EXHIBIT 24(A)(1)
FIDELITY
(Registered trademark)
MASSACHUSETTS
TAX-FREE
PORTFOLIOS
ANNUAL REPORT
JANUARY 31, 1994
CONTENTS
CHECK PAGE NUMBERS !!!
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PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
FIDELITY MASSACHUSETTS
TAX-FREE HIGH YIELD PORTFOLIO
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
FIDELITY MASSACHUSETTS
TAX-FREE MONEY MARKET PORTFOLIO
PERFORMANCE 31 How the fund has done over time.
FUND TALK 33 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 35 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 36 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 41 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 45 Footnotes to the financial
statements.
REPORT OF INDEPENDENT
ACCOUNTANTS 49 The auditor's opinion.
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THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUNDS SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments-either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888
or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
FIDELITY MASSACHUSETTS TAX-FREE HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value). You can also look at the fund's income. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Tax-Free High Yield 12.57% 60.71% 164.67%
Lehman Brothers Municipal Bond Index 12.26% 61.39% 181.37%
Average Massachusetts Tax-Exempt
Municipal Bond Fund 12.43% 57.70% 164.63%
Consumer Price Index 2.52% 20.73% 43.47%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or ten years. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, you would end up
with $1,050. You can compare these figures to the performance of the Lehman
Brothers Municipal Bond index - a broad gauge of the municipal bond market.
To measure how the fund stacked up against its peers, you can look at the
average Massachusetts tax-exempt municipal bond fund, which reflects the
performance of 31 Massachusetts tax-exempt municipal bond funds tracked by
Lipper Analytical Services. Both benchmarks include reinvested dividends
and capital gains, if any. Comparing the fund's performance to the consumer
price index helps show how your fund did compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Tax-Free High Yield 12.57% 9.95% 10.22%
Lehman Brothers Municipal Bond Index 12.26% 10.05% 10.90%
Average Massachusetts Tax-Exempt
Municipal Bond Fund 12.43% 9.54% 10.22%
Consumer Price Index 2.52% 3.84% 3.68%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Mass Free High Yield (070) Lehman Bros Muni Bond Index
01/31/84 10000.00 10000.00
02/29/84 10111.11 9899.30
03/31/84 10143.00 9911.87
04/30/84 9694.97 9927.14
05/31/84 9097.81 9337.66
06/30/84 9514.83 9540.38
07/31/84 10062.00 10034.48
08/31/84 10196.69 10259.55
09/30/84 10130.88 10190.61
10/31/84 10254.36 10318.50
11/30/84 10390.93 10470.39
12/31/84 10625.54 10666.60
01/31/85 11210.47 11282.39
02/28/85 10990.06 11001.01
03/31/85 11120.72 11095.94
04/30/85 11382.84 11502.06
05/31/85 11781.04 11901.29
06/30/85 11966.89 12026.14
07/31/85 12062.38 12049.71
08/31/85 11990.16 11965.60
09/30/85 11834.55 11845.59
10/31/85 12177.75 12251.42
11/30/85 12520.11 12690.87
12/31/85 12711.74 12802.43
01/31/86 13356.19 13556.49
02/28/86 13847.01 14094.00
03/31/86 13929.97 14098.51
04/30/86 13856.32 14109.23
05/31/86 13627.99 13879.53
06/30/86 13727.43 14011.94
07/31/86 13849.72 14096.99
08/31/86 14368.36 14728.12
09/30/86 14403.93 14765.08
10/31/86 14636.84 15020.08
11/30/86 14842.27 15317.62
12/31/86 14858.45 15275.35
01/31/87 15179.29 15735.29
02/28/87 15295.21 15812.71
03/31/87 15246.16 15645.09
04/30/87 14478.73 14860.02
05/31/87 14294.13 14786.32
06/30/87 14539.98 15220.44
07/31/87 14749.85 15375.69
08/31/87 14801.93 15410.29
09/30/87 14201.07 14842.11
10/31/87 14011.66 14894.65
11/30/87 14374.57 15283.55
12/31/87 14671.30 15505.31
01/31/88 15133.35 16057.61
02/29/88 15307.28 16227.34
03/31/88 15040.13 16038.29
04/30/88 15162.67 16160.18
05/31/88 15243.76 16113.48
06/30/88 15408.50 16349.22
07/31/88 15517.51 16455.82
08/31/88 15570.83 16470.30
09/30/88 15797.50 16768.41
10/31/88 16082.87 17064.37
11/30/88 15990.12 16908.06
12/31/88 16236.87 17081.03
01/31/89 16469.28 17434.27
02/28/89 16361.39 17235.34
03/31/89 16373.24 17194.15
04/30/89 16775.50 17602.34
05/31/89 17074.05 17967.94
06/30/89 17219.73 18211.95
07/31/89 17351.83 18459.81
08/31/89 17284.52 18279.09
09/30/89 17218.41 18224.25
10/31/89 17381.53 18446.59
11/30/89 17627.72 18769.40
12/31/89 17738.23 18923.31
01/31/90 17651.30 18834.37
02/28/90 17869.86 19002.00
03/31/90 17900.52 19007.70
04/30/90 17665.49 18870.84
05/31/90 18049.80 19282.23
06/30/90 18238.93 19451.91
07/31/90 18496.72 19737.86
08/31/90 18274.84 19451.66
09/30/90 18336.04 19463.33
10/31/90 18398.63 19815.61
11/30/90 18967.21 20213.91
12/31/90 19048.07 20302.85
01/31/91 19283.44 20574.91
02/28/91 19431.36 20753.91
03/31/91 19528.15 20762.21
04/30/91 19798.82 21038.35
05/31/91 19998.28 21225.59
06/30/91 20037.76 21204.36
07/31/91 20328.12 21463.06
08/31/91 20513.31 21746.37
09/30/91 20701.87 22029.07
10/31/91 20886.40 22227.33
11/30/91 20941.72 22289.57
12/31/91 21201.56 22768.80
01/31/92 21386.00 22821.16
02/29/92 21454.14 22828.01
03/31/92 21475.30 22837.14
04/30/92 21666.02 23040.39
05/31/92 21902.49 23312.27
06/30/92 22266.73 23703.91
07/31/92 22865.42 24415.03
08/31/92 22577.75 24175.76
09/30/92 22769.97 24332.91
10/31/92 22385.30 24094.44
11/30/92 22951.88 24525.73
12/31/92 23170.86 24775.90
01/31/93 23511.54 25063.30
02/28/93 24320.43 25970.59
03/31/93 24100.43 25695.30
04/30/93 24321.88 25954.82
05/31/93 24486.86 26100.17
06/30/93 24872.63 26536.04
07/31/93 24855.28 26570.54
08/31/93 25373.93 27123.21
09/30/93 25807.33 27432.41
10/31/93 25870.76 27484.53
11/30/93 25658.21 27242.67
12/31/93 26164.75 27817.49
01/31/94 26467.12 28137.00
$28,137
$26,467
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Massachusetts Tax-Free High Yield Portfolio ten years ago on January 31,
1984. As the chart shows, by January 31, 1994, the value of your investment
would have grown to $26,467 - a 164.67% increase on your initial
investment. For comparison, look at how the Lehman Brothers Municipal Bond
index did over the same period. With dividends reinvested, the same $10,000
would have grown to $28,137- a 181.37% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
INCOME
YEARS ENDED JANUARY 31, 1994 1993 1992 1991 1990
Income return 6.32% 6.67% 7.08% 7.55% 7.45%
Capital gain return 2.33% 0.65% 0.76% 1.06% 0.00%
Change in share price 3.92% 2.62% 3.06% 0.64% (0.27)%
Total return 12.57% 9.94% 10.90% 9.25% 7.18%
INCOME returns, capital gains returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED JANUARY 31, 1994 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 35.83(cents) 71.39(cents)
Annualized dividend rate n/a 5.81% 5.90%
Annualized yield 5.19% n/a n/a
Tax-equivalent yield 9.22% n/a n/a
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $12.23 over
the past six months and $12.11 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 43.68%
combined federal and state tax bracket.
FIDELITY MASSACHUSETTS TAX-FREE HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond investments - including
tax-free issues - provided
historically attractive returns for the
12 months ended January 31, 1994.
Falling interest rates pushed up bond
prices steadily through mid-October,
when the yield on the benchmark
30-year Treasury bond reached a
historic low of 5.79%. By year-end, a
strengthening economy had fueled
mild inflation fears, which helped
push up the yield on the 30-year
bond to 6.35% by December 31.
Inflation jitters eased in January, and
the yield on the long Treasury
dropped to 6.23% by month end.
Two factors affected municipal
bonds specifically: on the positive
side, higher federal taxes -
approved in August and discussed
all year - boosted demand. But
record new issuance kept supplies
high, which somewhat dampened
prices. The Lehman Brothers
Municipal Bonds Index - a broad
measure of the tax-free market -
rose 12.26% during the 12 months
then ended January 31. By
comparison, the Lehman Brothers
Aggregate Bond Index - which
tracks investment-grade taxable
bonds - rose 9.14%, due in part to
poor performance by
mortgage-backed securities.
Globally, falling interest rates and low
inflation drove strong returns in
Europe, Japan, and many of the
emerging markets. The Salomon
Brothers World Government Bond
Index - which includes U.S. issues
- - rose 12.22%, while the J.P.
Morgan Emerging Markets Bond
Index was up 43.06%.
An interview with Guy Wickwire, Portfolio Manager of Fidelity
Massachusetts Tax-Free High Yield Portfolio
Q. GUY, HOW HAS THE FUND PERFORMED?
A. It's been a good year. For the 12 months ended January 31, 1994, the
fund posted a return of 12.57%. That compares to 12.43% for the average
Massachusetts tax-exempt municipal bond fund, according to Lipper
Analytical Services.
Q. WHAT HELPED THE FUND COME OUT AHEAD DURING THE PERIOD?
A. Falling interest rates helped boost the prices of municipal bonds in
general. The fund had the added advantage of being well-positioned for the
decline in rates. During February 1993, Massachusetts issuers brought out
an unusually high number of new bonds, and many of them were attractively
priced. I bought some of those bonds, reducing the fund's position in
short-term notes from 8% to about 2%. During most of the year, the shift
from cash increased the fund's duration - a measure of how sensitive its
price is to interest rates. The higher duration helped the fund post bigger
gains as rates declined. In January, however, I was concerned that the
Federal Reserve might raise rates slightly, so I temporarily shortened the
duration to 6.2 years.
Q. WHY DID YOU REDUCE THE FUND'S STAKE IN GENERAL OBLIGATION BONDS, WHICH
ARE BACKED BY ISSUERS' TAXING POWER?
A. At the end of last July, I had about 15% of the fund's investments in
GO's which I pared back to 12% by the end of January. The reason I
lightened up on state general obligation bonds was that the market's
perception of those bonds' credit quality - that is, the state's ability to
meet interest and principal payments on the bonds - had improved. Once
investors decided that the bonds were once again high-quality issues, their
prices rose. So I took some profits and used the proceeds to buy more
attractively-priced, higher yielding bonds backed by financially strong
issuers.
Q. WHAT SECTORS DID YOU INVEST IN?
A. Health-care bonds continued to be the fund's largest investment, at 30%
of the total. Issues of small hospitals like Emerson Hospital in Concord
offer relatively high yields because they aren't backed by the broad taxing
power that stands behind general obligation bonds. But they are still
relatively safe from the risk that the issuers will default on principal or
interest payments. They were strong performers during the past year.
Investors seemed to be saying that health-care reform won't have an
enormous impact on most sound health-care institutions.
Q. WHAT ABOUT TRANSPORTATION?
A. Although it's not one of the fund's top five sectors, transportation has
moved up - from 6.7% of the fund six months ago to about 7.3% at the end of
January. What I bought were mainly bonds issued by the Massachusetts
Turnpike Authority and the Massachusetts Port Authority. The Turnpike
hadn't sold bonds for many years, so the fund had never had an opportunity
to buy them before. The Turnpike is well-traveled and generates excellent
revenues, and the yield on the issue is attractive. The Port Authority is
primarily backed by revenues from Logan Airport, which is one of only two
AA-rated airports in America.
Q. WHAT'S THE OUTLOOK FOR THE MASSACHUSETTS ECONOMY?
A. During the past year, the state's economy continued to show slow but
steady improvement as housing, retail and financial services offset a
modest contraction in defense. I expect Massachusetts to match the growth
of the national economy over the coming year.
Q. WHAT ABOUT THE OVERALL MUNICIPAL MARKET?
A. Even though the Federal Reserve raised the federal funds rate - the rate
banks charge each other for overnight loans - from 3.00% to 3.25% in early
February, I still believe interest rates will be mostly stable for the
foreseeable future. I don't see yields rising by much, because inflationary
pressures are mild. And rates aren't likely to decline sharply either,
since the economy is growing. However, the supply of new municipal issues
will be much lower in 1994 than it was last year, especially in
Massachusetts. Much of that supply was caused by municipalities refunding
their old bonds - in fact, such refundings accounted for two-thirds of new
issues across the country and 85% in Massachusetts - and you can only
refund a bond once. The reduction in supply could help municipal bond
prices, which would in turn benefit the fund.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Massachusetts state
income taxes
START DATE: November 10,
1983
SIZE: as of January 31, 1994,
over $1.3 billion
MANAGER: Guy Wickwire,
since November 1983;
manager,
Fidelity Insured Tax-Free,
since October 1993; Fidelity
High Yield Tax-Free,
September 1981 - September
1993;
Fidelity Advisor High Income
Municipal, September 1987 -
January 1992
(checkmark)
GUY WICKWIRE ON HIS
INVESTMENT STRATEGY:
" About 17% of the fund's
investments are in bonds that
are not rated by agencies such
as Moody's or Standard &
Poor's, which may seem like a
risky strategy. But Fidelity's
credit analysts come up with
ratings for all of the non-rated
bonds in the portfolio. Taking
those ratings into account,
about 10% of the fund's
investments are in issues that
are below investment grade. In
other words, more than 85% of
the bonds the fund owns are
investment-grade quality. The
fund can invest up to 33% of its
assets in issues that are below
investment grade, but I haven't
found many that I'm
comfortable with. In fact, the
overall quality of the fund is a
bit higher than it was a year
ago. One reason is that its
largest holding, Massachusetts
Municipal Electric Corp., was
upgraded by Moody's from
Baa1 to single-A."
