Federal Reserve Bank
of Kansas City (Kansas City Fed) (for Tax-Exempt Portfolio ) or
the Federal Reserve Bank of New York (New York Fed) (for the Taxable
Funds), the NYSE and the principal bond markets (as recommended by
the Bond Market Association) are open. The following holiday
closings have been scheduled for 1998: New Year's Day, Martin Luther
King's Birthday, Presidents' Day , Good Friday, Memorial Day,
Independence Day (observed) , Labor Day, Columbus Day, Veterans
Day, Thanksgiving Day, and Christmas Day. Although FMR expects the
same holiday schedule to be observed in the future, at any time the
Kansas City Fed, the New York Fed or the NYSE may modify its holiday
schedule or the Bond Market Association may modify its
recommendation.
To the extent that portfolio securities are traded in other markets on
days when the Kansas City Fed or the New York Fed, the NYSE or the
principal bond markets are closed, each class's NAV may be
affected on days when investors do not have access to the fund to
purchase or redeem shares. Certain Fidelity funds may follow different
holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class II of
each fund is computed by adding Class II's pro rata share of the value
of the fund's investments, cash, and other assets, subtracting Class
II's pro rata share of the value of the fund's liabilities,
subtracting the liabilities allocated to Class II, and dividing the
result by the number of Class II shares of that fund that are
outstanding. Each fund values its portfolio securities on the basis of
amortized cost. This method minimizes the effect of changes in a
security's market value and helps each fund maintain a stable $1.00
share price.
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 OR
ELECTRONICALLY . Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable
security procedures designed to verify the identity of the
investor . Fidelity will request personalized security codes or
other information, and may also record calls. For transactions
conducted through the Internet, Fidelity recommends the use of an
Internet browser with 128-bit encryption. 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 Client Services for instructions.
Additional documentation may be required from corporations,
associations, and certain fiduciaries.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify
Fidelity Client Services in advance of large transactions.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received in proper
form . Note the following:
(small solid bullet) All of your purchases must be made by federal
funds wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received in proper
form by the close of the Federal Reserve Wire System on the day
of purchase, you could be liable for any losses or fees a fund
or the transfer agent has incurred or for interest and penalties.
(small solid bullet) Shares begin to earn dividends on the day of
purchase provided (i) you contact Fidelity Client Services and place
your order between 8:30 a.m. and the following times on page and (ii)
the fund's designated wire bank receives the wire in proper form
before the close of the Federal Reserve Wire System on that day.
(small solid bullet) On any day that the principal bond markets
close early, as recommended by the Bond Market Association, or the
Kansas City Fed (for Tax-Exempt Portfolio) or the New York Fed (for
the Taxable Funds) close early, a class may advance the time on that
day by which purchase orders must be placed so that shares earn
dividends on the day of purchase.
Fund Dividend Times
(Eastern Time)
Treasury Only Portfolio 2:00 p.m.
Treasury Portfolio 5:00 p.m.
Government Portfolio 5:00 p.m.
Domestic Portfolio 5:00 p.m.
Rated Money Market Portfolio 5:00 p.m.
Money Market Portfolio 3:00 p.m.
Tax-Exempt Portfolio 12:00 noon
The income declared for Treasury Portfolio , Government
Portfolio , Domestic Portfolio and Rated Money Market
Portfolio is based on estimates of net investment income for the
fund. Actual income may differ from estimates, and differences, if
any, will be included in the calculation of subsequent dividends.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper
form . Note the following:
(small solid bullet) Shares earn dividends through the day prior to
the day of redemption. On any day that the principal bond markets
close early (as recommended by the Bond Market Association) or the
Kansas City Fed (for Tax-Exempt Portfolio) or the New York Fed (for
the Taxable Funds) close early, a class may set a time after which
shares earn dividends through the day of redemption. Under such
circumstances, shares redeemed on a Friday or prior to a holiday
continue to earn dividends until the next business day.
(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.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 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.
THE TRANSFER AGENT 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 Class II shares
of any fund offered through this prospectus at no charge for Class II
shares of any other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at 1-800-843-3001.
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name, account number, the number of shares to be redeemed,
and the name of the fund and class to be purchased. Written requests
for exchange should be mailed to Fidelity Client Services at the
address on page 17 .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class II shares will be
redeemed at the next determined NAV after your order is received in
proper form . Shares of the fund to be acquired will be purchased
at its next determined NAV after redemption proceeds are made
available. You should note that, under certain circumstances, a fund
may take up to seven days to make redemption proceeds available for
the exchange purchase of shares of another fund. In addition, please
note the following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into must be
available 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 or class, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund.
(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.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
(Recycled logo) This prospectus is printed on recycled paper using
soy-based inks.
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 each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio
listing , or a copy of the Statement of Additional Information
(SAI) dated May 29, 1998 . The SAI has been filed with the
Securities and Exchange Commission (SEC) and is available along with
other related materials on the SEC's Internet Web Site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of either
document, contact Fidelity Client Services 82 Devonshire Street,
Boston, MA 02109 at 1-800-843-3001, or your investment professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
IMMIII-PRO-0598
702323
FIDELITY
INSTITUTIONAL
MONEY MARKET
FUNDS
TREASURY ONLY
PORTFOLIO
CLASS III
(FUND NUMBER 543)
TREASURY PORTFOLIO
CLASS III
(FUND NUMBER 696)
GOVERNMENT
PORTFOLIO
CLASS III
(FUND NUMBER 657)
DOMESTIC PORTFOLIO
CLASS III
(FUND NUMBER 691)
RATED MONEY
MARKET PORTFOLIO
CLASS III
(FUND NUMBER 652)
MONEY MARKET
PORTFOLIO
CLASS III
(FUND NUMBER 659)
TAX-EXEMPT
PORTFOLIO
CLASS III
(FUND NUMBER 684)
PROSPECTUS
MAY 29, 1998
(FIDELITY_LOGO_GRAPHIC)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS 2 WHO MAY WANT TO INVEST
2 EXPENSES Class III's yearly operating
expenses.
5 FINANCIAL HIGHLIGHTS A summary of
each fund's financial data.
12 PERFORMANCE
THE FUNDS IN DETAIL 12 CHARTER How each fund is organized.
12 INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
15 BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.
YOUR ACCOUNT 16 HOW TO BUY SHARES Opening an
account and making additional
investments.
17 HOW TO SELL SHARES Taking money out
and closing your account.
17 INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND ACCOUNT 17 DIVIDENDS, CAPITAL GAINS, AND TAXES
POLICIES
18 TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.
19 EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient
and economical way to invest in a professionally managed portfolio of
money market instruments.
Each fund is designed for investors who would like to earn current
income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only Portfolio , Treasury Portfolio and
Government Portfolio offers an added measure of safety with its
focus on U.S. Government or Treasury securities.
These funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a
portion of your investments.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
Class I shares do not have a sales charge and do not pay a
distribution fee. Class II shares do not have a sales charge, but do
pay a 0.15% distribution fee. Class III shares do not have a sales
charge, but do pay a 0.25% distribution fee. Because Class I shares
have no sales charge and do not pay a distribution fee, Class I shares
are expected to have a higher total return than Class II and Class III
shares. You may obtain more information about Class I and Class II
shares, which are not offered through this prospectus, from your
investment professional, or by calling Fidelity Client Services at
1-800-843-3001. Contact your investment professional to discuss which
class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Class III shares of a fund.
Sales charge on purchases and None
reinvested distributions
Deferred sales charge on redemptions None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR). In addition, each fund is responsible for certain other
expenses.
12b-1 fees are paid by Class III of each fund to the distributor for
services and expenses in connection with the distribution of Class III
shares of each fund
Class III's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown
of Expenses" on page ).
The following figures are based on historical expenses ,
adjusted to reflect current fees, of Class III of each fund and are
calculated as a percentage of average net assets of Class III of each
fund.
TREASURY ONLY PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
TREASURY PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
GOVERNMENT PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
DOMESTIC PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
RATED MONEY MARKET PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
MONEY MARKET PORTFOLIO
Management fee 0.18%A
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.43%A
TAX-EXEMPT PORTFOLIO
Management fee 0.20%
12b-1 fee (Distribution Fee) 0.25%
Other expenses 0.00%A
Total operating expenses 0.45%A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Class III shares of a fund,
assuming a 5% annual return and full redemption at the end of each
time period. Total expenses shown below include any shareholder
transaction expenses and Class III's annual operating expenses.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
Treasury Only $ 5 $ 14 $ 25 $ 57
Treasury $ 5 $ 14 $ 25 $ 57
Government $ 5 $ 14 $ 25 $ 57
Domestic $ 5 $ 14 $ 25 $ 57
Rated Money Market $ 5 $ 14 $ 25 $ 57
Money Market $ 4 $ 14 $ 24 $ 54
Tax-Exempt $ 5 $ 14 $ 25 $ 57
</TABLE>
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class III of each fund to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses and 12b-1 fees) , as
a percentage of its respective average net assets, exceed 0.20% (0.18%
for Money Market Portfolio) . If these agreements were not in
effect, the management fee, other expenses and total operating
expenses, as a percentage of average net assets, would have been the
following amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management Fee Other Expenses Total Operating
Class III Class III Expenses
Class III
Treasury Only Portfolio 0.20 % 0.14 % 0.59 %
Treasury Portfolio 0.20 % 0.05 % 0.50 %
Government Portfolio 0.20 % 0.12 % 0.57 %
Domestic Portfolio 0.20 % 0.11 % 0.56 %
Rated Money Market Portfolio 0.20 % 0.23 %B 0.68 %
Money Market Portfolio 0.20 % 0.07 % 0.52 %
Tax-Exempt Portfolio 0.20 % 0.17 % 0.62 %
</TABLE>
B BASED ON ESTIMATED EXPENSES DUE TO CHANGE IN MANAGEMENT FEE RATE
EFFECTIVE JANUARY 1, 1998.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Treasury
Portfolio , Government Portfolio , Domestic
Portfolio and Money Market Portfolio have been audited
by Price Waterhouse LLP, independent accountants. The financial
highlights tables that follow for Treasury Only Portfolio ,
Rated Money Market Portfolio and Tax-Exempt Portfolio
have been audited by Coopers & Lybrand L.L.P., independent
accountants. The funds' financial highlights, financial statements,
and reports of the auditors are included in the funds' Annual Report,
and are incorporated by reference into (are legally a part of) the
funds' SAI. Contact Fidelity Client Services (Client Services) for a
free copy of the Annual Report or the SAI.
TREASURY ONLY PORTFOLIO - CLASS III
Selected 2. 3.
