SUPPLEMENT TO THE
VARIABLE INSURANCE PRODUCTS FUND:
MONEY MARKET PORTFOLIO, HIGH INCOME PORTFOLIO,
EQUITY-INCOME PORTFOLIO,
GROWTH PORTFOLIO, AND OVERSEAS PORTFOLIO
VARIABLE INSURANCE PRODUCTS FUND II:
INVESTMENT GRADE BOND PORTFOLIO, ASSET MANAGER PORTFOLIO,
ASSET MANAGER: GROWTH PORTFOLIO, INDEX 500 PORTFOLIO,
AND CONTRAFUND PORTFOLIO
VARIABLE INSURANCE PRODUCTS FUND III:
BALANCED PORTFOLIO, GROWTH & INCOME PORTFOLIO,
GROWTH OPPORTUNITIES PORTFOLIO, AND MID CAP PORTFOLIO
INITIAL CLASS AND SERVICE CLASS
APRIL 30, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE ADDITION OF THE FOLLOWING SECTION, "ADDITIONAL PURCHASE, EXCHANGE
AND REDEMPTION INFORMATION," PRECEDES THE "DISTRIBUTIONS AND TAXES"
SECTION UNDER THE HEADING "TABLE OF CONTENTS" ON PAGE 1.
TABLE OF CONTENTS PAGE
Additional Purchase, Exchange 63
And Redemption Information
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "INVESTMENT LIMITATIONS OF MONEY MARKET PORTFOLIO"IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 15% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (The
limitation does not apply to purchases of debt securities or to
repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "INVESTMENT LIMITATIONS OF HIGH INCOME, EQUITY-INCOME, GROWTH,
OVERSEAS, GROWTH & INCOME, BALANCED, GROWTH OPPORTUNITIES, INVESTMENT
GRADE BOND, ASSET MANAGER, INDEX 500, CONTRAFUND, ASSET MANAGER:
GROWTH, AND MID CAP PORTFOLIOS'" IN THE "INVESTMENT POLICIES AND
LIMITATIONS" SECTION ON PAGE 4.
(iii) Each fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) Each fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money up to 15% of
the fund's net assets to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOR HIGH INCOME
PORTFOLIO FOUND UNDER THE HEADING "INVESTMENT LIMITATIONS OF HIGH
INCOME, EQUITY-INCOME, GROWTH, OVERSEAS, GROWTH & INCOME, BALANCED,
GROWTH OPPORTUNITIES, INVESTMENT GRADE BOND, ASSET MANAGER, INDEX 500,
CONTRAFUND, ASSET MANAGER: GROWTH, AND MID CAP PORTFOLIOS" IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 4.
For purposes of investing at least 65% of the fund's total assets in
income-producing debt securities, preferred stocks and convertible
securities, FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOR
EQUITY-INCOME PORTFOLIO FOUND UNDER THE HEADING "INVESTMENT
LIMITATIONS OF HIGH INCOME, EQUITY-INCOME, GROWTH, OVERSEAS, GROWTH &
INCOME, BALANCED, GROWTH OPPORTUNITIES, INVESTMENT GRADE BOND, ASSET
MANAGER, INDEX 500, CONTRAFUND, ASSET MANAGER: GROWTH, AND MID CAP
PORTFOLIOS" IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION ON
PAGE 4.
For purposes of investing at least 65% of the fund's total assets in
income-producing equity securities, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOR OVERSEAS
PORTFOLIO FOUND UNDER THE HEADING "INVESTMENT LIMITATIONS OF HIGH
INCOME, EQUITY-INCOME, GROWTH, OVERSEAS, GROWTH & INCOME, BALANCED,
GROWTH OPPORTUNITIES, INVESTMENT GRADE BOND, ASSET MANAGER, INDEX 500,
CONTRAFUND, ASSET MANAGER: GROWTH, AND MID CAP PORTFOLIOS" IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 4.
For purposes of investing at least 65% of the fund's total assets in
foreign securities, FMR interprets "total assets" to exclude
collateral received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOR BALANCED
PORTFOLIO FOUND UNDER THE HEADING "INVESTMENT LIMITATIONS OF HIGH
INCOME, EQUITY-INCOME, GROWTH, OVERSEAS, GROWTH & INCOME, BALANCED,
GROWTH OPPORTUNITIES, INVESTMENT GRADE BOND, ASSET MANAGER, INDEX 500,
CONTRAFUND, ASSET MANAGER: GROWTH, AND MID CAP PORTFOLIOS" IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 4.
For purposes of investing at least 25% of the fund's total assets in
fixed-income senior securities (including debt securities and
preferred stock), FMR interprets "total assets" to exclude collateral
received for securities lending transactions.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOR MID CAP
PORTFOLIO FOUND UNDER THE HEADING "INVESTMENT LIMITATIONS OF HIGH
INCOME, EQUITY-INCOME, GROWTH, OVERSEAS, GROWTH & INCOME, BALANCED,
GROWTH OPPORTUNITIES, INVESTMENT GRADE BOND, ASSET MANAGER, INDEX 500,
CONTRAFUND, ASSET MANAGER: GROWTH, AND MID CAP PORTFOLIOS" IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 4.