(bullet) As of January 31, 1994,
30% of the fund's investments
were in the health-care
sector, 11% in water and gas
utilities and 7% in
transportation issues.
(bullet) The fund's duration, a
measure of its price sensitivity
to changes in interest rates,
was about 6.2% at the end of
January. That means that a
one percentage point increase
in interest rates could cause a
fund's share price to decline
about 6.2%, while a one
percentage point decline could
cause the price to rise 6.2%.
FIDELITY MASSACHUSETTS TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF JANUARY 31, 1994
% OF FUND'S INVESTMENT % OF FUND'S INVESTMENT
S S
IN THESE SECTORS
6 MONTHS AGO
Health Care 30.2 29.9
General Obligation 12.4 15.1
Education 12.0 10.0
Water & Sewer 11.0 9.9
Electric Revenue 8.0 8.0
AVERAGE YEARS TO MATURITY AS OF JANUARY 31, 1994
6 MONTHS AGO
Years 19.9 20.4
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF JANUARY 31, 1994
6 MONTHS AGO
Years 6.2 7.6
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF JANUARY 31, 1994
(MOODY'S RATINGS)
Row: 1, Col: 1, Value: 20.5
Row: 1, Col: 2, Value: 44.1
Row: 1, Col: 3, Value: 15.5
Row: 1, Col: 4, Value: 2.2
Row: 1, Col: 5, Value: 17.7
Aaa 20.5%
Aa, A 44.1%
Baa 15.5%
Ba, B 2.2%
Non-rated 17.7%
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. NON-RATED SECURITIES CONSIDERED TO
BE BAA OR BETTER BY FIDELITY ARE 7.5% OF THE FUND'S LONG-TERM INVESTMENTS.
FIDELITY MASSACHUSETTS TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENTS/JANUARY 31, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 97.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - 95.9%
Amherst Gen. Oblig.:
6.50% 1/15/08 Aa $ 795,000 $ 896,362 031231MJ
6.50% 1/15/09 Aa 770,000 859,512 031231MK
6.50% 1/15/10 Aa 750,000 837,187 031231ML
6.50% 1/15/11 Aa 695,000 775,793 031231MM
Andover Gen. Oblig. Ltd. Tax 6.60% 8/1/06 Aa 225,000 257,062 034285NX
Ashburnham & Westminster Reg'l. School Dist.
6% 12/15/13, (MBIA Insured) Aaa 1,000,000 1,057,500 043771CK
Barnstable Ind. Dev. Fing. Auth.
Ind. Dev. Rev. (Whitehall Pavilion Health Proj.)
10.125% 2/15/26,
(FHA Guaranteed) A 3,150,000 3,339,000 068181AA
Bellingham Gen. Oblig.:
7.50% 7/1/06 A 310,000 370,062 079491JL
7.50% 7/1/07 A 310,000 370,062 079491JM
7.50% 7/1/08 A 310,000 370,062 079491JN
7.50% 7/1/09 A 310,000 367,737 079491JP
7.50% 7/1/10 A 310,000 367,737 079491JQ
7.50% 7/1/11 A 300,000 355,874 079491JR
Boston Econ. Dev. & Ind. Corp.
(Boston Army Base 1983 Proj.) 6.25%
8/1/03 AA 5,350,000 5,891,687 100866AB
Boston Gen. Oblig. Unltd. Tax
Series A, 6.75% 7/1/11, (MBIA Insured) Aaa 6,375,000 7,211,718 100852YG
Boston Hsg. Dev. Corp. II Section 8,
(Diendasla Victoria) (FHA Guaranteed):
Series A, 9.23% 9/1/22 AA 2,849,247 2,991,709 100865AA
Series B, 9.23% 9/1/22 AA 143,390 150,559 100865AB
Boston Hsg. Dev. Corp. Mtg. Rev.
Rfdg. Section 8, Series A,
5.15% 7/1/08,
(FHA Guaranteed) (MBIA Insured) Aaa 3,550,000 3,563,312 100874AA
Boston Ind. Dev. Fing. Auth. Rev.
(Massachusetts College of Pharmacy Proj. A):
5.25% 10/1/14 AAA 1,000,000 986,250 100881AU
5.25% 10/1/26 AAA 1,000,000 961,250 100881AV
Boston Ind. Dev. Rev.
(North End Commty. Nursing Home)
11.45% 3/15/25,
(FHA Guaranteed) AA 4,905,000 5,953,443 100883AB
Boston Rev. Rfdg. (Boston City Hosp.)
Series B, 5.75% 2/15/23,
(FHA Guaranteed) Aa 1,000,000 1,015,000 101026BX
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Boston Wtr. & Swr. Commission Rev.
Gen. Series 1984 A, 7% 1/1/11 A $ 500,000 $ 529,374 101029BA
Boston Wtr. & Swr. Commission Gen. Sr.
Series A:
6.10% 11/1/06 A 3,950,000 4,305,500 101029FA
6.10% 11/1/07 A 2,000,000 2,172,500 101029FB
5.75% 11/1/13 A 7,025,000 7,534,312 101029FC
5.25% 11/1/19 A 26,500,000 26,533,124 101029GW
Bourne Gen. Oblig. Unltd. Tax
(Land Acquisition Loan):
8% 12/15/04 Baa 290,000 345,462 102061CV
8% 12/15/05 Baa 290,000 347,637 102061CW
8% 12/15/06 Baa 290,000 348,000 102061CX
8% 12/15/07 Baa 290,000 350,900 102061CY
Brockton Gen. Oblig.:
7.75% 12/15/96 Baa 4,500,000 4,792,500 111745U4
6.125% 6/15/18 Baa 1,000,000 1,042,500 111745Z9
Brockton Hsg. & Dev Corp. Rev. Rfdg.
Multi-Family Hsg. (Douglas House Proj.)
Series 1992 A, 7.375% 9/1/24,
(FNMA Coll.) AAA 8,390,000 9,386,312 111751AB
Dedham-Westwood Wtr. Dist. Rfdg. 5.10%
(MBIA Insured):
5.10% 10/15/12 Aaa 1,000,000 983,749 243671DR
5.15% 10/15/16 Aaa 1,250,000 1,226,562 243671DS
Dighton & Rehoboth Reg'l. School Dist.
(AMBAC Insured):
5.40% 5/15/10 Aaa 385,000 390,294 253795CK
5.40% 5/15/11 Aaa 185,000 187,543 253795CL
5.40% 5/15/12 Aaa 225,000 228,093 253795CM
Framingham Hsg. Dev. Corp. Mtg. Rev.
(Claffin House) Series A,
6.95% 1/1/24, (FHA Guaranteed) AAA 1,820,000 1,997,449 351700AD
Granville Gen. Oblig. (MBIA Insured):
7.30% 7/15/05 Aaa 145,000 176,899 388517AQ
7.30% 7/15/06 Aaa 145,000 177,443 388517AR
7.30% 7/15/07 Aaa 140,000 172,374 388517AS
7.30% 7/15/08 Aaa 140,000 173,074 388517AT
Groton Gen. Oblig. (MBIA Insured):
7.40% 11/15/06 Aaa 150,000 178,874 399316DE
7.40% 11/15/07 Aaa 150,000 178,874 399316DF
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Haverhill Rfdg. Series A, (AMBAC Insured):
6.40% 9/1/03 Aaa $ 1,600,000 $ 1,806,000 419506VU
6.50% 9/1/04 Aaa 1,595,000 1,800,356 419506VV
6.70% 9/1/10 Aaa 5,000,000 5,668,750 419506VW
Haverhill Unltd. Tax Series A, 7% 6/15/12,
(FGIC Insured) Aaa 2,750,000 3,169,375 419506XE
Holyoke Gen. Oblig. 7% 11/1/08 Baa 1,000,000 1,120,000 436704K7
Holyoke School Proj. Loan Act:
7.35% 8/1/02 Baa 2,270,000 2,582,125 436704H2
7.65% 8/1/09 Baa 2,205,000 2,519,213 436704H3
Hudson Ltd. Tax:
7.50% 8/15/01 Baa1 215,000 245,638 443852KX
7.50% 8/15/02 Baa1 215,000 246,713 443852KY
7.50% 8/15/03 Baa1 215,000 247,788 443852KZ
Lawrence Gen. Oblig.:
5.125% 9/15/03 Baa 500,000 505,625 520228WF
5.25% 9/15/04 Baa 500,000 506,875 520228WG
Lawrence School Construction 9.75% 3/15/04,
(AMBAC Insured) Aaa 1,420,000 1,986,225 520228UB
Leominster Gen. Oblig.
7.50% 4/1/09, (MBIA Insured) Aaa 2,300,000 2,682,375 526408XB
Lowell Gen. Oblig.:
Lowell Rfdg.:
Series A, 5.50% 1/15/10 (FSA Insured) Aaa 800,000 822,000 547643K4
Series B 5.60% 11/1/12 (FSA Insured) Aaa 2,500,000 2,568,750 547643M2
Lot B:
8% 1/15/00 Baa1 1,495,000 1,722,988 547643B3
7.20% 2/15/00 Baa1 1,035,000 1,155,319 547643C4
7.40% 11/15/00 Baa 205,000 233,700 547643YL
7.50% 11/15/01 Baa 200,000 229,000 547643YM
7.50% 11/15/02 Baa 200,000 229,000 547643YN
7.60% 11/15/03 Baa 200,000 230,000 547643YP
7.60% 11/15/04 Baa 200,000 230,000 547643YQ
8.40% 1/15/09 Baa1 1,250,000 1,512,500 547643B4
Lowell Hsg. Dev. Corp. Multi-Family Rev.:
Rfdg. Series A, (FNMA Coll.):
7.875% 11/1/00 AAA 870,000 979,838 547655AC
7.875% 11/1/24 AAA 5,440,000 6,181,200 547655AB
Lynn Gen. Oblig. 7.85% 1/15/11 Baa1 3,170,000 4,010,050 551562YJ
Lynn Rfdg. 5.25% 1/15/11 (FSA Insured) Aaa 5,570,000 5,549,113 551562ZP
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Lynn Wtr. & Swr. Commission:
Rfdg. (FGIC Insured):
6.125% 6/1/05 Aaa $ 1,000,000 $ 1,110,000 551592AT
5.35% 12/1/07 Aaa 760,000 790,400 551587BL
5.40% 12/1/08 Aaa 805,000 833,175 551587BM
5.45% 12/1/09 Aaa 850,000 873,375 551587BN
5.50% 12/1/10 Aaa 500,000 513,750 551587BF
Series A, 7.25% 12/1/10 Aaa 2,700,000 3,233,250 551592AK
Massachusetts Bay Trans. Auth. (Gen. Trans. Sys.):
Series A:
Rfdg. 5.50% 3/1/12 A 4,350,000 4,589,250 575566R9
5.50% 3/1/09 A 4,000,000 4,220,000 575566R8
7% 3/1/21 A 1,500,000 1,869,375 575566B7
Series B, 6.20% 3/1/16 A 5,000,000 5,737,500 575566L3
Massachusetts Gen. Oblig.:
(Cap. Appreciation Consolidated Loan)
Rfdg. Series B, 6.50% 8/1/08 A 4,000,000 4,630,000 575823Y5
Series C, 0% 12/1/05 A 46,000,000 26,047,500 575823J3
Consolidated Loan Series B, 0% 7/1/02 A 20,000,000 13,625,000 575823D6
Consolidated Loan Unltd. Tax,
Series A, 5% 1/1/14 A 3,000,000 2,932,500 575826EV
Massachusetts Health & Edl. Facs. Auth. Rev.:
Rfdg. (Massachusetts Gen. Hosp.) Series F,
6.25% 7/1/12, (AMBAC Insured) Aaa 3,500,000 3,941,875 575851PX
Rfdg. (Worcester Polytechnic Institute)
Series E, 6.75% 9/1/11 A 6,765,000 7,593,713 5758505Q
(1st Mtg.) (Fairview Extended Care)
Series A, 10.25% 1/1/21 - 10,000,000 11,075,000 575850M4
(Anna Jaques Hosp.) Series B:
5.90% 10/1/99 Baa 930,000 967,200 575851NG
6% 10/1/00 Baa 985,000 1,030,556 575851NH
6.875% 10/1/12 Baa 3,250,000 3,497,813 575851NJ
(Baystate Medical Center) Series D 5%
7/1/12 Aaa 5,000,000 4,900,000 575851Q8
(Bentley College) Series H, 6.90% 7/1/21,
(MBIA Insured) Aaa 6,720,000 7,702,800 575850W2
(Beth Israel Hosp.) 9.384% 7/1/25,
(AMBAC Insured)(c) Aaa 10,000,000 11,325,000 575851JP
(Blood Institute) Series A, 6.50%
2/1/22 - 16,300,000 17,746,625 575851KH
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Health & Edl. Facs. Auth. Rev.: - continued
(Boston College) Series K:
Rfdg. 5758512E
5.25% 6/1/09 A1 $ 1,500,000 $ 1,524,375 5758512F
5.25% 6/1/10 A1 1,400,000 1,415,750 5758512G
5.375% 6/1/14 A1 6,700,000 6,808,875 5758512D
5.25% 6/1/23 A1 9,500,000 9,310,000 5758512E
(Cape Cod Health Sys.) Series A,
(Connie Lee Insured):
5.25% 11/15/13 AAA 3,500,000 3,473,750 575851L4
5.25% 11/15/21 AAA 7,500,000 7,275,000 575851L5
(Cardinal Cushing Gen. Hosp.) Series A,
8.50% 7/1/00 - 1,000,000 1,050,000 57585HBV
(Central Med. Ctr.) Series B,
10.42% 6/23/22, (AMBAC Insured)(c) Aaa 10,000,000 13,312,500 575851PD
(Commty. Colleges)
6.50% 10/1/09 AAA 1,500,000 1,646,250 5758506V
6.60% 10/1/22 AAA 3,710,000 4,071,725 5758506W
(Dana Farber Cancer Institute):
6.15% 12/1/04 A1 545,000 593,369 5758506K
6.25% 12/1/05 A1 575,000 626,031 5758506L
6.35% 12/1/06 A1 615,000 668,813 5758506M
6.65% 12/1/15 A1 4,000,000 4,395,000 5758506N
(Daughters Charity-Carney Hosp.)