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net asset $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
Income
from
Investment
Operations
Net .050 .048 .020
interest
income
Less
Distributions
From (.050) (.048) (.020)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.07% 4.90% 2.00%
returnB
Net $ 100,465 $ 36,006 $ 4,097
assets, end
of period
(000
omitted)
Ratio of .45%C .45%C .45%C,D
expenses to
average net
assets
Ratio of 4.96% 4.82% 4.86%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
TREASURY PORTFOLIO - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years 1998 1997 1996 1995 1994A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .052 .049 .054 .044 .012
interest
income
Less
Distributions
From (.052) (.049) (.054) (.044) (.012)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.29% 5.03% 5.50% 4.45% 1.21%
returnB
Net $ 2,999 $ 3,624 $ 1,435 $ 586 $ 5
assets, end
of period (In
millions)
Ratio of .45%C .45%C .46%C .50%C .50%C,D
expenses to
average net
assets
Ratio of 5.17% 4.93% 5.28% 4.91% 2.69%D
net interest
income to
average net
assets
</TABLE>
A OCTOBER 22, 1993 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO
MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
GOVERNMENT PORTFOLIO - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996 1995A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .052 .050 .054 .045
interest
income
Less
Distributions
From (.052) (.050) (.054) (.045)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.34% 5.11% 5.58% 4.57%
returnB
Net $ 674,582 $ 658,964 $ 194,489 $ 40,516
assets, end
of period
(000
omitted)
Ratio of .45%C .45%C .45%C .43%C,D
expenses to
average net
assets
Ratio of 5.21% 5.00% 5.30% 5.13%D
net interest
income to
average net
assets
</TABLE>
A APRIL 4, 1994 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO MARCH
31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
DOMESTIC PORTFOLIO - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996 1995A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .053 .050 .054 .035
interest
income
Less
Distributions
From (.053) (.050) (.054) (.035)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.38% 5.13% 5.56% 3.51%
returnB
Net $ 73,298 $ 121,709 $ 47,396 $ 26,545
assets, end
of period
(000
omitted)
Ratio of .45%C .45%C .47%C .50%C,D
expenses to
average net
assets
Ratio of 5.26% 5.02% 5.40% 5.14%D
net interest
income to
average net
assets
</TABLE>
A JULY 19, 1994 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO MARCH
31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
RATED MONEY MARKET PORTFOLIO - CLASS III
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .052 .050 .021
interest
income
Less
Distributions
From (.052) (.050) (.021)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.38% 5.12% 2.11%
returnB
Net $ 75,380 $ 16,651 $ 1,610
assets, end
of period
(000
omitted)
Ratio of .45%C .45%C .45%C,D
expenses to
average net
assets
Ratio of 5.29% 5.03% 5.01%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
MONEY MARKET PORTFOLIO - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996 1995 1994A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .053 .050 .055 .046 .011
interest
income
Less
Distributions
From (.053) (.050) (.055) (.046) (.011)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 5.41% 5.17% 5.61% 4.66% 1.08%
returnB
Net $ 487,808 $ 444,048 $ 229,530 $ 457,286 $ 89,463
assets, end
of period
(000
omitted)
Ratio of .43%C .43%C .45%C .50%C .50%C,D
expenses to
average net
assets
Ratio of 5.28% 5.06% 5.46% 4.94% 2.83%D
net interest
income to
average net
assets
</TABLE>
A NOVEMBER 17, 1993 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO
MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
TAX-EXEMPT PORTFOLIO - CLASS III
Selected
Per-Share
Data and
Ratios
Years 1998 1997 1996A
ended March
31
Net $ 1.000 $ 1.000 $ 1.000
asset value,
beginning of
period
Income
from
Investment
Operations
Net .033 .031 .013
interest
income
Less
Distributions
From (.033) (.031) (.013)
net interest
income
Net $ 1.000 $ 1.000 $ 1.000
asset value,
end of period
Total 3.34% 3.14% 1.30%
returnB
Net $ 37,272 $ 26,313 $ 988
assets, end
of period
(000
omitted)
Ratio of .45%C .45%C .45%C,D
expenses to
average net
assets
Ratio of 3.28% 3.09% 3.00%D
net interest
income to
average net
assets
A NOVEMBER 6, 1995 (COMMENCEMENT OF SALE OF CLASS III SHARES) TO
MARCH 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
D ANNUALIZED
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment 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. When a
yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a
money market fund over a recent seven-day period. Since money market
funds maintain a stable $1.00 share price, current seven-day yields
are the most common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in
financial reports, which are sent to all shareholders. For current
performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Each fund is a
diversified fund of Colchester Street Trust , an open-end
management investment company organized as a Delaware business trust
on June 20, 1991 .
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 periodically throughout the year to oversee
the funds' activities, review contractual arrangements with companies
that provide services to the funds, and review the funds' performance.
The trustees serve as trustees for other Fidelity funds . The
majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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. The transfer agent 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.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which handles their business affairs.
Fidelity Investments Money Management, Inc. (FIMM), located in
Merrimack, New Hampshire , has primary responsibility for providing
investment management services.
As of March 31, 1998 , FMR advised funds having approximately
36 million shareholder accounts with a total value of more than
$ 589 billion.
Fidelity investment personnel may invest in securities for their own
accounts 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 Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for Class III of Treasury
Only Portfolio , Treasury Portfolio , Government
Portfolio , Domestic Portfolio , Rated Money Market
Portfolio , and Money Market Portfolio (the Taxable
Funds) . UMB Bank, n.a. (UMB) is the transfer agent for Tax-Exempt
Portfolio , and is located at 1010 Grand Avenue, Kansas City,
Missouri. UMB employs FIIOC to perform transfer agent servicing
functions for Class III of Tax-Exempt Portfolio.
FMR Corp. is the ultimate parent company of FMR and FIMM .
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.
As of March 31, 1998, approximately 27.41% of Treasury Portfolio's
total outstanding shares were held by The Bank of New York.
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
TREASURY ONLY PORTFOLIO seeks to earn a high level of
current income while maintaining a stable $1.00 share price by
investing in high-quality, short-term securities. The fund invests
only in U.S. Treasury securities. The fund does not enter into
repurchase agreements or reverse repurchase agreements. The fund will
invest in those securities whose interest is specifically exempt from
state and local income taxes under federal law; such interest is not
exempt from federal income tax.
TREASURY PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Treasury securities and repurchase agreements for these securities.
The fund does not enter into reverse repurchase agreements.
GOVERNMENT PORTFOLIO seeks to earn a high level of
current income while maintaining a stable $1.00 share price by
investing in high-quality, short-term securities. The fund invests
only in U.S. Government securities and repurchase agreements for these
securities. The fund also may enter into reverse repurchase
agreements.
DOMESTIC PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic issuers, including U.S. Government securities and repurchase
agreements. Securities are "highest-quality" if rated in the highest
rating category by at least two nationally recognized rating services,
or by one if only one rating service has rated a security, or, if
unrated, determined to be of equivalent quality by FMR. The fund also
may enter into reverse repurchase agreements.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level
of current income while maintaining a stable $1.00 share price by
investing in high-quality, short-term securities. The fund invests
only in U.S. dollar-denominated money market securities of domestic
and foreign issuers rated in the highest rating category by at least
two nationally recognized rating services, U.S. Government securities,
and repurchase agreements. The fund also may enter into reverse
repurchase agreements.
MONEY MARKET PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in the
highest-quality U.S. dollar-denominated money market securities of
domestic and foreign issuers, including U.S. Government securities and
repurchase agreements. Securities are "highest-quality" if rated in
the highest rating category by at least two nationally recognized
rating services, or by one if only one rating service has rated a
security, or, if unrated, determined to be of equivalent quality by
FMR. The fund also may enter into reverse repurchase agreements.
TAX-EXEMPT PORTFOLIO seeks to earn a high level of current income
that is free from federal income tax while maintaining a stable $1.00
share price by investing in high-quality, short-term municipal
securities of all types, including securities structured so that they
are eligible investments for the fund. The fund invests in municipal
money market securities rated in the highest category by at least one
nationally recognized rating service and in one of the two highest
categories by another rating service if rated by more than one, or, if
unrated, determined to be of equivalent quality to the highest rating
category by FMR and may invest in securities structured so that they
are eligible investments for the fund. FMR normally invests the fund's
assets so that at least 80% of the fund's income distributions is free
from federal income tax. The fund does not currently intend to
purchase municipal securities whose interest is subject to the federal
alternative minimum tax.
FMR normally invests the fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. The fund also reserves the right to hold a substantial
amount of uninvested cash or to invest more than normally permitted in
federally taxable obligations for temporary, defensive purposes.
Each fund earns income at current money market rates. They stress
preservation of capital, liquidity, and income (tax-free income in the
case of Tax-Exempt Portfolio) and do not seek the higher yields or
capital appreciation that more aggressive investments may provide.
Each fund's yield will vary from day to day, and generally reflects
current short-term interest rates and other market conditions.
It is important to note that neither the funds' share prices nor
their yields are insured or guaranteed by the U.S. Government.
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 each fund's 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
the fund achieve its goal. Fund holdings are detailed in each
fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report, call 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by the U.S. Government, corporations, financial institutions,
municipalities, local and state governments, and other entities. These
securities may carry fixed, variable, or floating interest rates.
Money market securities may be structured to be or
may employ a trust or other form so that they are
eligible investments for money market funds. If a structure
fails to function as intended, adverse tax or investment
consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the
United States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt
instruments 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, U.S. Government securities such as those issued
by Fannie Mae are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the
entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care , housing,
transportation, and utilities, the municipal markets can be affected
by conditions in those sectors. In addition, all municipal
securities may be affected by uncertainties regarding their tax
status, legislative changes, or rights of municipal securities
holders. A municipal security may be owned directly or through a
participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Likewise, securities for which
foreign entities provide credit or liquidity support may involve
different risks than those supported by domestic entities. Extensive
public information about the foreign entity may not be available, and
unfavorable political, economic, or governmental developments in the
foreign country involved could affect the repayment of principal or
payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages,
loans, receivables, or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other money market securities, although stripped
securities may be more volatile. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the
U.S. Treasury.
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.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper,
certificates of deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment may
be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
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 FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services
industry are subject to various risks related to that industry, such
as government regulation, changes in interest rates, and exposure on
loans, including loans to foreign borrowers. If a fund invests
substantially in this industry, its performance may be affected by
conditions affecting the industry.
RESTRICTIONS: Each of Domestic Portfolio , Rated Money Market
Portfolio and Money Market Portfolio will invest more
than 25% of its total assets in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Tax-Exempt Portfoli o will not invest in a money
market fund. Tax-Exempt Portfolio does not currently intend to
invest in repurchase agreements. Treasury Only Portfolio,
Treasury Portfolio , Government Portfolio , Domestic
Portfolio , Rated Money Market Portfolio , and Money
Market Portfolio do not currently intend to invest in a money
market fund.
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
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: Each of Domestic Portfolio, Rated Money Market
Portfoli o and Money Market Portfolio may not invest more
than 5% of their total assets in any one issuer, except that each fund
may invest up to 25% of its total assets in the highest quality
securities of a single issuer for up to three business days. These
limitations do not apply to U.S. Government securities or to
securities of other investment companies.
