SHARES OF THE FUND ARE OFFERED ONLY TO THE SEPARATE ACCOUNTS OF
INSURANCE COMPANIES, FOR THE PURPOSE OF FUNDING VARIABLE ANNUITY AND
VARIABLE LIFE INSURANCE CONTRACTS. THE FUND MAY NOT BE AVAILABLE IN
YOUR STATE DUE TO VARIOUS INSURANCE REGULATIONS. PLEASE CHECK WITH
YOUR INSURANCE COMPANY FOR AVAILABILITY. IF THE FUND IN THIS
PROSPECTUS IS NOT AVAILABLE IN YOUR STATE, THIS PROSPECTUS IS NOT TO
BE CONSIDERED A SOLICITATION. PLEASE READ THIS PROSPECTUS TOGETHER
WITH THE VARIABLE ANNUITY OR VARIABLE LIFE INSURANCE CONTRACT
PROSPECTUS THAT ACCOMPANIES IT.
Like securities of all mutual funds, these securities have
not been approved or disapproved by the Securities
and Exchange Commission, and the Securities and
Exchange Commission has not determined if this
prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
VARIABLE
INSURANCE PRODUCTS
FUND
SERVICE CLASS
OVERSEAS PORTFOLIO
PROSPECTUS
APRIL 30, 1999
(AS REVISED JULY 20, 1999)
(FIDELITY_LOGO_GRAPHIC)(REGISTERED)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 2 INVESTMENT SUMMARY
2 PERFORMANCE
FUND BASICS 3 INVESTMENT DETAILS
4 VALUING SHARES
SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES
4 DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS
4 TAX CONSEQUENCES
FUND SERVICES 5 FUND MANAGEMENT
5 FUND DISTRIBUTION
APPENDIX 7 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
OVERSEAS PORTFOLIO seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
Fidelity Management & Research Company (FMR)'s principal investment
strategies include:
(small solid bullet) Investing at least 65% of total assets in foreign
securities.
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Allocating investments across countries and
regions considering the size of the market in each country and region
relative to the size of the international market as a whole.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently than the U.S.
market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The fund's total return may be quoted in advertising in accordance
with current law and interpretations thereof.
Total returns quoted for a class include the class's expenses, but do
not include charges and expenses attributable to any particular
insurance product. Because shares of the fund may be purchased only
through variable annuity and variable life insurance contracts, you
should carefully review the prospectus of the insurance product you
have chosen for information on relevant charges and expenses.
Excluding these charges from quotations of a class's performance has
the effect of increasing the performance quoted. You should bear in
mind the effect of these charges when comparing the fund's performance
to that of other mutual funds.
The following information illustrates the fund's performance over the
past year, compares the performance of the fund to the performance of
a market index, and compares the performance of the fund to an average
of the performance of similar funds over various periods of time.
Returns are based on past results and are not an indication of future
performance.
YEAR-BY-YEAR RETURNS
The returns in the chart do not include the effect of charges and
expenses attributable to any particular insurance product. If the
effect of the charges and expenses was reflected, returns would be
lower than those shown.
OVERSEAS PORTFOLIO - SERVICE
CLASS
Calendar Year 1998
12.69%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: 12.69
DURING THE PERIOD SHOWN IN THE CHART FOR SERVICE CLASS OF OVERSEAS
PORTFOLIO, THE HIGHEST RETURN FOR A QUARTER WAS 18.09% (QUARTER ENDING
DECEMBER 31, 1998) AND THE LOWEST RETURN FOR A QUARTER WAS -17.66%
(QUARTER ENDING SEPTEMBER 30, 1998).
AVERAGE ANNUAL RETURNS
The returns in the following table do not include the effect of
charges and expenses attributable to any particular insurance product.
If the effect of the charges and expenses was reflected, returns would
be lower than those shown.
For the periods ended Past 1 year Life of classA
December 31, 1998
OVERSEAS PORTFOLIO - SERVICE 12.69% 12.69%B
CLASS
Morgan Stanley Capital 20.27% 20.27%B
International Europe,
Australasia, Far East Index
Lipper International Funds 13.02% 13.02%B
Average
A BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
B FROM JANUARY 1, 1998.
Morgan Stanley Capital International Europe, Australasia, Far East
(EAFE) Index is an index that is designed to represent the performance
of developed stock markets outside the United States and Canada. The
index may be compiled in two ways: a market capitalization-weighted
(cap-weighted) and a gross domestic product-weighted (GDP-weighted)
version. As of December 31, 1998, the cap-weighted index included over
1,000 equity securities of companies domiciled in 20 countries, and
the GDP-weighted index included over 1,000 equity securities of
companies domiciled in 20 countries.