Series C, 7.50% 7/1/05 Aa 5,000,000 5,687,500 575850J2
(Emerson Hosp.) Series C, 8% 7/1/18 Baa1 23,470,000 26,961,163
575850B8
(Falmouth Hosp.) Series C, (MBIA Insured):
5.50% 7/1/08 Aaa 1,000,000 1,042,500 575851UM
5.625% 7/1/11 Aaa 1,500,000 1,539,375 575851UT
5.25% 7/1/13 Aaa 1,060,000 1,062,650 575851UW
(Faulkner Hosp.) Series C, 6% 7/1/13 Baa1 3,200,000 3,272,000 575851H7
(Hampden Nursing Home Proj.)
Series A, 9.75% 10/1/17 - 12,050,000 12,923,625 575909AE
(Hebrew Rehabilitation Ctr. For Aged)
Series B:
7% 7/1/97 A- 1,375,000 1,486,719 575849G4
7.375% 7/1/17 A- 14,000,000 15,382,500 575850QG
(Lahey Clinic Med. Ctr.) Series B,
(MBIA Insured):
5.625% 7/1/15 Aaa 3,050,000 3,103,375 575851XR
5.375% 7/1/23 Aaa 1,750,000 1,747,813 575851XS
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Health & Edl. Facs. Auth. Rev.: - continued
(Lowell Gen. Hosp.):
8.25% 6/1/00 Baa1 $ 3,840,000 $ 4,368,000 57585HNW
8.40% 6/1/11 Baa1 2,565,000 3,045,938 575850S3
(McLean Hosp.) Issue Series C,
6.45% 7/1/06, (FGIC Insured) Aaa 1,000,000 1,133,750 575851AY
(Melrose-Wakefield Hosp.)
Series B, 6.25% 7/1/12 A- 1,000,000 1,042,500 575851HV
(Milford Whitinsville Reg'l. Hosp.)
Series B:
7.125% 7/15/02 Ba1 3,100,000 3,239,500 575851QX
7.75% 7/15/17 Ba1 14,400,000 15,768,000 575851QY
(Morton Hosp. & Med. Ctr.) Series B
(Connie Lee Insured):
5.25% 7/1/08 AAA 1,200,000 1,209,000 575851W2
5.25% 7/1/14 AAA 2,150,000 2,120,438 575851V3
(Northeastern Univ.):
Series B, 7.60% 10/1/10,
(AMBAC Insured) Aaa 1,000,000 1,153,750 575850WU
Series E, 6.55% 10/1/22, (MBIA Insured) Aaa 8,000,000 8,970,000
575851DN
(Norwood Hosp. Proj.):
Series C, 7% 7/1/14 Baa 1,520,000 1,683,400 575850DH
Series E:
7.40% 7/1/99 Baa 200,000 213,250 5758495G
8% 7/1/05 Baa 2,970,000 3,233,588 575850VP
8% 7/1/12 Baa 11,200,000 12,194,000 575850VR
(Notre Dame Health Care Ctr.) Series A:
7.25% 10/1/01 - 865,000 962,313 5758505P
7.875% 10/1/22 - 5,000,000 5,737,500 5758505S
(Salem Hosp.):
6.75% 7/1/00, (MBIA Insured) Aaa 720,000 781,200 575849M7
Series B, 8.15% 7/1/14 - 8,000,000 9,210,000 575850XD
(Simmons College) Series B, 7.50%
10/1/20 Baa1 6,190,000 7,242,300 575850E5
(Sisters of Providence Health Sys.)
Issue A, 6.625% 11/15/22 Baa1 2,685,000 2,876,306 575851GB
(South Shore Hosp.) Series E,
5.50% 7/1/13, (MBIA Insured) Aaa 3,000,000 3,056,250 575851F8
(St. Anne's Hosp.) Series A:
9.25% 7/1/05 B1 1,270,000 1,306,513 575850MF
9.375% 7/1/14 B1 9,170,000 9,445,100 575850MG
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Health & Edl. Facs. Auth. Rev.: - continued
(St. Luke's Hosp. New Medford)
8.55% 8/15/23, (MBIA Insured)(c) Aaa $ 10,000,000 $ 10,750,000 575851C7
(Suffolk Univ.) Series B,
6.25% 7/1/12, (Connie Lee Insured) AAA 2,590,000 2,771,300 575851KG
(Tufts Univ.):
Series C, 7.40% 8/1/08 A1 1,000,000 1,145,000 575850VY
9.31% 8/15/18, (FGIC Insured) (c) Aaa 7,400,000 7,927,250 575851RW
(Valley Regional Health Sys.)
Series B, 8% 7/1/18 Baa 1,000,000 1,143,750 575850M2
(Wellesley College) Series D:
5.30% 7/1/14 Aa1 4,150,000 4,207,063 575851Y3
5.375% 7/1/19 Aa1 5,720,000 5,812,950 575851Y4
(Wentworth Institute of Technology):
Series A, 7.40% 4/1/10,
(AMBAC Insured) Aaa 4,500,000 5,371,875 575850G5
Series B:
5.625% 10/1/13 AAA 2,000,000 2,040,000 5758512Z
5.50% 10/1/23 (Connie Lee Insured) AAA 3,000,000 2,981,250 5758513A
(Wheaton College) Series B
(Cap. Guaranty Insured):
7.20% 7/1/08 Aaa 460,000 527,850 575850ZC
7.20% 7/1/09 Aaa 590,000 672,600 575850ZD
7.25% 7/1/19 Aaa 5,620,000 6,420,850 575850ZE
(Whidden Mem. Hosp.) Series B:
7.375% 7/1/98 - 1,105,000 1,180,969 575849J9
7.875% 7/1/12 - 6,530,000 7,044,238 575850RC
(Williams College) Series D, 5.50%
7/1/17 Aa1 2,000,000 2,060,000 575851WZ
Massachusetts Hsg. Fin. Agcy. Hsg. Rev.:
(Hsg. Projs.) Series A, 6.375% 4/1/21 A1 15,000,000 15,881,250
575852VP
(Multi-Family) Series 1985 A,
9.25% 12/1/14, (MBIA Insured) Aaa 1,950,000 2,093,813 575910DT
(Single Family):
Series 1985 A:
9.375% 12/1/09 Aa 550,000 569,938 575910BQ
9.50% 12/1/16 Aa 3,425,000 3,574,844 575910CU
Series 3, 7.30% 6/1/14 Aa 6,000,000 6,457,500 575910KS
Series 4, 7.375% 6/1/14 Aa 6,765,000 7,044,056 575910ML
Series 8, 7.70% 6/1/17 Aa 500,000 526,875 575910VF
Series 10, 7.70% 12/1/17 Aa 990,000 1,049,400 575910YH
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Hsg. Fin. Agcy. Hsg. Rev.: - continued
(Single Family): - continued
Series 16:
7.80% 12/1/05 Aa $ 1,000,000 $ 1,052,500 575910E4
7.90% 6/1/14 Aa 1,000,000 1,053,750 575910E5
Series 22, 6.95% 6/1/16 Aa 3,430,000 3,768,713 575910S6
Series A, 6.30% 10/1/13 A1 27,000,000 28,417,500 575852VR
(Village Plaza Ltd. Brookline)
9% 5/1/95, LOC Shawmut National
Corp. - 3,375,000 3,400,313 575911BM
5.35% 9/15/05 Baa1 930,000 933,488 575914A9
5.625% 9/15/10 Baa1 1,000,000 1,001,250 575914B2
Massachusetts Hsg. Fin. Agcy. Residential Dev.
Series H 6.75% 11/15/12 (FNMA Coll.) Aaa 5,000,000 5,425,000 575854L3
Massachusetts Hsg. Fin. Agcy. Single Family
Mtg. Purchase Series 1984 A:
11.375% 12/1/08 (Escrowed to Maturity)(d) Aa 300,000 310,125 575853FX
10.625% 12/1/09 Aa 15,000 15,563 575853HE
Massachusetts Ind. Fin. Agcy. Ind. Rev.:
Rfdg. (Chelsea Jewish Nursing Home)
Series A, 11.15% 2/15/25,
(FHA Guaranteed) BBB- 3,660,000 4,634,475 575855DQ
Rfdg. (Framingham Union Hosp.) Series A:
8.25% 7/1/00 A 3,830,000 4,318,325 575914BE
8.625% 7/1/12 A 14,645,000 16,896,669 575914BF
Rfdg. (Milton Academy) Series B,
5.25% 9/1/19, (MBIA Insured) Aaa 3,000,000 2,996,250 575914ZL
Rfdg. (Philips Academy) 5.375% 9/1/23 Aa1 4,200,000 4,278,750 575914ZN
(1st Mortgage Reeds Landing) 7.75%
10/1/20 - 2,500,000 2,503,125 575914ZS
(Atlanticare Med. Ctr.) Series A:
Rfdg.10.125% 11/1/14 - 8,800,000 10,241,000 575914GY
10.125% 11/1/14 - 1,900,000 2,211,125 575914GZ
(Beverly Enterprises, Inc.):
Rfdg. 8% 5/1/02 - 575,000 633,938 575855G5
8.375% 5/1/09 - 1,875,000 2,074,219 575855G6
(Boston Architectural Ctr. Proj.)
8.50% 9/1/19 - 3,685,000 4,090,350 575914FD
(Cap. Appreciation) (Massachusetts Biomedical): 575914DT
Series A-1: 575914DT
0% 8/1/02 A1 3,650,000 2,395,313 575914DY
0% 8/1/03 - 1,000,000 617,500 575914DT
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Ind. Rev.: - continued
(Cap. Appreciation) (Massachusetts Biomedical): - continued 575914DT
Series A-2:
0% 8/1/05(e) - $ 24,600,000 $ 13,407,000 575914EB
0% 8/1/07 - 25,000,000 11,937,500 575914ED
0% 8/1/08 - 20,000,000 9,000,000 575914EE
0% 8/1/10 - 10,000,000 3,962,500 575914EG
(Concord Academy) 6.90% 9/1/21,
(FSA Insured) Aaa 1,370,000 1,572,075 575914PQ
(Eagle Pond Health Care) (FHA Guaranteed);
10.125% 5/15/04 A+ 385,000 415,319 575855CN
10.125% 5/15/26 - 4,270,000 4,472,825 575855CP
(Emerson College):
Series 1992 8.25% 1/1/17 - 3,000,000 3,401,250 575914UV
8.50% 1/1/03 - 6,000,000 6,937,500 575914MB
8.90% 1/1/18 - 11,250,000 13,260,938 575914MA
(Evergreen Ctr., Inc.) 9.25% 11/1/11 - 4,700,000 5,316,875 575914PT
(Holy Cross College):
Rfdg. Series II, 6.375% 11/1/15 A1 2,000,000 2,175,000 575914TP
6.45% 1/1/12 A1 4,300,000 4,687,000 575914SG
7% 7/1/19 A1 9,000,000 9,900,000 575914DL
(Inner Belt Realty Trust Proj.) Series 1985,
9.50% 12/1/98 - 1,913,354 2,092,732 999949ET
(Institute Dev. Disabilities) 9.25%
6/1/09 - 4,460,000 4,365,225 575914DN
(Jacobs Pillow Dance Festival) 9%
12/1/11 - 4,800,000 5,076,000 575914PR
(Leominster Hosp.) Series A, 8.375%
8/1/99 - 3,300,000 3,712,500 575914FE
(Meadow Green Nursing) 9.60% 8/1/27,
(FHA Guaranteed) AA 3,880,000 4,335,900 575855DZ
(Museum of Science Proj.)
(Cap. Guaranty Insured):
4.90% 11/1/06 Aaa 480,000 477,715 575914D7
5% 11/1/07 Aaa 515,000 512,430 575914D8
5% 11/1/08 Aaa 1,590,000 1,573,544 575914D9
5.10% 11/1/09 Aaa 830,000 825,493 575914E2
(New England Ctr. for Autism):
9% 11/1/05 - 3,050,000 3,377,875 575914GV
9.50% 11/1/15 - 8,610,000 9,761,588 575914GW
7% 11/1/19 - 1,100,000 1,079,375 575914GX
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Ind. Rev.: - continued
(Orchard Cove, Inc.)
8% 5/1/99 - $ 10,000,000 $ 10,375,000 575914SH
9% 5/1/22 - 15,200,000 16,891,000 575914SJ
(Springfield College):
5.25% 9/15/03 Baa1 755,000 763,494 575914A7
5.25% 9/15/04 Baa1 885,000 888,319 575914A8
(Whitehead Institute Biomedical Research)
8.625% 10/1/23 7,500,000 7,528,125 575914ZU
5.125% 7/1/26 Aa 5,500,000 5,341,875 575914B5
Massachusetts Ind. Fin. Agcy. Poll.
Cont. Rev. Rfdg. (Eastern Edison Co. Proj.)
5.875% 8/1/08 Baa2 3,750,000 3,876,563 575856BD
Massachusetts Ind. Fin. Agcy. Resource
Recovery Rev. (Southeast Mass. Proj.)