With respect to 75% of its total assets, Tax-Exempt Portfolio
may not purchase a security if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer. This
limitation does not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Portfolio may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates , or through reverse repurchase
agreements, and may make additional investments while borrowings are
outstanding.
RESTRICTIONS: Each of Government Portfolio , Domestic
Portfolio , Rated Money Market Portfolio and Money Market
Portfolio may borrow only for temporary or emergency purposes,
or engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Each of Treasury Only
Portfolio , Treasury Portfolio and Tax-Exemp t
Portfolio may borrow only for temporary or emergency purposes, but
not in an amount exceeding 331/3% of its total assets.
LENDING. A fund may lend money to other funds advised by FMR or its
affiliates .
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets. Treasury Only Portfolio , Treasury
Portfolio , Government Portfolio , and Tax-Exempt
Portfolio do not lend money to other funds advised by FMR.
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.
Treasury Only Portfolio seeks as high a level of current income
as is consistent with the security of principal and liquidity, and to
maintain a constant net asset value per share (NAV) of $1.00.
Each of Treasury Portfolio, Government Portfolio ,
Domestic Portfolio , Rated Money Market Portfolio , and
Money Market Portfolio seeks to obtain as high a level of
current income as is consistent with the preservation of principal and
liquidity within the limitations prescribed for the fund.
Tax-Exempt Portfolio seeks to obtain as high a level of
interest income exempt from federal income tax as is consistent with a
portfolio of high-quality, short-term municipal obligations selected
on the basis of liquidity and stability of principal. The fund, under
normal conditions, will invest so that at least 80% of its income
distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Portfolio
may not purchase a security if, as a result, more than 5% of its
total assets would be invested in the securities of any one issuer.
This limitation does not apply to U.S. Government s ecurities
or to securities of other investment companies.
Each of Domestic Portfolio , Rated Money Market Portfoli o
and Money Market Portfolio will invest more than 25% of its
total assets in obligations of companies in the financial services
industry.
Each of Government Portfolio , Domestic Portfolio , Rated
Money Market Portfoli o and Money Market Portfolio may
borrow only for temporary or emergency purposes, or engage in reverse
repurchase agreements, but not in an amount exceeding 331/3% of its
total assets. Tax-Exempt Portfolio may borrow only for
temporary or emergency purposes, but not in an amount exceeding 331/3%
of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in
that class's 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 an affiliate 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 expense and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each
fund pays a fee at an annual rate of 0.20% of its average net
assets.
Prior to May 31, 1997 and January 1, 1998, Treasury Only Portfolio
and Rated Money Market Portfolio, respectively, each paid FMR a
management fee at an annual rate of 0.42% of its average net assets
and FMR paid all of the other expenses of each fund with limited
exceptions.
FIMM is the funds' sub-adviser and has primary responsibility for
managing their investments. FMR is responsible for providing other
management services. FMR pays FIMM 50% of its management fee (before
expense reimbursements) for FIMM's services. FMR paid FIMM and FMR
Texas Inc., the predecessor company to FIMM annualized fees equal to
0.12% and 0.10%, respectively of Treasury Only Portfolio's, 0.10% and
0.10%, respectively of Treasury Portfolio's, 0.10% and 0.10%,
respectively of Government Portfolio's, 0.10% and 0.10%, respectively
of Domestic Portfolio's, 0.20% and 0.10%, respectively of Rated Money
Market Portfolio's, 0.10% and 0.10%, respectively of Money Market
Portfolio's, and 0.10% and 0.10%, respectively of Tax-Exempt
Portfolio's average net assets for the fiscal year ended March 31,
1998.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class III shares of the Taxable Funds .
Fidelity Service Company, Inc. (FSC) calculates the net asset value
per share (NAV) and dividends for Class III of t he Taxable Funds
an d maintains the general accounting re cords for each
Taxable Fund.
For the fiscal year ended March 31, 1998, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) for the Taxable Funds amounted to the following.
Transfer Pricing and
Agency Fees Bookkeeping
Paid by Fees Paid by
Class III Fund
Treasury Only Portfolio 0.03%* 0.01%
Treasury Portfolio 0.02% 0.01%
Government Portfolio 0.03% 0.01%
Domestic Portfolio 0.03% 0.01%
Rated Money Market Portfolio 0.0 2 % * 0.0 2 % *
Money Market Portfolio 0.03% 0.01%
* ANNUALIZED
UMB is the transfer and service agent for Tax-Exempt Portfolio. UMB
has entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for
Class III of Tax-Exempt Portfolio. UMB has also entered into a
sub-agreement with FSC. FSC calculates the NAV and dividends for
Class III of Tax-Exempt Portfolio and maintains the general accounting
records for Tax-Exempt Portfolio. Under the terms of the
sub-agreements, FIIOC and FSC receive all related fees paid to UMB by
Class III of Tax-Exempt Portfolio.
For the fiscal year ended March 31, 1998, transfer agency and
pricing and bookkeeping fees paid (as a percentage of average net
assets) for Tax-Exempt Portfolio amounted to the following.
Transfer Agency Pricing and
Fees Paid by Bookkeeping
Class III Fees Paid by
Fund
Tax-Exempt Portfolio 0.03% 0.01%
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
Class III of each fund has adopted a DISTRIBUTION AND SERVICE PLAN.
Under the plans, Class III of each fund is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class III shares. Class III of
each fund currently pays FDC a monthly distribution fee at an annual
rate of 0.25% of its average net assets throughout the month.
The Class III plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the
distribution of Class III shares, including payments made to
investment professionals that provide shareholder support services or
engage in the sale of Class III shares. Currently, the Board of
Trustees of each fund has authorized such payments.
YOUR ACCOUNT
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Class III is the class's NAV.
Each fund is managed to keep its NAV stable at $1.00. Class III
shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your
order is received in proper form . Class III's NAV is normally
calculated each business day at the time indicated in the table below.
Fund NAV Calculation
Times
(Eastern Time)
Treasury Only Portfolio 2:00 p.m.
Treasury Portfolio 5:00 p.m.
Government Portfolio 5:00 p.m.
Domestic Portfolio 5:00 p.m.
Rated Money Market Portfolio 5:00 p.m.
Money Market Portfolio 3:00 p.m.
Tax-Exempt Portfolio 12:00 noon
Each fund 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.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of
business on the day you place your order.
Share certificates are not available for Class III shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be
forwarded to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class
of any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks and Automated Clearing House payments will not be
accepted as a means of investment.
For wiring information and instructions, you should call the
investment professional through which you trade or if you trade
directly through Fidelity, call Fidelity Client Services at
1-800-843-3001 . There is no fee imposed by the funds for wire
purchases. However, if you buy shares through an investment
professional, the investment professional may impose a fee for wire
purchases.
All wires must be received in proper form by the transfer agent
at the applicable fund's designated wire bank before the close of the
Federal Reserve Wire System on th e day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large
purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000*
MINIMUM BALANCE $1,000,000
* THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF
YOUR AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET
FUNDS IS GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT
SERVICES FOR MORE INFORMATION REGARDING THIS WAIVER.
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.
THE PRICE TO SELL ONE SHARE of Class III is the class's
NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form . Class III's NAV is normally
calculated each business day at the times indicated in the
table on page .
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of
business on the day you place your order.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at
least $1,000,000 worth of shares in the account to keep it open.
You must designate on your account application the U.S. commercial
bank account(s) into which you wish the redemption proceeds to be
deposited. Fidelity Client Services will then notify you that this
feature has been activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should
send a letter of instruction, including a signature guarantee, to
Fidelity Client Services at the address shown on page 16 .
You should be able to obtain a signature guarantee from a bank,
broker, 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.
There is no fee imposed by the funds for wiring of redemption
proceeds. However, if you sell shares through an investment
professional, the investment professional may impose a fee for wire
redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System
to your bank account of record. If your redemption request is received
in proper form by the transfer agent before the NAV is
calculated , redemption proceeds will normally be wired on that
day.
A fund reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
You are advised to place your trades as early in the day as possible,
and to provide advance notice to Fidelity Client Services for
large redemptions.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include
the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your
account registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
a fund. Call Fidelity Client Services at 1-800-843-3001 if you need
additional copies of financial reports, prospectuses or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for institutions that wish to open multiple
accounts (a master account and sub-accounts). You may be required to
enter into a separate agreement with FIIOC. Charges for these
services, if any, will be determined based on the level of services to
be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains, if any, to shareholders each year. Income dividends
are declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and
are normally distributed on the first business day of the following
month. However, dividends relating to Class III shares redeemed if you
close your account during the month may be distributed on the
day your account is closed. Each fund reserves the right to limit this
service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. Class III offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
same class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital
gain distributions, if any.
Dividends will be reinvested at each fund's Class III NAV on the last
day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the
funds could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt
Portfolio earns is distributed to shareholders as income
dividends. Interest that is federally tax-free remains tax-free when
it is distributed. Distributions from the Taxable Funds, however, 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
from these funds could also be taxed by the country in which you
reside.
For federal tax purposes, income and short-term capital gains
from the Taxable Funds are distributed as dividends and taxed as
ordinary income ; capital gain distributions, if any, are taxed
as long-term capital gains.
However, for shareholders of Tax-Exempt Portfolio , gain on the
sale of tax-free bonds results in taxable distributions. Short-term
capital gains and a portion of the gain on bonds purchased at a
discount are distributed as dividends and taxed as ordinary income;
capital gain distributions, if any, are taxed as long-term capital
gains.
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.
For the fiscal year ended March 31, 1998, 100% of Treasury Only
Portfolio's, 25.20% of Treasury Portfolio's and 18.44% of Government
Portfolio's, income distributions were derived from interest on
U.S. Government securities which is generally exempt from state income
tax.
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.
Every January, Fidelity will send you and the IRS a statement
showing the tax characterization of distributions paid to you
in the previous year.
A portion of Tax-Exempt Portfolio's dividends may be free from
state or local taxes. Income from investments in your state are often
tax-free to you. Each year, the transfer agent will send you a
breakdown of Tax-Exempt Portfolio's income from each state to
help you calculate your taxes.
During the fiscal year ended March 31, 1998, 100% of Tax-Exempt
Portfolio' s income dividends was free from federal income tax.
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
EACH FUND IS OPEN FOR BUSINESS each day that both the Federal
Reserve Bank of Kansas City (Kansas City Fed) (for Tax-Exempt
Portfolio) or the Federal Reserve Bank of New York (New York Fed) (for
the Taxable Funds), the NYSE and the principal bond markets (as
recommended by the Bond Market Association) are open. The following
holiday closings have been scheduled for 1998: New Year's Day, Martin
Luther King's Birthday, Presidents' Day, Good Friday, Memorial Day,
Independence Day (observed), Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day, and Christmas Day. Although FMR expects the same
holiday schedule to be observed in the future, at any time the Kansas
City Fed, the New York Fed or the NYSE may modify its holiday schedule
or the Bond Market Association may modify its recommendation.