For purposes of investing at least 65% of the fund's total assets in
securities of companies with medium market capitalization, FMR
interprets "total assets" to exclude collateral received for
securities lending transactions.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "SOURCES OF CREDIT OR LIQUIDITY SUPPORT" IN THE"INVESTMENT
POLICIES AND LIMITATIONS" SECTION ON PAGE 15.
SOURCES OF LIQUIDITY OR CREDIT SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit of the
liquidity or credit enhancement provider in determining whether to
purchase a security supported by such enhancement. In evaluating the
credit of a foreign bank or other foreign entities, FMR will consider
whether adequate public information about the entity is available and
whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
THE FOLLOWING INFORMATION REPLACES THE TENTH PARAGRAPH FOUND UNDER THE
HEADING "PORTFOLIO TRANSACTIONS" ON PAGE 38.
To the extent permitted by applicable law, FMR (BT for Index 500) is
authorized to allocate portfolio transactions in a manner that takes
into account assistance received in the distribution of shares of the
funds or other Fidelity funds (Index 500) and to use the research
services of brokerage and other firms that have provided such
assistance. FMR (BT for Index 500) may use research services provided
by and place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services Japan LLC (FBSJ),
indirect subsidiaries of FMR Corp. (and, for Index 500, BT Brokerage
Corporation and BT Futures Corp., indirect subsidiaries of Deutsche
Bank AG), if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to December 9, 1997, FMR used research
services provided by and placed agency transactions with Fidelity
Brokerage Services (FBS), an indirect subsidiary of FMR Corp.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION ON PAGE 61.
High Income Portfolio may compare its performance to that of the
Merrill Lynch High Yield Master II Index, a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default. Issues must have an
outstanding par value of at least $50 million to be included in the
index.
THE FOLLOWING INFORMATION FOUND IN THE "TRUSTEES AND OFFICERS" SECTION
BEGINNING ON PAGE 63 HAS BEEN REMOVED.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 63.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (automotive, space, defense, and
information technology), CSX Corporation (freight transportation),
Birmingham Steel Corporation (producer of steel and steel products),
and RPM, Inc. (manufacturer of chemical products), and he previously
served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining, 1985-1997), and as a
Trustee of First Union Real Estate Investments (1986-1997). In
addition, he serves as a Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the Executive Committee as well as
Chairman of the Board and President, a Trustee of University School
(Cleveland), and a Trustee of Cleveland Clinic Flori da.
THE FOLLOWING INFORMATION SUPPLEMENTS THE SIMILAR INFORMATION FOUND IN
T HE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 63.
NED C. LAUTENBACH (55), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
THE FOLLOWING INFORMATION SUPPLEMENTS THE SIMILAR INFORMATION FOUND
IN THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 63.
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an
employ ee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer
served as Director of Compliance for MFS Investment Management.
THE ADDITION OF THE FOLLOWING SECTION, "ADDITIONAL PURCHASE, EXCHANGE
AND REDEMPTION INFORMATION," PRECEDES THE "DISTRIBUTIONS AND TAXES"
SECTION ON PAGE 63.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Under certain circumstances (for example, at the request of a
shareholder), if FMR determines that it is in the best interests of
the fund, a fund may make redemption payments in whole or in part in
readily marketable securities or other property, valued for this
purpose as they are valued in computing each class's NAV. Index 500
Portfolio may make redemption payments "in kind" to a shareholder that
owns 5% or more of its outstanding voting securities pursuant to an
exemptive order issued by the SEC. Shareholders that receive
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