Series A, 9% 7/1/15 - 1,000,000 1,168,750 575912AV
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev.:
Series A:
Rfdg. 5.10% 7/1/08, (AMBAC Insured) Aaa 1,000,000 1,006,250 575765MT
6.375% 7/1/15 A 14,865,000 15,218,044 575765BF
6% 7/1/18 Baa1 13,000,000 13,406,250 575765JG
8.02% 7/1/18 (c) Aaa 16,500,000 16,603,125 575765MV
Series B, 6.75% 7/1/17 Baa1 30,000,000 32,925,000 575765JF
Series C
6.40% 7/1/02 Baa1 1,225,000 1,353,625 575765JU
6.625% 7/1/18 Baa1 10,000,000 10,887,500 575765KB
Series D, 6.125% 7/1/19 Baa1 15,000,000 15,693,750 575765LZ
Series E, 6.125% 7/1/19 Baa1 750,000 784,688 575765MA
5% 7/1/10, (AMBAC Insured) Aaa 1,000,000 986,250 575765MU
Massachusetts Port Auth. Rev.:
Rfdg. Series A:
5.50% 7/1/08 Aa 2,995,000 3,118,544 575895NS
5.50% 7/1/09 Aa 3,160,000 3,282,450 575895NU
5% 7/1/13 Aa 9,835,000 9,773,531 575895NX
5% 7/1/15 Aa 5,600,000 5,551,000 575895NZ
Series B:
Rfdg. 7.125% 7/1/12 Aa 2,990,000 3,064,750 575895EE
5.625% 7/1/12 (Escrowed to Maturity)(d) Aaa 1,900,000 2,028,250
575895DH
6% 7/1/13 Aa 1,825,000 1,957,313 575895MG
6% 7/1/23 Aa 16,000,000 17,020,000 575895MJ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Spl. Oblig. Rev. (Gas Tax) Series A:
6.25% 6/1/06 A $ 3,880,000 $ 4,311,650 576004AL
6.25% 6/1/07 A 2,480,000 2,755,900 576004AH
6% 6/1/13 A 35,915,000 38,473,944 576004AJ
Massachusetts Tpk. Auth. Tpk. Rev. Series A:
5% 1/1/13 A1 19,540,000 19,149,200 576029AR
5% 1/1/20 A1 15,900,000 15,403,125 576029AT
5.125% 1/1/23, (FGIC Insured) Aaa 14,500,000 14,191,875 576029AS
Massachusetts Wtr. Poll. Abatement Trust
(Wtr. Poll. Pooled Loan Prog.):
Series 1:
5.40% 2/1/06 Aa 2,175,000 2,275,594 576047CL
5.40% 8/1/06 Aa 2,230,000 2,333,138 576047CM
5.45% 2/1/07 Aa 2,000,000 2,092,500 576047CN
5.45% 8/1/07 Aa 2,355,000 2,463,919 576047CP
5.50% 2/1/08 Aa 1,000,000 1,045,000 576047CQ
5.50% 8/1/08 Aa 2,000,000 2,090,000 576047CR
5.60% 8/1/13 Aa 14,300,000 14,782,625 576047CS
Series A 5.20% 8/1/11 Aa 5,520,000 5,595,900 576047DM
Series B 5.25% 8/1/14 Aa 6,605,000 6,704,075 576047DL
Massachusetts Wtr. Poll. Abatement Trust Rev.
(Massachusetts Wtr. Resources Auth. Loan Prog.):
Series A:
5.20% 2/1/06 Aa 3,600,000 3,699,000 576047BB
5.20% 8/1/06 Aa 3,800,000 3,904,500 576047BC
5.30% 2/1/07 Aa 3,965,000 4,088,906 576047BD
5.30% 8/1/07 Aa 4,080,000 4,207,500 576047BE
5.35% 2/1/08 Aa 2,685,000 2,768,906 576047BF
5.35% 8/1/08 Aa 4,320,000 4,455,000 576047BG
5.45% 2/1/13 Aa 32,390,000 33,037,800 576047BK
Massachusetts Wtr. Resources Auth.
Series A, 0% 4/1/06 A 10,000,000 5,475,000 576049AZ
Methuen Wtr. Ltd. Tax Lot A:
9.40% 12/15/97 A1 260,000 311,350 591537GL
9.50% 12/15/98 A1 260,000 318,825 591537GM
9.50% 12/15/99 A1 260,000 326,625 591537GN
9.50% 12/15/00 A1 260,000 332,800 591537GP
Monson Gen. Oblig. Rfdg. (MBIA Insured):
Rfdg. 5.40% 10/15/07 Aaa 1,005,000 1,056,506 611730CM
5.50% 10/15/10 Aaa 1,080,000 1,129,950 611730CN
Nantucket Gen. Oblig. 6.80% 12/1/11 A 1,425,000 1,596,000 630191JJ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Nantucket Island Bank Rfdg. Series E:
7% 7/1/05 A $ 1,505,000 $ 1,717,581 630187BW
7.25% 7/1/19 A 6,175,000 7,124,406 630187BY
North Attleborough Gen. Oblig. Ltd. Tax:
7% 5/15/06 A 425,000 493,000 657339JS
7% 5/15/07 A 425,000 493,000 657339JT
Orleans Unltd. Tax:
6.70% 6/15/08 A1 180,000 201,150 686628GK
6.70% 6/15/09 A1 120,000 132,150 686628GL
Palmer Rfdg. 5.50% 10/1/10 Baa1 2,250,000 2,320,313 696837EC
Pittsfield Gen. Oblig. 7.25% 8/1/06 A 600,000 673,500 725463QB
Plainville Gen. Oblig. Ltd.:
7% 9/1/06 A 175,000 196,438 726838DH
7% 9/1/07 A 175,000 195,781 726838DJ
7% 9/1/09 A 175,000 196,438 726838DG
Plymouth County Ctfs. of Prtn. Series A, 7%
4/1/22 BBB 10,995,000 12,451,838 729505BB
Quabbin Reg'l. School Dist. 6.80% 6/15/05 A 510,000 566,100 747283BJ
Quincy Hosp. Rev. Rfdg. (FSA Insured):
5.50% 1/15/13 Aaa 1,975,000 1,989,813 748524BV
5.25% 1/15/16 Aaa 1,000,000 980,000 748524BY
Rowley Gen. Oblig. Ltd. Tax, (AMBAC Insured):
7.35% 5/15/06 Aaa 250,000 289,375 779749BN
7.40% 5/15/07 Aaa 250,000 289,375 779749BP
7.40% 5/15/08 Aaa 250,000 288,750 779749BQ
Southern Berkshire Reg'l. School Dist.
7% 4/15/11, (MBIA Insured)(e) Aaa 4,000,000 4,635,000 842366CT
South Essex Swr. Dist. Gen. Oblig. Unltd. Tax:
8.75% 12/1/01 A 425,000 534,438 837718HY
8.75% 12/1/02 A 425,000 531,250 837718HZ
8.75% 12/1/03 A 400,000 497,500 837718JA
8.75% 12/1/04 A 400,000 497,500 837718JB
8.75% 12/1/05 A 400,000 496,000 837718JC
Springfield Gen. Oblig. Series B,
6% 1/15/13, (MBIA Insured) Aaa 2,000,000 2,135,000 8507487F
Springfield Hsg. Auth. Multi-Family Mtg. Rev.
(Citywide Apts.) (FHA Guarantied):
9.50% 11/1/05 - 485,000 528,044 850757AA
9.625% 11/1/17 - 1,500,000 1,665,000 850757AB
9.625% 11/1/26 - 3,250,000 3,619,688 850757AC
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Taunton Gen. Oblig.:
8% 2/1/00 A $ 1,000,000 $ 1,168,750 876672PG
8% 2/1/02 A 1,465,000 1,765,325 876672PJ
8% 2/1/03 A 1,005,000 1,223,588 876672PK
8% 2/1/05 A 1,000,000 1,240,000 876672PM
Taunton Ind. Dev. Fing. Rev.
(Pepsi Cola Metro Bottle Co.) 5.65%
8/1/12 A1 2,400,000 2,430,000 876680BR
Tewksbury Gen. Oblig. Various Purp. Unltd. Tax:
9.60% 12/15/98 Baa1 595,000 717,719 881626FY
9.60% 12/15/99 Baa1 595,000 738,544 881626FZ
9.60% 12/15/00 Baa1 210,000 265,913 881626GA
9.60% 12/15/01 Baa1 210,000 271,950 881626GB
9.60% 12/15/02 Baa1 210,000 277,200 881626GC
Tewksbury Wtr. Gen. Oblig.:
7.20% 6/1/05 Baa1 350,000 412,125 881626JT
7.20% 6/1/06 Baa1 150,000 177,563 881626JV
Westfield Muni. Purp. Loan (FSA Insured):
5% 9/1/10 Aaa 745,000 742,206 960096QD
5% 9/1/11 Aaa 490,000 485,713 960096QE
5% 9/1/12 Aaa 745,000 737,550 960096QF
5% 9/1/13 Aaa 500,000 491,875 960096QG
Westford Gen. Oblig. Unltd. Tax
7.60% 10/15/10, (FGIC Insured) Aaa 2,100,000 2,478,000 960266HC
Winchedon Gen. Oblig. (AMBAC Insured):
6.05% 3/15/11 Aaa 1,285,000 1,382,981 972669DP
6.05% 3/15/12 Aaa 1,275,000 1,372,218 972669DQ
1,320,755,882
PUERTO RICO - 1.2%
Puerto Rico Elec. Pwr. Auth. Elec. Rev.
Series A, 5.875% 7/1/05 Baa1 3,115,000 3,153,938 745264NN
Puerto Rico Ports Auth. Rev.
Series B, 5.70% 7/1/03 A 2,460,000 2,493,825 745290BR
Puerto Rico Tel. Auth. Rev.
8.283% 1/16/15 (MBIA Insured)(c) Aaa 10,000,000 10,887,500 745297JT
16,535,263
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
U.S. VIRGIN ISLANDS - 0.1%
Virgin Island Pub. Fin. Auth. Rev. Series A,
7% 10/1/02 - $ 1,000,000 $ 1,118,750 927676CC
GUAM - 0.2%
Guam Arpt. Auth. Rev.:
Series A, 6.375% 10/1/10 BBB 1,510,000 1,640,238 400648BJ
6.50% 10/1/23 BBB 1,500,000 1,636,875 400648BL
3,277,113
TOTAL MUNICIPAL BONDS
(Cost $1,216,196,936) 1,341,687,008
MUNICIPAL NOTES (A) - 2.6%
MASSACHUSETTS - 2.6%
Massachusetts Health & Edl. Facs. Auth. Rev.:
(Cap. Asset Prog.):
Series B, 2.30%, (MBIA Insured)
BPA Sanwa Bank, VRDN VMIG 1 3,800,000 3,800,000 575850JQ
Series C, 2.30%,
(MBIA Insured) BPA Sanwa Bank, VRDN VMIG 1 3,000,000 3,000,000
575850JR
(Cap. Asset Prog.) Series 1985 D,
2.20%, (MBIA Insured) BPA Sanwa Bank,
VRDN VMIG 1 10,700,000 10,700,000 575850MP
(Harvard Univ.) VRDN:
Issue I, 2.05%, VRDN VMIG 1 8,000,000 8,000,000 575850HW
Series I, 2.05%, VRDN VMIG 1 10,600,000 10,600,000 575850HX
TOTAL MUNICIPAL NOTES
(Cost $36,100,000) 36,100,000
TOTAL INVESTMENTS - 100%
(Cost $1,252,296,936) $ 1,377,787,008
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SELL
1,100 U.S. Treasury Bond Futures Contracts March 1994 $128,871,875
$(1,378,782)
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 9.3%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(c) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
(d) Security collateralized by an amount sufficient to pay interest and
principal.
(e) Security was pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$7,360,000.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 56.5% AAA, AA, A 58.2%
Baa 13.6% BBB 12.7%
Ba 1.4% BB 1.4%
B 0.8% B 0.7%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 17.2%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Health Care 30.2%
General Obligation 12.4
Education 12.0
Water & Sewer 11.0
Others
(individually less
than 10%) 34.4
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1994 the aggregate cost of investment securities for income
tax purposes was $1,252,296,936. Net unrealized appreciation aggregated
$125,490,072, of which $125,750,445 related to appreciated investment
securities and $260,373 related to depreciated investment securities.
The fund hereby designates $800,818 as a capital gain dividend for the
purpose of the dividend paid deduction.
At January 31, 1994 the fund was required to defer $20,706,000 of losses on
futures contracts and options.
FIDELITY MASSACHUSETTS TAX-FREE HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1994
39.ASSETS 40. 41.
42.Investment in securities, at value (cost $1,252,296,9 43. $ 1,377,787,008
36)
(Notes 1 and 2) - See accompanying schedule
44.Cash 45. 2,518,826
46.Receivable for investments sold 47. 7,628,174
48.Interest receivable 49. 17,794,727
50.Receivable for daily variation on futures contracts 51. 339,713
52. 53.TOTAL ASSETS 54. 1,406,068,448
55.LIABILITIES 56. 57.
58.Payable for investments purchased $ 16,243,851 59.
60.Dividends payable 1,812,517 61.
62.Accrued management fee 470,420 63.
64.Other payables and accrued expenses 131,845 65.
66. 67.TOTAL LIABILITIES 68. 18,658,633
69.70.NET ASSETS 71. $ 1,387,409,815
72.Net Assets consist of (Note 1): 73. 74.
75.Paid in capital 76. $ 1,268,181,575
77.Accumulated undistributed net realized gain (loss) 78.
on investments (4,883,050)
79.Net unrealized appreciation (depreciation) on: 80. 81.
82. Investment securities 83. 125,490,072
84. Futures contracts 85. (1,378,782)
86.87.NET ASSETS, for 113,618,125 shares outstanding 88. $ 1,387,409,815
89.90.NET ASSET VALUE, offering price and redemption p 91. $12.21
rice per
share ($1,387,409,815 (divided by) 113,618,125 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JANUARY 31, 1994
92.93.INTEREST INCOME 94. $ 88,334,969
95.EXPENSES 96. 97.
98.Management fee (Note 4) $ 5,661,123 99.
100.Transfer agent, accounting and custodian fees and 1,618,252 101.
expenses (Note 4)
102.Non-interested trustees' compensation 4,233 103.
104.Registration fees 1,988 105.
106.Audit 39,623 107.
108.Legal 19,737 109.
110.Interest (Note 5) 2,066 111.
112.Reports to shareholders 26,910 113.
114.Miscellaneous 7,411 115.
116. 117.TOTAL EXPENSES 118. 7,381,343
119.120.NET INTEREST INCOME 121. 80,953,626
122.REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTM 124. 125.
ENTS
(NOTES 1 AND 3)
123.Net realized gain (loss) on:
126. Investment securities 45,756,155 127.
128. Futures contracts (5,778,520) 39,977,635
129.Change in net unrealized appreciation (depreciation 130. 131.