To the extent that portfolio securities are traded in other markets
on days when the Kansas City Fed or the New York Fed, the NYSE or the
principal bond markets are closed, each class's NAV may be affected on
days when investors do not have access to the fund to purchase or
redeem shares. Certain Fidelity funds may follow different holiday
closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class III of
each fund is computed by adding Class III's pro rata share of the
value of the fund's investments, cash, and other assets, subtracting
Class III's pro rata share of the value of the fund's liabilities,
subtracting the liabilities allocated to Class III, and dividing the
result by the number of Class III shares of that fund that are
outstanding. Each fund values its portfolio securities on the basis of
amortized cost. This method minimizes the effect of changes in a
security's market value and helps each fund maintain a stable $1.00
share price.
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 OR
ELECTRONICALLY . Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable
security procedures designed to verify the identity of the investor.
Fidelity will request personalized security codes or other
information, and may also record calls. For transactions conducted
through the Internet, Fidelity recommends the use of an Internet
browser with 128-bit encryption. 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 Client Services for instructions. Additional documentation
may be required from corporations, associations, and certain
fiduciaries.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify
Fidelity Client Services in advance of large transactio ns.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received in proper
form . Note the following:
(small solid bullet) All of your purchases must be made by federal
funds wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received in proper form
by the close of the Federal Reserve Wire System on the day of
purchase , you could be liable for any losses or fees a fund or the
transfer agent has incurred or for interest and penalties.
(small solid bullet) Shares begin to earn dividends on the day of
purchase provided (i) you contact Fidelity Client Services and place
your order between 8:30 a.m. and the following times on page 30 and
(ii) the fund's designated wire bank receives the wire in proper form
before the close of the Federal Reserve Wire System on that day.
(small solid bullet) On any day the principal bond markets close
early, as recommended by the Bond Market Association, or the Kansas
City Fed (for Tax-Exempt Portfolio) or the New York Fed (for the
Taxable Funds) close early, a class may advance the time on that day
by which purchase orders must be placed so that shares earn dividends
on the day of purchase.
Fund Dividend Times
(Eastern Time)
Treasury Only Portfolio 2:00 p.m.
Treasury Portfolio 5:00 p.m.
Government Portfolio 5:00 p.m.
Domestic Portfolio 5:00 p.m.
Rated Money Market Portfolio 5:00 p.m.
Money Market Portfolio 3:00 p.m.
Tax-Exempt Portfolio 12:00 noon
The income declared for Treasury Portfolio, Government Portfolio,
Domestic Portfolio and Rated Money Market Portfolio is based on
estimates of net investment income for the fund. Actual income may
differ from estimates, and differences, if any, will be included in
the calculation of subsequent dividends .
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper
form . Note the following:
(small solid bullet) Shares earn dividends through the day prior to
the day of re demption. On any day that the principal bond markets
close early (as recommended by the Bond Market Association) or the
Kansas City Fed (for Tax-Exempt Portfolio) or the New York Fed (for
the Taxable Funds) close early, a class may set a time after which
shares earn dividends through the day of redemption. Under such
circumstances, shares redeemed on a Friday or prior to a holiday
continue to earn dividends until the next business day.
(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.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 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.
THE TRANSFER AGENT 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 Class III shares
of any fund offered through this prospectus at no charge for Class III
shares of any other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 .
BY MAIL. You may exchange shares on any business day by submitting
written instructions with an authorized signature which is on file for
that account. Written requests for exchanges should contain the fund
name, class name, account number, the number of shares to be redeemed,
and the name of the fund and class to be purchased. Written requests
for exchange should be mailed to Fidelity Client Services at the
address on page 16 .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class III shares will be
redeemed at the next determined NAV after your order is received in
proper form . Shares of the fund to be acquired will be purchased
at its next determined NAV after redemption proceeds are made
available. You should note that, under certain circumstances, a fund
may take up to seven days to make redemption proceeds available for
the exchange purchase of shares of another fund. In addition, please
note the following:
(small solid bullet) Exchanges will not be permitted until a completed
and signed account application is on file.
(small solid bullet) The fund or class you are exchanging into must
be available 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 or class
read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund.
(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.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
(Recycled Logo)This prospectus is printed on recycled paper using
soy-based inks.
SUPPLEMENT TO THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS I
MAY 29, 1998
PROSPECTUS
PROPOSED REORGANIZATION. The Board of Trustees of Rated Money Market
Portfolio has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Rated Money Market Portfolio and
Domestic Portfolio, a fund of Colchester Street Trust.
The Agreement provides for the transfer of all of the assets and the
assumption of all of the liabilities of Rated Money Market Portfolio
solely in exchange for an identical number of shares of the
corresponding class of Domestic Portfolio. Following such exchange,
Rated Money Market Portfolio will distribute such shares pro rata to
the corresponding class in liquidation of Rated Money Market Portfolio
as provided in the Agreement (the transactions contemplated by the
Agreement referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it
is approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Rated Money Market Portfolio will be
held on December 16, 1998, and approval of the Agreement will be voted
on at that time. In connection with the Meeting, Rated Money Market
Portfolio will be filing with the Securities and Exchange Commission
and delivering to its shareholders of record a Proxy Statement
describing the Reorganization and a Prospectus for Domestic Portfolio.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about January 21, 1999. If
shareholder approval of the Agreement is delayed due to failure to
meet a quorum or otherwise, the Reorganization will become effective,
if approved, as soon as practicable thereafter.
In the event Rated Money Market Portfolio shareholders fail to approve
the Agreement, Rated Money Market Portfolio will continue to engage in
business as a registered investment company and the Board of Trustees
will consider other proposals for the reorganization or liquidation of
the Fund.
Effective October 19, 1998, Rated Money Market Portfolio will be
closed to new accounts pending the Reorganization.
The following information replaces similar information found in
"Investment Principles and Risks" beginning on page 15.
TREASURY PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in U.S. Treasury
securities and repurchase agreements for these securities. The fund
does not enter into reverse repurchase agreements. The fund currently
intends to maintain a dollar-weighted average maturity of 60 days or
less.
GOVERNMENT PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Government securities and repurchase agreements for these securities.
The fund also may enter into reverse repurchase agreements. The fund
currently intends to maintain a dollar-weighted average maturity of 60
days or less.
DOMESTIC PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in the highest-quality
U.S. dollar-denominated money market securities of domestic issuers
rated in the highest rating category by at least two nationally
recognized rating services, U.S. Government securities and repurchase
agreements. The fund also may enter into reverse repurchase
agreements. The fund currently intends to maintain a dollar-weighted
average maturity of 60 days or less.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
dollar-denominated money market securities of domestic and foreign
issuers rated in the highest rating category by at least two
nationally recognized rating services, U.S. Government securities, and
repurchase agreements. The fund will not purchase any securities of
foreign issuers that mature beyond January 21, 1999, the anticipated
effective date of the Proposed Reorganization. The fund also may enter
into reverse repurchase agreements. The fund currently intends to
maintain a dollar-weighted average maturity of 60 days or less.
The following information supplements information found in "Investment
Principles and Risks" beginning on page 15.
THE FUNDS comply with industry-standard requirements for the quality,
maturity, and diversification of their investments, which are designed
to help maintain a stable $1.00 share price. Of course, there is no
guarantee that the funds will maintain a stable $1.00 share price. The
funds will purchase only high-quality securities that FMR believes
present minimal credit risks and will observe maturity restrictions on
securities they buy. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and
the value of your investment) to change.
SUPPLEMENT TO THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS II
MAY 29, 1998
PROSPECTUS
PROPOSED REORGANIZATION. The Board of Trustees of Rated Money Market
Portfolio has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Rated Money Market Portfolio and
Domestic Portfolio, a fund of Colchester Street Trust.
The Agreement provides for the transfer of all of the assets and the
assumption of all of the liabilities of Rated Money Market Portfolio
solely in exchange for an identical number of shares of the
corresponding class of Domestic Portfolio. Following such exchange,
Rated Money Market Portfolio will distribute such shares pro rata to
the corresponding class in liquidation of Rated Money Market Portfolio
as provided in the Agreement (the transactions contemplated by the
Agreement referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it
is approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Rated Money Market Portfolio will be
held on December 16, 1998, and approval of the Agreement will be voted
on at that time. In connection with the Meeting, Rated Money Market
Portfolio will be filing with the Securities and Exchange Commission
and delivering to its shareholders of record a Proxy Statement
describing the Reorganization and a Prospectus for Domestic Portfolio.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about January 21, 1999. If
shareholder approval of the Agreement is delayed due to failure to
meet a quorum or otherwise, the Reorganization will become effective,
if approved, as soon as practicable thereafter.
In the event Rated Money Market Portfolio shareholders fail to approve
the Agreement, Rated Money Market Portfolio will continue to engage in
business as a registered investment company and the Board of Trustees
will consider other proposals for the reorganization or liquidation of
the Fund.
Effective October 19, 1998, Rated Money Market Portfolio will be
closed to new accounts pending the Reorganization.
The following information replaces similar information found in
"Investment Principles and Risks" beginning on page 15.
TREASURY PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in U.S. Treasury
securities and repurchase agreements for these securities. The fund
does not enter into reverse repurchase agreements. The fund currently
intends to maintain a dollar-weighted average maturity of 60 days or
less.
GOVERNMENT PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Government securities and repurchase agreements for these securities.
The fund also may enter into reverse repurchase agreements. The fund
currently intends to maintain a dollar-weighted average maturity of 60
days or less.
DOMESTIC PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in the highest-quality
U.S. dollar-denominated money market securities of domestic issuers
rated in the highest rating category by at least two nationally
recognized rating services, U.S. Government securities and repurchase
agreements. The fund also may enter into reverse repurchase
agreements. The fund currently intends to maintain a dollar-weighted
average maturity of 60 days or less.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
dollar-denominated money market securities of domestic and foreign
issuers rated in the highest rating category by at least two
nationally recognized rating services, U.S. Government securities, and
repurchase agreements. The fund will not purchase any securities of
foreign issuers that mature beyond January 21, 1999, the anticipated
effective date of the Proposed Reorganization. The fund also may enter
into reverse repurchase agreements. The fund currently intends to
maintain a dollar-weighted average maturity of 60 days or less.
TAX-EXEMPT PORTFOLIO seeks to earn a high level of current income that
is free from federal income tax while maintaining a stable $1.00 share
price by investing in high-quality, short-term municipal securities of
all types, including securities structured so that they are eligible
investments for the fund. The fund invests in municipal money market
securities rated in the highest category by at least one nationally
recognized rating service and in one of the two highest categories by
another rating service if rated by more than one, or, if unrated,
determined to be of equivalent quality to the highest rating category
by FMR. FMR normally invests the fund's assets so that at least 80% of
the fund's income distributions is free from federal income tax. The
fund does not currently intend to purchase municipal securities whose
interest is subject to the federal alternative minimum tax.