THE FOLLOWING INFORMATION REPLACES TH E COMPENSATION TABLE FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 67.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM A Edward C. Johnson 3d** J. Gary Burkhead** Ralph F. Cox Phyllis Burke Davis Robert M. Gates
FUND
Money MarketB $ 0 $ 0 $ 482 $ 476 $ 482
High IncomeB $ 0 $ 0 $ 891 $ 880 $ 892
Equity-IncomeB,C,G $ 0 $ 0 $ 3,902 $ 3,850 $ 3,903
GrowthB,D,G $ 0 $ 0 $ 3,141 $ 3,096 $ 3,139
OverseasB,E,G $ 0 $ 0 $ 740 $ 730 $ 741
Investment Grade BondB $ 0 $ 0 $ 161 $ 159 $ 161
Asset ManagerB,F,G $ 0 $ 0 $ 1,643 $ 1,622 $ 1,644
Index 500B $ 0 $ 0 $ 975 $ 960 $ 974
ContrafundB $ 0 $ 0 $ 1,732 $ 1,707 $ 1,731
Asset Manager: GrowthB $ 0 $ 0 $ 176 $ 174 $ 176
BalancedB $ 0 $ 0 $ 89 $ 88 $ 89
Growth & IncomeB $ 0 $ 0 $ 228 $ 223 $ 227
Growth OpportunitiesB $ 0 $ 0 $ 465 $ 459 $ 465
Mid Cap+B $ 0 $ 0 $ 25 $ 25 $ 25
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 223,500 $ 220,500 $ 223,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM A E. Bradley Jones**** Donald J. Kirk Ned C. Lautenbach*** Peter S. Lynch ** William O. McCoy
FUND
Money MarketB $ 478 $ 489 $ 0 $ 0 $ 482
High IncomeB $ 886 $ 904 $ 0 $ 0 $ 892
Equity-IncomeB,C,G $ 3,878 $ 3,955 $ 0 $ 0 $ 3,903
GrowthB,D,G $ 3,117 $ 3,183 $ 0 $ 0 $ 3,139
OverseasB,E,G $ 736 $ 750 $ 0 $ 0 $ 741
Investment Grade BondB $ 160 $ 163 $ 0 $ 0 $ 161
Asset ManagerB,F,G $ 1,633 $ 1,665 $ 0 $ 0 $ 1,644
Index 500B $ 967 $ 988 $ 0 $ 0 $ 974
ContrafundB $ 1,719 $ 1,757 $ 0 $ 0 $ 1,731
Asset Manager: GrowthB $ 175 $ 178 $ 0 $ 0 $ 176
BalancedB $ 89 $ 91 $ 0 $ 0 $ 89
Growth & IncomeB $ 225 $ 231 $ 0 $ 0 $ 227
Growth OpportunitiesB $ 462 $ 472 $ 0 $ 0 $ 465
Mid Cap+B $ 25 $ 25 $ 0 $ 0 $ 25
TOTAL COMPENSATION FROM THE $ 222,000 $ 226,500 $ 0 $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM A Gerald C. McDonough Marvin L. Mann Robert C. Pozen** Thomas R. Williams
FUND
Money MarketB $ 589 $ 476 $ 0 $ 482
High IncomeB $ 1,092 $ 880 $ 0 $ 892
Equity-IncomeB,C,G $ 4,778 $ 3,852 $ 0 $ 3,903
GrowthB,D,G $ 3,842 $ 3,099 $ 0 $ 3,139
OverseasB,E,G $ 907 $ 731 $ 0 $ 741
Investment Grade BondB $ 197 $ 159 $ 0 $ 161
Asset ManagerB,F,G $ 2,011 $ 1,621 $ 0 $ 1,644
Index 500B $ 1,192 $ 963 $ 0 $ 974
ContrafundB $ 2,119 $ 1,710 $ 0 $ 1,731
Asset Manager: GrowthB $ 216 $ 174 $ 0 $ 176
BalancedB $ 109 $ 88 $ 0 $ 89
Growth & IncomeB $ 277 $ 225 $ 0 $ 227
Growth OpportunitiesB $ 569 $ 460 $ 0 $ 465
Mid Cap+B $ 31 $ 25 $ 0 $ 25
TOTAL COMPENSATION FROM THE $ 273,500 $ 220,500 $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are
compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advi sory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
+ Estimated.
A Compensation figures include cash, amounts required to be
deferred, and may include amounts deferred at the election of
Trustees. For the calendar year ended December 31, 1998, the Trustees
accrued required deferred compensation from the funds as follows:
Ralph F. Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates,
$75,000; E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William
O. McCoy, $75,000; Gerald C. McDonough, $87,500; Marvin L. Mann,
$75,000; and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation: Ralph F. Cox, $55,039; William O. McCoy, $55,039;
Marvin L. Mann, $55,039; and Thomas R. Williams, $55,039.
B Compensation figures include cash, and may include amounts
required to be deferred and amounts deferred at the election of
Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $1,760; Phyllis Burke Davis,
$1,760; Robert M. Gates, $1,760; E. Bradley Jones, $1,760; Donald J.
Kirk, $1,760; William O. McCoy, $1,760; Gerald C. McDonough, $2,053;
Marvin L. Mann, $1,760; and Thomas R. Williams, $1,760.
D The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $1,414; Phyllis Burke Davis ,
$1,414; Robert M. Gates, $1,414; E. Bradley Jones, $1,414; Donald J.
Kirk, $1,414; William O. McCoy, $1,414; Gerald C. McDonough, $1,650;
Marvin L. Mann, $1,414; and Thomas R. Williams, $1,414.
E The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $334; Phyllis Burke Davis, $334;
Robert M. Gates, $334; E. Bradley Jones, $334; Donald J. Kirk, $334;
William O. McCoy, $334; Gerald C. McDonough, $390; Marvin L. Mann,
$334; and Thomas R. Williams, $334.
F The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $740; Phyllis Burke Davis, $740;
Robert M. Gates, $740; E. Bradley Jones, $740; Donald J. Kirk, $740;
William O. McCoy, $740; Gerald C. McDonough, $864; Marvin L. Mann,
$740; and Thomas R. Williams, $740.