) on:
132. Investment securities 40,599,386 133.
134. Futures contracts (683,117) 39,916,269
135.136.NET GAIN (LOSS) 137. 79,893,904
138.139.NET INCREASE (DECREASE) IN NET ASSETS RESULT 140. $ 160,847,530
ING
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR SIX MONTHS YEAR
ENDED ENDED ENDED
JANUARY 31, 1994 JANUARY 31, 1993 JULY 31, 1992
(NOTE 1)
141.INCREASE (DECREASE) IN NET ASS
ETS
142.Operations $ 80,953,626 $ 37,810,061 $ 65,864,151
Net interest income
143. Net realized gain (loss) on 39,977,635 1,316,254 (2,145,456)
investments
144. Change in net unrealized apprec 39,916,269 (6,218,082) 61,206,348
iation
(depreciation) on investments
145. 160,847,530 32,908,233 124,925,043
146.NET INCREASE (DECREASE) IN
NET ASSETS
RESULTING FROM OPERATIONS
147.Distributions to shareholders fro (80,953,626) (37,810,061) (65,864,151)
m:
Net interest income
148. Net realized gain (25,900,006) (7,243,604) (6,456,532)
149. In excess of net realized gain (3,133,619) - -
150. (109,987,251) (45,053,665) (72,320,683)
151.TOTAL DISTRIBUTIONS
152.Share transactions 471,434,518 286,075,883 547,705,624
Net proceeds from sales of shares
153. Reinvestment of distributions 86,120,603 35,355,054 56,099,281
154. Cost of shares redeemed (483,601,622) (282,096,519) (263,181,440)
155. 73,953,499 39,334,418 340,623,465
Net increase (decrease) in net ass
ets
resulting from share transactions
156. 124,813,778 27,188,986 393,227,825
157.TOTAL INCREASE (DECREASE) IN
NET ASSETS
158.NET ASSETS 159. 160. 161.
162. Beginning of period 1,262,596,037 1,235,407,051 842,179,226
163. End of period $ 1,387,409,815 $ 1,262,596,037 $ 1,235,407,051
164.OTHER INFORMATION 166. 167. 168.
165.Shares
169. Sold 39,016,000 24,566,680 47,852,663
170. Issued in reinvestment of distributio 7,102,485 3,039,654 4,898,684
ns
171. Redeemed (39,936,090) (24,293,893) (23,000,267)
172. Net increase (decrease) 6,182,395 3,312,441 29,751,080
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
173. YEAR SIX MONTHS YEARS ENDED JULY 31,
ENDED ENDED
JANUARY 31, JANUARY 31, 1993
174. 1994 (NOTE 1) 1992 1991 1990 1989
175.SELECTED PER-SHARE DATA
176.Net asset value, beginning of
period $ 11.750 $ 11.860 $ 11.320 $ 11.160 $ 11.250 $ 10.820
177.Income from Investment Operations .714 .364 .735 .783 .799 .804
Net interest income
178. Net realized and unrealized gain
(loss) on .720 (.040) .620 .270 (.090) .430
investments
179. Total from investment operations 1.434 .324 1.355 1.053 .709 1.234
180.Less Distributions (.714) (.364) (.735) (.783) (.799) (.804)
From net interest income
181. From net realized gain on
investments (.230) (.070) (.080) (.110) - -
182. In excess of net realized gain
on investments (.030) - - - - -
183. Total distributions (.974) (.434) (.815) (.893) (.799) (.804)
184.Net asset value, end of period $ 12.210 $ 11.750 $ 11.860 $ 11.320 $ 11.160 $ 11.250
185.TOTAL RETURN (dagger) 12.57 2.83% 12.48 9.90 6.60 11.82
% % % % %
186.RATIOS AND SUPPLEMENTAL DATA
187.Net assets, end of period
(000 omitted) $ 1,387,410 $ 1,262,596 $ 1,235,407 $ 842,179 $ 737,321 $ 662,861
188.Ratio of expenses to
average net assets .54 .55%* .57 .56 .57 .56
% % % % %
189.Ratio of net interest income
to average net assets 5.93 6.19%* 6.43 7.05 7.20 7.33
% % % % %
190.Portfolio turnover rate 40 42%* 18 29 31 26
% % % % %
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
FIDELITY MASSACHUSETTS TAX-FREE MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Tax-Free Money Market 1.71% 20.20% 50.17%
Consumer Price Index 2.52% 20.73% 43.47%
Average Massachusetts
Tax-Free Money Market Fund 1.86% 21.18% n/a
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or ten years. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, you would end up
with $1,050. Comparing the fund's performance to the consumer price index
(CPI) helps show how your investment did compared to inflation. To measure
how the fund stacked up against its peers, you can compare its return to
the average Massachusetts tax-free money market fund's total return. This
average currently reflects the performance of 10 Massachusetts tax-free
money market funds tracked by IBC/Donoghue.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Tax-Free Money Market 1.71% 3.75% 4.15%
Consumer Price Index 2.52% 3.84% 3.68%
Average Massachusetts
Tax-Free Money Market Fund 1.86% 3.92% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1/31/93 4/30/93 7/31/93 10/31/93 1/31/94
Massachusetts Tax-Free 1.74% 1.77% 1.85% 1.85% 1.62%
Money Market
Average Massachusetts 2.06% 1.94% 1.98% 1.92% 1.70%
Tax-Free Money Market
Fund
Massachusetts Municipal 3.09% 3.14% 3.28% 3.28% 2.88%
Money Market Tax-equivalen
t
Average All Taxable 2.74% 2.62% 2.65% 2.66% 2.68%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 1.74
Row: 1, Col: 2, Value: 2.06
Row: 2, Col: 1, Value: 1.77
Row: 2, Col: 2, Value: 1.94
Row: 3, Col: 1, Value: 1.86
Row: 3, Col: 2, Value: 1.98
Row: 4, Col: 1, Value: 1.85
Row: 4, Col: 2, Value: 1.92
Row: 5, Col: 1, Value: 1.62
Row: 5, Col: 2, Value: 1.7
3% -
2% -
1% -
0%
Massachusetts
Tax-Free Money Marke
t
Average Massachusett
s Tax-Free Money
Market Fund
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. The chart above shows the fund's seven-day yield at
quarterly intervals over the past year. You can compare these yields to the
average tax-free money market fund. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective federal and
state income tax rate of 43.68%. The tax-equivalent figures are useful in
seeing how the fund stacked up against the average taxable money market
fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FIDELITY MASSACHUSETTS TAX-FREE MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Fidelity
Massachusetts Tax-Free Money Market Portfolio
Q. JAN, WHAT HAS THE SHORT-TERM SIDE OF THE MARKET BEEN LIKE OVER THE PAST
12 MONTHS?
A. Short-term interest rates have remained pretty stable. Both the federal
funds rate - what banks charge each other for overnight loans - and the
discount rate - what the Federal Reserve charges member banks - have been
at or near 3% since the fall of 1992. Inflation wasn't a big issue either,
despite brief scares last spring and again in November. Supply and demand
factors had a much bigger effect on how I managed the fund than movements
in interest rates.
Q. WHY?
A. Last fall, the short-term market experienced an unusually strong surge
in supply. This glut of new securities forced issuers to offer very
attractive yields, which provided enticing buying opportunities. For
example, the fund's investments usually have yields that are about 68 to
72% of Treasuries with similar maturities. But last fall, many of the
issues on the market had yields that were 80 to 85% of comparable
Treasuries. I stocked up, which lengthened the fund's average maturity from
33 days at the end of July to 81 days at the end of September. Then supply
began to dry up, and I began to worry about the Fed possibly triggering a
rise in interest rates. I let the average maturity roll back down to 57
days by the end of January.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on January 31, 1994 was 1.62%, down from
1.74% a year ago. That reflects the general drop in short-term interest
rates over the past year. The latest yield translates into a tax-equivalent
yield of 2.88% for investors in the 43.68% combined effective federal and
state tax bracket. The fund's total return - which assumes reinvestment of
monthly dividends - for the 12 months ended January 31 was 1.71%. The
average Massachusetts municipal money market fund had a total return of
1.86%.
Q. WHAT AFFECTED PERFORMANCE?
A. Mainly the fact that the credit quality of many issues in Massachusetts
is still not meeting the fund's high standards, although I am seeing
improvement as the economy strengthens. This has meant accepting lower
yields, on occasion, in return for investing in only the highest quality
debt.
Q. WHAT'S AHEAD FOR THE FUND?
A. Early in February, the Fed raised the federal funds rate to 3.25%,
effectively raising all short-term interest rates.
Although currently inflation doesn't look like an increasing concern, I
think there's a good chance the Fed could make more of these "preemptive
strikes" to curb inflation threats before they happen. I'll prepare the
fund for higher rates in two ways: First, I plan to keep the average
maturity in a neutral range, say 50 to 60 days, and second, I'll most
likely increase the fund's investment in variable rate instruments. The
coupons (stated interest rates) on these securities are reset at fixed
intervals - for example, weekly or monthly, so when rates rise, the fund
can benefit from higher coupons at these reset intervals.
FUND FACTS
GOAL: tax-free income with
share price stability by
investing in high-quality
short-term Massachusetts
municipal securities
START DATE: November 11,
1983
SIZE: as of January 31, 1994,
over $610 million
MANAGER: Janice Bradburn,
since January 1992; manager,
Fidelity Ohio Municipal Money
Market Portfolio, since October
1993; Spartan Massachusetts
Municipal Money Market
Portfolio, since January 1992;
Fidelity New York Tax-Free
Money Market Portfolio, since
September 1989; Spartan New
York Municipal Money Market
Portfolio, since February 1990
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
FIDELITY MASSACHUSETTS TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
1/31/94 7/31/93 1/31/93
0 - 30 68.1 80.8 70.3
31 - 90 7.6 7.6 13.3
91 - 180 12.5 6.3 3.1
181 - 397 11.8 5.3 13.3
WEIGHTED AVERAGE MATURITY
1/31/94 7/31/93 1/31/93
Massachusetts Tax-Free
Money Market 57 days 33 days 40 days
Average Massachusetts
Tax-Free Money Market Fun 56 days 38 days 45 days
d*
ASSET ALLOCATION
AS OF 1/31/94 AS OF 7/31/93
Row: 1, Col: 1, Value: 59.1
Row: 1, Col: 2, Value: 9.1
Row: 1, Col: 3, Value: 9.699999999999999
Row: 1, Col: 4, Value: 16.5
Row: 1, Col: 5, Value: 5.6
Row: 1, Col: 1, Value: 67.40000000000001
Row: 1, Col: 2, Value: 10.3
Row: 1, Col: 3, Value: 4.7
Row: 1, Col: 4, Value: 8.300000000000001
Row: 1, Col: 5, Value: 9.300000000000001
Variable rate
demand notes
(VRDNs) 59.1%
Commercial
paper 9.1%
Tender bonds 9.7%
Municipal
notes 16.5%
Other 5.6%
Variable rate
demand notes
(VRDNs) 67.4%
Commercial
paper 10.3%
Tender bonds 4.7%
Municipal
notes 8.3%
Other 9.3%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
FIDELITY MASSACHUSETTS TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENTS/JANUARY 31, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - 90.2%
Beverly BAN 3.43% 12/2/94 LOC State Street
Bank & Trust Co. $ 2,000,000 $ 2,006,904 088095TV
Boston City Hosp. Puttable Floating Option Tax-Exempt
Receipts Series PT-2, 2.35%, (Liquidity
Enhancement Bank National De Paris), VRDN (c) 1,000,000 1,000,000
101026BZ
Boston Gen. Oblig. Bonds Series A:
7.10% 2/1/94 (FGIC Insured) 1,000,000 1,000,000 100852XS
4% 9/1/94 (FSA Insured) 1,000,000 1,007,962 100852A2
Boston Gen. Oblig. Tender Option Bonds,
(Liquidity Enhancement Morgan Guaranty Trust Co.),
VRDN (c):
Series 11A, 2.30% 2,000,000 2,000,00 100852ZW0
Series 11C, 2.30% 2,500,000 2,500,000 100852ZY
Boston Wtr. & Swr. Commission Gen. Rev.,
LOC Dai-Ichi Kangyo Bank, VRDN: 101029BD
Series 1985 A, 1.80% 10,690,000 10,690,000 101029BE
Series 1985 B, 1.80% 14,450,000 14,450,000 101029BD
Clipper Tax-Exempt Trust Series 93-2 Class A Ctfs. of
Prtn. 2.14% (Liquidity Enhancement State Street Bank &
Trust Co.), VRDN (c) 19,000,000 19,000,00 188854AA0
Framingham Ind. Rev. Board (Perini Corp. Proj.)