The following information supplements information found in "Investment
Principles and Risks" beginning on page 15.
THE FUNDS comply with industry-standard requirements for the quality,
maturity, and diversification of their investments, which are designed
to help maintain a stable $1.00 share price. Of course, there is no
guarantee that the funds will maintain a stable $1.00 share price. The
funds will purchase only high-quality securities that FMR believes
present minimal credit risks and will observe maturity restrictions on
securities they buy. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and
the value of your investment) to change.
SUPPLEMENT TO THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS
III MAY 29, 1998
PROSPECTUS
PROPOSED REORGANIZATION. The Board of Trustees of Rated Money Market
Portfolio has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Rated Money Market Portfolio and
Domestic Portfolio, a fund of Colchester Street Trust.
The Agreement provides for the transfer of all of the assets and the
assumption of all of the liabilities of Rated Money Market Portfolio
solely in exchange for an identical number of shares of the
corresponding class of Domestic Portfolio. Following such exchange,
Rated Money Market Portfolio will distribute such shares pro rata to
the corresponding class in liquidation of Rated Money Market Portfolio
as provided in the Agreement (the transactions contemplated by the
Agreement referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it
is approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Rated Money Market Portfolio will be
held on December 16, 1998, and approval of the Agreement will be voted
on at that time. In connection with the Meeting, Rated Money Market
Portfolio will be filing with the Securities and Exchange Commission
and delivering to its shareholders of record a Proxy Statement
describing the Reorganization and a Prospectus for Domestic Portfolio.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about January 21, 1999. If
shareholder approval of the Agreement is delayed due to failure to
meet a quorum or otherwise, the Reorganization will become effective,
if approved, as soon as practicable thereafter.
In the event Rated Money Market Portfolio shareholders fail to approve
the Agreement, Rated Money Market Portfolio will continue to engage in
business as a registered investment company and the Board of Trustees
will consider other proposals for the reorganization or liquidation of
the Fund.
Effective October 19, 1998, Rated Money Market Portfolio will be
closed to new accounts pending the Reorganization.
The following information replaces similar information found in
"Investment Principles and Risks" beginning on page 15.
TREASURY PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in U.S. Treasury
securities and repurchase agreements for these securities. The fund
does not enter into reverse repurchase agreements. The fund currently
intends to maintain a dollar-weighted average maturity of 60 days or
less.
GOVERNMENT PORTFOLIO seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
Government securities and repurchase agreements for these securities.
The fund also may enter into reverse repurchase agreements. The fund
currently intends to maintain a dollar-weighted average maturity of 60
days or less.
DOMESTIC PORTFOLIO seeks to earn a high level of current income while
maintaining a stable $1.00 share price by investing in high-quality,
short-term securities. The fund invests only in the highest-quality
U.S. dollar-denominated money market securities of domestic issuers
rated in the highest rating category by at least two nationally
recognized rating services, U.S. Government securities and repurchase
agreements. The fund also may enter into reverse repurchase
agreements. The fund currently intends to maintain a dollar-weighted
average maturity of 60 days or less.
RATED MONEY MARKET PORTFOLIO seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
high-quality, short-term securities. The fund invests only in U.S.
dollar-denominated money market securities of domestic and foreign
issuers rated in the highest rating category by at least two
nationally recognized rating services, U.S. Government securities, and
repurchase agreements. The fund will not purchase any securities of
foreign issuers that mature beyond January 21, 1999, the anticipated
effective date of the Proposed Reorganization. The fund also may enter
into reverse repurchase agreements. The fund currently intends to
maintain a dollar-weighted average maturity of 60 days or less.
TAX-EXEMPT PORTFOLIO seeks to earn a high level of current income that
is free from federal income tax while maintaining a stable $1.00 share
price by investing in high-quality, short-term municipal securities of
all types, including securities structured so that they are eligible
investments for the fund. The fund invests in municipal money market
securities rated in the highest category by at least one nationally
recognized rating service and in one of the two highest categories by
another rating service if rated by more than one, or, if unrated,
determined to be of equivalent quality to the highest rating category
by FMR. FMR normally invests the fund's assets so that at least 80% of
the fund's income distributions is free from federal income tax. The
fund does not currently intend to purchase municipal securities whose
interest is subject to the federal alternative minimum tax.
The following information supplements information found in "Investment
Principles and Risks" beginning on page 15.
THE FUNDS comply with industry-standard requirements for the quality,
maturity, and diversification of their investments, which are designed
to help maintain a stable $1.00 share price. Of course, there is no
guarantee that the funds will maintain a stable $1.00 share price. The
funds will purchase only high-quality securities that FMR believes
present minimal credit risks and will observe maturity restrictions on
securities they buy. In general, securities with longer maturities are
more vulnerable to price changes, although they may provide higher
yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and
the value of your investment) to change.
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COLCHESTER STREET TRUST: DOMESTIC PORTFOLIO AND RATED MONEY MARKET
PORTFOLIO
INVESTMENTS AT MARCH 31, 1998 (UNAUDITED)
DOMESTIC PORTFOLIO RATED MONEY MARKET PORTFOLIO COMBINED
ANUALIZED ANUALIZED
YIELD AT DUE PRINCIPAL VALUE YIELD AT DUE PRINCIPAL VALUE PRINCIPAL VALUE CUSIP
TIME TIME
OF DATE AMOUNT (NOTE 1) OF PURCHASE DATE AMOUNT (NOTE 1) AMOUNT (NOTE 1)
PURCHASE
CERTIFICATES OF DEPOSIT -- 18.6%
DOMESTIC CERTIFICATES OF DEPOSIT -- 10.0%
CHASE MANHATTAN BANK (USA) DELAWARE
5.65 4/6/98 20,000,000 20,000,000 20,000,000 20,000,000 161991BA
CHASE MANHATTAN BANK (USA) DELAWARE
5.71 4/6/98 5,000,000 4,999,958 5,000,000 4,999,958 161991BE
FIRST NATIONAL BANK OF CHICAGO
5.70 3/3/99 15,000,000 14,993,382 15,000,000 14,993,382 9959903F
FLEET NATIONAL BANK
5.53 6/10/98 60,000,000 60,000,000 60,000,000 60,000,000 397998AB
FLEET NATIONAL BANK 5.53 6/10/98 10,000,000 10,000,000 10,000,000 10,000,000 397998AA
NATIONSBANK, NA
5.60 2/10/99 10,000,000 9,995,860 10,000,000 9,995,860 643998AM
SUNTRUST BANK, ATLANTA
5.52 5/6/98 30,000,000 29,999,425 5.52 5/6/98 10,000,000 9,999,808 40,000,000 39,999,233 93099PDE
WACHOVIA BANK, NA
5.62(A) 4/17/98 15,000,000 14,994,812 15,000,000 14,994,812 92976PFD
TOTAL DOMESTIC
CERTIFICATES OF DEPOSIT 154,983,437 19,999,808 174,983,245
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.3%
ABN--AMRO BANK NV
5.54 2/2/99 5,000,000 4,998,351 5,000,000 4,998,351 032993RU
4,998,351 4,998,351
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 6.2%
AUSTRALIA & NEW ZEALAND BANKING GROUP
5.70 4/2/98 5,000,000 5,000,004 5,000,000 5,000,004 0525289U
BANK OF MONTREAL, CANADA
5.57 4/6/98 5,000,000 5,000,000 5,000,000 5,000,000 063990CJ
BANK OF MONTREAL, CANADA
5.52 5/4/98 5,000,000 5,000,000 5,000,000 5,000,000 063990CC
BANK OF NOVA SCOTIA 5.97 7/21/98 1,000,000 999,530 1,000,000 999,530 669991KB
BANK OF TOKYO - MITSUBISHI LTD. 6.03 4/20/98 9,000,000 9,000,000 9,000,000 9,000,000 88999HEM
BANQUE NATIONALE DE PARIS 5.52 5/5/98 5,000,000 5,000,000 5,000,000 5,000,000 055992YE
BARCLAYS BANK, PLC 5.52 5/13/98 5,000,000 5,000,000 5,000,000 5,000,000 06799MET
BARCLAYS BANK, PLC 5.52 5/20/98 7,000,000 7,000,000 7,000,000 7,000,000 06799MEU
BAYERISCHE HYPOTHEKEN--UND WECHSEL 5.56 5/11/98 5,000,000 5,000,000 5,000,000 5,000,000 07299GDK
BAYERISCHE VEREINSBANK AG 5.66 5/4/98 5,000,000 5,000,000 5,000,000 5,000,000 072992LC
CREDIT AGRICOLE INDOSUEZ 5.52 5/20/98 2,000,000 2,000,000 2,000,000 2,000,000 22799HDD
DEUTSCHE BANK, AG 5.58 4/15/98 6,000,000 5,999,718 6,000,000 5,999,718 252999DL
DEUTSCHE BANK, AG 5.52 8/3/98 5,000,000 5,000,000 5,000,000 5,000,000 252999DC
DRESDNER BANK, AG 5.56 4/6/98 5,000,000 5,000,000 5,000,000 5,000,000 261990NQ
NATIONAL WESTMINSTER BANK, PLC 6.00 6/23/98 3,000,000 2,999,420 3,000,000 2,999,420 638990PC
NATIONAL WESTMINSTER BANK, PLC 5.89 7/22/98 5,000,000 4,999,186 5,000,000 4,999,186 638990PH
NATIONAL WESTMINSTER BANK, PLC 5.97 8/7/98 3,000,000 2,998,654 3,000,000 2,998,654 638990PM
ROYAL BANK OF CANADA 5.60 2/10/99 5,000,000 4,997,102 5,000,000 4,997,102 780990GH
SOCIETE GENERALE, FRANCE 5.58 6/8/98 5,000,000 5,000,000 5,000,000 5,000,000 85899PJD
SOCIETE GENERALE, FRANCE 5.53 8/4/98 5,000,000 5,000,000 5,000,000 5,000,000 85899PFN
SOCIETE GENERALE, FRANCE 5.55 8/24/98 5,000,000 5,000,000 5,000,000 5,000,000 85899PGT
SWISS BANK CORP. 5.97 8/28/98 2,000,000 1,999,610 2,000,000 1,999,610 8709905Q
SWISS BANK CORP. 5.75 3/24/99 5,000,000 4,995,229 5,000,000 4,995,229 8709906E
TOTAL NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS 107,988,453 107,988,453
PORTLAND BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.1%
BANK OF NOVA SCOTIA 6.20 4/1/98 2,000,000 2,000,000 2,000,000 2,000,000 669991HV
2,000,000 2,000,000
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 2.0%
BANCO BILBAO VIZCAYA, SA 5.65 4/7/98 2,000,000 2,000,003 2,000,000 2,000,003 05999MCH
BARCLAYS BANK, PLC 5.80 4/23/98 5,000,000 5,000,000 5,000,000 5,000,000 06799MEA
NATIONAL AUSTRALIA BANK LTD. 5.72 4/14/98 5,000,000 4,999,930 5,000,000 4,999,930 632990AY
NATIONAL WESTMINSTER BANK, PLC 5.52 4/6/98 7,000,000 6,999,999 7,000,000 6,999,999 638990QH
NORDDEUTSCHE LANDESBANK GIROZENTRALE 5.56 4/15/98 10,000,000 9,999,604 10,000,000 9,999,604 65599BBK
WESTDEUTSCHE LANDESBANK GIROZENTRALE 5.52 6/4/98 6,000,000 6,000,105 6,000,000 6,000,105 957991SS
TOTAL LONDON BRANCH, EURODOLLAR, FOREIGN BANKS 34,999,641 34,999,641
TOTAL CERTIFICATES OF DEPOSIT
154,983,437 169,986,253 324,969,690
COMMERCIAL PAPER -- 38.2%
AMERICAN EXPRESS CREDIT CORP.