G Certain of the non-interested Trustees' aggregate compensation
from certain funds includes accrued voluntary deferred compensation as
follows: Ralph F. Cox, $1,489, Equity-Income, $1,196, Growth, $283,
Overseas, $626, Asset Manager; Marvin L. Mann, $1,489, Equity-Income,
$1,196, Growth, $283, Overseas, $626, Asset Manager; William O. McCoy,
$1,489, Equity-Income, $1,196, Growth, $283, Overseas, $626, Asset
Manager; and Thomas R. Williams, $1,489, Equity-Income, $1,196,
Growth, $283, Overseas, $626, Asset Manager.
TH E FOLLOWING INFORMATION REPLACES THE INFORMATION FOUND UNDER THE
HEADING "CONTROL OF INVESTMENT ADVISERS" ON PAGE 69.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity International
Investment Advisors (FIIA), Fidelity Investments Japan Limited (FIJ),
and Fidelity International Investment Advisors U.K. Limited
(FIIA(U.K.)L). Edward C. Johnson 3d, Johnson family members, and
various trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL. FIL
provides investment advisory services to non-U.S. investment
compa nies and institutional investors investing in securities
throughout the world.
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH FOUND UNDER THE
HEADING "CONTROL OF INVESTMENT ADVISERS" ON PAGE 69.
BT, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly owned subsidiary
of Deutsche Bank AG, whose principal offices are at Taunusanlage 12,
D-60325 Frankfurt am Main, Federal Republic of Germany. Deutsche Bank
AG is a major global banking institution that is engaged in a wide
range of financial services, including investment management, mutual
funds, retail and commercial banking, investment banking and
insurance.
THE FOLLOWING INFORMATION REPLACES THE THIRD PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY SERVICES (INDEX 500 PORTFOLIO)"
IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 70.
BT is the sub-adviser of the fund and acts as the fund's custodian.
Under its management contract with the fund, FMR acts as investment
adviser. Under the sub-advisory agreement, and subject to the
supervision of the Board of Trustees, BT directs the investments of
the fund in accordance with its investment objective, policies and
limitations, and provides custodial services to the fund.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT-RELATED EXPENSES" IN THE "MANAGEMENT CONTRACTS"
SECTION ON PAGE 70.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR; the fees payable to FSC and FIIOC; and, for Index 500, the
costs associated with securities lending, each fund or each class
thereof, as applicable, pays all of its expenses that are not assumed
by those parties. Each fund pays for typesetting, printing, and
mailing proxy materials to shareholders, legal expenses, and the fees
of the custodian (except Index 500), auditor, and non-interested
Trustees. Each fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each fund's transfer agent
agreement, FIIOC bears the costs of providing these services to
existing shareholders of the applicable classes. Other expenses paid
by each fund include interest, taxes, brokerage commissions, the
fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under
federal securities laws and making necessary filings under state
securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation. Each fund also pays
the costs related to the solicitation of fund proxies from contract
holders.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY FEES (INDEX 500 PORTFOLIO)" IN
THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 70.
MANAGEMENT FEE (INDEX 500 PORTFOLIO). For the services of FMR under
the management contract, Index 500 pays FMR a monthly management fee
at the annual rate of 0.24% of the fund's average net assets
throughout the month.
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOR MONEY MARKET, INVESTMENT GRADE BOND,
AND HIGH INCOME PORTFOLIOS FOUND ON PAGE 71.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $ 1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
over - 1,260 .0920
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOR EQUITY-INCOME, BALANCED, GROWTH, GROWTH
& INCOME, GROWTH OPPORTUNITIES, OVERSEAS, ASSET MANAGER, CONTRAFUND,
ASSET MANAGER: GROWTH, AND MID CAP PORTFOLIOS FOUND ON PAGE 72.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
over - 1,260 .2167
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 74.
For Index 500, FMR may, from time to time, voluntarily reimburse all
or a portion of the fund's operating expenses (exclusive of interest,
taxes, securities lending costs, brokerage commissions, and
extraordinary expenses), which is subject to revision or termination.
FMR retains the ability to be repaid for these expense reimbursements
in the amount that expenses fall below the limit prior to the end of
the fiscal year.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 74.
MANAGEMENT-RELATED SERVICES (INDEX 500 PORTFOLIO). Index 500 has also
entered into a securities lending agreement with BT. Under the terms
of the agreement, BT retains up to 30% of aggregate annual lending
revenues for providing securities lending services.
THE FOLLOWING INFORMATION REPLACES THE SECOND AND THIRD PARAGRAPHS
FOUND UNDER THE HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS"
SECTION ON PAGE 74.
Under the sub-advisory agreement, for providing investment management
and custodial services to Index 500 Portfolio, FMR pays BT fees at an
annual rate of 0.006% of the average net assets of the fund.