Lipper International Funds Average reflects the performance (excluding
sales charges) of mutual funds with similar objectives.
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
OVERSEAS PORTFOLIO seeks long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
DESCRIPTION OF PRINCIPAL SECURITY TYPES
EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities and
warrants.
PRINCIPAL INVESTMENT RISKS
Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political or financial
developments. The fund's reaction to these developments will be
affected by the types of the securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. When you sell your shares of the fund, they
could be worth more or less than what you paid for them.
The following factors may significantly affect the fund's performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently than
small cap stocks, and "growth" stocks can react differently than
"value" stocks. Issuer, political or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. For example, many foreign countries are less prepared
than the United States to properly process and calculate information
related to dates from and after January 1, 2000, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest or principal. All of these factors
can make foreign investments, especially those in emerging markets,
more volatile and potentially less liquid than U.S. investments. In
addition, foreign markets can perform differently than the U.S.
market.
Investing in emerging markets involves risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of foreign development;
political stability; market depth, infrastructure and capitalization
and regulatory oversight are generally less than in more developed
markets. Emerging market economies can be subject to greater social,
economic, regulatory and political uncertainties. All of these factors
can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the value of an issuer's
securities. The value of securities of smaller, less well-known
issuers can be more volatile than that of larger issuers.
In response to market, economic, political or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect the fund's
performance and the fund may not achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.
OVERSEAS PORTFOLIO seeks long-term growth of capital primarily through
investments in foreign securities.
VALUING SHARES
The fund is open for business each day the New York Stock Exchange
(NYSE) is open.
A class's net asset value per share (NAV) is the value of a single
share. Fidelity(registered trademark) normally calculates Service
Class's NAV as of the close of business of the NYSE, normally 4:00
p.m. Eastern time. However, NAV may be calculated earlier if trading
on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). The fund's assets are valued as of this
time forthe purpose of computing Service Class's NAV.
To the extent that the fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of the fund's assets may not occur on days when the
fund is open for business.
The fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available for a
security or if a security's value has been materially affected by
events occurring after the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or
market), that security may be valued by another method that the Board
of Trustees believes accurately reflects fair value. A security's
valuation may differ depending on the method used for determining
value.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
The price to buy one share of Service Class is the class's NAV.
The price to sell one share of Service Class is the class's NAV.
Only "separate accounts" of insurance companies that have executed
certain agreements with the fund can buy or sell shares of the fund. A
separate account is a segregated asset account. Separate accounts fund
variable annuity contracts and variable life insurance policies.
Please refer to your insurance company's separate account prospectus
for investing information.
Each insurance company separate account places a single order to buy
or sell shares of the fund each business day. The insurance company
calculates the amount of the order based on the aggregate instructions
to the insurer from owners of the insurer's variable annuity contracts
and variable life insurance policies. Instructions received from
owners before the close of the NYSE on a given day usually result in
fund share purchases and redemptions at the NAV calculated as of the
close of the NYSE that day. In some cases, the applicable NAV is the
next NAV calculated after the order is received by the fund.
The fund will normally send the proceeds from redemption orders to the
insurance company one business day after the fund receives the
redemption order. The fund must send the proceeds within 7 days after
the fund receives the redemption order.
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.
Agreements executed with insurance companies obligate the fund to sell
and redeem fund shares each day that the NYSE is open for business.
Notwithstanding anything else in the agreements, the Board may refuse
to sell shares of the fund to any separate account, or suspend or
terminate the offering of shares of the fund if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board acting in good faith and in
light of its fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of the fund.
The fund sells its shares to separate accounts of insurance companies
that are affiliated with FMR and to separate accounts of insurance
companies that are unaffiliated with FMR. The fund currently does not
foresee any disadvantages to policyowners arising out of the fact that
the fund offers its shares to separate accounts of various insurance
companies to serve as the investment medium for their variable
products. Nevertheless, the Board of Trustees intends to monitor
events in order to identify any material irreconcilable conflicts
which may possibly arise, and to determine what action, if any, should
be taken in response to such conflicts. If such a conflict were to
arise, one or more insurance companies' separate accounts might be
required to withdraw its investments in the fund and shares of another
fund may be substituted. This might force the fund to sell securities
at disadvantageous prices.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The fund earns dividends, interest and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund may also realize capital gains
from its investments, and distributes these gains (less any losses),
if any, to shareholders as capital gains distributions.
The fund will distribute any dividends at least annually. Normally,
net realized capital gains, if any, are distributed each year for the
fund.
Dividends and capital gains distributions from the fund will be
automatically reinvested in additional shares of the same class of the
fund.