5.56 4/7/98 25,000,000 24,976,958 25,000,000 24,976,958 025990SW
AMERICAN EXPRESS CREDIT CORP.
5.56 4/8/98 25,000,000 24,973,118 25,000,000 24,973,118 025990SX
AMERICAN EXPRESS CREDIT CORP.
5.59 5/14/98 5,000,000 4,966,854 5,000,000 4,966,854 025990TC
ASPEN FUNDING CORP. 5.60 4/15/98 5,000,000 4,989,189 5,000,000 4,989,189 04699XBW
ASPEN FUNDING CORP. 5.59 4/16/98 15,000,000 14,965,313 15,000,000 14,965,313 04699XBX
ASSET SECURITIZATION COOP. CORP.
5.58 5/7/98 7,000,000 6,961,220 7,000,000 6,961,220 04599RHF
ASSET SECURITIZATION COOP. CORP. 5.59 4/14/98 2,000,000 1,995,992 2,000,000 1,995,992 04599RGY
ASSET SECURITIZATION COOP. CORP. 5.52 5/8/98 2,000,000 1,988,808 2,000,000 1,988,808 04599RGP
ASSOCIATES CORP. OF NORTH AMERICA
5.53 5/18/98 10,000,000 9,928,717 5.53 5/18/98 5,000,000 4,964,358 15,000,000 14,893,075 04699JLP
ASSOCIATES CORP. OF NORTH AMERICA
5.53 5/20/98 5,000,000 4,962,842 5,000,000 4,962,842 04699JLS
BEAR STEARNS COS., INC.
5.55 5/8/98 10,000,000 9,943,781 10,000,000 9,943,781 07399H2P
BEAR STEARNS COS., INC.
5.59 5/20/98 5,000,000 4,962,297 5,000,000 4,962,297 07399H2Y
BEAR STEARNS COS., INC. 5.59 6/11/98 5,000,000 4,945,567 5,000,000 4,945,567 07399H2W
BENEFICIAL CORP.
5.52 5/13/98 19,000,000 18,879,857 19,000,000 18,879,857 08199BFX
BENEFICIAL CORP.
5.56 5/13/98 9,000,000 8,941,620 9,000,000 8,941,620 08199BGF
BMW US CAPITAL CORP. 5.65 5/26/98 2,000,000 1,983,103 2,000,000 1,983,103 06399TGU
BTAB HOLDINGS FUNDING CORP.
5.65 4/20/98 10,000,000 9,970,286 10,000,000 9,970,286 07099KAC
BTAB HOLDINGS FUNDING CORP. 5.65 4/22/98 5,000,000 4,983,579 5,000,000 4,983,579 07099KAB
CAISSE DES DEPOTS ET CONSIGNS 5.57 4/28/98 5,000,000 4,979,225 5,000,000 4,979,225 12799EEL
CHASE MANHATTAN CORP.
5.57 5/21/98 20,000,000 19,847,222 20,000,000 19,847,222 16161A9E
CIESCO, L.P.
5.53 5/14/98 10,000,000 9,935,483 10,000,000 9,935,483 1779966N
CIT GROUP, INC. 5.82 6/25/98 5,000,000 4,933,299 5,000,000 4,933,299 1729904M
CITIBANK CREDIT CARD MASTER
TRUST I (DAKOTA CERTIFICATE
5.53 4/22/98 9,000,000 8,971,388 9,000,000 8,971,388 23499JLK
PROGRAM)
CITIBANK CREDIT CARD MASTER
TRUST I (DAKOTA CERTIFICATE
5.54 5/15/98 5,000,000 4,966,572 5,000,000 4,966,572 23499JMA
PROGRAM)
CITIBANK CREDIT CARD MASTER
TRUST I (DAKOTA CERTIFICATE 5.54 4/16/98 19,000,000 18,956,617 19,000,000 18,956,617 23499JLP
PROGRAM)
COMMERCIAL CREDIT GROUP, INC.
5.57 5/26/98 10,000,000 9,916,125 10,000,000 9,916,125 201997BY
CORESTATES BANK
5.62(A) 4/2/98 4,000,000 4,000,000 4,000,000 4,000,000 2186X8CA
CORESTATES BANK
5.63(A) 4/13/98 10,000,000 10,000,000 10,000,000 2186X8CF
10,000,000
DELAWARE FUNDING CORPORATION
5.57 5/20/98 5,143,000 5,104,359 5,143,000 5,104,359 24699AEW
EIGER CAPITAL CORP. 5.54 4/13/98 4,940,000 4,930,943 4,940,000 4,930,943 27699BCD
ENTERPRISE FUNDING CORP.
5.55 4/13/98 3,389,000 3,382,787 3,389,000 3,382,787 29399H7Y
ENTERPRISE FUNDING CORP. 5.59 5/13/98 5,000,000 4,967,742 5,000,000 4,967,742 29399H8U
FORD MOTOR CREDIT CO. 5.58 4/7/98 5,000,000 4,995,417 5,000,000 4,995,417 34599XMN
FORD MOTOR CREDIT CO. 5.53 4/10/98 9,986,300 10,000,000 9,986,300 34599XMT
10,000,000
FORD MOTOR CREDIT CO. 5.53 5/11/98 5,000,000 4,969,667 5,000,000 4,969,667 34599XMY
GENERAL ELECTRIC CAPITAL CORP.
5.51 6/4/98 10,000,000 9,904,000 10,000,000 9,904,000 36999HKG
GENERAL ELECTRIC CAPITAL CORP.
5.53 5/13/98 30,000,000 29,811,058 30,000,000 29,811,058 36999HLW
GENERAL ELECTRIC CAPITAL CORP.
5.54 8/6/98 10,000,000 9,809,853 10,000,000 9,809,853 36999HKX
GENERAL ELECTRIC CAPITAL CORP. 5.79 4/7/98 5,000,000 4,995,333 5,000,000 4,995,333 36999HEQ
GENERAL ELECTRIC CAPITAL CORP. 5.54 6/3/98 5,000,000 4,952,313 5,000,000 4,952,313 36999HLE
GENERAL ELECTRIC CAPITAL CORP. 5.54 8/4/98 10,000,000 9,812,847 10,000,000 9,812,847 36999HKW
GENERAL ELECTRIC CAPITAL SERVICES, INC.
5.73 4/27/98 5,000,000 4,979,886 5,000,000 4,979,886 36959C9R
GENERAL ELECTRIC CO.
5.50 6/4/98 10,000,000 9,904,178 10,000,000 9,904,178 369999HH
GENERAL ELECTRIC CO.
5.53 4/30/98 10,000,000 9,955,936 10,000,000 9,955,936 369999HM
GENERAL MOTORS ACCEPTANCE CORP.
5.56 5/13/98 10,000,000 9,936,678 10,000,000 9,936,678 50899ACX
GENERAL MOTORS ACCEPTANCE CORP.
5.57 5/28/98 20,000,000 19,826,467 20,000,000 19,826,467 50899ACQ
GENERAL MOTORS ACCEPTANCE CORP.
5.58 4/22/98 15,000,000 14,951,525 5.58 4/22/98 5,000,000 4,983,842 20,000,000 19,935,367 50899ACW
GENERAL MOTORS ACCEPTANCE CORP. 5.57 5/27/98 5,000,000 4,957,375 5,000,000 4,957,375 50899ACP
GENERAL MOTORS CORP.
5.61 4/27/98 5,000,000 4,979,850 5,000,000 4,979,850 3704429H
GOLDMAN SACHS GROUP, L.P.
5.69 4/13/98 10,000,000 9,981,333 5.69 4/13/98 9,981,333 20,000,000 19,962,666 696992SR
10,000,000
GTE CORP.
5.76 4/27/98 2,900,000 2,887,999 2,900,000 2,887,999 362991QY
GTE CORP.
5.77 4/20/98 4,000,000 3,987,861 4,000,000 3,987,861 362991RC
IBM CREDIT CORP. 5.57 4/27/98 5,000,000 4,980,067 5,000,000 4,980,067 449991JG
KITTY HAWK FUNDING CORP.
5.58 5/13/98 2,927,000 2,907,945 2,927,000 2,907,945 49999VAU
MERRILL LYNCH & CO., INC.
5.59 5/26/98 20,000,000 19,831,639 20,000,000 19,831,639 59099GSK
MERRILL LYNCH & CO., INC.
5.59 6/15/98 20,000,000 19,770,417 20,000,000 19,770,417 59099GSP
MONSANTO CO.
5.51 7/9/98 5,300,000 5,221,587 5,300,000 5,221,587 611996KT
MONSANTO CO.
5.53 8/13/98 10,000,000 9,800,117 10,000,000 9,800,117 611996KX
MONSANTO CO.
5.56 8/18/98 4,000,000 3,916,600 4,000,000 3,916,600 611996LB
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
5.60 6/3/98 15,000,000 14,855,100 5.60 6/3/98 5,000,000 4,951,700 20,000,000 19,806,800 61799EUT
NATIONWIDE BUILDING SOCIETY 5.68 4/7/98 5,000,000 4,995,333 5,000,000 4,995,333 638993LW
NEW CENTER ASSET TRUST
5.51 4/22/98 5,000,000 4,984,133 5,000,000 4,984,133 643995RU
NEW CENTER ASSET TRUST
5.54 5/15/98 5,000,000 4,966,756 5.54 5/15/98 3,000,000 2,980,053 8,000,000 7,946,809 643995RT
NEW CENTER ASSET TRUST
5.55 5/18/98 15,000,000 14,892,879 5.55 5/18/98 5,000,000 4,964,293 20,000,000 19,857,172 643995SD
NEW CENTER ASSET TRUST
5.58 5/4/98 30,000,000 29,847,650 30,000,000 29,847,650 643995SN
NORWEST FINANCIAL, INC.