Series 1985, 3%, LOC Harris Trust, VRDN 400,000 400,000 351704AJ
Lowell Gen. Oblig. State Qualified Bonds,
Series B, 7% 11/1/94, (FSA Insured) 1,890,000 1,946,664 547643K6
Massachusetts Bay Trans. Auth. RAN:
Series 1993 A, 2.80% 3/1/94 7,300,000 7,300,180 575566M3
Series 1993 B:
3.25% 9/30/94 7,600,000 7,627,723 575566S8
3.50% 9/30/94 15,500,000 15,563,627 575566S9
Massachusetts Convention Ctr. Auth. (Hynes Proj. 1984)
Series A, 10% 9/01/94 1,000,000 1,060,890 575835BD
Massachusetts Gen. Oblig. Bonds: 575825MK
7.625% 6/1/94, (FGIC Insured) 3,665,000 3,721,375 575825WE
Massachusetts Gen. Oblig. Cons. Loan Rev.:
Series B, 3.50% 10/1/94 2,000,000 2,009,708 575825B6
Series C, 6.90% 6/1/94, (AMBAC Insured) 1,550,000 1,571,487 575825MK
Massachusetts Gen. Oblig. Custodial Receipts,
Series 1993, 2.42%, (Liquidity
Enhancement Citibank), VRDN (c) 3,000,000 3,000,000 5758236L
Massachusetts Gen. Oblig. Eagle Tax-Exempt Trust
Series 1993I, 2.42%, (Liquidity Enhancement
Citibank), VRDN (c) 13,000,000 13,000,00 269896AM0
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig. Puttable Floating Option
Tax-Exempt Receipts, Series PA-13,
2.45%, (Liquidity Enhancement Merrill
Lynch & Co. Inc.), VRDN (c) $ 3,000,000 $ 3,000,00 575826BQ0
Massachusetts Health & Ed. Facs. Auth. Rev.:
(Boston Univ.) Series H, 2.45% 2/8/94,
(Liquidity Enhancement First Nat'l. Bank of
Chicago) MT 26,000,000 26,000,00 575850NF0
(Brigham & Women's Hosp.) Series A, 2%,
LOC Sanwa Bank, VRDN 15,800,000 15,800,00 575850PF0
(Capital Asset Prog.) VRDN:
Series 1985 D, 2.20%,
(MBIA Insured) BPA Sanwa Bank 7,600,000 7,600,000 575850MP
Series A, 2%, LOC First Nat'l. Bank of Chicago 25,400,000 25,400,00
575849LE0
Series E, 2.25%, LOC Sanwa Bank 25,400,000 25,400,000 575850NE
Series G1, 2.35%, (MBIA Insured)
BPA Credit Suisse 3,100,000 3,100,000 575850XE
(Harvard Univ.):
Issue I, 2.05% VRDN 32,540,000 32,540,000 575850HW
Series I, 2.05% VRDN 44,510,000 44,510,000 575850HW
2.15% 2/10/94 VT 1,000,000 1,000,000 57599ACX
2/8/94 VT 7,400,000 7,400,000 57599ACW
(MIT) Series G, 2.05%, VRDN 4,000,000 4,000,000 5758502J
(Mt. Ida College) 2.05%, LOC Chemical Bank,
Sakura Bank, VRDN 4,400,000 4,400,000 575850VD
(Univ. Hosp.) Series B, 10.625% 7/1/94, VT 8,700,000 9,147,747
575850GD
(Wellesley College) Series B, 2%, VRDN 10,700,000 10,700,000 575851NQ
Massachusetts Health & Ed. Facs. Auth. Rev. Bonds: 575849LE
(Falmouth Hosp.) Series B, 10.625% 7/1/94,
(MBIA Insured) 1,000,000 1,052,122 575850FC
(Milton Med. Ctr.) Series A, 11% 7/1/94 1,715,000 1,805,874 575850GB
Massachusetts Hsg. Fin. Agcy. Single Family Hsg. Rev.:
Series 23 2.75% 6/1/94 (FGIC Insured) MT 4,000,000 4,000,000 575910T7
Series 25, 2.95% 9/1/94, MT 24,500,000 24,500,20 5759105B7
Massachusetts Hsg. Fin. Agcy. Tender Option Bonds,
(Liquidity Enhancement Morgan Guaranty Trust Co.),
VRDN (c)
Series 12A, 2.30% 7,000,000 7,000,000 575852VT
Series 12C, 2.30% 6,200,000 6,200,00 575852VV0
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Adj. Rate Rev. Rfdg.
(WGBH Ed. Foundation Proj.) Series 1992, 2.20%,
LOC Nat'l. Westminster Bank $ 5,000,000 $ 5,000,000 575914VP
Massachusetts Ind. Fin. Agcy. Ind. Dev. Rev.:
Rfdg. (First Healthcare Corp.) Series 1993B 2.35%
LOC Wachovia Bank of Georgia 700,000 700,000 575855H9
Rfdg. (First Healthcare Corp. for Hillhaven Proj.) 2.35%,
LOC Wachovia Bank of Georgia 2,000,000 2,000,00 575855H70
Massachusetts Ind. Fin. Agcy. Ind. Dev. Rev. Rfdg.
(First Healthcare Corp. Proj.) Series 1992 A, 2.95%,
LOC Wachovia Bank of Georgia 2,025,000 2,025,00 575920AB0
Massachusetts Ind. Fin. Agcy. Ind. Rev. VRDN:
Rfdg. (Quamco Inc. Proj.) Series 1988 B, 2%
LOC Banca Commerciale Italiana 1,605,000 1,605,000 575855ZR
(General Signal Proj.) 2.75%, LOC Wachovia Bank of
Georgia 7,500,000 7,500,000 575855H3
(Interpolymer Corp.) Series 1992, 3.10%,
LOC Bank of Tokyo 4,000,000 4,000,000 575855G9
(Longview Fiber Co.) Series 1987, 2.80%,
LOC Algemene Bank 2,070,000 2,070,000 575855YW
(Tsubaki Inc.) 2.50% LOC Sakura Bank 3,000,000 3,000,000 575855A3
(United Medical Corp.) Series 1992, 2.20%
LOC Chemical Bank (b) 1,700,000 1,700,000 575855G7
Massachusetts Ind. Fin. Agcy. Multimodal Rev. VRDN:
(Hampshire College Proj.) 2.90%,
LOC Nat'l. Westminster Bank 1,000,000 1,000,000 575914DG
(Regional Family YMCA Proj.) 2.90%,
LOC Nat'l. Westminster Bank 180,000 180,000 575914DJ
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev.:
Rfdg. (New England Power Co. Proj.) Series 1992,VT:
2.15% 3/8/94 4,000,000 4,000,000 57599BBB
2.20% 3/8/94 9,000,000 9,000,000 57599BBC
2.30% 3/10/94 3,000,000 3,000,000 57599BAY
2.30% 4/11/94 3,600,000 3,600,000 57599BBE
2.30% 4/12/94 10,000,000 10,000,000 57599BBD
2.35% 3/29/94 1,500,000 1,500,000 57599BBF
(New England Power Co. Proj.) Series 1992B
2.45% 2/2/94 VT 3,500,000 3,500,000 57599BAT
(New England Power Co. Proj.) Series1992B
2.30% 3/7/94 VT 4,000,000 4,000,000 57599BAW
(New England Power Co. Proj.) Series1993B
2.25% 3/8/94 VT 8,000,000 8,000,000 57599BAU
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev.: - continued
(Holyoke Wtr. Power Co. Proj.):
Series 1990, 2.45%, LOC Swiss Bank,
VRDN (b) $ 8,700,000 $ 8,700,000 575856BA
Series 1992 A, 2%, LOC Canadian
Imperial Bank, VRDN 7,500,000 7,500,00 575856BC0
Massachusetts Ind. Fin. Agcy. Resource Recovery Rev.
(Ogden-Haverhill Proj.) LOC Union Bank of Switzerland:
Series 1986 B, 2.55%, (b) 13,525,000 13,525,000
Series 1992 A, 2.05%, 10,000,000 10,000,000
Massachusetts Ind. Fin. Agcy. Rev. VRDN:
(Combined Jewish Philanthropies of Greater
Boston, Inc.) Series 1989 A, 2.90%,
LOC Nat'l. Westminster Bank 2,500,000 2,500,00 575914GG0
(New England Deaconess Assoc.) Series 1993 B,
2.45%, LOC Banque Paribas 1,500,000 1,500,000 575914XY
(Wheelock College Issue) Series A, 2.85%,
LOC Nat'l. Westminster Bank 5,000,000 5,000,000 575914CD
Massachusetts Muni. Electric Wholesale Supply Sys. Rev.
Variable Rate Demand Ctfs. (Liquidity Enhancement
Hong Kong & Shanhai Bank), VRDN(c):
Series 1993 D, 2.35% 4,400,000 4,400,00 91828FAQ0
Series 1993 E, 2.35% 4,000,000 4,000,00 91828FAT0
Massachusetts Muni. Wholesale Elec. Auth. Elec. Rev. Bonds:
Series 1985 A, 13.625% 1/1/95 70,000 77,537 5757659D
Series B,13.625% 1/1/95 2,285,000 2,570,591 575765GM
Massachusetts Turnpike Auth. Puttable Floating Option
Tax-Exempt Receipts, Series PA-26, 2.40%,
SBPA Merrill Lynch, VRDN (c) 5,000,000 5,000,000 576029BD
Massachusetts Wtr. Resource Auth. Rev. Bonds
(Water Poll. Abatement) Series 1993 A,
2.40% 2/1/94 2,400,000 2,400,000 576047AB
Northborough Ind. Rev.:
(Newcorr Packaging) Series 1990 3.05 9/1/94, MT
LOC Barclays Bank PLC (b) 4,000,000 4,000,000 663776AA
(Tru Realty Corp. Proj. Toys "R" Us, Inc)
3.125%, LOC Bankers Trust, VRDN 2,900,000 2,900,000 663774AB
Salem BAN 2.75% 2/24/94 6,350,000 6,350,780 794199PD
Sandwich Rfdg. Bonds 3% 11/1/94 (AMBAC Insured) 850,000 850,927
800239FD
University of Massachusetts Bldg. Auth. Rev. Bonds,
9.875% 5/1/94, (AMBAC Insured) 2,325,000 2,434,262 914437KX
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Worcester Gen. Oblig. Bonds 6% 8/1/94
(FSA Insured) $ 1,375,000 $ 1,396,713 981305BF
Worcester County BAN 2.95% 8/24/84
LOC State Street Bank & Trust Co. 6,825,000 6,832,380 981305DD
544,730,660
PUERTO RICO - 9.8%
Puerto Rico Commonwealth TRAN Series A, 3% 7/29/94 54,000,000 54,070,27
745144VX8
Puerto Rico Elec. Power Auth. Variable Rate Trust Certificates
2.075%, (Liquidity Enhancement Bankers Trust), VRDN (c) 3,060,000
3,060,000 99299DAA
Puerto Rico Gov't. Dev. Bank Rev., 2.65%,
LOC Credit Suisse & Sumitomo Bank, VRDN 2,000,000 2,000,000
745177AH
59,130,278
TOTAL MUNICIPAL SECURITIES - 100% $ 603,860,938
Total Cost for Income Tax Purposes $ 603,862,224
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At January 31, 1994, the fund had a capital loss carryforward of
approximately $119,100 of which $54,900 and $64,200 will expire on January
31, 1997 and 1998, respectively.
FIDELITY MASSACHUSETTS TAX-FREE MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1994
191.ASSETS 192. 193.
194.Investment in securities, at value (Note 1) - See 195. $ 603,860,938
accompanying schedule
196.Cash 197. 3,442,899
198.Interest receivable 199. 3,251,245
200. 201.TOTAL ASSETS 202. 610,555,082
203.LIABILITIES 204. 205.
206.Dividends payable $ 28,550 207.
208.Accrued management fee 212,726 209.
210.Other payables and accrued expenses 159,629 211.
212. 213.TOTAL LIABILITIES 214. 400,905
215.216.NET ASSETS 217. $ 610,154,177
218.Net Assets consist of: 219. 220.
221.Paid in capital 222. $ 610,273,264
223.Accumulated net realized gain (loss) on investment 224. (119,087)
s
225.226.NET ASSETS, for 610,175,353 shares outstandi 227. $ 610,154,177
ng
228.229.NET ASSET VALUE, offering price and redemptio 230. $1.00
n price per
share ($610,154,177 (divided by) 610,175,353 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JANUARY 31, 1994
231.232.INTEREST INCOME 233. $ 13,553,759
234.EXPENSES 235. 236.
237.Management fee (Note 4) $ 2,393,540 238.
239.Transfer agent, accounting and custodian fees and 1,330,075 240.
expenses (Note 4)
241.Non-interested trustees' compensation 8,495 242.
243.Registration fees 1,198 244.
245.Audit 26,409 246.
247.Legal 4,660 248.
249.Reports to shareholders 17,823 250.
251.Miscellaneous 6,402 252.
253. 254.TOTAL EXPENSES 255. 3,788,602
256.257.NET INTEREST INCOME 258. 9,765,157
259.REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTM 261. 28,587
ENTS
(NOTE 1)
260.Net realized gain (loss) on investment securities
262.Increase (decrease) in net unrealized gain from acc 263. (7,088)
retion
of market discount
264.265.NET GAIN (LOSS) 266. 21,499
267.268.NET INCREASE IN NET ASSETS RESULTING FROM O 269. $ 9,786,656
PERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR SIX MONTHS YEAR
ENDED ENDED ENDED
JANUARY 31, JANUARY 31, 1993 JULY 31,
1994 (NOTE 1) 1992
270.INCREASE (DECREASE) IN NET ASS
ETS
271.Operations $ 9,765,157 $ 5,820,975 $ 19,617,763
Net interest income
272. Net realized gain (loss) on 28,587 5,969 9,366
investments
273. Increase (decrease) in net unre (7,088) 7,088 -
alized
gain from accretion of market
discount
274. 9,786,656 5,834,032 19,627,129
275.NET INCREASE (DECREASE) IN
NET ASSETS
RESULTING FROM OPERATIONS
276.Dividends to shareholders from n (9,765,157) (5,820,975) (19,617,763)
et
interest income
277.Share transactions at net asset v 1,344,601,052 583,609,144 1,109,313,789
alue
of $1.00 per share
Proceeds from sales of shares
278. Reinvestment of dividends from 9,363,840 5,462,458 18,258,456
net
interest income
279. Cost of shares redeemed (1,328,771,708) (605,090,161) (1,241,203,539)
280. 25,193,184 (16,018,559) (113,631,294)
Net increase (decrease) in net
assets and shares resulting from
share transactions
281. 25,214,683 (16,005,502) (113,621,928)
282.TOTAL INCREASE (DECREASE) IN
NET
ASSETS
283.NET ASSETS 284. 285. 286.
287. Beginning of period 584,939,494 600,944,996 714,566,924
288. End of period $ 610,154,177 $ 584,939,494 $ 600,944,996
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
289. YEAR SIX MONTHS YEARS ENDED JULY 31,
ENDED ENDED
JANUARY 31, JANUARY 31,1993
290. 1994 (NOTE 1) 1992 1991 1990 1989
291.SELECTED PER-SHARE DATA
292.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
293.Income from Investment Operations .017 .010 .029 .046 .053 .055
Net interest income
294. Dividends from net interest income(.017) (.010) (.029) (.046) (.053) (.055)
295.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
296.TOTAL RETURN (dagger) 1.71 .99% 2.94 4.70 5.42 5.61
% % % % %
297.RATIOS AND SUPPLEMENTAL DATA
298.Net assets, end of period
(000 omitted) $ 610,154 $ 584,939 $ 600,945 $ 714,567 $ 750,877 $ 650,763
299.Ratio of expenses to average net
assets .66 .64%* .65 .60 .57 .60
% % % % %
300.Ratio of net interest income
to average net assets 1.69 1.96%* 2.93 4.60 5.33 5.50
% % % % %
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Massachusetts Tax-Free High Yield Portfolio and Fidelity
Massachusetts Tax-Free Money Market Portfolio (the funds) are funds of
Fidelity Massachusetts Municipal Trust (the trust). The trust is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust. On November 19, 1992, the Trustees approved a change in the
fiscal year end of the trust to January 31.Each fund is authorized to issue
an unlimited number of shares. The following summarizes the significant
accounting policies of the funds:
SECURITY VALUATION.