TAX CONSEQUENCES
Please refer to your insurance company's separate account prospectus
for a discussion of the tax status of your variable annuity or
variable life insurance contract. It is suggested you keep all
statements you receive to assist in your personal recordkeeping.
It is expected that shares of the fund will be held by insurance
company separate accounts under the terms of variable annuity and
variable life insurance contracts. Under current tax law, dividends or
capital gains distributions from the fund are not currently taxable to
holders of variable annuity and variable life insurance contracts when
left to accumulate within a variable contract. Depending on the
variable contract, withdrawals from the contract may be subject to
ordinary income tax and, in addition, to a 10% penalty tax on
withdrawals before age 59.
FUND SERVICES
FUND MANAGEMENT
Overseas Portfolio is a mutual fund, an investment that pools
shareholders' money and invests it toward a specified goal.
FMR is the fund's manager.
As of April 30, 1998, FMR had approximately $529 billion in
discretionary assets under management.
As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.
Affiliates assist FMR with foreign investments:
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for the fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for the fund.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for the fund. FMR
Far East was organized in 1986 to provide investment research and
advice to FMR. Currently, FMR Far East provides investment research
and advice on issuers based outside the United States and may also
provide investment advisory services for the fund.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1998, FIIA had approximately $1 billion in
discretionary assets under management. Currently, FIIA provides
investment research and advice on issuers based outside the United
States and may also provide investment advisory services for the fund.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
the fund. As of September 28, 1998, FIIA(U.K.)L had approximately $2.3
billion in discretionary assets under management. Currently,
FIIA(U.K.)L provides investment research and advice on issuers based
outside the United States and may also provide investment advisory
services for the fund.
The fund could be adversely affected if the computer systems used by
FMR and other service providers do not properly process and calculate
date-related information from and after January 1, 2000. FMR has
advised the fund that it is actively working on necessary changes to
its computer systems and expects that its systems, and those of other
major service providers, will be modified prior to January 1, 2000.
However, there can be no assurance that there will be no adverse
impact on the fund.
Richard Mace is Vice President and manager of Overseas Portfolio,
which he has managed since March 1996. He also manages several other
Fidelity funds. Since joining Fidelity in 1987, Mr. Mace has worked as
an analyst and manager.
The fund has an investment objective similar to that of an existing
Fidelity fund. Overseas Portfolio is most similar to Fidelity Overseas
Fund.
The performance of the fund is not expected to be the same as the
performance of the existing Fidelity fund to which it is most similar
due to differences in investments, economies of scale, and other
factors. Various insurance-related costs at the insurance company's
separate account level will also affect performance.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee for the fund is
calculated by adding a group fee rate to an individual fund fee rate,
dividing by twelve, and multiplying the result by the fund's average
net assets throughout the month.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For December 1998, the group fee rate was 0.29%. The individual fund
fee rate is 0.45%.
The total management fee for the fiscal year ended December 31, 1998,
was 0.74% of the fund's average net assets.
The total annual Service Class operating expenses for the fiscal year
ended December 31, 1998, were 1.01% of the class's average net assets.
The total annual class operating expenses do not reflect the effect of
any reduction of certain expenses during the period.
A portion of the brokerage commissions that the fund paid was used to
reduce the fund's expenses. In addition, the fund entered into an
arrangement with its custodian whereby credits realized as a result of
uninvested cash balances were used to reduce custodian expenses.
Including these reductions, the total annual Service Class operating
expenses would have been 0.97% for the fiscal year ended December 31,
1998.
FMR pays FMR U.K., FMR Far East, and FIIA for providing assistance
with investment advisory services, and FIIA in turn pays FIIA(U.K.)L.
FMR may, from time to time, agree to reimburse each class for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a class if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated by FMR at any time, can decrease
a class's expenses and boost its performance.
Effective November 3, 1997, FMR has voluntarily agreed to reimburse
Service Class of the fund to the extent that total operating expenses
(excluding interest, taxes, securities lending fees, brokerage
commissions and extraordinary expenses), as a percentage of its
average net assets, exceed 1.60%. This arrangement can be terminated
by FMR at any time.
FUND DISTRIBUTION
The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.
Fidelity Distributors Corporation, Inc. (FDC) distributes Service
Class's shares.
Service Class of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Service Class of the fund is authorized to pay FDC (for
remittance quarterly to an insurance company) a 12b-1 fee as
compensation for providing services intended to result in the sale of
Service Class shares and/or shareholder support services. Depending on
an insurance company's corporate structure and applicable state law,
FDC may remit payments to the insurance company's affiliated
broker-dealer or other affiliated company, rather than to the
insurance company itself. Service Class of the fund may pay FDC a
12b-1 fee at an annual rate of 0.25% of its average net assets, or
such lesser amount as the Trustees may determine from time to time.