For the fiscal years ended December 31, 1998, 1997, and 1996, Index
500 Portfolio paid FMR management fees of $6,919,949, $4,102,533, and
$1,346,765, respectively, and for the fiscal years ended December 31,
1998 and 1997, the fund paid BT sub-advisory fees of $42,017 and $54,
respectively. Prior to October 1, 1999, the fund paid a management fee
at an annual rate of 0.24% of its average net assets to FMR and a
sub-advisory fee (representing 40% of net income from securities
lending) to BT.
THE FOLLOWING INFORMATION SUPPLEMENTS THE SIMILAR INFORMATION FOUND
UNDER THE HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION
ON PAGE 74.
For the fiscal year ended December 31, 1998, FMR paid BT fees of
$149,981.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 74.
On behalf of High Income, Balanced, Growth & Income, Growth
Opportunities, Asset Manager, Contrafund Asset Manager: Growth,
and Mid Cap Portfolios, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. On behalf of Overseas
Portfolio, FMR has entered into sub-advisory agreements with FMR U.K.,
FMR Far East, and FIIA. FIIA, in turn, has entered into a
sub-advisory agreement with FIIA(U.K.)L. Pursuant to the sub-advisory
agreements, FMR may receive from the sub-advisers inves tment
research and advice on issuers outside the United States from the
sub-advisers.
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 74.
On behalf of High Income, Balanced, Growth & Income, Growth
Opportunities, Asset Manager, Contrafund Asset Manager: Growth,
Mid Cap, Overseas Portfolios FMR Far East has entered into a
sub-advisory agreement with FIJ pursuant to which FMR Far East may
receive from FIJ investment research and advice relating to Japanese
issuers (and such other Asian issuers as FMR Far East may
designate).
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 75.
On behalf of High Income, Balanced, Growth & Income, Growth
Opportunities, Asset Manager, Contrafund, Asset Manager: Growth, and
Mid Cap Portfolios, for providing discretionary investment management
and executing portfolio transactions, the sub-advisers are compensated
as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East, a fee equal
to 50% of its monthly management fee with respect to the fund's
average net assets managed by the sub-adviser on a discretionary
basis.
T HE FOLLOWING INFORMATION REPLACES THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 75.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FIIA and FIJ fees equal to 30% of
FMR's monthly management fee with respect to the average net assets
held by the fund for which the sub-adviser has provided FMR with
investment advice and research servi ces.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far Eas t.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND UNDER
THE HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION ON
PAGE 76.
For discretionary investment management and execution of portfolio
transactions, no fees were paid to FMR U.K., FMR Far East or FIIA on
behalf of High Income, Balanced, Growth & Income, Growth
Opportunities, Asset Manager, Contrafund, Asset Manager: Growth, Mid
Cap, and Overseas Portfolios for the past three fiscal years.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "DESCRIPTION OF THE TRUSTS" SECTION BEGINNING ON PAGE 79.
AUDITORS. PricewaterhouseCoopers LLP, One Post Office Square, Boston,
Massachusetts serves as independent accountant for Equity-Income
Portfolio, Growth Portfolio, High Income Portfolio, Money Market
Portfolio, and Overseas Portfolio. The auditor examines financial
statements for the funds and provides other audit, tax, and related
services. PricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts serves as independent accountant for Mid Cap Portfolio.
The auditor examines financial statements for the fund and provides
other audit, tax, and related services. PricewaterhouseCoopers LLP,
160 Federal Street, Boston, Massachusetts served as independent
accountant for Asset Manager Portfolio, Asset Manager: Growth
Portfolio, Contrafund Portfolio, Index 500 Portfolio, Investment Grade
Bond Portfolio, Balanced Portfolio, Growth & Income Portfolio, and
Growth Opportunities Portfolio for the most recent fiscal period. The
auditor examined financial statements for the funds and provided other
audit, tax, and related services. Effective February 18, 1999,
Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts
serves as independent accountant for Asset Manager Portfolio, Asset
Manager: Growth Portfolio, Contrafund Portfolio, Index 500 Portfolio,
Investment Grade Bond Portfolio, Balanced Portfolio, Growth & Income
Portfolio, and Growth Opportunities Portfolio for the next fiscal
period. The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
SUPPLEMENT TO THE
VARIABLE INSURANCE
PRODUCTS FUND:
SERVICE CLASS
OVERSEAS PORTFOLIO
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found in the
"Fund Management" section on page 8.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East) 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.
The following information supplements similar information found in the
"Fund Management" section on page 8.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of September
28, 1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for the fund.
The following information replaces similar information found in the
"Fund Management" section on page 8.
FMR pays FMR U.K, FMR Far East, and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East pays FIJ for
providing sub-advisory services.
SUPPLEMENT TO THE
VARIABLE INSURANCE
PRODUCTS FUND:
INITIAL CLASS
HIGH INCOME PORTFOLIO
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
4.
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1998
HIGH INCOME PORTFOLIO - -4.33% 8.80% 11.08%
INITIAL CLASS
Merrill Lynch High Yield 3.66% 9.01% 11.08%
Master Index
Merrill Lynch High Yield 2.95% 9.12% 11.18%
Master II Index
Lipper High Current Yield -0.44% 7.37% 9.34%
Funds Average
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
4.