HIGH YIELD FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
losses deferred due to wash sales and futures and options transactions.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective February
1, 1993, the funds adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the funds changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of January 31, 1993 have been restated/reclassified
as follows:
HIGH YIELD FUND. Paid in capital and accumulated net realized loss on
investments decreased by $34,447.
MONEY MARKET FUND. Paid in capital and accumulated net realized loss on
investments increased by $97,911.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due to the inability
of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $574,180,480 and $528,500,892, respectively.
The market value of futures contracts opened and closed amounted to
$1,102,881,344 and $1,024,693,124, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a monthly basic fee that is
calculated on the basis of a group fee rate plus a fixed individual fund
fee rate applied to the average net assets of each
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
fund. The group fee rate is the weighted average of a series of rates
ranging from .15% to .37% and is based on the monthly average net assets of
all the mutual funds advised by FMR. The annual individual fund fee rate is
.25%. For the period, the management fees were equivalent to annual rates
of .41% of average net assets for the high yield and money market funds.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .1325% to .3700%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee (see Note 6).
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of each Board of Trustees, the Plans also authorize payments
to third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $24,520 and
$26,634 for the high yield and money market funds, respectively, for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the
funds. The Bank has entered into a sub-contract with Fidelity Service Co.
(FSC), an affiliate of FMR, under which FSC performs the activities
associated with the funds' transfer and shareholder servicing agent and
accounting functions. The funds pay transfer agent fees based on the type,
size, number of accounts and number of transactions made by shareholders.
FSC pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. The accounting fee is based on the level of
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$1,144,379 and $424,275 for the high yield fund and $1,151,924 and $109,375
for the money market fund, respectively.
Shareholders participating in the Fidelity Ultra Service Account(Registered
trademark) Program (the Program) pay a $5.00 monthly fee to Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, for performing
services associated with the Program.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
For the period, fees paid to FBSI by shareholders participating in the
Program amounted to $128,815.
5. BANK BORROWINGS.
The funds are permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The funds have established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the funds must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. For
the high yield fund, the maximum loan and the average daily loan balances
during the periods for which loans were outstanding amounted to $9,703,000
and $5,878,500, respectively, and the weighted average interest rate was
3.67%. Interest expense includes $2,066 paid under the bank borrowing
program.
6. SHAREHOLDER MEETING.
At a special meeting of shareholders of each fund held on January 19, 1994,
shareholders approved an amended management contract and amendments to
certain fundamental investment limitations of the funds.
The new management contract, which became effective on February 1, 1994
will reflect the new group fee rate schedule which FMR voluntarily
implemented on November 1, 1993.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Massachusetts Municipal Trust: and the
Shareholders of
Fidelity Massachusetts Tax-Free
High Yield Portfolio
Fidelity Massachusetts Tax-Free
Money Market Portfolio
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for Moody's and Standard
& Poor's ratings) and the related statements of operations and of
changes in net assets and financial highlights present fairly, in all
material respects, the financial position of Fidelity Massachusetts
Tax-Free High Yield Portfolio and Fidelity Massachusetts Tax-Free Money
Market Portfolio (each a fund of Fidelity Massachusetts Municipal Trust) at
January 31, 1994 and the results of their operations, the changes in their
net assets and their financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the trust's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards, which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities owned at January 31,
1994 by correspondence with the custodian and brokers and the application
of alternative procedures where confirmations from brokers were not
received provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
Boston, Massachusetts
March 4, 1994
DISTRIBUTIONS
The Board of Trustees of Fidelity Massachusetts Municipal Trust: Fidelity
Massachusetts Tax-Free High Yield Portfolio voted to pay on March 7, 1994
to shareholders of record at the opening of business on March 4, 1994, a
distribution of $.13 derived from capital gains realized from sales of
portfolio securities.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Guy Wickwire, Vice President
HIGH YIELD FUND
Jan Bradburn, Vice President
MONEY MARKET FUND
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
EXHIBIT 24(A)(2)
SPARTAN
(Registered trademark)
MASSACHUSETTS
MUNICIPAL
MONEY MARKET
PORTFOLIO
ANNUAL REPORT
JANUARY 31, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 14 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 18 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 20 The auditor's opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments-either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had not
reimbursed certain fund expenses during the periods shown, the total
returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan Massachusetts
Municipal Money Market 1.95% 8.59%
Consumer Price Index 2.52% 8.46%
Average Massachusetts
Tax-Free Money Market Fund 1.86% 7.96%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - one
year, or since the fund started on March 4, 1991. For example, if you
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Comparing the fund's performance to the consumer
price index (CPI) helps show how your investment did compared to inflation.
To measure how the fund stacked up against its peers, you can compare its
return to the average Massachusetts tax-free money market fund's total
return. This average currently reflects the performance of just 10
Massachusetts tax-free money market funds tracked by IBC/Donoghue. (The
periods covered by the CPI and IBC/Donoghue numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan Massachusetts
Municipal Money Market 1.95% 2.87%
Consumer Price Index 2.52% 2.81%
Average Massachusetts
Tax-Free Money Market Fund 1.86% 2.65%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
1/31/93 4/30/93 7/31/93 10/31/93 1/31/94
Spartan Massachusetts 2.11% 2.08% 2.05% 2.00% 1.83%
Municipal Money Market
Average Massachusetts 2.06% 1.94% 1.98% 1.92% 1.70%
Tax-Free Money
Market Fund
Spartan Massachusetts 3.75% 3.69% 3.62% 3.55% 3.24%
Money Market Fund -
Tax-equivalent
Average All Taxable 2.74% 2.62% 2.65% 2.66% 2.68%
Money Market Fund
Row: 1, Col: 1, Value: 2.11
Row: 1, Col: 2, Value: 2.06
Row: 2, Col: 1, Value: 2.08
Row: 2, Col: 2, Value: 1.94
Row: 3, Col: 1, Value: 2.05
Row: 3, Col: 2, Value: 1.98
Row: 4, Col: 1, Value: 2.0
Row: 4, Col: 2, Value: 1.92
Row: 5, Col: 1, Value: 1.83
Row: 5, Col: 2, Value: 1.7
Spartan
Massachusetts
Municipal Money
Market Fund
Average Massachuset
ts
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. The chart above shows the fund's seven-day yield at
quarterly intervals over the past year. You can compare these yields to the
average tax-free money market fund. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective federal and
Massachusetts state income tax rate of 43.68%; the tax-equivalent yields
reflect the fact that a portion of the fund's yields for the periods shown
were subject to state taxes. The tax-equivalent figures are useful in
seeing how the fund stacked up against the average taxable money market
fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn,
Portfolio Manager of Spartan
Massachusetts Municipal Money
Market Portfolio
Q. JAN, WHAT HAS THE SHORT-TERM SIDE OF THE MARKET BEEN LIKE OVER THE PAST
12 MONTHS?
A. Short-term interest rates have remained pretty stable. Both the federal
funds rate - what banks charge each other for overnight loans - and the
discount rate - what the Federal Reserve charges member banks - have been
at or near 3% since the fall of 1992. Inflation wasn't a big issue either,
despite brief scares last spring and again in November. Supply and demand
factors had a much bigger effect on how I managed the fund than movements
in interest rates.
Q. WHY?
A. Last fall, the short-term market experienced an unusually strong surge
in supply. This glut of new securities forced issuers to offer very
attractive yields, which provided enticing buying opportunities. I stocked
up, which lengthened the fund's average maturity from 33 days at the end of
July to 83 days at the end of September. Then supply began to dry up, and I
began to worry about the Fed possibly triggering a rise in interest rates.
I let the average maturity roll back down to 60 days by the end of January.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on January 31, 1994 was 1.83%, down from
2.11% a year ago. That reflects the general drop in short-term interest
rates over the past year. The latest yield translates into a tax-equivalent
yield of 3.24% for investors in the 43.68% combined effective 1994 federal
and state tax bracket. The fund's total return - which assumes reinvestment
of monthly dividends - for the 12 months ended January 31 was 1.95%. The
average Massachusetts tax-free money market fund had a total return of
1.86%.
Q. WHAT AFFECTED PERFORMANCE?
A. A 16% stake in simple derivatives helped the fund. These issues combine
a long-term municipal bond with a "put," or an option to sell to a third
party, typically a bank. The end product is an investment that pays a
short-term variable interest rate and can be put on short notice, usually
seven days. It acts much like any other variable rate demand note the fund
might own, with one key difference: the yield is slightly higher, a fact
that has more to do with the added complexity of these instruments than
added investment risk.
Q. WHAT'S AHEAD FOR THE FUND?
A. Early in February, the Fed raised the federal funds rate to 3.25%,
effectively raising all short-term interest rates. Although currently
inflation doesn't look like an increasing concern, I think there's a good
chance the Fed could make more of these "preemptive strikes" to curb
inflation threats before they happen. I'll prepare the fund for higher
rates in two ways: first, I plan to keep the average maturity in a neutral
range, say 50 to 60 days, and second, I'll most likely increase the fund's
investment in variable rate instruments. The coupons (stated interest
rates) on these securities are reset at fixed intervals - for example,
weekly or monthly. So when rates rise, the fund can benefit from higher
coupons at these reset intervals.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality short-term
Massachusetts municipal
securities
START DATE: March 4, 1991
SIZE: as of January 31, 1994,
over $346 million
MANAGER: Janice Bradburn,
since January 1992;
manager, Fidelity Ohio
Municipal Money Market
Portfolio, since October 1993;
Fidelity Massachusetts
Municipal Money Market
Portfolio, since 1992; Fidelity
New York Tax-Free Money
Market Portfolio, since
September 1989; Spartan
New York Municipal Money
Market Portfolio, since 1990
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
1/31/94 7/31/93 1/31/93
0 - 30 70.5 79.0 71.5
31 - 90 3.5 9.8 12.9
91 - 180 12.2 6.3 5.4
181 - 397 13.8 4.9 10.2
WEIGHTED AVERAGE MATURITY
1/31/94 7/31/93 1/31/93
Spartan Massachusetts
Money Market Fund 60 days 33 days 38 days
Average Massachusetts
Tax-Free Money 56 days 38 days 45 days
Market Fund*
ASSET ALLOCATION
AS OF 1/31/94 AS OF 7/31/93
Row: 1, Col: 1, Value: 62.0
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 12.6
Row: 1, Col: 4, Value: 15.1
Row: 1, Col: 5, Value: 6.3
Row: 1, Col: 1, Value: 60.1
Row: 1, Col: 2, Value: 12.5
Row: 1, Col: 3, Value: 9.9
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 9.5
Variable rate
demand notes
(VRDNs) 62.0%
Commercial
paper 4.0%
Tender bonds 12.6%
Municipal
notes 15.1%
Other 6.3%
Variable rate
demand notes
(VRDNs) 60.1%
Commercial
paper 12.5%
Tender bonds 9.9%
Municipal
notes 8.0%
Other 9.5%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
INVESTMENTS JANUARY 31, 1994
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - 87.7%
Beverly BAN 3.43% 12/2/94 LOC State Street
Bank & Trust Co. $ 1,774,000 $ 1,780,124 088095TV
Boston City Hosp. Rev. Puttable Floating Option Tax-Exempt
Receipts, Series PT-2, 2.35%, (Liquidity Enhancement
Bank National De Paris), VRDN (c) 500,000 500,000 101026BZ
Boston Gen. Oblig. Rfdg. Bonds, Series 1993 A,
3% 2/01/94 470,000 470,000 100852ZE
Boston Gen. Oblig. Tender Option Bond, (Liquidity
Enhancement Morgan Guaranty Trust Co.), VRDN (c):
Series 11A, 2.30% 2,000,000 2,000,000 100852ZW
Series 11C, 2.30% 1,500,000 1,500,000 100852ZW
Boston Wtr. & Swr. Commission Gen. Rev.
LOC Dai-Ichi Kangyo Bank, VRDN:
Series 1985 A, 1.80% 8,340,000 8,340,000 101029BE
Series 1985 B, 1.80% 5,400,000 5,400,000 101029BD
Clipper Tax-Exempt Trust Series 93-2 Class A Ctfs. of
Prtn. 2.14% (Liquidity Enhancement State Street
Bank & Trust Co.), VRDN (c) 15,630,200 15,630,20 188854AA0
Holyoke Poll. Cont. Rev. (Holyoke Pwr. & Light Proj.)