Service Class of the fund currently pays FDC a 12b-1 fee at an annual
rate of 0.10% of its average net assets throughout the month. Service
Class's 12b-1 fee rate for the fund may be increased only when the
Trustees believe that it is in the best interests of Variable Product
owners to do so. (For purposes of this discussion, "Variable Product"
refers to a variable annuity contract or variable life insurance
policy for which shares of the fund are available as underlying
investment options.)
Up to the full amount of the Service Class 12b-1 fee may be reallowed
to insurance companies as compensation for providing services intended
to result in the sale of Service Class shares and/or support services
to Variable Product owners, based upon the level of such services
provided. These services may include, without limitation: answering
questions about the fund from Variable Product owners; receiving and
answering correspondence from Variable Product owners (including
requests for prospectuses and statements of additional information for
the fund); performing sub-accounting with respect to Variable Product
values allocated to the fund; preparing, printing and distributing
reports of values to Variable Product owners who have values allocated
to the fund; printing and distributing prospectuses, statements of
additional information, any supplements thereto, and shareholder
reports; preparing, printing and distributing marketing materials for
Variable Products; assisting customers in completing applications for
Variable Products and selecting underlying mutual fund investment
options; preparing, printing and distributing sub-account performance
figures for sub-accounts investing in fund shares; and providing other
reasonable assistance in connection with the distribution of fund
shares to insurers.
In addition, the Service Class plan specifically recognizes that FMR
may make payments from its management fee revenue, past profits, or
other resources to FDC for expenses incurred in connection with
providing services intended to result in the sale of Service Class
shares and/or shareholder support services, including payments made to
insurance companies and others that provide those services. Currently,
the Board of Trustees of the fund has authorized such payments for
Service Class.
Because 12b-1 fees are paid out of Service Class's assets on an
ongoing basis, they will increase the cost of your investment and may
cost you more than paying other types of sales charges.
To receive payments made pursuant to a Distribution and Service Plan
or record keeping fees, intermediaries must sign the appropriate
agreement with FDC in advance.
FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Variable Insurance Product funds,
provided that the fund receives brokerage services and commission
rates comparable to those of other broker-dealers.
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
Statement of Additional Information (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 fund or FDC. This Prospectus and the related SAI do
not constitute an offer by the fund or by FDC to sell shares of the
fund to or to buy shares of the fund from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
class's financial history. Service Class of the fund has under 5 years
of financial history, beginning with its commencement of operations
date. Certain information reflects financial results for a single
class share. Total returns for each period include the reinvestment of
all dividends and distributions. This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report,
along with the fund's financial highlights and financial statements,
are included in the fund's Annual Report. A free copy of the Annual
Report is available upon request.
SELECTED PER-SHARE DATA
Selected Per-Share Data and
Ratios
Years ended December 31 1998 1997E
Net asset value, beginning $ 19.20 $ 19.36
of period
Income from Investment
Operations
Net investment incomeD .15 .01
Net realized and 2.19 (.17)
unrealized gain (loss)
Total from investment 2.34 (.16)
operations
Less Distributions
From net investment income (.38) --
From net realized gain (1.12) --
Total distributions (1.50) --
Net asset value, end of $ 20.04 $ 19.20
period
Total returnB,C 12.69% (.83)%
Net assets, end of period $ 34,720 $ 931
(000 omitted)
Ratio of expenses to 1.01% 1.02%A
average net assets
Ratio of expenses to .97%F 1.01%A,F
average net assets after
expense reductions
Ratio of net investment .80% .31%A
income to average net assets
Portfolio turnover 84% 67%
A ANNUALIZED
B TOTAL RETURNS DO NOT REFLECT CHARGES ATTRIBUTABLE TO YOUR INSURANCE
COMPANY'S SEPARATE ACCOUNT. INCLUSION OF THESE CHARGES WOULD REDUCE
THE TOTAL RETURNS SHOWN. TOTAL RETURNS FOR PERIODS OF LESS THAN ONE
YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF SERVICE
CLASS SHARES) TO DECEMBER 31, 1997.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). The fund's annual and semi-annual reports include a
discussion of the fund's holdings and recent market conditions and the
fund's investment strategies that affected performance.
For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175, or your insurance company.
The SAI, the fund's annual and semi-annual reports and other related
materials are available on the SEC's Internet Web site
(http://www.sec.gov). You can obtain copies of this information upon
paying a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, D.C. 20549-6009. You can also review and copy
information about the fund, including the fund's SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for
information on the operation of the SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER 811-3329.
Fidelity Investments & (Pyramid) Design and Fidelity are registered
trademarks of FMR Corp.
1.723526.100 VIP-OV SC-pro-0 4 99