Going forward, High Income Portfolio's performance will be compared to
the Merrill Lynch High Yield Master II Index rather than the Merrill
Lynch High Yield Master Index because the Merrill Lynch High Yield
Master II Index contains deferred interest bonds and payment-in-kind
securities and is therefore a better representation of the high yield
bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The followin g information replaces similar information found in the
"Fund Management" section on page 8.
(small solid bullet) F idelity Management & Research Far East Inc.
(FMR Far East) 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 advic e on
issuers based out side the United States and may also provide
investment advisory services for the fund.
The following information supplements similar information found in
the "Fund Management" section on page 8.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of September
28, 1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for the fund.
The following information replaces similar information found in the
"Fund Management" section on page 8.
FMR pays FMR U.K and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory
services.
SUPPLEMENT TO THE
VARIABLE INSURANCE
PRODUCTS FUND:
INITIAL CLASS
OVERSEAS PORTFOLIO
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found in the
"Fund Management" section on page 8.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East) 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.
The following information supplements similar information found in the
"Fund Management" section on page 8.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of September
28, 1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for the fund.
The following information replaces similar information found in the
"Fund Management" section on page 8.
FMR pays FMR U.K., FMR Far East, and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East pays FIJ for
providing sub-advisory services.
SUPPLEMENT TO THE
VARIABLE INSURANCE PRODUCTS FUNDS:
INITIAL CLASS
MONEY MARKET, INVESTMENT GRADE BOND, HIGH INCOME,
ASSET MANAGER, ASSET MANAGER: GROWTH, BALANCED, EQUITY-INCOME, INDEX
500,
GROWTH & INCOME, GROWTH OPPORTUNITIES, CONTRAFUND, GROWTH, MID CAP,
AND OVERSEAS PORTFOLIOS
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
15.
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1998
HIGH INCOME PORTFOLIO - -4.33% 8.80% 11.08%
INITIAL CLASS
Merrill Lynch High Yield 3.66% 9.01% 11.08%
Master Index
Merrill Lynch High Yield 2.95% 9.12% 11.18%
Master II Index
Lipper High Current Yield -0.44% 7.37% 9.34%
Funds Average
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
16.
Going forward, High Income Portfolio's performance will be compared to
the Merrill Lynch High Yield Master II Index rather than the Merrill
Lynch High Yield Master Index because the Merrill Lynch High Yield
Master II Index contains deferred interest bonds and payment-in-kind
securities and is therefore a better representation of the high yield
bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces the fifth paragraph found in the
"Fund Management" section on page 27.
BT serves as sub-adviser and custodian for Index 500. BT chooses the
fund's investments and places orders to buy and sell the fund's
investments.
The following information replaces the eighth paragraph found in the
"Fund Management" section on page 27. (Index 500 Portfolio)
Effective June 4, 1999, Bankers Trust Corporation and all of its
subsidiaries, including BT, merged with and into a subsidiary of
Deutsche Bank AG. At a meeting held on March 18, 1999, the fund's
Board of Trustees approved a new sub-advisory agreement among the
fund, FMR and BT or its successor by merger that became effective June
4, 1999. At a meeting held on September 15, 1999, shareholders
approved this agreement.
The following information replaces similar information found in the
"Fund Management" section on page 27.
(small solid bullet) Fidelity Management & Research Far East Inc.
(FMR Far East) serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. 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 each fund.
The following information supplements similar information found in
the "Fund Management" section on page 27.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. As of November 28,
1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for each fund.
Effective August 2, 1999, the following information replaces the
fourth to the last paragraph found in the "Fund Management" section on
page 27.
David Felman is Vice President and manager of Mid Cap Portfolio. He
also manages other Fidelity funds. Mr. Felman joined Fidelity as an
analyst in 1993.
The following information replaces the last paragraph found in the
"Fund Management" section on page 28.
Index 500 pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fund's annual management
fee rate is 0.24% of its average net assets. FMR pays BT for providing
investment management and custodial services.
Prior to October 1, 1999, Index 500 paid a management fee at an annual
rate of 0.24% of its average net assets to FMR and a sub-advisory fee
(representing 40% of net income from securities lending) to BT.
The following information replaces footnote A to the Total Annual
Class Operating Expenses table found in the "Fund Management" section
on page 29.
A EFFECTIVE AUGUST 27, 1992, FMR HAS VOLUNTARILY AGREED TO REIMBURSE
INITIAL CLASS OF INDEX 500 TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, SECURITIES LENDING COSTS, BROKERAGE
COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS
AVERAGE NET ASSETS, EXCEED 0.28%. THIS ARRANGEMENT CAN BE DISCONTINUED
BY FMR AT ANY TIME.
The following information replaces similar information found in the
"Fund Management" section on page 29.
FMR pays FIMM, FMR U.K., FMR Far East, and FIIA for providing
sub-advisory services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East
pays FIJ for providing sub-advisory services.