5.51 5/15/98 10,000,000 9,933,878 10,000,000 9,933,878 66999BBR
PHH CORP.
5.61 5/26/98 5,000,000 4,957,146 5,000,000 4,957,146 71999HHU
PREFERRED RECEIVABLES
FUNDING CORP.
5.55 4/15/98 3,060,000 3,053,455 3,060,000 3,053,455 74099SSL
PREFERRED RECEIVABLES
FUNDING CORP.
5.58 4/6/98 5,325,000 5,320,895 5,325,000 5,320,895 74099STD
THREE RIVERS FUNDING CORP.
5.58 4/21/98 4,000,000 3,987,667 4,000,000 3,987,667 88599SBE
TOTAL COMMERCIAL PAPER 504,755,974 162,089,608 666,845,582
FEDERAL AGENCIES -- 1.7%
FANNIE MAE - AGENCY COUPONS
5.59(A) 6/12/98 15,000,000 14,998,570 5.90(A) 6/12/98 5,000,000 4,999,523 20,000,000 19,998,093 31364CSN
FANNIE MAE - AGENCY COUPONS
6.06 4/15/98 10,000,000 9,999,559 10,000,000 9,999,559 31364CE5
TOTAL FEDERAL AGENCIES 24,998,129 4,999,523 29,997,652
BANK NOTES -- 16.0%
BANK OF AMERICA NATIONAL TRUST
& SAVINGS, SAN FRANCISCO
5.51 7/27/98 25,000,000 25,000,000 25,000,000 25,000,000 06399AGW
BANK OF AMERICA NATIONAL TRUST
& SAVINGS, SAN FRANCISCO
5.52 7/13/98 13,000,000 13,001,029 13,000,000 13,001,029 06399AHC
BANK ONE - COLUMBUS
5.57(A) 4/7/98 8,000,000 7,998,936 8,000,000 7,998,936 06420UAJ
BANKBOSTON NA
5.71 4/1/98 9,000,000 9,000,000 9,000,000 9,000,000 06999HAK
BANKONE, MILWAUKEE
5.62(A) 6/19/98 17,000,000 17,004,319 17,000,000 17,004,319 06421VAD
CORESTATES BANK
5.63(A) 4/6/98 20,000,000 20,000,000 20,000,000 20,000,000 2186W2BS
CORESTATES BANK
5.65 4/14/98 10,000,000 10,000,000 10,000,000 10,000,000 2186W2AD
FIRST BANK NA - MINNESOTA
5.65(A) 4/15/98 5,000,000 4,998,885 5,000,000 4,998,885 31925JBB
FIRST NATIONAL BANK OF CHICAGO, IL
5.70 2/16/99 18,000,000 17,971,058 18,000,000 17,971,058 9959903E
KEY BANK, NATIONAL ASSOCIATION
5.59(A) 4/1/98 15,000,000 14,994,882 15,000,000 14,994,882 49306BEL
KEY BANK, NATIONAL ASSOCIATION
5.64(A) 4/23/98 4,000,000 3,998,491 4,000,000 3,998,491 49306BDT
KEY BANK, NATIONAL ASSOCIATION
5.64(A) 4/24/98 6,000,000 5,998,906 6,000,000 5,998,906 49306BDD
KEY BANK, NATIONAL ASSOCIATION
5.94 9/17/98 15,000,000 14,997,341 15,000,000 14,997,341 49399UAS
MORGAN GUARANTY TRUST CO., NY
5.85 8/31/98 3,000,000 3,000,579 3,000,000 3,000,579 6189978L
MORGAN GUARANTY TRUST CO., NY
5.97 8/31/98 15,000,000 14,997,612 15,000,000 14,997,612 6189978K
NATIONAL CITY BANK - KENTUCKY
5.64(A) 4/6/98 10,000,000 9,995,017 10,000,000 9,995,017 63536QAE
NATIONAL CITY BANK - PENNSYLVANIA
5.64 4/2/98 5,000,000 4,999,249 5,000,000 4,999,249 63599KAA
NATIONSBANK, NA
5.54 10/19/9 20,000,000 20,000,000 20,000,000 20,000,000 643998AL
NATIONSBANK, NA
5.54 12/22/9 15,000,000 15,027,625 15,000,000 15,027,625 643998AJ
NORTHERN TRUST CO., CHICAGO
5.69(A) 4/1/98 3,000,000 2,999,491 5.69(A) 4/1/98 5,000,000 4,999,151 8,000,000 7,998,642 66586GBL
PNC BANK, NA
5.58(A) 4/16/98 15,000,000 14,993,068 15,000,000 14,993,068 69347KEX
PNC BANK, NA
5.64(A) 4/27/98 3,000,000 3,000,994 3,000,000 3,000,994 69347KCS
PNC BANK, NA
5.65(A) 4/27/98 3,000,000 2,999,731 3,000,000 2,999,731 69347KDT
SOUTHTRUST BANK, ALABAMA
5.65(A) 4/13/98 5,000,000 4,998,700 5.65(A) 4/13/98 1,000,000 999,740 6,000,000 5,998,440 8447HAAW
US BANK, NA
5.64(A) 4/15/98 5,000,000 4,998,400 5.64(A) 4/15/98 1,000,000 999,680 6,000,000 5,998,080 90331JAA
WACHOVIA BANK, NA
5.49 11/13/9 5,000,000 4,989,277 5,000,000 4,989,277 93999PAE
TOTAL BANK NOTES 271,963,590 6,998,571 278,962,161
MASTER NOTES -- 5.2%
GOLDMAN SACHS GROUP, LP (C)
5.69(A) 6/13/98 40,000,000 40,000,000 5.69(A) 6/13/98 5,000,000 5,000,000 45,000,000 45,000,000 696992ST
GOLDMAN SACHS GROUP, LP (C)
5.63(A) 5/4/98 2,000,000 2,000,000 2,000,000 2,000,000 696992RX
J.P. MORGAN SECURITIES, INC.
5.65(A) 4/7/98 26,000,000 26,000,000 26,000,000 26,000,000 61999PVS
J.P. MORGAN SECURITIES, INC.
5.66(A) 4/7/98 12,000,000 12,000,000 12,000,000 12,000,000 61999PNS
SUNTRUST BANKS, INC.
5.64(A) 4/7/98 5,000,000 5,000,000 5,000,000 5,000,000 8679149S
TOTAL MASTER NOTES 85,000,000 5,000,000 90,000,000
MEDIUM--TERM NOTES -- 4.8%
BENEFICIAL CORP.
5.55(A) 4/11/98 2,000,000 1,999,798 2,000,000 1,999,798 08172MFG
GENERAL MOTORS ACCEPTANCE CORP.
5.87 5/18/98 5,000,000 5,009,471 5,000,000 5,009,471 37042NRC
MERRILL LYNCH & CO., INC.
5.66(A) 4/6/98 2,000,000 1,999,964 5.66(A) 4/6/98 1,000,000 999,982 3,000,000 2,999,946 59018STV
MERRILL LYNCH & CO., INC.
5.75(A) 4/1/98 5,000,000 4,999,750 5.75(A) 4/1/98 3,000,000 2,999,850 8,000,000 7,999,600 59018SXD
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
5.60 4/1/98 10,000,000 10,000,253 10,000,000 10,000,253 61745EKP
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
5.62 4/1/98 5,000,000 4,999,865 5,000,000 4,999,865 61745EKP
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
5.67(A) 4/1/98 15,000,000 15,000,000 5.67(A) 4/1/98 5,000,000 5,000,000 20,000,000 20,000,000 61745ELF
NEW YORK LIFE INSURANCE CO.
5.89(A) 6/23/98 15,000,000 15,000,000 15,000,000 15,000,000 64952G9B
NORWEST CORP.
5.67(A) 4/22/98 9,000,000 9,000,000 9,000,000 9,000,000 66899CDY
PACIFIC MUTUAL LIFE INSURANCE CO.
5.95(A) 6/9/98 3,000,000 3,000,000 3,000,000 3,000,000 694995AE
(B)
TRANSAMERICA LIFE INSURANCE & ANNUITY CO.
5.70(A) 6/16/98 3,000,000 3,000,000 3,000,000 3,000,000 90899FAJ
TOTAL MEDIUM--TERM NOTES 74,009,101 8,999,832 83,008,933
SHORT--TERM NOTES -- 5.3%
CAPITAL ONE FUNDING CORP. (1994--B)
5.63(A) 4/7/98 3,899,000 3,899,000 3,899,000 3,899,000 14040G9B
CAPITAL ONE FUNDING CORP. (1994--E)
5.63(A) 4/7/98 2,225,000 2,225,000 2,225,000 2,225,000 14040G9G
CAPITAL ONE FUNDING CORP. (1995--D)
5.63(A) 4/7/98 2,792,000 2,792,000 2,792,000 2,792,000 14040G9N
CAPITAL ONE FUNDING CORP. (1996--G)
5.63(A) 4/7/98 3,971,000 3,971,000 3,971,000 3,971,000 14040GAW
CAPITAL ONE FUNDING CORP. (1997--D)
5.63(A) 4/7/98 5,000,000 5,000,000 5,000,000 5,000,000 14040GBE
CAPITAL ONE FUNDING CORP. (1997--F)
5.63(A) 4/7/98 5,000,000 5,000,000 5,000,000 5,000,000 14040GBC
CAPITAL ONE FUNDING CORP. (1997--G)
5.63(A) 4/7/98 8,000,000 8,000,000 8,000,000 8,000,000 14040GBF
LIQUID ASSET BACKED SECURITIES TRUST (1997--5) (B)
5.67(A) 4/17/98 4,000,000 4,000,000 4,000,000 4,000,000 535912AT
SMM TRUST (1997--I) (B)
5.69(A) 4/29/98 4,000,000 4,000,000 4,000,000 4,000,000 784568CL
SMM TRUST (1997--P) (B)
5.69(A) 4/16/98 2,000,000 2,000,000 5.69(A) 4/16/98 2,000,000 2,000,000 4,000,000 4,000,000 784568CQ
SMM TRUST (1997--X) (B)
5.69(A) 4/13/98 7,000,000 7,000,000 5.69(A) 4/13/98 6,000,000 6,000,000 13,000,000 13,000,000 784568CN
STRATEGIC MONEY MARKET TRUST (1997--A) (B)
5.69(A) 6/23/98 15,000,000 15,000,000 5.69(A) 6/23/98 10,000,000 25,000,000 25,000,000 86276PAA
10,000,000
STRATEGIC MONEY MARKET TRUST (1998--B) (B)
5.69(A) 4/6/98 9,000,000 9,000,000 5.69(A) 4/6/98 3,000,000 3,000,000 12,000,000 12,000,000 86276PAC
TOTAL SHORT--TERM NOTES 61,763,000 31,124,000 92,887,000
REPURCHASE AGREEMENTS -- 10.2%
MATURITY MATURITY MATURITY
IN A JOINT TRADING
ACCOUNT AMOUNT AMOUNT AMOUNT
(U.S. GOVERNMENT OBLIGATIONS)
DATED 3/31/98 DUE 4/1/98:
AT 58,719,695 58,710,000 58,719,695 58,710,000 65799LHM
5.94%
DATED 3/31/98 DUE 4/1/98:
AT 35,005,807 35,000,000 35,005,807 35,000,000 65799LHH
5.97%
DATED 3/31/98 DUE 4/1/98:
AT 75,012,673 75,000,000 75,012,673 75,000,000 65799LHD
6.08%
(U.S. TREASURY OBLIGATIONS):
DATED 3/31/98 DUE 4/1/98
AT 11,151,841 11,150,000 11,151,841 11,150,000 65799LHL
5.94%
TOTAL REPURCHASE AGREEMENTS 168,710,000 11,150,000 179,860,000
TOTAL INVESTMENTS - 100% 1,346,183,231 400,347,787 1,746,531,018
TOTAL COST FOR INCOME
TAX PURPOSES 1,346,183,231 400,347,787 1,746,531,018
LEGEND
(A) THE COUPON RATE SHOWN ON FLOATING OR ADJUSTABLE RATE
SECURITIES REPRESENT THE
RATE AT PERIOD END. THE DUE DATES ON THESE TYPES OF SECURITIES
REFLECT THE NEXT
INTEREST RATE RESET DATE OR, WHEN APPLICABLE, THE FINAL MATURITY
DATE.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE
SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS
EXEMPTED FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT THE PERIOD END,
THE VALUE OF THESE
SECURITIES AMOUNTED TO $40,000,000 OR 3.1% OF NET ASSETS OF
DOMESTIC PORFOLIO,
AND $25,000,000 OR 6.2% OF THE NET ASSETS FOR RATED MONEY
MARKET.