Series 1988, 2%, LOC Union Bank of
Switzerland, VRDN 3,400,000 3,400,000 436730AG
Lowell Gen. Oblig. State Qualified Bonds,
Series B, 7% 11/1/94, (FSA Insured) 1,000,000 1,029,981 547643K6
Massachusetts Bay Trans. Auth. RAN:
Series 1993 A, 2.80% 3/1/94 2,000,000 2,000,000 575566M3
Series 1993 B: 575566S9
3.25% 9/30/94 4,000,000 4,012,791 575566S8
3.50% 9/30/94 9,500,000 9,538,997 575566S9
Massachusetts Convention Ctr. Auth. (Hynes Proj. 1984)
Series A, 10% 9/01/94 2,000,000 2,121,781 575835BD
Massachusetts Gen. Oblig. Eagle Tax-Exempt Trust
Series 1993I 2.42, (Liquidity Enhancement Citibank),
VRDN (c) 7,800,000 7,800,000 269896AM
Massachusetts Gen. Oblig. Bonds:
Series A, 7.625% 6/1/94, (FGIC Insured) 500,000 507,753 575825WE
Series B, 10.75% 6/1/94 960,000 1,008,574 575823ND
Massachusetts Gen. Oblig. Cons. Loan Bonds,
Series B, 3.50% 10/1/94 1,500,000 1,507,281 575825B6
Series C, 6.90% 6/1/94, (AMBAC Insured) 1,300,000 1,316,530 575825MK
Massachusetts Gen. Oblig. Custodial Receipts,
Series 1993, 2.42%, (Liquidity Enhancement
Citibank) (c) 4,000,000 4,000,000 5758236L
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig. Puttable Floating
Option Tax-Exempt Receipts Series PA-13,
2.45%, (Liquidity Enhancement
Merrill Lynch & Co. Inc.), VRDN (c) $ 2,000,000 $ 2,000,000 575826BQ
Massachusetts Hlth. & Ed. Facs. Auth. Rev.: 575849LE
(Berkshire Consolidated Realty) Series A, 2%,
LOC Banque Paribas, VRDN 6,700,000 6,700,000 575850P9
(Boston Univ.) Series H, 2.45% 2/8/94, (Liquidity
Enhancement First Nat'l. Bank of Chicago) MT 25,000,000 25,000,000
575850NF
(Brigham & Womens Hosp.) Series A, 2%,
LOC Sanwa Bank, VRDN 2,000,000 2,000,000 575850PF
(Capital Asset Prog.) VRDN:
Series 1985 D, 2.20%, (MBIA Insured)
BPA Sanwa Bank 15,300,000 15,300,000 575850MP
Series A, 2%, LOC First Nat'l. Bank of Chicago 7,100,000 7,100,000
575849LE
Series E, 2.25%, LOC Sanwa Bank 9,300,000 9,300,000 575850NE
Series G1, 2.35%, (MBIA Insured) BPA Credit Suisse 13,800,000
13,800,00 575850XE0
(Harvard Univ.):
2.15% 2/10/94, VT 2,000,000 2,000,000 57599ACX
Series I, 2.05%, VRDN 33,931,000 33,931,000 575850HW
(MIT) Series G, 2.05%, VRDN 8,000,000 8,000,000 5758502J
(Mt. Ida College) 2.05%, LOC Chemical Bank, VRDN 3,000,000 3,000,000
575850VD
(Wellesley College) Series B, 2%, VRDN 2,300,000 2,300,000 575851NQ
Massachusetts Hlth. & Ed. Facs. Auth. Rev. Bonds: 575849LE
(Brigham & Womens Hosp.):
Series E, 2.85% 7/1/94 1,560,000 1,560,000 575851S6
(Milton Med. Ctr.) Series A, 11% 7/1/94 1,000,000 1,052,988 575850GB
(Univ. Hosp.) Series B, 10.625% 7/1/94 5,490,000 5,772,543 575850GD
Massachusetts Hsg. Fin. Agcy. Single Family Hsg. Rev. MT:
Series 23, 2.75% 6/1/94 (FGIC Insured) 1,000,000 1,000,000 575910T7
Series 25, 2.95% 9/1/94 15,500,000 15,500,20 5759105B7
Massachusetts Hsg. Fin. Agcy. Tender Option Bonds, 2.30%,
(Liquidity Enhancement Morgan Guaranty Trust Co.),
VRDN (c):
Series 12A 2.30% 2,000,000 2,000,000
Series 12C 2.30% 3,800,000 3,800,000
Massachusetts Ind. Fin. Agcy. Ind. Rev. VRDN:
Rfdg. (First Healthcare Corp. Proj.) Series 1992 B, 2.35%,
LOC Wachovia Bank of Georgia 1,130,000 1,130,000 575920AC
Rfdg. (First Healthcare Corp. for Hillhaven Proj.) 2.35%,
LOC Wachovia Bank of Georgia 1,195,000 1,195,000 575855H7
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Ind. Rev. VRDN: - continued
Rfdg. (Quamco Inc. Proj.) LOC Banca Commerciale Italiana:
Series 1988 A, 2% $ 730,000 $ 730,000 575855ZQ
Series 1988 B, 2% 920,000 920,000 575855ZR
(General Signal Proj.) 2.20%, LOC Wachovia Bank
of Georgia 2,100,000 2,100,000 575855H4
(Manhasset Bay-Cambridge) Series 1985, 2.05%,
LOC Bank of Tokyo 3,900,000 3,900,000 575855EA
(Tsubaki Inc.) 2.50% LOC Sakura Bank 1,700,000 1,700,000 575855A3
(United Medical Corp.) Series 1992, 2.20%
LOC Chemical Bank (b) 1,500,000 1,500,000 575855G7
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev. VRDN:
Rfdg. (Holyoke Wtr. & Pwr. Co. Proj.) Series 1992 A, 2%,
LOC Canadian Imperial Bank of Commerce 800,000 800,000 575856BC
(Holyoke Wtr. Pwr. Co. Proj.) Series 1990, 2.45%,
LOC Swiss Bank (b) 2,600,000 2,600,000 575856BA
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev. Rfdg.
(New England Power Co. Proj.) Series 1992-B, VT:
2.30% 4/11/94 11,000,000 11,000,000 57599BBE
2.30% 4/12/94 1,000,000 1,000,000 57599BBD
Massachusetts Ind. Fin. Agcy. Resource Recovery Rev.
(Ogden-Haverhill Proj.) LOC Union Bank of Switzerland,
VRDN:
Series 1986 B, 2.55% (b) 7,750,000 7,750,000 575912AR
Series 1992 A, 2.05% 7,595,000 7,595,000 575912AX
Massachusetts Ind. Fin. Agcy. Rev.
(New England Deaconess Assoc.) Series 1993 B, 2.45%,
LOC Banque Paribas, VRDN 1,000,000 1,000,000 575914XY
Massachusetts Ind. Fin. Agcy. Rev. Rfdg.
(WGBH Ed. Foundation Proj.) Series 1992, 2.20%,
LOC Nat'l. Westminster Bank, VRDN 2,555,000 2,555,000 575914VP
Massachusetts Muni. Wholesale Elec. Auth. Elec. Rev. Bonds:
Series 1985 A, 13.625% 1/1/95 60,000 66,459 5757659D
Series B,13.625% 1/1/95 1,940,000 2,182,470 575765GM
Massachusetts Muni. Elec. Wholesale Supply Sys. Rev. Variable
Rate Demand Ctfs. (Liquidity Enhancement Hong Kong
& Shanghai Banking Corp.), VRDN (c) 91828FAQ:
Series 1993 D, 2.35% 2,800,000 2,800,000 91828FAQ
Series 1993 E, 2.35% 2,000,000 2,000,000 91828FAT
Massachusetts Turnpike Auth. Puttable Floating Option
Tax-Exempt Receipts Series PA-26, 2.40%,
SBPA Merrill Lynch, VRDN (c) 4,160,000 4,160,000 576029BD
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Northampton Gen. Oblig. Bonds 6.50% 9/1/94
(AMBAC Insured) $ 850,000 $ 868,386 663617KS
Northborough Ind. Rev. (Newcorr Packaging) Series 1990
3.05% 9/1/94, LOC Barclays Bank PLC, MT (b) 2,335,000 2,335,000
663776AA
Sandwich Rfdg. Bonds 3% 11/1/94
(AMBAC Insured) 800,000 800,872 800239FD
University of Massachusetts Bldg. Auth. Rev. Bonds,
9.875% 5/1/94, (AMBAC Insured) 400,000 418,880 914437KX
Westfield Gen. Oblig. Bonds 6.75% 9/1/94
(FSA Insured) 1,000,000 1,022,460 960096PM
Worcester County BAN 2.95% 8/24/94
LOC State Street Bank & Trust Co. 5,000,000 5,005,408 981305DD
304,115,685
MICHIGAN - 1.0%
Michigan Hosp. Fin. Auth. Rev. (Daughters of Charity
Health Sys. Providence Hosp.) Series 1984,
2.25%, FRDN 3,600,000 3,600,000 594648IA
PUERTO RICO - 11.3%
Puerto Rico Commonwealth TRAN Series A, 3%
7/29/94 30,000,000 30,038,93 745144VX2
Puerto Rico Elec. Power Auth. Variable Rate Trust
Ctfs. 2.075%,(Liquidity Enhancement
Bankers Trust), VRDN (c) 7,140,000 7,140,000 99299DAA
Puerto Rico Hwy. and Trans. Rev., Series 1993 X,
2.05%, LOC Union Bank of Switzerland, VRDN 1,000,000 1,000,000 745181LA
Puerto Rico Ind. Med. Higher Ed. & Envir. Cont. Facs. Fin.
Auth. Rev. (Mendez/Feagm Proj.) Series 1985, 1.95%,
LOC Bank of Tokyo, VRDN 1,000,000 1,000,000 745271DP
39,178,932
TOTAL INVESTMENTS - 100% $ 346,894,617
Total Cost for Income Tax Purposes $ 346,895,353
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(e) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(f) Provides evidence of ownership in one or more underlying municipal
bonds.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1994
7.ASSETS 8. 9.
10.Investment in securities, at value (Note 1) - See 11. $ 346,894,617
accompanying schedule
12.Interest receivable 13. 1,807,928
14. 15.TOTAL ASSETS 16. 348,702,545
17.LIABILITIES 18. 19.
20.Share transactions in process $ 151,261 21.
22.Dividends payable 15,995 23.
24.Accrued management fee 150,136 25.
26.Payable to custodian bank 1,505,268 27.
28. 29.TOTAL LIABILITIES 30. 1,822,660
31.32.NET ASSETS 33. $ 346,879,885
34.Net Assets consist of: 35. 36.
37.Paid in capital 38. $ 346,878,812
39.Accumulated net realized gain (loss) on investments 40. 1,073
41.42.NET ASSETS, for 346,877,387 shares outstanding 43. $ 346,879,885
44.45.NET ASSET VALUE, offering price and redemption 46. $1.00
price per share ($346,879,885 (divided by) 346,877,387 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED JANUARY 31, 1994
47.48.INTEREST INCOME 49. $ 7,934,833
50.EXPENSES 51. 52.
53.Management fee (Note 2)
$ 1,695,083
54.Non-interested trustees' compensation 2,296 55.
56. Total expenses before reductions 1,697,379 57.
58. Expense reductions (Note 3) (330,923) 1,366,456
59.60.NET INTEREST INCOME 61. 6,568,377
62.REALIZED AND UNREALIZED GAIN (LOSS) ON 64. 1,073
INVESTMENTS
(NOTE 1)
63.Net realized gain (loss) on investment securities
65.Increase (decrease) in net unrealized gain from 66. (3,817)
accretion
of market discount
67.68.NET GAIN (LOSS) 69. (2,744)
70.71.NET INCREASE IN NET ASSETS RESULTING FROM 72. $ 6,565,633
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR SIX MONTHS YEAR
ENDED ENDED ENDED
JANUARY 31, JANUARY 31, 1993 JULY 31,
1994 (NOTE 1) 1992
73.INCREASE (DECREASE) IN NET
ASSETS
74.Operations $ 6,568,377 $ 3,871,245 $ 7,781,101
Net interest income
75. Net realized gain (loss) on 1,073 1,496 1,169
investments
76. Increase (decrease) in net (3,817) 3,817 -
unrealized
gain from accretion of market
discount
77. 78.NET INCREASE (DECREASE) IN 6,565,633 3,876,558 7,782,270
NET ASSETS
RESULTING FROM OPERATIONS
79.Dividends to shareholders from (6,568,377) (3,871,245) (7,781,101)
net interest income
80.Share transactions at net asset 427,705,579 231,918,702 408,295,303
value
of $1.00 per share
Proceeds from sales of shares
81. Reinvestment of dividends from 6,265,299 3,670,571 7,467,589
net
interest income
82. Cost of shares redeemed (420,743,406) (180,308,760) (259,509,115)
83. Net increase (decrease) in net 13,227,472 55,280,513 156,253,777
assets and shares resulting from
share transactions
84. 85.TOTAL INCREASE (DECREASE) 13,224,728 55,285,826 156,254,946
IN
NET ASSETS
86.NET ASSETS 87. 88. 89.
90. Beginning of period 333,655,157 278,369,331 122,114,385
91. End of period $ 346,879,885 $ 333,655,157 $ 278,369,331
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
92. YEAR SIX MONTHS YEAR MARCH 4, 1991
ENDED ENDED ENDED (COMMENCEME
JANUARY 31, JANUARY 31, 1993 JULY 31, NT
OF OPERATIONS)
TO JULY 31,
93. 1994 (NOTE 1) 1992 1991
94.SELECTED PER-SHARE DATA
95.Net asset value, 1.000 1.000 1.000 1.000
beginning of period
96.Income from Investment .019 .012 .034 .017
Operations
Net interest income
97. Dividends from net (.019) (.012) (.034) (.017)
interest income
98.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
99.TOTAL RETURN (dagger) 1.95% 1.23% 3.45% 1.71%
100.RATIOS AND
SUPPLEMENTAL DATA
101.Net assets, end of period $ 346,880 $ 333,655 $ 278,369 $ 122,114
(000 omitted)
102.Ratio of expenses to .40% .17%* .05% -
average
net assets (dagger)(dagger)
103.Ratio of expenses to .50% .50%* .50% .50%
average *
net assets before expense
reductions (dagger)(dagger)
104.Ratio of net interest 1.93% 2.44%* 3.29% 4.17%
income to *
average net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 3 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Massachusetts Municipal Money Market Portfolio (the fund) is a fund
of Fidelity Massachusetts Municipal Trust (the trust) and is authorized to
issue an unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust.
On November 19, 1992, the Trustees approved a change in the fiscal year end
of the trust to January 31. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year.
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security's disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective February
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of January 31, 1993 have been restated to reflect
an increase in paid in capital and a decrease in accumulated net realized
gain on investments of $1,425.
SECURITY TRANSACTIONS. Security trans-
actions are accounted for as of trade date. Gains and losses on securities
sold are determined on the basis of identified cost.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
expenses. FMR receives a fee that is computed daily at an annual rate of
.50% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $11,827.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
3. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During the
period, this expense limitation ranged from .25% to .50% of average net
assets and the reimbursement reduced expenses by $330,923.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Fidelity Massachusetts Municipal Trust:
Spartan Massachusetts Municipal
Money Market Portfolio
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of Spartan
Massachusetts Municipal Money Market Portfolio at January 31, 1994, the
results of its operations for the year then ended, the changes in its net
assets for the year then ended, the six-month period ended January 31,
1993, and the year ended July 31, 1992, respectively, and its financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities owned at January 31, 1994 by correspondence with
the custodian provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
Dallas, Texas
February 28, 1994
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
FIDELITY'S TAX-FREE
MONEY MARKET FUNDS
California Tax-Free Money Market
Connecticut Municipal Money Market
Massachusetts Tax-Free Money Market
Michigan Municipal Money Market
New Jersey Tax-Free Money Market
New York Tax-Free Money Market
Ohio Municipal Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Tax-Exempt Money Market
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