SUPPLEMENT TO THE
VARIABLE INSURANCE PRODUCTS FUNDS:
INITIAL CLASS
MONEY MARKET, INVESTMENT GRADE BOND, HIGH INCOME,
ASSET MANAGER, ASSET MANAGER: GROWTH, BALANCED, EQUITY-INCOME, INDEX
500, GROWTH & INCOME, GROWTH OPPORTUNITIES, CONTRAFUND, GROWTH, MID
CAP, AND OVERSEAS PORTFOLIOS
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
22.
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1998
HIGH INCOME PORTFOLIO - -4.33% 8.80% 11.08%
INITIAL CLASS
Merrill Lynch High Yield 3.66% 9.01% 11.08%
Master Index
Merrill Lynch High Yield 2.95% 9.12% 11.18%
Master II Index
Lipper High Current Yield -0.44% 7.37% 9.34%
Funds Average
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
24.
Going forward, High Income Portfolio's performance will be compared to
the Merrill Lynch High Yield Master II Index rather than the Merrill
Lynch High Yield Master Index because the Merrill Lynch High Yield
Master II Index contains deferred interest bonds and payment-in-kind
securities and is therefore a better representation of the high yield
bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces the fifth paragraph found in the
"Fund Management" section on page 44.
BT serves as sub-adviser and custodian for Index 500. BT chooses the
fund's investments and places orders to buy and sell the fund's
investments.
The following information replaces the eighth paragraph found in the
"Fund Management" section on page 44. (Index 500 Portfolio)
Effective June 4, 1999, Bankers Trust Corporation and all of its
subsidiaries, including BT, merged with and into a subsidiary of
Deutsche Bank AG. At a meeting held on March 18, 1999, the fund's
Board of Trustees approved a new sub-advisory agreement among the
fund, FMR and BT or its successor by merger that became effective June
4, 1999. At a meeting held on September 15, 1999, shareholders
approved this agreement.
The following information replaces similar information found in the
"Fund Management" section on page 45.
(small solid bullet) Fidelity Management & Research Far East Inc.
(FMR Far East) serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. 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 each fund.
The following information supplements similar information found in
the "Fund Management" section on page 45.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. As of November 28,
1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for each fund.
Effective August 2, 1999, the following information replaces the
second to the last paragraph found in the "Fund Management" section on
page 45.
David Felman is Vice President and manager of Mid Cap Portfolio. He
also manages other Fidelity funds. Mr. Felman joined Fidelity as an
analyst in 1993.
The following information replaces the second full paragraph found in
the "Fund Management" section on page 48.
Index 500 pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fund's annual management
fee rate is 0.24% of its average net assets. FMR pays BT for providing
investment management and custodial services.
Prior to October 1, 1999, Index 500 paid a management fee at an annual
rate of 0.24% of its average net assets to FMR and a sub-advisory fee
(representing 40% of net income from securities lending) to BT.
The following information replaces footnote A to the Total Annual
Class Operating Expenses table found in the "Fund Management" section
on page 49.
A EFFECTIVE AUGUST 27, 1992, FMR HAS VOLUNTARILY AGREED TO REIMBURSE
INITIAL CLASS OF INDEX 500 TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, SECURITIES LENDING COSTS, BROKERAGE
COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS
AVERAGE NET ASSETS, EXCEED 0.28%. THIS ARRANGEMENT CAN BE DISCONTINUED
BY FMR AT ANY TIME.
The following information replaces similar information found in the
"Fund Management" section on page 50.
FMR pays FIMM, FMR U.K., FMR Far East, and FIIA for providing
sub-advisory services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East
pays FIJ for providing sub-advisory services.
SUPPLEMENT TO THE
VARIABLE INSURANCE PRODUCTS FUNDS:
INITIAL CLASS
MONEY MARKET, INVESTMENT GRADE BOND, HIGH INCOME,
ASSET MANAGER, ASSET MANAGER: GROWTH, BALANCED, EQUITY-INCOME, INDEX
500, GROWTH & INCOME, GROWTH OPPORTUNITIES, CONTRAFUND, GROWTH, AND
OVERSEAS PORTFOLIOS
APRIL 30, 1999
(AS SUPPLEMENTED
MAY 5, 1999) PROSPECTUS
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
14.
For the periods ended Past 1 year Past 5 years Past 10 years
December 31, 1998
HIGH INCOME PORTFOLIO - -4.33% 8.80% 11.08%
INITIAL CLASS
Merrill Lynch High Yield 3.66% 9.01% 11.08%
Master Index
Merrill Lynch High Yield 2.95% 9.12% 11.18%
Master II Index
Lipper High Current Yield -0.44% 7.37% 9.34%
Funds Average
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
15.
Going forward, High Income Portfolio's performance will be compared to
the Merrill Lynch High Yield Master II Index rather than the Merrill
Lynch High Yield Master Index because the Merrill Lynch High Yield
Master II Index contains deferred interest bonds and payment-in-kind
securities and is therefore a better representation of the high yield
bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces the fifth paragraph found in the
"Fund Management" section on page 26.