(C) RESTRICTED SECURITIES -- INVESTMENTS IN SECURITIES NOT ACQUIS ACQUISITION
REGISTERED UNDER THE ITION
SECURITIES ACT OF 1933. DATE COST DATE COST TOTAL COST
GOLDMAN SACHS GROUP, LP, 5.69%, 6/13/98 3/10/98 $40,000,000 35,864 $ 5,000,000 $45,000,000
GOLDMAN SACHS GROUP, LP, 5.63%, 5/4/98 8/5/97 $2,000,000 $2,000,000
OTHER INFORMATION
AT THE END OF THE PERIOD, RESTRICTED SECURITIES (EXCLUDING 144A
ISSUES) AMOUNTED
TO $42,000,000 OR 3.3% OF NET ASSETS FOR DOMESTIC PORTFOLIO
AND $5,000,000
OR 1.2% OF NET ASSETS FOR RATED MONEY MARKET PORTFOLIO.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COLCHESTER STREET TRUST: DOMESTIC PORTFOLIO
COLCHESTER STREET TRUST: RATED MONEY MARKET PORTFOLIO
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES AS OF MARCH 31, 1998
(UNAUDITED)
COLCHESTER STREET TRUST:
DOMESTIC RATED MONEY PRO FORMA PRO FORMA
PORTFOLIO MARKET PORTFOLIO COMBINED ADJUSTMENTS COMBINED
ASSETS
INVESTMENT IN
SECURITIES, AT VALUE
- SEE ACCOMPANYING
SCHEDULE $1,346,183,231 $400,347,787 $1,746,531,018 - $1,746,531,018
CASH 515 526 1,041 - 1,041
RECEIVABLE FOR
INVESTMENTS SOLD 100,000 55,000 155,000
- 155,000
INTEREST
RECEIVABLE 6,416,788 2,448,432 8,865,220 - 8,865,220
TOTAL ASSETS 1,352,700,534 402,851,745 1,755,552,279 - 1,755,552,279
LIABILITIES
PAYABLE FOR
INVESTMENTS
PURCHASED $71,456,785 $- $71,456,785 - 71,456,785
DISTRIBUTIONS
PAYABLE 2,341,963 173,450 2,515,413 - 2,515,413
ACCRUED MANAGEMENT
FEE 180,624 56,753 237,377 - 237,377
DISTRIBUTION FEES
PAYABLE 19,825 20,059 39,884 - 39,884
OTHER PAYABLES AND
ACCRUED EXPENSES 115,380 73,815 189,195 - 189,195
TOTAL
LIABILITIES 74,114,577 324,077 74,438,654 - 74,438,654
NET ASSETS $1,278,585,957 $402,527,668 $1,681,113,625 $ - $1,681,113,625
NET ASSETS CONSIST OF:
PAID IN CAPITAL $1,278,715,097 $402,559,052 $1,681,274,149 - $1,681,274,149
ACCUMULATED
UNDISTRIBUTED NET
REALIZED GAIN
(LOSS) ON
INVESTMENTS (129,140) (31,384) (160,524) - (160,524)
NET ASSETS $1,278,585,957 $402,527,668 $1,681,113,625 $ - $1,681,113,625
CLASS I
NET ASSETS $1,170,833,137 $303,826,094 $1,474,659,231 $ - $1,474,659,231
NET ASSET VALUE,
OFFERING PRICE AND
REDEMPTION PRICE
PER SHARE $1.00 $1.00 $1.00
SHARES
OUTSTANDING 1,170,937,082 303,901,525 1,474,838,607 - 1,474,838,607
CLASS II
NET ASSETS $34,455,169 $23,321,405 $57,776,574 $ - $57,776,574
NET ASSET VALUE,
OFFERING PRICE AND
REDEMPTION PRICE
PER SHARE $1.00 $1.00 $1.00
SHARES OUTSTANDING 34,458,227 23,327,195 57,785,422 - 57,785,422
CLASS III
NET ASSETS $73,297,651 $75,380,169 $148,677,820 $ - $148,677,820
NET ASSET VALUE,
OFFERING PRICE AND
REDEMPTION PRICE
PER SHARE $1.00 $1.00 $1.00
SHARES OUTSTANDING 73,304,158 75,398,884 148,703,042 - 148,703,042
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
COLCHESTER STREET TRUST: DOMESTIC PORTFOLIO
COLCHESTER STREET TRUST: RATED MONEY MARKET PORTFOLIO
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1998
(UNAUDITED)
COLCHESTER STREET TRUST:
DOMESTIC RATED MONEY PRO FORMA PRO FORMA
PORTFOLIO MARKET PORTFOLIO COMBINED ADJUSTMENTS COMBINED
INTEREST INCOME
Interest Income $70,852,871 $22,589,605 $93,442,476 - $93,442,476
EXPENSES
Management fee 1,408,420 3,895,305 (615,892) (a) 3,279,413
2,486,885
Transfer agent fees
Class I 431,378 30,043 461,421 16,040 (b) 477,461
Class II 5,016 801 5,817 3,146 (b) 8,963
Class III 25,088 2,353 27,441 2,791 (b) 30,232
Distribution fees
Class II 16,366 41,909 58,275 774 (b) 59,049
Class III 213,409 116,323 329,732 249 (b) 329,981
Accounting fees
and expenses 143,578 20,711 164,289 8,689 (b) 172,978
Non-interested
trustees'
compensation 7,899 1,109 9,008 1,411 (b) 10,419
Custodian fees
and expenses 30,960 8,659 39,619 1,219 (b) 40,838
Registration fees 134,938 21,726 156,664 79,916 (c) 236,580
Audit 14,895 24,195 39,090 (6,090) (d) 33,000
Legal 6,488 427 6,915 1,643 (b) 8,558
Miscellaneous 13,267 500 13,767 3,733 (b) 17,500
Total expenses
before reductions 3,530,167 1,677,176 (502,371) 4,704,972
5,207,343
Expense reductions (824,131) (731,960) (1,556,091) 505,710 (e) (1,050,381)
Total expenses 2,706,036 945,216 3,651,252 3,339 3,654,591
NET INTEREST INCOME 68,146,835 21,644,389 89,791,224 (3,339) 89,787,885
NET REALIZED GAIN
(LOSS) ON INVESTMENTS (4,895) (15,808) (20,703) - (20,703)
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS $68,141,940 $21,628,581 89,770,521 $(3,339) $89,767,182
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CAPITALIZATION
The following table shows the capitalization of the funds as of March 31, 1998 and on a pro forma
combined basis (unaudited) as of that date giving effect to the Reorganization.
DOMESTIC RATED MM COMBINED
NET ASSET VALUE $1,170,833,137 $303,826,094 $1,474,659,231
$34,455,169 $23,321,405 $57,776,574
$73,297,651 $75,380,169 $148,677,820
SHARES 1,170,937,082 303,901,525 1,474,838,607
OUTSTANDING 34,458,227 23,327,195 57,785,422
73,304,158 75,398,884 148,703,042
</TABLE>
Colchester Street Trust: Domestic Portfolio
Colchester Street Trust: Rated Money Market Portfolio
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of
Investments and Statement of Assets and Liabilities as of March 31,
1998 and the unaudited Pro Forma Combining Statement of Operations for
the year ended March 31, 1998 are intended to present the financial
condition and related results of operations of Colchester Street
Trust: Domestic Portfolio as if the reorganization with Colchester
Street Trust: Rated Money Market Portfolio had been consummated at
April 1, 1997. Had the pro forma adjustments not included the effect
of the expense limitations, Pro Forma Combined Expense reductions
would have been $11,885, resulting in Pro Forma Combined Net Interest
Income and Pro Forma Combined Net Increase in Net Assets resulting
from operations of $88,749,389 and $88,728,686, respectively.
Prior to January 1, 1998, FMR paid all expenses except the
compensation of the non-interested Trustees and certain exceptions
such as interest, taxes, brokerage commissions and extraordinary
expenses for Rated Money Market Portfolio. FMR received a fee that
was computed daily at an annual rate of 0.42% of Rated Money Market
Portfolio's average daily net assets. Effective January 1, 1998, the
expense structure changed to where FMR received a fee that was
computed daily at an annual rate of 0.20% of average net assets and
Rated Money Market Portfolio would be responsible for paying other
expenses such as transfer agent, accounting, legal, audit and
custodian fees.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Decrease in management fee reflects Colchester Street Trust:
Domestic Portfolio's management fee rate applied to the combined
fund's average net assets.
(b) Increase in fees reflects contractual rates charged against
combined average net assets.
(c) Increase in fees reflects net increase in costs incurred as a
result of the reorganization offset with savings in duplicate charges.
(d) Decreases in fees reflects elimination of duplicated services or
charges.
(e) Decrease in Reimbursement to offset reduction of management fees
from Colchester Street Trust: Rated Money Market's rate.
The unaudited pro forma combining statements should be read in
conjunction with the separate annual audited financial statements as
of March 31, 1998 for Colchester Street Trust: Domestic Portfolio and
Rated Money Market Portfolio, which are incorporated by reference in
the Statement of Additional Information to this Proxy Statement and
Prospectus.