BT serves as sub-adviser and custodian for Index 500. BT chooses the
fund's investments and places orders to buy and sell the fund's
investments.
The following information replaces the eighth paragraph found in the
"Fund Management" section on page 26. (Index 500 Portfolio)
Effective June 4, 1999, Bankers Trust Corporation and all of its
subsidiaries, including BT, merged with and into a subsidiary of
Deutsche Bank AG. At a meeting held on March 18, 1999, the fund's
Board of Trustees approved a new sub-advisory agreement among the
fund, FMR and BT or its successor by merger that became effective June
4, 1999. At a meeting held on September 15, 1999, shareholders
approved this agreement.
The following information replaces similar information found in the
"Fund Management" section on page 26.
(small solid bullet) Fidelity Management & Research Far East Inc.
(FMR Far East) serves as a sub-adviser for Growth Opportunities,
Contrafund, Overseas, Balanced, Growth & Income, Asset Manager, Asset
Manager: Growth, and High Income. 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 each fund.
The following information supplements similar information found in
the "Fund Management" section on page 26.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for Growth Opportunities,
Contrafund, Overseas, Balanced, Growth & Income, Asset Manager, Asset
Manager: Growth, and High Income. As of November 28, 1999, FIJ had
approximately $16.3 billion in discretionary assets under management.
Currently, FIJ provides investment research and advice on issuers
based outside the United States for each fund.
The following information replaces the last paragraph found in the
"Fund Management" section on page 27.
Index 500 pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fund's annual management
fee rate is 0.24% of its average net assets. FMR pays BT for providing
investment management and custodial services.
Prior to October 1, 1999, Index 500 paid a management fee at an annual
rate of 0.24% of its average net assets to FMR and a sub-advisory fee
(representing 40% of net income from securities lending) to BT.
The following information replaces footnote A to the Total Annual
Class Operating Expenses table found in the "Fund Management" section
on page 28.
A EFFECTIVE AUGUST 27, 1992, FMR HAS VOLUNTARILY AGREED TO REIMBURSE
INITIAL CLASS OF INDEX 500 TO THE EXTENT THAT TOTAL OPERATING EXPENSES
(EXCLUDING INTEREST, TAXES, SECURITIES LENDING COSTS, BROKERAGE
COMMISSIONS AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF ITS
AVERAGE NET ASSETS, EXCEED 0.28%. THIS ARRANGEMENT CAN BE DISCONTINUED
BY FMR AT ANY TIME.
The following information replaces similar information found in the
"Fund Management" section on page 28.
FMR pays FIMM, FMR U.K., FMR Far East, and FIIA for providing
sub-advisory services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East
pays FIJ for providing sub-advisory services.
SUPPLEMENT TO THE
VARIABLE INSURANCE PRODUCTS FUNDS:
SERVICE CLASS
HIGH INCOME,
ASSET MANAGER, ASSET MANAGER: GROWTH, BALANCED, EQUITY-INCOME,
GROWTH & INCOME, GROWTH OPPORTUNITIES, CONTRAFUND, GROWTH, MID CAP,
AND
OVERSEAS PORTFOLIOS
APRIL 30, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
13.
For the periods ended Past 1 year Life of class*
December 31, 1998
HIGH INCOME PORTFOLIO - -4.34% -4.34%A
SERVICE CLASS
Merrill Lynch High Yield 3.66% 3.66%A
Master Index
Merrill Lynch High Yield 2.95% 2.95%A
Master II Index
Lipper High Current Yield -0.44% -0.44%A
Funds Average
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1998.
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
13.
Going forward, High Income Portfolio's performance will be compared to
the Merrill Lynch High Yield Master II Index rather than the Merrill
Lynch High Yield Master Index because the Merrill Lynch High Yield
Master II Index contains deferred interest bonds and payment-in-kind
securities and is therefore a better representation of the high yield
bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces similar information found in the
"Fund Management" section on page 23.
(small solid bullet) Fidelity Management & Research Far East Inc.
(FMR Far East) serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. 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 each fund.
The following information supplements similar information found in
the "Fund Management" section on page 23.
(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for Mid Cap, Growth
Opportunities, Contrafund, Overseas, Balanced, Growth & Income, Asset
Manager, Asset Manager: Growth, and High Income. As of November 28,
1999, FIJ had approximately $16.3 billion in discretionary assets
under management. Currently, FIJ provides investment research and
advice on issuers based outside the United States for each fund.
Effective August 2, 1999, the following information replaces similar
information found in the "Fund Management" section on page 23.
David Felman is Vice President and manager of Mid Cap Portfolio. He
also manages other Fidelity funds. Mr. Felman joined Fidelity as an
analyst in 1993.
The following information replaces similar information found in the
"Fund Management" section on page 25.
FMR pays FIMM, FMR U.K., FMR Far East, and FIIA for providing
sub-advisory services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East
pays FIJ for providing sub-advisory services.
